Panizza v Western Australian Planning Commission - [2005] WASC 95

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: PANIZZA -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2005] WASC 95

CORAM: BLAXELL J

HEARD: 23 & 24 FEBRUARY 2005

DELIVERED : 17 MAY 2005

FILE NO/S: CIV 1383 of 2002

BETWEEN: ALFRED PETER PANIZZA
Plaintiff
AND
WESTERN AUSTRALIAN PLANNING COMMISSION
Defendant

Catchwords:

Town planning - Reservation and acquisition of land - Valuation of land acquired under s 36 of Metropolitan Region Town Planning Scheme Act 1959 (WA) - Highest and best use of land at date of acquisition - Whether, but for reservation, subdivision would have been approved - Whether environmental characteristics of land would have prevented subdivision

Legislation:

Metropolitan Region Town Planning Scheme Act 1959 (WA), s 36

Result:

Value of land determined to be $900,000

Category: B

Representation:

Counsel:

Plaintiff: Mr M J McCusker QC & Mr M L Easthope
Defendant: Ms L E Christian

Solicitors:

Plaintiff: Clark Whyte
Defendant: State Solicitor

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

Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) WASCA 149
Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands (1947) AC 565
Queensland v Murphy (1990) 95 ALR 493

Case(s) also cited:

Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522
Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 106
Spencer v The Commonwealth (1907) 5 CLR 418
J E Squarcini & Milino Pty Ltd v State Planning Commission, unreported; SCt of WA, Library No 960200; 17 April 1996

BLAXELL J: The plaintiff is the owner of certain land in East Wanneroo ("lot 7") which the defendant Commission has elected to acquire pursuant to the Metropolitan Region Town Planning Scheme Act 1959 ("the Act"). The parties have been unable to agree upon the price to be paid by the defendant for lot 7, and the plaintiff now seeks a determination of that value pursuant to s 36(2b)(b)(ii) of the Act.
Lot 7 is approximately 29.8 hectares in area, and at all material times it (or the land of which it once formed part) was zoned "rural". The defendant elected to acquire lot 7 on 18 April 2000, and the essential issue which will determine its value is whether, at that date, the land was capable of being subdivided into smaller rural lots. In this regard, the defendant contends that certain environmental characteristics of lot 7 would have prevented any application for subdivision from being approved.
Fortunately, it has not been necessary to hear any valuation evidence, because the parties have been able to agree on two alternative values. If I find that lot 7 was capable of subdivision, it is agreed that I should determine the value to be $900,000. If, on the other hand, I find that the land could not have been subdivided (or had minimal prospects of subdivision), the agreed value is $380,000. Whichever of these values is correct, the plaintiff also claims interest on the quantum of the valuation as from 18 April 2000.

The principles to be applied

Section 36 of the Act requires that the value of the land be determined "without regard to any increase or decrease, if any, in value attributable wholly or in part to the Scheme". As noted by the Full Court in Mount Lawley Pty Ltd v Western Australian Planning Commission (2004) WASCA 149, this provision embodies the principle first expounded in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands (1947) AC 565, 572. The Full Court in Mount Lawley went on to review all of the relevant authorities including the decision of the High Court in Queensland v Murphy (1990) 95 ALR 493, where it was held (at 496) that:
"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 instance, the "Scheme" under which the land is to be acquired is the whole of the Metropolitan Region Scheme ("the MRS"). This being so, a question of construction arises as to whether I must disregard those aspects of the MRS that are not specific to lot 7, but which nevertheless impact on its value in a very general and indirect way. One such indirect impact is the increase in value attributable to the fact that the MRS preserves vast swathes of rural land in the metropolitan area from further subdivision. Another is the potential reduction in value brought about by the general policy of reserving appropriate areas of remnant bushland that would otherwise be suitable for development.
Obviously, the question of value cannot be determined in a vacuum as if there was no metropolitan planning at all. In my view, on a proper construction of the Act, I must necessarily take account of those aspects of the MRS that apply to land in the metropolitan region generally, and do not specifically apply to lot 7. Accordingly, I propose to disregard only those provisions of the Scheme that bear directly on lot 7 or can properly be regarded as a step in the process of reservation and acquisition of the same.
Consistent with this approach, it is necessary to identify the planning steps leading to the defendant's election to acquire lot 7 "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 plaintiff) as the highest and best use". (Mount Lawley at [69] ‑ [70]).
In the end, the plaintiff bears the onus of satisfying me on the balance of probabilities that the highest and best use of the land (as at 18 April 2000) was that it be subdivided into smaller lots. This question is to be answered by reference to "the hypothetical and artificial market which must be assumed for the purposes of the valuation exercise". Put another way, would "the hypothetical vendor and purchaser perfectly acquainted with the land and all of its characteristics, including those which render it suitable for development and … those which militate in favour of reservation" have considered lot 7 to be suitable for subdivision (Mount Lawley at [162] – [164]).
When the land has some "prior ineluctable quality" or unique environmental characteristic, the conclusion can be easily reached that the hypothetical vendor and purchaser would have considered it to be unsuitable for subdivision (Mount Lawley at [145] – [154]). However, in circumstances such as the present where the environmental characteristics of the land are perhaps not unique, but may nevertheless be significant, there needs to be a careful weighing of the evidence to determine whether or not those factors would have prevented subdivision (Mount Lawley at [155] – [156], [164] – [165]).
The steps taken towards implementing a scheme may be relevant to this determination even though their impact on the valuation of the land is to be disregarded. Such steps are relevant to the extent that they reveal intrinsic characteristics or conditions of the land that bear upon the question of whether or not it was suitable for subdivision (Mount Lawley at [71] and [147]).

