Constantino v Roads and Traffic Authority of New South Wales - [2004] NSWLEC 517

No judgment structure available for this case.

Reported Decision: 135LGERA 365

Land and Environment Court

of New South Wales

CITATION: Constantino v Roads and Traffic Authority of New South Wales [2004] NSWLEC 517

PARTIES:
APPLICANT:
Constantino
RESPONDENT:
Roads and Traffic Authority of New South Wales

FILE NUMBER(S): 30191 of 2003

CORAM: Bignold J

KEY ISSUES: Compensation :- Compulsorily acquired land forming small part of larger holding-before and after method of valuation-injurious affection claim in respect of residue lands.

LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991, ss 54, 55, 56 and 66

CASES CITED: Gosford Shire Council v Green (1980) 48 LGRA 201;
Hordern v Sydney City Council (1940) 14 LGR 200 ;
Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196;
Kerswell v Commissioner for Main Roads (Court of Appeal-unreported 13 July 1978);
Realty Corporation Ltd v The Commissioner for Main Roads (1940) 14 LGR 204

DATES OF HEARING: 08-11/03/2004, 21/04/2004, 08/06/2004 (view)

DATE OF JUDGMENT: 09/15/2004

LEGAL REPRESENTATIVES:

APPLICANT:
Mr J Webster SC with Mr I Hemmings, Barrister
SOLICITORS
J P Lawyers
RESPONDENT:
Mr P Tomasetti, Barrister
SOLICITORS
Henry Davis York

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BIGNOLD J

15 September 2004

30191 of 2003 VINCENZO CONSTANTINO v ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES

HIS HONOUR
A. INTRODUCTION

1 This is an objection pursuant to the Land Acquisition (Just Terms Compensation) Act 1991, s 66 made by the Applicant to the amount of compensation offered to him by the Respondent in respect of the Respondent’s compulsory acquisition of part of the land owned by him situate at McIver Avenue, Hoxton Park effected by Compulsory Acquisition Notice published in Government Gazette No 163 of 4 October 2002.

2 By that Notice, the Respondent compulsorily acquired some 20 parcels of land, including the Applicant’s land (known as lot 26 Deposited Plan 1042996) for the purposes of the Roads Act 1993. It is common ground that these acquisitions, together with many other compulsory acquisitions of lands were for the purpose of providing and constructing the Western Sydney Orbital Motorway, being a major roadworks project which forms part of the National Highway System linking Prestons in the south and Wahroonga in the north. The proposal is currently under construction.

3 An amount of $422,150 compensation had been offered to the Applicant in the compensation notice given to him on 27 November 2002, comprising $335,000 (market value), $7,150 (disturbance) and $80,000 (injurious affection), these amounts being referable to some of the particular paragraphs contained in the Just Terms Act, s 55.

4 In his filed Points of Claim, the Applicant had claimed compensation in the amount of $3,042,000.

5 On the hearing of the objection, the Applicant contended for a determination by the Court of compensation in the amount of slightly less than $3 million whereas the Respondent contended for a determination by the Court of compensation in the amount of $380,000 (plus an agreed amount of $26,207 in respect of disturbance).

6 Although these vastly disparate amounts of compensation respectively contended for by the parties can be entirely explained simply on the basis of the competing valuation evidence adduced at the hearing, in my respectful judgment, such an explanation would be entirely inadequate in exposing the true reason for such a vast disparity of valuation opinion. The true reason lies not in the realm of competing valuation opinion, but in the realm of proper valuation principles where the solution to the adjudication required in this case is to be found in the elucidation and application of the proper valuation principles concerning the statutory measure of compensation that is prescribed by ss 54 to 61 inclusive of the Just Terms Act.

7 As will later be shown, the manner in which the before and after valuation method was employed by each of the Applicant’s Valuers in the present case, in order to derive his ultimate opinion concerning the value of the compulsorily acquired land, has unwittingly deviated from the prescribed statutory measure of compensation to a significant degree, yielding, in my respectful opinion, a self-evidently erroneous opinion of the compensable value of the subject land.

