Moloney v Roads and Maritime Services (No 2)

[2017] NSWLEC 68

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Moloney v Roads and Maritime Services (No 2) [2017] NSWLEC 68
Hearing dates:	7-16 December 2016, 30-31 January 2017
Date of orders:	25 August 2017
Decision date:	13 June 2017
Jurisdiction:	Class 3
Before:	Pain J
Decision:	See pars 325-333
Catchwords:	ACQUISITION OF LAND – compulsory partial acquisition of cane farm land – application of before and after method of valuation to determine market value incorporates impact on value of improvements on residue land – disturbance claim for cost of building replacement dwelling on residue land based on impact of highway on residue land considered – disturbance claim for loss of profits from acquired land refused
Legislation Cited:	Clarence Valley Local Environmental Plan 2011 Heavy Vehicle National Law (NSW) 2013 Heavy Vehicle (Mass, Dimension and Loading) National Regulation (NSW) 2013 Interpretation Act 1987 s 8(b) Land Acquisition (Just Terms Compensation) Act 1991 ss 3, 20, 54, 55, 56, 59, 66 Land and Environment Court Act 1979 s 19 State Environmental Planning Policy (Infrastructure) 2007
Cases Cited:	Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259 Brock v Roads and Maritime Services [2012] NSWCA 404 Caruana v Port Macquarie-Hastings Council (2007) 210 LGERA 1; [2007] NSWLEC 109 Chaudry v Liverpool City Council [2008] NSWLEC 251 Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd (1947) 74 CLR 358; [1947] HCA 10 Constantino v Roads and Traffic Authority of New South Wales (2004) 135 LGERA 365; [2004] NSWLEC 517 Coundrelis v Roads and Traffic Authority of NSW [2008] NSWLEC 72 Lasermax Engineering Pty Ltd v QBE Insurance (Aust) Ltd [2005] NSWCA 66 George D Angus Pty Ltd v Health Administration Corporation (2013) 205 LGERA 357; [2013] NSWLEC 212 Gosford Shire Council v Green (1980) 48 LGRA 201 Harvey v Crawley Development Corporation [1957] 1 QB 485 Johnston v The Roads and Traffic Authority [2000] NSWLEC 111 Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413; [1999] HCA 25 Leichhardt Council v Roads and Traffic Authority (NSW) (2006) 149 LGERA 439; [2006] NSWCA 353 McBaron v Roads & Traffic Authority of New South Wales (1995) 87 LGERA 238 McDonald v Roads & Traffic Authority of NSW (2009) 169 LGERA 352; [2009] NSWLEC 105 MIR Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW [2006] NSWCA 314 Mosca v Roads and Traffic Authority of NSW (2004) 139 LGERA 28; [2004] NSWLEC 676 N Stephenson Pty Ltd v Roads and Traffic Authority of New South Wales (1994) 83 LGERA 248 Parfett v Roads and Maritime Services [2014] NSWLEC 1182 Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66 Roads & Traffic Authority of NSW v McDonald (2010) 175 LGERA 276; [2010] NSWCA 236 Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307; [2016] NSWCA 7 Roads and Traffic Authority of New South Wales v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159 Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391 The Minister v New South Wales Aerated Water and Confectionary Co Ltd (1916) 22 CLR 56; [1916] HCA 48 Tolson v Roads and Maritime Services (2014) 201 LGERA 367; [2014] NSWCA 161 W and H Carter v Roads and Traffic Authority of NSW (2006) 144 LGERA 375; [2006] NSWLEC 89 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156; 73 LGRA 47
Category:	Principal judgment
Parties:	16/154024 John Brendan Moloney (First Applicant) Colleen Patricia Moloney (Second Applicant) Roads and Maritime Services (Respondent)   16/154057 John Brendan Moloney (Applicant) Roads and Maritime Services (Respondent)
Representation:	COUNSEL: I Hemmings SC and A Pearman (Applicants) P Tomasetti SC and N Eastman (Respondent)   SOLICITORS: Stacks Forster (Applicants) Clayton Utz (Respondent)
File Number(s):	16/154024 and16/154057

Judgment

1. Mr and Mrs Moloney own separately and jointly numerous lots on which they grow sugar cane. Part of two of their farms were compulsorily acquired on 6 February 2015 by the Roads and Maritime Services (RMS), the Respondent, for the Pacific Highway upgrade between Woolgoolga and Ballina. They have commenced two appeals under s 66(1) of the Land Acquisition (Just Terms Compensation) Act1991 (Just Terms Act) in relation to the compensation payable for the partial acquisition of Home Farm and Watts Farm. The appeals were heard together. The Court has jurisdiction to determine these appeals under s 19(e of the Land and Environment Court Act 1979. I thank Acting Commissioner Maston for his valuable assistance in determining this matter.

2. The Court is acting as the judicial valuer in this case per Sydney Water Corporation v Caruso (2009) 170 LGERA 298 [2009] NSWCA 391 at [3], [35], [37], [146] and [150] and Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156; 73 LGRA 47. As a general principle in determining compensation doubts should be resolved in favour of a more liberal estimate, see Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd (1947) 74 CLR 358; [1947] HCA 10 at 374.

3. The Applicants’ land is located approximately 30 km north-east of Grafton at Tyndale. Prior to acquisition the Applicants owned 83.67 ha of land known as Home Farm, being Lots 1, 3, 4 and 8 DP751389, Lot 50 DP1040235 and Lot 51 DP996917. The acquired land traverses Lots 3, 4 and 8 DP751389 and Lot 50 DP1040235. An area of 9.36 ha was acquired for the public purpose leaving Home Farm with 74.24 ha. The new Pacific Highway bisects Home Farm leaving 21.4 ha located on the northern portion and 52.8 ha located on the southern portion.

4. The First Applicant also owned 40.17 ha of land known as Watts Farm, being Lots 75 and 89 DP751389. The acquired land comprises the northern portion of Lot 89 DP751389. An area of 8.84 ha was acquired for the public purpose leaving Watts Farm with 31.33 ha.

5. Home Farm, Watts Farm and Mickey’s Farm, which is also owned by the Applicants but is unaffected by the public purpose, are farmed together as a single operation.

6. Two residences are located on Home Farm. Between 1971 and 1982 the Applicants lived in a house on Lot 1 (the dwelling on Lot 1) in the northern corner of Home Farm approximately 12 m from the existing Pacific Highway. In 1982 the Applicants built their current residence (the main dwelling) to the south of the dwelling on Lot 1 approximately 950 m from the existing highway. The dwelling on Lot 1 is currently occupied by a daughter of the Applicants and her family. As a result of the acquisition the main dwelling is now located approximately 145 m from the edge of the southbound carriageway of the new highway and approximately 115 m from the southbound off-ramp for the Tyndale interchange. Both carriageways for the new Pacific Highway will be dual lane with a posted speed limit of 110 km/h for light vehicles and 100 km/h for heavy vehicles.

Land Acquisition (Just Terms Compensation) Act 1991

7. The basis on which compensation is determined is defined by Pt 3 Div 4 of the Just Terms Act. Relevant sections of the Just Terms Act provide:

Part 1 Preliminary

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3 Objects of Act

(1)   The objects of this Act are:

(a)   to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will be not less than the market value of the land (unaffected by the proposal) at the date of acquisition, and

(b)   to ensure compensation on just terms for the owners of land that is acquired by an authority of the State when the land is not available for public sale, and

(c)   to establish new procedures for the compulsory acquisition of land by authorities of the State to simplify and expedite the acquisition process, and

(d)   to require an authority of the State to acquire land designated for acquisition for a public purpose where hardship is demonstrated, and

(e)   to encourage the acquisition of land by agreement instead of compulsory process.

(2)   Nothing in this section gives rise to, or can be taken into account in, any civil cause of action.

Part 2 Acquisition of land by compulsory process

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Division 2 Acquisition procedures

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20 Effect of acquisition notice

(1)   On the date of publication in the Gazette of an acquisition notice, the land described in the notice is, by force of this Act:

(a)   vested in the authority of the State acquiring the land, and

(b)   freed and discharged from all estates, interests, trusts, restrictions, dedications, reservations, easements, rights, charges, rates and contracts in, over or in connection with the land.

(1A)   Subsection (1) is subject to any express provision of an Act that authorises the acquisition of land by compulsory process but preserves the operation of any trusts, restrictions, dedications, reservations, declarations, setting apart of or other matters relating to the land concerned.

...

Part 3 Compensation for acquisition of land

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Division 4 Determination of amount of compensation

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54 Entitlement to just compensation

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

(2)   If the compensation that is payable under this Part to a person from whom native title rights and interests in relation to land have been acquired does not amount to compensation on just terms within the meaning of the Commonwealth Native Title Act, the person concerned is entitled to such additional compensation as is necessary to ensure that the compensation is paid on that basis.

55 Relevant matters to be considered in determining amount of compensation

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

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

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

(c)   any loss attributable to severance,

(d)   any loss attributable to disturbance,

(e)   solatium,

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

56 Market value

(1)   In this Act:

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

(a)   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, and

(b)   any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and

(c)   any increase in the value of the land caused by its use in a manner or for a purpose contrary to law.

(2)   When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition.

…

59 Loss attributable to disturbance

(1)   In this Act:

loss attributable to disturbance of land means any of the following:

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

(b)   valuation fees of a qualified valuer reasonably incurred by those persons in connection with the compulsory acquisition of the land (but not fees calculated by reference to the value, as assessed by the valuer, of the land),

(c)   financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs),

(d)   stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired),

(e)   financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage),

(f)   any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.

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Summary of claims

8. The Applicants claim the following:

Item	Head of compensation	Claim
Market value of acquired land	ss 55(a), (f)	$787,155 (excl. GST) (not agreed)
Disturbance
(i)   Legal/valuation fees	ss 59(1)(a)-(e)	$64,280.60 (excl. GST) (agreed)
(ii)   Replacement dwelling	s 59(1)(f)	$848,344 (not agreed)
(iii)   Road upgrades	s 59(1)(f)	$56,000 (excl. GST) (agreed)
(iv)   Farm adjustments (laser leveling, pipe works, drains)	s 59(1)(f)	$114,694.09 (excl. GST) (agreed)
(v)   Loss of profits:	s 59(1)(f)
(a)   Watts block not planted	(a) $8,734 (excl. GST) (agreed)
(b)   Cane harvested on acquired land	(b) $10,508 (excl. GST) (agreed)
(c)   Future profits on acquired land	(c) $148,258 (not agreed)
(vi)   Increased cost of production	s 59(1)(f)	$15,000 (agreed)

9. A number of the original points of claim were resolved in the course of the hearing. The Applicants also made a claim under s 59(1)(f) for additional traffic management expenditure incurred as a result of the disruption caused by the acquisition severing Home Farm. The RMS proposes building an underpass under the new highway on Home Farm which will allow the passage of small vehicles. The parties agreed that the claim in relation to large farm machinery be dealt with by way of a deed of agreement and that the Court does not need to separately award compensation for this disturbance item.

