Land and Environment Court of New South Wales CITATION : Lalic v Roads & Traffic Authority of New South Wales [2005] NSWLEC 430 Darinka Lalic (Appl) PARTIES : Roads & Traffic Authority (Resp) FILE NUMBER(S) : 30172 of 2002 CORAM: McClellan CJ Valuation of Land :- Compulsory acquisition of land by RTA Whether the land would ever have been released for residential development KEY ISSUES: Flood prone land Ecological value of the land Comparable sales LEGISLATION CITED: Threatened Species Conservation Act 1995 DATES OF HEARING: 29 March - 1 April 2005 18 - 19 April 2005 DATE OF JUDGMENT: 08/12/2005 J Webster SC/M Carpenter (Appl) Albert A Macri Partners (Sol - Appl) LEGAL REPRESENTATIVES: J Maston (Resp) Corrs Chambers Westgarth (Sol - Resp) JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES McCLELLAN J FRIDAY, 12 AUGUST 2005 30172/02 LALIC v ROADS & TRAFFIC AUTHORITY JUDGMENT 1 HIS HONOUR : The applicant was the owner of a parcel of land described as Lot 7 section 3 DP 2202 and commonly known as No 7 Illaroo Road, Hoxton Park. The land is generally rectangular in shape with a variable southern boundary comprised of a permanent stream known as Cabramatta Creek. The property has a frontage to Illaroo Road of 254.33 metres and a depth of 139.33 metres. The total area of the site by survey is 3.27 hectares. 2 The land was compulsorily acquired by the respondent, the date of acquisition being 4 October 2002. At that date the land was zoned rural 1(e) - future urban under Liverpool Local Environmental Plan 1997. Under that Plan the minimum area for the erection of a dwelling is 2 hectares. The zoning of the land prohibited subdivision for residential purposes. The property had a single dwelling on it when acquired by the respondent. 3 The land is located at the end of Illaroo Road which joins Hoxton Park Road. Illaroo Road also gives access to major electricity facilities and contains a major church and community facility. 4 The land is relatively flat with a fall from the street frontage to the creek. Most of the land is inundated in the 1:100 year flood. The creek and adjacent areas have a high ecological value. These factors, but particularly the susceptibility to flooding, contributed to the fact that the land was not released for development when land in nearby areas was released. Whether it would ever have been released is an issue in these proceedings. 5 Although the land was zoned rural 1(e) - future urban under Liverpool Environmental Plan 1997, the applicant says that this zoning was only imposed because of the influence of the proposed roadway for which the land was acquired. The applicant says that without that proposal the land would have been released for residential or industrial purposes pursuant to the 1997 Plan. 6 The land was acquired by the respondent for the purpose of the construction of the major roadway known as the Western Sydney Orbital Link. The Link will form part of the national highway system and links the M5 and M3 motorways. The first public announcement of an intention by the Commonwealth to fund such a road was made in 1993 and work on its planning progressed until the final route of the roadway was approved in March 2002. This followed the exhibition of an environmental impact statement and consideration of potential environmental impacts of the proposed route, which commenced in July 1998. There is no doubt, and it is accepted by the respondent, that the announcement of the proposed orbital road had a significant impact on the planning for release of this site and other lands. Accordingly, it is common ground that it is necessary to determine the zoning and development potential of the land which would have existed at the date of acquisition if the road had not been proposed. The Planning History 7 The planning history of the site extends back to the County of Cumberland Planning Scheme which was made in 1951 when the land was included in the Green Belt. When the Liverpool Planning Scheme Ordnance was gazetted in 1972 the land continued to be classified as Green Belt. Interim Development Order 74, which was made in April 1978, zoned the land Non-Urban "C", effectively placing it into a holding zone awaiting urban development of the area. Detailed investigation of the Hoxton Park Stage 2 release area, which included the subject land, commenced in 1983. Later there was an environmental study for the area of Prestons which was completed in 1987. After these studies had been completed the lands to be released were broken up into six precincts, the subject site being included in the Cabramatta Creek Precinct. 8 The acquired land forms part of a precinct which lies within an area of major urban development within Liverpool. In 1989 the Liverpool City Council structure plan for future release areas was adopted and included the land within a precinct known as Precinct 1. However, it was also identified as being land affected by flooding, creating the necessity for the future study of its effective drainage in order to determine its urban potential. At that point in time, options for future use of the land included drainage reserve, open space, or large residential lots. An intention was also expressed in the structure plan that the creek system, in its natural form, should be retained. 9 The creek system which affects the land is a system comprised of two creeks known as Hinchinbrook Creek and Cabramatta Creek which converge at a point nearby to the land. In its natural form the land is significantly inundated when the creeks break their banks. In fact the Council's flood mapping shows that a large proportion of the site is inundated in a 1:100 year flood. The potential for the land to flood has significantly influenced the decisions which have been made in relation to the planning of land within Precinct 1, including the subject land. 10 By 1991 draft Local Environmental Plans had been prepared which contemplated the release of various precincts. The subject land, being within Precinct 1, was included within the draft for Local Environmental Plan 236 and given a 7(b) environmental protection (flood prone) zoning in the draft plan. However, the draft plan was not made in that form and the subject land and lands immediately surrounding it were excluded from the plan when it was made and remained zoned Non-Urban "C". Other lands within the 7(b) zone were included in the 2(f) zone which was the zone provided for residential land which was flood liable. The expectation of land zoned 2(f) was that it would be developed for residential purposes provided effective arrangements could be made for the protection of the land from flooding, together with the effective disposal of flood waters passing across the land. As is apparent from the development of an area to the north west of the subject site known as the "Stocklands Development" significant areas of land zoned 2(f) pursuant to Local Environment Plan 236 have now been effectively developed for residential purposes. 