(a) the proposition that the provision of an on-site bus service for this location would be inconsistent with the SEPP 5 Guide as the Land is not on the urban edge and therefore would not satisfy the objective of cl 12(2)(b); and
(b) a concern that although Walker's November 2001 development application provides a partially accessible outcome in terms of eleven lifts and ramped pathways, the associated plans "do not show, conclusively, that continuous access was possible or would be provided along the northern foreshore line", and hence there is possible non-compliance with clause 25(f) of SEPP 5.
95 Walker submits that no hypothetical prudent purchaser, willing to acquire the Land, would take Mr Relf's concerns seriously.
96 I agree that Mr Relf's cl 25(f) non-compliance point is insubstantial. As he said in cross-examination, it could be met by appropriate design.
97 As regards Mr Relf's other point concerning an on-site bus service, Walker submits, and I accept, that the deletion, before the acquisition date, of any reference to "public" transport in cl 12 promoted greater flexibility when considering the mode of transport, and the SEPP 5 Guide's expressed "preference" for public transport did not preclude other options.
98 As the evidence unfolded in relation to cl 12 in the joint experts report of Ms O'Donnell and Mr Relf and in oral evidence, the focus of Mr Relf's concerns seems to have been that an on-site bus needed to provide a high frequency service the cost of which he thought would be prohibitive, and whether its satisfactory operation could be guaranteed in the long term.
99 There is evidence, which I accept, of on-site bus services working satisfactorily at a number of retirement villages in Sydney suburbs, some of which have been operating for more than 15 years. Mr Relf was concerned that longevity of use was more likely in a retirement village than in a self-care development such as that proposed on the Land, where units were on-sold and that was the end of the developer's involvement. I think that longevity of use would be of concern to a consent authority.
100 In cross-examination, Mr Relf conceded that he had provided support for applications for SEPP 5 developments that had relied upon bus transport to provide access to services. He added that some years ago he had concluded that he should only support on-site bus services for larger developments. It seems to me that the proposed development on the Land, whether the 83 units proposed in Walker's 2001 development application or the 138 units now proposed, is a larger development.
101 An on-site bus service would be unlikely to have the attractions of regularity and cheapness of public transport. It also does not sit comfortably with one of the express aims of SEPP 5, to make efficient use of existing infrastructure and services, in this case public transport. Nevertheless, given the deletion of reference to "public" transport in the amendment to cl 12, the inferior status of the SEPP 5 Guide and the fact that that Guide merely refers to a "preference" for public transport, I conclude that the properly advised hypothetical buyer and seller, at the acquisition date, would regard it as likely that cl 12 could be satisfied by the provision of a suitable on-site bus service, while allowing for some risk that that it could not be and for the risk that the consent authority may take a view of what was suitable that could present difficulties.
102 The Authority submits that other matters affecting the hypothetical parties' perception of the risk of obtaining SEPP 5 development consent are the Land's general site constraints discussed earlier including: (a) the poor quality of pedestrian access on roads in the surrounding area; (b) the steepness of the Land which affects the provision of access to residents; and (c) the significant change in levels between the plateau and the foreshore area which make the foreshore area unsuitable for access by frail, aged residents and disabled residents except via lifts. I accept that these would be relevant considerations in the minds of the hypothetical parties at the acquisition date, as presenting risk in obtaining SEPP 5 consent, particularly in relation to development of the foreshore area.
SEPP 5 yield
103 On the erroneous assumption of a residential zoning, in LEC 1 Talbot J concluded that the hypothetical, properly advised buyer would have perceived obstacles which posed a considerable risk that a 138 residential units development may not be achieved. 138 units at the agreed rate of $600,000 per unit produced a value of $82.8 million. After considering the evidence, his Honour quantified the yield risk as a 27.5 per cent discount on that value, resulting in a market value of $60 million, which his Honour described as "the point of equipoise": LEC 1 [123] - [134].
104 Walker submits that when considering yield, the Court now need only apply that "point of equipoise". I do not accept the submission. Because of the assumed residential zoning basis on which LEC 1 was decided (which was rejected on appeal), it was unnecessary, as Talbot J said, to address SEPP 5 and, accordingly, his Honour did not do so: LEC 1 at [117]. Although his Honour remarked at LEC 1 [117] that the arguments in respect of yield for SEPP 5 and existing use rights are inherently the same as for an assumed residential zoning development, he also commented in his disturbance judgment at [19] that with a SEPP 5 development "there would have been the additional risk of achieving a yield equivalent to the potential recognised, on the basis assumed by me, namely that the Land would have been zoned residential at the date of resumption". His Honour added that: "Reliance upon an existing use to support residential development would have involved a significant risk that would have reduced the risk of compensation": disturbance judgment at [19]. I agree with those comments in the disturbance judgment. In fact, there was clear expert evidence before his Honour supporting the Authority's argument that the yield for a SEPP 5 development would have been lower than for other residential development.
105 It is now necessary for me to decide the SEPP 5 yield issue, as perceived by the hypothetical buyer and seller at the acquisition date.
106 Factors bearing on yield identified in LEC 1 included planning controls, the likely attitude of objectors and council officers, studies and reports in the public arena and the likely approach of relevant government departments, which would have been collated by professional advisers such as planners: LEC 1 [124]. As was said at LEC 1 [125] - [142], the factors included the following:
(a) as SEPP 56 applied, the Minister would have taken a pivotal role in the determination of any development application raising significant issues in relation to State government policy of co-ordinating the planning of development on the foreshores of Sydney Harbour;
(b) the consent authority would be anxious to constrain the density of the development, having regard to its strategic location, although mindful of State government urban consolidation policy;
(c) the purchaser may have received conflicting advice from town planners as to the extent of floor space ratio that would be achieved;
(d) there was an issue as to whether the appropriate foreshore building line should demand a setback of up to 30 metres or only 10 metres with a three metre building setback. To accommodate an appropriate setback, extensive landscaping and substantial open space, approximately half the site could be excluded from a developable area for the purpose of structures, although that would allow a more generous floor space ratio on the elevated sections;
(e) any consent authority, under pressure from residents, would have given close consideration to density, height and setback of buildings and to limiting the perception of bulk and scale. Access to the Land along a congested and narrow network of streets would have raised issues about the desirable population of the development;
(f) a range of matters of concern, identified in evidence by the Sydney Harbour Design Review Panel, would be addressed including maximising public access along the foreshores, greening of the foreshores, ecology of the Harbour, preservation and enhancement of views to and from the Harbour, and high quality, low building design near the foreshore.
107 In contrast to the expert evidence as to the achievable yield for an assumed residential zoning development which ranged between 69 and 138 units, the expert evidence as to the achievable yield for a SEPP 5 development ranged between 40 units (Mr Shiels, the Authority's planner) and 138 units (Walker's planners).
108 The Authority submits that if the chance of a SEPP 5 development consent exists, the SEPP 5 yield parameters relevant to the quantum of the chance are significantly less than for other residential development. The Authority submits that: