Hoy v Coffs Harbour City Council

Land and Environment Court (NSW)|2014-06-05|Before: Mr P

The applicant's evidence 23Mr Connelly states that the draft LEP adopted similar zoning patterns to that proposed under Amendment 24. In the opinion of Mr Connelly, the gazettal of the draft LEP was likely at the time of acquisition of the Land as the Exibition was completed on 26 October 2012 and the Government had a firm desire at that time to expedite the making of the Standard Template LEPs. By 13 December 2012, council resolved to submit the draft LEP for gazettal. 24Mr Connelly states that LEP 2000, the draft LEP and DCP 2004 would have applied to the Land at the date of acquisition, had it not been for the proposed public purpose. Under LEP 2000, the Land would have been zoned 2A. This zoning disregards constraints such as flooding applicable to the land. LEP 2000 does not adopt a refined approach to zoning boundaries but generally adheres to a whole of property - cadastral boundary approach for urban type zones except for some situations in relation to "Deferred land". The Deferred matters generally relate to land, which is the subject of Environmental Protection zoning. 25Mr Connelly accepts that DCP 2004 provides a target yield of 106 lots for the Land. The 106 indicative yield is based on 8 dwellings per ha. The yield is calculated based on the approach in DCP 2001 (p 11) to exclude flood areas and other constraints from calculations for lot yield. Mr Connelly notes that other subdivisions in the locality have densities in excess of 10 dwellings per ha and the yield of 8 dwellings per ha target is somewhat "rubbery" as council has supported applications in some cases for much more than the target yield and in other cases much less. 26Mr Connelly also notes that a range of State Environmental Planning Policies applied to the Land at the date of acquisition. Those policies include:

The respondent's evidence 34Mr Ryan states that a low density residential zoning, consistent with the immediately adjoining residential land and as a transition to the rural residential to the west, appears appropriate for the non-constrained parts of the Land. The relevant zone would therefore be 2A Residential Low Density under LEP 2000. Whilst it is possible that the constrained northern part of the Land may have been zoned 7A Environmental Protection (consistent with other land in the vicinity affected by creek lines), Mr Ryan has had regard to the land directly to the east of the site, affected by the same creek line, traversing the Land, where the constrained parts are zoned 2A rather than 7A, to conclude that the whole site is likely to have been zoned 2A. 35DCP 2004 applies to residential development on the adjoining lands and the provisions are relevant to determining the development potential of the Land. It follows that if the adjoining lands were zoned to permit residential development, those provisions would apply equally to the Land. The most relevant control affecting the development yield on the adjoining sites is the "dwelling yield" prescribed in Map 7 Target Density. Based on this methodology, and excluding the areas of the Land shown as constrained on Map 5, approximately 11.5 ha of the Land remains to be developed. Applying the density of 8 dwellings per ha to this area results in a figure of 92 dwellings as the "minimum dwelling yield" for the unconstrained parts of the Land. This minimum yield would be subject to the allowance in Part 3 of DCP 2004 of an additional 15%, representing the "maximum dwelling yield" and resulting in a yield of 106 dwellings for the Land. Lots may be developed down to a minimum size of 400 sq m (or 500 sq m if fronting a cul-de-sac head) under the Subdivision DCP and various buffer distances should be maintained under DCP 2004 from constraints such as creeks (20m) and areas to be protected (40m). 36Mr Ryan states that it would be his advice to a prospective purchaser that this maximum yield should not be viewed as being "as of right" and would be subject to detailed site assessment to confirm the capability of the unconstrained parts of the Land. It would be necessary to obtain appropriate specialist advice in the areas of ecology, hydrology, bushfire and the like to confirm the extent of potential site constraints as they may affect the subdivision layout and yield. The lot yield prescribed under DCP 2004, based on the "developable area" of approximately 11.5 ha is between 92 and 106 lots. In the absence of that detailed information Mr Ryan would advise a prospective purchaser that the analysis contained in DCP 2004 and other mapping (bushfire etc) provides reasonable broad level information on the applicable site constraints. 37The draft LEP had been publicly exhibited and therefore was a consideration at the date of acquisition. Its prospective zonings for adjoining lands were therefore indicative of the prospective zoning of the Land were it not required for its public purpose. Based on the same rationale described for LEP 2000, Mr Ryan concludes, that under the draft LEP, the Land would have been zoned R2 Low Density Residential in its unconstrained parts and the constrained northern parts of the site would have been zoned E2 Environmental Conservation.

