Instant Products Group Pty Ltd v Commissioner of Main Roads
[2025] WASC 205
•26 MAY 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: INSTANT PRODUCTS GROUP PTY LTD -v- COMMISSIONER OF MAIN ROADS [2025] WASC 205
CORAM: SOLOMON J
HEARD: 13 - 16 FEBRUARY 2024
FURTHER SUBMISSIONS 29 APRIL 2025, 6 MAY 2025
DELIVERED : 26 MAY 2025
FILE NO/S: CIV 2151 of 2020
BETWEEN: INSTANT PRODUCTS GROUP PTY LTD
Plaintiff
AND
COMMISSIONER OF MAIN ROADS
Defendant
Catchwords:
Compulsory acquisition of land - Assessment of compensation for resumed land - Compensation under s 241 of the Land Administration Act 1997 (WA) - Where the public work causes a required modification of a development - Highest and best use of land - Comparable sales method - Significance of sale of subject property as a comparable sale - Permissibility and re-introducing a variation of the public work in assessing the value under s 241(2) - Applying differential rates to different parts of the land - Impermissibility of using subsequent events to assess market value at valuation date - Appropriate use of a development approval subsequent to the valuation date - Proper construction of s 241(6) of the Act - Consequential losses - Which types of consequential losses are recoverable under Land Administration Act 1997 (WA), s 241(6)(e) - Whether expenses related to a proposed future activity on the land caused by the public work are covered by s 241(6) - Whether a loss in value on the remaining land can be compensated under s 241(6)
Legislation:
Land Administration Act 1997 (WA), s 177, s 178, s 202, s 241
Local Government (Uniform Local Provisions) Regulations1996 (WA), reg 14
Public Works Act 1902 (WA)
Result:
Compensation awarded as assessed by the defendant
Category: B
Representation:
Counsel:
| Plaintiff | : | PG McGowan |
| Defendant | : | TC Russell SC & AJ Carr |
Solicitors:
| Plaintiff | : | Lansell Legal |
| Defendant | : | State Solicitor's Office |
Cases referred to in decision:
DBW Reynolds as trustee for the DBW Reynolds Family Trust v Public Transport Authority [2025] WASCA 43
DBW Reynolds Pty Ltd v Public Transport Authority [2023] WASC 165
Kelliher v Commissioner for Main Roads [No 2] [2015] WASC 478
Lenz Nominees v Commissioner of Main Roads [2012] WASC 6
Maurici v State Revenue [2003] HCA 8; (2003) 212 CLR 111
McKay v Commissioner of Main Roads [No 7] [2011] WASC 223
Spencer v The Commonwealth (1907) 5 CLR 418
SOLOMON J:
Overview
The plaintiff (Instant Products) is a business that provides portable buildings and facilities across a range of industries in Western Australia. The business has operated for over twenty years and has expanded significantly since it began.
Instant Products is managed by Scott Rawson (Mr Rawson). Mr Rawson was assisted by his father, George Rawson, until the latter's death. In order to accommodate the expanding business, Mr Rawson and his father looked for a suitable large plot of land to purchase. On 30 September 2014, Instant Products acquired land, being Lot 195, on deposited plan 59350 and being the whole of the land contained in Certificate of Title volume 2772, folio 250 (Property). Instant Products purchased the Property for development as a transport depot and warehouse facility.
The Property was located in the suburb of Muchea, north‑east of Perth, in the Shire of Chittering. It comprised an area of 112.3507 ha with frontage to Great Northern Highway. The purchase price was $1,300,000.[1]
[1] See Exhibit A-4.86. The consideration recorded on the transfer was $1,430,000. That figure was inclusive of GST. The valuation evidence proceeded on the basis that the purchase price exclusive of GST was the relevant figure. The defendant's valuer, Mr Srhoy, adopted the figure of $1,300,000. There was no challenge to that figure.
By a taking order pursuant to the Land Administration Act1997 (WA) (LAA) dated 24 November 2016 and under the signature of the Minister for Transport, 15.840 ha of the Property was compulsorily acquired by the defendant, the Commissioner of Main Roads, for the widening and upgrading of Great Northern Highway (the Taking).[2] The taken land was a strip along the Property's frontage to Great Northern Highway (Taken Land). The remaining balance of the Property is 96.5195 ha and now comprises two lots; Lot 609 (58.9359 ha) and Lot 610 (37.5833 ha).[3]
[2] Exhibit A-30.181 - 182.
[3] Amended Outline of Plaintiff's Opening Submissions for Trial 1 February 2024, 3.
By reason of the Taking, Instant Products became entitled under s 202 of the LAA to compensation to be determined in accordance with s 241 of the LAA. Instant Products was dissatisfied with the compensation, which was determined and paid by the defendant in the sum of $275,000 (plus interest). Instant Products issued these proceedings for the determination of the compensation payable in accordance with s 241.[4]
[4] Exhibit A-34.188.
Background
The Property
The Property was vacant rural land when it was purchased by Instant Products, save for a single dam. The Property was comprised of two sections; a southern moiety and a northern moiety. The two sections were divided by a strip of land, described as Lot 22. Although it was privately owned, Lot 22 was created as a future extension of an existing road, Powerbark Road, and was to be ceded to the Shire of Chittering as a road reserve.[5] The extension of Powerbark Road never eventuated. In his witness statement of 22 January 2024, Instant Products' director Mr Rawson gave evidence that he had 'recently purchased' Lot 22.[6]
[5] See explanation from Main Roads Western Australia (MRWA) in its letter to Instant Products dated 4 November 2014, Exhibit A-8.96.
[6] Exhibit E, Further Witness Statement of Scott Cameron Rawson 22 January 2024, 3 [21].
The following diagram shows the two sections of the Property and the frontage to Great Northern Highway at the time the Property was purchased by Instant Products.
The Property slopes upwards from west to east as it moves away from Great Northern Highway, and in particular becomes steeper in its northeastern section.
Planning environment
The area in which the Property is located is governed by the Shire of Chittering Town Planning Scheme No 6 (TPS 6). Clause 3 of TPS 6 classifies the area into zones shown on a scheme map. At the time of its purchase, the Property was, and remains, in the 'Agricultural Resource' zone. Schedule 2 to TPS 6 is a zoning table which sets out the permitted uses for the various zones. The potential uses included 'Permitted (P)', 'Discretionary (D)' and 'Discretionary subject to advertising (A)'. The latter two categories related to uses that were only permitted with the approval of the Shire. For uses listed in the third category, approval was subject to public advertising.[7]
[7] Exhibit A-3.80.
In June 2004, the Western Australian Planning Commission (WAPC) endorsed the Shire of Chittering Local Planning Strategy 2001‑2015 (LPS 2001-2015).[8] Section 7 was entitled 'Local Planning Strategy - Broad Issues'. Section 7.5 of LPS 2001‑2015 began with the heading 'Major Road Links' and included the following:[9]
The major highways include the Brand and Great Northern Highways, with future highway – Perth-Darwin Highway to be constructed to replace Great Northern Highway, as the primary heavy haulage route from the Perth Metropolitan Area and the north west of the State.
...
A future main connecting road to link the existing Great Northern Highway and Perth-Darwin Highway, should the proposed new urban settlement proceed.
[8] Exhibit A-51.307.
[9] Exhibit A-51.309.
Section 7.5.1 was entitled 'Aims'. The aims included:[10]
To pursue the early construction of the Perth-Darwin Highway to alleviate the heavy haulage traffic on Great Northern Highway and divert through traffic away from Bindoon;
To press for urgent improvements to Great Northern Highway to reduce traffic problems and accidents.
[10] Exhibit A-51.309.
The Aims were followed by a map/diagram setting out the 'Roads Network'. It depicted the route of the future Perth‑Darwin Highway. The depicted route showed the proposed future highway as bypassing the part of Great Northern Highway that fronted the Property. The plain inference from the map was that traffic destined for the future highway would be diverted away from where Great Northern Highway had frontage to the Property.
On 6 February 2014, the Commonwealth Government issued a media statement entitled 'Building WA transport infrastructure for the 21st Century'.[11] The media statement referred to the proposed expenditure on transport infrastructure projects across Western Australia over the next five years. A focus of the media statement was the upgrade of Great Northern Highway from Muchea to Wubin. That proposed upgrade included the section adjacent to the Property.
Purchase of Property by Instant Products
[11] Exhibit H, Briggs J, Cormann M and Price M, 'Building WA Transport Infrastructure for the 21st Century', 6 February 2014.
Prior to purchasing the Property, Instant Products sought preliminary town planning advice. This is dealt with below in the context of the evidence of Joe Douglas (Mr Douglas).
The transfer of the property to Instant Products was dated and registered on 30 September 2014.[12] The Office of Revenue Certificate of Duty indicates that the date of the sale contract was 16 June 2014.[13]
[12] Exhibit A-6.88, Exhibit A-7.95.
[13] Exhibit A-6.91.
On 15 July 2014, Mr Rawson wrote to the Shire of Chittering advising that Instant Products had purchased the Property. The letter concerned Lot 22, which bisected the Property, and proposed a means of access involving Lot 22 to each of the two moieties comprising the Property. In that context, the letter stated: 'We believe a highway upgrade will be carried out in the near future'.[14] On 16 July 2014, Mr Rawson wrote to MRWA in similar terms.[15]
[14] Exhibit A-4.83.
[15] Exhibit A-5.85.
By letter dated 4 November 2014, Janet Hartley‑West (Ms Hartley‑West), on behalf of MRWA, responded to Mr Rawson's letter. Among other things, Ms Hartley‑West drew Mr Rawson's attention to the position that any proposed works within the Great Northern Highway road reserve would require MRWA approval. That was consistent with the advice that Instant Products had received from Mr Douglas, referred to below.
Proposed development
Following the purchase of the Property, in January 2015 Instant Products engaged a firm then known as Urban and Rural Perspectives (URP) to 'prepare, lodge, monitor and negotiate' development approval for a warehouse and transport depot on a portion of the Property from the Shire of Chittering.[16] Mr Douglas was the principal of URP, although it was a town planner with the firm by the name of Carlo Famiano (Mr Famiano) who had the principal conduct of the matter on behalf of Instant Products.
[16] Exhibit G, Witness Statement of Joseph Carl Douglas 13 July 2022 [8] (Exhibit G).
URP lodged the first application for planning approval with the Shire of Chittering on 30 June 2015 (initial application).
The initial application proposed a single 10‑metre‑wide sealed driveway crossover from the proposed facility to Great Northern Highway, this crossover would provide both right‑hand and left‑hand access onto Great Northern Highway, and service both the warehouse and the transport depot.[17] A map/diagram of the facility the subject of the initial application appears below. The single 10‑metre‑wide crossover to Great Northern Highway is depicted within the red circle.
[17] Exhibit A-10.102.
