Stephen Anthony Horton and Kay Elizabeth Horton v Wyong Shire Council

Banno and Another v Commonwealth of Australia and Another 81 LGERA 34; Kerry v State Transport Authority (1985) 55 LGRA 273; Minister Administering the Heritage Act 1977 v Haddad (1988) 67 LGRA 438; CASES CITED: Roberts v Commissioner for Main Roads (1987) 63 LGRA 428 ; Robertson v Commissioner for Main Roads (1987) 63 LGRA 420; Stephen Anthony Horton and Kay Elizabeth Horton v Wyong Shire Council [2004] NSWLEC 571, unreported; Terrence John Fitzgerald and Wendy Patricia Fitzgerald v Blacktown City Council [1994] NSWLEC 40, 28 March 1994, unreported

APPLICANT Mr J J Webster SC with M/s M R M Carpenter (Barrister) SOLICITORS Taperell Rutledge LEGAL REPRESENTATIVES:

RESPONDENT Mr P C Tomasetti (Barrister) SOLICITORS Colin Biggers and Paisley

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

31582 of 2003 Stephen Anthony Horton and Kay Elizabeth Horton v Wyong Shire Council (No.2)

JUDGMENT 1 Talbot J: In a reserved judgment delivered on 15 October 2004 (Stephen Anthony Horton and Kay Elizabeth Horton v Wyong Shire Council [2004] NSWLEC 571, unreported) I determined that the amount of compensation in respect of the market value of land acquired by Wyong Shire Council ("the respondent") on 29 August 2003 was $1,350,000. Determination of the elements of compensation for solatium, disturbance and costs was reserved pending further argument and submissions. Solatium 2 The respondent does not dispute that the subject property was the principal place of residence for Stephen Anthony Horton and Kay Elizabeth Horton ("the applicants") at the date of acquisition on 29 August 2003. The maximum amount of compensation in respect of solatium is presently prescribed pursuant to s 60(2)(b) of the Land Acquisition (Just Terms Compensation) Act 1991 ("the Just Terms Act") and the applicants are claiming compensation in the full amount. 3 In assessing the amount of compensation for non-financial disadvantage resulting from the necessity of a person whose land is acquired to relocate all relevant circumstances are to be take into account pursuant to s 60(3) including:-

(a) the interest in the land of the person entitled to compensation, and (b) the length of time the person has resided on the land (and in particular whether the person is residing on the land temporarily or indefinitely), and (c) the inconvenience likely to be suffered by the person because of his or her removal from the land, and (d) the period after the acquisition of the land during which the person has been (or will be) allowed to remain in possession of the land. 4 The second applicant Kay Elizabeth Horton was born and raised on the subject property and she and her husband purchased it from her parents in about 1980. They have lived there ever since with their family. Mrs Horton's paternal grandfather originally owned the 25 acres of land which the subject property formed part and it was subsequently divided up between her father's family. As a third generation of the Mascord family, which have lived at this location continuously for over 85 years, Mrs Horton has a particular attachment to the property and clearly both applicants would have preferred to stay there. 5 The historic approach to the assessment of compensation payable for solatium was summarised in Terrence John Fitzgerald and Wendy Patricia Fitzgerald v Blacktown City Council [1994] NSWLEC 40, 28 March 1994, unreported, as follows:- Historically solatium refers to a sum of money paid over and above the actual damages as solace for injured feelings and to cover the distress caused by the taking of the persons home. Pursuant to s 60(3)(d) the period after the acquisition of the land during which the person is allowed to remain in possession is one of the relevant circumstances to be taken into account in assessing the amount of compensation in respect of solatium. The non-financial disadvantage referred to in s 60 is related to the inconvenience factor attributable to the move. This is made further apparent from the circumstances included in s 60(3)(a),(b) and (c) which appear to have regard to the extent of physical and emotional attachment that a residential occupant has to the land. The extent of the loss or inconvenience will be the greater according to whether the occupier is an owner or a tenant and to their length of occupation. The assessment of such imponderables, which are not specifically provable, means that each case should be decided on its own merits without reference to a gradation by assessing it against other cases.

