> Land and Environment Court of New South Wales CITATION : Vella v Roads and Traffic Authority of New South Wales; Paoloni v Roads and Traffic Authority of New South Wales; Martignago v Roads and Traffic Authority of New South Wales [2003] NSWLEC 375 APPLICANT Carmen Vella RESPONDENT Roads and Traffic Authority of New South Wales APPLICANT Ofelia Paoloni PARTIES : RESPONDENT Roads and Traffic Authority of New South Wales APPLICANT Fortunato Martignago RESPONDENT Roads and Traffic Authority of New South Wales FILE NUMBER(S) : 31053; 31057; 31065 of 2002 CORAM: Talbot J KEY ISSUES: Compulsory Acquisition of Land :- compensation - determination of underlying zoning and use absent the proposed purpose of resumption as rural residential LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 s 54 Roads Act 1993 CASES CITED: DATES OF HEARING: 05/12/2003, 08/12/2003, 09/12/2003, 10/12/2003 DATE OF JUDGMENT: 01/09/2004 APPLICANT Mr J J Webster SC with Mr I J Hemmings (Barrister) SOLICITORS Thorntons Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr R P L Lancaster (Barrister) SOLICITORS Corrs Chambers Westgarth JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 31053 of 2002 31057 of 2002 31065 of 2002 Talbot J 9 January 2004 Carmen Vella Applicant v Roads and Traffic Authority of New South Wales Respondent Ofelia Paoloni Applicant v Roads and Traffic Authority of New South Wales Respondent Fortunato Martignago Applicant v Roads and Traffic Authority of New South Wales Respondent Judgment Introduction 1 By notice published in the New South Wales Government Gazette 4 October 2002 the Roads and Traffic Authority of New South Wales ("the RTA") acquired land owned by each of the applicants by compulsory process under the provisions of the Land Acquisition (Just Terms Compensation) Act 1991 ("the Just Terms Act") for the purposes of the Roads Act 1993 ("the Roads Act"). The RTA has acquired the lands for the purposes of the Western Sydney Orbital (now known as the M7 Westlink). 2 The three parcels of land are contiguous. The issues arising in relation to the determination of the underlying zoning of the land, that would have applied if it were not for the resumption process, are common as the relevant zoning history to be considered is identical in each case. 3 The respective valuations, dependant upon the outcome of other issues to be determined by the Court, have been agreed by the valuers following an extended conferencing process pursuant to the Expert Witness Practice Direction. 4 It is not in dispute that the underlying zoning of the subject parcels is to be considered by ignoring the current zoning as Regional Parkland under Sydney Regional Environmental Plan No. 31 ("SREP 31") and other previous zonings for Open Space Corridor as steps in the resumption process for the acquisition of the land. The zoning history of the land 5 The Court understands that the lands were zoned Rural under the County Cumberland Planning Scheme Ordinance in 1951. 6 Following publication of the Sydney Region Outline Plan ("SROP") in 1968 the subject lands were zoned Non-Urban 1(d) under the Fairfield Planning Scheme Ordinance, which was gazetted on 3 May 1974. Permitted uses in the 1(d) zone were agriculture, drainage, country dwellings (for lots having a minimum of 50 acres), forestry, roads and utility installations other than gas holders or gas generating works. Development consent required the concurrence of the State Planning Authority. Fairfield Interim Development Orders ("FIDO") No. 31 and No. 32 made on 10 May 1974 and 25 November 1977 included the subject lands in a Rural 1(e) zone. They were zoned Rural 1(a3) under FIDO No. 39 on 9 March 1979. A minimum allotment size of 20 hectares applied in the 1(e) and 1(a3) zones. 7 From 12 August 1994 the subject lands were included in a 6(c) Corridor zone under Fairfield Local Environment Plan 1994 ("the 1994 LEP"). 8 SREP 31 was gazetted on 8 June 2001. 9 According to Mike George, Consultant Town Planner, who has given evidence on behalf of the applicants, the subject lands have been effectively included in the broad western urban growth corridor indirectly since the commencement of the Fairfield Planning Scheme Ordinance and the subsequent FIDO's and directly after the making of the 1994 LEP. 10 However Harvey Sanders, who has given evidence on behalf of the respondent, contends that in the absence of the corridor proposal in the SREP and its subsequent detailed definition, the lands on the eastern side of the catchment of a boundary/ridgeline on the eastern side of the corridor west of the Wetherill Park Industrial Area would have been identified as a proposed urban area in the SREP with the lands on the western side, including the subject lands, identified as non-urban areas. In Mr Sanders opinion, the ridgeline itself and the steeper side slopes may have been identified as a narrower open space corridor separating the urban and non-urban areas. 11 The subject lands are generally located near the intersection of Chandos Road and Wallgrove Road, Horsley Park. The land to the west of Wallgrove Road has at all times, and remains within, a rural non-urban zone. To the east of the subject land is an area zoned for 6(d) - Tourism purposes under the 1994 LEP, thereby creating a separation between the industrial land at Wetherill Park. 12 The applicants' claim is that by the early 1990's, or at least when State Environmental Planning Policy No. 59 ("SEPP 59") was gazetted on 19 February 1999, but for the restrictive zoning of the corridor, the land generally to the east of Wallgrove Road south of Chandos Road would have been included in an industrial/employment zone. 13 SEPP 59 was introduced for the purpose of identifying central western Sydney economic and employment areas. SEPP 59 re-zoned significant areas of land for employment purposes and enabled the Minister to declare land to be a release area and thereafter the preparation of a precinct plan and a contributions plan. 14 In 1991 Masterplan Consultants Pty Limited carried out a land use analysis of the Horsley Park Corridor. Reference is made to the northern land unit located between Horsley Drive and Chandos Street defined by a ridgeline which runs in an east west alignment adjacent to Horsley Drive. Employment based land uses were suggested for the area south of the proposed arterial road reservation adjacent to and to the west of the Wetherill Park Industrial Area. The report warned that appropriate development controls were necessary to ensure that development provided a satisfactory visual interface between the Wetherill Park Industrial Area and the core corridor lands to the west. The rising demand for industrial land up to 1991 was noted. Urban development has not occurred in the northern land unit to date. The Court does not gain a great deal of benefit from the Masterplan report for present purposes. 