10. Three overarching issues remain for determination. Firstly, the market value of the acquired land on Home Farm and Watts Farm. Secondly, a disturbance claim for the cost of building a replacement home on Home Farm is claimed under s 59(1)(f). Thirdly, a further disturbance claim under s 59(1)(f) for loss of future profits from growing cane on the acquired land on Home Farm and Watts Farm.

11. The Court attended a view in the presence of the parties and their experts over two days on the second and third days of the hearing. The Court and the parties travelled to the subject land at Tyndale and observed the location and surrounds of the dwelling on Lot 1 by the existing highway, the main dwelling and a proposed site for a replacement dwelling on Home Farm. The Court was also taken to numerous properties identified by the parties’ valuation experts as comparable sales between Tyndale and Byron Bay.

12. Mr Green an employee of the RMS identified 17 case examples of dwellings located within close proximity to the new Pacific Highway. Due to time constraints the Court was taken to some but not all of these properties.

Evidence

Summary of documentary evidence

13. The Applicants tendered a large aerial photograph (Exhibit A) of the Clarence Valley Local Government Area showing the location of Home Farm, Watts Farm, other cane farms engaged in the local farming cooperative and an outline of the proposed route for the new Pacific Highway. The Applicants also tendered the Property Adjustment Plan prepared by the RMS in respect of the Applicants’ property (Exhibit B), the court book (Exhibit C) and tender bundle (Exhibit D).

14. Exhibit C contained the Class 3 applications and schedules of losses attributable to disturbance for both Home Farm and Watts Farm. It also contained the Applicants’ points of claim, the RMS’ points of defence and affidavits of Mr Moloney sworn 20 October 2015 and Mr Green, infrastructure property manager at the RMS, sworn 14 November 2016. Exhibit C included a number of expert reports in relation to acoustics, quantity surveying, sugarcane farming, traffic, valuation and accounting.

15. Exhibit D contained a small version of the map in Exhibit A, the Clarence Valley Local Environmental Plan 2011 (LEP), contents pages related to the new Pacific Highway Environmental Impact Statement (EIS) and clarifications to the EIS. Exhibit D included various materials related to noise and acoustics namely: Australian Standard 3671:1989 “Acoustics – Road traffic noise intrusion”; Australian/New Zealand Standard 2107:2000 “Acoustics – Recommended design sound levels and reverberation times for building interiors”; ACT Noise Management Guidelines”; a 2003 article by A. L. Brown and R. B. Bullen titled “Road traffic noise exposure in Australian capital cities”; the State Environmental Planning Policy (Infrastructure) 2007; NSW Department of Planning interim guidelines for “Development near rail corridors and busy roads”; NSW Road Noise Policy; extracts from the Pacific Highway upgrade EIS; NSW “Noise mitigation guidelines”; Western Australian Planning Commission Planning Policy 5.4 “Road and rail transport noise and freight considerations in land use planning” and associated implementation guidelines; Queensland Transport “Noise management code of practice”; Northern Territory “Road traffic noise” policy; Tasmanian “State road traffic noise management guidelines”; South Australian “Road traffic noise guidelines”; and Victorian Roads “Traffic noise reduction policy”.

16. Exhibit D also contained evidence on sugarcane farming, including productivity data and financial statements in relation to the Applicants’ farms, maps showing the Applicants’ farms, a contract between the Applicants and the NSW Sugar Milling Cooperative, a Deed of Release dated 23 June 2016 between the RMS and NSW Sugar, and various emails exchanged between the parties in relation to cane farming.

17. Traffic management documents in Exhibit D included the section headed “Traffic and transport” in the new Pacific Highway EIS, the Heavy Vehicle National Law (NSW) 2013, Heavy Vehicle (Mass, Dimension and Loading) National Regulation (NSW) 2013, an RMS Fact sheet “Transport Management Plans for oversize and/or overmass movements in NSW”, Heavy Vehicle National Law – NSW Class 1 Agricultural Vehicles (Notice) 2015 (No. 1) and letters between the parties concerning traffic management.

18. Exhibit D finally contained evidence of valuation fees already paid by the RMS in relation to the compulsory acquisition of the Applicants’ property.

19. The Applicants tendered Exhibit E, development consent granted by Byron Shire Council for the erection of a dwelling house and demolition of an existing house at Lot 100 DP151011, a bundle of photographs (Exhibit F) and a valuation report prepared in 2012 in relation to the compulsory acquisition of a property near the Applicants’ land (Exhibit G). Exhibit H was construction plans for the new Pacific Highway on the acquired land formerly part of Home Farm, Exhibit J was a fourth joint acoustics report dated 12 December 2016 and Exhibit K was a sound emergence graph. The Applicants tendered a valuation report dated 11 September 2009 and review of that valuation assessment dated 7 December 2010 in relation to the property at Lot 3 DP129126 (Exhibits L1 and L2). Exhibit M was a bundle containing information about a number of comparable sales, Exhibit N was an aerial photograph of Home Farm showing separate percentages calculated by Mr Frogley valuer for injurious affection (IA) on the different lots of Home Farm, Exhibit O was an aerial photograph showing the same overlays as in Exhibit A and Exhibit P was a review of a valuation assessment dated 6 November 2009 in relation to Lot 1 DP837112.

13. The RMS tendered an aerial photograph which depicted the proximity of the main dwelling to the new Pacific Highway (Exhibit 1). Exhibit 2 was the state significant infrastructure project approval for the highway and Exhibit 3 was a list of photographs of case studies selected by Mr Green. Exhibit 4 was a marked up version of the aerial photograph in Exhibit 1. Sugarcane experts Mr McGuire and Dr Kingston prepared a joint statement dated 8 December 2016 in relation to a proposal to seal a new cane pad on Home Farm (Exhibit 5). The RMS also tendered a site view schedule containing brief information and photographs of selected properties (Exhibit 6), a supplementary report of Mr Watt valuer dated 2 December 2016 (Exhibit 7) and the original valuation reports prepared by Country Coast Valuers for the Valuer-General in respect of Home Farm dated 6 June 2015 and Watts Farm dated 16 June 2015 (Exhibit 8). The RMS also tendered a number of documents in relation to a property owned by the Applicants known as “Benson’s Farm” (Exhibit 9) and information regarding the alternative access option agreed in principle between the Applicants and the RMS to allow the Applicants to access the severed northern portion of Home Farm without using the existing Pacific Highway (Exhibit 10).

Affidavit of Mr Moloney

21. Mr Moloney the First Applicant swore an affidavit dated 20 October 2015 to which he annexed and confirmed as true his earlier statement dated 11 September 2015. In his statement Mr Moloney stated that he was at that time 70 years old and that his family had been farming in the Shark Creek Tyndale area for five generations. He has lived on farms within 5 km of the subject land for his whole life. He stated that Home Farm, Watts Farm and Mickey’s Farm are either owned in his name or with his wife Mrs Moloney as joint tenants. They are farmed together as a single operation. The Applicants purchased Home Farm in 1971 when it consisted of 140 acres including 40 acres of cultivated land. In 1976-78 the Applicants purchased a further 60 acres which they developed into cane producing land.

22. During that time the Applicants were living in the dwelling on Lot 1 fronting the existing Pacific Highway. Mr Moloney stated that in that period a number of trucks came through the front yard, one running into the old dairy alongside the house and another hitting the mango tree in the front yard. One truck ran between the house and a cedar tree in the front yard. In 1981-82 the Applicants built the main dwelling (their current residence) on the hill to the south of the old house. This house is approximately 950 m from the existing Pacific Highway. Mr Moloney stated that the main reason for building the new house was to get away from the highway following the death of a neighbour’s child who ran onto the road and who was a similar age to his children at the time. The location of the new house was selected because it is a very peaceful site with a great view and is quiet. Secondly, the site has an ideal north-east aspect, is sheltered in winter and receives the cooler north-easterly breeze in summer. Thirdly, it is out of flood reach and is the most ideal location on the property for storing equipment and machinery as it is sheltered at all times.

23. Mr Moloney stated that he feels that his family’s lifestyle would be greatly affected by the new highway being so close to their house. The Applicants’ children and 19 grandchildren (at that time) have always played sport in front of the house and that has been a very enjoyable part of their lifestyle. The Applicants enjoy sitting out on the north-eastern side of the house enjoying a chat and the breeze, watching the children playing on the slope below the house. Mr Moloney stated that the proximity of the new highway will take that away and make that area quite unpleasant.

Cross-examination of Mr Moloney

24. A number of issues the subject of cross-examination were ultimately not relevant to resolution of the issues in the proceedings and have not been summarised.

25. Mr Moloney was asked about his time living in the dwelling on Lot 1 by the existing Pacific Highway. He did not dispute Mr Koikas’ (Applicants’ acoustic expert) estimate that that house was set back about 12 m from the road. Mr Moloney agreed that during the 10 years he lived in that house he was living in circumstances where there was a significant amount of traffic noise generated by trucks and cars on the existing highway. He was asked whether he lived with the doors and windows open and replied that they “used to keep the front shut sometimes”. This was “mostly because we had the kids, we didn’t have a fence. We kept them inside and out the back”. Mr Moloney agreed that he and his wife gave the children warnings about the dangers of the highway and told them not to go out the front. He was asked whether he left the windows open and replied that they did so occasionally “to get some air in the place”. Mr Moloney was asked whether he lived in that house quite happily notwithstanding that he was very close to the highway. He replied “well, it depends what you mean by happily but yeah”.

26. Mr Moloney was asked about his reasons for moving away from the dwelling on Lot 1 and agreed that the traffic noise was only one reason. He agreed that apart from keeping the front door closed for safety reasons he had used the house as a normal dwelling. He was asked about the death of his neighbour’s child that he had described in his statement and he agreed that he recalled the event quite vividly. He stated that the child was about three or four years old and at that time his seven children were all under ten years old.

27. Mr Moloney was asked about the current inhabitants of the dwelling on Lot 1 and stated that his daughter Louise lives there with her three children aged between eight years to three months old. He stated that they have lived there for approximately four or five years and before that different people rented the house on and off including his son Brendan for about one year before he was married. He agreed that since 1971 this house has been almost constantly occupied by people using it as a home. He agreed that since he and his wife moved out of the house it had not been added to and that the only acoustic treatment it had was aluminium and foam cladding that had been added when he lived there to deaden the noise. The windows have not been reglazed with thickened glass and the outside doors have not been treated. Mr Moloney was asked whether “the house is just used as a dwelling house in its present state exposed to all the noise from the highway”, to which he replied “I guess so, yes”.

28. Mr Moloney was asked about the flood prone nature of the land and one of the reasons given by him for moving to the main dwelling on the hill being that it is out of the flood area. It was put to Mr Moloney that the dwelling on Lot 1 was also out of the flood risk and he agreed except that in really big floods the garage underneath the house would flood. Mr Moloney was asked whether he had observed people building houses close to the highway in order to be as flood free as possible. Mr Moloney agreed that that would be one reason but stated that over the course of his lifetime the existing Pacific Highway had become much busier. When he went to school in Tyndale he rode his bike along the highway and he would sometimes not see a car the whole way. Mr Moloney stated that the traffic has increased in the 60 years since then and “it’s got to the stage now where you wouldn’t build a house there if you’re in your right mind”. Mr Moloney agreed that at the time he lived by the highway it was a busy road, but he stated when he looks back on it now, it was not very busy. Mr Moloney agreed that notwithstanding the growth in traffic today the house by the highway is continuing to be lived in by members of his own family.

29. It was put to Mr Moloney that it is not a disadvantage for a cane farm to have a frontage to the highway due to the trucks coming to collect the cane. Mr Moloney stated that it is neither an advantage nor a disadvantage as the mill contracts to collect the cane and the cost to the producer of collecting the cane do not depend on the location of the cane pad.

30. Mr Moloney was asked about the research he undertakes before purchasing cane land and he agreed that he looks at the quality of the land when determining what price to pay. If he was considering purchasing a neighbour’s land within the local cane farming cooperative that the neighbour could ask the mill for a record of the historical tonnage produced. Mr Moloney agreed that the Clarence Valley (where the subject land is located) is the southern extremity of where cane is grown in New South Wales and that cane is grown all the way up to far north Queensland. In the northern regions cane is harvested annually unlike in the Clarence Valley where it is harvested every two years. Mr Moloney also agreed that along the Pacific Highway up to Queensland there is a lot of cane land with a frontage to the Pacific Highway. He was asked if someone wanted to buy cane land and that land fronted the highway, would they want to know whether it is good land for growing cane. He stated “well, I guess so, yeah”.

31. Mr Moloney was asked whether the productivity of his land either side of the new highway will be affected by the road. He replied that he did not know and that it “depends on hydrology and all that sort of stuff. Like we’re assured that it’ll be – can’t do – have to wait and see what happens there”. He was asked whether the noise and visual effect of the vehicles on the road would affect the productivity of his land, to which he replied “it shouldn’t worry the cane”. He agreed that if land came up for sale which abutted the new highway in two or three years’ time and it was good cane land and he had the money he might consider buying it. The fact that the land was right next to the highway would not bother him one way or the other in terms of getting a return from cane.

32. Regarding the proposed location of a replacement dwelling, Mr Moloney agreed that he chose that location because he believed it would be a much superior location where he would escape the traffic noise. He was asked whether he had spoken to Mr Koikas about the location to which he replied “yeah, I think I’ve spoken to him the other day about it”. He confirmed that the first time he had spoken to Mr Koikas about the acoustic environment of a proposed replacement home was at the on-site view. He stated that he had not needed Mr Koikas’ advice as he had spoken to a neighbour who lived near the proposed location and that the RMS had done testing at the neighbour’s house and there was a lot less noise.

33. It was put to Mr Moloney that if he was told that the location of a proposed replacement dwelling did not give much acoustic improvement from the highway noise, he would not move from his existing home. Mr Moloney stated that it would have to be worthwhile and if not there would be no point moving. Mr Moloney was asked about his reasons for wanting to move to a replacement dwelling. He replied that “traffic noise is the big one. There’s also visual, to get away from that area, recreational area, to maintain some – better privacy. That sort of thing as well”. Mr Moloney was asked if there was no material acoustic benefit in moving whether he would not bother moving and would put up with the other issues. He stated that it would depend on how much the noise difference would be. Mr Moloney was asked to assume that the traffic noise was not a problem and then asked in that case whether the view of the highway itself would be something that would cause him to move. He replied that “what I had is what I would still like to have” and agreed that he wanted to try and reinstate his situation before the acquisition as much as possible. Mr Moloney was asked about his reaction to the new highway in terms of the way it looks and he replied that it is an eyesore. He was asked whether he could put up with it if he had to and replied that he does not have a choice. It was put to Mr Moloney that he lived in the dwelling on Lot 1 12 m from the existing highway for over 10 years and that the proximity to the road never compelled him to move. Mr Moloney replied that it was the reason to move finally and that it took him a long time to get into a financial position to build a new house. Mr Moloney was asked whether he had considered planting vegetation to screen the visual impact of the new highway. He replied that it would be possible over time and that he hoped to do so if he stayed in the main dwelling.

34. Regarding the impact of the highway on his lifestyle, Mr Moloney was asked about his concerns for its effect on the area where his children and grandchildren play. Mr Moloney stated that this area around the main dwelling will remain but there will not be visual or acoustic privacy. He stated that the garden on the other side of the main dwelling is not big enough to play cricket or football.

35. Mr Moloney was asked about the plans for demolishing or decommissioning the main dwelling and stated that he had not discussed the possibility of using it as a rural workers’ dwelling with his town planner. On the assumption that the house could stay in its existing state as a rural workers’ dwelling Mr Moloney agreed that he would not want to demolish it and that it would be occupied by someone who worked on the farm.

Re-examination of Mr Moloney

36. Mr Moloney was asked about what he would do with the money that he would receive as a result of the compulsory acquisition. He said that he would first put it in the bank then “search with enthusiasm for suitable land”. When asked why he had not sought development consent for a replacement dwelling on Home Farm, Mr Moloney stated that he was awaiting a clear outcome as to what he might be able to do with the acquisition money.

37. Mr Moloney was asked why his daughter lives in the dwelling on Lot 1. He stated that his daughter helps to look after Mrs Moloney who has Alzheimer’s disease and lives in the main dwelling.

Affidavit of Mr Green

38. Mr Green Infrastructure Property Manager of the Northern Region at the RMS swore an affidavit dated 14 November 2016. Mr Green manages and oversees the property-related aspects of the design, development and implementation of major road projects which the RMS undertakes including upgrading the Pacific Highway. Mr Green oversaw the land acquisitions for the project the subject of these proceedings. In his affidavit Mr Green attests to instructing his staff to conduct searches of the RMS’ business records for other upgrade projects to identify dwellings that were within approximately 200 m of the road reserve of the new highway. The 17 identified properties were described by Mr Green as “case examples”. Mr Green instructed his staff to review the RMS’ documents for each case example and to prepare an aerial photograph of each showing the location of the dwelling in relation to the road reserve. A software program calculated the distance from the dwellings to the road reserve and superimposed these on the aerial photographs. Exhibited to his affidavit were documents associated with the case examples, being the title and deposited plans, noise data from the EIS for the upgrade projects, information about noise mitigation works which the RMS carried out on the dwellings and aerial photographs.

Cross-examination of Mr Green

39. Mr Green was asked about the criteria used to identify “case examples”. He stated that 200 m was chosen as this was the approximate distance between the new highway and the main dwelling on Home Farm. Mr Green was asked about case example 8 (Lot 23 DP1140279) where land including the house was acquired and the house was rebuilt away from the road. He was also asked about case example 17 (Lot 100 DP115011) where development consent was granted for the erection of a new house and demolition of the existing house. He clarified his knowledge of these properties in response to these questions.

Sugarcane experts

40. Mr McGuire for the Applicants and Dr Kingston for the RMS both prepared expert reports dated 18 March 2016. They also prepared a joint report dated 1 April 2016. The experts agreed all matters that they were requested to address in the joint report. As a result of agreements reached between the parties during the course of these proceedings many of these matters are no longer relevant.

41. Regarding the residual 4.46 ha of land on Watts Farm the experts agreed that it is not suitable for standalone cane production. This area is isolated from other productive land. Use of a drainage pump for such a small area, even if surface drainage was not an issue, would not be practical. As to whether the residual land could be used productively for anything else, it is not suitable for mechanised agriculture due to the short row length and drainage issues. Dr Kingston indicated pasture as a possible use. The experts agreed that in the absence of a drainage pump or adjacent high ground there would be no dry refuge for grazing animals particularly in the event of floods.

42. Mr McGuire provided written advice to the valuers in these proceedings dated 26 May 2016 entitled “Comparison of Moloneys Home Farm, Watts Farm and 100 Byrons Lane”. This document became Annexure 1 to the valuers’ joint report. In Mr McGuire’s opinion the productivity of cane farms varies under the influence of the following factors:

1. management ability and skills of the farmer;

2. capital outlays to improve drainage and reduce flood impacts;

3. willingness of the farmer to spend on farm inputs such as disease-free planting material;

4. availability of labour at critical times;

5. length of the comparison period and climate (especially major events such as floods over that period).

43. Under the heading “Productivity” Mr McGuire noted that all three farms grow mostly two year cane but that grouping harvest data into two year periods is arbitrary and not done by staff of the sugar mills who analyse data for the sugar industry. He stated that a more appropriate method is to average total tonnes produced per hectare harvested over the period in question. He then tabulated the productivity data for the three farms (Home Farm, Watts Farm and 100 Byrons Lane) over the 12 year period from 2004 to 2015. I have summarised his comparison in the following table:

Productivity data 2004 – 2015

Home Farm	Watts Farm	100 Byrons Lane
Total tonnes harvested (t)	55,929.6	8,647.6	13,972.5
Total hectares harvested (ha)	405.2	66.5	130.5
Average t/ha harvested	138	130	107.1
Average t/ha harvested compared to Home Farm	100%	94%	78%

It is noted that there were three floods in the period – 2009, 2011 and 2013 – and that this was abnormal. Mr McGuire provided an analysis of the flood-free years between 2004 and 2008 with Home Farm described as 100% (average tonnes/ha harvested), Watts Farm 89% and 100 Byrons Lane 76%.

44. The inference the Court draws from these two data sets is that despite the flood events there is no significant difference between the productivity of Watts Farm and 100 Byrons Lane relative to Home Farm over the 12 year period from 2004 to 2015.

Acoustic experts

First joint report 4 March 2016

45. The first joint report of Mr Koikas for the Applicants and Mr Evans for the RMS addressed the existing noise environment of the main dwelling on Home Farm, the noise assessment criteria, noise modelling parameters, predicted “no build” noise levels, predicted “build” noise levels, the impact of the project and noise mitigation. The experts agreed that the existing levels of road traffic noise at the main dwelling are relatively low. While it is possible to hear traffic noise from the existing highway at times it was agreed that the noise levels are lower than those used to define existing traffic noise exposure in the NSW Road Noise Policy (RNP). The experts agreed that the dwelling on Lot 1 is exposed to significant levels of traffic noise that would be classified as “acute” under the RNP.

