Land and Environment Court New South Wales Medium Neutral Citation: Buhach v Transport for New South Wales [2022] NSWLEC 148 Hearing dates: 11, 12, 13, 14 and 18 August 2020, 25 and 26 March 2021, 23 and 24 August 2021 and 2 and 10 December 2021 Date of orders: 12 December 2022 Decision date: 12 December 2022 Jurisdiction: Class 3 Before: Pepper J Decision: See orders at [315]. Catchwords: COMPULSORY ACQUISITON: determination of the market value of two parcels of acquired land, leases and an easement – determination of the market value of residue land – determination of affection and betterment – assessment of the highest and best use of acquired lands not rural – valuation methodology – assessment of valuation evidence – determination of disturbance – whether fees associated with withdrawal of first proposed acquisition notices claimable – whether additional valuation fees claimable – whether planning and survey costs claimable – whether relocation costs claimable. Legislation Cited: Environmental Planning and Assessment Act 1979, s 9.1 Land Acquisition (Just Terms Compensation) Act 1991, Pts 2, 3, 4, ss 11, 12, 16, 54(1), 55, 56, 59, 66, 67, 71 Liverpool Local Environmental Plan 2008 State Environmental Planning Policy (Western Sydney Aerotropolis) 2020, cll 18, 25 State Environmental Planning Policy (Western Sydney Employment Area) 2009 Cases Cited: Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 Apokis v Transport for NSW (2020) 101 NSWLR 844; [2020] NSWCA 39 Attard v Transport for NSW (2014) 205 LGERA 396; [2014] NSWLEC 44 Barkat v Roads and Maritime Services [2019] NSWCA 240 Blacktown City Council v Fitzpatrick Investments [2001] NSWCA 259 Cook v Roads and Traffic Authority of New South Wales [2007] NSWLEC 136 Croghan v Blacktown City Council (2019) 100 NSWLR 757; [2019] NSWCA 248 Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Limited (1934) 51 CLR 509; [1934] HCA 41 Eureka Operations Pty Ltd v Transport for New South Wales (2021) 249 LGERA 78; [2021] NSWLEC 41 Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 Kirela Pty Ltd v Minister Administering Environmental Planning and Assessment Act 1979 (2005) 141 LGERA 40; [2005] NSWCA 108 Maidment v Roads and Traffic Authority (NSW) (2006) 153 LGERA 249; [2006] NSWLEC 206 Marroun v Roads and Maritime Services [2012] NSWLEC 199 Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251 Moloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252 New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135 Penfold and Bracey v Health Administration Corporation [2009] NSWLEC 157 Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307; [2016] NSWCA 7 Roads and Maritime Services v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41 Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243 Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391 Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56 UTSG Pty Ltd v Sydney Metro (No 6) [2020] NSWLEC 63 Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 Category: Principal judgment Parties: Proceedings 2019/00075642 Zdravko Buhach (Applicant) Transport for New South Wales (Respondent) Proceedings 2019/00075655 John Zdravko Buhach (First Applicant) Sandy Lenka Buhach (Second Applicant) Transport for New South Wales (Respondent) Representation: Counsel: Proceedings 2019/00075642 R Lancaster SC and N Eastman (Applicant) Dr S Pritchard SC, A Hemmings and T Poisel (Respondent) Proceedings 2019/00075655 R Lancaster SC and N Eastman (First and Second Applicants) Dr S Pritchard SC, A Hemmings and T Poisel (Respondent) Solicitors: Proceedings 2019/00075642 Project Lawyers (Applicant) Herbert Smith Freehills (Respondent) Proceedings 2019/00075655 Project Lawyers (First and Second Applicants) Herbert Smith Freehills (Respondent) File Number(s): 2019/00075642 2019/00045655 Publication restriction: Nil Judgment TOPIC PARAGRAPH TNSW Acquires Part of the Z Buhach and the Buhachs's Lands for the Public Purpose of Roadworks 1 The Land at 2292 The Northern Road (the Buhachs Proceedings) 6 Characteristics of the Buhachs's Parent Parcel 13 Characteristics of the Buhachs's Residue Land 25 Buhachs's Property Summary 26 The Land at 2700 Elizabeth Drive (the Z Buhach Proceedings) 27 Characteristics of the Z Buhach Parent Parcel 34 Characteristics of the Z Buhach Residue Land 43 Z Buhach Property Summary 64 JT Act Statutory Framework 65 The Claims for Compensation 69 The Buhachs Proceedings (2292 The Northern Road) 69 The Z Buhach Proceedings (2700 Elizabeth Drive) 76 Market Value 83 Issues for Determination 85 The Highest and Best Use of the Lands 86 The Uncontroversial Strategic Planning History of the Subject Lands 86 Town Planning Expert Evidence 95 Haskew 96 Rowan 101 The Submissions of Applicants on Highest and Best Use 104 The Submissions of TNSW on Highest and Best Use 101 The Highest and Best Use of the Acquired Lands is Not that of a Rural Designation 116 Valuation Methodology 132 Expert Valuation Evidence 143 Valuation Evidence in the Before Scenarios 155 Phippen 155 Lunney 164 Summary of the Joint Valuation Evidence 171 Supplementary Joint Valuation Expert Report 173 Findings in Respect of the Expert Valuation Evidence 181 Valuation in the After Scenarios 214 Injurious Affection and Betterment of the Z Buhach Property (2700 Elizabeth Drive) 215 Phippen – Northern Residue Land 216 Phippen – Southern Residue Land 219 The Acquired Easement 223 Phippen – Summary of Affection and Betterment of the Z Buhach Residue Lands 226 Lunney – Northern Residue Land 228 Lunney – Southern Residue Land 231 The Acquired Easement 232 Lunney – Summary of Affection and Betterment of the Z Buhach Residue Lands 233 Findings on the 'After' Scenario for the Z Buhach Residue Lands 234 The Affect of the Acquisition on the Buhachs's Property (2292 The Northern Road) 241 Phippen 241 Lunney 246 Findings on the After Scenario for the Buhachs's Property 251 The Acquired Construction Leases 256 The Z Buhach Acquired Construction Lease (2700 Elizabeth Drive) 256 The Buhachs's Acquired Construction Lease (2292 The Northern Road) 265 Disturbance 270 Fees Associated with the Withdrawal of the First PANs 272 Dobrow Valuations Fees 284 Planning and Survey Costs 289 Relocation Costs 296 GST 305 Summary of Disturbance Compensation 309 The Z Buhach Proceedings (2700 Elizabeth Drive) 309 The Buhach Proceedings (2292 The Northern Road) 311 Compensation Payable 313 The Z Buhach Proceedings (2700 Elizabeth Drive) 313 The Buhachs Proceedings (2292 The Northern Road) 313 Costs 314 Orders 315 TNSW Acquires Part of the Z Buhach and the Buhachs's Lands for the Public Purpose of Roadworks 1. This judgment concerns the resolution of two separate proceedings for compensation by three applicants, Zdravko Buhach ("Z Buhach") in one matter, and John and Sandy Buhach ("the Buhachs") in the other (together, where appropriate, "the applicants"), following the compulsory acquisition by the respondent, Transport for New South Wales (the statutory successor to the former Roads and Maritime Services ("RMS")) ("TNSW"), brought pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 ("the JT Act"), in respect of the partial compulsory acquisition of the applicants' freehold, leasehold and easement interests in the lands located at 2700 Elizabeth Drive, Luddenham and 2292 The Northern Road, Luddenham, respectively. 2. The acquisition was for the purpose of the Roads Act 1993. More specifically, The Northern Road Upgrade, Stage 6 ("the public purpose"), which comprised the widening and re-alignment of The Northern Road and Elizabeth Drive. It involved the delivery of a 35 km upgrade of The Northern Road between Old Northern Road, Narellan and Jamieson Road, South Penrith, which is to be undertaken in six stages. 3. For the reasons provided below, Z Buhach is awarded $10,042,465 and the Buhachs are awarded $2,313,511 as compensation for the acquisition of their acquired interests. 4. I acknowledge the considerable assistance provided to me by Kempthorne AC. All reasoning and findings are, however, my own. 5. The facts relevant to the determination of the two matters upon which reliance was placed by all parties are set out below. The Land at 2292 The Northern Road (the Buhachs Proceedings) 1. Located approximately 1.1 km south of Elizabeth Drive is land identified as Lot 3 in DP 827223 and known as 2292 The Northern Road, Luddenham ("the Buhachs's parent parcel").1F 2. On 29 March 2018 TNSW issued a proposed acquisition notice to the Buhachs under the JT Act ("the first Buhachs PAN"). 3. Subsequently, on 29 June 2018, TNSW notified the Buhachs that it was withdrawing the first PAN. This formally occurred on 29 June 2018. 4. That same day, TNSW issued a further proposed acquisition notice on the Buhachs ("the second Buhachs PAN"). 5. The first Buhachs PAN and the second Buhachs PAN were issued in respect of the same interests in the parent parcel. 6. By acquisition notice published in Government Gazette No 105 of 12 October 20182F ("the acquisition date"), TNSW formally compulsorily acquired the following interests in the parent parcel (together, "the Buhachs's acquired interests"):3F 1. freehold interest in Lot 11, DP 12405114, being part of the land in certificate of title 3/827223, comprising 1.05 ha (10,500m²) ("the Buhachs's acquired land"); and 2. a two-year leasehold interest over Lot A in RMS Sketch SR 4696-CA, being part of the land in certificate of title 3/827223, comprising 0.144 ha (1,440m²) ("the Buhachs's lease"). 1. As at the acquisition date, the Buhachs were the registered proprietors of the parent parcel.9F Characteristics of the Buhachs's Parent Parcel 1. In respect of the Buhachs's proceedings, prior to the TNSW acquisition, the land comprised 10.65 ha (106,530m2). It is battle axe shaped, with a 10m wide access handle to The Northern Road over a distance of 535m. The land contains three dams, one of which is large and centrally located. Land to the southeast and west of the main dam drains to that dam. Land to the north drains to northern adjoining properties by a natural overland flow path and series of farm dams. 2. The Buhachs's parent parcel is situated:22 1. 750m northeast of the Village of Luddenham; 2. 13 km south of the regional centre of Penrith; 3. 21 km northwest of the regional centre of Liverpool; 4. 48 km due west of the City of Sydney GPO; and 5. 1 km from the new airport at Badgerys Creek. 1. The Buhachs's parent parcel is battle axe shaped, sloping down from the north and the south to a central drainage depression traversing the land in a generally northwest to southeast direction. 2. As at the acquisition date: 1. the Buhachs's parent parcel was improved with a single storey clad and metal sheet roof dwelling, two large metal sheet sheds and other ancillary sheds, water tanks, septic tanks and post and wire fencing; 2. the Buhachs's parent parcel had access to The Northern Road from the driveway facilitating vehicular access from the western boundary of that parcel; and 3. there was also an unformed reserved (or paper) road identified on DP 1240511 on the eastern boundary of the Buhachs's parent parcel (20.115m wide and approximately 585m long). No portion of this paper road has been constructed and it did not have any physical opening to The Northern Road. 1. The Buhachs's parent parcel is not serviced with reticulated wastewater services. 2. The Buhachs's parent parcel is subject to the following registered instruments: 1. a right of carriageway (DP563121);31F 2. a number of leases to Crown Castle Australia Pty Ltd (AC341520, AC341521, AI449250, AI449251 and AK141182); and 3. a number of leases to Telstra Corporation Ltd (AH959472, AH959473, AH959474 and AH959475). 1. The Buhachs's parent parcel is zoned RU1 – Primary Production under the Liverpool Local Environmental Plan 2008 ("the LLEP"), other than a narrow strip along the road frontage which is zoned SP2 – Infrastructure under the LLEP. 2. The Buhachs's parent parcel is within the Broader Western Sydney Employment Area Precinct ("BWSEA precinct") under the State Environmental Planning Policy (Western Sydney Employment Area) 2009 ("WSEA SEPP"). Further, the parent parcel is identified as "Unzoned Land" under the WSEA SEPP and its permitted uses are generally limited to those identified in the RU1 land use table of the LLEP. 3. The Buhachs's parent parcel is also within the Western Sydney Aerotropolis Growth Centre ("WSAGA") under the Greater Sydney Regional Plan: A Metropolis of Three Cities – connecting people ("Greater Sydney Regional Plan") prepared by the Greater Sydney Commission. It was agreed that, as at the acquisition date, the future development potential of the parcel was likely to be reflected in the planning outcomes contained in the Stage 1 Land Use and Infrastructure Implementation Plan ("Stage 1 LUIIP"). 4. The Buhachs's parent parcel is not identified within the projected noise contours in the mapping associated with the future operation of the Western Sydney Airport. 5. According to the town planning experts, the public purpose did not have any adverse impact on access to The Northern Road from the driveway facilitating vehicular access from the western boundary of the Buhachs's parent parcel. On the contrary, the public purpose will in all likelihood make the driveway safer because the road is anticipated to become a local road with a reduced speed limit. 6. There was, however, disagreement between the town planning experts in relation to the impact of the public purpose on the paper road (see further below). Characteristics of the Buhachs's Residue Land 1. Following the acquisition, the Buhachs were the registered proprietors of the residue of the parent parcel identified as Lot 2 in DP 1240511, comprising an area of 9.603 ha (96,030m²) ("the Buhachs's residue land"): Buhachs's Property Summary 1. The area of the Buhachs parent parcel, the acquired lease and the residue land is as follows: Land Area Parent parcel 106,530 m² 10.65 ha Acquired land 10,500 m² 1.05 ha Acquired lease (2 years) 1,440 m² 0.14 ha Residue land (area after acquisition) 94,590 m² 9.46 ha The Land at 2700 Elizabeth Drive (the Z Buhach Proceedings) 1. Located approximately 1.6 km north of the boundary of the Western Sydney Airport and on the south-eastern corner of The Northern Road and Elizabeth Drive is land identified as Lot 1 in DP 517853, known as 2700 Elizabeth Drive ("the Z Buhach parent parcel"). The parcel comprises an area of 12.14 ha (121,400m²). 2. Similar to the Buhachs, on 29 March 2018 TNSW issued a proposed acquisition notice on Z Buhach under the JT Act ("the first Z Buhach PAN"). 3. On 29 June 2018, TNSW advised Z Buhach that it was withdrawing the first Z Buhach PAN, which occurred that day. 4. That same day, TNSW issued a further proposed acquisition notice on Z Buhach ("the second Z Buhach PAN"). 5. By acquisition notice published in Government Gazette No 105 of 12 October 2018, TNSW formally compulsorily acquired the following interests in the Z Buhach parent parcel (together, "the Z Buhach acquired interests"): 1. freehold interest in Lot 17, DP 1240511, being part of the land in certificate of title 1/517853, comprising 4.323 hectares (43,230m²) ("the Z Buhach acquired land"); 2. an easement interest over the site designated "K" on DP 1240511, being part of the land in certificate of title 1/517853, comprising 486.7m² ("the Z Buhach easement"); and 3. a two year leasehold interest over Lots A, B and C in RMS Sketch SR 4692-CA, being part of the land in certificate of title 1/517853, comprising 27,810m² ("the Z Buhach lease"). 1. As at the acquisition date, Z Buhach was the registered proprietor of the Z Buhach parent parcel. 2. Following the acquisition, Z Buhach remains the registered proprietor of the residue of the Z Buhach parent parcel identified as Lot 8 in DP 1240511 which consists of the following two sections (together, "the Z Buhach residue land"): 1. the northern residue land comprising 1.141 ha (11,410m²) ("the northern residue land"); and 2. the southern residue land comprising 6.673 ha (66,730m²) ("the southern residue land"). Characteristics of the Z Buhach Parent Parcel 1. The Z Buhach parent parcel is situated: 1. 1.3 km northeast of the Village of Luddenham; 2. 13 km south of the regional centre of Penrith; 3. 21 km northwest of the regional centre of Liverpool; 4. 48 km due west of the City of Sydney GPO; and 5. 1 km from the new airport at Badgerys Creek. 1. The Z Buhach parent parcel has a gently sloping topography, away from the north-western corner down towards the south-eastern corner. 2. As at the acquisition date, the Z Buhach parent parcel had the following improvements: 1. two existing dwellings comprising: 1. one brick veneer and tile dwelling with a double garage under the main roof (approximately 325m²); and 2. a brick veneer and tile dwelling (approximately 145m²); 1. three steel framed metal clad workshop/storage sheds with concrete floors, approximately 145m², 400m² and 170m², respectively; 2. one new metal clad sales shed/warehouse with amenities and a concrete floor, of approximately 200m²; 3. two dams; 4. a pump and irrigation system, driveways, fencing and formed paths and roadside signage; and 5. at least two vehicle access points off The Northern Road. 1. The Z Buhach parent parcel is not serviced with reticulated wastewater services. 2. The Z Buhach parent parcel is subject to a registered covenant. 3. The parent parcel is zoned RU1 – Primary Production under the LLEP. 4. The Z Buhach parent parcel is within the BWSEA precinct under WSEA SEPP. Further, it is identified as "Unzoned Land" and the permitted uses under the WSEA SEPP are generally limited to those permitted in the RU1 land use table of the LLEP. 5. The Z Buhach parent parcel is within the WSAGA under the Greater Sydney Regional Plan. It was similarly not a matter of controversy between the parties that, as at the acquisition date, the future development potential of the parent parcel was likely to be reflected in the planning outcomes contained in the Stage 1 LUIIP. 6. The Z Buhach parent parcel is not identified within the projected noise contours in the mapping associated with the future operation of the Western Sydney Airport. Characteristics of the Z Buhach Residue Land 1. It was not in dispute that the public purpose has increased local catchment areas to the point of discharge at the upstream end of the southern residue land on which the acquired easement is located ("the easement land") resulting in a reduction in the total catchment area draining to the eastern boundary of the southern residue land. 2. In addition, the public purpose will result in increases in the average annual volume of runoff that flows into the two existing farm dams located on the southern residue land (dam 1 and dam 2) which will in turn result in: 1. increased runoff into the dams; 2. the filling up of the dams more quickly; and 3. more frequent overflows into downstream dams. 1. The increased volume of runoff from the public purpose will not elevate the risk of scouring of the area below the dam 2 spillway. 2. The peak flow rates discharging to the upstream end of the easement land and the dam 1 and dam 2 outlets will increase as a result of the public purpose. 3. If the southern residue land is developed for a use which requires the provision of on-site detention and water quality controls, an increased pipe size will be required as a result of the increased peak flow rates at the upstream end of the easement land. 4. If the southern residue land is used for its current or a similar agricultural use, the increased peak flow rates at the upstream end of the easement land will have a negligible effect on the continuation of that use. 5. In relation to the increased peak flow rates discharging from dam 1, the increase is minor and, again, will not significantly increase the risk of scouring of the spillway or the downstream channel. 6. The public purpose has changed the extent of the catchments to dam 1 and dam 2, and concentrated the point of discharge of flow off the road and the northern residue land, however, the public purpose will appropriately manage the risk of scouring at the condensed points of discharge. 7. If a future development use dictated the need to capture and pipe the flows through the site, the increase in flows at the upstream end of the easement land would result in an increase in the cost of piping the flows from the external catchment through the southern residue land. 8. If a future development use necessitated the provision of stormwater detention and water quality treatment measures (such as, for example, a development requiring the construction of significant hardstand and/or buildings), then a developer would most likely seek approval to pipe the flows off the road catchment through the southern residue land, so that the flows off the external catchment bypassed the detention and water quality measures. 9. The increase in flows at the upstream end of the easement land would result in the size of the bypass pipe draining the external catchment through the southern residue land increasing from 825mm to 1,200mm in diameter. 10. The bypass pipe would discharge at the eastern boundary of the southern residue land and would be an extra cost to future development as a result of the public purpose. 11. The peak flow management requirements associated with the public purpose may be resolved by implementing a bypass drainage pipe system for future development use, which would also require the provision of on-site detention and water quality controls, if accepted by a consent authority. 12. If the bypass drainage pipe system is not accepted by a consent authority for a future development use, the increases to peak flow rates would not warrant the provision of additional detention storage on the southern residue land. 13. If the bypass drainage pipe system is accepted by a consent authority, any water quality requirements associated with the public purpose will be resolved. 14. The location of the Z Buhach easement is a logical point for collection and discharge of flows from the public purpose. The existing catchment discharging at this point is significantly smaller (3.7 ha) than the catchment created by the public purpose (6.73 ha) and this additional catchment and increased impervious area significantly increases peak flow rates at this location. 15. The Z Buhach easement is required because of the increase in flow rates as a result of the public purpose and covers the full length of the scour protection works. 16. The procedural and statutory costs associated with the extinguishment of the Z Buhach easement would be minimal, however, the cost of preparation of planning and engineering reports to support the extinguishment was not quantifiable at the time of the hearing. 17. Any future agribusiness related redevelopment on the southern residue land would seek to realign the Z Buhach easement and any associated bypass pipeline to maximise the development potential of the southern residue land. 18. The public purpose has not proposed any spill management devices. 