Findings - lot yield 38The planning evidence raises a number of separate issues, however we agree with the approach adopted by Mr Ryan for a number of reasons. 39First, there was agreement by Mr Paris that of the scenarios identified by Mr Connelly, the highest and best use of the Land was reflected in Scenario A. Most of the evidence and discussion by the experts focussed on this scenario. 40Second, we accept that any prospective purchaser of the Land would have highest regard to the provisions of LEP 2000 and DCP 2004 as these were the planning documents that applied at the acquisition date. The draft LEP would be a matter that would be considered by a prospective purchaser however at the acquisition date the draft LEP had only just ceased exhibition. We do not accept the evidence of Mr Connelly that it should be regarded as "likely" as there had been no assessment of the submissions, no consideration by the council and, importantly, no resolution to refer the draft plan, in the form as exhibited, to the Department of Planning for gazettal. 41There was agreement that the draft LEP was prepared to generally transfer the zonings under LEP 2000 to the nearest corresponding zone in the Standard Template form of the draft LEP. Mr Ryan and Mr Connelly agreed that the zoning of the Land, under the draft LEP, would likely be that of the adjoining residential land, being Zone R2 Low Density Residential. While this zoning provides for a minimum 500 sq m subdivision standard, the evidence suggests that the subdivision of the Land to this, or a similar size, was unlikely. Mr Ryan maintains that the demand for small lots in this location is "limited". This is supported by the applicant's valuer, Mr Paris where he rejects the small lots scenario of Mr Connelly (Scenario B) in preference to the larger lot scenario (Scenario A) because of the lower average gross realisation for the extended time to dispose of the larger number of small lots. 42Third, the suggestion by Mr Connelly that the council regularly varied the requirement for subdivisions in DCP 2004 was not substantiated, in our understanding of the evidence. In any event, it should not follow that even if the council regularly varied DCP 2004 standards that the Court should necessarily follow this approach. A variation to a DCP standard is not an irregular event but to give any weight to the approach of Mr Connelly, the subdivision standards in DCP 2004 would have to be essentially abandoned by the council. The evidence does not indicate this to be the case. Mr Connelly relies on the subdivision approvals set out in Mr Bennell's historical planning report that identifies subdivision approvals in the area that he was aware of. In accepting that the list is not exhaustive, it was accepted that the approvals nonetheless represent a sample of the approvals. Mr Bennell's report states that "of the 7 applications where a target (minimum) DCP density applies, two have approved lot yields below this range, two are within the range and two (small subdivisions) are one lot over the range. The other subdivision which is above the range was lodged after the acquisition date and currently remains undetermined." 43When cross-examined on Mr Ryan's analysis, Mr Connelly did not dispute his conclusions and could not indicate any other approved subdivision to support his position. 44Mr Tomasetti submits that the subdivision at 465A Pacific Highway supports Mr Connelly's approach. The subdivision was approved on September 2013 for 221 residential lots when the South Coffs DCP provided for a minimum of 131 lots. The Northern Joint Regional Planning Panel accepted that the density "whilst significant, is acceptable and has been achieved by carefully balancing the site constraints and opportunities for residential subdivision". 45The variation could be seen as significant, however this one example is not sufficient to support Mr Connelly's assertion that the council regularly varied the requirement for subdivisions given the other examples, in the vicinity of the Land, that support the opposite conclusion. Some care needs to be taken in blindly accepting that the yield from this approval of a development application, that has presumably been the subject of sitespecific negotiation and discussion with the council, establishes a regular approach to subdivisions by the council. We remain of the view that a prospective purchaser would rely on the relevant planning controls (LEP 2000 and DCP 2004) to formulate the market value of the Land. 46Fourth, and for any prospective purchaser, it must be accepted that the council would apply DCP 2004 in the proper manner. The role of a DCP is set out in some detail by McClellan CJ in Stockland Development Pty Ltd v Manly Council [2004] NSWLEC 472 at pars 83 to 92. Relevantly, at par 87, His Honour states: A development control plan is a detailed planning document which reflects a council's expectation for parts of its area, which may be a larger area or confined to an individual site. The provision of a development control plan must be consistent with the provisions of any relevant local environmental planning. However, a development control plan may operate to confine the intensity of development otherwise permitted by a local environmental planning. 47The weight to be given to a DCP is addressed in Zhang v Canterbury City Council (2001) 115 LGERA 373. Spigelman CJ, at par 75, raises three important propositions. First, and although the Court has a wide-ranging discretion, the discretion is not unfettered. Secondly, the provisions of a DCP are to be considered as a fundamental element in, or a focal point to, the decision-making process, particularly, if there are no issues relating to compliance with a local environmental plan. Thirdly, a provision of the DCP directly pertinent to the application is entitled to significant weight in the decision-making process but it is not in itself determinative. While s 79C(3A) provides flexibility in the application of DCP's, this subclause does not apply, in this case. 48We do not accept that it could be reasonably argued that a prospective purchaser would entertain the purchase of the Land at a density other than that contemplated by DCP 2004 on the basis that the council would likely forego the density standards in this DCP. Mr Connelly described the approach of the council to the consideration of subdivision applications, in his evidence, as "rubbery". In his oral evidence, Mr Connelly, in response to a question from the Bench that asked "So long as it's nicely laid out, you could cram in an as many houses as you wanted and council wouldn't bother" replied by stating that "That has been council's practice". The evidence does not suggest such an approach or even, if there were such an approach, it would not be a reason for any sensible prospective purchaser to assume it would be followed for any future subdivision of the Land. 49Fifth, and in relation to the State Environmental Planning Policies, guidelines and Strategy identified by Mr Connelly, we are satisfied that these documents would not influence any prospective purchasers to adopt the approach of Mr Connelly. In accepting the general proposition that the Court is not limited to the planning document identified in s 79C(1) of the Environmental Planning and Assessment Act 1979 (the EPA Act) as the sole means of determining whether a development is in the public interest, it must be accepted that environmental planning instruments should be given greater weight in the determination of a development application, unless there is a compelling reason not to do so. This is set out in Terrace Towers Holdings Pty Limited v Sutherland Shire Council [2003] 129 LGERA 195, where it states: 81 In any event, matters relevant to the public interest touching a particular application are not confined to those appearing in published environmental planning instruments, draft or final. Obviously such instruments carry great and at times determinative weight, but they are not the only source of information concerning the public interest in planning matters. The process of making such instruments is described by Beazley JA in Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1997) 95 LGERA 33 at 42-44. Nothing in the Environmental Planning and Assessment Act stipulates that environmental planning instruments are the only means of discerning planning policies or the "public interest". For one thing, the government is not the only source of wisdom in this area. A consent authority may range widely in the search for material as to the public interest (see generally Shoalhaven City Council v Lovell (1996) 136 FLR 58 at 63; Patra Holdings Pty Ltd v Minister for Land and Water Conservation (2001) 119 LGERA 231 at 235). 50While there can be no doubt that the strategic planning documents referred to by Mr Connelly are extremely valuable for the long-term planning of the area, we do not accept that they should be given any significant weight in the determination of the subject development application, particularly when these documents are, in general, used to identify matters that should be reflected in the more detailed planning of the area. They are not documents that are drafted for the purpose of considering a single development application. The documents essentially guide the planning process and, more specifically, the preparation of LEP's and DCP's. To give the strategic planning document the weight suggested by the Mr Connelly, in our view, is overstating their role in the consideration of a development application. 51For these reasons, we are of the view that a prospective purchaser would rely on the density available through the calculations set out in DCP 2004. In strictly applying DCP 2004, there was little difference between the lot yield calculated by Mr Ryan or Mr Connelly. The lot yield prescribed, based on the "developable area" of approximately 11.5 ha is between 92 and 106 lots. While there is some merit in the comments of Mr Ryan that the maximum yield of 106 lots should not be viewed as being "as of right" and would be subject to detailed site assessment to confirm the capability of the site, we accept that, to adopt a conservative approach, 106 lots is the appropriate lot yield for the Land.

The rural residential lot /BioBanking lot 52The residual lot is generally that part of the Land identified on Map 4 of DCP 2004 as having constraints. Mr Connelly describes that part of the Land as a rural residential lot with a dwelling house entitlement and as the BioBanking lot, given the nature of the land and its mainly 1:100 year flood inundation characteristics. Mr Connelly explains that BioBanking is a market-based scheme that provides a streamlined biodiversity assessment process for development, a rigorous and credible offsetting scheme as well as an opportunity for rural landowners to generate income by managing land for conservation. 53Mr Ryan referred to the requirements under Natural Environment Strategy in DCP 2004 where it states: + All areas to be protected are to be dedicated to Council as development occurs. 54While not disputing that the residue could be used as a rural residential lot with a dwelling house entitlement, Mr Ryan maintained that, given the identified constraints and the absence of any studies to address those constraints, the question whether it could be used, as suggested by Mr Connelly, is not able to be answered at the time of the hearing. 55On the matter of the DCP requirement that constrained lands are to be dedicated to council, Mr Hemmings explained in his submissions that the council could not require the constrained area to be dedicated to the council free of charge as this would be contrary to s 94 of the EPA Act. There would be no condition of consent requiring this in any consent. However, if the prospective purchaser viewed the residue land as an unacceptable burden in the development of the Land, then it could be dedicated to the council at no cost. 56Mr Hemmings identifies four possible scenarios for the residual lot:

council could acquire the land,
the developer could dedicate the land free of cost,
the land could be included as part of a large residue lot, and
the developer could "get stuck" with the land. 57While the particular scenario likely to be chosen by a prospective purchaser is difficult to determine, we prefer scenario 3 for a number of reasons. First, the evidence of Mr Ryan and Mr Connelly that the potential does exist for the residue lot to be used as a rural residential lot with a dwelling house entitlement. Mr Ryan's support was however conditional on the completion of a number of studies to address the constraints identified in Map 4 of DCP 2004. Second, this approach is consistent with the "just compensation override" described by Biscoe J in Al Amanah College Inc v Minister for Education [2011] NSWLEC 254 at [10]. 58In coming to this conclusion, we find that the constraints identified in Map 4 of DCP 2004 could severely restrict this potential or at worst, deny the opportunity for any development. To realise any potential of the residual lot, the preparation of a number of studies would be necessary and there is no certainty that the residual lot is capable of gaining approval for a rural residential lot with a dwelling house entitlement. In accepting that the residue land must have some value, we find that the amount should only be a nominal amount given the uncertainty of any approval.

The valuation approach 59It is well established that, if comparable sale are available, their direct comparison should provide the conventional method of valuation (Marroun v Roads and Maritime Services [2012] NSWLEC 199 at [196], following Graham Trilby Pty Limited v Valuer General [2008] NSWLEC 217 at [41]; Redeam Pty Ltd v South Australian Land Commission (1977) 40 LGRA 151 at [156], River Bank Pty Ltd v Commonwealth of Australia (1974) 31 LGRA 244 at [484]. 60The comparable sales method of valuation comprises four sequential steps, summarised by Sheahan J in Marroun at [197] and followed by this Court in Tenstat Pty Ltd v Valuer General, Woolworths Limited v Valuer General [2012] NSWLEC 1361 at [36], Adams v Valuer General [2014] NSWLEC 1005 at [29] and Chircop v Transport for NSW (2014) NSWLEC 63 at [35]: Such a direct comparison process requires the accumulation, analysis, adjustment, and application, to the subject site, of genuinely comparable sales. 61A Court depends upon the established expertise of valuer witnesses called on both sides of the case (Marroun at [197]). 62As Sugerman J observed in Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1 at [18,19]: The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant. 63Further, the judicial valuation task is not one of strict adherence to precise arithmetical calculations but is a common sense endeavour satisfactory to the mind of the Court (Commonwealth v Milledge (1953) 90 CLR 157 at [162]). 64Indeed, as stated in Electricity Commission of NSW v Arrow (1994) 85 LGERA 418 at [419] and which may be capable of application to both the expert witness valuer and the judicial valuer: Valuation is not a science. It is an imprecise, opinionative activity involving the consideration of many variables, sometimes with equally legitimate outcomes. 65In Taylor v Port Macquarie-Hastings Council [2010] NSWLEC 113, Biscoe J stated at [11]: In the field of judicial valuations, the task is ultimately evaluative. Within limits, courts do not require every step to be separately justified." Roads and Traffic Authority of New South Wales v Hurstville City Council [2001] NSWCA 11, 112 LGERA 223 at [50]. As Isaacs J said in Spencer v the Commonwealth [1907] HCA 82; (1907) 5 CLR 418 at 442 quoting the Privy Council in Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373 at 391: It is quite true that in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which, being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has had his own set of conjectures, of more or less weight according to his experience and personal sagacity. In such an inquiry as the present, relating to subjects abounding with uncertainties and on which there is little experience, there is more than ordinary room for such guesswork; and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at. 66It is well established that the Court as judicial valuer must 'do the best it can' (Sutherland Shire Council v Sydney Water Corporation [2008] NSWLEC 303 at [96]), considering all relevant factors and making a judgment about them, "a 'best guess' perhaps" (Liverpool City Council v Commonwealth of Australia [1993] FCA 539; (1993) 46 FCR 67 at [83]). 67Effectively, as judicial valuer doing the best it can, the Court considers the building blocks for valuation provided in evidence tendered together with its own inferences and inclinations of opinion, being more or less conjectural, to determine the valuation as a common sense endeavour satisfactory to the mind of the Court. 68The first step, being the accumulation of potentially genuinely comparable sales, seeks to identify and establish a pool of relevant comparable sales from which information may be deduced concerning the value of the subject property (The Trust Company Limited v Minister Administering the Crown Lands Act [2012] NSWLEC 73 at [110,111]; Marroun at [198]; Tenstat at [39]; Adams at [32]). 69Generally, the competing parties produce lists which the Court must sift to identify some which are "truly comparable", or a "reasonably representative" sample, and "relevant and sufficient in volume" (Maurici v Chief Commissioner of State Revenue (2003) HCA 8; (2003) 212 CLR at [111,121]; Marroun at [198]). 70Where the comparable sales differ in substantial ways from the subject property, a process of reasoning is required to establish their utility or otherwise (Leichhardt Municipal Council v Seatainer Terminals (1981) 48 LGRA 409 at [414]; Marroun at [198]). 71In Brewarrana v Commissioner of Highways (No 2) 6 SASR 541; (1973) 32 LGRA 170 at [551], Wells J observed: there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. 72Further, Wells J went on to observe that: The evidence in this case suggests strongly to my mind that, at the initial stages, a valuer will almost certainly look at all known sales in potentially relevant areas, if for no other reason than to discern patterns of prices and changes in price levels over important periods. 73In Trust Company, Pain J identified a failure to set out a clear stepwise process enabling scrutiny of the facts and assumptions relied upon by the valuer in reaching his conclusions, including identification of transactions of potentially low comparability, at [115] and leading to that part of the valuation report not being given any weight, at [119]. 74The second step, being the analysis of potentially genuinely comparable sales, provides a common basis of measurement by seeking to convert all potentially comparable sales to a common basis of expression such as a unitary rate (rate per sq m, rate per ha, etc), improved or unimproved (through allowance for the absence or existence of improvements, etc) and so forth (Marroun at [201]; Tenstat at [45]; Adams at [38]; Chircop at [49]). 75While there can be no hard and fast rule determining that which may be addressed in the analysis step and that which may be addressed in the adjustment step, with individual assessment required on a case by case basis, it may be contemplated that the analysis step lends to reflection of such differences as may be capable of objective assessment or quantification such as, but not limited to, through costing. 76In the context of comparable sales of land for the purposes of subdivision, the analysis step may include reflection of such differences between comparable sales as improvements, settlement terms, requirement for fill, development levies and/or contributions and so forth. 77The third step, being the adjustment of potentially genuinely comparable sales, acknowledges the fact that no two properties are ever identical and seeks to convert those potentially comparable sales to a hypothetical expression of value as a unitary rate in the context of the subject property through the reflection of differences (such as size, location, use, date of transaction) between the respective potentially comparable sales and the subject property (Trust Company at [112]; Marroun at [202]; Tenstat at [47]; Adams at [40]; Chircop at [51]). 78Because properties are never identical, explicit and/or implicit adjustment for differences is obviously necessary but caution is required through making as few adjustments as possible, in a consistent manner, to ensure the reliability of the comparable sale when related to the subject property, with too much adjustment potentially rendering the comparable sale unsafe to use (Graham Trilby Pty Ltd v Valuer General [2009] NSWLEC 1087 at [36], Brewarrana). 79Therefore, as a matter of general valuation principle, fewer adjustments may be preferred to more adjustments and smaller adjustments may be preferred to larger adjustments in rendering comparable sales safe for use. 80In Brewarrana at [551], Wells J observed: It is, in my view, all a matter of degree: some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method. 81Caution in adjustment is required as too much adjustment renders the use of comparables unsafe. Also, where large explicit and/or implicit adjustments are required, particular caution is required for large implicit adjustments (Trilby (2009) at [36]). 82Adjustment is a matter of degree, which must be carefully considered in each case (Marroun at [202]). 83While there can be no hard and fast rule determining that which may be addressed in the adjustment step and that which may be addressed in the analysis step, with individual assessment required on a case by case basis, it may be contemplated that the adjustment step lends to reflection of such differences as may not be capable of objective assessment or quantification such as, but not limited to, through costing. 84In the context of comparable sales of land for the purposes of subdivision, the adjustment step may include reflection of such differences between comparable sales as location, area, time and so forth. 85Making appropriate explicit or implicit adjustments for differences, such as in location, area and time, is accepted valuation practice, and enables valuers to produce, in their evidence, comparable values for the Court to assess. Such adjustment is a deductive process generally based on reasoning which draws on the expertise, skill and experience of the valuer (Trilby (2009) at [35]; Marroun at [203]; Holcim (Australia) Pty Ltd v Valuer General [2009] NSWLEC 225). 86Further, reflecting the significant roles of skill, experience and personal assessment in the adjustment process, the scope for differences in the quantum and direction of adjustment between valuers can be considerable (per Biscoe J in Holcim). 87The "detailed percentage adjustment approach" was preferred to "simply assert(ing) the land value" in Jessica Investments Pty Ltd v Valuer General [2008] NSWLEC 1375 at [6], a view echoed by Pepper J in Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 at [45]: To this it may be added that it is necessary to make explicit adjustments for differences so that the adjustment process is sufficiently logical. An implicit process comprising a single adjustment, rather than separately itemised and reasoned adjustments, risks rejection for want of transparency. 88A transparent process of explicit adjustment leading to an explicable assessment of value is preferred to an opaque process of implicit adjustment leading to an assertion of value (Marroun at [206]). 89In Trust Company, Pain J identified a failure to set out a clear stepwise process enabling scrutiny of the facts and assumptions relied upon by the valuer in reaching his conclusions (including an absence of explicit reasoning in adjustment of comparable sales) at [115] as leading to that part of the valuation report not being given any weight, at [119]. 90Pain J identified: A clearly articulated logical reasoning process which affords transparency and demonstrates an appropriate level of support for each of the key assumptions made as lacking in a valuers report to which Her Honour did not then attribute any weight (Trust Company at [122,124]). 91Such adjustment process should work forwards from the comparable sales to derive an opinion of value, rather than working backwards to justify an opinion of value previously formed (per Jagot J in Trilby (2008) at [25]). 92The fourth step, being the application of those potentially genuinely comparable sales to the subject property, seeks to determine the value of the subject property through a consideration of the relevance (such as being limited, indirect or direct) of the unitary rate derived from those adjusted comparable sales relative to the subject (Trust Company at [114]; Marroun at [208]; Tenstat at [62]; Adams at [56]; Chircop at [54]). 93While all comparable sales evidence may be considered relevant and so cannot be disregarded, the level of relevance of different comparable sales to the subject property may vary leading to the valuer attributing differing weight to different comparable sales (Marroun at [208]). 94In Trust Company, Pain J identified a failure to set out a clear stepwise process enabling scrutiny of the facts and assumptions relied upon by the valuer in reaching his conclusions, at [115] as leading to that part of the valuation report not being given any weight at [119].

