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[2026] NSWLEC 36
General information, not legal advice.
Land and Environment Court (NSW)
2026-04-02
Pain J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Beningna Pty Ltd v Liverpool City Council [2026] NSWLEC 36
Hearing dates: 28-31 July 2025
1 and 21 August 2025
3 and 5 September 2025
9-10 December 2025
Decision date: 02 April 2026
Jurisdiction: Class 3
Before: Pain J
Decision: See [304]-[305]
Catchwords: COMPULSORY ACQUISITION – market value of land compulsorily acquired by local council for public purpose – claim for market value by first mortgagor – whether claim capped by statutory offer due to deemed acceptance by landowner – existing detention basin should not be disregarded as part of public purpose – land flood prone – assumptions about physical state of land at date of acquisition – extent of cut and fill to render land flood free – extent of residential zoned land assumed by hypothetical parties – application of comparable sales to derive residential zoned land rate – application of comparable sales to derive constrained land rate – rent incurred by freehold owner not able to be set off against mortgagor’s compensation
Legislation Cited: Corporations Act 2001 (Cth) s 420A
Environmental Planning and Assessment Act 1979 (NSW)
Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 4(1), 11, 12, 22, 34, 35, 37, 39, 40, 41, 42, 45, 54, 55, 56, 59, 65, 66, 68(2)
Liverpool Local Environment Plan 2008
Liverpool Local Environmental Plan 1997
Public Works Act 1912 (NSW)
Water Management Act 2000 (NSW)
Cases Cited: AG of the Commonwealth v R.T. Co Pty Limited (No. 2) (1957) 97 CLR 146
Coffs Harbour City Council v Noubia Pty Ltd (2024) 258 LGERA 351; [2024] NSWCA 19
Cook v Roads & Traffic Authority of New South Wales [2007] NSWLEC 136
Dabbs v Seaman (1925) 36 CLR 538
Denshire v Roads and Maritime Services (2017) 229 LGERA 118; [2017] NSWLEC 181
Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55
Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales (2024) 116 NSWLR 233; [2024] NSWCA 292
Lake Macquarie City Council v Luka (1999) 106 LGERA 94; [1999] NSWCA 447
McDonald v Roads and Traffic Authority in New South Wales [2009] NSWLEC 105
RD Miller Pty Ltd v Roads and Maritime Services NSW (2020) 103 NSWLR 234, [2020] NSWCA 241
Roads and Traffic Authority v Perry (2001) 52 NSWLR 22; [2001] NSWCA 251
Rosenbaum v Minister for Public Works (1965) 114 CLR 424; [1965] HCA 65
Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82
Sydney Metro v G & J Drivas Pty Ltd (2024) 113 NSWLR 429; [2024] NSWCA 5
Sydney Seaplanes Pty Ltd v Page (2021) 393 ALR 485; [2021] NSWCA 204
Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391
Turner v Minister of Public Instruction (1956) 95 CLR 245
Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156
Texts Cited: Alan A. Hyam, The Law Affecting Valuation of Land in Australia (6th ed, 2020, Federation Press)
Category: Principal judgment
Parties: Beningna Pty Ltd (Applicant)
Liverpool City Council (First Respondent)
Abu.Tony Pty Ltd (Second Respondent)
Representation: Counsel:
M Hall SC (Applicant)
J McKelvey (First Respondent)
Solicitors:
Project Lawyers (Applicant)
Maddocks Lawyers (First Respondent)
File Number(s): 2023/315389
JUDGMENT
Issue 1: Is compensation for market value ‘capped’ by the amount of the Valuer-General’s assessment by reason of Abu.Tony Pty Limited’s deemed acceptance of the statutory offer?
Applicant’s submissions
Council’s submissions
Finding on threshold issue
Issue 2: Is the existing basin part of the public purpose of the acquisition and should be disregarded in accordance with s 56(1)(a)?
Planning evidence relevant to existing basin
Mr Haskew’s written report 17 October 2024
Mr Chambers’ written report 18 October 2024
Oral evidence
Hydrology
Applicant’s submissions
Council’s submissions
Finding on public purpose – existing basin should not be disregarded
Applicant’s claim for R1 land
Issue 3: Assumed zoning in NE corner
Strategic planning and development controls and flood mapping for riparian zone
Evidence of experts on extent of flood liability/riparian zone width
Width of Cabramatta Creek
Top of bank vs hydroline
Riparian averaging
Applicant’s submissions
Council’s submissions
Finding on NE corner R1 zoning
Extent of flood risk in NE corner
Riparian corridor requirement
Assumed width and measurement of riparian zone - top of bank or hydroline?
Width of creek
Averaging
Criticism of Mr Gray’s flood modelling
Applicant’s submissions
Council’s submissions
Finding on Mr Gray modelling
Issue 4: Assumed extent of residential land in SE corner
Finding on Issue 4
Issue 5: Riparian works required to render residentially zoned land flood free
Issue 6: Would the minor works necessary to render residential zoned land flood free imply cut being taken from the area of Lot 13?
Evidence
Submissions
Finding on Issue 6
Issue 6A: if (i) the basin cannot be disregarded under s 56(1) and (ii) more than 2,686m2 of land in the SE area has an underlying zoning of R1 (any scenario other than Mr Chamber’s straight line), then:
(1) Would a replacement basin be required to be built by the developer?
(2) Could such a basin be built on the Residue Land NW of Cabramatta Creek?
Applicant’s submissions on NW basin
Council’s submissions proposed NW basin fails
Finding on assumption of feasibility of NW detention basin
Issue 7: What rate should be applied to the area of residential zoned R1 land?
Comparable sales (R1)
Brief description of the Okinawa Sale
Analysis and adjustments of the Okinawa Sale
Adopted land value rate for the underlying R1 zoned land
Issue 8: What rate should be applied to the area of C2/E2 zoned constrained land?
Lunney primary sale/Carrapetta sale 3 – Residue Land sale 2-4 Rynan Avenue Edmondson Park
Carrapetta (secondary) sale 6/Lunney sale 5 (335 Thirteenth Avenue Austral)
Calculation of land value rate based on sale of 335 Thirteenth Avenue
Carrapetta sale 5/Lunney sale 6 (145 Ninth Avenue Austral)
Calculation of a land value rate for the underlying C2/E2 zoned land based on the sale of 145 Ninth Avenue
Carrapetta sale 4 (610 Fifteenth Avenue Austral)
Carrapetta sale 7 (36 Lyons Road Prestons)
Carrapetta sale 8 (225 Jardine Drive Edmondson Park)
Adopted Constrained Land Value Rate
Issues 9 and 10 Set off
Imposition of terms under s 34(3)
Council’s submissions
Operation of s 34
Rental set off under s 34(4)
‘Other money’ set off under s 34(4)
Application to Mortgagee
Applicant’s submissions
Finding on set off for rent
‘Reasonable’ claim for set off?
Rent when land unoccupied not able to be set off
Clean up costs not able to be set off
Disturbance
Conclusion
Liverpool City Council compulsorily acquired land in Edmondson Park belonging to Abu.Tony Pty Limited (Abu.Tony) which became Lot 11 DP 1263762 (the Land). The acquisition was gazetted on 11 November 2022 the date of acquisition (DOA). The public purpose was stated to be public recreation. At the date of acquisition Abu.Tony had been wound up. The Applicant Beningna Pty Ltd held a first mortgage over the Land, a relevant interest in land for the purposes of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (J**ust T**erms Act). At the date of acquisition its interest in land was extinguished by virtue of s 37 of the J**ust T**erms Act. The Applicant has appealed under s 66 of the Just Terms Act the determination of market value by the Valuer-General. I thank Acting Commissioner Kempthorne for his assistance in this matter.
The Applicant bears the onus of proof of establishing the factual circumstance which must be found to exist in order to establish a right to compensation; Roads and Traffic Authority v Perry (2001) 52 NSWLR 22; [2001] NSWCA 251 (Perry) at [67]. The Court is acting as the judicial valuer in this case; Denshire v Roads and Maritime Services (2017) 229 LGERA 118; [2017] NSWLEC 181 at [4] citing Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391 (Caruso) and Yates Property Corporation Pty Ltd (in liq*) v Darling Harbour Authority* (1991) 24 NSWLR 156.
Abu.Tony was re-registered as a company as these proceedings are on foot. It was joined as a necessary party by court order made on 3 December 2024. It has played no part in the proceedings.
Prior to the proposal to carry out the public purpose, the Land was within two approximately 2 hectare (ha) lots being Lot 1 DP 774700 and Lot 22 DP 631868 which together had an area of 4.047ha. The Parent Parcel is that part of Lots 1 and 22 excluding SP97977 and Drinkwater Lane shown in the map below:
The general features of the Land (Lot 11) at the date of acquisition are:
an irregular shape,
an area of 2.011 ha (20,110m2),
an uneven contour,
traversed by natural watercourses (Cabramatta Creek and West Cabramatta Creek),
partly improved with a storage shed, hardstand, fencing and a detention basin (the existing basin),
partly cleared with some natural vegetation along the watercourses,
frontage to Camden Valley Way of about 58.3 metres (m),
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.
Thus, the hypothetical parties must be supposed to have “a knowledge of all matters that affect its [the land’s] value” and, further, to be “perfectly” acquainted with the land itself. As to the former, the High Court in Walker did not say that the attributed knowledge of all matters is perfect.
The definition of market value in s 56 of the Just Terms Compensation Act relates to the price which a buyer would give and a seller take for the land in all the relevant circumstances at the acquisition date, assuming the hypothetical buyer and seller are parties “… willing to trade, but neither of them so anxious to do so that [they] would overlook any ordinary business consideration”, and both being “perfectly acquainted with the land, and cognizant of all circumstances which might affect … [its] value” (Spencer v The Commonwealth of Australia (1907) 5 CLR 418 at 441 per Isaacs J).
Much of the extensive expert evidence called is directed to the assumptions which would be made by a hypothetical well informed buyer and seller of the land. The assumptions relate to issues of strategic planning concerning the likely zoning of the land informed by the extent of flood affectation.
The parties agree that the Applicant’s principal claim of $4,822,419 is less than the amount recoverable under the mortgage held by it of approximately $5.7 million. The Applicant submits that it is entitled as an entity with an interest in land to claim compensation and its interest is not capped by virtue of the deemed acceptance of the statutory offers by the landowner Abu.Tony.
The Council submits that firstly, compensation is capped by the amount received by Abu.Tony as the landowner being the statutory offer and no more is payable to the Applicant. Secondly (alternatively) due to the physical condition of the Land at the DOA compensation is less than the statutory offer. Given the presence of a detention basin and the flood prone nature of the Land it could not be developed for residential purposes, absent the public purpose.
Over the course of the hearing the parties identified then issues, with various sub-issues, which arise for determination. The Applicant’s case evolved markedly in the course of the hearing. As will become apparent all of the issues have been addressed but for one, Issue 6A, which may require further clarification from the parties.
The Council submits that compensation for market value is ‘capped’ by the amount of the Valuer-General’s assessment ($3,055,529.71) by reason of Abu.Tony’s deemed acceptance of the statutory offer. Answering that question requires close consideration of the Just Terms Act.
The Just Terms Act provides in part:
Part 3 Compensation for acquisition of land
Division 1 Entitlement to compensation
37 Right to compensation if land compulsorily acquired
An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part by the authority of the State which acquired the land.
…
Division 2 Claims for compensation
39 Claim for compensation
(1) A person who wishes to claim compensation under this Part must lodge a claim in accordance with this section with the authority of the State that is acquiring the land concerned or with the Valuer-General.
(2) A claim for compensation must be in the form prescribed by the regulations or (if no such form is prescribed) in the form approved by the Minister.
…
Division 3 Post Acquisition procedures relating to compensation
42 Notice of compensation entitlement and offer of compensation
(1) An authority of the State which has compulsorily acquired land under this Act must, within 45 days after the publication of the acquisition notice, give the former owners of the land written notice of the compulsory acquisition, their entitlement to compensation and the amount of compensation offered (as determined by the Valuer-General).
(2) The compensation notice must be given to all former owners of the land who, immediately before the acquisition—
(a) had a registered interest in the land, or
(b) were in lawful occupation of the land (but only if the authority of the State considers they are entitled to compensation), or
(c) had, to the actual knowledge of the authority of the State, an interest in the land which entitles them to compensation.
45 Deemed acceptance of offer of compensation
(1) If a person entitled to compensation under this Part does not, within 90 days after receiving a compensation notice—
(a) accept the amount of compensation offered by the authority of the State, or
(b) lodge with the Land and Environment Court an objection to the amount of compensation offered,
the offer of compensation is taken to have been accepted.
…
Division 4 Determination of amount of compensation
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.
…
65 Effect of acquisition of mortgage interest
(1) If—
(a) land is compulsorily acquired under this Act, and
(b) the land is subject to one or more mortgages, then, as a general rule, the compensation to which the owner of the land will be entitled in respect of the acquisition is to be determined as if the land had not been subject to the mortgage.
(2) However, if compensation is payable under this Part to a mortgagee in respect of a mortgage interest, the compensation payable to the owner of the land acquired is to be reduced by so much of the compensation as is payable to the mortgagee.
Division 5 Objections and appeals to Land and Environment Court
66 Objection against amount of compensation offered
(1) A person who has claimed compensation under this Part may, within 90 days after receiving a compensation notice, lodge with the Land and Environment Court an objection to the amount of compensation offered by the authority of the State.
(2) If any such objection is duly lodged, the Land and Environment Court is to hear and dispose of the person’s claim for compensation.
…
On 16 December 2021, the following mortgages were registered on the Land (Lot 11):
AR743750 to Beningna Pty Ltd (the Applicant); and
AR743751 to Denis Gill, Resup Pty Ltd and Mernew Pty Ltd (Gill Entities).
On 8 August 2023, pursuant to s 41 of the Just Terms Act, the Valuer-General issued a single notice of determination of compensation for the interests of Abu.Tony, the Applicant and the Gill Entities in the Land.
On 25 August 2023, the Council issued a single notice of compensation entitlement to Abu.Tony, the Applicant and the Gill Entities under s 42 of the Just Terms Act in the amount of $3,055,529.71 (statutory offer).
Abu.Tony did not object to the statutory offer, resulting in a deemed acceptance under s 45 of the Just Terms Act for that interest in land. At issue is whether any additional amount of compensation can be sought by the Applicant.
On 5 October 2023, the Applicant and the Gill Entities each appealed in the Court the statutory offer under s 66(1) of the Just Terms Act. The Gill Entities have discontinued their appeal.
Where there are multiple interests in land each interest gives rise to an independent and separate claim capable of being litigated by that claimant. Longstanding authority supports the Applicant’s approach; see Rosenbaum v Minister for Public Works (1965) 114 CLR 424; [1965] HCA 65 (Rosenbaum) considering the Public Works Act 1912 (NSW) and especially Lake Macquarie City Council v Luka (1999) 106 LGERA 94; [1999] NSWCA 447 (Luka) which considered the Just Terms Act.
The statutory construction of the Just Terms Act does not support the Council’s contention. ‘Interest’ and ‘owner’ simply means any person who has an interest in the land. An owner is entitled to receive a notice of intention to acquire the land pursuant to s 12. Each owner has a right to be paid compensation under s 37 in accordance with Part 3 of the Just Terms Act. Each owner can make a claim for compensation as provided in s 39.
Section 65 is intended to address the common situation where the amount secured by the mortgage is less than the amount of the market value. Section 65 applies routinely to say, first pay the mortgagee the outstanding balance under the mortgage then the remainder is payable to the dispossessed owner. Section 65 simply confirms that a dispossessed owner is entitled to the value that would be achieved if there was no mortgage in place.
The Council submits that by virtue of the operation of the Just Terms Act the Applicant as mortgagee of the Land cannot maintain a claim for market value greater than the landowner Abu.Tony. As Abu.Tony is deemed to have accepted the Valuer-General’s assessment of compensation as no objection was lodged by it (it is agreed that gives rise to a deemed acceptance under s 45) that is the total amount of compensation available to the Applicant. Due to s 65 of the J**ust Terms Act a mortgagee’s interest can rise no higher than that of the landowner.
The Council accepted that the Applicant has an interest in the Land and is therefore an owner within the meaning of s 4(1). Its interest was extinguished under s 37 crystallising its claim for compensation. The quantum and distribution of that entitlement to compensation is governed by s 65 of the Just Terms Act because the Applicant is a mortgagee.
