Moloney v Roads and Maritime Services - [2017] NSWLEC 68 - NSWLEC 2016 case summary — Zoe

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Moloney v Roads and Maritime Services

[2017] NSWLEC 68

Land and Environment Court (NSW)|2016-12-16|Before: Pain J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2016-12-16

Before

Pain J

Catchwords

[1947] HCA 10 Constantino v Roads and Traffic Authority of New South Wales (2004) 135 LGERA 365
[1999] HCA 25 Leichhardt Council v Roads and Traffic Authority (NSW) (2006) 149 LGERA 439
[2010] NSWCA 236 Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307
[2016] NSWCA 7 Roads and Traffic Authority of New South Wales v Mosca (2006) 146 LGERA 335

Source

Original judgment source is linked above.

Catchwords

[1947] HCA 10 Constantino v Roads and Traffic Authority of New South Wales (2004) 135 LGERA 365[1999] HCA 25 Leichhardt Council v Roads and Traffic Authority (NSW) (2006) 149 LGERA 439[2010] NSWCA 236 Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307[2016] NSWCA 7 Roads and Traffic Authority of New South Wales v Mosca (2006) 146 LGERA 335[2006] NSWCA 159 Spencer v Commonwealth (1907) 5 CLR 418[1907] HCA 82 Sydney Water Corporation v Caruso (2009) 170 LGERA 298[2009] NSWCA 391 The Minister v New South Wales Aerated Water and Confectionary Co Ltd (1916) 22 CLR 56[1916] HCA 48 Tolson v Roads and Maritime Services (2014) 201 LGERA 367[2014] NSWCA 161 W and H Carter v Roads and Traffic Authority of NSW (2006) 144 LGERA 375[2006] NSWLEC 89 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259[2008] HCA 5 Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156

Judgment (115 paragraphs)

[1]

[4]

Judgment

Mr and Mrs Moloney own separately and jointly numerous lots on which they grow sugar cane. Part of two of their farms were compulsorily acquired on 6 February 2015 by the Roads and Maritime Services (RMS), the Respondent, for the Pacific Highway upgrade between Woolgoolga and Ballina. They have commenced two appeals under s 66(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act) in relation to the compensation payable for the partial acquisition of Home Farm and Watts Farm. The appeals were heard together. The Court has jurisdiction to determine these appeals under s 19(e of the Land and Environment Court Act 1979. I thank Acting Commissioner Maston for his valuable assistance in determining this matter.
The Court is acting as the judicial valuer in this case per Sydney Water Corporation v Caruso (2009) 170 LGERA 298 [2009] NSWCA 391 at [3], [35], [37], [146] and [150] and Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156; 73 LGRA 47. As a general principle in determining compensation doubts should be resolved in favour of a more liberal estimate, see Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd (1947) 74 CLR 358; [1947] HCA 10 at 374.
The Applicants' land is located approximately 30 km north-east of Grafton at Tyndale. Prior to acquisition the Applicants owned 83.67 ha of land known as Home Farm, being Lots 1, 3, 4 and 8 DP751389, Lot 50 DP1040235 and Lot 51 DP996917. The acquired land traverses Lots 3, 4 and 8 DP751389 and Lot 50 DP1040235. An area of 9.36 ha was acquired for the public purpose leaving Home Farm with 74.24 ha. The new Pacific Highway bisects Home Farm leaving 21.4 ha located on the northern portion and 52.8 ha located on the southern portion.
The First Applicant also owned 40.17 ha of land known as Watts Farm, being Lots 75 and 89 DP751389. The acquired land comprises the northern portion of Lot 89 DP751389. An area of 8.84 ha was acquired for the public purpose leaving Watts Farm with 31.33 ha.
Home Farm, Watts Farm and Mickey's Farm, which is also owned by the Applicants but is unaffected by the public purpose, are farmed together as a single operation.
Two residences are located on Home Farm. Between 1971 and 1982 the Applicants lived in a house on Lot 1 (the dwelling on Lot 1) in the northern corner of Home Farm approximately 12 m from the existing Pacific Highway. In 1982 the Applicants built their current residence (the main dwelling) to the south of the dwelling on Lot 1 approximately 950 m from the existing highway. The dwelling on Lot 1 is currently occupied by a daughter of the Applicants and her family. As a result of the acquisition the main dwelling is now located approximately 145 m from the edge of the southbound carriageway of the new highway and approximately 115 m from the southbound off-ramp for the Tyndale interchange. Both carriageways for the new Pacific Highway will be dual lane with a posted speed limit of 110 km/h for light vehicles and 100 km/h for heavy vehicles.

[5]

Land Acquisition (Just Terms Compensation) Act 1991

The basis on which compensation is determined is defined by Pt 3 Div 4 of the Just Terms Act. Relevant sections of the Just Terms Act provide: Part 1 Preliminary … 3 Objects of Act (1) The objects of this Act are: (a) to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will be not less than the market value of the land (unaffected by the proposal) at the date of acquisition, and (b) to ensure compensation on just terms for the owners of land that is acquired by an authority of the State when the land is not available for public sale, and (c) to establish new procedures for the compulsory acquisition of land by authorities of the State to simplify and expedite the acquisition process, and (d) to require an authority of the State to acquire land designated for acquisition for a public purpose where hardship is demonstrated, and (e) to encourage the acquisition of land by agreement instead of compulsory process. (2) Nothing in this section gives rise to, or can be taken into account in, any civil cause of action. Part 2 Acquisition of land by compulsory process … Division 2 Acquisition procedures … 20 Effect of acquisition notice (1) On the date of publication in the Gazette of an acquisition notice, the land described in the notice is, by force of this Act: (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. (1A) Subsection (1) is subject to any express provision of an Act that authorises the acquisition of land by compulsory process but preserves the operation of any trusts, restrictions, dedications, reservations, declarations, setting apart of or other matters relating to the land concerned. ... Part 3 Compensation for acquisition of land … Division 4 Determination of amount of compensation … 54 Entitlement to just compensation (1) The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land. (2) If the compensation that is payable under this Part to a person from whom native title rights and interests in relation to land have been acquired does not amount to compensation on just terms within the meaning of the Commonwealth Native Title Act, the person concerned is entitled to such additional compensation as is necessary to ensure that the compensation is paid on that basis. 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division): (a) the market value of the land on the date of its acquisition, (b) any special value of the land to the person on the date of its acquisition, (c) any loss attributable to severance, (d) any loss attributable to disturbance, (e) solatium, (f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. 56 Market value (1) In this Act: market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. (2) When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition. … 59 Loss attributable to disturbance (1) In this Act: loss attributable to disturbance of land means any of the following: (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land, (b) valuation fees of a qualified valuer reasonably incurred by those persons in connection with the compulsory acquisition of the land (but not fees calculated by reference to the value, as assessed by the valuer, of the land), (c) financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs), (d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired), (e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage), (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition. …

[8]

Summary of documentary evidence

The Applicants tendered a large aerial photograph (Exhibit A) of the Clarence Valley Local Government Area showing the location of Home Farm, Watts Farm, other cane farms engaged in the local farming cooperative and an outline of the proposed route for the new Pacific Highway. The Applicants also tendered the Property Adjustment Plan prepared by the RMS in respect of the Applicants' property (Exhibit B), the court book (Exhibit C) and tender bundle (Exhibit D).
Exhibit C contained the Class 3 applications and schedules of losses attributable to disturbance for both Home Farm and Watts Farm. It also contained the Applicants' points of claim, the RMS' points of defence and affidavits of Mr Moloney sworn 20 October 2015 and Mr Green, infrastructure property manager at the RMS, sworn 14 November 2016. Exhibit C included a number of expert reports in relation to acoustics, quantity surveying, sugarcane farming, traffic, valuation and accounting.
Exhibit D contained a small version of the map in Exhibit A, the Clarence Valley Local Environmental Plan 2011 (LEP), contents pages related to the new Pacific Highway Environmental Impact Statement (EIS) and clarifications to the EIS. Exhibit D included various materials related to noise and acoustics namely: Australian Standard 3671:1989 "Acoustics - Road traffic noise intrusion"; Australian/New Zealand Standard 2107:2000 "Acoustics - Recommended design sound levels and reverberation times for building interiors"; ACT Noise Management Guidelines"; a 2003 article by A. L. Brown and R. B. Bullen titled "Road traffic noise exposure in Australian capital cities"; the State Environmental Planning Policy (Infrastructure) 2007; NSW Department of Planning interim guidelines for "Development near rail corridors and busy roads"; NSW Road Noise Policy; extracts from the Pacific Highway upgrade EIS; NSW "Noise mitigation guidelines"; Western Australian Planning Commission Planning Policy 5.4 "Road and rail transport noise and freight considerations in land use planning" and associated implementation guidelines; Queensland Transport "Noise management code of practice"; Northern Territory "Road traffic noise" policy; Tasmanian "State road traffic noise management guidelines"; South Australian "Road traffic noise guidelines"; and Victorian Roads "Traffic noise reduction policy".
Exhibit D also contained evidence on sugarcane farming, including productivity data and financial statements in relation to the Applicants' farms, maps showing the Applicants' farms, a contract between the Applicants and the NSW Sugar Milling Cooperative, a Deed of Release dated 23 June 2016 between the RMS and NSW Sugar, and various emails exchanged between the parties in relation to cane farming.
Traffic management documents in Exhibit D included the section headed "Traffic and transport" in the new Pacific Highway EIS, the Heavy Vehicle National Law (NSW) 2013, Heavy Vehicle (Mass, Dimension and Loading) National Regulation (NSW) 2013, an RMS Fact sheet "Transport Management Plans for oversize and/or overmass movements in NSW", Heavy Vehicle National Law - NSW Class 1 Agricultural Vehicles (Notice) 2015 (No. 1) and letters between the parties concerning traffic management.
Exhibit D finally contained evidence of valuation fees already paid by the RMS in relation to the compulsory acquisition of the Applicants' property.
The Applicants tendered Exhibit E, development consent granted by Byron Shire Council for the erection of a dwelling house and demolition of an existing house at Lot 100 DP151011, a bundle of photographs (Exhibit F) and a valuation report prepared in 2012 in relation to the compulsory acquisition of a property near the Applicants' land (Exhibit G). Exhibit H was construction plans for the new Pacific Highway on the acquired land formerly part of Home Farm, Exhibit J was a fourth joint acoustics report dated 12 December 2016 and Exhibit K was a sound emergence graph. The Applicants tendered a valuation report dated 11 September 2009 and review of that valuation assessment dated 7 December 2010 in relation to the property at Lot 3 DP129126 (Exhibits L1 and L2). Exhibit M was a bundle containing information about a number of comparable sales, Exhibit N was an aerial photograph of Home Farm showing separate percentages calculated by Mr Frogley valuer for injurious affection (IA) on the different lots of Home Farm, Exhibit O was an aerial photograph showing the same overlays as in Exhibit A and Exhibit P was a review of a valuation assessment dated 6 November 2009 in relation to Lot 1 DP837112.
The RMS tendered an aerial photograph which depicted the proximity of the main dwelling to the new Pacific Highway (Exhibit 1). Exhibit 2 was the state significant infrastructure project approval for the highway and Exhibit 3 was a list of photographs of case studies selected by Mr Green. Exhibit 4 was a marked up version of the aerial photograph in Exhibit 1. Sugarcane experts Mr McGuire and Dr Kingston prepared a joint statement dated 8 December 2016 in relation to a proposal to seal a new cane pad on Home Farm (Exhibit 5). The RMS also tendered a site view schedule containing brief information and photographs of selected properties (Exhibit 6), a supplementary report of Mr Watt valuer dated 2 December 2016 (Exhibit 7) and the original valuation reports prepared by Country Coast Valuers for the Valuer-General in respect of Home Farm dated 6 June 2015 and Watts Farm dated 16 June 2015 (Exhibit 8). The RMS also tendered a number of documents in relation to a property owned by the Applicants known as "Benson's Farm" (Exhibit 9) and information regarding the alternative access option agreed in principle between the Applicants and the RMS to allow the Applicants to access the severed northern portion of Home Farm without using the existing Pacific Highway (Exhibit 10).

[9]

Affidavit of Mr Moloney

Mr Moloney the First Applicant swore an affidavit dated 20 October 2015 to which he annexed and confirmed as true his earlier statement dated 11 September 2015. In his statement Mr Moloney stated that he was at that time 70 years old and that his family had been farming in the Shark Creek Tyndale area for five generations. He has lived on farms within 5 km of the subject land for his whole life. He stated that Home Farm, Watts Farm and Mickey's Farm are either owned in his name or with his wife Mrs Moloney as joint tenants. They are farmed together as a single operation. The Applicants purchased Home Farm in 1971 when it consisted of 140 acres including 40 acres of cultivated land. In 1976-78 the Applicants purchased a further 60 acres which they developed into cane producing land.
During that time the Applicants were living in the dwelling on Lot 1 fronting the existing Pacific Highway. Mr Moloney stated that in that period a number of trucks came through the front yard, one running into the old dairy alongside the house and another hitting the mango tree in the front yard. One truck ran between the house and a cedar tree in the front yard. In 1981-82 the Applicants built the main dwelling (their current residence) on the hill to the south of the old house. This house is approximately 950 m from the existing Pacific Highway. Mr Moloney stated that the main reason for building the new house was to get away from the highway following the death of a neighbour's child who ran onto the road and who was a similar age to his children at the time. The location of the new house was selected because it is a very peaceful site with a great view and is quiet. Secondly, the site has an ideal north-east aspect, is sheltered in winter and receives the cooler north-easterly breeze in summer. Thirdly, it is out of flood reach and is the most ideal location on the property for storing equipment and machinery as it is sheltered at all times.
Mr Moloney stated that he feels that his family's lifestyle would be greatly affected by the new highway being so close to their house. The Applicants' children and 19 grandchildren (at that time) have always played sport in front of the house and that has been a very enjoyable part of their lifestyle. The Applicants enjoy sitting out on the north-eastern side of the house enjoying a chat and the breeze, watching the children playing on the slope below the house. Mr Moloney stated that the proximity of the new highway will take that away and make that area quite unpleasant.

[10]

Cross-examination of Mr Moloney

A number of issues the subject of cross-examination were ultimately not relevant to resolution of the issues in the proceedings and have not been summarised.
Mr Moloney was asked about his time living in the dwelling on Lot 1 by the existing Pacific Highway. He did not dispute Mr Koikas' (Applicants' acoustic expert) estimate that that house was set back about 12 m from the road. Mr Moloney agreed that during the 10 years he lived in that house he was living in circumstances where there was a significant amount of traffic noise generated by trucks and cars on the existing highway. He was asked whether he lived with the doors and windows open and replied that they "used to keep the front shut sometimes". This was "mostly because we had the kids, we didn't have a fence. We kept them inside and out the back". Mr Moloney agreed that he and his wife gave the children warnings about the dangers of the highway and told them not to go out the front. He was asked whether he left the windows open and replied that they did so occasionally "to get some air in the place". Mr Moloney was asked whether he lived in that house quite happily notwithstanding that he was very close to the highway. He replied "well, it depends what you mean by happily but yeah".
Mr Moloney was asked about his reasons for moving away from the dwelling on Lot 1 and agreed that the traffic noise was only one reason. He agreed that apart from keeping the front door closed for safety reasons he had used the house as a normal dwelling. He was asked about the death of his neighbour's child that he had described in his statement and he agreed that he recalled the event quite vividly. He stated that the child was about three or four years old and at that time his seven children were all under ten years old.
Mr Moloney was asked about the current inhabitants of the dwelling on Lot 1 and stated that his daughter Louise lives there with her three children aged between eight years to three months old. He stated that they have lived there for approximately four or five years and before that different people rented the house on and off including his son Brendan for about one year before he was married. He agreed that since 1971 this house has been almost constantly occupied by people using it as a home. He agreed that since he and his wife moved out of the house it had not been added to and that the only acoustic treatment it had was aluminium and foam cladding that had been added when he lived there to deaden the noise. The windows have not been reglazed with thickened glass and the outside doors have not been treated. Mr Moloney was asked whether "the house is just used as a dwelling house in its present state exposed to all the noise from the highway", to which he replied "I guess so, yes".
Mr Moloney was asked about the flood prone nature of the land and one of the reasons given by him for moving to the main dwelling on the hill being that it is out of the flood area. It was put to Mr Moloney that the dwelling on Lot 1 was also out of the flood risk and he agreed except that in really big floods the garage underneath the house would flood. Mr Moloney was asked whether he had observed people building houses close to the highway in order to be as flood free as possible. Mr Moloney agreed that that would be one reason but stated that over the course of his lifetime the existing Pacific Highway had become much busier. When he went to school in Tyndale he rode his bike along the highway and he would sometimes not see a car the whole way. Mr Moloney stated that the traffic has increased in the 60 years since then and "it's got to the stage now where you wouldn't build a house there if you're in your right mind". Mr Moloney agreed that at the time he lived by the highway it was a busy road, but he stated when he looks back on it now, it was not very busy. Mr Moloney agreed that notwithstanding the growth in traffic today the house by the highway is continuing to be lived in by members of his own family.
It was put to Mr Moloney that it is not a disadvantage for a cane farm to have a frontage to the highway due to the trucks coming to collect the cane. Mr Moloney stated that it is neither an advantage nor a disadvantage as the mill contracts to collect the cane and the cost to the producer of collecting the cane do not depend on the location of the cane pad.
Mr Moloney was asked about the research he undertakes before purchasing cane land and he agreed that he looks at the quality of the land when determining what price to pay. If he was considering purchasing a neighbour's land within the local cane farming cooperative that the neighbour could ask the mill for a record of the historical tonnage produced. Mr Moloney agreed that the Clarence Valley (where the subject land is located) is the southern extremity of where cane is grown in New South Wales and that cane is grown all the way up to far north Queensland. In the northern regions cane is harvested annually unlike in the Clarence Valley where it is harvested every two years. Mr Moloney also agreed that along the Pacific Highway up to Queensland there is a lot of cane land with a frontage to the Pacific Highway. He was asked if someone wanted to buy cane land and that land fronted the highway, would they want to know whether it is good land for growing cane. He stated "well, I guess so, yeah".
Mr Moloney was asked whether the productivity of his land either side of the new highway will be affected by the road. He replied that he did not know and that it "depends on hydrology and all that sort of stuff. Like we're assured that it'll be - can't do - have to wait and see what happens there". He was asked whether the noise and visual effect of the vehicles on the road would affect the productivity of his land, to which he replied "it shouldn't worry the cane". He agreed that if land came up for sale which abutted the new highway in two or three years' time and it was good cane land and he had the money he might consider buying it. The fact that the land was right next to the highway would not bother him one way or the other in terms of getting a return from cane.
Regarding the proposed location of a replacement dwelling, Mr Moloney agreed that he chose that location because he believed it would be a much superior location where he would escape the traffic noise. He was asked whether he had spoken to Mr Koikas about the location to which he replied "yeah, I think I've spoken to him the other day about it". He confirmed that the first time he had spoken to Mr Koikas about the acoustic environment of a proposed replacement home was at the on-site view. He stated that he had not needed Mr Koikas' advice as he had spoken to a neighbour who lived near the proposed location and that the RMS had done testing at the neighbour's house and there was a lot less noise.
It was put to Mr Moloney that if he was told that the location of a proposed replacement dwelling did not give much acoustic improvement from the highway noise, he would not move from his existing home. Mr Moloney stated that it would have to be worthwhile and if not there would be no point moving. Mr Moloney was asked about his reasons for wanting to move to a replacement dwelling. He replied that "traffic noise is the big one. There's also visual, to get away from that area, recreational area, to maintain some - better privacy. That sort of thing as well". Mr Moloney was asked if there was no material acoustic benefit in moving whether he would not bother moving and would put up with the other issues. He stated that it would depend on how much the noise difference would be. Mr Moloney was asked to assume that the traffic noise was not a problem and then asked in that case whether the view of the highway itself would be something that would cause him to move. He replied that "what I had is what I would still like to have" and agreed that he wanted to try and reinstate his situation before the acquisition as much as possible. Mr Moloney was asked about his reaction to the new highway in terms of the way it looks and he replied that it is an eyesore. He was asked whether he could put up with it if he had to and replied that he does not have a choice. It was put to Mr Moloney that he lived in the dwelling on Lot 1 12 m from the existing highway for over 10 years and that the proximity to the road never compelled him to move. Mr Moloney replied that it was the reason to move finally and that it took him a long time to get into a financial position to build a new house. Mr Moloney was asked whether he had considered planting vegetation to screen the visual impact of the new highway. He replied that it would be possible over time and that he hoped to do so if he stayed in the main dwelling.
Regarding the impact of the highway on his lifestyle, Mr Moloney was asked about his concerns for its effect on the area where his children and grandchildren play. Mr Moloney stated that this area around the main dwelling will remain but there will not be visual or acoustic privacy. He stated that the garden on the other side of the main dwelling is not big enough to play cricket or football.
Mr Moloney was asked about the plans for demolishing or decommissioning the main dwelling and stated that he had not discussed the possibility of using it as a rural workers' dwelling with his town planner. On the assumption that the house could stay in its existing state as a rural workers' dwelling Mr Moloney agreed that he would not want to demolish it and that it would be occupied by someone who worked on the farm.

[14]

Sugarcane experts

Mr McGuire for the Applicants and Dr Kingston for the RMS both prepared expert reports dated 18 March 2016. They also prepared a joint report dated 1 April 2016. The experts agreed all matters that they were requested to address in the joint report. As a result of agreements reached between the parties during the course of these proceedings many of these matters are no longer relevant.
Regarding the residual 4.46 ha of land on Watts Farm the experts agreed that it is not suitable for standalone cane production. This area is isolated from other productive land. Use of a drainage pump for such a small area, even if surface drainage was not an issue, would not be practical. As to whether the residual land could be used productively for anything else, it is not suitable for mechanised agriculture due to the short row length and drainage issues. Dr Kingston indicated pasture as a possible use. The experts agreed that in the absence of a drainage pump or adjacent high ground there would be no dry refuge for grazing animals particularly in the event of floods.
Mr McGuire provided written advice to the valuers in these proceedings dated 26 May 2016 entitled "Comparison of Moloneys Home Farm, Watts Farm and 100 Byrons Lane". This document became Annexure 1 to the valuers' joint report. In Mr McGuire's opinion the productivity of cane farms varies under the influence of the following factors: 1. management ability and skills of the farmer; 2. capital outlays to improve drainage and reduce flood impacts; 3. willingness of the farmer to spend on farm inputs such as disease-free planting material; 4. availability of labour at critical times; 5. length of the comparison period and climate (especially major events such as floods over that period).
Under the heading "Productivity" Mr McGuire noted that all three farms grow mostly two year cane but that grouping harvest data into two year periods is arbitrary and not done by staff of the sugar mills who analyse data for the sugar industry. He stated that a more appropriate method is to average total tonnes produced per hectare harvested over the period in question. He then tabulated the productivity data for the three farms (Home Farm, Watts Farm and 100 Byrons Lane) over the 12 year period from 2004 to 2015. I have summarised his comparison in the following table:

[17]

First joint report 4 March 2016

The first joint report of Mr Koikas for the Applicants and Mr Evans for the RMS addressed the existing noise environment of the main dwelling on Home Farm, the noise assessment criteria, noise modelling parameters, predicted "no build" noise levels, predicted "build" noise levels, the impact of the project and noise mitigation. The experts agreed that the existing levels of road traffic noise at the main dwelling are relatively low. While it is possible to hear traffic noise from the existing highway at times it was agreed that the noise levels are lower than those used to define existing traffic noise exposure in the NSW Road Noise Policy (RNP). The experts agreed that the dwelling on Lot 1 is exposed to significant levels of traffic noise that would be classified as "acute" under the RNP.
On the applicable noise assessment criteria, the experts agreed that due to the low level of existing road traffic noise, it is appropriate to adopt the "New Road" criteria from the RNP. The applicable external road traffic noise criteria when measured one metre from the building façade is 55 dB(A) LAeq, 15h for the daytime period (7am-10pm) and 50 dB(A) LAeq, 9h for the night-time period (10pm-7am). They agree that the project will result in an increase in traffic noise levels and therefore the Relative Increase Criteria are relevant. The Relative Increase Criteria state that road traffic noise levels at a residence should not increase as a result of a project by more than 12 dB (day or night) for a given timeframe. Mr Koikas' opinion was that a relative increase of 12 dB(A) would be perceived by a person to be more than twice as loud and that that is an unacceptable increase. Mr Evans' opinion was that the Relative Increase Criteria are primarily intended for use in very quiet environments where noise from a new road may still comply with the "New Road" criteria but would still result in a significant increase. Consideration of the Relative Increase Criteria is warranted but not the controlling factor for determining whether acoustic mitigation is required.
The experts agreed that the RNP does not specify desirable internal noise levels for existing residences, although for new residential developments near busy roads it recommends reference be made to the State Environmental Planning Policy (Infrastructure) 2007 (Infrastructure SEPP). Clause 102(3) of the Infrastructure SEPP recommends that internal noise levels in new dwellings near major roads should be no higher than 35 dB(A) LAeq at night inside bedrooms and 40 dB(A) LAeq at all times inside other habitable rooms. Mr Koikas did not consider that the Infrastructure SEPP criteria are relevant as the Applicants' main dwelling is not a new house. Mr Evans agreed that the criteria are not applicable but considers that they provide an indication of what relevant authorities consider to be suitable internal traffic noise levels for residences.
The experts agreed that another factor that required consideration is sleep disturbance. The RNP concludes that maximum internal noise levels below 50-55 dB(A) are unlikely to awaken people from sleep and that one or two noise events per night with maximum internal noise levels of 65-70 dB(A) are not likely to affect health and wellbeing significantly. The RNP also references a World Health Organisation (WHO) report from 1999 that recommends a maximum internal noise level (Lmax) of 45 dB(A) Lmax. Mr Koikas' opinion was that the research on sleep disturbance is incomplete and therefore more stringent criteria similar to the WHO criteria should be adopted. Mr Evans stated that internal maximum noise levels vary and he has adopted an internal sleep disturbance criterion of 50 dB(A) Lmax for the purposes of this case.
The experts agreed on the noise modelling parameters such as the distance from the main dwelling to the new highway and the speed limit. They adopted a road surface correction of +3.5 dB for cars and +1 dB for trucks for the carriageway and -2.2 dB for cars and -4.3 dB for trucks on the off-ramp. The experts also agreed the predicted "no build" noise levels. In 2026 (10 years from the expected completion of the new Pacific Highway) Mr Koikas predicted a noise level of 46 dB(A) LAeq, 9h at the most exposed ground floor façade of the main dwelling. Mr Evans predicted a noise level of 47 dB(A) LAeq, 9h and they agreed that the 1 dB(A) difference is within modelling error tolerances.
On the predicted "as built" noise levels the experts agreed that the project will result in road traffic noise levels that are higher than existing levels and will exceed the "New Road" criteria. Mr Koikas predicted a noise level of 60 dB(A) LAeq, 9h in 2026, an increase of 15-16 dB(A) above the corresponding "no build" noise level. Mr Evans predicted a noise level of 57 dB(A) LAeq, 9h, a 10 dB(A) increase above the corresponding "no build" level. Mr Koikas was of the opinion that the 3 dB difference in noise predictions between him and Mr Evans equates to a doubling of traffic volumes.
The experts agreed that increased traffic noise levels as a result of the project perceivable at the main dwelling will exceed the RNP. They also agree that the project will significantly reduce road traffic noise levels at the dwelling on Lot 1 due to the redirection of traffic to the new Pacific Highway. Mr Koikas said that applying the 12 dB(A) allowance recommended by the RNP per the Relative Noise Criteria is unacceptable and not mandatory or enforceable.
On noise mitigation the experts agreed that low surface noise treatments to the new highway may be possible although the reduction achieved at the main dwelling would be only just perceptible. They also agreed that noise barriers are not reasonable or feasible but acoustic treatments should be applied to the residence to achieve internal noise levels consistent with the Infrastructure SEPP. Mr Koikas reiterated his opinion that it is unacceptable to apply the Infrastructure SEPP recommended indoor criteria as they are not relevant to existing dwellings.
Mr Koikas stated that even with the application of acoustic treatments the impact of the new highway will be unacceptable because reducing traffic noise levels in indoor spaces does not result in a reduction of traffic noise in outdoor spaces. The Applicants advised Mr Koikas that they use the indoor and outdoor areas as one connected space for recreational and dining purposes. Mr Koikas was of the opinion that the main dwelling should be relocated. Mr Evans agreed that there will be an impact from the new highway on the ambient noise environment at the main dwelling and that this warrants noise mitigation. His opinion differs from Mr Koikas in that he thinks the most appropriate form of mitigation is acoustic treatment. Mr Evans' opinion was that with appropriate treatments to the main dwelling suitable internal noise levels can be achieved that are consistent with the recommendations of the Infrastructure SEPP for new residences.

[18]

Supplementary joint report 10 May 2016 (acoustic treatment of main dwelling)

Following the first joint report Mr Koikas issued a supplementary report on 31 March 2016 detailing the acoustic treatments to the main dwelling that were in his opinion necessary to obtain a suitable level of internal acoustic amenity. Mr Evans reviewed this supplementary report and issued his response on 2 May 2016. A supplementary joint conference was held to identify areas of agreement and disagreement between the experts which resulted in a supplementary joint report dated 10 May 2016.
In this report the experts agreed that acoustic treatments can be provided to the main dwelling to provide internal noise levels that are consistent with the recommendations in Australian Standard AS 2107:2000 and the Infrastructure SEPP and for maximum noise levels for reducing the chance of sleep disturbance. The experts agreed on the glazing required to be fitted, the acoustic seals to the front door, the insulation and loaded vinyl to be installed and that mechanical ventilation would be required in all bedrooms and living rooms. They agreed that the garage, bathrooms, laundries and toilets would not require acoustic treatment.
The experts stated that acoustic treatments would not influence the traffic noise levels outside the main dwelling, which will increase as a result of the project. Mr Evans' opinion was that with the new highway operational daytime traffic noise levels in the outdoor areas adjacent to the main dwelling will be consistent with the recommended level in the RNP for passive recreation areas of 55 dB(A) LAeq, 15h. He stated that while this criterion is not strictly applicable to residential properties, the RNP specifies this level for areas characterised by low noise activities that are compromised by external noise intrusion. Given the location of the main dwelling on rural land with noisy daytime activities, Mr Evans considered it reasonable that the outdoor areas have daytime noise levels consistent with the RNP passive recreation area limit. Mr Koikas' opinion was that use of the Applicants' outdoor space will dramatically diminish due to the dynamic contrasting levels of traffic noise. He stated that the distant drone of traffic noise they currently hear will become more intrusive and alarming when the highway is brought closer.

