Buhach v Transport for New South Wales

[2022] NSWLEC 148

Land and Environment Court

New South Wales

Medium Neutral Citation:

Buhach v Transport for New South Wales [2022] NSWLEC 148

Hearing dates:

11, 12, 13, 14 and 18 August 2020, 25 and 26 March 2021, 23 and 24 August 2021 and 2 and 10 December 2021

Date of orders:

12 December 2022

Decision date:

12 December 2022

Jurisdiction:

Class 3

Before:

Pepper J

Decision:

See orders at [315].

Catchwords:

COMPULSORY ACQUISITON: determination of the market value of two parcels of acquired land, leases and an easement – determination of the market value of residue land – determination of affection and betterment – assessment of the highest and best use of acquired lands not rural – valuation methodology – assessment of valuation evidence – determination of disturbance – whether fees associated with withdrawal of first proposed acquisition notices claimable – whether additional valuation fees claimable – whether planning and survey costs claimable – whether relocation costs claimable.

Legislation Cited:

Environmental Planning and Assessment Act 1979, s 9.1

Land Acquisition (Just Terms Compensation) Act 1991, Pts 2, 3, 4, ss 11, 12, 16, 54(1), 55, 56, 59, 66, 67, 71

Liverpool Local Environmental Plan 2008

State Environmental Planning Policy (Western Sydney Aerotropolis) 2020, cll 18, 25

State Environmental Planning Policy (Western Sydney Employment Area) 2009

Cases Cited:

Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165

Apokis v Transport for NSW (2020) 101 NSWLR 844; [2020] NSWCA 39

Attard v Transport for NSW (2014) 205 LGERA 396; [2014] NSWLEC 44

Barkat v Roads and Maritime Services [2019] NSWCA 240

Blacktown City Council v Fitzpatrick Investments [2001] NSWCA 259

Cook v Roads and Traffic Authority of New South Wales [2007] NSWLEC 136

Croghan v Blacktown City Council (2019) 100 NSWLR 757; [2019] NSWCA 248

Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Limited (1934) 51 CLR 509; [1934] HCA 41

Eureka Operations Pty Ltd v Transport for New South Wales (2021) 249 LGERA 78; [2021] NSWLEC 41

Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547

Kirela Pty Ltd v Minister Administering Environmental Planning and Assessment Act 1979 (2005) 141 LGERA 40; [2005] NSWCA 108

Maidment v Roads and Traffic Authority (NSW) (2006) 153 LGERA 249; [2006] NSWLEC 206

Marroun v Roads and Maritime Services [2012] NSWLEC 199

Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251

Moloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252

New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135

Penfold and Bracey v Health Administration Corporation [2009] NSWLEC 157

Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307; [2016] NSWCA 7

Roads and Maritime Services v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41

Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243

Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82

Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391

Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4

Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56

UTSG Pty Ltd v Sydney Metro (No 6) [2020] NSWLEC 63

Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5

Category:

Principal judgment

Parties:

Proceedings 2019/00075642
Zdravko Buhach (Applicant)
Transport for New South Wales (Respondent)
Proceedings 2019/00075655
John Zdravko Buhach (First Applicant)
Sandy Lenka Buhach (Second Applicant)
Transport for New South Wales (Respondent)

Representation:

Counsel:
Proceedings 2019/00075642
R Lancaster SC and N Eastman (Applicant)
Dr S Pritchard SC, A Hemmings and T Poisel (Respondent)
Proceedings 2019/00075655
R Lancaster SC and N Eastman (First and Second Applicants)
Dr S Pritchard SC, A Hemmings and T Poisel (Respondent)

Solicitors:
Proceedings 2019/00075642
Project Lawyers (Applicant)
Herbert Smith Freehills (Respondent)
Proceedings 2019/00075655
Project Lawyers (First and Second Applicants)
Herbert Smith Freehills (Respondent)

File Number(s):

2019/00075642
2019/00045655

Publication restriction:

Nil

Judgment

TOPIC PARAGRAPH

TNSW Acquires Part of the Z Buhach and the Buhachs’s Lands for the Public Purpose of Roadworks 1

The Land at 2292 The Northern Road (the Buhachs Proceedings) 6

Characteristics of the Buhachs’s Parent Parcel 13

Characteristics of the Buhachs’s Residue Land 25

Buhachs’s Property Summary 26

The Land at 2700 Elizabeth Drive (the Z Buhach Proceedings) 27

Characteristics of the Z Buhach Parent Parcel 34

Characteristics of the Z Buhach Residue Land 43

Z Buhach Property Summary 64

JT Act Statutory Framework 65

The Claims for Compensation 69

The Buhachs Proceedings (2292 The Northern Road) 69

The Z Buhach Proceedings (2700 Elizabeth Drive) 76

Market Value 83

Issues for Determination 85

The Highest and Best Use of the Lands 86

The Uncontroversial Strategic Planning History of the Subject Lands 86

Town Planning Expert Evidence 95

Haskew 96

Rowan 101

The Submissions of Applicants on Highest and Best Use 104

The Submissions of TNSW on Highest and Best Use 101

The Highest and Best Use of the Acquired Lands is Not that of a Rural Designation 116

Valuation Methodology 132

Expert Valuation Evidence 143

Valuation Evidence in the Before Scenarios 155

Phippen 155

Lunney 164

Summary of the Joint Valuation Evidence 171

Supplementary Joint Valuation Expert Report 173

Findings in Respect of the Expert Valuation Evidence 181

Valuation in the After Scenarios 214

Injurious Affection and Betterment of the Z Buhach Property (2700 Elizabeth Drive) 215

Phippen – Northern Residue Land 216

Phippen – Southern Residue Land 219

The Acquired Easement 223

Phippen – Summary of Affection and Betterment of the Z Buhach Residue Lands 226

Lunney – Northern Residue Land 228

Lunney – Southern Residue Land 231

The Acquired Easement 232

Lunney – Summary of Affection and Betterment of the Z Buhach Residue Lands 233

Findings on the ‘After’ Scenario for the Z Buhach Residue Lands 234

The Affect of the Acquisition on the Buhachs’s Property (2292 The Northern Road) 241

Phippen 241

Lunney 246

Findings on the After Scenario for the Buhachs’s Property 251

The Acquired Construction Leases 256

The Z Buhach Acquired Construction Lease (2700 Elizabeth Drive) 256

The Buhachs’s Acquired Construction Lease (2292 The Northern Road) 265

Disturbance 270

Fees Associated with the Withdrawal of the First PANs 272

Dobrow Valuations Fees 284

Planning and Survey Costs 289

Relocation Costs 296

GST 305

Summary of Disturbance Compensation 309

The Z Buhach Proceedings (2700 Elizabeth Drive) 309

The Buhach Proceedings (2292 The Northern Road) 311

Compensation Payable 313

The Z Buhach Proceedings (2700 Elizabeth Drive) 313

The Buhachs Proceedings (2292 The Northern Road) 313

Costs 314

Orders 315

TNSW Acquires Part of the Z Buhach and the Buhachs’s Lands for the Public Purpose of Roadworks

1. This judgment concerns the resolution of two separate proceedings for compensation by three applicants, Zdravko Buhach (“Z Buhach”) in one matter, and John and Sandy Buhach (“the Buhachs”) in the other (together, where appropriate, “the applicants”), following the compulsory acquisition by the respondent, Transport for New South Wales (the statutory successor to the former Roads and Maritime Services (“RMS”)) (“TNSW”), brought pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (“the JT Act”), in respect of the partial compulsory acquisition of the applicants’ freehold, leasehold and easement interests in the lands located at 2700 Elizabeth Drive, Luddenham and 2292 The Northern Road, Luddenham, respectively.

2. The acquisition was for the purpose of the Roads Act 1993. More specifically, The Northern Road Upgrade, Stage 6 (“the public purpose”), which comprised the widening and re-alignment of The Northern Road and Elizabeth Drive. It involved the delivery of a 35 km upgrade of The Northern Road between Old Northern Road, Narellan and Jamieson Road, South Penrith, which is to be undertaken in six stages.

3. For the reasons provided below, Z Buhach is awarded $10,042,465 and the Buhachs are awarded $2,313,511 as compensation for the acquisition of their acquired interests.

4. I acknowledge the considerable assistance provided to me by Kempthorne AC. All reasoning and findings are, however, my own.

5. The facts relevant to the determination of the two matters upon which reliance was placed by all parties are set out below.

The Land at 2292 The Northern Road (the Buhachs Proceedings)

6. Located approximately 1.1 km south of Elizabeth Drive is land identified as Lot 3 in DP 827223 and known as 2292 The Northern Road, Luddenham (“the Buhachs’s parent parcel”).1F

7. On 29 March 2018 TNSW issued a proposed acquisition notice to the Buhachs under the JT Act (“the first Buhachs PAN”).

8. Subsequently, on 29 June 2018, TNSW notified the Buhachs that it was withdrawing the first PAN. This formally occurred on 29 June 2018.

9. That same day, TNSW issued a further proposed acquisition notice on the Buhachs (“the second Buhachs PAN”).

10. The first Buhachs PAN and the second Buhachs PAN were issued in respect of the same interests in the parent parcel.

11. By acquisition notice published in Government Gazette No 105 of 12 October 20182F (“the acquisition date”), TNSW formally compulsorily acquired the following interests in the parent parcel (together, “the Buhachs’s acquired interests”):3F

1. freehold interest in Lot 11, DP 12405114, being part of the land in certificate of title 3/827223, comprising 1.05 ha (10,500m²) (“the Buhachs’s acquired land”); and

2. a two-year leasehold interest over Lot A in RMS Sketch SR 4696-CA, being part of the land in certificate of title 3/827223, comprising 0.144 ha (1,440m²) (“the Buhachs’s lease”).

12. As at the acquisition date, the Buhachs were the registered proprietors of the parent parcel.9F

Characteristics of the Buhachs’s Parent Parcel

13. In respect of the Buhachs’s proceedings, prior to the TNSW acquisition, the land comprised 10.65 ha (106,530m²). It is battle axe shaped, with a 10m wide access handle to The Northern Road over a distance of 535m. The land contains three dams, one of which is large and centrally located. Land to the southeast and west of the main dam drains to that dam. Land to the north drains to northern adjoining properties by a natural overland flow path and series of farm dams.

14. The Buhachs’s parent parcel is situated:22

1. 750m northeast of the Village of Luddenham;

2. 13 km south of the regional centre of Penrith;

3. 21 km northwest of the regional centre of Liverpool;

4. 48 km due west of the City of Sydney GPO; and

5. 1 km from the new airport at Badgerys Creek.

15. The Buhachs’s parent parcel is battle axe shaped, sloping down from the north and the south to a central drainage depression traversing the land in a generally northwest to southeast direction.

16. As at the acquisition date:

1. the Buhachs’s parent parcel was improved with a single storey clad and metal sheet roof dwelling, two large metal sheet sheds and other ancillary sheds, water tanks, septic tanks and post and wire fencing;

2. the Buhachs’s parent parcel had access to The Northern Road from the driveway facilitating vehicular access from the western boundary of that parcel; and

3. there was also an unformed reserved (or paper) road identified on DP 1240511 on the eastern boundary of the Buhachs’s parent parcel (20.115m wide and approximately 585m long). No portion of this paper road has been constructed and it did not have any physical opening to The Northern Road.

