Kalambaka Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979

Kalambaka Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 - [2009] NSWLEC 65 - NSWLEC 2009 case summary — Zoe

[70]

39 The opinion of Mr Viarella was that the units on the residue lands would have commanded a substantial premium by reason of the associated acquired lands and resort facilities thereon. 40 The respondent, on the basis of Mr Watt's evidence, submits that resort facilities on the acquired lands would have added nothing to the value of units on the residue lands. This in part involves the proposition that the constraints mean that the acquired lands are not in substance "waterfront" lands and are no more valuable than open space land in any other area. I disagree. The acquired lands have water frontage. There is access to the river through gaps in the mangroves. There are pleasing water views through those gaps and elsewhere, through the foliage. There are also good view corridors to the water on either side of the mangroves. 41 Mr Watt's view that, in any event, resort facilities on the acquired lands would have added no value to units on the residue lands, relied on a comparison between two multi-level developments with commercial/retail units on the ground floor and residential units above, some blocks away in the Parramatta Central Business District. One was at Charles Street and had no such facilities. The other was at Hassell Street and had a swimming pool and barbeque area - reached by crossing an unattractive, large, open, concrete stormwater drain - and a putting green on artificial grass at ground level below the building. Units in the latter commanded no premium over units in the former. I do not accept that this comparison between developments in a very different environment dictates a conclusion that units on the residue lands would not command a premium by reason of the proposed resort facilities thereon. It is important to take into consideration not just the proposed resort facilities but also their location on rare waterfront lands. The acquired lands have expansive northern views looking towards the river. The mangroves themselves are attractive. I have earlier noted the pleasing water views through the mangroves and along view corridors to the river on both sides of the mangroves. I agree with Mr Viarella that the waterfront location of the acquired lands, and resort facilities thereon, would have been appealing to buyers of units on the residue lands.

[76]

47 Secondly, the respondent submits that there should be a discount because the value that Mr Viarella attributed to the units on the residue lands in the before scenario included an element for a scarcity factor of privately owned lands with absolute water frontage, which was contributed to by reason of the carrying out of the cycleway public purpose. The cycleway proceeds on one side or the other of the Parramatta River. The respondent submits that under s 55(f) of the Just Terms Act, this increase in the value of the residue lands should be deducted from Mr Viarella's assessment. The applicant submits that, while this may be technically correct, such exclusivity would have had an almost inestimable effect. I accept the respondent's submission: see [10] above. Again there is no valuation evidence to assist in determining the quantum of the discount. Doing the best I can in the absence of expert evidence, I propose to discount Mr Viarella's assessment by 10 percent on account of this consideration. 48 Thirdly, the respondent submits that (a) an indirect effect of the cycleway public purpose was to facilitate a change in zoning to B4 Mixed Use of the non-acquired lands formerly zoned Open Space; (b) that meant that the value of the residue lands was increased by the carrying out the cycleway public purpose; (c) therefore there should be a discount for that increase under s 55(f) of the Just Terms Act. I have difficulty in seeing a sufficient causal connection in terms of s 55(f), which directs attention to the acquisition date. The change in zoning did not appear in the draft LEP that had been exhibited prior to the acquisition date. Not all of the lands then zoned Open Space were acquired for the cycleway public purpose. That strengthened the case for rezoning the non-acquired Open Space lands, as occurred soon after acquisition, in the 2007 LEP. It may be accepted that the public purpose was a contributing factor to the rezoning change which in turn increased the value of the rezoned lands. However, in my opinion, this does not mean that the increase in value was "by reason of" the carrying out of the cycleway public purpose within the meaning of s 55(f). The causal chain was insufficient, in my view, because it was still a discretionary matter, in light of the acquisition, for the council to decide whether or not to submit to the Director-General, who then had to report to the Minister, that the non-acquired Open Space lands should be rezoned in the LEP, and for the Minister to decide whether or not to effect such rezoning in the LEP 2007: ss 68(4) and 70 Environmental Planning and Assessment Act 1979. As Hodgson JA said in AMP Capital Investors Ltd v Transport Infrastructure Development Corporation [2008] NSWCA 325, (2008) 163 LGERA 245 at [99]:

[78]

49 If I am wrong, any such increase in the value of the residue lands for which the respondent contends seems to be captured in the before and after method of valuation. The respondent accepts this would be so ordinarily but submits that, as at the acquisition date, it could not safely have been assumed that the area of the residue lands effectively extended by the LEP 2007 was developable. The difficulty with the submission is that neither valuer said it was unsafe to make that assumption and, on the contrary, gave evidence to the opposite effect. Indeed, in closing submissions the respondent accepted that there was no doubt that at the acquisition date a purchaser would reasonably have expected to be able to develop that land. I therefore do not accept the submission. 50 Fourthly, the respondent submits that there should be a discount because Mr Viarella's ranging premiums between $40,000 and $55,000, for units on the residue lands by reason of development of the acquired lands with resort facilities are disproportionately high compared with the difference in value of $20,000 that he ascribes to the same sized units with and without water views. For example, Mr Viarella considered that a three bedroom apartment with water views would have commanded a premium of $50,000 in the before situation compared with the after situation; whereas three bedroom apartment with water views in both the before and after situations commanded only a premium of $20,000 over a three bedroom apartment without water views in both the before and after situations. Mr Viarella was cross-examined on this point, but stood his ground. A difficulty with the submission is that the respondent's valuer did not dispute Mr Viarella's values or proportions in relation to units with and without views. That is not conclusive, but it is sufficient to incline me against discounting Mr Viarella's assessment on account of this argument alone. However, when I combine it with the respondent's final quantum submission I am persuaded that a further discount is appropriate.

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