BETWEEN : WESTERN AUSTRALIAN PLANNING COMMISSION

Courts and Judges - Interlocutory orders made in long causes matter - Whether O 63A applies

Practice and procedure - Whether appeal entered for hearing without a prior directions hearing deemed to be discontinued - Principles of case management - Late filing of affidavit - Whether discretion to read - Land acquisition and resumption - Valuation - Highest and best use - Extent to which defendant may rely on responsive reports

Rules of the Supreme Court 1971 (WA), O 3 r 5, O 59 r 5(1), O 63, O 63A

First Respondent (First Plaintiff) : Mr D W McLeod & Ms L E Rowley

Second Respondent (Second Plaintiff) : Mr D W McLeod & Ms L E Rowley

Third Respondent (Third Plaintiff) : Mr D W McLeod & Ms L E Rowley

Fourth Respondents (Fourth Plaintiffs) : Mr D W McLeod & Ms L E Rowley

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170

Amatek Ltd v Botman (1995) 127 FLR 160

BHP Petroleum Pty Ltd v Oil Basins Ltd [1985] VicRp 72; [1985] VR 756

Cohen v McWilliam (1995) 38 NSWLR 476

Coles v Wood [1981] 1 NSWLR 723

Cumbes v Robinson [1951] 1 All ER 661

Freehill Hollingdale & Page v Bandwill Pty Ltd [2000] WASCA 150

Jackamarra v Krakouer, unreported; FCt SCt of WA; Library No 960426; 7 August 1996

Ketteman v Hansel Properties Ltd [1987] AC 189

Londish v Gulf Pacific Pty Ltd [1993] FCA 470; (1993) 45 FCR 128

Nominal Defendant v Manning [2000] NSWCA 80; (2000) 50 NSWLR 139

Thompson v Thompson (1942) 59 WN (NSW) 219

Wilson v Metaxas [1989] WAR 285

1 This is an appeal by leave against an interlocutory decision made in the course of management of a long cause matter by Roberts-Smith J. The several plaintiffs to the action, who are respondents to the appeal, owned land within the City of Belmont and abutting the Swan River. On 20 August 1996 their land was resumed by the Western Australian Planning Commission ("Commission"), the appellant, for the purposes of parks and recreation. Negotiations as to the value of land failed and on 8 July 1999 the respondents (who, for the sake of convenience, we shall continue to refer to as "plaintiffs") filed and served a statement of claim in a consolidated action against the Commission. In due course the matter was admitted to the long causes list under the management of Heenan J, until his retirement and thereafter managed by Roberts-Smith J.

2 Procedural and programming orders were made and varied from time to time.

3 On 9 August 2001 an order was made requiring in particular, that responsive expert evidence be exchanged by 31 August 2001. The order further provided:

"Order 16:

A party who fails to provide or exchange evidence, witness statements or outlines of anticipated evidence in accordance with these directions shall not be permitted to rely upon the evidence to which they relate at trial."

4 The Commission exchanged with the plaintiffs what it said was responsive evidence by 31 August 2001.

5 The parties disagreed about several matters, including whether the reports exchanged by the Commission were truly responsive reports. Consequently, the Commission, by chamber summons dated 11 October 2001, sought orders that it be allowed to rely on the reports set out later in this judgment. That application was supported by an affidavit from the solicitor who then had the carriage of the action on behalf of the Commission. Although the affidavit contained what might be regarded as submissions as to why the material was in fact responsive, the documents and reports were not annexed to the affidavit.

6 On 21 February 2002 the plaintiffs filed an amended chamber summons for further directions. The plaintiffs sought orders that the bulk of the responsive material was in fact primary evidence upon which the Commission may not rely at trial. Again the contentious reports were not annexed to the supporting affidavit. Eventually, it occurred to someone that the Court may need to see the reports before ruling on them.

7 So it was that when the application came on before Roberts-Smith J for hearing on 15 March 2002, counsel for the Commission sought to rely upon an affidavit of almost 250 pages which had been filed the previous day. It had not at that stage reached the Court file. Counsel also sought to rely on a further 76 page affidavit sworn that morning and, at that time, not filed.

8 The Judge refused leave to read either affidavit on the basis of the lateness of the material and volume.

9 The Judge thereupon determined the matter without reading the material said to be responsive. He was, however, assisted by the affidavits of the solicitors of the parties and submissions of counsel. In a reserved decision he concluded that the Commission should be denied leave to rely upon evidence which he regarded as primary, not responsive, evidence. This decision is reported as Ryan Nominees Pty Ltd v Western Australian Planning Commission [2002] WASC 45.