19. A future development use of the residue land is unlikely to require any spill management by a consent authority, however, if that development is sensitive to the quality of water draining onto the land (for example, the use of the land for organic farming) an appropriate risk management approach would be to install a spill management device upstream of any storage dam. The cost of a spill management device is approximately $149,000 (exclusive of GST). Z Buhach Property Summary 1. In relation to the Z Buhach proceedings, the area of the Z Buhach parent parcel, the acquired interests, and the residue lands is: Land Area Parent parcel 121,370 m² 12.14 ha Acquired land 43,230 m² 4.32 ha Acquired easement 486.7 m² 0.05 ha Acquired lease Total: 27,810 m² Total: 2.78 ha Lot A 11,390 m² 1.14 ha Lot B 10,470 m² 1.05 ha Lot C 5,950 m2 0.60 ha Residue land (area after acquisition) Total: 78,140 m2 Total: 7.81 ha Northern residue land 11,410m² 1.14 ha Southern residue land 66,730m² 6.67 ha JT Act Statutory Framework 1. The amount of compensation to which the Buhachs and Z Buhach are entitled is determined pursuant to Pt 3 Div 4 of the JT Act. Section 54(1) of that Act provides as follows: 54 Entitlement to just compensation (1) The amount of compensation to which a person is entitled under this Part is such amount, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land. 1. The matters that are to be taken into account in determining compensation are set out in s 55: 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division): (a) the market value of the land on its date of acquisition, (b) any special value of the land to the person on its date of acquisition, (c) any loss attributable to severance, (d) any loss attributable to disturbance, (e) the disadvantage resulting from relocation, (f) any increase or decrease in the value of other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. 1. Section 56 deals with market value and is in the following terms: 56 Market value (1) In this Act: market value of land at any time means the amount that would have been paid if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. (2) When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition. (3) If: (a) the land is used for a particular purpose and there is no general market for land used for that purpose, and (b) the owner genuinely proposes to continue after the acquisition to use other land for that purpose, the market value of the land is taken, for the purpose of paying compensation, to be the reasonable cost to the owner of equivalent reinstatement in some other location. That cost is to be reduced by any costs for which compensation is payable for loss attributable to disturbance and by any likely improvement in the owner's financial position because of the relocation. 1. Disturbance is provided for in s 59(1): 59 Loss attributable to disturbance In this Act: loss attributable to disturbance of land means any of the following: (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land, (b) valuation fees of a qualified valuer reasonably incurred by those persons in connection with the compulsory acquisition of the land (but not fees calculated by reference to the value, as assessed by the valuer, of the land), (c) financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs), (d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired), (e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage), (f) any other financial costs reasonably incurred (or that might be reasonably incurred), relating to the actual use of the land, as a direct and natural of consequence of the acquisition. The Claims for Compensation The Buhachs Proceedings (2292 The Northern Road) 1. On 12 February 2019 the Valuer-General made a determination of compensation in respect of the Buhachs's acquired interests in the amount of $521,600 comprising:5F 1. market value (s 55(a) of the JT Act) – $515,000; and 2. disturbance (s 55(d) of the JT Act) – $6,600. 1. On 13 February 2019 TNSW made an offer of compensation to the Buhachs in respect of their acquired interests in accordance with the Valuer-General's determination.6F 2. The Buhachs commenced Class 3 compensation proceedings pursuant to s 66 of the JT Act on 8 March 2019, objecting to the amount of compensation offered by TNSW in respect of the acquisition. 3. The Buhachs's claims have been amended several times during the course of their proceedings. In the Amended Points of Claim filed on 13 August 2020, the Buhachs's sought an order for compensation in the amount of $4,559,528.58, comprising: 1. market value for the acquired interests (s 55(a)) comprising: 1. $4,480,000 for the acquired land; and 2. $19,904.04 for the acquired lease; and 1. disturbance (s 55(d)) – $59,624.54 comprising: 1. legal costs (s 59(1)(a)) – $10,332.33; and 2. valuation costs (s 59(1)(b)) – $49,292.21, including, it appears (although this was not clear from the applicants' amended points of claim), the costs incurred for town planning advice in the amount of $8,424.18 for the purposes of informing the valuation advice under either s 59(1)(b) or (f). 1. In the Further Amended Points of Defence filed on 19 January 2021, TNSW contended that compensation should be determined at least in the amount of $241,000, comprising: 1. market value for the acquired interests as follows: 1. market value for the acquired land (s 55(a)) – $231,000; and 2. market value for the acquired lease (s 55(a)) – $10,000; and 1. disturbance to be determined by the Court to be reasonably incurred in accordance with ss 55(d) and 59(1) of the JT Act. 1. The final claim for compensation by the Buhachs is summarised in the table below: JT Act Buhachs s 55(a) market value $4,480,000.00 for the market value of the acquired land. $19,904.40 for the market value of the acquired lease. s 55(d) disturbance $59,624.18 Total $4,559,528.58 1. Whereas, at the conclusion of the hearing, TNSW claimed that the Buhachs were entitled to compensation for the acquired interests as follows: JT Act TNSW Market value of the acquired land (s 55(a)) $231,000.00 Market value of the acquired lease (s 55(a)) $10,000.00 Disturbance (s 55(d)) $16,351.92 Total $257,351.92 The Z Buhach Proceedings (2700 Elizabeth Drive) 1. On 12 February 2019 the Valuer-General made a determination of compensation in respect of the Z Buhach acquired interests in the amount of $5,483,487 comprising: 1. market value (s 55(a) of the JT Act) – $5,100,000; 2. disturbance (s 55(d) of the JT Act) – $305,106; and 3. disadvantage resulting from relocation (s 55(e) of the JT Act) – $78,381. 1. On 14 February 2019 TNSW made an offer of compensation to Z Buhach in respect of the Z Buhach acquired interests in accordance with the Valuer-General's determination. 2. On 8 March 2019 Z Buhach commenced Class 3 compensation proceedings pursuant to s 66 of the JT Act objecting to the amount of compensation offered by TNSW. 3. Z Buhach's claims have also been amended during the course of these proceedings. In his Further Amended Points of Claim filed on 13 August 2020, he sought an order for compensation in the amount of $20,876,534.46 comprising: 1. market value for the acquired interests (s 55(a)) comprising: 1. $19,640,000 for the acquired and; and 2. $702,000 for the acquired lease; 1. disturbance (s 55(d)) – $456,153.46 comprising: 1. legal costs (s 59(1)(a)) – $104,920.38; 2. valuation costs (s 59(1)(b)) – $82,127.15, including, it appears (although this was not clear from the applicant's further amended points of claim), the costs incurred for a town planner in the amount of $9,524.18 and costs incurred for a surveyor in the amount of $1,100 for the purposes of informing the valuer under either s 59(1)(b) or (f); and 3. relocation costs (s 59(1)(c)) – $269,105.93; and 1. disadvantage resulting from relocation (s 55(e)) – $78,381. 1. In its Amended Points of Defence filed on 10 August 2020, TNSW contended that compensation should be determined at least in the amount of $4,604,408 as follows: 1. market value for the parent parcel land and the acquired easement (s 55(a)) – $4,396,408; 2. market value for the acquired lease (s 55(a)) – $208,000; and 3. an amount for disturbance to be determined by the Court to be reasonably incurred in accordance with ss 55(d) and 59(1) of the JT Act. 1. Z Buhach's ultimate claim for compensation at the conclusion of the hearing (confirmed by way of further written submissions on 10 December 2021) was therefore: JT Act Z Buhach s 55(a) & (f) $19,640,000 (comprising the market value of the acquired land and the acquired easement) s 55(d) $456,153.46 s 55(e) $78,381.00 Total $20,876,534.46 1. By contrast, TNSW contended that Z Buhach was entitled to the compensation below: JT Act TNSW Market value of the acquired land and acquired easement (s 55(a)) $4,396,408.00 Market value of the acquired lease (s 55(a)) $208,000.00 Disturbance (s 55(d)) $66,491.29 Disadvantage from relocation (s 55(e)) $78,381.00 Total $4,749,280.29 Market Value 1. The relevant valuation principles for assessing compensation in Class 3 proceedings were summarised by the Court of Appeal in Barkat v Roads and Maritime Services [2019] NSWCA 240 (at [19]-[21], footnotes omitted): 19 In proceedings of the kind in which the primary judge was engaged, the L&E Court acts as a judicial valuer. In that capacity, the L&E Court is not confined to accepting the case of one party or the other party, and may use the evidence adduced in the proceedings to make its own assessment of the compensation payable for compulsory acquisition. That assessment will often lie at a point somewhere between the evaluations contended for on behalf of the parties. As a general rule, in determining compensation, any doubt should be resolved in favour of a more liberal estimate of value. 20 The market value of land for the purposes of s 55 of the Just Terms Act is to be determined on the basis of the highest and best use of the land. Accordingly, the L&E Court must approach the task of determining compensation by determining the most profitable potential use of the land in question. 21 The parties to the hypothetical sale contemplated by s 56(1) are to be assumed to be fully informed and to have made all proper inquiries. The land must be valued at the relevant date in its existing condition with all its potentialities as potentialities. The parties to the hypothetical sale are also assumed to be perfectly acquainted with the land and cognisant of all circumstances that might affect its value. In the absence of available market evidence, the L&E Court, as judicial valuer, must make the best guess that can be made. Events subsequent to the date of acquisition are to be ignored except in so far as they may be relevant as confirmation of foresight. 1. They were not in dispute. Issues for Determination 1. The principal issues for determination in both sets of proceedings were: 1. what was the highest and best use of the acquired lands as at the acquisition date; 2. how would a hypothetical purchaser under s 56 of the JT Act assess the market value of the acquired lands as at the acquisition date, including the assessment of any potential for future development; 3. what was the market value of the acquired lands as at the acquisition date; 4. what was the market value of the acquired leases as at the acquisition date; 5. what is the applicants' entitlement to compensation for losses attributable to disturbance under s 55(d) of the JT Act; and 6. does the Court have jurisdiction in these proceedings to determine compensation for financial costs or any damage actually incurred or suffered as a direct consequence of the giving and later rescinding the first Z Buhach PAN and the first Buhach PAN under s 69 of the JT Act? The Highest and Best Use of the Lands The Uncontroversial Strategic Planning History of the Subject Lands 1. It was uncontentious that as at the acquisition date the development potential of the acquired lands were largely informed by the strategic planning documents. 2. As at the acquisition date, it was not a matter of controversy that: 1. both parent parcels were zoned RU1 – Primary Production pursuant to the LLEP, other than a narrow strip along the road frontage of 2292 The Northern Road (the Buhachs proceedings) which was zoned "SP2 – Infrastructure" under the LLEP; 2. the LLEP commenced on 29 August 2008 and relevantly: 1. the range of permissible uses of the parent parcels in the RU1 zone includes agriculture, extensive agriculture, farm buildings, rural industries and rural supplies; and 2. the minimum lot size for the parent parcels was 40 ha and the minimum lot size for a dual occupancy on the parent parcels was 10 ha; 1. the parent parcels are located within the BWSEA precinct under the WSEA SEPP; 2. both parent parcels were subject to the WSEA SEPP, in respect of which: 1. cl 18 provides that any development application cannot be consented to unless there is a development control plan ("DCP") in place which addresses the requirements in Sch 4 of that instrument, except where an existing precinct plan was in place and set out in cl 19 of the instrument, or the Director General specifically notifies the consent authority that in effect a DCP is not required; 2. cl 25 requires that consent must not be granted unless the public utility infrastructure that is essential for the proposed development is available or that adequate arrangements have been made to make that infrastructure available when required; and 3. as stated above, the parent parcels were identified as "Unzoned Land" and their permitted uses were generally limited to those permitted in the RU1 land use table of the LLEP; 1. in November 2016 the NSW Government released the Draft South West District Plan ("Draft District Plan") which introduced the concept of an "aerotropolis" near the proposed Western Sydney airport. The Draft District Plan indicated what would and would not be within a future "Urban Area". The parent parcels are located within the future "Urban Area"; 2. in July 2017 the Sydney Water Growth Servicing Plan 2017-2022 ("Growth Servicing Plan") showed the subject land with the Badgerys Creek Airport Precinct of the Western Sydney Priority Growth Area; 3. in March 2018 the Greater Sydney Commission released the Greater Sydney Regional Plan which indicated that the subject land was within the "Western Sydney Airport-Badgerys Creek Aerotropolis" and described the area as being within the "Western Economic Corridor" with a "new international airport and aerotropolis" as well as "defence and aerospace activities" and "trade, freight, logistics, advanced manufacturing, health, education and science". The document listed a number of objectives. Objective 5 was concerned with the "benefits of growth realised by collaboration of governments, community and business" which would be driven by the "Western Sydney City Deal". Objective 20 stated that "Western Sydney Airport and Badgerys Creek Aerotropolis are economic catalysts for Western Parkland City" and further said that "the Western Sydney City Deal…will drive the delivery of the Western Sydney Airport and Badgerys Creek Aerotropolis", which it was envisaged would attract jobs, facilitate a mass transit system, bring city-scale infrastructure and advanced manufacturing logistics, and attract aerospace and defence industries. In particular, the Western Sydney City Deal would "create 200,000 jobs by supercharging the aerotropolis and agribusiness precinct as catalysts"; 4. the parent parcels are located in the WSAGA under the Greater Sydney Regional Plan and the Western City District Plan ("the 2018 District Plan"), the latter of which was also released by the Greater Sydney Commission in March 2018. The 2018 District Plan again depicted the acquired land adjacent to a "Metropolitan cluster" and with "Potential Future Industrial/Employment Land"; 5. the Stage 1 LUIIP was released in August 2018; and 6. any future rezoning of land within the WSAGA (which includes the parent parcels) is to be consistent with the Stage 1 LUIIP. 1. There was no real dispute with respect to the content of the Stage 1 LUIIP, namely, that: 1. as expressed, it was directed at "shorter term development outcomes" and was intended to provide a "high level Structure Plan to show how future development at the Aerotropolis could be arranged"; 2. the development potential of the parent parcels was likely to be reflected in the planning outcomes contained in the Stage 1 LUIIP, which was directed at "shorter term development outcomes" and was described as a "high level Structure Plan to show how future development at the Aerotropolis could be arranged"; 3. the Stage 1 LUIP was identified in Ministerial Planning Direction 7.8 ("Direction 7.8") issued in accordance with s 9.1 of the Environmental Planning and Assessment Act 1979. Relevantly, Direction 7.8 required that any proposal to rezone land in the LUIPP area be consistent with its provisions. Direction 7.8 is one of 10 Ministerial Directions relating to release area planning within the Sydney Region which, with one exception, seek to preserve and enable future urban development within a defined period. The one exception – Direction 7.1 – provides that the Metropolitan Strategy (A Plan for Growing Sydney) must be considered in the preparation and consideration of planning proposals; 4. nine precincts were identified in the Stage 1 LUIIP Structure Plan: the Aerotropolis Core, Northern Gateway, South Creek (green spine and recreation area), North Luddenham, Rossmore, Mamre Road, Kemps Creek, Badgerys Creek and the Agriculture and Agribusiness precinct ("A&A precinct"). The Northern Gateway, Aerotropolis Core and South Creek precincts were identified as being the first stage release precincts; 5. the entire A&A precinct has an area of approximately 2,400 ha; 6. the key features of the A&A precinct were described to be as follows: The Agriculture and Agribusiness Precinct will skirt the western edge of the Airport and support the long-term retention and growth of agriculture and agribusiness in the Western City. This area will support the transition of existing agriculture in the area, as well as the development of new agricultural opportunities. It will build on existing, successful agricultural operations on these lands, proximity to the Airport, compatibility with airport operations and associated landscape benefits of retaining open lands between The Northern Road and the Outer Sydney Orbital as a peri-urban fringe of Sydney. The Precinct will capitalise on growing local and international demand for fresh food. It offers reliable water supplies, good soils, available farm labour, and proximity to markets. Agribusiness in NSW and the potential for fresh food markets within the Aerotropolis would benefit from easy access to the Airport to move fresh food product to direct flights to international markets. These industries will also generate employment opportunities in high tech and more traditional agriculture. It is envisaged, that following the completion of a feasibility study, the size and location of an agri-port will be identified within this precinct. The agri-port will benefit from its proximity to the Western Sydney Airport and road and rail freight lines. The agri-port will provide for the movement and storage of agricultural commodities. Development within the agriculture or agribusiness lands may include: • ongoing agriculture production such as dairying and poultry farming • intensive horticulture such as mushroom and tomato farming • food processing • food research and technology. The precinct should be complimentary and not diminish or impact upon the effective ongoing agriculture and industry operations (and their import clusters) and viability within the surrounding area, both now and in the future. This includes being considerate of biosecurity, water access and demand, competition and land use conflict. The transition of existing agricultural lands to alternative uses is not envisaged in the current planning. However, these issues will be considered as long-term planning for the Aerotropolis is reviewed and monitored. Residential development opportunities are only appropriate if ancillary to agriculture. 1. there are no definitions for the terms, "agriculture", "agribusiness" or "agri-port" in the Stage 1 LUIIP; 2. the Structure Plan associated with the Stage 1 LUIIP ("the Structure Plan") designates two discrete areas within the A&A precinct, viz, "agriculture" (in yellow) and "flexible employment" (in blue) as follows: 1. the majority of the A&A precinct is identified in the Structure Plan as "agricultural", with only one portion of the land to the north of Elizabeth Drive identified as "flexible employment"'; 2. the Stage 1 LUIIP establishes that a future State Environmental Planning Policy ("SEPP") will create three zones – Urban Development, Infrastructure, and Environment – with exception being the A&A precinct which will retain the existing LLEP zones that are to be reviewed and updated as required; and 3. the potential for the establishment of an agri-port in the A&A precinct (subject to a feasibility study) exists. Its size and location has not been identified, however, and it will occupy a minority of the total area of the A&A precinct. 1. Finally, in 2019 KPMG released a pre-feasibility study for the NSW Department of Industry (the World-class intensive integrated production hub in the Western Sydney Aerotropolis ("the KPMG study)). The study referenced exemplar agribusiness precincts located around the world such as the A7 agri-port in the Netherlands and Fresh Park Venio. 2. The town planners agreed that as at the acquisition date the development potential of the acquired lands was primarily informed by the strategic planning documents. 3. It follows that the future urban potential of the acquired lands will be informed by the instruments and strategic planning material described above, including the Stage 1 LUIIP and the role that any agribusiness precinct has in the planning and early stage development of the Western Sydney Airport and Aerotropolis. 4. Importantly, the town planning experts agreed that as at the acquisition date: 1. first, the development potential of the parent parcels was likely to be reflected in the planning outcomes contained in the Stage 1 LUIIP; and 2. second, any future rezoning of the of the land within the WSAGA (in which the parent parcels are located) would be consistent with the Stage 1 LUIIP. 1. What was also not in dispute was that, as at the date of the acquisition, the A&A precinct was not identified as one of the three first stage precincts to be released for precinct planning. Nevertheless, as the Stage 1 LUIIP indicates, the development potential under the relevant LEPs for Penrith and Liverpool were to be preserved and that land use capabilities were to be reviewed and expanded as necessary. 