Goldmate Property Luddenham No. 1 Pty Ltd v Transport for NSW

Competing amounts contended for determination of compensation

1. By the completion of the hearing, the parties remained in disagreement as to the determination of the quantum of compensation.
2. The Applicant contended that it was entitled to compensation in the amount of $55,636,727.59, comprising: 1. Market value and severance - $55,437,200; and 2. Disturbance - $199,527.59.
3. The Respondent contended that the Applicant was entitled to compensation in the amount of $4,138,179.78, comprising: 1. Market Value and severance - $4,000,200; and 2. Disturbance - $137,979.78.

Legislative provisions

1. The relevant provisions of the Just Terms Act upon which the parties relied are: 4 Definitions (1) In this Act - public purpose means any purpose for which land may by law be acquired by compulsory process under this Act. 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division) - (a) the market value of the land on the date of its acquisition, … (f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. 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 …
2. The relevant provisions of the Roads Act are: 177 Power to acquire land generally (1) The Minister, TfNSW or a council may acquire land for any of the purposes of this Act. (2) Without limiting subsection (1), the Minister, TfNSW or a council may acquire - (a) land that is to be made available for any public purpose for which it is reserved or zoned under an environmental planning instrument, or (b) land that forms part of, or adjoins or lies in the vicinity of, other land proposed to be acquired for the purpose of opening, widening or constructing a road or road work. (3) Without limiting subsection (1), TfNSW may also acquire land that it proposed to declare to be TfNSW development land.

Issues for determination

1. The issues that arise for determination are: 1. What was the public purpose for which the Acquired Land was acquired? 2. Did the public purpose cause an increase or decrease in the value of the Acquired Land? If so, is the increase or decrease to be disregarded pursuant to s 56(1)(a) of the Just Terms Act? 3. On what basis is the Acquired Land to be valued? 4. What is the determination of the value of the Acquired Land? 5. Was there any increase or decrease in the value of other land by reason of the public purpose pursuant to s 55(f) of the Just Terms Act? 6. What is the quantum of the claim for disturbance to which the Applicant is entitled?

What was the public purpose for which the Acquired Land was acquired?

Upon what principles was the public purpose to be determined?

1. The manner in which a dispute as to the identification of the public purpose is to be resolved has been considered in a number of authorities. The general settled principles to be discerned from those authorities can be summarised as: 1. In identifying the public purpose for which the land was acquired, it is the public purpose of the acquiring authority which is relevant: Coffs Harbour City Council v Noubia Pty Ltd [2024] NSWCA 19 (Noubia) at [61]; 2. In determining what increase or decrease in value occurs "by reason of" or is "caused by" the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, it is first necessary to identify the public purpose and its relevant scope or generality: AMP Capital Investors Ltd and Another v Transport Infrastructure Development Corporation (2008) 163 LGERA 245 (AMP) at [96]; 3. Once the public purpose is identified, it may then be necessary to identify what is comprehended by "the proposal to carry it out" and/or "the carrying out of" the purpose. If so, it may be necessary to identify the scope of what occurs "by reason of" or is "caused by" these things: AMP at [96]; 4. There are no "clear rules" determining how the relevant public purpose at the appropriate level of generality is to be determined. Factors to be taken into account may include the degree of continuity and consistency of various elements of what is proposed and done, and fairness to both the claimant and the acquiring authority: Noubia at [62]-[63]; 5. In addressing fairness to both the claimant and the acquiring authority the legislative purpose of the Just Terms Act is important. Section 3(1) sets out the objects of the Act, which include the following: 1. to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will be not less than the market value of the land (unaffected by the proposal) at the date of acquisition, and 2. to ensure compensation on just terms for the owners of land that is acquired by an authority of the State when the land is not available for public sale… see Noubia at [64]; 1. When interpreting s 56(1)(a) of the Just Terms Act, the Pointe Gourde principle has little, if any, application. The statutory language of s 56(1)(a) must be applied on its own terms: Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259 (Walker) at [45]. It follows that earlier decisions in this Court which applied the Pointe Gourde principle should be approached with considerable caution: Noubia at [66]; 2. The proposition drawn from Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196 that an "indirect relationship", where the maintenance of the planning restriction by the Council was seen as a "step in the process of resumption" was a sufficient causal connection, does not apply to s 56(1)(a) of the Just Terms Act given that a direct causal connection was required: Walker at [53]-[54]. See also RD Miller Pty Ltd v Roads and Maritime Services NSW (2020) 103 NSWLR 234 at 270; 3. The mere circumstance that the public purpose is a contributing factor to changes which in turn affect value is not necessarily sufficient, particularly if the changes depend also on discretionary decisions made by other authorities: AMP at [99]; and 4. The causal question needs to be directed to the effects on the value of the land of the carrying out, or proposal to carry out the public purpose, not to the effects of the proposed acquisition of the particular land: Sydney Metro v G & J Drivas Pty Ltd [2024] NSWCA 5 at [39] (Drivas).
2. Taking into account those principles, I do not accept the Applicant's submission that the determination of the relevant public purpose is limited to the identified purpose for which a power to acquire has been conferred by legislation, in this case the power to acquire conferred upon the Respondent pursuant to s 177 of the Roads Act, and/or identified in the PAN given for a particular acquisition.
3. The Applicant's submission turns upon a construction of the defined term "public purpose" in s 4 of the Just Terms Act (recited above at [17].
4. In order to accept the Applicant's construction, it is necessary to infer that the definition of a "public purpose" can only exist within the bounds of the particular rights to lawfully compulsorily acquire land by a single acquiring entity. That is, that the scope of the public purpose is limited to the lawful scope of the powers of acquisition of the particular acquiring authority. This limitation should not be inferred from the words of the definition as no part of the definition refers to the particular acquiring authority. As a consequence, the public purpose, provided it is one at law that could permit the compulsory acquisition of land, is not limited to the mechanism by which the land is acquired, but to the object to be achieved by the carrying out of the action of compulsory acquisition.
5. Further, the reference to the public purpose in the Just Terms Act identifies the purpose of the acquisition. Considering the natural meaning of that word it is directed to an analysis of what is the intended or desired result, end or aim of the acquisition (see Macquarie Dictionary, 3rd ed (1997). The use of the limitation whereby such purpose is a "public" purpose does not alter the meaning of the phrase. The reference to the purpose being one that is a "public" purpose is a recognition that the acquisition of land pursuant to the Just Terms Act is limited to compulsory acquisition which, of itself, may only be carried out for a purpose that serves the public and not the private interests of an acquiring authority.
6. It follows that if, as a matter of fact, the public purpose is a composite purpose which to give effect to a number of authorities must act in concert to achieve the purpose, then the public purpose is not limited to the scope of influence of a particular acquiring authority. As was identified in Barkat v Roads and Maritime Services [2019] NSWCA 240 (Barkat) at [84]-[85]: 84 The primary judge referred to the submissions made on behalf of Mr & Mrs Barkat that relied in part on Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [28] (Walker's Case). His Honour referred to the contention on behalf of Mr & Mrs Barkat that any decision to rezone the Underwood Land would be made by government entities other than RMS, such that it was impossible to conclude that there would be any link between the rezoning from R3 to R4 because of the WestConnex Project. His Honour considered that the interrelationship between the authorities and their respective responsibilities in Walker's Case revealed a situation starkly different from the factual situation in the present case. His Honour distinguished Walker's Case on the basis that the nexus between the non-acquiring Council's anterior discussions and agitations and the Authority's eventual public purpose acquisition was not capable of being characterised as an integrated proposal. In contradistinction, his Honour said, there was no doubt that the WestConnex Project was specifically designed to be the catalyst for much more than a road development scheme in that it was purposely an urban renewal project from the outset, interfacing with the draft PRUTS involving an integrated project team including the WestConnex Delivery Authority, RMS, the Department of Planning and Environment, Strathfield Council and others. Accordingly, his Honour concluded, it is not necessary for RMS to be the rezoning authority but it was sufficient for its WestConnex Project to be the intended catalyst for predicting urban renewal and associated rezoning that would most likely follow. They were all interrelated components of the same public purpose. 85 There was no error on the part of the primary judge in distinguishing the authorities relied upon by Mr & Mrs Barkat. They do not point to any error of law on the part of his Honour. Whether it might have been possible to come to a different conclusion is not the point. The conclusion that the acquisition of the Underwood Land was for a purpose intrinsically connected with the draft PRUTS was open on the material and did not constitute an error of law.
7. Such an approach was also identified in Roads and Traffic Authority v Perry (2001) 52 NSWLR 222 (Perry) at [65]: The particular purposes, in the sense of the uses to which particular land will be put, do not exclude the wider public purpose to be served by the acquisition. If so it is this wider public purpose, scheme or project which underlay the acquisition, which governs the operation of s 56(1)(a).
8. The Applicant placed emphasis in the language used in recent decisions of the Court of Appeal in Noubia and Drivas, wherein the stated focus of those decisions emphasised that the relevant public purpose was to be confined to the purpose of "the resuming authority": Drivas at [38]-[39] and Noubia at [61], [64]-[65]. Whilst I accept that the language of these decisions is in a singular grammatical form relating to the acquiring authority, I do not take those decisions to be establishing a principle that the determination of the public purpose must, as a matter of construction, be so limited in all circumstances. Neither Noubia nor Drivas required the determination of such questions as in each of those cases, the public purpose was agreed and limited to a purpose that was to be fulfilled by a single acquiring authority. Further, in order to read the decisions in the way contended by the Applicant requires me to read them in a manner inconsistent with the decisions of Perry, Barkat and Walker which, as a matter of principle, contemplate circumstances in which a public purpose may be broader and more complex than that for which the acquiring authority could perform. As none of those authorities were addressed in Noubia or Drivas in that context, I cannot apply them as establishing a principle that is in contest with Perry, Barkat or Walker, without there being some reasons expressed in those decisions that would warrant such application.
9. Accordingly, whether the public purpose is limited to the particular powers of the acquiring authority or a broader purpose is a question of fact and in turn context and not a matter of general principle.

Upon the consideration of the facts in this case, what was the public purpose?

1. The Acquired Land was, at the Date of Acquisition, zoned ENT pursuant to the SEPP Aerotropolis.
2. The dispute turned upon whether I should find a narrow or a broad public purpose.
3. The Applicant contended for a narrow public purpose that was limited solely to the construction, operation and maintenance of the M12. This narrow characterisation was contended for on the basis of the description used in the notices relating to the acquisition and the nature and scope of the power of acquisition conferred on TfNSW by s 177 of the Roads Act. It was further contended that the evidence in this case did not permit a finding of a broad public purpose as the announcement of the WSA, the Western Sydney Infrastructure Plan (WSIP) and the Western Sydney Aerotropolis Land Use and Infrastructure Implementation Plan (LUIIP) each related to infrastructure only, of which the M12 was the primary infrastructure project.
4. The Respondent contended for a broader identification of public purpose as: 1. The public purpose was that of the NSW Government and included not only the WSIP, but also the rezonings of relevant areas for urban purposes (among other initiatives), as part of a coordinated State Government response to the announcement of the WSA in 2014 and continuing. In delivering the component which is the WSIP, TfNSW was merely the vehicle used by the NSW Government for that part of the overall purpose. As the rezonings were part of the public purpose the effect on land values is direct and must be disregarded; or 2. Alternatively, the public purpose is that of TfNSW. However, in this scenario TfNSW had adopted the purpose of the State Government. Its public purpose can therefore be characterised as the purpose to effectuate the State Government's overarching purpose within its range of competence; 3. If, in the further alternative, TfNSW's purpose comprises only the WSIP without reference to the State's overarching purpose but for the WSIP, the rezonings would not have taken place. The effect of the public purpose on values is indirect, but nevertheless within that which must be disregarded under s 56(1)(a) of the Just Terms Act.
5. The determination of the scope of the public purpose arises in this case as one of the primary disputes of the parties as to whether the market value should be determined on the basis of the ENT zoning or whether the ENT zoning was a matter that engaged the statutory disregard in s 56(1)(a) of the Just Terms Act for the purposes of determining market value. That is, was the ENT zoning caused by the carrying out of, or the proposal to carry out, the public purpose, for which the land was acquired?
6. To aid in the determination of the public purpose the parties tendered voluminous documentary evidence, including: 1. The history of the Badgery's Creek Airport commencing in 1974 and concluding in 2022 when the acquisition took place; 2. The planning history of the locality in which the Acquired Land was located and indicated the planning policies relating to the potential of the Acquired Land to be rezoned from RU2 to a higher value zoning absent the WSA and/or the M12; 3. The actions of the Commonwealth and State Governments at the time of the announcement of the WSA and subsequent actions; 4. Identifying the transport planning of the locality including the Acquired Land; and 5. The Environmental Impact Statement (EIS) and approval of the M12 and the documents supporting the approval.
7. In addition, each party also adduced expert evidence from their respective town planners: Mr Haskew for the Applicant and Mr Mitchell for the Respondent. The town planners considered the relevant history and expressed opinions as to the public purpose and whether the zoning of the land as at the Date of Acquisition was caused by the public purpose. The town planners differed in their opinions as to the public purpose and effects of the implementation of that purpose.
8. Notwithstanding the adducing of evidence from the town planners, the parties accepted that the determination of the public purpose was a matter for judicial determination. However, each party relied upon their respective experts as providing the factual basis for their submissions.
9. The facts to which I have been directed show that there has been a long history (spanning many decades) in the development of an airport in Western Sydney. That evidence discloses that the main hurdle to the creation of such an airport was political will and funding. The creation of an airport in Western Sydney required collaboration, or at the least cooperation, between the Commonwealth and State Governments to bring about its fruition. That did not occur until 2014 when on 15 April 2014, the Commonwealth and State Governments jointly announced the creation of the WSA. At the announcement the then Prime Minister Mr Tony Abbott stated in his press release: The Commonwealth and New South Wales Governments are delivering on our shared plan to build a stronger and more prosperous Western Sydney by investing more than $1 billion over the forward estimates and $3.5 billion over 10 years in major infrastructure upgrades that will transform the region's economy. The new plan involves transport links to capitalise on the economic gains from developing an airport at Badgerys Creek. This will boost the local economy of Western Sydney, making it an even better place to live and do business. The Australian and NSW Governments will jointly fund the road infrastructure plan through an 80/20 funding split. The people of Western Sydney have been neglected by Labor for far too long and this investment will relieve pressure on existing infrastructure and unlock the economic capacity of the region by easing congestion, slashing travel times and creating thousands of local jobs. This investment in roads will create 4,000 jobs in addition to the tens of thousands of jobs that will be created by the new airport. Western Sydney is already Australia's third largest economy and in its own right would be our fourth largest city. Over the next 20 years, the region is expected to grow from two million to three million, which is why both governments are fast-tracking development of new and existing infrastructure. The Australian and NSW Governments are committed to getting Western Sydney moving with modern infrastructure to boost productivity and make life easier for motorists so they spend less time stuck in traffic and more time being productive at work or at home with their families. This plan will deliver significant upgrades to major and local roads including: Bringelly Road - upgrade to four lanes from Camden Valley Way to the Northern Road The Northern Road - upgrade to a minimum of four lanes from Narellan to M4 Motorway Elizabeth Drive Corridor - construction of a new four lane motorway from the M7 Motorway to the Northern Road Improve interchanges connecting Northern Road and Elizabeth Drive with arterial roads Local Roads - $200 million for local road upgrades The strong cooperation between both governments means the first contracts for Bringelly Road are expected to be put to tender in July with planning on The Northern Road also substantially progressed. These upgrades will increase the capacity of the region to handle future traffic growth; improve accessibility to the M7 and M4 motorways; significantly reduce travel times and improve the safety performance of Western Sydney's road network. The Minister for Infrastructure and Regional Development the Hon Jamie Briggs and NSW Minister for Roads and Ports, the Hon Duncan Gay, will have responsibility to drive the infrastructure plan, to plan and prioritise funding of existing projects and consider future projects to be funded at later stages of the programme including: A link from the M4 to the Airport Prospect Highway Moorebank Precinct Werrington Arterial Work will also begin immediately to reserve a corridor for a future extension of the South West Rail Link to the Airport and to the South West Growth Centre. Enabling work, including a station box for a future rail link, will be completed during construction of the airport. This package builds on significant commitments already made by the Commonwealth and NSW Governments that foster positive growth in Western Sydney including building WestConnex, developing the Moorebank intermodal terminal and constructing the North West and South West Rail Links. The Australian and NSW Governments understand Western Sydney is one of Australia's most significant economic growth corridors and together with our commitment to build the Western Sydney airport at Badgerys Creek, this programme will deliver the jobs and infrastructure of the 21st century that Western Sydney needs.
10. From the text of the announcement, it is apparent that the package to which it referred was intended to address more matters than merely transport to and from the WSA. In particular, it references: unlocking the economic capacity of Western Sydney generally; increased employment created over and above that generated by the WSA; the South West Growth Area; and infrastructure upgrades (such as local roads) which related to matters beyond those purely generated by the WSA.
11. It is also apparent from the announcement that, whilst general goals had been identified, the detail of the goals were yet to be fully to be developed.
12. Following the announcement of the WSA, a number of actions were undertaken with respect to implementing the construction of the WSA and the WSIP. Those actions were summarised in the parties' agreed chronology, the relevant extracts of which are attached as Annexure A.
13. From this chronology, and a consideration of the evidence from which it was drawn, I find that there were actions taken to ensure both the provision of infrastructure (including the M12) and the provision of changes to the planning regime to redefine the land uses around the proposed WSA. Whilst the infrastructure and planning actions were undertaken by separate departments within the NSW Government and, to that extent, each had a focus on their particular portfolios, the actions were undertaken in concert to achieve the coordinated goal or purpose of effecting change within the locality of the WSA to support the airport and to leverage economic benefit to Western Sydney through transport and planning change. By way of examples of these coordinated goals it is noted that: 1. In 2018, the NSW Government delivered the LUIIP - Stage 1: Initial Precincts stated in its Executive Summary: The 11,200-hectare Western Sydney Aerotropolis will be Greater Sydney's newest economic hub at the heart of the emerging Western Parkland City. […] This Plan embraces the transformational potential of the Aerotropolis and the Airport. It sets out a planning framework to support all levels of government and spread the benefits of population and economic growth across Greater Sydney. And at Chapter One the opening section reads: This Land Use and Infrastructure Implementation Plan (the Plan) for the Aerotropolis capitalises on the once-in-a-generation economic boom created by the Airport, Aerotropolis and the Western Economic Corridor. A key enabling factor for this boom is the multi-billion dollar investment by the Australian and NSW Governments, including the Australian Government's up to $5.3 billion investment in the Western Sydney Airport. The Australian and NSW Governments have jointly announced $3.6 billion towards the Western Sydney Infrastructure Plan to upgrade and build new roads to support the region's economy and a joint commitment to fund the North-South Rail Link Stage 1 as equal partners. This Plan is the key mechanism to link significant transport investment with sequenced precinct planning for the Aerotropolis to make a significant contribution to the 200,000 new jobs for Western Sydney. 1. The statement from the Federal Minister for Major Projects and NSW Minister for Roads and Ports in the 2014/15 Report Card described the WSIP as follows: Roads and Maritime Services is delivering a package of road projects to support integrated transport for the western Sydney region and capitalise on the economic benefits of a western Sydney airport at Badgerys Creek ... The Western Sydney Infrastructure Plan will improve road capacity ahead of future traffic demand and be a catalyst for significant employment and residential development in the region. The Australian and NSW governments are improving the road network before a western Sydney airport opens in the mid-2020's, creating thousands of direct and indirect jobs ... [t]o support development of the South West Priority Growth Area and South West Priority Land Release Area, it is vital to ensure the road infrastructure supports transport connections, moves freight, eases congestion, provides more reliable travel times and improves safety'. 1. In March 2018, the Greater Sydney Commission prepared a Western City District Plan (the District Plan), which was released in conjunction with A Metropolis of Three Cities. The District Plan stated: Enhancing the transport connections to the Western Sydney Airport, Badgerys Creek Aerotropolis and Western Sydney Employment Area together with integrated land use, transport and infrastructure planning are fundamental requirements for delivering on this [more jobs and greater employment diversity] outcome [... ] The quality of Western Sydney Airport and Badgerys Creek Aerotropolis as places is also fundamental in maximising the employment outcomes for the Western City District. This also includes the design quality of the transport corridors that are developed across the District. 1. In May 2018, the Roads and Maritime Services released the State Significant Infrastructure Scoping Report for the M12. An EIS for the M12 was exhibited in October 2019 and was followed by an Amended EIS in October 2020. The Project Justification and Conclusion reads: The project is considered to be essential for the State for economic reasons; principally due to the role that the project would have in facilitating the development of and access to the proposed Western Sydney Airport, employment lands and South West Growth Area The combined effect of the Western Sydney Airport and the Aerotropolis is expected to significantly increase traffic demand, placing pressure on the existing local road network The project would provide essential road capacity to cater for major planned development and reduce projected future demand on the local road network. Appendix F states: Western Sydney Airport ... and Western Sydney Aerotropolis, which will be developed over the next 20 years, will be transformative and become economically critical to Greater Sydney and the NSW economy ... There is a need to ensure that connections to the rest of Greater Sydney's transport network are provided to support and maintain Western Sydney Aerotropolis as the catalysts for economic growth in western Sydney. 1. The NSW Long Term Transport Master Plan (December 2012) was a document produced by the NSW Government "through the Director General of Transport for NSW". It stated: Integrated planning recognises that land use generates demand for travel while the transport system influences how land is used for a particular purpose... Ensuring that land use and transport planning continue to be fully integrated will help us strengthen our transport planning processes. 1. The M12 Motorway State Significant Infrastructure Assessment published in March 2021 in the Executive Summary states: The Western Sydney Airport at Badgery's Creek, and associated development at Western Sydney Aerotropolis, employment lands and the South West Growth Centre, is expected to drive population growth in Western Sydney. To facilitate and cater for this growth, Transport for New South Wales (TfNSW) (the Proponent) proposes to construct a 16 kilometre motorway (the M12) linking the M7 Motorway at Cecil Hills to the Northern Road at Luddenham. The M12 Motorway is a critical infrastructure component for the development of these centres and would provide direct access between the future Airport and Sydney's motorway network, and additional road capacity for predicted traffic growth in the region.
14. Having regard to the evidence, I find that, at all material times, the purpose of the NSW Government was to carry out the broad intention of the WSIP which included traffic and transport infrastructure together with the rezoning of certain areas as part of a coordinated State Government response to the announcement of the WSA in 2014 and continuing. I also find for the same reasons that the actions of TfNSW in acquiring the land for the purposes of the M12 was in the furtherance of that purpose. The goal for the acquisition of the M12 was not merely to provide vehicular movements to and from the WSA but also to make provision for transport related to the intended land use changes which would facilitate commercial, employment and industrial uses around the WSA to leverage the economic opportunities provided by the WSA. Each element had to work in concert, or the goal (the purpose of such works) would not be achieved. To paraphrase the language in Perry at [100], the actions were a continuous and consistent action to give effect to such purpose.
15. The Applicant's contention that the relevant public purpose was not the broader purpose, but rather limited solely to the acquiring authority, in this case TfNSW had power to effect, must be rejected on the evidence.
16. The evidence (as outlined above) does not support a finding that TfNSW (or the departmental predecessors that were responsible for roads in NSW) would have constructed the M12 absent the land use changes. It is apparent from the date of the announcement and the subsequent implementation of the WSIP continuing until the Date of Acquisition that the M12 was intended to accommodate transport for the WSA as well as providing for the growth in the economic activity of Western Sydney more broadly, but particularly in connection with commercial uses around the WSA.
17. Until the announcement of the WSA the State Government had made no movement towards providing such road infrastructure in this locality. The lack of road infrastructure was one of the reasons that the investigations into the creation of the South West Growth Area indicated a planning horizon decades into the future.
18. Accordingly, the evidence supports a finding that the road project was intricately linked with the land use changes around the WSA. Absent such land use changes the M12 would not have been developed at this time or in this form.
19. The Applicant also identified that the public purpose should be characterised narrowly for reasons of fairness. Whilst my decision in this matter was reserved, the decision of the Court of Appeal in Noubia was delivered which dealt directly with this factor. I invited the parties, should they wish, to make further submissions, and each party made such submissions. As to the issue of fairness, the Applicant, apart from identifying the relevant parts of Noubia, elected to make no further submissions as to the application of this factor in the determination of the public purpose but relied upon its earlier submissions. In its written submissions in chief the Applicant formulated this consideration in pars 91 and 123. 91. It is also consistent with what he said at [98]: "it may be necessary to identify the scope of what occurs "by reason of" or is "caused by" these things. In these steps also, I do not think there are clear rules, but there may need to be judgments of degree which take into account considerations of reasonableness and fairness." The reasonableness and fairness in the approach to construction in the present circumstances is whether the words "caused by" should be construed so widely as to disregard the increase in value of the land caused by parties other than the acquiring authority on the basis that the carrying out of acquiring authorities public purpose enabled the other party make decisions that had the effect of increasing the value of the acquired land. By comparison, s.55(f) uses the words "by reason of" instead of "caused by". The legislature must have intended that they have different meanings. By reason of includes a connection which falls short of caused by, and in that sense can be an indirect consequence of the carrying out of the public purpose by the resuming authority. This is consistent with the approach of Craig J in MMTR Pty Ltd v Roads and Maritime Services [2015] NSWLWC 177 at [135]. 123. Before addressing the factual aspect to that, it is worth adding commentary from the AMP decision at [98]: "[i]t may be necessary to identify the scope of what occurs "by reason of" or is "caused by" these things. In these steps also, I do not think there are clear rules, but there may need to be judgments of degree which take into account considerations of reasonableness and fairness." The reasonableness and fairness in the approach to construction in the present circumstances is whether the words "caused by" should be construed so widely as to disregard the increase in value of the land caused by parties other than the acquiring authority on the basis that the carrying out of acquiring authorities public purpose enabled the other party make decisions that had the effect of increasing the value of the acquired land. By comparison, s.55(f) uses the words "by reason of" instead of "caused by". The legislature must have intended that they have different meanings. By reason of includes a connection which falls short of caused by, and in that sense can be an indirect consequence of the carrying out of the public purpose by the resuming authority. This is consistent with the approach of Craig J in MMTR Pty Ltd v Roads and Maritime Services [2015] NSWLWC 177 at [135].
20. I understand these submissions to be contending that it would not be reasonable to attribute a purpose, other than the narrow purpose of the construction, operation and maintenance of the M12, to the determination of public purpose in this case, as to do so would permit the consideration of an indirect rather than direct consequence. I have accepted that, as a matter of principle, the consequence to which s 56(1)(a) of the Just Terms Act is directed are direct and not indirect consequences. In applying the constraints of that principle to the facts of this case, I have found that the M12 and the acquisition of land to facilitate the M12 was broader than merely a road to facilitate vehicular movements. The broader purpose included coordinated and combined actions which included the rezoning of the land for commercial, industrial and employment purposes to facilitate such broader purpose. As a natural consequence, the public purpose did include the rezoning of land around WSA and therefore any such rezoning was a direct consequence of the public purpose.
21. In considering the scope or range of the public purpose - recognising that it is to be determined at the appropriate level of generality having regard to the principles of reasonableness and fairness - I accept the Respondent's characterisation that a broader public purpose for which the land was acquired is appropriate and there are no matters of reasonableness or fairness that would warrant a narrower characterisation.
22. To the extent that the State or TfNSW was the mechanism by which an element of the public purpose was to be achieved does not operate to limit the scope of the broader underlying goal.
23. Having regard to the evidence that there was a unified goal that characterised the actions subsequent to the announcement of the construction of the WSA, that goal was to facilitate the operations of the WSA and to facilitate commercial, industrial and employment uses around the WSA to leverage the economic opportunities provided by the WSA. This was the public purpose (Public Purpose).
24. The achievement of the Public Purpose required coordinated actions to provide the necessary infrastructure and to facilitate the required land uses by the rezoning of land around the WSA.

Did the Public Purpose cause an increase or decrease in the value of the Acquired Land? If so, is the increase or decrease to be disregarded pursuant to s 56(1)(a) of the Just Terms Act?