10 Those brief facts only need to be stated to demonstrate the unsatisfactory nature of the proceedings throughout and especially on 15 March 2002. This matter was in the long causes list to be managed to an early trial so that the claims of the plaintiffs could be resolved. It is a serious departure from the standards expected in litigation to file, at a very late stage, a considerable volume of material when it should have been obvious for months that the material was relevant and may well be required.

11 The Commission appeals, or purports to appeal, from the decision of the Judge refusing to admit into evidence the affidavits containing the responsive material and the decision to exclude the responsive evidence.

12 The first question which arises is whether this appeal is incompetent.

The rules governing the appeal in this case

13 As the orders made by the Judge were interlocutory orders, no appeal shall lie to the Full Court without the leave of the Judge or of the Full Court: Supreme Court Act s 60(1)(f).

14 An appeal is governed by O 63A, the history of which is described by Owen J in Eaton Developments Pty Ltd v NTC Pty Ltd (1998) 19 WAR 552 at 557. He noted, and we accept, the object of O 63 is to expedite interlocutory appeals to allow the main litigation to progress. Order 63A provides:

"(1) The appeal shall be commenced within 21 days after the order or judgment by filing -

(a) a notice of appeal;

(b) if necessary, an application for leave to appeal and a draft notice of appeal; and

(c) 2 copies of the appeal papers,

...

(3) The appeal papers shall consist of all those papers that the appellant considers are necessary for the Court to determine the appeal, including an extracted copy of the order or judgment under appeal."

There is provision for the respondent to file further papers. There is no appeal book as such.

"(1) As soon as practicable after an appeal is commenced it shall be referred to the Judge or Master who made the order or judgment under appeal, or if that person is absent to another Judge or Master, for a directions hearing in chambers.

(2) At the directions hearing the Judge or Master may -

(a) direct that an application for leave to appeal not be heard ex parte;

(b) direct that an application for leave to appeal be heard together with the appeal;

(c) on any application for leave to appeal, grant or refuse leave;

(d) direct that the appeal or any application for leave to appeal proceed under Order 63;

(e) make any directions that are necessary or desirable for the expeditious hearing of the appeal.

(a) leave to appeal is granted, the draft notice of appeal shall stand as the notice of appeal;

(b) any order is made ex parte, the applicant shall serve any other party with details of the order within 24 hours."

"(1) This Rule does not apply to an appeal that has been directed to proceed under Order 63.

(2) An appeal shall be entered for hearing within 7 days after the directions hearing and if not so entered shall be taken to have been discontinued.

(3) No appeal books are required for the appeal.

(4) The appeal shall be heard by the Full Court constituted by 2 Judges unless a Judge or the Full Court directs otherwise."

17 In Eaton Developments Pty Ltd, Owen J held that there is no power to extend the time prescribed by O 63A r 5(2). The general power to extend time in O 63A r 5 is by necessary implication excluded. Eaton Developments was referred to in Morris & Anor v A1 Pools Pty Ltd & Ors [2000] WASCA 335. We consider Owen J was correct when he said at 557:

"In my opinion, O 63A, r 5(2) should be construed strictly according to its tenor. It is self-executing and it excludes, by necessary implication, the general discretion to extend time that is to be found in O 3, r 5."

18 It is necessary to recount what occurred in the present case.

19 The Judge must have made his reasons available to the parties in advance of their delivery on 21 March 2002 because the Commission applied on a motion ex parte for leave to appeal on that date. That leave was granted, it being ordered that:

"... the Defendant have leave to appeal paragraph 2 of the order of the Honourable Justice Roberts-Smith dated 21 March 2002 within 21 days from the date hereof."

20 The notice of appeal dated 11 April 2002 was filed it appears on 10 April 2002 along with the appeal papers filed pursuant to O 63A r 3(1)(c).

21 On 30 May 2002 the Commission's solicitor who had assumed the carriage of the action wrote to the Listing Coordinator, Supreme Court as follows:

"Please find attached Entry of Appeal for Hearing. It appears that a directions hearing in accordance with Order 63A Rule 4 can be dispensed with as directions were given on 21 March 2002 in accordance with the Order for Leave to Appeal before The Honourable Justice Roberts-Smith. ..."

Was the hearing on 21 March 2002 a directions hearing?

22 The first question to be determined is whether the hearing on 21 March 2002 constituted the directions hearing under O 63A r 4. Order 63A r 3 contemplates that an interlocutory appeal will be commenced by filing a draft notice of appeal with an application for leave to appeal. The procedure here did not follow the terms of O 63A. However, it is not prohibited. The hearing on 21 March 2002 was not therefore the commencement of the appeal. The appeal commenced by filing of the notice of appeal on 10 April 2002, an application for leave to appeal then being unnecessary.

23 This conclusion is reinforced by the fact that the Judge allowed 21 days for the filing of the notice of appeal. A requirement that the appeal be entered for hearing within seven days after the directions hearing would lead to an absurdity.

24 Following the filing of the notice of appeal and appeal papers, the obligation fell on the Commission to refer the matter to the Judge who made the order. The reasons expressed in the letter of 30 May 2002 provide no basis for dispensing with a directions hearing. The order mandates a hearing by requiring that "it shall be referred to the Judge or the Master ..., or if that person is absent to another Judge or Master. ..." The range of matters about which directions may be given, reinforces the need for a hearing, especially the power to make directions that are necessary or desirable for the expeditious hearing of the appeal. This case provides such an example. The appeal has been heard more than a year after a Judge made interlocutory orders which would in due course have led to entry for trial.

25 When the appeal was entered for hearing, O 63A r 4 remained unfulfilled. Counsel for the Commission argues that the appeal is nevertheless competent because, as no directions hearing was held, the time limit under O 63A r 5(2) has not commenced to run. This argument must be rejected. If accepted then a person who wished to frustrate or delay the processes could simply decline to take any steps to refer an appeal to a Judge or Master for directions, leaving it to other parties to do so in due course.

26 The proper construction of O 63A r 5(2) is that the Commission has not complied with the rule. As a matter of fact, the appeal was not entered for hearing within seven days after a directions hearing. The entry for hearing was irregular. Because there has been no directions hearing, the appeal has not been entered in accordance with the rules with the consequence that the appeal is deemed to have been discontinued.

27 The solicitor for the Commission foresaw this possibility and adopted a fallback position. A notice of motion for extension of time within which to commence an appeal and for leave to appeal pursuant to O 3 r 5(1) and O 63A r 3, dated 5 July 2002, was filed on 8 July 2002. The notice indicates that this Court will be moved on the commencement of the hearing for orders that:

"1. That the time within which to commence an appeal under Order 63A against Order No. 2 of the Orders of the Honourable Justice Roberts-Smith made 21 March 2002 be extended to the day of the hearing of Appeal Ful 57 of 2002.

2. That an order granting leave to appeal be granted in the same terms of the Order Granting Leave to the Defendant to Appeal made by the Honourable Justice Roberts-Smith on 21 March 2002.

3. That the Notice of Appeal filed in Appeal FUL 57 of 2002 stand as the Notice of Appeal in this appeal.

4. That the directions hearing required pursuant to Order 63A Rule 4 be dispensed with.

5. That the Entry of Appeal for Hearing filed in FUL 57 of 2002 stand as the Entry for Appeal for Hearing in this appeal.

6. That the costs of this application be costs in the cause."

28 The effect of O 63A r 5(2) is that the previous appeal was discontinued. It has not been dismissed. Therefore, it is open for this Court to entertain the notice of motion. That said, it is nothing more than a crude attempt to overcome an obstacle, entirely of the Commission's making, in failing to ensure that there was a directions hearing held. The Commission filed an affidavit, sworn by the new solicitor with the conduct of the matter, and dated 5 July 2002, in support of the notice of motion. It is unnecessary to set out all the details of that affidavit. The crux of the affidavit is contained in par 19 which reads:

"19. Today, 5 July 2002, I telephoned [the previous solicitor] to ascertain his view as to what action then appeared to him to be necessary when he last dealt with the matter. He advises me that in his view there had been a need for a directions hearing and that he had assumed that Court registry staff on their own initiative would be referring the appeal to a Judge for a directions hearing."

29 This is a plainly insufficient basis upon which to allow the notice of motion for extension of time.

30 The only basis upon which this Court should entertain the notice of motion is if the failure to do so would create an irremediable miscarriage of justice. This involves a consideration of the merits of the appeal and whether those merits are such that leave to extend time should be granted. The respondents have been at all times aware of the appeal and have not suffered any prejudice by the irregularity. It must be borne in mind also that the fault appears to be entirely that of the solicitors for the Commission and not the litigant: Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196. It is therefore to the merits that we now turn.

31 As we have explained above, by order dated 21 March 2002, the Judge ordered, amongst other things, that the application of the Commission dated 11 October 2001 be dismissed. In its application, the Commission sought orders to enable it to rely on the following expert evidence disclosed in a letter of the Crown Solicitor's Office to Messrs McLeod & Co dated 31 August 2001:

• Reports of Wood & Grieve dated 1 November 2000, 1 May 2001 and 1 June 2001;

• Report of Golder Associates dated 28 March 2001 together with a curriculum vitae of Doug McInnes;

• Letter from Ministry for Planning to City of Belmont dated 5 June 2001 with enclosed copy plans and report of the Ministry for Planning on those plans dated June 2001;

• Letter from City of Belmont to senior urban designer WAPC dated 27 June 2001;

• Two sets of revised "before" and "after" drawings prepared by the senior urban designer Ministry for Planning;

• Report from Messrs Ralph Beattie Bosworth dated 31 August 2001.

32 The Commission's application was supported by an affidavit of the solicitor who then had the carriage of the matter on behalf of the Commission sworn 11 October 2001.

33 The affidavit explained that, in conformity with directions of the Court made on 9 August 2001, the documents referred to in the application were "exchanged" with the defendant's solicitors by 31 August 2001.

34 In its application dated 11 October 2001, the Commission also sought an order that the planning report of K A Adam & Associates dated August 2001 and filed on behalf of the plaintiffs as a responsive expert planner's report, may not be relied upon by the plaintiffs without leave being applied for and granted.

35 In his affidavit, the Commission's solicitor noted that the report of K A Adam & Associates stated that, amongst other things, the general purpose of the report was to investigate and advise upon the development potential of the resumed land as it would have been at the date of resumption and, specifically, that the report had been prepared in response to a planning report of Urban Focus previously filed on behalf of the Commission as part of its primary expert planning evidence.

36 The Commission's solicitor further stated in his affidavit that the Commission contended that, whilst the report of K A Adam & Associates claimed to be specifically in response to the earlier planning report of Urban Focus, it was in reality a "general planning report in support of the plaintiff's case. On that basis, the Commission submitted that the report of Mr Adam may not be relied upon by the plaintiff's except with the leave of the Court [sic]".

37 The Commission's solicitor noted that, while expert reports had earlier been filed on behalf of the plaintiffs as part of their primary expert evidence as to architectural survey and developmental matters in relation to a hypothetical development on the resumed land the subject of the compensation action, the "assumptions as to planning matters" relevant to the proposed hypothetical development options put forward in that primary expert evidence had not been verified by any expert planning consultant. Thus, the solicitor suggested on behalf of the Commission that the report of K A Adam & Associates was filed in order to overcome a deficiency in the plaintiffs' expert evidence and was not responsive evidence.

38 By contrast, the solicitor for the Commission asserted in his affidavit that the expert reports exchanged on behalf of the Commission and the subject of the Commission's application dealt with hypothetical development design options prepared by the Ministry for Planning and were put to the City of Belmont to enable the City to provide a "critique of the hypothetical development potential" of the resumed land and "in particular to respond to the hypothetical development design options submitted by the plaintiff's solicitors [sic] under the report of Morley Davis Architects, etc". In this regard, at par 7 of his affidavit, the Commission's solicitor stated:

"The letter from City of Belmont to Senior Urban Designer WAPC dated 27 June 2001 enclosed in the defendant's solicitors letter dated 31 August 2001 addressed the relative merits of the two different sets of designs proposed, in light of advice previously provided by the City of Belmont as contained in the planning report of Urban Focus. I verily believe that the evidence enclosed in the defendant's solicitors letter dated 31 August 2001 is a response to the hypothetical development proposal previously put forward by the plaintiff's solicitors [sic]."

39 The position of the Commission on the hearing of its application was that, if the Court disagreed with the Commission's submission that the evidence referred to in the application was not wholly responsive to the plaintiffs' expert evidence, then the Commission sought leave of the Court to call and rely upon such evidence in any event.

40 The plaintiffs, by their amended chamber summons for further directions dated 21 February 2002 took issue with the Commission concerning the appropriate characterisation of the expert reports referred to in the Commission's application. The plaintiffs expressly sought orders that these reports were properly to be characterised as "primary architectural/design/ planning/engineering evidence" (that is, of one type or the other) upon which the Commission may not rely at trial without the leave of the court.

41 In their amended application, the plaintiffs also sought an order that the Commission should not be entitled to rely at trial upon expert valuation evidence and related documents itemised in par 2A of the amended application.

42 In the event, the Judge on hearing the two applications refused the application of the plaintiffs for an order in terms of par 2A, but, in effect, granted the orders sought by the plaintiffs in pars 1 and 2 of the plaintiffs' application. The Judge achieved this by expressly dismissing the Commission's application dated 11 October 2001, but not making orders on the respondents' application to similar effect. The Judge also made an order in terms of par 3 of the plaintiffs' amended chamber summons to the effect that the planning report of K A Adam & Associates dated August 2000 is properly characterised as a responsive expert report and so may be relied upon at trial without the need for further leave of the Court.

43 In a related appeal, FUL 53 of 2002, the plaintiffs appealed against the decision of the Judge refusing to make an order in terms of par 2A of the plaintiffs' application dated 21 February 2002. That appeal was dismissed by this Court on 6 May 2003, with ex tempore reasons provided by the presiding Judge (McKechnie J).

44 As we have observed above, the action, to the point that the Judge made these various orders, appears to have been conducted in a less than satisfactory manner on behalf of the Commission. This appears to have resulted in the Judge on 9 August 2001, making a number of orders in quite peremptory terms, including O 16, that a party who fails to provide evidence, witness statements or outlines of anticipated evidence in accordance with the directions made on that day should not be permitted to rely upon the evidence to which they relate at trial.

45 The original application of the plaintiffs (the amended version of which was filed 21 February 2002) was filed on behalf of the respondents on 27 September 2001 and supported by an affidavit of the solicitor for the plaintiffs sworn 27 September 2001. A second affidavit of the plaintiffs' solicitor sworn 11 March 2002 was filed in support of the amended chamber summons. The Commission's solicitor then swore a further affidavit on 14 March 2002 in support of the Commission's application of 11 October 2001 and apparently filed it the same day.

46 On the day of the hearing of the two applications, counsel for the Commission attempted to rely upon a further affidavit the Commission's solicitor had sworn that very day, 15 March 2002. The Judge refused to accept that affidavit by reason of its lateness. He also refused leave to read most of the solicitor's affidavit of 14 March by reason of its volume and lateness. We will return to these matters shortly. What may be noticed at this point is that the affidavit of the solicitor of 14 March 2002 belatedly attempted to put into evidence the expert reports and other documents referred to in the Commission's application dated 11 October 2001. In the further affidavit of the Commission's solicitor dated 15 March 2002, he annexed a copy of a letter from the plaintiffs' solicitors to the Commission's solicitor dated 19 December 2000 together with the reports referred to therein (excluding the set of drawings referred to). The reports included those of Morley Davis Architects and Page Kirkland Ward filed by the plaintiffs in the action, to which the Commission said its expert reports were responsive.

The question of the lateness and volume of the Commission's affidavits

47 When the two applications came on for hearing before him, the Judge plainly had not had the opportunity to consider the Commission's solicitor's affidavit dated 14 March. Indeed, it had not yet reached the court file. Although it was voluminous (in excess of 250 pages), we note that this was mainly on account of the annexure of the documents the subject of the Commission's application. The Judge refused leave to the Commission to read most of the affidavit by reason of "the volume of the material and the lateness of it". However, he gave leave to rely upon a small portion of it, in respect of par 8 and the annexures referred to in pars 8 and 9. He struck out the balance. The Judge also refused leave to the Commission to rely upon the affidavit of the solicitor sworn 15 March 2002, "due to the lateness of the material".

48 Paragraph 8 of the solicitor's affidavit sworn 14 March 2002 and the annexures referred to in pars 8 and 9, which the Judge allowed to be read, made reference to par 7 of the plaintiffs' solicitor's second affidavit and dealt with that aspect of the plaintiffs' application seeking orders that the Commission not be entitled to rely upon the valuation evidence it had filed. In effect, the Judge allowed materials concerning the valuation evidence to go in through the affidavits of the Commission's solicitor, but nothing else. Accordingly, the materials in the affidavits of the Commission's solicitor dated 14 March and 15 March 2002 going to the "responsiveness" of the expert reports and other documents referred to in the Commission's application dated 11 October 2001, were excluded from the Court's consideration.

49 We can fully understand that the Court, with prior experience of the progress of the action, was considerably inconvenienced by the lateness of the affidavits lodged on behalf of the Commission. In that regard, O 59 of the Rules of the Supreme Court had not been adhered to.

50 No doubt, it is a question of discretion in each case where the issue arises whether a late-filed affidavit in support of an application should be received by a court. Questions of good case management arise, as do competing factors going to the interests of justice in a given context: see Queensland, State of v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 at 154; Tremeer v City of Stirling [2002] WASCA 281, pars [36] - [38]. Depending on the nature of an application, and the consequences of refusing it, good case management may require a Court to refuse to allow a party to file such an affidavit. In this case, the Judge took the view that the size and lateness of the two affidavits tendered by the Commission should preclude the Commission from relying upon them.

51 However, in our view, having regard to the potential consequences of such a ruling, the Court might have considered other means of dealing with the Commission's non-compliance with the Rules in producing such a volume of materials, if not at the twelfth hour, then well after the eleventh hour. We say this because the potential consequence of not taking such materials into account was that, by reason of the Court not having the opportunity to consider the very documents the subject of the application, the Court might err in failing to characterise the documents as "responsive" expert reports when, on closer examination, they may be found truly to be responsive. By taking the course of action it took, the Court was left with what really amounted to derivative accounts of the content and purport of the documents in question provided in the affidavits of the solicitors for the parties. Of course, if the Court were to rule that the documents were non-responsive, then the Commission would not be entitled to rely upon them at trial unless the Court further agreed to grant leave for them to be filed. However, consideration of the latter application, which was the alternative form of relief sought in the Commission's application dated 11 October 2001, would also be prejudiced if the very documents in respect of which such leave was sought were not before the Court.

52 If these documents were effectively to be excluded from the Commission's evidence at trial, the Commission would be unable to rely upon them in any positive way and would be left to rely upon cross-examination of the plaintiffs' expert witnesses in relation to the matters with which they dealt. While cross-examination is a very useful tool in civil litigation, especially where expert witnesses are concerned, the inability of a defendant to present a positive case would usually be considered a significant restriction on a defendant's ability to defend an action.

53 The Judge also refused to allow the two affidavits of the Commission's solicitor sworn 14 March 2002 (save for the portion as to the valuation evidence) and 15 March 2002 to be read, not only because of their lateness, but also because of their volume. Sheer volume, on its own, will not preclude the late reception of an affidavit in an appropriate case. Sometimes, volume can be deceptive in that it may contain a number of discrete documents annexed to a relatively short affidavit. The material matters in the annexures may have a narrow compass. The whole of a lengthy document may have been annexed by a deponent to ensure that the Court and other parties are not misled by the production of only an abstracted portion of the document. Often, the Court may seek to ascertain whether the voluminous nature of an affidavit belies its true nature and relevance to the matters in issue on the application before the Court. In some cases, depending on what that inquiry discloses, an adjournment of an application may commend itself. In other cases, strict adherence to the Rules may be required.

54 We think, taking all factors into account, that the Commission should not have been prevented from relying on its late-filed affidavits in this case. If necessary, an adjournment, with appropriate costs penalties, could have been considered to enable the Commission fully to put its case.

55 However, the question of substance which remains now that all the materials upon which the Commission wishes to rely in its defence of the action are before us, is whether the expert reports identified by the Commission in its application are "responsive" to those filed on behalf of the plaintiffs.

Are the Commission's expert reports "responsive"?

56 The Judge had a degree of information before him in the solicitors' affidavits as to the content of the documents the subject of the Commission's application. The Court noted that the Commission's experts in their primary expert valuation evidence had cast their opinions on the basis that the appropriate method of valuation was "comparative sales" and did not advance an opinion based upon the development potential of the land. On the other hand, the plaintiffs' expert valuation witnesses had put forward a particular hypothetical development proposal which they contended was the highest and best use of the resumed lands.

57 The Judge considered that what the Commission sought to do, by having the right to rely upon the documents the subject of its application, was to put forward its view of what a hypothetical development of the resumed lands might comprise if this alternative means of valuing the resumed lands were to be entertained. In this respect, the Judge referred to what the Commission's solicitor had stated in par 7 of his affidavit dated 11 October 2001.

58 The Judge noted that the plaintiffs argued that the Commission wished to put forward an alternative development proposal that in no way purported to respond to nor comment upon the plaintiffs' hypothetical development plans and reports and so could not be considered "responsive evidence" at all, but primary evidence which could not be relied upon without the leave of the Court. The Judge noted that the plaintiffs argued that it was open to the Commission to put forward a hypothetical development plan supported by engineering and planning reports when it exchanged primary evidence by 15 December 2000 and that it was not now open for it to do so. The Judge noted the plaintiffs' characterisation of the alternative development proposal identified on behalf of the Commission as a "fresh design".

59 The Judge applied what he had earlier said in Trandos v Western Australian Planning Commission [2002] WASC 37 at [35] and [37] to the effect that if evidence responds to or answers the other party's primary evidence, rather than merely gratuitously asserting "new" evidence, then it is "responsive" within the meaning of case management orders made by the Court; and that the test of the "responsiveness" requires a factual analysis of the document in issue, the focus of which should be on matters of substance rather than form. With respect, we agree with what the Judge said in that regard.

60 The Judge then turned to the materials that were before him in order to determine whether, as a matter of substance, the allegedly "fresh design" that the Commission sought to rely upon, was the subject of responsive or primary expert evidence. The Judge noted the Urban Focus planning report dated December 2000 filed on behalf of the Commission describes the location and topography of the area in which the subject land lies and sets out the historical development context and current zoning of the land. It also contains an explanation of what is termed the "Springs Concept Plan" as at 20 August 1996. Paragraph 7 of the report covers the likely alternative zoning of the foreshore (being the resumed land in this case) as at 20 August 1996 (assuming the land had not been reserved in the Metropolitan Region Scheme) and addresses the City of Belmont's likely response to any development proposal, having regard to the relevant statutory schemes and policies of the council and the Commission.

61 The Judge then noted that he did not have "the benefit of the materials in respect of the defendant's alternative development proposal". That, of course, was because the Judge had precluded the Commission from placing those materials before him through the affidavit of the Commission's solicitor.

62 The Judge then had regard to the position of the plaintiffs as articulated in a letter from their solicitors to the Commission's solicitor dated 25 September 2001. In that letter, it was asserted that the Commission's development proposals were "new proposals" upon which the plaintiffs' experts had not had an opportunity to comment, and which should have been exchanged at the primary evidence stage. It was contended in the letter that the pleadings had made it plain from the outset that the plaintiffs' position is that the highest and best use of the land is for urban development.

63 The Judge stated that, in the circumstances, the onus must be on the plaintiffs to satisfy him, on the balance of probabilities, that as a matter of fact, the material is not responsive. He then found it was not correct to say that the Urban Focus planning report is predicated on a comparative sales approach. While the valuation evidence filed to that point on behalf of the Commission, may be so limited, the Judge considered the Urban Focus report addressed the issue of potential development of the subject lands. He noted that it refers to planning constraints and makes a number of assumptions leading to the expressions of opinion about the nature and extent of development that would be likely to have been approved. This observation appears to have led the Judge ultimately to accept the plaintiffs' contention that, by reason thereof, the Commission's earlier valuation evidence should also have addressed hypothetical development proposals in respect of the subject lands.

64 For our part, we consider that, in a case such as the present, it would be surprising if a report of a planning expert such as Urban Focus did not express an opinion about the nature and extent of development which would be likely to have been approved on the site, even if the valuation approach taken on behalf of the Commission was limited to the comparative sales approach. That is because the comparative sales technique must necessarily be in respect of sales of land having comparative development potential. It is necessary, under this method, as under other methods, to identify the value of resumed land with all its potentialities: Boland v Yates Property Corp Pty Ltd [1999] HCA 64; (1999) 74 ALJR 209 at [79] per Gleeson CJ; at [271] - [273] and [280] - [291] per Callinan J. The comparative sales technique has long been considered to be the conventional method of valuation: see Riverbank Pty Ltd v Commonwealth (1974) 48 ALJR 483 at 484.

65 However, another method often accepted for the purpose of valuing land that is ripe for development is the hypothetical development method or land residual technique: see, for example, Boland v Yates Property Corp Pty Ltd (supra) at [283] - [287] per Callinan J; Brewarrana Pty Ltd v Commissioner of Highways (1973) 6 SASR 541 at 552.

66 Ordinarily, one would not expect the resuming authority, in its primary evidence concerning valuation, where expert reports are exchanged, to go to the trouble of formulating a hypothetical development of the subject land unless it considered the hypothetical development method obviously to be apposite in the circumstances of the case. Here, the Commission did not initially consider the hypothetical development method to be so, but the plaintiffs did. Following the exchange of expert valuation reports, it soon became apparent that the plaintiffs contended for a valuation based upon the hypothetical development method and the Commission contended for a valuation based on the comparative sales technique.

67 In light of the plaintiffs' planning and valuation evidence, the Commission obviously saw the need to respond to the hypothetical development proposal put forward on behalf of the plaintiffs in the event this method were to be adopted by the Court. It then filed the expert reports it considered "responsive". By these reports, the Commission proposed to put in evidence engineering and other relevant evidence concerning what was physically achievable on the resumed land, but for resumption, as well as design evidence that a dense residential unit development of a certain type only would have been feasible; something less valuable than the plaintiffs contend for.

68 In particular, the Commission contends that, if it were able to lead its evidence as to what alternative dense residential unit development might be possible on Lots 23 and 24, it would be able to show that, rather than the plaintiffs' contention that 48 units would be possible, only 40 units could be developed, but for the resumption. Additionally, the Commission says that such evidence would enable it to prove that, as affected by the resumption, 37 units are able to be developed on the site. Thus, whereas the plaintiffs say that the difference between the unaffected and affected development scenario is 11 units, the Commission, if able to lead its evidence, would say it is only three units. In a similar way, the Commission would say that on Lots 34 and 35 only 16 units would be lost by the resumption, compared with the 29 units that the plaintiffs say would be lost.

69 To make goods its contention, the Commission in its application dated 11 October 2001 sought to rely upon materials prepared by the Senior Urban Designer Ministry for Planning for the comment of the City of Belmont dated 5 June 2001, as well as the City's response to the Senior Urban Designer dated 27 June 2001. These documents identify, by reference to the relevant requirements of the planning laws administrated by the City, what is acceptable and unacceptable in the hypothetical development proposal produced by Morley Davis Architects on behalf of the plaintiffs. In our view, that information is responsive to a particular hypothetical development proposal put forward by the plaintiffs and does not stand alone.

70 Similarly, the report of Messrs Ralph Beattie Bosworth to the Crown Solicitor's Office dated 31 August 2001 purports to cost Morley Davis Architects' drawings, as well as the Ministry for Planning's drawings in respect of the hypothetical development each says is possible on the site. It seems to us that, when one has regard to what is the purpose of the alternative hypothetical development proposal developed on behalf of the Commission, namely, to show what part of the respondents' proposal is not able to be implemented, and, thus, what might be possible having regard to the limiting planning/engineering/design factors, the difference in costing, which affects valuation, becomes relevant and evidence concerning it is responsive to the plaintiffs' valuation evidence.

71 The report of Wood & Grieve, engineers, to the Crown Solicitor's Office dated 1 November 2001 constitutes a review of a report prepared by Parker Consulting WA Pty Ltd which relates to the plaintiffs' hypothetical alternative development proposal. The Wood & Grieve report notes the "City of Belmont's planning proposals for the area" and bears on the assumptions as to what development is possible or feasible on the resumed land. These matters, in our view, all appear to go to the substratum upon which the valuation evidence to be given on behalf of the plaintiffs is expressed and affects also the alternative hypothetical development proposal that the Commission says might be achievable in lieu of the plaintiffs' hypothetical proposal. The same, we believe, should be said of the reports of Wood & Grieve dated 1 June 2001 and 1 May 2001. The three reports need to be read together to appreciate their purpose and intent.

72 The report of Golder Associates dated 28 March 2001 (together with the curriculum vitae of its author) deals with geotechnical advice and relates to a review of reports previously prepared by Urban Focus dated December 2000, the Morley Davis Architects reports and the Page Kirkland Ward reports concerning the resumed properties. It bears directly on interpretations of what Parker Consultants Pty Ltd have advised in respect of the plaintiffs' hypothetical development proposal. The Golder Associates' report appears directly responsive to the plaintiffs' primary expert reports relating to such matters.

73 In summary, the Judge seems to have adopted the view that any evidence that touches upon the "highest and best use" of the resumed land should have been dealt with, in this case, in the primary expert evidence filed on behalf of the Commission. In our view, such a course will usually be required, but not invariably so. In the circumstances of this case, as we have outlined them, where the plaintiffs have put forward primary expert valuation evidence based on a hypothetical development method, where the Commission's experts initially considered that the comparative sales technique was the most appropriate valuation method, we consider the Commission is entitled to respond to the plaintiffs' evidence, including by way of testing the evidence or assumptions that underlie the realisation of that hypothetical development proposal, and by measuring the hypothetical development proposal against some alternative hypothetical development proposal which the Commission says may possibly be achievable. It seems to us that in the particular circumstances of this case, the alternative hypothetical development proposal put forward by the Commission would not have been conceived, save in response to the particular hypothetical development proposal put forward on behalf of the plaintiffs. The fact that the Commission's response requires the development potentialities of the resumed land to be further considered does not detract from the responsive nature of the proposed expert evidence.

74 We consider the Commission's proposed expert evidence should be characterised as responsive to the expert evidence filed on behalf of the plaintiffs. For that reason we would allow the appeal.

75 We consider that principles of good case management should not operate so as to prevent the defendant from relying on the affidavits of the Commission's solicitor sworn 14 and 15 March 2002 which, when considered with the other evidence in relation to the application before the Judge, raise a fairly arguable defence in the action: Tremeer v City of Stirling (supra).

76 We recognise that, by the Commission being permitted the opportunity to rely upon the expert evidence referred to in its application dated 11 October 2001, there may be a need, in relation to the hypothetical development proposal put forward on its behalf, for the plaintiffs to have the opportunity to consider and respond to that evidence. In their amended chamber summons dated 21 February 2002, the plaintiffs proposed in par 6(a) that, in the event that leave be given to the Commission to rely upon this further expert evidence, further orders should be made permitting the plaintiffs to exchange supplementary architectural/design/planning/engineering valuation evidence by six weeks from the date of that order. We are prepared to make an order in terms of par 6(a) of the amended chamber summons of the plaintiffs. As to the question of costs on the appeal, we will hear further from counsel for the parties.