J L and M M Muir Properties Pty Ltd v Roads and Traffic Authority of NSW

[2004] NSWLEC 621

Set aside by Appeal: 139LGERA 621
[2005] NSWCA 460

Land and Environment Court

of New South Wales

CITATION:	J L and M M Muir Properties Pty Ltd v Roads and Traffic Authority of NSW [2004] NSWLEC 621
PARTIES:	APPLICANT: J L and M M Muir Properties Pty Ltd RESPONDENT: Roads and Traffic Authority of NSW
FILE NUMBER(S):	30222 of 2003
CORAM:	Bignold J
KEY ISSUES:	Compulsory Acquisition of Land :- Compensation for loss of road frontage land-injurious affection-underlying zoning of acquired land-proposed bus transitway with no access to adjoining land.
LEGISLATION CITED:	Land Acquisition (Just Terms Compensation) Act 1991 Roads Act 1993
CASES CITED:	Crown v Murphy (1990) 71 LGRA1; Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196; Marshall v Director General Department of Transport (2001) 205 CLR 603; Pointe Gourde Quarrying and Transport v Sub-Intendent of Crown Lands (1947) AC 565
DATES OF HEARING:	10-13/11/2003, 10-14/05/2004
DATE OF JUDGMENT:	11/09/2004
LEGAL REPRESENTATIVES:	APPLICANT: Mr J Webster SC with Ms M Carpenter, Barrister SOLICITORS Abbott Tout RESPONDENT: Mr R Lancaster, Barrister SOLICITORS Clayton Utz

JUDGMENT:

43

— —

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BIGNOLD J

9 November 2004

30222 of 2003 J L AND M M MUIR PROPERTIES PTY LIMITED V ROADS AND TRAFFIC AUTHORITY OF NSW

JUDGMENT

:

1 This is an objection pursuant to the Land Acquisition (Just Terms Compensation) Act 1997, s 66 against the amount of compensation offered by the Respondent in respect of its compulsory acquisition of a discontinuous strip of road frontage for a combined distance of some 600 metres from various portions of lands owned by the Applicant fronting Windsor Road at Kellyville situate on the eastern side of Windsor Road commencing at a point a short distance (a few hundred metres) to the north of the intersection of Windsor Road and Old Windsor Road.

2 According to the Compensation Notice which was published in Government Gazette No 255 of 13 December 2002, the Applicant’s lands that were acquired “for the purposes of the Roads Act 1993” were described as follows:

(i) lot 2 in Deposited Plan 1043755 (comprising an area of 1.763 hectares separated by a linear distance of some 120 m into two distinct sections (one situate to the north of Caddies Creek and the other situate to the south of the Creek) having respective areas of 1.598 hectares and 1,653 m2; and
(ii) lots 18, 19, 26 and 27 in Deposited Plan 1031575 (comprising respective areas of 324 m2, 316 m2, 268 m2 and 268 m2).

3 Both those Deposited Plans were prepared for and on behalf of the Respondent and were registered in the period up to 16 months prior to the date of compulsory acquisition. A copy of each of the Deposited Plans referred to in the Compulsory Acquisition Notice is annexed hereto and marked with the letters “A” and “B” respectively.

4 The acquired lands referred to in Deposited Plan 1031575 immediately adjoin the southern section of acquired land referred to in Deposited Plan 1043755. Lots 18 and 19 are a continuation (albeit in tapered fashion) of the strip of acquired land in Deposited Plan 1043755.

5 Lots 26 and 27 which are situate directly at the rear of lots 18 and 19 which latter lots form the northern end of a group of eight lots (all similarly shaped and sized) created by Deposited Plan 1031575 which group of lots was apparently intended to be acquired by the Respondent for the purpose of providing a service road running parallel to Windsor Road and commencing at the eastern arm of that road at its intersection of with Old Windsor Road designed to provide alternative access to the commercially zoned lands which front Windsor Road, as shown on the annexed copy of an extract of the zoning map for the Baulkham Hills Local Environmental Plan 1991 (the LEP) being annexure “C” hereto. The majority of that commercially zoned land (comprising an area of some 4 hectares) is owned by the Applicant, with various others owning the remainder of the commercially zoned land.

6 This commercially zoned land owned by the Applicant abuts the southern section of the acquired land contained in lot 2 Deposited Plan 1043755.

7 The Applicant also owns all of the land (comprising 4.8 hectares) adjoining the northern section of the acquired land contained in lot 2 Deposited Plan 1043755 which is zoned Residential 2(a4) by the LEP. That land is also shown on the extract of the zoning map (Annexure C).

8 The Valuer-General’s determination of the amount of compensation for all of the acquired lands (with a combined area of some 1.9 hectares) was $4,875,000 (comprising market value of $4,850,000 and disturbance of $25,000).

9 In the Respondent’s letter dated 10 January 2003 (Exhibit 5) to the Applicant’s Solicitor, communicating the Valuer—General’s determination of compensation, the documentation that was submitted to the Applicant included a Deed of Release and Indemnity incorporating the following provision:

1. The Releasor:-

(d) acknowledges that the compensation is subject to the Releasor entering into a Restriction as to User pursuant to Section 88(E) of the Conveyancing Act 1919 relating to the denial of access from the residue of the property owned by the Releasor to the land described in the Schedule and that the Releasor has signed a Restriction as to User which the Releasor acknowledges is to be lodged on the title of the residue of the Releasor’s land.

10 The Deed of Release and Indemnity included in the Schedule the following terms of the required restriction on the use of land:

TERMS OF RESTRICTION ON THE USE OF LAND
No means of access shall be constructed or be allowed to be constructed to or from the land the subject of the restriction onto the proposed transitway (partly comprising Lot 2 Deposited Plan (1043755) adjoining the land the subject of this restriction and no part or parts of the said land shall be used as a means of access to or from the proposed transitway without the written consent of the prescribed authority (which consent may be revoked at any time at its discretion and without compensation). The restrictions contained shall cease to apply if the proposed transitway after having been declared a transitway under the Roads Act 1993, thereafter ceases to be such a transitway.

11 The Deed of Release and Indemnity that was submitted to the Applicant (which the Applicant has never executed for reasons that will soon become apparent) was referenced to the Just Terms Act, s 44 which is in the following terms:

Acceptance of offer of compensation
(1) A person entitled to compensation under this Part may accept the amount of compensation offered by the authority of the State in the compensation notice.
(2) Payment of the compensation is to be made within 28 days of the receipt by the authority of the State of a claim for compensation, deed of release and indemnity (duly completed) and any relevant documents of title.

12 The reference in the “Restriction on Use of land” to the declaration of the proposed transitway under the Roads Act 1993 is a reference to action that may be taken pursuant to s 52A(1) of that Act which is in the following terms:

52A Transitways
(1) The Minister may, by order published in the Gazette, declare to be a transitway:
(a) any public road, or
(b) any road that is owned by the RTA and that is designed to facilitate the movement of vehicular traffic, or
(c) any road proposed to be constructed on land owned, leased or controlled, or to be owned, leased or controlled, by the RTA.

13 Where such an order is made, s 67 provides as follows:

67 Restriction of access to freeways, transitways etc
(1) An order declaring a road to be a freeway, transitway or controlled access road may restrict access to or from the freeway, transitway or controlled access road.
(2) In that event, the order:
(a) must specify the points along the freeway, transitway or controlled access road at which access may be gained to or from other public roads, and
(b) must, in addition to being published in the Gazette, be published in one or more newspapers circulating in the locality in which the freeway, transitway or controlled access road is located.

14 It has not been suggested in this case that the requirement that the Applicant enter into the stipulated s 88E restriction is supported by the Just Terms Act, s 44. As will presently be seen, the Roads Act itself provides for the payment of compensation “if access across the boundary between any land and a public road is restricted or denied as a result of the road becoming a….transitway”: vide ss 68, 69 and 70.

15 The major component of the Applicant’s claim to compensation in the present case is founded upon the alleged decrease in value of the Applicant’s commercially zoned retained lands (no such claim is made in respect of the residentially zoned retained lands) caused by the denial of access between that land and the proposed transitway as a legal (and possibly physical) consequence of the acquired lands being developed as a transitway under the Roads Act. This aspect of the claim is founded upon the well-established concept of injurious affection now statutorily provided for in the Just Terms Act, s 55(f). In adjudicating upon that claim, (which is entirely disputed by the Respondent) it will be necessary to examine the relationship, if any, between the compensation provided for, by way of injurious affection under the Just Terms Act and the compensation provided for in the Roads Act 1993, ss 68 and 69.

16 According to its Further Amended Points of Claim (filed in the course of the hearing) the Applicant claims a total amount of compensation in the sum of $11,449,650 plus disturbance (yet to be determined—but likely to be agreed between the parties). That amount is made up as follows:

(i) Market value of northern section of acquired lands (based upon an assumed residential zoning)	$3,995,000.00
(ii) Market value of southern section of acquired lands (based upon the actual assumed business zoning)	$990,850.00

(iii) Injurious affection of Applicant’s residue lands	$6,463,800.00
Total Compensation claimed	$11,449,50.00

17 According to the its Further Amended Points of Defence, the Respondent’s response to the Applicant’s claim is that the amount of compensation to be awarded should be $461,000 in respect of the market value of all of the compulsorily acquired land based upon an assumed zoning of Rural 1(a). It is at once to be noted that this amount is considerably less than the amount of compensation that had been determined by the Valuer-General and that had been offered by the Respondent to the Applicant. (That determination had been undertaken on behalf of the Valuer-General by Mr Kent Wood, Consultant Valuer, who gave valuation evidence for the Respondent in these proceedings.) That valuation had been based upon the same assumed (or actual) zonings of the compulsorily acquired land as have been adopted in these proceedings by the Applicant’s consultant valuers, Mr Terry Large and Mr F Bradstreet. (The latter valued the northern section of the acquired land and Mr Large valued the southern section of the acquired land and the injurious affectation claimed in respect of the Applicant’s commercially zoned residue lands.)

18 The Respondent’s Further Amended Points of Defence proffered an alternative amount of compensation in the sum of $4,985,850 (virtually identical with the Respondent’s original offer) if the Court were to adopt as the underlying zonings of the compulsorily acquired lands the zonings that had been originally adopted by Mr Wood when undertaking the statutory valuation on behalf of the Valuer-General (and which had been consistently adopted by Mr Large and Mr Bradstreet on behalf of the Applicant).

19 In response to the Applicant’s claim to compensation for injurious affection in the sum of $6,463,800, the Respondent’s principal case is to the effect that no compensation is payable because the compulsory acquisition has not caused any injurious affectation, as alleged, to the Applicant’s residue lands but that if the Court were to hold that injurious affectation has been relevantly caused, the amount of compensation payable on that account is $2 million (compared with the claimed amount of $6.46 million).

20 At the conclusion of the hearing, the following three issues remained in dispute and require adjudication in fulfilment of the Court’s statutory function to determine the amount of compensation payable under the Just Terms Act:—

(i) what was the public purpose for which the compulsorily acquired lands were acquired?
(ii) should the market value of the compulsorily acquired lands be determined on the basis of an assumed underlying zoning of (a) Rural 1(a) or (b) a Residential 2(a4) zoning in respect of the northern section and a Special Business 3(b) zoning in respect of the southern section?
(iii) has there been a decrease in the value of the retained commercially zoned land of the Applicant which adjoins or is severed from the southern section of the compulsorily acquired lands “ by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired ” (vide the Just Terms Act s 55(f) )?

21 Since each of these issues is clearly defined by the amended pleadings that I have earlier noted, it may be helpful to narrate the relevant pleadings.

22 Issue (i) (the relevant public purpose) emerges from the following pleadings—

Par 4 of Applicant’s Further Amended Points of Claim
The Applicant says that the acquisition was for the purpose of the provision of a transitway to which access will be denied.
Par 4 of the Respondent’s Further Amended Points of Defence
In answer to paragraph 4 of the Further Amended Points of Claim, the Respondent says:
(a) the subject land was acquired for the purposes of road widening and for the purposes of a transitway;
(b) access over the boundary of the residue of the Original Holding to the proposed transitway is not to be permitted;
(c) the denial of access referred to in paragraph 4(b) above is:
(i) no different from the general policy of no access adopted by the Respondent in relation to arterial roads; and
(ii) confirmed by the planning controls which applied to the subject land at the date of the acquisition; and
(d) otherwise denies the allegations contained in that paragraph.

23 Issue (ii) (the relevant zoning assumption) emerges from the following pleadings—

Par 6 of Applicant’s Further Amended Points of Claim
The Applicant claims the proper assessment of compensation as follows:
Market Value
(i) Part Lot 2 (Residential ) (and/or Rural 1(a)) $3,995,000

(ii) Part Lot 2 DP 1043755 }
Lots 18, 19, 26 & 29 } $ 990,850
DP 1031575 }
(as zoned 3(b)) }


Par 5 of the Respondent’s Further Amended Points of Defence
In further answer to the Further Amended Points of Claim generally, the Respondent says that:

(a) the underlying zoning of the land acquired by the Respondent (the Acquired Land) is Rural 1(a) and that compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (the Acquisition Act) should be assessed on that basis. Accordingly, the Applicant is entitled to compensation in the amount of $461,000 plus an amount in respect of loss attributable to disturbance;

(b) in the alternative to (a) above, the Respondent says that, if the underlying zoning of the Acquired Land is to be determined by reference to the zoning, as at the date of resumption, of land adjoining the Acquired Land, the proper assessment of compensation under the Acquisition Act is:

(i) market value $4,985,850

(ii) disturbance To be advised

TOTAL $4,985,850 plus disturbance costs

24 Issue (iii) (the injurious affectation claim) emerges from the following pleading:

Pars 4, 5, 6 (in part) of Applicant’s Further Amended Points of Claim
The Applicant says that the acquisition was for the purpose of the provision of a transitway to which access will be denied.

The Applicant says that the affectation upon the lands comprising the Residue….has been diminished in value by reason of the acquisition and the loss of direct access to Windsor Road.

The Applicant claims the proper assessment of compensation:


(iii) Injurious affectation
Part Lot 1 = 61770m2 @ $100 }
Part Lot 37 = 1430m2 @ $100 } $6,463,800
Part Lot 38 = 1438m2 @ $100 }
Pars 6, 7 and 8 of the Respondent’s Further Amended Points of Defence
6. The Respondent denies the allegations contained in paragraph 5 of the Further Amended Points of Claim.
7. In further answer to the allegations in paragraph 5 of the Further Amended Points of Claim, the Respondent says that the Applicant has no proper claim based on the alleged injurious affection of the residue of the Original Holding because:
(a) the Applicant currently retains all rights of access to the residue of the Original Holding that it enjoyed in relation to the Original Holding prior to the resumption referred to in paragraph 2 of the Amended Points of Claim;
(b) the Respondent has taken steps to ensure that access, equivalent to the access enjoyed by the Applicant prior to the acquisition and servicing the existing uses of the residue of the Original Holding, will be able to be made available to the Applicant to the residue of the Original Holding during the period of construction of the proposed public works and after completion of construction;
Particulars

(a) Letter from RTA to Drummond Parmenter Pty Limited dated 22 November 2002

(b) Letter from RTA to G Nash dated 3 December 2002.
(c) in the event of any development of the residue of the Original Holding, the Applicant would be required to provide adequate access to service such a development; and
(d) any constraints on access to the residue of the Original Holding were unaffected by the acquisition of the Acquired Land in that the constraints were the same both prior to and after the date of the acquisition.
8. In the alternative to paragraph 7 above, if the residue of the Original Holding is injuriously affected by reason of the acquisition (which is denied), the proper amount of compensation:
(a) is to be calculated, having regard only to those portions of the residue of the Original Holding that were zoned 3(b) as at the date of the acquisition – an area of 4 hectares; and
(b) is to be assessed at the rate of $50 per square metre over those portions referred to in paragraph 8(a) above; and
(c) should be assessed as being $2,000,000.

