Bow v Blacktown City Council

CASES CITED: Almona Pty Ltd v Roads and Traffic Authority of New South Wales [2008] NSWLEC 112

APPLICANT Mr I J Hemmings SOLICITORS Colin Biggers & Paisley LEGAL REPRESENTATIVES: RESPONDENT Mr P R Clay SOLICITORS Bartier Perry

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT Jagot J: 1 On 1 June 2007 Blacktown City Council compulsorily acquired the whole of Mr Bow's land, being lot 39 in deposited plan 208727 at Fyfe Road, Blacktown, for the purpose of open space.

2 The Valuer-General determined the amount of compensation to be offered to Mr Bow in the sum of $3,255,000 representing the market value of lot 39 (s 42 of the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Compensation Act)). Mr Bow objected to this amount, with the consequence that the Court must hear and determine Mr Bow's claim for compensation (s 66 of the Just Terms Compensation Act).

3 In the hearing Mr Bow claimed compensation as follows: - (i) $4,347,050 on account of the market value of lot 39 (s 55(a) and s 56(1) of the Just Terms Compensation Act), and (ii) $35,723.73 on account of disturbance (s 55(d) and s 59(f) of the Just Terms Compensation Act).

4 The Council agreed with respect to the amount claimed for disturbance but contended that the market value of lot 39 was $2,981,150. That is, Mr Bow was entitled to total compensation of $3,016,873.70.

5 Mr Bow's claim for compensation must be assessed in accordance with the provisions of the Just Terms Compensation Act (specifically, Div 4 of Pt 3 of that Act). There was no dispute between the parties about the operation of these provisions, any issue of legal or valuation principle or, indeed, any of the primary facts. With that common ground in mind the following matters may be briefly recorded.

6 Lot 39 is located at the southern end and on the western side of Fyfe Road within an area known as Kellyville Ridge. The land is vacant and well vegetated. A small creek bisects lot 39 running from the south-eastern corner to the northern boundary and thence onto the adjoining land known as Dave's Duck Farm. Lot 39 is located at the upper reaches of the creek. The creek is piped under Fyfe Road to the east and (in contrast to lot 39) is not apparent as a defined watercourse on the upstream land. To the west the creek enters Dave's Duck Farm and is again piped under a new road to the rear running parallel to Fyfe Road. Lot 39 has a total area of 21,260m2.

7 Lot 39 was zoned 6(a) Open Space under the Blacktown Local Environmental Plan 1988. Clause 17 of the LEP contains an acquisition clause pursuant to which the Council acquired lot 39. The 6(a) zoning is an aspect of the public purpose for which lot 39 was acquired and is to be disregarded under s 56(1)(a) of the Just Terms Compensation Act. But for the public purpose lot 39 would have been zoned 2(a) Residential in common with the surrounding land at the acquisition date. The surrounding land is rapidly being transformed from a semi-rural area into suburban residential development consistent with the 2(a) zoning and provisions of the LEP permitting such development, be it in the form of single houses, dual occupancies, integrated housing or medium density housing.

8 The different assessments of the compensation to which Mr Bow is entitled for the compulsory acquisition of lot 39 result from disputes about: - (i) the effect on market value of the presence of an endangered ecological community, Cumberland Plain Woodland (CPW), on lot 39, (ii) the effect on market value of low-lying areas on lot 39 that will need to be filled as part of a residential development, and (iii) the approach to sales of other land within Fyfe Road and the surrounding area.

9 Ms Rebecca Hayes and Mr Dominic Fanning gave evidence about the presence on lot 39 of CPW. CPW is listed as an endangered ecological community under the Threatened Species Conservation Act 1995 (NSW) and as endangered under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). Both listings pre-date the acquisition date of 1 June 2007 (and, for the NSW legislation at least, the sale dates of comparable sales).

10 Lot 39 contains about 1.6 hectares of CPW. The CPW present on lot 39 is regrowth, with the shrub layer mostly absent and dense weed infestation in part. The National Parks and Wildlife Service mapped the CPW on lot 39 as "other remnant vegetation" (or significance category 3) in 2002. This low significance rating reflects the small size of the patch and its isolation from other areas of native vegetation.

