ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER and BOMBARA
[2021] WASAT 141 (S)
•5 NOVEMBER 2021
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: LAND ADMINISTRATION ACT 1997 (WA)
CITATION: ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER and BOMBARA [2021] WASAT 141
MEMBER: DR S WILLEY, SENIOR MEMBER
HEARD: 17 MAY 2021
DELIVERED : 5 NOVEMBER 2021
FILE NO/S: DR 131 of 2013
BETWEEN: ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER
Applicant
AND
MARK JAMES BOMBARA
Respondent
Catchwords:
Land resumption - Compensation - Valuation of land - Knowledge of hypothetical Spencer parties - Applicable planning framework - Highest and best use - Development prospects - Regional planning - Underground drinking water - Solatium
Legislation:
Acts Amendment (State Planning Commission) Act 1985 (WA)
City of Kwinana Town Planning Scheme No 2
Electricity Corporation Act 1994 (WA), s 4, s 4(1)
Electricity Corporations Act 2005 (WA), s 4(1)(b), s 147
Energy Corporations (Powers) Act 1979 (WA), s 46, s 47
Energy Corporations (Transitional and Consequential Provisions) Act 1994 (WA), s 44, s 45
Energy Operators (Powers) Act 1979 (WA)
Interpretation Act 1984 (WA), s 56(1)
Land Acquisition and Compensation Act 1986 (Vic), s 44(1)
Land Administration Act 1997 (WA), s 151(1), s 161, s 170, s 179, s 241, s 241(12), s 200, s 200(2), s 202(1), s 217, s 220(c), s 222, s 222(1), s 222(2), s 226, s 226(1)(a), s248, s 248(1)(a), Pt 9, Pt 10
Metropolitan Region Scheme, cl 5
Metropolitan Region Town Planning Scheme Act 1959 (WA), s 32(2), s 33(1), s34, s 35, Pt 11, Pt IV
Planning and Development Act 2005 (WA), s 14(i)
Public Works Act 1902 (WA), s 17, s 18, s 63, s 45
State Administrative Tribunal Act 2004 (WA), s 3(1), s 15(1), s 32(2)
State Electricity Commission Act 1945 (WA)
State Planning Commission Act 1985 (WA)
Statutes (Repeals and Minor Amendments Act 2000 (WA), s 14(3)
Town Planning and Development Act 1928 (WA), s 5AA
Western Australian Planning Commission Act 1985 (WA), s 18(1)(b)
Result:
Compensation awarded in the amount of $18,088
Category: B
Representation:
Counsel:
| Applicant | : | Mr K DeKerloy and Mr T Wright |
| Respondent | : | Mr M Bennett and Ms J Border |
Solicitors:
| Applicant | : | Herbert Smith Freehills |
| Respondent | : | Bennett + Co |
Case(s) referred to in decision(s):
Adams v Valuer General [2014] NSWLEC 1005
Arcus Shopfitters Pty Ltd v Western Australian Planning Commission [2002] WASC 174; (2002) 125 LGERA 180
Arrow v Electricity Commission (1994) 87 LGERA 363
Boland v Yates Property Corporation Pty Ltd [1999] HCA 64; (1999) 167 ALR 575
Bombara v Electricity Networks Corporation T/As Western Power [2017] WASC 37
Bombara v Electricity Networks Corporation T/AS Western Power [2019] HCASL 301
Bombara v Electricity Networks Corporation trading as Western Power [2019] WASCA 62
Brewarrana Pty Ltd v Commissioner of Highways (No 2) (1973) 6 SASR 541
CA MacDonald v South Australian Railways Commissioner (1911) 12 CLR 221
Caruso v Sydney Water Corp [2008] NSWLEC 320
Cerini v The Minister for Transport [2001] WASC 309
Chino Pty Ltd v Transport Infrastructure Development Corp [2006] NSWLEC 768; (2006) 153 LGERA 136
Chircorp v Transport for New South Wales [2014] NSWLEC 63
Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd [1947] HCA 10; (1947) 74 CLR 358
Commonwealth Custodial Services Ltd v Valuer General (NSW) [2006] NSWLEC 400; (2006) 148 LGERA 38
Electricity Networks Corporation trading as Western Power and Bombara [2015] WASAT 105
Gosford Shire Council v Green (1980) 48 LGRA 201
ISPT Pty Ltd v Melbourne City Council [2008] VSCA 180; (2008) 20 VR 447
Italiano v Water Corporation [No 2] [2020] WASC 112
Kelliher v Commissioner of Main Roads [2015] WASC 478
Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413
Kirela Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [2003] NSWLEC 135; (2003) 131 LGERA 267
Konowalow & Felber v Minister for Works [1961] WAR 40
Lenz Nominees Pty Ltd v Commissioner of Main Roads [2012] WASC 6; (2012) 186 LGERA 58
Longworth v Commissioner of Stamp Duties (1953) 53 SR (NSW) 342
Love v Roads Corporation [2011] VSCA 434
Maidment v Roads and Traffic Authority of NSW [2006] NSWLEC 606; (2006) 153 LGERA 249
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
March v City of Frankston (No 1) [1969] VR 350; (1968) 24 LGRA 42
Marshall v Metropolitan Redevelopment Authority [2015] WASC 226
McKay v Commissioner of Main Roads [2013] WASCA 135
McKay v Commissioner of Main Roads [No 7] [2011] WASC 223
McKenna v Municipality of Burnie [1970] Tas SR 279; (1970) 22 LGRA 40
Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426
Minister Administering the Crown Lands Act v New South Wales Aboriginal Land Council [2009] NSWCA 151
Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149; (2004) 136 LGERA 16; (2004) 29 WAR 273
Mount Lawley Pty Ltd v Western Australian Planning Commission [No 3] [2008] WASCA 158
Multari v Roads and Traffic Authority (NSW) [2004] NSWLEC 649
Panizza v Western Australian Planning Commission [2005] WASC 95
Paramatta City Council v Valuer-General (1964) 10 LGRA 160
Pointe Gourde Quarrying & Transport Co Ltd v Sub-intendent of Crown Lands [1947] AC 565
Pollock v Wellington (1996) 15 WAR 1
Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353; (2004) 135 LGERA 98
Pownall v Conlan Management Pty Ltd (1995) 12 WAR 370
River Bank Pty Ltd v Commonwealth (1974) 4 ALR 651; (1974) 31 LGRA 24
Roads Corporation v Love [2010] VSC 32; (2010) 31 VR 451; (2010) 173 LGERA 1
Rosenbaum v Minister for Public Works (1965) 114 CLR 424
Sorell Council v Downie [2005] TASSC 2
Spencer v The Commonwealth (1907) 5 CLR 418
TE Davis Properties Pty Ltd v Roads and Traffic Authority of New South Wales [1995] NSWLEC 172
Trandos v Western Australian Planning Commission [2001] WASCA 346
Turner v Minister for Public Instruction (1956) 95 CLR 245;
van der Feltz and Rispoli [2021] WASAT 84; (2021) 102 SR (WA) 405
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259
Western Australian Planning Commission v Arcus Shopfitters [2003] WASCA 295
Western Power Corporation v Black [2007] WASCA 185
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
This is a compensation matter arising under the Land Administration Act 1997 (WA) (LA Act). The application is made pursuant to s 222(1) of the LA Act.
The matter involves an assessment of the compensation that is owed to Mr Mark Bombara (the Respondent) pursuant to the LA Act, arising from the acquisition of an easement (Easement) over his land (the Subject Land) by the Electricity Networks Corporation T/AS 'Western Power' (the Applicant).
The date on which the Respondent's compensation is to be assessed is 6 January 1995 (the Valuation Date). The Subject Land is conjointly owned by the Respondent together with other members of his family. The Respondent owns 2/6th of the Subject Land.
The Easement accommodates the Applicant's transmission line which is part of its electricity network. The Easement is approximately 60 metres wide and affects approximately 2.5 hectares of the Subject Land (which itself has an area that just exceeds 60 hectares).
There are essentially two issues in contest between the parties. The first is the development potential of the Subject Land as at the Valuation Date. That issue then informs the second issue, being the compensation that is ultimately owed to the Respondent.
The Respondent contends that, as at the Valuation Date, the Subject Land had potential for urban development, albeit that potential was deferred.
On the other hand, the Applicant's case is that, as at the Valuation Date, the value of the Subject Land was as rural land with no premium for development prospects.
As I will shortly come to, the history of this matter is long and complex. However, the relevant principles that apply are well-known and settled. The question of whether the Subject Land has urban potential beyond its rural zoning is the issue on which this case turns.
For the reasons that follow, I do not accept the Respondent's argument that the value of the Subject Land, for the purposes of assessing compensation under the terms of the LA Act, exceeded its value as rural land as at the Valuation Date.
I accept the Applicant's case that the development potential of the Subject Land was as rural land. The consequence of that is the Respondent is entitled to total compensation in the amount of $18,088.
Nature of the proceeding
The matter arises in the Tribunal's original jurisdiction: s 15(1) State Administrative Tribunal Act 2004 (WA) (SAT Act).
That being the case, it is for the Applicant to satisfy me, on the balance of probabilities, of the underlying facts which support its valuation of the Subject Land.[1] However, as I will come to explain, to the extent that the Respondent urges a highest and best use that was not the existing use being made of the Subject Land as at the Valuation Date, it is for him to satisfy me, on the balance of probabilities, that inter alia the contemplated use is lawful, likely, and not merely speculative.[2]
Background
[1] van der Feltz and Rispoli [2021] WASAT 84; (2021) 102 SR (WA) 405 [13].
[2] Land Acquisition, Newton & Conolly (7th Ed),[3.17]; [418]; Panizza vWestern Australian Planning Commission [2005] WASC 95, [8] (Blaxell J) (Panizza).
The relevant background is not contested and is drawn from the Applicant's Statement of Issues, Facts and Contentions (SFIC).[3] That background is as follows.
[3] Applicant's SIFC Exhibit 1.
On 1 February 1980, the State Energy Commission Act 1979 (WA) (SEC Act) came into effect. Section 7 of the SEC Act preserved the State Electricity Commission of WA, as constituted by the State Electricity Commission Act 1945 (WA), and it continued, by virtue of that section, its existence as the 'State Energy Commission of Western Australia' (SECWA).
Pursuant to s 46 of the SEC Act, SECWA served on the thenlandowners of a parcel of land, contained in Certificate of Title Volume 1710 Folio 751, a notice of entry dated 16 April 1987 (Notice).
The Notice advised the then-landowners that SECWA intended to enter their land to survey and carry out investigations in connection with a part of a significant piece of electricity infrastructure, being the proposed Muja-Kwinana 300kV transmission line (the Transmission Line).
On 2 December 1988, members of the Bombara Family became registered proprietors, as tenants in common, of the land the subject of Certificate of Title Volume 1710 Folio 751 and Volume 1256 Folio 318 (collectively, the Original Land) in the following shares: the Respondent (2/6th share), Mr Hugo Bombara (1/6th share), Mrs Marianne Verheggen (1/6th share) and Mr Alfredo Bombara (2/6th share). In these reasons, I will refer to these owners collectively as the Bombara Family. No disrespect is intended.
In the period 10 February 1992 through 30 May 1994, the Bombara Family became the registered proprietors, as tenants in common, of each of the following three separate parcels of land (collectively, the Subject Land). The Subject Land was created out of the Original Land:
(a)Portion of Peel Estate Lot 650 being the land the subject of Certificate of Title Volume 1923 Folio 818;
(b)Portion of Peel Estate Lot 1199 being the land the subject of Certificate of Title Volume 1926 Folio 263; and
(c)Portion of Peel Estate Lot 125 and being Lot 3 on Diagram 86318 being the land the subject of Certificate of Title Volume 2001 Folio 32.