2. The real areas of contention between the town planning experts related to the strategic planning future of the A&A precinct under the Stage 1 LUIIP. In particular, there was no agreement in respect of: 1. the feasibility of a potential agri-port within the A&A precinct; 2. the timing and location of the development of any agri-port within the A&A precinct; 3. the physical and operational characteristics of any agri-port under the Stage 1 LUIIP; and 4. the lack of clarity in the Stage 1 LUIIP with respect to the future planning expectations of the remainder of the A&A precinct (including the parent parcels). Town Planning Expert Evidence 1. In addition to various planning documents and other associated material, in each set of proceedings: 1. the applicants relied principally upon the expert town planning reports of David Haskew dated 12 June 2020; 2. TNSW relied primarily upon the expert evidence of Anthony Rowan dated 5 May 2020 (who filed separate reports in each matter); and 3. all parties relied upon the joint expert town planning report of Haskew and Rowan dated 26 June 2020. Haskew 1. The applicants contended that from the strategic planning documents the acquired lands had been identified for the location of the aerotropolis since the term was initially used in and around November 2016, and that this use was a higher and better use than its existing agricultural use, and therefore, that the present rural use of the subject lands would not be retained. It was not necessary for the acquired lands to be the future location of the agri-port (which as at the date of the acquisition was unknown); it was sufficient that the lands were located in the aerotropolis area. Accordingly, the acquired lands had a higher and more valuable urban future purpose compared to any existing or retained agricultural use. 2. It was Haskew's evidence that as at the date of acquisition, a reasonable purchaser would have considered that there was a good prospect of the agri-port being developed on or near the acquired lands. In any event, the acquired lands were not "simple rural land", it had good prospects of being developed in the medium to long term consistent with other aerotropolis land when a new foreshadowed SEPP would rezone the lands. 3. Haskew opined as follows: 1. as at the date of acquisition the acquired lands were situated within the agribusiness precinct; 2. while the existing rural zone planning controls under the LLEP were foreshadowed to be retained in the short term, they would be reviewed and updated as necessary; 3. he would advise the hypothetical purchaser of the acquired lands that there would be no discernible strategic planning reason why development potential of the agribusiness zone would be artificially delayed or stalled for strategic planning or infrastructure delivery reasons; 4. within the Stage 1 LUIIP the agribusiness precinct was said to accommodate the transitioning of more intensive forms of agriculture to take advantage of the new airport; and 5. more intensive forms of agricultural development would be immediately embraced upon gazettal of a new SEPP. 1. He set out a number of impacts in relation to the Z Buhach residue land occasioned by the acquisition, namely, that: 1. in the short term, the southern part of the residue land would be unsuitable for agricultural purposes due to its limited size and vehicle access restrictions; 2. the northern portion of the residue land was not suitable for agricultural purposes in both the short and long term; 3. there was a physical separation of the residue land; 4. there was a height difference between the southern part of residue land and the re-aligned road; and 5. there were various impacts relating to stormwater management, drainage, and water quality in relation to the southern part of the residue land. 1. Haskew therefore concluded that: 1. as at the date of acquisition, although the agribusiness precinct was not identified as one of the three first stage precincts to be released for precinct planning, the Stage 1 LUIIP made it clear that development potential under the LLEP would be preserved and that land use capabilities would be reviewed and expanded as necessary; 2. agribusiness type development could expect to include high intensity agriculture and horticulture, as well as freight and logistics operations to serve land inside and outside the aerotropolis; 3. the acquired lands were situated in close proximity to major new transport corridors as well as the aerotropolis freight and logistics precincts. Subject to drainage works being undertaken to close existing dams and manage overland flows, the acquired lands would have sat within the same hydrological catchment as the Northern Gateway Precinct. These characteristics would have presented a strong case to support development at an early stage of the aerotropolis development cycle, notwithstanding that the whole of the precinct was not included in the early stage precinct timing of the Stage 1 LUIIP; 4. as a consequence of the acquisition, the Z Buhach parent parcel was severely impacted by severance, inferior access to the arterial road network, particularly to the north and south. Further the awkward shape (severed) of the residue land would render the northern part of that land as highly inefficient to develop and the southern part also had inferior development potential; and 5. as a consequence of the acquisition, the Buhach's parent parcel was impacted by inferior access to the arterial road network and access to a public road for heavy vehicles. Rowan 1. Conversely, according to Rowan, the acquired lands would, as at the date of the acquisition, retain their rural character because: 1. they would not be included in non-rural zoning when any future environmental planning instruments were gazetted; 2. they were not coloured blue in the A&A precinct mapping which meant that it must be "agriculture" and not "agribusiness"; and 3. the concept of an agri-port was too ill defined and not determined to be feasible beyond that of speculation. 1. Therefore, it was Rowan's opinion that the highest and best use of each of the parent parcels was the current agricultural/pastoral purpose, occupied by existing rural residential dwellings, together with any other permitted land use in the RU1 zoning pursuant to the LLEP. 2. Rowan's opinion was informed by the following matters: 1. given the size of the parent parcels the minimum size requirement of 40 ha under the LLEP did not require their further subdivision. Whereas there were no minimum lot size requirements for any permissible uses within the RU1 - Primary Production Zone; 2. alternative potential land uses were limited to those permitted in the RU1 zone despite the parent parcels being identified as "Unzoned Land" under the WSEA SEPP. Although as at the acquisition date the WSEA SEPP allowed for additional permitted uses, approval for such uses was unlikely due to the requirements of the WSEA SEPP, including that of compatibility with uses on adjoining land; 3. although the 2018 District Plan included a plan that depicted the parent parcels as within a "Land Release Area", prior to the acquisition date the Stage 1 LUIIP had been released and in that document the parent parcels were designated as "agricultural" within the A&A precinct. This was similar to the use regime that currently exists under the RU1 – Primary Production zoning in the LLEP; 4. the identification of the A&A precinct under the Stage 1 LUIIP as a non-initial precinct affirmed that future planning for that precinct was not scheduled within the five years following the release of the Stage 1 LUIIP (from August 2018 to August 2023); 5. potential future development in the "agricultural" area of the A&A precinct under the Stage 1 LUIIP included ongoing agricultural production, intensive horticulture, food processing and food technology. Other than food research and technology, each of the potential future uses in the "agricultural" area of the A&A precinct was already permitted in the RU1 – Primary Production zone, and therefore, applied to the acquired lands as at the acquisition date; and 6. it was unlikely that the current planning provisions for the rural zones under the LLEP for land also located within the A&A precinct would be altered in the short to medium term. Rather, the transition of existing agricultural lands to alternative uses would be considered as part of any long term planning for the aerotropolis that would be reviewed and monitored. The Submissions of Applicants on Highest and Best Use 1. The applicants relied upon "an abundance" of strategic planning material that they submitted demonstrated that the acquired lands were part of the aerotropolis precinct and that, therefore, any hypothetical purchaser would not consider it to be, as Rowan did, land for agricultural purposes with its existing rural landscape to be retained. 2. The applicants were critical of Rowan's evidence in several key aspects: 1. first, he did not particularly consider the Draft District Plan that introduced the concept of an aerotropolis near the new Western Sydney Airport (T83:20-39). This ignored information that was available to the hypothetical purchaser (T182:20-33); 2. second, he focussed almost exclusively on the Stage 1 LUIPP and did not sufficiently take into account the other strategic planning material available at the relevant time; and 3. third, he arbitrarily bifurcated the A&A precinct in the Structure Plan so that "agribusiness" (confined to the blue "flexible employment" to the north of that precinct) had potential but "agriculture" (confined to the yellow) did not. In other words, he considered that "agribusiness" was excluded from the yellow area marked as "agriculture" in the Structure Plan on the basis that the "the flexible employment" portion of this precinct "envisages something else other than agriculture…so to the extent that there needs to be agribusiness to support the agricultural uses in the precinct, it's going to occur in a blue area. That's why the, the precinct is names [sic] with two names, because it's got two colours" (T86:25-33). There was, however, nothing in the Stage 1 LUIIP that made this distinction (T88:14-16). 1. The applicants also submitted that the evidence disclosed that the yellow delineation in the A&A precinct would not retain only short to medium rural zoning. In addition to the Stage 1 LUIIP, they relied upon the WSEA SEPP, the Draft District Plan, the Growth Servicing Plan, the Greater Sydney Regional Plan and the 2018 District Plan. 2. The applicants emphasised that this objective evidence was consistent with Haskew's opinion. It was Haskew who identified the potential location of an agri-port in the A&A precinct and concluded that the A&A precinct was transitioning away from being an exclusively rural area. This was to be contrasted with Rowan's unsustainable evidence that market participants as at the date of the acquisition, having regard to the strategic planning material available at that time, would view the opportunities afforded by the aerotropolis or agri-port within the A&A precinct as a long term opportunity, based only on the differentiation of the blue and yellow designated land within that precinct. On the contrary, the colour differentiation was due to hydrology and the known sewerage catchments and would not have a significant impact on the market. 3. Haskew's foresight, and that of any hypothetical parties to a sale of the acquired land, was confirmed by the fact that the whole of the yellow area is now zoned "agribusiness" under the State Environmental Planning Policy (Western Sydney Aerotropolis) 2020 that commenced on 1 October 2020 ("Aerotropolis SEPP"). 4. Finally, the applicants relied upon the fact that the A&A precinct land was not incomparably different to other land with the Stage 1 LUIIP precincts for valuations purposes (explained further below). The Submissions of TNSW on Highest and Best Use 1. TNSW submitted that Haskew's opinion that the highest and best use of the acquired lands was for medium term redevelopment potential for agribusiness related enterprises having regard to their proximity to the new Western Sydney airport ought be rejected. This was because, first, as to the timing of any rezoning of the acquired land, as Haskew conceded, the A&A precinct was not identified in the Stage 1 LUIIP as one of the first precincts to be released (T73:22-32), and moreover, he noted that the potential timing of any agribusiness was not clearly stated in that document. 2. Second, in respect of the likelihood that the rural zoning under the LLEP or that agricultural uses more generally would be retained in the "agricultural" area in the Structure Plan to the Stage 1 LUIIP (the area marked in yellow), Haskew agreed that as at the date of the release of that document, the A&A precinct was to keep its rural zoning under the LLEP and that amendments to any relevant LEP would be on an "as need basis" (T73:40). In addition, he accepted that if he only had regard to the Structure Plan, a logical conclusion was that the Stage 1 LUIIP maps the A&A precinct as "agricultural", with the existing rural landscape to be retained. He also agreed that there had been a strategic decision to include food production in proximity to the new airport (T75:42-49). 3. Third, in relation to the certainty as to the type of uses likely to be permissible in the "flexible employment" blue area on the Structure Plan as at the acquisition date, he accepted that there was little detail in the Stage 1 LUIIP about what was intended by this designation. Haskew agreed that the description of the "flexible employment" area in other precincts (for example, the Aerotropolis Core precinct and the Northern Gateway precinct) suggested that what was contemplated in those precincts excluded "agricultural" or "open lands" (T73:09-14). Rather, what was envisaged within those precincts was urban or industrial development that emphasised employment, taking advantage of the infrastructure in the Northern Gateway and that residential and commercial development was not anticipated within the A&A precinct (T76:15-18). Finally, he acknowledged that the Stage 1 LUIIP identified that the A&A precinct was to be complimentary to, and not in derogation of, the agriculture activities within the surrounding area (T76:05-08). 4. Fourth, Haskew conceded that, despite references to this type of use throughout his evidence, there was no "agribusiness" precinct in the Stage 1 LUIIP and the term was not defined in that document. Furthermore, whatever was meant by that term in the Stage 1 LUIIP was uncertain and would vary from individual to individual (T102:23-32 and 106:30-45). 5. Fifth, both Haskew and Rowan agreed that the uses contemplated in the A&A precinct comprehended lower intensity agribusiness within the yellow "agricultural" part of the A&A precinct and more intensive agribusiness activities were contemplated in the blue "flexible employment" part of that precinct (T106:01-10). 6. Sixth, Haskew's reliance on a potential "agri-port" in the A&A precinct emerged for the first time in the joint town planning expert report which Haskew described as a "very large and highly industrial high tech facility" similar in scale and intensity to Port Botany and the A7 agri-port in the Netherlands. TNSW submitted that this vision was implausible and did not withstand cross-examination in circumstances where Haskew conceded that: 1. there was nothing in the Stage 1 LUIIP that indicated that any agri-port would be similar to the examples that he had given (T110:35-49); 2. the location, size and feasibility of any potential agri-port was attended by a high level of uncertainty and that, although there were some references to an "agri-port" in the Stage 1 LUIIP, the term was not defined (T109:17-110:03). Nor was any detail given about the timing of the delivery of any such infrastructure (T110:35-43); 3. any potential agri-port would be located within the "flexible employment" area on the Structure Plan given its proximity to the future alignment of the M12 (T115:07-15); 4. there was limited material available in the market relating to the potential agri-port and nothing in the market concerning its possible footprint (T119:26-34); and 5. the KPMG study would not have been known to any parties to any hypothetical sale in October 2018 (T113:05-30). The Highest and Best Use of the Acquired Lands is Not that of a Rural Designation 1. In my view, the evidence of Haskew is to be preferred and Rowan's conclusion that the subject lands have as their highest and best use the existing rural uses ought not be accepted. My reasons are as follows. 2. First, as outlined above, the overwhelming preponderance of the strategic planning material since the release of the Draft District Plan, strongly supports the conclusion that the development potential of the acquired lands will be driven by the role that the agribusiness precinct will have in the precinct planning under the Stage 1 LUIIP and the development of the Western Sydney airport, even in its early stages. While as at the date of the acquisition the agribusiness precinct was not identified as one of the three stage precincts to be released for precinct planning, the Stage 1 LUIIP makes it clear, in my opinion, that the development potential under the current LEPs for Penrith and Liverpool will be reviewed and expanded as necessary to include this use. The agribusiness development can reasonably be expected to include high intensity agricultural and horticultural activity, as well as logistics and freight operations servicing other land within the 2400 ha precinct and outside the aerotropolis. 3. Reinforcing this conclusion is the fact that the subject lands were listed under all of the pre-Stage 1 LUIPP documents within lands identified as having a future urban use. 4. Second, that the precise location of any future agri-port was not known as at the acquisition date, while a matter to take into account, is not determinative. I readily find that parties to the hypothetical sale would have been aware of the expressed need for an agri-port in, or within reasonable proximity to, the location of the acquired lands. They would have also, in my opinion, been aware that an agri-port would be a catalyst for agribusiness development throughout the surrounding areas and would create a demand for the release and development of nearby precincts of land. As a matter of logic, and in conformity with the strategic planning material, the location of the agri-port will be in the agribusiness precinct. 5. I agree with the applicants that Rowan's evidence was characterised by an over-reliance on the designations in the A&A precinct in the Stage 1 LUIIP to the detriment of other available strategic planning material that a hypothetical purchaser would have had regard to (T182:28-44). 6. Rowan's division in the A&A precinct between the blue ("future employment") and yellow ("agriculture" and "agribusiness") areas which was to the effect that because the subject lands were not coloured blue within the precinct meant that they were to be used for agriculture (which did not have potential) and not agribusiness (which had potential) cannot be maintained. This is because, as he accepted in cross-examination, not only was there nothing in the Stage 1 LUIIP that makes this distinction (T88:14-16), but his evidence was, when challenged, equivocal. For example, he accepted that agribusiness could occur in both the blue and yellow areas of the A&A precinct (T91:01-10). In my view, this concession significantly undermined his opinion that the yellow marked land would retain rural zonings until some distant future date. 7. The better view is that the whole of the A&A precinct is designated as "agriculture" and "agribusiness". To the extent that there is a particular area in the north of the precinct that is identified for "future employment" does not exhaust the potential for agribusiness uses across the whole precinct. I do not accept that agribusiness is only to be carried out in the blue area on the Structure Plan. Rather, the better understanding of the colouring of the A&A precinct on the Structure Plan is that the entirety of the precinct has potential future development opportunity for both agricultural and agribusiness uses. 8. As indicated above, there is an abundance of material strongly suggesting that the yellow section in the A&A precinct will not retain only a short to medium term rural zoning. For example: 1. the WSEA SEPP situated the acquired lands within the BWSEA precinct; 2. the Draft District Plan introduced the concept of an aerotropolis in proximity to the Western Sydney airport and included a plan indicating that the subject lands would be in an "Urban Area" rather than a "Metropolitan Rural Area"; 3. the Growth Servicing Plan depicted the subject land within the "Badgerys Creek Airport Precinct"; 4. the Greater Sydney Regional Plan depicted the subject land within the "Western Sydney Airport-Badgerys Creek Aerotropolis" and described the area as being the "Western Economic Corridor" and "New international airport and aerotropolis", in addition to references to "Defence and aerospace activities" and "Trade, freight, logistics, advanced manufacturing, health, education and science". Objective 20 of that plan (see earlier in the judgment) described the land in the following terms, "Western Sydney Airport and Badgerys Creek Aerotropolis are economic catalysts for Western Parkland City"; 5. the 2018 District Plan depicted the land next to a "Metropolitan Cluster" and within "Potential Future Industrial/Employment Land"; 6. the KPMG study dealt with, among other things, the agri-port; and 7. the Stage 1 LUIIP included the land in the A&A precinct in which the agri-port will be located. 1. Third, unlike Rowan, Haskew's evidence, especially that given by him in the joint planning expert report, was consistent with the objective evidence insofar as he had been "forecasting and tracking strategic planning decisions concerning the aerotropolis since late 2015" and the State 1 LUIIP was "broadly consistent" with his predictions for the A&A precinct. Furthermore, that upon further reflection, co-locating agricultural functions with the Western Sydney airport was logical for an aerotropolis and the inclusion of an agri-port on the western side of the airport was a sound land use planning principle. Accordingly, as at the date of the acquisition, the agri-port was a factor which would influence the timing of decisions concerning expanded land use permissibility within the A&A precinct. 2. As stated above, Rowan dismissed the significance of the potential location of the agri-port and did not agree that there would be a move away from a rural zoning or agricultural use in the short and medium term although he accepted that there would be additional permissible uses in the long term (T97:27-98:27). However, in my view, this position was not tenable in the face of the abundance of strategic planning material referred to above. 