25 It is necessary to separately consider each of these disputed issues.

26 As noted earlier, the Notice of Compulsory Acquisition recited that the public purpose for the acquisition was “for the purposes of the Roads Act 1993”. The Roads Act 1993, s 177(1) empowers the Respondent to “acquire land for any of the purposes of the Act”. There are a multitude of purposes specified or identified in the Roads Act.

27 It is clear from the documentary evidence in the present case that a part of the land acquired was acquired for the purpose of widening Windsor Road. This part accounts for some 7,865 m2 of the total area of acquired land (being some 1.9 hectares) being principally located in the northern section which had been identified in 1960 for road widening by realignment in accordance with the Main Roads Act 1924.

28 The remaining part (a little more than 1 hectare) was acquired for the purpose of providing alongside the southbound carriageway of Windsor Road a Transitway. The concept of “transitway” was introduced into the Roads Act by the Roads Amendment (Transitways) Act 1999 (Act No 29). The term had also been referred to as “Rapid Bus Only Transitway” in the 1998 publication issued by the Minister for Transport “Action for Transport 2010—An integrated transport plan for Sydney”.

29 A plan prepared by the Respondent in April 2001 shows (anticipatorily) the acquired lands and the location of the proposed transitway abutting the Applicant’s residue lands. (A copy of this plan is annexed hereto and marked “D”).

30 At the date of compulsory acquisition (13 December 2002), the road widening and roadworks in Windsor Road fronting the acquired lands had been virtually completed. These works included a signalised intersection of Windsor and Old Windsor Roads with the provision of 4 lanes of traffic separated by a median strip. (The existence of the median prevents northbound traffic directly accessing the Applicant’s retained lands). These road improvements had been carried out within the existing road reserve thereby rendering the majority of the acquired lands available for the proposed bus only transitway.

31 Clearly, both the road widening and improvements in Windsor Road and the provision of land abutting the Applicant’s residue lands for the proposed bus transitway relevantly fall within the compass of the stated purpose of the acquisition of the acquired lands, namely “for the purposes of the Roads Act 1993” cf Marshall v Director General Department of Transport (2001) 205 CLR 603 at 616/617.

32 However, it is important to note at this stage that although the Roads Act 1993 includes within its definition of “classified road” a “main road” (being the current status of Windsor Road) and a “transitway” it also makes relevant distinctions between these categories of road.

33 Most importantly for the purposes of the present case, is the distinction made concerning access to and from roads so classified, for although the Roads Act, s 6(1) declares the entitlement, “as of right”, of the owner of land “adjoining a public road” to “access (whether on foot, in a vehicle or otherwise) across the boundary between the land and a public road” such an entitlement is qualified by subsection (2) which provides “…..but those rights are subject to such restrictions as are imposed by or under this or an other Act or law”.

34 Relevantly in this respect, the statutory and common law rights of a frontager are restricted by the Roads Act, ss 67 and 70. Section 67 has already been quoted. Section 70 (an allied provision) is in the following terms:

70 Construction of access to freeways, transitways etc prohibited

A person:

(a) must not construct any means of access to or from a freeway, transitway or controlled access road otherwise than in accordance with the consent of the RTA, and

(b) must not enter or leave a freeway, transitway or controlled access road except by a means of access or a route provided for that purpose.

Maximum penalty: 10 penalty units.

35 Thus, it can be seen that the restrictions on the statutory and common law rights of a frontager to access a public road, operating by virtue of the combined effect of the Roads Act ss 67 and 70, do not apply in the case of a main road (such as Windsor Road) but do apply if that road (or any part of it) were declared to be a transitway.

36 It is clear from the documentary evidence and the pleadings I have earlier recited that the Respondent in notifying the Applicant that there would be no access permitted between its residue lands and the proposed transitway was anticipating appropriate action being taken pursuant to s 67 to deny access between the transitway and the Applicant’s retained lands, whenever the transitway came into existence. (There is some doubt in the evidence as to precisely when this may occur and it has not yet occurred nearly two years after the date of compulsory acquisition).

37 In the event of access being relevantly denied or restricted, the Roads Act, ss 68 and 69 combine to provide a statutory entitlement to compensation. For the moment, these provisions need not be noted. However, they will need to be considered when considering the Applicant’s claim to compensation for injurious affectation to its commercially zoned residue lands.

38 For all the foregoing reasons, I find that the particular purposes in terms of the Roads Act 1993 for which the acquired lands were compulsorily acquired involve (i) the widening and upgrade of Windsor Road (a main road); and (ii) the provision of a transitway. The latter purpose involves the majority of the acquired land and will involve those parts of the acquired land that abut the Applicant’s retained lands. The transitway purpose involves the denial of access between the transitway and the Applicant’s retained lands.

39 At the date of compulsory acquisition, the Applicant’s lands (both the acquired and retained lands) were subject to the provisions of the LEP.

40 That LEP had originally come into force on 1 March 1991 being essentially a consolidating compilation of previously operating environmental planning instruments (including the Baulkham Hills Planning Scheme (1964) and Interim Development Order No 118 (1977)—in terms of which all of the lands situate in the suburb of Kellyville had been zoned non-urban or rural). More importantly for present purposes was the existence of Sydney Regional Environmental Plan No 19—Rouse Hill Development Area (SREP 19) which had come into force 30 June 1989 applying to the suburbs of Parklea, Marsden Park, Quakers Hill, Schofields, Riverstone and Vineyard situate to the west of Windsor Road and Old Windsor Road and situate in the City of Blacktown and the suburbs of Kellyville, Rouse Hill and Box Hill situate on the eastern side of these roads and situate in the Shire of Baulkham Hills, which combined areas were collectively known as the Rouse Hill Development Area (RHDA) comprising a total area of some 9,400 hectares with a capacity to accommodate a large population to be housed in some 70,000 new dwellings.

41 The stated aims of SREP 19 included the following:

to accommodate part of the long-term growth of the Sydney Region by providing a mechanism for identifying land suitable for urban purposes and by providing for the orderly and economic development of that land

42 On 13 June 1991 Amendment No 1 was made, amending the LEP rezoning for urban purposes as contemplated by SREP 19, a large area (situate at Kellyville and Rouse Hill being generally north of the eastern arm of Windsor Road, west of Poole Road extending up to Mile End Road) that had been previously zoned non-urban/rural. The majority of the rezoned lands were rezoned for residential development. (Similar re-zonings of RHDA lands situate in the City of Blacktown also occurred about this time.)

43 These re-zonings included the Applicant’s lands, including those parcels from which the frontage strips along Windsor Road were compulsorily acquired. (The Applicant had originally acquired in 1964 some 56 hectares of land, including lands having Windsor Road frontage. In 1993 it transferred some 19 hectares which had been zoned Special Uses—Trunk Drainage to Sydney Water and in 1999 it sold some 9 hectares of residentially zoned lands to the developer, Stocklands. Following the compulsory acquisition by the Respondent of the Windsor Road frontage strip, the Applicant’s residue or retained lands had a combined area of 14.86 hectares).

44 Amendment No 1 to the LEP re-zoned the Applicant’s lands as follows:

(i) some 6 hectares was zoned Special Business 3(b). This area includes the southern section of the Compulsorily acquired land, a portion of which was zoned Special Uses 5(b) (Existing and proposed roads); and
(ii) some 5 hectares fronting the northern section of the acquired land (in common with a large area situate to its north) had its zoning deferred by the Minister pursuant to s 70(4) of the Environmental Planning and Assessment Act 1979 ;
(iii) the northern section of the road frontage strip was zoned Special Uses 5(b) (Existing and proposed roads); and
(iv) some hinterland area (removed from the Windsor Road frontage) was zoned Special Uses 5(a) Trunk Drainage and some was zoned Residential.

45 When Amendment No 52 to the LEP came into force on 17 October 1997 it affected the Windsor Road frontage of Applicant’s land by virtually eliminating the Special Uses 5(b) zoning of the southern section of that land and by slightly widening the Special Uses 5(b) zoning of the northern section of that land. Additionally it rezoned to Open Space 6(a) (Existing and proposed recreation) an area of some 2 hectares of the Applicant’s commercially zoned 6 hectares (being the part most distant from the Windsor Road frontage).

46 Finally when Amendment No 97 to the LEP came into force on 7 December 2001, it affected the Applicant’s lands by further widening the Special Uses 5(b) zoning of the northern section of the Windsor Road frontage and by re-zoning the previously deferred land (comprising some 5 hectares) adjoining that Special Uses 5(b) zoned strip as Residential 2(a4) (in common with a larger area adjoining to the north). It also re-zoned to General Business 3(a) and Service Business 3(c) a large area of the previously deferred land which had been earmarked as the Mungerie Park Sub-Regional Centre.

47 At the date of compulsory acquisition, the LEP (reflecting the cumulative effects of Amendments 1, 52 and 97) applied to the Applicant’s relevant lands as follows:

(i) the northern section of the Windsor Road frontage of the acquired land (1.6 hectares) was zoned Special Uses 5(b) (Existing and Proposed Roads) and the adjoining land (some 5 hectares) was zoned Residential 2(a4); and
(ii) the southern section of the Windsor Road frontage of the acquired land, in common with the Applicant’s adjoining land (comprising some 4 hectares) was zoned Special Business 3(b).

48 The relevant zonings, at the date of compulsory acquisition, of the Applicant’s lands (including the compulsorily acquired lands) and the surrounding lands are shown on the extract of the LEP Zoning Map issued by the Baulkham Hills Council on 11 September 2002 which is annexed to Mr Large’s Valuation Report (Exhibit 23) a copy of which extract is annexed hereto and marked “C”.

49 It is in the light of the zonings of the Applicant’s lands by the LEP as relevantly in force at the date of compulsory acquisition that the market value of the compulsorily acquired lands is to be determined under the Just Terms Act as is the Applicant’s injurious affection claim in respect of its retained lands zoned Special Business 3(b).

50 However, the Just Terms Act, s 56 requires that the determination of the market value of the compulsorily acquired land “disregard any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired”: vide subsection (1) (a).

51 It is common ground between the parties that the Just Terms Act s 56(1)(a) requires the Special Uses – 5(b) zoning of the northern section of the acquired land to be disregarded because it reflects the public purpose for which the land was acquired: cf Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196 at 205 to 207.

52 However, the parties are in significant dispute as to what zoning assumption should be applied once effect is given to s 56(1)(a) by disregarding the Special Uses 5(b) zoning.

53 The Applicant’s expert Valuer and Town Planner each considers the appropriate assumed zoning to be Residential 2(a4) reflecting the zoning of the Applicant’s adjoining land. Opposing that view, the Respondent’s counterpart experts consider the appropriate zoning to be rural or non-urban reflecting the zoning of the adjoining land before 1991 when Amendment 1 was made to the LEP. More precisely, the Respondent’s Valuer, Mr Wood, adopts the opinion of the Respondent’s town planner Mr Rowan on this issue, having himself previously, when undertaking on behalf of the Valuer-General the statutory valuation of the Applicant’s claim adopted the same assumed zoning (Residential 2(a4) that has been adopted by the Applicant’s experts.

54 It is to be noted that it is almost conventional practice to adopt as the assumed zoning of a road frontage strip of acquired land the zoning of the adjoining land in circumstances where it is necessary and appropriate (conformably to s 56(1)(a) or the “San Sebastian” principle) to disregard the actual zoning of that strip because that zoning reflects the impact on value of the public purpose for which the land was acquired (s 56(1)(a)) or because that zoning is properly concluded to be but “a step in the resumption process” (San Sebastian).

55 Mr Rowan’s contrary opinion is very comprehensively argued and articulated in his detailed report (Exhibit C). Mr Rowan had been retained to provide expert opinion on matters relevant to the Applicant’s considerable injurious affection claim based upon the denial of access between his retained commercially zoned land and the acquired land once it was developed for the public purpose of a bus only transitway.

56 It was in the context and outworking of that brief that Mr Rowan came to consider the “underlying zoning” of the compulsorily acquired lands. This appears in the following passages from the Executive Summary to Mr Rowan’s Report:

2.21
……
……
……
In order to accept the Applicant’s argument of injurious affection, it would need to be established that the upgrade in zoning of residue Muir land was wholly unconnected with the upgrade of Windsor Road and was somehow inevitable, notwithstanding the fact that the land had been zoned 1(a) Rural for well over 30 years. In my opinion, this argument is untenable from a planning perspective. It is my opinion that the upgrade of Windsor Road is not only intimately connected with the upgraded zoning of the residue Muir land, it is the cause of the upgraded zoning of the residue Muir land.

2.22 The requirement of the residue Muir land to have to rely upon the development of land to the north and south respectively to achieve access to the arterial road network is a consideration that has been implicit in the zoning of land along the road corridor. The proposed transitway will not diminish the range of options that have been available to this residue Muir land since its original up-zoning to land use zone of a higher order than its former Rural 1(a) zone, such that injurious affectation to the future redevelopment of the land cannot be asserted.

57 I do not think it necessary to set forth the extensive line of reasoning employed by Mr Rowan in support of his ultimate opinion that “the underlying zone of the land acquired for road widening and the transitway is, in my opinion, Rural 1(a)”: vide par 7.49.

58 The fundamental premise in his reasoning is that without the identification and provision of the public transport corridor along Windsor Road and Old Windsor Road “it is unlikely that the residue Muir land would have been “up-zoned”. (R)ather without the ability to provide a public transport corridor along Windsor Road, there is also a strong likelihood that Rouse Hill may not have been selected as a release area” (vide par 7.35).

59 Mr Rowan recognises in par 7.32 of his Report the difficulty for his thesis raised by the fact that the rezoning of the Applicant’s commercially zoned land occurred in 1991 (by virtue of the coming into force of Amendment 1 to the LEP) well before the proposal for a transitway along Windsor Road was ever contemplated. Though plausibly argued, Mr Rowan’s retrospective reasoning in pars 7.32 and 7.33 of his Report really amount to no more than “conjecture” (to adopt his own words).

60 In truth Mr Rowan’s studious sifting of a mass of documentary planning materials spanning nearly 20 years ultimately produces, with the benefit of hindsight, a reinterpretation of the relevant events which in my respectful opinion, unwittingly distorts many of those events. In particular his retrospective reinterpretation accords far too much causative effect to the existence of the Windsor Road/Old Windsor Road public transport corridor (existing and proposed) on the various planning decisions leading to the planning and implementation of the Rouse Hill Development Area. In this respect his retrospective opinion proffers an ideological rationale for the relevant planning decisions creating the Rouse Hill Development Area which does not accord with planning policy and practice in terms of the Environmental Planning and Assessment Act 1979, either generally or with particular reference to the RHDA.

61 For all the foregoing reasons, I would reject Mr Rowan’s opinion concerning the underlying zoning of the compulsorily acquired lands.

62 It is to be noted that Mr Rowan’s opinion did not distinguish between the northern section of the acquired land (which was zoned Special Uses 5(b)) and the southern section of the acquired land which was zoned Special Business 3(b) being the same zoning as applies to the Applicant’s adjoining land.

63 In my judgment, neither s 56(1)(a) nor the San Sebastian principle requires the actual zoning (Business Special 3(b)) of the southern section of the compulsorily acquired land to be disregarded.

64 There is simply no basis in fact or in law to search for an underlying zoning of that part of the compulsorily acquired land.

65 The underlying or assumed zoning to be applied to the northern section of the acquired land is Residential 2(a4), being the zoning of the adjoining land.

66 This is the obvious, if not inevitable, choice given the prevailing zonings applying under the LEP at the date of compulsory acquisition. The adoption of that assumed zoning accords with the opinions of all of the other relevant experts (expert for Mr Rowan).

