Cerini v The Minister for Transport - [2001] WASC 309

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CERINI -v- THE MINISTER FOR TRANSPORT [2001] WASC 309

CORAM: PARKER J

HEARD: 14 MAY - 6 JUNE, 11-27 JUNE, 2 & 3 JULY 2001

DELIVERED : 14 NOVEMBER 2001

FILE NO/S: CIV 2472 of 2000

BETWEEN: GRAHAM VICTOR CERINI
Plaintiff
AND
THE MINISTER FOR TRANSPORT
Defendant

Catchwords:

Real property - Resumption or compulsory taking of land - Compensation - Assessment

Legislation:

Land Administration Act 1997 (WA), s 241

Result:

Compensation awarded

Category: A

Representation:

Counsel:

Plaintiff: Mr D W McLeod & Ms L E Rowley
Defendant: Ms C F Jenkins & Mr F Sunderland

Solicitors:

Plaintiff: McLeod & Co
Defendant: State Crown Solicitor

Case(s) referred to in judgment(s):

Brewarrana Pty Ltd v Commissioner of Highways (No 1) [1973] LGRA 170
Cook and Edwards v City of Stirling (1991) 4 WAR 469
Crompton v Commissioner of Highways (1973) 32 LGRA 8
D'Amico v Shire of Swan-Guildford [1969] WAR 183
Director of Building Lands v Shun Fung Ironworks Ltd [1995] 2 WLR 404
Edwards v Minister for Transport [1964] 2 QB 134
Konowalow and Felber v Minister for Works [1961] WAR 40
Marshall v Blackpool Corporation [1935] AC 16
Marshall v Director-General, Department of Transport [2001] HCA 37
Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565
R v Compensation Court of Western Australia; ex parte State Planning Commission & Anor; Re Della-Vedova (1990) 2 WAR 242
Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302
Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373
Spencer v The Commonwealth (1907) 5 CLR 418
Turner v Minister of Public Instruction (1956) 95 CLR 245

Case(s) also cited:

Britton v Minister for Education (1985) 29 The Caluer 224
Bronzel v State Planning Authority (1979) 44 LGRA 34
Brown Brothers (Marine) Holdings Pty Ltd & Anor v New South Wales Land and Housing Corporation (1991) 72 LGRA 50
Clark v Ryan (1960) 103 CLR 486
Commissioner for Government Transport v Adamcik ((1961) 106 CLR 292
Commissioner of Succession Duties (SA) v Executor Trustee and Agency Company of SA Ltd (1947) 74 CLR 358
Commonwealth v Arklay (1952) 87 CLR 159
Commonwealth v Milledge (1953) 90 CLR 157
Commonwealth v Morison (1972) 127 CLR 32
Cook & Edwards v City of Stirling (1991) 4 WAR 469
Crisp & Gunn Co-operative Ltd v Hobart Corporation (1963) 110 CLR 538
De Ieso v Commissioner of Highways (1981) 27 SASR 248
Dixon v City of Glenorchy (1968) 15 LGRA 407
Eagle v Charing Cross Railway Company (1867) 30 LJCP 297
Eggar v Commissioner of Main Roads [1979] Qd R 501
Fenton Nominees Ltd v Valuer-General (SA) (1981) 27 SASR 258
Gregory & Anor v Commissioner of Taxation of the Commonwealth of Australia (1971) 123 CLR 547
Haig v Minister Administering the National Parks and Wildlife Act 1974 (1994) 85 LGERA 143
Horn v Sunderland Corporation (1941) 1 All ER 480
Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196
Housing Commission of NSW v Falconer (1981) 50 LGRA 355
Kenthurst Investments Pty Ltd v Wyong Shire Council (1964) 10 LGRA 307
King v Minister for Planning and Housing (1991) 76 LGRA 288
Lake Erie and Northern Railway Company v Brantford Golf and Country Club (1917) 32 DLR 219
Latimer v Northcoast National Agricultural & Industrial Society (1938) 14 LGR (NSW) 30
Lucas v Chesterfield Gas and Water Board [1908] 1 KB 571
Lyon v Fishmongers' Company & Conservators of the River Thames (1876) 1 App Cas 662
March v City of Frankston (No 1) [1969] VR 350
March v City of Frankston (No 2) (1968) 19 LGRA 285
Mario Piraino Pty Ltd v Roads Corporation (1990) 76 LGRA 263
Maritime Services Board of New South Wales v Leichhardt Municipal Council (1972) 26 LGRA 42
Melwoods Units Pty Ltd v Commissioner of Main Roads [1979] 1 AC 426
Minister of Environment v Petroccia (1982) 30 SASR 333
Minister of State for Home Affairs v Rostron & Ors (1914) 18 CLR 634
Minister of Transport v Edwards (1964) 1 All ER 483
Moad v Orange City Council (1957) 2 LGRA 171
National Justice Compania Naviera SA v Prudential Assurance Co Ltd ("The Ikarian Reefer") [1993] 2 Lloyd's Rep 68
Pastoral Finance Associated Ltd v The Minister [1914] AC 1083
Prasad v Wolverhampton Borough Council [1983] Ch 333
R v Dowding [2000] VSC 222
R v Murphy (1990) 64 ALJR 593
Re Schooley v Lake Erie and Northern Railway Company (1915) 25 DLR 537
Robinson & Co Ltd v Collector of Land Revenue Singapore (1981) 1 WLR 1614
Sampi v State of Western Australia [2000] FCA 1862
Schiller v Kyeanba Shire Council (1933) 3 The Valuer 28
Sharp & Anor v Western Australian Planning Commission [1999] WASC 223
Sheahan v Hertz Australia Pty Ltd (1994) 14 ACSR 209
Sheffield Development Corporation v Glossop Sectional Buildings Ltd [1994] 1 WLR 1676
Shellharbour Municipal Council v Rovili Pty Ltd (1989) 16 NSWLR 104
Sisters of Charity of Rockingham v The King [1922] 2 AC 315
Universal Land and Investment Ltd v Commonwealth (1988) 80 ACTR 15
Vernon v Bosley (No 1) [1997] 1 All ER 577
Wollams v The Minister (1957) 75 WN (NSW) 103
Wong v Minister of Water Resources (1985) 55 LGRA 431
X (minor) v Bedfordshire County Council (1995) 2 AC 633
Yates Property Corp Pty Ltd (in liq) v Darling Harbour Authority (1990) 70 LGRA 187

PARKER J: The plaintiff is a property developer and builder. At all relevant times he was the registered proprietor of an estate in fee simple in land in Newcastle Street, West Perth being portion of Perth Suburban Lot 175 and being part of Lot 116 on Plan 2360 and being the whole of the land comprised in Certificate of Title Volume 1193 Folio 707 ("Lot 116"). Until 1 May 1998 the land had an area of 658 square metres. It was substantially rectangular with a frontage to Newcastle Street of 17.96 metres. It was on the north side of Newcastle Street and before relevant events one other lot of land on the western boundary of Lot 116 separated Lot 116 from the corner of Loftus Street. In this locality Newcastle Street is aligned approximately east west and Loftus Street approximately north south. As will appear, since 1 May 1998 Lot 116 has had an area of 640 square metres as 18 square metres was resumed on that date.
In about 1936 the plaintiff's parents had built a modest brick and tile duplex dwelling on Lot 116. It seems it was never used by them for their own dwelling but was let as an investment property. The property was inherited by the plaintiff in 1979 and he has held it since then. The land stands well above the level of the footpath of Newcastle Street and there were retaining walls to the frontage and part of the western boundary. There were steps up from Newcastle Street to a pathway leading to the entrances of the duplex residences but there was no vehicular access to Lot 116. The condition of the duplex dwelling during the period relevant to this action is the subject of much dispute but it is fair to say that over many years it has been allowed to run down. On 1 May 1998, which is the critical date for the purposes of this action, it was vacant and derelict and the subject of a notice under s 135, s 137 and s 139 of the Health Act 1911 declaring it unfit for human habitation and requiring significant works before it could be occupied. More of that later.
The defendant is the relevant Minister for the purposes of this action, and was also a delegate of the Minister for Lands for the purpose of the Land Administration Act 1997 (the "LA Act"). By notice published in the Government Gazette on 12 December 1997 the defendant gave notice of intention to take or resume 18 square metres of Lot 116 (the "resumed land") pursuant to s 17(2) of the Land Acquisition and Public Works Act 1902 for the purpose of "road construction duplicating of Loftus Street (Drawing No D9723-204 and D9723-205)".
By notice published in the Government Gazette of 25 April 1998 the defendant gave notice of the taking of the 18 square metres of Lot 116 for the public purpose of "Loftus Street duplication - important regional road" ("the public work"). A Taking Order was lodged at the Department of Land Administration on 1 May 1998 which is thereby the date of the taking for the purposes of compensation for the compulsory taking.
The resumed land forms a truncation at the southwest corner of Lot 116. It is not a regular diagonal truncation. As part of the same public work the lot to the west of Lot 116, which had formerly been on the corner of Newcastle and Loftus Streets, was also resumed. Hence, Lot 116 has become a corner lot and the truncation for which the resumed land was taken now facilitates the layout of the intersection and associated footpaths. The truncation does not affect the existing duplex dwelling.

The plaintiff's claim

On 1 or 2 October 1998 the plaintiff submitted a claim for compensation for the compulsory taking of the resumed land. This was particularised as:
•Unaffected market value of land taken, injurious affection and severance, $362,000
•Stamp duty of conveyancing costs for acquisition of replacement property, $13,000
•Solatium, $37,500
A total of $412,500 plus interest, costs, etc.
In March 2000 the plaintiff's claim for compensation was amended to be:
•Value of resumed land and injurious affection to the retained land, $492,750
•Residual value of improvements, $11,000
•Consequential losses to 1 February 2000, $71,500
•Solatium, $57,525
A total of $632,775 plus interest and costs, etc.
By this action the plaintiff's claim against the defendant, as now amended, for compensation in accordance with s 241 of the LA Act is as follows:
•Value of resumed land, $13,500
•Severance and injurious affection, $455,000
•Injurious affection and disturbance to duplex building, $5,650
•Injurious affection and disturbance to southern retaining wall, $9,350
•Residual value of improvements on retained land, $11,000
•Stamp duty, conveyancing and LTO fees on a replacement property, $17,270
•Loss of net rent from 3 October 1996 to 30 April 1998, $12,150
•Professional fees and expenses incurred prior to issue of proceedings (claimed as an item of disturbance under s 241(6) of the LA Act), $68,475.25
•Rates, land tax, insurance and maintenance from 1 May 1998, $8,730.66
•Cost of refinancing, $2,314
•Interest paid on loan secured on the land, $16,598
•Bank charges, $3,096
•Solatium at 10 per cent, $62,313
An ascertained total claim of $685,446.91 plus any sums the Court considers just under s 241(6) or s 241(9) of the LA Act, interest on the aggregate of the foregoing, costs and disbursements of this litigation, and any goods and services tax payable by the defendant on the foregoing.
By the defence there is no dispute that the plaintiff is entitled to compensation in respect of the compulsory taking of the 18 square metres of land resumed but the quantum of the claim in that respect is not admitted. It is not admitted that the plaintiff has suffered damage by way of injurious affection or severance in respect of the retained balance of Lot 116, it is denied that the plaintiff has suffered loss or damage in consequence of the public work, and the entitlement of the plaintiff in law or fact to most of the other particularised items of the claim is not admitted. The defendant pleads that on 28 July 1999 an advance payment, the subject of an earlier offer, of compensation of $45,200 plus interest at 6 per cent to that date was made to the plaintiff and that this offer and payment adequately compensates the plaintiff in respect of all compensation recoverable under the LA Act. It is denied that the plaintiff is entitled to any additional compensation or relief.
A critical factual issue, and one which occupied much time during the extended hearing, is the plaintiff's claim that by virtue of the taking of the 18 square metres of resumed land, the 640 square metres of Lot 116 remaining after the resumption has been rendered virtually valueless as, by virtue of its new location on the corner of Newcastle and Loftus Streets, its reduced frontage to Newcastle Street and the design and topography of the public work on the Loftus Street frontage, it is no longer possible to secure approval for vehicular access to Lot 116. This issue is at the heart of the main head of claim of the plaintiff which is for damages for injurious affection and severance.
In the course of closing submissions the plaintiff sought leave to amend its statement of claim, as had been foreshadowed earlier. For the most part the amendments were not controversial and were made by consent. There was objection, though, to the proposed amendments to par 26.5 of the statement of claim by which the plaintiff sought to extend its claim for damage to the existing retaining wall on the Newcastle Street frontage as a consequence of the public work to include also damage to the duplex building. I reserved on the question whether this extension of the scope of the pleading should be allowed. The existing par 26.2(c) had claimed for damage to the duplex building but only by virtue of the construction by the Main Roads Department of Western Australia ("MRWA") of a replacement retaining wall in the area of the truncation. The proposed amendment extended this to damage to the duplex dwelling caused by the whole of the public work. The defendant objected when this amendment was foreshadowed early in the trial, submitting that it had not prepared to defend such a sweeping claim and that there were inadequate particulars to enable it to deal adequately with the claim on the expanded basis proposed. There was some force in this but despite it I have decided to allow the amendment. I do so, in particular, having regard to the way in which the plaintiff sought to support its case on this expanded basis and the manner in which the defendant was able to reorder its cross-examination and defence evidence to deal with it. In the result it appears to me that the defendant has not been seriously disadvantaged and that the desirability of finally resolving all matters in dispute between the parties justifies the defendant bearing the burden of that limited disadvantage.

Statutory provisions and compensation principles

Section 241 of the LA Act makes provision as to the manner in which the amount of compensation is to be ascertained. Relevantly it provides as follows:
"241(1)In determining the amount of compensation (if any) to be offered, paid, or awarded for an interest in land, other than native title rights and interests, taken under part 9, regard is to be had solely to the matters referred to in this section.
(a)…
(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 -
(a)…
(b)…
(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.
(3)…
(4)…
(5)…
(6)Regard is to be had to the loss or damage, if any, sustained by the claimant by reason of -
(a)removal expenses;
(b)disruption and reinstatement of a business;
(c)the halting of building works in progress at the date when the interest is taken and the consequential termination of building contract;
(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 interests; or
(e)any other facts which the acquiring authority or the court 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, 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 per cent of the amount otherwise awarded or offered, unless the court, or, for the purposes of making an offer, the acquiring authority, is satisfied that exceptional circumstances justify a higher amount."
There follow further specific provisions dealing with rents and profits, the payment of interest, advance payments of compensation, the apportionment of rates and taxes and other matters. There is no need to set these at this point of the reasons. Reference will be made to some of them later.
To a substantial degree the provisions of s 241 LA Act recognise and incorporate long established principles with respect to compensation for the compulsory taking of land. The assessment of "the value" of the land resumed for the purposes of s 241(2) involves the application of principles enunciated in Spencer v The Commonwealth (1907) 5 CLR 418 where at 432 Griffiths CJ said:
"In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring 'What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.
At 436-7 Barton J said:
"...a claimant is entitled to have for his land what it is worth to a man of ordinary prudence and foresight, not holding his land for merely speculative purposes, nor, on the other hand, anxious to sell for any compelling or private reason, but willing to sell as a businessman would be to another such person, both of them alike uninfluenced by any consideration of sentiment or need."
At 440-441 Isaacs J drew attention to the date fixed by the statute as the date for valuation and said:
"Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1 January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall or for what reason soever in the amount which one would otherwise be willing to fix as the value of the property."
Isaacs J added at 441-442:
"Having mentally placed itself in the position of the bargaining parties as on the critical date, 1 January 1905, the question for the tribunal is, what is the point at which the parties would meet; what is the sum that one would be willing to give and the other to take? That is practically the same as asking what is the highest sum such a purchaser would give, because we must assume the owner would be willing to take the best he can get. The best he can get in those circumstances is the test of what he loses, and it is his loss which must be replaced. It is not, as it seems to me, proper for this purpose to assume that the owner retains his land unsold indefinitely because such an assumption could only be for the purpose of getting an improved value, arising from more favourable circumstances than those existing in January 1905, which is the very thing forbidden by the statute."
In Turner v Minister of Public Instruction (1956) 95 CLR 245 at 267, Dixon CJ said:
"No doubt at the foundation of the present case lies the criterion of value for which Spencer v The Commonwealth has been so frequently cited. But it by no means follows that the modes of reasoning employed in applying the criterion are matter of law. Indeed Spencer's case itself does not provide the ultimate test of compensation. An observation made in Minister for Public Works v Thistlethwayte [1954] AC 475 shows that it does not. 'It must not be forgotten', said Lord Tucker for the Privy Council, 'that it is the value of the land to the owner that has to be ascertained, and that the willing seller and purchaser is merely a useful and conventional method of arriving at a basic figure to which must be added in appropriate cases further sums for disturbance, severance, special value to the owner and the like'. Further, when the test is applied the reasoning about it must for the most part relate to what the buyer would think and do whose existence and readiness to buy the land at a proper price are imagined: '... the all important fact ... is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted'...."
Dixon CJ continued at 268-269:
"It is, of course, to be valued in cases of compensation with the view to ensuring that the actual value contained in the land is replaced in the hands of the owner by an equivalent amount of money. The value must therefore be the value to the owner which the land possessed to him in its condition at the date of resumption. That value was necessarily affected by all the advantages which the land possessed and these might be a matter of future or even contingent enjoyment. Future advantages or potentialities must not be excluded. At the same time the value of these things must be assessed according to the condition of the land as it stood at the time of resumption: 'it is the present value alone of such advantages that falls to be determined': Cedars Rapids Manufacturing & Power Co v Lacoste [1914] AC 569 at 576. You must not notionally bring what is only potential into actual being and value it as if it existed.
In the case of the land in question no steps had been taken for sub-division. It was necessary to survey it, to prepare plans for sub-division, to obtain the consent of the local authority, to make streets or roads and then to place it upon the market. As the land stood it was incapable of sale in sub-division and it was necessary to make improvements or alterations in its physical condition before the sub-divisional prices could be obtained. In those circumstances it could not be sold in sub-division at the time of resumption. It was not therefore possible to ascribe to the owner possession of the present value of its sub-divisional potentialities on the footing that all you should do is to estimate what he would gain if he sub-divided the land at a future date and reduced the result to its then present value. This means too that the conclusion is clearly right which the learned Judges of the Supreme Court expressed in the passage already quoted from their judgment, viz: '... the only sale that could be considered is a sale of the land as it was at the date of resumption, that is un-subdivided, but having the clear potentiality that it was fit for sub-division'."

Both by the terms of s 241(2) LA Act, and in accordance with principle, any appreciation in the value of the land resumed entirely due to the scheme underlying the acquisition should not be brought into account; Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 at 572. This proposition must be understood in light of the judgment of the Privy Council delivered by Lord Romer in Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302 although that is not material in this case.
The principles enunciated in the passages cited in the preceding pages guide the Court in the task of assessing the compensation. In essence, the task is to assess the value of the land resumed to its owner in its condition at the date for valuation. That value is affected by all the advantages and disadvantages the land then possessed, including future or even contingent advantages, but only the present value of future or contingent advantages is to be included. The accepted method of arriving at a basic figure reflecting that value is the Spencer hypothetical voluntary bargain test as examined in the passages cited. To this basic figure, which is usually referred to as the market value, are to be added, in appropriate cases, further sums for disturbance, severance, what is often referred to as injurious affection, special value to the owner and the like, as well as solatium under the statutory scheme to arrive at the amount of compensation which should be awarded to the claimant owner.
Later in these reasons I will deal more particularly with questions as to the interpretation and application of particular provisions of s 241 LA Act insofar as they relate to particular aspects of the claim advanced for the plaintiff.
As to the process of valuation to be undertaken in this case by the Court it is helpful to be reminded of the words of the Privy Council in Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373 at 391 which were quoted by Issacs J at 442 - 443 of Spencer's case:
"It is quite true that in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which, being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has had his own set of conjectures, of more or less weight according to his experience and personal sagacity. In such an inquiry as the present, relating to subjects abounding with uncertainties and on which there is little experience, there is more than ordinary room for such guess work; and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at."