17. The Buhachs’s parent parcel is not serviced with reticulated wastewater services.

18. The Buhachs’s parent parcel is subject to the following registered instruments:

1. a right of carriageway (DP563121);31F

2. a number of leases to Crown Castle Australia Pty Ltd (AC341520, AC341521, AI449250, AI449251 and AK141182); and

3. a number of leases to Telstra Corporation Ltd (AH959472, AH959473, AH959474 and AH959475).

19. The Buhachs’s parent parcel is zoned RU1 – Primary Production under the Liverpool Local Environmental Plan 2008 (“the LLEP”), other than a narrow strip along the road frontage which is zoned SP2 – Infrastructure under the LLEP.

20. The Buhachs’s parent parcel is within the Broader Western Sydney Employment Area Precinct (“BWSEA precinct”) under the State Environmental Planning Policy (Western Sydney Employment Area) 2009 (“WSEA SEPP”). Further, the parent parcel is identified as “Unzoned Land” under the WSEA SEPP and its permitted uses are generally limited to those identified in the RU1 land use table of the LLEP.

21. The Buhachs’s parent parcel is also within the Western Sydney Aerotropolis Growth Centre (“WSAGA”) under the Greater Sydney Regional Plan: A Metropolis of Three Cities – connecting people (“Greater Sydney Regional Plan”) prepared by the Greater Sydney Commission. It was agreed that, as at the acquisition date, the future development potential of the parcel was likely to be reflected in the planning outcomes contained in the Stage 1 Land Use and Infrastructure Implementation Plan (“Stage 1 LUIIP”).

22. The Buhachs’s parent parcel is not identified within the projected noise contours in the mapping associated with the future operation of the Western Sydney Airport.

23. According to the town planning experts, the public purpose did not have any adverse impact on access to The Northern Road from the driveway facilitating vehicular access from the western boundary of the Buhachs’s parent parcel. On the contrary, the public purpose will in all likelihood make the driveway safer because the road is anticipated to become a local road with a reduced speed limit.

24. There was, however, disagreement between the town planning experts in relation to the impact of the public purpose on the paper road (see further below).

Characteristics of the Buhachs’s Residue Land

25. Following the acquisition, the Buhachs were the registered proprietors of the residue of the parent parcel identified as Lot 2 in DP 1240511, comprising an area of 9.603 ha (96,030m²) (“the Buhachs’s residue land”):

Buhachs’s Property Summary

26. The area of the Buhachs parent parcel, the acquired lease and the residue land is as follows:

Land	Area
Parent parcel	106,530 m²	10.65 ha
Acquired land	10,500 m²	1.05 ha
Acquired lease (2 years)	1,440 m²	0.14 ha
Residue land (area after acquisition)	94,590 m²	9.46 ha

The Land at 2700 Elizabeth Drive (the Z Buhach Proceedings)

27. Located approximately 1.6 km north of the boundary of the Western Sydney Airport and on the south-eastern corner of The Northern Road and Elizabeth Drive is land identified as Lot 1 in DP 517853, known as 2700 Elizabeth Drive (“the Z Buhach parent parcel”). The parcel comprises an area of 12.14 ha (121,400m²).

28. Similar to the Buhachs, on 29 March 2018 TNSW issued a proposed acquisition notice on Z Buhach under the JT Act (“the first Z Buhach PAN”).

29. On 29 June 2018, TNSW advised Z Buhach that it was withdrawing the first Z Buhach PAN, which occurred that day.

30. That same day, TNSW issued a further proposed acquisition notice on Z Buhach (“the second Z Buhach PAN”).

31. By acquisition notice published in Government Gazette No 105 of 12 October 2018, TNSW formally compulsorily acquired the following interests in the Z Buhach parent parcel (together, “the Z Buhach acquired interests”):

1. freehold interest in Lot 17, DP 1240511, being part of the land in certificate of title 1/517853, comprising 4.323 hectares (43,230m²) (“the Z Buhach acquired land”);

2. an easement interest over the site designated “K” on DP 1240511, being part of the land in certificate of title 1/517853, comprising 486.7m² (“the Z Buhach easement”); and

3. a two year leasehold interest over Lots A, B and C in RMS Sketch SR 4692-CA, being part of the land in certificate of title 1/517853, comprising 27,810m² (“the Z Buhach lease”).

32. As at the acquisition date, Z Buhach was the registered proprietor of the Z Buhach parent parcel.

33. Following the acquisition, Z Buhach remains the registered proprietor of the residue of the Z Buhach parent parcel identified as Lot 8 in DP 1240511 which consists of the following two sections (together, “the Z Buhach residue land”):

1. the northern residue land comprising 1.141 ha (11,410m²) (“the northern residue land”); and

2. the southern residue land comprising 6.673 ha (66,730m²) (“the southern residue land”).

Characteristics of the Z Buhach Parent Parcel

34. The Z Buhach parent parcel is situated:

1. 1.3 km northeast of the Village of Luddenham;

2. 13 km south of the regional centre of Penrith;

3. 21 km northwest of the regional centre of Liverpool;

4. 48 km due west of the City of Sydney GPO; and

5. 1 km from the new airport at Badgerys Creek.

35. The Z Buhach parent parcel has a gently sloping topography, away from the north-western corner down towards the south-eastern corner.

36. As at the acquisition date, the Z Buhach parent parcel had the following improvements:

1. two existing dwellings comprising:

1. one brick veneer and tile dwelling with a double garage under the main roof (approximately 325m²); and

2. a brick veneer and tile dwelling (approximately 145m²);

2. three steel framed metal clad workshop/storage sheds with concrete floors, approximately 145m², 400m² and 170m², respectively;

3. one new metal clad sales shed/warehouse with amenities and a concrete floor, of approximately 200m²;

4. two dams;

5. a pump and irrigation system, driveways, fencing and formed paths and roadside signage; and

6. at least two vehicle access points off The Northern Road.

37. The Z Buhach parent parcel is not serviced with reticulated wastewater services.

38. The Z Buhach parent parcel is subject to a registered covenant.

39. The parent parcel is zoned RU1 – Primary Production under the LLEP.

40. The Z Buhach parent parcel is within the BWSEA precinct under WSEA SEPP. Further, it is identified as “Unzoned Land” and the permitted uses under the WSEA SEPP are generally limited to those permitted in the RU1 land use table of the LLEP.

41. The Z Buhach parent parcel is within the WSAGA under the Greater Sydney Regional Plan. It was similarly not a matter of controversy between the parties that, as at the acquisition date, the future development potential of the parent parcel was likely to be reflected in the planning outcomes contained in the Stage 1 LUIIP.

42. The Z Buhach parent parcel is not identified within the projected noise contours in the mapping associated with the future operation of the Western Sydney Airport.

Characteristics of the Z Buhach Residue Land

43. It was not in dispute that the public purpose has increased local catchment areas to the point of discharge at the upstream end of the southern residue land on which the acquired easement is located (“the easement land”) resulting in a reduction in the total catchment area draining to the eastern boundary of the southern residue land.

44. In addition, the public purpose will result in increases in the average annual volume of runoff that flows into the two existing farm dams located on the southern residue land (dam 1 and dam 2) which will in turn result in:

1. increased runoff into the dams;

2. the filling up of the dams more quickly; and

3. more frequent overflows into downstream dams.

45. The increased volume of runoff from the public purpose will not elevate the risk of scouring of the area below the dam 2 spillway.

46. The peak flow rates discharging to the upstream end of the easement land and the dam 1 and dam 2 outlets will increase as a result of the public purpose.

47. If the southern residue land is developed for a use which requires the provision of on-site detention and water quality controls, an increased pipe size will be required as a result of the increased peak flow rates at the upstream end of the easement land.

48. If the southern residue land is used for its current or a similar agricultural use, the increased peak flow rates at the upstream end of the easement land will have a negligible effect on the continuation of that use.

45. In relation to the increased peak flow rates discharging from dam 1, the increase is minor and, again, will not significantly increase the risk of scouring of the spillway or the downstream channel.

46. The public purpose has changed the extent of the catchments to dam 1 and dam 2, and concentrated the point of discharge of flow off the road and the northern residue land, however, the public purpose will appropriately manage the risk of scouring at the condensed points of discharge.

47. If a future development use dictated the need to capture and pipe the flows through the site, the increase in flows at the upstream end of the easement land would result in an increase in the cost of piping the flows from the external catchment through the southern residue land.

48. If a future development use necessitated the provision of stormwater detention and water quality treatment measures (such as, for example, a development requiring the construction of significant hardstand and/or buildings), then a developer would most likely seek approval to pipe the flows off the road catchment through the southern residue land, so that the flows off the external catchment bypassed the detention and water quality measures.

49. The increase in flows at the upstream end of the easement land would result in the size of the bypass pipe draining the external catchment through the southern residue land increasing from 825mm to 1,200mm in diameter.

50. The bypass pipe would discharge at the eastern boundary of the southern residue land and would be an extra cost to future development as a result of the public purpose.

51. The peak flow management requirements associated with the public purpose may be resolved by implementing a bypass drainage pipe system for future development use, which would also require the provision of on-site detention and water quality controls, if accepted by a consent authority.

52. If the bypass drainage pipe system is not accepted by a consent authority for a future development use, the increases to peak flow rates would not warrant the provision of additional detention storage on the southern residue land.

53. If the bypass drainage pipe system is accepted by a consent authority, any water quality requirements associated with the public purpose will be resolved.

54. The location of the Z Buhach easement is a logical point for collection and discharge of flows from the public purpose. The existing catchment discharging at this point is significantly smaller (3.7 ha) than the catchment created by the public purpose (6.73 ha) and this additional catchment and increased impervious area significantly increases peak flow rates at this location.

55. The Z Buhach easement is required because of the increase in flow rates as a result of the public purpose and covers the full length of the scour protection works.

56. The procedural and statutory costs associated with the extinguishment of the Z Buhach easement would be minimal, however, the cost of preparation of planning and engineering reports to support the extinguishment was not quantifiable at the time of the hearing.

57. Any future agribusiness related redevelopment on the southern residue land would seek to realign the Z Buhach easement and any associated bypass pipeline to maximise the development potential of the southern residue land.

58. The public purpose has not proposed any spill management devices.

59. A future development use of the residue land is unlikely to require any spill management by a consent authority, however, if that development is sensitive to the quality of water draining onto the land (for example, the use of the land for organic farming) an appropriate risk management approach would be to install a spill management device upstream of any storage dam. The cost of a spill management device is approximately $149,000 (exclusive of GST).

Z Buhach Property Summary

64. In relation to the Z Buhach proceedings, the area of the Z Buhach parent parcel, the acquired interests, and the residue lands is:

Land		Area
Parent parcel		121,370 m²	12.14 ha
Acquired land		43,230 m²	4.32 ha
Acquired easement		486.7 m²	0.05 ha
Acquired lease		Total: 27,810 m²	Total: 2.78 ha
Lot A	11,390 m²	1.14 ha
Lot B	10,470 m²	1.05 ha
Lot C	5,950 m2	0.60 ha
Residue land (area after acquisition)		Total: 78,140 m2	Total: 7.81 ha
Northern residue land	11,410m²	1.14 ha
Southern residue land	66,730m²	6.67 ha

JT Act Statutory Framework

65. The amount of compensation to which the Buhachs and Z Buhach are entitled is determined pursuant to Pt 3 Div 4 of the JT Act. Section 54(1) of that Act provides as follows:

54   Entitlement to just compensation

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

66. The matters that are to be taken into account in determining compensation are set out in s 55:

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 its date of acquisition,

(b)   any special value of the land to the person on its date of acquisition,

(c)   any loss attributable to severance,

(d)   any loss attributable to disturbance,

(e)   the disadvantage resulting from relocation,

(f)   any increase or decrease in the value of 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. Section 56 deals with market value and is in the following terms:

56   Market value

(1)   In this Act:

market value of land at any time means the amount that would have been paid 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 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.

