BLACKTOWN CITY COUNCIL v LASSETER

Court of Appeal (NSW)|1996-11-21|Before: Bignold J, Priestley JA, Beazley JA, Cole JA

PRIESTLEY, COLE and BEAZLEY JJA 21 November 1996, 5 December 1996 [1996] NSWCA 51

RESUMPTION AND ACQUISITION OF PROPERTY - Compensation - Assessment - land to be resumed landlocked by reason of subdivision - application of "San Sebastian" principle - valuation on basis that land unaffected by resumption process.

RESUMPTION AND ACQUISITION OF PROPERTY - Compensation - Assessment - Valuation of land - land to be resumed by council landlocked by reason of subdivision - application of principle in Housing Commission of NSW v San Sebastian Pty Ltd - valuation as if land unaffected by the resumption process

Land owned by the respondent at Seven Hills was zoned part Residential 2(a) and part Proposed Recreation 6(c). Under the relevant Planning Scheme Ordinance, the respondent could require the appellant to purchase the 6(c) land.

In 1982, the appellant granted development consent to a subdivision of the land into 14 lots - 12 residential, one dedicated as public reserve, and the land zoned 6(c). The effect of this subdivision was to cause the land zoned 6(c) to become landlocked.

In 1988, the 6(c) land was resumed by the appellant in accordance with the requirements of the Planning Scheme Ordinance. The respondent disputed the appellant's valuation of the land, which was based upon its landlocked condition. Bignold J held that the principles in Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196 applied, so as to require that the valuation be made ignoring that the land was landlocked, because its condition was the direct consequence of the zoning and resumption process.

(2) The land had to be valued on the assumption that such value has not been affected by the resumption process: Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196 and Griffith City Council v Polegato and Anor (1990) 20 NSWLR 696 applied

(3) As the landlocking of the land to be resumed was a direct response to the zoning of the land, it had a sufficient connection with the resumption process as to require that the landlocked condition be ignored for the purposes of valuation.

Appeal dismissed with costs. Priestley JA I agree with Beazley JA. Cole JA I agree with Beazley JA.

Beazley JA This is an appeal from a decision of Bignold J in the Land and Environment Court of New South Wales in which his Honour determined that the respondent was entitled to compensation in the sum of $384,000 in respect of the appellant's resumption of a parcel of land at Seven Hills, being Lot 13 DP730891 (the resumed land). The appeal is on a question of law only: s57 of the Land and Environment Court Act. The sole issue raised on the appeal is whether the

principle that resumed land is to be valued at the resumption date in its then present condition is subject to the principle in Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196.

The respondent acquired the resumed land in 1957 as part of a larger acquisition of 5 acres of land (the land), rectangular in shape and having a road frontage to Seven Hills Road. The land was within the "Green Belt" zone designated by the County of Cumberland Planning Scheme.

In 1968, the land was zoned part Residential 2(a) and part Proposed Recreation 6(c) under the provisions of the Blacktown Planning Scheme Ordinance (the Ordinance) made under PtXIIA of the Local Government Act 1919. C126(2) of the Ordinance provided that an owner of land included in Zone No. 6(c) could request the appellant to acquire that land.

The respondent, who had built a home near the Seven Hills Road frontage, decided to proceed with a residential subdivision of the residentially zoned section of the land. In about May 1981, before lodging any development application seeking consent to a subdivision, he wrote to the appellant advising that he was proposing to subdivide his land, stating that he understood he would be required to dedicate a portion (about 10%) as public reserve and seeking advice as to the council's basis of valuation of the balance of the land zoned 6(c), "in the event of my proposed application to Council to purchase it".

On 13 May 1981, the respondent lodged a development application proposing an 11 lot residential development with the balance of the land to be public reserve. Under this application, one lot (upon which the respondent's house was built) would front Seven Hills Road and access to the remaining 10 residential lots would be via an extension of Wagner Place, a public road running off Beethoven Street (Beethoven Place being approximately at right angles to Seven Hills Road). Council gave development consent to the application, subject to a condition that a separate lot (lot 14) comprising 1,190 sq metres be created and dedicated as public reserve.

The respondent did not implement this development consent but in December 1981 lodged an amended development application (the December application), seeking approval for a residential subdivision creating 12 residential lots (including one lot to accommodate the respondent's family home), one lot designated as public reserve comprising an area of 1,309 sq metres (which was to take account of the anticipated condition that such a lot be created - see the earlier development consent) and one lot, which was within Zone 6(c) comprising an area of 9,010 sq metres, as public reserve. In the meantime, the appellant had responded to the respondent's letter advising that it could not give any indication of how long it would take to acquire the land zoned 6(c) after receiving notice from the respondent under cl26(2) of the Ordinance. It also advised that the basis of valuation of the land would be residential.

On 11 February 1982, the appellant granted development consent of the December application and subdivision approval, subject to conditions including:

"4. The dedication of 1,504 sq.m. of land to be shown as public reserve and numbered Lot 14. Under the obligations imposed under $333(1)(g) of the Local Government Act, Council is required to take into consideration the amount of public reserve to be provided and Council considered the above land is the amount necessary for the recreational benefit of the population to be housed on the subdivision. This area contains the amount of land required for the additional 11 allotments created as a result of the subdivision plus that additional land zoned

URJ BLACKTOWN CITY COUNCIL v LASSETER (Beazley JA) 3

Residential 2(a) which is being offered by the applicant as public reserve in excess and in lieu of that part of Lot 8 affected by the Open Space 6(c) zoning which is to be the subject of a Local Environment Plan."

On 8 July 1983, the Minister made Blacktown Local Environment Plan No. 49 (LEP No. 49) which adjusted the common boundary between the residential 2(a) zoning and the public recreation 6(c) zoning of the respondent's property. LEP 49 amended the Blacktown Planning Scheme so as to include the amendment to the common boundary. LEP 49 is reproduced below. The dotted line extending from Wagner Place into the area zoned 2(a) was an extension of that street proposed as part of the subdivision.

The Plan of Subdivision was registered on 21 February 1986 as DP 730891. DP 730891 dedicated Lot 14 as public reserve. Lot 14 ran southwards from Wagner Place, its access to that road being via the narrow neck extension which is demonstrated on LEP 49. The Plan also created lot 13, which was to become the resumed land. Lot 13 abutted the southern and part of the eastern boundary of Lot 14 and had no access to Wagner Place or any other public road thus causing it to become landlocked. This is to be contrasted with the frontage to Wagner Place of the land zoned 6(c) which was proposed by the original development application. That frontage was to more than half of the cul-de-sac end of Wagner Place, (as proposed to be extended under the subdivision application) providing extensive access so that the land was freely accessible from a public road.

On 21 July 1988, the respondent requested the appellant to acquire lot 13 "on a residential basis". The appellant resumed the land. However, the parties were in dispute as to the compensation payable for the resumed land. The dispute arose because of the council's contention that the resumed land should be valued on the basis that it was landlocked. The respondent contended that the land should be valued as if it were not. That dispute gave rise to a Class 3 application to the Land and Environment Court for a determination of the compensation payable.

The trial judge held that the principles in Housing Commission, of New South Wales v San Sebastian applied so as to require that the landlocked condition of the land be ignored, because the physical condition of the resumed land was the direct consequence of the public recreation zoning of the resumed land and the resumption process.

Senior counsel for the appellant submitted that his Honour erred in his application of the San Sebastian principle as there was nothing in that principle "which authorises the Court to rewrite history so far as the physical characteristics of the land was concerned". The history to which counsel referred was the subdivision of the land, the dedication of lot 14 as public reserve so that that land was not available for access to lot 13 and the sale of the residential lots which backed on to the reserve, so that those lots were not available to be "severed" from the residential subdivision so as to provide access to lot 13. The consequence was that from a date which was not immediately prior to the resumption, Lot 13 had become landlocked. It was submitted that in these circumstances, the San Sebastian principle did not operate to override the basic principle of valuation of resumed land, namely, that the land was to be valued in the condition in which it existed immediately prior to resumption, subject only to the operation of s116 of the Environmental Planning and Assessment Act 1979.

There was no dispute as to certain of the matters relevant to this question.

tocauty SEVEN HILLS Open Space - Proposed Recreation

(i) The appellant was required to acquire the land upon the respondent giving to it notice under cl26(2) of the Ordinance.

(ii) The resumed land is to be valued "in the condition in which it existed at the date of resumption": Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 73 LGRA 47 per Handley JA at 65.

(iii) The valuation principle was subject to the provisions of s116(1) which, although repealed, applied to this resumption. $116(1) provided:

"Where land reserved by an environmental planning instrument pursuant to s26(c) or proposed to be reserved by a draft environmental planning instrument is resumed or appropriated, the value of that land shall be determined as if it had not been so reserved or proposed to be reserved."

The existence of what the trial judge referred to as the San Sebastian principle, sometimes known as the Point Gourde principle was also not in dispute. However, senior counsel for the appellant submitted that that principle was of limited application, namely, that it applied to the case of a resumption for a public work in which case the valuation is to ignore any alteration in value from the establishment of the public work. He submitted that the principle had no application to the present case, where the condition of the land immediately prior to the resumption (ie its landlocked condition) which depreciated its value, was not due to any establishment of a public work but was caused by the act of the respondent in subdividing the land in the manner he did, with the consequences to which I have already referred. He submitted that s116(1) applied and it required that the only matter to be ignored for the purposes of the valuation was the 6(c) zoning.

This approach however takes too narrow a view of the principles winch govern the valuation of resumed land. Those principles were conveniently summarised by this Court in Griffith City Council v Polegato and Anor (1990) 20 NSWLR 696 at 697 and 701 as follows:

"However in order to determine the value of the land at that date, UNAFFECTED BY THE RESUMPTION PROCESS it will generally be necessary to take as a starting point the value of the land immediately before the resumption process began when the value could not and would not have been affected by the resumption.... The principles applied in Housing Commission of New South Wales v San Sebastian require the land to be valued at the relevant date on the artificial, but just, assumption that such value has not been affected by the resumption process. It does not require or authorise the court to disregard facts themselves independent of the resumption process such as costs of building and general market values at the date of resumption." (emphasis added)

The question therefore in the present case is whether the subdivision which created the landlock was part of the resumption process. In my opinion, it was, it being irrelevant that the resumption occurred after the land was subdivided. This land was always liable and likely to be resumed. The subdivision which was effected was predicated upon the basis that the land zoned 6(c) would be resumed. The limited access to the land zoned 6(c) created by the subdivision was a direct response to the zoning of that land and as such had sufficient connection with the resumption process to require that the landlock created by the subdivision be ignored for the purposes of the valuation.

It follows from what I have said that there was no error in the trial judge's approach and the appeal should be dismissed with costs. Because of the view which I have taken on the appeal, it is not necessary to determine the matter

URJ BLACKTOWN CITY COUNCIL v LASSETER (Beazley JA) 5

raised by the respondent in the Notice of Contention. I should add, however, that in my opinion the respondent ought not have been permitted to raise the issue in the Notice of Contention, which was whether an estoppel operated in favour of the respondent because of representations made by the appellant, as that issue was not raised in the court below: Coulton v Holcombe (1986) 162 CLR 1; Suttor v Gundowda Pty Ltd (1950) 81 CLR 418.

Solicitors for the appellant: J Greenwood and Co, Blacktown Counsel for the respondent: W Davidson SC

Solicitors for the respondent: Hill Thompson and Sullivan

At a glance

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Judgment (40 paragraphs)

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Cases Cited (5)

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