45. On the applicable noise assessment criteria, the experts agreed that due to the low level of existing road traffic noise, it is appropriate to adopt the “New Road” criteria from the RNP. The applicable external road traffic noise criteria when measured one metre from the building façade is 55 dB(A) LAeq, 15h for the daytime period (7am-10pm) and 50 dB(A) LAeq, 9h for the night-time period (10pm-7am). They agree that the project will result in an increase in traffic noise levels and therefore the Relative Increase Criteria are relevant. The Relative Increase Criteria state that road traffic noise levels at a residence should not increase as a result of a project by more than 12 dB (day or night) for a given timeframe. Mr Koikas’ opinion was that a relative increase of 12 dB(A) would be perceived by a person to be more than twice as loud and that that is an unacceptable increase. Mr Evans’ opinion was that the Relative Increase Criteria are primarily intended for use in very quiet environments where noise from a new road may still comply with the “New Road” criteria but would still result in a significant increase. Consideration of the Relative Increase Criteria is warranted but not the controlling factor for determining whether acoustic mitigation is required.

46. The experts agreed that the RNP does not specify desirable internal noise levels for existing residences, although for new residential developments near busy roads it recommends reference be made to the State Environmental Planning Policy (Infrastructure) 2007 (Infrastructure SEPP). Clause 102(3) of the Infrastructure SEPP recommends that internal noise levels in new dwellings near major roads should be no higher than 35 dB(A) LAeq at night inside bedrooms and 40 dB(A) LAeq at all times inside other habitable rooms. Mr Koikas did not consider that the Infrastructure SEPP criteria are relevant as the Applicants’ main dwelling is not a new house. Mr Evans agreed that the criteria are not applicable but considers that they provide an indication of what relevant authorities consider to be suitable internal traffic noise levels for residences.

47. The experts agreed that another factor that required consideration is sleep disturbance. The RNP concludes that maximum internal noise levels below 50-55 dB(A) are unlikely to awaken people from sleep and that one or two noise events per night with maximum internal noise levels of 65-70 dB(A) are not likely to affect health and wellbeing significantly. The RNP also references a World Health Organisation (WHO) report from 1999 that recommends a maximum internal noise level (Lmax) of 45 dB(A) Lmax. Mr Koikas’ opinion was that the research on sleep disturbance is incomplete and therefore more stringent criteria similar to the WHO criteria should be adopted. Mr Evans stated that internal maximum noise levels vary and he has adopted an internal sleep disturbance criterion of 50 dB(A) Lmax for the purposes of this case.

48. The experts agreed on the noise modelling parameters such as the distance from the main dwelling to the new highway and the speed limit. They adopted a road surface correction of +3.5 dB for cars and +1 dB for trucks for the carriageway and -2.2 dB for cars and -4.3 dB for trucks on the off-ramp. The experts also agreed the predicted “no build” noise levels. In 2026 (10 years from the expected completion of the new Pacific Highway) Mr Koikas predicted a noise level of 46 dB(A) LAeq, 9h at the most exposed ground floor façade of the main dwelling. Mr Evans predicted a noise level of 47 dB(A) LAeq, 9h and they agreed that the 1 dB(A) difference is within modelling error tolerances.

49. On the predicted “as built” noise levels the experts agreed that the project will result in road traffic noise levels that are higher than existing levels and will exceed the “New Road” criteria. Mr Koikas predicted a noise level of 60 dB(A) LAeq, 9h in 2026, an increase of 15-16 dB(A) above the corresponding “no build” noise level. Mr Evans predicted a noise level of 57 dB(A) LAeq, 9h, a 10 dB(A) increase above the corresponding “no build” level. Mr Koikas was of the opinion that the 3 dB difference in noise predictions between him and Mr Evans equates to a doubling of traffic volumes.

50. The experts agreed that increased traffic noise levels as a result of the project perceivable at the main dwelling will exceed the RNP. They also agree that the project will significantly reduce road traffic noise levels at the dwelling on Lot 1 due to the redirection of traffic to the new Pacific Highway. Mr Koikas said that applying the 12 dB(A) allowance recommended by the RNP per the Relative Noise Criteria is unacceptable and not mandatory or enforceable.

51. On noise mitigation the experts agreed that low surface noise treatments to the new highway may be possible although the reduction achieved at the main dwelling would be only just perceptible. They also agreed that noise barriers are not reasonable or feasible but acoustic treatments should be applied to the residence to achieve internal noise levels consistent with the Infrastructure SEPP. Mr Koikas reiterated his opinion that it is unacceptable to apply the Infrastructure SEPP recommended indoor criteria as they are not relevant to existing dwellings.

52. Mr Koikas stated that even with the application of acoustic treatments the impact of the new highway will be unacceptable because reducing traffic noise levels in indoor spaces does not result in a reduction of traffic noise in outdoor spaces. The Applicants advised Mr Koikas that they use the indoor and outdoor areas as one connected space for recreational and dining purposes. Mr Koikas was of the opinion that the main dwelling should be relocated. Mr Evans agreed that there will be an impact from the new highway on the ambient noise environment at the main dwelling and that this warrants noise mitigation. His opinion differs from Mr Koikas in that he thinks the most appropriate form of mitigation is acoustic treatment. Mr Evans’ opinion was that with appropriate treatments to the main dwelling suitable internal noise levels can be achieved that are consistent with the recommendations of the Infrastructure SEPP for new residences.

Supplementary joint report 10 May 2016 (acoustic treatment of main dwelling)

54. Following the first joint report Mr Koikas issued a supplementary report on 31 March 2016 detailing the acoustic treatments to the main dwelling that were in his opinion necessary to obtain a suitable level of internal acoustic amenity. Mr Evans reviewed this supplementary report and issued his response on 2 May 2016. A supplementary joint conference was held to identify areas of agreement and disagreement between the experts which resulted in a supplementary joint report dated 10 May 2016.

55. In this report the experts agreed that acoustic treatments can be provided to the main dwelling to provide internal noise levels that are consistent with the recommendations in Australian Standard AS 2107:2000 and the Infrastructure SEPP and for maximum noise levels for reducing the chance of sleep disturbance. The experts agreed on the glazing required to be fitted, the acoustic seals to the front door, the insulation and loaded vinyl to be installed and that mechanical ventilation would be required in all bedrooms and living rooms. They agreed that the garage, bathrooms, laundries and toilets would not require acoustic treatment.

56. The experts stated that acoustic treatments would not influence the traffic noise levels outside the main dwelling, which will increase as a result of the project. Mr Evans’ opinion was that with the new highway operational daytime traffic noise levels in the outdoor areas adjacent to the main dwelling will be consistent with the recommended level in the RNP for passive recreation areas of 55 dB(A) LAeq, 15h. He stated that while this criterion is not strictly applicable to residential properties, the RNP specifies this level for areas characterised by low noise activities that are compromised by external noise intrusion. Given the location of the main dwelling on rural land with noisy daytime activities, Mr Evans considered it reasonable that the outdoor areas have daytime noise levels consistent with the RNP passive recreation area limit. Mr Koikas’ opinion was that use of the Applicants’ outdoor space will dramatically diminish due to the dynamic contrasting levels of traffic noise. He stated that the distant drone of traffic noise they currently hear will become more intrusive and alarming when the highway is brought closer.

Fourth joint report 12 December 2016 (location of replacement dwelling)

57. During the Court visit to Home Farm the location of a replacement dwelling was discussed. It was decided that the acoustic experts should determine whether a replacement dwelling in the location proposed by the Applicants would require acoustic treatment to ameliorate road traffic noise. Consequently the experts prepared a fourth joint report dated 12 December 2016.

58. The experts based their assessment on the RNP standards for external measurements (50 dB(A) LAeq, 15h (daytime) and 55 dB(A) LAeq, 9h (night-time)) and the Infrastructure SEPP standards for internal measurements (40 dB(A) LAeq, 15h inside living rooms and 35 dB(A) LAeq, 9h inside bedrooms). The experts agreed that with windows open it is typical for there to be a 10 dB(A) difference between external and internal noise levels. Although they did not agree on the need for a replacement house, the experts agreed for the purposes of the report that a replacement dwelling would be assumed to be a double storey house of the same scale as the main dwelling on Home Farm.

59. The predicted noise levels at the proposed location for a replacement dwelling are agreed. The experts agreed that a replacement dwelling would require some level of acoustic treatment for bedrooms with windows located on the northern, eastern and western façades in order to achieve the internal noise criteria. Any living room windows and doors on the northern and eastern façades may also require treatment. They agreed that the treatment would not be as significant as that which would be required for the main dwelling but would involve a minimum 6.38 mm glazing and window and/or door seals. Doors and windows would also be required to be kept closed on those façades in order for the internal noise criteria to be achieved. If the layout was changed so that bedrooms and living spaces were on the western and southern façades, the building would not need any acoustic type windows.

60. Appendix D to the report contained noise contour maps and predictions prepared by Mr Evans. The contour maps showed the predicted night-time road traffic noise levels at the proposed location for the replacement dwelling for the period of project opening and in 2026.

Cross-examination of Mr Evans

61. Mr Evans was cross-examined about the RNP and agreed that the road noise criteria for Home Farm is exceeded. Mr Evans agreed that the condition of the highway project approval referring to the RNP specified an objective of not exceeding the RNP. He accepted that the project was not designed and operated so as not to exceed the road noise criteria but stated that one can still have the objective of complying even if that objective is not always met. Mr Evans agreed that the assessment criteria in the RNP are not mandatory but provide a basis for establishing noise levels that can be incorporated into conditions and planning approvals or licences issued by the Environment Protection Authority. Mr Evans agreed that in his experience the RNP is not used as a guide to assist in determining whether a road project should be approved and that a failure to comply with the RNP would not lead to a refusal of development consent.

62. Mr Evans was asked about his evidence that the current noise environment at the main dwelling is one that he would describe as not being controlled by road noise. Mr Evans qualified this by stating that this was his opinion of the daytime noise environment and that he had visited Home Farm one morning between 6:00am and 7:00am. At that time the road traffic noise was generally controlling the noise level. He agreed that he would maintain his description that the overall noise level is relatively low but stated that the night-time environment can be controlled by road noise at the moment. In Mr Evans’ opinion once the new highway is built the environment will be more likely to be dominated by road noise but there are other noises from activities such as farming that could be louder in some circumstances. He did not agree that the current noise environment is not dominated by noise as traffic noise can be heard from the existing highway.