For context, the Subject Land is (approximately) 30 kilometres south of the Perth Central Business District. The Subject Land was, and remains, located on Thomas Road, Casuarina. It is immediately southeast of the intersection of the Kwinana Freeway (Freeway) and Thomas Road. However, as at the Valuation Date, the Freeway reserve was in place adjacent to the Subject Land but had not been constructed.
The Bombara Family's ownership of the three lots comprising the Subject Land was as follows: the Respondent (2/6th share), Mr Bombara (1/6th share), Mrs Verheggen (1/6th share) and Mr Bombara (2/6th share).
Lot 3 and Lot 650 of the Subject Land were subject to an existing encumbrance (No Cl 10527) registered on 1 April 1981 to SECWA in respect of a 330kV transmission line. This transmission line is different to the Transmission Line that gives rise to this proceeding.
By letter dated 29 September 1994, SECWA notified the Respondent of its intention to enter the Subject Land to carry out construction of the Transmission Line. The Bombara Family, including the Respondent, was advised that clearing of vegetation within the corridor would commence midDecember 1994 and run through the summer of 1994/1995.
On 1 January 1995, the Electricity Corporation was established by s 4 of the Electricity Corporation Act 1994 (WA) (EC Act). The SEC Act was re-titled the Energy Corporations (Powers) Act 1979 (WA) (ECP Act).
SECWA's rights and assets, so far as they related to electricity operations, were, by s 44 and s 45 of the Energy Corporations (Transitional and Consequential Provisions) Act 1994 (WA), transferred to the Electricity Corporation.
By 6 January 1995, clearing of vegetation on the Subject Land for the corridor representing the route of the Transmission Line, had been completed. As I explained, 6 January 1995 is the 'Valuation Date' for the purposes of this proceeding. That is, I am to assess the compensation that is owed to the Respondent as at the Valuation Date. As at the Valuation Date, the Bombara Family was farming the Subject Land.
On 30 March 1998, the substantive provisions of the LA Act commenced. Also on that date, s 17, s 18 and s 63 of the Public Works Act 1902 (WA) (PW Act) were repealed, and the ECP Act was amended to, inter alia, replace references in s 45 of the PW Act with the LA Act in relation to the acquisition of land (including interests in land) and the payment of compensation.
On 1 July 2000, the ECP Act was retitled the Energy Operators (Powers) Act 1979 (WA) (EOP Act).
On 4 July 2000, pursuant to s 4(1) of the EC Act, as amended by s 14(3) of the Statutes (Repeals and Minor Amendments) Act 2000 (WA), the Electricity Corporation continued to exist as the same entity under its corporate name, Western Power Corporation.
On or around 9 April 2003, Western Power Corporation served a 'Notice of Intention to Take' (Taking Notice) on the Bombara Family under the EOP Act and s 170 of the LA Act.
The Taking Notice advised the Bombara Family that Western Power Corporation proposed to take an easement over the Subject Land for the purposes of the Transmission Line.
By taking order dated 8 October 2003, pursuant to the EOP Act and the LA Act, Western Power Corporation compulsorily acquired the Easement over the Subject Land, as well as over a number of other properties, for the purposes of the Transmission Line.
The Easement was registered by dealing No. 1653596, dated 8 October 2003. The Easement measures approximately 60 metres in width spanning approximately 2.5 hectares of the Subject Land (which, excluding the areas traversed by roads and drain reserves, totals just over 60 hectares in area).
On 1 April 2006, perforce of s 4(1)(b) of the Electricity Corporations Act 2005 (WA) (ECP Act), the Applicant was established (and commenced trading as 'Western Power' from 22 May 2006). Pursuant to s 147 of the ECP Act, Western Power Corporation's rights and obligations under the Easement were transferred to the Applicant.
Mr George Metcalfe prepared a valuation report for the Applicant dated 7 November 2007, recommending total compensation for the taking of the Easement of $20,000 (excluding solatium, interest and GST).
On 13 November 2008, the Applicant made an offer of compensation to the Bombara Family pursuant to s 217 of the LA Act in respect of the Easement of $43,843 plus interest at $4.38 per day calculated from 4 September 2008 (November 2008 Offer).
On 14 November 2008, the Respondent rejected the November 2008 Offer.
By letter dated 10 July 2009, the Applicant notified the Bombara Family of its intention to apply to the Tribunal for a direction pursuant to s 222 of the LA Act.
By application dated 16 April 2013, the Applicant applied to the Tribunal for directions under s 222(1) of the LA Act, naming the Bombara Family as respondents.
By letter dated 6 February 2015, the Applicant offered the Bombara Family an advance payment under s 248(1)(a) of the LA Act of the amount the subject of the November 2008 Offer, to be divided in accordance with their respective ownership shares in the Subject Land (Advance Payment Offer).
The deadline for acceptance of the Advance Payment Offer, initially fixed at 6 March 2015, was ultimately extended to 20 March 2015.
The Bombara Family did not respond to the Advance Payment Offer by 20 March 2015. By letter dated 24 March 2015, the Respondent advised the Applicant that it would not accept the Advance Payment Offer.
The Applicant responded by letter dated 2 April 2015, noting that the Advance Payment Offer had lapsed and that the Applicant did not propose to offer an advance payment outside of s 248 of the LA Act.
Procedural history
This matter involved determining a preliminary issue, namely the date of valuation on which compensation was to be assessed.
On 14 September 2015, the Tribunal delivered its reasons in Electricity Networks Corporation trading as Western Power and Bombara.[4] Applying the Court of Appeal's reasoning in Western Power Corporation v Black[5], the Tribunal held that the date of valuation for the purposes of the assessment of compensation payable to the Bombara Family was 'on or about 6 January 1995'.
[4] Electricity Networks Corporation trading as Western Power and Bombara [2015] WASAT 105.
[5] Western Power Corporation v Black [2007] WASCA 185 (Wheeler JA, Mclure JA, Buss JA) (Western Power v Black).
The Tribunal also held that no 'procedure' had been commenced for the purposes of the transitional provisions of s 200(2) of the LA Act. Therefore, the Respondent had no preserved right to receive compensation under the previous statutory regime.[6]
[6] Section 63 of the Public Works Act 1902 (WA).
By GDA 14 of 2015, the Respondent sought leave to appeal the Tribunal's decision, maintaining his contention as to the preservation of a vested and accrued entitlement, via the application of s 200(2) of the LA Act, to have his compensation claim determined by the Supreme Court under the PW Act, rather than the Tribunal under the LA Act. The appeal in GDA 14 of 2015 did not seek to challenge the Tribunal's finding that the relevant valuation date is 6 January 1995.
By GDA 15 of 2015, the remaining members of the Bombara Family also sought leave to appeal against the Tribunal's decision to the Supreme Court, contending that the Court of Appeal's decision in Western Power v Black had been wrongly decided. It was further contended, that the correct date for the purposes of assessing compensation was 8 October 2003, being the date of registration of the taking order.
On 20 December 2017, the Supreme Court delivered its reasons in Bombara v Electricity Networks Corporation T/As Western Power.[7]
[7] Bombara v Electricity Networks Corporation T/As Western Power [2017] WASC 37 (Kenneth Martin J).
With respect to GDA 14 of 2015, the Court held that the Respondent's claim must be determined by the Supreme Court under the regime of the PW Act, as it applied on 6 January 1995, and the Tribunal lacked jurisdiction to determine the Respondent's compensation.
With respect to GDA 15 of 2015, the Court refused leave to appeal as the Court of Appeal's decision in Western Power v Black was binding.
By appeal CACV 4 of 2018, the remaining members of the Bombara Family appealed the decision of the Court in GDA 15 of 2015 to the Court of Appeal.
By appeal CACV 12 of 2018, the Applicant also appealed the decision of the Court in GDA 14 of 2015 to the Court of Appeal.
On 12 April 2019, the Court of Appeal delivered its reasons in Bombara v Electricity Networks Corporation trading as Western Power.[8] The Court of Appeal allowed the Applicant's appeal in CACV 12 of 2018 and dismissed the Bombara Family's appeal in CACV 4 of 2018.
[8] Bombara v Electricity Networks Corporation trading as Western Power [2019] WASCA 62 (Murphy JA, Beech JA, Pritchard JA).
With respect to CACV 12 of 2018, the Court of Appeal found that the Court's application of the transitional provisions at first instance was erroneous. By the time the new legislative scheme (being the LA Act) came into operation, the Respondent did not have an accrued right to compensation. A 'procedure' for the purposes of s 200 of the LA Act had not been commenced.
By application P24 of 2019, the remaining members of the Bombara Family applied for special leave to appeal the Court of Appeal's decision in CACV 4 of 2018 to the High Court of Australia. By order dated 11 September 2019, the application for special leave was refused: Bombara v Electricity Networks Corporation T/AS Western Power.[9]
[9] Bombara v Electricity Networks Corporation T/AS Western Power [2019] HCASL 301.
On 4 February 2020, the Tribunal made orders, by consent, dismissing these proceedings as between the Applicant and Mr Hugo Bombara, Ms Marianne Verheggen and Mr Alfredo Bombara only, with no order as to costs.
The only remaining member of the Bombara Family who is yet to have their compensation entitlement determined, arising from the acquisition of the Easement, is the Respondent. Determining the quantum of compensation is now my task.
Planning history of the Subject Land
Regional planning framework
Metropolitan Region Scheme
At all relevant times up until, and after, the Valuation Date, the Subject Land was zoned 'Rural' in the Metropolitan Region Scheme (MRS).
Since 1 November 1963, the MRS has been the State Government's regional planning scheme for the Perth metropolitan region. The MRS comprises a set of scheme maps and text. The MRS had effect as if enacted by the Metropolitan Region Town Planning Scheme Act 1959 (WA) (MRTPS Act).[10]
[10] Section 32(2) of the Metropolitan Region Town Planning Scheme Act 1959 (WA).
The MRS was prepared to, in effect, provide a statutory basis to implement the recommendations of the Stephenson-Hepburn Plan for the Metropolitan Region Perth and Fremantle (1995).
The MRS was originally administered by the Metropolitan Region Planning Authority (MRPA). The MRPA was established by Pt II of the MRTPS Act.
Since the enactment of the (then) State Planning Commission Act 1985 (WA)[11] (SPC Act) on 6 December 1985, the Western Australian Planning Commission (WAPC) became, and remains, the 'responsible authority' for the MRS.[12] The short title of the SPC Act was subsequently renamed the Western Australian Planning Commission Act (WAPC Act).
[11] See also the Acts Amendment (State Planning Commission) Act 1985 (WA).
[12] Section 14(i) of the Planning and Development Act 2005 (WA); see also cl 5 of Metropolitan Region Scheme.
The zoning of the Subject Land in the MRS remained 'Rural' until April 1998 when MRS Amendment 981/33 took effect. MRS Amendment 981/33 rezoned the eastern portion of the Subject Land to 'Rural Water Protection'. Ms Amanda Butterworth explains, and I accept, that the purpose of MRS Amendment 981/33 was to protect groundwater on private land within the Perth metropolitan region.
In this regard, the Rural Water Protection zone was a new zone introduced into the MRS. I will shortly come to the significance of underground drinking water issues to this proceeding.
The balance of the Subject Land was ultimately rezoned in the MRS as 'Urban Deferred' (on 29 November 2007 via MRS Amendment 1117/33) and eventually 'Urban' (on 18 October 2013 via MRS Amendment 1257/33).
However, the MRS is not a complete statement of the regional planning framework for the Perth metropolitan region. Far from it.
The MRS provides an overarching structure for the planning of the Perth metropolitan region. By way of broad overview, the MRS is then informed, and supported, by a range of regional structure plans, strategies and planning policies. I now turn to that regional strategic framework.
Regional strategic framework
A strategic review of the operation of the MRS was undertaken in 1966. That culminated in the MRPA adopting the Corridor Plan for Perth in November 1970.
The Corridor Plan for Perth was reviewed in 1987. Mr Peter Goff opines, and it is not contested, that there was, at the time, a need to identify new urban land available for development within the Perth metropolitan region.
