Roads & Traffic Authority of New South Wales v Peak - [2007] NSWCA 66

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66

HEARING DATE(S): 17 November 2006

JUDGMENT DATE:
27 March 2007

JUDGMENT OF: Beazley JA at 1; Tobias JA at 1; Basten JA at 121

DECISION: 1. Appeal dismissed; 2. Cross-appeal allowed; 3. Set aside orders 1 and 3 made by Pain J on 6 February 2006; 4. Remit the matter to the Land and Environment Court for redetermination in accordance with these reasons; 5. The appellant to pay the respondents’ costs of the appeal and cross-appeal.

CATCHWORDS: Appeal – jurisdiction on appeal – Land and Environment Court -whether error of trial judge involved point or question of law – failure to accord procedural fairness - Real property – acquisition of land – compensation – valuation of land – before and after approach – whether trial judge erred in valuating after scenario - Real property – acquisition of land – whether residence uninhabitable – hypothetical purchaser and seller - whether trial judge erred in admitting prospective acoustic evidence - Real property – acquisition of land – compensation – valuation of land – loss attributable to disturbance – financial costs incurred relating to actual use of the land - residue land intimately connected with actual use of acquired land - Real property – acquisition of land – compensation – valuation of land – loss attributable to disturbance – financial costs incurred in connection with relocation - whether trial judge erred finding relocation costs payable only for acquired land

LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ss 37, 54, 55, 55(a), 55(f), 56, 56(1), 59, 59(a), 59(b), 59(c), 59(f), 61(2), 66
Land and Environment Court Act 1979 (NSW) ss 5, 38, 56A, 57

CASES CITED: Attorney General (Qld) v Wilkinson (1958) 100 CLR 422
Besmaw Pty Limited v Sydney Water Corporation (2001) 113 LGERA 246
Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259
Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088
Ex parte Tooth & Co Ltd; Re the Council of the City of Sydney (1963) 80 WN (NSW) 572
Gosford Shire Council v Green (1980) 48 LGRA 201
Italiano v Carbone [2005] NSWCA 177
Johnston v The Roads & Traffic Authority [2000] NSWLEC 111
Lowy v Land and Environment Court (NSW) (2002) 123 LGERA 179
Marshall v Director General of the Department of Transport (2001) 205 CLR 603; [2001] HCA 37
Maurici v Chief Commissioner of State Revenue (2002) 212 CLR 111
McBaron & Ors v Roads & Traffic Authority of New South Wales (1995) 87 LGERA 238
Metropolitan Water Sewerage and Drainage Board v Histon [1982] 2 NSWLR 720
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611
Mir Bros Unit Constructions Pty Limited v Roads & Traffic Authority of New South Wales [2006] NSWCA 314
Muin v Refugee Review Tribunal (2002) 76 ALJR 966
NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; (2005) 80 ALJR 367
Peter Croke Holdings Pty Ltd v Roads & Traffic Authority of NSW (1998) 101 LGERA 30
Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26
Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57
Richardson v Roads & Traffic Authority of New South Wales (1996) 90 LGERA 294
Roads & Traffic Authority (NSW) v Muir Properties Pty Limited 143 LGERA 192; [2005] NSWCA 460
The Queen v Watson; Ex parte Armstrong (1976) 136 CLR 248

PARTIES: Roads & Traffic Authority of New South Wales (Appellant)
Donald Richard Peak and Judith Gwen Peak (Respondents)

FILE NUMBER(S): CA 40059/06

COUNSEL: J Griffiths SC; P Tomasetti (Appellant)
J Webster SC (Respondents)

SOLICITORS: Clayton Utz (Appellant)
Stacks Forster (Respondents)

LOWER COURT JURISDICTION: Land & Environment Court

LOWER COURT FILE NUMBER(S): 31027/04

LOWER COURT JUDICIAL OFFICER: Pain J

LOWER COURT DATE OF DECISION: 12 January 2006

LOWER COURT MEDIUM NEUTRAL CITATION: Peak & Anor v Roads and Traffic Authority [2006] NSWLEC 3

- 1 -

CA 40059/06

BEAZLEY JA
TOBIAS JA
BASTEN JA
27 March 2007

ROADS AND TRAFFIC AUTHORITY OF NSW

v

DONALD RICHARD PEAK AND JUDITH GWEN PEAK

Judgment

1 BEAZLEY & TOBIAS JJA: On 30 April 2004, the appellant compulsorily acquired part of the respondents’ land at Nabiac (the acquired land), thus entitling the respondents to compensation under s 37 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Just Terms Act). The respondents’ land (the property) was served by the existing Pacific Highway (the old highway) which comprised only two lanes of traffic.

2 The acquired land comprised approximately 22 per cent (4.005ha) of the property (18.59ha) upon the whole of which the respondents operated a cattle stud farm including facilities for artificial insemination and embryo transfer. The respondents’ residence (the residence) was located on the eastern portion of the property, about 90m from the eastern boundary of the old highway.

3 The purpose of the compulsory acquisition was to provide for a new section of highway (the new highway) to the east of the old highway and which involved its realignment and conversion to two lanes in each direction with an increase in the maximum speed limit from 100kph to 110kph. The proposed new alignment resulted in the eastern boundary of the new highway being 35m closer to the residence and more elevated than was previously the case. A further consequence of the acquisition was that the existing entrance to the property from the old highway needed to be relocated.

4 The parties were not able to reach agreement as to the amount of compensation that ought to be paid pursuant to the Just Terms Act. The appellant, in its compensation notice, offered an amount of $429,564. This was rejected and the respondents, pursuant to s 66 of the Just Terms Act, applied to the Land and Environment Court by way of objection to the amount of compensation offered.

5 Pursuant to s 61(2), the Land and Environment Court is invested with jurisdiction to hear and dispose of a person’s claim for compensation. A claim for determination of compensation under s 66 is classified as Class 3 proceedings under the Land and Environment Court Act 1979 (NSW) (the Land and EnvironmentCourt Act). The proceedings were heard by Pain J who ordered that the amount of compensation payable was $520,629.80.

6 The appellant has appealed against her Honour’s orders and the respondents have cross-appealed. The appellant raised three major issues on the appeal: first, that her Honour erred in determining the value of the residence in what is referred to in the evidence as the “after” scenario (Ground 1); secondly, that her Honour erred in admitting into evidence certain acoustic evidence (Grounds 2-4); and, thirdly, that her Honour wrongly allowed “replacement value” under s 59(f) of the Just Terms Act for the dairy/bails complex which had been located on the acquired land (Grounds 5-8).

7 In their cross-appeal the respondents contend that her Honour erred in her interpretation of ss 59(f) and 59(c) of the Just Terms Act. They further allege error in the manner in which her Honour approached the question of noise control measures.

8 An appeal from a decision of the Court exercising Class 3 jurisdiction is confined to a question of law.

Relevant statutory regime

9 The amount of compensation payable for land compulsorily acquired is governed, relevantly, by ss 54-59 of the Just Terms Act. Those sections provide, relevantly:

(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 …

55 Relevant matters to be considered in determining amount of compensation

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

…

d) any loss attributable to disturbance,

…

(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

market value

(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 …

59 Loss attributable to disturbance

loss attributable to disturbance

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

(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.”

Valuation approach

10 Both parties approached the valuation of the acquired land on what is referred to in valuation parlance as a “before” and “after” approach. That approach was adopted as part only of the property was compulsorily acquired. Her Honour found that that valuation approach was appropriate and in accordance with authority: see Gosford Shire Council v Green (1980) 48 LGRA 201. She observed that on the “before” and “after” approach, injurious affection under s 55(f) of the Just Terms Act was incorporated into the valuation. The expert valuers called by the parties had based their respective valuations on that approach and agreed that the value of the respondents’ property before acquisition was $750,000 and its value after acquisition of the acquired land was $590,000. However, as will appear, the particular methodology they adopted did not incorporate any injurious affection into the “after” valuation of the property.

11 Additionally to calculating the “before” and “after” value of the property in terms of its bare land component, the valuers separately valued the improvements on the property. Those improvements comprised the following:

(i) The residence located on that part of the property after the acquired land was excised therefrom (the residue land);

(ii) The yards/artificial insemination and embryo transfer complex located on the residue land (the AI/ET complex);

(iii) The bails/dairy show complex on the acquired land;

(iv) The calf shelters on the acquired land and residue land;

(v) Other improvements located on the residue land.

12 There was an agreement as to the “before” and “after” values of the calf shelters and the “other” improvements. However, the parties were in dispute in relation to the value of the residence, the AI/ET complex and the bails/dairy show complex. There was also a separate claim for disturbance, which was disputed by the appellant.

Grounds 2-4: The admission of certain acoustic evidence

13 A significant issue in the case was whether the noise that would be generated by the traffic on the proposed new highway, particularly given its closer and more elevated location to the residence than the old highway, would so affect its amenity as to make it uninhabitable. Expert acoustic evidence was called by each party on this issue. The appellant called expert evidence from Mr Graham Atkins and the respondents from Mr Steven Cooper. There was also in evidence a report of Richard Heggie Associates.

14 The appellant contends that her Honour erred in law in admitting the evidence of Mr Cooper and the report of Richard Heggie Associates. It challenged the admissibility of Mr Cooper’s evidence on the basis that his opinion was formulated upon material that was not available at the date of acquisition of the acquired land. The challenge to the report of Richard Heggie Associates was that the information upon which it was based as well as the report itself was also not available as at that date. The underlying objection to this evidence was that it related to events which post-dated the date of acquisition.

15 As Basten JA points out at [128] of his reasons, the procedure at trial in Class 3 proceedings is governed by s 38 of the Land and Environment Court Act. In particular, the Court is not bound by the rules of evidence and may inform itself on any matter in such manner as it thinks appropriate. The availability of a challenge on the basis of error of law in such issues will inevitably be limited and is most likely to be on the basis that an irrelevant consideration was taken into account, or that there was some denial of procedural fairness. The latter has not been suggested in this case.

