Which case won?

casea
The case for the RTA
  • We concede that the noise from the new highway does significantly impact upon the residence and that some compensation is therefore payable for this disturbance.
  • However, the evidence shows that this impact can be greatly reduced by implementing a few reasonable measures, such as retrofitting the residence with double glazed windows and exterior walls, sealing the openings around doors and implementing ventilation measures so that windows can be kept closed.
  • These measures would mean the residence does not need to be relocated further away from the new highway.
  • Irrespective though, the amount of compensation payable should be calculated based on the “before” and “after” value of the residence and not on the cost of relocation.
caseb
The case for the property owners
  • We can no longer live in our current residence as the noise of the new highway extension has made it uninhabitable.
  • The evidence does not demonstrate that the measures suggested by the RTA to reduce the impact of this disturbance are either practical or effective. If we try to sell the house, a prospective buyer would be very cautious even with those measures in place.
  • The house therefore needs to be relocated to another location on the property and we should be entitled to claim all the costs of the relocation, including the costs of constructing a new road to the new house site, the development application for the new residence, disconnection of electricity and reconnection of electricity at the new site and a new septic tank and plumbing.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case B won. You were right!

How people voted
a39%
b61%

Expert commentary on the court's decision

Digby DunnDirector
“The trial judge found that given the findings of the noise experts and the disagreement between them over whether ameliorative measures would address the noise criteria, a hypothetical purchaser would act very cautiously.”
Property owners win and both sides appeal

In the case Peak & Anor v Roads and Traffic Authority [2006] NSWLEC 3, the property owners won in the Land and Environment Court, with the court increasing the amount of compensation payable to $520,629.80, as opposed to the $429,564 that was originally offered by the RTA in its compensation notice. However, the land owners were not successful in obtaining all the compensation they had sought.

The RTA then appealed against the decision and the property owners cross-appealed, with the case going to the NSW Court of Appeal. The RTA ultimately failed in its appeal, while the cross-appeal was allowed and the matter was remitted to the Land and Environment Court for redetermination. (See Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66.)

Disagreement on value of residence and impact of new highway

While both parties agreed that the noise from the construction of the new highway would significantly impact upon the residence, their disagreement hinged essentially on the extent of that impact. This difference of opinion in turn affected the “after” value that the respective valuers attributed to the residence.

Both parties’ valuers used the “before” and “after” valuation approach to the property, with the owners of the land deeming it uninhabitable and therefore worth nil.

The RTA argued that the trial judge had made a manifest error in rejecting a comparable sale, which was relied upon by their valuer in determining the value of the residence.

However, the Court of Appeal found that the trial judge had been persuaded by the valuation evidence that the new highway would have a substantial noise impact on the residence and she was not obliged to accept either party’s valuations. The Court of Appeal found that no error of law or valuation principle had been demonstrated in her determination.

“Hypothetical purchaser” likely to seek advice of acoustic expert

One of the most significant issues in the case was whether the noise generated by the proposed new highway would make the residence uninhabitable. The RTA argued that the Land and Environment Court should not have had regard to the land owners’ acoustic expert’s evidence, as it was based on findings of the experts made after the acquisition and was therefore not properly admissible.

The trial judge had used this evidence in assuming uninhabitability and in considering what a “hypothetical purchaser” of the residence would do. She found that given the findings of the noise experts and the disagreement between them over whether ameliorative measures would address the noise criteria, a hypothetical purchaser would act very cautiously.

The Court of Appeal rejected this ground of appeal, agreeing with the trial judge that a hypothetical purchaser of the residence would be likely to obtain the advice of an acoustic expert, who would have advised whether or not the residence was indeed inhabitable, and if it was, what ameliorating measures would be necessary.

Compensation for structures on acquired land

Both parties’ valuers had agreed that the dairy bails/show complex on the acquired land had an “after” value of nil (given it was demolished), but had differed on the “before” value. As the RTA’s valuer had not been able to inspect the complex prior to its demolition, the trial judge accepted the property owners’ valuer’s “before” valuation of $40,000.

However, she ultimately found that it was appropriate to award compensation under section 59(f) of the Just Terms Act based on the “replacement” value, found to be $64,000, rather than the “before” valuation of $40,000. The RTA submitted that the approach adopted by her Honour led to overcompensation in the sum of $24,000.

As the land owners had not sought the cost of replacing the complex, it was agreed there should be a correction to the compensation awarded to the amount of $24,000 claimed by the land owners.

Property owners succeed in cross-appeal

The land owners raised three matters by way of cross-appeal. Their residence was located on the remaining land which had not been acquired by the RTA (“the residue land”). The first two grounds of appeal related to the relocation costs that the land owners had sought in moving their residence on the residue land.

They contended that the trial judge erred in her interpretation and application of section 59(f) of the Just Terms Act – “any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition”.

The land owners also argued that the trial judge erred in her interpretation of the provision of section 59(c) of the Just Terms Act – “financial costs reasonably incurred in connection with the relocation” of the people whose land had been acquired – in regard to only allowing relocation costs from the acquired land.

Finally, they contended that she had erred in law in relation to aspects of the noise problems, which was found not to be the case by the Court of Appeal.

The land owners argued that because the use of the residence was so intricately linked with running the business on both the acquired and residue land, the expenses they claimed in relocating the residence did fall within section 59(f). The Court of Appeal allowed these grounds of appeal and remitted the matter back to the Land and Environment to make the necessary findings of fact to support the land owners’ section 59(f) claims, if appropriate.

The land owners also contended that the trial judge had erred in law in determining that the provision of section 59(c) of the Just Terms Act related solely to relocation costs only from the acquired land. The Court of Appeal agreed she had erred in her interpretation of section 59(c), finding that if a person is required to relocate because of injurious affection caused by the acquisition, and in doing so, incurs costs not otherwise reflected in the “before” and “after” valuation, then the claim can be made under section 59(c).

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