The letter accompanying the initial application observed that a transport depot was a discretionary 'A' use requiring public advertising, and that a warehouse was a discretionary 'D' use.[18] The letter set out an estimate of expected vehicular traffic including trailers and heavy vehicles. The letter included a section headed 'Justifications' which included reasons as to why the application was 'well founded and capable of being approved'.[19] It may be observed that no reference was made to the prospective diversion of traffic arising from the plans depicted in LPS 2001‑2015 as part of the justification. The approximate cost of the proposed development was said to be $700,000 (exclusive of GST).[20]
[18] Exhibit A-10.102.
[19] Exhibit A-10.104 [28].
[20] Exhibit A-10.106.
Following the lodgment of the initial application, on 14 August 2015 a meeting was held to discuss the application at the Shire of Chittering Offices. The meeting was attended by Ms Hartley‑West and a Mr White from MRWA, a senior planner from the Shire of Chittering, Mr Famiano from URP, and Mr Rawson. Ms Hartley‑West prepared a contemporaneous note of the meeting which was in evidence.[21]
[21] Exhibit A-12.135.
There was no substantial controversy about what occurred at the meeting. MRWA explained the proposal for the realignment and upgrade of Great Northern Highway along the frontage to the Property as part of the broader Great Northern Highway realignment and upgrade. MRWA advised that it would not permit direct access from the proposed facility onto the upgraded Great Northern Highway and that a modified plan was required to provide indirect access from the proposed facility to Great Northern Highway.
During the remainder of 2015 and early 2016, further liaison took place between the various parties, and a modified plan was submitted by Instant Products in support of its amended development application. The modified plan no longer included direct access from the Property onto Great Northern Highway. Rather, access to and from the Property was proposed to be from the southern boundary of the Property through a proposed new service road and cul‑de‑sac. MRWA was to construct that access to the boundary of the Property at its expense, as part of the proposed upgrade and realignment of Great Northern Highway.
The modifications to the plan had various consequences. These included the necessity to build a longer sealed road for internal traffic, in contrast with a shorter unsealed road under the initial application. In addition, vehicles entering and exiting the proposed facility on the Property would have longer to travel to and from Great Northern Highway than if there had been direct access. A map/diagram of the modified plan appears below.[22]
The Taking
[22] Exhibit A-41.214.
Under cover of a letter dated 29 February 2016,[23] MRWA gave formal notice to Instant Products of the defendant's intention to acquire compulsorily the Taken Land for the purpose of the realignment and upgrade of Great Northern Highway - Muchea North. The Notice of Intention was dated 24 February 2016.[24] By a taking order dated 24 November 2016, in accordance with s 177 and s 178 of the LAA and signed by the Minister of Transport, the Taken Land was acquired by the defendant.[25]
[23] Exhibit A-28.171 - 172.
[24] Exhibit A-28.173 - 174.
[25] Exhibit A-30.181 - 182.
As the trial unfolded, there was no real dispute that the public work was the widening and realignment of Great Northern Highway in the Muchea North region.
In February 2017, Instant Products lodged a claim for compensation in the sum of $3,229,600.[26] On 19 April 2017, the defendant offered compensation in the sum of $275,000. The offer was rejected by Instant Products.[27] By a deed entitled 'Partial Discharge of Claim',[28] on 20 July 2017, Instant Products accepted the sum of $275,000 together with interest without prejudice to its claim for what it regarded as proper compensation.
[26] Exhibit A-33.185 - 186.
[27] Exhibit A-34.188 - 190.
[28] Exhibit A-38.201 - 207.
Following proceedings in the State Administrative Tribunal and further negotiations with the Shire of Chittering, the development application was ultimately approved in March 2018.[29] In June 2021, Instant Products applied, in effect, for a renewal of the approval.[30] The further approval was granted in October 2021.[31]
[29] Exhibit A-45.225.
[30] Exhibit A-46.235 - 236.
[31] Exhibit A-47.238.
The approved plans relevantly and in substance took the form referred to at [24] - [25] above. The development was approved on an area of approximately 13.72 ha in the southern moiety of the Property.
The claim
Instant Products' claim for compensation under s 241 falls into two broad categories.
The first is the amount to be assessed under s 241(2), that is, the value of the Taken Land, discounting any increase or decrease in value attributable to the public work. In effect, Instant Products seeks the payment of what it contends is the value of the Taken Land, unaffected by the proposal to realign and upgrade Great Northern Highway. Instant Products' position at trial was that the value of the Taken Land in the unaffected scenario was $617,000. The defendant's position at trial was that the value of the Taken Land was $375,000. That figure represented a considerable increase on the defendant's initial assessment pursuant to which it had paid compensation in the sum of $275,000 (plus interest), as referred to above.
The second component of Instant Products' claim is advanced under s 241(6) of the LAA.[32] That section provides that in determining the amount of compensation payable, regard is to be had to any loss or damage sustained by reason of:
(a)removal expenses; or
(b)disruption and reinstatement of a business; or
(c)the halting of building works in progress at the date when the interest is taken and the consequential termination of building contracts; or
(d)architect's fees or quantity surveyor's fees actually incurred by the claimant in respect of proposed buildings or improvements which cannot be commenced or continued in consequence of the taking of the interest; or
(e)any other facts which the acquiring authority, the court, or the State Administrative Tribunal considers it just to take into account in the circumstances of the case.
[32] The prayer for relief at [2] of the Amended Statement of Claim referred to the compensation as claimed 'pursuant to s 241(6) and (7)'. However, at trial the claim for compensation was advanced unambiguously under s 241(6) and any claim under s 241(7) was disavowed.
Instant Products contended that it was entitled to a number of components of compensation for loss or damage under s 241(6)(e) of the LAA. The first component was a replacement dam. This was accepted by the defendant and the quantum agreed. It may therefore be put to one side.
The other components of Instant Products' claim arose from its central contention that the Taking caused it to have to modify the plans for the development of the warehouse and transport depot in a manner that would not have been necessary in the absence of the public work. That was because the Taking precluded direct access from the proposed development to Great Northern Highway.
Instant Products contended that the modified design required its vehicles to travel a greater distance to access Great Northern Highway from the transport depot and warehouse. This caused an increase in the cost of fuel, labour and travel, and other items as set out at [37] below.
Instant Products quantified this cost in its amended statement of claim. Instant Products set out the following items claimed under s 241(6)(e):
(1)$288,667 for loss arising from the additional costs;
(2)cost of a 410m slip road/driveway at a cost of $197,780;
(3)signage at a cost of $10,000;
(4)additional maintenance costs for the longer driveway at a cost of $21,333; and
(5)replacement of dam at a cost of $59,600.
The total claim under s 241(6) in the amended statement of claim was quantified at $575,000.[33] The figures appear to have been taken from Instant Products' expert valuer Mr Garmony's report of 2 November 2021.[34] Those figures were repeated by Mr Garmony in the valuers' conferral (referred to at [151] below), save that the cost of the internal road was recorded there without the GST component at $179,800, producing a total of $559,420.[35] The document arising from the valuers' conferral was dated 6 December 2022 and was also tendered in evidence (Valuers' Conferral).[36]
[33] Amended Outline of Plaintiff's Opening Submissions for Trial, 1 February 2024, 6; The prayer for relief at [2] of the Amended Statement of Claim referred also to 'Professional fees; Quantified separately'. This item was not pursued and was not the subject of evidence.
[34] Exhibit A-52(iii).430[24].
[35] Exhibit A-53.446.
[36] Exhibit A-53.434 - 446.
In a further witness statement of 22 January 2024,[37] Mr Garmony revised the figures for certain components of the claim under s 241(6). By reference to the evidence of Louie Hancock (Mr Hancock) (discussed from [59] below), and in particular the cost per lineal metre of the internal roads, Mr Garmony assessed that the construction cost of the internal road for the slip road/driveway was 583 m at a cost of $697,958.81.
[37] Exhibit I, Witness Statement of Matthew John Garmony 22 January 2024, 1 (Exhibit I).
In addition, Mr Garmony's further evidence referred to the establishment of a new petrol station on the corner of Great Northern Highway and Brand Highway. This new petrol station is closer to the Property than the previous petrol station which Mr Garmony used to calculate the increased travel costs that formed part of the claim. Using the shorter distance to the new petrol station, Mr Garmony revised the components of the claim referred to in [37(1)] above from $288,667 to $210,000.[38]
[38] Exhibit I, 2.
In its amended outline of opening submissions for trial dated 1 February 2024, Instant Products set out its revised claim under s 241(6). Its revised claim adoped Mr Garmony’s position such that a revised figure for “fuel labour and travel” was claimed at $210,000 and a revised figure for the internal slip road was claimed at $697,958.81. The sum for maintenance was abandoned. The total claim under s 241(6) (including the dam) set out in Instant Products’ opening submissions for trial was $977,579.[39]
[39] Amended Outline of Plaintiff's Opening Submissions for Trial 1 February 2024, 6.
In closing submissions, counsel for Instant Products submitted that the evidence established a number of alternative bases for quantification of the cost of the slip road/driveway. Counsel submitted that if the initial application had been approved, all vehicles would have been able to enter and exit the proposed facility through an unsealed road of 411 m in length. The modified and approved plans required a sealed road of 583 m in length. That circumstance formed the basis of three alternative bases for that component of the compensation:
(1)the cost of the sealed 583 m road which, as noted, Mr Garmony calculated from the evidence from Mr Hancock established as $697,958.81; or
(2)that cost of $697,958.81, less the cost of the unsealed road that would have been required under the initial application, in respect of which Instant Products relied on evidence that it would have cost $179,000, reducing the claim to $518,958.81; or
(3)the difference between a sealed road of 583m and a sealed road of 411 m (on the basis that even under the initial application, a sealed road was likely to have been required). Using the linear rate extracted from Mr Hancock's evidence, that difference would be $205,915.
Of those three alternatives, Instant Products submitted that the first two were the most appropriate, as the evidence did not establish that a sealed road would have been required under the initial application.
Instant Products thus maintained the quantification of its claim under s 241(6) set out in its opening submissions for trial (referred to at [41] above) with the alternatives set out at [42] and [43] above.
Other than the cost of the replacement dam, the defendant denied that the components of Instant Products' claim were compensable under s 241(6).
Accordingly, at trial Instant Products sought compensation in the sum of $617,000 under s 241(2) for the value of the Taken Land and the figures set out at [41] and [44] above for consequential loss under s 241(6)(e). The defendant conceded the sum of $375,000 for the cost of the Taken Land and $59,620 for the replacement dam. The defendant also accepted that solatium was payable under s 241(10). The defendant otherwise denied Instant Products' claim.
Legal principles
The relevant legislative framework was recently reviewed and set out by the Court of Appeal in DBW Reynolds Pty Ltd v Public Transport Authority.[40]
[40] DBW Reynolds as trustee for the DBW Reynolds Family Trust v Public Transport Authority [2025] WASCA 43 (DBW) [15] ‑ [21] and see [152] of these reasons for the effect of the Court of Appeal decision on this matter.
