DENIS JAMES CORNELL as Executor of the Estates of JACK SYDNEY and JESSIE VERONICA CORNELL

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : CORNELL as Executor of the Estates of JACK SYDNEY CORNELL and JESSIE VERONICA CORNELL (DEC) -v- TOWN OF EAST FREMANTLE [2003] WASC 163

Compensation for injurious affection - Refusal of development application - Whether land was injuriously affected by heritage provisions in the making of the Town Planning Scheme - Whether Town Planning Scheme permits development for any purpose other than a public purpose - Quantum of compensation

Town Planning and Development Act 1928 (WA), s 8, s 8(2), s 11, s 11(1), s 12, s 12(1), s 12(2), s 12(2a), s 12(2a)(b)(i), s 12(2a)(b)(ii), s 12(2a)(b), First Sch cl 10

Town Planning and Development Amendment Act 1956 (WA)

Town Planning Regulations 1967 (WA)

Cornell & Anor v Town of East Fremantle (1997) 95 LGERA 290

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

Kettering Pty Ltd v Noosa Shire Council [2004] HCA 33

Players Pty Ltd v Corporation of the City of Adelaide [2001] SASC 369

Wines v Shire of Harvey [2000] WASCA 39

Arcus Shopfitters Pty Ltd v Western Australian Planning Commission [2002] WASC 174; (2002) 125 LGERA 180

Bond Corporation Pty Ltd v Western Australian Planning Commission [2000] WASCA 257; (2000) 110 LGERA 179

Borriello, In the marriage of (1989) 97 CLR 211

Commonwealth v Millegde [1953] HCA 6; (1953) 90 CLR 157

De Ieso v Commissioner of Highways (1981) 27 SASR 248

Folkestone v Metropolitan Region Planning Authority [1968] WAR 164

Goodwin, In the marriage of (1990) 101 FLR 386

Makita (Australia) Pty Ltd v Sprowels [2001] NSWCA 305; (2001) 52 NSWLR 705

Pollock v Wellington (1996) 15 WAR 1

Pownall v Conlon Management Pty Ltd (1995) 12 WAR 370

Temwood Holdings Pty Ltd v Western Australian Planning Commission [2002] WASCA 10; (2002) 25 WAR 484

The City and Suburban Group Pty Ltd v The City of Stirling (TPAT Appeal No 37 of 1998)

Trandos v Western Australian Planning Commission [2001] WASCA 346; (2001) 117 LGERA 257

University of Western Australia v City of Subiaco (1980) 52 LGRA 360

Williams v Town of Claremont [1976] WAR 125

1 MURRAY J: I have had the benefit of reading in draft the comprehensive reasons prepared by Le Miere J. I agree with them. With respect to the contrary view adopted by Jenkins J, I consider that the appeal should be dismissed, substantially for the reasons expressed by Le Miere J and by the trial Judge, Hasluck J.

2 LE MIERE J: The appellant appeals from a judgment of a Judge of this Court awarding the respondent compensation for injurious affection pursuant to s 11 of the Town Planning and Development Act 1928 (WA) ("the Planning Act").

3 The respondent sued in his capacity as the executor of the wills of Jack Sydney Cornell and Jessie Veronica Cornell. The respondent is the owner of land known as 91 Preston Point Road, East Fremantle. He claimed compensation for injurious affection against the appellant, the Town of East Fremantle.

4 The land known as 91 Preston Point Road formerly consisted of lots 23 and 24 lying within the municipality of East Fremantle. Lots 23 and 24 were subsequently amalgamated into lot 500.

5 In January 1991, Mr and Mrs Cornell applied to subdivide lot 500 into two lots. The existing house was located on the proposed lot of 990 square metres which subsequently became lot 501 whilst the proposed vacant lot of 1400 square metres subsequently became lot 502. The affected land in respect of which the respondent claims compensation is located on the lower and western portion of lot 502. Put shortly, the formalities leading to the creation of the vacant lot known as lot 502 were completed six months after the refusal of consent for planning approval which triggered the present claim. That gave rise to a number of issues at trial. However, the trial Judge found that the respondent and the appellant had both treated the application for planning approval as being made on the basis that the subdivision of lot 500 into lots 501 and 502 had been effected subject to the formalities which remained to be completed. The appellant has essentially accepted that position on this appeal and it is not necessary to further consider the matter.

6 The property occupies a prominent waterfront location, being separated from the Swan River by Riverside Road, and enjoys views in a south-westerly through to north-westerly direction of the Swan River, looking towards the North Fremantle area. The property is part of a continuous riverside escarpment. Both the limestone cliff and escarpment

in the vicinity of the property are covered with trees and vegetation and are considered to be a place of regional significance and heritage value.

7 On 9 July 1982, the appellant promulgated a town planning scheme known as Town of East Fremantle Town Planning Scheme No 2 ("the EF Scheme"). The EF Scheme provided that certain designated places should be regarded as places of heritage value and be retained in their present state.

8 Towards the end of 1993, the registered proprietors of the property applied for development approval in respect of a proposed two-storey residence to be erected on the western side of the property, fronting Riverside Road, in accordance with plans prepared by Spiccia and Co.

9 This application was refused on 20 December 1993 on grounds that were arguably referable to heritage considerations and the notion that the proposed development would have an unacceptable impact on the river landscape.

10 The owners of the land proceeded to make a claim for compensation for injurious affection. The claim gave rise to various factual and legal issues concerning the effect of the relevant planning controls.

11 A major issue at trial was whether s 12 of the Planning Act which provides that compensation is not recoverable in certain cases, has the effect of barring the respondent's claim. The effect of s 12, broadly described, is that injurious affection claims are not allowable in respect of town planning provisions which have the characteristics described in s 12(1), s 12(2) and s 12(2a). This appeal is concerned with s 12(2a). That subsection was inserted into the Planning Act by the Town Planning and Development Act Amendment Act 1956 (WA). The purpose of the amendment was to restrict the circumstances in which compensation is payable for injurious affection resulting from a zoning scheme. More particularly, s 12(2a)(b)(i) provides that land shall not be deemed to be injuriously affected by reason of any provision which deals with any of the matters specified in cl 10 of the First Schedule unless the scheme permits development on that land for no purpose other than a public purpose.

12 The appellant contended that s 12(2a)(b)(i) barred the respondent's claim because the land, if affected at all, was affected by a provision concerning heritage, being one of the matters mentioned in cl 10 of the schedule. Compensation was not recoverable because development was not only permitted on the land for a public purpose. Public purpose is defined to mean a purpose which serves or is intended to serve the interests of the public or a section of the public. The true position was that development could be carried out for a private purpose, albeit subject to certain restrictions reflecting a public interest in the preservation of the area.

13 A second major issue was the question of whether the respondent's land had been injuriously affected by the EF Scheme.

14 A third major issue was the question of what amount of compensation should be allowed to the respondent in the event of the appellant's liability for injurious affection being established.

15 There were many other subsidiary issues in the case. However, they were resolved by the trial Judge, are not the subject of appeal or cross-appeal and hence do not need to be referred to in these reasons.

16 The EF Scheme was gazetted on 9 July 1982. The general objects of the scheme include to retain the district primarily as a residential area, to protect and enhance the environment, character and pleasantness of the district and to protect the significant places of heritage value within the district. The particular objects of the scheme include to regulate new development to ensure that it occurs at a scale which is sympathetic with the character of the various environmental areas within the district.

17 Clause 2.1.1 creates several zones and areas within the scheme area including a residential zone and areas described as places of heritage value.

18 By cl 2.3.1 a Designated Development Table indicates the uses permitted within the various zones and areas. Clause 2.3.7 provides that the relevant development standards are those specified in that table. Clause 2.3.10 provides that the policy statements in the table are statements of general policy only, are not binding on the Council and do not affect the obligation of the Council to consider the circumstances and merits of each particular case.

19 The policy statement applicable to places of heritage value states that the places described in Appendix V and situated on the lands shown as places of heritage value on the Scheme map are considered by the Council to be of historical, architectural, scientific, scenic or other value that should be retained in their present state or restored to their original state or to a state acceptable to the Council. Appendix V, which provides a schedule of places of heritage value, consists of four columns, being a code, the name of the place, the location (as shown on the Scheme map), and description. The western or lower portion of the property is a place to which the Schedule applies. That is, the western part of lot 502 (being land on or below the escarpment to the west of the drainage easement), which is called the "affected land" in the respondent's statement of claim, lies within the Landscape Protection Area and is a place of Heritage Value. An amendment to Appendix V deleted the affected property from the schedule of places of Heritage Value. However, the affected land continued to be shown as a place of heritage value on the Scheme map. It is common ground between the parties that the affected land is a place of Heritage Value notwithstanding its deletion from Appendix V. It is not necessary to consider that matter further.

20 Clause 1 of the Development Table for places of heritage value follows the policy statement. Clause 1 provides that a person shall not, without the special approval of Council, carry out any development in such places including (a) the erection, demolition or alteration of any building or structure and (b) clearing the land, nor fell, lop, top or damage any tree or otherwise damage the place.

21 Clause 4 provides that where the Council refuses its consent to any of the things just mentioned, the owner of the place may, if the place is injuriously affected by the making of the EF Scheme, claim compensation for that injurious affection within a prescribed time, namely within the time specified in cl 5.11.1.

22 Clause 5.1 of the EF Scheme deals with applications for planning consent and matters of administration. Clause 5.1.4 provides that it is not necessary for an application for planning consent to be made in respect of certain works and uses including, by cl 5.1.4(e), the erection of a dwelling house upon a lot upon which no other dwelling house has been erected if the use of that lot for the purpose of a dwelling house is permitted by the Scheme and the relevant development standards and requirements of the Scheme are complied with. However, cl 5.1.5(c) provides that the Council's planning consent is required in respect of the excavation or filling of or other earthworks on land which changed the natural contours of the land by more than 600 millimetres.

23 Clause 5.2.1 provides that the Council shall, in the case of an application for permission to carry on a use marked "AP" in the Development Table, and may in the case of an application for permission to carry on a use marked "PS" in the Table, or in any other case in which application is made for its approval, give notice of the application to owners and occupiers of land within the area likely to be affected by the granting of the application. Clause 5.2.5 provides that a resolution to grant special approval must be passed by an absolute majority of the Council.

24 Clause 5.3 sets out the matters to be considered by the Council in making its decision on applications for approval. Clause 5.4.6 provides that where the Council has not, within 60 days of the receipt by it of an application for planning consent or special approval, either conveyed its decision to the applicant or given notice of the application to owners and occupiers likely to be affected, the application shall be deemed to have been refused.

25 By letter dated 3 September 1993, Gibson & Gibson, solicitors on behalf of Mr and Mrs Cornell, wrote to the appellant indicating that their clients intended to apply for a "licence" to construct a single dwelling on the 1400 square metres lot on the area west of the escarpment.

26 By letter dated 22 September 1993, the appellant wrote to the Department of Planning and Urban Development concerning the development application in question and indicating that the land abutted a parks and recreation reserve. By a letter of the same date, the appellant wrote to the Swan River Trust indicating that a development application had been received to construct a residence on the escarpment and asking for comment.

27 A development application accompanied by plans dated 30 September 1993 was subsequently submitted to the appellant by Mr and Mrs Cornell for permission to construct a residence on land described as lot 500, which was said to be vacant land.

28 The learned trial Judge found that the application referred to the western section of what was to become lot 502. There is no appeal from that finding.

29 The learned trial Judge referred to the western part of lot 502 upon which the proposed residence was to be constructed, which lies within the heritage area under the EF Scheme, as "the affected land". The "affected land" was the term adopted by the respondent in his statement of claim in order to distinguish the eastern part of lot 502 lying above the escarpment which was not affected by the EF Scheme heritage policy from the western part of lot 502 which was affected by the policy, and upon which the proposed dwelling was to be constructed in accordance with the Spiccia plans (if planning consent could be obtained).

30 The appellant's Town Planning Advisory Panel met on 5 October 1993. Minutes of the meeting reflect that the Panel had reservations with regard to the Cornell development application under consideration.

31 The Swan River Trust conveyed its response to the development application by letter dated 8 October 1993. The Trust said that it could not formally consider the application until its next meeting on 20 October 1993 but, by way of a preliminary expression of views, said that the only acceptable building envelope would be to the rear of the 14-metre contour line. Further, the proposed site was not acceptable for various reasons including the application of the Swan River Trust policy concerning setback. The Trust's minutes dated 20 October 1993 recorded its subsequent resolution that the Cornell development application should be refused. By letter dated 10 November 1993 the Swan River Trust wrote to the appellant stating that it recommended refusal of the Cornell development application.

32 At its meeting on 20 December 1993, the appellant's Council resolved to refuse the Cornell development application. The Town Clerk signed the refusal. A circular letter was then sent out to various interested landowners which set out the reasons that the Council determined to be relevant to the refusal.

33 The respondent appealed to the Town Planning Appeal Tribunal from the appellant's refusal of the development application. The Tribunal heard the appeal in October 1994. It handed down its reasons for decision on 30 January 1995, the effect of which was that the appeal was not allowed with the result that the refusal of consent continued to apply.

34 The respondent made a claim for compensation for injurious affection on 20 May 1994. Clauses 4 and 5.11.1 of the Development Table for places of Heritage Value contain references to compensation for injurious affection. An issue arose as to whether the respondent had made a valid claim for compensation for injurious affection. The parties stated a special case for the opinion of the Supreme Court on a question of law. As the case was argued, the question was whether the claim for compensation was out of time. In Cornell & Anor v Town of East Fremantle (1997) 95 LGERA 290, Anderson J held that the period of time within which to make a claim for compensation for injurious affection is prescribed by cl 4 of the Development Table to be 6 months from the date of refusal of consent referred to in cl 4(a) and (b) of the Development Table. Accordingly, the respondent's claim for injurious affection was within time. Anderson J observed at page 292 that the right to compensation for injurious affection occasioned by the making of a town planning scheme is given by s 11(1) of the Planning Act. The EF Scheme does not attempt to give an independent right of compensation for injurious affection. It does no more than presuppose the existence of that right under s 11(1) of the Planning Act and prescribe, as required by s 11(1), the time limits within which claims may be made.

35 At trial, the respondent's case was that the land was injuriously affected by the making of the EF Scheme in that the value of lot 502 was diminished as a result of the development controls concerning places of heritage value in [1] of the Development Table. On their true construction, including the requirement to obtain the special approval of the Council, the relevant controls effectively prohibited the forms of development referred to in that paragraph.

36 The appellant admitted that the land was situated within the EF Scheme area and that the land was affected by the Development Table Places of Heritage Value in the EF Scheme. The appellant denied that the development controls in question effectively prohibited any development of the affected land or permitted development for no purpose other than a public purpose. Further, the appellant denied that the affected land was injuriously affected by the making of the EF Scheme. The appellant contended that the provisions of clauses 1 to 4 of the Development Table did not permit development on that part of lot 502 designated as a place of heritage value for no purpose other than a public purpose.

37 The appellant contended that the affected area of lot 502 could still be developed for a private purpose under the EF Scheme, albeit subject to certain restrictions which reflected a public interest in the preservation of the area. Lot 502 could continue to be used for private purposes in that, with the special approval of the Council, a dwelling could be established upon the upper (eastern) section or a boatshed built on the lower (western) section comprising the affected land. Developments of such a kind were compatible with the appellant's heritage policy because they did not damage the escarpment. This demonstrated that the land could be used for a purpose other than a public purpose. It must follow, the appellant argued, that s 12(2a)(b)(i) barred the respondent's claim for compensation.

38 Further, the appellant submitted that in any event the refusal of the development application did not result in any diminution in the value of lot 502 and therefore did not cause injurious affection.

39 The learned trial Judge proceeded on the basis that the right to compensation for injurious affection was derived from s 11 of the Planning Act. His Honour observed that, having regard to s 11 of the Planning Act and to cl 4 of the EF Scheme Development Table for Places of Heritage Value, the claimant must establish that the land in question is injuriously affected by the making of the EF Scheme.

40 The learned trial Judge was satisfied, having regard to the evidence of the appellant's planner, Mr Smith, and the way in which the stated grounds of refusal are structured in the refusal document dated 20 December 1993, that the respondent's application for development approval was refused essentially because of the appellant's desire to preserve the affected land as a heritage place. His Honour found that, within the meaning of cl 4 of the Table, the appellant's Council refused consent to the erection of a building on the affected land essentially for the purpose of the preservation of the place. His Honour found that the refusal of planning approval was therefore, prima facie, an event sufficient to activate a claim for compensation upon the ground that the land in question was injuriously affected by the making of the EF Scheme.

