Attard & Ors v Transport for NSW

ISSUES 6There is a large difference in the competing market value assessments because the valuers adopt different sales as comparables and make different adjustments, which are largely influenced by different estimates of the timing of release and rezoning of Riverstone East precinct and the subsequent realisation of the undoubted residential subdivision development potential of the acquired properties. At the acquisition date it was virtually certain that Riverstone East precinct would be released and rezoned for residential subdivision under the Growth Centres SEPP. The likely rezoning was R2 requiring a minimum of 15 dwellings per hectare and 250 square metre lots. Direct access for the subject properties to Schofields Road would be denied for such residential subdivision when carried out under the Blacktown Growth Centre Precincts Development Control Plan 2010. Hence, the properties without an alternative frontage to Tallawong Road (ie all except the Camilleri and Milicevic properties) would require road access across other applicants' land to Tallawong Road. The rezoning timing for which the applicants contend is late 2014/ early 2015; the respondent contends for late 2016 / early 2017. It is common ground that the time to subdivision after rezoning should be 15-18 months. 7The applicants' valuer derived from his comparables in Alex Avenue precinct a rate of $203 per square metre (psm), which he applied to the Camilleri and Milicevic properties fronting Tallawong Road. He discounted this rate by 5 percent to $194 psm for the other subject properties because they would not have direct access to Tallawong Road. The respondent's valuer derived from his comparables in Riverstone East precinct a rate of $90 psm, which he applied to the Camilleri and Milicevic properties. He discounted this to $80 psm (equivalent to about 11 percent) for the other acquired properties on the same logic as the applicants' valuer. He added the estimated value of improvements on the assumption of a longer interim use before rezoning and redevelopment. In the case of the Sultana land, he made a deduction for an estimated cost of remediating contamination. 8The main valuation issues are determination of the sales which provide the most reliable comparative guide to the market value of the subject properties, and determination of the adjusted rate to be derived therefrom. There is an issue as to whether any of the sales mainly relied on by the applicant's valuer were to an anxious buyer and therefore not at market value or were out of line. There is also an issue as to the extent to which the rate applicable to the Camilleri and Milicevic properties because of their road frontages to Tallawong Road, should be discounted in respect of the other subject lands. 9There is a contamination issue potentially affecting the market value of the Sultana land only. It arises because of the presence of total petroleum hydrocarbons and asbestos in soil on the Sultana land. The contamination experts agree that further testing is required and have come up with a range of estimates for the potential cost of carrying out remediation ranging from about $39,500 to over $250,000. The applicants' valuer made no adjustment for the presence of contamination. The respondent's valuer considered that the risk of remediation costs diminishes market value. The respondent submits that market value should be reduced by about $138,000 for the cost of remediation. The Sultanas submit that there should be no reduction. The issues are whether market value at the acquisition date was reduced on account of the contamination and, if so, by what amount. 10In relation to the disturbance claims in all the proceedings, the difference of principle between the parties is whether s 61 of the Just Terms Act prevents recovery of relocation costs, on the basis that they are financial losses that would necessarily have been incurred in realising the potential use which forms the basis of the market value assessment. In addition, there are some individual claims, the s 59 compensability of which the respondent disputes. 11The Camilleri partnership proceeding seeks disturbance costs relating to the relocation of property of the truck haulage business conducted by Mr and Mrs Camilleri in partnership from Mr Camilleri's acquired property and additional costs claimed to be incurred by the partnership due to the timing of the acquisition. Issues include whether the business was unlawfully conducted on the acquired property because it was prohibited or did not have development consent, whether lawfulness is a condition of recovery for relocation costs or should be taken into account under s 59, and the reasonableness of some of the claimed costs.

PLANNING AND DEVELOPMENT POTENTIAL 12In summary, for the reasons that follow, my main conclusions concerning the development potential of the acquired land at the acquisition date, disregarding the effect on value of the public purpose (as required by s 56(1)(a) of the Just Terms Act) are as follows: (a)It was virtually certain that Riverstone East precinct would be released and rezoned for residential subdivision under the Growth Centres SEPP. (b)It was likely that the rezoning would be R2 requiring relatively small 250 square metre lots and a minimum of 15 dwellings per hectare. (c)It was likely that release of Riverstone East precinct would occur by about mid 2013 and rezoning in late 2014 / early 2015. The major influence on this projected timing was the NSW government's announcements in June, July and August 2012 to accelerate the provision of infrastructure, particularly for sewage, to support housing to meet a severe housing shortage in the Sydney region. (d)Upon rezoning, the acquired land would be ripe for residential subdivision development under the Growth Centres SEPP. Such development, by retail subdivided lots being put to market, would likely occur 15-18 months after rezoning. 13The acquired land is rural residential land zoned 1(a) General Rural under the Blacktown Local Environmental Plan 1988 (LEP). In that zone the LEP prohibits medium density housing (meaning three or more dwellings on the same parcel) and residential flat buildings. The intent of the Growth Centres SEPP is to make mostly rural residential land in the Sydney region available for denser residential subdivision. 14The market value of the acquired land depends largely on the market's estimate, at the acquisition date, of how long it would take for Riverstone East precinct to be released and then rezoned under the Growth Centres SEPP and for residential subdivision redevelopment to thereafter occur on the subject land. 15I consider that at the acquisition date the market would forecast that a development application for residential subdivision would likely be lodged promptly after rezoning. The planners agreed and I accept that about 15-18 months after lodging a development application, development would occur on subdivision completion by retail subdivided lots being put to market. If the product to be put to market were houses on subdivided lots, that would add a further 6 to 9 months. The typical development timeframe from rezoning to new dwellings on subdivided lots was about two years in Sydney Water's experience.

Timing of release and rezoning 16At the acquisition date, it was virtually certain that Riverstone East precinct would be accelerated for release and residential rezoning under the Growth Centres SEPP, with a small sliver of the frontages on Schofields Road acquired for road widening by Road and Maritime Services (RMS). The parties' planners agreed that the likely rezoning would be R2. The R2 "Low Density" zone requires relatively small 250 square metre lots and a minimum of 15 dwellings per hectare (in contrast to the R3 "Medium Density" zone which requires a minimum of 25 dwellings per hectare but prohibits single dwelling houses). In other parts of the Sydney region, the R2 zoning could be regarded as medium density. The logic that the rezoning would mirror the R2 rezoning in draft planning proposals (disregarding the public purpose) for the other side of Tallawong Road in Area 20 precinct is compelling. In the R2 zone two hectare properties such as the subject properties can obtain subdivision approval for 66 residential lots, as has occurred in the case of Mr Dobrow's comparable sale property at 44-46 Schofields Road in Alex Avenue precinct. 17The progression from rural residential land such as the subject land to dwellings on lots in residential subdivisions involves the following steps: (a)the "release" by the Minister of the precinct under the Growth Centres SEPP; (b)detailed precinct planning, which dictates the zoning and location of subdivision roads and their access points to external roads; (c)rezoning; (d)subdivision completion (development consent, civil works and connection to essential services); (e)completion of dwellings on the retail lots. 18The respondent suggests an additional step of agreement or cooperation between rezoning and subdivision completion, where owners of internal lots without direct road access cooperate to obtain the road access. In the present case, the evidence shows that at the acquisition date the applicants had a strong bond of cooperation whereby, in my view, the market would be reasonably confident that they would be agreed on such access by the time rezoning occurred. 19In order to determine the market's anticipated timing, at the acquisition date, of the release and rezoning of Riverstone East precinct, it is necessary to consider the planning history of the North West Growth Centre, particularly the NSW Government's plans announced in June 2012 to accelerate construction of essential infrastructure and taking other steps to support the release of housing in north-western Sydney. 20The NSW Government created the North West and South West Growth Centres in metropolitan Sydney as areas which will accommodate 180,000 new dwellings and employment land for around half a million new residents through to 2030. The subject land is within the North West Growth Centre. The North West Growth Centre is approximately 10,000 hectares and is within the local government areas of Baulkham Hills, Blacktown and Hawkesbury. It will be supported by a Major Centre at Rouse Hill and will contain about 70,000 new dwellings plus employment land. It is made up of 16 "precincts", which are areas that will be progressively released by the Minister to 2030. 21The Growth Centres SEPP is the initial environmental planning instrument component of the government's Metropolitan Strategy 2005 for the release of land for urban and employment development in areas suitable for growth in the Sydney region. Clause 2 states its aims, which include: to coordinate the release of land for residential, employment and other urban development in the North West and South West Growth Centres; to enable the Minister from time to time to designate land in these growth centres as ready for release for development; to provide for comprehensive planning for those growth centres; and to provide for the orderly and economic provision of infrastructure in and to those growth centres. The North West Growth Centre has the boundaries shown on the North West Growth Centre Precinct Boundary Map (cl 3(1)), which shows 16 precincts. Zoning of a precinct follows its release and detailed precinct planning and is effected by an amendment to the Growth Centres SEPP. 22Clause 276 of the Environmental Planning and Assessment Regulation 2000 empowers the Minister, for the purposes of the Growth Centres SEPP, to release precincts for urban development and to arrange for a development code that provides guidelines (in conjunction with the Growth Centre Structure Plan) to assist environmental planning in released precincts. 23The following precincts in the North West Growth Centre have been or are in the process of being rezoned for urban purposes: Precinct Planning Status Projected Development Yield Box Hill Rezoned April 2013 9,600 dwellings Marsden Park Rezoned October 2013 10,000 dwellings Alex Avenue Rezoned May 2010 6,300 dwellings Riverstone Rezoned May 2010 9,000 dwellings Colebee Rezoned 2007 1,100 dwellings Area 20 Rezoned October 2011 2,500 dwellings Schofields Rezoned May 2012 2.950 dwellings Marsden park Industrial Precinct Rezoned November 2010 1,200 dwellings North Kellyville Rezoned December 2008 4,500 dwellings Vineyard Released March 2013 2,500 dwellings West Schofields Released March 2013 400 dwellings Riverstone East Released August 2013 5,300 dwellings Total 55,350 dwellings

24Under the Growth Centres SEPP, the acquired land is within Riverstone East precinct. Schofields Road forms the southern edge of this precinct. In addition to having a projected development yield of 5,300 dwellings, Riverstone East precinct is to cater to four to six neighbourhood centres and (along Schofields Avenue near Alex Avenue) a mixed-use employment corridor. 25At the acquisition date, Riverstone East precinct was adjoined on three sides by the released and rezoned precincts of Area 20 to the east on the other side of Tallawong Road; Riverstone to the west on the other side of First Ponds Creek; and Alex Avenue to the south/south-west on the other side of Schofields Road. To the north it is adjoined by Box Hill precinct. To the south-east of Riverstone East precinct on the other side of Schofields Road, is a large, quite densely developed and attractive new suburb of large houses known as The Ponds. The Ponds is immediately east of Alex Avenue precinct except that its final and westernmost stage (Stage 4), which is subdivided but with no houses as yet, is in Alex Avenue precinct. The Ponds was developed by Landcom, the NSW Government's property developer. Development of The Ponds moved one kilometre west and one kilometre north in five years from 2007 to 2012 until it was close to the subject land on the other side of Schofields Road. The Ponds was one of the most sought after residential development locations in the Sydney region. Throughout 2012 demand for residential lands in The Ponds was extraordinary. 26By 2011, it was well known that there was a severe shortage of housing in the Sydney region. A major bank's 2011 annual report indicated a shortfall of 110,000 homes in the Sydney region. 27In August 2010, the NSW Government formally committed to the construction of the North West Rail Link. On 12 December 2011, the NSW Government announced that documents would be lodged with the Department of Planning for approval of the North West Rail Link, including eight stations and an extra 1,000 commuter car parks. It stated that the population of the North West is expected to grow by more than 200,000 to more than 600,000 over the next 40 years. 28Services infrastructure is the trigger for urban development in the growth centres. In October 2011, Sydney Water, the authority responsible for delivering water and wastewater services, announced that it does not build infrastructure before a precinct is rezoned because, operating as a successful business, it targets its capital expenditure to those areas that are more likely to develop first, otherwise its assets would be under-utilised. It stated that the process of obtaining development consent following rezoning is such that there is usually a gap of two years between rezoning of a precinct and the building of a new home in the precinct. 29At the acquisition date, Riverstone East precinct had sufficient services infrastructure except that it did not have sewer infrastructure. Nor did much of Riverstone precinct. By 2012, part of Alex Avenue precinct (including the Mirvac development site in Alex Avenue) was serviced by sewer infrastructure to the west, and it was known that the remainder of that precinct, to the extent of 400 new dwellings (net of Landcom's requirements), would have access to interim sewer services from May 2014. Prior to June 2012, the latter part of Alex Avenue precinct together with Riverstone East precinct and much of Riverstone precinct were due to be serviced by permanent sewage infrastructure via the future First Ponds Creek carrier, but it was not due to be completed until 2020. As was known to the market by the date of acquisition, the NSW Government's infrastructure acceleration program announced in June 2012 (discussed below) caused this date to be brought forward to late 2014. 30From 12 June 2012, there were a number of public announcements or media releases by the NSW Government that it was accelerating and funding infrastructure to support housing, particularly in north-western Sydney. Unfortunately, not all relevant 2012 government media releases are in evidence before me, for others are referred to in the recent judgment of the Court in De Battista v Transport for New South Wales [2014] NSWLEC 39 (Pain J), and are in evidence in Chircop v Transport for New South Wales in which my judgment is presently reserved. I propose to confine myself to the evidence before me. 31The most significant media release in evidence was the first, on 12 June 2012, by the Minister for Planning and Infrastructure (not in evidence is a media release of that date by the Premier that is in evidence in Chircop containing additional information). It was there announced that more than half a billion dollars would be invested in new infrastructure to "unclog the arteries blocking housing development across NSW"; and that the 2012-13 budget delivered "a comprehensive package to accelerate housing development, stimulate private sector development and restore confidence to the NSW housing market". It was stated that the budget package included $481 million dedicated to a Housing Acceleration Fund to be invested in infrastructure needed to support housing across the State, particularly in greenfield areas; $50 million for a new Urban Activation Precinct Program to unlock infill development opportunities; and $30 million for a Local Infrastructure Renewal Fund to provide subsidised loans to local councils to unlock over $1 billion of contributions for local infrastructure projects. The Housing Acceleration Fund would enable "an accelerated start" on 10 identified projects in major housing growth areas. Two of those 10 infrastructure projects directly or indirectly affected the subject land: (a)The more important of the two, being the one that directly affected the subject land, was construction of the First Ponds Creek carrier wastewater infrastructure to service Riverstone East precinct, as well as much of Alex Avenue and Riverstone precincts that did not have permanent sewage infrastructure. I note that on 6 August 2012, Sydney Water wrote to applicants advising that the Housing Acceleration Fund would allow delivery of the First Ponds Creek carrier to be brought forward from 2020 to 2014 to provide wastewater services to the remaining unserviced land in Riverstone and Alex Avenue precincts, "and will ultimately provide initial services to the Riverstone East precinct when rezoned". (b)The other was construction of Schofields Road from Railway Terrace to Veron Road. I note that although this is a considerable distance west of Riverstone East precinct, it is part of the proposed upgrading of the whole of Schofields Road from a rural road to a sophisticated four lane "transit boulevard". Stage 1 of that upgrading between Windsor Road and Tallawong Road directly affected the subject land. Prior to the 12 June 2012 announcement, Stage 1 had either commenced or it was known it would soon commence. 32In a 13 June 2012 media release, the Premier of NSW announced that the government had brought forward the construction of essential infrastructure to support the release of up to 19,000 housing blocks and the creation of around 10,000 jobs in North Western Sydney. He stated: "7,000 housing lots will be on the market sooner due to fast-tracked sewerage connections at North Kellyville and First Ponds Creek...Both connections were due to begin in 2016/17. They will now start next financial year...The State package provides $481 million to fast track critical infrastructure". In the same media release the Treasurer said that the package providing $481 million to fast-track critical infrastructure together with the most generous first home buyer scheme for new dwellings in the nation would help to get housing construction back on track. 33On 17 July 2012, the NSW Government announced that the government would extend financial assistance to councils to help deliver essential infrastructure required to support new housing by continuing to provide for councils when the cost of delivering essential infrastructure was greater than the amount they could collect from capped s 94 contributions. Already $18 million had been paid to Blacktown and Hills Shire Council. 34On 29 August 2012, the Minister for Planning and Infrastructure announced an additional $100 million project to provide water infrastructure to enable the development of 13,000 new homes in Sydney's north-west. These funds would enable 24 kilometres of water pipelines, two reservoirs, two pumping stations and 10 kilometres of pipelines to service residential and land release areas in Box Hill and Schofields. This was on top of the $481 million committed in the budget to the Housing Acceleration Fund for infrastructure. 35On 6 September 2012, the Minister for Planning and Infrastructure and the Minister assisting the Premier on Infrastructure NSW announced that a new government unit, the Housing and Infrastructure Delivery Office, would be established in the Department of Planning and Infrastructure "to drive housing delivery in greenfield and urban renewal areas and report on housing supply". According to the applicants' planner Mr Gary Rhodes, $20 million was set aside to fund it. 36As noted earlier, the subject properties were compulsorily acquired by the respondent on 21 September 2012. 37Although not evidence of market knowledge at the date of acquisition, a March 2013 NSW Government fact sheet stated that Riverstone East precinct was released for planning in March 2013. It was formally released in August 2013. In October 2013 the Department of Planning indicated that it was anticipated that Riverstone East precinct would be rezoned in early 2015. 38By the acquisition date I consider that the government's announcements in June, July, and August 2012 had generally reinforced market confidence that the government would act to accelerate release of housing land and stimulate demand. The announcements appear to have influenced an increase in new housing approvals and commencements. In October 2012, there were 4,159 approvals for dwellings, the strongest month since May 2004. In 2009, only 13,752 new homes were built in Sydney. By the end of 2012, housing completions had risen to 18,186, the highest level since 2006. As the government's target was 27,400 new homes in Sydney every year, it was announced that another 9,000 homes would be achieved by (amongst other things) "the release of three additional North West Growth Centre precincts where planning will start for a further 8,200 homes". 39Prior to the government's June, July and August 2012 announcements, the time between release and rezoning of North West Growth Centre precincts had ranged from about 2.25 to 5 years. On the basis of the announcements, I consider that at the acquisition date the market would anticipate that the time between the future release and rezoning of Riverstone East precinct would be much shorter. 40The applicants' planner, Mr Gary Rhodes, considered that at the acquisition date the market would have expected release of Riverstone East precinct in early 2013 and rezoning in late 2014 / early 2015. The respondent's planner, Mr Anthony Rowan, considered that at the acquisition date the market would have expected release in late 2014 and rezoning in late 2016 / early 2017. Thus, about two years divide them. 41As stated earlier, I have concluded, similarly to Mr Rhodes, that at the acquisition date the market would have expected Riverstone East precinct to be released around mid 2013 and rezoned in about late 2014 / early 2015 under the Growth Centres SEPP. My conclusion is based on the planning history of the North West Growth Centre outlined above and the following considerations. 42First, Mr Rhodes' estimates are more consistent with the NSW Government's 2012 announcement of substantial funding to accelerate housing supply, connoting an intention to do so both in terms of servicing and rezoning, Mr Rhodes' forecast of the time for rezoning is also supported by the forecast that he obtained from a Department of Planning and Infrastructure officer. 43Secondly, Mr Rhodes provided persuasive reasons to support his market estimate of the rezoning timetable: (a)Because Riverstone East precinct was surrounded by four rezoned precincts, the rezoning process for Riverstone East precinct would be less complex given that the work that had been completed for the other four precincts could be applied to Riverstone East precinct. (b)The government's policy to accelerate housing supply necessarily involved an acceleration of the bureaucratic steps needed to release land for development. (c)Rezoning would occur when services became available because not only would that implement the government's policy of accelerating housing supply but it was also the most efficient way for it to recoup capital expenditure. Recoupment would be through sewage and water charges and stamp duty on the sale of lots; and 75 percent of the costs of the works on Schofields Road would be funded by developers paying the State Infrastructure Contribution imposed under s 94EE of the EPA Act. (d)The politics of the of the matter: having spent many millions of dollars on servicing of land, the government would hardly expose itself to the criticism of forgetting to rezone it promptly thereafter, consistently with its announced acceleration program. (e)There was a severe shortfall of housing in the Sydney region that could obviously be ameliorated by releasing more serviced lots sooner. (f)The Government had reshaped the bureaucracy to coordinate the acceleration of housing supply. (g)Most of the Housing Acceleration Fund was being applied, in the first instance, to the North West Growth Centre. 44Thirdly, Mr Rhodes' estimates have so far proved to be more reliable than those of Mr Rowan. In August 2012, just prior to the acquisition date, Mr Rowan advised the respondent that the earliest consideration by the government of the release of Riverstone East would be after completion of the First Ponds Creek carrier in late 2014. In fact the government announced the release in March 2013 and it was formally released in August 2013. Mr Rowan also predicted that if this precinct was released in 2014, it would not be rezoned until 2016. In fact in October 2013 the government indicated that rezoning was expected in early 2015. Mr Rowan also erred in his August 2012 report in stating that after rezoning 6-12 months were required for detailed precinct planning. In fact, as he conceded in oral evidence, that task precedes rezoning. 45Fourthly, Mr Rowan's main reasons for his longer estimate of the time required for rezoning are unpersuasive: (a)His first reason was that the Premiers' June 2012 budget announcement did not single out Riverstone East precinct; therefore the timing of delivery of infrastructure was not determinative of the time when it would be rezoned. In my opinion, that reasoning is flawed. The real purpose of the announcement was to establish a target of accelerated housing. Riverstone East precinct was to be a beneficiary of the government's plans to accelerate completion of the trunk sewer for the area by late 2014 and to upgrade Schofields Road (Stage 1 in 2015 and Stage 2 in 2017). As discussed above, rezoning promptly upon provision of the trunk sewer was the most efficient way for the government to recoup its capital costs faster. (b)Mr Rowland's second reason was that the past timeframe for rezoning of other precincts reflected the timeframe for future zoning: for example, Alex Avenue and Riverstone precincts were released in mid 2006 and rezoned in mid 2010. I agree with Mr Rhodes that by the acquisition date the past timeframe did not reflect the current government's policy of seeking to accelerate housing supply both in terms of servicing and rezoning. Earlier, a number of precincts had been rezoned without services and without any plan for the government to provide services other than the failed user pays principle where developers could fund them. In 2012, prior to the date of acquisition, the government announced a massive infrastructure boost to meet the shortfall of homes in the Sydney region. 46Finally, in August 2012, Sydney Water had advised that the First Ponds Creek carrier would service Riverstone East precinct when it was rezoned. By the acquisition date, it was known that this servicing would occur by the end of 2014. Accepting the logic that the government would not provide services to unzoned land, the market would be confident that rezoning would occur by late 2014 / early 2015.

Upgrading of Schofields Road 47It is convenient at this point to consider in more detail the NSW Government's plans to upgrade Schofields Road. In May 2011, the government published the "North West Growth Centre Road Framework". It identified three categories of major road. Schofields Road was included in the category of "transit boulevards", defined as "major roads that link with principal arterials and incorporate significant public transport facilities. They offer more of a balance between transport and local access functions, with moderate speeds around lower traffic volumes, are tree lined, give priority to buses, and are attractive and comfortable for pedestrians and cycle access". It stated that vehicular access onto this major road corridor is permitted only at major intersections, with potentially some left-in / left-out access. It stated that direct vehicular access to adjacent development is not permitted and access to these developments is to be from the local road system, which can include service roads along the corridor boundary. 48I have earlier mentioned the reference in the government's June 2012 announcement of the accelerated upgrading of Schofields Road between Railway Terrace and Veron Road. 49In August 2012, a Roads and Maritime Services (RMS) "Community Update" stated that it was widening Schofields Road from a two-lane rural road to a four-lane divided road (a "transit boulevard") between Windsor Road, Rouse Hill and Tallawong Road, and that construction would commence in late 2012. It stated that this was Stage 1 of the Schofields Road upgrade; that Stage 2 of the upgrade would be between Tallawong Road and Veron Road, for which a concept plan and review of environmental factors was planned for display in late 2012; and that Stage 3 would be between Veron Road and Richmond Road (for which a concept design was currently underway). The upgraded Schofields Road would constitute a major east-west connection between Windsor Road and Richmond Road. RMS identified features of Stage 1 including realignment of Tallawong Road to line up with Ridgeline Drive (on the other side of Schofields Road), a signalised intersection at their junction, a tree lined corridor, an off road shared path on both sides for cyclists and pedestrians, street lighting, and a generous central median strip to divide traffic and for pedestrians. 50Stage 1 directly benefits the Camilleri property. Stage 2 directly benefits the other subject properties on Schofields Road. At the acquisition date, as the planners agreed, the market understood that Stage 1 would be completed by early 2015 and Stage 2 in 2017. The timing of the upgrade would not affect the timing of the rezoning of Riverstone East precinct. 51Upon completion of upgrading of Schofields Road, future development (after future urban rezoning) along the southern edge of Riverstone East precinct, including the subject properties, would no longer have direct access to Schofields Road. Thereafter the Camilleri and Milicevic properties would have direct access to Tallawong Road which they fronted, but the other subject properties would have to rely on new internal roads to connect with Tallawong Road. Such was the degree of cooperation between the applicants that, in my view, the market would be reasonably confident at the acquisition date that such road access would occur cooperatively. 52The applicants suggest that upon urban development denying access to Schofields Road, RMS would provide them, as a matter of policy, with alternative access to Tallawong Road, which they could utilise in the residential subdivision of their properties. This is based on an RMS information guide of February 2012, which states: "If part of a property is acquired RMS will adjust services and public utilities as needed at RMS' cost. These adjustments will take place prior to or during roadwork. In addition, RMS will relocate fencing and, where appropriate, reinstate access to the road network...If necessary, RMS will prepare a plan detailing property adjustments for consideration by the land owner. If this plan is acceptable it may form part of the contract for sale". Given the way the case has developed, I do not think it is necessary to rule on this point. Through the applicants' cooperation (established by their unchallenged evidence), they would all obtain road access to Tallawong Road for urban development of their properties, and the valuers agreed that the Camilleri and Milicevic properties were more valuable than the others because they front Tallawong Road. For this reason the applicants' valuer discounted the derived comparables sales rate per square metre by 5 percent and the respondent's valuer by $10 or about 11 percent when assessing a market rate for the internal acquired properties. 53I consider, as did Mr Rhodes, that at the acquisition date it was known that the likely location of future subdivision roads in Riverstone East precinct would follow the pattern of existing zoned precincts where the general approach was to create subdivision roads along common boundaries In addition, there existed at the acquisition date a draft indicative layout plan of the south-western portion of Area 20 precinct (on the eastern side of Tallawong Road) fronting Schofields Road (prior to the public purpose) showing the road layout and a "neighbourhood services location" (including for shops) on the principal road therein. A notional extension of that road across Tallawong Road appears to run along the boundary between the subject Camilleri and Milicevic properties: at the acquisition date this would have suggested a future subdivision road along that boundary.

False infrastructure services issues 54Infrastructure issues potentially affecting the market value of the acquired land evaporated at the hearing. The most significant concerned the timing of sewer infrastructure services to comparable sales properties in Alex Avenue precinct favoured by the applicant's valuer. After much evidence and a change of position by the applicants' valuer, the issue evaporated in the following circumstances. 55At the date of acquisition of the subject properties, Riverstone East precinct was neither rezoned nor sewer serviced, Alex Avenue precinct was rezoned and partly sewer serviced and partly would be serviced by an interim sewer by May 2014, and Riverstone precinct was zoned but not sewer serviced. As a result of the government's June 2012 acceleration announcements, at the date of acquisition of the subject land the market knew that permanent sewage services would be available from late 2014 via the First Ponds Creek carrier to Riverstone East, Alex Avenue and Riverstone precincts. 56As regards comparable sale properties in Alex Avenue precinct (discussed below), which had an expected 6,300 dwelling lot yield, the market knew at their respective dates of sale, insofar as they were prior to the government's June 2012 acceleration announcements, that the western side of that precinct was serviced by existing sewage infrastructure to the west, and that the eastern side would have an interim sewage service from May 2014 for 400 residential subdivision development lots (net of Landcom's requirements for The Ponds development). The effect of the June 2012 government acceleration announcements was to make permanent sewer to the latter available from late 2014. Prior to the hearing, the applicants' valuer erroneously understood that they would not have any sewer services until the same time as the subject lots. Upon conceding the error at the hearing, he made an adjustment to his rate derived from his comparables in Alex Avenue precinct for the fact that they would have sewer services seven months earlier than the subject lands (May 2014 compared with December 2014). 57Another infrastructure services issue that evaporated at the hearing was whether each subject lot not fronting Tallawong Road would be able to obtain internal road access across neighbouring land to Tallawong Road for a future residential subdivision. Vehicular access directly onto Schofields Road from the subject properties fronting that road will be denied under any future rezoned development consent under the Blacktown Growth Centre Precincts Development Control Plan 2010. Therefore, each subject property without a frontage to Tallawong Road (ie all except the Camilleri and Milicevic properties) would require alternative road access across neighbouring properties to Tallawong Road. It is clear, on the applicants' unchallenged evidence, that the degree of cooperation between the applicants at the date of acquisition was such that the market would have been reasonably confident that they would cooperatively provide road access to Tallawong Road for the internal subject lots. At the end of the day, the parties' valuers agreed that in the case of the internal subject lots there should be a downward adjustment of the applicable rate derived from their respective comparables on account of this factor. The real issue is the quantum of the downward adjustment. The applicants' valuer opined 5 percent; the respondent's valuer opined a dollar adjustment which represented about 12 percent.

Overview 58Section s 55(a) and 56 of the Just Terms Act provide: 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division): (a) the market value of the land on the date of its acquisition, ... 56 Market value (1) In this Act: market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. ... 59The market value of the acquired land is the minimum compensation under the Just Terms Act and otherwise the amount of compensation is subject to a just compensation override. This is apparent from ss 3(1)(a) and (b), 10(1)(a) and 54(1): 3 Objects of Act (1) The objects of this Act are: (a) to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will be not less than the market value of the land (unaffected by the proposal) at the date of acquisition, and (b) to ensure compensation on just terms for the owners of land that is acquired by an authority of the State when the land is not available for public sale, and 10 Statement of guaranteed acquisition at market value (1) When, on request by or on behalf of an owner or prospective purchaser of land, an authority of the State gives a person written notice to the effect that the land is affected by a proposal for acquisition by the authority, the notice must contain the following: (a) a statement that the Land Acquisition (Just Terms Compensation) Act 1991 guarantees that, if and when the land is acquired by (insert name of authority) under that Act, the amount of compensation will not be less than market value (assessed under that Act) unaffected by the proposal, ... 54 Entitlement to just compensation (1) The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land. ... 60The parties' competing contentions as to the market value of the acquired properties at the acquisition date, and my assessment (rounded) for the reasons set out below, are as follows: Area m2 Applicant Respondent Court $ $ $ (Rounded) (Rounded) + Improvements - Contamination remediation - Contamination remediation Attard 20,320 3,942,080 1,700,000 2,438,000 53 Schofields 194 psm 80 psm 120 psm + 75,000 Attard 20,320 3,942,080 1,875,000 2,438,000 55 Schofields 194 psm 80 psm 120 psm + 250,000 Xiguis 20,320 3,942,080 1,725,000 2,438,000 57 Schofields 194 psm 80 psm 120 psm + 100,000 Hsia 20,320 3,942,080 1,725,000 2,438,000 59 Schofields 194 psm 80 psm 120 psm + 100,000 Sultana 20,330 3,944,020 1,615,000 2,439,000 61 Schofields 194 psm 80 psm 120 psm +125,000 - 40,000 - 138,000 2,399,000 Camilleri 22,260 4,518,280 2,150,000 2,893,000 67 Schofields 203 psm 90 psm 130 psm + 150,000 Milicevic 24,220 4,916,660 2,300,000 3,148,000 31 Tallawong 203 psm 90 psm 130 psm + 100,000

61The market value of the acquired properties is to be assessed on the basis of their highest and best development potential at the acquisition date, disregarding the effect on value of the carrying out of (or the proposal to carry out) the public purpose as required by s 56(1)(a) of the Just Terms Act. I have earlier concluded that at the acquisition date it was virtually certain Riverstone East precinct in which they are located would be rezoned for residential subdivision under the Growth Centres SEPP, the likely rezoning would be R2 and occur in late 2014 / early 2015, and the subject land would then be ripe for residential subdivision redevelopment which would likely occur 15-18 months after rezoning. 62The valuers were Mr Walter Dobrow for the applicant and Mr David Lunney for the respondent. They differed as to the timing for rezoning by two years. Based on the differing estimates of the planners, Mr Dobrow assumed rezoning would occur in late 2014 / early 2015, Mr Lunney assumed late 2016 / early 2017. 63The valuers adopted the direct comparison method of valuation. Mr Dobrow's comparable sales of direct importance to him were in Alex Avenue precinct, which was rezoned in 2010. Mr Lunney's comparable sales of direct importance to him were in Riverstone East precinct, the same precinct as the subject land, but well to the north of the subject land. In closing submissions, the respondent placed reliance on Mr Lunney's Tallawong Road sales in Riverstone East precinct and on a sale at 28 Tallawong Road in Area 20 precinct that Mr Dobrow had considered was only a supporting sale. 64The valuers' adoption of different sales as comparables was influenced by their different estimates of the timing of realisation of the undoubted residential subdivision development potential of the acquired land compared with the comparables. In oral evidence Mr Lunney said that he thought the class of potential purchasers of the subject land was more like an interim purchaser than a residential subdivider. He explained that an interim purchaser, who could be an owner occupier or an investor, would hold with a view to on-selling to a residential subdivider. It appears that he would regard purchasers of his comparables in Riverstone East precinct as interim purchasers and purchasers of Mr Dobrow's comparables in Alex Avenue precinct as residential subdividers. 65For the reasons that follow, I consider that the Riverstone East precinct sales are not directly comparable because the residential subdivision potential of the subject land is likely to be realised several years earlier because of the influence of the creep or flow of The Ponds development on the other side of Schofields Road; that the Alex Avenue or Area 20 precinct sales are not directly comparable because, among other things, those precincts had already been rezoned at the dates of those sales; and I propose to adopt a bottom up approach based on the Riverstone East precinct sales.

