Peak & Anor v Roads and Traffic Authority

Peak & Anor v Roads and Traffic Authority - [2006] NSWLEC 3 - NSWLEC 2006 case summary — Zoe

[18]

21 Mr Cooper and Mr Atkins agreed that these noise criteria were not currently being met and the noise level will only increase with the highway upgrade. Mr Cooper considered that the criteria could be met by the construction of a 700m long wall at least 3.5m high along the highway but did not consider this was reasonable. Mr Atkins considered that the noise criteria could not be addressed by reasonable ameliorative measures. (ii) Passive recreation (i.e. outdoor) noise criteria 22 Table 2 of ECRTN states that the passive recreation criteria is an average level of LAeq(15hr) 55dBA. Mr Cooper and Mr Atkins agreed that the passive recreation noise criteria were not currently being met and would not be met in the future. They disagreed whether there were reasonable ameliorative measures available to achieve the criteria. 23 Mr Cooper gave evidence that the criteria could be met by the construction of 120m long walls plus returns that were 3m high built on the perimeter of the Applicants' existing yard around the house. The Applicants did not consider such barriers reasonable in the rural environment as they would block the view from the house and substantially alter amenity around the house. Mr Atkins considered that the criteria could be met with the construction of two courtyard walls, one on the northern side and one on the eastern side, facing the highway. This would involve walls located 4.5m north of the dwelling approximately 20m in length and 2.5m in height. It was unnecessary to protect the recreation area from the south as the dwelling would provide sufficient attenuation. (iii) Indoor noise criteria 24 The ECRTN (at p 14 - Internal noise levels) states that for living areas apart from bedrooms, internal noise levels 10dBA below external levels, being an average level of LAeq(15hr) 50dBA during the hours of 7.00am - 10.00pm, and LAeq(9hr) 45dBA during the hours of 10.00pm - 7.00am, are recommended on the basis of windows being opened sufficiently to provide adequate ventilation. For sleeping areas, the ECRTN recommends an internal level of 35 - 40dBA at night time. Internal noise is measured at the centre of the habitable room that is most exposed to the traffic noise.

[26]

RTA measures to ameliorate noise 36 The ENMM states in Practice Note iv (b) that acoustic treatment of individual dwellings may be considered as a road traffic noise control option by the RTA. The acoustic treatments provided by the RTA are limited to fresh air ventilation systems (not air conditioning), upgraded windows and glazing, upgrading windows and door seals, the sealing of wall vents and the installation of external screen walls. Practice Note iv (b) also states that in most cases the limit per residence on the funding provided by the RTA for acoustic treatments is $20,000 where the external noise will exceed the target noise by more than 10dBA. Practice Note iv (b) states that additional funding may be provided, however, where site-specific circumstances prevail. It is clear that in this case the increase in noise level is likely to exceed 10dBA when the highway upgrade is completed. 37 The RTA argued that a hypothetical purchaser would be aware of Practice Note iv (b) in the ENMM and would expect to obtain $20,000 for acoustic treatment for the dwelling located on the site. 38 I consider that a hypothetical purchaser would factor in an element of risk as to whether the RTA would agree to pay the full amount of $20,000. I consider an amount of $10,000 is reasonable to assume as a sum a hypothetical purchaser may receive for noise control measures. Market Value of improvements on the Applicants' property 39 The Applicants relied on the expert valuation evidence of Mr Owen Allsop. The RTA relied on the expert valuation evidence of Mr Graham McDonald. The two valuation experts also provided the Court with a joint report. Mr Allsop provided two valuation methods in relation to the market value of improvements on the Applicants' property and the calculation of disturbance. However, the second option was not pressed by the Applicants and I will not consider it. (i) The Applicants' dwelling 40 The Applicants' dwelling is an aged building with a timber frame on brick piers and clad with weatherboards. The roof is corrugated steel and windows are timber and aluminium framed. Internal linings are fibro and timber strips and some treated pine linings as well. The house contained three bedrooms, a lounge room, dining room, a kitchen with adjacent pantry, a partially enclosed verandah, an open verandah, a bathroom and a laundry off the verandah. The house has an area of 162sq m comprising the dwelling and 45sq m of verandah. It is partly renovated.