67 Accordingly, I would hold that the appropriate zoning assumptions to be made for the purpose of determining the market value of the compulsorily acquired lands are as follows:

(i) the northern section is to be valued on the basis of the assumed zoning of Residential 2(a4); and
(ii) the southern section is to be valued on the basis of the actual zoning of Special Business 3(b).

68 The parties’ respective valuers have reached agreement as to the market value of the compulsorily acquired land upon the basis that they are zoned (or assumed to be zoned) in the manner that I have held, namely:

(i) the market value of the northern section is $3,995,000 as agreed between the valuers Mr Bradstreet and Mr Wood ( Exhibit 8 ); and
(ii) the market value of the southern section is $990,850 as agreed between the valuers Mr Large and Mr Wood ( Exhibit 7 ).

69 I adopt these agreed values and accordingly determine that the market value of the compulsorily acquired land is $4,985,850.

70 The asserted foundation for the Applicant’s claim to compensation for injurious affection is the Just Terms Act, s 55(f) which formulates the concept of injurious affection as follows:

(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.

71 The Applicant’s claim is that there was, at the date of compulsory acquisition, a decrease in the value of “other land” (namely the commercially zoned land (including that portion which was rezoned in 1997 Open Space 6(a)) “which adjoins or is severed from the acquired land” (namely the southern section) “by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired” (namely, the bus only transitway in respect of which access between it and the Applicant’s adjoining land would be totally denied).

72 According to the pleadings that I have earlier recited, the Respondent admits that the bus only transitway was one of the public purposes for which the Applicant’s lands were compulsorily acquired and that there would be a denial of access between the Applicant’s retained land and the transitway. Nonetheless, the Respondent resists the Applicant’s claim but that resistance does not contest (nor in the light of the copious documentary evidence could it have reasonably contested) that the proposed transitway will involve a denial of access between the acquired land and the Applicant’s retained land. Rather, the Respondent’s resistance is principally founded upon its reliance upon the planning provisions of the LEP in existence on the date of compulsory acquisition that control development of lands fronting or adjoining “classified roads”. In this respect, the Respondent asserts that any planning constraints on road access in the development of the Applicant’s retained commercially zoned lands were the same immediately before and immediately after the compulsory acquisition of the Applicant’s lands and that situation was unaffected by the compulsory acquisition.

73 Before considering the grounds for the Respondent’s resistance of the Applicant’s injurious affection claim, it is desirable, if not necessary, to re-affirm the principle, established by the long-standing case law concerning compensation for injurious affection (see the article by Professor Todd “The Mystique of Injurious Affection in the Law of Expropriation” (1967) University of British Columbia Law Review 127 which discusses the older English cases and Canadian cases) that compensation for injurious affection is payable on account of a denial or restriction on road access that was previously available in respect of lands retained by the owner from whom other land has been expropriated. The discussion of the concept of “injurious affection” in the more recent decision of the High Court in Marshall is particularly instructive. The joint judgment at p 622 in criticising an English judgment which had described “injurious affection as a piece of jargon” said:

It is more than that. It is a neat, expressive way of describing the adverse effect of the activities of a resuming authority upon a dispossessed owner's land. Reference to it in disparaging language does nothing in our view to assist in the elucidation of what it involves. The use of this common expression serves well to distinguish the statutory right from the common law claim in nuisance.

74 In Marshall, the statutory provision relating to injurious affection contained in Queensland’s Acquisition of Land Act 1967, s 20(1)(b) provided as follows:

(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage, if any, caused by either or both of the following, namely --
(a) the severing of the land taken from other land of the claimant;
(b) the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land.

75 The joint judgment’s interpretation of that section in the following passages at 616/617 is illuminating and is apposite to the present case:

[20] In our opinion, however, the language of s 20(1)(b) of the Act could hardly be plainer. In assessing compensation, regard is to be had not only to the value of the land taken but also to the damage caused by the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other [the remaining, severed] land . The section does not say "the exercise of any statutory powers by the constructing authority on and only on the land taken ... ". The section clearly distinguishes between the land taken and the severed land. It does not seek to distinguish between the various activities carried out by a constructing authority in the exercise of its statutory powers: for example, the conduct of a survey, the construction of a road, the building of a bridge, the installation of drainage or footpaths beside the road, and the subsequent use of everything that has been done or brought into existence as, and for the purposes of, a road. In truth, all of these can relevantly and properly be characterised as part and parcel of the construction, and subsequently the use of the road. Once the constructing authority acquires land for a statutory purpose and carries out the statutory purpose, it must, pursuant to s 20(1)(b) of the Act, compensate the dispossessed owner for the injurious effect upon the residual land resulting from the undertaking and the implementation of that purpose, actual and prospective.
[21] In this case, the respondent gave notice of intention to the appellant to resume the land for "road purposes" as required by s 7 of the Act. That notice was given following the making of a proclamation pursuant to s 12 of the Act [37]. A constructing authority does not have an unfettered right to resume land. Unless the authority has a bona fide purpose of exercising a statutory power in respect of the land, a purported resumption of it would be unlawful [38] . There is no suggestion of unlawfulness here. What is extraordinary here is the respondent's submission that having acquired the land for "road purposes" its use of the land thereafter was, and is not, for any of those purposes.
[22] The correct view is, in our opinion, that the land, whether it is a site for the deposition of residue from the road works, a site for the support of a batter, or for drainage associated with the roadworks, or for future road-widenings, or has a use as a passive buffer [39] , is land used for "road purposes", the Bruce Highway.

[ 37] Effect of Proclamation or Notification of Resumption . (1) Subject to subsection (4) of this section -- (a) land taken by Proclamation -- (i) shall vest, according as the Proclamation prescribes, in the Crown or in the constructing authority which requires the land on and from the date of the publication in the Gazette of the Proclamation; or ... (2) Where land taken consists of the whole estate in fee-simple and vests in the Crown it shall be and remain Crown land until it is, according to the purpose for which it is taken, dealt with as prescribed by an Act other than this Act ...
[38] cf R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 187, per Gibbs CJ.
[39] cf Newcastle City Council v Royal Newcastle Hospital (1957) 96 CLR 493 and in the Privy Council (1959) 100 CLR 1 at 2-3.

76 The approach unanimously adopted by the High Court in Marshall concerning the scope of compensation in respect of injurious affection caused to retained lands of the owner from whom other related (”severed” or “adjoining”) land was expropriated, powerfully supports the conclusion in the present case that any proven decrease in the value of the Applicant’s retained commercially zoned lands caused by the transitway proposed public purpose (including the denial of access between the transitway and the Applicant’s adjoining retained land) would be recoverable as compensation for injurious affection in terms of the Just Terms Act, s 55(f).

77 However, before so concluding that this is the effect of the Just Terms Act, s 55(f), on the facts of the present case, it is necessary to consider whether that position is in any way disturbed by virtue of a fact that I have earlier noted, namely that the Roads Act itself provides for the payment of compensation “if access across the boundary between any land and a public road is restricted or denied as a result of the road becoming….a transitway….”: vide s 68(1).

78 In this respect, the Roads Act, ss 68 and 69 are in the following terms:

68 Entitlement to compensation
(1) If access across the boundary between any land and a public road is restricted or denied as a result of the road becoming a freeway, transitway or controlled access road, or if a person has started to construct a means of access to a freeway, transitway or controlled access road before its declaration as such and the consent of the RTA to its completion is refused, the roads authority must pay compensation to the owner of the land for any loss or damage arising from the loss of access.
(2) Compensation is not payable to the owner of any land merely because:
(a) adjacent land is acquired by the RTA for the purpose of opening a new freeway, transitway or controlled access road or widening an existing freeway, transitway or controlled access road, and
(b) access is restricted or denied across the boundary between the owner’s land and such part of the freeway, transitway or controlled access road as comprises the land so acquired.
(3) Compensation is payable under this Division only if a claim for the compensation is made within 12 months after the land concerned has been declared to be a freeway, transitway or controlled access road.

69 Amount of compensation payable

(1) The amount of compensation payable under this Division is an amount equal to the difference between the market value of the land immediately before, and the market value of the land immediately after, the right of access was restricted or denied.
(2) In determining the amount of compensation:

(a) the assessment of the market value of the land at the time it became subject to the restrictions must take into account any modifications of the restrictions that are attributable to any consent given by the RTA and any conditions attached to such a consent, or that are attributable to any undertaking that the RTA has given or promised, and
(b) there must be taken into consideration any benefit that may accrue to any other land in which the claimant has an interest because of the construction or improvement (whether by the RTA or any other person) on land adjacent to that in respect of which the compensation is claimed of any road after the restrictions took effect or because of the effect of the restrictions, and
(c) no account may be taken of the fact that, since the land became subject to the restrictions, the interest of the claimant has become, or has ceased to be, the same as the interest of the claimant in other land.

79 Although the question of the impact of these provisions on the present case was raised by myself during the course of the parties’ final addresses, it was not extensively debated or explored. Upon further reflection, it appears to me to be tolerably clear that s 68(2) denies the entitlement to compensation that otherwise would be conferred by subsection (1) in a case of the acquisition by the Roads and Traffic Authority of “adjacent land” to the land of the owner making the claim, and that the reason for this lies in the fact that it is presumed that in such a case (as provided in subsection (2)) compensation for the loss of access would be recoverable as injurious affection in terms of the Just Terms Act, s 55(f).

80 This interpretation of s 68 adopts a meaning of “adjacent land” appearing in subsection (2)(a) as one that comprehends such land by whomsoever owned (including by the owner of the land that adjoins the land acquired by the Roads and Traffic Authority). It is an interpretation that fits harmoniously with the operation of Part 12 of the Act (“Acquisition of Land”) which invokes the Just Terms Act.

81 So interpreted, there is no question of inconsistency between the Just Terms Act, s 55(f) and the Roads Act, ss 68 and 69. (Although in this context, the Roads Act is the later Act that factor is complicated by the fact that ss 68 and 69 perpetuate the provisions contained in ss 44 and 45 of the earlier Act, the State Roads Act 1986. However, no relevant inconsistency here exists.)

82 Accordingly, I am able to conclude, and I do so, that any proven decrease in the value of the Applicant’s retained lands caused by the transitway public purpose (including the proposal for the denial of access between the transitway and the Applicant’s retained land) would, as a matter of principle, be compensatable as injurious affection in terms of the Just Terms Act, s 55(f).

83 The question of principle now to be answered is whether (as contended by the Respondent) the transitway proposal with its absolute denial of access between it and the Applicant’s adjoining retained commercially zoned land, does not involve any additional constraint on the prevailing planning restrictions on access to Windsor Road in respect of any development of the Applicant’s commercially zoned land. (It is to be noted that none of the commercially zoned land at Kellyville/Rouse Hill had been developed at the date of compulsory acquisition.)

84 What are these planning restrictions? The relevant provisions of the LEP include the following:

(i) cl 11(2) which provides as follows:
A person must not carry out development on land to which any of the following environmental planning instruments apply unless arrangements satisfactory to the Roads and Traffic Authority for classified roads have been made in relation to that land:

Baulkham Hills Local Environmental Plan 1991 (Amendment No 1)
Baulkham Hills Local Environmental Plan 1991 (Amendment No 52)
Baulkham Hills Local Environmental Plan 1991 (Amendment No 73)
Baulkham Hills Local Environmental Plan 1991 (Amendment No 90)
Baulkham Hills Local Environmental Plan 1991 (Amendment No 97)

noting that the definition of “ classified road ” contained in cl 5(1) includes “ (a) a main road ” (which is the status of Windsor Road) and that the Applicant’s commercially zoned land is relevantly land to which Amendment No 1 applies; and
(ii) cl 44 which provides as follows:
(1) This clause applies to all land within Zone No 2 (a), 2 (a1), 2 (a2), 2 (a3), 2 (b), 2 (c), 2 (d), 3 (a), 3 (b), 4 (b) or 10 (a).
(2) A person must not carry out development on land to which this clause applies, being land that adjoins a classified road, unless vehicular access to and from the land is made by way of another road (not being a classified road).
(3) However, if the proposed development could be carried out on the land concerned but for subclause (2), the Council may, for the purposes of the proposed development, allow permanent vehicular access to and from a classified road, if, in the opinion of Council, alternative access to the site of the proposed development is neither practical nor provided by another road (or a proposed road identified in a development control plan).

85 In addition to those provisions of the LEP, there are also some relevant provisions contained in Development Control Plan 200—Kellyville/Rouse Hill Release Area (DCP 200) made pursuant to the EP&A Act, s 72 which came into force on 25 January 2000.

86 Section 5.4 of the DCP “Road Planning” includes the following stated “planning objectives” for the intersection of Old Windsor Road and Windsor Road—

Short Term

To incorporate traffic management and safety improvements including signalisation and any such works as proposed are to be funded by the Roads and Traffic Authority.

Long Term

The intersection or treatment to Windsor and Old Windsor Road to incorporate either local access or service road to facilitate the orderly development of commercially zoned lands north of Whitehart Bridge.

87 The same Section states the relevant “Development controls” which include the following:

(f) Direct vehicular access to Arterial and Sub-arterial roads will not be permitted where alternate access is available. Access will not be restricted to any property from Arterial or Sub-Arterial roads until such time as alternate access is available.

88 In addition to the relevant provisions of DCP 200, the Respondent also relies upon similar provisions relating to restrictions on access between commercially zoned lands and classified (or main or arterial) roads that are found in the Rouse Hill Regional Centre Development Control Plan 201 which came into force in November 2001 and “Development Control Plan No 6—Business” which came into force in July 2002. The former DCP does not apply to the Applicant’s commercially zoned retained lands but applies to the Rouse Hill Regional Centre (formerly known as the Mungerie Park sub-regional centre) but the latter DCP applies to the Applicant’s land as it applies to all land zoned General Business 3(a) Special Business 3(b) and Service Business 3(c) under the LEP.

89 The Applicant submitted that the relevant planning provisions had to be carefully considered in order to eliminate any of their content which had come into existence in support of the proposed transitway at the instigation or urging of the Respondent once it had taken the decision in 1999 not to support the continuation of the previously planned public transport corridor servicing the proposed Mungerie Park Sub-Regional Centre coming from an easterly direction via an extension of Poole Road, but instead to promote an expanded Windsor Road to provide the public transport corridor.

90 This submission relied upon a passage from the judgment of High Court in the Crown v Murphy (1990) 71 LGRA1 at 4 in the context of the Court’s consideration of the majority judgment of the Full Court of the Queensland Supreme Court which had applied the principles enunciated in Pointe Gourde Quarrying and Transport v Sub-Intendent of Crown Lands (1947) AC 565 and in San Sebastian in holding “that restrictions on land use……maintained as a result of consultation with the resuming authority must be ignored for the purpose of assessing the value of the resumed land”. The passage from the High Court judgment states:

The statement of principle by the majority in the Full Court and the statement of the necessary consequential inquiry are unexceptionable. One purpose of this principle is to ensure that a resuming authority does not employ planning restrictions to destroy the development potential of the land and then assess compensation for its resumption on the basis that the destroyed potential had never existed: Melwood Units Ltd v Commissioner of Main Roads [1979] AC 426 at 434. The principle applies in cases where there is a direct relationship between the planning restriction and the scheme of which resumption is a feature and extends to cases where there is merely an indirect relationship, provided that the planning restriction can properly be regarded as a step in the process of resumption: Housing Commission of New South Wales v San Sebastian Pty Ltd, (at 206-207).

91 The Respondent disputed the Applicant’s submission by asserting that the relevant principle did not apply to the assessment of compensation for injurious affection in respect of other relevant lands owned by the land owner from whom land had been compulsorily acquired.

