Michele Melino and three others in their capacity as executors of the Estate of the late Costanzo Melino v Roads and Maritime Services

In whose names should the proceedings be conducted?

Introduction

1. On Monday, 4 September 2017, an application was made to the Registrar of the Court for permission to examine the Court file in this matter. That application was made by Ms Rosa Melino. She gave as her reason for seeking such access the following explanation: I am beneficiary in this estate and have not been informed of Court case. As the above brother is not keeping other beneficiaries informed, we need to know what is the outcome as there is some compensation to be paid to beneficiaries.
2. As the hearing had concluded, and I had not only reserved my decision but had advised the Court's Listings Manager that it was my intention to hand down my decision on the afternoon of Thursday, 7 September 2017, Ms Melino's application was referred to me to advise the Registrar on the appropriate response to be made. I concluded that there were two steps properly to be taken.
3. The first of them was to arrange for access to be given to Ms Melino to the publicly available documents which had come into evidence during the course of the trial (a little more needs to be said about this process, below, as the trial had been conducted as a paperless one) and to defer the giving of my decision until I had been able to resolve the question of in whose names the proceedings should have been conducted and whether it was necessary to make any amendments by invoking the powers available to me under s 63 and/or s 64 of the Civil Procedure Act 2005 (the Civil Procedure Act).
4. As to clarifying the procedural position, I had my Associate notify the legal representative of the nominated Applicants and the legal representative of the RMS that the matter was set down for mention on the Thursday afternoon. This arrangement, self‑evidently, caused me to defer the handing down of judgment in this matter. My Associate's advice to the legal representatives was in the following terms: His Honour has asked me to advise you that, yesterday, a person attended the Court's Registry seeking access to documents on the Melino file. The basis upon which access was sought was that the person was a beneficiary under the will of the late Costanzo Melino but was not a party to the proceedings and was not being kept informed about, or had any detailed understanding of, the proceedings being conducted. Under these circumstances, despite the fact that his Honour had expected to deliver judgment in these proceedings in the very near future, his Honour considers that it is not appropriate to do so until the question of who might properly be the applicants in the proceedings has been clarified. If the appropriate applicant is the Estate of the Late Costanzo Melino, his Honour would be in a position to exercise his powers pursuant to s 63 and/or s 64 of the Civil Procedure Act 2005 to substitute that name for the names of the four members of the Melino family who are presently nominated as the Applicants in the proceedings. That would require his Honour to be satisfied that the application has been made, appropriately, by those persons who are the executors of the estate. His Honour has listed this matter at 4.15 pm on Thursday 7 September 2017 to enable this issue to be addressed.

Ms Melino's access to documents

1. I also requested the Court's Assistant Registrar to e-mail Ms Melino informing her of arrangements I proposed for her to be able to access the publicly available elements of the Court file, elements that were held electronically. That e-mail also incorporated a copy, for her information, of the text of the e‑mail that my Associate had sent to the legal representatives of the parties.
2. For abundant caution, I asked the Assistant Registrar to telephone Ms Melino and advised her that the e-mail had been sent, as I wished to ensure that she had maximum notice of the mention set for Thursday, 7 September 2017 should she wish to attend. During the course of the Assistant Registrar's phone conversation with Ms Melino, after the e-mail had been despatched, Ms Melino advised the Registrar that there was a further beneficiary to the estate of the late Costanzo Melino who was not one of the nominated Applicants in these proceedings. Ms Melino said that that person, like her, was another daughter of the late Costanzo Melino. Ms Melino requested that the Assistant Registrar make contact with her sister, who lived in Queensland, and advise her of what had occurred. The Assistant Registrar indicated that this was not appropriate but that Ms Melino would be free to convey, herself, such information as she would obtain after her examination of the Court's file.
3. To enable Ms Melino to have appropriate access, she was requested to make contact with my Associate so that access could be arranged in my courtroom under the supervision of my judicial researcher. An appointment was subsequently made and Ms Melino attended to examine the electronic files.
4. She was assisted to access the documents held on the USB thumb drive that was Exhibit A in the proceedings. This access was provided on a computer disconnected from the Court's network system. Ms Melino was assisted by my judicial researcher to the confined extent of enabling her to understand the nature of the documents that were being made available for her inspection, but no information was provided to her, informally, by my researcher, concerning how the trial had been conducted or what had taken place during it. Ms Melino was, however, offered access to an electronic copy of the transcript of the two-day hearing at Ballina Court House and the final day of submissions in Sydney.
5. Ms Melino requested copies of a number of documents from those that were publicly available and these were subsequently provided to her, electronically, by e-mail.
6. During the course of the supervised inspection, Ms Melino indicated that she was unable to attend the scheduled mention on Thursday, 7 September 2017 because of a prior commitment. When I was informed of this, I had her advised, in the e-mail that transmitted the copy documents to her, that if she wished to e-mail any comments to me for my consideration, and the consideration of the legal representatives of the parties, I would make those comments available at the scheduled mention. Ms Melino did provide a response which I provided to the parties' representatives. The response did not seek further action on my part.

The 7 September mention and outcome

1. At the mention, Mr Dunn, solicitor for the Applicants, advised me that the four members of the Melino family, in whose name the proceedings had been commenced, were the four executors of the will of the late Costanzo Melino. He tendered a copy of the sealed order of the Supreme Court which confirmed that this was the position. (Incidentally, this single sheet of paper became Exhibit B, the sole paper exhibit in the proceedings!).
2. I indicated that I considered it prudent to exercise the discretion given to me by s 63(1)(a) of the Civil Procedure Act and amend the terms of the application so that it was made expressly clear that the proceedings were brought by the four nominated members of the Melino family, in their capacity as executors representing the estate rather than as individual claimants. Mr Dunn raised no objection to this course. I therefore ordered that: 1. Pursuant to Section 64(1)(a) of the Civil Procedure Act 2005 that, in lieu of the proceedings being conducted in the name of the four presently nominated applicants as individuals, the proceedings be amended to be conducted by those four named individuals in their capacity as executors of the Estate of the late Costanzo Melino.
3. As Ms Rosa Melino had not been able to attend the mention, I had the Court's Assistant Registrar e-mail her advising her that I had made this order.

The Melino family claims

1. For the purposes of these proceedings, the claims made by the Melino family interests fall to be considered as to whether they are available pursuant to s 55(a), (c), (d) or (f) or not. To the extent that a claim arises for disturbance pursuant to s 55(d), such a claim engages the terms of s 59(1) which sets out the various categories of claim able to be sustained under the heading of "Disturbance". The relevant portion of s 59(1) reads: 59 Loss attributable to disturbance (1) 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 of a qualified valuer reasonably incurred by those persons in connection with the compulsory acquisition of the land (but not fees calculated by reference to the value, as assessed by the valuer, of the land), (c) financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs), (d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired), (e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage), (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.

The Melino family landholding

1. The Melino family has been farming land at Wardell, south of Ballina and on the northern bank of the Richmond River, for at least the past 40 years. Mr Costanzo Melino, the late father of the Applicants in these proceedings, resided on the eastern portion of the Melino landholding until, as a result of his advancing years, he needed to take up residence in a nursing home.
2. I have been informed that when Mr Costanzo Melino died, he left his landholding to be divided amongst his children. His son, Mr Michele Melino (referred to hereafter as Mr Melino), was left the eastern portion of the landholding, whilst the western portion was shared amongst his other children.
3. It will be necessary to consider, later, in some detail, the nature of the overall landholding; the relationship between the eastern and western portions of the landholding; the nature of the land uses of each of the portions of the landholding; and the impact of the route of the new element of the Pacific Highway that has resulted in a strip near the eastern edge of the eastern portion of the landholding being compulsorily acquired for road construction purposes. The nature of the road construction, relative to each of the eastern and western portions of the Melino landholding, is described in more detail later.
4. It will also be necessary to consider the extent to which the future construction of this section of the Pacific Highway upgrade project will injuriously affect the eastern and western portions of the Melino landholding; the extent to which compensation is payable for such injurious affection (both as to extent and as to legal entitlement) and the rate at which such compensation as might be due should be paid.
5. Reproduced as Annexure A to this decision is an A4, marked-up air photo showing both the eastern and western elements of the Melino landholding, post-acquisition.

The severed land

1. A portion of the eastern element of the Melino landholding to the east of the Pacific Highway upgrade project has been severed from the remainder of this element of the Melino landholding by the acquisition. The valuers (Mr Frogley, the expert valuer giving evidence on behalf of the Melinos, and Mr Hamilton, the expert valuer giving evidence on behalf of the RMS) have agreed that this island portion was worth $10,000 per hectare prior to acquisition and $250 per hectare post-acquisition.
2. As the consequence of this agreement, no matters remain to be determined concerning this portion of the eastern element of the Melino landholding.

The site and valuers' sales evidence inspection

1. At the commencement of the hearing, the first day was given over to an inspection of the eastern and western portions of the Melino property and drive-by inspections of some of the sales relied upon by the valuers. Although the valuers had relied upon a broader range of sales for the purposes of their individual expert reports, the inspection did not encompass all of the sites upon which each of them relied.
2. The day commenced at the entrance to the eastern portion of the Melino landholding. As is able to be seen from the marked-up air photo reproduced as Annexure A showing the route of the new Pacific Highway across the eastern portion of the Melino landholding and the extent of the land resumed from the Melino landholding for the purposes of highway construction, the highway will commence to traverse what had been the Melino land virtually at the point where the eastern section of the Melino landholding is entered from Back Channel Road.
3. The new Pacific Highway will be on an elevated structure spanning the river and the access road, some five metres above the access road. The consequence of this is that access to the eastern portion of the Melino landholdings will remain unaffected after the road is completed.
4. We then continued the drive into the eastern portion, stopping briefly at the site of what had been the Melino residence and the associated structures that had been located in its vicinity. These structures supported the Melino farming activities. The house, and these associated structures, had been acquired by the RMS as part of the compulsory acquisition and had subsequently been demolished.
5. From this location, we drove, on the internal roadway, to the location which has been identified by Mr Melino as the site on which he proposes to erect a replacement residence. Mr Melino has had erected a new Colorbond shed a little to the north of the identified new residence site. The shed is used for plant and equipment for Mr Melino's farming activities. It replaces the storage facilities that formed part of the RMS acquired structures demolished post-acquisition.
6. Traversing the property to this house site and shed involved driving across approximately 150 metres of lower-lying land, including land which had cane fields on either side of it. We stopped at approximately the mid-point of this section of roadway to permit Mr Melino to explain the reasons why he considered it was necessary to raise the roadway some 500 millimetres above its present level in order to provide access to the house site (and Colorbond shed noted above) in a fashion that minimised (but did not entirely eliminate) future instances where such access would be impossible as a consequence of the low-lying cane and grazing lands being inundated by flooding after rain events. Mr Melino explained that he had undertaken some preparatory work but more required to be done to meet Ballina Shire Council's (the Council) access requirements (Affidavit of Michele Melino of 4 July 2017). Entitlement to compensation for the past raising of the road, and the intended additional raising of this road, is a matter of contest between the parties, as is the quantum of such compensation (if I was to find such an entitlement arose).
7. We then proceeded to the location at the end of this road, at the south‑western corner of this eastern portion of the landholding, where: 1. Mr Melino has had erected the substantial, new Colorbond farm shed; and 2. there is, nearby, a slightly more elevated house site on a grassy knoll overlooking the Richmond River and separated from the river by a thin wetland strip.
8. The claim for compensation to provide for the construction of this proposed dwelling, and all the ancillary and associated costs that would go with that (provision of a power supply to the proposed dwelling, for example), is in contest between the parties, as is, if there was any entitlement to such compensation, the quantum of that compensation. A similar dispute arises concerning the cost of the Colorbond shed.
9. During our return to the point where the now-demolished dwelling had been located, we stopped at a set of substantial, new, modular steel cattle yards that had been erected on the higher ground at the eastern end of the earlier-described, less elevated roadway across the flatland of this portion of the Melino landholding. An issue concerning the cost of these cattle yards (ones which replaced cattle yards that had been located near the former house but which had also been demolished) is also the subject of a dispute as to entitlement to, and quantum of, compensation.
10. From this location, we drove along a rough bush track toward the north‑western corner of this portion of the Melino landholding. From the point where this track became impassable for our minibus (being, in essence, at the north-western corner of the cleared land on this element of the landholding), we walked some hundreds of metres up a road (of what might be described as good fire-trail standard), through the bush toward the western portion of the Melino landholding.
11. We walked along this track until we reached the boundary of the eastern portion of the Melino landholding where it abuts a landholding described as Lot 96, Deposited Plan 755691, owned by a Mr Rigby. The Melinos have had, for several years, a "grace and favour gentleman's agreement" with Mr Rigby that has permitted the Melinos to use the continuation of this road as it traversed what is now Mr Rigby's landholding to link the eastern and western portions of the Melino landholding. This has facilitated the movement of cattle between the two elements of the landholding and to provide (at least) four-wheel-drive access between the two elements of the landholding. The distance required to be traversed across Mr Rigby's landholding for this purpose is some 250 - 270 metres. There are two observations to be made concerning this: 1. First, without this permission to traverse the 250 - 270 metres of track through the bush, it would be necessary to drive some eight kilometres along public roads to move between the eastern and western portions of the Melino landholding; and 2. There is an unmade (and not presently usable), dogleg-shaped "paper road" running to the north from the north-western corner of the eastern portion of the Melino landholding and turning to the west, at right angles, in a fashion that continued up to, and then between, elements of the western portion of the Melino landholding toward its southern end.
12. As an aspect of the injurious affection claim made by the Melinos concerning the impact of the new highway on the western portion of the Melino landholding, how this connecting, informal access is to be regarded for the purposes of satisfying a statutory test mandated by the Just Terms Act requires later, detailed consideration.
13. It was Mr Melino's evidence that, although the "paper road" was now unable to be traversed, it had, prior to storm damage several years ago, been able to be used to transit between the two elements of the Melino landholding. Portion of a marked air photo tendered for the RMS is reproduced below (not to any particular scale), showing the relevant boundaries of the Melino landholdings (in blue); a general depiction of the alignment of the track through Mr Rigby's landholding (shown in yellow); and the alignment of the "paper road" (shown in pink):
14. After returning to our minibus, we drove the over eight kilometres to access the western portion of the Melino landholding.
15. After our arrival at the western portion of the Melino landholding, we walked up a slope to the top of a ridgeline to a point approximately in the middle of the east-west dimension of this landholding and at approximately the "paper road" dividing Lot 38 in Deposited Plan 755691 (this being the most northern element of the western portion of the Melino landholding) and Lot 1 in Deposited Plan 523854 immediately to the south of Lot 38 and separated from it by this "paper road". At this point, a power line traverses the western portion of the Melino landholding, running in a north-south alignment, providing a ready power supply to any dwelling which might be erected in the vicinity of where we stood atop the ridgeline.
16. It is not contested that, to permit the construction of a dwelling at some future time, Lot 1 and Lot 38 would need to be consolidated in order to provide a landholding of sufficient area to satisfy the minimum allotment size required by the Council under the Ballina Local Environmental Plan 2012 (the BLEP 2012) necessary to attract such an entitlement. As part of the dispute between the Melinos and the RMS concerning the claim for compensation for what is said to be the injurious affection to the western portion of the Melino landholding, Mr Frogley and Mr Hamilton were in dispute as to the extent to which there might be injurious affection to Lots 1 and 38 and, if there was such injurious affection, what diminution of value should be found to have been occasioned to each of these two allotments.
17. After leaving the western portion of the Melino landholding, we then undertook drive-by inspections of eight properties relied upon by Mr Frogley and/or Mr Hamilton for comparative purposes to demonstrate what each of them said provides a foundation for his conclusion as to the percentage reduction in value to be applied (whether in whole or in part, also being in dispute) to the western portion of the Melino landholding. Given my conclusion as to the unavailability at law (and as a matter of fact) of a claim for injurious affection for the northern portion of the western element of the Melino landholding, it is unnecessary to set out any detail concerning these inspected sites.

The hearing

1. After the full day's inspection, a two-day hearing of the evidence in the proceedings was held at Ballina Court House. On the day after the completion of the hearings in Ballina, closing submissions were heard in Sydney.
2. During the course of the Ballina hearings, evidence was given on behalf of the Melino family by:

• Mr Melino (who also provided three affidavits read in the proceedings); and
• Mr Neale Frogley, an expert valuer.

1. Evidence was given for the RMS by:

• Mr Laurie Hamilton, an expert valuer; and
• Mr Tony Makin, an expert quantity surveyor.

1. Each of the expert witnesses provided written evidence by one or more written reports, whilst Mr Frogley and Mr Hamilton had conferred and produced a joint expert report.

Introduction

1. Injurious affection arises when an owner of land's ability to exercise the right of quiet enjoyment to their property is adversely impacted by the carrying out, in the context of the Just Terms Act, a "public purpose", and where the "public purpose" has necessitated the acquisition of part of the landowner's holding. In these circumstances, the Just Terms Act creates a statutory right to compensation for the injurious affection contained in s 55(f), a provision which reads: (f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.
2. In these proceedings, the claim is made for compensation for injurious affection of both the eastern and western portions of the Melino landholding.
3. The RMS concedes that there is compensable injurious affection to the eastern portion of the Melino landholding (although there are differences concerning how the injurious affection impact falls and, consequently, how compensation for it should be calculated).
4. Such a concession is not made by the RMS with respect to the western portion of the Melino landholding. The RMS resists the claim for compensation for injurious affection for the entirety of the western element on two bases.
5. First, the RMS says that, as a matter of proper interpretation of the relevant provision of the Just Terms Act, there can be no entitlement to compensation for injurious affection for this land, even if injurious affection was to be established as occurring for any portion of that land.
6. Second, the RMS says that, even if the statute does permit a claim for injurious affection to this portion of the Melino landholding, there has, as a matter of fact, been no such injurious affection and, therefore, questions of calculation and awarding of compensation do not arise as a practical matter.

Introduction

1. Although, initially, Mr Frogley and Mr Hamilton did not agree as to what should be regarded as the highest and best use of the eastern portion of the Melino landholding, by the end of the oral evidence Mr Frogley had agreed with Mr Hamilton's characterisation that the highest and best use of this portion of the landholding was one which had a number of facets and, as a consequence, the overall highest and best use of this land was one which incorporated differing uses (as at the date of acquisition) across varying portions of the land. In summary, these components of the overall mixed use can be described as: 1. The cane fields (being an area of approximately 40 hectares in size and of a generally triangular shape with the apex of the triangle being toward the north-western corner of the eastern landholding); 2. The grazing lands which comprise the remainder of the cleared lands on this portion of the eastern element of the Melino landholding. The grazing lands incorporate the grassy knoll at the south-western corner of this element of the Melino landholding, with this being the location of the identified site for the proposed new dwelling; 3. The woodland area along the north-eastern boundary of this portion of the Melino landholding, being an element of the landholding which is contiguous with the boundary of the land acquired by the RMS, together with a small woodland element at the north-western corner of this element of the Melino landholding; and 4. Wetland areas to the west of the cane fields (the predominant wetland area) and a smaller patch of wetlands along the southern boundary of this element of the Melino landholding and adjacent to the Richmond River.
2. Mr Hamilton and Mr Frogley agree that it is appropriate to aggregate the grazing lands and the woodland areas under the general descriptor as constituting "lifestyle lands"; they agree that the cane fields and the wetlands should be regarded as the second and third categories of use, which, together with the "lifestyle lands", constitute the mix giving rise to the highest and best use, overall, of the eastern element of the Melino landholding.
3. In this context, it is not necessary to deal with the fact that, pre-acquisition, the house on this element of the Melino landholding was tenanted. This is dealt with later.
4. The overall area of the eastern element of the Melino landholding, in the before, is approximately 108 hectares. I have earlier observed that the cane fields comprise approximately 40 hectares. Mr Hamilton and Mr Frogley agree, in the before, that the "lifestyle lands" comprise approximately 50 hectares and the remainder, 18 hectares, comprise the wetlands. In the after, Mr Hamilton and Mr Frogley agree that the cane fields and wetlands remain approximately the same, whilst the remaining "lifestyle lands" comprise approximately 35 hectares.

Injurious affection and the "lifestyle lands"

1. Mr Hamilton and Mr Frogley agree that it is appropriate to apply a 35% reduction in the value of the "lifestyle lands" to reflect the diminution in amenity that will arise as a consequence of the visual prominence of the new elevated roadway and river crossing, when coupled with what will be the acoustic impact of the significant daily volumes of traffic that will pass along this roadway. They also agree on the initial rate per hectare, pre-acquisition, as the value of this land and, hence, agree on the reduction in value resulting, finally, in agreement as to the compensation for injurious affection arising from the impact on the "lifestyle lands".

Injurious affection of the cane fields

1. Mr Hamilton and Mr Frogley agree on the pre-acquisition value per hectare of the cane fields. They do not, however, agree about whether or not this land will suffer injurious affection as a consequence of the construction of the new highway.
2. Mr Frogley's position is a simple one, namely, that the injurious affection falls evenly across the whole of the eastern element of the Melino landholding and that a uniform 35% reduction in value should be applied to the derived value for each category of land within this element of the Melino landholding.
3. Mr Hamilton does not accept this proposition. Although, as earlier noted, Mr Hamilton and Mr Frogley agree to the rate per hectare to be applied to the cane fields, Mr Hamilton says that there is no injurious affection to this land, and therefore no compensation arises with respect to it.
4. Before turning to consider what is the appropriate resolution of this dispute, it is to be observed that neither Mr Frogley, nor Mr Hamilton, was able to find any sales of cane fields where those cane fields were located in proximity to the Pacific Highway upgrade project. There is, therefore, no comparative sales' evidence available to be considered between such impacted land and cane fields sold where there was no such potential for impact.
5. Mr Hamilton set out, in his statement of evidence, his analysis of the sales of five properties that were either fully developed for the production of sugarcane, or were sufficiently given over to that purpose, that their value should be regarded as being derived from cane-growing as the highest and best use being for that purpose. Mr Hamilton analysed each of these sales for the purposes of deriving the value that he ascribed to the cane fields' portion of the eastern element of the Melino landholding. In his analysis, he made adjustments, as is conventionally the case for professional valuers exercising their skills.
6. The headings pursuant to which Mr Hamilton made adjustments (with the adjustments varying between the sales being analysed) were for market movement, area, location, and shape and topography. With respect to his adjustments for location, these were based on the distance of each of the sale properties from Ballina as its relevant significant centre of population and services. He explained that this adjustment reflected the fact that a person farming the cane might choose to live in Ballina and travel to and from the land farmed for sugarcane. Adjustments for market movement and area do not assist in addressing the issue of injurious affection. For these latter adjustments, questions of amenity or ambience of the cane fields do not arise.
7. However, the shape and topography adjustments that Mr Hamilton made were ones that related to such aspects of the cane fields, such as proximity to the river; views across the river to Pimlico Island (this, apparently, being regarded locally as a desirable aspect of an outlook); and proximity to the ocean.
8. With respect to these elements of Mr Hamilton's adjustments, Mr Hemmings SC for the Applicants rhetorically put it that "the cane doesn't care about views and outlook" (or indeed, proximity to a road such as the Pacific Highway upgrade project).
9. I am satisfied that such aspects arise from an anthropocentric appreciation of the attributes of the land. They, in the absence of any impacted dwelling, clearly arise out of how those attributes contribute positively to the experience of those farming those cane fields when they attend and work the land for the purpose of sugarcane-growing. Although Mr Hamilton was not prepared to concede the truth of this proposition, it is an inevitable conclusion to be reached when there is no other rational explanation as to why there should be an incorporated element of the value of those lands, a variable element, that arises from what can only be seen as the visual ambience of, and from, those lands.
10. The consequence of this conclusion is that it must also necessarily follow that, when that broader ambience for those who farm cane fields is diminished by some adverse impact (injurious affection) on that ambience, that would be reflected in an adverse impact on the value of that land. If that conclusion is to be drawn (and I am satisfied that it must), then that conclusion must equally be drawn with respect to the cane fields' portion on the eastern element of the Melino landholding being adversely impacted by the Pacific Highway upgrade project.
11. The conclusion that the Pacific Highway upgrade project must have an adverse impact on the cane fields (such a conclusion being reinforced by the fact that there is accepted by Mr Hamilton of the existence of such injurious affection on land on each side of these cane fields) does not automatically mean that this mandates the adoption of the same percentage diminution of value of the cane fields as has been agreed by Mr Hamilton and Mr Frogley to be appropriate to be applied to the "lifestyle lands".
12. This is an area where I, as the judicial valuer, am obliged to do as best I can with such limited evidence as I might have to assist me on this point. In considering this, I have no evidence concerning (nor do I have any "life knowledge" of) cane-farming. However, it was evident from both the established cane fields on the Melino landholding, and the established cane fields we observed during portion of the other site inspection elements, that whenever a cane crop was substantively established on the cane fields, it would be highly unlikely that the owner of the land would be strolling through the dense growth of the cane fields in order to enjoy such ambience as might be suggested should be derived from such an experience.
13. As we also observed during the course of other elements of the inspection, when cane-harvesting activities could be seen being undertaken, there is quite an intensive human presence on the cane fields after it has been prepared for harvesting and harvesting has commenced. During this period, it is reasonable to assume that the sugarcane farmer, and those assisting her or him in the harvesting activities, would partake of enjoyment of the ambience of that sugarcane land for such period as those activities were being undertaken.
14. I have no evidence or knowledge as to the extent of the subsequent human activities, post-harvest, that are necessary for land preparation for the establishment of the next cropping cycle for such land (nor, whether such cropping cycle is annual or at some other greater or lesser frequency). However, it seems to me to be reasonable under the circumstances to conclude that there must necessarily be at least some ancillary farming activities required to be undertaken after harvest for the preparation of the land for the next crop (or, if the land is to be taken out of production for rotation purposes and put to legume for soil replenishment purposes, as seemed to be the case of several cane fields we passed during the inspection). It follows that there would be human activity in those cane fields, to some extent, for such purposes.
15. Whilst that which I have set out above is the limit of the basis upon which I can make a judicial valuer's assessment of the extent of the injurious affection on the cane fields, it seems to me that it must necessarily be less extensive as a diminution of value than arises from what Mr Hamilton and Mr Frogley have agreed should be regarded as the "lifestyle lands". The "lifestyle lands" can, in general terms, be enjoyed throughout the year, contrary to the position with the cane fields.
16. It would seem to me likely that the practical restriction on the quiet enjoyment of the cane fields in the same fashion, as would be the position for the "lifestyle lands", would occur for, perhaps, a little less than half of each year. As a consequence, doing the best I can on the scant information available to me to make some passingly informed assessment of the injurious affection impact on the cane fields, I have concluded that (taking a Sydney Water Corporation v Caruso [2009] NSWCA 391 (Caruso)) approach to adopting the more favourable position to the dispossessed owner when there are rationally available alternative conclusions), the cane fields will suffer a 17.5% reduction in value (being half the rate for the "lifestyle lands") as a consequence of injurious affection occasioned by the Pacific Highway upgrade project. This percentage should be applied to the agreed per hectare value to the 40 hectares identified as cane fields to derive an amount of injurious affection compensation for this portion of the eastern element of the Melino landholding.

Injurious affection and the wetlands

1. Mr Frogley and Mr Hamilton agree that there are approximately 18 hectares of wetlands in the eastern element of the Melino landholding. They also agree that the unaffected land value of the wetlands was $5,000 per hectare before the acquisition by the RMS and the future impact of the Pacific Highway upgrade project.
2. Mr Frogley, as earlier noted, proposes that there should be a uniform application of an injurious affection factor of 35% across the whole of the eastern element of the Melino landholding. I have explained, in the above section dealing with the sugarcane land, why I consider that this approach is inappropriate and simplistic.
3. At the commencement of this chapter dealing with injurious affection, I set out how I understood this concept was derived with respect to the quiet enjoyment of the land that was available (without the impact of the Pacific Highway upgrade project) and how the ability to enjoy the land would be adversely impacted by the carrying out of that Pacific Highway upgrade project. This has led me, for the reasons explained, to derive a differential injurious affection value for the sugarcane land but, nonetheless, to derive a value for such an impact, despite Mr Hamilton's view that no such impact arises.
4. The wetlands are, as I understand the evidence, mangrove wetlands and are places where it is unlikely that they will be subject to regular (if any) visitation by occupiers of this portion of the Melino landholding or by the occupiers' guests.
5. From the limited view I had of them when looking to the south-east from the identified new prospective home site, they did not appear to provide opportunities for casual strolling to enjoy the ambience of this element of the Melino landholding (whether before or after the carrying out of the Pacific Highway upgrade project). Under these circumstances, where Mr Frogley has provided no express justification for why such an injurious affection impact should be found to fall upon the wetland area (with those making such a claim having a persuasive burden to establish a proper basis for meeting that claim), I am unable to find any satisfactory basis upon which I could conclude that there is any injurious affection of the wetlands areas.

Conclusion concerning the eastern element of the Melino landholding

1. It therefore follows that, in summary, compensation is due to the Melinos on the basis of a 35% diminution of the agreed value of the "lifestyle lands"; compensation at the rate of 17.5% diminution of the agreed value of the sugarcane land; and no compensation for injurious affection arising in respect to the wetlands forming part of the eastern element of the Melino landholding.

The Just Terms Act and the western element injurious affection claim

The statutory test

1. I have earlier set out the terms of s 55 of the Just Terms Act, the provision that establishes the six broad headings under which compensation may arise when a public authority compulsorily acquires land to carry out a public purpose. Relevant to this aspect of the Melino family claim is s 55(f) which defines the circumstances under which a claim for injurious affection of land remaining in the ownership of a dispossessed party can be made. It is appropriate to repeat the provision as it imposes a statutory test which requires to be considered in these circumstances. Only if the test is satisfied with respect to the western element of the Melino landholding can the claim for injurious affection compensation be sustained. The provision reads: 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): (f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.
2. Relevantly, in the first instance, that which requires to be considered is whether or not the western element of the Melino landholding satisfies the requirement that it "adjoins" the eastern element of the Melino landholding. The claim for injurious affection for the western element of the Melino landholding can only succeed if this element does "adjoin" the eastern element on a proper understanding of the use of the word "adjoins" in s 55(f).

The relevant geography

1. The air photo in Annexure A shows two aspects (one being uncontroversial) relevant to consideration of the meaning of the word "adjoins" in this statutory and geographic context.
2. First, it can be seen that the western element of the Melino landholding is fragmented. In land title terms at the date of acquisition, it comprises three allotments. These are: 1. Lot 38 in DP 755691; 2. Lot 1 in DP 523854; and 3. Lot 2 in DP 523854.
3. As can be seen, Lot 38 is separated from Lot 1 by a paper road. Lot 1 has a common boundary with one of the portions of Lot 2. Lot 2, itself, is internally fragmented, with the fragments separated by either paper roads or, as the most northern of the divisors of Lot 2, the constructed public road known as Old Bagotville Road.
4. For the purposes of considering s 55(f) of the Just Terms Act, the RMS concedes that each of the portions of the western element of the Melino landholding "adjoins" another, relevant element of this landholding so that, for the purpose of the statutory test, the whole of the western element of the Melino landholding can be treated as a unitary whole for the purposes of this statutory provision.

The status within the western element of the Melino landholding

1. Although the decision of the Court of Appeal, in Hornsby Shire Council v Malcolm (1986) 60 LGRA 429 (Hornsby), concerning the meaning of the word "adjoins" was made in the context of interpreting a State Environmental Planning Policy (being an environmental planning instrument) made under the Environmental Planning and Assessment Act 1979, the Court of Appeal's determination was that land in one land use zone could adjoin land in another, different land use zone in circumstances where the two parcels of land are separated by only a public road. It is clear from a reading of the judgments in Hornsby that the reasoning would, in my assessment, inevitably be applied in these analogous circumstances to the western element of the Melino landholding leading to its treatment as a unitary whole for these purposes. The concession by the RMS on this aspect is, self-evidently, both proper and pragmatic.

RMS and the relationship between the two elements of the Melino landholding

1. However, the position as to whether the western element of the Melino landholding, taken as a whole, "adjoins" the eastern element of the Melino landholding is not conceded by the RMS. It therefore falls to me to determine, in this factual context, whether the western element "adjoins" the eastern element, thus triggering the need for an assessment of the compensable extent (if any) of injurious affection to the western element of the Melino landholding as a consequence of the Pacific Highway upgrade project.
2. There are two connections between the two elements of the Melino landholding. I have earlier set out, at [34] to [36], a brief description relevant to this issue and inserted an extract of a marked-up air photo illustrating that explanation. It is unnecessary to repeat that material.

The connection between the two elements of the Melino landholding

1. It is clear that the eastern element of the Melino landholding is connected to the western element, in a legal sense, by the dogleg-shaped paper road shown on the air photo, marked in pink at [36]. It is also the fact that, for practical farm management purposes, there is also the functional connection along the grace-and-favour track across Lot 97 in Deposited Plan 755691 owned by Mr Rigby, marked in yellow at [36]. The distance of the connection along the paper road is some 330 - 350 metres, measured along its mid-point, whilst the distance along the functional access track is approximately 250 - 270 metres.
2. It is in this context that it is necessary to consider whether or not, in this statutory test context, the western element of the Melino landholding "adjoins" the eastern element.

Statutory and dictionary resources

1. First, it is to be observed that the Just Terms Act, itself, provides no assistance. The word "adjoins" is used in s 55(f) but is not elsewhere defined, nor is it repeated elsewhere in the statute.
2. It is appropriate to have cautious regard to dictionary definitions of the word (the need for caution being explained, recently, by Basten JA in Hunter's Hill Council v Minister for Local Government; Lane Cove Council v Minister for Local Government; Mosman Municipal Council v Minister for Local Government; North Sydney Council v Minister for Local Government; Strathfield Municipal Council v Minister for Local Government [2017] NSWCA 188 at [77] - [78]): 77. … Resort to dictionaries to determine the meaning of a word used in a legal context is rarely favoured. Such judicial disfavour is not a result of some dismissive or precious attitude towards the compilers of dictionaries. The point is rather that dictionaries reflect common usage and common usage may not be reflected in a particular statutory context. Thus, it used to be said that the ordinary meaning of a word, other than a technical term, is a question of fact, whereas the construction of the statutory provision in which the word is found is a question of law. Since Collector of Customs v Agfa-Gevaert Ltd that distinction is no longer applied. As explained by Lord Hoffmann in R v Brown, referred to in Agfa-Gevaert: "The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole." 78. That is not to say that dictionaries may not be helpful, or are not used, although they are rarely referred to in judgments. Their function is, however, limited.
3. I turn, first, to reproduce the definition from the Macquarie Dictionary (that being the preferred dictionary source. This definition of "adjoin" reads: verb (t) 1. to be in connection or contact with; abut on: her house adjoins the lake. -verb (i) 2. to lie or be next, or in contact: the two houses adjoin.
4. Second, I turn to the Oxford English Dictionary to reproduce its definition of "adjoin". This definition is in the following terms: 2. a. trans. To be located next to or very near (a thing, place, or person); to be adjacent or contiguous to; (also) to be physically joined, attached, or connected to. b. intr. To be located next to or very near a specified or implied location; to be adjacent or contiguous. Sometimes: spec. to share a common border.
5. As can be seen from these two definitions, it is possible for two parcels of land to adjoin without abutting or being contiguous (in the sense that contiguity was recently explained in North Sydney by Basten JA between [60] and [106]). However, these dictionary definitions provide little assistance in the present context as to what distance might permissibly separate two parcels of land so that the relationship between them might be such that each should be regarded as continuing to adjoin the other.
6. I have, therefore, turned to the library on the website of Parliamentary Counsel for New South Wales to see what might be found elsewhere in the statutory lexicon of this state. There are 27 enactments in the "in force" collection which use the word "adjoins". An examination of them shows that the word is used in a variety of fashions, with some having the necessary contextual implication that "adjoins" means "abutting" or "contiguous", whilst others evince a more flexible (but not always precisely defined) meaning should be taken to the word's use. Taken overall, there is no thematically consistent pattern, either from the nature of the legislation or the drafting era in which it was prepared by Parliamentary Counsel.
7. Next, I have turned to search the same library for the word "adjoining" to see whether, for the present purposes, the use of this expression in statutory drafting in this State could provide some assistance. There are 70 statutes currently in force which use this word; however, an examination of the context of its use in each instance shows that, across these statutes, the same range from precision to flexibility also exists. As a consequence, the use of "adjoining" can also provide no broad contextual assistance.
8. A list of the Acts in each category explored is set out in Appendix B.
9. I should observe, finally, that I have examined the Hansard transcript of the Second Reading Speeches on the introduction of the first version of this proposed legislation - being the Land Acquisition (Just Terms Compensation) Bill 1991. This legislation was introduced on 11 April 1991 by the (then) Deputy Premier, the Hon W J T Murray MP (Second Reading speech - Hansard, pages 1974 to 1979) and there is no mention of the relevant provision or the concept of "adjoining" in that transcript.
10. After the 1991 state election, the Bill was reintroduced as the Land Acquisition (Just Terms Compensation) Bill (No 2) 1991 on 2 July 1991 (Hansard, page 84). The Bill was reintroduced by Mr Murray, with a shorter Second Reading Speech explaining some minor drafting tweaking which had been made during the intervening period. This Second Reading Speech also makes no mention of the provision here being considered.
11. For completeness, although s 55 of the Just Terms Act was amended in 2016 by Sch 1[14] of the Land Acquisition (Just Terms Compensation) Amendment Act 2016, this amendment did not relate to s 55(f) of the Just Terms Act.

The parties' submissions

1. Having undertaken this research to no practical utility, it is now appropriate to turn to the submissions made on behalf of the Melino family and on behalf of the RMS on this point.
2. The written submissions on behalf of the Melinos on this point were in the following terms (excluding footnotes): The Adjoining Land 40. An entitlement to compensation arises under s 55(f) only if there is, relevantly, a decrease in value of other land of the dispossessed that "adjoins" the acquired land. 41. As the Applicants now understand the Respondent's position, this is to be approached either simply as a question of fact or, alternatively as a question of law to which the facts are then to be applied. 42. Dealing with the first proposition. The Respondent correctly, it is submitted, concedes that separation by a paper road does not result in the land not relevantly "adjoining". As a result, the whole of the Western Sector is treated as one adjoining parcel of land for the purposes of s 55(f). Similarly, the Respondent's acceptance of an injurious affect across the whole of the Eastern Sector, notwithstanding interventions of paper roads and cadastral boundaries, again demonstrates an acceptance that legal separation is irrelevant. 43. As a result, and considered simply on its facts, and applying that approach the East and West Sector relevantly adjoin. They are separated by the paper road. That paper road does not sever that link. 44. Next, it is relevant - as a matter of law- to consider the correct approach to the use of the word "adjoin" in s 55(f). The term is not defined and, according to the Applicants' research, has not been considered in the s 55(f) context. 45. In order to consider the meaning of the word it is appropriate therefore to consider the word both in its context and also having regard to the scope object and purpose of the Act. 46. Dealing firstly with its context. The language used is not "directly adjoins". The Applicant notes that such a distinction in relation to similar language is identified by Preston CJ in Kiama. In the absence of the requirement for land to directly adjoin, or to be immediately adjoining, the Court of Appeal's approach in Hornsby v Malcolm that the language of the section identifies the sufficient proximity if the two relevant parcels of land are "near to", "insufficient proximity to" or "neighbouring on" each other is apposite. 47. Such an approach is also consistent with the scope object and purpose of the Act. The purpose of s 55(f) is to broaden the reach of the compensation provisions. It is a beneficial provision. As a result, and applying ordinary principles of statutory interpretation, that beneficial provision should be given the broadest meaning its words can bear. 48. Although dealt with in more detail below, accepting for the purposes of this submission that the Western Sector of the farm is injuriously affected, in circumstances where that farm has been operated as a single unit it is entirely consistent with the scope object and purpose of the Just Terms Act to allow for a decrease in value of that land. 49. Turning then to the specific facts: • the East and West Sector have been operated as a single farm for many years; • the East and West Sector are legally connected by the (unformed paper) road; • practical physical access has been available between the two sectors of the farm for many years and according to Mr Melina's evidence at all times they have owned the farm and indeed through successive owners of the intervening property. 50. Of course, fine questions may arise as to when - as a question of fact - two sectors of a farm may no longer "adjoin" notwithstanding a lawful connection (road), a physical connection and a combined operation. The Court would be satisfied, in the circumstances of this case, that the land relevantly "adjoins".
3. Mr Hemmings' oral closing submissions dealing with this were (Transcript 27 July 2017, page 118, line 35 to page 121, line 40): HEMMINGS: … We then turn to the western sector and of course the first thing to deal with is the question of adjoining. Could you please, the Court of Appeal decision in Hornsby v Malcolm which is 60 LGRA 429? While that's being brought up, we deal with this in two ways, starting at our para 42, because of the concession made, and in answer to your Honour's question and with respect it's a concession properly made, and that is when your Honour was asking about the western sector made up of a number of parcels of land separated by paper roads, whether they be treated as relevantly adjoining for the purpose of 59(f) or not, it's a concession that they do adjoin, concession properly made. If your Honour looks at the eastern sector, and again we know in the eastern sector there are paper roads, there are cadastral boundaries, and there is no suggestion that the separation by cadastral boundaries, so different lots, different legal lots, doesn't mean that the land does not adjoin. There's some further discussion I can have before we go to the text of the judgement. On the basis of those concessions we say that your Honour is able in fact to deal with the matter purely as a question of fact applying the same approach that the respondents have taken before one even needs descending to the question of law as to the correct interpretation of the meaning of adjoined for the purposes of 55(f), and that's because this land is connected by the paper road, that in and of itself in our submission‑‑ HIS HONOUR: Hornsby v Malcolm doesn't deal with connection; it deals with proximity. Two sides of the same road. HEMMINGS: Yes, so I'm not dealing with the Hornsby v Malcolm approach yet; at the moment I'm just dealing with the concession as made as to how the Court would approach it. I'll try and deal with‑‑ HIS HONOUR: I understand that but I'm saying the concession was made in terms of the plan that was, the marked up air photo that was on the board, on the basis that, for example, Lot 38 and Lot 1 were separated by a paper road, presumably you know one chain wide or whatever it happens to be, but it is a separate, the question there is separation by the road, not linkage by the paper road. And as I understand it the concession is not made about linkage, it is made, and properly made, based on Hornsby Shire v Malcolm, about the opposite sides of the same separating road corridor, I think is the way I would describe it. And I don't understand, I'll be corrected if I'm wrong, but I don't understand that the concept of connection by a road is conceded. HEMMINGS: Yes. PRITCHARD: That's correct. HEMMINGS: If your Honour goes in Hornsby v Malcolm to p 433. HIS HONOUR: Yes I'm there. HEMMINGS: Where the discussion by..(not transcribable)..of the word "adjoins" starts in the second paragraph dealing with the facts. "No contest but…upon the context". Over the page at 434 about half way through the second paragraph, "Words in the…physical contiguity nowadays" - and this is 1986 - "that idea tends…immediate physical proximity," and then, ultimately, on the facts in that case, at the end of the next paragraph - and there is still a sufficient close proximity in the facts of the present case - to uphold the conclusion that the proposed development adjoined urban land. Then your Honour moves over to p 443 and we're now in the decision of Glass J and in 1986 it definitely wasn't me that was arguing it, "Mr Hemmings argued for…is contiguous with," referring to doing a textual analysis of the EP&A Act. "In my opinion…sense is not," and found no error of law in Bignold J's approach. Your Honour's detailed analysis that you have carried out in the Hunters Hill decision focusing more on the question of contiguity than the adjoining, your Honour has the extracts from Hornsby v Malcolm. Your Honour has been through the historical analysis of Auckland v Lye, Hornsby v Malcolm and the Chief Judge's decision in ACN. What we do see relevantly in the progression of cases - and in Preston J's decision in ACN his Honour usefully summarises a series of cases, useful because it shows the factual scenarios in which land has been held to adjoin even though it was not contiguous or coterminous or immediately adjoining, but what his Honour does do is we see from 1986 when the Court of Appeal was talking about the language then, by 2006 his Honour in ACN is still satisfied that there are two different ways in which the word "adjoins" is used in our language. So we look to the context to see if it needs to be immediately adjoining or if it is the less direction connection and, in our submission, the Court comes forward to 2017 and there's no relevant change in the usage of the word "adjoins", and so the Court would start on an approach to the interpretation of 55(f), unless there's something otherwise to suggest would start with an approach, that the use of the word "adjoins" is to be contrasted with the potential use, a parliamentary draftsperson must surely have known, of the possibility of identifying the need for the immediate adjoining, the immediate connection, rather than the looser description accepted by the authorities. As we say at 46, the language is not "directly adjoins" and we've given your Honour the reference to what we've cited as Kiama - just because it's easier than trying to say the ACN 115 840 509 - decision, the reference to the Court of Appeal authority, and there's a typographical error in the bottom of 46. "There are three different"-- HIS HONOUR: There should be a space, yes; I understood. HEMMINGS: "There are three different tests which were used." We talk about near to, we talk about neighbouring on and we talk about in sufficient proximity. It might be my friend would say the proximity is insufficient. But those are different expressions the Court has used in order to describe the meaning of "adjoin", where "adjoin" is used in a context where the Court was otherwise satisfied it was to be different from "immediately adjoin" and, in our submission, that would be an appropriate that the Court would apply. The second relevant matter to consider, of course, is the scope, object and purpose of the legislation, how the word is used and why. Of course, the Just Terms Act is concerned with the payment of compensation for land that is taken, and that's what the market value claim does. 55(f) is a beneficial provision and it's beneficial and facultative. It broadens the reach of the compensation claim beyond just the land that the acquiring authority has purchased but also to land that is affected. Because it is, therefore, a beneficial provision, applying ordinary statutory principles the Court gives the words the broadest meaning that they can bear. There's many different descriptions of that task of interpretation but that's one that we've pulled out of DEM, to give the beneficial provision the broadest meaning its words can bear. The other thing we have not said there but we've said it throughout these submissions otherwise is, of course, the constant reminder that we get from the High Court from Gaudron J out of Marshall that, because these are provisions that are affecting proprietary rights, we do not read in limitations that are not in the text. And we have an approach taken by the Court of Appeal already that tells us in our language there is a difference between "adjoins" and "immediately adjoins" to take an approach to the requirement of "adjoins" to read it as if it is "immediately adjoins" is, in our submission, inconsistent with the interpretative task but is inconsistent with the High Court's approach, because it is, in fact, reading an additional limitation into the language which does not appear in the words and so falls foul of Marshall. The Court, on our submission, would not be looking for the direct connection. Rather, the Court would be looking now as a question of fact to determine whether, for the purposes of an award of compensation to the owner of land than does relevantly adjoin. Turning then to the facts, there is no doubt that the east and west sector of the farm has been operated as a single farm for many, many years. I say that in para 49 and your Honour has got transcript and footnote and evidence references; I don't need to take your Honour to them. It has been operated as a single farm for many years. They are legally connected and so are legally able to operate as that single unit and they are both legally connected and practically, physically connected, whether it's a gentlemen's agreement or otherwise, however one wants to describe it, because of the physical access which has been used out of convenience rather than the legal access between the two, and that's a connection, the physical access, that's been in place the entire time the Melino family has been operating the farm as a single farm and, indeed, as Mr Melino tells us, even through the successive ownership of the intervening property between the two. As we note at para 55, this being now a question of fact, we accept that there is a line, obviously, that needs to be drawn somewhere for the purposes of now the Just Terms Act where the beneficial operation of this section is to afford compensation for the diminution in value of adjoining land owned by the person who has had some land taken, but there will be a point at which they become too separated for that purpose, but in this case, where you've got a single operation with a physical connection and a lawful connection, in our submission, the Court would be satisfied that, for the purposes of 55(f), the land relevantly adjoins.
4. Contrary to this position, the written submissions for the RMS on this point were in the following terms (excluding footnotes): B. ISSUE 2: INJURIOUS AFFECTION FOR NON-CONTIGUOUS PARCEL 70. The applicants also claim for the loss of value, under s 55(f), for the non-contiguous parcel of land at 428 Old Bagotville Road, Wardell, the Old Bagotville Road property. The respondent is not aware of such claim having been previously made, under s 55(f), by a dispossessed landowner in relation to non-contiguous parcels of land. 71. The issue is whether the Old Bagotville Rd holding is, for the purposes of s 55(f), "any other land of the person at the date of acquisition which adjoins … the acquired land … ". 72. This raises questions of statutory construction, as well as questions of fact. 73. The evidence in relation to the relationship between the parcel of land at 428 Bagotville Road and the Back Channel Road property is as follows: (a) at the date of acquisition, there was a distance of about 350 metres between the northwestern corner of the Back Channel Road property (Lot 88 in DP 755691) and the closest boundary of the Old Bagotville property (Lot 2 in DP 5238354) (the two Melino properties) (Frogley, CB 407); (b) the two Melino properties were separated by two intervening parcels of land in different ownership: (i) to the north of Lot 88 - Lot 96 in DP755691 (Lot 96); and (ii) to the east of Lot 88 - Lot 97 in DP755691which was at the date of acquisition in the separate ownership of a Mr Rigby (Lot 97)(Frogley CB 407); (c) at the date of acquisition, there was an unformed road reserve along the boundary between Lots 96 and 97 which "connected" the two Melino properties (Frogley CB 407); (d) some time prior to the date of acquisition, the unformed road reserve suffered flood damage, and access between the two Melino properties was by way of a four-wheel track not situated within the road reserve, but within Mr Rigby's property (Frogley CB 407); and; (e) as at the date of acquisition and until the sale of Lot 2 in September 2016, cattle were able to move between the two Melino properties along the four-wheel track pursuant to a casual or "gentlemen's" agreement with Mr Rigby. Question of statutory construction 74. As to the question of statutory construction, it is uncontroversial that the word "adjoins" must be construed having regard to its ordinary meaning, the statutory context in which it appears and the discernible purpose of the legislation. 75. In their opening submissions, the applicants at [32] refer to approach taken by this Court and the Court of Appeal in relation to similar language in the old SEPP 5 as "instructive", citing the decision of the chief judge in ACN 115 840 509 Pty Ltd v Kiama Municipal Council (2006) 145 LGERA 147 concerning clause 4(1) of SEPP SL. 76. In that case, the chief judge held that it was not necessary for the subject land to answer the description of being land that "adjoins" land zoned primary for urban purposes within the meaning of clause 4(1) to be coterminous with (that is, have a common boundary with) or to be immediately adjoining to the 2(a) residential land which was land zoned primarily for urban purposes. It was sufficient that the land was "near to" or was "neighbouring on" or "in sufficient proximity" to the 2(a) residential land. 77. It might be accepted that in some statutory contexts the word "adjoins" might bear such an expansive meaning and connote a degree of separation. However, in other contexts it requires physical contiguity: see discussion in Hornsby Shire Council v Malcolm (1986) 60 LGRA 429 per Kirby P at 433-434. See also Hunter's Hill and ors v Minister for Local Government [2016] NSWLEC 124 per Moore J, his Honour concluding at [337]- [338], after an extensive review of the authorities, that the word "contiguous" in s 204(3) of the Local Government Act 1993 (NSW) be given a narrower and more confined meaning. 78. In the context of s 55(f) of the Acquisition Act, and the right to compensation of an owner of an interest in land compulsorily acquired (within the meaning of s 37) for injurious affection, "adjoins" should be given its primary meaning of physical contiguity. Section 55(f), and the word "adjoins" which appears in it, would not be construed to compensate the owner of land compulsorily acquired for injurious affection to other land "near to" that land in circumstances where no compensation for injurious affection is available to the owner of immediately contiguous land which has not been compulsorily acquired. The policy of the Acquisition Act is not to compensate for injurious affection owners of land which has not been compulsorily acquired. 79. That "adjoins" in s 55(f) requires physical contiguity is also supported by the language of s 55(f) as a whole, and in particular the expression "or is severed". That language can only mean a prior direct physical connection, and reinforces the Act's policy that owners of land which is immediately adjacent to, but not part of the acquired land, have no entitlement to compensation for injurious affection. Question of fact 80. As a question of fact, the Old Bagotville property does not adjoin either the acquired land, or any part of the Back Channel Road property residue, within the meaning of physically contiguous. 81. It might be accepted that the determination of whether land answers the description of being land that "adjoins" within this meaning - namely, "physically contiguous" - involves matters of fact and degree. 82. In particular, the respondent accepts that the presence of a road reserve or paper road along the cadastral boundary of a Lot, separating land in the same ownership which would otherwise be viewed as one parcel, would not deprive that Lot of answering the description of land that adjoins the other land in the same ownership. 83. But here, the two Melino properties are separated not only by a road reserve, but by two other properties in separate ownership. Any capacity to move between them is pursuant to an informal agreement with one of the two neighbouring land owners 84. It follows that the Old Bagotville Road property is not land "which adjoins … the acquired land …", and that the applicants are not entitled to compensation pursuant to s 55(f) for any injurious affection (which is denied) to that land.
5. Dr Pritchard's oral closing submissions on this point were (Transcript 27 July 2017, page 151, lines 1 to page 152, line 24): PRITCHARD: … A third matter in relation to the relationship between the two properties is the existence of the unformed road reserved along the boundary between lots 96 and 97 shown there in pink. We know that some date prior to the date of acquisition, that unformed road reserve suffered flood damage and, thereafter, access between the two properties was by way of a four-wheel track not situated in the road reserve by within Mr Rigby's property to the east, and it's shown there in yellow. And as at the date of acquisition until the sale of lot 2, which occurred in September 2016, cattle were able to move along that yellow access track pursuant to a casual or gentlemen's agreement with Mr Rigby. The reliance, with respect, that the applicants place upon the existence of a legal entitlement to be upon the road reserve takes matters nowhere, in our submission. They're the facts. In relation to the question of statutory construction, it's uncontroversial that the word "adjoins" has to be construed having regard to its ordinary meaning, the statutory context in which it appears and the discernible purpose of the legislation, namely, the Acquisition Act. The applicants referred to the approach taken in Kiama Municipal Council as instructive concerning cl 4(1) of the Seniors Living SEPP and Mr Hemmings took the Court to relevant dicta of the Chief Judge in that case concerning cl 4(1) of that instrument and his Honour's conclusion that, for the purpose of that provision, it was sufficient that the land was near to or was neighbouring or in sufficient proximity to the 2A(a) residential land, and it might be accepted that in some statutory contexts the word "adjoins" might bear such an expansive meaning and connote a degree of separation. In your Honour's reasons in the Hunters Hill amalgamation case your Honour undertakes an extensive review of the authorities and sets out the details submissions of the parties in that case in relation to the different contexts in which the word "adjoins" appears and, after that review of the authorities, your Honour concluded that the word "contiguous" in s 2043 of the Local Government Act be given a narrower and more confined meaning, namely, connoting physical contiguity and, in our submission, such an approach ought be adopted here in the context of the s 55(f) of the Acquisition Act. The first contextual support for such an approach begins with s 37 of the Acquisition Act which provides a right of compensation to an owner of an interest in land and, in our respectful submission, owners are to be compensated under the Act and not neighbouring landholders who may suffer some injurious affectation but who are not provided compensation. The policy of the Acquisition Act, in our submission, is not to compensate for injurious affectation to owners of land which haven't been compulsorily acquired. Further textual support in s 55(f) itself for a requirement of physical contiguity is to be found in the expression "or is severed", which appears in s 55(f) and, in our submission, the concept of something being severed can only connote a prior direct physical connection and, again, that reinforces the Act's policy that owners of land which is immediately adjacent. Assuming your Honour was satisfied as to the existence of injurious affectation on either of Mr Rigby's property to the east or the owner of the land to the north, neither of those owner would be entitled to any compensation for injurious affectation in circumstances where their land has not been acquired. In our submission, that drives to a conclusion that "adjoins", in this particular statutory context, be given its primary meaning of physical contiguity. That's on the question of statutory construction. In relation to the question of fact, of course, it would be accepted that where the particular land answers the description of land that adjoins within this meaning, physical contiguous, contiguous involves matters of fact and, as has been noted in Court this morning, the respondent has conceded properly that the presence of a road reserve or a paper road along the cadastral boundary of a lot separating land in the same ownership which would otherwise be viewed as one parcel, wouldn't deprive that lot of answering the description of land that adjoins the other land in the same ownership. But that's not the case here. Here, the two Melino properties are separated not only by a road reserve but by two other properties in separate ownership with an incapacity to move between them other than being pursuant to an informal agreement with one of the two neighbouring landowners. If your Honour accepts the respondent's submission in relation to the proper construction of s 55(f), that's the end of the applicant's claim to injurious affectation in relation to the Old Bagotville property.

Consideration

1. It seems to me that there are two initial propositions that I should state before turning to consider the facts here arising.
2. First, the provision in s 55(f) is facultative and not strictly restrictive. Such a position to be taken in resumption compensation cases is consistent with the broad approach to construction of the word "adjoins" taken in Hornsby and is also consistent with a beneficial to a dispossessed landowner approach for resumption compensation cases derived from Caruso.
3. Second, I would also expect a proposition that would be uncontroversial is that broader geography and land settlement patterns would arise to be considered when assessing whether one property "adjoins" another. For example, in the western division of the state, where landholdings can be tens of thousands of hectares in size, two such landholdings in the general vicinity of each other might well be regarded as "adjoining", even if there was a gap between them greater than the 280 metres point to point (Lot 88 DP 755691 boundary corner to Lot 2 DP 523854 boundary corner) arising between the eastern and western elements of the Melino landholding.
4. The various cases to which the advocates referred are ones arising in differing statutory contexts and are of little assistance in setting any basis for determining how far apart two landholdings might be before they can be regarded as no longer being adjoining - they merely make it clear that contiguity is not a mandatory prerequisite. Each case of assessing the meaning of "adjoins" (when the issue arises for consideration) must, necessarily, have regard to the geographic and land settlement context in which it arises.
5. In these circumstances, where the comparative land settlement pattern is of a much smaller scale and direct linear separation is 280 metres as set out above and the functional connection between the eastern and western elements of the Melino landholding (being more direct than the paper road) is nonetheless of 300 metres or so in distance, I am unable, even on a beneficial and permissive approach, to conclude that the legislature intended that the word "adjoins" should apply in these circumstances.

Extent of injurious affection, western element of Melino landholding

Introduction

1. Although I have explained why I consider that the statutory test necessary to be satisfied before a claim for the western element of the Melino landholding as qualifying for compensation for injurious affection has not been met, under the circumstances it is appropriate to deal with the question of quantum should I be wrong on the question of statutory entitlement.

The valuers' approach

1. Mr Frogley adopted the position that Lot 38 and Lot 1 will each suffer injurious affection as a consequence of the Pacific Highway upgrade project being carried out. He accepts that the portion of the western element of the Melino landholding that comprises Lot 2 in Deposited Plan 523854 would not suffer any injurious affection.
2. Mr Frogley assesses the injurious affection to Lot 38 as being 20% across the whole of the allotment, whilst, for Lot 1, he assesses the injurious affection as averaging 5% across the whole of the allotment. He acknowledges that, in adopting this approach, he assesses that the portion of Lot 1, at its northern end (separated from Lot 38 by a "paper road"), has higher injurious affection (similar, as I understood his evidence, to the injurious affection to Lot 38), whilst the element of Lot 1, at its south-western end, lying adjacent to the western boundary of the northern portion of Lot 2, will not suffer injurious affection as a result of construction of the Pacific Highway upgrade project. However, averaging the injurious affection across the whole of Lot 1 leads Mr Frogley to conclude that this allotment will suffer an average 5% reduction in value because of injurious affection caused by the project.
3. Mr Hamilton, on the other hand, has concluded that there is no injurious affection, whatsoever, to the western element of the Melino landholding.
4. It is, therefore, necessary to consider in a little detail the reasons why each of them comes to their starkly different conclusions.
5. I turn, first, to consider Mr Frogley's position. Mr Frogley considers that the appropriate basis to consider this issue is by treating Lot 38 and Lot 1 as separate units for the purposes of his assessment.
6. To understand this position, it is also necessary to consider, a little further, the topography of this portion of the western element of the Melino landholding. In my description of the site inspection, I noted that we had climbed a gentle slope to a ridgeline running east-west. This ridgeline was located at approximately the point where the "paper road" (also running east-west) divides Lot 38 from Lot 1. Lot 38 slopes down to the north from this viewing location, but also has a cross-slope from west to east. The result of this is that there is a gentle re-entrant that traverses Lot 38 from its south-western corner to approximately one-third of its length near the bend in Montis Road at the gate through which we entered Lot 38.
7. The land at the north-eastern corner of Lot 38 is virtually flat and has cane fields across Montis Road from it to its north and east.
8. Lot 1, on the other hand, slopes gently down to the south from the ridgeline to which we walked with a similar cross-slope and re-entrant, for its first portion, generally mirroring Lot 38. However, there was also a further, gentle, east‑west ridgeline further down Lot 1 and beyond that the land appeared to flatten out to the south.
9. I am satisfied that Mr Frogley's approach of undertaking a separate assessment of Lot 38 and Lot 1 is inappropriate, given the agreement between him and Mr Hamilton that it would be necessary for Lot 38 and Lot 1 to be consolidated in order to provide a sufficiently large allotment to attract a dwelling entitlement under the BLEP 2012. The appropriate approach, under these circumstances, is to treat Lot 38 and Lot 1 as a combined entity for the purpose of assessing injurious affection, and to do so, if it were to arise, in an averaging fashion as proposed by Mr Frogley for Lot 1. I have reached this conclusion based on my observations during the course of the site inspection and in light of the agreement between Mr Frogley and Mr Hamilton about the necessity for consolidation of Lot 38 and Lot 1 to attract a dwelling entitlement pursuant to the requirements of the BLEP 2012.
10. Although I have discovered, during the course of preparation of this judgement, that those two allotments have now been consolidated as Lot 1 in DP 1223291, I have had no regard to this outcome.
11. As I earlier observed, there is a power line running north-south through, approximately, the middle of Lot 38 and Lot 1. There were observed to be a number of potential house sites along the south-western fringe of Lot 38 and the western fringe of the northern portion of Lot 1. There would be, for the purposes of the house-site selection, ready access able to be constructed; availability of power from the power line; and no reason to assume there would be any difficulty in establishing an adequate effluent disposal system for any of these house sites. Each of the potential locations could have a dwelling constructed so that it had a generally north-easterly aspect to maximise solar amenity.
12. It was Mr Frogley's position that the most appropriate hypothetical house site was at the western end of the ridgeline to which we walked. Such a dwelling would look to the north-east toward the Pacific Highway upgrade project, a project which would be located some 900 metres from this dwelling site.
13. Mr Hamilton, on the other hand, preferred a location of a hypothetical dwelling a little further to the south than that proposed by Mr Frogley. Mr Hamilton's hypothetical dwelling location would also be at approximately the same elevation as Mr Frogley's but, because it would be on a slope to the east rather than on the east-west ridgeline, this site could enjoy the same north‑easterly aspect but would not need to view the Pacific Highway upgrade project, as the intervening ridgeline which we had climbed would block that view.
14. In addition, there was a contest between Mr Frogley and Mr Hamilton about the impact of Monti's Quarry on the outlook from their hypothetical dwelling sites. To understand that which follows, it is appropriate to reproduce an extract from an air photo showing the northern portion of Lot 1, Lot 38 and the land to the east of them. The project corridor is marked in red and Monti's Quarry is centre top of the air photo. That air photo extract is reproduced below (Exhibit A, TB02):
15. As can be seen, to the east of the ridgeline to which we climbed, there is located the quarry known as Monti's Quarry. As can also be seen from the red line marking the western boundary of the Pacific Highway upgrade project, portion of the quarry has been acquired for the project. It is my understanding, nonetheless, that Monti's Quarry will continue to operate and may have the ability to expand.
16. It is also to be observed that an over-road bypass of the Pacific Highway upgrade is to be constructed over the intersection of Old Bagotville Road and Montis Road which will allow for the continued use of these roads.
17. We were also able to observe, from our vehicle, that there were a number of abandoned small-scale quarry pits to the south of Monti's Quarry. These were able to be seen to our right as we travelled down Old Bagotville Road to inspect Mr Hamilton's Sale 1 at 771 Bagotville Road.
18. Mr Frogley provided a photograph that demonstrated the availability, from his hypothetical dwelling site, of distant ocean views. The photograph showed not only the distant ocean views, but also vegetation intervening between that location and Monti's Quarry. Mr Frogley had not gone to the alternative hypothetical dwelling location postulated by Mr Hamilton, although Mr Frogley expressed the opinion that he did not consider that such distant open views would be available from Mr Hamilton's hypothetical location (as I understood Mr Frogley's evidence).
19. I am unable to accept that proposition as there is nothing from the topography intervening to the east that would support the conclusion that such views might not potentially be available. Under these circumstances, in the absence of specific evidence on this point, I am unable to accept the proposition that such views would not be available, generally, to hypothetical house sites along the relevant portion of the western edge of this northern portion of the western element of the Melino landholding and the climbed ridgeline to the location of Mr Hamilton's hypothetical dwelling location.
20. It was Mr Hamilton's opinion that, for Lot 38, there would be a greater impact on the quiet enjoyment of this portion of a combined landholding arising from the day-to-day operation of Monti's Quarry (including blasting; equipment manoeuvring in the quarry - which would necessarily incorporate the use of reversing beepers on such equipment; and truck movements to and from the quarry).
21. On the other hand, Mr Frogley was of the opinion that the heavy traffic volumes along the upgraded highway would have a greater impact than that which would arise from the quarry. Neither Mr Frogley nor Mr Hamilton had any detailed knowledge of the operation of Monti's Quarry.
22. At this point, it is to be observed that I have no evidence that the Pacific Highway upgrade project, when completed, will be elevated through this portion in any significant fashion (apart from the area of the underpass noted) The highway will be located at a distance of some 500 - 550 metres from the eastern boundary of Lot 38.

Conclusions on injurious affection to the western element of the Melino landholding

1. There are, in my assessment, two conclusions to be drawn from this body of evidence (including from that which was able to be observed during the site inspection).
2. First, to the extent that there might be some distant impact on the putative dwelling location proposed by Mr Frogley, adoption of the site proposed by Mr Hamilton would retain all of the benefits proposed by Mr Frogley for his location, whilst, at the same time, being shielded from any potential Pacific Highway upgrade impacts. I am satisfied that a purchaser of Lot 38-Lot 1 in combination would, in evaluating where it would be the most desirable dwelling site would reach the same conclusion as Mr Hamilton (in preference to the site proposed by Mr Frogley) for the reasons that I have outlined. For this reason, for assessment of any possibility of injurious affection on Lot 38-Lot 1 in combination, Mr Hamilton's hypothetical dwelling location is to be preferred.
3. Second, for Lot 38, as a combination of the distance from the Pacific Highway upgrade project and the immediacy of the daytime impacts of Monti's Quarry, on balance, I am satisfied that the combined visual and operational impacts of Monti's Quarry are likely to be greater than and subsume those of the highway.
4. This conclusion is reached in the knowledge that the highest and best use of a combined Lot 38 and Lot 1 is as a lifestyle allotment with a dwelling at Mr Hamilton's identified location and the potential for some limited cattle-grazing. As a consequence, it is reasonable to assume that use of the northern portion of such a combined allotment, outside daylight hours, would be for the purpose of accessing the hypothetical dwelling. As a result there would be no impact caused by Monti's Quarry at such time.
5. The overall impact of the pacific Highway upgrade project on the enjoyment of Lot 38 and Lot 1 combined would be de minimus.
6. I am, therefore, satisfied that there is, in fact, no claimable injurious affection on a combined Lot 38 and Lot 1.

The proposed new dwelling, the cattle yards and the Colorbond shed claim

Introduction

1. As earlier noted, the strip of land acquired by the RMS included the location of the existing Melino home. It also included cattle yards, sheds, and other ancillary structures necessary to support the management of the overall Melino landholding for its grazing and sugarcane-growing farming activities. All of these structures were demolished by the RMS post-acquisition. During the course of the site inspection, we were only able to view the cleared location where these various facilities had previously been located.
2. The claim now made by the Melinos includes, relevant to this topic, the following: 1. Costs associated with investigating the possibility of relocating the dwelling; 2. The anticipated costs of erecting a new dwelling at the identified location; 3. The cost of the new Colorbond shed erected slightly to the north of the grassy knoll in the south-eastern corner of the eastern portion of the Melino landholding identified as the proposed site for the new dwelling; 4. The cost of a set of modular, steel cattle yards, together with future costs for a number of ancillary aspects necessary, as explained by Mr Melino during the course of the inspection of the eastern element of the Melino landholding; and 5. Necessary preliminary costs and costs of access to, and for connection to services of, the proposed new dwelling;
3. The aspect of this element of the Melinos' claim for the raising of the low-level road traversing the southern portion of the eastern section of the Melino landholding also falls, in my view, potentially into a separate category. As a consequence, as well as being dealt with in my consideration of (3) above, this claim is also dealt with in the following, separate section of this judgment.

The Melino position

1. Mr Hemmings submitted that this element of the Melinos' claim was properly maintainable pursuant to s 59(1)(c) or (f) of the Just Terms Act. In his opening written submissions on this point, Mr Hemmings said (excluding footnotes): The relocation claim 34. The family home, and the farm improvements, have been taken by the RMS. In the hypothetical valuation exercise undertaken (and mostly agreed) between the valuers the RMS has paid for the improvements it now owns: in the agreed amount of$150,000. 35. The relocation claim simply has nothing to do with that agreed amount. 36. That relocation claim is made pursuant to s 55(d). As the Court of Appeal has made abundantly clear, on a number of occasions, compensation payable pursuant to s 55(d) is not to be offset by, or against, those heads of s 55 that relate to value (55(a) market value, 55(b) special value, 55(c) severance and 55(f) injurious affectation). 37. It is assumed the RMS will object to the payment of compensation on the basis that it is reinstatement. It inevitably does. It is a course that the RMS­ as a responsible litigant - should not take. Although obviously properly dealt with once the submission is formally made, the Applicants merely note that the reinstatement submission, relying upon the single word, in a single line statement in Mir Bros has been used out of context by the RMS in a number of proceedings. The submission has been called a nonsense by the Court of Appeal. The concept of "no reinstatement" has been emphatically, and specifically, rejected by the Court of Appeal in both McDonald and Brock. 38. The claim, pursuant to s 55(d), is framed by reference to s 59(1)(c) and in the alternative 59(1)(f). The approach to each of those provisions is well settled. The provisions are simply broken down into their component parts. Importantly, the provisions are not to be construed on the basis of limitations, or qualifications, which are not found in the terms of the statute. 39. The Court being satisfied that there is an entitlement to the claim, there is very little in disagreement in relation to quantum. That is dealt with next.
2. In his closing oral submissions, he said on this point (Transcript 27 July 2017, page 126, line 46 to page 127, line 50): The other thing that we anticipate that is going to be suggested is that what we are attempting to do is to double‑dip. And with the greatest respect, it is simply not possible to see how, when we get paid $150,000 compensation for the improvements that the respondent now owns on the one hand, and then when we get paid compensation for the separate head under 55(d) in the circumstances where the Court is satisfied that it fits within 59(c) and (f). How it can be said to be a double‑dip to the contrary, it's merely payment of compensation in accordance with the legislative scheme and just compensation. To the extent there is the potential for a double‑dip in that scheme, a Court of Appeal does turn its mind specifically to an example of a double‑dip, and we see that in Peak and it's summarised in Brock, because there's a three paragraph description of it in paras 83 to 86 of Peak, and in Brock it's summarised even more concisely. So in dealing with the extract from Brock, "If the claim…the IA claim". Can we put that in the facts of this case? In our after value, because the RMS buys our improvements, the value goes down by the extent of the value of those improvements. We claim for our relocation - let's just deal with the number for the house for a moment, it's a simple number to deal with. Let's assume the Court accepts that the house costs $300,000. And so, as the Court explains in Peak, the purchaser in the marketplace in a before and after exercise, might say "When I buy this property, I'm going to have to build a new house, because I don't have one now; it'll cost me $300,000". So in the after, what the Court here is criticising would be to say in the after I take away the value of the house that's gone, and I further subtracted by $300,000 that it's going to cost to build a new house. Then I make a claim for that $300,000 as a disturbance claim. In that case the disturbance item has been double counted and that is a double‑dip according to the Court of Appeal's discussion of double‑dip, where that discussion of double‑dip is being carried out in the circumstances where they've already identified. The legislative purpose is to pay value on the one hand and pay disturbance on the other; never the two shall meet. One doesn't get offset against the other. It's just compensation to get your value claim and any disturbance claim. To suggest, as the respondent does in this case, as we understand it, that because of the reduction in value of the property by the farm improvements and the house, we are therefore not entitled to the disturbance claim, is with respect simply wrong. But there's a further problem with the respondent's approach as we would understand it, that we - so at 66 and 67, we've dealt with the summary of that which we've just been going through - but at 68 both demonstrating the correctness with respect of the Court of Appeal's approach and also demonstrating the problem with the respondent's approach, hypothetically and actually, but hypothetically the RMS is buying my client's improvements. It buys the land and it buys the improvements. And because it's going to get them and it does get them and it demolishes them, it has to pay full value for those improvements. And to look at this claim from the point of view of the applicant, to say on the one hand well they've got value from the improvement, and to then say it's wrong for them to get the disturbance claim, is to look at it from the entirely wrong point of view, the entirely wrong focus. In the valuation component, the RMS is buying something, it has a value, they pay the value for it and they get the value for it, they get the improvements.

The RMS response

1. The position of the RMS with respect to these claims is a simple one. It is that these new, or proposed new, structures simply replace those of equivalent purpose that had been acquired by the RMS and demolished. The acquisition of the strip of land for the Pacific Highway upgrade project and the fixtures erected upon it, and now demolished, was the subject of the compensation price accepted by the Melinos. The value of the house and associated structures was included in the value of that acquisition price and that, as a consequence, any claim for what amounted to "replacement of old with new" was double-dipping and, therefore, constituted an impermissible claim.
2. Dr Pritchard's written outline of submissions dealt with this aspect of the Melinos' claim in the following terms (excluding footnotes): C. ISSUE 3: REINSTATEMENT OF IMPROVEMENTS 27. The claim made for relocating the house onto the residue (all of the associated claims, "Items 1- 20" in the table at [13] above), does not fall within s 59(1)(f) for a number of reasons. These are: (a) First, the claimed costs do not relate to the applicants' actual use of the land. (b) Secondly, those costs are not reasonably incurred as they involve a "double dip" (as compensation for the market value of the improvements has been included in the before and after method of valuation and is captured in market value). (c) Thirdly, those costs are effectively a claim for reinstatement to which s59(1)(f) is not directed. 28. As to the first matter, the actual use of the land is as a rental property. That is not the applicants' use. The applicants' use of the acquired land, upon which the house is located, is akin to the passive investment use described in many cases, recently summarised by Robson J in Speter v Roads and Maritime Services [2016] NSWLEC 128 at, inter alia, [91]-[92]. 29. As to the second and third matters above, the respondent contends that the claim does not properly fall within s 59(1)(f). The value of the improvements has already been caught in the assessment under s 55(a), and further, it is a claim for reinstatement to which ss 54 and 55 are not directed (as discussed in the authorities set out below). 30. In Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of New South Wales [2006] NSWCA 314, Spigelman CJ (with whom Handley and Tobias JJA agreed) said (with emphasis added): 44. The issue of law which the Appellant propounded in this respect was an alleged inconsistency of this approach with the terms of s55. The Appellant accepted that the before and after method of valuation was well established but submitted that it cannot be applied in a manner which has regard to matters not included in s55, which exhaustively prescribes the matters to which regard may be had, or which is inconsistent with the matters there set out. 45 Section 55 does not constitute a mathematical formula. Section 55 is a list of considerations, albeit an exhaustive list, to which regard must be had for the purposes of determining the actual matter which is before the Court, that is the determination of "the amount of compensation that will justly compensate [the land owner] for the acquisition for the land", within s54(1). 46 As I have noted above it is a feature of the before and after approach of valuation that it does not separately address each of the matters in s55. It does, by its nature, make allowance for more than one of those matters. The before and after method, albeit in this rolled up way, can be understood to achieve 'just compensation' because its application, insofar as money can do so, places a person in the same position as that person would have been in if the acquisition had not occurred. This approach to compensation is, of course, equivalent to the measure of damages in tort. I do not wish to suggest that this is the criterion, because it bears a close analogy with a reinstatement basis for valuation to which ss54 and 55 are not directed. Nevertheless, in an appropriate case, the before and after method can be used to determine "just compensation". Both valuers believed that such an approach was appropriate in the present case. 31. The statement that "a reinstatement basis for valuation to which ss54 and 55 are not directed" is the approach to the construction of the statute articulated by the Court of Appeal, binding on this Court. The presence and primacy of the guarantee of compensation for "market value" (see ss 3 and 10) means that compensation is assessed on the basis of what one has lost, not what it would cost to replace it. What Bignold J has historically described as the "vexed question" as to whether compensation can be paid on a "new for old" basis, is a question of statutory construction. What constitutes a loss that is to be compensated under s 55(a) for market value must be first, a "cost" (or "loss" as that provision has been interpreted to extend to); and secondly, something which "might reasonably be incurred". That is the approach to the operation of the statute mandated by Spigelman CJ in Mir Bros. 32. The reinstatement basis of valuation is not directed simply to replacing what one had, but rather to providing market value to then enable choices to be made thereafter as to how that money will be spent, on the presumption that one obtains value for money for what one purchases with the "cheque for market value" (see Harvey v Crawley Development Corporation [1957] 1 QB 485). This was dealt with in Leppington Pastoral Company Pty Ltd v Commonwealth of Australia [1997] FCA 299; (1997) 76 FCR 318 at pp 15-16; (1997) 94 LGERA 68 (quoting Harvey). 33. In the recent decision of Moloney v Roads and Maritime Services (No.2) [2017] NSWLEC 68, Pain J dealt with, inter alia, a claim for lost profits from sugar cane land which was acquired by RMS. Her Honour determined that the value of the profit generation of the land was captured in the market value of the land and that as a consequence, there was no relevant "loss" of profits. The approach is apposite to the circumstances of the present case on one of two basis (either with the improvements as a profit generator for rental purpose, or simply by reason of the fact that they have been included in market value and so there being no relevant loss for the purposes of s 59(1)(f)): 320. I find that the alleged right or expectation on which this claim for loss of future profits rests is not available under the statutory scheme in the Just Terms Act. In terms of s 59(1)(f) there was no loss attributable to disturbance of the kind claimed and no "loss" has been incurred. I agree with the RMS' submissions set out above that market value includes the capacity of the cane land to generate a profit, at par 314(a). As the RMS submitted, the compensation paid can be directed in any way the Applicants choose whether buying more cane land or another investment or kept as savings, at par 314(b). Future profits from cane land cannot be guaranteed given the inherent risks in any farming venture, at par 314(c). 321. The Applicants' claim made in relation to 4.46 ha of cane land on the residue land of Watts Farm rendered too small to be useful cane land after the acquisition is also not available. The loss in value of that residue land, a claim specifically provided for under s 55(f), was taken into account in the "before and after" approach of the valuers. No additional principled basis for further considering loss of profits for that land is available. The Applicants' claim for loss of profits is not available. 34. This approach is consistent with the construction of s 55 adopted by the Court of Appeal in Tolson v Roads and Maritime Services [2014] NSWCA 161; (2014) 201 LGERA 367. In that case, the Court of Appeal held it was legitimate to set off betterment under s 55(f) against market value of the acquired land under s 55(a). However, it was not legitimate to set off losses attributable to disturbance, which in that case comprised only legal and valuation fees under ss 59(1)(a) and 59(1)(b). Basten JA said at [83] that "[l]osses attributable to disturbance and solatium fall into a different category from changes in the value of land". Here, the improvements are fixtures. They are inherently part of the value of the land. Section 55(a) operates in such a way that those improvements are caught by that section. Compensation is thus to be provided for the improvements pursuant to s 55(a), not s 55(d)/59(1)(f). 35. That reasoning is also why this case is distinct from Roads & Traffic Authority of NSW v McDonald (2010) 175 LGERA 276; [2010] NSWCA 236 (upon which the applicants will apparently rely). In that case, the acquired land (and the parent parcel) had a higher and better use than the use to which it was put at the date of acquisition. The valuation was done on the basis that the land could be subdivided into 7 lots rather than the present use. The question in that case related to the application of s 61(b) of the Acquisition Act which expressly disentitles an applicant to certain disturbance losses if the land is valued on the basis of having a higher and better use. In other words, that use was not caught by the market value. Here, as was the case in Parfett v Roads and Maritime Services [2014] NSWLEC 1182 and Moloney, the market value of the land actually captures the relevant use, here the improvements. This case is unlike McDonald, and akin to Moloney and Parfett. 36. Lastly, and alternatively, if the Court is to make an award of compensation under s 59(1)(f) for the reinstatement of the house and associated services, the amount ought be in line with the evidence of the respondent's quantity surveyor, Tony Makin, rather than the applicants' quotes.
3. Her closing oral submissions dealt with this in the following terms (Transcript 27 July 2017, page 157, line 22 to page 159, line 44): PRITCHARD: The second basis upon which we say the claim cannot come within s 59(1)(f) is the concern in relation to double‑dipping. Your Honour as I put it several moments ago in answer to your Honour's question concerning the road, in our submission the establishment of the house, the garage, the shed, the cattle yards, the question of access; they are all costs to all matters incidental to the value of the land, and they are all reflected in the market value given to the land by the valuers in a before acquisition scenario. Claiming these costs under s 59(1)(f) wouldn't be permitted there being no relevant loss. The heart of the statutory scheme for compensation is compensation for loss and we produce, at para 101, her Honour Beazley J, the President's observations in Tolson in this regard, at in particular para 4 of her Honour's reasons, referring to Spigelman CJ in Leichhardt Municipal Council v The RTA, the 2006 Court of Appeal decision, accepting that the meaning of the term "compensation" is a prima facie compensation for loss. Mr Melino then compensated for the market value of his property including its improvements under s 55(a) has the result that there is no further loss to him. That same point can be made having regard to the statutory language reasonably incurred. Those costs would not be reasonably incurred if compensation for market value has been given for what the applicants seek to reinstate. And Mr Hemmings has anticipated that the respondent will, in this proceeding as in other proceedings, make the submission and it's made on a very strong, solid basis your Honour, that the Spigelman CJ in Mir Bros, couldn't have made it clearer that the Acquisition Act is not directed to reinstatement. At para 104 we produce the cheque for market value idea or expression to found in Leppington Pastoral Company. HIS HONOUR: Let me take you back to para 100. The final sentence. Should that not correctly read, "However there must relevantly be a cost"? It's not confined to a loss. It can include a loss but it is not confined to it. So let me give you, and Mr Hemmings knows and Mr Eastman, I have this habit of using examples that are clearly absurd so no one will think I'm being serious about it, but let's assume that instead of there being an underpass under the new elevated roadway being provided to continue access to the Melino property, along the present roadway, that there was going to be a giant embankment there. And the only way Mr Melino could in the future get to the land, was by building a boat ramp through the wetlands, right. Now that would be a cost for the purposes of 59(1)(f) relating to the future actual use of the, the present, continuing the present actual use of the land wouldn't it? It wouldn't be a loss, it would be a cost. Wouldn't that be claimable under 59(1)(f), if he couldn't otherwise get to the land except by boat on his new, up his new gold‑plated boat ramp? Wouldn't that fall within 59(1)(f)? PRITCHARD: The answer to it might be the same as the answer in relation to road access, that that is something that one is compensated for with a cheque for market value. HIS HONOUR: To the extent that it is put to me that there are some things that are encompassed..(not transcribable).. Mr Hemmings ..(not transcribable)..there are some things that are encompassed by compensation for the market value and there are other things that he says properly fall within 59(1)(f), but are not encompassed in market value, then they are available are they not? If the boat ramp is not encompassed in market value, then it's something that potentially, it's a cost, not a loss, that falls in 59(1)(f) potentially? PRITCHARD: The easy case are valuation and legal costs. HIS HONOUR: Yes. Right, onward. PRITCHARD: In our respectful submission, in relation to what the authorities refer to as double‑dipping, the decision of Talbot J in Richardson(as said) v The RTA, remains helpful, but certainly hasn't been disproved by the Court of Appeal; it was referred to by the Court of Appeal in both Peak and McDonald and we have extracted at para 106 what Talbot J said in Richardson in relation to the potential for double‑dipping if capital improvements to a new property are paid as part of the costs of relocation, in circumstances where compensation was allowed for existing improvements on the acquired property. And I won't read the passage aloud, but we do submit that it is a very clear statement of what we say would be the double‑dipping which would occur in this case if the applicants would be compensated, both in respect of the value of the land and in relation to the construction costs that they seek for in their disturbance schedule. Your Honour's heard recently a lot on the subject of McDonald and Tolson and the other cases; we make written submissions in relation to those and in particular in relation to the McDonald - it's readily distinguishable from the facts of this case, that having been a case concerned with the application of s 61(b) of the Acquisition Act, which as your Honour knows expressly disentitles an applicant to certain disturbance losses where the land is valued on the basis of having a higher and better use. Your Honour in our submission the correct approach to the relationship between disturbance claims and value for land, was taken by Pain J in Maloney, stated at para 272 in Maloney, commencing at para 265 under the heading "Double‑Dipping", where her Honour identified the question which arose as whether the disbursement claim under s 59(1)(f) for a replacement dwelling on the residue land is double‑dipping? And her Honour thereafter considered and extracted relevant passages from the Court of Appeal's decision in Peak and continued to consider the cases Peak, McDonald and Tolson. And then at para 272, her Honour concluded, "The application of...and after method". And then at paras 322 to 323, there's a typographical error in our submissions, with reference to paras 320 and 321, ought be to 322 and 323. Her Honour there determined that the value of the profit generation of the land was captured in the market value of the land and that as a consequence there was no relevant loss of profits. And in relation to the rental aspect of the property in this case, that is her Honour's analysis at para 322, 323 is entirely apposite in our respectful submission, entirely correct, and there would be no reason for your Honour to, or regard her Honour's analysis with anything other than collegiate respect. Likewise in Jameson v Rail Corporation, her Honour rejected a claim under s 59(1)(f) for the costs of leasing neighbouring land to be used for additional car parking, and your Honour is familiar with the decision and has no doubt been taken to it on numerous occasions recently. Her Honour, at 135, in relation to the claim for the leasing of additional land for car parking, accepted that this was really a reinstatement of land claim and that is what was compensated for when market value is paid. Her Honour accepted that submission and she didn't consider that that part of the claim for disturbance satisfied s 59(1)(f). Your Honour, the applicants have been unable in their analysis of the relevant cases to identify a single case in which market value of improvements was awarded and also construction of a new house was awarded. There simply is no case in which such an approach to the provisions of s 55 has been applied by any Court, either this Court or the Court of Appeal.

Introduction

1. Each of the elements of the claim by the Applicants requires separate consideration. This is because, as can be seen from that which follows, different outcomes result depending on the claim element pressed.

The claim for costs associated with the potential relocation of the old dwelling

1. The entitlement to claim costs pursuant to s 59(1)(f) of the Just Terms Act is confined to costs arising out of the "actual use of the land". The claim for costs associated with the potential relocation of the old dwelling is for costs concerning a potential use that was abandoned. They are not claimable as they did not arise out of the "actual use of the land".

The claim for the cost of a new dwelling The "landlord" argument

1. The first basis upon which the RMS resists the claim for the cost of and associated with the new dwelling is that the old dwelling was used for the purposes of a passive rental investment. In doing so, the approach adopted by Robson J in Speter v Roads and Maritime Services [2016] NSWLEC 128 is followed, an approach where his Honour had considered Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259 and concluded that the nature of the investment was not compensable in the fashion permitted by the Fitzpatrick approach.
2. The position in these proceedings is, to my mind, somewhat different. It was Mr Melino's uncontested evidence that the house had been rented, from 2010, as a consequence of the necessity for his late father to move into a care facility. It was also his uncontested evidence that he intended, upon his retirement from his present teaching activities in Lismore, to return to the house and reside in it, from late 2018. It was his intention, at that time, to commence full-time farming activities on the eastern portion of the Melino landholding in his retirement.
3. In these circumstances, it seems to me to be appropriate to regard the renting out of the property for the period between 2010 and 2018 (setting aside the RMS resumption) as not being a passive investment in the sense dealt with in Speter but constituted an interim and not unreasonable use of the house as but a pause in what would have been the continuing, long-term occupancy of the house by the Melino family.
4. This basis for refusal is rejected.

The effect of acquisition of the old dwelling on the new dwelling claim

1. The position put on behalf of the RMS arising from the claim seeking the cost of construction of the proposed new dwelling is correct (however, the future costs of providing services - access, power and a fixed line telephone - require separate consideration).
2. The reason for this differentiation can be seen from what was said by Basten JA in Tolson v Roads and Maritime Services (2014) 201 LGERA 367; [2014] NSWCA 161 at [83] (Beazley P expressly agreeing at [9]). His Honour wrote, relevantly: …. First, s 55 requires that "regard must be had" to the identified matters, without specifying how they should be understood to interrelate. Secondly, regard may not be had to other matters (the list being exhaustive). In relation to the present issue, the interrelationship between the different paragraphs can be considered without reference to extraneous factors. …. Disturbance covers legal costs, valuation fees, financial costs of relocation and other financial costs relating to the actual use of the land: s 59. Such costs are entirely separate from the value of the acquired land or the retained land. It is consistent with the legislative purpose of providing compensation for such amounts that they be allowed or disallowed in accordance with the specific statutory entitlements, without regard to the value of any land involved. [Emphasis added]
3. The new dwelling aspect of the Melinos' claim is rejected for the reasons put on behalf of the acquiring authority. It is unnecessary to detail, at length, any further explanation as to why this is so. It is, in my view, now settled that the value paid for land compulsorily acquired pursuant to the Just Terms Act includes, in the quantum of compensation (whether agreed to by the dispossessed owner or determined by this Court being irrelevant), the full compensatory value for all fixtures included in the acquisition (as discussed).
4. Whether or not a dispossessed owner chooses to apply the compensation for acquisition toward the cost of reinstatement of such acquired fixtures as may have been incorporated in the calculated value for the acquisition is entirely a matter for that dispossessed owner and is not a matter requiring supplementary compensation under the heading of "Disturbance" provided for by the Just Terms Act.
5. However, some costs associated with replacement structures (rather than the cost of such structures themselves) can fall within s 59(1)(c) or (f) as can be seen from the above extract from Tolson. Those that do arise and are claimable are dealt with later.

The Colorbond shed and the cattle yards

1. The equivalent pre-acquisition structures were also acquired and demolished. These new structure are replacements. They fall into the same category as the cost for a new house. The claim for these items is rejected.

Power and telephone services and access to the proposed new dwelling

1. The joint report of Mr Frogley and Mr Hamilton (CB19) and each of their primary individual reports (CB17 - Hamilton and CB18 - Frogley) make it clear that that they have approached their valuation exercise on a "before" and "after" basis.
2. As Biscoe J observed in McDonald v Roads & Traffic Authority of NSW (2009) 169 LGERA 352; [2009] NSWLEC 105 (McDonald) at [144] that … "the before and after method captures s 55(a) market value, s 55(c) severance and s 55(f) increase or decrease in value of residue land …".
3. He also continued to explain, at [145], why the before and after method did not necessarily capture s 55(d) losses attributable to disturbance.
4. These findings were not disturbed on appeal (Roads & Traffic Authority of NSW v McDonald (2010) 175 LGERA 276; [2010] NSWCA 236).
5. That this is clear can be seen from the decision of the Court of Appeal in Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66 where Beazley and Tobias JJA said, at [101]: "…If a person is required to relocate because of the injurious affection caused by the acquisition and, in doing so, incurs costs that are not otherwise reflected in the 'before' and 'after' valuation, then that claim can be made under s 59(c)."
6. As Tobias JA observed in McDonald on appeal, at [88]: It must be remembered that the "before" and "after" approach to the determination of compensation is not a valuation principle which is dictated by the Just Terms Act. It is a convenient and accepted valuation method applicable where only part of a parcel of land is compulsorily acquired in order to determine the market value of the acquired land for the purposes of s 55(a). It is also used to calculate any loss attributable to severance (such as where the land acquired bisects the original parcel) and any increase or decrease in the value of that part of the original parcel which is not acquired by reason of the carrying out of, or the proposal to carry out, the public purpose which was the objective of the compulsory acquisition. Attributable disturbance would rarely, if ever, be captured by the adoption of the "before" and "after" method of valuation. The reason for this is that loss attributable to disturbance relates to losses or costs incurred post-acquisition and as a "direct and natural consequence of the acquisition": see s 59(f). Whether those costs are expended upon the residue land (where only part of a parcel is compulsorily acquired) or on a different parcel of land (where the whole of the parcel is acquired) simply matters not. [emphasis added]
7. Biscoe J also observed in McDonald, at [146]: Double-dipping potentially may occur if, for example, s 55(f) compensation for decreased value of residue land, which would be captured in the before and after method, and disturbance costs are each engaged by a single set of facts.
8. It is in this broad context that I turn to consider the approach taken by the valuers.
9. Mr Hamilton wrote in his individual expert report, at [88] and [89] (CB17, folio 289), commenting on Mr Frogley's approach: He has valued the property before and after acquisition on an "As Is" basis. However, he has sought to also include in the claim, costs associated with replacement of the structural improvements. In order to correctly apply the before and after methodology he must take into consideration the nature of the property on completion of the works he has costed as disturbance. That is, his after-acquisition value must take into consideration the property has been enhanced by the establishment of: • An alternative building site with all weather access and power • New rain water tanks • New cattle yards • New farm shed • New garage
10. Their joint report at 2.11 (CB19, folio 531) demonstrates agreement on the "before" valuation. Although there is subsequent disagreement set out following this agreed position, it is confined to the extent of injurious affection, not to matters of value of the acquired fixtures (subsequently demolished by the RMS). The joint report does not revisit the hypothetical post-acquisition enhancements to which Mr Hamilton adverted as set out earlier.
11. Indeed, at 2.7 (CB19, folio 529) of their joint report, they simply observe: Zoning, Property Location and Services These matters are generally agreed and details are contained within the valuers' respective reports.
12. It is in this context that I return to the findings of Biscoe J (at [119]). His Honour wrote: In my opinion, to the extent that they were reasonably incurred, the disputed disturbance costs fall within s 59(c) as financial costs in connection with the relocation of the applicant, or fall within s 59(f) as financial costs reasonably incurred, or that might reasonably be incurred, relating to the actual use of the acquired land, as a direct and natural consequence of the acquisition. The parent land was the applicant's home. It is a direct and natural consequence of the acquisition that she would continue to live in her large backyard, that is, on the residue land, and relocate her house and shed there. Prior to acquisition the use of the residence and shed were an intimate part of the actual use of the acquired land and the residue land, and the actual use of the residue land was so intimately connected with the actual use of the acquired land that the use of each was dependent on use of the other. Consequently, the disputed costs, insofar as they relate to expenditure on the residue land, relate to the actual use of the acquired land within the meaning of s 59(f).
13. The position with respect to Mr Melino's future occupation, post-retirement at the end of 2018, appears to me to be factually on all fours with the position faced by his Honour in the circumstances set out immediately above. The conclusion reached by his Honour similarly follows inevitably in this instance, it seems to me.
14. In Moloney v Roads and Maritime Services (No 2) [2017] NSWLEC 68 , Pain J observed, at [281], that: The circumstances of this case next require consideration of whether the Applicants' claim for relocation costs of establishing a replacement dwelling arises as a direct and natural consequence of the acquisition together with whether such costs are likely to be reasonably incurred. The taking of the acquired land must directly and naturally cause the Applicants to be likely to build a replacement dwelling.
15. In this instance, as the existing dwelling has been demolished, that position has self-evidently been satisfied.
16. Whilst some aspects of the necessary services for a new dwelling would have been encompassed in the value of the demolished dwelling (water tanks and effluent disposal systems), the same cannot be said with respect to the provision of power and telephone services and access to the proposed new dwelling. They fall entirely within s 59(1)(c) or (f) on the same basis as discussed by Biscoe J as set out at [174] above. The valuers give no evidence of any explicit allowance for the availability of power and telephone services to the old dwelling so no offsetting allowance is required.
17. Claims for these three aspects connected with the proposed new dwelling are to be met by RMS. Mr Makin raised no objection to the power and telephone connection cost estimates (CB16, folio 214). The costing matters raised by Mr Makin concerning the roadway are dealt with in my separate section below which is confined solely to the roadway.

The low-level roadway

1. I have earlier explained why the various items for which compensation has been claimed, which are or will be replacements, were for fixtures that were acquired by the RMS and demolished and for which, therefore, no claim for compensation can succeed.
2. I have also earlier noted that Mr Melino has erected a new Colorbond farm shed slightly to the north of the grassy knoll in the south‑western corner of the eastern portion of the Melino landholding, a location he has identified as his future dwelling location. This shed is one with a number of bays accessible by roller-doors and has, at its southern end, a standard doorway entrance as well. It appeared, from my observation of it, that it had an earthen floor, as no slab was able to be seen under the gap at the base of the more northern of the roller-doors. The structure is clearly a conventional farm shed designed to provide storage for plant and equipment and other farm supplies necessary for the cane-growing and cattle-grazing activities which Mr Melino continues to conduct on the site.
3. I have also earlier described the low-level road that joins the modestly elevated land where the new cattle yards have been erected (a little to the west of what had been the location of the Melino farmhouse and associated farm operational structures (all now demolished as earlier noted)) and the location of the new Colorbond shed.
4. A plan in section has been prepared to show the proposed increase in height to elevate the low portion of this roadway between the cattle yards and, where it rises a little, to the slightly more elevated level where the new farm shed has been constructed. Some of the work to elevate this roadway has been carried out. Mr Melino has provided quotations for the completion of the work proposed to this roadway (comprising raising it a further 500 millimetres and installing cattle grids at each of the gateway locations in order to prevent, as I understood it from the site inspection, cattle accessing the cane fields).
5. For the reasons that follow, I am satisfied that the partial raising effected, and the proposed future raising of this roadway, should have the cost met by the RMS.
6. I have also earlier noted that, amongst the witnesses giving evidence in the proceedings, the RMS provided several statements from Mr Makin, a quantity surveyor. Mr Makin also gave oral evidence and was cross‑examined by Mr Hemmings.
7. Before turning to address the matters raised by Mr Makin as to what might be the appropriate compensation for past and future works to elevate this roadway, it is first appropriate to consider whether there is a separate entitlement arising from s 59(1)(c) or (f) for the cost of the past and future works to elevate the roadway if my earlier reasoning concerning the need for RMS to compensate for the provision of services to the site of the proposed dwelling is incorrect.
8. The pre-acquisition position was that, from the property boundary at the south-eastern corner of the eastern element of the Melino landholding, there was flood-free access to the farmhouse and the associated structures necessary to support the two elements of the farming activities undertaken on the overall Melino landholding. A necessary structure to provide support for the continuation of these farming activities, post-acquisition, is the new Colorbond shed which Mr Melino has erected. This shed replaces the relevant farm servicing structure(s) acquired and demolished by the RMS.
9. I have earlier described, briefly, the explanation given by Mr Melino as to why it is necessary to elevate the low-level roadway that provides access to the Colorbond shed. His statement of 26 October 2016 states (Exhibit A, CB12, [16] - [19]): 16. In the area around the existing house there are a number of other farm structures such as machinery sheds, an old dairy and cattle yards. I understand that these are all to be demolished by RMS as they are located within the new highway corridor. There are no other sheds or cattle yards on the property. A replacement machinery shed is currently under construction to enable me to relocate tractors and farm machinery into a lockable shed prior to the existing sheds being demolished by the RMS. The yards also need to be relocated to another site adjacent to the cane pad. 17. The cane pad is located on the flood free land in the eastern portion of the Wardell section of the property, outside the corridor acquired by RMS for the new highway. I will need to continue using this existing cane pad as part of the continued cane farming operations into the future. 18. There is not enough room in the area around that cane pad to accommodate a replacement house, machinery sheds and cattle yards. That area is also quite close to the alignment of the new highway and I understand there will be quite a lot of noise at that location from the new highway which is not currently an issue. 19. Back Channel Road is not flood-affected and to my knowledge access to the Wardell section of the property has never been cut by floods in the past 56 years that the property has been owned by the Melino family.
10. Further, Mr Melino's Affidavit of 4 July 2017 described the work he had commenced to the low-level roadway and a recent flooding event at the end of April 2017 (Exhibit A, CB21, [24] and [26]): 24. The access to that new dwelling and shed site was just a farm track which previously became impassable in wet weather and in minor floods. Following the acquisition, and in order to secure flood free storage for the farm machinery. I commenced work on improving that access track to an all weather standard, to provide proper access to that new dwelling and shed site. That work consisted of removing the top soil, providing a hard shale base with a finer top layer and rolling and grading to make the access road passable by vehicle. I understand it will need further construction work to be completed in order to satisfy council's access standards for the new house site. … 26. The new access road, built to council's access standards, will be prone to flooding unless the road is raised above the flood level. Annexed and marked "C" are copies of photographs I took of the new access road on 4 April 2017 following a period of flooding which commenced on 31 March 2017. I recall that the water had begun to recede by 4 April 2017.
11. Of the photographs described by Mr Melino as "C", in the extracted passages above, one photograph (Exhibit A, CB21, folio 564) depicts a portion of the roadway we travelled upon during the site inspection. In the photograph, this roadway is under water. This photograph has been annexed to this judgment as Annexure C.
12. The explanation given by Mr Hemmings for the roadway proposal to an elevation of less than flood-free standard was in the following terms in closing submissions: The fill 131. The land is flood affected. Relevantly, this part of the claim- for additional fill to the access road - does not seek to bring the access road levels above the flood planning level. That flood planning level, as can be seen from the development consent, is RL 4.2 for the pad and 4.7 for the finish flood level. 132. Rather, and according to Mr Melino's unchallenged evidence the old dwelling house was accessible in all rain events. Unfortunately however Mr Melino knows -because of his long association with the farm - that there is approximately 150m long section of the access road that does get inundated in relatively small rain events. 133. As a result, and in order to retain equivalence of access, he sought, and obtained, quotations for the placement of additional fJ1l within that 150m long section to provide for all weather access in those smaller storm events. 134. It is unclear whether the Respondent says the incurring of those costs is unreasonable. In the Applicants' submission, costs associated with ensuring equivalent access are costs reasonably incurred.
13. As it seemed to me, after the site inspection, that the past and proposed future works to this roadway potentially fell in a different category for consideration compared to other claims said to be founded on s 59(1)(c) or (f), I raised this matter with Dr Pritchard during both opening and closing submissions times for the RMS. Those exchanges were on 25 July 2017 (Transcript 25 July 2017, page 13, lines 19 to 36): HIS HONOUR: It seemed to me at least potentially that the question of the road raising across the lowland to the new house site is at least potentially different to the question as to whether there should be some compensation, as it were, for the construction of the new house in that I understand the proposition that's put that the full market value of the old house was encompassed by the market value for the acquisition, and I understand the competing positions on that, but I'm not sure that the same position arises with respect to the construction of an equivalent form of access to the new house site in that it might well be, on your case, that you don't get anything for the new house but it might be that a 59(1)(f) loss/cost for construction of an appropriate access to where the new house might go might fall into a slightly different consideration. PRITCHARD: We note what your Honour has said and we'll address it in our closing submissions. May I just respond briefly in opening. We would say that those costs are necessarily incidental to associated with the establishment of the new dwelling and hence not capable of being claimed as disturbance costs. That's the way we put that in opening.
14. Further, during closing submissions on 27 July 2017 (Transcript 27 July 2017, page 155, line 46 to page 156, line 43, and page 157, line 18 to page 158, line 22), the following exchange took place: HIS HONOUR: I want to explain to you that the particular thing and I think I've flagged this before, that I find difficult intellectually grappling with is the question of the road. PRITCHARD: The road. HIS HONOUR: As to whether, even if I accept all the propositions that you advance with respect to things being subsumed in the acquisition, the yards, the house, the shed and all the rest of it, the question that does detain me as to why at least the road might not be within 59(1)(f), not for the purposes of a rental house but for the purposes of access to the relocated shed. Even if Mr Melino gets not a cent with respect to the shed itself, it's the reasonableness in a 59(1)(f) sense of being able to get to the shed to use the shed for the purposes that the shed is needed for the actual uses of the land. PRITCHARD: I'll deal with that now. HIS HONOUR: Yes of course. PRITCHARD: In relation to the road the principal submission is that the applicant gets value for all features of the house, including access. He gets a cheque for market value to use the language of Leppington, how he spends that cheque is a matter for him. The question of access to the property is dealt with in consideration of market value and the applicant gets a cheque for that question of accessibility in time of flood, accessibility by reason of other inherent features of the land is all, in our respectful submission, caught in determination of the market value as is the establishment of a house, the garage, the shed, the cattle yards et cetera. In our submission, we put the question of access in the same-- HIS HONOUR: As an aspect of that. PRITCHARD: As an aspect of that. HIS HONOUR: I understand that but assume I'm not with you on that. I think I need to take you back to the more basic point as to whether you accept that there are, as at the date of the acquisition, three uses of the land, cows, cane and tenant, any one of which can potentially found a claim under 59(1)(f). PRITCHARD: Yes. In relation to that question of actual use. HIS HONOUR: I understand you may say you put three, if you like, disentitling propositions in para 93 of your written submissions. I appreciate you may put that all three of those apply to any one of the three possible bases upon which 59(1)(f) might be triggered. But I'm simply putting the proposition that it seems to me for me to deal fairly with Mr Hemmings' client's claim, I have to - if I accept that those are relevant tests - I have to apply each of those tests to each of the potential uses that gives rise to the claim under 59(1)(f). … HIS HONOUR: Yes all right. See it seems to me that I need then to ask myself a series of questions with respect to a series of uses for the purpose of 59(1)(f), that's all. PRITCHARD: Yes. The second basis upon which we say the claim cannot come within s 59(1)(f) is the concern in relation to double‑dipping. Your Honour as I put it several moments ago in answer to your Honour's question concerning the road, in our submission the establishment of the house, the garage, the shed, the cattle yards, the question of access; they are all costs to all matters incidental to the value of the land, and they are all reflected in the market value given to the land by the valuers in a before acquisition scenario. Claiming these costs under s 59(1)(f) wouldn't be permitted there being no relevant loss. The heart of the statutory scheme for compensation is compensation for loss and we produce, at para 101, her Honour Beazley J, the President's observations in Tolson in this regard, at in particular para 4 of her Honour's reasons, referring to Spigelman CJ in Leichhardt Municipal Council v The RTA, the 2006 Court of Appeal decision, accepting that the meaning of the term "compensation" is a prima facie compensation for loss. Mr Melino then compensated for the market value of his property including its improvements under s 55(a) has the result that there is no further loss to him. That same point can be made having regard to the statutory language reasonably incurred. Those costs would not be reasonably incurred if compensation for market value has been given for what the applicants seek to reinstate. And Mr Hemmings has anticipated that the respondent will, in this proceeding as in other proceedings, make the submission and it's made on a very strong, solid basis your Honour, that the Spigelman CJ in Mir Bros, couldn't have made it clearer that the Acquisition Act is not directed to reinstatement. At para 104 we produce the cheque for market value idea or expression to found in Leppington Pastoral Company. HIS HONOUR: Let me take you back to para 100. The final sentence. Should that not correctly read, "However there must relevantly be a cost"? It's not confined to a loss. It can include a loss but it is not confined to it. So let me give you, and Mr Hemmings knows and Mr Eastman, I have this habit of using examples that are clearly absurd so no one will think I'm being serious about it, but let's assume that instead of there being an underpass under the new elevated roadway being provided to continue access to the Melino property, along the present roadway, that there was going to be a giant embankment there. And the only way Mr Melino could in the future get to the land, was by building a boat ramp through the wetlands, right. Now that would be a cost for the purposes of 59(1)(f) relating to the future actual use of the, the present, continuing the present actual use of the land wouldn't it? It wouldn't be a loss, it would be a cost. Wouldn't that be claimable under 59(1)(f), if he couldn't otherwise get to the land except by boat on his new, up his new gold‑plated boat ramp? Wouldn't that fall within 59(1)(f)? PRITCHARD: The answer to it might be the same as the answer in relation to road access, that that is something that one is compensated for with a cheque for market value.
15. The matter was also dealt with in the written outlines of opening submissions for the RMS. On this point, the opening submissions have earlier been reproduced at [145].
16. The point was further dealt with in the RMS' closing submissions in the following terms (excluding footnotes): 95. As to the second and third matters, the respondent contends that the claim does not fall within section 59(1)(f) because the value of the improvements has already been caught in the assessment under section 55(a). Further, the claim is one for reinstatement to which sections 54 and 55 are not directed (as discussed in the authorities set out below). 96. The valuers have agreed on the value of the improvements in the before scenario, being $150,000 97. In the after scenario, the agreed value of the improvements is $0. The applicants are being compensated under section 55(a) in that amount for the loss of the improvements, which are a feature of the land that must be taken into account in the market value exercise under section 55(a). 98. Mr Frogley (in the working section of his report at CB440) has put his value on improvements being "Dwelling 1, garage, Shed, old dairy bails, cattle yards". Earlier, he has a description of the improvements on the various properties: CB408ff. The full description of the improvements for which the two valuers have applied an agreed value is extracted and set out above at [8]. 99. The establishment of a house, garage, shed, cattle yards, road access (and other costs such as consultant fees which are ancillary to the establishment of a house) are all matters incidental to the value in the land that has been allocated for its improvements and its residential use. 100. Claiming these costs under section 59(1)(f) ought not be permitted. Firstly, there is no relevant "loss" (section 59 is being used to define the term "loss attributable to disturbance" as provided for in section 55(d)). It has been accepted by the Court on a number of occasions (GDA and also Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298 at [186]) that although the word "loss" does not expressly appear in section 59(1)(f), the word "costs" which is used can include a "loss". However, there must relevantly be a "loss". 101. The heart of the statutory scheme (section 55) is compensation for loss. As Beazley P said in Tolson v Roads and Maritime Services [2014] NSWCA 161; 201 LGERA 367 at [3]-[4] (emphasis added): 3. In Leichhardt Municipal Council v Roads & Traffic Authority of NSW [2006] NSWCA 353; 149 LGERA 439 Spigelman CJ stated, at [37], that the Land Acquisition (Just Terms Compensation) Act, s 55 constituted "an exhaustive list to which regard must be had when determining the amount of compensation under s 54". However, the Chief Justice went on to explain that the matters specified in s 55 do not constitute a "mathematical formula". Importantly, for the determination of the question I am presently considering, his Honour added: "The dominant test is contained in s54, that is, the task is to determine the amount that will 'justly compensate the person for the acquisition of the land'. This carries into effect the object of the Act set out in s 3(1)(b) 'to ensure compensation on just terms for the owner of land that is acquired ...'." 4. His Honour accepted, at [38], that the meaning of the term "compensation" in the Land Acquisition (Just Terms Compensation) Act is, prima facie, "compensation ... for loss": Nelungaloo Pty Ltd v Commonwealth [1947] HCA 58; 75 CLR 495 at 571. 102. The proposition advanced by the respondent in this case is that in awarding compensation for market value of the land, including its improvements, section 55(a) provides for that compensation, and there is no further "loss" to the applicant (or "costs" to Mr Melino): see section 59(1)(f)) in relation to costs that could be reasonably incurred. 103. Another way to put the proposition is that such costs would not be "reasonably incurred" if compensation for market value has been given for what the applicants seek to reinstate. As Spigelman CJ (with whom Handley and Tobias JJA agreed) said in Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of New South Wales [2006] NSWCA 314 at [46], the Acquisition Act is not directed to reinstatement. 104. The reinstatement basis of valuation is not directed simply to replacing what one had, but rather to providing market value to then enable choices to be made thereafter as to how that money will be spent, on the presumption that one obtains value for money for what one purchases with the "cheque for market value": see Harvey v Crawley Development Corporation [1957] 1 QB 485). This was dealt with in Leppington Pastoral Company Pty Ltd v Commonwealth of Australia [1997] FCA 299; (1997) 76 FCR 318 at pp 15-16; (1997) 94 LGERA 68 (quoting Harvey). 105. It would not be just compensation, nor compensation for loss, to award compensation twice for the same loss, once for market value and once for disturbance. This is what the authorities have referred to as "double dipping". 106. In Richardson v Roads and Traffic Authority of NSW (1996) 90 LGERA 294 at [303] Justice Talbot held there was potential for double dipping if capital improvements to the new property were paid as part of the costs of relocation when compensation was allowed for existing improvements on the acquired property. Talbot J said at 303: "The value of existing improvements on the acquired property have been allowed as part of the market value. The cost of re-establishment of a business on a property which proves to be unsuitable for that purpose is not a cost of relocation. If a dispossessed owner is fortunate enough to find a replacement property which suits his particular needs without requirement for further capital expenditure beyond the purchase price, that has no effect on the amount of compensation for which he would be entitled for disturbance. Equally, the dispossessed owner is not entitled to purchase a property which requires significant improvement and capital expenditure and then expect the resuming authority to always pay for the cost of the improvements as a cost of relocation. The scheme of the Just Terms Act is that the owner is to be compensated for the loss of property and the actual cost of relocating ... They are costs associated with the bringing of another property into a condition which approximates the condition of the property resumed. It would be a classic case of 'double dipping' to allow compensation for existing improvements on the acquired property and then to allow further compensation as the cost of reinstating the equivalent fixtures and improvements on another property ..." 107. This decision and approach was referred to by the Court of Appeal in Roads and Traffic Authority (NSW) v Peak [2007] NSWCA 66 and Roads & Traffic Authority of NSW v McDonald (2010) 175 LGERA 276; [2010] NSWCA 236 (see also Biscoe J in McDonald at first instance at [154]). 108. In both cases, the replacement/relocation/reconstruction/reinstatement costs were not caught under section 55(a). In McDonald, the acquired land (and the parent parcel) had a higher and better use than the use to which it was put at the date of acquisition. The valuation was done on the basis that the land could be subdivided into 7 lots rather than the present use. The question in that case related to the application of section 61(b) of the Acquisition Act which expressly disentitles an applicant to certain disturbance losses if the land is valued on the basis of having a higher and better use. In other words, that use was not caught by the market value. This case is akin to Richardson and not McDonald. 109. In the recent decision of Moloney v Roads and Maritime Services (No.2) [2017] NSWLEC 68 Pain J dealt with, inter alia, a claim for lost profits from sugar cane land which was acquired by RMS. Her Honour determined that the value of the profit generation of the land was captured in the market value of the land, and that as a consequence, there was no relevant "loss" of profits. The approach is apposite to the circumstances of the present case on one of two basis (either with the improvements as a profit generator for rental purpose, or simply by reason of the fact that they have been included in market value and so there being no relevant loss for the purposes of section 59(1)(f)): 320. I find that the alleged right or expectation on which this claim for loss of future profits rests is not available under the statutory scheme in the Just Terms Act. In terms of s 59(1)(f) there was no loss attributable to disturbance of the kind claimed and no "loss" has been incurred. I agree with the RMS' submissions set out above that market value includes the capacity of the cane land to generate a profit, at par 314(a). As the RMS submitted, the compensation paid can be directed in any way the Applicants choose whether buying more cane land or another investment or kept as savings, at par 314(b). Future profits from cane land cannot be guaranteed given the inherent risks in any farming venture, at par 314(c). 321. The Applicants' claim made in relation to 4.46 ha of cane land on the residue land of Watts Farm rendered too small to be useful cane land after the acquisition is also not available. The loss in value of that residue land, a claim specifically provided for under s 55(f), was taken into account in the "before and after" approach of the valuers. No additional principled basis for further considering loss of profits for that land is available. The Applicants' claim for loss of profits is not available. 110. In Jameson the acquiring authority resumed part of the land that had been used for car parking (the residue being an industrial building that continued to operate). The applicant claimed under section 59(1)(f) the costs of leasing neighbouring land to be used for additional car parking. Pain J rejected the claim on the basis that the car parking component of the land was inherently part of the market value compensated for under section 55(a). Her Honour said at [135]: "[t]he Respondent submitted this is really a reinstatement of land claim and that is what is compensated for when market value is paid. I agree. For the various reasons given above I do not consider that this part of the Applicant's claim for disturbance satisfies s 59(f)". 111. In this case, as in Parfett v Roads and Maritime Services [2014] NSWLEC 1182 and Moloney, the market value of the land actually captures the relevant use, here, the improvements which were used for a rental purpose. This case is unlike McDonald, and akin to Moloney and Parfett. 112. The respondent's approach in the present case is consistent with the construction of section 55 adopted by the Court of Appeal in Tolson v Roads and Maritime Services [2014] NSWCA 161; (2014) 201 LGERA 367. In that case, the Court of Appeal held that it was legitimate to set off betterment under s 55(f) against market value of the acquired land under s 55(a). However, it was not legitimate to set off losses attributable to disturbance which in that case comprised only legal and valuation fees under ss 59(1)(a) and 59(1)(b). Basten JA said at [83] that "[l]osses attributable to disturbance and solatium fall into a different category from changes in the value of land". 113. Here, the improvements are fixtures. They are inherently part of the value of the land. Section 55(a) operates in such a way that those improvements are caught by that section. Compensation is to be provided for the improvements pursuant to section 55(a), not section 55(d)/59(1)(f).
17. On the other hand, when put to Mr Hemmings, the submissions advanced for the Melino interests on this point were in the following terms (Transcript 27 July 2017, page 130, line 32 to page 131, line 34) : HIS HONOUR: Before we go there, something that I raised with Dr Pritchard during the course of the last couple of days. Assume for the purposes of this question, I am entirely against you on things like the house and the shared cattle yards and all the rest of it. Do you still say to me then that because the upgrading of the road across the cane land doesn't constitute anything that has been, in shorthand, otherwise acquired by the RMS and compensated for, that is in a separate category? That even if I'm against you on everything else, that would stand as an available independent claim? HEMMINGS: I think the short answer is yes, can I give a lengthier answer to it. There seem to be three possible alternative approaches. One is the value claim and the disturbance claim are entirely separate and cannot be offset at all and that's what we say the correct statutory approach is. The other extreme is because you've got value for those things you claim, whether it's dollar, therefore your relocation claim is not available at all, is the other extreme which is we say inconsistent with the legislation and with the authorities. And the middle ground is to work out what's been paid for, what's been claimed and offset the two. HIS HONOUR: I know you say that's wrong, I accept that, and I'm putting that as a hypothetical to you that's all. HEMMINGS: As a hypothetical, my difficulty obviously, obviously from my client's point of view, something better than nothing. And so if I couldn't justify the house because the house has been paid for, but all the other incidentals, the road for example, they haven't paid for the road and we need a road to get to the shed. There's a couple of hundred thousand dollars in the road; it's expense to build the road. Obviously it's in my client's interest to say the middle ground is the appropriate ground. My difficulty is I cannot see on the authorities, on the current state of the authorities, an approach which facilitates that middle ground. That's why I say I recognise it as, if we grade the potential response the Court would have, there is a middle ground battle. HIS HONOUR: I'm not talking to you about grading, I'm talking about categorisation. What I'm seeking to explore, I've put to Dr Pritchard and I'm assuming she will also deal with this, is that the RMS position is the house is dealt with because the house was, encompassed, the $150,000 for the house, encompassed the house as part of the acquisition of the land and therefore you can't get a new house. There was no access road to where you might put a new house encompassed by that which was acquired by the RMS. So it would seem to me, at least potentially, that, and I say this specifically with respect to the access road, that the access road or the ability to access, was not encompassed on any way you look at it potentially, as to what was acquired by the RMS. HEMMINGS: Yes, no I'd accept that. So your Honour is, one is looking for a 59 or 59(1)(f) or a 59(1)(c) trigger for the necessary connection - and this must be I think the way it always works - look for a trigger and otherwise satisfied that it fits within that regime, then is there a reason either to not allow or reduce as, I think with respect your Honour is right, with the approach that we understand the respondent takes, there being no value paid for the road, there'd be no reason to offset or reduce and that would be a claim that would remain.

Quantum of the road raising claim

1. In his initial expert report, Mr Makin dealt with the claim for raising the level of this internal roadway by saying (Exhibit A, CB16, folios 202 to 203): Road Construction 36. Lines 15 and 16 of Annexure C include amounts claimed for the construction of the road and hard standing based on quotations from Price Civil Constructions. 37. I have reviewed the amounts claimed for the road in line 15 and confirm that the amount claimed is reasonable. 38. Line 16 of Annexure C includes an amount of $85,250 plus GST for imported filling (in addition to the formation of the road included in the invoice in line 15). 39. A section drawing of the road included in the Property Adjustment documents shows the road constructed on an embankment. However, the photographs in Annexure G show the construction of the road at or about the same level as surrounding ground. 40. I also note that the Ardill Payne report dated March 2017 notes that the road is "not required to be flood-proofed or flood immune" (refer to page 7 or the Ardill Payne report dated March 2017). No details are provided of the extent of any supplementary fill and therefore I have excluded the amount claimed for fill under the road. 41. In the alternative, if it is found that 900m3 of fill is required to complete the road, as claimed and as included in the quotation from Price Civil Constructions (document 19 in Annexure E), I consider that the amount claimed of $85,250 plus GST is reasonable. 42. I consider the total for the cattle grid and excluding the fill in line 16 of $21,450 including GST to be reasonable.
2. In his calculations in his initial report, he provided the extracted element concerning the costs of this roadway-raising (Exhibit A, CB16, Annexure C, folio 214): Mr Makin's initial table shows that he accepted the quotes for the access road of $237,109 and for the cattle grid of $21,450 to be reasonable. He excluded to cost of the fill that was said to need to be imported. This quotation analysis is found at Exhibit A, CB16, Annexure E, folios 226 and 227.
3. However, he later, in his Supplementary Expert Report, modified his position concerning this roadway element. He did so after considering revised quotations to take account of the need to increase the quoted prices because of the effluxion of time. He said (Exhibit A, Supplementary Notes prepared by Tony Makin, Escalation Notes, folios 1 to 2): Notes on Revised Quotes from Price Civil 1. Price Civil has provided updated quotations for the road, fill and cattle grids. Those revised quotations have been increased by 7% for the fill and cattle grid and by 7% for the road. 2. These need to be considered separately. 3. However, note that only one quotation is provided. There is no indication that these prices were obtained in a competitive environment and no indication of any restraint of negotiation on the higher prices provided by this single contractor. Revised road price 4. The road price has increased from $215,554 to $230,642 plus GST - an increase of 7%. 5. Rawlinsons publish indices to track the change in construction prices. Refer to pages 1 and 2 for copies of the indices for both Brisbane and Sydney. … 7. Applying these indices to the road quote indicates that the price would increase by approximately 6% for Brisbane area (the nearest centre) or 4.8% for Sydney (not really appropriate for this project). 8. The revised quote is therefore within 1% of the original price, having allowed for escalation in construction costs. 9. On this basis I accept the revised quotation for the road in the sum of $230,642 plus GST = $253,706. Fill under road 10. The fill under the road (claimed at 900m3) is a single item. It would not have been difficult for the Applicant to provide confirmation that the material was more expensive than the original quote but this has not been provided. 11. The comments about a single quote in paragraph 3 above apply equally to this item. 12. Because this is a single item of work it is possible to compare the prices in Rawlinsons for the two quotes. 13. Pages 3 and 4 of the attached document include the relevant item in Rawlinsons for 2015 and 2017 (ie a 2 year period - much longer than the difference between the two quotes of 15 months (Nov15 to Feb17)). 14. The price for fill in the Brisbane area is $90/m3 for both periods - ie no increase. 15. On this basis the original quotation is adequate with no increase. Cattle Grid 16. The cattle grid includes several items of work (unlike the fill) - excavation, concrete and steel. Hence the application of a general index to the cost of this work is appropriate. 17. The comments about a single quote in paragraph 3 above apply equally to this item. 18. The change in index for a 12 month period calculated above is 4.0%. Assuming this same rate of inflation for the 15 month period applicable to the cattle grid gives an increase in cost of 5%. 19. The increase claimed is 10% which is not supported by any further detail and is double the increase based on the indices. 20. On this basis, I calculate the appropriate cost for the Cattle Grid in February 2017 as ($19,500 plus 5% =) $20,280 plus GST = $22,308. 21. I have included these revised figures for the road and cattle grids in my calculation in Column S in the attached calculation. 22. My original opinion that a reasonable price for 900m3 of fill is $85,250 plus GST is unchanged but this figure is excluded from my summary for the reasons included in paragraphs 40 and 41 of my report.
4. His revised calculation table for the roadway element, as extracted below, now became (Exhibit A, Supplementary Notes prepared by Tony Makin, Escalation Notes, folio 3): Mr Makin's revised table shows that he accepted the revised quote for the access road of $253,706 and that he considered $22,308 reasonable for the cattle grid. He further opined that a reasonable price for 900 cubic metres of fill would remain unchanged at the amount claimed of $85,250; however, this remained excluded from his summary for the reasons provided in his first report.
5. I generally accept the unchallenged expert calculations of Mr Makin for the appropriate prices for the elements of the road raising for which he has adopted final prices.
6. However, with respect to the upward revised price for the proposed importation of the 900 m3 of fill, his reliance on no movement in Brisbane fill prices over the relevant period is not persuasive. He gave no evidence about changes in local prices or demand for fill - particularly in circumstances where there may be a significant demand for fill caused by the Pacific Highway upgrade project itself. A Caruso approach leads me to accept the upward price adjustment for imported fill.

Conclusion on the road raising claim

1. As earlier noted, it was Mr Melino's evidence that this road raising was to meet a requirement of the Council for dwelling access. As I have concluded that the dwelling claim cannot succeed, I do not take this into account. However, reasonable access to the Colorbond and the equipment in it at these lower flooding periods does seem to me to be reasonable and thus raising the road as proposed for this purpose is also reasonable for the reasons which follow.
2. The claim for elevation of the roadway is made pursuant to s 59(1)(f) of the Just Terms Act. This provision is in the following terms: 59 Loss attributable to disturbance (1) In this Act: loss attributable to disturbance of land means any of the following: … (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.
3. Although I have rejected the claim for the costs of the Colorbond shed and the proposed new dwelling, as these items merely reflect replacement of items for which compensation was incorporated in the value of the land acquired by the RMS and the purpose of such compensation is to reflect the value of the land and fixtures acquired. The compensation regime established by the Just Terms Act is designed to reflect the value of that which is required, not to replace fixtures on a new-for-old basis.
4. However, as earlier noted, the Colorbond shed constructed for Mr Melino is for the purposes of enabling him to continue to conduct his cattle-grazing and sugarcane-growing activities on the eastern element of the Melino landholding. To enable those activities to be carried on in an efficient and effective fashion, Mr Melino requires, on his uncontradicted evidence, access to the Colorbond shed at times of minor inundation of the low-lying land. It therefore follows that, to the extent that cost has been incurred for the partial raising of the roadway, that cost is one which has reasonably been incurred and that, to the extent that provision needs to be made for the further raising of the roadway, that falls within the concept of being a cost which might reasonably be incurred. Such costs are compensable under the Just Terms Act and are to be met by the RMS.
5. It is true that the elevation of this roadway will provide the improved level of access not only to the Colorbond shed constructed by Mr Melino to facilitate his ongoing farming activities on the eastern portion of the Melino landholding (this being the portion to which he is entitled as a consequence of his late father's testamentary dispositions), but it will also provide the same level of access to the future dwelling site identified by him. However, there is, as a matter of fact, no construction differentiation arising as a consequence of these two, quite separate, access functions that would be served by the elevation of this roadway.
6. This duality of reasons is immaterial. It is sufficient that, in land management terms, the extent of protection of access to the Colorbond shed could not be seen to be extravagant and, in the statutory context of s 59(1)(f) of the Just Terms Act, past and future incurring of costs for this purpose were, and will be, necessarily incurred.
7. As to the amount to be allowed for this, I am satisfied that Mr Makin's approach, absent persuasive evidence that could lead me to conclude that there was some deficiency in it, is to be accepted.

Building design costs, development application and other regulatory costs

1. In McDonald at first instance, Biscoe J set out a list of the contested elements claimed as disturbance costs pursuant to s 59(1)(c) or (f) of the Just Terms Act which had been claimed in those proceedings. At [95], his Honour listed the items that had been claimed; the amount claimed; the RMS amount proposed to be allowed; and the amount that his Honour determined was appropriate.
2. Various items, preliminary to construction, were ones where the RMS proposed that there should be no compensation allowed. However, his Honour approved each of these claimed elements in full. My summary of the relevant identifier in these proceedings equivalent to ones the items claimed in full were allowed, despite RMS opposition, were: 1. Development application cost for lodgement of application for proposed new dwelling; 2. Development application costs for proposed new dwelling and Colorbond shed; 3. Preparation of house plans; 4. Consultants' advice for new dwelling; and 5. Council fees.
3. Biscoe set out, between [105] and [119] his reasons for allowing these items.
4. Although the RMS vigorously contested, in the Court of Appeal, the general approach that his Honour had taken to disturbance claims, the Court of Appeal's decision does not deal specifically with any of the disturbance claim items set out above.
5. In light of the extensive consideration of the approach taken by Biscoe J to disturbance claims as discussed in the judgement of Tobias JA between [67] to [110] (with whom Giles and Macfarlan JJA agreed) and that the Court of Appeal judgement found no fault in the approach taken by Biscoe J, the conclusion inevitably to be drawn as to the specific is that the Court of Appeal saw no vice in his Honour's approach to the above set out items when dealt with at first instance.
6. In these proceedings, for the reasons earlier set out, the factual position of Mr Melino's ongoing farming activities (albeit presently conducted from a base in Lismore pending his retirement) and the absence of a residence on the eastern portion of the Melino landholding as a consequence of the RMS having acquired and demolished what had been the Melino family home, means there is a sufficiently close position, on the facts, with that which was dealt with by Biscoe J in McDonald to warrant me, as a matter of comity, for me to follow his Honour's approach unless I am satisfied, for some reason, his Honour was wrong. In light of the Court of Appeal's determination in McDonald, there would be no conceivable basis upon which I could disagree with that approach. Unsurprisingly, under the circumstances, I am not tempted to do so.
7. It therefore follows that those items claimed in these proceedings that can properly be characterised as being the same as, or equivalent to, items on the above list allowed by Biscoe J in McDonald are to have the claim for them allowed in these proceedings.

Costs of the abandoned proposal to relocate the existing dwelling

1. Although Mr Melino had contemplated lifting and moving the pre-existing home to relocate it to the now identified, prospective new home site in the south‑western corner of the eastern portion of the Melino landholding, an inspection of the structure revealed that this was not feasible because of the need to strip the structure of its asbestos cladding. Had Mr Melino carried through with this initial intention, the value of the dwelling would not have been included in the acquisition compensation for the strip of land acquired. However, as this relocation proposal was not viable, the house was acquired and demolished, along with all the related structures.
2. As these costs were not connected with an actual relocation (s 59(1)(c) or an actual use of the land, they are not recoverable.

The lost rent claim

1. After Mr Costanzo Melino needed to move from the family home on the eastern portion of the Melino landholding and into a care facility, the house was rented. From 2010, the home was rented at $365 per week and managed by a local real estate agent. This arrangement continued until June 2015.
2. From August 2015, a lower rental of $250 per week was obtained and the property was managed by Mr Melino. He said that this was because of the pending RMS acquisition. His evidence on this point was (Exhibit A, CB21, First Melino Affidavit of 4 July 2017, folio 546 at [16]): 16. The old house where I grew up has been rented out since 2010. Until approximately June 2015 the old house was managed by Century 21 in Ballina. At that time the property was achieving $365 per week rental. From August 2015 and with the acquisition pending I managed the property. At that time, in the shadow of the acquisition I could only achieve $250 a week rental. The Rental Agreement was for six months from August 2015. At the expiry of that period the tenant continued to hold over on a month to month basis. Annexed and marked "A" are examples of rental receipts when the property was managed by Century 21 in Ballina; a copy of Century 21's rental income statement for the property for the 2014/15 financial year; a copy of the Residential tenancy Agreement and rent receipts issued from 29 January 2016 to 16 June 2016 when the rental income from the property ceased.
3. It was also his evidence that he had intended to return to reside in the home after he retired in 2018 from his (now part-time) teaching position in Lismore, the city in which he presently lives (Exhibit A, CB21, First Melino Affidavit of 4 July 2017, folio 546 at [17]). As earlier explained, the home was acquired by the RMS as part of its compulsory acquisition and has been demolished.
4. The claim for lost rental is set out in the Melinos' Points of Claim in the following terms (Exhibit A, CB08, Points of Claim, folios 109H to 109I): The Lost Rent 25. Prior to the acquisition and up until approximately June 2015 the dwelling on the east sector ("the Dwelling") was managed by an agent and occupied by a tenant paying rent as at June 2015 in the amount of $365 per week. PARTICULARS i. Century 21 Ballina owner statements 2015 ii. Century 21 Ballina Owner Income and Expenditure for July 2014 to June 2015 26. From 20 August 2015 and up until 16 June 2016 the Dwelling was managed by Melino. PARTICULARS i. Residential Tenancy Agreement between Melino and Bejay Thorn. ii. Rent receipts in the sum of $250 per week. 27. From March 2016 up until 16 June 2016 the tenant occupied the Dwelling on a month to month basis. 28. The reduced rent was a consequence of the impending acquisition. 29. It is reasonably anticipated that that the replacement Dwelling will not be constructed and available for occupation by a tenant until 30 June 2018. 30. The Applicants claim loss rent in the amount of $44,625 until the new dwelling is built. PARTICULARS i. 24 months rent (July 2016 - June 2018) @ $365 per month = 104 weeks@ $365 = $37,960 ii. $155 per week from 20 August 2015 to 16 June 2016-43 weeks@ $155 = $6,665
5. It seems to me that there are two distinct aspects to the way in which the lost rent claim requires to be considered. These arise even though the claim itself has been expressed to be one that runs until the anticipated date of Mr Melino's retirement in 2018, the time when he has attested it is his intention to return to reside on the eastern portion of the Melino landholding. The first relates to the period between August 2015, when Mr Melino commenced managing the property at a reduced rental, and the date of acquisition in June 2016 (the reduced rental period) and the second to the claim for compensation from the date of acquisition until 2018, the time when Mr Melino anticipated returning to take up occupation (the post-acquisition rental claim).
6. With respect to the reduced rental claim, I have set out the relevant extract from Mr Melino's affidavit, rent receipts and rent statements that demonstrate the lower rental level achieved from August 2015 until the date of acquisition. For this period, there is a clearly demonstrated reduction of $115 per week in the rental achieved for the dwelling. This reduction, on Mr Melino's uncontradicted evidence, was clearly a loss incurred as a direct consequence of the proposed acquisition to carry out the public purpose. A loss in such circumstances is clearly compensable pursuant to s 59(1)(f) of the Just Terms Act.
7. Whilst, superficially, the difference in rent from August 2015 to the date of acquisition appears to be $115 per week, that is not strictly the position to which regard should be had for the purposes of the Just Terms Act. The proper rental difference is one derived by the calculation of deducting the rent achieved by Mr Melino, when he undertook management of the property, from the rent paid actually paid to the Melinos when the real estate agency, Century 21, was managing the property. The rent receipts in evidence demonstrate that the real estate agency charged a management fee.
8. However, the rent statements from Century 21 show properties at Old Bagotville Road and 604 Back Channel Road aggregated (Annexure A from Michele Melino affidavit of 4 July 2017 - reproduced at Annexure D to this decision) so that no breakdown of management charges can be seen.
9. As a consequence, whilst $115 per week may have been the gross rental differential, it does not reflect the loss to the Melinos, as that loss must be the net loss derived by subtracting from $115 the estate agent's commission on the full $365 achieved when the agency was managing the property. The relevant management fee/commission amount requires to be deducted from the $115 gross lost rental. Compensation for lost rental between the relevant date in August 2015 and the date of acquisition in 2016 is to be calculated on this weekly basis.
10. It therefore follows that there is an entitlement to compensation for lost rent at the rate of the net loss per week (not the gross loss per week) between the commencement of the lease at the reduced rental in August 2015 until the date of acquisition. The precise quantum of this compensatory amount can be settled by the parties' legal representatives.
11. I have earlier explained why the full value of the fixtures incorporated in the acquisition price negates any claim pursuant to s 59(1) of the Just Terms Act for further compensation to enable reimbursement for the cattle yards and the Colorbond shed or anticipatory reimbursement for the cost of a future dwelling.
12. Equally, the element of the compensation for the acquisition that reflects the value of the house that was acquired incorporates, necessarily, all the future income generation potential of the house for the reasons discussed by Pain J in Moloney (No 2) at [315] to [317] (applicable by analogy).
13. Had there been a lease to the tenant in occupation of the house at the time of the acquisition, this would have been a matter requiring consideration. However, there was not, as Mr Melino's evidence discloses that the tenant was in occupation pursuant to the holding-over provisions, on a month-by-month basis, of an expired lease. There is, therefore, no entitlement to compensation for rental income potentially forgone until the expected return of Mr Melino to reside on the eastern portion of the Melino landholding post his retirement in 2018.

The loan establishment fee and interest claim

1. Mr Melino has borrowed money for the purposes of carrying out works and replacement structures for demolished items, in anticipation, with those works and structures forming part of the claim for compensation. Mr Melino has, already, paid an establishment fee for this loan and accrues interest on whatever moneys have been drawn down from such a loan. The claim is made for compensation for the establishment fee for the loan and for such interest as has accrued on it (and will accrue until compensation is paid).
2. Section 49 of the Just Terms Act makes provision for the payment of interest on compensation. It is in the following terms: 49 Interest on compensation (1) Interest is payable (subject to subsection (2)) on any amount of compensation under this Part from the date the land is acquired until the payment is made. Any such interest becomes part of the amount of compensation payable. (2) Interest under this section is not so payable on any amount of compensation paid into a trust account under this Part or into the Consolidated Fund by the authority of the State. However, money earned from the investment of any such trust account becomes part of the compensation concerned.
3. I have, in the past, rejected a submission by Mr Hemmings where he sought compensation between the actual interest rate paid and the interest rate determined pursuant to the statute (Konduru T/as Warringah Road Family Medical Centre v Roads and Maritime Services; Konduru v Roads and Maritime Services; Konduru v Roads and Maritime Services [2017] NSWLEC 36 at [130] to [156]). The discussion in Konduru dealt with two claims for additional interest sought to be awarded above the statutory rate. In dealing with the first of these claims, I set out the history of the relevant statutory provision (at [130] to [141]); the details of the claim and the RMS' response to it (at [142] to [152]); and my consideration and rejection of any basis existing for such a claim (at [153] to [156]). The first and third of these elements are engaged for consideration in dealing with this aspect of the claim made by the Melinos.
4. The first relevant element from the decision in Konduru was in the following terms: The mortgage interest claim for 40 and 42 Bantry Bay Road Introduction 130 First, it is to be observed that s 55 of the Acquisition Act codifies, exclusively, the six potential heads under which compensation is able to be claimed by a dispossessed holder of an interest in land compulsorily acquired. 131 Losses attributable to disturbance are identified by s 55(d) as one of these six categories. What can fall within the concept of loss attributable to disturbance is, itself, codified, exhaustively, by s 59(1) of the Acquisition Act where six categories are identified, with s 59(1)(f) reading: Any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition. 132 Although the Acquisition Act provides, in s 61, matters of limited exception, that provision is not engaged for the purposes of these proceedings. Section 49(1) of the Acquisition Act and its history 133 It is now convenient to set out the terms of s 49(1) of the Acquisition Act, this being the provision that mandates the payment of the statutory interest at the rate applicable. The provision is in the following terms: (1) Interest is payable (subject to subsection (2)) on any amount of compensation under this Part from the date the land is acquired until the payment is made. Any such interest becomes part of the amount of compensation payable. 134 This provision was contained in these terms in the Land Acquisition (Just Terms Compensation) Bill 1991 (the Bill) when it was introduced into the Parliament by the then Deputy Premier and Minister for Public Works, the Hon W J T Murray MP, on 11 April 1991. An examination of the Minister's Second Reading Speech, on that date, does not disclose any reference to the provision that became s 49 in the enacted legislation. 135 In the Minister's Second Reading Speech in Reply, on 17 April 1991, there appears in the Hansard of that date, at page 2378, the sole reference to this provision. The reference is in the following terms: Clause 49 is clear about when interest on compensation is payable. The Treasurer must take into account the rates set by banks. [emphasis added] 136 After the completion of the passage of the Bill through the Legislative Assembly, it was not able to be dealt with prior to the intervention of the 1991 state election. 137 However, the legislation was reintroduced as an early Bill in the following Parliament. An examination of the Legislative Assembly and Legislative Council Hansard for the Bill when reintroduced discloses that there was no mention of cl 49 (it becoming s 49 in the Acquisition Act) in the second reading or committee stage debates in either the Legislative Assembly or the Legislative Council. The legislation was passed and came into effect as the Acquisition Act. As a consequence, there is nothing in the Hansard that would engage s 34(2)(f) of the Interpretation Act 1987 for the purposes of understanding how s 49(1) of the Acquisition Act should be interpreted. 138 Similarly, an examination of the Explanatory Notes provided to the Parliament with the Bill (for the Bills in both the 49th and 50th Parliaments) discloses that there is no mention of cl 49 within the commentary on the group of clauses within which it appears. As a consequence, there is nothing in the Explanatory Notes that would engage s 34(2)(e) of the Interpretation Act 1987 for the purposes of understanding how s 49(1) of the Acquisition Act should be interpreted. 139 The provision has not been amended since its original enactment. Section 50(1) of the Acquisition Act and its history 140 It is next convenient to set out the terms of s 50(1) of the Acquisition Act, this being the provision that mandates how the rate of statutory interest is to be set. The provision is in the following terms: (1) The rate of interest payable on any payment of compensation under this Part is such rate as the Treasurer may from time to time determine by notification published in the Gazette. 141 The Parliamentary process for s 50(1) was the same as for s 49 and need not be repeated. As with s 49, s 50 has not been amended since its original enactment.
5. The second relevant element from the decision in Konduru was in the following terms: Consideration 153 This claim, it seems to me, whether novel or not, thus requires simply to be dealt on a first principles' statutory construction basis by considering: 1. Whether s 50(1), as Mr Eastman submitted, covers the field and deals with any entitlement to interest that a claimant has; and 2. If not, whether the terms of s 59(1)(f) are satisfied to make the interest differential claimable. 154 I have earlier set out the terms of s 50(1). Its terms are concise and simple. For me to accept this element of the claim advanced for the Kondurus, it would be necessary for me to read s 50(1) as if it read, "The minimum rate of interest payable on any payment of compensation under this Part is such rate as the Treasurer may from time to time determine by notification published in the Gazette". 155 Whilst such an approach is permissible if the context demands it (see Taylor v The Owners-Strata Plan 11564 (2014) 253 CLR 531; [2014] HCA 9), there is absolutely no contextual imperative to do so. The provision expressly has the Treasurer determine the rate of interest. There is no suggestion that this has not taken place. Mr Eastman's submission is correct - the clear language of s 50(1) makes it clear that, for the purposes of s 49(1), the Treasurer's s 50(1) determination is exhaustive. 156 The claim for reimbursement of the additional interest, above the statutory interest rate, for the period between acquisition date and the date of payment of the s 48 advance payment is rejected.
6. In these proceedings, Mr Hemmings has sought to persuade me to revisit the position I adopted in Konduru. The element of his written submissions seeking to have me do so was in the following terms (excluding footnotes): Loan establishment 151. Clearly, in order to continue the operation of the farm it was necessary to replace some of the farm improvements. That was so, notwithstanding that an Applicant is entitled to wait to see if, and how much, compensation it will receive before incurring any costs. 152. Costs have been incurred in relation to the construction of the replacement farm shed, the replacement cattle yards, part of the new access track and obtaining necessary approvals. 153. In order to fund those works it was necessary for Mr Melina to take out a loan. 154. To establish the loan he incurred a loan establishment fee in the amount of $200,000• Those costs satisfy the requirements ofs 59(1)(f). Interest 155. Upon the establishment of the loan Mr Melina incurred interest charges on the borrowed amount until the advance payment of compensation was received in February of 2017. 156. The Applicant notes that this claim is made potentially contrary to the Court's conclusion in Konduru. With respect, to the extent the Court rejected the payment of a component of compensation (being interest on borrowed funds) because of the operation of s 49 of the Just Terms Act, that is wrong. It is wrong, at least in part, perhaps because of the approach taken to the claim in Konduru. 157. In Konduru the claim was made for the difference only between the interest paid on the borrowed funds and the statutory rate of interest. That had the potential to confuse the claim by conflating two different provisions. 158. As discussed above, a disturbance claim stands or falls based upon whether or not it fits within the requirements of- in these circumstances- s 59(1)(f). 159. The Court will be satisfied that it was reasonable to borrow funds in order to carry out the works and so as a consequence the claim for interest falls within the requirements of s 59(1)(f). 160. Confusion then arises if that component is then referred to as "interest". To maintain the distinction between the claim and s 49 interest, it may properly be described as "borrowing costs". Once s 59(1)(f) is satisfied, those "borrowing costs" are no properly being described as "compensation". 161. Once it is recognised that it simply forms a component of "compensation" then it is apparent that the regime for the payment of statutory interest "on any amount of compensation" cannot be said to reduce the amount of compensation otherwise payable. 162. Indeed, an emphatic approach was adopted by Tobias JA in McDonald at [136] where his Honour commented that how the statutory entitlement [to interest on an amount of compensation] can be used to deny, whether in whole or in part, compensation for loss attributable to disturbance "defies explanation". 163. With respect, that conclusion of Justice Tobias is both correct, and binding. 164. Once the Court is satisfied - as it will be - that the borrowing costs form part of the compensation, they are neither decreased because of the statutory interest regime nor denied.
7. During the course of his oral closing submissions, he addressed this point saying (Transcript 27 July 2017, page 141, lines 22 to 29, and page 141, line 38 to page 143, line 19): HEMMINGS: … We then come to interest. Your Honour deals with a claim for interest in Konduru and because of the statutory interest regime in s 49 of the Just Terms Act your Honour declined to award interest claimed in those proceedings for the funds borrowed. It's an almost precisely analogous situation. I either need to distinguish it and I can't or satisfy your Honour that, with the greatest respect, your Honour was wrong and your Honour was wrong because the applicant in those proceedings confused the Court. … We accept on the one hand there is an interest regime in pt 2 of the Act. On the other hand, there is a compensation regime in pt 3 of the Act. Importantly, the interest regime proscribes for the payment of interest on compensation. That's important because what tended, with respect, to me confuse on the last occasion was a cross-pollination between the concept of interest in 49 and the claim for interest under pt 3. For the purposes of the discussion we do this. Don't call the claim interest for the moment. Give it a different description so that the terms don't confuse. It is now a claim for borrowing costs. Ignore s 49 for a moment. The Court will do what the Court of Appeal tells us to do and will determine whether or not my borrowing costs meet the requirements of the five parts of 59(1)(f). Assume for present purposes the Court is satisfied that those borrowing costs meet the requirements of s 59(1)(f). Those borrowing costs therefore are properly described as compensation. The statutory regime then allows for the payment of interest on compensation and as soon as it is recognised that the compensation might include the borrowings costs and that the statutory regime is to allow for interests on the compensation, which includes borrowing costs, it is actually the opposite of the legislative regime rather than application of it to say I will not allow or reduce the borrowing costs because you are going to get interest. It confuses and conflates the two. The other thing that I didn't do and should-- HIS HONOUR: Let me just stop you there. Let's assume one applies the word "borrowing costs" to the interest on the loan. You then say that one should get interest under pt 2 on the borrowing costs as well, being interest. HEMMINGS: Yes. No, it didn't just on interest, but that's because-- HIS HONOUR: One is borrowing costs and the other is pt 2 interest. HEMMINGS: So one is, and that's why we do it in a step-wise way, because that's where, with respect, I didn't deal with it adequately and I didn't understand. I'm being as brutally honest as I can. Tobias Js quote that we'll go to in McDonald, compensation is a global description of all of the elements that one's entitled to. It's market value, it's special value, it's solatium, it's all those sorts of things. For example, solatium, an ex gratia payment that you get that you don't get from the acquisition date but you don't get for six months, you get statutory interest on it. A component of compensation, which is the payment of interest because in order to, and it has to meet 59(1)(f) first, but because I've had to incur costs to do work and part of the incurring of the costs includes the borrowing of funds and the consequence of the borrowing of the funds is additional cost, that forms my compensation. To then say in fact I will reduce the compensation, you're otherwise entitled to because you get statutory interest, ignores the words in s 49 because s 49 in fact is to - we should go to it. Section 49(1), "Interest is payable (subject to (2)," which is not relevant, "on any amount...land is acquired," and that's the timing mechanism. Then 50 tells us it's statutory interest. The Court might not find 59(1)(f) satisfied. All of this is predicated upon the fact that the borrowing costs are meeting the requirements of 59(1)(f). As soon as it is, because 59(1)(f) is one of the means, one of the methods by which you obtain 55(d), compensation, because of the operation of s 55 that borrowing cost is then merely the compensation as defined. This is a provision, the purpose of which is to increase the overall payment so that you get interest on compensation because you didn't get the money at the time the land was acquired, you didn't get it 'til some time later. As we say, with respect, a provision, the purpose of which is to make for a payment in addition to the compensation cannot and to the extent your Honour was led into error by us, me, came to the conclusion otherwise, with the greatest respect, your Honour was mistaken. Tobias J in McDonald was remarkably emphatic and understood now, if I might say with that background, if we go to the decision of the Court of Appeal in McDonald and go to para 136 - sorry - it's [2010] NSWCA 236 then go to 136, "Furthermore Talbot J was...disturbance defies explanation." With respect, it does, now properly considered, when we accept that the disturbance claim forms part of the compensation, this is the regime to get interest on that compensation, how the fact that you can get that interest can be used to reduce or offset the compensation, with the greatest respect his Honour is correct, defies explanation. It's a conclusion that is, as we say at 163, is with respect to his Honour, both - sorry, with respect to Tobias J correct and with respect to your Honour binding. As a consequence, your Honour would be satisfied that to the extent Konduru might suggest the interest payment is not available, that is wrong and your Honour will be satisfied that the interest is available.
8. I see no need to alter the conclusions that I set out on this point in Konduru. To the extent that anything further needs to be said, in addition to my adopting the portions of Konduru earlier set out, it is to add that, although Dr Konduru's commercial loan and the interest thereupon was for the fitting-out of her new medical centre premises in an urban setting, there is no functional difference between her position and that of Mr Melino, in that the moneys which have been borrowed and expended by him appear directed to the carrying out of his farming activities, activities which are, essentially, also commercial in nature.
9. It therefore follows that the loan establishment fee and interest differential claim fails. This conclusion is drawn as a matter of first principle without regard to whether or not the expenditure of the borrowed funds was on compensable items claimed.

Other s 59(1) claims

1. I note that, by email to my Associate on 23 August, the parties advised that agreement had been reached on s 59(1)(a) and (b) claims with this agreement being in the amount of $62,378.64 (including GST).

Conclusion

1. I have reached the following conclusion with respect to each of the contested items in these proceedings: 1. The claim for injurious affection for the cane fields on the eastern element of the Melino landholding is upheld. For the reasons I have set out, doing the best I can as the judicial valuer, the rate for this injurious affection is to be 17.5%, rather than the 35% agreed by the valuers for the "lifestyle lands"; 2. The claim for injurious affection for the wetlands on the eastern element of the Melino landholding is rejected; 3. The western element of the Melino landholding does not adjoin the eastern element for the purposes of s 55(f) of the Just Terms Act and thus there is no statutory basis to consider any claim for injurious affection to Lot 38 and Lot 1 at the northern end of that element of the Melino landholding; 4. However, if I am wrong as to the proper construction of s 55(f) of the Just Terms Act and the western element of the Melino landholding should correctly be regarded as adjoining the eastern element, on a proper analysis of the factual situation, there is no injurious affection to Lot 38 and Lot 1 when considered together as a consolidated site for the purposes of achieving a dwelling entitlement; 5. The claim for costs for the Colorbond shed, the modular steel cattle yards and the proposed new dwelling are rejected, as the appropriate value for the items of the same nature that have been acquired by the RMS and demolished is to be taken as reflected in the quantum of compensation payable by the RMS for the acquisition of the strip of land required for the Pacific Highway upgrade project; 6. The claim for the cost of the past and future construction of the access road to the site of the proposed new dwelling (on the basis of those works providing access to the proposed new dwelling), together with costs for future provision of electricity and fixed line telephone connections to the site of the proposed new dwelling are allowed. My allowing of the claim for the access road upgrade for the purposes of accessing the dwelling site is separate from my standalone consideration, on an alternative basis, leading to the conclusion that the costs of the access road upgrade should separately be allowed by virtue of being relevant to, and appropriate for, the continued undertaking of farming activities requiring to be supported by the plant and equipment stored in the new Colorbond shed; 7. The claim for the cost of past and proposed future works to elevate the low-level roadway element through the centre of the eastern element of the Melino landholding is separately allowed for access to the Colorbond shed (this compensation is to be calculated on the bases proposed by Mr Makin with the exception of the price for the imported fill where the upward revised quote is accepted in preference to Mr Makin's no upward time adjustment position); 8. The claim for design, development application and other regulatory or administrative costs associated with preparation of, and seeking development consent for, the proposed new dwelling are claimable as disturbance; 9. Costs claimed in connection with the abandoned proposal to relocate the existing dwelling on the eastern portion of the Melino landholding are rejected; 10. The claim for compensation for the lower rent achieved for the now-demolished house between August 2015 and acquisition by the RMS is allowed but is confined to the net loss of rent after allowing for deduction of agents fees/commission from the $365 per week rent rather than the gross difference of $115 per week; 11. The claim for lost rent post-acquisition is rejected; and 12. The claim for reimbursement of Mr Melino's loan establishment fee, and for any interest on the drawings on that loan, for the purposes of re-establishment of items such as the Colorbond shed; the steel cattle yards or the elevation of the linking roadway through the cane fields is rejected.

Directions

1. The parties are to provide my Associate, electronically, with settled terms of Short Minutes of Order to give effect to this decision: 1. The Short Minutes of Order are to be provided by the close of business on Wednesday 27 September 2017; 2. The matter is listed for mention in the LVC List on Friday 29 September 2017 at 9.15 am; and 3. If settled Short Minutes of Order are provided by 27 September as directed, I will make orders in chambers and vacate the mention on 29 September 2017.

ANNEXURE B Acts in force with text including "adjoins"

1. Coastal Management Act 2016 No 20 14. Mining Act 1992 No 29
2. Coastal Protection Act 1979 No 13 15. National Park Estate (Southern Region Reservations) Act 2000 No 103
3. Commons Management Act 1989 No 13 16. National Parks and Wildlife Act 1974 No 80
4. Crown Land Management Act 2016 No 58 17. Native Title (New South Wales) Act 1994 No 45
5. Crown Lands (Continued Tenures) Act 1989 No 7 18. Parliamentary Precincts Act 1997 No 66
6. Duties Act 1997 No 123 19. Petroleum (Offshore) Act 1982 No 23
7. Electricity Network Assets (Authorised Transactions) Act 2015 No 5 20. Place Management NSW Act 1998 No 170
8. Environmental Planning and Assessment Act 1979 No 203 21. Ports and Maritime Administration Act 1995 No 13
9. Environmental Planning and Assessment Amendment Act 2008 No 36 22. Rail Safety National Law (NSW) No 82a
10. Firearms Act 1996 No 46 23. Real Property Act 1900 No 25
11. Land Acquisition (Just Terms Compensation) Act 1991 No 22 24. Roads Act 1993 No 33
12. Local Government Act 1993 No 30 25. Transport Administration Act 1988 No 109
13. Local Land Services Act 2013 No 51 26. Water Management Act 2000 No 92 27. Work Health and Safety (Mines and Petroleum Sites) Act 2013 No 54 Acts in force with text including "adjoining"
14. Access to Neighbouring Land Act 2000 No 2
15. Australian Oil Refining Agreements Act 1954 No 34 37. National Park Estate (Lower Hunter Region Reservations) Act 2006 No 90
16. Brigalow and Nandewar Community Conservation Area Act 2005 No 56 38. National Park Estate (Reservations) Act 2002 No 137
17. Cabramatta Park Act 1922 No 35 39. National Park Estate (Reservations) Act 2003 No 24
18. Callan Park (Special Provisions) Act 2002 No 139 40. National Park Estate (Reservations) Act 2005 No 84
19. Coastal Management Act 2016 No 20 41. National Park Estate (Riverina Red Gum Reservations) Act 2010 No 22
20. Contaminated Land Management Act 1997 No 140 42. National Park Estate (South-Western Cypress Reservations) Act 2010 No 112
21. Conveyancing Act 1919 No 6 43. National Park Estate (Southern Region Reservations) Act 2000 No 103
22. Criminal Procedure Act 1986 No 209 44. National Parks and Wildlife Act 1974 No 80
23. Crown Land Legislation Amendment Act 2017 No 17 45. Oakdale State Coal Mine (Sale) Act 1968 No 66
24. Crown Land Management Act 2016 No 58 46. Parliamentary Precincts Act 1997 No 66
25. Crown Lands Act 1989 No 6 47. Petroleum (Offshore) Act 1982 No 23
26. Dividing Fences Act 1991 No 72 48. Plantations and Reafforestation Act 1999 No 97
27. Electricity Supply Act 1995 No 94 49. Port Kembla Inner Harbour Construction and Agreement Ratification Act 1955 No 43
28. Encroachment of Buildings Act 1922 No 23 50. Property NSW Act 2006 No 40
29. Environmental Planning and Assessment Act 1979 No 203 51. Public Works and Procurement Act 1912 No 45
30. Environmental Planning and Assessment Amendment Act 2008 No 36 52. Real Property Act 1900 No 25
31. Fire and Emergency Services Levy Act 2017 No 9 53. Residential Tenancies Act 2010 No 42
32. Firearms Act 1996 No 46 54. Retail Leases Act 1994 No 46
33. Fisheries Management Act 1994 No 38 55. Retirement Villages Act 1999 No 81
34. Glen Davis Act 1939 No 38 56. Roads Act 1993 No 33
35. Governor General's Residence (Grant) Act 1945 No 32 57. Rural Fires Act 1997 No 65
36. Growth Centres (Development Corporations) Act 1974 No 49 58. Strata Schemes Development Act 2015 No 51
37. Hay Irrigation Act 1902 No 57 59. Surveillance Devices Act 2007 No 64
38. Health Administration Act 1982 No 135 60. Swimming Pools Act 1992 No 49
39. Land Tax Management Act 1956 No 26 61. Sydney Bethel Union Extension Act 1908 (Private Act)
40. Landlord and Tenant (Amendment) Act 1948 No 25 62. Sydney Olympic Park Authority Act 2001 No 57
41. Law Enforcement (Powers and Responsibilities) Act 2002 No 103 63. Terrorism (Police Powers) Act 2002 No 115
42. Local Government Act 1993 No 30 64. Transport Administration Act 1988 No 109
43. Local Land Services Act 2013 No 51 65. Trees (Disputes Between Neighbours) Act 2006 No 126
44. Local Land Services Amendment Act 2016 No 64 66. Trustee Act 1925 No 14
45. Long Service Leave (Metalliferous Mining Industry) Act 1963 No 48 67. University and College Lands and Victoria Park Act 1924 No 36
46. Lotteries and Art Unions Act 1901 No 34 68. Valuation of Land Act 1916 No 2
47. Marine Safety Act 1998 No 121 69. Water Management Act 2000 No 92
48. Mining Act 1992 No 29 70. Western Lands Act 1901 No 70
49. Mosman Anzac Memorial Hall Act 1938 (Private Act)

Amendments 21 February 2018 - A typographical error in [236] was corrected. The correction is in the last line of the paragraph and corrects "as" to "was", "... borrowed funds was on compensable items claimed" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 February 2018