1. The decision in Drivas identifies the meaning of the notion "caused by" as used in s 56(1)(a) of the Just Terms Act as involving considerations beyond a purely factual "but for" test. Notions of "cause" are to be understood by reference to the statutory regime as not being conscribed by a purely factual "but for" test. As stated by Kirk JA at [32]-[39], what is required is a causal inquiry. Thus, the causal question needs to be directed to the effects on the value of the land of the carrying out (or proposal to carry out) the public purpose, not to the effects of the proposed acquisition on the particular land.
2. In this case, having regard to my finding above as to the Public Purpose the rezoning of the land was an integral part of the Public Purpose. The change in the zoning of the Acquired Land to ENT from its previous RU2 zoning was "caused" by the Public Purpose in that the increase in value was an increase for which the carrying out of the Public Purpose was relevantly directly responsible.
3. As to the Acquired Land, the evidence of the valuers was uncontroversial. If the Acquired Land was zoned ENT, it would be worth more than if it was zoned RU2 (even taking into account any future potential for upzoning of the land not related to the Public Purpose). Therefore, on the evidence, I find that the zoning of the land as ENT caused an increase in the value of the Acquired Land and the Residue Land that must be disregarded as required by s 56(1)(a) of the Just Terms Act.
4. Consequently, by operation of s 56(1)(a) of the Just Terms Act, it is to be disregarded in the determination of market value.
5. As to the Residue Land, the Applicant also claimed that the impact of the OSO caused a decrease in the value of the land and that the decrease was to be disregarded as required by s 55(f) of the Just Terms Act. For the reasons outlined below at [121]-[130], I reject the Applicant's contention that the OSO formed part of or was influenced in its placement by, the M12. That is, there is no evidence to which the Applicant could identify that the OSO was part of the Public Purpose.
6. Therefore, I do not consider that the impact on value of the land by virtue of the presence of the OSO is required to be disregarded by force of the application of ss 55(f) or 56(1)(a) of the Just Terms Act.

On what basis is the Acquired Land to be valued?

1. The land must be valued taking into account its potentialities. On the basis that the rezoning and the M12 are to be disregarded pursuant to s 56(1)(a) of the Just Terms Act there remained a dispute as to how such a disregard affected the potentialities of the land.
2. The Applicant contended that, notwithstanding the s 56(1)(a) disregard, the land should be valued on the basis that it had the potentiality as at the Date of Acquisition to be rezoned for some higher order commercial uses akin to an ENT zoning. The argument was that, absent the ENT zoning there was a reasonable expectation in the market that a rezoning would have occurred at around the same time as the disregarded rezone (or alternatively, be rezoned at the latest by 2026, being the date upon which an airport such as the WSA would come on line). The underlying assumptions in this contention was that the disregard would be made, but all of the underlying factual scenarios such as political will, scoping studies, funding, infrastructure design and the like, would have been undertaken such that an airport would be announced, and work undertaken to construct it would commence at the same rate and with the same completion dates as that proposed by the WSA. As an alternative, the Applicant contended that the airport would not be precisely the same, but would be something similar to the WSA having the same effects on rezoning due to the presence of the assumed airport.
3. On the above basis, the Applicant contended that even with the disregard, the value of the land would be undertaken on the basis of zoning with the potentialities of an ENT zone.
4. The Respondent contended that there was a potentiality, absent the Public Purpose, that the land could be rezoned as part of the Council's ambitions to extend the South West Growth Area. However, that rezone for land would not have occurred until at least 2046 and on the joint evidence of the valuers such a timeframe was too distant from the Date of Acquisition to have any impact on the value of the land.
5. Before turning to the evidence in this case, the proposition put by the Applicant is one that is not open on the statutory language. The requirement that the increase in value be disregarded requires that the underlying factors that are integral to the Public Purpose that gave rise to the disregard ought also to be disregarded. If a dispossessed owner was able to rely upon the underlying factors remaining there would be no disregard. Notwithstanding, I will also address the evidence that was available in connection with this issue.
6. The Applicant's contention as the circumstances to be assumed in the valuation exercise cannot be accepted. The evidence given by the Applicant's town planner, Mr Haskew, was based upon an assumption that the Commonwealth Government would immediately take steps itself to create an airport which would be fully operational by 2026. This assumption is not made out on the evidence. The evidence was that, notwithstanding that the Commonwealth Government had for many years being acquiring land for the purposes of an airport, such an ambition was not brought to fruition until 2018. The inference of this history being that the Commonwealth Government had no appetite to undertake the development of an airport in Western Sydney without the support of the State Government.
7. Further, notwithstanding what can be drawn from past action with respect to an airport, there is simply no evidence that the Commonwealth Government, even if it wished to do so, have been in a position to commence construction as at the date of the announcement in 2018. The commencement of construction in 2018 is essential in order to make good the Applicant's contention of rezoning by 2026.
8. Finally, there is no evidence that the scope and nature of the infrastructure proposed by the WSIP, which was to cater both for the airport demand and the demand of the rezoning, would be carried out. The rezoning, if undertaken in response to a new airport, would have to have regard to the provision of infrastructure to accommodate demand generated by the rezoned land. There is no evidence (nor a rational reason) that the Commonwealth Government would build infrastructure to accommodate demand beyond an airport. Therefore, the likely actuation of any contended rezone could not reasonably be assured, but even if likely, the time required to achieve such infrastructure provision and rezoning would exceed the Applicant's completion date of 2026.
9. The evidence of the town planners was that absent the WSA (or an airport in the same location) the Council's planning relating to the South West Growth Area would have included the Acquired Land being rezoned to permit some commercial purpose. However, any rezoning of the Acquired Land would have occurred at a time no earlier than 2031 (per Mr Haskell) or 2046 (per Mr Mitchell). The evidence of the valuers was largely agreed that potentials that occur up to or beyond 10 years from the Date of Acquisition were unlikely to affect value. I accept this evidence.
10. Accordingly, I am not satisfied that the land at the Date of Acquisition would have had any potential for upzoning that would have affected the value of the land. I accept the submissions of the Respondent, outlined above at [62] that the land is to be valued on the basis of an RU2 zoning with no potential that would affect the value of the land.

What is the determination of valuation of the Acquired Land?

1. For the reasons identified above, the ENT zoning of the land is to be disregarded for the purposes of determining the market value of the Acquired Land.
2. The parties agreed that, if the ENT zoning was to be disregarded, the Acquired Land should be valued as if it was zoned RU2. For the reasons outlined above, I will proceed to determine value on the basis of an RU2 zoning.
3. Each of the valuers considered that the "before" and "after" valuations based upon comparable sales was the appropriate valuation methodology to be applied to the Acquired Land.

Value of land zoned RU2 as at Date of Acquisition - "before" value

1. The valuers determined the appropriate rate per square metre of the Acquired Land on an RU2 zoning as: 1. Mr Dempsey: $250; and 2. Mr Lunney: $156.
2. The difference between the valuers turned primarily on their respective selection of comparable sales. Both valuers accepted that it was particularly difficult in this locality to find a sale of a parcel land zoned RU2 that was unaffected by the construction of the WSA. The experts did their best to identify RU2 sales and, if necessary, make adjustments to such sales. I will address each of the sales relied upon by the experts for the RU2 valuation.
3. The sale numbers, the relevant address of the property and the adjustments made to each sale are reproduced in the table Annexure B to these reasons. Where no sale number is attributed, the address of the sale is referenced.

Sale 22

1. Mr Lunney primarily relied upon Sale 22 at 43A Luddenham Road, Orchard Hills. This property was sold in May 2020, had a land area of 51 hectares and an RU2 zoning. The sale price produced a rate of $120/m2. Mr Lunney thereafter made adjustments to this sale for size and a 10% downward adjustment to account for the impact on value of the WSA and SEPP Aerotropolis. He ultimately derived an adjusted rate of $157.70/m2.
2. Mr Dempsey did not consider Sale 22 was comparable as it was a sale to an acquiring authority. It was contended that a sale to an acquiring authority was not an open market transaction, reflecting the unequal bargaining position of the parties.
3. The issue of considering sales to an acquiring authority as a matter of principle is that they are relevant considerations: see Fraietta v Roads and Maritime Services [2017] NSWLEC 11. The question of weight to be given to the transaction, or whether an adjustment is to be applied to a particular sale turns on the facts of each case. In this case, whilst Mr Dempsey has raised the concern in a general sense, I note that he did not identify any particular concern in relation to this particular sale. I further observe that Mr Dempsey himself had relied upon sales to acquiring authorities with respect to his analysis of ENT sales. I do not accept that little weight or a further adjustment is required to render this sale comparable.
4. Further, Mr Dempsey did not consider that an adjustment should be made for the effect of the WSA and SEPP Aerotropolis as there was no market evidence that would permit a relevant quantification of such adjustment. Absent such adjustment for the impact of the WSA and SEPP Aerotropolis, Mr Dempsey identified the adjusted rate for this sale should be $175/m2.
5. I accept Mr Dempsey's criticism of this adjustment. There is insufficient evidence in the sales of what such an adjustment should be (as was accepted by Mr Lunney - the adjustment was based upon his experience as a valuer). The 10% adjustment in the context is significant. Whilst Mr Lunney's extensive experience as a valuer is acknowledged, absent some evidentiary quantification that would justify this size of adjustment, I am unable to accept the adjustment should be made in this case.
6. I find that the appropriate rate to be derived from Sale 22 is $175/m2.

Sale 12

1. Sale 12 was purchased on the basis that it would in the very near future be rezoned for Agribusiness, a zone with more commercial uses than RU2 land. I find that, the imminence and certainty of the rezone together with the broader range of commercial uses permitted, influenced the sale price such that it is not comparable to the Acquired Land and is of no assistance in the determination of this matter.

Sale 13

1. Sale 13, like Sale 12 had been identified for imminent rezoning for employment purposes. For the same reasons identified in connection with Sale 12, I do not consider this sale to be of assistance.

Kemps Creek and Orchard Hills Sales (unnumbered)

1. Mr Dempsey identified these sales as part of the joint conferencing process. They comprised a number of sales to a single (joint) purchaser who was accumulating the lots to create a conglomerated lot. In his evidence, Mr Dempsey accepted that such sales were not related to the same market as that of the Acquired Land and advised that the reliance upon these sales was, in as much as it helped, of marginal relevance and was largely only relied upon to identify the difficulty in identifying rural sales.
2. For those reasons, I find these sales are not comparable and are of no assistance to the task of determining the value of the Acquired Land.

70 Range Road, Cecil Park

1. This sale related to land zoned RU4 which permitted a greater range commercial uses than the RU2 zone. The sale was purchased for the carrying out the commercial use of landscape supplies. The sale was also located in a different local government area. The sale site area was around 3 hectares and sold to an adjoining owner.
2. The analysed sale indicated a rate of $276/m2 which Mr Dempsey adjusted for time and derived a rate of $284/m2. He further adjusted the sale downwards to take account of the greater range of commercial uses by 15%, reflecting a comparable rate of $240/m2.
3. The adjusted rate was only marginally below the agreed rate for ENT land at $280/m2 (see [90] below). The range of uses in the ENT zone, together with the proximity to the economic generator of the WSA, would seem to dictate a larger rate per square metre than that for the Acquired Land valued on the ENT basis. This factor causes me to be wary of its comparability. In this regard, I note that Mr Dempsey made no adjustment for size or considered whether there was an adjoining owner premium component in the purchase price. Absent any relevant adjustments for these factors, I consider this sale to be an unreliable comparison and of no assistance in the determination of the value of the Acquired Land.
4. Having regard to the comparable sales considered above, Sale 22 was to be the only sale of assistance in determining the value of the Acquired Land. For the reasons I have identified above, I do not accept the adjustments made by Mr Lunney for the impact of the WSA and SEPP Aerotropolis and would adopt the rate of $175/m2 as an appropriately adjusted rate to render it comparable to the Acquired Land.
5. For the above reasons, I determine the "before" rate/m2 as $175.

"After" valuation on the assumptions as to Public Purpose

1. As was noted by the Respondent in its submissions and in Mr Lunney's determination of valuation of his report in chief and the valuers' Joint Report, the rate to be applied in the "after" scenario is the rate for ENT zoned land. During the course of the proceedings, the experts agreed that the base value for ENT zoned land was $280/m2, subject to adjustments for the impact of the topography and for size. In order to determine the relevant rate for ENT zoned land, it is necessary that I determine whether such adjustments should be made.
2. At the conclusion of their evidence, it became apparent that in the event that the land was to be valued on the basis of the ENT zoning, both valuers agreed that the sale of land at 869-885 Luddenham Road, Luddenham (Sale 1) was the appropriate comparable sale. In the Supplementary Joint Report of the valuers it was agreed that Sale 1, adjusted for time, reflected a rate of $280/m2.
3. Mr Lunney considered that a further adjustment to Sale 1 was required to render it comparable to reflect the difference in topography between the Acquired Land and Sale 1. The Acquired Land, he contended, was steeper topographically, thereby making it more expensive to develop as earthworks would be required. Sale 1 was by contrast relatively flat and therefore less extensive earthworks would be required to develop that land. Mr Lunney considered a downward adjustment of 5%. He accepted that the determination of the quantum of such adjustment required a degree of value judgment.
4. Mr Lunney further considered that there should be a downward adjustment of 5% for the differential in size between Sale 1 and the Acquired Land with Sale 1 being approximately one third the size of the Acquired Land.
5. Applying each of the adjustments for size and topography, Mr Lunney contended for a rate of $260/m2.
6. Mr Dempsey did not consider that either adjustment was required. As to topography, absent some detailed analysis of the development proposal for the Acquired Land, the impact of topography on development costs could not be understood. As to size, there was no market evidence to support the requirement for such adjustment. Mr Dempsey maintained the rate of $280/m2.

Should Mr Lunney's evidence be treated with caution?

1. A general criticism was levelled at Mr Lunney with respect to his adjustments asserting that they were opaque, rather than explicit, and therefore contrary to the approach countenanced in Marroun v Roads and Traffic Authority [2012] NSWLEC 199 at [196]. The crux of the criticism was that, whilst a strict application of Mr Lunney's adjustments produced a rate of $266/m2, he applied a rate of $260/m2 without giving reasons.
2. I do not accept this criticism. The position taken by Mr Lunney was apparent and clear in his oral evidence where he explained (Tcpt, 11 May 2023, p 207(19-31)): ..the sale property in question, Sale 1, is a flatter topography relative to the parent parcel. It requires less bulk earthworks, less levelling and retaining. That will be less extensive and less expensive relative to the parent parcel. To bring that to account, I've adjusted its rate of $280 per square metre down by 5%. That adjustment of 5%, together with the adjustment of 5% which I made on account of size gives 10%. The total adjustment down to 10% takes the $280 per square metre to $252 per square metre. Where I think the confusion lies, and I apologise to the Court if I wasn't clear in what I had set out, what I'm saying at paragraph 30 of that joint report is despite obtaining an adjusted value of $252, I nonetheless leave my rate at 260 rather than revising it down to 252.

