Phillips v Roads and Traffic Authority of New South Wales - [2003] NSWLEC 359

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Land and Environment Court

of New South Wales

CITATION: Phillips v Roads & Traffic Authority of New South Wales [2003] NSWLEC 359

PARTIES:
APPLICANT
Joan Patricia Phillips
RESPONDENT
Roads & Traffic Authority of New South Wales

FILE NUMBER(S): 30011 of 2002

CORAM: Pain J

KEY ISSUES: Compulsory Acquisition of Land :- compensation - service station with shop and caravan park - market value - whether valuers' comparable sales were comparable - whether goodwill should be included in market value - whether rundown nature of property should be taken into account - whether deduction for cost of remediation for contamination - whether deduction for alleged non-compliance with conditions of consent

LEGISLATION CITED: Byron Development Control Plan No. 16 Exempt and Complying Development
Interim Development Order No. 1 - Shire of Byron
Land Acquisition (Just Terms Compensation) Act 1991 s 54, s 55, s 56, s 57, s 66
Local Government Act 1919 s 289H
Local Government Act 1993 s 68
Local Government (Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation 1995
Ordinance 71 - Caravan Parks and Moveable Dwellings
Roads Act 1993 s 138
State Environmental Planning Policy No. 11 - Traffic Generating Developments
State Environmental Planning Policy No. 21 - Caravan Parks

CASES CITED: Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209;
Feldmayr v Housing Commission NSW (1969) 17 LGRA 307;
Griffith City Council v Polegato (1990) 71 LGRA 208;
Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 197;
McBaron v Roads and Traffic Authority of New South Wales (1995) 87 LGERA 238

DATES OF HEARING: 02 - 06/12/2002, 11 - 13/06/2003, 10/07/2003 (written submissions), 25/08/2003 (written submissions).

DATE OF JUDGMENT:
12/22/2003

LEGAL REPRESENTATIVES:

APPLICANT
Mr J Webster SC
SOLICITORS
Taylor Kelso
RESPONDENT
Mr J Maston (barrister)
SOLICITORS
Henry Davis York

JUDGMENT:

30011 of 2002

Pain J

22 December 2003

JOAN PATRICIA PHILLIPS

Applicant

v

ROADS AND TRAFFIC AUTHORITY OF NSW

Respondent

Judgment

The site

The business operated at the site
9. At the time of purchase by the Applicant the site was zoned part (1)(d) Investigation Zone and part 9(a) Proposed Road Zone. Use in these zones of a caravan park and service station was prohibited. The site had existing use rights as a caravan park and obtained consent for 103 caravan sites pursuant to a development consent granted in 1984 to previous owners (DA 83/525) which had been substantially commenced. This was confirmed in a letter from the Byron Shire Council to the then operators, dated 17 December 1986. Other development consents were also granted in 1986, 1992 and 1993 for minor development and building approvals. In 1997 an amended site plan for sewer, water, stormwater, road and drainage service layout was approved by the Council. The modified site plan approved in 1997 shows 42 sites on the northern side of the creek system, consisting of 27 powered sites and 15 campsites. Sixty-one sites therefore would be located on the southern side of the creek system. Partial services are in place on the southern side of the creek.
10. The service station was established in the 1960s and enjoys existing use rights also. In 1968 Interim Development Order No. 1 - Shire of Byron came into force in Byron Shire. That instrument prohibited caravan parks and service stations at this site, which was zoned 1B, so that the use for a caravan park and service station which then existed became existing uses.
11. An annual licence pursuant to s 289H of the Local Government Act 1919 was issued by the Council to Mr Phillips on 24 September 1991 for camping and caravan park purposes for 85 sites. The sites licensed were 40 long-term, 40 short-term and 5 campsites. At the time of acquisition the site was developed to the extent of 25 operating caravan sites. These sites had been licensed under s 68 of the Local Government Act 1993 licence for seven long-term and 18 short-term sites, but there was no current licence at the date of acquisition. There is no suggestion that the Applicant would not have obtained a similar licence again from the Council. The improvements on the land at the date of acquisition included a service station/ shop/attached residence, office/residence, two other residences, numerous cabins, amenity block, a shed and a pool. All necessary services were connected.
12. It is conceded by the RTA and agreed by the town planning experts that the property could have been maintained and refurbished within the limits of the exempt and complying development provisions of the Byron Development Control Plan No. 16 Exempt and Complying Development. Under the DCP no change which affects any load bearing walls whether internal or external is allowed without development consent. Major structural changes would not be possible without further development consent being required.
13. It is agreed by the town planners the use of the site for a 103 site caravan park and service station with shop is the highest and best use of the site, taking into account possible constraints such as a possible buffer area due to a nearby quarry site, minor flooding, potential access restrictions over time to the Pacific Highway, the presence of an old cattle tick dip site which may give rise to possible low scale contamination and some minor impact from site vegetation.