16 Mr Cooper provided a report dated 20 April 2005. In the course of his investigations of the noise impact of traffic using the new highway upon the residence, Mr Cooper carried out a site inspection in November 2004 and conducted sound level measurements at the residence at that time. This was some seven months after the date of acquisition. Those readings were taken in circumstances where the residence was affected by the construction work which was being undertaken as part of the building of the new highway. The real traffic disturbance to which the residence would be exposed and which would potentially affect its value was, of course, such traffic as would be generated along the new highway in its closer proximity and more elevated relationship to the residence. Accordingly, the evaluation of the noise impact of the new highway was always going to be prospective. This was recognised in the acoustic report of Wilkinson Murray annexed to the Environmental Impact Statement (the EIS) for the new highway and which predated the acquisition. It was there indicated that the proposed upgrading of the highway would have a noise impact on the residence “greater than that considered acceptable by the EPA on the basis of a classification of an arterial road and criteria recommended for such roads”.

17 Because any acoustic assessment of the noise impact from the use of the new highway had to be prognostic, a report based on acoustic readings taken after the date of acquisition was not irrelevant. It was as relevant as any report based on readings taken prior to acquisition. It follows, in our view, that there was no error in the trial judge having regard to Mr Cooper’s evidence and the report by Richard Heggie Associates.

18 It was in the context of that evidence and particularly that of Mr Cooper that the trial judge at [32] found that a hypothetical purchaser of the residence at the time of the acquisition would be likely to obtain the advice of an acoustic expert who would have taken noise measurements at the residence as had Mr Cooper. Such an expert would then have extrapolated that information to prognosticate the probable increase in noise at and within the residence during the day and at night due to the proximity and elevation of the new highway. Based on that information the expert would have opined as to whether the residence would be rendered uninhabitable or habitable and if the latter, what, if any, ameliorating measures would be necessary.

19 It was submitted by the appellant in support of Ground of Appeal 2(b) that neither a hypothetical vendor nor purchaser, in determining the price to be paid (or allowed) for the residence, would conduct their own acoustic assessments in any but the most general way. In particular, a hypothetical purchaser would not engage an acoustic expert to provide a report first, because of the expense involved and second, because such an expert would be unable to provide any information that would be of assistance in determining value. Accordingly, the trial judge had erred in incorrectly surmising the behaviour of the hypothetical purchaser.

20 We would reject each of those criticisms as being without foundation. Common sense indicates that a prudent hypothetical purchaser would have wanted to know whether the impact of the new highway in relation to the residence would have rendered it, from an acoustic perspective, habitable or uninhabitable. Her Honour’s finding that an acoustic expert such as Mr Cooper would have been engaged for that purpose is a finding of fact which is beyond challenge.

21 It follows that Grounds 2-4 of the Notice of Appeal should be rejected.

Ground 1: Valuation of the residence in the “

after

” scenario

22 It was common ground that the construction of the new highway, which was the purpose of the acquisition, would have a significant noise impact upon the residence. The essential difference between the parties was the extent of that impact. That difference of opinion, in turn, affected the amount the respective valuers attributed to the “after” value of the residence. The respondents’ case was that the residence would be rendered uninhabitable as a result of the new highway.

23 The trial judge at [44] referred to the evidence of Mr Allsop, the valuer retained by the respondents, who had ascribed a value to the residence of $240,000 before the date of acquisition and “nil” after the date of acquisition, because she accepted Mr Cooper’s evidence that the residence would be rendered uninhabitable and, therefore, there would be no prudent hypothetical purchaser who would pay anything for it. Her Honour then said at [44]:

“I have already held that I consider a prudent hypothetical purchaser would be prepared to pay $10,000 in the ‘after’ situation for the house.”

24 Her Honour’s statement that she had “already held” that a prudent hypothetical purchaser would pay $10,000 appears to relate back to her finding on this matter at [38] but if this is so then it makes no sense as her finding in that paragraph relates to what a hypothetical purchaser would expect to receive from the appellant for noise control measures. On the other hand, her findings at [44] relate to what that purchaser would be prepared to pay for the residence in the “after” situation. Her Honour repeats this finding at [47].

25 Although there appears to be some confusion in her Honour’s reasons on this point, we think the correct understanding of her findings is that she has at the end of the day ignored her finding in [38] given her acceptance of Mr Cooper’s evidence that the residence in the “after” situation would be uninhabitable but has determined that that fact notwithstanding, the hypothetical purchaser would allow something for the building namely, $10,000 rather than nil as the respondents’ valuer contended. Such a sum would reflect the possibility that the building would have some future non-residential use such as for storage or as an office or studio related to the respondents’ cattle breeding business. These were uses contemplated by Mr Allsop in his valuation report.

26 Having determined the residual value of the residence at $10,000, her Honour then referred to the evidence of Mr McDonald, the valuer retained by the appellant. Mr McDonald had valued the residence at $130,000 on the “before” basis and $50,000 on the “after” basis.

27 Her Honour, at [47], accepted Mr Allsop’s “before” valuation of $240,000. In relation to his “after” valuation, her Honour said:

“In relation to the ‘after’ value, I do not consider the sale at Candoormakh Crescent relied on by Mr McDonald is indicative that a sale of this property, which is of a far superior character, is likely to fetch $50,000 in the market. Given the substantial noise impact of the highway upgrade on the Applicants’ residence, which will render the outdoor area around the house unusable without extremely intrusive walls and substantially impact on the day and night time amenity inside the house, I do not consider a prudent hypothetical purchaser would be prepared to pay more than $10,000. I consider the ‘after’ value is $10,000.”

28 The appellant contends that her Honour’s finding that the “after” value was $10,000 was “obviously manifestly wrong”. The ultimate basis for this submission, as we understand it, was her Honour’s failure to have regard to the Candoormakh Crescent sale relied on by Mr McDonald to derive a value of $50,000 as the “after” value of the residence. However, in its written submission the appellant seems to assert that the $10,000 was the amount found by her Honour at [38] that would be received by a hypothetical purchaser from the appellant for noise control measures. The logic of the argument is that if the hypothetical purchaser received $10,000 for that purpose, then it must follow that after expending it on the residence, it would be habitable and, therefore, worth more than $10,000.

29 However, for the reasons given in [25] above, we do not understand her Honour to have approached her determination of the residual value of the residence in that way. Accordingly, we would reject the appellant’s submission founded upon the trial judge’s finding in [38] of her judgment.

30 The appellant contends that her Honour fell into further error when determining the value of the residence in the “after” scenario. The particular matters upon which the appellant relies in support of this ground were:

(a) that her Honour misdirected herself as to the proper enquiry to make in order to determine the “ market value ” of the residence in the “ after ” situation;

(b) that her Honour misapplied the statutory test of “ market value ” in s 56 of the Just Terms Act and;

after

31 The appellant submitted that s 56(1) of the Just Terms Act involves a consideration of the amount that would have been paid for the acquired land if it would have been sold “by a willing but not anxious seller to a willing but not anxious buyer”. It was submitted that her Honour had regard only to the price that would have been paid from the perspective of a “willing but not anxious buyer” and failed to take into account the amount that would have been accepted by a “willing but not anxious seller”. It was submitted that by failing to consider the hypothetical sale of the residence from the perspective of both seller and buyer, her Honour fell into a material error of law. This is the essential error alleged in (a) and (b) above.

32 We have already dealt with the error alleged in (c) above in response to the submission that her Honour’s “after” valuation of $10,000 for the residence was “obviously manifestly wrong”. As we have observed, the appellant’s argument was seemingly based upon the amount of compensation that her Honour assessed would be likely to be provided by the appellant to the hypothetical purchaser of the residence. It was submitted that her Honour must have been confused as to what she had reasoned in respect of the allowance of $10,000, because that allowance had nothing to do with the value of the residence in the “after” scenario. Alternatively, her Honour must have assumed that sum of $10,000 that she allowed for the likely compensation to enable amelioration works to be carried out equated with the value of the residence. It was submitted that if that was so, she must have found that the dwelling was worth nothing in the “after” scenario, contrary to her finding that a prudent hypothetical purchaser would be prepared to pay $10,000 for the residence.

33 As we have already indicated in [25] above, there is some confusion in her Honour’s reasons on this point. But even if the appellant’s understanding of the judgment on this issue is correct, which in our view is not the case, it is difficult to understand what ought to flow from that confusion, unless the appellant can underpin it with an error of law. Strictly, it must be said that the appellant does not seek to do so with the consequence that this ground of challenge should be rejected.

34 Of greater substance was the appellant’s submission that her Honour erred in the manner in which she dealt with the comparable sale of the property at Candoormakh Crescent upon which the appellant’s valuer, Mr McDonald, had relied in order to reach the “after” value of the residence. In this regard, we repeat what her Honour said at [47]:

“In relation to the ‘after’ value, I do not consider the sale at Candoormakh Crescent relied on by Mr McDonald is indicative that a sale of this property, which is of a far superior character, is likely to fetch $50,000 in the market. Given the substantial noise impact of the highway upgrade on the Applicants’ residence, which will render the outdoor area around the house unusable without extremely intrusive walls and substantially impact on the day and night time amenity inside the house, I do not consider a prudent hypothetical purchaser would be prepared to pay more than $10,000. I consider the ‘after’ value is $10,000.”

35 Two errors are alleged to arise from this paragraph. First, it was argued that on the proper construction of this paragraph, her Honour’s reference to “this property” being of a “far superior character” was a reference to the property at Candoormakh Crescent. That was wrong, as was apparent from letter written by Mr McDonald to the appellant’s solicitors on 7 November 2005, in which he stated:

“I have utilised the analysed value of [the Candoormakh Crescent property] that is $50,000. Whilst the subject is considered superior to [the Candoormakh Crescent] property, I consider that despite its location to the highway [after], the residence has a value of at least $50,000.”

36 We do not agree with the appellant’s construction of her Honour’s reasons at [47]. Their meaning is plain. The reference to the property being of a “far superior character” is a reference to the residence. The phrase “which is of a far superior character” is a direct reference to the words “this property” in the preceding phrase. Had it been intended that the phrase “which is of a far superior character” related to the Candoormakh Crescent dwelling, the phrase would logically have followed the words “Candoormakh Crescent”. Her Honour’s point was that a sale of the residence was not likely to achieve a price of $50,000 notwithstanding that as a building it was superior to the Candoormakh Crescent dwelling and this was because the latter was habitable but she found that the residence was not.

37 Accepting this to be the correct meaning of the paragraph, the appellant then contended that if the Candoormakh Crescent residence was worth $50,000 on the market and the residence was of a “far superior character”, there had to be some underlying error in her Honour’s determination that the residence only had a value of $10,000.

38 We do not consider that there was any error in her Honour’s assessment as has been alleged. Her Honour had before her expert valuation and acoustic evidence. Both valuers adopted the same method of valuation, namely, a summation approach on a “before” and “after” basis. At [42]-[44], her Honour referred to the respondents’ expert valuation evidence given by Mr Allsop. She observed that, in relation to the Candoormakh Crescent residence, Mr Allsop had ascribed to it a value of $25,000. At [44], her Honour referred to Mr Allsop’s “after” valuation of the residence as “nil” because he had accepted Mr Cooper’s acoustic assessment that the house would be uninhabitable and, therefore, there would be no purchaser who would purchase it as a residence. He only attributed a nil value to it because the council in its development consent to the construction by the respondents of a new house some 300m from the new highway as required by the appellant, had imposed as a condition of consent that the residence be demolished. However, that fact would not have been known at the date of acquisition so that it is not surprising that her Honour held that she would consider that a “prudent hypothetical purchaser” would be prepared to pay $10,000 for the residence in the “after” scenario as at that date.

39 Her Honour, at [45]-[46], next considered Mr McDonald’s evidence. She rejected his opinion that the residence would be likely to fetch $50,000 in the “after” market because she considered that the substantial noise impact was such that she did not think that a prudent hypothetical purchaser would be prepared to pay more than $10,000 as it was uninhabitable.

40 It is true that in making her finding as to the price that a prudent hypothetical purchaser would pay for the residence in the “after” situation, her Honour did not expressly refer to the “hypothetical seller”, being the countervailing expression used in s 56 of the Just Terms Act. If her Honour overlooked any part of the requirements of s 56, that “market value” is the price at which a “willing but not anxious seller” would have sold to a “willing but not anxious buyer”, then she would have erred in law. The question is whether it can be said that her Honour in fact overlooked that aspect of the provisions of the section. For our part, we do not consider that it can be said that she so erred.

41 Her Honour was the judicial valuer for the purposes of determining the compensation to be paid. She was aided in her determination by the valuation evidence to which we have referred. No attack based on principle was made on that evidence. In particular, no challenge was made to the evidence on the basis that either valuer had overlooked the price at which the statutorily deemed seller would sell, although neither made reference to such seller. In the absence of any such challenge, it must be assumed that the valuers well understood the valuation principles upon which they were required to value the residence. In our opinion, her Honour’s determination of value should be approached in the same way.

42 It is also apparent from her Honour’s reasons that she was persuaded that the new highway would have a substantial noise impact on the residence. Her Honour was not obliged to accept Mr Allsop’s “nil” “after” value simply because he considered the residence to be uninhabitable. Nor was she required to accept Mr McDonald’s “after” value of $50,000 on the basis that like the Candoormakh Crescent dwelling, the residence was habitable when it was not. Her Honour considered that the “after” value was $10,000, having regard to the substantial noise impact. That valuation fell within the range of values that the respective experts had given. It is not inconsistent with her finding that, unlike the Candoormakh Crescent dwelling valued by Mr McDonald, the residence was uninhabitable. It could be used for a non-residential purpose as we have said. In our opinion, no error of law or valuation principle has been demonstrated in her Honour’s determination.

Grounds 6-8: Valuation of the bails/dairy show complex

43 Her Honour adopted a similar approach in relation to the value of the bails/dairy show complex. She first described the complex as being an aged, weatherboard and steel roofed building, with attached yards, that was used for the preparation of cattle to be shown to the respondents’ clients: see [48]. Her Honour observed that both valuers agreed that the “after” value was nil. Her Honour then referred to their evidence, noting that Mr Allsop had ascribed a “before” value of $40,000 and Mr McDonald a “before” value of $15,000. However, Mr McDonald had not been able to inspect the property. In those circumstances, her Honour accepted Mr Allsop’s “before” valuation of $40,000. She noted Mr Allsop’s evidence that the replacement cost of the complex would be approximately $64,000. At [52], she then indicated that there was a remaining issue as to whether an amount of $40,000 by way of compensation should be allowed under s 55, or whether the compensation should be based upon the replacement value of $64,000 pursuant to s 59(f). Her Honour concluded at [83] that the replacement costs of the show complex could be claimed under s 59(f) and that it was appropriate to award that amount as an item under s 59(f).

44 The appellant contends that her Honour’s finding was affected by two errors. First, it was submitted that as the building was a fixture on the acquired land, it should have been valued as part of that land. However, on the summation approach adopted by the valuers, it was correct to award compensation on the basis that the value of the building was $40,000 and that amount should be added to the market value of the acquired land which the valuers had valued without improvements.

45 It was submitted that her Honour fell into further error because by allowing for the cost of a new complex, the residue land must necessarily be increased in value by the same or similar amount.

46 This submission was explained by saying that the respondents were overcompensated by $64,000 awarded to replace the bails/dairy show complex; yet, in the valuation of the residue land in the “after” scenario, the trial judge did not take into account the fact that there was a new building on that land. It was submitted, therefore, that the value of the new complex should appear in the “after” column where her Honour set out the items that led to her determination as to the compensation payable. The appellant acknowledged that on this approach, it was also necessary to award the respondents $40,000 for the loss of the building as part of the market value for the acquired land. It was thus submitted that the approach adopted by her Honour led to overcompensation in the sum of $24,000.

47 Senior counsel for the respondents conceded that they (the respondents) never sought the cost of replacement of the bails/dairy show complex. He therefore accepted that there should be a correction to the compensation awarded by her Honour in the amount of $24,000 ($64,000 minus $40,000) as claimed by the appellants.

Conclusion on the appeal

48 Subject to the adjustment that needs to be made in respect of the dairy/bails complex, the appellant has failed on the appeal.

The cross-appeal

49 The respondents raised three matters by way of cross-appeal. First, they submit that her Honour erred in her interpretation and application of s 59(f). Secondly, they submit that her Honour erred in relation to her approach to relocation costs; thirdly, they submit that her Honour erred in law in relation to certain of the noise issues.

Grounds 1, 2, 3 and 4: The proper approach to the construction and application of s 59(f)

50 The noise affectation from the new highway was such that the respondents considered that they could not live in the residence. The appellant had proposed in its EIS to ameliorate the noise affectation by building a wall 700m long and 3.5m high. However, this proposal was not implemented because of the cost. Her Honour found that the noise to be created by 2006 was beyond the acceptable limits for habitation of the residence both by day and by night.

51 As a result, the respondents needed to move the residence. The initial plan to remove the residence itself to another position on the residue land was abandoned, due to the cost of having to construct a bridge of significant proportions across a gully to enable the building to be moved. The appellant then decided that a new residence be built at a location some 300m from the boundary of the residue land with the new highway. That distance was dictated by the appellant. The position of the new house required a less substantial bridge to be constructed across the gully so that the house could be accessed, together with the provision of services to the house. This gave rise to a claim for disturbance compensation. The actual items claimed were:

Cost of bridge across the gully $43,000
Cost to comply with DA $10,414
Disconnect electricity to old house $400
Connect electricity to new house $28,000
Septic at new site $8,000
Plus connection $3,000
Remove and relocate gazebo $4,000
Relocate the fences $29,900
Furniture removal (to new house) $550
Total $127,264

52 The respondents submitted that the costs of relocation was a financial cost reasonably incurred (or that might reasonably be incurred) relating to the actual use of the acquired land, as a direct and natural consequence of the acquisition within the meaning of s 59(f). They contended that because of the serious impact on the amenity of the residence due to noise, glare and lack of privacy as a result of it being only 55m from the new elevated highway, they were required to relocate with the consequential need to incur the cost of providing services and the like to the new dwelling. The respondents submitted additionally that the acquired land was part of its business and the use of the residue land and, in particular, the residence, was so intimately connected with the business that had been carried out on the acquired land that it was “an actual use of the [acquired] land within the meaning of s 59(f)”.

53 The appellant submitted that the respondents’ claim under s 59(f) ought to be rejected on four bases: first, because the financial costs claimed would not be reasonably incurred in relation to the actual use of the acquired land, the appellant’s submission being that the costs claimed related to the use of the residue land and not the acquired land; second, the respondents’ claim was for a loss resulting from a nuisance arising from the public purpose, namely, the upgrade of the old highway to the new, not as a direct and natural consequence of the acquisition; third, the loss in value of the residence as a result of the noise from the new highway had been taken into account in the “before” and “after” valuation approach and that the new location of the respondents’ dwelling had nothing to do with the actual use of the acquired land, that is, its use as a cattle breeding facility; and fourth, the construction of the new road to the new house and the connection of various services constituted improvements to the residue land and were not compensable under s 59(f).

54 Section 55(f) provides:

“ 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):

(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.”

55 Section 59(f) provides:

“Loss attributable to disturbance

In this Act:

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

(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.”