11 Ms Hayes considered the vegetation on lot 39 to be in moderate condition with rehabilitation potential. In Ms Hayes' opinion the existence of the creek through lot 39 meant that a riparian corridor would need to be preserved for a width of at least 20m on either side of the creek (40m in total given the narrow width of the creek). In consequence, some CPW would be retained on lot 39 in any development. This retained CPW, given its moderate condition and rehabilitation potential, could form linkages with the Second Ponds Creek vegetation area (north of lot 39) through a restored riparian corridor as and when land in the area was developed. For these reasons Ms Hayes thought it likely that the clearing of the CPW from lot 39 outside the riparian corridor would be likely to significantly affect CPW triggering a requirement for a species impact statement to accompany any development application. As part of the process of obtaining concurrence from the Director-General of National Parks and Wildlife for a development application accompanied by a species impact statement Ms Hayes concluded (see s 79B of the Environmental Planning and Assessment Act 1979): - (i) the CPW could be cleared in part from lot 39, (ii) the width of the riparian corridor would be 40m in total (20m each side of the creek), (iii) the width of any buffer of CPW to the riparian corridor would need to be negotiated as part of the species impact process but, probably, another 20m on each side (80m in total) would need to be provided, and (iv) an offset by way of compensatory payment would be required to establish, maintain and improve CPW in the vicinity of lot 39 in the order of $520,000.

12 Mr Fanning agreed that a riparian corridor of a total of 40m width would be likely to be required due to the creek. However, he considered the small size of the patch and its isolation from other vegetation meant that long-term viability of ecological diversity on lot 39 was most unlikely. He described the vegetation on lot 39 as a "small isolated patch in a sea of suburbia". Mr Fanning thought it well established that such patches were marginal, serving no material biodiversity conservation, their real function being aesthetic or amenity based. In consequence, Mr Fanning did not accept a need for a buffer to the riparian corridor, thinking it more likely that there was an argument available to decrease rather than increase the corridor, perhaps to 20m in total (10m either side of the creek). Mr Fanning acknowledged that the Director-General of National Parks and Wildlife was likely to require a compensatory offset payment in the order of between $100,000 and $200,000 (adopting $150,000 in his report) for clearing of the CPW outside the riparian corridor. However, the Director-General would only be involved if a species impact statement was required.

13 Ms Hayes and Mr Fanning agreed that their opinions did not involve the applications of hard and fast rules. The question whether a species impact statement would be required was a fuzzy line. Ms Hayes thought clearing of a substantial part of the CPW on lot 39 was "just above the line". Mr Fanning thought the clearing would be below the line so that no species impact statement would be required. They agreed that, if below the line, then less stringent requirements would be likely. They also agreed that, as at the acquisition date, compensatory offsets were basically a matter of negotiation with the National Parks and Wildlife Service. A wide range of outcomes was possible.

14 Ms Hayes was questioned about other reports she prepared to accompany development applications in Fyfe Road. Lot 31 in deposited plan 208727 is about one block to the north of lot 39 on the opposite side of the road. Lot 31 had about 1.6 hectares of CPW present on it. Ms Hayes prepared a report in March 2007 to facilitate the development of lot 31. The CPW on lot 31 was also regrowth with the shrub layer mostly absent and dense weed infestation in part. The National Parks and Wildlife Service mapped the CPW on lot 31 as "support for core habitat" (or significance category 2) in 2002. In other words, the CPW on lot 31 had a higher significance category rating in 2002 than the CPW on lot 39. In her report about lot 31, Ms Hayes noted that lot 31 was now isolated from other vegetation due to development and associated clearing. Hence, Ms Hayes described the CPW on lot 31 as in fact being "other remnant vegetation" or significance category 3. Ms Hayes assessed the clearing of the whole of the CPW on lot 31 as not likely to significantly affect CPW. Hence, she recommended that the vegetation on lot 31 could be cleared without any species impact statement or compensatory offset arrangement. The clearing and development of lot 31 was approved in April 2007. When asked about the difference between lot 31 and lot 39 Ms Hayes observed that while lot 39 was just above the line (in requiring a species impact statement), lot 31 was just below the line. Lot 31 did not have a creek and thus no riparian corridor was required. It had no potential for linkages through the riparian corridor. The vegetation on lot 39 was more fragmented with a lower rehabilitation potential. When a species impact statement was required, the Director-General of National Parks and Wildlife had a concurrence role. The Director-General's requirements were usually more stringent than those of councils.

15 Lot 31 was sold in December 2006. It is one of the comparable sales for the purpose of determining the market value of lot 39. Ms Hayes' work in March 2007 occurred during the period of settlement of the contract. Although the sale was not conditional on development consent being obtained there was an extended settlement period of six and a half months. The contract was completed on 4 July 2007.

16 The fact that lot 31 had 1.6 hectares of CPW on it (about the same as lot 39, even if more fragmented and of lesser rehabilitation potential) confirms the importance of recognising the nature of the present exercise (as, indeed, counsel for both parties emphasised). The question is not whether regulatory authorities would require a 40m or 80m wide corridor and a compensatory offset payment. Rather, the view of the hypothetical buyer and seller posited by s 56(1)(a) of the Just Terms Compensation Act about these issues is relevant.

17 I am satisfied that the presence of the vegetation and creek on lot 39 (which covers the majority of the site) would have caused the hypothetical parties to the sale transaction on 1 June 2007 to obtain ecological advice about clearing and development. I accept that the advice obtained could have been to the effect of the opinions of Ms Hayes and Mr Fanning. Their evidence, when analysed, involved fairly fine distinctions based on views about impact and anticipated outcomes of potential negotiations with the National Parks and Wildlife Service. I consider the hypothetical buyer would have taken comfort not only from the fact that development consent had been granted in short order for the wholesale clearing of lot 31, but also the zoning and consequential anticipated development of land along Fyfe Road and its surrounds. The mapping in 2002 by the National Parks and Wildlife Service shows patches of CPW scattered on both sides of Fyfe Road, with the vegetation on lot 31 classified as significance category 2 (rather than category 3 as for lot 39). The release of land at Kellyville Ridge for urban development was planned for many years culminating in rezoning in 1991. Development could not occur without services and significant time, effort and resources was spent on the co-ordination of services to enable the land to be released and developed. The presence of relatively small patches of remnant CPW on other land within this release area has not been perceived or functioned as any particular impediment to development. That having been said the patch on lot 39, on the available information, is larger than that on other lots, particularly lot 31.

18 The effect of the public purpose on the value of lot 39 must be disregarded. Once this is done the actual experience of developers in the area and along Fyfe Road make it likely that the hypothetical buyer would take a reasonably robust view about the risk presented by the presence of CPW on lot 39. I do not accept that the hypothetical parties to the transaction posited by s 56(1)(a) of the Just Terms Compensation Act would treat 80m of lot 39 as incapable of any development. Nor do I consider that they would accept any real chance of having to pay something in the order of $500,000 as a compensatory offset for clearing about 1.6 hectares of CPW from lot 39. The difference between lot 39 and lot 31 would be too fine and the example of lot 31 too recent at the acquisition date to support that conclusion. The parties to the transaction would accept that there was a risk that a species impact statement might be required. That risk would be seen as greater for lot 39 than lot 31 despite lot 31 having a higher significance rating. The facts supporting the higher significance rating for lot 31 did not exist at the time of sale (due to other development removing any potential for linkages to the west). The hypothetical parties would accept that a 40m wide riparian corridor (20m either side of the creek) would have to be set aside, protected from development and rehabilitated at the developer's cost due to the presence of the creek. They would accept a real risk that a compensatory payment would be required if a species impact statement needed to accompany the development application. The anticipated payment would be within the range indicated by Mr Fanning.

19 In other words, at least insofar as the presence of CPW on lot 39 is concerned, I give considerable weight to the zoning and treatment of small patches of CPW on other land close to lot 39. The far more onerous requirements Ms Hayes anticipated are not sustainable when lot 31 and the surrounding zoning is taken into account. Moreover, Ms Hayes agreed that there was no real prospect for any connectivity upstream of lot 39. The zoning and likely development on surrounding lands also leaves little scope for connectivity downstream other than to a very small extent via treatment of the riparian corridor. Accordingly, lot 39 should be treated as having an area of potentially developable land of 14,807m2 with a further 6,453m2 to be retained and restored as part of a riparian corridor.

