Land and Environment Court of New South Wales CITATION : Breen v Sutherland Shire Council [2008] NSWLEC 15 APPLICANT Tobias Essington Breen PARTIES : RESPONDENT Sutherland Shire Council FILE NUMBER(S) : 30170 of 2007 CORAM: Jagot J KEY ISSUES: Compulsory Acquisition of Land :- compensation - market value - comparable sales - adjoining owner influence - injurious affection LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 State Environmental Planing Policy No 10 - Retention of Low-Cost Rental Accommodation Boland v Yates Property Corporation Pty Ltd and Another (1999) 167 ALR 575 Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Limited and Others (1947) 74 CLR 358 CASES CITED: Croghan v Hawkesbury City Council (1998) 99 LGERA 375 Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 129 LGERA 65 Hazcorp Pty Limited v The Roads and Traffic Authority of New South Wales [2006] Maloney v Cowra Shire Council [2000] NSWLEC 33 DATES OF HEARING: 4 & 5 December 2007 DATE OF JUDGMENT: 31 January 2008 APPLICANT Mr J J Webster SC with Mr A Hyam SOLICITORS Willis & Bowring LEGAL REPRESENTATIVES: RESPONDENT Mr T F Robertson SC with Mr J E Lazarus SOLICITORS Pike Pike & Fenwick JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Jagot J 31 January 2008 30170 of 2007 TOBIAS ESSINGTON BREEN Applicant SUTHERLAND SHIRE COUNCIL Respondent JUDGMENT Jagot J: A. Introduction 1 On 24 November 2006 Sutherland Shire Council (the Council) compulsorily acquired lots 20, 21 and 22 in section 2 deposited plan 8670 (known as 94, 95 and 96 The Esplanade, Cronulla) from the applicant for the purpose of open space. 2 The applicant claimed $10.695 million in compensation (although this figured altered by reference to the evidence). The Council offered compensation in the sum of $8,523,700 in accordance with the Valuer-General's determination as provided for in s 42 of the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Compensation Act). The applicant lodged an objection with the Court against the amount of compensation offered (s 66(1) of the Just Terms Compensation Act). The Court is to hear and dispose of the applicant's claim for compensation (s 66(2)). 3 In the proceedings the applicant claimed compensation consisting of: - (i) market value of either $10,450,000 or $10,600,000, (ii) loss attributable to disturbance of $74,226.44, and (iii) a decrease in the value of other land owned by the applicant adjoining the acquired land (lot 19 in section 2 deposited plan 8670 known as 2 Jibbon Street, Cronulla) by reason of the proposal to carry out the public purpose in the sum of $500,000. 4 During the hearing the parties agreed the amount payable on account of disturbance in the amount of $27,920. 5 The Council claimed that just compensation for the acquired land consisted of: - (i) market value of $7,600,000, (ii) an increase in the value of 2 Jibbon Street in the sum of $500,000, and (iii) the agreed loss attributable to disturbance. 6 Compensation is to be determined in accordance with the provisions of the Just Terms Compensation Act, in particular ss 54(1), 55 and 56. Those sections provide as follows: 54 (1) The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land. 55 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 the date of its acquisition, (b) any special value of the land to the person on the date of its acquisition, (c) any loss attributable to severance, (d) any loss attributable to disturbance, (e) solatium, (f) any increase or decrease in the value of any 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. 56(1) In this Act: market value of land at any time means the amount that would have been paid for the land 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 of the land 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. 7 In applying these provisions any genuine doubt ought to be "resolved in favour of a more liberal estimate" (Boland v Yates Property Corporation Pty Ltd and Another (1999) 167 ALR 575 at [356], citing Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Limited and Others (1947) 74 CLR 358 at 373 – 374). B. Discussion General 8 The hearing included an extensive view of the acquired land, 2 Jibbon Street, the comparable sales, and their surrounds. 9 The acquired land has frontage to The Esplanade, a public walkway extending for a considerable distance along the foreshore area between Shelley Beach and Port Hacking. 10 94 The Esplanade (lot 20) has an area of 739.8 sqm. The rear (western) boundary of 94 The Esplanade adjoins a public laneway. An unformed extension of Jibbon Street adjoins most of its northern boundary. This unformed part of Jibbon Street appears as part of Oak Park, a public reserve owned and managed by the Council to the north of the acquired land. 11 95 The Esplanade (lot 21) adjoins lot 20 to its south. 95 The Esplanade has an area of 670.30 sqm. Its rear (western) boundary also adjoins the same public laneway (extending to the northern boundary of 96 The Esplanade). 12 96 The Esplanade (lot 22) is the southern most lot within the acquired land. It has an area of 701.15 sqm. The public laneway, as noted, ends at the northern boundary of 96 The Esplanade. 13 2 Jibbon Street (lot 19) was not acquired. 2 Jibbon Street has an area of 661.38sqm. The eastern boundary of 2 Jibbon Street abuts the public laneway at the rear of the acquired land and the rear of 96 The Esplanade. 14 The Sutherland Shire Local Environmental Plan 2006 (the LEP 2006) was gazetted on 15 November 2006 (before the acquisition) but came into force on 29 November 2006 (after the acquisition). The acquired land was zoned 6(a) Public Recreation from 2001 under the Sutherland Shire Local Environmental Plan 2000 (the LEP 2000). The LEP 2006 zoned the acquired land Zone 13 – Public Open Space. 15 The open space zoning reflects the public purpose of the proposed acquisition of the land by the Council and, therefore, its effect on the value of the land must be disregarded (s 56(1)(a) of the Just Terms Compensation Act). 16 The public purpose of the acquisition was described as open space in the acquisition notice. A report to the Council on 20 February 2006 and associated resolution (rejecting a proposed rezoning of the acquired land from 6(a) to 2(e1) Residential) discloses further details of the public purpose. The report records that the zoning and proposed acquisition resulted from the Council's 2001 working party on land acquisitions. The land was identified for acquisition because its inclusion within Oak Park would allow the expansion of the existing view corridor from Oak Park to include south easterly views to Port Hacking Point, Jibbon Beach and the Royal National Park. This would result in views from Oak Park both to the north (Cape Solander) and to the south. The inclusion of the land within Oak Park would also improve the visual relationship between the park and the Oak Park Baths, located to the east of the land on the foreshore. The Oak Park Baths and The Esplanade walking path are both heritage items under the local planning controls. 17 2 Jibbon Street was zoned 2(e1) Residential under the LEP 2000. The LEP 2006 zoned 2 Jibbon Street Zone 2 – Environmental Housing (Scenic Quality). Planning Evidence 18 Mr Fletcher and Mr Nash, town planners, prepared individual reports and a joint report. 19 In their joint report Mr Fletcher and Mr Nash agreed that the LEP 2006 was certain and imminent by the acquisition date. Accordingly, the provisions of the LEP 2006 would have regulated the agreed residential zoning of the acquired land (disregarding the public purpose) at the acquisition date. 20 Mr Fletcher and Mr Nash agreed that the acquired land could be developed as individual lots or consolidated into a single lot or two lots. As individual lots each lot could be developed to a floor space ratio of 0.4:1 (that is, building areas of about 270 to 296 sqm given the slight differences in lot size) and would be subject to a landscaped area requirement of 45%. However, if consolidated into a single lot the provisions of the 2006 LEP would permit a floor space ratio of only 0.31:1 (or a building area of 350sqm) and require a landscaped area of 56%. If consolidated into two lots the 2006 LEP would permit a floor space ratio of 0.38:1 on each lot and require a landscaped area of 47%. 21 The planners agreed that in these circumstances "the likely development outcome …would be development on each of the three existing lots as it maximises the building floor area potential available". 22 They also agreed that inclusion of 2 Jibbon Street in any development would be an unlikely practical outcome as it would further reduce the floor space ratio to 0.28:1, generating additonal floor space of only 132.44 sqm. This may be compared to the floor space of about 265 sqm if 2 Jibbon Street were developed as an individual lot. 23 I accept this evidence of Mr Fletcher and Mr Nash. Valuation evidence - general 24 Mr Dyson and Mr Wood, valuers, prepared individual reports and a joint report, attended the view, and gave evidence during the hearing. 25 Mr Dyson is an experienced valuer who has practised extensively (and lives) in the Cronulla area. In his principal report Mr Dyson explained that the real estate market had peaked in 2003 and softened significantly in 2004 to 2006. He considered that, nevertheless, prices held along the eastern seaboard, with some evidence of increases in areas of limited supply such as oceanfront land. 26 Mr Dyson placed weight on the fact that the acquired land is elevated above The Esplanade to the south of Oak Park (which is a main turn-around point for the many walkers using The Esplanade). He thus described the acquired land as more private and superior to the land at the northern end of The Esplanade. 27 Mr Dyson relied on nine sales in the area (80 The Esplanade, 2A Beach Street or 91 The Esplanade, 84 The Esplanade, 88 The Esplanade, 29 Taloombi Street, 169 Ewos Parade, 60 – 64 Glaisher Parade, 46 Glaisher Parade, and 50 Glaisher Parade). From these sales Mr Dyson analysed a range between $2,837 and $6,178 per sqm. He adopted a range of $4,400 to $4,600 per sqm for the acquired land. Having regard to the individual lots acquired he attributed values of $3,350,000 to 94 The Esplanade, $3,000,000 to 95 The Esplanade, and $3,150,000 to 96 The Esplanade (that is, $9,500,000). 28 Mr Dyson, based on the Valuer-General's assessment of compensation as well as his own views, also considered that the acquired land should attract a 10% premium on account of the capacity for all three sites to be acquired in one line and developed with a single large prestigious home (that is, an additional $950,000 or $10,450,000 in total). 29 With respect to the adjoining land owned by the applicant at 2 Jibbon Street, Mr Dyson noted that the Council had a history of building commercial enterprises on public land. He observed that uses such as a restaurant and a gymnasium would be permissible on the acquired land which, if built, would block views from 2 Jibbon Street. Even if used as a park (as presently existing), Mr Dyson thought the privacy and amenity of 2 Jibbon Street would be adversely affected. He assessed the decrease in value to the applicant's retained land at 2 Jibbon Street as $500,000 on account of these potential adverse impacts (that is, from a value of $1,800,000 to $1,300,000). 30 On 28 November 2007, after the valuers prepared their joint report, Mr Dyson prepared a further report noting that vacant land on The Esplanade was in short supply and thus there would be great demand for the acquired land as individual lots. Mr Dyson said that the owner of one of the acquired lots would pay a premium for the other lot as a form of special value as follows: - (i) 94 The Esplanade – a premium of 10% or an additional $335,000 (a total of $3,685,000), (ii) 95 The Esplanade – a premium of 15% as the centre lot or an additional $450,000 (a total of $3,450,000), and (iii) 96 The Esplanade - a premium of 10% or an additional $315,000 (a total of $3,465,000). This would result in a total market value of $10,600,000. 31 Mr Wood relied on seven sales (80 The Esplanade, 2A Beach Street or 91 The Esplanade, 88 The Esplanade, 84 The Esplanade, 60 – 64 Glaisher Parade, 50 Glaisher Parade, and 4 Jibbon Street). He noted that unadjusted sale prices on The Esplanade ranged from $2.2 to $2.95 million (or $2 to $2.5 million adjusted). He described the highest and best use of the land as three individual dwelling sites to which he ascribed values as follows: - (i) 94 The Esplanade - $2,700,000, (ii) 95 The Esplanade - $2,400,000, and (iii) 96 The Esplanade - $2,500,000 (or a total of $7,600,000 for all three lots). 32 Mr Wood did not accept the possible sale in one line of the three lots and development of a single grand residence (incorporating 2 Jibbon Street which Mr Wood valued at $1.5 million or not) as reasonable. Mr Wood noted the town planner's evidence, and the lack of any improved sale in excess of $6.6 million in Burraneer/Woolooware with deep water frontage and $4.525 million in Cronulla, whereas the four aggregated lots had a value of $9.1 million. Further, buyers in one line usually discount the price to account for the larger risk involved. 33 Mr Wood also did not accept that the carrying out of the public purpose would reduce the value of 2 Jibbon Street. To the contrary, he considered the value of that land would be increased because the acquisition would give 2 Jibbon Street uninterrupted ocean views across parkland. This would increase the value of 2 Jibbon Street by $500,000. Accordingly, Mr Wood assessed just compensation in the amount of $7,100,000 plus disturbance. 34 In their joint report Mr Dyson and Mr Wood reiterated their principal views. Mr Dyson disagreed with Mr Wood's treatment of the comparable sales, particularly his adjustments for improvements (but agreed to an adjustment on that ground of $100,000 for 2A Beach Street or 91 The Esplanade). Mr Dyson noted two decisions of this Court (Croghan v Hawkesbury City Council (1998) 99 LGERA 375 and Maloney v Cowra Shire Council [2000] NSWLEC 33) that he considered supported his views about a premium being paid to consolidate the three lots into one on the basis that if adjoining owners pay a premium so would a person wishing to consolidate the acquired land. Mr Wood disagreed observing that both cases involved a council as the adjoining owner with a particular interest in acquiring the land not a proposed residential adjoining owner. Comparable sales 35 Both valuers relied on the sale of 80 The Esplanade. This site sold in February 2004 for $2.95 million. It has an area of just under 670sqm. 36 Mr Dyson described the site as a good north-facing site with panoramic views. He said the sale included an aged cottage. Only parts of the walls were retained (and the buyer told him the value of the retained walls was about the same as the demolition cost). He noted the site was level with The Esplanade at a busy part of the walking path. He analysed the sale as showing $4,443 per sqm. He concluded that this sale was the most comparable to the acquired land. 37 Mr Wood described 80 The Esplanade as by far the best site along The Esplanade purchased at the peak of the market. He considered it superior to the acquired land. Mr Wood allowed $100,000 for the retained part of the existing cottage and 10% for a decrease in the market to give an adjusted sale price of $2,565,000 (or $3,864 per sqm). 38 Mr Dyson and Mr Wood gave extensive evidence during the hearing about whether the market for land such as the acquired land had decreased since the agreed market peak in 2003. Both referred to various sales and resales (including sales at 46 and 50 Glaisher Parade which Mr Dyson said showed a 40% increase in value between 2002 and 2005). 