56 It has been held that disturbance costs may only be awarded under s 59(f) for costs relating to the actual use of the acquired land: see Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259; Mir Bros Unit Constructions Pty Limited v Roads & Traffic Authority of New South Wales [2006] NSWCA 314.

57 In Fitzpatrick, the respondent had purchased blocks of land over a number of years and held it for development purposes. The land was subsequently acquired by the Roads & Traffic Authority and there was a dispute as to the compensation payable under the Just Terms Act. The matter was heard at first instance by Lloyd J, who assessed the market value of the acquired land and deferred consideration of the amount payable for “loss attributable to disturbance”. The appellant paid the market value to the respondent who subsequently used that money to purchase another parcel of land. The matter returned to the Land and Environment Court for a determination of what compensation was payable for “loss attributable to disturbance” under s 59(f). An issue arose as to whether the respondent was entitled to the legal costs and stamp duty incurred in purchasing the replacement land. Lloyd J found that each of these items fell within s 59(f).

58 In that case, it was accepted by both parties that the expression “the land” in s 59(f) of the Just Terms Act was a reference to the acquired land. The question then was whether the claimed costs related to the actual use of that land as a direct and natural consequence of the acquisition.

59 Stein JA, after observing that the respondent’s business was that of a land developer, noted that the acquired land was part of its stock in trade constituting its “land bank”. In those circumstances, the holding of the land as part of its “land bank” for subdivision was “a use of the land in fact”. His Honour held, therefore, that that was sufficient to make the holding of the land “an actual use of the land” within s 59(f) of the Just Terms Act.

60 Brownie AJA accepted the respondent’s contention that as its business was that of developing land for profit, then if it wanted to continue in this business after the compulsory acquisition of part of its stock in trade, that is, the land it had acquired for development purposes, it had to purchase other land to replace that compulsorily acquired. His Honour concluded at [35] that where land is acquired from a person who uses the compensation paid for the acquisition to buy new land to carry on the same business as was formerly carried out upon the acquired land, then an expense incurred in purchasing the replacement land was a direct and natural consequence of the acquisition. It was not a consequence of a decision to invest in some way that was novel to the investor, so as not to be “a direct and natural consequence of the acquisition”. Stein JA also agreed with this reasoning of Brownie AJA, as did Ipp AJA (as his Honour then was).

61 In Mir Bros Spigelman CJ stated at [88] that “disturbance costs may only be awarded under s 59(f) for costs ‘relating to the actual use’ of the acquired land”.

62 There have also been first instance decisions where claims under s 59(f) of the Just Terms Act have been upheld where improvements located on the acquired land were relocated. Thus, in Peter Croke Holdings & Ors v Roads & Traffic Authority of New South Wales (1998) 101 LGERA 30, Bignold J considered that the costs of the relocation of display homes was recoverable under either s 59(c) or s 59(f).

63 In Besmaw Pty Limited v Sydney Water Corporation (2001) 113 LGERA 246, the respondent compulsorily acquired an easement over the appellant’s land which it used for extraction of construction sand. It also had a development consent for the property for development of the land as a tourist resort, with residential and commercial components.

64 Besmaw claimed an amount of approximately $1.5m, being the cost of providing alternate access to the land, claiming that its normal business activities would involve an alteration to the existing surface levels of the land affected by the easement, which would give Sydney Water Corporation the right to deny Besmaw physical access across the land. Sydney Water Corporation resisted the application on the basis that it was unlikely to act in accordance with the full extent of the rights it acquired under the easement and offered written assurances to that effect.

65 Sheahan J held that assurances were of little value and were not binding on its successors. His Honour found that the easement seriously impeded the possibility of Besmaw maintaining its access arrangements to its land for its sandmining or resort undertaking. His Honour concluded at [79] that having acquired the easement, it was reasonable for the Sydney Water Corporation to have guaranteed access to the bulk of the land. As neither the terms of the easement nor the correspondence between the parties provided that guarantee, his Honour concluded that the substantial disturbance claim, being the cost of the applicant itself providing alternate access to its land, that is, the residue land, was claimable under s 59(f).

66 It must be said, however, that Fitzpatrick was concerned with the meaning of “actual use” within s 59(f). In Mir Bros the approach of and the comment by Spigelman CJ was also focussed upon the distinction between the actual use as opposed to the potential use of the acquired land. Nonetheless, there are now two authorities of this Court where it has been either accepted or held that s 59(f) relates to disturbance costs relating to the use of the acquired land and not the residue land.

67 In the present case, the residence was located on the residue land and the claimed costs presently under consideration relate to costs associated with the relocation of the residence from one position to another on the residue land. The respondents’ argument is that the use of the residence was so intricately linked with running the business on both the acquired land and the residue land, that the expenses claimed fell within s 59(f).

68 The trial judge at [72] noted that the only cases where the Court had awarded compensation under s 59(f) where the compensation related to the use of the residue land were McBaron & Ors v Roads & Traffic Authority of New South Wales (1995) 87 LGERA 238 and Johnston v The Roads & Traffic Authority [2000] NSWLEC 111.

69 In McBaron, Talbot J held that, as a result of the acquisition, it was not practicable to maintain a dairy at its existing location on the residue land because of the manner in which the acquired land had divided the pasture land from the milking bails, requiring a significant movement of cows each day for milking purposes. In those circumstances, his Honour held that the residue land would suffer a decrease in value equivalent to replacing the milking bails and associated facilities, after making allowance for the residual value of what was already on the property. He considered that that could be factored into the valuation under s 55(f). His Honour considered that alternatively, the cost of a replacement dairy could be addressed as an element of the loss attributable to disturbance. He concluded at 247 that as the dairy building located on the residue land would lose its utility as a consequence of the acquisition of the acquired land, it was appropriate to allow for the cost of a new dairy, also on the residue land.

70 In Johnston, Cowdroy J held at [59] that the cost of the removal of a house from one part of residue land to the other was claimable under s 59(f). His Honour observed at [78] that claims under s 59(f) were potentially broad: see Marshall v Director General of the Department of Transport (2001) 205 CLR 603; [2001] HCA 37 at [38] where Gaudron J stated that statutory provisions conferring rights to compensation for injurious affection should be “construed with all the generality that their words permit”.

71 In our opinion, this Court should not accept the correctness of Johnston, which related only to the use of the residue land. It is contrary to the decisions of this Court in Mir and Fitzpatrick. However, the decision in McBaron is different. In our view, if the actual use of the residue land is so intimately connected with the actual use of the acquired land so that use of the one is dependant on use of the other, then that is sufficient to bring it within s 59 (f).

72 In the present case, the trial judge rejected the appellant’s argument that McBaron and for that matter, Johnston, were wrongly decided. She observed that it was clear that in McBaron, the use of the dairy was directly related to the use of the acquired land. However, her Honour distinguished McBaron from the facts of this case so that it did not follow, on her view that the same approach ought to be taken in relation to the relocation costs claimed in respect of the new dwelling. Her Honour concluded at [79]:

McBaron

73 Her Honour also found at [81] that having regard to the “before” and “after” approach adopted by both valuers, an element of injurious affection relating to the loss due to excessive noise had been included in the “after” valuation. In this regard, she applied the statement of Tobias JA in Roads & Traffic Authority (NSW) v Muir Properties Pty Limited (2005) 143 LGERA 192; [2005] NSWCA 460 at [103], where his Honour observed that often a “before” and “after” valuation exercise was conducted when part only of land was acquired and that on that approach “any injurious affection to the retained land by reason of the acquisition to the public purpose” was captured. However, this is not always the case as the summation methodology adopted by the valuers and her Honour demonstrated.

74 In our opinion, her Honour erred in three respects in her determination of the claim under s 59(f). First, although her finding at [79] that the reason that the respondents wished to build a new dwelling was due to the public purpose, namely, the new highway, and not because of the disruption to their business, was a finding of fact, we are of the opinion that her Honour asked herself the wrong question. Pursuant to s 59(f), her Honour was required to consider whether the respondents had reasonably incurred any other financial costs or might reasonably incur other financial costs relating to the actual use of the acquired land as a direct and natural consequence of the acquisition. The determination of that question is not determined by reference to the respondents’ ‘‘wish” in relation to the building of a new dwelling. Nor was it correct to ascertain the basis for the respondents’ “wish”, as her Honour appears to have done herself, when she found that the “wish” to build the new dwelling was due to the public purpose. The public purpose was the reason for the acquisition. Section 59(f) focuses on costs reasonably incurred relating to the actual use of the land as a direct and natural consequence of the acquisition.

75 The second error, in our opinion, was that her Honour assumed that the “before” and “after” values had encapsulated any injurious affection so that the claimed items had been included in the “after” value. Accordingly, to allow them under s 59(f) would involve “double dipping”. Her Honour’s assumption was based upon the comment of Tobias JA in RTA v Muir Properties quoted above. However, although the valuations undertaken by the valuers in this case were on a “before” and “after” basis, that methodology was applied to determine the market value of the acquired land under s 55(a) only. The valuations also adopted a summation approach in respect of the market value of the improvements including the residence. In such a case, it cannot be assumed that the items now claimed were captured in the market valuation of the realty. Indeed, it is difficult to see that they could have been, having regard to the separate basis of valuation adopted with respect to the market value of the residence. This is particularly so in relation to certain of the items, in particular the costs of the bridge, the costs of complying with the development application for the new dwelling and the relocation of fences.

76 Her Honour’s assumption that the claimed costs were caught up in the “before” and “after” valuation exercise appears to have affected her approach to the valuation exercise that she was required to undertake. In particular, she said at [80]:

Just Terms Act

Roads and Traffic Authority v Muir Properties Pty Limited

‘It is often the case that when only part of a dispossessed owner's land is compulsorily acquired, a "before" and "after" valuation exercise of the whole of that owner's land is conducted. In other words, the market value of the land before acquisition is determined (including the acquired land) as is its value after acquisition (excluding the acquired land). In this way the difference between the two values determines not only the market value of the acquired land but also captures any injurious affection to the retained land by reason of the acquisition for the public purpose.’”

77 Her Honour then said at [82]:

McBaron

78 Although the valuers adopted the “before” and “after” approach to the valuation exercise, as we have already observed they did so on what is referred to in valuation parlance as a summation basis. This involves taking each component to be valued and, instead of valuing them together, valuing each separately. The drawback of this methodology is that the exercise does not necessarily capture not only the market value of the components but also any injurious affection. That was the case here.

79 Thus, in his valuation report of 13 January 2005, Mr McDonald separately valued the land component of the property on the “before” basis and the residue land on the “after” basis. In so doing, he applied various comparable sales and determined the “before” value of the property at $750,000 or $40,000/ha as a rural home site. He then determined the “after” value of the residue land on the same rate per hectare. In fact he stated that he considered that a pro-rata rate for a reduction in the land value of the property was appropriate, namely, 4ha @ $40,000/ha = $160,000. There was nothing, he said, which made the property any less valuable in the “after” situation.

80 Accordingly, in his calculation of compensation, Mr McDonald determined the market value of the acquired land pursuant to s 55(a) in the sum of $257,000 which included the $160,000 difference between the area of 18.59ha pre-acquisition and 14.59ha post-acquisition.

81 At the same time he valued on a “before” and “after” basis each of the other components of the property including the residence, garage, former dairy bails, hay shed, machinery shed, yard complex and cattle chaser. Importantly, under the heading “Section 55(f) – Increase or decrease in value of other land”, he wrote “not applicable”.

82 On behalf of the respondents Mr Allsop adopted an identical summation approach. He valued the land component of the property separately from the improvements. Relevantly, he valued the land component “as cleared, fenced, water supply, internal roading, electricity” in the “before” situation in the sum of $700,000 or 18.595ha @ $37,500/ha and in the “after” situation in the sum of $550,000 or 14.59ha @ $37,500/ha. Eventually, the valuers agreed that the market value pursuant to s 55(a) of the Just Terms Act of the acquired land was $160,000: see [10] of the judgment.

83 Had the valuers approached the “before” and “after” valuation in the more conventional way, then the “after” value, on her Honour’s findings, would have needed to reflect the necessity to relocate the residence 300 metres from the new highway as the appellant required. The costs of that relocation (now claimed under the heading of disturbance) would have resulted in a lower value of the residue land in the “after” situation.

84 In other words, due to the injurious affection of the residue land by reason of the carrying out or the proposal to carry out the public purpose for which the acquired land was acquired, a hypothetical purchaser of the residue land would have discounted the price he or she would pay for that land due to the impact of the new highway on the residence rendering it uninhabitable and thus necessitating the construction of a new dwelling 300 metres removed from the highway boundary. That discount would directly reflect the extra costs involved in providing the very same services and facilities which the respondents now claim under s 59(f).

85 It is therefore wrong for the appellant to assert that her Honour misapplied the “before” and “after” methodology by failing to capture any s 55(f) injurious affection given the common approach of the valuers to that exercise.

86 It is equally wrong for the appellant to submit that to now allow the same costs as disturbance under s 59(f) as might have been taken into account under s 55(f), will result in an increase in the value of the residue land which will involve double-dipping or double-counting. This is not so. There would only be double dipping if injurious affection resulted in the “after” value of the residue land being reduced so that the differential between the “before” value of the whole property and the “after” value of the residue land increased and then disturbance in respect of the same costs as were reflected in the injurious affection of the residue land were awarded in addition.

87 It thus follows that the trial judge erred when at [89] she accepted the appellant’s submission that it would be a case of “double dipping” to allow as disturbance the cost of improvements to the residue land caused by the necessity to relocate the residence which had been rendered uninhabitable because those costs had been reflected in the loss of value of the residue land which had been incorporated into the assessment of the value of the improvements (presumably the residence) under s 55. No such loss of value of the residue land had been so incorporated. This error was more than an error of fact: it was an error of valuation principle.

88 The question still to be resolved at this point is whether the errors we have identified are sufficient to allow this aspect of the cross-appeal. The finding of error of law will not call for appellate intervention if, on the facts as found by her Honour, there was no basis for a claim under s 59(f). Central to the determination of this question is her Honour’s finding in respect of the relationship of the residue land to the acquired land. We have already referred to these facts above, but they need to be revisited for the purpose of resolving this question.

89 Her Honour makes the first of her findings in this respect at [78] where she says that:

McBaron

90 Her Honour distinguished this case from McBaron because of her finding that the respondents wished to relocate because of the road works. As we have said, that finding was, in our opinion, premised upon a wrong question. Her Honour did not make an express finding that the acquired land was not, or not sufficiently, related to the residue land although that may have been her intention. However, it is not self evident from her Honour’s reasoning that had she asked herself the right question in respect of the use of the acquired land and its connection with the residue land and, in particular, the use of the residence as an intimate part of the use of the acquired land and the residue land for the purpose of the respondents’ cattle breeding business, that she would have found an insufficient connection so as to bring it within McBaron.

91 Accordingly, we are of the opinion that her Honour having erred in the respects we have identified, these grounds of appeal ought to be allowed. As this Court has no power to make the necessary findings of fact to support the respondents’ 59(f) claim, the matter must be remitted to the Land and Environment Court to make those findings if thought appropriate.

Ground 5: Failure to have regard to use of acquired land as a buffer

92 The respondents also contended that if, on its proper application, s 59(f) was limited to the “use of the acquired land only”, then her Honour erred at law in the application of s 59(f) in failing to determine that one of the uses of the acquired land was the protection from and amelioration of noise impacts from the old highway upon the residence. In other words, the acquired land acted as a noise buffer between the old highway and the residence.

93 As we understand it, senior counsel for the respondents conceded that this argument had not been raised at trial. However, the respondents’ submission at trial that their residence had been rendered uninhabitable as a result of the acquisition because of the noise, glare and lack of privacy due to the proximity of the residence to the new highway, raises this very matter. Indeed, in our opinion it is the issue raised in Ground 12 of the appeal about which there was no complaint. Ground 12 was in the following terms:

“Her Honour erred at law in determining that the ‘relevant test’ is not what the Cross Appellants perceive in relation to noise but rather what decisions a hypothetical purchaser would make based on this information [Para 35], when valuing the land in the ‘After’ situation.”

94 If there was to be an exposure of the residence to noise, glare and lack of privacy because of the acquisition of the acquired land, as her Honour found, then the relocation costs claimed under s 59(f) must have related to the actual use of that land. Her Honour’s failure to take these matters into consideration, in our opinion, involved an error of law in her construction of that provision. Her Honour’s failure to do so also indicates that she asked herself the wrong question in determining whether compensation was claimable under s 59(f). For that reason, we would also allow Ground 5.

Ground 6: Whether costs of relocating fixtures from residue land recoverable under s 59(c)

95 It was next contended that her Honour erred in law in determining that the provision of s 59(c) related solely to relocation costs only from the acquired land. Her Honour dealt with this argument at [86], where she found that the respondents were required to show that they had incurred financial costs “in connection with relocation from, or in a way closely related to, the use of the acquired land” (emphasis added).

96 We have already set out s 59(c) above. However, it is convenient to repeat it here. It is also necessary to consider s 59(a) and (b), so as to understand the argument that was advanced by the respondents in support of this ground of appeal. Section 59 provides that loss attributable to disturbance of land means, inter alia:

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

(b) valuation fees reasonably incurred by those persons in connection with the compulsory acquisition 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)”

97 It is apparent from s 59(a) that the reference to “those persons” in (b) is a reference to the persons entitled to compensation. Subsection (a) permits the recovery of legal costs reasonably incurred in connection with the compulsory acquisition of the land. Subsection (b) allows for compensation for valuation fees reasonably incurred in connection with compulsory acquisition of the land. The words “in connection with” are words of wide meaning. In a case such as the present, where the property was severed by the acquisition, the legal costs and valuation fees that related to the residue land would be recoverable as costs and fees incurred “in connection with the compulsory acquisition of the land”.

98 The question which arises, therefore, is whether, for the purposes of subsection (c), financial costs incurred in connection with the relocation means relocation physically from the acquired land, or whether it includes the costs reasonably incurred in connection with the relocation of persons entitled to compensation, regardless of whether it is from the acquired land or not.

99 It is apparent that her Honour at [86] placed the same construction upon s 59(c) as she did upon s 59(f), that is, costs incurred or to be incurred in relation to the residue land could only be claimed if there was a close connection between the use of the residue land and the acquired land. In our opinion, that must be correct. Section 59 has a common introduction. It provides that “[l]oss attributable to disturbance of land” means any of the matters specified in (a) to (f). As has been held by this Court in relation to para (f), the “land” is the acquired land. It bears the same meaning throughout the section.

100 However, her Honour considered that costs could be claimed interchangeably between paras (c) and (f). In our opinion, this is not necessarily so. If it were, there would be no point in having both provisions. Section 59(c) relates to relocation costs of persons who are entitled to compensation as a result of a compulsory acquisition.

101 Section 54 provides that the amount of compensation to which a person is entitled is that amount, having regard to all relevant matters under Pt 3 of the Just Terms Act that will justly compensate the person for the acquisition of the land. If a person is required to relocate because of the injurious affection caused by the acquisition and, in doing so, incurs costs that are not otherwise reflected in the “before” and “after” valuation, then that claim can be made under s 59(c). It does not matter in that instance that the relocation is from one part of the residue land to another. Provided the connection with the acquired land is sufficiently established, then such costs would be claimable.

102 However, her Honour did not consider the matter on that basis. Rather, she subsumed her finding in respect of the claim under s 59(c) into her reasoning in respect of s 59(f). We have already explained why we consider that her Honour erred in law in respect of the claim under s 59(f). For that reason also, we consider that her Honour erred in law in respect of her determination under s 59(c).