This led to the publication of the Urban Expansion Policy Statement for Metropolitan Perth in May 1990 (Urban Expansion Policy Statement). The draft and final versions of the Urban Expansion Policy Statement identified the Subject Land as remaining 'Rural'.
The new strategic plan for the Perth metropolitan region was named Metroplan (Metroplan) and was published in December 1990. Metroplan effectively adopted the recommendations of the Urban Expansion Policy Statement. Metroplan identified the Subject Land as remaining 'Rural'.
Regional structure planning
In 1993, the South West Corridor Structure Plan was reviewed. The review only focused on land south of Kwinana and therefore did not affect the Subject Land.
The consequence of this is that there was no relevant structure planning, at a regional level, as at the Valuation Date, that would suggest anything other than the Subject Land being 'Rural' land in the context of the MRS.
Underground drinking water issues
During the 1990s, the potential conflict between urban development (residential, commercial and industrial) and groundwater reservoirs which were public drinking water supplies, was recognised as an issue in the Perth metropolitan region.
In 1993, a Parliamentary Committee was established to investigate the issue. The Parliamentary Committee's terms of reference required it to inquire into and report on groundwater supplies within the Perth metropolitan region.
The report of The Select Committee on Metropolitan Development and Groundwater Supplies (Water Report) was published on 1 December 1994.
The Water Report describes the role of the Water Authority's statutory powers as follows:[13]
[13] Water Report, page 92.
Protection of water sources is achieved through the establishment of protection areas which are constituted under the Water Authority's Acts and By-Laws that apply therein. These areas encompass water catchments which feed surface and underground reservoirs or groundwater mounds that are used as sources of drinking water.
Proclamation of Public Water Supply Areas, Water Reserves and Underground Water Pollution Control Areas (UWPCAs) allow the Authority to take water from and to protect the quality of groundwater sources and use that water.
The Water Authority's Acts allow it to proclaim new groundwater protection areas, alter existing Control Area boundaries and to create or amend By-Laws that apply within those areas. The Acts are-
•Metropolitan Water Supply Sewerage and Drainage Act, 1909;
•Country Areas Water Supply Act, 1947.
The Metropolitan Water Supply, Sewerage and Drainage By-laws, 1981 as amended apply to the metropolitan catchments[.]
The By-Laws covering these areas give the Water Authority power to control potentially polluting activities, to regulate land use, issue development permits, inspect premises and to take those steps necessary to prevent or clean up pollution.
The Water Report also noted the existence and role of the (then) State Planning Commission's Policy DC 6.3 (Planning Considerations in the Metropolitan Region for Sources of Public Water Supply and Sensitive Water Resource Areas) (DC 6.3).[14]
[14] Water Report, page 42.
Furthermore, the Parliamentary Committee, noted the then Department of Planning and Urban Development's (DPUD's) 1992 draft Jandakot Land Use and Water Management Strategy[15] as well as the Environmental Protection Authority's draft Environmental Protection (Jandakot Mound Groundwater) Policy.[16]
[15] Water Report, pages 49-50.
[16] Water Report, page 50.
The Parliamentary Committee also noted the Water Authority's system of categorising land within Underground Water Pollution Control Areas (UWPCAs).[17]
[17] Water Report, page 96.
Priority 1 areas are the most important and a policy of risk avoidance is applied. These priority areas are usually Government owned.
Priority 2 areas generally already contain some development, usually of low intensity and are aimed at ensuring pollution is not increased (meaning that urban development was not likely) while Priority 3 areas are areas where other land values are more important than water protection, but where risks of pollution should be minimised.
The Parliamentary Committee made recommendations in relation to Priority 1, 2 and 3 areas. In addition, at Recommendation 4, the Parliamentary Committee recommended that the priority area boundaries be reassessed.
Recommendation 4.2 of the Water Report was in the following terms:
In redefining these boundaries, the principle should hold that the sustainable yield of water supply should be maximised while providing as much land as possible for other land uses, while taking into account the objectives of the Priority 1, 2 and 3 catchment classification.
At the time of the Parliamentary Committee's report, the Jandakot UWPCA extended from approximately the Roe Highway alignment in the north to Anketell Road in the south. It also included land west of the Freeway alignment.
The Jandakot UWPCA was proclaimed by notice dated 31 December 1992 in the Government Gazette, pursuant to the Metropolitan Water Supply Sewerage and Drainage Act ByLaws 1992 (WA), and included a map showing the area covered by the Jandakot UWPCA and its division into Priority Source Protection Areas.
Apart from two areas in the north, including Jandakot Airport, all the UWPCA east of the Freeway alignment was shown to be Priority 2. The Subject Land is approximately 2.2 kilometres to the south of the UWPCA as identified in this Gazette notice.
The boundaries of the Jandakot UWPCA, and its division into Priority areas under this By-Law, were not amended until 1 September 2000.
DC 6.3
DC 6.3 was undated and has since been replaced. However, DC 6.3 was originally adopted by the then State Planning Commission in August 1989.
DC 6.3 identified existing and proposed Public Water Supply Areas (PWSAs), which include surface water catchments as well as UWPCAs.
The Subject Land was identified in DC 6.3 within an area 'Proposed to be proclaimed for public water supply'. While DC 6.3 noted the proposed expanded PWSA, it did not specifically seek to prohibit urban development. Rather, it set down criteria to be followed in any assessment.
Jandakot Land Use and Water Management Strategy
Also, around this time, DPUD was preparing the Jandakot Land Use and Water Management Strategy (which was advertised for public comment in October 1992) (draft Strategy).
The draft Strategy includes an analysis of opportunities and constraints which were mapped. The constraints affecting the development potential of the Subject Land are shown to be:
(i)inclusion within a PWSA, as well as;
(ii)being within a 'Poorly Drained [Area] (water table within 1 metre of surface)'.
The 'Preferred Strategy' was identified at Figure 14 of the draft Strategy document. The Subject Land was shown to be within a 'Rural Landscape and Conservation Area'.
Figure 12 of the draft Strategy indicated that much of the Subject Land (approximately the western two thirds or 44.5 hectares) was potentially Priority 3, with the eastern third (16.5 hectares) being Priority 2.
In March 1995, the Jandakot Land Use Strategy was published (Final Strategy), several months after the Water Report was published. The Final Strategy included the following commentary on urban areas:
Proposed Urban land, including Possible Future Urban land, is concentrated on the north-east and western sides of the study area. It generally includes all the land designated as future urban in the Urban Expansion Policy (excluding the land which does not have environmental approval on the north side of Rowley Road generally between Lyon and Kinley Roads, Banjup). This comprises land generally east of the Beeliar Regional Park (South Lake and Jandakot) as well as land at Mandogalup (excluding the land affected by the Kwinana Air Quality Environmental Protection Policy) and Canning Vale. It also includes land east of the Kwinana townsite, up to the Freeway alignment, and south as far as Bollard Bullrush Swamp.
A number of submissions on the draft strategy sought to include additional land in the Urban or Possible Future Urban land use categories in Forrestdale, Jandakot, Banjup, Wandi and Wellard. Except for some additional land in Banjup and Wandi which is included in the Rural category but may have some urban potential in the future, these proposals are considered to present an unacceptable risk to the protection of groundwater and the environmental values of the area and/or are a major departure from METROPLAN and the Urban Expansion Policy for which there is no demonstrated need at this time.[18]
[18] Final Strategy, page 2.
In the context of rural areas, the Final Strategy stated:
The study area contains tracts of land where rural character plays an important part in the regional landscape. These areas also contain specific characteristics such as wetlands and remnant vegetation which form part of the regional landscape. In addition to fostering suitable agricultural activities, the protection of these values has been a significant function of rural areas in planning for the Perth metropolitan region.
The main areas included in the Rural category are parts of Forrestdale and Banjup to the north and parts of Anketell and Wellard to the south. In addition, this area encompasses substantial land holdings in the south-east of the study area, within Oakford and the Peel Estate in the Shire of Serpentine-Jarrahdale.
Rural activities can have a low to high impact upon groundwater depending on whether they are extensive or intensive and how they are managed. Rural activities in these areas will generally be supported where they are compatible with the protection of groundwater. At the same time the maintenance and enhancement of the landscape and conservation values is encouraged (e.g. Bollard Bullrush Swamp). However, given the limited financial viability of many rural activities within the study area there may be limited scope for alternative uses within parts of the area subject to stringent criteria.
The land on the north side of Rowley Road and east of Lyon Road in the vicinity of Kinley Road and the land on the south side of Rowley Road between the freeway and Lyon Road, Wandi may have some urban potential in the future pending further assessments of the groundwater and environmental issues.[19]
[19] Final Strategy, page 4.
The Foreword to the Final Strategy set out that:
The strategy is generally consistent with the findings of the Select Committee on Development over Groundwater Areas in the Metropolitan Region which reported to Parliament in December 1994.
One of the key recommendations in the Select Committee's report requires the Water Authority of WA, in consultation with other relevant government agencies, to review its priority groundwater area boundaries to ensure they are based on rigorous scientific evidence.
While the draft Strategy did indicate the possibility of Priority 1 and 2 areas in the extended Jandakot UWPCA south of Anketell Road, the question was not resolved in the Final Strategy. The question of whether the Subject Land was to be within a UWPCA was therefore unresolved as at March 1995.
Statement of Planning Policy No 2 - the Peel-Harvey Coastal Plain Catchment
On 21 February 1992, the WAPC published Statement of Planning Policy No 2 - the Peel-Harvey Coastal Plain Catchment (SPP 2) in the Government Gazette. SPP 2 was prepared pursuant to then s 5AA of the Town Planning and Development Act 1928 (WA) (TPD Act).
SPP 2 was focused on protecting the Peel-Harvey Estuarine System, in particular the management of phosphorous received from the PeelHarvey Coastal Plain Catchment. The Subject Land, together with land to the south, was within the Peel-Harvey Coastal Plain Catchment and was therefore subject to SPP 2.
The objectives of SPP 2 included inter alia the following objectives:
a)to ensure that changes to land use within the catchment to the Peel-Harvey Estuarine system are controlled so as to avoid and minimise environmental damage;
b)to balance environmental protection with the economic viability of the primary sector; and
c)to prevent land uses likely to result in excessive nutrient export into the drainage system.
In general terms, SPP 2 required inter alia:
a)that land not be rezoned for urban purposes unless the land was connected to deep sewerage or an alternate system satisfactory to the EPA and the Health Department would be available to all lots within the subdivision: cl 5.1, SPP 2;
b)regard be had to land capability/suitability criteria at the point of rezoning with respect to the net effect that such changes are likely to have on the nutrient load discharging from that catchment into the Peel-Harvey Estuarine System;
c)that retention and rehabilitation of existing native vegetation is to be encouraged, with a catchment target of 50% of land area established to deep rooted perennial plants; and
d)subdivision proposals were also required to make provision for a drainage system which maximises the consumption and retention of drainage on site: cl 5.5, SPP 2.
Statement of Planning Policy No 6 - Jandakot Groundwater Protection Policy
One of the recommendations of the Water Report was that a study be undertaken to review the priority boundaries within the Jandakot UWPCA.
The firm Dames and Moore was engaged to undertake this review in September 1995 and the study was completed in 1996. The review informed and led to the preparation and adoption of Statement of Planning Policy No 6 - Jandakot Groundwater Protection Policy (SPP 6) in the Government Gazette on 12 June 1998.
SPP 6 specified the various water priority areas and amended the boundaries of the Jandakot UWPCA to reflect bore locations and modelled impacts.
The effect of this was that a large part of the Subject Land, previously identified in DC 6.3 to be subject to water issues, was not identified as being required for public water supply purposes. This was shown on Figure 1 which was included in SPP 6.
SPP 6 was amended on 19 September 2003 to incorporate a new policy boundary based on scientific modelling.
Rural Water Protection zone in the MRS
Following on from SPP 6, and taking account of the need to protect public drinking areas more broadly, on 11 August 1996 the WAPC progressed MRS Amendment 981/33, the effect of which was to introduce a new Rural Water Protection zone in the MRS.
MRS Amendment 981/33 was finalised in April 1998. Approximately 16.5 hectares of the eastern moiety was zoned Rural Water Protection in the MRS.
Jandakot Structure Plan
Despite the effect of SPP 6 and MRS Amendment 981/33, which were finalised in 1998, the first strategic instrument prepared by the WAPC which identified that the Subject Land may have any kind of urban potential was the draft Jandakot Structure Plan (JSP) in October 2001.
The JSP was progressed after the announcement relating to the finalisation of the route for the passenger rail service from Perth to Mandurah after the 2001 State Election.
The draft JSP identifies the eastern portion of the Subject Land as being suitable for urban development. The JSP was finalised in 2007.
MRS Amendments 1117/33 and 1257/27
MRS Amendment 1117/33 rezoned the eastern portion of the Subject Land (being that portion of the land not zoned Rural Groundwater Protection) from Rural to Urban Deferred. MRS Amendment 1117/33 was advertised in June 2006 and was finalised on 29 November 2007.
MRS Amendment 1257/27 resulted in the urban deferred status of the Subject Land being lifted. MRS Amendment 1257/27 was Gazetted on 18 October 2013.
State Planning Strategy
Section 18(1)(b) of the WAPC Act required the WAPC to:
prepare a planning strategy for the State as a basis for co-ordinating and promoting regional land use planning and land development and for the guidance of Government Departments and instrumentalities and local authorities on those matters[.]
The WAPC commenced work on what became known as the State Planning Strategy in the early 1990s. That work included a series of discussion papers in 1991, including, in May 1991, a paper titled 'Options for Settlement Patterns to Accommodate Perth's Growth'.
In that discussion paper, four options for Perth's growth were outlined including regionalisation, satellite centres or lineal coastal development. None of the options suggested that urban development within the locality of Casuarina, including the Subject Land, was contemplated for future urban development.
The final State Planning Strategy was released in November 1996. (The word 'final' is something of a misnomer, as it is a 50-year strategy that will evolve over time.) Included within the final State Planning Strategy was Map 11b which showed an adopted vision for urban growth within the Perth metropolitan region. No urbanisation was shown in the vicinity of the Subject Land.
The regional planning framework in Western Australia is, by its nature, broad in scope. That regional framework is supplemented by a more detailed and focused local planning framework. I now turn to that local framework.
Local planning framework
Having regard to the Valuation Date, the principal instrument in the local planning framework was the City of Kwinana Town Planning Scheme No 2 (TPS 2) which commenced, by way of publication in the Government Gazette, on 20 November 1992. TPS 2 was the operative local town planning scheme as at the Valuation Date.
As at the Valuation Date, the Subject Land was zoned 'Rural A' in TPS 2.
The Subject Land remained zoned Rural A in TPS 2 until 2 June 2006 (until Amendment 80 to TPS 2 was published in the Government Gazette).
Amendment 80 zoned the eastern portion (approximately 14.5 hectares) of the Subject Land within the Rural Water Resource zone under TPS 2. This zoning coincided with MRS Amendment 981/33. Amendment 80 effectively brought TPS 2 in line with the MRS and then Statement of Planning Policy 2.3 (formerly known as SPP 6).
Upon the lifting of the deferment from the Urban zoning under the MRS, that portion of the Subject Land not included in the Rural Water Resource zone, was zoned 'Development' in TPS 2 on 18 October 2013, the same day that MRS Amendment 1257/33 took effect.
The effect of zoning the western portion of the Subject Land (approximately 44.5 hectares) as Development, was to facilitate structure planning and ultimately urban development. The remaining (eastern) portion of the Subject Land (approximately 16.5 hectares) continued to be zoned Rural Water Resource in TPS 2.
Eastern Residential Intensification Concept
In November 2005, the then Town of Kwinana (Town) released a District Structure Plan covering land along the Freeway route including Casuarina and the Subject Land.
This District Structure Plan responded to the WAPC's JSP (which was released for advertising in 2001) foreshadowing new urban zonings in the broader locality. The Council of the Town's plan was titled the 'Eastern Residential Intensification Concept' (ERIC).
ERIC identified several constraints on the Subject Land in addition to the transmission line corridors.
These included odours from a mushroom farm to the south, noise from dog kennels again to the south and odours from a piggery also to the south. The buffer areas for each of these uses overlapped, to some degree, with the Subject Land.
ERIC remains as a draft and has not been finalised.
Proposed rezoning of Casuarina land
On 28 June 1995, the Town considered a proposed rezoning of land at Casuarina, including the Subject Land in the MRS.
The proposed MRS amendment was put forward by landowners. The report prepared for the Council's consideration noted that, in the context of the regional planning framework, no land east of the Freeway had been identified in Metroplan or the Urban Expansion Policy Statement as an urban expansion area. However, the report did note some rezonings had occurred east of the Freeway in the City of Cockburn, north of the Subject Land.
The Council of the Town resolved to support the possible rezoning of the Subject Land in the MRS. However, that support was heavily qualified, including resolution of the Jandakot UWPCA study recommended in the Water Report.
Furthermore, the support was conditional on potential hydrological issues, including groundwater, being 'verified' by the Water Authority and the (then) Department of Environmental Protection.
Statutory scheme of the LA Act
The LA Act authorises the taking of an interest in land for the purposes of a public work.[20] For the purposes of Pt 9 of the LA Act, an interest includes 'any legal or equitable estate or interest in land'.[21]
[20] Section 161 of the LA Act.
[21] Section 151(1) of the LA Act.
It is not in contest, and indeed it must be the case, that the acquisition of an easement from an owner for the purposes of an electricity transmission line is compensable.[22]
[22]Arrow v Electricity Commission (1994) 87 LGERA 363 (Bignold J).
The effect of the registration of a 'taking order' is to extinguish the interest in land and to convert that interest into an entitlement to compensation under Pt 10 of the LA Act.[23]
[23] Section 179 of the LA Act.
Section 202(1) of the LA Act provides that every person who has an interest in land taken under Pt 9 (as was the case here) is entitled, subject to Pt 10, to compensation for that interest from the acquiring authority.
Compensation under Pt 10 of the LA Act may be determined in any number of ways, including by reference to the Tribunal.[24]
[24] Section 220(c) of the LA Act.
In this instance, as the Respondent, in effect, rejected the Advance Payment Offer and did not commence proceedings within six months after the service of the notice of rejection, the acquiring authority (the Applicant) was permitted, after giving notice, to refer the matter to the Tribunal.[25]
[25] Section 222(2) of the LA Act; refer [37] to [42] for the relevant history in this matter.
In dealing with a claim for compensation under Pt 10, the Tribunal is to be constituted pursuant to s 226 of the LA Act. I am a 'senior member who is a qualified person' for the purposes of s 226(1)(a) of the LA Act.[26]
[26] Section 3(1) of the SAT Act.
In determining the compensation, if any, payable for the taking of an interest in land under Pt 9, regard is to be had solely to the matters identified in s 241 of the LA Act.[27]
[27] Section 241(1) of the LA Act.
Of the various heads of compensation set out in s 241 of the LA Act, the following arise in this proceeding:
a)the value of the interest in the land assessed as at the Valuation Date;[28]
b)the amount appropriate to compensate for the taking which is to be added to the award or offer;[29] and
c)whether exceptional circumstances exist to justify an amount more than 10% for the purposes of s 241(8).[30]
[28] Section 241(2) of the LA Act.
[29] Section 241(8) of the LA Act.
[30] Section 241(9) of the LA Act.
Having regard to the nature of the interest acquired, being an easement, s 241(7) of the LA Act is not engaged.
The Easement
In terms of the interest acquired, the taking order dated 8 October 2003, included the terms of the Easement. These terms, inter alia:
(a)bound the registered proprietors and successive owners;
(b)set out the Applicant's rights of entry and maintenance;
(c)regulated the use of the Subject Land in the area subject to the Easement;
(d)placed restrictions on certain activities, for example, blasting; and
(e)vested the taken interest in the Applicant.
Issues for determination
The parties consider, and I agree, that the following two issues arise for determination:
Issue 1
What, having regard to the planning framework at the time, was the urban development potential of the Subject Land as at the Valuation Date?
Issue 2
Having regard to the value of the Subject Land as at the Valuation Date, what is the amount of compensation payable to the Respondent for the Applicant's compulsory acquisition of the Easement over the Subject Land?
Overview of the parties' cases
Applicant's case
The Applicant's case is that the Subject Land was, and should be valued as, rural land as at the Valuation Date.
As at the Valuation Date, the Applicant submits that the planning evidence establishes that:
a)the planning framework did not designate or contemplate an urban zoning over any portion of the Subject Land; and
b)the Subject Land:
i)was 2.2 kilometres south of the Jandakot UWPCA and the Parliamentary Committee, which authored the Water Report, had recommended a review of the priority boundaries for UWPCAs based on 'rigorous evidence';
ii)had been identified in the draft Strategy as being within a 'rural landscape and conservation area' as well as being in either a Priority 3 or Priority 2 area;
iii)was subject to SPP 2 which required development to be deep sewered; and
iv)was relatively low lying making draining and nutrient control more difficult.
For these reasons, the Applicant says that the valuation provided by Mr Metcalfe is to be preferred.
Respondent's case
The Respondent's case is that, as at the Valuation Date, the Subject Land had long-term potential for urban development. As a result, the Subject Land would not have been, and should not be, valued only as rural land.
Rather, a hypothetical Spencer v The Commonwealth[31] (Spencer) purchaser would have paid an amount that exceeded rural values having regard to the Subject Land's long-term urban prospects.
[31] Spencer v The Commonwealth (1907)5 CLR 418.
The Respondent claims compensation for the acquisition of the Easement of approximately $166,971.
The Respondent submits that the question of the Subject Land having urban potential was not 'fanciful' but was, as Mr Goff 'agreed', 'realistic'.[32]
[32] ts 213, 17 May 2021.
Furthermore, the valuers each agree that there may have been 'long term future potential for the Subject Land to be rezoned for a higher use'.
In terms of urban prospects, the Respondent's case is that Mr Martin's (urban potential) valuation sets out the price that a hypothetical Spencer purchaser, willing to pay for the potentiality of the Subject Land, would consider appropriate in the circumstances.
Evidence
In this matter, I heard from five witnesses. Four experts gave evidence as well as the Respondent.
I had the benefit of evidence from two town planners: Mr Goff for the Applicant and Ms Butterworth for the Respondent. I also heard from two valuers: Mr Metcalfe for the Applicant and Mr Martin for the Respondent.
Overview of the evidence
The Respondent - Mr Bombara
Mr Bombara's evidence canvases his professional background as a valuer as well as his dealings with the Applicant in terms of the acquisition of the Easement. Mr Bombara feels aggrieved as to how the Applicant has treated him. He notes that the first offer of compensation was made in November 2008, some 13 years after the Valuation Date.
Mr Bombara outlines that, in his view, the Applicant has conducted itself in a manner that is 'entirely inconsistent with any compensatory principles' on account of the delay between the Valuation Date and any offer of compensation. He says he feels 'cheated by the system'. A timelier offer of compensation, he says, would have given him the opportunity 'to make a decision about whether I should purchase a replacement asset (or similar)'.
He further explains that the Applicant's conduct has caused him 'considerable distress and inconvenience'. He considers that he has suffered 'unquantifiable loss and inconvenience due to the conduct of the [Applicant] over and above what is provided for in the relevant legislation'.
While Mr Bombara did not give expert evidence per se, he did articulate his views - via the inclusion of a valuation by another valuer - relating to the comparable value of the Subject Land. Mr Bombara 'concurred' with this valuation. Over the Applicant's objection and having regard to s 32(2) of the SAT Act, I allowed Mr Bombara's statement to stand.
However, to the extent Mr Bombara attempts to give expert valuation evidence, I decline to give such evidence any weight. Mr Bombara is a party to the proceeding and has a direct interest in the outcome. He is a long way from being able to give an independent expert opinion, despite his qualifications and experience.
Mr Bombara considers his 'losses are far greater than those which can be calculated pursuant to the statutory regime'. He feels, as the dispossessed owner, there is only one manner in which he may be truly compensated - being the purchase of a replacement property. Mr Bombara considers that appropriate compensation is in the order of $19,000,000 plus costs.
Mr Bombara's evidence is plainly, and fundamentally, inconsistent with the case he, as the Respondent, has pleaded in his SIFC. The Respondent did not at any time seek leave to amend its case or the orders sought having regard to Mr Bombara's evidence.
The planning evidence
Both Mr Goff and Ms Butterworth are qualified and experienced town planners. Both planners have considered the development potential and prospects of the Subject Land as at the Valuation Date. The planners prepared individual witness statements as well as a joint report.
The town planners' joint report was of assistance in helping me identify the precise contest that is for me to resolve, in terms of the development potential of the Subject Land as at the Valuation Date.
Mr Goff
Mr Goff outlines that there were no planning or other documents in existence before the Valuation Date which supported urban development on the Subject Land.
The Subject Land has a high-water table, much of it less than 1 metre below the surface. Figure 13 of the draft Strategy identifies the Subject Land, together with much of the surrounding locality, as 'poorly drained' with a water table within 1 metre of the surface.
The Subject Land was also identified in wetlands mapping (being Wetlands of the Swan Coastal Plain, Vol 2B, AL Hill, CA Semeniuk, V Semeniuk, A Del Marco, 1996) as being partially affected by wetlands as sump land with a management category of 'multiple use'.
Around the Valuation Date, DPUD released the draft Strategy for public comment. The Strategy was finalised in March 1995, shortly after the Valuation Date. Both the advertised and final version of the Strategy recommended that the Subject Land remain rural.
Having regard to the concerns at the relevant time (in the 1990s) on development of land over public drinking water supplies, embodied in the Water Report, it is Mr Goff's opinion that there was 'no realistic prospect of the Subject Land being considered for 'Urban' zoning at the Valuation Date'.
While the Town did 'support' an Urban zoning in July 1995, shortly after the Valuation Date, that support was heavily qualified. Mr Goff considers that other agencies likely to be consulted during the scheme amendment process would likely have objected to the rezoning of the Subject Land on the basis of the issues relating to public water supply, as well as other environmental issues such as the high-water table, surrounding land uses and buffer requirements.
While the Subject Land's high-water table was not an absolute constraint to development, it does affect development in that it requires a level of detailed studies to demonstrate which areas may be suitable for urban development. While such issues are not fatal to an urban rezoning, and could ultimately be resolved through filling and draining, Mr Goff considered that the high-water table would ultimately delay any such development.
Furthermore, ERIC later identified that the Subject Land is also affected by buffer issues associated with a mushroom farm, piggery and dog kennels. While there are no precise details on when such uses commenced, Mr Goff considers it logical that such uses commenced before the Subject Land and surrounding localities came under consideration for inclusion within a public drinking water supply area.
Mr Goff considers that, as at the Valuation Date, a proposal to rezone the Subject Land would have failed primarily on account of the public drinking water supply issue and also taking account of the cumulative effect of other factors such as the high-water table, State Planning Policy 2.1, the presence of remnant vegetation across the Subject Land, the impact of the existing power lines as well as the nature of such of the surrounding land uses.
While buffers relating to surrounding land uses - such as the mushroom farm, the dog kennels and piggery - did not impact the entirety of the Subject Land, Mr Goff doubts that a piecemeal rezoning to Urban would have been contemplated by the WAPC. Mr Goff considers that the WAPC would require a comprehensive approach to the planning of the Subject Land. The existence of close-by uses such as a mushroom farm, dog kennels and a piggery - together with the drinking water issue would militate against the potential rezoning of the Subject Land.
Despite the Town's qualified support for a rezoning of the Subject Land in July 1995, Mr Goff considers that there was no real prospect of an Urban rezoning until June 1998 when the potential expansion of the Jandakot UWPCA was finalised (and was found not to have impacted the western 44.5 hectares of the Subject Land).
The prospect of an Urban zoning of the western portion of the Subject Land was ultimately enhanced as plans evolved for the Perth to Mandurah Railway line and the release of the JSP in October 2001.
Mr Goff, as he explained in detail in his report of February 2020, is of the view that 'the Subject Land had no realistic prospect of Urban zoning' as at the Valuation Date. He further states that '[w]ith or without the [Transmission Line], it is my opinion that as at the Valuation Date, the Subject Land zoning potential under the MRS was 'Rural'.
Ms Butterworth
Ms Butterworth's witness statement is, in effect, a review of Mr Goff's statement (as well as that of Mr Metcalfe). It is not in the form of an independent stand-alone planning report. Rather it is a running commentary of where she agrees and disagrees with the witness statement of Mr Goff.
Her instructions in this regard were set out in a letter from Bennett + Co dated 21 October 2020 which requested that she provide a written report which:
(a)responds to the content of the Metcalfe and Goff Reports, noting in particular any assumptions, conclusions or methodologies that you do not agree with and explaining reasons for that disagreement; and
which addresses the following question
(b)does the conclusion made in the Goff Report (i.e. that at 6 January 1995, the Subject Land had no realistic prospect of 'Urban' rezoning) mean that there was never any prospect that the Subject Land would be rezoned at any time in the future?
I must say that Ms Butterworth's statement reads to me as very guarded, cautious, even opaque. As I will come to explain, I have not found Ms Butterworth's evidence to be terribly helpful. Rather than assist the Tribunal by providing forthright evidence, I consider she has attempted to 'muddy the waters' by providing, in effect, a critique of Mr Goff's statement. To the extent that Ms Butterworth's statement seeks to critique Mr Metcalfe's work, I have had little regard to it. I am far from certain it is Ms Butterworth's role to outline what Mr Metcalfe ought to properly consider in terms of valuing the Subject Land.
In saying that, I mean no criticism of Ms Butterworth. This is because she has prepared a report consistent with her instructions.
While outlining areas where Mr Goff's evidence is not agreed may be a helpful exercise (especially in advising the Respondent), it does not, of itself, provide positive evidence of the development potential of the Subject Land.
In an overall sense, Ms Butterworth generally agrees with Mr Goff on the development potential of the Subject Land as at the Valuation Date. Nevertheless, she reaches the overarching view that, in effect, one should 'never say never' in relation to the development potential of the Subject Land.
For instance, she agrees with Mr Goff that:
… based upon the documentation provided, [I do] not dispute that prior to January 1995, there did not appear to be any publicly advertised proposal before the WAPC to zone the [Subject Land] to anything other than Rural.
However, she says that:
[i]n 1995, not all reports of the WAPC were available for public scrutiny, therefore I am unable to verify with certainty that is the case.
I am not sure what I am to make of such evidence. Ms Butterworth does not point to any particular document, study or report that she is aware of at the relevant time, that was not publicly available, that may otherwise have informed the development potential of the Subject Land.
Moreover, if one did exist that was not publicly available, how would that have informed the question of the hypothetical Spencer purchaser's knowledge of the potential of the Subject Land as the Valuation Date?
In Kelliher v Commissioner of Main Roads (Kelliher), Pritchard J expressly referred to need for such documents to be 'in the public domain'.[33]
[33] Kelliher v Commissioner of Main Roads [2015] WASC 478 [211] (Pritchard J) (Kelliher).
Furthermore, Ms Butterworth sets out the following:
Notwithstanding, we [Ms Butterworth does not explain who she means by 'we'] consider the statutory planning framework to be continually evolving and the fact that the [Subject Land] was zoned Rural in 1995 does not necessarily mean that the land will always be zoned Rural. Furthermore, the Urban zone comprising the [sic] Perth Metropolitan Region has generally expanded over time. Therefore, whilst it may have been the case that the publicly available planning framework applicable at [the Valuation Date] did not contemplate the Urban development of this site, that is not to say that the land was not capable and appropriate for Urban development at some point in time in the future[.]
That is as far as Ms Butterworth's analysis goes. No further details or analysis is provided as to when she considered the urban prospects of the Subject Land may have been realised.
Her overall conclusion appears to be:
So, whilst I consider that approval of the rezoning of the whole or portion of the [Subject Land] from Rural to Urban was in 1995 [sic] was unlikely, it may have been a possibility that at least a portion of the [Subject Land] could be contemplated for rezoning to Urban.
In terms of the public water drinking issue, Ms Butterworth disagrees with Mr Goff's assessment that an Urban rezoning of the Subject Land had little prospects because the studies to define the Priority 2 areas had not yet been undertaken.
Ms Butterworth agrees that the Parliamentary Committee recommended that scientific analysis be undertaken and that it may be premature to consider a rezoning in the absence of that scientific analysis.
However, Ms Butterworth says that the scientific uncertainty as to whether the Subject Land was to be included in a public drinking water supply area would not have precluded consideration of an MRS amendment, 'it simply delays it'.
Ms Butterworth further explains, after the scientific findings were released, an MRS amendment was later progressed which ultimately culminated in 44 hectares of the Subject Land being rezoned as Urban Deferred (on 29 November 2007) and eventually Urban (on 18 October 2013).
The remaining portion of the Subject Land (some 16.5 hectares) had been zoned Rural Water Protection via MRS Amendment 981/33 which was initiated in 1996 and which was finalised in April 1998. The purpose of MRS Amendment 981/33 was to protect groundwater on private land within the metropolitan region.
Ms Butterworth also notes that in 2019 (well after the Valuation Date), a local structure plan was prepared for a portion of the Subject Land that identified commercial land uses in the north-west corner as well as inter alia bulky goods showroom, liquor store, motor vehicle repairs and petrol filling.
Ms Butterworth agrees that, as at the Valuation Date, the published statutory and strategic planning framework did not designate or contemplate an Urban zoning over any portion of the Subject Land. However, Ms Butterworth goes on to explain that:
… that is not to say that the [Subject Land] would never be capable of Urban development, it was simply not identified within the strategic planning framework as being for Urban development on or before the [Valuation] Date.
Ms Butterworth also says that the Subject Land was identified as being within the Priority 3 policy area in the 1992 draft Strategy. Policy 3 areas can support Urban development provided acceptable safeguards were in place. Ms Butterworth concludes as follows:
… So, whilst not identified specifically for Urban, the planning framework could be interpreted to include a degree of support for urbanisation.
Ms Butterworth further explains that in her opinion:
… if the rigorous scientific evidence found that all or part of the [Subject Land] was within a Priority 3 area then the recommendations of the Select Committee were that Urban use and commercial development would be acceptable activities. I accept that an MRS rezoning to rezone the [Subject Land] from Rural to Urban lodged on or before the [Taking] Date may not have had a strong chance of success in the absence of the rigorous scientific evidence in response to the findings of the Select Committee. I also accept that the rigorous scientific evidence in response to the recommendations of the Select Committee were not publicly available as at the [Taking] Date. However, I don't accept the proposition that there is no realistic prospect of the [Subject Land] being rezoned to Urban, it may have been simply premature to consider such a rezoning for the [Subject Land] on or before the [Valuation Date][.]
In relation to the mushroom farm, Ms Butterworth does not support Mr Goff's general assumption that its buffer requirements would have impacted on the timing of the Subject Land being utilised for urban purposes. Ms Butterworth was unable to verify details of the dog kennels and the piggery.
Planners' joint statement
In their joint statement, the planners largely agreed on the planning framework applying to the Subject Land as at the Valuation Date.
Importantly, the planning experts agreed that, as at the Valuation Date, the applicable planning framework did not contemplate urban zoning.
That is the extent of the agreement between the planners in relation to the development potential of the Subject Land as at the Valuation Date.
As I have explained, Mr Goff's overall view is that, as at the Valuation Date, the Subject Land 'had no realistic prospect of urban zoning' and that any such prospects 'did not emerge until sometime later'.
Ms Butterworth's opinion is that the 'likelihood of an urban zoning was low in the near future after 1995 but given the proximity to the Freeway, the Urban zoning on the western side of the Freeway it is considered likely to have a urban zoning in the longer term'.
Ms Butterworth also considers that:
… following the recommendations of the [Water Report], the boundaries of the [Jandakot UWPCA] were reviewed. The review resulted in a decrease in the underground water pollution control area coverage, leaving an area without strategic planning direction….it is possible that the [Subject Land] was not considered suitable for urban development because it was identified as being 'within an area proposed to be proclaimed for public water supply'.
The valuation evidence
Both Mr Metcalfe and Mr Martin are licensed and experienced valuers. They have each prepared a valuation report and have also filed a joint statement.
Mr Metcalfe
The Applicant's valuer, Mr Metcalfe, was retained in 2013. However, his initial valuation report was done in 2007. For the purposes of this hearing, he explains that his views remain unchanged from those he set out in his 2007 report (which were set against a Valuation Date of 10 January 1995).
Mr Metcalfe considers, and I agree, that there is no material difference between the Valuation Date and 10 January 1995, for the purposes of assessing the compensation that is payable to the Respondent. Indeed, in fairness to the Respondent, no issue was made with that slight difference in dates.
Mr Metcalfe ultimately considers that the value of the interests taken from the Bombara Family is $20,000 for the purposes of s 241(2) of the LA Act. He did not address the question of solatium or interest.
In terms of his investigations, Mr Metcalfe discussed the development potential of the Subject Land with planning staff at the Town. He also reviewed the planning report by Landvision Consultants (Landvision) which was prepared for Main Roads Western Australia at the time of the Freeway extensions in 1999.
Those investigations indicated that it was recognised that the western portion of the Subject Land was regarded as having development potential; the eastern moity was viewed differently. The development potential of the eastern moity was regarded as either rural or special rural. The Landvision report stated the following (in the context of the Freeway extension in 1999, four years after the Valuation Date):
Because the freeway forms a boundary between urban/urban deferred and rural zoned land the subject land could in this hypothetical situation fall into either zone.
However this boundary has been fixed in the location because of the freeway. It is therefore more appropriate to consider where the urban/rural interface would have occurred in the absence of the freeway.
Mr Metcalfe adopted an orthodox comparative sales method. His basket of sales included 11 transactions. Two of the sales in his basket are allotments that comprise the Subject Land some six to seven years prior to the Valuation Date. Those sales evince a purchase price of the Subject Land between $6,610 and $8,273 per hectare.
Mr Metcalfe's basket of sales also includes:
a)Lot 500 Thomas Road, Anketell in December 1994 (Lot 500). The land area was 12.2 hectares and the land had a rural zoning and is located approximately 1 kilometre east of the Subject Land. The land was cleared, fenced and improved with a market garden, house and sheds. The sale price of $350,000 disclosed an (analysed) rate of $24,557 per hectare.
b)Lot 18 Thomas Road, Anketell in April 1994 (Lot 18). The sale price of $195,000 for 5.52 hectares evinces a price of $19,000 per hectare. The land was zoned rural, cleared, fenced and pastured and included two brick and tile dwellings. After allowances the sale analyses to $18,000 to $20,000 per hectare.
c)Lot 1041 River Road, Hopelands in January 1995 (Lot 1041). The sale was for $350,000 for 29.12 hectares and evinces a rate of $12,016 per hectare. The land was rural, cleared, fenced and pastured. The land was low-lying but comprised soils suitable for hay production.
d)Lots 12 & 14 Thomas Road, Anketell in October 1992. The sale price was $315,000 for 63.73 hectares. The sale evinces a rate of $4,943 per hectare. The land was zoned rural and was cleared and fenced parkland. Located approximately 1 kilometre east of the Subject Land.
e)Lot 1128 Leipold Road, Oldbury in December 1994 (Lot 1128). The sale price for 17.25 hectares was $165,000. The land was zoned rural, cleared, fenced and pastured. The sale evinced a value of $9,565 per hectare.
f)Lot 5 Punrak Road, Serpentine was transacted in September 1994 (Lot 5). The sale price was $270,000 for 20.37 hectares which equates to $13,247 per hectare. The land was zoned rural, cleared, fenced and pastured and included five poultry sheds.
Mr Metcalfe's opinion is that the range of values for what he regards as comparable rural land, as at the Valuation Date, was between $10,000 to $24,000 per hectare. The appropriate basis for a valuation is on a dollar per hectare cleared, fenced pastured and water hectare excluding buildings basis. Mr Metcalfe adopted a piecemeal approach to his valuation.
Mr Metcalfe's analysis is that the sales evidence indicates a per hectare value of the Subject Land as at the Valuation Date of $17,500 as rural zoned land in the southern metropolitan region. Mr Metcalfe considers that this figure reflects the potential of the Subject Land at the relevant time and acknowledges the prevailing perception that the eastern portion of the Subject Land had less potential for more intensive uses.
Mr Metcalfe also considers that this perception has been borne out with the western moity ultimately able to achieve a higher zoning including commercial uses. This contrasts with the eastern moity which, as at the date of the report, had 'no demonstrated potential for more intensive uses'. While Mr Metcalfe did refer to the sales evidence of the Subject Land, his valuation was adjusted to reflect the rural rates being realised in 1995.
Mr Metcalfe applies a compensation rate of $17,500 per hectare across the 4-metre-wide access track and the land which is directly underneath the transmission towers.
That amounts to 0.2100 hectares x $17,500 = $3,675.
In terms of the remainder of the Subject Land, having regard to the fact that it was an Easement that was taken, Mr Metcalfe acknowledges the central position of the Easement and the low intensity of land use applicable as at, and subsequent to, the Valuation Date. He considers that an appropriate percentage of land value allowance is 40%. Mr Metcalfe notes that guidelines indicate that an allowance of between 25% to 35% should generally apply.
Mr Metcalfe considers that an allowance of 40% is appropriate on the basis that, as at the Valuation Date, the 'highest possible future use was perceived to be for special rural subdivision and the impost of the easement would not inhibit such a development'.
The amount for the balance of the easement area (after allowance for the tower areas and access track) is 2.3202 hectares x $17,500 x 40% = $16,241.
The overall value is therefore $19,916 ($3,675 + $16,241) which should be rounded up to $20,000 (excluding interest and solatium). Mr Metcalfe did not prepare any valuation on the basis that the Subject Land had urban potential as at the Valuation Date.
The Respondent is entitled to 2/6th of $20,000 plus solatium and interest.
Mr Martin
Unlike Mr Metcalfe, Mr Martin has considered two alternative valuations of the Subject Land. One valuation assumes that the Subject Land has urban potential as at the Valuation Date. The other valuation assumes only rural values.
By way of general commentary, Mr Martin considers that the impact on values of overhead infrastructure, such as transmission powerlines, needs to be carefully considered. That is, there is a greater impact on values (thereby occasioning the need for a greater allowance) by reason of overhead infrastructure (such as overhead transmission lines) as against infrastructure such as pipelines which may be subterranean.
Mr Martin considers, again in general terms, that allowances of 30% to 40% would ordinarily be appropriate where overhead transmission lines traverse broadacre agricultural land. In the case of land that is considered suitable for urban development, the impact of overhead transmission lines is considered to be greater for two reasons. First, the land within the easement area cannot be used for such purposes. Second, there is a blighting effect due to the unsightly nature of the transmission lines.
Mr Martin also notes, quite reasonably in my view, that the valuation exercise relates to a Valuation Date that is over 25 years ago. While Mr Martin considers the information he has relied upon to be accurate, not all details have been able to be formally verified.
Having regard to the effluxion of time since the Valuation Date, I accept that caveat, although it applies equally to Mr Metcalfe's work as well as the evidence of Ms Butterworth and Mr Goff.
Mr Martin refers to the impact of the alignment of the second transmission line easement (the Easement) through the Subject Land creates a triangular wedge of land with an area of 1.2062 hectares. This area of land is, in effect, 'stuck' between the two electricity transmission easements. Mr Martin considers this wedge of the Subject Land to be 'severely impacted, in the after scenario'.
Mr Martin considers that the prospective purchaser must consider three questions in arriving at a purchase price. Those questions are:
a)What is the highest and best use of the Subject Land?
b)Who is the most logical buyer - a land banker, developer or investor? and
c)How would the most logical buyer determine the price he or she is prepared to pay?
Rural land valuation
In the context of his rural valuation, Mr Martin's basket of comparable sales includes the Subject Land (1988 and 1989) historical sales (1989 to 1992) as well as sales transacted around the Valuation Date.
Of the rural sales that were transacted around the Valuation Date, Mr Martin's basket of sales includes Lot 500, Lot 5, Lot 18, Lot 1041 and Lot 1128 (which were all relied on by Mr Metcalfe). Mr Martin refers to the evidence set out in Mr Metcalfe's valuation. Mr Martin sets out that Mr Metcalfe's valuation of the Subject Land as rural land, at a per hectare rate of $17,500, 'is fair and reasonable'.
Mr Martin notes that, in general terms, an easement does not overly restrict the use of land for rural purposes. The impacts of an easement (and the associated transmission infrastructure) is more acute on land with urban potential.
In terms of a reasonable allowance for the impact on agricultural land, Mr Martin considers that an acceptable range is between 25% to 40%, even up to 50%, although he considers it is 'a somewhat subjective assessment'.
Rather than Mr Metcalfe's piecemeal assessment of an allowance (100% under the towers and 40% across the residual land forming part of the Easement), Mr Martin makes an allowance of 50% across the land the subject of the Easement. However, for the triangular portion of the Subject Land wedged between the two sets of electricity transmission lines, Mr Martin applies a higher allowance of 70% on the basis that this land 'is impacted more'.
This translates as follows: 25,302m2 x $1.75m2 = $45,000 x 50% = $22,500.
For the triangular wedge of land between the two transmission line easements: 12,062m2 x 1.75m2 = $21,108.50 (rounded to $20,000) x 70% = $14,000.
Mr Martin's assessment of compensation is therefore $22,500 + $14,000 = $36,500. The Respondent is owed 2/6th of $36,500 plus solatium and interest.
Urban potential
In terms of his 'urban' sales evidence, much of it post-dates the Valuation Date by over three years. As I will shortly come to, such sales can be utilised to inform the question of market value, but three years is a considerable period in time after the Valuation Date. These sales include:
a)Lot 1, Warnbro Sound Avenue, Port Kennedy which sold in May 1998. The land was vacant and zoned Urban with an area of 31.7 hectares. The sale discloses a rate of $9.05m2 ($90,500 per hectare). Described as 'ripe for development'.
b)Lot 2, Cnr Lake Road and Pool Street, Armadale (Lot 2) which was transacted in April 1998. The land was 9.77 hectares, vacant and zoned 'residential development'. The sale discloses a rate of $7.98m2 ($79,800 per hectare). Land is described as 'modest in an average area'.
In Cerini v The Minister for Transport[111] Parker J outlined that s 241(9) of the LA Act is confined to the additional amount, provided for in s 241(8), which is appropriate to compensate for the taking without agreement. (my emphasis)
[111] Cerini v The Minister for Transport [2001] WASC 309 [287] (Parker J).
Section 241(9) of the LA Act does not create a distinct power to award compensation, or a new head of compensation.[112]
[112] McKay [2805] (Beech J).
The Respondent relies on the following three matters as a basis for his claim of 'exceptional circumstances'.
First, in 2003 the Respondent was engaged in similar negotiations with Main Roads WA. He was offered an advance payment on 3 March 2000. He therefore expected that the Applicant 'would act with professionalism, courtesy and engage in open and frank negotiations'. The Respondent submits that the reasonable expectations of a party may be a matter relevant to solatium.[113]
[113] Roads Corporation v Love [2010] VSC 32; (2010) 31 VR 451; (2010) 173 LGERA 1 (Osborn J) [164] (Roads Corp v Love).
I am not satisfied that this matter falls within the principle of compensation for 'taking without agreement'. The events relied upon were well after the Valuation Date, but I accept were somewhat proximate to the Taking Notice.
However, the question of principle remains. I do not accept that the Respondent's concern at being as to how he would be, or was being, treated by the Applicant, especially having regard to his professional background, grounds a claim of exceptional circumstances arising from the taking of the Easement without agreement. If anything, his awareness of the acquisition processes, and a realisation that he would ultimately be compensated by Western Power, goes against such a claim.
Furthermore, and perhaps even more problematically, to award an amount in excess of 10% on this basis, would require me to be satisfied, on the balance of probabilities, that the Applicant's action were such, viewed objectively, that it did not treat the Respondent with professionalism and courtesy nor open and frank negotiations. On the evidence, including Mr Bombara's witness statement, I find that conclusion is simply not open.
In any event, Roads Corp v Love should be approached with some care. Solatium is approached very differently across the various Australian jurisdictions. For example, pursuant to s 44(1) of the Land Acquisition and Compensation Act 1986 (Vic), which was the focus in Roads Corp v Love, an award of solatium of up to 10% is very much discretionary. However, unlike in this case where the Applicant agrees that 10% solatium ought to be paid, that was not the case in Roads Corp v Love. In Roads Corp v Love, Mr Love was awarded a solatium payment of only 7.82%.[114] Therefore, to the extent that the reasonable expectations of a claimant may inform solatium were accepted in Roads Corp v Love, the underlying legal and factual context is distinguishable.
[114] Roads Corp v Love [798] (Osborn J).
Second, the Respondent also refers to the length of time it took to make the Advance Payment Offer (which was made on 6 February 2015). The Respondent says the delay of almost 20 years is a further 'exceptional' circumstance. I do not agree.
The Applicant made the November 2008 Offer to the Bombara Family on 13 November 2008, pursuant to s 217 of the LA Act. The November 2008 Offer was for $43,843, plus interest at $4.38 per day calculated from 4 September 2008.
From that point onwards the Respondent was aware, in broad terms, of the compensation that the Applicant considered was payable for the Easement.
By letter dated 10 July 2009, the Applicant notified the Bombara Family of its intention to apply to the Tribunal for a direction pursuant to s 222 of the LA Act.
The Applicant applied to the Tribunal for directions pursuant to s 222(1) of the LA Act on 16 April 2013.
None of that history supports a claim that exceptional circumstances arise from delay occasioned by the Applicant. Having regard to the professional background of the Respondent, he would have been aware that he, or his counsel, could have engaged with the Applicant in relation to an advance payment.
Furthermore, there is no obligation under the LA Act for an acquiring authority to make an offer of advance payment. In that context, it is hard to see how the making of the Advance Payment Offer, albeit 20 years after the Valuation Date, grounds a claim of exceptional circumstances for the purposes of s 241(9).
Third, the Respondent points to there being uncertainty over the applicable statutory regime for the acquisition of the Easement. To the extent that there was uncertainty over the basis on which compensation would be assessed, I am not satisfied that such concerns arise from the taking of the Easement 'without agreement'.
The applicable statutory regime is somewhat separate from the taking of the relevant interest. By that I mean that in all scenarios, and in all statutory regimes, the Respondent was entitled to compensation for the taking of the Easement. I am not satisfied that this matter constitutes an exceptional circumstance.
Ultimately, I find that the Subject Land was acquired by the Bombara Family, including the Respondent, for commercial investment opportunities.[115] It was rural land which the Bombara Family initially farmed. However, the Respondent does not suggest he had any particular affinity with the Subject Land as rural land.
[115] ts 158, 17 May 2021.
Nor does the Respondent suggest he had intentions to move to the Subject Land with his family. Because he did not reside on the Subject Land, it is also the case that he did not have to endure the works and disruption caused by the Transmission Line in any real sense.
At the time of purchase by the Bombara Family, the Subject Land contained a transmission line. It could not be said that the Subject Land had a tranquil rural ambience, although the Respondent said it had some scenic qualities.[116]
[116] ts 158, 17 May 2021.
While the discretion in s 241(9) of the LA Act is cast in broad terms. I do not consider that exceptional circumstances have been shown by the Respondent to justify a solatium award greater than 10%.
I award the Respondent 10% solatium.
Conclusion
For the foregoing reasons, I find that the Applicant owes the Respondent a total of $18,088 in compensation for the taking of the Easement.
The interest payable is $4.38 per day between 6 January 1995 and 8 March 2015, (being 30 days after the making of the Advance Payment Offer).[117] An award of 10% solatium formed part of the Advance Payment Offer made to the Bombara Family.
[117] $4.38 x 7366 days = $32,263 in interest; interest is not payable beyond the making of the Advance Payment Offer by reason of s 241(12) of the LA Act.
Therefore, the total amount of compensation owed to the Bombara Family is $54,263. A 2/6th share of $54,263 is $18,088.
Orders
The Tribunal orders:
1.The applicant is to pay to the respondent compensation in the amount of $18,088.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
DR S WILLEY, SENIOR MEMBER
5 NOVEMBER 2021
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: LAND ADMINISTRATION ACT 1997 (WA)
CITATION: ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER and BOMBARA [2021] WASAT 141 (S)
MEMBER: DR S WILLEY, SENIOR MEMBER
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 22 DECEMBER 2021
FILE NO/S: DR 131 of 2013
BETWEEN: ELECTRICITY NETWORKS CORPORATION T/AS WESTERN POWER
Applicant
AND
MARK JAMES BOMBARA
Respondent
Catchwords:
Practice and procedure - Land resumption and compensation - Applicable principles as to costs in the Tribunal - Whether party's conduct warrants a costs order being made
Legislation:
Land Administration Act 1997 (WA), s 222(1), Pt 10, Div 3, Div 4
State Administrative Tribunal Act 2004 (WA), s 9, s 52, s 54, s 87, s 87(1), 87(2)
State Administrative Tribunal Rules 2004 (WA), r 42
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Applicant | : | N/A |
| Respondent | : | N/A |
Solicitors:
| Applicant | : | Herbert Smith Freehills |
| Respondent | : | Bennett + Co |
Case(s) referred to in decision(s):
Banno v Commonwealth (1993) 45 FCR 32; (1993) 81 LGERA 34
Brock v Roads and Maritime Services [2012] NSWCA 404; (2012) 191 LGERA 267
Clifford and Shire of Busselton [2007] WASAT 89 (S)
Electricity Networks Corporation T/AS Western Power and Bombara [2021] WASAT 141
Minister for Environment v Florence (1979) 21 SASR 108; (1979) 45 LGRA 127
Western Australian Planning Commission and Shim [2007] WASAT 262 (S)
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32; (2016) 213 LGERA 81
Winterbourne and Western Australian Planning Commission [2013] WASAT 72
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
On 5 November 2021, I delivered judgment in this matter (the Primary Reasons) and awarded Mr Mark James Bombara (the Respondent) compensation in the amount of $18,088 for the acquisition of an easement over a portion of his conjointly owned land, in Casuarina, by the Electricity Networks Corporation T/AS 'Western Power' (the Applicant).[118]
[118] Electricity Networks Corporation T/AS Western Power and Bombara [2021] WASAT 141 (Primary Reasons).
At the final hearing, the essential contest between the parties was whether the Respondent's rural zoned land had urban potential as at the date on which it was to be valued for compensation purposes (the date being 6 January 1995).
In the result, I ultimately accepted the Applicant's case that the Respondent's land did not have urban potential as at 6 January 1995. The Applicant now applies for a costs order, pursuant to s 87(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
For the reasons that follow, the application for costs should be dismissed.
However, before I set out my reasons, I will first address the Applicant's submissions in support of costs and the Respondent's reply. For present purposes, it is unnecessary that I set out the relevant legal principles that apply to costs in the Tribunal. The relevant principles are addressed in the parties' respective submissions and the analysis that follows.
Applicant's submissions
The Applicant submits that while the Tribunal is generally a 'cost neutral' jurisdiction, it retains a broad discretion to award costs.[119] This is further informed by the State Administrative Tribunal Rules 2004 (WA) (SAT Rules).
[119] Section 87(2) of the SAT Act.
The SAT Rules, read with the SAT Act, encourages parties to settle matters before a contested hearing, and leave it open to the Tribunal to make a costs order in circumstances where a party has acted unreasonably and unreasonably consumed the resources of the opposing party and the Tribunal.
The Applicant submits that, properly construed, the SAT Act and the SAT Rules, provide that, where a party does not accept an offer more favourable than the Tribunal's final order, that party will ordinarily be liable to meet the other party's costs.[120]
[120] Section 9, s 52 and s 54 of the SAT Act; r 42 of the SAT Rules.
In compulsory land acquisition cases, there are many instances of the Tribunal exercising its discretion to award costs in circumstances where the landholder has failed to obtain an order greater than offers that were made. In this regard, the Applicant refers to, and includes extracts from, the decisions of Clifford and Shire of Busselton[121] and Western Australian Planning Commission and Shim.[122]
[121] Clifford and Shire of Busselton [2007] WASAT 89 (S) (Barker P).
[122] Western Australian Planning Commission and Shim [2007] WASAT 262 (S).
The Applicant refers to the following comments of President Barker in Clifford:
[It] really is a question of fairness: on the one hand, in the case of a successful applicant it is fair that they should ordinarily receive their costs when they are put to the trouble and expense of proving that their claim is right, over the reticence of the resuming authority to recognise the rightness of the claim; on the other hand, it is fair that an applicant who does not establish that a resuming authority's offer was not right, should have to pay the resuming authority's costs given the trouble and expense to which they have put the resuming authority.[123]
(emphasis added)
[123] Clifford [56].
The Applicant also refers to Templeman J's comments in Mount Lawley Pty Ltd v Western Australian Planning Commission (Mount Lawley), to the effect that that costs orders in resumed land cases should not be considered as exceptional:
[T]here is no overriding principle in a compensation case (or in a valuation case) that the amount of compensation (or value) determined by the Court should not be eroded by denying the applicant his costs or requiring him to pay the costs of the relevant authority. In the end, whether or not there are statutory provisions relating to the exercise of the costs discretion in such cases, it is always necessary to have regard to the particular circumstances. It cannot be said that only in an exceptional case should an applicant be deprived of his costs, or required to pay the costs of the relevant authority.[124]
(emphasis added)
[124] Mount Lawley Pty Ltd v Western Australian Planning Commission (2006) WASC 82 (S) [51] (Templeman J).
In its reply submissions, the Applicant outlines that the Respondent gave evidence as the landowner and experienced property valuer. The Applicant says that having to deal with the Respondent's evidence, which was accepted as evidence but, to the extent it included valuation opinions, was not accepted as independent expert evidence,[125] increased the costs to the parties.
[125] Primary Reasons [163].
The Applicant submits, therefore, that the Respondent 'increased the formality and technicality of the proceedings in a way that increased the costs of both parties. On that basis, the Respondent should be liable for the Applicant's costs'.[126]
Respondent's submissions
[126] Applicant's Reply Submissions, para 9.
The Respondent submits that there is no presumption as to costs in the Tribunal. While the Tribunal retains a discretion to order a party to pay costs in an appropriate case, it is important to emphasise that land resumption proceedings are 'not ordinary litigation'. That is so because the relationship between the parties giving rise to the litigation does 'not arise out of their mutual desire; [but rather] because of a unilateral decision' … 'to acquire the [landowner's] land in order to satisfy a perceived public need'.[127]
[127] Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32; (2016) 213 LGERA 81 [53] (Martin CJ, Murphy JA, Corboy J).
The Respondent's submissions highlight that the Court of Appeal has comprehensively considered the question of costs in land resumption proceedings before the Tribunal. In Western Australian Planning Commission v Questdale Holdings (Questdale Holdings), the Court of Appeal noted there is no presumption that a particular practice will be adopted in the exercise of the Tribunal's jurisdiction with respect to the determination of compensation for the resumption of land.[128]
[128] Questdale Holdings [8],[9].
The Court of Appeal identified that, in an application for costs against a landowner, it will be relevant to consider whether, and to what extent, the responsible authority can establish that the landowner's conduct in connection with the proceedings has impaired the attainment of the Tribunal's objectives to have the proceedings determined fairly and in accordance with the substantial merits, with as little formality and technicality as possible, and in a way which minimises the costs to the parties.[129]
[129] Questdale Holdings [54].
Furthermore, the mere fact that a landowner ultimately fails on some contention(s) advanced at a final hearing would not, in itself, signify that they have acted inconsistently with the objectives of the SAT Act.[130]
[130] Questdale Holdings [55].
The nature of the dispute, which stems from the compulsory acquisition of interests in land, which Parliament has given to the parties the option of being determined in a forum where there is a statutory presumption of each party bearing its own costs, is also a relevant consideration.[131]
[131] Questdale Holdings [53].
The Respondent therefore notes that, in such circumstances, the onus falls on the Applicant to persuade the Tribunal that it is fair and reasonable that a costs order is appropriate.[132]
[132] Questdale Holdings [51].
The Respondent submits that the Applicant's application for costs rests solely on the fact that the Respondent did not obtain a result 'more favourable'[133] than that offered by the Applicant in its 6 February 2015 letter. However, this is only one of the factors that the Tribunal may consider when deciding to award costs.[134]
[133] Rule 42 of the SAT Rules.
[134] Questdale Holdings [53].
Further, the Respondent notes that in Questdale Holdings the Court of Appeal has emphasised it would be wrong to conclude that, in the ordinary course, the discretion should be exercised so as to require a landowner to pay the costs of the responsible authority, if it does not establish a value in excess of an amount previously offered by the responsible authority.[135]
[135] Questdale Holdings [62].
The Applicant's case for costs does not refer to any other circumstance relevant to the assessment of costs in its submissions.
The Respondent considers the following factors are relevant in the context of this proceeding:
a)the Respondent was entitled to present an arguable and well-organised case before the Tribunal;[136]
b)the position advanced by the Respondent was not vexatious, dishonest or grossly exaggerated, and the Applicant has not pointed to any conduct that could be said to have impaired the attainment of the Tribunal's objectives to have the proceeding determined fairly and in accordance with the substantial merits; and
c)the facts in Clifford (on which the Applicant's submissions on costs relies) can be distinguished from the facts of this case - in this proceeding, the Respondent claimed either $27,899 or $166,971 in compensation (dependent on the Tribunal's decision as to zoning), whereas the applicant in Clifford claimed $1.45 million and was awarded only $3,250.
[136] Banno v Commonwealth (1993) 45 FCR 32; (1993) 81 LGERA 34, 51 (Wilcox J) (Banno).
The Respondent's overall submission is that he was entitled to advance his case in response to the Applicant's application, and did so in a manner that did not impair the attainment of the Tribunal's objectives.
The Respondent submits that the Applicant has failed to address the considerations relevant to this proceeding, and has not established that it is fair and reasonable for the Applicant to be reimbursed for its costs.
Consideration and result
As I will come to, I broadly accept the Respondent's submissions. The Applicant's primary case for costs rests on the fact that the compensation ultimately awarded did not exceed its offer made in February 2015.
It was certainly the case that prior to Questdale Holdings, there had developed a practice that, in land compensation proceedings that arise in the Tribunal's original jurisdiction, costs would be awarded if a landowner was not successful in the proceeding. Clifford and Shim are two examples of such decisions. The decision of Winterbourne and Western Australian Planning Commission is another.[137]
[137] Winterbourne and Western Australian Planning Commission [2013] WASAT 72 (Parry DP).
It needs to be understood that in Questdale Holdings, the Court of Appeal cautioned that any such practice stands in contrast to the express terms of s 87 of the SAT Act.[138] The effect of s 87(1) of the SAT Act is, relevantly, that each party bears its own costs, unless the Tribunal otherwise orders.
[138] Questdale Holdings [9].
In Questdale Holdings, Murphy JA (with whom Martin CJ and Corboy J agreed) noted that although:
… s 87(2) does not in terms say that the discretion is to be exercised if it is fair and reasonable in all the circumstances of the case to do so, the judicial nature of the exercise and the scheme of the SAT Act indicates that, broadly speaking, that is the legislative intention.[139]
(footnotes omitted)
[139] Questdale Holdings [49].
The question is, essentially, whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred. The onus is on the party seeking costs.[140]
[140] Questdale Holdings [51].
In land resumption cases, which arise in the Tribunal's original jurisdiction, the Tribunal is to deal with the matter in accordance with the SAT Act and, relevantly, the Land Administration Act 1997 (WA) (LA Act). It is therefore relevant that in this instance, the proceeding was commenced by the Applicant pursuant to s 222(1) of the LA Act. That is, it was the Applicant who engaged the Tribunal's jurisdiction which, as I have said, has a presumption that each party bears its own costs. To that I would add there is nothing in Div 3 and Div 4 of Pt 10 of the LA Act that refers, as a general principle, to costs following the event.
The Court of Appeal's consideration of the question of costs in Questdale Holdings has necessarily resulted in a change in approach by the Tribunal, and also parties before the Tribunal.
That is why, I must say, I am surprised to see that the Applicant's claim for costs, as set out in its primary submissions, rests solely on the bare proposition that the Respondent was ultimately not made better off by a final hearing. Decisions such as Clifford, while no doubt relevant in the context of some particular factual circumstances, no longer stand for the broad proposition that costs should follow the event in land resumption cases before the Tribunal.
Like the Court of Appeal in Questdale Holdings, let me point out that I am not in any way saying that the outcome in Clifford was incorrect.[141] That case had a very unusual factual background and the claimant was wholly unsuccessful in seeking compensation exceeding $1,450,000.
[141] Questdale Holdings [63].
Following Questdale Holdings, it is simply no longer the case that where a landowner's case is not accepted, wholly or in part, by the Tribunal, that a costs order will necessarily follow.
Parliament has given the Tribunal jurisdiction to deal with land resumption cases. Such cases are often very significant ordeals for the landowners affected. As was observed by Wilcox J in Banno, the relationship between the parties that results in the litigation is not ordinary in any sense. It arises because the interests of the landowner have been made to give way for some broader public interest. The landowner has had the circumstances of resumption forced upon them. Compensation will be offered and, if it cannot be agreed, then the Tribunal is given the jurisdiction to determine what compensation, if any, is payable. As was explained in Banno:
… [P]eople in that position should be allowed access to the court, to present an arguable and well organised case, without being deterred by the prospect of being ordered to pay the Commonwealth's costs if their case proves unpersuasive. I distinguish the situation of resumees who pursue a vexatious, dishonest or grossly exaggerated claim or present their case in such a way as to impose unnecessary burdens on the Commonwealth or the court[.][142]
[142] Banno, 53.
Wilcox J's comments were referred to by the Court of Appeal in Questdale Holdings[143] and were also effectively endorsed by the New South Wales Court of Appeal in Brock v Roads and Maritime Services.[144]
[143] Questdale Holdings [56],[57].
[144] Brock v Roads and Maritime Services [2012] NSWCA 404; (2012) 191 LGERA 267, [82], [97] (Beazley JA, Meagher JA, Tobias AJA).
In Minister for Environment v Florence,[145] Wells J observed that:
Upon an ordinary claim in the general jurisdiction it is, generally speaking, obvious who has won and who has lost, and correspondingly clear why costs usually follow the event. Upon a claim for compensation for land compulsorily acquired, it is not, generally speaking, appropriate to speak of one party as having won; compensation is awarded to one who has already been given, by statute, the right to receive it[.][146]
[145] Minister for Environment v Florence (1979) 21 SASR 108; (1979) 45 LGRA 127 (Wells J) (Florence).
[146] Florence, 134, 149.
In the context of this case, a land resumption case where the Applicant engaging the litigation process was the acquiring authority, there was nothing in the Respondent's conduct that would justify a costs order being made.
The case presented by the Respondent was, in the language of Banno, arguable and well-organised. The Respondent's claim was not grossly exaggerated or excessive and his conduct at the hearing, and throughout the proceeding, was disciplined and reasonable.
Indeed, the Respondent's ultimate claim was for $166,971 which, having regard to some claims in land resumption cases, is, by any standards, modest. Witnesses were not called who were irrelevant and the gravamen of the Respondent's case was focused, readily discernible and, as I have indicated, arguable.
As I have set out, in its reply submissions, the Applicant focuses on the Respondent giving evidence at the final hearing as basis on which to award costs. That is, the Applicant contends, because by choosing to give evidence, the Respondent's conduct was such that it increased the costs of the proceeding.
It is true that I had little regard to the Respondent's evidence to the extent that it contained valuation opinions. However, as I explained when I allowed the evidence, the majority of the statement went to how the Respondent felt he had been treated by the Applicant and thus supported his claim for solatium.[147]
[147] ts 6, 17 May 2021.
Moreover, as I also explained, in land resumption proceedings I do regard it as important, in a general sense, that an affected landowner be given the opportunity to explain how they feel about the process and how they were treated.[148] Hearing from an affected landowner in such cases is part of, in my view at least, the proper administration of justice.
[148] ts 6, 17 May 2021.
For the Applicant to then submit that a landowner wanting to be heard in such a case is conduct that warrants a costs order under the SAT Act, because it increased the length of hearing is, I think, a submission that ought not be accepted. Of course, the witness statement in question did include some valuation evidence at odds with the Respondent's case, which is a finding I made in the Primary Reasons.[149]
[149] Primary Reasons, [165].
However, in terms of the alleged 'increase' in the costs of the proceeding, I note that the Applicant's cross-examination of the Respondent took less than three minutes and included about 10 questions relating to the Respondent's purchase of the land, the use made of the land as well as whether it was scenic.[150]
[150] ts 9-10, 17 May 2021.
The cost 'increase' occasioned by the Respondent giving evidence was very marginal, at best, especially when viewed in the context of a proceeding that commenced in 2013. I am not prepared to award costs on this basis.
I also find that the Applicant was not made to throw away costs in meeting a case that was hopeless. Ultimately, the Respondent considered his land had some urban prospects at the time it fell to be valued. I considered his argument but ultimately disagreed. I find he was entitled to make that argument in the Tribunal and there was nothing in that argument, or in the way his case was presented or conducted, that should displace the presumptive position that each party bears its own costs.
In an overall sense, I find there was nothing in the Respondent's conduct that should attract an order pursuant to s 87 of the SAT Act. That is, the Respondent's conduct did not impair the attainment of the Tribunal's objectives to have the proceedings determined fairly and in accordance with the substantial merits, with as little formality and technicality as possible, and in a way which minimises the costs to the parties.
More broadly, I would observe that planning and acquiring authorities should not, as a starting point, expect a costs order if they are found to be 'successful' in the Tribunal. To the extent that the Applicant refers to the observations of Templeman J in Mount Lawley, those comments were made in the context of Supreme Court proceedings, before Questdale Holdings, and in the light of very different claim and underlying factual context.
While each case turns on its own facts and, of course, the power to award costs in appropriate cases remains, Questdale Holdings serves as a salient reminder, and lodestar, of the costs principles that underpin this jurisdiction.
To that I would add, that the making of a costs application should be regarded as a serious step and not a natural and inevitable consequence of a 'successful' outcome in the Tribunal.
In this regard, it is, I must say, regrettable that the Applicant's primary submissions were made without reference, at all, to Questdale Holdings. Perhaps if the Applicant had first appraised itself of that decision in the light of the circumstances of this case, the costs application would not have been made.
Orders
1.The Applicant's application for costs is dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
DR S WILLEY, SENIOR MEMBER
22 DECEMBER 2021
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