Mount Lawley Pty Ltd v Western Australian Planning Commission - [2004] WASCA 149

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: MOUNT LAWLEY PTY LTD -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2004] WASCA 149

CORAM: STEYTLER J
TEMPLEMAN J
SIMMONDS J

HEARD: 15-19 MARCH 2004

DELIVERED : 13 JULY 2004

FILE NO/S: FUL 12 of 2003

BETWEEN: MOUNT LAWLEY PTY LTD
Appellant (Applicant)
AND
WESTERN AUSTRALIAN PLANNING COMMISSION
Respondent (Respondent)

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram   :McKECHNIE J
Citation Number      : [2002] WASC 307
File Number            :  CIV 1550 of 1997

Catchwords:

Town planning - Reservation and acquisition of land - Value of land required to be assessed under s 36 of Metropolitan Region Town Planning Scheme Act 1959 (WA) without regard to attributes of planning scheme - Need to consider events leading to reservation and attributes of the land - Whether difference between election to acquire and compulsory acquisition

Town planning - Reservation and acquisition of land - Valuation - Need for valuations not influenced by exigencies of litigation - Whether concept of special value applicable under s 36 of Metropolitan Region Town Planning Scheme Act 1959 (WA) - Whether market value includes costs of development application, holding the land until settlement, and of acquiring replacement property - Whether interest payable by planning authority as part of purchase price - Whether interest on purchase price able to be ordered under s 32 of Supreme Court Act 1935 (WA)

Town planning - Election to acquire land - Whether validly made - Whether omission in notice of election can be remedied by later notice, after expiry of time fixed by s 36(2)(b) of Metropolitan Region Town Planning Scheme Act 1959 (WA), relying upon s 55 of Interpretation Act 1984 (WA)

Town planning - Claim for injurious affection - Whether damage arising from severance claimable under s 36 of Metropolitan Region Town Planning Scheme Act 1959 (WA) - Whether claim for injurious affection can proceed in absence of development application

Appeals - Difficulties of appeal court in assessing evidence - Extensive, complex, controversial evidence at trial - Inadequate reasons in trial judgment

Appeals - Delay in judgment of trial Judge coupled with inadequate reasons

Legislation:

Environmental Protection Act 1986 (WA), s 31(d), s 33(1) s 38(1)(b)(ii)

Interpretation Act 1984 (WA), s 55
Metropolitan Region Town Planning Scheme Act 1959 (WA), s 36
Public Works Act 1902 (WA), s 2
Supreme Court Act 1935 (WA), s 32, s 142
Town Planning and Development Act 1928 (WA), s 11(1), s 12(2a)(b)

Western Australian Planning Commission Act 1985, s 4

Result:

Appeal allowed in part
Cross-appeal allowed in part
Retrial ordered

Category: A

Representation:

Counsel:

Appellant (Applicant) : Mr W S Martin QC & Mr P L Harris
Respondent (Respondent) : Mr G T W Tannin SC & Mr B P King

Solicitors:

Appellant (Applicant) : Ilberys Lawyers
Respondent (Respondent) : State Solicitor's Office

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

15 Lorimer Street Pty Ltd v Secretary to the Department of Infrastructure (1997) 97 LGERA 239
Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430
Boland v Yates Corporation Pty Ltd (1999) 74 ALJR 209
Broken Bay Peninsular Pty Limited v Minister Administering the National Parks and Wildlife Act 1974 [1997] NSWLEC 165
Cairns City Council v CMB No 1 Pty Ltd (1997) 96 LGERA 306
Closer Settlement Ltd v The Minister (1942) 17 LGR(NSW) 62
Cobham v Frett [2001] 1 WLR 1775
Commonwealth v Morison (1972) 127 CLR 32
Cornell v Town of East Fremantle (2003) 131 LGERA 20
Crisp & Gunn Co-operative Ltd v Hobart City Corporation (1963) 110 CLR 538
Curwen v James [1963] 1 WLR 748
Environmental Protection Authority; Ex parte Chapple (1995) 89 LGERA 310
Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377
Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No 2) (2002) 6 VR 1
Folkstone v Metropolitan Region Planning Authority [1968] WAR 164
Goose v Wilson Sandford & Co, unreported; England and Wales Court of Appeal (Civil Division); 13 February 1998
Hadid v Redpath [2001] NSWCA 416
Hill v Western Australian Planning Commission (2000) 107 LGERA 229
Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196
Laminex (Australia) Pty Ltd v Smeeth [1999] NSWCA 462
MacDougall v Western Australian Planning Commission (2003) 129 LGERA 243
Marine Board of Launceston v The Minister of State for the Navy (1945) 70 CLR 518
Marshall v Director‑General, Department of Transport (2001) 205 CLR 603
Mifsud v Campbell (1991) 21 NSWLR 725
Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193
NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 1
Pastoral Finance Association Ltd v The Minister [1914] AC 1083
Pledge v Roads and Traffic Authority (2004) 78 ALJR 572
Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565
Public Service Board of New South Wales v Osmond (1986) 159 CLR 656
Queensland v Murphy (1990) 95 ALR 493
R v Maxwell, unreported; CCA SCt of NSW; 23 December 1998
Re Powter; Ex parte Powter (1945) 46 SR (NSW) 1
Ricciardello v Caltex Oil (Australia) Pty Ltd [1991] ANZ ConvR 445
Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246
Sisters of Charity of Rockingham v The King [1922] 2 AC 315
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Spencer v Commonwealth (1907) 5 CLR 418
St John Ambulance Association of Western Australia Inc v East Perth Development Authority (2001) 114 LGERA 112
Trandos v Western Australian Planning Commission (2001) 117 LGERA 257
Turner v Minister of Public Instruction (1956) 95 CLR 245
Venture Management Ltd v Commissioner of Taxation (1991) 4 WAR 283
Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520
Wilson v Liverpool City Council [1971] 1 All ER 628
Yarn Traders Pty Ltd v Melbourne and Metropolitan Board of Works [1970] VR 427

Case(s) also cited:

Abbey Orchard Property Investments Pty Ltd v Sydney City Council (1978) 37 LGRA 230
Arkaba Holdings Ltd v Commissioner of Highways [1970] SASR 94
Attorney-General v Horner (1884) 14 QBD 245
Australian Coal and Shale Employees' Federation v The Commonwealth (1953) 94 CLR 621
Beer v Bowden [1981] 1 WLR 522
Bond Corporation Pty Ltd v The Western Australian Planning Commission (1999) 108 LGERA 235
Bond v Nottingham Corporation [1940] Ch 429
Bronzel v State Planning Authority (1979) 21 SASR 513
Burns Philp Hardware Pty Ltd v Howard Chia Pty Ltd (1987) 8 NSWLR 642
Central Control Board (Liquor Traffic) v Cannon Brewery Co Ltd [1919] AC 744
Clissold v Perry (Minister for Public Instruction) (1904) 1 CLR 363
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194
Commissioner of Taxation (Cth) v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336
Commonwealth v Reeve (1949) 78 CLR 410
Consett Iron Company Ltd v Clavering Trustees [1935] 2 KB 42
Crompton v Commissioner of Highways (1973) 5 SASR 301
Doolan Properties Pty Ltd v Pine Rivers Shire Council [2000] QCA 76
Duffy v The Minister for Planning (2003) 129 LGERA 271
Email Ltd v Robert Bray (Langwarrin) Pty Ltd [1984] VR 16
Emerald Quarry Industries Pty Ltd v Commissioner of Highways (1976) 14 SASR 486
Emerald Quarry Industries Pty Ltd v Commissioner of Highways (SA) (1979) 142 CLR 351
Fraser v City of Fraserville [1917] AC 187
Grampian Regional Council v Secretary of State for Scotland [1983] 1 WLR 1340
Hoyt's Pty Ltd v O'Connor (1928) 40 CLR 566
Kiama Constructions Pty Ltd v Davey (1996) 40 NSWLR 639
Konowalow & Felber v Minister for Works [1961] WAR 40
Kozaris v Roads Corporation [1991] 1 VR 237
Langham v Mayor of the City of London [1949] 1 KB 208
Lear v Blizzard [1983] 3 All ER 662
London & North Western Railway Company v Evans [1893] 1 Ch 16
Magenta Nominees Pty Ltd v Webb, unreported; FCt SCt of WA; Library No 980622; 29 October 1998
Maynard v Dabinett (1999) 29 MVR 512
Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426
Moylan v Nutrasweet Co [2000] NSWCA 337
Nelungaloo Pty Ltd v Commonwealth (1948) 75 CLR 495
Nuland Developments Pty Ltd v Parramatta City Council (1978) 37 LGERA 258
Overton Investments Pty Ltd v Department of Urban Affairs & Planning [1998] NSWLEC 67
Pallot v Harrison, unreported; SCt of WA (Owen J); Library No 950261; 12 May 1995
Pamalco Pty Ltd v Minister Administering National Parks & Wildlife Act 1974 (No 3) (1991) 71 LGRA 441
Lasseter v Blacktown City Council [1994] NSWLEC 24
Board of Valuers; Ex parte Bond Corporation Pty Ltd, unreported; SCt of WA (Miller J); Library No 980713; 5 November 1998
Rees v Minister for Planning & Housing (1991) 76 LGRA 167
Rugby Joint Water Board v ShawFox [1973] AC 202
Taylor v Bullen (1850) 5 Exch 779
Minister v Stocks & Parkes Investments Pty Ltd (1973) 129 CLR 385
Thomas Bates & Son Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505
Trandos v Western Australian Planning Commission (2000) 107 LGERA 11
Tzouvelis v Victorian Railway Commissioners [1968] VR 112
Wimpey Construction UK Ltd v The Minister (1983) 43 LGRA 75
WMC Resources Ltd v Leighton Contractors Pty Ltd (1999) 20 WAR 489
Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156

JUDGMENT OF THE COURT:

Introduction

This is an appeal from a decision, given pursuant to s 36(2b) of the Metropolitan Region Town Planning Scheme Act 1959 (WA) ("the Scheme Act"), that the value of some 309 hectares of rural land, which had been reserved for parks and recreation and a controlled access highway by amendment to the Metropolitan Region Scheme ("MRS"), was $2.918 million. The trial Judge held that "value", in this context, should include certain outgoings and expenses paid by the owner in respect of the land. His Honour awarded interest on the various components of the value so found.
The land has been owned since 1963 by the appellant Mount Lawley Pty Ltd. That company is owned beneficially by members of the Copley family. The land has been held within the family for over 100 years. The appellant contends that the land should not have been valued as rural land, but as urban land, on the basis that it would have been rezoned but for the reservation, and that its value is some $15,000,000.
The respondent, the Western Australian Planning Commission, is established by s 4 of the Western Australian Planning Commission Act 1985. The respondent's functions include reviewing the MRS and making recommendations for its amendment to the Minister for Planning and Infrastructure. It seeks to uphold the valuation of the reserved land on a rural basis. It contends that the environmental significance of the land required it to be preserved, and is such that the land would never have been rezoned urban. It also contends that the trial Judge should not have treated the various outgoings as components of value and that his Honour should not have awarded interest. These issues are the subject of a cross‑appeal.
The reserved land is part of a larger area ("the Mount Lawley land") of some 320 hectares comprising Lots 46 and 47 Maralla Road and Lexia Avenue, located to the west of a recently developed suburb known as Ellenbrook, in the Shire of Swan. It is located in what has come to be known as Perth's north‑eastern corridor, this being one of the areas identified in the 1980s for the expansion of the Perth metropolitan area. It is some 25 kms to the north‑east of the city of Perth.
The Mount Lawley land has never been developed. It is bushland in pristine condition, disturbed only by firebreaks and tracks leading to bores established by the Water Corporation. The land has substantial areas at 48 ‑ 49 metres Australian Height Datum ("AHD"), mainly in a flat central area, where there are some shallow and seasonal wetlands. The reserved portion of the land is fringed by undulating dunes, ranging from 50 to 70 metres AHD. The vegetation is mainly banksia woodlands.
In 1990, a number of landowners, including the appellant, submitted a proposal for the rezoning of a substantial part of the north‑eastern corridor from Rural to Urban Deferred, under the MRS. The ultimate objective was the creation of an urban development at Ellenbrook. Later in these reasons, we shall refer in more detail to the rezoning application and to the appellant's involvement in the proposal. It is sufficient for present purposes to record that on 16 October 1992, by Amendment 879/33 to the MRS, some 2209 hectares of the north‑eastern corridor were rezoned from Rural to Urban Deferred, and some 309 hectares of the Mount Lawley land ("the reserved Mount Lawley land") were reserved for Parks and Recreation. This included an area of some 7.9 hectares, which, by 14 December 1994, had been re‑reserved for a Controlled Access Highway ("the CAH land") by Amendment 950/33 to the MRS (see exhibit 2045). The balance of the Mount Lawley land, some 12 hectares ("the unreserved Mount Lawley land"), fell within the area rezoned Urban Deferred, which, by 14 December 1994, had been rezoned again, to Urban (see exhibit 2045).

The compensation claim and the respondent's election to acquire

By letter dated 22 September 1995 the appellant lodged with the respondent a claim for compensation for injurious affection of Lots 46 and 47 arising from Amendments 879/33 and 950/33. The claim was made under s 11(1) of the Town Planning and Development Act 1928 (WA) ("the Planning Act"), s 36(1) of the Scheme Act, and cl 8 of the MRS.
It was common ground between the parties to this appeal that this was not a valid claim, as the required procedure calls first for a development application to be made, and then for it to be either declined, or approved subject to unacceptable conditions. In any event the respondent declined this claim by letter dated 6 October 1995.
On 7 December 1995, the appellant applied to the respondent through the Shire of Swan for approval to begin development of earthworks for urban development and sand mining associated with a proposed residential subdivision and associated development on Lots 46 and 47 (exhibit 1098). This application referred to the zoning of the land involved as "Parks and Recreation" in the MRS, but in Plan 3 of the Structure Plan the application appears to show that the land involved included land in the path of the proposed highway that led to the reservation of the CAH land.
It was common ground between the parties that the respondent did not reply to the application within 60 days of its receipt. Thus, by s 35E(6) of the Scheme Act, and cl 31(2) of the MRS, the application was deemed to have been refused. It was refused formally by letter dated 10 April 1996.
On 13 February 1996 (exhibit 187), the appellant claimed compensation for injurious affection in respect of the Mount Lawley land. The claim referred to the reservations for parks and recreation and for the controlled access highway, and said:
"(c)The reservation in each case significantly reduced the value of the land and caused severance damage to the balance of Lot 47 held by the claimant by reason of the absence of separate road access."
Compensation of $65,000 per hectare "average" was claimed for 309 hectares "including severance to the remaining portion of Lot 47 and the value of the mineral sands within Lots 46 and 47". The 309 hectares corresponded to the area of the reserved Mount Lawley land. The total amount claimed was $20.085 million (309 x $65,000).
By s 36(2) of the Scheme Act and s 12(2a)(b) of the Planning Act, the respondent was obliged to respond to the appellant's claim for injurious affection either by agreeing to pay compensation or by electing to acquire the subject land. By s 36(2)(b) of the Scheme Act, the election was to be made by notice in writing given to the appellant within three months of the claim for injurious affection.
By letter dated 9 May 1996 (exhibit 188) the Ministry for Planning notified the appellant that the respondent had "elected to purchase the portion of the above property [referring to land at Lots 46 and 47 Maralla Road and Lexia Avenue, Ellenbrook] reserved for Parks and Recreation in lieu of paying compensation". No mention was made of the CAH land. The letter stated that the date of the election was 7 May 1996.
By letter to the appellant dated 24 September 1999 (exhibit 2092), the Ministry for Planning referred to the letter dated 9 May 1996, and notified the appellant that, "insofar as there was an error in that letter concerning the description of the property which is the subject of the election to purchase", that error was "hereby corrected" by replacing the relevant paragraph in the earlier letter. In the replacement paragraph, it was said that the respondent had "elected to purchase the whole of Lot 46 and portion of Lot 47 reserved under the [MRS] both for Parks and Recreation and for Controlled Access Highway in lieu of paying compensation". The date of the election was said to be 7 May 1996, as before.
The appellant does not accept the validity of the respondent's purported correction of its error and contends that the respondent has not elected to acquire the CAH land.
The appellant and the respondent were unable to agree on the price to be paid for the reserved Mount Lawley land. That being so, by s 36(2a) of the Scheme Act, the price was to be "the value of the land as determined in accordance with subsection (2b)".
Subsection 36(2b) of the Scheme Act provides as follows:
"(2b)The value of the land referred to in subsection (2a) shall be the value thereof on the date the Commission elects to acquire the land under that subsection, and that value shall be determined -
(b)…
(ii)by the Supreme Court - if the value of the land claimed by the owner thereof is more than $1 000;
or
(c)by some other method agreed upon by the Commission and the owner of the land,
and that value shall be determined without regard to any increase or decrease, if any, in value attributable wholly or in part to the Scheme."
The "Scheme" is defined in s 6 of the Scheme Act as:
" … a town planning scheme for the metropolitan region or any part thereof, including the provisions therein for regulating and controlling the use of the land the subject of the Scheme and the purposes for which the land may be used and includes –
(a)the provisions of the Scheme;
(b)all maps, plans, specifications and other particulars contained in the Scheme and colourings, markings or legend thereon;
(c)the Scheme as varied or amplified by any amendment that has the force of law; and
(d)a subsequent scheme that has the force of law and any such subsequent scheme as varied or amplified by any amendment that has the force of law;
…".
The reserved Mount Lawley land (and the CAH land if acquired) was therefore to be valued without regard to any increase or decrease in value attributable wholly or in part to the amendments which effected the reservation.

Issues on the appeal and the cross‑appeal

The basis for the valuation has been the principal issue in the appeal and cross‑appeal. The other issues include the following:
•whether the respondent validly elected to acquire the CAH land;
•whether the election to acquire is equivalent to a compulsory acquisition;
•whether the value should include any special value to the owner, such as the cost of various outgoings and expenses incurred by the appellant in relation to the land;
•whether the appellant is entitled to interest on the price to be paid by the respondent;
•whether the appellant is entitled to compensation for the effect of severance on the unreserved Mount Lawley land.
At the trial, the appellant sought to support its valuation evidence by evidence from town planning and other technical and scientific experts. The respondent did likewise. The result was that the trial ran from 29 February to 19 June 2000. All the evidence was recorded electronically. It included nearly 800 exhibits and over 6,000 pages of transcript. There was then an adjournment until 12 September 2000, while closing submissions were prepared: some 800 pages from the appellant and 300 pages from the respondent. The submissions were presented over four days, until 15 September.

On 27 February 2002 the trial Judge sat again to hear submissions arising from the decision of the High Court in Marshall v Director‑General, Department of Transport (2001) 205 CLR 603.
The Judge delivered his judgment on 13 December 2002. Considering all that had gone before, his Honour's reasons were, with respect, extraordinarily short: some 24 pages of text. He justified that, in part, by holding that much of the evidence given at trial was irrelevant.
The delay in delivering judgment and the inadequacy of the reasons were at the forefront of the appellant's submissions on the appeal. It is, in this respect, fair to say that, although the respondent contends that the Judge reached the correct conclusion, it accepts that his Honour's reasons were in some respects inadequate. We therefore deal with these matters before turning to the merits of the appeal.