6 The above passage is itself a reflection of how Perrignon J in Robertson v Commissioner for Main Roads (1987) 63 LGRA 420 and Cripps J in Roberts v Commissioner for Main Roads (1987) 63 LGRA 428 had earlier approached the concept for assessing compensation in respect of solatium. 7 Both Mr and Mrs Horton had a relevant interest in the land as owners and particularly in the case of Mrs Horton, had resided on the land for a significant length of time. No special concession was extended to them in respect of the continued occupation of the land during the period after acquisition. The evidence from Mr and Mrs Horton is that there is a real prospect they will not be able to re-establish a home at a location which suits them in terms of convenience to the same extent that the subject property did before they vacated it in October 2003. 8 Each claim for solatium is to be considered on its merits. The maximum amount of compensation prescribed by s 60(2) is not to be regarded as the highest point in a gradation or scale. If the Court considers that the amount of compensation payable could be justly and reasonably assessed at a sum greater than the maximum, then nevertheless the legislation imposes an upper limit. Mr and Mrs Horton satisfy the relevant circumstances specifically identified in s 60(3). The fact that the compensation attributable to market value of the land has a component that may be greater than the value of the property assessed on the basis of a rural residential use, it is not a relevant criteria for assessment of the compensation payable to Mr and Mrs Horton on this account. The outcome of the assessment of market value by the Court cannot be regarded as some sort of windfall that might (although not necessarily) mitigate against the payment of damages for solatium, as Mr Tomasetti, who appears for the respondent, has suggested it does. 9 The evidence is that Mr and Mrs Horton have yet to identify an alternative property as their future home, notwithstanding sustained efforts to do so. 10 I am satisfied, having regard to the historical association of both applicants with the site, the duration of that association and the untimely disruption to the enjoyment and convenience of using the property as a place of residence, that additional compensation allowed at the maximum sum of $19,665 is less than the amount I would have determined absent the restriction imposed by s 60(2). I therefore assess the amount of compensation payable for solatium at the maximum sum of $19,665 for the purposes of s 55(e) of the Just Terms Act. Disturbance 11 The parties have agreed that the following amounts are reasonable costs to be paid as loss attributable to disturbance pursuant to s 59(a), (b) and (e) as legal costs and valuation fees:-

1. Legal costs up to commencing $4,076 Proceedings (Dec.03)
2. Disbursements $ 200
3. Legal costs on purchase $2,500
4. Estimated disbursements on purchase $ 800
5. Valuation $8,000 Sub total $15,576 + GST $ 1,557.60 Total $17,133.60 Stamp duty payable on the purchase of an alternative property $59,740.00 Total $76,873.60 12 Furthermore the respondent accepts responsibility for the following costs relating to relocation:- Truck hire $124.69 Box trailer rental $ 55.00 Telephone connection fee $ 59.00 Agent's fee $ 15.00 Packing boxes 10 @ $4.50 each $ 45.00 Fuel $ 60.00 Labour $240.00 Mail redirection (12 mths @ $9 per mth) $108.00 Total $706.69 13 Two further items remain in dispute, namely:-

1. Rent paid pending acquisition of alternative property as a relocation cost pursuant to s 59(c) of the Just Terms Act $ 32,400
2. Cost of a removalist from a move from rented premises to a permanent home in due course $ 2,277

14 The following dates are relevant:- · Date of compulsory acquisition 29 August 2003

· Date applicants ceased to occupy property 14 October 2003 · Date of commencement of proceedings 19 December 2003 · Advance of $864,886.50 by respondent to applicants 10 February 2004

· Payment of costs expenses and disbursements by the applicants as legal costs and witnesses expenses in the sum of $190,150.64 21 December 2004

15 After payment of costs and expenses as well as the principal and interest owing to a mortgagee, the balance of compensation left available for reinvestment out of the advance payment is $540,549.82. The evidence does not disclose whether any further compensation payment has been made since judgment was delivered on 15 October 2004. The argument has proceeded on the basis that the relevant amount available to the applicants as capital available for the purchase of an alternative property to date is the abovementioned sum of $540,549.82.

16 The applicants' claim is that it is reasonable for them to be reimbursed for rent paid pending the acquisition of an alternative property and that it is also fair that they be indemnified for the costs of removal from the temporary accommodation to their new and ultimate alternative place of residence. The cost of renting temporary premises continues to be $400 per week. A quote has been obtained from a removalist in the sum of $2,277. 17 The evidence from Mrs Horton is that the decision to move in October 2003 resulted from pressure by the Council to commence work on the playing fields and the prospect that the health of Mr Horton, who is suffering from non Hodgkins lymphoma, would further deteriorate thereby increasing the potential for stress from vacating the family home at a later date. They have continued to search for a property to purchase as their new home and expect to be in a position to acquire a suitable property within two months of the finalisation of these proceedings for "a purchase price in the vicinity of $1 million." 18 The claim arises under s 59(c) of the Just Terms Act that allows for "financial costs reasonably incurred in connection with the relocation" of the persons entitled to compensation as loss attributable to disturbance. Mr Tomasetti has referred me to a decision of the Supreme Court of South Australia to make the point that to award compensation for the payment of rent "would smack of double compensation" (see Kerry v State Transport Authority (1985) 55 LGRA 273 at 280. The facts in Kerry are complicated by the different statutory regime applicable to the assessment of compensation in South Australia at the time and a separate allowance made for loss on a rising market after the date of acquisition. The case was distinguished on the same basis by the New South Wales Court of Appeal in Minister Administering the Heritage Act 1977 v Haddad (1988) 67 LGRA 438, reversing the approach taken by Stein J at first instance. 19 Whilever Mr and Mrs Horton reside in the rented premises they do not incur the inherent costs and overheads, such as rates and maintenance, associated with ownership of property. Furthermore, interest may be earned on the balance of the advance payment they have available for investment from time to time and statutory interest will be received on the compensation still outstanding, pending final determination of the claim. Arguably they could be saving on a commitment to interest on future borrowings. Interest has been saved on the mortgage debt repaid out of the advance payment. On balance in the circumstances it is not reasonable that they receive a separate payment of compensation to reimburse the rent payments made pending acquisition of an alternative property. 20 I nevertheless take a different approach to the claim for payment of removalist expenses to be incurred on a second move. Mr and Mrs Horton managed to minimise the cost of the first removal to the temporary rental accommodation by enlisting the assistance of their two children and by hiring a Pantec truck and trailer at a nominal cost. I believe it is reasonable for them to be reimbursed for the actual cost of the second move. It is a cost they will incur solely as a consequence of the necessity to relocate following the compulsory acquisition and the pressure from the Council to make the property available for the public purpose. In those circumstances the costs, when incurred, will be financial costs reasonably incurred.

