Sales and Ors v Transport for NSW (No 3) [2022] NSWLEC 18

Land and Environment Court New South Wales

Medium Neutral Citation: Sales and Ors v Transport for NSW (No 3) [2022] NSWLEC 18 Hearing dates: 7 February 2022 Date of orders: 11 March 2022 Decision date: 11 March 2022 Jurisdiction: Class 3 Before: Robson J Decision: See orders at [39] Catchwords: VALUATION — Compulsory acquisition — Market value — Residential subdivision — Amenity protection — Extent of likely physical treatment of boundaries adjacent public purpose — Valuation methodology — Likely profit and risk margin and internal rate of return adopted under hypothetical development method Cases Cited: Sales and Ors v Transport for NSW (No 2) [2021] NSWLEC 96 Category: Consequential orders Parties: Nancy Eileen Sales (First Applicant) Paul Howard Roots (Second Applicant) Gail Elizabeth Borg (Third Applicant) Transport for NSW (Respondent) Representation: Counsel: A Pearman (Applicants) L Waterson with T Poisel (Respondent)

Solicitors: MJO Legal (Applicants) Hunt & Hunt Lawyers (Respondent) File Number(s): 2018/00387274 Publication restriction: Nil

Judgment 1. On 1 September 2021, I delivered the principal judgment in these compensation proceedings: Sales and Ors v Transport for NSW (No 2) [2021] NSWLEC 96 ('judgment'). I adopt the background facts, findings, and definitions in the judgment. 2. At judgment [255]-[256], I concluded that there was insufficient material before the Court to finally determine the total compensation to which the applicants are entitled (as the Court is unable to run the Estate Master program modelling) and directed, as I had been invited to do, that the parties confer and provide the Court with an agreed amount representing the market value of the Acquired Land in accordance with my findings as set out in the judgment. 3. Agreement was not reached in relation to a number of matters and on 25 November 2021, orders were made by consent for the preparation of a further short joint valuation report (addressing four discrete matters agreed between the parties), and the provision of short written submissions by each party on any matters remaining in dispute. A "Final Supplementary Joint Report of Valuation Experts" dated 3 December 2021 (which became Ex N) and further written submissions dated 31 January 2022 were thereafter provided by the parties. The matter was further heard on 7 February 2022. 4. Although the parties were able to agree in relation to a number of outstanding matters, there remained two issues which required further adjudication. The first issue, in relation to the town planning evidence, concerned the precise extent of a 5m masonry wall which I found would be likely to be required in the development in the after scenario (at judgment [243]), being whether the wall should be confined to the eastern boundary of the R2 zoned land (resulting in a total length of 228.145m) or whether it should include a "return" along each of the northern and southern boundaries of the Residue Land (adding a further 120m and resulting in a total length of 348.145m). The second issue, in relation to the adoption of valuation "hurdle rates" in the Estate Master development feasibility modelling undertaken by the valuers, concerned the determination of market value using a hypothetical development method and adopting the target profit and risk margin ('P+R Margin') of 25% and a target internal rate of return ('IRR') of 16.5%. The second issue is the subject of the further short joint report prepared by the valuers.