Access to Lot 116

Because of its significance in this case I will deal immediately with the question of fact concerning the effect of the compulsory taking on vehicular access to Lot 116 following the resumption. As this is posed with respect to the plaintiff's claim for compensation, the issue comes to focus on what view of the access question would be taken by the hypothetical purchaser of the Spencer test as at 1 May 1998, and whether this view would effect the price (and if so what effect) at which the hypothetical buyer and seller would reach agreement at that date for the sale of Lot 116 following the resumption. In essence, it is the plaintiff's case that a hypothetical purchaser would not have made any offer to purchase the unresumed balance of Lot 116 because he or she would have anticipated as at 1 May 1998 that approval would be denied for a crossover/driveway to enable vehicular access to it with the consequence that the land could not be developed.
The parties and all relevant witnesses are agreed that at all relevant times, and in particular as at 1 May 1998, the highest and best use to which Lot 116 could be put was as a site for a commercial office development. All are agreed that two floors of offices with a basement or undercroft floor for vehicular parking was the optimum appropriate development. This was allowed by the zoning of Lot 116 at the time. As will be detailed later the allowed plot ratio would permit a part third office floor to be constructed but a third level of office space involves practical and financial disadvantages. In light of the evidence, and for reasons noted later, I record my finding that two floors of office space with a basement or undercroft floor for vehicular parking was the optimum or highest and best use to which Lot 116 could be put after the resumption on 1 May 1998, as it was the optimum and best use to which Lot 116 could be put before the resumption, and that remains today its highest and best use.
Before Lot 116 could be utilised for such an office development, however, vehicular access to the site would be essential. Whether any vehicular access would be approved by the local government authority, which was the Town of Vincent ("Vincent"), and if access was approved whether that would be from Newcastle or Loftus Streets, are hotly contended factual issues. More specifically the question is what the hypothetical purchaser would have made of these issues as at 1 May 1998. If access were to be approved, its location and nature could also affect the number of car parking bays that could be provided on the land, and the actual cost of an appropriate development, and in each of these ways could also affect the value of Lot 116 following the resumption.
Since 1963 Loftus Street has been designated an Important Regional Road under the Metropolitan Region Scheme ("MRS"). At relevant times it was a category 3 road for this purpose. The public work for which the 18 square metres was resumed involved the duplication of Loftus Street to greatly increase its carrying capacity. As an Important Regional Road Loftus Street was under the authority of MRWA. Newcastle Street was, and is, not designated in any of the categories under the MRS as a road of regional significance. It was under the authority of Vincent. Nevertheless, it is a busy road which carries a significant volume of through traffic, as well as local traffic, although that volume has been diminished since the completion of the Loftus Street duplication and more particularly since the bringing into operation of the Graham Farmer Freeway and tunnel. At relevant times, Newcastle Street comprised four marked traffic lanes, two each way, although in the relevant locality it was not designated a Clearway at any time of the day and street parking was permitted in each of the kerbside lanes away from intersections. As a consequence vehicular traffic was essentially reduced to one lane each way. While it was not designated in any category under the MRS there was, in practice, a tendency by relevant planning and engineering officers of Vincent and others to apply to it, as a matter of convenient practice, the policies and standards which applied to the least significant designated important regional roads under the MRS. As will be seen this practice was neither a requirement of law nor was it universally followed.
In 1976, by Amendment No 135/33 to the MRS, it became clear that the block of land to the west of Lot 116 would be required for the planned duplication of Loftus Street with the consequence that Lot 116 would become a corner lot at the intersection of Loftus and Newcastle Streets. For this purpose that amendment also reserved a truncation, 6 metres by 6 metres, at the southwest corner of Lot 116 for the intersection. The precise dimensions of that truncation were later varied but it is to be noted that for planning purposes, from 1976, Lot 116 was identified as a corner lot with a truncation reservation. That was its position when the plaintiff became the registered owner following the death of his mother in 1979.
In 1995, by Amendment No 959/33 to the MRS, a 2 metre reservation was imposed along the full Newcastle Street frontage of Lot 116, but no further, as part of the Loftus Street duplication works and the truncation reserve at the southwest corner of Lot 116 was varied to provide for a 4.5 metre by 4.5 metre truncation measured from the notional corner point at which the 2 metre reservation setback line and the western boundary of Lot 116 intersected.
Until 1 July 1994 the City of Perth had been the local government authority in respect of Lot 116. On that date Vincent was formed. As an interim measure Vincent applied the City of Perth Planning Scheme No 1 as its planning scheme and this remained in force until November 1998 when Vincent's own planning scheme ("Vincent TPS") came into force. Vincent's own scheme was in published draft form on 1 May 1998 but was not in force.
There is no need to set out in these reasons any detailed analysis of the legislation pursuant to which the MRS was originally promulgated and has since been maintained, amended and managed, or of the various statutory authorities which from time to time, have had various roles in these activities. For simplicity, but with inaccuracy, I will refer only to the Western Australian Planning Commission ("the WAPC") as administering the MRS.
At all relevant times from 1 July 1994 Vincent exercised delegated authority from the WAPC to approve development applications under the MRS for certain purposes. It also had its own powers to grant approvals under its planning schemes. The terms of the delegated authority from the WAPC for MRS purposes required Vincent, in the case of land on or abutting a category 3 road under the MRS, to refer a development application in respect of that land to the referral agency for comment and recommendation before determining the application. Referral was not required if Vincent refused the application. Relevantly, the referral agencies were MRWA or the Ministry for Planning ("MfP") which acted on behalf of WAPC. The views of MRWA and MfP were not binding on Vincent under the delegated authority but in practice were obviously matters to be taken into account by Vincent. Where any recommendations made by MRWA or MfP were acceptable to Vincent it was authorised to act accordingly as the deciding authority both for MRS purposes and under its own planning schemes. Where, however, a recommendation of MRWA or MfP was "not acceptable to" Vincent for MRS purposes, under the instrument of delegation from WAPC the application was to be forwarded by Vincent to the WAPC "for determination". It is to be noted that MfP provided expert advice to the WAPC and provided its administrative support. Officers of the Transport Planning Branch of MfP routinely dealt with development applications involving vehicle crossovers/driveways which were referred by local government authorities including Vincent and provided the comments and recommendations to the local government authority. Where an application came to be referred to the WAPC the same officers reported with recommendations to the WAPC when it came to consider and determine the application. It is to be noted that there are statutory avenues of appeal both for the purposes of the MRS and Vincent's planning schemes if a development application involving a crossover/driveway is refused. A formal application, independently of a development application, could also be made to Vincent for the approval of a crossway/driveway. This too was subject to appeal rights. It is unnecessary for present purposes to consider this in detail.
For present purposes it is sufficient, though strictly incomplete and inaccurate, to say that the WAPC performed the function of reserving lands under the MRS which might be required in the future for Important Regional Roads, whether new roads or modifications to existing roads, so that further development would not occur on those lands. When the time came for the detailed planning of such new roads or modifications to existing roads, including detailed design and construction, MRWA assumed responsibility from the WAPC. Quite often at the detailed design and construction stage it was found that less land was required than had been reserved by WAPC. Only land actually required was acquired or taken compulsorily and in due course the reservation on any land not required was lifted. Before the detailed design and construction stage the MfP, acting for the WAPC, was the relevant authority to which development applications and other applications concerning crossovers/driveways were referred under the WAPC delegated authority, and thereafter it was MRWA. The detailed design and construction stage is not precisely defined and in the present case it extended at least from early 1997 until construction was completed early in 2000. In practice, at all relevant times from early 1997, both MRWA and MfP were involved in the consideration of development applications and other enquiries involving a crossover/driveway for Lot 116.
In 1983 the plaintiff had applied to the City of Perth for development approval under its Town Planning Scheme and the MRS for a two storey office building with basement or undercroft parking on Lot 116. Plans accompanied the application. These provided for a two way vehicular crossover/driveway from Newcastle Street approximately in the centre of Lot 116 running directly into the undercroft parking area with 18 car bays ranged on each side of the central access way. In January 1984 this was approved, subject to conditions that all development including the driveway crossover be set back from the truncation road-widening requirements and that the crossover/driveway be a minimum of five metres wide to allow for two-way traffic movement on to and off Newcastle Street. Although the application and plans omitted any reference to the truncation reservation, the approval, as clarified by the letter of the City of Perth dated 3 February 1984, confirmed that Lot 116 was affected at that time by the 6 metre truncation reservation on the proposed corner of Loftus and Newcastle Streets and it is clear that both the City of Perth and the then Metropolitan Region Planning Authority, which dealt with the application (at that stage it also involved rezoning from residential to commercial usage under the MRS) were well conscious of the truncation for the proposed corner. The plaintiff did not proceed with this development at that time and the approval lapsed after two years.
The plaintiff was advised by letter, with an enclosed plan, from the MfP on 18 November 1994 of proposed changes which came to be made in 1995 by Amendment No 959/33 to the MRS (as noted earlier). He took no action at that time. His next relevant action was in September and October 1996. He then spoke to and wrote to the MfP raising issues concerning Lot 116 including the question of vehicular access. For this purpose he resubmitted the plans for the office development which had been the subject of the 1984 approval. On 14 October 1996 the Manager, Transport Planning Branch of the MfP replied. Mr White, who gave evidence before me, was the author of that and other letters which followed. I am satisfied from the evidence that Mr White routinely dealt with requests of this nature. Mr White noted that on the submitted plans, which still provided for a central vehicular access from Newcastle Street, the crossover/driveway would be only 3 metres from the corner truncation. The letter continued:
"Main Roads' Interim Policy Manual for Driveways in Urban Areas requires a minimum separation of 25 metres from the driveway to the corner truncation at a signalised intersection. The proposed crossover is therefore substandard and would not be acceptable.
Land fronting Loftus Street between Kingston Avenue and the rear of your property is owned by the Western Australian Planning Commission. It would be preferable, in terms of access arrangements, for the strip of land between Newcastle Street and Kingston Avenue (including your property) to be redeveloped with access to Kingston Avenue. This could be either as an overall development or separate development of your property with shared access over the Commission's land. This option should be investigated before direct access to Newcastle Street is considered."
The letter dealt with plans for a crossover/driveway centrally located on Lot 116. While reference was made to an Interim Policy Manual of MRWA which stipulated a 25 metre separation from a driveway to the corner truncation and gave that as a reason for regarding the proposed central access as unacceptable, it did not rule out any access from Newcastle Street to Lot 116. As the letter indicated, an option of gaining access across other WAPC land from Kingston Avenue at the rear of Lot 116 "would be preferable" and "should be investigated before direct access to Newcastle Street is considered" (emphasis added).
I am satisfied from Mr White's evidence that while the plaintiff's telephone conversations and letters in September and October 1996 were not a formal development application, Mr White understood them to be a pre-cursor to a formal application and he treated them as such.
Following a query from the plaintiff Mr White wrote again on 29 October 1996 advising the plaintiff:
"As stated in our letter of 14 October 1996 the proposed access onto Newcastle Street as shown on the plan in your letter of 2 October 1996 would be too close to the intersection with Loftus Street and would not be acceptable.
We suggest that you contact the Properties Section of the Ministry for Planning to discuss the possibility of gaining access across land owned by the Western Australian Planning Commission between your property and Kingston Avenue. Unless this option is investigated and found to be unworkable we would not be prepared to consider compromising road safety standards by approving access from your property onto Newcastle Street."
It is contended for the plaintiff that these two letters reveal that it was the view of the MfP in October 1996 that vehicular crossover access from Newcastle Street to Lot 116 was substandard and would not be approved because it failed to comply with the MRWA Interim Policy and because it compromised road safety standards.
I am satisfied this is not the effect of the letters and it was not the view then held by Mr White and the MfP. Nor is it their present view. As each letter made clear on a fair reading, access from Newcastle Street to Lot 116 was not ruled out. Each letter urged investigation of what the MfP saw to be a preferable means of access, ie across WAPC land at the rear of Lot 116 from Kingston Avenue which runs parallel to Newcastle Street. The clear effect of the concluding passage of the second letter was that if the alternative of access from Kingston Avenue was unworkable the MfP would be prepared to consider compromising road safety standards by approving access from Newcastle Street to Lot 116. The evidence satisfies me that this was the intended meaning and that it reflected the view then (and now) held by the MfP. This view was held, in my finding, notwithstanding the MRWA interim policy to which Mr White had referred. I am satisfied that then and now this was regarded as merely a policy and, particularly in developed areas where existing conditions precluded adherence to its requirements, it was adapted or ignored and the safest and most practical solution which could be achieved was usually adopted.
Kingston Avenue ran parallel to Newcastle Street. Several lots to the north of Lot 116, which had previously fronted Loftus Street, had been partly resumed for the public work. The WAPC had purchased the balance of these lots and contemplated amalgamating them for a residential unit development having access from Kingston Avenue. Access to Loftus Street was to be avoided because it had become a very busy Important Regional Road. For this same reason intersections with Loftus Street were kept to a minimum and to this end Kingston Avenue was closed off so that access from it to Loftus Street was no longer possible. Where there were intersections, as with Newcastle Street, these were to be controlled by traffic signals.

