Bakota v City of Wanneroo

[2022] WASC 462

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   BAKOTA -v- CITY OF WANNEROO [2022] WASC 462

CORAM:   CURTHOYS J

HEARD:   22 - 25 AUGUST 2022, 5 - 7, 13 SEPTEMBER 2022

DELIVERED          :   23 DECEMBER 2022

FILE NO/S:   CIV 1145 of 2015

BETWEEN:   IVAN BAKOTA

RUZICA BAKOTA

Plaintiffs

AND

CITY OF WANNEROO

Defendant

Catchwords:

Resumption and acquisition of land - Compensation under s 241 of the Land Administration Act 1997 (WA) - Valuation of land - Knowledge of the hypothetical Spencer parties - Highest and best use of land

Resumption and acquisition of land - Injurious affection - Proper construction of s 241(7) of the Act - Whether damage to remaining land caused by the carrying out of the public work or the proposal to carry out the public work

Legislation:

Land Administration Act 1997 (WA), s 241

Result:

Compensation awarded plus interest

Category:    B

Representation:

Counsel:

Plaintiffs	:	P G McGowan & L E Rowley
Defendant	:	P D Lochore

Solicitors:

Plaintiffs	:	Rowley Legal
Defendant	:	Castledine Gregory

Cases referred to in decision:

Bombara [2021] WASAT 141

Cairns City Council v CMB No 1 Pty Ltd (1997) 96 LGERA 306

Cerini v Minister for Transport [2001] WASC 309

Coastal Estates v Bass Shire Council [1993] 2 VR 566

Commissioner of Highways v Shipp Bros Pty Ltd (1978) 19 SASR 215

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

Greenslade v Hiew [2022] WASCA 47

Italiano v Water Corporation [No 2] [2020] WASC 112

Kelliher v Commissioner for Main Roads [No 2] [2015] WASC 478

Kelly v Western Australian Planning Commission [2006] WASC 208

Lenz v Commissioner of Main Roads [2012] WASC 6

Longford v Commissioner of Stamp Duties (1953) SR 53 (NSW) 342

McKay v Commissioner of Main Roads [No 7] [2011] WASC 223

Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW [2005] NSWLEC 467

Mir Bros v RTA NSW [2006] NSWCA 314

Mount Lawley Pty Ltd v Western Australian Planning Commission [2006] WASC 82

Parramatta City Council v Valuer-General (1965) 10 LGRA 160

Pollock v Wellington (1996) 15 WAR 1

Pownal v Conlan Management Pty Ltd (1995) 12 WAR 370

Pringle v Minister [1968] 1 NSWR 509; (1967) 14 LGRA 280

Roads and Traffic Authority of NSW v Hurstville City Council [2001] NSWCA 11; (2001) 112 LGERA 223

Royal Sydney Golf Club v Federal Commissioner of Taxation [1955] HCA 13; (1955) 91 CLR 610

Spencer v The Commonwealth [1907] HCA 82; (1907) 5 CLR 418

Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56

Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295

Western Australian Planning Commission v Kelly [2007] WASCA 160

CURTHOYS J:

Introduction

1. This case concerns a claim by the plaintiffs, Ivan and Ruzica Bakota, for a claim for compensation under s 241 of the Land Administration Act 1997 (WA) (LAA). The claim concerns the taking of an area of 5,847 sqm of the Bakotas' land at 185 Mary Street, Wanneroo, (being Lot 3 on Plan 7975) (Lot 3), by the defendant, the City of Wanneroo (the City).

2. The date of taking for the purposes of valuation was 23 January 2012.

3. The Bakotas have used Lot 3 as a market garden since 1985.  A number of sheds were situated on the land.  Part of one of the sheds was used by the Bakotas as a place of residence.

4. Prior to the taking, the Bakotas' land had a wide frontage with access to Mary Street on the southern boundary of their land.  This was the only access to a gazetted road from Lot 3.

5. The City took the land in order to extend Lenore Road which is situated to the west of Lot 3.  The land taken was a roughly triangular portion on the south-west corner of Lot 3.  The effect of the taking was to considerably reduce the frontage of Lot 3 to Mary Street.  This had the effect of considerably reducing the access of Lot 3 to Mary Street which had a significant impact on the future sub-divisibility of the remaining land.  The taking effectively landlocked Lot 3 for anything other than a market garden.

6. In addition, the Bakotas had to relocate the sheds and demolish the shed in which they were residing.  The only issue arising from the demolition and relocation of the sheds is whether the Bakotas are entitled to compensation for the loss of their residence in the shed.

7. The City made an advance payment of compensation to the Bakotas of $1,156,850.07 on 4 September 2012.

8. The City now asserts that it has overpaid the amount of compensation.  It counterclaims for what it says is the amount overpaid.

9. Annexure 1 shows the lot numbers prior to the taking.  The subject land was then identified as Lot 3.

10. Annexure 2 shows the lot numbers after the taking by the City.  The remaining subject land was then identified as Lot 9003.

11. Annexure 3 shows the proposed new road in red running parallel to Mary Street towards the proposed roundabout on Lenore Road (New Road).

12. Annexure 4 shows the position of the proposed roundabout.

13. Lot 3 and Lot 9003 and surrounding lots have, to some extent, been identified interchangeably in the reports and the evidence.  Nothing particularly turns on the alternative use of the identification.

14. For the reasons that follow, I have found primarily for the Bakotas.  These reasons are based primarily on the Bakotas' submissions.  I thank the parties for their detailed submissions.

The relevant legislation

1. The Bakotas' claim is brought under s 241 of the LAA which relevantly provides:

   (1)In determining the amount of compensation (if any) to be offered, paid, or awarded for an interest in land taken under Part 9, regard is to be had solely to the matters referred to in this section.

   (2)Regard is to be had to the value of the land with any improvements, or the interest of the claimant in the land, assessed as on -

   …

   (c)in the case of an interest to which paragraphs (a) and (b) do not apply - the date of the taking,

   and discounting any increase or decrease in value attributable to the proposed public work.

   (6)Regard is to be had to the loss or damage, if any, sustained by the claimant by reason of -

   (a)removal expenses; or

   (b)disruption and reinstatement of a business; or

   (c)the halting of building works in progress at the date when the interest is taken and the consequential termination of building contracts; or

   (d)architect's fees or quantity surveyor's fees actually incurred by the claimant in respect of proposed buildings or improvements which cannot be commenced or continued in consequence of the taking of the interest; or

   (e)any other facts which the acquiring authority, the court, or the State Administrative Tribunal considers it just to take into account in the circumstances of the case.

   (7)If the fee simple in land is taken from a person who is also the holder in fee simple of adjoining land, regard is to be had to the amount of any damage suffered by the claimant -

   (a)due to the severing of the land taken from that adjoining land; or

   (b)due to a reduction of the value of that adjoining land,

   however, if the value of any land held in fee simple by the person is increased by the carrying out of, or the proposal to carry out, the public work for which the land was taken, the increase is to be set off against the amount of compensation that would otherwise be payable under paragraph (b).

   (8)If the interest in land is taken without agreement, an amount considered by the court or the State Administrative Tribunal or, for the purposes of making an offer, by the acquiring authority, appropriate to compensate for the taking without agreement may be added to the award or offer.

   (9)The additional amount under subsection (8) must not be more than 10% of the amount otherwise awarded or offered, unless the court or the State Administrative Tribunal, or, for the purposes of making an offer, the acquiring authority, is satisfied that exceptional circumstances justify a higher amount.

   (10)If the interest in land taken produces any rent or profits, then at the option of the acquiring authority, either -

   (a)the amount of the rent or profits received by the acquiring authority, less the reasonable cost of collection, for the period from the date of registration of the taking order to the date of the payment of compensation or the date of the award, whichever is earlier, is to be added to the compensation payable; or

   (b)interest is to be paid on the amount of compensation for the same period, at the rate of 6% per annum, or such higher rate as the acquiring authority, the court, or the State Administrative Tribunal considers adequate having regard to the circumstances of each case,

   but if the interest in land ceases to produce any rent or profits after the taking, interest is to be paid in accordance with paragraph (b).

   (11)If the interest in land taken does not produce any rents or profits, interest is to be paid at the rate prescribed under section 8(1)(a) of the Civil Judgments Enforcement Act 2004 as at the date of entry for construction or carrying out of the work or the date of registration of the taking order, whichever is earlier, and the interest is payable from -

   (a)the date of the service of the claim on the acquiring authority; or

   (b)the date of entry for construction or carrying out of the work,

   whichever is earlier, to the date -

   (c)when the offer was served on the claimant, if the compensation awarded by the State Administrative Tribunal or the court of competent jurisdiction is not more than the amount offered by the acquiring authority; or

   (d)of settlement of the claim, in any other case.

   (12)Subject to subsections (10) and (11) -

   (a)when any amount representing an advance payment of compensation is paid to a claimant, interest on the total amount of compensation is payable only to the date of the first payment, and interest is payable thereafter only on the balance outstanding from time to time; and

   (b)when any amount is offered by the acquiring authority as an advance payment of compensation under section 248 and the offer is not accepted by the claimant within 30 days of the day on which it was made, no interest is payable thereafter in respect of the amount so offered.

The Bakotas' claim

1. The Bakotas' final claim is set out in the table below.

Category	Bakotas' primary claim - Rural value	Bakotas' alternative claim - Six years deferred
Value of the land taken (s 241(2) LAA)	$643,170	$643,170
Reinstatement of a business (s 241(6)(b) LAA)	$239,708	$239,708
Severance	$2,836,872	$1,315,345
Injurious affection	$14,530	$69,192
Residential use of the remaining land claimed	$202,517 - rental claim	$202,517 - rental claim
Residential removal	$667.08	$667.08
Subtotal	$3,937,464	$3,470,974 (rounded)
10% solatium	$393,746	$347,097
Total	$4,331,210	$3,818,071

City's admissions

1. The City admitted the following claims and amounts:

Category	Bakotas' primary claim - Rural value	Bakotas' alternative claim - Six years deferred	Admitted
Value of the land taken (s 241(2) LAA)	$643,170	$643,170	$438,525
Reinstatement of a business (s 241(6)(b) LAA)	$239,708	$239,708	$239,708 (conceded)
Severance	$2,836,872	$1,315,345	$nil
Injurious affection	$14,530	$69,192	$125,729
Residential use of the remaining land	$202,517 - rental claim	$202,517 - rental claim	$nil
Residential removal	$667.08	$667.08	$nil
Subtotal	$3,937,464	$3,470,974 (rounded)	$803,962
10% solatium	$393,746	$347,097	$80,396
Total	$4,331,210	$3,818,071	$884,358

Legal principles

1. In its submissions, the City set out the relevant legal principles.  The Bakotas did not take issue with those principles, save as to the use of post-taking evidence which is dealt with below.  The City's submissions were based on the decisions of Beech J in McKay v Commissioner of Main Roads [No 7][1] and Pritchard J in Kelliher v Commissioner for Main Roads [No 2].[2]

Section 241(2) LAA

[1] McKay v Commissioner of Main Roads[No 7][2011] WASC 223 [144] - [178].

[2] Kelliher v Commissioner for Main Roads [No 2] [2015] WASC 478 [110] – [115].

1. Value is to be determined by identifying the price of a notional bargain between a hypothetical purchaser and vendor who are prudent, well informed and willing, but not anxious to complete the exchange on the taking date.  This hypothetical scenario is explained in Spencer v The Commonwealth.[3]

   [3] Spencer v The Commonwealth [1907] HCA 82; (1907) 5 CLR 418 (Spencer), 432 (Griffith CJ) and 441 (Isaacs J).

2. Whether there should be a discount for magnitude in using the per hectare rate from a sale of a smaller property as a comparable sale to assess the value of a larger property, depends on the evidence.[4]

   [4] Western Australian Planning Commission v Arcus Shopfitters Pty Ltd [2003] WASCA 295 [80] ‑ [82] (McLure J, Anderson & Steytler JJ agreeing).

3. Along with deciding the most advantageous use – the highest and best use or uses for valuation,[5]  the court may need to consider what potential the Spencer parties see for a more profitable use should a contingent event occur, for instance, rezoning.

   [5] Kelliher [102]

4. In assessing this, the court is considering how the Spencer parties would have viewed the land's potential; the court is not acting as a planning authority.[6]

   [6] McKay [No 7] at [1503].

5. While the court may need to make findings as to the likelihood of an event occurring in the future, and if it occurred, what impact the event would have on the value, in doing so, it must only take into account what was known at the date of the taking of the land (excluding any subsequent happenings).[7]

   [7] Kelliher [118]; McKay [7] [339] - [343].

6. One exception is that evidence of advice given after the date of taking may, in some cases, be admissible, because the inference is open that the same or similar advice would have been given at the taking date.[8]

   [8] Kelliher [120] citing McKay [No 7] [357], [377].

7. However, evidence of:

   (a)matters which occurred after the land was taken are not admissible to 'confirm a foresight'; and

   (b)events or policy development which occurred after the taking are not admissible merely because they commenced before the taking.[9]

   [9] Kelliher [120]; McKay [No 7] [377].

8. Although theoretically there is no limit to the enquiries which the Spencer parties could make to determine the defects, attributes and potential of land, the court should consider the practical steps that the hypothetical buyer will take to become properly acquainted with the land before purchasing.[10]

   [10] Mount Lawley Pty Ltd v Western Australian Planning Commission [2006] WASC 82 [260].

9. Documents available on enquiry would be known to the hypothetical purchaser only if a prudent purchaser would have made that enquiry.[11]

   [11] McKay [No 7] [1569].

10. Beech J summarised how the Spencer hypothetical applied to assessing the future potential of land as:[12]

    (a)the hypothetical purchaser is prudent and acts rationally;

    (b)the hypothetical parties are taken to have access to all information currently available at the taking date, which affects the property;

    (c)the hypothetical parties are taken to have access to all information relevant to the market price about which a prudent purchaser would enquire;

    (d)the hypothetical purchaser would obtain such expert evidence as a prudent purchaser would, in the circumstances of the case, have obtained; and

    (e)where there is conflicting evidence, the court's role is to view the conflicting opinions through the eyes of the hypothetical purchaser. That may or may not involve the court in resolving conflicting opinion.

    [12] McKay [No 7] [1503].

11. Consistent with the Spencer hypothetical, post-taking planning evidence is inadmissible for market value.[13]

Section 241(6) LAA - matters to which the court is to have regard

[13] McKay [No 7]  [337] - [338]; Kelliher [118].

1. Section 241(6)(e) of the LAA was analysed in McKay [No 7] and Lenz v Commissioner of Main Roads.[14]

   [14] Lenz v Commissioner of Main Roads [2012] WASC 6.

2. On a proper construction of s 241(6) of the LAA:[15]

   (a)the question for the court is whether, by reason of facts which the court considers it just to take into account, the claimant has sustained loss and damage for which it should be compensated under s 241(6);

   (b)the court's determination of what is just relates to its selection of other facts to be taken into account;

   (c)this does not detract from the requirement of the opening words that the loss or damage be sustained by the claimant; and

   (d)it is that loss or damage to which regard is to be had in determining the amount of compensation to be awarded under s 241 of the LAA.

   [15] McKay [No 7] [2819] - [2839].

3. The loss must be a quantifiable financial loss.[16]

   [16] Lenz [424].

4. To succeed in a claim under s 241(6) there must be proof that the Bakotas sustained a loss or incurred some damage,[17] which loss or damage:

   (a)arises from interference with the activities carried on by the Bakotas on the subject land;[18] and

   (b)is of the kinds described in the subparagraphs of s 241(6).[19]

   [17] McKay [No 7] [2834] - [2835].

   [18] Lenz [421].

   [19] Lenz [409] - [420].

5. A dispossessed landowner has no right to be compensated for buildings and plant superior in value and construction, when something more modest, and reasonably comparable to what was taken, could be found or built.[20]

Section 241(7) LAA - severance damage and injurious affection

[20] Commissioner of Highways v Shipp Bros Pty Ltd (1978) 19 SASR 215, 221.

1. Section 241(7) permits compensation for damage suffered due to:

   (a)the severing of the land taken from the adjoining land; and

   (b)a reduction of the value of the remaining land (otherwise known as injurious affection).

2. Severance damage is the loss of value in the remaining land due to the severing of the land taken.

3. Injurious affection should be understood as directing attention only to damage suffered as a result of a reduction in the value of a claimant's adjoining land which is caused by the carrying out or use of the relevant public work.[21]

   [21] Kelliher [143], [165].

4. A before and after valuation method assesses all the advantages and disadvantages in comparing the original and the remaining land.  It does not distinguish between severance and injurious affection.[22]

   [22] Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW [2005] NSWLEC 467, [14] - [20]; Mir Bros v RTA NSW [2006] NSWCA 314 [10] - [12].

5. The courts have found the before and after method to be the best for assessing compensation for expropriation of a portion of land (such as for a road).[23]

   [23] Kelly v Western Australian Planning Commission [2006] WASC 208 [70]; Western Australian Planning Commission v Kelly [2007] WASCA 160 [27] (McClure JA); Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56 [75].

6. For severance and injurious affection:

   (a)subsequent losses are recoverable and post-taking evidence is admissible;[24]and

   (b)the court should prefer known facts over predictions.[25]

Unlawful uses are not compensable

[24] Lenz [237] - [241]; McKay [No 7] [376].

[25] McKay [No 7] [373] - [376] applying Cairns City Council v CMB No 1 Pty Ltd (1997) 96 LGERA 306.

1. To be compensable, a use must be legal, that is, a use within the planning and building regulations.[26]  Value is attributed to a use that is possible and lawful.[27]   The concept of the highest and best use is informed by lawful and available use.

   [26] Bombara [2021] WASAT 141 [265(a)].

   [27] Italiano v Water Corporation [No 2] [2020] WASC 112 [76(s)].

2. Land valuation cannot disregard local laws.[28]   Resumed land should not be valued for compensation on the basis that resumption nullifies local scheme restrictions.  Any valuation which disregards the scheme's restrictions gives no 'real assistance in the assessment of compensation for the resumption'.[29]

   [28] Royal Sydney Golf Club v Federal Commissioner of Taxation [1955] HCA 13; (1955) 91 CLR 610, 624 - 625 (Kitto J); see also Roads and Traffic Authority of NSW v Hurstville City Council [2001] NSWCA 11; (2001) 112 LGERA 223 [14], [22] (Mason P, Sheller & Bowell JJA agreeing).

   [29] Pringle v Minister [1968] 1 NSWR 509; (1967) 14 LGRA 280, 283 - 284.

1. A claimant who seeks to establish value based upon some different use than that which is authorised by local restrictions has the burden of showing the practicability or reasonableness of the use they say should be valued, as well as its lawfulness which may include the likelihood of approval, and the means by which this could be achieved, in order to render the use lawful.[30]

   [30] Parramatta City Council v Valuer-General (1965) 10 LGRA 160, 170 - 172 (Else-Mitchell J).

2. This is analogous to the principle that, when valuing a leasehold interest, it is relevant to the valuation exercise that a term of the lease limits the use by the lessee and hence limits the use that can be valued in the valuation.

Section 241(8) and s 241(9) LAA - solatium

1. Section 241(8) and s 241(9) of the LAA provide that if land is taken without agreement, an amount considered by the court appropriate for the taking without agreement may be added to the award. It may not be more than 10% of the amount otherwise awarded unless the court is satisfied that exceptional circumstances justify a higher amount.[31]

   [31] McKay [No 7] [2803] - [2804].

2. In light of the link between s 241(8) s 241(9), the provisions of s 241(9) 'do not represent a separate and distinct entitlement to compensation' as was the case in previous statutes, so cases discussing the earlier legislation do not assist.[32]  No distinct head of compensation arises for solatium.[33]

Section 241(11) and s 241(12) LAA - interest

[32] Cerini v Minister for Transport [2001] WASC 309 [287].

[33] McKay [No 7] [2805].

1. Section 241(11) and s 241(12) of the LAA provide for the payment of 6% interest:

   (a)if the court awards compensation that is not more than the amount offered by the defendant in the offer it served - from the date of service of the claim until the date of the service of that offer; and

   (b)if the court awards compensation that is more than the amount offered by the defendant in the offer it served - from the date of service of the claim until:

   (i)the date of the advance payment (for that component); and

   (ii)the date of the court's award for the balance of the compensation.

2. The court must only act based on evidence.[34]

   [34] McKay [No 7] [171]; Kelliher [112] - [113].

3. As with any expert, the opinions of expert valuers must be comprehensible and rationally based.  Reasoning must be stated or revealed in a way that enables the conclusion to be tested and a judgment made about their reliability.[35]

   [35] Pownal v Conlan Management Pty Ltd (1995) 12 WAR 370, 390.

4. A court should not act on an opinion the basis for which is not explained.  Unless the process of inference by which an opinion is reached is expressed in a manner which permits the conclusions to be scrutinised and a judgment as to its reliability, the opinion can carry no weight.[36]

   [36] Pollock v Wellington (1996) 15 WAR 1, 3.

5. A finding of fact on the basis of expert opinion that is based on a combination of inadmissible and admissible material cannot be relied upon.[37]

   [37] Pownal, 377 - 378; Greenslade v Hiew [2022] WASCA 47 [109].

6. The Spencer parties will place more weight on development options with greater certainty and fewer unknowns.[38]

   [38] De Ieso v Commissioner of Highways (1981) 27 SASR 248, 254.

7. A hypothetical subdivision is an appropriate method for a before and after assessment of injurious affection where the evidence shows multiple changes to the land's potential between the scenarios.[39]

   [39] Coastal Estates v Bass Shire Council [1993] 2 VR 566, 576 - 577.

The value of the taken land

1. The value of the taken land is determined by ascertaining the value of Lot 3 at the valuation date of 23 January 2012 in the before scenario and then calculating a pro rata value for the taken land of 5,847 sqm.

2. In calculating the value of the taken land, s 241(2) of the LAA requires the assessment of land value and any improvements which exist on the taken land.

3. The taken land was substantially vacant land with a corner of the coolroom constructed thereon. The Bakotas did not seek that the value of the corner of the shed on the taken land be valued as an improvement for the purposes of the exercise pursuant to s 241(2) of the LAA.

4. Paragraph 11 of the statement of claim pleaded that 'the Land at the valuation date and thereafter the Remaining Land had potential for a higher and better use i.e. residential but could still have been used for its current purpose of market gardening while waiting all necessary approvals to occur to achieve residential subdivision and sale'.

5. Paragraph 8 of the defence pleaded:

   As to paragraph 11 the Defendant

   A)admits the land at the valuation date and thereafter the Remaining Land had potential for a higher and better use

   B)admits that the higher and better use is residential use

6. Accordingly, the parties agreed that the highest and best use of Lot 3 at the valuation date of 23 January 2012 was potential for residential subdivision.

7. The joint memorandum of the parties' planning experts stated:[40]

   The planners [Mr Hajigabriel and Ms Butterworth] agree that in the before scenario and hence at a time where Lenore Road was not realigned, the land had sufficient frontage to Mary Street for road access into a subdivision of the land.  The planners agree that in the before scenario that the western boundary of the subject land was approximately 170 metres from the intersection of Mary Street with Lenore Road (as it was then located) and the eastern boundary was approximately 260 metres from the intersection of Mary Street and Lenore Road.  The planners agree that a separation distance of a minimum of 170 metres to the intersection with Lenore Road, is likely to be sufficient for approval to be granted for a proposed subdivision road from the [Lot 3] to Mary Street.

   The planners agree and are of the opinion that in the after scenario, with the realigned Lenore Road in place, due to insufficient frontage and proximity to the Lenore Road intersection, direct road access into the land from Mary Street would be highly unlikely to be approved.  The planners agree that as such, subdivision of the subject land would not be possible until access was available from the adjoining Lot 4.

   [40] Exhibit 19.

8. The parties disagree on how long rezoning, structure planning and subdivision of Lot 3 would have taken in order to fulfil that potential, viewed at the valuation date, from the point of view of the hypothetical knowledgeable and prudent purchaser.

9. The Bakotas' position is it would have taken five to seven years for the process to occur.  The City's position is that it would have taken 12 to 14 years.

How long would sub-division have taken?  Mr Hajigabriel (Bakotas) and Ms Butterworth (City)

1. Mr Hajigabriel of Greg Rowe & Associates reports were dated 31 January 2020,[41] 1 May 2020,[42] 20 May 2021,[43] and 16 August 2022.[44]

   [41] Exhibit 17.

   [42] Exhibit 18.

   [43] Exhibit 21.

   [44] Exhibit 22.

2. Ms Butterworth filed a witness statement with her report dated 31 January 2020[45] and an amended plan of subdivision dated 26 May 2020.

   [45] Exhibit 23.

3. Mr Hajigabreil and Ms Butterworth also prepared joint experts' reports dated 8 August[46] an amended plan of subdivision dated 28 August 2020,[47] a written statement dated 11 May 2021,[48] a witness statement dated 8 August 2022[49] and a witness statement dated 23 August 2022.[50]

   [46] Exhibit 19.

   [47] Exhibit 24.

   [48] Exhibit 25.

   [49] Exhibit 26.

   [50] Exhibit 27.

4. As the City submitted, the planners essentially agree on the strategic planning.  They differ on what can be drawn from it for planning advice.

5. Mr Hajigabriel was first instructed in this matter in 2012.  In a letter of preliminary advice dated 8 June 2012,[51] following the taking date of 23 January 2012, he set out the process and overall timeframe to facilitate the development of Lot 3 for urban residential purposes.[52]  He was confident that Lot 3 was capable of being developed for urban purposes in the short term, that is, within the next five to seven years.

   [51] Exhibit 1A, 429, 435 - 436.

   [52] Exhibit 8, 22.

6. Mr Hajigabriel repeated his opinion in the report annexed to his witness statement dated 31 January 2020.[53]

   [53] Exhibit 17, 22 - 23.

7. Mr Hajigabriel articulated the timing of the relevant steps in his oral evidence.[54]

   [54] ts 461 - 465 (5/9/2022).

8. The City objected to Mr Hajigabriel's evidence as to the time it would have taken for subdivision on the basis that it relied on post-taking evidence.

9. The City submitted that Mr Hajigabriel's opinion on timing was, he admitted, premised on the following post-taking matters that would not be known to the Spencer parties:

   (a)the 2015 planning regulations;[55]

   (b)three later Metropolitan Region Scheme (MRS) amendments;[56]

   (c)the 2019 draft,[57] discussed in exhibit 17 at 11 - 12 and applied at 22.

   [55] ts 462 (5/9/2022).

   [56] Exhibit 19, 2 - 3; ts 469 - 470, 536 - 537 (5/9/2022).

   [57] East Wanneroo District Structure Plan (EWDSP).

10. I do not accept that Mr Hadjigabriel at any stage admitted that his opinion was based on post-taking events.  Indeed, given the date at which he expressed his original opinion, I do not see how could he have done so.

11. Mr Hajigabriel's evidence as to the time of subdivision was expressed in his preliminary advice of 8 June 2012, some three years before the post-taking matters referred to by the City.  In 2012, he could not have known of the matters referred to by the City and yet he reached a conclusion that subdivision would take five to seven years - a period he maintained in his later reports.  I do not accept the City's reasoning.  I do not accept that the City has established any reliance by Mr Haigabriel on post-taking events.  The objection to his evidence is overruled and his evidence as to the time it would have taken to subdivide Lot 3 is admissible.

12. Mr Hajigabriel's reference to those matters identified by the City simply confirm the accuracy of his estimation of five to seven years.  That is the purpose of the references.  They are not the basis for the conclusion reached in 2012 and confirmed in his latter reports.  I infer that the same or similar advice would have been given at the taking date, particularly having regard to the opinion expressed on 8 June 2012.

13. In McKay [No 7],[58] Beech J dealt with the question of the admissibility of post-taking evidence in determining market value.

    [58] McKay [No 7] pt 3.3.

14. His Honour noted the principles derived from Longford v Commissioner of Stamp Duties[59] as to what may be in the mind or contemplation of the hypothetical purchaser at the relevant date went on to make a number of conclusions.[60]

    [59] Longford v Commissioner of Stamp Duties (1953) SR 53 (NSW) 342.

    [60] McKay [No 7] [339].

15. His Honour accepted that advice given after the taking date may be admissible on the basis that the inference is open that that or similar advice may have been given at the taking date.[61]

    [61] Longford [347].

16. The Bakotas say that this is the correct approach to the advice given by Mr Hajigabriel in 2012 as to the deferral period and the advice given by Evershed after the taking date.

17. The City objected to Mr Hajigabriel's use of the six sales in his report of 31 January 2020.[62]  The City submitted that Mr Hajigabriel's denial that the post-taking amendments fed into his reasoning is completely implausible. In my view, there is nothing implausible about Mr Hajigabriel's denial.  It is clear that the reference to the post-taking simply confirms the opinion he expressed on 8 June 2012.  I infer that the same or similar advice would have been given at the taking date, particularly having regard to the opinion expressed on 8 June 2012.  The objection is therefore overruled.

    [62] Exhibit 17, 21 - 23.

18. The City's detailed submission as to why Mr Hadjigabriel's reasoning was based on post-taking events overlook the date when his opinion was first expressed in June 2012.  Those submissions proceed on an inaccurate premise.

19. Mr Hajigabriel's opinion that it would take five to seven years was expressed less than six months after the taking date and before the matters identified by the City had arose.  His views were almost contemporaneous with regards to the taking.

20. Ms Butterworth was not instructed until 2020 well after the valuation date.  She did not have the advantage of forming that view close to the valuation date.  Mr Hajigabriel was able to form a view close to the valuation date with the benefit of the knowledge and expectations known to experienced and active planners at that date.

21. Ms Butterworth did not explain in any detail the rationale behind her opinion that it would have taken 10 years for rezoning, with a further two to four years for subdivision approval.  Ms Butterworth stated that the period for rezoning would be 10 years and the period up to subdivisional approval would be a further two to four years.  In cross‑examination she conceded that this period was 'in the vicinity of 10 years' which then became 'a global estimate' and further diluted to a range.[63]  As the Bakotas submitted, when Ms Butterworth was given the opportunity or invited to express whether there were elements within that – in the vicinity of 10-year estimate that could be pinned down in terms of time, the answer was no.  There was no breakup, no identification and nothing other than a statement that 'on the basis of my experience as a planner, that's what I think in that range.'  The Bakotas' submission is that this statement is to the effect that Ms Butterworth's evidence should be accepted mainly because she has experience without disclosing of the basis or rationale for that conclusion.  I accept that Mr Hajigabriel's view ought be preferred.

    [63] ts 621 - 623 (6/9/2022).

22. Ms Butterworth's opinion was based on a district structure plan for the whole of the East Waneroo Zone, an area of 8000 ha.  She conceded that if there were separate smaller district structure plans, it may take a lesser amount of time.[64]

    [64] ts 623 (6/9/2022).

23. I prefer the evidence of Mr Hadjigabriel to that of Ms Butterworth because his opinion was expressed less than six months after the taking, his preliminary advice was expressed without the knowledge of subsequent events and he explained his reasoning in more detail.

24. Although the Bakotas sought to rely on the endorsement of Mr Hajigabriel's views by other planning advice given to the Bakotas' landowners group at the time by Planning Solutions,[65]  I have placed no weight on the planning views expressed in those documents except to the extent that they establish interaction with the Western Australian Planning Commission (WAPC) because Planning Solutions personnel were not called to give evidence.

    [65] See Exhibit 1B, tabs 177, 185, 187.

25. I accept that the contemporaneous view of Mr Hajigabriel in 2012 represents the advice a hypothetical purchaser would have received at the valuation date.

26. It is the WAPC which determines such matters as whether there is to be a district structure plan or plans and how it or they are to be prepared.  The planners agreed in oral evidence that there is no prescribed process for this.

27. Mr Hajigabriel says that as at January 2012, having given consideration to the published documents and in particular the East Wanneroo Structure Plan dated January 2011 (2011 EWSP),[66] it would be reasonable to assume that several District Structure Plans were contemplated by the WAPC.  The Pearsall East Precinct issues and several District Structure Plans were discussed by Mr Hajigabriel in section 5.9 of his report of 31 January 2020 and in oral evidence.[67]

    [66] Exhibit 2, tab 79.

    [67] ts 471 - 476 (5/9/2022).

28. The land area of the 2011 EWSP is more than 8000 ha.  Neither the WAPC nor the City would have or could have expected a single proponent or syndicate to undertake a task of that magnitude or to have paid the costs of such a task, particularly as each was indicating, at the calculation date, that neither wished to undertake that task.[68]

    [68] Exhibit 17, 23 (final paragraph).

29. The WAPC letter dated 4 July 2011[69] indicates that the WAPC did not want to be the lead proponent in undertaking studies for the urbanisation of the area.

    [69] Exhibit 1B 740-742 TB.

30. I accept that the WAPC was aware of the landowners' wish to subdivide the land and that they had engaged informally with that group through Planning Solutions.

31. Mr Hajigabriel's opinion was that as Lot 3 was in a proposed precinct, which was immediately next to the development front to the west, it is reasonable to assume that the WAPC would have allowed zoning to proceed without waiting for a district structure plan.[70]

    [70] ts 469 (5/9/2022).

32. The documentary evidence demonstrates that, not only the Bakotas, but a substantial number of land owners in the locality (which included market gardeners), were participating in steps to progress the rezoning of the locality at the time of the taking.[71]  Those landowners were prepared to fund and did fund the preparation of advice and planning initiatives from Planning Solutions and the preparation of an environmental report by PGV Environmental,[72] all of which demonstrate that.  The attitude of the valuation expert for the City, Brian Zucal, that market gardeners would not be interested in progressing urban zoning, is misplaced.

    [71] Exhibits 1B and 1C, tabs 159 - 219.

    [72] Exhibit 1B, tab 194..

33. The landowners group became less active in mid-2012 - following the taking on 23 January 2012.  The daughter of the Bakotas, Ms Angela Lawrence, gave evidence that this was because of servicing and access issues.[73] Mr Hajigabriel confirmed with Evershed in 2012 that it was the sewer connection which caused the planning delay.[74]  However, Ms Lawrence confirmed that earlier there had been discussion with Planning Solutions about bypassing the step of the district structure plan.[75]

    [73] ts 115 - 116 (22/8/2022); ts 132 - 134 (24/8/2022).

    [74] Exhibit 17, [5.9] (final paragraph).

    [75] ts 133 (24/8/2022).

34. Based on Mr Hajigabriel's reasoning, I find that the period from the date of taking to the approval of rezoning and subdivision would have taken five to seven years.  Correspondingly, I reject Ms Butterworth's advice that it would have taken 12 to 14 years.

35. I reject the City's criticism of Mr Hajigarbiel.

The hypothetical subdivision approval - Mr Hajigabriel (Bakotas) and Ms  Butterworth (City)

1. Ms Butterworth prepared two hypothetical plans of subdivision for Lot 3 with a drainage basis; before taking and after taking.[76]

   [76] Exhibit 24.

2. The predominant zoning in both plans of subdivision prepared by Ms Butterworth was R20.  In the before taking plan, there were some small areas of R30 zoning opposite the public open space and drainage basin. In the after taking plan, there were some small areas of R30 and R40 opposite the public open space and drainage basin.

3. Mr Hajigabriel differed from Ms Butterworth as to the likely coding.

4. In the amended joint memorandum of the planning experts dated 8 April 2020:[77]

   Mr Hajigabriel considers a residential density of R40 in proximity to Public Open Space and public transport corridors and a residential density of R30 for the remaining land would be a more realistic density outcome for the land in both the before and after scenarios rather than the R30 And R20 densities depicted on the plans. Having regard to the comments made in paragraph 6 above, it is evident that there would have been a strong argument for the subject land to be coded as R40. Mr Hajigabriel notes that the Cell 4 Agreed Local Structure Plan 6 was originally adopted on the 24 June 2022 and that in the time period leading up to the Taking Date there were several amendments recoding land from R20 to R30 and R40.

   Ms Butterworth prepared the plans taking into account the density provisions applied in the adjoining Cell 4 Agreed Local Structure Plan No 6. Ms Butterworth acknowledges that over the last 10 years residential density has increased above the standard R20 coding to a base coding of R25-R30. She is of the opinion that a coding of R20 to R30 may have been a possible outcome for most of the Subject Land and a density of R30 or R40 may have been applied for lots of high amenity such as adjacent to public open space. Ms Butterworth refers to her comments at paragraph 7 of this memorandum.

   [77] Exhibit 19 [15] - [16].

1. Ms Butterworth conceded that the codings she used in the hypothetical subdivision plans may have been lower.  This reflects the uncertainties surrounding the hypothetical subdivision plans she prepared.

2. Mr Hajigabriel does not agree that the hypothetical subdivision approach is sufficiently reliable as the inputted factors by the valuer are subjective and any changes alter, sometimes substantially, the end result.  Mr Hajibabriel was right not to prepare an hypothetical subdivision having regard to the uncertainties attaching to an hypothetical subdivision five to seven years prior to the possibility of an accurate plan of subdivision.[78]

   [78] Kelliher [96] - [101].

3. The City submitted that Mr Hajigabriel was quite clear: the realignment of Lenore Road has not been a constraint on the ability of Lot 9003 to subdivide.  Mr Hajigabriel qualified that statement by the addition of 'yet'.[79]

   [79] ts 557 (5/9/2022).

4. The above statement by Mr Hajigabriel is taken out of context by the City.  All the evidence establishes that the realignment of Lenore Road has been a constraint because Mary Street access is no longer available as an access point for subdivision.  The realignment of Lenore Road has been a constraint because Lot 9003 cannot be subdivided because of the access issue.  Lot 9003 is effectively landlocked.

Engineering and costings of subdivision - Bowyer (Bakotas) and Highman (City)

1. In relation to the claim under s 241(7) of the LAA, the Bakotas rely upon the discussion of this head of damage by Pritchard J in Kelliher.

2. Issues such as the timing of sewer connections to the east or a roundabout to the west are not factors which bear upon the amount of compensation.  They are factors which bear upon the quantum of the compensation caused by the lack of access in that they influence the questions as to whether access can ever be achieved in the after scenario and if it can, whether the time delay so great that a highest value for that land (Lot 9003) is in fact Rural.

3. In Kelliher, her Honour speaks of the causal link between the public work and the damage done to the remaining land.[80]  

   [80] Kelliher [152] - [155].

4. In relation to the fencing claim, in the before scenario, Lot 3 had a smaller frontage facing a relatively quiet Mary Street ending in a cul‑de‑sac.  In the after scenario, it faced a busy Lenore Road with a lengthy 194 m frontage facing busy traffic.[81]  Noise, odour, car light issues and the requirements of the City's fencing policy, require a fence along the length of that frontage.

   [81] Exhibit 27.

5. Since I have concluded that Lot 9003 does not have urban potential, it is unnecessary to resolve the s 159 claim and the claims for fill, fencing and bored crossing.

6. Mr Bowyer gave evidence orally and in writing that at the valuation date, the Water Corporation Catchment Plan showed only a small portion of Lot 9004 could be sewered from the west.[82]

   [82] Exhibit 5, annexure B.

7. In conferral with Mr Highman, Mr Bowyer agreed that perhaps a third to a half of Lot 9004 could be included in the catchment but he was clear in oral evidence that inclusion would depend upon the catchment having sufficient capacity and that an assessment would be at the lower end of this scale, that is, a third.

8. In the further amended joint report of Mr Bowyer and Mr Highman dated 2 October 2020, they agreed that the best point of connection of sewerage to the land of Lot 3 is the sewer located at the eastern end of the Chenin Court cul-de-sac (on the west side of the realigned Lenore Road).[83]  Mr Highman updated his opinion of the probable development costs to reflect this point of connection.[84]

   [83] Exhibit 13, 402.

   [84] Exhibit 6 [8], appendix B.

9. When planning sewer connections in any area, the Water Corporation considers the best point of connection to be the point that maximises the gravity catchment off the existing network.[85]

   [85] ts 406 (26/8/2022).

10. The City submitted that for Lot 9003, the new information caused Mr Highman to change his advice on the best point of sewer connection.[86]  I am not convinced that the information was 'new' in the sense that it could not have been obtained at the time of the conferral where the engineers agreed on Chenin Court.

    [86] ts 407 (26/8/2022).

11. Whether or not developers factor in the cost of a waste water pumping station depends on the planning advice as to how long it will be until the land can be developed.[87]

    [87] ts 326 - 327 (26/8/2022).

12. Mr Bowyer's evidence relating to sewer delays arising from the time it would take for Water Corporation infrastructure to develop, does not apply to the portion of the Lot 9004 that can be gravity sewered. However, planning delays in dealing with the Bush Forever part of Lot 9004 would delay the resolution of the sewer issue.  Servicing must follow the planning. Until the planning process achieves rezoning, the relative difference in servicing times are moot.[88]

    [88] ts 348 - 349, 368 (26/8/2022).

13. The City submitted that Mr Highman's waste water catchment boundary assessment (concept plan TS408) in his second supplementary witness statement dated 23 August 2022[89] followed a very similar approach to that followed by Mr Highman in his report dated 9 April 2020[90] and Bowyer in his report dated 10 April 2020[91] to show how Lot 9003 could be gravity sewered.  However, of course, Mr Highman was resiling from his earlier position.

    [89] Exhibit 10.

    [90] Exhibit 9.

    [91] Exhibit 4.

14. Mr Highman's reported dated 23 August 2022 has limitations.  Mr Highman readily acknowledged this.[92]

    [92] Exhibit 10; ts 409 (26/8/2022).

15. Mr Bowyer had reservations about the sewered concept plan.  He considered the concept was premature because the concept:

    (a)was moving ahead of a local structure plan, such that there were various unknowns - and thereby required assumptions to be made;

    (b)assumes a specific pipe grade and a straight pipe; and

    (c)does not have a full feature survey.[93]

    [93] ts 381 - 387 (26/8/2022).

16. Mr Highman accepted in cross-examination that it had not been costed.[94]

    [94] ts 14 (26/8/2022).

17. Mr Bowyer says each potential constraint that is unknown is a risk.[95]

    [95] ts 389 (26/8/2022).

18. One unknown issue was the depth of the water pipes and whether there was sufficient room above the water pipe for the sewer pipe to pass over it.  If not and the water pipe had to be moved it would incur further expense.[96]

    [96] ts 417 - 421 (26/8/2022).

19. Mr Bowyer remained unmoved from the agreed conferral position reached in 2020.[97] 

    [97] ts 390 (26/8/2022).

20. Mr Highman's evidence demonstrated how the sewer catchment could be expanded.[98] 

    [98] ts 434 (26/8/2022).

21. Mr Highman also set out how the sewer planning requirements for a local structure plan for the Mary Street Precinct could be achieved.  These were put to Mr Bowyer and he:

    (a)agreed with the descriptions of what is required;

    (b)agreed with the potential pumping station location; and

    (c)was not troubled by the discharge proposal.[99]

    [99] ts 394 (26/8/2022).

22. Mr Bowyer disagreed with the extent of the gravity feed that Highman says is possible.[100]

    [100] ts 395 (26/8/2022).

23. Mr Highman explained in cross-examination that the outfall was set out in his report dated 9 April 2020.[101] 

    [101] ts 427 (26/8/2022).

24. Mr Highman's concept for sewer planning had two phases, with the first phase being gravity sewered and the second phase being via waste water servicing.[102]

    [102] ts 431 (26/8/2022).

25. Mr Highman changed his position a week before trial in his supplementary report dated 23 August 2020.[103]  He offered no satisfactory explanation for resiling from his earlier position agreed with Mr Bowyer.[104]

    [103] Exhibit 10.

    [104] ts 399 - 409 (26/8/2022).

26. Mr Bowyer premised his view upon capacity on the email from Brett Coombes of the Water Corporation which is annexure SCH10 of Mr Highman's report of 9 April 2020.  As the Bakotas submitted, the cross-examination of Mr Highman on this issue[105] exposes the fragility of Mr Highman's change of position as described in his report dated 23 August 2022 based on capacity.

    [105] ts 409 - 412 (26/8/2022).

27. Mr Highman and Mr Bowyer agreed that the costs of the wastewater pumping station facilities are only refunded if it is a permanent or interim facility listed on the Water Corporation's capital works programs, and hence it has been categorised as planned and funded.  If it was categorised as planned and unfunded, a developer could choose to wait and apply for its category to be changed.  Alternatively, a developer could choose to pay for it, knowing that no refund would ever be made.  Temporary wastewater pumping stations were and still are always paid by the developer with no reimbursement.[106]

    [106] Exhibit 6 [77] - [78].

28. In his report of 23 August 2022, [107] Mr Highman has put forward a plan indicating four possible routes to sewer any and all of Lot 9003, Lot 9004 and Lot 9005:

    (1)all depend upon the catchment having sufficient spare capacity;

    (2)all depend on the Water Corporation's agreement.  It is common ground that the Water Corporation has not been approached on any of these proposals let alone having agreed to one;

    (3)all depend upon the chosen route being financially viable for the lot owner who would have to fund the connection;

    (4)all depend upon the contours permitting the connections. Mr Bowyer says the longer the line, the greater the risk that they will not. Mr Highman has used Water Corporation contour map which is not so reliable as Lidar which he uses; and

    (5)some depend on being able to cross the steel water main which runs down the western side of new Lenore Road.

    [107] Exhibit 10, annexure SSCH3.

29. In all reality, the best that can be hoped for is that a part of the south of Lot 9004 could be connected to the western catchment.  This proposal, however, gives rise to further obstacles.

30. Mr Hajigabriel confirms that any access road through Lot 9004 to Lot 5 would be at least 15 m in width and it may potentially be wider.[108]

    [108] Exhibit 22 [21].

31. Whilst it may be possible to build that part of the access road to Lot 9003, running down to Mary Street only on Lot 9004, and deal with the remaining 5 m in the future on Lot 5 when it comes to be subdivided, the minimum width of the pavement (2.8 m) may mean that there is insufficient space in the verge for services, such as a footpath, sewer, water, and power main.[109]  The implication of this evidence is that it may be necessary to subdivide both Lot 9004 and Lot 5 in order to build the access road.  Lot 5 is significantly burdened with a Bush Forever site, which all planners agree is a constraint on development and will cause delays in any application to subdivide.

    [109] ts 489 (5/9/2022).

32. One of the conditions of a subdivisional approval would be the necessity to show that sewer can be connected to all proposed lots.[110]

    [110] ts 490 (5/9/2022).

33. The evidence is that all lots east of Lot 9003, apart from perhaps a southern part of Lot 9004, will have to be serviced from the new but as yet unbuilt, Jandabup Pump Station.[111]

    [111] Exhibit 5, [39].

34. This route would have to go through what has now been identified as the Rural lifestyle lots in Precinct 2 in the East Wanneroo District Structure Plan dated August 2021.[112]  The Precinct has shown itself to be adverse to change[113] and is still zoned Rural under the MRS.

    [112] Exhibit 2, 2071 - 2205.

    [113] Exhibit 2, 2056.

35. Each of the intervening lots would have to be rezoned and subdivided before the sewer line can progress further.

36. The time lines inside the 2021 EWDSP for that precinct developing to the point where the sewer lines can reach Precinct 1, are extensive and have caused the Bakotas' property valuation expert, Mr Chapman, to extend his deferral period from six years to 45 years.[114]

    [114] Exhibit 35 [24] - [25].

37. Mr Chapman's deferral period of six years was arrived at by calculating the amount of land between Lot 9003 and the Jandabup pump station and assuming a selling period of 57 lots per annum.  His selling period assumptions are supported by the sales evidence at annexure 3 of the valuers' joint report dated 15 February 2021.[115]  However, in light of the new evidence filed immediately before trial, he is now of the view that this deferral period is too short.

    [115] Exhibit 3.

38. The City was critical of Mr Bowyer's advice and submitted that it should be rejected because he did not resile from the agreed position agreed with Mr Highman in conferral.  I entirely reject these submissions.  The parties reached an agreed position.  The fact that Mr Highman resiled from that agreed position impacts on his credibility as an expert, not on Mr Bowyer's credibiltiy.

Comparable sales evidence  - Chapman (Bakotas) and Zucal (City)

1. Mr Chapman's reports were dated 16 November 2021,[116] 13 July 2021[117] and 17 August 2022.[118]

   [116] Exhibit 31; Exhibit 32.

   [117] Exhibit 34.

   [118] Exhibit 35.

2. The City contended that Mr Chapman's evidence could not be relied upon because it relied upon post-taking evidence from Mr Hajigabriel. For the reasons explained above, Mr Hajigabriel's evidence was admissible and therefore Mr Chapman's reliance was not misplaced.  The City's objection to Mr Chapman's evidence on this basis is overruled.

3. The reports of the City's valuation expert, Mr Zucal, were dated 27 November 2020,[119] 8 June 2021,[120] 22 November 2021,[121] 3 June 2022.[122]

   [119] Exhibit 36; exhibit 36A.

   [120] Exhibit 37.

   [121] Exhibit 38.

   [122] Exhibit 39.

4. The valuers filed a joint witness statement dated 15 February 2021.[123]

   [123] Exhibit 33.

5. Mr Chapman relied upon the evidence of Mr Hajigabriel.  Given that I accept Mr Hajigabriel's evidence of a five to seven year time frame, Mr Chapman's reliance is appropriate.  Again, the City's contention that Mr Hajigabriel's opinion was based on post-taking events is not sustainable when regard is had to his preliminary advice of 8 June 2012.

6. The Caporn Street amendment referred to in Mr Hajigabriels' report dated 31 January 2020[124] is post-taking, but the preliminary advice of 8 June 2012 provides the basis for an inference that the same or similar advice would have been given at the taking date as was the case.

   [124] Exhibit 17, 15.

7. Mr Chapman has calculated the value of the taken land at $110 per square metre or $643,170 in total, using the comparable sales approach.

8. Mr Chapman is of the view that the most likely purchaser of Lot 3 and the comparable sales is a developer.[125]  This opinion is supported by the significant amount of interest shown in Lot 3 and immediately surrounding land over the years by developers such as Jazna, Stockland and Australand.[126]  These expressions of interest were well before the taking date of 23 January 2012.

   [125] ts 710 (7/9/2022).

   [126] Exhibit 1B, 128 - 158.

9. In contrast, Mr Zucal says that the most likely purchaser of Lot 3 was another market gardener.  In his view, there would be little interest in rezoning from the market gardeners that proliferate in the eastern part of Mary Street.[127]

   [127] Exhibit 33, 4.3.1.

10. I do not accept Mr Zucal's opinion.  There was obviously interest from developers prior to the taking date.  In addition, the market gardeners were actively seeking to rezone their properties to urban.

11. Mr Zucal's expressed view is even harder to accept when in 2005 the surrounding Lots 1, 2, 5 and 6 were purchased by Jazna for development.

12. Mr Chapman says that between 2011 and 2012 there was a marked uptick in land values and that developers were out there buying land.[128]

    [128] Exhibit 31, 5.1; ts 705 (7/9/2022).

13. Mr Chapman also makes the point that many of the comparable sales sold in 2009 which was immediately after the global financial crisis.  A common sense conclusion may be drawn from this as to the effect of that timing on the sales prices obtained for those properties in contrast to the valuation date of Lot 3 in 2012.[129]

    [129] ts 705, 808 (7/9/2022).

14. Mr Chapman considers that at the valuation date, the highest and best use of Lot 3 will be urban development pending rezoning, structure planning and development.[130]  

    [130] Exhibit 31 [35].

15. Lot 3 was at the development front of the subdivision to the west and Mr Chapman's consideration shows a significant amount of value reduction the further away from the front the comparable sales are.[131]

    [131] Exhibit 31 [81] - [82].

16. Mr Chapman has six sales which are common to both valuers.[132]  His opinion is that sales one, two and three are the most comparable, while sales four, five and six suffer from having poultry farm and mushroom farm buffers.  Both planners agree that these buffers will affect the whole of the land, not just the portion affected by the buffer and make it difficult to estimate when these sales will be rezoned and developed.[133]

    [132] Exhibit 31, [7.1].

    [133] Exhibit 20 [8(d)], [10(h)].

17. Mr Zucal discusses nine comparable sales in his amended report of 27 November 2020.[134]  He arrives at a conclusion of $75 per square metre for Lot 3 in the before scenario.

    [134] Exhibit 36A, [13.15] - [13.57].

18. Mr Zucal says that the buffers are a problem but he has adopted a 20‑year deferral period for the development front to reach these properties would mean development front would reach them by 2030.[135]  There is no planning support for Mr Zucal's assumption which is outside of expertise.  Effectively, Mr Zucal's reliance on sales four, five and six can be ignored because they are so far outside the relevant timeframe.

    [135] Exhibit 33, [4.33.3]; ts 782 (7/9/2022).

19. Mr Chapman says that the principal factors which differentiate the second to sixth sales is their distance from an active development front to the west and the cost of accessing services needed for subdivision.[136]

    [136] Exhibit 31 [81].

20. Mr Chapman has therefore adjusted upwards for time, location, servicing prospects and landform.

21. Mr Chapman has ascribed no value to any improvements on the comparable sales as his experience with his developer clients is that they consider these to be a nuisance, may interfere with their ultimate subdivisional plan and, in the case of houses, may attract squatters.[137]

    [137] ts 710 - 712 (7/9/2022).

22. Mr Zucal disputes this and says that a buyer would have attributed value to the improvements on Lot 3 and other market garden sales.  This conclusion is a consequence of his conclusion that the likely buyer for Lot 3 in the before scenario was a market gardener.

23. In Zucal's analysis of each of his sales, he ascribes an arbitrary value to improvements without any attempt to explain it by reference to market rental or indeed any other acknowledged valuation methodology.  Mr Chapman's evidence is that the conventional method of valuing improvements is to calculate present replacement cost and then depreciate by their age and utility.  This requires a knowledge of the measurements, condition and age of the improvements.[138]  That approach is completely consistent with logic.  None of that is discernible from Mr Zucal's exercise or his response to Mr Chapman in conferral.

    [138] Exhibit 33 [4.9], [5.2.5].

24. Mr Zucal says that Lot 3 could have been rented out at $50,000 per annum.[139]  He supported this by an unproven rental apparently occurring at some unknown date at Hal's Strawberries for $12,659 per annum.[140]  He then says he has no evidence but still reverts to $50,000 per annum.[141]  I do not accept Mr Zucal's evidence that the property could have been rented out for $50,000 per annum.  There is simply no evidence to support it.  I am surprised that an experienced valuer would make such an assertion in the absence of any evidence.  The absence of rental evidence suggests that properties are rarely, if ever, rented out by developers.  This further confirms Mr Chapman's assessment that developers rarely let such properties out while waiting for approval.

    [139] Exhibit 36A, [13.56].

    [140] Exhibit 36A, [13.64].

    [141] Exhibit 36A, [13.65].

25. Mr Chapman has relied upon a table prepared by Mr Bowyer which sets out the Order of Probable Costs for six Rural Sales (R1 - R6).[142]  Mr Chapman has taken into account the comparative assessments of the comparable sales to Lot 3 carried out by Mr Bowyer.[143]  The exercise being carried out here by Mr Bowyer is a broad brush comparative assessment of costs of fill, retaining walls and temporary waste water pumping stations required for the comparable sales assessed against Lot 3, which does not require the latter.  This is an exercise which identifies the most important considerations for experienced developer clients when seeking out land for development.

    [142] Exhibit 31 [91].

    [143] Exhibit 5 [48] - [49].

1. Mr Chapman's conclusions in respect of the range he identified from this exercise as to the value of Lot 3 was adjusted during the conferral process as a result of an adjustment to costs by the engineers. A revised table appears in the joint valuers' report of 15 February 2021 which shows a land value range of $109 (rounded) to $132 per square metre for Lot 3,[144] which supports Mr Chapman's primary assessment.

   [144] Exhibit 33, [4.30.14].

2. Mr Zucal has paid little or no attention to these issues in his exercise and has no similar information for his four additional sales to draw upon.

3. In his report of 16 November 2020, Mr Chapman carried out an analysis of three urban zoned englobo land parcels (Sale U1 - U3) which sold in 2010 - 2011.[145]  The most important is the sale of Lot 9000 (Sale U3) which is immediately to the west of Lot 3, and to the west of the realigned Lenore Road.  Lot 9000 sold for over $188 per square metre in July 2010.

   [145] Exhibit 31, [7.2].

4. Mr Chapman analyses the englobo sales and concludes an urban value for Lot 3 at the valuation date of $152.50 per square metre.[146]  He then reverse applies Mr Hajigabriel's deferral period to arrive at an adjusted value range of $92 to $106 per square metre to check his own and Mr Hajigabriel's assumptions.[147]

   [146] Exhibit 31 [95].

   [147] Exhibit 31 [96].

5. Lot 9000, which immediately adjoins the subject Lot 3, was in effect in the after scenario as a result of having a significant frontage to the realigned Lenore Road, which had an adverse effect on its value but on the other hand, benefitted from drainage and public open space infrastructure located on other land.[148]

   [148] Exhibit 31 [7.2].

6. Mr Chapman's comparable sales, which are common to both valuers, are not within the Water Corporation's sewer catchment as at the valuation date,[149] meaning that there was no expectation at that date (or their date of sale) that they could reach a point of subdivisional approval in a timely manner.

   [149] Exhibit 5, annexure B.

7. Mr Bowyer says that each of the comparable sales would be uneconomic to develop if they had to have a temporary pumping station to do so because of their size.  There is consequently a very large question mark hanging over the sale price of these sales, which requires significant adjustment in their deferral periods to compare them to Lot 3.[150]  Mr Zucal has made no such adjustment.

   [150] Exhibit 5.

8. Lot 3 and all of Mr Chapman's comparable sales were, at the valuation date, within the area of the 2011 EWSP.[151]  The subject land was identified as within the potential Pearsall Precinct Plan.[152]  This is discussed by Mr Hajigabriel as delineating an area of potential structure plan.[153]

   [151] Exhibit 2. tab 79.

   [152] Exhibit 2 1783.

   [153] ts 472 - 475 (6/9/2022).

9. That distinction in rezoning and subdivision expectation is a major factor distinguishing Lot 3 from the comparable sales in 2012.

10. Mr Chapman analyses his sales at 7.1 of his report dated 16 November 2020 and makes adjustments for time, size, location and services.[154]

    [154] ts 652 - 656 (6/9/2022); Exhibit 31, 22 - 23.

11. Mr Zucal says that his two most important sales are sales 1 and 2.[155]

    [155] ts 668, 670 - 671 (6/9/2022).

12. Mr Chapman agrees that sale 1 is an important sale as it is also on the development front but unlike Lot 3, is not within the western sewer catchment.  It therefore has to wait for capacity and connection.  Despite rezoning to urban, it still has no sewer connection and is undeveloped.[156]  Lot 3 is within the water sewer attachment.  Mr Zucal ignores this fundamental negative.

    [156] ts 694 (6/9/2022).

13. Mr Zucal failed to adjust for the size of sale 1 compared to Lot 3.  Sale 1 is nearly twice the size of Lot 3.[157]  Mr Chapman explained that in general, a valuer would expect larger land holdings to attract a lower value per hectare.  Larger development sites take longer to develop, longer to sell, and therefore across that there is a greater discount on the later stages and therefore the later land that is released.[158]

    [157] ts 780 - 781 (7/9/2022).

    [158] ts 652 (6/9/2022).

14. As the Bakotas submitted in closing, Mr Zucal seemed to have disregarded the property next door and rather, concentrated on an exercise done in relation to Caporn Street to arrive at a figure of $124 per square metre, which, in the circumstances, does not stand up in terms of what would be the urban value.  Therefore, in circumstances where there is a failure to engage with the property next door and the derived value, which would have indicated a much higher figure, the preparedness of Mr Zucal to stick to Caporn Street in the exercise he has undertaken really smacks more of reconstruction than it does being open-minded to the exercises that are there to be carried out in respect of, arguably, at least for the purpose of urban comparison, the most comparable sale.

15. Sale 2 is not an arm's length transaction and does not meet the test of a market sale.  Mr Zucal negotiated this half hectare lot on behalf of the City following a resumption.[159]

    [159] Exhibit 36A, 20 - 22.

16. As the Bakotas submitted Mr Zucal was not entirely candid about his involvement in this sale and the full position had to be extracted in cross-examination. 

17. The same applies with even greater emphasis to Caporn Street.  In this case, his primary sale was one he had valued in 2012 and in fact, had assessed all elements of the Bakotas' claim for compensation.[160]

    [160] Exhibit 1A, tab 114, ts 769 - 772, 776 - 778 (7/9/2022).

18. Mr Zucal's allocation of part of the price to land value is completely unsupported by any evidence as is his exposition of the negotiations between the parties.

19. As the Bakotas submitted, in relation to the subject property and in relation to his second sale, both of those sales were sales with which Mr Zucal had a personal involvement which significantly predated this case. In the case of the subject land, he had actually not only valued the land; he actually provided all of the elements of the initial offer for compensation that was made in August 2012, yet none of that is revealed or made clear in his report. In the case of sale 2, again, his participation in that really was not volunteered.  It had to be elicited in cross-examination. As Mr Zucal himself makes clear, he is a person who has given evidence in court many times, it is a matter for criticism and reservation as to any weight to attach to the views expressed by Zucal.  Particularly - when it was revealed, having valued the subject land back in 2012, the value of the taken land at $438,524 is, to the dollar, the same figure that he comes to in his 2020 valuation.

20. Sale 2 is not reliable as an indicator of the value of Lot 3.

21. Mr Zucal's sales two to nine, similarly to sale 1, do not fall into the western sewer catchment and accordingly, have a different expectation for services connection than Lot 3.  Mr Zucal fails to adjust for this.

22. For the reasons set out above, Mr Zucal's comparable sales exercise conclusion of $75 per square metre for Lot 3 at the valuation date should be rejected.

23. Mr Highman, the City's engineer, calculated the costs of subdivision (net of GST) as $4,723,246 before taking.[161]

    [161] Exhibit 6, appendix B.

24. Mr Highman admits a fencing cost to Lenore Road in the sum of $102,000 in the after scenario[162] Only $12,000 of this fencing cost is taken into account in Mr Zucal's hypothetical subdivision analysis and ignored in his comparable sales exercise. Mr Zucal similarly ignores the need for fill and the bored crossing in his comparable sales exercise.

    [162] ts 371 (26/8/2022).

25. In addition to a comparison of sales, Mr Zucal carried out a valuation based on a hypothetical subdivision valuation based on a exhibit 24 and the costs estimates of Mr Highman.  He then applied his chosen factors including his 15% profit and risk factor.[163]

    [163] Exhibit 36A [13.48].

26. Mr Zucal's concluded a value of $123 per square metre for Lot 3 following his hypothetical subdivision analysis.[164]

    [164] Exhibit 36A, 41 (final paragraph).

27. Mr Chapman says the approach is unreliable and vulnerable to manipulation of the factors which are required to be inputted.  If those factors are wrong or not based upon proven empirical evidence, then the outcome is unreliable.

28. Mr Chapman stated that a hypothetical subdivision analysis it is unsuitable for use unless the land in question is one to two years away from subdivision.[165]

    [165] ts 662 - 663 (6/9/2022).

29. Mr Chapman rejected Mr Zucal's hypothetical subdivision analysis method for the following reasons:[166]

    (1)most importantly, he disagrees with the 15% Profit and Risk factor which needs to be derived from the analysis of relevant and comparable sales data which Mr Zucal has not done;

    (2)secondly, it is not applied to purchases of property with long term deferrals such as the subject and the comparable sales basket; and

    (3)thirdly, it is inherently unreliable because of the adjustment of subjective factors.

    [166] Exhibit 33 [5.2.1].

30. Mr Chapman also explains why he disagrees with Mr Zucal's 6% per annum deferral rate for the adjustment of development costs used to analyse the comparative value of the subject property against the sales evidence.  Mr Chapman's opinion is that: [167]

    [he] disagrees with the adoption of a 6% per annum deferral rate for the adjustment of development costs used to analyse the comparative value of the subject proper against the sales evidence because the deferral rate should relate to the increase in a cost yet to be expended, not the opportunity or holding cost for a cost already expended.  The adopted rate (6% p.a) relates to the interest cost for development land at the time and is not indicative of cost increases that are likely to be encountered, which will be more akin to inflation.  Accordingly, he concludes that the appropriate deferral rate for cost adjustments would be drawn from a building cost index for the relevant period.  Reference to Rawlinson's Australian Construction Handbook indicates cost increases for the period 2009 to 2019 to be in the range of 0.25% to 3.35% per annum, averaging 1.63% per annum for that period.  Utilisation of the higher rate (6% p.a) by Zucal has the effect of suppressing land value. 

    [167] Exhibit 33, [5.29] (final paragraph).

31. The table in the joint valuers' report of 15 February 2021 shows the comparative values derived from analysis of the sales evidence using the two rates.[168]

    [168] Exhibit 33, 73.

32. Mr Zucal said in relation to his profit and risk factor that:[169]

    (1)he drew his 15% profit and risk factor from rates he proposed in the McKay case although he denied doing this in cross‑examination;[170] and

    (2)there were no zoned urban sales in East Wanneroo at or near the valuation date[171] when in fact Mr Chapman's report of 16 November 2020 lists three such sales which Mr Zucal must have considered in response.[172]

    [169] Exhibit 33, 55 (final paragraph).

    [170] ts 798 (7/9/2022).

    [171] Exhibit 33, 56 (fourth paragraph).

    [172] Exhibit 31, 27.

33. Mr Zucal adopted a 12 month selling period for lots in the hypothetical subdivision approach he carried out on the subject land and then adopted the same period for Caporn Street which is nearly twice the size of Lot 3 (this is derived from the interest factor which in each case stipulates 6 months as 50% of the selling period.[173]  In other words, it takes the same period of 12 months to sell 99 lots as it does to sell 49 or 57.  Clearly, one of these statements is wrong but a correction will alter the outcome of one or the other, thus demonstrating how factors may be used to influence outcomes.

    [173] Exhibit 36A, 19, 41 and 58.

34. One of the inputs into development costs utilised for the before the '[ibid]' exercise carried out by Mr Zucal on Lot 3 applies an assumed development contribution plan rate of $30,000 per lot to 57 lots, producing a total cost of $1,710,000.[174]  No rate has yet been set for the Mary Street Precinct and had not been set at 2012 so the $1,710,000 amount is purely a guess from Mr Highman and has been adopted by Mr Zucal to support his views on the before value of Lot 3.  It is, however, a large amount of money to base a guess or an assumption on.

    [174] Exhibit 9, annexure SCH12.

35. Mr Hajigabriel discussed the various developers contribution plans in Cells 1 - 9 in the City of Wanneroo.  He said that Cell 3 was closer in nature and size (particularly once the Bush Forever lots were extracted) to the Mary Street Precinct which will have its own local developers contribution plans according to the 2021 EWDSP.[175]  The developers contribution plans rate for Cell 3 is just over $18,000 per lot.[176]

    [175] ts 494 (5/9/2022).

    [176] Exhibit 30.

36. If, instead of adding $1,710,000 to the development costs of Lot 3, the amount was $1,026,000 (57 x $18,000), the costs would reduce by an amount in excess of $684,000 (because the consequence has subsequent percentage adjustments).  The consequence is that the deductions from the gross realisation calculations are reduced and the value of the land in the before substantially increases, thereby in turn increasing the sqm rate in the before scenario, which increases the value of the taken land.

37. That adjustment also increases the value of the injurious affection/severance claim suffered by the Bakotas in Mr Zucal's hypothetical subdivision approach which he uses to calculate that claim (acknowledging that the value of the land increases also in the after so it is not such a dramatic effect in that calculation).

38. Mr Zucal uses the hypothetical subdivision approach method to calculate the damage done to the Bakotas' (Lot 9003) by the public work pursuant to s 241(7) of the LAA. He uses Ms Butterworth's amended before and after plans and Highman's amended costs following the engineers' conferral.[177]

    [177] Exhibit 6, appendix B.

39. The following points impugn the exercise being carried out by Mr Zucal:

    (1)the gross realisation of the lots in the after scenario does not reflect their lack of access if such a subdivision was to occur.  The consequences of an appropriate adjustment is likely to reflect a gross realisation of close to zero or very low lot prices based on a long-term risk as to whether access can ever be achieved. Perhaps most damning is the fact that the WAPC would not have granted a subdivisional approval unless access could be demonstrated.  Correcting this error, if it could be corrected, reduces the result considerably which in turn correspondingly increases the damage suffered;

    (2)the amended plans relied upon in the before and after scenarios and drawn by Ms Butterworth do not reflect what should have been an overall density of R30 with R40 around and transport corridors.[178]  Instead, they are drawn at R20 which Mr Zucal concedes is a lesser value.  The result is an underachievement of gross realisations for both plans with the differential conclusion of damage between the two understated.  This reduces the value of the taken land in the before scenario and also increases the damage suffered by the Bakotas to Lot 9003. Mr Hajigabriel's view in his preliminary report is that density would be in the order of R30 - R40.[179]  That contemporaneous view (to the valuation date) has been consistently maintained by him;

    (3)the R40 sales only appear in the after plan (and therefore potentially would have increased the gross realisation and reduced the compensation payable to the Bakotas) while the before plan had no R40 sites which had they been included would have increased the gross realisation and increased the compensation payable to the Bakotas;

    (4)the same is true as to the ratio of R30 sites in the before plan to the ratio in the after plan which is greater in the after plan.  This therefore increases the value of the land in the after scenario disproportionately and decreases the compensation payable to the Bakotas;

    (5)Mr Zucal conceded that the differential between R20 and R30 would be a difference of $300 per square metre.[180]

    (6)Mr Zucal's after scenario calculation used Mr Highman's costings as to the bored crossing cost and the fence as originally costed by Mr Highman (he not having conceded the fill in conferral).  A failure to update these costs in the after scenario to at least Mr Highman's concessions as to a 25% increase for the crossing and a further $90,000 for the fence results in a failure to decrease the net land value in the after scenario.  A corresponding failure to increase the compensation payable to the Bakotas.  A failure to reflect Mr Bowyer's costings has a similar but greater effect.

    [178] Exhibit 2, 1460.2.

    [179] Exhibit 1A, 435.

    [180] ts 802 (7/9/2022).

40. Having concluded a value of $51.03 per square metre for Lot 3 using Ms Butterworth's deferral period in his hypothetical subdivision approach produces a lesser amount of damage,[181] even though using Mr Hajigabriel's deferral period produces a result closer to his comparable sales outcome. Mr Zucal mixes and matches the result in his calculation of the damage under s 241(7) of the LAA.[182]

    [181] Exhibit 36A [13.53].

    [182] Exhibit 36A [14.82].

41. Mr Zucal uses the hypothetical subdivision approach to calculate a value for Lot 3 and Lot 9003 before and after.  He then takes away from the before value of Lot 3 the higher value of the lot ($75 per square metre x 5048 per square metre) derived from his comparable sales approach, to arrive at his value (either $125,729 or of $408,269 depending on which deferral period is relied upon).

42. If Mr Zucal had correctly used his hypothetical subdivision approach derived land value of $50.03 per square metre, the calculation would be as follows:

13 year deferral	$564,254
Less taken land 5048 x $51.03 sqm	$298,372
Diminution in Value	$265,882
7 year deferral	$846,794
Less taken land 5048 sqm x $51.03	$298,372
Diminution in Value	$566,422

1. I conclude that Mr Zucal's failure to carry out the exercise shown in the preceding paragraph, as a bare minimum, illustrates the deficiencies of the HSA exercise he carried out.

2. I accept Mr Chapman's opinion. Correspondingly, I reject Mr Zucal's opinion. I do not regard Mr Zucal as sufficiently objective.

The Bakotas' s 241(7) claim - injurious affection and severance

1. The effect of the resumption of the taken land is the land-locking of Lot 9003, making any future access for residential subdivisional purposes completely dependent on the timing and implementation of development on Lot 9004.

2. As the Bakotas contended, every possible solution to the access problem is attended by such significant uncertainty and delay in realising the residential subdivisional potential of Lot 9003 that the only realistic conclusion is that the highest and best use of Lot 9003 is Rural.

3. In the alternative, Mr Chapman has determined the value of Lot 9003 based upon the assumption of a six year deferral period.

4. It is common ground that in considering this part of the claim in the after scenario, the court is to assess Lot 9003 and the surrounding land taking into account all known circumstances and facts at the date of assessment of the claim.

5. It is clear that although the access problems suffered by Lot 9003 were caused by the public work, there is a need to consider the parallel planning processes did not result from the public work.

6. In that regard, in the after scenario, Mr Hajigabriel says that based on the the City's own timetable, he anticipates that approval for subdivision of Lot 9003 could occur by 2024.[183]

   [183] Exhibit 22 [30] - [37].

7. At that point, unless the access issues have been resolved, Lot 9003 will still be unable to be subdivided because it cannot be shown that its lots have access to a gazetted road, which is a necessary requirement to clear off conditions of subdivision.

8. The evidence indicates that Lot 9003's access difficulties will be unresolved for a considerable period of time into the future.

1. Ms Butterworth explains how a fuller application of the principles of need, nexus and equity, with traffic modelling, would show that the intersection is infrastructure that should be shared in a local DCP as there will be additional demand generated by the future residents of the Mary Street Precinct.[222]

   [222] Exhibit 27, [14] - [20], [24] - [25].

2. Mr Hajigabriel considered that the need requirement was not met for the inclusion of the intersection in a district or a local developer contribution plan.[223]

   [223] Exhibit 22; ts 486 - 487 (5/9/2022).

3. Mr Hajigabriel agreed that one of the purposes of the State Planning Policy 3.6 - Infrastructure and Contributions (SPP 3.6) is to plan infrastructure for new needs.  When the Mary Street Precinct is planned for a transition to suburban neighbourhood, the need must be assessed as the needs of the subdivided lots, not the existing englobo lots (not those subject to Bush Forever).[224]

   [224] ts 565 (6/9/2022).

4. Mr Hajigabriel accepted that without traffic modelling, he could not assess intersection needs of the new subdivided lots.[225]  While he accepted that Ms  Butterworth's view that the intersection would be a local developer contribution plan item is possible, it was not what he felt was likely unless traffic modelling supported it.[226]

   [225] ts 565 - 568.

   [226] ts 571 (6/9/2022).

5. City, State and Federal funding for roads and roundabouts are other possibilities noted by Mr Hajigabriel.[227]  There was no evidence as to the possibility or probability of such funding and I have not taken it into account.

   [227] ts 569 - 570 (6/9/2022).

6. Ms Butterworth explained in her second supplementary report of 23 August 2022 and in oral evidence that she accepted that, on the basis of the expected traffic for the New Road, it was not likely that it would be within a local developer contribution plan.[228]

   [228] Exhibit 27 [18].

7. Mr Bordbar did not consider the intersection would be within a developer contribution plan.[229]  His conclusion was confirmed by Mr Hajigabriel.

   [229] Exhibit 3 [16] - [21]; ts 159 - 160 (24/8/2022).

8. In his third supplementary report of 16 August 2022, Mr Hajigabriel addresses the New Road and the roundabout and says as follows:

   (1)the roundabout and New Road will be neither a district developer contribution plan item nor a local developer contribution plan item because they fail the tests of need and nexus which are mandatory requirements in complying with SPP 3.6.[230]  All of the tests need to be met.[231]  Ms Butterworth agrees that the New Road would not be a developer contribution plan item but argues that the roundabout would be.  Mr Hajigabriel was not shaken in cross examination and is supported by Mr Bordbar who encounters such matters in his expertise as a traffic engineer;

   (2)Mr Hajigabriel says that the ability for Lot 9003 to gain access through Lot 9005 would depend upon the implementation of subdivision on Lot 9005 and comments on the effect of the land lost to 9005 through construction of accommodating the roundabout;[232] and

   (3)the cost of construction of the roundabout would be borne by the owner or developer of Lot 9005, being the landholding directly adjoining the roundabout.[233]

   [230] Exhibit 22 [7] - [15].

   [231] ts 568 (6/9/2022).

   [232] Exhibit 22 [18].

   [233] Exhibit 22 [18].

9. Mr Bowyer stated in his second supplementary report of 17 August 2022:[234]

   Based on my experience, what is important to note, however, is that if the roundabout works were part of a DCP, funding such expensive works is often an issue.  If a DCP item is essential to gain access to land to develop it, rarely does the DCP bank account have sufficient funds in it to promptly reimburse the pioneer developer that will have prefunded the cost of the works.  What is more common is that the pioneer developer must fund the works often for an indeterminate period before receiving a refund from the DCP.  Such a delay may mean that the developer does not proceed with the development until there is a certainty that they do not have to carry the construction and interest costs for the works for a long period of time.

   As Precinct 1 contains quite a large percentage of Bush Forever land, this reduces the potential number of lots which may be constructed which increases the burden per lot.

   Further the lots east of Lot 9003 will not be in any hurry to develop until the development front approaches which I deal with in other parts of this report.

   Taking all that together, then in my view it is likely that the access into Lot 9005 via the roundabout will not take place for many years if at all.

   [234] Exhibit 8 [16] - [19].

Access through Lot 9004 and Lot 5

1. In the alternative to access through Lot 9003, the City argues that access to Lot 9003 may occur via Lot 9004 and Lot 5.

2. There are a significant number of difficulties with this proposition which have the potential to delay access to Lot 9003 indefinitely.

3. First and foremost, the majority of Lot 9004 and all lots east of it fall into a different sewer catchment to Lot 9003.

4. A further problem concerns the possibility of an access road through Lot 9004.

5. The evidence of Mr Chapman, which is annexed to his supplementary report dated 6 July 2021 is that Jazna, the present owner of Lot 9004, agreed to buy Lot 9004 by contract dated 17 March 2005.  The contract was subject to a condition that on subdivision, Jazna would convey the three lots delineated on the plan annexed to the contract and would pay for new services to the new dwelling which has been built on this land.

6. The evidence of both engineers is that it would be difficult, if not impossible, to connect sewer (even if capacity is available) to the homestead lots because they are so low lying.[235]  The conundrum is clear.  On subdivisional approval, Jazna is contractually obliged to transfer the homestead lots to the former owners, Mr and Mrs Klarich, and to connect sewer to their newly built house.

   [235] ts 351 - 352, 431 - 432 (26/8/2022).

7. Placing the homestead lots into a residual parent lot would not enable those contractual obligations to be fulfilled, even if the WAPC could be persuaded to suspend its requirement for all lots to be shown to be capable of servicing to sewer which is by no means an assured outcome.

8. The final version of the 2021 EWDSP was released in August 2021.[236]  Notable features of the EWDSP include:

   (a)it is the foundation for more detailed and staged planning processes to occur.  Each precinct needs to have a local structure plan prepared and development contribution plan prepared;[237]

   (b)the planning is to progress at a precinct level: for the lifting of urban deferment in the MRS, the local structure plan, the local scheme amendment and the development contribution plan;[238]

   (c)a flowchart of planning showing subdivision and development expected to be 2024 and later;[239]

   (d)planning in outline, including requirements for the lifting of the urban deferment at 2.2.6;[240]

   (e)precinct outlines including of Mary Street (subject being Mary Street);[241]

   (f)local structure planning and local development contribution plan requirements;[242] and

   (g)staged servicing.[243]

   [236] Exhibit 2, tab 100B.

   [237] Exhibit 2, 2086.

   [238] Exhibit 2, 2087.

   [239] Exhibit 2, 2088 (figure 1.2).

   [240] Exhibit 2, 2091.

   [241] Exhibit 2, 2115.

   [242] Exhibit 2, 2118 - 2123.

   [243] Exhibit 2, 2124 (figure 1.16).

9. In light of the EWDSP and the need to plan the staging and connection of all the future servicing, as well as the need for cooperative land assemblage, the local planning preceding subdivision will likely include:

   (a)local road connections; and

   (b)a development contribution plan, with at least some local roads.

10. The 2019 WAPC Lifting of Urban Deferment Guidelines[244] show that the WAPC expects servicing connections to be agreed between developers and service providers, including some description of staging and financing before the MRS urban deferment is lifted (see the 'criteria for lifting urban deferment' at page 2 of the guidelines, first bullet point). 

    [244] Exhibit 27 attachment FSREP3.

11. The sewer planning for Precinct 2 of the EWDSP (immediately to the north of the Mary St precinct) has not been done.  It may not be as slow as has been outlined.  Mr Bowyer agreed with some simple changes that could be made.[245] 

    [245] ts 373 - 374, 379 (26/8/2022).

12. It is agreed between the experts that no subdivision of the Mary Street Precinct will be proceeding ahead of the planning process. As servicing timing must follow the planning, it is the planning (which can be impacted by fragmentation), that is the primary delay issue.[246] 

    [246] ts 348 - 349 (26/8/2022).

13. As far as land parcels are still zoned Rural resource, they are all equally hampered in their ability to do any urban development.[247]

    [247] ts 250 (26/8/2022).

14. Mr Hajigabriel's view was that if a closer sewer servicing option was shown to be feasible there would be no need to wait for services to progress through Precinct 2.[248]

    [248] ts 580 (6/9/2022).

15. Once conceptual sewer planning is demonstrated to the satisfaction of the Water Corporation, the WAPC usually is satisfied with the level of planning.[249]

    [249] ts 579 - 580 (6/9/2022).

16. Ms Butterworth observed that if the servicing took decades to reach the Mary Street Precinct, the urban deferment would not be lifted until the servicing was demonstrated.[250]

    [250] Exhibit 27, [42], [48].

17. When pioneer owners or developers want to progress in a precinct - such as the Mary Street Precinct they need to organise and pay for:[251]

    (a)the local structure plan sufficient to get the MRS deferment lifted;

    (b)the sewer and other servicing concept planning sufficient to get the MRS deferment lifted;

    (c)the local structure plan to get final WAPC approval; and

    (d)some parts of the development contribution plan not organised by the City.

    [251] ts 580 (6/9/2022).

18. If the servicing plans provide for the servicing to be staged, then the pioneer developers only need to fund and pay for each stage at the time that is proposed to be progressed – subdivided and developed.[252] 

    [252] ts 580 - 581 (6/9/2022).

19. The homestead lots on Lot 9004 are at the southern end, which means they are harder to connect and have access challenges arising from their existing septic connections.

20. Mr Highman referred to the potential for an initial subdivision to have these lots in one balance lot.  Ms Butterworth agreed that it was possible.[253]  In cross-examination, she explained in more detail how it was possible for the remaining lots to remain on septic until further sewer is put through.[254]

    [253] ts 583 (6/9/2022).

    [254] ts 620 (6/9/2022).

21. Mr Hajigabriel accepted that if the balance lot held all three smaller homestead lots it would be of sufficient size that it could obtain a discretionary approval to continue to have septic.  When the further subdivision subdivided the balance lot into the homestead lots they could then be fully sewered.  Mr Hajigabriel thought it would be hard to get approval.[255] 

    [255] ts 581- 583 (6/9/2022).

22. As to whether the local structure planning will provide Lot 9003 with access through Lot 9004, Mr Hajigabriel  said that he simply did not know yet.[256]

    [256] ts 553 (5/9/2022).

23. Until or if Jazna can solve the sewer problem, no access road can be built to enable Lot 9003 access to a gazetted road.

24. Even if a subdivisional approval could somehow be obtained to build the road, the amount of the southern part of Lot 4, that is, south of the Bush Forever site, available for subdivision after the extraction of the homestead lots and the road may be so small as to make any development unviable.  The City has brought no evidence on the viability of such a proposition.

25. Further, any subdivision of Lot 5 to accommodate such a road raises the possibility that Jazna may have to cede, free of cost, as a condition of subdivision, the Bush Forever site on Lot 5.  That in turn, raises questions about the viability of developing Lot 5 just to accommodate a road. Again, the City has brought no evidence as to viability.

26. I accept that the case of the City is built on nothing but pure speculation as to what Jazna or any other owner of Lots 9005, Lot 9004, and Lot 5 may or may not do at some indeterminate point in the future.[257]  It is one thing to speculate on future development in terms of costings; it is another to speculate on what a developer may do when the developer could be called.

    [257] see Exhibit 37.

27. While the owners of those lots may facilitate access, it is equally, if not more, likely that they may take a long position and seek to bring the Bakotas to a point where they may have to sell their land cheaply as the only alternative left to them to realise the asset.  Ultimately, the only other purchaser in the market may be another market gardener and that is a direct consequence of the public work which has denied the Bakotas access to a gazetted road - a right they enjoyed prior to the public work.

28. While Mr Zucal was not correct about the type of hypothetical purchaser who would be interested in Lot 3 in the before scenario, it may be that purchaser, another market gardener, is the only option left to the Bakotas in the after scenario.

29. The Bakotas' daughter, Ms Lawrence, the Bakotas' daughter said in her evidence that since 2007, she has received no offer or approach of any kind from Jazna.[258]

    [258] ts 110 - 111 (22/8/2022).

30. Mr Chapman says that all of the foregoing factors mean that much delay and uncertainty attends the after scenario value of Lot 9003.  This is caused by the access difficulties which, in turn, are delayed by the provision of sewer to the east.  He concludes that the highest and best use value of lot 9003 in the after scenario can only be Rural.[259]

    [259] Exhibit 31 [113]; exhibit 35 [17].

31. Indeed, even Mr Zucal says that Lot 9003 may only be of use as an offset by other developers needing public open space.[260]

    [260] ts 829 (7/9/22).

32. Mr Chapman quantified his Rural basis conclusions on value his report of 17 August 2022.[261]  In cross-examination, he was taken to the agreed conferral result with Mr Zucal of $260 per square metre improved Rural value and he has amended the severance calculation as a consequence to $2,836,872.[262]  This calculation encapsulates the value of the improvements on Lot 9003 allowing for the continued market garden operation.  In addition, he has quantified the injurious affection claim in the same way as for other calculations (a 2% reduction in value), as Lot 9003 is now exposed to a lengthy stretch of Lenore Road with heavy traffic moving past it.

    [261] Exhibit 35, 12.

    [262] ts 827 - 828 (7/9/2022).

33. Even if the roundabout was a district contribution plan item, the possibility of raising sufficient money from lot owners to fund that construction in a reasonable time frame is hampered by the presence of Bush Forever lots which will produce no district contribution plan contributions, and the difficulty of sewer access, which will result in a development delay.

34. The inability for Lot 9003 to achieve access through Lot 9005 is a circumstance caused by the public work.

35. Although the delay in servicing of land to the east is not a factor caused by the public work, it is a factor which would delay Lot 9003 in achieving access - a problem which is caused by the public work.

36. Having regard to the problems with subdivision, cost and access identified above, I conclude that the only realistic option is to value Lot 3 (Lot 9003) on the basis that its retained value is Rural.

37. Mr Highman's evidence on possible alternative sewer connections is fanciful and without any basis that they could be achieved or that there is sufficient spare capacity to enable them in the western catchment.  The email of Brett Coombes of the Water Corporation in 2020 is quite clear that any capacity is heavily caveated by a number of factors which can give no certainty as to timing or indeed whether they will happen at all.

38. In giving this evidence, Mr Highman departed from his agreed 2020 position with Mr Bowyer and has not been able to give any explanation for that departure.  His evidence should also be rejected.

39. All of the above leads to an unavoidable conclusion that in the after scenario, the highest and best use of Lot 9003 is Rural.

40. If the access problem is not solved, it is pointless putting in a sewer because the land could not be subdivided.

41. Realistically, the only options for sale of Lot 9003 are to market gardeners paying Rural values or developers who recognise the constraints on Lot 9003 and may well drive a hard bargain.

42. The value of Lot 9003 in the after scenario determines the Bakotas' s 241(7) claim.

43. In that regard, Mr Chapman's Rural valuation in respect of the after scenario for Lot 9003 should be accepted, particularly as the improved rate he applies of $26 per square metre is one agreed by both valuers.

44. In its closing submissions, the City made extensive submissions as to the planning framework.[263] Those submissions add little to the determination of this case in that they are extremely general, except to the extent that they are referred to in the expert evidence.  They are substantially conclusions drawn by counsel rather than based on the expert evidence.  I have relied on the planning advice of the experts and in particular that of Mr Hajigabriel, in preference to that of Ms Butterworth.

    [263] Plaintiff's outline of closing submissions and authorities filed 12 September 2022.

45. The prudent purchaser would assume that a district structure plan would be required.[264]  It does not follow from that that the WAPC would have required a district structure plan covering 8000 hectares. The district structure plan showed multiple smaller precincts.[265]

    [264] ts 461 (5/9/2022).

    [265] Exhibit 2, 1783.

46. The City argued that the concept of a lesser structure plan area was new evidence at trial, given over objection.  That objection, given once the evidence on the point was complete, was overruled.[266] In examination‑in‑chief Ms Butterworth conceded that it may be possible for a district structure plan at a lower level subject to WAPC approval.[267]

    [266] ts 474 - 475 (5/9/2022).

    [267] ts 508 - 509 (5/9/2022).

47. The City submitted at trial Mr Hajigabriel was asked if he agreed 'that the subject land's highest and best use as at 23 January 2012 was for continued market gardening allowing for a longer-term transition to urban development'.  He replied, 'Yes. Market gardening with the potential for urban development.[268]  It was common ground on the pleadings that that the highest and best use of Lot 3 at the valuation date of 23 January 2012 was potential for residential subdivision.

    [268] ts 528 (5/9/2022).

48. The City submitted that because Mr Hajigabriel did not produce an alternative subdivision, a critique of what was produced does not change the fact that there was only one set of subdivision plans produced.  However, in conferral, both experts agreed that the plan of subdivision should have allowed for a higher coding.  The plan of subdivision should not have been relied upon for the HAS because it was inaccurate.

1. The wider district plan area Mr Hajigabriel described at trial features two Bush Forever parcels at Lots 5 and Lot 6.[269] 

   [269] ts 473 - 474 (5/9/2022).

2. The City submitted that Ms Butterworth explained that 6.2.2 of the 2011 EWSP[270] - which sets out the requirements of district structure plan - stipulates structure planning to take into account a range of factors that are realistically going to require assessments across larger portions of the plan area.  This means that even if a smaller structure plan can be approved ahead of the entire structure plan, it may not in practice be much faster to do so given all that has to be planned. I was unable to find the reference to this assertion.

   [270] Exhibit 2, tab 79.

3. A purchaser looking to use land for a specific purpose will discount, given that uncertainty, or pay less.[271]

   [271] ts 697 (6/9/2022).

1. The greater the level of uncertainty, the more discount for risk.[272] 

   [272] ts 698 (6/9/2022).

2. A prudent purchaser faced with planning advice of the nature of that provided by Mr Hajigabriel would adjust their offer based on risk which would be an increase in either the deferral factor or the discount rate that they applied.[273]

   [273] ts 698 (6/9/2022).

3. The most relevant thing that it shows is the engagement from Jazna.  Prior to the taking, Jazna owned three Mary Street properties in the landowner group.  Jazna appointed a director to Fairteam Holdings Pty Ltd, the company set up for the syndicate.[274]  Jazna's assembly attempts reinforce the likelihood that the Lot 9004 owner will in time want to progress to develop a collective area. 

   [274] See Exhibit 1B, 708; See also exhibit 1B, 698, 704.

4. Mr Hajigabriel observed that '[f]orward planning for service infrastructure would typically progress in parallel with strategic town planning'.[275]

   [275] Exhibit 17, 6.

5. The 2011 EWSP intended that local structure planning would be at neighbourhood scale.[276] 

   [276] Exhibit 2, 1745.

The Demolition Agreement and the residential claim

1. As part of their claim against the City, the Bakotas claim an amount they describe as residential.  They claim $202,517 for rent and $667.08 for residential removal costs.

2. The claim arises in that at some stage the Bakotas extended a shed which had been used for market garden purposes to include bedrooms, a bathroom, a kitchen and various other places one would expect in a domestic residence.  They did the extension without council approval.  At some later stage, they put an annex in the side of the shed to extend the residence.  Although they had permission to build the annex, they did not have permission to use it for residential purposes.

3. It is not in contention that at the valuation date, the Bakotas occupied one of the sheds for the purposes of their market garden operations and also occupied a part of it for residential purposes.  The residential part, after resumption, was located on Lot 9003.

4. The residential part of the shed contained three bedrooms, living room, kitchen, two bathrooms, toilets and laundry.  Mr Lawrence gave evidence that the residential part of the shed had been internally fitted out by the Bakotas as a dwelling and presented as such.  The Bakotas lived there from 1985 until November 2012 when they moved to 2 Matlock Heights, Pearsall.

5. The residential part of the shed was self-contained and located on land which had not been resumed by the City.

6. The consequence of that last fact was that the City could not compel the total demolition of the shed without further resumption but they desired that demolition and ultimately achieved it by the Demolition Agreement.

7. Commencing in 2012, the parties entered into lengthy correspondence on the question of the demolition of the shed which finally ended in agreement.[277]

   [277] Exhibits 1A, tabs 115,123 - 127; exhibit 1C, tabs 221 - 253.

8. The Demolition Agreement in the pleadings provided that compensation was to be paid by the City to the Bakotas for consequential loss and damage by virtue of the demolition of the shed and that the shed could be demolished by the City at its expense.[278]

   [278]Further amended statement of claim filed 24 June 2022 [51]..

9. The Bakotas submit that one the consequences of the demolition of the shed relevantly is that they lost the benefit of being able to reside in the shed until redevelopment of Lot 3 for urban purposes occurred.

10. Paragraph 51 of the further amended statement of claim pleads consequential loss and damage by reason of the demolition of the shed. By par 37A of the defence, the City admits  par 51.  That admission does not identify what consequential loss and damage is.

11. The Bakotas plead that it would be unconscionable for the City not to pay agreed compensation for the loss of the residential rights.

12. I do not accept that the Bakotas have suffered consequential loss as a result of the loss of their residence in the shed.  They had no right to reside in the shed for the reasons set out below.

13. In about August 1984, the Bakotas' builder, Modemline  Pty Ltd, applied  for  a  building licence to erect the shed.[279]  On 22 August 1984, the Shire of Wanneroo (as the City then was) issued a building licence which included in the list of conditions and procedures:

    This building must not be used for habitable, commercial or industrial purposes and no alterations are to be carried out without prior council permission.

    [279] Exhibit 1A, p 409.

14. Condition 11 in the printed conditions at the foot of the document provided:[280]

    Use of premises: no change of use is to take place without the council's approval in writing. Outbuildings are not to be used for residential purposes or for any commercial, industrial or business use.

    [280] Exhibit 1A, p 411.

15. An application for the annex which is described in the application as washroom and storage was made to the City on 9 December 1985. The application was made by Cleveland Industries Limited.  A building licence was issued on 2 December 1985[281] which repeated condition 11 of the application for the building licence for the shed.  The plans[282] indicated that there would be a washroom, a water closet, a shower and a store.

    [281] Exhibit 1A, p 421.

    [282] Exhibit 1A, p 425.

16. The City did permit temporary accommodation in Rural and special Rural areas where the following conditions were met:

    (a)a building licence for a permanent dwelling had been issued for the same block of land and the footings or building slab had been poured; and

    (b)a water supply and toilet facilities have been provided to the satisfaction of the City's environmental health manager.

17. If the permanent dwelling was going to take longer than six months to complete, then the City was able to permit an extension of time.  On 19 October 1990, the City wrote to Ivan Bakota at Lot 3 indicating that a survey carried out by it had indicated that the shed had facilities which were unable to be lived in on a regular basis.  The letter further stated:

    The Health Act 1911 (as amended) prohibits the use of such structures as dwellings without permission of the local authority. Council records indicate that no such permission has been given for the shed on your property.

18. The letter then noted the council policy as set out above.  The letter requested Mr Bakota to contact the council's Health Department within 14 days to inform it of their intentions.[283]  The City sent a further letter dated 14 July 1991 requiring Mr Bakota to advise the City of its intentions regarding the construction of a permanent residence.[284]  A notice pursuant to the Health Act 1911 (as amended) attached to the letter required Mr Bakota to 'cease occupying or permitting the occupation of the shed located on Lot 3 (185) Mary Street, Wanneroo within six months ending on 14 July 1991'.[285]  On 22 March 1991, Mr Bakota wrote to the town clerk of the City stating:

    We hereby advise that we intend building a new residence, and ceasing occupancy of temporary accommodation as soon as possible. However, due to the current difficult economic environment, and some problems we are having planning our new home, we find it necessary to appeal for a time extension to the 14 July deadline for locating the present premises.[286]

    [283] Exhibit 1A, p 339.

    [284] Exhibit 1A, p 340.

    [285] Exhibit 1A, p 341.

    [286] See also exhibit 1A [346].

19. On 8 October 1991, the City wrote to the Bakotas advising that the City had enacted a 12-month moratorium on enforcement of the health notices issued on 14 January 1991.[287]  A further letter from the City to the Bakotas was sent on 16 January 1992[288] and 7 September 1992[289] advising the Bakotas of the pending expiration of the time limit.  The moratorium was extended again on 10 November 1992[290] and on 30 June 1993[291] and on 21 February 1994[292] and on 2 December 1994.[293]  On 25 October 2001, the Bakotas signed an application for approval to commence development which was received by the City on 26 October 2001.[294]  The letter exhibited plans for a building on Lot 3.

    [287] Exhibit 1A, p 347.

    [288] Exhibit 1A, p 348.

    [289] Exhibit 1A, p 349.

    [290] Exhibit 1A, p 350.

    [291] Exhibit 1A, p 351.

    [292] Exhibit 1A, p 352.

    [293] Exhibit 1A, p 355.

    [294] Exhibit 1A, p 393.

20. The City responded on 30 November 2001[295] advising that the proposed location of the dwelling on the lot would compromise the intended location of the Lenore Road alignment:

    The City is unable to approve the dwelling in the proposed location. It is suggested that an alternate location be considered which will not conflict with the proposed realignment.

    [295] Exhibit 1A, p 398.

21. A copy of the proposed realignment was enclosed with the letter. Angela Bakota responded on behalf of Ivan and Ruzica Bakota indicating that:

    In order to resubmit an alternative application, we need to confirm the exact location of the road proposed in Cell 4 of the local structure plan and how our property will be impacted. Please provide information to that effect, a map with a sketch of the 'proposed' road will not suffice.

22. On 8 June 2012, Greg Rowe and Associates (who had been engaged by the Bakotas) wrote to Norton Rose Australia.[296]  The letter relevantly stated:

    We are advised by the landowners that Planning Approval has been obtained for all three (3) sheds but that the use of the larger shed for residential purposes has not been authorised by the City of Wanneroo. A laundry and bathroom addition was made to the large shed in (indistinct) 1985. This addition was approved by the City of Wanneroo's building and health departments.

    I note that the letter does not mention that the use of the shed for a kitchen, office and bedrooms was not approved by the City of Wanneroo.

    [296] Exhibit 1A, p 429.

23. It is evident that the Bakotas' occupation of the shed was contrary to the Health Act.

24. The fact that the City may not have taken proceedings to prosecute the Bakotas for their residential occupation of the shed, does not make conduct that was otherwise illegal, legal. No estoppel operates in relation to illegal activity. Because the occupation of the premises was illegal, the Bakotas are not entitled to compensation for their illegal activity and their claim for residential rebuilding should be dismissed.

25. It is not in contention that the construction of Lenore Road resulted in substantial traffic, now 24,000 vehicles per day[297] passing very close to the shed causing noise and potential safety issue.[298]  That traffic is projected to reach 32,000 vehicles per day in 2031 and 47000 vehicles per day by 2051.[299]  Lenore Road is also identified as a future Other Regional Road, the second highest category of road in Western Australia.

    [297] ts 191 (25/8/22).

    [298] Exhibit 36A [9.16], [14.64], [14.67] - [14.68].

    [299] ts 191 (25/8/22).

26. Previously, the shed was 'well removed from Lenore Road (approximately 200 metres)'.[300]

    [300] Exhibit 36A [7.5].

27. The Bokotas have not made out their claim for compensation for loss of the residence in the shed, nor for the removal expenses.

1. I do not accept the City's contention that a great many things could change meaning such that no delay of this type will ever occur. The contention is purely speculative and unsupported by evidence.

2. As long as Lot 9003 is landlocked, it has suffered delay in subdivision, due to its neighbours. It has suffered actual damage.

Conclusion

1. I have determined that the Bakotas are entitled to compensation.

2. I propose orders that:

   (1)The Bakotas' are entitled to compensation as follows:

Category

Bakotas' primary claim
- Rural value

Value of the land taken

(s 241(2) LAA)

$643,170

Reinstatement of a business

(s 241(6)(b) LAA)

$239,708

Severance

$2,836,872

Injurious affection

$14,530

Subtotal

$3,734,280

10% solatium

$373,427.67

Total

$4,107,707.67

(2)The Bakotas are entitled to interest on the full amount from the date of taking until the part payment by the City and on the balance from the date of payment until judgment at 6% per annum.

(3)The City's counterclaim is dismissed.

(4)The City pay the Bakotas' costs of the action to be taxed if not agreed.

(5)The parties are to file a joint minute to give effect to these reasons prior to the handing down of the judgment.

ANNEXURE 1

ANNEXURE 2

ANNEXURE 3

ANNEXURE 4

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

SB

Associate to the Honourable Justice Curthoys

23 DECEMBER 2022