11 I am satisfied that the decision to exclude the subject land and lands immediately surrounding it from the Local Environmental Plan was made because of concerns that it was flood liable and it was necessary to find solutions to the management of flood waters before the land could be released for urban development. The report of the planner to the council which discussed the matter referred to directions made pursuant to s 117 of the Environmental Planning & Assessment Act 1979 which restricted the rezoning of flood liable land. At that point in time channelisation of the drainage facilities was contemplated as the solution which would allow the development of flood liable land and in a report dated 17 December 1991, in relation to the proposed release areas, the comment is made that the area which includes the subject land should be deferred until further investigation in relation to the precise size of the channelisation was carried out. It is noted that: "As the area is generally flood prone and not likely to develop in the near future, deferral is not expected to cause a problem. The traffic study and details of the design of Hoxton Park Road and the Prospect Arterial will also assist in determining the requirements for the land." 12 There is no suggestion in this report that the land would not be ultimately released for urban purposes - at least in part. The reference to the Prospect Arterial is a reference to a major road which was proposed to travel generally in a north/south direction near to the site. It is not the same roadway as the Western Sydney Orbital but was to be a major arterial road provided with State Government funds. Because the Orbital has been pursued the prospect Arterial is no longer in contemplation, although, the land set aside for it is now proposed to be used for a rapid transit corridor. 13 From this report I conclude that, notwithstanding the difficulties of draining the subject site, its future release for urban purposes was contemplated, provided adequate arrangements could be made to manage storm waters. This is consistent with the approach taken to the release of other flood liable lands and is undoubtedly consistent with good planning practice. 14 In 1993 a major study of the drainage in the catchment, which included the subject land, was completed. At the same time the policy of channelising waterways in urban areas was coming to an end. In future, urban runoff was to be carried in natural streams enhanced, if necessary, by appropriate flood mitigation measures. Accordingly, any expectation that the subject site could have been included in a subdivision which included the channelisation of floodwaters was no longer feasible. 15 Although the expectation of the planners in 1991 was that the subject land would not be released in the immediate future, I am satisfied that any prospect of its release was inhibited from at least 1993 by the announcement of the proposed Orbital. As I have indicated Liverpool LEP 236 was gazetted on 15 May 1992 and excluded the subject land. The documents reveal that from 1993 onwards work was being undertaken to determine the route of the Orbital. By 1995 the concerns of Liverpool Council in relation to the impact which the Orbital consideration was having upon the release of land within the area was apparent. In December 1995 the council had resolved to accelerate the release of land immediately upon determination of the precise location of the "national highway" and contemplated that this would occur without further environmental studies. Although the applicant emphasises the fact that the Council expressed a view that no further study would be required I do not believe that this would have been the position in relation to the subject land. The consideration of the release of that land would always have required the development of a strategy for the disposal of floodwaters on the site and adjoining lands which would have necessitated a comprehensive study before the land could have been released for urban purposes. 16 The history of the release and take up of land in precincts outside the subject area shows rapid development of the area. Within a period of 15 months the council had released approximately 12,500 lots and Precinct 1 had reached its effective completion by 1996-1997. Obviously, the Council was aware of the rapid take up of these allotments which was no doubt a reason for the endeavour to put pressure on the State Government to accelerate the planning process to enable further releases to occur. 17 Correspondence, which is in evidence, makes plain that during this time considerable pressure was building for the release of land for urban purposes in the Sydney region. Significant concerns are expressed about the upward movement of land prices by reason of emerging shortages and the need to make more land available is clearly evident from 1995. However, at no stage was it contemplated that the subject land and the immediately surrounding land would be released. I am satisfied that this was because of the need to determine the route for the Orbital and, if the land was not required for that project, the need to resolve the drainage problems. The Planning evidence 18 Planning evidence was given by Mr Harvey Sanders who carried out an extensive review of the available documentation. He was retained by the respondent. The applicant engaged Mr David Haskew. The planners are agreed that the delay in progressing some of the release areas within Hoxton Park Stage 2 Release Area was attributable to the Orbital. Mr Haskew reached the conclusion that this affected the release of the subject land although Mr Sanders says otherwise. Both provided reasons for their conclusions which were founded upon their examination of the relevant documents. 19 As it happens, it is unnecessary to resolve some of the differences between them. By the conclusion of submissions counsel for the respondent, correctly in my view, conceded that but for the plans for the Orbital a decision as to the development potential of the subject land would have been made prior to the acquisition. Accordingly, the controversy which remains relates to the timing of that decision and more importantly the development potential, if any, of the subject land. 20 With respect to the timing of the decision, I have little doubt that this would have been achieved within sufficient time to enable the land to be released when the 1997 Environmental Plan was made. Mr Haskew holds the opinion that, but for the Orbital, all of the necessary planning decisions would have been made so that the land could have been released by 1995. It is conceivable that his estimate is correct but the complications provided by the Orbital project are such that determining a precise date is not possible. 21 Mr Sanders' cautious view of the prospect of the release of the subject land is derived from his opinion that, because it is flood liable, additional caution would have been exercised by the planing authorities. However, to my mind, this overlooks the way in which other flood liable land has been dealt with, some of which was released in 1991 with the expectation that further flood studies would be undertaken. I am satisfied that, but for the Orbital project, the pressure for the release of land was such that the subject land would have been made available for urban development by 1997. The LEP would have imposed requirements which constrained development to parts of the land which could be secured from flooding and would have made development subject to the implementation of an effective coordinated plan for the drainage of the catchment including the subject land. 22 Implicit in this conclusion is a rejection of Mr Sanders' opinion. I am satisfied that Mr Sanders has not given sufficient weight to the actions which the council had already taken to release flood liable land, subject to appropriate conditions requiring necessary studies to be undertaken. This may have required an overall drainage plan coupled with a s 94 contributions plan to provide the funds to implement the plan but there is no reason why this could not have been finalised by 1997. Given the pressure for the release of land, which would have included pressure exerted by owners on the council, of which there is significant evidence, I am in little doubt that the decision to release the land would have been made by the time the 1997 LEP was made. 23 Even if I am wrong and the release of the land could not have been achieved by 1997, I have no doubt it would have been finalised before the date of acquisition. The pace of development in this area was such that it is inconceivable that final decisions would not have been made and implemented by that time. The Regional Plan 24 Greater Metropolitan Regional Environmental Plan (No 2) - Georges River Catchment was gazetted in February 1999 and imposed restrictions on the development of flood liable land defined by reference to the Liverpool Council's flood map. Although the respondent initially submitted that this would have prohibited the release and development of the subject land this submission was subsequently withdrawn. The respondent accepts that the Regional Plan would not have prohibited either the filling of the land for the purpose of creating an area above the 1:100 year ARI flood level, or the use of the filled area for housing, (and I infer any other form of development) if otherwise appropriate. In any event, if the land had been released in 1997, the relevant provisions of the regional plan would have been of little consequence. What would the land have been zoned? 25 That leaves the question of the zone which would have been given to so much of the land as would have been capable of development. I have no doubt that the creek and immediately adjacent lands would have been zoned so as to preclude any form of development. The respondent says that because of the potential of the balance of the land to flood and, particularly, because it would become isolated in time of flood, it would not have been zoned so as to permit any form of development. In effect it is submitted that the land had little, if any, urban potential. 26 Evidence with respect to the flooding potential of the land was given by two experienced engineers. Mr Bewsher was retained by the applicant and Mr Rowbottom by the respondent. 27 The engineers agree that a significant portion of the site is presently within a high hazard area in time of flood. They agree that 95% of the site is flood liable. They are also in agreement that in a time of flood the land would be isolated from Hoxton Park Road, where in a 1:100 year flood depths of water of the order of 1.8 metres would be likely to occur. Water approaching this depth would also be present in Illaroo Road. The consequence would be that, in a time of flood, it would not be possible for conventional motor vehicles to access the site or for most people to safely wade through the waters. Accordingly, anyone at the site during the time of a flood would have to remain in that location and people outside the site would not be able to gain access to it. If part of the land was developed for residential purposes this would cause particular problems especially for families and could lead to the isolation of school children or elderly people. It will be obvious that problems would also be created if an emergency occurred. 28 For these reasons Mr Rowbottom was of the opinion that, even if part of the land could be filled and made suitable for development with floor levels provided above the 1:100 year flood level, the prospective isolation of the site in time of flood would preclude it being zoned for development. He draws attention to the Flood Plain Management Manual published in 2001 which was the successor to the first flood plain development manual published in 1986. 29 Drawing upon the Manual Mr Rowbottom is of the opinion that it is unacceptable to develop in an area which would be isolated in time of flood. In his opinion, experience has shown that even if a safe refuge is provided for people within an area cut off by flood some persons may attempt to escape the area and put themselves at peril. Furthermore, there will be difficulties for people should an emergency arise. He also envisaged problems with children who may be unable to come home from school or families which may be separated in times of flood. 30 Mr Bewsher takes a different view. In his opinion, by the time of the acquisition of the subject land the attitude to the appropriate response in time of flood had changed, largely due to experiences of flooding in Wollongong. He is of the opinion that vertical evacuation would be acceptable. This involves providing an area within any building which is at a level above the maximum probable flood level, so that, in times of severe flood, persons can retreat to an upper level and wait out the flood. 31 Because the subject land was known to be inundated in large part in a 1:100 year flood, it is submitted that the land was flood liable and accordingly, development would be impossible. However, this does not allow for the possibility that coordinated drainage arrangements could be made which would have the effect of raising part of the land above the 1:100 year contour, effectively draining the remainder of the land and providing an area for development. This is the outcome which has been developed for the Stockland land. 32 I do not believe the flooding potential was an impediment to the development of all of the subject land. However, it would have been necessary to have prepared a detailed study of the land to identify areas which could be filled to create land above the 1:100 flood level and to ensure that the effective drainage of the land was coordinated with upstream and downstream properties. 33 An illustration of the design work which would have been required is given by the release in May 1999 of an advanced draft of a Cabramatta Creek Flood Plain Management Study & Plan. Although that Plan did not provide for the effective water management on the subject land, it nevertheless gives an indication of how the matter would have been approached if the land had been included within it. The land was not included because, by this point in time, the Orbital road was proposed and the subject land was incorporated into drainage proposals which included the drainage of the Orbital land. However, in that study an indication is given of the way in which land which may have been at risk of flooding would be managed. In areas of high flood risk development was prohibited. In areas of medium flood risk development was permissible provided that floor levels of habitable floors for residential property were no lower than the 1:100 year flood level plus free board which would conventionally be ½ metre. Other requirements not presently relevant were imposed. 34 Provision was also made for planning for evacuation from such sites. If reliable access for pedestrians or vehicles could not be provided a minimum of 20% of the gross floor of a dwelling was to be erected above the probable maximum flood level. This would normally be done by constructing at least part of a dwelling with an upper level providing a floor area above the probable maximum flood. 35 Mr Bewsher gave evidence as to the approach which in his experience a prospective purchaser of the land at the date of acquisition may have adopted. Upon the assumption, which I believe appropriate, that the land by that date would have been zoned in some way which contemplated urban development, subject to the provision of appropriate detailed planning for drainage and the conservation of significant vegetation, he believes that a purchaser would have been told that it would be appropriate to assume that somewhere about 40% but up to 48% of the site could have been filled to a level which would have enabled its development for urban purposes. The balance of the site would have been left as open space, or, provided as a flood runner, in accordance with a plan which Mr Bewsher prepared. That plan provides for the maintenance of the natural creek area and the provision of a manmade "flood runner" adjacent to it which would accommodate water in times of high flow. This would have necessitated significant earth works and the revegetation of the land to avoid erosion. I am satisfied that such a plan could have been achieved. It is similar to a plan developed by Mr Bewsher for the Stockland land which has now been implemented and which I viewed with the parties when examining the area. 36 I generally accept Mr Bewsher's evidence and believe that a purchaser would have accepted that it would be able to develop up to 48% of the site. However, it would also have appreciated that it faced significant hurdles before achieving any development. Would it have been zoned for industrial or residential development? 37 The likely zoning of the subject site is, in my opinion, not only affected by the impact of floodwaters. As I have indicated the land is at the end of Illaroo Road and was not a particularly attractive parcel. It is low lying, visually affected by significant power lines and an electricity substation which can be seen from various parts of the property. An examination of the planning scheme map reveals that it was not integrated in a residential area, and even if the Orbital roadway had not been proposed, in my opinion, it would have been unlikely to have been seen as a desirable residential site. 38 Before the date of acquisition, the council had made a decision which would have suggested that, when the land was developed, residential development would have been considered to be appropriate. However, after the route of the Orbital had been fixed and by the time the council came to consider the release of the land in the area which had become known as the Yarramunga Release Area, which, but for the Orbital, would have included the subject land, its attitude had changed. Instead of the whole area being residential, land to the north of Yarramunga Road was identified as suitable for industrial development. 39 But for the Orbital, a decision would have been required in the Yarramunga Release Area well before the date of acquisition and would have included consideration of the subject land. Given that by 2004 it was recognised that a significant portion of the Yarramunga Release Area should be industrial, I believe that, when the land was considered for urban release, it would have been given over to industrial development. Industrial development would also have been more compatible than residential development with the flooding situation. Whereas residential development provides facilities for families, including young children and old people, who will be more vulnerable in a flood emergency, industrial development would normally be confined to workers and customers of the industrial facility. Residential properties are, of course, used for sleeping and on this site floodwaters could rise quickly during the night causing difficulties for persons trapped in dwelling houses. Such a situation is less likely to occur with industrial development. Furthermore, industrial development can be readily designed to ensure that the floor level of working spaces is kept above a relevant flood level and car parking provided on the lower levels. It would be likely that a greater proportion of the land could be effectively utilised if the property was given over to industrial development. 40 Having regard to all of these matters I am satisfied that the land would have been released for urban purposes before the date of acquisition. It is likely that it would have been released in the 1997 Local Environmental Plan or shortly thereafter. I am also satisfied that having regard to the natural attributes of the land, its location and the impact of surrounding development, together with the serious impact of flooding, that the land would have been zoned for industrial purposes and not residential. The ecological value of the land 41 Evidence as to the ecological value of the land and the impact of Mr Bewsher's plan was given by Dr Anne-Marie Clements, who was retained by the respondent and Mr Dimitri Young who was retained by the applicant. From an examination of the site and scrutiny of historical information from before the land was cleared for the Orbital, the consultants agree that vegetation adjoining Cabramatta Creek included the endangered ecological community Sydney Coastal River-Flat Forest listed in Part 3 Schedule 1 of the NSW Threatened Species Conservation Act 1995. The area of the community was agreed to be approximately 1.4 to 1.5 ha. The total area of mapped Alluvial Woodland in Western Sydney in 1999 was 4729 ha. At the same date 867 ha was mapped in the Liverpool Local Government Area. 42 It was agreed by the consultants that at the very least the vegetation within 40m of Cabramatta Creek would have to be retained if the land was developed. The extent to which it would be acceptable to remove vegetation to provide the flood runner was the issue upon which they could not agree. 43 Mr Young believed that of the 1.43 ha of endangered ecological community only 0.8 ha would be required to be retained. The loss of the other 0.63 ha would not, in his opinion, have been likely to have a significant effect provided a number of measures were taken. Those measures were described in his report in the following terms: " Recommendations for Impact Mitigation and Amelioration A number of impact mitigation and amelioration strategies that would have been likely to be adopted for the potential urban development proposal are recommended and these are set out in the section below. These strategies would have mitigated the effects of the proposal on threatened species, endangered populations, or ecological communities, or their habitats and minimised the impacts of the proposal on the flora and fauna values of the study area in general. Date of Acquisition Scenario (2002) The proposal at the date of acquisition in 2002 could have avoided disturbances to native vegetation for a distance of 40 m from the northern bank of Cabramatta Creek. This would have retained a stand of Sydney Coastal River Flat Forest (Alluvial Woodland) with an area of approximately 0.80 ha on Lot 7. Mid 1990's Scenario (1996) The proposal in 1996 could have avoided disturbances to native vegetation for a distance of 30 m from the northern bank of Cabramatta Creek. This would have retained a stand of Sydney Coastal River Flat Forest (Alluvial Woodland) with an area of approximately 0.63 ha on Lot 7. Both Scenarios The proposed drainage floodrunner could have been located and constructed to avoid disturbances to native vegetation within the Sydney Coastal River Flat Forest (Alluvial Woodland) to be retained. The excavated area could have been located beyond the drip lines of any trees to be retained in order to avoid damage to roots. Machinery could have avoided entering the vegetation to be retained in order to avoid soil compaction and the build up of soil around tree trunks. A buffer of native vegetation could have been re-established between the southern edge of the proposed development and the northern edge of the Alluvial Woodland to be retained, generally within the level floor of the proposed drainage floodrunner. This buffer could have been planted with species representative of Sydney Coastal River Flat Forest (Alluvial Woodland). The width of this buffer could have been determined with reference to any required bushfire asset protection zone for the development and/or appropriate setbacks from vegetation for the drainage structure. This buffer would have provided an area between the retained vegetation along Cabramatta Creek and the development that could have protected the integrity of the riparian corridor and its associated vegetation. A Vegetation Management Plan could have been prepared for the Sydney Coastal River Flat Forest (Alluvial Woodland) to be retained and the vegetated buffer to be established to the north of the retained vegetation. This Plan could have devised strategies to control weeds, exotics and recreational uses, in order to rehabilitate and revegetate the native vegetation in the riparian corridor of Cabramatta Creek and manage the vegetation for conservation. Appropriate sediment control measures could have been established before the commencement of work on the development proposal and retained in place until all bare areas had been revegetated. Water sensitive urban design principles could have been used in the design of the development proposal to mitigate the effects of the proposal on the hydrology of adjacent watercourses. Native plants known from Sydney Coastal River Flat Forest (Alluvial Woodland) could have been included in landscaping of the development. Machinery to be used for excavation and construction of the proposal could have been thoroughly cleaned of soil and plant material before entering the study area." 44 He was also of the opinion that: "Assessments pursuant to State Environmental Planning Policy (SEPP) No 19 Bushland in Urban Areas, SEPP 44 Koala Habitat Protection and Clause 16(1) of Liverpool Local Environmental Plan 1997 would not have constrained the removal of 0.63 ha of Sydney Coastal Riverflat Forest for the potential development proposal at the date of acquisition. The Statement of evidence of Mr Drew Bewsher states that the proposed floodrunner would more than compensate for the water conveyance requirements of the site and would also satisfy the flood storage requirements. The impacts of this floodrunner on Sydney Coastal River Flat were not considered to be significant pursuant to Section 5A of the NSW Environmental Planning and Assessment Act 1979. The floodrunner may provide suitable habitat for Sydney Coastal Riverflat Forest and the southern part of the floodrunner could be revegetated with species characteristic of Sydney Coastal Riverflat Forest to provide a vegetated buffer to the forest to be retained intact between the floodrunner and Cabramatta Creek in the south. The intact vegetation and the revegetated buffer may be managed for conservation by a vegetation management plan prepared by a suitably qualified person. The removal of a band of Sydney Coastal Riverflat Forest parallel to Cabramatta Creek for the construction of the proposed floodrunner would retain a 40 m wide intact vegetated buffer along the creek. Revegetation of part of the floodrunner would widen the riparian buffer to about 60 m on the northern side of Cabramatta Creek. This is unlikely to compromise the integrity or connectivity of the riparian ecosystems along the riparian corridor of Cabramatta Creek." 45 Dr Clements maintained that the: "Extent of vegetation that requires retention would have been approximately 1.4 to 1.5 ha in the south that was mapped as the endangered ecological community Sydney Coastal Riverflat Forest. Do not support cutting artificial drainage channel within an endangered ecological community Sydney Coastal Riverflat Forest parallel to Cabramatta Creek. The main reason for the lack of support is that no data are present on acid sulphate potential, effects of drainage changes on species composition, no compensatory habitat is being considered despite extent of removal of Sydney Coastal Riverflat Forest. The proposal for the flood runner is likely to restrict the width of the natural flood plan and the natural habitat of the endangered ecological community Sydney Coastal Riverflat Forest. The extent of flooding post construction of a flood runner is not within my expertise. In terms of 8 part test, (a) Sydney Coastal Riverflat Forest is not primarily a narrow riparian corridor but likely to have cover of approximately 1.4 to 1.5ha of the floodplain on the Site. (b) Riparian vegetation along Cabramatta Creek joins with riparian vegetation of Georges River and forms an important integral part of the riparian ecosystems. Removal of part is likely to reduce connectivity adding to the overall risk of degradation. (c) … I do not agree with the responses to all of the paragraphs of the 8 part test presented by Dimitri Young." 46 I am satisfied that the development potential of the site should be assessed in accordance with the views of Mr Young. Although there can be no doubt that decisions in relation to the development potential of the site would have required careful evaluation of the Sydney Coastal Riverflat community I am of the view that the council would have determined that a scheme similar to that designed by Mr Bewsher would have provided the preferred outcome for the site. The evidence makes plain that notwithstanding the significance of the endangered community it was degraded and without an active conservation effort would almost certainly have been further degraded. A plan such as Mr Bewsher's, although involving the loss of some of the community, provides for the restoration and long-term maintenance of a significant proportion of it. Such a plan would ensure a satisfactory conservation outcome which allowed the productive use of a significant parcel of urban land and, in my opinion, would have been accepted by the Council. Market value 47 It remains to determine the market value of the land. Although the valuers approached that issue having regard to the various assumptions made with respect to the development potential, both as to zoning and the amount of land which may have been available, it is only necessary to consider the value of the land having regard to its potential to be developed for industrial purposes. 48 I am satisfied that at the date of acquisition the land would have been included in a Local Environmental Plan which provided for its development in part for industrial purposes. The plan would also have included provisions which required the development of an overall drainage and vegetation study, with the drainage of the site being integrated with the adjoining upstream and downstream lands. In my opinion, a purchaser would have concluded that it would be likely that in the order of 48% of the site would have been available for urban development but there would have been significant costs in generating the necessary studies and in carrying out the required earth works to secure this area of developable land. The risk of achieving a satisfactory development would have been greater than for other industrial land in the area. 49 The evidence of value was given by Mr Neskovski who was retained by the applicant and Mr Lunney who was retained by respondent. Although both are experienced valuers Mr Neskovski was not an impressive witness. I formed the opinion that he was inclined to resolve difficulties in a manner which was unreasonably favourable to the applicant. 50 The parties are agreed that the best evidence of the value of the land upon, the assumption that it would be available for development for industrial purposes, was provided by the sale of No 10-12 Bernera Road Prestons. The sale was of an area of 2.935 ha and was zoned industrial 4(a). The sale was effected in August 2002 for a price of $4,350,000 plus GST. The rear of the site included vegetation which would be retained in any development. The purchaser of the land was Boral Limited and it would seem likely that it was purchased for use as a concrete batching plant and development of other parts of the land with industrial buildings. 51 The area of land at the rear of the Boral site which did not have development potential comprised approx 5,000 m². Special arrangements were included in the contract in relation to this part of the land. The ecological concern with respect to part of the site delayed its development for a period claimed by Mr Neskovski to be 18 months. Before the land could be developed the owner was required to fund the provision of sewerage to the site. Part of the site was required for road widening (for which I presume compensation was paid) leaving a net developable area of approx 18,8000 m². The sale requires adjustment to the date of acquisition which I assess at 3%. It would also require adjustment for the influence of the M7. The area of land at the rear of the Boral site which did not have development potential comprised approx 5,000 m². Special arrangements were included in the contract in relation to this part of the land. The ecological concern with respect to part of the site delayed its development for a period claimed by Mr Neskovski to be 18 months. Before the land could be developed the owner was required to fund the provision of sewerage to the site. Part of the site was required for road widening (for which I presume compensation was paid) leaving a net developable area of approx 18,8000 m². The sale requires adjustment to the date of acquisition which I assess at 3%. It would also require adjustment for the influence of the M7. 52 By the use of a complex system of calculations Mr Neskovski assessed that this sale indicated a rate of $224 per m² was appropriate for the developable section of the subject site. This is a higher rate than the analysed rate for the developable portion of the Boral sale. In Mr Lunney's opinion, the sale demonstrates a rate of only $200 per m² for the developable portion of the subject site. 53 To my mind, the subject site is inferior to the Boral sale. Both access and, more particularly, exposure of the subject site is inferior and although the flooding issue can be resolved (a risk which I deal with separately below), it would nevertheless have been a significant issue for any purchaser. It would have required a purchaser to incorporate into any development special provisions for the safety of buildings and persons during the inevitable flood events. Furthermore, any subsequent occupiers of the property would have been required to accept that they would have been unable to access or leave the property for the duration of any flood. To my mind, these were problems which did not attach to the Boral sale and, accordingly, I believe that the analysis conducted by Mr Neskovski cannot be accepted. I am satisfied that, at its highest, by reference to the Boral sale the appropriate rate for the developable land at the date of acquisition was $200 per m². 54 Beyond the adverse features of the subject site to which I have referred the valuers are also agreed that the flooding and drainage problems created additional "risks" to the development of the site which were not apparent on the Boral site. The risk identified was that because of the flooding problem a purchaser at the date of acquisition would have discounted any price it would pay against the risk that development consent might not be achieved, or as may have been more likely, would have taken a lengthy period to achieve. 55 There is, of course, no market evidence to assist in making this judgment and I am dependent on the experience and competence of the respective valuers. As I have already indicated I have greater confidence in the professional judgment of Mr Lunney than Mr Neskovski. In relation to this matter Mr Neskovski suggests only a small discount, 10%, Mr Lunney a larger discount of 25%. I adopt Mr Lunney's figure and in doing so I am influenced by the fact that in accepting that 48% of the site may have been developed, any prospective purchaser was taking a greater risk than if the development potential of the land was confined to only 40% of its area. 56 The valuers also considered two further sales of industrial land. One was the sale by Herrmann to the RTA of land at 4 Bernera Road which is at the corner of Jedda Road, Prestons. Although the valuers are agreed that this sale does not represent the best evidence of value it analyses at a rate of $170 per m². 57 The valuers also looked at the sale of property of Lot 307 DP1045444 Enterprise Circuit. That property had an area of 1.696 ha and sold in December 2002 for $2,883,200, which analyses at $190 per m². There were some difficulties with access to this site and the valuers are agreed that it may not be a reliable guide to the value of the subject property. 