Jameson v Rail Corporation New South Wales - [2014] NSWLEC 83 - NSWLEC 2014 case summary — Zoe

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Jameson v Rail Corporation New South Wales

[2014] NSWLEC 83

Land and Environment Court (NSW)|2014-04-11|Before: Pain J, Ms J

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Source facts

Court

Land and Environment Court (NSW)

Decision date

2014-04-11

Before

Pain J, Ms J

Catchwords

(2014) 199 LGERA 198 Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) [2000] NSWLEC 139
(2010) 79 NSWLR 155 Roads and Traffic Authority (NSW) v Peak [2007] NSWCA 66 Sydney Water Corporation v Caruso [2009] NSWCA 391
(2009) 170 LGERA 298 Wollongong Council v Vic Vellar Nominees Pty Ltd [2010] NSWLEC 266

Source

Original judgment source is linked above.

Catchwords

(2014) 199 LGERA 198 Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) [2000] NSWLEC 139(2010) 79 NSWLR 155 Roads and Traffic Authority (NSW) v Peak [2007] NSWCA 66 Sydney Water Corporation v Caruso [2009] NSWCA 391(2009) 170 LGERA 298 Wollongong Council v Vic Vellar Nominees Pty Ltd [2010] NSWLEC 266

Judgment (52 paragraphs)

[1]

Compensation payable following compulsory acquisition of land 1By its acquisition notice of 15 June 2012 the Respondent, Rail Corporation New South Wales, compulsorily acquired part of the Applicant's land for a public purpose pursuant to the Transport Administration Act 1988 as part of the South Sydney Freight Line project. The Applicant has appealed against the amount of compensation determined by the Valuer-General as provided for in s 66(2) of the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act). I thank Acting Commissioner Cowell for his assistance in this matter. 2The parent parcel is a large older style industrial property near Campbelltown railway station at 10 Farrow Road, Campbelltown. Lot 53 DP 1173491 and Lot 104 DP 1141484 having a total area of 1,104.4 sqm were acquired from Lot 1 in DP731924 (15,010 sqm). 3The Respondent acquired a strip of land approximately 12.5m deep of 1,104.40 sqm across the entire front of the Applicant's land. As a result the industrial building on the Applicant's land now has no set back from the street with the front wall on the boundary with the Respondent's land after acquisition. A public footpath then road then freight line abuts the Applicant's building on the residue land. 4The Applicant claimed compensation in the Points of Claim as follows: Sections 55(a) (market value) and 55(f) loss of value to other land Calculated on a before and after basis: $276,100 · For market value of the acquired land: $600,585 · For loss of value of the residue land:

[7]

Land Acquisition (Just Terms Compensation) Act 1991 11The objects of the Just Terms Act are defined in s 3: 3 Objects of Act (1) The objects of this Act are: (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, and ... 12Market value is defined in s 56 of the Just Terms Act. Other relevant sections of the Just Terms Act also follow: 37 Right to compensation if land compulsorily acquired An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part by the authority of the State which acquired the land. 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, ... (d) any loss attributable to disturbance, ... (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 (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. ... 59 Loss attributable to disturbance 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, (b) valuation fees reasonably incurred by those persons in connection with the compulsory acquisition of the land, ... (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.

[9]

Evidence 14The Applicant tendered the court book (exhibit A), the tender bundle (exhibit B), Mr Preston's hardstand comparable sales (exhibit C) and a table showing a piecemeal approach of both valuers (exhibit D). 15Exhibit A contains the Class 3 application (tab 1), the points of claim (tab 2) and the points of defence (tab 3). It also contains the town planning evidence including the report by Mr Rowan (tab 4) prepared on behalf of the Respondent dated 31 October 2013, the statement of evidence of Mr Shiels, town planner (tab 5) prepared on behalf of the Applicant dated December 2013, and their joint report dated 7 March 2014 (tab 6). Traffic evidence included the report of Mr Henson for the Respondent dated 30 October 2013 (tab 7), the statement of evidence of Mr Shiels (tab 8, tab 5) and their joint report dated 4 February 2014 (tab 9). The Respondent's car park costing evidence prepared by Mr Hams, engineer, dated 29 October 2013 was included (tab 10). None of the traffic engineering or carpark costing evidence was referred to by the parties at the hearing. 16Mr Preston valuer called by the Applicant prepared a report dated March 2014 (tab 11), Mr Lunney valuer called by the Respondent prepared a report dated 24 March 2014 (tab 12). Their joint report was dated 4 April 2014 (tab 13). The Applicant's schedule of losses attributable to disturbance under s 59(a) to (e) (tab 14), the Respondent's reply to the Applicant's schedule of losses attributable to disturbance under s 59(a) to (e) (tab 15), the Applicant's schedule of disturbance losses under s 59(f) (tab 16), the Respondent's reply to the Applicant's schedule of disturbance losses under s 59(f) (tab 17) and the affidavits of Mr Jameson sworn 24 May 2013 (tab 18) and 4 April 2014 (tab 19) were included in exhibit A. 17Exhibit B contains acquisition documents, planning instruments and guidelines including the Campbelltown-Macarthur Structure Plan 2009 draft for discussion (Structure Plan) (tab 9 p 210), planning documents including the development application form associated with DA1536 dated 30 November 1971 (tab 12), development consent DA5834 also known as 422/77 interim development approval B1861 dated 16 February 1977 (the 1977 consent) (tab 13), modification of consent B1861 dated 3 March 1977 (tab 14), site layout plan for the 1977 consent dated 27 April 1977 (tab 15), 1985 subdivision plan dated 9 May 1985 (tab 16), development consent D85/164 dated 20 June 1985 (tab 17), development consent D86/169 dated 8 July 1986 (tab 18), 1986 subdivision plan dated 13 January 1986 (tab 19), development consent DA433/88 dated 29 November 1988 (tab 20), development consent DA434/88 dated 29 November 1988 (tab 21) and development consent DA438/89 (tab 22). Various deposited plans were also included (tabs 23 to 26). The lease to the tenant dated 1 December 2007 (tab 27), deed of variation of lease dated 30 August 2012 (tab 28) and the letter from the tenant to the Applicant regarding exercise of the lease option dated 21 August 2012 (tab 29) were also included. 18The Respondent tendered aerial photographs and the list of properties visited on the site inspection (exhibit 1), and an image marked up by Mr Preston as representing the perimeter hardstand on the residue land (exhibit 2). 19The disturbance claim under s 59(f) relates to the cost of leasing to the Applicant an adjacent part lot 51 owned by Campbelltown City Council (the Council) in perpetuity. Correspondence between Henry Davis York, solicitors for the Respondent, and Marsdens, solicitors for the Applicant, regarding the licencing of part of lot 51 to the Applicant for car parking purposes dated between September 2012 and April 2013 (tab 36) and correspondence dated April 2012 evidencing a licence between the Australian Rail Track Corporation (ARTC) and the Council for the use of part of lot 51 for car parking were also tendered (tab 38). The Works and Access Agreement, Farrow Road Campbelltown between the ARTC, the Applicant and the tenant were tendered (exhibit E). An email from Ms Page of the ARTC to Mr Wolfson of the Respondent stated that the Council charged the ARTC a rate of $33/sqm annually, which is $3,850 per month or $46,200 annually, for 1,400 sqm. A capitalisation calculation by Mr Preston of the annual licence fee for part of lot 51 of $440,000 was also tendered (exhibit F).

