The assumed or underlying zoning of the acquired land
93The parties, through the evidence of their respective planning consultants, have not agreed upon the assumed or underlying zoning for Lot 1 at the date of acquisition. For their part, Mr and Mrs Davies contend that the underlying zoning is that propounded by Mr Grech. In his statement of evidence and in the report jointly prepared with Mr Rowan, Mr Grech opined that from its western boundary to the western bank of Strangers Creek, the underlying zone of Lot 1 is the same as that which, in fact, pertained to the western section of Lot 2, namely Residential 2(a2). From the western bank of the creek to the eastern boundary of Lot 1, Mr Grech is of the opinion that the zoning would be Open Space 6(a).
94For his part, Mr Rowan has expressed his opinion as to the underlying zoning in different terms at different times. In his statement of evidence, Mr Rowan contended that Lot 1 would have been zoned Rural 1(a) under the provisions of the 2005 LEP. In the statement jointly prepared with Mr Grech, Mr Rowan advanced an alternative and more restrictive zoning. He advanced the possibility of an underlying hybrid zone with objectives consistent with those applicable to the Special Uses 5(a) zone and permissible land uses similar to those provided for in the Special Uses 5(c) (Trunk Drainage and Conservation) Zone.
95In considering the debate between the planning consultants, it is important to note matters upon which they agreed in their joint statement of evidence under the rubric of "underlying zoning". They agreed that as at April 2006 "or thereabouts" the Balmoral Road Release Area would have been rezoned for residential purposes. They also agreed upon the effect of the report prepared by Council officers in 1991 directed to progress of rezoning of land within the RHDA for urban purposes which, it will be remembered, then contemplated inclusion of the Balmoral Road Release Area. Their agreement as to the implications of those reports is expressed as follows:
"(a) The report of 21 January 1991, after agreement of [Sydney Water] to acquire land for trunk drainage, and to manage future trunk drainage, indicates that land affected by the 100 year flood would be zoned in three ways: land required for trunk drainage to be acquired by Sydney Water and the remainder of the land zoned Open Space or retained under private ownership.
(b) The report of 24 January 1991 after agreement of [Sydney Water] to acquire land for trunk drainage, and to manage future trunk drainage, indicates that land affected by the 100 year flood would be zoned in three ways: land required for trunk drainage would be zoned Special Uses 5(a) Trunk Drainage to be acquired by Sydney Water and the remainder of the land to be zoned Open Space 6(a) or [under private ownership] zoned in accordance with the adjoining zone but subject to restrictions.
(c) The rezoning of the BRRA in 2006 did include instances of land not required for trunk drainage purposes but affected by the rural (i.e. urban development) 100 year flood extent being zoned within an urban residential zone."
96The expression of Mr Rowan's alternate statement of underlying zoning emerges from the options for underlying zoning expressed as "scenarios" in the joint statement. Those alternatives are expressed to be:
"Scenario 1: The 5(a) zoned land would have been Zone 1(a) Rural (or similar trunk drainage specific zone) accompanied by the same zone objectives as exist for the Zone 5(a); with permissible land uses similar to Zone 5(c); but without an acquisition clause.
Scenario 2: The site remains zoned 1(a) Rural under BLEP 2005 with controls as applying to that zone.
Scenario 3: the 5(a) zoned land being absorbed into the adjoining Residential 2(b1) [sic] zone but with restrictions as contained within the current LEP or zoned 6(a) Public Open Space and acquired by Council."
Subsequent to the tender of the joint statement, reference to the Residential 2(b1) zone in 'Senario 3' was amended to be a reference to the Residential 2(a2) zone.
97The agreement between the planners as to the Council's position in 1991 can readily be accepted. Relevantly, the position then advanced was that land not required for trunk drainage and which remained in private ownership would assume the zoning of adjoining land. As was also apparent from the position then expressed, if privately owned land had previously been zoned for rural purposes and was land not required by Sydney Water for trunk drainage purposes, resulting in that land assuming the zoning of adjoining land, so much of it as was below the 1:100 year flood level would be subject to such controls as applied to flood liable land.
98That concept saw refinement in the development of the strategy for release of the Balmoral Road Release Area. The notion of a riparian corridor was the subject of the Council's advertised strategy, following preparation of the local environmental study which preceded preparation of the 2005 draft local environmental plan. In a report to which I have earlier referred, prepared for a meeting of the Council on 28 October 2003, reference was made to the Council's riparian corridor strategy in the following terms:
"Although DIPNR has given in-principle support to Council's riparian corridor strategy, final endorsement will require the resolution of the long-term maintenance and conservation strategy to be required of land owners, including Sydney Water.
Meetings are continuing between Council, DIPNR and Sydney Water to come to agreement on this issue."
99Subsequently, as I have also recorded, submissions made in response to the draft local environmental plan that had indicated proposed riparian corridor zones were considered. As a result of those submissions it was concluded that along the two watercourses within the Balmoral Road Release Area, the riparian corridor should be reduced to 40m in width. That same report also recorded that a contributions plan under s 94 of the EPA Act would "not provide a viable mechanism to acquire land within riparian corridors unless the land can be shown to contribute to public recreation needs."
100There is a further matter that needs to be noticed. I have earlier referred to the development consent granted by the Council in December 2004 for the construction of Basin 31 to be constructed as part of the trunk drainage scheme for Sydney Water. This Basin was to be constructed by RH 3, the nominee of RHIC. Basin 31 was to be located north-west of Lot 57 on land that also had frontage to Arnold Avenue.
101In February 2005, RH 3 wrote to the then Department of Infrastructure, Planning and Natural Resources (DIPNR), seeking approval to reduce the width of the creek tributary that led to the proposed Basin 31. The proposal by RH 3 was that the creek be reformed to provide a drainage channel of 17m in width. The proposal was made on the basis that the revised draft of the local environmental plan for the Balmoral Road Release Area had removed the intention to zone riparian corridors in this location.
102DIPNR refused this request. It did so in a letter dated 3 May 2005 in which it referred to the Balmoral Road Release Area Draft LEP as proposing an amendment to cl 25 of the 2005 LEP by inserting subclause (2). That amendment would have the effect of restricting development within 20 metres of the centre line of the creek. The letter continued:
"These provisions imply, in the Department's view, that the creek lines will be preserved. While the zoning provisions don't specify a 'riparian' corridor, the potential for it to function as one has not been extinguished.
While the Department recognises that the naturalness of the water course in the release area has been severely compromised by past developments, it does have policy objectives that seek to preserve and restore the natural qualities as much as possible within the context of urban development. These objectives have been consistently introduced into the extensive consultations for the development of the LEP and the infrastructure proposals. In coming to agreed positions the Department has made concessions in terms of riparian widths, engineering aspects of water infrastructure, an on-line detention basin, etc. In exchange it expects that the areas remaining for riparian functions and natural amenity generally, are rehabilitated and landscaped to a very high standard, and are not diminished by fragmentation, encroachments and edge effects."
103RH 3 responded by acknowledging that a 40m corridor would be maintained for the creek that feeds into proposed Basin 31. In its letter, RH3 stated that as the 1:100 year urban flood would be outside the 40m area, "it will be necessary to fill and shape the surrounding land to contain the urban flows to within the 40m corridor." In short, RH 3 sought the sanction of DIPNR to reshape the creek within the 1:100 year urban flood level and then to fill to the 40m line.
104On 17 June 2005, DIPNR responded in the following terms:
"I refer to your letter of 30 May 2005 in which you agree to adopt a 40m riparian zone corridor for the lateral trunk drainage between Arnold Avenue and the proposed Detention Basin no. 31.
Your proposal to fill and shape the surrounding land to accommodate the 1:100 ARI (and plant the corridor according to the Landscape Rehabilitation and Restoration Plan) is acceptable to the Department."
105It is against this background of consideration both by the Council and the Department that Amendment 5 came to be made as an amending planning instrument. Land that was affected by the 1:100 year flood but not required by Sydney Water was rezoned from Rural 1(a). That rezoning is exemplified by what occurred in respect of Lot 57. As I have earlier indicated, part of the western section of Lot 2 that was rezoned as Residential 2(a2) was below the 1:100 year flood line, as determined in both a predevelopment and also a post development state.
106The only provision of the LEP that seeks to control development on land by reference to the 1:100 year flood line is cl 23 (earlier quoted at [15]). That clause does not, in terms, prohibit development on land so affected. Certainly, it is the case that development on land so affected can neither qualify as exempt development (cl 8) nor as complying development (cl 9). However, those clauses simply result in any development proposed for such land necessitating the grant of development consent in accordance with cl 23.