15 Mr Sanders, as I have said, placed significant emphasis on the importance of the ridge as a planning boundary, particularly where it becomes more pronounced as it proceeds in a northerly direction towards Prospect Reservoir. It is his contention that since 1968 the fundamentals of planning for Western Sydney have not changed to the extent that, in his view, the applicants' position is almost impossible to accept, namely that those responsible for the planning of the subject area would have adopted industrial uses of the subject land. Land south of the western growth corridor and west of the southwest growth corridor, including the subject lands, would have remained in a rural quadrant. In answer to Mr George's evidence that the location and suitability of the land for industrial development or the overall metropolitan need to expand industrial zonings cannot be ignored, Mr Sanders says that after 1988, when Sydney Into its Third Century – Metropolitan Strategy for the Sydney Region (DEP 1988) was released, strategies reflected a policy of urban containment that focussed on the development of existing areas within the Urban Development Program which had identified South Creek Valley and Bringelly as long-term options for investigation for urban development. Up to the date of his report, prepared in connection with these proceedings, there had been no broad scale land releases within either area. 16 Mr George contests the suitability of the land for rural residential use as a consequence of the constraints imposed by the influence of land uses such as the waste disposal facility at Eastern Creek and the Eastern Creek motor sports facility to the north, together with the proximity of industrial zoning and the industrial or comparative uses within and adjoining the northern part of the Horsely Park Corridor area. On the other hand, Mr Sanders says that any affectation would be limited with the closest industrial use being the waste disposal facility two kilometres to the north of Chandos Street and the industrial zoned land at Wetherill Park two kilometres to the east. As well as distance there are topographic features, which provide separation from the brickworks land to the north and the ridgeline to the east. 17 Both planners appear to agree that incremental growth to established urban areas and service networks should be preferred to total new greenfield development in isolated locations. They disagree, however, in respect of how the subject lands would have been dealt with. Mr Sanders considers that it would have been a new greenfield re-development for the land to be subject to release for urban purpose whereas Mr George expresses the view that industrial/employment zoning of the land would represent a logical extension of the existing zoning pattern. 18 Mr George summarises his opinion that the subject lands are generally suitable for urban development as follows:- § Urban development would represent a logical expansion of existing urban areas and zonings § The site and surrounding land involves no major physical constraints § The land is capable of being served. In this context it is worth noting that the provision of infrastructure for urban development is now significantly different to the situation when the Sydney Region Outline Plan was drawn up. Examples includes private infrastructure provision, the privatisation of the former Water Board, and specific funding mechanisms such as those adopted for SEPP 59 § The land is particularly suited for industrial/employment development because it is in a locality flanked by existing industrial/employment zones and those created by SEPP 59, and which contains other land uses such as the waste facility at Eastern Creek, the Eastern Creek racetrack and Australia's Wonderland. This established zoning and land use pattern makes the area containing the subject sites a logical extension of industrial zones. Factors such as odours form the waste facility and noise from the Eastern Creek motor racing facilities would prejudice residential use or rural residential use. 19 As I have already observed, Mr Sanders strongly resists any suggestion of a logical extension of the Horsley Park Corridor in a westerly direction beyond the ridge. Furthermore, he says that the absence of physical constraints and the capability of providing services is either not relevant or is not a fundamental prerequisite for the release of land for urban purposes. Moreover, its remoteness or separation from surrounding industrial land and related uses and the maintenance of the area adjacent to the subject lands as rural residential land counts against the prospect of the lands being re-zoned for employment purposes. Furthermore, land to the east has been zoned for tourism use. 20 According to Mr Sanders, the fact that the land on the western side of Wallgrove Road has not been affected by the proposal for the corridor reflects what would have been the actual zoning of land similar to the subject lands. 21 It is a significant part of the applicants' case that but for the existence of the corridor the areas subsequently adopted for the purposes of SEPP 59 would have included the subject properties. It is difficult to find a link between the areas now the subject of SEPP 59 and the subject lands. In addition to picking up areas already used for industrial purposes, SEPP 59 lands in general are contained within the western growth corridor and south western growth corridor in circumstances where the existing subdivision pattern and ownership did not impose a major constraint on development for industrial purposes. 22 The Court is not convinced that the conjectural opinions advanced by Mr George are to be preferred over those of Mr Sanders generally because the maintenance of a rural residential zoning west of Wallgrove Road and the presence of the significant ridge in the east more strongly suggests that the employment or industrial zoning would not have progressed in a western direction from the Horsley Park development or south from the waste disposal facility and existing brick pit. The characteristics of lands included within SEPP 59 are not, in the Court's opinion, consistent with a conclusion that the subject lands would have been included in it. Moreover, urban development has been consistently maintained within the western and south western corridors. 23 Bearing in mind that it is important to give the benefit of any doubt to a dispossessed owner, nevertheless the balance of probabilities is so weighted against the prospect of the subject lands being zoned for employment or industrial purposes that it must be rejected. The Court has concluded that the zoning of the land on the eastern side of Wallgrove Road would have mirrored the existing zoning on the western side of that road. This view is supported by comments made by the then Minister for Local Government on 11 August 1970 in a letter to the local member who had made representations on behalf of local land owners in an area containing the subject lands. 24 The Minister explained in his letter that in the SROP the ridge was designated "Regional Open Space" and "Services and Communications Corridor". The five primary reasons are set out as follows:- 1. It represents the physical division between eastern and western catchment of the Cumberland Plain and any extension of urban development beyond this point would involve the construction of a new sewerage and drainage system. 2. It is part of a land feature to be used as an effective western backdrop to urban development and as a significant feature in the landscaping of the urban environment. 3. It represents a natural boundary for the containment of Sydney's urban sprawl. 4. It represents a vital regional open space scheme for future metropolitan needs and is proposed as a reservoir of land which will meet some of the future recreational requirements. 5. It represents, particularly on the western side of the ridge, a vital link in the corridor system proposed as a reserve for the installation of major public utilities and communication systems of the future and as a vital link for this purpose between the south western and western urban corridors of the Sydney Metropolitan area. 25 Although the fifth point envisages acquisition, the Court agrees with Mr Lancaster's submission on behalf of the respondent that the first four points are "timeless principles" for the zoning of this area of Western Sydney. They show that it was unlikely in the extreme the subject lands would have been zoned for industrial purpose on any basis irrespective of the corridor. The arguments put by Mr George for the adoption of Wallgrove Road as a boundary and that the ridge should be regarded only as a visual backdrop or landscape feature are valiant attempts to elevate the applicants' case, but are not supported by any subjective analysis that assists the Court to change its view that events since 1970 in this part of Sydney have not resulted in any significant change to the views expressed by the Minister at that time. They are a convenient summation of the long-term position. 26 The Court is aware that the applicants have been unable to develop or realise the value of their land for several decades as a consequence of the restrictive zoning. Unfortunately for them that is not a relevant consideration for determining the underlying zoning at the date of acquisition for the purpose of assessing just compensation. It is not apparent from the evidence that in any respect the subject lands would have attracted value for industrial or employment related purposes, or, for that matter, any other urban purpose, if the road or corridor use for which it was resumed had never been contemplated. 27 Compensation will therefore be assessed and determined, without reference to any alteration in value arising from steps taken before resumption in the process or for the purpose of establishing the Western Sydney Orbital, as rural residential. Value 28 The valuers have conferred in accordance with the Expert Witness Practice Direction and have agreed on the following amounts for compensation on the basis of a rural residential use:- Matter No. 31053 of 2002 Land value - $1,300,000 (including compensation for severance pursuant to s 55(f) of the Just Terms Act). Disturbance - $21,406.12 Total compensation - $1,321,406.12 Matter No. 31057 of 2002 Land value - $1,042, 500 Disturbance (including solatium of $19,133) - $83, 687.07 Total compensation - $1, 126, 187.07 Matter No. 31065 of 2002 Land value - $1,135,000 Disturbance (including solatium of $19,133) - $88,407.00 Total compensation - $1,223,407 29 Both parties agree that the figures adopted by the valuers should be the subject of the orders determining the compensation payable by the respondent. There has been no argument in relation to the issue of costs. Matter No. 31053 of 2002 (1) The amount of compensation to which Carmen Vella is entitled pursuant to s 54 of the Land Acquisition (Just Terms Compensation) Act 1991 is determined at $1,321,406.12. (2) Costs reserved. (3) Exhibits may be returned. Matter No. 31057 of 2002 (1) The amount of compensation to which Ofelia Paoloni is entitled pursuant to s 54 of the Land Acquisition (Just Terms Compensation) Act 1991 is determined at $1,126,187.07. (2) Costs reserved. (3) Exhibits may be returned. Matter No. 31065 of 2002 (1) The amount of compensation to which Fortunato Martignago is entitled pursuant to s 54 of the Land Acquisition (Just Terms Compensation) Act 1991 is determined at $1,223,407. (2) Costs reserved. (3) Exhibits may 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.