The applicable legal principles are well settled and other than in respect of the particular matters discussed from [157] of these reasons, were not in dispute. They were considered and set out comprehensively by Beech J in McKay v Commissioner of Main Roads [No 7]and need not be repeated.[41]
[41] McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 (McKay) [135] - [143].
The evidence
Evidence at the trial was given by Mr Rawson on behalf of Instant Products. In addition, Instant Products called Mr Douglas. Mr Douglas is an experienced town planner and as noted was the principal of the firm URP, which has since become the firm Exurban Rural and Regional Planning. Mr Douglas had advised members of the Rawson family and Instant Products for many years and was engaged by Instant Products in relation to its proposed development of the transport depot and warehouse on the Property.
The defendant called Ms Hartley‑West, an experienced engineer employed by MRWA. Ms Hartley‑West held positions with MRWA with responsibility for issues that were directly concerned with Instant Products' proposals for its development of the Property.
Instant Products also relied upon the evidence and witness statement of Mr Hancock, who had expertise in cost estimates in civil infrastructure and facility maintenance. Mr Hancock gave evidence regarding the length and construction cost of the additional road network necessitated by the modified development.
Each party called expert evidence from a valuer. Instant Products called Mr Matthew Garmony, and the defendant called Mr Wayne Srhoy. The valuers each prepared a number of reports and produced a joint report of their conferral setting out the points of agreement and disagreement between them.[42]
Evidence of Scott Rawson
[42] Exhibit A-53.436.
Mr Rawson explained in his evidence that some time before the purchase of the Property, he and his father began looking to purchase land that could accommodate their expanding business. It appears that in about May 2014 they became interested in the purchasing the Property.
Mr Rawson gave evidence of the history of the development application and explained the impact of the Taking and the consequent necessity to modify the application that was to be prepared and advanced.
In his witness statement, Mr Rawson stated that there were 'at least' two crossovers from the Property to Great Northern Highway at the time of purchase. In his oral evidence, Mr Rawson said he thought there could have been a third. Mr Rawson explained that the initial application proposed to substitute the two or three crossovers with a single crossover to Great Northern Highway, as described and depicted at [20] above. In relation to the crossovers that existed at the time of the purchase of the Property, Mr Rawson said he did not 'understand anything about them being approved or not approved at the time'.[43] It thus emerged on the evidence that at the time that Instant Products purchased the Property, Mr Rawson had not investigated the legal status of the then-existing crossovers.
[43] ts 139.
While the development application was situated in the south‑western section of the Property, Mr Rawson maintained in his evidence that the whole of the Property was suitable for the use of his business and that his intention in buying the Property was to use all of it other than a small part constrained by a buffer zone to protect the water course.[44] Mr Rawson resisted the proposition that significant parts of the Property were too 'hilly' for substantial development and insisted that the Property as a whole was 'gently sloping land' and indeed had 'a lovely beautiful slope'.[45] To the extent that the parts of the Property were steep, Mr Rawson resisted the proposition that those parts were not suitable for development. He considered that the contours of the land could be altered, thereby facilitating development on nearly all of the Property.
[44] ts 143 - 144.
[45] ts 146.
As will be explained, evidence was adduced by the defendant that if MRWA had permitted direct access to Great Northern Highway from the proposed development in the (hypothetical) absence of the public work, MRWA would have required Instant Products to pay for significant infrastructure to facilitate the safety of that access. The evidence adduced on behalf of the defendant suggested the cost of that infrastructure would have been in the vicinity of $2.3 million. These matters were put to Mr Rawson. Mr Rawson did not accept that such a requirement or cost would have been imposed. He acknowledged however that if, contrary to his view, that had that been the case, he would have reconsidered the development on the Property.[46]
[46] ts 165.
There is no basis to doubt that Mr Rawson gave his evidence honestly in accordance with his recollection of events. That said, Mr Rawson's evidence strayed into aspects relating to the development potential of the Property. In that regard, his evidence was of limited assistance. That evidence was inclined to align with Mr Rawson's aspirational enthusiasm for the Property rather than a measured and well‑informed consideration of the circumstances.
Evidence of Louie Hancock
Mr Hancock has expertise in cost estimation for, among other things, civil infrastructure. In his witness statement of 19 January 2024,[47] he provided evidence of the cost of the road construction required to serve the proposed development. Mr Hancock's evidence was that the length of that part of the internal road which is parallel to Great Northern Highway, extending from the southern boundary to the proposed transport depot, is 583 m.[48] That is the road that the approved plans required in order to provide access from the proposed development to Great Northern Highway in the absence of direct access. Although Mr Hancock estimated the cost of construction of all the internal roads, only the 583 m stretch was relevant to Instant Products' claim.[49]
[47] Exhibit F, Witness Statement of Louie Hancock 19 January 2024 (Exhibit F).
[48] Exhibit F [7].
[49] As explained by Instant Products' counsel in opening submissions; ts 87 - 88.
Mr Hancock estimated that the total cost of construction of the internal roads, including the 583 m stretch, would be $953,437.96 (which equates to $866,761.88 exclusive of GST). It was from that figure that Mr Garmony extrapolated the cost of the 583 m stretch of road.[50]
[50] Exhibit F [7].
Mr Hancock gave his evidence in a professional, straightforward and credible manner. There was no basis to reject his evidence insofar as it was relevant. However, his evidence was only relevant to the claim under s 241(6). For the reasons explained below, Mr Hancock's evidence was not ultimately relevant in the final analysis because I have not accepted this aspect of the claim.
Evidence of Joe Douglas
In his evidence, Mr Douglas said he was instructed by Instant Products in May 2014 to investigate the development potential of the Property and the prospects of obtaining approval for a warehouse/storage facility and transport depot.[51] That advice was obviously sought in advance of the purchase of the Property.
[51] Exhibit G [7].
By email dated 29 May 2014,[52] Mr Douglas gave advice about those matters to Mr Rawson. The email advice included the following:
[52] Exhibit A-30.79 - 82.
Further to recent instructions … please note the following key findings from the general town planning investigation undertaken by this office in respect of the abovementioned property.
...
1.Lot 195 has direct frontage and restricted access to Great Northern Highway along its western boundary which is a State Road under the care, control and management of Main Roads WA.
...
5.Lot 195 is currently classified 'Agricultural Resource' zone in the Shire of Chittering's current operative Town Planning Scheme No.6.
…
7.Land uses that have potential to be established on the land under its current 'Agriculture Resource' zoning classification are listed as follows:
...
Discretionary ('A') Uses (subject to public advertising)
...
Transport Depot - IMPORTANT NOTE: We know from recent dealings with the City of Swan there is currently strong demand for transport depots in Bullsbrook and surrounding areas given the proximity and good accessibility to both Great Northern and Brand Highways. This land use type is a good potential option for [a] portion of the land if you are looking to derive a passive income.
...
8.As mentioned in point 3 above Lot 195 has direct frontage and restricted access to Great Northern Highway along its western boundary. This road is classified 'Highway' reserve in Town Planning Scheme No.6 which means that any development on the land which proposes direct access to and from this road must first be approved by Main Roads WA. It is significant to also note that any development on the land abutting Great Northern Highway must be setback a minimum distance of 100 metres from the road reserve area.
...
13.As can be seen from the above Lot 195 has potential to be developed and used for a number of purposes but has limited scope for any further subdivision development except in accordance with WAPC Development Control Policy No. DC 3.4. Notwithstanding this broad conclusion, any future proposed development and/or usage must be planned with due regard for:
(a)the objectives of the land's current 'Agricultural Resource zoning and 'Basic Raw Materials' Special Control Area classifications in the Shire of Chittering's current Town Planning Scheme No 6;
(b)the need to obtain approval from Main Roads WA for direct access to Great Northern Highway along the land's western boundary.
(Emphases in original)
The evidence of Mr Douglas was that on 5 January 2015, URP was formally engaged to 'prepare, lodge, monitor and negotiate approval from the Shire of Chittering for a development application'.[53] The initial application was dated 25 June 2015,[54] and as noted above, it was lodged under cover of a letter from URP to the Shire of Chittering dated 30 June 2015.[55] The application and the letter were signed by Mr Famiano of URP. Mr Douglas explained that the application was prepared as a collaborative effort by him, his colleague (presumably Mr Famiano) and 'our client' (presumably Mr Rawson on behalf of Instant Products).[56]
The evidence and prospects of the initial application without the public work
[53] Exhibit G [8].
[54] Exhibit A-51.280.
[55] Exhibit A-51.281.
[56] ts 204.
An important aspect of Mr Douglas's evidence, and Instant Products' case, was that at the time URP lodged the initial application on 30 June 2015, Mr Douglas believed that there was 'considerable scope' to obtain approval for the initial application.[57] As will be explained, that belief was held by Mr Douglas in circumstances where he was not aware of the proposed public work. Mr Douglas maintained the view that in the absence of the Taking and the public work, that would have remained the position.
[57] Exhibit G [24] - [25].
The confidence of Instant Products and Mr Douglas - that in the absence of the Taking and public work, the initial application was likely to have been approved - is central to the position advanced by Instant Products in these proceedings. That is because Instant Products' claim as to the value of the Taken Land under s 241(2) is predicated at least to some degree, on the ability of the Property to obtain approval for direct access to Great Northern Highway in the absence of the public work. In addition, it is the anticipated additional expenditure by reason of the lack of such access caused by the public work that forms the basis of Instant Products' claim for compensation under s 241(6).
A critical aspect of Instant Products' case is therefore the evaluation of Mr Douglas's and Instant Products' position that in the absence of the public work, direct access to Great Northern Highway would have been approved and the initial application (or something similar to it with direct highway access) would have been approved.
In his witness statement, Mr Douglas referred to the three existing vehicle access points along the Great Northern Highway frontage as at June 2015. Mr Douglas provided images from Google Earth of the three access points. Mr Douglas's evidence was that all three access crossovers were in use. Mr Douglas personally accessed all three crossovers, which he said looked like they had 'been in place for many years'.[58]
[58] Exhibit G [15].
In his witness statement, Mr Douglas said that he was 'not aware of the approval status of these crossovers'.[59] Mr Douglas presumed they were approved to be used in association with the historical rural use of the Property and he expected that MRWA would 'scrutinise the location of the existing crossovers'[60] when a development application was lodged. In cross‑examination, Mr Douglas confirmed that each of those three crossovers were gravel crossings and that they were only suitable for rural use.[61] Mr Douglas said that he had attempted to ascertain the status of the crossovers with MRWA but had been unable to do so. Mr Douglas ultimately accepted that he did not know whether there was any formal approval for any of the then‑existing crossovers from MRWA or another instrumentality.[62]
[59] Exhibit G [15].
[60] Exhibit G [15].
[61] ts 190.
[62] ts 191.
Mr Douglas explained that in the initial application, these three access points were to be removed and replaced with a single new access point. Mr Douglas's confidence in the prospective success of the development application included, and indeed was dependent upon, approval for the new single crossover.