Section 65 operates in two stages. Firstly quantum is identified in s 65(1). Secondly distribution occurs in s 65(2). The first step requires inquiry into what compensation the ‘owner’ would be entitled to if the land was not mortgaged, a single figure. Secondly that single amount is distributed to satisfy the amount payable to the mortgagee with any balance payable to the owner. Section 65(1) limits the amount payable. The distinction is drawn in the section between owner and mortgagee. The Applicant while an owner for the purposes of ss 4(1), 37 and 42 is not the owner under s 65. The owner is the registered proprietor in s 65. That textual variation in owner includes in s 37 referring to an owner of interest in land. Separately s 11 refers to owners of the land as having to receive notice of the intention of an authority to acquire land. The interest of an owner in land under s 4 will vary according to context.
The amount payable to the freehold owner includes market value and by operation of s 56(2) the sum of the market value of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of that land at the date of acquisition. The security of the mortgagee cannot have a value greater than the value of the asset that is the security. Luka at [59]-[60] confirms this approach. Where the secured debt exceeds the s 65(1) ceiling, the acquiring authority’s liability is limited to the ceiling, from which the mortgagee’s interest is paid with any remaining balance (if any) payable to the registered owner.
The construction of s 65 in the circumstances of a the mortgagee’s interest exceeding the landowner’s interest as represented by the statutory offer has not arisen for determination before in the Court. Statutory construction principles require that s 65 be considered on its terms in context, generally in light of the statute as a whole; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39] (the Court); Sydney Seaplanes Pty Ltd v Page (2021) 393 ALR 485; [2021] NSWCA 204 at [25]-[41] (Bell P).
Is the mortgagee’s interest limited by a landowner’s action (lack of action in this case resulting in acceptance of the statutory offer) in a claim for its interest in land under the Just Terms Act? A mortgagee’s interest arises through the legal arrangement it has with the landowner. Section 54 specifies that a person is entitled to be justly compensated, having regard to all relevant matters under Part 3. Section 65 is located in Part 3 and that is one basis on which the Respondent contends for its construction that the Applicant’s claim can rise no higher than the landowner’s interest.
Rosenbaum an older authority relied on by the Applicant considered the Public Works Act 1912 (NSW) and stands for the general proposition in that context that each person having a separate interest in land has a separate and independent claim. It is relied on for that general proposition. That finding in a different statutory context did not have to consider a provision like s 65.
Both parties pray in aid Luka. The circumstances in Luka were markedly different to what I am considering so that the statements of principle of Handley JA are directed to those different circumstances. At issue was whether roads on land acquired by a local council (Lot 3) were public or private and whether other interest holders existed. There were registered proprietors of the lots fronting the reserved roads and lanes in Lot 3 other than the Council. Those proprietors had registered private rights of way over the roads and lanes (in accordance with Dabbs v Seaman (1925) 36 CLR 538). No notice was given to these proprietors of the intended resumption of the land by the Council. As these were registered interests in the resumed roads under s 37 of the Just Terms Act each owner with an interest in the land had a personal right to compensation under the Act. In [59] Basten JA stated that s 65 provided the compensation for the acquisition of land subject to a mortgage which should in general be determined as if the land was not subject to the mortgage. The statement in [59] reflects precisely the terms of s 65(1)(b). That [60] states the rights of the mortgagee are enforceable against the owner and their value cannot exceed the compensation payable to an owner can be accepted at that level of generality. I do not consider that at [60] supports the Respondent’s submission that because of that section a mortgagee’s interest can rise no higher than a registered proprietor accepts (including by default). That observation is contrary to the Respondent’s construction that the amount determined in s 65(1) is a ceiling of the registered owner (emphasis added) a mortgagee’s interests.
The public purpose for the acquisition of the Land was expressed as public recreation. The parties agreed the public purpose is a publicly provided trunk drainage system in the location or vicinity of the Land. The public purpose also serves a public open space recreation purpose. At the date of acquisition there was an existing basin located on the Land which the owner Abu.Tony built at the time that a residential apartment building was developed on the Parent Parcel. At issue is whether the existing basin should be disregarded because it was part of the public purpose (Applicant’s case) or having been built privately was solely for the owner’s purposes and should not be disregarded (Council’s case). The answer will determine when the diminution in value of the Land caused by the presence of the existing basin can be disregarded in accordance with s 56(1)(a).
The parties agreed that the issue is whether the Court is satisfied on the balance of probabilities that but for the public purpose the Land would not have been the site of a detention basin of the dimensions and in the location that exists, applying the test in Coffs Harbour City Council v Noubia Pty Ltd (2024) 258 LGERA 351; [2024] NSWCA 19 (Noubia CA) at [80].
Introduction
1. On 23 November 2012, Michael Taouk and Amal Taouk (the Taouks) became registered proprietors of Lot 1 DP 774700 (Lot 1).
2. Abu. Tony Pty Ltd ACN 169 449 334 (Abu. Tony) was registered on 8 May 2014.2
3. On 29 February 2016, Abu. Tony acquired Lot 22 DP 631868 (Lot 22).
4. On 27 July 2016, Abu. Tony acquired Lot 1, thereby owning both Lot 1 (north) and Lot 22 (south), as shown in the historical annotated aerial image below:
5. At the time of the transfers in [3] and [4], Amal Taouk was the sole director and company secretary of Abu. Tony.
The 2015 Consent
6. On 13 October 2014, the Taouks lodged DA-898/2014 for Lot 1, seeking approval for three residential flat buildings comprising 82 apartments.
7. Development consent was granted on 16 August 2015, subject to conditions (the 2015 Consent).
8. Condition 1 of the 2015 Consent required development to be carried out in accordance with specific plans, including Civil Engineering Works Drawing DA02-14075/F by Diversi Consulting. That plan depicted the proposed development on Lot 1 as follows:
9. On 11 November 2016, the 2015 Consent was modified to increase the height of Building A by 740mm.
10. On 19 July 2017, Abu. Tony applied to Council to further modify the 2015 Consent by removing Buildings C and D, designating those areas as residue lots (MOD2). Council approved the modification on 30 November 2017, reducing the development to 50 apartments, all within Building A**.**
11. Condition 1 of MOD2 required the development to be carried out in accordance with specified plans and reports. These included Civil Engineering Plans C101-150 14075 by Diversi Consulting. That plan showed the basin above at [8] replaced with a larger basin shown below:
Development under the 2015 Consent
12. By 10 August 2015, the building on the northeastern corner of Lot 1 was demolished.
13. By 29 April 2016, the north eastern corner of Lot 1 was largely cleared:
14. By 27 August 2016, the foundations for Building A were being laid:
15. Construction of Building A continued through 2017, and by December 2017, the sediment basin approved under MOD2 was under construction:
16. By 6 May 2018, the basin was largely complete:
The 2018 Consent
17. On 9 May 2016, Abu Tony lodged development application DA-471/2016 (2016 DA), in respect of Lot 1 and Lot 22. Development consent was granted on 26 October 2018, subject to conditions (the 2018 Consent).
18. Condition 1 of the 2018 Consent required the development to be carried out in accordance with specified plans and reports. These included a Concept Stormwater Drainage and WSUD Strategy prepared by Diversi, dated 24 November 2017, which depicted the basin approved under 2015 MOD2 shown above at [11]:
Development under the 2018 Consent
19. By January 2020, the building on the southeastern corner of Lot 22 was demolished:
20. By June 2020, the foundations for Building D (approved by the 2018 Consent) were being laid:
21. By 27 December 2020, earthworks extended to the basin area:
22. Those earthworks progressed into January 2021:
23. By early 2022, construction of Building D was completed, and an inlet east of the basin was constructed:
Planning evidence was provided by Mr Haskew the Applicant’s town planner in a report dated 17 October 2024 and Mr Chambers the Council’s town planner in a report dated 18 October 2024. A joint report by both planners and hydrologists Mr Gray and Dr Martens was prepared. All experts were cross-examined.
The experts agreed the relevant planning instruments to be considered in relation to the public purpose. They disagreed on their relevance to the existing basin on the land.
Precinct planning for what is now the Edmondson Park Release Area (EPRA) was carried out by the Council resulting in an amendment (Amendment 83) to the Liverpool Local Environmental Plan 1997 (LLEP 1997). Final reports were prepared for the precinct planning process in 2003. The Land is identified as public open space and drainage land within those reports. Amendment 83 was gazetted on 30 March 2006. Key outcomes of Amendment 83 were:
Land to which Amendment 83 applied was rezoned, including rezoning land now identified as EPRA from 1(e) Future Urban to urban purposes;
Division 3 cll 70G-70L dealt with ‘Localities’;
Clause 70H(1) required a development control plan to be made for a locality before development consent could be granted. Clause 70H(3) set out the matters which the development control plan was required to address. Clauses 70H(3)(f)-(h) are particularly relevant:
(f) to contain proposals that, in the opinion of the Council:
(i) would ensure that natural water cycle systems are supported and integrated into proposed development, and
(ii) reflect best practice for stormwater quality and quantity control and associated uses, and
(g) to contain a detailed plan for water cycle management that illustrates and explains how all staged works can be integrated into a final drainage design (as described in the development control plan) for the Edmondson Park Smart Growth Precinct, including detailed proposals for the provision and decommissioning of any temporary drainage arrangements, and
(h) to contain a financial model explaining the staging of development and corresponding provision of infrastructure that identifies the following:
(i) infrastructure proposed to be provided by the developer and infrastructure proposed to be provided by the Council,
(ii) any financial limitations or impediments to the delivery of infrastructure,
(iii) any proposed strategies to overcome these limitations or impediments.
Division 3 required drainage infrastructure to be delivered by the private sector through the piecemeal development of each locality.
Pursuant to Amendment 83, the area on which the Land is located was referred to as the ‘Edmondson Park Smart Growth Precinct’.
Amendments to the LLEP 1997 in May 2008 (Amendment 114) made various changes to zoning within the Edmondson Park Smart Growth Precinct, including zoning land previously ‘deferred’ under Amendment 83.
The Liverpool Local Environment Plan 2008 (LLEP 2008) was gazetted on 29 August 2008, repealing the LLEP 1997. Under the LLEP 2008, the Parent Parcel was partly zoned R1 General Residential, RE1 Public Recreation and C3 Environmental Management. The Land was wholly zoned RE1 Public Recreation.
All experts agreed that RE1 zoning on the Land reflected the public purpose and that otherwise some of the Land would have been zoned in part R1 and in part C2 Environmental Conservation. The experts disagreed on the size of the areas zoned R1 and C2 respectively.
All experts referred to a report Edmondson Park Strategic Overview of Stream and Riparian Management Processes (October 2007) by J Wyndham Prince (Prince Report 2007) showing drainage and open space around Cabramatta Creek.
An Infrastructure Facilities Map from the Liverpool Contribution Plan 2009 (Contribution Plan 2009 Map) identified two basins (both labelled D6) in the location of the existing basin on the SE corner of the Land shown below.
…
Mr Haskew identified that the NW corner of the Parent Parcel could be used for flood storage, dependent on the opinions of the hydrologists. The public purpose which delivered (1) riparian protection, (2) flood mitigation, (3) stormwater detention and (4) public open space would always have been provided as part of the strategic planning process for the EPRA.
The Council may elect to deliver stormwater detention by large centralised basins. The exercise of compulsory acquisition powers has the effect of advantaging some landowners over others. If one disregards the public purpose, then the strategic planner would need to provide the four objects by other means, namely by requiring the private development sector to deliver them.
The Prince Report 2007 depicted areas around watercourses for which filling was identified as being possible.
Stormwater detention and public open space must be provided. Their locations are discretionary at the strategic planning stage. Once the public purpose is disregarded, the set of incentives that apply to a local council planner in delivering such infrastructure must be disregarded. While a council planner might emphasise efficiency in the delivery of infrastructure, the private sector will be incentivised to deliver the maximum area of developable residential land that is consistent with its obligations to contribute to achieving the public purpose. It cannot be assumed that absent the public purpose the same stormwater detention solution would have been adopted.
And it may be that the construction was cheaper in that location to make it shallower, the current basin. It may be that there were hydraulic grade line issues, because the kidney shape basin is located on slightly higher land, whereas the basin that’s currently constructed is located on slightly lower land where the second order watercourse was located. And so that might mean that the basin needs to widen out in area to achieve the hydraulic grade lines from the inlet to the outlet through the basin. That’s, that’s engineering assumption…
Mr Haskew noted that the location of the existing basin is very similar to the larger D6 Basin in the Contribution Plan 2009 Map. He accepted it was smaller than the larger of the D6 basins in the Contribution Plan 2009 Map. Mr Haskew and Dr Martens agreed the existing basin was about 1,800m2.
Mr Chambers and Mr Haskew agreed that the Land was shown as being earmarked for future acquisitions for public open space and drainage works in 2006. Mr Chambers agreed the Council was obliged to provide the larger D6 Basin in the Contribution Plan 2009 Map.
Noubia CA demonstrates that the factual inquiry as to what the situation would have been but for the existence of the public purpose is a question on the balance of probabilities as to whether or not absent the public purpose the existing basin would have stood where it stands today; Noubia CA at [80]. The second stage of the inquiry is whether an established decrease in the value of land is caused or not caused by the carrying out of the public purpose. This stage of the inquiry requires heightened satisfaction.
The Court must be satisfied that but for the intention of the Council to carry out the public purpose of collective drainage works for a large area of urban release land Abu.Tony would not have constructed the existing basin as it did.
The location of the existing basin was in service of the public purpose. The strategic planning history indicates that the Council planners opted for centralised provision of stormwater detention. Going back to at least 2006 (Amendment 83 to the LLEP 1997) the area has been earmarked for acquisition by the Council. The Prince Report 2007 shows detention infrastructure in an approximate location to where the existing basin stands. The Contribution Plan 2009 Map also indicates a detention basin on the Land.
The existing basin services a larger area than the Land (Parent Parcel and building A). A basin has been shown in this area in Council planning documents since 2007 and contributions have been levied on that basis since at least 2009. The existing basin services an area covering an estimated 14ha (beyond Abu.Tony’s holdings) as identified by Dr Martens.
The planners readily accepted in oral evidence that, having collected money from individual developers on the basis of the contributions plan, there is an obligation on the Council to provide infrastructure substantially in accordance with the plan upon which they have levied the contributions.
It is more likely than not that a developer, absent the public purpose, would have adopted a different solution than the one adopted as it sacrificed developable land. There was an obvious alternative available that did not sacrifice developable land. This was to utilise the doubly constrained land in the NW corner of the Land, under the transmission easement, to provide an equivalent area of water detention and/or water quality treatment. That land was doubly constrained because it is both high-risk, flood-prone and largely burdened by an electricity transmission easement.
Mr Gray and Mr Haskew’s evidence was that if Abu.Tony had no supposition about where the required detention basin should have been placed it would have been placed in this location.
Abu.Tony made a constrained choice to put the basin in its present location and to build a basin of that size. Those decisions were deeply affected by the public purpose and the Court should be comfortably satisfied that absent the public purpose the existing basin of that size and in that location would not have been provided.
Any hypothetical purchaser would have needed to take into account the existence of the existing basin at the date of acquisition. No evidence is available from the existing basin builder Abu.Tony as to its motivation in building the existing basin as it did. There is no evidence that the Council required it as part of the DA process. All that is known is that the existing basin was shown in the MOD2 application. The existing basin resulted from Abu.Tony’s independent decision. The development history of the Land demonstrates how the existing basin came to be where it is. The existing basin was constructed pursuant to MOD2.
Mr Gray accepted the existing basin was at the low point on the Land, a logical location to place it, suggesting commercial choice not compulsion in its placement.
The existing basin’s size indicates its private purpose. The larger D6 Basin in the Contribution Plan 2009 Map is about 4,800m2, while the existing basin is 1,800m2. The existing basin is approximately one third the size of what was required in the Contribution Plan 2009 Map. The Council is still required to provide D6 as shown in the Contribution Plan and Abu.Tony building a basin in roughly the same location does not make it part of the public purpose. There are other indicators that Abu.Tony built the existing basin for its own purposes. It does not service the entire catchment that the public purpose basin in the Contribution Plan 2009 Map was designed to capture and Abu.Tony did not seek a set off under the contributions plan. The existing basin has been privately provided.
The test in Noubia CA and Sydney Metro v G & J Drivas Pty Ltd (2024) 113 NSWLR 429; [2024] NSWCA 5 (Drivas) is stricter than a ‘but for test’. Section 56(1)(a) directs the Court to disregard only that component of any change in value that is directly caused by the carrying out, or the proposal to carry out, the public purpose for which the land is acquired. A mere ‘but for’ link is insufficient; Noubia CA at [67]; RD Miller Pty Ltd v Roads and Maritime Services NSW (2020) 103 NSWLR 234, [2020] NSWCA 241 at [180]; Drivas at [46]; Goldmate Property Luddenham No 1 Pty Ltd v Transport for New South Wales (2024) 116 NSWLR 233; [2024] NSWCA 292 (Goldmate) at [53]. The focus is on the effects on value of the public purpose of the acquiring authority only. Accordingly, alterations in value attributable to the landowner’s voluntary design or commercial choices fall outside the statutory disregard; Drivas [88]-[89] per Kirk JA. Drivas demonstrates that decisions made by the landowner who knows land is to be acquired cannot be sheeted home to the acquiring authority.
The extensive agreed facts concerning the development of the existing detention basin on the parent parcel, then Lot 1 DP 774700 and Lot 22 DP 631868 are set out above in considerable detail at [37]. Abu.Tony applied for development consent in 2015 for three residential apartment buildings and proposed a kidney shaped detention basin generally on Lot 22. Application to further modify the 2015 consent was successfully made including seeking consent for a larger basin in the same general location. Building work commenced in August 2015 and the existing basin on Lot 22 was largely complete by early May 2018. A further development consent was lodged in 2018 and the existing basin was incorporated into what was then built on the two lots in 2020-2022 with necessary easements for drainage effected benefitting relevant lots.
Mr Haskew emphasised the planning instruments in place at the time of the above events as part of the Council’s stormwater management plans for the Edmondson Park growth area inter alia. The instruments demonstrated that since 2006 with Amendment 83 of the LLEP and the Contributions Plan 2009, the public purpose was to be served by the larger detention basin D6 on the Land. The submission was made that because of the known public purpose, when development was undertaken by Abu.Tony there was no incentive to sacrifice developable land to provide a centralised stormwater detention basin, particularly when undevelopable land to the west of Cabramatta Creek was available. That was said to give rise to the inference that the location of the existing basin must have been caused by the public purpose.
The required approach to the issues that arise have been considered in Drivas and Noubia CA. In Drivas the issue arose of whether the decision of an owner who did not proceed with development following a notice of intention to compulsorily acquire its property could be compensated on the basis that the development it would have proceeded with should be compensated for under s 56(1)(a). In rejecting that submission at [88]-[89] Kirk JA (Payne JA and Griffiths AJA agreeing) held:
[88] Weighing these factors together, the respondents' construction is not the better understanding of the intended operation of s 56(1)(a) of the Act. An increase or decrease in value caused only by choices made by an owner prior to the date of acquisition in relation to the land, being choices made because of the possibility or certainty of the land being acquired, are not the types of effects on value which can be regarded as having been caused by the actual or proposed carrying out of the public purpose for which the relevant authority is acquiring the land. Section 56(1)(a) does not require that the land be valued on a hypothetical basis as if such choices had not been made. Her Honour erred in concluding to the contrary. The grounds of appeal relating to assessment of market value should thus be upheld.
[89] One further point should be addressed. As noted above at [43], Sydney Metro conceded that in circumstances where a rezoning would have occurred or development consent would have been obtained but for the actual or proposed carrying out of the public purpose, then the absence of the rezoning or development consent could and should be disregarded in assessing market value. Sydney Metro’s version of the appropriate dividing line related to whether what would have been done involved physical changes to the land. That delimitation does not properly recognise that the issue being addressed is a causal one. The limitation is better expressed by saying that increases or decreases in value caused only by choices made by the owner because of the proposed acquisition are not to be disregarded pursuant to s 56(1)(a). In general, it is the fact of possible acquisition which is of concern to the owner, not the actual or proposed carrying out of the public purpose itself. That does not mean that the likelihood of a rezoning or development consent being obtained by the date of acquisition but for the actual or proposed carrying out of the public purpose is necessarily to be ignored, even though doing so may have involved taking account of steps that would have been taken by the owner. That is so because a step in the causal analysis in such cases may be that any application for rezoning or for consent would likely have been refused because of the public purpose. Thus the public purpose itself in such a case has causal significance in the analysis beyond steps the owner would or would not have taken because of the proposed acquisition. As the Council submitted the terms of s 56(1)(a) focus on whether the public proposal is the operative cause of the increase or decrease in value.
Drivas at [88]-[89] was cited in Noubia CA at [59]-[60] as part of the consideration of the causation inquiry required by s 56(1)(a). The circumstances in that case have a substantial similarity to this matter, a particular issue being the identification of the public purpose. In Noubia CA the owner obtained development consent to construct two lakes pursuant to a development consent for a large subdivision. Similar lakes were identified in the relevant planning instruments of the local council as part of the drainage management for a larger area of land beyond Noubia’s land. Its argument that however broadly or narrowly expressed the public purpose was, that was an element inherent in the development application that it made. This was rejected. As Noubia chose to construct the lakes they should not be disregarded under s 56(1)(a). I agree with the Council that the test in Noubia CA is arguably stricter than the’ but for’ test.
The Applicant must establish its case by inference in the absence of direct evidence from Abu.Tony. The assumptions of Mr Haskew, that absent the public purpose requirement for the larger detention basin D6 in that location Abu.Tony would not have used that location, is not supported by any evidence from Abu.Tony. That can only remain an assumption. The Applicant’s submission that ‘it cannot be assumed that absent the public purpose the same stormwater detention solution would have been adopted’ lacks reasonable foundation in the absence of any evidence from Abu.Tony about why it did what it did.
As in Noubia CA*,* Abu.Tony chose to make the 2015 Development Consent in the terms sought with a kidney shaped basin which was subsequently modified to reflect the existing basin then built. The MOD2 consent for an apartment building(s) and later buildings the subject of the 2018 consent built by Abu.Tony were supported by the existing basin.
The parties agreed that no set off for s 94 contributions was sought by Abu.Tony from the Council when development consent was granted in 2016. The existing basin was built between December 2017 and May 2018.That the existing basin was built to serve private interests is further supported by the absence of any set off of liability for payments owing under the Contributions Plan 2009. Condition 3 of the consent to the 2016 DA stated:
All roadworks, drainage works and dedications required to effect the consented development shall be undertaken at no cost of Liverpool City Council
Condition 8 of the consent to the 2016 DA required a s 7.11 payment (Liverpool Contribution Plan 2008 Edmondson Park) of $468,371.00. Of this monetary contribution of $468,371.00, $6,972.00 was for “Drainage-Land” and $22,678.00 was for “Drainage-Works”. The contribution amount required was generally consistent with the Contribution Plan 2009 according to Mr Chambers and this was not disputed.
The existing basin, as agreed by the hydrologists, is in a low-lying area of the Land and for that reason was an appropriate location within the area the subject of the development applications made by Abu.Tony. It does not fulfill the function of the D6 basin depicted in the Contributions Plan 2009 Map given its dimensions and water carrying capacity, as identified in the evidence of Dr Martens.
I do not consider the matters relied on by the Applicant, that the existing basin is on land that was to be zoned residential as part of the public purpose, is bigger than required by Abu.Tony’s development enables an inference to be drawn. Further, that it was theoretically possible that an area on the western side of Cabramatta Creek was available and more appropriate for a detention basin was not really supported by Mr Gray. This statement appeared to be an ‘off the cuff’ opinion not the subject of his written report. To be fair to Mr Gray the task he was asked to assist on was limited, being the modelling of the impact of Mr Haskew’s proposed scheme for residential development.
The Applicant cannot overcome by inference what Abu.Tony chose to do independently on its land in pursuing development in 2015-2022. Abu.Tony chose to build the existing basin for a private purpose. As the Council submitted relying on Drivas and Noubia CA the key inquiry is not whether the approved development serves or aligns with a public purpose but whether the public purpose caused the change in value; Noubia CA [82]-[83]. In Noubia CA the private choices of the landowner were the operative reason for lakes to be built.
The basin should not be disregarded for the purposes of s 56(1)(a). The Land must be valued in its actual state as at the DOA inclusive of the basin. The basin did not form part of the carrying out, or proposal to carry out, the public purpose which is required to be disregarded under s 56(1)(a).
The Council submitted that this finding alone would result in an amount less than the statutory offer of $3,055,529.71 million being applicable. Whether that is the case is potentially influenced by findings made about land values for R1 zoned and C2/C3 zoned land by the valuers. The extent of R1 land in the SW corner is affected by the presence of the existing basin as will be considered below in Issue 4.
In the course of the hearing the diagram at Exhibit 6, Figure 2: Compensatory Cut Area was provided to identify the areas of R1 land claimed by the Applicant in the NE corner (1,591m²) and SE corner (4,106.4m²). Mr Gray’s compensatory cut area in the NW corner across lots 11, 12 and 13 to enable the R1 land on the eastern side to be rendered flood free was identified. Exhibit 6, Figure 2 is below at [84]. This diagram depicts the Applicant’s case relevant to the claim underpinning issues 3 and 4, and necessary civil works
Considering the evidence of the planners Mr Haskew and Mr Chambers, and hydrologists Mr Gray and Dr Martens concerning flood risk is challenging. When individual reports were prepared and joint reporting was undertaken the Applicant’s case was based on Mr Haskew’s proposal for a much larger area of R1 land on the eastern side of Cabramatta Creek of 7,923m². Following Mr Gray’s hydrological modelling which identified the areas he considered could be rendered flood free through cut and fill, this area was reduced to 1,591 m² in the NE corner and 4,106.4m2 in the SE corner as identified in Exhibit 6, Figure 2 below by the blue dotted line. This reduction in area of R1 was identified for the first time during the course of the hearing resulting in further new oral evidence from the experts than would usually be the case. The larger original area claimed is the whole of the pink area in the diagram below:
Absent the public purpose, would an area of 1,591m2 in the NE corner of the Land be considered by a hypothetical purchaser to have had an underlying R1 residential zoning? The Applicant submitted it would have. The Council submitted the whole area would be assumed to be constrained land. Findings on the hypothetical parties’ approach to the assumed width and placement of the riparian zone also have application to Issue 4 which concerns how much of the SE corner beyond an agreed extent would be considered R1 land. An additional issue to be considered in due course is the extent of compensatory cut and fill needed to render any R1 land flood free.
At issue is what approach hypothetical parties would have considered the zoning authority would have adopted to riparian corridors for Cabramatta Creek at the time of Amendment 83. Issues identified include:
what is the flood risk likely to be assume?
would the zoning authority have measured from the Cabramatta Creek centreline (referred to as hydroline in evidence) or from 'top of bank'?
was 'averaging' of the riparian zone likely to be permitted?
would a 10m buffer in addition to the core riparian zone have been included in the riparian zone (E2 or C2) or into the residential zone?
The Land contains Cabramatta Creek, the confluence of Cabramatta Creek, another watercourse referred to in evidence as West Cabramatta Creek and the riparian corridors and flood-affected land associated with these creeks. The hydrologists and town planners agreed that Cabramatta Creek is classified as a 4th order watercourse and West Cabramatta Creek as a 3rd order watercourse under the Strahler stream classification. (That system was not in use at the time the public purpose was implemented). A summary of the various instruments, policies and reports referred to by the experts follows.
Prior to commencement of strategic planning for the EPRA, the modelled pre-urbanisation rural flooding conditions shown in Figure B-2 100-year ARI Existing Conditions Flood Levels in the report titled Edmondson Park Master Planning: Drainage GHD (2000) (GHD 2000). GHD 2000 shows the whole of the Land as flood liable. In 2003 the Edmondson Park Structure Plan (2003 Structure Plan) was published by two local councils. Between 2000 and 2003, the experts agreed flood modelling and flood mitigation strategies appear to have changed. The open space and drainage land does not perfectly correlate with the GHD 2000 pre-urbanisation flood model. The 2003 Structure Plan showed the SE corner of the Land as not within the originally planned Cabramatta Creek riparian corridor as extracted below:
The Flood Extents and 100 year ARI’s Flood Contours Existing Conditions map in the Cabramatta Creek Flood Plan Management Study 2004 showed all but the SE corner of the Acquired Land as being below the 100 year flood extent line.
The Concept Zoning Map in Edmondson Park Steering Committee Report for Edmondson Park Master Planning Water Cycle Management: Stormwater, prepared by GHD in March 2006, showed the SE corner was flagged for residential use during precinct planning as shown below:
In February 2007, the Minister for Planning directed the Council to make a series of changes to the EPRA. Relevantly, the changes included use of riparian areas for recreation purposes, reduction in areas of land acquisition, and an overall reduction of s 94 contributions by $7,000 per allotment. This resulted in the Council commissioning the Prince Report 2007, which recommended narrowing of the open space and drainage zone around Cabramatta Creek in some areas compared to the 2003 Structure Plan. Cabramatta Creek was identified as a Category 2 stream (not the Strahler system designation).
The Growth Centres Development Code 2006 (GCDC 2006) provided for a core riparian zone of 20m from top of bank, and a further 10m vegetated buffer. The objectives of the GCDC 2006 for Category 2 streams were to provide basic habitat and preserve or emulate a functioning watercourse as much as possible.
The report by Storm Consulting Pty Ltd, Modification of Creeks in Edmondson Park Review of Environmental Factors 2014 (Storm Report 2014), mapped flood risk precincts:
The Averaging Rule
Non-riparian corridor works and activities can be authorised within the outer riparian corridor, so long as the average width of the vegetated riparian zone can be achieved over the length of the watercourse within the development site. That is, where appropriate 50% of the outer vegetated riparian zone width may be used for non-riparian uses including asset protection zones, recreational areas, roads, development lots and infrastructure. However, an equivalent area connected to the riparian corridor must be offset on the site (see Figure 3) and the inner 50% of the vegetated riparian zone must be fully protected and vegetated with native endemic riparian plant species.
Bridges, cycleways, paths, stormwater outlets and other essential services do not need to be offset but must comply with the requirements set out in the riparian corridor matrix (Table 2) and other relevant departmental controlled activities guidelines. Offline detention basins do not need to be offset so long as there is an equivalent VRZ for the corresponding watercourse and they are built in compliance with the department’s Guidelines for watercourse crossings and Guidelines for instream works. If a proposed basin will not have an equivalent VRZ for the corresponding watercourse, it may still be built in the outer 50% of the VRZ but must be offset.
Mr Haskew considered that the riparian zone would be 40m wide in total, and that a required 10m minimum buffer could be incorporated into residential land for use as backyard or roads.
Mr Haskew’s position, informed by Mr Gray’s flood modelling, was that the Land would have underlying zoning of R1 in the NE and SE corners. Dr Martens stated from 2006 the riparian zone would have been required to be 20m with a ‘vegetated buffer’ of 10m, being 60m in total.
Mr Haskew considered that the applicable strategic planning documents allowed for a narrower riparian corridor than Dr Martens and Mr Chambers proposed and that riparian averaging would be permitted. Mr Haskew assumed that the riparian corridor would be 48.5m in total, allowing 8.5m for creek width and 20m on either side of the bank ‘including’ a 10m vegetated buffer zone (prior to riparian averaging) as seen below:
By applying riparian averaging in the joint report Mr Haskew identified a 6m riparian corridor on the eastern bank of Cabramatta Creek and widened the western bank riparian corridor by 15m, resulting in an area of 1,591m² in the NE corner and an area of 4,106.4m² in the SE corner. This allowed an acceptable lot depth of 26m in the NE corner.
Mr Haskew stated Mr Chambers’ and Dr Martens’ evidence was too narrowly focused on the area immediately surrounding the Land, zoning of which had been affected by the public purpose. At the strategic planning stage a broader approach was required looking at a larger area of land.