92 In my judgment, the Respondent’s submission is correct. The principle affirmed in Murphy applies to the determination of the market value of the compulsorily acquired land (see in particular s 56(1)(a) of the Just Terms Act) and that principle has been applied in the present case in my determination of the market value of the compulsorily acquired lands.

93 But I do not think that the principle has any further application in the determination of compensation for injurious affection pursuant to the Just Terms Act, s 55(f).

94 It is in the light of these recited planning provisions prevailing at the date of compulsory acquisition that the Respondent’s case that the compulsory acquisition did not materially change the existing planning position concerning the denial of access between the Applicant’s retained land and Windsor Road (including the provision therein abutting the Applicant’s land of the transitway) must be evaluated.

95 The principal argument advanced in support of the Respondent’s case on this point is the fact that the relevant planning provisions were not changed as a result of, or in anticipation of, the proposed compulsory acquisition.

96 Whereas it is true the relevant planning provisions were not changed in consequence of the compulsory acquisition, the Respondent’s argument overlooks that the Applicant’s claim to injurious affection is not founded upon those planning provisions. Rather it is entirely founded upon the proposed transitway involving the total denial of access between it and the Applicant’s retained adjoining commercially zoned land. This outcome is entirely produced by the operation of the Roads Act.

97 Accordingly, what must be established by the Respondent to make good its case that the compulsory acquisition did not materially change the existing planning position concerning the denial of access between Windsor Road and the Applicant’s retained land is that the compulsory acquisition for the purposes of establishing the transitway did not materially change the existing planning position concerning the denial of access to and from Windsor Road precisely because the denial of access involved in the transitway proposal was already achieved by the operation of the relevant planning provisions.

98 But it is obvious from their content that those relevant planning provisions did not operate to absolutely deny access between the Applicant’s land and Windsor Road. Clearly, the relevant provisions of the LEP and DCP 200 recognised the possibility of development of the Applicant’s commercially zoned land having direct access to Windsor Road in the event of the Council, as the consent authority determining a development application, being of the opinion that “alternative access to the site of the proposed development is neither practical nor provided by another road….etc” (vide cl 44(2) of the LEP).

99 The statutory function conferred upon the Respondent by cl 11(2) of the LEP was perceived by Mr Rowan to “effectively provide the RTA with a concurrence role for any development application requiring access to a classified road”: vide par 2.41 of his Report (Exhibit C).

100 But even if this is an apt description of the ambit of the function conferred upon the Respondent, it falls very far short of providing an automatic and unreviewable veto on direct vehicular access between the Applicant’s commercially zoned land and the Windsor Road (such as is the operation of the Roads Act in respect of the proposed transitway).

101 Moreover, Mr Rowan’s analysis appears to have overlooked the possible effect on cl 11(2) of the LEP of cl 5 of State Environmental Planning Policy No 11—Traffic Generating Developments and the substitute statutory regime for consultation imposed by cl 7 of that State Policy.

102 Even if that State Policy does not strictly apply to cl 11(2) of the LEP, it is a powerful indication of the limited type of planning role that is assigned to the Respondent (as a road authority) in respect of the undertaking of significant developments of lands having direct access to an arterial road.

103 In these circumstances, the Respondent’s submission based upon the oral testimony of Mr Drummond who gave town planning evidence on behalf of the Applicant, concerning his sanguine opinions of obtaining the consent of the Council for the development of the Applicant’s commercially zoned lands with direct vehicular access to Windsor Road, both immediately before and immediately after the date of compulsory acquisition essentially misses the mark, so far as concerns the Applicant’s claim to compensation for injurious affection. That mark is that it is the decisive and final effect of the declaration under the Roads Act of the transitway proposal with a denial of access between it and the Applicant’s retained commercially zoned lands (rather than the more debatable effect (and operation) of the relevant planning provisions) that causes a decrease in the value of the Applicant’s retained commercially zoned lands by virtue of the absence of a means of access necessary and appropriate to support the type of commercial development that may be carried out conformably to that zoning under the LEP.

104 The Respondent advanced the somewhat surprising submission that the Applicant had not discharged the onus in proving that access would be denied between the proposed transitway and the Applicant’s retained commercially zoned land. I say “surprising” in view of the pleadings and the extensive documentary evidence which leaves no shadow of doubt that the transitway proposal would deny access between the transitway and the Applicant’s land.

105 For the reasons that I have earlier given, particularly in the light of the High Court’s judgment in Marshall, the statutory concept of injurious affection is sufficiently broad to include that feature of the public purpose of the provision of a transitway that involves the denial of access between that transitway and the Applicant’s retained lands. In my opinion, the state of documentary evidence and the Respondent’s pleadings effectively precludes the Respondent from advancing its present submission that the Applicant has failed to prove that the transitway will involve the denial of access, which is the exclusive basis for the Applicant’s claim to compensation for injurious affection.

106 This brings me to consider the factual basis for the Applicant’s claim for compensation for injurious affection. It was originally propounded in Mr Large’s Valuation Report (Exhibit 23) which quantified it in the sum of $7.9 million, derived from a before and after valuation exercise in respect of the Applicant’s commercially zoned land (which included the southern section of the compulsorily acquired land). In the after valuation exercise, Mr Large reduced the per square metre rates of $370 and $420 that he had applied in the before valuation to $250 in his after valuation. This reduction in value was his estimate of the extent of injurious affection caused to the retained commercially zoned lands by the denial of access between them and the proposed transitway and taking into consideration the alternative service road proposal of the Respondent. In so concluding Mr Large had relied upon the traffic/town planning advice of Mr Coady who had trenchantly criticised the Respondent’s proposed service road providing alternative access to the Applicant’s retained commercially zoned land as being “ill conceived, unworkable and unacceptable” (Exhibit 25).

107 Mr Large’s adoption of Mr Coady’s advice led the former to conclude that the “only alternative use (for the Applicant’s commercially zoned lands) would be for medium density development” and his adopted rate of $250 per square metre in his after valuation reflected his opinion of the value of land zoned to permit medium density residential development.

108 By way of contrast, it is to be noted that Mr Wood’s Valuation Report (Exhibit E) allowed nil compensation for injurious affection.

109 In his Report in Reply (Exhibit F), Mr Wood in response to Mr Large’s estimate of injurious affection maintained his opinion that no compensation was payable on that account. In so concluding, he noted that Mr Large (and presumably Mr Coady) had misunderstood the limited purpose of the Respondent’s proposal to provide an alternative service road access (namely to merely facilitate access to the Applicant’s retained lands merely in their undeveloped state) and relied upon Mr Rowan’s planning advice based upon the prevailing planning controls operating under the LEP and DCP 200.

110 In his supplementary Report in Reply (Exhibit G), Mr Wood expressed the following opinions in respect of Mr Large’s estimate of the decrease in value of the Applicant’s retained commercially zoned lands—

In my opinion, even accepting the Applicant’s apparent analysis that the effect of the denial of access to Windsor Road is to leave the Applicant’s land landlocked and unsuitable for commercial development, I disagree with Mr Large in two respects:

- in my opinion, it is not correct to say that the land could only support an alternative use of medium density residential. In my opinion, even allowing for the alleged diminution in access, the Applicant’s land would nevertheless be able to support a mixed use consisting of medium density residential and apartment buildings;

- On the basis that the land could support a higher intensity use, my view is that an appropriate rate per square metre of it would be $300. In this regard I refer to the attached Schedule of comparable sales which indicate that $330-350 per square metre is not an atypical rate for such development potential. In respect of the sale at Wrights Road, which yielded a rate of $254 per square metre in 2001, I note that the same property was passed in at auction in 2002 with the highest bid being $438 per square metre. In my view, accounting for the alleged diminution in access to and from the subject property when compared with the comparable sales, $300 per square metre is a reasonable rate to be applied.

Having regard to the area of land which is alleged to be injuriously affected, if the Applicant’s analysis of the extent of the diminution of access is correct, the substance of its claim under Section 55(f) would be $3,088,500.