3. By contrast, Haskew gave a cogent explanation as to the reason for the difference between the blue and the yellow coloured areas, namely, the demarcation aligned with hydrology catchments and sewer constraints to confine some of the land in the A&A precinct to uses that involve lower employment density such as freight logistics (T98:33-99:01). I find this explanation to be more persuasive than that proffered by Rowan. As a result, in my view, the distinction between the colours would not have a significant impact from the perspective of the hypothetical purchaser and that parts of the land within the A&A precinct, including the acquired lands, given their location, would have significant potential beyond that of a standard rural zoning, irrespective of the uncertainty of the precise location of the agri-port. As Rowan ultimately agreed, if the agri-port was deemed feasible, "then yes, one would start to look at examples of where it has been placed in other locations and gain some confidence about that" (T126:07-45). This is precisely what Haskew did. 4. Fourth, I note that the applicants relied upon the Aerotropolis SEPP that commenced on 1 October 2020 to confirm Haskew's foresight as to the development potential of the land insofar as the area marked in yellow in the State 1 LUIIP is now zoned "agribusiness". Events after the date of acquisition may be relevant to confirm the reasonableness and correctness of evidence of the foresight that the hypothetical parties would have had at the date of acquisition when considering the highest and best use of the land (Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 at 557F and 567A-C, Barkat at [19]-[21] and Apokis v Transport for NSW (2020) 101 NSWLR 844; [2020] NSWCA 39 at [36] and [42]-[43]). As was stated in the seminal case of Spencer v Commonwealth (1907) 5 CLR 418; [1907] HCA 82 (at 441): We must further suppose both to be perfectly acquainted with the land and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding feature, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever, in the amount which one would otherwise be willing to fix as the value of the property. 1. In this case, the use of the Aerotropolis SEPP may be permissibly used to confirm a foresight already established on the basis of the existence of the strategic planning material discussed above. The planning evidence of Haskew and his foresight was, as I have concluded, established in the evidence before the confirmatory rezoning came into effect. I would have reached the same conclusion irrespective of the absence of any definition of "agribusiness" in the Aerotropolis SEPP. In short, Haskew's knowledge of the existing relevant circumstances does not amount to an "uncommon gift of foresight" (Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Limited (1934) 51 CLR 509; [1934] HCA 41 at 515). 2. To reiterate, however, even if consideration of the Aerotropolis SEPP is not permissible, my conclusion as to the highest and best use of the acquired land remains unchanged for the reasons given above. 3. Fifth and finally, in relation to the "significant concessions" submitted by TNSW to have been made by Haskew during his cross-examination as to the timing, likelihood and certainty of any change to the zoning of the acquired lands, these did not sufficiently undermine the substance of his evidence such that it ought to be rejected. On the contrary, it demonstrated, unlike Rowan, a commendable willingness to agree to reasonable propositions thereby strengthening his testimony. 4. For all these reasons, I do not accept Rowan's evidence that the highest and best use of the land as at the date of acquisition was rural. Valuation Methodology 1. As agreed by the parties, the market value of land under s 56(1) of the JT Act is determined by what a willing purchaser would pay and what a not unwilling vendor would accept for the land (Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 at [51]). 2. The determination is informed by four steps (New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135 at [99]-[104] per Robson J): 99 It has been accepted that a generally valid method of conducting a comparable sales approach is to undertake it in the four steps of accumulation, analysis, adjustment and application: Constantine v Blacktown City Council (No 2) [2016] NSWLEC 81 at [100] (Moore J); Hoy v Coffs Harbour City Council [2015] NSWLEC 128 at [83] (Pain J) (leave to appeal this judgment was refused in Hoy v Coffs Harbour City Council [2016] NSWCA 257 at [61] (Bathurst CJ, with Simpson and Payne JJA agreeing)); Allandale Blue Metal Pty Ltd v Roads and Maritime Services (No 6) [2015] NSWLEC 18 at [344] (Pain J); Marroun v Roads and Maritime Services [2012] NSWLEC 199 at [197] (Sheahan J and Parker AC) ('Marroun') (affirmed on appeal in Marroun v Roads and Maritime Services [2013] NSWCA 358 at [75] (Tobias AJA, with Basten and Gleeson JJA agreeing). 100 First, the valuer, judicial or otherwise, should accumulate comparable properties. In undertaking this process, the "sales to be treated as comparable sales need to be truly comparable", although the Court should not be "unreasonably selective" of its comparable properties in any event: Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111 at [18] (McHugh, Gummow, Kirby, Hayne and Callinan JJ). 101 As stated by Pain J in Trust Co Ltd v Minister Administering the Crown Lands Act 1989 (2012) 211 LGERA 158; [2012] NSWLEC 73 at [110]: While all comparable sales evidence may be considered relevant and so cannot be disregarded, the level of relevance of different comparable sales to the property may vary leading to the valuer attributing differing weight to different comparable sales. In Brewarrana Pty Ltd v Commissioner of Highways (1973) 6 SASR 541 at 551, Wells J observed: … there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. 102 Second, the valuer should analyse those comparable sales. This often involves converting the value of those sales into another measurement that can be easily compared: Marroun at [201] (Sheahan J and Parker AC). Examples of this process include converting those sales into unitary rates, such as a psm rate. 103 Third, the valuer should adjust those properties it considers comparable to create equivalence with the unimproved subject land. As stated by Biscoe J in Holcim (Aust) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]: The basis for the valuers' valuation assessments is the sales comparison method. Accepted valuation practice permits adjustments for differences, such as in location, area and time to enable valuers to have comparable values which, following adjustment, account for the various differences with the subject property. Such adjustments are generally based on a reasoning process drawing on the skill and experience of the valuer and are undertaken to derive an opinion of value through a deductive process. Because properties are rarely identical, adjustments for differences are obviously necessary but caution is required through making as few adjustments as possible, in a consistent manner, to ensure the reliability of the comparable sale when related to the subject property. Too many adjustments potentially render the comparable sale unsafe to rely upon. Caution is therefore required where large adjustments are to be made. Reflecting the significant roles of skill, experience and personal assessment in the adjustment process, the scope for differences in the quantum and direction of adjustment between valuers can be considerable. Third, the Court should then apply these adjusted values to the subject property. The purpose of this is to determine, based on comparable sales and as best it can, what value the subject property would obtain if it were to be sold on the market. 104 Fourth, the valuer should apply the comparable sales to determine a value of the subject land based on the adjusted values of the comparable properties. 1. In considering the highest and best use potential of acquired land, it is preferable, if possible, to have regard to sales that share the same likely future use because their development potential will be reflected in their sale price (Sandhurst Trustees Limited v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [73] per Biscoe J). 2. If no sales are directly comparable, the Court can adopt a 'top down' or 'bottom up' approach to valuation. This methodology was described in Attard v Transport for NSW (2014) 205 LGERA 396; [2014] NSWLEC 44 (at [69]. See also Sandhurst at [73]-[75] per Biscoe J and Maidment v Roads and Traffic Authority (NSW) (2006) 153 LGERA 249; [2006] NSWLEC 206 at [51] per Biscoe J): 69 Where there are no sales which are directly comparable, a "top down" or "bottom up" methodology is commonly used. For example, where the actual zoning does not reflect the potential future zoning that must be taken into account in determining market value, in a "bottom up" valuation land is valued on the basis of its existing zoning with an adjustment upwards for the chance of future zoning. In a "top down" valuation, land is valued on the basis of the prospective future zoning but a deduction is made for the chance that development may not eventuate and the time required before it may eventuate: Sandhurst Trustees Ltd v Roads and Traffic Authority of NSW [2006] NSWLEC 243 at [73]-[75] per Biscoe J; Maidment v Roads and Traffic Authority of New South Wales [2006] NSWLEC 606, (2006) 153 LGERA 249 at [51] per Biscoe J. In assessing the evaluation of a chance, it will seldom be possible to determine a figure that is demonstrably correct; one can only consider all relevant factors and make a judgment or "best guess": Liverpool City Council v Commonwealth of Australia [1993] FCA 539, (1993) 46 FCR 67 at [58] per Wilcox J. 1. Which method, either 'top down' or 'bottom up', should be applied in a particular case depends largely on the degree of likelihood that a prospective future zoning will come into effect and the likely time frame (Sandhurst at [77]-[84]). 2. In Sandhurst, Biscoe J applied the 'bottom up' valuation methodology with a 25% premium added to the current market value of the land based upon its present zoning. In that case, his Honour held that the hypothetical buyer and seller would have been cognisant of the competing town planning views concerning the realisation and timing of the development potential of the acquired land. 3. If, however, comparable sales are available then their direct comparison provides a more conventional method of valuation. In Marroun v Roads and Maritime Services [2012] NSWLEC 199 this Court described the applicable principles as follows (at [196]-[199]): 196 It is well established that, if comparable sales are available, their direct comparison should provide the conventional method of valuation (Graham Trilby Pty Ltd v Valuer General [2009] NSWLEC 1087 at 41 ('Trilby 2009'); Redeam Pty Ltd v South Australian Land Commission (1977) 40 LGRA 151 at 156; River Bank Pty Ltd v Commonwealth of Australia (1974) 31 LGRA 244 at 484). 197 Such a direct comparison process requires the accumulation, analysis, adjustment, and application, to the subject site, of genuinely comparable sales. A court depends upon the established expertise of valuer witnesses called on both sides of the case. As Sugerman J said in Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1, at 18-19: "The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant." 198 The valuation experts, firstly, seek to accumulate a pool of relevant comparable sales, from which information and evidence may be deduced concerning the value of the subject property. Generally the competing parties produce lists which the court must sift to identify some which are "truly comparable", or a "reasonably representative" sample, and "relevant and sufficient in volume" (Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111, at 121). Where the comparable sales differ in substantial ways from the subject property, a process of reasoning is required to establish their utility or otherwise (Leichhardt Municipal Council v Seatainer Terminals (1981) 48 LGRA 409, at 414). 199 Wells J said in Brewarrana v Commissioner of Highways (No 2) (1973) 6 SASR 541; (1973) 32 LGRA 170 ('Brewarrana') (at p551): "there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. ... The evidence in this case suggests strongly to my mind that, at the initial stages, a valuer will almost certainly look at all known sales in potentially relevant areas, if for no other reason than to discern patterns of prices and changes in price levels over important periods. ... It is, in my view, all a matter of degree: some adjustment is always necessary; too much adjustment will render it unsafe to use a sale, subject to such a degree of adjustment, for the purpose of the reasoning process in the comparable sales method." 1. The applicants submitted that neither a 'top down' nor a 'bottom up' approach was appropriate in either set of proceedings because no single and reliable adjustment could be made, and moreover, because there were a sufficient number of comparable sales with features capable of adjustment that were currently within the Stage 1 LUIPP boundaries. 2. However, as is explained in detail later in the judgment, marked differences in the approaches taken by the expert valuers, including in respect of the methodologies that they applied and the town planning assumptions that they adopted, presented the Court with significant challenges in meaningfully assessing the comparable sales relied upon by the parties in performing the judicial evaluative task. Limitations with the evidence of the applicants' valuer, in particular, compounded these difficulties. 3. Although I have found that the highest and best use of the acquired land is not rural, for reasons that will come apparent below, it is not the case that the analysis of the comparable sales accumulated by the applicants' valuer can be relied upon to enable the Court to employ the more conventional method of valuation urged upon it by the applicants. 4. In my view, having regard to the findings that I have made concerning the highest and best use of the acquired land, but nevertheless cognisant of that the hypothetical buyer and seller would be aware of the competing town planning views concerning the uncertain timing of the development potential of the acquired land, a 'top down' analysis is to be preferred in assessing market value. In this 'top down' valuation the land is valued on the basis of the prospective future zoning anticipated by Haskew but with a deduction made to account for any uncertainty that the development potential may not eventuate, or may take longer to eventuate. Expert Valuation Evidence 1. The applicants relied upon the expert valuation evidence of Peter Phippen contained in separate reports for each matter dated 24 July 2020. 2. TNSW responded with the valuation evidence of David Lunney in two reports dated 22 July 2020 (one for each matter), together with a schedule of comparable sales as seen during the inspection by the Court on 10 August 2020. 3. Two joint expert reports were prepared by the valuers: 1. a report by Phippen and Lunney dated 5 August 2020 ("the joint valuation report"); and 2. a Court ordered supplementary report by Phippen and Lunney dated 26 August 2020 ("the supplementary joint valuation report"). 1. The parties also relied upon reports from two stormwater engineers, Peter Mehl (for the applicants, dated 10 June 2020), and Terrence Hams (for TNSW, dated 17 June 2020). They prepared a joint report dated 3 July 2020. The opinions of the stormwater engineers did not provoke much controversy and generated limited challenge. 2. The parties also relied on documentary material tendered to the Court. 3. In their joint valuation report the valuers agreed on: 1. the location of the parent parcels, the acquired lands and the residue lands; 2. the title particulars of the subject lands; 3. the dimensions of the subject lands; 4. the current zoning of the subject lands; and 5. the improvements to those lands. 1. Because there was limited sales evidence from the A&A precinct at the relevant time, the valuers had regard to sales outside that precinct and selected those that required the least amount of adjustments. 2. However, as there was no definitive 'top' or 'bottom' to the sales that each valuer relied upon for the particular market having regard to the highest and best use of the subject land, caution must be adopted in respect of the analysis of the comparable sales. In this instance, most of the sales selected have a rural zoning and an issue arose as to whether it was appropriate in absence of comparable sales of land with the same development potential to take rural sales and adjust them up for medium density residential potential or take medium density residential sales and adjust them down on the basis that the future potential zoning has not yet been achieved. 3. The approach to be undertaken by the Court in the task of judicial valuation when there is a range of advice that could have been given to a hypothetical purchaser is well known and not repeated here. However, it is worth emphasising that while a general principle exists that in determining compensation to a dispossessed owner doubts should be resolved in favour of a more liberal estimate, this does not abrogate the need to engage with, and evaluate, evidence and competing witnesses. It is not a licence for a court to accept one expert over another without assessing the evidence in the usual way (Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391 at [3]-[4] per Allsop P). 4. It is somewhat trite to observe that the dispossessed owner is to be compensated on the basis of the acquired land's highest and best use. As explained above, I have found that that future uses in the A&A precinct under the Stage 1 LUIIP will, in the medium term, have a redevelopment potential for agribusiness related enterprises with the potential for an agri-port. 5. Having said this, the hypothetical buyer and seller would have been cognisant of both of the competing town planning views (and any other relevant information, including the expert stormwater evidence) concerning the realisation and timing of the development potential of the acquired land (Spencer at 441 and Sandhurst at [86]-[93). This includes, that as at the acquisition date: 1. the acquired land was zoned RU1 – Primary Production under the LLEP other than the narrow strip along the road frontage of the Buhachs's land (2292 The Northern Road) which was zoned SP2 – Infrastructure under that instrument; and 2. while the future development potential and rezoning of the acquired land was attended by some uncertainty it was nevertheless reflected in the strategic planning documents referred to earlier in the judgment. 1. It was for this reason that TNSW submitted that a 'top down' approach was not appropriate because the town planning advice did not establish that it was highly likely that the acquired lands would be rezoned to a higher and better use in the short term. Rather, the acquired lands should be valued using the 'bottom up' approach, that is, upon the basis of the current zoning with a 20% premium added for the chance of a higher or better use being realised. As I have concluded above, I do not agree. In my opinion, consistent with the evidence of Haskew, the likelihood of the land being rezoned to reflect its highest and best use in the short to medium term can be found with sufficiently reasonable certainty. Valuation Evidence in the Before Scenarios Phippen 1. Initially Phippen relied upon 16 sales but identified five which were key. Of the remaining sales, some set a "floor" insofar as the acquired lands were not worth less than those particular sales, and therefore, established a minimum achievable price. Other sales, it was submitted, provided useful evidence to demonstrate the quantum of adjustments that were needed to be made for the selected sales. 2. In his evidence in chief, Phippen valued the Z Buhach property (at 2700 Elizabeth Drive) as follows: The valuation calculations for the parent parcel "before" the date of acquisition, based on direct comparison approach, are as follows: Item Size $ psm Value Parent parcel 121,400 $220.00 $26,708.000 Improvements $280,000 Total Value $26,988.000 1. In respect of the Buhachs's land (2292 The Northern Road) his initial opinion as to the value of that acquired land was: The assessment of market value in the "Before" scenario includes the market value of the parent parcel and the improvements. The valuation calculations for the parent parcel "Before" the date of acquisition, based on the direct comparison approach, are as follows: Land Area Size $ psm L[and] V[alue] Parent parcel 106,530 $150 $15,979,500 1. To this land value Phippen added improvements of $120,000 to achieve a total value of $16,099,500. 2. In the joint valuation report Phippen relied upon 13 sales, of which three were considered to be key and another two that had benefits other than merely deriving a rate per m2. The remainder were again relied upon insofar as they purported to set a minimum floor price (that is, that the parent parcels could not be worth less than those particular sales) and were used to demonstrate the quantum of adjustments that needed to be made for other sales, especially as some of the sales were within the first three precincts to be released and others were within the aerotropolis core. 3. Phippen considered (in order of importance) sales 9 (1669-1723 Elizabeth Drive, Badgerys Creek), 10 (10 Martin Road, Badgerys Creek), 12 (275 Adams Road, Luddendam ("the quarry sale")) and 13 (1745 Elizabeth Drive, Badgerys Creek) to be the most appropriate for adjustment. Sales 9 and 13 were similar sized parcels and Phippen opined that they indicated rates that he believed would apply to the parent parcel. Sale 7 (2830 The Northern Road, Luddenham) was the only common sale, but he noted that it was sold to the acquiring authority and that it pre-dated the Stage 1 LUIIP by two months. 4. It is not necessary to set out in the judgment the various features of each sale and the adjustments made by Phippen for the time, location, size, environmental controls and quality of each sale, to which I have had regard. Suffice it to note that: 1. sale 9 – sold in August 2018 at a rate of $130.49m2. After adjustments the rate was $226m2; 2. sale 10 – sold in October 2018 at a rate of $283m2 to a developer. According to Phippen, the sale was a very reliable comparable sale which, after adjustments, resulted in a rate of $326m2; 3. sale 12 – the quarry sale, which Phippen viewed as a floor for the value of the parent parcels given how inferior the sale was in terms of its exposure and prominence. It was, however, the only other sale available for comparison in the A&A precinct. It sold in 2019 at a rate of 73m2. After considerable adjustment he derived a rate of $118m2; 4. sale 13 – sold in November 2019 at a rate of $178m2. After his adjustments the rate was $220m2; and 5. sale 7 – Phippen noted this common sale was the only sale of Lunney's that was not purely rural. It sold in June 2018 to RMS prior to the release of the Stage 1 LUIIP but was included in the WSEA SEPP at a rate of $131m2. Again, Phippen regarded this as a floor value below which it would be unreasonable to value the acquired lands. The subject lands were more valuable, according to Phippen, because of their better location and fewer environmental constraints. After adjustment, a rate of $146m2 was derived, noting that the sale involved extenuating circumstances resulting in an "over-anxious vendor that doesn't quite comply with the definition of a market sale" (T203:11-24). It was a distressed sale in Phippen's opinion. 1. The applicants were critical of the Lunney sales that were in the main rural land located outside the Stage 1 LUIIP and the WSEA SEPP at the time of sale, and therefore, not comparable to sales of land in other LUIPP precincts or sales of land in an area that came to be a LUIIP precinct even if those sales occurred prior to the release of the Stage 1 LUIPP. In short, the applicants' case was that comparable sales could not be sales of rural land that was expected to remain rural, but should be based on sales of land within the Stage 1 LUIIP area which disclosed a useful and applicable range of values, required the least amount of adjustment, and were therefore more reliable. A fully informed and reasonable market participant as at the date of the acquisition would have seen the clear potential for future development of the acquired lands. According to Phippen, the Lunney sales could not be adjusted, were completely different, and appealed to a different class of purchaser (T217:34-41). 2. In respect of Lunney's sales, the applicants's submissions were as follows: 1. sale 1 (285 Willowdene Ave, Luddenham) which sold in July or December 2017 at a rate of 33m2. Lunney made a bottom up adjustment of 20% for potential and a 15% adjustment for its location in the WSEA SEPP in the A&A precinct in the LUIPP with good agri-port potential, to derive an adjusted rate of $45m2. However, Lunney agreed in cross-examination that the sale was at the western end of the aligned runway to the airport which would have been known to the parties transacting the sale and that it would not be attractive to a WSEA buyer. Rather, it would appeal to a class of purchaser who was a rural or agricultural buyer (T225:32-226:24), It was also not included in the Stage 1 LUIIP at the time of the sale; 2. sale 2 (108 Littlefields Rd, Luddenham) that sold on 5 October 2017 at a rate of $33m2. This sale was a rural lifestyle property but with no airport noise adjustment because the sale was on "relatively quiet rural roads" (T229:23-24). A 20% uplift was applied to the property for its potential and a 15% uplift was applied for its location in the WSEA SEPP in the A&A precinct, again with good agri-port potential. A rate of $45m2 was derived after adjustments. Under cross-examination Lunney agreed that a much greater adjustment than 15% would be warranted if the land that was being valued was WSEA future employment land, namely, 20-25% (T231:36). This resulted in, according to the applicants an inconsistency between the 20-25% adjustment that Lunny was prepared to make for the location of the land in the WSEA, compared to the 20% adjustment that he was prepared to make for the potential of the land; 3. sale 3 (88 Littlefields Rd, Luddenham) which sold on 4 December 2019 at $54m2. The same bottom up adjustments of 15% for location and 20% for potential were made by him resulting in a rate of $73m2. However, this was a rural sale with a different class of buyer; 4. sale 4 (Phippen's sale 7 – the comparable sale at 2830 The Northern Road), which sold in June 2018 at a rate of $131m2. Lunney agreed that it was inferior to the parent parcels but made no adjustments to the rate; and 5. an "on market" potential sale at 5 Anton Road, Luddenham. The property had been on the market since 26 April 2016 with a listing price of $9 million, with offers in the range of $6 to 8 million dollars, which after adjustments was assessed at between $88 to $132m2 depending on the sale price. Lunney agreed that the property was inferior to the parent parcels. Lunney 1. Lunny considered a range of town planning views in his evidence. Significantly, he factored in a premium of 20% to account for what the hypothetical purchaser might be prepared to pay for the acquired land based on the future development potential above that achievable under the current rural zoning under the LLEP. 2. According to TNSW, this approach was to be contrasted with the evidence of Phippen who did not take into account the town planning evidence of Rowan, nor the joint report of the planning experts. That is, Phippen ignored Rowan's opinion (T166:39-167:05 and 169:11-17) and formed his view on the future development potential of the subject lands entirely based upon the planning advice of Haskew. 3. TNSW was heavily critical of Phippen, who had stated that he had formed his own opinion as to what he perceived to be the view of the market as to the future development potential of the parent parcels and the residue lands on the basis of material that had been released by the NSW Government that was positive and optimistic. Phippen further said that he had expressly adopted the opinions of Haskew because they were in conformity with his own and described Rowan's evidence as negative and backwards. 4. Lunney relied principally upon his first three sales which were rural and were not proximate to the aerotropolis core. The fourth sale was the sale in common. 5. As stated, all of Lunney's sales were considered to have their highest and best use for rural and agricultural purposes. The adjusted land values derived rates of between $52m2 to $56m2 and Lunney adopted a rate of $54m2. Applying a 'bottom up' premium of 20% he derived a rate of $65m2. Accordingly, applying this rate to the Z Buhach parent parcel and adding the value of the improvements ($870,000), Lunney assessed the market value of that parent parcel at $8,759,050. 6. The adjustments to the land value for the three sales relied upon by Lunney, as adjusted by him, derived rates of between $44m2 and $47m2 for the Buhachs's parent parcel, with Lunney adopting the rate of $45m2. To account for the future zoning and potential land uses identified by Haskew, Lunney applied a 'bottom up' premium of 20% to the adopted rural value to derive a rate of $54m2. Applying this rate to the parent parcel and adding the value of the improvements ($180,000), Lunny assessed the market value of the Buhachs's parent parcel at $5,932,620. 7. Lunney further engaged in the exercise of calculating a 'before' and 'after' valuation on a top down basis adopting Haskew's town planning evidence for the Buhachs's and Z Buhach subject lands: Alternative "Before" and "After" Valuations by Mr Lunney on a Top Down basis, adopting (exclusively) Mr Haskew's Town Planning Position Scenario 2700 Elizabeth (Buhach v TfNSW) Value "Before" Land – 121,370 x $96/m2 = $11,651,520 improvements – (per report in chief) $ 870,000 Total – $12,521,520 Value "After" Land – Northern Reside 11,410m2 x $91/m2 = $ 1,038,310 Land – Southern Reside 66,730m2 x $74.40/m2 = $ 4,964,712 Less Acquired Easement 486.7m2 x $74.40 x 50% = $ 18,105 Improvements – $ nil Total – $ 5,984.917 [which should be $6,021,127] Diminution (compensation payable) $ 6,536,603 [which should be $6,500,393] Value 2292 TNR (Buhach and Buhach v TfNSW) Value "Before" Land – 106,530m2 x $79/m2 = $8,415.870 Improvements – (per report in chief) $ 180,000 Total - $8,595,870 Value "After" Land - 96,030m2 x $83/m2 + $7,970,490 Improvements – (per report in chief) $ 180,000 Total - $8,150,490 Diminution (compensation payable) $ 445,380 Summary of the Joint Valuation Evidence 1. As observed above, the valuers took very different approaches to the assessment of the market value of the acquired lands in light of their adoption of very different town planning opinions as to the future development potential and rezoning of those lands under the Stage 1 LUIIP. 2. The central area of disagreement was whether the valuers should undertake an assessment of market value upon being informed by all of the town planning evidence or whether it was necessary to adopt the evidence of one of the town planning experts over the other as to the highest and best use. This was ultimately manifested in the competing positions of the valuers set out in the joint valuation report: Table 1 Zravko Buhach v TfNSW – 2019/75642 – 2700 Elizabeth Value Mr Phippen Mr Lunney Value "Before" $26,988,000 ($220/m2) [including improvements of $280,000] $8,759,050 ($65/m2) [including improvements of $870,000] Value "After" $7,344,346 ($110/m2) – Southern residue $4,362.642 ($50/m2) – Southern residue $44/m2 - Northern residue $91/m2 – Northern residue Diminution (compensation payable) $19,643,654 $4,396.408 Table 2 Buhach & Buhach Proceedings – 2019/75655 – 2292 TNR Value Mr Phippen Mr Lunney Value "Before" $16,099,500 ($150/m2) [including improvements of $120,000] $5,932,620 ($50/m2) [including improvements of $180,000] Value "After" $11,618,600 ($120/m2) $5,701,725 ($57.50/m2) Diminution (compensation payable) $4,480,900 $230,895 Supplementary Joint Valuation Expert Report 1. Given the wide, if not irreconcilable, discrepancies in the expert valuation analysis, the valuers were directed by the Court to provide a supplementary joint valuation report dealing with the following issues: On the assumption that Mr Rowan's evidence about town planning issues is accepted, Mr Phippen is to set out his valuation, with all necessary explanation, of: (i) The corner block [Z Buhach property] before acquisition, and the northern and southern residue land after acquisition; and (ii) The battle-axe block [Buhachs's property], before and after acquisition. Mr Lunney is to set out in tabular form, with all necessary explanation, any further adjustments to the sales addressed by him in Annexure 3 to the Joint Valuation Report in proceedings…[Z Buhach] to take into account the publication of the LUIIP; and Mr Lunney and Mr Phippen are to note any areas of agreement or disagreement on topics 1 and 2, but need not do so if the position is already addressed in their original joint valuation report. 1. As Phippen observed, there were (with the exception of the sale at 2830 The Northern Road, which both valuers agreed was an inferior sale) no identical comparable properties relied upon by himself or Lunney, so they relied upon sales that had a variety of differences and tried to make those sales as comparable as possible with adjustments. 2. In the supplementary joint valuation report Phippen provided a table of 16 sales (13 from his previous evidence together with three additional new sales) that he relied upon. The additional three sales were sale 10, sale 13 and sale 14, all of which were located in the A&A precinct under the Stage 1 LUIIP. 3. Using these 16 sales, and purporting to adopt the planning evidence of Rowan, Phippen made overall adjustments between negative 3% and positive 84% for the purposes of direct comparison to the parent parcels: Adjusted Sales Assuming Mr Rowan's Planning Advice Sale $ psm Adjustments Total Adj. Adj. $psm Time Loc. Size Environ. Qlty. 1 $253 9.0% 5.0% -10.0% 20.0% 10.0% 34.0% $338 2 $178 9.0% 5.0% -10.0% 0.0% 7.5% 11.5% $198 3 $194 6.0% 5.0% -5.0% 5.0% 0.0% 11.0% $215 4 $152 5.5% 10.0% -10.0% 15.0% 7.5% 28.0% $194 5 $279 3.0% 5.0% -10.0% 0.0% 0.0% -2.0% $274 6 $231 2.5% 5.0% -5.0% 0.0% 0.0% 2.5% $236 7 $131 2.0% -10.0% 0.0% 5.0% 0.0% -3.0% $127 8 $146 1.5% 5.0% 0.0% 10.0% 7.5% 24.0% $181 9 $130 1.0% 5.0% 25.0% 20.0% 7.5% 58.5% $207 10 $114 1.0% 5.0% -10.0% 20.0% 10.0% 26.0% $143 11 $283 0.0% 0.0% -10.0% 10.0% 0.0% 0.0% $283 12 $132 -2.0% 5.0% 10.0% 20.0% 7.5% 40.5% $185 13 $119 -2.5% 5.0% -10.0% 20.0% 10.0% 22.5% $145 14 $127 -3.0% -5.0% -10.0% 15.0% 10.0% 7.0% $136 15 $73 -6.0% 5.0% 20.0% 15.0% 50.0% 84.0% $135 16 $178 -6.5% -10.% 0.0% 15.0% 10.0% 8.5% $193 1. Phippen thus assessed the following land value rates for the Z Buhach subject lands: 1. $180m2 for the parent parcel prior to the acquisition; 2. $36m2 for the northern part of residue land; and 3. $90m2 for the southern part of residue land. 1. His calculations were as follows: BEFORE Size $ psm Value Land 121.400 $180 $21,852,000 Improvements $ 280,000 Total $22,132,000 AFTER Size $ psm Value Land – North 11,410 $36 $ 410,760 Land – South 66,243 $90 $5,961,897 [which should be $5,961,870] Improvements $ 32,500 Drainage -$ 476,957 Total $5,928,200 [which should be $5,928,173] F M V Before $22,132,000 F M V After $ 5,928.200 [which should be $5,928,173] Compensation $16,203,800 [which should be $16,203,827] S a y …. $16,200,000 1. In respect of the Buhachs's property, based on Rowan's evidence, Phippen determined that the parent parcel had a 'before' value of $120m2 which was reduced by 20% in the after scenario: BEFORE Size $ psm Value Land 106,530 $120 $12,783.600 Improvements $ 120,000 Total $12,903,600 AFTER Size $ psm Value Land 96,030 $96 $9,218,880 Improvements $ 95,000 Total $9,313,880 F M V Before $12,903,600 F M V After $9,313,880 Compensation $3,589,720 S a y …. $3,590,000 1. By contrast, in the supplementary joint valuation report, Lunney provided an alternative 'top down' valuation in the 'before' scenario exclusively adopting Haskew's town planning evidence as follows for the Z Buhach and Buhachs properties: Z Buhach v TfNSW Proceedings – 2700 Elizabeth Drive Assumption Value Rate Written Evidence Adjustment • Land identified in the BWSEA Future Employment Use $170/m2 Joint Valuation Report Annexure 3 N/A • Land was not included within the "Agricultural" component of the A & A Precinct • Parent Parcel was in fact identified as the location of the potential future Agri-port $127.50/m2 Joint Valuer's report at [30-34] -25% ($170/m2 less 25% = $127.50/m2) • The Agri-port would be a very large and highly industrial high tech facility similar in scale and intensity to any globally recognised port facility including for example Port Botany • The Parent Parcel was not, in fact identified as the location of the potential future Agri-port $96/m2 Joint Valuers report at [35-47] -25% ($127.50/m2 less 25% = $96/m2) • No feasibility study had been undertaken Buhach and Buhach v TfNSW Proceedings – 2292 TNR Assumption Value Rate Written Evidence Adjustment • Land identified in the BWSEA Future Employment Use $140/m2 Joint Valuation Report Annexure 3 N/A • Land was not included within the "Agricultural" component of the A & A Precinct • Parent Parcel was in fact identified as the location of the potential future Agri-port $105/m2 Joint Valuer's report at [30-34] -25% • The Agri-port would be a very large and highly industrial high tech facility similar in scale and intensity to any globally recognised port facility including for example Port Botany ($140/m2 less 25% = $105/m2) • The Parent Parcel was not, in fact identified as the location of the potential future Agri-port $79/m2 Joint Valuers report at [35-47] -25% • No feasibility study had been undertaken ($105/m2 less 25% = $79/m2) Findings in Respect of the Expert Valuation Evidence 1. In my opinion, there were, however, a number of problems with the analysis adopted by Phippen in his valuation methodology, not only in the methodology that he employed generally, but also in the joint valuation report and the supplementary joint valuation report. 2. The approach adopted by Phippen and results that he arrived at strongly suggested that he did not properly apply the comparable sales methodology as articulated in the caselaw (see above at [133]). As Lunney explained (T178:31-179:11): WITNESS LUNNEY: There, there is - the Court is well aware of this so if - for, for simplicity I'll, I'll explain as simply as I can the application of the four As. What the valuer does, accumulates sales of potentially relevant properties from which he can derive certain rates, unitary rates per square metre is the most common. You analyse those. That's where the per square metre rate, for example, comes from. The third step is to adjust those sales to attempt to make them all comparable or to achieve equivalence between each sale property and the property that is being valued. Once you've done that, the adjusted value is indicative of the market value of the property asset that you are valuing. So, for example, if you start with a sale at $100 a square metre and the net adjustment is plus 10%, you end up with an adjusted value of $110 per square metre. If the analysis, if the accumulation, analysis and adjustment has been correctly undertaken the market value of the subject property would be $110 per square metre. There are some, some comments made by Mr Phippen in, in the joint report which I, I had difficulty understanding. For example, at paragraph 112 of the joint report, in that Mr Phippen is referring to his analysis and adjustment of the, the quarry property at Adams Road from which Mr Phippen derived an adjusted value of, from memory, $118 per square metre for the corner block. Mr Phippen makes the comment at the end of 112 that he holds the opinion that the market value of the, the subject property must be at least double the adjusted rate of that sale and, and I simply don't understand that because if the three As have been undertaken correctly that process, I don't agree with the way that Mr Phippen's done it but that process would suggest that the market value of the subject property is $118 per square metre, not double $118 per square metre and, and there are some other similar comments made throughout the joint report relating to the other sales and, and those comments caused me some concern that we might be misapplying the same method of valuation - not, not applying this method of valuation in the same manner. 1. As Lunney noted, Rowan's town planning evidence made a clear distinction between the two parent parcels and 12 of the 13 sales relied upon by Phippen, that were designated for future employment purposes and would appeal to a different market of prospective purchasers. The only difference between the approach taken in Phippen's evidence in chief and the supplementary valuation report, was to decrease the adjustment for location which was previously applied to all properties. Given that the location of the properties had not changed, a 15% downward adjustment was illogical and "there is no sound basis for this alternative method of valuation". 2. As for the inclusion of the Dwyer Road sales by Phippen in the supplementary valuation report, Lunney was rightly critical of Phippen's analysis that these sales were designated as being flood liable or were located within a different drainage catchment to the parent parcels and the other comparable sales. As Lunney correctly observed, they were all located within the same South Creek drainage catchment (not the Nepean catchment) which applied to the parent parcels. Accordingly, when adjusted for size and location, the Dwyer Road sales reflected land values which were significantly lower than the value of the land within the Western Sydney airport aerotropolis. 3. Further issues with Phippen's evidence included that, first, he made no meaningful attempt to engage with Rowan's opinion in relation to highest and best use as the following exchange demonstrates (T168:33-169:17): PRITCHARD: You haven't really grappled, have you, Mr Phippen, with Mr Rowan's opinion in relation to highest and best use, have you? You don't give any explanation as to why you do not accept Mr Rowan's opinion as to highest and best use other than to describe it as a rather pessimistic and negative view? WITNESS PHIPPEN: That's true. PRITCHARD: You didn't think it was appropriate when you prepared your report in chief to consider Mr Rowan's opinion as to highest and best use? WITNESS PHIPPEN: No. PRITCHARD: You make no reference to it at all. WITNESS PHIPPEN: That's true. PRITCHARD: Why didn't you have regard to the opinion of both planners in relation to highest and best use in preparing your valuation report? WITNESS PHIPPEN: Well, you're charged with assessing a figure that would be paid by a hypothetical purchaser. It's my opinion that a hypothetical purchaser of a property of this nature would consult a planner. Would they consult two? I don't know. My experience is they'd consult a planner and Mr Haskew is a planner that I am familiar with and I have found that his opinions are usually accurate and I just chose to go with his opinion because to me it's in line with, as I said, the government's positive view of what's happening in the Aerotropolis vicinity. PRITCHARD: So, you didn't grapple at all with Mr Rowan's opinion set out in his reports in chief in relation to highest and best use of these properties? You just ignored it, in effect, and chose to go with Mr Haskew, is that what you're saying? WITNESS PHIPPEN: Yes. 1. Second, the sales accumulated by Phippen were not comparable to the parent parcels or the residue lands in terms of their size, zoning or proximity to the Western Sydney airport and associated infrastructure. 2. Third, the sales were largely selected on the basis of their location within a highly generalised notion of the aerotropolis ("all of the land around the new Western Sydney Airport": T171:39-45), rather than upon a thorough understanding of the Stage 1 LUIIP and the strategic planning material available as at the acquisition date. Neither of the expert town planners endorsed Phippen's concept of the aerotropolis in this regard. 3. Fourth, Phippen ignored rural or agricultural comparable sales on the basis of their current zoning or the future designation under the Stage 1 LUIPP because, in his opinion, the market would perceive all land within the aerotropolis to have considerable potential (T172:07-16) and that the market would perceive that the yellow coloured land in the A&A precinct in the Structure Plan had a similar, if not identical, future development potential to other land in the aerotropolis and other precincts in the Stage 1 LUIPP, such as the aerotropolis core (T175:05-36). 4. Fifth, these opinions were, as TNSW properly submitted, inconsistent with the evidence of both Haskew and Rowan insofar as they agreed that as at the acquisition date the development potential of the parent parcels would likely be reflected in the Stage 1 LUIPP and any future rezoning of the land within the WSAGA (where the parent parcels were located) would be consistent with that planning document. 5. Sixth, to the extent that Phippen stated that real estate signage viewed by the experts during the site visit by the Court was consistent with his view of the development potential of the subject lands and what the market was likely to expect because the advertising emphasised the "aerotropolis precinct" and "rezoning in 2020" and "employment lands", this was, as Haskew noted, "well below the level of detail that the market interacts and exchanges properly on"(T69:41-42) and that it transacted on far more sophisticated and nuanced information than that provided for in real estate puffery. 