In relation to the planning and regulatory environment, Mr Douglas explained that under the relevant zoning of the property, under TPS 6, the proposed development was permitted at the discretion of the Shire of Chittering following completion of a period of public advertising. In his witness statement, Mr Douglas explained that the section of Great Northern Highway adjacent to the property was classified as a highway reserve under TPS 6. This meant that cl 5.15 of TPS 6 was applicable and access therefore required the approval of MRWA. This evidence was consistent with the initial advice given by Mr Douglas in his email of 29 May 2014.
Mr Douglas also accepted in his cross-examination that the following planning instruments were applicable to, and would have been taken into account and applied in MRWA's assessment of the direct crossover from the Property to Great Northern Highway:[63]
(1)the WAPC's Development Control Policy 5.1 Regional Roads (Vehicular Access) (Control Policy); and
(2)the MRWA policy statement on Driveways (Driveways Policy).[64]
[63] ts 203 - 204.
[64] The version provided in evidence as part of the witness statement of Ms Hartley-West was Revision 4B and is marked 'Date amended: 29-Jun-2015'. There was no suggestion that the document was materially different at the time that Instant Products purchased the Property.
The Control Policy was last revised in 1998. It includes the following:
1.1This policy sets out the principles to be applied when considering proposals for vehicle access to or from developments abutting regional roads. It is intended to inform government agencies, local government and prospective developers of these principles and to act as guidelines for the exercise of development control powers in this regard.
...
3.1.4In summary, the capacity of regional roads to carry traffic, safety of that traffic, and the free flow of traffic are all related to access - the fewer the number of driveways and junctions, the smoother the traffic flow and safer the road.
...
3.2Function
3.2.1The functional classification of roads and streets is an essential first stage in the establishment of a network which can satisfy the requirements of both traffic movement and development. There is no universally recognised standard defining different types of roads. The Commission has, therefore, adopted the road classification system outlined in Policy No. DC 1.4, 'Functional Road Classification for Planning', namely primary distributors, district distributors, local distributors and access roads.
3.2.2The access control requirements of this policy apply to Primary and District Distributors, which includes all categories of regional roads designated in the Metropolitan Region Scheme and in areas subject to other regional planning schemes. However, many District Distributors are not classified in a scheme and control of development on these roads according to this policy is the responsibility of local governments.
3.3Development Requirements
3.3.1In considering applications for access on regional roads, the effects of the proposals on traffic flow and road safety will be the primary consideration. The more important the regional road, the greater the importance attached to these factors. In general, the Commission will seek to minimise the creation of new driveways on regional roads and rationalise existing access arrangements.
3.3.2Where regional roads are constructed or planned to freeway standards, no access to frontage development is permitted. On regional roads not constructed or planned to freeway standards, there is a general presumption on traffic and safety grounds against the creation of new driveways or increased use of existing accesses to these roads. Where alternative access is or could be made available from side or rear streets or from rights of way, no access shall be permitted to the regional road unless special circumstances apply.
3.3.3An arrangement whereby adjoining owners enter into cross-easement agreements to provide reciprocal rights of access across adjacent lots may be required as a means of rationalising access to the regional road.
3.3.4The types of development that would be allowed access to a regional road include large traffic generators such as major shopping, recreation or community centres. These would justify either a local distributor or access road, leading from a junction with the regional road to car parks servicing the centre.
3.3.5In determining applications for development involving the formation, laying out or alteration of a means of access to regional roads, the following must be considered:
i.the effects of the development on traffic flow and safety, the character and function of the road, the volume and speed of traffic, the width of the carriageway and visibility; and
ii.the volume and type of traffic generated by the development.
…
3.3.6Where access is permitted, conditions may be imposed prescribing the location and width of the junction or driveway to ensure adequate visibility and to provide for the safe and convenient movement of vehicles both entering and leaving the traffic stream. In determining design requirements for junctions and driveways, the Commission has regard to standards recommended by both the National Association of State Road Authorities and Main Roads Western Australia.
The Driveways Policy was a policy document of MRWA, amended on 29 June 2015.[65] Section 3 applied to 'State roads' which are defined to include highways under the control of MRWA.[66] It was not in dispute that s 3 applied to Great Northern Highway. Clause 3.3.7 provided that left and right‑turn auxiliary lanes were required to be provided at the owner's expense for driveway access in accordance with specifically prescribed requirements.[67]
[65] Exhibit A-55(i).533.
[66] Exhibit A-55(i).538 - 542.
[67] Exhibit A-55(i).541.
Mr Douglas set out in his witness statement the matters he considered when coming to the view that there was 'considerable scope' for the initial development application to be approved. He candidly accepted that he did not include any reference in that assessment to the Control Policy or the Driveways Policy.[68] Mr Douglas also accepted that those policy documents were not addressed in the initial application letter of 30 June 2015. Mr Douglas explained that was because he did not think the crossover from the Property to Great Northern Highway 'was going to be a significant issue in the context of what we had seen in the past'.[69] In his oral evidence, Mr Douglas explained his confidence was based on his 40 years of experience dealing with local authorities and his knowledge of cases where crossovers of this nature had been achieved, particularly in the Wheatbelt Region.[70]
[68] ts 203.
[69] ts 204.
[70] ts 221 - 222.
Mr Douglas stated in his witness statement that at the time of the application in June 2015, he was not aware of MRWA's proposal to realign and upgrade the Great Northern Highway such that it would form part of the proposed new Perth‑Darwin Highway, nor was he aware of any plans by MRWA or anyone else to widen Great Northern Highway in the vicinity of the Property.[71] In cross‑examination, Mr Douglas confirmed that when he was first contacted by Mr Rawson in May 2014 to investigate the development potential of the Property, he was not aware of any plans to widen or upgrade Great Northern Highway.[72]
[71] Exhibit G [18].
[72] Mr Douglas repeated that proposition in cross-examination; ts 189.
In his witness statement Mr Douglas made express reference to LPS 2001‑2015 and specifically to the plan referred to at [13] above, depicting the proposed Perth‑Darwin Highway along a different alignment.[73] In cross‑examination, Mr Douglas gave evidence that he was aware of a general plan to upgrade Great Northern Highway as reflected in LPS 2001‑2015, but he was unaware of any details beyond what was contained in that document.[74] Mr Douglas accepted, in effect, that the route depicted in LPS 2001‑2015 was not more than a 'proposal'.[75]
[73] Exhibit G [19].
[74] ts 196 - 197.
[75] ts 199.
Mr Douglas's evidence was that he was not aware of the Commonwealth's media statement[76] of 6 February 2014 regarding the upgrading and realignment of Great Northern Highway.[77] However, Mr Douglas accepted when presented with the media statement that it revealed a plan to upgrade Great Northern Highway on its existing alignment between Wubin and Muchea which would include the section of Great Northern Highway adjacent to the Property.[78]
[76] Exhibit H 'Building WA Transport Infrastructure for the 21st Century', 6 February 2014 and see [13] of these reasons.
[77] ts 197, 216.
[78] ts 198.
In further evidence, Mr Douglas said that at the time of making the initial application, he and Mr Famiano were generally aware of an intention to upgrade Great Northern Highway on its existing alignment but were unaware of its scale.[79] Mr Douglas said he approached MRWA but he was unsuccessful in obtaining further information until after the application had been lodged.[80] It was only through discussion with MRWA after lodging the initial application at the end of June 2015 that Mr Douglas and his colleague were able to ascertain the detail of what was proposed. In yet further cross‑examination, Mr Douglas appeared to deny that he or Mr Famiano had any knowledge of any proposed upgrade to the relevant section of highway.[81] In other evidence it appeared that Mr Douglas may have had some idea of an upgrade of the Great Northern Highway adjacent to the Property prior to lodging the initial application but only discovered subsequently that it was to be part of the realignment of the Perth‑Darwin Highway.[82]
[79] ts 214.
[80] ts 215.
[81] ts 216 - 217.
[82] ts 218 - 219.
Mr Douglas did not recall having seen the letters from Mr Rawson of mid‑July 2014 which referred to an upgrade of Great Northern Highway.[83] Mr Douglas accepted those letters indicated that Instant Products was aware of some proposed upgrade by mid‑July 2014, however in further evidence he appeared to equate that knowledge with what was contained in the LPS 2001‑2015.[84]
[83] ts 219.
[84] ts 219 - 220.
In the end, the evidence of precisely what Mr Rawson, Mr Douglas or anyone else at URP knew about any proposed upgrade of Great Northern Highway in the vicinity of the Property when Instant Products purchased the Property, was quite unclear. That is understandable given the passage of time.
More significantly, the evidence indicated that when Instant Products purchased the Property it did so ignorant of the public work that was by then proposed (at least to some degree) and that ultimately occurred. The clear tenor of both Mr Rawson's and Mr Douglas's evidence was that when they lodged the initial application in June 2015 a year after Instant Products entered into the contract to purchase the Property, they did not anticipate that the circumstances would be altered by the upgrading and realignment of Great Northern highway adjacent to the Property. On their own evidence, they were taken by surprise by that development. Although Mr Rawson's letters of 14 July 2014 make reference to a proposed upgrade, it is not clear whether Mr Rawson had that knowledge when he entered into the contract of sale in June 2014. Nor is it possible to determine whether Mr Rawson had any appreciation of the scale of what was proposed. In any event, I am satisfied that when Instant Products entered into the contract for the purchase of the Property it did so without any appreciation of the public work that came to pass and without any anticipation of the scale or the impact of the upgrade and realignment that would take place.
I find that at the time that Instant Products entered into the contract for the purchase of the Property, Mr Rawson and his planning consultant Mr Douglas were not aware, and did not anticipate the public work that came to pass. It follows that the price paid by Instant Products was a price paid without taking account of the public work.
Mr Douglas's evidence regarding the balance of the Property
An issue that arises for consideration, particularly in relation to the value of the Taken Land, is the development potential of the balance of the land beyond the area the subject of the development application. In relation to the balance of the Property, the following exchange took place towards the end of Mr Douglas's evidence:[85]
SOLOMON J: I have a question as to whether your view as a planner is – whether there are other parts of the land that might be suitable for other sorts of development. Or is it your view that outside the envelope of the application, it is only suitable for rural?
MR DOUGLAS: I would suggest that everything outside the envelope was only really suitable for rural. We had a massive hill in the northern part of the land that had significant slope. So, we knew that that was constrained. It was really only suitable for grazing of animals. We knew that the rear section behind the – where the proposed development was going to go was flatter ground. We knew that - that again, was only really going to be suitable for rural use. And we also were mindful of there is an extractive industry immediately south that imposes a significant buffer. This land is affected by buffers. It is affected by special control areas. So, there are significant limitations on higher order uses if you know what I mean. So, we have always expected that the balance portions really were only suited for rural use or extractive industry, as reflected in the agricultural resource zoning.
SOLOMON J: So, the fact that there might have been other land outside the building envelope that was not hilly, because the really hilly bit is in the northeast did that flatter land not to the northeast not have development potential beyond rural?
MR DOUGLAS: No. It didn't because it was constrained by buffers. And it was constrained by vegetation to an extent.
SOLOMON J: What do you mean by constrained by vegetation? Any rural land is constrained by vegetation?
MR DOUGLAS: Yes. Well, it was banksia country. So, yes, we couldn't go in there and clear. But it was really ideally suited for rural uses. That is the way we – I see it.
[85] ts 222 - 223.
It was plain from that evidence that outside its capacity to attract something akin to the development approval that Instant Products received, Mr Douglas considered that the Property was suitable only for rural use. That candid and sober assessment stood in contrast to Mr Rawson's enthusiasm for the development potential of almost the whole of the Property.
I find that Mr Douglas gave his evidence professionally and with appropriate candour. That was particularly exemplified by the exchanges set out at [84] above. It was also apparent from the somewhat constrained manner in which Mr Douglas phrased his view of the prospects of the initial application. In that regard, it will be recalled that Mr Douglas's evidence was that the initial application in the absence of the public work enjoyed 'considerable scope' for approval.[86] That terminology reflects a degree of confidence but is appropriately restrained.
[86] ts 220.
While I accept the professionalism and candour of Mr Douglas in his evidence, in my view, his evidence regarding the prospects of success for the initial application need to be assessed with some caution. Mr Douglas was the principal of the firm tasked with advancing that application following advice Mr Douglas had given as a prelude to the purchase of the Property. The evidence of Mr Douglas was understandably coloured by his role in the task that he and his firm had undertaken. No criticism can be levelled at Mr Douglas for that. Nevertheless, I did not regard Mr Douglas as an expert with neutrality or independence. His evidence must be assessed in that light.
Events following the initial application
Following the lodgement of the initial application, communication ensued between the Shire of Chittering and Mr Famiano of URP. By email dated 28 July 2015 the Shire of Chittering raised five matters. The first of those matters was a requirement of the provision of a traffic impact statement/traffic management plan. The Shire required this to:[87]
cover the proposed and existing traffic volumes of the Great Northern Highway; but also take into account the suitability of the proposed access, types of vehicles, movement patterns etc. The referral process [MRWA] would identify if the current proposed access and traffic impact statement is acceptable or not.
[87] Exhibit A-51.305.
In his reply of the same date (28 July 2015), Mr Famiano responded to the requirement of a traffic impact statement as follows:[88]
We request that the Shire withdraw the requirement for the preparation of a traffic impact study as the costs associated with preparing such a report is high and at this state there is no guarantee our client will receive approval for the development. As you are aware, the application only proposed the construction of one (1) crossover to Great Northern Highway and that Main Roads WA are intending to upgrade this section of the Highway. We understand and appreciate that Main Roads WA may require a deceleration lane for the proposed crossover.
In light of the above, we request that the Shire refer the proposal to Main Roads first for comment.
[88] Exhibit A-51.305.
It is clear, and Mr Douglas accepted, that by this point, URP and therefore Instant Products were aware of the proposal to upgrade the section of Great Northern Highway adjacent to the Property.
It was Mr Famiano, not Mr Douglas, who attended the meeting of 14 August 2015 which led to the subsequent modification and ultimate approval of the development.
Mr Douglas set out in his witness statement the key differences between the plan the subject of the initial application and the plan that was ultimately approved. Relevantly these included the removal of direct access to Great Northern Highway and the relocation of the development eastwards to accommodate the proposed widening of Great Northern Highway.
Evidence of Janet Hartley-West
Ms Hartley-West in her witness statement, which was accepted into evidence, set out the matters on which her evidence had been requested as follows:[89]
[89] Witness Statement of Janet Hartley-West 24 March 2022 [2] (Hartley-West Witness Statement).
I have been asked to give my opinion, to the extent it is within my professional expertise in relation to the following:
(a)At the date of taking (30 November 2016) were there any crossovers from Lot 195 to Great Northern Highway?
(b)If there was a crossover or crossovers, state whether they were approved by Main Roads and whether they would be suitable permitted to be used for a transport depot and warehouse;
(c)At the date of taking (30 November 2016) would Main Roads have permitted an access to Great Northern Highway for development of the type and scale:
(i)proposed by Instant Products in its application dated 30 June 2015; or
(ii)consistent with the alternative assumptions contained in paragraphs 70 to 74 of the report of Mr Garmony (To be clear, we do not seek your advice regarding the costs assumed by Mr Garmony).
(d)If Main Roads would not have permitted access, why not? If you would have recommended that an access be permitted what intersection treatments, if any, would it have required? Your assessment should ignore the road widening as part of the Public Work. In other words you are to assume that there was no road widening Public Work being undertaken when assessing whether the Main Roads would have permitted an access to Great Northern Highway as proposed by the application for development approval dated 30 June 2015; and
(e)Were you present at the meeting held at the Shire's office on 14 August 2015? If so, please state who else was present, what was discussed and whether any agreement was reached between Instant Products and Main Roads in respect of access to Great Northern Highway.
Ms Hartley-West gave evidence that at the time of the Taking, MRWA did not maintain a formal database or inventory of crossovers to roads such as Great Northern Highway.[90] She explained however that there is a historic government filing system that preserves records of approved applications.[91] Ms Hartley‑West was able to confirm that a search of the records of MRWA did not disclose any applications for crossovers for the Property. Nor was there any evidence of approved applications for crossovers from the Property.
[90] Hartley-West Witness Statement [11].
[91] ts 230.
Ms Hartley-West acknowledged that there were in fact three crossovers in use. Her evidence was that the crossovers were not 'formally approved and provided access to [the Property] for existing rural uses only'.[92]
[92] Hartley-West Witness Statement [12].
I find that there was no approval for the three crossovers that existed at time Instant Products purchased the Property.
In relation to the question of whether access would have been permitted by MRWA as proposed in the initial application, in her witness statement Ms Hartley‑West gave unchallenged evidence in the following terms:[93]
Great Northern Highway is classified as a Primary Distributor Road by MRWA. It forms part of the major arterial Perth-Darwin National Highway and provides the main connection for freight, commuter and tourist traffic between Perth and the north of the state. This section of Great Northern Highway has a speed zone of 110km/hr and carried 3965 vehicles per day (2015/16 figures). The percentage of heavy vehicles is 23.0%. Great Northern Highway forms part of the RAV 7 restricted access vehicles route, permitting vehicles up to 36.5m long and a maximum mass of 107.5T. The Great Northern Highway also forms part of the 'Over Size Over Mass' route, that caters for loads up to 8.0m wide. The combination of the above means that Great Northern Highway is unique for the area and has been designed and dedicated to the efficient and safe movement of freight as a freight corridor. The traffic on Great Northern Highway expects to travel at high speed with minimised interruptions in free flow and limited congestion. Given the high speed, heavy vehicles are not able to stop, accelerate or decelerate as quickly as passenger cars and limiting the number of conflict points increases the safety for all users. Conflict point include crossovers and intersections.
[93] Hartley-West Witness Statement [17].
Ms Hartley-West went on to explain that a number of different policies and procedures are used to determine the requirements for new crossovers for a Main Roads road. At the relevant time these included not only the Control Policy but also the Driveways Policy.
Ms Hartley-West then set out the historic traffic volume figures for the relevant section of Great Northern Highway and her assessment of the traffic impact of the proposal set out in the initial development application.
In answering the question of whether access would have been permitted, Ms Hartley‑West referred to the fact that at the time of the initial development application, MRWA 'was developing the improvements to Great Northern Highway’ and that ‘the project team had already completed preliminary concept designs that had identified the need to provide access to [the Property] and adjacent lots via a service road arrangement'.[94] Ms Hartley‑West stated in her witness statement that MRWA's 'first position would have been to protect the function of Great Northern Highway and refuse access ... and have the development gain access from Wandena Road as per planning policy and the importance of Great Northern Highway'.[95] She went on to explain that theoretically if access from Wandena Road was not possible, then access from Great Northern Highway would have been considered. However, given that at the time of the initial application designs for a service road arrangement were already in place, the issue of access from Wandena Road did not arise and she was therefore not in a position to advise on how such an application would have been assessed. However, if access from Great Northern Highway was to be considered it would have required the submission of a Traffic Impact Statement.[96] Ms Hartley‑West went on to explain that if access from Great Northern Highway had been considered the best option and permitted, then the relevant MRWA policies would have required improvements and infrastructure to be undertaken, which Ms Hartley‑West estimated would have cost in the vicinity of $2.3 million.[97]
[94] Hartley-West Witness Statement [21].
[95] Hartley-West Witness Statement [18].
[96] Hartley-West Witness Statement [2]; Supplementary Witness Statement of Janet Hartley-West 26 August 2022 [5], [6].
[97] Hartley-West Witness Statement [40] - [41]; Supplementary Witness Statement of Janet Hartley-West 26 August 2022 [7].
Ms Hartley-West accepted in cross-examination that the Control Policy operated as a guideline and that it was neither prescriptive nor proscriptive.[98]
[98] ts 231.
In cross-examination Ms Hartley-West was taken to LPS 2001‑2015 and specifically to the proposed alignment of the Perth‑Darwin Highway in that document. Ms Hartley-West did not recall having previously seen that alignment[99] and confirmed she was not aware of it and was not assessing applications on the basis of that alignment.[100] Ms Hartley‑West was not employed by MRWA prior to 2014.
[99] ts 233.
[100] ts 233.
Mr Hartley-West accepted that the public work involved at least the part of Great Northern Highway adjacent to the Property becoming what is termed a 'controlled access road'. With that designation, Ms Hartley‑West explained, there was no scope to permit access directly from the Property. Ms Hartley‑West accepted that by the time of Instant Products' initial application on 30 June 2015 there was no scope for the granting of approval to a crossover directly from the Property to Great Northern Highway.[101]
[101] ts 238 - 239.
The substance of Ms Hartley‑West's evidence was that at the time of the initial application there was no prospect for the approval of a crossover to Great Northern Highway and that was because that section of Great Northern Highway was destined to become a controlled access road with the proposed public work.[102] Her evidence as to what would have occurred in the hypothetical absence of the public work was less clear. As discussed below, I was left with the impression that Ms Hartley‑West did not fully appreciate the full extent of the hypothetical scenario that was posed. However, in my view it was sufficiently clear that she considered such an application would have been problematic and that it would only have been granted on the condition of the provision, by the developer, of significant road infrastructure at a very considerable cost.
[102] ts 238 - 239.
As set out above, the instructions to Ms Hartley‑West expressly asked her to provide her assessment on the basis of ignoring the public work. It was submitted on behalf of Instant Products that although Ms Hartley‑West recited that aspect of her instruction, in reality, her evidence was not given on that basis. Rather, Ms Hartley‑West's evidence about the prospect of approval for a direct crossover from the Property to Great Northern Highway either assumed or was infected by the situation as it existed and was formed in light of the proposed public work.
Ms Hartley-West also accepted that her assessment of traffic movements along Great Northern Highway was undertaken on the assumption that there would be no diversion of traffic to the route depicted in LPS 2001‑2015.[103] Counsel for Instant Products maintained that in the absence of the public work the Perth‑Darwin Highway would likely have been constructed along the alignment depicted in LPS 2001‑2015. Therefore, by not taking account of the consequential diminution of traffic that would have been caused by that alternative alignment, Ms Hartley‑West failed to assess the hypothetical development application in the absence of the public work. It was put to Ms Hartley‑West that in the absence of the public work and the likely construction on the alignment depicted in LPS 2001‑2015, there would have been a reduction in the traffic along the relevant section of Great Northern Highway. Ms Hartley‑West resisted the proposition that it would have 'significantly’ reduced traffic but accepted that the traffic would have reduced to some extent. Ms Hartley‑West accepted that her opinion was given on the basis that the traffic would not reduce and she accepted that her assessment of the traffic numbers was likely higher than would have been the case if the Perth‑Darwin Highway had taken the route depicted in LPS 2001‑2015. Nevertheless, Ms Hartley‑West was careful to point out that in any event, Great Northern Highway would have remained under the jurisdiction of MRWA and not the local government.[104]
[103] ts 243.
[104] ts 243, 244.
Counsel for the defendant objected to those questions being put to Ms Hartley‑West. The defendant submitted that the questions proceeded on the impermissible premise of seeking to reintroduce the public work in the hypothetical scenario where there is no public work. In advancing that submission, counsel for the defendant relied upon a passage in Kelliher v Commissioner for Main Roads [No 2] where Pritchard J was considering a case based on the submission that in the absence of the public work (a highway), an alternative road network would have evolved such that ignoring the public work made no difference to the outcome.[105] Pritchard J found it unnecessary to determine the question, but her Honour said:[106]
I have serious doubts as to whether it is open to the defendant to advance this alternative case, given that it purports to rely upon the 'unaffected' scenario but then imports a variation of the very same public work that is excluded in the unaffected scenario.
[105] Kelliher v Commissioner for Main Roads [No 2] [2015] WASC 478 (Kelliher) [723].
[106] Kelliher [723].
I am inclined to the view that this matter presents different considerations to the circumstances before Pritchard J. The submission advanced by Instant Products does not hypothesise an alternative that is the 'very same public work'. Rather, Instant Products relies upon a planning instrument published by the local authority (and endorsed by the WAPC) to establish what was likely to have occurred in the absence of the public work of the realignment and widening of Great Northern Highway that included the section adjacent to the Property. I do not consider therefore that the questions were premised upon an impermissible foundation. In the end, as will be explained, I do not consider it necessary for me to resolve that question.
In my view, Ms Hartley‑West's evidence was indeed at least strongly influenced by the reality of the proposed public work. It was difficult to distil from her evidence a clear appreciation by Ms Hartley‑West of the task required of the instruction to ignore entirely the public work. Aspects of her evidence appeared plainly to be based on the reality of the public work. As noted above, Ms Hartley‑West's assessment of whether access would have been permitted took account of the fact that MRWA was at the time already developing the improvements to Great Northern Highway, including a service road arrangement. In cross‑examination, Ms Hartley‑West appeared to accept that the absence of any prospect of approval for the crossover was a product of the proposed public work. It was difficult to discern from her evidence whether Ms Hartley‑West appreciated that she had been asked to opine on what may have transpired in the complete absence of the public work.
That difficulty with Ms Hartley‑West's evidence is not surprising. Ms Hartley‑West is a very well‑qualified professional engineer who gave her evidence is a straightforward, credible and honest manner. She is an experienced engineer who has dealt with complex engineering realities. No criticism lies in respect of what appeared to be her occasional lack of appreciation that some of the issues were directed to an alternative hypothetical universe of a road configuration that never did, and never will, exist. It is unremarkable that such a notion might be familiar to and appreciated by lawyers (and philosophers and theologians) but not fully appreciated by an engineer required to provide instant answers to questions in a witness box.
Be that as it may, I doubt whether the evidence of what Ms Hartley‑West says she would have done in a given hypothetical scenario is of assistance to the court or even admissible. Rather, the court's assessment is to be made by an objective consideration of the circumstances, including the relevant instruments and documents to which the decision‑maker would have had regard, and the processes likely to have been undertaken or required. To that extent at least, Ms Hartley‑West's evidence was of considerable assistance.
Conclusion on direct access in the absence of the public work
I am satisfied on the balance of probabilities that regardless of the public work, the defendant was unlikely to have approved the crossover as proposed in Instant Products' initial development application. I am further satisfied that it is highly unlikely that the defendant would have approved the crossover to Great Northern Highway without very significant cost to Instant Products for road infrastructure, contrary to the position advanced by Instant Products.
The proposed crossover was governed by reg 14 of the Local Government (Uniform Local Provisions) Regulations 1996 (WA). That meant that the crossover could not have been approved without consultation with, and written approval from, the Commissioner of Main Roads.
Whether or not the realignment went ahead on the route depicted in LPS 2001‑2015, or indeed whether it went ahead at all, I am satisfied that the initial application would have required the submission to MRWA of a Traffic Impact Assessment. I am further satisfied that it is very likely that MRWA, in the application of the relevant policy guidelines, including the Control Policy and the Driveway Policy, would not have permitted direct access to Great Northern Highway from a facility such as that proposed by the initial application without substantial road infrastructure works at the cost of the developer. I am satisfied on the evidence that the cost of those works would have been very significant. Ms Hartley‑West's evidence was that modification to the road and access infrastructure would have been required, and that the cost was likely to have been in the vicinity of $2.3 million. That evidence was substantially unchallenged. As I have observed, Ms Hartley‑West presented as a credible, thoughtful and well‑qualified expert. I accept her evidence. Whether the works would have amounted to $2.3 million or a different figure, I am satisfied that they would have been at least in the vicinity of the cost of the Property itself and certainly sufficient to make a very substantial difference to the cost of the development and quite likely render it unviable.
I do not accept the contention of Instant Products that in the absence of the public work, approval for the crossover would have been obtained at a relatively modest cost to Instant Products.
First, the plain application of the Control Policy and the Driveways Policy, as explained by Ms Hartley‑West, strongly suggests that even if a direct crossover had been approved, it would have required significant design modifications. My findings in relation to that cost are set out above.
Secondly, Mr Douglas's confidence was based on his recollection of his experience dealing with local authorities. To the extent that the experience was particularised, it related to a different area of Western Australia, the Wheatbelt Region. Mr Douglas's rather unparticularised recollection of his experience, although no doubt genuine, was an inadequate foundation from which to displace the plain application of the relevant guidelines. The evidence and submissions advanced on behalf of Instant Products were to the effect that the application of the relevant planning instrument and guidelines need to be attended with a dose of practical on‑the‑ground reality. So much may be accepted. But no substantial evidence of that reality was presented beyond Mr Douglas's unparticularised recollection of his experience, principally in a different region.
Thirdly, in his assessment Mr Douglas does not appear to have paid sufficient or indeed any regard to the relevant planning instruments and guidelines including the Control Policy and the Driveways Policy.
Fourthly, the email from Mr Famiano of URP to the Shire of Chittering on 28 July 2015 referred to at [89] above, acknowledged the prospect of the application not meeting with success and indeed used this as a basis to seek exemption from the requirement to provide a traffic impact study. This was consistent with the initial preliminary advice given by Mr Douglas to Mr Rawson by email dated 29 May 2014 in which Mr Douglas cautioned that any proposed development or usage must be planned with due regard to the need to obtain approvals from MRWA for direct access to Great Northern Highway. Those communications did not express or reflect any particular degree of confidence as to the prospects of obtaining that approval.
Fifthly, the existing crossovers were historical, makeshift, unapproved and created for rural uses. The existence of those crossovers provided no grounds for any confidence that direct access from a significant facility involving heavy vehicles would be approved.
Valuation evidence
The plaintiff tendered in evidence reports from Mr Garmony dated 9 February 2017, 26 October 2020 and 2 November 2021, and a witness statement of 22 January 2024. The defendant tendered in evidence reports of Mr Srhoy. The first was prepared in March 2017 and was attached to a witness statement dated 27 September 2022. The defendant also filed witness statements of Mr Srhoy dated 26 August 2022 and 21 December 2023.
The evidence of the two valuers related both to the value of the Taken Land (under s 241(2)) and the claimed loss and damage under s 241(6). Their positions evolved somewhat over the course of the reports and the conferral. It is only necessary to deal with the position advanced by each valuer at trial. I shall deal in turn with the value of the Taken Land and then the claim for loss and damage under s 241(6).
Value of the Taken Land
As noted, the Taken Land was a strip of 15.840 ha adjacent to the Property along Great Northern Highway.
It was not in dispute that the Taken Land ought to be valued by reference to the most advantageous purpose for which it could be adapted, most often characterised as its highest and best use, as at 30 November 2016. The issue of the Taken Land's potential is to be viewed from the perspective of the hypothetical purchaser in accordance with what is now widely referred to as the 'Spencer' test.[107]
[107] This is a reference to the test laid down in Spencer v The Commonwealth (1907) 5 CLR 418. See also McKay [1503], [2213].
Both valuers analysed and based their valuation on what they considered to be comparable sales. The comparable sales method has been described by the High Court as the 'traditional and usually unexceptionable method' of land valuation.[108] The valuers agreed this was the appropriate method to arrive at a market value of the Taken Land.[109]
[108] Maurici v State Revenue [2003] HCA 8; (2003) 212 CLR 111 [16].
[109] Exhibit A-53.436 Item 12.
It is commonly the case that in arriving at a value for taken land, a rate for the value of the land will be determined by reference to comparable sales. That rate is often then applied pro-rata to the taken land to arrive at the value of the taken land. That approach may however require some modification with large parcels of land that contain identifiable separate portions of land with different uses or potential uses. In this matter, both valuers at trial agreed that the land ought to be valued in a piecemeal fashion, that is, attributing different rates of value to different parts of the land depending on their development potential. The valuers disagreed, however, on the relevant rates and how those rates should be allocated to different parts of the land.
Mr Garmony considered that the most comparable sale was the sale of 132.5 ha at 472 Brand Highway in August 2016. That property was regarded by Mr Garmony as 'similarly located and zoned'.[110] Mr Garmony analysed that sale as reflecting an overall rate of $41,170 per ha.[111] Mr Garmony took the view that the whole of the Taken Land, being relatively flat land fronting Great Northern Highway, enjoyed the same development potential as the portion of the Property that was ultimately the subject of the successful development application. Based on the sale of 472 Brand Highway, Mr Garmony considered the rate of $40,000 per ha was the appropriate 'blended' rate reflecting rural land with a spectrum of development potential but excluding rural land with no or very little prospect of development potential.[112] The $40,000 per ha blended rate in Mr Garmony's view was applicable to any part of the Property that was relatively flat. In his view, that rate was therefore applicable to all of the Property on the road side of the contour of Australian Height Datum[113] of 115 m peak because such land had potential for a non-rural use.[114] Mr Garmony assessed approximately 43.5 ha of the Property as having development potential and the remaining 69 ha as limited to rural use.[115] In Mr Garmony's view, the whole of the Taken Land fronting Great Northern Highway was relatively flat and therefore the blended rate of $40,000 per ha should be attributed to the whole of the Taken Land.
[110] Exhibit A-53.445.
[111] Garmony Report 2 November 2021, Exhibit A-52(iii).426, Exhibit A-52(iii).430; Exhibit A-53.445.
[112] ts 289.
[113] Mr Garmony adopted without objection use of the standard measure in Australia for the height of land known as the Australian Height Datum.
[114] ts 297 - 298.
[115] Exhibit A-53.436.
The land with no or limited potential in Mr Garmony's view attracted a purely rural rate, which he assessed as $15,000 per ha. Mr Garmony later conceded there was an area of 0.6606 ha of the Taken Land which would be required as a water course buffer and therefore did not enjoy the same level of development potential and should only attract the lower rural rate. Applying the purely rural rate of $15,000 to 0.6606 ha of the Taken Land, and the blended rate of $40,000 per ha to the balance of the Taken Land, Mr Garmony arrived at a value of $617,000 (ex GST) for the Taken Land.
In contrast, Mr Srhoy pointed to the fact that there was only a little over two years between Instant Products' purchase of the Property and the date of the Taking. Both valuers agreed that in the intervening period the market was stable[116] and possibly declining.[117] In the circumstances, Mr Srhoy considered that the most relevant sale from which to assess the market value of the Property was Instant Products' own purchase of the Property in 2014. That sale reflected a land rate of $11,571 per ha. Mr Srhoy initially used that rate to assess the value of the Taken Land.[118] However, through the conferral process and his subsequent witness statement of 21 December 2023, Mr Srhoy adopted a modified position. Like Mr Garmony, that approach utilised one rate for land with development potential and a different rate for land with only rural potential. Mr Srhoy arrived at a rate of $50,000 per ha for land with significant development potential and a 'blended' rate of $12,500 for rural land encompassing a spectrum of development potential. Mr Srhoy derived that rural rate of $12,500 from the sale of the Property itself to Instant Products in 2014 which he believed reflected the blended rural rate.[119] Mr Srhoy then estimated that of the Taken Land, approximately 4.74 ha directly adjoined that portion of the Property that was the subject of the successful development application. Mr Srhoy therefore considered that 4.74 ha of the Taken Land enjoyed a level of development potential so as to attract the rate of $50,000 per ha. The balance of the Taken Land only attracted a rural rate and should therefore be valued at $12,500 per ha. On that basis, Mr Srhoy assessed the value of the taken land as 4.74 ha at $50,000 per ha and the balance of the Taken Land at $12,500 per ha producing a value of $375,635 to be rounded to $375,000.[120]
[116] ts 326.
[117] ts 295, 313.
[118] See Exhibit A-54(i).476 which applied an 'optimistic' rate of $12,500 to whole of the Taken Land based on the purchase of the Property by Instant Products in 2014.
[119] ts 286 - 288.
[120] Exhibit A-53.445 - 446.
There is some complexity in Mr Srhoy's position. The valuation exercise is directed to determining what a hypothetical purchaser would have paid in the open market on date of the Taking, 30 November 2016. At that date, there was no approval of which a hypothetical purchaser could have been aware. It would be impermissible to assess the market value as at 30 November 20216 by reference to events that took place after that date and could not have been reasonably foreseen at that time.
That difficulty was, in effect, addressed in the course of Mr Srhoy's oral evidence at trial. Mr Srhoy explained that, following his initial report and in the course of conferral, he accepted that the subsequent approval of Instant Products' development indicated that his initial valuation probably did not give sufficient regard to the Property's development potential that would have been apparent as at 30 November 2016. Mr Srhoy considered that the best way to address that potential was to attribute the higher rate of $50,000 per ha to the land that had significant development potential. Of the Taken Land, he considered the most appropriate way to identify the land with that degree of development potential was to allocate the higher rate to that portion of the Taken Land that was directly contiguous with that portion of the Property in respect of which the development approval was ultimately granted.
It is noteworthy that Mr Srhoy attributes a higher rate to the land with greater development potential than does Mr Garmony, albeit to a much smaller parcel of land. It was clear that this was because Mr Srhoy was attributing a higher rate on the basis of the greater potential, or as the defendant's counsel put it, 'for land which he considered to have a better prospect. He's giving it an almost certain prospect of being developed on that confined part of it'.[121]
[121] ts 421.
The position of each valuer may be open to some legitimate challenge. That reflects the reality that valuation will often, unavoidably, entail a degree of well‑considered speculation. It is, of its nature, an imperfect science or perhaps indeed not a science at all. Rather it is an art involving many subjective judgements, and it relies on analysis that is not always capable of articulation, and sometimes it borders on guesswork.[122]
[122] McKay [165], [2213(d)].
Mr Garmony's position is difficult to reconcile with the fact that it reflects a rate of just under $39,000 per ha for the Taken Land, whereas the sale of the Property just over two years prior reflected a rate of just under $11,600 per ha. Or put more broadly, Mr Garmony in effect values the Property at $2.7 m in 2016,[123] whereas it sold for $1.3 m in 2014. As noted, it was agreed that in the interim period, the market was stable, if not deteriorating. Those simple facts suggest that Mr Garmony's rate is likely to be inflated, or at least ought to be applicable to a more confined portion of the Property. In contrast, Mr Srhoy's valuation, while accepting that the Property had significantly greater development potential than was reflected by the purchase price of 2014, is more aligned with the reality of the market reflected in that sale. There is insufficient, if any, evidence to suggest that the sale price of the Property in 2014 was at less than half the Property's true market value.
[123] ts 309.
Mr Garmony candidly accepted that he did not include the 2014 sale of the Property in his analysis at all. Mr Garmony did not provide an adequate explanation for omitting the analysis of a sale that in my view was, at the very least, relevant. This omission militates against the acceptance of Mr Garmony's analysis.
In my view, the sale of the Property in 2014 is, by some measure, the most comparable sale in the assessment of the value of the Property in November 2016. That is especially so for the following reasons.
First, it was agreed by the valuers that in the period from the sale of the Property to November 2016 the market was stagnant or possibly in mild decline.
Secondly, there is no objective evidence to establish that Instant Products managed to secure a remarkable bargain and acquire the Property for a price far less than its market value. Certainly, while it might be said that Instant Products paid a price that ultimately did not sufficiently reflect the true development value of the Property, there is nothing to suggest that Instant Products managed to pay only 50% of the true market value of the Property. That is reinforced by the fact that it was purchased from a public company, which it may be expected was subject to all its attendant duties to ensure a fair sale for its shareholders and scrutiny that was likely to be triggered by any sale for a price drastically less than market value.
Thirdly, in his evidence Mr Garmony accepted that he assumed that access would be approved from the Property to Great Northern Highway at minimal cost.[124] For the reasons explained at [115] - [120], I do not accept that assumption. Further, I do not consider that such an assumption lay within Mr Garmony's field of expertise.
[124] ts 315.
For those reasons, I do not accept Mr Garmony's valuation of the Taken Land. I also do not accept Mr Garmony's position that it was not relevant to take account of the sale of the Property in 2014 as one of, if not the primary comparable sale.
Moreover, I have found that neither Mr Rawson nor Mr Douglas was aware of the proposed public work or its impact at the time that Instant Products contracted to purchase the Property. That means that the price paid was likely to be reflective of the market value without taking account of the public work. That is precisely how the LAA requires the value to be assessed for the purposes of s 241(2). That adds weight to the relevance of Instant Products' purchase of the Property in 2014 as a highly relevant comparable sale.
I accept that Mr Srhoy's written valuation and comments in the Valuers' Conferral are open to some criticism. The demarcation of that portion of land to which Mr Srhoy attributes the higher rate of $50,000 is based on the approval that had not happened at the valuation date and thus the basis of that precise demarcation could not have been foreseen. There is therefore both an impermissibility and artificiality in Mr Srhoy's analysis.
However, I am satisfied from the matters that emerged in Mr Srhoy's oral evidence, that his use of the subsequent approval was not, in the circumstances, inappropriate. There is no dispute that the assessment is to be made by the prudent hypothetical purchaser as at 30 November 2016. That purchaser would have taken account of the reasonable development potential of the Property with all its attendant beneficial features as well as risks, bearing in mind its zoning as 'Agricultural Resource' and the discretionary nature of power to approve non‑agricultural development. The fact that a significant portion of the Property may have been suitable for a development of the nature contemplated by Instant Products does not mean that development on the whole of that portion would have been approved. Put simply, if 40% of the Property had reasonable development potential, it means that a development might likely be approved on any part of that 40% portion of the Property. It does not mean that approval could have been expected by a hypothetical purchaser to be granted on 40% of the Property. A prudent purchaser would thus have taken account of, and sought advice on, the foreseeable scale and extent of any prospective development, particularly in the short to medium term. Mr Srhoy's assessment was that the development that was ultimately approved reflected, very approximately, the scale of a development that a prudent purchaser, reasonably and properly advised, might have reasonably expected to be approved, at least for the time being.[125] The demarcation of the point on the Property at which the higher rate applied was therefore not artificial or retrospectively informed. It was not a matter of where the line was located, or the precise location of the subsequent approval, but rather the size of that portion of the Property which at the date of valuation could reasonably be expected to attract a higher rate for its development potential.
[125] See McKay [377] in particular [377(8)].
That aspect of the analysis is also broadly consistent with the evidence given by Mr Douglas that beyond the building envelope the subject of Instant Products' development application, the land was suitable only for rural uses. In closing submissions, counsel for Instant Products sought to minimise the significance of that evidence and suggest that this evidence was not within Mr Douglas's field of expertise. In my view, the opinion expressed by Mr Douglas in his evidence was within his expertise as an experienced planner and was centrally relevant to an assessment of what a prudent hypothetical purchaser was likely to have considered, and been advised, in November 2016.
That evidence of Mr Douglas was also put to Mr Garmony.[126] Mr Garmony said that a purchaser might nevertheless take the view that the Property had more expansive development potential and, in that context, Mr Garmony said that he believed other portions of the Property could be developed. However, these matters fell more readily within Mr Douglas's sphere of expertise than that of Mr Garmony. Simply put, advice regarding the development potential of the Property, in light of the regulatory planning landscape is advice which a prudent hypothetical purchaser would likely seek from an experienced planner rather than a valuer.
[126] ts 355 - 356.
The evidence of Mr Douglas reinforces the conclusion that at the date of valuation, the prudent purchaser would likely have attributed the significantly higher rate for development potential to a portion of the Property more aligned with the analysis of Mr Srhoy than that of Mr Garmony. It may be that in future years, further development becomes possible. However, on the basis of the evidence advanced at the hearing, Mr Srhoy's analysis is a more accurate reflection of the likely assessment of the prudent hypothetical purchaser in November 2016.
For the reasons set out above I have concluded that Mr Srhoy's analysis of the value of the Taken Land is to be preferred. I therefore find that the value of the Taken Land as at the date of the Taking was $375,000.
Claim under s 241(6)
In its Amended Statement of Claim, Instant Products pleaded that by reason of the Taking, the relevant section of Great Northern Highway will become a 'Controlled Access Highway' such that direct access from the Property to Great Northern Highway will be prohibited.[127] As a result, the development proposed by Instant Products required certain modifications. The additional costs associated with those modifications form the basis of Instant Products' claim as set out above at [36] ‑ [46] above.
[127]Amended Statement of Claim 9 November 2021 [24].
Instant Products accepts that its claim under s 241(6) does not fall within sub‑paragraphs (a) to (d). Its claim is founded on sub‑paragraph (e). The substance of the claim rests on the proposition that by reason of the Taking, the Property lost its capacity for direct access to Great Northern Highway. That direct access was a valuable feature of the Property and its development potential. By reason of the Taking, Instant Products immediately suffered the loss of that valuable feature. Counsel for Instant Products expressed the claim in closing submissions as follows:
The immediate contrast is that in the before scenario, there was a pathway by which approval may have been granted for direct access. In the consequence of the public work there is no pathway and no direct access was even contemplated or could, as a matter of law, be granted. Now, that sets up what we say is the argument that gives rise to what we say is the consequential loss ...[128]
Our loss, and it is a loss, occurs on the day on which our land was taken because that's the day on which we go from the prospect of approval of access under regulation 14 to not having any right of access by reason of Section 28.[129]
...
What we say is that we have suffered that loss because from the moment at which the land was taken, we no longer could obtain direct access no matter how good a case we might mount because, legally, it was simply impermissible.[130]
[128] ts 433.
[129] ts 433.
[130] ts 443.
In closing submissions, counsel for Instant Products explained that the loss was analogous to the loss suffered by a client through the missing of a limitation period by a negligent lawyer. In those circumstances, there is no doubt that the client suffers an immediate loss by the loss of the claim.
Counsel for Instant Products explained further that it was necessary to distinguish between the fact of the loss and the quantification of that loss.[131] Counsel explained that the fact of the loss which gave rise to the claim was the immediate loss of the valuable advantage of direct access.[132] The quantification of the loss lay in the components of the claim set out about at [37] ‑ [46].
[131] ts 443.
[132] That submission was reiterated in the supplementary submissions filed by Instant Products in May 2025.
The defendant denied that the losses claimed (other than the lost dam) are compensable under s 241(6). The defendant submitted that its position was consistent with the proper construction of s 241(6) and supported by the decisions in Lenz Nominees v Commissioner of Main Roads [2012] WASC 6 (Lenz) and DBW Reynolds Pty Ltd v Public Transport Authority [2023] WASC 165. As referred to at [47] above, the latter decision was recently the subject of the Court of Appeal's decision in DBW. As the matters considered by the Court of Appeal were likely to be relevant to the determination of this proceeding, these reasons were deferred pending the Court of Appeal's decision and further submissions filed by the parties. Following the decision of the Court of Appeal in DBW, the defendant resiled from its reliance on the first instance decision, but nevertheless maintained that the Court of Appeal's decision was consistent with the position adopted by the defendant at trial that the claim lay outside the parameters of s 241(6).
The Court of Appeal in DBW considered the proper construction of s 241(6) and the relevant authorities, including Lenz.
In Lenz, Edelman J reviewed the authorities which considered s 241(6) and its statutory equivalent in the Public Works Act 1902 (WA). Edelman J explained that s 241(6)(a) ‑ (d) is concerned with compensation for damage arising from interference with activities carried on by a plaintiff on the land.[133] Section 241(6)(e) is therefore concerned with 'other facts' arising from interference with the activities carried on by the plaintiffs on the subject land.[134]
[133] Lenz [420].
[134] Lenz [421].
Edelman J went on to hold that s 241(6) does not permit the recovery of losses which have not been suffered, that is, loss or damage that has not actually been incurred.[135]
[135] Lenz [423].
Counsel for Instant Products submitted that the claim came within s 241(6) because the loss of access was immediate and therefore was a loss that was actually incurred. Instant Products in its supplementary submissions following the decision in DBW, contended that its submission was consistent with and supported by the Court of Appeal's decision. Further, as the Taking prevented direct access to the Property, the loss arose from interference with activity carried out on the land.
On the authority of DBW, the defendant accepts that loss of a commercial opportunity can be loss sustained for the purposes of s 241(6).[136] The defendant maintained however that on a proper understanding of the decision in DBW, the claim is not encompassed by s 241(6)(e).[137]
[136] Defendant's Supplementary Submissions 29 April 2025 [7].
[137] Defendant's Supplementary Submissions 29 April 2025 [9].
In DBW the Court of Appeal considered circumstances where the claimant was the lessee of the land. The claimant operated a road transportation business from the land, which was configured in such a manner by the lessee to enable it to also offer a storage service to customers. The entirety of the land was compulsorily acquired, and the premises to which the claimant relocated its business was not able to be configured so as to offer the same storage service. The claimant contended that in the absence of the compulsory acquisition, it had a good prospect of winning a commercial storage opportunity. The claimant submitted that it had therefore incurred the immediate loss of an economic opportunity by the taking of land with the capacity to provide the storage service. It therefore claimed compensation for the loss of that opportunity under s 241(6)(b) - disruption of a business.
The Court of Appeal explained:[138]
The question that arises is whether, as a matter of construction, a loss of a future business opportunity is loss or damage which is 'sustained' - or suffered - by an individual, or whether sustained has a more limited meaning. Damages for a loss of a chance or an opportunity to obtain a commercial benefit can be awarded in the context of breach of contract claims, in tort and for misleading and deceptive conduct. In such cases, the question of causation is required to be established by the plaintiff on the civil standard of the balance of probabilities. For a breach of contract, the opportunity will usually be established by proving the contract itself. In the context of a tort or misleading and deceptive conduct, the plaintiff must prove on the balance of probabilities that they have suffered some loss. The question of the value of that lost opportunity is then ascertained by reference to the court's assessment of the prospects of success of that opportunity had it been pursued. That is, by reference to the degree of probabilities or possibilities.
[138] DBW [370].
After discussing the relevant authorities, the Court of Appeal concluded:[139]
The appellants submit that there is no rational basis for adopting a different approach in the context s 241(6) of the LAA. As a matter of statutory construction, we agree that there is no reason in the text of s 241(6)(b) of the LAA, when considered in its statutory context, that would exclude loss or damage for the loss of a commercial opportunity from being loss or damage which is 'sustained' - that is 'suffered'. There is also nothing inherent in the nature of a claim for compensation following the compulsory acquisition of the land which would suggest that a loss which is sustained in the context of a breach of contract, in tort or as a result of misleading and deceptive conduct, would not also be a loss which is 'sustained' in the context of s 241(6)(b) of the LAA.
Accordingly, the trial judge erred in holding that the loss of an opportunity to win additional storage contracts was not loss or damage 'sustained' for the purposes of s 241(6)(b) of the LAA.
[139] DBW [374] - [375].
In my view, Instant Products' claim does not constitute a compensable loss within s 241(6).
First, as a matter of fact, I have found that in the absence of the compulsory acquisition and the public work, Instant Products was unlikely to have obtained approval for a direct crossover access to Great Northern Highway and even less likely to have obtained such approval at an economically viable cost. It follows that it was not the Taking that caused the Property to lose this feature. That is sufficient to defeat the claim under s 241(6).
But even if it were the case that it was the Taking that caused the loss of the ability for direct access at an economically viable cost, I am inclined to the view that the claim would not come within the purview of s 241(6). In my view, the decision in DBW did not depart from the principles articulated by Edelman J in Lenz. It remains the case that s 241(6)(e) is concerned with facts arising from interference with the activities carried on by the claimant on the subject land. It may be accepted in the circumstances asserted by Instant Products that the Taking gave rise to a potential economic loss in the sense that it rendered the balance of the property less amenable to development, and therefore less valuable. In my view, that loss is manifest in, and measured by, the loss in value of the remaining land. It is not however loss or damage sustained which arises from interference with the activities carried on by Instant Products on the subject land.
In DBW the landowner claimed to have lost a commercial opportunity relating to its existing business activity on the land. Here, Instant Products seeks compensation for future additional expenditure it expects to incur in respect of its proposed future activity on the Property, by reason of the Taking. There was no evidence of Instant Products having undertaken any activity on the Property at all. The claim relates to prospective loss in relation to future activity proposed to be carried out on the Property. It was therefore not loss that had been incurred and was not an interference with the activities carried out by Instant Products on the Property.
Moreover, in my view, for the reasons explained above, Instant Products' true complaint is that the Taking rendered its remaining land less valuable because it no longer had direct access to Great Northern Highway. That is how Instant Products itself framed its complaint of having incurred an immediate loss which gave rise to the claim for compensation. The LAA is not insensitive to such a loss. Indeed, s 241(7) is directed to the very circumstance of a compulsory acquisition having caused a loss to the value of the remaining land. Counsel for Instant Products accepted that its loss might be claimed under s 241(7) but submitted that the compensation was equally available under either s 241(6) or s 241(7).
I am respectfully unable to accept that proposition. Rather, I consider that s 241(6) and s 241(7) draw a clear distinction between losses actually incurred from interference with activities caried out on the land on the one hand, and compensation for the diminution of the value of the remaining land on the other.
In addition, compensation for reduction in the value of the remaining land under s 241(7) is subject to a set‑off for any increase in value occasioned by the public work. It cannot be the case that the requirement to account for betterment can be avoided by claiming the loss of value under s 241(6) and thereby avoiding the betterment requirement of s 241(7).
Moreover, in DBW the Court of Appeal made clear that s 241(6) requires consideration to be given to any saving resulting from the Taking. I have found above that if Instant Products had been successful in obtaining approval for direct access in the absence of the public work, it would have incurred significant cost to meet the requirements and conditions of such access. Those costs have been avoided by reason of the access now provided by the public work. That saving would need to be brought to account on a proper application of s 241(6). There was insufficient evidence to permit that exercise to be undertaken. It is possible if not likely that the additional cost of the proposed development to meet the access requirements in the unaffected scenario would have exceeded the additional costs claimed by Instant Products under s 241(6).
In those circumstances, I am unable to accept the claim advanced under s 241(6)(e). Further, in the circumstances I have outlined, and adopting the wording of s 241(6) itself, I do not consider it would be just to take into account the additional prospective expenditure envisaged and claimed by Instant Products in determining the amount of compensation to be awarded.
Conclusion
It follows for the reasons set out above that I accept the position advanced by the defendant and I consider the compensation payable:
(1)for the Taken Land under s 241(2) is $375,000;
(2)under s 241(6) is limited only to the cost of the dam.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
LZ
Associate to the Honourable Justice Solomon
26 MAY 2025
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