Relevant legislation/case law
14. Section 54 of the Just Terms Act states that the amount of compensation payable is the amount which justly compensates the person for the acquisition of the land.
15. Section 55 of the Just Terms Act relevantly provides that:

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,

…

(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

…

… the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person’s use of the land.

McBaron v Roads and Traffic Authority of New South Wales

it is appropriate to seek to do justice by adopting a generous approach in favour of the resumee to ensure that just compensation is paid so far as the Act allows. Therefore any discretion should be exercised in favour of the claimant where practicable in order to achieve a just result.

Valuation evidence
21. There has been extensive valuation evidence presented in the case. The valuers in relation to valuation of the service station only were Mr Paris for the Applicant and Mr Aubin for the Respondent. I will deal with the service station valuations of Mr Aubin and Mr Paris in the next section.
22. In relation to the service station/caravan park valuations, the valuers were Mr Allsopp for the Applicant and Mr McDonald for the Respondent. Mr Bewes who prepared the valuation for the Valuer-General which was offered to the Applicant by the RTA on acquisition was also called by the Applicant.
23. The experts' approaches (Messrs Bewes, Allsopp, McDonald), as reflected in their valuation reports, to the market value of the mixed business of the caravan park and the service station is quite different, as the following table suggests.

Valuer	Caravan park	Service station	Total (rounded up)
Mr Allsopp	$993,400	$543,590	$1,537,000
Mr Bewes	$580,000	$275,000	$855,000
Mr McDonald	$438,500	$260,000 Mr Aubin's valuation in his report adopted.	$700,000 deducted $150,000 for remediation costs so that overall value is $550,000