21 The fact they have not incurred to date means the amount cannot be settled at this time as an actual disbursement. Nonetheless, as a future cost likely to be incurred when final settlement of the total compensation claim is made by the respondent, the potential cost arguably falls within s 59(f) as a cost relating to the actual use of the land by the dispossessed owner as a direct and natural consequence of the acquisition. 22 The land was used as a permanent residence. A direct and natural consequence of the acquisition was the need to vacate the premises within a shorter time than that which might generally be regarded as reasonable for finding an alternative permanent residence. I consider it reasonable that the applicants saw fit to move into temporary accommodation to enable them in the meantime to gain a proper understanding of their ultimate financial position before making a commitment and also sufficient time to search for, negotiate and settle on the purchase of the new house. I propose to allow the sum of $2,000 being the amount Mr Horton deposes to as the approximate quotes he has received from a removalist, including estimated associated costs. Legal costs 23 Starting from the position that at the time of commencement of the class 3 claim in December 2003 the respondent's assessment of market value was $895,000. That value was subsequently maintained in the Points of Assessment served 5 February 2004. The applicants have succeeded in achieving a better result as a consequence of the litigation. 24 The applicants' claim varied from time to time according to the successive valuation reports obtained and served on the opponent. The figures for market value of the land quoted by the applicants' valuer depended upon the determination of various issues raised by the parties and ranged up to $4,100,000. The highest figure put forward by the respondent's valuer was $1,280,000 in July 2004. Points of Defence filed 21 September 2004, after the hearing, but before judgment, admitted the market value as $1,260,000 following a joint conference between the expert valuers in accordance with directions progressively made by me pursuant to the Expert Witness Practice Direction. 25 The fact that the applicants' case was argued on alternative bases does not thereby preclude a costs order. The question of whether the land would have been rezoned for residential use prior to acquisition but for the proposed public purpose involved an investigation which assisted laying the foundation for an understanding of the position that led to the decision to assess market value on the potential for a rezoning and release within 5 years after the date of resumption. The evidence was not entirely wasted or set aside. It must also be observed that the respondent raised new issues for the first time during the hearing regarding the development potential of the land that persuaded even its own consultant expert town planner to change his view. The new issues relied upon matters that were at all relevant times within the knowledge of Council officers.

26 Although the adversarial nature of the proceedings may have encouraged the applicants' legal representatives to show a degree of exuberance in the projection of their clients claim, nevertheless it cannot be said the claim was vexatious, dishonest or that presentation placed unnecessary burdens on the parties or the Court (Banno and Another v Commonwealth of Australia and Another 81 LGERA 34). The issues were clearly articulated and addressed. Although the amount recovered by the applicants was less than aspects of their claim, it nevertheless reflected a consideration and determination based on facts and circumstances that were relevant. The primary determining factor was the expected date of release for residential development. 27 I do not agree, as the respondent submits, that the respondent should not have to pay the costs of the proceeding as the applicants sought to reject the compensation offered, argued for a different sum and lost. It is correct that the applicants rejected the compensation offered (which did not aspire to a sum commensurate with the Court's determination until the costs of preparing for hearing were already incurred). They argued for a different sum and were unsuccessful in supporting the highest claim. Nonetheless, but for taking the steps they did by pursuing the objection to the respondent's offer they achieved a significantly better result. 28 It is only in special cases that the Court will deprive a dispossessed owner of the benefit of a costs order particularly when the amount recovered is greater than that offered by the resuming authority at any time and significantly greater than any amount offered prior to the litigation. 29 I am satisfied in the circumstances of this case that Mr and Mrs Horton should have the benefit of a costs order against the Council. Orders

1. Compensation payable by the respondent to the applicants is determined in accordance with Part 3, Division 4 of the Land Acquisition (Just Terms Compensation) Act 1991 in the amount of $1,449,522.29 comprising:- · Market value of the land $1,350,000.00 · Loss attributable to Disturbance and Valuation and Legal costs and disbursements $76,873.60 Relocation costs and financial costs $ 2,983.69 $ 79,857.29 · Solatium $ 19,665.00 Total $1,449,522.29
2. The respondent is ordered to pay the applicants' costs in relation to the proceedings.
3. Exhibits may be returned.

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