> Land and Environment Court of New South Wales CITATION : Owners of Strata Plan 30064 v Road and Traffic Authority [2003] NSWLEC 368 APPLICANT: Owners of Strata Plan 30064 PARTIES : RESPONDENT: Road and Traffic Authority FILE NUMBER(S) : 30226 of 2002 CORAM: Bignold J KEY ISSUES: Compensation :- acquisition of frontage strip from land held in strata scheme and developed by existing industrial development LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991, s 66 CASES CITED: DATES OF HEARING: 15-17/10/2003 DATE OF JUDGMENT: 12/23/2003 APPLICANT: Mr J Webster, Barrister SOLICITORS Hunt and Hunt LEGAL REPRESENTATIVES: RESPONDENT: Mr J Maston, Barrister SOLICITORS Corrs Westgarth JUDGMENT: IN THE LAND AND Matter No. . 30226 of 2002 ENVIRONMENT COURT Coram: Bignold J OF NEW SOUTH WALES 23 December 2003 THE OWNERS OF STRATA PLAN 30064 Applicant v ROADS AND TRAFFIC AUTHORITY Respondent JUDGMENT 1. This is an objection pursuant to the Land Acquisition (Just Terms Compensation Act 1991), s 66 against the amount of compensation ($83,500) offered the Claimant in respect of the compulsory acquisition by the Respondent of a strip of land fronting Hoxton Park Road, Prestons and known as Nos 264-272 Hoxton Park Road, Prestons (the subject land) by Notification published in Government Gazette No 193 of 17 December 2001. 2. According to the Gazette Notice, the land was acquired for the purposes of the Roads Act 1993 and it is common ground that the land was acquired together with other lands fronting Hoxton Park Road for the purposes of providing thereon a bus transitway. 3. The road frontage strip compulsorily acquired from the subject land comprises Lot 12 in Deposited Plan 1036490, having an area of 658 m2. The configuration of the strip is an irregular shape with dimensions of 79 m fronting Hoxton Park Road, with a width ranging from 12.26 metres on the western boundary to 4.58 metres on the eastern boundary. 4. The subject land, following the compulsory acquisition of the strip comprises an area of 2.234 hectares and is developed by a large industrial warehouse style building that was originally approved to come into existence in 1975 and has been subsequently extended. The approved building and subsequently (in 1985) the subject land became the subject of a strata scheme (Strata Plan 30064) comprising multiple lots. 5. Evidence was adduced from three valuers as to the value of the strip of land compulsorily acquired. 6. Mr Hodgson, a Senior Valuer in the State Valuation Office who was responsible for the value stated in the compensation notice valued the land at $83,500 (being market value $80,000 and disturbance value $3,500). His Report under the Just Terms Act was adduced in the Applicant's case as Exhibit 10. 7. That Report contains the following statement of the Valuation Rationale that Mr Hodgson employed: Due to the relatively minor affectation on the residue parcel, the market value has been determined by the piecemeal method of valuation. Ie a rate per square metre has been applied directly to the acquired parcel. The valuation has been determined by having regard to recent sales evidence within the area. Adjustments for market movement, site size, shape and location have been taken into account in determining comparability. It is considered that the current market value of the site is $160 per square. 8. Mr Beckett, Consulting Valuer, also gave evidence on behalf of the Applicant valued the compulsorily acquired land in the sum of $150,000. His Report (Exhibit 3) adopted the following valuation rationale— The site has— A central location in an established and developing industrial area, and Has high visibility from a heavily trafficked road, and Is level land. The disadvantages of- Exiting in to heavy traffic during peak hours. The property formed part of a strata development and whereas it appears surplus land it is part of the land area and is very important to the lot owners as it provides out of hours parking for delivery vehicles. Depending on the Development Control Plan in force at the date of any future redevelopment the loss of this land could also impact on that redevelopment. Accordingly it is considered that the site should be valued on the basis of developable land fronting Hoxton Park Road. Our assessment of compensation on the basis of market value being GST exclusive is $225/m2 x 658.3m2 $148,117.50 Say $150,000 9. In his Report in reply (Exhibit 9) Mr Beckett in reliance upon the town planning assessments states that the loss of the frontage strip from the subject land "affects both the future redevelopment of the site and the present use of the site for available parking". 10. The third valuation was provided by Mr Sorrenson, a Consultant Valuer, called by the Respondent. In his opinion, the value of the acquired land was only for the nominal sum of $2,000. Mr Sorrenson's Report (Exhibit C) includes the following exposition of his valuation rationale— The Acquired Land originally formed part of the common property of an industrial factory until development subdivided by way of Strata Title. The building improvements are set well back from the acquired strip and no material effect, on a before and after basis is apparent as a result of the excision of the subject land. On a piecemeal approach, there is some argument for a rate per square metre assessment. However, the site is fully developed and the building improvements still have considerable economic life, therefore, there is little likelihood of redevelopment in the short to medium term. The improvements erected upon the residue land comprise modern, industrial factory unit buildings which have been Strata Titled and on-sold to various individual owners. These owners comprise both investors and owner-occupiers. The industrial factory units are of brick/masonry and metal construction in two (2) separate buildings along the side boundaries of the property. Concreted car parking and vehicle manoeuvring areas are in a central position between the building improvements. In addition, we are aware that at lease (sic) several long term leases have been entered into, which relate to the industrial factory unit development. ……. These leases further suggest that there is little likelihood of redevelopment of the residue site in at least the short to medium term. Based on the Town Planning report of Mr Rowan, and for the reasons set out therein, we are of the opinion that the excision of the subject strip from the abutting land has negligible effect upon the overall value of the property. We therefore assess compensation at a nominal $2,000. In our opinion, the highest and best use of the Acquired Land is a passive landscape/buffer strip between the existing building improvements and Hoxton Park Road. 11. It is to be noted that both consultant valuers in their respective valuation reports placed reliance upon the town planning assessments concerning future redevelopment options for the subject land and the consideration of the existing development of the subject land. 12. Ultimately I have found that the planning evidence is not particularly helpful or instructive in the assessment of compensation. But for completeness, I should record my view that I am more persuaded by Mr Rowan's planning assessment of present development and future redevelopment prospects of the subject land than Mr George's competing assessments. 13. The reason why I have so concluded is because of my acceptance of Mr Sorrenson's oral testimony. That testimony indicates that at the date of compulsory acquisition the subject land was far more valuable in its existing state of development than was its redevelopment value. Mr Sorrenson was the only valuer to give evidence of the value of the subject land in its current state of development. His estimate of the value of the subject land in its improved state as at the date of compulsory acquisition was between $8 and $9 million compared with its value of $4 million as a redevelopment site. 14. In his opinion there was a strong market demand for low rental industrial warehouse property in the Prestons and Macarthur areas and the existing development on the subject site captured that ready market and had maintained high occupancy rates throughout its life. 15. Although the existing development was becoming dated, he estimated a continuing viable life of between 10-15 years for the existing development. Moreover, his estimate of the improved value of the subject land at the date of compulsory acquisition did not distinguish between the land before and after the frontage strip was taken (because no discernible difference in valuation was thereby derivable). 16. Mr Sorrenson conceded that the taking of the frontage strip would reduce the remote possibility of the Owners Corporation of the Strata Scheme selling some land in front of the building to the owner/occupier of lot 1 in the existing strata scheme. 17. Under cross-examination, Mr Sorrenson opined that the value at today's date of the subject land with its existing improvements was approximately $12 million and that its counterpart redevelopment value was $8 million. 18. Finally, Mr Sorrenson expressed the opinion in his oral testimony that in the light of the whole of the evidence adduced at the hearing he would change his original estimate of the nominal value of compulsory acquired land from $2,000 to $25,000. 19. In my judgment, the valuation evidence of Mr Sorrenson is clearly to be preferred to the competing evidence of Mr Beckett and Mr Hodgson. 20. His evidence indisputably demonstrates the far greater value of the subject land in its existing development at the date of compulsory acquisition compared with its value as a redevelopment site at that date. 21. My acceptance of his evidence at this point demonstrates the ultimate irrelevance to the question of the value of the land taken of the competing town planning assessments concerning the existing development of the subject land and its redevelopment potentials. 22. I also accept Mr Sorrenson's opinion that the taking of the frontage strip may have reduced the possibility of the Owners Corporation negotiating with the owner of unit 1 in the Strata Scheme for some further development to be undertaken at the front of the existing development but that possibility was in any event remote. 23. Mr Sorrenson's revised valuation in the sum of $25,000 in my opinion provides a just measure of compensation to the Applicant and I adopt that figure as its market value. The competing valuations provided in the Applicant's case in my view are flawed inasmuch as they proceed upon an erroneous premise that the subject land at the date of compulsory acquisition was ripe for redevelopment. 24. The parties agreed that the amount of $3,734.65 should be allowed for disturbance payable pursuant to s 55(f) of the Just Terms Act, and I adopt that figure. 25. For all of the foregoing reasons, I determine that compensation payable in the present case is $25,000 for market value and $3,734.65 for disturbance. The question of costs is reserved. 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.