Matters that are common ground

Lot 7 is situated within the City of Wanneroo, and is located some 17.5 kilometres north of Perth and approximately 7 kilometres south‑east of the Wanneroo town centre. At all material times the land the subject of lot 7 has been zoned "rural", and it adjoins and is immediately to the south‑west of an area of State forest being part of the Gnangara pine plantation. Up until 1998 lot 7 was part of a larger parcel of land some 110 hectares in area which had been owned by the plaintiff.
In November 1970 the defendant's predecessor (the "MRPA") adopted the Corridor Plan for Perth. This introduced the concept of corridor planning so that there could be future growth without urban sprawl. Accordingly, urban growth was to be channelled into "corridors" separated by "wedges" of non‑urban land. At all material times lot 7 has been within one such wedge of non‑urban land.
Consistent with the Corridor Plan, the MRPA was party to a Rural Small‑holdings Policy Study, which was released by the appropriate Minister in 1980. The study recommended the use of "Special Rural Zones" where rural land adjacent to urban areas could be subdivided into smaller lots of a minimum of 4 hectares in size. The land the subject of lot 7 fell within one such Special Rural Zone.
The Rural Small‑holdings Policy Study also recommended that a higher priority should be given to environmental matters. Accordingly:
" – Proposals for small‑holdings subdivision should be assessed with due regard to the effect on the environment of that locality and the ability of that environment to accommodate the proposal without undesirable degradation. Effective means to protect and enhance the environment must include sensitive and sensible land use, development and subdivisional controls …
- subdivision – shall comply with sound town planning relating to such matters as the … preservation of wetlands and other areas of ecological and landscape value."
This focus on environmental matters was carried through into the revised planning strategy known as Metroplan which was released by the Premier in 1990. Metroplan identified additional areas for urban development without compromising the corridor principles of earlier plans. Metroplan also identified "Water Resource Policy Areas" including the area covering the Gnangara water mound on which lot 7 is situated. Metroplan further provided that:
"7.2The priority consideration in assessing development proposals in Water Resource Policy Areas will be water resource protection.
7.3Local rural strategies and rural planning proposals should address the effects of the proposed land use on water quality, groundwater balance and environmentally sensitive areas.
7.4Protection of the remaining natural vegetation, through such measures as vegetation clearance controls and stock limits, should be pursued through local rural strategies."
An important policy aim of Metroplan was the protection of areas of environmental significance including wetlands, important wildlife habitats, and areas containing significant flora or landscapes. Metroplan envisaged that this aim would be achieved by reservation and acquisition of the most important areas, as well as appropriate control over privately owned land in respect of "the siting and design of buildings, supplementing tree and bushland cover, and restricting subdivision".
In 1992 the then Department of Planning and Urban Development prepared the North‑West Corridor Structure Plan on behalf of the defendant. This provided the framework for the further development of the north‑west corridor in the vicinity of lot 7. This plan identified a substantial amount of land in East Wanneroo as being suitable for urban development, but at the same time recognised the need for regional open space to serve the likely increase in population, and to protect areas of environmental and landscape significance.
The North‑West Corridor Structure Plan also identified "areas of special rural character and sensitivity" (including an area of land covering lot 7) which were referred to as "landscape protection zones". The purpose of this zoning was to ensure that the natural character of such areas was conserved and enhanced through "sensitive subdivision and development which recognises existing landscape systems and natural features". The plan went on to state that the particular area covering lot 7 was:
" … currently the subject of a detailed study to determine whether any or all of the land should be reserved for Parks and Recreation".
Consistent with these proposals, the defendant arranged for a number of studies of vegetation, flora and wildlife habitats in the general area of land surrounding lot 7. These included a flora and vegetation report prepared in 1993 by a consultant botanist, Mr Malcolm Trudgen, and an "East Wanneroo Wetlands Natural Resource Mapping Study" undertaken in 1994 by the environmental management consultants, Bowman Bishaw Gorham.
These studies identified "priority conservation zones" for either "flora and vegetation", or "wildlife and habitat" and gave each such zone a ranking. The studies identified as a "priority 1" conservation zone an area including lot 7 because:
"•The area forms a link between Lake Jandabup and Lake Gnangara, and while this link is not complete it is the best available, and maintains the option to improve the link in the future through rehabilitation of other areas.
•It contains a significant area of the southernmost areas of the Bassendean Complex – North – Transition vegetation. While this complex is relatively well represented in conservation reserves, it is likely that the vegetation and flora found in it vary significantly over its length and therefore it is important to conserve areas of its southern extent. It should also be noted that this complex did not have a very large original distribution.
•It contains vegetation types not seen elsewhere in the study area (eg units Ja4, Ja4A, DL1, Ws1).
•It contains a population of the rare bronze coloured flower form of Banksia menziesii.
•…
•Most of the area is in very good or excellent condition and this adds to its value.
•The vegetation of the area helps to protect the quality of the groundwater flowing into Lake Jandabup and other downstream wetlands."
During 1994 there was a major amendment to the MRS as it applied to the East Wanneroo area. This amendment essentially adopted and implemented the recommendations contained in the East Wanneroo Wetlands Natural Resource Mapping Study. The amendment came into effect on 3 November 1994.
During 1995 the proposal to reserve land including the future lot 7 for "parks and recreation" was further entrenched by an "omnibus amendment" to the North‑West Corridor Region Scheme, ("NWCRS"). In the meantime, the plaintiff and the owner of a nearby lot which was also within the conservation zone (the "Squarcini" land) had each lodged applications for approval to subdivide their respective properties. The defendant refused those applications and there were then appeals to the Town Planning Appeal Tribunal (in respect of the Squarcini land) and to the Minister for Planning (in respect of the plaintiff's land). Pending decisions on these appeals, the reservations of the plaintiff's land and the Squarcini land were removed from the omnibus amendment to the NWCRS.
The plaintiff's application for subdivision was lodged on 23 May, and refused by the defendant on 11 October 1994. The appeal was lodged on 9 November 1994 and was largely upheld by a decision of the Minister made on 15 June 1995.
It is relevant to note that when the plaintiff's application for subdivision was first lodged with the defendant, it was referred for assessment by the Department of Environmental Protection. The Department responded with a "nil assessment" which indicated that it did not consider that the proposed subdivision gave rise to any environmental concerns at that time.
The plaintiff's original application had proposed subdivision of the parent handholding into 23 rural residential lots with an average size of 4.1 hectares. As a result of the Minister's decision on appeal, the plaintiff submitted a revised plan of subdivision showing 16 lots of approximately 4 hectares, together with lot 7 which was 29.8 hectares in area. When allowing the appeal, the Minister stated:
"In my initial consideration of this appeal, I was concerned that some of the land showed characteristics in physical land form and vegetation which should be conserved. As a result of communicating that advice to you, your consultants have now submitted a revised plan of subdivision showing 16 lots each having areas of approximately 4 ha excepting Lot 7 which shows an area of 29.8 ha which contains the land to be conserved."
The Minister went on to approve the revised plan, subject to a condition that the proposed lot 7 be held "as a separate lot pending acquisition by (the defendant) when it is in a position to do so", and subject to "such other conditions as (the defendant) may see fit to impose on a subdivision of this kind". The plaintiff proceeded to subdivide in accordance with the revised plan of subdivision and the relevant Plan of Survey was endorsed by the defendant on 22 June 1998.
By 18 April 2000 when the defendant elected to acquire lot 7, some further planning strategies and policies had come into effect. The most significant of these was the State Planning Framework Policy ("SPFP") which came into force on 22 December 1998, pursuant to s 5AA of the Town Planning and Development Act 1928. Consistent with s 5AA(2) the SPFP combined all existing state and regional policies, strategies and guidelines into a central framework which would govern all future decision‑making on land use and development within the State.
The SPFP was in two parts, with Part "A" setting out general principles for land use and development and Part "B" listing particular plans, policies and strategies as "State and regional provisions". It is relevant to the issues in the present proceedings, that Part "A" included the following general principle:
"The protection of environmental assets and the wise use and management of resources is essential to encourage more ecologically sustainable land use and development. Planning should contribute to a more sustainable future, in particular, by:
•promoting the conservation of ecological systems and the biodiversity they support including ecosystems, habitats, species and genetic diversity;
•assisting in the conservation and management of natural resources including air quality, energy, waterways and water quality, land, agriculture and minerals to support both environmental quality and sustainable development over the long term;"
The plans, policies and strategies listed under Part "B" of the SPFP included the following:
"Metroplan (1990)
North West Corridor Structure (1992)
Metropolitan Rural Policy (1995)
Urban Bushland Policy (1995)
DC 3.4 Rural Land Use Planning (1989, amended 1991 and 1992)
Guidelines Preparation of a local rural Strategy (1989)
Guidelines Rural‑Residential Development in the Perth Metropolitan Region (1992)"
Of these plans, policies and strategies, it is particularly relevant to note that the Metropolitan Rural Policy 1995 ("MRP") has as its "fundamental premise" that "the rural zone should not be regarded as a resource for continued subdivision but should be viewed in terms of appropriate land uses, taking into account a range of public and private objectives". The stated objectives of the MRP are to (inter alia):
"•Conserve and enhance land with special conservation or landscape value;
•Ensure land use and development is compatible with safeguarding designated and proposed surface and groundwater catchments, water courses and wetlands; and
•Minimise risk due to fire hazard."
The MRP further provides, in Part 3.5, that one of its key principles is that:
"The subdivision and development of rural land should only be permitted where it is (inter alia) consistent with the policy measures set out in Part 5 of this Policy; …"
Part 5.6 of the MRP makes reference to "areas of special conservation and landscape significance" including "remnant vegetation of the Swan coastal plain", and states that:
"Aside from parks and recreation reservations, there is need to protect other regionally significant landscapes and conservation areas in the rural zone where public acquisition (and general public access) is not necessary, but special controls are needed over land use, subdivision and development to ensure these assets are not lost as the region develops."

Figure 8 of the MRP depicts "areas of high landscape and conservation value" and identifies an area including lot 7 (as well as the balance of the plaintiff's former landholding and the Squarcini land) as "additional regional open space including rural landscape and conservation areas".
The preservation of remnant bushland within the metropolitan area is a planning issue which has had increasing significance in recent years. Apart from the MRP, it has received attention in other planning strategies and policy documents including the Urban Bushland Strategy 1995, Bush Plan 1998, and an amended version of Bush Plan known as Bushland Forever. Furthermore, a State Planning Strategy issued by the defendant in 1997 included the following provisions:
"Protect landscape, open space and public access.
Consideration of public open space should be a key consideration in all types of planning. It provides breaks between settlements, ecological sanctuaries and significant recreational reserves. Where population growth is occurring additional resources will be required to ensure sensitive areas are protected. In addition, in view of the size of the State and the extent of fragile areas, consideration must be given to alternatives to land acquisition as a means of securing conservation.
Criteria for plans:
•Ensure that significant landscapes are identified and protected.
•Ensure that development proposals incorporate measures to retain landscape elements and vegetation.
•Ensure that public access is secured to key recreation areas."
Following the decision of the Minister on 15 June 1995 allowing the plaintiff's appeal in respect of the amended subdivision, the defendant took steps towards reserving lot 7 for parks and recreation. This reservation became effective on 30 October 1996 as part of a second "omnibus amendment" to the NWCRS.
Subsequently, the parties entered into negotiations in an attempt to agree the terms on which the defendant would acquire lot 7. For this purpose the plaintiff provided the defendant with a hypothetical plan of subdivision, dividing lot 7 into seven four‑hectare lots. By a letter in response dated 12 August 1997, the Ministry for Planning advised the plaintiff's town planning consultants that for valuation purposes "it is not unreasonable to assume that the property could be subdivided as shown on the hypothetical plan subject to some minor boundary changes" as well as other conditions, including:
"4.All lots being provided with an area of at least 1000 m²(building pad) and a vehicle accessway from a public road at a level which provides flood protection and the construction of an effluent disposal system with at least a two metre vertical separation from the maximum predicted groundwater level.
5.Identification and protection of vegetation on the site worthy of retention prior to site works.
…
8.The provision of strategic firebreaks around the land (that is, along the State Forest boundary) and within the individual lots.
9.No clearing of any vegetation except for roads, firebreaks, driveways and building pads."
However, by a subsequent letter dated 27 January 1998 the Ministry for Planning qualified the above concession by stating:
"The Ministry's planning officers assumed based on normal planning guidelines that for valuation purposes it would not be unreasonable to assume the property could be subdivided as shown on your hypothetical plans subject to some minor boundary changes. However, concerns were raised by the Ministry's valuers when considering this assumption in conjunction with the Hon Minister for Planning's letter of approval, dated 15 June 1995, of your client's subdivision for the former Lots 1577 and 1578."
The parties were unable to agree on the terms of acquisition, and on 27 May 1999, the plaintiff lodged an application for development of lot 7, seeking approval for a single residence and "9,000 square metres clear fell for proposed landscape garden". On 10 November 1999 the defendant refused this development application, and the plaintiff consequently sought compensation for injurious affection. On 19 April 2000 the defendant responded to this claim for compensation by electing to purchase lot 7, and this in turn has given rise to the present proceedings.

