Maidment v Roads and Traffic Authority of NSW

Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575; Commissioner of Succession Duties (SA) v Executor Trustee and Agency Company of South Australia Limited (1947) 74 CLR 358; Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547; HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640; Kenny and Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413; Liverpool City Council v Commonwealth of Australia (1993) 46 FCR 67; Longworth v Commissioner of Stamp Duties [1953] SR (NSW) 342; Multari v Roads and Traffic Authority of NSW [2004] NSWLEC 649; CASES CITED: Port Macquarie West Bowling Club Ltd v The Minister [1972] 2 NSWLR 63; Redeam Pty Ltd v South Australian Land Commission (1977) 17 SASR 508; Roads and Traffic Authority of NSW v Mosca (2006) 146 LGERA 335; Roulston v Roads and Traffic Authority of NSW [2005] NSWLEC 409; Royal Sydney Golf Club v Federal Commissioner of Taxation (1957) 97 CLR 379; Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243; Spencer v The Commonwealth (1907) 5 CLR 418; Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd (2005) 141 LGERA 243; Wattle Park Pty Ltd v Commissioner of Highways (1973) 6 SASR 69; Woodbury v Wyong Shire Council [2006] NSWLEC 48

APPLICANT: Mr N Hemmings QC SOLICITORS Marsdens LEGAL REPRESENTATIVES: RESPONDENT: Mr P Tomasetti, barrister SOLICITORS Corrs Chambers Westgarth

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

KELVIN DAVID MAIDMENT v ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES

JUDGMENT HIS HONOUR: 1 On 11 June 2004 the respondent, the Roads and Traffic Authority of New South Wales, compulsorily acquired from the applicant, Kelvin David Maidment, the whole of the land known as Lot 11 in DP 844963 located at 32 Burns Road, Kellyville in the local government area of Baulkham Hills Shire Council.

2 This is a claim by the applicant under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Act) by way of objection against the amount of compensation offered by the respondent to the applicant in respect of the compulsory acquisition. The Act relevantly provides: 54 Entitlement to just compensation (1) 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. …

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, (e) solatium… 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…

3 The statutory offer to which the applicant objected was $4,660,490 comprising s 55(a) market value of $4,400,000, s 55(d) disturbance of $250,490 and s 55(e) solatium of $10,000.

4 In final submissions, the compensation for which the parties contended was as follows: Applicant Respondent $ $ (a) Market Value 6,747,000, or in the range: 7,214,100, or 2,500,000 8,018,550 (b) Disturbance: · Legal costs 5,000 5,000 · Valuation fees 34,257 8,750 (c) Solatium 19,635 19,635

The Acquired Land 5 Located on the south-east corner of the major intersection of Burns Road and Old Windsor Road, which provides access to Blacktown and Baulkham Hills, the acquired land is approximately 36 kilometres north-west of the Sydney Central Business District by road. It has an area of 17,300 square metres. It is generally rectangular in shape. The northerly frontage to Burns Road is 41.55 metres. The rear boundary of the acquired land is slightly wider, at 85.6 metres. The depth is 240.9 metres on the eastern boundary and 221 metres on the western boundary. The land slopes gently towards the rear boundary and, at the acquisition date, was occupied by a two storey brick veneer and tile residence with a storage shed and landscaping. Electricity, water and telephone services are connected, but not sewerage.

Zoning 6 At the acquisition date the land was zoned Rural 1(a) pursuant to the Baulkham Hills Local Environmental Plan 1991. Subdivision is permitted in this zone with a minimum allotment size of 40 hectares.

Purpose of the Acquisition 7 The gazetted compulsory acquisition notice, dated 11 June 2004, stated that the acquisition was "for the purposes of the Roads Act 1993". The evidence established more specifically that the acquisition was for the purpose of the construction of a bus only transitway linking Parramatta and Rouse Hill. The transitway forms part of the North-West Transit Way, a joint initiative of the Department of Planning (formerly Transport NSW) and the respondent. As the construction of the bus transitway constituted the public purpose for which the land was acquired, it must be ignored for the purposes of assessing the market value of the land: s 56(1) of the Act.

Balmoral Road Release Area 8 The acquired land is within an area known as the Balmoral Road Release Area (BRRA), comprising 410 hectares between Old Windsor Road and Windsor Road. It contains a mix of dwellings on small rural holdings (around 0.5 hectares) and other rural uses such as market gardening and grazing. Norwest Business Park is to the south and Castle Hill Town Centre is to the east. It is surrounded by recently developed and developing residential areas in the suburbs of Kellyville, Baulkham Hills, Glenwood, and Stanhope Gardens.

9 The BRRA has received widespread media attention since about 2001 and is referred to anecdotally as the "hole in the doughnut". The metaphor suggests that all of the once rural lands surrounding the BRRA have been developed for residential housing and that the subject precinct is the missing piece in this logical rezoning process. The town centre, or transit centre, is referred to anecdotally as "the hole in the hole in the doughnut".

10 In 1998 the State Government identified the BRRA for future urban development under its Urban Development Program to enable higher density development to occur. An additional 10,000 residences were being planned. As at November 2002 there were approximately 230 landowners in the BRRA.

Proposed North West Rail Link and BRRA Planning 11 The acquired land is very close to the location of a proposed train station on the yet to be constructed North West Rail Link (NWRL), which is unrelated to the bus transitway. As at the acquisition date, no commitment had been made by the State Government to the funding of construction of the NWRL.

12 In 1998 the State Government released its blueprint "Action for Transport 2010: An Integrated Transport Plan for Sydney" which identified the extension of the NWRL to Castle Hill by 2010 and to Rouse Hill by 2020. The document stated that one of the targets set for new greenfield sites was a minimum of 15 dwellings per hectare.

13 In 2000 the Department of Urban Affairs and Planning published a document which indicated a growth potential of approximately 4000 lots within the next five years in the BRRA.

14 In 2001 the Minister for Planning put out a media release "New Land to House Sydney Families" accompanied by a map entitled "Major Growth Areas in Western Sydney", which identified the BRRA with a potential for 4000 lots.

15 In March 2002 the NSW Government published the North West Rail Link Overview Report "Connecting Communities", to provide information about the proposed NWRL and encourage community debate and input into the early planning process. It noted that for financial reasons the 2010 timeframe for the NWRL had been deferred and that the focus of the project was currently on the protection of a rail corridor for the NWRL. It stated that "the protection of the corridor represents a major commitment to the Rail Link by the NSW Government". Maps therein provided an indication of the proposed alignment of the North West Rail Link and indicated the proposed location of railway stations at Burns Road, adjacent to its intersection with Old Windsor Road, and at Mungerie Park to the north. The report stated: The Burns Road and Sunnyholt Road intersection with Old Windsor Road is the crossing point of two of the proposed rapid bus transitways being provided in the North West. The proposed site for the Burns Road station coincides with this location and hence maximises the opportunity for interchange between modes and future transit supportive land use Development. Details on the exact location and station facilities are being discussed with Baulkham Hills Shire Council as part of its planning studies for the Balmoral Road release area. There are opportunities for this station to realise land use integration benefits.

Mungerie Park Town Centre would be the terminus station for the North West Rail Link. The proposed Mungerie Park station would be in the heart of the new town centre.

16 The 2002 Overview Report also stated: The overall process for including the proposed Rail Link into local planning involves: · proposing a preferred alignment for the Rail Link for discussion (the subject of this Overview Report); · direct consultation with major stakeholders and the three Councils regarding opportunities for better land use outcomes and urban design as a result of the proposed Rail Link; · consulting with the general public to understand opinions on the details of the preferred alignment; · refining the alignment based on further technical investigations and the outcomes of initial community consultation; and · further consultation with the key Councils and inclusion of necessary amendments of the local planning instruments to include a corridor where necessary. CORRIDOR RESERVATION. The next critical step in the planning process is the reservation of the corridor in local planning instruments. This is essential to ensure that development around the Rail Link and particularly the stations progresses in an orderly fashion while the Rail Link is still a proposal. This would allow an easier and cheaper construction process and less long term impacts on nearby properties. The process of corridor reservation will be based on detailed and on-going liaison with the Councils. The Rail Link corridor would then be reserved where necessary on relevant Local Environmental Plans and other planning instruments of Hornsby, Baulkham Hills and Blacktown Councils.

17 The Overview Report identified the following key benefits of its preferred station location at Burns Road: · outstanding opportunity for a comprehensively designed residential area focused on public transport; · direct interchange with the Mungerie Park - Parramatta and Castle Hill - Blacktown rapid bus transitways; · excellent pedestrian access opportunities to the station; and · likely strong residential patronage catchment.

18 In October 2002, in response to submissions on the Overview Report, the Transport Minister announced further studies to progress the development of the NWRL, focussing on the resolution of the alignment through the BRRA.

19 In November 2002 the North West Transitway Environmental Impact Statement was prepared. It stated that the proposed design enables the bus transitway to support the council's preliminary planning for the Balmoral town centre, and that: Baulkham Hills Shire Council is in the process of developing a Local Environmental Plan (LEP) for the Release Area [ie the BRRA] and planning for the proposed North-West Rail Link is also being integrated with the planning for the Balmoral town centre.

Subdivision and urban development within the Balmoral Road Release Area is likely to commence within the next two years. The intersection of the two T-way links within this Precinct, along with the potential location of a rail station as part of the North West Rail Link, provides an excellent opportunity for development of an activity centre when the Balmoral Road release area is developed. Given the high accessibility of this location with these proposed transport infrastructure improvements, the density of development within this Precinct is likely to be relatively high, with an associated mix of uses providing a focus for activity for the population of surrounding areas.

… The North-West Rail Link is under investigation and is intended to include a station near the intersection of Burns Road and Old Windsor Road.

20 On 23 July 2003 the Department of Infrastructure, Planning and Natural Resources (DIPNR) informed the council by letter of its preferred alignment for the North West Rail corridor. It passed just to the east of the acquired land. The letter said: "Further design and project development work is required to precisely define the corridor. As a design principle, DIPNR will aim to keep the underground section of the NWRL corridor beneath road alignments and commercial properties wherever reasonably possible. This very detailed work should not halt the exhibition of the proposed draft LEP. Confirmation of exact alignments will progress and conclude during the intended exhibition period". As requested by DIPNR, the council considered this preferred alignment and on 29 July 2003 resolved to advise the Minister that it supported the preferred alignment and to confirm its preference that the NWRL be underground or cut and cover.

21 This appears to have provided the impetus for the Baulkham Hills Shire Council to produce a "Draft Structure Plan" for the BRRA by 28 October 2003. It was in the form of a brochure with a coloured map showing various zones. They included zones described as "Transit Centre" with a density of 90 dwellings per hectare, "High Density" with a density of 70 dwellings per hectare, "Medium Density" with a density of 25 dwellings per hectare, "Residential" with a density of 10 dwellings per hectare, and "Employment Area". This information concerning the permitted number of dwellings per hectare in the various zones did not appear on the Draft Structure Plan itself but was ascertainable upon inquiry from the council and was recorded in a council report of 28 October 2003, to which I refer below. The "Transit Centre" appears to have been designed to service a future rail station on the NWRL, to be located close to the intersection of Burns Road and Old Windsor Road, and a bus interchange station. The acquired land was in the Transit Centre zone, which allowed a residential density of 90 dwellings per hectare in apartment buildings of 6 to 8 storeys, a retail/service element, a formal civic space, and a combined major community and indoor recreation facility. A major feature of the Draft Structure Plan was the inclusion of a corridor for the NWRL, which shaved the north-east corner of the acquired land. This differed slightly from the July 2003 DIPNR preferred alignment which did not pass over the acquired land. The Draft Structure Plan, while a significant document and a commonly used planning tool of councils, has no status under the Environmental Planning and Assessment Act 1979 (NSW).

22 On 28 October 2003, the Baulkham Hills Shire Council Forward Planning Co-ordinator presented a report to a meeting of the council on the BRRA Draft Structure Plan. The report stated that in July 2003, DIPNR "announced its preferred alignment for the North West Rail Corridor and the urban release of the BRRA can now proceed". The report stated that the structure plan had been developed on the basis of several major objectives for the BRRA, one of which was to achieve an overall density of 15 dwellings per residential hectare, which was required in order to meet State Government objectives.

23 In relation to the Transit Centre, the 28 October 2003 report stated that it had an area of 15.43 hectares; the likely number of dwellings per hectare would be 90; the likely total dwellings would be 1388, with an occupancy rate of 1.5; and that the likely total population would be 2082. The report explained why the BRRA was not included in earlier rezoning within the Rouse Hill Development Area and that the BRRA's release "was further delayed during the last two to three years by the State Government's continuing assessment of the alignment of the North West Rail Link". The report stated that the vision for the BRRA is: "To create a high quality, integrated and ecologically sustainable urban environment with good public transport accessibility, open space, community facilities and employment opportunity". The report stated: The land uses and their arrangement proposed in the plan are based on the underlying assumption that the State Government will commit funds to acquisition, construction and operation of the North West Rail Link as the BRRA is developed.

(i) The corridor for the North West Rail Link is identified and includes the construction of two rail stations - one under Norwest Boulevard and the Balmoral Road station that is planned to be located between Balmoral Road and Burns road. (ii) Two rapid bus transitways - the Parramatta to Rouse Hill Regional Centre T-way that will operate on Old Windsor Road and the Blacktown to Castle Hill T-way that will operate on Burns Road and Memorial Avenue but may eventually operate on Burns Road, Balmoral Road, and Memorial Avenue. A bus interchange station is planned for the south-eastern corner of the intersection of Old Windsor Road and Burns Road… (iii) … (iv) Apart from the rail station and bus interchange station the transit centre will have residential buildings of 6 to 8 storeys, a local retail/service element, a formal civic space and a combined major community and indoor recreation facility…

24 The October 2003 Council report also stated: (i) North-West Rail Link

The structure plan has been developed on the assumption that the rail link will be constructed. The State Government, however, has made no financial commitment to the rail link's construction and unless it does, the structure plan will lead to a density of urban development dependant upon this public transport infrastructure without any certainty that the infrastructure will be provided.

Council will continue negotiations with DIPNR during the public exhibition of the structure plan but unless the commitment is made during the next few months a significantly revised structure plan may need to be prepared. I construe the word " commitment " in the last quoted paragraph as meaning the " financial commitment" referred to in the penultimate paragraph.

25 However, no revised structure plan was prepared by the acquisition date in June 2004.

26 The Draft Structure Plan was exhibited during the period 2 November 2003 to 23 March 2004. Submissions during this period raised two main areas of concern in relation to the NWRL, namely, that there had been no financial commitment to the NWRL's construction, and that there was no statement by the State Government as to when the NWRL would be constructed.

27 A letter dated 10 February 2004 from DIPNR to the council attached a document containing comments from DIPNR's Transport and Planning sections in relation to residential density. Those comments included the following: It is noted that council has linked the need to achieve a residential density of 15 dwellings per hectare with the assumption the North West Rail Link will be constructed.

Council has raised concerns that no financial commitment has be [sic] made for the construction of this rail link and has indicated the residential density for this area could be varied depending on what public transport is available.

However, the Department considers that the proposed transit ways (Parramatta - Rouse Hill/Mungerie Park and Blacktown - Castle Hill) will provide excellent public transport facilities for this area providing ample justification for at least the proposed 15 dwellings per hectare for the site.

The Department supports achieving high densities within the station catchment areas (both within Transit Centres and the Residential Zones) as this will create an active station location that has varied the journey patterns resulting in the station precinct being in use during " after hour " periods such as weekends and later at night…

The width of the corridor as illustrated within the Draft Structure Plan is 4.5 millimetres wide. This equates to a real width of 50 metres based on the scale provided. In accordance with Rail Infrastructure Corporation (RIC) guidelines, the rail corridor should have a width of 40 metres to allow for the construction and operation of the NWRL. In addition, the corridor should be supplemented with a 20-metre buffer either side of the corridor to reduce the effects of rail noise and vibration on any proposed residential developments. Hence, the total width of the corridor should be 80 metres. The 20 m buffer should be considered for non-sensitive uses such as roads running parallel to the corridor and non-residential land uses ie recreation open space and industrial uses.

28 On 26 March 2004, the council approved the Rouse Hill Regional Centre Master Plan Development Application, which provided for a NWRL corridor. Unchallenged evidence, which I accept, was given in a statement by Mr Rodney Lindsell, who was the Manager of Project Development at DIPNR at the acquisition date: The Department [of Planning] also ensured that the NWRL corridor through the Rouse Hill Regional Centre would be preserved as part of the major mixed-use project being undertaken by Landcom and Lend Lease (comprising approximately 150,000 m 2 of retail/commercial floor space and 1,800 dwellings). Baulkham Hills Shire Council approved the Rouse Hill Regional Centre Master Plan Development Application, which provided for a NWRL corridor, on 26 March 2004.

29 The Rouse Hill town centre is about three and a half kilometres north of the BRRA and adjacent to a planned railway station on the proposed NWRL. This railway station is Mungerie Park, which lies to the north of the proposed Burns Road station. Hence, at Rouse Hill, town centre development had proceeded notwithstanding the absence of a financial commitment by the State government to the NWRL.

30 A letter dated 25 May 2004 from the respondent to the council stated that the NWRL will be in a cutting between Burns Road and Old Windsor Road and anticipated a bridging structure over the cutting for air rights development, similar to arrangements for the Rouse Hill Regional Centre: Plan of Consolidation near Burns Interchange s Transitways requests that a Plan of Consolidation or an equivalent binding requirement be prepared for the four properties on the southern side of Burns Road between Old Windsor Road and Elizabeth Macarthur Creek (refer Figure 2). The reasoning is outlined below:

• Burns Interchange Station is located on property 1 immediately east of Old Windsor Road. The future NWRL station and local centre precinct are to be co-located in the vicinity of the T-way Interchange to provide high frequency public transport servicing in the years prior to the operation of the future NWRL station (and beyond);

• The NWRL will be in cutting between Burns Road and Old Windsor Road. The tentative alignment, subject to imminent refinement by a study to be investigated by Railcorp/DIPNR, will be broadly across property 2 adjacent to the T-way interchange. This location is a direct consequence of alterations made to the alignment to avoid difficulties perceived elsewhere in the Shire - the previous ' Preferred ' Overview Report alignment had been further to the east.

• It is anticipated that a bridging structure over the top of the railway cutting will be allowable for air rights development, similar to the arrangement made for the Rouse Hill Regional Centre. (In-principle, air rights development is acceptable over the T-way interchange and alignment also);

• Transitways is concerned that if the bridging structure is too expensive, and/or the allowable development in this corner is set too low, then development over the railway line near the T-way Station will not occur, thus isolating the T-way station from the broader BRRA site. This will have adverse effects on access, patronage and personal safety.

• A Plan of Consolidation or equivalent is requested, linked to suitable development potential incentives for the strip of land between Old Windsor Rd and Elizabeth Macarthur Creek, to spread the cost of the bridging structure over the railway amongst 4 parcels to prevent isolation of T-way interchange.

Zoning of Transitway and Burns Interchange s We request that zoning definition of the LEP reflect the future possibility of air rights development over the T-way interchange and alignment. We also request that zoning definition of the LEP reflect the potential overlap of NWRL corridor, T-way corridor and linkages, and future permissibility of air rights development;

31 A draft Local Environmental Plan (LEP) relating to the BRRA, including maps and written instruments, first became publicly available as an attachment to a report considered by the council at its meeting on 20 July 2004. As a certificate under s 65 of the Environmental Planning and Assessment Act 1979 had not been issued in respect of the draft BRRA LEP at that time, it was therefore not a draft environmental planning instrument within the meaning of the Environmental Planning and Assessment Act. A draft Development Control Plan (DCP) for the BRRA was also attached to that report. It is to be noted that the meeting and report post-dated the acquisition date. The report stated that since the earlier report of 28 October 2003: Discussions have earlier continued with various sections within DIPNR and the Director General of DIPNR has written to Council confirming that several major studies on various considerations related to NWRL are being completed. These studies are expected to be completed this month. In addition, the Minister of Infrastructure, Planning and Natural Resources has indicated a commitment to acquire the land within the rail corridor. This commitment to acquisition was one of the underlying assumptions to which reference had been made in the 28 October 2003 report. However, there is no evidence that this commitment had been made by the acquisition date, 4 June 2004. Therefore I do not take it into account as bearing on value.

32 The 20 July 2004 report also stated: "At this time the State Government has made no financial commitment to the rail line's construction and it has not given any indication as to when the rail line would be constructed".

Mr Lindsell's Evidence 33 I accept the unchallenged evidence of Mr Rodney Lindsell, Manager of Project Development at DIPNR at the acquisition date. He said: In October 2002, contracts were exchanged for the purchase of 4 parcels of land at Cherrybrook for a future NWRL station site at Franklin Road, Cherrybrook.

The Department also ensured that the NWRL corridor through the Rouse Hill Regional Centre would be preserved as part of the major mixed-use project … Baulkham Hills Shire Council approved the Rouse Hill Regional Centre Master Plan Development Application, which provided for a NWRL corridor, on 26 March 2004.

34 Mr Lindsell said that his Department would have given the following advice to an enquiring member of the public as at the acquisition date: (a) The NWRL Overview Report 'Connecting Communities', released in March 2002, provides an outline of the project including needs, objectives, next steps and an indicative alignment. (b) The delivery timeframe for the NWRL (as contained within Action for Transport 2010) had been deferred to enable the NSW Government to refocus on state-wide rail safety and reliability, including the Rail Clearways program. (c) Since the release of the Overview Report, the Department, in conjunction with RailCorp and the Ministry for Transport, had been undertaking further project development and this work would inform the Government's decisions on infrastructure investment. (d) No funding had been set aside and no commitment made to funding for construction of the NWRL. However, a small amount of funding (approximately $1-2 million annually) over a number of years had been provided for investigations into the preservation of rail corridors (the Government's Transport Corridor Preservation Fund), including for the NWRL. (e) However, the State Government had made a strong commitment, since 2002, to ensure protection of the rail corridor as a priority. Corridor protection ensures the viability of being able to construct the project in the future and maximise the opportunity for appropriate land-use and transport outcomes around the corridor, whilst providing the Government with flexibility to make decisions about the future of the proposed NWRL based on trends in population and employment and travel patterns. (f) The North West Rail Link, like other major infrastructure projects was being considered within the context of the Metropolitan Strategy. As the Strategy had not been finalised at the date of acquisition, it is possible that during this process a decision could have been made by the State Government not to pursue the project, to bring forward the timing of the project or to delay the project.

35 In a joint report, town planners Mr David Kettle for the applicant and Messrs Philip Brogan and Mr Harvey Sanders for the respondent, agreed with the facts stated in Mr Lindsell's statement of evidence.

36 Absent from Mr Lindsell's evidence is the following passage as to the timing of construction of the NWRL, on which I placed reliance in Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [49]: A minimum or maximum timeframe for planning and construction cannot be confirmed. Preliminary engineering investigations suggest that planning and construction of the proposed North West Rail Link between Cheltenham and Rouse Hill could take between seven and ten years. This duration would ultimately be dependent on a number of factors such as the availability of funding, the final location of the corridor, the final nature of the construction activities and the outcomes of environmental approvals.

37 However, Mr Sanders gave evidence to the effect that his view corresponded with the last sentence of that passage from Mr Lindsell's evidence viz "[The] duration would ultimately be dependant on a number of factors such as the availability of funding, the final location of the corridor, the final nature of the construction activities and the outcomes of environmental approvals". That, in my view, must be right.

Mr Brogan's Evidence 38 There was an unchallenged statement of evidence by Mr Brogan, a transport planning expert and town planner, which I accept. He also participated in the production of joint town planners' reports with Mr Kettle for the applicant and Mr Sanders for the respondent. Mr Brogan's unchallenged evidence included the following conclusions: The NWRL and the bus T-Way are separate proposals.

The NWRL is intended to serve a different line haul service to that of the T-Way which is intended to bridge the gap between local bus services and the heavy rail services.

The higher development densities envisaged by the Transit Centre designation will be delivered largely by the NWRL through the enhanced accessibility provided by the NWRL'S higher passenger loads and longer distance line haul trips compared with that provided by the T-Way.

The Transit Centre designation is therefore linked primarily to the provision of the NWRL, although the T-Way itself may have some impact on higher development densities over time, albeit minimal in comparison to a heavy rail facility.

Town Planners' Evidence 39 Town planners, Mr Kettle on behalf of the applicant and Mr Sanders on behalf of the respondent, agreed, and I accept, that had a purchaser sought their advice in relation to the development potential of the acquired land as at the acquisition date they would have advised that: (i) the land was within an area that had been identified for future urban development for many years and which was by the date of acquisition known as the Balmoral Road Release Area (BRRA); (ii) a Draft Structure Plan for the BRRA had been exhibited in December 2003/January 2004; (iii) the land was designated in the Draft Structure Plan in part as Transit Centre and in part as Railway Corridor; (iv) the Draft Structure Plan did not nominate any existing zonings upon which the Transit Centre would be modelled; (v) the draft Structure Plan refers to the Transit Centre as having residential buildings together with ' a local retail/service element, a formal civic space and a combined major community and indoor recreation facility '. The Transit Centre is akin to a high density residential precinct located at a transport hub with some complementary uses; (vi) the Transit Centre would require a precinct plan to be prepared prior to redevelopment; (vii) the land would be access denied from Old Windsor Road and Burns Road, however, a precinct plan or DCP could nominate future roads for access; (viii) a draft local environmental plan for the BRRA was in preparation but had not been exhibited at the date of acquisition; (ix) the timing of the public exhibition of the draft local environmental plan was contingent on a commitment by the State Government to the North-West Railway and no such commitment had been made - in any event, it would be some 10-15 years, at the earliest before the railway would be constructed, even if such a commitment was to have been made. (x) whilst the Draft Structure Plan for the BRRA only depicted the proposed railway as a ' corridor ' and not as a special uses zone it would have been most likely that the land affected by the corridor would have been subject to an acquisition clause in the draft local environmental plan that was in the course of preparation, as at the date of acquisition; and (xi) the local environmental plan was unlikely to be gazetted before mid-to-late-2005 if not delayed and not before mid 2006 if it was delayed.

40 The town planners disagreed as to the potential residential density of the acquired land in the absence of the NWRL. Mr Kettle's opinion was that in the absence of the NWRL a density of 70 dwellings per hectare would be likely and that the Draft Structure Plan, if amended, would have designated the acquired land for high density residential land use, with a density of 70 dwellings per hectare. His opinion was based on: (i) the range of residential densities within the Draft Structure Plan; (ii) evidence of other 'high density' land use designations identified on the Draft Structure Plan, (iii) the land's location at the junction of two bus transitway routes providing access to existing retail and employment centres such as Blacktown, Castle Hill and Parramatta; (iv) the land's proximity to a town centre that could still proceed despite the North West Railway; (v) DIPNR's requirement to achieve an average residential density of 15 dwellings per hectare; (vi) similar residential densities permitted in other locations within the Baulkham Hills Local Government Area supported by buses only that are not located on bus transitway routes; (vii) the recent approval of a Master Plan for the Rouse Hill Regional Centre, which, he considers, evidences that development consents can be issued despite the uncertainty of the NWRL, and that the Transit Centre can operate once the bus transitway is operational.

41 Mr Sanders, and Mr Brogan in a later joint report, disagreed with Mr Kettle's reliance on the proposed bus transitway to justify higher residential densities. Mr Sanders reasoned: (a) the council would have responded to the lack of commitment by revising the Draft Structure Plan to remove the high density residential land use designations; (b) he disagreed with Mr Kettle's reliance on the proposed bus transitways to justify the higher residential land uses. However, if Mr Kettle's view were correct, then he considered that any consequential measure of value attributable to the bus transitway would have to be ignored as it only arises as a consequence of the public purpose for which the land was acquired: s 56(1) of the Act; (c) if there was no commitment by the State Government to the NWRL, then it could be some time before rezoning of the acquired land would be resolved. This could have led to the preparation of a draft local environmental plan which left the lands within the Transit Centre as deferred matters. If so, the land would retain its Rural 1(a) zoning. Disagreeing, Mr Kettle pointed to the earlier Rouse Hill Regional Centre Local Environmental Plan which rezoned land proposed to be serviced by the NWRL as commercial and high density residential zones, without taking the " deferred matters " approach; (d) a draft local environmental plan would have included a provision that prevented redevelopment up to the maximum density until the railway was completed.

42 In a subsequent joint town planners' report by Messrs Kettle, Brogan and Sanders they agreed, and I accept, that had a purchaser sought their advice at the acquisition date they would have advised that: (i) the subject land was zoned Rural 1(a) under Baulkham Hills Local Environmental Plan 1991; (ii) the land had been designated in the Draft Structure Plan for the Balmoral Road Release Area (BRRA) for Transit Centre land use; (iii) the draft Structure Plan refers to the Transit Centre as having residential buildings together with ' a local retail/service element, a formal civic space and a combined major community and indoor recreation facility '. The Transit Centre is akin to a high density residential precinct located at a transport hub with some complementary uses; (iv) it was envisaged that the Transit Centre would primarily be a residential precinct at a density in the order of 90 dwellings per hectare; (v) a draft local environmental plan for the BRRA was in preparation but had not been exhibited at the date of acquisition; (vi) the North West Rail Link (NWRL) and T-way project were separate proposals; and (vii) on 14th February 2004 approval was granted for the construction and operation of the North-West T-Way Network consisting of two integrated rapid bus only transit links between Parramatta and Rouse Hill and between Blacktown and Castle Hill.

Market Value 43 There are two main valuation issues: (a) what market value should be attributed to the acquired land, by reference to comparable sales, before adding a premium for development potential? (b) should the premium to be added to the starting valuation to reflect the development potential of the acquired land be 50 percent as the applicant contends, 15 percent as the respondent contends, or some other percentage?

44 Market value is defined in s 56(1) of the Land Acquisition (Just Terms) Compensation Act 1991 (NSW), which is set out in paragraph 2 above. The statutory definition continues to be illuminated by the classic test of market value in relation to compensation for the resumption of land in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, Isaacs J said at 441-442: In the first place the ultimate question is, what was the value of the land on 1st January 1905? All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property. 45 Griffiths CJ, at 432, described the mental process as follows: … to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce…a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.

46 Spencer v The Commonwealth was affirmed by the High Court in HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at 650 [17] and Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575. "In determining that value, there must be attributed to the parties a knowledge of all matters that affect its value. Those matters will include the predicted impact of future events as well as the experience of the past….": Kenny and Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 at 436 [49] per McHugh J. The only events to be taken into account are those occurring up to the acquisition date. "All circumstances subsequently arising are to be ignored": Spencer v The Commonwealth at 440. However events subsequent to resumption are admissible not to prove a hindsight, but to confirm a foresight. They are relevant to the extent that they provide some evidence of what was foreseeable by the parties in calculating what price they would have accepted or offered at the acquisition date: Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 (CA) at 558, 563. The statutory test in s 56(1) "depends upon states of knowledge about that which has happened and that which might be anticipated": Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd (2005) 141 LGERA 243 at 254 [32] (NSWCA). In Roads and Traffic Authority of NSW v Mosca (2006) 146 LGERA 335 at 339, Handley JA (with whom Mason P and Bryson JA agreed) said: The basic principle of compensation law is that the land must be valued at the relevant date in its existing condition with all its potentialities as potentialities: Yates Property Corp Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156, at 175-176 citing Raja Vyricherla Narayana Gajapatiraju v The Revenue Divisional Officer, Vizagapatam [1939] AC 302, at 313 and Turner v Minister of Public Instruction (1956) 95 CLR 245 at 268-289.

47 In Multari v Roads and Traffic Authority of NSW [2004] NSWLEC 649 at [30], Talbot J cited the following passage from the judgment of the Full Court of the NSW Supreme Court in Longworth v Commissioner of Stamp Duties [1953] SR (NSW) 342 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.

48 In Liverpool City Council v Commonwealth of Australia (1993) 46 FCR 67 at 83, Wilcox J said: In a case where the task of assessing compensation comes down to the evaluation of a chance, it will rarely be possible to demonstrate that any particular figure is correct. I certainly cannot do so in this case. I can only consider all the relevant factors and make a judgment about them; a 'best guess' perhaps.

49 In a compulsory acquisition case, valuation doubts are resolved in favour of a more liberal estimate. This principle has been twice affirmed by the High Court. The second occasion was by Callinan J in Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at [356], agreeing with what Dixon J said on the first occasion in the following well known passage in Commissioner of Succession Duties (SA) v Executor Trustee and Agency Company of South Australia Limited (1947) 74 CLR 358 at 373-4: There is some difference of purpose in valuing property for revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While this difference cannot change the test of value, it is not without effect upon a court's attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate.

50 A dispossessed owner should be compensated on the basis of the land's highest and best use: Boland (above) at [271]. In considering the highest and best use potential of the acquired land, it would be preferable to have regard to sales of other lands that were similarly affected by the proposals relating to the Transit Centre designation. Their development potential under that designation would be embedded in their sale price. However, there are no such comparable sales.

51 In those circumstances, the parties and their valuers are agreed that the "bottom up" methodology described in Sandhurst Trustees Ltd v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [74] should be adopted. In Sandhurst, under this methodology, the land was first valued on the basis of its restrictive Rural 1(a) zoning in force at the acquisition date, but by reference to comparable sales with low to medium density development potential. A premium of 25 percent was then added for denser development potential under a Transit Centre zoning, which permitted 90 dwellings per hectare. The "bottom up" method contrasts with the "top down" method described in Sandhurst at [75], whereby the acquired land would be valued as though it had Transit Centre zoning permitting 90 dwellings per hectare, and a deduction then made for the chance that that rezoning and development may not eventuate and for the time required before it may eventuate. Which method should be applied in a particular case depends largely on the degree of likelihood that existing restrictions will be relaxed and the likely time frame for their relaxation, as the authorities reviewed in Sandhurst at [77] to [84] indicate: Royal Sydney Golf Club v Federal Commissioner of Taxation (1957) 97 CLR 379 (Kitto J); Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd (2005) 141 LGERA 243 at 258 [45] (NSWCA); Redeam Pty Ltd v South Australian Land Commission (1977) 17 SASR 508 at 512 (Jacobs J); Port Macquarie West Bowling Club Ltd v The Minister [1972] 2 NSWLR 63; Wattle Park Pty Ltd v Commissioner of Highways (1973) 6 SASR 69 at 94 (Wells J); Woodbury v Wyong Shire Council [2006] NSWLEC 48 (Bignold J). Generally, the extent of the premium in a particular case would be expected to have regard to those same factors, as well as to the extent of the development potential.

52 The acquired land is close to land at 28 Burns Road, also compulsorily acquired by the respondent later the same year, which was the subject of my judgment in Sandhurst. Two points of distinction from the Sandhurst case may be noted. First, in the present case there is a contest as to the quantum of the valuation, before adding a premium for development potential. In Sandhurst, the quantum (as distinct from the methodology) of the respondent's valuation evidence was not challenged by the applicant who did not adduce valuation evidence based on a bottom-up approach. Accordingly, the valuation rate derived in Sandhurst is irrelevant in the present case. Secondly, whereas in Sandhurst the premium for development potential of the acquired land was assessed at 25 percent, in the present case the applicant submits that it should be 50 percent, while the respondent submits that it should be 15 percent.

53 The applicant's valuer, Mr Peter Phippen, considered that the premium should be 50 percent because the acquired land was superior to the Sandhurst land. The respondent's valuer, Mr Peter Dempsey, considered that it should be 15 percent because there was greater uncertainty (on the town planners' evidence) concerning the Transit Centre's implementation at the acquisition date in June 2004 than at the Sandhurst November 2004 acquisition date. I accept, having viewed the acquired land, that its location is superior to the Sandhurst land and that, as agreed by the town planners, the uncertainty was greater at the acquisition date than at the later Sandhurst acquisition date.

54 The valuers agreed the following, which I accept: (a) although the zoning of the land was Rural 1(a), the underlying land use designation would have been Transit Centre, in accordance with the Draft Structure Plan, which had a proposed density of 90 dwellings per hectare; (b) the valuation methodology was direct comparison to relevant sales evidence; (d) the BRRA had received widespread local media attention for a number of years leading up to the acquisition date and subsequently. However, it was only with the public exhibition of the Draft Structure Plan in November 2003 that a degree of certainty in the rezoning process was established; (e) there were no directly comparable sales at or around the acquisition date having the same future use designation as the subject property; (f) the public purpose of the acquisition is to be ignored for the purpose of assessing compensation in accordance with the Act; (g) under s 55(a) of the Act, the hypothetical prudent purchaser would have regard to the highest and best use potential of the acquired land. This potential is determined on the basis of the most probable use based on planning guidelines, and whether the development is physically possible, legally permissible, financially feasible and results in the highest value; (h) a prudent purchaser would retain the advice of appropriately qualified experts in reconciling risks and uncertainties associated with the acquisition. However, Mr Phippen said that not all potential purchasers do this; (i) a prudent purchaser would pay a prudent vendor an amount based on the use potentials of the acquired land; (j) the prudent purchaser would expect to receive the benefit of any future change to the use potential of the land, being a reward for the risks incurred in acquiring the subject land based on the uncertainties at the date of acquisition; (k) based on town planning advice, the scope of the uncertainties relating to the development of the acquired land are significant. Mr Phippen added that, whilst significant, the uncertainties are not unique and can be allowed for in a valuation.

55 Mr Dempsey reasoned that a hypothetical prudent purchaser would anticipate uncertainty in relation to the following matters: (a) When funds would be available to construct the NWRL. (b) The precise boundaries of the NWRL were not established. Mr Phippen thought this was irrelevant. (c) There was no engineering detail in relation to the NWRL. Mr Phippen thought this was irrelevant. (d) This was not an established town centre but a greenfields location. There was no demonstrated market demand for higher density residential uses in this location. Mr Phippen observed that the absence of demand was because three of the seven lots in the Transit Centre zone were owned by the respondent (who had just compulsorily acquired them and was thus unable to sell them) and the other four were owned by Norwest, the largest developer in the area. (e) The only reason the designated land use applying to the subject property existed in this location related to the proposed development of the NWRL. Mr Phippen said this may be true but the bus transitways require an interchange facility in the Transit Centre zone. (f) The likelihood is that part of the NWRL will be in a tunnel. There was no preferred construction method for the tunnel. Adjoining land may be significantly affected by this tunnel. The potential to construct over the tunnel could not be properly assessed at the date of acquisition or subsequently. Mr Phippen considered that adjoining land is not realistically expected to be greatly affected by such a tunnel. (g) Development of the acquired land depended on agreement to a precinct plan (master plan) with other surrounding landowners within the proposed Town Centre. Mr Phippen considered this to be hardly relevant, given that all the land within the Transit Centre is owned by Norwest and the RTA. (h) There was difficulty in concluding a precinct plan in circumstances where there was uncertainty in relation to the location of the NWRL and where engineering considerations would delay resolving the location of roads and buildings including the building type and use. (i) Until funds were allocated for the construction of the NWRL it was unlikely that the uncertainties relating to the required detail would be resolved to the degree necessary to finalise a precinct plan. Mr Phippen considered this irrelevant. (j) Council would not be able to issue a development approval without fully understanding the design of the NWRL, including issues relating to engineering and geotechnical considerations. There were no prospects at the date of acquisition or subsequently of this information being available in the foreseeable future. Mr Phippen considered this irrelevant. (l) There was no sound basis at the acquisition date to assume funds would be allocated for the construction of the NWRL in the foreseeable future. Mr Phippen considered this irrelevant. (m) The location of the higher density residential and mixed use land uses in this location is a direct consequence of the proposed location of NWRL. Mr Phippen considered this irrelevant.

56 Prior to the hearing, the applicant's valuer, Mr Phippen, produced reports which took a top down approach and which included brief reference to a sale at 497 Old Windsor Road. Prior to the hearing, the respondent's valuer, Mr Dempsey, in a report of October 2005, listed 12 comparable sales including those identified as Sales 5 to 10 of land in the BRRA. On the basis of Sales 5 to 10 he assessed the acquired land's market value at $225 per square metre which (after applying a discount) converted to $3.12 million. In Mr Dempsey's 2 June 2006 report, produced shortly before the hearing, he abandoned the valuation methodology adopted in his first report, instead adopting the "bottom up" methodology which he had considered but not adopted in that earlier report. Based on that methodology, Mr Dempsey assessed market value at $2.5 million by adopting a rate of $125 per square metre and adding a 15 percent premium for development potential. On the eve of the hearing, following the recent decision in Sandhurst, Mr Phippen switched to a bottom up approach and produced a spreadsheet of the 12 comparable sales in Mr Dempsey's earlier report, which Mr Phippen adjusted for time and drainage affectation to produce a dollar rate per square metre (Exhibit O). Mr Phippen placed reliance on Sales 5 to 10 which he considered to have a similar level of uncertainty, but much lower future development potential than the acquired land. During the hearing, Mr Dempsey produced a competing spreadsheet of the same sales, in which he calculated the time adjustments and drainage affectation areas differently, with resultant lower adjusted rates per square metre (Exhibit 13). Towards the end of the hearing, Mr Dempsey produced a revised spreadsheet of the same 12 sales (Exhibit 20), which replaced his earlier spreadsheet. Mr Dempsey's spreadsheets describe Sales 5 to 10 as having potential for more immediate prospects of rezoning and development than the BRRA Transit Centre land. I accept this. In the meantime and during the hearing, Mr Dempsey placed reliance on the sale at 497 Old Windsor Road, Kellyville, briefly referred to as part of a table set out in Mr Phippen's June 2004 report, as the most comparable sale.

57 Thus, there were significant changes of position by both valuers. Each party submitted that, consequently, I should form an adverse view of the credit of the other's valuer. It is unnecessary to consider this course because I am able to decide the valuation issue without doing so.

58 The sale of 497 Old Windsor Road occurred three days after the Draft Structure Plan was considered by the council in October 2003. In Mr Dempsey's opinion, the sale price for this property was consistent with a level of uncertainty identical to that of the acquired land. This sale was referred to in an earlier report by Mr Phippen of June 2004 in which he calculated the rate per square metre at $151, derived by dividing the sale price of $2,908,623 by the area of $19,300 square metres. Mr Dempsey and the respondent acknowledged that this should be increased to $155 when adjusted for time to the acquisition date. Ultimately, the respondent placed primary reliance on this sale as the most comparable, whilst acknowledging that account could also be taken of other comparable sales in Exhibit 20, particularly Sales 5 to 10.

59 In his report of June 2004, Mr Phippen said that the sale properties listed therein, including 497 Old Windsor Road, had "significantly less development potential" than the acquired land and that "the rate per square metre of land figures [were] considered of no use" as each of the sale properties listed had "vastly inferior potential for development".

60 The Draft Structure Plan designated the land at 497 Old Windsor Road as "Employment Area". The council report of October 2003 stated: "Although the structure plan identifies two areas (north and south of the transit centre) as potential areas for employment/industrial uses, several government departments, including DIPNR and the RTA, have indicated that these locations are not preferred and would be better suited to high-density forms of residential development so as to support and, in turn, be supported by the future rail station".

61 The property at 497 Old Windsor Road is located to the south of the Transit Centre on the other side of Balmoral Road. In addition to being zoned Employment Area under the Draft Structure Plan, it is severed into two sections by the railway corridor, is affected on the Old Windsor Road side by a scenic corridor and, like the acquired land, is access denied to Old Windsor Road. The scenic corridor is an undevelopable area which must be created using representative vegetation from the Cumberland Plain Woodland and which must remain in private ownership and be protected through use of conservation zoning or restricted development areas.

62 In contrast, the acquired land does not have the limitations of an employment zone, nor is it affected to the same extent by the railway corridor. There is no evidence that land designated as "Employment Area" would be as valuable as residential land. It is difficult, I think, to compare and adequately adjust a sale of land designated as "Employment Area" to determine the market value of land designated as "Transit Centre" with residential potential for up to 90 dwellings per hectare. In addition, because of the late reliance by Mr Dempsey and the respondent on the sale at 497 Old Windsor Road, there is weight in the applicant's submission that it was not subject to the degree of review and investigation that was likely if the applicant had known earlier that it would be relied upon as the primary comparable sale.

63 The applicant submitted that the land at 497 Old Windsor Road was inferior to the Roulston land zoned "Employment Area" under the Draft Structure Plan, which is located on the northern side of Burns Road. The value of the Roulston land was assessed at $250 per square metre in Roulston v Roads and Traffic Authority of NSW [2005] NSWLEC 409 (Cowdroy J). In that case a "top down" approach was adopted, with a discount of 50 percent from the value of zoned Employment Land at Norwest Business Park being applied ($500 per square metre less 50 percent ie $250 per square metre). On the evidence, I am unable to agree or disagree with this submission.

64 Sales 1 to 4 in Exhibits O and 20 were up to about 8 kilometres away in Box Hill, or otherwise outside the BRRA and have never been in a declared release area nor been subject to a structure plan. Sales 1 and 2 had only industrial potential. In oral evidence, Mr Dempsey said that he did not rely on Sales 1 to 4 as evidence of value but rather as evidence of how the market reacts in situations where there is great uncertainty as to development potential. I agree. He contrasted these sales with Sales 5 to 10 in the BRRA, which he considered had more certainty and with Sales 11 and 12 outside the BRRA, which had already been zoned for residential use and therefore had no uncertainty. I agree. Mr Phippen also did not consider Sales 1 to 4 to be a reliable indicator of the value of the subject land. Sales 11 and 12 were sales of en globo land within established residential precincts in Kellyville, outside the BRRA, which sold at the peak of the market in the latter half of 2003 for substantially higher prices per square metre than the other comparables. I do not think Sales 1 to 4 and 11 and 12 are reliable indicators of the value of the acquired land and I do not understand the parties' valuers to have ultimately relied on them for that purpose. However, sales 11 and 12 do give some indication of prices achieved at that time for immediately developable land permitting medium density development.

65 In the circumstances, I consider that the best evidence of comparable sales are Sales 5 to 10 referred to in Exhibits O and 20. Sales 5 to 10 were of lands which were zoned Rural when sold. I assess their perceived development potential at the time of their sale as probably about 10 dwellings per hectare. This is based partly on the evidence of Mr Phippen. In oral evidence he repeatedly described their potential density at the time of their sale as 10, and once as 10 or 15, dwellings per hectare, although in an earlier written report he referred to it as 15 dwellings per hectare. Mr Dempsey was less specific, describing them as selling with a general expectation of future residential use. Sales 5 to 10 were sold prior to the production in October 2003 of the Draft Structure Plan, with the exception of Sale 8, which sold subsequently with a proposed zoning thereunder of "Residential", meaning 10 dwellings per hectare.

66 Mr Phippen's adjustments for time were at the rate of 1.5 percent per month between the date of sale and the acquisition date of the subject land in June 2004. This rate was based on statistical analysis showing that the value of retail (ie developed) property in the north-west growth area escalated by over 18 percent per annum from mid 2000 until late 2003. Subsequently, the market for such property stagnated and in some areas declined, although he said that sales of wholesale property (ie en globo, undeveloped land) continued to rise.

67 Mr Dempsey's adjustments for time in relation to Sales 5 to 10 (Exhibit 20) were as follows: 5. BRRA land designated Residential and Trunk Drainage. Allowed 10 month delayed settlement with a $1,000,000 deposit that could be applied to SD and deposit on another property. Market rose 19.1% in the 20 months between October 2002 and June 2004. 6. BRRA land designated Residential. Allowed 12 month delayed settlement with a $500,000 deposit released to the vendor. Market rose 19.1% in the 20 months between October 2002 and June 2004. 7. BRRA land designated Residential and Trunk Drainage. Allowed 9 month delayed settlement with a $1,500,000 deposit released to the vendor. Market rose 13.1% in the 16 months to June 2004. 8. BRRA land designated Residential and Trunk Drainage. No delayed settlement. Peak of market. Market fell -1.09% in the 7 months to June 2004. 9. BRRA land designated Residential. Allowed 16 month delayed settlement with a $1,000,000 deposit released to the vendor. Market rose 8.5% in the 12 months to June 2004. 10. BRRA land designated Residential. Allowed 5 month delayed settlement with a $330,000 deposit released to the vendor. Market rose 12.6% in the 19 months to June 2004.

68 Mr Dempsey's adjustments for time were variable. The Residex index was adopted for adjustments to the extent that he considered that it could be relied upon. Mr Dempsey's adjustments for delayed settlement allowed the actual settlement period less two months for a normal settlement in order to resolve doubt in favour of the dispossessed owner. His designations were according to the Draft Structure Plan which, it is noted, post dated all of Sales 5 to 10, except Sale 8.

69 I consider Mr Dempsey's time adjustments to be more precise and more realistic than those of Mr Phippen and I propose to adopt them.

70 As regards the adjustments for affectation by trunk drainage, Mr Phippen's calculations of the affected areas were based on estimates by Mr Kettle. The evidence does not disclose the basis of Mr Kettle's estimates. Mr Dempsey based his calculation of the drainage affected areas on survey plans produced by the Rouse Hill Infrastructure Development Corporation confirmed on 21 June 2006. I consider that Mr Dempsey's calculations of the affected areas are probably more reliable than those of Mr Phippen and I propose to adopt them.

71 Mr Dempsey's time and drainage area adjustments, which I adopt, result in the following adjusted rates per square metre for Sales 5 to 10 (Exhibit 20):

No Address Date of Sale Adjusted $ PSM 5 51 Arnold Ave, Kellyville 16.10.02 229 6 22 Windsor Rd, Kellyville 01.10.02 235 7 42 Balmoral Rd, Kellyville 11.02.03 187 8 4 Balmoral Rd, Kellyville 25.11.03 196 9 90 Windsor Rd, Kellyville 13.06.03 189 10 74 Windsor Rd, Kellyville 29.11.02 256

72 The respondent submitted that the value of these comparable sales should be reduced by 5 to 10 percent to take into account their increased value due to the bus transitway proposal: s 56(1)(a) of the Act (the Pointe Gourde principle). I do not accept the submission. There is no valuation or other evidence to suggest that any of the comparable sales were affected by the bus transitway, either positively or negatively. The valuers for both parties produced elaborate spreadsheets of Sales 5 to 10 with a number of adjustments, but made no adjustment for the bus transitway. It was not suggested to either of them in evidence that such an adjustment should be made. Given the state of the evidence, it is equally arguable that the value of land in proximity to the bus transitway may have increased, because it was seen as a benefit, or may have decreased, because the transitway proposal had amenity impacts that were seen as detrimental to adjoining or nearby land.

73 Sales 5 to 10 are each of comparable area to the acquired land but, in my view, are inferior in location. Some are inferior in physical features. Sales 7 and 10 are battleaxe blocks with narrow street frontages, their irregular shape meaning that they may be difficult to subdivide; and Sales 5, 7 and 8 have significant areas subject to flooding. All sold for more than $3 million and two for more than $4 million. The latest was Sale 8, which occurred in November 2003, after the BRRA Draft Structure Plan had been produced in October 2003. The others were sold earlier, but at times when (according to Mr Dempsey who I accept) there was widespread public knowledge that the land would be included in the BRRA. The two highest are Sales 6 and 10 at adjusted rates of $235 and $256 per square metre. The Sale most proximate to the acquired land is Sale 5 at $229 per square metre. Taking all matters into account and giving the applicant the benefit of any doubt, as I must, I propose to adopt a rate of $235 per square metre for the acquired land, before adding a premium for its superior development potential.

Development Potential 74 The applicant submitted, first, that the long term development potential of the acquired land was 90 dwellings per hectare if the NWRL was constructed; and, secondly, that its short term development potential was 70 dwellings per hectare if the NWRL was not constructed. The respondent agreed with the first submission and disputed the second. I accept the first submission but not the second for the following reasons.

75 Mr Kettle formed the view that without the NWRL, the Transit Centre area would be rezoned high density at 70 dwellings per hectare. He gave as one reason for this the effect of the bus transitway. However, the bus transitway is the purpose for which the subject land was acquired. For present purposes, any increase in the value of the land caused by the carrying out of that public purpose must be disregarded when determining the market value of the acquired land: s 56(1)(a) of the Act (the Pointe Gourde principle).

76 Nothing in the Draft Structure Plan, the council report of 28 October 2003 or any other council document evidences that the council was contemplating development of the Transit Centre on an alternative high density basis if the NWRL was not constructed. Indeed, the council linked the need to achieve an average residential density of 15 dwellings per hectare throughout the entire BRRA with the assumption that the NWRL would be constructed. That is why DIPNR wrote its letter of 10 February 2004 suggesting that the proposed bus transitways would justify the proposed 15 dwellings per hectare. However, there is no indication that the council agreed or planned on that basis. It would be highly speculative to attempt to say what the council might have planned if there was no NWRL.

77 The unchallenged evidence of the transport and urban planner Mr Brogan, which I accept, was that the higher development densities envisaged by the Transit Centre designation will be delivered largely by the NWRL through the enhanced accessibility provided by the NWRL's higher passenger loads and long distance line haul trips compared with that provided by the bus transitway; that the Transit Centre designation is therefore linked primarily to the provision of the NWRL; and that although the bus transitway itself may have some impact on higher development densities over time, they will be minimal in comparison to a rail facility. I also accept the evidence of Mr Sanders that without the NWRL there was no justification for a 70 dwelling per hectare density in this location. Mr Dempsey, the respondent's valuer, did not suggest that the bus transitway contributed to the density potential of the acquired land. In cross-examination he said that he could not say whether it was significant in the sale price of 497 Old Windsor Road to the south. In this state of the evidence, I conclude that the contribution from the bus transitway public purpose is minimal and, therefore, it is not necessary to calculate a discount for the development potential attributable to that public purpose. Like the law, a valuation is not concerned with minimal or insignificant matters. I might add that there is no evidence as to what any such adjustment might be.

78 Uncertainty concerning the realisation of development potential, including the time frame for realisation, is a weighty consideration when valuing development potential. The respondent submitted that the rail corridor shown on the Draft Structure Plan as covering a small part of the north-eastern section of the acquired land and the 20 metre "buffer" on each side substantially affected the site or gave rise to uncertainty. This alignment appears to reflect council officers' interpretation of DIPNR's "preferred alignment", which was indicated in the plan attached to the letter from DIPNR to the council of 23 July 2003. The preferred alignment, as shown in that plan, did not affect the acquired land. The letter said that further design and project development work was required "to precisely define the corridor". Mr Kettle, in a report dated 24 May 2005, noted that the Structure Plan did not indicate whether the railway corridor land would be capable of development. He said that Mr Meloy of the council advised on 28 May 2004 that the land above the rail corridor will be subject to restrictions and that "there would be a zone of about 20 metres either side of the rail corridor in which there will be limitations upon development." While an element of uncertainty arises from the railway alignment and buffer, I think it is significantly less than suggested by the respondent. Weight should be given in this regard to the contents of the respondent's letter to the council of 25 May 2004, which said that the NWRL will be in a cutting between Burns Road and Old Windsor Road and anticipated that there would be a bridging structure over the top of the railway cutting which would allow "air rights development, similar to the arrangement made for the Rouse Hill Regional Centre. (In-principle, air rights development is acceptable over the T-Way interchange and alignment also)."

79 The respondent submitted that other uncertainties affecting the proposed future use potential included the following: (a) the fact that the Draft Structure Plan has no status under the EPA Act and therefore could not be relied upon with certainty as an indication of an intended future zoning. That is true. Nevertheless, a draft structure plan is a commonly used planning tool of councils and, in my opinion, the Draft Structure Plan was a significant document; (b) the Draft Structure Plan does not itself specify the densities applicable to the various land use designations, but one has to go to the October 2003 council report to see that the density for the Transit Centre zone, for example, is 90 dwellings per hectare. I do not think that this is a significant point; (c) according to the October 2003 council report, the residential densities proposed in the Transit Centre were based on an assumption that the State Government would commit funds for the acquisition, construction and operation of the NWRL. Further, the report stated that unless a financial commitment was made within a few months, a significantly revised structure plan may need to be prepared. That is true. On the other hand, by the acquisition date almost eight months had passed, there had been no such revision, and a local environmental plan based on the Draft Structure Plan was in the process of being drafted; (d) if a local environmental plan based on the Draft Structure Plan were to be gazetted before the Government's financial commitment was made, it could reasonably be anticipated, in Mr Sanders' view, that the local environmental plan would include a provision preventing development to the maximum density until the railway was completed. Accordingly, in Mr Sanders' view, the timing of the development and the nature of future zoning were uncertain. On the other hand, as Mr Kettle said, the earlier Rouse Hill Regional Centre Local Environmental Plan rezoned land proposed to be serviced by the NWRL as commercial and high density residential zones without taking the deferred matters approach; (e) in relation to remnant vegetation communities, stands of Cumberland Plains Woodland existed on the southern part of the acquired land before their removal after compulsory acquisition. Mr Kettle said in his initial report that any development application relating to the property would require the preparation of a Species Impact Statement because the Cumberland Plains Woodland is listed as an " endangered ecological communit[y] " under Schedule 1 of the Threatened Species Conservation Act 1995 (NSW). On the other hand, prior to the making of the Draft Structure Plan, the council had commissioned an ecological assessment of Cumberland Plains Woodland in the BRRA as part of its 2001 Local Environmental Study. It said that whilst the trees had some regeneration potential, their " structure and floristic composition [had been] significantly reduced due to grazing, slashing and mowing ". The Draft Structure Plan and October 2003 council report took such matters into account and located significant stands in open space zonings and areas appropriate for regeneration in scenic corridors. Although this remnant vegetation was referred to in Mr Kettle's initial report, which the respondent tendered, it was otherwise not really identified or assessed as an issue in the case. When put to Mr Phippen in cross-examination, he said that he did not consider that any of the trees represented an impediment to development. Further, although he was aware that depending on the outcome of the Species Impact Statement, there may be a possible constraint arising out of the existence of that vegetation, he said that he did not give that consideration much weight. I accept Mr Phippen's evidence. I think this issue is of little significance. (f) There were access restrictions because Old Windsor Road and Burns Road were each defined as a " classified road " under the Baulkham Hills LEP 1991. Therefore any access to the acquired land would be from a classified road unless new roads were constructed. Mr Kettle said in his initial report that the current access restrictions posed a constraint on the site in terms of the range of land uses permissible, this constraint relating primarily to traffic and access issues of the arterial roads. I accept that this was so. (g) Mr Kettle also said in his initial report that the property is identified under the council's Bushfire Prone Land Map as being subject to bushfire hazard. The majority of the property is located within the 100 metre vegetation buffer to Vegetation Category No 1 land located on neighbouring properties. He said that the bushfire hazards affecting the property were a constraint affecting the site and that the manner in which the constraint would affect development would vary according to the nature of the proposed development in this location on the property. I think that this is correct, but is a minor point. 80 My conclusions concerning the probable assessment of the development potential of the subject land by the hypothetical buyer and seller as at the acquisition date are as follows.

81 They would have understood that the high density of 90 dwellings per hectare in the Transit Centre under the Draft Structure Plan was on the assumption that the State Government will commit funds to the acquisition, construction and operation of the NWRL. That is what the October 2003 council report indicates. It is also logical because of the enhanced accessibility that the NWRL would provide. They would have understood that there was a risk that the NWRL might not eventuate; that the State government might change its mind; and that there were uncertainties including as to the timing of planning approvals, the timing of approval of a master plan for the Transit Centre, the timing of an approved development and the timing of construction of the NWRL. They would have understood that it would be some ten to 15 years at the earliest before the NWRL was constructed, assuming a government commitment to do so. They would have understood that the local environmental plan was unlikely to be gazetted before mid to late 2005, if not delayed, and not before mid 2006 if delayed. The hypothetical buyer and seller would have been cognisant of the competing town planning and valuation views to which I have referred.

82 They would be encouraged by the commitments and announcements that the NSW government had made relating to the NWRL, albeit those commitments were not legally enforceable. In the March 2002 Overview Report, the NSW Government had made a commitment to protect the NWRL corridor which it described as "a major commitment" to the NWRL. Mr Lindsell's department would have advised at the acquisition date that the State Government had made a "strong commitment" since 2002 to ensure protection of the rail corridor as a priority. The Government had provided one to two million dollars annually over a number of years for investigations into the preservation of rail corridors including the NWRL. They would have understood that DIPNR had ensured that the NWRL corridor through the Rouse Hill Regional Centre would be preserved, and that the council had recently approved a master plan development application for that centre which provided for a NWRL corridor notwithstanding the absence of a financial commitment by the Government to the NWRL. They would also have been encouraged by the fact that the planning processes had made progress, although they had a good way to go. These circumstances would have significantly reduced, in their minds, the uncertainties attending the NWRL and valuation of the acquired land.

83 The superior location of the acquired land compared with the Sandhurst land roughly offsets, in my view, the greater uncertainty at the acquisition date than at the later Sandhurst acquisition date.

84 In my opinion, having regard to all relevant circumstances, the hypothetical buyer and seller would have been prepared to agree on a price which reflected a significant sum above the value of the subject land as a rural homestead with low density development potential, in order to reflect the prospect of development which permitted 90 dwellings per hectare. I have earlier adopted the rate of $235 per square metre as the value of the acquired land as a rural homestead with low density potential.

85 Taking into account all relevant considerations, I have concluded that a hypothetical buyer and seller would have been prepared to agree to increase this rate by about 25 percent, ie by about $58.75 to $293.75 (before GST). This rate has to be multiplied by the area of 17,300 square metres. The resultant market value component of compensation to which the applicant is entitled under s 55(a) of the Act is $5,081,875, which may be rounded to $5,085,000.

Disturbance 86 The applicant's claim for loss attributable to disturbance under s 55(d) of the Act is $39,257.84. This comprises legal fees of $5,000 under s 59(a) which are agreed, and valuation fees of $34,257.84 under s 59(b). Of the valuation fees, the respondent agrees to $8,750. This comprises $2,750, being Mr Kettle's fees and $6,000, being part of Mr Phippen's total fees of $31,507.84. The respondent's submission is that Mr Phippen's valuation fees appear to be excessive.

87 The applicant is entitled to recover valuation fees reasonably incurred in connection with the compulsory acquisition of the land: s 59(b) of the Act. There is in evidence an invoice of Abbott's Valuers, Mr Phippen's firm, showing a total of 90 hours spent at an hourly rate of $300. Mr Dempsey, in answer to questions from the respondent's counsel, indicated that a job such as this would be charged by reference to an hourly rate and not a fixed fee. No questions were put to Mr Phippen to suggest that either his hourly rate or time spent were unreasonable. I accept that this was a complex matter and that it would have taken considerable time to prepare valuation reports. In my opinion, it has not been established that the valuation fees were excessive. I am satisfied on the evidence that they were reasonably incurred. Accordingly, the applicant is entitled to recover, for disturbance, legal fees of $5,000 and valuation fees of $34,257.84, total $39,257.84.

Solatium 88 The applicant's claim for solatium under s 55(e) of the Act is agreed at $19,635.

Orders 89 In the result, the applicant is entitled to: $ market value s 55(a) 5,085,000.00 disturbance s 55(d) 39,257.84 solatium s 55(e) 19,635.00 5,143,892.84

90 I direct the parties to bring in short minutes of order to reflect my conclusions and to re-list the matter before me within one week, by arrangement with the Registry, when final orders will be made. I will deal with costs on that occasion unless the parties agree on costs in the meantime.

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