[19]

Fourth joint report 12 December 2016 (location of replacement dwelling)

During the Court visit to Home Farm the location of a replacement dwelling was discussed. It was decided that the acoustic experts should determine whether a replacement dwelling in the location proposed by the Applicants would require acoustic treatment to ameliorate road traffic noise. Consequently the experts prepared a fourth joint report dated 12 December 2016.
The experts based their assessment on the RNP standards for external measurements (50 dB(A) LAeq, 15h (daytime) and 55 dB(A) LAeq, 9h (night-time)) and the Infrastructure SEPP standards for internal measurements (40 dB(A) LAeq, 15h inside living rooms and 35 dB(A) LAeq, 9h inside bedrooms). The experts agreed that with windows open it is typical for there to be a 10 dB(A) difference between external and internal noise levels. Although they did not agree on the need for a replacement house, the experts agreed for the purposes of the report that a replacement dwelling would be assumed to be a double storey house of the same scale as the main dwelling on Home Farm.
The predicted noise levels at the proposed location for a replacement dwelling are agreed. The experts agreed that a replacement dwelling would require some level of acoustic treatment for bedrooms with windows located on the northern, eastern and western façades in order to achieve the internal noise criteria. Any living room windows and doors on the northern and eastern façades may also require treatment. They agreed that the treatment would not be as significant as that which would be required for the main dwelling but would involve a minimum 6.38 mm glazing and window and/or door seals. Doors and windows would also be required to be kept closed on those façades in order for the internal noise criteria to be achieved. If the layout was changed so that bedrooms and living spaces were on the western and southern façades, the building would not need any acoustic type windows.
Appendix D to the report contained noise contour maps and predictions prepared by Mr Evans. The contour maps showed the predicted night-time road traffic noise levels at the proposed location for the replacement dwelling for the period of project opening and in 2026.

[20]

Cross-examination of Mr Evans

Mr Evans was cross-examined about the RNP and agreed that the road noise criteria for Home Farm is exceeded. Mr Evans agreed that the condition of the highway project approval referring to the RNP specified an objective of not exceeding the RNP. He accepted that the project was not designed and operated so as not to exceed the road noise criteria but stated that one can still have the objective of complying even if that objective is not always met. Mr Evans agreed that the assessment criteria in the RNP are not mandatory but provide a basis for establishing noise levels that can be incorporated into conditions and planning approvals or licences issued by the Environment Protection Authority. Mr Evans agreed that in his experience the RNP is not used as a guide to assist in determining whether a road project should be approved and that a failure to comply with the RNP would not lead to a refusal of development consent.
Mr Evans was asked about his evidence that the current noise environment at the main dwelling is one that he would describe as not being controlled by road noise. Mr Evans qualified this by stating that this was his opinion of the daytime noise environment and that he had visited Home Farm one morning between 6:00am and 7:00am. At that time the road traffic noise was generally controlling the noise level. He agreed that he would maintain his description that the overall noise level is relatively low but stated that the night-time environment can be controlled by road noise at the moment. In Mr Evans' opinion once the new highway is built the environment will be more likely to be dominated by road noise but there are other noises from activities such as farming that could be louder in some circumstances. He did not agree that the current noise environment is not dominated by noise as traffic noise can be heard from the existing highway.
Regarding the characteristics of noise, Mr Evans agreed that at close distances to a noise source the peaks can be heard loudly. Individual peaks reduce in their subjective and measured loudness when the noise source is further away. He agreed that at a certain distance the significance of individual moments is lost and it becomes more of a background noise. Mr Evans agreed that the peaks in noise contribute in part to sleep disturbance. Mr Evans was asked about the distance-based criteria in the EIS for the highway project and agreed that the main dwelling is so far away from the existing road that it would not have been assessed for noise impacts according to the EIS or RNP parameters.
Mr Evans was asked about how the criteria in the RNP of 55 dB(A) LAeq, 15h (daytime) and 50 dB(A) LAeq, 9h (night-time) came to be identified. He agreed that the criteria were designed for the point at which 10% of the exposed population was "highly annoyed". Mr Evans agreed that if the noise was louder than the RNP criteria then more of the population would become highly annoyed. He also agreed that the social studies though which the criteria were identified were conducted on people who had been exposed to road traffic noise "for some time". Several noise studies concluded that people without previous exposure found noise "highly annoying" at a lower level. Mr Evans agreed with the results of those studies that in an environment completely new to noise, 10% of the population would find traffic noise highly annoying at around 46-47 dB(A) LAeq, 15h rather than 55 dB(A) LAeq, 15h per the RNP.
Regarding the noise modelling, Mr Evans agreed that an assumption is made that the vehicles travelling on the road are adhering to the speed limit. He agreed that some cars would be speeding on the new highway and that speed contributes to noise. He agreed that vehicles travelling faster are noisier. Mr Evans agreed that if the treatment to the road surface changes it can have measurable differences to noise output. Mr Evans was asked about the assumption adopted by him and Mr Koikas that the southern off-ramp would be used by 1% of the total vehicles travelling on the new highway. He agreed that this assumption could be wrong and that if more than 1% of trucks use the southern off-ramp this could create a significant impact on the noise level. Mr Evans stated that it would have to be a very high number of vehicles before it had a noticeable impact on the predicted noise levels. Mr Evans was asked about other assumptions in the modelling and agreed that it assumes neutral weather conditions but that weather can affect a receiver's perception of noise. He agreed that wind direction and a wet road can increase the noise from the traffic. Mr Evans stated that due to noise propagation over distance the variation due to weather conditions would have less of an impact with the new highway compared to the existing highway as the variation is lower where the road is closer to a receiver, in this case the main dwelling on Home Farm.
Mr Evans agreed that because there was not a specific control for the external noise levels at the main dwelling he had used the passive recreation control in the RNP as a surrogate. He also agreed that the RNP recognises potential impacts to areas outside the building and that the criteria in the RNP are attempting to identify controls applicable to external areas.
Mr Evans was asked about the reorientation of a proposed replacement dwelling and agreed that it would mean exposing a shorter façade to the most significant noise source. The main dwelling faces towards the northeast and overlooks the cane fields on Home Farm. A proposed orientation for a replacement dwelling towards the east was considered by the experts in their fourth joint report dated 12 December 2016. Mr Evans also accepted and agreed with the concept of grazing as permitting a greater than 10 dB(A) noise reduction if the sound source grazes rather than hits the surface squarely. He also agreed that it provides for some acoustic shadow to the sides and rear of the building because of its orientation. Mr Evans agreed that the surrogate passive recreation noise level he adopted of 55 dB(A) LAeq, 15h for the outdoor areas includes a façade reflection factor of +2.5 dB(A). Mr Evans was asked about the predicted noise levels at the proposed dwelling location in 2026 compared to the main dwelling in 2026. He agreed that the proposed replacement dwelling would comply with the external noise passive recreation criteria. Mr Evans agreed that on the southern façade of the proposed replacement dwelling there was the potential for windows to be left open and for the internal noise levels to still comply with the controls. In his opinion a 15 dB(A) reduction in noise due to grazing overstates its effect.
It was put to Mr Evans that a 2-3 dB increase is about what can be perceived. Due to the logarithmic scale the difference between 47 dB and 58 dB is more than a doubling of the noise level. He agreed that about 2-3 dB is perceptible and that +11 dB was slightly more than a doubling of the noise level. It was put to Mr Evans that the difference between 7-11 dB is significant. He replied that it is noticeable but not significant. He agreed that it would be a change in noise to which different people would react in different ways. Mr Evans was asked if a change from 47-54 dB might not be highly annoying compared to a change from 47-58 dB. He stated that there would be some people who would be highly annoyed by one, but not the other, but that there would still be a lot of people that would be highly annoyed by it.

[24]

Objective consideration in "after" scenario required

In the "before and after" method objective evaluation of the matters the hypothetical parties are assumed to take into account in determining what amount they will pay for and accept in a hypothetical sale of the land is considered. The parties' valuers have agreed the value of Home Farm in the "before" scenario. As to the "after" value, the sale of the residue land must be considered as in Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 as a transaction in which the buyer and seller must be attributed with knowledge of all matters that affect its value, either advantageously or prejudicially including its situation, character, quality, proximity to conveniences or inconveniences and surrounding features. The value is determined by forming an opinion as to what a willing purchaser would pay and what a not unwilling vendor would receive for the property, see Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413; [1999] HCA 25 at 436; Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 at 276; Coundrelis v Roads and Traffic Authority of NSW [2008] NSWLEC 72 at [9].
The determination of value is objectively made and does not depend on the subjective views or preferences of the owner or of persons interested in the land from time to time, see The Minister v New South Wales Aerated Water and Confectionary Co Ltd (1916) 22 CLR 56; [1916] HCA 48 referred to in Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307; [2016] NSWCA 7 at [24] and Leichhardt Council v Roads and Traffic Authority (NSW) (2006) 149 LGERA 439; [2006] NSWCA 353 where Spigelman CJ stated at [42]: Section 56(1) is an objective test to which considerations entirely personal to the owner are not material.
In Allandale Basten JA with whom Ward JA agreed stated at [24] that the principle in Aerated Water applied to the determination of market value of land under ss 55(a) and (f) of the Just Terms Act.

[25]

Hypothetical parties assumed to be informed by acoustic reports

At the date of acquisition there were two dwellings erected on Home Farm. The main dwelling was occupied by the Applicants and the dwelling on Lot 1 was occupied by their daughter and her family. There was evidence of use of the curtilage of the main dwelling for recreation by the Applicants' family in Mr Moloney's affidavit and oral evidence summarised above in pars 23 and 34. At issue is the objective advice that a prudent hypothetical purchaser in particular would be considered to receive in the "after" scenario. The nature of this advice is determined in the usual way by the Court considering competing advice to determine what is most appropriate, see Caruso at [4].
The Court of Appeal in Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66 at [20] upheld the trial judge's finding that a prudent hypothetical purchaser would obtain an acoustic report on the impact of an upgraded highway on the residue land and main house. A similar approach to the acoustic evidence in this matter is warranted given the close proximity of the new highway to the main dwelling. The objective findings of the acoustic experts summarised above in par 45 and following in relation to noise impacts in the "before and after" situation can be assumed to be known to a prudent hypothetical purchaser in particular. The experts generally agreed about the predicted noise impacts on the Applicants' main dwelling and curtilage as set out in the first joint report summarised above in pars 45-53. They agreed how the RNP would apply to noise impact assessment (pars 45, 46 above) at the main dwelling. Their minor differences were explained by them as resulting from the application of different algorithms. In those circumstances it is not necessary that I choose between their respective approaches. That advice informs the prudent hypothetical vendor and purchaser under the assumptions necessary for the Spencer test. The informed purchaser will be aware that the amenity of the main dwelling and surrounds in the "after" scenario will be adversely affected by substantial noise from the new highway.
Other impacts of the new highway on the main dwelling which the hypothetical purchaser will be aware of in the "after" scenario are lack of privacy and the view from the front of the main dwelling being dominated by a six lane highway in an otherwise rural outlook. Such a purchaser is likely to consider a substantial reduction in the value of the main dwelling is warranted in these circumstances.
It is necessary to be careful in identifying what evidence should be attributed to the incoming hypothetical purchaser. The evidence of Mr Koikas in particular addresses the acoustic evidence from the Applicants' perspective including what changes they are likely to experience once the highway upgrade is complete and what is a reasonable reaction to those changes, namely moving to another dwelling on the residue land. The Applicants' experience is different from that of the assumed incoming hypothetical purchaser as it is influenced by their personal longstanding experience of Home Farm.
It was agreed by the acoustic experts that the noise environment of the dwelling on Lot 1 will improve due to the reduction of traffic on the existing highway after the new highway opens.

[28]

Application of "before and after" method in this case - any relationship between s 55(f) claim and disbursement claim for replacement dwelling under s 55(d)?

As will be set out below, the valuers departed from the simple "before and after" approach in that they separately determined the market value of Home Farm on the one hand and each of the building improvements (fixtures) on the other. The "before" value of Home Farm at the date of acquisition was calculated by the summation of the market value of the land and the value of the improvements. The assumption was that this would equal the overall market value of the property sold in the hypothetical sale required by the definition of "market value" in s 56(1) in the "before" scenario and the value of the residue in the "after" scenario.
An issue that arises in light of the Applicant's disbursement claim for a replacement dwelling including a new road and services on the residue land is whether the "before and after" method otherwise encapsulates such a claim as part of any loss of value of the residue land as provided for in s 55(f).
Peak considered the assessment of compensation for the partial compulsory acquisition of a cattle stud. Amongst other farm improvements, the property contained a residence which before acquisition was situated about 90 m from the old highway and after acquisition was 35 m closer to the boundary of the realigned highway. At first instance it was held that the dwelling was rendered uninhabitable and practically valueless by the public purpose due to the noise impacts from the upgraded highway. No claim was made for the costs of building a new house to replace the existing house on the residue land. The costs of relocation to a new home were claimed as disbursement under s 59(f). I note that s 59(1)(f) is in identical terms to s 59(f). All references to s 59(f) are to be taken to be equivalent to s 59(1)(f). Compensation was assessed by allowing a reduction of the "before" value of the residence by an amount which represented almost its whole "before" value. The "after" value of the residence was fixed at $10,000. The "before" value was agreed.
In McDonald v Roads & Traffic Authority of NSW (2009) 169 LGERA 352; [2009] NSWLEC 105, a partial acquisition of land, the main dwelling was acquired by the resuming authority. The valuers adopted the "before and after" approach to determine the market value of the acquired land under s 55(a). The market value of the parent land before acquisition was determined on the basis of direct comparable sales evidence and the value of the residue land in the "after" was agreed. The Court of Appeal in Roads & Traffic Authority of NSW v McDonald (2010) 175 LGERA 276; [2010] NSWCA 236 at [88] confirmed the "before and after" method as a valid approach to determine market value in the circumstances of that case. On appeal Tobias JA considered the "before and after" method and the separate claim for disturbance relying on s 59(f), referring to Peak. In both McDonald and Peak the applicants claimed some or all of the costs related to replacing a dwelling such as a new road, a bridge to provide access to a new house, the connection of services, new fencing and the costs of making a development application. No claim for the cost of building a replacement house on the residue land was made. That suggests that the applicants in those cases considered that the value of the dwelling to be replaced was otherwise encapsulated in the claim for compensation being made or was not available to be claimed. The costs claimed as disbursements were awarded by the trial judge in McDonald and upheld on appeal. In Peak the Court of Appeal recognised a proper basis existed for such claims and remitted the matter to the Court for further determination. The parties resolved the matter without the need for a further hearing.
The summation "before and after" method used by the valuers to determine compensation under ss 55(a) and (f) in the present case is similar to that adopted in Peak and McDonald. I will return to the issue identified in this section when I consider the disbursement claim below commencing at par 247. The issue also arises in the assumptions made by the valuers in applying the "before and after" approach as I discuss below.

[34]

As can be seen in the table above the valuers agreed on the three land types present on Home Farm and their land value rate per hectare in the "before" scenario. The "before" value of the land was agreed at $1,236,750. While there was disagreement about the value of improvements during the hearing, the valuers have now agreed these as $443,500. Consequently, the total "before" value is $1,680,250. This is the price that would have been paid for Home Farm by a prudent hypothetical purchaser and accepted by a prudent hypothetical vendor within s 56(1) disregarding, inter alia, any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.
Comparable sales used by the valuers to value cane land in the "before" scenario do not need to be set out because the "before" value was agreed.
The parties' valuers disagree about the value of the residue in the "after" scenario as identified in summary in the table below: After Watt Frogley 72.84 ha Cane @ $15,000 $1,092,600 19.83 ha @ $12,750 $252,833 54.08 ha @ $11,250 $608,400 0.5 ha Creek @ $5,000 $2,500 0.2 ha @ $3,750 $750 0.9 ha Bushland @ $8,000 $7,200 0.13 ha @ $6,000 $780 74.24 ha $1,102,300 74.24 ha $862,763 15% IA Lot 1 25% IA to Balance (parts lots 3, 4 etc) Improvements

Dwelling Lot 1 $90,000 $100,000
Older Ancillary $20,000 $12,000
Main Dwelling $170,000 As storage $30,000
Rural Sheds $100,000 $97,500 TOTAL $1,482,300 $1,102,263 Difference (Before/After ss 55(a) and (f) compensation) $197,950 $577,987

[36]

Injurious Affection - valuation of Home Farm main dwelling in "after"

In his individual report Mr Watt addressed three possible "after" scenarios in relation to the main Home Farm dwelling depending on which one was applied by the Court. The scenarios were: 1. Assume the main dwelling was treated with the range of acoustic measures that was agreed by the RMS, then assume a 10% reduction in market value of the main dwelling for visual intrusion and 5% noise impacts to the outdoor dwelling environment. 2. Assume no such acoustic treatments are to be carried out, and allow a further reduction in the "after" value (and, consequent rise in the quantum of compensation of 20% (to a total of 35%). This scenario is no longer relevant given the agreement that the RMS will provide acoustic treatment to the main dwelling as required by the consent conditions. 3. Consider the market value of a new replacement main dwelling located in the south-west corner of the residue Lot 694 (former Lot 4), currently bushland, remote from the impact of the main road on residential use, and allow for the cost of a new dwelling, ground improvements and services. This scenario has no application in the "before" and "after" approach as I have found that the main dwelling would be regarded as habitable in the "after" scenario.
In the valuers' joint report Mr Watt rejected the claim for a new dwelling in the "after" scenario and said it was not reasonable. Mr Watt did not assume in his "after" valuation of Home Farm that there was a necessity to relocate the main dwelling, decommission it or allow for the cost of construction of an alternative main dwelling in a different location. His approach in the "after" scenario was on the basis of the first scenario.
Mr Frogley did not make an express allowance for any of the three scenarios, apparently on the basis that the cost of a replacement dwelling should be dealt with as an out-of-pocket cost item under s 59(1)(f) in accordance with his instructions. As already noted in par 98, Mr Frogley valued the main dwelling in the "after" scenario as if used for storage only, not as a dwelling. That is not the correct approach. The correct scenario to consider is (a), the main dwelling will receive acoustic treatment.

[37]

Extent of IA - whether decrease in value of whole Home Farm residue or just main dwelling and curtilage

A major difference between the parties concerning both farms is the loss of value (if any) of the residue land encapsulated in s 55(f) of the Just Terms Act. The Applicants contend that the value of the whole of the two residue parcels decreased by reason of the carrying out of the public purpose for which the land was acquired.
Mr Watt said in the joint report that the dominant use of the parent parcel and the residue land of Home Farm is as a sugarcane farm where the agricultural use and its potential is unaffected by the public purpose. Mr Watt stated in his original report that the highest and best use of the parent parcel and the residue land of Home Farm was the same, namely "their existing use, being a rural holding used for agricultural purposes, predominantly cane farming, including residential and rural buildings".
Mr Frogley did not explicitly refer to the concept of "highest and best use" of the parent parcel or the residue. He describes the physical features of each of the allotments comprising the parent parcel and the residue land. In each case he states that the lot is used for sugarcane farming and is considered to be well suited for that purpose, including the lot on which the dwelling on Lot 1 and the lot on which the existing main dwelling are erected. Mr Frogley argued in the joint report that "injurious affection is applicable in effect to the whole of the property". He stated that while the current use of Home Farm is as a sugarcane farm there is an inherent use also as a "home" and that use is applicable not only to the main dwelling and curtilage but "to the property in an overall sense". He concluded by describing the property as "a well located rural property used for sugarcane farming".
In cross-examination Mr Moloney was asked about the impact of the noise and visual effect of vehicles on the new highway on the cane land on Home Farm. Mr Moloney replied that "it shouldn't worry the cane".

[40]

1035 Hinterland Way Bangalow (Mr Watt)

Sale 10 at Lot 100 Pacific Highway Bangalow is a productive rural lifestyle property situated approximately 100 km north of Tyndale. The land has an area of 45.93 ha, is partly developed as a macadamia nut orchard and contained a dwelling as well as other improvements. The balance of the land is utilised for cattle grazing. There are extensive rural views and distant ocean views from parts of the land. The sale transacted on 20 October 2010 for $1,440,000. The land is residue from which 1.64 ha was acquired for the Tintenbar to Ewingsdale stage of the Pacific Highway upgrade. Mr Frogley was advised that the purchaser intends to construct a new dwelling on the land further removed from the highway as the existing dwelling was considered uninhabitable due to its proximity to the road.
In Mr Frogley's opinion Sale 10 was affected by the new highway and this is reflected in its land value. He deduced a hypothetical land value for the property as if unaffected by the highway based on analysis of comparable Sales 11, 12 and 13 (see par 114 below). This showed a diminution in value of Sale 10 as a result of the highway which represents IA of 32%. Mr Frogley considered that Home Farm suffered a greater degree of IA compared to Sale 10 because the new highway traverses the middle of Home Farm leaving the Applicants with less choice as to where they could construct a replacement dwelling.
Sales 11, 12 and 13 are all rural lifestyle properties near Sale 10 and are unaffected by the new highway. The sales transacted shortly before Sale 10, between September 2009 and February 2010. Sale 11 is 36 ha of predominantly clean open grazing country and is not considered suitable for horticultural production. Sale 12 has an area of 29.06 ha, is used in part as a macadamia nut orchard and has extensive rural and mountain views. Sale 13 may have some suitability for horticulture but is predominantly open grazing land across its 44.52 ha. All sales were deemed to have a higher land value on a per hectare basis than Sale 10 in the hypothetical scenario that Sale 10 was unaffected by the new highway.
Mr Watt addressed Mr Frogley's analysis of Sale 10 and the related unaffected sales in the joint report. In Mr Watt's opinion the property was already exposed to the dual carriageway old Pacific Highway before the upgrade. The purchaser of Sale 10 confirmed placing little or no value on the existing residence (which remains) when it was purchased and reports that there are far safer access arrangements in place with the new highway. Mr Watt inspected the property on 19 May 2016 and considered that much of the land including the replacement dwelling is unaffected by noise or visual blight from the new highway.
Mr Watt criticised Mr Frogley's use of Sales 11, 12 and 13 as points of comparison with Sale 10 as they are all superior properties. All have superior views, are closer to Byron Bay, are mostly cleared land and provide a superior range of potential agricultural uses. By contrast Sale 10 is an income producing macadamia farm in addition to being a rural lifestyle property.
Mr Watt introduced another sale - 1035 Hinterland Way Bangalow - which he suggested was a better comparison with Sale 10. This property is predominantly used as a macadamia farm and was sold in November 2014. It includes a country residence and various other improvements. Mr Watt derived a land value rate for this sale which is lower than the rate Mr Frogley calculated for Sale 10. Accordingly, even assuming no improvement in the market since October 2010 when Sale 10 was sold, no IA is measured when comparing these two sales according to Mr Watt.
Mr Watt concluded from his analysis of Sale 10 that it is difficult to accept Mr Frogley's proposition that IA applies to the income producing portion of the land rather than to the existing dwelling.
Mr Frogley replied to this criticism in the joint report stating that Mr Watt's sale (1035 Hinterland Way Bangalow) is not relevant as it occurred four years after Sale 10. The preferred approach should be to rely on relevant sales available at the time Sale 10 transacted as no adjustments for market changes are needed.

[41]

38 Old Tintenbar Road Tintenbar (Mr Watt)

Sale 14 at 22 East Street Tintenbar is a cattle grazing and rural lifestyle property situated close to Ballina approximately 90 km north of Tyndale. The land has an area of 34.44 ha and is open country with extensive rural and distant ocean views. The sale transacted on 18 September 2014 for $725,000. In Mr Frogley's opinion the property has a similar use to Home Farm in that it provides on-farm income from an established enterprise but also contains a dwelling house for the owner.
Sale 14 is affected in terms of noise, privacy and amenity by the new Pacific Highway after part of the land was acquired for the Tintenbar to Ewingsdale upgrade. Mr Frogley deduced a hypothetical land value for the property as if unaffected by the highway based on analysis of comparable Sales 15 and 16. This showed a diminution in value of Sale 14 as a result of the new highway which represents IA of 34.5%.
Sales 15 and 16 are also grazing and rural lifestyle properties of similar area to, in the same region as and having transacted within months of Sale 14. The land the subject of Sale 15 is generally cleared, divided into several fenced paddocks, contains a dam and other improvements. The land has excellent rural, valley and ocean views. The land the subject of Sale 16 is predominantly cleared suitable for cattle grazing and contains two dwellings. It has frontage to Wilson River and Byron Creek. Mr Frogley calculated that Sale 15 had a greater land value rate to Sale 14 (if unaffected by the highway) whereas the land value rate of Sale 16 was lower.
As with Sale 10, Mr Frogley considered that Home Farm suffered at least a similar or greater degree of IA compared to Sale 14 because the new highway upgrade traverses the middle of this property leaving the Applicants with less choice as to where they could construct a replacement dwelling.
Mr Watt considered the market evidence relied upon by Mr Frogley did not show IA at Sale 14. He suggested the sale of 38 Old Tintenbar Road Tintenbar was a better comparison with Sale 14. This property, 90 km north of Tyndale, is mostly timbered land and is unaffected by the new highway. It did not, on Mr Watt's analysis, show a land value rate that would indicate IA at Sale 14.
Mr Frogley replied to this criticism in the joint report stating that Mr Watt's new sale (38 Old Tintenbar Road Tintenbar) is a significantly inferior allotment to Sale 14. Approximately 88% of Mr Watt's sale is heavily timbered and largely unsuitable for rural production due to the undulations of the land.

[43]

163 Quarry Lane Ewingsdale (Mr Frogley)

Mr Watt considered 60 Myocum Road Myocum, a grazing property approximately 110 km north of Tyndale that contains a residence immediately adjacent to the highway. It is similar to Home Farm in that the land is level or gently undulating and low-lying in part. This property was sold in June 2014 for $1,250,000. Mr Watt calculated its land value rate at $26,724/ha. During the view the property was seen to be occupied by a refrigerated transport business.
178 Woodford Lane Ewingsdale is a grazing property approximately 110 km north of Tyndale that sold in January 2015 to an adjoining owner for $900,000. It is separated from the upgraded highway only by Woodford Lane. The land is similar to Home Farm in that it is level or gently undulating and low-lying in part. Mr Watt calculated its land value rate at $30,414/ha.
To compare with these sales Mr Watt relied on 70 Kennedys Lane Ewingsdale, also a grazing property, which sold in December 2014 for $1,200,000. This property is remote from the highway and has arguably superior quality land yet returned a lower land value of $26,155/ha.
Mr Frogley criticised Mr Watt's analysis of these sales. He disagreed that 70 Kennedys Lane is of superior land quality compared to 60 Myocum Road and 178 Woodford Lane. Mr Frogley derived a slightly higher land value rate for 70 Kennedys Lane of $26,591/ha. This was apportioned into elevated (20 ha at $32,000/ha) and low-lying land below 10 m AHD (14.41 ha at $19,084/ha). By comparison, 60 Myocum Road is significantly higher with approximately 23.5 ha between 20-30 m AHD and some points having ocean views. 60 Myocum Road is also approximately 2 km closer to Byron Bay and is significantly easier to access due to the configuration of local roads. For these reasons Mr Frogley considers 70 Kennedys Lane to be in an inferior location to 60 Myocum Road.
Mr Watt responded to this criticism in the joint report. He disagreed that the low-lying nature of part of 70 Kennedys Lane degraded the quality of the land to the extent contended by Mr Frogley. He also suggested that properties sold on Kennedys Lane in the past five years have returned values that do not support Mr Frogley's contention that this location is inferior to 60 Myocum Road.
Mr Frogley introduced another sale in the joint report - 163 Quarry Lane Ewingsdale - which he believed was a better comparison to the sales of 60 Myocum Road and 178 Woodford Lane. 163 Quarry Lane is gently undulating with good rural and mountain views, is unaffected by the highway and contains a dwelling house. Approximately 17.5 ha (or 61%) of the land is low-lying. The property sold in March 2014 for $1,705,000. Mr Frogley calculated its land value rate at $50,053/ha. On the basis of this sale Mr Frogley calculated hypothetical land values for 60 Myocum Road and 178 Woodford Lane as if they were unaffected by the new highway. These showed IA on the sales of Mr Watt at 29.3% and 31.7% respectively.
Mr Watt provided extra context to the sale of 163 Quarry Lane which he believed could not be relied on to compare to 60 Myocum Road and 178 Woodford Lane. Mr Watt spoke to one of the landowners at 163 Quarry Lane and formed the opinion that this property was purchased as a form of land banking mindful of residential and rural residential development growth in the Byron Bay area. In the same year that 163 Quarry Lane was bought the owners also purchased two other properties bringing their total land ownership in the Quarry Lane locality to approximately 160 ha. The owners did not seek to look outside Quarry Lane when purchasing number 163 due to their existing holdings. The land is very productive all year round with good pasture sufficient for livestock without the need for extra feed. For these reasons Mr Watt is of the opinion that 163 Quarry Lane is far superior compared to 60 Myocum Road and 70 Kennedys Lane.
Mr Frogley responding to these comments by Mr Watt said that he was satisfied having spoken to marketing agents that the sale prices for 163 Quarry Lane and 178 Woodford Lane (same purchaser) represented market value. The land is zoned rural and used for that purpose therefore its value in both cases is considered to reflect its rural use and not a speculative value as suggested by Mr Watt.

[45]

Cross-examination on comparable sales

Mr Frogley was cross-examined about the comparability of the Byron Bay hinterland sales to Home Farm and the impact this had on his assessment of IA. These properties all have rural land uses however none are used for cane farming. Mr Frogley agreed that these properties are used to support a rural living lifestyle and do not have the same income producing ability as a cane farm in Tyndale. Landowners of rural Byron Bay hinterland properties generally supplement their farming enterprise with off-farm income.
Mr Frogley agreed that differences in the use of rural land, whether for grazing cattle, growing macadamias or sugar cane, did not affect his assessment of IA. In his opinion IA applies equally to rural properties in the Byron Bay hinterland and Tyndale areas. The hinterland sales are also supportive of the sale of 100 Byrons Lane (see par 155 below) in that they demonstrate a reduction in value as a result of the new highway.
Mr Watt confirmed in cross-examination that the Gulmarrad sales were total sales. Mr Watt agreed that he had not analysed the macadamia nut farm market on the north coast to understand market movement between 2010 and 2014. His understanding is that the market improved in that period but that is not based on any analysis by him. He did not make any adjustment for time for 1035 Hinterland Way Bangalow to reflect the date of sale difference of two years. He agreed "The Farm" at 178 Woodford Lane Bangalow has significant acreage exposed to a busy road. Mr Watt agreed the sale at 60 Myocum Road was a refrigerated transport business which benefits from being close to a highway. In relation to Wileys Lane Newrybar (Lot 3 Pacific Highway Bangalow, case study 15 of Mr Green), Mr Watt agreed that sale showed IA across the whole property of 23.6% and 25% respectively in valuation reports which became Exhibits L1 and L2. The land had an area of 51.4 ha with a dwelling and was cleared and used for grazing cattle.

[47]

Finding on whether comparable sales show IA

A large number of sales were identified by the valuers. Mr Watts was of necessity largely reactive in his identification of sales to those identified by Mr Frogley. He chose sales which when analysed did not suggest IA as a result of the highway.
According to Mr Frogley, by comparing different properties which sold before and after the new highway was constructed, his sales showed that IA occurred over the whole area of land sold in the "after" sales. There are several difficulties with this approach. Whether such an affect was demonstrated is not particularly helpful to the Court because many of the sales were of properties with very little in common with the Applicants' cane farms. The Applicants' counsel's submissions that Mr Frogley was endeavouring to assist the Court in the absence of nearby comparable sales can be accepted. That does not mean that the comparisons of the selected sales assist. I agree with the RMS that Mr Frogley's sales in the Byron Bay hinterland are remote from the subject land, have markedly different land uses (rural lifestyle) and are not comparable. That IA was found by Mr Frogley to apply across the whole of certain types of properties with quite different characteristics to the Applicants' farms does not mean that the same result should be assumed to apply to the Applicants' farms. Separately the issue arises of whether in fact any IA found can be attributed to the whole of a property rather than particular improvements.
The three different groups of sales relied on by the valuers are set out above. Mr Frogley's "after" Sale 10 was compared by him with unaffected "before" Sales 11, 12 and 13. All are markedly distant from the subject farms being in a different, more popular local government area near Byron Bay. Many have substantial ocean and district views. All the properties are best described as rural lifestyle in use, as was evident on the view. I agree with Mr Watt's criticisms of these sales as summarised above in pars 115-116. The range of variables for each sale appears too large to enable the attribution of IA to the effect of the highway alone. None of the sales are "paired" sales in the usual sense applied in valuation methodology. That must inherently undermine this approach. I do not accept Mr Frogley's evidence that Home Farm would have an even greater degree of IA compared to Sale 10 because of limited locations for a replacement dwelling. As already stated that is not the relevant scenario which the prudent hypothetical parties are assuming.
The next group of sales, Mr Frogley's "after" Sale 14 compared with unaffected "before" Sales 15 and 16 are still a substantial distance (over 90 km) from the Applicants' farms. These properties also have a number of attributes which render them markedly different to those of the Applicants' farms as was evident on the view. They are best described as rural lifestyle properties. The range of variables for each sale appears too large to enable the attribution of IA to the effect of the highway alone. None of the sales are "paired" sales in the usual sense applied in valuation methodology. That must inherently undermine Mr Frogley's approach. Mr Watt found another property in the vicinity (38 Old Tintenbar Road Tintenbar) which did not have similar characteristics to Sale 14 (being heavily timbered) but was unaffected by the highway and showed no IA. The same criticism made in the previous paragraph can be made of Mr Frogley's finding that Home Farm was more affected than Sale 14 because of reduced portions for a replacement dwelling.
The next group of Mr Watts' sales were at Myocum and Ewingsdale, 110 km north of Tyndale, and were relied on to demonstrate that no IA of land near the highway occurred. The affected sales identified by Mr Watt were at 60 Myocum Road and 178 Woodford Lane, which he compared with 70 Kennedys Lane as an unaffected sale. Mr Watt was seeking to demonstrate that there was no apparent affectation resulting from the highway because the unaffected property showed a lesser rate per hectare than the affected properties. The property at 60 Myocum Road was being used for a refrigerated transport business which I accept benefits from close proximity to a major highway so that this sale is less reflective of land values comparable to the Applicants' cane farms. As occurred in relation to the other groups of sales the valuers introduced in the joint reporting process additional sales which they considered confirmed their respective views. Ultimately I found this to be of little assistance because the properties are so markedly different from the subject land, as reflected in the substantially greater land values derived from these sales than the Applicants' farms. As already stated, even if these sales can show IA for properties of this type that does not automatically apply to the subject land in Tyndale. The same observation can be made about Wileys Lane Newrybar, case study 15, about which Mr Watt was cross-examined.
I agree with the Applicants' criticism of 11 Ewingsdale Road Ewingsdale now operated as "The Farm", a large commercial tourist development. The purchase price reflected the desirable attributes of the site in terms of lengthy exposure to Ewingsdale Road but that does not cause me to alter my overall conclusion in this section.
No IA for rural land used as cane farm without improvements on it has been demonstrated by the Applicants. The RMS correctly submitted that IA can be limited to parts of residue land, see Constantino v Roads and Traffic Authority of New South Wales (2004) 135 LGERA 365; [2004] NSWLEC 517 at [107], confirmed on appeal in Roads and Traffic Authority of New South Wales v Mosca (2006) 146 LGERA 335; [2006] NSWCA 159. For an example of where IA was limited to curtilage and improvements only see W and H Carter v Roads and Traffic Authority of NSW (2006) 144 LGERA 375; [2006] NSWLEC 89 at [125]-[134].

[48]

Productivity data for Home Farm, Watts Farm and 100 Byrons Lane

By the time of the joint report the valuers had available to them the productivity data for Home Farm, Watts Farm and 100 Byrons Lane analysed by Mr McGuire agronomist (set out above in par 42-44). Home Farm is regarded as 100% productive for comparative purposes. Mr McGuire's analysis indicates that 100 Byrons Lane yielded 78% of the level of production of Home Farm between 2004 and 2015. Watts Farm yielded 94% for the same period. Mr McGuire's data for the flood free years 2004 to 2008 does not show a relevant difference so that I will not apply these.
Mr Watt did not agree that Mr McGuire's analysis provided a complete basis of comparison between the three farms. In his view Mr McGuire's approach focuses only on the total hectares harvested and tonnes of cane harvested per hectare and does not measure productivity with respect to the total area available for cane farming on each farm in a given year. Mr Watt therefore used the productivity data to produce his own analysis which was Annexure 2 to the valuers' joint report. According to this analysis, Home Farm averaged 64.72t/ha over each two-year harvest cycle between 2004 and 2015. Watts Farm was 45.18t/ha and 100 Byrons Lane was 44.85t/ha, which is slightly more than 30% lower productivity compared to Home Farm. The valuers agreed that Home Farm cane land was worth $15,000/ha. On this basis Mr Watt opines that 100 Byrons Lane (and Watts Farm) would have a value per hectare of $10,500, 30% less than Home Farm.
Mr Watt was of the opinion that the productivity rates shown in his analysis more accurately reflect the features of Home Farm, Watts Farm and 100 Byrons Lane. Watts Farm and 100 Byrons Lane are comparatively poorer draining and more exposed to flood events which accounts for increased variability in cane yield.
Mr Watt was challenged in cross-examination concerning his application of Mr McGuire's statistics of cane production: HEMMINGS: You know that Mr Maguire has expressed the view… under the heading Productivity: "Although all three farms grow mostly two year old cane, grouping harvest data into two year periods is arbitrary and not done by agricultural staff who regularly analyse productivity data for the sugar industry". WITNESS WATT: I understand-- HEMMINGS: "A more appropriate method is to average total tonnes produced per hectare harvested over the period in question" and then talk about the time period. You've taken a different approach to that which Mr Maguire has taken? You've taken the approach which he says is not one which is done by agricultural staff and which is arbitrary? WITNESS WATT: It's not arbitrary. In effect, all you would do if you were concerned about the fact that it reflects these two year cycles in these farms where half is - you know, it's half and half one year to the next year, is to return the average productivity per tonne that the farm generates in each two year period. If you are wanting to take what you've read from Mr Maguire's then you would simply double that and that would give you an annual but it's a false annual because you actually don't cut that annually over the entire farm because you don't cut the entire farm every year. So the idea of doing this average over the cycle is that it reflects the total cut you get over the two years which effectively is 100% of the farm over two years. But the result is the same if you looked at average tonnes per hectare, this is in annexure 2… the total average tonne per hectare in the middle column, if you average that for each of those three properties the difference would be the same.
The basis for Mr Watt not applying Mr McGuire's data was not compelling. The agronomist looked at 12 years of data available including flood events in that period and was well aware that the growth cycle of the cane is two yearly. Why a hypothetical purchaser would prefer Mr Watts' arbitrary analysis of two year periods rather than Mr McGuire's analysis over 12 years was not clearly articulated to the Court. It appeared unnecessary given that the prudent hypothetical parties I am considering can be assumed to have the data from the sugar mill as contained in Mr McGuire's evidence.
Mr Frogley did not agree with Mr Watt's interpretation of the production data. Mr Frogley has far greater experience in valuing rural properties especially cane farms compared to Mr Watt. Mr Watt said in cross-examination this was only the second time he had undertaken a valuation exercise for a cane farm after his first experience in 1998. I will be considering the agronomist's data as applied by Mr Frogley in considering 100 Byrons Lane and Watts Farm.

[49]

Sale of 100 Byrons Lane Tyndale

The sale of 100 Byrons Lane Tyndale was the only sale common to both valuers, Mr Frogley's Sale 9 and Mr Watt's Sale 11. It is the only recent sale of an area of cane farm land in the Clarence Valley region that the valuers are aware of. At issue for Mr Frogley is whether the sale shows IA to some or all of the property. Mr Watt relies on the sale as a comparable sale showing "after" values for cane land and low-lying timbered land.
The property consists of nine lots zoned RU1 - Primary Production and E3 - Environmental Management. The sale took place on 17 April 2015, a little over two months after the date of the acquisitions of the Applicants' land on 6 February 2015. No adjustment for time was needed. It is a cane farm in part which adjoins Home Farm to the west and Watts Farm to the north, although separated by Byrons Lane. It contains a dwelling house. Its use, improvements and location suggest it is comparable to Home Farm. The principal difference from Home Farm is that it has far less cane land, is lower-lying and less productive.
The land area of 100 Byrons Lane was 130.81 ha according to Mr Frogley and 128.8 ha according to Mr Watt. There is a three bedroom older style house on the land with a garage and storage. The land is flood liable and near level. Two areas totalling 28 ha are used for sugarcane production with the balance of 97.8 ha (or 102.87 ha according to Mr Watt) being low-lying wetlands and heavily timbered country. Mr Frogley considered that there was 5 ha of grazing land on 100 Byrons Lane that could at some cost be converted into productive cane land. The property fronts Byrons Lane, the new Pacific Highway and Shark Creek. Mr Watt described it as an irregular shaped constrained parcel with about 3 ha adjacent to the eastern boundary of the highway utilised for cane production with the balance uncleared swampy bushland. There is an old shed and a five-bay machinery shed. The sale included the value of the sugarcane crop at the time of sale. There was one year old standing cane estimated to be 1,500 tonnes at $22 per tonne (excluding harvesting costs) growing on the land which sold for $33,000.
The sale price was $530,000 including the standing cane. The valuers disagreed on the analysis of the sale in their separate reports and again in the valuers' joint report.

[63]

Finding on 100 Byrons Lane sale

Considerations for the hypothetical parties, apart from productivity, that could affect the sale price for 100 Byrons Lane include inferior prior management of the property, the relatively small area of cane land and the high proportion of inferior land type present. 100 Byrons Lane is lower-lying than Home Farm and is dominated by low-lying timbered land, occupying 97.8 ha (or 102.87 ha) according to the valuers. The sale was concluded with the purchasers' full knowledge of the new highway construction. It is therefore a sale which indicates "after" land value for the purposes of comparing it to the Applicants' farms.
The valuers approached the analysis of 100 Byrons Lane differently. Mr Watt analysed the actual sale in the usual manner. Mr Frogley analysed the actual sale and in his original report compared it to a sale premised on the assumption that the property is unaffected by highway noise as set out in par 164 above. He amended this analysis in the joint report as set out in par 165 above. The unaffected sale approach is hypothetical. As the area of land does not change in either scenario the only difference which Mr Frogley relies on to explain his different amounts in the hypothetical sale is his assumption of highway impact over the whole property. I have found elsewhere at par 148 that there is no demonstrated basis for making that assumption for rural land separate to land with improvements. The value of low-lying timbered land in the actual sale of $1,250 is unaltered in the hypothetical sale. This suggests there is no IA for low-lying timbered land in Tyndale. The cane land value in the amended unaffected sale in the joint report is based on the productivity data as analysed by Mr McGuire and is unrelated to IA.
I agree with the criticisms of the RMS that the approach appears to be reverse engineering to obtain a particular outcome. The amended unaffected sale provides no assistance in determining whether there is IA over the whole property as a result of the new highway.
The actual sale provides some indication of IA in relation to improvements. Mr Watt's report identified that he was informed by the purchasers and the selling agent that the purchasers were aware of the exposure of the dwelling to the proposed new highway and were considering creating a noise mound and barrier with vegetation to the north to shield the house from the predicted noise. This suggests that the price paid reflected an allowance for the need to shield the house from the highway. Mr Frogley stated in oral evidence that the purchasers told him that the sale was cheap because of the presence of the highway. Given the importance of IA to the Applicants' case it is preferable that such material be included in written evidence as Mr Watt has done.
The actual sale may theoretically provide some assistance in determining the value of low-lying land on Watts Farm given that this property adjoins it. The value of cane land and improvements can be deducted from the sale price and the value of the low-lying land which is a large percentage of the property deduced from the amount remaining.
Mr Frogley's rate of $12,000/ha in the hypothetical sale in the joint report reflects Mr McGuire's analysis of the productivity data which I have accepted, representing a 20% reduction of the Home Farm cane land value. On this basis the value of 28 ha of cane land on 100 Byrons Lane is $336,000.
Mr Frogley did not recalculate the actual sale applying $12,000/ha instead of $9,375/ha in the joint report. As to cleared grazing land, Mr Frogley's evidence is that there are 5 ha of 100 Byrons Lane that could at some cost be made suitable for cane farming. This he valued at $5,000/ha in the actual sale based on advice from Mr McGuire as to the likely cost required to convert the land to productive cane land. Mr Watt did not account for any cleared land in his analysis of 100 Byrons Lane.
The value of improvements is a question of valuation experience and judgment. Mr Frogley attributed $87,500 to improvements in the actual sale. Mr Watt attributed $100,000 in the actual sale. The Court visited the land on the view but there is no obvious basis on which to prefer the evidence of one valuer over the other. Given the evidence of the purchasers' advice to Mr Watt that they considered the impact of the highway on the house the lower figure identified by Mr Frogley should be applied.
The parties to the sale of 100 Byrons Lane took into account the standing sugar cane at the time of sale. It is preferable to exclude that transaction from the land value to obtain a clear price. It should be treated as a separate dealing so that the price of $33,000 is deducted from the sale price of $530,000, as Mr Frogley has done.
If the land values for 100 Byrons Lane of cane land of $336,000, cleared land of $25,000 and improvements of $87,500 are deducted from $497,000 the remainder is $48,500. If this is divided by 97.8 ha the land value rate for the low-lying timbered land is $495.90/ha. If no allocation for cleared land is made the rate is $752/ha. This demonstrates the essentially artificial analysis required when deriving different land values from a single sale figure. I will not be adopting such a low rate for low-lying timbered land on Watts Farm given other sales referred to by the valuers discussed in the context of that property show a higher rate. It underscores that such land has a lower rather than higher value. Mr Frogley allocated $1,250/ha in the actual sale and in the amended hypothetical sale to such land.
Sale 9 (117 Pacific Highway Gulmarrad) to the RMS referred to by Mr Watt must be treated with caution given it is a total sale to an acquiring authority. It is useful to note nevertheless that the sale shows a rate of $1,500/ha for a small area of low-lying timbered land in the general vicinity. The valuers' evidence suggests that large areas of low-lying timbered land attract a lower land value with a range of $1,000/ha to $1,250/ha identified for low-lying timbered land on 100 Byrons Lane.

[68]

Value of Home Farm in "after"

The Court is in a position as judicial valuer to make findings consistent with the evidence identified in order to calculate the "before and after" values in the conventional manner. Applying my reasoning above, relevant facts relating to the market value of the residue of Home Farm after acquisition in this case are as follows: 1. Home Farm contains 72.925 ha of highly productive cane fields in good condition. The cane farm agronomists confirm that Home Farm has these capacities. 2. It has a total area including creek and bushland of 74.24 ha after acquisition. 3. It has good accessibility to the new Pacific Highway and the Tyndale interchange with connection to the main dwelling by a road to be constructed by the RMS at no cost to the hypothetical vendor and purchaser. 4. The improvements on the land include two dwellings: the dwelling on Lot 1 which fronts the existing highway (to be converted to a local council road after completion of the new highway) which is habitable and the main dwelling. The latter will be affected by significant noise from the new highway. The RMS will at no cost to the purchaser carry out the acoustic treatments as identified in the planning approval for the new highway. 5. The vendor and purchaser will be aware from the project approval for the new highway that Home Farm after acquisition will not comply with the RNP in respect of the main dwelling without acoustic treatment designed to attenuate the road noise which many hypothetical willing but not anxious buyers in the market may find acceptable. 6. The clear evidence of Mr Moloney is that cane land in Tyndale transacts on the basis of its productivity. Mr Frogley's north coast sales do not provide a basis to decrease the value of the land devoted exclusively to cane growing or the creek or bushland by reason of the carrying out of the public purpose. 7. On this basis a hypothetical sale in the "after" scenario would be viewed in the market as a cane farm with two habitable dwellings, good highway access and the main dwelling having less than ideal amenity. The prudent purchaser would in my opinion decrease his or her offer to account for these amenity factors. 8. The main dwelling and dwelling on Lot 1 are sensitive to the change in amenity caused by the carrying out of the public purpose. I consider that the value of the land including the two dwellings should reflect the change of amenity after acquisition. The curtilage of the main dwelling would be considered to be adversely impacted. This was described and quantified in the oral evidence of Mr Watt. In the absence of any other evidence I will accept his estimate of 4,500 m². 9. There is, on the evidence, at least one location at which a replacement dwelling could be established in the future of a size and amenity that could be superior to the main dwelling. There is no evidence before the Court such as a town planning report which identifies the likelihood of gaining development consent under the LEP. While the Court was asked to draw its own conclusion about the effect of the LEP the Applicants' submissions are insufficient to enable the Court to form a final conclusion on this topic given the presence of two dwellings on different lots and the likelihood of obtaining development consent under cl 4.2B of the LEP (see below par 258 and following). The prudent purchaser in the "after" scenario would not assume that development consent would be granted automatically. 10. The hypothetical purchaser in the sale of the "after" land would not sacrifice the main dwelling and erect a like-for-like replacement dwelling costing $848,344 or even a similar project home costing $711,738 (the RMS' alternative claim, see par 249 below). This would be out of proportion compared to the price of the farm when the existing main dwelling appears to be in good order, is habitable and is to receive acoustic treatments at no cost to the purchaser, which will produce a satisfactory internal amenity without causing sleep disturbance of the occupants. 11. Like the purchasers of 100 Byrons Lane they would offer a price which would cover the potential provision of suitable screening vegetation, perhaps including fencing. 12. The hypothetical purchaser would reduce the value of the main dwelling by 50% to allow for future expenses to deal with any residual acoustic and amenity issues including for the external curtilage. 13. The prudent hypothetical vendor would regard this allowance as reasonable but would not do so in response to an offer to reduce the price of the Home Farm residue land by $848,344 for the cost of erecting a replacement dwelling, thereby writing off the existing main dwelling at effectively nil or nominal value.
In view of my findings above, and accepting those matters upon which the parties are now agreed, in my opinion the fair price which the hypothetical parties would agree would be calculated as follows: Home Farm "Before" (agreed) Land (total area: 83.67 ha) 81.57 ha (cane) @ $15,000/ha 1.2 ha (creek) @ $5,000/ha $1,223,550 0.9 ha (bushland) @ $8,000/ha $6,000 Improvements $70,000 $7,200 Dwelling on Lot 1 $16,000 $1,236,750 Older ancillary $242,500 $443,500 Main dwelling $115,000 Rural sheds TOTAL "before" value $1,680,250

[78]

Cane land

Mr Frogley applied the land value rate of $15,000/ha to the areas of Watts Farm suitable for cane farming, the same as the agreed value of cane land on Home Farm. He had regard to sugarcane expert Mr McGuire's evidence which showed that between 2004 and 2015 the production of Watts Farm was 94% that of Home Farm. This figure dropped to 89% during the period from 2004 to 2008 which excluded the years affected by floods. While the data showed Watts Farm was less productive than Home Farm, Mr Frogley was advised by a family representative of the Applicant that following each harvest up to 10% of sugarcane crop on Watts Farm is used on other farms that the family manages or shares. Accordingly, this cane is not accounted for in the productivity figures. Mr Frogley was therefore not convinced that there was sufficient justification based on the productivity figures to reduce the cane land value rate for Watts Farm.
Mr Watt originally adopted a land value rate of $11,500/ha, the same rate as he adopted for 100 Byrons Lane which he said had similar drainage issues and soil quality profiles to Watts Farm and is significantly inferior to the cane land on Home Farm. The cane was described as having "wet feet" due to the proximity of the watertable being at or very close to the surface and the soil also showed signs of exposure to acidification. The whole of Watts Farm is subject to the Clarence Valley Council's Flood Plain policy as indicated in Flood Planning Map 11G of the Clarence Valley LEP. Mr Watt reviewed the flooding information for Watts Farm and reported that most of the land and surrounding areas are "effectively at 0 m AHD" or below. Mr Watt also noted in his original report that Acid Sulfate Soils Map 11 of the LEP indicates that the majority of Watts Farm is comprised of "Class 2" soils (below the natural ground surface).
Mr Watt adjusted down the cane land value rate from $11,500/ha to $10,500/ha having regard to the productivity data for the farms and his own interpretation of the data of sugarcane expert Mr McGuire which was annexed to the joint report. On Mr Watt's analysis Watts Farm was 30% less productive than Home Farm and the appropriate rate for Watts Farm is therefore $10,500/ha.

[79]

Low-lying timbered land

Mr Frogley relied on two sales in his original report to derive the value of low-lying timbered country on Watts Farm of $3,500/ha. Sale 17 - 1050 Shark Creek Road Shark Creek - is almost identical in size (40.47 ha) to Watts Farm. It is a large rural allotment being almost all timbered country with some structural improvements and is in a more remote location compared to Watts Farm. The sale transacted in November 2013 for $194,000. It is not flood prone. Mr Frogley calculated the indicative land value (excluding structural improvements) at $4,349/ha. He considered the land value rate to be lower at Watts Farm.
Sale 18 - Lot 95 Upper Shark Creek Road Shark Creek - also has a land area of 40.47 ha. It is a large rural lifestyle allotment with a small cabin and is predominantly timbered country. Between two-thirds and three-quarters of the land is considered flood prone. The sale transacted in August 2012 for $142,000. Mr Frogley calculated the indicative land value (excluding structural improvements) at $3,212/ha. Sale 18 is in a more remote location compared to Watts Farm. In Mr Frogley's opinion the timbered land on Watts Farm has a higher land value rate. He did not give further reasons for this conclusion.
Mr Watt considered these sales to be superior in all respects compared to the low-lying land at Watts Farm. He preferred a land value rate for the low-lying timbered land of $2,000/ha based on his analysis of two sales. Sale 9 - 117 Pacific Highway Gulmarrad - was an RMS sale with 8 ha of timbered swampy land which transacted at an agreed rate of $1,500/ha. 100 Byrons Lane contained low-lying swampy land comparable to and situated in close proximity on the same floodplain as Watts Farm. Mr Watt analysed the land value of the swampy land at 100 Byrons Lane as $1,000/ha.
In the valuers' joint report Mr Watt introduced Lot 85 DP751389 Upper Shark Creek Road Shark Creek which he said was more comparable than the sales relied upon by Mr Frogley but still superior to Watts Farm for a number of reasons. This property comprises 31.7 ha of entirely flood affected land, a large area of which is cleared with direct water frontage to the creek. It is unlikely to have a dwelling entitlement. The land transacted in July 2013 for $80,000 showing an assessed land value rate of $2,522/ha. Mr Frogley criticised this sale for lacking a dwelling entitlement which he said was a distinguishing feature that made the land less valuable than Watts Farm.
Mr Frogley introduced during joint conferencing the sale of 329 Shark Creek Road Shark Creek. This property consists of 82 ha of mostly flood prone land with significant improvements on the elevated portion of the land. The sale transacted in September 2012 for $585,000. Mr Frogley assessed the value of the flood free land including improvements at $450,000 leaving the value rate of the low-lying flood prone land at $1,700/ha. Mr Watt disagreed with this analysis, stating that the elevated land had a value of approximately $500,000 to $520,000 which left the low-lying land with a nominal value of $1,000/ha.

[95]

Applicants' submissions

Home Farm is an active cane farm and home for the Applicants. As I understand the Applicants' case, the use of the residue land was directly connected to the use of the acquired land as a cane farm by virtue of the use of the home on the residue land by the Applicants as farmers of the acquired land. The Applicants' intention to move to a replacement dwelling on Home Farm is a direct and natural consequence of the acquisition relating to the actual use of the acquired land as a buffer against noise from the existing highway.
The acoustic experts generally agree about the acoustic impact of the new highway on the main dwelling. The RNP "New Road" criteria for external road traffic noise are exceeded during both daytime (55 dB(A) LAeq, 15h) and night-time (50 dB(A) LAeq, 9h). As a rule of thumb an open window will provide a 10 dB(A) reduction in noise inside a room. The failure to comply with the RNP criteria necessitates treatment of windows and doors of the main dwelling which must be shut, requiring the installation of air conditioning. The change in the acoustic environment is considerable as a result of the new highway. The subjective controls in the RNP reflect studies finding that at 55 dB(A) 10% of the population become highly annoyed by a noise source at that level. The experts agree that no reasonable or feasible measures can be taken such as road surface treatment that can remedy the outdoor acoustic environment.
The location of a proposed replacement dwelling is an acoustically superior environment and will provide far greater amenity in terms of pleasant rural outlook and privacy than the main dwelling when the new highway commences operation. It will need some treatment to enable the RNP criteria to be met. A table attached to the Applicants' closing submissions identified according to the Applicants' counsel which façades of the replacement dwelling would or would not meet the RNP criteria once the new highway commenced operating. The Applicants submitted that the experts agree that it is also necessary to consider the noise attenuation effect of grazing at the replacement dwelling. The noise impacts of the new highway will be greatly reduced at the new location.

[97]

Development consent for replacement dwelling

If successful in these proceedings the Applicants submit that they intend to demolish or decommission the main dwelling and construct a replacement dwelling. No town planning evidence has been provided by the Applicants to confirm that such a development is permissible under the Clarence Valley LEP and likely to obtain development consent. Another dwelling is located on Home Farm next to the existing Pacific Highway on Lot 1.
In closing submissions the Court was referred by the Applicants' counsel to parts of the LEP. It provides: 4.2B Erection of dwelling houses and dual occupancies on land in certain rural, residential and environmental protection zones … (2) This clause applies to land in the following zones: (a) Zone RU1 Primary Production, … (3) Development consent must not be granted for the erection of a dwelling house or dual occupancy on land to which this clause applies, and on which no dwelling house or dual occupancy has been erected, unless the land is: (a) a lot that is at least the minimum lot size specified for that land by the Lot Size Map, or (b) a lot created before this Plan commenced and on which the erection of a dwelling house or dual occupancy was permissible immediately before that commencement, or (c) a lot resulting from a subdivision for which development consent (or equivalent) was granted before this Plan commenced and on which the erection of a dwelling house or dual occupancy would have been permissible if the plan of subdivision had been registered before that commencement, or (d) an existing holding. … (5) Despite subclause (3), development consent may be granted for the erection of a dwelling house or dual occupancy on land to which this clause applies if: (a) there is a lawfully erected dwelling house or dual occupancy on the land and the dwelling house or dual occupancy to be erected is intended only to replace the existing dwelling house or dual occupancy, or (b) the land would have been a lot or a holding referred to in subclause (3) had it not been affected by: (i) a minor realignment of its boundaries that did not create an additional lot, or (ii) a subdivision creating or widening a public road or public reserve or for another public purpose.
Clause 4.2B(3)(a) of the LEP states that development consent can be granted if a dwelling is proposed on a lot that meets the required minimum lot size. This clause must be read with cl 4.2B(5)(a) which permits the granting of development consent if the proposed dwelling is intended to replace a lawfully erected existing dwelling on the same land. It was not suggested by the parties that either or both of the dwellings on Home Farm are unlawful.
The Applicants submitted that a dispossessed owner need not take any steps unless, or until, they know they are going to receive compensation. Accordingly, the Applicants have not filed a development application for their proposed replacement dwelling. Neither party thought it necessary to obtain the evidence of a town planner. The Applicants requested that the Court proceed on the assumption that consent would be granted for a replacement dwelling.
The RMS claimed that it was incumbent on the Applicants to show that they are able to build a replacement dwelling in the proposed location, such as through a planning report or development application. It was unclear if the main dwelling would be demolished or decommissioned and therefore the Court could not be satisfied that the replacement dwelling would be permitted under the LEP.
As recorded above in par 199(ix) a consideration for a prudent hypothetical purchaser, the Applicants' submissions are insufficient to enable the Court to form a final conclusion on whether development consent would be forthcoming in the Applicants' circumstances of two existing dwellings on different lots of Home Farm. It is unfortunate that evidence such as a town planning report was not provided by the Applicants given the significance of this part of their claim. I consider it is likely that development consent can be obtained but not a certainty.

[99]

"Double dipping"?

The question arises of whether the disbursement claim under s 59(1)(f) for a replacement dwelling on the residue land is "double dipping". The disbursement claim in Peak was under s 59(f) or in the alternative s 59(c). In Peak Beazley and Tobias JJA held that the "before and after" method was appropriate but noted at [10] that the particular methodology used by the expert valuers did not incorporate any injurious affection into the "after" valuation of the property. The valuers valued the land component and separately valued the improvements on the "before" basis and the residue on the "after" basis, at [11]. Had the conventional "before and after" valuation method been applied then the "after" value on the primary judge's findings would have needed to reflect the necessity to relocate the residence rendered uninhabitable in order to obtain a more acceptable separation distance from the highway boundary, at [83]. That is, a prudent hypothetical purchaser would have discounted the price for the land due to the impact of the new highway on the residence rendering it uninhabitable and necessitating construction of a new dwelling removed from the highway, at [84].
The following paragraphs from the reasoning of Beazley and Tobias JJA are particularly relevant: [75] … her Honour assumed that the "before" and "after" values had encapsulated any injurious affection so that the claimed items had been included in the "after" value. Accordingly, to allow them under s 59(f) would involve "double dipping". Her Honour's assumption was based upon the comment of Tobias JA in RTA v Muir Properties quoted above. However, although the valuations undertaken by the valuers in this case were on a "before" and "after" basis, that methodology was applied to determine the market value of the acquired land under s 55(a) only. The valuations also adopted a summation approach in respect of the market value of the improvements including the residence. In such a case, it cannot be assumed that the items now claimed were captured in the market valuation of the realty. Indeed, it is difficult to see that they could have been, having regard to the separate basis of valuation adopted with respect to the market value of the residence. This is particularly so in relation to certain of the items, in particular the costs of the bridge, the costs of complying with the development application for the new dwelling and the relocation of fences. … [83] Had the valuers approached the "before" and "after" valuation in the more conventional way, then the "after" value, on her Honour's findings, would have needed to reflect the necessity to relocate the residence 300 metres from the new highway as the appellant required. The costs of that relocation (now claimed under the heading of disturbance) would have resulted in a lower value of the residue land in the "after" situation. [84] In other words, due to the injurious affection of the residue land by reason of the carrying out or the proposal to carry out the public purpose for which the acquired land was acquired, a hypothetical purchaser of the residue land would have discounted the price he or she would pay for that land due to the impact of the new highway on the residence rendering it uninhabitable and thus necessitating the construction of a new dwelling 300 metres removed from the highway boundary. That discount would directly reflect the extra costs involved in providing the very same services and facilities which the respondents now claim under s 59(f). … [86] It is equally wrong for the appellant to submit that to now allow the same costs as disturbance under s 59(f) as might have been taken into account under s 55(f), will result in an increase in the value of the residue land which will involve double-dipping or double-counting. This is not so. There would only be double dipping if injurious affection resulted in the "after" value of the residue land being reduced so that the differential between the "before" value of the whole property and the "after" value of the residue land increased and then disturbance in respect of the same costs as were reflected in the injurious affection of the residue land were awarded in addition. [87] It thus follows that the trial judge erred when at [89] she accepted the appellant's submission that it would be a case of "double dipping" to allow as disturbance the cost of improvements to the residue land caused by the necessity to relocate the residence which had been rendered uninhabitable because those costs had been reflected in the loss of value of the residue land which had been incorporated into the assessment of the value of the improvements (presumably the residence) under s 55. No such loss of value of the residue land had been so incorporated. This error was more than an error of fact: it was an error of valuation principle. … [101] Section 54 provides that the amount of compensation to which a person is entitled is that amount, having regard to all relevant matters under Pt 3 of the Just Terms Act that will justly compensate the person for the acquisition of the land. If a person is required to relocate because of the injurious affection caused by the acquisition and, in doing so, incurs costs that are not otherwise reflected in the "before" and "after" valuation, then that claim can be made under s 59(c). It does not matter in that instance that the relocation is from one part of the residue land to another. Provided the connection with the acquired land is sufficiently established, then such costs would be claimable.
In Peak the land values in the "before" and "after" were unaltered by the valuers so that no loss of value in the residue land was captured. In relation to the improvements, a different value for the house was identified in the "before and after" approach. Beazley and Tobias JJA expressly identified that a conventional "before and after" approach could have reflected the necessity in that case to relocate the residence on the residue land 300 m so that the hypothetical purchasers would have discounted the price paid for the residue land to reflect that, at [83]-[84]. They identified that necessary relocation costs (which did not include the cost of building the house) were claimed as disturbance. Beazley and Tobias JJA held the primary judge erred in finding there was "double dipping" to allow as disturbance under s 59(f) the cost of improvements to the residue land caused by the necessity to relocate the residence on the basis that it had been incorporated into the assessment of the value of the improvements under s 55. No loss of value of the residue land had been incorporated and no IA of the kind indicated had been taken into account by the valuers.
The main dwelling on the Applicants' residue land was valued as an improvement in the assessment of market value. Loss of value as a result of the public purpose in the "after" scenario was compensated for in the "before and after" method on the basis of assumptions attributed to the hypothetical vendor and purchaser as set out above in pars 76-84 above. In Peak the impact of the public purpose rendered the dwelling on the residue land uninhabitable. The assumption of the hypothetical parties in this case is that the dwelling is not uninhabitable but there will be substantial impact on amenity.
Because no claim was made in Peak for the cost of building a replacement house this substantial part of the Applicants' claim in this case did not arise for consideration. The findings of the Court of Appeal in Peak at [83]-[84] and [101] emphasise that the application of the "before and after" method must be scrutinised to determine what matters were incorporated by the valuers. In McDonald referred to above at par 88 the landowner's house was acquired under a partial acquisition of land. The disturbance claim included virtually all the costs of relocating to a new house on the residue land including the costs of a development application, new road and connection of services but not the costs of building a new house. Biscoe J at first instance awarded these items as disturbance under s 59(c) or s 59(f) or both, at [119]. The applicant was left with residue land to which she was to move which was not habitable without incurring costs for the provision of services. Biscoe J held at [159] the disturbance claim was not "double dipping". He identified that there would be "double dipping" if compensation for s 55(f) loss of value of residue land resulted in the "after" value of the residue land being reduced so that the difference between the "before" value of the parent land and the "after" value of the residue land increased and the disturbance in respect of the same costs were reflected in the loss of value in the residue land for which compensation was awarded, citing Peak at [86]. This approach was confirmed on appeal.
Arguably the Applicants' claim for the cost of building a replacement dwelling as a disbursement under s 59(1)(f) overlaps with the loss in value of the main dwelling already accounted for in the "before and after" approach. To claim the costs of building a replacement dwelling on the residue land could be regarded as "double dipping". "Double dipping" is implicitly excluded by the just compensation override in s 54 and the requirement of s 55 that an amount of compensation must be determined only in relation to heads of compensation prescribed in s 55, per Tobias JA in McDonald at [60].
In Tolson, relied on particularly by the Applicants, the issues on appeal included whether compensation is payable in circumstances where the public purpose of the acquisition resulted in increased value to the residue land which exceeded the acquired land's value. The Court of Appeal considered the relationship between ss 54 and 55 of the Just Terms Act and emphasised that compensation is payable only for those matters specified in s 55 subject to the requirement that compensation must be "assessed in accordance with the Division", including s 54(1) which requires the payment of just compensation "having regard to all matters relevant under this Part", per Basten JA at [37]. Those matters in s 55 concerning the value of land may be offset as against each other. The Court of Appeal held that disturbance costs were separate and distinct from the value of the acquired or retained land, see Beazley JA at [8]-[9] agreeing with Basten JA at [83]. These are not to be offset as against compensation paid for land value under other subsections of s 55, per Basten JA at [83].
The Applicants relied on Tolson to submit that if a disbursement claim comes within s 59(1)(f) it cannot be offset as against the s 55 heads of compensation concerning land value. While that ratio in Tolson can be accepted, each case must be determined on its own facts informed by the valuation method adopted and whether that gives rise to "double dipping". The facts in Tolson were quite different to this case. The application of the "before and after" method in this case takes into account the loss of value of the main dwelling. The cost of building a replacement dwelling cannot be separately claimed as a disbursement by the Applicants as that has already been taken into account in the "before and after" method. What remains for determination is whether the cost of a new road, services and other incidentals of building and relocating to a replacement dwelling (items (i)-(ix) par 247 above) can be claimed as disbursements, as occurred in Peak and McDonald. Such costs were not taken into account in the "before and after" analysis undertaken earlier in the judgment.
In Peak both the hypothetical parties and the landowner of the residue land would have proceeded or been assumed to proceed on the basis that the dwelling on the acquired land was uninhabitable. Similarly in McDonald the hypothetical parties and the landowner of the residue land would both assume a new house on the residue land was necessary to replace the house acquired. I held above in par 82 that the hypothetical parties would assume the main dwelling was habitable meaning compliance with the indoor RNP criteria could be achieved, albeit with reduced amenity and privacy given the close proximity of the new highway. The thrust of the Applicants' case is that their personal circumstances inform the award of disbursements under s 59(1)(f). These differ from the assumptions attributed to the hypothetical parties.
Whether the elements of s 59(1)(f) are satisfied in light of the Applicants' case necessarily modified by my finding in par 272 must be considered in relation to the remaining items claimed. As my finding that the building cost of $753,447 is not claimable I am now considering only a portion of the costs of relocation. This precise scenario was not addressed by the Applicants' evidence, a matter I will return to.

[100]

Relating to the actual use of acquired land as required by s 59(1)(f)

Section 59(1)(f) refers to actual use of the acquired land, as identified in Peak at [74]. The RMS accepted that there could be more than one use of the acquired land as the singular "use" included the plural, s 8(b) of the Interpretation Act 1987. The word "use" is protean, taking its meaning from its context. "Actual" use means more than a theoretical or potential use. "Relating to" has a wide import, George D Angus Pty Ltd v Health Administration Corporation (2013) 205 LGERA 357; [2013] NSWLEC 212 at [106] citing Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259 at [38].
The Court of Appeal in Peak accepted at [71] the reasoning in McBaron v Roads & Traffic Authority of New South Wales (1995) 87 LGERA 238 that if the actual use of residue land is so intimately connected with the actual use of the acquired land such that the use of the acquired land is dependent on the use of the residue that is sufficient to come within s 59(f). In McBaron the cost of moving a dairy on the residue land as a result of the loss of the acquired land was awarded because the claimant's dairy operations on the residue land were affected.
The Applicants rely on Peak in the Court of Appeal at [92]-[94] where a ground in the cross-appeal of "Failure to have regard to use of acquired land as a buffer" was upheld. The trial judge was found to have erred in failing to determine that one of the uses of the acquired land was the protection from and amelioration of noise impacts from the old highway upon the dwelling on the residue land. In other words the acquired land acted as a noise buffer between the old highway which was being expanded as part of the public purpose and the dwelling. Failure to consider that the relocation costs (not the building costs) for a new home claimed under s 59(f) related to the actual use of the acquired land as a buffer was held to be a legal error.
The Applicants rely on the acquired land's use as a buffer for the main dwelling from noise from the existing highway. It is frankly difficult to comprehend that submission given the facts of this case which are not like Peak. As a matter of fact the new highway will interrupt the landscape between the main dwelling and the existing highway. The source of the noise from which the Applicants seek to move the main dwelling on the residue land is the public purpose, the new highway. That incidentally the land occupied by the new highway was part of the land between the main dwelling and the existing highway can be noted. A new circumstance has arisen as a result of the public purpose which renders irrelevant the circumstance that the acquired land was part of the land between the main dwelling and the existing highway. That basis for the Applicants' claim of use of the acquired land under s 59(1)(f) is not available.
Another use relied on is the fact that the main dwelling on the residue land is occupied as a home as part of running the cane farm which includes the acquired land. In Johnston v The Roads and Traffic Authority [2000] NSWLEC 111 the judge at first instance awarded the relocation costs of moving a timber dwelling on residue land from one location to another under s 59(f). The movement of the dwelling was found to be necessary due to road noise from the public purpose. The existing main dwelling on the residue land was let out to tenants. There was no evidence of any significant agricultural or grazing activity conducted on the acquired land or the residue land as in this case. The Court of Appeal in Peak at [70]-[71] rejected the trial judge's decision in Johnston as the use related solely to the use of the residue land for residential purposes and not the use of the acquired land as s 59(f) requires. There was no interdependence or nexus between the actual use of the acquired land (vacant land, garden, small investment cottage and workshop) and the use of the residue for the purposes of s 59(f). The trial judge's reasoning was held to be contrary to the reasoning in MIR Bros and Blacktown Council v Fitzpatrick Investments.
The reasoning in Peak at [70]-[71] rejecting the reasoning in Johnston, and at [90] recognising the use of the residence was an intimate part of the use of the acquired land and the residue land for a cattle breeding business, supports a finding that the use of the Applicants' main dwelling on the residue land was an intimate part of the use of the acquired land for cane farming. That use can be accepted for the purposes of s 59(1)(f).

[101]

Might reasonably be incurred as direct and natural consequence of acquisition

The circumstances of this case next require consideration of whether the Applicants' claim for relocation costs of establishing a replacement dwelling arises as a direct and natural consequence of the acquisition together with whether such costs are likely to be reasonably incurred. The taking of the acquired land must directly and naturally cause the Applicants to be likely to build a replacement dwelling. The Applicants will be able to continue living in the main dwelling after the new highway commences operation.
The Applicants' submissions did not address the term "direct and natural consequence". I infer that the evidence of Mr Moloney to the effect that as a result of future impacts of the new highway the Applicants intend to move their house location is intended to satisfy the term. The fact that the Applicants previously moved from the dwelling on Lot 1 to their current location to escape the impacts of the existing highway enhances the reasonableness of their intention to move away from the new highway.
The term "direct and natural consequence" has been considered in several cases and it is useful to identify these. In N Stephenson Pty Ltd v Roads Traffic Authority (1994) 83 LGERA 248 at 260 Talbot J held: The use of the expression "a direct and natural consequence" suggests a temporal as well as a causal link to the acquisition. "Consequence", when used in the ordinary sense, is generally to be regarded as a result of something that has already occurred.
In Caruana v Port Macquarie-Hastings Council (2007) 210 LGERA 1; [2007] NSWLEC 109 at [52] Biscoe J held: The words "direct and natural" in s 59(f) is the language of causation designed to limit compensation by reference to causal considerations: March v Stramare (1991) 171 CLR 506 at 509-510 per Mason ACJ In Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 185 ALR 280 at [79] Gleeson CJ said that "It may be, as was said in a New Zealand case, that 'consequences that are direct and natural are generally foreseeable'". In Lasermax Engineering Pty Ltd v QBE Insurance (Aust) Ltd [2005] NSWCA 66 the NSW Court of Appeal held that the expression "directly caused" in an insurance policy was to be equated with "proximate cause". It was also held that the primary judge fell into error in relying upon the dictionary definition of "directly" at the expense of looking at words in context. It was said that the court applies common sense standards in determining what is proximate cause, and that causation is to be understood as the man in the street, not a scientist or a metaphysician, would understand it.
In George D Angus at [108] Preston CJ held: The adjectival words "direct" and "natural" are designed to limit compensation for disturbance under s 59(f) by reference to the nature or degree of the required causal relationship.
Whether "reasonably incurred" in this subsection suggests an objective or subjective test does not appear to have been considered definitively in any cases, possibly with good reason. The Applicants submitted that a large number of cases referred to in its closing submissions at [84] did not rule out that reasonableness suggested a subjective approach. Nor do these cases make a positive finding to that effect. The Applicants rely on a subjective test in that they submit their opinion that it is reasonable to move is the relevant test, not the views of the RMS based on the application of the RNP as to what is reasonable.
Principles of statutory construction require the ordinary meaning of a word to be considered in its context and mindful of the statutory purpose of the word or phrase being considered. Use of the term "reasonably incurred" in s 59(1)(f) requires consideration of whether an applicant's actions are reasonable, mindful of the facts and circumstances of that particular applicant. Describing the approach as objective or subjective is not particularly helpful in this statutory context.
The Applicants relied on George D Angus emphasising that the successful disturbance claim in that matter reflected the particular subjective circumstances of Dr Angus and how he ran his medical practice. There was no dispute by the acquiring authority that Dr Angus had to relocate. In dispute was the financial impact of relocating his medical practice and the extent to which the costs/losses incurred were claimable under s 59(f). In George D Angus much of the costs claimed had been incurred. Not all were considered sufficiently temporal to be a "direct and natural consequence" of the acquisition. Dr Angus' particular circumstances were considered in allowing much of his claim. This approach was not overturned on appeal.
The RMS submitted that in Peak the Court of Appeal identified at [74] that a claim is not determined by the wishes of the claimant. The context for that finding is that the trial judge asked the wrong question, not whether the respondents in that case had reasonably incurred any other financial costs or might reasonably incur other financial costs relating to the natural use of the acquired land as a direct and natural consequence of the acquisition. The finding does not preclude the Applicants' claim.

[102]

Applicants' circumstances

Turning to the Applicants' circumstances, and noise in particular, before construction of the new highway commenced the Applicants lived in a quiet rural environment with the existing highway some 950 m away. Mr Moloney's affidavit evidence stated that he and his family moved from the dwelling on Lot 1 in part to avoid the noise of the existing Pacific Highway and he confirmed this in cross-examination, as summarised in par 33 above.
The acoustic experts agreed that the Applicants' home environment was not dominated by road noise before commencement of construction of the new highway and did not reach any threshold level for noise assessment under the RNP. In cross-examination Mr Evans referred to a measurement taken early one morning which suggested that road noise from the existing highway was dominant but he agreed this noise source was distant and had the quality of background noise without noise peaks which are far more intrusive. He agreed the existing noise levels were low (pars 62-63 above).
Once the new highway commences operation the Applicants will live in very close proximity to it, experience substantially more road noise and have cars and their occupants much closer to their house. According to Mr Moloney's affidavit summarised above in par 23, he fears his and his family's lifestyle will be greatly affected as a result of the new highway.
The experts agree the RNP internal criteria are not met and the Applicants will have to close windows and doors to achieve appropriate noise levels both day and night and consequently use air conditioning. The Applicants presently have a small air conditioner for one part of the main dwelling. The acoustic experts addressed road noise impacts on the existing main dwelling assuming that acoustic treatments are applied to it. The experts agreed that acoustic treatments can be applied to the main dwelling to provide internal noise levels that are consistent with the recommendations from the Australian Standard AS 2107:2000 and the Infrastructure SEPP and maximum noise levels relating to sleep disturbance. These agreed treatments were set out in the second joint acoustic report summarised above at pars 54-56.
The assumptions embedded in the RNP were explored in cross-examination of Mr Evans as summarised in par 64 above. The studies on which the RNP is based were conducted on populations exposed to road traffic noise for some time. Mr Evans accepted that people exposed to no noise found road noise highly annoying at levels lower than the criteria. The variables which can affect noise modelling such as road surface, which is not known, car speed (cars are assumed to meet the speed limit) and weather conditions and the assumptions about these necessarily made were explored in cross-examination of Mr Evans summarised in par 65. As Mr Koikas' evidence identified individual responses to noise may differ from the predicted reaction to levels in the RNP. People exposed to less noise are likely to be more irritated by elevated road noise levels. Mr Koikas considered that sleep disturbance at the main dwelling was a particular issue but it appears that can be dealt with through acoustic treatment.
As to outdoor noise levels at the main dwelling, Mr Evans' opinion was that noise levels would be consistent with the RNP for passive recreation areas of 55 dB(A) LAeq, 15h and that this was a suitable benchmark (par 56). Mr Koikas did not consider the acoustic environment in the external areas around the house would be acceptable because of the dynamic contrasting levels of traffic noise due to the close proximity of the new highway.
Mr Evans considered that there is no objective basis to justify building another dwelling. Mr Evans' opinion does not take into consideration the personal concerns of the Applicants related to necessary changes in lifestyle necessitated by the treatment of windows and doors and installation of air conditioning throughout the house. I accept that the noise attenuation measures will necessitate a substantial change in lifestyle in relation to the internal use of the main dwelling and affect the combined use of the internal and external areas by the Applicants and their family.
The RMS considered that the RNP is a reasonable objective instrument against which to measure the Applicants' claim. The RNP criteria are based on worldwide research and are applied widely in Australia and overseas. A dwelling rendered conformable with the internal noise criteria is reasonably occupied according to the RMS. The RMS approach is in part to facilitate the important planning matter of where to locate a major highway. As the Applicant submitted the conditions of the project approval state in B28 that the project is to be designed and operated with the objective of not exceeding the road noise criteria in the RNP. The criteria are necessarily general to enable application in a wide range of contexts. They are used as an important guide, as is clear in the EIS and conditions for the new highway. They are not applied as standards which must be met, rather they are an objective to be achieved if possible. In the Applicants' case the internal RNP criteria are exceeded and can only be met by acoustic treatment of the main dwelling. Failure to comply with the RNP does not result in the refusal of an application for approval of a highway as Mr Evans stated in his oral evidence. The RNP is not the sole measure by which to test acceptability of the acoustic environment to an individual as Mr Koikas' evidence highlights.
The RMS did not engage directly with the Applicants' case that their amenity and privacy in a rural environment will be badly affected by the new highway operating very close to their home. The purpose of the numerous case studies identified in Mr Green's evidence summarised in pars 38-39 above is to show that a large number of dwellings are located near the upgraded highway in rural areas. That is undoubtedly the case as the drive along the new highway on the Court view demonstrated, as would any similar drive through similarly developed areas of NSW and beyond. The Court was directed to case studies 8 and 17 where landowners had moved their houses so that they are removed from highway noise. As the Applicants submitted, in the absence of details about each particular case it is difficult to draw conclusions about individual properties. I note that the purchasers of 100 Byrons Lane told Mr Watt they were intending to relocate their house away from the new highway. It is obvious but relevant to state that a large number of houses are located away from large multi-lane highways in rural environments.
The Respondent also emphasised the continued use of the dwelling on Lot 1 12 m from the busy existing highway since 1971, as confirmed by Mr Moloney in cross-examination (par 27). Mr Moloney was cross-examined about living next to the existing highway without noise attenuation measures or a fence (par 25). The existing highway became much busier over time (par 28). As the RMS submitted, a large number of people live next to highways. It is reasonable to conclude that some landowners are able to live satisfactorily next to highway upgrades. Both parties can draw on examples which support their respective positions. The RMS submissions and evidence do not mean that the Applicants' claim is unreasonable. Common sense suggests that the majority of people if given a choice will choose to live much further away than 145 m from a busy multi-lane highway in the location of the Applicants' main dwelling.
There will be a substantial change in the visual amenity of the Applicants as their previous rural view over cane fields with the existing highway in the distance will be adversely affected by the new highway including the southern off-ramp in the immediate foreground. This was Mr Moloney's view in cross-examination as summarised above in par 32. The main dwelling will be 145 m from the edge of the main carriageway and 115 m from the off-ramp. According to the Applicants as the highway will be elevated some 6.3 m above the existing ground level it will be obvious from the main dwelling. Privacy will be lost in the front yard until an appropriate vegetative screen can grow, which will take a considerable time. No effective noise barrier can be constructed between the main dwelling and the new highway. Mr Moloney stated in cross-examination that he intended to plant a screen if he remained in the main dwelling (par 33). I accept there will be substantial negative impacts on the Applicants' amenity and privacy from the new highway.
The Applicants' disbursement claim for costs of a replacement dwelling on the residue land is inevitably based on subjective matters because it relies on noise impacts and amenity issues such as loss of privacy and necessary changes in lifestyle according to the Applicants. As already identified above in par 273 the Applicants' position differs from the hypothetical parties in the "before and after" valuation exercise undertaken earlier in this judgment to determine market value and any loss in value of the residue land inter alia.
In Brock v Roads and Maritime Services [2012] NSWCA 404 the Court of Appeal had to decide whether several disturbance claims were payable under s 59(f) of the Just Terms Act where partial acquisition of the appellant's land resulted in the severing of direct access of stock to a river. Market value was calculated using the "before and after" method. The acquiring authority paid for a new stock watering system and argued this was adequate compensation for the loss of access to the river. The appellant also claimed the net present value of the costs of operating that system for 105 years including replacement every 15 years. Tobias AJA held at [58] that maintaining the system related to the actual use of the acquired land by the appellant's stock in gaining direct access across that land pre-acquisition to the river. Cessation of that use was a direct and natural consequence of the acquisition. Further, where a cost is a loss attributable to disturbance within s 59(f) and results in an improvement to the value of the residue land that "cannot be taken into account when determining the value of that land in the application of the 'before' and 'after' method of determining the market value of the acquired land", at [58]. A finding was required but was not made by the trial judge as to whether s 59(f) was met, at [59]. Brock supports the Applicants' approach to disbursements in that individual circumstances must be considered under s 59(1)(f) regardless of whether these result in enhanced value of residue land.

[103]

Replacement dwelling site

A further complication in an already complicated matter is whether the proposed replacement dwelling site provides sufficient noise amelioration and other locational benefits to justify the move as reasonable. During the site visit on the Court view it became apparent for the first time that acoustic treatment for a replacement dwelling at the Applicants' selected location may be necessary in order for compliance with the RNP to be achieved in the location nominated, depending on the orientation of bedrooms in relation to the new highway. In cross-examination Mr Moloney stated that he chose the location because he believed it would be much superior to the main dwelling. He discussed the location with Mr Koikas for the first time on the view (par 32).
The acoustic experts considered the predicted acoustic performance of the proposed replacement dwelling as summarised in their fourth report filed in the course of the hearing, summarised above in pars 57-60. The experts based their assessment on the appropriate standards for daytime, night-time and external measurements in the RNP (par 58) and agreed that "a replacement dwelling would require some acoustic treatment for bedrooms with windows located on the northern, eastern and western façades in order to achieve the internal noise criteria". Living room windows and doors on the northern and eastern façades may also require treatment, albeit not as significant as the existing dwelling, see par 59. Whilst the proposed replacement dwelling will require some acoustic treatment to make it acceptable as a dwelling an acceptable level of noise attenuation can also be achieved at reasonable cost. The summary of the Applicants' submissions included a table identifying the projected acoustic environment for each façade of the proposed replacement dwelling. The table is too complicated to usefully summarise. Not every façade complies with the RNP but overall the acoustic environment is noticeably improved at the new site.
The proposed replacement dwelling would be in a quite different acoustic environment to the existing main dwelling. As shown by the aerial photograph (Exhibit 1) it would be shielded to the rear from the new highway by a hill which rises at least 25 m above the level of the land on which the proposed dwelling is to be situated. The noise level contour maps in the acoustic experts' fourth joint report (Exhibit J) illustrate this effect. The proposed location will provide a markedly better rural outlook and amenity for the Applicants than the main dwelling.

[104]

Conclusion

Taking into account the matters identified in pars 290-305 I consider the Applicants' intention to move to a replacement dwelling is a direct and natural consequence of the acquisition and that costs of establishing a new building may be reasonably incurred with the important qualification that the Applicants' full disbursement claim is not available. The acquisition can be considered the causal factor in the Applicants' intention to move and is the proximate cause as a matter of common sense as referred to in Lasermax Engineering Pty Ltd v QBE Insurance (Aust) Ltd [2005] NSWCA 66 cited in Caruana at [52]. The Applicants' claim (as amended by me) might reasonably be incurred given the amenity and noise impacts of the new highway on the main dwelling. For the reasons already given in relation to "double dipping" the building cost of a replacement dwelling is not recoverable.
Whether the Applicants are likely to reasonably incur costs of moving to a replacement dwelling in these circumstances is not the subject of specific evidence before me, not surprisingly. The Applicants must decide if they wish to press their claim given the reduced basis for a potential disbursement claim which I have determined. Consideration of further affidavit evidence as to their intentions to move may be necessary.
As noted above the Applicants have not provided a town planning report addressing the likelihood of obtaining development consent for a replacement dwelling and whether decommissioning or demolition of the main dwelling would be required as a condition of development consent. Had I been minded to award the full cost of building a replacement dwelling I would have required such a report to be obtained. It is not possible to be definitive about the likelihood of obtaining development consent given the Applicants' current holdings and existing two dwellings. I consider it is likely that development consent for a replacement dwelling can be obtained and am prepared to consider awarding limited relocation costs on that basis if additional evidence from the Applicants confirms that they are likely to incur such costs.
I have assumed for market valuation purposes that acoustic work will be carried out on the main dwelling as the conditions of approval require. I note that following the hearing the Court was advised that the RMS had given an undertaking to the Applicants dated 13 February 2017 concerning the carrying out of acoustic work on the main dwelling if no entitlement to a replacement dwelling for the main dwelling was awarded. There is a practical overlap between the market value claim and the disbursement claim in these circumstances.

[108]

Additional loss of profits not claimable

The Applicants claim the loss of income from the acquired and affected cane farm land as loss of profits in perpetuity in the amount of $148,258 as disturbance falling within s 59(1)(f). The first issue to arise is whether such a claim is maintainable at all, the RMS submitting that it is not. The Applicants did not refer to a case where such an award of compensation has been made in similar circumstances in relation to acquired land from which income is derived. The large number of cases referred to in [84] of the Applicants' closing submissions are simply authority that financial costs can include losses under s 59(1)(f). That is a settled question in any event. Those authorities do not otherwise assist in resolving this part of the Applicants' claim. If such a claim is maintainable it is surprising that this precise issue does not appear to have arisen in any reported judgment of the Court except for Parfett where such a claim was rejected. This suggests this claim is not available as a matter of valuation principle.
The compulsory acquisition of the Applicants' land extinguished all rights in the acquired land, as provided by s 20 of the Just Terms Act. No rights in the land remain with the Applicants after the date of acquisition. The hypothetical sale assumed for the purposes of s 56(1) includes the whole of the amount that would have been paid if the land had been sold, disregarding the effects of the public purpose. Expectations of future capital increments and the right to collect income from the land from rent or from carrying on cane farming for profit on it are rights which exist in the land itself for the benefit of the holder of the fee simple. This is not the Applicants' right after acquisition. Nor is it a right which crystallises at the point of acquisition.
I agree with the RMS that the claim is misconceived because the right to potential profits from growing sugar cane after the date of acquisition is encapsulated in the market value of the land. No such right is vested in the Applicants. The question must be answered in accordance with the express terms of the Just Terms Act.
The RMS referred to Parfett which concerned compensation for the compulsory acquisition of primary production land. A claim was made for business disturbance loss couched as the loss of the right to both an operating return on the land acquired plus "any future capital growth that may have been achieved should the acquisition not have occurred", otherwise called "lost implied capital growth", at [58]-[59]. The claim was rejected by Miller AC.
Miller AC held that there were two reasons why he could not accept the claim. The first was that: [63] In the Just Terms Act "market value" is a defined term (s 56). It is necessary to consider both words in addressing this issue. Neither are separately defined. Value [64] In the highly regarded text "The Principles and Practice of Valuation" Dr J F N Murray (p 62 3rd ed 1954): Value in the economic sense means the benefit conferred by ownership, which includes not only the possibility of exchange for other commodities, but all the satisfaction that may arise from possession. [65] Further, at p 98, he concludes: The value of a parcel of land at any point of time is dependent entirely upon the benefits which may be obtained from the use of that parcel in the future" [his emphasis]. [66] It follows that the value of a particular area of land, at a nominated point in time, can be described, in economic terms, as equal to the present value of all the benefits that will flow from its ownership having regard to its highest and best use. ... [69] In the case of the acquired land the market value agreed, between the parties, is the result of an analysis of comparable sales and thereby takes into account all features including its location, topography, its highest and best use, its productive capacity as well as the likelihood or otherwise of capital appreciation in the future. [70] To allow the claim would be an example of "double dipping".
The second reason identified by Miller AC related to the correct interpretation of s 59(f) referring to George D Angus on first instance at [99] to [108]. Miller AC held at [72] that "It is clear that financial costs (or losses) of any type unrelated to the 'actual use of the land'... cannot be claimed under s 59(f). Foregone capital growth could not be described as 'the actual use of the land'".
The same propositions apply to the present claim. After acquisition no relevant "actual use of the land" acquired was possible (except insofar as the Just Terms Act permitted). There was consequently no loss "relating to the actual use of the land". Section 59(1)(f) does not apply and there was no relevant loss or cost incurred.
I find that the alleged right or expectation on which this claim for loss of future profits rests is not available under the statutory scheme in the Just Terms Act. In terms of s 59(1)(f) there was no loss attributable to disturbance of the kind claimed and no "loss" has been incurred. I agree with the RMS' submissions set out above that market value includes the capacity of the cane land to generate a profit, at par 314(a). As the RMS submitted, the compensation paid can be directed in any way the Applicants choose whether buying more cane land or another investment or kept as savings, at par 314(b). Future profits from cane land cannot be guaranteed given the inherent risks in any farming venture, at par 314(c).
The Applicants' claim made in relation to 4.46 ha of cane land on the residue land of Watts Farm rendered too small to be useful cane land after the acquisition is also not available. The loss in value of that residue land, a claim specifically provided for under s 55(f), was taken into account in the "before and after" approach of the valuers. No additional principled basis for further considering loss of profits for that land is available. The Applicants' claim for loss of profits is not available.

Moloney v Roads and Maritime Services

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (115 paragraphs)

Parties

Cases Cited (48)

Cited By (4)