Should an adjustment be made for size?

1. Both parties agreed, as do I, that valuation practice adopts adjustments for size typically because there is a larger pool of potential purchasers for land which is smaller and a larger market means more competition: Croghan v Blacktown City Council (2019) 237 LGERA 227 at [104] and [153].
2. However, in this case, the Applicant contended that the evidence did not support the typical adjustment and that, to the contrary, the evidence disclosed that the larger the sites, the less the need for amalgamation and additional transactional costs associated with multiple purchases, thereby providing a large pool of potential purchasers.
3. With respect to the adjustment for size, I accept the submissions of the Respondent, that Mr Dempsey's evidence as to the availability of comparable sales to rebut the orthodox adjustment for size, must be viewed in the context of his oral evidence in cross-examination.
4. Mr Dempsey relied on the sales of 155, 175 and 145 Lawson Rd (Sales 3, 4 and 5) - lots of approximately 2 hectares in size - as evidence that "smaller sites are being amalgamated to create a larger site". He accepted under cross-examination that it was a "possibility" that the prices paid for the separate lots was "perfectly consistent with the purchaser facing competitive pressure from numerous potential purchasers seeking a small lot".
5. As to Mr Dempsey's reliance upon the 23 sales of smaller lots he accepted under cross-examination that he had not provided a comparator purchaser for a large holding to indicate that the price paid for an agglomeration of smaller holdings would not involve a premium. Consequently, he accepted that he had no basis for concluding that the purchasers were not paying a premium in purchasing small sites.
6. In light of that evidence, I prefer the evidence of Mr Lunney as I am unable to accept that the evidence establishes a contrary proposition in the market. Accordingly, I accept that Sale 1 should be further adjusted for size by 5%.

Should an adjustment be made for topography?

1. As to whether an adjustment should be made for topography the experts both agreed that the topography of Sale 1 was flatter than the Acquired Land. This proposition was confirmed by me in the inspection of Sale 1 and the Acquired Land.
2. Mr Dempsey contended that dispute as to the adjustment turned on whether an adjustment should be made absent detailed assessment by qualified engineering and costing experts. It was contended that any adjustment on material other than such expert material would be little more than speculation. Notwithstanding these factors, Mr Dempsey accepted in cross-examination that it was logical that a site that required less soil to be moved would have a lesser purchase price - although precisely by how much would be a guess.
3. As a matter of logic, as accepted by Mr Dempsey, a purchaser will assume that it will cost more to develop the Acquired Land due to its topographic features. I find that a natural and reasonable extension of that logic is that they will pay less for the Acquired Land than Sale 1.
4. How to quantify the quantum of that lesser amount is to be determined by taking into account the nature of the feature under consideration. I do not consider it reasonable that a purchaser for vacant land such as the present one would not enter into the market for its purchase without undertaking the timely and expensive exercise of engaging engineers and quantity surveyors. A valuer with experience in a market such as that for the Acquired Land is competent to make a reasonable estimate of the range of values for that land taking into account an adjustment for topography.
5. I accept the evidence of Mr Lunney that a purchaser would adjust the rate for the Acquired Land by a percentage amount rather than a fixed amount, and that such percentage would be in the order of 5%.
6. For the reasons identified above, and accepting the evidence of Mr Lunney as to the resolution in the Applicant's favour, I determine that the rate for the Acquired Land assuming an ENT zone is $260/m2.

Should a different rate be determined for land the subject of the Easement?

1. Lot 26 is burdened by a 60.96 metres wide Easement. The Easement cuts diagonally across the northwest corner of the land isolating a triangular pocket of land.
2. The valuers agreed that, if the land was to be valued as RU2 land with agricultural or rural land uses as opposed to rural land with development potential in the near future, the existence of the Easement would have little effect upon the value of the land.
3. In light of my finding above that the Acquired Land in the "before" scenario is to be valued as RU2 land, with no proximate potential for upzoning to a zone that would permit development of the type that would be affected by the location of the Easement, I make no adjustment for the impact on value of the presence of the Easement in the "before" assessment of value.
4. As to the "after" scenario, the development potential of the land for ENT purposes may be affected by the location of the Easement. However, I accept the evidence of Mr Dempsey that its location towards the boundary, coupled with appropriate incorporation by design into any future development, it would retain both utility and value. Accordingly, I make no adjustment to value on the basis of the impact of the Easement on the "after" scenario.

Was there an increase or decrease in other land by reason of the Public Purpose pursuant to s 55(f) of the Just Terms Act?

Determination of compensation for land adjoining Acquired Land

1. The Applicant claimed compensation pursuant to s 55(f) of the Just Terms Act for a diminution in value of the Residue Land caused by the carrying out of the Public Purpose with respect to impact occasioned by: the impact on access to the Residue Land; and the location of the OSO.
2. The Respondent disputed that there was any such diminution on the facts of the case.

Was there a diminution in value caused by the Public Purpose by reasons of the alteration to the access?

1. As to the issues of access the evidence demonstrates that upon completion of the construction of the M12 the Residue Land would have access via a dedicated public road. That level of access would, on the evidence of both valuers, be sufficient and comparable to the subject level of access such that once constructed it would not affect value.
2. However, in the intervening period, access to the Residue Land is affected by the construction zone and requires pre-arrangement with the construction contractors. This degree of complication creates a degree of inconvenience that would reflect in a loss of value for that period of inconvenient access.
3. Both valuers considered that the sum representing that loss of value would be nominal. Mr Dempsey determined this as a percentage diminution in value of the Residue Land's value. Mr Lunney considered it to be a nominal sum in the context of it being a short period of time and a mere inconvenience rather than a denial of access. He considered that such sum would be represented by an amount between $10,000 and $100,000.
4. I accept the evidence of Mr Lunney. A percentage of land value is an unreasonable sum to represent a temporary inconvenience. I do, however, adopt the sum of $100,000 to take account of the period of construction and the time for the creation of the public road which, whilst fixed in result, is not definitively fixed in the length of time.
5. Accordingly, I find that the Applicant is entitled to compensation pursuant to s 55(f) of the Just Terms Act in the sum of $100,000.

Was there a diminution in value caused by the Public Purpose by reasons of the designation of the OSO on the Residue Land?

1. The Applicant was unable to identify any evidence that established that the OSO was located on the Residue Land by virtue of the location of the M12. The Applicant relied upon the drawing of an inference from the evidence that the OSO was so located due to the fixing of the location of the M12.
2. The evidence discloses that the location of the OSO has not yet been fixed. It is identified in the SEPP Aerotropolis as "Outer Sydney Orbital (Under Consideration)". Further, it has not been designated as land reserved for a road in the SEPP Aerotropolis or any other planning instruments. The evidence discloses that the OSO was the subject of consideration independent of the M12. The proposed location of the OSO had varied over time. The current location at the Date of Acquisition had been nominated after its previous location had been abandoned due to the fact that it had impacted upon residential properties. The inference to be drawn is not that the M12 dictated the location of the OSO, but rather the particular features of the land rendered it more suitable than other identified locations.
3. The inference contended for by the Applicant is not open on the evidence available.
4. However, even if the inference was available, it is necessary that the location of the OSO be so determined by reason of the carrying out of, or the proposal to carry out, the Public Purpose for which the land was acquired. The Applicant contended that the reference in s 55(f) of the Just Terms Act "by reason of" was a broader consideration than the use in s 56(1)(a) "caused by". I do not accept that such a construction is open. Whilst the words used in each section are different the context and subject matter of the Just Terms Act does not permit a construction that would produce a lesser test for determining compensation for land retained by a dispossessed owner than the land actually acquired. Whilst I acknowledge that a different formulation of words is used in each section, those words in essence have the same meaning when read having regard to the context and purpose of the Just Terms Act.
5. Therefore, it is necessary for the Applicant to establish that the Public Purpose (as identified above at [51]) caused the loss in value occasioned by the location of the OSO. In light of the determination of the Public Purpose, the location of the OSO and its impact on value does not arise by reason of the Public Purpose, it has no connection to the achievement of the Public Purpose - but, even if the inference that the OSO was located by reference to the location of the M12 is accepted, such a decision was made by an authority in response to the acquisition and is therefore not a matter subject to the statutory disregard: Drivas at [88].
6. The evidence that related to the impact of the OSO upon the determination of value differed depending upon whether it was considered to have been caused by the Public Purpose. Mr Dempsey considered a downward adjustment of the "after" value across the whole of the Residue Land was appropriate as it was an impact caused by the carrying out of the Public Purpose. Mr Lunney ascribed a 10% downward adjustment on the land occupied by the OSO designation in both the "before" and "after" scenarios as he approached the impact of the OSO as being independent of the Public Purpose and therefore an influence on value in both scenarios. Mr Lunney ultimately accepted that the percentage value did contain an element of value judgment and that the range of impact could reasonably be between 10-20%.
7. For the reasons outlined above, I have found that the OSO was not caused by, or located by reason of, the Public Purpose. As a consequence of that finding the claim for the impact of the OSO pursuant to s 55(f) of the Just Terms Act cannot succeed. As a further consequence, the calculation of the diminution in value as a consequence of the OSO cannot be measured across the whole of the land affected by the OSO together with the Residue Land. On the basis of my finding as to Public Purpose, the impact on value of the land occupied by the OSO is present in both the "before" and "after" scenarios and is limited to the determination of the relevant rate/m2 for the area of land identified as the OSO.
8. As to the appropriate rate, I have concerns with respect to the 30% identified by Mr Dempsey. Such a rate assumes a degree of certainty as to the location of the OSO and therefore a high discount. For the reasons identified above, the OSO is not certain but has been identified as "under consideration", and as a consequence of that uncertainty I find that the market is unlikely to treat the OSO as effectively unavailable for future development.
9. As to the rates identified by Mr Lunney, I accept his evidence that the market would consider the OSO land to be of some value, but tempered by the risk of either acquisition in the future or delays in obtaining development consent. Whilst I acknowledge that Mr Lunney identified a range of percentages that would be applicable, his acceptance of the subjectivity of where within that range the reduction should be fixed causes me to accept a percentage figure which best favours the dispossessed owner, the evidence being that the fixing of such a rate is within the range of reasonable valuation expectations. Accordingly, I adopt a rate for the OSO land that is 10% less that the rate for the land unaffected by the OSO in both the "before" and "after" scenarios.
10. For those reasons, the value of the land affected by the OSO is to be valued in both the "before" and "after" valuations at 10% of the otherwise determined rate/m2 in each scenario.
11. Accordingly, adopting the rates I have identified above, the compensation for the Acquired Land is to be determined on the following basis:

What is the quantum of the claim for disturbance to which the Applicant is entitled?

1. The parties were generally agreed on the determination of the claim for disturbance having regard to the evidence. There was agreement that the Applicant was entitled to disturbance in the following amounts: 1. $99,119.78 in legal costs and disbursements (being the GST exclusive amount of the sum of the Colin Biggers & Paisley invoices, including disbursements, but excluding those invoices dated 31 May 2022 onwards); and 2. $38,860 in valuation fees (being the GST exclusive amount of the sum of the Dempsey valuation invoices).
2. The Applicant contended that it was entitled to a further sum of $54,947 (excluding GST) relating to legal costs and disbursements in the invoices 352467 and 352456 issued by Colins Biggers & Paisley as disturbance pursuant to s 59(1)(a) of the Just Terms Act, which provides: 59 Loss attributable to disturbance (1) In this Act - loss attributable to disturbance of land means any of the following - (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land…
3. The disputed invoices were tendered. The detail in the invoices disclosed that they related to the bringing of proceedings for mandamus in the Supreme Court seeking orders requiring the Respondent to give notice of the offer of compensation as required by the Just Terms Act (Mandamus Proceedings).
4. The Applicant contended that the costs relating to the Mandamus Proceedings were relevantly disturbance as the time limit for the provision of a valuation by the Valuer-General as required by s 42(1) of the Just Terms Act was significantly exceeded. In order for the procedures under the Just Terms Act to be followed, the Applicant commenced those Mandamus Proceedings. Such a need for the proceedings arose entirely out of the compulsory acquisition and therefore is within the inner boundaries of being "in connection" with the acquisition. As was stated in Eureka Operations Pty Ltd v Transport for New South Wales [2021] NSWLEC 41 at [154], the words "in connection with" as they are used in s 59(1)(a): …this construction does not turn on the contractual relationship of the retainer of the consultant or whether it is recoverable as a disbursement, but rather whether it is reasonably necessary to enable the legal services to be provided in connection with the compulsory acquisition of the land, including, but not limited to, any offer of compensation.
5. I reject this claim for disturbance.
6. The disputed sums relate to proceedings in the Supreme Court against a party that was not a party to these proceedings, namely the Valuer-General or an acquiring authority in connection with the acquisition of the Acquired Land. Whilst the acquisition process under the Just Terms Act relies upon a valuation being issued by the Valuer-General as a precondition to the making of an offer of compensation, the acquiring authority has no control over the actions of the Valuer-General.
7. The fact that a valuation from the Valuer-General is required in order for the acquiring authority to make an offer of compensation is not relevantly "in connection with the compulsory acquisition", rather it is in connection with the process of the making of the offer. The types of costs contemplated by s 59 of the Just Terms Act are those relating to the act of acquiring the land and the consideration of the offer of compensation. The mechanisms to achieve either of those things does not extend to proceedings brought against an instrumentality not a party to the acquisition. Accordingly, I do not allow the legal costs of the mandamus proceedings as a claim for disturbance in connection with the acquisition the subject matter of these proceedings.

Costs

1. The parties agreed that, if the Applicant succeeded in achieving a determination of compensation in excess of that identified in the proceedings, it would be entitled to its costs in these proceedings. The amount of compensation the Respondent identified in its points of defence came to the sum of $4,138,178.78. The determination of compensation exceeds this sum and therefore an order for costs in the Applicant's favour is warranted.