111 There is no doubt that there has been a significant degree of unnecessary and unexpected confusion between the parties concerning the intended purpose of the Respondent’s proposed service road providing alternative access to the Applicant’s retained commercially zoned land. It is unnecessary and unprofitable to explore how this confusion came about because it is clear that by the time that the hearing of this case began, the Respondent, through its Solicitors, had clearly stated what was (and was not) the intended purpose of the service road. Despite this belated clarification (which may indeed have involved a significant departure from the previous mutual understanding, but in any event that matters not), the question of access had to be readdressed by the parties and their experts during the extended adjournment of the hearing. That re-address led to the production of plans showing significant possible changes to the signalised intersection of Windsor and Old Windsor Roads designed to accommodate the provision of access to the commercially zoned land (including the Applicant’s lands) fronting the eastern side of Windsor Road.

112 The production of this plan was the subject of a further joint report (Exhibit 37) of the traffic experts, Mr Coady and Mr Hollis. That Joint Statement includes the expert’s agreement that traffic modelling demonstrates an acceptable intersection performance of the possible intersection changes at least up to 2016.

113 Despite this agreement, Mr Coady is of the opinion that the intersection of Windsor and Old Windsor Roads is an inappropriate location on traffic grounds to provide access for the Applicant’s (and other landowners’) commercially zoned land. He is also of the opinion that the Respondent will not permit this type of access arrangement. In so opining, Mr Coady relies upon the following warnings that are endorsed on the plan showing the possible access proposal (the essence of which is repeated in par 11 of Mr Sherwin’s Supplementary Statement (Exhibit R):

FOR THE AVOIDANCE OF DOUBT, THIS SKETCH DOES NOT:

(a) FORM PART OF ANY APPROVAL NOR HAS IT BEEN APPROVEDF BY THE ROADS AND TRAFFIC AUTHORITY (RTA);

(b) REPRESENT A PROPOSAL BY THE RTA TO CONSTRUCT THE INTERSECTION OF WINDSOR AND OLD WINDSOR ROAD (INTERSECTION) IN THE MANNER DEPICTED CONSEQUENT ON THE DEVELOPMENT OF ANY LAND LOCATED TO THE NORTH OF THE INTERSECTON;

(c) REPRESENT A COMMITMENT BY THE RTA TO APPROVE THE DEPICTED INTERSECTION DESIGN OR ACCESS ROAD, OR TO APPROVE ANY ACCESS ROAD IN THE LOCATION SPECIFIED, AS PART OF ANY DEVELOPMENT OF LAND NORTH OF THE INTERSECTON, OR

(d) REPRESENT THE RTA’S PREFERRED OPTION FOR ACCESS FROM WINDSOR ROAD TO ANY LAND LOCATED NORTH OF THE INTERSECTION AS PART OF ANY DEVELOPMENT OF THAT LAND. PREFERRED OPTIONS FOR ACCESS CAN ONLY BE DETERMINED AT THE TIME A DEVELOPMENT APPLICATION IS LODGED.

114 In his supplementary Report in Reply (Exhibit 40), Mr Large reconsiders his estimate of the compensation payable for injurious affection to the Applicant’s retained commercially zoned lands (including the 2 hectares which had been re-zoned for Open Space in 1997 by Amendment 52 to the LEP).

115 His reconsideration involved three separate potential scenarios—namely:—

Scenario (i)
This is the approach adopted in his original Valuation Report ( Exhibit 23 ) namely the view that in the after-valuation, the hypothetical purchaser would have paid a value commensurate with a Residential 2(a4) zoning rather than with the Special Business 3(b) zoning because of the loss of access to and from Windsor Road. The only difference is his estimate of compensation is reduced to $6,463,800 reflecting the rates per square metre of $350 and $250 agreed by the valuers in their Joint Reports in respect of the values of the Special Business 3(b) zoned land and the Residential 2(a4) zoned land respectively.
Scenario (ii)
This contemplates the provision of access to the Applicant’s commercially zoned land, either (i) via the intersection of Windsor and Old Windsor Roads (which is neither favoured by Mr Coady and is not guaranteed by the Respondent) or (ii) via the provision of a further arm off the signalised intersection of Windsor Road and Merriville Road. Mr Large’s rough estimate of the costs involved in the provision of either of those access arrangements is in excess of $3 million and each involves considerable uncertainty.
Scenario (iii)
Contemplates the provision of permanent access via the Mungerie Park Regional Centre across land owned by Sydney Water and requiring the construction of a flood free bridge. His rough estimate of the costs of this access likewise exceeds $3 million .

Based upon his consideration of the three scenarios, Mr Large opines as follows:

Under scenarios 2 or 3 a hypothetical purchaser would heavily discount the value of the property due to the unknown cost of providing alternate access. This discount would be between 30% - 40% reducing the 3(b) Special Value at 4350/m2 to $245/m2 or $210/m2, below the value of Scenario 1 at $250/m2.

116 In their Joint Statement (Exhibit 7), Mr Large and Mr Wood agreed on the rate of $350 per square metre for the Special Business 3(b) zoned land but could not reach agreement on the injurious affection claim and maintained their respective opinions as reflected in their Supplementary Reports. In his oral testimony, Mr Wood revised his estimate of injurious affection if the Court upheld the Applicant’s claim by reducing its quantum to $2 million reflecting his view that the decrease in the value of the Applicant’s retained commercially zoned land was at the rate of $50 per square metre based upon the 4 hectares of land so zoned and not applying that reduced rate to the 2.117 hectares that had been re-zoned in 1997 to Open Space.

117 In my judgment, the Applicant has established its claim to compensation for injurious affection in terms of the Just Terms Act, s 55(f) in respect of the retained commercially zoned land of 4 hectares but not in respect of the retained Open Space zoned land.

118 However, I find the quantification of the amount of compensation that is payable to be an extremely difficult matter.

119 Having regard to the Valuers’ agreed values of $350 per square metre for Special Business 3(b) zoned land and $250 per square metre for Residential 2(a4) zoned land, I am inclined to think Mr Large’s estimate of a decrease in value of the commercially zoned land by $100 per square metre is a reasonable measure of the decrease in value, in effect limiting the development potential of the commercially zoned 4 hectares to the same potential that applies to the 2(a4) zoning. Whereas this is a plausible approach, I am doubtful whether it is reasonable to conclude that in the before value it can be simply assumed that access from Windsor Road to any commercial development of the Applicant’s lands would have been granted by the Council and agreed to by the Respondent.

120 Although such a possibility existed (both legally and factually), I do not think it is reasonable to proceed to quantify injurious affection on the basis that there would be no risk in obtaining development consent to a development that enjoyed direct access from Windsor Road. In short, there needs to be factored into the estimate an element of risk.

121 Accordingly, I am not able, without qualification, to adopt Mr Large’s quantification of $4 million as representing the decrease in the value of the Applicant’s commercially zoned land.

122 The allowance for risk is itself a very difficult and problematical matter, but I think something like 25 percent should be allowed producing a decrease of $3 million in the value of the retained commercially zoned land. This amount generally reflects some of Mr Large’s rough costings of providing alternative acceptable access to the commercially zoned lands to enable them to be developed for commercial purposes.

123 For the foregoing reasons, I would assess in the sum of $3 million, the decrease in the value of the Applicant’s retained commercially zoned land.

124 For the foregoing reasons, I determine compensation in the sum of $7,985,850 made up as follows:—

(i) Market Value of Compulsorily acquired land $4,985,850
(ii) Decrease in Value of retained lands $3,000,000

125 To that amount, there will be added an amount in respect of disturbance to be agreed by the parties or failing agreement, to be determined by the Court.

126 Accordingly, I make the following orders—

1. Compensation is determined in the sum of $7,985,850 made up as follows—
(i) Market value of acquired lands $4,985,850
(ii) Decrease in value in retained lands $3,000,000

2. In addition to the amount referred to in Order 1 there is to be added compensation for disturbance in the sum agreed by the parties or failing agreement, as determined by the Court with liberty to apply.
3. Question of costs be reserved.
4. Exhibits be returned.