(3)   If:

(a)   the land is used for a particular purpose and there is no general market for land used for that purpose, and

(b)   the owner genuinely proposes to continue after the acquisition to use other land for that purpose,

the market value of the land is taken, for the purpose of paying compensation, to be the reasonable cost to the owner of equivalent reinstatement in some other location. That cost is to be reduced by any costs for which compensation is payable for loss attributable to disturbance and by any likely improvement in the owner’s financial position because of the relocation.

68. Disturbance is provided for in s 59(1):

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 of a qualified valuer reasonably incurred by those persons in connection with the compulsory acquisition of the land (but not fees calculated by reference to the value, as assessed by the valuer, 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 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 be reasonably incurred), relating to the actual use of the land, as a direct and natural of consequence of the acquisition.

The Claims for Compensation

The Buhachs Proceedings (2292 The Northern Road)

69. On 12 February 2019 the Valuer-General made a determination of compensation in respect of the Buhachs’s acquired interests in the amount of $521,600 comprising:5F

1. market value (s 55(a) of the JT Act) – $515,000; and

2. disturbance (s 55(d) of the JT Act) – $6,600.

70. On 13 February 2019 TNSW made an offer of compensation to the Buhachs in respect of their acquired interests in accordance with the Valuer-General’s determination.6F

71. The Buhachs commenced Class 3 compensation proceedings pursuant to s 66 of the JT Act on 8 March 2019, objecting to the amount of compensation offered by TNSW in respect of the acquisition.

72. The Buhachs’s claims have been amended several times during the course of their proceedings. In the Amended Points of Claim filed on 13 August 2020, the Buhachs’s sought an order for compensation in the amount of $4,559,528.58, comprising:

1. market value for the acquired interests (s 55(a)) comprising:

1. $4,480,000 for the acquired land; and

2. $19,904.04 for the acquired lease; and

2. disturbance (s 55(d)) – $59,624.54 comprising:

1. legal costs (s 59(1)(a)) – $10,332.33; and

2. valuation costs (s 59(1)(b)) – $49,292.21, including, it appears (although this was not clear from the applicants’ amended points of claim), the costs incurred for town planning advice in the amount of $8,424.18 for the purposes of informing the valuation advice under either s 59(1)(b) or (f).

73. In the Further Amended Points of Defence filed on 19 January 2021, TNSW contended that compensation should be determined at least in the amount of $241,000, comprising:

1. market value for the acquired interests as follows:

1. market value for the acquired land (s 55(a)) – $231,000; and

2. market value for the acquired lease (s 55(a)) – $10,000; and

2. disturbance to be determined by the Court to be reasonably incurred in accordance with ss 55(d) and 59(1) of the JT Act.

74. The final claim for compensation by the Buhachs is summarised in the table below:

JT Act

Buhachs

s 55(a) market value

$4,480,000.00 for the market value of the acquired land.

$19,904.40 for the market value of the acquired lease.

s 55(d) disturbance

$59,624.18

Total

$4,559,528.58

75. Whereas, at the conclusion of the hearing, TNSW claimed that the Buhachs were entitled to compensation for the acquired interests as follows:

JT Act	TNSW
Market value of the acquired land (s 55(a))	$231,000.00
Market value of the acquired lease (s 55(a))	$10,000.00
Disturbance (s 55(d))	$16,351.92
Total	$257,351.92

The Z Buhach Proceedings (2700 Elizabeth Drive)

76. On 12 February 2019 the Valuer-General made a determination of compensation in respect of the Z Buhach acquired interests in the amount of $5,483,487 comprising:

1. market value (s 55(a) of the JT Act) – $5,100,000;

2. disturbance (s 55(d) of the JT Act) – $305,106; and

3. disadvantage resulting from relocation (s 55(e) of the JT Act) – $78,381.

77. On 14 February 2019 TNSW made an offer of compensation to Z Buhach in respect of the Z Buhach acquired interests in accordance with the Valuer-General’s determination.

78. On 8 March 2019 Z Buhach commenced Class 3 compensation proceedings pursuant to s 66 of the JT Act objecting to the amount of compensation offered by TNSW.

79. Z Buhach’s claims have also been amended during the course of these proceedings. In his Further Amended Points of Claim filed on 13 August 2020, he sought an order for compensation in the amount of $20,876,534.46 comprising:

1. market value for the acquired interests (s 55(a)) comprising:

1. $19,640,000 for the acquired and; and

2. $702,000 for the acquired lease;

2. disturbance (s 55(d)) – $456,153.46 comprising:

1. legal costs (s 59(1)(a)) – $104,920.38;

2. valuation costs (s 59(1)(b)) – $82,127.15, including, it appears (although this was not clear from the applicant’s further amended points of claim), the costs incurred for a town planner in the amount of $9,524.18 and costs incurred for a surveyor in the amount of $1,100 for the purposes of informing the valuer under either s 59(1)(b) or (f); and

3. relocation costs (s 59(1)(c)) – $269,105.93; and

3. disadvantage resulting from relocation (s 55(e)) – $78,381.

80. In its Amended Points of Defence filed on 10 August 2020, TNSW contended that compensation should be determined at least in the amount of $4,604,408 as follows:

1. market value for the parent parcel land and the acquired easement (s 55(a)) – $4,396,408;

2. market value for the acquired lease (s 55(a)) – $208,000; and

3. an amount for disturbance to be determined by the Court to be reasonably incurred in accordance with ss 55(d) and 59(1) of the JT Act.

81. Z Buhach’s ultimate claim for compensation at the conclusion of the hearing (confirmed by way of further written submissions on 10 December 2021) was therefore:

JT Act	Z Buhach
s 55(a) & (f)	$19,640,000 (comprising the market value of the acquired land and the acquired easement)
s 55(d)	$456,153.46
s 55(e)	$78,381.00
Total	$20,876,534.46

82. By contrast, TNSW contended that Z Buhach was entitled to the compensation below:

JT Act	TNSW
Market value of the acquired land and acquired easement (s 55(a))	$4,396,408.00
Market value of the acquired lease (s 55(a))	$208,000.00
Disturbance (s 55(d))	$66,491.29
Disadvantage from relocation (s 55(e))	$78,381.00
Total	$4,749,280.29

Market Value

83. The relevant valuation principles for assessing compensation in Class 3 proceedings were summarised by the Court of Appeal in Barkat v Roads and Maritime Services [2019] NSWCA 240 (at [19]-[21], footnotes omitted):

19   In proceedings of the kind in which the primary judge was engaged, the L&E Court acts as a judicial valuer. In that capacity, the L&E Court is not confined to accepting the case of one party or the other party, and may use the evidence adduced in the proceedings to make its own assessment of the compensation payable for compulsory acquisition. That assessment will often lie at a point somewhere between the evaluations contended for on behalf of the parties. As a general rule, in determining compensation, any doubt should be resolved in favour of a more liberal estimate of value.

20 The market value of land for the purposes of s 55 of the Just Terms Act is to be determined on the basis of the highest and best use of the land. Accordingly, the L&E Court must approach the task of determining compensation by determining the most profitable potential use of the land in question.

21 The parties to the hypothetical sale contemplated by s 56(1) are to be assumed to be fully informed and to have made all proper inquiries. The land must be valued at the relevant date in its existing condition with all its potentialities as potentialities. The parties to the hypothetical sale are also assumed to be perfectly acquainted with the land and cognisant of all circumstances that might affect its value. In the absence of available market evidence, the L&E Court, as judicial valuer, must make the best guess that can be made. Events subsequent to the date of acquisition are to be ignored except in so far as they may be relevant as confirmation of foresight.

84. They were not in dispute.

Issues for Determination

85. The principal issues for determination in both sets of proceedings were:

1. what was the highest and best use of the acquired lands as at the acquisition date;

2. how would a hypothetical purchaser under s 56 of the JT Act assess the market value of the acquired lands as at the acquisition date, including the assessment of any potential for future development;

3. what was the market value of the acquired lands as at the acquisition date;

4. what was the market value of the acquired leases as at the acquisition date;

5. what is the applicants’ entitlement to compensation for losses attributable to disturbance under s 55(d) of the JT Act; and

6. does the Court have jurisdiction in these proceedings to determine compensation for financial costs or any damage actually incurred or suffered as a direct consequence of the giving and later rescinding the first Z Buhach PAN and the first Buhach PAN under s 69 of the JT Act?

The Highest and Best Use of the Lands

The Uncontroversial Strategic Planning History of the Subject Lands

86. It was uncontentious that as at the acquisition date the development potential of the acquired lands were largely informed by the strategic planning documents.

87. As at the acquisition date, it was not a matter of controversy that:

1. both parent parcels were zoned RU1 – Primary Production pursuant to the LLEP, other than a narrow strip along the road frontage of 2292 The Northern Road (the Buhachs proceedings) which was zoned “SP2 – Infrastructure” under the LLEP;

2. the LLEP commenced on 29 August 2008 and relevantly:

1. the range of permissible uses of the parent parcels in the RU1 zone includes agriculture, extensive agriculture, farm buildings, rural industries and rural supplies; and

2. the minimum lot size for the parent parcels was 40 ha and the minimum lot size for a dual occupancy on the parent parcels was 10 ha;

3. the parent parcels are located within the BWSEA precinct under the WSEA SEPP;

4. both parent parcels were subject to the WSEA SEPP, in respect of which:

1. cl 18 provides that any development application cannot be consented to unless there is a development control plan (“DCP”) in place which addresses the requirements in Sch 4 of that instrument, except where an existing precinct plan was in place and set out in cl 19 of the instrument, or the Director General specifically notifies the consent authority that in effect a DCP is not required;

2. cl 25 requires that consent must not be granted unless the public utility infrastructure that is essential for the proposed development is available or that adequate arrangements have been made to make that infrastructure available when required; and

3. as stated above, the parent parcels were identified as “Unzoned Land” and their permitted uses were generally limited to those permitted in the RU1 land use table of the LLEP;

5. in November 2016 the NSW Government released the Draft South West District Plan (“Draft District Plan”) which introduced the concept of an “aerotropolis” near the proposed Western Sydney airport. The Draft District Plan indicated what would and would not be within a future “Urban Area”. The parent parcels are located within the future “Urban Area”;

6. in July 2017 the Sydney Water Growth Servicing Plan 2017-2022 (“Growth Servicing Plan”) showed the subject land with the Badgerys Creek Airport Precinct of the Western Sydney Priority Growth Area;

7. in March 2018 the Greater Sydney Commission released the Greater Sydney Regional Plan which indicated that the subject land was within the “Western Sydney Airport-Badgerys Creek Aerotropolis” and described the area as being within the “Western Economic Corridor” with a “new international airport and aerotropolis” as well as “defence and aerospace activities” and “trade, freight, logistics, advanced manufacturing, health, education and science”. The document listed a number of objectives. Objective 5 was concerned with the “benefits of growth realised by collaboration of governments, community and business” which would be driven by the “Western Sydney City Deal”. Objective 20 stated that “Western Sydney Airport and Badgerys Creek Aerotropolis are economic catalysts for Western Parkland City” and further said that “the Western Sydney City Deal…will drive the delivery of the Western Sydney Airport and Badgerys Creek Aerotropolis”, which it was envisaged would attract jobs, facilitate a mass transit system, bring city-scale infrastructure and advanced manufacturing logistics, and attract aerospace and defence industries. In particular, the Western Sydney City Deal would “create 200,000 jobs by supercharging the aerotropolis and agribusiness precinct as catalysts”;

5. the parent parcels are located in the WSAGA under the Greater Sydney Regional Plan and the Western City District Plan (“the 2018 District Plan”), the latter of which was also released by the Greater Sydney Commission in March 2018. The 2018 District Plan again depicted the acquired land adjacent to a “Metropolitan cluster” and with “Potential Future Industrial/Employment Land”;

6. the Stage 1 LUIIP was released in August 2018; and

7. any future rezoning of land within the WSAGA (which includes the parent parcels) is to be consistent with the Stage 1 LUIIP.