Delay and inadequate reasons

The appellant's contentions are set out in ground 20 of the grounds of appeal. It reads as follows:
"(a)… following a trial which lasted for 67 days (with more than 6,000 pages of transcript and almost 800 exhibits) and having taken in excess of 2 years to deliver his judgment, the Trial Judge erred in failing to provide adequate findings and reasons to enable a proper understanding of the basis upon which his determination of value had been reached and in particular failed to:
(i)identify with specificity the evidence he found to be irrelevant;
(ii)identify with specificity what evidence he relied upon and what evidence he rejected in reaching his decision;
(iii)weigh the merits and demerits of each party's evidence; and
(iv)demonstrate that all the facts, evidence and pleadings had been carefully assessed.
(b)It should be inferred from the inadequacy of the reasons contained in the judgment and the lengthy delay in providing the judgment that the trial Judge had overlooked large parts of the pleadings, essential evidence and argument in the case and that his findings were unsafe, resulting in a substantial miscarriage of justice."
The starting‑point, in considering these grounds, is that the giving of reasons is a normal (albeit not universal) incident of the judicial process: Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 667; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269 ‑ 270, 278; and Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 441. That is because "the duty is a function of due process, and therefore of justice": Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377 at 381, per Henry and Laws LJJ and Hidden J. Fairness requires that the parties should know why they have won or lost. A requirement to give reasons is likely to produce a more soundly based, rational judgment: Flannery (ibid); and see Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No 2) (2002) 6 VR 1 at 31. The requirement also furthers judicial accountability: Soulemezis, at 279, per McHugh JA; and Beale, at 442, per Meagher JA.
Where there is a right of appeal, the reasons must be sufficient to give effect to that right. The basis for the decision must be apparent, as otherwise the losing party cannot know whether there has been a mistake of law or of fact. Just what that will involve depends upon the nature of the case. Some cases turn upon a simple contest of credibility between two witnesses. Others involve detailed and complex factual and legal issues requiring close reasoning and analysis.
Reasons need not be lengthy and elaborate: Re Powter; Ex parte Powter (1945) 46 SR (NSW) 1 at 5; Beale, at 443; nor do they need to refer to all the evidence led in the proceedings: Mifsud v Campbell (1991) 21 NSWLR 725 at 728. However, relevant evidence should be referred to (albeit not necessarily in detail) and, where there is conflicting evidence of significance to the outcome, both sets of evidence should be referred to. Where one set of significant evidence is preferred over another, the trial Judge should set out findings sufficient to explain why: Beale, at 443. Similarly, where a dispute involves a form of "intellectual exchange, with reasons and analysis advanced on either side", the Judge "must enter into the issues canvassed before him and explain why he or she prefers one case over the other": Flannery, at 382.
Inadequacy of reasons does not necessarily amount to an appealable error. An appeal court will only intervene when no reasons have been given in circumstances in which they were required, or when the inadequacy is such as to give rise to a miscarriage of justice: Beale, at 444. Nor does an appealable error arising from inadequate reasons necessarily result in a new trial. The appeal court is entitled to consider the matter and, if it can do so (where, for example, only one conclusion is reasonably open on the available evidence), it may itself decide the matter: Beale, at 444.
Delay, at least where it is substantial, adds another dimension in considering the adequacy, or otherwise, of reasons. It does not, of itself, indicate that the trial has miscarried or that the judgment is unsafe and, hence, give rise to a ground of appeal. However, a comparison between the judgment and the issues in the trial may indicate that its effect has been such as to constitute a miscarriage: R v Maxwell, unreported; CCA SCt of NSW; 23 December 1998. Also, where there has been substantial delay, statements of a general assertive character, which might otherwise be accepted as encompassing a detailed consideration of the evidence, might be treated with reserve. In Maxwell, a delay of the order of 10 months was said to have been "such as to require a more comprehensive statement of the evidence than would normally be required in order to manifest, for the parties and the public, that the delay has not affected the decision": at 25, per Spigelman CJ, Sperling and Hidden JJ.
In this case, the trial Judge had available a full transcript of the evidence and the argument and, of course, the various exhibits. However, even then, a long delay can give rise to disquiet, not only because of the lengthy period of uncertainty with which the litigants are required to live pending the judgment, but also because of the suspicion, on the part of the losing party, that the task may have become too much for the trial Judge and that he or she had been unable, in the end, to grapple adequately with the issues. Thus, in Rolled Steel Products (Holdings) Ltd v British Steel Corporation [1986] Ch 246 (a case involving a delay of nearly eight months in giving judgment) Lawton LJ said:
"[Counsel] submitted that this long and, in my experience, unprecedented delay resulted in the Judge making material findings which were not justified by the evidence. I am not satisfied that this was so. But the fact that responsible and experienced counsel, acting for a public corporation, felt it incumbent upon him to make this submission shows that long delays in delivering judgment can cause disquiet and suspicion amongst litigants who lose - and those who win may feel they have been deprived of justice far too long. Delays of this length should not occur unless there are compelling reasons why they should; and, if there are such reasons, it would be prudent of a judge to refer to them briefly."
Similarly, in Goose v Wilson Sandford & Co, unreported; England and Wales Court of Appeal (Civil Division); 13 February 1998, Peter Gibson, Brooke and Mummery LJJ said (in a substantial case involving a delay of over 20 months from the end of the hearing), at [112] and [113], that:
"A judge's tardiness in completing his judicial task after a trial is over denies justice to the winning party during the period of the delay. It also undermines the loser's confidence in the correctness of the decision when it is eventually delivered. Litigation causes quite enough stress, as it is, for people to have to endure while a trial is going on. Compelling them to await judgment for an indefinitely extended period after the trial is over will only serve to prolong their anxiety, and may well increase it. Conduct like this weakens public confidence in the whole judicial process. Left unchecked it would be ultimately subversive to the rule of law. Delays on this scale cannot and will not be tolerated. A situation like this must never occur again.
Because of the delay in giving judgment it has been incumbent on us to look with especial care at any finding of fact which is now challenged. In ordinary circumstances where there is a conflict of evidence a judge who has seen and heard the witnesses has an advantage, denied to an appellate court, which is likely to prove decisive on an appeal unless it can be shown that he failed to use or misused, this advantage. We do not lose sight of the fact that the judge had transcripts of the evidence, as well as very extensive written submissions from counsel. But the very fact of the huge delay in itself weakened the judge's advantage, and this consideration had to be taken into account when we reviewed the material which was before the judge. In a case as complex as this, it is not uncommon for a judge to form an initial impression of the likely result at the end of the evidence, but when he has come to study the evidence (both oral and written) and the submissions he has received with greater care, he will then go back to consider the effect the witnesses made on him when they gave evidence about the matters that are now troubling him. At a distance of twenty months, Harman J denied himself the opportunity of making this further check in any meaningful way."
What was said in Goose has been applied in Australia: see, for example, Laminex (Australia) Pty Ltd v Smeeth [1999] NSWCA 462 at [8]; Hadid v Redpath [2001] NSWCA 416 (a case involving a delay of about one year) at [29]; and NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 1 at [53] and [56].
In Cobham v Frett [2001] 1 WLR 1775, a case involving a delay of over 12 months, the Privy Council said (at 1783) that:
"It can be easily accepted that excessive delay in delivery of a judgment may require a very careful perusal of the judge's findings of fact and of his reasons for his conclusions in order to ensure that the delay has not caused injustice to the losing party."
Their Lordships went on to say (at 1783 ‑ 1784) that, in their opinion:
"[I]f excessive delay, and they agree that 12 months would normally justify that description, is to be relied on in attacking a judgment, a fair case must be shown for believing that the judgment contains errors that are probably, or even possibly, attributable to the delay. The appellate court must be satisfied that the judgment is not safe and that to allow it to stand would be unfair to the complainant."
In NAIS, at [4], Hill J said that the basis on which an appeal court would order a new trial in a case of excessive delay (where the appellant has satisfied the appeal court that to allow the judgment to stand would be unsafe) is that the appellant has not had a fair trial. His Honour added (ibid) that it may not be appropriate to order a new trial in a case where the appeal court on an appeal may itself make findings of fact. Marshall J, in that case, had no doubt ([37]) that "an unreasonable delay, which results in prejudice to a losing party, may amount to a denial of procedural fairness to that party".
In this case, as we have noted above, evidence was received by the trial Judge between 29 February 2000 and 19 June 2000. Closing submissions were presented between 12 and 15 September 2000. More than 17 months later, on 27 February 2002, submissions were heard in relation to a decision of the High Court delivered in 2001. Then, on 13 December 2002, almost 10 months later, the judgment was delivered, after a total delay of almost two years and three months.
It is hardly surprising that this inordinate and inexcusable delay (for that is undoubtedly what it was) led to disquiet and suspicion of the kind referred to in such cases as Rolled Steel and Goose. Nor is it surprising that we were presented (by responsible and experienced counsel) with submissions (of a kind which no appellate court ever wishes to see) criticising the delay, and its apparent consequences, in trenchant terms. The making of those submissions was even less surprising given that, notwithstanding that the delay was explained by the trial Judge by saying that it had been occasioned by the need to thoroughly absorb and review the evidence and submissions, the judgment runs, as we have said, to only 24 pages of text and makes no attempt to refer to much of the relevant evidence or to set out, in any adequate way, the trial Judge's reasons for preferring significant sets of evidence over other significant sets of evidence. Moreover, this was a factually and legally complex case which involved an intellectual exchange with reasons and analysis advanced on either side. However, the trial Judge, in significant instances, did not enter into the issues canvassed before him in any adequate way or provide explanations for his decisions which treated those intellectual exchanges with the respect which they plainly warranted.
For example, in relation to the trial Judge's treatment of the demeanour of witnesses, his Honour said only the following (at [6] and [7]):
"In some cases the demeanour of witnesses assumes great importance in assessing the evidence. In this case the demeanour of witnesses has played a minimal part in my decision. All witnesses presented well. The witnesses as to the narrative history were recalling events and on occasion suffered from fallibility of memory. Where it has been necessary to prefer a version of one witness to another, or to doubt the reliability of a witness's evidence in a particular, I have done so by reference to the witness's evidence, compared with the contemporary documents, those documents having a higher probability of accuracy.
There was challenge to some witnesses on both sides as to their bias or partiality. For example, Mr Molony's arrangements with the applicant include a success fee. I have taken the question of bias generally into account, but gave it comparatively little weight. With the exception of Mr Copley, and Public Service representatives of the respondent, such as Mr Hillyard, expert witnesses on both sides are paid for their experience and expertise. I have not found any witness to be mendacious, although there are some whose opinions I do not completely accept."
Nowhere did his Honour analyse, in any depth, or sometimes at all, why he preferred a version of one witness to another. Nor did he identify which were the witnesses whose reliability he doubted, or in what particulars, or why. He did not say in respect of which witnesses he had found bias, or why, or what he meant by saying that he had "generally" taken it into account. Nor did he say who were the witnesses whose opinions he did not completely accept, or why, or in what respects. While he did later make some comments about particular evidence or opinions, particularly in respect of the valuation evidence, it is by no means clear that it was only to that evidence that these earlier comments were intended to refer.
A further example arises out of [8], [9] and [10] of his Honour's judgment. In [8] and [9] he referred to objections to "certain evidence" which he upheld. He said he did so "in general terms". However, he did not identify, with any degree of precision, the evidence successfully objected to or in what "general terms" the objection was successful. Instead, he went on to say that the appellant's case theory was based on propositions including the following:
"(a)The election to acquire is equivalent to a compulsory acquisition;
(b)The Mount Lawley land which was zoned rural prior to the reservation would have been rezoned urban in due course but for the reservation;
(c)The background history of failed negotiations and proposed land exchanges affects the question of the determination of the value of the Mount Lawley land;
(d)The conservation significance of the Mount Lawley land, if substantial, must be disregarded under the Pointe Gourde principle (Pointe Gourde Quarrying and Transport Company Limited v Sub-Intendent of Crown Lands [1947] AC 565);
(e)The motivation of the respondent and Governments of the day is relevant to the issue of valuation;
(f)The highest and best use of the Mount Lawley land but for the reservation was an urban community as illustrated by a hypothetical development."
He said, at [10], that he rejected each of those propositions and that, in consequence, much of the evidence led at trial was irrelevant. He did not specify what evidence was irrelevant and, indeed, propositions (b) and (f), at least, are factual, proposition (b) being central to the appellant's case. If those factual propositions were to be rejected, this should only have been done after an analysis of the evidence upon which they relied (said by the trial Judge to be irrelevant as a consequence of his rejection of the propositions), saying which parts of that evidence were accepted and which were not, and why. However, his treatment of the evidence is merely assertive in character and lacks any substantive analysis.
No good purpose can be served by giving further examples, although others could be provided. Nor is it necessary to decide whether this ground of appeal, had it stood alone, would have been determinative. That is because we have been able to resolve the appeal on other grounds. However, we should make three additional comments. The first is that, in some instances, this ground has been relevant in an assessment of the strength of other grounds (cf Laminex at [9]). The second is that, had it been necessary to decide whether or not this ground was, of itself, determinative, we would, very likely, have found it to be so. The third is that, during the course of oral submissions, counsel for the respondent very properly did "not seek to excuse or defend the delay", acknowledging that there was "no basis to do that".