Mr Chambers adopted the riparian corridor modelled by Dr Martens who concluded a 40m riparian corridor applied to Cabramatta Creek and a 30m riparian corridor to West Cabramatta Creek, with an additional 15m channel width for Cabramatta Creek. The proposed riparian corridor is illustrated below:
Mr Chambers considered there would be no developable area in the NE corner of the Land available due to flood liability. The width of the riparian corridor proposed by Mr Haskew was inconsistent with the DCP 2008. The 2003 Structure Plan showed, assuming a creek width in this section of Cabramatta Creek of 15m, the top of the eastern bank between approximately 27.5m to 35.5m from the eastern boundary. There was a need for a 20m wide core riparian corridor plus a 10m wide buffer. There was no scope for the R1 General Residential zoned land in the NE part of the Land.
The corridor proposed by Dr Martens and Mr Chambers was shown by Dr Martens to align consistently with the existing riparian buffer width south and west of the Land:
Mr Chambers stated in cross-examination that “Mr Haskew's description of events requires one to accept that strategic planners would seek to undo an environmental protection regime that was already in place on part of Cabramatta Creek, which is adjacent to the confluence with West Cabramatta Creek and immediately south of Camden Valley Way, and adjust that to create more development potential for land zoned R1 by eroding what I think is the riparian corridor”.
The experts disagreed about whether strategic planning required measurement of the riparian corridor from top of bank or the hydroline.
Mr Haskew stated that measuring from the hydroline was acceptable because he considered that was standard practice for strategic planning in growth centres. Hydrolines appear in the New South Wales spatial planning portal. Mr Haskew’s approach to averaging depended on Mr Gray’s hydrological evidence, which used Cabramatta Creek’s hydroline rather than top of bank as a basis for assessment.
In cross-examination Mr Chambers stated that while generally measurement is done from the hydroline for strategic planning purposes, in this case there were a number of planning documents which measured from top of bank. The best information available includes the LLEP 1997, existing flood studies and the Prince Report 2007.
Mr Haskew used riparian corridor averaging around Cabramatta Creek to achieve an acceptable lot depth (26m) between Drinkwater Lane and the Cabramatta Creek riparian zone. He considered riparian averaging was an available tool for strategic planners when LLEP 2008 was being prepared. Mr Haskew was cross-examined on his application of the averaging rule. Averaging was not prevented simply because the GCDC 2006 did not refer to it. Averaging had been applied throughout many growth centres. Mr Haskew considered averaging was supported as the land on the eastern side of Cabramatta Creek was contiguous to R1 zoned land and was developable, notwithstanding parts of it had been historically flood liable. To the west the C2 zoned land was constrained by the transmission line easement. Those land use constraints and interactions supported averaging, so that the land on the west is doubly constrained and the land on the east is minimally constrained. While not reflected in the GCDC 2006, it was used in growth centres.
Mr Haskew treated the Prince Report 2007 with caution as he considered it was infected by the public purpose.
Mr Chambers adopted the views of Dr Martens. Dr Martens did not agree with Mr Haskew. He was cross-examined on the DCP 2008, in particular Pts 2.5-2.6 which provided controls for riparian zones (see above in [97]). Dr Martens accepted that the word ‘average’ was an indication that the DCP 2008 did not require the 20m to be maintained throughout the entirety of the corridor. He accepted the corridor could be wider on one side and narrower on the other provided it achieved that average, within the context of the site.
Dr Martens when taken to the section of the 2008 Riparian Guidelines titled ‘The Averaging Rule’ stated that the ‘averaging rule’ can be used in some circumstances and where appropriate. The ‘averaging rule’ cannot always be used and is a site-specific allowance where consent is granted under the WM Act. While the 2008 Riparian Guidelines and DCP 2008 allow developers to consider using the ‘averaging rule’, Dr Martens’ experience for the last twelve years is that approving officers under the WM Act, a different level of approval to a development consent, very strongly adhere to the guidelines without recourse to the averaging rule.
The NE corner (1,591m2) would be assumed to be zoned R1 by a prudent hypothetical purchaser. The proper approach to the underlying zoning of the NE corner of the Land is to look at the land as it was when the strategic planning decisions were being taken in respect of the Edmondson Park growth area. Mr Haskew treats this as beginning in 2003. The land was then part of larger Lot 1 in DP774700. That lot like its neighbours was being planned for urban release and development, subject to it being capable of being rendered flood free and providing for the necessary protection of Cabramatta Creek and its tributaries. Issues such as the narrowness of the developable area within the Land, which have distracted the Respondent and its experts, do not arise at the strategic planning stage.
Relevant planning instruments were the LLEP 2006 Amendment 83 which established the current zoning, followed in LLEP 2008. The DCP 2008 contained operative requirements for riparian corridors in Cabramatta Creek and Cabramatta Creek West as an average 20m wide core riparian corridor on either side of these measured from top of bank. An additional 10m extends from the core riparian corridor. The GCDC 2006 provided for a core riparian zone of 20m from top of bank and a further 10m vegetated buffer (no reference to averaging).
The concept of averaging is identified in the DCP 2008 dealing with riparian corridors (average 20m). The control operates to permit riparian protection to be provided asymmetrically. Up to 50% of the indicated width of corridor on one side of the waterway is transferred to the opposite bank, so long as the average is maintained across the length of the waterway within the relevant parcel, according to Mr Haskew’s written evidence.
A strategic planner, unaffected by the public purpose, considering the relevant land at the time of preparing Amendment 83 would have had regard to each of those factors. The land in the NE corner was cleared, level, already improved with a large shed, immediately adjacent to R1 zoned land to its east and either low flood risk or capable of being rendered flood free. No ecological factor demanded full corridor width on the eastern bank. The land to the west of the creek was doubly constrained and all high flood risk. It was not contiguous with any developable land. Overwhelmingly the most likely outcome is that mapped by Mr Haskew at Part 5.4 of his Planning Expert Report. R1 zoning would have continued to the limit of the necessary minimum riparian corridor, namely 10m from top of bank. After subsequent joint conferencing the experts accepted that area measures 1,591m2.
Mr Chambers impermissibly considered the area in isolation describing it as too narrow at 10 to 12m of land. A strategic planner in 2006 would have considered the land in the state it was in then.
One issue to determine in analysing Mr Haskew’s scheme is the extent to which the hypothetical purchaser would have considered the NE corner had a low risk of flooding. As the Council has emphasised and is agreed, no land subject to medium or high risk flooding in the Edmondson Park growth area was identified as suitable for residential zoning in the vicinity under the relevant planning instruments in 2006-2008. Such a purchaser would consider it unlikely that the land would be zoned R1 absent the public purpose if subject to medium and high risk of flooding.
Numerous flood studies were prepared to inform the Council’s planning to achieve the public purpose in the Edmondson Park area. The flood constraints on the Land were longstanding. The Land as shown in the pre-urbanisation flood liability studies was flood prone for the whole of the NE corner. The Council referred to a number of other studies prepared in the lead up to Amendment 83 which showed the whole of the NW corner as flood affected. The Prince Report and Storm Report 2014 were in evidence in addition to the earlier Bewsher Report 2004. Mr Haskew’s reason for treating the Prince and Storm Reports with caution was that these arose from the public purpose in his view. Mr Gray did not agree with that view. The Storm Report 2014 flood model map (Fig 24) was not affected by upstream or downstream public works. Basin 12 in particular, was unaffected according to Mr Gray when he was asked about this in cross-examination. In any event in submissions the Applicant relied heavily on the Storm Report 2014, which showed a smaller area than that sought by the Applicant as subject to low level flooding in the NE corner. The parties agreed that while prepared in 2014 it showed the situation in 2008. It is fair to say that the mapping in evidence is not consistent about the risk of flooding in the NE corner in that some maps identify it as wholly flood affected and some identify a smaller area than contended for by Mr Haskew and Mr Gray as being low flood risk. A hypothetical purchaser could not be certain in these circumstances of how the Council would have considered rezoning the NE corner for residential purposes.
An additional issue which the prudent hypothetical purchaser would have to consider is the likely requirement for riparian corridor width along Cabramatta Creek. In addition Mr Haskew’s scheme can only be achieved if the Council permits ‘averaging’ of that assumed width across the Land in the manner contended for by him. Mr Haskew submitted that a riparian zone of 10m in the NE corner from top of bank would be permitted.
I will first consider what width of riparian corridor would likely be required in the strategic planning process in 2006-2008. This requires consideration of the statutory controls on width and measurement of the riparian zone on the Land and the assumed width of Cabramatta Creek.
The underlying zoning in Amendment 83 continued in the LLEP 2008. The DCP 2008 set out operative requirements for riparian corridors as an average 20m wide core riparian corridor on either side measured from top of bank. A 10m inner protection zone extended from the core corridor. Also relevant was the GCDC 2006 which provided for a core riparian zone of 20m from top of bank, and a further vegetated buffer of 10m. That Code makes no reference to averaging. As Dr Martens identified the riparian corridor represented diagrammatically in the GCDC was 30m as it incorporated both zones. These instruments all referred to measurement from the top of bank.
Mr Haskew measured from the hydroline which he stated was commonly used for strategic planning purposes in growth corridors in the relevant period. Mr Gray did not apply any specific measurement point for the riparian corridor in undertaking his flood modelling of Mr Haskew’s scheme. No criticism of Mr Gray is intended. I am simply observing that his evidence was not directed to identifying the likely width of a riparian corridor in this location.
Mr Chambers agreed that for strategic planning purposes the hydroline was used unless, as here, there were more detailed instruments available, which in this case used top of bank. Given that the DCP 2008 and GCDC 2006 specified the top of bank at the relevant time, a fully informed hypothetical purchaser is likely to assume that would be the control applied by the Council. The assumed riparian corridor would be likely to be wider as a consequence.
In addition to strategic planning considerations the Council submitted through its expert Dr Martens that the WM Act controls were highly relevant to the assessment of development applications, separate to strategic planning processes under the Environmental Planning and Assessment Act 1979 (NSW). The extent to which such controls would be in the mind of the prudent hypothetical developer was unclear in that the approach in 2006-2008 in relation to such controls was not strictly in evidence. Dr Martens referred to his experience in the last 12 years which dates from a few years later.
An additional basis on which the R1 zoned land in the NE corner would be considered available by the hypothetical purchaser in the statutory planning process is if that purchaser would consider the Council would allow averaging of the riparian corridor as proposed by Mr Haskew.
According to the Applicant the question is whether the hypothetical purchaser would consider if the Council would have permitted riparian protection to be provided asymmetrically, with up to 50% of the indicated width of corridor on one side of the waterway being transferred to the opposite bank, provided the average was maintained across the length of the waterway within the relevant parcel as Mr Haskew submitted. Mr Haskew’s scheme allowed for a 10m zone, on the assumption that the balance of the riparian corridor could be applied on the western side of Cabramatta Creek.
That description of averaging is not reflected in the only planning instrument in evidence which uses the word ‘average’. The only planning instrument to refer to ‘average’ in 2008 was the DCP 2008 (accepting that can be relevant if the GCDC 2006 is also considered). That instrument referred to a riparian zone of an average of 20m plus a buffer of 10m. The use of average in that context is not the extent of averaging proposed by Mr Haskew. The GCDC 2006 identified a riparian zone requirement of 30m on each side of a creek, consisting of a 20m core riparian corridor and a further 10m. That it did not refer to averaging does not mean that it could not occur. Equally it was not an approach expressly supported by the GCDC. The averaging rule extracted above at [97] in the 2008 Riparian Guidelines is a general statement which does not support the scheme in quite the terms proposed by Mr Haskew. No statutory provision of averaging as applied by Mr Haskew is in evidence. His opinion evidence was based on his general experience of strategic planning in growth areas. There is no evidence beyond that expression of opinion that such an approach would be considered likely to be applied on the Land.
A decision of a council whether to implement averaging would depend in part on the situation on surrounding land particularly upstream and presumably also downstream. The experts disagreed about how far upstream should be considered. Dr Martens stated in the joint report that given the width of the land immediately upstream as demonstrated on Fig 30 in the joint report at [106] above, the Council would not have permitted the substantial narrowing of the eastern side of Cabramatta Creek in the manner proposed by Mr Haskew. I agree with the Applicant’s criticism of this approach of Dr Martens, as the dimensions shown upstream at Fig 30 reflect public open space area requirements being the public purpose and such dimensions cannot therefore be considered. Mr Haskew stated that land use downstream in the wider growth corridor well beyond this land demonstrated that averaging had occurred in numerous locations in the growth corridor although no examples were provided.
A discrete issue to arise in the Council’s submissions was fundamental criticism of Mr Gray’s flood modelling. Mr Gray described his flood modelling as using the Bewsher 2004 model from which he derived 2D cross-sections and extrapolated between them. Dr Martens used Light Detection and Ranging (LiDAR) survey data to provide an accurate depiction in his view of the watercourse as it existed on the acquisition date. Dr Martens did not undertake flood modelling.
Mr Gray stated his model required no excavation in the creek bed of Cabramatta Creek. His model was challenged in cross-examination on the basis that he did not use LiDAR or the most up to date information available. He agreed he created his model based on a 2011 time slice but considered there would not be significant differences between the information he used and that alternative information.
Dr Martens believed Mr Gray’s model required that excavation would occur to make Cabramatta Creek wider and deeper. He maintained this position under cross-examination. Dr Martens asserted that Mr Gray’s model required excavation of the creek bed, based on differences he considered existed between his depiction of the creek bed using LiDAR data and Mr Gray’s model. He considered there was roughly 0.5-1m difference in the bed level and the banks of the creek compared to LiDAR results.
In cross-examination Mr Gray accepted that an older model would be checked for accuracy by reference to LiDAR. Mr Gray used LiDAR in his 2021 report to the Valuer-General. Mr Gray strongly denied in writing and orally that his model required excavation of Cabramatta Creek.
"GRC's modelling work for the proposed case does not rely on an excavated creek. A widened deep creek has not been arbitrarily created as DM seems to indicate, instead as per the report (page 5 bullet point 3) the Bewsher (2004) 1D representation of in bank creek flow was transferred to a 2D representation via digitisation of cross-sections."
Initially, Dr Martens seemed to accept this proposition and to agree that there was no presumption of excavation in the creek inherent in Mr Gray's work. In the witness box, he had second thoughts and returned to the proposition that such excavation was implied. What he appears in fact to be contending is that the level of flow calculated by Mr Gray's modelling could not be achieved without such excavation. There is no evidence to support that proposition, and indeed such evidence as there is directly contradicts it.
Dr Martens does not present any contrary modelling to suggest that the flow levels calculated by Mr Gray's work are wrong. Rather, he simply compares current ground levels based on a LiDAR survey with the flood model surfaces disclosed by Mr Gray's modelling. By doing that he produces Fig 32. Unsurprisingly, Mr Gray firmly rejects that proposition. It can be assumed that he knows better than Dr Martens what he did or did not assume for the purpose of his model. Mr Gray gives a detailed and entirely convincing explanation of what he in fact did: he took the cross-sectional information provided by Bewsher Report 2004 and used it to generate a three-dimensional model of the creek bed. He made no additional alterations to the data, simply applying the same assumptions regarding creek dimensions as were made by the Bewsher model. The Bewsher model is the Council's own flood model for the area and is the model that would have been adopted by any consent authority. He explains the process at paragraph 7.3.4(b) of the joint report and states that the appearance of differences in creek profile or heights against a LiDAR survey are simply artifacts of the representation of the creek for modelling purposes. They do not imply any actual changes to the creek profile.
Mr Gray undertook a careful check of whether the change from a 1D to a 2D representation of the creek was likely to affect the results. He reports towards the end of Part 4 of his Statement of Evidence that "the impact of the changes was checked via comparison of peak flood levels and a reasonable match was found (deviations of approximately 0.1m)". That is, Mr Gray has taken the peak flood levels calculated in accordance with his 2025 model and compared them to the similar results calculated by the Bewsher Report 2004. They match, with some deviations of approximately 0.1m. In other words, he has made no assumptions of alterations to the creek compared to that which was modelled by Mr Bewsher.
Nowhere does Dr Martens respond to that comparison. When it was put to him in cross-examination that he had not attempted to model flood flows if his assumptions about the natural channel dimensions were correct and Mr Gray's were wrong, he responded "I don't believe that that would have made a significant difference to the outcomes of the model". If that be so, he offers no explanation of why a developer of the acquired land would spend $4,432,470 to achieve no significant effect.
