Maggiotto v Roads and Traffic Authority [2006] NSWLEC 54 | Case summary

7 Following acquisition the residue land comprises three individual allotments. Such land is irregular in shape, being bound on the north-east by Hinchinbrook Creek. There is significant visual impact of the WSO which is elevated approximately three storeys above the residue land. Beside the WSO and adjacent to the residue land is a tar sealed bicycle path with associated street lighting. The frontage of the residue land to Government Road is reduced to 18.44 m. 8 The land is subject to the Liverpool Local Environmental Plan 1997 ("the LEP"). Pursuant to the LEP four zonings exist on the land. 9 The Residential 2(a) land ("the 2(a) land") is primarily on lot 17, but a small portion of 2(a) zoning exists on lot 18. Small portions of lot 17 near Hinchinbrook Creek are zoned Recreation 6(a) and Special Uses 5(a). The remainder of lot 18 and whole of lot 19 are zoned Future Urban 1(e) ("the 1(e) land"). Following the acquisition the 2(a) land in the former lot 17 now has no frontage to a public road. 10 The boundary between the 2(a) land and the 1(e) land corresponds to the location of an Aircraft Noise Exposure Forecast (ANEF) contour. The 2(a) land is within the 20-25 ANEF contour, whereas the 1(e) land is within the 25-30 ANEF contour. ANEF contours are determined by the Commonwealth Civil Aviation Authority. 11 Clause 18 of the LEP prohibits the erections of dwellings in areas where the ANEF exceeds 25. In areas where the ANEF is 20 to 25, dwelling houses may be erected provided they meet Australian Standard AS2021-1994 (Acoustics - Aircraft noise intrusion - Building Siting and Construction), hereafter referred to as "AS2021". Pursuant to s 117 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") the Minister has made Directive G16 - Airport Noise. Such directive relevantly provides: Except where the council can satisfy the director that any particular provision or area should be varied or excluded having regard to the provisions of s 5 of the Environmental Planning and Assessment Act 1979: (i) Draft local environmental plans shall not rezone land: (a) for residential purposes, nor increase residential densities in areas where the Australian Noise Exposure Forecast (ANEF) as from time to time advised by the Civil Aviation Authority exceeds 25: or … (ii) Draft local environmental plans which rezone land: (a) for residential purposes or to increase residential densities in areas where the ANEF is between 20 and 25; or … shall include a provision to ensure that development meets AS 2021 regarding interior noise levels. 12 A portion of the land, primarily in the 2(a) zoning, is classified as Environmentally Significant Land ("ESL"). Clause 16(1) of the LEP requires that before an application to carry out development on ESL may be approved, the Council must consider whether the development substantially retains existing vegetation, does not detract from the scenic qualities, and does not adversely affect native fauna. 13 The Hoxton Park area was first considered for future urban development in 1968 when the Sydney Region Outline Plan ("SROP") was published. Under the SROP, the Hoxton Park release was divided into Stages 1 and 2. The land is located within the Stage 2 release area. In 1989 the Council adopted a structure plan for the release of land for urban development in the Hoxton Park Stage 2 Release Area. The Stage 2 Release Area was divided into six precincts. The land is primarily in precinct 3 ("the Aerodrome Precinct"), although a small portion is located in precinct 1 ("Cabramatta Creek"). Precincts 1, 2, 4 and 5 were released between April 1991 and July 1992. However, in 1993 the WSO proposal was announced and accordingly further releases were delayed until its precise location was known. 14 In June 2002 the applicants made an application to Council to rezone their 1(e) land for residential purposes. As part of that application the applicants formulated a proposal whereby the land would be developed from the western boundary towards the east and compensatory drainage would be located on portions of the existing 2(a) land adjoining Hinchinbrook Creek. The rezoning application came before the Council on 23 September 2002 with a report recommending that the Council prepare a draft LEP. The Council on that occasion confirmed the application was consistent with the Council's Structure Plan and resolved to defer the preparation of a draft LEP pending identification of additional land in the vicinity of Government Road which might be suitable for rezoning. The applicants' proposed development 15 The applicants' claim in these proceedings is based upon a hypothetical proposed development of the land which involves developing the land in stages. The proposal comprises two stages, and involves a hypothetical purchaser filling and developing the 2(a) land for medium density residential purposes immediately ("Stage 1") and subsequently developing the 1(e) land for residential purposes following the rezoning of that land ("Stage 2"). A roadway would be constructed to 1:100 flood level during Stage 1, which would then provide flood free access for the development of Stage 2. The fill used in Stage 1 would be taken from the 1(e) land thereby providing appropriate compensatory floodplain storage on the 1(e) land. Subsequently, during Stage 2, a drainage swale would need to be constructed on the 1(e) portion of the land. 16 The applicants said that, although this proposal would necessitate development adjacent to Hinchinbrook Creek which might otherwise be less desirable, the proposal was consistent with the zoning of the land. Flooding 17 There are a number of studies and documents relevant to the Council's policy with respect to filling and subdivision of flood-prone land. The first is the Floodplain Management Plan which was adopted by the Council in 1987 ("the Floodplain Management Plan"). Subsequently in 1993, Kinhill Engineers Pty Ltd prepared a Cabramatta Creek Catchment Management Plan for the Water Board ("the Kinhill Study"). In 1999 Bewsher Consulting prepared a draft Cabramatta Creek Floodplain Management Study and Plan for the Council ("the Bewsher Study"). The final report was prepared in 2004 and adopted by the Council. Although the final report was adopted after the date of acquisition, it is agreed by the flooding experts that this document represented best practice at the date of acquisition. 18 Dr Andrew Bewsher of Bewsher Consulting, hydraulic expert, assessed the flooding affectation of the land for the applicant. He was familiar with the Council's flood plans requirements, having prepared approximately 31 reports for that Council and also having prepared the Bewsher Study for the Council. He continues to act as one of the Council's consultants with respect to flooding issues. Mr Bewsher was also retained by the respondent to assess flooding impact as part of the environmental impact statement for the WSO. 19 Mr Bewsher described the Council policy which he said now permits residential development on flood plain areas provided that adequate flood mitigation measures are undertaken, which include the creation of stormwater drains and compensatory flood storage. 20 Diagrams contained in Mr Bewsher's reports show the entirety of lot 17 and most of lots 18 and 19 are affected by the 1:100 year flood. Mr Bewsher believed that approximately 65% of the parent parcel was subject to the 1:100 year flood event, and that the eastern 40% of the land would be classified as high hazard in such an event. Mr Bewsher acknowledged that the 2(a) land fell within the high hazard flood risk classification and might also be within a floodway. He acknowledged that development of a high flood risk zone would be more difficult and expensive than land with a medium or low risk classification. 21 Nonetheless, Mr Bewsher was satisfied that the 2(a) portion of the subject land could be filled and that such filling would have no impact on the upstream or downstream land. He compared the land to the adjoining Brookside development, which he considered was comparably affected before its development. Prior to development, areas of both high and low flood hazard could be identified on the Brookside land, similar to the applicants' land. As part of the development of Brookside, extensive fill was applied (exceeding 3 m in depth in some areas) and floodwaters were diverted into drains on either side of the subdivision. The Council's flood map showed that two of the stages in the Brookside subdivision would be surrounded by floodwaters in a 1:100 year flood, except for one point at which road access was provided at the 1:100 year level. 22 Mr Bewsher said he would have advised a potential purchaser that a significant portion of the site was flood-prone and ground levels would need to be reshaped and compensatory flood mitigation works installed before it could be developed. He prepared a plan showing how the material excavated in the central and western areas of the site could be used for filling and the excavated area used to form a landscaped feature. Mr Bewsher expressed the opinion that it was certain that Council would approve an application for the development of the 2(a) land. 23 Mr Ian Rowbottom provided evidence relating to flooding for the respondent. Mr Rowbottom considered that approximately 82% of the parent parcel would be inundated during a 1:100 year flood. He said that during such a flood, the maximum depth of flooding would occur on lot 17 and the northern part of lot 18, and would be in excess of 1 m deep at its peak. Mr Rowbottom also considered that approximately 58% of the land would be inundated during a 1:20 year flood, and virtually all of lot 17 and the northern half of lot 18 would be affected. 24 Mr Rowbottom considered that the filling of the 2(a) land would create an island during a 1:100 year flood. Although in the applicant's proposal the 2(a) land would be served by a roadway above the 1:100 year flood level, Mr Rowbottom considered this access to be uncertain. If a blockage or partial blockage occurred and the road were flooded, there would be no other means of escape. Mr Rowbottom did not believe that the Council would support the proposal to develop the land for residential purposes in these circumstances. 25 Mr Rowbottom referred to the New South Wales Government Flood Plain Development Manual ("the Manual") which was updated in 2001. The Manual contains guidelines for development of land so affected and refers to the requirement that planning decisions must take account of the impact of flooding on development. Six categories of flood liable land were identified, being low hazard to high hazard, the latter being a floodway. Floodways were defined as "those areas where a significant volume of water flows during floods", involving higher deeper or higher velocity flows. 26 The Manual refers to the need for developers to demonstrate to the consent authority that permanent, maintenance free measures were incorporated in order to ensure the timely, orderly and safe evacuation of people from the area should a flood occur. It also warns against the creation of islands. 27 Mr Rowbottom said that a 2(a) zoning did not necessarily mean that the land would be suitable for residential development. He referred to the Bewsher study which suggested that in a floodway high hazard area, subdivision and filling for residential purposes would be an unsuitable as a land use. 28 Mr Rowbottom testified that the land could be developed from west to east with appropriate filling (subject to its zoning). Such development would be consistent with the proposal contained in the applicants' rezoning application made to Council on 6 June 2002. Mr Rowbottom said that such proposal gives recognition to the fact that the land in the vicinity of Hinchinbrook Creek was unsuitable for development. 29 Mr Rowbottom said that the fact that Brookside had been approved would not provide any guarantee to a potential purchaser that the applicants' land could be similarly developed. 30 In response to these claims, Mr Bewsher said that it was incorrect to describe the development as an "island" development as it had flood-free access during the 1:100 year flood. He also stated that he had designed the culverts for the applicants' proposal to be twice the required size, to minimise any risk of blockage. He contended that the remaining risk was so negligible that it could be disregarded. 31 Mr Marecic, a Senior Strategic Planner with the Council, gave evidence in these proceedings. In a letter written by him to the respondent's solicitors he stated: It is unlikely the Council's Floodplain Management Section would have recommended approval of the proposal outlined in Figures 4 and 5 of the Statement of Evidence prepared by Drew Bewsher. … In consideration of the above, it seems extremely unlikely that Council officers could have supported the proposed development of the site for residential purposes. 32 The applicants relied upon the evidence of Mr Gerard Turrisi, a former Group Manager of Community and Environmental Planning of the Council provided evidence, formerly Mr Marecic's superior at the Council. Relevantly Mr Turrisi stated: … I did not foresee that from a planning perspective, filling of the land would be a problem, or would be inconsistent with filling that had been approved and had taken place over similarly effected nearby land, namely 'Brookside'. 33 A further dispute exists between the parties with respect to the effect of the WSO on flood levels on the land. Mr Rowbottom contends that in the "after" situation the WSO embankment would prevent flood waters moving from the north of the WSO onto the land and that consequently flooding levels would be reduced. His statement is predicated upon the WSO being constructed with no drains through the embankment adjoining the land, or only "one-way" drains permitting water to drain from the south to the north. Accordingly Mr Rowbottom said the flood mitigation works required post-acquisition would be significantly less than those required before acquisition. 34 Mr Bewsher believed that the floodwaters on the land after the construction of the WSO would be equivalent to pre-WSO levels. He had been intimately involved with the flooding impacts of the WSO, having prepared the flooding assessment for the environmental impact statement for the WSO ("the EIS"). Working Paper No 10, which was written by Mr Bewsher and attached to EIS, indicated that the design of the WSO was based upon the principle that existing flooding levels would be maintained. Although drains were not shown in the plans for the WSO contained in the EIS, Mr Bewsher said that this was because the EIS contained only concept plans. He said it was clear from statements contained in the EIS relating to flooding that further drains would be required, and in particular that this was clearly anticipated by the statement that existing flood levels were to undergo no significant change. Based upon that knowledge Mr Bewsher had no doubt that the respondent's submission was untenable. 35 The respondent challenged Mr Bewsher's credit in relation to his evidence upon flooding and submits that his opinions are contrary to the Council's policies, including those expressed in his own study. Ecology 36 Mr Dominic Fanning and Dr Anne Marie Clements, ecologists, provided evidence for the applicants' and the respondent respectively. Their joint report establishes that the subject land contained a band of Sydney Coastal River-Flat Forest ("SCRFF"), an endangered ecological community, along and adjoining Hinchinbrook Creek. A second band of degraded woodland existed in part of the eastern half of the land, along and adjacent to a drainage depression. The ESL on the land was identified as Alluvial Woodland and Shale Plain Woodland by National Parks and Wildlife Service ("NPWS") in 2002. Only a small remnant of ESL remains on the residue land because most of the ESL was resumed for the WSO. 37 The aerial photograph attached to Mr Fanning's report demonstrates that there was substantial vegetation on the site adjacent to Hinchinbrook Creek and running through the centre of the site along the natural drainage depression. Mr Fanning's statement acknowledges that the vegetation along Hinchinbrook Creek is an SCRFF community which is of conservation significance. In his report he observed: This band of vegetation would have imposed specific constraints on development activities along this portion of the Maggiotto land. 38 Hinchinbrook Creek is classified as a river for the purposes of the Rivers and Foreshore Improvement Act 1948. Accordingly any development requires a riparian setback of, for a major watercourse, 40 m from the top bank and for a minor watercourse, 20 m from the top of the bank. Each of the experts acknowledged that a permit issued under Pt 3A of the Rivers and Foreshore Improvement Act 1948 would be required for development in the vicinity of the banks of Hinchinbrook Creek. The principal area of difference between Mr Fanning and Dr Clements was the width of the riparian zone which would be required. Mr Fanning was satisfied that a 20 m setback would be adequate, as required for a minor watercourse. Dr Clements believed that the creek would be regarded as a major watercourse for which a 40 m setback would be required. 39 Mr Fanning said that the SCRFF along Hinchinbrook Creek was variable in width, from a minimum 0 m (ie no vegetation adjoining the creek) to 40 m in places. However, within the land at the date of acquisition, the riparian vegetation was generally less than 20 m in width. Accordingly he considered a 20 m setback would satisfy both ecological and statutory requirements of the RFI Act. 40 Dr Clements said that the riparian vegetation adjoining Hinchinbrook Creek varied between 20 m and 50 m in width (including both sides). Dr Clements referred to the Brookside development, where she considered that there was an effective riparian zone of 60 m, made up of a 20 m riparian zone "proper" plus the adjoining 40 m wide vegetated flood runner. Mr Fanning did not agree that the flood runner could be understood as part of the riparian zone, and maintained that the Brookside development had only a 20 m riparian zone. 41 The experts also disagreed upon the value of the ESL adjacent to the drainage depression. Dr Clements considered that the land surrounding the drainage line across the subject land was probably SCRFF, which was typical of rivers, creeks and alluvial soils. Dr Clements believed that 2.91 ha of vegetation in the centre north of the land would need to be conserved, in accordance with Development Control Plan No 8 (Natural Assets). However, Dr Clements did not inspect the site until after the construction of the WSO had taken place at which time most of the vegetation on this part of the site had been removed. 42 Mr Fanning had been engaged by the respondent to asses the ecological values of the land as part of the WSO proposal. He inspected the parent parcel twice before the removal of the vegetation, and considered that the vegetation in the area of the drainage depression was highly disturbed and cleared, and would not be of high conservation value. Mr Fanning did not consider it would have constituted a constraint to development. 43 Mr Fanning added that the areas of ESL were included in the LEP on the basis of aerial photos and did not necessarily represent areas of high conservation value. He considered that a physical inspection was required to determine the conservation value of land marked as ESL. 44 Mr Fanning said he would advise a prudent purchaser that development could be undertaken on the land subject to a 20 m riparian zone beside Hinchinbrook Creek, preservation of vegetation in the south-east corner of the land and native revegetation of any flood runner constructed on the 1(e) land. Mr Fanning did not regard cl 16(1) of the LEP (requiring consideration of substantial retention of native vegetation) to operate as a prohibition on development. Airport Noise Constraint 45 In respect of town planning, Mr Gary Rhodes gave evidence for the applicants and Mr Harvey Sanders gave evidence for the respondent. In their joint report, Mr Rhodes and Mr Sanders agreed that development of the 1(e) land for residential purposes was not possible under the 1(e) zoning. Its future rezoning for residential purposes was dependent upon either the closure of the airport, the revision of the ANEF contours, or the amendment of cl 18 of the LEP. 46 The ANEF contours were mapped in 1985 and adopted in 1990. Mr Rhodes said that noise assessments conducted before the acquisition date suggested that the 25-30 ANEF contour on the land was too high. He suggested the contours were outdated and believed that if a review of the contours were conducted, the contours applying to the 1(e) land would be revised to the 20-25 level. He referred to the report by Integrated Acoustics, which was prepared in support of the rezoning application made by Maggiotto Building Pty Ltd on 6 June 2002. That report concluded that compliance with AS2021 could be achieved on the land. 47 In response to this suggestion, Mr Sanders said that at the date of acquisition, there was no obligation for the ANEF contours to be reviewed, nor a mechanism for an external party to request review by the Civil Aviation Authority. Furthermore, Mr Sanders said that the noise testing carried out by the applicants occurred only over a short period, and were not sufficient to demonstrate that the ANEF contours needed revision. 48 Mr Rhodes also said that at the date of acquisition there was a widely held belief that the airport would close in the near future. In support of this statement Mr Rhodes referred to numerous press clippings relating to the airport. Many of the comments in the press clippings resulted from safety concerns and confirmed the Council's desire to have the airport closed. On 15 March 2000 the Mayor reportedly called for the closure of the airport. A newspaper clipping dated 2 July 2001 referred to the fact that Council wished to utilise land restricted by the ANEF contours for housing. Other press clippings related to calls for the closure of the airport by a member of Federal Parliament. 49 Mr Rhodes also referred to a media release issued by the Federal Minister on 29 March 2001 which announced the sale of the airport. He further referred to a position statement prepared by the Council on 12 June 2001 which reaffirmed the Council's policy that the airport should close. Mr Rhodes stated: In my view the degree of belief as to closure would lead a prudent purchaser to make an informed decision as to the likely future development potential of the 1(e) land being residential uses. 50 The respondent raised several documents in reply to the evidence of Mr Rhodes on this point. It noted that in answer to a Question on Notice with respect to the airport raised in Parliament on 17 September 2001 the Federal Minister confirmed the airport would continue to operate after its sale. 51 The respondent also referred to a letter from Mr Ellis, General Manager of the airport, dated 12 February 2002, in which he confirmed the details of aircraft noise exposure should be included in the plans for future development. Mr Ellis provided a statement for the respondent in these proceedings, in which he states that as at the date of acquisition he had no knowledge of any proposal to close the airport. He noted that the airport was operating on a 99 year lease, 95 years of which remained. 52 The respondent also referred to a letter dated 15 March 1989 from the Federal Airports Corporation to the Town Clerk of the Council which provided the Corporation's opinion that the airport would remain operational for at least 20-30 years, and a letter of 14 March 1989 from the President of Bankstown Chamber of Commerce indicating that the airport would continue to play an important role "for at least another decade". 53 The respondent also referred to a letter of 15 October 1993 from the Federal Airports Corporation to the Council. Such letter suggests that the Council did not understand the significance of the airport and reiterated that the Corporation supported the development in the vicinity of the airport provided "it is undertaken in such a way as to provide a community which is aware of and accepts the airport's existence". 54 Mr Sanders denied that there was any information in the public domain at the date of acquisition which indicated that the airport would close, or that the ANEF contours would alter, or were out of date. Mr Sanders said that although the Council had a policy to close the airport, this was not significant since the airport was the responsibility of the Federal Government. He noted that the Council had already had such a policy for many years at the date of acquisition, but had not been successful in bringing about the closure of the airport. Mr Sanders said that any belief that the airport might close was pure speculation and a prudent purchaser would not have taken such speculation into account. 55 Mr Sanders also noted in his report that whilst the 25-30 ANEF contour existed, there was no potential for rezoning because of Directive G16 issued by the Minister under s 117 of the EP&A Act. Although it does not appear to have been directly addressed by either expert, the applicants subsequently submitted that G16 was only a directive and permitted a rezoning of the land if the Council could satisfy the Director that the land should be excluded from the operation of the directive. 56 On the basis of the above, the applicants submitted that a prudent purchaser would have considered that the 1(e) land would be rezoned within 5 years. The respondent submitted that there was no evidence which would reasonably suggest that the airport would close, or that the noise contours would be reviewed. With respect to the possibility of the Council seeking an exclusion from the G16 directive and amending the LEP to allow for residential development on the 1(e) land, the respondent said that the lengthy process involved was only at its initial stages at the date of acquisition and there was no guarantee that it would ultimately succeed. Town Planning 57 The town planning experts also addressed the applicants' proposal for development of the land. 58 Mr Rhodes said that since the early 1990s the Council was actively seeking rezoning of precinct 3 within which the 1(e) portion of the applicants' land was located. He considered that the land had been identified for future urban purposes because of the implementation of the SROP which created much of the existing zoning structures for the south-west sector of Sydney. Under the SROP the site and its surrounding areas were identified as "urban proposed". 59 Mr Rhodes said that there was a severe shortage of englobo land for residential development in the Liverpool area, as uncertainty of the exact location of the WSO in the area had delayed the release of land in the area. Between 1991 and 1992 four residential areas in Hoxton Park stage 2 were released at an average rate of one stage every quarter. Following the announcement of the WSO no further releases occurred until June 2004. Mr Rhodes estimated that by 1997-98 precinct 1 was 82% developed and said that of the six precincts identified in 1987 only precinct 3 and precinct 6 (Edmondson Park) were yet to be zoned for urban development. 60 Mr Rhodes acknowledged that flooding and ESL affected the land but, based upon the advice of the applicants' experts, considered that the land could be developed with approved filling and compensatory works. 61 Mr Sanders considered that Stage 1 of the applicants' proposal would not be approved as it would create an isolated pocket of residential land surrounded by flood liable land. Mr Sanders believed that the 2(a) land had very limited development potential because of the severity of physical constraints, principally flooding and ESL. If residential development were permissible at all on the 2(a) land, Mr Sanders considered that development involving single dwellings on conventional allotments would be more appropriate than the medium density development proposed by the applicant. On this basis, the respondent submitted that the applicants' proposal was not viable. Findings 62 The Court acknowledges that the applicants' proposal does not accord with that contained in the rezoning application which they submitted to the Council in June 2002. That application involved development progressively from the west. Although the Court accepts that such proposal may be more desirable from a flooding and ecological perspective, the fact remains that, at the date of acquisition, the zoning of the land would have prevented a development application for such proposal being approved. Accordingly, the Court accepts that the applicants' proposal represents an acceptable proposal for development of the land as at the date of acquisition. 63 The Court also notes that it is not required to determine whether such a development would in fact have been approved, but rather what expectation a prudent purchaser might have of developing the land to the highest and best use. (a) Flooding 64 Mr Bewsher has had an intimate knowledge of the flooding issues in the locality, including the land, because of his involvement with the preparation of the EIS for the WSO. His long association with the Council and his flood studies of the area suggest to the Court that he is able to draw upon a deeper knowledge of local flooding and the Council's flood-prone land development policy than Mr Rowbottom. 65 Mr Bewsher acknowledged that substantial earthworks would be required before development of the 2(a) land could take place, in order to raise the level of the land above the 1:100 year flood. He did not believe that the flooding constraints on the land would prevent its development. In this respect Mr Bewsher's evidence is consistent with that of Mr Turrisi. 66 The respondent pointed to the planning matrix attached to the draft Bewsher Study (dated 1999) which was available at the date of acquisition. It submits that the matrix clearly states that land in a floodway high hazard area is unsuitable for subdivision and filling and residential development. 67 The Court accepts that the planning matrix contained in the draft Bewsher Study appears to suggests that land would not be suitable for filling. However, other factors must be considered in determining whether this was the guiding policy. Firstly, the Court notes that the planning matrix is in fact entitled "Proposed Planning Matrix" for Cabramatta Creek. In the equivalent planning matrix contained in the final report, which was adopted by the Council in 2004, filling is not listed as an unsuitable land use. Although this document was adopted by the Council subsequent to acquisition, the flooding experts were in agreement that the 2004 document represented best practice for flooding management at the date of acquisition. Accordingly, the Court considers it can take this matter into account. 68 Further, the Court notes that the Brookside development would also have been at least partially prevented if the planning matrix in the draft Bewsher Study were strictly complied with. To the extent that the planning matrix suggests filling of high hazard floodway could never take place, the Council clearly did not act in accordance with it. Mr Bewsher's contention, that the Council would approve development in high hazard floodway areas provided adequate flood mitigation measures were undertaken seems to be sensible and the Court accepts that it is what a prudent purchaser would have expected at the date of acquisition. 69 The next issue with respect to flooding is whether the applicants' proposal contained adequate flood mitigation measures. Mr Rowbottom was of the opinion that it did not, because it would be a development from which there was only one escape route. That escape route would be across a road built over the floodwaters, and which was therefore liable to flooding if a blockage in the culverts occurred. Mr Rowbottom also said that in the probable maximum flood, there may be no escape route from the development. 70 The Court considers that there was a small risk that the Council would reject the application on these grounds, but that it was significantly more likely that it would accept the proposal. Mr Bewsher's design incorporated culverts which were larger than necessary in order to minimise the risk of blockage. Furthermore, the evidence of Mr Bewsher was that because the probable maximum flood levels were not significantly higher than the 1:100 year flood levels, the risk in the event of such a flood would remain low. Overall, Mr Bewsher considered the flood risk in the applicants' proposal was so negligible that it should be disregarded. The Court accepts that this would almost certainly be the approach which would be taken by the Council. 71 In relation to the flooding of the land after acquisition, the Court accepts the evidence of Mr Bewsher that there would be no significant change in flooding levels after construction of the WSO. Although the plans for the WSO contained in the EIS do not show drainage culverts adjoining the land, because such plans were only concept plans. The Court therefore accepts that they are not necessarily reflective of the final design. Mr Bewsher was adamant that the design concept outlined in the EIS required additional culverts not shown in the concept plans, and pointed to several statements contained in the EIS which indicated that it was intended there be no significant change in flooding levels. In addition, Mr Bewsher pointed out that the compensatory flood storage foreshadowed in the EIS was calculated on the basis that only the volume displaced by the actual roadway itself would need to be relocated, because the floodplain would not be otherwise constricted. 72 Given Mr Bewsher's extensive and intimate involvement with the hydrological assessment for the WSO, the Court accepts his evidence. Accordingly, the Court considers that the land would be similarly affected by flooding after acquisition and construction of the WSO as it was before the acquisition. (b) Airport Noise Constraint 73 In Daandine Pastoral Co Pty Limited v Commissioner of Land Tax (unreported, High Court of Australia, 26 August 1943), quoted in McCathie & Ors v Federal Commission of Taxation (1944) 69 CLR 1 at 16, Williams J observed: Values must be calculated in the light of circumstances which existed on the material date … subsequent events can be taken into account in order to determine the proper weight to attach to such circumstances. 74 In Longworth v Commissioner of Stamp Duties [1953] SR (NSW) 342 Owen J said at 348: A tribunal which is called upon to make such an assessment of value must in each case decide what facts affecting values would have been in the contemplation of the notional buyer and seller at the relevant date, and what, if any, effect on values the existence of those facts would have had on the sum which the one was prepared to give, the other to take. One such relevant fact may be the probability or possibility that an event will later occur, and the existence or non-existence of that contingency may have its effect on values. If so, it is relevant. But the value must surely be ascertained in the light of the facts, including the probabilities, then existing, and without taking notice of subsequent happenings. 75 In Gosford Shire Council v Green (1980) 48 LGRA 201 Mahoney JA (at 210) held that it was the factual circumstances prevailing at the date of acquisition to which consideration must be given since those were the relevant considerations for a notional prudent purchaser. This principle was affirmed in Multari v Roads and Traffic Authority of New South Wales [2004] NSWLEC 649, in which Talbot J stated: I confirm my extempore ruling that the evidence in relation to what occurred after the date of acquisition in relation to the sale and closure of Hoxton Park Airport is not relevant and therefore inadmissible for the above reasons. 76 It is clear from the above authority that as a general rule, evidence of events occurring after the date of acquisition will not be relevant to the consideration of value and will therefore be inadmissible. There is, however, an exception to this rule, which was expressed by the Court of Appeal in Housing Commission of New South Wales v Falconer & Ors [1981] 1 NSWLR 547. In that case the Glass JA referred to a line of authority "in which it has been held that evidence of future events is admissible not technically the hindsight, but to confirm a foresight …" (at 558). 77 In the present case, the applicants have requested the Court to admit evidence relating to events occurring after the date of acquisition, most particularly the subsequent closure of the airport, on the basis that such events confirmed the foresight of the market that the airport would close. The applicants rely upon newspaper articles, announcement of the sale of the airport, and the policy of the Council seeking closure of the airport as evidence of a foresight that the airport would close. 78 The Court does not consider that this evidence falls into the category described by Glass JA in Falconer. None of these items of evidence points directly to the fact that the airport would close, or even suggests that it was likely. Unlike the pre-acquisition evidence in Falconer, the evidence in the present case does not point to some trend which a prudent purchaser might expect would continue after acquisition. It relates simply to conjecture about the future closure of the airport. The subsequent closure of the airport does not raise this evidence to the level of "foresight". 79 Further, the Court notes the observations of Mahoney JA in Falconer at 576, where his Honour observed: … where the compensation which is to be given is measured by the ordinary market price of the property taken, the principle on which that market price is to be determined prevents (or at least restricts) reference to subsequent events. That market price is the price acceptable to a willing but not anxious vendor and purchaser on the relevant date. Such persons are to be taken to know what an appropriately informed person would know on that date. That being the principle, it follows that such persons (and the court, as determining what they would have done) cannot be seen as knowing more. The price which such persons would accept at that date will be affected by the uncertainties at that date, as to, for example, the future demand for land at the relevant time, future decisions of zoning authorities, and the like. Those uncertainties and the effect of them on the postulated vendor and purchaser help to determine what price will be found acceptable. In that regard, therefore, evidence of what subsequently occurred in relation to such matters may not ordinarily be referred to. 80 For these reasons the Court considers that the evidence relied upon by the applicant of events subsequent to the date of acquisition is inadmissible in these proceedings. 81 Nonetheless, the Court accepts that at the date of acquisition there was speculation in the market that the airport might close, although a prudent purchaser making enquiries of the Council and the airport operator would not have been given any information which indicated that the airport would close. A prospective purchaser at the date of acquisition could not have confidently assumed that the airport would close in the near future. 82 There was also information at the date of acquisition which suggested that the ANEF contours may have been subject to alteration, had they been reviewed. The applicants had collected initial acoustic data in support of their rezoning application which suggested that the 20-25 ANEF contour might be more appropriate for the 1(e) land. The Court accepts that there was some prospect that the contours would be reviewed and altered in accordance with the applicant's wishes, although since there was no formal mechanism to request review, there were some uncertainties in the process. 83 In addition the Court accepts that based upon the acoustic information collected by the applicants the Council could have sought exemption from Directive G16 and rezoned the land for residential development without the ANEF contours being reviewed. The Court considers that at the date of acquisition a prudent purchaser could have been reasonably confident that the Council would have supported such an application, based upon its in-principle support of the applicants' rezoning application and its longstanding campaign for closure of the airport and release for residential development of land affected by airport noise. The Court considers that there was a real prospect of the 1(e) land being rezoned on this basis, although there was also some risk and the possibility of delay in pursuing such a rezoning in this way. 84 When these three possibilities for rezoning of the 1(e) land are taken together, the Court considers that at the date of acquisition, a prudent purchaser would have considered that there was a real prospect that the land could have been rezoned for residential development within five years, albeit with a substantial risk that a rezoning would not eventuate or would be delayed beyond five years. (c) Ecology 85 The Court is satisfied that a riparian zone would need to be established along the banks of Hinchinbrook Creek to preserve existing native vegetation. The Court is satisfied that a prudent purchaser would have believed a riparian zone of 20 m would have been sufficient, but that there was some risk that a greater riparian zone may have been required. Such possibility would be a risk which a prudent purchaser would take into consideration. 86 With regard to the other areas of native vegetation, the Court is satisfied that a prudent purchaser would not have considered that ESL would have forced any restriction on development. The Court accepts Mr Fanning's assessment, on the basis that he visited the site on two occasions prior to construction began on the WSO and made observations of the vegetation. In contrast, Dr Clements did not visit the site until after the vegetation had been cleared for construction of the WSO. Much of the respondent's claims concerning the restrictions upon development were based upon the inclusion of ESL in the LEP, which in turn was predicated upon aerial photographs. The Court accepts that a more detailed physical assessment is required to determine the conservation value of particular portions of land designated as environmentally significant, and that Mr Fanning's assessment is accordingly more accurate. (d) Town Planning 87 In view of the findings made above, the Court is satisfied that the 2(a) land could have been developed. Although the applicants' proposal might not have been the best design from a flooding or ecological perspective, given the zoning constraints it was the only feasible design at the date of acquisition. As found above, the Court accepts that the flooding issues could have been addressed to the Council's satisfaction. 88 In respect of the 1(e) land, as found above, there existed at the date of acquisition a real prospect that the land would be rezoned for residential purposes within five years, although substantial risks were attendant upon such possibility. The Court does not consider that in these circumstances, a prospective purchaser would regard the land as having a value attributable to a market garden, but rather as land available for potential residential development. 89 The Court is also satisfied that medium density development would have been suitable residential development upon the land. It is clear from the evidence that medium density development has been frequently undertaken in the vicinity of the land. The Court does not consider that there is any compelling reason to believe that the Council would not consider it to be acceptable upon the 2(a) land. Valuation 90 In relation to valuation, Mr Lopco Neskovski gave evidence for the applicants and Mr Ken Wood gave evidence for the respondent. Each of the valuers initially valued the land on the basis of the advice in relation to flooding, ecology and town planning given by the experts retained by their respective clients. Specifically, Mr Neskovski's initial valuation was made on the basis that the 2(a) land could be developed immediately and that the 1(e) land would be rezoned within five years. Mr Wood's initial valuation was made on the basis that the 2(a) land could not be developed because of flooding and ecological constraints, and that there was no prospect of the 1(e) land being rezoned in the near future. 91 During the course of the hearing, both valuers provided additional valuations based upon different factual scenarios, which postulated different factual findings the Court might make with respect to the flooding, ecological and town planning evidence. The scenarios were as follows:

No development potential for any of the land in the foreseeable future.
The 2(a) land has immediate development potential, but there is no development potential for the 1(e) land in the foreseeable future.
The 2(a) land has immediate development potential and the 1(e) land is likely to be rezoned for residential purposes within 5 years.
The 2(a) land has no development potential, but the 1(e) land is likely to be rezoned for residential purposes within 5 years.
The 1(e) land is likely to be rezoned for residential purposes within 5 years, after which time development over the entire parcel could occur in accordance with the evidence of Mr Rowbottom. 92 The Court considers that none of the scenarios is entirely consistent with the Court's findings in relation to flooding, ecology, airport noise constraints and town planning. However, the Court considers that Scenario 3 is the closest of these scenarios, although it will require some modification to accord with the Court's findings. Scenario 3 reflects Mr Neskovski's original valuation, although Mr Wood has made a secondary valuation of the land on the basis of this scenario. The Court will therefore determine the appropriate valuation on the basis of the valuers' competing valuations in Scenario 3. 93 Mr Neskovski undertook a before and after valuation in order to determine the value of the land, and valued the developable land on an englobo basis, calculating the value of the 2(a), 5(a) and 6(a) land collectively. 94 In the before situation, Mr Neskovksi valued the 2(a), 5(a) and 6(a) land at a rate of $190/m2. Mr Neskovski agreed that filling and service costs would be approximately $26/m2 and that replanting would cost $3/m2, but considered that the rate of $190/m2 already included a discount for these costs, because the comparable sales would also have involved such costs. 95 In respect of the 1(e) land, Mr Neskovski arrived at a value of $140/m2, also including the discount for filling, service and replanting costs. 96 Mr Neskovski then made a further deduction to each rate for risk, based upon risks in the delay and terms of a development approval, the precise area of land which might be developable, the affectation by ANEF contours, unforeseen delays and possible inaccuracy of information. For these constraints he deducted 25% from each of the above rates, to arrive at a rate of $135/m2 for the 2(a), 5(a) and 6(a) land and $105/m2 for the 1(e) land. These figures derived a value of $7,100,000 for the entirety of the parent parcel before acquisition. 97 In the after situation, there were a number of factors which Mr Neskovski considered would reduce the value of the residue land. These included the irregular shape of the residue land, the elimination of road frontage to the residue 2(a) land and the severance of the best portion of the 2(a) land. Mr Neskovksi also noted that the residue land would be affected by noise and overshadowing from the new motorway. Mr Neskovski believed these factors would seriously reduce the development potential of the 2(a) land in the after situation, to the point where it could no longer be developed except in conjunction with the 1(e) land. As a result, a purchaser would also lose the ability to generate immediate cashflow from developing the 2(a) portion while awaiting rezoning of the 1(e) land. 98 For these reasons, Mr Neskovski considered that in the after situation, the entire parent parcel should be valued at the rate for the 1(e) land. Mr Neskovski assessed the value of the 1(e) land at $70/m2. Accordingly, he derived an overall value in the after situation of $2,550,000. Deducting this figure from the before valuation of $7,100,000, Mr Neskovski arrived at figure of $4,550,000, being the value of the acquired land. 99 In arriving at his values for englobo residential land, Mr Neskovski relied primarily upon two sales of residential 2(a) land in the Liverpool area. Mr Neskovski claimed that these sales were of englobo land which was similarly constrained to the applicants' land. Adjusted for time, the comparable sales relied upon by Mr Neskovski show the following price per m2. Sale 1 (the Ash Road sale) $201/sq m Sale 2(a) (the Bernera Rd sale) $197/m2 Sale 2(b) (adjoining land) $307/m2

Maggiotto v Roads and Traffic Authority

At a glance

Court

Decision date

Before

Source

Judgment (20 paragraphs)

Parties

Cases Cited (3)

Cited By (6)