41 The trial judge acknowledged that by cl 2.3.10 of the EF Scheme the heritage policy reflected in the Development Table is said to be a statement of general policy only which does not affect the obligation of the Council to deal with each application on its merits. His Honour further acknowledged that the Swan River Trust and the Planning Commission policies flow from provisions lying outside the EF Scheme. His Honour rejected the argument that the making of the EF Scheme (and thus the heritage policy reflected in it) did not mark any profound change to the existing situation, with the result that the subject property could not be said to have been injuriously affected by the making of the EF Scheme. His Honour considered such an argument to be unduly restrictive. Upon the making of the EF Scheme, the appellant had been equipped with greater powers than before to prevent development on or in the vicinity of the escarpment. The general policy might not be binding upon the Council in all cases, but in most cases reliance upon the policy as a basis for refusing consent would tend to strengthen the Council's hand.

42 The learned trial Judge then discussed the decision of the Full Court in Wines v Shire of Harvey [2000] WASCA 39. That case concerned the issue of whether the Shire of Harvey District Planning Scheme No 1 ("the Harvey Scheme") prohibited the continuance of a non-conforming use of the relevant land. The Shire issued the Harvey Scheme which affected the appellant's land. His residence was situated in a buffer zone created by the Harvey Scheme. Residential use was not permitted in the buffer zone. The appellant sought compensation for injurious affection under s 11(1) of the Planning Act. He claimed that the use of the land for residential purposes was now a non-conforming use within the meaning of Part 10 of the Harvey Scheme and therefore the value of his land had been reduced. The trial Judge ruled that no provision of the Harvey Scheme prohibited the continuance of a non-conforming use of land within the Harvey Scheme area or prohibited the extension of buildings used in connection with a non-conforming use. The appellant successfully appealed to the Full Court. The Full Court held that cl 10.2 of the Harvey Scheme was not a prohibition. The effect of the clause as a whole was not to prohibit the activities referred to, but to require planning consent to be obtained with respect to them. However, cl 10.5 was intended to be a prohibition. The fact that the Council may, by special approval, grant a dispensation from the prohibition did not matter as the approval may be given only in exceptional cases. A prohibition which comes into effect on the happening of certain events such as destruction of or damage to buildings is a prohibition within the ambit of the Planning Act, s 12(2a)(b)(ii). Clause 10.5 was within s 12(2a)(b)(ii) in that it did prohibit the continuance of any non-conforming use of the land and the erection, alteration or extension on the land of buildings in connection with or in furtherance of the non-conforming use of the land.

43 The learned trial Judge, said at [215], that having regard to the reasoning in Wines (supra) concerning cl 10.5 of the Harvey Scheme, he considered that the heritage policy reflected in the Development Table of the EF Scheme is in the nature of a prohibition. By cl 1 of the Table, a person "shall not" carry out "any" development in respect of a place of heritage value without special approval. This is not a case in which planning consent could only be refused on proper planning grounds. This is a case in which development stands prohibited unless a special or exceptional case is demonstrated for the granting of approval. This view is underlined by the extent and severity of the restrictions which are said to include restrictions upon clearing the land or felling trees. By cl 2.3.10, the Council is obliged to deal with each case on its merits. Nevertheless, it is not at liberty to disregard the policy and this will generally require that a strong and exceptional case is made out before any development is permitted on a place of heritage value.

44 The learned trial Judge went on to say that a prospective purchaser of the land would be aware that a strong and exceptional case will generally need to be made out before any development would be permitted on a place of heritage value. His Honour considered that the reasoning in Wines concerning cl 10.5 of the Harvey Scheme supports the view that the affected land in the present case was injuriously affected by the making of the EF Scheme.

45 The trial Judge then went on to consider the issue concerning s 12(2a)(b)(i) of the Planning Act. The entitlement to claim compensation is conferred by s 11 of the Planning Act where land is injuriously affected by the making of a scheme. As noted earlier, s 12 provides that compensation is not recoverable in certain cases, for example, where the planning controls complained of are designed to secure the amenity of an area. By s 12(2a)(b)(i), the land shall not be deemed to be injuriously affected by reason of any provision which deals with any of the matters specified in cl 10 of the First Schedule unless the scheme permits development on that land for no purpose other than a public purpose.

46 The appellant contended that s 12(2a)(b)(i) bars the respondent's claim. The affected land shall not be deemed to be injuriously affected by reason of a town planning scheme which deals with matters in cl 10 of the First Schedule (such as protection of the environment or landscape) unless the scheme permits development on that land for no purpose other than a public purpose. The appellant contended that the heritage policy carried into effect by the Development Table for Places of Heritage Value of the EF Scheme concerns protection of the environment and landscape. Moreover, subject to special approval, the EF Scheme permits development for a purpose other than a public purpose. The respondent could obtain approval to proceed with a private development on lot 502, or on the affected land, so long as it did not involve clearing or damage to the escarpment.

47 The learned trial Judge said that, having regard to the reasoning in Wines as to cl 10.5 of the Harvey Scheme, the basic precept enunciated in cl 1 of the Development Table for Places of Heritage Value - that a person shall not carry out any development on a place of heritage value without special approval - amounts to a prohibition upon development notwithstanding the presence of a power of dispensation. His Honour expressly acknowledged that in Wines the Full Court was concerned with s 12(2a)(b)(ii) of the Planning Act, which uses the word "prohibits" rather than the phrase "permits development". Nevertheless, his Honour considered that the reasoning in Wines has a persuasive effect in the circumstances of the present case. His Honour said, at [245]:

"Essentially, the effect of the EF Scheme is that development is not permitted on a heritage place. It seems clear that special approval for a private development will only be granted in an exceptional case where the development is or is rendered compatible with the public purpose of ensuring that the place is preserved in an undamaged state. Special approval will be difficult to obtain because the Heritage Policy forbids 'any development' including clearing or building upon the land. I therefore consider that s 12(2a)(b)(i) does not operate to bar the plaintiff's claim in the present case because, essentially, the EF Scheme permits development on the affected land for no purpose other than a public purpose."

48 The learned trial Judge then went on to consider whether the affected land was injuriously affected and if so the quantum of the respondent's claim. The learned trial Judge held that the quantum of compensation was an amount equal to the difference between the market value of the land at the time the claim was enlivened by an event sufficient to activate a claim for compensation, in this case the refusal of planning approval on 20 December 1993, and what would have been the market value of the land if the restrictive effect of the EF Scheme had not been demonstrated by the activating event. His Honour said that that required a comparison be made between the unaffected value and the affected value of the land.

49 There was expert valuation evidence given by each of the parties. The evidence established that at the relevant date the highest and best use of the affected land was as part of the single residential lot 502. The learned trial Judge preferred the evidence of Mr Bracewell, the appellant's valuer, concerning the unaffected value of lot 502. Accordingly, the trial Judge found the value of lot 502 unaffected by the heritage controls of the EF Scheme as at 20 December 1993 was the valuation of the appellant's valuer, that is $755,250.

50 The learned trial Judge then considered the value of lot 502 affected by the heritage provisions of the EF Scheme. His Honour found that the development controls of the EF Scheme effectively prohibited any development of the affected land with the result that lot 502 was injuriously affected by the making of the EF Scheme.

51 The learned trial Judge referred to the evidence of the valuers concerning the affected value of lot 502. Mr Dix, the respondent's valuer, expressed the view that the affected value of lot 502 at the relevant date was $400,000. His Honour considered that Mr Bracewell had, in effect, valued the upper portion of lot 502 at $430,000 and hence if the lower portion had no value then the affected value of lot 502 was $430,000. However, his Honour found that neither valuation was wholly satisfactory. His Honour observed that Mr Dix's starting figure of $400,000 was arrived at by reference to a base figure representing the unaffected value which his Honour had not accepted.

52 The learned trial Judge noted that the task of the Court is not simply to choose one of several competing valuations, but to make a critical selection of the most helpful facts from the mass of evidence with a view to fixing the sum satisfactory to the mind of the court as representing the true value of the claim at the relevant valuation date. His Honour found the correct starting point for the reduction in value of lot 502 by reason of the EF Scheme was $302,100, representing 40 per cent of the figure of $755,250, which was the unaffected value of the lot. His Honour referred to the figure of $302,100 as being the starting point for the calculation of the injurious affection because his Honour considered that the development controls of the EF Scheme effectively prohibited any development of the affected land. However, his Honour considered that ownership of the affected land as part of lot 502 as a large single lot developed only on the upper level added value to lot 502. His Honour said that a knowledgeable purchaser would allow value for features of the planning situation which would be available to the owner if the affected land was left in an undeveloped state such as plot ratio benefits, rear setback benefits, the ability to deal with the open space and landscaping requirements of the EF Scheme, control over development and any possible interruption to views from the upper level. His Honour considered that retention of the ownership of the affected portion of lot 502 represented benefits that added value to lot 502. His Honour held that it was appropriate to attribute a sum of $50,000 to those benefits. It followed that the diminution in value of lot 502 by reason of the EF Scheme was $252,000. His Honour accordingly assessed the compensation for injurious affection in the sum of $252,000.

53 There are five grounds of appeal, each of which contain within them multiple sub-grounds or particulars.

54 Ground 1 of the appeal is that his Honour erred in law in that:

(a) Although it was common ground that the balance of lot 502 or alternatively lot 500 which was not within a Place of Heritage Value under the EF Scheme could be developed for any purpose permitted by the EF Scheme unaffected by any constraints imposed by the classification of places of heritage value (the heritage provisions); and

(b) the respondent having failed to negate the operation of s 12(2a)(b)(i) of the Planning Act by proving that the EF Scheme permitted development on that land for no purpose other than a public purpose there being uncontradicted evidence to the effect that the EF Scheme did permit development of the affected land for purposes other than a public purpose;

(c) his Honour failed to find that the respondent's claim must fail pursuant to s 12(2a)(b)(i) of the Planning Act in that the EF Scheme did not permit development of lot 500 or lot 502 or the affected land for no purpose other than a public purpose.

55 The appellant submits that the learned trial Judge dealt with s 12(2a)(b)(i) of the Planning Act by applying the reasoning of Anderson J in Wines as the basis for his conclusion at [245]:

"Section 12(2a)(b)(i) does not operate to bar the [respondent's] claim in the present case because, essentially, the EF Scheme permits development on the affected land for no purpose other than a public purpose."

56 The appellant says that his Honour in reaching that conclusion incorrectly applied the Wines case and misconstrued the relevant provisions of the EF Scheme relating to "special approval". The appellant referred to the judgment of Anderson J in Wines at [15] and [16] where his Honour expressed the opinion that the requirement of planning consent for all development does not mean that all development in the scheme area is prohibited. Anderson J held that the requirement of planning consent in cl 10.2 of the Harvey Scheme relating to non-conforming uses is not a prohibition. At [17] Anderson J contrasts cl 10.5 of the Harvey Scheme which requires special approval for repair or rebuilding of the building used for the purpose of a non-conforming use where it is destroyed or damaged to the extent of 75 per cent or more of its value. Anderson J held that the Harvey Scheme did not define the requirement of "special approval". The appellant submits that that factor led Anderson J to the view that under the Harvey Scheme special approval may be given only in exceptional cases. It was that factor that led Anderson J to find that the general effect of cl 10.5 was to work a prohibition.

57 The appellant submits that the EF Scheme is relevantly different from the Harvey Scheme considered in Wines. The appellant submits that the requirement of special approval in the provisions of the Development Table - Places of Heritage Value in the EF Scheme cannot be regarded as a prohibition, or as an indication that special approval would only be given in exceptional cases. The appellant submits that the provisions of cl 5.3 of the EF Scheme have the effect that the Council, in dealing with an application for special approval, could only refuse its special approval on proper planning grounds, undertaking the same considerations as apply to ordinary approval. It is not the case therefore that the requirement of special approval means that approval may only be given in exceptional cases.

58 The appellant drew the Court's attention to provisions of the EF Scheme relevant to the meaning and content of special approval. The appellant submits that the only necessary consequence of the requirement of special approval for a development on a place of heritage value is the requirement of an absolute majority. The appellant submits that the requirement of an absolute majority applies to a wide range of applications, including all applications designated "AP" and "PS" in the development table, all applications where a relaxation of standards or requirements is required and all other applications where the Council in its discretion requires notice of the application to be given under cl 5.2.2.

59 The appellant submits that the way in which Anderson J dealt with the special approval requirement in the Wines case is not applicable to the circumstances of the present case. Clauses 5.2 and 5.3 of the EF Scheme define what is involved in the special approval process and there is a requirement to apply the discretionary guidelines in cl 5.3 for special approval in the same way as for approval. This, submits the appellant, makes it clear that under the EF Scheme, the Council is required to exercise its discretion on a special approval in a regular manner in the same way as it does for an ordinary approval. The appellant submits that this is to be contrasted with Anderson J's perception of the Harvey Scheme which his Honour considered did not define the requirement of "special approval" and led his Honour to the view that under the Harvey Scheme special approval may only be given in exceptional cases. The requirement of special approval under the EF Scheme is defined in cl 5.2 and cl 5.3 and it cannot be said that special approval under the EF Scheme may be given only in exceptional cases.

60 In considering this ground of appeal, the starting point is the provisions of the Planning Act providing for compensation for injurious affection. Section 11(1) provides that a person whose land is injuriously affected by the making of a town planning scheme shall be entitled to obtain compensation. Injuriously affected means reduced in value. Section 12 limits the circumstances in which a person whose land is injuriously affected may obtain compensation. Section 12(2a)(b) relevantly provides that land shall not be deemed to be injuriously affected by reason of any provision of a town planning scheme which deals with any of the matters specified in cl 10 of the First Schedule unless one of two exceptions apply. The matters specified in cl 10 of the First Schedule include classification or zoning of the scheme area for various types, kinds or classes of, amongst other things, cultural heritage conservation or other public purposes and including areas for protection of the environment or landscape. That is, the provisions of the EF Scheme dealing with places of heritage value and permitted uses and development standards applicable to those places are matters specified in cl 10 of the First Schedule. It follows that the respondent is not entitled to compensation unless one of the exceptions in s 12(2a)(b) are satisfied. The relevant exception, set out in s 12(2a)(b)(i), is that the scheme permits development on the land for no purpose other than a public purpose.

Meaning of "Permits" in Section 12(2a)(b)(i)

61 The appellant submits, in effect, that the EF Scheme permits development on the respondent's land for purposes other than a public purpose because the EF Scheme permits any development on the land provided that the special approval of the Council is given to the development. The appellant gives the word "permits" the meaning of does not prohibit and gives a restrictive reading to the exception defined by s 12(2a)(b)(i) of the Planning Act. I do not accept that construction for a number of reasons.

62 First, the word "permits" must take its meaning from its context. It is not easy to understand the sense in which the words "permits development" are used in s 12(2a)(b)(i). However, in my view, where a scheme prohibits a development but gives to the Council a dispensing power to permit the development it cannot properly be said that the Scheme permits the development. The context of s 12(2a)(b) includes the zoning of areas within planning legislation. Planning legislation implements economic, social and environmental objectives through, amongst other things, zoning schemes and development control. Zoning schemes are systems of zones in which defined uses and developments are permitted, discretionary or prohibited. In that context, the phrase "permits development" indicates development being positively authorised rather than merely not prohibited.

63 Section 12(2a)(b)(i) is concerned with the purpose for which development is to be undertaken. A scheme may permit development for a particular purpose, or use, even though it is subject to certain development standards. For example, within the residential zone the construction of a dwelling house is a permitted use even though it is subject to compliance with development standards. The effect of such a provision is not to prohibit the use. The provision permits development for the stated purpose but requires it to comply with certain standards.

64 That is to be contrasted with a provision that prohibits a use subject to a dispensing power. In this case, the EF Scheme prohibits the respondent from carrying out any development on the land without the special approval of the Council. An instrument that prohibits activities subject to a power to grant exemption from the prohibition cannot properly be described as an instrument that permits the activity. For example, a company policy that prohibits an employee from using a company vehicle for private purposes without the express permission of the managing director cannot properly be described as a policy that permits the use of the vehicle for private purposes. In this case a scheme that prohibits a landowner from carrying out any development without the special approval of the authority cannot properly be described as a scheme that permits private development of the land.

65 There is a relevant difference between the power to consent to a permitted development and the power to approve a development that is otherwise prohibited. The practical result of the exercise of the two powers will be the same in that an approval will be granted and the development can lawfully proceed. However, the nature of the powers is different. In one case development for the specified purpose or use is permissible with approval, and it is the scheme that permits development for that purpose or use. In the other case development for that purpose or use is prohibited and the Council's decision operates to override or dispense with the ordinary provisions of the scheme. The power to approve an otherwise prohibited development is therefore an extraordinary power. Its exercise operates on what would otherwise be a prohibition. On the other hand, the power to consent to a permissible development is an ordinary power which operates to give effect to the provisions of the scheme which contemplate and permit that development.

66 Secondly, the language of s 12(2a)(b)(i) is to be contrasted with that of s 12(2a)(b)(ii). The exception constituted by s 12(2a)(b)(ii) is where the Scheme prohibits the continuance of any non-conforming use. By contrast, the exception constituted by s 12(2a)(b)(i) is where the Scheme permits development on the land. In my view, the change of language indicates that the exception constituted by s 12(2a)(b)(i) is where the Scheme positively authorises development rather than where it does not absolutely prohibit development. The words "permits development on that land for no purpose other than a public purpose" rather than "prohibits development on that land for any purpose other than a public purpose" emphasise a purpose being permitted, that is positively authorised, rather than merely not prohibited.

67 Thirdly, any ambiguity in the statutory provision should be construed in favour of the landowner. The Court is considering an Act which expressly recognises the right to compensation in respect of property injuriously affected by a town planning scheme. In examining those parts of the Act which create exceptions, they should not be construed to take away or extinguish the right expressly created by the Act unless it appears in express words or by plain implication that it was the intention of the Parliament to do so. In Kettering Pty Ltd v Noosa Shire Council [2004] HCA 33, McHugh, Gummow, Hayne, Callinan and Hayden JJ, said at [31]:

"Injurious affection by the taking and use of part of a landholding, and injurious affection occasioned by a planning change have in common the impairment or displacement of a private interest by a public one. This feature has led, in cases of the former, to judicial pronouncements favouring dispossessed landowners, of which the following, by Gaudron J, is a recent example:

'The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.'"

68 I will now consider whether the EF Scheme permits development of the affected land for any purpose other than a public purpose in the sense I have given to that requirement. In my view, the provisions of the EF Scheme restricting development on places of heritage value cannot properly be said to permit development on that land for any purpose other than a public purpose. That is, the EF Scheme permits development on that land for no purpose other than a public purpose.

69 In this case, the EF Scheme does not permit any development other than for a public purpose. The EF Scheme says such a development shall not be undertaken but gives to the Council a dispensing power to permit it.

70 Paragraph 1 of the Development Table for Places of Heritage Value relating to places of heritage value in the EF Scheme is prohibitive in form. The provision provides that a person shall not without the special approval of the Council carry out any development. The form of the statutory provision is not determinative. The Court must look to the effect of the clause as a whole: see Wines v Shire of Harvey, per Anderson J at [12]. In my view, the effect of the relevant provisions of the EF Scheme is not to permit any development unless it is consistent with the purpose for which the land has been classified a place of heritage value.

71 The Development Table for places of heritage value includes the following policy statement: "The places described in Appendix V and situated on the lands shown as Places of Heritage Value on the Scheme Map are considered by the Council to be of historic, architectural, scientific, scenic or other value that should be retained in their present state or restored to their original state or to a state acceptable to the Council." When the EF Scheme was made, the places of heritage value were described in Appendix V to the Scheme. The affected land was covered by Item 29 which was said to be "landscape protection area" and described as "a site comprising limestone cliff face, rock outcrops and natural vegetation; significant for its natural characteristic which should be protected from despoliation or the intrusion of development". Those words were subsequently deleted from the appendix, but that does not detract from the fact that that was the purpose of placing the affected land on the list of places of heritage value. The purpose of the EF Scheme provisions relating to development of places of heritage value is to prohibit any development of those places so as to retain them in their present state or restore them to their original state or a state acceptable to the Council.

72 The appellant submits that the effect of cl 2.3.10 of the EF Scheme is significant. That clause provides that the policy statements contained in the Development Table:

"(a) are statements of general policy only;

(b) are not binding on the Council; and

(c) do not affect the obligation of the Council to consider the circumstances and merits of each particular case."

73 The appellant places reliance on the decision of the Full Court in Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522. In that case, the Court held that the Town Planning Tribunal had erred in law in that it had tied the exercise of its discretion to the existence of a general policy to only allow subdivision of rural land zoned special rural because special rural land was subject to controls. The Court held that the Tribunal had failed to give realistic consideration to the merits of the case and did not properly consider whether controls could be achieved by other means. The Tribunal's decision, in automatically giving overriding importance to the land's zoning and in not regarding itself as free to apply controls, meant the Council's failure to complete its review was determinative of the Tribunal's discretion. Thus decisions and actions of others control the exercise of the discretion vested in the Tribunal.

74 The decision of the Full Court in Falc v State Planning Commission (supra) is illustrative of the administrative law principles concerning the inflexible application of policy. The common law has developed a doctrine under which decision-makers may have regard to a relevant policy, but may not treat it as a fixed, determinative rule. Clause 2.3.10 of the EF Scheme is consistent with that common law doctrine. The doctrine does not mean that policies may not be regularly applied. Decision-makers may apply the policy in the general run of cases, provided that they are always willing to consider the merits of individual cases.

75 I agree, with respect, with the learned trial Judge's finding at [245] that special approval for a private development will only be granted in an exceptional case where the development is or is rendered compatible with the public purpose of ensuring that the place is preserved in an undamaged state.

76 The learned trial Judge concluded that s 12(2a)(b)(i) does not operate to bar the respondent's claim in the present case because the EF Scheme permits development on the affected land for no purpose other than a public purpose. I agree with his Honour's conclusion. Ground 1 of the appeal is not made out.

77 Ground 2 of the appeal is that the learned trial Judge erred in law in failing to conclude that a correct interpretation of the operation of s 12(2) of the Planning Act barred the respondent's claim for compensation for injurious affection in that having found that:

(a) lot 502, comprising land which was both affected and unaffected by the heritage provisions, was in its totality injuriously affected by those provisions; and

(b) it was only on the affected land that a prohibition on development applied.

(c) The result was, inter alia, a prescribing of the location of buildings on lot 502 or alternatively lot 500 or the quantity of land that may be taken for open spaces, which the appellant, having regard to the nature and situation of the land affected by the provisions, considered reasonable.

78 Section 12(2) of the Planning Act has no application to the provisions of the EF Scheme which restrict development of places of heritage value. Section 12(2) of the Planning Act applies to provisions in a town planning scheme which "prescribe the height, location, purpose, dimensions or general character of buildings, or any sanitary conditions in connection with buildings, or the quantity of land that may be taken for parks or open spaces". The relevant provisions of the EF Scheme do none of those things. Ground 2 is not made out.

79 This ground is essentially that the learned trial Judge erred in his interpretation and application of the reasoning in Wines v the Shire of Harvey, in determining that s 12(2a)(b) of the Planning Act did not bar the respondent's claim for compensation for injurious affection. The appellant argued this ground of appeal in conjunction with ground 1. In my view, ground 3 adds nothing of substance to ground 1 of the appeal.

80 Ground 4 of the appeal is that having correctly found that the highest and best use of lot 502 was as a single residence and that the optimum position for such a residence was on the unaffected portion of lot 502, the trial Judge failed to find that the respondent had not proved that lot 502 or the affected land had suffered injurious affection as a consequence of the heritage provisions of the EF Scheme. The ground of appeal then goes on to set out twelve paragraphs and six subparagraphs of particulars or matters, that support the ground of appeal. It is not necessary to consider each of those particulars separately.

81 In oral submissions, counsel for the appellant described the thrust of this ground of appeal as follows. There was evidence that the Swan River Trust would not have contemplated development on the escarpment and would have applied its policy in relation to the building setback from the management area. A prudent and knowledgeable purchaser making inquiry at the relevant time would have been aware that the Swan River Trust was opposed to any development west of the top of the escarpment. The same prudent and knowledgeable purchaser making inquiry would have been aware that the Western Australian Planning Commission was opposed to development west of the 40-metre setback from Preston Point Road. The prudent purchaser making proper inquiry would come to the conclusion that development of the kind that was proposed by the respondent would not be approved. The prudent purchaser would have assumed that the property could only be developed in the way that the appellant's valuer, Mr Bracewell, and the respondent's valuer, Mr Dix, favoured, that is a dwelling on the Preston Point Road level and the upper and lower portions forming a single residential lot with the lower portion being used to provide facilities ancillary to the upper portion, such as a stairway giving access or maybe a boatshed, a pergola and such things. Counsel for the appellant concluded:

"So far as the land west of that was concerned, its only significance would be in maintaining ownership or access to the river foreshore and with the possibility of gaining an approval for a stairway or some other development that wouldn't interfere with the scarp, or wouldn't interfere with the structure of the scarp. That is, I think, the heart of what we're saying in ground 4."

82 In my view, ground 4 is not made out. The respondent's entitlement to compensation turns on whether the affected land was injuriously affected, that is, reduced in value, by the making of the EF Scheme. The relevant inquiry is the reduction in value of the land resulting from the making of the EF Scheme, not any loss resulting to the respondent from the refusal of the application for planning consent.

83 It may be accepted that the highest and best use of the affected land was not the construction of a dwelling house on the affected land. It may further be accepted that a prudent and knowledgeable purchaser would have known at the relevant time that a dwelling house could not be constructed on the affected land. That does not mean that the land was not injuriously affected by the making of the EF Scheme.

84 The learned trial Judge found at [288], and both valuers agreed, that the highest and best use of the affected land was as part of a single residential lot 502. It was common ground that the proper method of assessment of the loss due to injurious affection is a comparison of the unaffected and affected values of lot 502. The value of the affected land in the absence of the EF Scheme heritage controls arose from the potential to develop it by connection to the upper portion and by the provision of facilities ancillary to the main residential use. The learned trial Judge found that the construction of improvements such as fencing, a swimming pool, a pergola or a boatshed was consistent with the policy of the Swan River Trust and was only prohibited by the EF Scheme provisions.

85 The learned trial Judge rejected the evidence of the appellant's valuer, Mr Bracewell, to the effect that no injurious affection arose out of the designation of the affected land as a place of heritage value. His Honour accepted the evidence of Mr Dix that the value of the affected land in the absence of the EF Scheme arose from the potential to develop it by connection to the upper portion and by the provision of facilities ancillary to the main residential use. The value of the affected land was reduced by the EF Scheme provisions which prevented such a development.

86 There was evidence that the construction of improvements such as fencing, a swimming pool, a pergola or a boatshed was consistent with the policy of the Swan River Trust and was only prohibited by the EF Scheme heritage controls. It was open to his Honour to accept that evidence. It was open to his Honour to make the findings I have referred to and hence that the affected land was injuriously affected by the EF Scheme. The appellant has not demonstrated that the learned trial Judge made any error in accepting the evidence referred to or in making the findings I have referred to.

88 Ground 4A of the appeal is that the learned trial Judge erred in coming to a determination of the quantum of injurious affection and compensation in the sum of $252,100 in that there was no or no cogent evidential or factual support for such a sum. The ground goes on to plead that the learned trial Judge should have found that there was no cogent or persuasive factual or evidential support for any determination of injurious affection from any witness and that, for the reasons set out in ground 4, lot 502 suffered no injurious affection as a consequence of the heritage provisions.

89 To the extent that this ground repeats ground 4, I will not further address those matters.

90 The learned trial Judge assessed the amount of injurious affection by comparing the value of the land unaffected by the heritage control provisions of the EF Scheme and its value affected by those provisions. The appellant has not demonstrated that his Honour made any error in doing so. Indeed, that particular methodology had been proposed by both the appellant and the respondent at trial.

91 The learned trial Judge first addressed the unaffected value of the land. His Honour accepted the valuation evidence of the appellant's valuer, Mr Bracewell, in preference to the evidence of the respondent's valuer, Mr Dix. No appealable error was made by his Honour in doing so.

92 The learned trial Judge then considered the value of lot 502 affected by the EF Scheme. At [301] of his reasons, his Honour stated that the development controls of the EF Scheme effectively prohibited any development of the affected land with the result that lot 502 was injuriously affected by the making of the EF Scheme. There was evidence to that effect and it was open to his Honour to make that finding. His Honour said that the Court was obliged to make a careful appraisal of the impact of the development controls in determining what price might be paid by a prudent and knowledgeable purchaser for lot 502 in its affected state. His Honour expressly stated that it was necessary to take account of the fact that the controls allowed for approval to be obtained in exceptional circumstances.

93 At [304], the learned trial Judge noted that Mr Dix assessed the affected land value of lot 502 as $400,000, that is to say, its value had been reduced to 40 per cent of the unaffected value he had attributed to lot 502. The trial Judge rejected Mr Bracewell's evidence that the affected value of the land was the same as the unaffected value. It was open to his Honour to do so.

94 In [308] of his reasons, the learned trial Judge stated that he essentially gave effect to the conclusion arrived at by Mr Dix concerning the affected value of the land, but adjusted Mr Dix's opinion having regard to the evidence accepted by his Honour and findings made by his Honour which tends to qualify the opinion expressed by Mr Dix. The learned trial Judge made no error in doing so. A trial Judge is not obliged to accept one out of several competing valuations. The Court may make such adjustments as are required by the evidence and arrive at a figure between the two values offered by valuation witnesses provided it is not merely an average or a mean and the trial Judge does not allow himself to be cast in the role of a third valuer: See Players Pty Ltd v Corporation of the City of Adelaide [2001] SASC 369, per Debelle J at [81], and the authorities there cited.

"The correct starting point appears to be a figure of $302,100 representing 40 per cent of the figure of $755,250 which I found to be the operative unaffected value figure."

96 The starting point referred to by his Honour is the starting point for the reduction in value of the affected land, not the starting point for the affected value of lot 502. That is apparent from [313] of his Honour's reasons where his Honour states that the final compensation to be awarded to the respondent is the sum of $302,100 less $50,000, being the value added to the value of lot 502 by the benefits of the affected land being part of lot 502.

97 Mr Dix considered that the affected land had no value because no development of it could be carried out by reason of the EF Scheme. Mr Dix concluded that the affected value of lot 502 was 40 per cent of its unaffected value, that is, the unaffected value of the affected land was 60 per cent of the unaffected value of lot 502. On that basis, Mr Dix concluded that the reduction in value of the affected land by reason of the EF Scheme was 60 per cent of the unaffected value of lot 502. The learned trial Judge adjusted that figure to 40 per cent and hence found that the starting point for calculating the reduction in value of the affected land by reason of the EF Scheme was 40 per cent of the value of the unaffected lot 502, that is, $302,100.

98 In my view, his Honour made no error in making that finding. The finding was based upon the evidence of Mr Dix. His Honour was not obliged to accept the evidence of Mr Dix in its entirety. His Honour was entitled, as he did, to make adjustments to the valuation of Mr Dix to take into account matters which his Honour found Mr Dix to have not fully or properly considered or taken into account.

99 His Honour then further adjusted that base figure by adding an amount of $50,000 to take into account the features of the planning situation which continued to be available to the owner of the land if the affected land was left in an undeveloped state such as plot ratio benefits, rear setback benefits, the ability to deal with the open space and landscaping requirements of the EF Scheme, control over development and any possible interruption to views from the upper level. Neither valuer placed a figure on the value of those benefits. His Honour was obliged to do the best he could.

100 His Honour allowed an adjustment of $50,000 for those "features of the planning situation". The adjustment allowed for the increased value which would accrue to the owner of lot 502 by owning the affected land compared to an owner who only owned the upper portion of the lot. Those features include the benefit of allocating open space/landscaping requirements of the EF Scheme to the affected land, thereby facilitating a larger building on the upper portion. They included the right to prevent development on the affected land which would interrupt views from the upper portion. In my view, it was open to his Honour to adjust the unaffected value of the affected land, and hence the amount of compensation, by the sum of $50,000.

101 Neither Mr Bracewell nor Mr Dix gave evidence of the value of the benefits which his Honour described as "features of the planning situation". In those circumstances, the learned trial Judge was entitled to not accept either valuation and make such adjustments as his Honour considered were required by the evidence, being mindful not to allow himself to be cast in the role of a third valuer. In this case, the state of the evidence required his Honour to make an adjustment.

102 In Players Pty Ltd v Corporation of the City of Adelaide (supra), Debelle J said at [81]:

"Thus, I am not prepared to rely on the valuation of either Ms Carolan or Mr Christodoulou. In the limited state of the evidence, what can the court do? This appeal has been marked by a failure of the parties to present all relevant evidence on the issues relating to an assessment of annual value on the footing that the premises were licensed and to test the evidence in each valuation. The problem is not new: see Toohey's Ltd v Valuer-General (supra) at 11 where Pike J noted that neither party in that case had put before the court as full evidence as it might have. I am especially conscious of the fact that, although the duty of the court is to determine whether it is proper to set aside the assessment and then determine what the annual value is, the judge must never allow himself to be cast in the role of a third valuer: Bronzel v State Planning Authority (1979) 21 SASR 513; Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 6 SASR 541 at 544 - 546. But the court is not bound to accept either valuation and may make such adjustments as are required by the evidence: Minister for the Environment v Florence (1979) 21 SASR 108 at 111, 116 - 117, and Balquhidder Pty Ltd v Minister for Environment and Planning (1986) 40 SASR 63. The court's duty of determining this appeal is appropriately discharged by deciding which of the two valuations is to be preferred and making whatever adjustments are required by the evidence. For the reasons already expressed, I prefer Mr Christodoulou's cross-valuation but believe it must be adjusted to reflect the criticisms required of it by the evidence. I think the most satisfactory course is to make a modest adjustment ... I would increase the rent of the subject premises to $150 per square metre. This is necessarily

arbitrary, but the incomplete state of the evidence allows no other approach. ... "

103 As I have said, his Honour preferred the approach of Mr Dix, but made adjustments to Mr Dix' figures as his Honour considered were required by the evidence. It may be said that the resulting valuation is an imperfect exercise. However, it is required by the imperfect state of the evidence.

104 It follows that in my view his Honour made no appealable error in determining the amount of compensation to which the respondent was entitled.

105 The appellant initially relied upon addition appeal grounds. The respondent filed a notice of contention. However, none of these matters were proceeded with on the hearing of the appeal. Accordingly, it is not necessary to say anything further about them.

106 For the reasons stated, none of the grounds of appeal are made out and the appeal must be dismissed.

107 JENKINS J: I have had the advantage of reading the draft reasons of Le Miere J. With respect, I agree with those reasons except in regard to grounds one and three of the appeal. These are my reasons for arriving at contrary conclusions on those grounds. I will not repeat the facts which are set out in Le Miere J's judgment.

108 This ground challenges the learned trial Judge's finding that the Town Planning and Development Act 1928 (WA) ("the Act"), s 12(2a)(b)(i) did not prevent the respondent's claim for injurious affection to his land from succeeding.

109 In summary the Act, s 11 confers a statutory right on a person whose land is injuriously affected by the making of a town planning scheme to obtain compensation. The Act, s 12 provides that such compensation is not recoverable in certain cases. At issue in this trial was whether the Act, s 12(2a)(b)(i) applied so as to defeat the respondent's claim for compensation.

"(b) Subject to the provisions of paragraph (c), land shall not be deemed to be injuriously affected by reason of any provision of a town planning scheme which comes into force on or after the appointed day, and which deals with any of the matters specified in clause 10 of the First Schedule, unless the scheme

(i) permits development on that land for no purpose other than a public purpose;"

111 Paragraph (c) is not relevant to the facts of this case. Subsection 12(2a) defines "public purpose" to mean:

"... a purpose which serves or is intended to serve the interests of the public or a section of the public and includes a public work within the meaning of the expression 'public work' in the Public Works Act 1902."

112 Subsection 12(2a) was inserted into the Act in 1956. The Development Table for Places of Heritage Value in the Town of East Fremantle, Town Planning Scheme No 2 District Scheme ("the Scheme") which classified the respondent's land as a place of heritage value, deals with a matter specified in the Act, First Schedule, cl 10 and the Scheme came into force after "the appointed day". Consequently the learned trial Judge had to determine two matters regarding the application of subsection 12(2a). The first was the meaning of the phrase "permits development on that land for no purpose other than a public purpose". The second was whether, given its meaning, the Scheme permits development on the affected land for no purpose other than a public purpose?

113 Dealing with the first issue, the subsection is not easy to construe. The construction of the subsection which is put forward by the appellant is that the word "permits" has the ordinary dictionary meaning of "permit" which is "to allow, suffer, give leave, not to prevent", ("Oxford English Dictionary", 2nd ed, 1989). Therefore it submits that the Scheme, which allows development on the affected land for purposes other than public purposes as long as it is pursuant to the special approval of the appellant's Council, did not fall within the exception in the Act, s 12(2a)(b)(i).

114 The learned trial Judge, whose finding the respondent seeks to uphold for the same reasons, relied upon the reasoning in Wines v Shire of Harvey [2000] WASCA 39. I will review the reasoning in that case more fully under ground of appeal 3. The trial Judge quoted the following passage from Anderson J's judgment in Wines:

"In my opinion, cl 10.5 is rather different from cl 10.2. Whereas the purpose of cl 10.2 is to bring non-conforming user into conformity with uses which are not non-conforming uses as regards the need for planning consent so that the clause cannot be regarded as a prohibition, cl 10.5 is, I think, intended to be a prohibition. The fact that the council may "by special approval" grant a dispensation from the prohibition does not matter. The concept of "special approval" is not defined in the scheme, but it suggests that approval may be given only in exceptional cases. The general effect of the provision is therefore to work a prohibition. There is a clear distinction between such a clause and a clause which requires planning consent to be obtained. In the latter case, planning consent could only be refused on proper planning grounds. In the former case, the activity stands prohibited unless it is a special case. "

"To my mind, having regard to the reasoning in Wines (supra) concerning cl 10.5 of the Harvey Scheme, I consider that the Heritage Policy reflected in the Development Table of the EF Scheme is in the nature of a prohibition. By cl 1 of the Table a person "shall not" carry out "any" development in respect of a place of heritage value without special approval. This is not a case in which planning consent could only be refused on proper planning grounds. This is a case in which development stands prohibited unless a special or exceptional case is demonstrated for the granting of approval. This view is underlined by the extent and severity of the restrictions which are said to include restrictions upon clearing the land or felling trees. By cl 2.3.10, the Council is obliged to deal with each case on its merits. Nonetheless, it is not at liberty to disregard the policy and this will generally require that a strong and exceptional case is made out before any development is permitted on a place of heritage value. This would be apparent to a prospective purchaser of the land. The reasoning in Wines (supra) concerning cl 10.5 of the Harvey Scheme supports the view that the affected land in the present case was injuriously affected by the making of the EF Scheme."

116 It is implicit in the trial Judge's reasoning that a scheme which provides that permission for certain non-public purpose development will only be given in exceptional cases or which, a Judge believes will be "difficult to obtain" is a scheme which permits that development on the affected land for no purpose other than a public purpose. Therefore the learned trial Judge must have decided that "permits development on that land for no purpose other than a public purpose" means permits, in other than exceptional cases, development on that land for no purpose other than a public purpose.

117 I understand that the construction which is favoured, on appeal, by Le Miere J is that in the context of land zoning schemes which designate that within zones and areas land uses and developments are permitted, discretionary or prohibited, the phrase "permits development" indicates development being positively authorised, as opposed to being allowed subject to the local government's discretion or prohibited. Thus the Scheme, which prohibits developments of heritage places subject to a narrow power to approve a development or use, is not a scheme which permits that activity. As the affected land was within a classification area which required the special approval of the appellant's Council for any development on it it fell within a class of land for which the scheme permits development for no purpose other than a public purpose.

118 In my opinion the appellant's preferred construction is correct. I agree that the ordinary meaning of the words is such that a town planning scheme which "permits development" is one which allows or suffers development, even if such allowance or sufferance is conditioned upon the approval of the local government.

119 I do not accept that the context of the phrase gives it a narrower or technical meaning. The word "permits" or its derivations are not used elsewhere in the Act, except in one place in an entirely different context. Thus, there is no indication in the Act that Parliament intended the word to have a narrow or technical meaning.

120 I do not regard it as appropriate to look at the terms of a particular town planning scheme, including the Scheme, to determine the proper construction of the Act. Given "the general rule ... that delegated legislation made under an Act should not be taken into account for the purposes of interpretation of the Act itself" ("Pearce and Geddes Statutory Interpretation in Australia", 5th ed (2001) at [3.37]) it would not be appropriate to take into account specific provisions of a town planning scheme for the purposes of interpretating the Act.

121 However, I note that the learned authors of the text cited above state that there is an exception to the general rule concerning delegated legislation if regulations together with the principal Act forms part of a legislative scheme in which case the regulations may be looked at to ascertain the nature of the scheme.

122 The Act, s 8 says that the relevant Minister may by regulation prescribe a set of general provisions relating to town planning schemes. The Act, s 8(2) says that where a town planning scheme is made in respect of an area, any general provision, appropriate to the area that is in force when the scheme is approved by the relevant Minister shall have effect as part of the scheme, except so far as the scheme, as approved by the Minister, provides for the variation or exclusion of that provision.

123 The Town Planning Regulations 1967 (WA) ("the Regulations") made under the Act prescribe a Model Scheme Text. To the limited extent that the Model Scheme Text can be used to determine the nature of the legislative scheme for town planning schemes, it indicates that it is the Model Scheme Text which first introduced the concept of a zoning table which indicated "the uses permitted in the Scheme area in the various zones". Clause 4.3.2 of the Model Scheme Text states:

"4.3.2 The symbols used in the cross reference in the Zoning Table have the following meanings:

'P' means that the use is permitted by the Scheme providing the use complies with the relevant development standards and the requirements of the Scheme;

'D' means that the use is not permitted unless the local government has exercised its discretion by granting planning approval;

'A' means that the use is not permitted unless the local government has exercised its discretion by granting planning approval after giving special notice in accordance with clause 9.4;

'X' means a use that is not permitted by the Scheme."

124 The word "permitted" is used throughout the Model Scheme Text. The word "permits" is not used. It is my opinion that a scheme which stipulates that a non-public purpose use is not permitted unless the approval of the local government is obtained, even if it is after special notice has been given, cannot be said to be a scheme which permits development of that land for no purpose (other than a public purpose). Patently it does permit development of the land for non-public purposes, but only after the satisfaction of certain conditions. In this respect I would emphasise the words used in cl 4.3.2 of the Model Scheme Text where it says "that the use is not permitted unless the local government has exercised its discretion to grant planning approval" (my underlining). The Model Scheme envisages that this may happen, and it is implicit that if it does the use is permitted by the scheme.

125 Thus, the Regulations tend to support my earlier expressed views that the legislative scheme created by the Act and Regulations is that schemes will designate developments or uses as permitted, not permitted unless the local government exercises its discretion to permit or prohibit. In the second case, if the relevant scheme enables a local government to approve development for private purposes in ordinary language it could not be said that either in a town planning context or otherwise, that the scheme permits development on that land for no purpose other than a public purpose.

126 Further, I am of the view that the second reading speech of the Town Planning and Development Amendment Act 1956 (WA), which inserted s 12(2a)(b)(i) into the Act confirms this interpretation. The Minister for Works at Hansard, 12 December 1956 at 3257 said:

"The Bill provides two instances where injurious affection will be paid. If a zoning scheme is such that it precludes private development in the area, any person owning land there will have to be compensated for injurious affection; that is, if the land is taken for roads or school grounds or recreation grounds so that the possibility of private development is prevented. In such cases, a person owning land in that locality or zone will receive compensation for injurious affection."

127 Thus, Parliament intended to legislate and did legislate to confine the payment of compensation for injurious affection to those circumstances where private development on the land was prevented or in the words of the statute to where development was permitted "for no purpose other than a public purpose".

128 The second issue was whether, as a matter of fact, given my preferred construction of the Act, s 12(2a)(b)(i), the Scheme permits development on the land for no purpose other than a public purpose? If the answer to this question is no, the Act prevents recovery of compensation. If the answer is yes, the respondent may recover compensation for injurious affection.

129 The evidence before the learned trial Judge was that the affected land was a Place of Heritage Value subject to the Development Table in the Scheme applicable to heritage places. The Development Table provided that no development could take place on the land unless the appellant's Council gave its special approval.

130 As I will discuss under ground 3, special approval did not require an exceptional case to be made out before approval could be granted. However, the Council would have to have regard to proper planning principles as well as the policy statement for areas of heritage value before granting such approval.

131 With respect to the contrary view expressed by Anderson J in Wines at [20] I am not of the opinion that such a provision distinguishes itself from a clause which requires planning consent to be obtained on the basis that in the latter case consent can only be refused on proper planning grounds whereas in the former the activity stands prohibited unless it is a special case. It seems to me that in both cases the local government has a discretion to permit development on proper planning principles.

132 The particular development application made by the respondents had been refused but the evidence before the learned trial Judge from Mr Gregory Smith, the appellant's former principal planner, was that some forms of non-public purpose development would have been permitted on the affected land, for example a boatshed, a pergola, swimming pool or stairs.

133 In my opinion the possibility of these uses being permitted by the appellant pursuant to the Scheme means that it cannot be said that the Scheme permitted development of the affected land for no purpose (other than a public purpose). The answer to the question I posed is "no". Therefore the Act, s 12(2)(b)(i) deems that the respondent's land has not been injuriously affected and he is not able to recover compensation.

134 This ground challenges the trial Judge's application of Wines v Shire of Harvey to this case. In Wines, Anderson J (Ipp and Owen JJ agreeing) construed the Act, s 12(2a)(b)(ii). He found that a provision in a town planning scheme which prohibited certain activity without planning consent having been applied for and obtained did not prohibit wholly or partially prohibit the continuance of any non-conforming use of the land. His Honour said at [12]:

"... In the context of town planning, there are many things for which licences and consents are required. Such activities would not normally be described by people using ordinary language in a town planning context as 'prohibited'."

135 However, he then went on to find that a provision in a scheme that prohibited certain activity unless "special approval is granted" was a prohibition because it suggested that approval would only have been given in exceptional cases. He said at [20] that:

"... The general effect of the provision is therefore to work a prohibition. There is a clear distinction between such a clause and a clause which requires planning consent to be obtained. In the latter case, planning consent could only be refused on proper planning grounds. In the former case, the activity stands prohibited unless it is a special case."

136 Wines construed a different provision in the Act which is in turn worded quite differently from the Act, s 12(2a)(b)(i). Nonetheless its reasoning is relevant to this case.

137 It is clear from [20] of Wines that Anderson J found as he did because of his interpretation of the meaning of the words "special approval" in the relevant scheme. The mere requirement to obtain the local government's approval for development or land use did not mean that the development or use was prohibited but the requirement for special approval denoted, in Anderson J's view, the need to establish an exceptional case and this meant that the development or land use was prohibited.

138 As the appellant has pointed out, the Scheme stated that the requirements of special approval were advertising of the development application and the requirement of an absolute majority of the appellant's Council. The appellant submits that the requirement to advertise is discretionary. I do not need to decide that issue.

139 It is true that in contrast to various other zones in the Scheme there are no permitted uses which do not require the approval of the appellant's Council for places of heritage value, the definition of development for places of heritage was narrow and the relevant policy statement expresses the intention to retain places of heritage in their present state or restore them to their original state. However, there is nothing in the Scheme to indicate that an exceptional case must be shown before "special approval" was granted.

140 Further, there was evidence before the learned trial Judge that most planning applications dealt with by Council were dealt with as applications requiring special approval.

141 I conclude that whilst the reasoning in Wines is relevant it is not applicable mutatis mutandis to this case.

142 I would therefore allow the appeal and order that the respondent's application for compensation be refused.

• The Affected Land
• The Principal Issues
• EF Scheme
• The Development Application
• Appellant's Claim for Compensation
• The Trial
• Judgment of Trial Judge
• Grounds of Appeal
• Ground 1
• The Appellant's Contentions
• The Statutory Provisions
• Meaning of "Permits" in Section 12(2a)(b)(i)
• Application to this Case
• Appeal Ground 2
• Ground of Appeal 3
• Ground of Appeal 4
• Ground 4A
• Conclusion
• Ground 1
• Ground 3
• Conclusion