88. There was no real dispute with respect to the content of the Stage 1 LUIIP, namely, that:

1. as expressed, it was directed at “shorter term development outcomes” and was intended to provide a “high level Structure Plan to show how future development at the Aerotropolis could be arranged”;

2. the development potential of the parent parcels was likely to be reflected in the planning outcomes contained in the Stage 1 LUIIP, which was directed at “shorter term development outcomes” and was described as a “high level Structure Plan to show how future development at the Aerotropolis could be arranged”;

3. the Stage 1 LUIP was identified in Ministerial Planning Direction 7.8 (“Direction 7.8”) issued in accordance with s 9.1 of the Environmental Planning and Assessment Act 1979. Relevantly, Direction 7.8 required that any proposal to rezone land in the LUIPP area be consistent with its provisions. Direction 7.8 is one of 10 Ministerial Directions relating to release area planning within the Sydney Region which, with one exception, seek to preserve and enable future urban development within a defined period. The one exception – Direction 7.1 – provides that the Metropolitan Strategy (A Plan for Growing Sydney) must be considered in the preparation and consideration of planning proposals;

4. nine precincts were identified in the Stage 1 LUIIP Structure Plan: the Aerotropolis Core, Northern Gateway, South Creek (green spine and recreation area), North Luddenham, Rossmore, Mamre Road, Kemps Creek, Badgerys Creek and the Agriculture and Agribusiness precinct (“A&A precinct”). The Northern Gateway, Aerotropolis Core and South Creek precincts were identified as being the first stage release precincts;

5. the entire A&A precinct has an area of approximately 2,400 ha;

6. the key features of the A&A precinct were described to be as follows:

The Agriculture and Agribusiness Precinct will skirt the western edge of the Airport and support the long-term retention and growth of agriculture and agribusiness in the Western City. This area will support the transition of existing agriculture in the area, as well as the development of new agricultural opportunities.

It will build on existing, successful agricultural operations on these lands, proximity to the Airport, compatibility with airport operations and associated landscape benefits of retaining open lands between The Northern Road and the Outer Sydney Orbital as a peri-urban fringe of Sydney.

The Precinct will capitalise on growing local and international demand for fresh food. It offers reliable water supplies, good soils, available farm labour, and proximity to markets. Agribusiness in NSW and the potential for fresh food markets within the Aerotropolis would benefit from easy access to the Airport to move fresh food product to direct flights to international markets. These industries will also generate employment opportunities in high tech and more traditional agriculture.

It is envisaged, that following the completion of a feasibility study, the size and location of an agri-port will be identified within this precinct. The agri-port will benefit from its proximity to the Western Sydney Airport and road and rail freight lines. The agri-port will provide for the movement and storage of agricultural commodities.

Development within the agriculture or agribusiness lands may include:

•   ongoing agriculture production such as dairying and poultry farming

•   intensive horticulture such as mushroom and tomato farming

•   food processing

•   food research and technology.

The precinct should be complimentary and not diminish or impact upon the effective ongoing agriculture and industry operations (and their import clusters) and viability within the surrounding area, both now and in the future. This includes being considerate of biosecurity, water access and demand, competition and land use conflict. The transition of existing agricultural lands to alternative uses is not envisaged in the current planning. However, these issues will be considered as long-term planning for the Aerotropolis is reviewed and monitored. Residential development opportunities are only appropriate if ancillary to agriculture.

7. there are no definitions for the terms, “agriculture”, “agribusiness” or “agri-port” in the Stage 1 LUIIP;

8. the Structure Plan associated with the Stage 1 LUIIP (“the Structure Plan”) designates two discrete areas within the A&A precinct, viz, “agriculture” (in yellow) and “flexible employment” (in blue) as follows:

9. the majority of the A&A precinct is identified in the Structure Plan as “agricultural”, with only one portion of the land to the north of Elizabeth Drive identified as “flexible employment”’;

10. the Stage 1 LUIIP establishes that a future State Environmental Planning Policy (“SEPP”) will create three zones – Urban Development, Infrastructure, and Environment – with exception being the A&A precinct which will retain the existing LLEP zones that are to be reviewed and updated as required; and

11. the potential for the establishment of an agri-port in the A&A precinct (subject to a feasibility study) exists. Its size and location has not been identified, however, and it will occupy a minority of the total area of the A&A precinct.

89. Finally, in 2019 KPMG released a pre-feasibility study for the NSW Department of Industry (the World-class intensive integrated production hub in the Western Sydney Aerotropolis (“the KPMG study)). The study referenced exemplar agribusiness precincts located around the world such as the A7 agri-port in the Netherlands and Fresh Park Venio.

90. The town planners agreed that as at the acquisition date the development potential of the acquired lands was primarily informed by the strategic planning documents.

91. It follows that the future urban potential of the acquired lands will be informed by the instruments and strategic planning material described above, including the Stage 1 LUIIP and the role that any agribusiness precinct has in the planning and early stage development of the Western Sydney Airport and Aerotropolis.

92. Importantly, the town planning experts agreed that as at the acquisition date:

1. first, the development potential of the parent parcels was likely to be reflected in the planning outcomes contained in the Stage 1 LUIIP; and

2. second, any future rezoning of the of the land within the WSAGA (in which the parent parcels are located) would be consistent with the Stage 1 LUIIP.

93. What was also not in dispute was that, as at the date of the acquisition, the A&A precinct was not identified as one of the three first stage precincts to be released for precinct planning. Nevertheless, as the Stage 1 LUIIP indicates, the development potential under the relevant LEPs for Penrith and Liverpool were to be preserved and that land use capabilities were to be reviewed and expanded as necessary.

94. The real areas of contention between the town planning experts related to the strategic planning future of the A&A precinct under the Stage 1 LUIIP. In particular, there was no agreement in respect of:

1. the feasibility of a potential agri-port within the A&A precinct;

2. the timing and location of the development of any agri-port within the A&A precinct;

3. the physical and operational characteristics of any agri-port under the Stage 1 LUIIP; and

4. the lack of clarity in the Stage 1 LUIIP with respect to the future planning expectations of the remainder of the A&A precinct (including the parent parcels).

Town Planning Expert Evidence

95. In addition to various planning documents and other associated material, in each set of proceedings:

1. the applicants relied principally upon the expert town planning reports of David Haskew dated 12 June 2020;

2. TNSW relied primarily upon the expert evidence of Anthony Rowan dated 5 May 2020 (who filed separate reports in each matter); and

3. all parties relied upon the joint expert town planning report of Haskew and Rowan dated 26 June 2020.

Haskew

96. The applicants contended that from the strategic planning documents the acquired lands had been identified for the location of the aerotropolis since the term was initially used in and around November 2016, and that this use was a higher and better use than its existing agricultural use, and therefore, that the present rural use of the subject lands would not be retained. It was not necessary for the acquired lands to be the future location of the agri-port (which as at the date of the acquisition was unknown); it was sufficient that the lands were located in the aerotropolis area. Accordingly, the acquired lands had a higher and more valuable urban future purpose compared to any existing or retained agricultural use.

97. It was Haskew’s evidence that as at the date of acquisition, a reasonable purchaser would have considered that there was a good prospect of the agri-port being developed on or near the acquired lands. In any event, the acquired lands were not “simple rural land”, it had good prospects of being developed in the medium to long term consistent with other aerotropolis land when a new foreshadowed SEPP would rezone the lands.

98. Haskew opined as follows:

1. as at the date of acquisition the acquired lands were situated within the agribusiness precinct;

2. while the existing rural zone planning controls under the LLEP were foreshadowed to be retained in the short term, they would be reviewed and updated as necessary;

3. he would advise the hypothetical purchaser of the acquired lands that there would be no discernible strategic planning reason why development potential of the agribusiness zone would be artificially delayed or stalled for strategic planning or infrastructure delivery reasons;

4. within the Stage 1 LUIIP the agribusiness precinct was said to accommodate the transitioning of more intensive forms of agriculture to take advantage of the new airport; and

5. more intensive forms of agricultural development would be immediately embraced upon gazettal of a new SEPP.

99. He set out a number of impacts in relation to the Z Buhach residue land occasioned by the acquisition, namely, that:

1. in the short term, the southern part of the residue land would be unsuitable for agricultural purposes due to its limited size and vehicle access restrictions;

2. the northern portion of the residue land was not suitable for agricultural purposes in both the short and long term;

3. there was a physical separation of the residue land;

4. there was a height difference between the southern part of residue land and the re-aligned road; and

5. there were various impacts relating to stormwater management, drainage, and water quality in relation to the southern part of the residue land.

100. Haskew therefore concluded that:

1. as at the date of acquisition, although the agribusiness precinct was not identified as one of the three first stage precincts to be released for precinct planning, the Stage 1 LUIIP made it clear that development potential under the LLEP would be preserved and that land use capabilities would be reviewed and expanded as necessary;

2. agribusiness type development could expect to include high intensity agriculture and horticulture, as well as freight and logistics operations to serve land inside and outside the aerotropolis;

3. the acquired lands were situated in close proximity to major new transport corridors as well as the aerotropolis freight and logistics precincts. Subject to drainage works being undertaken to close existing dams and manage overland flows, the acquired lands would have sat within the same hydrological catchment as the Northern Gateway Precinct. These characteristics would have presented a strong case to support development at an early stage of the aerotropolis development cycle, notwithstanding that the whole of the precinct was not included in the early stage precinct timing of the Stage 1 LUIIP;

4. as a consequence of the acquisition, the Z Buhach parent parcel was severely impacted by severance, inferior access to the arterial road network, particularly to the north and south. Further the awkward shape (severed) of the residue land would render the northern part of that land as highly inefficient to develop and the southern part also had inferior development potential; and

5. as a consequence of the acquisition, the Buhach’s parent parcel was impacted by inferior access to the arterial road network and access to a public road for heavy vehicles.

Rowan

101. Conversely, according to Rowan, the acquired lands would, as at the date of the acquisition, retain their rural character because:

1. they would not be included in non-rural zoning when any future environmental planning instruments were gazetted;

2. they were not coloured blue in the A&A precinct mapping which meant that it must be “agriculture” and not “agribusiness”; and

3. the concept of an agri-port was too ill defined and not determined to be feasible beyond that of speculation.