63. Regarding the characteristics of noise, Mr Evans agreed that at close distances to a noise source the peaks can be heard loudly. Individual peaks reduce in their subjective and measured loudness when the noise source is further away. He agreed that at a certain distance the significance of individual moments is lost and it becomes more of a background noise. Mr Evans agreed that the peaks in noise contribute in part to sleep disturbance. Mr Evans was asked about the distance-based criteria in the EIS for the highway project and agreed that the main dwelling is so far away from the existing road that it would not have been assessed for noise impacts according to the EIS or RNP parameters.

64. Mr Evans was asked about how the criteria in the RNP of 55 dB(A) LAeq, 15h (daytime) and 50 dB(A) LAeq, 9h (night-time) came to be identified. He agreed that the criteria were designed for the point at which 10% of the exposed population was “highly annoyed”. Mr Evans agreed that if the noise was louder than the RNP criteria then more of the population would become highly annoyed. He also agreed that the social studies though which the criteria were identified were conducted on people who had been exposed to road traffic noise “for some time”. Several noise studies concluded that people without previous exposure found noise “highly annoying” at a lower level. Mr Evans agreed with the results of those studies that in an environment completely new to noise, 10% of the population would find traffic noise highly annoying at around 46-47 dB(A) LAeq, 15h rather than 55 dB(A) LAeq, 15h per the RNP.

65. Regarding the noise modelling, Mr Evans agreed that an assumption is made that the vehicles travelling on the road are adhering to the speed limit. He agreed that some cars would be speeding on the new highway and that speed contributes to noise. He agreed that vehicles travelling faster are noisier. Mr Evans agreed that if the treatment to the road surface changes it can have measurable differences to noise output. Mr Evans was asked about the assumption adopted by him and Mr Koikas that the southern off-ramp would be used by 1% of the total vehicles travelling on the new highway. He agreed that this assumption could be wrong and that if more than 1% of trucks use the southern off-ramp this could create a significant impact on the noise level. Mr Evans stated that it would have to be a very high number of vehicles before it had a noticeable impact on the predicted noise levels. Mr Evans was asked about other assumptions in the modelling and agreed that it assumes neutral weather conditions but that weather can affect a receiver’s perception of noise. He agreed that wind direction and a wet road can increase the noise from the traffic. Mr Evans stated that due to noise propagation over distance the variation due to weather conditions would have less of an impact with the new highway compared to the existing highway as the variation is lower where the road is closer to a receiver, in this case the main dwelling on Home Farm.

66. Mr Evans agreed that because there was not a specific control for the external noise levels at the main dwelling he had used the passive recreation control in the RNP as a surrogate. He also agreed that the RNP recognises potential impacts to areas outside the building and that the criteria in the RNP are attempting to identify controls applicable to external areas.

67. Mr Evans was asked about the reorientation of a proposed replacement dwelling and agreed that it would mean exposing a shorter façade to the most significant noise source. The main dwelling faces towards the northeast and overlooks the cane fields on Home Farm. A proposed orientation for a replacement dwelling towards the east was considered by the experts in their fourth joint report dated 12 December 2016. Mr Evans also accepted and agreed with the concept of grazing as permitting a greater than 10 dB(A) noise reduction if the sound source grazes rather than hits the surface squarely. He also agreed that it provides for some acoustic shadow to the sides and rear of the building because of its orientation. Mr Evans agreed that the surrogate passive recreation noise level he adopted of 55 dB(A) LAeq, 15h for the outdoor areas includes a façade reflection factor of +2.5 dB(A). Mr Evans was asked about the predicted noise levels at the proposed dwelling location in 2026 compared to the main dwelling in 2026. He agreed that the proposed replacement dwelling would comply with the external noise passive recreation criteria. Mr Evans agreed that on the southern façade of the proposed replacement dwelling there was the potential for windows to be left open and for the internal noise levels to still comply with the controls. In his opinion a 15 dB(A) reduction in noise due to grazing overstates its effect.

68. It was put to Mr Evans that a 2-3 dB increase is about what can be perceived. Due to the logarithmic scale the difference between 47 dB and 58 dB is more than a doubling of the noise level. He agreed that about 2-3 dB is perceptible and that +11 dB was slightly more than a doubling of the noise level. It was put to Mr Evans that the difference between 7-11 dB is significant. He replied that it is noticeable but not significant. He agreed that it would be a change in noise to which different people would react in different ways. Mr Evans was asked if a change from 47-54 dB might not be highly annoying compared to a change from 47-58 dB. He stated that there would be some people who would be highly annoyed by one, but not the other, but that there would still be a lot of people that would be highly annoyed by it.

Cross-examination of Mr Koikas

69. It was put to Mr Koikas that he does not agree with the RNP. Mr Koikas replied that he does not agree with the policy insofar as it is applied to the main dwelling on Home Farm as he does not believe it considers the circumstances of the highway being moved so much closer to the house. It was also put to Mr Koikas that he does not consider that the Infrastructure SEPP applies. He confirmed his opinion that the Infrastructure SEPP does not apply to a new road proposed next to an existing dwelling but that it does apply to a new dwelling near an existing road. Mr Koikas agreed that in either situation, in the “after” scenario there is the same situation, being a road and a dwelling. It is material that in one scenario there is a new dwelling whereas in the other there is an existing dwelling. In Mr Koikas’ opinion if indoor noise levels are compliant but external levels are not then it is necessary to explore other ways of achieving a reasonable amenity. His opinion that the optimum solution is to relocate the dwelling was based on loss of amenity. He did not agree that this was in his instructions but did say that moving the dwelling so that the Applicants’ existing amenity could be reinstated was a solution.

Quantity surveying evidence

70. Mr Milner quantity surveyor was retained by the Applicants and prepared a report dated 20 November 2015 addressing the cost of a replacement dwelling and a supplementary report dated 7 April 2016 addressing acoustic mitigation and a replacement dwelling. Mr Makin quantity surveyor for the RMS prepared a report dated 18 March 2016 and a supplementary report dated 2 May 2016. In their joint report dated 24 May 2016 the experts agreed the cost of replacing the main dwelling on a like-for-like basis was $804,250 including GST. Following the further supplementary report of Mr Makin dated 31 October 2016 estimating the cost of a project home, the experts prepared a supplementary joint report dated 5 December 2016. The experts agreed that the estimated cost of providing a replacement dwelling to be built by a project home builder of equivalent size and amenity as the main dwelling would be $675,053 including GST.

Threshold valuation issues for Home Farm

71. There are a number of threshold issues which should be identified before considering the valuation evidence concerning Home Farm in detail. These stem in part from the unusual claim for disturbance of the Applicants for the complete costs of building a replacement dwelling on the residue land when there is an existing dwelling on the residue land occupied by the Applicants. The Applicants maintain relying on Tolsonv Roads and Maritime Services (2014) 201 LGERA 367; [2014] NSWCA 161 per Basten JA at [83] that the disturbance claims under s 55(d) are to be considered separately from claims under ss 55(a), (b), (c) and (f) which can be offset against each other. As will be discussed below the approach of the valuers to the determination of compensation may mean such a distinction in this case is not straightforward.

72. The valuers agreed that the appropriate method of valuation to determine the market value of Home Farm was the “before and after” approach, a method commonly used when there has been a partial acquisition of land. This classically involves taking the market value of the whole parcel at the time of resumption and then the residue land after acquisition. The difference is the ascertained amount of compensation for the market value of the acquired land while severance damage and enhancement of the residue are comprehended without any necessity for specification, see Gosford Shire Council v Green (1980) 48 LGRA 201 at 208 and MIR Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW [2006] NSWCA 314 at [46].

Objective consideration in “after” scenario required

73. In the “before and after” method objective evaluation of the matters the hypothetical parties are assumed to take into account in determining what amount they will pay for and accept in a hypothetical sale of the land is considered. The parties’ valuers have agreed the value of Home Farm in the “before” scenario. As to the “after” value, the sale of the residue land must be considered as in Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 as a transaction in which the buyer and seller must be attributed with knowledge of all matters that affect its value, either advantageously or prejudicially including its situation, character, quality, proximity to conveniences or inconveniences and surrounding features. The value is determined by forming an opinion as to what a willing purchaser would pay and what a not unwilling vendor would receive for the property, see Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413; [1999] HCA 25 at 436; Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 at 276; Coundrelis v Roads and Traffic Authority of NSW [2008] NSWLEC 72 at [9].

74. The determination of value is objectively made and does not depend on the subjective views or preferences of the owner or of persons interested in the land from time to time, see The Minister v New South Wales Aerated Water and Confectionary Co Ltd (1916) 22 CLR 56; [1916] HCA 48 referred to in Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307; [2016] NSWCA 7 at [24] and Leichhardt Council v Roads and Traffic Authority (NSW) (2006) 149 LGERA 439; [2006] NSWCA 353 where Spigelman CJ stated at [42]:

Section 56(1) is an objective test to which considerations entirely personal to the owner are not material.

75. In Allandale Basten JA with whom Ward JA agreed stated at [24] that the principle in Aerated Water applied to the determination of market value of land under ss 55(a) and (f) of the Just Terms Act.

Hypothetical parties assumed to be informed by acoustic reports

76. At the date of acquisition there were two dwellings erected on Home Farm. The main dwelling was occupied by the Applicants and the dwelling on Lot 1 was occupied by their daughter and her family. There was evidence of use of the curtilage of the main dwelling for recreation by the Applicants’ family in Mr Moloney’s affidavit and oral evidence summarised above in pars 23 and 34. At issue is the objective advice that a prudent hypothetical purchaser in particular would be considered to receive in the “after” scenario. The nature of this advice is determined in the usual way by the Court considering competing advice to determine what is most appropriate, see Caruso at [4].

77. The Court of Appeal in Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66 at [20] upheld the trial judge’s finding that a prudent hypothetical purchaser would obtain an acoustic report on the impact of an upgraded highway on the residue land and main house. A similar approach to the acoustic evidence in this matter is warranted given the close proximity of the new highway to the main dwelling. The objective findings of the acoustic experts summarised above in par 45 and following in relation to noise impacts in the “before and after” situation can be assumed to be known to a prudent hypothetical purchaser in particular. The experts generally agreed about the predicted noise impacts on the Applicants’ main dwelling and curtilage as set out in the first joint report summarised above in pars 45-53. They agreed how the RNP would apply to noise impact assessment (pars 45, 46 above) at the main dwelling. Their minor differences were explained by them as resulting from the application of different algorithms. In those circumstances it is not necessary that I choose between their respective approaches. That advice informs the prudent hypothetical vendor and purchaser under the assumptions necessary for the Spencer test. The informed purchaser will be aware that the amenity of the main dwelling and surrounds in the “after” scenario will be adversely affected by substantial noise from the new highway.