The remaining grounds of appeal

There are 19 other grounds of appeal. However, there is much overlapping and repetition. Indeed, many grounds were grouped in the appellant's submissions and answered by the respondent in a similar way.
It is not necessary, therefore, to deal with each ground of appeal separately. Rather, we have identified the issues they reflect and have related our judgment to those issues.
The balance of our judgment proceeds as follows. First, we deal with the issue of whether or not the election to acquire by the respondent validly related to all of the reserved Mount Lawley land, or only to the balance after subtracting the CAH land. Our conclusion on the election issue takes us to the most significant issue in relation to the appellant's claim for compensation based on the price of the land the respondent validly elected to acquire. This issue involves the application of the Pointe Gourde principle, as embodied in s 36(2b) of the Scheme Act, in the determination of the proper basis for the valuation of that land. This requires us to analyse that principle in some detail, before considering the events and circumstances leading up to the parks and recreation reservation, including the environmental review of the land, with which we deal separately. We then consider the High Court authority of Queensland v Murphy (1990) 95 ALR 493, on which in this connection extensive reliance was placed by the respondent in the appeal, before indicating our conclusion on the issue of the proper basis for valuation of the land the respondent validly elected to acquire, and then examining the valuation evidence.

Our judgment then proceeds to consider the issue, also relevant to the valuation of the land the respondent validly elected to acquire, of whether or not such an election was equivalent to a compulsory acquisition so as to require account to be taken of any items of "special value" to the appellant or otherwise separately allowable under the law of compulsory acquisition. We consider separately the possibility for application of "special value" on other, general valuation, grounds. This enables us to discuss, among other things, whether or not the appellant is entitled to interest on the price to be paid by the respondent.
Our judgment then proceeds to deal with the claims for compensation under other heads than the price of the land the respondent validly elected to acquire, being injurious affection to the CAH land and the unreserved Mount Lawley land and severance damage to the latter land.
The final section of our judgment is a summary of our conclusions on all of these issues, and our disposition of this appeal.

Was there a valid election to acquire the CAH land?

As we have said, there is an issue about the validity of the respondent's purported election to acquire the CAH land.
In summary, the facts were:
•On 7 May 1996, the Executive, Finance and Property Committee of the Ministry for Planning, acting under delegated power from the respondent, decided to purchase the whole of the reserved Mount Lawley land and the CAH land.
•By letter dated 9 May 1996 Mr Hillyard, on behalf of the Ministry for Planning, notified the appellant of the decision to purchase the portion of the Mount Lawley land "reserved for Parks and Recreation". The letter did not refer to the CAH land.
•The appellant's then solicitors wrote to the respondent on this subject, by letter dated 25 September 1996 (exhibit 2090), noting that the respondent had elected to purchase only that part of the reserved Mount Lawley land reserved for parks and recreation, adding that they assumed the respondent intended to pay compensation for (rather than elect to acquire) the CAH land.
•On 4 October 1996, Mr Hillyard replied to the solicitors' letter (exhibit 2091) indicating that the Ministry had been told by the appellant to deal with Kevin Sullivan & Associates in all matters concerning "the Commission's purchase of the reserved portions of the above properties (ie, Parks and Recreation and Controlled Access Highway)", so as to overcome the respondent's concerns about receiving communications from the appellant itself, its then solicitors and the Sullivan firm. Kevin Sullivan & Associates was a firm of real estate agents and valuers retained by the appellant in relation to its plans for the development of the reserved Mount Lawley land.
•Some three years later, on 24 September 1999, Mr Hillyard wrote to the appellant (exhibit 2092) saying that "if and insofar as there was an error in his letter of 9 May 1996, such error or omission was hereby corrected", by replacing the reference to the purchase of the reserved Mount Lawley land with a reference to the purchase of that land and the CAH land.
At the trial, the appellant contended that there was no election to acquire the CAH land within the three‑month period provided by s 36(2)(b) of the Scheme Act. That provision is as follows:
"The Commission shall, within 3 months of the claim for injurious affection being made, or where such a claim is made before the date of the coming into operation of the Metropolitan Region Town Planning Scheme Act Amendment Act 1968, within 3 months of that date, by notice in writing given to the claimant, either elect to acquire the land or advise that it does not intend to acquire the land."
In our view, s 36 of the Scheme Act, although not altogether clearly expressed in this respect, means that, if there is no written notice at all under s 36(2)(b) within the three‑month period there referred to, the claim for injurious affection proceeds in accordance with the section, that is to say, on the basis that the land is not to be acquired by the respondent under that paragraph. In our view also, where a written notice under that paragraph is given, its election or advice may be express or implied.
The appellant's claim for injurious affection of the Mount Lawley land for the purposes of that paragraph was dated 13 February 1996 (exhibit 187). The only election by written notice from the respondent to the appellant within that three‑month period was Mr Hillyard's letter dated 9 May 1996, which made no reference to the CAH land.
On the basis of our analysis of s 36(2)(b) above, the respondent might be taken either to have given no written notice as to the claim for compensation for injurious affection to the CAH land, or to have impliedly advised that it did not intend to acquire that land. In both cases, this assumes that the appellant had made two claims for compensation for injurious affection, one in respect of the CAH land and one in respect of the balance of the reserved Mount Lawley land, a matter to which we return.
The respondent sought to overcome this difficulty by relying on s 55 of the Interpretation Act 1984, which provides as follows:
"Where a written law confers a power or imposes a duty upon a person to do any act or thing of an administrative or executive character or to make any appointment, the power or duty may be exercised or performed as often as is necessary to correct any error or omission in any previous purported exercise or performance of the power or duty, notwithstanding that the power or duty is not in general capable of being exercised or performed from time to time."
The trial Judge held that s 55 did apply. He said that it "fits exactly the circumstances of this case" ([36]). He referred to the evidence of Mr Hillyard who "frankly acknowledged that he did not pay enough attention to the wording of the letter" of 9 May 1996 ([33]). The Judge noted that the respondent had resolved to purchase both the reserved Mount Lawley land and the CAH land, and that its opinion had not changed, "cf Venture Management v Commissioner of State Taxation (1991) 4 WAR 283 at 295" ([36]). That being so, his Honour held, s 55 of the Interpretation Act permitted the correction of the error.
In ground 4 of its grounds of appeal, the appellant contends that s 55 has no application.
The respondent argued before us that the decision of the Executive, Finance and Property Committee at its meeting of 7 May 1996 should be treated as an "act or thing of an administrative or executive character" for the purposes of s 55 so that an erroneous notice, given before the expiry of a statutory time limit, could be corrected by a later notice, even though the time limit had by then expired. It appears to have been submitted that this is to make the validity of what was done turn on the timely decision and its timely but incorrect communication.
In our view, the respondent's submission ignores the requirement in s 36(2)(b) for a "notice in writing" to be given to the claimant. Although we accept that there was an error within s 55, in our view s 55 did not permit its correction beyond the expiry of the three‑month time limit prescribed by s 36(2)(b) of the Scheme Act. That is a statutory limitation period. If a notice is to be effective, it must be given within that period.
In our view, the decision of Franklyn J in Venture Management Ltd v Commissioner of Taxation (1991) 4 WAR 283, relied upon by the trial Judge and pressed on us by the respondent, is not relevant. There his Honour, at 295, concluded that s 55 did not extend to a case where the Commissioner had not sought to correct an error, but rather to change his opinion and issue a new assessment to stamp duty based on facts available to him at the time of the original assessment. His Honour did not there say anything which, as we read his judgment, bears upon the question whether an error in giving a valuation notice, of the kind made in this case, can be corrected after the expiry of the statutory time limit fixed for the giving of that notice.
We should make two comments, in passing. The first is that, in reaching the conclusion that s 55 has no application in the present case, we do not accept the appellant's submission that the section is intended only to overcome any doctrine that, on the purported exercise of a governmental power, the exerciser has no further such power in that case, or, as it is put, the exerciser is functus officio. On the supposed doctrine, see Robert Orr and Robyn Briese, "Don't Think Twice. Can Administration Decision Makers Change Their Minds?" (2002) AIAL Forum No 35, 11. The second is that the erroneous notice was not regarded either by the appellant or the respondent as being a nullity. Both have treated it as being a valid election, at least in relation to the reserved Mount Lawley land except for the CAH land. Had they not done so an issue might have arisen as to whether the respondent was estopped from claiming the notice was not binding on it in any form: see Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193.
We should also add that, on the face of s 36(2)(b) of the Scheme Act, it might be argued that an election is an all or nothing matter. The appellant's claim for injurious affection was for the whole of the Mount Lawley land (about 320.9 hectares), including both the reserved Mount Lawley land (309 hectares) and the unreserved Mount Lawley land (about 11.9 hectares), although the quantum was determined by multiplying a sum per hectare ($65,000) by a number of hectares (309) corresponding to the area of the reserved Mount Lawley land. However, there were, of course, different public purposes for the CAH land and the remaining portion (reserved for parks and recreation) of the reserved Mount Lawley land and, on that basis, we are of the view that the appellant's claim was capable of being approached as two severable claims, one in respect of the reservation of the CAH land and one in respect of the remaining portion of the reserved Mount Lawley land. That was the approach taken by the appellant's solicitors in their letter dated 25 September 1996.
The consequence of our conclusion is that the claim relating to the CAH land must be regarded as an aspect of the appellant's claim for compensation for injurious affection and severance damage in relation to land which the respondent had not elected to acquire. In essence, that is what the appellants contend in ground 7(d) of its grounds of appeal.
The trial Judge held that no such claim could be made. We deal later with the appeal against that aspect of his decision.

The application of the Pointe Gourde principle

The most significant issue in relation to the magnitude of the compensation claim in respect of the land which was the subject of a valid election emerges from grounds 2, 3, 9, 13, 14, 15, 16 and 18 of the appellant's grounds of appeal. It is the appellant's contention, reflected in these grounds, that the trial Judge incorrectly applied the PointeGourde principle, as embodied in s 36(2b) of the Scheme Act. Adopting the approach summarised above, we do not set out the grounds. It is sufficient to state the legal principle applicable in this area - which is well established - and consider how that principle should be applied to the facts of the present case.
The principle was stated thus in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, at 572:
"It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition."
That case was followed in Australia in Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196. The principle was restated in a joint judgment of the High Court in Queensland v Murphy at 496:
"One purpose of this principle is to ensure that a resuming authority does not employ planning restrictions to destroy the development potential of the land and then assess compensation for its resumption on the basis that the destroyed potential had never existed … The principle applies in cases where there is a direct relationship between the planning restriction and the scheme of which resumption is a feature and extends to cases where there is merely an indirect relationship, provided that the planning restriction can properly be regarded as a step in the process of resumption …".
In the present case, it is the statutory embodiment of the PointeGourde principle in s 36 of the Scheme Act which is relevant.
As we have noted above, the reserved land is to be valued without regard to any increase or decrease in its value which is attributable wholly or in part to the reservation. However, as the High Court held in Queensland v Murphy, the reservation cannot be isolated from the circumstances in which it was created. It is necessary to identify the entirety of the process which led to the reservation, and then to exclude the effect of that process in the valuation exercise.
The decision of the English Court of Appeal in Wilson v Liverpool City Council [1971] 1 All ER 628 provides an example of that approach. There, the Council had resumed land for housing. The value of the land at the date of resumption was much greater than it was before it first became known that the land might be resumed for that purpose. The compensation legislation contained a provision similar to s 36(2b) of the Scheme Act: no account was to be taken of any increase in value due to the prospect of development. Counsel for the claimant landowner submitted that the Pointe Gourde principle should not apply unless the relevant scheme was "precise and definite", as it was only when the subject land was actually resumed. Lord Denning answered that proposition in the following way (at 634):
"I do not accept counsel's submission. A scheme is a progressive thing. It starts vague and known to few. It becomes more precise and better known as time goes on. Eventually it becomes precise and definite, and known to all. Correspondingly, its impact has a progressive effect on values. At first it has little effect because it is so vague and uncertain. As it becomes more precise and better known, so its impact increases until it has an important effect. It is this increase, whether big or small, which is to be disregarded as at the time when the value is to be assessed."
Widgery LJ agreed. He continued (at 635):
"Whenever land is to be compulsorily acquired, this must be in consequence of some scheme or undertaking or project. Unless there is some scheme or undertaking or project compulsory powers of acquisition will not arise at all, and it would I think be a great mistake if we tended to focus our attention on the word 'scheme' as though it had some magic of its own. It is merely synonymous with the other words to which I have referred, and the purpose of the so-called Pointe Gourde rule is to prevent the acquisition of the land being at a price which is inflated by the very project or scheme which gives rise to the acquisition."
Megaw LJ (at 635) agreed with both judgments.
Thus, in Wilson's case, the land was valued without regard to any enhancement in value resulting from foreknowledge of the Council's development proposal.
In taking this kind of approach, we are not differing from that actually taken by the Court in Trandos v Western Australian Planning Commission (2001) 117 LGERA 257. There, Anderson J, with whom Wheeler J and Einfeld AJ agreed, said (at [70]):
"This, of course, was not a compulsory acquisition pursuant to a scheme that has tended to increase the value of the land as in Point Gourde. It is a case of a scheme reservation which has, if anything, blighted the land. I must say I do not see why it is necessary or appropriate to try to apply the so‑called Point Gourde principle to the case. The case is entirely covered by s 36(2b), in my opinion. Applying that section, the land was to be valued without regard for the fact that within 20 or 25 years it would be required for roadworks and without regard for the fact that it was reserved for that purpose in the Metropolitan Region Scheme."
However, Anderson J approached the issue by seeking to identify the planning steps leading to the relevant action, for the purpose of disregarding their effects on value, leaving for determination the characteristics of the land which would otherwise have prevented the development proposed by the appellants there, as the highest and best use. There were, in that case, factors (relating to the road network in which the subject land was located) which would have prevented approval of any such development, having regard to the "the dictates of orderly and proper planning", as Anderson J described it at [73].
This approach, which is similar to that required at common law by the authorities on the Pointe Gourde principle, was, in our respectful opinion, correct, as s 36(2b) should be seen (as s 124 of the Public Works Act 1912 (NSW) was seen in San Sebastian) as a statutory embodiment of the common law principle. In San Sebastian, the words, in s 124, "without reference to any alteration in such value arising from the establishment of railway or other public works upon or for which land was resumed" were held to require consideration of the steps taken towards the public purpose embodied in "the railway or other public works" in order to determine whether the market value had been depressed or enhanced by the market's foreknowledge of that purpose. In our view, the relevant language of s 36(2b), "without regard to any increase or decrease, if any, in value attributable wholly or in part to the Scheme" (emphasis added) should, in the light of what was said in San Sebastian, be approached in the same way.
It is important to note that it is effects on value of the Scheme, including the steps taken towards it as it evolves, that are to be disregarded. What is a step can be a matter of some nicety, as we will explain below. The steps taken in implementation of a Scheme may, however, be relevant to the extent they reveal characteristics or conditions of the land that bear on valuation of it. As we will explain (when Murphy is reached below), this is a matter of some importance to this case.
In order to apply the Pointe Gourde principle, as embodied in Scheme Act s 36(2b), we need first to consider the events and circumstances leading to the reservation. We particularly need to consider the Public Environmental Review (PER) which was the immediate precursor to the reservation of the reserved Mount Lawley land. As we have foreshadowed, we then need to consider the authority of Queensland v Murphy on which the respondent placed considerable reliance in concluding that the land was properly valued as rural and that the market would have valued the land on no other basis. We conclude with our assessment of the proper basis for the valuation of the land.

The history of the reservation

Until the Ellenbrook project was proposed, no detailed consideration had been given to the use or potential use of the Mount Lawley land. Nor was there any real investigation of its environmental significance. For example, in the report published by the Environmental Protection Authority ("EPA") in 1983 entitled "Conservation Reserves for Western Australia. The Darling System - System 6", the Mount Lawley land was not identified as having any environmental significance. However, in 1986 ‑ 1987, in the course of a review of Perth's corridor plans, the environmental significance of the land was recognised. In the document "Planning For the Future of the Perth Metropolitan Region: Report of the Review Group of the State Planning Commission of Western Australia" (November 1987) (exhibit 2231), there is a reference to an area including the Mount Lawley land. The reference, in a plan captioned "The Preferred Strategy" (page 10), shows that area as part of a proposed "Metropolitan Park System". Later in the document (pages 136 ‑ 137), it indicates that the area is included as "proposed extensions to the existing Parks and Recreations reservations" by reference to a number of factors. These are listed as:
•opportunities to provide connections and linkages between existing and proposed areas of open space;
•existing major vegetation systems, wildlife habitats and ecosystems and significant landscapes;
•the likely direction of future metropolitan growth and urban expansion; and
•the implications for future land acquisition and the opportunities to incorporate privately‑owned land by means of management agreements and similar arrangements.

Subsequently, there was a measure of ambivalence in relation to the area that included the Mount Lawley land. Thus, in the document of the Department of Planning and Infrastructure, "Metroplan - a Planning Strategy for the Perth Metropolitan Region" (December 1990) (exhibit 2233), there is a plan (at page 21) showing the area including the Mount Lawley land as part of a zone coded "Rural/Non‑Urban" at the north‑western boundary of a north‑south zone coded "Future Urban". The area including the Mount Lawley land is shown outside the zones coded "Region Open Space System". This document records that it is meant to provide "a framework for urban growth to accommodate another one million people" (page 17). It refers to the "Preferred Strategy" from the November 1987 document as containing "broad principles" that "in many respects" Metroplan has "reaffirmed". However, it also records that:
" … significant changes have been made to the urban expansion areas nominated in the 1987 report to reconcile, where possible, the wishes of local communities with the need to plan for the long‑term growth of the Region. An additional 8,500 hectares of potential new urban land have been included, bringing the total to 37,500 hectares - about a 30 per cent increase on the 1987 proposals." (Page 18).
It was against this sort of background that, on 1 February 1990, a number of landowners, including the appellant, submitted a proposal for the rezoning of a substantial area of the north‑eastern corridor from Rural to Urban Deferred under the MRS, for the purpose of carrying out the development which became known as Ellenbrook. The application was prepared on behalf of the owners by Feilman Planning Consultants (exhibit 869). The proposal indicates that "preliminary research and discussions with the authorities" had shown that there were "no significant environmental impediments to urban development". However, the proposal also refers to a report on "environmental aspects of the site" prepared for the purposes of the proposal and recommending that "the wetlands in the north west corner of the site be further investigated with a view to conservation of some or all of them".
It was that proposal which prompted the then Minister for Planning and Urban Development, David Lawrence Smith MLA, as part of an ongoing review of the MRS, to focus on the north‑eastern corridor. He regarded the Ellenbrook project as significant because of its potential to provide a major source of housing in the metropolitan area. It was Mr Smith's perception that the land otherwise available would be insufficient (TS 857).
On 4 October 1990, Feilman Planning Consultants referred the Ellenbrook proposal to the EPA. The Acting Director, Evaluation Division, of the EPA replied on 17 October 1990 (exhibit 522), saying that the authority had decided that the likely environmental impacts were sufficient to warrant formal assessment of the proposal under the provisions of the Environmental Protection Act 1986. The level of assessment was set at a Public Environmental Review (PER).
On the same day, Barry Carbon, the Chairman of the EPA, wrote to David Hatt, the Chief Executive of the Department of Planning and Urban Development, to inform him that the likely environmental impacts of the Ellenbrook project were sufficient to warrant formal assessment at the level of a PER. Mr Carbon said:
"There are a number of significant environmental issues associated with the proposal which have not yet been determined. Most importantly, the acceptability of urban development over a major groundwater resource must be resolved, along with other issues such as the delineation of the priority 1 boundary, the existing sand quarry in the south‑east of the development area and management of drainage waters generated by the development." (Exhibit 1238)
As a matter of law, the EPA had no authority then to require that the PER be conducted. The requirement was apparently based on Pt IV of the Environmental Protection Act 1986 (WA) in s 38(1)(b)(ii) as it was at the time, which provided for the referral to the EPA of any proposal "that appears likely, if implemented, to have a significant effect on the environment". The term "proposal" was defined in s 3 to mean:
"project, plan, programme, policy, operation, undertaking or development or change in land use, or amendment of any of the foregoing …".
The Ellenbrook project fell within this definition, but the proposal to rezone the relevant area of the north‑east corridor (and that is all the proposal then amounted to) did not. That is because a rezoning, of itself, can have no effect on the environment: Environmental Protection Authority; Ex parte Chapple (1995) 89 LGERA 310.
In July 1991, Feilman Planning Consultants - apparently unaware of this point - produced the first draft of the PER on behalf of the Ellenbrook project proponents (exhibit 873). The draft covered a wide range of environmental issues. Relevantly, for present purposes, reference was made to the fact that the project site included a number of areas which could be grouped within the term "wetland" although, it was said, "free water is a rare occurrence in them".
The report continued (at page 49):
"Careful consideration was given to the possibility of preserving a large area of wetlands (400‑500 hectares), however, the costs of this would be very high and very necessary resources unavailable. Reservation of a large area with low levels of management will result in relatively rapid degradation due to the influence of feral animals, fire and weed infestation. Reservation of a smaller area (approx 100 ha), selected on the basis of conservation values and management practicability, was seen as a preferable option and possibly within the means of the relevant agencies."
Following the preparation of the first draft of the PER, there were meetings in August 1991 between officers of various agencies including the EPA, the Water Authority, the Department of Planning and Urban Development and the Department of Conservation and Land Management. It is clear from the minutes of the meetings (exhibits 284 and 285) that there was some tension between the planning agency and the EPA in relation to the implementation of the Ellenbrook project. Evidence to this effect was given at the trial by Mr Smith. He referred to a "power grab" from the Department for Environmental Protection in relation to planning matters he considered to be within his portfolio (TS 880).
On 6 November 1991, the Metropolitan Planning Council resolved to advertise an amendment to the MRS whereby land in the Ellenbrook project area which was the subject of Rural zoning and State Forest reservation would be rezoned to Urban Deferred and Parks and Recreation reserve (exhibit 2120). (The proposal in relation to the state forest did not proceed.) The Metropolitan Planning Council was a body charged with coordinating the functions of the statutory bodies interested in a decision relating to the MRS (TS 802).
In November 1991, two officers of the Department of Planning and Urban Development submitted a report to the Metropolitan Planning Council in relation to the proposed amendment to the MRS (exhibit 493). The report referred to the Government's commitment to the development of 60,000 lots in the metropolitan area over the succeeding four years to help meet the forecast demand. The report referred also to a report by the State Planning Commission entitled "Planning for the future of the Perth Metropolitan Region" published in 1987. This report was said to have indicated the need for 171,000 new dwellings by 2001 and a further 194,000 by 2021. It was noted (at page 3) that:
"The preferred strategy showed urban expansion at Ellenbrook and reported that the area had a total potential for 40‑50,000 people (15‑20,000 dwellings)."
The report continued:
"The Urban Expansion Policy Statement released in November 1990 identified land around Perth suitable for urban development. Ellenbrook, which is located in the Belhus locality is classified as category A2, land which meets the basic criteria for urbanisation."
The report continued by noting that the Ellenbrook project was considered to be "the most significant and immediate opportunity for development in the north‑east sector".
The report went on to describe the site of the Ellenbrook project. It stated that no rare or endangered species of flora or fauna had been found on the site although it was considered that some areas of vegetation were of value for conservation. There was also reference to the "wetlands", a number of which were said to have significant conservation value such as to warrant reservation.
The report referred to the fact that careful consideration had been given to the possibility of preserving 400 ‑ 500 hectares of wetlands but that this had been rejected for the reasons given in relation to the earlier report. However (at page 5):
"Reservation of a smaller area (approx. 100 ha), selected on the basis of conservation values and management practicability, is seen by the conservation authorities as a preferable option and possibly within the means of the relevant agencies."
On 4 December 1991, the Metropolitan Planning Council resolved to advertise the proposed amendment. The map depicting the proposal was signed by the Minister on 9 January 1992. It shows some 90 ‑ 100 hectares of the Mount Lawley land as reserved for Parks and Recreation. The balance is shown as Urban Deferred, as is the surrounding area of the Ellenbrook project.
The proposed amendment to the MRS was gazetted on 31 January 1992.
By a letter dated 4 February 1992, the secretary of the Department of Planning and Urban Development informed the appellant that there was a proposal to amend the MRS in a way which affected its land (exhibit 147). A copy of the plan showing the proposed amendment was enclosed with the letter. The appellant was informed, further, that the purpose of the amendment was to rezone land for future urban development in accordance with the government's metropolitan strategy and the urban expansion policy. Before finalisation of the amendment a number of issues were to be addressed. They were said to be:
•the resolution of environmental issues, including the identification of all land to be set aside for wetland protection;
•arrangements being made to the satisfaction of the Water Authority to ensure that the land could be serviced adequately with water, sewerage and drainage;
•arrangements being made to ensure equitable landowner contributions towards roads and transport services within the Ellenbrook project area;
•arrangements being in place to ensure that land to be set aside for public open space and Parks and Recreation purposes, including wetland protection, would be ceded to the Crown free of cost upon subdivision, with the cost being shared by all the landowners on an equitable basis.
On 11 March 1992, Mr Hatt prepared a briefing note for his Minister in relation to the Ellenbrook project (exhibit 268). The note informed the Minister that the proposal was to rezone approximately 2,208 hectares of Rural zoned land to Urban Deferred with a further 90 hectares to Parks and Recreation reservation. The Ellenbrook project area, with the exception of the north‑west corner (ie, the Mount Lawley land), was said to have been identified as "Category A2" in the Commission's Urban Expansion Policy Statement. That was land which could be expected to be urbanised over the medium to long term - up to 30 years - because of the various constraints and issues affecting it. However, because those issues were being addressed in relation to the Ellenbrook project, development might occur sooner.
A little later in the briefing note, the Minister was told that the north‑west corner of the amendment site, which contained wetlands, was not identified in the Urban Expansion Policy Statement. The EPA was currently assessing the proposal. The Minister was told that the area might be deleted from the amendment before finalisation.
The Minister was also told that the EPA had required the preparation of a further PER by the proponents. That PER was to address all the environmental aspects of the Ellenbrook project. The first PER was said to have been considered unsatisfactory by the EPA because further study of flora and fauna in the area was required.
There was then reference to the Ellenbrook Conservation Group: a group of local landowners concerned about the effect of the proposed land use in the Ellenbrook project area. The group had requested that 950 hectares of wetlands and native vegetation be set aside as an A class nature reserve. The note concluded:
"Apart from the loss of potential housing land, the problem with reserving such a large area of wetlands would be the high costs of appropriate management. Low-level management may result in gradual degradation of the areas, especially as urbanisation increases in the locality. Accordingly, the amendment proposes to include a 90 ha area of land with relatively high conservation values for Parks and Recreation as proposed by the Planning Consultants in their submission on the amendment …. As mentioned above, the Department's own environmental audit is still being carried out. The extent of the land to be set aside for wetland protection will be re‑examined in the light of the audit and the PER."
In due course, the new PER was approved by the EPA. It was released for public review on 14 April 1992 (exhibits 314 and 2213).
By then, the appellant had withdrawn from the negotiations with the other promoters of the Ellenbrook project. On 4 May 1992, the appellant withdrew also from the proposed Amendment 879/33 to the MRS (exhibit 151).
Although the notice of withdrawal from the Ellenbrook project did not refer to the appellant's withdrawal from the PER, the appellant could no longer have been a proponent for that purpose. That was recognised by the respondent. In about September 1992, the respondent sought advice from the Crown Solicitor as to whether it could become a proponent. In a letter dated 25 September 1992, the Senior Assistant Crown Solicitor advised the respondent that it could not.
At the trial, Mr Smith gave evidence that, as Minister, he had been aware of the appellant's withdrawal. He was asked about its effect on the management of the project from his departmental perspective. He answered (TS 864):
"It left us in two quandaries: one, that we had a metropolitan scheme amendment under way which really included their land, and if they were not to be proponents there was a question of whether that was appropriate or not. There was also a need for a public environmental review of the area, and if the major conservation area was to be on the Mount Lawley land, there was also the question of the appropriateness of that, if they weren't a proponent for any development.
So what was done?---To be honest, I guess we ignored the problem and proceeded as if they were proponents."
For reasons to be set out below, it is not appropriate to refer to the PER in any detail. It is sufficient to note that public comment was invited, public hearings were held and all interested persons and parties were given an opportunity to contribute.
On 14 August 1992, the EPA published, in Bulletin 642, its report and recommendations relating to the Ellenbrook project urban rezoning (exhibit 635). The purpose of the report was to give the public a 14‑day period "when anyone may appeal to the Minister against the EPA's recommendations."
In the summary to the report, the EPA referred to a number of "key issues of concern" identified by the public and by the EPA in the assessment of the Ellenbrook project proposal. These included the "lakes", said to have been protected on an interim basis by the Environmental Protection (Swan Coastal Plain Wetlands) Regulations 1991. The "lakes", so identified, were the seasonal wetlands in the north‑west of the site: both on the Mount Lawley lands and in neighbouring land outside the Ellenbrook project area. They were subject to the Environmental Protection (Swan Coastal Plain Lakes) Policy 1992 ("the Lakes Policy").
The Lakes Policy, still in its draft form in August 1992, had been formulated "to protect lakes on the Swan Coastal Plain from being further degraded and destroyed" (exhibit 1149). The policy area included the coastal plain from the Moore River in the north, to Eagle Bay in the south. It was noted in the policy that, following European settlement, more than two‑thirds of the lakes on the Swan coastal plain had been severely degraded or destroyed and that those remaining faced a similar danger.
The criterion for the inclusion of lakes in the Lakes Policy was somewhat vague. It was set out in cl 4(3) in the following terms:
"The lakes referred to in subclause (1) have in most cases been selected for inclusion in this policy on the basis that they consist of areas of standing water of 1,000 square metres or more as at the first week of summer in any year (as verified as at the first week of December 1991)."
The Lakes Policy was to be implemented by:
"(a)prohibiting the carrying out of activities which cause the destruction and degradation of lakes; and
(b)requiring persons who cause the destruction or degradation of lakes to undertake, in certain cases, the rehabilitation of those areas of lake."
The activities referred to in (a) above included filling, excavation and mining, the discharge of effluent and construction or alteration of drainage systems.
The draft Lakes Policy was gazetted on 29 April 1992, having been approved by the Minister under s 31(d) of the Environmental Protection Act 1986. By s 33(1) of the Act, a draft policy, so approved, has the force of law. Thus, by a combination of the Lakes Policy and the Environmental Protection Act 1986, none of the prohibited activities was permitted, unless authorised under the Act.
At trial, the appellant sought to identify and classify the relevant wetlands. It did so for two reasons. First, it did so in an attempt to determine whether there were any lakes on the reserved Mount Lawley land which fell within the Lakes Policy criteria. This was thought to be necessary because no reliable mapping had been carried out and there was no record of the extent of the wetlands as at 1 December 1991, the date for the application of the policy criteria. Secondly, the appellant wanted to determine the extent to which any hypothetical development of the reserved land might have been restricted by the Lakes Policy. This was thought to be relevant to the valuation exercise. The possibility of the policy affecting the urbanisation of the land is indeed relevant to the valuation exercise, because of conditions of the land of environmental significance. This is a matter we consider further below.
We return to a consideration of Bulletin 642.
The report noted that, of the options proposed, the EPA considered that the protection of all lakes in the Ellenbrook project area, incorporating approximately 450 hectares, was environmentally acceptable. This formed the basis of the second recommendation in the report. The recommendation was:
"The Environmental Protection Authority recommends that, prior to rezoning to 'Urban Deferred' in the Metropolitan Region Scheme, the proponents should set aside for conservation an area of approximately 450 hectares in the north west corner of the project site … to be vested in the National Parks and Nature Conservation Authority. The final boundary should be determined to meet the requirements of the Minister for the Environment on advice from the Department of Conservation and Land Management and the Department of Planning and Urban Development."
In the body of the report, reference was made to four conservation scenarios considered in the PER. These included:
(1)the conservation of over 400 hectares of the land in the Ellenbrook project area as well as about 90 hectares immediately to the north containing four additional wetlands;
(2)the conservation of those wetlands which had been identified as "lakes" under the Lakes Policy and one "lake" on land to the north, outside the proposed development area;
(3)the conservation of those "lakes" within the project area included in an area of some 450 hectares;
(4)the preservation of a 90 hectare area of the Lexia wetlands. Under that proposal, the remaining lakes would be filled or used as part of the overall drainage management of the site.