102. Therefore, it was Rowan’s opinion that the highest and best use of each of the parent parcels was the current agricultural/pastoral purpose, occupied by existing rural residential dwellings, together with any other permitted land use in the RU1 zoning pursuant to the LLEP.

103. Rowan’s opinion was informed by the following matters:

1. given the size of the parent parcels the minimum size requirement of 40 ha under the LLEP did not require their further subdivision. Whereas there were no minimum lot size requirements for any permissible uses within the RU1 - Primary Production Zone;

2. alternative potential land uses were limited to those permitted in the RU1 zone despite the parent parcels being identified as “Unzoned Land” under the WSEA SEPP. Although as at the acquisition date the WSEA SEPP allowed for additional permitted uses, approval for such uses was unlikely due to the requirements of the WSEA SEPP, including that of compatibility with uses on adjoining land;

3. although the 2018 District Plan included a plan that depicted the parent parcels as within a “Land Release Area”, prior to the acquisition date the Stage 1 LUIIP had been released and in that document the parent parcels were designated as “agricultural” within the A&A precinct. This was similar to the use regime that currently exists under the RU1 – Primary Production zoning in the LLEP;

4. the identification of the A&A precinct under the Stage 1 LUIIP as a non-initial precinct affirmed that future planning for that precinct was not scheduled within the five years following the release of the Stage 1 LUIIP (from August 2018 to August 2023);

5. potential future development in the “agricultural” area of the A&A precinct under the Stage 1 LUIIP included ongoing agricultural production, intensive horticulture, food processing and food technology. Other than food research and technology, each of the potential future uses in the “agricultural” area of the A&A precinct was already permitted in the RU1 – Primary Production zone, and therefore, applied to the acquired lands as at the acquisition date; and

6. it was unlikely that the current planning provisions for the rural zones under the LLEP for land also located within the A&A precinct would be altered in the short to medium term. Rather, the transition of existing agricultural lands to alternative uses would be considered as part of any long term planning for the aerotropolis that would be reviewed and monitored.

The Submissions of Applicants on Highest and Best Use

104. The applicants relied upon “an abundance” of strategic planning material that they submitted demonstrated that the acquired lands were part of the aerotropolis precinct and that, therefore, any hypothetical purchaser would not consider it to be, as Rowan did, land for agricultural purposes with its existing rural landscape to be retained.

105. The applicants were critical of Rowan’s evidence in several key aspects:

1. first, he did not particularly consider the Draft District Plan that introduced the concept of an aerotropolis near the new Western Sydney Airport (T83:20-39). This ignored information that was available to the hypothetical purchaser (T182:20-33);

2. second, he focussed almost exclusively on the Stage 1 LUIPP and did not sufficiently take into account the other strategic planning material available at the relevant time; and

3. third, he arbitrarily bifurcated the A&A precinct in the Structure Plan so that “agribusiness” (confined to the blue “flexible employment” to the north of that precinct) had potential but “agriculture” (confined to the yellow) did not. In other words, he considered that “agribusiness” was excluded from the yellow area marked as “agriculture” in the Structure Plan on the basis that the “the flexible employment” portion of this precinct “envisages something else other than agriculture…so to the extent that there needs to be agribusiness to support the agricultural uses in the precinct, it’s going to occur in a blue area. That’s why the, the precinct is names [sic] with two names, because it’s got two colours” (T86:25-33). There was, however, nothing in the Stage 1 LUIIP that made this distinction (T88:14-16).

106. The applicants also submitted that the evidence disclosed that the yellow delineation in the A&A precinct would not retain only short to medium rural zoning. In addition to the Stage 1 LUIIP, they relied upon the WSEA SEPP, the Draft District Plan, the Growth Servicing Plan, the Greater Sydney Regional Plan and the 2018 District Plan.

107. The applicants emphasised that this objective evidence was consistent with Haskew’s opinion. It was Haskew who identified the potential location of an agri-port in the A&A precinct and concluded that the A&A precinct was transitioning away from being an exclusively rural area. This was to be contrasted with Rowan’s unsustainable evidence that market participants as at the date of the acquisition, having regard to the strategic planning material available at that time, would view the opportunities afforded by the aerotropolis or agri-port within the A&A precinct as a long term opportunity, based only on the differentiation of the blue and yellow designated land within that precinct. On the contrary, the colour differentiation was due to hydrology and the known sewerage catchments and would not have a significant impact on the market.

108. Haskew’s foresight, and that of any hypothetical parties to a sale of the acquired land, was confirmed by the fact that the whole of the yellow area is now zoned “agribusiness” under the State Environmental Planning Policy (Western Sydney Aerotropolis) 2020 that commenced on 1 October 2020 (“Aerotropolis SEPP”).

109. Finally, the applicants relied upon the fact that the A&A precinct land was not incomparably different to other land with the Stage 1 LUIIP precincts for valuations purposes (explained further below).

The Submissions of TNSW on Highest and Best Use

110. TNSW submitted that Haskew’s opinion that the highest and best use of the acquired lands was for medium term redevelopment potential for agribusiness related enterprises having regard to their proximity to the new Western Sydney airport ought be rejected. This was because, first, as to the timing of any rezoning of the acquired land, as Haskew conceded, the A&A precinct was not identified in the Stage 1 LUIIP as one of the first precincts to be released (T73:22-32), and moreover, he noted that the potential timing of any agribusiness was not clearly stated in that document.

110. Second, in respect of the likelihood that the rural zoning under the LLEP or that agricultural uses more generally would be retained in the “agricultural” area in the Structure Plan to the Stage 1 LUIIP (the area marked in yellow), Haskew agreed that as at the date of the release of that document, the A&A precinct was to keep its rural zoning under the LLEP and that amendments to any relevant LEP would be on an “as need basis” (T73:40). In addition, he accepted that if he only had regard to the Structure Plan, a logical conclusion was that the Stage 1 LUIIP maps the A&A precinct as “agricultural”, with the existing rural landscape to be retained. He also agreed that there had been a strategic decision to include food production in proximity to the new airport (T75:42-49).

111. Third, in relation to the certainty as to the type of uses likely to be permissible in the “flexible employment” blue area on the Structure Plan as at the acquisition date, he accepted that there was little detail in the Stage 1 LUIIP about what was intended by this designation. Haskew agreed that the description of the “flexible employment” area in other precincts (for example, the Aerotropolis Core precinct and the Northern Gateway precinct) suggested that what was contemplated in those precincts excluded “agricultural” or “open lands” (T73:09-14). Rather, what was envisaged within those precincts was urban or industrial development that emphasised employment, taking advantage of the infrastructure in the Northern Gateway and that residential and commercial development was not anticipated within the A&A precinct (T76:15-18). Finally, he acknowledged that the Stage 1 LUIIP identified that the A&A precinct was to be complimentary to, and not in derogation of, the agriculture activities within the surrounding area (T76:05-08).

112. Fourth, Haskew conceded that, despite references to this type of use throughout his evidence, there was no “agribusiness” precinct in the Stage 1 LUIIP and the term was not defined in that document. Furthermore, whatever was meant by that term in the Stage 1 LUIIP was uncertain and would vary from individual to individual (T102:23-32 and 106:30-45).

113. Fifth, both Haskew and Rowan agreed that the uses contemplated in the A&A precinct comprehended lower intensity agribusiness within the yellow “agricultural” part of the A&A precinct and more intensive agribusiness activities were contemplated in the blue “flexible employment” part of that precinct (T106:01-10).

114. Sixth, Haskew’s reliance on a potential “agri-port” in the A&A precinct emerged for the first time in the joint town planning expert report which Haskew described as a “very large and highly industrial high tech facility” similar in scale and intensity to Port Botany and the A7 agri-port in the Netherlands. TNSW submitted that this vision was implausible and did not withstand cross-examination in circumstances where Haskew conceded that:

1. there was nothing in the Stage 1 LUIIP that indicated that any agri-port would be similar to the examples that he had given (T110:35-49);

2. the location, size and feasibility of any potential agri-port was attended by a high level of uncertainty and that, although there were some references to an “agri-port” in the Stage 1 LUIIP, the term was not defined (T109:17-110:03). Nor was any detail given about the timing of the delivery of any such infrastructure (T110:35-43);

3. any potential agri-port would be located within the “flexible employment” area on the Structure Plan given its proximity to the future alignment of the M12 (T115:07-15);

4. there was limited material available in the market relating to the potential agri-port and nothing in the market concerning its possible footprint (T119:26-34); and

5. the KPMG study would not have been known to any parties to any hypothetical sale in October 2018 (T113:05-30).

The Highest and Best Use of the Acquired Lands is Not that of a Rural Designation

116. In my view, the evidence of Haskew is to be preferred and Rowan’s conclusion that the subject lands have as their highest and best use the existing rural uses ought not be accepted. My reasons are as follows.

117. First, as outlined above, the overwhelming preponderance of the strategic planning material since the release of the Draft District Plan, strongly supports the conclusion that the development potential of the acquired lands will be driven by the role that the agribusiness precinct will have in the precinct planning under the Stage 1 LUIIP and the development of the Western Sydney airport, even in its early stages. While as at the date of the acquisition the agribusiness precinct was not identified as one of the three stage precincts to be released for precinct planning, the Stage 1 LUIIP makes it clear, in my opinion, that the development potential under the current LEPs for Penrith and Liverpool will be reviewed and expanded as necessary to include this use. The agribusiness development can reasonably be expected to include high intensity agricultural and horticultural activity, as well as logistics and freight operations servicing other land within the 2400 ha precinct and outside the aerotropolis.

118. Reinforcing this conclusion is the fact that the subject lands were listed under all of the pre-Stage 1 LUIPP documents within lands identified as having a future urban use.

119. Second, that the precise location of any future agri-port was not known as at the acquisition date, while a matter to take into account, is not determinative. I readily find that parties to the hypothetical sale would have been aware of the expressed need for an agri-port in, or within reasonable proximity to, the location of the acquired lands. They would have also, in my opinion, been aware that an agri-port would be a catalyst for agribusiness development throughout the surrounding areas and would create a demand for the release and development of nearby precincts of land. As a matter of logic, and in conformity with the strategic planning material, the location of the agri-port will be in the agribusiness precinct.

120. I agree with the applicants that Rowan’s evidence was characterised by an over-reliance on the designations in the A&A precinct in the Stage 1 LUIIP to the detriment of other available strategic planning material that a hypothetical purchaser would have had regard to (T182:28-44).

121. Rowan’s division in the A&A precinct between the blue (“future employment”) and yellow (“agriculture” and “agribusiness”) areas which was to the effect that because the subject lands were not coloured blue within the precinct meant that they were to be used for agriculture (which did not have potential) and not agribusiness (which had potential) cannot be maintained. This is because, as he accepted in cross-examination, not only was there nothing in the Stage 1 LUIIP that makes this distinction (T88:14-16), but his evidence was, when challenged, equivocal. For example, he accepted that agribusiness could occur in both the blue and yellow areas of the A&A precinct (T91:01-10). In my view, this concession significantly undermined his opinion that the yellow marked land would retain rural zonings until some distant future date.

122. The better view is that the whole of the A&A precinct is designated as “agriculture” and “agribusiness”. To the extent that there is a particular area in the north of the precinct that is identified for “future employment” does not exhaust the potential for agribusiness uses across the whole precinct. I do not accept that agribusiness is only to be carried out in the blue area on the Structure Plan. Rather, the better understanding of the colouring of the A&A precinct on the Structure Plan is that the entirety of the precinct has potential future development opportunity for both agricultural and agribusiness uses.

123. As indicated above, there is an abundance of material strongly suggesting that the yellow section in the A&A precinct will not retain only a short to medium term rural zoning. For example:

1. the WSEA SEPP situated the acquired lands within the BWSEA precinct;

2. the Draft District Plan introduced the concept of an aerotropolis in proximity to the Western Sydney airport and included a plan indicating that the subject lands would be in an “Urban Area” rather than a “Metropolitan Rural Area”;

3. the Growth Servicing Plan depicted the subject land within the “Badgerys Creek Airport Precinct”;

4. the Greater Sydney Regional Plan depicted the subject land within the “Western Sydney Airport-Badgerys Creek Aerotropolis” and described the area as being the “Western Economic Corridor” and “New international airport and aerotropolis”, in addition to references to “Defence and aerospace activities” and “Trade, freight, logistics, advanced manufacturing, health, education and science”. Objective 20 of that plan (see earlier in the judgment) described the land in the following terms, “Western Sydney Airport and Badgerys Creek Aerotropolis are economic catalysts for Western Parkland City”;

5. the 2018 District Plan depicted the land next to a “Metropolitan Cluster” and within “Potential Future Industrial/Employment Land”;

6. the KPMG study dealt with, among other things, the agri-port; and

7. the Stage 1 LUIIP included the land in the A&A precinct in which the agri-port will be located.

124. Third, unlike Rowan, Haskew’s evidence, especially that given by him in the joint planning expert report, was consistent with the objective evidence insofar as he had been “forecasting and tracking strategic planning decisions concerning the aerotropolis since late 2015” and the State 1 LUIIP was “broadly consistent” with his predictions for the A&A precinct. Furthermore, that upon further reflection, co-locating agricultural functions with the Western Sydney airport was logical for an aerotropolis and the inclusion of an agri-port on the western side of the airport was a sound land use planning principle. Accordingly, as at the date of the acquisition, the agri-port was a factor which would influence the timing of decisions concerning expanded land use permissibility within the A&A precinct.

125. As stated above, Rowan dismissed the significance of the potential location of the agri-port and did not agree that there would be a move away from a rural zoning or agricultural use in the short and medium term although he accepted that there would be additional permissible uses in the long term (T97:27-98:27). However, in my view, this position was not tenable in the face of the abundance of strategic planning material referred to above.

126. By contrast, Haskew gave a cogent explanation as to the reason for the difference between the blue and the yellow coloured areas, namely, the demarcation aligned with hydrology catchments and sewer constraints to confine some of the land in the A&A precinct to uses that involve lower employment density such as freight logistics (T98:33-99:01). I find this explanation to be more persuasive than that proffered by Rowan. As a result, in my view, the distinction between the colours would not have a significant impact from the perspective of the hypothetical purchaser and that parts of the land within the A&A precinct, including the acquired lands, given their location, would have significant potential beyond that of a standard rural zoning, irrespective of the uncertainty of the precise location of the agri-port. As Rowan ultimately agreed, if the agri-port was deemed feasible, “then yes, one would start to look at examples of where it has been placed in other locations and gain some confidence about that” (T126:07-45). This is precisely what Haskew did.

127. Fourth, I note that the applicants relied upon the Aerotropolis SEPP that commenced on 1 October 2020 to confirm Haskew’s foresight as to the development potential of the land insofar as the area marked in yellow in the State 1 LUIIP is now zoned “agribusiness”. Events after the date of acquisition may be relevant to confirm the reasonableness and correctness of evidence of the foresight that the hypothetical parties would have had at the date of acquisition when considering the highest and best use of the land (Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 at 557F and 567A-C, Barkat at [19]-[21] and Apokis v Transport for NSW (2020) 101 NSWLR 844; [2020] NSWCA 39 at [36] and [42]-[43]). As was stated in the seminal case of Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 (at 441):

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 feature, 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.

128. In this case, the use of the Aerotropolis SEPP may be permissibly used to confirm a foresight already established on the basis of the existence of the strategic planning material discussed above. The planning evidence of Haskew and his foresight was, as I have concluded, established in the evidence before the confirmatory rezoning came into effect. I would have reached the same conclusion irrespective of the absence of any definition of “agribusiness” in the Aerotropolis SEPP. In short, Haskew’s knowledge of the existing relevant circumstances does not amount to an “uncommon gift of foresight” (Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Limited (1934) 51 CLR 509; [1934] HCA 41 at 515).

129. To reiterate, however, even if consideration of the Aerotropolis SEPP is not permissible, my conclusion as to the highest and best use of the acquired land remains unchanged for the reasons given above.

130. Fifth and finally, in relation to the “significant concessions” submitted by TNSW to have been made by Haskew during his cross-examination as to the timing, likelihood and certainty of any change to the zoning of the acquired lands, these did not sufficiently undermine the substance of his evidence such that it ought to be rejected. On the contrary, it demonstrated, unlike Rowan, a commendable willingness to agree to reasonable propositions thereby strengthening his testimony.

131. For all these reasons, I do not accept Rowan’s evidence that the highest and best use of the land as at the date of acquisition was rural.

Valuation Methodology

132. As agreed by the parties, the market value of land under s 56(1) of the JT Act is determined by what a willing purchaser would pay and what a not unwilling vendor would accept for the land (Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 at [51]).

133. The determination is informed by four steps (New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135 at [99]-[104] per Robson J):

99   It has been accepted that a generally valid method of conducting a comparable sales approach is to undertake it in the four steps of accumulation, analysis, adjustment and application: Constantine v Blacktown City Council (No 2) [2016] NSWLEC 81 at [100] (Moore J); Hoy v Coffs Harbour City Council [2015] NSWLEC 128 at [83] (Pain J) (leave to appeal this judgment was refused in Hoy v Coffs Harbour City Council [2016] NSWCA 257 at [61] (Bathurst CJ, with Simpson and Payne JJA agreeing)); Allandale Blue Metal Pty Ltd v Roads and Maritime Services (No 6) [2015] NSWLEC 18 at [344] (Pain J); Marroun v Roads and Maritime Services [2012] NSWLEC 199 at [197] (Sheahan J and Parker AC) (‘Marroun’) (affirmed on appeal in Marroun v Roads and Maritime Services [2013] NSWCA 358 at [75] (Tobias AJA, with Basten and Gleeson JJA agreeing).

100   First, the valuer, judicial or otherwise, should accumulate comparable properties. In undertaking this process, the “sales to be treated as comparable sales need to be truly comparable”, although the Court should not be “unreasonably selective” of its comparable properties in any event: Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111 at [18] (McHugh, Gummow, Kirby, Hayne and Callinan JJ).

101   As stated by Pain J in Trust Co Ltd v Minister Administering the Crown Lands Act 1989 (2012) 211 LGERA 158; [2012] NSWLEC 73 at [110]:

While all comparable sales evidence may be considered relevant and so cannot be disregarded, the level of relevance of different comparable sales to the property may vary leading to the valuer attributing differing weight to different comparable sales. In Brewarrana Pty Ltd v Commissioner of Highways (1973) 6 SASR 541 at 551, Wells J observed:

… there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not.

102   Second, the valuer should analyse those comparable sales. This often involves converting the value of those sales into another measurement that can be easily compared: Marroun at [201] (Sheahan J and Parker AC). Examples of this process include converting those sales into unitary rates, such as a psm rate.

103   Third, the valuer should adjust those properties it considers comparable to create equivalence with the unimproved subject land. As stated by Biscoe J in Holcim (Aust) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]:

The basis for the valuers’ valuation assessments is the sales comparison method. Accepted valuation practice permits adjustments for differences, such as in location, area and time to enable valuers to have comparable values which, following adjustment, account for the various differences with the subject property. Such adjustments are generally based on a reasoning process drawing on the skill and experience of the valuer and are undertaken to derive an opinion of value through a deductive process. Because properties are rarely identical, adjustments for differences are obviously necessary but caution is required through making as few adjustments as possible, in a consistent manner, to ensure the reliability of the comparable sale when related to the subject property. Too many adjustments potentially render the comparable sale unsafe to rely upon. Caution is therefore required where large adjustments are to be made. Reflecting the significant roles of skill, experience and personal assessment in the adjustment process, the scope for differences in the quantum and direction of adjustment between valuers can be considerable. Third, the Court should then apply these adjusted values to the subject property. The purpose of this is to determine, based on comparable sales and as best it can, what value the subject property would obtain if it were to be sold on the market.

104   Fourth, the valuer should apply the comparable sales to determine a value of the subject land based on the adjusted values of the comparable properties.

134. In considering the highest and best use potential of acquired land, it is preferable, if possible, to have regard to sales that share the same likely future use because their development potential will be reflected in their sale price (Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [73] per Biscoe J).

135. If no sales are directly comparable, the Court can adopt a ‘top down’ or ‘bottom up’ approach to valuation. This methodology was described in Attard v Transport for NSW (2014) 205 LGERA 396; [2014] NSWLEC 44 (at [69]. See also Sandhurst at [73]-[75] per Biscoe J and Maidment v Roads and Traffic Authority (NSW) (2006) 153 LGERA 249; [2006] NSWLEC 206 at [51] per Biscoe J):

69   Where there are no sales which are directly comparable, a "top down" or "bottom up" methodology is commonly used. For example, where the actual zoning does not reflect the potential future zoning that must be taken into account in determining market value, in a "bottom up" valuation land is valued on the basis of its existing zoning with an adjustment upwards for the chance of future zoning. In a "top down" valuation, land is valued on the basis of the prospective future zoning but a deduction is made for the chance that development may not eventuate and the time required before it may eventuate: Sandhurst Trustees Ltd v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [73]-[75] per Biscoe J; Maidment v Roads and Traffic Authority of New South Wales [2006] NSWLEC 606, (2006) 153 LGERA 249 at [51] per Biscoe J. In assessing the evaluation of a chance, it will seldom be possible to determine a figure that is demonstrably correct; one can only consider all relevant factors and make a judgment or "best guess": Liverpool City Council v Commonwealth of Australia [1993] FCA 539, (1993) 46 FCR 67 at [58] per Wilcox J.

258. It is noted that both Phippen and Lunney used the land value rates they respectively adopted prior to the acquisition. However, the acquisition occurred prior to the construction lease on the residue lands post the acquisition. Therefore, the land value rates used by Phippen and Lunney are not, in my opinion, appropriate in the circumstances.

259. Lot A of the Z Buhach lease has an area of 11,390m² and is situated on the northern residue land, while Lot B, with an area of 10,470m², and Lot C, with an area of 5,950m², are situated on the southern residue land. Given my earlier reasons and findings, the land value rates used to assess the ‘after’ values should be used for the calculations of the value of the Z Buhach lease as follows:

2700 Elizabeth Drive (Z Buhach v TNSW)
Lot	Area	Assessed Land Value Rate $ psm	Notional Land Value	Rate of Return	Notional Rent $ pa
A	11,390m2	$70.125	$798,724	6% pa	$47,923
B	10,470m2	$82.875	$867,701	6% pa	$52,062
C	5,950m2	$82.875	$493,106	6% pa	$29,586
Total	$129,571

264. The present value of $129,571 pa for two years discounted at 3% pa with payment at the beginning of the period is therefore $255,370.