[11]

1988 development consent conditions/carparking 22The current industrial use of the parent parcel was approved on 29 November 1988 when a development consent was issued for "[u]se of part of the factory building for timber storage, roof trusses and raw framing material". Condition 1 required "[a]ll works, processes and storage of materials and goods shall be carried out within the confines of the building". 23The Applicant's and Respondent's town planners each expressed different views about the location and extent of any approved car parking on the residue land. In the end this aspect of the planners' evidence was also immaterial to the outcome of this case. Neither parties' legal representatives referred to the extensive planning evidence and dispute about the car parking capacity of the parent parcel based on consideration of a number of historic development consents in the Court book outlined in par 17. I do not need to resolve that precise issue. 24The Applicant accepted that the use that is being carried out on the residue land is in breach of condition 1 of the 1988 consent, because the external hardstand areas are being used for storage of materials and goods. This was evident from the site inspection and photographs in evidence. As the Respondent submitted this in turn curtails the amount of external hardstand area available for carparking. 25A carparking issue potentially arises in the context of the Respondent's submission that the storage on the hardstand areas means there was less space for carparking than if the 1998 consent condition 1 was complied with and relied on s 56(1)(c) of the Just Terms Act. Whether s 56(1)(c) arises in relation to the calculation of market value for the hardstand areas is referred to below. An entirely separate issue in relation to carparking is that the Respondent opposed the claim for disturbance made under s 59(f) which relates to the replacement of carparking which occurred on the acquired land. There was no dispute that carparking occurred on this land but whether the disturbance claim in relation to this is available under s 59(f) is in dispute.

[18]

Valuation evidence of before valuation as a potential residential redevelopment site 35Mr Lunney also calculated the before value as a potential residential site. Mr Lunney determined the value of the property as vacant land with future potential for medium density residential development under the Strategic Plan as this included the acquired land. This assessment was based entirely on his analysis of the sale of 4 Farrow Road, less an allowance of 10 per cent for the difference in size given the larger area of the parent parcel, slightly different development potential in the proposed zoning and the position slightly closer to Campbelltown station of 4 Farrow Road. His calculation (exhibit A p 522 par 149) in his report was 15,010 sqm at $225 = $3,375,000. 36From the above two calculations Mr Lunney concluded that the subject property before acquisition was worth more as a potential residential redevelopment than as a leased investment property and consequently that the improvements had no value. 37Mr Preston did not calculate in his report the potential use of the subject property for residential redevelopment under the Structure Plan as he considered that the property was more valuable for its present industrial use. He did discuss this approach as part of the joint conferencing process. 38Both valuers, particularly Mr Preston, referred to many sales in their reports. In their joint report (exhibit A p 546 par 33), and in oral evidence, the valuers agreed that it is only necessary to consider the sale of the nearby property 4 Farrow Road, Campbelltown. It was most comparable given its close proximity to the acquired land and its sale date close to the date of acquisition. That property has an area of 11,410sqm, which must be compared to the subject property (15,010sqm) and was sold in July 2012 to the Council for $2,850,000 plus GST ($3,135,000 inclusive of GST). This reflects a value of $275/sqm (including GST) and $250/sqm (excluding GST). The valuers agreed that the price excluding GST of $250/sqm should be adopted. 39The valuers also agreed in joint conferencing (exhibit A p 546 par 54) that the sale of 4 Farrow Road was subject to the same Structure Plan as the parent parcel which provides for the future rezoning and future redevelopment of the precinct. Four Farrow Road is partly within the "Mixed Use Medium Density" zone whereas the parent parcel is within the "Medium Density Zone" shown in the Structure Plan. Mr Preston applied the sale of 4 Farrow Road of $250/sqm without adjustment to the subject land. As identified above Mr Lunney applied a rate of $225/sqm, making a downward adjustment of 10 per cent. 40According to Mr Preston's report at the table in par 95 of vacant industrial land sales 4 Farrow Road shows a rate per square metre of $275. In the joint report he stated that the sale shows an unadjusted for GST rate of $250/sqm. The sale is very proximate in time to the date of acquisition and no adjustment is necessary. Mr Preston was cross-examined about how he adjusted the sale from $275 to $250/sqm and the absence of reasons for not further adjusting the sale at $250/sqm when applying it to the subject property. 41Mr Lunney makes a 10 per cent downwards adjustment of the sale to arrive at $225/sqm. The basis for that downwards adjustment is explained in three parts at par 146 of his statement of evidence (exhibit A, tab 12), or in two parts in his joint report at par 69. Relevantly, it is an adjustment for size as 4 Farrow Road is 11,410 sqm (the parent parcel is 15,010 sqm). Further, 4 Farrow Road has "superior development potential" as it is located in the mixed use medium density zone unlike the parent parcel in the medium density residential zone and 4 Farrow Road is located directly opposite Campbelltown railway station. 42In cross-examination, Mr Lunney suggested that the adjustment for size accounted for 5 per cent of the 10 per cent adjustment. Four Farrow Road has an area of 11,410 sqm. The subject site has an area of 15,010 sqm. As Mr Lunney accepted, the prospective purchasers of either of those lots fits within the same segment of the market. 43Mr Lunney carried out a size comparison exercise to suggest that lower rates were paid for larger lots at par 65 of the joint report. The comparison is between two small lots of 1,434 sqm and 1,630 sqm compared to a large lot of 9,248 sqm. Mr Lunney conceded in cross-examination that the smaller lots sit within a different segment of the market. 44The valuers agreed in oral evidence that normally smaller sites sell at a greater rate per square metre than larger sites. There was no sales evidence to indicate whether a different rate should be applied to a 15,000 sqm site compared to an 11,000 sqm site in the immediate area because no such sales could be found by Mr Lunney. Mr Lunney referred to more distant sales in his report to show different rates applied for different sized industrial properties. He did not rely on these directly as they were distant to the subject site. Mr Lunney suggested a maximum 5 per cent adjustment for the size differential was warranted. Mr Preston did not consider that there should be a size adjustment between 11,000 sqm and 15,000 sqm because he considered they were in the same market category. Mr Preston made no size adjustment of industrial land sales in the table at par 94 of his report which were for much smaller areas of 1,400 sqm to 4,600 sqm.

[28]

Injurious Affection (s 55(f)) (issue 3 in exhibit D) 52Mr Preston assessed injurious affection as a 15 per cent reduction of the residue land value in his report. Mr Lunney originally assessed the injurious affection at nil, as in his opinion the improvements added no value to the land. 53Mr Preston applied a piecemeal approach to the assessment of injurious affection and allocated percentage differentials for the listed items at par 142-150 of his report. He accepted that there is no market evidence for these items. He stated that it is the best that he could do in the circumstances. Mr Preston's allocations for injurious affection are as follows: (a)Visual impact on the land as a result of the loss of setback to the road alignment: 2 per cent reduction, (b)Loss of security given loss of setback and boundary fence: 3 per cent reduction, (c)Vandalism problem to retained building given loss of setback and boundary fence: 2 per cent reduction, (d)Loss of hardstand at the front of the property: 2 per cent reduction, (e)Impact of no setback on any further application to amend, add to or refurbish the existing building: 2 per cent (f)Impact of closer proximity of the goods line to the front offices: 2 per cent reduction, (g)Narrower road at the front of the property for heavy vehicle access and amenity as a consequence of the acquisition: 2 per cent reduction, (h)Improved road surface including curbing and guttering: 2 per cent offsetting adjustment (that is, benefit), (i)Loss of the amenity of external street parking in front of the subject property: 2 per cent reduction. 54The aggregate of Mr Preston's adjustments is 15 per cent including the offsetting adjustment for the improved roadway. No specific reasoning for these amounts was given. 55In the valuers' joint report (exhibit A p 560 par 164-166) Mr Lunney conceded that the residue property is slightly affected by the proximity to the new rail line and accepted Mr Preston's allowance of 2 per cent for this affection. He also accepted a minus 2 per cent for narrow road reserve and plus 2 per cent for improved road pavement/construction. He otherwise commented on the remaining six adjustments made by Mr Preston as follows: Visual impact - 2% 169. The most likely purchaser of the Residue Land is an industrial vendor/land banker. Visual impact in the short term prior to redevelopment will not, in my opinion, have any affect on the market rental value or the capitalisation rate applicable to the property. There is no market evidence of which I am aware which would indicate that there has been a diminution in the market value of the Residue Land equivalent to 2% on account of visual impact. Loss of Security - Given the loss of setback and boundary fence - 3% 170. Again, it is my opinion that loss of security, setback and boundary fence will not have any affect on the market rental value or the capitalisation rate applicable to the property. There is no market evidence of which I am aware which would indicate that there has been a diminution in the market value of the Residue Land equivalent to 3% for loss of security given the loss of the setback and the boundary fence. Vandalism Problem to retained building given loss of setback and boundary fence 2% 171. Again, it is my opinion that vandalism due to loss of setback and boundary fence will not have any affect on the market rental value or the capitalisation rate applicable to the property. There is no market evidence of which I am aware which would indicate that there has been a diminution in the market value of the Residue Land equivalent to 2% for vandalism due to loss of the setback and the boundary fence. Loss of Hardstand at the Front of the Property 172. Loss of hardstand at the front of the property, in the short term prior to redevelopment, will not, in my opinion, have any effect on the market rental value or the capitalisation rate applicable to the property. There is no market evidence of which I am aware which would indicate that there has been a diminution in the market value of the Residue Land equivalent to 2% on account of loss of hardstand. 173. In addition, it is my understanding that development consent was never granted to use any of the front setback for car parking or for the storage of materials. In my opinion to be of any added value in the "before" scenario it would be necessary to obtain development consent to use part of the front setback for a useful or economic purpose. 174. As I have indicated in my report, Mr Hams has expressed the opinion that a cost of approximately $80,000 would be incurred in obtaining development consent to use part of the front setback for car parking and in undertaking the necessary engineering works. Impact of no setback on any future application to amend, add or refurbish the existing building - 2% 175. In my opinion there will be no diminution in the market value of the Residue Land because of the loss of the setback, in any future development application. As I have indicated above, it is my opinion that the building is at or near economic obsolescence. Also it is my understanding (based upon the town planning evidence of Mr Rowan) that post acquisition there was no requirement to setback the existing factory building 10m from the alignment of the reinstated Farrow Road. GP's opinion in this regard appears to be inconsistent with the town planning evidence. Loss of Amenity and Loss of External Street Parking - 2% 176. Loss of amenity and loss of external street parking to the property, in the short term prior to redevelopment will not, in my opinion, have any affect on the market rental value or the capitalisation rate applicable to the property. 177. I am unaware of any market evidence that would indicate that the loss of on street parking adjacent to the property would give rise to a loss in value of the existing building or the Residue Land equivalent to 2%. 56At the end of the valuers' evidence in order to determine compensation pursuant to 55(a) and (f), adopting the piecemeal approach in exhibit D, it is necessary for the Court to resolve three issues being: (a)The (market) land value, on a rate per square metre, for the 1,104.4 sqm of acquired land. That value ranges from $250/sqm to $225/sqm in the valuers' evidence. (b)The value of the property (land with improvements) before acquisition. Both valuers have adopted an approach to the valuation of the property in the before by use of the capitalisation of rent. As a consequence of joint conferencing they have now agreed upon the capitalisation rate (at 10.5 per cent) and the rent (at $50/sqm). The only matter in dispute is whether the value provided by the external hardstand storage is already embedded in that $50/sqm rate, or requires the addition of an additional rental component. (c)Finally, the extent of the decrease in value of the residue land in the after needs to be determined. It is accepted by both valuers that there is a decrease in value. Mr Lunney suggested that it is 2 per cent only. Mr Preston said it is 15 per cent. The Court will need to determine that percentage downwards adjustment.

[29]

Market value of land - rate per square metre (issue 1 exhibit D) 57The valuers agreed in joint conferencing that 4 Farrow Road was the most comparable sale. No adjustment for size of that sale is necessary. No market evidence is led to suggest that a different rate per square metre will be paid for a site between 11,000 sqm (4 Farrow Road) and 15,000 sqm (the parent parcel). That is because, as was Mr Preston's evidence, no different price will be paid. 58The remaining 5 per cent downward adjustment by Mr Lunney is because of the identification of the sale in the Structure Plan as for "mixed use medium density" development compared to "medium density" development for the subject. However: (a)The potential identification of the future use of the land is set out in the Structure Plan. That was a plan prepared in 2009. Although referring to "mixed use medium density" the document is silent as to the meaning of that term. As a result, it is necessary for Mr Lunney to estimate what it may mean. (b)To the extent the market may be paying some "hope value" for the uplift from the Structure Plan, there is no market evidence to suggest that the market is sophisticated enough to distinguish between "mixed use medium density" and "medium density". (c)In order to implement the Structure Plan it will be necessary to prepare a local environmental plan. No draft local environmental plan had been exhibited as at the date of acquisition. The planning consultants are at odds as to when that may occur. The Respondent's evidence is that it may occur at some unknown time in the future. (d)After the land is rezoned, it will necessitate the removal of the industrial uses to a newly zoned industrial area. Then, the previously industrial land will transform, over time, into the mixed use medium density and medium density zones. There is simply no way to estimate, and Mr Lunney did not even wish to try, as to when that may actually occur. 59There are simply so many imponderables in Mr Lunney's scenario, that the Court would reject any suggestion that the market is so sophisticated as to adjust for the different, possible, eventual, rezoning of the land.

[32]

Injurious affection claim (s 55(f) 65Mr Preston has set out a series of separately identified, explicit adjustments. For that, he was criticised. The authorities have made it clear that the Court prefers explicit adjustments. That permits the valuers' process of reasoning to be analysed, and if necessary, challenged. Mr Preston has set out his steps to identify why he says the land suffers injurious affection. Of course, it may be accepted, that the valuation task is one which involves estimates, and not precise mathematical calculation. The valuer, and indeed the Court as judicial valuer, often expresses its approach as "doing the best I can". Sometimes, in the absence of available market evidence, the valuer must make the best guess that can be made. 66It is in those circumstances, that the Court of Appeal stated that a judicial valuer is not required to formulate verbal reasons for such guesses or exercise of judgment: Yates at 182. Indeed, "there must be room for inferences and inclinations of opinion... 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": Yates at 183. As Mr Preston said in cross-examination, in his expert opinion, the value of the land is impacted by the carrying out of the public purpose. 67Mr Lunney's approach assumed that the improvements added no value. Consequently he only accepted minus 2 per cent for the freight line noise. If the Court accepts there is value in the improvements his approach should be rejected. Following joint conferencing Mr Lunney's approach in his report whereby no value in the improvements changed as the difference between the unimproved land value of $3.375 million and the capitalisation of rent approach shows $4.06 million. The Court has the benefit of the view and the fact that the premises are obviously capable of generating income for some time yet. The time by which those improvements need to be removed for redevelopment under the Structure Plan is unknown.

[33]

Market land value-rate per square metre (issue 1 exhibit D) 68Mr Lunney considered that the best evidence of market value must be 4 Farrow Road given that the purely industrial values in Mount Erin Road do not capture the uplift in value of the development potential of the subject land. Mr Preston agreed with that approach. 69Mr Preston did not explain his reasoning in relation to 4 Farrow Road as one of the comparable sales he relied on to determine the rate per square metre for the acquired land. In the second table in par 95 of his original report, Mr Preston shows the unadjusted rate per square metre derived from the purchase price of 4 Farrow Road as $275. After joint reporting Mr Preston adopted a per square metre rate of $250/sqm in respect of the acquired land. The only conclusion is that Mr Preston has adjusted the sale as 4 Farrow Road by 10 per cent (for reasons undisclosed) to make it comparable to the subject land. 70In the joint report, Mr Preston agreed that the starting position when analysing 4 Farrow Road is to take the GST exclusive value of $250/sqm and to adjust from that figure. However, having corrected the GST error, he does not adjust the per square metre rate by a further 10 per cent in the same way he must have done in his statement of evidence (but given the adjustments are entirely undisclosed that must be inferred simply from the numbers). 71The Respondent contended that Mr Lunney's analysis ought be preferred because: (a)Mr Preston actually did adjust the sale at 4 Farrow Road by 10 per cent in his statement of evidence. He assessed 4 Farrow Road as being $275/sqm but applied $250/sqm to the subject. However, when he takes out GST, as is pointed out to him in joint reporting, he does not continue make the same adjustment; (b)Mr Preston was cross-examined about the failure to make an adjustment for size to those properties in Mount Erin Road, on which he relied (in par 94 of his statement of evidence) to derive his figure, and if one did, he accepted that it may lower the assessment of value to approximately $225/sqm; (c)Mr Lunney on the other hand has disclosed his adjustments to 4 Farrow Road (size and slightly superior development potential) to warrant the 10 per cent adjustment he has applied. There is a logical and plausible basis for his adjustments. Mr Preston appears to have never engaged Mr Lunney on either of those two adjustments nor the quantum that he has applied. In other words, Mr Preston offers no correction or challenge to Mr Lunney's adjustments. 72As a consequence, the Respondent contended that the appropriate amount of compensation to be assessed pursuant to s 55(a) is $225/sqm x 1,104.4 sqm = $250,000.