58 The valuers have utilised the summation method to arrive at the value of the whole of the land. I believe this is appropriate. Accordingly, it is necessary to assign a value to the portion of the site which is environmentally sensitive, liable to flooding and which was given over by Mr Bewsher to a flood runner with appropriate revegetation. To my mind, when the developable portion of the land was being rezoned for industrial development the balance of the site would have been given a confined zoning which, either through the Local Environmental Plan or development control plan would have contemplated its acquisition by the Council. Mr Neskovski believes that the Council would have paid $60 per m² for the land. Mr Lunney says it would have been purchased by the Council for only $20 per m². 59 Mr Neskovski draws upon the history of the Council when acquiring other land given over to open space purposes pursuant to adopted development control plans where a value in the order of $60 per m² has been paid. That value would have been defined by the terms of the development control plan, incorporated into a s 94 plan, whereby the funding of the acquisition and development of open space lands would have been met by developers' contributions. Those contributions would have provided for active recreation facilities, including playing fields, to be incorporated into the areas acquired by the council. 60 In the present case Mr Bewsher's plan does not provide for any active recreation on the acquired land. Under his plan it is necessary for all of that land to be developed so as to facilitate the movement of floodwaters and the regeneration and conservation of appropriate native vegetation. Accordingly, I do not consider it appropriate to value that land by reference to land which the council has elsewhere acquired for active recreation purposes. 61 Given the necessity to acquire and effectively rehabilitate the land which could not be developed, in my opinion, a purchaser would have assessed the value of that land at the rate which the Council was paying for similarly constrained land. That rate can be identified in the Liverpool Council Contribution Plan 2001 at $10 per m² and adjusting that rate to date of acquisition the rate, appropriately rounded, is $20 per m². I accept Mr Lunney when he says that in his experience the Council would have approached the matter in this manner. I do not accept Mr Neskovski's view that it could be valued at $60 per m². 62 There have been other decisions of this Court which have attributed a higher value to land with ecological value or flooding difficulties which would have been acquired by the Council. However, the circumstances of the present site are unique in that a satisfactory comprehensive drainage scheme would have been necessary before it could even be released for any form of urban development. In those circumstances and having regard to the high ecological value of the land near to the waterway, I do not believe the land should be valued at an amount in excess of $20 per m². 63 Attention was drawn to the fact that the Boral sale included land which, because of its vegetation, could not be developed although, in the special circumstances of the contract, a significant sum (assessed at $70 per m²) was paid for it. I do not believe that this is a reliable guide to the value of the land which could not be developed on the subject site. Whatever may have been the motivations of the parties to the Boral contract the problems facing a purchaser of the subject site were significantly different. Before the subject land could be developed at all the flooding problems needed to be resolved which gives a quite different context to the provisions which would have been made in any planning instruments for the acquisition of the land necessary to provide for the retention and disposition of floodwaters. 64 The valuers are agreed that from any value derived an amount of $100,000, being the cost of flood mitigation works and $170,000 for the cost of replanting threatened species after constructing a "floodrunner", would have been required. Accordingly, a total of $270,000 must be deducted. 65 The valuers are in disagreement about whether a specific allowance should be made for the case of a flood study, estimated by Mr Lunney to cost $100,000. To my mind, adequate allowance has already been made for this aspect of the matter when deriving the rate by comparison with the Boral sale and no further discount is necessary. 66 Reference was made in submissions to the market value which I determined for other industrial land in the vicinity. It is only necessary for me to indicate that each case must be determined having regard to its own facts and, for the reasons I have indicated, I am of the opinion that the land, the subject of the present dispute, suffered many disadvantages as against other land in the area which the respondent has acquired. Conclusion 67 In these events I determine the market value of the acquired land in the following manner: Total area of acquired land 31,420 m² % of developable land 48% 15,082 m² Rate/m² for development land $200 m² Market value of developable land $3,016,320 Less further discount because of risk of development assessed at 25% $2,262,240 Non-developable land 18,852 m² Rate per m² $20 m² Market value of non-developable land $326,768 Deduct cost of flood mitigation works and planting ($270,000) Total market value $2,319,008 But allowed at $2,320,000 68 Since preparing these reasons in draft the Court of Appeal has handed down its decision in Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd (2005) NSWCA 251. For reasons which I will publish in Smith v Roads & Traffic Authority of New South Wales NSWLEC 438, I, with respect, have difficulty reconciling the reasons of Basten JA with earlier decisions of the Court of Appeal and with decisions of the High Court. In the present case as I have indicated, the parties were agreed as to the appropriate application of the relevant provisions of the Land Acquisition (Just Terms Compensation) Act 1991. Accordingly, all that was required in this case was resolution of the factual issues and it has been unnecessary to incorporate a discussion of Walker Corporation. 69 For these reasons although I considered that it may be appropriate to ask the parties to return for further submissions I ultimately concluded that this was unnecessary. 70 I direct the parties to bring in short minutes in accordance with my reasons. Costs may be argued. ********** 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. 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