Dzwonnik v Roads and Traffic Authority of New South Wales
[2003] NSWLEC 204
•09/11/2003
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Land and Environment Court
of New South Wales
CITATION: Dzwonnik v Roads and Traffic Authority of New South Wales [2003] NSWLEC 204 PARTIES: APPLICANT
RESPONDENT
Stefan Dzwonnik
Roads and Traffic Authority of New South WalesFILE NUMBER(S): 30002 of 2001 CORAM: Talbot J KEY ISSUES: Compulsory Acquisition of Land :- compensation LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991
Shellharbour Local Environmental Plan No. 16
Shellharbour Local Environmental Plan 2000CASES CITED: The Crown v Murphy (1990) 64 ALJR 593 DATES OF HEARING: 06/08/2003, 07/08/2003, 08/08/2003 (Site Inspection), 11/08/2003, 12/08/2003 DATE OF JUDGMENT:
09/11/2003LEGAL REPRESENTATIVES: RESPONDENT
APPLICANT
Mr J J Webster SC with Ms H Irish (Barrister)
SOLICITORS
Kearns & Garside
Mr J B Maston (Barrister)
SOLICITORS
Crown Solicitors
JUDGMENT:
IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES
30002 of 2001
11 September 2003Talbot J
- Applicant
- Respondent
Introduction
1 The applicant was the owner of land known as lot 13 and lot 16 in DP 867019 in the City of Shellharbour, Parish of Terragong, County of Camden (“the subject land”), which was formerly part of land known as lot 12 in DP 3709 (“the applicant’s land”).
2 On 24 November 2000 by notification in the New South Wales Government Gazette No. 2 the respondent, the Roads and Traffic Authority of New South Wales (“the RTA”), acquired the subject land for the purposes of roadworks associated with re-alignment of the Princes Highway.
3 The Illawarra Land Market Study prepared for the Land Commission of New South Wales by Dr Richard Cardew in 1981 (“the Cardew report”) included the applicant’s land within an area identified as Area 11. The characteristics of the land included within Area 11 were identified by Dr Cardew as follows:-
Area 11 is a very attractive development proposition offering magnificent views and settings, with most probably moderate development costs…Services may be extended to the Area after completion of most of Project 84 indicating possible release of this Area in the mid-1980’s.
4 The 1981 Illawarra Urban Development Program (“IUDP”) generally adopted the urban release areas identified by Dr Cardew.
5 The subject land was zoned Rural 1(b) in Shellharbour Local Environmental Plan No. 16 gazetted 30 September 1983.
6 In January 1986 Nexus Environmental Studies Pty Limited published a draft Local Environmental Study for Area 11 (“the draft LES”). The subject land was identified as an area suitable for urban residential development. The draft LES was exhibited between 7 February 1986 and 7 March 1986. The re-alignment of the highway was foreshadowed in the draft LES. The final version of the Nexus LES in July 1986 confirmed that the subject land was included in the areas suitable for urban residential development.
7 Draft Local Environmental Plan No. 24 (“the draft LEP”) was placed on public exhibition from 1 October 1986 to 22 October 1986. The proposed re-alignment of the Princes Highway affecting the subject land was identified and those parts of the applicant’s land required for the construction of the highway and associated link roads were re-zoned from Rural 1(b) to Arterial Roads Reservation 9(b).
8 Parts of Area 11 have been progressively re-zoned Residential between 1986 and 1997.
9 The first stages of land at Shell Cove, owned by Shellharbour City Council (“the council”), to the north east of the subject land were re-zoned for urban development in 1986 and land to the east of the subject land was re-zoned in 1997. The area immediately to the north of the subject land, owned by Landcom, was re-zoned for urban development in 1989 and 1994.
10 Pursuant to Shellharbour Local Environmental Plan 2000 gazetted 2 June 2000 the subject land was in zone 9(b) – Arterial Road Reservation. The residue of the applicant’s land was re-zoned from Rural 1(b) to Rural 1(a).
11 By the date of acquisition on 24 November 2000 all of the lands within Area 11 situated east of the South Coast railway line had been re-zoned Residential with the exception of the subject land and land immediately adjoining that land between Shellharbour Road and the railway line.
12 It is the applicant’s case that the effect of the RTA’s proposal for highway re-alignment led to a deferral of the consideration for re-zoning of the lands held by the applicant. Alternatively, if re-zoning had not occurred by the date of acquisition then the land had a potential for re-zoning as Urban Residential within a three to five year timeframe.