8 Because all of the valuations adduced at the hearing are tainted by the erroneous manner of employing the before and after valuation method (including that of the Respondent’s Valuer Mr Wood, although not nearly to the extent of the error exposed in the Applicant’s Valuers) they must be rejected. Fortunately, there remains sufficient reliable evidence concerning the value of residentially lands zoned (actual or proposed zonings) in the geographic neighbourhood of the subject land at the date of compulsory acquisition that the Court can reasonably utilise in its judicial task of determining the value of the subject land and of determining the extent of injurious affection caused to the Applicant’s residue lands by reason of the proposed public roadworks purpose.

9 But before undertaking that task, I should fully explain why I have concluded that the manner in which the before and after valuation method was employed by each valuer witness in this case was legally flawed so as to be incapable of determining compensation in accordance with the Just Terms Act, s 55.

B. THE USE OF THE “BEFORE AND AFTER” VALUATION IN THE PRESENT CASE

10 As earlier noted the compulsorily acquired land comprises part only of three adjoining lots (lots 117, 118 and 119 in Deposited Plan 2475) having an agglomerated area of 3.486 ha and collectively known as No 65 McIver Avenue, Hoxton Park which were owned by the Applicant at the date of compulsory acquisition.

11 The compulsorily acquired land was created by the registration on 30 July 2002 of Deposited Plan 1042996 prepared on behalf of the Respondent. That plan included the subdivision of lot 117 Deposited Plan 2475 into two lots—lot 26 comprising an area of 3041 m2 (being the proposed compulsorily acquired land situate at the north-eastern triangular corner of lot 117) and lot 23 comprising an area of 7322 m2 being the residue of lot 117. A copy of sheet 3 of Deposited Plan 1042996 is annexed hereto and marked “A” showing lots 23 and 26 (and parts of the adjoining lots 117 and 118).

12 The combined effects of the fact that the compulsorily acquired land comprised only a small portion (less than 10 percent of the total land holding and approximately 30 percent of lot 117 considered in isolation of the other adjoining lots) of the total area of the landholding owned by the Applicant, and the fact that the purpose of acquiring the land was for road purposes (which will result in the constructed road having a common boundary with the retained lot 23) prima facie quintessentially qualified the “before and after” valuation method as the most appropriate manner to determine compensation in the present case.

13 The “before and after” valuation method is briefly described in the following passage from Chapter 4 (par 4.22) of Douglas Brown’s “Land Acquisition” 4th ed:

before and after

The expression before and after is used in respect of enhancement and depreciation. The land is valued at the relevant date as if the subject causing enhancement or depreciation had not occurred and then the land is valued as if the subject causing the enhancement had been carried out. The difference may signify loss or gain as the case may be to the dispossessed owner.

14 The “before and after valuation method” has been judicially approved on many occasions in the context of the Public Works Act 1912, s 124 prescribing the statutory measure of compensation for the compulsory acquisition of land. That section is readily assimilable to the Just Terms Act, s 55 and the judicial approval of the method in that earlier statutory context is readily applicable to the Just Terms Act, s 55.

15 In two 1940 decisions of the Land and Valuation Court (each involving the resumption of road frontage land strips) Roper J described the method, and approved it, in the following terms:

It appears to me that the easiest and the proper way to determine the value of the land resumed and the damage to the residues by severance is to ascertain the difference between the value of the lots before resumption and the value of the residues after resumption.

Realty Corporation Ltd v The Commissioner for Main Roads

If the whole of the land had been resumed, the measure of compensation, apart from special considerations such as the first item dealt with here, would have been that laid down in Spencer v. Commonwealth of Australia ([1907] 5 C.L.R. 418), namely the price that a willing purchaser would at the date of resumption have had to pay to a vendor not unwilling but not anxious to sell. Part only of the land having been resumed, an additional factor enters because it is necessary to consider not only what would have been obtained for the part resumed from the hypothetical purchaser, but also what damage, if any, inures to the remaining land by the fact of severance. The combined effect of the value of what has been taken away and the damage, if any, caused by the severance can be ascertained by subtracting from the value to the plaintiffs at the date of resumption of the land held by them prior to resumption the value to them at that date of the land retained by them after the resumption. In ascertaining either of these values it is relevant to consider the use to which the land can be put.

