Land and Environment Court New South Wales Medium Neutral Citation: Hoy v Coffs Harbour City Council [2015] NSWLEC 128 Hearing dates: 6, 7, 8, 25 May 2015 Decision date: 14 August 2015 Jurisdiction: Class 3 Before: Pain J Decision: 1. The Appellant's appeal under s 56A of the Land and Environment Court Act 1979 is dismissed. 2. The Council's cross-claim is dismissed. 3. Costs reserved. Catchwords: APPEAL – appeal under s 56A of Land and Environment Court Act 1979 in relation to valuation of land under the Land Acquisition (Just Terms Compensation) Act 1991 – scope of such appeals in compulsory acquisition matters – failure of summons to identify questions of law – s 26 of the Land Acquisition (Just Terms Compensation) Act 1991 confers discretion to award disturbance or solatium in owner initiated hardship land acquisition Legislation Cited: Corporations Act 2001 (Cth) s 411 Interpretation Act 1987 (NSW) s 34(2)(f) Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ss 21, 22, 23, 24, 25, 26, 55, 56, 59, 60, 66 Land and Environment Court Act 1979 (NSW) s 56A Cases Cited: Attard v Transport for NSW [2014] NSWLEC 44; (2014) 205 LGERA 396 Ballantyne v WorkCover Authority of NSW [2007] NSWCA 239 Beale v Government Insurance Office of New South Wales [1997] 48 NSWLR 430 Bezzina Developers Pty Ltd v Leichhardt Municipal Council [2006] NSWLEC 175; (2006) 146 LGERA 249 Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 Chircorp v Transport for NSW [2014] NSWLEC 63 Comcare v Forbutt [2000] FCA 837 Edyp v Brazbuild Pty Ltd [2011] NSWCA 218 El Boustani v The Minister administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33; (2014) 199 LGERA 198 Goodwin v Commissioner of Police [2012] NSWCA 379 Goodman v Roads and Traffic Authority [2000] NSWLEC 185 Hill v Green [1999] NSWCA 477; (1999) 48 NSWLR 161 Hostworks Group Limited ACN 008 010 820, in the matter of Hostworks Group Limited ACN 008 010 820 (No 2) [2008] FCA 248 Hoskins v Waverley Council [1999] NSWLEC 236 Hoy v Coffs Harbour City Council [2014] NSWLEC 1217 ISPT Pty Ltd v Valuer General [2009] NSWCA 31 (2009) 165 LGERA 25 Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390 Maloney v Minister Administering the Environmental Planning and Assessment Act 1979 [2011] NSWLEC 121; (2011) 184 LGERA 386 Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111 McDonald v Roads and Traffic Authority of NSW [2009] NSWLEC 105; (2009) 169 LGERA 352 Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 O' Donnell v Sutherland Shire Council [2011] NSWLEC 184 Prasad v The Minister Administering the Environmental Planning and Assessment Act 1979 [2010] NSWLEC 193 Redbro Investments Pty Ltd v Ceva Logistics (Australia) Pty Ltd [2015] NSWCA 73 RTA v Peak [2007] NSWCA 66 Segal v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Southon & Ors v Gordon Plath on behalf of the Department of Environment and Climate Change [2010] NSWCCA 292; (2010) 181 LGERA 352 Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298 Sydney Water Corporation v Marrickville Council [2014] NSWCA 438 Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195 The Nominal Defendant v Kostic [2007] NSWCA 14 Valuer-General v Fivex Pty Ltd [2015] NSWCA 53; (2015) 206 LGERA 450 Warkworth Mining Ltd v Bulga Mulbrodale Progress Association Inc [2014] NSWCA 105; (2014) 86 NSWLR 527 Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156 Category: Principal judgment Parties: Iris May Hoy (Appellant) Coffs Harbour City Council (Respondent) Representation: Counsel: Mr P Tomasetti SC with Mr B Langler (Appellant) Mr I Hemmings SC with Mr M Seymour (Respondent) Solicitors: MBT Lawyers (Appellant) HWL Ebsworth (Respondent) File Number(s): 30941 of 2014 Decision under appeal Jurisdiction: Class 3 Citation: [2014] NSWLEC 1217 Date of Decision: 24 October 2014 Before: Brown C and Parker AC File Number(s): 30426 of 2013 Judgment 1. Two Commissioners of the Court determined compensation was payable to Ms Hoy (the Appellant) in the amount of $2,034,957.39 for the compulsory acquisition of Lot 9 DP 1140702 (the land) by the Respondent Coffs Harbour City Council (the Council) in Hoy v Coffs Harbour City Council [2014] NSWLEC 1217. The Appellant appeals the Commissioners' decision under s 56A of the Land and Environment Court Act 1979 (NSW) (the Court Act). Such an appeal is limited to a question or questions of law. The compulsory acquisition was effected pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the Just Terms Act). 2. Two areas of the resumed land required valuation by the Court, one an area able to be subdivided and the other a residue rural residential lot. 3. The Appellant tendered a court book comprising seven volumes that contained the written submissions, transcripts and exhibits from the proceedings before the Commissioners. Valuation expert evidence included Mr Paris' expert report dated 2 November 2012 and a joint report by Mr Davis and Mr Paris dated 9 January 2014. Town planning evidence included the expert reports of Mr Ryan dated August 2013 and Mr Connelly dated 16 August 2013, and their joint report dated 23 September 2013. Mr Slattery and Mr Barnes gave engineering evidence (see CB vol 4, tab 15-17, CB vol 6, tab 28-29). The Commissioners' decision 1. It is useful to summarise and extract parts of the lengthy judgment. 10 The Land is generally cleared but has the following constraints for developmental purposes according to the Applicant's town planner, Mr Connelly: ∙ flood prone land, ∙ tertiary koala habitat, ∙ sedgelands in the north of the site, ∙ State forest property to the north of the site, ∙ bushfire Asset Protection Zone setbacks, ∙ sight distance constraints on part of Old Bucca Road, ∙ contamination of a small part of the site, and ∙ acoustic treatment requirements for land near the highway frontage. [The evidence of the parties' town planners was set out at [23]-[37]] [Findings on the lot yield were detailed at [38]-[49], concluding at [50]-[51]] 50 While there can be no doubt that the strategic planning documents referred to by Mr Connelly are extremely valuable for the long-term planning of the area, we do not accept that they should be given any significant weight in the determination of the subject development application, particularly when these documents are, in general, used to identify matters that should be reflected in the more detailed planning of the area. They are not documents that are drafted for the purpose of considering a single development application. The documents essentially guide the planning process and, more specifically, the preparation of LEP's and DCP's. To give the strategic planning document the weight suggested by the Mr Connelly, in our view, is overstating their role in the consideration of a development application. 51 For these reasons, we are of the view that a prospective purchaser would rely on the density available through the calculations set out in DCP 2004. In strictly applying DCP 2004, there was little difference between the lot yield calculated by Mr Ryan or Mr Connelly. The lot yield prescribed, based on the "developable area" of approximately 11.5 ha is between 92 and 106 lots. While there is some merit in the comments of Mr Ryan that the maximum yield of 106 lots should not be viewed as being "as of right" and would be subject to detailed site assessment to confirm the capability of the site, we accept that, to adopt a conservative approach, 106 lots is the appropriate lot yield for the Land. The rural residential lot / Biobanking 52 The residual lot is generally that part of the Land identified on Map 4 of DCP 2004 as having constraints. Mr Connelly describes that part of the Land as a rural residential lot with a dwelling house entitlement and as the BioBanking lot, given the nature of the land and its mainly 1:100 year flood inundation characteristics. Mr Connelly explains that BioBanking is a market-based scheme that provides a streamlined biodiversity assessment process for development, a rigorous and credible offsetting scheme as well as an opportunity for rural landowners to generate income by managing land for conservation. 53 Mr Ryan referred to the requirements under Natural Environment Strategy in DCP 2004 where it states: All areas to be protected are to be dedicated to Council as development occurs. 54 While not disputing that the residue could be used as a rural residential lot with a dwelling house entitlement, Mr Ryan maintained that, given the identified constraints and the absence of any studies to address those constraints, the question whether it could be used, as suggested by Mr Connelly, is not able to be answered at the time of the hearing. 55 On the matter of the DCP requirement that constrained lands are to be dedicated to council, Mr Hemmings explained in his submissions that the council could not require the constrained area to be dedicated to the council free of charge as this would be contrary to s 94 of the EPA Act. There would be no condition of consent requiring this in any consent. However, if the prospective purchaser viewed the residue land as an unacceptable burden in the development of the Land, then it could be dedicated to the council at no cost. 56 Mr Hemmings identifies four possible scenarios for the residual lot: 1. council could acquire the land, 2. the developer could dedicate the land free of cost, 3. the land could be included as part of a large residue lot, and 4. the developer could "get stuck" with the land. 57 While the particular scenario likely to be chosen by a prospective purchaser is difficult to determine, we prefer scenario 3 for a number of reasons. First, the evidence of Mr Ryan and Mr Connelly that the potential does exist for the residue lot to be used as a rural residential lot with a dwelling house entitlement. Mr Ryan's support was however conditional on the completion of a number of studies to address the constraints identified in Map 4 of DCP 2004. Second, this approach is consistent with the "just compensation override" described by Biscoe J in Al Amanah College Inc v Minister for Education [2011] NSWLEC 254 at [10]. 58 In coming to this conclusion, we find that the constraints identified in Map 4 of DCP 2004 could severely restrict this potential or at worst, deny the opportunity for any development. To realise any potential of the residual lot, the preparation of a number of studies would be necessary and there is no certainty that the residual lot is capable of gaining approval for a rural residential lot with a dwelling house entitlement. In accepting that the residue land must have some value, we find that the amount should only be a nominal amount given the uncertainty of any approval... What is the market value of a lot? [Principles at [59]-[94]] The valuation approach [At [95]-[99]] 98 While both valuers undertook a hypothetical development valuation approach as a secondary or support approach to their valuations, this was not addressed in any detail at the hearing, which focused on their adoption of the comparable sales approach to valuation. Accordingly, we do not propose to consider the evidence concerning the hypothetical development valuation approach further. The valuation evidence [At [100]-[106]] Analysis of potentially comparable sales [At [107]-[112]] Adjustment of potentially comparable sales [At [113]-[120]] Application of potentially comparable sales [At [121]-[125]] RTA acquisition of part of the Hoy property 126 The Applicant contends that the acquisition by the RTA of a strip of land adjacent the Land and fronting the Pacific Highway in 2011 for $202,000, purported to represent 5 blocks at $40,400 per block, provides comparable sales evidence of relevance to the valuation of the Land (Woollams v The Minister (1957) 75 WN (NSW) 103; McDonald v Roads and Traffic Authority of NSW [2009] NSWLEC 105). 127 The Respondent contends that this transaction should not be relied upon as it occurred in the shadow of compulsory acquisition (Chircop at [48]), was not a sale on the open market, reflected a 6A Open Space zoning and reflected a significant component for injurious affection, approximating $187,000. 128 While the sale may be considered to be of relevance, it should be treated with caution (Koutsouras v State Rail Authority of NSW, unreported, NSWCA, 29 November 1991) and we consider that the shadow of compulsory acquisition and ambiguity concerning the composition of the $202,000 transaction price mean that little weight should be attached to the transaction. Council s 94 contributions plan as evidence of market value 129 Mr Tomasetti submits that the amount allowed for the Land in the Council's Section 94 Contributions Plan of $5.6 m is some evidence of its market value as it must have been calculated on a rational basis and importantly, supports the valuation of Mr Paris. Mr Tomasetti accepts that the s 94 plan amount is not strong or compelling evidence but it is evidence of value and should be considered. Mr Hemmings disagrees and submits that the figures used in contributions plans are for budgetary purposes to calculate the amount of contributions and are not an assessment of market value in accordance with the Acquisition Act as the cost could reflect costs other than land and is an estimate as at an unknown date in the future. 