The Council submitted that based on Dr Martens’ criticism of Mr Gray’s modelling, significant discrepancies arise in relation to the shape of the creek in the creek bed level and banks of 0.5-1m essentially questioning the accuracy of Mr Gray’s approach. Despite Mr Gray's assertion that no excavation was intended within the creek line, Dr Martens' analysis demonstrates otherwise.
When sent Mr Gray's model files, Dr Martens discovered a discrepancy between the existing conditions as modelled in Mr Gray's flood model and the LiDAR survey that he reviewed. He prepared a difference plot between the existing conditions that were assumed by Mr Gray and the LiDAR, which showed that the creek appeared to be excavated substantially. The magnitude of 0.5-1m difference in both creek bed and banks is not trivial, it is wholesale excavation. The difference plotted graphically confirms this conclusion. When challenged that he was mistaken, Dr Martens was unequivocal. The difference plot provides visual confirmation of the result: a mismatch of up to 1m in the creek bed and banks, confirming that significant earthworks, absent from Mr Gray's description, are in fact required to implement the scheme.
Those works include the squaring off of Cabramatta Creek. The Court can be comfortably satisfied that Mr Gray's scheme entails material physical intervention to the creek, notwithstanding his denials. That is the natural conclusion given the output of his modelling relies on this squaring off. The flaw lies in Mr Gray's methodology. He derived 2D cross-sections and then ‘extrapolated’ between them, describing the process as ‘‘drawing lines between those cross sections to create a continuous channel". He conceded the cross-sections were, in fact, "variable". When pressed, he accepted that failing to use LiDAR led to him "squaring off the channel" resulting in the criticism identified by Dr Martens. Accordingly, the Court ought to place no weight on the Gray model. Alternatively, the cost of completing the channel works required to achieve the model output would need to be accounted for in the valuation task.
Mr Gray appeared to be a competent witness when giving oral evidence and his expertise was not challenged by the Council. That expertise suggests that he understood his modelling and his explanation for his approach was credible. I do not accept Dr Martens’ criticism of Mr Gray’s modelling for the reasons given by the Applicant. Importantly, Mr Gray applied a flood model based on the Bewsher Report 2004, which is the relevant data set which would have been applied by an expert hydrologist if advice was sought by a hypothetical party in the period 2006-2008, and is what the Council would have used to inform itself about strategic planning matters. Mr Gray checked his work in detail as identified by the Applicant at [149]. I do not consider Mr Gray’s approach was fundamentally undermined by any perceived concessions he appropriately made in cross-examination. Dr Martens did not undertake flood modelling, which would have been a more relevant comparison in my view.
As the Applicant also submitted, the work alleged to be required if the creek had to be excavated would be considered very unlikely to be approved by the hypothetical purchaser. I do not accept that the major excavation works identified as necessary by Dr Martens and costed at $4,432,470 by the quantity surveyors arise in the hypothetical scenario I am considering.
Relevant to the next issue, Mr Gray’s flood model modifying Mr Haskew’s scheme as depicted in Ex 6 Fig 2 extracted above at [84] can be considered as part of the information available to the hypothetical purchaser.
(a) Applicant’s scheme - Mr Haskew/Mr Gray yields 4,106.4m2, (b) Mr Chambers’ straight-line boundary plan yields an area of 2,686m2, (c) Mr Chambers’ alternative curved boundary adds 340m2, an area of 3,026m2.
While the joint planning and hydrological evidence resulted in three possible R1 boundaries of varying areas, the Applicant accepted that if the existing basin could not be disregarded, as I have found, it would not press Mr Chambers’ alternative curved boundary. As this added only 340m2 the cost of removal of the existing basin would not be economic. I do not therefore consider the third scenario above.
The Haskew/Gray scheme identified as suitable for R1 land is depicted in Ex 6 Fig 2 set out above at [84] and Ex 6 Fig 3 overlaid relevant riparian zones measured at 10m, 20m, 30m and 40m from the top of bank on the same figure as Ex 6 Fig 2. As can be seen in Ex 6 Fig 2 Mr Gray proposed an area of perimeter road on the outside of the identified R1 area. This is located in an area where Cabramatta Creek is closest to the proposed R1 land being within the 10m to 20m zone for a limited area. The developable R1 land is all outside the 20m contour line, with most outside the 30m contour line. A relatively small area of developable R1 land is proposed between the 20m and 30m riparian zone.
Mr Haskew’s evidence was that a road had been included in that location due to planning controls permitting such an approach. Both he and Mr Gray considered that the likelihood of flooding in extreme flood events would not prevent a road being located in that position. Dr Martens criticised the placing of a perimeter road in that location as it remained flood liable being subject to the 1% Annual Exceedance Probability (AEP) event. He considered the Council was unlikely to approve a public road which was flood liable.
The parties made broadly similar opposing submissions based on the mapping of flood prone areas and relevant development instruments and controls set out above at [119]-[124] as were made for the NE corner as to whether a hypothetical purchaser would assume the proposed scheme would be likely to be approved. Based on Dr Martens’ evidence the Council also submitted that no road could be considered in that location given that it was flood liable. In addition the Council submitted that if the area including the proposed perimeter road is accepted, an area of 1,858.4m2 which is a reasonably large part of the area of 4106.4m2 identified as potential R1 land, this should be valued at a lesser rate.
The focus of my consideration is what the hypothetical purchaser, a developer in particular, would consider the likely approach of the Council planners to strategic planning for urban release areas in the EPRA in 2006-2008. While broadly similar issues which arose in relation to the NE corner apply to the determination of the area of R1 land assumed in the SE corner, a different outcome arises due to the location of the proposed developable area at a markedly further distance away from Cabramatta Creek compared to the NE corner. At issue is whether the prudent purchaser would consider the Council would approve residential development beyond Mr Chambers’ straight-line boundary to the extent modelled by Mr Gray in this location.
The various strategic planning instruments and development controls, and reports prepared in relation to the management of stormwater such as the Storm Report, set out above at [87]-[98] were identified and considered in the context of Issue 3. These flood modelling reports more consistently show that an area in the SE corner is subject to low flood risk only, and these informed Mr Chambers’ conclusion for the straight-line boundary he applied. Such reports are necessarily general in nature and Mr Gray’s modelling demonstrates what development possibilities a hypothetical purchaser who is a developer could be informed about.
Concerning measurement of the riparian zone width having considered the conflicting evidence of the planners and hydrologists I concluded above at [132] that the top of bank rather than the hydroline was most likely to be the control applied by the Council. Exhibit 6 Fig 3 identifies the riparian zones at various intervals measured from the top of bank enabling consideration of the proposed scheme in accordance with that measurement.
The riparian corridor control in the GCDC 2006 was 30m on each side of the creek being a 20m core riparian corridor with strict controls and another 10m with less strict controls at [130] above. The DCP 2008 identified an average of 20m wide core riparian corridor on both sides measured from top of bank with an additional buffer. These controls can be largely met with the scheme proposed, apart from the location of the perimeter road.
I considered Mr Haskew’s proposal for ‘averaging’ of the riparian corridor in relation to the NE corner at [135]-[140]. I did not need to finally conclude whether averaging would be considered feasible by the hypothetical purchaser due to other considerations. The proposed R1 area for the SE corner is less dependent on averaging being assumed to be possible by the hypothetical purchaser. As depicted in Ex 6 Fig 2 and Fig 3, most of the developable area of R1 land is beyond the 30m riparian zone and more likely to be considered acceptable in a strategic planning context by a Council planner in my view. The area of the SE corner in contention is generally at some distance from Cabramatta Creek when compared with the NE corner land. The boundary of R1 land proposed touches the 10m contour line measured from top of bank but does not intrude into it, unlike the NE corner land. Mr Gray proposes a perimeter road on the outside of the identified area so that the developable R1 land is outside the 20m contour line, with the great majority taking place outside the 30m contour line.
The quantity surveyors relied on by the parties prepared a joint report about the cost of civil works necessary to give effect to various scenarios. The schedule ‘Cost of flood mitigation works to enable highest and best use of land’ provides the cost estimates based on both the proposed schemes (absent the public purpose) of Mr Gray and Dr Martens.
The parties identified that the cost estimates for civil works were assessed as at March 2025 and not as at the date of acquisition. The parties have agreed to de-escalate these cost estimates based on the movement in the Rawlinsons Cost Index between 31 March 2025 and 30 September 2022. The agreed de-escalation percentage is 12.4%. The de-escalated costs estimates are set out in the summary table below:
| Item | Costs | De-escalated Costs by 12.4% | | Flood Mitigation Works – GRC Hydro | $485,600 | $425,386 | | Flood Mitigation Works – Martens | $541,800 | $474,617 | | Decommissioning and Filling Detention Basin - Martens | $755,400 | $661,730 | | Constructing Detention Basin – Martens | $1,092,200 | $956,767 | | Flood Mitigation Riparian Zone – GRC Hydro | $545,900 | $478,208 | | Flood Mitigation Riparian Zone – Martens | $4,432,470 | $3,873,208 |
An issue arose during the course of evidence which neither party had anticipated in opening. Mr Lunney identified that because part of the area labelled “compensatory cut area” in Mr Gray’s amended indicative layout plan (Ex 6 Fig 2) includes Lot 13 (the NW corner lot which has a residential zoning), the Applicant could not claim both compensation on the basis of the highest and best use of the eastern portion of the acquired land, and an implied value for that part of the retained land for residential development.
As a result the Court must resolve to the extent it can, given the preliminary nature of the hypothetical scheme before it: Would the minor works necessary to render the residential zoned land flood free imply cut being taken from the area of Lot 13? The Applicant through Mr Gray submitted the minor works were malleable and taking 346m² of fill from Lot 13 could be avoided. The Council relying on Dr Martens submitted that fill from Lot 13 would be needed.
I have held that the area identified by the Applicant in the SE corner and area of 4,106m² can be considered developable as residential land. I have not held that 1,591m² of land in the NE corner can be considered so developable. The assumed area of cut and fill necessary to render the land in the SE corner flood free is therefore a reduction of what Mr Gray modelled.
Note:
Dr Martens has calculated the area labelled by Mr Gray as “Compensatory Cut and Fill Area” in the above diagram.
Mr Gray says the following in respect of the diagram:
I agree with the numbers provided (checked approximately via independent GIS work).
However as per my evidence the exact configuration of compensatory cut area, and location, are flexible.
Also, should the proposed development area on eastern side of Cabramatta Creek change from what I provided modelling evidence on in my September 2024 expert report, it is noteworthy that:
- less cut volume overall may be required as cut volume provided was targeted to offset fill volume on eastern side of Cabramatta Creek
- also presuming north-east fill area was removed from “scheme”, then this area (north-east) could provide cut and it being adjacent to fill required for southern area, there may be relative benefit to this.
The compensatory cut area also encroached on the riparian corridor as averaged by Mr Haskew, as he agreed in cross-examination. Mr Haskew identified that the 2008 Riparian Guidelines said that detention basins are permitted within 50% of the vegetated riparian zone in all classes of watercourses. He considered there was no conflict between the riparian corridor and the compensatory cut and fill and the riparian zone did not need to be avoided.
In cross-examination Mr Gray stated:
What I've modelled, essentially, is a conceptual layout. So, at the moment, as per figure 31, we have the riparian overlapping that compensatory cut area. However, it's malleable, … it could be modified, so it could go deeper and then be more constrained in area and still achieve the 2,451 cubic metres to offset the fill.
Mr Gray stated that the malleability he described would enable a developer to avoid issues such as any need to cut into a riparian corridor on Lot 13. He stated there was real flexibility provided the cut is equivalent to the fill placed and subject to testing in a hydraulic model to achieve no off-site impact. He was satisfied the amount of cut required was acceptable. Mr Gray stated there would be 2,451m3 of fill, which is an average depth of 0.4m over an area of 6,500m2.
Dr Martens agreed in cross-examination that there are many examples of cut and fill in flood prone areas. Dr Martens stated he had considered where the water table is likely to be in this location. When he inspected the Land in the NW corner of the Parent Parcel the ground was boggy underfoot and there was evidence of seepage from the NW corner towards the drainage line. He stated generally it is not uncommon that groundwater in the local area surrounding a watercourse is a source of water to the watercourse base flow. The risk of doing excavation, certainly of a large scale as proposed under the hypothetical scheme by the Applicant, is that it would interfere with the groundwater table and trigger the aquifer interference policy. That would constrain the type of earthworks the relevant department would approve. In his experience, they would not approve any works likely to interact with the long term highest groundwater table without a significant justification that approval would be a reasonable thing to do in terms of the ecology and hydrology of Cabramatta Creek. Dr Martens did not expressly refer to a depth of cut of 0.4m.
Mr Gray stated he had not addressed the water table. He stated he did not tend to see a lot of water table interaction in such environments and did not see that as a constriction. He was not familiar with the aquifer interference policy.
The Applicant submitted that the area labelled was indicative only. It does not dictate the precise area in which any fill must occur. As Mr Gray stated in oral evidence, what matters is the quantity: the amount of cut must equal the amount of fill. The plan is "malleable". That is doubly the case if, contrary to the Applicant's primary position, no developable area is identified in the NE corner of the site. Not only does that reduce the amount of fill required and therefore the amount of compensatory cut, the NE area becomes available for compensatory cut. It follows that in no circumstance does the realisation of the hypothetical development of the SE corner involve sacrificing Lot 13. That is the opinion expressed by Mr Gray in the notes to the latest joint planner's report.
The Council submitted that, according to Dr Martens, Mr Gray’s scheme was unworkable as it would interfere with Lot 13 or impermissibly with the water table.
The total amount of cut in the NW corner identified by Mr Gray in a conceptual exercise in Ex 6 Fig 2 is 5,560m2. The amount of cut identified as possibly required on Lot 13 is 346m2 with the majority of fill coming from Lot 12 of 5,025m2. Reduction in the fill identified in Ex 6 Fig 2 arises as a result of my conclusion on Issue 3 in relation to the NE corner that 1,591m2 is not developable as residential land.
Mr Gray’s conclusions reflect at a level of generality matters relevant to the consideration of the prudent hypothetical purchaser. While Dr Martens’ opinion that there is a possibility of interference with the water table in the NW corner depending on the depth of cut required, ultimately the Council did not dispute that cut of an average depth of 0.4m across the whole area identified by Mr Gray would not be likely to interfere with the water table.
The nature of this opinion evidence must be considered in light of the assumed detail in the mind of the hypothetical parties. Such a purchaser would not assume cut from Lot 13 would be necessary in order to develop the SE corner. To the extent there is an issue about cut and fill in the riparian corridor (189m2) that concern is not likely to arise for the hypothetical purchaser given the reduced level of fill required.
I have found that 4,106m2 of land in the SE corner can be considered developable R1 land in the mind of the hypothetical purchaser subject to what I have said about the area of perimeter road identified. Part of that area is presently occupied by the existing detention basin which I have found cannot be disregarded in Issue 2. The cost of filling in the existing basin has been identified by the quantity surveyors as $661,730. A hypothetical developer would incur that cost if by doing so residential zoned land of an equal or higher value was released for development.
The parties posed the two questions above. Question 1 states would a replacement basin be required to be built by a developer? Unfortunately it became apparent when preparing this judgment that the parties’ submissions on this question were unclear in the overall hypothetical context I am considering. The Applicant’s case as I understand it through its planner Mr Haskew is that the provision of drainage would have been a Council responsibility as part of the overall strategic planning for the development of the area and consequently no such responsibility would fall on the developer. I have not accepted the ‘disregard’ argument of the Applicant in Issue 2 in relation to the existing basin to which I understood Mr Haskew’s evidence on this matter was directed. As I understood the Applicant’s case presented orally the view of Mr Haskew that the developer would not have to shoulder such a responsibility because the Council was responsible for drainage was also to apply in relation to Issue 6A Q1. I am not sure whether that submission can be made given my finding on Issue 2, and it is unclear how an answer to Q1 affects the civil works that must be assumed in the hypothetical scenario I must consider. The Council’s position on these submissions was unclear which is not a criticism as I do not consider this issue was adequately ventilated at the hearing.
Issue 6A Q2 was squarely addressed. The feasibility of creating a new detention basin in the NW corner of the Residue Land was in dispute. The Applicant submitted that if a consequence of decommissioning and filling the existing basin was that the hypothetical purchaser was obliged to construct a replacement basin of similar capacity, that could be achieved on part of the Land to the west of Cabramatta Creek in the area of the transmission line easement in the NW corner.
The Council submitted the existing basin must be assumed to remain. The hypothetical purchaser would not be able to assume that the existing basin could be moved to the western side of Cabramatta Creek. If the basin cannot be moved then the area of 340m2 within the 4,106.4m2 occupied by the existing basin must be valued as constrained land.
Mr Gray prepared a hydrological model which purported to show that the basin could be moved to the NW corner. His model was based on flood modelling in the Bewsher Report 2004. In cross-examination Mr Gray confirmed that the NW corner could be an acceptable location for flood storage. Although moving the detention basin resulted in untreated water entering Cabramatta Creek from the eastern side of the Creek including from the eastern tributary, water could be doubly treated at another place to offset the non-treatment of water flowing from the east. As a net outcome the water quality draining off-site would be the same due to treatment of flow contributions from other areas.
I think it could be acceptable, depending on where they wanted the - where their target location was. So I think you could make the argument that they're very close to each other, and if we're talking about what we get as a nett outcome in Cabramatta Creek, that that could be acceptable.
Dr Martens disagreed with Mr Gray about the possibility of compensatory water treatment elsewhere being approved. In his experience a development upslope of a point of discharge must treat its water to the requisite standard at the point of discharge either set by the development control planner or in engineering controls. The water flows from the 17ha in the east of the Land would need to be treated. Relying on extra treatment of the western sourced water is not consistent with such an approach.
Dr Martens also considered that if this approach to treatment of the western flow of water was taken a larger structure would be necessary to treat water. Dr Martens stated that although the existing basin was sufficient to service the development for which it was approved and is currently receiving run-off for the 17ha area identified, it is a small basin and is not an effective detention basin for the 17ha catchment
Dr Martens did not consider Mr Gray’s solution achievable because it required compensatory cut and fill in the NW corner, as well as construction of a basin. The cut and fill would be so deep as to potentially impact the water table, triggering the aquifer interference policy (more relevant to Issue 6). Further the uses are mutually exclusive:
The basin is an engineered structure that's lined, whereas the compensatory cut is changing the land form. And then, once that land form is changed the land form needs to then, in the coming years, establish vegetation and become part of whatever the zoning is and form part of its function as it did previously. Whereas the basin is an isolated engineering structure. It doesn't interfere with groundwater conditions. It's a very different, different system…
It can't be a basin. The compensatory cut has to be connected to the floodway so that it can fill with water during a flood and then it can drain afterwards. That's what compensatory cut is. Creating a basin is a separate engineering structure that requires an inlet and an outlet, and if that basin, for example, accumulates litter or is lined, it's filled with water and it doesn't perform the active task of flood storage or compensatory flood storage.
A further problem according to Dr Martens was that water quality criteria which applied for sizing stormwater treatment structures go very close to the maximum amount of treatment that a structure can produce. For example, if a basin is required to be a 1,000m2 to achieve the required standard to make the device twice as effective, an increase of the area of that device from 1,000 by a factor of five or six is required. It is not as simple as exchanging 1,000m2 on one side of the creek with another 1,000m2 on the other side. A treatment device’s performance is like an exponential decay curve. Initially treatment can be at a high rate, and once a certain size is reached the effectiveness starts to reduce. Consequently, the size of a structure needs to increase exponentially to cause further reduction in the water quality. That applies particularly to nitrogen, which is extremely difficult to remove. In addition, there is a range of other pollutants that the consent authority would be very concerned about, such as oils and gross pollutants.
A further question was put to Mr Gray that if a very large structure on the western side is needed to achieve the necessary water quality outcome does excavation on the north-western side potentially interfere with the water table. Mr Gray did not consider the basin necessarily required a depth that might lead to that issue beyond the proposed 1m depth. When asked if the 1m depth proposed as compensatory cut is sufficient to be a replacement for the basin that is on the acquired land, Mr Gray stated that he had not gone into that level of detail. Consequently he did not know.
Mr Gray stated that he simply modelled a basin. The basin could have a pipe outlet, for example. He did not model a basin with a land connection for drainage to its invert. In response, Dr Martens stated that the proposed NW basin could not work as it has to be able to drain. If there are successive flood events it has not been demonstrated that it can perform that necessary function. There may be an inherent problem with the design of the basin that could not be dealt with as an element of further design. Rather the model hasn't demonstrated its intent. Digging a hole in a floodplain is not the same as reducing the floodplain levels so that they can interact with flood flows. Mr Gray maintained that the drainage of the basin after a flood event is a detail that would be added as a conceptual design moved towards implementation. Mr Gray’s model as intended was that in a flood event the compensatory cut, whatever its form, has to absorb a certain amount of water which would otherwise swell under Camden Valley Way and hold that water back until a later time. This can be done in various ways, including by a basin that is later capable of being drained. Dr Martens maintained that further modelling needed to include additional earthworks to connect the basin to the creek channel to enable it to drain if that was required by the conceptual model.
As I have already noted above, the evidence collected in pursuit of this appeal is likely to be far more detailed than the assumed hypothetical parties would have obtained. Nevertheless when a conceptual scheme is proposed such as the possibility of a new detention basin in the NW there must be sufficient detail to warrant a finding that the hypothetical purchaser would consider such as scheme feasible. Mr Gray has prepared a conceptual hydrological model for locating a detention basin in the NW corner with an assumed depth of 1m. Dr Martens has identified a number of potential uncertainties with the placement of the basin, its necessary depth and area in order to render it effective which are fundamental to its design and implementation. The extensive oral expert evidence is summarised above at [194]-[201] and I agree with the Council that Dr Martens' evidence exposes a potentially fundamental flaw in not treating the water from the eastern tributary. Dr Martens identified a further critical deficiency. Stormwater devices operate on an exponential decay curve so that their performance flattens as size increases. Therefore compensating for the omitted eastern basin would not require a simple doubling, but potentially a five to six-fold increase in the western basin's area. This deficiency assumes particular significance given Mr Gray’s scheme's reliance on the NW Residue Land for compensatory cut and fill to achieve the proposed development yield on the Acquired Land.
In addition the proposed scheme does not treat water from the 17ha of developed land on the eastern side of Cabramatta Creek including the eastern tributary at all. Whether adequate treatment of other flows on the western side of Cabramatta Creek and West Cabramatta Creek can compensate for water quality to the necessary extent is also not able to be determined given the level of generality of the modelling evidence. While Mr Gray thought that such a scheme could be approved by the relevant regulator there is no evidence to support that view. Dr Marten’s evidence of the unlikelihood of such a scheme being approved is accepted.
On this topic Mr Gray’s conceptual proposal does not allow for sufficient certainty that the issues identified by Dr Martens are not impediments to the achievement of a basin in the NW corner. I conclude that a prudent hypothetical purchaser being a developer would not assume that a detention basin on the NW corner would be practically achievable and able to be approved by the relevant regulator.
The key features of the Okinawa Sale as described by the valuers are:
area of 8,327m2 (to be developed in three stages: stage 1 - 2,246m2; stages 2 and 3 - 6,081m2,
zoned R1 under the LLEP 2008,
a regular shape,
reasonably level contour,
has an on-site detention basin,
sold with residential subdivision development approval in three stages,
located in close proximity to the Land,
the date of sale was 15 September 2023 (10 months after the acquisition date), and
the sale price was $5,500,000 (ex GST).
The main issue between the valuers in the treatment of the Okinawa Sale was the extent of discount in the minds of bidders, as subdivision development for stages 2 and 3 could not commence immediately at the sale date. Both Mr Lunney and Mr Carrapetta made further enquiries after their initial reports to inform the assumed timing of development.
Mr Lunney emailed the relevant officer of the Council and was informed the Council had been endeavouring to build the detention basin (known as basin 14) necessary for stages 2 and 3 since at least 2020. He was advised there were unforeseen delays associated with the construction of basin 14 including delays with the land acquisition process and funding constraints given cost escalation associated with construction delay. Members of the Council’s engineering or town planning team would occasionally provide advice in response to queries raised by landowners and developers as to the Council’s anticipated timing for the completion of basin 14. The Council officer reviewed relevant files and stated the following advice had been provided in relation to the timing for construction of basin 14:
In mid-2022 an enquirer was advised the land acquisition process was nearly complete and basin 14 was anticipated for completion in 2023 or 2024.
In October 2023 an enquirer was advised the land acquisition was nearing completion and that, weather permitting, basin 14 should be constructed by June 2026.
The results of Mr Lunney's enquiries resulted in his conclusions that:
the development of the Okinawa Sale land is dependent upon the Council installing basin 14, estimated at the date of sale in September 2023 to take in the order of three years to be completed by June 2026 as stated by a Council officer, and
the development of the adjoining land owned by a neighbour was first reliant on the installation of basin 14 by the Council and second the neighbour constructing the roads which would be connected to the roads in stages 2 and 3 of the Okinawa Sale land.
| Description | Mr Carrapetta | Mr Lunney | | Unadjusted land value rate (prior to adjustments) | $661/m2 | $661/m2 | | Benefit of development consent | -10% | -10% | | Staging delay of development | +23.5% | +10% | | Development cost penalty (earthworks, etc) | +19% | +19% (adopted Mr Carrapetta’s %) | | Section 7.11 contribution deduction | 0% | +$6/m2 | | Total adjustment | +32.5% | +19% | | Land value rate adjusted for direct comparison | $875/m2 (when rounded) | $794/m2 (when rounded) adopt $800/m2 |
The biggest change in adjustment from the original valuers’ reports was Mr Carrapetta’s change from 5% for staging delay of development to 23.5% based on further inquiries made.
After considerable discussion at the hearing it became apparent that both parties relied primarily on the likely advice the Council officers would have provided to the hypothetical purchaser at the date of acquisition regarding the timeframe for the provision of basin 14. This was the information identified by Mr Lunney, and also central to Mr Carrapetta’s analysis according to the Applicant’s counsel. Considerable Court time was spent analysing emails between the neighbouring landowner and the Council, provided to Mr Carrapetta, and emails from the neighbouring owner to Mr Carrapetta about future development intentions (Exh 4). It became unnecessary to further consider these once the Applicant’s primary reliance on the Council’s likely advice was clarified. An allowance of two years by Mr Lunney is insufficient given the likely Council advice to the hypothetical bidder in September 2023.
The appropriate adjustment for delay should be three years nine months based on the likely advice of the Council’s officers to enquiries about basin 14. This would allow some additional time for the neighbour to construct the interconnecting roads on his adjoining land which support development of stages 2 and 3 on the Okinawa land.
A s 7.11 contribution adjustment of $6/m2 was made by Mr Lunney. Mr Carrapetta made no such adjustment on the basis that englobo sales are not transacted on that basis, which opinion I accept. No adjustment for s 7.11 contributions will be made.
I note that stage 1 of the Okinawa Sale could proceed, with an agreed value of $1,481 million. The Court has adopted the following calculation using Mr Carrapetta’s area of Stages 2 and 3 of the Okinawa Sale land and his adopted 8% interest rate:
area of stages 2 and 3 of the Okinawa Sale property = 6,081m2,
adopted, unadjusted, analysed, overall land value rate of the Okinawa Sale property = $661/m2,
area of 6,081m2 x land value rate of $661/m2 = $4,091,541,
the adopted period of delay is three years nine months or 3.75 years,
the interest rate adopted by Mr Carrapetta for the period of the delay is a rate of 8% per annum as this appears reasonable,
$4,091,541 at 8% per annum interest rate is an amount of $321,563 per annum,
$321,563 per annum x 3.75 years = $1,205,861 total interest.
The additional amount a hypothetical purchaser (as opined by Mr Carrapetta) would pay for the Okinawa Sale property over and above the sale price if the property was ready to be developed from the date of purchase is $1,205,861. The original purchase price of $5,500,000 added to $1,205,861 equals $6,705,861. The additional amount of $1,205,861 divided by the hypothetical purchase price of $6,705,361 equals 17.98% (rounded to 18%).
| Description | Court Adjustments | | Unadjusted land value rate (prior to adjustments) | $661/m² | | Benefit of development consent | -10% (agreed) | | Staging delay of development | +18% | | Development cost penalty (earthworks, etc) | +19% (agreed) | | Section 7.11 contribution deduction | 0% | | Total adjustment | +27% | | Land value rate adjusted for direct comparison | $839/m² (rounded to $840) |
The valuers disagreed about the appropriate rate for the constrained land with Mr Carrapetta allowing a rate of $95/m2 and Mr Lunney $50/m2.
The original schedule of comparable sales is set out in the table below.
| Applicant’s constrained sales (Carrapetta) | | No. | Address | Zoning | Sale Date | Sale Price Ex GST | Area in m2 | Unadjusted Rate/m2 | Adjusted Rate/m2 | | 4 | 610 Fifteen Ave, Austral | C2, RU6 & SP2 Drainage | 22 Dec 2022 | 2,200,000 | 20,120 | 109 | 96 | | 5 | 145 Ninth Ave, Austral | RE1 & SP 2 Drainage | 13 Jul 2022 | 1,600,000 | 24,300 | 66 | 83 | | 6 | 335 Thirteenth Ave, Austral | C2 & SP2 Drainage | 21 Jul 2022 | 1,120,000 | 20,200 | 55 | 88 | | 7 | 37 Lyons Rd, Prestons | C2 | 11 May 2022 | 875,000 | 10,100 | 87 | 95 | | 8 | 225 Jardine Drive, Edmondson Park | E2 | 2011 | 2,346,420 | 20,752 | 113 | 135 for developable 80 for non-developable |
| Council’s constrained sales (Lunney) | | 5 | 335 Thirteenth Ave, Austral | SP2 Local Drainage & E2 | 21 Jul 2021 | 1,120,000 | 20,230 | 55 | Not adjusted | | 6 | 145 Ninth Ave, Austral | RE1 & SP2 Local Drainage | 13 Jul 2021 | 1,600,000 | 24,300 | 66 | Not adjusted |
An additional sale considered was the sale of the Residue Land at 2-4 Rynan Avenue Edmondson Park.
The valuers agreed that there is a limited body of open market sales of constrained land, this being typically acquired by public authorities, posing difficulties for the valuation task.
The issue identified by the Council as requiring resolution for the identification of appropriate constrained land sales, was the relevance of public authority acquisitions (including historic sales) which relates to who should be considered the hypothetical purchaser.
The Council submitted through Mr Lunney that sales in the private market were the most appropriate to consider, not sales to local councils accepting these are limited. Mr Carrapetta the Applicant’s valuer considered sales to local councils were appropriately considered as they were part of the hypothetical market. During cross-examination Mr Carrapetta stated that he does not always assume that the only buyer of constrained land is a council. There are few market sales of highly constrained E2 properties. Mr Carrapetta agreed that he assumed that the whole of the acquired land could be sold to a developer with the developer having in mind they could on-sell the constrained portion of the land to the council. Given the response in cross-examination by Mr Carrapetta whereby he agreed sales to developers were preferable I do not need to resolve the issue of the appropriateness of sales to councils of constrained land.
The issues raised by the Applicant in relation to Mr Lunney’s approach to the comparable sales were, firstly, errors stated to be disclosed in oral evidence in relation to his analysis of the Residue Land sale. Secondly Mr Lunney’s failure to make adjustments for location as between Edmondson Park and Austral, an inferior location.
Both Mr Lunney (primary sale) and Mr Carrapetta (sale 3) analysed the sale of the Residue Land as providing evidence of a sale of constrained land. The Residue Land sale was in one line consisting of Lot 12 (zoned C3 traversed by a transmission line easement), Lot 13 in DP 1263762 (zoned R1 both on the western side of the watercourse) and Lot 22 in DP 1250284 (a super lot with development consent) at 2-4 Ryman Avenue for $6,250,000 by receivers in June 2023. Each valuer attributed a value to each of the three lots accepting that there was one overall sale price. Lot 22 sold (as Lot 10) for $6.5 million some 12-18 months later.
The differences between Mr Lunney and Mr Carrapetta in relation to the 2023 sale 2-4 Rynan Avenue Lots 12, 13 and 22 are set out below:
| Description | Mr Lunney | Mr Carrapetta | | Total | Rate $/m2 | Total | Rate $/m2 | | Sale Price in one line | $6,250,000 | | $6,250,000 | | | Adopted value for Lot 22 (3,715m2) | $5,250,000 | 1,413 | $5,069,080 | 1,364 | | Adopted value for Lot 13 (592m2) | $700,000 | 1,182 | $625,000 | 1,056 | | Value of Lot 12 (6,949m2) | $300,000 | 43 | $555,920 | 80 |
Mr Carrapetta considered that Lot 22 with a DA in place sold for $5,069,080, Lot 13 for $625,000 and Lot 12 for $555,920 showing $80/m2 for constrained land. He was instructed to consider the sale with extreme caution given that it was a receiver sale. The Council criticised his methodology as lacking any disaggregation in that he applied the same percentage adjustment to all three lots.
Mr Lunney assumed Lot 22 with a DA in place sold for $5.25 million and Lot 13 for $700,000 to derive a value for Lot 12 of $300,000 showing $43/m2 for constrained land. Mr Lunney adjusted the assumed rates by different amounts for Lot 22, and separately Lots 12 and 13. Mr Lunney relied on the advice of a selling agent that the likely sale of Lot 22 in July 2023 on its own would have been in the range of $5m to $5.5m. The purchaser was assumed to be a developer who has limited use for constrained land as it cannot be developed. In cross-examination Mr Lunney was asked why he made a different adjustment to Lot 22 compared to Lots 12 and 13. If the same percentage adjustment had been made to all lots more value would have been attributed to Lot 12, showing $78/m2. Mr Lunney accepted the mathematics but considered Lot 22 was by far the more valuable lot hence his approach. Mr Lunney was asked if he was aware that a receiver sale is not like a mortgagee in possession sale as it requires consent for the sale of the lowest ranked mortgagee. He was not aware but did not consider that made a difference given the conditions of the sale on the open market. (In cross-examination Mr Carrapetta confirmed that the Applicant as mortgagee had given consent to the Residue Land sale.)
The Applicant maintained the sale should not be relied on given the circumstances of a receiver sale and the difficulty of attributing value as between the different lots. The Council submitted that this sale albeit by a receiver should be taken into account because the sale was advertised and reasonably exposed to the market and not a 'forced' sale. Receivers are under an obligation to carry out their duties professionally and exercise reasonable care, see s 420A Corporations Act 2001 (Cth) so that the circumstance that it was a receiver sale does not prevent its consideration.
The analysis of this sale given its various components of differently zoned land is inherently subjective on either experienced valuer’s approach. The caution that is generally applied to a mortgagee in possession sale should also apply to a receiver sale. As there are other available sales of constrained land to analyse I will disregard this sale.
Mr Carrapetta's constrained sale 6 is Mr Lunney's constrained sale 5 being 335 Thirteenth Avenue Austral. This was an open market sale.
The key features of this property as described by the valuers are:
area of 20,230m2, a large lot with no existing prepared road access, with paper road access available,
rectangular shape,
part zoned - approximately 70% C2/E2,
part zoned - approximately 30% SP2 Infrastructure (Local Drainage),
100% bushfire prone,
100% flood prone,
contains tributary of Kemps Creek,
about 50% vegetation coverage,
located within western portion of urban release precinct,
no dwelling entitlement,
no connected services,
sold on 22 July 2019 for a rate of $35/m2,
sold on 13 March 2021 for a rate of $36/m2,
the date of sale was 21 July 2022, and
the sale price of $1,120,000 reflected an unadjusted land value rate of $55/m2.
Mr Lunney made no adjustments to the second sale in July 2022 and stated that the sale supported his contention of a constrained land value rate of $50/m2 because the recent uplift in value from March 2021 to July 2022 appeared to be speculative and not genuine. Mr Lunney did not provide any evidence for his opinion about the speculative uplift.
Mr Carrapetta considered the increase in value of those sales and re-sales reflected a rising market in late 2020 to late 2023. Mr Carrapetta made direct comparison adjustments of +10% for location as Edmondson Park is superior to Austral and +50% for lack of services.
The Court agrees with Mr Carrapetta that an adjustment is required for the difference in location as between Austral and Edmondson Park. While constrained land is not developable it can provide benefit to a developer in an overall development scheme. It is agreed that for residential land Edmondson Park is superior to Austral and to the extent that constrained land assists development in the more desirable area, it should be considered to have greater value. Mr Carrapetta’s adjustment of 10% will be made.
The Court does not agree with the adjustment of +50% by Mr Carrapetta for lack of services. This is a very large adjustment for which no support is provided. Doing the best I can I will adopt a 10% adjustment for lack of services.
The Court adopts an overall adjustment of +20% for the difference in location and the lack of services. The land value rate based on this sale as $55/m2 x 1.20% results in $66/m2.
Mr Carrapetta's constrained sale 5 and Mr Lunney's constrained sale 6 is 145 Ninth Avenue Austral. Both Mr Lunney and Mr Carrapetta agree that this is a market-based sale bought in the private market. The Land was zoned for a public purpose and identified for future acquisition by the Council.
The key features of this property as described by the valuers are:
area of 24,300m2,
rectangular shape of two adjoining lots,
part zoned - approximately 80% RE1,
part zoned - approximately 12% SP2 Infrastructure (Local Drainage),
100% flood prone,
contains tributary of Kemps Creek,
about 40% cleared with the remainder tree covered,
located on the NW corner of Ninth Avenue and Fourth Avenue, Austral,
no improvements,
the date of sale was 13 July 2022, and
the sale price of $1,600,000 reflected an unadjusted land value rate of $66/m2.
Mr Lunney relied on this sale as a secondary sale only. He made no adjustments to the 66/m2 achieved on the sale. Mr Lunney stated that the sale was in respect of land which is primarily zoned for a public purpose and that the sale is in an artificial market.
Mr Lunney did not provide any evidence for his opinion about an artificial market.
Mr Carrapetta considered that the analysed land value rate of $66/m2 was below market by a margin of between 15% to 20% and adopted a rate of $75/m2. A further adjustment of +10% for location to derive an adjusted rate of $83/m2 was made. He considered that the sale price was adversely impacted by public purpose zoning over the site and the land value rate of $66/m2 was lower than what Liverpool City Council had been offering for similar constrained land in Austral. Mr Carrapetta stated that an initial rate of $75/m2 should be considered due to the usual discount of 15 to 20% applied in valuation assessments when land is reserved for future acquisition and there is uncertainty surrounding when the site will be acquired and the market value offered.
The Court considers this sale can be considered despite Mr Lunney’s qualification. The Court agrees with Mr Carrapetta that an adjustment of 10% is required for the difference in location. The location adjustment reflecting Edmondson Park is superior to Austral, is identified above at [243].
The Court does not agree with Mr Carrapetta that the land value rate should start at $75/m2 in the absence of a reasonable explanation given the market transaction.
The Court adopts an adjustment of +10% for the difference in location and calculates the land value rate based on this sale as $66/m2 x 1.10% resulting in $72.6/m2 rounded up to $73/m2.
Mr Carrapetta's constrained sale 7 is 36 Lyons Road Prestons.
Mr Lunney stated that this property is located in an industrial precinct, with an entirely different planning context, and was unlawfully cleared of trees and vegetation. Therefore the range of potential hypothetical purchasers is limited. Mr Lunney considered that the sale price of this property cannot be readily adjusted for the purposes of direct comparison to the constrained land component of the Land. The Court agrees with Mr Lunney and therefore has disregarded this sale.
Abu.Tony remained in occupation of the land after acquisition. The following issues arise:
Is the Council entitled to set off any amount owed by Abu.Tony by reason of its remaining in occupation of the Land after the DOA, against compensation payable to the Applicant? (Issue 9)
If so what amount should be set off? (Issue 10)
Section 34 of the Just Terms Act states:
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.
(3A) Despite subsection (3), rent is not payable during the relevant 3-month period by a former owner who remains in occupation of any part of a building that is the person’s principal place of residence. A former owner does not include a person who only held a leasehold interest in the acquired land. (not applicable to the Applicant)
(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.
| Element | Amount | | Rent payable while Abu.Tony remained in occupation up to 6 July 2023 | $16,785.71 | | Rent claimed after Abu.Tony ceased to be in occupation | $13,142.86 | | Clean-up costs | $28,256.80 | | Total | $58,185.37 |
On 31 January 2023, the Council wrote to Abu.Tony's solicitors seeking confirmation of whether Abu.Tony had vacated or continued in occupation and foreshadowed the imposition of terms under s 34(3) for any continued occupation. The Council did not receive a response to this email and followed up again on 6 April 2023. On 12 April 2023, Abu.Tony's solicitors responded that their client remained in occupation and asserted a right to do so until compensation was paid. On 3 May 2023, Council wrote to Abu.Tony's solicitors (May Letter) annexing proposed terms of continued occupation under s 34(3) (Occupation Terms).
The Occupation Terms included (inter alia):
(a) an occupation fee of $500 per week, assessed by an independent valuer, and provided to Abu.Tony's solicitors with the Occupation Terms; and (b) at clause 6.1, obligations on Abu.Tony to keep the Land clean, tidy and in good condition / repair (excluding wear and tear), and to pay for the removal of waste and sewerage.
Please respond with any comments or proposed amendments to the terms within 7 days. If no agreement is reached within 14 days of the date of this letter, these terms will take force as reasonable terms pursuant to s 34(3) of the Just Terms Act.
Abu.Tony did not object or propose alternatives. According to the Council, in the absence of agreement, pursuant to s 34(3) the terms came into effect from 17 May 2023 (this is disputed).
The Occupation Terms commenced on 12 November 2022 for a 12-month term, ending on 11 November 2023. Thereafter, Abu.Tony's occupation continued on a monthly holding-over basis, terminable on 14 days' written notice according to the Council.
Abu.Tony’s solicitor wrote to the Valuer-General stating Abu.Tony had vacated the land on 6 July 2023. A copy of that letter was sent to the Council’s solicitor on the same day. The notice of vacation requirements under the Occupation Terms were 14 days notice of vacation to the acquiring authority, being the Council, its employee’s and agents.
On 21 December 2023, the Council gave 14 days written notice to Abu.Tony of its intention to terminate the Occupation Terms pursuant to clause 3.3.2(b). A copy of that notice was also served on the Applicant. The Occupation Terms terminated on 4 January 2024.
It is agreed that Abu.Tony was no longer in possession of the Land by 6 July 2023.
On the Acquisition Date, Abu.Tony was lawfully in occupation. On 20 December 2022, its solicitors confirmed that its place of business was physically located on the Land. It was thus entitled to remain in occupation until 9 November 2023, when the Council made the 90% advance payment to the Applicant under s 68(2)(a) of the Just Terms Act.
In the absence of agreement, s 34(3) permits the acquiring authority to impose reasonable terms of occupation, including rent and restrictions on use. Section 34(3A) provides a 3-month rent-free period, but only to natural persons residing on the land. Abu.Tony, a corporate entity using the land for business purposes, does not qualify. Section 34(4) expressly authorises the authority to set off any unpaid rent or other money due under those terms against the compensation payable.
On 12 September 2023, following evident non-compliance with maintenance obligations, Council issued Abu.Tony a notice under cl 6.3 of the Occupation Terms (Maintenance Notice). A copy was also served on the Applicant and the Gill Entities.
The Maintenance Notice observed that Abu.Tony was in breach of cl 6.1 of the Occupation Terms due to:
(a) a stockpile of formwork on the southern boundary of the Land; (b) significant rubbish near the shed; and (c) overgrown grass on the Land.
Pursuant to the Occupation Terms, the Maintenance Notice required Abu.Tony to rectify those issues within 10 business days, failing which Council would undertake the work and seek reimbursement.
In the Maintenance Notice the Council foreshadowed setting off the cost of any unpaid clean-up works against the compensation payable under s 34(4), including against the Applicant and the Gill Entities.
No response was received, and Council subsequently incurred clean-up costs totalling $28,256.80.
The Applicant's submissions suggest the rent can only be set off against the compensation payable by the person who occupied the Land after the Acquisition Date. As a mortgagee's interest derives from the registered proprietor's interest, the submissions above regarding the mortgagee being unable to recover more than the registered proprietor apply to this issue also.
To the extent that a deduction of the rent otherwise payable by Abu.Tony would be made from any award of compensation, the mortgagee has private contractual rights to recover any shortfall under the mortgage.
The effect of the Applicant's submissions on this point is that the Council should simply bear the non-recovery of rental to which it was otherwise entitled. This cannot be the case when the Just Terms Act is read as a whole. The only mechanism for recovery available to the Council is via the set off provision in s 34.
The Applicant contends that on a true construction of s 34 of the Just Terms Act unpaid rent is able to be set off only against compensation payable to the person who remained in occupation of the land after acquisition. In effect, it is a charge on that person’s interest in the land. It does not attach to the interests of other owners who did not themselves occupy the land.
It is clear that s 34 of the Just Terms Act is not concerned with all persons with an interest in the land. It applies only to a person who:
(a) was in lawful occupation of the land immediately before it was acquired; and (b) is entitled to compensation.
The most common example would be a landlord and tenant when the acquired land was subject to a lease. The landlord has no right to occupy the land (assuming they were not doing so immediately prior to the acquisition) and therefore, logically, cannot have their compensation reduced by the fact that the tenant chooses to do so. A mortgagee is in the same position. Assuming, as is the case here, that the mortgagee has not gone into possession of the land prior to the acquisition date, a mortgagee acquires no rights under s 34. It has no role in the negotiation of the terms of occupation under s 34(3). It has no liability to pay any rent or other charge that is agreed under that section. It is, in legal terms, a stranger to the arrangement, which applies exclusively between the acquiring authority and the former occupier who remains in place. In those circumstances, it would be most surprising if a statute designed to provide just compensation permitted the set off to be levied against owners other than the person who had in fact been in occupation.
It is accepted that there are no express words of limitation in s 34(4). However, the opening words "any such unpaid rent" make it clear that the subsection is focussed exclusively on a case in which an identified person to whom compensation is payable under the Just Terms Act has incurred a liability in accordance with s 34. That limitation, to cases in which a former owner entitled to compensation has remained in occupation and left their rent unpaid, carries through to the closing words of the section. That must be read in the context of the section as a whole, as meaning "may be set off against the compensation payable to that person under this Act".
Any other interpretation has capricious results, for example:
(a) a landlord becomes a guarantor of their tenant's rent; (b) one co-owner who has paid their rent assiduously in accordance with a s34 agreement must pay all over again because some other owner was less diligent; (c) no incentive is provided to a person who agrees to a s 34 agreement to pay any rent because if they default, other interest holders will be obliged to pay it on their behalf.
None of the above can be an intended consequence of the structure of the section.
The whole section must be read in such a way as to give it a coherent structure and meaning. "Any such unpaid rent" being owed by a person "to whom compensation is payable under this Act [who … remain in occupation]" is capable of being set off against compensation payable to that person and no other.
Although slightly contrary to its argument, the Applicant draws the Court's attention to s 35(3) of the Just Terms Act. That section does specify precisely against whose compensation the debt owed under that section may be set off. However, the structure of that section is quite different in that it can apply to strangers who come onto the land after the date of acquisition and squat there. For that reason, it is necessary to make the amount payable by a person who is forcibly ejected, a debt payable to the authority. Section 35(3) then gives two alternative means by which the debt can be enforced depending upon whether the person who was ejected is a compensation claimant or not. Those differences mean that there is no inference to be drawn that the specificity in s35(3) as to whose compensation may be reduced by set off was intended to be a contrast with s34(4).
Section 34(1) entitles a former owner to remain in occupation until compensation is paid, or at least 90% of the compensation is paid by advance or into trust, if they were in lawful occupation immediately prior to acquisition, and they have an entitlement to compensation under the Just Terms Act. Abu.Tony was able to utilise that subsection to remain in occupation of the Land. Under s 34(2) Abu.Tony was entitled to remain in occupation of any building which was its principal place of business for a further three months after it was compulsorily acquired. The striking of the terms of occupation are provided for in s 34(3). The terms set by the Council included rent of $500/week. Abu.Tony remained in occupation of the Land until around 6 July 2023. Notice of vacation of the Land in accordance with the Occupation Terms was not provided by Abu.Tony. A letter advising of vacation was sent by its solicitor to the Valuer-general on 6 July 2023. The Council’s solicitor was also sent that letter.