However, the question here is the meaning to be given to "value" in s 36 of the Scheme Act. It is therefore necessary to consider all of the indications as to that meaning to be gleaned from the language and the context. This is the approach used in relation to the claims of injurious affection in two decisions of the High Court, one under s 23(1)(c) of the Lands Acquisition Act 1955 (Cth), in Commonwealth v Morison (1972) 127 CLR 32, and the other under s 20(1)(b) of the Acquisition of Land Act 1967 (Qld) in Marshall v Director‑General, Department of Transport, above, where the Court reviewed the approach in Morison.
One indication is to be found in s 36(9) of the Scheme Act, to which Scott J referred in Hill at [24]. That provision applies where compensation has been paid on the first sale after the reservation, but the reservation has been revoked subsequently, or its coverage of the land reduced. In those circumstances, after the land is first sold or subdivided following the revocation or reduction, the Commission may recover a "refund" from the owner, calculated as at the date of the revocation or reduction. The refund will correspond to that percentage of the "value" of the land as at that sale or subdivision which is represented by the proportion the original compensation bears to the unaffected "value" of the land as at the date of the original sale (s 36(12) read with s 36(7)(c) and s 36(6)(b)).
As Scott J pointed out in Hill at [24], "it would clearly be inappropriate for a refund to be calculated on the value of the land to the [original] owner in such circumstances".
Section 36(4)(a)(i) provides another indication that "value" should not be understood as value to the owner, in the compulsory acquisition sense. It is there provided that, before compensation for injurious affection is payable, the person lawfully appointed to determine the compensation must be satisfied, among other things, "that the owner of the land has sold the land at a lesser price than he might reasonably have expected to receive had there been no reservation of the land under the Scheme". If the land has been sold, it may be assumed that the owner received the true market price. Likewise, the price he might reasonably have been expected to receive without the reservation, would also be the market price. If, therefore the reservation had not affected the value (as in Murphy's case, above, for example) no compensation would be payable. However, if "value" in this context includes compensable expenditure such as that allowed by the trial Judge, the owner would be denied his compensation by operation of s 36(4)(a)(i).
Finally, we refer to the Report of the Metropolitan Region Planning Authority, prepared in 1962, which led to the introduction of what are now s 36(3), (4) and (5) of the Scheme Act. Paragraph 22 of that report, quoted earlier in these reasons, refers to the measure of compensation for injurious affection in terms of a market value differential.
In our view, "value" should be construed in the same way throughout s 36. It may be assumed that the legislature uses terms consistently within a statute. A variation in meaning here would differentiate between, on the one hand, compensation for injurious affection paid by the Commission when land is sold to a third party, and, on the other hand, the price paid by the Commission on its election to acquire in lieu of paying compensation. Such a differentiation would not bear any obvious relation to the purpose of providing compensation for the injurious affection.
To say that the appropriate value of the reserved Mount Lawley land is its market value is not the end of the matter. The term "market value" is a convenient way of referring to the value to be ascertained by applying the principle derived from the decision of the High Court in Spencer v The Commonwealth of Australia, above; that is, by posing the question (put by Griffith CJ at 432):
"What would a man desiring to buy the land have had to pay for it … to a vendor willing to sell it for a fair price but not desirous to sell?"
As Callinan J pointed out in Boland v Yates, above, Griffiths J was there referring to a vendor and purchaser who were "conversant with the subject at the relevant time". Isaacs J referred to the notional parties as being "perfectly acquainted with the land, and, cognizant of all circumstances which might affect its value, either advantageously or prejudicially …" (at 441). In Boland v Yates both Callinan J and Gleeson CJ (with whom Gaudron and Gummow JJ agreed) referred to the fact that land might have a "special value", reflecting "a value to the owner over and above the price which a hypothetical purchaser may pay" ([16] per Gleeson CJ; and see [292] per Callinan J).
It is not clear to us that compensation for injurious affection under s 36 can include any allowance for "special value" in that sense, and we do not read Scott J in Hill to be suggesting otherwise. However, we do not need to decide this as, in our view, there is no demonstration of any "special value" in that sense in this case.
The concept of "special value" arises from the opinion of the Privy Council in Pastoral Finance Association Ltd v The Minister [1914] AC 1083, at 1088:
"That which the appellants were entitled to receive was compensation not for the business profits or savings which they expected to make from the use of the land, but for the value of the land to them. No doubt the suitability of the land for the purpose of their special business affected the value of the land to them, and the prospective savings and additional profits which it could be shewn would probably attend the use of the land in their business furnished material for estimating what was the real value of the land to them. But that is a very different thing from saying that they were entitled to have the capitalised value of these savings and additional profits added to the market value of the land in estimating their compensation. They were only entitled to have them taken into consideration so far as they might fairly be said to increase the value of the land. Probably the most practical form in which the matter can be put is that they were entitled to that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it." (Our emphasis)
As Callinan J said in Boland v Yates (at [354]), the concept of the dispossessed owner (being regarded as the prudent purchaser in this context) paying above the market price for the land, rather than losing it, "may not be an entirely reliable guide" to the assessment of the special value to the dispossessed owner. However, Spencer might be expected to cover most situations, because:
" … it does not contemplate one who would lightly relinquish a property which had a particular value to him or her for less than that value."
Pastoral Finance was cited to the trial Judge. Although his Honour did not refer to it in his reasons, he apparently had it in mind when, as we have noted above, he said that the concept of special value to the owner was relevant to his determination of market value. It explains his reference to Hill's case where Scott J referred to the judgment of Callinan J in Boland v Yates.
In our view, it is likely to be a rare case in which there is a difference between the market value of land and its special value to the owner. That is because the factors of special value are likely to be components of the market value which are recognisable as such by a notional vendor and purchaser who are "conversant" or "perfectly acquainted" with the land and all its features.
Callinan J described "special value" in the following way in Boland v Yates at [292]:
" … its value to the owner over and above its market value. It arises in circumstances in which there is a conjunction of some special factor relating to the land and a capacity on the part of the owner exclusively or perhaps almost exclusively to exploit it."
Even if that test is applied to the additional components of value identified by the trial Judge in the present case, none of them qualifies.
The cost of preparing the development application represents an amount expended to produce information about the use of the land that might have been permissible absent the reservations. It is the kind of expenditure identified by Callinan J in Boland v Yates at [271] – [273] which demonstrates the potential of the subject land. It is therefore reflected in the market value. There is nothing in that expenditure reflecting a capacity of the appellant to exploit the land that is exclusive or almost exclusive to the appellant. See also St John Ambulance Association of Western Australia Inc v East Perth Development Authority (2001) 114 LGERA 112 at [87] ‑ [99]. This is even more clearly the case for the holding costs of the land and interest on the sale price until settlement, and the costs the appellant would have incurred in buying a replacement property.
Those costs and that interest do not relate to attributes of the land, but rather, as the trial Judge acknowledged, to the particular sale transaction itself. They represent matters that do not go to increasing the value of the land, but rather to compensating the vendor for loss on delay in completion of that transaction and from being forced to find replacement property. The principle of s 36(2a) of the Scheme Act is that compensation is to be determined by fixing a price by reference to value as at the stipulated date, disregarding the stipulated items, and by the mechanisms indicated. That principle does not encompass compensation for other loss or damage, whether from dispossession or otherwise. Even in relation to resumption, the authorities from Spencer's case forward have clearly distinguished between claims for the value of the land and claims for "damage otherwise": Isaacs J, in Spencer's case at 438, quoted by Callinan J in Boland v Yates at [355].
The respondent pressed on us the argument, on which Templeman J in McDougall placed partial reliance in rejecting the view that interest could not be included in market value, that "pending settlement, the vendor is fully entitled to the use and enjoyment of his land as fully as he was before the election" (McDougall, at [211]). The respondent in its written submissions and argument before us also stressed the language of s 36(2b) of the Scheme Act, that "The value of the land referred to in subsection (2a) shall be the value thereof on the date the Commission elects to acquire the land under that subsection". This, it said, meant any matters arising thereafter, including expenditures (whether or not improving ones) and the effluxion of time to settlement, were to be disregarded.
The appellant replied to the first argument, correctly in our view, by submitting that in the present case, at least, such use or enjoyment is blighted by the reservation for Parks and Recreation purposes. However, as we have indicated, there is no scope for compensation for that blight on that use or enjoyment in the valuation provided for in s 36(2a) of the Scheme Act.
The appellant's reply to the second argument was that the reference to the point in time in subsection (2b) did not relieve the valuer from the need to take account of possibilities that should have been factored into a valuation then. Again, we consider that this is correct. However, this response fails to have regard for the distinction to be drawn between compensation by reference to the price of the land determined on its value as we have indicated, on the one hand, and compensation for loss or damage otherwise arising, on the other.

Interest

While we have, under the previous heading, concluded that the trial Judge erred in awarding interest on the acquisition price as an incident of value, that does not, in our view, finally dispose of the issue of interest.
In his judgment, the trial Judge referred, at [120], to authorities on compensation on just terms for compulsory acquisition in which the relevant statutes had been construed to provide for interest on the compensation amounts, even although there were no express statutory provisions to that effect. The appellant (cross‑respondent) drew our attention to a number of those authorities, particularly Marine Board of Launceston v The Minister of State for the Navy(1945) 70 CLR 518, as well as authorities on valuation based on "fair rental", particularly Ricciardello v Caltex Oil (Australia) Pty Ltd [1991] ANZ ConvR 445 (Full Court WA).
In our view, s 36(2a) of the Scheme Act does not permit an inference to be drawn that interest should be paid on the acquisition price. That is because, as we have noted above, the section is concerned with compensation for diminished value: not for loss or damage arising otherwise. The point was made in Spencer's case by Isaacs J at 438, cited by Callinan J in Boland v Yates at [355].
The appellant pressed on us the approach to statutory construction referred to in Bennion, F A R "Statutory Interpretation" Butterworths, London, 1984, at 304, that a statute which interferes with an owner's right of enjoyment of land should be construed benevolently to the owner. However, we are not persuaded that such an approach is valid in the circumstances of this case. It would be inconsistent with the clear words of s 36(2a).
We turn to consider s 32 of the Supreme Court Act 1935, which provides as follows:
"(1)In any proceedings for the recovery of any money (including any debt or damages or the value of any goods), the Court may order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date when the judgment takes effect."
The trial Judge in this case, at [121], concluded that s 32 had no application on the basis that until the owner signifies acceptance of the acquisition, there is no debt on which interest under the provision arises. Templeman J in McDougall at [209] agreed.
However, in neither case was the attention of the Court drawn to the decision of the High Court in Victorian WorkCover Authority v Esso Australia Ltd (2001) 207 CLR 520. There the Court considered whether the Victorian counterpart to our s 32 permitted the Court to award interest on the amount for which the workers compensation authority was entitled by its statute to be indemnified by another who was liable in respect of the injury for which the authority had paid compensation.
So far as relevant, s 60(1) of the Supreme Court Act 1986 (Vic) provides that the Court:
" … on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest … from the commencement of the proceeding to the date of judgment over and above the debt or damages awarded."
The Court in Victorian WorkCover held that interest was payable under this provision, notwithstanding that the principal sum on which interest was payable could not be ascertained until certain matters, such as any contributory fault of the worker or his employer, had been resolved, and notwithstanding that that sum was not an amount that could readily be described as "damages".
The judgments of the Court rely heavily upon the judgment in Crisp & Gunn Co-operative Ltd v Hobart City Corporation (1963) 110 CLR 538. There, the expression in the Tasmanian Rules of the Supreme Court 1958, O XXIV, r 1, "action to recover a debt or damages", was held to cover an action for compensation for compulsory acquisition of land pursuant to statutory powers: see Victorian WorkCover at [31] and [41] per Gleeson CJ, Gummow, Hayne and Callinan JJ; and [101] per Kirby J.
The Court in Victorian WorkCover used the language of Crisp to describe the terms of the Victorian statute corresponding to the Tasmanian Rule as a "composite expression" that "embraces any proceeding in which a claim for money is made, in contrast to declaratory relief and claims for specific forms of relief such as mandatory injunctions, charging orders and orders for specific performance" (at [41], per Gleeson CJ, Gummow, Hayne and Callinan JJ; and see [102] per Kirby J).
In our view this description is apt to cover the present proceedings for the determination of value under s 36(2b)(ii) of the Scheme Act . It is true that the action for determination is not the same as an action for recovery; but in our view the action for determination encompasses a determination that the value so determined is recoverable. Crisp's case appears to offer support for this view.
Nor do we see anything in the Scheme Act that would preclude the award of interest under that provision: see Victorian WorkCover at [106] ‑ [109] per Kirby J on this issue; and see the decision on the issue of interest on compensation for injurious affection in Cornell v Town of East Fremantle (2003) 131 LGERA 20. Indeed, if an award of interest was not open, there would be an anomaly to which the appellant (cross‑respondent) referred us, in that interest would be payable on a claim for injurious affection arising where the respondent did not make a s 36(2) election, but not payable on the amount adjudged to be payable on an election. For the right to interest in the former context, we mention the judgment of Hasluck J in Cornell at [317], where his Honour based that right on s 32 of the Supreme Court Act 1935.
We therefore conclude that s 32 of the Supreme Court Act1935 empowers the Court to make an award of interest on the acquisition price of land fixed under s 36(2b)(ii) of the Scheme Act. Our analysis also means that the Court has such power in respect of a claim for compensation for injurious affection in respect of the CAH land, a claim we reach below.
Because it will, for the reasons we have given, be necessary to order a retrial, it follows that the making of any such award will be a matter for the trial Judge.
While our conclusions so far dispose of the appeal and the cross‑appeal with respect to that portion of the reserved Mount Lawley land which the respondent elected to acquire, and supply the valuation principles at least for the claim for injurious affection to the CAH land, there remain a number of issues peculiar to that land, and to the unreserved Mount Lawley land. We turn to those issues now.

The claim for injurious affection and severance damages in respect of land not acquired

In its re‑amended statement of claim, the appellant sought compensation for injurious affection in respect of that part of its land which the respondent had not elected to acquire. This comprised the 7.9 hectares of the CAH land and the 11.9 hectares in the south‑east portion of Lot 47, the unreserved Mount Lawley land (in respect of which there was also a claim in the nature of a severance claim). We understood these claims to be, in relation to the CAH land, a claim for injurious affection being a reduction in value resulting from the reservation, whereas, in relation to the unreserved Mount Lawley land, the claim was for injurious affection being at least a claim for a reduction in value resulting from the fact that that area had been severed from the balance of Lot 47 and could not, therefore, be developed as economically.
The trial Judge held (at [40]) that while a claim for compensation could have been made under s 11 of the Planning Act, there were two barriers to such a claim. The first barrier was the fact that no claim had been made within the period of six months from the date of reservation, as required by cl 8 of the Scheme Act [sic MRS] . The second was that the parties had not proceeded by way of arbitration as required under s 11(4) of the Planning Act.
In relation to the first barrier, the relevant provision is not cl 8 of the MRS: it is s 11(1) of the Planning Act. It is there provided that any person whose land or property is injuriously affected by the making of a Town Planning Scheme is required to make a claim not less than six months after the date when notice of the approval of the Scheme is published. This provision applies to amendments to the Scheme. However, it does not apply when a claim for injurious affection is brought pursuant to the Scheme Act. That is because s 36 of the Scheme Act requires s 11 and s 12 of the Planning Act, when applied to the provisions of the Metropolitan Town Planning Scheme, to be read and construed as if they included subsections (3), (3a), (4), (5) and (6) of s 36 of the Scheme Act.

Some of these provisions have previously been set out in these reasons. Relevantly for present purposes, s 36(3) of the Scheme Act provides:
" … where under the Scheme any land has been reserved for a public purpose, no compensation is payable by the responsible authority for injurious affection to that land alleged to be due to or arising out of such reservation until –
…
(b)the responsible authority refuses an application … for permission to carry out development on the land …"
Subsection 36(5) provides that a claim for compensation under subsection (3) shall be made at any time within six months after the land is sold or the application for permission to carry out the development on the land is refused.
In the present case, the appellant lodged a development application with the Shire of Swan on 7 December 1995. This was received by the respondent on 14 December 1995.
Although the application referred to the zoning of the subject land as "Parks and Recreation" in the MRS, it is clear enough from the drawings which form part of the application, as we have previously indicated, that the proposed development included the CAH land. It did not, however, include the unreserved Mount Lawley land.
By cl 31(2) of the MRS, there is a deemed refusal of an application when it has not elicited a response within 60 days of its receipt by the respondent.
In the present case, the respondent did not reply to the development application within the 60‑day period. On the 61st day, the appellant made its claim for compensation for injurious affection in the Form 4 prescribed by the MRS.
The claim was not, therefore, time‑barred.
We have mentioned that the second of the barriers to the claim identified by the trial Judge was that the parties had not proceeded by way of arbitration.
It is the case that a claim for compensation for injurious affection brought pursuant to s 11 of the Planning Act - albeit brought under that section as incorporated in the Scheme Act - is to be determined by arbitration "unless the parties agree on some other method of determination". In the present case, the appellant's claim was pursued initially by originating motion dated 19 May 1997.
There was no formal agreement between the parties to proceed by way of litigation as the means of determination of the claim. However, in our view, there was clearly a tacit agreement to that effect. That agreement may be inferred from the fact that the respondent made no application to stay the litigation in order to allow the dispute to be determined by arbitration.
There is, therefore, no obstacle to the appellant's claim for injurious affection in so far as it relates to the CAH land which, as we have held above, the respondent had not elected to acquire.
That being so, compensation is payable in accordance with s 36(6) of the Scheme Act. So far as relevant, s 36(6) provides:
"(a)… the compensation payable for injurious affection due to or arising out of the land being reserved under the Scheme for a public purpose, where no part of the land is purchased or acquired by the Commission, shall not exceed the difference between –
(i)the value of the land as so affected by the existence of such reservation; and
(ii)the value of the land as not so affected."
We do not consider that the reference to "no part of the land" being purchased or acquired causes any difficulty in the present case. That is because we consider it appropriate to deal separately with the land reserved for Parks and Recreation and that reserved for the CAH land. No part of the latter portion has been purchased or acquired, as we have explained.
Because it will be necessary for us to order a retrial in respect of the determination of the value of the reserved Mount Lawley land (other than the CAH land) under s 36(2b), and because the issue of compensation payable for injurious affection overlaps that which must now be retried, it seems to us that this issue, too, must be left to the trial Judge.
That leaves the injurious affection claim in respect of the unreserved Mount Lawley land, including the severance issue. In our view, it is not open to the appellant to make any claim for such compensation. There are two reasons. First, we think it clear that s 36 of the Scheme Act is intended to provide a basis for assessing compensation for injurious affection, not severance.
While it is true that severance damage has been regarded as a species of injurious affection - see Sisters of Charity of Rockingham v The King [1922] 2 AC 315 at 327 ‑ 328 - we think it significant that s 36 contains no reference to severance. By comparison, s 241(7) of the Land Administration Act 1997, which provides for the assessment of compensation where land is resumed, does make specific provision for severance damages which may be recovered in addition to the value of the resumed land.
Our view is supported by the fact that both s 36(3) and (6) of the Scheme Act refer to the payment of compensation for injurious affection resulting from a reservation in respect of the land so reserved. Thus, neither provision contemplates the payment of compensation in respect of land which has not been reserved.
There is, however, a more fundamental obstacle. A claim for compensation for injurious affection, in the present context, arises when an application for permission to carry out development on the land has been refused. In the present case, the appellant did not make an application for permission to develop the unreserved Mount Lawley land. It follows that s 36(3), upon which the appellant's application was based, has no application.
It is well settled that there is no right to compensation at common law for injurious affection arising out of town planning schemes restricting the use to which land may be put: Folkstone v Metropolitan Region Planning Authority [1968] WAR 164. The claim relating to the unreserved Mount Lawley land must therefore fail.

Findings and conclusions

In summary our conclusions are these:
•by s 36(2b) of the Scheme Act, the valuation exercise requires the Court to value the reserved Mount Lawley land (excluding the CAH land) without regard to the reservation or the rezoning effected by Amendment 879/33;
•that exercise requires an assessment to be made of the value of the land as it would have appeared to a hypothetical vendor and purchaser, both perfectly acquainted with the land and all its characteristics, on 7 May 1996, assuming no reservation and no rezoning of adjacent land under the Scheme represented by MRS Amendment 879/33 and 950/33;
•in making such an assessment, it is necessary to take into account any urban potential the land may have, and, as well, those characteristics which militate against rezoning;
•the question what was the potential for urbanisation of the land can only be answered by considering and weighing the evidence adduced by the parties in relation to the principal issues referred to in the immediately preceding point;
•the trial Judge did not consider any of that evidence because, wrongly in our view, he regarded it as irrelevant;
•in the absence of that judicial determination, and given that we are not in a position to make that determination ourselves, it is not possible to say whether any of the valuers has valued the land on a proper basis;
•there must consequently be a retrial;
•the retrial should be conducted on the basis that the price for the acquisition of the reserved Mount Lawley land (excluding the CAH land) should be its market value, which would not include items such as interest, the cost of the development application, the holding costs of the land pending settlement and the costs incurred in acquiring a replacement property;
•the respondent is bound by its election to acquire the reserved Mount Lawley land (excluding the CAH land), but s 36 of the Scheme Act does not provide for a compulsory acquisition;
•under s 32 of the Supreme Court Act1935, it is permissible to award interest on the price as above, and on the compensation for injurious affection referred to below;
•the respondent has not elected to acquire the CAH land;
•the retrial should encompass the question of what compensation is payable in respect of injurious affection to the CAH land, there being no obstacle to the appellant's claim in that regard;
•under s 36 of the Scheme Act or the common law the appellant is unable to claim compensation for injurious affection, whether or not including severance damage, in relation to the unreserved Mount Lawley land.
It follows, from our findings and conclusions, that both the appeal and the cross‑appeal must be allowed in the respects to which we have referred. We will hear further from the parties as regards the orders which are necessary in order to give effect to our conclusions.