46 and 50 Glaisher Parade are different properties with different attributes from each other and thus do not provide reliable evidence for any increase in value (also noting that Mr Dyson's principal evidence was only to the effect that there was no decrease in value). The evidence relied on by each valuer was equivocal. Although the sale of 80 The Esplanade occurred close to the agreed peak of the market in 2003 I do not consider that any specific adjustment should be made to the sale on account of time. 39 That having been said, I accept Mr Wood's evidence that 80 The Esplanade is the premium site along The Esplanade. It is located at a bend in the pathway and thus enjoys an even more prominent eastwards location than its neighbours. Although the acquired land enjoys splendid views, 80 The Esplanade offers the best possible panoramic views available from The Esplanade to both the north and south. I do not accept Mr Dyson's focus on privacy and the elevation of the acquired land as reasonable. The Esplanade is a very public and exposed location. To obtain views buyers have to be willing to develop houses with large glazed areas to the front overlooking The Esplanade. All the houses along the walkway exhibit a similar style of development designed to maximise views. The acquired land is elevated slightly above The Esplanade but not such as to provide any real privacy benefit, particularly when the overwhelming and obvious desire of landowners along this walkway to maximise views is taken into account. The acquired land adjoins Oak Park. The path extends beyond the land to the south to Port Hacking. The acquired land also overlooks the Oak Park Baths. The park and baths are both centres of activity. In these circumstances, the land is exposed to a high level of activity in common with the sales to the north. 40 Further, although the buyer told Mr Dyson that the value of the retained walls was about the same as the cost of demolition that does not reflect the value of being able to characterise the redevelopment as alterations and additions to an existing cottage, and the decreased setback obtained in consequence. The development application and consent for 80 The Esplanade after sale discloses that the buyer obtained a very significant benefit from the existing cottage. The extent of the benefit considered in this way rather than by reference to the value of the walls would not have been the same as the costs of the demolition. 41 The applicant criticised Mr Wood for making allowances for improvements as misconceived in principle. I disagree. Mr Wood considered the improvements in each case, their nature, and the use made of them by the buyer after sale to assist him in ascertaining their value. This was appropriate given that many of the comparable sales were of improved sites whereas the acquired land is vacant land. 42 Mr Wood's allowance of $100,000 for the improvements on 80 The Esplanade is reasonable in these circumstances and should be applied. Accordingly, the premium property along The Esplanade, sold at the peak of the market, and with the benefit of the existing cottage enabling redevelopment to proceed by alterations and additions, shows an adjusted sale price of $2,850,000. 43 Both valuers relied on the sale of 2A Beach Street or 91 The Esplanade. This site sold in March 2007 for $2,950,000 (about four months after the acquisition date, but neither valuer said the market had materially altered in that period) and October 2005 for $2,930,00. The site has an area of 724 sqm. Mr Dyson described the sale as including a house of unusual design, purpose built for nuns, and thus not the type of "trophy home" people would want along The Esplanade. In his principal report he made no allowance for the existing home. In the joint report he allowed $100,000 on account of the existing home. Mr Dyson also noted that the site sold in October 2005 after auction as a deceased estate with a short settlement period, and this might have affected the market and price. He described the location and shape of this site as inferior to the acquired land but with a similar outlook. 44 Mr Wood considered 2A Beach Street comparable to the acquired land. The existing home is an architect designed residence built in 1996. Mr Wood allowed $500,000 on account of the existing home giving an adjusted sale price of $2,430,000 in October 2005 and $2,450,000 in March 2007. 45 The approved plans for 2A Beach Street show a very substantial family home with a garage at the rear (accessed off Beach Street), lobby, family, living, and dining room on the ground floor, and four bedrooms on the first floor. The master bedroom and another of the bedrooms also have balconies. The view disclosed similar information. The house on 2A Beach Street is a large well-designed family home intended to take full advantage of the available views in a very desirable location along The Esplanade. I do not accept that an allowance of $100,000 comes close to reflecting the value of the existing home on 2A Beach Street. Mr Wood's allowance of $500,000 properly accounts for the value of the existing home, its substantial and well-designed character, and (unsurprising) retention by the buyers. I also do not accept that 2A Beach Street is materially inferior to the acquired land by reason of location or shape. The location is equal to that of the acquired land. The shape is capable of accommodating a large home with garage and easy access off Beach Street. The sale in October 2005 as a deceased estate should not be given weight as a discounting factor. The site sold and resold in quick succession for a consistent price. I accept Mr Wood's analysis of this site and note that both sales occurred much closer to the acquisition date than 80 The Esplanade. 