13 The respondent recognises that the Arterial Roads zoning in respect of the subject land must be set aside for the purposes of assessing compensation. However, the respondent submits that the logical extension of the area for urban development was in a southerly direction from the existing Shellharbour settlement away from the applicant’s land. In support of the respondent’s case, Mr Maston argues that Shellharbour Road became the western extremity line for urban development and that the evidence shows that it was always expected that demand for land release for residential purposes would be satisfied by the release of land at Albion Park, Shell Cove and the Lake View estate developed by Landcom. Furthermore, there was a recognised visual significance of the land west of the north/south ridge and Shellharbour Road. Accordingly, Mr Maston says that the applicant has not discharged the onus he bears to provide evidence that the subject land would have been re-zoned for residential purposes or that there was some chance that the rural zoning would be lifted in the ascertainable future (The Crown v Murphy (1990) 64 ALJR 593).
- The relevant underlying zoning and potential use of the applicant’s land
14 The Court has heard evidence from Alf Lester, a Town Planner retained by the applicant. It is his opinion that the RTA proposal for highway re-alignment and link roads led to a deferment of the re-zoning of the applicant’s land as part of the process of re-zoning consistent with the Nexus LES and the draft LEP. Accordingly, in his view, if the RTA proposals to re-align the Princes Highway and Shellharbour Road were to be disregarded the subject land would have already been re-zoned Residential 2(e) prior to the compulsory acquisition. These opinions are formulated more as a consequence of perusing the documentary history and facts relating to the development of urban land contiguous with the subject land as a consequence of the sequential re-zoning in 1986, 1994 and 1997, rather than any specific expertise in town planning which the Court would not otherwise possess. It is for the Court itself to have regard to the development and zoning history and form an opinion whether the land would have been re-zoned for residential purposes at the date of acquisition if it had not been for the existence of the road proposal.
15 Mr Maston refers the Court to a documentary history from which he says it may be inferred that, on the balance of probabilities, re-zoning would not have occurred up to the date of acquisition.
16 In a letter addressed to Mr and Mrs Dwzonnik on 16 June 1998, written in response to submissions made in relation to the council’s Draft Rural Strategy, the council was quick to point out that although the subject land had been identified in the IUDP as being potentially suitable for urban development, this status did not and does not guarantee urban re-zoning of any land. The lands at Shell Cove, Lake View estate and Albion Park were specifically identified as satisfying adequate stocks of urban land into the next 10 – 16 years. Furthermore, the subject land, being agricultural land and highly visible within the Dunmore Visual Catchment, is considered to have characteristics similar to rural land to the west and south west rather than being similar to the land that has been released for residential development to the north east. The council nevertheless suggests in its letter that if a proposal for the re-alignment for Shellharbour Road is constructed it would seem logical to reconsider the limits of residential development at that time, at least in respect of part of the applicant’s land.
17 The Cardew report recognised the prospect of the release of land for development as an extension of Albion Park, concurrently with the release of Area 11, “but after completion of sufficient of Project 84 to make economic the extension of water and sewer”. The council made it clear at the time of publication of the Cardew report that no decisions had been made that would indicate the land under study would in fact be developed for urban purposes and that no decisions would be made until after considerable investigation had been carried out. The Nexus LES in respect of Area 11 made it clear that the release rates for land would be reviewed annually to ensure sufficient supply of home sites.
18 In March 1986 the Deputy Town Planner reported to the council that the projected annual release from Area 11 did not demand the development of the total study area at that time and that generally a lead up time of up to five years would be experienced between the implementation of re-zoning proposals and the physical development of allotments. Accordingly, the planner reported that a staged release of Area 11 would seem logical. It was noted that the Nexus LES foreshadowed that lot production from Area 11 should begin by 1998. The Deputy Town Planner recommended that the council proceed with the local environmental planning making process for that part of Area 11 included within the Illawarra Boatharbour proposal and to defer the residue at that time pending receipt of detailed submissions. Having noted that the proposed re-alignment of the Princes Highway/Shellharbour Road by the Department of Main Roads (“the Department”) he suggested that consideration of land directly affected by that proposal should also be deferred. Mr Maston points out that although there is reference to the impediment of the re-alignment proposal nevertheless it was being recommended that land outside the Illawarra Boatharbour proposal be deferred for the time being. The council resolved to proceed with the local environmental planning making process for that part of Area 11 east of the subject land. The recommendation generally for deferral of the residue was accepted and specifically, so far as the subject land was concerned, pending the determination of the proposal by the Department.