: Hordern v Sydney City Council (1940) 14 LGR 200 at 203/204

16 Reynolds JA, in giving the judgment of the Court of Appeal in Gosford Shire Council v Green (1980) 48 LGRA 201 at 208 cited with approval the judgment of Roper J in Realty Corporation and explained the rationale and function of the before and after valuation method in the following statement:

If the whole parcel is valued at the time of resumption and then the residue is valued, the difference is the ascertained amount of compensation, and severance damage and enhancement of the value of the residue are comprehended without any necessity for specification.

17 All three Valuers who gave evidence in the case employed the before and after valuation method, and obviously there can be no demur to that common approach adopted by these highly experienced Valuers, other than to question whether all of the Applicant’s retained lands (comprising three lots) should have been included in the exercise. This is because the compulsorily acquired land was created by the subdivision of only one of those lots (ie lot 117) and the residue of that lot following the registration of Deposited Plan 1042996 was relevantly “severed from” and “adjoins” the compulsorily acquired land (vide s 55(f) of the Just Terms Act), although it may also be fairly said that lots 118 and 119 relevantly ‘adjoin” the compulsorily acquired land. Another reason for otherwise legitimately confining the adjoining land to lot 23 is the joint opinion of the two town planning experts (Mr Rhodes and Mr Sanders) that lot 117 was capable of being developed independently of lots 118 and 119 and the development potential of lot 117 in both its before, and after, compulsory acquisition conditions was agreed to be 14 lots and community lot in a community title subdivision before acquisition, and 11 lots in a conventional land subdivision after the acquisition.

18 But this is only a possible qualification on the application of the before and after subdivision method commonly adopted by the three Valuers and is not of such importance as to require rejection of the valuation method employed if that were the only criticism of the valuation method that was employed.

19 However, it is another distinctive feature of the manner that the before and after valuation method was employed (by the Applicant’s Valuers) which in my respectful opinion involved serious error of valuation principle concerning the before and after valuation method. That feature was that the planning and zoning restrictions ascribed to the subject lands (meaning in this present context all three lots owned by the Applicant) in the before and after valuations were radically different—in the “before valuation” the subject lands were regarded as being zoned for immediate residential development notwithstanding their actual zoning under the relevant local environmental plan, whereas in the after valuation, their actual zoning under the local environmental plan and their proposed zoning under a draft local environmental plan were applied.

20 Mr Wood did not adopt that approach in his before and after valuation. Instead he ascribed the same zoning or planning restrictions (namely a residential zoning) to the land in his before and his after valuation. In his reports in reply (Exhibits F and Exhibit J) to Mr Juniper’s valuation and Mr Neskowski’s valuation Mr Wood criticised their “after values” insofar as each valuer had significantly downvalued the land because of the proposed “open space” zoning under the draft local environmental plan. (Mr Juniper had reduced the value of the land by more than $1.2 million on account of the proposed “open space” zoning and Mr Neskowski had reduced the land by some $1.5 million on the same account).

21 Mr Wood considered that the “after values” proffered by Mr Juniper and Mr Neskowski reflecting the proposed “open space” zoning were erroneous in principle—in particular, he considered that that proposed zoning was a “separate issue” from the Respondent’s acquisition and the road proposal.

22 He was also of the opinion that if an assumed “residential” zoning had been adopted in the “before valuation” (all three Valuers had so proceeded) the same zoning should have been adopted in the “after value”. (He alone had adopted that same consistent approach to the zoning of the land.)

23 Mr Juniper in his report in reply (Exhibit 6) cited the following statement from the Joint Report of the town planning experts (Exhibit 8):

Both experts agree that the subject land would have been zoned Residential 2(a) under the consolidating Liverpo9ol LEP 1997 as at the date of acquisition. Mr Sanders is of the view that the current planning proposals for the area( ie as agreed by the experts to be proposed 6(c) Recreation Corridor under Liverpool LEP 1997 (Draft Amendment No. 7) is not relevant on Town planning grounds. Mr Rhodes is of the view that the proposed zoning may be relevant given that, except for the WSO the land would have been zoned residential as agreed.