78. Other impacts of the new highway on the main dwelling which the hypothetical purchaser will be aware of in the “after” scenario are lack of privacy and the view from the front of the main dwelling being dominated by a six lane highway in an otherwise rural outlook. Such a purchaser is likely to consider a substantial reduction in the value of the main dwelling is warranted in these circumstances.

79. It is necessary to be careful in identifying what evidence should be attributed to the incoming hypothetical purchaser. The evidence of Mr Koikas in particular addresses the acoustic evidence from the Applicants’ perspective including what changes they are likely to experience once the highway upgrade is complete and what is a reasonable reaction to those changes, namely moving to another dwelling on the residue land. The Applicants’ experience is different from that of the assumed incoming hypothetical purchaser as it is influenced by their personal longstanding experience of Home Farm.

80. It was agreed by the acoustic experts that the noise environment of the dwelling on Lot 1 will improve due to the reduction of traffic on the existing highway after the new highway opens.

Impact of public purpose on use of Home Farm in “after” scenario – is main dwelling on Home Farm uninhabitable as a result of public purpose?

81. Whether or not the main dwelling on Home Farm where the Applicants presently live is rendered uninhabitable by the public purpose due to noise impacts needs to be considered as that is relevant to the assumptions made by a prudent hypothetical purchaser in particular. A substantial amount of evidence was adduced from the acoustic experts Mr Koikas and Mr Evans concerning the impacts of road noise on the main dwelling. This is summarised above at par 45 and following.

82. The experts generally agree that the main dwelling can be acoustically treated to comply with the internal RNP goals. There are no explicit external noise goals in the RNP. Mr Evans commendably assessed the external levels by reference to the passive recreation levels intended for parks identified in the RNP which shows that the outdoor areas adjacent to the main dwelling on Home Farm would be consistent with these levels, see par 56 above. The main dwelling will not be uninhabitable (meaning of little value for valuation purposes) in terms of noise as a result of the public purpose in the “after” scenario. In addition, the amenity of any inhabitants will be reduced in their use of the area around the house for recreation purposes. That is the relevant consideration the prudent hypothetical parties must be assumed to be aware of.

Acoustic treatment of main dwelling on Home Farm assumed

83. It is a condition of the planning approval for the upgrade of the Pacific Highway between Woolgoolga and Ballina that acoustic treatment of identified residences be carried out by the RMS. The main dwelling on Home Farm is one such residence as identified in Chapter 15 of the EIS for the project. According to Condition D28 of the project approval, the treatment works will be reviewed within 12 months of the operation of the new highway and further work will be carried out to improve noise mitigation if required.

84. Notwithstanding these obligations the parties have agreed that the RMS would carry out noise mitigation works to the main dwelling on Home Farm being work agreed between the acoustic experts in their second joint report as well as installation of solar power to run the mechanical ventilation system forming part of the acoustic measures. The parties finalised a deed to give effect to this agreement which was provided to the Court. The Court was therefore requested to make no order for the award of compensation for these works. A prudent hypothetical purchaser would assume that these works would be carried out to the main dwelling at no cost to the owner given such treatment is a condition of development consent for the new highway.

Application of “before and after” method in this case – any relationship between s 55(f) claim and disbursement claim for replacement dwelling under s 55(d)?

85. As will be set out below, the valuers departed from the simple “before and after” approach in that they separately determined the market value of Home Farm on the one hand and each of the building improvements (fixtures) on the other. The “before” value of Home Farm at the date of acquisition was calculated by the summation of the market value of the land and the value of the improvements. The assumption was that this would equal the overall market value of the property sold in the hypothetical sale required by the definition of “market value” in s 56(1) in the “before” scenario and the value of the residue in the “after” scenario.

86. An issue that arises in light of the Applicant’s disbursement claim for a replacement dwelling including a new road and services on the residue land is whether the “before and after” method otherwise encapsulates such a claim as part of any loss of value of the residue land as provided for in s 55(f).

87. Peak considered the assessment of compensation for the partial compulsory acquisition of a cattle stud. Amongst other farm improvements, the property contained a residence which before acquisition was situated about 90 m from the old highway and after acquisition was 35 m closer to the boundary of the realigned highway. At first instance it was held that the dwelling was rendered uninhabitable and practically valueless by the public purpose due to the noise impacts from the upgraded highway. No claim was made for the costs of building a new house to replace the existing house on the residue land. The costs of relocation to a new home were claimed as disbursement under s 59(f). I note that s 59(1)(f) is in identical terms to s 59(f). All references to s 59(f) are to be taken to be equivalent to s 59(1)(f). Compensation was assessed by allowing a reduction of the “before” value of the residence by an amount which represented almost its whole “before” value. The “after” value of the residence was fixed at $10,000. The “before” value was agreed.

88. In McDonald v Roads & Traffic Authority of NSW (2009) 169 LGERA 352; [2009] NSWLEC 105, a partial acquisition of land, the main dwelling was acquired by the resuming authority. The valuers adopted the “before and after” approach to determine the market value of the acquired land under s 55(a). The market value of the parent land before acquisition was determined on the basis of direct comparable sales evidence and the value of the residue land in the “after” was agreed. The Court of Appeal in Roads & Traffic Authority of NSW v McDonald (2010) 175 LGERA 276; [2010] NSWCA 236 at [88] confirmed the “before and after” method as a valid approach to determine market value in the circumstances of that case. On appeal Tobias JA considered the “before and after” method and the separate claim for disturbance relying on s 59(f), referring to Peak. In both McDonald and Peak the applicants claimed some or all of the costs related to replacing a dwelling such as a new road, a bridge to provide access to a new house, the connection of services, new fencing and the costs of making a development application. No claim for the cost of building a replacement house on the residue land was made. That suggests that the applicants in those cases considered that the value of the dwelling to be replaced was otherwise encapsulated in the claim for compensation being made or was not available to be claimed. The costs claimed as disbursements were awarded by the trial judge in McDonald and upheld on appeal. In Peak the Court of Appeal recognised a proper basis existed for such claims and remitted the matter to the Court for further determination. The parties resolved the matter without the need for a further hearing.

89. The summation “before and after” method used by the valuers to determine compensation under ss 55(a) and (f) in the present case is similar to that adopted in Peak and McDonald. I will return to the issue identified in this section when I consider the disbursement claim below commencing at par 247. The issue also arises in the assumptions made by the valuers in applying the “before and after” approach as I discuss below.

Market value of Home Farm (matter no 2016/154024)

Valuation evidence

90. Mr Frogley valuer for the Applicants and Mr Watt valuer for the RMS each provided separate valuation reports. Subsequently, they conferred and produced a joint expert report dated 29 June 2016.

91. The valuers agreed on the title particulars and areas of the parent parcel, the land acquired and the residue land, as follows:

Parent Parcel
Title	Area
Lot 1 DP 751389	19.83 ha
Lot 3 DP 751389	16.39 ha
Lot 4 DP 751389	16.39 ha
Lot 8 DP 751389	15.78 ha
Lot 50 DP 1040235	7.64 ha
Lot 51 DP 996917	7.64 ha
Total	83.67 ha
Acquired Land
Title	Area
Lot 700 DP 1199716	0.2861 ha
Lot 701 DP 1199716	6.909 ha
Lot 704 DP 1199716	1.37 ha
Lot 705 DP 1199716	0.7947 ha
Total	9.36 ha
Residue Land
Title	Area
Lot 1 DP 751389	19.83 ha
Lot 694 DP 1199716 (Pt Lot 4)	16.12 ha
Lot 695 DP 1199716 (Pt Lot 3)	9.46 ha
Lot 698 DP 1199716 (Pt Lot 50)	6.207 ha
Lot 699 DP 1199716 (Pt Lot 8)	14.98 ha
Lot 51 DP 996917	7.64 ha
Total	74.24 ha

92. The valuers agreed that Home Farm was zoned under the LEP partly RU1-Primary Production, RU2-Rural Landscape and SP2-Infrastructure, and that much of Home Farm is subject to the local council’s Flood Planning Policy (FPP). The valuers also agreed that had the zoning of Home Farm not been affected by the public purpose and the compulsory acquisition of the land acquired, the areas zoned SP2 would have been zoned RU1. This accords with the requirement of the Just Terms Act in the definition of “market value” in s 56 to disregard relevantly:

(a)   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.

93. No improvements on Home Farm were situated on the acquired land. The improvements on the residue land consist of:

• The dwelling on Lot 1 and garage on the land fronting the existing highway

• The main dwelling and garage on Lot 695

• Various farm sheds

• A large machinery shed beside the main dwelling

• Another machinery shed, carport, boat port and barn

94. The respective “before and after” value calculations were provided to the Court for Home Farm. The “before” scenario calculations were as follows:

Before
81.57 ha Cane	@ $15,000		$1,223,550
1.2 ha Creek	@ $5,000		$6,000
0.9 ha Bushland	@ $8,000		$7,200
83.67 ha	$1,236,750
Improvements
- Dwelling Lot 1	$70,000
- Older Ancillary	$16,000
- Main Dwelling	$242,500
- Rural Sheds	$115,000
TOTAL	$1,680,250

95. As can be seen in the table above the valuers agreed on the three land types present on Home Farm and their land value rate per hectare in the “before” scenario. The “before” value of the land was agreed at $1,236,750. While there was disagreement about the value of improvements during the hearing, the valuers have now agreed these as $443,500. Consequently, the total “before” value is $1,680,250. This is the price that would have been paid for Home Farm by a prudent hypothetical purchaser and accepted by a prudent hypothetical vendor within s 56(1) disregarding, inter alia, 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.

96. Comparable sales used by the valuers to value cane land in the “before” scenario do not need to be set out because the “before” value was agreed.

97. The parties’ valuers disagree about the value of the residue in the “after” scenario as identified in summary in the table below:

After	Watt		Frogley
72.84 ha Cane	@ $15,000	$1,092,600	19.83 ha @ $12,750	$252,833
54.08 ha @ $11,250	$608,400
0.5 ha Creek	@ $5,000	$2,500	0.2 ha @ $3,750	$750
0.9 ha Bushland	@ $8,000	$7,200	0.13 ha @ $6,000	$780
74.24 ha	$1,102,300	74.24 ha	$862,763
15% IA Lot 1
25% IA to Balance (parts lots 3, 4 etc)
Improvements
- Dwelling Lot 1	$90,000	$100,000
- Older Ancillary	$20,000	$12,000
- Main Dwelling	$170,000	As storage	$30,000
- Rural Sheds	$100,000	$97,500
TOTAL	$1,482,300	$1,102,263
Difference (Before/After ss 55(a) and (f) compensation)	$197,950	$577,987

98. For IA, Mr Frogley applies 25% to all land south of the new highway on Home Farm and 15% to all the land on the northern side of the new highway. Mr Frogley also reduces the value of the main dwelling from $242,500 in the “before” scenario to $30,000 as storage in the “after” scenario. This assumes that it is no longer to be used as a dwelling in the “after” scenario, reflecting the Applicants’ disbursement claim for a replacement dwelling.

99. Mr Watt considers there is IA only to the main dwelling and curtilage. Mr Watt’s oral evidence on the extent of the curtilage was:

For the Moloney residence the curtilage is the area bordered by the track that separates the machinery shed and the house that wraps around the back of the house, the cane field that's on the north western side of the house. So that encompasses the back yard where they join and extends down to the low point of the land which is the creek line if you like, or the small watercourse and that area is 4,400 to 4,500 square metres.

He reduced the value of the main dwelling from $242,500 to $170,000 on the assumption acoustic measures to reduce noise would be undertaken by the RMS.

100. Both valuers increase the value of the dwelling on Lot 1 (for different amounts) in recognition of its improved amenity in the “after” scenario: Mr Watt’s $70,000 “before” value increases to $90,000 and Mr Frogley’s $70,000 “before” value increases to $100,000.

290. As to outdoor noise levels at the main dwelling, Mr Evans’ opinion was that noise levels would be consistent with the RNP for passive recreation areas of 55 dB(A) LAeq, 15h and that this was a suitable benchmark (par 56). Mr Koikas did not consider the acoustic environment in the external areas around the house would be acceptable because of the dynamic contrasting levels of traffic noise due to the close proximity of the new highway.

291. Mr Evans considered that there is no objective basis to justify building another dwelling. Mr Evans’ opinion does not take into consideration the personal concerns of the Applicants related to necessary changes in lifestyle necessitated by the treatment of windows and doors and installation of air conditioning throughout the house. I accept that the noise attenuation measures will necessitate a substantial change in lifestyle in relation to the internal use of the main dwelling and affect the combined use of the internal and external areas by the Applicants and their family.

292. The RMS considered that the RNP is a reasonable objective instrument against which to measure the Applicants’ claim. The RNP criteria are based on worldwide research and are applied widely in Australia and overseas. A dwelling rendered conformable with the internal noise criteria is reasonably occupied according to the RMS. The RMS approach is in part to facilitate the important planning matter of where to locate a major highway. As the Applicant submitted the conditions of the project approval state in B28 that the project is to be designed and operated with the objective of not exceeding the road noise criteria in the RNP. The criteria are necessarily general to enable application in a wide range of contexts. They are used as an important guide, as is clear in the EIS and conditions for the new highway. They are not applied as standards which must be met, rather they are an objective to be achieved if possible. In the Applicants’ case the internal RNP criteria are exceeded and can only be met by acoustic treatment of the main dwelling. Failure to comply with the RNP does not result in the refusal of an application for approval of a highway as Mr Evans stated in his oral evidence. The RNP is not the sole measure by which to test acceptability of the acoustic environment to an individual as Mr Koikas’ evidence highlights.

293. The RMS did not engage directly with the Applicants’ case that their amenity and privacy in a rural environment will be badly affected by the new highway operating very close to their home. The purpose of the numerous case studies identified in Mr Green’s evidence summarised in pars 38-39 above is to show that a large number of dwellings are located near the upgraded highway in rural areas. That is undoubtedly the case as the drive along the new highway on the Court view demonstrated, as would any similar drive through similarly developed areas of NSW and beyond. The Court was directed to case studies 8 and 17 where landowners had moved their houses so that they are removed from highway noise. As the Applicants submitted, in the absence of details about each particular case it is difficult to draw conclusions about individual properties. I note that the purchasers of 100 Byrons Lane told Mr Watt they were intending to relocate their house away from the new highway. It is obvious but relevant to state that a large number of houses are located away from large multi-lane highways in rural environments.

294. The Respondent also emphasised the continued use of the dwelling on Lot 1 12 m from the busy existing highway since 1971, as confirmed by Mr Moloney in cross-examination (par 27). Mr Moloney was cross-examined about living next to the existing highway without noise attenuation measures or a fence (par 25). The existing highway became much busier over time (par 28). As the RMS submitted, a large number of people live next to highways. It is reasonable to conclude that some landowners are able to live satisfactorily next to highway upgrades. Both parties can draw on examples which support their respective positions. The RMS submissions and evidence do not mean that the Applicants’ claim is unreasonable. Common sense suggests that the majority of people if given a choice will choose to live much further away than 145 m from a busy multi-lane highway in the location of the Applicants’ main dwelling.

295. There will be a substantial change in the visual amenity of the Applicants as their previous rural view over cane fields with the existing highway in the distance will be adversely affected by the new highway including the southern off-ramp in the immediate foreground. This was Mr Moloney’s view in cross-examination as summarised above in par 32. The main dwelling will be 145 m from the edge of the main carriageway and 115 m from the off-ramp. According to the Applicants as the highway will be elevated some 6.3 m above the existing ground level it will be obvious from the main dwelling. Privacy will be lost in the front yard until an appropriate vegetative screen can grow, which will take a considerable time. No effective noise barrier can be constructed between the main dwelling and the new highway. Mr Moloney stated in cross-examination that he intended to plant a screen if he remained in the main dwelling (par 33). I accept there will be substantial negative impacts on the Applicants’ amenity and privacy from the new highway.

296. The Applicants’ disbursement claim for costs of a replacement dwelling on the residue land is inevitably based on subjective matters because it relies on noise impacts and amenity issues such as loss of privacy and necessary changes in lifestyle according to the Applicants. As already identified above in par 273 the Applicants’ position differs from the hypothetical parties in the “before and after” valuation exercise undertaken earlier in this judgment to determine market value and any loss in value of the residue land inter alia.

297. In Brock v Roads and Maritime Services [2012] NSWCA 404 the Court of Appeal had to decide whether several disturbance claims were payable under s 59(f) of the Just Terms Act where partial acquisition of the appellant’s land resulted in the severing of direct access of stock to a river. Market value was calculated using the “before and after” method. The acquiring authority paid for a new stock watering system and argued this was adequate compensation for the loss of access to the river. The appellant also claimed the net present value of the costs of operating that system for 105 years including replacement every 15 years. Tobias AJA held at [58] that maintaining the system related to the actual use of the acquired land by the appellant’s stock in gaining direct access across that land pre-acquisition to the river. Cessation of that use was a direct and natural consequence of the acquisition. Further, where a cost is a loss attributable to disturbance within s 59(f) and results in an improvement to the value of the residue land that “cannot be taken into account when determining the value of that land in the application of the ‘before’ and ‘after’ method of determining the market value of the acquired land”, at [58]. A finding was required but was not made by the trial judge as to whether s 59(f) was met, at [59]. Brock supports the Applicants’ approach to disbursements in that individual circumstances must be considered under s 59(1)(f) regardless of whether these result in enhanced value of residue land.

Replacement dwelling site

303. A further complication in an already complicated matter is whether the proposed replacement dwelling site provides sufficient noise amelioration and other locational benefits to justify the move as reasonable. During the site visit on the Court view it became apparent for the first time that acoustic treatment for a replacement dwelling at the Applicants’ selected location may be necessary in order for compliance with the RNP to be achieved in the location nominated, depending on the orientation of bedrooms in relation to the new highway. In cross-examination Mr Moloney stated that he chose the location because he believed it would be much superior to the main dwelling. He discussed the location with Mr Koikas for the first time on the view (par 32).

304. The acoustic experts considered the predicted acoustic performance of the proposed replacement dwelling as summarised in their fourth report filed in the course of the hearing, summarised above in pars 57-60. The experts based their assessment on the appropriate standards for daytime, night-time and external measurements in the RNP (par 58) and agreed that “a replacement dwelling would require some acoustic treatment for bedrooms with windows located on the northern, eastern and western façades in order to achieve the internal noise criteria”. Living room windows and doors on the northern and eastern façades may also require treatment, albeit not as significant as the existing dwelling, see par 59. Whilst the proposed replacement dwelling will require some acoustic treatment to make it acceptable as a dwelling an acceptable level of noise attenuation can also be achieved at reasonable cost. The summary of the Applicants’ submissions included a table identifying the projected acoustic environment for each façade of the proposed replacement dwelling. The table is too complicated to usefully summarise. Not every façade complies with the RNP but overall the acoustic environment is noticeably improved at the new site.

305. The proposed replacement dwelling would be in a quite different acoustic environment to the existing main dwelling. As shown by the aerial photograph (Exhibit 1) it would be shielded to the rear from the new highway by a hill which rises at least 25 m above the level of the land on which the proposed dwelling is to be situated. The noise level contour maps in the acoustic experts’ fourth joint report (Exhibit J) illustrate this effect. The proposed location will provide a markedly better rural outlook and amenity for the Applicants than the main dwelling.

Conclusion

306. Taking into account the matters identified in pars 290-305 I consider the Applicants’ intention to move to a replacement dwelling is a direct and natural consequence of the acquisition and that costs of establishing a new building may be reasonably incurred with the important qualification that the Applicants’ full disbursement claim is not available. The acquisition can be considered the causal factor in the Applicants’ intention to move and is the proximate cause as a matter of common sense as referred to in Lasermax Engineering Pty Ltd v QBE Insurance (Aust) Ltd [2005] NSWCA 66 cited in Caruana at [52]. The Applicants’ claim (as amended by me) might reasonably be incurred given the amenity and noise impacts of the new highway on the main dwelling. For the reasons already given in relation to “double dipping” the building cost of a replacement dwelling is not recoverable.

307. Whether the Applicants are likely to reasonably incur costs of moving to a replacement dwelling in these circumstances is not the subject of specific evidence before me, not surprisingly. The Applicants must decide if they wish to press their claim given the reduced basis for a potential disbursement claim which I have determined. Consideration of further affidavit evidence as to their intentions to move may be necessary.

308. As noted above the Applicants have not provided a town planning report addressing the likelihood of obtaining development consent for a replacement dwelling and whether decommissioning or demolition of the main dwelling would be required as a condition of development consent. Had I been minded to award the full cost of building a replacement dwelling I would have required such a report to be obtained. It is not possible to be definitive about the likelihood of obtaining development consent given the Applicants’ current holdings and existing two dwellings. I consider it is likely that development consent for a replacement dwelling can be obtained and am prepared to consider awarding limited relocation costs on that basis if additional evidence from the Applicants confirms that they are likely to incur such costs.

309. I have assumed for market valuation purposes that acoustic work will be carried out on the main dwelling as the conditions of approval require. I note that following the hearing the Court was advised that the RMS had given an undertaking to the Applicants dated 13 February 2017 concerning the carrying out of acoustic work on the main dwelling if no entitlement to a replacement dwelling for the main dwelling was awarded. There is a practical overlap between the market value claim and the disbursement claim in these circumstances.

Disturbance claim under s 59(1)(f) – loss of profits agreed

310. Loss of profits under s 59(1)(f) in the amount of $8,734 (Watts Farm not planted) and $10,508 (cane harvested on acquired land) (both exclusive of GST) is agreed.

Disturbance claim under s 59(1)(f) – additional loss of profits not agreed

311. The Applicants also claimed business disturbance by way of loss of future profits from conducting cane farming on the acquired land. The amount claimed at the conclusion of the hearing was $148,258 over and above the market value of the acquired land. The claim for lost farming land under s 59(1)(f) of the Just Terms Act had three components: 9.36 ha of acquired land on Home Farm, 8.84 ha of acquired land on Watts Farm and 4.46 ha of former cane land on Watts Farm rendered unsuitable for cane farming by the acquisition.

312. Mr Mullins was retained by the Applicants and prepared a report dated 15 July 2016. Dr Ferrier was retained by the RMS and prepared a report dated 6 May 2016. The experts participated in a joint conference and prepared a joint report dated 28 July 2016. Before delving into the evidence of the business experts the first question to arise is whether such a claim is maintainable at all.

Parties’ submissions on whether loss of profits claimable

313. The Applicants submitted that the claim comes within s 59(1)(f) as a financial loss. Numerous cases in the Court of Appeal such as Caruso and McDonald confirm that financial costs include loss.

314. The RMS submitted the claim is not permitted under s 59(1)(f) relying on Tolson, Allandale and Parfett v Roads and Maritime Services [2014] NSWLEC 1182. The RMS submitted:

1. The ability to generate profit from a cane farm is reflected in the market value of the land as productive cane land, so it is already compensated under ss 55(a) and (f).

2. The Applicants' cane land is good productive cane land. The Applicants are paid the market value of good productive cane land. They may then buy other cane land of similar quality. Alternatively, they can invest in other investments including government bonds or bank deposits. It is their choice, and the Court does not enquire as to how the compensation it awards is used.

3. In any event, if the compensation paid for the “market value” of the land was reinvested in cane land, cane farming will continue and with it the risks of the profits or losses. If the dispossessed owner chooses to invest the compensation in a bank deposit he may be saved from loss in a bad cane farming year, or he may lose money by comparison to what he may have made had he taken the risk to farm. The direct and natural consequence of the acquisition does not give rise to these profits or losses. It follows from the investment choice of the Applicants and not from the acquisition, citing Harvey v Crawley Development Corporation [1957] 1 QB 485 at 493.

Additional loss of profits not claimable

315. The Applicants claim the loss of income from the acquired and affected cane farm land as loss of profits in perpetuity in the amount of $148,258 as disturbance falling within s 59(1)(f). The first issue to arise is whether such a claim is maintainable at all, the RMS submitting that it is not. The Applicants did not refer to a case where such an award of compensation has been made in similar circumstances in relation to acquired land from which income is derived. The large number of cases referred to in [84] of the Applicants’ closing submissions are simply authority that financial costs can include losses under s 59(1)(f). That is a settled question in any event. Those authorities do not otherwise assist in resolving this part of the Applicants’ claim. If such a claim is maintainable it is surprising that this precise issue does not appear to have arisen in any reported judgment of the Court except for Parfett where such a claim was rejected. This suggests this claim is not available as a matter of valuation principle.

316. The compulsory acquisition of the Applicants’ land extinguished all rights in the acquired land, as provided by s 20 of the Just Terms Act. No rights in the land remain with the Applicants after the date of acquisition. The hypothetical sale assumed for the purposes of s 56(1) includes the whole of the amount that would have been paid if the land had been sold, disregarding the effects of the public purpose. Expectations of future capital increments and the right to collect income from the land from rent or from carrying on cane farming for profit on it are rights which exist in the land itself for the benefit of the holder of the fee simple. This is not the Applicants’ right after acquisition. Nor is it a right which crystallises at the point of acquisition.

317. I agree with the RMS that the claim is misconceived because the right to potential profits from growing sugar cane after the date of acquisition is encapsulated in the market value of the land. No such right is vested in the Applicants. The question must be answered in accordance with the express terms of the Just Terms Act.

318. The RMS referred to Parfett which concerned compensation for the compulsory acquisition of primary production land. A claim was made for business disturbance loss couched as the loss of the right to both an operating return on the land acquired plus “any future capital growth that may have been achieved should the acquisition not have occurred”, otherwise called “lost implied capital growth”, at [58]-[59]. The claim was rejected by Miller AC.

319. Miller AC held that there were two reasons why he could not accept the claim. The first was that:

[63]   In the Just Terms Act “market value” is a defined term (s 56). It is necessary to consider both words in addressing this issue. Neither are separately defined.

Value

[64]   In the highly regarded text “The Principles and Practice of Valuation” Dr J F N Murray (p 62 3rd ed 1954):

Value in the economic sense means the benefit conferred by ownership, which includes not only the possibility of exchange for other commodities, but all the satisfaction that may arise from possession.

[65]   Further, at p 98, he concludes:

The value of a parcel of land at any point of time is dependent entirely upon the benefits which may be obtained from the use of that parcel in the future" [his emphasis].

[66]   It follows that the value of a particular area of land, at a nominated point in time, can be described, in economic terms, as equal to the present value of all the benefits that will flow from its ownership having regard to its highest and best use.

...

[69] In the case of the acquired land the market value agreed, between the parties, is the result of an analysis of comparable sales and thereby takes into account all features including its location, topography, its highest and best use, its productive capacity as well as the likelihood or otherwise of capital appreciation in the future.

[70] To allow the claim would be an example of "double dipping".

320. The second reason identified by Miller AC related to the correct interpretation of s 59(f) referring to George D Angus on first instance at [99] to [108]. Miller AC held at [72] that “It is clear that financial costs (or losses) of any type unrelated to the ‘actual use of the land’... cannot be claimed under s 59(f). Foregone capital growth could not be described as ‘the actual use of the land’”.

320. The same propositions apply to the present claim. After acquisition no relevant “actual use of the land” acquired was possible (except insofar as the Just Terms Act permitted). There was consequently no loss “relating to the actual use of the land”. Section 59(1)(f) does not apply and there was no relevant loss or cost incurred.

321. I find that the alleged right or expectation on which this claim for loss of future profits rests is not available under the statutory scheme in the Just Terms Act. In terms of s 59(1)(f) there was no loss attributable to disturbance of the kind claimed and no “loss” has been incurred. I agree with the RMS’ submissions set out above that market value includes the capacity of the cane land to generate a profit, at par 314(a). As the RMS submitted, the compensation paid can be directed in any way the Applicants choose whether buying more cane land or another investment or kept as savings, at par 314(b). Future profits from cane land cannot be guaranteed given the inherent risks in any farming venture, at par 314(c).

322. The Applicants’ claim made in relation to 4.46 ha of cane land on the residue land of Watts Farm rendered too small to be useful cane land after the acquisition is also not available. The loss in value of that residue land, a claim specifically provided for under s 55(f), was taken into account in the “before and after” approach of the valuers. No additional principled basis for further considering loss of profits for that land is available. The Applicants’ claim for loss of profits is not available.

Summary of compensation payable

324. A number of issues have required determination in order to reach my conclusion so far on the appropriate amount of compensation payable in this matter. A summary of findings follows.

Market value

325. As a result of a “before and after” analysis I have determined that the appropriate compensation for market value of the acquired land and any other affected land under ss 55(a) and (f) of the Just Terms Act on Home Farm is $234,880. Injurious affection does not apply to any of the land on Home Farm apart from the curtilage of the main dwelling to which I have applied a diminution in value of 50%. I have applied the same discount rate to the value of the main dwelling on Home Farm which is offset in part by an increase in the value of the dwelling on Lot 1 by $20,000.

326. As a result of a “before and after” analysis I have determined that the appropriate compensation for market value on Watts Farm is $202,568. I do not accept that IA applies to the land on Watts Farm generally but recognise the potential for a dwelling to be constructed on the eastern portion of the land which can be assumed to suffer some impact from the new highway. A small allowance for IA should be made although the area of such a dwelling site is unknown. Doing the best I can I have reduced the value of the eastern portion of Watts Farm of 9.25 ha, which comprises 4.14 ha of cane land and 5.11 ha of grazing land, by 10% due to IA.

327. The total compensation for market value for Home Farm and Watts Farm is $437,448.

Disturbance

328. The parties agreed compensation for disturbance under s 55(d) as provided by ss 59(1)(a)-(e) of the Just Terms Act in the order of $64,280.60. Agreement was also reached in relation to several items under s 59(1)(f) being internal road upgrade costs ($56,000) and farm adjustments consisting of laser levelling, pipe works and drains ($114,694.09). Increased costs of production of $15,000 are agreed. These total $249,974.69. A claim for additional traffic management under s 59(1)(f) was to be dealt with by way of an agreement between the parties without the involvement of the Court.

329. I have found that the claim for the costs of constructing a replacement dwelling on Home Farm cannot be supported under s 59(1)(f) as there is otherwise “double dipping” given the “before and after” approach applied by the valuers. I hold in par 307 above that the balance of the costs of relocating to a replacement dwelling are potentially claimable subject to the Applicants’ position being clarified.

Loss of profits (disturbance)

330. The parties agreed that some compensation should be paid for business disturbance due to loss of profits under s 59(1)(f) of the Just Terms Act. They agreed $10,508 represents the agreed compensation for the loss of sugar cane which was growing on the acquired land on Home Farm and $8,734 was agreed in respect of the acquired land on Watts Farm which was not planted due to the impending acquisition.

331. I found above that the Applicants’ additional claim for disturbance due to the lost opportunity to conduct sugarcane farming on the acquired land on Home Farm and Watts Farm and the land rendered unsuitable for cane farming on Watts Farm is not available under s 59(1)(f).

332. The total compensation for loss of profits for Home Farm and Watts Farm is $19,242.

333. The parties need to consider this judgment and the Applicants must advise whether they wish to adduce further evidence or make further submissions about the matters raised in relation to the partial disturbance claim for Home Farm in pars 306-309. The parties should provide short minutes of order to deal with the amounts determined in this judgment, subject to advice of whether any outstanding issues concerning GST require resolution. My understanding is that the question of traffic management and associated property adjustments has been resolved between the parties. A timetable for follow up will be discussed with the parties.

Addendum made on 25 August 2017

334. In accordance with the terms of paragraph 333 the parties provided consent orders to deal with the amounts determined in this judgment.  The Court makes orders in accordance with the attached consent orders.

**********

CONSENT ORDERS:

16.154057 SMO made 250817. pdf)

Amendments

13 October 2017 - 25/8/17- Addendum added to finalise orders.

13 October 2017 - Cover page date of orders added

Decision last updated: 13 October 2017