107However, the provisions of Amendment 5 do address additional controls upon development proposed for land in proximity to a creek. The first of those amendments was the introduction of a new clause 18A which is in the following terms:
"18A Subdivision of land in Zone 2(b1)
(1) Land within Zone 2(b1) must not be subdivided to create an allotment to be used for residential purposes unless the allotment has an area not less than the minimum area, which is 700m2.
(2) Despite subclause (1) if an allotment is to include land within 20 metres of the centre line of a creek (the creek being identified as trunk drainage on the map) the minimum area of that allotment is 700m2 in addition to any area of that allotment that is within 20m of the centre line of the creek."
108The second amendment of relevance introduced by Amendment 5 was the addition of subclause (2) to cl 25. That subclause has earlier been quoted at [17].
109The only other provision of the 2005 LEP that needs to be noticed is cl 45. That clause was neither introduced by nor or amended by Amendment 5. The clause relevantly provides that consent must not be granted -
" ... for the erection of a building, the carrying out of a work or a change of building use unless the consent authority is satisfied that adequate arrangements have been made for any provision or augmentation of the following that will be needed because of the carrying out of the proposed development:
(a) ... drainage services,
... ".
110The matters that I have identified as being the background against which Amendment 5 was made, together with the provisions of the 2005 LEP and the manner in which those provisions were amended or supplemented by Amendment 5, add support to the general submission made by Mr and Mrs Davies that the underlying zoning of Lot 1 should be that which reflects the zoning of adjoining land. Specifically, those matters support the underlying zoning reflected in 'Scenario 3' formulated by the consultant planners.
111As I have earlier recorded, Mr Grech expressed the opinion that the underlying zoning of 6(a) Open Space would apply to that part of Lot 1 that is east of the western bank of Strangers Creek. The zoning imposed by Amendment 5 provided that the part of Lot 2 immediately adjoining Lot 1 to the north-east was zoned 6(a) Open Space while the balance of the adjoining land was zoned Residential 2(b1). Mr Grech contends for the Open Space strip east of the Creek on the basis that it provides land to fulfil a trunk drainage function and also provide access pathways conformably with the development control plan that was being prepared in conjunction with the draft local environmental plan that ultimately became Amendment 5. The draft development control plan was the subject of report and recommendations to the Council on 20 July 2004. The development control plan ultimately adopted for the Balmoral Road Release Area in January 2007 identified a proposed road adjoining the eastern boundary of Lot 1 before veering to the north-east so as to form the eastern boundary of the area zoned as Open Space. The path or cycleway suggested by Mr Grech as being within the underlying 6(a) zoning east of Strangers Creek would be a path or cycleway adjoining the road proposed in the development control plan.
112As it happens, the precise identification of zoning for the land east of Strangers Creek within Lot 1 is unimportant for the ultimate determination of market value. This is because of agreement reached between the valuers retained by the parties as to the value that should be attributed to this part of the acquired site.
113For his part, Mr Rowan identifies 'Scenario 1' as the most appropriate expression of the underlying zoning. Although his alternate position is reflected in 'Scenario 2', he does not favour that position because, in his opinion, it would create a false expectation for future development of land so zoned.
114Mr Rowan's opinion is founded upon statements in various reports directed both to flood liable land and drainage dating back to the mid 1980s. He refers to the regional environmental study prepared as the precursor to SREP 19 in which Government policy of discouraging development within the area below the 1:100 year flood level was identified. That statement is then linked with the 1986 Flood Plain Manual and Flood Prone Land Policy in which it is stated:
"Rezoning to minimise exposure to flood losses is readily applicable where there is little or no expectations, demands or rights for development such as in rural areas. In general, Councils should maintain existing low development zones over land liable to significant flooding and adopt development strategies which avoid any expectations or demands for development on flood liable land."
115Reliance upon such a statement does, however, need to be balanced against other statements appearing in that Policy. In Appendix D in which flood plain management measures are addressed, reference is made to the zoning of land. In that context, the following statement appears:
"The Flood Policy does not, however, support the use of zoning to unjustifiably restrict development simply because land is flood liable. Zones over flood liable land should be based on an objective assessment of hazard and environmental and other factors, ... ".
116Factors then identified in the Policy require consideration both of the hazard or floodway category and also consideration of existing planning controls. There is no evidence to suggest that in the section of Strangers Creek between Memorial Avenue and Windsor Road, the flood affected land is in the high hazard category. Indeed, the description earlier given of flooding in the 1:100 year flood event as being of shallow depth and low flow would, in the context of the descriptors used in the 1986 Flood Plan Manual, speak against categorisation as "high hazard". In that circumstance, the Policy would not require a Rural 1(a) zoning in order to control development on flood liable land where the flood risk was of the kind applicable to Lot 57.
117In support of his opinion, Mr Rowan also referred to the Kinhill Study of 1989 in which the author is said to express an approach of retaining water courses in their natural condition, where possible, throughout the RHDA. While that was a generally expressed concept, consideration of the Kinhill strategy does indicate modification to creeks and drainage channels in a manner to which I have earlier referred. So far as it is relevant to consideration of the underlying zoning, Mr Rowan acknowledged that the land identified in the Council's draft local environmental plan of 1990 as being zoned Rural 1(a) was land required to implement the Kinhill scheme and was not zoned to identify land below the 1:100 year flood level.
118The subsequent "refinement" of the Kinhill strategy was acknowledged by Mr Rowan. Nonetheless, he properly identified, from the various reports to which reference was made, the need for both trunk drainage and the control on development below the 1:100 year flood level. The Council's adoption of the 2004 strategy which identified riparian zones is said to be a manifestation of the need for the latter control.
119Some change in approach on behalf of the Council and, presumably the Department of Planning, is acknowledged by Mr Rowan by reference to the adopted drainage strategy referred to as water sensitive urban design. Essentially, this involved an approach to elements of urban subdivision design that sought to address the quality of run-off, with the rate of discharge controlled through detention basins. The provision of drainage basins is proposed to have the effect of returning flows in major drainage lines or creeks to their pre-development levels, so preserving the quality of creek lines and their respective ecosystems. This approach to local and trunk drainage was addressed in the 2001 GHD Report in which Strategy 4 is identified as the preferred option. It would appear to be this option or a further refinement of it that has subsequently been implemented.
120Finally, Mr Rowan identified the formulation by the Council of the development control plan concurrently with the preparation of the draft local environmental plan for the Balmoral Road Release Area in addressing his hypothesis as to the underlying zoning. Clause 7.1(a) of the Development Control Plan provides that no residential, employment or commercial development should occur below the "estimated" 1:100 year flood level "as identified on the development control plan map as trunk drainage land." However, this provision may not be an accurate reflection of the Council's intentions. There are a number of reasons for saying this:
(i) If the control was intended to be absolute, one might have expected it to be included in the local environmental plan itself. It is not. As I have earlier identified, the only provision of the planning instrument directed to the 1:100 year flood is cl 23 which necessitates the grant of development consent for development on land so affected and identifies those matters to be taken into account when determining a development application for flood affected land.
(ii) The land identified on the development control plan map as "trunk drainage land" is the same land that is zoned Special Uses 5(a) for trunk drainage on the map to Amendment 5. As the evidence otherwise indicates, the land so zoned does not in fact correspond with the boundaries of land affected by the 1:100 year flood either in the pre-development or post development state of the area.
(iii) While the purpose of the development control provision was clearly directed to preserving land below the 1:100 year flood level for trunk drainage, other provisions within cl 7.1 of the Development Control Plan indicate that the flood line, as applied on a property by property basis, was not necessarily reflected in the development control plan map. So much is apparent from paragraphs (j) and (k) which identify a mechanism for determination of the "inundation line" other than by reference to the map.
121Having considered the competing positions taken by the consultant planners, I prefer the opinion expressed by Mr Grech and essentially for the reasons he has given. Both parties accept that in imposing planning controls upon Lot 57, those controls would impose limitations upon development within the creek corridor. As controls evolved in respect of that corridor, culminating in cl 25 of the 2005 LEP, that corridor has a width of 40m. If I understand correctly the evidence given by Mr Grech, this corridor would accommodate not only the width of Strangers Creek but would also accommodate the provision of trunk drainage for development of Lot 57. Thus the controls upon permissible development conformably with the adjoining residential zones extend beyond those controls contained in the land use table for those zones. By use of those additional controls, the Council could provide for trunk drainage as well as limit development upon flood liable land by determining any proposed development on merit. That approach would accord with the 2001 Flood Plain Manual.
122It is noteworthy that following the making of Amendment 5, no land within the Balmoral Road Release Area retained a Rural 1(a) zoning. Moreover, those sections of zoning maps which are in evidence and that pertain to urban land surrounding the Balmoral Road Release Area do not reveal any land upon which a Rural 1(a) zone is maintained. No example was given by Mr Rowan of any land within urban release areas that had retained a rural zoning. In a similar position is the hybrid zone, identified as 'Scenario 1' in the joint report prepared by the town planning consultants. That is the underlying zone favoured by Mr Rowan. It is a zone which in the objectives and land use controls which he posits, finds no expression in any planning instrument that he was able to identify.
123In the result, I have concluded that the land within Lot 1 from the western bank of Strangers Creek to the western boundary of that Lot has an underlying zoning of Residential 2(a2) under the provisions of the 2005 LEP. As would be apparent from what I have written, land use would not only be subject to the restrictions imposed by the land use table for that zone but, relevantly for present purposes, also the controls imposed by cll 23, 25 and 45 in the form which that planning instrument took following the making of Amendment 5.
124In making this finding as to underlying zoning, I acknowledge that it differs from that made by Pain J in Caruso v Sydney Water Corporation at [48] as to the underlying zoning of the land considered in that case which was also affected by the Special Uses 5(a) zone intended for trunk drainage. The land to which her Honour's decision relates is located north-west of Lot 57. My determination also differs, in part, from that made by Jagot J in Cassidy v Sydney Water Corporation at [92]. In Caruso her Honour determined that the whole of the 5(a) land would have been zoned Rural 1(a), while in Cassidy, half of the 5(a) land was determined to have had a Rural 1(a) underlying zoning.
125While due deference must be paid to those decisions, self-evidently they were made on the basis of the evidence tendered in those proceedings and the submissions made in respect of that evidence by the legal representatives for the parties. I apprehend that in the present case both the evidence and submissions differ from that which was considered in each of those cases. There were important agreements recorded in the joint statement prepared by the consultant planners in the present case, being agreements of fact that are not evident from the reasons for judgment stated in the earlier cases. These agreements were:
(i) that "drainage (water management in general) was an issue required to be addressed in the planning of the [Balmoral Road Release Area]"; and
(ii) that as at April 2006 the Balmoral Road Release Area would have been rezoned for urban purposes.
Nothing in the evidence before me indicates that the agreement on these matters should be not accepted.
126There are two further matters of factual difference from those facts which appear to have been found and upon which reliance was placed in the earlier decisions. First, there was no evidence before me of any particular trunk drainage strategy adopted by the Council for, or relating to, Lot 57. The finding in the earlier decisions that the Council had adopted a drainage strategy seems to have been based upon the draft report prepared within the offices of the Council in October 2001 (Cassidy at [29]). Whatever evidence may have been before the Court in the earlier cases concerning that report, there was no evidence before me of any decision of the Council to adopt a strategy at that time.
127Second, the evidence before me discloses that in respect of Lot 57, it was not intended to retain that part of it which was within the 1:100 year flood level as non-urban land. As I have already demonstrated, part of the Lot so affected was zoned Residential 2(a2) upon the making of Amendment 5.
128The need to provide for trunk drainage in the Balmoral Road Release Area is accepted by me as the long held policy of all relevant authorities. However, focus upon the provisions of the 2005 LEP, as amended by Amendment 5, particularly those provisions contained in cll 18A, 23, 25 and 45 did, to my mind, operate to restrict development within (relevantly) the Stranger's Creek Corridor such that drainage, including trunk drainage, could be accommodated without the necessity to impose a non-urban zone. The affect which these particular provisions of the 2005 LEP had upon the determination of underlying zoning received an emphasis in the present case which differs from that which appears to have been accorded to them in the earlier decisions. For my part, they are significant when considering the debate as to the perceived purpose of retaining a Rural 1(a) zoning.
129Notwithstanding the determination I have made as to the underlying zoning of Lot 57, the particular provisions of the 2005 LEP to which I have drawn attention will, at least in principle, have an impact upon the market value of land which by reason of its location and flood potential will engage the operation of those provisions. Whether this significantly impacts upon market value when compared to the value of land that retained a Rural 1(a) zoning under that LEP will be considered in due course.
130In determining the underlying zoning as I have, I do not overlook the s 117 Direction relating to flood liable land. That Direction retained the discretion of the Minister to make a determination in respect of a local environmental plan which was not consistent with the primary provisions of the Direction. That is what he did in the present case when part of Lot 57 that was below the 1:100 year flood line was rezoned for residential purposes.