Conclusion and orders

1. For the reasons herein, I determine that the Applicant is entitled to compensation in the following amounts: 1. Section 55(a) market value: $9,523,500; 2. Section 55(f) injurious affection to Residue Land at the Date of Acquisition: $100,000; and 3. Section 59(1)(a) and (b) disturbance: $137,979.78. TOTAL say $9,761,480.
2. Accordingly, the Court orders that: 1. Compensation under Part 3 Division 4 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Just Terms Act), for the compulsory acquisition of the Applicant's interest in land in Certificate of Title Lot 7 Deposited Plan 1270586 (formerly part of Lot 26 in Deposited Plan 604586) formerly known as 777-819 Luddenham Road, Luddenham NSW, is determined in the sum of $9,761,480 plus statutory interest being payable under ss 49 and 50 of the Just Terms Act. 2. The Respondent is to pay the Applicant's costs of the proceedings; and 3. The exhibits are returned. Annexure A Annexure B

Amendments 19 April 2024 - Amendment to catchwords. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 April 2024

What was the public purpose for which the Acquired Land was acquired?

Upon what principles was the public purpose to be determined?

1. The manner in which a dispute as to the identification of the public purpose is to be resolved has been considered in a number of authorities. The general settled principles to be discerned from those authorities can be summarised as:

(1) In identifying the public purpose for which the land was acquired, it is the public purpose of the acquiring authority which is relevant: Coffs Harbour City Council v Noubia Pty Ltd [2024] NSWCA 19 (Noubia) at [61];

(2) In determining what increase or decrease in value occurs "by reason of" or is "caused by" the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, it is first necessary to identify the public purpose and its relevant scope or generality: AMP Capital Investors Ltd and Another v Transport Infrastructure Development Corporation [2008] NSWCA 325; (2008) 163 LGERA 245 (AMP) at [96];

(3) Once the public purpose is identified, it may then be necessary to identify what is comprehended by "the proposal to carry it out" and/or "the carrying out of" the purpose. If so, it may be necessary to identify the scope of what occurs "by reason of" or is "caused by" these things: AMP at [96];

(4) There are no "clear rules" determining how the relevant public purpose at the appropriate level of generality is to be determined. Factors to be taken into account may include the degree of continuity and consistency of various elements of what is proposed and done, and fairness to both the claimant and the acquiring authority: Noubia at [62]-[63];

(5) In addressing fairness to both the claimant and the acquiring authority the legislative purpose of the Just Terms Act is important. Section 3(1) sets out the objects of the Act, which include the following:

(a) to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will be not less than the market value of the land (unaffected by the proposal) at the date of acquisition, and

(b) to ensure compensation on just terms for the owners of land that is acquired by an authority of the State when the land is not available for public sale_..._

(6) When interpreting s 56(1)(a) of the Just Terms Act, the Pointe Gourde principle has little, if any, application. The statutory language of s 56(1)(a) must be applied on its own terms: Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259 (Walker) at [45]. It follows that earlier decisions in this Court which applied the Pointe Gourde principle should be approached with considerable caution: Noubia at [66];

(7) The proposition drawn from Housing Commission (NSW) v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196 that an "indirect relationship", where the maintenance of the planning restriction by the Council was seen as a "step in the process of resumption" was a sufficient causal connection, does not apply to s 56(1)(a) of the Just Terms Act given that a direct causal connection was required: Walker at [53]-[54]. See also RD Miller Pty Ltd v Roads and Maritime Services NSW [2020] NSWCA 241; (2020) 103 NSWLR 234 at 270;

(8) The mere circumstance that the public purpose is a contributing factor to changes which in turn affect value is not necessarily sufficient, particularly if the changes depend also on discretionary decisions made by other authorities: AMP at [99]; and

(9) The causal question needs to be directed to the effects on the value of the land of the carrying out, or proposal to carry out the public purpose, not to the effects of the proposed acquisition of the particular land: Sydney Metro v G & J Drivas Pty Ltd [2024] NSWCA 5 at [39] (Drivas).

1. Taking into account those principles, I do not accept the Applicant's submission that the determination of the relevant public purpose is limited to the identified purpose for which a power to acquire has been conferred by legislation, in this case the power to acquire conferred upon the Respondent pursuant to s 177 of the Roads Act, and/or identified in the PAN given for a particular acquisition.
2. The Applicant's submission turns upon a construction of the defined term "public purpose" in s 4 of the Just Terms Act (recited above at [17].
3. In order to accept the Applicant's construction, it is necessary to infer that the definition of a "public purpose" can only exist within the bounds of the particular rights to lawfully compulsorily acquire land by a single acquiring entity. That is, that the scope of the public purpose is limited to the lawful scope of the powers of acquisition of the particular acquiring authority. This limitation should not be inferred from the words of the definition as no part of the definition refers to the particular acquiring authority. As a consequence, the public purpose, provided it is one at law that could permit the compulsory acquisition of land, is not limited to the mechanism by which the land is acquired, but to the object to be achieved by the carrying out of the action of compulsory acquisition.
4. Further, the reference to the public purpose in the Just Terms Act identifies the purpose of the acquisition. Considering the natural meaning of that word it is directed to an analysis of what is the intended or desired result, end or aim of the acquisition (see Macquarie Dictionary, 3rd ed (1997). The use of the limitation whereby such purpose is a "public" purpose does not alter the meaning of the phrase. The reference to the purpose being one that is a "public" purpose is a recognition that the acquisition of land pursuant to the Just Terms Act is limited to compulsory acquisition which, of itself, may only be carried out for a purpose that serves the public and not the private interests of an acquiring authority.
5. It follows that if, as a matter of fact, the public purpose is a composite purpose which to give effect to a number of authorities must act in concert to achieve the purpose, then the public purpose is not limited to the scope of influence of a particular acquiring authority. As was identified in Barkat v Roads and Maritime Services [2019] NSWCA 240 (Barkat) at [84]-[85]:

84 The primary judge referred to the submissions made on behalf of Mr & Mrs Barkat that relied in part on Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [28] (Walker's Case). His Honour referred to the contention on behalf of Mr & Mrs Barkat that any decision to rezone the Underwood Land would be made by government entities other than RMS, such that it was impossible to conclude that there would be any link between the rezoning from R3 to R4 because of the WestConnex Project. His Honour considered that the interrelationship between the authorities and their respective responsibilities in Walker's Case revealed a situation starkly different from the factual situation in the present case. His Honour distinguished Walker's Case on the basis that the nexus between the non-acquiring Council's anterior discussions and agitations and the Authority's eventual public purpose acquisition was not capable of being characterised as an integrated proposal. In contradistinction, his Honour said, there was no doubt that the WestConnex Project was specifically designed to be the catalyst for much more than a road development scheme in that it was purposely an urban renewal project from the outset, interfacing with the draft PRUTS involving an integrated project team including the WestConnex Delivery Authority, RMS, the Department of Planning and Environment, Strathfield Council and others. Accordingly, his Honour concluded, it is not necessary for RMS to be the rezoning authority but it was sufficient for its WestConnex Project to be the intended catalyst for predicting urban renewal and associated rezoning that would most likely follow. They were all interrelated components of the same public purpose.

85 There was no error on the part of the primary judge in distinguishing the authorities relied upon by Mr & Mrs Barkat. They do not point to any error of law on the part of his Honour. Whether it might have been possible to come to a different conclusion is not the point. The conclusion that the acquisition of the Underwood Land was for a purpose intrinsically connected with the draft PRUTS was open on the material and did not constitute an error of law.

1. Such an approach was also identified in Roads and Traffic Authority v Perry [2001] NSWCA 251; (2001) 52 NSWLR 222 (Perry) at [65]:

The particular purposes, in the sense of the uses to which particular land will be put, do not exclude the wider public purpose to be served by the acquisition. If so it is this wider public purpose, scheme or project which underlay the acquisition, which governs the operation of s 56(1)(a).

1. The Applicant placed emphasis in the language used in recent decisions of the Court of Appeal in Noubia and Drivas, wherein the stated focus of those decisions emphasised that the relevant public purpose was to be confined to the purpose of "the resuming authority": Drivas at [38]-[39] and Noubia at [61], [64]-[65]. Whilst I accept that the language of these decisions is in a singular grammatical form relating to the acquiring authority, I do not take those decisions to be establishing a principle that the determination of the public purpose must, as a matter of construction, be so limited in all circumstances. Neither Noubia nor Drivas required the determination of such questions as in each of those cases, the public purpose was agreed and limited to a purpose that was to be fulfilled by a single acquiring authority. Further, in order to read the decisions in the way contended by the Applicant requires me to read them in a manner inconsistent with the decisions of Perry, Barkat and Walker which, as a matter of principle, contemplate circumstances in which a public purpose may be broader and more complex than that for which the acquiring authority could perform. As none of those authorities were addressed in Noubia or Drivas in that context, I cannot apply them as establishing a principle that is in contest with Perry, Barkat or Walker, without there being some reasons expressed in those decisions that would warrant such application.
2. Accordingly, whether the public purpose is limited to the particular powers of the acquiring authority or a broader purpose is a question of fact and in turn context and not a matter of general principle.

Upon the consideration of the facts in this case, what was the public purpose?

1. The Acquired Land was, at the Date of Acquisition, zoned ENT pursuant to the SEPP Aerotropolis.
2. The dispute turned upon whether I should find a narrow or a broad public purpose.
3. The Applicant contended for a narrow public purpose that was limited solely to the construction, operation and maintenance of the M12. This narrow characterisation was contended for on the basis of the description used in the notices relating to the acquisition and the nature and scope of the power of acquisition conferred on TfNSW by s 177 of the Roads Act. It was further contended that the evidence in this case did not permit a finding of a broad public purpose as the announcement of the WSA, the Western Sydney Infrastructure Plan (WSIP) and the Western Sydney Aerotropolis Land Use and Infrastructure Implementation Plan (LUIIP) each related to infrastructure only, of which the M12 was the primary infrastructure project.
4. The Respondent contended for a broader identification of public purpose as:

(1) The public purpose was that of the NSW Government and included not only the WSIP, but also the rezonings of relevant areas for urban purposes (among other initiatives), as part of a coordinated State Government response to the announcement of the WSA in 2014 and continuing. In delivering the component which is the WSIP, TfNSW was merely the vehicle used by the NSW Government for that part of the overall purpose. As the rezonings were part of the public purpose the effect on land values is direct and must be disregarded; or

(2) Alternatively, the public purpose is that of TfNSW. However, in this scenario TfNSW had adopted the purpose of the State Government. Its public purpose can therefore be characterised as the purpose to effectuate the State Government's overarching purpose within its range of competence;

(3) If, in the further alternative, TfNSW's purpose comprises only the WSIP without reference to the State's overarching purpose but for the WSIP, the rezonings would not have taken place. The effect of the public purpose on values is indirect, but nevertheless within that which must be disregarded under s 56(1)(a) of the Just Terms Act.

1. The determination of the scope of the public purpose arises in this case as one of the primary disputes of the parties as to whether the market value should be determined on the basis of the ENT zoning or whether the ENT zoning was a matter that engaged the statutory disregard in s 56(1)(a) of the Just Terms Act for the purposes of determining market value. That is, was the ENT zoning caused by the carrying out of, or the proposal to carry out, the public purpose, for which the land was acquired?
2. To aid in the determination of the public purpose the parties tendered voluminous documentary evidence, including:

(1) The history of the Badgery's Creek Airport commencing in 1974 and concluding in 2022 when the acquisition took place;

(2) The planning history of the locality in which the Acquired Land was located and indicated the planning policies relating to the potential of the Acquired Land to be rezoned from RU2 to a higher value zoning absent the WSA and/or the M12;

(3) The actions of the Commonwealth and State Governments at the time of the announcement of the WSA and subsequent actions;

(4) Identifying the transport planning of the locality including the Acquired Land; and

(5) The Environmental Impact Statement (EIS) and approval of the M12 and the documents supporting the approval.

1. In addition, each party also adduced expert evidence from their respective town planners: Mr Haskew for the Applicant and Mr Mitchell for the Respondent. The town planners considered the relevant history and expressed opinions as to the public purpose and whether the zoning of the land as at the Date of Acquisition was caused by the public purpose. The town planners differed in their opinions as to the public purpose and effects of the implementation of that purpose.
2. Notwithstanding the adducing of evidence from the town planners, the parties accepted that the determination of the public purpose was a matter for judicial determination. However, each party relied upon their respective experts as providing the factual basis for their submissions.
3. The facts to which I have been directed show that there has been a long history (spanning many decades) in the development of an airport in Western Sydney. That evidence discloses that the main hurdle to the creation of such an airport was political will and funding. The creation of an airport in Western Sydney required collaboration, or at the least cooperation, between the Commonwealth and State Governments to bring about its fruition. That did not occur until 2014 when on 15 April 2014, the Commonwealth and State Governments jointly announced the creation of the WSA. At the announcement the then Prime Minister Mr Tony Abbott stated in his press release:

The Commonwealth and New South Wales Governments are delivering on our shared plan to build a stronger and more prosperous Western Sydney by investing more than $1 billion over the forward estimates and $3.5 billion over 10 years in major infrastructure upgrades that will transform the region's economy.

The new plan involves transport links to capitalise on the economic gains from developing an airport at Badgerys Creek. This will boost the local economy of Western Sydney, making it an even better place to live and do business.

The Australian and NSW Governments will jointly fund the road infrastructure plan through an 80/20 funding split.

The people of Western Sydney have been neglected by Labor for far too long and this investment will relieve pressure on existing infrastructure and unlock the economic capacity of the region by easing congestion, slashing travel times and creating thousands of local jobs.

This investment in roads will create 4,000 jobs in addition to the tens of thousands of jobs that will be created by the new airport.

Western Sydney is already Australia's third largest economy and in its own right would be our fourth largest city. Over the next 20 years, the region is expected to grow from two million to three million, which is why both governments are fast-tracking development of new and existing infrastructure.

The Australian and NSW Governments are committed to getting Western Sydney moving with modern infrastructure to boost productivity and make life easier for motorists so they spend less time stuck in traffic and more time being productive at work or at home with their families.

This plan will deliver significant upgrades to major and local roads including:

Bringelly Road - upgrade to four lanes from Camden Valley Way to the Northern Road

The Northern Road - upgrade to a minimum of four lanes from Narellan to M4 Motorway

Elizabeth Drive Corridor - construction of a new four lane motorway from the M7 Motorway to the Northern Road

Improve interchanges connecting Northern Road and Elizabeth Drive with arterial roads

Local Roads - $200 million for local road upgrades

The strong cooperation between both governments means the first contracts for Bringelly Road are expected to be put to tender in July with planning on The Northern Road also substantially progressed.

These upgrades will increase the capacity of the region to handle future traffic growth; improve accessibility to the M7 and M4 motorways; significantly reduce travel times and improve the safety performance of Western Sydney's road network.

The Minister for Infrastructure and Regional Development the Hon Jamie Briggs and NSW Minister for Roads and Ports, the Hon Duncan Gay, will have responsibility to drive the infrastructure plan, to plan and prioritise funding of existing projects and consider future projects to be funded at later stages of the programme including:

A link from the M4 to the Airport

Prospect Highway

Moorebank Precinct

Werrington Arterial

Work will also begin immediately to reserve a corridor for a future extension of the South West Rail Link to the Airport and to the South West Growth Centre. Enabling work, including a station box for a future rail link, will be completed during construction of the airport.

This package builds on significant commitments already made by the Commonwealth and NSW Governments that foster positive growth in Western Sydney including building WestConnex, developing the Moorebank intermodal terminal and constructing the North West and South West Rail Links.

The Australian and NSW Governments understand Western Sydney is one of Australia's most significant economic growth corridors and together with our commitment to build the Western Sydney airport at Badgerys Creek, this programme will deliver the jobs and infrastructure of the 21st century that Western Sydney needs.

1. From the text of the announcement, it is apparent that the package to which it referred was intended to address more matters than merely transport to and from the WSA. In particular, it references: unlocking the economic capacity of Western Sydney generally; increased employment created over and above that generated by the WSA; the South West Growth Area; and infrastructure upgrades (such as local roads) which related to matters beyond those purely generated by the WSA.
2. It is also apparent from the announcement that, whilst general goals had been identified, the detail of the goals were yet to be fully to be developed.
3. Following the announcement of the WSA, a number of actions were undertaken with respect to implementing the construction of the WSA and the WSIP. Those actions were summarised in the parties' agreed chronology, the relevant extracts of which are attached as Annexure A.
4. From this chronology, and a consideration of the evidence from which it was drawn, I find that there were actions taken to ensure both the provision of infrastructure (including the M12) and the provision of changes to the planning regime to redefine the land uses around the proposed WSA. Whilst the infrastructure and planning actions were undertaken by separate departments within the NSW Government and, to that extent, each had a focus on their particular portfolios, the actions were undertaken in concert to achieve the coordinated goal or purpose of effecting change within the locality of the WSA to support the airport and to leverage economic benefit to Western Sydney through transport and planning change. By way of examples of these coordinated goals it is noted that:

(1) In 2018, the NSW Government delivered the LUIIP - Stage 1: Initial Precincts stated in its Executive Summary:

The 11,200-hectare Western Sydney Aerotropolis will be Greater Sydney's newest economic hub at the heart of the emerging Western Parkland City.

[...]

This Plan embraces the transformational potential of the Aerotropolis and the Airport. It sets out a planning framework to support all levels of government and spread the benefits of population and economic growth across Greater Sydney.

This Land Use and Infrastructure Implementation Plan (the Plan) for the Aerotropolis capitalises on the once-in-a-generation economic boom created by the Airport, Aerotropolis and the Western Economic Corridor. A key enabling factor for this boom is the multi-billion dollar investment by the Australian and NSW Governments, including the Australian Government's up to $5.3 billion investment in the Western Sydney Airport. The Australian and NSW Governments have jointly announced $3.6 billion towards the Western Sydney Infrastructure Plan to upgrade and build new roads to support the region's economy and a joint commitment to fund the North-South Rail Link Stage 1 as equal partners.

This Plan is the key mechanism to link significant transport investment with sequenced precinct planning for the Aerotropolis to make a significant contribution to the 200,000 new jobs for Western Sydney.

(2) The statement from the Federal Minister for Major Projects and NSW Minister for Roads and Ports in the 2014/15 Report Card described the WSIP as follows:

Roads and Maritime Services is delivering a package of road projects to support integrated transport for the western Sydney region and capitalise on the economic benefits of a western Sydney airport at Badgerys Creek ... The Western Sydney Infrastructure Plan will improve road capacity ahead of future traffic demand and be a catalyst for significant employment and residential development in the region. The Australian and NSW governments are improving the road network before a western Sydney airport opens in the mid-2020's, creating thousands of direct and indirect jobs ... [t]o support development of the South West Priority Growth Area and South West Priority Land Release Area, it is vital to ensure the road infrastructure supports transport connections, moves freight, eases congestion, provides more reliable travel times and improves safety'.

(3) In March 2018, the Greater Sydney Commission prepared a Western City District Plan (the District Plan), which was released in conjunction with A Metropolis of Three Cities. The District Plan stated:

Enhancing the transport connections to the Western Sydney Airport, Badgerys Creek Aerotropolis and Western Sydney Employment Area together with integrated land use, transport and infrastructure planning are fundamental requirements for delivering on this [more jobs and greater employment diversity] outcome [... ] The quality of Western Sydney Airport and Badgerys Creek Aerotropolis as places is also fundamental in maximising the employment outcomes for the Western City District. This also includes the design quality of the transport corridors that are developed across the District.

(4) In May 2018, the Roads and Maritime Services released the State Significant Infrastructure Scoping Report for the M12. An EIS for the M12 was exhibited in October 2019 and was followed by an Amended EIS in October 2020. The Project Justification and Conclusion reads:

The project is considered to be essential for the State for economic reasons; principally due to the role that the project would have in facilitating the development of and access to the proposed Western Sydney Airport, employment lands and South West Growth Area The combined effect of the Western Sydney Airport and the Aerotropolis is expected to significantly increase traffic demand, placing pressure on the existing local road network The project would provide essential road capacity to cater for major planned development and reduce projected future demand on the local road network.

Western Sydney Airport ... and Western Sydney Aerotropolis, which will be developed over the next 20 years, will be transformative and become economically critical to Greater Sydney and the NSW economy ... There is a need to ensure that connections to the rest of Greater Sydney's transport network are provided to support and maintain Western Sydney Aerotropolis as the catalysts for economic growth in western Sydney.

(5) The NSW Long Term Transport Master Plan (December 2012) was a document produced by the NSW Government "through the Director General of Transport for NSW". It stated:

Integrated planning recognises that land use generates demand for travel while the transport system influences how land is used for a particular purpose... Ensuring that land use and transport planning continue to be fully integrated will help us strengthen our transport planning processes.

(6) The M12 Motorway State Significant Infrastructure Assessment published in March 2021 in the Executive Summary states:

The Western Sydney Airport at Badgery's Creek, and associated development at Western Sydney Aerotropolis, employment lands and the South West Growth Centre, is expected to drive population growth in Western Sydney. To facilitate and cater for this growth, Transport for New South Wales (TfNSW) (the Proponent) proposes to construct a 16 kilometre motorway (the M12) linking the M7 Motorway at Cecil Hills to the Northern Road at Luddenham. The M12 Motorway is a critical infrastructure component for the development of these centres and would provide direct access between the future Airport and Sydney's motorway network, and additional road capacity for predicted traffic growth in the region.

1. Having regard to the evidence, I find that, at all material times, the purpose of the NSW Government was to carry out the broad intention of the WSIP which included traffic and transport infrastructure together with the rezoning of certain areas as part of a coordinated State Government response to the announcement of the WSA in 2014 and continuing. I also find for the same reasons that the actions of TfNSW in acquiring the land for the purposes of the M12 was in the furtherance of that purpose. The goal for the acquisition of the M12 was not merely to provide vehicular movements to and from the WSA but also to make provision for transport related to the intended land use changes which would facilitate commercial, employment and industrial uses around the WSA to leverage the economic opportunities provided by the WSA. Each element had to work in concert, or the goal (the purpose of such works) would not be achieved. To paraphrase the language in Perry at [100], the actions were a continuous and consistent action to give effect to such purpose.
2. The Applicant's contention that the relevant public purpose was not the broader purpose, but rather limited solely to the acquiring authority, in this case TfNSW had power to effect, must be rejected on the evidence.
3. The evidence (as outlined above) does not support a finding that TfNSW (or the departmental predecessors that were responsible for roads in NSW) would have constructed the M12 absent the land use changes. It is apparent from the date of the announcement and the subsequent implementation of the WSIP continuing until the Date of Acquisition that the M12 was intended to accommodate transport for the WSA as well as providing for the growth in the economic activity of Western Sydney more broadly, but particularly in connection with commercial uses around the WSA.
4. Until the announcement of the WSA the State Government had made no movement towards providing such road infrastructure in this locality. The lack of road infrastructure was one of the reasons that the investigations into the creation of the South West Growth Area indicated a planning horizon decades into the future.
5. Accordingly, the evidence supports a finding that the road project was intricately linked with the land use changes around the WSA. Absent such land use changes the M12 would not have been developed at this time or in this form.
6. The Applicant also identified that the public purpose should be characterised narrowly for reasons of fairness. Whilst my decision in this matter was reserved, the decision of the Court of Appeal in Noubia was delivered which dealt directly with this factor. I invited the parties, should they wish, to make further submissions, and each party made such submissions. As to the issue of fairness, the Applicant, apart from identifying the relevant parts of Noubia, elected to make no further submissions as to the application of this factor in the determination of the public purpose but relied upon its earlier submissions. In its written submissions in chief the Applicant formulated this consideration in pars 91 and 123.

91. It is also consistent with what he said at [98]: "it may be necessary to identify the scope of what occurs "by reason of" or is "caused by" these things. In these steps also, I do not think there are clear rules, but there may need to be judgments of degree which take into account considerations of reasonableness and fairness." The reasonableness and fairness in the approach to construction in the present circumstances is whether the words "caused by" should be construed so widely as to disregard the increase in value of the land caused by parties other than the acquiring authority on the basis that the carrying out of acquiring authorities public purpose enabled the other party make decisions that had the effect of increasing the value of the acquired land. By comparison, s.55(f) uses the words "by reason of" instead of "caused by". The legislature must have intended that they have different meanings. By reason of includes a connection which falls short of caused by, and in that sense can be an indirect consequence of the carrying out of the public purpose by the resuming authority. This is consistent with the approach of Craig J in MMTR Pty Ltd v Roads and Maritime Services [2015] NSWLWC 177 at [135].

123. Before addressing the factual aspect to that, it is worth adding commentary from the AMP decision at [98]: "[i]t may be necessary to identify the scope of what occurs "by reason of" or is "caused by" these things. In these steps also, I do not think there are clear rules, but there may need to be judgments of degree which take into account considerations of reasonableness and fairness." The reasonableness and fairness in the approach to construction in the present circumstances is whether the words "caused by" should be construed so widely as to disregard the increase in value of the land caused by parties other than the acquiring authority on the basis that the carrying out of acquiring authorities public purpose enabled the other party make decisions that had the effect of increasing the value of the acquired land. By comparison, s.55(f) uses the words "by reason of" instead of "caused by". The legislature must have intended that they have different meanings. By reason of includes a connection which falls short of caused by, and in that sense can be an indirect consequence of the carrying out of the public purpose by the resuming authority. This is consistent with the approach of Craig J in MMTR Pty Ltd v Roads and Maritime Services [2015] NSWLWC 177 at [135].

1. I understand these submissions to be contending that it would not be reasonable to attribute a purpose, other than the narrow purpose of the construction, operation and maintenance of the M12, to the determination of public purpose in this case, as to do so would permit the consideration of an indirect rather than direct consequence. I have accepted that, as a matter of principle, the consequence to which s 56(1)(a) of the Just Terms Act is directed are direct and not indirect consequences. In applying the constraints of that principle to the facts of this case, I have found that the M12 and the acquisition of land to facilitate the M12 was broader than merely a road to facilitate vehicular movements. The broader purpose included coordinated and combined actions which included the rezoning of the land for commercial, industrial and employment purposes to facilitate such broader purpose. As a natural consequence, the public purpose did include the rezoning of land around WSA and therefore any such rezoning was a direct consequence of the public purpose.
2. In considering the scope or range of the public purpose - recognising that it is to be determined at the appropriate level of generality having regard to the principles of reasonableness and fairness - I accept the Respondent's characterisation that a broader public purpose for which the land was acquired is appropriate and there are no matters of reasonableness or fairness that would warrant a narrower characterisation.
3. To the extent that the State or TfNSW was the mechanism by which an element of the public purpose was to be achieved does not operate to limit the scope of the broader underlying goal.
4. Having regard to the evidence that there was a unified goal that characterised the actions subsequent to the announcement of the construction of the WSA, that goal was to facilitate the operations of the WSA and to facilitate commercial, industrial and employment uses around the WSA to leverage the economic opportunities provided by the WSA. This was the public purpose (Public Purpose).
5. The achievement of the Public Purpose required coordinated actions to provide the necessary infrastructure and to facilitate the required land uses by the rezoning of land around the WSA.

Did the Public Purpose cause an increase or decrease in the value of the Acquired Land? If so, is the increase or decrease to be disregarded pursuant to s 56(1)(a) of the Just Terms Act?