[34]

Rental value of hardstand storage area (issue 2 exhibit D) 73Mr Preston's attribution of additional value to the hardstand area is unsatisfactory. Firstly, the market does not add value beyond the footprint of the building, that is, the orthodox approach to analysing industrial rents is to apply a rate not to the whole land area, but to the land area constituting the building footprint only. Mr Lunney said so in his evidence and Mr Preston himself analysed the other industrial rents on that basis in par 96 of his report (table of leased industrial land). 74Secondly, given condition 1 of the 1988 development consent (and s 56(1)(c) aside) clearly an adjustment would need to be made given the risk arising out of the unlawfulness. That adjustment was not made. 75Thirdly, s 56(1)(c) does apply directly. Mr Preston is calculating a market value to which he then applies deductions to get to his injurious affection figure. The starting point for him is to get to the $4.28 million figure (or $4.06 million as revised), being his market value, to then make deductions. The whole point of this exercise is to determine a market value and s 56(1)(c) mandates that the use of this perimeter hardstand, being a use contrary to law, ought not add to value. 76Fourthly, the approach under s 55(f) uses the expression "value" to encompass "market value" under s 56 and "special value" under s 57 from which appropriate deductions might then be made. The expression "value" in s 55(f) means the aggregate of market and special value. Here, where no special value applies, it is market value only. 77Fifthly, the statute ought not be interpreted in such a way as to countenance compensation for unlawful use. The process of statutory construction is not to be employed to take advantage of unlawfulness (Wollongong Council v Vic Vellar Nominees Pty Ltd [2010] NSWLEC 266; (2010) 178 LGERA 445 at [75] - [79]. That compensation would also not meet the statutory mandate in s 54 to be "just" compensation if it compensated for the unlawful.

[35]

Injurious affection of residue land (issue 3 exhibit D) 78The Respondent did not consider that any injurious affection arises. If the value derived by reference to the capitalisation of income method is lower than the value derived from the sale at 4 Farrow Road of vacant land, then the building adds no value. As was advanced in the questioning of the valuers by the Respondent, at a hypothetical auction at the date of acquisition, the investor (wishing to gain income from an industrial building) would be outbid by the land-banker (prepared to pay $225 or $250/sqm for land in the same manner as at 4 Farrow Road). 79On Mr Preston's erroneous approach, the total of his injurious affection exceeds the calculated total added value of the building. On his current figures the total added value of the building is $310,000 (being his $4.06 million worked out on a capitalisation approach minus his $3.75 million worked out on a $250/sqm rate per square metre approach). 80His new total for injurious affection is $567,585 pursuant to his (flawed) calculations in exhibit D. He has looked at certain aspects of the building and determined that his 15 per cent is appropriate because of affects to the building (or at least 13 per cent of it does). Because of those minor 2 per cent and 3 per cent matters, for which he accepted there was no market evidence, his injurious affection calculation to the building is nearly double the value that the building adds to the land. That calculation, applied as a reality check or otherwise must mean it ought be rejected or treated with extreme caution. 81Overall, Mr Preston's approach to injurious affection ought be rejected. He incorrectly calculated this having regard to the unwarranted inclusion of perimeter hardstand. His adjustment of 15 per cent is: (i)not justified by market evidence on his own admission; (ii)is contrary to the market evidence simply by application of the sale at 4 Farrow which is essentially an after sale; (iii)is contrary to the matters carefully expressed by Mr Lunney in the joint report; (iv)fails any reality check when the 15 per cent diminution purportedly to the building (or at least 13 per cent of it) is applied to the overall land value, and results in an injurious affection which greatly exceeds the added value of the building itself. 82There is however direct market evidence to determine what the value of the land in the after is, and the scope and quantum of injurious affection, and that is the sale of 4 Farrow Road itself, relied upon in the before by Mr Preston. It was purchased at a time when the public purpose had nearly been completed in construction. That figure of $250/sqm captures any loss of value because of the freight trains. That sale is market evidence that there is no loss of value to this land by reason of the carrying out or the proposal to carry out the public purpose. 83Mr Lunney said at par 178 and following of the joint report: 178. The total diminution in value to the Residue Land which has been applied by GP[Mr Preston] on account of these six factors is equivalent to 13% of the value of the Residue land. 179. As I have indicated above, my analysis of GP's valuation of the Subject Property indicated that the added value of the existing building is $530,000. 180. The elements of Injurious affection included by GP which appear to relate to the existing building/use would amount to a claim for Injurious Affection equivalent to $520,000 which is equivalent to the total value of the existing building. 181. Even if there was some market evidence or sound basis to quantify the numerous adjustments GP has made in this assessment (which, in my opinion, there is not), the fact that the Injurious Affection assessment for those six factors equates to the total value of the existing building (based on GP's valuation) suggests to me that GP's estimation of Injurious affection has been significantly overstated. 182. I have reassessed my valuation to include a small allowance for the greater impact of rail noise. I have made a small allowance for Injurious Affection of 2%, which is consistent with GP's assessment in relation to that issue. This calculation is $3,126,000 x 2% = $62,500. 183. As I have indicated above, it is my opinion that the remaining factors cited by GP are matters which will not give rise to any diminution in the market value of the Residue Land. These factors could only logically affect any added value of the existing building. In my opinion the land value of the Subject Property (and the Residue Land) is greater than the capitalised value of the rental income. 184. If, contrary to my opinion the Court was to hold that the Residue Land has suffered some Injurious Affection, it is my opinion that the Injurious Affection would be limited to any added value of the building to the land rather the underlying land value. 84Mr Lunney's approach without doubt applies as a reality check, or alternatively, indicates that the guesswork that has gone into the 15 per cent simply cannot be right. 85The Respondent did not adopt Mr Lunney's approach of allowing 2 per cent for the impact of rail noise and contended that the Court ought not accept it either. Mr Lunney's reasonableness in trying to resolve doubts in favour of the Applicant ought not be held against him. However, the principle in relation to resolving doubts in favour of the Applicant (see Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Limited (1947) 74 CLR 358, a valuation principle adopted under this statutory scheme in McBaron v Roads and Traffic Authority of New South Wales (1995) 87 LGERA 238 at 244-245) does not extend to exercising a discretion in the Applicant's favour when there is no evidence to support it. With respect to Mr Lunney's his generosity of this type was rejected in Marroun v Roads and Maritime Services [2012] NSWLEC 199. 86Mr Lunney's analysis of the before and after approach demonstrates there is no injurious affection as it demonstrates that the building is at the end of its economic life and therefore it is not affected injuriously by the public purpose. The market is clearly paying for the potential which exists in Farrow Road now and would not be paying lower prices because of the redevelopment potential of this land.

[39]

90Mr Preston contended that an additional rental of $30/sqm should be applied to the hardstand area of 2,287.38 sqm. Mr Lunney contended that there should be no additional rent component for the hardstand area as it is incorporated in the overall rate applied to the improvements. In oral evidence Mr Lunney explained that all industrial properties require some hardstand area. Only when the hardstand is very large compared to the overall land area is a separate rent allowed and that is not the case here. The industrial rental sites he referred to in his evidence confirmed his approach. 91Mr Preston included in his report (exhibit A p 209 par 96) evidence of leases of industrial land. This was expanded with further sales of vacant industrial land, some with hardstand areas, in exhibit C showing a rate of $15-$25/sqm. However he agreed in oral evidence that these leases related to vacant industrial land, without improvements, and consequently did not relate to hardstand areas around industrial buildings. It was also apparent that Mr Preston in his analysis of investment property sales (exhibit A p 209 par 95) did not separately allocate any value for hardstand in those sales as he applied only one englobo figure. Accordingly there was no valuation evidence to support Mr Preston's conclusion that a separate amount of $30/sqm for hardstand should be allowed. That is unsatisfactory and does not provide the Court with much confidence in that approach. Mr Lunney only agreed that $30/sqm for hardstand areas is warranted if it is vacant land not associated with improvements. 92To the extent Mr Lunney found sales of hardstand areas of industrial land these were for vacant properties (that is hardstand only), a different market not comparable to this case. That the ARTC entered into an agreement for rent of neighbouring land for carparking at a rate of $33/sqm is irrelevant to the necessary analysis of comparable sales required to underpin Mr Preston's approach. 93In this circumstance where the hardstand area is only 15 per cent of the site area, there is no evidence of sales or leases of industrial land reflecting hardstand area values where these adjoin factories provided by Mr Preston, and where Mr Preston has not included value for hardstand in his analysis of comparables in the table at par 96 of his report, I favour Mr Lunney's opinion that rent for the hardstand is incorporated in the overall building rent of $50/sqm the valuers agreed during the hearing. I do not consider that a separate amount for the hardstand rent should be allowed given the complete absence of any evidence to support it. 94This finding results in a before value of $50 x 7,163.40 per square metre at 10.5 per cent to give $3,411,143, rounded to $3.410,000 million. For completeness I note that Mr Preston deducted and added the recovery of other figures for statutory outgoings and repairs and maintenance in the calculations set out in par 28. He also deducted building insurance of $13,100 and a vacancy factor for which he allowed $10,629. Given that the parent parcel is leased to a company related to the owners, the Applicant, and the risk of vacancy appears low, I will not deduct that amount. It makes little difference to the final result in any event. Mr Lunney originally deducted $12,000 for building insurance. Neither valuer made adjustments for outgoings in exhibit D in the section rental adjustment in the after scenario. Neither did I. 95The Applicant's counsel's submissions at par 60-64 that the hardstand area represents a valuable use for the tenant and therefore the owner of the land, the Applicant, and that therefore value should be accorded to it is really an argument based on value to the owner which is not the correct approach to market value. It is not material that Mr Lunney agreed in cross-examination that the hardstand area had value. 96It is not strictly necessary to consider the Respondent's argument based on s 56(1)(c) that storage of goods on the hardstand area is unlawful and may not be considered for the calculation of market value. I observe that the Respondent's counsel's submission (par 75) that s 56(1)(c) applies is correct for the reason given. The purpose of attributing value to the hardstand area is to derive a market value and s 56(1)(c) explicitly applies. Contrary to the Applicant's submission this step is not about the calculation of injurious affection, that is a separate and later analysis and calculation in the determination of compensation under s 55. This is not a situation where the Court has a choice of resolving a matter in favour of a dispossessed owner given the clear statutory language in s 56(1)(c).

[40]

Before valuation as potential residential redevelopment site 97The valuers also assessed the before value on the basis of the redevelopment potential for residential use of the parent parcel. The property is presently zoned industrial, but is included in the Council's Structure Plan as potential medium density zoning. A factor to be considered in relation to the potential rezoning affect on land value is the variation in value between industrial zoned land that remains industrial, and industrial land that is included in the Structure Plan and in future is likely to be zoned for higher density residential development. 98The valuers ultimately agreed that the most comparable sale for assessing value on this basis was 4 Farrow Road. I agree this is the most comparable sale given its close physical proximity to the subject site and the sale date close in time to the acquisition. 99During the view the Court inspected vacant industrial land sales in Badgally Road, Nursery Road and several in Mount Erin Road with areas ranging from 1,434 to 4,657 sqm and rates per square metre ranging from $176 to $216 referred to by Mr Preston in his report (exhibit A p 208 par 94). These properties are proposed to continue as zoned industrial under the Structure Plan. In contrast the land sale at 4 Farrow Road, which is presently zoned industrial but is included in the Structure Plan as mixed use medium density, and had a larger area of 11,410 sqm sold for $250/sqm. That sale demonstrates the much higher rate paid for land included in the Structure Plan given that sale was transacted with knowledge of the freight line impact on the property given the timing of the sale close to the date of acquisition. Mr Preston's analysis in his report of industrial sites not identified for medium density zoning in the Structure Plan show on average 32 per cent less value than 4 Farrow Road. 100Mr Lunney adjusted the sale of 4 Farrow Road downwards in relation to the subject property for three factors which are size, zoning potential and proximity to the station to derive $225/sqm. Mr Preston provided no analysis of the sale in his report and mentioned it only briefly in the joint report. He made no adjustment in relation to the subject property therefore applying $250/sqm. The criticism of Mr Preston's approach in relation to GST by the Respondent's counsel at par 69-70 is warranted in the absence of any explanation in evidence by Mr Preston about his process of analysis of this sale. That suggests there should be some adjustment down of Mr Preston's figure of $250/sqm.

[45]