The Buhachs’s Acquired Construction Lease (2292 The Northern Road)

265. Similar to the Z Buhach land, TNSW acquired a two year leasehold interest being part of the Buhachs’s land in certificate of title 3/827223 comprising 1,440m² (that is, the Buhachs’s lease).

266. Phippen valued the Buhachs’s lease at $19,904.40 by applying a notional annual rental value calculated on the basis of an annual rate of return of 6% on the capital value of the land as follows:

1. 1,140m² x $150m² at 6% pa; and

2. a present value of $10,260 pa for two years discounted at a rate of 3% pa.

267. Lunney, by contrast, applied a notional annual rental rate calculated on the basis of an annual rate of return on the capital value of the land. He adopted the adjusted rural rate for the parent parcel of $54m² and multiplied that rate by the area of the Buhachs’s lease (1,440m²) and the annual rate of return of 6% pa. Therefore, according to Lunney, the market value of the acquired lease was $8,928 (rounded up to $10,000) comprising the present value of $4,666 pa for two years at a discount rate of 3% pa.

268. By parity of reasoning, the Court has determined that the rate of return on the notional Buhachs’s land value is 6% pa to derive the notional annual rent, discounted at 3% pa for a period of two years with the amount calculated at the beginning of the period.

2295 The Northern Road (Buhachs v TNSW)
Lease Area	Assessed Land Value Rate $ psm	Notional Land Value	Rate of Return	Notional Rent $ pa
1,440m2	$94.50	$136,080	6% pa	$8,165

269. The present value of the Buhachs’s lease is $8,165 pa for two years discounted at 3% pa with payment at the beginning of the period. This totals $16,092.

Disturbance

270. The components of compensation for disturbance are identified in s 59 of the JT Act. There have been a number of recent appellate decisions where the ambit of the claim for disturbance has been considered, the effect of which has been to restrict the breadth of claims for compensation for disturbance (Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251, 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 and Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165). I have considered the reasoning and implication of these authorities in making my findings below.

271. The dispute between the parties concerning compensation for disturbance was in respect of the following categories:

1. the legal costs for both sets of proceedings (s 59(1)(a) of the JT Act) insofar as they were incurred in relation to the withdrawal of the first Z Buhach and the first Buhach PANs;

2. the valuation fees for both sets of proceedings (s 59(1)(b) or (f) of the JT Act):

1. charged by Abbotts Valuers in their invoices dated 9 May and 29 June 2018, insofar as they were incurred in relation to the withdrawal of the first PANs;

2. charged by Dobrow Valuation on 6 September 2018 on the basis that they were excessive and unreasonable because the applicants had already engaged a valuer and have not justified the engagement of a second valuer; and

3. the planning costs charged by HDC Planning in invoices dated 20 September and 10 October 2018 and by Stimson and Baker Planning Tax dated 7 September 2018, and the surveying costs charged by TSS Surveying Solutions on 5 June 2018 on the basis that these were not valuation fees and the work was not undertaken by a “qualified valuer” (see the definition of that term contained in s 59(2) of the JT Act); and

3. in relation to the Z Buhach matter, relocation costs (s 59(1)(c) of the JT Act) on the basis that the applicant had not provided any evidence to establish that relocation had occurred.

Fees Associated with the Withdrawal of the First PANs

272. Part 4 of the JT Act deals with, among other things, the award of compensation for abandoned acquisitions of land. Section 69 provides as follows:

69   Compensation for withdrawal of proposed acquisition notice

(1)   If a proposed acquisition notice is withdrawn (or taken to be withdrawn) under this Act, an owner of the land concerned is entitled to be compensated by the authority of the State who gave the notice for any financial costs or any damage actually incurred or suffered by the owner as a direct consequence of the giving of the notice and its later withdrawal.

(2)   Compensation is not payable under this section in respect of any change in the value of the land.

(3)   Compensation is not payable under this section unless a claim for the compensation is made within 3 years after the withdrawal of the proposed acquisition notice.

273. Section 71 sets out how a person can claim compensation under Pt 4:

71   Claims for compensation under this Part

(1)   A person who wishes to claim compensation under this Part must lodge a claim for compensation in accordance with this section with the authority of the State liable to pay the compensation.

(2)   A claim for compensation must be in the form prescribed by the regulations or (if no such form is prescribed) in the form approved by the Minister.

(3)   A claim for compensation may be withdrawn by the claimant.

(4)   The authority of the State may accept a claim for compensation (in whole or in part) or reject any such claim.

(5)   A claim for compensation is taken to have been rejected if the authority of the State has not dealt with the claim within 60 days after receiving the claim. However, the authority of the State is not precluded from accepting the claim after that time.

(6) A person whose claim for compensation is rejected (or taken to be rejected) or is accepted in part only may appeal to the Land and Environment Court against that decision. Section 67 applies to any such appeal in the same way as it applies to an appeal under that section.

(7) The regulations may apply any of the provisions of Part 3 relating to claims for compensation under that Part (with or without modifications) to claims for compensation under this Part.

274. There is no doubt that the applicants have a compensable entitlement pursuant to s 69(1) of the JT Act for the legal and valuation fees arising out of the withdrawn first PANs. On any view they were “actually incurred or suffered by the owner as a direct consequence of the giving of the notice and its later withdrawal”.

275. However, TNSW submitted that no such claim for any financial costs or damage occasioned by the withdrawal of the first PANs had been made by the applicants in accordance with s 71 of the JT Act and, as a consequence, the jurisdiction of this Court has not been enlivened under ss 66, 67, 69 or 71(6) of the JT Act.

276. In reply, the applicants argued that the fees could be claimed under s 59(1)(a) of the JT Act, which provides for compensation for “legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land”. This is in fact what occurred because the acquisition ultimately proceeded. Part 4 of the JT Act relates to acquisitions that do not proceed. In the present case, there was only one acquisition, which is “the” acquisition, so the claim for these legal and valuation fees falls within the statutory text.

277. In the alternative, the applicants contended that the claim could be reformulated under s 71 of the JT Act and the Court could grant leave for that procedure to occur so that the claim could be dealt with in these proceedings.

278. Dealing with the alternative claim, s 71(2) of the Act states that the claim for compensation must be in the form approved by the regulations or, if no such form is prescribed, by the form approved by the Minister. There is no evidence before the Court that this has occurred. Moreover, while the authority of the State has rejected the claim for compensation of the contested fees in the course of these proceedings, it has not done so in respect of any application associated with the withdrawal of the first PANs (presumably because no such claim has been submitted to it in respect of those fees). On any view, no claim has been made, or can be made, in the context of these sets of proceedings that will enliven the Court’s jurisdiction under s 71 of the JT Act.

279. In relation to the applicants’ first argument, properly construed having regard to its statutory context, the term “the compulsory acquisition of land” in s 59(1)(a) of the JT Act refers only to the second PAN and does not include all PANs issued in relation to the land.

280. The compulsory acquisition of land under the JT Act cannot occur absent an exercise of statutory power by the acquiring authority under the Act. This occurs pursuant to the pre-acquisition procedures under Pt 2 Div 1 of the JT Act, which includes the giving of a PAN to the owner of the land to be acquired (see ss 11 and 12 of the JT Act) and then by notice published in the Gazette (see Pt 2 Div 2).

281. In both sets of proceedings the applicants’ land was acquired upon the giving of the second PAN, not the first. The first PANs were withdrawn pursuant to the statutory power contained in s 16 of the JT Act which states:

16   Withdrawal or amendment of proposed acquisition notice

(1)   An authority of the State may, before the land is compulsorily acquired, withdraw a proposed acquisition notice by a further notice.

(2) Part 4 deals with the compensation payable when a proposed acquisition notice is withdrawn.

(3)   An authority of the State may, by a further notice, amend a proposed acquisition notice for the purpose of correcting a clerical error or an obvious mistake in the notice. Any such amendment has effect from the date of the original notice unless otherwise specified in the further notice.

(4)   A further notice under this section is to be given in the same manner as the proposed acquisition notice concerned was given.

282. Once the first PANs had been withdrawn by the acquiring authority, unless specified in the JT Act, no statutory power exists to compensate the applicants for any financial costs and damages incurred by them in respect of the giving of the first PANs. Section 16(2) of the JT Act, by contrast, expressly deals with the compensation payable when a proposed acquisition notice is withdrawn and directs the owner of land to Pt 4 of the Act. This is a strong textual and contextual indicator that some additional right to compensation upon the withdrawal of a PAN (whether for the same land or some other land) is not intended to exist within the Act. Rather, the statutory regime for such compensation is to be found exclusively within Pt 4 of the Act.

283. As explained above, Pt 4 of the JT Act provides for compensation upon the withdrawal of the PANs. It does so in the manner set out in s 71 of the JT Act. In the present case the applicants have not sought to engage with the procedure set out in that provision to claim compensation for the legal and valuation fees associated with the withdrawal of the first PANs. There being no other power to award compensation for this loss contained in the Act for the reasons given above, these fees cannot, in my opinion, be claimed.

Dobrow Valuations Fees

284. The applicants submitted that in proceedings of this complexity and quantum, they have reasonably incurred the costs of obtaining a second opinion as “a reality check of the advice” that they had obtained by commissioning the Dobrow Valuations report, and therefore, the costs were claimable under s 59(1)(b) of the JT Act.

285. I agree with the submissions of TNSW that the commissioning of the Dobrow Valuations report was unreasonable and excessive on the evidence before the Court. There is nothing before the Court to demonstrate that these valuation costs are not, as they plainly appear to be, duplicate costs (cf Penfold and Bracey v Health Administration Corporation [2009] NSWLEC 157 at [135]-[136] per Biscoe J), or that there is some other circumstance that renders the additional report necessary (such as ill health of a valuer or the valuer not able to be a witness in the proceedings: see, for example, the facts in Cook v Roads and Traffic Authority of New South Wales [2007] NSWLEC 136 at [80] per Jagot J).

286. To the extent that the applicants relied upon the decision in Croghan v Blacktown City Council (2019) 100 NSWLR 757; [2019] NSWCA 248, that case does not assist them. That decision concerned a different issue, namely, a successful appeal against an award of costs by the trial judge on an ordinary and indemnity basis (the date from which the acquiring authority made an offer of compromise).

287. In summary, I find that there is insufficient evidence to demonstrate that the Dobrow Valuations fees have been “reasonably incurred” and, therefore, they are not compensable.

Planning and Survey Costs

288. The town planning and survey costs are claimed by the applicants under s 59(1)(a), (b), or (f) of the JT Act. Each is dealt with in turn.

289. The applicants relied upon the reasoning in Eureka Operations Pty Ltd v Transport for New South Wales (2021) 249 LGERA 78; [2021] NSWLEC 41 (a cross-appeal was allowed in Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56, but not on this issue) to argue that the expenditure was necessary for the provision of proper legal advice under s 59(1)(a) of the JT Act. In Eureka Duggan J opined that (at [150]-[154]):

150 Dealing firstly with the claim for the fees of Mr Rogers pursuant to s 59(a) as legal costs. It is clear from the evidence of Ms Mozjejko’s affidavit sworn 13 March 2020 that Mr Rogers’ fees, whilst not addressed to the legal firm, were transmitted to that firm for payment.

151 There is, therefore, some question over whether the legal practitioner had retained Mr Rogers and was, therefore, liable for the payment to him of his fees and whether the fees would be recoverable from Eureka by the legal practitioner as a disbursement. Ms Mozjejko’s evidence does not provide an answer to these questions. However, whilst such a contractual relationship may arise in determining the question of whether a consultant’s fees are recoverable as a legal cost under s 55(a) I do not consider it to be determinative.

152 The terms of s 59(a) specifically, in terms refers to:

(a)   legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land.

153 The text and context of this provision indicates a legislative intent that the dispossessed owner is not to be responsible for the costs of obtaining appropriate (reasonable) legal services relating to the acquisition. In that context such legal services must include, at least in part, the determination of the appropriateness of the offer of compensation. Where a legal practitioner determines that some further advice is required from another qualified person to enable them to provide the legal services of advising on the offer, it would be inconsistent with the legislative purpose to compensate the dispossessed owner for only part of the fees required to be incurred to enable the legal advice to be provided. Whilst the reference to legal costs is quite specific in terms it is broad in substance. The fees are to be recoverable if they are reasonably incurred and to that extent if they are reasonably necessary for the legal practitioner to provide the advice relating to the acquisition then such fees are recoverable as a s 55(a) disturbance claim. This construction does not turn on the contractual relationship of the retainer of the consultant or whether it is recoverable as a disbursement, but rather whether it is reasonably necessary to enable the legal services to be provided in connection with the compulsory acquisition of the land, including, but not limited to, any offer of compensation.

154 For those reasons, I find Mr Rogers fees are properly claimable as disturbance pursuant to s 55(a) of the Just Terms Act.

290. Applying the reasoning in Eureka to the present sets of proceedings, the planning and survey costs referred to above were incurred for the provision of obtaining reasonable legal services relating to the acquisitions, including the offers of compensation, and are therefore properly claimable as disturbance. There was nothing in the evidence to suggest a contrary conclusion.

291. TNSW submitted that there was no evidence in either set of proceedings that the planning and surveying costs were transmitted to the applicants’ solicitor for payment. But in my view it is not necessary for the solicitor to have paid the fees. Provided that the invoices were paid by the applicants and that the further advice was required from qualified persons to enable the applicants’ legal representatives to advise on any offers made in respect of the acquisitions, then the amounts are claimable. There is nothing in the evidence that indicates that this is not what in fact occurred.

292. In case this analysis is wrong, it is necessary to deal with the second alternative basis of compensation for the planning and surveying fees under s 59(1)(b) of the JT Act. In my opinion, any claim for the planning and surveying fees under this head of compensation must fail on the basis that these fees are plainly not “valuation fees of a qualified valuer” within the meaning of that provision (Kirela Pty Ltd v Minister Administering Environmental Planning and Assessment Act 1979 (2005) 141 LGERA 40; [2005] NSWCA 108 at [127] and [135]).

293. Finally, the third basis for recouping the planning and surveying fees was because the costs were financial costs reasonably incurred or that might be reasonably incurred relating to the actual use of the land, as a direct and natural consequence of the acquisition under s 59(1)(f) of the JT Act.

294. Again, in my opinion, the claim must fail because while the costs are undoubtedly financial costs, and it may be inferred were reasonably incurred, they do not relate to the actual use of the acquired lands, which was for agricultural purposes (predominantly the growing of Christmas trees). In Blacktown City Council v Fitzpatrick Investments [2001] NSWCA 259 the Court of Appeal held that the use has to exist in fact and must be distinguished from a future or potential use (at [23]-[27]).

295. In the present sets of proceedings the planning and surveying costs are not recoverable under s 59(1)(f) of the JT Act because they relate to general advice given for the development of the land in the future and do not constitute a cost relating to the actual present use of the land (Kirela at [125]-[127]).

Relocation Costs

296. Z Buhach claims relocations costs in respect of the 2700 Elizabeth Drive property under s 59(1)(c) of the JT Act. These include expenses for:

1. telephone and postage redirection;

2. storage; and

3. costs associated with (but not the cost of) the construction of a new single storey dwelling, driveway, kerb and guttering, water tanks, a septic system, greenhouse, side shed, retaining wall and landscaping on the 2292 The Northern Road Buhach property.

297. A claim for compensation for rent was abandoned at the hearing.

298. The necessity for relocation is not, as the Court understands it, in dispute. Nor, was the reasonableness of the relocations cost contested. Rather, TNSW takes issue with their payment on the basis that Z Buhach has not provided evidence that he has in fact relocated (a matter previously not contested), or that these costs have in fact been incurred.

299. There is no doubt that the applicant proposes to relocate from the property at 2700 Elizabeth Drive to 2292 The Northern Road. Given that the necessity for relocation was not the subject of challenge by TNSW, it is difficult to understand the acquiring authority’s refusal of most of the claimed relocation costs (especially as it agrees with the payment of funds to compensate for disadvantage arising from relocation pursuant to s 55(e) of the JT Act as discussed below).

300. The applicants took the Court to a number of invoices addressed to the Buhachs evidencing the construction of a new dwelling at 2292 The Northern Road for the purpose of relocation. Where there are tax invoices that have been issued for works undertaken in respect of the relocation it may be reasonably inferred that these have been, or will be, paid by the applicant in those proceedings. TNSW did not, it should be observed, cavil with the reasonableness of those costs. The construction of a new dwelling for the purpose of relocation was accepted by Rowan.

301. I find that relocation was intended to occur upon the completion of the new dwelling at 2292 The Northern Road, which at the time of the hearing was in the process of being constructed for this very purpose. No affidavit deposed to by the applicant is necessary for the Court to make this finding. Absent any evidence to the contrary, the relocation costs fall within acceptable limits of that which may be claimed and are compensable.

302. As at the conclusion of the hearing there were, however, three claims for compensation for relocation where there was no evidence of any payment for those works:

1. $15,000 for the concrete extension of part of a driveway to dwelling at 2292 The Northern Road to connect bitumen and concrete components;

2. $2,667.10 for a quotation from Silverwood Nursery Supplies for a greenhouse at 2292 The Northern Road; and

3. an allowance for $20,000 for landscaping at 2292 The Northern Road.

303. In my view, these amounts fall into a different evidential category to the amounts claimed by Z Buhach for which there are existing invoices. Absent an invoice it is not known if these amounts were financial costs “reasonably incurred” in connection with Z Buhach’s relocation. They are therefore not compensable.

304. Z Buhach also claims an amount for disadvantage resulting from the relocation from 2700 Elizabeth Drive to 2292 The Northern Road in the sum of $78,381. TNSW agreed that the applicant was entitled to this amount under s 55(e) of the JT Act.

GST

305. It was not a matter of controversy that if the applicants were registered for GST any disturbance that the Court determines that they are entitled to should be determined on a GST exclusive basis. By contrast, if the applicants are not registered for GST, any compensation for disturbance awarded by the Court should be calculated on a GST inclusive basis.

306. The applicants conceded that they were registered for GST in relation to the Christmas tree business previously conducted at 2700 Elizabeth Drive. This concession is consistent with a submission by TNSW that indicated that both John Zdravko Buhach and Sandy Buhach are registered for GST as a “family partnership”. However, John Zdravko Buhach (Z Buhach) does not appear to be registered for GST in his own name and the registration of the family partnership cannot, according to TNSW, be taken to be a registration of him in the 2700 Elizabeth Drive Z Buhach proceedings.

307. In relation to the GST position with respect to 2292 The Northern Road, it was not conceded by the Buhachs that there was any evidence that they were registered for GST for any business activity occurring on that property. This may be accepted. The certificate annexed to TNSW’s closing submissions was never formally admitted into evidence. It does did not assist in this regard.

308. Therefore, on the evidence before the Court the disturbance that the Court has determined is payable in the Z Buhach proceedings for the acquisition at 2700 Elizabeth Drive and that the Buhachs are entitled to in 2292 The Northern Road proceedings is to be determined inclusive of GST.

Summary of Disturbance Compensation

The Z Buhach Proceedings (2700 Elizabeth Drive)

309. Consistent with my findings above regarding the applicant’s disturbance claims a summary of compensable disturbance in respect of this set of proceeding pursuant to s 55(d) and (e) of the JT Act is as follows:

1. legal costs (s 59(1)(a)) - $25,748.98;

2. valuation costs (s 59(1)(b)) - $35,884.31;

3. planning and survey fees (s 59(1)(a)) - $10,624.18;

4. relocation costs (s 59(1)(c)) - $227,670.15; and

5. disadvantage (s 55(e)) - $78,381.

310. This brings a total compensable claim for disturbance and disadvantage to $378,308.62, inclusive of GST.

The Buhach Proceedings (2292 The Northern Road)

311. Again, consistent with my findings above regarding the applicants’ disturbance claims a summary of compensable disturbance in respect of this set of proceeding pursuant to s 55(d) of the JT Act is as follows:

1. legal costs (s 59(1)(a)) - $5,524.20;

2. valuation costs (s 59(1)(b)) - $10,475.52; and

3. planning and survey fees (s 59(1)(a)) - $9,524.18.

312. This brings a total compensable claim for disturbance to $25,523.90, inclusive of GST.

Compensation Payable

313. In conformity with the reasons set out above, the summary of the claims for compensation are set out below in respect of each set of proceedings:

The Z Buhach Proceedings (2700 Elizabeth Drive)

2700 Elizabeth Drive
Head of Compensation Under the JT Act	Amount
Market value of the acquired land and the acquired easement (s 55(a))	$9,408,786
Market value of the acquired lease (s 55(a))	$255,370
Disturbance (s 55(d))	$299,928 (rounded up)
Disadvantage from relocation (s 55(e))	$78,381
Total	$10,042,465

The Buhachs Proceedings (2292 The Northern Road)

2292 The Northern Road
Head of Compensation Under the JT Act	Amount
Market value of the acquired land (s 55(a))	$2,271,895
Market value of the acquired lease (s 55(a))	$16,092
Disturbance (s 55(d))	$25,524 (rounded up)
Total	$2,313,511

Costs

314. Having regard to the applicable principles and authorities set out in UTSG Pty Ltd v Sydney Metro (No 6) [2020] NSWLEC 63 (at [403]-[407]), there is no basis not to order TNSW to pay the applicants’ costs in both sets of proceedings.

Orders

315. The formal orders of the Court are therefore:

Proceedings 2019/00075642

1. the compensation payable to the applicant under the JT Act for the acquired interests in Lot 17, DP 1240511 at 2700 Elizabeth Drive, Luddenham (the Z Buhach proceedings) is $10,042,465;

2. the parties are granted leave to approach the Court within 28 working days for the purpose of correcting any arithmetical errors contained in the judgment;

3. the respondent is to pay the applicant’s costs as agreed or assessed; and

4. the exhibits are to be returned.

Proceedings 2019/00075655

5. the compensation payable to the applicants under the JT Act for the acquired interests in Lot 11, DP 1240511 at 2292 The Northern Road, Luddenham (the Buhachs proceedings) is $2,313,511;

6. the parties are granted leave to approach the Court within 28 working days for the purpose of correcting any arithmetical errors contained in the judgment;

7. the respondent is to pay the applicants’ costs as agreed or assessed; and

8. the exhibits are to be returned.

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Decision last updated: 12 December 2022