Legato v Roads and Traffic Authority of New South Wales

30189 of 2004 Legato v Roads and Traffic Authority of New South Wales

1 Her Honour: Prior to 10 October 2003 the Applicant, Mrs Legato, owned the whole of Lot 16 DP 833741 known as 42 Maple Road, Casula ("the Parent Land"). On 14 May 2003 a deposited plan was registered which divided the Parent Land into two separate lots being Lot 21 DP 1052978 which is 13,440 m2 and Lot 23 DP 1052987 which is 147.3 m2. By notice published in the Government Gazette on 10 October 2003, the Roads and Traffic Authority of New South Wales ("the RTA") compulsorily acquired Lot 23 DP 1052987 ("the Acquired Land") pursuant to the Roads Act 1993 for the purpose of constructing the M7 Westlink, formerly known as the Western Sydney Orbital. Lot 21 in DP 1052978 ("the Residue Land") remains in the ownership of the Applicant.

2 A compensation notice dated 17 November 2003 issued by the RTA under s 42 of the Land Acquisition (Just Terms Compensation) Act 1991 ("the Just Terms Act") offered the Applicant the sum of $46,500 in compensation for the compulsory acquisition of the land. The Points of Assessment of Compensation filed by the RTA pursuant to Pt 13 r 8 of the Land and Environment Court Rules indicates that this figure included $42,00 for market value and $4,500 for disturbance and did not include any sum intended to compensate the Applicant for any loss in value of the Residue Land as a result of the acquisition by the RTA of the Acquired Land.

3 The Applicant has appealed to this Court under s 66 of the Just Terms Act against the amount of compensation offered in the compensation notice. The Points of Claim filed by the Applicant claimed $2,224,300 in total compensation, representing $60,000 for the market value of the Acquired Land, $14,300 for disturbance and $2,150,000 for the loss in value of the Residue Land due to the impacts of the proposed M7 Westlink.

4 I was assisted by Commissioner Nott at the hearing, and we had the benefit of a view of the Acquired Land, the Residue Land and the developments adjoining the Residue Land. At the time of our inspection, works for the proposed M7 were under construction.

The Land 5 The western boundaries of the Acquired Land and the Residue Land immediately adjoin the M5 motorway.

6 The Acquired Land is a cleared, vacant, level, and triangular shaped lot of 147.3m2 which is located at the south western corner of the Residue Land.

7 The Residue Land is a cleared, very slightly sloping, and slightly irregular-shaped lot of approximately 13,440m2 with a frontage of 100.59m to Maple Road, a rear boundary of 113.86m and side boundaries of 103.79m and 150.76m. At present one two-storey dwelling and a number of sheds and outhouses are located on the Residue Land which is otherwise vacant. The Residue Land is bounded: (a) to the north by 50 Maple Road, Casula; (b) to the east by Maple Road; (c) to the south by 193 Wattle Road, Casula; and (d) to the west by the Acquired Land (on the southern portion of the western boundary only) and the M5 motorway. A 4m high concrete noise barrier, constructed as part of the M5 motorway works, located on land owned by the RTA, runs along the western boundary of the Residue Land.

8 Both the Acquired Land and the Residue Land are currently zoned residential 2(a) under the Liverpool Local Environmental Plan 1997.

The Land Acquisition (Just Terms Compensation) Act 1991 9 The Just Terms Act regulates the basis on which compensation is payable for the compulsory acquisition of land. Section 54(1) of the Just Terms Act states that: The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land.

10 Section 55 of the Just Terms Act relevantly states that: 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.

The Issues The Joint Statement of Issues 11 In accordance with directions made by the Court the parties filed a Joint Statement of Issues on 12 November 2004 setting out the issues in dispute between the parties as follows: 1 Section 55(a) - Market Value 1.1 The Court needs to determine the market value of Lot 23 DP 1052987 (Acquired Land) as at 10 October 2004 (Acquisition Date) pursuant to sections 55(a) and 56 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Act). The Acquired Land has an area of 147.3m2.

1.2 In determining market value for the Acquired Land, the following issues arise: (a) What constituted an appropriate development of Lot 16 DP 833741 (Parent Parcel) for the purpose of identifying the development potential of the Parent Parcel as at the Acquisition Date (i.e. was it conventional subdivision, integrated housing or multiple dwellings)? (b) What number of allotments or multiple dwellings was appropriate for the Parent Parcel at the Acquisition Date? (c) What are the comparable sales? (d) What analysis of, and adjustments to, the comparable sales ought to be made to arrive at a $ rate per square metre for the Parent Parcel? (e) What $ rate per square metre should be applied for the purpose of determining the market value of the Acquired land at the Acquisition Date? 2 Section 55(f) - Injurious Affection 2.1 The Court needs to determine whether there was any increase or decrease in the value of Lot 21 DP 1052987 (Residue Land) at the Acquisition Date by reason of the carrying out of, or the proposal to carry out, the Western Sydney Orbital Project, now known as the Westlink M7 (Project) pursuant to section 55(f) of the Act. The Residue Land has an area of 13,590 square metres. 2.2 In determining the above question, the Court needs to have regard to: (a) Any change in the noise impact on the Residue Land arising from the carrying out of, or the proposal to carry out, the Project and in particular: (i) what is the change in noise impact arising from the carrying out of, or the proposal to carry out, the Project? And (ii) what mitigation measures, if any, would the landowner be required to undertake itself arising from the carrying out of, or the proposal to carry out, the project? (b) Any visual impact of the Project on the Residue Land arising from the carrying out of, or the proposal to carry out, the Project and in particular: (i) whether the visual impact of the elevated section (Structure) of the Project adjacent to the Residue Land (Proposed Road) can be ameliorated without diminishing the internal amenity of the individual dwellings? And (ii) the extent to which landscaping on the land between the Proposed Road and the Residue Land owned by the Respondent would mitigate the visual impact of the Structure?

(c) Any change in air quality on the Residue Land arising from the carrying out of, or the proposal to carry out, the Project; and (d) Any increased accessibility of the Residue land to and from the locality arising from the carrying out of, or the proposal to carry out, the project.

The Acquired land 12 In the course of the hearing the parties agreed that the market value for the whole of the Acquired Land is $350 per m2. Accordingly, the Applicant is entitled to $51,555 (147.3 m2 x $350 per m2) for the market value of the Acquired Land. This resolves Issue 1.

13 While the Joint Statement of Issues did not mention disturbance, the Applicant's Points of Claim included a claim for disturbance and the parties agreed on the last day of the hearing that the Applicant was entitled to the sum of $4,846.16 for disturbance.

The Residue Land 14 The experts were of the agreed opinion that the highest and best use of the Residue Land would be for development for multiple dwellings in accordance with the residential 2(a) zoning of the land under the Liverpool Local Environmental Plan 1997. By comparison with the sales of other en globo properties suitable for similar residential development, the valuers agreed that the Residue Land would, assuming that there had been no proposed M7 Westlink, have had a value of $350 per m2 immediately before the date on which the RTA acquired the Acquired Land. As stated above, the Residue Land is 13,440m2 in size. Therefore the parties agreed that the market value of the Residue Land, assuming no injurious affectation resulting from the M7 Westlink, was $4,704,000.

15 On the second day of the hearing the Applicant decided that she would no longer press her claim in relation to any decrease in the value of the Residue Land resulting from the noise impacts of the M7 Westlink. Therefore the Court is no longer required to determine issue 2.2(a).

16 The only outstanding issues which remain for determination by the Court are Issues 2.2(b), (c) and (d) as they relate to Issue 2.1 in the Joint Statement of Issues.

The Evidence 17 The Applicant relied on the written and oral evidence of: (a) Mr James Lovell, a town planner; and (b) Mr Lopco Neskovski, a valuer.

18 The Respondent relied on the written and oral evidence of: (a) Mr Harvey Sanders, a town planner; and (b) Mr Colin Sorrenson, a valuer.

Issue 2.2(b) - Visual amenity 19 The Applicant claims a 7% decrease in the "before" value of the whole of the Residue Land as a result of the visual impacts of the proposed M7 Westlink based on Mr Nevkovski's evidence, that is, a decrease of $329,280 ($4,704,000 x 7%; or 7% x $350 per m2 x 13,440m2). The evidence of Mr Sorrenson, the RTA's valuer, was that the reduction in value of the Residue Land was in the range of $117,600 to an absolute maximum of $200,000 (that is, from 1% to 4.25% of $350 per m2 x 13,440m2).

20 Both valuers agreed that this exercise required subjective analysis based largely on their experience as valuers. However, Mr Nevkovski did undertake analysis of two sales, being 193 Wattle Road, Casula ("LN2") and 50 Maple Road Casual ("LN3"), which adjoin the Residue Land. LN2 was a privately negotiated purchase by the RTA and is not necessarily representative of an open-market transaction.

21 LN3 was of unsewered land. When comparing LN3 and LN2 with each other, adjustments to the sale prices would have to be made for this and other differences, including a large adjustment for the upward movement of the market between the two sale dates. Mr Nevkovski said that LN2 was affected only by the M5, whereas LN3 was affected by impacts from both the M5 and the proposed M7 Westlink. Mr Nevkovski was of the opinion that LN2 reflected a value for that property of $406 per m2 as at 10 October 2003. But this value of $406 per m2 seems too high, when one takes into account the fact that the valuers and parties have agreed that, having regard to other sales evidence, the "before" value of the Residue Land (assuming no M7 Westlink proposal) was $350/m2. Also, in comparing both LN2 and LN3 with the Residue Land, the Residue Land: (a) has a more regular shape; (b) is much larger than LN2 and LN3; (c) is proportionally less affected by traffic noise. Accordingly, the Court does not derive much assistance from LN2 and LN3 in assessing the decrease in value of the Residue Land on account of the proposed M7 Westlink.

22 I give no weight to an offer made by AV Jennings for the Applicant's property in 2002, even assuming it is admissible (see McDonald v Deputy Federal Commissioner of Land Tax (1915) 20 CLR 231), in assessing the decrease in value of the Residue Land as a result of the visual impacts of the proposed M7 Westlink.

23 The M7 Westlink will, when built, consist of several elevated long fly-overs or ramps to the west, north and north-east of the Residue Land and will affect, to varying extents, the whole of the Residue Land when developed. At the closest point, one of the M7 Westlink roads will be 30m from the western boundary of the Residue Land. While most of the M7 Westlink roads are reasonably distant to the north and north-east, these roads will have a dominant visual impact. I am of the view that the RTA landscaping will not be a sufficient screen for the M7 Westlink road works. The large earth mound, consisting of a landscaped "pyramid" which is proposed as a "gateway" feature for the M7 Westlink, will block some views of the M7 Westlink roads but will not, in my view, greatly diminish the visual impact. While no layout of the likely future development of the Residue Land was in evidence it is clear that, whatever layout is ultimately adopted, parts of the M7 Westlink roads or acoustic barriers are likely to be seen from the access driveways, or common areas and many of the units (particularly from the first floors) of any future multiple-dwellings development which occurs on the Residue Land. Different parts of the Residue Land and the various units in any proposed development will be visually affected to varying degrees, and it is appropriate to apply an average percentage reduction in the "before" value of the whole of the Residue Land.

24 I am of the opinion that the decrease in value of the Residue Land due to the visual impacts of the M7 works would be in excess of what Mr Sorrenson, the RTA's valuer, described as his absolute maximum of $200,000. As the judicial valuer, I will adopt a reduction of five percent of the "before" value of $4,704,000. Accordingly, the compensation payable for the reduction in the value of the Residue Land as a result of the visual impacts of the proposed M7 Westlink is $235,200.

Issue 2.2(c) - Air pollution 25 The claim for air pollution was described by the Applicant's valuer, Mr Nevkovski, as insignificant in that it would likely result in a one percent decrease in the value of the whole of the Residue Land. No evidence was adduced to support the Applicant's claim in this regard, with Mr Nevkovski simply considering that this is a matter which would be taken into account by a hypothetical prudent purchaser. While the RTA's valuer, Mr Sorrenson, was of the opinion that no allowance should be made in respect of air pollution, I am prepared to allow a small reduction in value of about $15,000 due to air pollution having seen the site and the extensive nature of the M7 Westlink road works.

Issue 2.2(d) - Access 26 The RTA argued that there would enhancement in value of the Residue Land due to greater accessibility to Blacktown, Rooty Hill and Penrith which will be provided by the M7 Westlink. There was minimal evidence on this issue and I do not consider that the evidence provided was sufficient to warrant a finding that the value of the Residue Land is enhanced.

Issue 2.1 - Compensation Payable for the Decreased Value of the Residue Land 27 Taking into account the amounts by which I have determined that the value of the Residue Land will be adversely affected by the visual impacts and air pollution resulting from the M7 Westlink, I determine that the compensation payable for the decrease in value of the Residue Land is $250,000.

Orders 28 The Court makes the following orders:

1. Compensation under the Just Terms Act is determined in the sum of $306,401.16, representing: (a) a market value of the Acquired Land of $51,555 (s 55(a)); (b) a loss attributable to disturbance of $4,846.16 (s 55(d)); and (c) a decrease in the value of the Residue Land of $250,000 (s 55(f)).
2. The exhibits may be returned.
3. The question of costs is reserved.

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