130 Given the absence of evidence concerning the exact basis upon which the amount is included in the contributions plan was determined, despite attempts to gather the council records during the hearing, we are not prepared to accept the figure for the purposes of even providing support for a market value assessment prepared by the expert valuers, in this case. Without any evidence of how the amount in the contribution plan was formulated, it cannot provide any assistance in determining the market value of the Land in accordance with the Acquisition Act. 131 Mr Tomasetti also submits that without the need to carry out the public purpose the s 94 contribution for the Land would be reduced by $4,575 per lot. We accept Mr Hemmings response that the contribution (or a similar contribution) would still be required as it is necessary to provide district sporting fields for the future population, even if it is in another location in the Moonee precinct. 132 Having determined the value of the Land to be substantially lower than that sought by the applicant and reflected in the CP, we find that it is appropriate that the s 94 land acquisition component for the District Open Space in the CP should be adjusted downward to reflect such lower value of the Land. The effect of the reduced contribution is to increase the market value of the Land as it would be a lesser cost to any prospective purchaser. 133 Doing the best we can, and using the formula in the CP for calculating District Open Space facilities/services (p 14) and substituting our assessment of value (which we accept is the outcome of an iterative process) for the $5,638,211 shown in the line item as "Land acquisition and interest on borrowings", a contribution of $668.25 per person is realised. Using the occupancy rate of 2.8 persons for "Large dwellings" in Table 3, the contribution is 2.8 x $668.25, giving $1871 per lot for a large dwelling (rather than $4575 per lot). The total contribution per lot is therefore $35,664 (rather than $38,368). 134 We acknowledge that the line item states "Land acquisition and interest on borrowings", however as we have no evidence on the amount of interest on borrowing, we have adjusted the contribution on the raw acquisition figures. Consideration of valuation evidence Accumulation of potentially comparable sales [At [135]-[143]] 143 For the residue lot, we note that analysis of the comparable sales indicates an incredibly wide range of $61,583 per ha to $300,797 per ha which we consider to be of little assistance. Adjustment of potentially comparable sales [At [144]-[168]] 168 Concerning the residue lot, while the evidence tendered was insufficient to facilitate effective adjustment of the analysed rates per hectare, our conclusion that the residue land could be included as part of a large constrained lot of nominal value only renders such adjustment unnecessary. Application of potentially comparable sales [At [169]-[173]] What is the market value of the land? [At [174]] 174 We have found the lot yield for the unconstrained land to be 106 lots and the value per lot to be $18,000. Allowing a nominal value for the residual land, we assess the market value of the Land to be $1,980,000. Disturbance [At [175]-[196]] Solatium [At [197]] Conclusion [At [198]] 198 Based on our determination of market value, disturbance and solatium, we determine the compensation to be paid to the Applicant is as follows: Market value (s 55(a)) $1,980,000.00 Disturbance (s 59(c) and (f)) $29,937.39 Solatium (s 55(c)) $25,020.00 $2,034,957.39 1. I was informed that after delivery of the judgment the Council sought clarification of the amount of compensation for market value. The Commissioners informed the parties the amount of compensation had been rounded up resulting in an allowance of $72,000 for nominal value for the residue lot. Land Acquisition (Just Terms Compensation) Act 1991 1. Relevant sections of Pt 3 Compensation for acquisition of land Div 4 of the Just Terms Act provide: 55 Relevant matters to be considered in determining amount of compensation 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 Market value (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. 59 Loss attributable to disturbance In this Act: loss attributable to disturbance of land means any of the following: (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land, 60 Solatium (1) In this Act: solatium means compensation to a person for non-financial disadvantage resulting from the necessity of the person to relocate his or her principal place of residence as a result of the acquisition. … (4) Compensation is payable in respect of solatium if the whole of the land is acquired or if any part of the land on which the residence is situated is acquired. Applicable principles in s 56A appeals in land valuation case 1. It is important to state at the outset the principles which apply in appeals under s 56A of the Court Act in matters of this kind. Principles which have been well recognised as applying to s 56A appeals are correctly stated in the Council's submissions and these were drawn on and further developed in this and the following paragraphs. An appeal must identify a question of law explicitly or implicitly decided at first instance: Warkworth Mining Ltd v Bulga Mulbrodale Progress Association Inc [2014] NSWCA 105; (2014) 86 NSWLR 527 at [4]. That question must also be sufficiently material that a wrong answer vitiates the decision: Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298 at [29], [133]-[136] and [191]. The question must also arise from a contest or dispute between the parties: Edyp v Brazbuild Pty Ltd [2011] NSWCA 218 at [147], [160] per Basten JA. The merits of a commissioner's decision cannot be the subject of a s 56A appeal. 2. An appeal under s 56A is "on a question of law" not limited, however, to "an error of law": ISPT Pty Ltd v Valuer General [2009] NSWCA 31 (2009) 165 LGERA 25 at [3] per Allsop P. In the absence of any statutory indication of the weight to be given to various considerations, an allegation that insufficient weight was given to particular evidence is generally insufficient as a ground of appeal: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 41, Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195 at [57], Hoskins v Waverley Council [1999] NSWLEC 236 at [11]-[12]. 3. A commissioner or judge of the Court is required to address relevant material issues by exposing his or her reasoning: Segal v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 at [43] per Tobias JA, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 259 per Kirby P, at 279 per McHugh JA. The Court at first instance is not required to "deal with every argument raised and every possibility that could be adverted to": Comcare v Forbutt [2000] FCA 837 at [58] per Heerey J cited by Tobias JA in Segal at [71]. 4. The judgment should be read on the basis that the Commissioners and the parties were present and understood the issues presented by them: see by analogy Southon & Ors v Gordon Plath on behalf of the Department of Environment and Climate Change [2010] NSWCCA 292; (2010) 181 LGERA 352 at [79]. 5. An approach to finding error that is nitpicking with an eye to identifying error is not permissible, as identified in numerous authorities commencing from Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 at 368. Very importantly, a judgment must be considered as a whole, not selecting parts of the judgment and reading them out of context: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 291, O' Donnell v Sutherland Shire Council [2011] NSWLEC 184 at [23]. 6. The function of the Court in valuation appeals is to hear and dispose of a claim for compensation pursuant to s 66(2) of the Just Terms Act. As the Council submitted, there is no statutory identification of mandatory relevant or irrelevant considerations in the Just Terms Act. The range of matters to be accounted for therefore depends on the subject matter, object and purpose of the legislation: Peko-Wallsend at 39-40. 7. Commissioners are generally experienced in land valuation matters and are expected to apply their expertise. They are not bound to adopt the views of any of the experts before the Court. With a broad evaluative judgment required in the determination of compensation including market value conferred on the Court at first instance, the allocation of determinative weight to a particular provision or to particular evidence does not result in a decision on a question of law, confirmed most recently in the Court of Appeal in Sydney Water Corporation v Marrickville Council [2014] NSWCA 438. It is appropriate to set out parts of that judgment as it applies to parts of the summons. Leeming JA (Basten and Emmett JJA concurring) stated at [28], [30]-[34]: 28 That there is no question of law in either the appeal or the cross-appeal is readily apparent. An error of valuation principle may - but need not be - an error of law: Maurici v Chief Commissioner of State Revenue [2003] HCA 8; 212 CLR 111 at [8]. However, the fact that there was agreement on the applicable methodology to the extent reproduced at [8] above is a powerful indication that no error of law was involved in the present case. Morling J said as much in Nock v Minister for Capital Territory (1982) 48 LGRA 293 at 296: "If it be accepted that no error of law was made by Mr Gowing in adopting his method of valuation, it is difficult to see how it can be argued that the tribunal erred in law in giving weight to a valuation made in accordance with it." … 30 Whether or not a sale is comparable is a matter of degree and judgment. It may be accepted that there can be error of law if the finding that a sale is or is not comparable was not reasonably possible or open on the evidence, or in making an adjustment which is not reasonably possible or open on the evidence. A line of consistent authority, collected in this Court's reasons in ISPT Pty Ltd v Valuer General [2009] NSWCA 31; 165 LGERA 25 at [23]-[25] supports those propositions. 31 The position in respect of adjustments to comparable sales is the same. Almost every "comparable" sale requires adjustment. Hope JA said in Leichhardt Municipal Council v Seatainer Terminals Ltd (1981) 48 LGRA 409 at 434: "The need to make adjustments to values deduced from sales in order to arrive at the true valuation of the land to be valued does not preclude the court which has the task of valuing the land from relying upon the sales as comparable in the relevant sense, nor from the making by the court or by valuers of adjustments which may be nothing more than the best guess that can be made." 32 It is plain that whether or not an adjustment to a comparable sale should be made, and if so by what amount, is likewise a matter of degree and judgment. 33 Both in identifying what is comparable, and in making appropriate adjustments, the position was described by Wells J in Brewarrana Pty Ltd v Commissioner of Highways (1973) 32 LGRA 170 at 180: "... there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not. It is in my view, all a matter of degree: ... Just where the line is to be drawn is, it seems to me, the very sort of question that is fit for the expert valuer to determine; the assessment of the risks of adjustment is peculiarly within his sphere of skill." 34 One valuer considered the sale of an easement over the SACL land to provide some evidence of value, another did not. The judge determined that it did, but only after making significant adjustments to it, and then as a minor (40%) contributor. No doubt the amount of the adjustments, and the 40% weighting, are contestable. But irrespective of that, and irrespective of whether there is any factual error in the approach, there is no error of law in the approach taken. 1. In ISPT which both parties referred as supporting their arguments Allsopp P stated at [5]: … In a jurisdiction where the Court is undertaking the task of valuation (being a task of evaluation and application of experience and, to a degree, impression, of the kind discussed by the Privy Council in Secretary of State for Foreign Affairs v Charlesworth Pilling & Co [1901] AC 373 at 391), the choice by the judicial valuer of relevant material to assist him or her in reaching a conclusion does not necessarily carry with it any legal question. If the judicial valuer rejects, as legally irrelevant, material which, in law, is demonstrably relevant, that may reveal a legal error in approach. However, the choice by the judicial valuer as to material of utility or weight will be, generally, a question of fact in the evaluative process. If not bound by the rules of evidence, a "rejection" of material by the judicial valuer may be seen as a judgment by him or her that a body of material is unlikely to be of utility and, as such, involve factual, rather than legal, considerations. 1. In the principal judgment in ISPT Giles JA (Allsop P and Campbell JA concurring) stated at [23]: 23 Comparability and concomitant adjustment involve matters of degree and judgment. In Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 Hutley JA, with whom Samuels JA agreed, said at 383 that "[w]ithin limits, the decision as to what sales are comparable is a question of fact", and in Leichhardt Municipal Council v Seatainer Terminals Ltd (1981) LGRA 409 at 433 Hope JA said bluntly, "Whether sales are comparable is a question of fact". See also, referring to these cases, Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 177 and Roads and Traffic Authority v Mosca [2006] NSWCA 159; (2006) 146 LGERA 335 at [66]. Whether the sales outside Fairfield were sales which, with adjustment, could provide useful comparison and so assistance in valuing the land was a question of fact. 1. Turning to the summons, there are seven grounds of appeal identified by a heading, with numerous sub-grounds identified in some of the grounds of appeal. Commencing an appeal with a summons drafted as in this case is to be discouraged. There are difficulties in drafting with all but one ground of appeal. It is essential that appeal grounds identify with precision the question(s) of law ideally by reference to the judgment challenged. Those questions of law if established must vitiate the decision. These requirements are particularly important in this case as this is an appeal in a compulsory acquisition matter requiring the determination of the value of land. In assessing the claim for compensation the Court was required to assess the market value of resumed land in accordance with the broad provisions of s 56(1) of the Just Terms Act. That does not convert every perceived error in reasoning or fact finding in relation to the application of valuation principles as a finding on a question of law, described by the Appellant on numerous occasions as a failure to properly apply s 56(1) of the Just Terms Act. 2. A further problem with the summons is that many grounds contain a large number of sub-grounds suggestive of a scatter-gun approach to the identification of alleged errors. Legal representatives must resist the temptation to load up a summons with every conceivable error they believe they can identify. Rather, they should focus on the important vitiating errors which are questions of law, if there be any. I note for completeness that matters raised in par 1 of the summons were not separately addressed and I have not considered them. 3. In respect of grounds 1-4 and 6 the Council submitted that no part of the judgment is identified as containing the relevant decision on a question of law or there is no identification of an error in relation to the suggested decision on a question of law or there is no demonstration that any suggested error in relation to a potential question of law had a vitiating effect in any event. I largely agree with this submission as will become clear in my reasons. Ground 1 – Rural residential lot 1. The summons at par 3 sets out ground 1 of the appeal: a. The Commissioners found that the residue lot had potential to be used as a rural residential lot with a dwelling house entitlement [57] but that to realise the potential of the lot it would be necessary to prepare a number of studies and that there was no certainty that the residual lot was capable of gaining approval for a rural residential lot with a dwelling house entitlement [58]. The Commissioners then found that because of the lack of certainty the value of the residual parcel was "nominal" and by deduction only from the total amount of compensation awarded (there being no transparent reasoning given), the sum of $72,000. [58] This reasoning is vitiated by error of law in that: i. A step in the carrying out the public purpose was the rezoning of the land to make development of it for residential purposes a prohibited use. In that circumstance the "studies" referred to would never be carried out [194]. Accordingly the reasoning of the Commissioners offended s56(1)(a) of the Act; ii. The appellant contended that: 1. There was no planning or environmental reason why the subdivision of the land would not be permitted to create, inter alia, a rural residential lot land that could be developed with a dwelling house; and that 2. In any event, if the land was to be transferred to the Council it would be transferred at market value rather than given away (as contended by Mr Davis [106]) as demonstrated by sales evidence between developers and Council of land at Shephards Lane Coffs Harbour (Exh A6 tab 3) and Halls Road, Coffs Harbour (Exh 6 tab 4). iii. The Commissioners reasoned that there was no certainty that the residual lot was capable of gaining an approval [58] and therefore the land had only "nominal" value. This reasoning was irrational and / or manifestly inadequate as: 1. There is never any certainty in the gaining of approval to subdivide en globo land until approval is actually obtained however that does not render the land of nominal value only; 2. Where land is rezoned to enable the carrying out of a public purpose there is no likelihood of carrying out "studies" to show the land can be developed for prohibited purposes; 3. The "studies" referred to are not identified; 4. The outcomes of the studies that might preclude a dwelling house being erected on the land are not identified; 5. The "uncertainty" is not identified; 6. There was no reason actually given why the land could not be subdivided and sold; 7. The evidence of Mr Connelly was that there was no uncertainty of such approval. The evidence of Mr Ryan was that he could see no reason why a dwelling house could not be developed on the land. The Commissioners did not attempt to reason through the evidence before them; 8. The evidence of Mr Paris was that there were approvals and sales of similar large rural residential lots nearby the subject land and that the market value of the proposed rural residential lot land was rationally informed thereby; 9. What the Commissioners meant was "nominal" value was not reasoned or explained; 10. There was no evidence to support a value of $72,000 being applied to the land that was found to have a "nominal value"; 11. The Court failed to take any account of the evidence tendered by the appellant that the Respondent paid market value for similarly constrained land from en globo land developers; and 12. There were no reasons given for how the market value of $72,000 of the land was settled upon. b. In the circumstances of this case, under the Act, the assignment of a "nominal" market value of $72,000 to this part of the en globo land was not rational or lawful. See [67]. c. Where the Commissioners accepted that the unitary rate relevant to the Land was a rate per lot [108] their reasoning that the range of $61,583 per ha to $300,797 per ha to this Land [143] was: i. Irrational given that a unitary rate per ha is not a rate per lot; ii. Inadequate reasoning given Mr Paris's uncontested evidence that the large rural residential lot sales to which he referred transacted on a rate per lot not a rate per ha; iii. Inadequate reasoning given Mr Paris expressed reliance on the sale of nearby land at Bee Close being sales of large rural / residential lots and Mr Davis's acknowledgement that he did not consider the sales as he believed the land would be dedicated to council free of cost; iv. Inadequate reasoning given that Mr Davis's only evidence was that the Land would be dedicated to Council of free of cost and the Commissioner's did not address his evidence; v. Indicative of a failure by the Commissioners to deal with a principal contested issue. Appellant's submissions 1. The Commissioners misapplied s 56(1)(a) of the Just Terms Act as this ground discloses an error in the application of the Just Terms Act to the facts of this case. A mixed question of fact and law is sufficient to be captured in the expression "question of law", per French CJ at [25] in Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390). In that case, the High Court also accepted that to decide a question on "no evidence" was an error on a question of law (at [59] per French CJ and [90] per Hayne, Heydon, Crennan and Kieffel JJ). 2. It is an error on a question of law if there is a failure to refer to an essential issue at all in a judgment has been described as a failure to exercise jurisdiction by a Court per Ballantyne v WorkCover Authority of NSW [2007] NSWCA 239 at [127]; Goodwin v Commissioner of Police [2012] NSWCA 379 at [18]-[25]. More recently, the Court of Appeal in Redbro Investments Pty Ltd v Ceva Logistics (Australia) Pty Ltd [2015] NSWCA 73 said, per Leeming JA at [53] (with Basten JA and Simpson AJA agreeing) that the trier of fact is required to "grapple" with the contested evidence. 3. It is not appropriate for a trial judge (here the Commissioners) merely to set out the evidence adduced by one side, then the evidence adduced by another, and then assert that having seen and heard the witnesses he or she prefers or believes the evidence of the one and not the other: The Nominal Defendant v Kostic [2007] NSWCA 14. However, where conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to: Beale v Government Insurance Office of New South Wales [1997] 48 NSWLR 430. In Beale it was also said that where one set of evidence is accepted over a conflicting set of significant evidence, the trier of fact should set out his findings as to how he or she comes to accept one over the other. 4. The need to provide explicit reasons for why one expert's evidence is preferred over another was emphasised in Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816 Hayne J at [131]: 5. In respect of the residue or rural residential lot, the Appellant contended that there was no planning or environmental reason why the subdivision of the land would not be permitted to create, inter alia, a rural residential lot that could be developed with a dwelling house. The Appellant also contended that in any event, if the land was to be transferred to the Council it would be transferred at market value rather than given away (as contended by Mr Davis identified in the Commissioners' judgment at [106]) as demonstrated by sales evidence between developers and Council of land at Shephards Lane and Halls Road, Coffs Harbour (CB vol 6, tab 21). That was a material question that was not dealt with by the Commissioners at all. That is clearly a constructive failure to exercise jurisdiction, or alternatively, a failure to "grapple" with a central component of the contested evidence. Characterised either way, it is a failure and a vitiating error in the Appellant's submission. 6. There are further alternative ways to characterise this issue as an error of law. One of these relates to manifest unreasonableness/irrationality and another relates to the obligation to provide proper reasons. 7. The Court is required to approach the construction of the statute with a presumption that it intends the decision-maker to reach a decision by a process of logical reasoning. A contrary interpretation requires clear and unambiguous words: Hill v Green [1999] NSWCA 477; (1999) 48 NSWLR 161 at 174-175). Where the satisfaction of the decision-maker was based on findings or inferences of fact which are not supported by some probative material or logical grounds, the courts are entitled to interfere: Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at 657. 8. Many of those principles, either on their own or in an overlapping fashion, are invoked. The Commissioners reasoned that there was no certainty that the residual lot was capable of gaining an approval (at [58]) and therefore the land had only "nominal" value. This reasoning was irrational and/or manifestly inadequate as set out in the twelve subparagraphs in cl 3(a)(iii)(1)-(12) of the summons and one new matter, identified in written submissions, that Mr Davis, during oral evidence, agreed that he had not approached this issue on the basis that this land had value, but accepted that if it did, he would defer to Mr Paris. 9. In the circumstances of this case, the assignment of a "nominal" market value of $72,000 to this part of the en globo land was not rational, lawful or adequately explained (par 3(b) summons). The error in this ground can be cast in multiple ways. Fundamentally, it is a misapplication of s 56(1)(a) of the Just Terms Act. Further, it has all the hallmarks of an arbitrary decision. It fails to grapple with critical contested evidence, it fails to grapple with the Appellant's submissions and it does not expose any logical and transparent reasoning process. On any or all of those grounds, this aspect of the decision manifests vitiating error. 