Minister for Aboriginal Affairs v Peko-Wallsend Ltd

Court of Appeal (NSW)|1997-04-02|Before: Newman J, Mason P, Bignold J

COUNCIL OF THE CITY OF GOSFORD vy CUNNINGHAM & ANOR; COUNCIL OF THE CITY OF GOSFORD vy CUNNINGHAM & ANOR

MASON P, GROVE and BROWNIE AJJA 2 April 1997, 29 April 1997 [1997] NSWCA 81

Administrative law - judicial review - Valuer General's determination - whether failure to take into account relevant considerations - whether Wednesbury unreasonableness

On appeal, the appellant sought to argue that the determinations were invalid on the grounds of: (i) failure to take account of relevant factors (namely, Flood study and Wetland study); and (ii) "Wednesbury" unreasonableness.

The reasoning process of the Valuer General in reaching the determinations did not evince Wednesbury irrationality or a failure to have regard to relevant matters.

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; Minister for Immigration & Ethnic Affairs v Wu (1996) 185 CLR 259; Associated Provincial Picture Houses v Wednesbury Corporation [1948] | KB 223; applied.

CCSU v Minister [1985] AC 374; Attorney General (NSW) v Quin (1990) 170 CLR 1; Minister for Immigration and Ethnic Affairs v Teoh (1995) 1 83 CLR 273; Wouters v DCT (1988) 20 FCR 342; Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 16; referred to.

Mason P These appeals were heard together. Each involves a challenge to the validity of a determination of value made by the first respondent, who is the Valuer General for New South Wales ("the Valuer General').

On 9 September 1994 the appellant Council acquired by compulsory process Lot 2 in Deposited Plan 553146, then owned by Mrs Seeto the respondent in one of the appeals and Lot 5 in Deposited Plan 809307, then owned by Pearl Pastoral Pty Ltd the respondent in the other appeal. Lot 2 is 3.886 ha and lot 5 is 2.403 ha. At all material times the two lots were zoned 6(e) "Proposed Open Space" pursuant to the Gosford Planning Scheme Ordinance. C113 of that Ordinance entitled the owner of any land within that zone to require the responsible authority to acquire the land.

The Valuer General determined the compensation to be offered in respect of Lot 2 to be $504,700 (of which the market value component was $500,000); and the compensation for Lot 5 to be $344,400 (of which the market value was $340,000). In each case the Determination was supported by a detailed Report prepared by Mr Lynar, a registered valuer. The two Reports expose the Valuer

General's investigation and reasoning processes. So too do the detailed files relating to each valuation that were put into evidence. Each final Determination had been preceded by one dated 30 August 1994 (ie 9 days earlier) which the Valuer General had prepared at the request of the Council at the stage when the acquisition was proposed.

The Council initially lodged Notices of Objection, purportedly pursuant to s38 of the Valuation of Land Act 1916. In an earlier case between the parties to the appeals before us, this Court upheld the ruling of Bignold J to effect that the Valuer-General's Determinations were not susceptible (at the suit of the Council) to the objection and appeal processes under the Land Acquisition (Just Terms Compensation) Act 1991 ("the Just Terms Act") or the Valuation of Land Act 1916: see Gosford City Council v Valuer-General & Anor (1996) 90 LGERA 413.

This left the Council with the more onerous task of moving the Supreme Court to quash the Valuer General's Determinations on administrative law principles. The jurisdiction of the Supreme Court to entertain such an application is not in issue.

As pleaded in the two sets of proceedings which were heard concurrently, the Council asserted that the Determinations were bad in law because the Valuer General had failed to take account of relevant factors and/or because they were unreasonable according to the well-known "Wednesbury" principles. The attack was based upon the reasoning exposed in the Valuation Reports accompanying the Determinations and the information disclosed in the rather bulky files of the Valuer General relating to the two lots. The appellant correctly accepted that it bore the evidentiary and persuasive onus: see Cannock Chase District Council v Kelly [1978] 1 WLR 1 at 6; R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 193.

Newman J rejected the challenge to each Determination. He considered that the Council had not made good its claim that the Valuer General had failed to have regard to matters which he was obliged to take into account. The case of Wednesbury unreasonableness was also dismissed.

The appeal reagitates the issues fought below. The appellant also complains about the rejection of certain evidence by Newman J.

In my view Newman J was correct to reject the plaintiff's claim. I would be content to adopt his reasons. Nevertheless, out of deference to the arguments put before the Court of Appeal, I shall endeavour to summarise those arguments and to express in my own words my reasons for rejecting them.

As regards failure to take into account relevant considerations, the party challenging the decision must point to matters which the decision-maker was obliged to take into account: see Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 at 375; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-42. A challenge on such grounds must not be allowed to drift into an attack on the merits of the impugned decision: Minister for Immigration & Ethnic Affairs v Wu ("Wu's Case") (1996) 185 CLR 259 at 272.

Judicial formulations of the Wednesbury test include: "a decision so unreasonable that no reasonable authority could ever have come to it": Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1 KB 223 at 230 per Lord Greene MR; "a decision which is so outrageous in its defiance of logic or of accepted moral standards that no reasonable person who had applied his mind to the question to be decided could have arrived at it":

WRQUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR; COUNCIL OF TH CITY OF GOSFORD v CUNNINGHAM & ANOR (Mason P)

CCSU v Minister [1985] AC 374 at 410 per Lord Diplock; "a purported exercise of the power so unreasonable that no reasonable repository of the power could have taken the impugned decision or action. The limitation is extremely confined": Attorney General (NSW) v Quin (1990) 170 CLR 1 at 36 per Brennan J; or "a decision to which no reasonable person could come, so it is exercised in an improper manner if the decision-maker makes his or her decision in a manner so devoid of plausible justification that no reasonable person could have taken that course.": Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 290 per Mason CJ and Deane J.

It is one thing to say that there may have been a preferable course available to the decision maker, but it is another thing to say that the course adopted was unreasonable in the Wednesbury sense: Wouters v DCT (1988) 20 FCR 342 at 352 (Full Court). Not every reasonable exercise of judgment is right and not every mistaken exercise of judgment is unreasonable. There is a band of decisions within which no Court should seek to replace the individual's judgment with its own: Re W (an Infant) [1971] AC 682 at 700 per Lord Hailsham LC, cited in Wouters (supra).

The appellant submits that the Valuer General failed to have regard to relevant material which he was obliged to take into account. Two particular matters were identified:

(1) a report entitled "Bangalow Creek and Cut Rock Creek Flood Study" ("the Flood Study") that had been prepared by Webb, McKeown & Associates consulting engineers which was adopted by Council on 23 May 1993; and

(2) a "Wetland Management Study" adopted by Council on 14 September 1993 ("the Wetland Study").

It is contended that the Determinations were vitiated by failure to take account of the (very limited) development potential said to have been revealed in those Studies; and also that this was so irrational as to lead to invalidity.

The significance of these Studies is said to be that the development potential of the two Lots is minimal because the Council would have justifiably refused development consent quite apart from acting as a step in acquiring the land for the purpose identified by the restrictive zoning. This negative characteristic of the land was a factor which the hypothetical prudent purchaser would take into account. Because it was a consequence of the physical nature of the land it should have been taken into account by the Valuer General and not excluded in purported reliance upon the Pointe Gourde principle.

It was common ground that the Valuer General had to comply with the requirements of the so-called Pointe Gourde principle in determining the market value of the land on the date of its acquisition. The principle requires the body assessing compensation for resumption to ignore any alteration in value arising from the public works for which the land was resumed. It is discussed in Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196. Strictly speaking, it is s56 of the Just Terms Act which states the principle in the present context, but it is not suggested that the statutory embodiment of the principle varies its content from that discussed in the case law.

The appellant's essential attack on the Determinations was that the Valuer General, in purporting to give effect to the Pointe Gourde principle, had gone too far and ignored entirely the compelling evidence revealed in the two Studies, thereby failing to have regard to the (minimal) development potential of the land. The appellant relied upon The Crown v Murphy (1990) 64 ALJR 593. There, the

High Court said (at 595) that "a characteristic or attribute of the land which affects its value must be taken into account in the assessment of compensation even if the planning restriction which is a step in the process of resumption is dependent upon or directed to that characteristic or attribute". That case related to land adjoining a world-renowned turtle rookery that was resumed by the Crown in right of Queensland for the purposes of an Environmental Park. The resumed land was zoned "Rural". An application to rezone the land to "Residential A" had been refused by the local authority prior to resumption. The majority of the Full Court of the Supreme Court of Queensland had ruled that compensation for resumption was to be assessed without regard for the possible impact upon the turtle population of the sought-after rezoning or the subdivision that might follow it.

In ruling that the Full Court erred, the High Court held that the Land Appeal Court (whose decision had been overturned by the Full Court) had correctly considered that the existence of the turtle rookery adjacent to the land was "an attribute of the land which affected its value to the extent that the existence of the rookery itself militated against the rezoning" (at 595). Since the Land Appeal Court had considered whether the local authority would have refused the rezoning out of regard for the rookery, quite apart from the resumption, it had not erred in law; and the Full Court was not entitled to overturn its assessment of compensation of land value on the basis of a Rural zoning that excluded subdivision for intensive building allotments.

In the present case, the appellant contends that the Valuer General fell into error similar to that of the Queensland Full Court as identified by the High Court. It is contended that the Valuer General failed to have regard to the cogent evidence in the two Studies which identified the land as having flooding and ecological attributes that would have meant that the Council, acting reasonably, would have refused development consent regardless of its desire to resume and not as a step in the process of resumption.

The critical issue in this appeal therefore centres upon the way and the extent to which the Valuer General (in the appellant's words) "set aside" the two Studies.

The Flood Study noted that the Gosford City Council had adopted the 1% AEP Flood as the designated flood. It sought to detail hydrologic and hydraulic investigations undertaken to determine the "design flood level" (ie susceptibility to flooding in the anticipated 1 in 100 year flood) at any one location. At p(iii) of the Report it was stated that:

"The accuracy of the design flood level at any one location is largely dependent upon the availability of nearby reliable historical flood data, the survey data and to a lesser extent upon the accuracy of the design rainfall intensities. Where reliable historical flood data are available the accuracy of the design levels on Bangalow and Cut Rock Creeks is considered to be +/- 0.3m. Where no such data is available the accuracy is only likely to be +/- 0.5m.

Both Gosford City Council and Wyong Shire Council have adopted the 1% AEP Flood as to designated flood, but they have differing freeboard standards. The freeboard for Gosford City Council is 0.5m, which is that recommended in the Floodplain Development Manual."

The Flood Study showed lot 2 to be entirely within the 1% probability of flood (prone to flooding in the anticipated 1 in 100 year flood). If one accepted as a given the Council's adoption of the 1% flood line as the equivalent of the

WRQUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR; COUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR (Mason P)

minimum height suitable for residential development, then, according to the appellant's argument, the whole of lot 2 should have been treated as unsuitable for such development and valued accordingly in the light of the principles discussed in The Crown v Murphy. The Valuer General's failure to value accordingly must, so the argument goes, have occurred on the basis that the Valuer General failed to have regard to the findings of the Flood Study.

Alternatively, it is said to be irrational to have disregarded those findings. The appellant Council also submits that the Flood Study locates the whole of lot 5 within the 1% AEP flood contour. Accordingly, a similar case is advanced for attacking the Determination in relation to lot 5.

In my view there are several answers to these submissions:

(1) Nothing in the Just Terms Act required the Valuer General to have regard to the Flood Study in terms. At its highest, it was compelling and recent evidence of a vital physical characteristic of the land, known to Council and obviously relevant to any development proposal on affected land in accordance with the principles derived from The Crown v Murphy.

(2) The Valuer General obviously considered the potentiality to flooding to be highly relevant, for the very reason that it affected land value. There is clear evidence in the Determinations themselves and in the files indicating that this was recognised as a relevant factor. For example, Mr Lynar discussed with David Kettle, who was the landowners' planning consultant the extent and cause of flooding potential and the possibilities, cost and feasibility of raising the land. Mr Kettle was asserting that 27 building blocks could be created on lot 2 above the 1% flood line. Mr Lynar queried the accuracy of the Flood Report with its principal author, Mr Dewar of Webb, McKeown & Associates and apparently obtained both oral and written acknowledgment from him that some of the land on lot 2 could be above the 1/100 year flood level, or at least less than 0.5m below it. It is obvious from file notes and correspondence that there was a real issue about the accuracy of the Flood Study, as well as the possibility that its conclusions about the subject land could be avoided by filling the land and/or some waiver of Council policy adopting the 1% AEP flood as the designated flood. Representatives of both "sides" interviewed by Mr Lynar suggested that the truth of the contour levels would only be known for certain if a survey was commissioned. Indeed one was, for lot 2, and the survey (dated 16 August 1994) made its way into the Valuer General's files. Its interpretation was not the subject of any submission in the appeal. However, handwritten markings on the survey suggest that it was interpreted as disclosing that some of lot 2 was above 1/100 year flood contour. The possibility of a detention basin being constructed as a means of alleviating the flood risk was also discussed by Mr Lynar with a Council officer.

(3) The Flood Study is actually mentioned in the Valuation Report for lot 2, and in a file note of Mr Lynar relating to lot 5. More importantly, both Valuation Reports reveal that the Valuer General had regard to the extent of low lying land in the respective lots and its susceptibility to flooding: see the description of "Topography" in each Report. The "underlying zone" (ie that which would be relevant if one disregarded the current zoning for "Proposed Open Space") for lot 2 was considered to be "Part Restricted Development 9(a) and Part Residential 2(a)". The latter zone designated land capable of development. As regards lot 5, there are significant changes between the Valuation Report for the Proposed Acquisition (dated 30 August 1994) and the Valuation Report for the Acquisition itself (ie as at 9 September 1994) which are explicable only on the basis that the

Valuer General was actively considering the extent of irremediable flood affectation and its impact on value. (The market value was adjusted for $450,000 down to $340,000; and the later Report adds: "The valuation is made on the basis that approximately 4,000 square metres of the site has immediate potential for commercial development after this part has been suitably filled. The potential development from the remainder of the site is clouded by environmental considerations due to low lying nature of the land'".) A typed sheet evidencing the calculation of the $340,000 figure reveals an allowance of $160,000 for filling and $40,000 for drainage.

(4) L agree with counsel for the appellant that the Valuation Report for lot 2 is confusing in that, in the description of the topography, there is an unqualified statement that the Flood Study shows the land to be entirely within the 1% probability of flood. One might have expected some qualification at this point of the Report if the Flood Study was not accepted as conclusive. However, an administrator's decision is not to be "scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed": Wu's Case at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. A possible explanation is that the Flood Study itself allowed for a 0.5m freeboard in the City of Gosford in the extract I have quoted. Alternatively, the Valuer General may have thought this "fact" of topography not to have been as negatively conclusive as the Council now argues. Elsewhere in the same Report there is a statement that the underlying zone is considered to be Part Residential 2(a). In addition, the following factors were stated to be relevant in the part of the Report containing the "Basis of Determination":

"1. The land is in an area in which a large amount of land has been rezoned residential use and a subdivision development has taken place.

Disregarding the present open space zone it is considered a prospective purchaser would envisage part of the land to have residential subdivision potential.

Any potential subdivision would have to take into account the topography of the land restricting the amount of subdivision and having to conform to f fling and drainage requirements."

In my view the reasoning process as disclosed does not evince Wednesbury irrationality or a failure to have regard to relevant matters.

(5) The Council is unhappy about the conclusions reached by the Valuer General and the apparent willingness to discount the Flood Study and its implications in certain respects. However, this is no more than a complaint about the factual assessment ultimately reached by the Valuer General. It is well established that more is required in order to make good a challenge based on administrative law principles. The Council argues that there is no rational basis for rejecting the recent adopted Flood Study. In my view, the evidence which I have summarised shows that such an argument is doomed. Both in terms of the processes adopted by the Valuer General and the "bottom line" outcome, the Determinations cannot be challenged according to the exacting standards of Wednesbury irrationality to which I have made reference. Once that is accepted, what remains is no more than dissatisfaction with the merits of the decision embodied in the Determinations, and this is something far removed from a case indicative of failure to have regard to a relevant factor.

WRQUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR; COUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR (Mason P)

The appellant Council relies upon the following statement by Newman J as the springboard of its case that the Wetland Study was wrongly dismissed as irrelevant by the Valuer General:

"The wetland study was excluded by the Valuer-General in that it denoted the subject land as wetlands which, for environmental and ecological reasons, was suitable for acquisition by the plaintiff In so excluding the Valuer-General was applying the decision of the High Court in the San Sebastian case... in that the denotation of the subject lands as wetlands was a step in the acquisition of the property by the plaintiff."

The contention is that the proper application of the San Sebastian/Pointe Gourde principle did not require the whole of the Wetland Study to be put aside. Again citing The Crown v Murphy, the appellant submitted that there was no evidence to support the required nexus between the resumption scheme and the Wetland Study, for the following reasons:

(b) The acquisition scheme which gave rise to the acquisition of the land arose solely by virtue of the operation of cll3 of the Gosford Planning Scheme Ordinance and was undertaken at that time as a result of a request made by the owners of the land acquired;

(d) The Wetland Study did no more than identify the physical characteristics of the site;

(e) The Wetland Study imposed no restrictions on the use of the land;

(f) The Wetland Study made recommendations to Council in respect of a number of sites, and did not put in place a "resumption scheme" by which the sites were or could be acquired, nor did the Study relevantly facilitate or advance the acquisition scheme.

The exclusion of the Wetland Study was said to lead to the consequence that the Determinations were fatally flawed because this led the Valuer General to put out of his mind consideration of the (very restricted) likelihood of Council approval for the development of the two lots. The Wetland Study showed, so it was submitted, that the Council was (with justification) set upon preserving the lots in their pristine state.

I would reject these submissions for the following reasons:

(1) The Wetlands Study is an attempt to map out wetland vegetation for the purpose of establishing a priority list of sites of community value which were not in public reserve. To that end, the Study recites a Council resolution of 5 December 1989 that:

"A. A comprehensive wetland study be undertaken by the Director - Planning The study to include a priority program similar to the Coastal Open Space System (C055) program of acquisition and/or dedication of significant lands for community purposes.

B. Criteria be established to determine if a wetland is a priority for acquisition or can be part of a development/dedication option."

Whilst the Study documents the flora and fauna of individual locations, its prime focus is to do so in the context of establishing a priority list for acquisition by the Council.

(2) The appellant's submissions misinterpret the Valuer General's approach to the Wetland Study. (Perhaps Newman J shared this misconception, as indicated in the first sentence of the passage which I have described as the springboard for the appellant's argument in this part of the case.) I do not read the Valuer General

as having "set aside" the facts disclosed in that Study. There is, in fact, no reference to the Wetlands Study in the Valuation Report for lot 2. The corresponding Report for lot 5 says this:

"In determining the market value of the land any steps in the resumption process have been disregarded. Action to rezone the land from Rural to Open Space under LEP 59 in Government Gazette dated 4 June 1982 is seen as a step in the resumption process and is disregarded. Likewise denoting the site as wetland in DCP No 8 and the inclusion of the parcel in a Wetland Management Study recommending the preservation of the site as a swamp is also seen as being part of the acquisition process and is disregarded." (emphasis added)

In my view the third sentence means no more than that the valuer excluded the inclusion of the subject land within the program of acquisition which was the focus of that Study. The description of the topography of the land in lot 2 describes the land as "a swamp [which] is known as a wetland area. Trees and scrub on the site include swamp mahogany and paperbark (melaleuca)". Handwritten notes of Mr Lyner in the file also reveal awareness that the area is "valuable to waterbirds, reptiles, amphibians". This view is reinforced by the evidence already adverted to in my discussion about the Flood Study showing that the Determinations and the preliminary word leading up to them were closely concerned to identify the likelihood of Council approving the sites for redevelopment.

At trial, the Council also put into evidence a letter dated 20 October 1994 from the Valuer General to the Council. Relevantly it states:

"Tn the case of these properties at Lisarow it becomes necessary to set aside the Zonings on the lands and determine alternative zoning, and development potential that would have applied if resumption for the Council's " Wetland and Flood Management Study" had not applied to these properties."

This further confirms the correctness of the Valuer General's limited rejection of the Study.

I therefore agree with Newman J's conclusion that the physical characteristics of the land were taken into account, and that the Wetlands Study was used for this very purpose.

(3) As already indicated, the Valuation Report for lot 2 contains no express statement about excluding any aspect of the Wetlands Study. The appellant relies upon this as evidence of the fact that the matter was put entirely out of the Valuer General's mind. However, the respondents argue that the Wetlands Study never touched lot 2, or at least was not shown to have touched lot 2 by the appellant which bore the onus of proof. This contention was developed in detail by Mr Webster of Counsel in the course of argument in the appeal. In my opinion it is not necessary to resolve this matter (or the evidentiary argument based upon it, relating to Mr Chestnut's rejected affidavit) because the Valuer did in fact have regard to anything of relevance in the Wetlands Study. At least, his failure to use its information as the basis of a lower valuation is not shown to betoken an error of such magnitude as to evince failure to have regard to a relevant matter, or Wednesbury irrationality.

(4) In any event, the portion of the Wetlands Study dealing with (at least) lot 5 does not justify the conclusion that the Valuer General was required to take its contents into account. As I have said, the purpose and contents of that Study tend clearly in the opposite direction, because they reveal that the Wetlands Study is intimately considered with the acquisition process itself.

WRQUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR; COUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR (Mason P)

REJECTION OF EVIDENCE The appellant also complains about the rejection of four sets of nearly identical affidavits, one set being filed in each proceedings. The deponents were Robert Allan Eyre, Gary John Chestnut, Michael John Dick and Robert Neil Stanisland.

Mr Eyre was a senior town planner employed by the Council. He swore a separate affidavit relating to each lot. He was familiar with the land and its zoning. Much of his affidavit evidence went towards describing the zoning, setting out relevant parts of the two Studies and proving that the information in them was generally available to the public. After referring to the Flood Study and Council's policy about the 1% AEP flood plain, he states (in paral9 of the lot 2 affidavit):

"Given the above flooding constraints and the environmental characteristics of the land, it is my opinion that at the date of resumption, the highest and best use to which the land could be put is for the purposes of conservation with a building right attaching to the land confined to that part of it which has been historically filled in the south-western corner. If an application for development consent for a dwelling house were made to the Council at the date of the resumption, I would recommend to the Council that the Council give consent to such a development subject to conditions necessary for the protection of the environment, but for no other development.

Mr Eyre's affidavit relating to lot 5 is virtually identical in its general contents.

"Given the above flooding constraints and the environmental characteristics of the land, it is my opinion that at the date of resumption, the highest and best use to which the land could be put is for the purposes of conservation or agriculture with a building right attaching to the land on the assumption which I am prepared to make given the size of the parcel that a flood free building site could be found or could be established in such a way as to avoid interference with the operation of the 1% flood plain. If an application for consent to such development were made to the Council I would be prepared to recommend that a consent to such development be given, but to no other development."

It appears that Newman J had before him the lot 2 affidavit when he rejected it for reasons set out in a judgment dated 11 March 1995. The judgment refers to the grounds of challenge advanced in the proceedings. It recognises that expert planning material may be admissible to establish what a council, in the proper discharge of its duty, ought reasonably to have done in the course of the decision-making process: see ULV Pty Ltd v Scott (1990) 19 NSWLR 190 at 201, which Newman J cites. The affidavit was however rejected because it was not relevant to the issue before Newman J, which was whether the Valuer General had failed to comply with the legal requisites to be fulfilled by him. The crux of Newman J's reasoning is found in the following passage:

"The difficulty I find with Mr Eyre 's evidence is that both the f les of the valuations in relation to the Lots in question have been tendered in evidence. It seems to me, on reading those files, that the Valuer General in coming to the determination that he did in fact give consideration to the effect of the studies to which I have made reference. The fact that he concluded that these reports did not assist him in coming to the decision which he was required to make would not take that position outside the ambit of the discretion which he had to exercise in coming to his conclusion. As has been pointed out, the judicial review which this Court can embark upon is far from a case in which the merits of a decision are subject to judicial scrutiny."

It may be that Newman J has done less than justice to the Valuer General in suggesting that the Valuer General "concluded that these reports did not assist him in coming to the decision which he was required to make'. But nothing turns on this, because the critical point is, as his Honour points out, what was before the Valuer General. That was proven by direct evidence. And, since there was no suggestion by the Valuer General that the two Studies were ignored because they were not in the public domain, I fail to see how Mr Eyre's affidavit advanced the Council's case.

It is obvious that Mr Eyre did not have access to all the material which the Valuer General took into account. This removes the evidentiary value of the opinion expressed in paral9 of each affidavit, as well as the inference that might be drawn from the hypothetical recommendation mentioned at the end of those paragraphs. Accordingly the reasoning in ULV Pty Ltd v Scott (at 206-7) is fatal to the admissibility point relating to those affidavits.

Mr Chestnut is employed by the Council as its Manager of Environmental Control and Planning. He supervised the preparation of the Wetlands Study. The affidavit describes the Study and its preparation, establishing that lot 5 or its vicinity had the characteristics described in that Study. I say "or its vicinity" because, as already indicated there is a live issue as to whether lot 5 falls within any particular part of the land covered by the Study. I am prepared to accept that the affidavit would have been evidence tending to assist the Council's case on this last mentioned matter. However, I have not found it necessary to resolve this issue for the disposition of the appeal. As to the balance of the affidavit, it does not advance the Council's case in any material way, because the Valuer General had regard to the actual ecological characteristics of lot 5 and did not otherwise fail to take account of relevant material for the reasons already given.

Newman J regarded Mr Chestnut's evidence as falling within the same area as that of Mr Eyre. I agree. The rejection of this affidavit occasioned no substantial wrong or miscarriage having regard to the limited issues in the trial.

Affidavits of Michael John Dick were also rejected. Mr Dick is a valuer. He described the features of each lot that he was able to ascertain, and stated an opinion as to value. In my view this evidence was correctly rejected as irrelevant to the legal issues before Newman J.

Mr Stanisland is an engineer. His affidavits were directed at establishing the extent to which each lot was affected by flooding, and the parts of each lot upon which a dwelling house could be constructed. The basis of his assessment was the Flood Study. He also expressed the opinion that filling the land which is subject to inundation in the 1% event and which is situated in a flood plain has the potential to aggravate the detrimental effects of flooding upon adjoining lands. If he had been asked to advise the Council on the development of the sites at the date of resumption he would have recommended refusal. Unlike the evidence rejected in ULV Pty Ltd v Scoff, this was expert evidence based (in part) upon personal inspection of the site. It addresses what was a critical issue, namely the ultimate reasonableness of developing the sites and, thereby indirectly, the likelihood of a prudent hypothetical purchaser buying the land with that in view. For these reasons the affidavit should, in my view, have been admitted, slight though its weight was.

However, its rejection did not cause any miscarriage because the Court of Appeal can consider its impact upon the case. Mr Stanisland's evidence was not directed at showing that relevant material was disregarded by the Valuer General. Whilst it did go to the Wednesbury unreasonableness arm of the Council's case,

WRQUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR; COUNCIL OF THE CITY OF GOSFORD v CUNNINGHAM & ANOR (Brownie AJA)

it was not so compelling as to render the Determinations invalid according to the exacting legal standards for irrationality. In each matter I would make the following orders:

Appeal dismissed. 5 2. Appellant to pay respondents' costs.

Grove AJA I agree with Mason P. Brownie AJA I agree with Mason P.

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