Cornell as Executor of the Estates of Jack Sydney Cornell and Jessie Veronica Cornell (Dec) v Town of East Fremantle
[2003] WASC 163
•29 AUGUST 2003
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: CORNELL as Executor of the Estates of JACK SYDNEY CORNELL and JESSIE VERONICA CORNELL (DEC) -v- TOWN OF EAST FREMANTLE [2003] WASC 163
CORAM: HASLUCK J
HEARD: 12-16 AUGUST, 10-13, 16 & 17 DECEMBER 2002
DELIVERED : 29 AUGUST 2003
FILE NO/S: CIV 1114 of 1997
BETWEEN: DENIS JAMES CORNELL as Executor of the Estates of JACK SYDNEY CORNELL and JESSIE VERONICA CORNELL (DEC)
Plaintiff
AND
TOWN OF EAST FREMANTLE
Defendant
Catchwords:
Compensation - Claim for injurious affection - Whether land injuriously affected by the making of a town planning scheme containing heritage provisions - Nature of an event sufficient to activate a claim for compensation - Whether refusal of an application for special approval to develop within the heritage area sufficient to activate the claim - Scope of delegated powers under the Metropolitan Region Scheme - Whether restrictions upon development amounted to setting aside the land for a public purpose - Application for valuation principles to claim for injurious affection
Legislation:
Commercial Arbitration Act 1985, s 31
Interpretation Act 1984, s 18
Metropolitan Region Town Planning Scheme Act 1959, s 36
Supreme Court Act 1935, s 32
Swan River Trust Act 1988, s 49, s 50, Pt V
Town Planning & Development Act 1928, s 11, s 12
Western Australian Planning Commission Act 1985, s 20
Result:
Compensation awarded
Category: B
Representation:
Counsel:
Plaintiff: Mr P P McCann
Defendant: Mr D W McLeod & Mrs L E Rowley
Solicitors:
Plaintiff: Kyle & Company
Defendant: McLeods
Case(s) referred to in judgment(s):
Arcus Shopfitters Pty Ltd v Western Australian Planning Commission (2002) 125 LGERA 180
Blair & Perpetual Trustees Co Ltd v Curran (Adam's Will) (1939) 62 CLR 464
Bond Corporation Pty Ltd v Western Australian Planning Commission (2000) 110 LGERA 179
Bronzel v State Planning Authority (1979) SASR 513
Cairns City Council v CMB No 1 Pty Ltd (1997) 96 LGERA 306
Commonwealth v Milledge (1953) 90 CLR 157
Cornell v Town of East Fremantle (1977) 95 LGERA 290
Enoka v Shire of Northampton (1996) 15 WAR 483
Folkestone v Metropolitan Region Planning Authority [1968] WAR 164
Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290
McCathie v Federal Commission of Taxation (1944) 69 CLR 1
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Spencer v Commonwealth (1907) 5 CLR 418
Temwood Holdings Pty Ltd v Western Australia Planning Commission (2002) 25 WAR 484
The City and Suburban Group Pty Ltd v The City of Stirling (TPAT Appeal No 37 of 1998)
The Commonwealth of Australia v Verwayen (1990) 170 CLR 394
University of Western Australia v City of Subiaco (1980) 52 LGRA 360
Wines v Shire of Harvey [2000] WASCA 39
Case(s) also cited:
Boans Ltd v Kwinana Hub Shopping Centre [1982] WAR 41
Brewarrana Pty Ltd v Commissioner of Highways (1973) 6 SASR 541
Brewer v Brewer (1953) 88 CLR 1
Brown Bros (Marine) Holdings Pty Ltd v New South Wales Land & Housing Corp (1991) 72 LGRA 50
Clissold v Perry (Minister for Public Instruction) (1904) 1 CLR 363
Commonwealth v Arklay (1952) 87 CLR 159
Cornell v Town of East Fremantle (TPAT Appeal No 4 of 1994)
Crompton v Commissioner of Highways (1973) 5 SASR 301
De Ieso v Commissioner of Highways (1981) 27 SASR 248
Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (Receivers & Managers Appointed) (in liq) (1993) 43 FCR 510
Glass v Ralph [1966] WAR 91
Glinski v McIver [1962] AC 726
Hawkesbury City Council v Sammut (2002) 119 LGERA 171
Jackson v Goldsmith (1950) 81 CLR 446
Jones v Shire of Perth [1971] WAR 56
Kuligowski v Metrobus (2002) 26 WAR 137
Melbourne Corporation v Barry (1922) 31 CLR 174
Minister for Indigenous Affairs v Catanach [2001] WASC 268
Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370
R v Turner [1975] QB 834
Shire of Swan Hill v Bradbury (1937) 56 CLR 746
Trandos v Western Australian Planning Commission (2001) 117 LGERA 257
United Construction Pty Ltd v Maketic [2003] WASCA 138
Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
Williams v Town of Claremont [1976] WAR 125
Wong v Minister of Water Resources (1985) 55 LGRA 431
HASLUCK J: The plaintiff, Denis James Cornell, sues in his capacity as the executor of the Wills of Jack Sydney Cornell and Jessie Veronica Cornell. The plaintiff is the owner of land known as 91 Preston Point Road. He claims compensation for injurious affection against the defendant, the Town of East Fremantle. It will be useful to begin by providing an overview of the matters in issue.
Overview
The land known as 91 Preston Point Road formerly consisted of Lots 23 and 24 lying within the municipality of East Fremantle. The property in question is situated in the Preston Point area of the Town of East Fremantle and is about 16 kilometres south‑west of the Perth central city. The property occupies a prominent riverfront location being separated from the Swan River by Riverside Road and enjoys views in a south‑westerly through to north‑westerly direction of the Swan River, looking towards the North Fremantle area.
The property is located on the western side of Preston Point Road and extends through to Riverside Road which runs along the western side or rear boundary of the site. It is a short distance north of the intersection of Pier Street and Preston Point Road in the East Fremantle locality.
At all material times the property has been part of a continuous riverside escarpment extending from East Street to the Leuwin Barracks to the north. The limestone cliff and escarpment in the vicinity of the property are covered with trees and vegetation and are thought to be a place having regional significance and heritage value. Users of the river have a panoramic view of the escarpment and can see areas of development interspersed with unspoiled sections. Motorists using Riverside Road are presented with an impression of an unbroken escarpment which gives the area a distinctive and pleasing appearance.
On 9 July 1982 the defendant promulgated a town planning scheme known as Town of East Fremantle Town Planning Scheme No 2 (the "EF Scheme"). The EF Scheme provided that certain designated places should be regarded as places of heritage value and be retained in their present state. Further, if the Council refused its consent to development with a view to preserving a heritage place it was open to the owner of the place to advance a claim for injurious affection.
Towards the end of 1993 the registered proprietors of the subject property applied for development approval in respect of a proposed two storey residence to be erected on the western side of the subject property, fronting Riverside Drive, in accordance with plans prepared by Spiccia & Co. This application was refused on 20 December 1993 on grounds that were arguably referable to heritage considerations and the notion that the proposed development would have an unacceptable impact on the river landscape.
The owners of the land proceeded to make a claim for compensation for injurious affection. The claim gives rise to various factual and legal issues concerning the effect of the relevant planning controls.
A central issue arises as to how the decision of the Council to refuse the application should be characterised as a matter of law. The plaintiff says that the application was to construct a residence on vacant land with the result that the defendant was at liberty to and did in fact deal with the application pursuant to its town planning scheme. Thus, the plaintiff is entitled to compensation pursuant to the provisions of the EF scheme.
The defendant says that because the application related to improved land, being land affected also by the provisions of the Metropolitan Region Scheme, approvals had to be obtained from authorities other than the defendant. This meant that the defendant's purported refusal of consent was not sufficient to activate the injurious affection provisions of the local town planning scheme.
The parties recognised that in the event of it being held (consistently with the plaintiff's case) that the plaintiff was entitled to claim compensation for injurious affection under the EF Scheme, this would give rise to a further important issue, namely, whether s 12 of the Town Planning and Development Act 1928 (the "TPD Act"), which provides that compensation is not recoverable in certain cases, has the effect of barring the plaintiff's claim.
The effect of s 12, broadly described, is that injurious affection claims are not allowable in respect of town planning provisions which are designed to improve the amenity of the area by providing for parks or open spaces or sanitary conditions. More particularly, s 12(2a)(b)(i) provides that land shall not be deemed to be injuriously affected by reason of any provision which deals with any of the matters specified in cl 10 of the First Schedule unless the scheme permits development on that land for no purpose other than a public purpose.
The defendant's stance was that this latter provision in particular barred the plaintiff's claim because the subject land, if affected at all, was affected by a provision concerning heritage, being one of the matters mentioned in cl 10 of the Schedule. Compensation was not recoverable, for it could not be said that in the present case the development was only permitted on the land for a public purpose. The true position was that development could be carried out for a private purpose, albeit subject to certain restrictions reflecting a public interest in the preservation of the area.
There were many other subsidiary issues bound up in the case including the question of what amount should be allowed to the plaintiff in the event of the defendant's liability for injurious affection being established.
As to the latter issue, namely, the quantum issue, the plaintiff contended, in essence, that the making of the EF Scheme had either removed the right to develop the subject land by prohibiting development or had effectively foreclosed the possibility of any residential development being undertaken on the western, or affected, part of the subject land. This was clear from the nature of the restrictions set out in the development table and, in any event, was demonstrated by the fact that the plaintiff's proposed residential development had been refused. Hence, the compensable loss was essentially the difference between the value of the land without restrictions and the value with restrictions. Having regard to expert evidence relied upon by the plaintiff, this was said to be $600,000.
Inevitably, both parties presented a substantial body of expert evidence bearing upon the value of the subject property as at 20 December 1993 and as to other constituents of the claim for injurious affection.
Before turning to the relevant application for approval to commence development, it will be useful to look at the planning controls applicable to an application for development in the circumstances of the present case.
Metropolitan Region Scheme
The Metropolitan Region Scheme or "MRS" is the legal basis for regional planning in the Perth metropolitan area. It defines broad land use zones such as urban, rural and industrial and reservations such as parks and recreation and important regional roads. The MRS was gazetted in 1963 and has been amended from time to time to reflect changing needs. The MRS comprises the text setting out the provisions of the Scheme together with the Scheme map.
Clause 10 of the MRS provides that no development of any land within the metropolitan region shall be commenced without the written approval of the responsible authority in addition to any other approval that may otherwise be required by law.
Part III of the MRS deals with the development of land in zones. By cl 24(1), approval of the responsible authority is required for the development of land within areas zoned under Pt III of the Scheme. Importantly, for present purposes, cl 24(2)(b)(i) provides that approval is not required under the MRS if the development consists of the erection on a lot of a single dwelling house which will be the only building on that lot.
