City of Wanneroo v Bakota [No 2]
[2025] WASCA 62
•30 APRIL 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: CITY OF WANNEROO -v- BAKOTA [No 2] [2025] WASCA 62
CORAM: BUSS P
VAUGHAN JA
SOLOMON J
HEARD: 19 FEBRUARY 2024
DELIVERED : 30 APRIL 2025
FILE NO/S: CACV 8 of 2023
BETWEEN: CITY OF WANNEROO
Appellant
AND
IVAN BAKOTA
First Respondent
RUZICA BAKOTA
Second Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: CURTHOYS J
Citation: BAKOTA v CITY OF WANNEROO
File Number : CIV 1145 OF 2015
Catchwords:
Compensation for compulsory acquisition - Damages due to severing of land - Construction of s 241(7) of Land Administration Act 1997 (WA) - Before scenario and after scenario - Unaffected scenario and affected scenario - Cause of delay to subdivision potential - Delay to subdivision due to delay in road access - Delay to subdivision due to delay in providing sewerage infrastructure to neighbouring lots - Impact on value of delay in development potential - Land having only rural value due to delay in development potential - Engineering and planning advice on delay to development potential - Special value of land to owner of neighbouring land - Objective assessment of likelihood of owner of surrounding land purchasing neighbouring lot in its own interests - Cutting and pasting parties' submissions into judgment - Constructive failure to exercise jurisdiction - Whether trial judge made errors and whether those errors demonstrated a failure to consider the evidence and/or the law
Legislation:
Land Administration Act 1997 (WA)
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
| Appellant | : | Mr K M Pettit SC |
| First Respondent | : | Mr A Tokley KC and Ms L Rowley |
| Second Respondent | : | Mr A Tokley KC and Ms L Rowley |
Solicitors:
| Appellant | : | M Gregory Legal |
| First Respondent | : | Rowley Legal |
| Second Respondent | : | Rowley Legal |
Case(s) referred to in decision(s):
Atanaskovic Hartnell Corporate Services v Kelly [2024] FCFCA 137
Bakota v City of Wanneroo [2022] WASC 462
Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11; (1990) 169 CLR 279
Brisbane City Council v Mio Art Pty Ltd [2011] QCA 234; [2012] 2 Qd R 1
Carson v Minister for Environment and Planning (1990) 70 LGRA 215
Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 96; (2015) 207 LGERA 448
Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1
Fraser v Burswood Resort (Management) Ltd [2014] WASCA 130
Joyce v Anderson [2020] WASCA 48; (2020) 91 MVR 334
Kelliher v Kelliher [2015] WASC 478
Lee v Lee [2019] HCA 28; (2019) 266 CLR 129
Lenz Nominees Pty Ltd v Commissioner of Main Roads [2012] WASC 6; (2012) 186 LGERA 58
Li v Attorney General for NSW [2019] NSWCA 95
Longworth v Commissioner of Stamp Duties (1953) 53 SR (NSW) 342
LVR (WA) Pty Ltd v AAT [2012] AAT FCAFC 90; 203 FCR 166
Magann v The Trustees of the Roman Catholic Church for the Diocese of Paramatta [2020] NSWCA 167
McKay v Commissioner of Main Roads [No 7] [2011] WASC 223
Merrick Tyler Pty Ltd v Commissioner of Main Roads [2015] WASCA 82
Mir Bros Unit Constructions Pty Ltd v Roads & Traffic Authority of New South Wales [2006] NSWCA 314
Park v Brothers [2005] HCA 73; (2005) 80 ALJR 317
Porter v The Queen [2024] ACTCA 9; (2024) 21 ACTLR 122
Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer, Vizagapatam [1939] AC 302
Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679
Secretary to the Department of Economic Development, Jobs, Transport and Resources v Avid Property Group Nominees Pty Ltd [2017] VSCA 136; (2017) 53 VR 490
Secretary to the Department of Economic Development, Jobs, Transport and Resources v CRG Nominees Pty Ltd [2016] VSC 301
Spencer v Commonwealth [1907] HCA 82; (1907) 5 CLR 418
Tabloid Pty Ltd v Pringle [2024] WASCA 152
The Adelaide Fruit and Produce Exchange Co Ltd v The Corporation of the City of Adelaide [1961] HCA 20; (1961) 106 CLR 85
Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56
University of Wollongong v Metwally [No 2] [1985] HCA 28; (1985) 59 ALJR 481
Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491
Western Australian Planning Commission v Kelly [2007] WASCA 160
Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598
INDEX
BUSS P
The grounds of appeal
The background facts and circumstances, the evidence at the trial, the trial judge's reasons and the submissions of the parties in the appeal
Ground 1: s 241 of the LA Act
Ground 1: the pleadings at the trial
Ground 1: Mr and Mrs Bakota's opening submissions at the trial
Ground 1: the City of Wanneroo's opening submissions at the trial
Ground 1: Mr and Mrs Bakota's closing submissions at the trial
Ground 1: the City of Wanneroo's closing submissions at the trial
Ground 1: the trial judge's reasons
Ground 1: the City of Wanneroo's submissions in the appeal
Ground 1: Mr and Mrs Bakota's submissions in the appeal
Ground 1: its allegations
Ground 1: the letter dated 8 June 2012 from Greg Rowe & Associates
Ground 1: Mr Hajigabriel's evidence
Ground 1: Mr Chapman's evidence
Ground 1: its merits
Grounds 2, 3 and 4
Conclusion
VAUGHAN JA...................................................................................................................... 100
SOLOMON J
Background
Legislative framework
The issues and the evidence
Engineering evidence
Planning evidence
Valuation evidence
Decision and reasons of the learned trial judge
Grounds of appeal
Grounds
Ground 1
City's submissions
Bakotas' submissions
Ground 1 - consideration
Ground 2
Ground 3
Ground 4
Ground 5
Conclusion
BUSS P:
Since 1985, the respondents (Mr and Mrs Bakota) have operated a market garden from their land at 185 Mary Street, Wanneroo.
Prior to 23 January 2012, Mr and Mrs Bakota's land had an area of 4.0443 ha and comprised Lot 3 on Plan 7975. The land had a wide frontage to Mary Street on the southern boundary of the land.
On 23 January 2012, the appellant (the City of Wanneroo) compulsorily acquired part of Lot 3 pursuant to pt 9 of the Land Administration Act 1997 (WA) (the LA Act). The acquired land comprised 5,847 sqm (the Taken Land). The acquisition was for the purpose of widening and realigning Lenore Road, which is situated to the west of Lot 3. The acquisition had the effect of very significantly reducing the street frontage of Mr and Mrs Bakota's remaining land (the Remaining Land) to Mary Street.
The Taken Land became Lot 505. The Remaining Land became Lot 9003 and has an area of 3.4596 ha.
Pursuant to s 179(b) of the LA Act, on the registration of the taking order in relation to the Taken Land, the proprietary interest of Mr and Mrs Bakota in the Taken Land was converted into a claim for compensation under pt 10 of the Act.
On 4 September 2012, the City of Wanneroo made an advance payment to Mr and Mrs Bakota of $1,156,850.07 compensation. The parties were unable to agree whether additional compensation should be paid.
In 2015, Mr and Mrs Bakota commenced an action for compensation against the City of Wanneroo pursuant to s 221(1)(a) of the LA Act.
The action for compensation was tried before Curthoys J over eight sitting days in August and September 2022.
As at 23 January 2012 (being the date of taking), Lot 3 (being the whole of Mr and Mrs Bakota's land) was zoned Rural.
However, at the trial, Mr and Mrs Bakota and the City of Wanneroo agreed that as at 23 January 2012 Lot 3 had the potential for a higher and better use, namely residential subdivision.
The primary issue at the trial concerned the compensation that should be paid, pursuant to s 241(7)(a) of the LA Act, for 'severance damage'.
Mr and Mrs Bakota asserted that they had suffered damage due to the severing of the Taken Land from the Remaining Land. In particular, Mr and Mrs Bakota claimed that, as a result of the taking, the Remaining Land had, in effect, become landlocked and was unsuitable for any use other than market gardening. Alternatively, Mr and Mrs Bakota claimed that the development of the Remaining Land for residential subdivision use had been delayed, as a result of the taking, by an additional six years. This six year period was alleged to be the time it would take for the owner of Lot 9004, which is adjacent to the Remaining Land, to develop Lot 9004 as a residential subdivision. The development of Lot 9004 as a residential subdivision would necessarily involve the construction of a road that would enable the Remaining Land to obtain adequate access to Mary Street for residential subdivision approval.
Mr and Mrs Bakota claimed $2,836,872 (alternatively $1,315,345) for severance. The sum of $2,836,872 was the alleged diminution in the value of the Remaining Land on the basis that, as a result of the taking of the Taken Land, the Remaining Land was only suitable for market gardening use. The alternative sum of $1,315,345 was the alleged diminution in value of the Remaining Land on the basis that, as a result of the taking, the development of the Remaining Land for residential subdivision use had been delayed by an additional six years.
The City of Wanneroo asserted that no compensation was payable for severance.
On 23 December 2022, the trial judge delivered judgment and published written reasons. On that date his Honour made, relevantly, these orders:
(a)There be judgment for Mr and Mrs Bakota in the sum of $2,950,857.66 (being an award of compensation of $4,107,707.67 after allowing for the advance payment of $1,156,850.07).
(b)The City of Wanneroo pay to Mr and Mrs Bakota interest on the compensation, pursuant to s 241(11) of the LA Act, in the sum of $1,928,154.34.
The award of $4,107,707.67 included $2,836,872 (being the amount of Mr and Mrs Bakota's primary claim) for severance.
His Honour held that Mr and Mrs Bakota were entitled to interest on the award of $4,107,707.67 from 23 January 2012 (being the date of taking) to 4 September 2012 (when the City of Wanneroo made the advance payment) and on the balance from 4 September 2012 to judgment at the rate of 6% per annum.
The City of Wanneroo has appealed against the amount of compensation awarded by the trial judge. There are five grounds of appeal. The appeal relates solely to the severance award.
I would dismiss the appeal for the reasons which follow.
The grounds of appeal
The grounds of appeal are as follows:
1.In finding, for the purposes of severance damage under s 241(7)(a) of the Land Administration Act 1997 (WA), that the deferral period until subdivision of [the Remaining Land] disregarding the taking and the works (unaffected scenario) was 5 ‑ 7 years (as from 23 January 2012) (Reasons [96]), the learned trial Judge erred in law and in fact by failing to take into account evidence to the effect that, by trial date in August 2022:
(a)the period already elapsed before subdivision was more than 10 years (as from January 2012);
(b)the period to elapse before subdivision was likely to be at least 12 years as from January 2012 (a further 2 years or more from the trial date); and
(c)those periods elapsed and to elapse before subdivision were not attributable to the taking,
such that, in Reasons [16] and [347], the claim for and the assessment of severance damage could not rationally depend on a finding of 5 ‑ 7 years deferral in the unaffected scenario.
2.In finding that, for the application of s 241 of the Land Administration Act, having regard to the taking and the works (affected scenario), a hypothetical purchaser of [the Remaining Land] (the land remaining in the plaintiffs' ownership after the taking), would not be able to secure subdivision approval in the near or medium term for [the Remaining Land] (Reasons [296], [303]), the learned trial Judge erred in law and in fact by:
(a)relying on an alleged deficiency as to vehicular accessibility of [the Remaining Land] (Reasons [219], [225(1)], [296], [300]), when his Honour should have had regard only to whether vehicular access would be deficient for subdivisional lots within [the Remaining Land] at the times for approval of a local structure plan and plan of subdivision;
(b)failing to take into account that subdivisional approval would include appropriate vehicular access (Reasons [218] ‑ [220]); and
(c)in that respect, relying on the opinion of a witness (Mr Chapman) not qualified to advance that opinion when his Honour should have relied on the opinion evidence of a witness (Mr Hajigabriel or Ms Butterworth) who was so qualified (Reasons [67], [87], [95] ‑ [96], [104] ‑ [105] and TS548-9, 556, Ex21, Reasons [250], [259(2)], [290], [292], [303], [315]).
3.In according a value to [the Remaining Land] in the affected scenario of $26/m2 reflecting bare rural value (Reasons [301] ‑ [303], [347(1)]), the learned trial Judge erred in law and in fact by:
(a)making that finding without regard to the value of [the Remaining Land] for its potential for sale to the owner of adjacent lands under the proper test for land valuation;
(b)applying instead a test hypothesized by his Honour which test is inconsistent with the law (Reasons [287]);
(c)failing to take account that development of [the Remaining Land] would assist the development of the neighbouring lands; and
(d)relying on an erroneous finding that an expert witness, Mr Zucal, had agreed $26/m2 as the affected value.
4.The learned trial Judge erred in law and in fact by failing to properly consider the evidence and/or the law on the following matters and by instead uncritically adopting submissions from the plaintiffs on those matters as the Court's reasons for judgment:
(1)Whether the evidence of the plaintiffs' activity related to the affected or the unaffected scenario (Reasons [94] ‑ [95]).
(2)The effect of alleged access constraints on [the Remaining Land's] prospects for subdivisional approval in the affected scenario (Reasons [296], [345]).
(3)The influence on the value of [the Remaining Land] in the affected scenario by reason of its value to owners of adjoining property (Reasons [287]).
(4)The opinion of witness Brian Zucal on the use of [the Remaining Land] as public open space (Reasons [291]).
(5)The merits of an expert opinion on engineering matters (Reasons [297], [298]).
(6)The agreement of Mr Zucal to an affected value of $26/m2 (Reasons [303]).
(7)That lot 9004 contained Bush Forever (Reasons [117], [284]).
5.In dismissing the defendant's/appellant's counterclaim for recovery from the plaintiffs of the amount by which the advance payment made in 2012 under s 248 of the Land Administration Act exceeded the correct compensation award, the learned trial Judge erred in law and in fact as alleged in Grounds 1 to 4.
The background facts and circumstances, the evidence at the trial, the trial judge's reasons and the submissions of the parties in the appeal
Solomon J's reasons include a summary of the background facts and circumstances, the evidence at the trial, the trial judge's reasons and the submissions of the parties in the appeal.
I will not repeat or elaborate upon his Honour's summary except to the extent necessary to explain my reasons.
Ground 1: s 241 of the LA Act
Part 9 of the LA Act (comprising s 151 to s 201) is concerned with the compulsory acquisition of interests in land. Part 10 (comprising s 202 to s 258) is concerned with compensation for the taking of interests in land.
Section 179(b) of the LA Act provides that, on the registration of a taking order in relation to land, if the order provides that the land is taken, then every registered and unregistered interest in the land not preserved under s 178(2)(a) is extinguished, and each person who formerly held such an interest has that holding converted into a claim for compensation under pt 10.
By s 202(1) of the LA Act, every person having any interest in land which is taken under pt 9 is entitled, subject to pt 10, to compensation for the interest from the acquiring authority.
Section 241 of the LA Act is concerned with determining the amount of compensation (if any) to be paid for an interest in land taken under pt 9.
Section 241 provides, relevantly:
(1)In determining the amount of compensation (if any) to be offered, paid, or awarded for an interest in land taken under Part 9, regard is to be had solely to the matters referred to in this section.
(2)Regard is to be had to the value of the land with any improvements, or the interest of the claimant in the land, assessed as on —
(a)in the case of an interest taken for a railway or other work authorised by a special Act ‑ the first day of the session of Parliament in which the Act was introduced; or
(b)in the case of an interest taken by agreement under section 168 ‑ the date of the execution of the agreement, unless the agreement provides otherwise; or
(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.
…
(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).
The taking order which provided that Mr and Mrs Bakota's fee simple in the Taken Land was taken by the City of Wanneroo was registered on 23 January 2012. Accordingly, that was the date on which Mr and Mrs Bakota's Taken Land was taken and the date on which their fee simple estate in the Taken Land was converted into a claim for compensation under pt 10.
Mr and Mrs Bakota held the fee simple in the Taken Land and they also held the fee simple in the Remaining Land which 'adjoined' the Taken Land. See Merrick Tyler Pty Ltd v Commissioner of Main Roads.[1]
[1] Merrick Tyler Pty Ltd v Commissioner of Main Roads [2015] WASCA 82 [42] ‑ [52] (Newnes & Murphy JJA & Beech J).
Section 241(7) therefore required, relevantly, that regard be had to 'the amount of any damage suffered by' Mr and Mrs Bakota:
(a)'due to the severing of the land taken from that adjoining land' (s 241(7)(a)); or
(b)'due to a reduction of the value of that adjoining land' (s 241(7)(b)).
At the trial, Mr and Mrs Bakota and the City of Wanneroo agreed that the Remaining Land did not enjoy any betterment that had to be set off against the amount of any compensation that would otherwise be payable under s 241(7)(b).
Section 241(7)(a) is concerned with severance damage. Section 241(7)(b) is concerned with injurious affection.
In Lenz Nominees Pty Ltd v Commissioner of Main Roads,[2] Edelman J explained the distinction between s 241(7)(a) and s 241(7)(b) as follows:
In some cases there may be a fine distinction between 'severance' damage (s 241(7)(a)) and injurious affection (s 241(7)(b)). Some decisions treat the two interchangeably: Cerini v The Minister for Transport [2001] WASC 309 [187] ‑ [201] (Parker J). Other cases treat severance damage as a species of injurious affection: Sisters of Charity of Rockingham v The King [1922] 2 AC 315, 327 ‑ 328 (Privy Council), referred to in Mount Lawley [2004] WASCA (335) [327] (the Court).
However, the two concepts are distinct in the legislation, and can also be distinct in effect. Injurious affection in s 241(7)(b) focuses upon the reduction in the value of adjoining land. Severance in s 241(7)(a) is not so confined. In an appropriate case, severance might include, for example, reliance losses suffered which are independent of the value of the adjoining land.
[2] Lenz Nominees Pty Ltd v Commissioner of Main Roads [2012] WASC 6; (2012) 186 LGERA 58 [273] ‑ [274].
The value of the land taken for the purposes of s 241(2) is separate and distinct from any damage suffered by the claimant due to the severing of the land taken from the adjoining land for the purposes of s 241(7)(a).
The process contemplated by s 202(1) read with s 241 is that a fair assessment of the matters referred to in s 241 will be made in determining the amount of compensation (if any) to be paid to a claimant.
The general principle in assessing the market value of land that has been taken is that the market value must be ascertained having regard to the facts and circumstances, including the probabilities, that existed as at the date of the taking, and without regard to subsequent events. However, the general principle is subject to some qualifications, including that regard may be had to evidence of subsequent events for the purpose of confirming or tending to confirm the foresight which the hypothetical parties would have had at the date of taking. See Spencer v Commonwealth;[3] Longworth v Commissioner of Stamp Duties;[4] McKay v Commissioner of Main Roads [No 7].[5]
[3] Spencer v Commonwealth [1907] HCA 82; (1907) 5 CLR 418, 440 (Isaacs J).
[4] Longworth v Commissioner of Stamp Duties (1953) 53 SR (NSW) 342, 348 (Owen J; Herron J agreeing).
[5] McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 [337] ‑ [379] (Beech J).
However, as I will explain, the general principle that, in assessing the market value of land that has been taken, events that have occurred subsequent to the date of the taking are irrelevant, does not apply in assessing, pursuant to s 241(7)(a), whether a claimant has suffered any damage due to severance.
It is instructive, before turning to the proper construction of s 241(7)(a), to review some cases which have considered analogous provisions in other jurisdictions.
In The Adelaide Fruit and Produce Exchange Co Ltd v The Corporation of the City of Adelaide,[6] the respondent, having given to the appellant a notice to treat dated 20 April 1950, compulsorily acquired from the appellant, pursuant to the Compulsory Acquisition of Land Act 1925 (SA), a portion of a piece of land which the appellant used for a market. The rules for determining the amount of compensation were set out in s 12 of the Act. Section 12 provided, relevantly, that where land is taken, the value of the land shall be taken to be its value at the beginning of the period of 12 months prior to the giving of the notice to treat. Dixon CJ, Fullagar, Kitto, Menzies and Windeyer JJ held that it is only the value of the land that s 12 requires to be determined as at the beginning of the period of 12 months prior to the giving of the notice to treat, and that damages for severance or injurious affection must be determined as at the time when compensation is assessed and, whatever information is then available, may be taken into account in determining damages for severance or injurious affection (90). The value of the land taken was assessed by the primary judge in May 1960 (when the trial occurred) as at April 1949, and damages for severance and a deduction for enhancement were assessed by the primary judge as at May 1960. Dixon CJ, Fullagar, Kitto, Menzies and Windeyer JJ said that the primary judge's approach in this respect was correct (90).
[6] The Adelaide Fruit and Produce Exchange Co Ltd v The Corporation of the City of Adelaide [1961] HCA 20; (1961) 106 CLR 85.
In Brisbane City Council v Mio Art Pty Ltd,[7] the appellant resumed part of a parcel of land, pursuant to the Acquisition of Land Act 1967 (Qld), owned by the first respondent and mortgaged to the second respondent, for a public work, namely, the construction of a bridge. The market value of the land taken was in dispute in a claim for compensation under s 20 of the Act.
[7] Brisbane City Council v Mio Art Pty Ltd [2011] QCA 234; [2012] 2 Qd R 1.