Service station valuation
25. Mr Aubin for the RTA valued the service station at $260,000 initially. Mr Paris for the Applicant valued the service station at $400,000 initially. The evidence of Mr Paris and Mr Aubin has been reduced to a joint report concerning the valuation of the service station. Mr Paris now considers the service station should be valued at $375,000 and Mr Aubin now values the service station at $350,000. As can be seen, there is a difference of only $25,000 between the two experts, so that while not quite in agreement they are relatively close in their respective valuations. Neither of these experts used as comparable sales the sales relied on by Mr Allsopp.
26. Mr Allsopp also valued the service station but on an alternative basis to Mr Paris and Mr Aubin. He considered the use of the service station site could be changed to a shop alone (or with minimal fuel sales) giving it a greater value of $543,590. The primary sale on which this valuation was based was the G'day Roadhouse at Yelgun (Sale 11). This sale was in October 1998 and was not therefore close to the date of acquisition. Two other sales (Sales 9 and 10) were also used by Mr Allsopp to derive the alternate use value of the land as a shop rather than a service station with fuel sales. Sale 9 was a nursery acquired by the RTA and Sale 10 was a café at Newrybar in a rural zone. Other sales from the local area also relied on by Mr Allsopp were Sale 1, vacant land zoned 3(b) in Ocean Shores, Sale 2, vacant land in Ballina zoned 3(b) purchased for warehouse/commercial purposes and Sale 4, a house at Mullumbimby in the commercial zone. Sale 3 was a large developed service station near the centre of Ballina CBD. It was not ultimately relied on by the Applicant in final submissions.
27. I do not accept that the highest and best use of the service station site is as a shop alone (or with minimal fuel sales) as an alternative use to its use at the date of acquisition, as Mr Allsopp suggests, for several reasons:
(i) Mr Allsopp's sales 4, 8, 9, 10 and 11 relate to substantially different zonings, locations and businesses. Sales 1 and 2 concern vacant land in a commercial zone. These sales are of little assistance to the Court, in my view, as they are not comparable. Sale 11 of the G'day Roadhouse took place three years before the date of acquisition which makes its application immediately problematic. These sales do not therefore provide a sound basis on which to derive the alternative use argued for by Mr Allsopp.
(ii) I note there was agreement between the town planners that Byron DCP No 16 did permit alteration to the exterior and interior subject to a number of requirements without the need for further development consent. Renovation would be possible without the need for development consent. It was also agreed by the planners that significant alteration to the existing use would require a development approval. Mr Allsopp has suggested the alternative use is possible within the terms of the existing consent, that is, through minor refurbishment, but I do not consider a prudent hypothetical purchaser would necessarily take that view. A further possible difficulty with Mr Allsopp's approach is the limitation on structural alterations if the existing development consent is to be complied with, and whether the premises could be transformed within those terms to such an alternative use.
(iii) Further, Mr Allsopp's approach is in conflict with the approach of Mr Paris, another expert called by the Applicant. It is the evidence of Mr Aubin and Mr Paris in their joint report (exhibit L, par 8) that the highest and best use of the property was "as a Service Station in its current form with renovations and maintenance completed by a hypothetical purchaser". Furthermore, they stated that the "wholesale redevelopment of the site for a service station and other retail was economically unviable" (exhibit L, par 9).
28. I intend to value the service station based on the approach of Mr Aubin or Mr Paris. There is largely agreement between the two valuers as to methodology. Mr Paris accepted Mr Aubin's valuation methodology of direct comparison and capitalisation of assessed earnings before interest and tax (EBIT). One variation in approach is that Mr Paris also applied a "calculated hypothetical rent" approach which assumed a head lease to a major oil company or a substantial tenant on a long lease with commercial terms, an additional calculation not adopted by Mr Aubin which the RTA's counsel criticised.
29. I consider it is appropriate to apply Mr Paris' valuation of $375,000 as the Applicant's expert. There is little difference between the two experts and no particular reason to favour one over the other. It is appropriate to adopt a generous approach in order to ensure just compensation is paid to the resumee.
30. This valuation of the service station represents an increase of $100,000 over the valuation of the service station by Mr Bewes of $275,000.

Caravan park valuation
31. The caravan park valuations made by the experts were based on calculating the value of the improvements on the land and then adding this to a site value for the improved and unimproved caravan sites based on a comparable sales approach to valuation.

(i) Improvements
32. The caravan park valuers have assessed the value of the improvements on the land of the caravan park as follows:

Mr Allsopp $228,400

Mr Bewes $185,000

Mr McDonald $134,000

The Caravan Park improvements are generally in poor order. The approved sites need maintenance and repairs, whilst the amenities block and laundry is basic. The grounds need attention and the property has a run down appearance.

The Service Station and residence are in fair order only. The building needs painting and some repairs. The shop is very basic, providing only limited goods.

In the main, the service station and caravan park are in need of work with the property appearing not to have any major upgrading work carried out for a number of years.

None-the-less some buildings are relatively modern and are quite attractive and some have good utility.

In any redevelopment of the land the majority of the improvements could continue to be used …

(ii) Caravan park sites: developed/undeveloped
39. The evidence of the value of the caravan sites derived from comparable sales is as follows (indicated as number of sites multiplied by value per site):
(a) 25 developed sites

Mr Bewes 25 x $ 8,000

Mr McDonald 25 x $ 6,500

Mr Allsopp 78 x $5,000

Mr Bewes 78 x $2,500

Mr McDonald 25 x $3,000

53 x $1,000
40. Mr Bewes gave evidence when cross-examined that $1,250 was a more realistic figure for the undeveloped sites but agreed on re-examination that $2,500 was within a range where it was the maximum figure, not an average figure.
41. Before considering the application of the comparable sales evidence there are several preliminary issues requiring determination.