24 He then responded to Mr Wood as follows:

after

25 All three Valuers participated in extensive joint conferencing both before and during the hearing and a number of joint reports were adduced at the hearing (eg Exhibits B, 12, 15 and 16). Although the Valuers remained in significant disagreement on the issue under present decision their Joint Reports helpfully isolated points of agreement and disagreement and the contents of the Joint Reports have enabled me to determine the compensation payable in this case, notwithstanding my wholesale rejection of the valuation opinions derived from their employment of the before and after valuation method.

26 Because the Valuers in preparing their respective valuations and giving oral testimony significantly relied upon the opinions originally proffered individually by the town planning experts—Mr Rhodes (for the Applicant) and Mr Sanders (for the Respondent)—and then contained in their Joint Statement (Exhibit 8) concerning the planning and zoning restrictions affecting the subject lands, it may be helpful to here recite some relevant passages from that joint statement:

5. Both experts agree that the subject land was included in an area (Precinct 3A) considered for rezoning for residential use in 1992.

6. Both experts agree that the announcement of the WSO in 1993/4 delayed the release of the area.

7. Both experts agree that had the release of the subject land not been delayed all of the land would have been zoned Residential 2(e1) under an amendment to LEP 108 (the instrument that applied to the other Release Areas).

8. Both experts agree that the subject land would have been zoned Residential 2(a) under the consolidating Liverpool LEP 1997 as at the date of acquisition. Mr Sanders is of the view that the current planning proposals for the area (i.e. as agreed by the experts to be proposed 6(c) Recreation Corridor under Liverpool LEP 1997 (Draft amendment No. 71) is not relevant on Town planning grounds. Mr Rhodes is of the view that the proposed zoning may be relevant given that, except for the WSO, the land would have been zoned residential as agreed.

C. THE BEFORE AND AFTER VALUATIONS ARE LEGALLY FLAWED

27 As earlier noted, the rationale and function of the before and after valuation method is to produce a single figure in respect of the separate elements of compensation payable in a case (such as the present) involving the taking of part only of the Applicant’s land provided that that result is conformable to the statutory measure of compensation prescribed by s 55 of the Just Terms Act. For reasons that have already been stated and presently will be further developed, in my judgment, the before and after valuations undertaken in the present case are profoundly flawed in terms of valuation principle and are not conformable to the measure of compensation prescribed by the Just Terms Act, s 55.

28 It is necessary to recite that section and its allied sections as follows:

54 Entitlement to just compensation

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

In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division):

(a) the market value of the land on the date of its acquisition,

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

(c) any loss attributable to severance,

(d) any loss attributable to disturbance,

(e) solatium,

(f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.
56 Market value

(1) In this Act:

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

(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.

29 In the present case, the particular focus of the before and after valuation is to determine compensation that derives from the application of pars (a) and (f) of s 55 (it being common ground that no other paragraph is attracted by that method as employed in the present case).

30 At the risk of stating the obvious, par (a) of s 55 (read with s 56) is confined to the value of the compulsorily acquired land whereas par (f) of s 55 is confined to residue land (other than the compulsorily acquired land). But the contrast in these foci is sustained further in relation to the effect on value of the relevant lands (by way of increase or decrease) “caused by” (in the case of par (a)) or “by reason of” (in the case of par (f)) “the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired” (the “public purpose”).

31 Thus, in the case of the compulsorily acquired land, the measure of compensation is its ‘market value” (defined by s 56(1)) unaffected by the public purpose whereas in the case of the residue land (“other than the compulsorily acquired land”) the measure of compensation is any decrease in value by reason of that public purpose. (Par (f)) also brings into account in determining compensation any “increase” in the value of the residue land by way of enhancement of that land, but for the moment that aspect of s 55(f) (which was referred to by Mr Wood alone) may be put aside).

32 Accordingly, as a matter of valuation principle, the employment of the before and after valuation method in the present case can be expected to yield a single figure which at the one stroke reflects (i) the market value of the compulsorily acquired land unaffected by the public purpose; and (ii) the decrease in value of the Applicant’s residue lands by reason of that public purpose.

33 However, it is immediately obvious that the single figure yielded by the before and after valuations undertaken by the Applicant’s Valuers does not reflect the decrease in value of the residue lands by reason of the public purpose but rather, also reflects the considerable decrease in value of the residue lands, not by reason of that public purpose, but by reason of the proposed open space zoning. It is this factor inserted by each of the Applicant’s Valuers into his “after value” which is an entirely foreign element (which is conspicuously absent from the “before value”) which generates a distorted and false result in terms of the Just Terms Act, s 55.

34 The decrease in the value of the Applicant’s residue lands that is factored into Mr Juniper’s and Mr Neskowski’s “after value” in their before and after valuation (to the extent of some $1.5 million in the case of each valuation) is expressly attributed to the proposed open space zoning of the residue lands under the draft local environmental plan.

35 It makes no claim or pretence to be a decrease in value “by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired” in terms of the Just Terms Act, s 55(f).

36 Throughout the hearing, Senior Counsel for the Applicant had disavowed the Just Terms Act, s 55(f) as providing the statutory measure of compensation that encompassed the Applicant’s Valuers’ opinions of the decrease in the value of the Applicant’s residue lands on account of the proposed open-space zoning of those lands under the Council’s draft local environmental plan. Instead, the claim was founded upon the disingenuous proposition that it was an “anomalous” or a “curious” outcome or by-product of the otherwise unexceptional application to the facts of the present case of the conventional before and after valuation method. (The acknowledged “anomaly” concerned the prospect that the Applicant might expect to be paid full value for his residue lands upon acquisition by the relevant public authority when the proposed open space zoning took effect, independently of his present claim to compensation for the decrease in the value of those lands on account of the proposed open space zoning, and irrespective of whether he recovered substantial compensation for that decrease in value in these proceedings.)

37 In this respect, Senior Counsel for the Applicant made the following submissions—

before value

after value

38 In advancing these submissions, Senior Counsel stated that it was not the Applicant’s case that the proposed open space zoning under the Council’s draft local environmental plan had been caused by the proposal for the Western Sydney Orbital Road.

39 However, immediately following the completion of the hearing, Senior Counsel for the Applicant filed a brief note to the effect that the Applicant also and alternatively relied upon the Just Terms Act, s 55(f) in support of his claim for compensation for the decrease in the value of the Applicant’s residue lands attributable to the proposed open space zoning under the draft local environmental plan, but did not wish to advance any further argument.

40 Subsequently, Counsel for the Respondent signified no objection to the Court receiving the additional submission on behalf of the Applicant and indicated no desire for the opportunity for the Respondent to advance further argument.

41 This embarrassing volte face in the presentation of the Applicant’s case emphasises the inherent and acute problems inevitably encountered in any attempt to substantiate the Applicant’s claim to compensation for the decrease in the value of the Applicant’s residue lands following the compulsory acquisition, but where such decrease is neither caused by it nor by the public purpose of carrying out the Western Sydney Orbital Road project, but by the proposed open space zoning under the Council’s draft local environmental plan.

42 This difficulty is intensified because the Just Terms Act, Div 4 of Pt 3 prescribes the measure and basis for compensation in respect of the compulsory acquisition of land, in circumstances where s 55 exclusively prescribes the matters to be considered in determining the amount of compensation and no such matter relevantly embraces compensation for any decrease in the value of any residue lands caused by the zoning controls applying to those lands where those controls are unrelated to the public purpose proposal for which the compulsorily acquired land has been acquired.

43 In passing, it may also be noted that the Environmental Planning and Assessment Act 1979 does not provide for the payment of compensation in respect of the effects of zoning proposals on the value of lands.

44 In the light of these prevailing legal norms governing the determination of compensation, the Applicant’s claim for compensation on account of any decrease in value caused by the proposed open space zoning appears to be incapable of substantiation.