Injurious affection 108As concluded above in par 105 the improvements (buildings) have no value and cannot therefore be the subject of an injurious affectation claim. Mr Lunney opined that most of the factors identified by Mr Preston affect the existing building, not the residue land. These factors are loss of security (b), vandalism (c), loss of hard stand at front of property (d) which appears to be the same as the next factor, impact on development potential of existing building (e). As the building has nil value there can be no injurious affection in relation to these factors. 109Injurious affection, if there is any, can be calculated on land value in the after scenario. Mr Preston stated that he did not have valuation evidence to support his various assessments, for which he was criticised by the Respondent. As submitted by the Applicant's counsel that is not always a requirement for awarding just compensation as there is simply not always market evidence available. As identified in Yates, reasonable assumptions in the exercise of experienced judgment of a valuer which are more than guesswork are acceptable. I consider some of Mr Preston's factors identified in relation to the land (not the building for the reason just given), three of which are agreed by Mr Lunney, are of that character. 110I agree with the 2 per cent for injurious affection by rail noise to the land agreed by the valuers (f). As to the narrower road at the front of the property for heavy vehicle access for which a 2 per cent reduction is allowed by Mr Preston (g), that is offset by the agreed road surfaces improvement of 2 per cent benefit (h). I also consider the visual impact on any future building on the land is also warranted as injurious affection given my acceptance that the highest and best use is as a redevelopment site (variation of (a)). I consider 2 per cent is reasonable to allow for this factor. 111I am not aware of any legal or valuation basis for allowing 2 per cent for loss of carparking on a public road at the front of the parent parcel (i). I do not consider that fits the description of a decrease in value of the residue land and relates to the management of public land which is entirely unrelated to the parent parcel and not a matter over which an owner can expect to have any control. I will not allow any injurious affection based on this factor. 112Contrary to the Respondent's submission at par 85 relying on Marroun that the two per cent for rail noise should not be allowed because there is no sales evidence to support it, I consider it is reasonable and an application of common sense to consider that there would injurious affection from the freight rail line on the current and future uses of the land in terms of noise and visual impact. That is apparent from the view when the location of the property close to the line was evident. It is reasonable to award compensation in these circumstances. Four percent of $3,302,705 is $132,108. 113Market value and injurious affection of $262,295 and $132,108 together total $394,403.

[47]

Applicant's submissions 117The disturbance claim is made pursuant to s 59(f). The Court must determine whether the claim fits within the words of s 59(f). The component parts of that provision are dealt with separately below: (a)By its terms, the provision relates to "financial costs". The legislative approach to the meaning of "financial costs" has been considered over the years, and recently dealt with by the Court of Appeal in El Boustani v Minister Administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33; (2014) 199 LGERA 198. The clear consequence now is that it relates to both financial costs and financial losses. However, it is wrong to approach the requirement of the provision that there must be a loss. Rather, and particularly in the circumstances of this case, it is simply an inquiry as to whether there is a financial cost. (b)In relation to reasonably incurred (or that might reasonably be incurred) the concept of reasonableness informs the incurring, not the costs themselves. This gives rise to a question of fact per George D Angus Pty Ltd v Health Administration Corp [2013] NSWLEC 212 at [79]. (c)Relating to the actual use of the land: "the land" is the acquired land, however in a partial acquisition if the actual use of the residue land is so intimately connected with the actual use of the acquired land, so that the use of one is dependent on the other, that is sufficient to bring the actual use of the residue land within s 59(f). The "use" is by the person entitled to compensation. It must be "an actual" use. The relevant comparison is the "actual use" against a "potential future use". The words "relating to" used in s 59(f) are used deliberately to expand the operation of the provision. They are words of wide import. The giving of these words wide meaning is consistent both with the general approach to interpretation of compensation legislation and also the fact that s 59(f) is the "catch-all" provision per George D Angus at [104] - [106]. (d)Direct and natural consequence of the acquisition: relevantly this requires a causal connection. Importantly, it need only be "a" direct and natural consequence. It does not need to be "the" consequence. That has a consequence that the acquisition does not need to be the sole cause. Ultimately, some causal connection needs to be able to be shown between the acquisition and the claimed loss per Fitzpatrick Investments Pty Ltd v Blacktown City Council (No 2) [2000] NSWLEC 139; (2000) 108 LGERA 417 at [20], see also George D Angus at [80]. In the circumstances of this case, it is impossible to suggest that there is no causal connection between the acquisition and the cost. Indeed, the nexus was expressly recognised by the entering into by the ARTC of the licence agreement so as to provide the replacement car parking. 118The quantum of $44,000 capitalised at 10.5 per cent to arrive at $440,000 is sought.

[48]

Respondent's submissions 119There are several reasons why the claim does not come within the purview of s 59(f). There is no "cost" (which may be read as "loss") to the Applicant. They are the holder of the reversionary interest and has not made a claim for lost rent or likely lost rent based on his tenant vacating or negotiating a different rent. They point to no provision in the lease or any other factual matter demonstrating an obligation or requirement to provide parking which gives rise to a compensable interest. Mr Preston conceded in cross-examination that as a matter of fact the rent paid by the tenant had not changed as a consequence of the acquisition. It could be that the loss of car parking has an impact on the business of the tenant. However the proceedings before this Court by the tenant have been settled. 120This claim does not arise out of the Applicant's "actual use of the land". His use is as a landlord receiving a rental income from a tenant. It is that tenant that is using the land for an industrial purpose and which "requires" carparking (although that is not accepted as a question of fact). Any putative need for car parking arises out of the actual use by the tenant. The "use" must be by the person entitled to compensation, George D Angus at [105]. 121It is not "reasonable" to incur such costs given the timing for the rezoning to medium density residential (particularly when the sum is capitalised in perpetuity rather than for 1-5 years), see Tobias JA in Roads and Traffic Authority (NSW) v McDonald [2010] NSWCA 236; (2010) 79 NSWLR 155 at [143]. 122It is not "a direct and natural consequence of the acquisition" in that the chain of causation is not attributable to the actions of the acquiring authority, particularly based on the fact that car parking land offsite is likely to arise as a need, if at all, because the user of the land is operating unlawfully by the storage of frames and trusses external to the building, in breach of the development consent. No nexus is established by the ARTC entering into the licence agreement with the Council to provide replacement car parking. Almona Pty Ltd v Roads and Traffic Authority of New South Wales [2008] NSWLEC 112; (2008) 160 LGERA 375 identifies the distinction between the consequences of the acquisition against the consequences of the carrying out of the public purpose. This claim fits better under s 55(a) or s 55(f). There is nothing left to catch. The licence agreement relates to more than car parking as it was for the purpose of carrying out works that were part of the public purpose that were located on the acquired and residue land. The use of the Council land was only temporary. The actions of the ARTC demonstrate no nexus between the acquisition and the cost the Applicant claims he will incur. 123It is not something which "might be incurred" on the evidence, that is, the Applicant has not identified any negotiations with the Council or the availability of the Council's land to be used for car parking. That there was a licence agreement between the ARTC and the Council was part of a much larger arrangement between those parties. The Court cannot be satisfied on the evidence presented that his expenditure might be incurred. 124The claim is a double dip as the Applicant has been paid market value for the area of the acquired land at a rate per square metre. The claim for other land to use as carparking because that is what he used the residue land for is a double dip. He has already been compensated for the loss of the acquired land and can spend that money to replace the land that he lost if he so chooses. The claim is really one of reinstatement. 125The claim is exorbitant at $440,000 when the cost of buying the same area of land of 1400 sqm on Mr Preston's figure of $250/sqm would be $350,000.

