RTA v Damjanovic

Blacktown Local Environmental Plan 1998 Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 Land and Environment Court Act 1979 Supreme Court Rules 1970 Sydney Regional Environmental Plan No. 31 - Regional Parklands

Escobar v Spindaleri (1986) 7 NSWLR 51 House v The King (1936) 55 CLR 499 Peakhurst Inn v Fox [2004] NSWCA 74 CASES CITED: Roads and Traffic Authority v Muir Properties Pty Ltd [2005] NSWCA 460 Roads & Traffic Authority v Perry (2001) 52 NSWLR 222; (2001) 116 LGERA 244 Royal Sydney Golf Club v Federal Commissioner of Taxation (1957) 97 CLR 379 Stead v State Government Insurance Commission (1986) 161 CLR 141

Roads and Traffic Authority of New South Wales PARTIES: Mojmir Damjanovic Estate of the Late Dina Damjanovic

COUNSEL: A: B W Walker SC / R P Lancaster R: J Webster SC / A Pearman

SOLICITORS: A: Corrs Chambers Westgarth, Sydney R: Thorntons Lawyers, St Leonards

LOWER COURT JURISDICTION: Land & Environment Court

LOWER COURT FILE NUMBER(S): LEC 30579/04 LEC 30580/04

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40623/05 CA 40624/05

LEC 30579/04 LEC 30580/04

BEAZLEY JA SANTOW JA TOBIAS JA

Wednesday 5 July 2006 ROADS AND TRAFFIC AUTHORITY v MOJMIR DAMJANOVIC & THE ESTATE OF THE LATE DINA DAMJANOVIC ROADS AND TRAFFIC AUTHORITY v MOJMIR DAMJANOVIC, DANIEL DAMJANOVIC and JOSEPH TOBY DAMJANOVIC Judgment 1 BEAZLEY JA: I agree with the reasons of Tobias JA and his order. 2 SANTOW JA: I agree with Tobias JA. 3 TOBIAS JA: Prior to 13 February 2004, the respondents (it not being necessary to distinguish between them for the purpose of these appeals) were the owners of three allotments of land known as No. 339 Wallgrove Road, Eastern Creek, having an aggregated area of 10.33 hectares with a frontage to Wallgrove Road of some 390 metres (the respondents' land). The land had been used for some 40 years for poultry egg production. 4 By Notice of Compulsory Acquisition published in Government Gazette No. 35 on 13 February 2004, approximately 20% of the respondents' land along the Wallgrove Road frontage, and having an aggregated area of 3.312 hectares (the acquired land), was compulsorily acquired by the appellant for the purpose of the Western Sydney Orbital (WSO) of which the relevant section (including the acquired land) was nominated as the M7 Westlink. The acquired land comprised a band of variable width ranging from 50 to 75 metres fronting Wallgrove Road. After the acquisition the respondents were left with 8.233 hectares of land (the retained land). 5 Pursuant to s42 of the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act), the appellant offered the respondents compensation in an aggregated amount of $1,305,565. The offer was rejected, and the respondents lodged objections with the Land and Environment Court pursuant to s45(1) of the Just Terms Act against the amount of compensation they had been offered. Bignold J heard the objections on 11 February 2005 and determined the amount of compensation payable to the respondents in the sum of $15,963,000 together with two separate payments for solatium and compensation for disturbance. The solatium and disturbance compensation were not challenged in the present appeal and may be put to one side. 6 The appellant appeals to this Court from the primary judge's determination of compensation in the sum of $15,963,000. By virtue of s57(1) of the Land and Environment Court Act 1979 an appeal only lies to this Court on a question of law.

The evidence before and the reasoning of the primary judge 7 At the date of acquisition, the planning controls applying to both the acquired and retained land were contained in Sydney Regional Environmental Plan No. 31 - Regional Parklands (SREP 31). Thus, the primary judge held early in the hearing that the expert valuers retained by the parties were required to determine the amount of compensation under the relevant heads of s55 of the Just Terms Act in accordance with a planning assumption based upon the application of SREP 31 to the respondents' land both before and after the acquisition. 8 The procedure then adopted at the hearing was for the expert valuers retained by each party to prepare their valuation opinions on three alternative scenarios or approaches. These were summarised in paragraph 60 the appellant's written submissions as follows: "[a] That the land was to be valued on the basis that it was, simply, land 'zoned' (that is, designated Regional Parklands) under SREP 31; [b] That the land was to be valued on the basis that it was land zoned under SREP 31 and that [the respondents] had the right to continue the existing use of the land for poultry egg production; [c] That the land was to be valued on the basis that it was land zoned under SREP 31 and that [the respondents] had the right to continue the existing use of the land for poultry egg production and also had the qualified right (that is, requiring the grant of development consent) to change that existing use to another use being a higher (and more valuable) use than the existing use." 9 Pursuant to Practice Direction No. 22 of the Land and Environment Court relating to expert witnesses, the two valuers (Mr Dobrow for the respondents and Mr Preston for the appellant) prepared a joint report dated 25 November 2004 which became Exhibit "R". It was common ground between the valuers that a "before" and "after" approach should be adopted for the purpose of determining compensation on the basis of the market value of the acquired land pursuant to s55(a) of the Just Terms Act and any injurious affection to the retained land pursuant to s55(f) of that Act. This approach accords with conventional valuation principles which, with the agreement of McColl JA and Hunt AJA, I recently articulated in Roads and Traffic Authority v Muir Properties Pty Ltd [2005] NSWCA 460 at [103]-[104] in the following terms: "103 It is often the case that when only part of a dispossessed owner's land is compulsorily acquired, a " before " and " after " valuation exercise of the whole of that owner's land is conducted. In other words, the market value of the land before acquisition is determined (including the acquired land) as is its value after acquisition (excluding the acquired land). In this way the difference between the two values determines not only the market value of the acquired land but also captures any injurious affection to the retained land by reason of the acquisition for the public purpose. This approach will also, in an appropriate case, capture any loss due to the severance of the dispossessed owner's land by that acquisition. 104 In proceeding according to that approach, there has never been any doubt that the Pointe Gourde principle is applied in the " before " valuation exercise. In other words, the " before " value is determined on the basis of disregarding any decrease in the value of the land arising out of the purpose of the compulsory acquisition and any steps in the scheme leading to that acquisition. It is only in the " after " value that any decrease by reason of the proposed implementation of the public purpose for which the resumed land was compulsorily acquired is taken into account." 10 I shall return to the terms of Exhibit R later in these reasons. Suffice it to say at this point that in respect of valuation approach (a) (referred to in [8] above) Mr Dobrow adopted a "before" value of the respondents' land of $18,962,820 and an "after" value of the retained land of $8,140,770, a difference of $10,822,050. On the other hand, Mr Preston adopted a "before" value of $15,511,779 and an "after" value of $15,452,419, a difference of only $59,360. 11 With respect to valuation approach (b), Mr Dobrow adopted a "before" value of $8,047,685 and an "after" value of $2,939,723, a difference of $5,107,963. Mr Preston adopted a "before" value of $4,140,039 and an "after" value of $3,131,889, a difference of $1,008,150. 12 Finally, with respect to valuation approach (c), Mr Dobrow adopted a "before" value of $18,279,968 and an "after" value of $8,634,150, a difference of $9,645,818. Mr Preston adopted a "before" value of $11,954,942 and an "after" value of $11,546,494, a difference of $408,448. 13 As a result of Mr Dobrow's valuation with respect to approach (a) based upon SREP 31 yielding the highest value, the respondents formally abandoned their reliance upon approach (c) based upon the planning assumption of a change to a higher and more valuable use from the existing use of a poultry farm. As a consequence of this decision, there was apparently no need for the town planners retained by each of the parties to be called on the issue of changing the existing use to a higher use in respect of which they had, apparently, provided a number of reports and made several joint reports. It was therefore unnecessary, according to the primary judge (at [22]) to further consider the abandoned basis of valuation. 14 In the result, as his Honour pointed out (at [23]), the competing valuation evidence ultimately presented by the parties was confined to the valuations based upon (a) the application of SREP 31 (which yielded Mr Dobrow's highest estimate); and (b) the existing use entitlement to continue poultry egg production (which yielded Mr Preston's highest estimate). 15 However, in the course of the hearing, both valuers were given the opportunity to revise their respective valuations as set forth in Exhibit "R". Relevantly, this revaluation was to be undertaken in the light of expert traffic engineering evidence with respect to the capacity of an alternative access road to the retained land, which was to be provided by the appellant, following the respondents' loss of the existing three direct access points to their land from Wallgrove Road as a consequence of the requisitioning of the land. Mr Dobrow therefore revised his valuation on approach (a) from $10,822,050 to $16,023,097 due to the inability of the alternative access road to accommodate the traffic generated by his assumed industrial use of the respondents' land, which had been the basis upon which he had determined its "before" value. However, he did not revise his valuation approach (b) based upon the planning assumption of the continuance of the existing use of poultry egg production as the traffic generated by that use could be accommodated by the alternative access road. 16 On the other hand, Mr Preston in his supplementary statement reduced his existing use valuation (approach (b)) of $1,008,150 upon the basis of later evidence concerning the planning history of the existing development of the respondents' land. However, he saw no reason in the traffic engineering evidence to revise his "before" or "after" valuation based upon approach (a).

The relevant provisions and the effect of SREP 31 17 Before returning to the evidence before the primary judge, it is convenient to refer to SREP 31 in more detail. It applied to some 5,400 hectares within a linear corridor of 26 kilometres measured from Quakers Hill in the north to Leppington in the south and spanning the local government areas of Blacktown, Fairfield and Liverpool. When it came into force on 8 June 2001, the accompanying explanatory material noted that more than 90% of the Western Sydney Regional Parklands were already publicly owned. Accordingly, some 540 hectares of privately owned land (which included the whole of the respondents' land) were identified for "parkland" purposes. 18 Clause 4 of SREP 31 provided that a number of identified environmental planning instruments including Blacktown Local Environmental Plan 1998, which would have applied to the respondents' land but for SREP 31, were no longer applicable. Clause 7 (3) specified the type of development that could be carried out with development consent upon the land to which SREPP 31 applied. Suffice it to say that any form of intensive urban use, and particular the use of the respondents' land for industrial or employment purposes, was prohibited. Although use for "agriculture" was permissible with consent, that term was defined in a manner which excluded poultry egg production which was why the latter was asserted to be an existing use of the respondents' land at the date of acquisition. 19 Clause 19 contained provisions for the acquisition by the Corporation (created by the Environmental Planning and Assessment Act 1979, s8(1)) of lands "identified by shading on Sheet 2 of the Map" (which included the respondents' land). It was in the following terms: " Acquisition of land (1) The owner of any land which is identified by shading on Sheet 2 of the map can, by notice in writing, require the Corporation to acquire the land. (2) On receipt of such a notice, the Corporation must acquire the land to which the notice relates, subject to subclause (3). (3) The Corporation is required to acquire land to which a notice under subclause (1) relates only when the land is included in a priority program for acquisition as determined by the Corporation or the Corporation is of the opinion that the owner of the land will suffer hardship if the land is not acquired."

For present purposes the Corporation was relevantly the Department of Infrastructure, Planning and Natural Resources (the DIPNR). 20 It was common ground that any acquisition of land by the DIPNR pursuant to clause 19 would require that land to be valued in accordance with what was referred to in the evidence as its "underlying zoning", ignoring for that purpose the "blight" on the land constituted by the restrictive planning controls of SREP 31. In other words, the Pointe Gourde principle required that the price paid by the DIPNR for land acquired by it pursuant to clause 19 would be determined upon the basis that any decrease in the value of the land arising as a consequence of the planning controls in SREP 31 was to be disregarded. That principle, in respect of the application of which there was no relevant dispute in the present case, is conveniently explained by Handley JA, with whom Powell and Hodgson JJA agreed, in Roads & Traffic Authority v Perry (2001) 52 NSWLR 222; (2001) 116 LGERA 244.

The evidence before and the reasoning of the primary judge (continued) 21 Exhibit "R" was tendered and admitted into evidence by the primary judge at the hearing on 25 November 2004. In accordance with the practice of the Land and Environment Court at the time, the two valuers were then sworn and were then asked questions by his Honour to which each responded. The primary judge asked questions of Mr Dobrow to which he responded, and then Mr Preston was invited to reply to Mr Dobrow. Mr Dobrow was cross-examined by the appellant's counsel and Mr Preston was then cross-examined by senior counsel for the respondents. The concurrent evidence of the two valuers is recorded in Black 1/107-190, and I shall return to parts of that evidence later in these reasons. 22 After the valuers had given their concurrent evidence, a joint report dated 1 December 2004 by the expert traffic engineers retained on behalf of the parties was tendered on 2 December 2004. In the context of that report, the physical effect of the acquisition of the acquired land, as his Honour found (at [66]), was the entire loss of direct road access between the retained land and the WSO. As the WSO abutted the retained land and was to be built on an elevated eastern embankment some six or seven metres higher than the retained land, the compulsory acquisition of the acquired land left the retained land without any usable road frontage. 23 However, as noted in [15] above, the appellant had provided a temporary alternative access road from Wallgrove Road to the retained land during the construction process for the WSO. The parties accepted that this road was to be regarded as providing a permanent alternative access road arrangement for the retained land. 24 This alternative access road had a dog-leg configuration which intersected with an access road off Wallgrove Road to Austral Bricks plant which was located to the south-east of the respondents' land. This access road utilised an underpass under the WSO. It was separated from the retained land by land owned by Sydney Water over which the alternative access road to the retained land was required to pass. This alternative access arrangement was provided so that the existing poultry egg production business conducted on the retained land could be continued during the construction phase of the WSO, and after it became an operational road on completion of the entire project, which was estimated to be in 2007. 25 The alternative access road was only designed to facilitate the continuance of the existing poultry egg production business conducted by the respondents on the retained land. An issue therefore arose as to the effect of that access arrangement on the "after" value of the retained land based not upon its existing use value but upon a higher use and, in particular, upon its use for industrial purposes. 26 The joint report of the traffic engineers (Exhibit 34) recorded an agreement in the following terms: "(i) the Type C non-signalised intersection (painted seagull arrangement) provided at the Wallgrove Road junction with the Austral Bricks access road provides a satisfactory form of vehicular access to serve a substantial industrial property generating more than 30 vehicle movements per hour. (ii) the new intersection provided on the Austral Bricks access road to serve the [retained land] satisfies the Standards Australia requirements for providing vehicular access to a low usage driveway (ie. generating less than 30 vehicle movements per hour). (iii) the intersection of the Austral Brick access road and the new access road serving the [retained land] is not suited to potential future industrial uses which may generate more than 30 vehicle movements per hour … including articulated vehicles." 27 In light of the statement in the joint report of the traffic engineers that the alternative access road arrangement was not physically capable of supporting a development of the retained land for an industrial use generating more than 30 vehicle movements an hour, Mr Dobrow revised his "after" valuation in respect of approach (a) in Exhibit "R" by increasing the percentage by which he had discounted his rate per square metre in his "before" valuation from 45% to 80%. This resulted in an "after" value of $2.94 million as compared to his "after" value in Exhibit "R" of $8.14 million. It was for these reasons that Mr Dobrow's valuation on approach (a) of the acquired land increased from $10,822,050 to $16,023,097. 28 The appellant submitted, both before the primary judge and this Court, that Mr Dobrow's approach, particularly with respect to his "after" valuation, was "wholly flawed in valuation law and methodology". The primary judge rejected this submission. 29 The impact of the traffic engineering evidence with respect to the ability to access the retained land and the effect that that would have upon the underlying zoning thereof constituted the primary contest between the parties at trial. In this respect, as the primary judge noted (at [98]), the common premise of the valuers' respective "before" valuations was that the respondents' land was to be valued upon the assumption that an industrial type use was available as the highest and best use thereof. In this respect, Mr Preston relevantly stated the following in Exhibit "R", under the heading "General Valuation Approach": "To consider the value of the subject property before and after the acquisition based on SREP 31 Sales Evidence, I have placed most reliance on the SREP 31 sales that are based on a use similar to what I believe to be the Highest and Best Use would be for the subject land. The sales, which I believe are most comparable, are that of the two sales in Trivett Street referenced as sale numbers 4 and 5 in the schedule annexed hereto … … I have been mindful of the fact that if the DIPNR were to acquire the subject property for purposes set out in SREP 31 I believe that the price would be formulated on the basis of the underlying use of the land or the most likely alternative use as it considered within the provision of Part 2 - Control and Assessment of Development with SREP 31. I therefore believe that it is inappropriate to adopt a figure to apply to the subject land from the available sales evidence, prices of which appear to have been formulated based of varying different uses . I believe that the land would have a higher value after the M7 is completed and do not believe that the value should be reduced based on access. In considering the valuation on this basis I have adopted an industrial type uses as the highest and best use and assume that barriers would not be constructed along the M7 so that exposure to the site would be maximised. I have also been mindful of the neighbouring uses and their impact on value of the subject both before and after the acquisition." (Emphasis added) 30 The two sales in Trivett Street referred to by Mr Preston and which were sales to the Corporation, were analysed by him to produce a rate of $161 m² for sale 4 and $141 m² for sale 5. Based on those sales Mr Preston adopted a rate of $150/m² for his "before" valuation of the respondents' land. 31 In Exhibit "R", Mr Dobrow relied upon the same two sales, which he analysed at $165/m² for sale 4 and $145/m² for sale 5 which he adjusted to $150/m². However, he stated that he considered the respondents' land to be superior to the land the subject of the sales in location, shape and topography and noted that he had made an adjustment for size. Accordingly, he applied an adjusted rate of $180/m² to the respondents' land in his "before" valuation. With respect to his "after" valuation, he discounted the "before" rate of $180/m² by 45% (later increased to 80%) to an "after" rate of $99/m². He stated that he came to this result due to making "an allowance for the loss of exposure, the limited access, the M7 and the additional risk in gaining development consent due to the limited access and no easement for services." 32 On the other hand, Mr Preston's "after" valuation increased from his "before" rate of $150/m² to $190/m². Mr Preston was of the view that the highest and best use of the respondents' land in the "before" valuation and the highest and best use of the retained land in the "after" valuation was the same, namely, industrial use. Such a use was consistent with the nature of the development surrounding the respondents' land. The land on the opposite side of Wallgrove Road was zoned for industrial/employment uses under SEPP 59, and the land adjoining the respondents' land was used by Waste Services and Collex as tips and, slightly further afield, by Austral Bricks for brick production. 33 It is important to note that both valuers in Exhibit "R" relied on the two Trivett sales to the Corporation as being the most comparable sales for the purpose of determining the "before" valuation of the respondents' land. Further, they analysed those sales in similar ways and both applied them to the respondents' land "by direct comparison": see [90] of the judgment. 34 As his Honour observed (at [102]), the two Trivett Street sale properties were located some five kilometres from the respondents' land in close proximity to the existing industrial zone in the Wetherill Park Estate, the planning controls of which were contained in SEPP 59. The land on both properties sloped steeply and his Honour inferred that the estimated development costs of earthworks to achieve a usable site area for industrial development was taken into consideration by the DIPNR when striking the purchase price for those properties. 35 The primary judge then made the following observations, of which the first sentence of [104] was particularly relied upon by the appellant in its arguments before this Court: "104 It is, I think, important to emphasise the fact that the purchase of these sale properties was for the purposes of SREP31 and not for the purpose of the purchaser developing the sale properties for industrial purposes. Nonetheless, industrial land values formed the basis of the purchase price for the two sale properties because an industrial type use or zoning was deemed to be the underlying zoning of the sale properties. The concept of ' underlying zoning ' was obviously adopted by the contracting parties because it was commonly recognised that the planning controls imposed by SREP31 were directly influenced by the express objective to bring into public ownership all privately owned lands identified by SREP31 as forming part of the proposed Regional Park. Resort to the concept of ' underlying ' zoning in such circumstances is conventionally undertaken to ensure that compensation for the acquisition of lands required for a public purpose reflects ' market value ' unaffected by the public purpose … 105 It is to be noted that in their Joint Report ( Exhibit R ), the Valuers presented and analysed 7 sales of lands governed by SREP31 and their analysis of each sale ascribed an underlying zoning to the sale property but it was only the two Trivet Street sales that were ascribed an underlying ' industrial ' zoning. 106 In my judgment, the major premise commonly adopted by the Valuers in their ' before ' valuations, namely that the Trivet Street sales were the most comparable of all the collected and analysed sales of lands governed by SREP31 and could be applied by direct comparison to the [respondents'] land, is a sound valuation premise. 107 Implicit in that premise, is the Valuers' common recognition that the underlying zoning of the [respondents'] lands that is achieved by setting aside the effect on value of SREP31 (for the conventional reasons referred to) would be for an industrial type zoning or use. Indeed, this recognition was expressly stated in the passage that I have quoted from Mr Preston's supplementary Statement ( Exhibit Q ). In my judgment, this too is a sound valuation premise on the facts of the present case which includes a discernible market value of lands governed by SREP31 even though the only realistic purchaser of such lands is the statutory corporation created by the EP& A Act , s 8 and even though the contract prices reflected different values depending upon the underlying zoning attributed to each of the sale properties."

The passage from Mr Preston's supplementary statement (Exhibit "Q") and referred to by his Honour in [107] was incorporated into Exhibit "R", which I have quoted in [29] above. 36 The primary judge then considered the differing rates per square metre adopted by Mr Dobrow on the one hand and Mr Preston on the other in their respective "before" valuations. His Honour determined that Mr Dobrow's adjusted rate of $180/m² should be adopted in preference to that of Mr Preston. The primary judge then proceeded to determine the "after" valuation which, in his opinion (expressed at [111]), was "crucially dependent upon a proper assessment of the effect of the WSO on the [respondents'] retained lands." 37 In his Honour's view, the effect of the WSO on the retained land was to appreciably decrease its value as opined by Mr Dobrow. He expressed his reasons for this finding in the following terms: "113 Why is this so? Fundamentally, it is because of the entire loss by the retained lands of usable street frontage (by which I mean street frontage providing direct access between the land and its highest development potential and road) compared with the situation prior to the date of compulsory acquisition when the [respondents'] lands enjoyed a usable street frontage of 390 metres to Wallgrove Road, including three separate driveways directly connecting the [respondents'] land to Wallgrove Road. This entire loss of usable road frontage is created both by the physical and legal conditions of the WSO. 114 Physically, as it abuts the [respondents'] retained land, the WSO is constructed on a raised embankment some 6 or 7 metres higher than the retained land so that direct access between the two is physically impossible. Legally, it can be expected that the status to be accorded to the WSO under the Roads Act 1993 will involve legal restrictions on access to it from adjacent lands: vide Part 5 of the Roads Act 1993 . 115 Since the WSO constitutes the only road frontage to the retained land, it will be absolutely denied the direct road frontage access that was available to, and enjoyed by, the [respondents'] lands immediately prior to the compulsory acquisition. 116 The result is that access to the retained land will only be available via the alternative access arrangement that has been provided by the [appellant], as I have earlier described it. The undisputed traffic engineering evidence is that this alternative access arrangement is not suited to any potential industrial use which generates more than 30 vehicle movements per hour. 117 Adopting this undisputed traffic engineering opinion, Mr Dobrow has concluded that by virtue of the limitations inherent in the alternative access arrangement, the retained land is not suited for industrial development and that in consequence of the absence of adequate access, the potential for industrial usage of the retained land is totally forfeited or destroyed. The alternative access arrangement is adequate for the existing use of the retained land or some other rural uses which have low traffic generation qualities (ie less than 30 vehicle movements per hour) and accordingly, Mr Dobrow's ' after valuation ' is based upon his existing use value (or some other rural use) of the retained land." 38 The primary judge then referred to Mr Preston's competing opinion that the effect of the WSO would be to significantly enhance the value of the retained land, notwithstanding the joint report of the traffic engineers. This was apparently because the traffic engineers' agreement concerning potential future industrial uses was "not applicable" to the valuation of the retained land, as based upon the application of SREP 31 to that land. This reasoning is somewhat obscure and little, if any, light was cast upon it by Mr Preston's evidence. 39 The primary judge rejected this explanation (at [119]) on the basis that the WSO would not render the retained land more accessible or exposed to greater volumes of vehicular traffic, as anticipated. He found that the very quality of the "underlying" industrial zoning of the retained land that Mr Preston had applied to his "before" valuation would be totally absent from that land by virtue of the inadequacy of the alternative access road arrangement that had been provided by the appellant. Accordingly, the WSO would affect the retained land by destroying the potential for it to retain its underlying industrial zoning, which Mr Preston had attributed to the respondents' land in his "before" valuation. 40 His Honour thus concluded (at [123]) that: "It is just as obvious that the Wallgrove Street frontage of the [respondents'] land is conducive of its potentiality for industrial development as it is obvious that the absence of such frontage is destructive of that potentiality." 41 Accordingly, his Honour rejected Mr Preston's "after" valuation of the retained land and accepted that of Mr Dobrow on the basis that its value was for its existing use or some other low traffic generating rural use. 42 The primary judge then turned to the appellant's submission that Mr Dobrow's approach to both the "before" and "after" valuation was "wholly flawed in valuation law and methodology". I refer to this attack as it was, to a degree, repeated in the appellant's arguments on the appeal. 43 In essence, the appellant submitted to his Honour that both Mr Dobrow and Mr Preston erred in directly applying the Trivett Street sales to the "before" valuation of the respondents' land. Although the appellant accepted that those sales were transacted upon the basis of an underlying industrial zoning, it was submitted that the respondents had not sought to make a case, and the evidence did not support a finding, that the DIPNR would in any future acquisition of the respondents' land or the retained land have considered it to have an underlying zoning for industrial use. It submitted that the Court could not make a finding to the effect that the DIPNR would have regarded the underlying zoning as industrial without hearing from planning experts on that topic. 44 His Honour's response to this submission was in the following terms (at [141]): "141 Both Valuers adopted the two Trivet Street sales as the most comparable sales. Both Valuers appreciated that the Trivet Street sales reflected the value of lands governed by SREP31 but with an " underlying " industrial zoning. Both Valuers utilised the sales evidence provided by the two Trivet Street sales by direct comparison with the [respondents'] land, because it was their common opinion that the underlying zoning of the subject property, like the two sale lands, would be for an industrial type use." 45 The primary judge then observed (at [142]) that the commonly held opinions of the two valuers did not depend upon enquiry being made of the DIPNR as to its opinion of the "underlying" zoning of the respondents' land nor was any such enquiry necessary. Rather, the purchase price (or compensation) for the acquisition of the respondents' land, pursuant to clause 19 of SREP 31, should be determined on the basis of another question concerning the underlying zoning of the respondents' land, which was: "what would the parties mutually agree to be the underlying zoning or (in the event of lack of agreement) what would be the underlying zoning upon which compensation is payable under the Just Terms Act." 46 The primary judge noted that the valuers' common opinion was that the underlying zoning would be for some industrial type of development. That opinion, he held, was soundly based and represented a justifiable exercise of the valuation judgment which both valuers were competent to make. Accordingly, no flaw in the approach of those valuers was considered to have been demonstrated. 47 At [151] the primary judge referred to a submission of the appellant that the relevant task of the valuers was: "to value the chance of exploiting cl 19 of SREP [31] so as to require DIPNR to acquire land, account must be taken of the risks associated with that process - that it will take time, that the basis on which DIPNR will acquire it will not reflect more than rural value and matters of that sort." 48 His Honour noted (at [151]) that this formulation of the relevant valuation task was radically different from the manner adopted in common by Mr Dobrow and Mr Preston as neither had assigned a value to the respondents' land, either in their "before" or "after" valuation, on the basis of "the value of the chance of exploiting cl 19 of SREP31". This was because the valuers had recourse to available and comparable evidence of market sales of lands governed by SREP 31 and which no doubt had been acquired by the DIPNR as a consequence of the owners thereof "exploiting cl 19 of SREP31". The valuers had selected the two Trivett Street sales as the most comparable, recognising that the prices paid by DIPNR for the acquisition of those two parcels of land reflected an underlying industrial zoning. The valuers had also accepted that the same zoning should properly, in their valuation judgment, be attributed to the respondents' land. 49 Accordingly, his Honour (at [153]) held that the availability of this market evidence used in common by the two valuers required the rejection of the appellant's submission that the proper valuation task was to value "the chance of exploiting cl 19 of SREP31". 50 The appellant made a related submission that, at the very least, it was necessary to discount Mr Dobrow's valuation on account of the risks involved in the acquisition of the land by the DIPNR pursuant to clause 19 of SREP 31. As I have indicated, his Honour regarded this submission as relating to their submission requiring a valuation on the basis of the chance of exploiting clause 19 of SREP 31 (as translated in the appellant's written submissions at trial), the essence of which was as follows. 51 First, in valuing the chance of exploiting clause 19 of SREP 31 so as to require the DIPNR to acquire the land, account was required to be taken of the risks associated with that process namely, that it would take time and that the DIPNR might not agree to acquire the land to reflect more than its rural value. Accordingly, the Court could not adopt the approach that the underlying zoning of the retained land was industrial without discounting that value due to the risk of the DIPNR failing to agree that the land should be so valued. 52 Second, the Trivett Street sales should have been discounted to adjust their analysed sale prices to reflect their underlying industrial zoning in order to derive a comparable value in terms of the zoning of the retained land, given the risk that the DIPNR might have valued the retained land on a different basis. It will be appreciated, as the appellant conceded in its written submissions before the primary judge that these two questions should lead to the same result but, like the primary judge, I have some difficulty distinguishing between the two. 53 Nevertheless, his Honour rejected the submission saying "it simply flies in the face" of the commonly held position of the valuers that the two Trivett Street sales were the most comparable sales of land governed by SREP 31 and that they were capable of being applied to the respondents' land by direct comparison. His Honour did not consider that the appellant's submissions advanced any sound or cogent reason for rejecting the commonly held opinion of the valuers on this issue. The contention that the Trivett Street sales should be discounted by 50% to 55% and that any direct comparison with the respondents' land was contrary to the valuation evidence and unsupported by any principle of valuation amounted, in his Honour's view, to a submission that the Trivett Street sales were not comparable at all. 54 His Honour then dealt with the related submission in these terms: "157 The alternative ground advanced in support of the [appellant's] submission that there should be a significant deduction made to Mr Dobrow's valuation was to allow for the risk that DIPNR, upon any acquisition of the [respondents'] land pursuant to cl 19 of SREP31, would not pay a price reflecting an underlying " industrial " zone. 158 Again, this submission is not supported by any valuation evidence, although if I had admitted into evidence Mr Preston's belated revision of his valuation opinions contained in the Valuers' Joint Statement ( Exhibit R ), that revision included an allowance of 35 percent for such a risk." 55 His Honour's reference to "Mr Preston's belated revision of his valuation opinions" is a reference to his supplementary statement dated 3 December 2004. The tendering of this statement was objected to by the respondents and rejected by his Honour, and the document was marked MFI "E". The appellant challenged his Honour's rejection of this document upon the basis that his discretion to admit the evidence miscarried. I shall deal with the contents of MFI "E" and his Honour's reasons for refusing to admit it into evidence when dealing with that ground of appeal. 56 I therefore turn to the errors of law alleged by the appellants in those grounds of appeal that were not abandoned.