6. I agree, especially having regard to the prices being achieved in the locality as at the date the of acquisition. As Phippen himself conceded, the most sophisticated information available in the market in relation to the A&A precinct at the relevant time was the Structure Plan in the Stage 1 LUIPP (T190:26-50). This acceptance is difficult to reconcile with his highly generalised approach to the comparable sales in the aerotropolis in his evidence. 7. Seventh, while the valuers agreed that it was important to consider the potential market to which the property would appeal at the accumulation stage of the comparable sales, it is the case that some of the aerotropolis core sales and the future employment sales that Phippen relied upon would not necessarily appeal to the purchasers of land in the agricultural component of the A&A precinct, which, as Lunney noted, Phippen largely ignored (T219:40-45). 8. In my opinion, Lunney was correct to note that Phippen could not assume that everything in the aerotropolis would be sufficiently identical that a potential purchaser would not appreciate the future use or most likely future use of various properties within it (T177:35-38). I do not accept that the market would treat all of the properties in the aerotropolis the same. As Lunney explained (T178:05-14): As, as an example of, of why I don't think the market treats then as all the same, on the site view towards the end we looked at three properties that I referred to as being located within the vicinity of Dwyer Road. Those properties are, are coloured yellow on the, on the structure plan to the LUIIP designated for agricultural use like the two subject properties and, when one compares the per square metre rate that one derives from the analysis of those sales, it is a very significantly different, very significantly lower rate than we see on some of the sales in the area which is referred to as the aerotropolis core and, and that different indicates to me that the market doesn't put them all in the same bucket, so to speak, as, as, as Mr Phippen has opined. 1. Eighth, when Phippen was initially accumulating his sales, and in his individual and joint valuation report, he was not aware that the parent parcels in both proceedings in the 'before' scenario were designated as "agriculture" in the A&A precinct in Stage 1 LUIIP. He also did not appreciate the inclusion of the Z Buhach northern residue land in the "flexible employment" zone within the A&A precinct. It was only during cross-examination that he accepted the A&A precinct included an "agricultural" and a "flexible employment" area (T193:42-49 and 366:05-06). 2. Nineth, Phippen repeatedly used the term "agribusiness" to refer to the precinct in which the parent parcels were located, however, again during cross-examination, he agreed that the references to "agribusiness" were in fact contained in the yellow "agricultural" areas in the Structure Plan (T174:25-49). Phippen's explanation, in my view, strained credulity insofar as he stated that it was his understanding that the yellow area was "agribusiness" land despite the fact that the legend clearly identified it as "agricultural" (T173:33-174:49). 3. These misconceptions were significant and adversely impacted upon the assumptions that Phippen relied upon in his valuation analysis. It explains, at least in part, why the sales accumulated by Phippen are not comparable in the before and after scenarios. It materially affected the valuation opinions proffered by him. The failure of Phippen to address the misunderstandings in the supplementary joint valuation report upon it becoming apparent demonstrates that Phippen's approach to valuation of the acquired land was unsound. 4. Tenth, unlike Lunney, Phippen did not adjust for the development potential of future use on the basis of any uncertainty applying to the future development potential and zoning of the subject lands (T208:08-15). Instead he accepted the evidence of Haskew without question. His failure to do so was, on any view, unrealistic. 5. In the supplementary joint valuation report Phippen analysed the comparable sales on the basis of Rowan's town planning evidence as to the highest and best use of the acquired land. He derived compensation for the market value of the acquired lands in the amounts of $3,590,00 for 2292 The Northern Road (the Buhachs's property) and $16,200,00 for 2700 Elizabeth Drive (the Z Buhach property). 6. According to the applicants, the 15% downward adjustment made by Phippen in the supplementary valuation report was premised upon an assumption that there was a substantial difference between the blue and yellow areas on the Structure Plan between the A&A precinct and the Badgerys Creek precinct, notwithstanding that the zoning remained the same. But neither the assumption nor the 15% downward adjustment were rational in light of the zoning. 7. Rather, as Lunney correctly, in my view, observed in the supplementary joint expert opinion, Phippen's downward adjustment of 15% to all of his comparable sales, irrespective of the potential of those sales under the Stage 1 LUIIP (for example, 12 of his 16 sales were located in the areas identified for future employment uses), was flawed (T213:25-34): WITNESS LUNNEY: I agree with Mr Phippen that his 13 sales are presently all zoned rural. The schedule that we talked about before which has been sent to the Court says as much. But, of course, it would be wholly inappropriate and incorrect to analyse those sales as if they were purely rural sales and add some sort of bottom‑up premium to them because they're not being transacted as rural sales, they've been transacted on the basis of the strategic future potential that Mr Phippen and I agree upon in the case of each and every one of those 13 sales. But, bottom‑up only works if you take sales that have been transacted for their pure underlying rural potential and adding something to that rather than adding something to a future urban value. 1. Eleventh, the adjusted range of Phippen's sales (of between $118 and $365m2) is so wide that it is strongly suggestive of error. Phippen agreed that the variation was considerable, although he did not consider it unusual (T186:13-39). By contrast, Lunney described it as "almost unprecedented" (T188:08-30). Lunney opined as follows (T187:42-188:30, emphasis added): In, in terms of adjustments generally, just before the lunchtime adjournment I think Mr Phippen said that he, his position was not that these 13 sales are all in the same future urban use bucket as the subject property and that they were all different or something along those lines and this is something that has separated Mr Phippen and I in this matter. When I look at the five matters for which adjustment has been made, none of those is for differing future urban potential. Now, if it was the case that a valuer took the view that the market considered, for example, the Northern Gateway to have different and superior future development potential to the agricultural component of the A&A precinct, that's the, that, that's a matter for which one would ordinarily see an explicit adjustment in a table of the type we see in paragraph 79, and because no adjustment has been made, my, my understanding of this process is one which implicitly assumes that the potential is the same and there's no differentiation in values in the broad aerotropolis precinct on account of future potential and, and, and I fundamentally disagree with that for the reasons that I said earlier. Moving to the, the, the, the intent of the adjustment, I explained before that what the valuer is trying to do here is to apply adjustments to render each and every comparable sale as close as possible comparable or to achieve equivalence between that sale and the subject property and that because taking a large number of sale, or a number of sales, you're referring, referring them all to a common reference point, typically - not always but typically - you see those adjusted values be within a relatively uniform ambit because that's, that's the whole purpose of the exercise. It's to say, "What adjustments do I need to make in an objective forward-looking process to each and every one of these sales to render it relevantly comparable to the subject property?" Now, I take Mr Phippen's point that markets aren't perfect and, and sometimes you will see some variation between adjusted values, that that variation can reflect a number of things. It, it can reflect the possibility that the market's not, not perfect. It can reflect the possibility that some of the, the adjustment is not sufficient or inconsistent in part. However, a range of values from $118 a square metre to $376 a square metres is, in my experience, almost unprecedented and, and that says to me as a valuer, if I look at a dataset like that that's gone through a proper accumulation, analysis and adjustment process, it, it says to me loudly and clearly something has gone horribly wrong in one or all of the first three As. I could have absolutely no confidence picking a value within that very broad range and it would ordinarily cause me to go back and revisit the entire process. 1. As TNSW submitted, Phippen failed to sufficiently allow and adjust for the uncertainty attending the future urban development of the A&A precinct and its anticipated zoning. Put simply, he views all of the land within the aerotropolis as having the same potential, which is unlikely to be the case. 2. For all these reasons, the Court places limited weight upon the valuation evidence of Phippen. 3. This is not, however, to state that the three Badgery's Creek sales upon which Phippen places the most emphasis (sales 9, 10 and 13) are to be wholly ignored by the Court. The sales are, as the applicants submit, more similar to the subject lands and are distinctly different from the three primary rural sales relied upon by Lunney that are outside the aerotropolis area and are directed to a different class of purchaser. 4. However, the range and reasons for the adjustments made to these sales by Phippen are neither credible nor compelling and while the Court has had regard to this sales evidence, again, it places only limited weight upon it. 5. Having said this, as noted above, in the supplementary joint valuation report Lunney applied Haskew's evidence with respect to the highest and best use of the land and made a 75% 'top down' adjustment to the derived market rates for the subject lands. He initially adjusted his derived rates downward by 25% because the lands fell within the yellow area of the A&A precinct and then he made a further adjustment of 50% to account for the uncertainty of the subject lands being included within the location of the agri-port. 6. The applicants contended that Lunney had provided no cogent rational for the additional 50% downward adjustment having regard to his earlier evidence where only a 25% discount was adopted by him. There is considerable force in this submission. It is not justified having regard to the evidence of Haskew which he purported to have regard to in arriving at his alternative valuation. 7. In relation to the one common comparable sale at 2830 The Northern Road, I have taken it into account but in doing so, I have noted that neither valuer placed significant reliance on the sale. The applicants reiterated that it was to be treated as a "floor value" given its inferior status to the subject lands and the fact that, according to Phippen (T203:11-24), it was a distressed sale that only sold for $131m2 . For these reasons it was contended that the Z Buhach parent parcel must attract a higher value than that attributed to it by Lunney. 8. As the applicants conceded in their oral and written submissions, the extenuating circumstances of the sale make it unreliable and I do not accept that it represents a "floor" price for the Z Buhach acquired land having regard to what I consider to be overly generous upward adjustments by Phippen to achieve a rate of $146m2. However, I agree with the submission of the applicants that even at $131m2, given that it sold just prior to the release of the Stage 1 LUIIP and was partly included within the WSEA SEPP, Lunney's resort to purely rural sales for the purpose of his valuation must be adjusted. 9. Thus, resolving any doubts in favour of the applicants, and given my conclusions above concerning both the highest and best use of the acquired lands, the problematic nature of the evidence of Phippen and the limited weight that I have afforded to his valuation, and in light of all of the matters that I have discussed and considered above, I adopt the valuation of Lunney, as modified by him to take into account Haskew's town planning evidence contained in the supplementary valuation report. 10. Accordingly, for the Z Buhach property (2700 Elizabeth Drive) this results in a value of $127.50m2 in the 'before' scenario for the parent parcel (this includes a 25% downward adjustment). I do so for the reasons expressed by him in the joint valuation report and the supplementary joint valuation report, but I reject any additional downward adjustment applied by him, which is not warranted on the town planning evidence. 11. In relation to the Buhachs's property (2292 The Northern Road), applying the same reasoning, I find that this results in a value of $105m2 in the before scenario for the parent parcel. 12. In so doing, I accept for the reasons expressed earlier in this judgment, and on the basis that they most readily conform with the town planning evidence of Haskew, the assumptions set out in respect of each parent parcel in the middle row of the tables prepared by Lunney set out above (at [180]). I do so notwithstanding that, as Lunney acknowledged in cross-examination (T332:37-39), that no feasibility study has been undertaken to identify whether or not the parent parcels would be identified as the location of the potential future agri-port or, assuming that an agri-port will be developed, its scope and scale. In my opinion, this justifies a 25% downward adjustment, but no more. Valuation in the After Scenarios 1. As the parties submitted, when dealing with the after scenario, the features of the land that are different as a consequence of the carrying out of the public purpose need to be identified. This evaluative task must be carried out not only across both properties but also across the two separate residue lands of the Z Buhach property. Injurious Affection and Betterment of the Z Buhach Property (2700 Elizabeth Drive) 1. According to Phippen, there were some improvements remaining on the northern and southern parts of residue land consisting of fencing, land clearing, dams and irrigation, to a total value of $32,500. Phippen – Northern Residue Land 1. The applicant submitted that the adverse effects of the carrying out of the public purpose on the northern residue portion of 2700 Elizabeth Drive were extensive and were confirmed by the Aerotropolis SEPP (which was permissible to take into account for this purpose: Roads and Maritime Services v Allandale Blue Metal Pty Ltd (2016) 212 LGERA 307; [2016] NSWCA 7 at [60]-[70]). 2. Leaving aside any foresight, it was submitted that the actual impacts upon this residue land included: 1. a reduced and fixed land area that constrained the current and future land uses insofar as the most valuable part of the property had been removed leaving an island with no prospect of amalgamation. The land was less suitable for farming enterprises in the short term; 2. there was a height differential with surrounding upgraded roads which removed its prominence and exposure and impacted upon the access to, and within, the land. The topographical constraints also limited the short term use and future development of the land and the impacts of setbacks to road frontages on all boundaries required as part of future precinct planning resulted in an inefficient development parcel; 3. the configuration of the land constrained its current and future use because the land was now an island and, again, the impact of setbacks resulted in an inferior development parcel which was less suitable for larger scale agribusiness and related enterprises in the medium term and substantially less suitable for farming enterprises in the short term; 4. vehicle access to The Northern Road, Elizabeth Drive and to other key transport routes and infrastructure corridors was impeded due to its island status with direct access no longer available. There was uncertainty in obtaining access for the purpose of redevelopment and inferior access arrangements than those available for the parent parcel, with southbound egress from the northern residue land to The Northern Road denied with resultant additional travel time. This was, the applicant submitted, consistent with the evidence of Rowan who agreed in cross-examination that access was substantially inferior to its immediate road boundaries (T148:50-149:16); 5. the northern residue and southern residue lands were physically separated with the challenge of selling two lots on one title. There was substantially less suitable farming enterprises available in the short term because there was no dam or any access to a dam by way of an irrigation system; 6. the road frontage was reduced; 7. there were constraints with respect to stormwater management, drainage and water quality; 8. there were acoustic impacts arising from the proximity of the land to the upgraded Elizabeth Drive and The Northern Road; and 9. there was no pedestrian access to either portion of the residue land. 1. For all these reasons Phippen attributed a rate of diminution of 80% for the northern residue portion of the Z Buhach land. Phippen – Southern Residue Land 1. In terms of the affectation on the southern residue land consequent upon the carrying out of the public purpose, the reduced and fixed area of this residue land meant that: 1. it was less suitable for larger scale agribusiness and related enterprises in the medium term; 2. it was rendered less suitable for farming in the short term; 3. it was suitable in the medium term to commercial agricultural purposes only in conjunction with amalgamation with an adjoining property; 4. the setbacks to road frontages resulted in an inefficient development parcel; 5. it suffered from the same topographical constraints as the northern residue land; 6. configuration of the residue land constrained it current and future land use given its irregular shape and the impacts of setbacks; 7. vehicle access to The Northern Road, Elizabeth Drive, and other key transport routes were either no longer directly available or resulted in uncertainty in procuring access for the purpose of redevelopment. In addition to the issues regarding vehicle access referred to above with the northern residue land, right turn egress into the southern residue land was denied and access was either restricted, or not available, for southbound traffic from The Northern Road. This was, the applicant submitted, consistent with the evidence of Rowan (T147:20-38); 8. the driveway design provided substantial access but additional roadworks were required at the owner's expense; 9. the easement land and the existing dams constrained current and future land uses insofar as they were impediments and uncertainty as to their removal, especially having regard to stormwater management issues identified by the storm water engineers (see also the evidence of Haskew which was said to be consistent in this regard: T148:31-48). It was anticipated that there would be increases in the volume and rate of discharge of stormwater flows onto the southern residue land increasing the rate of dam overflows and an elevated risk of scouring dam weirs and dam failure. Constraints regarding the viability of agricultural uses in the short to medium term arose from available land area, the location of the easement, and water quality. There were also setbacks surrounding the dams, and future zone of influence constraints arising from the installation of pipes in easements and the costs to the owner of managing these hydrological impacts; and 10. stormwater management, drainage and water quality issues arose from channelling stormwater through the easement. Hydrological risks and mitigation measures were identified in the Environmental Impact Statement including, significant increases in the volume and rate of discharge of stormwater flow and the impact of this on the viability of agricultural uses in the short to medium term and the cost and implications to the owner of managing these issues. 1. There was also reduced road frontage and adverse acoustic impacts associated with the southern residue land's proximity to The Northern Road and Elizabeth Drive as upgraded. 2. In relation to the drainage easement on the southern part of the residue land Phippen considered that no value was applicable. 3. Post the acquisition, Phippen was of the opinion that drainage works were required to the southern part of the residue land and estimated the total costs of these works at $476,957. The Acquired Easement 1. On 12 October 2019 the RMS (now TNSW) compulsorily acquired an easement to drain water 8.3m wide over part of the southern residue land comprising 486.7m2. The creation of the easement was for the purposes of diverting stormwater from the upgraded Elizabeth Drive and the realigned The Northern Road to an existing dam on the southern residue land. In so doing, a number of constraints to the existing and available agricultural uses and the future development and highest and best use of the southern residue land arose including: 1. the viability of the northern and southern residue land for agricultural uses in the short to medium term; 2. impediments to removing the dam from the southern residue land because the existing dam was connected to the easement and had become part of an integrated stormwater solution associated with the carrying out of the public purpose; 3. anticipated future setbacks surrounding the existing dam if the dam could not be removed from the southern residue land; 4. the cost of upgrading the dam to accommodate any projected stormwater run-off from the upgraded road; and 5. the costs and implications of managing the stormwater, drainage and water quality impacts from the upgraded road. 1. Because the easement land would be effectively sterilised from any future development potential, it was submitted that it should be valued at the same rate per m2 applied by Phippen in his after scenario adjustments to the southern residue land for 2700 Elizabeth Drive. 2. Accordingly, the diminution attributed to the southern residue portion was 50%. Phippen – Summary of Affection and Betterment of the Z Buhach Residue Lands 1. Phippen's conclusions as to the after value for 2700 Elizabeth Drive residue lands were as follows: After Acquisition 86. The affectations identified in connection with the northern residue land and the southern residue land have resulted in the reduction of these two parcels of land. 87. Regarding the northern residue land, given its size, isolation and other constraints discussed above, I would consider the land to be of limited value to the market in the short to medium term. Beyond that, it is difficult to say. For that reason, I have adopted a discount rate of 80% of market value. 88. Regarding the southern residue land, that land retains some value, albeit that the affectations will significantly impact the market value of the land. Further, the affectations are not uniform across the southern residue land, with the combination of the easement, the dams (which may or may not be capable of removal in the years ahead as a consequence of the public purpose) and the extended driveway 'congregating' at the eastern part of the land. That part of the site, in my view, retains little value to the market for the foreseeable future. The western portion of the southern residue land, fronting The (realigned) Norther Road, is less impacted, save with respect to some potentially longer vehicle travel issues (across the easement). Overall, I have adopted a discount rate of 50% of market value. 89. I have separated the land area of the easement from these calculations and have applied the discount rate of 100% of market value to that area, comprising 486.7 sqm, as it retains no viable use or development potential. 90. I have also made a minimal allowance for the remaining improvements on the northern and southern residue land. The only improvements remaining comprise the land clearing and dams, and some fencing and irrigation. However, I consider the dams and irrigation are virtually useless and have applied a greater discount to that applied in the "Before" scenario. 91. my calculations are set out below: Improvements Cost Deprec. C D R V - Fencing $5,000 75% $1,250 - Land Clearing $25,000 75% $6,250 - Dams & Irrigation $100,000 75% $25,000 Total Value $32,500 92. I have also included an allowance for the additional costs associated with managing the stormwater and drainage impacts of the public purpose and the acquisition of the easement on the southern residue land. These additional costs are set out below: Drainage Works Cost Rock armouring of "Dam 1" spillway and channel $7,659 Increased cost of pipe system $90,298 Increased size of water quality management devices $230,000 Fuel spill/pollutant capture tank/gross pollutant trap $149,000 Total $476,957 93. The valuation calculations for the parent parcel "after" the date of acquisition, based on the direct comparison approach, are as follows: Area Size Adjust. $ psm L V Northern residue land 11,410 80% $44.00 $502,040 Southern residue land 66,243.3 50% $110.00 $7,286,763 Easement land 486.7 100% $0.00 $0 Improvements $32,500 Less drainage works -$476,957 Total 78,140 $7,344.346 1. Accordingly, the market value for the Z Buhach property was calculated by him to be: Market Value Summary Total Fair Market Value – Before $26,988,000 Total Fair Market Value – After $7,344,346 Compensation $19,643,654 S a y … $19,640,000 Lunney – Northern Residue Land 1. Lunney assessed injurious affectation and betterment on the basis that they were captured in his 'before' and 'after' valuation. 2. He approached the valuation of the northern residue land on the basis that it was within the "flexible employment" area of the A&A precinct as a result of the public purpose causing the realignment of Elizabeth Drive which acts as a demarcation between the "flexible employment" and "agricultural" areas of that precinct. He derived a rate of $130m2 that he adjusted downwards by 20% for shape to take in account a reduction in efficiency accommodating design, building and parking. 3. He further adjusted the rate by 10% in recognition of the fact that, as the town planners agreed, access was inferior and that practical ingress was not available when travelling from east to west along the realigned Elizabeth Drive, and moreover, that practical egress was not available to the west, north, or directly from the residue land, but that turnaround facilities were provided to facilitate vehicle movements. Accordingly, he adopted a market value of $91m2. Lunney – Southern Residue Land 1. In respect of the southern residue land he made the following downward adjustments to derive a market value of $50m2 for the land that was not subject to the acquired easement: 1. 10% for shape; 2. 10% for access. However, he accepted in cross-examination that the adjustment could be 15% but doubted that it would be 20% (T347:37); and 3. 2.5% for topography, including the raised road level, and stormwater and hydrological impacts (T349:20). The Acquired Easement 1. In respect of the southern residue land that was subject to the acquired easement, Lunney concluded that Z Buhach's right to use and enjoy the easement had been diminished, and therefore, the market value of that portion of the southern residue ought to be discounted by 50%. Lunney – Summary of Affection and Betterment of the Z Buhach Residue Lands 1. The market value of the residue lands was therefore assessed by Lunney as $4,362,642, comprising: 1. the market value of the northern residue land at $1,038,310 (11,410m2 x $91m2); and 2. the market value of the southern residue land at $3,336,500 (66,730m2 x $50m2). Findings on the 'After' Scenario for the Z Buhach Residue Lands 1. I accept the submissions of TNSW that limited weight can be placed upon Phippen's downward adjustments for the northern and southern residue portions of the Z Buhach land. This is because: 1. on any view his adjustments were too high. So much so was accepted by him in cross-examination in respect of the 80% adjustment for the northern residue land (T362:25-27). As both valuers agreed, were this adjustment accepted, the land would have little value (see Phippen at T362:29-31), which is not what the planning evidence discloses. On the contrary, it was accepted that the northern residue land could be used as, for example, a service station; 2. again, Phippen's 50% adjustment for the southern residue land was, as Lunney opined in his written evidence and with which I agree, excessive; 3. although the reasons given for Phippen's large single adjustments have been to some extent articulated by him (see above), both in his written evidence and his oral evidence he was unable to properly break down his adjustments for the various factors that he relied upon to arrive at them. The absence of explicitly articulated adjustments makes it difficult for the Court to understand the logic inherent in his reasoning (Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 at [45]). For example, with respect to the northern residue land, Phippen did not appear to be aware that in the after scenario it was located entirely within the "flexible employment" designation within the A&A precinct thereby increasing its potential value; and 4. due to the opacity of Phippen's implicit reasoning, some of the adjustments appeared to be inconsistent with existing evidence. By way of illustration, in relation to the Z Buhach parent parcel Phippen expressed the view in the 'before' scenario that its location on a prominent corner of a busy intersection leading to the airport would attract a premium resulting in an upward adjustment, whereas in relation to the northern residue land in the 'after' scenario, a downward adjustment of 80% was made for, among other things, the same location (T363:34-36). And in respect of the 50% adjustment to the southern residue land in the 'after' scenario this effectively compared the land to the quarry sale which Phippen had described in his oral evidence as "the worst property in the area" and "a hole in the ground" (T189:10 and 195:48). 1. In my opinion, Lunney's evidence with respect to the 'after' scenario of the Z Buhach residue lands was more credible and logical. I therefore adopt, and to the extent required, modify Lunney's downward adjustments as follows: 1. for the northern residue land, I adopt his combined downward assessment of 20% for shape. However, I would additionally adjust the value downward by 20% to account for access limitations and a further 5% to account for the typographical and hydrological limitations identified in the evidence (see the stormwater engineering evidence) which I do not consider that Lunney has sufficiently taken into account. This brings the total downward adjustment of 45%; 2. for the southern residue land, I adopt his combined downward adjustment of 30% (adopting his concession that there could be a 15% downward adjustment for access), however, I would further adjust downward the value in the 'after' scenario by 5% to account for the topographical and hydrological constraints identified by the stormwater engineers which again were not, in my opinion, adequately accounted for by Lunney in his assessment. This brings a total downward adjustment of 35%; and 3. in respect of the southern residue land that was subject to the acquired easement, as the evidence demonstrates, the applicant's right to use and enjoy the easement land has been significantly diminished, and therefore, the market value of that portion of the southern residue must reflect this. Although I do not agree that the appropriate methodology to be applied is to value the easement land on the same m2 rate as applied to the acquired land on the basis that the land has not in fact been acquired, I nevertheless consider that the value of easement land ought to be heavily discounted by 75%. 1. In order to calculate the market value of the Z Buhach land it is necessary to establish the land area and assess a value of the improvements on the parent parcel. 2. In his calculations Phippen adopted a land area of $121,400m2 while Lunney used an area of 121,370m2 for the parent parcel. Phippen rounded up the area of the parent parcel whereas Lunney used the area in the deposited plans. In my view, Lunney's approach is more accurate and an area of 121,370m2 for the Z Buhach parent parcel is therefore adopted by me. 3. In respect of the improvements erected on the parent parcel, Phippen estimated these at $280,000 while Lunney adopted an estimate of $870,000. Because Phippen inspected the improvements prior to the acquisition and Lunney inspected the improvements some time post the acquisition, I am of the opinion that Phippen's estimate is more reliable. Therefore, I assess the value of the improvements on the Z Buhach parent parcel prior to the acquisition at $280,000. 4. Neither party provided any details about the improvements post the acquisition, and therefore, I have inferred that there was no difference in the values of improvements in the 'before' and 'after' acquisition scenarios on the Z Buhach land. 5. In light of my reasoning above, I calculate the market value of the acquired interests of the Z Buhach land as follows: Scenario 2700 Elizabeth Drive (Buhach v TNSW) Value 'before' Land – 121,370m2 x $127.50/m2 = $15,474,675 Plus improvements $280,000 Total $15,754,675 Value 'after' Less Northern Residue of 11,410m2 x $70.125/m2 = $800,126 Less Southern Residue of 66,730m2 x $82.875/m2 = $5,530,249 Less easement of 486.70m2 x $31.875/m2 $15,514 Total $6,345,889 Diminution (compensation payable) $9,408,786 The Affect of the Acquisition on the Buhachs's Property (2292 The Northern Road) Phippen 1. The Buhachs submitted that a number of similar factors contributed to a reduction in the value of the Buhachs's residue land at 2292 The Northern Road in the context of its future urban aerotropolis related potential uses. These adverse impacts after carrying out the public purpose included: 1. vehicle access from the reserved road was removed, constraining current and future land uses with respect to loss of frontage and access and the requirement to negotiate and work with neighbours in relation to future redevelopment of the residue land; 2. vehicle access for heavy vehicles was removed, constraining current and future land uses in the short and medium term; 3. a reduced and fixed land area, constraining current and future lane uses in the short and medium term; 4. stormwater management, drainage and water quality constraints; 5. additional travel distances by vehicles to classified arterial roads; 6. a height differential with The Northern Road; 7. acoustic impacts associated with the upgraded The Northern Road; and 8. visual impacts associated with the proximity to The Northern Road. 1. This resulted in a discount rate of 20% to the market value, that is $120m2. 2. In closing submissions, Phippen calculated the market value for 2292 The Northern Road as: After Acquisition 69. The affectation identified earlier in this statement in connection with the residue land has resulted in the reduction of this parcel of land. Accordingly, I have adopted a discount rate of around 20% of market value – and have adopted a rate of $120 psm 70. My calculations are set out below: Land Area Size $ psm L[and] V[alue] Residue land 96,030 $120 $11,523,600 Total LV $11,523,600 1. Again, accounting for improvements in the sum of $95,000, this brings the total land value to $$11,618,000 according to Phippen. 2. He assessed the market value at $4,480,000: Market Value Summary Total Fair Market Value – Before $16,099.500 Total Fair Market Value – After $11,618,600 Compensation $4,480,000 S a y … $4,480,000 Lunney 1. Again, Lunney assessed injurious affection and betterment on the basis that they were captured in his 'before' and 'after' valuation. 2. According to Lunney's evidence, there was betterment and he adjusted the land value rates for the three most comparable sales that he had relied upon in the 'before' scenario in the 'after' scenario as follows: 1. an upwards adjustment of 5% on account of the superior location of the residue land; 2. an upward adjustment of 5% on account of the increased exposure of the residue land to The Northern Road as a result of the public purpose; and 3. an upward adjustment of 2.33% per month on account of time and market movement. 1. He made no adjustments for shape (essentially unchanged by the acquisition), size (the residue was of a similar size to his comparable sales) or access (although the public purpose affected access to the paper road, it had not been built, and for the current agricultural use of the land it was not required and would not be relevant in any event if the land was to be developed more intensively). 2. He applied these adjustments to arrive at adjusted land values of between $46m2 and $49m2 and adopted a rate of $48m2. A bottom up premium of 20% was applied to derive a rate of $57.50m2. Applying this rate to the 'after' scenario to the residue land and adding the value of the improvements ($180,000), he assessed the market value of the residue land as $5,701,725. 3. Thus, according to Lunney the market value of the acquired land was $231,000 (rounded up), based upon the market value of the parent parcel ($5,932,620) in the before scenario and the difference between the market value of the residue land ($5,701,725) in the after scenario. Findings on the After Scenario for the Buhachs's Property 1. Similar criticisms to those above, may be made in respect of Phippen's 20% downward adjustments in the 'after' scenario in respect of his valuation of the Buhachs's land. 2. Nevertheless, it is difficult to comprehend Lunney's assessment that a greater than 12% upwards adjustment should be made and that no downward adjustment should be applied for shape, size and access constraints. Again, it must be recalled that the comparable sales that Lunney relied upon were sales of a rural character and do not reflect the highest and best use of the Buhachs's land. Further, even though the paper road has not yet been built, it was nevertheless impacted upon by the public purpose. 3. I accept Phippen's evidence that the residue land has been injuriously affected in the manner described by him in respect of access, hydrology and amenity (adverse visual and acoustic impacts). I would allow a 10% downward adjustment to accommodate for these constraints and no upward adjustment for betterment. 4. Phippen estimated that the value of the improvements prior to the acquisition was $120,000 and the value of the improvements post the acquisition to be $95,000 on the Buhachs's land. Lunney, on the other hand, estimated the value of the improvements on Buhachs's land to be $180,000 both 'before' and 'after' the acquisition. 5. Because Phippen inspected the Buhachs's parent parcel prior to the acquisition whereas Lunney inspected the parent parcel some time after the acquisition, I again consider that the estimates by Phippen are more reliable and I have adopted them as follows: Scenario 2292 The Northern Road (Buhachs v TNSW) Value 'before' Land – 106,530m2 x $105/m2 = $11,185,650 Plus improvements $120,000 Total $11,305,650 Value 'after' Less Land Residue of 94,590m2 x $94.50/m2 = $8,938,755 Less Improvements $95,000 Total $9,033,755 Diminution (compensation payable) $2,271,895 The Acquired Construction Leases The Z Buhach Acquired Construction Lease (2700 Elizabeth Drive) 1. As stated above, TNSW acquired a two year leasehold interest over Lots A, B and C being part of the land in certificate of title 1/517853 comprising 27,810m2 for the public purpose (that is, the Z Buhach lease). 2. Phippen valued the Z Buhach lease at $702,000 by applying a notional annual rental value calculated on the basis of an annual rate of return of 6% on the capital value of the land as follows: 1. 27,810m2 x $220m2 at 6% per annum ("pa"); and 2. a present value of $367,092 pa for two years discounted at a rate of 3% pa. 1. Applying a similar methodology to that employed below in respect of the Buhachs's lease, albeit at a different rate per m2, Lunney calculated the value of the Z Buhach lease to be $208,000. 2. Both Phippen and Lunney adopted the same approach when assessing their respective values for the Z Buhach lease. First, they each assessed a notional annual rent and second, using valuation principles, calculated the present value of the notional rent for a period of two years (the duration of the construction leases) at a discounted rate. 3. Third, to estimate the notional annual rent both Phippen and Lunney used a rate of return of 6% pa of the land area occupied by the lease. The discount rate used by Phippen and Lunney for the present value calculation was 3% pa. 4. Because both valuers agreed on a reasonable rate of return and the discount rate, I have used the same rates. In addition, resolving any doubt in favour of the applicants, the calculation ought to be carried out on the basis of a payment at the beginning, and not at the end, of the two year period. 5. It is noted that both Phippen and Lunney used the land value rates they respectively adopted prior to the acquisition. However, the acquisition occurred prior to the construction lease on the residue lands post the acquisition. Therefore, the land value rates used by Phippen and Lunney are not, in my opinion, appropriate in the circumstances. 6. Lot A of the Z Buhach lease has an area of 11,390m2 and is situated on the northern residue land, while Lot B, with an area of 10,470m2, and Lot C, with an area of 5,950m2, are situated on the southern residue land. Given my earlier reasons and findings, the land value rates used to assess the 'after' values should be used for the calculations of the value of the Z Buhach lease as follows: 2700 Elizabeth Drive (Z Buhach v TNSW) Lot Area Assessed Land Value Rate $ psm Notional Land Value Rate of Return Notional Rent $ pa A 11,390m2 $70.125 $798,724 6% pa $47,923 B 10,470m2 $82.875 $867,701 6% pa $52,062 C 5,950m2 $82.875 $493,106 6% pa $29,586 Total $129,571 1. The present value of $129,571 pa for two years discounted at 3% pa with payment at the beginning of the period is therefore $255,370. The Buhachs's Acquired Construction Lease (2292 The Northern Road) 1. Similar to the Z Buhach land, TNSW acquired a two year leasehold interest being part of the Buhachs's land in certificate of title 3/827223 comprising 1,440m2 (that is, the Buhachs's lease). 2. Phippen valued the Buhachs's lease at $19,904.40 by applying a notional annual rental value calculated on the basis of an annual rate of return of 6% on the capital value of the land as follows: 1. 1,140m2 x $150m2 at 6% pa; and 2. a present value of $10,260 pa for two years discounted at a rate of 3% pa. 1. Lunney, by contrast, applied a notional annual rental rate calculated on the basis of an annual rate of return on the capital value of the land. He adopted the adjusted rural rate for the parent parcel of $54m2 and multiplied that rate by the area of the Buhachs's lease (1,440m2) and the annual rate of return of 6% pa. Therefore, according to Lunney, the market value of the acquired lease was $8,928 (rounded up to $10,000) comprising the present value of $4,666 pa for two years at a discount rate of 3% pa. 2. By parity of reasoning, the Court has determined that the rate of return on the notional Buhachs's land value is 6% pa to derive the notional annual rent, discounted at 3% pa for a period of two years with the amount calculated at the beginning of the period. 2295 The Northern Road (Buhachs v TNSW) Lease Area Assessed Land Value Rate $ psm Notional Land Value Rate of Return Notional Rent $ pa 1,440m2 $94.50 $136,080 6% pa $8,165 1. The present value of the Buhachs's lease is $8,165 pa for two years discounted at 3% pa with payment at the beginning of the period. This totals $16,092. Disturbance 1. The components of compensation for disturbance are identified in s 59 of the JT Act. There have been a number of recent appellate decisions where the ambit of the claim for disturbance has been considered, the effect of which has been to restrict the breadth of claims for compensation for disturbance (Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251, Moloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252, Roads and Maritime Services v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41 and Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165). I have considered the reasoning and implication of these authorities in making my findings below. 