103 We should add that we consider the claim under Ground 12 could also be advanced under this Ground.

104 It follows, in our opinion that first, her Honour erred in her interpretation of s 59(c) and, second, erred in her conclusion that the claim for disturbance under s 59(c) fails.

Ground 7: Alleged “double dipping” in claim for costs of new services to the new dwelling

105 The trial judge found that if would be “double dipping” for the respondents to claim for the new services to the new dwelling as those items were improvements to the property. Her Honour relied upon Richardson v Roads & Traffic Authority of New South Wales (1996) 90 LGERA 294.

106 In that case, Talbot J said at 303:

Just Terms Act

107 We have dealt with this issue above. We would therefore merely repeat that in this case the respondents were not compensated for building a new dwelling so that the services were not part of any compensation to which they were otherwise entitled. Nor was it suggested that the value of the residue land increased as a result of these services being supplied to the new dwelling. Nor, in our opinion, was there any evidence that the “loss of value” was incorporated into the assessment of the market value of the improvements under s 55(a). Again, we consider that her Honour has made an assumption that this is so. A finding has to be made on evidence and it is not sufficient for a trial judge to make a finding on the basis of an underlying valuation assumption unless the assumption in fact applies to the land in question. To adopt such an approach denotes legal error.

Grounds 8-10: Relevance of noise control measures to assessment of compensation

108 The trial judge at [32] and following of her judgment dealt with the question of what a hypothetical purchaser would do in relation to noise at the residence. She considered that at the date of acquisition, a hypothetical purchaser would have had available to him or her a number of documents relating to noise measurement criteria for road traffic noise, such as the Environmental Criteria for Road Traffic Noise; the Environmental Noise Management Manual; and the Noise Guide for Local Government, published by the Department of Environment and Conservation. Her Honour also found that the hypothetical purchaser would be likely to obtain the advice of an acoustics expert. The respondents accept that a hypothetical purchaser would have obtained the advice of an acoustics expert and that that expert would have referred to such noise criteria material.

109 At [35], her Honour noted that both noise experts agreed that the noise criteria in Table 1 of the Environmental Criteria for Road Traffic Noise and condition 56 of the conditions of consent could not be met even with ameliorative measures. It also appeared that there was a real doubt as to whether the passive outdoor area criteria could be met with acceptable measures. Her Honour considered therefore that the noise affectation was likely to be an issue in respect of which the hypothetical purchaser would act very cautiously. (Her Honour’s reference to condition 56 was a reference to condition 56 of the development consent granted by the Minister for the proposed upgrade of the old highway).

110 At [36] and following of the judgment, her Honour then dealt with the topic that she described as the “RTA measures to ameliorate noise”. She observed that the Environmental Noise Management Manual provided that the acoustic treatment of individual dwellings could be considered as a road traffic noise control option by the RTA. Her Honour noted, however, that the acoustic treatments provided by the RTA in accordance with the provisions of the Manual were limited to fresh air ventilation systems (not air conditioning), upgrade of windows and glazing, upgrade of window and door seals, the sealing of wall vents and the installation of external screen walls. The Manual indicated that, in most cases, the upper limit for such acoustic treatments per residence was $20,000 where the external noise would exceed the target noise by more than 10dBA. Her Honour found that it was clear that the noise level would exceed that specification when the new highway was completed.

111 The appellant had argued before her Honour that a hypothetical purchaser would be aware of the provisions in the Environmental Noise Management Manual and would expect to obtain $20,000 for acoustic treatment to the residence. Presumably this submission was directed to ensuring that any order made by her Honour took such an amount into account so as not to overcompensate the respondents in determining the compensation payable under the Just Terms Act.

112 Her Honour considered, at [38], that a hypothetical purchaser would factor in an element of risk as to whether the RTA would agree to pay the full amount of $20,000. She thus found that such a purchaser might be reasonably likely to assume that the sum of $10,000 would be payable by the appellant under its environmental noise management practices for noise control measures.

113 As we have already indicated, it is not entirely clear what relevance this finding had in her Honour’s judgment, except for the suggestion that it could be the amount she took into account as the “after” value of the residence. We have already dealt with and rejected that suggestion.

114 However, the point raised by the respondents under these grounds of appeal is that there was no evidence that the Minister would pay to the owners of the respondents’ land compensation for the noise impact, because it was above the relevant criteria.

115 The respondents point out in their written submissions that, although Mr Atkins, the expert retained by the appellant, referred to various methods that the appellant could use to ameliorate the impact of noise such as by acoustically sealing windows, there was no reference in any report to the payment of compensation pursuant to the practices referred to in the Environmental Noise Management Manual.

116 In our opinion, her Honour was entitled to take into account the likelihood of such compensation being paid. It was an inference available to be drawn from the evidence in the case. Although it follows that these grounds of appeal should be rejected we do not believe, given what we consider to be her Honour’s approach to the “after” value of the residence, that the likelihood of the payment of the compensation referred to has any relevance to or bearing upon her determination of that value.

Grounds 11-12: Valuation of land in the “after” situation

117 The respondents, in their written submissions, deal with Grounds 11 and 12 together. We have already dealt with Ground 12 in conjunction with Ground 5. To the extent that Ground 11 deals with a different matter, it appears to relate to the valuation of the residence in the “after” value. In that case, the correct test is what decision a hypothetical purchaser would make based on the information and/or advice obtained both from an acoustics expert and from the relevant noise management documentation. We do not consider that any error of law has been made by her Honour as alleged in this ground.

Ground 13: “Option 2”: Alternative basis of claim: injurious affection s 55(f)

118 The trial judge at [39] dealt with the issue of the market value of improvements on the property. She observed that Mr Allsop, had provided alternate valuation methods in relation to the market value of the improvements, namely, a valuation on the basis that the residence had a nil value in the “after” situation and, alternatively, that the residence would actually physically be relocated. Her Honour noted that the second basis was not pressed by the respondents and she would therefore not consider it.

119 The respondents contended in their written submission that if the matter is to be remitted, then they ought not to be seen to have abandoned the methodology based upon actual relocation of the residence. The appellant does not contend that the respondents should not be able to argue the alternative basis. Rather, it submits that that claim was not relevant. In our opinion, because the respondents have succeeded on their cross appeal, they ought to be allowed to present their alternative case on the remitter if they wish to do so.

120 Accordingly, the orders we propose are:

1. Appeal dismissed;

2. Cross-appeal allowed;

3. Set aside orders 1 and 3 made by Pain J on 6 February 2006;

4. Remit the matter to the Land and Environment Court for redetermination in accordance with these reasons;

121 BASTEN JA: On 30 April 2004 the Appellant compulsorily acquired an area of land owned by the Respondents near Nabiac, on the NSW north coast. The land was required for upgrading the Pacific Highway which, in relation to the Respondent’s land, involved a straightening of the highway so as to bring it 35 metres closer to the Respondents’ house.

122 No agreement was reached as to the compensation payable to the Respondents and on 17 August 2004 class 3 proceedings were commenced in the Land and Environment Court. On 6 February 2006 orders were entered pursuant to which the amount of compensation payable under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (“the Acquisition Act”) was calculated at $520,629.80. An amount already having been paid, the Court ordered payment of the balance, namely $134,022.20.

123 The land acquired involved 21.5% of the land on which the Respondents conducted a cattle stud farm. The primary issue in dispute in the Land and Environment Court was whether the proximity of the new highway to the residential dwelling on the land rendered the dwelling uninhabitable, thereby justifying and requiring its removal to another part of the property.

124 The valuations undertaken by two valuers, one for the Appellant and one for the Respondents, involved ‘before and after’ valuations of the property, thereby encapsulating in a single figure both the value of the acquired land and any injurious affection in relation to the residual land. There were also claims for disturbance, which did not fall within that calculation of market value.

125 There was another aspect of the process of valuation which is relevant for purposes of the appeal. The ‘before and after’ calculation was undertaken on a basis described as ‘summation’. This involved the attribution of separate values to the land, and each of the buildings on it, including the residential dwelling. The market value of the property was then identified as the sum of the component parts. Two comments may be made about this approach. First, there is an air of artificiality about the dissection of a property into component parts and the ascription of a particular value to each part. That is not the say that the approach is wrong, but merely that the final value must be given independent consideration to ensure that it adequately and properly reflects the market value of the land, together with any other matters requiring assessment for the purposes of s 55(a), (c) and (f) of the Acquisition Act: see Johnston v Roads and Traffic Authority [2000] NSWLEC 111 at [33]-[36] Cowdroy J quoting Waddell AJ in Veins v Gosford Shire Council (1976) The Valuer 756, 758.

126 Secondly, additional caution is required in the present case in which there was agreement as to the before and after valuations of the land itself and disagreement as to the value of the improvements. There was a potential inconsistency in the approach of the valuers in this regard. Thus, the valuation of Mr McDonald, the valuer instructed by the Appellant, placed a value of $50,000 on the residential dwelling, after the acquisition. By contrast, Mr Allsopp, instructed by the Respondents, said the residence had no value after the acquisition, apparently on the basis that it was uninhabitable. However, on the same basis, the land presumably continued to enjoy value as having capacity for residential use, although a purchaser would no doubt take account of the likely expense involved in providing access and essential services to a new home site. Mr Allsopp appears to have taken this into account by reducing the ‘after’ valuation by an amount to account for the building of a bridge across a hollow, but not in other respects. There was therefore a level of uncertainty as to the extent to which certain elements had been incorporated into the market value of the land after acquisition, and the extent to which they had not, leaving an assessment to be made by way of allowance for disturbance: see Roads & Traffic Authority v Muir Properties Pty Ltd [2005] NSWCA 260; (2005) 143 LGERA 192 at [103] (Tobias JA, McColl JA and Hunt AJA agreeing).

127 At the heart of the appeal, were three issues relating to the valuation of the residence, after the acquisition. These, as identified by the Appellant, were as follows:

(1) the assumption of uninhabitability after the acquisition was based on the findings of acoustic experts made after the acquisition, which were not properly admissible;

(2) there was manifest error in rejecting a comparable sale relied upon by the Appellant’s valuer, and

(3) treating the residence as having no value after the acquisition was manifestly absurd, given that the residence was significantly noise affected by the old highway and that the new highway was not so much closer or so different in its effects as to justify the conclusion reached.

Admissibility of acoustic evidence

128 The Appellant argued that the acoustic evidence should have been rejected, because it was irrelevant. Although this issue seemed to be addressed in similar terms by the Respondents, as an evidential proposition, the argument was misconceived. Because the proceedings fell within class 3 of the jurisdiction of the Land and Environment Court, the procedure in that Court was prescribed by s 38 of the Land and Environment Court Act 1979 (NSW), which relevantly provided as follows:

38 Procedure

(1) Proceedings in Class 1, 2 or 3 of the Court’s jurisdiction shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and as the proper consideration of the matters before the Court permit.

(2) In proceedings in Class 1, 2 or 3 of the Court’s jurisdiction, the Court is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate and as the proper consideration of the matters before the Court permits.

129 The effect of provisions such as these may need to be reconciled with statutory rights of appeal with respect to questions of law: see Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 at 29 (Gleeson CJ and Handley JA); Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at [49] (Gleeson CJ and McHugh J) and see Italiano v Carbone [2005] NSWCA 177 at [70] and [76]. The nature of the appeal from the Land and Environment Court will be considered further below; in the light of s 38(2), it should not be understood to encompass an appeal against a decision with respect to the admission of evidence.

130 If it could be said that the trial judge had placed significant weight on a consideration which should not have been considered, there might be an error which would attract the intervention of the Court. However, although the expert assessment of noise levels needed to be approached with caution, it could not be said that a post-acquisition recording of noise levels was necessarily irrelevant.

Rejection of the comparable sale

131 The second matter on which the Appellant placed reliance in the course of the hearing was her Honour’s rejection of the valuation evidence given on behalf of the Appellant. However, before turning to that evidence, it may be noted that her Honour ascribed a value of $10,000 to the house following the acquisition. Why she did so is not entirely clear. In the context of considering Mr Allsopp’s evidence, and noting that in his view the house would be uninhabitable, she stated at [44]:

“I have already held that I consider a prudent hypothetical purchaser would be prepared to pay $10,000 in the ‘after’ situation for the house.”

132 The figure of $10,000 appears to have come about as a result of a long consideration of evidence tendered by the Respondents, who sought to demonstrate that “the existing house … on the residue land would be uninhabitable as a result of the highway extension”: at [15]. In addition to considering the acoustic reports, her Honour also referred to the practice of the Appellant in providing up to $20,000 for acoustic treatment in relation to affected residential dwellings. She stated at [38]:

“I consider that a hypothetical purchaser would factor in an element of risk as to whether the RTA would agree to pay the full amount of $20,000. I consider an amount of $10,000 is reasonable to assume as a sum a hypothetical purchaser may receive for noise control measures.”

133 It was following that conclusion that her Honour turned to the new topic involving the market value of the Respondents’ dwelling. However this appears to be the source of the $10,000 figure and her Honour seems to have accepted that the house was otherwise worthless. To do so, she needed to take into account, at least so as to reject, the evidence of Mr McDonald that a comparable property at 23 Candoormakh Crescent, Nabiac, had sold approximately two months before the acquisition, in relation to which Mr McDonald had assigned a value of $50,000 to the house. Her Honour had noted, in relation to Mr Allsopp’s evidence at [43]:

“In relation to the Candoormakh Crescent house, Mr Allsopp ascribed a value of $25,000. The Candoormakh Crescent house consisted of a three bedroom weatherboard residence very close to the highway and subject to highway noise.”

134 When her Honour came to assessing the value of the residential dwelling on the Respondents’ property, her conclusion at [47] was as follows:

“In relation to the ‘after’ value, I do not consider the sale at Candoormakh Crescent relied on by Mr McDonald is indicative that a sale of this property, which is of a far superior character, is likely to fetch $50,000 in the market. Given the substantial noise impact of the highway upgrade on the [Respondents’] residence, which will render the outdoor area around the house unusable without extremely intrusive walls and substantially impact on the day and night time amenity inside the house, I do not consider a prudent hypothetical purchaser would be prepared to pay more than $10,000. I consider the ‘after’ value is $10,000.”

135 This reasoning involves two steps which appear to demonstrate error. The first is that it seems to be clear that the house was either inhabitable (in which case it had a value between $25,000 and $50,000) or it was uninhabitable, in which case it had no value. There was no suggestion that the RTA would provide, or that a hypothetical purchaser would expect to be provided, with $10,000 to provide acoustic treatment to an uninhabitable house. Further, when considering claims for disturbance which involved relocating the existing dwelling, her Honour rejected the claims, not because the existing dwelling did not need to be relocated, but because the expense had otherwise been included in the valuations.

136 However, the Appellant does not complain of the ascription of $10,000 to the value of the dwelling, but rather challenges the rejection of the value arrived at by the comparable sale at Candoormakh Crescent. In the passage set out above, her Honour rejected the comparable sale as indicative of the value of “this property, which is of a far superior character”. Following the logic of her Honour’s reasoning, the reference to the “far superior” property might have been thought to be a reference to the Candoormakh Crescent property: if, on the alternative reading, the affected property were of a far superior character, the comparable sale at Candoormakh Crescent would appear to provide a floor to the valuation of the affected property, rather than something to be rejected out of hand. The logic of the conclusion then requires that Candoormakh Crescent was the property of a far superior character. However, that was not the evidence. Mr McDonald described the affected property as “superior to” Candoormakh Crescent: letter to Clayton Utz, 7 November 2005, p 2. In his oral evidence, Mr McDonald said that the Candoormakh Crescent residence was “inferior” to the affected property: Tcpt, 9 November 2005, pp 27(15) and 28(10)-(45). That opinion was not contradicted.

137 Although this appears to be a clear error, the difficulty which faces the Appellant is that it appears to be an error on fact. The question is, therefore, whether this error can attract the jurisdiction of this Court, to which consideration should now be given.

Jurisdiction on appeal

138 The right of appeal to this Court is defined by s 57 of the Land and Environment Court Act, other than for class 4 proceedings. So far as relevant, that provision reads:

57 Class 1, 2 and 3 proceedings—appeals

(1) A party to proceedings in Class 1, 2 or 3 of the Court’s jurisdiction may appeal to the Supreme Court against an order or decision (including an interlocutory order or decision) of the Court on a question of law.

(2) On the hearing of an appeal under subsection (1), the Supreme Court shall:

(a) remit the matter to the Court for determination by the Court in accordance with the decision of the Supreme Court, or

(b) make such other order in relation to the appeal as seems fit.

139 The language of sub-s 57(1) is commonplace and apparently straightforward. However, the apparent simplicity is deceptive. The language of “order or decision” usually refers to a final or operative order or decision affecting the legal rights of the parties to the proceedings. However, the reference to interlocutory orders or decisions would be inconsistent with that approach. Further, it seems to be the “decision” and not the appeal, which must be “on a question of law”: see, in relation to a similar provision in s 54 of the Government and Related Employees Appeal Tribunal Act 1980 (NSW), Metropolitan Water Sewerage and Drainage Board v Histon [1982] 2 NSWLR 720 at 725F-G (Samuels JA). On the other hand, in Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority (NSW) [2006] NSWCA 314 at [27], also dealing with s 57(1), Spigelman CJ noted:

“It is important to note that the jurisdiction is not confined to an error of law.”

140 One question is whether the jurisdiction extends to any error of law, in circumstances where it is not possible to identify a question of law which, either expressly or implicitly, has been resolved by the Court below. In most cases, questions of law are not separately identified for determination, and a final operative decision will frequently involve mixed matters of law and fact: Maurici v Chief Commissioner of State Revenue (2002) 212 CLR 111 at [8]. In Maurici the Court further concluded that for the primary judge to ignore “a principle of assessment of compensation for compulsory acquisition” would constitute a point or question of law in relation to a valuation of land for the purposes of s 56A of the Land and Environment Court Act. That provision concerns an appeal from a Commissioner to the Court, but it is worded in relevantly identical terms to s 57. At least by implication, the statutory provision must involve a decision on a point or question of law which has been determined erroneously and, in that sense, involves an error of law.

141 The present case falls into a somewhat different category. The error committed by the primary judge, on the analysis set out above, was to mistake the undisputed evidence before her. Did such an error involve a point or question of law?

142 The error could no doubt be described as an error of fact: however, it is more than that. In the context of a conflict between two experts, her Honour was entitled, as a matter of judgment, to choose the opinion of one or the other, or to formulate her own opinion based on their evidence. What she was not entitled to do was simply to ignore the evidence of one, without explanation. As Gummow and Callinan JJ explained, in relation to a failing of an administrative tribunal, in Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at [23] and [24]:

“Mr Dranichnikov contends in this Court that the Tribunal misstated and failed to deal with the case presented to it. We accept this to be so. … It is clear that the Tribunal misunderstood and failed to deal with this important aspect of Mr Dranichnikov’s case.

To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice.”

143 Kirby J in Dranichnikov, at [87], agreed that “a fundamental mistake at the threshold in expressing, and therefore considering, the legal claim propounded by an applicant” will be a jurisdictional error and will involve “a constructive failure of the decision-maker to exercise the jurisdiction and powers given to it”. His Honour continued at [88]:

“Obviously, it is not every mistake in understanding the facts, in applying the law or in reasoning to a conclusion that will amount to a constructive failure to exercise jurisdiction. But where, as here, the mistake is essentially definitional, and amounts to a basic misunderstanding of the case brought by an applicant, the resulting flaw is so serious as to undermine the lawfulness of the decision in question in a fundamental way.”

144 Hayne J agreed with the reasons of Gummow and Callinan JJ. (Gleeson CJ dissented.) See also NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; (2005) 80 ALJR 367 at [171] (Callinan and Heydon JJ).

145 This approach is consistent with the view that there is procedural unfairness where information is used in a way which could not reasonably be expected by one party and that party is given no opportunity to respond to the intended use: see Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at [142] (McHugh J) and Muin v Refugee Review Tribunal (2002) 76 ALJR 966 at [128]-[134] (McHugh J).

146 In the present case, having rejected the opinion of Mr McDonald, on the basis of a misunderstanding, her Honour was left with the evidence of Mr Allsopp that the residence was uninhabitable, as a result of the intended use of the acquired land. The question is whether such an error is reviewable in these proceedings.

147 First, it is clear that the decision against which the appeal is brought is the assessment of compensation and the order to pay a specified amount. The reduction now sought involves a challenge to a matter of fact, namely whether the house was habitable after the acquisition. The conclusion that it was not was reached, not by misapplication of a legal principle of assessment of compensation, but by procedural unfairness of a kind which might justify an order in the nature of certiorari or prohibition, were the Land and Environment Court an inferior court or an administrative decision-maker. However, it is described as a “superior court of record”: Land and Environment Court Act, s 5. On the other hand, the Court is a court of limited jurisdiction and there is a question as to whether this Court, in the exercise of its supervisory jurisdiction, could grant relief to prevent a manifest excess of jurisdiction on the part of a judge of the Land and Environment Court.

148 In relation to the Commonwealth jurisdiction, the assumption of such a power by the High Court may be seen to derive from the jurisdiction conferred on it by s 75(v) of the Constitution, which allows and requires that Court to exercise supervisory jurisdiction over Commonwealth officers, including a judge of a superior federal court: see The Queen v Watson; Ex parte Armstrong (1976) 136 CLR 248 at 263 (Barwick CJ, Gibbs, Stephen and Mason JJ). However, the fact that a statutory court of limited jurisdiction is called a ‘superior court’ will not prevent prohibition to prevent an excess of jurisdiction on the part of a statutory State court. Thus, in Attorney General (Qld) v Wilkinson (1958) 100 CLR 422 at 425, Dixon CJ stated:

James v South Western Railway Co

149 That principle was applied to the Land and Valuation Court in Ex parte Tooth & Co Ltd; Re the Council of the City of Sydney (1963) 80 WN (NSW) 572 at 573 (Herron ACJ, Macfarlan J agreeing) and at 579 (Hardie J). The principle was also applied to the Land and Environment Court in Lowy v Land and Environment Court (NSW) (2002) 123 LGERA 179 at [17] (Handley JA).

150 That being so, one would expect relief to be available under s 57 in relation to both an excess or want of substantive and procedural powers. Despite s 38 of the Land and Environment Court Act, there is an implied statutory obligation on the Court to accord procedural fairness to a litigant.

151 The jurisdictional limits of a statutory court involve questions of law and fact. Whether or not a court has exceeded its jurisdiction and powers is at least a mixed question of law and fact and involves the identification of the legal limits of its powers. Accordingly, the error identified above is one which can be corrected by this Court on an appeal under s 57 of the Land and Environment Court Act.

Relief

152 The error so identified permits the Court to set aside the judgment in the Court below, if it is a material error. Materiality is clearly established, because the error involved an ascription of no value to the residential dwelling after the acquisition, whereas, on the alternative view presented by the expert valuer, the dwelling had a value of $50,000. Even on the view of Mr Allsopp, if the comparable sale at Candoormakh Crescent was relevant, the value of the dwelling would have been $25,000. However, the possibility remains open that, dealing with the evidence correctly, her Honour might still reject the opinion of Mr McDonald or, alternatively, adopt it but accept a lower value. These are matters for determination by the trial Court as matters of fact.

153 Separate issues were raised on the cross-appeal as to whether her Honour was correct in rejecting claims for disturbance resulting from the need to relocate the premises, on the basis that such a need were accepted. It is not necessary to determine that question for present purposes and indeed it may not be possible to do so until the necessity for relocation has been properly addressed. If relocation were reasonably necessary, it was undeniably necessary also to provide access and essential services at a new site, whether that were the site selected by the Respondents or an alternative site reasonably available at a lower cost. Her Honour rejected these claims on the basis that they had already been accounted for in the valuation exercise. Whether they had been or not is a question not easily resolved. Nor, if there be error, does it clearly involve a question of law. Cost does not equal value, but the cost of laying services may have increased the value of the land. If that were the case, the willing but not anxious purchaser, in offering to purchase land with an unusable dwelling, might place the same value on the land with or without the relocated services because, although the land with services would have a higher value, the higher value would be equivalent to the cost of installing the services.

154 The difficulty in knowing how the valuers took these matters into account, if they did, flows in part from the summation approach and the ultimate agreement between the parties that the values placed on the land, both before and after acquisition, being the higher values accepted by the Appellant’s valuer, constituted agreed values, so that no question was raised as to the precise basis of the valuation of the land alone.

155 I would remit the matter to the Land and Environment Court so that the assessment of compensation can be undertaken afresh. On that basis it is not necessary to uphold the cross-appeal, as the issues it raises can be dealt with at the rehearing.

156 Accordingly, I would propose the following orders:

(1) Appeal upheld and judgment and orders of Land and Environment Court set aside.

(2) Matter remitted to the Land and Environment Court for rehearing according to law.

(3) Costs in the Land and Environment Court to be determined by the trial judge at the rehearing.

(4) Respondents to pay the Appellant’s costs of the appeal and to have a certificate under the Suitors’ Fund Act 1951 (NSW).

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Citations

Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66

Most Recent Citation

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CITATION:	Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66
HEARING DATE(S):	17 November 2006
JUDGMENT DATE:	27 March 2007
JUDGMENT OF:	Beazley JA at 1; Tobias JA at 1; Basten JA at 121
DECISION:	1. Appeal dismissed; 2. Cross-appeal allowed; 3. Set aside orders 1 and 3 made by Pain J on 6 February 2006; 4. Remit the matter to the Land and Environment Court for redetermination in accordance with these reasons; 5. The appellant to pay the respondents’ costs of the appeal and cross-appeal.
CATCHWORDS:	Appeal – jurisdiction on appeal – Land and Environment Court -whether error of trial judge involved point or question of law – failure to accord procedural fairness - Real property – acquisition of land – compensation – valuation of land – before and after approach – whether trial judge erred in valuating after scenario - Real property – acquisition of land – whether residence uninhabitable – hypothetical purchaser and seller - whether trial judge erred in admitting prospective acoustic evidence - Real property – acquisition of land – compensation – valuation of land – loss attributable to disturbance – financial costs incurred relating to actual use of the land - residue land intimately connected with actual use of acquired land - Real property – acquisition of land – compensation – valuation of land – loss attributable to disturbance – financial costs incurred in connection with relocation - whether trial judge erred finding relocation costs payable only for acquired land
LEGISLATION CITED:	Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ss 37, 54, 55, 55(a), 55(f), 56, 56(1), 59, 59(a), 59(b), 59(c), 59(f), 61(2), 66 Land and Environment Court Act 1979 (NSW) ss 5, 38, 56A, 57
CASES CITED:	Attorney General (Qld) v Wilkinson (1958) 100 CLR 422 Besmaw Pty Limited v Sydney Water Corporation (2001) 113 LGERA 246 Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 Ex parte Tooth & Co Ltd; Re the Council of the City of Sydney (1963) 80 WN (NSW) 572 Gosford Shire Council v Green (1980) 48 LGRA 201 Italiano v Carbone [2005] NSWCA 177 Johnston v The Roads & Traffic Authority [2000] NSWLEC 111 Lowy v Land and Environment Court (NSW) (2002) 123 LGERA 179 Marshall v Director General of the Department of Transport (2001) 205 CLR 603; [2001] HCA 37 Maurici v Chief Commissioner of State Revenue (2002) 212 CLR 111 McBaron & Ors v Roads & Traffic Authority of New South Wales (1995) 87 LGERA 238 Metropolitan Water Sewerage and Drainage Board v Histon [1982] 2 NSWLR 720 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Mir Bros Unit Constructions Pty Limited v Roads & Traffic Authority of New South Wales [2006] NSWCA 314 Muin v Refugee Review Tribunal (2002) 76 ALJR 966 NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77; (2005) 80 ALJR 367 Peter Croke Holdings Pty Ltd v Roads & Traffic Authority of NSW (1998) 101 LGERA 30 Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26 Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 Richardson v Roads & Traffic Authority of New South Wales (1996) 90 LGERA 294 Roads & Traffic Authority (NSW) v Muir Properties Pty Limited 143 LGERA 192; [2005] NSWCA 460 The Queen v Watson; Ex parte Armstrong (1976) 136 CLR 248
PARTIES:	Roads & Traffic Authority of New South Wales (Appellant) Donald Richard Peak and Judith Gwen Peak (Respondents)
FILE NUMBER(S):	CA 40059/06
COUNSEL:	J Griffiths SC; P Tomasetti (Appellant) J Webster SC (Respondents)
SOLICITORS:	Clayton Utz (Appellant) Stacks Forster (Respondents)
LOWER COURT JURISDICTION:	Land & Environment Court
LOWER COURT FILE NUMBER(S):	31027/04
LOWER COURT JUDICIAL OFFICER:	Pain J
LOWER COURT DATE OF DECISION:	12 January 2006
LOWER COURT MEDIUM NEUTRAL CITATION:	Peak & Anor v Roads and Traffic Authority [2006] NSWLEC 3