Clause 24(2) provides also that approval under Pt III does not exempt the person to whom the approval is granted from the requirement, if any, to obtain approval under any other law. This suggests that cl 24(2)(b)(i) concerning the development of vacant land cannot be viewed in isolation from other planning controls.
Part IV of the MRS deals with the obtaining of approval to commence development. Clause 28, which lies within Pt IV, provides that an application for approval to commence and carry out development shall be submitted to the local authority in whose district the land is situated. Clause 29 is in these terms:
"(1)The local authority to which such an application is duly submitted shall, within seven days of that application, forward it to the Commission for determination where ‑
(a)the application is for the development of land -
(i)reserved under Part II of this Scheme;
(ii)part of which is in the management area within the meaning of the Swan River Trust Act 1988; or
(iii)which abuts that management areas, [see note] or
(b)the application is for the development of land zoned under Part III of the Scheme and the subject of a notice under Clause 32 of the Scheme or a declaration under section 35C of the Scheme Act, or
(c)the application is for development of land (not coming under paragraph (a)(iii)) abutting reserved land and is not of a type which may be determined by that local authority under delegated powers conferred by the Commission pursuant to section 20 of the State Planning Commission Act 1985.
(2)In the case of any application for the development of land zoned under Part III of the Scheme and not required by the terms of sub‑clause (1) to be determined by the Commission, the local authority shall determine the application in accordance with the power delegated by the Commission under the State Planning Commission Act 1985.
(3)Where under sub‑clause (1) a local authority forwards an application to the Commission, the local authority may, within 42 days of the date of receipt of the application by local authority (or such further period as the Commission may allow) make recommendations for consideration by the Commission in respect of the application."
It was common ground at the trial that as at 20 December 1993, being the date on which the defendant purported to refuse the application for development, the subject property was zoned urban under the MRS. A certified copy of the MRS map of the vicinity shows that on its western and southern boundaries the subject property abuts reserved lands marked as parks and recreation.
A Notice of Delegation gazetted on 2 December 1992 established that the State Planning Commission, acting pursuant to s 20 of the Western Australian Planning Commission Act 1985 and cl 32 of the MRS, delegated its powers and functions with respect to the MRS as set out in the notice.
It appears from cl 3 of the Notice of Delegation that the Commission resolved to delegate to local authorities its functions as responsible authority in respect of the determination of all applications for approval to commence development within their respective districts on land zoned under Part III of the Scheme except where, inter alia, the Commission advises the local authority that an application should be determined by the Commission or where the local authority itself is of the opinion (and the Commission agrees) that the application should be so determined on the grounds that the proposal is of State or regional importance or in the public interest.
Clauses 7 and 8 of the Notice of Delegation read as follows:
"7.Development Abutting Swan River Trust Management Areas
(a)Any application abutting waters that are in the Management Area within the meaning of the Swan River Trust Act 1988, shall be referred to the Swan River Trust and then immediately forwarded to the Commission for determination.
(b)Any application abutting land that is in the Management Area, or in the opinion of the Local Authority is likely to affect waters in that Management Area, shall be referred to the Swan River Trust for comment and recommendation.
The Swan River Trust shall make its comments and recommendation within 30 days of receipt of the application. Where the recommendation is not acceptable to the Local Authority, then the application shall be forwarded immediately to the Commission for determination.
8.Development Abutting Other Reserves
Applications for development abutting land reserved for purposes other than regional roads are to be referred to the public authority responsible for that reserved land for comment and recommendation. In the case of land reserved for Parks and Recreation which is not vested or owned by another public authority, the application should be referred to the Department of Planning and Urban Development.
The Department or the public authority, as the case may be should provide any comment and recommendation within 30 days of receipt of the application and the Local Authority in determining applications shall have regard for that advice."
Clause 12 of the Notice of Delegation provided that nothing contained in the Notice should be construed as restricting the local authority from refusing an application for development that is prohibited by any provision of its Town Planning Scheme, or using discretionary powers contained in its Town Planning Scheme to refuse an application.
Swan River Trust
The functions and powers of the Swan River Trust are prescribed by the Swan River Trust Act 1988. Its functions include the co‑ordination of the other activities of other bodies that have functions in relation to the management area including the implementation of any general management strategy applicable to that area. Management area means the land and waters to which the Act applies being the areas (described in a general way) as the waters of the Swan River upstream of the Fremantle Port Authority boundary and the lands joining those waters that are reserved as parks and recreation areas under cl 12 of the Metropolitan Region Scheme. The area is defined more exactly on certain prescribed plans.
The Swan River Trust Act makes provision for the approval of applications for development and consultation with other authorities. Section 50 of the Swan River Trust Act requires ministerial approval to any development to which Part V applies.
A question arises in the present case as to whether the proposed development was a development to which Part V of the Act applied.
The plaintiff placed some reliance upon s 49(1) whereby Part V is said to apply to a development if it is proposed to be undertaken in the management area and no part of it is proposed to be undertaken on land or waters that are outside that area. The plaintiff's position was that while there was a designated management area immediately adjacent to the subject land, no part of the subject land was within the management area.
The plaintiff's stance was that none of the other amendments effected to the MRS by the Acts Amendment (Swan River Trust) Act 1988 had any relevance to the proposed development of a dwelling house on the subject land. For example, cl 30A of the MRS (added by the Act) which requires the WA Planning Commission to do certain things where an application for approval relates to development of land which is either part of the management area or abuts waters that are in the management area or is likely, in the opinion of the Commission, to affect waters in the management area could have no application to the circumstances of the present case.
Clause 30A is wholly dependent for its operation upon the existence of an obligation to make an application for approval under the MRS. The plaintiff's stance was that cl 24(2)(b)(i) of the MRS expressly provided that approval of the MRS was not required if the land was not the subject of a notice under cl 32 and the development consisted of the erection on a lot of a single dwelling house which will be the only building on that lot.
I pause to note that the plaintiff's expert, Mr Dix, took account of this stance and proceeded to carry out his valuation on the basis that the subject land did not fall within what might be termed the "zone of influence" of the Swan River Trust. This appears at page 6 of his report dated 30 July 1998. I will turn to the defendant's stance in due course. However, I note in passing that the defendant and its expert witnesses placed reliance upon the Trust policy DE3 which provides that for all residential land zoned urban under the MRS there shall be a development set back of 10 metres or 20 per cent of the average depth of the lot, whichever is the lesser, from the landward boundary of the Parks and Recreation reserve. This was said to preclude a development at the foot of the escarpment in the present case in accordance with the Spiccia plans.
East Fremantle Town Planning Scheme
The Town of East Fremantle Town Planning Scheme No 2 was gazetted on 9 July 1982. The general objects of the EF Scheme include to retain the district primarily as a residential area, to protect and enhance the environment, character and pleasantness of the district, to protect the significant places of heritage value within the district. The particular objects of the Scheme include to regulate new development to ensure that it occurs at a scale which is sympathetic with the character of the various environmental areas within the district.
Importantly, for present purposes, clause 1.3 provides that the EF Scheme is complementary to the MRS and the provisions of that Scheme shall continue to have effect.
Clause 2.1.1 creates several zones and areas within the Scheme area including a residential zone and an area described as places of heritage value. By cl 2.2.3 the development of land reserved by the MRS or of land abutting land so reserved requires the written approval of the Metropolitan Region Planning Authority under that Scheme. I note in passing, that the powers of the MRPA are now exercised by the State Planning Commission.
By cl 2.3.1 a Designated Development Table indicates the uses permitted within the various zones and areas. By cl 2.3.7 the relevant development standards are those specified in that Table. By cl 2.3.10 the policy statements in the Table are statements of general policy only; are not binding on the Council; and do not affect the obligation of the Council to consider the circumstances and merits of each particular case.
The policy statement applicable to places of heritage value states that the places described in Appendix V and situated on the lands shown as places of heritage value on the Scheme map are considered by the Council to be of historical, architectural, scientific, scenic or other value that should be retained in their present state or restored to their original state or to a state acceptable to the Council.
Clause 1, which follows this general statement, provides that a person shall not, without the special approval of Council, carry out any development in such places including (a) the erection, demolition or alteration of any building or structure and (b) clearing the land nor fell, lop, top or damage any tree or otherwise damage the place.
Clause 4 provides that where the Council refuses its consent to do any of the things just mentioned the owner of the place may, if the place is injuriously affected by the making of the Scheme, claim compensation for that injurious affection within a prescribed time, namely, within the time specified in cl 5.11.1. See Cornell v Town of East Fremantle (1977) 95 LGERA 290.
Appendix V, which provides a Schedule of Places of Heritage Value, consists of four columns being a code, the name of the place, the location (as shown on the Scheme map) and description. It now seems to be accepted by both parties that the western or lower portion of the subject property is a place to which the Schedule applies but it will be useful to look briefly at the details of this matter as an aid to understanding the way in which the heritage provisions operate.
The heritage provisions
It seems that prior to 1986 a landscape protection area in Appendix V, being Code 29, was described in the column "Location (as shown on Scheme Map)" as "Lot 6152 and Reserve No. 28163 Riverside Road commencing on north‑east corner of intersection with Pier Street, and extending north to include western edge of Lots Pt.23, Pt.24 and 5297." The site description was "A site comprising limestone cliff face, rock outcrops and natural vegetation; significant for its natural characteristics which should be protected from despoliation or the intrusion of development."
The subject property did consist of Lots 23 and 24 at that time and accordingly the "western edge" of the subject property was a place of heritage value.
In 1986, Amendment Number 6 to the EF Scheme was gazetted to provide that in respect of Code 29 the existing "Location" be deleted and the following substituted, namely, "Area indicated in map on east side of Riverside Road north of Pier Street, comprising western edges of Lot 5297, Lot 6152 and Reserve Number 28163".
The purpose of the amendment was to facilitate an arrangement between the Council and the State Housing Commission in respect of Reserve 28163 and Lot 5069. The consequence of the drafting, however, was apparently to exclude Lot 23 and 24 from the "Location" as defined by the text of the EF Scheme. Nonetheless, the Scheme map, which was part of the amendment, showed the western part of Lots 23 and 24 as still within the boundary of Area 29.
The Town Planning Appeal Tribunal eventually ruled in Cornell v Town of East Fremantle, Appeal No 4 of 1994 that the map had an overriding effect, and this view of the matter appears to have been subsequently accepted by the parties. I am of the same view and my reasoning will henceforth proceed accordingly.
I note also that the Tribunal appeared to accept (at pages 6 and 8) that the EF Scheme map, which was part of the Amendment, "shows clearly that the western portions of Lot 23 and 24 are still within the boundary of Area 29 - Landscape Protection Area".
This leads me to a further conclusion in regard to the present dispute, namely, that the western part of Lot 502 (being land on or below the escarpment to the west of the drainage easement), which is called the "affected land" in the plaintiff's statement of claim, lies within the Landscape Protection Area and is a place of Heritage Value.