The statutory construction of s 34 arises for determination in circumstances which have not apparently arisen before, because the mortgage interest of the Applicant is greater than the value of the Land. Abu.Tony is before the Court in the sense that it has been joined as a necessary party, essentially to enable the Applicant to make its claim. There is no compensation in the hands of Abu.Tony from which rent can be deducted. That the Applicant is a mortgagee and did not have an entitlement to occupy the Land at any stage is not disputed.
The principles of statutory construction stated above are to the effect that the terms of a section must be considered, in their statutory context. Subsection (4) is drafted broadly in the sense that it states ‘any unpaid rent due’ may be set off against the compensation payable under the Just Terms Act. Subsection 34(4) does not specify whose compensation is set off.
Section 34 ‘Former owner’s right to occupy land until compensation paid etc’ is located in Part 2 Div 4 Miscellaneous Provisions relating to acquisition. Reading s 34 as a whole noting it is providing a right to an otherwise dispossessed land owner to occupy land as of right for a certain period, and otherwise on certain terms, supports the Applicant’s construction that the only interest holder the subject of the section is the former landowner. Only that person has the ability to occupy any building on acquired land.
That the acquiring authority is not able to recover all the rent it considers it should be able to, and has no other redress to claim that money is a reflection of these unusual circumstances. It is not a reason to subject the Applicant to the set off.
The set off of rent for a period when Abu.Tony was not in occupation is unreasonable and should not be enforced. The Occupation Terms imposed on the former owner an obligation to give 14 days’ notice of termination of its occupancy, and treated rent as payable until the expiry of that written notice.
The period of actual occupation by Abu.Tony is not precisely disclosed in the evidence. It commenced on the acquisition date and had ended by 6 July 2023.
Abu.Tony occupied the land after acquisition by a statutory right provided by ss 34(1) and (2). The heading of s 34 makes that clear. It was not in the position of a tenant obtaining permission from the owner of the land. For that reason, the only payment authorised by s 34(3) is rent to be paid while the land is occupied. It is not like a lease or a tenancy agreement in which a person who leaves the land during a fixed term may be responsible for paying rent after they have vacated the premises. At least from the date that Abu.Tony left the land, it had no continuing obligation to pay rent under the Just Terms Act. It cannot be reasonable, particularly by default rather than by express agreement, to impose an obligation to pay rent for land that is not occupied.
The Council’s claim of rent for a further six months to 4 January 2024 would be disallowed.
Clause 10 of the Occupation Terms attempts to impose on Abu.Tony the obligation to remove all items from the Land, and to grant the acquiring authority a power to remove them if the owner does not, at the owner’s cost. Roughly half of the total sum claimed by the Respondent falls under that heading of costs of removing materials from the Land.
Had Abu.Tony not chosen to exercise his right to occupy the land after acquisition, it would simply have walked away from the land in whatever state it was found at the date of acquisition; Yates Property v Darling Harbour Authority (1991) 24 NSWLR 156 at 175-176 (Handley JA); Turner v Minister of Public Instruction (1956) 95 CLR 245 at 268-269; AG of the Commonwealth v R.T. Co Pty Limited (No. 2) (1957) 97 CLR 146 at 158. The Just Terms Act does not impose any obligation on a dispossessed owner to clean up the land for the acquiring authority. If Abu.Tony had walked away from the land on the acquisition date, the cost of removing any items left behind would have fallen on the acquiring authority.
Abu.Tony exercised a statutory right which is granted to every dispossessed owner-occupier. Clause 10 attempts to acquire a financial advantage for the acquiring authority for which the statute makes no express provision. The acquiring authority did not give any concession to Abu.Tony in return for seeking to impose on it the cost of clean up. Such a term cannot be reasonable.
The Council relies on the words “other money due to the authority of the state” in s 34(4) to support the claim for clean-up costs. The extent to which those words are the means by which clean-up costs are able to be claimed is rejected in the circumstances of this matter. I do not need to determine the precise meaning of these words for all purposes now.
A number of issues have required determination in order for all the variables enabling the calculation of market value claimed by the Applicant to be undertaken. A summary of findings on the ten issues identified by the parties follows:
Issue 1 – the Applicant can bring this appeal seeking determination of market value.
Issue 2 – the existing detention basin on the Land cannot be disregarded.
Issue 3 – the NE corner of the Land must be valued as constrained land.
Issue 4 – the SE corner of the Land can be valued as residential for 4,106.4 m2 subject to applying a 10% reduction in the residential land value rate for the area of perimeter road.
Issue 5 – cost of civil works agreed.
Issue 6 – cut and fill to render the SE corner residential land flood free can be accommodated on the western side of Cabramatta Creek.
Issue 6A Q1 – parties to further consider.
Issue 6A Q2 – the hypothetical purchaser would not assume the existing basin can be moved to the NW corner.
Issue 7 – the rate for residential land is $840/m2.
Issue 8 – the rate of constrained land is $70/m2.
Issues 9 and 10 – no set off for rent and clean-up costs is available to the Respondent.
Once the parties have considered the judgment in particular Issue 6A Q1 as referred to at [191] above, they must advise whether further submissions are necessary. Alternatively, as all other variables necessary to determine the amount of market value have been decided the parties may be able to propose orders to the Court in order to finalise this matter. A timeframe for future action will be discussed with the parties.
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Beningna Pty Ltd
Liverpool City Council [2026] NSWLEC 36
(1957) 97 CLR 146
(2024) 258 LGERA 351
(1925) 36 CLR 538
(2017) 229 LGERA 118
(2012) 250 CLR 503
(2024) 116 NSWLR 233
(1999) 106 LGERA 94
(2020) 103 NSWLR 234
(2001) 52 NSWLR 22
(1965) 114 CLR 424
(1907) 5 CLR 418
(2024) 113 NSWLR 429
(2021) 393 ALR 485
(2009) 170 LGERA 298
(1956) 95 CLR 245
(1991) 24 NSWLR 156
no direct ingress from or egress to Camden Valley Way,
frontage in the order of 66m to Drinkwater Lane,
approximate frontage of 36.215m to Burrows Avenue,
has typical services of electricity, water, telephone and sewage connected, and
encumbered by transmission line easement along its SW boundary, as depicted in Figure 3 of the joint expert report of the parties’ hydrologists and town planners:
Market value is defined in s 56 of the Just Terms Act as:
Textual considerations include the multiple references to ‘owner’ in the Just Terms Act. Part 1 s 4 has a wide definition of owner as ‘any person with an interest in land’ which enables a wide range of interest holders in land to be entitled to compensation, including the Applicant. Numerous other references to owner occur in the Just Terms Act. In Part 2 Acquisition of land by compulsory process Div 1 Pre-acquisition procedures, s 11(1) refers to owners of the land receiving written notice of a compulsory acquisition process, with the owners who must receive notice specified in ss 12(1) and (2). Part 2 Div 3 deals with owner-initiated acquisition in cases of hardship and by virtue of s 22 the owners of land to whom the division applies are specified (persons who have fee simple estate in the land, or become entitled to exercise a power of sale of the land). In Part 3 Compensation for acquisition of land s 37 refers to an owner of an interest in land having an entitlement to compensation. The sections of Part 3 particularly relied on by the Applicant such as s 39 relate to the person with the interest in land.
The interest in land as a mortgage holder gives rise to the right to be paid compensation under s 37 noting that payment is to be made in accordance with Part 3. As the Applicant submitted as a holder of an interest in land it was entitled to lodge a claim for compensation under s 39. The Applicant received a notice of compensation as provided for in s 42. There was no obligation to make a joint application for compensation with another interest holder. A person who receives a compensation notice can appeal to the Court under s 66 of the Just Terms Act. The Court is to hear and dispose of such an appeal. A person who receives an offer of compensation and does not respond by accepting or lodging an objection with the Court is deemed to have accepted the offer.
That owner in s 65 is intended to refer to the registered proprietor of the land unlike more general references to owner elsewhere in Part 3 does not necessarily indicate that the general provisions relating to owners with an interest in land do not apply for the benefit of the Applicant. As the Applicant submitted the reference in s 65 to ‘the general rule’ should be considered a reference to the more usual situation whereby a landowner (mortgagor) seeks market value for land subject to a mortgage and the value of the land exceeds the mortgage interest. According to the Applicant the purpose of the section is to ensure that the total amount of market value includes the amount payable to the mortgagee under the mortgage which submission I accept.
No statutory construction basis exists for finding that an individual response by a person having an interest binds another person with a statutorily defined interest in the acquired land including in the context of s 65. I conclude that the Applicant can commence and proceed with this appeal as it is entitled to do under s 66 of the Just Terms Act. The financial ceiling contended for by the Respondent does not apply to limit the Applicant’s claim for market value.
There is insufficient evidence for the Court to draw the inference that the Applicant is asking the Court to make and there is a lack of evidence about the causal connection in any event.
At best, the evidence shows that Abu.Tony could have put the required detention basin on the western side, not that it would have. A replacement basin could not be constructed on the NW residue in any case. Dr Martens’ evidence indicates there would be water quality issues if the basin was put in that location. Mr Gray did not go into a great deal of detail about the potential water quality issues and there is no plan for a basin in that area in evidence. Mr Gray’s scheme requires compensatory cut and fill in the SW of the Land which Dr Martens does not consider feasible. Further this use is mutually exclusive of the basin being placed in that area.
At the date of acquisition, Liverpool City Council’s online flood map showed most of the Parent Parcel as being affected by flooding, and the Land as almost entirely affected by medium to high-risk flooding.
The existing C2 zoning was established by Amendment 83 which took effect on 31 March 2006. It was continued in the LLEP 2008.
In addition to the LLEP 2008, the Liverpool Development Control Plan 2008 (DCP 2008) set out requirements for riparian corridors at Cabramatta Creek and Cabramatta Creek West as being an average 20m wide core riparian corridor on both sides, measured from top of bank. An additional 10m ‘inner protection zone’ is identified as extending from the core riparian corridor. Most development is prohibited in the core riparian corridor. Controls in the 10m inner protection zone were submitted by Mr Haskew to be more liberal.
The NSW Department of Water and Energy published Guidelines for Riparian Corridors in 2008 (2008 Riparian Guidelines) required a vegetated zone of 30-40m wide from top of each bank to a 3rd or 4th order watercourse. The vegetated zone was not permitted to contain any infrastructure and was intended to protect and enhance the existing creek system. The 2008 Riparian Guidelines stated:
In cross-examination Dr Martens was taken to maps showing development near the banks of Cabramatta Creek. He stated the development in the nearby area demonstrated relatively strict adherence to the GCDC 2006. The development footprint was consistent with the 30m distance, and some development adheres to the more recent guidelines of 40m.
In cross-examination Mr Haskew accepted that the GCDC 2006 required a riparian corridor of 68.5m but there are very few parts of the Cabramatta Creek riparian corridor that are that width. When shown Dr Martens’ evidence which showed that the riparian corridor immediately to the south was 103.53m wide, Mr Haskew stated that there were a combination of public open space and drainage detention functions informing the widths to the immediate south. He stated the entire watercourse which showed narrower riparian corridor widths in the growth centre area should be considered.
Mr Chambers considered the assumed riparian zone width would make R1 land in the NE corner unfeasible. He did not think it made a great deal of difference if one measured from the hydroline or top of bank. In either case the core riparian corridor identified by Dr Martens, which he adopted, cut off about 35% of Mr Haskew’s identified R1 land in the NE corner of the Land. Adding the 10m vegetation area onto that riparian corridor left a strip of R1 land about 7m wide. He considered the 10m vegetation corridor was contiguous with the core riparian zone. It was not “somebody’s back garden” but part of what was intended to be a protection of significant waterways. The Prince Report 2007 refers to protection of that corridor which aligns with the GCDC 2006. The objectives for the corridor were to maintain the natural functions of a stream and its surrounding vegetation and fauna and generally conserve the riparian environment. Mr Chambers stated that if a riparian corridor must be measured from top of bank, Mr Haskew’s R1 zone would be within the riparian corridor. He did not consider it likely that strategic planning imperatives would extend the R1 zone beyond the top of bank.
Regardless of whether averaging would be considered to be permitted, as Mr Chambers identified critically the distance of the proposed R1 boundary from the creek of 6m according to Mr Haskew is too narrow to be likely to be considered as permissible by the prudent hypothetical purchaser.
Accepting that the hypothetical parties would be considering the NE corner as an extension of what was then in place not limited by recent zoning and property boundaries, sufficient uncertainty arising from the relevant stormwater reports and planning requirements, which include the requirement for measurement of the riparian zone from the top of bank, would arise in the mind of the hypothetical purchaser about the scheme. I do not consider that a prudent hypothetical purchaser would consider that zoning of the land as residential R1 was so certain that an additional amount on that basis would be paid.
An issue was raised by the Council in relation to Mr Gray’s modelling which did not need to be determined for the purpose of resolving Issue 3. As it could be relevant to Issue 4, I will identify it now.
There is a further real-world obstacle to Dr Martens' assumptions. It is highly unlikely that extensive excavation and "squaring off" of the channel of Cabramatta Creek would ever be permitted.
The Court is confronted with a circumstance in which an expert, Mr Gray, says expressly and in clear terms that the development of the relevant part of the acquired land can be achieved without works being necessary in the creek bed. Against that, there is no contradictory modelling, only an inference drawn by Dr Martens from his review of some cross-sections provided in the electronic model files. The Respondent did not tender those files or take the Court to them. Dr Martens' inference is rejected by the author of those files who provides an independent cross-check, comparison of peak flood flows to the Bewsher Report 2004 and shows that no change has been made. Any consent authority examining an application to develop part of the acquired land would adopt the Bewsher Report 2004 as its flood model and therefore would achieve the same results as Mr Gray (subject to some variations of no more than 0.1m). In no circumstance would they permit development of the residential land conditioned upon extensive excavation of a 4th order watercourse such as Cabramatta Creek. The Court must reject the proposition that the suggested channel works, costed by the Quantity Surveying experts at $4,432,470, would ever be required or be permitted.
Provision of a perimeter road in the location identified by Mr Gray can be considered as consistent with planning approaches to the riparian zone and can be considered broadly consistent with planning controls as Mr Haskew identified. Noting that Dr Martens did not consider the road would be approved, I consider the suggested placement of a road is likely to be considered feasible by the hypothetical developer to the limited extent this occurs between the 10m and 20m contour lines.
Weighing up the various inputs likely to be known to the hypothetical purchaser as found in the evidence, on balance the hypothetical purchaser would consider there was a likelihood of the Council approving development of 4,106.4m2 of land in the SE corner for residential purposes with a perimeter road as proposed.
Mr Lunney valuer identified and adjusted sales in relation to the presence of roads by reduction in value of 10% for efficiency. Given that the area of road proposed is relatively large in the context of the SE corner the value of that area will be adjusted accordingly.
The cost of the necessary cut and fill to render the SE corner of land developable is next considered.
Mr Gray was cross-examined on Dr Martens' view that this proposal would lead to unacceptable water quality outcomes. When asked to assume the basin was removed and moved to the other side of the creek, he stated that obviously the basin could not treat eastern tributary water. Mr Gray considered that Western Cabramatta Creek water could be treated to be rendered clean. When asked if that was an outcome that was unlikely to be acceptable to the Natural Resource Access Regulator (NRAR) Mr Gray stated:
Based on these enquiries, Mr Lunney adopted a discount of 10% reflecting a period of two years for the staging constraint of the Okinawa Sale land when compared to the Land.
Mr Carrapetta also made similar enquiries in respect of the Okinawa Sale, including seeking more information from the neighbouring owner in May 2025. Mr Carrapetta was provided with emails from a neighbouring owner from October 2023 showing:
the neighbouring owner seeking information about delivery of detention basins inter alia; and
a Council officer (the same who spoke to Mr Lunney) stating the construction of the basin was anticipated to be completed by June 2026, subject to weather.
A further email exchange from May 2025 was tendered, in which the neighbouring owner told Mr Carrapetta he was experiencing a number of problems with development of the neighbouring lot and delays in the Council finalising its basin works. The neighbour was aiming to develop the lots beginning in 2026. Mr Carrapetta forwarded that email to Mr Lunney.
In Mr Carrapetta’s opinion the period for delay in staging of the Okinawa Sale development should be increased in the order of four years and he adopted 23.5% to reflect this.
Based on the calculations and assumptions above, the Court adjusts the Okinawa Sale as follows: