Supreme Court of WA|2002-12-13|Before: Kechnie J

Mount Lawley Pty Ltd v Western Australian Planning Commission [2002] WASC 307 (13 December 2002)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : MOUNT LAWLEY PTY LTD -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2002] WASC 307

Acquisition of land - Principles for determining value - Relevance of conduct of respondent - Relevance on past environmental review - Purpose of reservation - Whether part of scheme leading to election to acquire

Words and phrases - Election to acquire - Whether binding on statutory authority - Whether equivalent to compulsory acquisition

Abbey Orchard Property Investments Pty Ltd v Sydney City Council (1978) 37 LGRA 230

Albury City Council v North Albury Shopping Centre Pty Ltd (1985) 1 NSWLR 220

Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd [1982] HCA 53; (1982) 149 CLR 600

Brewarrana Pty Ltd v Commissioner of Highways (1973) 32 LGRA 170

Broken Bay Peninsular Pty Ltd v Minister Administering the National Parks and Wildlife Act 1974 No 30136 of 1995 [1997] NSWLEC 165

Cardwell Shire Council v King Ranch Australia Pty Ltd [1984] HCA 39; (1984) 58 ALJR 386

Chambers v Simpson [1921] NZLR 553

Coastal Waters Alliance of Western Australia Incorporated v Environmental Protection Authority; Ex parte Coastal Waters Alliance of Western Australia Incorporated (1996) 90 LGERA 136

Carson v Minister for Environment and Planning (1990) 70 LGRA 215

Cook and Edwards v City of Stirling (1991) 4 WAR 469

Crouch v Minister OF Works (1976) 13 SASR 553

Davies v Littlejohn [1923] HCA 64; (1924) 34 CLR 174

Della-Vedova v State Energy Commission of Western Australia (1990) 2 WAR 561

Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 WLR 404

Emerald Quarry Industries Pty Ltd v Commissioner of Highways [1979] HCA 17; (1979) 43 LGRA 316

Environmental Protection Authority; Ex parte Chapple (1995) 89 LGERA 310

F H Faulding & Co Ltd v Watson [1969] WAR 63

Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522

Federal Commissioner of Taxation v Levy [1961] HCA 92; (1960-1961) 106 CLR 448

Fletcher Estates (Harlescott) Ltd & Newell & Ors (Executors of J V Longmore (deceased)) v Secretary of State for the Environment [2000] UKHL 10; (2000) All ER 929

Folkestone v Metropolitan Region Planning Authority [1968] WAR 164

Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340

Gregory v Commissioner of Taxation of Australia (1971) 125 CLR 571

H Jones and Company Pty Ltd v Kingborough Corporation [1950] HCA 11; (1950) 82 CLR 282

Harvey v Burwood Municipal Council [1993] NSWLEC 59

Hertfordshire County Council v Ozanne [1991] 1 All ER 769

Hughes Aircraft Systems International v Airservices Australia [1997] FCA 558; (1997) 146 ALR 1

In re Cary-Elwes' Contract [1905] 2 Ch D 143

In re Pigott and The Great Western Railway Company [1881] 18 Ch D 146

Inge v The Birmingham, Wolverhampton and Stour Valley Railway Company (1853) 3 De GM & G 259

Inglewood Pulp and Paper Company Limited v New Brunswick Electric Power Commission [1928] AC 492

Jelson Ltd & George Wimpey & Co Ltd v Minister of Housing and Local Government [1970] 1 QB 243

Jelson Ltd v Blaby District Council [1977] 1 WLR 1020; [1978] 1 All ER 548

John Fairfax & Sons Ltd v Australian Telecommunications Commission [1977] 2 NSWLR 400

Kelly v London Transport Executive [1982] 2 All ER 842

Lasseter v Blacktown City Council [1994] NSWLEC 24

Lee v The Commissioner of Taxation [1962] HCA 35; (1962) 107 CLR 329

Love v Western Australian Planning Commission [1999] WATPAT 4

Mario Piraino Pty Ltd v Roads Corporation (1990) 76 LGRA 263

Marshall v Director General of Transport [2001] HCA 37; (2001) 180 ALR 35

Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426

Mudge v Attorney-General for the State of Victoria and the Board of Land and Works [1960] VicRp 8; [1960] VR 43

Murphy v The Crown (1989) 68 LGRA 286

Myers v Milton Keynes Development Corporation [1974] 1 WLR 696

Nuland Developments Pty Ltd v Parramatta City Council (1978) 37 LGRA 258

Ocean Reef (WA) Pty Ltd v Town Planning Board (1984) 2 SR (WA) 131

Overton Investments Pty Ltd v The Department of Urban Affairs & Planning [1998] NSWLEC 67

Padu v Colo Shire Council (1976) 34 LGRA 52

Pamalco Pty Ltd v Minister Administering National Parks & Wildlife Act 1974 [1991] NSWLEC 18

Pastoral Finance Association Limited v The Minister [1914] UKPC 77; [1914] AC 1083

Pearlberg v May [1951] 1 Ch 104

Pine Rivers Shire Council v Doolan Properties Pty Ltd [2000] QCA 76

Pollock v Wellington (1996) 15 WAR 1

Pownall & Ors v Conlan Management Pty Ltd (1995) 12 WAR 370

Prasad v Wolverhampton Borough Council [1983] 2 All ER 140

Proctor v Brisbane City Council (1993) 81 LGERA 398

Radich v Minister for Works, unreported SCt of WA (Burt CJ); No 813; 6 August 1981

Raja Vyricherla Narayana Gajapatiraju v The Revenue Divisional Officer, Vizagapatam [1939] AC 302

Renstone Nominees Pty Ltd v Metropolitan Region Planning Authority (1986) 21 APA 12

Riverlate Properties Ltd v Paul [1975] 1 Ch 133

Robinson v Lloyd [1962] WAR 168

Shire of Swan Hill v Bradbury [1937] HCA 15; (1937) 56 CLR 746

Sisters of Charity of Rockingham v The King [1922] 2 AC 315

Social Credit Savings and Loans v Federal Commissioner of Taxation [1971] HCA 61; (1971) 125 CLR 560

Stanfield v Brisbane City Council; Brisbane City Council v Stanfield (1990) 70 LGRA 392

Sudbrook Trading Estate Ltd v Eggleton [1983] AC 444

The London, Chatham and Dover Railway Company v The South Eastern Railway Company [1893] AC 429

The Minister of State for the Navy v Rae [1945] HCA 6; (1945) 70 CLR 339

The Minister v Stocks & Parkes Investments Pty Ltd [1973] HCA 29; (1973) 129 CLR 385

The Railway Commissioners of New South Wales v The Perpetual Trustee Company, Limited [1905] HCA 38; (1906) 3 CLR 27

The State of Western Australia v McFarlane, unreported; FCt SCt of WA; Library No 980248; 20 April 1998

Trandos v Western Australian Planning Commission [2000] WASC 11

Weigall Constructions Pty Ltd v Melbourne & Metropolitan Board of Works [1972] VicRp 93; (1972) 30 LGRA 333

Whitehouse v Jordan [1980] UKHL 12; [1981] 1 All ER 267

Wimpey Construction UK Ltd v The Minister (1984) 53 LGRA 75

Woollams v The Minister (1957) 2 LGRA 338

1 This is a case about the valuation of land. The trial occupied some 67 days and more than 6,000 pages of transcript, and about 800 exhibits ranging from single pages to lengthy reports. On one day the Court travelled over the Mount Lawley land to conduct a view.

2 At the conclusion of the trial, the parties submitted detailed and thorough submissions - the applicant's over 800 pages, the respondent's over 300 pages.

3 Much evidence was led about the background prior to the election to acquire. This consumed many days of the hearing.

4 This judgment has taken a great deal of time due to the necessity to thoroughly absorb and review the evidence and submissions. Although the documentation and transcript are voluminous, in the end I have not seen the need to write a voluminous judgment. The trial was conducted in electronic format, so that the record of the trial is available for instant and easy access. All court documents including the pleadings and the submissions of the parties are scanned and form part of the electronic record, as do the witness statements and the transcript of evidence. All exhibits are also scanned, so that the whole record is available electronically.

5 Because the information is so readily available, it is not necessary for me to conflate much evidence into the judgment. Nor is it necessary to reproduce slabs of text. However, the primary reasons for the brevity of the judgment are my conclusion as to the proper construction of the Metropolitan Region Town Planning Scheme Act 1959, s 36, and my judgment that much evidence led is irrelevant.

6 In some cases the demeanour of witnesses assumes great importance in assessing the evidence. In this case the demeanour of witnesses has played a minimal part in my decision. All witnesses presented well. The witnesses as to the narrative history were recalling events and on occasion suffered from fallibility of memory. Where it has been necessary to prefer a version of one witness to another, or to doubt the reliability of a witness's evidence in a particular, I have done so by reference to the witness's evidence, compared with the contemporary documents, those documents having a higher probability of accuracy.

7 There was challenge to some witnesses on both sides as to their bias or partiality. For example, Mr Molony's arrangements with the applicant include a success fee. I have taken the question of bias generally into account, but gave it comparatively little weight. With the exception of Mr Copley, and Public Service representatives of the respondent, such as Mr Hillyard, expert witnesses on both sides are paid for their experience and expertise. I have not found any witness to be mendacious, although there are some whose opinions I do not completely accept.

Objection to evidence on the basis of relevance

8 Early in the trial, the respondent objected to evidence which went beyond a small band of relevance or was necessary to paint an historical picture. As it was not possible to object to each individual part of the evidence until its relevance had been ascertained, the trial proceeded on the basis that the objection would be reserved. Objection to certain evidence on the same basis was subsequently made from time to time. The objection to evidence goes to the heart of the applicant's case.

9 In general terms, I uphold the objection. As will become clear, the applicant's case theory is based on certain propositions. They include:

(a) The election to acquire is equivalent to a compulsory acquisition;

(b) The Mount Lawley land which was zoned rural prior to the reservation would have been rezoned urban in due course but for the reservation;

(c) The background history of failed negotiations and proposed land exchanges affects the question of the determination of the value of the Mount Lawley land;

(d) The conservation significance of the Mount Lawley land, if substantial, must be disregarded under the Pointe Gourde principle (Pointe Gourde Quarrying and Transport Company Limited v Sub-Intendent of Crown Lands [1947] AC 656);

(e) The motivation of the respondent and Governments of the day is relevant to the issue of valuation;

(f) The highest and best use of the Mount Lawley land but for the reservation was an urban community as illustrated by a hypothetical development.

10 I reject each of these propositions. In consequence, much of the evidence led at trial is irrelevant. The actual issue is the determination of the value of the Mount Lawley land as at the date notification that the development application was refused. That date is 9 May 1996.

11 A detailed chronology is set out in the applicant's closing submissions volume 1. I accept it as accurate even though many events are irrelevant.

12 The applicant is the registered proprietor of land known as Lots 46 and 47 Maralla Road, Ellenbrook, which together comprise about 321 hectares of vacant, unimproved land: ("the Mount Lawley land").

13 The applicant company was incorporated on 13 February 1923. It is owned by the Copley family and the history of the land is explained by Mr Copley (T/s 1491-2).

14 On 16 December 1992, by MRS Amendment 879/33, 309 hectares of Mount Lawley land were removed from the Rural Zone and reserved for Parks and Recreation (Ex 160, 2043). The balance of the Mount Lawley land, approximately 12 hectares, was rezoned Urban Deferred.

15 On 23 December 1994, portion of Lot 47, by MRS Amendment 950/33 (Ex 176) about 7.7 hectares was reserved for the Controlled Access Highway ("CAH"). This land was previously part of the land reserved for Parks and Recreation (Ex 2046).

16 On 22 March 1995, the respondent notified the applicant that it had received consent to bring down Improvement Plan No 27 (Ex 177).

17 On 22 September 1995, the applicant lodged a claim for compensation with the respondent dated 8 September 1995 in respect of injurious affection of Lot 46 and portion of Lot 47 arising from MRS Amendments 879/33 and 950/33 (Ex 184). This request was declined (Ex 2082). On 7 December 1995 the applicant applied for approval to commence development (Ex 178). On 11 February 1996 it was deemed to have been refused because no response had been received: (Ex 183).

18 On 9 May 1996, the respondent notified the applicant that it had elected to acquire the whole of Lot 46 and portion of Lot 47 which had been reserved for Parks and Recreation in lieu of paying compensation. At that time no election was made to acquire portion of Lot 47 which had been reserved for the CAH. Subsequently, the respondent purported to acquire the CAH reservation on portion of Lot 47. An issue arises as to the validity of this action.

19 Issue is joined by the respondent, both as to the value of the land and as to the extent of evidence relevant to the determination of value.

20 The applicant's claim is set out in par 13 of the amended statement of claim (Court Doc 18). In addition to claiming the market price for the highest and best use of the land, and injurious affection for the CAH, various other matters are claimed, including solatium and interest. A mandatory injunction requiring the respondent to acquire the land is also sought.

The Metropolitan Region Town Planning Scheme Act 1959: the construction of s 36(2)(b) is not a power of compulsory acquisition

21 To determine the applicant's claims for compensation, it is first necessary to construe the Metropolitan Region Town Planning Scheme Act.

22 The applicant submits, in essence, that an election to acquire is in the nature of a compulsory acquisition. If that be right, then there are many consequences. The applicant's claims for relief are predicated on the proposition that an election to acquire is, or is equivalent to, a compulsory acquisition. However, I do not accept the submission. Instead, I accept and adopt the reasoning of Scott J in Hill v Western Australian Planning Commission [2000] WASC 101 especially at [21] to [22]. See also Re Board of Valuers; Ex parte Bond Corporation Pty Ltd; unreported; SCt of WA (Miller J); Library No 980713; 14 December 1998. A philosophy of s 36 is outlined in Bond Corporation Pty Ltd v The Western Australian Planning Commission [2000] WASCA 257 at [31] to [37]. My decision accords with that philosophy

23 Parliament quite deliberately chose a different formulation of words in the Metropolitan Region Town Planning Scheme Act compared with the compulsory acquisition provisions of the Public Works/Land Administration Acts. The concept of an election to acquire at a price fits within the general scheme of the Metropolitan Region Town Planning Scheme Act, s 36. The Town Planning and Development Act and the Metropolitan Region Town Planning Scheme Act both give rights to compensation for injurious affection recognising that land may be at times adversely affected by the consequence of some planning decisions. The predicated assumption within s 36 of the Metropolitan Region Town Planning Scheme Act is that the land will continue to be occupied by the landowner, albeit with the burden of the affect. The Metropolitan Region Town Planning Scheme Act s 36 recognises there may come a stage where for commercial, or other reasons, the respondent elects to acquire the land outright. However, this should not obscure the true purpose of s 36 which is to provide compensation for injurious affection. Compulsory acquisition converts an interest in real property into an interest in and a claim for compensation. The task for the Court in such a case is to exchange, as nearly as possible, the value of the land with its monetary equivalent. This is necessary because the landowner's rights in the land have been entirely extinguished which is why an amount is customarily included as a solace. A claim for compensation because a landowner's property has been injuriously affected by a town planning scheme amendment is of a different character. Ownership of the land continues but the value of the land is diminished. It is this diminution only which is compensable.

24 The election to acquire under the Metropolitan Region Town Planning Scheme Act s 36(2)(a) and (b) is not a compulsory acquisition. It is a method of resolving the extent of compensation for injurious affection by acquiring the whole of the land.

25 Comparison may also be made with Metropolitan Region Town Planning Scheme Act s 37A which is an express power of compulsory acquisition. The contrast is stark. In s 37A there is express power to compulsorily acquire land if negotiations to acquire the land prove fruitless.

26 In all the circumstances, it may well have been fairer if the respondent had exercised compulsory acquisition powers which would have given the applicant recourse to the provisions of the Public Works/Land Administration Act, including solatium, particular aspects of special value, and a claim for interest from the date of resumption. It did not. I decline to manipulate what I regard a clear meaning of Metropolitan Region Town Planning Scheme Act s 36 in order to achieve a result which might be regarded as a fairer result for the landowner.

27 As a result of the conclusion I have reached on the construction of Metropolitan Region Town Planning Scheme Act, s 36, I have gained no assistance from the many authorities cited which deal with the consequences of a compulsory acquisition.

The binding nature of the election under the Metropolitan Region Town Planning Scheme Act s 36

28 It was an issue in the trial whether the election to acquire was binding on the respondent. However, in its closing submissions, the respondent appears to concede that, at the least, ordinary equitable principles would make an election binding on it. Although I agree that equity would hold the respondent to its election, the intention of Parliament to be discerned from the construction of Metropolitan Region Town Planning Scheme Act s 36, is that the election by the respondent to acquire is irrevocable. The election is simply another method of giving compensation for injurious affection, something which the respondent is obliged to do in any event.

29 However, the election to acquire is not binding on a landowner. The landowner is free to reject the price offered by the respondent or determined by the Court. The Metropolitan Region Town Planning Scheme Act imposes no relevant duties on a landowner. In the absence of a duty there is no obligation to accept the acquisition. On the other hand, the respondent once having elected, is not free to rescind the election so made if the landowner wishes to enforce the acquisition. As the landowner is free to reject the determination I make, it follows that a mandatory injunction at this stage is unnecessary.

30 The applicant also argued that Metropolitan Region Town Planning Scheme Act s 36 gives rise to an open unilateral contract. I disagree. It is unnecessary and confusing to import the principle of a statutory contract into a section which is capable of unambiguous effect. The applicant attempted to support this limb of argument by reference to the Land Clauses Consolidation Act 1845 (UK) and the cases which follow therefrom. However, s 36 of the Metropolitan Region Town Planning Scheme Act is a different statutory regime entirely and does not result in a conclusion that an election to acquire under s 36 is in effect, a compulsory acquisition or some form of open contract. It is a limited statutory device. A contract is created only when the landowner accepts the election to acquire at a value determined by the Court.

31 The respondent referred in its submissions to extrinsic material, particularly Hansard debates and the Stephenson Hepburn Report. Although a reading of that material supports the construction of Metropolitan Region Town Planning Scheme Act s 36 I have accepted, I do not justify my conclusion on that material. In my view the words of the section are quite clear and resort to extrinsic material is unnecessary.

32 The landowner is not entitled to compensation for acquisition. The landowner is entitled to a determination of the value of the land. That value becomes the price at which the land may be acquired by the respondent. However, following that determination, the applicant is at liberty to accept or reject that price. The landowner may retain the land if unhappy with the determination of value. As a result of this conclusion, claims for declarations specified in 13(a)(iv)(c) and (e) of the re-amended statement of claim and the claim for a mandatory injunction 13(d) fail.

33 The validity of the respondent's actions in seeking to acquire the CAH reservation are in issue. It is clear from the minutes of the Executive, Finance & Property Committee of the respondent on 7 May 1996, that the Committee resolved to elect to purchase the whole of Lot 46 and portion of Lot 47 reserved for Parks and Recreation and CAH and to give notice in writing to the owners prior to 14 May 1996 (Ex 2086). Mr Hillyard's letter notifying the applicant of the election to purchase neglected to mention the reserve for the CAH. Mr Hillyard frankly acknowledged that he did not pay enough attention to the wording of the letter (T/s 5973). In these circumstances, he made an error. The error was brought to Mr Hillyard's attention by solicitors for the applicant on 25 September 1996 (Ex 2090).

34 In due course Mr Hillyard wrote on 4 October 1996 indicating the intention to acquire the land reserved for the CAH as well.

35 There was one election only, namely an election to acquire land under both reservations. However, the respondent did not communicate that fact under the Metropolitan Region Town Planning Scheme Act s 36(2)(b) within three months of the claim for injurious affection being made.

36 In these circumstances, the respondent calls in aid the Interpretation Act 1984, s 55, which fits exactly the circumstances of this case. The letter of 9 May 1996 was an act of administrative character. Although the power under s 36(2)(b) of the Metropolitan Region Town Planning Scheme Act had to be exercised within three months, the power or duty under s 55 of the Interpretation Act may be exercised to correct any error or omission at any time. There was no change of opinion: cf Venture Management v Commissioner of State Taxation (1991) 4 WAR 283 at 295.

37 The respondent has lawfully elected to acquire the land comprised in the CAH reservation.

No right to compensation for balance of land

38 There is a portion of 11.9418 hectares in the south-eastern corner of lot 47 which is not subject to any reservation. It is in fact zoned urban under the MRS. The applicant made no claim for injurious affection in respect of this land until the amendment to the statement of claim on 2 March 2000.

39 The respondent has not elected to acquire this portion of the Mount Lawley land.

40 While a claim for compensation could have been made under the Town Planning and Development Act 1928, s 11, there are now two barriers to such a claim. The first barrier is that a claim for compensation was not made within the period of six months from the date of reservation as required under the Metropolitan Region Town Planning Scheme Act, cl 8. The second barrier is that the parties have not proceeded by way of arbitration as required under the Town Planning and Development Act, s 11(4). The land may well have been injuriously affected. It is land-locked. It is a remnant of the larger portion now under reservation. However, the claim for injurious affection in respect of the balance of land is incompetent because it is time-barred. The claim for injurious affection is based entirely on statute not common law. The provisions of the statute must be strictly complied with. Because of the lack of compliance, the Court has no jurisdiction to deal with the claim.

The determination of value: Test to be applied

41 The guiding principle in determining value remains the Spencer test: Spencer v Commonwealth [1907] HCA 82; (1907) 5 CLR 418. Accordingly it is necessary to examine what price a hypothetical purchaser would pay for the Mount Lawley land in 1996.

42 The determination of value is complicated in this case by the environmental attributes of the land about which more will be said later.

43 Value must be determined on 9 May 1996 with the knowledge of a hypothetical willing but not over-anxious vendor and purchaser.

44 The concept of special value to the owner is relevant to this determination: Hill v Western Australian Planning Commission (supra). It may affect what a prudent vendor might accept for the land but has little effect on a prudent purchaser.

45 In any event there is no evidence that any special value exceeds market value. To the extent that special value may be argued to include any preparatory works on the land, that argument was disapproved in Boland v Yates Corp Pty Ltd (1999) 74 ALJR 209; [1999] HCA 62.

Matters irrelevant to the determination of the value of the Mount Lawley land

(a) Matters leading to the adoption of MRS Amendment 879/33

46 The applicant raises as an issue for determination, the legality of the 1992 PER, partly on the basis that the applicant had withdrawn as a proponent: (applicant's common list of issues Nos 16, 17, 18). The argument is expanded considerably in submissions.

47 However these issues do not arise. They are not pleaded. Any court action challenging the 1992 PER or the MRS reservation of the Mount Lawley land has not proceeded. The fact of the PER is pleaded by the applicant without comment. This action like every other action is confined by pleadings.

48 Throughout the proceedings I was left with the impression that underlying the applicant's case was a sense it had been mistreated and outmanoeuvred by the respondent and others, including the Government who had approved Homeswest's involvement in the joint venture and thereafter wished to protect that interest to the detriment of the applicant.

49 The purpose of a large body of evidence seemed to be the establishment of some sort of mala fides or economic malice. When specifically tackled about this issue in the course of oral submissions the applicant, through senior counsel, confined any attacks on institutional attitudes to the need to scrutinise closely the evidence of witnesses as to their credibility or reliability: (T/s 6404 and 6283). However, the written submissions are not so confined.

50 I agree that relevant departmental officer's evidence should be scrutinised carefully as should the evidence of every witness. I have done so.

51 Evidence as to what caused officers and Government to do, or refrain from doing, certain things prior to 1996 is irrelevant as not forming part of the pleaded case. That evidence provides no assistance whatsoever in determining the value of the land.

52 To a very great extent, the ambivalence illustrated by the applicant's oral and written submissions highlights the difficulties confronted by the applicant.

53 Until 1992 the Mount Lawley land had always been zoned rural. As a result of the PER, submissions to the Environmental Protection Authority ("the EPA") and the decisions and recommendations of the respondent's planning officers, much of the Mount Lawley land was burdened with reservation as Parks and Recreation. The fact that there was fluidity for a time about possible zonings and the extent of land necessary for conservation purposes does not impugn the actual decision witnessed by MRS Amendment 879/33. In 1996, at the date of the intention to acquire, nothing relevantly had changed on the Mount Lawley land. Of course the situation on adjacent lands had changed significantly. The Ellenbrook joint venture was forging ahead. The Vines was an established development. The Egerton land had been rezoned, although its actual use as a rural property remains unchanged. The Egerton land, being substantially degraded, and with different hydrogeologic and floristic characteristics, is not comparable with the Mount Lawley land.

54 Much of the applicant's case rests on propositions which cannot be made good. The applicant must establish that, but for the reservation, the Mount Lawley land would have been zoned urban along with its neighbours' land. If that had occurred, the land's highest and best use would have been as a developed subdivision.

55 There are two basic facts which preclude this line of reasoning.

56 The first fact is that the applicant voluntarily withdrew from the joint venture. This breaks a necessary causal link in the chain of reasoning. The applicant's case about what may have thereafter occurred is speculative only.

57 The second fact is that the PER did occur following which recommendations were made and then implemented. The environmental significance of the Mount Lawley land was recognised.

58 It is both too late and inappropriate for the applicant in these proceedings to challenge the process leading to the 1992 PER or its conclusions and then to argue, by reference to detailed evidence, that the result might have been different if no PER was held. No plea to this effect is made.

59 Therefore, much evidence which challenged the conclusion in the PER or sought to put more detailed evidence about the conservation significance of the Mount Lawley land is simply irrelevant. This applies to evidence adduced on both sides.

60 The fact is that as part of the PER, Mr Muir, in 5.2.1 in Appendix A (Ex 2213.03) flagged the general conservation significance of the banksia woodlands and seasonal swamps, recommending further assessment to preserve part or all of them in their present condition.

61 This general recommendation is not linked to any scheme or other purpose. It relates solely to the characteristics of the land.

62 The proposal for MRS Amendment 879/33 recognised the conservation significance of the Mount Lawley land although it considered that the significance could be preserved by a reservation of 90 hectares (Ex 2416).

63 It seems clear that there was a difference within Government between the EPA and the respondent about the land. The EPA pressed for a greater area to be conserved.

64 Mr Auret gave interesting evidence as to the development of the MRS amendment, particularly the role of the sub-committee, and the eventual selection of the area to be reserved - some 450 hectares.

65 What comes through strongly from his evidence is that despite intense pressure for increased urbanisation in the north-east corridor of Perth, the conservation value of the Mount Lawley land was such that it had to be preserved.

66 The respondent was strongly criticised for not calling major decision-makers who approved MRS Amendment 879/33 (Ex 2127). However, the report which accompanied the MRS Amendment 879/33 (Ex 2230) is sufficient to expose the reasoning.

67 MRS 879/33 Amendment was obviously made to enable urbanisation in the area. Equally obvious was the intention to preserve against urbanisation areas considered to be environmentally significant.

68 This preservation is no part of a general scheme. It is reflective of a condition of the land. It is not then the reservation which has caused a diminution of the value of the land. There is no relevant relationship between the rural zoning and the public purpose in reservation of the land: Housing Commission of New South Wales v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196 at 206 - 207.

69 I approach the task of determining the value by accepting that in 1992 there was a PER. In 1993 there was a decision of the respondent reserving a substantial portion of the applicant's land for Parks and Recreation. That reservation has injuriously affected the land to the extent that the respondent is prepared to acquire it. However, the land which was zoned rural would not have been rezoned, regardless whether the land was reserved.

(b) The proposed joint venture with Sanwa and Homeswest

70 This issue relates to the possibility of a rezoning of the Mount Lawley land to urban by 1996. The issue occupied a considerable amount of time at trial.

71 It is true that, early in the piece, there were active negotiations between the applicant and the other proposed joint venturers. On 14 November 1991, the joint venturers, Homeswest and Sanwa Vines, entered into an agreement. Subsequently, Ellenbrook was developed. Mr Copley and Mr L Friday and later, when he was engaged, Mr Molony actively sought to involve Mount Lawley in the joint venture. However, by March 1992 Mr Copley had little confidence that a joint venture agreement could be effected on Mount Lawley's terms (T/s 1555).

72 The applicant had difficulties doing anything in conjunction with the joint venture. The negotiations failed. For whatever commercial reason, the applicant pulled out before any joint venture involving it was consummated. To reason that, had the joint venture proceeded, land swaps could have occurred and the Mount Lawley land would have developed as an urban zone with Ellenbrook fails at source. The failure, for whatever reason, to enter into a joint venture agreement years earlier, can have no effect on the value of the land in 1996 or on the possibility of rezoning in 1992 to 1996.

73 I take a simpler view of the significance of the failure of the joint venture negotiations than the applicant. My principal view is that this aspect is irrelevant to the value of the land in 1996.

74 More specifically, however, the applicant has failed to establish, on the balance of probabilities, that the negotiations failed because of the proposed reservation. An examination of the contemporary documents, principally letters and minutes, suggests the real reason for the failure was because of a difference of opinion between the parties as to the value of the applicant's proposed contribution. The other joint-venturers assigned a lower equity value to that than did the applicant.

75 I do not regard the proposed land exchange between the applicant and the Government as relevant in any way to the value of the Mount Lawley land, largely for reasons which have been given as to the proposed joint venture.

76 There were significant differences between the parties as to the method of determining value (for example the file-note by Mr Molony (Ex 585)). Ultimately, negotiations did not result in an agreement.

77 The fact that this episode occurred during a long history of negotiations does not assist in determining the value of the reserved land four years later. It is part of the history I have ruled irrelevant.

78 There is no contract yet. Any future contract for sale will therefore be subject to GST. I do not regard the GST as affecting the value of the land. I accept that it may be an impost on the applicant, the effect of which is to diminish the monetary compensation for injurious affection if it sells to the respondent. However, that is not a matter about which any allowance can be made.

79 The applicant claims these costs under par 13(vi) of the re-amended statement of claim. Most of these costs were incurred in the course of the failed negotiations and have no nexus with the reservation. The reason the applicant is unable to develop the land is not the reservation. It is the refusal of the respondent to rezone the land to urban and so open the way for development. The refusal of the respondent to rezone the Mount Lawley land is due to its appreciation of its environmental significance.

Matters relevant to the determination of value The decision in R v Murphy [1990] HCA 42; (1990) 64 ALJR 593

80 Both sides rely on R v Murphy to advance their case(s), although Murphy, does not expound any new principle of law. It simply applies settled principles to the facts in that case. Those principles include the Pointe Gourde principle as adopted for Australia in Housing Commission of New South Wales v San Sebasian Pty Ltd. In the joint judgment at 595, line (E), the Court restates the general rule requiring a direct or indirect relationship between the planning restriction and the scheme of which the resumption is a feature. The Court noted that the characteristic of the land, which affects its value, must be taken into account even if the planning restriction relates to that. See also Yates Property Corp (In liq) v Darling Harbour Authority (1991) 24 NSWLR 156 at 175. So much, with respect, I regard as unexceptional.

81 The applicant presented part of its case conformably with the judgment in Murphy at 597 (G) because as, with the Mon Repos beach land in Murphy, the Mount Lawley land was zoned rural at the time of its resumption.

82 In the present case the environmental features and the wetlands make it unlikely that such a rezoning would ever have occurred. The reservation under MRS Amendment 879/33 is not directly or indirectly a step in any wider plan. It is a restriction on the land in its rural zoning. If, as required, the reservation is ignored, the zoning still remains rural. Rezoning is not a right.

83 Much evidence at trial related the environmental factors on the Mount Lawley land.

84 All witnesses agree that the Mount Lawley land is environmentally significant. Complicating the issue is the fact that a good deal of the environmental assessment was done by both sides well after 1996 to justify their respective contentions. There are fundamental differences of opinion between the experts called in respect of each party's case. A Judge should not shirk resolving difficult scientific disagreements merely because he or she is not a scientist. However, in this case it is unnecessary for me to resolve the issues. The important question is the value of the land in 1996 and the state of mind of a prudent purchaser. Having regard to the environmental significance, a prudent purchaser, making proper enquiries, would have regarded the possibility of a future rezoning as remote. The same can be said for the position at the time of reservation.

85 The EPA had done a considerable amount of work on environmental issues in the Jandakot suite. Following the commencement of this action, much more specific work was done. For example, Mr Trudgen provided a comprehensive taxonomy which indicates the presence of significant flora on the Mount Lawley land. The taxonomy is more comprehensive than usually considered necessary by the EPA.

86 The environmental witnesses were experts in their fields. Sometimes their evidence strayed into areas about which their expertise was less clear. I do not doubt the integrity of any of them, although I do not agree with all of them about their conclusions. I have considered setting out my analysis of their evidence but have concluded that I should not. I regard the evidence as irrelevant because it deals with false issues. Those issues include whether the environmental evidence in 1992 justified the reservation and whether the Mount Lawley land could have been zoned urban and sustained development in due course. They are false issues because the legality of the PER or MRS Amendment 879/33 cannot now be attacked. The possible rezoning depends on displacing, amongst other things, the PER. What might have happened is unimportant. What did happen is conclusive. Speculation about what might have occurred is not equivalent to a reasonable hypothesis. The applicant's evidence about what might have occurred in relation to rezoning between 1992 and 1996 is speculative. It ignores, or seeks to bypass, what did happen prior to the reservation being proclaimed. What did happen was that negotiations failed, there was no land swap, the Government did not agree to rezone the Mount Lawley land and the respondent decided the land had such environmental significance that an area of 450 hectares ought to be reserved.

87 As the evidence is irrelevant, it would be unfair to make findings about reliability or non-acceptance.

88 I have borne in mind the risk of prejudice to the applicant and respondent should I make no findings. If this judgment is subject to appeal, and if my decision as to relevance is judged to be wrong, then the Full Court has both the evidence and the contentions of the parties in accessible form.

89 If, however, my decision is upheld, then any views I have formed about the reliability of the witnesses do not even have the status of obiter dicta.

90 Environmental factors led to the reservation. Compensation is payable for injurious affection as a result of the reservation. Compensation is not payable for the condition of the land. The existence of the environmental factors of significance run with the land regardless of the reservation. When determining value, I am obliged to accept the potential without the burden of the reservation. It is speculative that the Mount Lawley land would have achieved rezoning to urban. On the evidence the probabilities are that it would not.

91 The reservation and the possible zoning are two different things. In order to succeed in its claim for value as at 1996 the applicant must show that, disregarding the reservation, a prudent purchaser would have been prepared to pay for the land on the basis that it would in due course be zoned urban. Yet all of the history suggested the contrary.

92 The Pointe Gourde principle and its statutory equivalent, s 36(2)(b) of the Metropolitan Region Town Planning Scheme Act, is limited to the effect of the reservation. The reservation has caused injurious affection to the land because it has limited the uses of the land. However, the reservation is not the cause of the failure to rezone the land from rural.

93 The direct cause of the failure to rezone is the existence of the environmental features - the flora - the wetlands - perhaps the dunes, although Dr Semeniuk is the only one to regard them as significant. I do not.

94 As a result of the environmental factors, the land would never be rezoned. The perception of the EPA and respondent in 1992 to 1996 was that the land was environmentally significant to such an extent that it would not be rezoned.

95 In a sense whether that perception is ultimately correct is irrelevant. A prudent purchaser making enquiries in 1996 would consider the prospect of rezoning unlikely. A prudent purchaser at the time of the reservation would reach the same conclusion.

96 Absent a reservation, I find that rezoning would not have occurred because of the views of the EPA and the respondent.

97 It should be remembered that zoning is not a right. A refusal to rezone does not give rise to a claim for injurious affection.

98 The Mount Lawley land was rural when acquired and rural it remained. The reservation blighted the land and requires compensation.

Mount Lawley Pty Ltd v Western Australian Planning Commission [2002] WASC 307

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (258 paragraphs)

Mount Lawley Pty Ltd v Western Australian Planning Commission [2002] WASC 307 (13 December 2002)

(a) Matters leading to the adoption of MRS Amendment 879/33

(b) The proposed joint venture with Sanwa and Homeswest

(b) The actual resolution for MRS Amendment 879/33

Parties

Legislation Cited (6)

Cases Cited (35)