45 Although steadfastly disavowing reliance upon s 55(f) to support the claim throughout the hearing, the Applicant belatedly sought to invoke that statutory warrant, but in truth, the invocation was no more than incantation because there was simply no support in the evidence for any finding of the requisite causal relationship between the proposed public purpose (the Western Sydney Orbital Road) and the proposed open space zoning under the draft local environmental plan.

46 In this area of the law it is well established that there may be a causal connexion between a zoning restriction imposed by planning legislation and a proposed public work, such that in determining the value of the land taken the zoning restriction must be ignored: see Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196 at 207. But as Jacobs J said at 207, in giving the leading judgment in that case, there will be cases where the resumption and the act of zoning are unconnected or unrelated. It may be accepted that the San Sebastian principle is now embodied in the concept of “market value” as defined by the Just Terms Act, s 56(1).

47 However, in the present case, there is nothing in the evidence that even suggests any relevant causal connexion between the proposed public purpose of the Western Sydney Orbital Road and the proposed open space zoning under the Council’s draft local environmental plan. Indeed, under that draft plan (which was publicly exhibited in the month preceding the compulsory acquisition date) the land that was about to be compulsorily acquired was excluded from the land to which the draft plan was intended to apply, but the whole of the Applicant’s residue lands were included in the proposed open space zone.

48 Subsequent to the compulsory acquisition, Liverpool City Council resolved to proceed with the draft plan but by the time of the hearing, the draft plan had not been made. On 18 June 2004, the draft plan was made by the Minister under the Environmental Planning and Assessment Act 1979, as Liverpool Local Environmental Plan 1997 (Amendment No 71): vide Government Gazette No 98 of 18 June 2004.

49 According to the evidence, there is no causal connexion whatsoever between the public purpose proposal involving the Western Sydney Orbital Road and the proposed open space zoning (ultimately adopted by Liverpool Local Environmental Plan 1997 (Amendment No 1) in respect of various designated lands (including the Applicant’s residue lands) as open space. (The precise zoning nomenclature is “6(c) Recreation-Corridor”).

50 Accordingly, there is no factual basis whatsoever for any finding that the decrease in the value of the Applicant’s residue lands on account of the proposed open space zoning was caused by “reason of the carrying out of, or the proposal to carry out, the public purpose for which the compulsorily acquired land was acquired” so as to claimable compensation pursuant to the Just Terms Act, s 55(f).

51 It follows that the Applicant’s claim in this respect is not a claim that falls within the ambit of s 55(f) and the Applicant’s belated and desperate invocation of that statutory warrant to support his claim must be entirely rejected.

52 This conclusion means that the compensation claimed for the decrease in the value of the Applicant’s residue lands on account of the proposed open space zoning is left only with the support of the before and after valuations undertaken by Mr Juniper and Mr Neskowski. But for the reasons I have already given, those valuations are profoundly flawed, not only in their results but in the manner in which they were applied. The flaw in the result is obvious inasmuch as the allowance of an amount in the order of $1.5 million reflecting a decrease in value of the Applicant’s residue lands on account of the proposed open space zoning under the draft local environmental plan is simply extraneous to any head of recoverable compensation prescribed by the Just Terms Act, s 55. For that reason alone, the before and after valuations of Mr Juniper and Mr Neskowski are profoundly flawed and must be rejected because instead of yielding a single figure reflecting the overall measure of compensation that is recoverable under s 55, it produces a figure that involves a foreign element yielding compensation in the order of $1.5 million which is singularly unconformable to the statutory measure of compensation.

53 It is not necessary to proceed further with a critique of the manner in which the Applicant’s Valuers employed the before and after valuation method in the present case but for completeness, I should say that I entirely reject the Applicant’s simplistic submission that just because the before and after valuation method produces an anomaly (apparently by way of significant boon for the Applicant) that is no reason to reject the method. This submission elevates a valuation method to a position of assumed importance when in fact the true test and priority of any valuation method lies in its giving true effect to the statutory measure of compensation prescribed by the Just Terms Act, s 55. Here, for the reasons I have given, the method significantly distorts and nullifies the statutory measure of compensation and for that reason the method must be rejected in favour of a method that faithfully conforms to the statutory measure of compensation.

54 Finally, I should note other flaws in the manner in which the Applicant’s Valuers employed the before and after valuation method. The basic methodological flaw was to apply different planning assumptions to the residue lands in the before and after values. This basic flaw meant that the true comparison that is normally yielded by the before and after valuation method was distorted: cf Kerswell v Commissioner for Main Roads (Court of Appeal—unreported 13 July 1978) per Reynold JA:

before and after

55 Although the Valuers adopted the agreement reached by the planners that in the before valuation the whole of the Applicant’s land should be valued as if it were zoned for residential development, the employment of the before and after method did not require or justify, the adoption in the after value of a significantly disparate zoning assumption in respect of the Applicant’s residue lands.

56 Mr Wood’s after value was criticised by the Applicant’s Senior Counsel for failing to value the Applicant’s residue lands according to the condition in which they existed at the date of the compulsory acquisition, but he alone of the Valuers adopted a consistent approach to the zoning impact on the residue lands in both the before and after values, and on that account preserved the integrity of the before and after valuation method.

57 Notwithstanding the agreement reached between the planners (which agreement was adopted by the Valuers), the zoning (actual and proposed) of the Applicant’s residue lands was precisely the same from the viewpoint of the before and after values of the residue lands. It is only the zoning of the compulsorily acquired land which was different and it is only in valuing that land under the Just Terms Act which required the assumption of a different zoning (that did not reflect any decrease in value on account of the public purpose of the Western Sydney Orbital Road)

58 For all of the foregoing reasons, I hold that the before and after valuations are legally flawed and on that account, they are to be entirely rejected.

D. DETERMINATION OF COMPENSATION IN THE PRESENT CASE

59 Having rejected the before and after valuations adduced in the proceedings, the question arises as to how is compensation to be determined.

60 In my judgment, there remains sufficient available evidence that can be fairly utilised to determine compensation in this case. But I do not myself think that a before and after valuation exercise is necessary. Rather, I am satisfied that the piecemeal valuation method can be employed in the present case for the following reasons—

61 Of these three specific components of recoverable compensation, in terms of s 55, the only item in serious dispute concerns the dollar rate per square metre to be applied to the compulsorily acquired land, namely 3,041 m2, upon the agreed planning assumption that it was zoned for immediate residential development.

62 In so determining the value of the compulsorily acquired land, it is to be assumed upon the agreed position adopted by the planners that the lands in this particular neighbourhood of the suburb of Hoxton Park (known as Precinct 3A in the Liverpool City Council Urban Release Programme) by the date of compulsory acquisition would have been zoned and probably developed for residential purposes. Accordingly, the compulsorily acquired land is to be valued upon the basis that it would form part of an infill residential site in an already (assumed to be) developed residential suburb.

63 Once this planning and valuation assumption is made, the sales evidence of en globo residentially zoned lands provides the best evidence of value and is to be significantly preferred to the sales evidence of a number of sales that occurred in the immediate neighbourhood of lands that were still zoned “future urban” and that were not already developed for residential purposes.

64 In this respect, I accept Mr Juniper’s selection and analysis of sales of residentially zoned properties available for immediate residential development, as providing the best evidence of the value of the compulsorily acquired land at the date of compulsory acquisition by way of comparison of values.

65 He derives from his two principal sales ((i) 60 Fifteen Avenue, West Hoxton; and; (ii) the former Hoxton Park Public School) adjusted $ rates per square metre of $195 and $184 respectively, from which he adopts a base rate of $195 m2 for application to the Applicant’s land holding variably reduced to $185 m2 for a portion of 8,493 m2 to reflect the noise level affectation from the nearby Hoxton Park Aerodrome. This reduced rate would apply to the compulsorily acquired land being the location most proximate of the Applicant’s land holding to the Aerodrome.

66 In my judgment, it is fair and reasonable to apply this rate of $185 per square metre to the compulsorily acquired land to determine an unaffected market value of $562,585 (ie $185 x 3041 m2).

67 The dispute concerning the claim to injurious affection caused to the Applicant’s residue lands by the carrying out of the Western Sydney Orbital Roadworks was ultimately presented to the Court on the basis that although Mr Wood considered that any relevant decrease in the value of the residue lands would be set off by a counterpart increase in the value of these lands caused by the enhancement of the road system in the neighbourhood, he agreed with Mr Juniper that if there were any compensation for injurious affection it should be computed upon the basis of a decrease of 10 per cent in the en globo value of the relevant portion of the residue lands (within the 100 m radius of the road alignment) namely an agreed area of 14,780 m2.

68 In my judgment, Mr Wood’s opinion on the value of the enhancement of the retained lands by virtue of the creation of the Sydney Western Orbital Road has not been demonstrated other than in a theoretical sense.

69 I think that this is a case for resolving any reasonable doubt in favour of the Applicant, but in any event, I think that a net decrease in value of the residue lands by virtue of detrimental traffic noise impact created by the major public work is a far more probable outcome.

70 Accordingly, I would uphold the Applicant’s injurious affection claim by dint of the decrease in the value of the residue lands by virtue of the construction of the Sydney Western Orbital Road by adopting the measure of compensation agreed between Mr Wood and Mr Juniper (Exhibit B).

71 This is for an amount of $273,430 being 10 percent of the en globo value of $185 (ie $18.50) applied to 14,780 m2 of affected residue lands.

72 I am very conscious of the fact that I have determined this amount of injurious affection by reference to the assumed residential zoning of the Applicant’s residue lands. This assumed zoning does not reflect the proposed open space zoning (as ultimately adopted) but the underlying zoning upon the basis of which all Valuers opined that the land would be eventually acquired by the relevant public authority after the proposed zoning had taken effect (as it now has by virtue of the making of Liverpool Local Environmental Plan 1997 (Amendment No 71). This, I think is a fair approach because it appears that the Respondent no longer intends to build acoustical barriers to protect the Applicant’s residue lands from adverse noise impacts from the roadway because of the proposed open space zoning of that residue land. (Such barriers would have been installed but for that public zoning of the Applicant’s residue lands.) In these circumstances, the Applicant is being compensated in the present proceedings for the injurious affection caused to his residue lands by the carrying out of the public purpose upon the compulsorily acquired land and other lands, rather than at some future date if and when his residue lands are acquired by the relevant public authority (when some real doubt might have emerged concerning the impact of the value then to be paid for the lands of the absence of acoustical barriers from the road infrastructure to protect the Applicant’s residue lands from adverse noise impacts).

73 For all of the foregoing reasons, I make the following orders—

Just Terms Act

disturbance (s 55(d)) $26,207

residue lands (s 55(f) $273,430

Citations

Constantino v Roads and Traffic Authority of New South Wales [2004] NSWLEC 517

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CITATION:	Constantino v Roads and Traffic Authority of New South Wales [2004] NSWLEC 517
PARTIES:	APPLICANT: Constantino RESPONDENT: Roads and Traffic Authority of New South Wales
FILE NUMBER(S):	30191 of 2003
CORAM:	Bignold J
KEY ISSUES:	Compensation :- Compulsorily acquired land forming small part of larger holding-before and after method of valuation-injurious affection claim in respect of residue lands.
LEGISLATION CITED:	Land Acquisition (Just Terms Compensation) Act 1991, ss 54, 55, 56 and 66
CASES CITED:	Gosford Shire Council v Green (1980) 48 LGRA 201; Hordern v Sydney City Council (1940) 14 LGR 200 ; Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196; Kerswell v Commissioner for Main Roads (Court of Appeal-unreported 13 July 1978); Realty Corporation Ltd v The Commissioner for Main Roads (1940) 14 LGR 204
DATES OF HEARING:	08-11/03/2004, 21/04/2004, 08/06/2004 (view)
DATE OF JUDGMENT:	09/15/2004
LEGAL REPRESENTATIVES:	APPLICANT: Mr J Webster SC with Mr I Hemmings, Barrister SOLICITORS J P Lawyers RESPONDENT: Mr P Tomasetti, Barrister SOLICITORS Henry Davis York