19 Having regard to the rate of take-up of residential lots in the areas immediately south of Shellharbour and adjacent to Albion Park the Court cannot be sure that the council would have moved to re-zone the applicant’s land at the date of acquisition. The degree to which the land is regarded to be of visual significance appears to be dictated to a large extent by its proximity to the improved Princes Highway. The applicant’s land has always been recognised as having some future residential potential by the various reports and studies undertaken, commencing with the Cardew report in 1981. It is apparent from a close perusal of the documents that the potential for residential development has been seriously impeded and deferred by the highway proposal. The land is in a logical geographical location to connect with the residential development which has occurred and continues to its north and east. Although the Court is not prepared to find that the underlying zoning at the date of acquisition would have been such as to permit residential development, nevertheless, the Court is satisfied that a prospective purchaser at that date would have held a reasonable expectation that the land would be re-zoned for residential purposes within approximately the next five years but for the proposal for the Princes Highway.
20 The valuers have agreed that in determining a potential lot value on the basis that the land would be zoned rural at the date of acquisition, but with future residential subdivision potential subject to re-zoning occurring, would be $6,887 per lot.
The lot yield
21 Dr Cardew determined a probable lot yield of 10 to 11 lots per hectare over the whole of Area 11. Although the respondent submits that a hypothetical purchaser would not have undertaken a close study of the subject land to determine an exact lot yield nevertheless both valuers have proceeded on the basis that there would be an expectation that a certain number of lots would be yielded from the land. The advice from the applicant’s witnesses is that the lot yield for the applicant’s land would be have been 338 lots at the date of acquisition on the basis that there was future residential subdivision potential whereas the respondent’s witnesses advise that the yield would be only 234 lots. There is no real dispute that the land can be serviced. The respondent’s witnesses say that their more conservative view of the lot yield is based upon the topography of the land which incorporates a number of steep slopes and gullies. These physical features were observed by the Court on the view. There is some further support for the respondent’s witnesses’ opinions to be obtained from a close study of the topographical maps and a comparison with the topography of the Shell Cove development across to the east. It is the Court’s opinion that a prospective purchaser would have taken a conservative approach to the assessment of the lot yield and, on the balance of probabilities, would have accepted a potential of 10 lots per hectare.
22 The same consideration flows through to the consideration of the lot yield potential after the acquisition had taken place if the Court ultimately accepts that there is a remaining residential potential.
The potential for residential development after acquisition
23 Mr Webster submits, on behalf of the applicant, that based upon the factual background the prudent hypothetical purchaser would have accepted advice that the subject land would be re-zoned for residential purposes in three to five years following the acquisition. The Court agrees that the potential for this to occur has not been lost and indeed may well have been enhanced by the likely prospect of the closure of Shellharbour Road, which could create a logical connection to the land already developed for residential purposes to the east.
24 The Court accepts that there is a real potential for the applicant’s land to be developed for residential purposes after acquisition. There is a prospect, although not confidently held on the basis of the evidence as it presently stands, that a railway station may be sited adjacent to the applicant’s land. Nevertheless, it is reasonable to expect that the construction and completion of the highway works could have the effect of deferring the potential for residential development for several years. This is a factor the Court proposes to take into account.
25 The valuers have agreed that a purchaser would calculate the purchase price of a triangular area, comprising two hectares situated on the north east corner of the applicant’s land which has been separated from the residue of the applicant’s land by the new Link Road from the highway (“the triangular area”), on the basis of $6,887 per lot yielded in that area and on the basis $5,691 per lot over the residue of the applicant’s land comprising 21.75 hectares (“the residue”). Once again, the Court accepts the lower potential for lot yield estimated by the respondent’s witnesses, namely a yield of 18 lots from the triangular area and 196 lots from the residue.
Conclusion
26 The consequence of the Court’s finding is that before the acquisition the value of the applicant’s land would have been $1,611,558 based upon a potential lot yield in three to five years time of 234 lots at $6,887 per lot.
27 After acquisition the triangular area would have been expected to yield 18 lots at $6,887 per lot whereas the residue would have been expected to yield 196 lots at a discounted value of $5,691. The value of the applicant’s land after acquisition, therefore, is determined at $1,239,402. The difference between the before and after values is $372,156, which becomes the amount of compensation payable for the reduced value of the subject land.
28 In addition, the applicant is entitled to compensation for disturbance. This amount has been agreed at $5,000.
29 The amount of compensation payable to the applicant pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 is assessed at $377,156.
30 The question of costs has not been argued and, accordingly, costs are reserved.
31 The exhibits may be returned.
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