Kelly v Western Australian Planning Commission [2006] WASC 208

Kelly v Western Australian Planning Commission [2006] WASC 208 - WASC 2006 case summary — Zoe

[214]

100 With respect to EPP, cl 10, I note the evidence of Mr Parker, an officer of the Waters and Rivers Commission at the time, that the "building envelope" under the plaintiff's proposal would extend into the "wetland", represented by the boundary of the "wetland dependent vegetation", by which I understand Mr Parker to mean the extent of Lake Neerabup as the Commission approached it (cross-examination, TS 423). Later I consider the evidence on locating that boundary of the Lake as so understood. However, I note that the EPP defined the Lake as "those lakes on the Swan Coastal Plain that are shown coloured in green on Department of Land Administration Miscellaneous Plan No 1815" (cl 4(1)). The lakes are so defined by reference to aerial photographs, taken in the summer, of standing water (cl 4(2)). As I will shortly indicate, the approach to wetlands as used by Commission goes to a broader area. The Plan referred to (defendant's book of documents, Exhibit 39, page 94) shows, as seems to me to be confirmed by the plan for the dwelling under the plaintiff's proposal (Exhibit 39, page 98), an area well short of the proposed building area, even allowing for its projection lakewards by further works such as parking, that projection being a matter to which Mr Parker called attention in his evidence. Mr Parker in his evidence also indicated there was an "anomaly" between the "mapped EPP boundary and the extent of the wetland actually present upon Lot 37" (Exhibit 31, par 4). This "anomaly" apparently arose out of "problems in the mapping used by that policy" (cross-examination, TS 420 - although there is some confusion in the later cross-examination as to whether the question related to the boundary for the purpose of the buffer policy; and re-examination, TS 425). Further, as Mr Parker acknowledged, "in any event" the Commission "maintains that the extent of the wetland dependent vegetation will prevail as the wetland boundary" (Exhibit 31, par 4). On this basis, I do not consider Mr Parker's evidence establishes that the plaintiff's proposal would have required an authorisation to avoid a breach of EPP, cl 10.

[425]

"Just to summarise, you [sic] report is obviously quite lengthy but in a brief summary can you say what your opinion is in relation to subdivision potential of lot 37 as at 2000?---The views I expressed were that there was no chance of lot 37 having any subdivision potential in view of the WAPC's policies, the council's position with respect to their various policies and their interim rural policy. Based on my experiences at the City of Wanneroo four hectares is the minimum lot size and an appeal would be the only grounds upon which an application may have been successful and my view is that the chance of an appeal on this land was pretty remote - successful appeal would have been pretty remote.

Does that opinion depend - sorry. What is the effect on your opinion of the existence of the reservation on lot 37?---I don't think the reservation would have had any bearing because in the case of an appeal, the land lost as a result of reservation is generally taken into consideration as part of the lot area to approve a subdivision. The problem here is that four hectares is the minimum lot size. This lot is four hectares and has no potential with or without the reservation.

Sorry. Can I just clarify - what did you say the minimum lot size for subdivision was?---Four hectares.

For a subdivision?---Four hectares in the rural zone is the minimum lot size. There are a number of policies that were about at the time, starting back in 1977, when this area was regarded as a 20-hectare minimum lot size area. The city promoted that the linear chain of lakes that Neerabup is one of should be considered within the four hectare minimum lot size because most of the lots were fours, sixes and eights. In time the commission accepted that principle and subsequent policies generally reflected the four hectares as the minimum that would be accommodated. In fact the minimum throughout the city, through any of the rural areas in the city - four hectares was the minimum outside of special rural zones which are a different category."

[529]

"You're saying that is justified on the basis of what?---Now, I'm glad you asked me because the whole exercise on 8 November 2002 was to treat the property, taking the position that the property could not be subdivided. Now, lot 50 has its own title. It has its own area. It has its own lot area. It is a subdivided lot. You're asking me to compare a subdivided lot with the unsubdivided residue of lot 37.

You have one lot that is in size 2.004 hectares?---Yes.

Which you would give a value of $17.60 per hectare to?---It's what the sales showed.

Which is $343,886. Then you have another lot that is 2.619 hectares?---Yes.

That you say someone is only to pay $10.84 - - -?---$10.40.

$10.40?---In the unsubdivided state. It's not the same area as lot 50. It's quite a bit larger than lot 50.

So someone is going to pay $277,000 for 2.6 hectares fronting Wanneroo Road, or they are going to pay $343,000 for 2.04 hectares?---Yes. Another way of looking at it

Is that correct? Someone who is going to buy lot 50 is going to pay $343,000?---They did.

Yet you're going to go down the road and buy a slightly larger lot and you're going to pay $277,000 for it?---Firstly, it is not slightly larger. It is a fair bit larger. Secondly, it is in the unsubdivided state and it has an odd shape.

There's a portion of the lot though that is identical in shape to lot 50?---That's correct.

So you are getting lot 50 and a little bit more land?---Yes.

According to you, you're going to pay $66,000 less for more land that has an odd shape?---Yes. Probably what I could do is - out of that 2.619 hectares, I could take out the same area as lot 50 and give it the full value of $16.

$17.16?---Yes, give it that value. Then the balance of the $277,000 would equate to the land behind.

What would that do to your before and after scenario? I suggest to you, it would get approaching - can you undertake that exercise?---Yes. You will have to give me the area of lot 50 again.

The area of lot 50 is 2.004?---And the figure was 17.16?

Yes?---That's a figure of $343,000.

Yes. Then someone is going to pay something for the additional - well, even if they pay nothing for the additional - let's work out what it is: .61 hectares?---Yes.

You agree that they will pay some sum for that additional?---Certainly.

So what would they pay for that?---What would they pay for that? It's probably in the vicinity of $10.40 a square metre."

[616]

"Mr Paterson, you were explaining to the court the basis for you selecting $30,000 per hectare for the one-hectare portion of wetland, and can you continue to do that?---You know, just because it's not mentioned in the report - I mean, I've been valuing properties for over 20 years and I have a lot of experience with various grades of property and I consider that to be a figure that represents a reasonable figure that somebody would rather have the land than not have the land, or in my opinion where it would sit in the market as of - I mean, you can't say the land is worth nothing, it has to be worth something, and to my opinion that's - you know, based on my experience, that's where it would sit in the echelon of property values as much as anything. I mean, I can try and substantiate it with other sales but just because it's not in the report doesn't mean to say that it's not in my head and is experience which hasn't been demonstrated exactly in the report. A lot of these things are value judgments where you have to use the limited evidence you have at the time to make a reasonable assessment.

In terms of your - you have mentioned lot 6 Lake Road. What involvement did you have with that sale?---I had previously valued that for the department, for the Ministry of Planning.

Perhaps you could go to volume 1 of the defendant's book of documents?---Page?

Page 1?---The map?

Yes, the aerial photograph. Can you just identify where lot 6 Lake Road is in that?---It's towards the top of the page, the second lot south of Wattle Avenue with lot 80 adjoining immediately on the north side of it. It's in the lake land on the west side of Lake Road. Lake Road is not shown on that map but it's a small gravel track that runs down on the east side of lot 6 around the edge of the lake.

In terms of that property, how does that property compare to the subject land?---As you come along the road front, there's a fairly steep rocky drop down from the limestone track that runs down there. There was an argument that there was a small portion of land - probably you could say that also would be considered to be buffer land. There was an argument or a possibility that a house may have been constructed on that portion, so there was a bit of added value for that actual breakaway area, the actual sloping area from the road which is quite steep and rocky limestone, rocky as it runs down, and then it goes down to the lake bed which is virtually identical to the wetland on the subject property, being all of the same contour - flat, with swampy, reedy-type vegetation on it. I haven't seen that in the middle of winter but I would assume that in the same middle of winter it would be totally inundated, the same as this from the aerial photograph. There is very little buffer land, only a small strip that could be possibly considered to be of buildable use or something to that effect."

[619]

"Can I take you please to exhibit 2, schedule of comparable sales? Perhaps before taking you to that document, you say you relied, did you not, on lot 6 in establishing the wetland value?

SIMMONDS J: I'm sorry, what was that question again, Mr Wittkuhn?

WITTKUHN, MR: I asked Mr Paterson whether he relied on lot 6 - lot 6 Wattle Road. Is that right, Mr Paterson?---Lake Road.

Lot 6 Lake Road, as establishing the wetland value. Correct?---Correct.

If you would go now to the schedule of comparable sales, second last page - perhaps again I will ask one more question, Mr Paterson, before I ask you to look at that. You agree that in determining comparable sales you always look to the date of contract rather than the date of transfer?---I had prior knowledge to this because I had been valuing it prior to the date of sale, but, yes.

Because lot 6 in the schedule as shown as sale date July 2001. Correct?---Correct, yes.

So you couldn't have been relying on lot 6 Lake Road as a sale per se in April 2001 when you gave your valuation report, exhibit 32?---Not on the sale date, no, but I was aware of it prior to that sale date.

You used something that you were negotiating on in another matter as a basis for arriving at a wetland valuation in this matter?---I wasn't negotiating on it personally but I knew the negotiation was under way.

Did you apply a wetland, dryland direct comparison approach to lot 6 Lake Road?---We did.

When you say 'we', who is 'we'?---I did, yes; my company, yes.

Your company, yes. Where in turn did you draw the wetland dry land valuations for that?---Actually I went

Just general experience?---No, I actually went further up here to Dayrell Road and around the corner and these ones here and I think there is - there is a negotiation there on that lot 2 on Dayrell Road there, 250,399.

So when you say negotiate, you mean at the time of preparing the lot 6 Lake Road valuation you were relying in turn on another as yet unconsummated negotiate?---No; no, that one lot 3 Dayrell Road, it sold at 250,000 in March 99.

In kilometres how far is that from Lake Road?---It's 200 metres, .2 of a kilometre - no, probably 300 metres, yes, 250.

Is that in Neerabup?---It is, yes.

Is it in the Lake Neerabup valley?---It is. It extends on. You probably can see it in that wetland.

That's okay, Mr Paterson. I don't want to go into too much detail here?---It had a house on the front of it as well.

In any of these negotiated sales that you have mentioned, lot 6 Lake Road, lot 800 or the one 300 metres north, were the owners represented by lawyers in the negotiations?---Well, that one in Dayrell Road, I just went up and saw the chap and he was quite happy to let me go and have a look around the place and tell me what his

Were they represented by lawyers? Were any of those three represented by lawyers?---I don't know that's even a Ministry of Planning sale. I think that was an outright purchase. I don't think any lawyers had to do anything and the other one - which was the other one you're talking about?

801 or lot 6 Lake Road?---I believe - I wasn't dealing - I was just doing the valuation. I don't

You don't know whether they were represented by lawyers?---I don't know, no.

Do you know whether they obtained their own valuations in either case?---I don't know, no."

[691]

Even if that test is applied to the additional components of value identified by the trial Judge in the present case, none of them qualifies.

The cost of preparing the development application represents an amount expended to produce information about the use of the land that might have been permissible absent the reservations. It is the kind of expenditure identified by Callinan J in Boland v Yates at [271] - [273] which demonstrates the potential of the subject land. It is therefore reflected in the market value. There is nothing in that expenditure reflecting a capacity of the appellant to exploit the land that is exclusive or almost exclusive to the appellant. See also St John Ambulance Association of Western Australia Inc v East Perth Development Authority [2001] WASC 85; (2001) 114 LGERA 112 at [87] - [99]. This is even more clearly the case for the holding costs of the land and interest on the sale price until settlement, and the costs the appellant would have incurred in buying a replacement property.

Those costs and that interest do not relate to attributes of the land, but rather, as the trial Judge acknowledged, to the particular sale transaction itself. They represent matters that do not go to increasing the value of the land, but rather to compensating the vendor for loss on delay in completion of that transaction and from being forced to find replacement property. The principle of s 36(2a) of the Scheme Act is that compensation is to be determined by fixing a price by reference to value as at the stipulated date, disregarding the stipulated items, and by the mechanisms indicated. That principle does not encompass compensation for other loss or damage, whether from dispossession or otherwise. Even in relation to resumption, the authorities from Spencer's case forward have clearly distinguished between claims for the value of the land and claims for "damage otherwise": Isaacs J, in Spencer's case at 438, quoted by Callinan J in Boland v Yates at [355]."

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Judgment (702 paragraphs)

Kelly v Western Australian Planning Commission [2006] WASC 208 (18 September 2006)

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