1. The decision in Drivas identifies the meaning of the notion "caused by" as used in s 56(1)(a) of the Just Terms Act as involving considerations beyond a purely factual "but for" test. Notions of "cause" are to be understood by reference to the statutory regime as not being conscribed by a purely factual "but for" test. As stated by Kirk JA at [32]-[39], what is required is a causal inquiry. Thus, the causal question needs to be directed to the effects on the value of the land of the carrying out (or proposal to carry out) the public purpose, not to the effects of the proposed acquisition on the particular land.
2. In this case, having regard to my finding above as to the Public Purpose the rezoning of the land was an integral part of the Public Purpose. The change in the zoning of the Acquired Land to ENT from its previous RU2 zoning was "caused" by the Public Purpose in that the increase in value was an increase for which the carrying out of the Public Purpose was relevantly directly responsible.
3. As to the Acquired Land, the evidence of the valuers was uncontroversial. If the Acquired Land was zoned ENT, it would be worth more than if it was zoned RU2 (even taking into account any future potential for upzoning of the land not related to the Public Purpose). Therefore, on the evidence, I find that the zoning of the land as ENT caused an increase in the value of the Acquired Land and the Residue Land that must be disregarded as required by s 56(1)(a) of the Just Terms Act.
4. Consequently, by operation of s 56(1)(a) of the Just Terms Act, it is to be disregarded in the determination of market value.
5. As to the Residue Land, the Applicant also claimed that the impact of the OSO caused a decrease in the value of the land and that the decrease was to be disregarded as required by s 55(f) of the Just Terms Act. For the reasons outlined below at [121]-[130], I reject the Applicant's contention that the OSO formed part of or was influenced in its placement by, the M12. That is, there is no evidence to which the Applicant could identify that the OSO was part of the Public Purpose.
6. Therefore, I do not consider that the impact on value of the land by virtue of the presence of the OSO is required to be disregarded by force of the application of ss 55(f) or 56(1)(a) of the Just Terms Act.

On what basis is the Acquired Land to be valued?

1. The land must be valued taking into account its potentialities. On the basis that the rezoning and the M12 are to be disregarded pursuant to s 56(1)(a) of the Just Terms Act there remained a dispute as to how such a disregard affected the potentialities of the land.
2. The Applicant contended that, notwithstanding the s 56(1)(a) disregard, the land should be valued on the basis that it had the potentiality as at the Date of Acquisition to be rezoned for some higher order commercial uses akin to an ENT zoning. The argument was that, absent the ENT zoning there was a reasonable expectation in the market that a rezoning would have occurred at around the same time as the disregarded rezone (or alternatively, be rezoned at the latest by 2026, being the date upon which an airport such as the WSA would come on line). The underlying assumptions in this contention was that the disregard would be made, but all of the underlying factual scenarios such as political will, scoping studies, funding, infrastructure design and the like, would have been undertaken such that an airport would be announced, and work undertaken to construct it would commence at the same rate and with the same completion dates as that proposed by the WSA. As an alternative, the Applicant contended that the airport would not be precisely the same, but would be something similar to the WSA having the same effects on rezoning due to the presence of the assumed airport.
3. On the above basis, the Applicant contended that even with the disregard, the value of the land would be undertaken on the basis of zoning with the potentialities of an ENT zone.
4. The Respondent contended that there was a potentiality, absent the Public Purpose, that the land could be rezoned as part of the Council's ambitions to extend the South West Growth Area. However, that rezone for land would not have occurred until at least 2046 and on the joint evidence of the valuers such a timeframe was too distant from the Date of Acquisition to have any impact on the value of the land.
5. Before turning to the evidence in this case, the proposition put by the Applicant is one that is not open on the statutory language. The requirement that the increase in value be disregarded requires that the underlying factors that are integral to the Public Purpose that gave rise to the disregard ought also to be disregarded. If a dispossessed owner was able to rely upon the underlying factors remaining there would be no disregard. Notwithstanding, I will also address the evidence that was available in connection with this issue.
6. The Applicant's contention as the circumstances to be assumed in the valuation exercise cannot be accepted. The evidence given by the Applicant's town planner, Mr Haskew, was based upon an assumption that the Commonwealth Government would immediately take steps itself to create an airport which would be fully operational by 2026. This assumption is not made out on the evidence. The evidence was that, notwithstanding that the Commonwealth Government had for many years being acquiring land for the purposes of an airport, such an ambition was not brought to fruition until 2018. The inference of this history being that the Commonwealth Government had no appetite to undertake the development of an airport in Western Sydney without the support of the State Government.
7. Further, notwithstanding what can be drawn from past action with respect to an airport, there is simply no evidence that the Commonwealth Government, even if it wished to do so, have been in a position to commence construction as at the date of the announcement in 2018. The commencement of construction in 2018 is essential in order to make good the Applicant's contention of rezoning by 2026.
8. Finally, there is no evidence that the scope and nature of the infrastructure proposed by the WSIP, which was to cater both for the airport demand and the demand of the rezoning, would be carried out. The rezoning, if undertaken in response to a new airport, would have to have regard to the provision of infrastructure to accommodate demand generated by the rezoned land. There is no evidence (nor a rational reason) that the Commonwealth Government would build infrastructure to accommodate demand beyond an airport. Therefore, the likely actuation of any contended rezone could not reasonably be assured, but even if likely, the time required to achieve such infrastructure provision and rezoning would exceed the Applicant's completion date of 2026.
9. The evidence of the town planners was that absent the WSA (or an airport in the same location) the Council's planning relating to the South West Growth Area would have included the Acquired Land being rezoned to permit some commercial purpose. However, any rezoning of the Acquired Land would have occurred at a time no earlier than 2031 (per Mr Haskell) or 2046 (per Mr Mitchell). The evidence of the valuers was largely agreed that potentials that occur up to or beyond 10 years from the Date of Acquisition were unlikely to affect value. I accept this evidence.
10. Accordingly, I am not satisfied that the land at the Date of Acquisition would have had any potential for upzoning that would have affected the value of the land. I accept the submissions of the Respondent, outlined above at [62] that the land is to be valued on the basis of an RU2 zoning with no potential that would affect the value of the land.

What is the determination of valuation of the Acquired Land?

1. For the reasons identified above, the ENT zoning of the land is to be disregarded for the purposes of determining the market value of the Acquired Land.
2. The parties agreed that, if the ENT zoning was to be disregarded, the Acquired Land should be valued as if it was zoned RU2. For the reasons outlined above, I will proceed to determine value on the basis of an RU2 zoning.
3. Each of the valuers considered that the "before" and "after" valuations based upon comparable sales was the appropriate valuation methodology to be applied to the Acquired Land.

Value of land zoned RU2 as at Date of Acquisition - "before" value

1. The valuers determined the appropriate rate per square metre of the Acquired Land on an RU2 zoning as:

(1) Mr Dempsey: $250; and

(2) Mr Lunney: $156.

1. The difference between the valuers turned primarily on their respective selection of comparable sales. Both valuers accepted that it was particularly difficult in this locality to find a sale of a parcel land zoned RU2 that was unaffected by the construction of the WSA. The experts did their best to identify RU2 sales and, if necessary, make adjustments to such sales. I will address each of the sales relied upon by the experts for the RU2 valuation.
2. The sale numbers, the relevant address of the property and the adjustments made to each sale are reproduced in the table Annexure B to these reasons. Where no sale number is attributed, the address of the sale is referenced.

1. Mr Lunney primarily relied upon Sale 22 at 43A Luddenham Road, Orchard Hills. This property was sold in May 2020, had a land area of 51 hectares and an RU2 zoning. The sale price produced a rate of $120/m2. Mr Lunney thereafter made adjustments to this sale for size and a 10% downward adjustment to account for the impact on value of the WSA and SEPP Aerotropolis. He ultimately derived an adjusted rate of $157.70/m2.
2. Mr Dempsey did not consider Sale 22 was comparable as it was a sale to an acquiring authority. It was contended that a sale to an acquiring authority was not an open market transaction, reflecting the unequal bargaining position of the parties.
3. The issue of considering sales to an acquiring authority as a matter of principle is that they are relevant considerations: see Fraietta v Roads and Maritime Services [2017] NSWLEC 11. The question of weight to be given to the transaction, or whether an adjustment is to be applied to a particular sale turns on the facts of each case. In this case, whilst Mr Dempsey has raised the concern in a general sense, I note that he did not identify any particular concern in relation to this particular sale. I further observe that Mr Dempsey himself had relied upon sales to acquiring authorities with respect to his analysis of ENT sales. I do not accept that little weight or a further adjustment is required to render this sale comparable.
4. Further, Mr Dempsey did not consider that an adjustment should be made for the effect of the WSA and SEPP Aerotropolis as there was no market evidence that would permit a relevant quantification of such adjustment. Absent such adjustment for the impact of the WSA and SEPP Aerotropolis, Mr Dempsey identified the adjusted rate for this sale should be $175/m2.
5. I accept Mr Dempsey's criticism of this adjustment. There is insufficient evidence in the sales of what such an adjustment should be (as was accepted by Mr Lunney - the adjustment was based upon his experience as a valuer). The 10% adjustment in the context is significant. Whilst Mr Lunney's extensive experience as a valuer is acknowledged, absent some evidentiary quantification that would justify this size of adjustment, I am unable to accept the adjustment should be made in this case.
6. I find that the appropriate rate to be derived from Sale 22 is $175/m2.

1. Sale 12 was purchased on the basis that it would in the very near future be rezoned for Agribusiness, a zone with more commercial uses than RU2 land. I find that, the imminence and certainty of the rezone together with the broader range of commercial uses permitted, influenced the sale price such that it is not comparable to the Acquired Land and is of no assistance in the determination of this matter.

1. Sale 13, like Sale 12 had been identified for imminent rezoning for employment purposes. For the same reasons identified in connection with Sale 12, I do not consider this sale to be of assistance.

Kemps Creek and Orchard Hills Sales (unnumbered)

1. Mr Dempsey identified these sales as part of the joint conferencing process. They comprised a number of sales to a single (joint) purchaser who was accumulating the lots to create a conglomerated lot. In his evidence, Mr Dempsey accepted that such sales were not related to the same market as that of the Acquired Land and advised that the reliance upon these sales was, in as much as it helped, of marginal relevance and was largely only relied upon to identify the difficulty in identifying rural sales.
2. For those reasons, I find these sales are not comparable and are of no assistance to the task of determining the value of the Acquired Land.

1. This sale related to land zoned RU4 which permitted a greater range commercial uses than the RU2 zone. The sale was purchased for the carrying out the commercial use of landscape supplies. The sale was also located in a different local government area. The sale site area was around 3 hectares and sold to an adjoining owner.
2. The analysed sale indicated a rate of $276/m2 which Mr Dempsey adjusted for time and derived a rate of $284/m2. He further adjusted the sale downwards to take account of the greater range of commercial uses by 15%, reflecting a comparable rate of $240/m2.
3. The adjusted rate was only marginally below the agreed rate for ENT land at $280/m2 (see [90] below). The range of uses in the ENT zone, together with the proximity to the economic generator of the WSA, would seem to dictate a larger rate per square metre than that for the Acquired Land valued on the ENT basis. This factor causes me to be wary of its comparability. In this regard, I note that Mr Dempsey made no adjustment for size or considered whether there was an adjoining owner premium component in the purchase price. Absent any relevant adjustments for these factors, I consider this sale to be an unreliable comparison and of no assistance in the determination of the value of the Acquired Land.
4. Having regard to the comparable sales considered above, Sale 22 was to be the only sale of assistance in determining the value of the Acquired Land. For the reasons I have identified above, I do not accept the adjustments made by Mr Lunney for the impact of the WSA and SEPP Aerotropolis and would adopt the rate of $175/m2 as an appropriately adjusted rate to render it comparable to the Acquired Land.
5. For the above reasons, I determine the "before" rate/m2 as $175.

"After" valuation on the assumptions as to Public Purpose

1. As was noted by the Respondent in its submissions and in Mr Lunney's determination of valuation of his report in chief and the valuers' Joint Report, the rate to be applied in the "after" scenario is the rate for ENT zoned land. During the course of the proceedings, the experts agreed that the base value for ENT zoned land was $280/m2, subject to adjustments for the impact of the topography and for size. In order to determine the relevant rate for ENT zoned land, it is necessary that I determine whether such adjustments should be made.
2. At the conclusion of their evidence, it became apparent that in the event that the land was to be valued on the basis of the ENT zoning, both valuers agreed that the sale of land at 869-885 Luddenham Road, Luddenham (Sale 1) was the appropriate comparable sale. In the Supplementary Joint Report of the valuers it was agreed that Sale 1, adjusted for time, reflected a rate of $280/m2.
3. Mr Lunney considered that a further adjustment to Sale 1 was required to render it comparable to reflect the difference in topography between the Acquired Land and Sale 1. The Acquired Land, he contended, was steeper topographically, thereby making it more expensive to develop as earthworks would be required. Sale 1 was by contrast relatively flat and therefore less extensive earthworks would be required to develop that land. Mr Lunney considered a downward adjustment of 5%. He accepted that the determination of the quantum of such adjustment required a degree of value judgment.
4. Mr Lunney further considered that there should be a downward adjustment of 5% for the differential in size between Sale 1 and the Acquired Land with Sale 1 being approximately one third the size of the Acquired Land.
5. Applying each of the adjustments for size and topography, Mr Lunney contended for a rate of $260/m2.
6. Mr Dempsey did not consider that either adjustment was required. As to topography, absent some detailed analysis of the development proposal for the Acquired Land, the impact of topography on development costs could not be understood. As to size, there was no market evidence to support the requirement for such adjustment. Mr Dempsey maintained the rate of $280/m2.

Should Mr Lunney's evidence be treated with caution?

1. A general criticism was levelled at Mr Lunney with respect to his adjustments asserting that they were opaque, rather than explicit, and therefore contrary to the approach countenanced in Marroun v Roads and Traffic Authority [2012] NSWLEC 199 at [196]. The crux of the criticism was that, whilst a strict application of Mr Lunney's adjustments produced a rate of $266/m2, he applied a rate of $260/m2 without giving reasons.
2. I do not accept this criticism. The position taken by Mr Lunney was apparent and clear in his oral evidence where he explained (Tcpt, 11 May 2023, p 207(19-31)):

..the sale property in question, Sale 1, is a flatter topography relative to the parent parcel. It requires less bulk earthworks, less levelling and retaining. That will be less extensive and less expensive relative to the parent parcel. To bring that to account, I've adjusted its rate of $280 per square metre down by 5%. That adjustment of 5%, together with the adjustment of 5% which I made on account of size gives 10%. The total adjustment down to 10% takes the $280 per square metre to $252 per square metre.

Where I think the confusion lies, and I apologise to the Court if I wasn't clear in what I had set out, what I'm saying at paragraph 30 of that joint report is despite obtaining an adjusted value of $252, I nonetheless leave my rate at 260 rather than revising it down to 252.