The valuation approach The valuers 95Mr Paris, Registered Valuer No 1598, prepared a report on the Land dated 18 November 2013 and gave expert evidence on behalf of the Applicant, adopting a comparable sales approach to the valuation supported by a hypothetical development approach. 96Mr Davis, Registered Valuer No 2646, prepared a report on the Land dated 22 October 2013 and gave expert evidence on behalf of the Respondent, adopting a comparable sales approach to the valuation supported by a hypothetical development approach. 97Each valuer also contributed to a Joint Report dated 9 January 2014 and provided oral evidence amending their respective analyses and adjustments of the comparable sales. Consideration of the valuation approach 98While both valuers undertook a hypothetical development valuation approach as a secondary or support approach to their valuations, this was not addressed in any detail at the hearing, which focused on their adoption of the comparable sales approach to valuation. Accordingly, we do not propose to consider the evidence concerning the hypothetical development valuation approach further. 99Both valuers considered the residue parcel separately to the subdivision of the unconstrained part of the Land, with Mr Paris considering that the residue parcel was of value whereas Mr Davis considered it would be dedicated to the council free of charge.

The valuation evidence 100We have had regard to the process comprising the comparable sales approach to valuation comprising the steps of accumulation, analysis, adjustment and application, outlined in Marroun and being consistent with the decisions in Tenstat, Adams and Chircop. 101Consistent with the authorities, we consider that a valuation which makes an assessment of value based on evidence cited in an explicit and transparent manner is to be preferred over a valuation which seeks to support a previously asserted assessment of value by using the evidence cited, is implicit or is lacking in transparency. Accumulation of the potentially comparable sales 102The accumulation of potentially genuinely comparable sales seeks to identify and establish a pool of relevant comparable sales from which information may be deduced concerning the value of the Land. 103Ten potentially comparable sales were identified by the valuers, being: 198 Graham Road, Sandy Beach Both Valuers 72 Bluff Road, Emerald Beach Both Valuers 17 Moonee Beach Road, Moonee Beach Both Valuers 102 Ainslie Drive, Korora Both Valuers Loaders Lane, Coffs Harbour Both Valuers 6 Halls Road, Coffs Harbour Both Valuers 465A Pacific Highway, Coffs Harbour Mr Davis Pacific Highway, Corindi Beach Mr Paris Shephards Lane, Coffs Harbour Mr Davis 234 Graham Drive, Sandy Beach Mr Davis 104Seven of the potentially comparable sales were inspected by the Court, with Pacific Highway, Corindi Beach, Shephards Lane, Coffs Harbour and 234 Graham Drive, Sandy Beach deleted, by agreement, from further consideration. 105For the residue parcel, Mr Paris provided eleven comparable sales with the Court inspecting four comparable sales, as follows: Lot 3, Bee Close, Moonee Beach Lot 4, Bee Close, Moonee Beach Lot 2, Bee Close, Moonee Beach Heritage Drive, Moonee Beach 106Mr Davis provided no comparable sales for the residue land on the basis that it would be dedicated to council, at no cost.

Analysis of potentially comparable sales 107The analysis of potentially genuinely comparable sales seeks to provide a common basis of measurement by seeking to convert all potentially comparable sales to a common basis of expression such as a unitary rate (rate per sq m, rate per ha, etc), improved or unimproved (through allowance for the absence or existence of improvements, etc) and so forth. 108Concerning the subdivision of the Land, the valuers agreed that the common basis of expression as a unitary rate, relevant to the Land, was a rate per lot. 109Mr Paris did not provide a discrete analysis in his initial report but did provide a discrete analysis in the joint report. 110Mr Davis undertook a discrete analysis in his initial report, amended in the joint report and in oral evidence, which may be summarised, with Mr Paris's analysis, as follows: Address Mr Paris Mr Davis Analysed Analysed $ per Lot $ per Lot 198 Graham Drive, Sandy Beach $55,714 $46,934 72 Bluff Road, Emerald Beach $55,000 $49,500 17 Moonee Beach Road, Moonee Beach $120,967 $108,871 102 Ainslie Drive, Korora $84,242 $75.818 Loaders Lane, Coffs Harbour $36,111 - $51,667 $31,793 6 Halls Road, Coffs Harbour $33,333 $30,638 465A Pacific Highway, Coffs Harbour N/A $16,290

111Concerning the residue parcel, Mr Paris provided eleven comparable sales ranging from December 2009 to July 2013, 1.01 hectares to 102 hectares and sale prices from $200,000 to $5,870,000. 112The four comparable sales provided by Mr Paris and inspected by the Court are summarised as follows: Address Area Ha Date of Sale Sale Price Lot 3, Bee Close, Moonee Beach 4.839 April 2010 $298,000 Lot 4, Bee Close, Moonee Beach 1.135 November 2012 $200,000 Lot 2, Bee Close, Moonee Beach 1.004 July 2011 $302,000 Heritage Drive, Moonee Beach 1.010 July 2013 $230,000

Adjustment of potentially comparable sales 113The adjustment of potentially genuinely comparable sales acknowledges the fact that no two properties are ever identical and seeks to convert those potentially comparable sales to a hypothetical expression of value as a unitary rate in the context of the Land through the reflection of differences (such as size, location, use, date, etc) between the respective potentially comparable sales and the Land. 114Concerning the subdivision of the Land, Mr Paris made adjustment for various factors including location, date of sale, settlement terms, zoning, size and topography in his initial report, through either explicit dollar adjustments or single percentage adjustments, affording limited transparency. 115In the joint report, Mr Paris considered adjustment for various factors including settlement terms, fill, development consent, topography, size, location and s 94 contributions through either explicit dollar adjustments or individual percentage adjustments. While this potentially afforded greater transparency to the adjustment process undertaken by Mr Paris, he stated in oral evidence that adjustments were to be disregarded. 116Mr Davis made adjustment for various factors including location, size, topography, availability of utility services, development consent, s 94 contributions and settlement terms either through explicit individual percentage adjustments or through explicit dollar adjustments, affording a high level of transparency. 117In terms of order, Mr Paris adjusts for settlement terms, fill and development consent initially, then makes percentage adjustments to the result for topography, size and location before adjusting for the relative s 94 contributions. 118In terms of order, Mr Davis adjusts for settlement terms, development consent and s94 contributions initially, then makes percentage adjustments to the result for topography, size and location before adjusting for the s94 contribution for the Land. This order of adjustment differs from Mr Paris with resulting differences in the adjusted rates per lot derived. 119The valuers adjustment of the potentially comparable sales may be summarised as follows: Address Mr Paris Initial Mr Davis Adjstd $ per Lot Adjstd $ per Lot 198 Graham Drive, Sandy Beach $48,747 $36,956 72 Bluff Road, Emerald Beach $44,000 $18,292 17 Moonee Beach Road, Moonee Beach $84,677 $71,593 102 Ainslie Drive, Korora $63,182 $39,783 Loaders Lane, Coffs Harbour $43,917 $ 9,020 6 Halls Road, Coffs Harbour $33,333 $15,248 465A Pacific Highway, Coffs Harbour N/A $11,742

