Easements
21 On the date of compulsory acquisition, one of the easements contained a 450 millimetre diameter overflow pipe from the existing pumping station to Peach Tree Creek, which runs along the western edge of Woodriff Gardens. According to deposited plan 1051278, the easement was acquired for sewerage purposes. The second easement contained a 600 millimetre diameter rising main connected to the pumping station via a valve chamber, and according to the deposited plan it was also acquired for sewerage purposes. The third easement was acquired for a right of carriageway, adjoining an existing right of carriageway, providing access through the park to the land on which the existing pumping station stands.
22 Sydney Water already had, under ss 37 and 38 of the Sydney Water Act 1994, the ownership of all works installed on the land including the pipelines and valve chamber and the right to enter and occupy the land to operate, maintain, remove, extend etc any of its works. In doing so, however, Sydney Water was liable to compensate those who suffered damage by the exercise of its functions (s 41). All land in or on which a work of Sydney Water is installed is taken to be subject to a covenant in favour of Sydney Water to ensure that the work is not wilfully or negligently destroyed, damaged or interfered with, that no structure is placed on or near the work in a manner that interferes with the operation of the work, and that the ground is not opened to expose any pipe or work of Sydney Water without reasonable excuse (s 44(1)).
23 The easements now acquired by compulsory process contain a wider range of prohibitions upon the council as the owner of the servient tenement. The memorandum under s 80A of the Real Property Act 1900 incorporating the covenants under the easements states that the registered proprietor must not :
4.1.1 use or allow to be used the Land for any purpose which may obstruct or prevent Sydney Water from having full and free access to the Land,
4.1.2 do or allow to be done anything whatever that may adversely affect support of the Land or of the Works placed or which may be placed in the Land,
4.1.3 place, erect or construct or allow to be placed, erected or constructed upon the Land any building or other structure whatever,
4.1.4 make or allow to be made by any means whatever any alteration to the existing surface levels of the Land,
4.1.5 place or construct or allow to be placed or constructed or allow to remain on the Land any pavement of concrete or having any form of bituminous surface with or without a base course of ballast or rock fill or like material,
4.1.6 place or allow to be placed or to remain on the Land any timber, article of plant or any stores, filling, rubbish or other material whatever,
4.1.7 park or place or allow to be parked or placed or to remain on the Land any vehicle whatever, other than vehicles temporarily parked or placed on the Land so that they may be removed without delay when necessary,
4.1.8 plant or allow to be planted in or upon the Land any tree or shrub other than shrubs that may be removed and reinstated if necessary or convenient for purposes of the performance of any Function,
4.1.9 do or allow to be done any landscaping which would be contrary to the provisions of clauses 4.1.3 or 4.1.4,
4.1.10 place or allow to be placed in, upon or over the Land any services including without limitation electrical, telecommunication, gas, water, wastewater and stormwater services with or without piped, conduits, cables or ducts.
24 Although the memorandum allows the registered proprietor to apply to Sydney Water to do one or more of the things specified in cll 4.1.3 to 4.1.10 (inclusive), and Sydney Water may "in accordance with the proposer exercise of its [f]unctions … give an approval or refuse to give an approval", the right does not extend to cll 4.1.1 and 4.1.2.
25 The parties' valuers have each adopted an entirely different approach to the assessment of compensation for the acquisition of the easements.
26 Mr Dempsey says that in the "before" situation there were existing pipelines covered by rights under the Sydney Water Act and which must be taken into account. As I understand his evidence, he says that there was no real impact from the creation of the easements for sewerage purposes on a before and after basis other than the blot on title. He would allow a diminution in value of the land covered by those easements of 10 per cent for the blot on title, which he then discounts by two-thirds because of the presence of the existing pipelines. I note, however, that the purpose of the acquisition was to decommission the existing 450 millimetre pipeline from the pumping station to Peach Tree Creek and install a new 750 millimetre diameter overflow pipeline, along with an additional pipeline and valve chamber between the existing pumping station and the rising main, noted in par [33] below.
27 Mr Large, on the other hand, gives full effect to the restriction imposed by the easements, which in his opinion warrant a discount of 50 per cent. He notes that the discount adopted by Mr Dempsey is "ridiculously low" and would not even cover the "blot on title" discount, normally a minimum of 10 per cent.
28 The relevant principles for determining compensation for the compulsory acquisition of an easement are described by Bignold J in Arrow v Electricity Commission of New South Wales (1994) 87 LGERA 363 at 366-367:
They are, in my opinion, compendiously expressed in D Brown's "Land Acquisition" (3rd ed, 1991) p 144/145. I shall confine quotation to the following passage:
Where an easement is compulsorily acquired the principles to be applied in assessing compensation are no different from those applying when the full fee simple is acquired. For practical purposes it becomes a matter of assessing the extent to which the claimant has been disadvantaged as a natural and reasonable consequence of the taking of the easement. The test is the attitude of the hypothetical prudent purchaser and the extent to which in the opinion of such person the claimant has suffered diminution in the value of his property...
29 It is self-evident that a purchaser of the council's land would discount its value by reason of the very existence of the easement: Rogerson v The Minister (1968) 16 LGRA 400 at 404. The court must, therefore, assess the reduction in value of the land by dint of the easements. This in turn depends upon the nature of the restriction imposed by the easements: Brancatisano v The Minister (1967) 16 LGRA 405.
30 Rogerson was the case where a property already had a sewer main through it together with the concomitant statutory rights of inspection and maintenance, and over which an easement was subsequently acquired. Hardie J held (at 404) that it was appropriate to apportion the diminution in value as between the two factors: the existence of the sewer main and statutory rights on the one hand and the acquisition of the easement on the other.
31 Mr T F Robertson SC, appearing for the council, submits, however, that the full impact of both the existing pipelines and the restrictions imposed by the easements must be taken into account and that the approach of Mr Large, noted in par [27] above, is correct. Mr Robertson relies upon the express purpose of the compulsory acquisition as published in the Gazette, namely "for the purpose of the Sydney Water Act 1994", which includes the use by the Sydney Water of the existing pipelines. That is, as I understand the submission, Rogerson is distinguishable from the present case, full account should be taken of the acquisition of the easements for sewerage purposes and there should be no apportionment.
32 Although an acquisition "for the purpose of the Sydney Water Act" covers a wide range of purposes, there is evidence of the more particular purpose in the report of Australian Water Technologies into the proposal to upgrade the existing pumping station. That report states that the sewage pumping station located in Woodriff Gardens is under-capacity and does not meet current occupational health and safety requirements. The report also states that the sewage pumping station is to be upgraded with greater capacity and storage, in particular to "provide pumping capacity and emergency storage for predicted 2010 flows". Further evidence of the purpose of the acquisition of the easements is found in a plan prepared for Sydney Water in July 2000 which shows the locations of the proposed easements and notation that the existing 450 millimetre diameter pipeline from the pumping station to Peach Tree Creek is to be decommissioned and a new 750 millimetre diameter overflow pipeline is to be installed, and an additional pipeline and valve chamber are to be installed between the pumping station and the existing rising main.
33 I find therefore, that the particular purpose of the acquisition was the upgrading of the pumping capacity and emergency storage of the existing pumping station and that the totality of the proposal included the integral component of decommissioning the existing pipeline to Peach Tree Creek and the construction of a new larger capacity pipeline and the additional pipeline and valve chamber between the pumping station and the existing rising main. This is further confirmed by the notation on the deposited plan 1051278 that the easements were acquired "for sewerage purposes". Thus, according to Mr Robertson SC, the full diminution in value should be allowed.
34 Despite the identified purpose of the acquisition of the easements for sewerage purposes, I do not accept Mr Robertson's submission. The fact of the existence, at the date of compulsory acquisition, of the original pipelines and the rights conferred by the Sydney Water Act in relation thereto cannot be ignored. There is nothing in the facts of the present case to distinguish the principle applied by Hardie J in Rogerson.
35 As Hardie J also noted in Rogerson, the assessment of the additional depreciation in value referable to the easements is a matter of considerable difficulty. In the present case I do not accept Mr Dempsey's assessment of a discount to 10 per cent of the market value, reduced by a further two-thirds. In addition to the obvious blot on title, I accept the observation of Mr Large that the respective shape and size of the easements effectively sterilise not only the land within the easements themselves but also other land between the easements. The easements "for sewerage purposes" cover much more land and are much wider than the land occupied by the pre-existing pipelines. Finally, as noted in par [23] above, the restrictions imposed by the easements are wider than those that formerly existed under the Sydney Water Act.
36 In cross-examination, Mr Dempsey conceded the proposition that the easements for sewerage purposes sterilise significantly more land than do the existing pipelines. All this suggests that Mr Large's assessment of a 50 per cent diminution in market value attributable to the easements is to be preferred - before any apportionment as discussed in Rogerson.
37 The total area of land affected by the three easements is 1,323 square metres. The two easements that were created for sewerage purposes have a combined area of 1223.7 square metres. The right of carriageway, having an area of 99.3 square metres, is not affected by any pre-existing pipeline or statutory rights and should, in my opinion, be depreciated by the full 50 per cent adopted by Mr Large. As to the easements for sewerage purposes, doing the best I can as the judicial valuer and having viewed the site of the easements, the apportionment of the diminution in the value between the two factors, the existing pipelines and associated statutory rights on the one hand and the acquisition of the easements on the other, and having regard to the additional restrictions now created by the easements, should in the present case be half and half.
38 I therefore assess and determine the compensation payable in respect of the land affected by the easements in the sum of $172,454, calculated as follows:
· 1223.7 square metres easement for sewerage purposes at $485 per square metre market value discounted by 50 per cent to $242.50 per square metre, of which half is attributable to the existing pipeline and statutory rights, resulting in 1,223.7 x $121.25 equals $148,374; and
· 99.3 square metres right of carriageway x $485 per square metre discounted by 50 per cent to $242.50, resulting in 99.3 x $242.50 equals $24,080.
Orders
39 The court determines the amount of compensation to which the council was entitled as at the date of compulsory acquisition, 19 August 2005 in the sum of $557,059.00, made up as follows: