BLACKTOWN CITY COUNCIL v CAUCHI SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CLARKE, MEAGHER and HANDLEY JJA 16 June 1994, 16 June 1994 [1994] NSWCA 27 RESUMPTION — COMPENSATION — NO QUESTION OF PRINCIPLE. LOCAL GOVERNMENT — resumption of land — cost of drainage works — whether an error of law in assessment of compensation — held: no error of law shown — no question of principle. Handley JA This is an appeal by Blacktown City Council against the assessment of compensation by the Chief Judge of the Land and Environment Court for the compulsory acquisition of some land belonging to the respondents. Her Honour determined that the proper compensation was the sum of $310,000, being substantially above the sum contended for by the Council. Under the Land and Environment Court Act the appeal to this Court is confined to an appeal on a question of law. Mr Sweeney QC, appearing for the Council, struggled valiantly to isolate a question of law from the matrix of fact in this case. In my opinion, despite his best endeavours, he did not succeed. The respondents, Mr and Mrs Cauchi, owned a block of land within the municipality having a frontage to Holbeche Road, Arndell Park, close to Doonside Road and the Great Western Highway. It was zoned partly general industrial and partly special usage drainage. As a result of the acquisition the Council acquired a lot approximately twenty five metres wide which cut a diagonal swathe across the land owned by the Cauchis prior to the resumption. It had the effect of dividing the original land into three lots: one lot to the north east of the resumed area and the other lot to the south west and, of course, the resumed lot itself. Her Honour proceeded to determine the compensation for the resumption by comparing the value of the land in the hands of the respondents prior to the acquisition and the value of the remaining two lots owned by them after the acquisition. The first question which arose was to determine the highest and best use of the original land and no question turns upon her Honour's finding on that matter. She held that its highest and best use was for industrial purposes without subdivision but with a necessity for making adequate provision to drain the land and carry storm water across it along the lines of an existing watercourse. Her Honour then turned her attention to determining the highest and best use of the two lots which remained in the hands of the respondents after the resumption, and she concluded that this was for industrial purposes without further subdivision but, of course, having to make proper allowance for the awkward shape created by the resumption. After considering the valuation evidence she concluded that the value of the land before the resumption and ignoring the resumption and the scheme behind it, as she was required to do, was $1,085,000 and that the value of the two lots after the resumption was $575,000. This left as the remaining issue in the case for 2 UNREPORTED JUDGMENTS her determination, the cost of the drainage work which would have been necessary to enable the owners to realise the highest and best value of $1,085,000 assessed by her Honour. As I have previously mentioned, the land was traversed by a natural watercourse. It appears that at some stage the owners had carried out some work on the watercourse and had slightly modified it causing it to flow in a more east west line parallel to the front boundary of Holbeche Road, but her Honour said that nothing turned on the fact that the original line of the watercourse had been artificially modified and in the end Mr Sweeney did not attempt to persuade this Court that her Honour fell into any error of law in expressing that view. As her Honour said, the issue in the case became the determination of the cost and extent of the drainage works which would have been required if the land was to be realised to best advantage to achieve its highest and best use. In dealing with this matter, her Honour considered two options identified in the expert evidence before her: The first involved leaving the natural watercourse substantially intact but undertaking modest rectification work and constructing a culvert to enable internal access to be obtained from one part of the lot to the other during all weather conditions. This option was the least expensive and on the evidence would have cost the owners $109,000. Her Honour rejected this option for the reasons that she gave. This finding, of course, was in favour of the Council. The second option involved the construction of underground pipes across the original lot "in the location of the existing watercourse". Her Honour was faced with conflicting assessments from experts of the cost of implementing this option. Mr Moore, the expert called for the owners, estimated the cost at $200,000. Mr Hunter, the Council's engineer, estimated the cost at $450,000. Mr Carr, a valuer from the Valuer-General's Department, estimated the cost at $310,000. Her Honour rejected the estimate of Mr Carr because he was not an engineer and had not been able to explain how he had arrived at his figure. Her Honour was then left with the higher figure from Mr Hunter of $450,000 which would have reduced the compensation payable to the Cauchis and the lower figure supported by Mr Moore of $200,000 which would increase the compensation. After examining the evidence her Honour concluded that the only difference between the two experts related to the length of the piping across the subject property. Mr Moore estimated that 100 metres of piping would be required to be laid directly across the original lot, whereas Mr Hunter estimated that 185 metres of piping would be required on a different course. Her Honour then accepted Exhibit M, a sketch prepared by Mr Moore, as showing that a line which approximately followed the existing watercourse was 100 metres in length, and on this basis she accepted Mr Moore's lower estimate of $200,000 and assessed compensation accordingly. The submission on behalf of the Council is that her Honour erred in law in acting on Exhibit M in the light of another plan prepared by Mr Moore, Exhibit 8 and Exhibit N which was a report prepared by Mr Moore relating to an alternative scheme for the resumption. This alternative scheme involved resuming a dog legged area of land across the subject property and the adjoining lots to the east and west in lieu of the straight diagonal area across the three properties which the Council proposed to resume and ultimately did resume. In my view, the merits and demerits of this alternative proposal have nothing URJ BLACKTOWN CITY COUNCIL v CAUCHI (Meagher JA) 3 whatever to do with the issues in this appeal or, indeed, in the ultimate issues which her Honour had to decide at the trial. As I have said, her Honour made no direct use of Exhibit 8 or Exhibit N for the purposes of assessing the compensation payable to the respondents. She used a different exhibit, Exhibit M, and adopted from that exhibit the figure of 100 metres which she found was the probable length of the watercourse across the property which would have to be piped by the owners to achieve the value of $1,085,000. In my judgment, in adopting the distance of 100 metres from Exhibit M and in preferring for this reason the cost estimate of Mr Moore, her Honour fell into no error of law. I would therefore propose that the appeal should be dismissed with costs. Clarke JA I agree. Meagher JA I also agree. Appeal dismissed with costs. Counsel for the appellant: C A SWEENEY QC/D R PARRY Solicitors for the appellant: J GREENWOOD & CO Counsel for the respondent: W R DAVISON/S J BROCKWELL Solicitors for the respondent: GADENS RIDGEWAY