Supreme Court New South Wales Medium Neutral Citation: Transport for NSW v Registrar-General of New South Wales (and 10 related matters) [2013] NSWSC 1272 Hearing dates: 2 September 2013 Decision date: 02 September 2013 Jurisdiction: Equity Division Before: Ball J Decision: See paragraph 18 of this judgment Catchwords: REAL PROPERTY - compulsory resumption of substratum land - operation of the Community Land Development Act 1989 (NSW) ss 53, 57 - no issue of general principle Legislation Cited: Community Land Development Act 1989 (NSW) Community Land Management Act 1989 (NSW) Transport Administration Act 1988 (NSW) Category: Principal judgment Parties: Transport NSW (Plaintiff) Registrar-General of NSW (Defendant) Representation: Counsel: FP Hicks (Plaintiff) G Bartier - Solicitor (Defendant) Solicitors: Clayton Utz (Plaintiff) Department of Finance & Services (Land & Property Information) (Defendant) File Number(s): Publication restriction: Nil Judgment - EX TEMPORE 1The plaintiff, Transport for NSW (TfNSW) is responsible for the construction of the northwest rail link, a large portion of which will consist of twin underground railway tunnels between Epping and Bella Vista in Sydney's northwest. For the purpose of constructing the tunnels, TfNSW has acquired compulsorily substratum land pursuant to its powers under cl 11 of Schedule 1 of the Transport Administration Act 1988 (NSW). 2Part 6 of the Community Land Development Act 1989 (NSW) (the CLD Act) regulates the compulsory resumption of land which forms part of a community scheme or neighbourhood scheme. Both types of scheme involve the subdivision of scheme land into privately owned lots (called either "development lots" or "neighbourhood lots") and common property (called "association property") which is shared by lot owners. Development lots in community schemes may be further subdivided into strata schemes or neighbourhood schemes, which themselves consist of privately owned lots and common property. 3The relative rights and liabilities of lot owners are determined by a schedule of unit entitlements for the scheme, which allocates a number of units to each privately owned lot. Units are generally allocated according to the relative value of the lots. The number of units allocated to a lot owner determines (Community Land Management Act 1989 (NSW) s 53): * The value of the lot owner's vote on a poll at a meeting of the relevant association; * The lot owner's share of the levy levied by the association; * The interest of the lot owner in the association property; * The interest of the lot owner in any surplus funds distributed by the association; or * The interest of the lot owner in shared property on termination of the scheme. 4Each scheme is managed by a community or neighbourhood association. The association property in a scheme is vested in the relevant association, which holds it as agent for the members of the association as tenants in common in the proportions equal to their relative proportions of the total unit entitlements in the scheme: CLD Act ss 31, 32. The association has as its members the lot owners of the relevant scheme. 5Sections 53(2) and 57(2) of the CLD Act require a resuming authority of part of one or more lots in a scheme, before publication of a notice of resumption, to apply to this court for orders dealing with the consequences of the proposed resumption and, in particular, for orders adjusting the rights between lot owners having regard to the effect of the resumption. 6TfNSW has resumed substratum land below lots in 11 schemes regulated by the CLD Act. Before resuming that land, it commenced a proceeding in respect of each scheme in accordance with ss 53(2) and 57(2) of the CLD Act. The issue before the court is what orders, if any, should be made under ss 53 and 57 in respect of each of those schemes. TfNSW submits that orders should be made to the effect that no adjustment is necessary. 7Five of the affected schemes consist of modern residential developments. The other six affected schemes consist of commercial or industrial developments which form part of the Norwest Business Park. 8Section 62 of the CLD Act requires notice of the proceedings to be served on various people, including the relevant association, each registered proprietor and each registered mortgagee, chargee and covenant chargee of a lot as well as the Registrar-General, except to the extent that the court otherwise directs. The section also requires notice of the proceedings to be served on such other persons as the court directs. 9Directions were given by Bergin CJ in Eq on 31 May 2013 in relation to the service of each of the proceedings dispensing with the requirement to serve the proceedings on unaffected lot owners and on certain mortgagees, chargees and covenant chargees of lots used for residential purposes. I am satisfied that, having regard to those directions, the proceedings have been served in accordance with s 62 of the CLD Act. None of the persons on whom the proceedings have been served, save for the Registrar-General, has elected to appear. The Registrar-General was joined as a defendant in the proceedings and consents to the orders sought by TfNSW. 