Direct comparison valuation method: principles 66The direct comparison method of valuation involves the identification of other sales of land claimed to be comparable and subjecting them to critical appraisal before they are put to direct use, including adjusting the sale price rates to allow for the differences between the other land and the subject land. Some adjustment is almost always necessary, but too much adjustment will make it unsafe to use a sale: Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 6 SASR 541 per Wells J. The use of comparable sales is based on "the supposition that the parties who concluded a given sale were led to fix the price through negotiations conducted at arms length, in which the natural and ordinary operation of the market forces were allowed free play. If some extraordinary or unnatural factor is known to have brought, or quite possibly to have brought, its influence to bear on the parties, the result should be that some suitable allowance should be made to the recorded price to offset that influence, if to do so is practicable; but if it is not, the sale should be excluded from consideration": Minister of Environment v Petroccia (1982) 30 SASR 333 at 339. In arriving at his opinion, the valuer may draw upon his general knowledge and experience: Bingham v Cumberland County Council (1954) (1954) 20 LGR (NSW) 1. 67In Taylor v Port Macquarie-Hastings Council [2010] NSWLEC 113 at [131] I wrote: The many different forces in the market that bring parties to a sale are ordinarily brought to a state of equilibrium when the bargain is finally struck. When assessing comparability the subjective intentions of the parties are generally irrelevant and the valuer looks to fundamental objective particulars of the sale such as the price, date, area, location, zoning, land use (actual and potential), physical constraints, services and amenities. However, there may be special circumstances relating to the buyer or the seller which plainly affect the comparability of a sale by showing that it is in no sense comparable or that it requires adjustment to be a reliable yardstick. Special circumstances include those which establish that the seller or buyer was anxious or unwilling and thus outside the statutory test, or not at arms length. Special circumstances also include those showing that the buyer, to the knowledge of the seller, had a higher potential use in view, perhaps not permitted by the existing zoning, which commanded a price higher than the price commanded by a lower and less rewarding use... 68Sales to acquiring authorities who have not entered the open market are admissible but should be treated with caution: Chaudry v Liverpool City Council [2008] NSWLEC 251 at [21] - [28]; Cook v Roads and Traffic Authority of NSW [2007] NSWLEC 136 at [37]; De Battista v Transport for New South Wales [2014] NSWLEC 39 at [77]-[78]. That is because the acquiring authority may have paid more than market value in recognition of the availability under the Just Terms Act of compensation for (among other things) disturbance (including legal and valuation fees and relocation expenses), solatium and special value, the likelihood that it would be ordered to pay the dispossessed owner's costs if the matter proceeds to litigation, and the uncertainty of litigation. It is of assistance if the contract for sale distinguishes between market value and any additional amount for other matters. 69Where there are no sales which are directly comparable, a "top down" or "bottom up" methodology is commonly used. For example, where the actual zoning does not reflect the potential future zoning that must be taken into account in determining market value, in a "bottom up" valuation land is valued on the basis of its existing zoning with an adjustment upwards for the chance of future zoning. In a "top down" valuation, land is valued on the basis of the prospective future zoning but a deduction is made for the chance that development may not eventuate and the time required before it may eventuate: Sandhurst Trustees Ltd v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [73]-[75] per Biscoe J; Maidment v Roads and Traffic Authority of New South Wales [2006] NSWLEC 606, (2006) 153 LGERA 249 at [51] per Biscoe J. In assessing the evaluation of a chance, it will seldom be possible to determine a figure that is demonstrably correct; one can only consider all relevant factors and make a judgment or "best guess": Liverpool City Council v Commonwealth of Australia [1993] FCA 539, (1993) 46 FCR 67 at [58] per Wilcox J.

Structural improvements 70Each valuer's market value per square metre rate was a land value rate. Mr Lunney, but not Mr Dobrow, added value for structural improvements on the subject properties because he applied the principle that as a property becomes more ripe for urban redevelopment, the added value for occupation or rent of structural improvements including dwellings decreases because they are almost always demolished when the property is redeveloped. This principle played out differently in the valuers' respective market value assessments because Mr Dobrow's assumption as to when residential subdivision redevelopment would occur on the subject properties was much sooner than that of Mr Lunney. Consequently, each assumed a different class of purchaser for whom the value of structural improvements pending urban redevelopment would either generally be nil or small (Mr Dobrow) or of some limited value (Mr Lunney). 71Thus, in assessing market value Mr Dobrow did not attribute value to structural improvements on the subject properties nor (with one minor exception) on his comparable sales properties in Alex Avenue precinct because, on his estimate of when their urban redevelopment would occur, he thought that such value would be nil or little in comparison with the sale price for their common class of purchaser - a developer - and would be offset by demolition costs for larger improvements, such that it was subsumed into the sale price and his sales analysis exercise. In contrast, Mr Lunney, in assessing market value, estimated a substantially longer time before urban redevelopment of the subject land and his comparable sales properties in Riverstone East precinct would occur. Therefore, he assumed that the likely class of purchaser of both would be an owner occupier or investor for whom existing structural improvements would be "of some limited value" as accommodation or for rental income prior to redevelopment. Consequently, he analysed his Riverstone East sales in a manner which was "consistent with" his valuation of the subject properties; that is, "by allowing only a nominal or a significantly depreciated amount for any existing structural improvements" thereon. He explained further that the existing structural improvements have a short term value and, in his opinion, an investor or owner occupier would likely assign a substantially lower value than those improvements would have in a conventional rural residential situation.

Alex Avenue precinct sales 72Mr Dobrow derived a market value of $203 psm from the July and September 2012 sales of four adjoining properties at 90, 98 100 and 102 Hambledon Road in Alex Avenue precinct to the Minister for Education for the purpose of a school (the school sales). He applied that rate to the Camilleri and Milicevic properties fronting Tallawong Road. He discounted this by 5 percent to $194 psm for the other subject properties because they do not have direct access to Tallawong Road. It is unnecessary to consider his addition of a premium for the Attard properties for the fact that they were adjoining, because the applicants did not press it in closing submissions, I understand because there was no evidence to support it. 73The applicants submit that the most relevant comparable sales in Alex Avenue precinct are the school sales and also 28 Tallawong Road in Area 20 precinct to the respondent in April 2012 notwithstanding that the latter was in the shadow of compulsory acquisition for the purpose of the North West Rail Link and that Mr Dobrow only classified 28 Tallawong Road as a supporting sale. It will be recalled that Alex Avenue precinct is on the other side of Schofields Road from the subject properties and Area 20 precinct is on the other side of Tallawong Road, and that they were rezoned for urban development in 2010. Riverstone East precinct, the precinct where the subject properties are located, at the date of their acquisition was not yet released or rezoned for urban development although it was virtually certain that it would be. 7490, 98 and 100 Hambledon Road were marketed and sold in July 2012. Mr Dobrow gave particular weight to the fourth school sale, of 102 Hambledon Road, because it was in September 2012, the closest in time to the date of acquisition of the subject lands. He listed the four school sales and 84 Hambledon Road, all in the R2 zone, as his comparable sales "of direct importance" (but as I have said, he really relied on the four school sales): Address Area Sale date Sale Rate Adjusted rate m2 Purchaser $ psm Dobrow $ psm 100 Hambledon Rd Schofields 20,600 5.7.12 223 210 Min. Education 98 Hambledon Rd Schofields 20,500 5.7.12 193 195 Min. Education 90 Hambledon Rd Schofields 30,900 5.7.12 192 194 Min. Education 102 Hambledon Rd Schofields 24,000 28.9.12 239 215 Min. Education 84 Hambledon Rd The Ponds 20,230 7.8.12 178 164 Rawson Homes

75Mr Dobrow listed the following, which were not in Alex Avenue precinct, as "supporting sales": Address Area Sale date Purchaser Sale Rate Adjusted rate m2 $ psm Dobrow $ psm 832 Windsor Rd Rouse Hill 20,400 20.11.09 142 142 Min. EPA Act 77 Schofields Rd Rouse Hill 19,940 19.1.12 175 180 Respondent 97 Schofields Rd Rouse Hill 20,200 April 2012 176 165 Respondent 28 Tallawong Rd Rouse Hill 20,200 April 2012 199 183 Respondent 31-55, 79 Alex Ave Schofields 121,500 Dec 2011 175 175 Mirvac

76Mr Dobrow also classified the following sale in Area 20 with an R3 zoning as a "background" sale: Address Area Sale date Sale Rate Adjusted rate m2 $ psm Dobrow $ psm 822 Windsor Rd Rouse Hill 20,400 16.4.12 162 180

77All but the last of Mr Dobrow's supporting sales were to acquiring authorities in the shadow of compulsory acquisition - three of them to the respondent for the purpose of the North West Rail. They need to be treated with caution to ensure that the sale price represents market value and does not include other items of compensation under the Just Terms Act, or a component for the uncertainty and legal costs of Just Terms Act proceedings where the acquiring authority is usually ordered to pay the applicant's costs. The same degree of caution is not required when considering the first three school sales, notwithstanding that the purchaser Minister for Education is an acquiring authority, because the Minister entered the market. As to the fourth, the Minister as an adjoining owner negotiated with the vendor's agent. Whether, as the respondent submits, the school sales or any of them were out of line such that no or limited reliance should be placed on them is a separate issue that I address below.

Whether the school sales are out of line 78In my opinion, as the respondent submits and Mr Lunney opined, the four school sales in Alex Avenue precinct on which Mr Dobrow relied were an out of line "spike", for three reasons. First, earlier and later sales to developers of other land in the Alex Avenue precinct were significantly lower, in the range of $150 to $180 psm. Secondly, internal documents of the Department of Education indicate that the Minister was paying a premium over market value according to valuation advice that the Department had obtained. Thirdly, two developers (Rawson and Custodian Land) lodged expressions of interest in 90, 98 and 100 Hambledon Road at prices representing lower rates of, respectively $132 and $165 psm (taking into account the terms of extended settlement). Their offers were rejected, as was the Minister's initial expression of interest at $180 psm. 79As to the first reason, the school sales appear out of line in the following chronology of sales of land to developers in Alex Avenue precinct (Mr Lunney's adjustments are for extended settlement periods): Date Address Purchaser $ psm 23.12.11 31-55, 79 Alex Mirvac 175 30.5.12 114 Hambledon Landcom 179 Dobrow adjusted 5.7.12 90 Hambledon Minister Education 192] 5.7.12 98 Hambledon Minister Education 193] average 201 5.7.12 100 Hambledon Minister Education 223] 7.8.12 84 Hambledon Rawson Homes 170 Lunney adjusted 28.9.12 102 Hambledon Minister Education 239 7.12.12 44-46 Schofields Custodian Lands 165 Lunney adjusted 22.12.12 34 Alex Rawson Homes 140 Lunney adjusted 4.7.13 44 Alex Rawson Homes 155 Lunney adjusted June 2013 48-50 Schofields Hong Chen 180 Lunney adjusted