2. The dispute between the parties concerning compensation for disturbance was in respect of the following categories: 1. the legal costs for both sets of proceedings (s 59(1)(a) of the JT Act) insofar as they were incurred in relation to the withdrawal of the first Z Buhach and the first Buhach PANs; 2. the valuation fees for both sets of proceedings (s 59(1)(b) or (f) of the JT Act): 1. charged by Abbotts Valuers in their invoices dated 9 May and 29 June 2018, insofar as they were incurred in relation to the withdrawal of the first PANs; 2. charged by Dobrow Valuation on 6 September 2018 on the basis that they were excessive and unreasonable because the applicants had already engaged a valuer and have not justified the engagement of a second valuer; and 3. the planning costs charged by HDC Planning in invoices dated 20 September and 10 October 2018 and by Stimson and Baker Planning Tax dated 7 September 2018, and the surveying costs charged by TSS Surveying Solutions on 5 June 2018 on the basis that these were not valuation fees and the work was not undertaken by a "qualified valuer" (see the definition of that term contained in s 59(2) of the JT Act); and 1. in relation to the Z Buhach matter, relocation costs (s 59(1)(c) of the JT Act) on the basis that the applicant had not provided any evidence to establish that relocation had occurred. Fees Associated with the Withdrawal of the First PANs 1. Part 4 of the JT Act deals with, among other things, the award of compensation for abandoned acquisitions of land. Section 69 provides as follows: 69 Compensation for withdrawal of proposed acquisition notice (1) If a proposed acquisition notice is withdrawn (or taken to be withdrawn) under this Act, an owner of the land concerned is entitled to be compensated by the authority of the State who gave the notice for any financial costs or any damage actually incurred or suffered by the owner as a direct consequence of the giving of the notice and its later withdrawal. (2) Compensation is not payable under this section in respect of any change in the value of the land. (3) Compensation is not payable under this section unless a claim for the compensation is made within 3 years after the withdrawal of the proposed acquisition notice. 1. Section 71 sets out how a person can claim compensation under Pt 4: 71 Claims for compensation under this Part (1) A person who wishes to claim compensation under this Part must lodge a claim for compensation in accordance with this section with the authority of the State liable to pay the compensation. (2) A claim for compensation must be in the form prescribed by the regulations or (if no such form is prescribed) in the form approved by the Minister. (3) A claim for compensation may be withdrawn by the claimant. (4) The authority of the State may accept a claim for compensation (in whole or in part) or reject any such claim. (5) A claim for compensation is taken to have been rejected if the authority of the State has not dealt with the claim within 60 days after receiving the claim. However, the authority of the State is not precluded from accepting the claim after that time. (6) A person whose claim for compensation is rejected (or taken to be rejected) or is accepted in part only may appeal to the Land and Environment Court against that decision. Section 67 applies to any such appeal in the same way as it applies to an appeal under that section. (7) The regulations may apply any of the provisions of Part 3 relating to claims for compensation under that Part (with or without modifications) to claims for compensation under this Part. 1. There is no doubt that the applicants have a compensable entitlement pursuant to s 69(1) of the JT Act for the legal and valuation fees arising out of the withdrawn first PANs. On any view they were "actually incurred or suffered by the owner as a direct consequence of the giving of the notice and its later withdrawal". 2. However, TNSW submitted that no such claim for any financial costs or damage occasioned by the withdrawal of the first PANs had been made by the applicants in accordance with s 71 of the JT Act and, as a consequence, the jurisdiction of this Court has not been enlivened under ss 66, 67, 69 or 71(6) of the JT Act. 3. In reply, the applicants argued that the fees could be claimed under s 59(1)(a) of the JT Act, which provides for compensation for "legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land". This is in fact what occurred because the acquisition ultimately proceeded. Part 4 of the JT Act relates to acquisitions that do not proceed. In the present case, there was only one acquisition, which is "the" acquisition, so the claim for these legal and valuation fees falls within the statutory text. 4. In the alternative, the applicants contended that the claim could be reformulated under s 71 of the JT Act and the Court could grant leave for that procedure to occur so that the claim could be dealt with in these proceedings. 5. Dealing with the alternative claim, s 71(2) of the Act states that the claim for compensation must be in the form approved by the regulations or, if no such form is prescribed, by the form approved by the Minister. There is no evidence before the Court that this has occurred. Moreover, while the authority of the State has rejected the claim for compensation of the contested fees in the course of these proceedings, it has not done so in respect of any application associated with the withdrawal of the first PANs (presumably because no such claim has been submitted to it in respect of those fees). On any view, no claim has been made, or can be made, in the context of these sets of proceedings that will enliven the Court's jurisdiction under s 71 of the JT Act. 6. In relation to the applicants' first argument, properly construed having regard to its statutory context, the term "the compulsory acquisition of land" in s 59(1)(a) of the JT Act refers only to the second PAN and does not include all PANs issued in relation to the land. 7. The compulsory acquisition of land under the JT Act cannot occur absent an exercise of statutory power by the acquiring authority under the Act. This occurs pursuant to the pre-acquisition procedures under Pt 2 Div 1 of the JT Act, which includes the giving of a PAN to the owner of the land to be acquired (see ss 11 and 12 of the JT Act) and then by notice published in the Gazette (see Pt 2 Div 2). 8. In both sets of proceedings the applicants' land was acquired upon the giving of the second PAN, not the first. The first PANs were withdrawn pursuant to the statutory power contained in s 16 of the JT Act which states: 16 Withdrawal or amendment of proposed acquisition notice (1) An authority of the State may, before the land is compulsorily acquired, withdraw a proposed acquisition notice by a further notice. (2) Part 4 deals with the compensation payable when a proposed acquisition notice is withdrawn. (3) An authority of the State may, by a further notice, amend a proposed acquisition notice for the purpose of correcting a clerical error or an obvious mistake in the notice. Any such amendment has effect from the date of the original notice unless otherwise specified in the further notice. (4) A further notice under this section is to be given in the same manner as the proposed acquisition notice concerned was given. 1. Once the first PANs had been withdrawn by the acquiring authority, unless specified in the JT Act, no statutory power exists to compensate the applicants for any financial costs and damages incurred by them in respect of the giving of the first PANs. Section 16(2) of the JT Act, by contrast, expressly deals with the compensation payable when a proposed acquisition notice is withdrawn and directs the owner of land to Pt 4 of the Act. This is a strong textual and contextual indicator that some additional right to compensation upon the withdrawal of a PAN (whether for the same land or some other land) is not intended to exist within the Act. Rather, the statutory regime for such compensation is to be found exclusively within Pt 4 of the Act. 2. As explained above, Pt 4 of the JT Act provides for compensation upon the withdrawal of the PANs. It does so in the manner set out in s 71 of the JT Act. In the present case the applicants have not sought to engage with the procedure set out in that provision to claim compensation for the legal and valuation fees associated with the withdrawal of the first PANs. There being no other power to award compensation for this loss contained in the Act for the reasons given above, these fees cannot, in my opinion, be claimed. Dobrow Valuations Fees 1. The applicants submitted that in proceedings of this complexity and quantum, they have reasonably incurred the costs of obtaining a second opinion as "a reality check of the advice" that they had obtained by commissioning the Dobrow Valuations report, and therefore, the costs were claimable under s 59(1)(b) of the JT Act. 2. I agree with the submissions of TNSW that the commissioning of the Dobrow Valuations report was unreasonable and excessive on the evidence before the Court. There is nothing before the Court to demonstrate that these valuation costs are not, as they plainly appear to be, duplicate costs (cf Penfold and Bracey v Health Administration Corporation [2009] NSWLEC 157 at [135]-[136] per Biscoe J), or that there is some other circumstance that renders the additional report necessary (such as ill health of a valuer or the valuer not able to be a witness in the proceedings: see, for example, the facts in Cook v Roads and Traffic Authority of New South Wales [2007] NSWLEC 136 at [80] per Jagot J). 3. To the extent that the applicants relied upon the decision in Croghan v Blacktown City Council (2019) 100 NSWLR 757; [2019] NSWCA 248, that case does not assist them. That decision concerned a different issue, namely, a successful appeal against an award of costs by the trial judge on an ordinary and indemnity basis (the date from which the acquiring authority made an offer of compromise). 4. In summary, I find that there is insufficient evidence to demonstrate that the Dobrow Valuations fees have been "reasonably incurred" and, therefore, they are not compensable. Planning and Survey Costs 1. The town planning and survey costs are claimed by the applicants under s 59(1)(a), (b), or (f) of the JT Act. Each is dealt with in turn. 2. The applicants relied upon the reasoning in Eureka Operations Pty Ltd v Transport for New South Wales (2021) 249 LGERA 78; [2021] NSWLEC 41 (a cross-appeal was allowed in Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56, but not on this issue) to argue that the expenditure was necessary for the provision of proper legal advice under s 59(1)(a) of the JT Act. In Eureka Duggan J opined that (at [150]-[154]): 150 Dealing firstly with the claim for the fees of Mr Rogers pursuant to s 59(a) as legal costs. It is clear from the evidence of Ms Mozjejko's affidavit sworn 13 March 2020 that Mr Rogers' fees, whilst not addressed to the legal firm, were transmitted to that firm for payment. 151 There is, therefore, some question over whether the legal practitioner had retained Mr Rogers and was, therefore, liable for the payment to him of his fees and whether the fees would be recoverable from Eureka by the legal practitioner as a disbursement. Ms Mozjejko's evidence does not provide an answer to these questions. However, whilst such a contractual relationship may arise in determining the question of whether a consultant's fees are recoverable as a legal cost under s 55(a) I do not consider it to be determinative. 152 The terms of s 59(a) specifically, in terms refers to: (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land. 153 The text and context of this provision indicates a legislative intent that the dispossessed owner is not to be responsible for the costs of obtaining appropriate (reasonable) legal services relating to the acquisition. In that context such legal services must include, at least in part, the determination of the appropriateness of the offer of compensation. Where a legal practitioner determines that some further advice is required from another qualified person to enable them to provide the legal services of advising on the offer, it would be inconsistent with the legislative purpose to compensate the dispossessed owner for only part of the fees required to be incurred to enable the legal advice to be provided. Whilst the reference to legal costs is quite specific in terms it is broad in substance. The fees are to be recoverable if they are reasonably incurred and to that extent if they are reasonably necessary for the legal practitioner to provide the advice relating to the acquisition then such fees are recoverable as a s 55(a) disturbance claim. This construction does not turn on the contractual relationship of the retainer of the consultant or whether it is recoverable as a disbursement, but rather whether it is reasonably necessary to enable the legal services to be provided in connection with the compulsory acquisition of the land, including, but not limited to, any offer of compensation. 154 For those reasons, I find Mr Rogers fees are properly claimable as disturbance pursuant to s 55(a) of the Just Terms Act. 1. Applying the reasoning in Eureka to the present sets of proceedings, the planning and survey costs referred to above were incurred for the provision of obtaining reasonable legal services relating to the acquisitions, including the offers of compensation, and are therefore properly claimable as disturbance. There was nothing in the evidence to suggest a contrary conclusion. 2. TNSW submitted that there was no evidence in either set of proceedings that the planning and surveying costs were transmitted to the applicants' solicitor for payment. But in my view it is not necessary for the solicitor to have paid the fees. Provided that the invoices were paid by the applicants and that the further advice was required from qualified persons to enable the applicants' legal representatives to advise on any offers made in respect of the acquisitions, then the amounts are claimable. There is nothing in the evidence that indicates that this is not what in fact occurred. 3. In case this analysis is wrong, it is necessary to deal with the second alternative basis of compensation for the planning and surveying fees under s 59(1)(b) of the JT Act. In my opinion, any claim for the planning and surveying fees under this head of compensation must fail on the basis that these fees are plainly not "valuation fees of a qualified valuer" within the meaning of that provision (Kirela Pty Ltd v Minister Administering Environmental Planning and Assessment Act 1979 (2005) 141 LGERA 40; [2005] NSWCA 108 at [127] and [135]). 4. Finally, the third basis for recouping the planning and surveying fees was because the costs were financial costs reasonably incurred or that might be reasonably incurred relating to the actual use of the land, as a direct and natural consequence of the acquisition under s 59(1)(f) of the JT Act. 5. Again, in my opinion, the claim must fail because while the costs are undoubtedly financial costs, and it may be inferred were reasonably incurred, they do not relate to the actual use of the acquired lands, which was for agricultural purposes (predominantly the growing of Christmas trees). In Blacktown City Council v Fitzpatrick Investments [2001] NSWCA 259 the Court of Appeal held that the use has to exist in fact and must be distinguished from a future or potential use (at [23]-[27]). 6. In the present sets of proceedings the planning and surveying costs are not recoverable under s 59(1)(f) of the JT Act because they relate to general advice given for the development of the land in the future and do not constitute a cost relating to the actual present use of the land (Kirela at [125]-[127]). Relocation Costs 1. Z Buhach claims relocations costs in respect of the 2700 Elizabeth Drive property under s 59(1)(c) of the JT Act. These include expenses for: 1. telephone and postage redirection; 2. storage; and 3. costs associated with (but not the cost of) the construction of a new single storey dwelling, driveway, kerb and guttering, water tanks, a septic system, greenhouse, side shed, retaining wall and landscaping on the 2292 The Northern Road Buhach property. 1. A claim for compensation for rent was abandoned at the hearing. 2. The necessity for relocation is not, as the Court understands it, in dispute. Nor, was the reasonableness of the relocations cost contested. Rather, TNSW takes issue with their payment on the basis that Z Buhach has not provided evidence that he has in fact relocated (a matter previously not contested), or that these costs have in fact been incurred. 3. There is no doubt that the applicant proposes to relocate from the property at 2700 Elizabeth Drive to 2292 The Northern Road. Given that the necessity for relocation was not the subject of challenge by TNSW, it is difficult to understand the acquiring authority's refusal of most of the claimed relocation costs (especially as it agrees with the payment of funds to compensate for disadvantage arising from relocation pursuant to s 55(e) of the JT Act as discussed below). 4. The applicants took the Court to a number of invoices addressed to the Buhachs evidencing the construction of a new dwelling at 2292 The Northern Road for the purpose of relocation. Where there are tax invoices that have been issued for works undertaken in respect of the relocation it may be reasonably inferred that these have been, or will be, paid by the applicant in those proceedings. TNSW did not, it should be observed, cavil with the reasonableness of those costs. The construction of a new dwelling for the purpose of relocation was accepted by Rowan. 5. I find that relocation was intended to occur upon the completion of the new dwelling at 2292 The Northern Road, which at the time of the hearing was in the process of being constructed for this very purpose. No affidavit deposed to by the applicant is necessary for the Court to make this finding. Absent any evidence to the contrary, the relocation costs fall within acceptable limits of that which may be claimed and are compensable. 6. As at the conclusion of the hearing there were, however, three claims for compensation for relocation where there was no evidence of any payment for those works: 1. $15,000 for the concrete extension of part of a driveway to dwelling at 2292 The Northern Road to connect bitumen and concrete components; 2. $2,667.10 for a quotation from Silverwood Nursery Supplies for a greenhouse at 2292 The Northern Road; and 3. an allowance for $20,000 for landscaping at 2292 The Northern Road. 1. In my view, these amounts fall into a different evidential category to the amounts claimed by Z Buhach for which there are existing invoices. Absent an invoice it is not known if these amounts were financial costs "reasonably incurred" in connection with Z Buhach's relocation. They are therefore not compensable. 2. Z Buhach also claims an amount for disadvantage resulting from the relocation from 2700 Elizabeth Drive to 2292 The Northern Road in the sum of $78,381. TNSW agreed that the applicant was entitled to this amount under s 55(e) of the JT Act. GST 1. It was not a matter of controversy that if the applicants were registered for GST any disturbance that the Court determines that they are entitled to should be determined on a GST exclusive basis. By contrast, if the applicants are not registered for GST, any compensation for disturbance awarded by the Court should be calculated on a GST inclusive basis. 2. The applicants conceded that they were registered for GST in relation to the Christmas tree business previously conducted at 2700 Elizabeth Drive. This concession is consistent with a submission by TNSW that indicated that both John Zdravko Buhach and Sandy Buhach are registered for GST as a "family partnership". However, John Zdravko Buhach (Z Buhach) does not appear to be registered for GST in his own name and the registration of the family partnership cannot, according to TNSW, be taken to be a registration of him in the 2700 Elizabeth Drive Z Buhach proceedings. 3. In relation to the GST position with respect to 2292 The Northern Road, it was not conceded by the Buhachs that there was any evidence that they were registered for GST for any business activity occurring on that property. This may be accepted. The certificate annexed to TNSW's closing submissions was never formally admitted into evidence. It does did not assist in this regard. 4. Therefore, on the evidence before the Court the disturbance that the Court has determined is payable in the Z Buhach proceedings for the acquisition at 2700 Elizabeth Drive and that the Buhachs are entitled to in 2292 The Northern Road proceedings is to be determined inclusive of GST. Summary of Disturbance Compensation The Z Buhach Proceedings (2700 Elizabeth Drive) 1. Consistent with my findings above regarding the applicant's disturbance claims a summary of compensable disturbance in respect of this set of proceeding pursuant to s 55(d) and (e) of the JT Act is as follows: 1. legal costs (s 59(1)(a)) - $25,748.98; 2. valuation costs (s 59(1)(b)) - $35,884.31; 3. planning and survey fees (s 59(1)(a)) - $10,624.18; 4. relocation costs (s 59(1)(c)) - $227,670.15; and 5. disadvantage (s 55(e)) - $78,381. 1. This brings a total compensable claim for disturbance and disadvantage to $378,308.62, inclusive of GST. The Buhach Proceedings (2292 The Northern Road) 1. Again, consistent with my findings above regarding the applicants' disturbance claims a summary of compensable disturbance in respect of this set of proceeding pursuant to s 55(d) of the JT Act is as follows: 1. legal costs (s 59(1)(a)) - $5,524.20; 2. valuation costs (s 59(1)(b)) - $10,475.52; and 3. planning and survey fees (s 59(1)(a)) - $9,524.18. 1. This brings a total compensable claim for disturbance to $25,523.90, inclusive of GST. Compensation Payable 1. In conformity with the reasons set out above, the summary of the claims for compensation are set out below in respect of each set of proceedings: The Z Buhach Proceedings (2700 Elizabeth Drive) 2700 Elizabeth Drive Head of Compensation Under the JT Act Amount Market value of the acquired land and the acquired easement (s 55(a)) $9,408,786 Market value of the acquired lease (s 55(a)) $255,370 Disturbance (s 55(d)) $299,928 (rounded up) Disadvantage from relocation (s 55(e)) $78,381 Total $10,042,465 The Buhachs Proceedings (2292 The Northern Road) 2292 The Northern Road Head of Compensation Under the JT Act Amount Market value of the acquired land (s 55(a)) $2,271,895 Market value of the acquired lease (s 55(a)) $16,092 Disturbance (s 55(d)) $25,524 (rounded up) Total $2,313,511 Costs 1. Having regard to the applicable principles and authorities set out in UTSG Pty Ltd v Sydney Metro (No 6) [2020] NSWLEC 63 (at [403]-[407]), there is no basis not to order TNSW to pay the applicants' costs in both sets of proceedings. Orders 1. The formal orders of the Court are therefore: Proceedings 2019/00075642 1. the compensation payable to the applicant under the JT Act for the acquired interests in Lot 17, DP 1240511 at 2700 Elizabeth Drive, Luddenham (the Z Buhach proceedings) is $10,042,465; 2. the parties are granted leave to approach the Court within 28 working days for the purpose of correcting any arithmetical errors contained in the judgment; 3. the respondent is to pay the applicant's costs as agreed or assessed; and 4. the exhibits are to be returned. Proceedings 2019/00075655 1. the compensation payable to the applicants under the JT Act for the acquired interests in Lot 11, DP 1240511 at 2292 The Northern Road, Luddenham (the Buhachs proceedings) is $2,313,511; 2. the parties are granted leave to approach the Court within 28 working days for the purpose of correcting any arithmetical errors contained in the judgment; 3. the respondent is to pay the applicants' costs as agreed or assessed; and 4. the exhibits are to be returned. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 December 2022