Mitchell v Roads and Traffic Authority of New South Wales; Beresfield Spares Pty Ltd v Roads and Traffic Authority of New South Wales

Mitchell v Roads and Traffic Authority of New South Wales; Beresfield Spares Pty Ltd v Roads and Traffic Authority of New South Wales - [2008] NSWLEC 258 - NSWLEC 1994 case summary — Zoe

[13]

JUDGMENT 1 Her Honour: The Applicant Mr Mitchell is the owner of land at 201 New England Highway, Thornton. By notice published in the Government Gazette on 12 May 2006 the Respondent (the RTA) compulsorily acquired part of Mr Mitchell's land for the purposes of the Roads Act 1993. Mr Mitchell has appealed to this Court under s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (the JT Act) (proceedings no 06/30847) seeking compensation for market value and disturbance. The Court must determine compensation under s 66(2) of the JT Act. 2 Prior to acquisition Mr Mitchell's land was 41,771.92m2 and after the acquisition 36,704m2. The land acquired was two narrow strips of 1,855m2 and 1,280m2 along the western or Weakleys Drive (formerly Minmi Road) frontage (lots 31 and 32 DP1091199), a narrow strip of land of 1,876m2 along the southern boundary of the land (lot 37 DP1091199) and a small triangular shaped piece of land of 56.29m2 in the south-eastern corner (lot 38 DP1091199). The total area acquired was 5067.92m2. 3 In addition to the land acquired on the western and southern boundaries, Mr Mitchell also argued the acquisition included the right of access from his land to the service road which adjoined his northern boundary until 2007. That service road is no longer available as a result of the roadworks now undertaken by the RTA. That this right of access was acquired is disputed by the RTA as no land along the northern boundary was acquired as part of this acquisition. 4 Mr Mitchell's land is occupied by the Applicant Beresfield Spares Pty Ltd (Beresfield) and is used by that company for the purposes of an auto wrecking yard. The business wrecks motor vehicles and conducts retail sales of wrecked vehicles as a whole or in parts. Mr Mitchell is also business manager and director of Beresfield. He described in his affidavit (sworn 22 April 2008) the nature of the business as it is conducted on the land. Beresfield has been operating continuously since 7 March 1960 on Mr Mitchell's land. 5 Damaged car bodies are located on the unimproved balance of land in the open, stored in rows so that forklift truck can get between the rows for the purposes of accessing those vehicles when required. Parts are salvaged and placed in the retail sales/store area. The cars are kept for large parts, such as doors, and when the car is no longer of use for spare parts it is crushed and sold as scrap. Beresfield has also appealed pursuant to s 66 of the JT Act (proceedings no 06/30848) seeking compensation for special value and disturbance. 6 The acquired land has been used for the public purpose under the Roads Act of the construction of the changed intersection of Weakleys Drive and the New England Highway. This work involves cutting off and altering the level of the land at Weakleys Drive with a retaining wall which prevents anyone using the access road on the northern boundary of Mr Mitchell's land. Access has been provided to the site from further south along Weakleys Drive on the western boundary and via a new road built on the acquired land on the southern boundary. 7 The acquired land is collectively known as lots 31, 32, 37 and 38 in Deposited Plan DP1091199. Mr Mitchell's land is now known as lots 17, 18 and 19 in DP1091199, lot 3 DP28565 and lot 2 DP653982. A plan is annexed and marked "A" identifying these respective lots. Before acquisition Mr Mitchell's land was known as lot 1 DP653981, lot 2 DP653982 and lots 3, 4 and 5 in Deposited Plan DP28565.

[22]

Mr McDonald/RTA 18 Mr McDonald argued that the appropriate rate to adopt in the before and after calculation is $55.00/m2 producing a diminution in value of $278,736.00 as the market value of the acquired land. Mr McDonald considered sale 3 (No 93 Weakleys Drive, Beresfield) was the most comparable sale and the only relevant sale. It is close to Mitchell's land, has the same zoning and is comparable in size. The sale demonstrated value of $65/m2. In his written evidence he adjusted the sale down when applying it to the subject land because the latter was affected by contamination $10/m2 and underground mining $2/m2 to derive a figure of $55/m2. He changed this calculation during the hearing to make no adjustment for underground mining. He still adjusted the sale downwards by $10/m2 for contamination to apply it to the subject land. In cross-examination he agreed that sale 3 had an inferior location compared to Mr Mitchell's as it only fronted Weakleys Drive. 19 The RTA submitted, based on Mr McDonald's evidence, that sale 3 was comparable with the subject land. In Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 82 ALJR 489 the High Court accepted Spencer v The Commonwealth of Australia (1907) 5 CLR 418 at 441 that the hypothetical vendor and purchaser are supposed to be "perfectly acquainted with the land, and cognisant of all circumstances which might affect its value, either advantageously or prejudicially …" when dealing with market value under the JT Act. Mr Tew did not consider the sale on the basis of an existing leasehold over its entirety. Mr McDonald considered the matter on the basis of a sale with vacant possession and also subject to a leasehold interest. 20 Mr Mitchell's land has poor potential for light industrial subdivision development as a result of the substantive risks due to underground mining as agreed in the joint report of the mining experts. Potential purchasers would consider these physical constraints affecting the use of the subject land. 21 A properly informed purchaser would be aware of the contamination problem and the range of remediation costs likely to be incurred, as identified by the contamination experts; Mr Caples estimates $467,500 and Mr Bozinovski roughly $290,000 (May 2006 prices). A prudent, hypothetical purchaser would make allowance for possible contamination costs because under the Contaminated Land Management Act 1997 an order requiring a clean up of contamination could be made. Sale 3 is not so constrained. 22 Of Mr Tew's sales, the RTA argued the analysis of sales 12 and 15 to find a 70 per cent difference between the two explicable solely by reference to an electricity easement on much of sale 15 is incorrect. The difference in price is due to the fact that the properties had very different features. The Cameron Park property (sale 15) has a different, inferior zoning and a different local government area to sale 12 and sold for less than a quarter of sale 12. Sale 12 has a 4(a) urban services with an area of 15,900m2. Mr Tew/Applicant 23 Mr Tew considered sale 3 because it was relied on by Mr McDonald. While comparable, he considered it was inferior to the subject land due to a substantial area affected by an easement and that it was under utilised. The sale demonstrated $67.50/m2, $70.85/m2 when adjusted for time, for the easement-free land. He considered the easement affected land should have a nil value. Other minor adjustments were made for topography, location and contamination. He derived $135/m2 for the subject land. A table (exhibit JJ) showed how he adjusted sale 3 upwards substantially when applying it to the Mitchell land as follows: (i) No easement affected land: the largest adjustment was $35/m2 (half of the total adjustment made) because the subject land was not affected by an easement whereas sale 3 was. (ii) contamination: adjusted upwards by $5/m2. (iii) englobo land: adjusted upwards by $10/m2 for englobo land meaning the reduced development risk for the subject land. (iv) development potential: sale 3 had greater development potential than it was currently used for and would need development consent so the value was adjusted upwards by $5/m2. The latter two categories appear to overlap. 24 Mr Tew considered a number of vacant industrial lots to derive a value for the acquired land. Sales 5 (72 Enterprise Drive, Beresfield), 6 (corner New England Highway and Government Road, Thornton) and 12 (corner Weakleys Drive and John Renshaw Drive, Beresfield). Sale 15 was also considered in relation to sale 12 as these two sales were said by Mr Tew to demonstrate the substantial reduction in the market for easement affected land. 25 Sale 5 at $149/m2 showed a value of $171/m2 adjusted for time. When analysed down in relation to the subject land due to the latter's smaller size, lack of superior services and absence of immediate development potential by $30/m2 , the subject land showed a value of $141/m2. 26 Sale 6 which had a superior zoning of 3(c) special business showed a rate of $217/m2 adjusted for time to $255/m2. This was adjusted down by Mr Tew for inferior zoning, lesser development potential, smaller size to derive a rate of $138/m2 for the subject land. Mr Tew considered the site was superior to the subject land in a number of respects but he considered it had a similar location with similar exposure. He then deducted a further amount for risk of contamination and mine subsidence to show a value of $113/m2 for the subject land. 27 Sale 12 sold for $194/m2. When adjusted for time the sale demonstrated $214/m2. This was adjusted down substantially by $75/m2 for development potential, services and size to arrive at $139/m2 for the subject land. 28 Sale 15 (27 Kalinga Close, Cameron Park) sold for $42/m2 which, adjusted for time, reduced to $39/m2. It was substantially affected by an easement and was adjusted upward by $70/m2 in relation to the subject site. Other adjustments upward were for topography, zoning, location and development potential. 29 Mr Tew argued that the appropriate rate to adopt for the Mitchell land in the before and after calculation is $135/m2 producing a value of $684,169.00 as the market value of the acquired land in lots 31, 32, 37 and 38 of DP109119. 30 In addition to Mr Tew's evidence the Applicant otherwise submitted that neither the mine workings nor contamination affect the value for the highest and best use of the land as a wrecking yard. Mr Tew did not consider sale 3 was directly comparable. He considered the vacant industrial land was more comparable in sales 5, 6 and 12. Mr McDonald was wrong to dismiss sales 5, 6 and 12 on the basis they needed to be subdivided. Mr McDonald has not properly analysed sale 3. Sale 3 is affected by a significant easement and that affects its value. Mr McDonald admitted in cross-examination that contamination was only an issue if there was an immediate requirement to remediate and there is not. The contamination has no impact on the continuation of the current use. He adjusted sale 3 twice for contamination in any event as the sale price already allowed for contamination. His analysis should be revised so that there is no reduction for contamination, lack of development risk is recognised by five per cent and superior location by $10/m2 plus an amount for englobo land.