80On the basis of Mr Dobrow's suggested adjustment to $175 psm for 114 Hambledon Road, the respondent submits that prior to the July 2012 school sales the highest market value paid in Alex Avenue precinct was $175 psm. That means the two school sales in July 2012 of $192 and $193 psm were plus 10 percent, the average of $201 psm for the three July 2012 school sales was plus 15 percent, and the rate of $223 psm for the third July school sale was plus 27 percent. 8190, 98 and 100 Hambledon Road were marketed as one on the open market, and the purchaser's single offer, which was accepted, translates to $201 psm. There were two vendors who allocated that price among the three properties in the contracts of sale at $192, $193 and $223 psm for, respectively, 90, 98 and 100. The evidence does not disclose the basis on which they did so. In the circumstances, I think it appropriate to take the rate of $201 psm as the sale price for those three properties. 82The school sales rates are substantially higher than the other Alex Avenue precinct sales rates. This is so even allowing for the fact that 84 Hambledon Road, sold in August 2012, was (and still is) located next to a property used for an industrial purpose, a sand yard, which is likely to have depressed its sale price; and that the sale of 114 Hambledon Road was by a deceased estate such that the price may have been lower than it otherwise would have been. I would not, without more evidence, accept Mr Dobrow's characterisation of the latter sale as by an "anxious" vendor. 83The respondent's second and third reasons for submitting that the school sales were out of line or to an anxious buyer may be dealt with together. The second is that internal documents of the Education Department indicate that it was paying more than market value according to valuation evidence it had obtained. The third is that, as those documents evidence, two developers lodged expressions of interest at about the same time as the Minister's initial expression of interest, at rates of $132 and $165 psm (after taking into account extended settlement terms). The Education Department documents in evidence, which are obviously incomplete, are as follows: (a)On 27 April 2012, Corporeal Pty Ltd, the Department of Education's valuer, wrote to the Department opining that the market value range for Nos 90, 98 and 100 was $150 to $180 psm. The valuer referred to six comparable sales in the range of $123 to $175 psm in Schofields in Alex Avenue precinct: 84 Hambledon Road $123 in November 2011, 249 Railway Terrace $137 in August 2010, 53 Alex Avenue $170 in February 2012, 55 Alex Avenue $174 in February 2012, 77 Schofields Road $175 in January 2012, and 112 Hambledon Road $160 in December 2004. The valuer said that the larger combined site area (about 7.2 hectares) and location adjacent to the existing Ponds subdivision with services in place would be particularly attractive to developers and anticipated there would be considerable interest in the sale of this land. (b)On 30 April 2012, the Department's representative lodged an expression of interest at a price which represented a rate of $180 psm subject to the Minister's approval of the purchase price. On 3 May 2012, two developers, Rawson and Custodian Land, lodged expressions of interest at prices which represented rates of, respectively, $132 and $165 psm (taking into account extended settlement terms). (c)On 9 May 2012, the valuer wrote to the Department of Education noting that the vendors had rejected the Department's offer of $12,960,000 for 90, 98 and 100 Hambledon Road based on the valuer's earlier valuation, and had counter-offered $14,500,000. He said he had conducted further investigations but had been unable to confirm any sales which support that value. He said he understood that the Department had identified the properties as ideally suited for a school site, and consequently, there was a strong desire to obtain them. He advised that a premium of 10 to 20 percent above market value could be added as special value to the Department in lieu of the Department acquiring the properties under the Just Terms Act. This resulted in valuations of $14,256,000 (including a premium of 10 percent) and $15,552,000 (including a premium of 20 percent). The valuer noted that the vendor's asking price of $14,500,000 lay towards the bottom end of that range. (d)On 31 August 2012, a Department briefing note to the Minister In relation to 102 Hambledon Road - after the purchase of 90, 98 and 100 in July - recorded that the owner had made a final offer of $5.8 million or $238 psm, which was above the sales range for the area; that the Department had paid $201 psm for Nos 90, 98 and 100; and that the valuer had advised that the upper end of the market value range for No 102 was $200 psm. (I note in passing the applicants' suggestion that this indicates that by August 2012 the valuer accepted that the upper end of the market value of all the school lots was $200 psm). The Department briefing note also stated that the Minister could compulsorily acquire No 100 but this was not advised because the cost under the Just Terms Act was likely to be close to the asking price having regard to likely liability (in addition to market value) for disturbance costs which may include the other party's legal costs, interest due to delay and payment for stress/hardship. The briefing note records the Minister's acceptance of the Department's recommendation to accept the owner's offer. The briefing note refers to attachments which are not attached to the copy of the briefing note in evidence, at least one of which is not in evidence at all, namely, the Minister's previous approval of acquisition of the site for $19 million. 84The respondent submits that the fourth school sale in September 2012 at a rate of $239 psm was at a premium over market value due to adjoining owner influence, and indeed was to an "anxious" buyer. The definition of market value of acquired land in s 56(1) of the Just Terms Act requires a notional purchaser who is not "anxious". The statutory definition does not in terms apply to comparable sales. But the same concept applies to comparable sales because the statutory definition encapsulates the general law concept of market value discussed in Spencer v Commonwealth of Australia [1907] HCA 82, (1907) 5 CLR 418. What is an "anxious" purchaser? The concept has not been well explored. In Spencer at 441 Isaacs J spoke of "neither of them [the purchaser or the vendor] so anxious to [trade] that he would overlook any ordinary business consideration". The market value of acquired land may include a premium attributable to adjoining owner influence - the so-called "adjoining owner influence": Croghan v Hawkesbury City Council (1998) 99 LGERA 375 per Bignold J (following earlier decisions); followed in Mood v Cowra Shire Council [1999] NSWLEC 124, (1999) 103 LGERA 260 at [28] per Talbot J. In Croghan ten percent was added to what otherwise would have been the market value of compulsorily acquired property on account of adjoining owner influence: at 390. This reflected the resuming authority's "keen interest" in acquiring the resumed land as a necessary adjunct to its adjoining sewage treatment plant: at 387. In Mood at [28] Talbot J said of the decision in Croghan: ...I find it sufficient for the purposes of this case to adopt his conclusion that s56(1)(a) of the Just Terms Act does not disqualify a claim for compensation in addition to the ordinary market value by reason of its position adjoining land owned by a potential purchaser who has a particular need or interest in buying the land. The adjoining owner, as a prudent purchaser, may pay more for the land rather than lose the opportunity to acquire it, thereby increasing the market value. 85There is a more recent conflicting decision in Mac's Pty Ltd v Parramatta City Council [2012] NSWLEC 1356 at [89] by two Commissioners of this Court who held that "when a premium is paid for some special commercial reason applicable only because the purchaser is the owner of an adjoining property, such purchaser falls outside the concept of a willing but not anxious purchaser": at [89]. Both parties submit that this decision is clearly wrong, conflicts with authority and should not be followed. I accept the submission and respectfully disagree with the Commissioners. They did not refer to, and appear not to have had the benefit of being referred to, the earlier conflicting authorities. That does not mean that an adjoining owner can never be an anxious buyer. Particular factual circumstances (such as the largeness of the premium the adjoining owner is prepared to pay) may indicate that it was. Moreover, where a comparable sale includes an adjoining owner influence premium but the resumed land would not have attracted such a premium at the resumption date, it would be necessary to make an adjustment for the premium when assessing the market value of the resumed land. 86Mr Dobrow considered that the school sales were not out of line and that all the Education Department was doing was meeting the market because: (a) they were a consolidated parcel from which the purchaser got efficiencies in development; (b) the June 2012 government announcement would have resulted in a significant uplift in sale prices in Alex Avenue precinct; (c) the forward movement or "creep" of The Ponds development has had an upwards effect on prices in Alex Avenue precinct; and (d) in the case of 102 Hambledon Road, it was on top of a hill, had a large house which is still there today (whereas the other purchased school sites have had their houses removed) and it was a prime development site. In my view, having regard to the evidence to which I have referred, those considerations are insufficient to explain the price of $201 psm for the first three school properties and $239 psm for the fourth school property. 87In my view, the Department documents in evidence and the comparison with other sales in Alex Avenue precinct in 2012 set out earlier lead to the conclusion that the school sales were out of line and included a premium above market value such that it would be unsafe to rely on them.

28 Tallawong Road sale 88The applicants submit that 28 Tallawong Road in the already rezoned Area 20 precinct is a reliable comparable because it is the most proximate comparable to the subject properties, shares some of their characteristics and enjoys similar locational advantages. This submission is made notwithstanding that Mr Dobrow only identified 28 Tallawong Road as a supporting sale. In my view, it is not a reliable comparable sale. First, it was acquired by the respondent in the shadow of resumption and not on the open market. Secondly, on the evidence, the basis on which the sale price was agreed is unclear. There is sparse evidence that the acquiring authority's valuer at the time of that transaction considered that the structural improvements had a value of $385,000. This led to a difference of opinion between Mr Dobrow and Mr Lunney in which Mr Lunney deducted that amount to derive a market value of $180 psm whereas Mr Dobrow did not to derive a rate of $199 psm. Although part of the contract of sale is in evidence and distinguishes between land value and disturbance, the evidence does not reveal how the land value was arrived at. It does not reveal how the value of structural improvements figured in the calculation of the sale price by each of the vendor and the purchaser, whether the vendor and the purchaser assumed different underlying zoning, and whether extraneous matters such as the cost and uncertainty of litigation under the Just Terms Act were a factor. In the result, the caution about utilising a sale in the shadow of resumption and not in the open market is increased, such that I think it unsafe to adopt 28 Tallawong Road as a comparable sale.

A top down approach? 89Mr Lunney did not favour Mr Dobrow's top-down approach of assessing the market value of the subject land by discounting land in Alex Avenue precinct already zoned under the Growth Centres SEPP because the Alex Avenue precinct already zoned land was being bought to buy, develop and sell, with no delay for rezoning. But if the Court favoured that approach, then Mr Lunney considered that a more reliable guide to the "top" than the school sales on which Mr Dobrow relied is provided by the following sales to developers of residential subdivision zoned land in Alex Avenue precinct (allowing for the extended settlement period in most cases), considered showed (at the most) a top rate of $175 psm which would require a downward adjustment for zoning of 50 percent: Address Sale date Sale rate Extended settlement Adjusted rate Lunney Adjusted rate Area m2 Purchaser $ psm $ psm Dobrow $ psm 114 Hambledon Road, The Ponds 30.5.12 163 175 20,300 Landcom 84 Hambledon Rd, The Ponds 7.8.12 178 12 months 170 164 20,230 Rawson Homes 44-46 Schofields Rd, Schofields 7.12.12 170 165 155 40,125 Custodial 48-50 Schofields Rd, Schofields 31.7.13 195 18 months 180 174 41,260 Hong Chen 34 Alex Ave, Schofields 21.12.12 155 Oct 2014 140 147 42,510 Rawson Homes 44 Alex Ave, Schofields 4.7.13 171 22 months 155 158 21,080 Rawson Homes

Adjustment for zoning 90An adjustment for zoning is necessary on account of the fact that Alex Avenue precinct was rezoned in 2010 under the Growth Centres SEPP, whereas (as I have earlier determined) the Riverstone East precinct where the acquired properties are located, viewed at the acquisition date, was not likely to be rezoned until about 2.5 years after the acquisition date at which time it would be ripe for residential subdivision development. 91Mr Dobrow's "rezoning delay" adjustment for the school sales was only minus 5 percent. Mr Lunney considered that to be grossly inadequate and thought that his comparison between 39 Gordon Road (zoned for urban purposes, $110 psm) and 131 Tallawong Road (unzoned for urban purposes, $74 psm) indicated that an adjustment for zoning of 50 percent or more is required. During the hearing Mr Dobrow included his rezoning delay adjustment in a "time" adjustment of 8 percent for the first three school sales and 9 percent for the fourth. The "time" adjustment otherwise included an adjustment to correct an error he had made as to the timing of sewer services to properties in Hambledon Road. 92Because of his small rezoning adjustment, Mr Dobrow's market value of $203 psm derived from the school sales and applied to the subject properties in Riverstone East precinct, which was neither released nor rezoned for urban development, is higher than most of the adjusted comparable sales rates of rezoned land in Alex Avenue precinct. As he agreed in cross-examination, this is contrary to normal market expectation and counter-intuitive. Normally, land zoned for urban development is substantially more valuable than otherwise comparable land not zoned for urban development. However, based on his comparative analyses of different sales of urban zoned and unzoned land in the general area, Mr Dobrow opined that this was not so in this area. Mr Lunney held the contrary opinion. Mr Dobrow's hypothesis is of fundamental significance to the entire valuation task. I do not accept it and agree with Mr Lunney for the following reasons. 93In Mr Lunney's limited comparative analysis, he took two R2 zoned sales and compared them with one unzoned sale. The two R2 zoned sales were: 39 Gordon Road, Schofields in Riverstone precinct with services not available at the sale date, which sold for $110 psm in October 2012 (18 months settlement); and 44 Alex Avenue, Schofields in the Alex Avenue precinct with services available at the sale date, which sold for $170 psm in April 2013. His unzoned sale comparison was 131 Tallawong Road, Schofields in Riverstone East precinct with services not available at the sale date and uncertainty at the sale date as to the time of rezoning, which sold in September 2012 for $69 psm. 94Mr Dobrow's comparative analyses were of urban zoned and unzoned sales in four different locations near the subject lands. I consider that his analyses are unsound for the following: (a)Analysis A compared the 2004 sale of unzoned 112 Hambledon Road in the Alex Avenue precinct at $160 psm with the September 2012 R2 zoned sale of 114 Hambledon Road at $163 psm. In addition to the difficulty in obtaining assistance from sales so far removed in time, I accept Mr Lunney's evidence that in and around 2004 there was a scarcity of such land whereas in 2012 there was an abundance. (b)Analysis B in Area 20 precinct compared the unzoned 2009 sale of 832 Windsor Road for $142 psm with the R3 zoned 2012 sale of 822 Windsor Road for $162 psm - a difference of only $20 psm. 832 Windsor Road was acquired by an acquiring authority, and was not a market transaction. Mr Dobrow agreed that this caused difficulties. In addition, I accept Mr Lunney's evidence that in 2009 there was considerable speculation that this part of Windsor Road would be rezoned commercial, that the price of $142 psm reflects that speculation, and that the speculation proved to be incorrect because before 2012 it was rezoned R3. (c)Analysis C compared four proximate sales in Regent Street in Riverstone precinct: one unzoned for urban development in 2006 for $114 psm, the others three zoned R2 and sold in 2013 for $86 psm or (in one case) sold in 2010 for $84 psm. Again, there is a difficulty in comparing sales so far removed in time. In addition, I accept Mr Lunney's evidence that (similarly to analysis A) in 2006 there was scarcity of such land whereas by the time of the later sales there was an abundance. (d)Analysis D compared proximate sales in Riverstone precinct: a 2002 unzoned sale for $109 psm, a 2007 unzoned sale for $93 psm, and two 2012 R2 zoned sales for $93 psm. However, in oral evidence, Mr Dobrow said little weight should be put on the 2002 sale; and I accept Mr Lunney's evidence that in 2007 there was a shortage of such land for future residential development whereas by 2012 there was an abundance. 95I conclude that Mr Lunney's zoned / unzoned comparison supports, and that Mr Dobrow's zoned / unzoned comparisons are unsound and do not undermine, the application in the present case of the usual proposition that urban zoned land is substantially more valuable than land unzoned for urban development, and that land zoned for urban development with infrastructure services available is more valuable than land zoned for urban development without infrastructure services available. 96Consequently, if a rate derived from the Alex Avenue precinct comparable sales were to be utilised, it would have to be substantially discounted for the fact that that precinct was already rezoned at their sales dates. I agree with Mr Lunney that Mr Dobrow's downward adjustment of only five percent for the rezoning delay is grossly inadequate. Mr Lunney opined that it should be 50 percent or more. In my judgment, it is arguable that the "top" rate is $190 psm and should be discounted to $130 psm. 97Although I think that Mr Lunney's adjustment is too high, it is unnecessary to express a view as to what the downward adjustment from the "top" rate should be or what the "top" rate is, because I have decided that it is simpler and preferable to take a bottom-up approach on the market value rate derived from the Riverstone East precinct comparables.

Riverstone East Sales 98Mr Lunney derived from his comparable sales in Riverstone East precinct a rate of $90 psm which he applied to the Camilleri and Milicevic properties. He discounted this rate to $80 psm (equivalent to about 11 percent) for the other acquired properties because they do not have direct access to Tallawong Road. 99Mr Lunney's comparable sales "of direct importance" were all in Riverstone East precinct had a rural / residential zoning with potential for R2 rezoning under the Growth Centres SEPP - the one at 131 Tallawong Road was purchased by Mr and Mrs Attard as a result of the resumption of their properties on Schofields Road: Mr Lunney considered that in some cases they required no adjustment and in other cases only minimal adjustment, that their Rouse Hill address was superior to the subject properties' Schofields address, and that lots adjacent to Schofields Road would sell in the future at less than lots further removed from Schofields Road. In a joint report Mr Lunney indicated that all his Riverstone East comparables in the following table were of direct importance, but in a schedule subsequently tendered he indicated that those I have marked with an asterisk were "supporting evidence": Address Area Sale date Sale rate Adjusted rate Lunney m2 $ psm $ psm 131 Tallawong Rd Rouse Hill 20,230 4.9.12 74 74 25 Macquarie Rd Rouse Hill 20,230 13.7.12 66 64 151-161 Tallawong Rd Rouse Hill* 40,460 29.10.13 89 89 154 Tallawong Rd Rouse Hill 20,230 11/13 99 94 114 Tallawong Rd Rouse Hill* 20,230 5/13 89 84 2 Oak St Schofields* 23,270 11/13 98 94 5 Oak St Schofields 31,000 12/13 93 90

100Mr Lunney also referred to a background sale in Riverstone precinct for the purpose of quantifying the required adjustment for zoning: Address Area Sale date Sale rate Adjusted rate Lunney m2 $ psm $ psm 39 Gordon Rd Schofields 20,250 6.10.12 123 110