[49]

Disturbance claim for lease of land not within s 59(f) 126The circumstances in which s 59(f) can apply are potentially wide, subject to the requirements of the section being satisfied. No similar case has been found. George D Angus usefully considers the four requirements of s 59(f) and reviews numerous cases which have considered the subsection. It is correctly summarised in the Applicant's submissions and I will refer to it again shortly. The claim in that case under s 59(f) for loss of income or profit from a business which had to be moved as a result of the acquisition to other nearby premises was successful. Part of the same claim relating to a second move to other premises was not successful. The Applicant relied heavily on the findings in George D Angus to support his claim. 127In RTA v McDonald Tobias JA held at [143] that a rental claim for temporary accommodation pending construction of a new residence on residue land was claimable under s 59(f). In Almona the claim under s 59(f) was for lost rental income as the construction works for a T-way, the public purpose, over the short term caused and would continue to cause an increase in vacancy rates for casual stall holders at the Parklea Markets in Sydney, preventing Almona, it was said, from implementing its usual rental increase for stall holders and so reducing its operating profit for two years. This financial loss of profit was claimed on the basis that it related to the actual use of the acquired land for the purpose of a market and was a direct and natural consequence of the acquisition. This claim was rejected because the works related to the carrying out of the public purpose and not the actual use of the acquired land, to which s 59(f) is directed. Further the acquisition as a matter of fact had no consequences relating to the actual use of the acquired land or the residue land other than that the land was taken. The taking of the acquired land had no effect on the functioning of the markets as the carparking lost could be provided elsewhere on the residue land which had ample room for more carparking. 128This claim is unlike any of those cases. For the Applicant to succeed I must determine if the requirements of the section are met. The first issue to arise is whether there is a financial cost to the Applicant as identified in his affidavit evidence. He intends to enter into a licence with the Council to enable use of the neighbouring council land for carparking to replace the land acquired, used previously for carparking. In George D Angus at [97], [99] financial costs were held to refer to financial costs to which the person becomes liable through their own actions as well as financial losses suffered as a result of the compulsory acquisition of their land. The Respondent argued that the Applicant had to point to a loss such as rent foregone under the agreement with the tenant. Loss of rent is not claimed by the Applicant however. Whether the rent paid by the tenant was affected by the acquisition (it was not) is not relevant to whether financial costs within the meaning of s 59(f) are sought. The Applicant's claim for financial costs he intends to incur comes within this part of s 59(f). 129Costs which are reasonably incurred or might reasonably be incurred can be claimed. The word reasonably governs the word incurred or might be incurred, not the expression financial costs per George D Angus at [103]. I accept the costs are likely to be incurred based on the Applicant's evidence. He is sensibly awaiting the outcome of these proceedings before incurring that cost. 130One issue which arises is whether incurring the costs is reasonable when there is no obligation to provide on-site parking placed on the Applicant under the lease with the present tenant. This is clear from the terms of the lease in evidence (exhibit B tab 27). This suggests that incurring the financial costs is not reasonable. 131A related but separate question to assessing that issue is whose actual use of land can give rise to a claim under s 59(f). Section 59(f) does not specify whose use can be relied upon to satisfy the section. Almona at [60] adopted in George D Angus at [105] held that the use must be that of the dispossessed owner not the use of the acquiring authority, reflecting no doubt the facts in those cases. Whether the actual use of property by a person not the dispossessed owner, here a tenant, satisfies the subsection arises for consideration, possibly for the first time. The Applicant's counsel submitted that the tenant's use did satisfy the use of land requirements in the section. Any need for carparking arises out of that actual use of the residue land by the tenant. The words "incurred by the persons entitled to compensation" which appear in s 59(a), echoed in "by those persons" in (b)-(e) do not appear in s 59(f). On its face the financial loss or cost is not explicitly confined to the use by the person entitled to compensation unlike the other subsections of s 59 and could include the tenant's use. In the absence of any obligation to provide carparking however I do not consider this claim is for costs reasonably incurred, as I held in the previous paragraph. 132"Relating to" has a wide import citing Blacktown City Council v Fitzpatrick Investments Pty Ltd [2001] NSWCA 259 at [28]. A direct and natural consequence of the acquisition, requires a causal connection between the acquisition of land and the incurring of the financial costs. It is sufficient if it is "a" cause, not "the" cause, George D Angus at [107]. Given the lack of any obligation on the Applicant to provide carparking under the lease and evidence that there has been no change in rent as a result of the acquisition, I have difficulty concluding that there is a causal connection between the acquisition of land and the financial cost being incurred. 133Where there is a partial acquisition of land and the actual use of the residue land is closely connected with the acquired land so that use of one is dependent on the other, that is sufficient to bring the actual use of the residue land within s 59(f) citing Roads and Traffic Authority (NSW) v Peak [2007] NSWCA 66 at [71], George D Angus at [104]. In Peak two cases where compensation was awarded under s 59(f) considered were McBaron v RTA and Johnston v Roads and Traffic Authority [2000] NSWLEC 111. Johnston was found to be contrary to Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority (NSW) [2006] NSWCA 314 and Fitzpatrick. McBaron in which costs of relocating a dairy to the residue land were allowed at 247 was approved in Peak. In Peak the Court of Appeal considered the respondent's claim for the cost of improvements to the residue land caused by the necessity to relocate a residence rendered uninhabitable were permissible under s 59(f). The actual use of the residue land was found to be intimately connected with the use of the acquired land at [71]. Here the use of the residue land does not depend on the use of the acquired land and the manufacturing of trusses can continue without the use of the acquired land for carparking so that the necessary causal connection to a financial cost is not established. 134Further, the financial costs must relate to the acquisition, not the carrying out of the public purpose for which acquisition was undertaken. The claim for lost profit in Almona was found to be related to the implementation of the public purpose not the direct and natural consequence of the acquisition. The licence agreement with the ARTC relied on by the Applicant related to the implementation of the public purpose and cannot provide support for the Applicant's claim under s 59(f), consistent with Almona. 135The Respondent submitted this is really a reinstatement of land claim and that is what is compensated for when market value is paid. I agree. For the various reasons given above I do not consider that this part of the Applicant's claim for disturbance satisfies s 59(f).

Jameson v Rail Corporation New South Wales

At a glance

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Judgment (52 paragraphs)

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Cases Cited (23)

Cited By (5)