1. Both parties agreed, as do I, that valuation practice adopts adjustments for size typically because there is a larger pool of potential purchasers for land which is smaller and a larger market means more competition: Croghan v Blacktown City Council [2019] NSWLEC 2; (2019) 237 LGERA 227 at [104] and [153].
2. However, in this case, the Applicant contended that the evidence did not support the typical adjustment and that, to the contrary, the evidence disclosed that the larger the sites, the less the need for amalgamation and additional transactional costs associated with multiple purchases, thereby providing a large pool of potential purchasers.
3. With respect to the adjustment for size, I accept the submissions of the Respondent, that Mr Dempsey's evidence as to the availability of comparable sales to rebut the orthodox adjustment for size, must be viewed in the context of his oral evidence in cross-examination.
4. Mr Dempsey relied on the sales of 155, 175 and 145 Lawson Rd (Sales 3, 4 and 5) - lots of approximately 2 hectares in size - as evidence that "smaller sites are being amalgamated to create a larger site". He accepted under cross-examination that it was a "possibility" that the prices paid for the separate lots was "perfectly consistent with the purchaser facing competitive pressure from numerous potential purchasers seeking a small lot".
5. As to Mr Dempsey's reliance upon the 23 sales of smaller lots he accepted under cross-examination that he had not provided a comparator purchaser for a large holding to indicate that the price paid for an agglomeration of smaller holdings would not involve a premium. Consequently, he accepted that he had no basis for concluding that the purchasers were not paying a premium in purchasing small sites.
6. In light of that evidence, I prefer the evidence of Mr Lunney as I am unable to accept that the evidence establishes a contrary proposition in the market. Accordingly, I accept that Sale 1 should be further adjusted for size by 5%.

1. As to whether an adjustment should be made for topography the experts both agreed that the topography of Sale 1 was flatter than the Acquired Land. This proposition was confirmed by me in the inspection of Sale 1 and the Acquired Land.
2. Mr Dempsey contended that dispute as to the adjustment turned on whether an adjustment should be made absent detailed assessment by qualified engineering and costing experts. It was contended that any adjustment on material other than such expert material would be little more than speculation. Notwithstanding these factors, Mr Dempsey accepted in cross-examination that it was logical that a site that required less soil to be moved would have a lesser purchase price - although precisely by how much would be a guess.
3. As a matter of logic, as accepted by Mr Dempsey, a purchaser will assume that it will cost more to develop the Acquired Land due to its topographic features. I find that a natural and reasonable extension of that logic is that they will pay less for the Acquired Land than Sale 1.
4. How to quantify the quantum of that lesser amount is to be determined by taking into account the nature of the feature under consideration. I do not consider it reasonable that a purchaser for vacant land such as the present one would not enter into the market for its purchase without undertaking the timely and expensive exercise of engaging engineers and quantity surveyors. A valuer with experience in a market such as that for the Acquired Land is competent to make a reasonable estimate of the range of values for that land taking into account an adjustment for topography.
5. I accept the evidence of Mr Lunney that a purchaser would adjust the rate for the Acquired Land by a percentage amount rather than a fixed amount, and that such percentage would be in the order of 5%.
6. For the reasons identified above, and accepting the evidence of Mr Lunney as to the resolution in the Applicant's favour, I determine that the rate for the Acquired Land assuming an ENT zone is $260/m2.

Should a different rate be determined for land the subject of the Easement?

1. Lot 26 is burdened by a 60.96 metres wide Easement. The Easement cuts diagonally across the northwest corner of the land isolating a triangular pocket of land.
2. The valuers agreed that, if the land was to be valued as RU2 land with agricultural or rural land uses as opposed to rural land with development potential in the near future, the existence of the Easement would have little effect upon the value of the land.
3. In light of my finding above that the Acquired Land in the "before" scenario is to be valued as RU2 land, with no proximate potential for upzoning to a zone that would permit development of the type that would be affected by the location of the Easement, I make no adjustment for the impact on value of the presence of the Easement in the "before" assessment of value.
4. As to the "after" scenario, the development potential of the land for ENT purposes may be affected by the location of the Easement. However, I accept the evidence of Mr Dempsey that its location towards the boundary, coupled with appropriate incorporation by design into any future development, it would retain both utility and value. Accordingly, I make no adjustment to value on the basis of the impact of the Easement on the "after" scenario.

Was there an increase or decrease in other land by reason of the Public Purpose pursuant to s 55(f) of the Just Terms Act?

Determination of compensation for land adjoining Acquired Land

1. The Applicant claimed compensation pursuant to s 55(f) of the Just Terms Act for a diminution in value of the Residue Land caused by the carrying out of the Public Purpose with respect to impact occasioned by: the impact on access to the Residue Land; and the location of the OSO.
2. The Respondent disputed that there was any such diminution on the facts of the case.

Was there a diminution in value caused by the Public Purpose by reasons of the alteration to the access?

1. As to the issues of access the evidence demonstrates that upon completion of the construction of the M12 the Residue Land would have access via a dedicated public road. That level of access would, on the evidence of both valuers, be sufficient and comparable to the subject level of access such that once constructed it would not affect value.
2. However, in the intervening period, access to the Residue Land is affected by the construction zone and requires pre-arrangement with the construction contractors. This degree of complication creates a degree of inconvenience that would reflect in a loss of value for that period of inconvenient access.
3. Both valuers considered that the sum representing that loss of value would be nominal. Mr Dempsey determined this as a percentage diminution in value of the Residue Land's value. Mr Lunney considered it to be a nominal sum in the context of it being a short period of time and a mere inconvenience rather than a denial of access. He considered that such sum would be represented by an amount between $10,000 and $100,000.
4. I accept the evidence of Mr Lunney. A percentage of land value is an unreasonable sum to represent a temporary inconvenience. I do, however, adopt the sum of $100,000 to take account of the period of construction and the time for the creation of the public road which, whilst fixed in result, is not definitively fixed in the length of time.
5. Accordingly, I find that the Applicant is entitled to compensation pursuant to s 55(f) of the Just Terms Act in the sum of $100,000.

Was there a diminution in value caused by the Public Purpose by reasons of the designation of the OSO on the Residue Land?

1. The Applicant was unable to identify any evidence that established that the OSO was located on the Residue Land by virtue of the location of the M12. The Applicant relied upon the drawing of an inference from the evidence that the OSO was so located due to the fixing of the location of the M12.
2. The evidence discloses that the location of the OSO has not yet been fixed. It is identified in the SEPP Aerotropolis as "Outer Sydney Orbital (Under Consideration)". Further, it has not been designated as land reserved for a road in the SEPP Aerotropolis or any other planning instruments. The evidence discloses that the OSO was the subject of consideration independent of the M12. The proposed location of the OSO had varied over time. The current location at the Date of Acquisition had been nominated after its previous location had been abandoned due to the fact that it had impacted upon residential properties. The inference to be drawn is not that the M12 dictated the location of the OSO, but rather the particular features of the land rendered it more suitable than other identified locations.
3. The inference contended for by the Applicant is not open on the evidence available.
4. However, even if the inference was available, it is necessary that the location of the OSO be so determined by reason of the carrying out of, or the proposal to carry out, the Public Purpose for which the land was acquired. The Applicant contended that the reference in s 55(f) of the Just Terms Act "by reason of" was a broader consideration than the use in s 56(1)(a) "caused by". I do not accept that such a construction is open. Whilst the words used in each section are different the context and subject matter of the Just Terms Act does not permit a construction that would produce a lesser test for determining compensation for land retained by a dispossessed owner than the land actually acquired. Whilst I acknowledge that a different formulation of words is used in each section, those words in essence have the same meaning when read having regard to the context and purpose of the Just Terms Act.
5. Therefore, it is necessary for the Applicant to establish that the Public Purpose (as identified above at [51]) caused the loss in value occasioned by the location of the OSO. In light of the determination of the Public Purpose, the location of the OSO and its impact on value does not arise by reason of the Public Purpose, it has no connection to the achievement of the Public Purpose - but, even if the inference that the OSO was located by reference to the location of the M12 is accepted, such a decision was made by an authority in response to the acquisition and is therefore not a matter subject to the statutory disregard: Drivas at [88].
6. The evidence that related to the impact of the OSO upon the determination of value differed depending upon whether it was considered to have been caused by the Public Purpose. Mr Dempsey considered a downward adjustment of the "after" value across the whole of the Residue Land was appropriate as it was an impact caused by the carrying out of the Public Purpose. Mr Lunney ascribed a 10% downward adjustment on the land occupied by the OSO designation in both the "before" and "after" scenarios as he approached the impact of the OSO as being independent of the Public Purpose and therefore an influence on value in both scenarios. Mr Lunney ultimately accepted that the percentage value did contain an element of value judgment and that the range of impact could reasonably be between 10-20%.
7. For the reasons outlined above, I have found that the OSO was not caused by, or located by reason of, the Public Purpose. As a consequence of that finding the claim for the impact of the OSO pursuant to s 55(f) of the Just Terms Act cannot succeed. As a further consequence, the calculation of the diminution in value as a consequence of the OSO cannot be measured across the whole of the land affected by the OSO together with the Residue Land. On the basis of my finding as to Public Purpose, the impact on value of the land occupied by the OSO is present in both the "before" and "after" scenarios and is limited to the determination of the relevant rate/m2 for the area of land identified as the OSO.
8. As to the appropriate rate, I have concerns with respect to the 30% identified by Mr Dempsey. Such a rate assumes a degree of certainty as to the location of the OSO and therefore a high discount. For the reasons identified above, the OSO is not certain but has been identified as "under consideration", and as a consequence of that uncertainty I find that the market is unlikely to treat the OSO as effectively unavailable for future development.
9. As to the rates identified by Mr Lunney, I accept his evidence that the market would consider the OSO land to be of some value, but tempered by the risk of either acquisition in the future or delays in obtaining development consent. Whilst I acknowledge that Mr Lunney identified a range of percentages that would be applicable, his acceptance of the subjectivity of where within that range the reduction should be fixed causes me to accept a percentage figure which best favours the dispossessed owner, the evidence being that the fixing of such a rate is within the range of reasonable valuation expectations. Accordingly, I adopt a rate for the OSO land that is 10% less that the rate for the land unaffected by the OSO in both the "before" and "after" scenarios.
10. For those reasons, the value of the land affected by the OSO is to be valued in both the "before" and "after" valuations at 10% of the otherwise determined rate/m2 in each scenario.
11. Accordingly, adopting the rates I have identified above, the compensation for the Acquired Land is to be determined on the following basis:

What is the quantum of the claim for disturbance to which the Applicant is entitled?

1. The parties were generally agreed on the determination of the claim for disturbance having regard to the evidence. There was agreement that the Applicant was entitled to disturbance in the following amounts:

(1) $99,119.78 in legal costs and disbursements (being the GST exclusive amount of the sum of the Colin Biggers & Paisley invoices, including disbursements, but excluding those invoices dated 31 May 2022 onwards); and

(2) $38,860 in valuation fees (being the GST exclusive amount of the sum of the Dempsey valuation invoices).

1. The Applicant contended that it was entitled to a further sum of $54,947 (excluding GST) relating to legal costs and disbursements in the invoices 352467 and 352456 issued by Colins Biggers & Paisley as disturbance pursuant to s 59(1)(a) of the Just Terms Act, which provides:

loss attributable to disturbance of land means any of the following -

(a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land...

1. The disputed invoices were tendered. The detail in the invoices disclosed that they related to the bringing of proceedings for mandamus in the Supreme Court seeking orders requiring the Respondent to give notice of the offer of compensation as required by the Just Terms Act (Mandamus Proceedings).
2. The Applicant contended that the costs relating to the Mandamus Proceedings were relevantly disturbance as the time limit for the provision of a valuation by the Valuer-General as required by s 42(1) of the Just Terms Act was significantly exceeded. In order for the procedures under the Just Terms Act to be followed, the Applicant commenced those Mandamus Proceedings. Such a need for the proceedings arose entirely out of the compulsory acquisition and therefore is within the inner boundaries of being "in connection" with the acquisition. As was stated in Eureka Operations Pty Ltd v Transport for New South Wales [2021] NSWLEC 41 at [154], the words "in connection with" as they are used in s 59(1)(a):

...this construction does not turn on the contractual relationship of the retainer of the consultant or whether it is recoverable as a disbursement, but rather whether it is reasonably necessary to enable the legal services to be provided in connection with the compulsory acquisition of the land, including, but not limited to, any offer of compensation.

1. I reject this claim for disturbance.
2. The disputed sums relate to proceedings in the Supreme Court against a party that was not a party to these proceedings, namely the Valuer-General or an acquiring authority in connection with the acquisition of the Acquired Land. Whilst the acquisition process under the Just Terms Act relies upon a valuation being issued by the Valuer-General as a precondition to the making of an offer of compensation, the acquiring authority has no control over the actions of the Valuer-General.
3. The fact that a valuation from the Valuer-General is required in order for the acquiring authority to make an offer of compensation is not relevantly "in connection with the compulsory acquisition", rather it is in connection with the process of the making of the offer. The types of costs contemplated by s 59 of the Just Terms Act are those relating to the act of acquiring the land and the consideration of the offer of compensation. The mechanisms to achieve either of those things does not extend to proceedings brought against an instrumentality not a party to the acquisition. Accordingly, I do not allow the legal costs of the mandamus proceedings as a claim for disturbance in connection with the acquisition the subject matter of these proceedings.

1. The parties agreed that, if the Applicant succeeded in achieving a determination of compensation in excess of that identified in the proceedings, it would be entitled to its costs in these proceedings. The amount of compensation the Respondent identified in its points of defence came to the sum of $4,138,178.78. The determination of compensation exceeds this sum and therefore an order for costs in the Applicant's favour is warranted.

1. For the reasons herein, I determine that the Applicant is entitled to compensation in the following amounts:

(1) Section 55(a) market value: $9,523,500;

(2) Section 55(f) injurious affection to Residue Land at the Date of Acquisition: $100,000; and

(3) Section 59(1)(a) and (b) disturbance: $137,979.78.

(1) Compensation under Part 3 Division 4 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Just Terms Act), for the compulsory acquisition of the Applicant's interest in land in Certificate of Title Lot 7 Deposited Plan 1270586 (formerly part of Lot 26 in Deposited Plan 604586) formerly known as 777-819 Luddenham Road, Luddenham NSW, is determined in the sum of $9,761,480 plus statutory interest being payable under ss 49 and 50 of the Just Terms Act.

(2) The Respondent is to pay the Applicant's costs of the proceedings; and

(3) The exhibits are returned.

Annexure A

Annexure B