101An element of caution is required in approaching some of Mr Lunney's comparables because some were not put to the open market or significantly post-dated the resumption date. 102The respondent submits that the Court should adopt a rate derived from Mr Lunney's Tallawong Road sales because they have the same characteristics as the subject land and require no adjustment. I am unable to accept the submission mainly because in my view of The Ponds development creep or flow increased the value of the subject properties compared with the Tallawong Road comparables. 103At the acquisition date, in proximity to the subject land and within its view, development had been creeping or flowing from the south-east to the north-west in The Ponds estate. The rate of creep had been one kilometre to the north and one kilometre to the west in five years between 2000 and 2012. By 2012, The Ponds was one of the most sought after development locations in Sydney, with prospective purchasers camping overnight for the right to purchase a parcel of land. Mr Lunney's Tallawong Road comparables are located about a kilometre or more from Schofields Road on the other side of hills and out of view of The Ponds estate. 104Mr Dobrow considered that the south-east to north-west creep or flow of development in The Ponds estate would favourably affect the timing of future residential subdivision development, and therefore the market value, of the subject land. He opined that at the acquisition date the market would estimate that The Ponds creep would continue into Riverstone East precinct; that the timing of future residential subdivision development within Riverstone East precinct would be influenced by the creep; and therefore the subject properties would be the first to be developed in that precinct and Mr Lunney's comparables much further north in that precinct would not be developed until 7 to 10 years later. Mr Lunney disagreed, mainly because he thought the influence of the creep was inconsistent with an opinion expressed by the parties' infrastructure services engineers that development would not be driven by the existing development pattern of any other precinct, but by the availability and cost of the critical road access and utility services within Riverstone East precinct together with the prevailing planning and rezoning process; and inconsistent with an opinion expressed by the planners that development would be likely to extend westwards from Tallawong Road. For the following reasons, I largely agree with Mr Dobrow, except for his 7 to 10 years lag estimate, which I think is too long. 105In my view, the engineers, in their opinion on which Mr Lunney relied, stepped outside their area of expertise as engineers (it was objected to by the applicants on that basis). Their opinion also said nothing about locational advantage or market choice and did not address the creep. Mr Lunney conceded in cross-examination that it is a valuer's domain to determine what the market prefers. Even if admissible, I am disinclined to give significant weight to the engineers' opinion. I do not consider that the opinion of the planners about an anticipated development from east to west on Tallawong Road should be understood, or in any event accepted, as a proposition that necessarily excludes the influence of the creep in the area of the subject land. 106Mr Lunney advanced the proposition that there are examples of isolated developments without reference to adjoining urban land or existing villages. His examples adjoined an existing township or village. The fact that there was undeveloped rural residential land to their east says nothing about their position in relation to the land to their west, which was fully urbanised, albeit with none of the locational advantages of a newly constructed suburb such as The Ponds. 107The respondent submits that development on Mr Lunney's comparable sites further north in Riverstone East precinct would be favoured by developers over the subject because they have a "superior" suburb address of Rouse Hill. Particularly given the visual proximity of the subject lands to the attractive Ponds development, I do not think that that is a significant factor. Even if it were, it would not apply to the Milicevic property which also has a Rouse Hill address. 108I take into account that, as the respondent submits, the development creep in The Ponds has been influenced by the fact that it is a single landholding held by one developer, Landcom, and that individual developers in nearby areas may work opportunistically in purchasing sites for development. The respondent endeavours to build on this point by putting the sweeping proposition that all land in Riverstone East precinct would be uninfluenced by the creep including, critically, the subject land which has visual contact with The Ponds. The respondent seeks to demonstrate this by reference to the sale of 44-46 Schofields Road in Alex Avenue precinct because it was a rural residential lot from which, the respondent submitted, one cannot see the creep of The Ponds development and yet it has been approved for a 66 lot residential subdivision. I am not convinced that this one example, if valid, would suffice to establish the respondent's sweeping proposition. In any event, I am not persuaded that the proffered example is valid because, following Mr Dobrow's cross-examination on this point, photographs were tendered by the applicants which show that there are views of The Ponds development from 44-46 Schofields Road. 109In my opinion, at the acquisition date the market would consider that The Ponds creep would be likely to influence earlier development of the subject land than land such as Mr Lunney's comparables substantially further north in Riverstone East precinct. However, I think that Mr Dobrow's estimate of a 7 to 10 years time lag is excessive. I consider it reasonable to attribute to the market at the acquisition date an expectation that residential subdivision development of those comparables would likely lag behind that of the subject properties by two to three years. Therefore, the subject properties were more valuable. If the Riverstone East comparables are to be utilised, it would be appropriate to take a bottom-up approach and make a substantial upward adjustment to their derived "bottom" sales rate. 110In my assessment, the market value of $90 psm derived from the Riverstone East comparables by Mr Lunney should be increased in its application to the subject properties by one third to $120 psm for their higher value due to the influence of The Ponds creep. Consistently with the view of both valuers that the subject properties fronting Tallawong Road (the Camilleri and Milicevic properties) are more valuable than those that do not, I would add a premium of $10 psm to the former to arrive at a market value of $130 psm for the Camilleri and Milicevic properties.

Bonomo and De Battista 111After I reserved judgment in these proceedings, other judges of this Court delivered judgment in two cases in which it determined compensation for the compulsory acquisition of other land on Schofields Road for the purpose of the North West Rail but in the adjacent Area 20 precinct: Bonomo v Transport for New South Wales [2014] NSWLEC 25 (Sheahan J) and De Battista v Transport for New South Wales [2014] NSWLEC 39 (Pain J). As Area 20 precinct had already been rezoned under the Growth Centres SEPP, obviously the market value determined by the Court in those cases was much higher than in the present case which is concerned with land in Riverstone East precinct which has still not been rezoned. In Bonomo the respondent accepted a market value of $180 psm, and the Court therefore adopted that value notwithstanding the Court's agreement with the respondent's valuer that the market value was $165 psm: at [76], [106], [108]. In De Battista, the Court adopted a market value of $175 psm: at [107]. The respondent's valuer's assessment was $170 psm, the applicants' valuer's assessment was $220 psm: at [34]. 112I have to decide the present case on the evidence before me. It is apparent from the judgments in Bonomo and De Battista that, notwithstanding that the respondent acquiring authority is the same, different evidence was adduced in those cases than in the present case. It included evidence from different expert witnesses who expressed different views as to market value based in part on different comparable sales and, as I have earlier noted, including different planning evidence: see [30]-[31] above. In Bonomo and De Battista the sale primarily relied on by the respondent's valuers and the Court appears to have been 822 Windsor Road, Rouse Hill with an R3 zoning at $162 psm in April 2012. In the present case, neither valuer placed any reliance on that sale other than Mr Dobrow's brief reference to it as a "background" sale. 113In both those cases, the view was taken that I have also taken, that the school sales in Alex Avenue precinct were out of line and at a premium and should not be relied on: Bonomo at [80], [91]; De Battista at [89]. Some of the evidence in those cases taken into account in reaching that conclusion is not before me. In Bonomo the Court recorded the respondent's valuer's evidence that: "The Department of Education paid a premium over market price, as it was required to acquire the properties after the location of the proposed school had been publicly announced, prior to commencement of negotiations": at [80]. In the present case there is no such evidence. Influenced by that evidence, the Court in Bonomo concluded in the first sentence at [91] that: "The purchases were driven by the designation of the properties by the Department of Education for a school site, prior to any form of acquisition". In the present case, on the evidence, that conclusion is not open, which is no doubt why the respondent makes no submission to that effect. The Court in Bonomo added at [91] the following, which has been in issue before me: "The evidence suggests that the first purchase was at a "premium", or "special value", and that the second purchase was, in fact, a "premium" on a "premium". There seems little option but to disregard these sales." 114In De Battista, the Court referred to a "media release dated 12 June 2012 by the Department of Education announcing the new school/s at the Ponds [and] a media release dated 15 June 2012 by the Department of Education confirming that a new school/s will be built at the Ponds": at [13]. In the present case, there is no evidence of any media releases by the Department of Education. I have referred earlier to 2012 media releases in evidence in the present case by the Premier or Ministers of other departments: above at [30]-[35]. The Court in De Battista referred to a number of internal documents of the Department of Education in evidence in that case: at [9]-[16]. Some of them are not in evidence before me in this proceeding: see [86] above. One such document referred to in De Battista but not before me was described as a briefing note to the Minister of 4 May 2012 which stated that the site was required for a school which is expected to open in Term 1, 2015.

Contamination on Sultana land only 115The remaining market value issue is a contamination issue that affects the Sultana land only. The respondent submits that this should result in a reduction in value of the Sultana land by about $138,000 reflecting an estimate of possible remediation costs. The applicants submit that there should be no reduction because contamination was unknown to the market and unlikely to have been discovered by a notional purchaser carrying out a typical visual inspection. 116The contamination issue arises because in April 2013, after the date of acquisition, the respondent's contamination expert carried out a detailed investigation including sampling soil from 33 test pits and eight stockpiles. He located on visual inspection four pieces of asbestos in four locations and petroleum hydrocarbons (TPH) in three locations, described as "areas of environmental concern". The contamination experts, Mr Nicholas Kariotoglou for Mr and Mrs Sultana and Mr Colin McKay for the respondent, agreed that further testing is required to accurately determine volumes of impact and to reduce the level of uncertainty. 117The contamination experts came up with a range of estimates of the cost of remediation. The principal difference between their costings is that Mr McKay estimated a potential volume of contaminated material that has to be removed and gave a cost estimate of $138,085 based on one-third of the volume of relevant material requiring remediation (Scenario 1). Mr Kariotoglou assumed that the asbestos already found by Mr McKay is the only asbestos present and that no more is found when detailed investigations are conducted. Accordingly, he adopted lower volume estimates and derived a lower cost of $39,527 ($31,225 for the asbestos and $8,302 for the TPH) (Scenario 2). His alternative assumed volumes estimated by Mr McKay (Scenario 1) and he derived an almost identical cost of $137,949. Mr McKay also looked at a worst case scenario producing much higher cost estimates, but I do not think the market would regard it as realistically representing an adjustment to market values. 118The respondent's valuer considered that the remediation costs diminish market value. The applicant's valuer makes no adjustment for the presence of contamination: he considered that until further contamination testing was done no allowance should be made for remediation. 119The applicants submit that contamination should play no part in assessing market value because its existence would not have been known to a notional buyer at the acquisition date because (a) such small quantities now known to exist were first discovered by Mr McKay's detailed searches in April 2013; (b) there is no reason to suppose that a notional buyer at the acquisition date would have carried out such a search; (c) environmental specialists appointed by the Sultanas searched for contamination in March 2013 and found nothing except localised and minor surface staining from leaking of the aboveground storage tank; and (d) a valuer appointed by the Valuer-General who walked across the land in August 2012 reported that his onsite inspection did not reveal any obvious contamination. 120Notwithstanding those considerations, I am persuaded that a prudent notional buyer at the acquisition date would have retained a contamination expert to carry out the sort of extensive investigation that Mr McKay carried out, and that this would probably have disclosed the existence of the few locations containing small amounts of asbestos and TPH that Mr McKay discovered. I consider that the notional buyer would consider it prudent to carry out remediation but unnecessary to remove a large volume of material given the extensive investigation, the use of the land by the Sultanas for over 30 years for market gardening etc, and the apparent absence of any illegal dumping in that time. With advice, the notional buyer would also be likely to take into account that by the time development occurred (after rezoning), it might be possible to utilise the then proposed and since approved clearance method known as "hen picking" to accommodate the necessary removal of fill material within the bulk earthworks program. In all the circumstances, in my opinion, it is appropriate to deduct remediation costs of $40,000 (rounded from $39,527 as per Mr Kariotoglous' Scenario 2) from what would otherwise be the market value of the Sultana land.

Conclusion 121For these reasons, I determine the market value of the acquired land as set out above at [60].

FREEHOLD DISTURBANCE LOSSES 122The parties have reached a large measure of agreement on the losses attributable to disturbance under s 59 of the Just Terms Act, including the quantum of most disturbance items. The differences between the parties are as follows: (a)The key difference is the effect of s 61 of the Just Terms Act. If it is found that the market value of the subject land is assessed on the basis that it had potential to be used for a purpose other than that for which it was used at the date of acquisition, the respondent contends that under s 61 the only disturbance losses that the applicant is entitled to recover are legal costs and valuation fees (including disbursements for planners) under s 59(a) and (b). (b)Otherwise, there are disputes concerning the compensability or quantum of a limited number of items in one or more of the proceedings; namely, rent, stamp duty, mortgage interest, capital gains tax, lost income from solar panels, and a number of other costs that the respondent says have not been substantiated to demonstrate they have been incurred. 123Sections 55(d), 59 and 61 of the Just Terms Act provide: 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division): ... (d) any loss attributable to disturbance, 59 Loss attributable to disturbance In this Act: loss attributable to disturbance of land means any of the following: (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land, (b) valuation fees 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), (d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired), (e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage), (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition. 61 Special provision relating to market value assessed on potential of land If the market value of land is assessed on the basis that the land had potential to be used for a purpose other than that for which it is currently used, compensation is not payable in respect of: (a) any financial advantage that would necessarily have been forgone in realising that potential, and (b) any financial loss that would necessarily have been incurred in realising that potential.

Rent 124Some applicants who continued to occupy their acquired properties after the acquisition date (some into June 2013), claim rent payable to the respondent under s 34 of the Just Terms Act as disturbance costs under s 59(c) or (f). The respondent contends that such rental amounts are not recoverable: Roads and Traffic Authority of New South Wales v McDonald [2010] NSWCA 236, (2010) 79 NSWLR 155 at [117]. The respondent proposes to set off the rent from the compensation monies payable, when assessed by the Court, under s 34(4). 125The rent in dispute is as follows: Attard (55 Schofields) $43, 423.84 Xigius (57 Schofields) $15,238.94 Hsia (59 Schofields) $25,328.88 Sultana (61 Schofields) $20,057.60 Camilleri (67 Schofields) $20,214.30 Milicevic (31 Tallawong) $17,778.80

126Section 34 of the Just Terms Act provides: 34 Former owner's right to occupy land until compensation paid etc (1) A person who was in lawful occupation of land immediately before it was compulsorily acquired under this Act and to whom compensation is payable under this Act is entitled to remain in occupation until: (a) the compensation is duly paid to the person, or (b) the authority of the State makes (in accordance with any other provision of this Act) an advance payment of not less than 90 per cent of the amount of compensation offered by the authority, or (c) the authority of the State makes (in accordance with any other provision of this Act) a payment into the trust account kept under Part 3 of not less than 90 per cent of the amount of compensation offered by the authority, whichever first occurs. (2) Any such person is entitled to remain in occupation of any building that is the person's principal place of residence, or the person's place of business, for 3 months after it is compulsorily acquired, even though the person has ceased to be entitled to remain in occupation under subsection (1). However, if the Minister responsible for the authority of the State is satisfied that the authority requires immediate vacant possession of land, the authority is entitled to immediate vacant possession even though the 3-month period has not expired. (3) The terms on which a person remains in occupation of land that has been compulsorily acquired under this Act are, in the absence of agreement, such reasonable terms as are determined by the authority of the State (including terms as to the rental to be paid and the restrictions on the use of the land). The Residential Tenancies Act 2010 does not apply to that continued occupation. (4) Any such unpaid rent or other money due to the authority of the State may be set off against the compensation payable under this Act. 127In Roads and Traffic Authority of New South Wales v McDonald there was a compensation claim for rent paid by a dispossessed owner to a third party with respect to the leasing of a residence whilst waiting to rebuild her residence on the residue land. Tobias JA (Giles and Macfarlan JJA agreeing) held at [114]: In my view there may be some question as to whether in truth the financial costs representing rental paid or payable pending relocation from one residence to a new residence is a cost incurred in connection with that relocation within the meaning of s 59(c). But even if it does not fall within that provision, in my view it clearly falls within the terms of s 59(f) as being a cost incurred as a direct and natural consequence of the acquisition and which related to the actual use of the land, namely, for the purpose of a residence. 128That statement did not distinguish between such rental payable to a third party and such rental payable to the acquiring authority. Tobias JA rejected the proposition that s 34(3) indicates an intention that post-acquisition rental is not compensable: at [117] read with [112]. His Honour reasoned that rental paid to an acquiring authority pursuant to s 34(3), which is in Part 2 of the Just Terms Act, neither deals with nor purports to deal with the assessment of compensation, which is confined to Part 3: at [116]. His Honour said that rental paid pursuant to s 34(3) would not be recoverable under s 59(c) as s 34(3) proceeded on the basis that the dispossessed owner remained in occupation of the acquired land with the consequence that the person has yet to relocate: at [117]. His Honour did not expressly address whether rent payable under s 34(3) is recoverable under s 59(f). However, given that s 34(3) does not deal with compensation under Part 3 and the generality of his Honour's statement at [114], it follows, and it is my opinion, that no distinction is to be made under s 59(f) between rent payable to a third party and rent payable to the acquiring authority. In both situations it is compensable under s 59(f) because it answers the description: "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". Were it otherwise, there would be an anomaly that the legislature is unlikely to have intended: namely, a dispossessed owner who moved temporarily and paid rent to a third party would be compensated, but if he stayed on at the acquired property temporarily and paid rent to the acquiring authority he would not be compensated. 129Accordingly, I allow the rental claims.

Stamp duty 130All applicants claim stamp duty under s 59(d) on the purchase of a replacement property, to be calculated by reference to the market value determined in these proceedings. The respondent submits that if s 61 applies in the manner contended by the respondent, it operates to deny the applicants compensation for the cost of any stamp duty incurred or proposed to be incurred in acquiring replacement property: Sydney Water Corporation v Caruso [2009] NSWCA 391, (2009) 170 LGERA 298 at [185]-[188]. In that case Tobias JA (Allsop P and Sackville AJA agreeing on this point) said at [185]: Of course, it does not necessarily follow that if s 61 applies it trumps each of the sub-paragraphs of s 59. Relevantly to the present case, it only denies compensation for disturbance where the relevant costs in respect of which a claim is made under s 59 would necessarily have been incurred in realising the potential to which s 61(b) refers. Thus, s 61 would not prevent a claim for disturbance under ss 59(a) and (b). But where stamp duty is incurred by persons entitled to compensation in connection with the purchase of land for relocation where that relocation is necessary to enable the potential to which s 61 refers to be realised, then in my view s 61 denies a claim under s 59(d). 131In my opinion, for the reasons discussed below, s 61 does not apply in the circumstances of this case. Accordingly, I allow the stamp duty claims. It is therefore unnecessary to address the applicants' alternative submission, based on the word "necessarily" in s 61(b), that s 61 does not apply to the stamp duty to the extent it exceeds stamp duty payable on a rural residential lot without the subject land's development potential.

Mortgage interest 132A mortgage interest claim in the sum of $16,202.41 arises only in Mr and Mrs Attard's proceedings in respect of 53 Schofields Road. At the date of acquisition they had a mortgage on that property which secured total advances of $896,177.57 spread across two loan facilities. Interest was accruing at the rate of $211.24 per day. They were making regular payments of principal and interest. The land was compulsorily acquired on 21 September 2012. The Valuer-General determined the amount of compensation payable in respect of the property on 4 December 2012. Mr and Mrs Attard objected by commencing these proceedings on 18 December 2012. In accordance with s 68(2) of the Just Terms Act, the respondent paid 90 percent of the amount assessed by the Valuer-General to them 28 days later. They promptly used that money to pay out both facilities and discharge the mortgage on 18 January 2013. They were not in a position to do this until receipt of the compensation funds. In the intervening four months (21 September 2012 to 18 January 2013) interest of $16,202 accrued and was paid. 133The Attards submit that the claim falls within s 59(e) as a cost necessarily incurred in discharging the mortgage, as they were not in a position to discharge it until receipt of the funds delayed by the period required for the Valuer-General to produce his report, and by the respondent availing itself of the 28 days before making payment to them. In the alternative, they submit that the claim is maintainable under s 59(f). The respondent submits that there is no evidence as to how this claim relates to the acquisition, and that interest would be payable for as long as the bank extended the Attards' credit facility. 134In my opinion, the claim does not fall within s 59(e) because that provision is limited to financial costs in connection with "the discharge of a mortgage and the execution of a new mortgage resulting from the relocation", not with interest payable under a mortgage. Nor, in my opinion, does it fall under s 59(f), under which it is necessary to establish that it is a financial cost relating to the actual use of the land "as a direct and natural consequence of the acquisition". In the present case, if there had been no acquisition, Mr and Mrs Attard would have paid the interest anyway. Accordingly, I disallow this claim.

Capital gains tax 135Mr and Mrs Camilleri incurred capital gains tax on two investment properties sold to liquidate funds to buy their Nelson property, which it is said would not otherwise have been sold at least until retirement. The amount is said to be $58,139 for Mr Camilleri. The claim is made under s 59(f). Mr Camilleri gave evidence, which I accept, that these properties were an investment for his retirement and that if he didn't have the money to buy a new property he would not have sold them. His retirement was about 10 years away at the acquisition date. The applicants submit that he needed to fund his purchase and that it was reasonable for him to liquidate assets to do that, and that the claim falls within s 59(f). The respondent submits that whenever these properties were sold, capital gains tax would have been payable, and that the amount payable will not necessarily be greater than if the acquisition had not occurred. I accept the respondent's submission. Accordingly, I do not accept this claim.

Lost income from solar panels 136Mr Camilleri claims lost income from a solar energy rebate scheme. Mr and Mrs Camilleri installed solar panels on the now demolished house on Mr Camilleri's subject land in late 2010. There is no claim for the capital cost of the installation. They had also contracted with Integral Energy to supply electricity generated by the panels and excess to their own needs to Integral Energy under the "New Solar Bonus Scheme". That contract had five or six years left to run. On average, they received an income from that scheme of roughly $2,500 per annum. On the basis that rezoning and redevelopment would have occurred on the acquired land about two years after the acquisition date, Mr Camilleri claims $4,986 as his loss incurred by reason of the resumption forcing him to leave the New Solar Bonus Scheme two years earlier than he otherwise would. He says that because the replacement house at Nelson will not be completed until at least December 2014, he has not been able to offset that loss by rejoining the panels to the new property. The respondent defends this claim, submitting that the solar panels located on the property are fixtures and are included in the valuation of the subject property and that this cost is not a direct consequence of the acquisition. In my view, given that it is lost income and not capital that is claimed, the claim is a direct and natural consequence of the acquisition and is compensable under s 59(f).

Other costs 137The respondent does not accept the following disturbance costs claims because it says they have not been substantiated to demonstrate that they have in fact been incurred.

Removalists costs 138A removalists costs issue arises in the Xiguis, Sultana and Camilleri proceedings. In response to the respondent's defence that these claims have not been substantiated, those applicants amended their claims to limit them to the lowest reasonable quotation for the future moves. In each case the applicants have moved once already and have claimed no removalists costs for that move, but seek to claim the costs they will incur later when they move to permanent new homes. In each case a quotation from removalists is in evidence and those items from the quotation which are claimed are identified. The amounts claimed are: Xiguis $15,809 Sultana $8,126 Camilleri $10,703

139There will be occasions when it is reasonable for a dispossessed owner to move into temporary premises, and then later make a second move into a permanent new home. Both moves can be "relocation" within s 59(c) and costs of both moves can be compensable if "reasonably incurred": George D Angus Pty Ltd v Health Administration Corporation [2013] NSWLEC 212 at [134], [135] per Preston CJ of LEC. In Horton v Wyong Shire Council (No 2) [2005] NSWLEC 45 [20]-[21] Talbot J allowed under s 59(f) the future cost of a second move from temporary rental premises. Horton was cited by the Court of Appeal in Roads and Traffic Authority of New South Wales v McDonald at [176]. In England in Lindon Print Ltd v West Midland County Council (1987) 2 EGLR 200 at 208 costs of removal from the acquired premises to temporary premises and from the temporary premises to permanent premises were both allowed on the basis that they were the direct consequence of the resumption. In the present case, I am satisfied that both moves were reasonable and that the claimed financial costs of the second move are reasonable. Evidence typical of these applicants was given by Mr Xiguis that although he began looking for alternative premises immediately upon being notified of the acquisition, "we still hadn't found anything by the time the government took the Schofields properties. So we had somewhere to go, my wife and I bought a house in The Ponds...I am still looking for a property to replace what we had in Schofields. I haven't been able to find anything cheap in the area. Until we know how much money we are going to get for our property in Schofields I do not know how much money I have to spend on a new property. For the time being we continue to look". In my opinion, these claims for removalists costs are compensable under s 59(c) or alternatively s 59(f).

Reconnection of internet and telephone services 140In three cases - Xiguis $200, Sultana $200, and Camilleri $299 - the respondent resists claims for re-connection of internet and telephone services to the applicants' new homes on the basis that the expense has not yet been incurred. They cannot incur the cost until they locate their new houses and move in, but there can be no reasonable doubt that when they do, they will need telephone and internet connection. I allow the claims under s 59(c) or alternatively s 59(f).

Survey 141Mr and Mrs Hsia $11,000, and Mr and Mrs Sultana $11,000, have been advised that when they find new properties they wish to purchase they will incur costs in "due diligence" before contracting, including a survey. Only the survey element of their claims is disputed: Hsia $3,080 and Sultana $3,500. Again, the cost has not yet been incurred but there is no reasonable doubt that it will be. I allow these claims under s 59(c) or alternatively s 59(f).

Mortgage establishment fees 142The Hsia and Sultana applicants anticipate that they will borrow money to purchase a new property, although their resumed land was mortgage free. They have not yet purchased and so have not yet borrowed. They claim the anticipated mortgage establishment fees of $11,000 each. Given that they are entitled to the market value of their acquired land and that it was mortgage free, I am not satisfied that these amounts are compensable under s 59. Accordingly, I do not accept these claims.

Change of address notifications 143Mr and Mrs Sultana claim for change of address notifications to an estimated 500 family, friends and commercial associates. The cost of printing notifications, putting them in envelopes and posting them, according to a printer's quote that has been obtained, totals $755. I allow this claim under s 59(c) or alternatively s 59(f).

Additional insurance premiums 144Mr Camilleri claims additional insurance premiums for a property at Nelson which he purchased to replace his acquired property. They are of two types. The first is a construction insurance premium for the Nelson property. The cost is agreed to have been $1,770 (net GST). The respondent (subject to s 61) has conceded 20 percent of this claim in Mr and Mrs Camilleri's separate partnership business disturbance case as being applicable to the shed that their partnership owned. The balance is $1,416. It is not apparent why that part, which relates to the residence being constructed at Nelson, is resisted in Mr Camilleri's freehold case. The second type is additional building and contents insurance premiums for the Nelson property for two years. The claim is for the amount by which the cost of insuring the Nelson property is estimated to exceed the cost of insuring the acquired property at 67 Schofields Road for two years, being the approximate period that the Camilleris will be required to live elsewhere while the house on the Nelson property is completed (September 2012 to December 2014). But for the resumption, they would not have been required to keep two properties insured. These costs have been estimated by their insurance broker at $3,000 per annum. To avoid any danger of over-estimate, Mr Camilleri limits his claim to $6,000 under both heads. I allow this claim under s 59(c) or alternatively s 59(f).

Section 61 145The respondent submits that s 61 bars the disturbance loss claims of the applicants in the freehold proceedings, as well as the partnership's business disturbance loss claim in Mr and Mrs Camilleri's partnership business proceedings, except for valuation and legal costs and disbursements under s 59(a) and (b). The items said to be barred are costs relating to relocation. 146When land is resumed, a person with an interest in the land is entitled to be paid compensation including for losses attributable to disturbance: ss 37, 55(d), 59 Just Terms Act. Disturbance losses include costs associated with relocation, for which s 59(c), (d) and (e) expressly provide and to which s 59(f) may otherwise residually apply. However, disturbance losses, such as relocation costs, that would otherwise be payable under s 59 are not payable if they fall within s 61, which it is convenient to repeat: 61 Special provision relating to market value assessed on potential of land If the market value of land is assessed on the basis that the land had potential to be used for a purpose other than that for which it is currently used, compensation is not payable in respect of: (a) any financial advantage that would necessarily have been forgone in realising that potential, and (b) any financial loss that would necessarily have been incurred in realising that potential. 147I have earlier assessed the market value of the applicants' rural residential properties on the basis that, at the acquisition date, it was virtually certain they would be rezoned for a residential subdivision purpose, that the likely rezoning would be R2, and that rezoning would likely occur in late 2014 / early 2015. They would then be ripe for development for that purpose. Those applicants claim financial loss, in particular relocation costs, under s 59. To the extent (if any) that such loss would necessarily have been incurred in realising that potential, it is not payable because of the operation of s 61. 148Focusing on relocation costs (although s 61(b) is broader in referring to "financial loss"), the idea behind s 61(b) is that if the owner would have to relocate anyway in order to sell land at its higher value based on its potentiality, then it is inconsistent (and therefore unjust) that the owner should also recover relocation costs as disturbance loss. The purpose of s 61 is to prevent that perceived inconsistency. Although s 61 has to be construed according to its own terms and not by reference to earlier decisions under the sparse terms of different legislation, this idea can be traced back to the majority judgment in the English Court of Appeal in Horn v Sunderland Corporation [1941] 2 KB 26 per Green MR and Scott LJ. Actually, a qualification expressed by the majority in Horn is not expressed in s 61 (although perhaps it is implicit). As observed in Commonwealth v Milledge (1953) 90 CLR 157 at 165, the majority decision in Horn was that (relevant) disturbance compensation in such a case should only be awarded to the extent (if any) that the value of the land for its existing purposes together with the compensation for disturbance exceeds the compensation payable on the basis of its use for a potential purpose. In Horn the dissenting view in the Court of Appeal of Goddard LJ and that of the primary judge, Atkinson J, was that whatever the basis on which market value is assessed, the dispossessed owner has to relocate and therefore relocation costs should always be allowed. 149Section 61 was closely considered by the NSW Court of Appeal in El Boustani v Minister Administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33. Earlier, s 61 was considered in McDonald v Roads and Traffic Authority [2009] NSWLEC 105, (2009) 169 LGERA 352 at [121]-[136] per Biscoe J; and by the Court of Appeal in Sydney Water Corporation v Caruso, and Roads & Traffic Authority of NSW v McDonald. 150In El Boustani Preston CJ of LEC (Beazley P and Gleeson JA agreeing) focussed on the meaning of the words "on the basis" in the chapeau to s 61, and the meaning of the requirement in s 61(b) that the costs would "necessarily" be incurred in "realising" the potential for the land to be used for the other purpose. His Honour held: (a)The precondition imposed by the chapeau to s 61 is that the market value must be assessed "on the basis" that the land had potential to be used for a purpose other than the purpose for which the land is currently used. The precondition will be satisfied if the potential for development of the other purpose is temporally very proximate - the land is ripe and would be virtually certain to be developed for the other purpose within the very near future: at [99]. If the land is unlikely to be developed for the other purpose for a long time and there is considerable uncertainty that it would be so developed for that purpose, the precondition will not be satisfied. The addition of some hope value to the market value the land has for its current use does not satisfy the precondition. The potential of land to be used for a purpose other than that for which it is currently used will need to be sufficiently temporally proximate or ripe in order for the precondition to be satisfied: at [100]. (b)Unless the potential for the land to be used for a purpose other than that for which it is currently used is temporally proximate - ie the land is fully ripe to be developed for that purpose - it will be difficult to satisfy the s 61(b) requirement that relocation costs would "necessarily" be incurred in "realising" the potential for the land to be used for that other purpose: at [143]. As the potential becomes more remote, it will become more difficult to satisfy the requirement of necessity or inevitability. For example, that requirement will not be satisfied where, as was the finding in the El Boustani case itself, such relocation will not occur for another 10 years: at [113]-[115], [142]. 151The legislature surely did not intend in most cases to give relocation costs with one hand under s 59 and take them away with the other hand under s 61. El Boustani indicates, and it is my opinion, that s 61 only applies where the potential for use for the other purpose is temporally very proximate; that is, the land would be virtually certain to be developed for the other purpose within the very near future. 152I have earlier determined the market value of the applicants' rural residential acquired land on the basis that it was virtually certain that it would be rezoned for residential subdivision, and that it was likely that the rezoning would be R2 and occur by late 2014 / early 2015 - say about 2.5 years after the resumption date; whereupon the land would be ripe for redevelopment for residential subdivision. Two and a half years is not "temporally proximate"; that is, "ripe" or "within the very near future": El Boustani at [99]. I do not consider it to be "sufficiently temporally proximate or ripe" for the precondition in the chapeau to s 61 to be satisfied: El Boustani at [100]. In addition, as that potential was not temporally proximate at the date of acquisition, that is the land was not fully ripe to be developed for that purpose, I do not think that the s 61(b) requirement is satisfied that the relocation costs would "necessarily" be incurred in "realising" the potential for the land to be used for that other purpose: El Boustani at [143], [113]. In my judgment, for both reasons s 61(b) does not apply to any of the applicants' claims for disturbance losses in the freehold proceedings and the Camilleri partnership business proceedings. 153Later I address in detail the Camilleri partnership's business proceedings for disturbance losses. However, it is convenient at this point to express my opinion that there is an additional reason why the Camilleri partnership's claim for business disturbance loss falls outside s 61: namely, the market value of the partnership's limited interest in the land has never been "assessed" as required by the chapeau to s 61. Even if it had been assessed, the assessment would not have been on the basis that the partnership's interest in the land had potential to be used for a purpose other than the business purpose for which it was currently used at the date of acquisition. 154The precondition to an entitlement to be paid compensation under the Just Terms Act is that the claimant is "an owner of land": s 37. "Owner of land" is defined as "any person who has an interest in the land"; and "interest in land" is defined to include "a legal or equitable estate or interest in the land": s 4. The partnership did not own the land: it was owned by Mr Camilleri. The partnership had a limited equitable interest in the land: an informal equitable lease under which the partnership carried on business. It was determinable at will, or perhaps on notice for the length of time constituting reasonable notice having regard to the fact that the partnership owned tenant's fixtures including the sheds erected on the land. On all hands, the market value of the partnership's interest in the land has been ignored and, inferentially, treated as nil or nominal. The partnership has never claimed compensation in respect of the market value of its interest: s 39. The Valuer-General did not determine the market value of the partnership's limited interest in the land: s 41. The Court has not assessed the market value of the partnership's interest in the land, nor been called upon to do so. There is no suggestion in the evidence that that limited interest had any market value at the acquisition date. 155Nevertheless, the respondent submits that in the Camilleri partnership's business loss proceedings, s 61 is triggered by the Court's assessment in Mr Camilleri's separate freehold proceedings of the market value of the land owned by Mr Camilleri: Peter Croke Holdings Pty Ltd v Roads and Traffic Authority of NSW [1988] NSWLEC 177, (1998) 101 LGERA 30 at 43-44 per Bignold J. The Camilleri partnership submits that Peter Croke was wrongly decided and should not be followed. 156In Peter Croke the first applicant claimed compensation for resumption as the registered proprietor of the acquired land, including for its market value. The second applicant claimed compensation as the lessee but only for disturbance loss for the costs of relocating his business. Bignold J held at 43-44: In my judgment, if the First Applicant's claim to compensation which is founded on the entitlement to the "market value" of the land (s55(a)) were to lead to an assessment of compensation on the basis of a higher and more valuable use of the acquired land than on the basis of its existing use (being the use made by the Second Applicant, as lessee or tenant, in the conduct of its business) and that assessment on the basis of the higher use was predicated upon the termination of the Second Applicant's tenancy of the land and the cessation of conducting its business thereon, the Second Applicant would not be entitled to compensation in respect of "loss attributable to disturbance" because (i) the financial advantage of continuing in occupation and in the conduct of the business would necessarily have been foregone in realising that (higher) potential and (ii) the financial loss to the Second Applicant of ceasing to conduct the business, or of having to relocate the business, would necessarily have been incurred in realising that (higher) potential. In so concluding, I do not think that the plain intended effect of s61 would be defeated or displaced by virtue of the fact that in assessing the market value based upon a higher potential use, the financial advantage that is necessarily foregone or the financial loss that is necessarily incurred, is borne by the Second Applicant, rather than by the First Applicant whose claim to compensation is based upon the "market value" of the acquired land. This conclusion does not deny that each claimant, having an interest in the acquired land, is entitled to have his or her claim for compensation separately determined. Rather, it gives proper recognition to the apparent effect of s61 of the Just Terms Act namely to deny recovery of compensation for disturbance loss where a claim to such compensation is inconsistent with another claim to compensation based upon the market value of the land, where that value is assessed on the basis of a potential higher use of the land than the existing use and where the realisation of that potential necessarily terminates (or postulates the termination of) that existing use. In my opinion, s61 so operates, whether the inconsistent claims are made by a single "interest" holder (as in Horn) or, as in the present case, by different interest holders, one being the owner and the other being the lessee. 157Peter Croke has been considered in two Court of Appeal decisions but not in relation to this point: Sydney Water Corporation v Caruso at [164]-[166], [171]-[178] and [184]; and Roads & Traffic Authority of NSW v McDonald [2010] NSWCA 236, (2010) 79 NSWLR 155 at [50], [92]. 158No earlier authority supports the decision in Peter Croke, which extends the decision in Horn. In my view, Horn is distinguishable in principle from a case such as Peter Croke or the Camilleri partnership business claim because the inconsistency on which the Horn decision was based was between one entity, the owner of the land, being paid market value compensation based on a higher potential use which could only be achieved voluntarily by relocating, and the owner also being paid the cost of relocation. There is no such inconsistency in a case such as Peter Croke or the Camilleri partnership where a tenant claims relocation costs without the market value of its interest in the land being assessed on the higher potential use. 159The issue is to be resolved by construing s 61 rather than by direct reliance on Horn which was decided in a different statutory context, although it may assist in casting historical light on the purpose of s 61. In my opinion, the words in the chapeau to s 61, "the market value of land is assessed on the basis" of its potentiality, refer to the land of the same person to whom s 61 proceeds to say that compensation in respect of financial loss is not payable. Relevantly, that person is Mr Camilleri, the owner of the subject land at the acquisition date. A separate entity from that person, a tenant such as the partnership in the present case, does not enjoy the fruits of the enhanced market value arising from the potential of the land to be used for a purpose other than that for which it is currently used. The purpose of s 61 is to present a perceived inconsistency in a particular claimant - normally the owner of the land - claiming the enhanced market value of land arising from its different development potential, the realisation of which would necessitate financial loss (such as relocation costs), and also claiming that financial loss. If a separate entity from the owner has a limited interest in the land, the market value of which limited interest does not reflect that potential, then there is no such inconsistency. On this purposive construction, s 61(b) does not apply to the Camilleri partnership's claimed financial loss for disturbance. 160For these reasons, I am driven to the conclusion that, with respect, Peter Croke was wrongly decided on this point and that the error is sufficiently clear that it should not be followed. 161For these reasons, in my opinion s 61 does not apply to any of the applicants' disturbance loss claims.

Conclusion 162The disturbance losses claimed by the applicants in the freehold proceedings are allowed less the disturbance costs claimed that I have earlier specifically disallowed, as follows, to which stamp duty under s 59(d) is added based on my assessment of market value: Claimed Disallowed Balance Stamp Duty Compensation Attard (53) 78,479 16,202 62,277 119,580 181,857 Attard (55) 145,425 145,425 119,580 265,005 Xiguis (57) 94,900 94,900 119,580 214,480 Hsia (59) 105,044 11,000 94,044 119,580 213,624 Sultana (61) 77,133 11,000 66,133 117,435 183,568 Camilleri (67) 260,602 58,139 202,463 144,605 347,068 Milicevic 88,376 88,376 160,850 249,226 (31 Tallawong)

CAMILLERI PARTNERSHIP DISTURBANCE LOSSES 163Mr and Mrs Camilleri claim disturbance losses under ss 55(d) and 59 of the Just Terms Act relating to the relocation of property of the one-truck road haulage business that they conducted in partnership for over 30 years from Mr Camilleri's acquired land at 67 Schofields Road under an equitable lease. 164Over the years, improvements were made to that land in order to be able to garage, wash, service and refuel the truck on site. They included three sheds, a hardstand area, turning bay, rainwater tank and fuel tank. Business administration was carried out at the family home. Only the family home, the largest shed (Shed 1) and awning had development consent. Shed 1 was larger than the family home. 165The large truck (a B-double prime mover), was used to haul material for one customer, Boral Australia. The business received daily orders for pickups and deliveries from Boral Australia, which were normally performed six days per week between about 5am and 6pm. The material never entered the acquired property; the truck was empty when garaged at the acquired property. Mr Camilleri conducted the business except for administration, including driving the truck and servicing it on an almost daily basis (sometimes assisted by his mechanic son). Truck parts are a large part of the business (almost 30 percent of total expenses in 2012). Mrs Camilleri looked after the administration including bookkeeping at the family home 20 to 30 hours per week, and also assisted with cleaning the truck. 166Except for its resumption, the acquired land would be sold after it was rezoned for residential subdivision in (as I have determined) late 2014 /early 2015. At that time the moveable partnership property would have to be relocated. Because of the resumption, the partnership property had to be relocated earlier, in mid 2013. The partnership claims disturbance losses on the basis that because of the resumption the property of the business had to be relocated sooner than would otherwise have been required. 167In mid 2013, the partnership moveable property and business was relocated to a rural residential property at Nelson purchased by Mr Camilleri to replace his acquired property. At the Nelson property he is building a house, and the partnership has constructed a large shed to conduct the business. However, apart from garaging (incidental uses such as washing) the truck, the partnership cannot lawfully carry on the business in the shed at the Nelson property because there is no development consent to do so. They therefore propose to lease an industrial unit elsewhere where the truck will be maintained and serviced. 168The partnership applicants claim the disturbance losses listed in the following table under "Applicants". The respondent submits that none of the claimed disturbance costs are payable because the business on the acquired land was a use for an unlawful purpose. That is said to be because the business was prohibited in that location under the relevant planning instrument, or alternatively the business (or land improvements it utilised) did not have development consent. Alternatively, assuming that unlawfulness does not impact on recovery and (as I have earlier held) s 61 does not bar any part of the claim and urban rezoning would be at the end of 2014, the respondent contends that the partnership applicants are entitled to the amounts set out in the following table under "Respondent". Finally, the table sets out my determination in relation to each item, for the reasons set out below: Applicants Respondent Court $ $ $ Section 59(a) (a) Legal Fees 12,792 12,792 12,792 Section 59(b) (a) Valuation Fees 8,981 8,981 8,981 Section 59(c) (a) Construction of shed on Nelson property 70,975 - 50,000 (b) Loss of profit relating to reduction in deliveries including: Diarised time away from the business 2,861 2,861 2,861 Saturdays not worked due to relocation 5,709 5,709 5,709 Relocation time (13 days) 9,161 - 9,161 (c) Outsourcing costs incurred for maintenance work - past 971 971 971 Outsourcing costs incurred for maintenance work - anticipated 9,100 - - (d) Rent for an industrial unit 36,666 - - (e) Additional travel time to/from Nelson 3,874 3,874 3,874 TOTAL 161,090 35,188 94,349 Alternatively the applicants claim the above under s 59(f)

Whether use of the acquired land was lawful 169In determining whether the use of the acquired land was lawful, the relevant planning instruments are Interim Development Order 133 (IDO); Blacktown Local Environmental Plan 1988 (LEP) which replaced the IDO and was in force at the acquisition date; and State Environmental Planning Policy No 4 - Development Without Consent and Miscellaneous Exempt and Complying Development (SEPP 4), which did not apply to a prohibited use under the LEP but dispensed with development consent for uses for certain purposes that were "ancillary or incidental" to a purpose for which land may be used. 170The respondent submits that the overall purpose of the partnership's use of the acquired land was as a "road transport terminal", which was a prohibited purpose under the LEP at the time; alternatively, that development consent was required but not obtained for the business and the improvements other than the main shed for which there was development consent. The applicants submit that (a) lawfulness is not a requirement of s 59; (b) anyway, the use of the acquired land was lawful because it was not used for a prohibited road transport terminal, there were development consents for a tool shed and garage as well as for a dwelling, the other improvements were ancillary or incidental and therefore did not require development consent by reason of SEPP 4, and the administration of the business) was not development and therefore did not require development consent; and (c) anyway, the applicants would have been entitled to take steps to make the activity at the acquired land lawful, and they are entitled to compensation for the loss of that chance. 171If it is relevant, Council officers came to the acquired land from time to time but never raised a complaint about what was being done thereon. 172The test of characterisation of the purpose of a use is as stated in El Boustani at [130] per Preston CJ of LEC (Beazley P and Gleeson JA agreeing): The purpose of a use is the end which is seen to be served by a particular use of land. It describes the character which is imparted to the land on which the use is pursued: Shire of Perth v O'Keefe (1964) 110 CLR 529 at 534. The characterisation of the purpose of a use needs to be done at the appropriate level of generality, not too narrow or not overly wide. The test is not so narrow that it requires characterisation of the purpose in terms of the detailed activities, transactions or processes which have taken or which may take place, but not so general that the characterisation can embrace activities, transactions or processes which differ in kind from the use which the activities, transactions or processes as a class have made or may make of the land: Royal Agricultural Society (NSW) v Sydney City Council (1987) 61 LGRA 305 at 310.

Whether a prohibited transport terminal 173The respondent submits that the applicants' use of the acquired land was unlawful because they were using it as a "transport terminal". The LEP at the acquisition date prohibited "transport terminals" in the zone in which the subject land was located. The respondent's submission proceeds on the basis that the LEP incorporated the Environmental Planning and Assessment Model Provisions 1980, which define "transport terminal" as including a building or place used as a "road transport terminal" and "road transport terminal" as "a building or place used for the principal purpose of the bulk handling of goods by transport for road, including facilities for the loading and unloading a vehicle used to transport those goods and for the parking, servicing and repair of those vehicles". The respondent submits that when one looks at the scale of activities carried out on the subject land, it was a road transport terminal as defined in the model provisions and therefore was a use for a prohibited purpose. I do not accept the submission. The LEP in cl 5 adopts the model provisions except for a number of definitions therein, including the definition of "road transport terminal". The ordinary and natural meaning of "road transport terminal" therefore applies. The Macquarie Dictionary relevantly defines "terminal" as "the end of a railway line, shipping route, air route etc, at which large scale loading and unloading of passengers, goods, etc takes place". On that definition, which I adopt, it cannot be said that the subject land was being used for the purpose of a prohibited road transport terminal.

Development consents 174In addition to a development consent for the dwelling house on the acquired land, in 1982 a development consent was issued under the IDO for development described as "tool shed and garage". This is Shed 1. In 1988 the IDO was replaced by the LEP. By s 109B(1) of the EPA Act, nothing in the LEP prohibited, or required a further development consent to authorise, the carrying out of development in accordance with the 1982 consent. One of the conditions of the 1982 consent was that "no damaged vehicles, spare parts or trade waste is to be stored at any time outside the building". There was no specific development consent for the later improvements erected by the partnership on the land and used for the purpose of the partnership business or for administration of the business carried out at the family home. 175The respondent submits that the use specified in the 1982 consent is not broad enough to encompass the overall use of the acquired premises for a road haulage business; rather, it permits the construction of the shed/garage and normal garaging of vehicles and the storage of tools within that approved building. 176In construing the 1982 consent, I consider it permissible to look at the plans accompanying the development application in order to understand the dimensions and details of the "tool shed and garage" that it authorised, consistently with the constraints on construing development consents by reference to development applications referred to in Bardsley-Smith v Penrith City Council [2013] NSWCA 200, (2013) 195 LGERA 34 at [66]-[67]. Those plans show a shed with dimensions so large that it could accommodate a large truck. The applicants submit that the consent also authorised the use of the "tool shed and garage" for the purpose specified in the development application under s 91(4) (now s 81A(1)) of the Environmental Planning and Assessment Act 1979 (EPA Act), which provided: "A consent to a development application for the carrying out of development, being the erection of a building, shall be sufficient to authorise the use of the building when erected for the purpose for which it was erected where that purpose is specified in the development application". In this way, the applicants invite reference to the purpose specified in the development application, which was "truck garage and machinery store". I do not accept that construction of s 91(4) although I do not think it makes much difference in this case. When a development consent goes beyond merely authorising the erection of a building and states the purpose for which the building is to be used - in this case as a "tool shed and garage" - I do not think that the statutory provision permits recourse to a different purpose stated in the development application. Nevertheless, it is clear from the dimensions in the plans of the authorised "tool shed and garage" that its authorised garaging extended to a large truck as well as its use for the purpose of a tool shed. The condition of the consent to which I have referred confirms that the consent contemplates that spare parts could be located within the tool shed and garage. Consent to such a large garage and tool shed obviously capable of garaging a large truck necessarily contemplates its use for commercial purposes. A development consent for a garage and tool shed, whether it be for a truck or for a domestic motor vehicle, carries with it, I think, consent to carrying out within the garage maintenance and repairs to the vehicle. I think it is reasonably ancillary to the 1982 consent to this garage and tool shed that spare parts and tyres could be stored and used in the garage, the truck could be maintained and repaired therein, and the truck could be cleaned on the premises. 177Condition 8 of the building permit for the garage provided that it was not to be used for commercial, industrial or habitable purposes without the prior consent of the Council. In my view, such "consent" was provided for commercial purposes in the 1982 consent. Even if that is not within the contemplation of condition 8, I do not think that a condition of a building permit can subtract from the terms of a development consent.

SEPP 4 178Just before the commencement of the business, SEPP 4 was gazetted, on 4 December 1981. Clause 10 permitted development of minor environmental significance to be carried out without development consent. Clause 10(1) and (2) provided: 10 Certain ancillary or incidental development (1) This clause applies to development on land for a purpose that is ancillary or incidental to a purpose for which the land may be used, being development: (a) for the purpose of parking, loading facilities, drainage, workers' amenities, pollution control, security or for other similar purposes, or (b) which consists of the erection of fences, garages, fuel sheds, tool houses, milking bails, haysheds, stables, fowl houses, pig sties, barns or the like. (2) Development that, but for this clause, could not be carried out except with development consent being obtained therefor may be carried out without that consent. 179In my view, as the applicants submit, each of the contentious improvements constructed or used for the purpose of the business fell within cl 10(1) and (2) of SEPP 4 because they were "ancillary or incidental" to a purpose for which the subject land may be used under one or other or both of the development consents for the erection of Shed 1 and the dwelling house. By dint of cl 2(4)(b), SEPP 4 could not authorise prohibited development but I have earlier concluded that there was no prohibited development.

Administration 180The respondent submits that the business administration carried out in the family home was an innominate use requiring development consent in the relevant residential zone under the LEP. The applicants dispute this, submitting that planning law is directed to land uses not commerce, commerce may be carried out without any use of land, and generally speaking commerce itself does not require development. The applicants submit that if the respondent is correct, the use of a computer in a home for the purpose of ordering clothes or trading shares, or a barrister's responses to the emails of an instructing solicitor late into the night are all land uses which would require consent (unless exempt development or permissible without consent). The applicants submit that if a distinct part of a home is used for a business, and it involves signage, visits from clients and other such uses of the land, then the position may well be different, but merely because there is a business which sits above the particular uses of the land for the purposes of garaging, maintaining and servicing a truck does not convert those land uses into something different which can then be labelled as an innominate use requiring consent. 181The administration of the business carried on from the family home may come within the definition of "home activity" in the Blacktown LEP and may have required development consent. However, it is unnecessary to express a concluded view because the claimed relocation costs do not relate to the moving of papers or other items involved in the administration of the business (or, if they do, they are de minimis).

Whether ss 55(d) and 59 have a lawfulness requirement 182The respondent submits that: (a)ss 55(d) and 59 contain an implicit requirement of lawfulness of the purpose of the use, which automatically excludes a claim for relocation of a business conducted unlawfully; (b)alternatively, relocation costs of a business conducted unlawfully would almost always, including in the present case, not constitute costs "reasonably incurred", which is a requirement of s 59(a)-(f). 183I do not accept the first submission. I agree with the alternative submission to a point, in that relocation costs of an intrinsically unlawful business, for example a business of manufacturing illegal drugs, would not be "reasonably incurred", but that that is necessarily the case where the purpose of the use is permissible with development consent. 184Neither s 55(d) nor 59 contain any explicit requirement that the purpose of a use be lawful, in contrast to s 56(1)(c). Section 56 confines itself to defining "market value" for the purposes of the Act. Section 56(1 )(c) requires the Court in assessing market value to disregard "any increase in the value of the land caused by its use in a manner or for a purpose contrary to law". That includes its use for a purpose which would be permissible only with consent, when that consent has not been obtained: Doueihi v Roads and Traffic Authority of New South Wales [2004] NSWLEC 51. The proposition that "contrary to law" includes "without current consent" was not challenged on appeal. The specific restriction in s 56(1) concerning market value to exclude increased value caused by use in a manner or for a purpose contrary to law gives some weight to an inference that there is no similar exclusion from the other heads of compensation in s 55, relevantly disturbance losses under s 55(d) and 59. 185Section 59 contains its own filters under each of its sub-heads, to ensure that only appropriately incurred losses or costs are compensable. These are that the cost or loss be "reasonably incurred", and that it either falls within one of the defined classes of cost in s 59(a) to (e), or alternatively that it relates to "the actual use of the land" as specified in s 59(f). In my opinion, to add, as a matter of construction, an additional restriction that those costs are automatically not recoverable if the acquired land was being used for an unlawful purpose is unwarranted. That conclusion is strengthened by the language of s 59(f) which refers to "the actual use of the land", focusing attention on the factual question of what the land was being used for, rather than the legal question of what was or was not permissible. 186The rule of construction that the express mention of one thing implies the exclusion of the other (expressio unius est exclusio alterius, as one used to say) is always applied cautiously. However, in my view, that, or similar, is applicable here. In De Marco v Chief Commissioner of State Revenue [2013] NSWCA 86, (2013) 83 NSWLR 445 the Court of Appeal considered a similar question in the context of the Land Tax Management Act 1956. The question there was whether the appellants were entitled to the benefit of provisions of the Act which applied to land used as "his or her principal place of residence". They had lived upon the land in a caravan, but that use had been unlawful as approval had not been obtained under s 68(1) of the Local Government Act 1993. The relevant provisions of the Land Tax Management Act contained no requirement that the occupation be lawful. In contrast, other sections of the Land Tax Management Act, particularly cl 6 of the same Schedule as contained the provisions relied upon, contained a requirement that the "intended use and occupation not be unlawful". The majority, Basten JA and Gzell J held that that specific reference in cl 6 militated against an implied requirement of lawfulness in cll 2, 3 and 8. Basten JA (with whom Gzell J agreed) said at [156]-[157]: The requirement in clause 6(ii)(c)of the Schedule that the intended use and occupation not be unlawful and the absence of that specific requirement in clauses 2, 3 and 8 militates against an implication of that requirement in those clauses. It was submitted on the Chief Commissioner's behalf that it was not necessary to specify the requirement in clauses 2, 3 and 8 of the Schedule as the legislature could be presumed to have assumed that the requirement was implied in those provisions. That is drawing too long a bow. 187It follows, in my opinion, that there is no automatic exclusion of compensation under s 59 of the Just Terms Act in the case of a use for a purpose which requires but does not have a necessary development consent. 188However, in my opinion, lawfulness of the purpose of a use is a factor in determining whether the claimed costs were "reasonably" incurred, which is a requirement of all the provisions of s 59. Where a use was for a prohibited or intrinsically unlawful purpose, for example where the acquired land was used for the business of manufacturing unlawful drugs, the costs of relocating that business would not be "reasonably" incurred. In the present case, the purpose of the use is not intrinsically unlawful. It was not a prohibited purpose. This is a case where the use was for a purpose which was lawful with development consent but the development consent that had been obtained covered some but not all aspects of the business purpose use on the acquired land.

Reasonableness of relocation expenses 189The Camilleri partnership claims a number of items of expenses for the relocation of their business. The respondent submits that, if the Court finds (contrary to its submissions) that there is no reason related to the lawfulness or otherwise of the operation of the business on the subject land that prevents recovery of those expenses and recovery of those expenses is not prevented by reason of s 61, then some of the relocation expenses claimed by the applicant are recoverable, but not all of them as some are not "reasonably incurred" in relation to the acquisition. The contentious items in the table at [162] above are: (a)13 days relocation time $9,161. (b)Cost of construction of shed at Nelson $70,975. (c)Outsourcing costs of maintenance work - anticipated $9,100. (d)Rent for industrial unit $36,000.

Background to the partnership's claims 190The Camilleris learned of the need to move from the acquired property in November 2011, nearly a year before the land was actually acquired. New land at Nelson was located the next month and was purchased over a period of about six months, with contracts exchanged in mid June 2012 and completion in mid July 2012. Mr Camilleri noted time spent away from the business connected with this process, including diarised time and Saturdays away from the business. The respondent accepts these claims for, respectively, $2,861 and $5,709. 191The Camilleris were given until the end of May 2013 to vacate the property. There was accordingly a period of about 18 months from when they first learned of the acquisition to the date they needed to vacate. There was a period of around 10 months from when Mr Camilleri completed the purchase of the Nelson property to the time they had to leave the acquired land. 192Mr Camilleri took a period of two weeks off work in order to move - packing, driving to and from the Nelson property, transporting the machinery, parts and tools, and unpacking. It is this period off work that gives rise to the disputed claim for relocation time. 193Mr Camilleri intended to operate the business from the new property at Nelson. He approached Hills Shire Council to discuss submitting a development application for a new shed to use as the new depot for his truck. However, the Council told him - before applying for consent - that he could not do on the Nelson property what he did at the acquired property. A Council officer told him: You can't do that on this property. If you want your DA to be approved, you are going to have to say that you are only going to park your truck in the shed. So this shed will be used for secure parking and visual inspections only. 194Following this conversation, Mr Camilleri submitted his development application and obtained consent to build the new shed/garage. The evidence does not support the applicants' submission that the Council did not give any indication that it was unreasonable to proceed. Despite being told by a Council officer what the limited scope of lawful activity on the Nelson property was, he "decided that I would try and see if I could get away with maintaining and washing the truck on the Nelson property". 195He has received complaints about his activities from neighbours and believes: It is only a matter of time before Council prevents me from carrying out maintenance and the like at the Nelson property. When that occurs, I will have to find an industrial unit to maintain, wash and refuel the truck. I will park the truck on the Nelson property overnight and travel to and from the industrial unit when needed. I have started looking for an industrial unit. 196He states that he does not intend to seek consent to carry out those activities at the Nelson property as consent is likely to be refused. 197The partnership seeks to recover the cost of building the shed at Nelson; the cost of six months maintenance costs during the period they are seeking an industrial unit; and rental for the industrial unit. All these claims are disputed.

13 days relocation time $9,161 198Mr Camilleri had 13 days off work (he worked 6 days per week) in order to relocate the property of the business to the Nelson property. Quantum is agreed at $9,161. This is much less than the cost of engaging professional removalists. The only argument that the respondent advances is one which in effect appears to assume the application of s 61 which I have earlier rejected (ie along the lines that relocation costs are not reasonable because they have been incurred in realising the potential for residential subdivision). Accordingly, I allow this claim under s 59(c).

Cost of construction of shed at Nelson $70,975 199It is common ground that the business cannot be lawfully conducted from the Nelson property, except for the garaging of the truck. 200So much was made clear to Mr Camilleri by the Hills Shire Council even before he submitted his development application for the shed. However, Mr Camilleri chose to ignore that advice and decided he would "see if I could get away with" doing what the Council had specifically advised he could not do. He built a large shed at a cost of over $70,000 in order to run his business from there, including garaging and maintaining his truck, storing the items used for maintenance, and running a small business office where his wife does administrative work. The Camilleris do not yet live on the Nelson property because they are awaiting completion of construction of a house thereon. In the interim they are living in another house at Schofields and have been travelling between there and Nelson to carry on the business, albeit unlawfully. They now accept that they do not have, and will not obtain, consent for this use at Nelson (apart from garaging the truck in the new shed) and have to move the business to different premises. 201Given these circumstances, in my view it is unreasonable for the partnership to claim the cost of $70,000 to build such a large shed that is a white elephant, apart from the garaging of the truck. If the business was in compliant premises, there would be no need for such a large shed. The respondent submits that the truck could be garaged at the other premises; that it would make sense for materials needed to maintain the truck to be stored there as well, as that is where maintenance is to be carried out; and that there is nothing done in the shed that could not be done more reasonably and efficiently elsewhere. The respondent submits that given that the Camilleris do not currently reside at Nelson (and will not do so until at least Christmas 2014), if they were to establish a location elsewhere for the maintenance of the truck, it would be highly inefficient to maintain the truck at one location, drive it to Nelson to garage it, then drive back home. 202It was reasonable to garage the truck at the acquired premises and in my view it is reasonable to garage it at the Nelson premises. They respectively were and are where Mr Camilleri lived and will live. His driving hours are restricted by law. It is natural that he would maximise the profitable driving time and minimise the time spent travelling to and from work. On nights when no repairs or maintenance are required, it would be natural for him to continue to drive the truck home and park it there. 203In my opinion, the cost of a shed of similar dimensions to Shed 1 on the acquired land, sufficiently large to garage the truck at the Nelson property, would have been a reasonably incurred cost. That is because the partnership lawfully and reasonably garaged the truck in Shed 1 on the acquired land and were lawfully entitled to store tools therein, but should have taken the truck elsewhere to lawfully carry out the substantial maintenance and repairs routinely required. It was reasonable to continue to do lawfully at the Nelson property what they had lawfully and reasonably been doing on the acquired land. However, the shed constructed on the Nelson property is approximately 120 percent larger than the lawfully constructed shed on the acquired land. A downward adjustment of its cost should therefore be made to arrive at a reasonably incurred cost. This should not be done on a strictly proportionate basis since some element of cost would be incurred regardless of size. Doing the best I can, I would allow $50,000 as a reasonably incurred cost.

Anticipated outsourcing costs of maintenance work and rent for industrial unit 204These two claims are put on the basis that once Mr Camilleri decides to move, he will cease maintaining the truck at Schofields and find an industrial unit to carry out maintenance activities on the truck. During the period of about six months estimated to find and obtain consent for an industrial unit, Mr Camilleri will need someone else to maintain the truck, and labour costs are claimed over this period. Once the unit is located, rent will be at an amount agreed by the experts of about $55,000 per year. 205As discussed earlier in the context of the freehold disturbance claims, the principles relating to recovery of relocation costs under s 59(c) were reviewed in George D Angus Pty Ltd v Health Administration Corporation [2013] NSWLEC 212 at [67]-[78]. The relocation referred to in s 59(c) will usually be from the acquired land to a different place, but can in some circumstances encompass moving from land other than the acquired land, provided there is a sufficient connection with the acquired land and the acquisition. In George D Angus it was the claim for a second move that was disallowed. An obstetrician/gynaecologist had initially relocated from the acquired land to other premises in Wagga Wagga, but was incurring losses practising from those new premises due to additional difficulties with his practice caused by operation from that location. After two years, he decided to move his practice to Newcastle, incurring further losses. It was held that the incurring of those losses would not be reasonably incurred, and would not be a direct and natural consequence of the acquisition: (at [191]). 206In this case, the respondent has accepted the reasonable costs associated with a move from Schofields (subject to s 61). However, the respondent submits that the proposed second move from Nelson is too remote from, and is not a consequence of, the acquisition, but is a consequence of the unwise and unreasonable decision of the applicants to move their business in the first instance to land where they had been warned they could not operate the business. I agree. Accordingly, I disallow these two claims.

Summary 207For these reasons the amounts that should be awarded to the Camilleri partnership applicants are as indicated in the table set out above at [168].

ORDERS 208I have summarised at [5] above the components of my assessment of the compensation payable to the applicants. The orders of the Court are as follows: 1Determination of compensation in the eight proceedings: (1)Attard 53 Schofields Road $2,619,857 (2)Attard 55 Schofields Road $2,728,025 (3)Xiguis 57 Schofields Rd $2,677,500 (4)Hsia 59 Schofields Rd $2,676,644 (5)Sultana 61 Schofields Rd $2,607,588 (6)Camilleri 67 Schofields Rd $3,265,088 (7)Milicevic 31 Tallawong Rd $3,422,246 (8)Camilleri partnership $94,349 2The respondent is to pay the applicants' costs. 3The exhibits may be returned. ANNEXURE

Amendments 18 June 2014 - 29/4/14 amendments - Corrigendum: slip rule corrections:[96] The last sentence should read: Amended paragraphs: [96], [113], [114], [168] 18 June 2014 - CORRIGENDUM slip rule corrections to paras [5]- Total column amended for the following applicants: Attard (53): 2,619,857; Attard (55): 2,728,025; Xiguis: 2,677,500; Hsia: 2,676,644; Sultana: 2,607,588; Camilleri: 3,265,088; Milicevic: 3,422,246;[162] - Stamp Duty column amended for the following applicants: Attard (53): 119,580; Attard (55): 119,580; Xiguis: 119,580; Hsia: 119,580; Sultana 117,435; Camilleri: 144,605;Compensation column amended for the following applicants: Attard (53): 181,857; Attard (55): 265,005; Xiguis: 214,480; Hsia: 213,624; Sultana: 183,568; Camilleri: 347,068[208] & coversheet - Determination of compensation amended for the following applicants: Attard (53): $2,619,857; Attard (55): $2,728,025 Amended paragraphs: [5], [162], [208], coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 June 2014