10. The Appellant's further reply submissions handed up at the hearing set out extensive references to the valuation evidence before the Court but as I find there is no relevant question of law disclosed in the summons there is no need to set out this material. Council's submissions 1. As the first step the Commissioners identified the planning evidence including a summary of constraints at [10] and planning controls at [11]-[24]. The planning constraints of the rural residential lot and the Council's submissions were identified at [52]-[58]. Four possible development scenarios for the lot are identified at [56]. A nominal value is assigned at [58]. 2. As the second step the Commissioners assessed the valuation evidence and then value. The range of evidence for this lot is identified as "incredibly wide" and "of little assistance" at [143]. The range identified is $30,000-$300,000: (CB vol 2, tab 10a, p 472.32, TS 293/42-44). The evidence was insufficient to facilitate effective adjustment of analysed rates per hectare for the residue lot at [168]. 3. The Commissioners criticised Mr Paris at [120] for failing to provide transparent adjustments in relation to the residue lot. The application by Mr Paris of $300,000 to the residue lot is criticised as lacking explanation at [125]. Mr Paris was instructed to assume development consent would be granted and he allowed no risk as a result (CB vol 4, p 1371 at par 61). The value of the residue lot was disputed by the two valuers and the range from $0 to $300,000 was identified at [105]-[106] and [125]. The Commissioners' conclusion of a "nominal" value for the lot was at [168]. 4. In relation to Mr Paris' criterion rate per hectare versus rate per lot, Mr Paris adopted a rate per hectare (CB vol 4, p 1402). 5. The Appellant's submissions at [58] rely on sales at Shephards Lane and Halls Road, Coffs Harbour. Shephards Lane was referred to in the valuers' joint report where the valuers agreed it should be disregarded (CB vol 4, p 1424 at par 34). They also agreed to "strike a line through Halls Road" (CB vol 2, p 423-424, TS 214/43-215/25). 6. The selection of sales is a question of fact. Four sales relevant to the residue lot were referred to in [135], [111]-[112] and [168]. Mr Paris' sales were approved for rural/residential development with no allowance for development risk. Even if regard is had to Mr Paris' report, the range in value was greater (CB vol 4, p 1402) and of even "less assistance" at [143] resulting in a finding that no adjustment of sales to achieve a rate per hectare for the residue lot was possible, at [168]. No vitiating error is identified. No irrationality in reasoning or a failure to give reasons is demonstrated. Finding on ground 1 1. This ground of appeal is largely misconceived. The Appellant repeated its case before the Commissioners at first instance and characterised the Commissioners' (entirely permissible) decision not to accept that approach as a legal error, variously and unhelpfully described in the summons and in the Appellant's written submissions. The worst example of the Appellant's approach was the repeated statement orally and in writing that the Commissioners misapplied s 56(1) of the Just Terms Act to the facts in this case. As observed above in par 16, that section provides for the determination of market value in general terms. Most of the Commissioners' judgment is directed at considering expert evidence and determining market value applying valuation principles as required by s 56. Referring to Kostas in relation to identifying questions of mixed fact and law does not assist the Appellant in identifying a question of law in this ground. 2. This ground of appeal also infringes the well-known principle that decisions of commissioners should not be viewed with an eye to error and in a nitpicking way. For example, the drafting in the summons at par 3(a)(iii) is obviously problematic as it addresses almost word for word parts of the judgment at [52]-[58]. 3. The judgment must be read as a whole. As the Council identified in submissions summarised above at par 30-32, the Commissioners set out the evidence and submissions concerning the planning issues related to the rural residential lot at [52]-[58]. They identify the evidence of both planners and explain their approach in accepting that a rural residential lot could be subdivided, a finding in the Appellant's favour. They also explain why they consider the constraints on the land meant that it has nominal value, at [58]. As this issue was largely determined on the planning evidence there was no need to consider in much detail the valuation evidence. The Council's submissions summarise the references to the valuation evidence on this topic, identified at [111]-[112] for Mr Paris. Mr Davis had no comparable sales as he considered the land would be given to the Council at no cost, at [106]. The Commissioners considered the sales evidence unsatisfactory and came to their conclusion at [168] that the residue lot could be included as part of a large constrained lot of nominal value only. There was no failure to grapple with evidence or refer to an essential issue, nor does the reasoning disclose irrationality. Redbro has no application here. Nor do the authorities such as Ballantyne or Goodwin v Commissioner of Police which concern a failure to exercise jurisdiction by a court apply. 4. There was no failure to refer to evidence or to give reasons for resolving disputes in the evidence given that the Shephards Lane and Halls Road sales were not relied on by the valuers. 5. The Appellants' reliance on RTA v Peak [2007] NSWCA 66 at [147] is misplaced as the grounds of appeal in this matter have no similarity to the circumstances giving rise to the findings in Peak. 6. Considering the summons in detail, I do not understand par 3(a)(i). Paragraph 3(a)(ii) repeats the Appellant's case before the Commissioners and no question of law is identified. Paragraph 3(a)(iii) alleging irrationality identifies a number of alleged failures in reasoning which were adopted in the Appellant's written submissions. To the extent I can understand these I observe as follows: 1. 1 identifies a matter of merit, is argumentative and impermissible; 2. 2, 3, 4 are about matters of fact. The judgment must be read in context and I consider the Commissioners' meaning at [52]-[58] is clear. No relevant question of law arises from these; 3. 5 is nitpicking in the extreme. Why the Commissioners referred to "uncertainty" is clear when the judgment is read; 4. 6 is argumentative and wrong when the judgment is read in context; 5. 7 does not properly reflect the findings in the judgment; 6. 8 does not identify any error but repeats the Appellant's valuer's case, a matter of merit; and 7. 9 criticises use of the term "nominal" value, a well understood term in valuation (and general) parlance well known to the Appellant's valuer and legal representatives. How much is nominal value will depend on the circumstances of a matter, requires evaluative judgment and will generally not be a large amount of money. 1. Points 10, 11, 12 of par 3(a)(iii) and par 3(b) relate to the part of the judgment where the Commissioners considered the valuation evidence. Points 10 and 12 suggest error because the Commissioners did not explicitly identify in the judgment the amount of $72,000 for the residue lot. I accept that was an omission in the sense that the parties were apparently unclear when judgment was delivered how the precise amount of $1,980,000 was arrived at. The clear inference arises that the Commissioners rounded up the amount of compensation to $1,980,000, the difference of $72,000 reflecting the amount allowed for nominal value. The Commissioners indicated that they were doing so at [174]. This is not a vitiating error in the context of the judgment and the amount of compensation awarded overall. 2. Point 11 of paragraph 3(a)(iii) alleges that valuation evidence of englobo sales was ignored but that concerns a matter of fact as to which sales the Commissioners considered were relevant, confirmed by authorities cited above of ISPT and Sydney Water Corporation v Marrickville Council at par 13-15. This is related to the new matter identified in written submissions that Mr Davis stated in oral evidence that he would defer to Mr Paris on land value of this parcel if any was found to exist. The Commissioners were not required to accept the evidence of any expert before them. No question of law is identified. 3. Paragraph 3(b) asserts that the conclusion of nominal value in the judgment at [58] in the amount of $72,000 is not rational or lawful. That is in part a repetition of point 9 of par 3(a)(iii). No part of the judgment suggests irrationality. No question of law is identified. 4. Paragraph 3(c) is attempting to canvass merit matters by alleging failure in reasoning based on irrationality and inadequacy. The context identified is a finding at [108] that the valuers agreed that the unitary value was a rate per lot. It appears that was in the context of the comparison of sales for the englobo land. The range of values for the rural residential residue lot according to Mr Paris was identified implicitly in [111] as a rate per hectare given that is how his evidence is summarised. Mr Davis did not provide any sales evidence for the residue lot. The Commissioners' conclusion in [143] is in relation to values for the residue lot on the basis of a rate per hectare simply reflects the evidence before them. There can be no irrationality as alleged in par 3(c)(i) in these circumstances. Paragraph 3(c)(ii) does not appear to correctly reflect Mr Paris' approach. Paragraphs 3(c)(iii) and (iv) complain of inadequate reasoning but any such submission must be assessed in the context of the judgment as a whole, as I have outlined above in par 38 in relation to the planning evidence and the valuation evidence. These grounds are really a complaint that the Appellant's case was not accepted by the Commissioners, a merit argument. No failure in the provision of reasons is established. No failure to deal with a principal contested issue as identified in par 3(c)(v) is established. 5. Overall the summons on this ground and written submissions (for example par 28) reflect a scattergun approach to the identification of grounds of appeal. This ground of appeal fails. Ground 2 – The valuation approach / hypothetical development valuation approach 1. The summons at par 4 sets out ground 2 as follows: The Commissioners acknowledged that they did not consider the evidence concerning the hypothetical development valuation approach [98] because they said the approach was not addressed in any detail at the hearing. However: a. Evidence was called by the appellant addressing that approach in particular of the costs of developing steep land and the fact that Mr Davis sales analysis was potentially wholly undermined by that evidence; b. The Commissioners were obliged in law to canvass that evidence and give a reasoned judgement taking that evidence into rational account; and c. The Commissioners failed thereby to take into account relevant evidence and give an adequately reasoned judgement. Appellant's submissions 1. Two methods of valuation were addressed by both valuers. The first was a direct sales comparison approach of en globo subdivision land. The second was a hypothetical development method of valuation used as a check method. The Commissioners acknowledged that they did not consider the evidence concerning the hypothetical development valuation approach (at [98]) because they said the approach was not addressed in any detail at the hearing. However: 1. Evidence was called by the Appellant addressing that approach in particular of the costs of developing steep land and the fact that Mr Davis' sales analysis was potentially wholly undermined by that evidence; 2. The Commissioners were obliged to canvass that evidence and give a reasoned judgment taking that evidence into rational account. They did not, and accordingly failed to take into account relevant evidence, grapple with the contested evidence and give an adequately reasoned judgment. Council's submissions 1. The valuers' evidence as can be seen in the joint report (CB vol 4, p 1418 at par 3) referred to the hypothetical development method as a check method only. No submissions were made by the Appellant's counsel to this valuation method. There was no reference to it in the Appellant's written and oral submissions before the Commissioners, including in reply. 2. The submission in the Appellant's closing submissions at par 118 (CB vol 1, p 130) is not in relation to the Appellant's use of the hypothetical development method. Rather, it is a critique of the Council's valuer's use of 465A Pacific Highway as a comparable sale (and a critique of that sale starts at par 90, concluding at par 129). The Appellant submitted both in writing (CB vol 1, p 130) and orally that the hypothetical development method was at best only a check method, to be cautiously applied, and may be described as "perilous" or of a lower order (CB vol 2, p 545, TS 418/21-25). Finding on ground 2 1. The Commissioners stated at [98] that there was little reference to the hypothetical development valuation approach by the parties. The Appellant is bound by the way it presented its case before the Commissioners, confirmed in Edyp. It did not rely on the hypothetical development valuation approach before the Commissioners as the Council's submissions identify. The Appellant cannot now complain at the Commissioners' acceptance of its approach to that evidence. The Commissioners were not obliged to consider the hypothetical development valuation approach. 2. I should note that in the course of the appeal hearing the Appellant sought to argue this ground on a wider basis related to a failure by the Commissioners to address development costs of sales with steeper land. I did not grant consent to this ground being argued on that basis but note for completeness that as I understand it much of that evidence was intended to criticise the reliance of Mr Davis, the valuer called by the Council, on a particular sale at 465A Pacific Highway. I note that the Commissioners did not apply the sale (see judgment at [167]) to the subject land in any event. 3. This ground of appeal fails. 4. Grounds 3, 4 and 6 I consider fail at the outset because they do not identify by reference to the judgment any question of law which if established would vitiate the Commissioners' decision. These grounds consisted of the Appellant resubmitting in this appeal the arguments run before the Commissioners which they did not accept. That is clearly seeking to run again, impermissibly, the merits of the Appellant's case. I will deal with these grounds as briefly as possible in light of this fundamental failure. Ground 3 – RTA acquisition of part of the Hoy property 1. The relevant part of the Commissioners' judgment under the heading "RTA acquisition of part of the Hoy property" is set out above being [126]-[128] at par 4. The summons at par 5 sets out ground 3 as follows: a. The Commissioners found the sale "may be of relevance" but that it should be treated with caution such that "little weight" should attach to the transaction because: i. The sale occurred under the shadow of acquisition [128]; and ii. There was ambiguity concerning the composition of the $202,000 transaction price [128]. In fact the sale was disregarded by the Commissioners or was taken into account in a completely unreasoned and opaque way. b. This reasoning of the Commissioners is manifestly inadequate for the reasons that: i. The sale was sale by agreement and not a "RTA acquisition"; ii. What is meant by "the shadow of acquisition" is not reasoned; iii. Why the "shadow of acquisition" makes the sale of little weight is not reasoned. If anything such a consideration would have a depressing effect on the sale price rather than the converse; and iv. Why a sale of the appellant's land actually adjoining the subject land at a point of time close to the date of compulsory acquisition should be rejected or given little weight is not reasoned. c. In failing to take into real and genuine account the sale of this land the Commissioners failed to take account of relevant evidence. Appellant's submissions 1. The next door sale was disregarded by the Commissioners or was taken into account in a completely unreasoned and opaque way. Given this was a significant part of the Appellant's case, the principles in the cases cited above in relation to the first appeal ground (Ballantyne, Redbro, Beale, Kostic and Fitzgibbon) required the Commissioners to properly grapple with this aspect of the case and provide proper, adequate and logical reasons. They did not. 2. Analysis of the reasoning of the Commissioners demonstrates that it is manifestly inadequate, as identified in par 5(b) of the summons. The Appellant submitted at trial that this sale was probably the single best piece of evidence to determine market value. Notwithstanding that, the Commissioners failed to take into real and genuine account the sale of this land. The Commissioners failed to take account of relevant evidence. The submissions made to the Commissioners on the application of the sale were set out in detail in the Appellant's written submissions at par 83(a)-(c). 3. In lengthy reply submissions handed up at the hearing the Appellant essentially emphasised the ground related to the inadequacy of reasons, relying on Segal at [42], [43] and [65]. Council's submissions 1. Only inadequacy of reasons/principal contested issue are referred to. This transaction was not relied on by either valuer. It was not pleaded in the Points of Claim arising for the first time in closing submissions of the Appellant. 2. The term "shadow of resumption" was referred to in the Council's closing submissions (CB vol 1, tab 7, at par 99-100). The relevant authorities cited were Chircorp v Transport for NSW [2014] NSWLEC 63, Attard v Transport for NSW [2014] NSWLEC 44; (2014) 205 LGERA 396 and McDonald v Roads and Traffic Authority of NSW [2009] NSWLEC 105; (2009) 169 LGERA 352. That the Commissioners allocated this sale "little weight" at [128] is not a question of law. The accumulation of relevant sales is a matter for the Commissioners: ISPT at [5]. The comparability and adjustment of sales are also matters for the Commissioners: ISPT at [23]-[25]. Finding on ground 3 1. The relevant part of the judgment is set out at [126]-[128], extracted above at par 4. The Commissioners identify the Appellant's argument at [126], the Council's at [127] and draw their conclusions at [128] referring to case law in doing so. 2. This ground seeks to canvass again the merits of the Commissioners' decision not to rely on the next door sale, the most obvious failure. That is best reflected in the lengthy repetition in the appeal submissions of what was argued before the Commissioners. There are numerous other problems with the appeal ground as framed. For example, the approach of the Appellant is clearly with an eye to identifying error. I am reluctant to canvass the unnecessarily extensive material referred to by the Appellant in reply for that reason as it is largely irrelevant. 3. If the question of law is the failure to give reasons no such failure is demonstrated. Failing to take into real and genuine account is not a question of law in this appeal but a merits argument. As the Appellant accepted, the duty of a decision-maker to give reasons will vary according to the way in which the case is conducted. Segal at [93] was complied with. 4. The selection and application of sales is a matter of degree and judgment, as confirmed most recently in Sydney Water Corporation v Marrickville Council at [30]-[34]. An error of law only arises if the finding a sale is not comparable is not reasonably possible or open on the evidence. As the Council submitted, the Commissioners' finding was based upon evidence of the sale being unreliable for two reasons: the shadow of compulsory acquisition and ambiguity concerning the transaction price. The finding was reasonably open as a matter of fact that this was a sale that should be given "little weight". 5. The circumstances at the hearing including the case presented by the parties' valuers and the Points of Claim are highly relevant context for considering matters in a judgment as the Council submitted. The sale was identified for the first time in the Appellant's closing submissions before the Commissioners which I infer means the Appellant's legal team determined that it was a useful sale, not the Appellant's valuer. While not the reason why this ground fails, I observe that criticising commissioners for not giving much weight to a sale which no valuation expert relied on is to be avoided. Great care must be exercised by parties' legal representatives in considering reliance on sales which valuation experts do not support. 6. The Commissioners gave sufficient reasons to explain that the sale would not be given more than "little weight" because it was unreliable as a source of market value. 7. Criticism of the phraseology of the Commissioners referring to "shadow of resumption" or "shadow of acquisition" is misplaced. In an expertly constituted court the wording used by the Commissioners would be well familiar to the parties and their expert valuers and be understood by them. For example, Biscoe J referred to sales under the "shadow of compulsory acquisition", taking the approach that such sales to acquiring authorities which have not entered the open market are admissible but should be treated with caution in Chircorp at [48] and Attard at [88]. 8. There is no reason to consider the principles in Ballantyne, Redbro, Beale, Kostic and Fitzgibbon referred to in ground 1 by the Appellant (see above at par 21, 22, 23) and relied on in this ground. The Appellant fails on this ground. Ground 4 – Council's s 94 Contributions Plan 1. The summons at par 6 sets out ground 4 as follows: a. The Commissioners failed to have regard to a relevant consideration namely the amount which the Council budgeted in its respective s94 Contributions Plans for the compulsory acquisition of the appellant's land [130]. b. The adopted s94 Plans provided for the likely cost of the acquisition of the appellant's land having regard to the Department of Planning Practice Notes tendered in evidence and Environmental Planning and Assessment Act Regulations 2000 cl 27 and was relevant evidence of the market value of the acquired land. It was an error of law to ignore it. c. Not to take account of the s94 Contribution Plan as the Commissioners did in [130] in determining market value of the acquired and then to take the contribution (or a similar contribution) into account as the Commissioners did in [131] is: i. Contradictory; ii. An approach for which there was no evidence; iii. Irrational; and iv. Decreases the value of the appellant's land in breach of s56(1) of the Act. 1. The Appellant's opening written submissions largely repeated the ground as set out in the summons. In reply the Appellant's written submissions handed up at the hearing alleged the Commissioners failed to have regard to relevant evidence and failed to give adequate reasons, citing Maloney v Minister Administering the Environmental Planning and Assessment Act 1979 [2011] NSWLEC 121; (2011) 184 LGERA 386 at [152]-[164] as adopting the correct approach in valuation matters. Finding on ground 4 1. The Commissioners were clearly aware of the s 94 Contributions Plan as the judgment at [129]-[134] demonstrates, these paragraphs dealing squarely with the issue raised by the Appellant. There is simply no basis for asserting any of the failures alleged in this ground in the summons of failing to have regard to relevant evidence and failure to give adequate reasons for rejecting the contributions plan as relevant evidence of market value. This ground is patently a challenge to the merits of the Commissioners' decision, and the argument consisted largely of repeating submissions made to the Commissioners and then complaining these were not accepted. The summons failed to recognise that the judgment is not required to mention every matter put by a party but must reasonably reflect the issues raised. Attempted comparison to Maloney is not helpful. 2. There is no statutory basis for the assertion in par 6(a) that the Commissioners failed to have regard to a relevant consideration (which must be a mandatory consideration to give rise to any failure by the Commissioners) namely the amount budgeted by the Council in its s 94 Contributions Plan. As identified in par 12, a valuation pursuant to s 66(2) of the Just Terms Act does not identify mandatory relevant considerations. There is no basis in the subject matter, object and purpose of the Just Terms Act to suggest such a consideration is a mandatory relevant consideration: Peko-Wallsend at 39-40. 3. Paragraph 6(b) seeks to argue the merits of the Commissioners' decision not to adopt the s 94 Contributions Plan figures and does not identify a question of law. 4. The ground of appeal in par 6(c) of the summons does not correctly consider the judgment in context. The Commissioners' judgment at [131] is addressing a different topic to par [130]. They should not be read together but separately. None of the four criticisms of the Commissioners' approach as being contradictory, without evidence, irrational and contrary to s 56(1) of the Just Terms Act find any basis in the judgment. A decision-maker does not fail to take something into account by rejecting it or affording it little weight as the Council submitted: Peko-Wallsend at 41, Hoskins at [11]-[12], Terrace Towers at [57]. 5. I agree with the Council that no error in the process of rejecting ambiguous and unproven valuation assumptions embedded in the s 94 Contributions Plan suggests that the Commissioners misunderstood their functions or powers in the determination of compensation. As the Council submitted, the s 94 Contributions Plan was not relied upon by the valuers. Nor was it pleaded in the Points of Claim. No part of the reason for rejecting the 94 Contributions Plan as providing evidence of market value fails to comply with s 56(1) of the Just Terms Act. 6. This ground of appeal fails. Ground 5 – Adjustment of potential comparable sales 1. The summons at par 7 sets out ground 5 of the appeal as follows: a. The Court analysed rate at [142] is not reasoned and capable of any understanding as to how the rates in the table therein were calculated; b. The adjustment that the Commissioners made at [146] for the cost of development application fees, studies to address constraints, surveys and engineering plans, drainage plans and the like was a deduction that was in breach of s56(1)(a) of the Act as it was a 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. c. The Commissioners examined 7 sales and determined each to be of "limited relevance" [155][159][165][167] or "indirect relevance" [157][161][163]. The Commissioners held that sales that pre-dated the GFC [149] could be given "little weight". It seems that finding (which cannot be challenged) accounts for the attribution of "limited relevance" by the Commissioners to the sales in [155][159][165][167] as these sales were each pre-GFC. The Commissioners then: i. Failed to expose and reason the adjustments they made for development consent, location and size to comparable sales so as to inform the market value of the acquired land on a rate per lot; ii. Appear to have made adjustments without regard to the valuers evidence before them as the rate per lot arrived at [170]-[172] neither accords with Mr Davis's adjustments or Mr Paris's and there is no explanation given; iii. Have not reasoned how or why they adopt their own adjustments (whatever they were) or why they rejected the adjustments of Mr Davis and Mr Paris as they appear to have done; iv. Made very large adjustments to the comparable sales which are not transparent and for which there is no evidence to rationally support the adjustment; and v. Adopted a rate per lot of $18,000 [173] being within the range of $15,000 and $21,000 per lot without reason for adopting $18,000 per lot or explaining why the higher rate was not adopted. This was an impermissible valuation methodology. Appellant's submissions 1. The principles in relation to errors of law relied on earlier in the appeal are relevant, as is the principle set out in Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111. 2. From [59] to [94], the Commissioners embark on a very lengthy process of asserting how important it is for the valuers in their evidence to provide properly open, transparent, understandable and logical material in going about the valuation exercise, particularly in the process of making adjustments to comparable sales. The Commissioners did not actually apply the very valuation principles that they themselves had set out at length (which is an error of law in the Maurici sense). The paragraphs in the judgment devoted to engaging in that process by providing reasons as the judicial valuer, is short, obscure, opaque and not readily understandable as to logic of the conclusion or how it was reached. 3. The starting point of the criticism of the judgment is that the Court analysed rate at [142] is not reasoned and capable of any understanding as to how the rates in the table therein were calculated, par 7(a) of the summons. The written submissions repeated par 7(c) of the summons in its entirety. 4. Ultimately, the rate adopted per lot makes the difference of millions and millions of dollars in this case. The difference between the parties as to what the hypothetical parties to the hypothetical transaction at the date of acquisition would pay varies significantly on the issue of price per lot. This was a central part of the dispute and the subject of most detailed and extensive submissions. However, it is expressed in one sentence, at [173]. That is wholly insufficient as a matter of the very valuation principles the Court set out extensively at an earlier part of the judgment ([59] to [94]) and entirely offends those principles in relation to properly exercising jurisdiction by dealing with contested issues, grappling with the critical evidence and providing proper, transparent and understandable reasons. This part of the judgment (itself a very fundamental part of the determination of compensation) is a total failure in that respect. 5. There is a hint of applying an average in the conclusion at [173]. Averaging, according to the High Court, (and applied in this Court under the Just Terms Act) is an error in valuation principle. No adequate reason was provided for why $18,000 was preferred. Even if not averaging no reason for selecting the midpoint was given. The lack of an adequately reasoned judgment on such a fundamental issue in the case, removes from the Appellant the ability to properly test the conclusion. That in itself is an error of the vitiating kind in the Appellant's submission, consistent with all of the authorities set out above. 6. In reply the Appellant agreed there was no dispute about the valuation method adopted or the four steps of accumulation, analysis, adjustment and application but disputes that the four steps are solely issues of fact, relying on ISPT at [23]-[24] and Maurici at [18]. Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156 should not be relied on as the Just Terms Act was introduced since. A clear error in arithmetic can be considered on appeal, as occurred in El Boustani v The Minister administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33; (2014) 199 LGERA 198. That case supports the principle that to make findings of fact overlooking a material issue, argument or matter converts the finding of fact to an error of law, at [156]. While the valuation task is evaluative it is not guesswork. The accumulation of sales was not an entirely factual exercise and had to be undertaken in a legal context. The descriptions of relevant sales as of limited relevance or indirect relevance was obscure. Sales of limited relevance appear to have been given no weight at all. There was a failure to give adequate reasons to support a finding of fact which is a question of law. While there is no fixed rule determining that which may be addressed in the analysis step whatever is addressed must be exposed in the reasoning process. 7. The Appellant complains there was an error of law in the application step because there was a failure in providing transparent reasons. The Commissioners did not give an explicit reason for why they made very large downward adjustments of 79% and did not apportion any particular percentage or value to the adjustments. The principal criticism of the application stage was a lack of transparency in how adjustments were made and, in relation to 102 Ainslie Drive no explanation of the upward adjustment for topography was given and whether it took into account evidence directed to the costs of developing a steeply sloping site from Mr Slattery and Mr Barnes. An explicit adjustment for the s 94 Contributions Plan was made and the same should have been done for development costs on a steeply sloping site. 8. The submissions in reply handed up at the hearing provided a detailed critique of the accumulation, analysis and adjustment parts of the judgment purporting to identify a number of omissions of evidence and absence of reasoning. As this is not central to the issue complained of and provides little assistance in understanding this ground of appeal I need not set these out. Council's submissions 1. No ground of appeal is identified. The structure of the judgment must be considered. It identifies the case requires two elements of land value to be determined en globo subdivision and if necessary, the value of the residual parcel. 2. The Commissioners set out their approach to valuation. Accumulation, adjustment, analysis and application of comparable sales are identified in the judgment at [60] and following: see Chircorp at [35]). The valuation approach is "not arithmetic" (see judgment at [63] and see Yates) and "not of science" at [64] of the judgment. The need to be "evaluative", "guess work" at [65] and [66] is supported by Yates. The four steps are considered, "accumulation" at [68]-[71], "analysis" at [72]-[76], "adjustment" at [77]-[91] and "application" at [92]-[94]. "Limited, indirect, direct" is identified at [92]. The Commissioners considered the evidence of the valuers, "accumulation" at [102]-[106] (noting difference between [103] and [105]), "analysis" at [107]-[112] (noting difference between [110] and [111]), "adjustment" at [113]-[120] (noting difference for [120]) and "application" at [121]-[134]. Mr Paris' evidence is referred to at [122]-[123], [125], compared to Mr Davis at [124]. 3. The Commissioners made their findings on accumulation at [135]. The selection of sales discloses no error of law. Analysis of sales are considered at [136]-[143] with the rejection of both valuers at [138]. Adjustments of sales are considered at [144]-[168] and the rejection of both valuers at [150]. The application of sales to the subject site is considered at [169]-[173]. The attribution of value through this process is not averaging or expressed in terms of doubt. The Commissioners undertook a discretionary or evaluative judgment as they are required to do in matters of this kind. They determined a range of values after the necessary evaluation process and chose an appropriate number in that range. They were not irrational or acting without evidence. There is no suggestion of averaging. The finding suggested the appropriate evaluation of a range of values, the usual course in a valuation case. A more liberal figure of $18,000 was selected than the bottom of the range of $15,000. Finding on ground 5 1. As identified in the extracts of the judgment at par 4 and summarised in the Council's submissions immediately above, the section of the judgment that deals with market value commences with a section on the valuation approach including relevant principles such as accumulation, analysis, adjustment and application of sales identified by the valuers. The valuers' respective approaches are identified and discussed in the context of accumulation, analysis, adjustment and application to the land. These parts of the judgment are summarised in the Council's submissions. The criticism in this ground of appeal is arguably directed to questions of fact arrived at in the necessary evaluative process undertaken in a valuation exercise based on comparable sales. Sydney Water Corporation v Marrickville at [28]-[34] and ISPT at [5] and [23] set out above in pars 13, 14 and 15 must be applied and therefore leads to the conclusion that no question of law is identified. The Appellant sought to invoke a principle in Maurici at [8] as supportive of its case but I was unable to see how that case could apply in this matter as it was directed to a fundamental question of how representative a sale must be in order to be comparable at all which is not a criticism made (or open) in this case. The Appellant also argued that issues of fact are considered all the time on appeal citing El Boustani and Peak. Such a blanket statement made in reliance on quite different cases which have no relationship to issues raised in this case does not assist in the determination of this appeal. 2. There is no inconsistency in expecting valuation experts before the Court to be transparent in their reasoning process so that the Court can evaluate their evidence with how the Commissioners have gone about their task in this matter. I agree with the Council's submission that no appeal can be based on an allegation of any error in the factual analysis of comparability, suggesting there is no duty to provide explicit reasoning on adjustment and analysis relying on Yates. Yates has not been superseded as an authority by the introduction of the Just Terms Act given its broad terms. As the Council submitted, the role and function of a judicial valuer does not require the level of mathematical exactitude required by the Appellant's submissions. This is supported by Yates at 182-183, Handley JA stating: A judicial valuer is not required to formulate verbal reasons for such guesses or exercises of judgment. Australian courts, and in particular the High Court, have frequently referred to the statement by Lord Hobhouse in Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373 at 391: "in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which, being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has had his own set of conjectures, of more or less weight according to his experience and personal sagacity. In such an inquiry as the present, relating to subjects abounding with uncertainties and on which there is little experience, there is more than ordinary room for such guesswork; and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at." In my opinion the trial judge did not err in law by failing to identify the particular adjustments he made or the reasons which led him to make them. In Valuer-General v Fivex Pty Ltd [2015] NSWCA 53; (2015) 206 LGERA 450 Leeming JA held that valuation is not an exact science but an exercise in estimation at [55]. Further, a commissioner is not required to refer to every argument made by a party only those material to the issues to be resolved, per Tobias JA in Segal at [71]. 1. It is also important to view the judgment as a whole and this shows an orthodox approach to the application of the comparable sales method to the determination of valuation with the clear consideration of each of the sales identified by the valuers and as considered relevant by the Commissioners examined in the judgment. To criticise the statement at [173] of the Commissioners ("having regard to the evidence tendered and thereafter, doing the best we can …") as a failure to engage with the central matter in dispute of the difference between the valuers in the price per lot is to ignore [95]-[172] of the judgment. Paragraph [173] is a short summation of what a judicial valuer generally does, informed by all that will precede such a statement. 2. Turning to the summons, par 7(a) criticises the table in the Commissioners' judgment at [142] as a summary of their conclusion on the analysis stage as lacking reasoning. The matters taken into account by the Commissioners are identified in [136]-[141]. No precise mathematical reasoning is required. 3. Paragraph 7(b) criticises the acceptance by the Commissioners of the Council's position that downward adjustment of sales with development consents was necessary. This is a matter of merit and seeks to canvass afresh a matter open to the Commissioners to conclude as they did. It does not become a question of law by describing the deduction as a breach of s 56(1) of the Just Terms Act. 4. The summons par 7(c) criticises how the Commissioners examined seven sales and determined each to be of "limited relevance" (at [155], [159], [165] and [167]) or "indirect relevance" (at [157], [161] and [163]). The Commissioners held that sales that pre-dated the GFC could be given "little weight": at [149]. The Appellant accepts that finding cannot be challenged. The use of the expression "of limited relevance" was criticised as unclear but when the judgment is read as a whole including at [169]-[172] it is clear these sales were not relied on. Further the summons in par 7(c) criticises the Commissioners as follows: 1. Failed to expose and reason the adjustments they made for development consent, location and size to comparable sales so as to inform the market value of the acquired land on a rate per lot. There is no obligation on the Commissioners to adopt a mathematical adjustment for every adjustment referred to. 2. Adjustments made without regard to the valuers' evidence before them as the rate per lot arrived at [170]-[172] neither accords with Mr Davis' adjustments or Mr Paris' and there is no explanation given by the Commissioners for how they arrived at their figures. The adjustments made by the valuers do not have to be adopted by the Commissioners and a mathematical figure does not have to be provided by them in taking into account the matters the Commissioners identify as relevant to adjustment in the three sales considered in those paragraphs. 3. The Appellant submitted that the Commissioners had not reasoned how or why they adopt their own adjustments (whatever they were) or why they rejected the adjustments of Mr Davis and Mr Paris as they appear to have done. This is not a valid criticism of the judgment when read as whole and does not identify a question of law. 4. Made very large adjustments to the comparable sales which are not transparent and for which there is no evidence to rationally support the adjustment. The role of judicial valuer does not require the level of mathematical calculation for which the Appellant contends to be explicit. 1. Paragraph 7(c)(v) complains of the selection of $18,000 from within the range of $15,000 to $21,000 per lot as not reasoned and suggestive of averaging. The ground alleges this was an impermissible valuation methodology. I agree with the Council's submissions on this sub-ground as set out in par 88 above and it is not established. 2. This ground of appeal fails. Ground 6 – The relevant planning instruments and findings on lot yield 1. The summons at par 8 sets out ground 6: a. The Commissioners held that the North Coast Regional Environmental Plan ("NCREP") was not a document that is drafted for the purpose of consideration in the determination of a single development application [26][50] whereas cl 43 of the NCREP provides: 43 Development control—residential development (1) The council shall not grant consent to development for residential purposes unless: (a) it is satisfied that the density of the dwellings have been maximised without adversely affecting the environmental features of the land,… This was an error of law. b. The Commissioners did not deal with principal contested issues namely whether: i. The Council would in adopting a DCP for the site which is zoned to permit residential development the Council would negotiate with the land owner and determine a suitable density for the land; ii. The developable area of the Land was 13.25 ha as contended by Mr Connelly or 11.5 ha as contended for by Mr Ryan; iii. There was any environmental reason why the land could not be developed with a 140 lot subdivision having regard to the provisions of the NCREP and the physical characteristics of the land and the absence of any constraints. Appellant's submissions 1. In determining the town planning aspect of the case, namely the approach the market would take to a likely lot yield for the subject land, in order to determine its value by applying a rate per lot, the Commissioners held that the North Coast Regional Environmental Plan (NCREP) was not a document that is drafted for the purpose of consideration in the determination of a single development application (at [26] and [50]) and misunderstood cl 43 of the NCREP. The Appellant contends that is incorrect and an error of law in vitiation of the decision (par 8(a) of the summons). 2. Paragraph 8(b) of the summons identifies failures to consider principal contested issues. It was also submitted that this was essentially a matter for valuation and how the market would approach this exercise. It was also submitted by the Appellant that given the assessment of comparable sales was being undertaken on the basis of an actual yield, not a development control plan (DCP) yield as Mr Ryan had contended, then the Court needed to deal with and resolve this matter and there was no evidence that the market transacted on a DCP yield basis. In fact, it was expressly contended that if the Court concluded that the market transacted on a DCP basis, which it implicitly did, then this would be a finding based on no evidence, and itself would be an error of law. The whole point of disclosing adequate reasons, as set out in the authorities above, is to allow the conclusions to be tested and understood and potentially appealed. Here the Appellant is in the position that it does not know why its submissions were rejected. The Commissioners failed again to grapple with this significant and contested factual and legal issue. They consequently failed to provide adequate, logical, plausible, transparent and understandable reasons in relation to this. 3. In reply the Appellant submitted it was often necessary to reconsider issues of fact on appeal citing Peak and El Boustani of examples where this had occurred inter alia. Council's submissions 1. No ground of appeal is identified but it may be a failure to consider a principal contested issue. Clause 43 of the NCREP is identified at [28] and forms part of the Commissioners' reasoning at [23]-[51]. The Commissioners considered the relevant local environmental plan, DCP, regional environmental plan and planning strategies. The judgment identifies correctly at [50] the issue is a matter of "weight". There is no vitiating error in these circumstances. Finding on ground 6 1. As already identified in par 54 this ground of appeal is really an attempt to argue the merits of one of the Commissioners' findings which underpinned their consideration of lot yield on the basis of the DCP. The judgment discusses the issue of lot yield at length from [23]-[51]. The judgment identifies the relevant planning instruments and the evidence of the planners. The detailed findings on five issues are set out at [38]-[51] including not accepting the view of the planner, Mr Connelly, that the Council regularly varied the requirement for subdivision in the DCP 2004 and that a prospective purchaser would apply the DCP in a proper manner. Paragraphs [50]-[51] are extracted in the summary of the judgment at par 4. The reasoning in these paragraphs discloses no error of law in considering the application of the strategic documents relied on by Mr Connelly which included the NCREP. At [51] the Commissioners reason that they will apply the DCP. Their reasoning appears entirely orthodox, correct and resolves the issue of lot yield at the highest end of the range of 92 to 106 lots, a finding in the Appellant's favour. The ground in par 8(a) is not established as no error of law is identified. 2. Paragraph 8(b) of the summons was not addressed fully in the Appellant's submissions and I do not understand it. The Commissioners' reasoning is clearly directed to considering how the Council would approach lot yield by applying the relevant DCP. Paragraph 8(b)(i) does not appear to arise from any finding by the Commissioners. It is not identifying a question of law. I do not understand how par 8(b)(ii) arises in the judgment. The judgment did consider the lot yield based on the planners' evidence. The issue framed in par 8(b)(iii) cannot arise on appeal as it discloses no question of law. The Appellant must identify findings in the judgment which give rise to a question of law. None relevant to the submissions in par 8(b)(iii) is identified. The statement in the Appellant's submission that the Commissioners' findings were incorrect is a merit submission which cannot be converted to an appellable error by adding the words "and an error of law in vitiation of the decision". This appeal ground fails. Ground 7 – Disturbance (application of s 26 of the Just Terms Act) 1. The summons at par 9 sets out ground 7 of the appeal: The Commissioners fell into error of law when: a. They determined that under s26 and s59 of the Act legal costs reasonably incurred by the person entitled to compensation in connection with the compulsory acquisition of the land could not as a matter of construction of the Act include any legal costs incurred in requesting that the acquiring authority be satisfied as the appellant's hardship and proceed to compulsorily acquire the land; and b. Legal costs incurred by an owner of land identified for acquisition to enable the carrying out of a public purpose in order to satisfy the acquiring authority that the owner of land is suffering hardship so as to require it to acquire the land are not legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land. 1. The Appellant sought acquisition of her property under the hardship provisions in Pt 2 Div 3 (owner-initiated acquisition in cases of hardship) of the Just Terms Act. The parties' submissions on this topic are identified at [175]-[188]. The relevant findings in the judgment at [190]-[195] are set out above. The Commissioners considered legal costs for the acquisition process should be awarded for disturbance, as provided for in s 59(a), excluding the costs of making the hardship application at [195]. Solatium was awarded at [197]. 2. Parts of Pt 3 Div 4 most relevantly s 59(a) are set out above at par 6. Sections 23(1)(a), 24, 25 and 26 in Pt 2 Div 3 of the Just Terms Act provide: 23 Owner who suffers hardship may require authority of the State to acquire land designated for acquisition (1) The owner of land to whom this Division applies may require an authority of the State, by notice in writing given to that authority, to acquire that land under this Act if: (a) the land is designated for acquisition by that authority for a public purpose,… 24 Hardship (1) An authority of the State is not required to acquire land under this Division unless it is of the opinion that the owner will suffer hardship (within the meaning of this section) if there is any delay in the acquisition of the land under this Act. (2) An owner of land suffers hardship if: (a) the owner is unable to sell the land, or is unable to sell the land at its market value, because of the designation of the land for acquisition for a public purpose, and (b) it has become necessary for the owner to sell all or any part of the land without delay: (i) for pressing personal, domestic or social reasons, or (ii) in order to avoid the loss of (or a substantial reduction in) the owner's income. … 25 Method of acquisition under this Division (1) Land required to be acquired under this Division is to be acquired by compulsory process. (2) However, nothing in this Division prevents the land concerned from being acquired by agreement instead of compulsory process within the period required by this Division. (3) Division 1 (Pre-acquisition procedures) does not apply to an acquisition of land under this Division. 26 Compensation for acquisition under this Division The special value of land, any loss attributable to severance or disturbance and solatium (as referred to in Part 3) need not be taken into account in connection with an acquisition of land under this Division, despite anything to the contrary in that Part. 1. The Appellant contends that the Commissioners made an error of law when they determined that under s 26 and s 59 of the Just Terms Act legal costs could not include legal costs incurred in requesting that the acquiring authority be satisfied of the Appellant's hardship and compulsorily acquire the land. 2. A summons for cross-appeal was filed by the Council seeking orders to: 1. Allow the cross appeal. 2. Set aside the determination of compensation in the amount of $2,034,957.39 and in lieu thereof confirm that the determination of compensation is the amount of $1.980,000 [a reduction of $54,957.39 awarded for disturbance and solatium by the Commissioners]. 3. Order the Cross Respondent to pay the Cross Appellant's costs. 1. The cross-appeal stated that the Commissioners erred in their decision to make an award of compensation for disturbance and solatium. At issue is the meaning in s 26 of "need not be taken into account". Appellant's submissions 1. The Appellant submitted "need not be taken into account" in s 26 does not prevent the Court having regard to the matters specified in s 55. Section 411(17) of the Corporations Act 2001 (Cth) uses similar words which were found to confer a discretion per Hostworks Group Limited ACN 008 010 820, in the matter of Hostworks Group Limited ACN 008 010 820 (No 2) [2008] FCA 248 at [19]. In Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 at [38] Gaudron J (Hayne J concurring) stated that statutes should be construed according to their natural and ordinary meaning with as much generality as possible where individual rights such as property rights are involved as in the resumption of private land. 2. Where language is ambiguous the second reading speech can be considered, per s 34(2)(f) of the Interpretation Act 1987 (NSW). That speech confirms the provision is a discretion. 3. In fact the language in s 26 is not ambiguous and can be given effect: see Leeming JA in Valuer-General v Fivex Ltd at [26]. "Need not" is not mandatory language. Provisions which employ mandatory language of "must" are found extensively throughout the Just Terms Act (a table of provisions was provided in written reply submissions handed up in Court). Council's submissions 1. The Council submitted that "need not take into account" is mandatory not discretionary. The Commissioners held incorrectly that this section confers a discretion to award compensation for solatium and disturbance. That construction of s 26 fails to give effect to the text, object and purpose of the provision. The text of s 26 provides for categories of compensation that "need not be taken into account in connection with an acquisition of land". This is to be given effect "despite anything to the contrary" in Pt 3 (compensation for acquisition of land). Accordingly, s 26 is expressly intended to have primacy over the operation of any contrary provision in Pt 3. 2. Section 55 (in Pt 3) provides for the determination of compensation by "having regard" to particular "matters". These are matters that "need" to be taken into account, subject to the operation of the Just Terms Act. It is some of those nominated "matters" that s 26 provides "need not be taken into account". If such matters "need not" be taken into account, and that command is to have primacy over the operation of anything in s 55, the textual analysis of the provision does not support the grant of a discretionary power to award compensation. Rather, the language involved imposes a limitation on the matters to be taken into account in the award of compensation. The language used is negative in form rather than of a grant or permission. In other words, the term "need" as used in context in s 26 is used in an imperative form, meaning "[a] case or instance in which some necessity or want exists; a requirement": see Macquarie Dictionary (6th Ed). 3. A contextual analysis also supports this construction. The purpose of s 26 is to settle the question of compensation payable "under this Division" specifically under "Division 3 Owner-initiated acquisition in cases of hardship". The process of acquisition under Div 3 involves different steps and different considerations to the usual course where land is acquired in order to carry out a public purpose. The land the subject of Div 3 is "designated" for acquisition as a matter of law by the operation of s 21. Only a person having the fee simple estate or who is entitled to exercise a power of sale may initiate the acquisition (s 22) and only in circumstances where ss 23 and 24 apply. That acquisition occurs "under this Division": see ss 23(2) and (4), and 25(1). 4. Further, s 25(1) designates land acquired under Pt 2 Div 3 as done "by compulsory process". That is to nominate the means by which the acquisition takes place (that is, not by transfer or sale) but does not prescribe the outcome or consequences of that result. Nothing in Pt 2 Div 3 indicates that what then occurs involves the "compulsory acquisition of land" for the purposes of s 59. Rather, that the process is owner-initiated means that there is no "compulsory acquisition of land" for the purposes of s 59. 5. A contextual analysis of the relevant provisions supports a construction of the provision that s 26 is intended to operate entirely separately from other types of compulsory acquisition, namely those to which Pt 3 apply for the assessment of compensation. 6. A purposive analysis also supports this construction. The authority of the State does not control when or how it acquires the land designated by operation of s 21. Rather, it is instead required to acquire land by actions taken by the owner under s 23. That means that the authority cannot make budgetary or pragmatic decisions about the best time to acquire the land to suit its purposes. Instead, the proponent makes a decision to require acquisition to suit his or her purposes. The owner is instead choosing, and is not forced, to incur costs involved in relocation. In those circumstances, the costs involved are incurred by choice and should be a deduction from a purchase price as for any other vendor. The owner is ensured a fair market value for the land being taken by the authority of the State, but by operation of s 26, is not able to claim such vendor costs as further payment of compensation. 7. In response to the Appellant's claim for more legal costs, any legal costs involved in making the hardship application do not fall under s 59 because: 1. first, incurring such costs necessarily predates the fact of an acquisition of land and so cannot be "in connection with" an acquisition of land for the purposes of s 59. This was the construction favoured by the Commissioners at [181] and exposes no error of law; 2. second, there is no "entitlement" to compensation in connection with the compulsory acquisition of land until the hardship application has been made and determined in favour of an applicant. That is, it is only after such application has been made and favourably determined that there will be an acquisition and, hence, costs to be incurred for a person then "entitled" to compensation. Finding on s 26 of the Just Terms Act 1. I will consider the cross-appeal first as if upheld no amount for disturbance or solatium will be payable let alone the larger amount of legal costs as disturbance sought by the Appellant in ground 7. Section 26 of the Just Terms Act was applied as if it conferred a discretionary power in Goodman v Roads and Traffic Authority [2000] NSWLEC 185 and Prasad v The Minister Administering the Environmental Planning and Assessment Act 1979 [2010] NSWLEC 193. There was no dispute about its application in Goodman. The statements in Bezzina Developers Pty Ltd v Leichhardt Municipal Council [2006] NSWLEC 175; (2006) 146 LGERA 249 at [108] that consider s 26 to confer a discretion are obiter. As the Commissioners observed at [193] the reasoning in these matters was not expansive but unless obviously wrong judicial comity suggests I should follow them. 2. I agree with the Appellant that on a textual analysis the phrase is not ambiguous and the ordinary meaning of the words "need not" are permissive suggesting that s 26 confers a discretionary power on the State or the Court on appeal. The use of "need not" is not imperative and I do not agree with the Council's textual analysis in placing s 26 in the context of Pt 3. The Appellant provided lengthy tables showing numerous sections where mandatory language was used in the Just Terms Act and this assisted in contrasting with the language in s 26. There is no need to read in the words "but can" after "need not" for the section to have a discretionary meaning. The conferral of a discretion in s 26 does not cause the section to operate contrary to s 55 in Pt 3 Div 4. 3. The contextual analysis relied on by the Council to demonstrate that the process under Pt 2 Div 3 is not compulsory does not assist its argument. The two parts Pt 2 Div 3 and Pt 3 Div 4 do operate differently and the differences are referred to in the Council's submissions. Section 25(1) however refers to acquisition in Pt 2 Div 3 being a compulsory process which, in my view, calls up Pt 3 Div 4 not the opposite as the Council essentially submitted above at par 115-116. 4. I do not agree that the purposive approach contended for by the Council on the basis that the authority of the State has no control over when and how it acquires the land supports its construction. That an obligation to acquire land under Pt 2 Div 3 may arise is a consequence of a council's decision in the first place to zone land in such a way that s 21(1) applies. While the actions of the owner commence the process under s 23, under s 24 the authority of the State (here a council) is not required to acquire land unless it is of the opinion that the owner will suffer hardship if there is delay in acquisition. As the chronology in this matter shows the Appellant applied to the Council under Pt 2 Div 3 on 10 May 2010, which was refused on 18 May 2010. The rejection of the Appellant's hardship application was rescinded by Council on 28 July 2010, identified in the judgment at [188]. There is control over the timing of acquisition by a council to a considerable extent given these circumstances. 5. In addition to the earlier Court decisions referred to above in par 120, further support for the Appellant's approach to construction on the basis of the natural and ordinary meaning of the words in the context of compulsory acquisition is found in Marshall v Director General per Gaudron J at [37]. That passage emphasises the importance of construing a statute with as much generality as possible where it concerns individual rights arising from compulsory acquisition. 6. The Council's cross-appeal fails. 7. Turning to the Appellant's ground 7 which seeks more legal costs as disturbance, the Council's construction of s 26 in relation to legal costs being limited to those in s 59(b) is correct in light of the definition in s 59 of "loss attributable to disturbance" in respect of legal costs, as identified above in par 119(a). The statutory construction submission in par 119(b) is also correct. The Appellant is unsuccessful on this ground. 8. In conclusion, the Appellant's amended summons commencing an appeal dated 14 November 2014 is dismissed. Order 1. The Court makes the following orders: 1. The Appellant's appeal under s 56A of the Land and Environment Court Act 1979 is dismissed. 2. The Council's cross-claim is dismissed. 3. Costs reserved. *************** 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: 17 August 2015