Goodwill included in the market value of the caravan park?
42. A threshold question is whether goodwill attached to the caravan park business operating at the site is included in the market value of the land, in particular the 25 developed caravan park sites, at the date of the acquisition. The RTA argued a claim for goodwill could only be made as special value under s 55(b) of the Just Terms Act.
43. Consequently, there is a fundamental difference in approach between Mr Allsopp and Mr McDonald to the derivation of the caravan site value. Mr McDonald deducted from the sale price of his comparable sales amounts for goodwill, plant and equipment and a residence, if any. The value per site for improved sites was then worked out by dividing the remaining figure by the number of sites to give a value per site which excluded goodwill. Mr Allsopp however did not make such deductions but rather divided the total sale price, which includes goodwill, by the number of sites to reach a value per site. He considered it was appropriate to take this approach because market value also includes goodwill. The land must be valued as a "going concern" value according to Mr Allsopp. This approach is at odds with his report dated 4 January 2002 (Exhibit D at 4) which states that goodwill is not taken into account as part of market value, but it was his oral evidence that goodwill should be included in market value and that appears to be the basis on which he analysed the comparable sales.
44. The RTA relied on the Court of Appeal's decision in Griffith City Council v Polegato (1990) 71 LGRA 208 where the Court of Appeal referred to the decision in Housing Commission of New South Wales v San SebastianPty Ltd (1978) 140 CLR 197 and stated at 212:

However, the decision goes no further than authorising the assessment of compensation for the land taken at the date it was taken on a basis which disregards the effect on value at that time of the resumption and the proposed use of the land for public purposes.

"highest and best value may be expected to include its local goodwill"

Feldmayr v Housing Commission NSW

Boland v Yates Property Corporation Pty Ltd

State of land/improvements at date of acquisition
49. The RTA argued that I should take into account the fact that the property was rundown at the time of acquisition. It was argued that this was due not to the resumption but rather the health problems of one of the original Applicants, Mr Phillips, who died after these Court proceedings were commenced, and the general viability of the business in light of competition from other businesses in the general locality, location, road noise and access difficulties. Furthermore, the Applicant purchased the property knowing it was affected by road proposals and it cannot therefore be maintained that the existence of the road proposals caused them to do something different than that which they otherwise would have done.
50. The RTA again relied on the Court of Appeal's decision in Griffith City Council v Polegato as set out at par 44 above. Polegato also held that "they cannot be compensated for losses from those causes by any assessment as at the date of acquisition itself", the cause being in that case that development was disturbed because the owner ceased work due to information received about the proposed resumption.
51. I have accepted the valuation of Mr Allsopp who took into account that the improvements needed some work. I consider that the nature of the property at the time of acquisition has been taken into account in an appropriate way in my acceptance of that figure.
Long term versus short term caravan park occupancy
52. In 1986 Ordinance 71 - Caravan Parks and Moveable Dwellings (Ordinance 71) came into force. Ordinance 71 was the first instrument to require the approval of a council for permanent occupation of sites in a caravan park. Prior to 1986 when development consents for caravan parks were issued, these did not specify whether occupation was for long or short term use. Ordinance 71 is no longer in existence, having been replaced by later legislation which continues to require licensing of caravan parks. The RTA argues that development consent was required for any “permanent occupancies” pursuant to cl 8(4) and cl 8(4A) of State Environmental Planning Policy No. 21 - Caravan Parks (SEPP 21).
53. The RTA submitted that there is no development consent for the change of use of the site from that which existed prior to the commencement of planning controls in 1968 when Interim Development Order No. 1 – Shire of Byron commenced. The use at that time was as a tourist caravan park and did not and could not involve permanent residential occupation. The 1984 consent refers to “existing caravan park” without change of use. The 1966 meaning of “caravan park” was a supervised area for caravans to be parked or hired for tourist purposes: see Macquarie Dictionary, second revised edition.
54. The RTA did note that licences were issued to the Applicant under the Local Government Act for some “long term” occupation sites and that a hypothetical purchaser would also have had regard to the latest licence issued by the Council under the Local Government Act 1993 for 25 sites, namely 7 long term, 18 short term and no camp sites, even though there was no current licence at the date of acquisition.
55. The Applicant argued that the evidence, particularly the licences issued by the Council, demonstrated that long term occupancy sites were legally valid. Mr Allsopp made enquiries of the Council and was told that the 103 sites could be a mix of short and long term sites.
56. Given the fact that the licences issued to the Applicant by the Council were for a mix of long and short term sites in both the 1991 annual licence and later licences issued under the Local Government Act 1993, I accept the Applicant's submissions that this is not an issue which need affect the value of the caravan park in the mind of the hypothetical purchaser. In any event, the issue was not considered in the calculations of comparable figures by the valuers in their reports, and is not a matter to which I have had regard in considering their figures.

Comparisons of comparable sales for caravan park
57. Mr Allsopp and Mr McDonald stated that they used the direct comparison of comparable sales method of valuation. Both agreed there were no directly comparable sales in the immediate area. Other sales at more distant locations as close in time as possible to the date of acquisition were selected to derive a value for developed and undeveloped caravan sites.
58. Mr Allsopp considered the site was well suited to the caravan park use being located on the Pacific Highway with good visibility to the site. The site was not flood affected, and was not identified on any Byron Shire Council flood liable land map. Noise from the highway was not an impediment to its development. There was no relevant affectation from the nearby quarry as that had a limited life due to being no longer economically viable. The site is in Byron Shire which is considered a highly desirable residential and tourist location. Furthermore, there is a demand for long term accommodation in caravan parks in the Shire because increasingly property prices have meant a reduction in the availability of cheaper housing.
59. Mr Allsopp relied on his Sales 5, 6 and 13 for his direct comparison figures to arrive at the figure of $15,000 per developed site and $5,000 per undeveloped site. His Sale 7 was also relied on but as a secondary sale only. None of Mr Allsopp's sales are a composite use of a site for a caravan park, service station/shop.
60. The primary sale relied on by Mr Allsopp is his Sale 5, which he states can be applied directly. Sale 5 concerned 2.023ha of vacant land in Ballina on the Pacific Highway sold in January 2002 for $400,000 which gained approval for 66 caravan park sites after purchase. The purchase was necessitated by the owner needing to construct a caravan park for displaced tenants from another caravan park, which ensured a source of tenants. Sale 6 is also a fully developed caravan park at Ballina of 62 sites which sold in February 2002 for $1,417,500.
61. Mr Allsopp in his report in reply included a new sale, Sale 13, as a direct sale comparison. This property is located very close to Cape Byron proper and sold for $3.6M in December 2000 as a going concern caravan park which included 25 caravans and approval for 160 dwelling and camping sites. Clearly this property was substantially superior to the subject site and was not ultimately relied on by the Applicant in final submissions when the Applicant's counsel stated it could not be applied directly.
62. Mr McDonald, the RTA's valuer, considers Sale 5 to be far superior to the subject site due to its location close to the centre of Ballina and likely higher yield due to it being a replacement facility for an existing caravan park which had to close, in other words the occupancy rate was guaranteed. Mr Allsopp's Sale 6, was also a significantly improved site to the subject site, in his view, making comparison to this site problematic. I agree. I do not therefore consider that the figures derived from this sale by Mr Allsopp are directly applicable to the subject site. Sale 7 is a substantially superior tourist facility at Coffs Harbour and I accept Mr McDonald's argument that it is difficult to analyse in relation to the subject site.
63. Mr McDonald considered the subject site on the Pacific Highway was not particularly desirable and that highway locations were not sought after by caravan park business purchasers. The site was noise affected by the highway and was not within a township. Access to the site from the Pacific Highway if travelling from the north was dangerous as it required turning across the northbound traffic lane of the highway with no dedicated turning lane. There was a 90km/h speed limit on the highway at the front of the property. Further, Mr McDonald considered the site was potentially flood liable. He also considered that the site was best suited for a tourist park development and there was already competition from the three existing caravan parks in Brunswick Heads, all of which were star-rated, meaning they would provide superior competition to the subject site.
64. Mr McDonald's comparable sales for the caravan park were numerous. Sale 1, an unrated caravan park with 56 sites, six camp sites and further approval for 66 sites on the Pacific Highway at Green Hills, sold in September 2001 for $725,000. Sale 2, was a 50 site older style caravan park at Chindera which sold in September 2001 for $835,000. Sale 4 was a 35 site caravan park on the Pacific Highway at Broadwater which was flood liable and sold in August 2001 for $450,000. Sale 5 was a 25 site caravan park with service station and shop at Rainbow Flat which sold in June 2000 for $510,000.
65. Sale 6 was a 48 site caravan park with fuel sales and shop, second residence and five motel style units at Nabiac which was sold in June 2002 for $560,000 and was considered very comparable to the subject site. Sale 7 was a mortgagee sale of an approved caravan park site of 66 sites which had been partially constructed, sold in July 2002 for $160,000. Sale 8 is a highway motel, Mobil Roadhouse, with a substantial residence, 28 caravan sites and five overnight cabins which sold in July 2002 for $535,000. This sale was considered suitable for direct comparison purposes to the subject site. Sales 5, 6 and 8 consisted of a service station and caravan park.
66. Mr Allsopp considered that none of the sales relied on by Mr McDonald (and by implication Mr Bewes) could be relied on as comparable because all except Sale 1 were fully developed sites which had no room for expansion, unlike the subject site. Sales 1, 2, 4, 5 and 7 were all subject to flooding, which in some cases was substantial. Sales 5, 6 and 8 were too remote to be at all comparable. None of the sales were in Byron Shire, which Mr Allospp considers is strongly in demand as a locality for such businesses. Further, Sale 7 as a mortgagee sale is completely inappropriate to use as a guide to what a hypothetical purchaser would do in this context, which I agree with. Further, Sales 1, 2 and 6 have much more competition close by than the subject site.
67. All of the comparable sales relied on are problematic because they differ from the subject site, being variously different localities and sites. Overall I consider Mr McDonald's, and Mr Bewes' figures are derived from sales which are more applicable to the subject site than those selected by Mr Allsopp as the properties selected appear to accord more closely with the use of the subject site than those selected by Mr Allsopp. Further, Mr McDonald, an experienced valuer, included sites which were similar in that they included caravan park and service station operations. I consider Mr Allsopp's valuation of $15,000 for each developed site to be much too high.
68. One other matter should be noted. Mr Allsopp and Mr McDonald appear to have treated plant and equipment differently. Mr McDonald deducted from each sale figure not only goodwill but also plant and equipment and the value of any residence to arrive at his value per site. Mr Allsopp did not do this because he claimed he was valuing on a "going concern" basis. While I have agreed with Mr Allsopp that goodwill should be included in such an analysis, it does not appear to me appropriate that moveable chattels such as plant and equipment should be included in the total price as he has done. This further suggests that Mr Allsopp's figures are too high.