46 Both valuers relied on the sale of 84 The Esplanade. This site sold in April/May 2007 for $2,475,000. The site has an area of 872 sqm with a long frontage to The Esplanade. 47 Mr Dyson described the existing building as an aged cottage divided into flats that are in basic to poor condition. He noted the building was "rumoured to be" of heritage significance but was not listed as a heritage item. Subsequently, he raised a possible concern that the building would be subject to State Environmental Planing Policy No 10 - Retention of Low-Cost Rental Accommodation (SEPP 10). He also noted that the site lacked depth given its broad frontage. 48 Mr Wood described the site as comparable to the acquired land but larger. He allowed $25,000 for demolition costs giving an adjusted price of $2,500,000. 49 I do not accept that this sale should be discounted because of the heritage rumour or the provisions of SEPP 10. The site is not a listed heritage item. According to Mr Dyson the selling agent had never heard of SEPP 10, and the issue was raised solely on the basis of Mr Dyson's knowledge. In these circumstances it is not reasonable to assume that either issue had any effect on the sale price. The site is large and comparable in terms of location and ambience to the acquired land. The shape is not such as to have prevented the development of the existing cottage (said by Mr Wood to have five bedrooms and four bathrooms with a garage). 50 Both valuers relied on the sale of 88 The Esplanade. This site sold in October 2006 (that is, very close to the acquisition date) for $2,200,000. The site is small, having an area of 594 sqm according to Mr Dyson (and slightly less according to Mr Wood). 51 Mr Dyson described the sale as including a basic 1960's double fronted cottage partly rendered and renovated after a sale in 2002. The cottage is now being rendered and renovated again indicating the poor quality of the earlier work. The site is east facing and closed in by other properties with a narrow rear access by right of way. Mr Dyson made no allowance for the cottage. 52 Mr Wood described the site as including a cottage that had been retained and renovated. He considered the site comparable to the subject and allowed $200,000 for the cottage (giving an adjusted sale price of $2,000,000). 53 I do not accept Mr Dyson's view that the sale price represented nothing more than the land value. The cottage (as the view disclosed) was relatively large and had been retained for the purpose of renovations. Mr Wood's allowance of $200,000 is reasonable. However, the site is smaller than the acquired lots with an inferior access arrangement compared to 94 The Esplanade (but not markedly inferior to 95 and 96 The Esplanade, albeit recognising that the rear laneway access to those properties is by public laneway not right of way). The outlook is also somewhat inferior to the acquired land. Nevertheless, I consider the sale a comparable one close to the sale date. 54 Both valuers relied on the sale of 60 – 64 Glaisher Parade. This site sold in February 2002 for $4,000,000. The site has an area of just over 2,470sqm, being three lots sold to a single buyer for the development of a large home. 55 Mr Dyson described this sale as including a large single storey 1960's residence including a pool in original condition straddling all three lots with a south westerly aspect and views to Port Hacking and Bundeena. He noted that although the buyer intended to build a palatial home on the site, approval could not be obtained from the Council (and an appeal to the Court was dismissed). He characterised the sale as showing evidence of land value showing a premium or at least no discount for the sale in one line. 56 Mr Wood described the same improvements, noting they were intended to be demolished. He adjusted the sale price by 25% for time (to give a sale price of $5,000,000), and considered the sale showed a substantial discount for the sale in one line. 57 The view disclosed that Glaisher Parade is markedly different from The Esplanade. It is a quiet street enjoying serene views over Port Hacking. The Esplanade continues past these properties, but at a level substantially below the sites. Thick vegetation also screens the sites from the walkway. The land slopes away from the street to the water, providing high levels of privacy. In contrast, The Esplanade is a high-energy and highly exposed environment. There is little privacy but outstanding access to the ocean, the walkway, the public reserve, and foreshore (including the Oak Park Baths, which would be a focus for public recreation activities). The two environments are not readily comparable. They are likely to attract a different class of buyer. 58 Both valuers relied on the sale of 50 Glaisher Parade. This site sold in October 2005 for $2,100,000. The site has an area of 714.5 sqm. 59 Mr Dyson described the sale as including a basic older home and aged pool, having an inferior location and aspect to the acquired land. He considered the sale price reflected the land value. 60 Mr Wood described the cottage as a four bedroom home with an in ground pool and two lock up garages, having views over Port Hacking to Bundeena and Malabar. He considered the site, with its southerly aspect, inferior to the acquired land. Mr Wood allowed $200,000 for the cottage. I accept Mr Wood's analysis of this sale, noting my general view that Glaisher Parade is a different environment from The Esplanade attracting a different type of buyer. 61 Mr Dyson relied on the sale of 46 Glaisher Parade in July 2002 for $1,505,000. The site has an area of 677 sqm. Mr Dyson used this sale to support his view that the sale in one line of the three lots at 60 – 64 Glaisher Parade showed a premium or at least no discount. 62 Mr Dyson relied on the sale of 29 Taloombi Street. This site sold in November 2006 for $4,300,000. The site has an area of 696 sqm. Mr Dyson described this sale as including a cottage (now substantially demolished). The site has good views to the west and south and slopes to a sandy beach at Gunnamatta Bay. Mr Dyson considered the site superior to the acquired land given the absolute water frontage but that it showed the strong market for waterfront properties and the upper limit for the acquired land. 63 I do not accept that the sale of 29 Taloombi Street provides a meaningful upper limit for the value of the acquired land. The sites along Taloombi Street enjoy absolute water frontage with access (at low tide) to a sandy beach. The environment along Taloombi Street is markedly different from The Esplanade. Taloombi Street is obviously superior to The Esplanade and would cater to a different segment of the market 64 Mr Dyson relied on the sale of 169 Ewos Parade in April 2006 for $1,100,000. This site has limited ocean views and was used by Mr Dyson to value 2 Jibbon Street. 65 Mr Wood relied on the sale of 4 Jibbon Street in June 2003 for $1,500,000 to support his valuation of 2 Jibbon Street before the acquisition. 66 Based on the discussion above it is apparent that the more recent sales along The Esplanade provide the most reliable evidence of the value of the acquired land. Generally I accept Mr Wood's analysis of the comparable sales, particularly his treatment of improvements and his conclusion that 80 The Esplanade is the premium property along the walkway. The value of the acquired lots should be assessed having regard to these matters. 67 There is one further observation about the comparable sales required. Consistent with the Council's submissions, I consider that any attempt to analyse values by reference to the comparable sales on a $ rate per sqm basis would be unreliable. The sales (particularly those along The Esplanade) are all house sites. All are capable of development for the purpose of a dwelling house. While features of the land (particularly access to views in this location as well as ease of development) may be related to site area and will influence the price, the comparable sales should be considered as house sites. At best the $ rate per sqm may be used to check the range. However, $ rate per sqm should not be applied directly to the acquired lots as the sole determinant of value. Highest and best use issue 68 Mr Dyson's opinion that the highest and best use of the acquired land would be for purchase in one line to accommodate a very large single dwelling does not accord with the type of development evident along The Esplanade or the evidence of the town planners. Contrary to the applicant's submissions, the planners were not merely describing the option yielding the most floor space. They were describing the most likely development outcomes for the acquired land, recognising the operation of the planning controls that would have applied to the land but for the acquisition. Those planning controls reflect the sensitive foreshore location of the acquired land (which is highly visible from the beach), the walkway and the Oak Park Baths (the latter of which are heritage items). In these circumstances the substantial penalties resulting from consolidating the lots would have been an obvious disincentive to a buyer with any such proposal in mind. Moreover, the sale at 60 – 64 Glaisher Parade provides little reliable evidence for the existence of a market for such development along The Esplanade. As noted, Glaisher Parade is a different environment. The sale was of sites already developed by a house straddling all three lots. The decisions relied on by Mr Dyson (Croghan and Maloney) do not support his conclusions about this issue. Nor particularly does the fact that the Valuer-General made such an allowance. The premium of 10% for sale in one line is highly speculative. I accept Mr Wood's analysis that there is no sound basis for any such premium in the circumstances described above. Adjoining owner/Flotilla issue 69 These claims on behalf of the applicant arose primarily from Mr Dyson's revision of his evidence in the letter of 28 November 2007. In one sense the increase in value due to the alleged adjoining owner influence is a variant of the premium of 10% for the potential for consolidation of three lots into one that I rejected above. As the Council submitted, adjoining owner influence involves a question of fact. The applicant did not rely on the Council as a possible adjoining owner, and Mr Dyson's evidence did not provide a cogent basis for inferring that any other person would have paid more for any one lot within the acquired land because they owned another lot. Insofar as the applicant's submissions relied on the applicant as the owner of 2 Jibbon Street, regard must be had to the town planners' opinions about the unlikelihood of any development outcome involving all four lots (particularly Mr Fletcher's opinions, as the planner retained by the applicant, about the difficulties that would involve). 70 Mr Dyson's opinions of a 10 to 15% premium being paid by the owner of one lot to obtain the benefit of control over the adjoining lot were speculative for the same reasons as set out above. They could not properly be described as special value given the statutory definition of that concept in s 57 of the Just Terms Compensation Act. 71 Nor is the applicant's position on this issue supported by the decision in Flotilla Nominees Pty Ltd v Western Australian Land Authority (2003) 129 LGERA 65. Flotilla (particularly at [39] to [40]) decided that the method by which an acquiring authority chooses to issue an acquisition notice (that is, a single notice for five lots or five separate notices on the facts in Flotilla) could not affect the compensation payable. Flotilla concerned an attempt to decrease the value of acquired land artificially because of a notional requirement to assume a single buyer of all land within the acquisition notice. Rejecting that submission involved the application of conventional principles. The question of a single or multiple buyers is one of fact to be resolved on the evidence (see Hazcorp Pty Limited v The Roads and Traffic Authority of New South Wales [2006] NSWLEC 661 at [14]). As the Council submitted, none of the valuation evidence in this case depresses the value of the acquired land by assuming a sale in one line to a single buyer. Flotilla does not support Mr Dyson's approach to premiums being paid for the acquired land or lots within it. Injurious affection (s 55(f)) issue 72 In addition to the valuers' evidence, the parties relied on a concept plan published by the Council on 4 December 2007 proposing the upgrading and extension of Oak Park. The concept plan shows the acquired land forming the extension to Oak Park including a proposed picnic facility. It also shows an indicative low shrub planting area adjoining 2 Jibbon Street (on the acquired land and the public laneway at the rear). It does not show the public laneway. The applicant submitted that the concept plan thus demonstrated an intention to close the laneway, depriving 2 Jibbon Street of the present means of access to the garage at the rear of that property (noting that 2 Jibbon Street has frontage directly to that road but the existing garage depends on the laneway). The Council submitted that, consistent with the evidence in the report of 20 February 2006, the concept plan showed an open grassed area designed to maximise the views available from the park. This would provide and preserve wonderful view opportunities for 2 Jibbon Street, and put paid to Mr Dyson's unfounded concern about commercial development on the park blocking views. 73 The parties agreed that s 55(f) of the Just Terms Compensation Act did not require the Court to disregard the true circumstances at the date of the hearing. Rather, the section required any increase or decrease in value to be determined as at the acquisition date, having regard to information available at the hearing. 74 It is clear that the object of the acquisition was to provide an extension to Oak Park to increase the sweep of available views to the south, and improve the relationship between the park and the Oak Park Baths. Mr Dyson's concern about large development blocking the available views from 2 Jibbon Street was not reasonable or well-founded. His observation that the applicant could have maintained the acquired land as vacant open space is not the point. By reason of the acquisition the applicant will obtain the market value of the acquired land assuming its full development potential as three house blocks. At the same time the carrying out of the public purpose will provide 2 Jibbon Street, being adjoining land retained by the applicant, with frontage to a public reserve to be maintained as an open area. 2 Jibbon Street will thus enjoy the views that any development on the acquired land would necessarily have removed in large part. Accordingly, if sold as an individual lot on the acquisition date 2 Jibbon Street would have a significantly enhanced value. The fact that the existing dwelling on 2 Jibbon Street is not orientated towards the view (presumably having been built assuming future development on the acquired land) does not undermine this conclusion. 75 Mr Dyson's concern about the park being heavily used (including for what he described as well controlled social functions), and thus impacting on the privacy of 2 Jibbon Street, was also not well-founded. His evidence did not support the applicant's submissions about lack of control of alcohol consumption in the park and associated impacts. The park is not so small as to require congregation by people outside 2 Jibbon Street. While people might seek shelter on windy days in a more secluded spot (as Mr Dyson said) this would not materially impact on the amenity of 2 Jibbon Street. Compared to the benefit offered by frontage to the public reserve and preservation of views from 2 Jibbon Street as a result, any such effects would be recognised by a buyer as trifling. 76 The Council submitted that it had no present intention of closing the public laneway and that roads are frequently included within parks. It is true that the concept plan shows low shrubs across the area of the laneway (without showing the laneway itself at all). The concept plan does not, however, describe any intention to close the laneway although it shows other existing features. The concept plan is an insufficient basis to infer any intention on the Council's part to close the laneway. The requirement to resolve any genuine doubt in the applicant's favour does not warrant any contrary conclusion on the facts. It must also be noted that 2 Jibbon Street has road frontage in any event. 77 In the circumstances described above I do not accept Mr Dyson's opinion that the proposal to carry out the public purpose will decrease the value of 2 Jibbon Street. Mr Dyson's conclusions about potential adverse impacts are not reasonable. He has not allowed for the obvious and very significant benefit to 2 Jibbon Street from the proposal, particularly in terms of views that would otherwise be largely blocked by development on the acquired land when the applicant will obtain compensation for that land (assuming its full development potential). 78 Mr Wood's opinions about the increased value of 2 Jibbon Street by reason of the carrying out of the public purpose were reasonable and properly reflect the very significant nature of the benefit that land will obtain. His allowance of $500,000 (or an added one third of the value of 2 Jibbon Street before the acquisition) should be accepted. Just compensation 79 I have taken into account the fact that the acquired land represents the only three vacant lots on The Esplanade. The market is prepared to buy developed land and demolish the existing dwelling (such as 80 The Esplanade) but the acquired land nevertheless represents a scarce commodity. Further, although I accept that 80 The Esplanade is the premium site along The Esplanade, one of the lots acquired (94 The Esplanade or lot 20) enjoys benefits not available to any of the comparable sales. 94 The Esplanade adjoins an unformed extension of Jibbon Street along most of its northern boundary. That part of the street functions as part of the park. As such 94 The Esplanade has the advantage of outstanding views (albeit not quite as spectacular as 80 The Esplanade given its location at the apex of The Esplanade) and no potential neighbour to its north. 80 I have considered whether Mr Wood's values adequately reflect all of these advantages and the requirement that genuine doubts be resolved in the applicant's favour. I am satisfied that Mr Wood's values do so. Mr Wood valued 94 The Esplanade (the best lot acquired) in the sum of $2,700,000. When the comparable sales (particularly those along The Esplanade) are considered, that value recognises the relative merits of 94 The Esplanade. For example, 2A Beach Street or 91 The Esplanade sold for $2,930,000 in October 2005 and $2,950,000 in March 2007 (including the four bedroom architect designed home that has been retained, giving an adjusted sale price of $2,450,000). This site is comparable to the acquired land (being slightly inferior to 94 The Esplanade overall). Mr Wood's value of $2,700,000 for 94 The Esplanade is well above the adjusted price of this sale. It is also below (but not too far below) the adjusted price of the sale at 80 The Esplanade (that is, $2,850,000). Finally, it is above the unadjusted and adjusted sale prices for the other sales along The Esplanade. Mr Wood's values for 95 and 96 The Esplanade of $2,400,000 and $2,500,000 also reasonably refect their different locations and qualities. 81 In contrast, Mr Dyson's values exceed the unadjusted prices for every sale along The Esplanade. For example, Mr Dyson's final analysis would result in 95 The Esplanade (the middle lot in the acquired land, inferior to both 94 and 96 The Esplanade) being ascribed a value nearly 17% greater than the unadjusted sale price for 2A Beach Street (91 the Esplanade) (that is, the sale including the four bedroom architect designed home). Mr Wood's criticisms of these conclusions in the joint report are reasonable. 82 The increased value of 2 Jibbon Street (an increase of $500,000) must also be taken into account. 83 Accordingly, on the whole of the evidence, I am satisfied that Mr Wood's analysis should be accepted. This results in compensation of $7.1 million (excluding disturbance) as provided for in Mr Wood's evidence. C. Conclusion and orders 84 Compensation in accordance with the Just Terms Compensation Act payable to the applicant is determined in the sum of $7,127,920. Statutory interest is also payable. 85 I direct the parties to file draft orders with my Associate reflecting these reasons within 14 days. The orders should include costs if agreed. If agreed orders are not filed within 14 days, then the matter will be listed for mention within the following 7 days. **************************** 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.