Did the primary judge fail to adopt an approach to the " after " valuation that was consistent with his approach to the " before " valuation? - Grounds of Appeal 7-9 57 As already noted, the determining factor in the assessment by the Mr Dobrow of his "after" valuation, as accepted by the primary judge, was the effect of the WSO upon the value of the retained land. His Honour found that its effect was to remove the Wallgrove Road frontage enjoyed by the respondents' land prior to acquisition and thus to deny adequate access to that land, rendering it unsuitable for industrial development due to the inadequacy of the alternative access road provided by the appellant to cater for the traffic which would be generated by such a use. 58 The error of law contended for by the appellant was that: "by fixing upon the ' effect of the WSO upon the [respondents'] retained land ', the trial judge demonstrated an approach to the valuation 'after' acquisition which was entirely inconsistent with the approach he had applied to the valuation 'before' acquisition." 59 It was pointed out that his Honour had adopted a rate per square metre in the "before" valuation which reflected the hypothetical purchase by the DIPNR of the respondents' land under clause 19 of SREP 31 as though it had an underlying zoning for industrial use. It was submitted that even if the access road arrangements with respect to the retained land after acquisition were inadequate for the actual development of that land for industrial use, it should not matter. This was because the primary judge had recognised in [104] of his judgment that it was "… important to emphasise the fact that the purchase of these sale properties was for the purposes of SREP31 and not for the purpose of the purchaser developing the sale properties for industrial purposes." 60 As I understand the appellant's argument, the DIPNR would not be acquiring the retained land (any more than it would be acquiring the respondents' land before acquisition) for the purpose of actually developing the land for industrial purposes. Rather, DIRNR would only be purchasing the land for the purposes of SREP 31, and there was therefore no reason to suggest that the DIPNR would not purchase the retained land after acquisition for the purposes of Regional Park lands on precisely the same basis as it would have purchased the respondents' land before acquisition. Accordingly, so the argument ran, the primary judge erred because he considered that the physical access road arrangements affecting the retained land would dramatically reduce its value although it could otherwise, but for the inadequate physical access arrangement, be developed for industrial use which use was otherwise prohibited by SREP 31. 61 The appellant contended that this approach was inconsistent with his Honour's "before" valuation at a rate per square metre derived from the sale of the Trivett Street properties, which had also been purchased for the purpose of SREP 31 and not for actual industrial development. 62 In other words, the actual access road arrangement to the respondents' land played no part in the determination of its "before" value because, as his Honour had himself emphasised, the only real potential purchaser was the DIPNR for the purposes of Regional Park lands and not for actual industrial development. Consistency thus required that the access road arrangements brought about by the acquisition of the acquired land for the WSO should play no part in the "after" valuation. 63 In my opinion these submissions should be rejected for the following reasons. First, the statement by the primary judge at the commencement of [104] of his judgment that the Trivett Street sales were for the purposes of SREP 31, and not for the to the DIPNR developing those properties for industrial purposes, needs to be read in the context of the explanation for that statement which follows in the same paragraph: see [35] above. Accordingly, the appellant has taken the first sentence of [104] out of context and given it a significance that was never intended by the primary judge. 64 Secondly, it is obvious that the price paid by the DIPNR for the lands the subject of the Trivett Street sales not only assumed that their underlying zoning was for industrial purposes but also that it was an appropriate zoning in terms of the existing provision for access, services and the like. So, also in the present case, the respondents' land in the "before" valuation had the benefit of services in Wallgrove Road as well as a 390 metre frontage to that road so that appropriate access to the land from a public road for industrial purposes was a given. 65 Third, in the "after" valuation, the valuers were required to assume that the retained land would be purchased by the DIPNR but in circumstances where direct public road access to that land was denied by virtue of the WSO and where the only available road access was that provided by the appellant, which was accepted as being inadequate for any industrial use that generated more than 30 vehicle movements per hour. Further, the evidence was that it would be impossible to upgrade the services to the retained land once the WSO was constructed so as to cater for the intensified use of the retained land for industrial purposes as compared to its existing use for poultry egg production. This was not a problem when the respondents' land had a frontage to Wallgrove Road. 66 Fourth, it follows that the fundamental flaw in the appellant's argument is that it denied the proposition that when valuing the retained land, the valuers were required to assume that the land did not have a 390 metre frontage to Wallgrove Road from which access for industrial purposes was permitted. If that argument was correct and the retained land was to be valued upon the same basis as the respondents' land in the "before" valuation, then the result would ignore the decrease in the value of the retained land by reason of the undertaking of, or the proposal to undertake, the public purpose for which the respondents' land was acquired. This result would be contrary to s55(f) of the Just Terms Act. 67 Thus, in contrast to any suggestion of inconsistency in the primary judge's approach to the "before" valuation on the one hand and the "after" valuation on the other, s55(f) of the Just Terms Act required his Honour to approach the latter valuation in the manner in which he did (and in the manner in which it was approached by Mr Dobrow) in order to ensure that the "before" and "after" valuation did in fact capture the injurious affection to which s55(f) is directed. 68 Accordingly, there was no inconsistency in the primary judge's approach to the "before" and "after" valuations. On the contrary, the approach adopted by his Honour and Mr Dobrow was entirely consistent with proper valuation principles. 69 Although they were not the subject of the appellant's oral submissions on the appeal, two other alleged errors were advanced by the appellant in its written submissions with respect to the alternative access road arrangements it provided. The first was that, on the evidence, it was not open to the primary judge to conclude that the potential for industrial development of the retained land had been entirely destroyed by reason of those arrangements. The appellant contended that the land had at least such value as was properly attributed to land suitable for industrial uses that generated fewer than 30 vehicle movements per hour and, therefore, that it should have been valued on that basis. 70 In my opinion, there is no substance in this submission. First, this Court was not referred to any part of either the written or oral evidence before or submissions to the primary judge in which a valuation based on an industrial use generating fewer than 30 vehicle movements per hour and not permitting the use of articulated vehicles was advanced with respect to the retained land. 71 Second, it defies common sense to suggest that the development of some eight hectares of land for industrial purposes could constitute a practical proposition where the traffic generated by that development was required to be less than 30 vehicle movements per hour and where articulated vehicles could not service any such development. 72 The second submission was that the primary judge had erred in failing to apply a discount or set-off for the construction costs in the "before" valuation of the requisite industrial intersection between the respondents' land and Wallgrove Road. In this respect his Honour recognised (at [84]) that there was no dispute in the traffic engineering evidence. Further, it was commonly accepted that a proper intersection or treatment similar to the "seagull" type intersection that existed at the adjoining Eastern Creek Waste Management Centre would be required for the development of the respondents' land at its frontage to Wallgrove Road. 73 It is true that his Honour made no allowance for the construction cost of such an intersection but neither did Mr Dobrow and Mr Preston in their respective "before" valuations. In any event, the inference is available that the sale price of the Trivett Street properties would have reflected the cost of having to provide such an intersection. It would be reasonable to assume this that was so and that it had not escaped the attention of the DIPNR when it negotiated the sale price of those properties with their respective owners. 74 Again, we were not taken to any material that suggested by way of submission that the appellant had contended that such a discount or set-off in the "before" valuation should have been made to the rates per square metre applied to the respondents' land in the "before" valuations of the two valuers. I would therefore reject this challenge which, in any event, does not in my opinion point to any relevant legal error.

Did the primary judge erred in his determination of the value of the respondents' land before acquisition? - Grounds of appeal 3 and 5 75 In its written submissions (at [30]) the appellant submitted that the "before" value of the respondents' land should have been calculated "as the amount that the [DIPNR] would have paid and the former owners would have agreed to accept for land subject to SREP 31 with the benefit of such existing use rights as the owners enjoyed. The value of the land before acquisition was not be assessed as though it were land zoned for industrial uses or as though it had an agreed underlying zoning for industrial uses." 76 This error came about, so it was contended, because his Honour incorrectly applied the rate derived from the Trivett Street sales directly to the valuation of the respondents' land before acquisition. 77 It was thus submitted by the appellant that any process of owner initiated acquisition of the respondents' land (pursuant to clause 19 of SREP 31) would have involved a process of negotiation with the DIPNR in which it was far from certain that it would agree to pay an amount equivalent to the value of the land as if it were land zoned for industrial purposes. Accordingly, the rate derived from the Trivett Street sales should have been discounted to reflect the risk that the DIPNR would not agree to purchase the respondents' land on the basis that its underlying zoning was for industrial use. 78 Reliance was placed upon the statement of Kitto J in Royal Sydney Golf Club v Federal Commissioner of Taxation (1957) 97 CLR 379 at 391. In that case, his Honour expressed the view that a notional intending vendor and purchaser, treating about the appellant's land on the relevant date and fully informed as to all relevant considerations, would have proceeded in discussing price on the footing that there was only a slender chance that it would ever become permissible to use any part of the land for other than recreational purposes, this being the only purpose for which the land could be used in accordance with the restrictions contained in the relevant planning ordinance. The issue in that case was whether the land had any potential for a higher and better use. 79 However, the issue in Royal Sydney Golf Club was entirely different to that in the present case. In this case, the primary judge and the valuers were concerned to value the retained land, and for that matter the respondents' land before acquisition, upon the assumption that the DIPNR had acquired that land. The DIPNR was required by law to disregard the public purpose for which it was acquiring it. In other words, his Honour and the valuers were required to determine the "underlying zoning" of the respondents' land as well as the retained land upon the assumption that the restrictive provisions of SREP 31 were to be disregarded in accordance with the Pointe Gourde principle. 80 It is true, however, that in this context a question could theoretically have arisen as to the underlying zoning of the respondents' land, had there been any real doubt that it would have been other than industrial. Leaving aside for the moment the effect of the primary judge's rejection of MFI "E", the appellant, as I have already observed, made a number of submissions to his Honour to the effect that the rate per square metre deduced from the Trivett Street sales should be discounted to take account of the risk that the DIPNR would not be prepared to purchase the respondents' land in the "before" valuation upon the basis that its underlying zoning was industrial. 81 His Honour rejected this submission upon the basis that, in their "before" valuation as set out in Exhibit "R", the two valuers had utilised the two Trivett Street sales as constituting comparable sales evidence which could be directly applied to the respondents' land so that there was neither need nor justification to provide any discount or allowance for risk. His Honour's reasons for this conclusion were as follows: "164 In my judgment, no case for any allowance for risk as urged by the [appellant's] submission has been made out. This is essentially so, because of the availability in the present case of the comparable sales evidence provided by the two Trivet Street sales. In respect of that evidence, it is reasonable to infer that the prices paid for the two Trivet Street properties reflected 't he views of the vendors and the purchaser as to what the vendors could be likely to recover in an action for compensation following resumption, discounted perhaps to some extent by the knowledge that some legal and other expenses incurred in such an action would have to be borne by the dispossessed owners and that there would be some delay in having compensation assessed and paid, rather than to reflect a market selling price agreed upon between a willing vendor and a willing purchaser….. ' per Hardie J in Woollams v The Minister (1957) 2 LGRA 338 at 347 when discussing the use that he would make of sales to the Water Board (the acquiring authority with powers of resumption) of comparable properties to the resumed property situate in the valley to be flooded by the Warragamba Dam project. 165 In other words, the sales evidence provided by the two Trivet Street sales may reasonably be taken to represent negotiated sale prices that reflect, not only the attributed underlying ' industrial ' zoning, but which were also cognisant of the responsibility under cl 19 of SREP31 of the corporation constituted under the EP&A Act, s 8 to acquire the land at market value , and also of the capacity of the Corporation under the Just Terms Act to compulsorily acquire such lands. 166 The sales evidence provided in the present case by the two Trivet Street comparable sales entirely eliminate any need to make an allowance for the risks identified in Cannavo (which of course did not include any risk in respect of the underlying zoning). Moreover, it is the fact (commonly recognised by the Valuers) that the Trivet Street sales are comparable sales, capable of application to the [respondents'] land by direct comparison, that eliminates the need to make any allowance for risks involved in the determination of the underlying ' industrial ' zoning of the [respondents'] land for the purpose of determining its market value. 167 The [appellant's] final attack on Mr Dobrow's approach (alleged in par 45 to be a ' serious flaw ') is directed at his " after " valuation where it is submitted that ' Mr Dobrow has inexplicably refused to take into account the uplift in value of such land that must follow after the construction of a new road like the M7 '." 82 Subject only to the issue concerning the rejection of MFI "E", in my opinion his Honour's reasoning for rejecting that it was necessary to provide any discount for risk with respect to the underlying zoning of the respondents' land prior to acquisition was unexceptionable and discloses neither error of law nor valuation principle. His findings were clearly findings of fact and they are, therefore, not amenable to appeal to this Court. 83 In oral argument, the appellant's challenge to his Honour's rejection of its submission that he had failed to discount Mr Dobrow's "before" valuation for risk wholly rested upon its challenge to the rejection by his Honour of MFI "E". I therefore turn to consider that issue.