Planning consent under the EF Scheme
Clause 5.1 of the EF Scheme deals with applications for planning consent and matters of administration. By cl 5.1.4 it is not necessary for an application for planning consent to be made in respect of certain works and uses including, by cl 5.1.4(e), the erection of a dwelling house upon a lot upon which no other dwelling house has been erected if the use of that lot for the purpose of a dwelling house is permitted by the Scheme and the relevant development standards and requirements of the Scheme are complied with. However, by cl 5.1.5(c), the Council's planning consent is required in respect of the excavation or filling of or other earthworks on land which change the natural contours of the land by more than 600 mm.
Clause 5.2.1 provides that the Council shall in the case of an application for permission to carry on a use marked "AP" in the Development Table, and may in the case of an application for permission to carry on a use marked "PS" in the Table, or in any other case in which application is made for its approval, give notice of the application to owners and occupiers of land within the area likely to be affected by the granting of the application. By cl 5.2.5 a resolution to grant special approval must be passed by an absolute majority of the Council.
Clause 5.3 sets out the matters to be considered by the Council in making its decision on applications for approval. Clause 5.4.6 provides that where the Council has not within 60 days of the receipt by it of an application for planning consent or special approval either conveyed its decision to the applicant or given notice of the application to owners and occupiers likely to be affected, the application shall be deemed to have been refused.
Cornell Purchase
Mr and Mrs Cornell purchased the property known as 91 Preston Point Road, East Fremantle in late 1981. As I have noted, at that time the property consisted of Lots 23 and 24.
A letter dated 6 November 1981 written by the law firm Parker & Parker on behalf of Mr and Mrs Cornell to the defendant raised certain enquiries concerning the subject property. The letter invited the Town Clerk to provide information concerning the property by annotating a form enclosed with the letter. That form included an item "Special matters considered advisable to be known to the Purchaser and/or Mortgagee of the premises".
The handwritten response from the defendant included an assertion that the dwelling was registered with the National Trust and appeared on the Council's list of heritage places. It was said also that the Riverside cliff face appeared on the Council's list of heritage places. A certificate under cl 42 of the MRS dated 3 December 1981 indicated that the whole of the land was zoned "urban" and abutted land reserved "parks and recreation" in the MRS on the southern boundary.
The MRPA gave approval to commence development to Mr and Mrs Cornell by letter dated 7 April 1982. The approval related to the construction of a new residence on what was then Lots 23 and 24 subject to a condition that no development was permitted and no fill or rubbish were to be deposited on land beyond 40 metres from the Preston Point Road boundaries of the lots. The defendant gave development approval for the demolition of the existing classified property on Lots 23 and 24. By letter dated 27 April 1982 Mr Cornell wrote to the defendant indicating that he intended to appeal the condition imposed by the MRPA on 7 April 1982 as it rendered 30 per cent of his land incapable of development.
On 4 March 1983 Mr and Mrs Cornell applied for a further approval to construct a new residence on Lot 23 on Preston Point Road. A copy of the relevant application was adduced in evidence. The application was made, as required by the MRS, on an MRS Form 1. The consent of the defendant to that application was recorded by a notification addressed to Mr and Mrs Cornell which was undated and was stated to be subject to the final approval of the MRPA.
The subsequent approval to commence development of the MRPA dated 22 March 1983 was granted subject to a different condition. A report on the defendant's files indicates that the proposed development was to be sited not more than 40 metres from Preston Point Road which explains why the earlier condition was not repeated. Importantly, at about this time steps were taken to have Lots 23 and 24 amalgamated to form a new Lot 500. A copy of the approval to amalgamate with sketch plan attached is dated 12 October 1983. As I have noted, notwithstanding a degree of ambiguity arising from an amendment of the EF Scheme in 1986, the western part of the new Lot 500 remained within the Schedule of Places of Heritage Value.
In or around 1987 Mr and Mrs Cornell applied for and obtained the closure of a right of way adjoining their property and thereafter acquired the same on the basis that in return they granted a drainage easement to the Town of East Fremantle.
Subdivisional Application
By application dated 21 January 1991 Mr and Mrs Cornell applied to subdivide Lot 500 into two lots comprising respectively 1,400 m2 and 990 m2. Their existing brick and tile house was located on the proposed lot of 990 m2 which subsequently became Lot 501 whilst the proposed vacant lot of 1,400 m2 subsequently became Lot 502.
A report prepared by Mr Dirk Arkeveld, then carrying out the combined functions of Planning Officer and Building Surveyor, and dated 31 January 1992, recommended approval of the application. By letter dated 21 February 1992 the defendant indicated that Council had no objection to the subdivision proposed. By letter dated 12 May 1992 the then Department of Planning and Urban Development confirmed that Lot 500 could be subdivided into two lots subject to conditions still to be fulfilled.
By letter dated 14 April 1994 John Giudice & Associates on behalf of Mr and Mrs Cornell applied to the Town of East Fremantle to clear Condition 3 relating to the division of Lot 500 into two lots. A few months later, by letter dated 13 June 1994, the Water Authority confirmed clearance in respect of the relevant condition. Diagram 86725 shows that the subdivision of Lot 500 into Lots 501 and 502 was approved by the then Department of Planning and Urban Development on 16 June 1994.
I pause to note that the approval dated 16 June 1994 is subsequent to the contentious refusal of consent to development on 20 December 1993 which gave rise to the present claim for injurious affection.
Put shortly, the formalities leading to the creation of the vacant lot known as Lot 502 were completed six months after the refusal of consent underlying the present claim. It is therefore open to the defendant to contend that the plaintiff's application for approval concerned a piece of land (Lot 500, as it then was) which was not vacant but, rather, land which should be regarded as improved land having regard to the presence of the Cornell residence on the south eastern corner of Lot 500 fronting Present Point Road.
Development Application
By letter dated 3 September 1993 Gibson & Gibson, solicitors on behalf of Mr and Mrs Cornell, wrote to the defendant indicating that their clients intended to apply for a "licence" to construct a single dwelling on the 1,400 m2 lot on the area west of the escarpment (the "Gibson letter"). There is acute controversy between the parties as to exactly what land was the subject of the application for planning consent and the subsequent refusal of consent. It therefore becomes necessary to look closely at the relevant sequence of events and related documents.
The Gibson letter commences by referring to "91 (Lot 500) Preston Point Road, East Fremantle". The solicitors say that they act for the "owners and occupiers" of the above property. They go on to say that they are instructed as follows:
"(a)Lot 500 is zoned under Town of East Fremantle Town Planning Scheme No. 2 as Residential Area 3 permitting Group Housing;
(b)an application by our clients to sub‑divide Lot 500 into two lots of 990 square metres and 1,400 square metres has been approved by your Council;
(c)an application by our clients to sub‑divide Lot 500 into four lots has been submitted to your Council for approval;
(d)your Council resolved at its meeting of 19th July, 1993 to defer a decision on the second application pending a report from its Works and Reserves Committee. It is noted that your Council may consider the East Fremantle escarpment as having some value that may be adversely affected by our clients' proposed sub‑division, more particularly the construction of residences on the portion west of the escarpment;
(e)our clients withdrew their second application following their recent meeting with Mr. G. Smith but propose now to apply for a licence to construct a single dwelling on the 1,400 square metre lot, on the area west of the escarpment.
It is hoped that your Council will approve our clients' third application immediately. The application is consistent with the current zoning of the land and represents a genuine attempt by Mr. And Mrs. Cornell to address Council's concerns whilst compromising their own rights which would permit them to develop up to two residences on the area west of the escarpment.
Council should be assured that our clients recognise the natural value of the escarpment and do not propose to cause any damage to it by their proposed development."
I pause to observe that various references in the letter, including the dual reference to the land in question being 1,400 square metres make it quite clear, with the benefit of hindsight, that the application related to the newly created (but not yet formally constituted) Lot 502 to the intent that the proposed new dwelling was to be built on the western part of the lot, and thus principally below the limestone escarpment.
Subsequent events
By letter dated 22 September 1993 the Town of East Fremantle wrote to the Department of Planning and Urban Development concerning the development application in question and indicating that the land abutted a parks and recreation reserve. By a letter of the same date the defendant wrote to the Swan River Trust indicating that a development application had been received to construct a residence on the escarpment and asking for comment.
A development application accompanied by plans dated 30 September 1993 was subsequently submitted to the defendant by Mr and Mrs Cornell for permission to construct a residence on land described as "Lot No 500" which was said to be vacant land.
As I have noted, the application arguably referred to the western section of what was about to become Lot 502, being land to the west of the drainage easement traversing Lot 502 on the upper level of the escarpment. The plans (prepared by an architect named Spiccia) suggest that the proposed residence would front Riverside Drive and lie below the cliff face. This would arguably involve an intrusion into the cliff face.
I digress briefly to note that an application for planning consent under the MRS is to be made on Form 1. The application form dated 30 September 1993 signed by Mr and Mrs Cornell is not on Form 1. It was an application for planning consent with reference being made at the top of the form to the EF Scheme.
The plaintiff's case at the trial before me was fought on the basis that, notwithstanding the reference in the relevant form to Lot 500, the application essentially concerned a proposal to develop the western part of the vacant land that was destined to become Lot 502, because the Council had previously approved the subdivisions of Lot 500 into Lots 501 and 502, albeit that certain formalities associated with the subdivision were not completed until six months later on 16 June 1994.
For ease of reference, I will continue to refer to the land known as 91 Preston Point Road as the subject property (comprising at different times either Lot 500 or, collectively, Lots 501 and 502). I will refer to the western part of Lot 502 upon which the proposed residence was to be constructed, which lies within the heritage area under the EF Scheme, as the "affected land".
The "affected land" was the term eventually adopted by the plaintiff in his statement of claim in order to distinguish the eastern part of Lot 502 lying above the escarpment which was not affected by the EF Scheme heritage policy from the western part of Lot 502 which was affected by the policy and upon which the proposed dwelling was to be constructed in accordance with the Spiccia plans (if planning consent could be obtained).
The progress of the application
The defendant's Town Planning Advisory Panel met on 5 October 1993. The minutes of the meeting reflect the Panel's reservations with regard to the Cornell development application under consideration. The minutes indicate that (a) the proposal to quarry into the limestone cliff face to create a building site was not acceptable; (b) impact of drainage on parks and recreation reserve was of concern; (c) retaining wall to the rear property was also unexplained; (d) impact of "hard line" between "proposed development and parks and recreation reserve" was most insensitive; (e) it was not appropriate to comment on the building as the proposal to develop the site was not consistent with proper planning.
The Swan River Trust conveyed its response to the development application by letter dated 8 October 1993. The Trust said that it could not formally consider the application until its next meeting on 20 October 1993 but, by way of a preliminary expression of views, said that the only acceptable building envelope would be to the rear of the 14 metre contour line. Further, the proposed site was not acceptable for various reasons including the application of the Swan River Trust policy concerning setback. The Trust's minutes dated 20 October 1993 recorded its subsequent resolution that the Cornell development application should be refused.
On 5 November 1993, in response to a query by the solicitors acting on behalf of Mr and Mrs Cornell, the Town Planner, Mr Greg Smith, advised that the EF Scheme map indicated that the subject land was located within a place of heritage value.
By letter dated 10 November 1993 the Swan River Trust wrote to the defendant indicating that it recommended refusal of the Cornell development application. The letter reads in part as follows:
"The Swan River Trust considered the proposed residence at 91 Preston Point Road fronting onto Riverside Road, East Fremantle, at its meeting held on 20 October 1993.
The Trust wishes to advise that it recommends refusal of the proposal, on:
1.The following grounds:
i)The proposed development would have an unacceptable impact on the river landscape.
ii)The proposed development would have an unacceptable physical impact on the riverine slope.
iii)The proposal is not in accord with the Trust's development setback policy or conservation, environmental and landscape protection policies.
(iv)Approval would create an undesirable precedent for development of the cliff face along its entire length.
2.The following advice:
i)The Trust is greatly concerned at the clearing that has already occurred at the site
ii)Trust officers would be available to discuss mechanisms to protect this important riverine feature."
In the meantime, the advertising of the proposed development had drawn a significant amount of public objection. As a consequence of that response, consideration of the development application was deferred to the December 1993 meeting of the Council.
In preparation for the Council meeting, Mr Arkeveld, under Mr Greg Smith's supervision and with his final approval, wrote a report which was to go forward to the meeting of Council. The report indicates Mr Smith's recommendation that Council should refuse the application for the proposed two storey residence. The report was written on the basis that the proposed dwelling was to be erected on a separate lot.
In the course of his evidence in chief at trial (such evidence being the subject of a written witness statement) Mr Smith said this:
"34.Mr Arkveld prepared the report which was to go forward to the meeting of Council, under my supervision and with my final approval. A copy of that report is annexed hereto at Document 30 indicating my recommendation that Council should refuse the application for the two storey residence. It may be noted that the report was written on the basis that the proposed dwelling was to be erected on a separate lot. I did not appreciate that conditions relating to the subdivision of Lot 500 into Lots 501 and 502 had not yet been cleared and that may well have been the reason why the application was being processed as one which the Town of East Fremantle could make ie it appeared to be an application to erect a single dwelling house on a lot which had no existing improvements on it which ordinarily would not have required approval under the MRS.
35.It is also the case that although my recommendation was that the application should be refused, the Council had discretion as to whether or not to accept that recommendation. It was sometimes the case that my recommendations would be rejected. The Councillors would customarily debate the merits of individual applications as and when they arose particularly in terms of having to give special approval under Town Planning Scheme No 2."
Before leaving the evidence of Mr Smith, I note in passing his confirmation that the Council dealt with the application pursuant to the special approval process (transcript page 610). Under cross‑examination, he agreed that the defendant Council was proactive in regard to heritage matters (transcript page 635), wherever possible it had endeavoured to preserve the cliff face as a matter of policy (transcript page 636), as early as 1982 it was mindful of landscape protection in that area (transcript page 640), the policy was reflected in a foreshore landscape study prepared by the Works and Reserves Committee as indicated in the Council's reply to the plaintiff's solicitors dated 3 September 1983 (transcript page 643), Mr Smith regarded the Cornells' attempt to clear the affected land on 8 September 1993 as an act of vandalism and took steps to have them prosecuted (transcript page 655), the Council's landscape policy recognised the regional significance of the scarp and this was reflected in submissions put to the Town Planning Appeal Tribunal in 1994 and eventually in the 1996 reservation of the area under the MR Scheme (transcript 638 to 647). Further, Mr Smith said that the defendant Council believed it had community support for its policy (transcript page 652) and took into account objections by the public to the proposed development based upon a desire to preserve the escarpment (transcript page 652). Mr Smith also confirmed that the Council was ad idem with the Swan River Trust in wishing to preserve an important regional landscape feature and that this was the essence of the case later put by the Council to the Town Planning Appeal Tribunal (transcript pages 646 ‑ 647).
In the course of re‑examination, Mr Smith was taken to the various grounds set out in the refusal document mentioned below, and then stated that the Council considered various planning matters in the course of its deliberations. Nonetheless, I was left with a strong impression from Mr Smith's evidence that the predominant reason underlying the recommendation for refusal was the belief that the escarpment should be preserved in the manner allowed for by the heritage policy, and that this view was ultimately reflected in the decision of the Council.
The refusal of consent
At its meeting on 20 December 1993 the defendant Council resolved to refuse the Cornell development application. The Town Clerk signed the refusal. A circular letter was then sent out to various interested landowners which sets out the eight reasons which the Council determined relevant to the refusal.
The refusal of planning consent dated 20 December 1993 reads as follows:
"Appendix II
Town of East Fremantle
Town Planning Scheme No 2
District Scheme
REFUSAL OF PLANNING CONSENT
Name and Address of Owner: J & J Cornell
91 Preston Point Road,
East Fremantle
Planning consent is hereby Refused in respect of Application No 137 made on the 13 September,1993 by Owners in respect of land situated at and described as 91 Preston Point Road (Lot 500) East Fremantle (Part of Landscape Protection Area No 29)
(1)for the land to be used for the purpose of Residential
(2)to carry out development in accordance with the submitted plans; upon the following grounds:-
Council at its meeting held on 20 December, 1993 resolved to refuse the application for the two storey residence proposed to be erected on Landscape Protection Area (No 29) on the following grounds:-
1.Section 5.3, Matters to be Considered by Council, Town Planning Scheme No 2.
2.Places of Heritage Value Development Table, Town Planning Scheme No 2.
3.The proposal does not have the required endorsement from the Swan River Trust.
4.The proposed development is not considered to be appropriate for the land because of its adverse effect on the landscape, the amenity of the streetscape, the locality and the adjoining properties.
5.The proposed development would have an unacceptable impact on the river landscape.
6.The proposed development would have an unacceptable physical impact on the riverine slope.
7.The proposal is not in accord with the Swan River Trust's development setback policy or conservation, environmental and landscape protection policies.
8.Approval would create an undesirable precedent for development of the cliff face along its entire length.
……………………… 20 December, 1993
Town Clerk"
Further Events
The law firm Gibson & Gibson wrote to the defendant on behalf of Mr and Mrs Cornell on 12 January and 8 February 1994 requesting copies of certain documents and indicating that there might well be a claim for compensation as a consequence of the defendant's refusal of the Cornell application. By letter dated 15 February 1994 Mr Smith responded on behalf of the defendant indicating that the right to claim compensation for injurious affection was conferred by s 11(1) of the Town Planning and Development Act 1928. The previously foreshadowed claim for compensation was delivered to the defendant on 26 May 1994.
There was some ongoing contact between Mr Smith and Mr Cornell and his solicitors concerning what sort of development could be constructed upon Lot 500. It seems that a meeting was held on 28 July 1994 during the course of which an alternative proposal was put forward with regard to a plan for a house on stilts. This was considered to be unacceptable.
Mr Smith indicated that each application made by the owners of the subject property would be treated on its merits. Mr Smith endeavoured to participate in discussions with Mr Cornell and his solicitors to this end. He discussed with them, and would have supported, a development on the higher part of Lot 500 (later Lot 502) with access to Riverside Road. He also would have supported a boatshed or lesser development on the lower reaches of Lot 500. He discussed with Mr Cornell by way of "quid pro quo" the possibility of a more intense development on the upper part of Lot 500 than the EF Scheme would have permitted which could have been achieved by a "spot rezoning" of the land.
By letter dated 25 May 1995 Gibson & Gibson, indicated that Mr and Mrs Cornell wished to pursue the claim for compensation for injurious affection.
Town Planning Appeal
In the meantime, on 15 February 1994, that is to say, close to two months after refusal of the planning consent, a notice of appeal against the 20 December 1993 decision of the defendant was lodged by Mr and Mrs Cornell with the Town Planning Appeal Tribunal, being Appeal No 4 of 1994.
The Tribunal heard the appeal in October 1994. It handed down its reasons for decision on 30 January 1995 the effect of which was that the appeal was not allowed with the result that the refusal of consent continued to apply.
It must be kept in mind that the subdivision of Lot 500 into Lots 501 and 502 was finally approved by the Department of Planning and Urban Development on 16 June 1994. It follows that by the time the appeal against the defendant's refusal was brought on for hearing before the Town Planning Appeal Tribunal in October 1994 the diagram effecting the subdivision into Lots 501 and 502 was in order for dealing.
The Town Planning Appeal Tribunal observed in the course of its reasons for decision that it became clear at the hearing that the appeal should be regarded as dealing with a proposal for a development on Lot 502 and not Lot 500 as stated in the notice of appeal. The Tribunal went on to say:
"Accordingly, leave was given to the Appellants to amend the Notice of Appeal to provide that the Appeal was in respect of a development on Lot 502. The land, therefore, is more particularly described as Lot 502 on Diagram 86725 comprised in Certificate of Title Volume 2003 Folio 952."
I understood from what was put to me by counsel for the respective parties at the trial that counsel for the defendant did not consent to the notice of appeal being amended in the manner just described. However, it seems that the appeal was undoubtedly contested upon the basis that the land the subject of the application for development consent was Lot 502. The ruling made by the Town Planning Appeal Tribunal certainly applies to Lot 502.
Other Matters
In or around late 1995 it was proposed by the Western Australian Planning Commission that the scarp area of Lot 502 should be included within the parks and recreation reserve under the MRS. The amendment continued the parks and recreation reserve under the MRS along the scarp which previously had only reached the southern boundary of Lots 501 and 502.
By letter dated 20 November 1995 Mr Smith notified Gibson & Gibson that the proposed MRS amendment number 970/33 would exclude the scarp area of Lot 502 from the urban zone and include it into a parks and recreation reserve. He suggested that Mr and Mrs Cornell might approach the Western Australian Planning Commission regarding purchase and gave them an address of the person to contact.
I note in passing that s 36 of the Metropolitan Region Town Planning Scheme Act confers rights to compensation in the circumstances in which Mr and Mrs Cornell found themselves and which Mr Smith considered appropriate given the regional significance of the scarp.
In mid 1997 the parties stated a special case for the opinion of the Supreme Court on a question of law as to whether the plaintiff's claim for compensation for injurious affection had been made within the prescribed time. On 8 August 1997 Anderson J in Cornell & Anor v Town of East Fremantle (supra) ruled that the claim had been made within time.
Pleadings and related matters
The plaintiff commenced the present action by writ on 4 February 1997. Various amendments were made to the pleadings as the matter proceeded. At the commencement of the trial on 12 August 2002 the pleadings were set out in a booklet dated 9 August 2002 which included a further re‑amended statement of claim dated 3 October 2001, re‑amended substituted defence dated 19 July 2002, re‑amended reply dated 29 July 2002, and further and better particulars of re‑amended reply dated 8 August 2002.
It became apparent at an earlier state of the trial that, having regard to the complex history of matters bearing upon the status of the plaintiff's land, it was necessary to describe the land said to be injuriously affected with greater particularity. This and other considerations led to the statement of claim being amended with responsive amendments being made to the statement of defence.
The final version of the pleadings consists of the booklet dated 17 October 2002 (called Amended Papers for the Judge) as further amended by the plaintiff's re‑amended reply dated 13 December 2002 and the defendant's minute dated 16 December 2002 which reflect amendments allowed on 12 December 2002. Accordingly, when I refer to the pleadings I am referring to the pleadings as constituted by these latter documents.
I should also mention that in the course of the trial reference was made to documents contained within the plaintiff's bundle of trial documents and to documents within the defendant's bundle of trial documents, although many documents were common to both bundles. I will refer only to the documents within these bundles which were actually admitted and marked as exhibits.
The plaintiff had prepared a statement of agreed facts dated 9 August 2002. In the event, there was a degree of controversy as to what use could be made of this document. Eventually, a document known as Portion of Agreed Facts tendered by the plaintiff was received and marked as Exhibit 51 without dissent. The index of exhibits tendered within Exhibit 51 refers to documents within the plaintiff's bundle of documents.
Statement of Claim
The plaintiff says in par 1 to par 1C that he sues in his capacity as executor and is the owner of Lot 502 Riverside Road, East Fremantle which at all material times prior to June 1994 comprised a part of Lot 500. Lot 502 is described as "the Land" for the purposes of the claim. The plaintiff goes on to say that the land is situated within the Scheme area of the EF Scheme and part of the land (the "affected land") is described as a place of heritage value for the purposes of the Development Table.
By cl 1 of the Table a person is not permitted without the special approval of the Council to carry out any development including the erection of a building or clearing the land. The plaintiff pleads in par 2BB that the affected land or, alternatively, Lot 502, was injuriously affected by the making of the EF Scheme in that the development controls in cl 1 of the Development Table "effectively prohibit any development of that land, or further or alternatively, permit development on that land for no purpose other than a public purpose within the meaning of s 12(2a)(b)(i) of the Town Planning and Development Act 1928 as amended". It is said that by s 11 of the Act and cl 4 of the Development Table the plaintiff as owner is entitled to claim compensation for injurious affection in the event of consent to development being refused. It is said that by application dated 30 September 1993 Mr and Mrs Cornell applied for special approval to carry out development on the land, namely, the erection of a residential building.
The plaintiff pleads in par 3 of the claim that on 20 December 1993 for the purpose of the preservation of the affected land the defendant refused to consent to Mr and Mrs Cornell carrying out the proposed development. It is said in par 4 that the plaintiff claimed compensation for injurious affection but the defendant refused the claim.
It became apparent from the way in which the plaintiff's case was presented at trial that the case was to this effect. The application for planning consent was made essentially in respect of Lot 502 in circumstances in which it was known to the defendant that conditional approval had been granted for the subdivision of Lot 500 (known as 91 Preston Point Road) into Lots 501 and 502. There was admittedly an existing residence on Lot 500. However, on the assumption that Lot 502 could properly be regarded as a separate lot (albeit not yet the subject of a diagram in order for dealings) there was no residence on Lot 502. It followed from this that the application could be dealt with by the defendant exclusively under the provisions of the EF Scheme because the effect of cl 29(2) of the MRS was that the local authority was entitled to determine the application under the delegated powers conferred upon it. Further, the effect of cl 24(2)(b)(i) of the MRS is that approval is not required for development that consists of the erection on a lot of a single dwelling house which will be the only building on that lot.
The plaintiff went on to submit that Part IV of the MRS deals with the obtaining of development approval only in a machinery or administrative sense. The provisions of that Part (which includes cl 29 and cl 30A) are predicated upon a person having an obligation to obtain approval to carry out development pursuant to cl 24 of the Scheme. They did not apply in the present case, for the application in question concerned vacant land and could therefore be lawfully approved by the defendant under the EF Scheme subject only to fulfilment of a condition that the subdivisional approval applicable to Lot 500 be carried into effect prior to development of the land (Lot 502) commencing. It followed that the State Planning Commission and the Swan River Trust had no jurisdiction in respect of the application to build a dwelling which fell under the defendant's development control. Properly construed, cl 2.2.3 of the EF Scheme which provides for approval under the MRS in respect of land abutting reserved land does not (and cannot) create any additional development control powers exercisable under the MRS and merely recognises the existing development control powers under that Scheme.
Against this background, the defendant's refusal of consent on 20 December 1993 should be regarded as the operative event, and an event effected pursuant to provisions of the EF Scheme. The plaintiff's land was injuriously affected by the making of the Scheme in that the value of the present Lot 502 was diminished as a result of the development controls concerning places of heritage value in par 1 of the Development Table. On their true construction, including the requirement to obtain the special approval of the Council, the relevant controls effectively prohibited the forms of development referred to in that paragraph. Wines v Shire of Harvey [2000] WASCA 39.
It was said further (in par 18 of the plaintiff's List of Issues for Determination and Contentions of Law) that in assessing compensation the Court is not tied to the particular building that was indicated in the application but must have regard to the effect of the development controls in the EF Scheme upon the value of the land.
If (which is denied by the plaintiff) the resolution of the Council of the defendant to refuse the application was not a valid refusal because the application should have been dealt with under the MRS, then the defendant was estopped from contending that the refusal of the application was invalid because the defendant was bound by the doctrine of issue estoppel. The defendant by its planning officers dealt with the application upon the basis that the Council had power to grant or refuse consent pursuant to provisions of the EF Scheme. The appeal to the Town Planning Appeal Tribunal was dealt with on the same basis after (allegedly) the defendant agreed to the appeal papers being amended to specify Lot 502 as the land in question.
Further, counsel for the plaintiff contended, the Town Planning Appeal Tribunal reasons necessarily predicated that a lawful decision had been made by the Council. See Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; Hoysted v Federal Commissioner of Taxation (1925) 37 CLR 290.
Statement of Defence
The defendant, by its statement of defence, pleaded that Lot 502 was a subdivisional lot (originally forming part of Lot 500) which did not exist at the date the cause of action is alleged to have arisen, namely, 20 December 1993, when consent was refused "to Mr and Mrs Cornell carrying out a development on part of Lot 500." It is said further that at the refusal date an existing dwelling house was already erected on Lot 500. At that time Lot 500 was zoned "Urban" under the MRS and "Residential" under the EF Scheme.
The defendant admitted that the land was situated within the EF Scheme area and that the land was affected by the Development Table Places of Heritage Value in the EF Scheme. The defendant denied that the development controls in question effectively prohibited any development of the affected land or permitted development for no purpose other than a public purpose. Further, the defendant denied that the affected land was injuriously affected by the making of the EF Scheme.
In par 2BB(d) the defendant pleaded that as a consequence of the appeal to and the determination made by the Town Planning Appeal Tribunal the Plaintiff was estopped from asserting that the controls in the Development Table effectively prohibited any development of the affected land or permitted development of the same for no purpose other than a public purpose. The defendant said further in par 2C that the controls reflected in the Development Table were designed to secure the amenity of the area with the result that, as a consequence of s 12(2a)(b)(i) neither Lot 500, Lot 502 nor the affected land were injuriously affected by the making of the EF Scheme.
The defendant pleaded in par 2D of the defence that the application by Mr and Mrs Cornell dated and received on 30 September 1993 was in relation to a specific proposal to erect the dwelling shown on the Spiccia plans on Lot 500 and not Lot 502 which did not exist in its present subdivided state at the application date. Further, the application necessarily implied an application for approval to commence excavation of the escarpment preparatory to the erection of a residential building and an application for access to Riverside Road over the MRS reserve between the western boundary of Lot 500 and Riverside Road. The defendant went on to allege that as a consequence of the Tribunal decision the plaintiff was estopped from denying that the excavation proposed by the Spiccia plans was a development that required a separate development permission under the MRS.
The defendant pleaded that on the refusal date it purported to refuse the application but denied that it was a valid refusal under the EF Scheme. It denied that the refusal prevented the development from proceeding or that either the former Lot 500 or Lot 502 was thereby injuriously affected by the making of the Scheme. The defendant said further that Lot 500 had an existing dwelling house erected thereon as a consequence of which Mr and Mrs Cornell were obliged to make an application for a development approval for a further dwelling under the MRS to the Planning Commission.
The defendant went on to say in par 3(b) that as at the refusal date Lot 500 abutted land reserved under the MRS as a parks and recreation reserve and also abutted the management area within the meaning of the Swan River Trust Act. By reason of the abutment any proposal for access to a development on Lot 500 required the written approval of the Planning Commission under the MRS. Further, cl 2.2.3 of the EF Scheme provided specifically that the development of land abutting land reserved by the MRS at all material times required the written approval of the Planning Commission under the MRS.
The defendant pleaded further that as a consequence of the operation of cl 29(1)(a)(i) and (iii) of the MRS and cl 2.2.3 of the EF Scheme, the defendant was under an obligation to forward the application for development approval to the Planning Commission for determination. Pursuant to that obligation, the defendant forwarded it to the Planning Commission on 22 September 1993.
Further, by virtue of cl 30(A)(1)(b)(i) of the MRS, the Planning Commission was obliged to give full particulars of the application to the Swan River Trust and in determining the application to have regard to any recommendations which the Trust might make. By letter dated 10 November 1993 the Trust notified its recommendation to refuse the application and, inter alia, indicated that the proposed development would not comply with its policy DE3 in relation to the imposition of setbacks for development of land abutting within the management area.
The defendant then contended that the Planning Commission failed to determine the application within 60 days of its receipt of the application, with the consequence that there was a deemed refusal of the application under cl 31(2)(b) of the MRS on or around 22 November 1993 against which the plaintiff did not appeal. The refusal of the application under the MRS was the only effective determination of the application.
The defendant went on to allege that the quantum of injurious affection was confined to the damage, if any, to the value of Lot 500 arising out of refusals of the Council of the defendant within the meaning of cl 4(a) of the Development Table concerning places of heritage value.
The defendant said in par 4(b) of the defence that if the plaintiff's application did not require approval under the MRS the terms of the Notice of Delegation dated 2 December 1992 required the defendant to determine the application in accordance with the recommendation of the Swan River Trust or refer the application to the Planning Commission for determination. Further, and in the alternative, the defendant pleaded that the Notice of Delegation was ultra vires.
In par 5 of the defence the defendant denied that Lot 500 could have been injuriously affected by the refusal on 20 December 1993 in that Lot 502 was not in existence as an independent lot and was not therefore capable of being injuriously affected. Further, the application of the provisions under clauses 1 to 4 of the Development Table did not have the effect of confining the use of that part of Lot 500 designated as a place of heritage value for no purpose other than a public purpose within the meaning of s 12(2a)(b)(i) of the TPD Act.
I pause here to remind myself, as I noted in the overview, that the defendant's stance concerning s 12(2a)(b)(i) was that the TPD Act excludes claims for compensation in respect of planning provisions which are designed to improve the amenity of an area. The affected area of Lot 500 (or the affected area of Lot 502 on the plaintiff's case) could still be developed for a private purpose under the EF Scheme, albeit subject to certain restrictions which reflected a public interest in the preservation of the area.
Thus, in the circumstances of the present case, the general provisions in the EF Scheme allowing for compensation where land was injuriously affected by the defendant's heritage policy had no application to or were displaced by the more specific provision of the TPD Act, namely, s 12(2a)(b)(i) of the Act, which barred claims in respect of private land abutting reserved land provided the land could continue to be used essentially for private purposes.
Here, Lot 502 could continue to be used for private purposes in that with the special approval of the Council a dwelling could be established upon the upper (eastern) section or a boat shed built on the lower (western) section comprising the affected land. Developments of such a kind were compatible with the defendant's Heritage Policy because they did not damage the escarpment. This demonstrated that the land could be used for a purpose other than a public purpose. It must follow that s 12(2a)(b)(i) barred the plaintiff's claim for compensation.
The defendant said, in the alternative, that if the Court should find (which is denied) that Lot 500 or any part thereof suffered injurious affection in the relevant sense as a consequence of the resolution, the resolution, so far as it related to the preservation of a place of heritage value, only affected a part of Lot 500 or Lot 502.
It said in the further alternative that Mr and Mrs Cornell could not have constructed a dwelling house as proposed on Lot 500 as a consequence of the application of the Swan River Trust's policy DE3 in respect of the imposition of a setback requirement from the boundary of Lot 500 and the management area or without obtaining, as a separate consent, permission to excavate into the scarp at East Fremantle.
The defendant said further in par 5(e) that by reason of the difficulty and expense of constructing a dwelling house on the proposed location, by comparison with the cost of constructing a dwelling house on the elevated level portion of Lot 500 or Lot 502, the refusal did not result in any diminution in value of Lot 502 and therefore did not cause injurious affection.
The defendant's submissions at trial
In seeking to understand the thrust of the defendant's pleaded case, it will be useful at this point to look briefly at some of the submissions made on behalf of the defendant at trial. It emerges from earlier discussion that on the defendant's case it was not open to the defendant council to grant or refuse planning consent in respect of land (Lot 500) occupied by an existing residential dwelling.
The defendant submitted that under cl 24(2) of the MRS, an application to build a second or subsequent dwelling house on a single lot (in this case Lot 500) requires the consent of the responsible authority. Under the MRS, and in the absence of a delegation of power, the responsible authority is the Planning Commission. Although power to determine development applications is ordinarily delegated by the Planning Commission to the relevant local government authority, this is not the case, inter alia, where such land abuts land within the Swan River Trust Management Area. The decision‑making power is retained by the Planning Commission under the MRS text and its decision is final and not subject to any parallel decision‑making power of the local government. University of Western Australia v City of Subiaco (1980) 52 LGRA 360 at 365; The City and Suburban Group Pty Ltd v The City of Stirling (TPAT Appeal No 37 of 1998) at 5.
The defendant submitted further that as at 20 December 1993 the defendant could not empower itself to determine the application by a conditional determination subject to the subdivision of Lot 500 to create Lot 502 (which subdivision did not occur until 16 June 1994).
By virtue of cl 30A(1)(b)(i) of the MRS the decision‑making authority is obliged, in determining the development application, to have regard to any recommendations which the Swan River Trust made. By letter dated 10 November 1993, the Trust recommended that the application should be refused. Further, under cl 2.2.3 of the Scheme, any development application abutting reserved land required the approval of the Planning Commission.
Any approval, had it been given, by the defendant under the EF Scheme to an application to develop land abutting the management area of the Swan River Trust would not have been sufficient to permit the development to proceed where no consent had been obtained under the MRS from the Planning Commission. As a consequence, the subject land was not injuriously affected as a result of the decision on 20 December 1993.
As to estoppel, the issue is whether or not the decision was within power. If it was not, that is a matter of law and the defendant's representations or assertions with regard to it are of no relevance and could not give rise to an estoppel. See Enoka v Shire of Northampton (1996) 15 WAR 483 at 484.
The defendant submitted further that the applicants were squarely put on notice upon appeal to the Town Planning Appeal Tribunal that approval to commence development was required under the MRS from the Planning Commission in addition to any consent from the defendant and that in its absence, there was a deemed refusal which would have prevented the development irrespective of the decision made. Mr and Mrs Cornell were alerted to this requirement at an early stage.
In addition, the defendant submitted at trial that by virtue of s 12(2a)(b)(i) of the TPD Act, no land is deemed to be injuriously affected as a consequence of the making of a Scheme unless the Scheme permits development for no purpose other than a public purpose. The Places of Heritage Value Policy Statement contained in the EF Scheme does not so provide. The policy is not binding on the Council of the defendant and each development is to be decided on its merits as appears from cl 2.3.10 of the EF Scheme. Moreover, the policy allows for private development subject only to the obtaining of planning consent, albeit that in considering the relevant application the Council must take account of heritage issues.
Reply
The plaintiff pleaded in his re‑amended reply that on 12 May 1992 the Committee for Statutory Procedures acting for and on behalf of the Planning Commission approved the application of Mr and Mrs Cornell to subdivide Lot 500 on certain conditions. In their application for special approval Mr and Mrs Cornell applied for special approval to carry out the erection of a residential building on part only of Lot 500, namely, that undeveloped portion of Lot 500 that was the subject of the subdivision approval granted by the Planning Commission, that is to say, that portion of the land which later became the vacant land known as Lot 502. This was known to the defendant when it considered the application for special approval. Further, on 16 June 1994, the subdivision of Lot 500 was completed so that Lots 501 and 502 came into existence.
In pars 7 to 9A of the reply the plaintiff referred to the events giving rise to the disallowance by the Town Planning Appeal Tribunal of the plaintiff's appeal against the defendant's refusal of planning consent. The plaintiff referred also to the ruling of Anderson J in Cornell & Anor v Town of East Fremantle (supra) that the plaintiff had made a valid claim for compensation for injurious affection within the time limit prescribed by the EF Scheme.
It was against this background that the plaintiff pleaded in par 10 of the reply that the Council of the defendant validly refused the application by its resolution of 20 December 1993 and was lawfully able to do so subject to the subdivision of Lot 500 in accordance with the approval of the Planning Commission dated 12 May 1992. It is said further that the affected land or, alternatively, that part of Lot 500 that became Lot 502, was injuriously affected by the making of the EF Scheme and the plaintiff's right to claim compensation was activated by the refusal of planning consent by the council of the defendant on 20 December 1993.
Particulars in support of the plaintiff's contention alleged that the land was injuriously affected because the development controls provided for in par 1 of the Development Table effectively prohibited the development of the affected land for its highest and best use whereby the owner of the present Lot 502 cannot develop the affected land in any way and therefore cannot provide suitable access across the affected land from the balance of Lot 502 and develop, subject to normal development controls, improvements on the affected land such as a residence, guesthouse, garage, boat shed, swimming pool, gazebo, verandah, landscaping and such like.
Importantly, in par 12 of the reply the plaintiff admitted that at the refusal date on 20 December 1993 Lot 500, and more particularly the affected area, abutted land which was reserved under the MRS as a parks and recreation reserve and that Lot 500 also abutted a management area within the meaning of the Swan River Trust Act.
Further, the plaintiff admitted that cl 2.2.3 of the EF Scheme, at all material times, provided that the development of land reserved by the MRS or land abutting land so reserved, other than the erection of a boundary fence, required the written approval of the responsible authority under the MRS. The plaintiff pleaded that, properly construed, cl 2.2.3 of the EF Scheme does not create any additional development control powers exercisable by the responsible authority under the MRS and only recognises the existing powers of the responsible authority to control development under the MRS.
The plaintiff pleaded further in par 12(4) that nothing in the MRS empowered the responsible authority under the MRS to refuse the proposed development on part of Lot 500 (or Lot 502) and more particularly the affected area by virtue of the fact that such lot abutted a parks and recreation reserve under the MRS or a management area within the meaning of the Swan River Trust Act. The plaintiff went on to say that cl 29(1)(a)(iii) of the MRS did not place the defendant under any obligation to forward the relevant application for development approval to the Planning Commission for determination, having regard to cl 24(2)(b)(i) of the MRS concerning the erection of a dwelling which would be the only building on the land in question.
The plaintiff pleaded in par 13 that cl 30A of the MRS did not oblige the Planning Commission to give full particulars of the application to the Swan River Trust and to have regard to any recommendations which the Trust might make. The proposed development consisted of the erection on a lot of a single dwelling which would be the only building on that lot and so, by virtue of cl 24(2)(b)(i) of the MRS, approval for such a development was not required under the MRS and, as a consequence, cl 30A of the MRS had no application at any material time in respect of the proposed development. Further, the plaintiff denied that the Planning Commission failed to determine any relevant application before it, as alleged by the defendant, and further denied that there was any deemed refusal of an application. In any event, if any separate approval of the Planning Commission was required under the MRS to commence development, then such approval could be obtained separately from any necessary consent from the defendant for the residential use or development of Lot 500 or Lot 502 or the affected area.
In par 13B it is pleaded in the alternative that if the Planning Commission had power to control the proposed development, then such power was delegated to the council of the defendant pursuant to s 20(1) of the Western Australian Planning Commission Act by Notice of Delegation published in the Government Gazette on 2 December 1992 (as amended by Notice published in the Government Gazette on 25 May 1993). Hence, at all material times, the defendant was authorised to determine the subject application having regard to the provisions of the MRS, the EF Scheme and the Notice of Delegation. The Planning Commission's failure to determine the application did not constitute a deemed refusal under cl 31(2)(b) of the MRS.
Mr Dix said further that the limitation on user prevents the owner from constructing any structure, which would include a stairway or steps, to connect any building at the upper level from Riverside Road and the Swan River. The major difficulty faced by owners of lots without direct access to Riverside Road would be the long diversion necessary to access the river. The value of such sites is reduced accordingly and that reduced value was evident from an analysis of the sales evidence concerning land in the immediate vicinity of the subject land.
Mr Dix then concluded, having considered the available evidence, that the affected value of Lot 502 as at 20 December 1993 was $400,000. This led him to the further conclusion that the diminution in value caused by the limitation on user contained in the EF Scheme could be quantified in the sum of $600,000.
The defendant's stance
The stance of the defendant in regard to the quantum issue was reflected principally in the report dated 26 October 2000 of its valuer, Mr R Bracewell, being a valuation report in respect of 91 Preston Point Road, East Fremantle. The purpose of the report was to determine the injurious affection to the freehold interest in the property known as 91 Preston Point Road as at 20 December 1993 arising out of a refusal to approve development by the defendant on that date. Throughout his report, he proceeds from the premise that as at the valuation date the subject property was Lot 500, but he was clearly aware that at the relevant date the subject property was destined to become Lots 501 and 502 pursuant to a subdivision that had been approved by the defendant.
Mr Bracewell's position was expressed succinctly in his executive summary where it was said that in his opinion no injurious affection arose due to the refusal by the Town of East Fremantle to allow the construction of a residential dwelling on the western section of the subject property known as 91 Preston Point Road, East Fremantle.
I pause to say, having regard to my earlier observations about the nature of the plaintiff's claim, that the Bracewell report, strictly speaking, does not purport to be estimating loss arising from the making of the EF Scheme. Rather, he refers to loss arising from the refusal of approval. However, it is apparent that, in essence, like Mr Dix, his appraisal is directed to the impact of the various planning controls as at the refusal date. As I have indicated, that is the moment at which the loss flowing from the making of the EF Scheme, if any, can be said to have crystallised. Thus, I am prepared to accept that, in practical terms, his evidence bears upon the relevant quantum issue. I will proceed from the premise that his evidence concerns loss allegedly arising upon the making of the EF Scheme.
Having regard to earlier discussion, it is not necessary for present purposes to refer to that part of the Bracewell report which describes the land and touches upon the planning and heritage issues. Mr Bracewell proceeds from the premise that the subject property at the valuation date was classified for residential use in accordance with the EF Scheme. The land was contained in Area 3. He referred to the development standards for residential dwellings in that area in respect of single lots, duplex development and for group housing. He noted that part of the western section of the subject property fronting Riverside Road is (and was at the valuation date) listed in Appendix V of the EF Scheme as a place of heritage value. Further, it was listed under Code 29 Landscape Protection Area to Lot 23 and 24. The description of the land in the Appendix is that of a site comprising limestone cliff face, rock outcrops and natural vegetation: significant for its natural characteristic, but should be protected from despoliation or the intrusion of development.
In his review of the relevant factors Mr Bracewell noted also that the subject land adjoined land within the Swan River Trust Management Area and at the southern boundary land reserved under the MR Scheme. At the refusal date in December 1993, the land was in one parcel having an area of 2,387 square metres.
In his report, Mr Bracewell asserted that in making his assessment of injurious affection he had taken a position that at the refusal date there was one large parcel of land and that there was a refusal to develop a second dwelling on the land in the western section. He proceeded from the premise that construction of the proposed dwelling would have necessitated some extensive excavation of the cliff face in order to provide a building site.
Mr Bracewell proceeded also from the premise that the Swan River Trust would require a 10 metre set back along the riverside frontage which would reduce the effective building envelope of the site to 14.48 metres on the southern side boundary, reducing to 2.91 metres on the northern side boundary, with only the southern section being able to accommodate a residential dwelling. His assumption was that for sound town planning considerations including the application of the Swan River Trust Policy, the proposed house would not have obtained an approval either under the MR Scheme or the EF Scheme. It followed, in his opinion, that no injurious affection arose out of the designation of the subject land as a place of heritage value and the refusal of the application to develop the subject land as a consequence of that designation.
In regard to the assessment of the reduction in value, if any, of the inability to erect a single dwelling on the Riverside Road frontage of the site due to the refusal to develop, Mr Bracewell adverted to two methods that could be utilised to assess the injurious affection arising from the refusal to develop.
He was of the view that the site had a value as one entity of $755,250. The estimated value of the land at the Preston Point Road frontage, having an area of 745 square metres, was $430,000 which would "arbitrarily" indicate that the value of the lower section was $325,250. He said that in his opinion such an approach was inconclusive in that it did not take into account the physical aspects of the western section of the site and also the estimated cost of developing a residential lot on the Riverside Road frontage.
It was more appropriate in his view to consider re‑subdividing the land into separate lots, one having an area of 680 square metres at the Riverside Road frontage and a second lot having an area of 745 square metres at the Preston Point Road frontage on the upper level. The resulting static analysis, or hypothetical subdivision, would indicate whether there was any reduction in value to the site due to the refusal to develop.
Mr Bracewell then proceeded to review the sales evidence. He did so in his written report and in the course of examination‑in‑chief and while under cross‑examination. He was principally concerned with seeking to identify comparable sales that occurred in the period 1993 and early 1994. Ultimately, he was of the view that a fair rate for the subject property would have been in the range, on an overall basis, of $530 m2 making an aggregate value for the 1,425 square metres located on what is now known as Lot 502 in the sum of $755,250. He proceeded also to explore the development costs of the subject land in detail with the reasoning in that regard being reflected in his report.
He concluded eventually that the residual land value determined by the static analysis basis was $492,000. This value was seriously affected by the high cost of site preparation, as detailed by Soil and Rock Engineering Pty Ltd, and consequently, the value of the site was significantly less than that determined as a single residential lot of $755,250.
In Mr Bracewell's view, it followed that due to the difference in value of the site as a single lot and the value on a potential re‑subdivision into two separate lots, that there was no injurious affection suffered, due to the refusal to develop on 20 December 1993.
Review of the evidentiary issues
The notional, subdivisional static analyses performed by Mr Dix and Mr Bracewell tended to confirm that the highest and best use of the affected land as at 20 December 1993 was as part of the single residential Lot 502 with a residence erected on the upper level. This was because the land had uninterrupted views and a connection to the river. A knowledgeable purchaser cognisant of the merits and demerits of the land would take account of the cost and difficulty of developing the western section of the land below the escarpment.
Having regard to the costings adduced in evidence, and in the absence of any significant dispute between the valuers in regard to this aspect of the matter I find that as at the relevant date the highest and best use of the affected land was as part of the single residential Lot 502. It now becomes necessary to determine what was the value of Lot 502 unaffected by heritage controls.
The plaintiff's case (based principally upon Mr Dix's evidence) was that the value of Lot 502 in December 1993 unaffected by heritage controls was $1 million being 1,425 square metres at a rate contended for by Mr Dix of $701.75 m2. This rate was said to take into account comparable land elsewhere on the Swan River but with some allowance for the difficulties of developing Lot 502 as an integrated residential lot. Mr Bracewell's value for Lot 502 as one lot (unaffected by heritage controls) was $755,250 being 1,425 square metres at $530 m2.
It therefore emerges that the difference between the Dix valuation and the Bracewell valuation of the unaffected Lot 502 lay in the relevant rate, that is to say, $701.75 m2 contended for by Mr Dix contrasted with $530 m2 contended for by Mr Bracewell.
The thrust of the evidence given by Mr Dix was that his rate was effectively based on North Fremantle prices with discounting to reflect the difficulties associated with Lot 502. Mr Dix placed particular reliance upon the August 1995 price for Lot 1 Direction Way (otherwise known as Lot 1 Harvest Road) of $1,116 per square metre. The tenor of his evidence was that this figure had to be discounted to a figure of $1,025 in order to adjust the August 1995 figure to the relevant valuation date in respect of the subject property, that is to say, 20 December 1993. The figure had to be further discounted having regard to the difficulties associated with Lot 502.
Mr Bracewell preferred Lot 18 Direction Way (Harvest Road) as an example of a comparable sale. Lot 18 disclosed $942 per square metre in January 1994. Mr Bracewell accepted that the views from Lot 502 were superior to Lots 1 and 18 Direction Way but felt that this was offset by Lot 502 facing the prevailing winds and the sun. Nonetheless, it emerges from this part of the evidence that Mr Bracewell seemed to accept that there was a degree of comparability between the vacant land sales in North Fremantle and the value of Lot 502.
Having regard to the evidence of Mr Dix, counsel for the plaintiff mounted a strong challenge to that part of Mr Bracewell's evidence concerning 36 Riverside Road which lay to the south of the subject land. This had a land area of 1,302 m2 and sold for $750,000 in June 1993. According to Mr Bracewell, on the assumption that the improvements added no value, it disclosed $576 m2 as land value. It was said to be directly comparable to Lot 502 in size, location and date of sale. Counsel for the plaintiff challenged the reliability of a figure derived from an improved property.
Counsel for the defendant answered this assertion by noting that Mr Dix had relied on improved sales for sales evidence also in that his second item of sales evidence was Lot 3 corner Pier Street and Preston Point Road and Lot 8 Pier Street. It was said also that Mr Dix was too heavily reliant upon sales in the North Fremantle area, his adjustment of the August 1995 price for Lot 1 Direction Way was difficult to follow and not persuasive, he had given no weight to 36 Riverside Road which, notwithstanding the improvements, was the most directly comparable sale, and his extrapolation from values of lots in the Homeswest subdivision in Pier Street introduced an element of speculation into his reasoning.
It is always difficult to resolve legitimate differences of opinion in regard to sales evidence of this kind. However, in the end, I am of the view that Mr Dix gave an undue emphasis to North Fremantle sales as the basis for arriving at his figure of $1,025 m2 (transcript pages 278 and 307). In my view, the rate of $530 m2 contended for by Mr Bracewell is to be preferred. This was supported by various sales in the East Fremantle locality affected close to the end of 1993 such as the Monteath properties at 3 and 5 Surbiton Road and Lot 2 Durdham Street. I am satisfied that weight should be given to the sale he contended for at 36 Riverside Road, notwithstanding the improvements. These sales seemed to be more directly comparable. Accordingly, I find that the value of Lot 502 unaffected by heritage controls as at 20 December 1993 was the figure affirmed by Mr Bracewell, namely, $755,250.
Findings as to affected value of the land
Having regard to the principles I referred to in earlier discussion concerning the assessment of loss in the circumstances of the present case by comparing the market value of the subject land in its unaffected state at the relevant date with its affected value, I must now turn to the latter category. Before doing so, it will be useful at this point to remind myself briefly of certain pleaded issues and to revisit a number of issues addressed in earlier discussion.
The plaintiff pleaded at par 2BB of the statement of claim that Lot 502 was injuriously affected by the making of the EF Scheme in that the development controls concerning heritage places effectively prohibited any development of the affected land or, alternatively, permitted development on that land for no purpose other than a public purpose.
The defendant denied this allegation by par 2BB of its statement of defence. It said further that as a consequence of the reasons for decision handed down by the Town Planning Appeal Tribunal and the determination by that body that the result of the affected land being characterised as a heritage place was significant but not determinative of the outcome of any application to develop the plaintiff was estopped from asserting that the development controls effectively prohibited any development of the affected land or permitted development for no purpose other than a public purpose.
It will be apparent from earlier discussion that I am not persuaded that the plaintiff is estopped in the manner just mentioned by the reasons handed down by the Town Planning Appeal Tribunal because that body was concerned with the exercise of the discretionary power to refuse the application. It was not required to rule upon the issues brought before this Court as to whether the controls prohibited development or permitted development for no purpose other than a public purpose. In my view, such a ruling was not necessary to and did not form part of the Tribunal's decision. It will be apparent from my earlier reasoning and related findings also that, having regard to Wines (supra) and the circumstances of the present case, that I have found in favour of the plaintiff in regard to the issue pleaded in par 2BB of its claim.
Accordingly, for present purposes, I proceed from the premise that the development controls in question did effectively prohibit any development of the affected land with the result that Lot 502 was injuriously affected by the making of the EF Scheme. It follows that the valuers were entitled to review the sales evidence with a view to expressing an opinion about the value of the land in its affected state. However, in doing so, bearing in mind the notion of the knowledgeable purchaser outlined in Spencer's case (supra), both the valuers and the Court as the final arbiter are obliged to make a careful appraisal of the impact of the controls in determining what price might be paid for Lot 502 in its affected state. It will therefore be necessary to take account of the fact that the controls allowed for approval to be obtained in exceptional circumstances (on my finding) and of my earlier conclusion, arrived at consistently with the evidence of both valuers, that as at 20 December 1993 the highest and best use of the affected land was as part of the single residential Lot 502.
When I review the evidence of the valuers concerning this issue I find that I am left in a rather unsatisfactory position. Mr Dix addressed the issue I have just described expressly, and I am satisfied that in accordance with his instructions he proceeded upon the basis of assumptions that are generally consistent with the findings I have made and the criteria I have just described. He acknowledged that the assessment of value was difficult because use of the affected land was severely restricted by the heritage controls and he seemed to accept that the limitations on user were difficult to define exactly. He then said this:
"The limitation on user prevents the owner from constructing any structure, which would include a stairway or steps, to connect any building at the upper level from Riverside Road and the Swan River. This would apply equally to a development of group housing at the Preston Point Road level, as any responsible developer would provide such access to maximise the value of the land. The major difficulty faced by owners of lots without direct access to Riverside road, is the long diversion necessary to access the river. The value of such sites is reduced accordingly and that reduced value is evident from an analysis of sales in the immediate vicinity."
In the course of giving his evidence in chief, Mr Dix added these observations (transcript page 234):
"Narrowing the question, first of all, to your opinion as to the effect on the mind of the market of the refusal of 20 December 1993 ‑‑‑? ‑‑‑ In relation to the value of the land?
Yes? ‑‑‑ It would have the effect of reducing the value of the land in the eye of the prospective purchaser and that reduction, in my view, would be the figures that I have determined in terms of the injurious affection. It's a direct result of that."
It was upon this basis that Mr Dix expressed the view that the affected value of Lot 502 at the relevant date was $400,000, that is to say, its value had been reduced to 40 per cent of the unaffected value of $1 million he had attributed to the land. On the basis of the figures Mr Dix contended for, after comparing the unaffected and affected values, he asserted that the difference in value, and thus the loss, was $600,000. It follows from the finding I made earlier as to the unaffected value of the land, however, that a calculation of this kind cannot be accepted. If his methodology, and his affected value, be accepted, the diminution in value would be represented by the difference between the figure of $755,250 I have held to be the unaffected value and Mr Dix's affected value of $400,000, namely, $355,250.
However, I am conscious that the factors singled out by Mr Dix in arriving at his affected value figure, as expressed in his report, and as explored with him in cross‑examination, are comparatively brief. In his addendum, and under cross‑examination, Mr Dix took issue with much of what Mr Bracewell had to say about the sales evidence and the determination of the unaffected value, but neither then, nor subsequently, did Mr Dix devote much attention to the principal constituents of the defendant's case in regard to the present issue, namely, that the inconvenience of the site meant that Lot 502 was likely to be retained as a large single lot and developed only on the upper level, irrespective of the heritage controls. Further, that a knowledgeable purchaser would allow value to those features of the planning situation which would be available to the owner if the affected land was left in an undeveloped state such as plot ratio benefits, rear setback benefits, the ability to deal with the open space and landscaping requirements of the EF Scheme, control over development and any possible interruption to views from the upper level. In other words, Mr Dix arguably did not make any sufficient attempt to recognise the clear benefits that retention of the ownership of the western portion of Lot 502 would provide in circumstances where no building development was attempted on the lower land.
However, when I turn to the evidence on the other side, I find that the evidence of Mr Bracewell does not amount to a direct rebuttal of the Dix position. The principal position of the defendant having regard to the Bracewell evidence and considerations of the kind I have just described is that the affected value of the land is the same as the unaffected value with the result that there is no loss flowing from the alleged injurious affection. Mr Bracewell did not in his report or in his evidence at trial directly purport to demonstrate, having regard to the sales evidence, that the figure of $400,000 contended for by Mr Dix as the affected value was flawed. To some extent, Mr Bracewell provided confirmation for the Dix figure in that part of the Bracewell report in which he estimated the value of the land at the Preston Point Road frontage, having an area of 745 m2, as $430,000 which would arbitrarily indicate that the value of the lower section was $325,250, although he did suggest that that gave rise to an unnecessarily high reduction in value.
In earlier discussion, I referred to previously decided cases in which reasoning suggests that the task of the Court is not simply to choose one of several competing valuations or estimates, but to make a critical selection of the most helpful facts from the mass of evidence with a view to fixing a sum satisfactory to the mind of the Court as representing the true value of the claim at the relevant valuation date: See also Commonwealth v Milledge (1953) 90 CLR 157 and Bronzel v State Planning Authority (1979) SASR 513. The Court must also be satisfied, in circumstances where the burden of proof lies upon the claimant, that the various constituents of the claim have been made out.
Having regard to the respective positions adopted by the valuers, I am persuaded that I should essentially give effect to the conclusion arrived at by Mr Dix concerning the affected value of the land, but having regard to related findings and the evidence I have described which tends to qualify the opinion he expressed. Accordingly, It seems to me that the appropriate starting point is not the figure of $400,000 contended for by him because that figure was arrived at by reference to a base figure of $1 million representing the unaffected value which I have found against. The correct starting point appears to be a figure of $302,100 representing 40 per cent of the figure of $755,250 which I found to be the operative unaffected value figure.
It follows from what I have just said that the commencing figure of $302,100 must then be adjusted in order to reflect an allowance for the features of the planning situation which continue to be available to the owner of the subject land being the improved plot ratio and other features that I specified a moment ago.
To fix the size of the adjustment is difficult. Under cross‑examination, Mr Bracewell responded to questions about this issue in a way that ultimately suggested that matters of this kind were "hard to quantify" (transcript page 953) and could not be reduced to a precise mathematical calculation. At transcript page 946 he said this:
"As I outlined in my prefatory questions to you, Mr Dix regards the value of the subdivision lot at Preston Point Road as being the same as the value of all of lot 502 if the lower half of lot 502 is excluded from development. Correct? ‑‑‑ Yes.
You say that's inconclusive for the reasons we went into before and you have also pointed out that you regard the purchaser or the owner of lot 502 as a whole being able to get more value of the development envelope on the Preston Point Road half if he owns the whole lot than if he only owns the Preston Point Road half. Is that correct? ‑‑‑ Yes.
You say it has more use as a development unit? ‑‑‑ Yes.
And the two main points you have mentioned on several occasions are greater flexibility in terms of plot ratio and preservation of view? ‑‑‑ Yes."
In the course of re‑examination, counsel for the defendant took Mr Bracewell to a fuller list of the factors under notice including the plot ratio benefit, the preservation of uninterrupted views, the rear set back advantages, the ability to satisfy landscaping and open space requirements be putting them on the affected portion. Counsel then proceeded to this question (transcript page 987):
"Then that takes me to the question that I think I need to put to you just to conclude that set. In your opinion as a valuer, can a valuer make some allowance for those factors in a valuation without being able to arrive at a precise figure by way of calculation of those values? ‑‑‑ I think a valuer could rely on his experience to deduce what would be the extra value."
Mr Dix appeared to share these views in that, as appears from his report at page 21 and from his cross‑examination concerning that part of his report at transcript page 272 and following, the sales he relied on reflected a premium for land such as Lot 502 having expansive views and other intangible benefits. He said the premium varied according to location.
All things considered, the evidence indicates that it would be appropriate to attribute a sum of $50,000 to the benefits in question. It follows from this that the final figure to be awarded to the plaintiff by way of compensation will be $302,100 less $50,000. When rounded off, the operative figure will be $252,000. To my mind, it is this figure which represents the diminution in the market value of the subject land as a consequence of the making of the EF Scheme.
Prayer for relief and interest
In his prayer for relief the plaintiff claimed compensation for the injurious affection of the affected land, alternatively Lot 502, in such sum as shall be determined by the Court. The determination in that regard has now been made. Further, the plaintiff claimed interest from 20 December 1993 pursuant to s 31 of the Commercial Arbitration Act 1985 or alternatively pursuant to s 32 of the Supreme Court Act.
Counsel for the plaintiff placed some reliance upon s 11(4) of the TPD Act which provides that any question as to the amount and manner of payment of the sum which is to be paid as compensation shall be determined by arbitration under and in accordance with the Commercial Arbitration Act 1985, unless the parties agree on some other method of determination. Section 31 of the Commercial Arbitration Act provides that unless a contrary intention is expressed in the Arbitration Agreement, where the arbitrator or umpire determines to make an award, the arbitrator shall have power to include in the sum for which the award is made interest at such rate as the arbitrator or umpire may direct (being a rate not exceeding the rate at which interest is payable on a judgment debt at the Supreme Court) on the whole or any part of the money for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.
Section 32 of the Supreme Court Act provides that in any proceedings for the recovery of any money (including any debt or damages), the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect. The section does not authorise the giving of interest upon interest.
These proceedings were commenced in the Supreme Court and I see no reason to depart from the assumption that would usually apply to such proceedings namely that s 32 of the Supreme Court Act is the appropriate point of reference in regard to interest. The discretion allowed by s 32 of the Supreme Court Act is generally regarded as a means whereby a sum by way of interest can be added to money judgments in order to compensate plaintiffs for being kept out of their money. It is payable only where the plaintiff makes a specific application to the Court for it: Cairns: Australian Civil Procedure (2nd ed) at page 311. See also Arcus Shopfitters Pty Ltd v Western Australian Planning Commission (supra) in which, in regard to a claim for compensation, the Court saw no basis for departing from the rates allowable under the Supreme Court Act.
In the circumstances of the present case, I consider that interest should be allowed to the plaintiff upon the amount of the award as from 20 December 1993 to the date of judgment at a rate to be determined by the Court. As a considerable time has elapsed since the cause of action arose, I will hear from the parties as to the rate that should apply.
Summary
The defendant is to pay compensation to the plaintiff pursuant to s 11 of the TPD Act upon the basis that Lot 502 was injuriously affected by the making of the EF Scheme in the sum of $252,000. The defendant shall pay interest to the plaintiff upon the said sum pursuant to s 32 of the Supreme Court Act as from 20 December 1993 to the date of judgment. I will hear from the parties as to the manner in which the rate of interest is to be determined and as to whether any further orders or directions are required by the parties.
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