Improved caravan sites
69. As already stated, I consider Mr McDonald's valuation figures are more appropriate but these need some adjustment. I consider that Mr McDonald has incorrectly excluded goodwill from his figures and this needs to be added in. Applying the figures put to Mr McDonald in cross-examination by the Applicant's counsel, with which he agreed if the assumption that goodwill representing one year's EBIT should be included was accepted, the adjustment to provide for goodwill shows an amount of $8,250 per improved caravan site for his Sale 1 and of $12,900 for his Sale 2. It was agreed by Mr McDonald that these figures would translate to the subject site at $8,000 per improved site, the figure Mr Bewes applied in his valuation to the developed caravan sites.
70. I have already noted that Mr McDonald included amenities in his site valuations rather than in the valuation of improvement at par 38. As I am adopting Mr McDonald's figures to a considerable extent I will deduct the amenities figures included in Mr Allsopp's valuation of improvements of $43,120, leaving an amount of $185,280 for improvements.
71. I consider it appropriate to vary the amount of $8,000 per site to allow for a greater amount per improved site to take into account the superior general location of the subject property and the lack of flood prone land, when compared to the sales relied on by Mr McDonald and Mr Bewes. I will allow $9,000 each for the 25 improved caravan park sites on the subject site, that is $225,000.

Unimproved caravan sites
72. An appropriate value per site for the 78 unimproved caravan sites is also required. Once again the valuers Messrs Allsopp, Bewes and McDonald have arrived at different figures set out at par 39.
73. I consider the site has reasonable potential for development of all 103 sites in terms of the local physical constraints noted by the planners and valuers. I do not consider it is flood liable, entry and egress from the Pacific Highway was limited, that there is likely to be noticeable impairment due to the quarry buffer and that noise affectation or vegetation on the site would prevent development of all 103 sites.
74. The opinions of Mr Allsopp and Mr McDonald are divided on whether there is the business potential to develop all 103 sites. Mr McDonald considered the implementation of all of the 103 sites was not economically viable due to the noise, access, location and poor facilities already identified and existing local competition. Any institution of this development consent requires facilities to be provided in accordance with the current Local Government (Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation 1995.

75. Furthermore, Mr McDonald's evidence was that amenities would need to be built or self-contained cabins constructed in order to comply with the current legislative requirements for caravan parks. He considered only 25 further sites would be likely to be developed. He allowed $3,000 per site for the 25 sites he considered would be developed. For the 53 undeveloped sites remaining, Mr McDonald allowed only the nominal sum of $1,000 per site.
76. Mr Allsopp has allowed $5,000 for each undeveloped site and Mr Bewes' evidence is that $2,500 is his maximum figure for each undeveloped site. No distinction is made by Mr Allsopp and Mr Bewes in relation to sites that may be uneconomic to develop. Mr Allsopp's opinion is that all 103 sites can be developed from a business perspective, indeed his valuation emphasised the potential of the site for development.
77. I have indicated in relation to the improved sites that Mr Allsopp's valuations were too high and I also consider that to be the case for the unimproved sites, given these are derived from a comparison of the sales referred to earlier at par 59 - 62. I am prepared to adopt Mr McDonald's figure of $3,000 but do not consider the limitations on development of the remaining 78 sites to be so economically onerous, given Mr Allsopp's view, that I should assume that a hypothetical purchaser would consider only 25 could be developed. Nor do I consider all 103 sites can necessarily be developed. Even allowing for its location in Byron Shire, such a facility in this location appears much larger than other comparable sales considered, except for Mr McDonald's Sale 1 where there were an existing 56 sites with approval for a further 66 sites. I note that Mr McDonald's evidence was that the approval for these 66 sites had been held for some time without being acted upon. I will assume that 50 of the undeveloped sites can be developed as a viable economic proposition. I will apply the notional figure adopted by Mr McDonald of $1,000 to the remaining 28 sites. I will apply the figure of $3,000 to 50 of the 78 undeveloped sites to total $150,000, and $1,000 to the balance of 28 undeveloped sites.

Deductions from compensation argued for by the RTA
78. The RTA argued that several deductions should be made for various matters.

(1) Cost of remediation for contamination
79. The RTA argued that an amount should be deducted because of possible contamination at the service station site and the abandoned cattle tick dip site. Their valuer, Mr McDonald, deducted $150,000 for remediation work. The report by Geolink Group Pty Ltd, "Phase 1 and Phase 2 Environmental Assessment Report for Salad Bowl Caravan Park/Service Station" August 2000, which was available to a purchaser at the date of acquisition and referred to by the planners and valuers in this case, stated that there was no need for remediation of the service station site if the present use was to continue. The evidence also suggested that if remediation was necessary for the cattle tick dip site the Department of Agriculture was responsible. I do not consider any amount should be deducted from the compensation payout for remediation costs.

(2) Have the conditions of the 1984 development consent in relation to roadworks been satisfied?

"a detailed engineering design, incorporating the proposed grading and method of construction and drainage of all access aisles, manoeuvring areas and parking areas … being submitted to Council for approval"

"Entrance & exit to caravan park & widening of existing highway pavement to be approved by Dept of Main Roads"

"the detailed engineering design and engineering works should be undertaken in respect of the widening of the Pacific Highway to the standards of the Department of Main Roads"

In the that

event a development application for redevelopment of the service station, mobile home park or the previous consent to expand the caravan park being activated or redevelopment of a mobile home park at the site prior to 4 January 2002, in my opinion the minimum requirements to satisfy the RTA for access to the Pacific Highway from Lot 7 DP 710428 would be:

Closure of the existing driveways accessing the site.

Construction of a right turn Highway lane.

Construction of a left turn Highway lane.

A combined access constructed at Tunnel Road. The combined access would have to be constructed and located so that a minimum Safe Intersection Sight Distance of 210m plus correction for downgrade is provided. (Table 5.3 Section 5 AUSTROADS Part 5. See Attachment 4).

90km/h adopted for design purposes.

Austroad Standards to be adopted for the dimensions of roadworks.

The works to be carried out at no cost to the RTA.

(3) Compliance with further conditions of consent
93. The RTA further submitted that a hypothetical purchaser would also consider the need to satisfy conditions 2, 3 and 4 of the development consent no 83/585 totalling $63,002. These conditions concerned provision of sewerage, roadworks, water supply contribution and parks embellishment. The RTA relied on the evidence of Mr Connelly that there is no evidence that the monetary requirements of the conditions had ever been satisfied.
94. The Applicant also relied on the oral evidence given by Mr Connelly that he did not know of any evidence that these contributions had not been paid and assumed, in the light of the subsequent treatment by the Council of the site, that they had been paid. The Applicant submitted a hypothetical purchaser would make a similar assumption. The presumption of regularity should be applied in favour of the Applicant. The Respondent bears the onus of proof as it raised the issue.
95. No evidence had been provided to the Court which confirms that these amounts have or have not been paid. It is appropriate to give the Applicant the benefit of the doubt and I will assume these have been paid.

Amount of compensation awarded by the Court
96. The appropriate amount of compensation is:

Disturbance $ 42,387.02

Service station $ 375,000.00

Caravan park

- improvements $ 185,280.00

- land

25 x $9,000 $ 225,000.00

50 x $3,000 $ 150,000.00

28 x $1,000 $ 28,000.00

TOTAL $1,005,667.02

97. I direct the parties to file short minutes of order giving effect to this judgment by 6 February 2004.
98. I order that the question of costs is reserved and the exhibits may be returned, with the exception of Exhibit U.

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Citations

Phillips v Roads and Traffic Authority of New South Wales [2003] NSWLEC 359

Cases Citing This Decision

0

Cases Cited

4

Statutory Material Cited

10

Melwood Units Pty Ltd v Commissioner of Main Roads [1978] HCA 28

Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25

Boland v Yates Property Corporation Pty Ltd [1999] HCA 64

CITATION:	Phillips v Roads & Traffic Authority of New South Wales [2003] NSWLEC 359
PARTIES:	APPLICANT Joan Patricia Phillips RESPONDENT Roads & Traffic Authority of New South Wales
FILE NUMBER(S):	30011 of 2002
CORAM:	Pain J
KEY ISSUES:	Compulsory Acquisition of Land :- compensation - service station with shop and caravan park - market value - whether valuers' comparable sales were comparable - whether goodwill should be included in market value - whether rundown nature of property should be taken into account - whether deduction for cost of remediation for contamination - whether deduction for alleged non-compliance with conditions of consent
LEGISLATION CITED:	Byron Development Control Plan No. 16 Exempt and Complying Development Interim Development Order No. 1 - Shire of Byron Land Acquisition (Just Terms Compensation) Act 1991 s 54, s 55, s 56, s 57, s 66 Local Government Act 1919 s 289H Local Government Act 1993 s 68 Local Government (Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation 1995 Ordinance 71 - Caravan Parks and Moveable Dwellings Roads Act 1993 s 138 State Environmental Planning Policy No. 11 - Traffic Generating Developments State Environmental Planning Policy No. 21 - Caravan Parks
CASES CITED:	Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209; Feldmayr v Housing Commission NSW (1969) 17 LGRA 307; Griffith City Council v Polegato (1990) 71 LGRA 208; Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 197; McBaron v Roads and Traffic Authority of New South Wales (1995) 87 LGERA 238
DATES OF HEARING:	02 - 06/12/2002, 11 - 13/06/2003, 10/07/2003 (written submissions), 25/08/2003 (written submissions).
DATE OF JUDGMENT:	12/22/2003
LEGAL REPRESENTATIVES:	APPLICANT Mr J Webster SC SOLICITORS Taylor Kelso RESPONDENT Mr J Maston (barrister) SOLICITORS Henry Davis York