10Although the CLD Act does not set out the criteria the court should have regard to in making orders under ss 53 and 57 of the CLD Act, there can be little doubt that the question for the court is whether the resumption has altered the relative value of the affected lots compared to other lots in the scheme. The original unit entitlement of each lot owner was determined by reference to relative value of the lots that comprised each scheme. The question in those circumstances must be whether those unit entitlements need to be adjusted having regard to any change in value of the affected lots. Other rights may have been conferred on lot owners by other documents regulating the relevant scheme including the management statement of the relevant scheme and the by-laws of a strata scheme. However, it is not suggested in these proceedings that any relevant rights of that sort are affected by the resumption. 11TfNSW has filed an expert report of Mr Trevor Good who is a registered valuer and Director, Valuations and Advisory (NSW) Infrastructure, at Jones Lang LaSalle. I am satisfied that Mr Good has the appropriate qualifications and experience to express an opinion on the effect of the resumption on the value of the affected lots. 12The depth of the resumed land and proposed tunnels vary. In the case of the commercial and industrial developments, the minimum depth of the resumed land varies between 3.7 metres and 23.1 metres and the top of the proposed tunnels varies between 8.3 metres and 31.4 metres. In the case of residential lots, the minimum depth of the resumed land varies between 6.3 metres and 35 metres and the top of the proposed tunnels varies between 12.3 metres and 45.5 metres. 13In his report, Mr Good concludes that the resumption will not have any effect on the value of the affected lots. He reaches that conclusion for the several reasons. 14First, the majority of the lots that are affected by the resumption are adjacent to existing main road boundaries. The only real exception are lots which form part of a residential development at Columbia Court, Baulkham Hills. However, the depth of the tunnel at that point of the route is between 31.4 to 32.7 metres. 15Second, the technical report on noise and vibration prepared in connection with the proposed tunnels predicts that the highest noise level along the tunnel sections would be 30dB, which is well below the accepted maximum, and at most locations the noise levels would be much lower. 16Third, the residential buildings are all modern and have economic lives well in excess of 20 years. The commercial and industrial developments were constructed between 1996 and 2006 and have economic lives within the range of 20 to 30 years. Consequently, the prospects of any sites being developed in the immediate future are remote. In the case of the residential developments, any redevelopment would be unlikely to include significant excavation and, in the case of the commercial and industrial developments, the development code for the Norwest Business Park precludes any significant excavation. Consequently, the resumption will not have any effect on the development value of any affected lots. 17There is no reason not to accept the opinion of Mr Good. As I have said, none of the affected associations or lot owners sought to appear, although some of the affected associations were legally represented. The Registrar-General consents to the orders sought. 18Having regard to those matters, in my opinion, it is appropriate to make the orders sought by TfNSW in each proceeding. Those orders are as follows: 2012/391631 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270066 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1, 27, 28, 29, 34, 35, 36, 37, 38, 39, 47, 48, 82, 83, 84, 85, 86 and 87 in DP 270066 within lot 184 DP 1180966 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270066 as a consequence of the Resumption. (3)Lots 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155 and 156 in DP 270066 shall be lots in the community scheme DP 270066. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391632 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for neighbourhood scheme DP 285097 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 15, 16 and 17 in DP 285097 within lot 91 DP 1180950 (the Resumption). (2)There is no amendment to the neighbourhood management statement or development contract for neighbourhood scheme DP 285097 as a consequence of the Resumption. (3)Lots 33, 34 and 35 in DP 285097 shall be lots in the neighbourhood scheme DP 285097. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391633 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270106 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1 and 7 in DP 270106, CP/SP 54644 (formerly lot 4 in DP 270106) and CP/SP 56844 (formerly lot 6 in DP 270106) within lot 185 DP 1180966 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270106, by-laws for strata scheme SP 54644 or by-laws for strata scheme SP 56844 as a consequence of the Resumption. (3)Lots 9, 10 and 11 in DP 270106 shall be lots in the community scheme DP 270106. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391634 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270163 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1, 4, 10 and 9 in DP 270163 and CP/SP 65212 (formerly lot 13 DP 270163) within lot 165 DP 1180965 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270163 or by-laws for strata scheme SP 65212 as a consequence of the Resumption. (3)Lots 17, 16, 15 and 14 in DP 270163 shall be lots in the community scheme DP 270163. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391635 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270175 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1 and 7 in DP 270175 within lot 164 DP 1180965 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270175 as a consequence of the Resumption. (3)Lot 11 in DP 270175 shall be a lot in the community scheme DP 270175. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391636 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270324 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1 and 11 in DP 270324 within lot 192 DP 1180967 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270324 as a consequence of the Resumption. (3)Lot 14 in DP 270324 shall be a lot in the community scheme DP 270324. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391637 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for neighbourhood scheme DP 286254 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1, 6 and 7 in DP 286254 within lot 71 DP 1180970 (the Resumption). (2)There is no amendment to the neighbourhood management statement or development contract for neighbourhood scheme DP 286254 as a consequence of the Resumption. (3)Lots 8 and 9 in DP 286254 shall be lots in the neighbourhood scheme DP 286254. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391638 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270512 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1 and 2 in DP 270512 and CP/SP 79869 (formerly lot 3 DP 270512) within lot 162 DP 1180965 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270512 or by-laws for strata scheme SP 79869 as a consequence of the Resumption. (3)Lots 4 and 5 in DP 270512 shall be lots in the community scheme DP 270512. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391639 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270240 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43 and 44 in DP 270240 within lots 182 and 183 DP 1180966 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270240 as a consequence of the Resumption. (3)Lots 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121 and 122 in DP 270240 shall be lots in the community scheme DP 270240. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391640 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for neighbourhood scheme DP 285531 or community scheme DP 270086 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 2 and 8 in DP 285531 within lots 93 and 94 DP 1180950 (the Resumption). (2)There is no amendment to the neighbourhood management statement or development contract for neighbourhood scheme DP 285531 as a consequence of the Resumption. (3)There is no amendment to the community management statement for community scheme DP 270086 as a consequence of the Resumption. (4)Lots 12 and 13 in DP 285531 shall be lots in the neighbourhood scheme DP 285531. (5)Lots 5, 6 and 7 in DP 270086 shall be lots in the community scheme DP 270086 (6)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. 2012/391641 (1)There is no amendment to the schedule of unit entitlements (other than re-numbering of lots) for community scheme DP 270392 as a consequence of the resumption of the sub-surface stratum land formerly part of lots 1 and 8 in DP 270392, CP/SP 72801 (formerly lot 2 DP 270392), CP/SP 77109 (formerly lot 4 DP 270392) and CP/SP 81347 (formerly lot 7 DP 270392) within lot 193 DP 1180967 (the Resumption). (2)There is no amendment to the community management statement for community scheme DP 270392, by-laws for strata scheme SP 72801, by-laws for strata scheme SP 77109, or by-laws for strata scheme SP 81347 as a consequence of the Resumption. (3)Lots 9, 10, 11 and 12 in DP 270392 shall be lots in the community scheme DP 270392. (4)The Plaintiff is to pay the costs of the Defendant as agreed or assessed. ********** 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. Decision last updated: 10 September 2013