I accept from the evidence that following his letter to the plaintiff Mr White referred the file to the Property Section of the MfP for consideration of the question of access from Kingston Avenue to the rear of Lot 116. This proved to be not acceptable to the Property Section as a right of way to Lot 116 would not have left a sufficient width of land to allow for the proposed unit residential development. I also note that the plaintiff was not informed of this.
I also accept from his evidence that Mr White did not give consideration in October 1996 to the possibility of access to Lot 116 from Loftus Street as, then and now, he regarded access from Newcastle Street to be preferable from the point of view of road safety to access from Loftus Street. Loftus Street was an Important Regional Road and Newcastle Street was a side road. I accept that for sound reasons of road safety Mr White, then and now, held the view that he would not consider access to Lot 116 from Loftus Street unless access from Newcastle Street was not possible.
I would mention at this point some further matters concerning access to Lot 116 from Loftus Street to avoid the need to return to them later in these reasons. Some attention was given in the evidence to the possibility of vehicular access to Lot 116 from Loftus Street with egress to Newcastle Street and also to both access to and egress from Lot 116 from and to Loftus Street. In my finding each of these is less desirable from a road safety viewpoint than access to and from Newcastle Street in the vicinity of the eastern boundary of Lot 116, because of the hazard presented to the heavy traffic flow in Loftus Street of a vehicle slowing and turning to gain entry to Lot 116 and of exiting vehicles entering the traffic flow of Loftus Street from Lot 116.
Further, the design of the Loftus Street duplication in this vicinity includes a combined cycleway and footpath on the verge between the roadway and Lot 116. This provides an added hazard if there was to be vehicular access from Loftus Street to Lot 116 or egress to Loftus Street. Further, the topography of the verge between Loftus Street and Lot 116 would make vehicular access difficult to construct, especially because of height differences and the need to traverse the cycleway and footpath. Because of these reasons, I have not further explored in any detail the question of vehicular access from Loftus Street to Lot 116, whether two way access or entry from Loftus Street with egress to Newcastle Street. It would, however, remain a possibility if access from Newcastle Street were not possible.
In August 1997 the plaintiff sought from Vincent approval for a two way vehicular crossover from Newcastle Street to Lot 116, or alternatively from Loftus Street. He did this by letter. It was not a formal developmental application. With this request the plaintiff enclosed three alternative plans for an office development on Lot 116. These provided for two way access at the eastern end of the Newcastle Street frontage, or alternatively at the rear of Lot 116 on the Loftus Street frontage with the third alternative being entry from Loftus Street and exit to Newcastle Street. Once again the plans failed to depict the truncation reservation. Nor did they show the two metre frontage reservation to Newcastle Street. In my finding, however, Vincent had full knowledge of these reservations and took them into account. On 22 September 1997 the appropriate manager of Vincent replied. His reply dealt with the primary application which was for two way access from Newcastle Street. It was in the following terms:
"Thank you for your letter dated 2 September 1997 regarding the approval of a crossover at the above location.
Subject to approval from Main Roads Western Australia (MRWA) and the Ministry of Planning, Council will approve the construction of a crossover under the following conditions.
•The crossover is to be located no less than 12 metres from the intersection of the western boundary.
•The movement of traffic leaving the property is to be left turn only.
•The existing median island is to be extended to prevent any right turn movement from the property at the applicant's expense."
This constituted, in my finding, an unequivocal indication of the attitude of Vincent at that time and of the decision it would make, subject to MRWA and MfP also approving, were there to be a formal development application made. It is properly described in the evidence in my view as an approval in principle. Vincent informed the plaintiff that it would approve the construction of a crossover subject to three conditions. The first required the crossover to be no less than 12 metres from the intersection of the western boundary of Lot 116. There was an attempt in evidence and submissions for the plaintiff to say this was uncertain and unclear as it appeared to ignore the existence of the truncation. I find the letter to be entirely clear in its meaning in this respect, a view which is further confirmed by later events. It refers to 12 metres from the western boundary, not to the truncation. At that point of time there had not been any resumption; the truncation was merely the subject of a reservation. The stipulated 12 metres from the western boundary left 5.96 metres to the eastern boundary in which to construct a crossover. The precise location in that 5.96 metres and the width of the crossover would, in the ordinary course, be the subject of detailed proposals in a formal development application and would be the subject of precise decision and approval at that stage. It is to be noted that the relevant plan informally submitted at that time by the plaintiff as the basis for his enquiry was for a two storey office development with 18 car bays in a basement parking area. It is clear from the terms and the evident purpose of each of the three conditions, as it is from the general body of evidence, and it is my finding, that Vincent was then well aware of the planned corner location of Lot 116 and of traffic safety issues relating to a two way crossover access from Newcastle Street to Lot 116 in the position stipulated by Vincent. The other two conditions stipulated by Vincent, left turn only on exit and the extension of the existing median island to ensure this, are, on the evidence, essential to ensuring the safest possible use of a crossover in this position and the 12 metre stipulation assured that an adequate width crossover which allowed for two vehicles to pass each other would be located at a position as far from the Loftus Street corner as practicable, ie adjacent to the eastern boundary of Lot 116.
While the conditions stipulated that the owner of Lot 116 should meet the cost of extending the median strip this was in fact overtaken by the detailed design by MRWA of the intersection, which design was produced shortly after the Vincent letter. The MRWA design provided for a median strip to be constructed by MRWA which more than satisfied this requirement. That was the MRWA design as at 1 May 1998. The median strip has since been constructed by MRWA in association with the duplication of Loftus Street. With the completion of these works there could only be left turn movement by vehicles exiting from Lot 116 to Newcastle Street were there to be a crossover at the eastern end of the frontage of Lot 116 to Newcastle Street.
Having received this letter from Vincent, because of its terms which conditioned the approval of Vincent on the approval of MRWA and MfP, the plaintiff immediately sought the approval of both MRWA and MfP. The plans and a copy of Vincent's letter of 22 September 1997 were enclosed with letters sent to both MRWA and MfP by the plaintiff.
The project manager land management MRWA, Mr Elphick, received this request. He sent the relevant papers which included a copy of Vincent's letter of 22 September 1997 and the plaintiff's plans by facsimile to Mr Symcox of the Traffic Sector Management Branch MRWA, who was the officer responsible inter alia for all crossover safety issues in MRWA. With his reply to Mr Elphick, Mr Symcox attached a copy of the general requirement of MRWA for driveway access near traffic signals and commented:
"However as this requirement clearly cannot be achieved, it is recommended that the driveway be located the furthest point possible away from the intersection, due to the higher increased possibility of rear end crashes, as vehicles slow to enter the driveway.
Therefore the preferred driveway position is adjacent to the eastern boundary."
The plaintiff was accordingly advised by letter from MRWA dated 21 October 1997:
"Main Roads would have no objection to the crossover proposed, provided it is located adjacent to the eastern boundary of the property (Lot Pt 116) in Newcastle Street, and meets with the requirements of the Town of Vincent and the Ministry for Planning."
Within a few days the plaintiff had sent two further letters to MRWA seeking confirmation about detailed design issues concerning the crossover. He raised, first, a need for the crossover to be put one metre from the eastern boundary to clear a structural pier of the proposed office building and a retaining wall down the eastern boundary, and then, secondly, a SECWA light pole which was located 900 mm from the eastern boundary. MRWA replied to both letters, in essence advising that the exact details with regard to the location of the driveway could be finalised when the plaintiff made a formal development application.
The MfP also replied to the plaintiff's request for approval in October 1997 saying:
"The Ministry is prepared to support the proposed crossover subject to:
(i)location of the crossover at maximum distance from the 4.5m x 4.5m corner truncation requirement for Loftus Street Important Regional Road reservation (in the Metropolitan Region Scheme), which affects Lot Pt 116 at the western property boundary,
(ii)the satisfaction of the Town of Vincent and in accordance with their engineering standards and requirements."
Copies of the MfP and MRWA responses were provided to Vincent.
The plaintiff replied to MfP on 27 October 1997 saying:
"Thank you for your letter dated 22 October 1997 granting approval for a 5 metre wide crossover to the 18 car bay parking area in the proposed two story office development on the above site.
(i)The truncation to the western boundary is 7.2m x 7.2m (see attached diagram) not 4.5m x 4.5m as in your letter.
A State Energy Commission light pole is 900mm in on the eastern boundary allowing 1.25m clearance for safety purposes. This would place the crossover 3.71m from the corner of the truncation. Trusting this meets with your Department's approval.
(ii)Your letter dated 18 November 1994 advised me that a 2 m wide resumption was required to Newcastle Street.
Would you please advise me if this is still current."
In the MfP's reply of 31 October 1997 prepared by Mr White it was pointed out that the reference to the 4.5m x 4.5m truncation was correct, the plaintiff had been referring to a MRWA works drawing. It was also confirmed that the 2 metre reservation remained, it being an area that "may be required for road widening in the future and will be protected from development …". The letter went on to say:
"The location of the proposed crossover has been specified (in the Town of Vincent's letter of 22 September 1997) as not less than 12 metres from the western boundary of Pt Lot 116. Due to proximity of the Loftus Street intersection it is not considered acceptable to further reduce the separation just because a power pole is in the way. Any proposed development should make allowance to have the power pole relocated so that the location of the proposed crossover is not further compromised. It should be noted that the dimension of 12 metres is already a substantial compromise on Main Roads recommended distance of 25 metres at a signalised intersection (refer Main Road's Interim Policy Manual for Driveways in Urban Areas, March 1987)."
The letter went on to note that it would be preferable for the proposed crossover to be combined with the existing crossover serving the adjoining Lot 117, subject to agreement with the owners of Lot 117, which would "help to minimise the number of crossovers on Newcastle Street". Mr White in his evidence explained that in accordance with an existing policy a shared crossover with a driveway straddling the boundary of both properties would be preferable in this location. Lot 117 has a crossover/driveway on the common boundary with Lot 116. In such cases an agreement between the owners is usually protected by easements registered on the titles. That preferred solution appears never to have been pursued further by the plaintiff even though it would allow a wider crossover/driveway, further from the intersection. It would also have advantages for the adjoining property and this was the position on 1 May 1998. It remains an attractive alternative possibility. The adjoining property is owned by the Health Department and is used as a small day clinic or out-patients hospital.
Following this correspondence the plaintiff had taken no further action by 1 May 1998 to formally secure development approval for an office development on Lot 116 or for a crossover/driveway as had been approved in principle by the three relevant authorities the correspondence set out above. Neither has he done so since that date. Nothing was said or done by Vincent, MRWA or MfP between that correspondence in September and October 1997 and 1 May 1998 to suggest there had been, or that there was, a possibility of any change of view by any one of those authorities concerning the proposed crossover/driveway. Notwithstanding a body of evidence concerning matters subsequent to 1 May 1998, the evidence in this case, in my finding, discloses nothing to indicate that any one of those three authorities had changed its position, was contemplating changing its position, or had reason to change its position at any stage between the correspondence in September and October 1997 and 1 May 1998, or indeed thereafter until events in 1999.
In my finding, the September and October 1997 correspondence revealed that Vincent, MRWA and MfP, the three relevant authorities, would each approve a two-way crossover located no less than 12 metres from the western boundary of Lot 116, ie within the remaining 5.96 metres of the Newcastle Street frontage of Lot 116 to serve a two storey office development on Lot 116 which development provided for up to 18 car bays in a basement parking area. In my finding, this remained the position as at 1 May 1998 notwithstanding the resumption and for a considerable period thereafter. I am also satisfied on the evidence that in September and October 1997 all three of the authorities were well aware that Lot 116 would be the corner lot by virtue of the duplication of Loftus Street, that the intersection would be controlled by traffic signals, and that the new road layout on the corner would require a truncation of the southwest corner of Lot 116, although in September and October 1997 the precise dimensions of that truncation were still subject to final detailed design. The finalisation of the detailed design did not in my finding introduce any reason for any of these authorities to revoke the decision in principle to approve a crossover/driveway for Lot 116. The three authorities were also well aware of the two metre reservation on the Newcastle Street frontage that might be required for future road widening. It is also my finding that each of these three authorities was also aware of the standard policy requirements for crossover/driveway access near traffic signals and that they would be compromised, with or without the resumption, by a crossover located within 5.96 metres of the eastern boundary of the Newcastle Street frontage of Lot 116, but that each of them was prepared to approve a crossover/driveway notwithstanding this. Despite the vigorous contrary submissions of the plaintiff, in my finding, that is not surprising or unusual. The policy requirements, like the requirements of various national standards which will be mentioned later, were statements of what was desirable in the interests of road safety and of uniformity, but they were not binding legal requirements and, in particular, in established areas such as the present case, where the requirements could not be met, it was usual practice in my finding to adopt a solution which was the most satisfactory that could be achieved. In my finding, the September and October 1997 correspondence of the three authorities discloses that that this was the course then being followed by each of the three authorities and this had not changed as at 1 May 1998.
It is also my finding that had there been an enquiry by an intending purchaser of Lot 116 on or about 1 May 1998 of these three authorities, the intending purchaser would in each case have been shown the relevant September and October 1997 correspondence quoted above and advised that the authority's position remained as indicated in that correspondence, or the intending purchaser would have been given the same essential information in fresh letters, subject in each case to the development since September/October 1997 that the requirement to provide a median strip in Newcastle Street at the expense of the owner of Lot 116 had been superseded by the detailed design of the Loftus and Newcastle Streets intersection by MRWA.
It is also my finding that, had the plaintiff made a formal development application for an office development on Lot 116, or had a purchaser or an intending purchaser made such an application, on or before 1 May 1998, or later in 1998, a crossover/driveway in that 5.96 metres at the eastern end of the Newcastle Street frontage of Lot 116 would have been formally approved by each of the three authorities, notwithstanding that such a crossover may not have complied with existing policies and national standards in some respect or other. In my finding, the precise width and position of the crossover/driveway, within that 5.96 metres, would have been determined as part of the development application and in light of the design details of the proposed office development and the views expressed by MRWA and MfP in the correspondence quoted. I accept from the evidence that a two way crossover/driveway would have been required, ie one wide enough for two vehicles to pass. I also find that a crossover/driveway within the 5.96 metres would have been approved notwithstanding any turnout requirement which will be mentioned later. I further find that such formal approvals would have been conditioned to require exiting traffic from Lot 116 to turn left into Newcastle Street. In this respect the development of the design of the MRWA works before 1 May 1998 for the intersection, including the provision of a median strip in Newcastle Street, would as a matter of probability have obviated a formal condition being imposed requiring the provision of a median strip at the expense of the owner of Lot 116 in respect of an application made at about that time, or indeed at any time thereafter. The construction of such a crossover/driveway would no doubt have required the repositioning of the SECWA pole mentioned in the correspondence, at the owner's expense. That would have been so until late 1999 by which time the progress of the Loftus Street duplication works would have obviated this as the public work involved conversion to underground power lines and the removal of that pole. The evidence does not enable me to make a finding as to the cost of repositioning the pole.
While the September and October 1997 correspondence of the three authorities considered above was in the context of a two storey office development with basement parking for up to 18 cars, and while that is the type of development which all parties and the relevant witnesses agree is the highest and best use for Lot 116, in case it is not clear, I would add that approval for a crossover/driveway to provide vehicular access to Lot 116 would not in my finding have been limited to such a development whether before or after the resumption. The position taken by each of the three authorities in September and October 1997 in giving approval in principle to a crossover/driveway was not, on the evidence, indicative of a view by any one of the authorities that approval would be limited to a development of that nature. Leaving aside use and planning issues, formal approval could have been equally anticipated for a variety of other forms of development although the nature of the development may well have affected the precise requirements stipulated, ie a crossover width of only three metres may have been adequate for a residential development. There is no reason, however, to explore those possibilities further in this case.

In making these findings I have considered, but rejected, much that was submitted for the plaintiff. In particular, while I accept that the correspondence of the three authorities of September and October 1997 was not binding on the authorities, as they were merely in response to informal enquiries by the plaintiff, I accept from the evidence that this is a convenient and not unusual way in which owners and intending developers explore the attitude of authorities to a contemplated development, and that the approach by the plaintiff was viewed in this light and treated accordingly by the authorities. I also accept that in these circumstances the authorities will usually adhere to such approvals in principle even though given informally. In this particular case, I am satisfied that the evidence reveals there was no reason for any one of the three authorities to change its position by 1 May 1998 (save for the median strip requirement) and it is my finding that this would not have occurred. As indicated I am also very conscious, as will be mentioned in greater detail later, that a crossover/driveway in this position would not meet some applicable policy and national standard requirements, but for reasons indicated above and as further discussed later in these reasons, I am satisfied that this is not a reason why a crossover/driveway in this location would not have been approved had formal application been made.
The plaintiff also sought to make much of some of the views expressed in the 1996 MfP letters quoted earlier. I have already sufficiently indicated my reasons for not accepting that those letters conveyed, or were intended to convey, much that the plaintiff submits about them. I do accept that Mr White for the MfP was trying to achieve an alternative to access by crossover from Newcastle Street to Lot 116, but in my finding his letters did not, and were not intended to, rule out eventual approval of such access if the alternatives could not be achieved. Further, and importantly, whatever may have been made of the 1996 letters, they had been overtaken and displaced in my finding by the 1997 letters which approved in principle two-way access to Lot 116 by crossover/driveway from Newcastle Street. Should it matter, I do not see the two as inconsistent as the 1997 letters convey a development from the 1996 position of MfP. I am satisfied, despite some expressions of view in evidence and submissions to the contrary, that an intending hypothetical purchaser of the type relevant to the Spencer test, would see no reason to be concerned with what was said by MfP in the 1996 letters in view of the contents of the October 1997 letters of MfP.
I would only add, in view of some evidence and submissions, that I see no reason in the evidence to conclude that the 1997 decisions of Vincent, MRWA or MfP were other than genuine and honest decisions for routine and sound reasons. There is nothing, in my finding, to support the view advanced by the plaintiff and Mr McMahon, that they were contrived decisions to get MRWA out of a difficult compensation position over the plaintiff's land.
I am also aware that these approvals in principle were determined by officers. In each case this was within the normal authority of the officers and the evidence does not provide reason in my finding to conclude there was any reasonable probability of a different position being taken by the Council of Vincent or WAPC or by any more senior MRWA officer. In this respect, at least in the case of Vincent, a formal application may have gone to Council because of the non-compliance with existing policies or standards but, for reasons discussed later, in September and October 1997 and until well after 1 May 1998 there is no reason to conclude that the Council would have made any different decision.
In February 1999, ie over nine months after the valuation date of 1 May 1998, an architect, Mr Oakley, who had been retained that month by MRWA to advise on the development potential of Lot 116, as that was seen to be an issue relevant to compensation issues, contacted the Manager, Engineering Design Services, of Vincent, a Mr Wilson, by fax and telephone. As Mr Oakley's fax reveals, he had gathered that the MRWA approval in principle for the crossover as notified by its letter of 21 October 1997 had been based on a false assumption that Lot 116 was zoned residential and not commercial. Mr Oakley was attempting, therefore, to determine whether the MRWA decision would have been different if use of the site was to be for commercial purposes. The only evidence which I have found as to the basis for this understanding would attribute it to a comment of Mr Symcox made to Mr Oakley. I am satisfied, however, that the view of Mr Symcox and the decision of MRWA based on it in October 1997, like the decisions of both Vincent and MfP at the time, were made on the basis of the plans provided by the plaintiff to each of those authorities, which were for a two storey commercial office development with basement parking for some 18 cars. The plaintiff's plans were provided to Mr Symcox when he considered the matter in 1997. Lot 116 was then zoned commercial under both the Vincent and MRS planning schemes. Further, there is nothing to indicate that zoning was an issue in the MRWA decision. The decision of MRWA, in my finding, had been made on the basis of the proposed commercial office development.
The nature of Mr Oakley's February 1999 enquiry, coupled with the unrelated circumstance that since 1 May 1998 there had been a change of the relevant appointee at Vincent, seems to have led to some reconsideration by Vincent of its position. However, on 17 March 1999 Vincent replied to Mr Oakley stating (no doubt out of caution) that it was Vincent's view that if safety of access is in question that was of MRWA's making. The letter went on to say:
"However, we wouldn't deny/refuse an access if a development application were lodged for the property. We would, however, condition an approval accordingly."
In the course of discussions between the Vincent officer and Mr Oakley that preceded this letter, the officer had foreshadowed that Vincent might reconsider its 1997 decision that the crossover should be no less than 12 metres from the western boundary. In the letter of 17 March 1999 Vincent went on to indicate that a likely detailed design condition would be to provide for a 7.5 metre crossover. This would involve, of course, a reduction of the 12 metres which it had stipulated in 1997. The letter further indicated that likely detailed design conditions were for the access to be located adjacent to the eastern boundary and that vehicles be able to turn around within the property so as to exit in forward gear, a condition that had been inherent in the plaintiff's plans submitted in 1997 but which was now made express as a likely condition. Vincent also indicated that a likely condition was that the existing retaining wall, ie the owner's brick frontage retaining wall, be removed or modified to provide maximum sight distances.
From this letter, in my finding, it is clear that despite reconsideration by a new official at Vincent, the position was maintained that a crossover/driveway to Lot 116 would be approved if a formal development application were lodged, and that this would be approved despite safety issues. The crossover would continue to be at the eastern end of the Newcastle Street frontage of Lot 116 and would allow for both entry and exit. As before, access would be limited to both left in and left out by a median strip in Newcastle Street, although by this time Vincent accepted that the MRWA intersection design would provide for this. The modification of its position to provide for a likely condition of a crossover/driveway width of 7.5 metres involved a balancing of competing issues. As indicated in the letter a wider width would allow greater ease of entry, and therefore speedier entry, from Newcastle Street. Necessarily, this involved a lessening of the distance between the crossover and the intersection. There is no question that this did not comply with the requirements of existing policies and national standards in some respects. Despite some evidence and submissions for the plaintiff, obviously that was not seen as precluding the approval of a crossover/driveway on the conditions foreshadowed in the letter. Likewise the likely condition that the access be located adjacent to the eastern boundary would necessarily preclude any turnout for the crossover being accommodated within the prolongation of the boundary to the roadway (a matter to be discussed later). Once again, that was not seen to be an issue which precluded the approval of a driveway/crossover adjacent to the eastern boundary. Precise conditions could not be finalised, of course, until an actual development was put forward for formal approval.
Of the matters foreshadowed as likely conditions in this letter the one of potential significance for development purposes was the likely requirement to modify or remove the frontage retaining wall. Obviously, this would be influenced by the design of a proposed development but removal could involve additional site excavation and so could affect development costs. As will be discussed later the plaintiff's design in 1983 and the 1997 plans submitted to the three authorities, although the subject of some differences in evidence, appears to have involved the removal of the retaining wall and at least some site excavation. That is also the position with the two designs prepared in 1999 and 2000 by Mr Oakley and Mr Adam for the respective parties which are before me in evidence. Some excavation of the Newcastle Street frontage and of the rest of the site appears to be a logical feature of any two storey office development with basement parking on Lot 116. But more of that later in these reasons.
Even had the 17 March 1999 letter of Vincent been available on or before 1 May 1998 I am satisfied that a hypothetical purchaser of the Spencer type would have accepted from it that satisfactory two way vehicular access would be approved by Vincent at the eastern end of the Newcastle frontage of Lot 116. Obviously, a hypothetical purchaser would be conscious that, as before, this was not a formal decision legally binding on Vincent and would be aware that the precise conditions attached to any formal development approval would, in part, depend on the precise detailed design of the proposed development. Nevertheless, in my finding, a hypothetical purchaser on or before 1 May 1998, who had such an indication of Vincent's position, would be satisfied that formal approval would be obtained and that the conditions attaching to that approval would not differ from those which the letter indicated were likely to be imposed in ways which would significantly adversely affect a two storey commercial office development with undercroft parking. In my finding, had this advice of Vincent of 17 March 1999 been available to a hypothetical purchaser on or before 1 May 1998, the purchaser would not have anticipated that the indicated likely detailed conditions would be productive of any difficulty or change of mind by MRWA or MfP. Indeed, from the evidence I am satisfied that had these more detailed conditions been put forward in October 1997, or at any time between then and 17 March 1999, their general sense could have been acceptable to and approved in principle by both MRWA and MfP. The precise width of the crossover may have led to an exchange of views between MRWA, MfP and Vincent, not so as to lead to a refusal to approve a crossover but because it was clearly a question of finding an appropriate compromise between two competing considerations, and different appreciations of the most appropriate point of compromise might well have been offered. It is entirely hypothetical what might have happened, but what can be gleaned of the approach of the three authorities on or before 1 May 1998, and indeed into 1999, even when viewed in light of the competing views of the traffic engineering experts who have given evidence before me, leaves me quite satisfied that the probabilities clearly were that all three authorities would have quickly settled on an agreed width for a crossover/driveway adjacent to the eastern boundary of Lot 116. That agreed width would have been a figure between 5.0 metres and 7.5 metres and would have satisfied the needs of a hypothetical purchaser contemplating a commercial two storey office development with basement parking on Lot 116. I am satisfied that had this March 1999 letter of Vincent or its effect been available on or before 1 May 1998 and a cautious hypothetical purchaser had put that view to MRWA and MfP, each would have responded to the hypothetical purchaser in accordance with the views just outlined. The effect of this, in my finding, would have been to satisfy the hypothetical purchaser that a suitable crossover/driveway for a development of the type identified would be approved on formal application.
The advice of Vincent of 17 March 1999 was not available, of course, before that date. It was the product of the detailed enquiries and specific issues raised by Mr Oakley in February 1999. In my finding, there is no reason, in the evidence, to conclude that the more detailed views expressed by Vincent in March 1999 would have been formed or expressed by Vincent on or before 1 May 1998 had the hypothetical intending purchaser made normal enquiries about crossover access to Lot 116, in particular access for a proposed commercial two storey office development with basement parking. In my finding, the response to such an enquiry at that time would have been as indicated earlier in these reasons. The differences, however, are not fundamental. Excavation by virtue of removal of the retaining wall with a view to maximising sight distance being the only change of any significance to a hypothetical purchaser contemplating an office development of the type identified.
The question of vehicular access to Lot 116 did not stop even at March 1999. By then the plaintiff was pursuing the view in his negotiations as to resumption and compensation that vehicular access to the unresumed balance of Lot 116 could not and should not be approved for safety reasons. The plaintiff was strongly agitating the view that by virtue of this the retained balance of Lot 116 after the resumption had lost all its value as it could not be developed and that, as a consequence, it should be resumed or purchased by MRWA. The pursuit of this position led the plaintiff in June 1999 to instruct a firm of traffic engineering consultants ("BSD"), and in particular Mr Bordbar of that firm, to prepare a report on the road, traffic and safety aspects. This report, dated 10 September 1999 concluded inter alia:
"The proposed development and the associated crossover on the eastern boundary of Lot 116 Newcastle Street can not be supported on traffic safety grounds. As such, an alternative use for this property should be considered."
The proposed development considered in the report was a commercial two storey office block with basement parking. It was a design that had been prepared by Mr Oakley after his discussions with Vincent earlier that year.
Mr McMahon, who was advising the plaintiff on compensation and negotiating on his behalf, had written to Vincent in June 1999 expressing concern at the safety of any crossover to Lot 116 and asking the Council to consider the matter. A copy of the BSD report was provided to Vincent when it became available.
It then appears that in April 2000 MRWA officers met with Vincent officers and discussed the access issue. While alternatives were considered access off Newcastle Street was the primary focus. This was followed by the plaintiff and Mr McMahon meeting with Vincent officers to stress to them the viewpoint that safety standards precluded the approval of access to Lot 116. The issue of access to Lot 116 was placed on the agenda for a meeting of the Council of Vincent on 23 May 2000. There was no development application from the plaintiff although Vincent had been provided by MRWA with the theoretical development concept prepared by Mr Oakley which was, of course, for a two storey office block with undercroft parking for some 18 cars. The report to the Council by officers of Vincent raised as a moot point whether Council might decide whether or not to approve access. This was posed for the reason that this "issue is a pivotal point in the negotiations", they being the negotiations between the plaintiff and MRWA which the report noted as being with regard to the purchase of the whole of Lot 116 by MRWA. The report went on that if "As Mr Cerini contends, Council cannot approve a vehicle access for safety reasons, then MRWA would be obliged to purchase the whole property".
Because of the controversy that had been generated by this activity, legal advice was obtained by Vincent in May 2000 and this was provided to the meeting of the Council of Vincent held on 23 May 2000. The advice was provided in two letters. In the first the Council's solicitors advised that "A land owner's right of access may only be denied by express statutory authority and that any denial of access would probably give rise to a claim for compensation". In the second letter, particular attention was given to the Local Government (Uniform Local Provisions) Regulations 1996 which conferred power on local government authorities such as Vincent to control crossings from public thoroughfares to private land. In this second letter Vincent's solicitors advised with respect to these regulations that "The Town may impose conditions on the construction, design and condition of a crossing. However, the regulations do not allow the Town to entirely prevent access from a public thoroughfare to private land".
A recommendation was prepared by officers of Vincent for consideration by the Council when it met on 23 May 2000. In essence, the recommendation was that the Council should:
"(i)Receive the report prepared by the officers,
(ii)Note the legal advice, and
(iii)Write to the defendant and the Commissioner of Main Roads seeking an assurance that the issue will be resolved without prejudicing Vincent."
Before the meeting on 23 May 2000, however, the plaintiff arranged for the then Mayor, who was known to him, to discuss the issue with the plaintiff and Mr McMahon at the site. During this meeting the evidence satisfies me that the plaintiff and Mr McMahon each stressed to the Mayor aspects of the BSD report and each of them urged the view that Vincent should not approve vehicular access to Lot 116 as it would be unsafe. In fact, the essence of what was put was that access was not possible to Lot 116 because of safety considerations. Among the matters stressed by the plaintiff and Mr McMahon were the restrictions on sight lines for a crossover/driveway at the eastern end of the Newcastle Street frontage, particularly for pedestrians and cyclists approaching the intersection from the dual use cycleway/footpath in Loftus Street, as well as for vehicles, which restrictions were caused, as the plaintiff and Mr McMahon urged, particularly by the retaining wall which MRWA had by then built at the plaintiff's insistence to retain the existing ground level on Lot 116 in the vicinity of the resumed truncation on the corner. This had been built in mid-1999, subsequent to the resumption. I note that this retaining wall was no higher than the retaining wall of the plaintiff which it replaced and that this retaining wall followed the line of the truncation rather than the original boundary.
The Mayor left the site meeting with a view to discussing the matter with his officers. I accept from the evidence of the Mayor that he was impressed by the BSD report and the matters put to him by the plaintiff and Mr McMahon, and because of these and from his own assessment of the situation he formed the view that there were dangerous aspects of the corner, particularly relating to cyclists and pedestrians, and that a crossover adjacent to the eastern corner of Lot 116 allowing access from Newcastle Street represented a danger. He held a similar view of the existing crossover to the adjoining Lot 117 which was located immediately adjacent to the boundary dividing Lots 117 and 116. At the site meeting the possibility of access to Lot 116 from Loftus Street was also discussed and I accept from the evidence that the physical difficulties of such access were stressed and that the Mayor was impressed, again particularly by the BSD report, that access from Loftus Street, like the proposed access from Newcastle Street, would not comply with the MRWA interim policy or with national standards.

I will hear counsel on the precise calculations and other orders that may be appropriate.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CERINI -v- THE MINISTER FOR TRANSPORT [2001] WASC 309 (S)

CORAM: PARKER J

HEARD: 14 MAY - 6 JUNE, 11-27 JUNE, 2 & 3 JULY, 30 NOVEMBER 2001

DELIVERED : 14 NOVEMBER 2001

SUPPLEMENTARY
DECISION :6 DECEMBER 2001

FILE NO/S: CIV 2472 of 2000

BETWEEN: GRAHAM VICTOR CERINI
Plaintiff
AND
THE MINISTER FOR TRANSPORT
Defendant

Catchwords:

Costs - Pre-trial offer of compromise - Judgment for sum less than offer - Discretion to vary operation of O 24A r 10(5)

Legislation:

Rules of the Supreme Court (WA), O 24A r 10(5)

Result:

Each party to bear own costs

Category: B

Representation:

Counsel:

Plaintiff: Ms L E Rowley
Defendant: Mr F Sunderland

Solicitors:

Plaintiff: McLeods
Defendant: State Crown Solicitor

Case(s) referred to in judgment(s):

Edwards v Minister of Transport [1969] 2 QB 134
Houatchanthara v Bednarczyk, unreported; NSW Ct of Appeal; 14 October 1996
Monier Ltd v Metal Work Tiling Company of Australia Ltd & Anor (No 2) (1987) 43 SASR 588
Morgan v Johnson (1998) 44 NSWLR 578
New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100
Oshlack v Richmond River Council (1998) 193 CLR 72
Oxlade v Gosbridge Pty Ltd (No 2) [1999] NSWCA 165

Case(s) also cited:

Banno & Anor v Commonwealth of Australia & Anor (1993) 81 LGERA 34
Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd & Ors (1947) 74 CLR 358
Mok Gek Bouy v The Minister for Immigration, Local Government and Ethnic Affairs (1993) 47 FCR 81
Sisters of Charity of Rockingham v The King [1922] 2 AC 315
Smiths Ltd & Anor v Middleton [1986] 1 WLR 598
Unioil International Pty Ltd v Deloitte Touche Tohmatsu & Anor (No 2) (1997) 18 WAR 190

PARKER J: This supplementary decision concerns the costs of the action in respect of which the reserved decision was delivered on 14 November 2001.
The plaintiff in this action sought an award of compensation pursuant to s 241 of the Land Administration Act 1997 (WA) ("LA Act"). His claim as particularised was for $685,446.91 plus discretionary sums and interest. The plaintiff was awarded $95,750 plus interest. It is now agreed that the interest figure is $8,920, ie the total award for present purposes is $104,670.
It has now been shown before me that on 15 April 2001 an offer of compromise, complying with Rules of the Supreme Court O 24A, was made by the defendant in the sum of $110,000. This offer was made four weeks before the commencement of the trial. The offer was not accepted by the plaintiff.
By O 24A r 10(5) it is therefore the position that:
"… unless the Court otherwise orders, the plaintiff shall be entitled to an order against the defendant for his costs in respect of the claim up to and including the day the offer was made, taxed on a party and party basis, and the defendant shall be entitled to an order against the plaintiff for his costs in respect of the claim thereafter, taxed on a party and party basis."
The plaintiff seeks an exercise of the discretion for which r 10(5) provides. Primarily, the plaintiff seeks an order, notwithstanding r 10(5), that the defendant pay the whole of its taxed costs of the action. Alternatively, the plaintiff seeks an order that he should have his taxed costs to and including 15 April 2001 and that each party should bear its own costs from 16 April 2001. As a further alternative, the plaintiff submits that if the defendant is to have an award of costs from 16 April 2001 it should only be awarded one‑third of its taxed costs.
The defendant submits that there is no reason to depart from the ordinary operation of O 24A r 10(5) in so far as it provides for the defendant to have its taxed costs from 16 April 2001, but it submits that the taxed costs of the plaintiff to and including 15 April 2001 should be reduced to reflect the extent to which the plaintiff was unsuccessful in the issues it raised. It submits that such a reduction is appropriate having regard to the time and effort expended on those issues and because of findings made in the decision as to aspects of the conduct of the plaintiff. It is submitted that the reduction should be in the order of 50 per cent.
To the extent that each party seeks an exercise of discretion to vary the ordinary operation of the Rule it is for that party to demonstrate that there are adequate reasons to justify the exercise of discretion.
In Morgan v Johnson (1998) 44 NSWLR 578 Mason P, with whom Sheller JA concurred, considered and extracted from a number of earlier decisions a number of principles in relation to Pt 19A r 25(6) of the District Court Rules (NSW) which, at the time relevant to that case, was in substantially identical terms to O 24A r 10(5). He also considered decisions on corresponding provisions in the Supreme Court Rules 1970 (NSW), see Pt 52 r 17(5) and Pt 52A r 22(6). The principles enunciated by Mason J at 581‑582 include:
(1)The purpose of the rule is to encourage the proper compromise of litigation, in the private interests of individual litigants and the public interest of the prompt and economical disposal of litigation.
(2)The aim is to oblige the offeree to give serious thought to the risk involved in non‑acceptance.
(3)The prima facie consequence of non‑acceptance will be that the rule will be enforced against the non‑accepting party. This is because, from the time of non‑acceptance "notionally the real cause and occasion of the litigation is the attitude adopted by [the party] which has rejected the compromise". As was observed in this respect by Gleeson CJ, Cripps and Clarke JJA agreeing, in New South Wales Insurance Ministerial Corporation v Reeve (1993) 42 NSWLR 100 at 102 "discussion of the availability of the discretion, is done in the context of a recognition that in any ordinary case … the rule should be applied in its terms."
(4)Lying behind the Rule is the common knowledge that "litigation is inescapably chancy". For this reason, the ordinary provision is expected to apply in the ordinary case. The mere fact that it was reasonable for the litigant to take the view that he or she did in rejecting the offer is not enough to displace the rule. In this respect Mason P cited observations of Clarke JA in Houatchanthara v Bednarczyk, unreported; NSW Ct of Appeal; 14 October 1996 where at 2‑3 his Honour said:
"The rule lays down the general principle that should be applied, and the Order provided for in that rule should only be departed from for proper reasons which, in general, only arise in an exceptional case.
It is clear that if the rule operates, the plaintiff will be significantly disadvantaged, but that disadvantage flows naturally from the risks of litigation. … Where an offer is made by a defendant to a plaintiff, the latter is put on notice that unless he or she accepts that offer, there is a significant risk that the order provided for by the rule may follow. In declining to accept the offer, the plaintiff undertakes the risk and the consequences that flow naturally from that risk."
(5)The discretion to displace the rule is a judicial one, requiring the private and public purposes of the rule to be borne in mind. Reasons must be given for "otherwise ordering".
To this summary may be added a reference to the decision in Oxlade v Gosbridge Pty Ltd (No 2) [1999] NSWCA 165 at [8] per Mason P, with whom Fitzgerald JA and Shepperd AJA concurred, to the effect that the ordinary operation of the rule is not to be displaced just because the case is a difficult one.
In my respectful view this represents a convenient summary of the approach to the rule which is appropriate, and which has generally been followed in this Court, in the context of O 24A.

Plaintiff's Submissions

The primary submission of the plaintiff is that this should be regarded as an exceptional case, justifying departure from the provision of the Rule. In effect it is contended that the defendant conducted its defence on the basis that the principles enunciated in Edwards v Minister of Transport [1969] 2 QB 134 should be applied in awarding compensation under s 241. This was not the view to which I came. The plaintiff contends that the present action should be seen to be in the nature of a test case on this issue. The plaintiff sought to strengthen the force of its submission in this respect on the basis that there was a public interest to be served by the plaintiff pursuing his claim so as to achieve a resolution of the uncertainty concerning the application of Edwards v Minister of Transport a question which could effect other claimants for compensation, and Oshlack v Richmond River Council (1998) 193 CLR 72, particularly the discussion by Kirby J at 120‑127, was relied on.
While it is of some relevance to the discretion that the true construction of s 241 of the LA Act was in issue and that this issue has a relevance beyond the present case, this was but one of many legal and factual issues in dispute, the majority of which were resolved against the plaintiff. While it was an issue of significance it quite distorts the action to suggest that the decision in Edwards v Minister of Transport was the primary, or even a predominant issue, in the action. On any reasonable view of the action, one factual issue dominated the case. It did so in the terms of the amount of time and costs devoted to it and to its ramifications, in preparation, evidence and submissions. This was the issue whether, by virtue of the public work and the resumption of 18 square metres of the plaintiff's land, the unresumed balance of 640 square metres was rendered valueless, or virtually so, because vehicular access became impossible. The plaintiff failed on this critical and dominant factual issue. This was an issue unique to this plaintiff's entitlement to compensation and of no relevance to any other claimant for compensation. Had Edwards v Minister of Transport applied this could have effected the measure of the plaintiff's entitlement in this respect. The claim failed, however, on the fundamental factual issue.
The decision in Oshlack v Richmond River Council really concerned the application of the ordinary principle that in the absence of disentitling conduct a successful party should be compensated for its costs by the unsuccessful party, and its application to the circumstances of that case in the light of particular legislative provisions of the Environmental Planning and Assessment Act 1979 (NSW). By reason of this the question also arose as to the weight which ought to be accorded to the public interest in the protection of endangered fauna in the application to and exercise of the ordinary discretion as to costs of proceedings being conducted in the Land and Environment Court. Apart from the unquestioned proposition that relevant public interest considerations, where applicable, ought to weigh in the exercise of judicial discretion, the decision in Oshlack v Richmond River Council is of little direct relevance to the present case.
For present purposes the focus of attention is the particular discretion contemplated by O 24A r 10(5). This is quite different from that being considered in Oshlack v Richmond River Council. The whole point of O 24A r 10(5) is to displace the ordinary principle at issue in Oshlack v Richmond River Council.
I should refer in particular to a contention of the plaintiff that he declined the O 24A offer of the defendant because it was plainly built upon the Edwards v Minister of Transport decision. It is contended that by making an offer on this basis the defendant "encouraged" the plaintiff into proceeding with the litigation. This submission appears to be based on wrong factual premises and confuses the nature and purpose of an O 24A offer. The offer made was to settle the action on the basis that the defendant pay the plaintiff $110,000 in settlement of the whole of its claim for compensation. It was a lump sum offer. The letter communicating the offer contains no statement of any legal basis on which the offer was made and contains no conditions or any other limitations. It cannot be said, therefore, that the offer was built upon any particular basis, let alone Edwards v Minister of Transport.
It is true that the plaintiff's pleaded case relied inter alia on the Edwards v Minister of Transport principle. And it seems to be the case that in the course of earlier negotiations with a view to settlement the parties had inter alia taken opposing positions on most matters, including the application of Edwards v Minister of Transport. The offer made was not on the basis of any earlier negotiations, however, and as far as is now demonstrated before me during the negotiations the defendant was negotiating from a position that the plaintiff's entitlement was in the order of $50,000. The O 24A offer, when made, was for over twice that sum, although very much less than the figure for which the plaintiff was contending. The offer, therefore, could not be related on any basis to the position of the defendant during earlier negotiations.
The proposition that the offer encouraged the plaintiff into proceeding with litigation, on examination, really involves no more than that the plaintiff did not consider the offer of $110,000 was enough. As the authorities have made clear, the rule seeks to oblige the plaintiff to give serious thought to the risk involved in non‑acceptance, and notionally, at least, from the time of its non‑acceptance in this case, the real cause and occasion of the litigation was the plaintiff's attitude in rejecting the compromise which proved to be more favourable to the plaintiff than his entitlement to compensation. This is so notwithstanding that there may have been a reasonable basis for the plaintiff's view that the offer was inadequate.
In the context of this action, I am not persuaded, therefore, that the application of Edwards v Minister of Transport should be accorded any significant place in the exercise of the discretion.
It is also contended that this should be regarded as an exceptional case because the plaintiff's claim was for compensation for compulsory resumption under statutory powers. He submits he properly invoked the jurisdiction of this Court to have a due determination of his statutory entitlement to compensation.
In this respect I note that it is provided by s 223(3) LA Act that where a claimant chooses to pursue his or her claim in this Court the claim "is to be heard and determined in the same manner as ordinary actions…". This provision offers little encouragement to the establishment of any special position with respect to the operation of the Rules of the Court for such claims.
Nevertheless, as to the primary point of this submission I do accept that there is a public interest in enabling those who have been the subject of compulsory acquisition to secure their due entitlement to compensation. In a proper case it would be appropriate, no doubt, to reflect this as the circumstances justified in awarding costs in the action. I accept it to be a relevant consideration in the present circumstances.
It is necessary, however, to consider the degree of force that should be allowed to this consideration in all the circumstances of the present case and whether, properly evaluated and weighed, this justifies departure from the normal operation of the Rule.
On closer consideration and reflection the plaintiff's position in this action is not in truth so very different in relevant respects from the position of a plaintiff who has suffered property loss or personal injury by, for example, an abuse of statutory power or negligence in the exercise of statutory power by a governmental agency in circumstances where the plaintiff is without fault. In such an action the quantum of damages to which the plaintiff is entitled may well be affected by a wide range of factual and legal uncertainties. Such a plaintiff and his or her legal advisers may take the view that there are sound reasons to press all items of the claim made. The claim may be well supported by expert opinion. In such a case the only way to resolve all the disputed issues, and to ensure that the plaintiff recovers his or her full entitlement to damages, would be to proceed to trial. Yet if this course is taken, and the amount of damages awarded is less than a formal O 24A offer of compromise made pre‑trial, such a plaintiff would be faced with the operation of O 24A.
In a similar position would be a plaintiff who, without contributing fault, has suffered property loss or personal injury by the wrong of another citizen or a corporation. Such a plaintiff may be faced with wide ranging legal and factual difficulties in an action to recover what, on sound expert advice, is the full measure of damages. Again it would be the case that the only way to ensure that this plaintiff received the full measure of damages to which his or her loss gave an entitlement would be to proceed to trial. In the absence of exceptional circumstances it would not avail such a plaintiff that his conduct was without fault, that his claim was complex, or that it was well supported. Where the damages awarded were less than a formal offer of compromise under O 24A, such a plaintiff would be faced with the operation of r 10(5).
Hence, in my view, the fact that the "wrong" done to the present plaintiff may be seen to be the compulsory taking of some of his land, is not obviously a distinction of material significance from the plaintiffs in the examples given.
In the particular circumstances of this case, the plaintiff pursued a claim totalling over $685,000. The compensation awarded was only $95,750. At a global and general level the plaintiff's ambitions in the action far exceeded his entitlement to compensation. At a more particular level, as is to be found in the reasons for decision, in many respects his claims proved to be without legal or factual justification or to be grossly excessive.
Having weighed the legal and factual issues raised, in particular having regard to the public and private interests which the rule seeks to reflect, I am not persuaded that there is justification in this case for displacing the normal operation of the rule in favour of granting the plaintiff his costs of the action.

Plaintiff's First Alternative Submission

In support of the first alternative submission that I should exercise the discretion by modifying the ordinary operation of the rule to make no order as to costs from 16 April 2001, the plaintiff sought to identify aspects of the defendant's conduct of its case as to which it failed or, in the plaintiff's contention, caused unnecessary or wasted work for the plaintiff.
For reasons which I will mention more fully later, it should be said at the outset that this is not a case where there is any obvious reason to approach costs on an individual issues basis. In any event it is a rather forceful answer to any attempt at analysis on this basis that it was the plaintiff that failed in respect of more issues than the defendant, and in particular he failed in respect of the factual issue identified earlier which dominated the case in terms of the time and effort devoted to it.
In addition to many of the matters already discussed, the plaintiff points in particular to the failure of the defendant to call a number of witnesses, including one of its valuers, which it is submitted involved wasted effort by the plaintiff in preparation and unnecessary evidence in the plaintiff's case in anticipation of some of these witnesses. The plaintiff also points to the defendant's unsuccessful defence of one claim in respect of a retaining wall, which it is submitted was an unjustified defence such that it might properly attract indemnity costs in favour of the plaintiff. It is also submitted that the defendant did not succeed on a factual issue concerning vehicular access to service stations or in respect of the legal basis for a reservation affecting the frontage of the plaintiff's land. An issue of discovery is also raised.

In the overall scale of the action all of these matters are, at most, of only very limited significance. I accept from the evidence before me that there were sound reasons for the defendant to anticipate before trial the need to call the witnesses in question but that, in respect of all witnesses but the valuer, the need to do so fell away due to developments in the course of the trial. I accept that the defendant prepared and intended to call the valuer, but because the plaintiff's case was prolonged so as to occupy virtually the whole of the time originally anticipated for the trial, other commitments of this witness precluded his being called without real inconvenience. In these circumstances it was the decision of the defendant to do without this material witness despite the potential disadvantage to its case. This was necessitated substantially by the length of time eventually devoted to the conduct of the plaintiff's case. The defendant is not properly to be criticised in this matter. While it is true that the defendant did not succeed on the two matters identified, a review of the conduct of the action will quickly reveal that it was the plaintiff who failed on a number of points which significantly lengthened the hearing and involved much preparation by the defendant. With respect to the retaining wall, the claim was small; while a number of witnesses gave some evidence relating to it most of them would have been called for other reasons, and the factual issues concerning the wall were inter‑related with other issues in the case. Further, the plaintiff was only partially successful in this respect as the claim he pursued well exceeded in quantum and substance his entitlement. The matter of discovery did not involve a failure pre‑trial of the defendant to give discovery then sought by the plaintiff. In any event it is of virtually no significance in the scale of matters relevant to the conduct of the action by each party.
It has not been shown that there are valid grounds of any significance for criticism of the conduct of the defendant's case or that by virtue of the manner in which the case was conducted there is any sufficient justification to vary the operation of r 10(5) as a matter of discretion so as to make no order for costs for either party from 16 April 2001.

Plaintiff's Further Alternative Submission

As to the further alternative submission of the plaintiff that the defendant should only be allowed one‑third of its costs from 16 April 2001 the plaintiff sought to rely on Monier Ltd v Metal Work Tiling Company of Australia Ltd & Anor (No 2) (1987) 43 SASR 588. In that case the plaintiff alleged infringement of a registered design. It succeeded on the issue of infringement but failed to establish validity so that its claim failed and the defendant succeeded on a counterclaim. The defendant, however, had not raised the issue of validity until the actual date of the trial, which necessitated an initial adjournment, and did so in contradiction of earlier assurances given in the course of interlocutory proceedings. The defendant had also failed in its duty of full disclosure with respect to the issue of validity. Jacobs J ordered that the plaintiff only pay one‑third of the defendant's costs incurred after the adjournment.
Once again this case turned on the general discretion rather than the very different discretion with which O 24A r 10(5) is concerned. Further, I am not persuaded that the conduct of its case by the defendant involved anything equivalent to the elements identified by Jacobs J, and which led to his exercise of the general discretion in the manner indicated. What has been said earlier is sufficient to indicate why I am not persuaded that the conduct of the action by the defendant was such as to warrant, in the exercise of discretion, any variation to the ordinary operation of O 24A r 10(5).

Defendant's Submission

The defendant seeks a further variation of the operation of the rule, as a matter of discretion, by the reduction of the plaintiff's costs before 15 April 2001 by some 50 per cent. The basis advanced, essentially, is the other side of the coin on which the plaintiff relied, namely, that given the issues on which the plaintiff was unsuccessful, and the time and effort they entailed in preparation, and it seems also in hearing time, a reduction in the order of 50 per cent would be justified. The defendant can point to a list that is both longer and of greater significance in terms of time and effort than the plaintiff in this respect.
As was indicated with respect to the plaintiff's similar contention, this is not a case where a division of costs on the basis of particular issues is really appropriate. The plaintiff had a statutory entitlement to be paid compensation the amount of which was to be determined according to the provisions of s 241 of the LA Act. The disputed matters of law and fact were all related to the application, in the circumstances of this case, of various provisions within s 241 affecting the determination of the plaintiff's entitlement to compensation. Issues outside of s 241 were not claimed or pursued. In my assessment of the action, neither the plaintiff nor the defendant pursued legal or factual issues arising under s 241 which were frivolous or vexatious, even though, in the end, the preponderance of the merits of the disputed matters fell in favour of the defendant.
The reasons for decision reveal that in respect of some matters the plaintiff conducted himself, before the hearing, in a manner which was somewhat surprising and at times unreasonable. Where appropriate, that has had a relevance to my determination of some factual matters. Beyond that, however, I am not persuaded, in the circumstances of this case, that this consideration should affect the exercise of discretion concerning costs.
For these reasons I am not persuaded there is any adequate basis demonstrated for the exercise of discretion to vary the normal operation of r 10(5) in the manner for which the defendant contends.

Each Party To Bear Own Costs

In the course of oral submissions, in light of the various positions taken by the respective parties on the matter of costs, I expressly raised whether this might be an appropriate case in which, in the end, the interests of both parties might be best served by an order that each party bear its own costs of the action.
Neither I, nor no doubt the parties, were in a position to assess the precise implications of such an order, and the precise extent to which the result might differ from the result if O 24A r 10(5) were to be given its ordinary operation. Nevertheless, it did appear to me as a matter of general evaluation from my knowledge of the action and what was before me, having regard to the very extensive preparation which the case had obviously involved before the offer of compromise, the length of the hearing, and the ordinary operation of O 24A r 10(5), that an order that each party bear its own costs might well have a substantially similar outcome. A further and significant advantage of such an order is that both parties would be spared the further considerable cost and effort that would be involved in what would obviously be a most prolonged and complex taxation of two sets of costs.
In the course of the argument neither party saw, or sought to raise, any specific objection to an order that each party bear its own costs. Having regard to the potential significance of such an order for the interests of the parties, however, I allowed until 5.00 pm on 3 December 2001 for further written submissions on this matter.
Both parties have now made further submissions. It is still the case that neither party objects to such an order. In the case of the plaintiff, however, it is submitted that as any order might be the subject of appeal it would be appropriate for me to deal with the submissions made by each party in any event. For the defendant it is submitted that, without derogating from its submissions as to the reasons why O 24A r 10(5) ought to be applied according to its ordinary force, the defendant would not oppose the Court making no order for costs, although it would attach a caveat to that that I should first be satisfied that there is a fair equivalence or balance between the competing claims to costs before doing so.
I have in fact set out in these reasons the position to which I have come in respect of the various submissions of the parties. I have also indicated the basis upon which it appears to me, so far as the materials presently placed before me by the parties and my general appreciation of the action can reveal, why the entitlement of each party pursuant to the ordinary operation of O 24A r 10(5) might well prove to be in approximate balance. In this regard the fact that neither party objects to such an order appears to offer some further confirmation for this view. In any event, it is a matter of some considerable significance that were I to make an order which reflected the ordinary operation of O 24A r 10(5), it would be necessary for both parties to prepare and tax bills in respect of their costs that would be of very considerable complexity and length, and also to prepare to meet the corresponding bill of costs prepared by the other party. This would involve each party in considerable additional effort and expense, and would occupy much time and effort by a taxing officer of this Court.
For the reasons indicated, and having regard in particular to the position taken by each party, I am persuaded that the preferable course in this case, in the interests of justice as between the parties and the public interest, is to order that each party should bear its own costs of the action. I should merely indicate, should it become relevant, that for the reasons given earlier I would otherwise have made orders which reflected the ordinary operation of O 24A r 10(5).
Other Issues
Given the order which I have made with respect to costs there is no reason why there should be any further delay in the finalisation of the orders in the action. In this respect, had there been an order in respect of costs reflecting the ordinary operation of O 24A r 10(5), it was the submission of the defendant that final orders should be delayed to enable effect to be given to s 247 LA Act. This provides for the deduction of costs from the compensation payable. There were submissions as to the interpretation of that provision with which I need not now concern myself.
There was also a submission advanced, apparently under the slip rule, that I might reconsider one aspect of my principle reasons for decision with a view to awarding a further sum a little in excess of $5,000 in respect of the cost of repairs to the duplex dwelling. It was suggested there was inconsistency in one respect between my decision in regard to this item of compensation and the claim in respect of the retaining wall. In my view this is not a matter for the operation of the slip rule, or for which, on any other basis, I ought to reconsider my decision at this juncture. If there is any substance in the proposition that there is an error in the approach taken to the question of compensation in respect of the duplex dwelling, that appears to be properly a matter for appeal. I do not propose to take any action in this regard.