[29]

46 Mr McDonald described the Applicants' dwelling as basic. Mr McDonald calculated the value of the Applicants' dwelling on a summation basis by calculating the price of the dwelling per square metre minus depreciation. Taking into account the age of the residence and the renovation works completed, Mr McDonald depreciated the dwelling by 50 per cent. On a "before" basis, Mr McDonald ascribed a value of $130,000 and $50,000 on the "after" basis. Finding on (i) 47 Having viewed the Applicants' dwelling and comparable sales I accept Mr Allsop's "before" value of $240,000 as accurate, given the appearance and presentation of the property. In relation to the "after" value, I do not consider the sale at Candoormakh Crescent relied on by Mr McDonald is indicative that a sale of this property, which is of a far superior character, is likely to fetch $50,000 in the market. Given the substantial noise impact of the highway upgrade on the Applicants' residence, which will render the outdoor area around the house unusable without extremely intrusive walls and substantially impact on the day and night time amenity inside the house, I do not consider a prudent hypothetical purchaser would be prepared to pay more than $10,000. I consider the "after" value is $10,000. (ii) The bails/dairy show complex 48 The bails/dairy show complex comprised an aged, weatherboard and steel roofed building with attached yards. The complex was utilised for the preparation of cattle to be shown to the Applicants' clients. The complex has now been demolished, having been located on the land acquired. Both valuers agreed the "after" value was nil. Mr Allsop's evidence 49 Mr Allsop ascribed a value of $40,000 to the bails/dairy complex in the "before" situation which he inspected before demolition. Mr Allsop considered that the complex was a specialised asset which was part of the Applicants' cattle operations. Mr Allsop also noted that the replacement costs of the complex would be approximately $64,000. Mr McDonald's evidence 50 Mr McDonald was unable to inspect the bails/dairy show complex as it had been demolished prior to his inspection. Mr McDonald's evidence in relation to the bails/dairy show complex is based on information he was given and photographs. In the "before" situation, Mr McDonald ascribed a value of $15,000 and nil in the "after" situation.

[33]

Finding on (iii) 56 I note that there is a relatively small difference between the "before and after" valuations of the valuers of $5,000. Mr Allsop's ascribes an "after" value of $7,500 less than his "before" value, while Mr McDonald ascribes an "after" value of $2,500 less than his "before" value. Mr McDonald's valuation appears conservative given the specialised nature of the yards built by the Applicants in terms of their AI and ET operations. I agree that loss in the productive capacity of the AI and ET complex results in a degree of overcapitalisation in the "after" situation. I accept Mr Allsop's "before" and "after" valuations. Amount of loss attributable to disturbance 57 The Applicants' counsel argued that because the highway upgrade would result in the Applicants' house being uninhabitable they were entitled to the costs, in part, of establishing a new house elsewhere on the property by virtue of s 59(f) of the Just Terms Act, or alternatively, s 59(c). The Applicants argued that the costs of relocating to a new house 300m from the highway, although not the costs of the new house, were compensable. They therefore claimed the costs of a new road to the new house site, a development application for the new house, disconnection of electricity and connection of electricity at the new site, a new septic tank and plumbing at the new site. In total, the Applicants claimed $114,004 for disturbance. 58 The RTA admitted loss attributable to disturbance in the order of $28,440. This sum related to the loss attributable to the resumption of the acquired land. The RTA, however, disputed the remaining items claimed by the Applicants on the basis that they did not relate to the acquisition of the acquired land, but rather, related to the residue land not acquired by the RTA. Accordingly, the remaining items were not compensable matters under either s 59(c) or s 59(f). Prior to further analysing the valuation evidence in relation to disturbance, it is necessary to determine what matters are compensable under s 59(c) and s 59(f) of the Just Terms Act.

[38]

65 In addition, the RTA argued that the Applicants were not entitled to compensation for the improvements associated with the reconstruction of the new house being the new road to the house site, the connection of electricity at the new site, a new septic tank and plumbing at the new site. These constituted improvements to the residue land and were not compensable under s 59(f). (ii) Section 59(c) 66 The RTA argued further that the Applicants could not establish a claim under s 59(c). That section was directed at circumstances where a residence or business has been acquired and the owners are required to relocate to another property. There was no relocation within the meaning of s 59(c) in the circumstances of this case where the Applicants are relocating to another part of the residue property. Finding on disturbance (i) Section 59(f) 67 The Applicants relied on the judgment of Gaudron J in Marshall v Director-General of the Department of Transport (2001) 205 CLR 603 at [38] in relation to a claim for injurious affection to argue that s 59(f) and (c) should be construed with "the generality that their words permit". However, relying on that broad principle in Marshall cannot overcome the need for the Applicants to frame their claim for compensation in accordance with the terms of the Just Terms Act. While there are cases which state that the legislation should be construed to give expression to the intention of the Just Terms Act to ensure compensation on just terms, there are also several cases which emphasise that the basis on which compensation is payable is wholly defined by the terms of the Just Terms Act. It is necessary to come within the provisions of the Act before its provisions can be construed generally. 68 The Court was referred to a number of cases which have allowed claims for compensation pursuant to s 59(c) and s 59(f) of the Just Terms Act. None of the cases to which I was referred dealt with the argument before me where the claim is made in relation to land that has not been acquired. 69 In Fitzpatrick Investments Pty Limited v Blacktown City Council (No 2) [2000] NSWLEC 139, the respondent compulsorily acquired land from the applicant which operated a property development business and held the acquired land as an investment property. Justice Lloyd considered whether the respondent was required to compensate the applicant for stamp duty payable in obtaining an equivalent property. At [20] Lloyd J stated that: Paragraph (f) of section 59 is wider than the preceding paragraphs. It is a "catch-all" provision: " 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 ". As a "catch-all" provision, the words " any other financial costs " should not, in my opinion, be read down. This does not mean, however, that this paragraph opens the flood-gates. The costs must be " reasonably incurred " and must relate to the actual use of the land, as a direct and natural consequence of the acquisition.

[51]

87 I consider that the Applicants' case as claimed was misconceived in relation to s 59(c). The claim for relocation of the dwelling relates to the residue land and not to the use of the acquired land. Accordingly, part of the Applicants' claim for disturbance under s 59(c) and (f) fails. (iii) "Improvements" not compensable 88 The RTA also argued at par 65 above that the services for the new house were not compensable as these were improvements to the property and that to compensate would allow the Applicants to "double-dip". I consider this argument is supported by Richardson v Roads and Traffic Authority (1996) 90 LGERA 294. In that case the respondent compulsorily acquired land used by the applicant as a nursery. The applicant sought compensation pursuant to s 59(c) of the Just Terms Act for the costs of relocation. In his judgment Talbot J at 302 required the respondent to compensate the applicant for the costs of relocation. At 303, Talbot J outlined the extent to which an applicant could be compensated for relocation costs: The value of existing improvements on the acquired property have been allowed as part of the market value. The cost of re-establishment of a business on a property which proves to be unsuitable for that purpose is not a cost of relocation. If a dispossessed owner is fortunate enough to find a replacement property which suits his particular needs without requirement for further capital expenditure beyond the purchase price, that has no effect on the amount of compensation for which he would be entitled for disturbance. Equally, the dispossessed owner is not entitled to purchase a property which requires significant improvement and capital expenditure and then expect the resuming authority to always pay for the cost of the improvements as a cost of relocation. The scheme of the Just Terms Act is that the owner is to be compensated for the loss of property and the actual cost of relocating… They are costs associated with the bringing of another property into a condition which approximates the condition of the property resumed. It would be a classic case of "double dipping" to allow compensation for existing improvements on the acquired property and then to allow further compensation as the cost of reinstating the equivalent fixtures and improvements on another property…

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Before

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Judgment (56 paragraphs)

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Cases Cited (12)