[32]

(i) should whole of land be valued for highest and best use? 45 The RTA has argued that as 34 per cent of the site does not have development consent the whole property cannot be valued as able to be used for the agreed highest and best use in light of s 56(1)(c) of the JT Act. I consider the Applicant's construction of the relevant development consents at par 41-43 are correct. Accordingly, the development consent did relate to the whole of the Mitchell land in 1983, contrary to the conclusions of the town planners. 46 I also agree with the Applicant's alternative submission that there is no evidence that even if lots 1 and 2 did not have development consent there is evidence suggesting that would impact on the value of the land. Given the land's use for over 30 years as a wrecking yard with the knowledge of the Council and that lots 1 and 2 have been used largely for the storage of vehicle bodies I do not consider a prudent hypothetical purchaser would consider it a real risk that development consent would not be granted. Accordingly, the whole of the Applicant's property should be valued on the basis of its highest and best use. (ii) application of comparable sales 47 The valuers agreed that the valuation must be made on the basis of vacant possession. I agree with Mr McDonald that sale 3 is the most comparable sale for the subject site given its location close to the subject site. It has the same zoning (4(a) Urban Services zone) and is of generally similar size and has generally similar development potential. It is not part of an established industrial subdivision site, the same as the subject land, unlike sales 5, 6 and 12 relied on by Mr Tew. These sales required a large to very large adjustment downwards to render them applicable to the subject site, an indicator that they are not particularly comparable (see par 25-27). Reasons for their greater value included their superior location and far greater development potential. 48 I do not agree with all the adjustments made to sale 3 by Mr McDonald and Mr Tew in applying that sale to the subject site. 49 The main adjustment to consider in relation to sale 3 is in relation to the easement affected land. Mr Tew considered the easement affected land in sale 3 had nil value and also that it would affect the valuation of the balance of non-easement affected land because it could affect how drainage and stormwater flows were developed. He made a large adjustment of $35/m2 in relation to the subject land as a result because it is not affected by any easement. 50 He relied on a comparison between sale 12 at Beresfield in the 4(a) urban services zone which had an area of 15,904m2 and sold for $3.1 million and sale 15 at Cameron Park which was 18,478m2 in the 4(1) industrial zone under the Lake Macquarie LEP and sold for $780,000. I agree with the RTA's criticism of his reliance on sale 15 and sale 12 solely to demonstrate a low value for easement land. Sale 15 was at Cameron Park, which is a different area to Beresfield. It had a different zoning and was obviously in a quite different location. There could be several factors other than easement affectation of land in sale 15 which influenced the sale price. I consider Mr Tew's approach to the valuation of the easement resulted in too generous an adjustment upwards when valuing Mr Mitchell's land. 51 The RTA submitted that the easement land could be valued on the basis that it could be used for carparking, landscaping and access, inter alia. I agree that some value should be attributed to the easement land in sale 3 and that while there should be some adjustment of that sale upwards in relation to the subject land it should not be of the magnitude identified by Mr Tew. I consider $15/m2 is appropriate. 52 Other upward adjustments should be made for the lack of development risk of the subject land and superior location given the exposure to two major roads compared to sale 3. There is no need to adjust the sale down for contamination or underground mine workings given the agreement of the valuers that the highest and best use of the property is its current use. 53 I consider that sale 3 should be adjusted upwards as follows from $67/m2: (i) $15/m2 to allow for greater visibility given its exposure to Weakleys Drive and the New England Highway; (ii) $15/m2 to allow for the lack of easement affected land on Mr Mitchell's land; (iii) $10/m2 to allow for the superior development potential for the whole site. to derive an amount of $98/m 2. Applying this to the before and after areas of land the amount of market value is $496,656.16.

[34]

Applicant's submissions 55 The definition of special value does not refer to the person entitled to compensation being the same as the person claiming market value. Special value results from an attribute of the land so that a person entitled to compensation other then the person claiming market value can claim special value. 56 Beresfield claims special value under s 55(b) of the JT Act in the amount of $74,750. Part of Beresfield's business is the sale of whole vehicles which have been brought to the land. Mr Mitchell's affidavit sworn 22 April 2008 states that up to 35 motor vehicles were stored in this area at any one time. The vehicles were displayed in the north-western corner of the land as it abutted the corner of the New England Highway and Weakleys Drive. The elevated and open location made the vehicles visible to drivers on the New England Highway and Weakleys Drive. Both the location and visibility of such a display area provided a direct financial advantage to Beresfield as a consequence of affording the broad exposure to passing trade of vehicles displayed. Following the acquisition of the land along Weakleys Drive that area is no longer available. Further, to the extent that any area remains it will no longer be available for vehicle display due to the need to reconfigure the site. 57 Mr Mitchell, a director of Beresfield, held a motor vehicle dealers' licence which enabled him to take advantage of the site in a way not open to any member of the public, relying on Callinan J in Boland v Yates Property Corp Pty Ltd (1999) 74 ALJR 209 at [292]. 58 Mr Tew's evidence supported a claim for special value over an area of 650m2 which included 150m2 of land not acquired by the RTA. Mr Tew has calculated special value on the basis of a capitalisation of an estimated rental of 650m2 to arrive at special value in the amount of $74,750.00. RTA's submissions 59 The RTA denies any special value accrued to Beresfield as a consequence of the acquisition. Mr McDonald stated in the joint report (exhibit C) that s 55(b) was not applicable. Further, the claim relates to the use of an unimproved surface of part of the land acquired for the display and sale of damaged cars. The company is a lessee from the owner Mr Mitchell. If part of the leased land was used by the company for the display of damaged cars and this use was lawful such an activity can still be conducted on the residue land.

[36]

(ii) Special value available only if applicant also entitled to market value 61 In order for there to be a claim for special value, the claimant must also be able to claim market value. Beresfield is not entitled to claim market value. (The Applicant argued that while there must be a claim of market value for the land available, as there is for Mr Mitchell, so that special value is in addition to market value (see Mir Bros Unit Constructions Pty Limited v Roads & Traffic Authority of New South Wales [2006] NSWCA 314 at [84]) market value does not need to be attributable to the claimant for special value.) (iii) Added value not demonstrated 62 The financial accounts of Beresfield do not separate the income derived from the area in question or the income from the selling of registered as opposed to unregistered damaged cars, from the overall income of the business in the period of years examined by the business valuers: evidence of Mr Deane. It is therefore not possible for the Applicant, by reference to any direct evidence, to quantify the value of the alleged "special advantage". 63 The method adopted by Mr Tew is to assign an arbitrarily higher land value rate per square metre, based on an arbitrarily higher rental value of the particular land area (see par 58 and exhibit D) and to adopt $25/m2 rental value which is capitalised at 10 per cent to give an increased land value. No reasoning is exposed, and no comparable rentals are given. The rental level capitalised by Mr Tew yields a land value double that applied for the business as a whole. ($25/m2 capitalised at 10 per cent = $250/m2 land value compared to his adopted $135/m2 or Mr McDonald's $55/m2). The basis for this higher rent is not disclosed. It has no necessary or evident relationship with the ability to sell a number of cars from this part of the land which Beresfield leased from Mr Mitchell. (iv) no "special" characteristic required 64 More fundamentally, the ability to enjoy the special value and obtain financial advantage from it was said to lie in the fact that Mr Mitchell held a motor dealers' licence. At the date of acquisition such licences were issued under the Motor Dealers Act 1974. There is no dispute that Mr Mitchell held, as was claimed, a dealers' licence under the Motor Dealers Act. Section 10 of that Act provides the Director-General of the Department of Fair Trading may grant licences under the Act including "dealers' licences".

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68 A threshold issue to determine before considering any further arguments is whether special value can be claimed under the JT Act if market value is not claimed by the same person/entity. Mr Mitchell has claimed market value, not Beresfield, but the latter is claiming special value. The definition of "special value" is set out in s 57. The Applicant submitted that it is the land which must give rise to market value and to which special value attaches, not the claimant of market value. Special value can be claimed by the person entitled to compensation which is incidental to the person's use of the land. While in addition to market value, as specified in the definition in s 57, the definition does not specify that the person entitled to special value must be the same as the person who is entitled to market value. No authority was provided by the Applicant where the claimant for special value was not the owner claiming market value such as in this case where the tenant of acquired land has claimed special value. 69 I do not consider that submission can be correct in light of both the definition of "special value" in the JT Act and case law. The latter clearly states that special value accrues to the owner of land in addition to market value. Section 57 refers to the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person's use of the land. The definition does not literally state that market value must be claimed by the person also claiming special value. The definition refers to "the person entitled to compensation". The construction of the section in the context of s 55 and s 56 of the JT Act suggests that the person entitled to compensation means the person entitled to market value. Special value, while related to the land, must also relate to the person claiming it. It is not solely an attribute of the land which determines whether special value is claimable. I do not therefore accept the Applicant's submission that special value is largely an attribute of the land to sustain its argument that the person able to claim is not restricted to the person entitled to market value. 70 The cases referred to by the parties, Boland at [292] and Mir Bros at [71], refer to the owner of land being the person entitled to special value in addition to market value. In the discussion in Hyam, Alan A, The Law Affecting Valuation of Land in Australia (Sydney: The Federation Press, 2004) at pp 280-281, the consideration of special value is in the context of special value being to the owner. Only the owner of land can claim market value. 71 I do not consider Beresfield can claim special value. It is unnecessary that I determine the balance of the arguments concerning special value.

[42]

77 Mr Mitchell argued that as a consequence of the acquisition the access has been relocated to Weakleys Drive further to the south. He claims as disturbance under s 59(f) that in order to maintain the business' exposure to the New England Highway and to provide suitable access and parking for light and heavy vehicles it is necessary that Mr Mitchell undertake works generally comprising: (i) Provision of separate vehicle access to the site for heavy and light vehicles; (ii) The demolition of part of the dismantling shed to enable the provision of access, parking, setback and landscaping; (iii) The relocation of the floor space of the dismantling shed to the east of the existing dismantling shed; (iv) The demolition of the buildings fronting the northern boundary of the subject site between the dismantling shed and the sites boundary (comprising 2 storage areas, retail building and caretaker's residence); (v) The erection of a new retail sales building facing the New England Highway. (vi) The creation of customer car parking to the north and west of the dismantling shed and new retail building; (vii) Relocation of transpiration bed (agreed by RTA); (viii) Internal fencing along the eastern and western access points; (ix) Widening of the southern road. 78 These works have been the subject of a development application which was approved by this Court on 24 April 2008. The cost of the works the subject of that application has been calculated by a quantity surveyor at $1,703,300 (items (i)-(vii), see exhibit G) and the southern road works (item (ix)), at $779,309. It was submitted that these works reflect the advice received from the Council about its requirements under the relevant planning instruments that the landscaping is less than that required by the relevant development control plan. Further the access is as required by the RTA and the Council (see exhibit HH). 79 The Beresfield claim under s 59(f) arises from the necessary changes to the conduct of the business on the residue land. These are a result of the reduction of land area available following the changed access, internal access roads and landscaping required by the development consent granted by the Court. The loss of the storage area, consisting of the acquired land, has been accounted for in the market value of the land acquired. This part of the claim concerns the impact on the residue land of the changed arrangements necessitated by the acquisition. The new access roads for light and heavy vehicles now take up part of the land area of the residue land so that there is less area available for the storage of vehicles. Landscaping was required to be provided pursuant to the Council's instruments and also by the Court when it granted approval and this takes up more land area. The business losses claimed are as calculated by Mr Tew.

[43]

80 The RTA disputes that any interest in land beyond the four lots identified in the gazettal notice on the southern and western boundaries of Mr Mitchell's land have been acquired. The actual use of land on those lots was for the storage of damaged cars in the open air and as the site of part of a transpiration bed. As that land was also not used for access to the site none of the other matters arise as a direct and natural consequence of the acquisition either. Disturbance in relation to these items if proven is not disputed. Mr McDonald identifies the cost of moving the vehicles off the acquired land as $12,000 as compensation payable to Beresfield under s 59(f). The RTA does not consider the balance of matters he identifies at p 39 of exhibit C as compensable. In relation to Mr Mitchell, Mr McDonald identifies the transpiration bed relocation as compensable under s 59(f) and the RTA agrees. The remainder of the disputed disturbance claims are disputed. 81 The RTA otherwise submitted that access across the northern boundary of Mr Mitchell's land was across lots 7 and 8 DP237977 which are owned by the RTA (acquired by way of agreement in 1969). No acquisition notice has been published in relation to these lots. There is no jurisdiction for the Court to consider a different claim in respect of which no compensation notice has been published. 82 Two aspects of this issue arise for consideration but one does not necessarily follow from the other: (i) whether the northern access to the residue land is an "interest in land" under the JT Act requires determination; (ii) a related but separate issue is whether that interest was acquired as part of this acquisition process. Even if I find that an interest in land within the meaning of the JT Act existed at the date of acquisition there is a real issue as to whether it was acquired. Whether both matters are determined in the Applicants' favour or not, the issue then arises of whether the amounts sought as disturbance are recoverable in whole or in part under s 59(f) in light of Peak, or on some other basis. If any disturbance is recoverable, the amount must also be determined. (i) is the northern access from the service road an "interest in land" under the JT Act? 83 Section 4 of the JT Act defines land as including an "interest in land". Interest in land is defined as: interest in land means: (a) a legal or equitable estate or interest in the land, or (b) an easement, right, charge, power or privilege over, or in connection with, the land.

[45]

Evidence of long-term access on northern boundary 85 The documentary evidence relied on by the Applicants discloses the following: (a) Prior to 1958 the New England Highway was a dual carriageway (one lane west and one lane east). (b) Mr Mitchell's land (and the land to the east) enjoyed direct access from the highway. (c) In 1958 the Department of Main Roads (the DMR), predecessor to the RTA, acquired the land fronting the New England Highway pursuant to a road widening order (the 1958 acquisition). The land acquired at that time was dedicated as a public road. (d) After the 1958 acquisition Mr Mitchell's land (and land to the east) continued to enjoy access from the New England Highway. (e) In 1969 the DMR acquired further land from Mr Mitchell (the 1969 acquisition). The land acquired was for road purposes, with the intention of providing what was then known as the "Beresfield deviation". The 1969 acquisition from Mr Mitchell, by way of agreement for sale, was for lots 7 and 8 of DP 237977 (being the land north of present lots 3 and 17) and for lots 5 and 6 in DP 237977 from Mr and Mrs Lees (being the land north of present lots 19 and 2). (f) Upon acquisition of the land the RTA constructed an access road along the northern boundary for access to Mr Mitchell's land and the land to the east. The access road ran parallel to the New England Highway and entry to the access road was from Weakleys Drive (formerly Minmi Road), near the intersection with the New England Highway. (g) The road was the sole vehicular access to the business of Beresfield Spares and residential properties to the east. The road was maintained by the Council. (h) The Applicants have by themselves, their customers and staff continued to access the land via the northern access road since its construction until it was removed some time in about 2007, that is, for 37 years. (i) As a consequence of the road works at the intersection of Weakleys Drive and the New England Highway, the access road has been removed and access is no longer available over the northern boundary of the Mitchell's land. Access is now via either an access point on Weakleys Drive or off the road (proposed public road) which runs along the realigned southern boundary of Mr Mitchell's land.

[48]

89 The Roads Act defines a public road as: Public road means: (a) Any road that is open or dedicated as a public road, whether under this or any other Act or law; and (b) Any road that is declared to be a public road for the purposes of this Act. 90 The Savings and Transitional Provisions of that Act provides: Existing public roads: (15) Any road that, immediately before the relevant commencement, was a public road is taken to be a public road within the meaning of this Act. 91 Where a road is a public road the adjoining owner has the statutory rights of access provided for in the Roads Act. In particular, s 6 provides: 6 Right of access to public road by owners of adjoining land (1) The owner of land adjoining a public road is entitled, as of right, to access (whether on foot, in a vehicle or otherwise) across the boundary between the land and the public road. (2) The right conferred by this section does not derogate from any right of access that is conferred by the common law, but those rights are subject to such restrictions as are imposed by or under this or any other Act or law. 92 Prior to the commencement of the Roads Act the creation of a public road was governed by other legislation including the Local Government Act 1919 (the LG Act) and the Main Roads Act 1924 (both of which are now repealed). 93 The land acquired in 1958 on the northern boundary of Mr Mitchell's land (see par 85) was dedicated as public road under the LG Act. The status of this land as a public road is not disputed. The 1969 acquisition is argued by the Applicant to be a public road because of the operation of the Main Roads Act. The definition of "public road" in that Act stated that it included "proposed public road or proposed deviation" (s 3). "Main road" is similarly defined as including "a proposed main road or proposed deviation thereof". The Applicant's arguments rely on s 27D and E of the Main Roads Act in Part VB of that Act as in force in 1969. 94 Section 27D of the Main Roads Act provided: In this Part "re-alignment" means any alteration of the alignment of a main road for the purpose of widening the road and "re-aligned" has a corresponding meaning.

[55]

101 The RTA relies on an internal (departmental) sketch of lots 1 - 4 of DP 28565, compiled from the Department of Main Roads NSW and dated 7 February 1968 (exhibit B, tab 29). This sketch illustrated the proposed "Beresfield deviation" of the New England Highway in 1969 and the land to be acquired in order to facilitate it. The land acquired in 1958 is noted as being "dedicated as Public Road by DP28565". Another departmental sketch dated 21 April 1970 identifies a service road 40 feet wide separate to the New England Highway to the north of Lots 1 and 2 DP 28565. 102 A statement of Mr Steve Bates, Senior Property Officer for the RTA, dated 16 April 2008, was read by the RTA. Mr Bates maintains the records of the status of land for the RTA and also did so for the DMR. He attests that there has never been a proclamation by the Governor or dedication under the LG Act or Main Roads Act or any other Act that the service road to the north of Mr Mitchell's land was a public road. A title search would show that it remained in the ownership of the DMR/RTA. Nor has any DP been registered for the service road stating that the land is a public road. Deposited Plan 237977 does not do so. In 1967 the Beresfield deviation was approved by the DMR and required access to and from the New England Highway from the land acquired in 1958. Additional land acquisition within lots 1 - 4 was also necessary. DP 237977 was registered as lots 5 - 8 were then acquired in 1969. Part of the land acquired by the DMR in 1969 was included in the Beresfield deviation roadway. The remainder of the land acquired lay between the southern boundary of the reconstructed New England Highway and the northern boundary of the land comprising part of former lots 1 - 4 inclusive in the 1958 plan. The land acquired in 1969 (lots 5 - 8, being the land north of lots 1 - 4) was used as a service road, albeit with no street lighting or drainage as would be typically provided for in a public road. Part of the service road was sealed by the DMR. Applicants' submissions 103 If the northern access road was a public road, that interest was acquired when the Applicants lost their ability to use it as a result of the acquisition. In Minister for Education and Training v Tanner (2003) 128 LGERA 281 it was held that a loss of access to a public road is an "interest in land" for the purpose of s 4 of the JT Act. 104 The lands identified in DP237977 (see par 99) were acquired in 1969. The Certificate of Title issued after the 1969 acquisition identified the residue of the land after acquisition as fronting the New England Highway. The purpose of this acquisition was for the purposes of facilitating the "Beresfield deviation." The Beresfield deviation included a proposal to divert the New England Highway south easterly along the route of the deviation. 105 The Main Roads Act, as it applied in 1969, defined a main road as including: "a proposed main road or proposed deviation thereof". "Public road" includes proposed public roads and proposed deviations. The definition of "public road" in the LG Act is inclusive and not exhaustive of the manner in which a road may become a public road. Part VB of the Main Roads Act provided for the widening of main roads by realignment. Realignment of a main road was to be effected by lodging a plan in the office of the Registrar-General, with the Department of Lands and with the Valuer-General. Thereafter realignment was to be effected by acquisition. Acquisition could be achieved by a number of methods including the purchase or resumption of the lands affected by the realignment. The 1958 acquisition resulted in the creation of a public road through widening or opening. The 1969 acquisition resulted in a public road though acquisition. The provisions of the Main Roads Act applied notwithstanding the provisions of any other Acts. This consequence is also evidenced by the notation on DP 545676 (see par 100). Upon acquisition of the land in the deposited plan the road was widened and thereafter formed part of the existing public road.

[56]

106 On the date of acquisition in 1969 these acquired lots became a public road and continued as such until the date of acquisition in 2006, the subject of these proceedings, by virtue of the operation of the Savings and Transitional provisions of the Roads Act. RTA's submissions 107 The evidence of Mr Bates and the documents referred to on the RTA file confirm that the land acquired in 1969 immediately to the north of Mr Mitchell's land did not become public road. 108 In DP 28565 only a small part of what was acquired by purchase in 1969, that is lots 7 and 8, was needed for realignment of the New England Highway. Sketch plans on the RTA's files demonstrate this (dated 7 February 1968, see par 101). 109 There was no automatic vesting or opening of a public road over land acquired by the DMR as the realignment method under s 27E(2) was not used in the 1969 acquisition. There was no other provision of the Main Roads Act or the LG Act which automatically declared land acquired by the DMR to be a main road or a public road. The realignment method requires the registration of a plan approved by the Governor and its gazetting. Owners are notified and thereafter their titles are affected. Building on the proposed realigned area of their land is prohibited: s 27E(3), (4) and (6). The registration of the realignment plan is essential to the realignment method. Under the realignment method compensation was payable when the s 27E notice was served (if vacant land) or when the land was cleared of buildings (if not). At that time the land in the plan is vested in the Council for the public road: s 27E(5). 110 The Applicants submitted s 27E(4), which requires the registration of the plan, applies not only to the realignment method but also to realignment by the alternative method being simply an "acquisition under this Act" referred to in s 27E(2). This is incorrect. Subsection 27E(4) is one of the "succeeding provisions" referred to in s 27E(2), which apply only to the realignment method. 111 There was no automatic vesting or opening of a public road over land acquired by the DMR, when the realignment method was not used. The realignment or alteration of the alignment of the New England Highway (a main road) did not affect the whole of the land acquired by the DMR in 1969. 112 The unregistered plans in exhibit B (at tab 29, see par 101) illustrate the limit of the widening of the highway to create the motorway adopted by the DMR in 1969-1970. This plan notes the extent of existing public road. It does not abut the Applicant's northern boundary. 113 The reference to "proposed main road or proposed deviation thereof" in the definition of "Main Road" in s 3(1) of the Main Roads Act relates in this case to that area of the acquired land in lots 7 and 8 DP 237977 actually proposed, required and used for the highway deviation. This did not include the land between the deviation road and the land immediately north of the residue of Mr Mitchell's land which he sold to the DMR in 1969. 114 Further s 196 of the Conveyancing Act 1919 as then in force applied and was not complied with so that the land cannot be a public road. Finding on public road 115 There is no dispute that the land acquired in 1958 on Mr Mitchell's northern boundary became a public road. In issue is whether the land purchased in 1969 by the DMR on Mr Mitchell's (and Mr and Mrs Lee's) northern boundaries became a public road. 116 Under the savings and transitional provisions of the Roads Act, a public road when that Act came into force continues to be so. There is a right to access the public road under s 6. The Applicant maintains that the relevant land did become a public road in 1969 when it was acquired because of s 27E(2) of the Main Roads Act, which refers to acquisition in addition to the realignment method. The effect of s 27 of the Main Roads Act is disputed as the RTA argued that only by the realignment method can the necessary plan under s 27E(4) come into effect. This can occur only for the realignment method, not for acquisition. That construction of ss (2), given the reference to "or under the succeeding provisions of this section relating to the re-alignment method of acquiring land", suggests that the plan referred to in ss (4) relates only to the realignment method which was not the same as the acquisition undertaken in 1969. The RTA's submission on the effect of s 27E at par 109 - 110 is correct. 117 The Applicant relied on the certificate of title (see par 99) which identifies all the land on the northern boundary as the New England Highway and the notation in DP 237977 that the acquired land can be shown as "road" on a certificate of title. A road does not automatically become a public road under the Mains Roads Act or the LG Act as then in force. This is confirmed by s 196 of the Conveyancing Act as then in force which provided that: (1) In this section the expressions "public road", "road", and "subdivision" have the same meaning as, unless inconsistent with their context or subject matter, they respectively have, or shall have, in the Local Government Act, 1919 as amended … (2) Every person who by any Act is required to procure the registration of a plan of a public road or of a subdivision shall lodge in the office of the Registrar-General a plan of the road or subdivision. … (7) Every plan lodged in pursuance of this section shall contain a statement showing whether: (a) any, and, if any, which of the roads shown on the plan are intended to be dedicated to the public; … (14) This section applies to land under the provisions of the Real Property Act, 1900.

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120 The evidence of Mr Bates of the RTA is that there has been no declaration as a public road of the land on the northern boundary of the land acquired from Mr Mitchell in 1969 under either the Main Roads Act or the LG Act (which was not relevant to the 1969 acquisition). The history of the relevant documents relating to the acquisition in 1969 are attached to his statement and confirm that is the case. While part of the land acquired in 1969 became part of the New England Highway not all of it did as the land on the northern boundary was not required, according to the DMR sketches. Mr Bates' evidence is that had someone inquired of the RTA whether that road on the northern boundary was a public road, he or she would have been told it was not. His conclusion should be accepted given the documentary evidence and his occupation as senior property officer at the RTA and the DMR for 17 years. 121 Further, the physical changes to the land immediately after 1969 confirm the RTA's argument that the New England Highway did not include the land immediately abutting the northern boundary of Mr Mitchell's land. That land was physically separate from the highway and described as a service or local road in the plans referred to in argument. It was accessed from Weakley's Drive from that time. 122 Newcastle City Council undertook maintenance of the road but no conclusion that it was a public road can be drawn from that. As submitted by the RTA, if the land had been vested in the control of Newcastle City Council an acquisition notice would have been issued to the Council and one has not been. 123 I therefore agree with the arguments of the RTA that there has been no dedication or determination that the land acquired in 1969 from Mr Mitchell, which immediately abuts his northern boundary, was then or has been dedicated since as a public road. No interest in land on this basis therefore existed on his northern boundary. Licence 124 The RTA admits there was a "bare" licence to use the service road on the northern boundary of Mr Mitchell's land from 1969. There is no evidence that the licence had been terminated before the date of acquisition so that it existed up to and on that date. The RTA argued that the licence was gratuitous and terminable at will and not a right in rem, relying on Ashfield Municipal Council v Roads and Traffic Authority of New South Wales (2001) 117 LGERA 203 at 215; Lewis v Bell (1985) 1 NSWLR 731. 125 I consider there is no distinction in the definition of "interest" in s 4 of the JT Act between a right in rem or a right in personam so that arguably there is an interest created in land by the bare licence, as submitted by the Applicant. It is ultimately unnecessary that I finally determine this issue in light of my finding in the next section that no interest in land on the northern boundary was acquired by the RTA in relation to the acquisition the subject of these proceedings.

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(a) vested in the authority of the State acquiring the land, and (b) freed and discharged from all estates, interests, trusts, restrictions, dedications, reservations, easements, rights, charges, rates and contracts in, over or in connection with the land. 39 Claim for compensation (1) A person who wishes to claim compensation under this Part must lodge a claim in accordance with this section with the authority of the State that is acquiring the land concerned. (2) A claim for compensation must be in the form prescribed by the regulations or (if no such form is prescribed) in the form approved by the Minister. (3) The claim form may require information to be verified by statutory declaration. (4) A claim for compensation may be withdrawn by the claimant. 42 Notice of compensation entitlement and offer of compensation (1) An authority of the State which has compulsorily acquired land under this Act must, within 30 days after the publication of the acquisition notice, give the former owners of the land written notice of the compulsory acquisition, their entitlement to compensation and the amount of compensation offered (as determined by the Valuer-General). 43 Particulars to be included in notice of compensation entitlement and offer of compensation A compensation notice given to a former owner of land must: (a) be in the form prescribed by the regulations or (if there is no prescribed form) the form approved by the Minister, and (b) notify the owner that the land has been compulsorily acquired, and (c) state that the owner is entitled to compensation, and (d) offer to pay a specified amount of compensation as determined by the Valuer-General and be accompanied by a form of deed of release and indemnity for completion if the offer is accepted, and (e) inform the owner of the right to object to the amount offered. 45 Deemed acceptance of offer of compensation (1) If a person entitled to compensation under this Part does not, within 90 days after receiving a compensation notice: (a) accept the amount of compensation offered by the authority of the State, or (b) lodge with the Land and Environment Court an objection to the amount of compensation offered, the offer of compensation is taken to have been accepted.

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Acquisition documents 128 The sections of the JT Act above prescribe the steps that must be followed prior to and following a compulsory acquisition. The following steps took place. (i) Proposed acquisition notices (PANs) were sent to the Applicants on 31 January 2006 pursuant to s 11 of the JT Act. These stated the land to be acquired: Schedule Lots 31, 32, 37 and 38, Deposited Plan 1091199, being parts of the land in Certificates of Title Auto Consol 7900-141, 5-28565 and 1-653981 respectively (ii) The Applicants completed compensation claim forms pursuant to s 39 of the JT Act. The description of land in these was "Lots 31, 32, 37 and 38, Deposited Plan 1091199, being parts of the land in Certificates of Title Auto Consol 7900-141, 5/28565 and 1/653981 (presently Volume 11370 Folio 47 respectively)." The claim lodged by Mr Mitchell stated that disturbance was claimed for: financial costs reasonably to be incurred relating to the relocation/reconfiguration of buildings involved in the actual use of the land, as a direct and natural consequence of acquisition… The claim lodged by Beresfield stated that disturbance was claimed for business operations on a certain basis if disturbance did not exceed 12 months and the full value of goodwill of the business if disturbance of business operations occurred for over 12 months. (iii) The acquisition notice referred to in s 19 was published in the Government Gazette on 12 May 2006. The descriptions of the land then acquired by virtue of s 20 are identical to those in the PANs and the compensation claim form, apart from the words in brackets in the latter which are the current title reference. (iv) The Valuer-General issued his determination of compensation in respect of lots 31, 32, 37 and 38 in DP1091199. (v) The compensation notice for Mr Mitchell sent on 19 June 2006 pursuant to s 42 offered the amount of $844,000 as compensation and stated: If this amount of compensation is acceptable you should: (i) sign the attached forms … (iii) if you have not returned the claim for compensation (form 2) you must send it with the acceptance forms, otherwise compensation cannot be paid to you." … "Payment of the compensation will be made in full within 28 days of you signing and returning properly completed:

[62]

The annexed deed of release and indemnity; 2. The direction as to payment form, and 3. The instrument for the restriction as to user. 129 Attached to the notice was a Deed of Release and Indemnity stating: WHEREAS A. By acquisition notice published in the Government Gazette of 12 May 2006 the land described in the schedule hereto was compulsorily acquired by the RTA. B. The Releasor has agreed to accept compensation offered by the RTA and to enter into this deed pursuant to the provisions of the Land Acquisition (Just Terms Compensation) Act 1991. NOW THIS DEED WITNESSES: 1. The Releasor: (a) accepts the sum of $844,000 compensation offered in the RTA's compensation notice dated 19 June 2006, together with statutory interest, in full satisfaction for the acquisition by the RTA of the Releasor's interest in the land described in the schedule hereto; (b) confirms that the nature and extent of the Releasor's interest has not in any way altered from the interest disclosed in the claim for compensation signed by the Releasor and dated 7 April 2006; (c) confirms that the Releasor will not in any manner attempt to dispose of the interest in the land compulsorily acquired by the RTA; and (d) acknowledges that the compensation is subject to the Releasor entering into a restriction as to user pursuant to Section 88(E) of the Conveyancing Act 1919 relating to the restriction of access from the residue of the property owned by the Releasor to part of the land described in the schedule and that the Releasor has signed a restriction as to user which the Releasor acknowledges is to be lodged on the title of the residue of the Releasor's land. 2. In consideration of the payment by the RTA of the amount of compensation and statutory interest set out above the Releasor:- (a) hereby releases unconditionally and forever all claims, demands, entitlements which the Releasor has or asserts to have or could, would or might but for this release have against the RTA for or in respect of the compulsory acquisition of the land described in the schedule and for the granting of the restriction as to user; (b) agrees to indemnify and keep indemnified the RTA from and against any and all claims that may be made against the RTA in respect of the said compulsory acquisition, including any claim by any person who establishes a superior interest to the interest claimed by the Releasor in the land described in the schedule. …

[64]

The compensation notice sent by the RTA to Beresfield did not refer to a s 88E(3) instrument concerning restriction on the use of land (and offered, appropriately, a lesser amount of compensation). Applicant's submissions 131 The Applicant argued that an interest in land which has been acquired does not have to appear in the acquisition notice published in the gazette; see Tanner. In that case the interest acquired in the land was not referred to in the acquisition notice (I note the interest was founded in the land that was specified in the acquisition notice, unlike in this matter). It is clear when the circumstances of the case are considered that an interest in land which was the northern access to the property was acquired. (i) The document entitled Grade-separated interchange at Weakleys Drive Review of environmental factors (REF) (dated August 2005, tab 3 of exhibit B) for the inter-change at Weakleys Drive produced by the RTA in August 2005 referred specifically to changes in the proposed access for Beresfield Spares: "No access from the frontage road (will be removed for widening of the New England Highway)" (at p 100). The pre-acquisition valuation by the Valuer-General (see exhibit QQ) which formed the basis for the offer of compensation to Mr Mitchell considered that the interest in the northern land was to be acquired. There are several references in the valuation to the change of access as a result of the northern boundary access being removed and recognition that would result. (ii) The RTA's valuation (Wolthers report) also refers to the loss of access to the highway from Mr Mitchell's land. (iii) Upon the issuing of the PANs (pursuant to s 11) Mr Mitchell and Beresfield made their claims for compensation (exhibit 12). They claimed compensation for the loss of their interest over the northern land. (iv) At no time was it suggested that this basis of the claim was in error. Rather, the Acquisition Notice and the Determination of Compensation proceeded on the same basis as Mr Mitchell and Beresfield. (v) The pleadings also confirmed this approach. In fact the Applicants were not aware this would be disputed until the RTA's traffic expert stated in a joint conference with the Applicants' traffic expert that he had been instructed not to assume the access road was a public road.

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132 The Applicant argued that the RTA's submissions relating to the deed of release and indemnity and the offer of compensation seek to dissect those notices rather than read them as a whole. On a true construction it is apparent: (i) When read as a whole in their context the offer is "conditional" on the claimant accepting the conversion of their interest into monetary value which conversion included the entering into the Deed of Release and the s 88E instrument. (ii) The s 88E instrument relates to the whole of the land referred to in the title documents on the first page: Auto Consol 7900-141 and 18/1091199. Access is to restricted along Weakleys Drive and also along the northern boundary of the Applicant's land. (iii) If the RTA's submission that the land is limited only to the land which accesses Weakleys Drive is correct, those words need to be implied into the s 88E instrument. Once registered the document speaks for itself and is incapable of interpretation in the manner contended for by the RTA. (iv) The reference to "part" in the s 88E instrument (see par 130) is not a reference to the land to which the restriction relates but rather to the location of the road to which the indemnity and the s 88E instrument refer. (v) There is no warrant in any of the documents to accept the contention that the restriction was on access from lots 17 and 18 DP 1091199 to the acquired lots 31 and 32 along Weakleys Drive only. Rather, the reference to Weakleys Drive and the highway make it plain that what was intended was to give effect to the terms of the DP restricting access along both the northern and western boundaries of the entirety of Mr Mitchell's land. (vi) Such position is confirmed in the DP at tab 10 of exhibit B (see par 99) which was for the purposes of the acquisition and identifies the land for the controlled access road which does not include any part of the highway. RTA's submissions 133 The 1969 acquisition of part of Mr Mitchell's land on the northern boundary of his property extinguished any claim for compensation based on loss of access. That is clear from the release signed by Mr Mitchell at that time. 134 In terms of this acquisition, the PAN sent to Mr Mitchell pursuant to s 11 specifies the land to be acquired as lots 31, 32, 37 and 38 in DP 1091199. That is a complete description of what was purchased. The same description was contained in the claim for compensation forms lodged by both Applicants under s 39 of the JT Act. The same description appeared in the gazetted acquisition notice and the Valuer-General's determination of compensation. 135 The deed of release and indemnity sent to Mr Mitchell refers in cl 1(d) to a proposed s 88E instrument. That instrument is separate to the acquisition of land under the JT Act and is an invitation to execute the proposed s 88E instrument. It is necessary because, as stated in the panel in DP 1091199 (sheet 1 of 8, tab 11 of exhibit B) concerning the intention to create easements and restrictions, certain lots in the current DP including lots 31 and 32 are required for controlled access roads under s 49 of the Roads Act. That Act and section provide for the declaration of any main road, inter alia, to be a controlled access road. Section 68 of the Roads Act provides for the payment of compensation to the owner of the land for any loss or damage arising from the loss of access. No action has yet been taken under the Roads Act to have the road declared a controlled access road. The panel on DP 1091199 also stated that access will be restricted across the boundaries marked R, S and T (the whole frontage of residue land to Weakleys Drive and the New England Highway). This identification is solely referable to the statement of intention to require land for controlled access roads under the Roads Act. The inclusion of the s 88E instrument as part of the deed of release was in anticipation of the Minister declaring a controlled access road under the Roads Act and is separate from the deed of indemnity and release relating to the acquisition. As it was not signed by Mr Mitchell it has not come into effect in any event. 136 Further the instrument has not been executed and has not come into effect. In these circumstances it cannot provide any definition of the land/interest in land the subject of the acquisition. In addition, if the road had been a public road in relation to which the Council had responsibility there would have been an acquisition notice issued to the Council. 137 The Applicants' claims for disturbance due to loss of access are based on the Court making a finding by implication on the evidence. That is untenable given the clear statutory process for the acquisition of land set out in the Act.

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Finding on whether interest in land (northern access) acquired 138 The Applicants relied on Tanner to argue that an interest in land does not have to be specified in an acquisition notice to be the subject of a claim for compensation under the JT Act. In that case the Minister for Education acquired land on which was a public road. Tanner's land adjoined the acquired land but had not itself been acquired. The effect of the acquisition was that the road ceased to be a public road (s 41 Roads Act) and so Tanner's right to access it was extinguished. It was determined that the ability to gain access to that acquired land from the adjoining land was an "interest in land", and so was a compensable interest. The significant difference between that case and this one is that the land acquired from Mr Mitchell referred to in the acquisition notice and the gazette notice did not include any land on the northern boundary of his property. The interest in land I have found to exist in relation to land on the northern boundary is not land referred to in the formal acquisition process under s 11, s 19, s 39 and s 42 of the JT Act. 139 The RTA was already the owner of the land on the northern boundary of Mr Mitchell's land having purchased it in 1969. The northern access to Mr Mitchell's property was cut off sometime in 2007 as a result of the road works carried out at the Weakleys Drive intersection, separate to this acquisition process. No specific correspondence has been tendered by the parties in relation to the exact circumstances surrounding the cut off of the northern boundary of Mr Mitchell's land but I have been told that notice was given to Mr Mitchell that this would occur. The northern access road was cut off after the new access from Weakleys Drive and the new road on the acquired land on the southern boundary were constructed. As submitted by the RTA if the four lots the subject of the acquisition notice had not been required so that no compulsory acquisition process was undertaken at all, it is difficult to see how Mr Mitchell would have had any claim available to him under the JT Act when his northern boundary was cut off. 140 The RTA submits, correctly, that the Applicants are arguing that the acquisition of the interest arises by inference separate from the acquisition process. Apart from Tanner, no case was referred to by the Applicant to support its case. Despite considerable research there is no case where, in a statutory compensation scheme in NSW and other Australian jurisdictions, acquisition by inference has been recognised in the absence of any reference in the statutory acquisition process to acquisition of the physical land over which the interest in land arises. 141 In relation to the documents relied on by the Applicants in their argument (par 131), documents prepared in relation to the roadworks at the Weakleys Drive intersection by the RTA such as the REF are not steps in the acquisition process under the JT Act. The valuation reports prepared for the RTA and the Valuer-General refer to loss of access across the northern boundary taking place. It is likely that at the time these were prepared it was considered that the service road on the northern boundary was a public road so that there was a right of access from it to Mr Mitchell's land as provided for under the Roads Act. Even had I found that to be the case, and I have not, the issue would still arise as to whether in this acquisition process there was an acquisition of an interest in land given that no acquisition of land on the northern boundary occurred in this acquisition. I am not bound by any finding in those reports and they cannot provide a basis for the legal argument the Applicants are making. The Applicants' claim for compensation does not explicitly claim compensation for their loss of interest over the northern land, as can be seen from the wording set out above in par 128(ii). Even if the claim forms did, that alone cannot enliven the claim for acquisition of an interest in land given the specific statutory steps in place under the JT Act. 142 The Applicants relied on the inclusion of the s 88E instrument as part of the deed of indemnity contained in the statutory notice of compensation provided by the RTA pursuant to s 43 of the JT Act. That instrument if executed would create a restriction on the use of the northern boundary of Mr Mitchell's land for access to the land to the north. I agree with the RTA's argument that a finding that acquisition has occurred for an interest in land cannot be based solely on such a document which is provided after the PAN, gazettal of the acquisition notice and claim for compensation has been made in relation to land defined in those notices. In the absence of any other written notice or instrument earlier in the acquisition process suggesting that interest was acquired, the s 88E instrument cannot define that interest after the acquiring event has occurred when the gazettal notice is published. Essentially the process under the JT Act commenced in this case with the acquiring authority identifying the land it intended to acquire in the PAN. Under s 20, on the publication of the notice in the gazette under s 19, the land specified in that notice is vested in the acquiring authority. Any interest in land would have to exist at that time. Given that the notice did not refer to any land on the northern boundary it cannot be expanded later, by inference. As submitted by the RTA if the s 88E instrument is not executed the restriction as to user does not come into effect. That is another reason why it cannot found an argument that an interest in land has been acquired by virtue of the operation of that instrument. 143 I have come to this conclusion reluctantly and consider it would have been highly desirable for this issue to have been clarified far earlier in the acquisition process by the RTA, preferably before these proceedings were commenced. It is clearly a substantial change in the way the Applicant expected his claim to be assessed and arose late in the proceedings during the preparation of expert traffic evidence when the issue was first raised that the land on the northern boundary was not a public road. Further, as I note below in relation to my concerns about the nature of the deed of indemnity and release provided by the RTA, the implications of that document as the RTA intended it were only made known during final submissions at the hearing. Effect of compensation notice/deed of release/s 88E instrument 144 A statutory notice issued under the JT Act is an important step in the compulsory acquisition process. The acceptance of such a notice determines whether compensation is accepted by the resumee or an appeal is lodged in this Court, the only options open to the resumee under s 43(d) and (e) of the JT Act. According to the arguments of the RTA's counsel it is acceptable to have an instrument which is directed to a release of rights under another part of the Roads Act unrelated to the acquisition included as part of the statutory notice issued under the JT Act. The s 88E instrument is presented in the deed of indemnity and release at 1(d) and 2(b) (par 129) as a non-negotiable term of acceptance of the offer of compensation under the JT Act. The RTA's counsel submitted that acceptance of the s 88E instrument was optional and the compensation notice was an invitation only to enter into the instrument. That is contrary to the language used in the compensation notice which is not couched in optional terms. Further there is nothing explicit in the notice of compensation to identify to the recipient Mr Mitchell that the s 88E instrument is intended as a release in relation to the creation of a controlled access road under s 49 of the Roads Act, as it is now submitted that it was. Nor has a document such as an explanatory covering letter from the RTA to the Applicant or his advisors which suggests this is the RTA's intention been provided. 145 When asked how a recipient would become aware that the intention of the compensation notice was that the s 88E instrument was optional, the RTA's counsel stated that it was assumed that the recipient would have lawyers to advise him or her. On inquiry of the Applicants' lawyers, they advised the first time they became aware that this was the intention behind the s 88E instrument was when the matter was raised by the RTA's counsel in Court in his final submissions. This is not appropriate administrative practice for a well resourced acquiring authority exercising compulsory acquisition powers conferred on it by the Roads Act to be carried out in accordance with the JT Act in my view. It places onerous requirements on the recipient of a notice for compensation to understand the nature of the offer being made to him or her in the absence of specific advice from the RTA about what its statutory notice intends. 146 These comments apply regardless of whether it is open legally for the RTA to include in a compensation notice and a deed of release and indemnity under s 43 a restriction on the use of land, which is unrelated to the claim for compensation under the JT Act. I doubt that this can be done lawfully under s 43 of the JT Act. It is not sufficient for the RTA to state that the terms of the deed of indemnity have not been defined either in the regulations or by the Minister as the Act provides for (s 43(a)). That does not mean that any matter the RTA wishes can be included as part of the statutory compensation notice issued pursuant to the JT Act. Any such notice and deed of release and indemnity, which is a condition of acceptance of the offer of compensation under the JT Act, must be limited by the terms and objects of that Act in the absence of any specific statutory provision suggesting otherwise. 147 The arguments before me do not raise the validity of the statutory compensation notice directly but its effect is important for the parties' arguments. Given the finding in Niezabitowski and Anor v Roads and Traffic Authority (NSW) (2006) 147 LGERA 417 at [43] - [44] that such notices continue to be open for acceptance up to the date of the Court's determination of compensation, this further underscores their significance in the statutory regime under the JT Act. Given the current form of the notice and attached documents it is a matter of concern that the notice is not one Mr Mitchell could accept in its current form if he now wanted to do so.

[67]

Contractual entitlement/privilege/right - Estoppel/unjust enrichment 148 Additional arguments were put by the Applicant concerning other ways his interest in land could be characterised legally. Another basis for claiming that an interest in land had been acquired related to finding that a collateral contract was entered into in 1969 between Mr Mitchell and the DMR concerning the maintenance of access on the land acquired on the northern boundary. This was disputed by the RTA. The Applicant also argued that the RTA is estopped from now asserting a lack of entitlement to the northern access in the circumstances of this case. Alternatively, the RTA has been unjustly enriched because it was able to acquire the land in 1969 for a lesser value based on its representation to Mr Mitchell that a right of access would be retained. The Court was said to have jurisdiction to determine these issues because it is appropriate for the Court to consider all matters relevant to the assessment of compensation and to determine all legal and equitable claims that arise for determination. There is no authority cited in support of this submission. 149 I agree with the RTA's submissions that the Court has no jurisdiction to determine such claims, which are separate from the claim under the JT Act. The Court must determine compensation in accordance with the provisions of that Act and is not able to consider any claim which may arise between the parties other than as provided for under that Act. Section 16(1) of the Land and Environment Court Act 1979 cannot extend the Court's jurisdiction into a claim for restitution based on unjust enrichment. It is conceptually difficult to see how such a claim can arise in this matter given the defined provisions of the JT Act. The same applies to a claim based on estoppel. Whether there is a legal issue concerning the basis on which Mr Mitchell's access to the service road on his northern boundary was cut off in 2007 by the RTA is not a matter I can consider in these proceedings.

[74]

158 Mr Rowan considered that heavy vehicles could travel past the dismantling shed (building 4) and turn right between buildings 1 and 4 without any modification to building 4. In cross-examination he was asked on what basis he considered the works were the direct and natural consequence of the acquisition. He considered that the cheapest option which enabled the lawful use of the land was based on effecting various development consents granted rather than based on what was happening on the land. If a council approved a development consent which required that additional work be done because of current standards so that more than previously existed was to be provided and there was no greater benefit as a result, that would be "like for like". There is potential for "overkill" in that the DCP requires works to be done as determined by Hoffman C (see Mitchell v Newcastle City Council [2008] NSWLEC 1140). He had not had any discussions with Newcastle City Council about any of the options he proposed to determine if these were likely to be approved by the Council. Mr Rowan did not think this was material as he was able to consider the LEP and DCP. 159 There was a moderate benefit under the on-site parking arrangements approved in the recent 2008 development consent compared to the previous off-site parking on the service road. He agreed there was a slight disadvantage to customers under the newer proposal as there was some overlap between the heavy vehicle manoeuvring and customers on site. He considered apart from the provision of much greater on-site parking that in terms of convenience, visibility and proximity the recently approved development consent was similar to that existing at the date of acquisition. 160 Mr Rowan had not assessed the turning circle requirements of his proposal for all vehicles to enter the site along the western boundary. 161 Mr Hobbs was engaged as an architect to advise the Applicant about the development application for the site given the loss of access to the north and in light of the land otherwise acquired by the RTA. He considered the way the current business was operating and devised a scheme which provided a similar operational outcome. Key issues were the separation of light and heavy vehicle access across the site boundaries, ensuring the areas of building on the site remained in a similar amount and amenity issues in relation to building 1 in terms of its use and position in relation to the highway. Current council controls also needed to be considered. 162 Mr Humphris was engaged to provide town planning advice on the permissibility of various uses and the history of consents. He also considered that heavy vehicles should enter the premises separately from the customer vehicles. Traffic engineers 163 Traffic engineers Mr Pindar, called by the Applicant, and Mr Brogan, called by the RTA, also gave evidence in their joint report and orally concerning access arrangements to the site. In their joint report Mr Pindar stated that the preferred access arrangement was for light vehicles to use the new Weakleys Drive driveway and the two way access road along the western boundary of the site to the new car parking area (western access road). Heavy vehicles should use the public road (southern boundary). It is desirable to separate light and heavy vehicles for safety reasons and their physical separation accords with the relevant RTA Guideline (section 6) (exhibit GG) which guideline is not linked to any volume of traffic. 164 Before acquisition the access along the northern boundary was via a public road very close to the New England Highway intersection, was very visible and had extensive parking along it that the business could rely on. It had a reasonable degree of safety as there was minimal interaction with heavy vehicles. He agrees the current access point on Weakleys Drive does not comply with current road safety standards largely because a right turn out of Weakleys Drive across the median strip is allowed. If the median strip was closed the road could function satisfactorily as a left in/left out access arrangement. 165 In relation to customer parking, the access for customers from Weakleys Drive enables them to turn conveniently into the site, travel a short distance and park in an area where there is no interaction with heavy vehicles. There is sufficient parking allowed in the plans approved as part of the development application whereby about 20 spaces is sufficient for normal peak demands for this type of business. Under Mr Brogan's proposed scheme there is customer parking in the north eastern corner which is more removed from the existing/proposed retail sales area. Given the low volume of truck activity there would not be any greater risk to pedestrian safety than in the pre-acquisition situation where pedestrians and motorists used the northern access road in the absence of pedestrian footpath facilities. Mr Pindar considered the pre-acquisition arrangements were markedly safer than Mr Brogan's proposal. Under the former, trucks entered the site through a gate and unloaded and turned around away from the general public, always moving in a forward direction. 166 Mr Brogan stated in the traffic engineers' joint report that a preferred access arrangement is to provide for all vehicles to use the new public road on the southern boundary. This would consolidate vehicular access to a single point, reduce the cost of the access works and minimise the need for and cost of building relocation and reconstruction. He considered the new driveway along Weakleys Drive should be removed as it impeded traffic flow efficiency along that major road. The low heavy vehicle arrival rate negates the need for separation of light and heavy vehicles. Mr Pindar considered this approach was workable but not optimal as it was less safe and involved greater travel time due to the greater distance of 800m required to be travelled. The access along the northern boundary before acquisition was dangerous and unsafe due to the minimal site distance of the access road from the intersection of two higher order arterial roads. It was dangerous for both vehicles turning left from the New England Highway on route to Weakleys Drive travelling south and also vehicles turning right from the highway into Weakleys Drive. The traffic volumes identified in the REF showed substantially increased traffic volumes for the intersection between 1995 and 2004 with further increases in the future. The unsafe location of the existing driveway would have required changes to on-site access regardless of the RTA's road upgrade proposals and the associated compulsory acquisition. 167 Mr Brogan was asked in cross-examination and agreed that if comparing "like with like" for pre and post acquisition situations that his proposal did not provide the amenities that were available to the business pre-acquisition. 168 Mr Pindar was asked his opinion on Mr Rowan's proposed access on the western boundary and he considered the driveway as constructed would need to be changed to allow safe access. Splays would be required on either side of the property boundary between the existing kerb line of Weakleys Drive. In relation to access by heavy vehicles past building 4, Mr Pindar considered that the corner of that building would need to be partially demolished. The extent would depend on whether landscaping was required but even if there was no landscaping the building would be affected. He and Mr Brogan also considered that buildings 2 and 3 would need to be demolished for this to occur. 169 In relation to Mr Rowan's proposal that trucks could stop at the gate and unload, Mr Pindar considered that a 30m diameter turning circle/cul de sac would be necessary to enable them to exit the site in a forward direction. Mr Brogan agreed that this would be difficult and land hungry as it would need a turning circle of between 12m to 15m radius (that is, 24m to 30m diameter). Mr Brogan considered that depending on the size of the truck, assuming it could proceed through the gate to unload, it could use the space between the aisles of cars to turn around. It was likely the shape of the aisles would have to be altered to enable this to happen. Applicant's submissions 170 As identified at par 72, Mr Mitchell has claimed disturbance under s 59(f) for five items. Whether any items are claimable as disturbance is affected by my finding that an interest in land being the right to access his land on the northern boundary was not acquired. Most of the expert evidence outlined above is directed to a change in arrangements made on the site because of the loss of the northern access but it is also clear from that evidence that there is an impact on the residue land as a result of the access roads built on the acquired land. 171 I will summarise the Applicant's case albeit that relies on a finding that the northern access was part of the interest in land acquired. The Applicant relies on Peak to argue that disturbance in the substantial amounts sought by him can be claimed. The use of the northern access was so intimately related to the use of the residue land that it must be considered on the same basis as was recognised in Peak. The 1983 development consent (193/83) required vehicular access from the northern boundary. All the parking and vehicular access was from that northern access road. A significant reconfiguration of the buildings on the site to facilitate the continued use of the site for the purpose is necessary. But for the acquisition Mr Mitchell was not required to lodge a DA to continue his use of the land for its current purpose. But for the lodgement of the DA, the Council could not have required in 2006 that the use conform with Council's planning controls. It is reasonable for a claim under s 59(f) for the Applicant to be put back in the position he was in prior to the acquisition so that the business can operate in a manner which assists the business. Having to comply with the 2006 requirements of the Council (and the Court) is not betterment. The requirements of the development consent enable Mr Mitchell to operate his business as it was before the acquisition.

[75]

RTA's submissions 172 As there was no acquisition of the northern access there can be no claim for disturbance. Further, Peak does not apply to enable a claim for disturbance in this case. In Peak the Court of Appeal held that costs incurred relating to the actual use of the land arising as a direct and natural consequence of the acquisition were claimable. This suggests there must be a distinction between the acquisition and the public purpose. Almona Pty Ltd v Roads and Traffic Authority of New South Wales [2008] NSWLEC 112 held that the focus of s 59(f) is the costs connected to the acquisition itself, not the carrying out of the public purpose. The change in access arrangements built on the acquired land is the carrying out of the public purpose. 173 Further the amount of disturbance to the land claimed is excessive given that access to the land has been provided by the RTA from Weakleys Drive and, at the Applicant's request, for heavy trucks along the southern boundary road. That road was strengthened to enable access by heavy trucks and large gates installed on the boundary of the Applicant's property to enable access at the Applicant's request. Accordingly more than adequate access has been provided to the land. The RTA constructed the new access to the subject land from Weakleys Drive and the southern road in anticipation of the future declaration of the area on the northern boundary as a controlled access road (and no right to compensation under s 68 of the Roads Act is likely to exist). 174 The previous access from Weakleys Drive along the northern boundary was unsatisfactory for traffic safety. The intersection was accident prone due to short sightlines and could not have continued in its existing form in any event. It would have been stopped by an appropriate authority whether the RTA or the Council. 175 Because Mr Mitchell did not have development consent for lots 1 and 2 a substantial area of the business required consent and a development application to obtain this would have been necessary in any event. In other words, the reason for the lodging of the DA (now the 2008 consent) was not only the need to alter the northern access. As he lodged the DA over the whole site and sought greater usage and increase in land area for reasons unrelated to external access to the site, the Council required a range of conditions for parking and landscaping which went beyond the change in access. More than 50 per cent of the storage area for cars needed development consent. Finding on whether and what disturbance claimable by Mitchell 176 Mr Mitchell has not succeeded in his argument that an interest in land has been acquired in relation to the northern access, which underpinned his argument that all of the DA costs are necessary and reasonable to award as disturbance under s 59(f). Whether any claim for disturbance remains needs to be determined. The RTA argued it had provided reasonable access to the residue land by providing access to Mr Mitchell's land using the acquired land on the western boundary to widen Weakleys Drive. Mr Mitchell had to build a new entrance to his property in order to utilise the access from Weakleys Drive. The southern boundary road was built on land acquired from Mr Mitchell. There is an impact on the use of the residue land as a result of the works undertaken on the acquired land. The use of the residue land is intimately connected with the acquired land as the whole was used in the business. The works undertaken on the acquired land are however part of the carrying out of the public purpose of the acquisition. 177 In Mir Bros at [88] Spigelman CJ held that disturbance costs may only be awarded under s 59(f) for costs relating to the actual use of the acquired land. In Peak, Beazley and Tobias JJA held at [71] (Basten J writing a separate judgment but otherwise concurring) that if the actual use of the residue land is so intimately connected with the actual use of the acquired land so that use of the one is dependent on use of the other, that is sufficient to bring a claim for disturbance within s 59(f). The costs of building a new house on the residue land were costs reasonably incurred relating to the actual use of the acquired land and its connection with the residue land, namely the use of the residence as an intimate part of the acquired land as a cattle breeding business. Those costs were a natural consequence of the acquisition. 178 The Court of Appeal also held that the resumee's costs of building a new house on the residue land because of the adverse impact of noise, glare and lack of privacy from the new highway on the existing dwelling on the residue land was compensable under s 59(f) because the use of the acquired land included its use as a buffer from the impact of the old highway. That use was lost to the resumee. 179 The RTA submitted that s 59(f) focuses on the actual use of the acquired land and the costs arising from the acquisition, not from the implementation of the public purpose on the acquired land. The carrying out of the public purpose on the acquired land and the impact that has on the residue land is not the cost to which s 59(f) is directed. In this case while the new access arrangements on the acquired land are intimately connected with the use of the residue land that is not necessarily a compensable cost under s 59(f). This issue was directly considered in Almona. 180 In Almona the applicant was claiming costs incurred as a direct and natural consequence of the acquisition under s 59(f) including the impact of the construction of the particular road works on the acquired land which were the public purpose of the acquisition. Jagot J held at [56] - [62] that such costs which arose from the carrying out of the public purpose were not compensable under s 59(f). Her Honour noted at [63] that s 55(f) may be engaged by the same set of facts. That section concerns loss of value of the residue land resulting from the carrying out of the public purpose. The facts in this case are not distinguishable from those in Almona in that the carrying out of the public purpose on the acquired land does impact on the residue land and that impact is the subject of the Applicant's disturbance claim rather than a claim under s 55(f) relating to the loss of value of the residue land. In the interests of judicial comity I consider I must apply the findings in Almona in light of her Honour's thorough reasoning consistent with the Court of Appeal in Peak as found at [74] where Beazley J stated: The public purpose was the reason for the acquisition. Section 59(f) focuses on costs reasonably incurred relating to the actual use of the land as a direct and natural consequence of the acquisition. [emphasis as in original] Jagot J also referred to this passage in Peak in support of her reasoning in [58]. A modified claim for disturbance by Mr Mitchell under s 59(f) based on the impact on the residue land of the works carried out pursuant to the public purpose on the acquired land is not open in light of the provisions of the JT Act and in light of the reasoning in Almona . 181 As the judicial valuer I am able to determine what is the just amount of compensation payable to the Applicant provided that it is in accordance with the JT Act. The Applicant did not base his claim on s 55(f), injurious affection to the residue land. Given what I consider are unfortunate circumstances surrounding this acquisition for Mr Mitchell in light of the compensation notice served on him and the expectation he had since 1969 that his northern access was to a public road, I consider I should explore all reasonable options for him to claim compensation in accordance with the JT Act. It may be that a claim under s 55(f) is maintainable by him and that can be considered in terms similar to some of Mr Mitchell's disturbance claim in relation to the cost of the impact of the changed access arrangements on the residue land. Before finally resolving that issue I will ask the parties if they wish to further address that matter. I will provide my findings on the evidence presented on disturbance concerning access arrangements as this may assist the parties in any further submissions. 182 The RTA argued that the DA lodged by Mr Mitchell (approved by the Court on 24 April 2008) was required for other reasons apart from the acquisition. I do not agree with the RTA's submissions that the DA was necessary in order to regularise the use of the whole of Mr Mitchell's land as a wrecking yard as follows from my earlier findings in relation to market value at par 45. 183 The RTA's submission that the new access was to take into account future action to declare a controlled road under the Roads Act (about which there is no specific evidence in this case but simply submissions from counsel to that effect) does not alter the fact that the changed access on the acquired land was part of the public purpose. Nor can the RTA rely on the submission that the intersection of the service road that existed previously was unsafe and would have required alteration/closure in any event to suggest that the change is access was inevitable. I note that the traffic engineers had differing views as to whether that was the case. Mr Pindar considered that safe access could have continued satisfactorily into the future if the median strip opposite had been closed. Mr Brogan considered it was unsafe and would have to have been changed regardless. In any event, whether such an intervening event may occur or was likely to occur in the future is irrelevant in considering a claim for compensation under the JT Act which must consider the impacts which have occurred as a result of the acquisition, in light of circumstances that existed at the date of acquisition. 184 The RTA argued it had provided reasonable access from Weakleys Drive and from the southern boundary and there was no loss to Mr Mitchell but I do not agree. It was reasonable for Mr Mitchell to seek development consent for changes on the residue land necessitated by the change in access arrangements on that land resulting from the works undertaken on the acquired land. Those changes were motivated by the reasonable need of Mr Mitchell to continue his business (Beresfield) in a safe and efficient manner. I accept Mr Mitchell's argument that it is necessary to have separate access for light and heavy vehicles to continue the business in an appropriately safe manner for customers and trade deliveries. That is confirmed by the advice of Mr Humphris, town planner. That was also the advice of Mr Hobbs based on the Council's requirements. This was the advice of the RTA to the Council in relation to the DA, contrary to Mr Brogan's evidence that it is not necessary (he was not given that RTA advice apparently). It is also the opinion of Mr Pindar, traffic engineer (par 163). That has resulted in Mr Mitchell lodging a development application and being required to comply with current development standards and requirements of the relevant council and now the Court, which approved the DA in April 2008. 185 When granting development consent, the Commissioner required the southern access road pavement to be widened to 13m with kerbs and gutters, footway formation, street lighting and associated drainage works. That cost reasonably arises as part of the need for Mr Mitchell to adjust the access on the residue land.

[78]

Finding 188 In West, Talbot J did not allow compensation for an amount calculated for the personal time spent by the owners in looking for alternative property to buy to replace the house and land acquired. That claim was made under s 59(c) as part of a claim for relocation costs. A separate claim pursuant to s 59(c) and (f) was made by the tenant, a company, which used a house on the acquired property, for the costs of a consultant employed in the business conducted by the tenant on the property. This was necessary because the principal in the business was occupied by the impact of the acquisition on the business and could not perform his usual duties in the tenant's business. That part of the claim was upheld by Talbot J under s 59(f). He held that the evidence established that the tenant was using the land for the conduct of its business and there was a causal connection between the costs referred to in s 59(f) and the acquisition. The facts in that matter did come within s 59(f) as the costs incurred related to the actual use of the acquired land. 189 The parties' submissions in relation to this part of the disturbance claim did not specifically address whether the claim could come under s 59(f) as "… other financial costs reasonably incurred… relating to the actual use of the land, as a direct and natural consequence of the acquisition." Rather the RTA focussed on whether there was any actual loss demonstrated, arguing there was not. Given that s 59(f) has been recognised as a "catch-all" provision in Fitzpatrick Investments Pty Ltd v Blacktown City Council [No 2] (2000) 108 LGERA 417 at [20] and that West recognised that costs arising from the disruption to business as a result of the acquisition is a claimable cost the possibility for a claim exists. 190 However, the costs claimed by Mr Mitchell appear to relate to the impact on the residue land of the carrying out of the public purpose on the acquired land rather than any cost incurred as a result of the acquisition. That distinction was considered in Almona as already discussed at par 180. The costs of the acquisition, namely the cost of moving the transpiration bed and the cost of moving stored vehicles which were located on the acquired land, have been claimed by Beresfield and are agreed to be paid by the RTA. In light of my earlier finding based on Peak and Almona whether this claim is available to Mr Mitchell under s 59(f) is an issue. As the parties did not directly address this issue in their arguments I will invite further submissions as to whether s 59(f) can apply to the amounts claimed.

[80]

Loss of business value 192 The evidence of the business valuers, Mr Tew for the Applicant and Mr Deane for the RTA, was based on a claim of business loss resulting from the loss of area for vehicle storage which would arise from all the DA works intended to be undertaken. Before acquisition the total number of cars that could be stored on the land was 800 to 1200 cars. After acquisition and after the DA works have been implemented there is only room for up to 504 cars according to Mr Tew's evidence. Mr Tew valued the loss of storage area on four possible bases. He considered he was valuing the detrimental impact of the loss of storage area on the business profitability/trading performance of the existing business. This can be valued on: (i) a piecemeal approach being the land area lost based upon land value of $714,979, (ii) a representation of the profitability of the business as a function of the available vehicle storage area pre-acquisition/post-acquisition to arrive at a similar amount (present value approach), (iii) the cost of renting comparable off-site storage of a size and accessibility to replace the lost storage area on the site (see exhibit RR), (iv) cost of purchasing comparable storage off-site of a size and accessibility to replace the lost storage area on the subject site ($1,063,530 p 29 exhibit D), this cost being factored into the expense items in the trading figures and amortised over the anticipated remaining life of the business. 193 Mr Deane considered there was no impact on the business as a result of the lesser area available. He had never heard of the piecemeal approach adopted by Mr Tew. He disagreed with Mr Tew's present value approach. He considered it was more profitable for Mr Mitchell/Beresfield to sell car bodies for scrap than continue to store them on-site once the valuable components had been stripped from the car bodies. He therefore considered that 550 to 600 cars was ample stock to meet any reasonable needs. That is a 10 per cent to 20 per cent margin over one year's purchase of 500 cars. He considered it was inefficient to hold more than 600 car bodies at any time. 194 The evidence of Mr Mitchell was that not everything of value was stripped from the car bodies but rather some parts were effectively stored in these. Mr Tew therefore considered Mr Deane's approach failed to take into account the benefits of the business providing a broad variety of spare parts (makes and models) on-site. On his calculations 600 cars required 19,200m2 assuming 32m2 per car. The available storage after acquisition and consequential works for access and landscaping is 16,133.7m2 which is enough for 504 cars. There needs to be a significant change to the business in order to maintain revenues and profitability and over time the business may not be sustainable. 195 Both business valuers agreed there had been no adverse impact on the business since the acquisition and subsequent road works undertaken around the residue land since 2006. Mr Tew considered this was due to the efforts of Mr Mitchell/Beresfield to minimise disruption.

[81]

Applicant's submissions 196 Based on this evidence the Applicant submitted that there was a reduction of up to 50 per cent in the number of cars able to be stored on the site. (This was in the context of the northern access being acquired which I have now held was not). A change in the business model should not have to be undertaken by the Applicant because of the acquisition. It was agreed by the valuers that the business was well run and profitable. Mr Tew has valued the loss of business on the basis that it should continue as before given it has been operating successfully since the 1960s. This is contrasted with Mr Deane's approach which suggests the Applicant should change its business model to minimise business losses by focussing on scrap sales rather than parts sales, with the totality of vehicles brought on to the site to be sold as scrap. More staff would need to be employed to strip cars of all valuable items. It is not appropriate to assess business loss on the basis that business should change. A wholesale change to the business whereby it would become essentially a scrap metal dealer, with the buying and selling of 500 car bodies per year, is not a business for which development consent has been granted. 197 Further, Mr Deane did not properly inform himself about the nature of Beresfield's business, despite having access to its financial records and spending time with Mr Mitchell. He did not know the different value of the car parts to car bodies, nor that cars are stripped over time and not all at once. He made assumptions which did not reflect the nature of the business. His assumption about the worth of the car at $1,100 being split 50/50 between parts and scrap value does not reflect the actual worth to the existing business of the car parts which in many cases are stored on the car body. The value of the car even on an 80/20 split at $300 is more valuable than as scrap. Mr Deane's calculations are only correct if a car body is worth less than $230 as scrap.

[83]

Finding 199 In terms of the evidence, I agree with the Applicant's submission that it is unreasonable to expect Beresfield to change its business model to that valued by Mr Deane. Both valuers agreed the existing business is well run and profitable. It is reasonable for Beresfield to continue to undertake its business in the manner developed over many years. That requires that there be adequate land available for the storage of car bodies. The storage of large numbers of car bodies is an important part of Beresfield's business model. The extent to which Beresfield can claim disturbance for alterations to the business as a result of lost vehicle storage area is more limited than claimed however, given my finding that the northern access was not an interest in land acquired in this acquisition process. 200 Land for vehicle storage has been lost on the acquired land. A claim based on the loss of that area for storage is maintainable under s 59(f) as it is a financial cost incurred relating to the actual use of the acquired land arising as a direct and natural consequence of the acquisition. The area of land lost for use for vehicle storage is 5067.92m2, being the area of the acquired land. There should not be any deduction for the small area of the transpiration bed. Although not the primary basis argued for by Mr Tew, a legitimate and more easily calculated amount would be the cost of either buying or renting a comparable land area. The cost of buying similar land would presumably be the same as the market value payable to Mr Mitchell however, which may be an excessive amount. Accordingly, whether there is an amount for business loss able to be calculated by Mr Tew for the loss of a smaller area needs to be clarified. 201 The use of the residue land is intimately connected with the acquired land in terms of the operation of the business by Beresfield. That part of the claim for business loss which relates to the impact on the residue land of the carrying out of the public purpose on the acquired land is not available under s 59(f) as already discussed at par 179-180. If there is an impact on the business conducted on the residue land which results from the carrying out of the public purpose, there may be a claim available to the Applicant, Mr Mitchell, under s 55(f) in light of, say, loss of rental income from Beresfield. Beresfield as a tenant could not have a claim for injurious affection under s 55(f) as it is not the owner of the residue land

[84]

Relocation work by Mr Mitchell and staff for Beresfield 202 Item (i) (par 72(a)) is a claim for $20,000 for works undertaken by Mr Mitchell and his staff to relocate motor vehicle bodies from the acquired land, inter alia. The Applicant submitted that this work was necessary as a direct consequence of the acquisition and related to the actual use of the land acquired. This claim is accepted by the RTA and I consider it is claimable as disturbance. Summary 203 I am mindful of the need to finalise this matter and not cause the parties significant additional costs in doing so. There remain some outstanding issues and the extent to which these require additional submissions and possibly evidence will need to be discussed with the parties. I will summarise what is determined and what remains to be determined. Compensation for market value is recoverable under s 55(a) by Mr Mitchell for $496,656.16. Most of Mr Mitchell's claim for disturbance (par 72(a)(i) -(iv)) is not recoverable as disturbance under s 59(f). Whether additional compensation is claimable pursuant to s 55(f) for injurious affection to the residue land as a result of carrying out the public purpose is a matter to be clarified, as identified at par 181 (concerning the cost of the change in access arrangements on the residue land) and par 201 (concerning loss of income from Beresfield). I have also requested clarification from the parties whether the $100,000 claimed by Mr Mitchell for temporary works and other items (par 72(a)(v)) is recoverable under s 59(f) (par 190). 204 For Beresfield's claim, disturbance is recoverable under s 59(a) for $15,500.92, under s 59(b) for $15,400 and under s 59(f) for $20,000 for item (i) at par 72(b). Whether liability is disputed in relation to item (iii) par 72(b) of $62,905.83 needs to be clarified with the parties. The RTA has agreed to pay the cost of moving the transpiration bed and I need clarification that has been included in these amounts. As stated in par 201, disturbance under s 59(f) for business loss due to the area of acquired land lost for vehicle storage (item (ii) par 72(b)) may also be recoverable albeit for a lesser area. Before determining the amount, I require brief clarification of Mr Tew's evidence concerning business loss if the area lost is restricted to the acquired land area. I am hoping this can be done in a way that does not incur much extra expense. A timetable for dealing with these issues will be necessary.

At a glance

Court

Decision date

Before

Source

Judgment (85 paragraphs)

Cases Cited (19)

Cited By (3)