Section 20 provided, relevantly:
(1)In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also —
(a)to the damage, if any, caused by any of the following —
(i)the severing of the land taken from other land of the claimant;
(ii)the exercise of any statutory powers by the constructing authority otherwise injuriously affecting the claimant’s other land mentioned in subparagraph (i); and
(b)to the claimant's costs attributable to disturbance.
(2)Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken.
An issue in the appeal was whether a draft structure plan called 'Kurilpa 2', that was published after the acquisition date, should have been taken into account in determining the market value of the land taken. The draft structure plan proposed to increase the height limit under the original structure plan called 'Kurilpa 1' that was applicable to development on the land taken.
The primary court (the Land Court) found that it was likely a prudent purchaser would have been informed when the land was taken that Kurilpa 1 was under review. However, the Land Court concluded that Kurilpa 2 should not be taken into account because there was no evidence as to the content of the review at the relevant time and, in particular, no evidence about whether there was any proposal to increase the height limit.
The Land Appeal Court allowed an appeal from the Land Court on the basis that Kurilpa 2 should have been taken into account as confirming a foresight held by a prudent purchaser at the time of resumption.
The Court of Appeal of Queensland allowed an appeal from the Land Appeal Court on the basis that the Land Court did not err in excluding Kurilpa 2 from consideration, in the circumstances found by the Land Court, when assessing the market value of the land taken. However, the Court of Appeal held that s 20 did not expressly require compensation for severance, injurious affection and disturbance to be assessed by reference to the date of acquisition. Loss or damage arising from severance, injurious affection or disturbance would often arise after the date of acquisition and should be assessed by reference to events that occur after the acquisition date.
Fryberg J (McMurdo P and Fraser JA agreeing) held that two points followed from the text of s 20 [30]:
The first is that value of the land taken is quite separate from damage caused by severance or injurious affection and disturbance costs. They are not elements of land value under the Act. The second is that, unlike compensation for the value of the land taken (Sub‑section 20(2)), compensation for severance, injurious affection and disturbance is not explicitly required to be assessed by reference to the date of acquisition. They are indirectly connected to that date by the requirement for causation ('damage … caused by', 'costs attributable to'), but the section gives no indication of the appropriate test of remoteness of damage. Whether that test is one of foreseeability by the hypothetical purchaser, as suggested in the Council's submission, need not be determined in this appeal. It is sufficient to observe that compensation for severance, injurious affection and disturbance is awarded in respect of matters which often will arise or be quantified after the taking.
After reviewing the case law, Fryberg J said that none of the cases limited the extent to which regard might be had to post‑resumption events (subject to proof of causation) where, as in the case of s 20, the applicable statute makes express provision for injurious affection, severance and disturbance damages [76]. His Honour then said that none of the cases he had discussed demonstrated that events subsequent to the date of acquisition can be taken into account in assessing market value [77].
In Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd,[8] the dispute between the parties involved the amount of compensation payable by the appellant to the respondent following the resumption of part of the respondent's land. It was a condition of the development of the land which the respondent retained after the resumption that the respondent make a transport infrastructure contribution to the appellant for the cost of roadwork external to the respondent's land. The appeal was concerned with whether the amount of the contribution to be taken into account in assessing compensation under s 20 of the Acquisition of Land Act 1967 (Qld) should be fixed (as the Land Court and the Land Appeal Court had held) as an estimate of the amount of the required contribution which the hypothetical seller and purchaser would have anticipated at the date of resumption or (as the appellant contended) by reference to the significantly smaller amount of the contribution which was actually required under an agreement made after the resumption.
[8] Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 96; (2015) 207 LGERA 448.
Fraser JA (Carmody CJ agreeing) noted that the appellant in Cidneo acknowledged that Mio Art was authority for the proposition that 'subsequent events are admissible in assessing injurious affection, severance, and disturbance damages' [33]. Fraser JA then observed that, by contrast, in assessing the value of the land resumed 'subsequent events may be taken into account only to the extent that inferences may be drawn from such events about the position at the time of the resumption' [33].
His Honour said that because the respondent did not claim that the contribution bore upon the value of the land taken, s 20(2) did not apply. Consequently, there was no restriction upon reference to post‑resumption events in assessing compensation. It followed that if the contribution requirement was compensable, then the amount of compensation could be assessed by taking into account the actual contribution that was required for the development of the retained land 'rather than an estimate of the likely contribution which would have been taken into account by parties to a hypothetical sale of the retained land on the resumption date' [38].
Fraser JA made these comments about the correct approach to the assessment of the allowable heads of compensation under s 20 [42]:
The choice of the appropriate assessment method in any particular case must be driven by the requirement to make a fair assessment of the allowable heads of compensation in accordance with s 20 … It was not contentious in this application that the before and after method is apt to include in the assessment both the value of the resumed land and other losses, including injurious affection and severance damage, but those various heads of compensation remain conceptually distinct. It is conventional for injurious affection and severance damage to be assessed with reference to events occurring after resumption. As soon as the relevant event occurred in this case (the agreement upon the required transport infrastructure contribution) [the appellant] contended that it should be used in the assessment of compensation. The evidence did not suggest that there was any substantial practical difficulty in taking the actual amount of the required contribution into account in the assessment of compensation, as s 20 allowed. Upon Mr Brett's evidence, doing so in this case would affect the amount of compensation significantly and a failure to do so would result in an unmerited windfall to [the respondent]. In those circumstances, a compensation method that did not take into account the actual amount would not fairly assess the compensation and should not have been used.
His Honour concluded that the Land Appeal Court had erred in law in rejecting the appellant's contention that the agreement upon the amount of the transport infrastructure contribution should be taken into account in determining the compensation to which the respondent was entitled.
In Cidneo, Dalton J referred to the use of the 'before and after method' in assessing compensation for the taking of land, including compensation where only part of an owner's land is resumed. Her Honour considered the comments of Spigelman CJ (Handley JA agreeing) in Mir Bros Unit Constructions Pty Ltd v Roads & Traffic Authority of New South Wales[9] about the 'before and after method' of assessing compensation [57]. Spigelman CJ had described the 'before and after method' as involving 'subtracting the market value of the residue land (i.e. the part of the property that was not acquired and remains the property of the [claimant]) from the market value of the entire property prior to acquisition' [10]. Dalton J then said [60]:
The before and after method is not anything more than a tool to assess compensation which s 20 of the Act allows. If it is used, it can only be used to assess that compensation which s 20 allows. There are no doubt cases where it is not apt to do so and, in such cases, the court must reject it as a proper method (Carson v Minister for Environment and Planning (1990) 70 LGRA 215, 221 per Hemmings J). Whether or not the method is apt in any particular case will depend upon the facts and evidence in that case. Moreover, there are cases in which, while as a matter of principle there could be no objection to the before and after method being used, the way in which a valuer has approached his or her task, including the inputs the valuer has used, might make that valuer's application of the before and after method inapt to assess s 20 compensation in that case (See Hieronymus v Minister for Education [1989] NSWLEC 62, pp 9 ‑ 10 per Hemmings J).
[9] Mir Bros Unit Constructions Pty Ltd v Roads & Traffic Authority of New South Wales [2006] NSWCA 314 [10] ‑ [11].
Her Honour noted that s 20(2) requires that the value of the land taken be assessed 'on the date when it was taken' but, as Mio Art recognised, matters otherwise relevant under s 20 may be assessed having regard to subsequent events [63].
Dalton J made these observations in relation to the assessment of damage caused by, relevantly, severance [85]:
Section 20 of the Acquisition of Land Act does not require that the total land before resumption, or the land retained after resumption, should be valued. It contemplates valuation of the land taken, and assessment of damage caused by severance, injurious affection, disturbance, and allowance for any enhancement. … The statute required that compensation for land taken be assessed as at the date the land was taken. It did not require that if a valuation was made of the englobo land, or the retained land, as part of a rolled‑up before and after exercise, that that valuation be at any particular date. Far less did the statute require that, if a cash flow method of valuing the englobo or retained land was adopted, the inputs to the cash flow be based on information obtain[ed] at any particular date. Given that Mio Art allows evidence of subsequent events to be used in assessing all matters relevant to s 20 compensation other than the value of land taken, there is no warrant to assume as a general rule that all information fed into that rolled‑up process must be known or foreseeable at the time of resumption. In any case, it is a matter for the valuers to use information which most accurately produces an assessment of the compensation required by s 20 of the Act.
In Secretary to the Department of Economic Development, Jobs, Transport and Resources v CRG Nominees Pty Ltd,[10] Emerton J considered relevant provisions of the Land Acquisition and Compensation Act 1986 (Vic) in the context of an appeal which alleged, relevantly, that in assessing the market value of resumed land under s 41(3) of the Act, the primary decision maker erred in law by failing to consider relevant facts that were known at the date of the decision, but not known at the date of acquisition.
[10] Secretary to the Department of Economic Development, Jobs, Transport and Resources v CRG Nominees Pty Ltd [2016] VSC 301.
Section 41 of the Act set out the general principles on which assessment of compensation was to be based. Section 41(1) provided:
Except as otherwise provided in this Part, in assessing the amount of compensation payable to a claimant in respect of an interest in land which is acquired under this Act, regard must be had to the following factors—
(a)the market value of the interest on the date of acquisition;
(b)any special value to the claimant on the date of acquisition;
(c)any loss attributable to severance;
(d)any loss attributable to disturbance;
(e)the enhancement or depreciation in value of the interest of the claimant, at the date of acquisition, in other land adjoining or severed from the acquired land by reason of the implementation of the purpose for which the land was acquired;
(f)any legal, valuation and other professional expenses necessarily incurred by the claimant by reason of the acquisition of the interest.
Section 41(3) made special provision for the assessment of compensation for market value where less than the whole of the land owned by the claimant was compulsorily acquired. Section 41(3) provided:
If less than the whole of the land in which a claimant's interest subsists is acquired or less than the whole of that interest is acquired, the market value of the acquired interest is the difference between the market value of the interest before the acquisition and the market value of the interest after the acquisition.
Emerton J noted that the appellant relied on numerous cases, commencing with the High Court's decision in Adelaide Fruit and Produce Exchange, to establish that 'severance and injurious affection will often (or even ordinarily) be evidenced by subsequent acts and events and that evidence of subsequent acts and events is admissible in support of such claims' [78]. Her Honour said that '[s]o much is uncontroversial', but 'none of the cases from jurisdictions other than Victoria dealt with a provision in the terms of s 41(3)' [78]. Her Honour held [74] ‑ [75]:
Having regard to the claim and the task mandated by s 41(3), the Tribunal was not required to treat [the respondent's] claim for the market value of the acquired land as requiring consideration of a separate claim for injurious affection under s 41(1)(e) of the … Act. There was no separate claim for injurious affection under s 41(1)(e), presumably because [the respondent] recognised that any impacts of the proposal on the retained land would be 'embraced' in its claim for market value.
That meant, in turn, that the Tribunal was not permitted to have regard to events that occurred after the date of acquisition, except insofar as they confirmed the foresight of the hypothetical purchaser ... While it remained open for [the respondent] to make a separate claim for injurious affection based on facts that became known after the date of acquisition, that is not what occurred. Insofar as the 'after' scenario included the effect of the proposal on the retained land, that effect was seen through the eyes of the hypothetical purchaser of the land on the date of acquisition.
An appeal from the decision of Emerton J was dismissed. See Secretary to the Department of Economic Development, Jobs, Transport and Resources v Avid Property Group Nominees Pty Ltd.[11]
[11] Secretary to the Department of Economic Development, Jobs, Transport and Resources v Avid Property Group Nominees Pty Ltd [2017] VSCA 136; (2017) 53 VR 490.
I turn to the proper construction of s 241(7)(a) of the LA Act.
Section 241(1) provides, relevantly, that in determining the amount of compensation (if any) to be awarded for an interest in land taken under pt 9, 'regard is to be had solely to the matters referred to' in s 241.
By s 241(2) read with s 241(1), relevantly, in determining the amount of compensation (if any) to be awarded for an interest in land taken under pt 9, '[r]egard is to be had to the value of the [taken] land … assessed as on … the date of the taking'.
The focus of s 241(2) is upon the value of the taken land.
Section 241(2) expressly states the date as on which the value of the taken land is to be assessed (that is, as on the date of taking).
By s 241(7)(a) read with s 241(1), relevantly, if the fee simple in the taken land is taken from a person who is also the holder in fee simple of adjoining land, in determining the amount of compensation (if any) to be awarded for an interest in land taken under pt 9, 'regard is to be had to the amount of any damage suffered by the claimant … due to the severing of the land taken from that adjoining land'.
The focus of s 241(7)(a) is upon any damage suffered by the claimant due to the severing of the land taken from the adjoining land. The object of s 241(7)(a), as conveyed by the text of the provision, is that the claimant should receive compensation under s 241(7)(a) in a sum which will put the claimant in the same position it would have been in, in respect of the adjoining land, if the land taken had not been severed from the adjoining land. The fundamental concept is that the claimant should be compensated for any damage suffered by the claimant due to the severance of the land taken from the adjoining land.
Section 241(7)(a) does not expressly state the date as on which the amount of any damage suffered by the claimant, due to the severing of the land taken from the adjoining land, is to be assessed.
Section 241(7)(a) requires that any damage suffered by the claimant be 'due to' the severing of the land taken from the adjoining land. The expression 'due to' connotes a causal nexus. It requires that the alleged damage suffered by the claimant be caused by or attributable to the severing of the land taken from the adjoining land.
As Edelman J noted in Lenz [237], the words 'damage suffered … due to', in s 241(7)(a), introduce issues of causation which can permit recovery of subsequent losses. Accordingly, subsequent events of damage caused by or attributable to the severing of the land taken from the adjoining land are relevant to the assessment of compensation for severance, unless those events are too remote or not within the scope of s 241(7)(a). See Mio Art [30]; Lenz [240]; Cidneo [32] ‑ [33], [57], [60], [63], [85]. Neither s 241(7)(a) nor any other provision of the LA Act requires that severance damage be assessed solely on the basis of information known or in existence at the date of taking. Evidence of events that have occurred since the date of the taking, which are relevant to whether the claimant has suffered damage due to the severing of the land taken from the adjoining land, may be taken into account (unless those events are too remote or not within the scope of s 241(7)(a)).
The claimant bears the onus of establishing, on the balance of probabilities, that the nature of the claimant's alleged damage has been caused by or is attributable to the severing of the land taken from the adjoining land. The claimant also bears the onus of establishing, on the balance of probabilities, the amount of the alleged damage that has been caused by or is attributable to the severing of the land taken from the adjoining land.
If the claimant and the acquiring authority are unable to agree upon the amount of compensation (if any) payable by the acquiring authority to the claimant under s 241(7)(a) for alleged severance damage suffered by the claimant, and the claimant commences an action for compensation against the acquiring authority pursuant to s 221(1)(a) of the LA Act, then the court must determine at the trial of the action the nature and amount of the claimant's damage (if any) that has been caused by or is attributable to the severing of the land taken from the adjoining land.
If the claimant commences an action for compensation against the acquiring authority pursuant to s 221(1)(a), then at the trial of the action, evidence is admissible of events that have occurred since the date of the taking (unless those events are too remote or not within the scope of s 241(7)(a)) if the evidence is relevant to the court's determination of the nature and amount of the claimant's damage (if any) that has been caused by or is attributable to the severing of the land taken from the adjoining land.
The nature of the damage suffered by a claimant, within s 241(7)(a), may include, in a particular case, diminution in the value of the adjoining land 'due to' the severing of the land taken from the adjoining land. At the trial of an action for compensation pursuant to s 221(1)(a), the claimant and the acquiring authority may adduce evidence of events, including evidence of events that have occurred since the date of the taking, which are relevant to whether the adjoining land has been diminished in value 'due to' the severance and the amount of any such diminution in value (unless those events are too remote or not within the scope of s 241(7)(a)).
If a claimant alleges that it has suffered damage, within s 241(7)(a), because the value of the adjoining land has been diminished 'due to' the severing of the land taken from the adjoining land, any reduction in value of the adjoining land is determined by comparing:
(a)the value of the adjoining land, at its highest and best use in its unaffected state (that is, without taking into account the severance), at the date of taking the taken land; and
(b)the value of the adjoining land, at its highest and best use in its affected state (that is, taking into account the severance), at the date of taking the taken land.
In determining each of the values referred to at [75(a) and (b)] above, evidence of relevant events that have occurred up to and including the date of taking the taken land is admissible and, in addition, evidence of relevant events that have occurred after the date of taking the taken land is admissible (unless the subsequent events are too remote or not within the scope of s 241(7)(a)). See Mio Art [30]; Lenz [237] ‑ [240], [274] ‑ [275], [308], [325]; Cidneo [32] ‑ [33], [57], [60], [63], [85].
Evidence of events that have occurred up to and including the date of taking, and evidence of events that have occurred after the date of taking, will be relevant if those events could rationally affect (directly or indirectly) the assessment of either or both of the values referred to at [75(a) and(b)] above.
So, Mr and Mrs Bakota will have suffered damage, within s 241(7)(a), due to the Taken Land being severed from the Remaining Land if, relevantly for the purposes of this appeal, the value of the Remaining Land, at its highest and best use in its unaffected state (that is, without taking into account the severance), at the date of taking the Taken Land, exceeded the value of the Remaining Land, at its highest and best use in its affected state (that is, taking into account the severance), at the date of taking the Taken Land.
Evidence of relevant events that occurred after the date of taking the Taken Land was admissible at the trial (unless the subsequent events were too remote or not within the scope of s 241(7)(a)) in determining:
(a)the value of the Remaining Land, at its highest and best use in its unaffected state (that is, without taking into account the severance), at the date of taking the Taken Land; and
(b)the value of the Remaining Land, at its highest and best use in its affected state (that is, taking into account the severance), at the date of taking the Taken Land.
Ground 1: the pleadings at the trial
Mr and Mrs Bakota's statement of claim was amended on numerous occasions before the trial. Ultimately, their pleading was embodied in a further amended substituted statement of claim dated 24 June 2022 (the statement of claim). This pleading alleged, relevantly and in effect:
(a)As at 23 January 2012 (being the date of taking) rezoning of the whole of Mr and Mrs Bakota's land (including the Remaining Land) to a residential/commercial purpose could have been achieved 'within a 5 ‑ 7 year time frame' (para 9).
(b)The whole of Mr and Mrs Bakota's land as at 23 January 2012 and thereafter the Remaining Land had the potential for a higher and better use, namely residential subdivision, but could still have been used as a market garden 'while waiting for all necessary approvals to occur to achieve residential subdivision and sale' (the Deferral Period) (para 11).
(c)Following resumption of the Taken Land and the construction and operation of the public work, Mr and Mrs Bakota 'have suffered or will suffer … damage to the [Remaining] Land' (para 58(e)).
(d)The compulsory resumption of the Taken Land and the construction and operation of the public work has resulted in 'damage and reduction in value to the Remaining Land' (para 60).
(e)Mr and Mrs Bakota claimed compensation for damage to the Remaining Land, pursuant to s 241(7)(a) and (b) of the LA Act, in the sum of $2,159,691 (para 2 of the prayer for relief).
The City of Wanneroo's defence was amended on numerous occasions before the trial. Ultimately, its pleading was embodied in a ninth further amended defence dated 11 August 2022. This pleading alleged, relevantly and in effect:
(a)As to paras 9 and 11 of the statement of claim, it is highly likely that the Remaining Land will ultimately be rezoned to a zoning that permits residential subdivision; the period of time necessary to wait for rezoning, subdivision and all other approvals necessary before the Remaining Land can be subdivided and offered for sale (that is, the Deferral Period) as at 23 January 2012 (being the date of taking) was '12 to 14 years' (paras 7BA and 8(f)).
(b)As to paras 58(e) and 60 of the statement of claim, the City of Wanneroo admitted that, following resumption of the Taken Land and the construction and operation of the public work, Mr and Mrs Bakota have suffered damage to the Remaining Land; alleged that any damage to the Remaining Land is caused 'by way of severance or injurious affection'; alleged that the Deferral Period of '12 to 14 years allows for the resolution of any sewer servicing issues applicable to the Remaining Land and for the resolution of any servicing or planning issues arising from any servicing, environmental or other constraints relating to Lot 9004'; and alleged that Mr and Mrs Bakota must prove that the losses they have claimed meet each requirement for compensation under s 241(7) of the LA Act (paras 43 and 45).
(c)As to para 2 of the prayer for relief in the statement of claim, the City of Wanneroo admitted that compensation due to Mr and Mrs Bakota under pt 10 of the LA Act as a result of the taking order includes a component reflecting 'injurious affection and/or severance', but alleged that 'the quantum of this component is $125,729' (para 46(c)).
Ground 1: Mr and Mrs Bakota's opening submissions at the trial
Mr and Mrs Bakota's opening written submissions at the trial in relation to their severance claim under s 241(7)(a) of the LA Act were as follows:
(a)The public work, namely the widening and realignment of Lenore Road, had caused the Remaining Land to be severed and landlocked for the purposes of its highest and best use, namely residential development.
(b)After the resumption of the Taken Land, the Remaining Land had no road frontage from which access would be permitted for residential development in contrast to its regular rectangular shape with access to Mary Street before the resumption.
(c)The only way Mr and Mrs Bakota will be able to obtain access to the Remaining Land for residential development will be through the neighbouring Lot 9004 to the east, when and if the owner of Lot 9004 decides to develop and only if that owner agrees (a matter over which Mr and Mrs Bakota have no control).
(d)Although the Remaining Land is within a western catchment for sewer connection, all of the neighbouring land to the east, including Lot 9004, will be within another catchment to the northeast and that connection to those easterly lots will not occur for a substantial number of years. Further, the intervening land, moving from the connection in the northeast in a westerly direction (and ultimately reaching Lot 9004), contains substantial land holdings, each of which will have to develop and connect before the next property to the west may develop and connect.
(e)Mr and Mrs Bakota's valuation expert, Mr Chapman, has estimated, conservatively, that the Remaining Land will not be able to have a sewerage connection for six years and has applied that deferral period to the before value of the whole of Mr and Mrs Bakota's land to arrive at a calculation of $1,339,704 as to the damage suffered by Mr and Mrs Bakota due to the Remaining Land being landlocked. However, the damage may be substantially greater.
(f)The land between Lot 9004 and the sewerage connection to the northeast contains a number of 'lifestyle lots' where the owners may not necessarily wish to subdivide and develop. Consequently, a sewer connection to Lot 9004 may be years, if not decades, away.
(g)Even if all other things are equal, the owner of Lot 9004 would not agree to the building of a road connection to the Remaining Land until the owner has secured subdivisional approval for Lot 9004 so as not to prejudice the subdivision of that lot by building a road in a position that would compromise the layout of a subdivided Lot 9004.
(h)In addition, commercial reasons dictate that the owner of Lot 9004 would defer building a road connection to the Remaining Land until the subdivision of Lot 9004 had been effected and the subdivided lots had been substantially sold.
(i)If, for whatever reason, the Remaining Land can never be developed for residential purposes, Mr and Mrs Bakota have made an alternative claim based upon the Remaining Land's highest and best use as rural and, in that case, their claim under s 241(7)(a) is for $2,920,594.
(j)The Remaining Land has consequently suffered significant and substantial severance damage which has been largely dismissed by the City of Wanneroo. The City of Wanneroo's expert valuer, Mr Zucal, has assessed Mr and Mrs Bakota's combined claim in relation to severance and injurious affection under s 241(7)(a) and (b) at $142,799 using a seriously flawed 'before and after' approach.
Ground 1: the City of Wanneroo's opening submissions at the trial
The City of Wanneroo's opening written submissions at the trial in relation to Mr and Mrs Bakota's claim for severance damage under s 241(7)(a) of the LA Act were as follows:
(a)The essential question is whether the Remaining Land fell in value as a result of the Taken Land having been taken.
(b)The City of Wanneroo denied that the public work caused the Remaining Land to be severed and landlocked for its highest and best use as alleged by Mr and Mrs Bakota.
(c)According to the City of Wanneroo, the relevant restraint as a result of the public work is that a future residential subdivision of the Remaining Land would need to find access through a neighbour's land onto Mary Street or Lenore Road.
(d)Although residential subdivision of the Remaining Land will not be approved without access to a gazetted road being planned, that access could be through Lot 9005 (to the west) or Lot 9004 (to the east).
(e)On Mr Chapman's concept of the highest and best use, the Remaining Land sits in limbo for the deferred period of around six years while Mr and Mrs Bakota await the readiness of the owner of a neighbouring lot to proceed with residential development. Mr Chapman calculates the value of the alleged loss by applying a 7.5% rate for six years. Mr Chapman's concept of delay should fall away in light of the expert engineers (Mr Bowyer for Mr and Mrs Bakota and Mr Highman for the City of Wanneroo) having agreed at a conferral process on 2 October 2020 that it may be possible to subdivide the southern portion of Lot 9004 (that is, after or with the Remaining Land) if road access from Mary Street was permitted within Lot 9004 (which the engineers agreed is likely) and the southern portion (that is, between about a third and a half) of Lot 4 could drain into the existing gravity sewer catchment to the west (which is possible with some filling and retaining walls).
(f)The court should prefer evidence of what is known over speculation of what might happen when post‑taking evidence is admissible, as it is with s 241(7).
(g)In the present case, the East Wanneroo District Structure Plan (EWDSP) final version, released in August 2021, shows that over 10 years after the resumption of the Taken Land on 23 January 2012, the Remaining Land is still zoned Urban Deferred under the Metropolitan Region Scheme and Rural Resource under the City of Wanneroo's District Planning Scheme No. 2.
(h)Further, the EWDSP shows that the strategic planning intent is for the district planning to show how the services would be brought to the district, and the local planning would show how they would connect through each precinct.
(i)As the Water Corporation's planner, Mr Coombes, explains, more detailed planning can only occur once the cell‑level structure planning progresses.
(j)Mr Chapman's contention that the taking of the Taken Land has caused an additional six year delay in the development of the Remaining Land due to access difficulties has not been borne out.
(k)That follows because, notwithstanding Mr Chapman's assessment that the highest and best use for the subject land will be urban development, even on Mr and Mrs Bakota's planning, that use is dependent upon rezoning, finalisation of structure planning and securing a development approval.
(l)Mr and Mrs Bakota plead that the whole of their land could have been used for market gardening while waiting for all the necessary approvals for urban development. On that basis, the land continues to have economic value and the Remaining Land will be used productively and profitably for market gardening during the deferral period. The income derived from market gardening during the deferral period must be offset against any delay damage. Further, the deferral period is not wasted time, but time during which the requisite intervening steps can be undertaken. Even if Mr Chapman's assessment of severance damage has a foundation, his calculation is greatly inflated because he disregards the interim value of the Remaining Land.
(m)Road access is necessary for the Remaining Land to be subdivided. However, there is no reason why Lot 9004 need only allow access once Lot 9004 has services ready for the development of Lot 9004 in its entirety. The owner of Lot 9004, Jazna Pty Ltd (Jazna) has demonstrated an intention to enter into agreements that are to its profit. Jazna owns Lot 9005 to the west and Lot 9004 to the east of the Remaining Land in addition to Lots 5 and 6 further east. The clear inference is that Jazna is assembling land for development. It would be adverse to Jazna's interests for the Remaining Land to remain undeveloped amidst its own land holdings. The proper inference is that Jazna will either agree to grant access for a joint development or, more likely, will purchase the Remaining Land from Mr and Mrs Bakota in order to subdivide and develop a coordinated wider area. It is exceedingly unlikely, indeed irrational, that Jazna would hold out to prevent the Remaining Land being developed. Rather, it is likely that Jazna would be ready either to purchase or allow access for the Remaining Land once Jazna has commercial terms that are sufficiently attractive. This need not be when Jazna is ready to carry out the whole of its own development.
(n)This is apparent from the engineering conferral on 2 October 2020 when Mr Bowyer and Mr Highman agreed to add $221,000 to the development costs for the Remaining Land, as the cost of road access across Lot 9004, and also agreed that the southern third up to a half of Lot 9004 could share sewerage capacity with the Remaining Land because it would be appealing for Jazna to accept a $221,000 road when it is able to develop (presumably after subdividing) the lower part of Lot 9004.
(o)In summary, according to the City of Wanneroo, the alleged delay does not arise because it is not proven that Lot 9004 will be developed six years later (at least its southern third or up to a half may be developed at the same time), the Remaining Land has an interim value that must be accounted for, and there is every reason to believe that Mr and Mrs Bakota will negotiate for an access road through one of Jazna's properties (Lot 9004 or Lot 9005).
(p)The taking of the Taken Land did not cause six years of delay. Indeed, the taking did not cause any delay.
(q)Mr Chapman's evidence and contentions in support of a claim for severance damage have no basis.
(r)Further, Mr Chapman's formulation of an alternative severance claim on the basis of 'no urban potential' lacks any factual basis. Mr Chapman is the only expert who contends that the Remaining Land might not be rezoned for urban development. Even Mr Chapman concedes it is only a 'worst case scenario' that the Remaining Land has no urban potential. He merely posits the 'worst case scenario' to 'book end' the scenarios which could be encountered. In any event, the concept of 'urban potential' properly describes something likely but not certain. Thus, the 'worst case scenario' that Mr Chapman describes, if valid (which the City of Wanneroo does not admit), is properly to be valued by way of a discount for uncertainty.
(s)Mr and Mrs Bakota's severance claim based upon delay is untenable in both of its forms.
Ground 1: Mr and Mrs Bakota's closing submissions at the trial
Mr and Mrs Bakota's closing written submissions at the trial in relation to their claim for severance damage under s 241(7)(a) of the LA Act were as follows.
The practical manifestation of Mr and Mrs Bakota's severance damage claim was the landlocking of the Remaining Land which made any future access to the Remaining Land for residential subdivisional purposes completely dependent on the timing and implementation of development on Lot 9004.
Every possible solution to that problem is attended by such significant uncertainty and delay in realising the residential subdivisional potential of the Remaining Land that the only realistic conclusion is that the highest and best use of the Remaining Land is Rural. Alternatively, Mr and Mrs Bakota's severance damage claim is put on the basis of Mr Chapman's evidence that the value of the Remaining Land should be determined upon the assumption of a six year deferral period.
Although the difficulties in obtaining access to the Remaining Land were caused by the public work, the parallel planning processes which were not affected by the public work must be considered.
In the 'after scenario' Mr and Mrs Bakota's planning expert, Mr Hajigabriel, gave evidence that, based on the City of Wanneroo's own timetable, approval for the subdivision of the Remaining Land could occur by 2024. However, at that time, unless the access issues have been resolved, the Remaining Land will still be unable to be subdivided because Mr and Mrs Bakota will be unable to establish that its subdivided lots would have access to a gazetted road. That would be a necessary requirement to satisfy conditions of subdivision.
The evidence indicates that the difficulties in accessing the Remaining Land will be unresolved for a considerable period of time.
Mr and Mrs Bakota noted the City of Wanneroo's argument that access to the Remaining Land may be achieved through either Lot 9004 or Lot 9005.
As to potential access through Lot 9005, a new road across Lot 9005 would be required to enable access through Lot 9005 and a roundabout would be required to connect the new road to Lenore Road in the west. The cost of the new road and the roundabout would have to be funded by a landowner, most likely the owner of Lot 9005 and/or the owner of the Remaining Land. The cost of the new road and the roundabout would be so significant that it is highly unlikely that the new road and the roundabout would or could be built. In any event, there is no evidence that the owner of Lot 9005 would cooperate or permit access.
As to access through Lot 9004 and Lot 5, there are significant difficulties with the proposition that access to the Remaining Land may occur through Lot 9004 and Lot 5. Those difficulties have the potential to delay access to the Remaining Land indefinitely.
The majority of Lot 9004 and all lots to the east of Lot 9004 are within a different sewer catchment from the Remaining Land.
Mr Highman put forward a plan indicating four possible routes to sewer any and all of the Remaining Land, Lot 9004 and Lot 9005. However, all of those routes depend upon:
(a)the catchment having sufficient spare capacity;
(b)the Water Corporation's agreement in circumstances where the Water Corporation has not been approached in relation to any of the possible routes;
(c)the chosen route being financially viable for the owner of the lot who would have to fund the connection;
(d)the land contours permitting the connection; and
(e)the ability to cross the steel water main which runs down the western side of Lenore Road.
The best that can be hoped for is that the southern part of Lot 9004 could be connected to the western catchment, but this proposal raises further obstacles. Any access road through Lot 9004 to Lot 5 would be at least 15 metres in width and may potentially be wider. It may be necessary to subdivide both Lot 9004 and Lot 5 in order to build the access road. Lot 5 is burdened significantly with a Bush Forever site which is a constraint on development and will cause delays in dealing with any application to subdivide.
There is evidence that all lots to the east of the Remaining Land (apart from, perhaps, the southern part of Lot 9004) will have to be serviced from the new (but as yet unbuilt) Jandabup Pump Station. However, delays associated with the development of the precinct in which the Remaining Land is located are likely to be extensive and caused Mr Chapman to extend his deferral period from six years to 45 years.
Jazna, the current owner of Lot 9004, agreed to purchase Lot 9004 under a contract dated 17 March 2005. The contract was subject to a condition that, on subdivision of Lot 9004, Jazna would convey the three lots delineated on the plan annexed to the contract and would pay for new services to the new house which has been built on this land (the homestead lots). Mr Bowyer and Mr Highman gave evidence that it would be difficult, if not impossible, to connect a sewer (even if capacity is available) to the homestead lots because they are low lying. However, on subdivisional approval, Jazna is contractually bound to transfer the homestead lots to the previous owners, Mr and Mrs Klarich, and to connect a sewer to their newly built house. Unless and until Jazna can resolve this problem with the connection of a sewer, no access road can be built to enable the Remaining Land to have access to a gazetted road. Even if a subdivisional approval could be obtained to build the access road, the amount of the southern part of Lot 4 available for subdivision, after the extraction of the homestead lots and the road, may be so small as to make any development unviable. Further, any subdivision of Lot 5 to accommodate such a road raises the possibility that Jazna may have to cede, free of cost, as a condition of subdivision, the Bush Forever site on Lot 5. This, in turn, raises questions about the viability of developing Lot 5 merely to accommodate a road.
Ultimately, the City of Wanneroo's case is built on nothing but speculation as to what Jazna or any other owner of Lot 9004, Lot 9005 and Lot 5 may or may not do at some indeterminate point in the future. Although the owner or owners of those lots may facilitate access, it is equally, if not more likely, that they may take 'a long position' and seek to bring Mr and Mrs Bakota to the point where they may have to sell their land cheaply as the only alternative left to them to realise the Remaining Land. The only other purchaser in the market may be another market gardener. That would be a direct consequence of the public work which has denied Mr and Mrs Bakota access to a gazetted road, a right they had prior to the taking of the Taken Land and the public work.
All of the delay and uncertainty which attends the after scenario value of the Remaining Land means that the highest and best use of the Remaining Land in the after scenario can only be Rural.
Mr Chapman quantified his Rural basis conclusions on value on p 12 of his August 2022 report (exhibit 35). In cross‑examination, Mr Chapman was taken to the agreed conferral result with Mr Zucal (the valuation expert called by the City of Wanneroo) of $26 per square metre improved rural value. Consequently, Mr Chapman amended his severance calculation, based on a deferral period of five to seven years in the unaffected scenario, to $2,836,872 (ts 827 ‑ 828). This calculation encompasses the value of the improvements on the Remaining Land and allows for a continuing market garden operation.
Alternatively, Mr Chapman has calculated the value of the Remaining Land upon the assumption that the access problem will delay the subdivision of Lot 9004 for a period of six years beyond the time when Lot 9004 could have been subdivided but for the access issue. His final severance calculation on that assumption, which was based on the affected scenario, was $1,315,345 (ts 641).
Ground 1: the City of Wanneroo's closing submissions at the trial
The City of Wanneroo's closing written submissions at the trial in relation to the severance claim under s 241(7)(a) of the LA Act were as follows.
The City of Wanneroo has admitted that the taking of the Taken Land may result in the Remaining Land facing a potential constraint if it were to be subdivided into residential lots; that future potential constraint being that access would need to be arranged through one or both of neighbouring Lot 9004 and neighbouring Lot 9005.
The evidence does not establish that any landlocking of the Remaining Land has occurred or necessarily will occur.
Mr and Mrs Bakota advance two claims, one valuing the Remaining Land at urban value and the other valuing the Remaining Land at rural value.
The planning evidence is to the effect that when the Remaining Land obtains urban zoning in the local scheme, no future lots will be landlocked.
Mr and Mrs Bakota's assertion is that the Remaining Land is nevertheless effectively cut off because it will only have the ability to be subdivided when one of the owners of the neighbouring lots through whose property an access route is planned decides to subdivide. First, the need to wait until the owner of a neighbouring lot subdivides in order to commence urban subdivision on the Remaining Land is not damage. It is merely an 'ordinary happenstance'. The reality is that services are brought from the urban front through each successive subdivision. Indeed, services are routinely brought through roads and road reserves. Secondly, the anticipated potential constraint is entirely theoretical in that there might be delay or there might not. Mr Chapman's evidence in support of the severance claim is afflicted by the problem that the anticipated potential constraint has not happened. The severance claim must fail because, at the time of the trial, none of the potential constraint described by Mr Chapman in evidence was 'damaged suffered' within s 241(7)(a).
The City of Wanneroo accepted that for a residential subdivision on the Remaining Land to proceed, there will first need to be a partial subdivision of either or both of Lot 9004 and Lot 9005. However, no subdivision in the Mary Street precinct can occur before a local structure plan is approved because the approval of a local structure plan is an effective prerequisite to subdivisional approval. The local structure plan, when approved, will identify intended road access through all of the proposed new lots including access through the proposed lots on the Remaining Land.
The reality is that as at August 2022 (when the trial began), more than 10 years after the taking of the Taken Land, the Remaining Land is still zoned Urban Deferred under the Metropolitan Region Scheme and Rural Resource under the City of Wanneroo's District Planning Scheme No. 2.
Mr Hajigabriel's evidence was that the taking of the Taken Land had not constrained the ability to subdivide the Remaining Land.
Mr Chapman said in examination‑in‑chief that 'the development potential of the subject land may be deferred so far that the underlying value of the land may revert to rural' (ts 658). Mr Chapman could not say that it had happened. He could not say that it would happen. He merely said that it may happen. However, Mr Chapman maintained that damage would be suffered if and when subdivision occurred.
Many things could change so that no delay of the type referred to by Mr Chapman will ever occur. For example:
(a)the planning for the entire area may change again;
(b)a single owner could assemble multiple lots;
(c)multiple owners could agree to progress a subdivision together;
(d)a new environmental constraint could be discovered; or
(e)a new servicing constraint could be discovered.
In short, it is speculative to assert that the Remaining Land will suffer delay in subdivision 'due to its neighbours'.
Jazna owns both neighbouring lots, namely Lot 9004 and Lot 9005.
The evidence establishes that:
(a)Jazna has demonstrated an intention to enter into agreements that are to its profit.
(b)Jazna owns Lot 9005 to the west and Lot 9004 to the east of the Remaining Land plus Lot 5 and Lot 6 further east. It can be inferred from those circumstances that Jazna was (or perhaps still is) assembling land for development.
(c)Jazna provides updates on planning developments as of course to Mr and Mrs Bakota.
(d)An agreement between Jazna and the former owners of Lot 9004 reveals a future intent by Jazna to subdivide Lot 9004.
(e)The subdivision of the Remaining Land would benefit Lot 9004 by bringing services to its border and has the potential to benefit the Remaining Land.
(f)Subdivision of the Remaining Land in conjunction with Lot 9005 may assist Jazna in sharing the cost of the new road and the under road sewerage connection.
(g)If the subdivision of Lot 9005 is expensive, then amortising the cost over a joint development of the Remaining Land, Lot 9005 and as much of Lot 9004 as can be developed by gravity sewerage may assist Jazna to subdivide viably.
(h)The evidence does not reveal the present intention of Jazna in respect of Lot 9005 or any change to Jazna's previous intention in respect of Lot 9004.
(i)It is proper to infer that Jazna intends to develop Lot 9004 and Lot 9005 on commercial terms and has a willingness to adapt its plans as circumstances require.
(j)As to the new road, on the existing facts, road access is planned for the Remaining Land, being the new road. The new road is shown on EWDSP final version, released in August 2021. The new road is therefore not attributable to the taking of the Taken Land (which occurred on 23 January 2012) and is not attributable to the public work (the widening and realignment work having been undertaken in 2014). The new road is planned and will provide access to the Remaining Land. The local structure plan must be consistent with the EWDSP. The new road will form part of the local structure plan which will show access roads throughout the suburban neighbourhood of the Mary Street precinct (unless there are significant planning justifications which persuade the Western Australian Planning Commission to move or remove the road). The fact that the planning for the new road is in its infancy is irrelevant. It is speculative to say either that the new road will not be developed or that it will not be developed over the whole of the length shown in the EWDSP.
As to Lot 9005 specifically, the new intersection has not been planned sufficiently to know whether it will be staggered left in/left out, traffic lights or a roundabout. The new road has not been planned sufficiently to know whether its costs will be shared in a developer contribution plan (DCP) or not. Ms Butterworth gave evidence that it would be reasonable to consider the cost of the intersection as a shared cost within a local DCP (ts 524). Even if the intersection cost is not shared within a local DCP, the better reasoned cost estimate is that of Mr Highman, being closer to $1.5 million for the intersection and the new road. For a development shared between the Remaining Land and Lot 9005 (and potentially also part of Lot 9004) the cost is unlikely to be prohibitive. Mr Chapman agreed in evidence that if economic access could be gained through the new road, then the Remaining Land would not suffer the delay he described in exhibit 31 (ts 730).
As to sewer servicing delays, Mr Chapman's opinion that the owner of Lot 9004 will delay developing (even partially) as it awaits the sewer connection does not account for a range of evidence.
The evidence establishes that:
(a)One third up to a half of Lot 9004 can be sewered by gravity.
(b)Although the existing agreement between Jazna and Mr and Mrs Klarich requires the creation of new lots for the homestead lots, it is open to the parties to negotiate to allow for the initial subdivision in which the homestead lots are a balance lot retaining the septic sewer.
(c)Mr Highman's sewer concept planning shows how he considers that it could be demonstrated to the Water Corporation that the entirety of Lot 9004 could be gravity sewered (save for the homestead lots).
(d)Mr Highman has set out a concept plan for sewer servicing in respect of the whole of the Mary Street precinct: this is the type of conceptual planning that would have to be agreed to by the Water Corporation, but once agreed would form the basis of the servicing information to lift the Metropolitan Region Scheme Urban Deferment and to support the Mary Street precinct's local structure plan.
Mr Chapman did not dispute that if alternative sewer connections were demonstrated then this would change his analysis. In particular, if the engineers and the planners demonstrated that part of Lot 9004 could be sewered sufficiently to permit a subdivision that included road access to the Remaining Land, and a commercial agreement could be reached with Mr and Mrs Klarich, his analysis would change (ts 728 ‑ 729).
The evidence did not establish any reason why the owner of Lot 9004 needed to have sewer available to the whole of Lot 9004 before the owner would allow access through its land. What is needed is road access. The terms under which access would be agreed are unknown.
Mr and Mrs Bakota pleaded that their land could have been used for market gardening while awaiting all necessary approvals. The Remaining Land continues to have economic value and will be used productively during the deferral period. Mr Chapman could and should have assessed the farm's income from the Remaining Land and offset that income against any delay damage. Further, the deferral period is not wasted time, but time that is necessary for the requisite intervening steps to be undertaken.
The planning evidence was that the Remaining Land had urban potential. Mr Chapman was the only expert who contended that the Remaining Land might not be approved for urban development. The 'no urban' severance damage calculated by Mr Chapman has no basis on the facts.
Mr Chapman failed to consider the potential value of a joint commercial enterprise with a neighbour. Mr Chapman also failed to investigate other potential uses of value. Mr Chapman also failed to account for the value of the Remaining Land through giving up land for valuable uses to allow for other land to be developed. Even if a lack of access is proven, Mr Chapman's contention that this results in 'rural' value fails because he has not properly taken into account alternative valuable uses.
On Mr Chapman's urban value concept of the higher and better use, the Remaining Land sits in limbo for a deferral period of around six years while the owners await the readiness of the neighbouring Lot 9004 (or Lots) to proceed with development. Mr Chapman regards this time as a loss and calculates the value of the alleged loss by applying a 7.5% rate for six years.
The City of Wanneroo contends that this loss does not arise because:
(a)it is not proven that Lot 9004 will be developed six years later;
(b)the Remaining Land has interim value that must be accounted for; and
(c)even if Lot 9004 is fully developed later, it does not follow that access through Lot 9004 to Mary Street would not be permitted.
Mr Chapman's contention that the taking of the Taken Land causes an additional six year delay in the development of the Remaining Land due to access difficulties has not been made out.
Ground 1: the trial judge's reasons
The trial judge's reasons and conclusions in relation to Mr and Mrs Bakota's severance claim under s 241(7)(a) of the LA Act were as follows.
His Honour said that severance damage is 'the loss of value in the remaining land due to the severing of the land taken' [36]. His Honour made these comments about the manner in which compensation for severance damage should be assessed [38] ‑ [40]:
A before and after valuation method assesses all the advantages and disadvantages in comparing the original and the remaining land. It does not distinguish between severance and injurious affection (Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of NSW [2005] NSWLEC 467, [14] ‑ [20]; Mir Bros v RTA NSW [2006] NSWCA 314 [10] ‑ [12]).
The courts have found the before and after method to be the best for assessing compensation for expropriation of a portion of land (such as for a road) (Kelly v Western Australian Planning Commission [2006] WASC 208 [70]; Western Australian Planning Commission v Kelly [2007] WASCA 160 [27] (McClure [sic] JA); Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56 [75]).
For severance and injurious affection:
(a)subsequent losses are recoverable and post-taking evidence is admissible (Lenz [237] - [241]; McKay [No 7] [376]); and
(b)the court should prefer known facts over predictions (McKay [No 7] [373] ‑ [376] applying Cairns City Council v CMB No 1 Pty Ltd (1997) 96 LGERA 306).
Before turning to the relevant passages identified in ground 4, it is necessary to make a general observation regarding the learned trial judge's attribution of his reasons to the submissions advanced on behalf of the Bakotas. It is evident from the overview of the principles set out above that a trial judge's attribution of reasons to the submissions of a party may be a factor in determining whether there has been a failure to exercise jurisdiction. Early in the learned trial judge's reasons, his Honour stated the following:[244]
For the reasons that follow, I have found primarily for the Bakotas. These reasons are based primarily on the Bakotas submissions. I thank the parties for their detailed submissions.
[244] Primary decision [14].
Whilst the learned trial judge did not specify which parts of his reasons were taken (often word for word) from the Bakotas' submissions, it is sufficiently clear that in an overall sense he attributed his reasons to those submissions.
It is convenient to turn now to the seven instances the subject of ground 4. Although a number of the paragraphs of the trial judge's reasons referred to in ground 4 are already set out in these reasons, for convenience and ease they have been reproduced in the remarks below.
In ground 4(1), the City's complaint is directed to [94] ‑ [95] of the learned trial judge's reasons:
The documentary evidence demonstrates that, not only the Bakotas, but a substantial number of land owners in the locality (which included market gardeners), were participating in steps to progress the rezoning of the locality at the time of the taking. Those landowners were prepared to fund and did fund the preparation of advice and planning initiatives from Planning Solutions and the preparation of an environmental report by PGV Environmental, all of which demonstrate that. The attitude of the valuation expert for the City, Brian Zucal, that market gardeners would not be interested in progressing urban zoning, is misplaced.
The landowners group became less active in mid-2012 - following the taking on 23 January 2012. The daughter of the Bakotas, Ms Angela Lawrence, gave evidence that this was because of servicing and access issues. Mr Hajigabriel confirmed with Evershed in 2012 that it was the sewer connection which caused the planning delay. However, Ms Lawrence confirmed that earlier there had been discussion with Planning Solutions about bypassing the step of the district structure plan. (references omitted)
Those paragraphs were taken, largely word-for-word with some minor variations, from the Bakotas' written closing submissions. The paragraphs appear in the section of his Honour's reasons dealing with the question of how long development of Lot 3 would have taken in the 'before' scenario. The City submits that this passage is a further reflection of the trial judge's confusion about the 'before' and 'after' scenarios because these facts relate to the 'real' world, and therefore the 'after' scenario, whereas the trial judge referred to them in his consideration of the 'before' scenario.
The effect of the trial judge's findings is that, as the impact of the realignment of Lenore Road came to be appreciated, enthusiasm for the redevelopment of Lot 3 or Lot 9003 waned. That is so on the trial judge's findings, even if the facts referred to by the trial judge occurred in the 'real' world. The facts do not undermine the trial judge's findings about the 'before' scenario as it was presented to him on the basis of the opinions of Mr Hajigabriel and Ms Butterworth. As explained above, the precision and clarity between the concepts of the 'before'/unaffected scenario and the 'after'/affected scenario that the City seeks to illuminate in this appeal are not reflected in the way the matter was presented to the trial judge.
Given the manner in which the case was presented to the learned trial judge by both parties, these paragraphs do not reflect a failure by the trial judge to consider the evidence and/or the law.
In ground 4(2), the City's complaint is directed to [296] and [345] of the learned trial judge's reasons:
[296] Having regard to the problems with subdivision, cost and access identified above, I conclude that the only realistic option is to value Lot 3 (Lot 9003) on the basis that its retained value is Rural.
[345]As long as Lot 9003 is landlocked, it has suffered delay in subdivision, due to its neighbours. It has suffered actual damage.
In this aspect of ground 4, the City submits that the learned trial judge gave inadequate consideration to the matter because the evidence that emerged from the planners, including the Bakotas' planner Mr Hajigabriel, was that the Local Structure Plan could and likely would provide for road access for both Lots 9003 and 9004 and vehicular access to subdivisional lots. Yet, contrary to that evidence the learned trial judge concluded that Lot 9003 had become 'landlocked'. The City referred to both the evidence of Mr Hajigabriel and the valuer Mr Chapman who accepted that road access to Lot 9003 would necessarily be accommodated in a Local Structure Plan and that it could therefore not be said that the realignment of Lenore Road had prevented or prejudiced the ongoing planning for the redevelopment of Lot 9003.
In that context, the City points to the wording of [213] ‑ [221] of the learned trial judge's reasons. It may first be observed that those paragraphs are not referred to in ground 4(2). Be that as it may, it is plainly the case that the learned trial judge's wording borrows heavily from the Bakotas' written closing submissions. The wording that follows the opening words of [214] to the end of [221] is identical to the Bakotas' written submissions at trial. Those opening words are significant, 'As the Bakotas contended …'. That is, the learned trial judge prefaced his copying of the Bakotas' submissions with the clear indication that his Honour was accepting the position contended for by the Bakotas.
More significantly, the evidence relied upon by the City to demonstrate the deficiency in the trial judge's consideration, fails to demonstrate any inadequacy in the trial judge's reasoning. The relevant evidence of Mr Hajigabriel and Mr Chapman was directed to progress in the preparation and approval of the local planning structure. It is clear that notwithstanding the concessions the experts made about that, they nevertheless regarded the land as effectively quarantined from the prospect of development for some decades due to the challenges of obtaining and implementing the subdivision approval. The trial judge in effect accepted that position. The trial judge's adoption of the Bakotas' position, even if expressed in precisely the same language as the Bakotas' submissions, does not demonstrate that the trial judge failed to give proper consideration to the matter.
In ground 4(3), the City's complaint is directed to [287] of the learned trial judge's reasons:
While the owners of those lots may facilitate access, it is equally, if not more, likely that they may take a long position and seek to bring the Bakotas to a point where they may have to sell their land cheaply as the only alternative left to them to realise the asset. Ultimately, the only other purchaser in the market may be another market gardener and that is a direct consequence of the public work which has denied the Bakotas access to a gazetted road - a right they enjoyed prior to the public work.
Once again that passage is taken word for word from the Bakotas' written closing submissions. The written submissions for the City appear on appeal simply to complain that the trial judge adopted the Bakotas' submission.[245] The matter was not taken further in oral submissions. The complaint appears to reflect the substance of ground 3 which was dealt with above. For the same reasons, I do not accept that the passage demonstrates that the trial judge failed to give consideration to the relevant evidence and/or law.
[245] WAB 23 [70].
In ground 4(4), the City's complaint is directed to [291] of the learned trial judge's reasons:
Indeed, even Mr Zucal says that Lot 9003 may only be of use as an offset by other developers needing public open space.
The learned trial judge's words were again lifted and copied from the Bakotas' written closing submissions. The reference in those submissions, and at [291] of the trial judge's reasons is to a passage from Mr Zucal's oral evidence at trial. The City submits this is a further illustration of the trial judge's failure to give proper consideration because the submission his Honour adopted misrepresents Mr Zucal's position.
The evidence of Mr Zucal referred to in the Bakotas' closing submissions and adopted by the trial judge was given during the re‑examination of Mr Zucal by counsel for the City.[246] Counsel for the City asked Mr Zucal about his answer to a question from the trial judge. In that passage,[247] the trial judge was referring to Mr Zucal's assumption that the adjoining owner would be interested in purchasing Lot 9003. The trial judge remarked that it might also be the case that the adjoining owner would adopt the strategy to 'starve the Bakotas out' and not make a commercial offer to purchase Lot 9003. The trial judge in effect invited Mr Zucal to give his view of the value of Lot 9003 in light of that prospect. Mr Zucal said that in that case:[248]
[T]he land in the after scenario, being landlocked, would have potential for an offset POS [public open space] scenario at urban values, which is quite often the case. So the point I'm making is that in the after scenario, in my opinion the land would certainly be worth a lot more than $21.00 per square metre compared to the value that Mr Chapman placed on the property in the after scenario.
[246] ts 829.
[247] ts 821.
[248] ts 829.
In re-examination, counsel for the City referred to Mr Zucal's answer to the trial judge's question and asked 'by what mechanism are you referring to?', Mr Zucal explained:[249]
The site would be zoned urban obviously, and it would be landlocked. There could well be - because the S1 structure plan area is such a large area, 8000 plus hectares, there would be possibilities of offset purchases by other developers in the precinct to set aside for POS as their contribution towards POS.
[249] ts 829.
By that evidence, it is plain that Mr Zucal was expressing the view that even if contrary to his assumption, Lot 9003 remained landlocked, it would still have an urban value in excess of its rural value, because it would have value as a contribution to the requirement of public open space in the development of the larger area. He therefore disagreed with Mr Chapman that Lot 9003 only had rural value.
The context of the learned trial judge's adoption of the Bakotas' submission regarding that evidence in his Honour's reasons is as follows. His Honour set out at some length the planning, logistical and economic barriers to the development of Lot 9003. He then turned to the possible attitudes of neighbouring property owners noting that the City's more positive view of what Jazna would likely do was based on 'speculation', but that it was equally if not more likely that the neighbouring property owners would 'take a long position'. The trial judge then observed that in the after scenario it may be that a market gardener would be the only prospective purchaser noting that the neighbours had made no offer to purchase since 2007. The trial judge then recorded Mr Chapman's view that Lot 9003 has only rural value by reason of all the forgoing problems.[250]
[250] Primary decision [290].
In that context, the learned trial judge then referred at [291] to Mr Zucal's evidence about the value of the Lot 9003 as public open space.
It is evident from the transcript and the reasons for decision that the trial judge was plainly aware of the view of the City and Mr Zucal that Lot 9003 had value as an attractive proposition to neighbouring owners as part of their own urban development and could not therefore be assessed on the basis that it was 'landlocked'. The trial judge rejected that view concluding that in all the circumstances, Lot 9003 was in effect landlocked for subdivisional purposes and its value fell to be assessed on that basis.[251] The learned trial judge noted Mr Zucal's view that even if, contrary to his position, Lot 9003 was indeed landlocked, it would still have a value in excess of its rural value as public open space. In context and when read with the reasons as a whole, the learned trial judge's intention by that remark is apparent: if Lot 9003 is landlocked as the trial judge found it to be, then even Mr Zucal does not contend that it enjoys an ordinary urban value, but rather a value that reflects its limited utility as an offset for open public space.
[251] Primary decision [5], [105], [296], [299], [345].
It may be accepted that the copying of the Bakotas' submission at [291] does not add to the clarity or logical force of his Honour's reasons. However, when read fairly and in the context of the reasons as a whole, it falls well short of demonstrating that the trial judge failed to give adequate consideration to the matter.
In ground 4(5), the City's complaint is directed to [297] ‑ [298] of the learned trial judge's reasons:
Mr Highman's evidence on possible alternative sewer connections is fanciful and without any basis that they could be achieved or that there is sufficient spare capacity to enable them in the western catchment. The email of Brett Coombes of the Water Corporation in 2020 is quite clear that any capacity is heavily caveated by a number of factors which can give no certainty as to timing or indeed whether they will happen at all.
In giving this evidence, Mr Highman departed from his agreed 2020 position with Mr Bowyer and has not been able to give any explanation for that departure. His evidence should also be rejected.
These two paragraphs too are, with minor variations, taken word‑for‑word from the Bakotas' written closing submissions. In its written submissions on appeal, the City added [202], [130], [131] and [299] to its complaint. Those paragraphs are also taken largely from the Bakotas' written closing submissions. The City contended that the paragraphs demonstrate the trial judge's failure to consider the evidence because Mr Highman did not resile from the position adopted in his joint statement with Mr Bowyer without explanation. His position changed shortly before he gave his evidence at trial in his supplementary report of 23 August 2022 because he was responding to Mr Bowyer's second supplementary report of 17 August 2022. Yet, the trial judge paid no regard to that fact. Reference was made to aspects of this evidence at [404] above.
The City's complaint is to some extent justified in the sense that the trial judge's criticism of Mr Highman is perhaps unduly harsh in its failure to explain that Mr Highman proffered an explanation for his change of position as outlined at [404] above. The trial judge makes no reference to Mr Highman's explanation. However, the suggestion that this aspect of the reasons demonstrates the trial judge's failure to deal with the evidence cannot be sustained. As is evident from the transcript of Mr Highman's cross‑examination by counsel for the Bakotas, Mr Bowyer's second supplementary report did not address the issue of the agreed sewer connection for Lot 9003 in the 'after' scenario.[252] Mr Highman changed his position on that issue because his report of 23 August 2022 proffered an entirely new conceptual model for the sewerage infrastructure of Lot 9004 and Mr Highman therefore came to the view that the best point of sewerage connection for Lot 9003 when developed in coordination with Lot 9004 (as distinct from the development of Lot 9003 independently) was at a different location.
[252] Appeal hearing, 26/08/2022, ts 405 - 406.
It is plain that the learned trial judge did not accept Mr Highman's conceptual model and indeed, given its uncertainties and limitations, regarded it as fanciful. Moreover, the trial judge also plainly took the view that there was no reason Mr Highman's model could not have been advanced at the time of his conferral with Mr Bowyer. It was not apparent why the August 2021 publication of the EWDSP would have altered the position in that regard. For that reason, the trial judge was critical of Mr Highman's change of position. The City may consider that the learned trial judge was less than fair to Mr Highman in his comments, but there is nothing in his Honour's remarks to demonstrate that he failed to have regard to the evidence.
In ground 4(6), the City's complaint is directed to [303] of the learned trial judge's reasons:
In that regard, Mr Chapman's Rural valuation in respect of the after scenario for Lot 9003 should be accepted, particularly as the improved rate he applies of $26 per square metre is one agreed by both valuers.
Once again, this passage is taken is taken verbatim from the Bakotas' closing submissions. In its written submissions on appeal, the City added [301] and [302] of the trial judge's reasons which are also taken from the Bakotas' written closing submissions.[253] This is the same error complained of in ground 3(d). For the reasons explained in relation to that ground, I do not accept that, properly understood the remarks demonstrate that the trial judge did not consider the evidence.
[253] WAB 26 [80].
In ground 4(7), the City's complaint is directed to [117] and [284] of the learned trial judge's reasons:
[117] Mr Bowyer's evidence relating to sewer delays arising from the time it would take for Water Corporation infrastructure to develop, does not apply to the portion of the Lot 9004 that can be gravity sewered. However, planning delays in dealing with the Bush Forever part of Lot 9004 would delay the resolution of the sewer issue. Servicing must follow the planning. Until the planning process achieves rezoning, the relative difference in servicing times are moot.
[284] Even if a subdivisional approval could somehow be obtained to build the road, the amount of the southern part of Lot 4, that is, south of the Bush Forever site, available for subdivision after the extraction of the homestead lots and the road may be so small as to make any development unviable. The City has brought no evidence on the viability of such a proposition.
Paragraph [117] is not an adoption of the wording of the Bakotas' closing submissions. Paragraph [284] is an adoption of the Bakotas' written closing submissions except that the trial judge has inserted the words 'south of the Bush Forever site'. The City points out that the evidence indicated there were no Bush Forever areas on Lot 9004. The City submits this is a further demonstration of the trial judge's failure to consider the evidence.
The Bakotas accept that there are no 'Bush Forever' sites on Lot 9004 and to that extent, the trial judge was mistaken. The Bakotas say the error is not material and does not undermine the trial judge's reasoning. In my view, while it is plain that the trial judge was in error as to the existence of 'Bush Forever' areas on Lot 9004, his Honour's intent is fairly evident. The trial judge was referring to the evidence of Mr Bowyer explaining the obstacles to the development of sewerage infrastructure on Lot 9004. As set out at [401] above, one of those obstacles was the 'Bush Forever' portions 'near the north-eastern corner' of Lot 9004.[254] Notwithstanding the error, the reasoning of the trial judge is undisturbed. It falls well short of demonstrating that the trial judge constructively failed to perform his function.
[254] ts 348.
None of the seven instances identified by the City demonstrate that the trial judge failed to consider the evidence and/or the law. In addition, when read as a whole, it is evident that the learned trial judge considered and engaged with the evidence and the submissions from both parties. The trial judge's copying and pasting of submissions was not limited to the closing submissions of the Bakotas. The whole section from [19] - [47] of his Honour's reasons is copied directly from the City's written closing submissions.[255] The fact that the learned trial judge copied from both parties' submissions militates against the City's central contention in ground 4.
[255] BAB 237 - 241.
It would be fair to say that the significant degree of copying and pasting was regrettable, and as the ACT Court of Appeal said, it is an approach to be strongly discouraged. It is also fair to observe that there are some passages of the reasoning that may be less than entirely clear. Nevertheless, there is no basis for a conclusion that there was a constructive failure to exercise jurisdiction. Further, his Honour's reasons were not legally inadequate. His Honour made an independent decision on the whole of the evidence and the law.
Ground 4 cannot be accepted.
Ground 5
Ground 5 only arises in the event that any one of the first four grounds is successful. In the circumstances ground 5 does not arise.
Conclusion
For the reasons set out above, I would dismiss the appeal.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TCG
Associate to the Honourable President Buss
30 APRIL 2025
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