20 Counsel for Mr Bow submitted that the hypothetical parties under s 56(1)(a) would not make any specific adjustment for the compensatory payment referred to by Ms Hayes and Mr Fanning having regard to lot 31, the lack of any objective criteria to assess the amount of any payment, and the uncertainty of any species impact statement being required. I accept that there is uncertainty about this issue in terms of both need for a species impact statement and the amount of any payment that might be negotiated. For these reasons, I do not accept the approach advocated by Mr Wood (splitting the difference between Ms Hayes and Mr Fanning) or by the Council (allowing a reduction of $20 per m2 across the developable land). I also do not accept the submissions on behalf of Mr Bow that no allowance at all would be made in the circumstances. The hypothetical parties would appreciate that the requirement for a compensatory payment was a real risk and would come straight out of the buyer's pocket. However, the risk is not sufficiently significant to justify assessment separately from the other anticipated issues associated with lot 39, including the need for civil works to the creek and fill to deal with flooding.

21 Mr Wood, the respondent's valuer, considered that a separate allowance should be made for realignment of the watercourse and minor fill and compaction to ensure the developable area on lot 39 is above the 1 in 100 year flood level. Each of the comparable sales involves an en globo parcel requiring civil works as part of any future subdivision and development. Although a restored creek will have amenity value, the need for a developer to retain and restore the creek and deal with fill to ameliorate flooding is a potential disadvantage when compared to sales not burdened by a creek. However, none of these issues (apart from the riparian corridor) are of sufficient significance to be dealt with in isolation. I consider that the hypothetical parties would take a fairly broad-brush and robust approach to these issues whilst not discounting them altogether.

22 By reason of these conclusions the comparable sales, and their points of similarity to and difference from lot 39, become critical for assessing the value of the developable area. The present case is unusual in that each valuer (Mr Phippen for the applicant and Mr Wood for the respondent), in effect, dismissed the other's sales as of no real utility. Accordingly, despite some seven or eight sales in the same road as lot 39, the valuers' analysis did not meaningfully overlap. In short, Mr Wood dismissed five sales in Fyfe Road as too dated to be particularly useful (being the sales relied on by Mr Phippen). Mr Phippen dismissed three sales in Fyfe Road (two being linked) as sales by an anxious or disinterested vendor and thus not market transactions (being the sales relied on by Mr Wood). Mr Wood also relied on another sale in Vinegar Hill Road similarly dismissed by Mr Phippen as non-comparable.

23 Both valuers were criticised by opposing counsel for alleged inadequacies in their approaches and changes of position. The Council also directly challenged Mr Phippen's credit about an alleged conversation with a solicitor for a vendor on one of the comparable sales (dealt with below). I do not accept the Council's submission that the whole of Mr Phippen's evidence ought to be rejected either because his report of the conversation was not as carefully worded as it should have been or because of his changing views over time. Of greater concern in my view is that, despite directions to confer and prepare a joint report, neither valuer appeared to have engaged in any meaningful way with the opinions of the other. Their joint report was required by rule 31.24(1)(b) of the Uniform Civil Procedure Rules 2005 to represent the outcome of an endeavour to reach agreement on matters in issue and by the Court's Practice Note Class 3 Compensation Claims to be the product of a "genuine dialogue between experts in a common effort to reach agreement with the other expert witness about the relevant facts and issues" and not "a mere summary or compilation of the pre-existing positions of the experts". The joint report the valuers prepared did not satisfy any of these requirements and was nothing more than two reports in reply stapled together. The parties and the Court were thus regrettably deprived of the further assistance that could and should have been provided by the valuers. Experts' obligations in this regard are fundamental to the "just, quick and cheap disposal" of proceedings (UCPR r 2.1). Experts and the legal practitioners for parties engaging experts must ensure compliance with these requirements.

24 The five sales primarily relied on by Mr Phippen (lots 38, 42, 46, 27, and 1077) are located in Fyfe Road, having been sold between July 2003 (lot 38) and June 2006 (lot 1077). Mr Phippen used Residex information to assess the market for developed residential land in Kellyville. These statistics led Mr Phippen to the view that, irrespective of the market elsewhere, the market for residential lots in Kellyville remained positive. Hence, Mr Phippen adjusted his comparable sales up by reference to the Residex data. Mr Wood considered reliance on Residex data inappropriate. The data related to the retail end of the market. In his view the market peaked in about October 2003 before declining thereafter. For en globo residential land the market generally declined by up to 25% and by up to 50% in Kellyville. Mr Wood considered that his later sales in Fyfe Road (lots 31, 42, and 30) showed this market decline whereas Mr Phippen thought they showed nothing more than an anxious or disinterested vendor.

25 I consider the Residex data unhelpful. Although developers are selling into the retail market they look ahead to supply and demand for their product in the future. Prices of developed residential lots are not a reliable guide for the purposes of the present exercise. Mr Wood's view of the general trend in the market for en globo residential land accords with the consistent observations by other valuers who assessed the site (Mr Hurst for the Council and Mr Maundrell for the Valuer-General) that land values had reduced significantly since 2003 and 2004, with a definite softening in the Kellyville area. For this reason, all other things being equal, sales at or close to the peak of the market will be far less reliable than sales at or close to the acquisition date.

26 Lot 38 sold in July 2003 as the market was rising towards the peak. It is on the same side of the road as lot 39 but, according to available information, did not suffer from the presence of vegetation or a creek. It was zoned 6(a) and, presumably, was sold or acquired on the basis of its underlying residential value. The sale shows $233 per m2.

27 Lot 42 sold initially in May 2004 only slightly after the peak. It is on the same side of the road as lot 39 but on slightly more elevated land (as Fyfe Road declines to a depression at the site). According to the available information, lot 42 had only minor vegetation present, being mostly cleared. No other development constraints are apparent. The initial sale shows $279 per m2.

28 Lot 46 sold in September 2004. It is on the same side of the road as lot 39 but at the high end near the intersection with Keirle Road. The parties referred to my assessment of this sale as unreliable in Almona Pty Ltd v Roads and Traffic Authority of New South Wales [2008] NSWLEC 112. Lot 46 involved a sale to Landcom of a strategic parcel essential for opening up other residential land. The price achieved on this sale ($345 per m2) is clearly out of line with the other sales to residential developers approaching or at the peak of the market. I remain of the view that this sale is unreliable.

29 Lot 27 sold in July 2005 after the peak. It is on the other side of the road from lot 39 at the intersection with Keirle Road. Hence, it is a good elevated corner block, superior to lot 39. The available information shows some affectation by vegetation and an area of open space land. The sale shows $247 per m2.

30 Lot 1077 is a about a third bigger than most of the sales in Fyfe Road and lot 39. It is located to the east of lot 39. It sold in June 2006 after the peak. The sale was from Landcom to the Department of Education for the purpose of a school. Although the sale was supported by a valuation a number of factors affect its reliability. The sale was direct from one government entity to another. The sale was for the purpose of a school involving no development risk for the Department. Landcom had provided roads to three frontages, all services to the site and paid all contributions under s 94 of the EPA Act. For these reasons I do not consider the sale of lot 1077 a reliable guide to the price that would have been achieved for en globo residential land at the acquisition date.

31 Lot 31 sold close to the acquisition date in December 2006. Lot 31 is diagonally opposite lot 39 on the high side of Fyfe Road and outside the depression in the road associated with the creek line. Lot 31 had CPW, significance category 2, present on it due to its potential (in 2002) for connection to the west and thence to the Second Ponds Creek area. However, the buyer and seller of lot 31 would have recognised at the sale date that any such potential had been removed by the residential zoning and dense residential development to the west. They would have seen the CPW on lot 31 as an isolated fragment most likely capable of wholesale clearing representing a minor risk only. Although the vegetation on lot 31 was identified as significance category 2 and on the site as category 3, the vegetation on lot 39 appears more dense and intact than that apparent on lot 31 before development. The creek and the required riparian corridor also burden lot 39 unlike lot 31.

32 I do not accept the submissions on behalf of Mr Bow that lot 31 would be seen as setting the least possible value for the constrained areas of lot 39. That analysis is artificial and unrealistic. Lot 31 is slightly superior to lot 39 in terms of location, markedly less constrained as it does not have a creek running across it, and had less intact vegetation in circumstances where its significance rating in 2002 could plainly not be justified as at the sale date. It is true that Mr Wood was wrong in asserting that lot 31 also had the benefit of development consent at the time of sale. It did not. But lot 31, overall, is a sale of superior land in close proximity to the acquisition date for $194 per m2.

33 Mr Phippen dismissed the sale of lot 31 as one that should be virtually ignored in his report but did not explain why in that document or the joint report. In oral evidence he said that lot 31 had been owned by the Catholic Church. The Church bought lot 31 for a school for about half the price it sold it for. Once the Department of Education bought lot 1077 for a school Mr Phippen surmised that the Church was happy to dispose of lot 31 at other than a market rate having doubled its money. This evidence supported the submission on behalf of Mr Bow that there was something wrong with the sale of lot 31 as it was out of line with the earlier sales.

34 I find Mr Phippen's evidence about lot 31 unpersuasive. The only objective basis for this opinion appears to be the difference in sale price achieved for lot 31 compared to (say) the earlier sales of lots 38, 42 and 27. However, there is no rational basis for assuming that the owner of lot 31 would have sold the land for less than could be achieved as at December 2006. The Church's alleged lack of continued need for lot 31 as a school suggests only that the Church was willing to dispose of the land. It does not suggest that the Church would be willing to do so for less than the land was in fact worth at the sale date. Moreover, there is other evidence (referred to above) suggesting a serious market decline leading up to the acquisition date. The sale of lot 31 is consistent with this other evidence. It follows that lot 31 is a reliable sale and evidence of a decline in the price for residential en globo land in Fyfe Road additional to the opinion evidence based on general market considerations referred to by Mr Wood (and also in the valuations of Mr Hurst and Mr Maundrell).

35 The later sales of lot 42 (a resale) and lot 30 cannot be considered in isolation. The same developer bought both lot 42 in May 2004 (for a sale price of $5.8 million or $279 per m2) and lot 30 in February 2002 (for $3.1 million or $142 per m2). The developer subsequently obtained development consents for 32 lots on lot 30 and 30 lots on lot 42. Lot 30 is on the other side of the road from lot 39, opposite lot 42. The available information shows lot 30 as mostly cleared with no other apparent development constraints. Lot 42 has already been described above. The developer sold lots 30 and 42 together (with the benefit of the development consents) in March 2007 for $8.175 million (or $192 per m2).

36 Mr Phippen considered that these sales too should be virtually ignored. He said that the developer had made a loss of over $2m on the sale of the combined sites and that a conversation with the developer's solicitor confirmed his opinion that the vendor of lots 30 and 42 in March 2007 was anxious to offload the land. Cross-examination of Mr Phippen about the conversation with the solicitor indicates that it cannot be relied on as a basis for Mr Phippen's opinions. The conversation was casual and in passing. The words attributed to the solicitor by Mr Phippen appear to represent Mr Phippen's views based on the circumstances of the sale rather than the solicitor's words. In any event the solicitor for the vendor is not the vendor and cannot be assumed to have knowledge of the vendor's sale motivations.

37 The objective evidence amounts to this. The vendor is a developer who would own and hold various parcels of en globo land for development in the ordinary course of business. The vendor bought lots 30 and 42 for a total amount of $8.9 million in 2002 and 2003. The vendor obtained development consents for both sites. The vendor sold both sites in a joint sale to a single buyer in March 2007 for $8.175 million. There was no agent on the sale and the contracts had a settlement period of less than one month. Counsel for Mr Bow submitted that this showed a distressed sale rather than the sale posited between a willing but not anxious buyer and seller posited by s 56(1)(a) of the Just Terms Compensation Act.

38 Mr Wood spoke to representatives of the vendor and purchaser of lots 30 and 42. The vendor said they were rationalising their holdings and the lots had been on the market for several months. The vendor said they had negotiated with several purchasers and sold at the market rate at the time. The purchaser also said that they were one of several potential purchasers. The purchaser's representative was also a real estate agent.

39 These facts do not support the hypothesis of a forced or distressed sale. The fact that a developer loses a substantial amount (probably over $1 million once sale and development costs are taken into account) does not of itself evidence a distressed sale. This is particularly so where the sale follows negotiations with a number of purchasers. Much may depend on the developer's longer-term plans and how it wishes to position itself in the market. The vendor's representative (its managing director) told Mr Wood that the vendor was rationalising its property interests.

40 That having been said I accept that the sales of lots 30 and 42 in March 2007 are not as reliable as the sale of lot 31 for a number of reasons. First, the properties had to be sold together (a requirement of the vendor) and thus the sale is twice as big as the other sales in Fyfe Road and lot 39. Secondly, the requirement to buy the properties together may have limited the market compared to other sites in Fyfe Road. Thirdly, the properties had the benefit of development consent. This suggests the sales are low compared to lot 31 (which sold without a consent in place at about the same rate).

41 Mr Wood relied on a sale at Vinegar Hill Road in February 2007 at a rate of $153 per m2 in support of his analysis. Although I accept his view that the land at Vinegar Hill is superior to lot 39 in terms of topography and ambience, Mr Wood had not looked at the tender or contract for sale. The terms of the tender are not known. The terms of the contract are quite complex involving a leaseback arrangement for a small part of the land and various restrictions on use. The sale also involved a much larger area than lot 39 (over 6 hectares). Without Mr Wood having examined the tender and contract to assess the effect of the tender and sale terms I do not think weight should be given to this sale.

42 For these reasons I consider lot 31 by far the most reliable sale. I consider lots 30 and 42 as sold in March 2007 helpful but probably on the low side given the circumstances referred to above. I do not think weight should be given to the sales of lots 1077 and 46. The sales of lots 38 and 42 between July 2003 and May 2004 are just before and after the peak of the market. They cannot be used to determine the value of lot 39 at the acquisition date without a material decrease to allow for the decline in the market. The sale of lot 27 is after the peak but still well before the sale date. Lot 27 is a corner block at the higher part of Fyfe Road and superior to lots 31 and 39.

43 When these matters are taken into account it is apparent that Mr Wood's value of $200 per m2 for developable land is liberal and resolves all doubts in favour of Mr Bow. Mr Phippen's value of $250 per m2 for developable land in Fyfe Road at the acquisition date is materially too high when all of these matters are considered. I have considered whether and what adjustment is required to deal with the presence of CPW, the need for works to the creek, and fill to raise part of lot 39 above the 1 in 100 year flood level. In determining this issue it must be kept in mind that the comparable sales have been analysed at a single rate by both valuers. The sales have not been divided into developable and non-developable areas despite the fact that some also contain CPW (albeit more confined in extent than lot 39). In other words the development risks inherent in the comparable sales have been captured by the single rates identified for each sale. In the case of lot 39, both valuers have identified the whole of the riparian corridor as non-developable thus having a far lesser value per m2 than the balance of lot 39. In these circumstances I consider that one relatively modest additional adjustment of $150,000 would be sufficient to capture the risks and potential costs associated with lot 39 that do not affect or do not affect to the same extent the comparable sales. This approach recognises these issues but resolves genuine doubts about their significance in Mr Bow's favour.

44 Mr Wood analysed sales of land to public authorities to deduce an initial rate for the land within the riparian corridor of $68.50 per m2. Subsequently Mr Wood indicated that this rate could be increased to $70 or $80 per m2 without the value being unreasonable. Mr Phippen noted that Mr Wood's sales were in fact compulsory acquisitions. Mr Phippen thought that the range was $85 to $100 per m2 for such land. Sales to developers of sites with land affected by some similar constraint would have been helpful but none were identified. Both assessments appear to involve a large subjective element. Resolving all doubts in Mr Bow's favour I adopt the rate of $85 per m2 for the riparian corridor having regard to a number of factors. First, the evidence indicates that the riparian corridor will need to be rehabilitated and restored but no specific allowance has been made for the cost of the restoration works. Secondly, I consider the rate of $200 per m2 for the land outside the corridor at the uppermost end of the range for lot 39 having regard to the sale price for, and characteristics of, lot 31 compared to lot 39. Thirdly, and nevertheless, I accept that the restored riparian corridor may well provide a level of amenity to future development on lot 39 not enjoyed by the comparable sales. For these reasons a rate above that proposed by Mr Wood, but at the bottom end of Mr Phippen's range, is appropriate.

45 These conclusions lead to the following assessment of compensation in accordance with the Just Terms Compensation Act:

14,807m2 @ $200 per m2 $2,961,400 6,453m2 @ $85 per m2 $548,505 Agreed disturbance $35,723.73 Less $150,000 for CPW clearing and other development risks ($150,000) Total $3,395,628.70

46 For these reasons I determine Mr Bow's claim for compensation on the acquisition of lot 39 in deposited plan 208727 at Fyfe Road, Blacktown in the amount of $3,395,628.70. The exhibits may be returned.

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