Did the primary judge err in rejecting MFI "E"? - Ground of Appeal 4 84 MFI "E" is dated 3 December 2004. It commences by setting out Mr Preston's statement in Exhibit "R", which I have emphasised in [29] above. It then continues in these terms: "I still adhere to the above view but I omitted in the Joint statement to express a view as to the appropriate discount factor which should be applied to the available sales evidence to take into account the differences between those comparable sales and the subject land. The comparable sales, which I refer to, are that of the two sales in Trivett Street. Based on the sales evidence I would adopt a $150 pm² for the subject property as a starting point. However, I now see the need to adjust this rate to be directly comparable based on applying a discount factor. I have now considered the appropriate discount factor, which should be applied. I consider that the discount factor to be applied is 55% for the following reasons: · Discount attributable to size, 20%; · Discount attributable to risk of achieving industrial land value in an acquisition under SREP 31 where SREP 31 is set aside in the resumption process 35%; and · Total Discount, 55% The 55% discount factor is a reasonable valuation estimate only, I concede that the exact amount of the discount factor to be applied is ultimately a matter for the Court having regard to the planning evidence and legal issues relating to the operation of SREP 31." 85 At the outset, one can ignore Mr Preston's contention that there should have been a discount attributable to the difference in size of 20%. This is because at Black 1/118 E-F and N-P, Mr Preston gave evidence that his striking a rate of $150/m² for the Trivett Street sales was predicated on size, in that the land the subject of the sales was smaller in size than the 10 hectares of the respondents' land. He further agreed that that differential in size required an adjustment in the use of the sales evidence. There is therefore no doubt that he took the differential in size between the properties the subject of the sales and the respondents' land into account but that he had forgotten that he had given this evidence when he suggested a further discount of 20% attributable to size in MFI "E". 86 The primary judge set out his reasons for the rejection of MFI "E" at [27]-[33] of his judgment. It was tendered on 3 December 2004 at the very end of the hearing. By this stage, the hearing was concluded except for the parties' final addresses. The respondents objected to the admission of this statement upon three grounds. First, the statement was far too late. Second, it involved Mr Preston recanting from his evidence as set out in Exhibit "R" in circumstances where, under the Land and Environment Court's Practice Direction No. 22, a party was not entitled to adduce expert evidence inconsistent with any matter agreed by expert witnesses in a joint report without the leave of the Court. There can be no doubt that, at least inferentially if not expressly, the valuers had agreed in Exhibit "R" that there was no necessity that they provide a discount for risk with respect to the underlying zoning of the respondents' land in the "before" valuation and, according to Mr Preston in his "after" valuation, the highest and best use of the retained land was still for industrial purposes. That was the underlying zoning he accepted without any discount for risk. 87 The third basis upon which the respondents objected to the admission of this evidence was that, if it were admitted, it would require that the whole case be substantially re-examined and possibly re-opened. Moreover, the respondents would need to reconsider their earlier position of abandoning their reliance upon valuation approach (c) (see [13] above) based upon the planning assumption of a change of the existing use of the respondents' land to a higher one, given that that basis of valuation may have exceeded the value based upon the application of SREP 31 if Mr Preston's discount factor was to be applied to his value in Exhibit "R" based on approach (a). 88 It is interesting to note that in advancing its arguments for the admission of MFI "E" into evidence, the appellant contended that it was duty bound to bring Mr Preston's revised opinion to the Court's attention as it had the practical effect of significantly increasing the value of the acquired land from Mr Preston's and, therefore, the appellant's viewpoint based upon the application of SREP 31. This was because on approach (a) Mr Preston had determined that the market value of the acquired land in Exhibit "R" was $59,360 whereas in MFI "E" it increased to $1,618,330. 89 The primary judge set out his reasons for rejecting the tender in [33]. First, he was satisfied that no prejudice would be caused to the appellant's case by not admitting the document into evidence. Second, that prejudice would be caused to the respondents' case if it was admitted, particularly given that there would be a serious dislocation of the hearing, which had, by then, virtually been concluded. Third, that prejudice would be caused to the efficient management and discharge of the Court's business if the deliberately abandoned approach (c) based upon a change in existing use to another higher use had to be re-opened. 90 Having noted that the material did not significantly advance the appellant's case, his Honour observed that the issue of a discount for risk could be legitimately raised by the appellant in its final address (as in fact it was) without the need to rely upon valuation opinion evidence to support any such contention. 91 With regard to that final point, the appellant points to [158] of his Honour's judgment, in which the primary judge turned to the appellant's submission that there should be a significant deduction made to Mr Dobrow's valuation to allow for the risk that the DIPNR, upon acquisition of the respondents' land pursuant to clause 19 of SREP 31, would not pay a price reflecting an underlying industrial zoning. His Honour observed that the submission was "not supported by any valuation evidence" although he noted that had he admitted Mr Preston's belated revision of his valuation into evidence, that revision included an allowance of 35% for such a risk. 92 Accordingly, the appellant submitted, firstly, that MFI "E" would have provided the valuation evidence which his Honour said was not available to support the appellant's submission on the issue of risk. Secondly, the appellant submitted that his Honour's rejection of the need for a discount for risk, being based on the valuers' commonly held position that the two Trivett Street sales were the most comparable sales governed by SREP 31 and were capable of being applied to the respondents' land "by direct comparison", involved a factual error. This was so because, as a consequence of the view expressed by Mr Preston in MFI "E", the two valuers, notwithstanding Exhibit "R", were no longer ad idem on this issue. In other words, they no longer adopted a common position. 93 In my view it is not open to the appellant to rely on his Honour's statement in [158] of his judgment that there was no valuation evidence to support its submission with respect to a discount for risk if his Honour was otherwise entitled to reject MFI "E". The same comment applies to his Honour's rejection of the appellant's contention with respect to risk on the basis of the valuers' commonly held position as set out in Exhibit "R". Accordingly, the appellant must establish that his Honour's discretion to reject MFI "E" in some way miscarried in the sense expounded in House v The King (1936) 55 CLR 499 at 504-505 and, for that purpose, cannot rely ex post facto on the rejected evidence as if it had been admitted in the first place. That would constitute an impermissible "boot straps" argument. 94 It was therefore submitted that his Honour's discretion had miscarried in that, firstly, he allowed extraneous or irrelevant matters to guide or affect him. Such matters included the supposed prejudice to the management of the case if the abandoned issue of value based upon a change in existing use to another higher use had to be reopened, as it was asserted that any such consequence was imaginary. Second, it was argued that it was unreasonable, plainly unjust or substantially wrong for his Honour to have concluded that the rejection of the report would cause "no prejudice" to the appellant's case or that the material in the report "did not significantly advance" that case. 95 With respect to the latter submission, it was contended that, if MFI "E" had been admitted into evidence, it would have provided some evidentiary alternative to Mr Dobrow's unqualified application of the undiscounted rate derived from the Trivett Street comparable sales. 96 It is common ground that in the concurrent evidence of the valuers recorded at Black 1/107-190, Mr Preston never suggested that there should be a discount for risk in applying the Trivett Street sales to the "before" valuation of the respondents' land. At Black 116U, he expressly said that he agreed with Mr Dobrow that those sales were "probably the best evidence to use in support of the subject property." 97 During the course of their concurrent evidence, the appellant's counsel cross-examined Mr Dobrow. At Black 1/160X-161O it was suggested to Mr Dobrow that even if the DIPNR treated the respondents' land as having an underlying industrial zoning, as a matter of valuation methodology it would have been appropriate to apply a discount to the value derived by reference to at least two factors: the first being the risk that the DIPNR would not view the respondents' land as having that underlying zoning, and the second being the risk involved in the whole administrative and legal process requiring the DIPNR to acquire the respondents' land under clause 19 of SREP 31. 98 Mr Dobrow's response to this question was that even if there were any such risk elements, they were already built into the prices paid by the DIPNR for the land the subject of the two Trivett Street sales. As such, it was unnecessary when applying the analysed rate per square metre of those sales to discount that rate further in respect of the same risks because doing so would, in effect, be to double count. This last part of Mr Dobrow's answer was then challenged upon the basis that whatever the position with respect to the negotiated sales of the two Trivett Street properties, it was still appropriate to apply the risk factor when determining the underlying zoning upon which the DIPNR would be prepared to treat with the respondents with respect to the purchase of their land. 99 Immediately before the luncheon adjournment on 26 November 2004, the respondents' senior counsel referred to the above line of cross-examination, suggesting that it was intended to found a submission that, based on legal and valuation principles, approach (a) was not available for adoption by the Court. Senior counsel then said (at Black 1/166X): "So if my friend is going to make that submission and Mr Preston is going to make any retraction in regard to the way that he's studied this land, then the matter would have to be reconsidered your Honour." 100 Senior counsel then invited the appellant's counsel to consider his position over lunch and suggested that Mr Preston would have an opportunity think about it as well. The luncheon adjournment was then taken. 101 When the parties returned to Court after the luncheon adjournment, the appellant's counsel informed his Honour (at Black 169) that his submission, at the end of the day, would be that the approach whereby the Trivett Street sales were regarded as directly comparable in respect of the value of the respondents' land was not in accordance with the approach that should be applied in determining the value of that land as a matter of law and valuation methodology. He submitted that that contention was "well and truly out in the open" after his cross-examination of Mr Dobrow. 102 Counsel submitted that the proper approach to the valuation of the respondents' land under SREP 31 was to consider a hypothetical market transaction relating to that land which would be affected by what a purchaser might think about the cost of acquiring clause 19 rights. The determination of the value of those rights involved a question of planning principle and the written evidence of the planning experts went to that question, namely the underlying zoning. There was also the additional question of what the DIPNR would have informed a potential purchaser of the respondents' land who enquired as to the basis upon which it would pay compensation. 103 Although there had not been any joint report from the town planners about the appropriate underlying zoning of the respondents' land because his Honour had already ruled that SREP 31 was the relevant planning control, the appellant's counsel informed his Honour that he was not seeking to entirely discard valuation approach (a). This was because whatever the rate was per square metre that one adopted for the purpose of the argument, such as Mr Preston's 150 m², the appellant's submission would be that Mr Preston had applied the correct approach in considering that far from their being any adverse effect after acquisition, there was an enhancement of value. 104 His Honour then accepted (at Black 1/169 S-T) that in the light of that submission there was no need to invite Mr Preston to recant or reconsider what he had subscribed to in Exhibit "R". However, the primary judge said that would not preclude the appellant, from advancing the submission its counsel had foreshadowed in the course of his cross-examination. Accordingly, no suggestion was made that Mr Preston intended to in any way recant or vary the approach he had adopted in Exhibit "R" by seeking to suggest either that there should be a discount attributable to the risk of achieving industrial land value in an acquisition by the DIPNR under SREP 31 or what that discount factor ought to be. 105 After the conclusion of Mr Dobrow's cross-examination, his Honour asked Mr Preston whether he wished to say anything in response. The primary judge asked him whether he was suggesting that his use and analysis of the Trivett Street sales indicated that those bargains had been struck on a misconceived basis. Mr Preston informed his Honour that the sales were acquisitions under clause 19 and, being lands adjacent to the Wetherill Park Industrial Area, were therefore assessed for compensation on the basis of an industrial zoning. His Honour then asked Mr Preston whether he accepted that they constituted the best market evidence of the value of the respondents' land, given the basis upon which the prices of those sales were struck. Mr Preston responded that he wished for an opportunity to think a little more about that given that those sales did not reflect a value commensurate with the permissible uses under clause 7.3 of SREP 31. However, Mr Preston accepted that they were market transactions, which were the stock-in-trade of a valuer's evidentiary material. 106 His Honour then suggested to Mr Preston that if he had "some qualms" about approach (a), he would be grateful to hear from him as soon as he could resolve those qualms in his own mind, a proposition with which Mr Preston agreed. Nevertheless, it is apparent from the transcript that Mr Preston did respond in a manner which indicated that he had no qualms about the basis upon which he had used the Trivett Street sales in assessing the "before" valuation of the respondents' land. 107 In my opinion, no discernible error of the relevant kind has been demonstrated by the appellant with respect to the reasoning of the primary judge in rejecting the tender of MFI "E". There is no doubt that prior to 3 December 2004, Mr Preston was given more than one opportunity to reconsider his position, particularly in the light of the cross-examination of Mr Dobrow in Mr Preston's presence, and which directly raised with Mr Dobrow the question of a discount for the risk of not obtaining a price from the DIPNR for the respondents' land prior to acquisition based upon an underlying industrial zoning. For all intents and purposes, Mr Preston simply never foreshadowed the need for any such discount prior to the date of MFI "E". 108 Furthermore, in my opinion his Honour was correct when he suggested that there was nothing in MFI "E" that could be regarded as significantly advancing the appellant's case. In particular, Mr Preston did not set out any reasons in MFI "E" as to why he suddenly considered that there should be a discount of 35% attributable to the risk of achieving industrial land value in an acquisition under SREP 31 where the latter was required to be disregarded "in the resumption process". Given the nature of the surrounding land uses, it is difficult to imagine any other possible zoning of the respondents' land other than industrial and no such other zoning was suggested by Mr Preston either in his evidence generally or in MFI "E". Equally, the discount rate of 35% seems to be entirely arbitrary and, again, was not supported by any reasoning process. In fairness to Mr Preston, he noted that it was "a reasonable valuation estimate only", it being ultimately a matter for the Court to determine having regard to the planning evidence and the legal issues relating to the operation of SREP 31. 109 Accordingly, for the foregoing reasons I am of the opinion that there was no miscarriage of the primary judge's discretion in refusing to admit MFI "E" into evidence. I would therefore reject the appellant's submission that his Honour erred in rejecting its tender. 110 On the other hand, even if the primary judge was in error in rejecting MFI "E", it does not necessarily follow that this Court would set aside his Honour's assessment of compensation and would exercise its discretion pursuant to s57(2) of the Land and Environment Court Act 1979 to remit the matter to the Land and Environment Court for further determination. The latter would require the primary judge to consider the weight, if any, he would give to Mr Preston's opinion. In my view it is patently clear from his Honour's judgment that in the circumstances, he would not have acceded to Mr Preston's assertion that a discount for risk should be applied. 111 As a consequence of Part 51 rule 23(1) of the Supreme Court Rules 1970, this Court has no power to order a new trial on the ground of error of law or on any other ground unless it appears that the error has occasioned some substantial wrong or miscarriage. In this respect, the relevant error, to amount to such a miscarriage, must have deprived the successful party of the possibility of a successful outcome. In order to negate that possibility it would be necessary for the Court to find that a properly conducted trial could not have possibly have produced a different result: see generally Stead v State Government Insurance Commission (1986) 161 CLR 141 at 145, 147; Escobar v Spindaleri (1986) 7 NSWLR 51 at 57-58; Peakhurst Inn v Fox [2004] NSWCA 74 at [34]-[35]. 112 Although the Land and Environment Court Act 1979 contains no equivalent to Part 5 rule 23(1) of the Supreme Court Rules and, in all respects, remitter may not necessarily be the equivalent of a new trial, this Court nonetheless has a discretion under s57(2) as to whether or not to remit the matter to the Land and Environment Court for further determination when error of law is established. Given the need for finality in litigation and the desire to avoid the hardships of a new trial or even a partial new trial such as might occur on a remitter, I see no reason in principle why this Court should exercise its discretion to remit a matter for determination by the Land and Environment Court unless it is satisfied that the relevant error of law which has been established could reasonably (or possibly) be supposed to have had some influence upon the result: cf Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208 per Basten JA at [167]-[168]; Conway v The Queen (2002) 209 CLR 203 at 216 [27], [29]. 113 Accordingly, I would favour the view that an order for remitter should only be made if such a remitter could possibly produce a different and more advantageous result for the successful party on the appeal. In the present case, I would not be satisfied in all the circumstances that the admission of MFI "E" could possibly, let alone reasonably, produce a different result in the Land and Environment Court if the matter were remitted to it in order for Mr Preston's evidence as contained in that document to be taken into consideration. 114 Nevertheless, I am of the opinion that no error on the part of the primary judge has been demonstrated in his rejection of MFI "E". It is therefore unnecessary to reach a conclusion as to whether this Court should exercise its discretion under s57(2) of the Land and Environment Court Act 1979 to remit a matter to the Land and Environment Court for redetermination where error of law is established, on the same principles as apply to the ordering of a new trial.

Conclusion 115 In my opinion, the various challenges by the appellant to the primary judge's decision have failed. I would therefore propose that the appeals be dismissed with costs. **********

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