120For the residue parcel, Mr Paris refers to adjustments for "location, topography, access, date of sale, zoning inter alia" but appears to provide neither details of adjustment nor transparency. Application of potentially comparable sales 121The application of those potentially genuinely comparable sales to the Land seeks to determine the value of the Land through a consideration of the relevance (such as being limited, indirect or direct) of the unitary rate derived from those adjusted comparable sales relative to the Land. 122Concerning the subdivision of the Land, Mr Paris refers in his initial report to his sales analysis showing a range of $33,333 to $120,967 per lot, though it would appear that the range is $33,333 to $84,677 per lot. 123In his initial report, Mr Paris refers to the application of a rate of $40,000 per lot to the Land, "calculated from the analysis of attached englobo site sales" but does not appear to provide such calculation and also to having had regard to "location, topography and access inter alia of the subject property" but in his analysis of comparable sales appears to repeatedly and consistently work backwards from a predetermined rate of $40,000 per lot ("which supports the $40,000 figure for Mrs Hoys land", "to support $40,000 for Mrs Hoys land", "which still supports $40,000 for Mrs Hoys land"). 124Mr Davis applied his analysed rates per lot to the Land through an explicit, detailed explanation supported by descriptive statistics affording a high degree of transparency, to arrive at a rate per lot of $13,000 for application to the Land. 125Concerning the residue parcel, Mr Paris asserts without explanation a rate of $300,000 for application to the rural home site at the subject property. RTA acquisition of part of the Hoy property 126The Applicant contends that the acquisition by the RTA of a strip of land adjacent the Land and fronting the Pacific Highway in 2011 for $202,000, purported to represent 5 blocks at $40,400 per block, provides comparable sales evidence of relevance to the valuation of the Land (Woollams v The Minister (1957) 75 WN (NSW) 103; McDonald v Roads and Traffic Authority of NSW [2009] NSWLEC 105). 127The Respondent contends that this transaction should not be relied upon as it occurred in the shadow of compulsory acquisition (Chircop at [48]), was not a sale on the open market, reflected a 6A Open Space zoning and reflected a significant component for injurious affection, approximating $187,000. 128While the sale may be considered to be of relevance, it should be treated with caution (Koutsouras v State Rail Authority of NSW, unreported, NSWCA, 29 November 1991) and we consider that the shadow of compulsory acquisition and ambiguity concerning the composition of the $202,000 transaction price mean that little weight should be attached to the transaction. Council s 94 Contributions Plan as evidence of market value 129Mr Tomasetti submits that the amount allowed for the Land in the Council's Section 94 Contributions Plan of $5.6 m is some evidence of its market value as it must have been calculated on a rational basis and importantly, supports the valuation of Mr Paris. Mr Tomasetti accepts that the s 94 plan amount is not strong or compelling evidence but it is evidence of value and should be considered. Mr Hemmings disagrees and submits that the figures used in contributions plans are for budgetary purposes to calculate the amount of contributions and are not an assessment of market value in accordance with the Acquisition Act as the cost could reflect costs other than land and is an estimate as at an unknown date in the future. 130Given the absence of evidence concerning the exact basis upon which the amount is included in the contributions plan was determined, despite attempts to gather the council records during the hearing, we are not prepared to accept the figure for the purposes of even providing support for a market value assessment prepared by the expert valuers, in this case. Without any evidence of how the amount in the contribution plan was formulated, it cannot provide any assistance in determining the market value of the Land in accordance with the Acquisition Act. 131Mr Tomasetti also submits that without the need to carry out the public purpose the s 94 contribution for the Land would be reduced by $4,575 per lot. We accept Mr Hemmings response that the contribution (or a similar contribution) would still be required as it is necessary to provide district sporting fields for the future population, even if it is in another location in the Moonee precinct. 132Having determined the value of the Land to be substantially lower than that sought by the applicant and reflected in the CP, we find that it is appropriate that the s 94 land acquisition component for the District Open Space in the CP should be adjusted downward to reflect such lower value of the Land. The effect of the reduced contribution is to increase the market value of the Land as it would be a lesser cost to any prospective purchaser. 133Doing the best we can, and using the formula in the CP for calculating District Open Space facilities/services (p 14) and substituting our assessment of value (which we accept is the outcome of an iterative process) for the $5,638,211 shown in the line item as "Land acquisition and interest on borrowings", a contribution of $668.25 per person is realised. Using the occupancy rate of 2.8 persons for "Large dwellings" in Table 3, the contribution is 2.8 x $668.25, giving $1871 per lot for a large dwelling (rather than $4575 per lot). The total contribution per lot is therefore $35,664 (rather than $38,368). 134We acknowledge that the line item states "Land acquisition and interest on borrowings", however as we have no evidence on the amount of interest on borrowing, we have adjusted the contribution on the raw acquisition figures.

Consideration of the valuation evidence Accumulation of potentially comparable sales 135For the subdivision of the Land, we propose to have regard to the seven potentially comparable sales inspected and for the residue lot, we will have regard to the four potentially comparable sales inspected. Analysis of potentially comparable sales 136Concerning the subdivision of the Land, for the purposes of analysis, evidence was tendered concerning the treatment of potentially comparable sales for deferred terms of settlement, cost of fill and development levies and/or contributions in the form of s 94 contributions. 137Having regard to the purpose of the analysis step in the comparable sales valuation approach, which is to provide a common basis of measurement by seeking to convert all potentially comparable sales to a common basis of expression, we consider that analysis should have regard to each of deferred terms of settlement, cost of fill and s 94 contributions. 138We note that, while the treatment of deferred terms of settlement, cost of fill and s94 contributions in the analysis step provides a logical and explicit approach affording transparency, this differs from the approach adopted by either Mr Paris or Mr Davis. 139On the matter of deferred terms of settlement, we note that both 465A Pacific Highway, Coffs Harbour and 198 Graham Road, Sandy Beach benefited from deferred terms and we have analysed each accordingly. 140Evidence on the cost of fill, was provided for Loaders Lane, Coffs Harbour and we have analysed this sale accordingly. 141On the question of contributions, evidence was provided indicating a very significant difference in contributions between the respective sales, ranging from $16,124 per lot to $28,580 per lot relative to $38,368 per lot for the Land. In our view, this requires reflection in the valuation process through the analysis step and we have analysed the respective sales accordingly. 142Having regard to the each of the above, we consider that the analysed potentially comparable sales may be summarised as follows: Address Court Analysed $ per Lot 198 Graham Drive, Sandy Beach $77,732 72 Bluff Road, Emerald Beach $72,158 17 Moonee Beach Road, Moonee Beach $149,548 102 Ainslie Drive, Korora $100,366 Loaders Lane, Coffs Harbour $76,189 6 Halls Road, Coffs Harbour $57,021 465A Pacific Highway, Coffs Harbour $45,448

143For the residue lot, we note that analysis of the comparable sales indicates an incredibly wide range of $61,583 per ha to $300,797 per ha which we consider to be of little assistance.

Adjustment of potentially comparable sales 144Concerning the subdivision of the Land, for the purposes of adjustment, evidence was provided concerning development consent, the impact of the Global Financial Crisis (GFC), topography, site area and location of each potentially comparable sale relative to the Land. 145The Applicant contended that there should be no discount for the absence of development consent for the subdivision of the Land as such subdivision was a prohibited land use and therefore incapable of being approved though, in the absence of the acquisition, such consent would have inevitably occurred. 146The Respondent's contention, which we accept, was that a downward adjustment should be made to those comparable sales that have the benefit of development consent in order to account for the fact that the subject property does not have development consent. While Mr Tomasetti submitted that it would be inappropriate to make any adjustment because there was no factual basis to make an adjustment, we disagree. The potential of the Land for subdivision will be realised when a development consent is granted. A prospective purchaser, in our view, would make a downward adjustment to the comparable sales in the knowledge that additional costs would be incurred in realising this potential, as is the case with most subdivisions. This would involve, at least, development application fees, a number of studies to address the identified constraints, surveys, engineering plans, drainage plans and the like. 147The impact of the GFC and the ability to adjust comparable sales was a significant difference between the parties. The Applicant contended that, while the GFC had an effect on land prices in Coffs Harbour LGA, pre-GFC sales were relevant, capable of adjustment and of assistance in the evaluative exercise though acknowledging that this may be a difficult exercise with doubt to be resolved in favour of the resumee. 148The Respondent also contended that the GFC had an effect on land prices in Coffs Harbour LGA but that it was unsafe to rely upon pre-GFC transactions particularly where there are post-GFC transactions available for consideration. 149Having regard to the purpose of the adjustment step in the comparable sales valuation approach referred to earlier in the judgment, we consider that adjustment should be made for the impact of the GFC relative to the relevant date for the Land but accept that the absence of robust evidence means that little weight may be attributed to pre-GFC potentially comparable sales evidence. 150We note that, while the treatment of deferred terms of settlement, cost of fill and contributions in the analysis step and the treatment of development consent, topography, site area and location in the adjustment step provides a logical and explicit approach affording transparency, this differs from the approach adopted by either Mr Paris or Mr Davis. 151For the purposes of relativity, having regard to the issues for analysis and adjustment, the Land comprises a gently sloping site of approximately 16.3 hectares, including approximately 11.5 ha of unconstrained land capable of residential subdivision and approximately 4.8 ha of constrained land based on DCP 2004. The Land has no development consent for subdivision. 152The Land is located in the Coffs Harbour LGA approximately 12 km north of Coffs Harbour, and about 1 k north west of the township of Moonee Beach and on the western side of the Pacific Highway. At the acquisition date major upgrading of the Pacific Highway was being undertaken and access to beaches, shopping facilities and other facilities located on the eastern side of the Pacific Highway was difficult at times. Contributions of $38,368 per lot are required but there are no costs for filling. The date of acquisition is 2 November, 2012. 153Of the potentially comparable sales inspected by the Court as observed during the view and relied on by one or both of the experts, we consider that each may be related to the Land as follows. 198 Graham Drive, Sandy Beach 154This property comprises a gently sloping site for a 140 lot subdivision with development consent, approximately 9 km north of the Land on the western side of the Pacific Highway and which transacted in November 2007 on deferred terms. Analysis reflected deferred terms and a contribution of $24,803 per lot. 155Relative to the Land, the property has development consent, is comparable in terms of topography, being west of the Pacific Highway and size but inferior in terms of location (being further north) and is pre-GFC. Having regard to the differences between this sale and the Land, we consider this sale to be of limited relevance. 72 Bluff Road, Emerald Beach 156This property comprises a gently sloping site for a 25 lot subdivision with development consent approximately 7.5 km north of the Land on the eastern side of the Pacific Highway, which transacted in October 2009. Analysis reflected a contribution of $17,158 per lot. 157Relative to the Land, the property has development consent, is comparable in terms of topography and being post GFC, superior in terms of location (being within a well-established residential locality), size and being east of the Pacific Highway. Having regard to the nature of the differences between this sale and the Land, we consider this sale to be of indirect relevance. 17 Moonee Beach Road, Moonee Beach 158This property comprises a gently sloping site for a 31 lot subdivision with development consent approximately 2.5 km south of the Land on the eastern side of the Pacific Highway, which transacted in March 2006. Analysis reflected a contribution of $28,580 per lot. 159Relative to the Land, the property has development consent, is comparable in terms of topography, superior in terms of location (being closer to the beach), size and being east of the Pacific Highway but is pre-GFC. Having regard to the differences between this sale and the Land, we consider this sale to be of limited relevance. 102 Ainslie Drive, Korora 160This property comprises a steep sloping site for a 33 lot subdivision with development consent approximately 5 km south of the Land on the eastern side of the Pacific Highway, which transacted in November 2010. Analysis reflected a contribution of $16,124 per lot. 161Relative to the Land, the property has development consent, is comparable in terms of being post GFC, superior in terms of location (being within a very well-established residential locality), size and being east of the Pacific Highway but inferior in terms of topography. Having regard to the nature of the differences between this sale and the Land, we consider this sale to be of indirect relevance. Loaders Lane, Coffs Harbour 162This property comprises a site requiring filling for a 46 lot subdivision with development consent approximately 11.5 km south of the Land in suburban Coffs harbour, which transacted in September 2011. Analysis reflected cost of filling and a contribution of $25,646 per lot. 163Relative to the Land, the property has development consent, is comparable in terms of topography and being post GFC but superior in terms of location (being within suburban Coffs Harbour) and size. Having regard to the nature of the differences between this sale and the Land, we consider this sale to be of indirect relevance. 6 Halls Road, Coffs Harbour 164This property comprises a steep undulating site for a 47 lot subdivision with development consent approximately 11.5 km south of the Land in suburban Coffs Harbour, which was transacted in February 2006. Analysis reflected a contribution of $22,978 per lot. 165Relative to the Land, the property has development consent, is superior in terms of location (being within suburban Coffs Harbour) and size but inferior in terms of topography and is pre-GFC. Having regard to the differences between this sale and the Land, we consider this sale to be of limited relevance. 465A Pacific Highway, Coffs Harbour 166This property comprises a steeply sloping site from each side of an elevated ridge for a 221 lot subdivision approximately 11.5 km south of the Land in suburban Coffs Harbour, which was transacted in October 2012 on deferred terms (to permit time for development consent to be obtained, being "conditional on DA") in a mortgagee in possession sale but subject to adverse odours from a nearby Council waste facility. Analysis reflected deferred terms and a contribution of $28,253 per lot. 167Relative to the Land, the property has development consent, is comparable in terms of being post GFC, superior in terms of location (being within suburban Coffs Harbour) but very significantly inferior in terms of topography, odours and size, being in the shadow of a mortgagee in possession. Having regard to the limited comparability between this sale and the Land, we consider this sale to be of limited relevance. Residue lot 168Concerning the residue lot, while the evidence tendered was insufficient to facilitate effective adjustment of the analysed rates per hectare, our conclusion that the residue land could be included as part of a large constrained lot of nominal value only renders such adjustment unnecessary.

Application of potentially comparable sales 169Concerning the subdivision of the Land, while we consider none of the comparable sales to be of direct relevance, we consider the following to be indirectly relevant comparable sales to which greater weight should be attached for application to the Land. 72 Bluff Road, Emerald Beach 170This property may be analysed to reflect as sale price per lot of $72,158. Downward adjustment is then required for development consent, location and size with an adjusted deduction of $35,664 for contributions, which we consider will result in an adjusted sale price per lot approximating $15,000 for application to the Land. 102 Ainslie Drive, Korora 171This property may be analysed to reflect a sale price per lot of $100,366. Downward adjustment is then required for development consent, location and size with upward adjustment for topography and with an adjusted deduction of $35,664 for contributions, which we consider will result in an adjusted sale price per lot approximating $21,000 for application to the Land. Loaders Lane, Coffs Harbour 172This property may be analysed to reflect a sale price per lot of $76,189. Downward adjustment is then required for development consent, location and size with an adjusted deduction of $35,664 for contributions, which we consider will result in an adjusted sale price per lot approximating $18,000 for application to the Land. 173Having regard to that evidence tendered and thereafter doing the best we can, we consider the appropriate lot value to be within the range of $15,000 to $21,000 and we adopt $18,000 per lot for application to the Land.

What is the market value of the Land? 174We have found the lot yield for the unconstrained land to be 106 lots and the value per lot to be $18,000. Allowing a nominal value for the residual land, we assess the market value of the Land to be $1,980,000.

Disturbance The submissions 175The disturbance claim of the Applicant is:

$139,082.64 for legal and valuation fees pursuant to s 55(d), and
$25,020 (adjusted to the hearing dates) for solatium pursuant to s 59(e). 176Mr Hemmings submits that there are matters that stand in the way of the applicant's claim for disturbance. First, the application was made pursuant to the owner-initiated hardship provisions in the Acquisition Act. Since the amendments to the EPA Act and the Acquisition Act, the only means by which an applicant can require a resuming authority to compulsorily acquired land is upon hardship. That provides a benefit to the landowner. However, it carries with it a statutory disbenefit. That disbenefit arises because of the operation of s 26 of the Acquisition Act. 177For land acquired in the ordinary course, s 55 of the Acquisition Act identifies the various heads of compensation. In the circumstances of an owner-initiated hardship acquisition, the consequence of s 26 is that; special value (55(b)), severance (55(c)), disturbance (55(d)) and solatium (55(e)) need not be taken into account. That is, for the purposes of the assessment of compensation for an owner-initiated acquisition, the only matters that need to be taken into account are market value (55(a)) and any increase or decrease in the value of adjoining or severed land (55(f)). As the acquisition was a total acquisition (55(f)) does not arise. As a result, compensation is only payable for market value. 178Second, s 61 stands in the way of any claim for disturbance pursuant to sections 59(c) and (d). 179Third, even if the s 59(a) and (b) disturbance items were able to be claimed, those costs must be reasonably incurred. Accepting that the "reasonableness" relates to the incurring of the costs, and not necessarily the costs themselves, nevertheless "exorbitant" costs could not be said to be "reasonably incurred". The applicant is claiming in excess of $120,000.00 for legal and valuation fees. Mr Hemmings submits that those costs are exorbitant. The totality of the evidence for the legal costs provided at the hearing consists of two lines, fully described as "Total Professional Fees" in the amount of $42,900 and $51,546.00. Prior to the final submissions, an itemised assessment of the previously identified costs was provided from 20 January 2010 to 12 July 2013. 180Mr Hemmings submits that if the Court accepts that discretion is warranted then in order to determine how much, the language of s 59(a) must be considered. Section 59(a) is directed to the "compulsory acquisition" and not directed towards the Division 3 hardship application. The hardship application is something that precedes the compulsory acquisition. On this basis, the costs of years of negotiations, including two hardship applications, the first on 10 May 2010, which was not accepted by the Council and the second of 17 April 2012, that resulted in acceptance of the hardship application, are simply not recoverable (even if the Court were to favourably exercise its discretion). 181The Respondent has reviewed the itemised assessment of costs over a period from 20 January 2010 to 12 July 2013 and amount to $89,695.02 plus disbursements of $2,444.47 being a total of $92,139.49. The legal costs itemised includes representation of the applicant during her unsuccessful hardship application of 10 May 2010 and a long period of voluntary negotiations with the Council for the purchase of subject land which were ultimately unsuccessful. Properly understood, all costs prior to 29 June 2012, being the date on which the Council resolved to accept that Mrs Hoy would suffer hardship, are in connection with the hardship application. Only after that date, can they be said to be in connection with the compulsory acquisition. 182As a result, even if the Court was satisfied that it should exercise its discretion to award the Applicant s 59(a) and (b) costs, those costs would be limited to $29,937.39 made up of $17,904.97 legal costs, disbursements of $175.78, valuation $11,856.64. 183Mr Tomasetti submits that s 26 makes the award of disturbance discretionary rather than mandatory. Parliament has made relatively clear what it intended by the conferral of a discretion under s.26. In the Second Reading speech, the Minister said: An authority must form an opinion that the owner will suffer hardship because he is unable to sell the land at its market value, and that he needs to sell it now rather than later for either pressing personal, domestic or social reasons, or to avoid the loss of his income. Pressing personal, domestic or social reasons include situations where: the owner or his spouse has been relocated to a job in another State; the family has to relocate for health reasons; the family has outgrown its accommodation; the owner needs to move closer to sick relatives; the owner's house is too big for him now and maintenance of it is beyond his capacity. Of course, every case would need to be considered on its merits and the full range of personal, social and domestic reasons which might give rise to hardship cannot be anticipated. Alternatively, an owner may need to sell the land to avoid loss of his income where, for example, his business is in danger of insolvency and is secured against his familiar home. Once hardship is found, in assessing compensation under .this division, authorities need not take into account factors other than, the market value-of the land. This is to be found in clause 26. There has been some criticism of this provision. Policy rationale is that people should not force government to acquire their land unless they have a legitimate reason for needing to sell the land now rather than later If they really need to sell, they are in the position of any other person wishing to sell property - a voluntary vendor, who would expect to pay all the usual costs associated with the sale of real property, such as relocation costs and so on. However, section 26 gives an authority some discretion in assessing these additional heads of compensation. If an owner has to move for personal, domestic or social reasons, for example, a job relocation - it may not .be appropriate for an authority to offer him special value, severance, disturbance or solatium because his move is for reasons other than the blight on his land. It is conceivable, however, that there may be situations which would warrant an authority exercising its discretion to pay one or more of these additional heads of compensation. Because all the problems and circumstances of landholders cannot be anticipated, the bill has this inbuilt flexibility to ensure fairness. 184In this case, the in-built fairness mechanisms in s 26 must favour Mrs Hoy. Mrs Hoy did not move because of a job relocation or other reason mentioned in the Second Reading speech but because of the long term and ongoing blight on the Land. This has been in place for 12 years and with her age and declining health and her desire to live closer to her family on a property that she could more readily maintain were the reasons for her decision to move. 185Mr Tomasetti submits that there is nothing to suggest anything disentitling with respect to disturbance of solatium. In Goodman v RTA [2000] NSWLEC 185, where the acquiring authority demonstrates no good reason why an applicant should not receive disturbance and solatium, it ought be awarded. 186Mrs Hoy has legitimately incurred costs under s 55(d) and s 59 and there is no aspect of any double dipping or unjust compensation. On the contrary, applying the just compensation override in s 54, Mrs Hoy must be awarded compensation for legitimate costs that she has incurred and which arise for one simple reason and no other - the proposal to carry out the public purpose and the acquisition to give effect to it. The findings 187The relevant parts of the Acquisition Act are: 26 Compensation for acquisition under this Division The special value of land, any loss attributable to severance or disturbance and solatium (as referred to in Part 3) need not be taken into account in connection with an acquisition of land under this Division, despite anything to the contrary in that Part. 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, (b) any special value of the land to the person on the date of its acquisition, (c) any loss attributable to severance, (d) any loss attributable to disturbance, (e) solatium, (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. 59 Loss attributable to disturbance In this Act: loss attributable to disturbance of land means any of the following: (d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired), (e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage), 188A brief chronology of events leading to the acquisition of the Land is also relevant: 1959 - occupation of Land by Mrs Hoy following purchase by her husband from his father. Prior to 1968 - Coffs Harbour Planning Scheme applied only to urban areas; Land unzoned. 1968 - IDO 6 applies to the Land with 40ha minimum subdivision standard. 6 April 1988 - LEP 1998 repealed all other planning instruments in the LGA and zoned the Land 2(a) Residential. January 1999 - draft LEP 1998 advertised and Land zoned Residential 2A. 20 April 2000 - LEP 2000 gazetted (formerly draft LEP 1998) and Land zoned 6A Open Space Public Recreation. 16 October 2001 - Mrs Hoy gains ownership of Land following the passing of her husband. 10 May 2010 - notice served on council to purchase property on hardship grounds. 18 May 2010 - hardship application rejected by council. 28 July 2010 - rejection of hardship application rescinded by council. October 2010 - Mrs Hoy and council agree to negotiate the sale of the Land. 17 April 2012 - notice served on council to purchase property on hardship grounds following unsuccessful negotiations. 28 June 2012 - council accepts purchase of Land on hardship grounds. 2 November 2012 - Notice published in Government Gazette of council acquisition of Land. 7 June 2013 - Appeal lodged against compensation offered by council. 27 September 2013 - LEP 2013 gazetted and Land zoned RE1 Public Recreation. 189The reasons for the hardship application, as set out in the Affidavit of Mrs Hoys of 6 June 2013 and which attaches a Statutory Declaration dated 17 April 2012 in the hardship application of 17 April 2012 were relevantly: 9. I have been suffering hardship ever since the re-zoning took place as the Property has effectively been useless to sell or develop to its potential. 10. I have the following significant health problems: (a) I suffer from high blood pressure, due to the stress and am currently taking medication for this. My blood pressure is checked every day. (b) am also taking medication for a thyroid condition which is monitored on a regular basis. 11. Since April 2011 the Roads & Traffic Authority has been constructing a substantial upgrade to the Pacific Highway which runs along the eastern boundary of the Property. 12. The RTA has already compulsorily acquired a section of the Property along the eastern boundary which it required for the Highway upgrade. 13. There is a great deal of noise and dust from the road works and the tracks driving by my house. They are working on the highway 5 and often 6 days a week. 14. The dust is so bad I have to keep the windows and doors of the house closed. It gets all over the outside of the house and the outdoor furniture. The dusts upsets my breathing and sinuses. 15. The Property is too large for me to manage now at my age and I am incurring ongoing expenses to have the Property slashed and mowed. The house although in reasonable condition is getting old and is too much for me to maintain on my own. 16. Although I can still drive this is getting more difficult. It is very hard to get in and out of the Property and onto the highway because of the road works. As I understand it these road works will not be completed for several years yet so this problem will be ongoing for a long period of time. 17. I would like to sell the Property and purchase a home at the Lakes Estate in Coffs Harbour to be closer to town so I can more easily see my immediate family and they can help me as well as for shopping and my medical requirements. 18. I understand Coffs Harbour City Council resolved on 14 October 2010 to adopt the 2010 Coffs Harbour City Council Sports Facilities Plan and that under this plan the Property has been identified as the site for the Moonee Sports Complex. 19. I cannot sell the Property for its true value because of it's current 6A zoning and given it is now clearly flagged as the future sporting complex by the Council for the Moonee area. 20. I feel trapped by all of this. It is causing me considerable stress and compounding my other health problems. 190Mr Hemmings and Mr Tomasetti disagree on the operation of s 26 and particularly the words "need not be taken into account". Mr Hemmings maintains a proper reading of s 26 offers two alternatives, first, that no disturbance costs and solatium are available because s 26 does not provide a discretion to award these costs. Mr Hemmings invites us not to follow the decisions in Goodman v RTA [2000] NSWLEC 185, Bezzina Developers Pty Ltd v Leichhardt Council [2000] NSWLEC 175, and Prasad v The Minister [2010] NSWLEC 193. Second, there is a discretion, but it should not be exercised. However, if the Court accepts that some compensation should be paid, it should not be the amount sought by the Applicant but restricted to that set out in Mr Hemmings submissions. 191With respect to Mr Hemmings invitation to set aside the approach in Goodman, Bezzina and Prasad; it is an invitation we do not wish to accept. 192What follows is whether the discretion ought be exercised and if so, what amount of compensation should be paid. 193On the first question, we agree with Mr Hemmings that the reasoning for the decisions in Goodman, Bezzina and Prasad is not overly expansive and unfortunately neither is the basis for the exercise of any discretion. It seems to us that the legislature, through s 26 (and the Second Reading speech), clearly differentiates between claims for compulsory acquisition through hardship claims and non-hardship claims. The reasoning is explained in the Second Reading speech. If a person seeks to claim compensation via the hardship provisions then it cannot be expected that the special value of land, any loss attributable to severance or disturbance and solatium will automatically form part of any compensation. In our view, this would mean that any claim, using the discretion available through s 26, must be a claim that is above and beyond the matters to be considered in determining amount of compensations in s 55. 194In this case, we are satisfied that the reason for Mrs Hoy desire to move away from the Land is largely, if not solely because of the zoning of the Land which makes the sale of her land, at market value very difficult. To realise the market value of her land, absent the public purpose, it would ideally have been best to have obtained a development consent. This however would have needed to be achieved in a very narrow time frame; between 6 April 1988 when LEP 1998 repealed all other planning instruments in the LGA and zoned the Land 2(a) Residential and 20 April 2000 when LEP 2000 was gazetted and zoned the Land 6A Open Space Public Recreation. Any attempts to determine the market value of the Land, absent the public purpose, through a development application after 20 April 2000 would have been futile given that the subdivision of the land for residential purposes was a prohibited use and the development application could not have been determined by the council. The blight on the Land has effectively been in existence since 20 April 2000. 195We are also satisfied that the age of Mrs Hoy, her medical conditions, the impacts of the road construction at the acquisition date, the need for continual maintenance of a property of 16 ha and her more than reasonable desire to find accommodation near her family also support her disturbance claim. In coming to this conclusion, we are still mindful of the limitations imposed by s 26 and the submission of Mr Hemmings that there needs to be a distinction between costs and advice for the hardship applications and those for the acquisition process. Consequently, we find that s 59(a) and (b) costs are $29,937.39 made up of $17,904.97 legal costs, disbursements of $175.78 and valuation costs of $11,856.64. 196We have not accepted the submission of Mr Hemmings that the legal fees are "exorbitant". We agree with Mr Tomasetti that if this submission were to be pursued, the appropriate course of action was to cross examine Mr Smede, the author of the affidavit that provided the breakdown of legal costs. As Mr Smede was available and leave was not sought to crossexamine Mr Smede, the submission that the legal costs are "exorbitant" was not made out.

Solatium 197We are also satisfied that solatium of $25,020 is appropriate given the length of time Mrs Hoy has resided on the Land. We understand that the figure of $25,020 is based on s 60(2) of the Acquisition Act and the amount was agreed by the parties, if the Court elected to award solatium.

Conclusion 198Based on our determination of market value, disturbance and solatium, we determine the compensation to be paid to the Applicant is as follows: Market value (s 55(a)) $1,980,000.00 Disturbance (s 59(c) and (f)) $29,937.39 Solatium (s 55(c)) $25,020.00 $2,034,957.39

Orders 199The orders of the Court are:

Determination of compensation in the amount of $2,034,957.39 for the compulsory acquisition of the Applicant's land.
The exhibits are returned.
Costs are reserved.

G T Brown Commissioner of the Court

Dr D Parker Acting Commissioner of the Court 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: 27 October 2014

RA 195 The Trust Company Limited v Minister Administering the Crown Lands Act [2012] NSWLEC 73 Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 Woollams v The Minister (1957) 75 WN (NSW) 103 Zhang v Canterbury City Council (2001) 115 LGERA 373 Category: Principal judgment Parties: Iris May Hoy (Applicant) Coffs Harbour City Council (Respondent) Representation: Mr P Tomasetti SC with Mr N Eastman, barrister (Applicant) Mr I Hemmings SC (Respondent) MBT Lawyers (Applicant) HWL Ebsworth Lawyers (Respondent) File Number(s): 30426 of 2013

(2001) 115 LGERA 373

(2001) 119 LGERA 231

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