The provisions of the "Scheme" which should be disregarded

Consistent with the principles I have outlined, it is necessary to identify those provisions of the Scheme which had a direct bearing in restricting further subdivision of lot 7, or which can properly be regarded as a step in the process leading to its reservation and acquisition.
In my opinion, each of the Corridor Plan, the Rural Small Holdings Policy Study, Metroplan, the State Planning Framework Policy, the Metropolitan Rural Policy 1995 (other than for fig 8), the Urban Bushland Strategy (together with its successor plans), and the State Planning Strategy, fall outside the above categories. Each of these strategies and plans outlined very general policy requirements which have applied to the whole of the metropolitan area.
I consider that the first step in the process which led to the reservation of lot 7 was the North‑West Corridor Structure Plan in 1992. That identified an area including lot 7 as an area of "special rural character and sensitivity" to be the subject of a detailed study to determine "whether any or all of the land should be reserved for parks and recreation".
This process was continued by the 1994 amendment to the MRS which rated the area including lot 7 as a "Priority 1 Conservation Zone" (consistent with Bowman Bishaw Goreham's findings during its mapping study earlier that year.)
There then followed the 1995 "Omnibus Amendment" and the defendant's refusal of the plaintiff's initial subdivision application. As a result of the plaintiff's appeal to the Minister, the land comprising lot 7 was finally identified as an area that should be reserved and acquired by the defendant for purposes of conservation.
Clearly each of the above planning policies and decisions leading up to the ultimate reservation of lot 7 should be disregarded for the purposes of valuation.

The environmental characteristics of lot 7

It is common ground that lot 7 is heavily vegetated with Banksia woodland in very good to excellent condition. The land form is an undulating sand dune system with an area of high elevation (which nevertheless is slightly lower than some of the subdivided portions of the plaintiff's former landholding to the west).
It is fair to describe lot 7 as forming part of a "link" between Lake Jandabup and Gnangara Lake as depicted in the aerial photograph on page 17 of Exhibit 2.2. However, the photograph clearly shows that the "vegetation corridor" has been significantly compromised by subdivision of other areas forming part of the link, particularly in the southern portion.
I understand that it is also common ground that lot 7 forms part of a "significant area of the southernmost areas of the Bassendean Complex North Transition vegetation" as reported by Bowman Bishaw Goreham in 1994. The reference to a "vegetation complex" is a reference to "an association of like vegetation species occurring on similar land forms and soil environments" (see Mr Wells' evidence at t 77).
Exhibit 2.4 is a map of the various vegetation complexes which extend north from Perth. It can be seen that there are approximately eight discrete areas of the Bassendean North Transition Complex (designated as "No "45") and that lot 7 is located in the most south‑western of these areas.
Further evidence as to the environmental characteristics of lot 7 has come from two expert witnesses being Martin Richard Wells (an agricultural soil scientist with expertise in land resource surveys who was called by the plaintiff), and Malcolm Eric Trudgen (a botanist and environmental consultant called by the defendant.)
Mr Wells is not a qualified botanist but he does have expertise in broad‑scale mapping of land forms, soils and vegetation associations. In September 2004 he was asked by the plaintiff's solicitors to provide an opinion as to whether lot 7 had any unique environmental significance. In response, Mr Wells provided a "report on vegetation" (Exhibit 2.2) which concluded as follows:
"Addressing the question "to what extent does Lot 7 have some unique environmental significance?", it is concluded that even though the major part of the land contains vegetation of very good to excellent condition (Trudgen, 1993), it has no unique environmental significance apart from forming part of an incomplete vegetation linkage between Lake Jandabup and Lake Gnangara.
In any event, development of Lot 7 for rural small lots in accordance with the attached plan would not necessarily have compromised vegetation linkage values. This is because in common with the remainder of the former land holding (Lots 1577 and 1578), and for land south of Joyce Road within Planning Policy Area No 6 of the City of Wanneroo Interim Rural Strategy, approval for subdivision could have been granted subject to conditions requiring the delineation of building envelopes and the protection from clearing of all other vegetated areas apart from those needed for firebreaks. The vegetation linkage would therefore remain substantially intact."
In coming to the first of these conclusions, Mr Wells relied primarily upon a comparative analysis of the vegetation assessments and surveys of other experts in previous years. These included studies of vegetation complexes (Heddle et al 1980) and of floristic community types (Gibson et al 1994) which had assisted in the selection of regionally significant bushland areas as identified in Bushland Forever. Mr Wells also paid particular regard to the more detailed "Vegetation Mapping Units" delineated in Mr Trudgen's East Wanneroo Natural Resources Mapping Study conducted in 1993.
The study conducted by Gibson in 1994 had involved a survey of the plant communities present at 509 widely dispersed plots on the Swan coastal plan south of Gingin Brook. These were then categorised into a total of 43 "floristic community types or subtypes" of which only three (types 22, 23a and 23b) were found to occur within different areas of the Bassendean North Transition Vegetation Complex.
For the purpose of coming to his opinion, Mr Wells compared these three floristic community types with the four vegetation mapping units as surveyed by Mr Trudgen on lot 7. By this means, Mr Wells made the assessment that the vegetation on lot 7 "corresponded best" to community type 23b.
Mr Wells also produced analytical data to show that vegetation community type 23b is known to occur in 13 plots within areas of State Forest, one plot within a local government reserve, and in seven plots on vacant Crown land. Accordingly, he concluded that the vegetation on lot 7 did not have any unique environmental significance.
Mr Trudgen takes issue with Mr Wells' analytical method. According to him, the correlation between floristic community types and vegetation mapping units is "notoriously poor". There are two main reasons for this:
"Firstly, the floristic community types defined by Gibson … are very high order units, so that their variability is very high. Secondly, they are defined on a different basis to mapping units … using quite different methodologies."
Mr Trudgen also takes issue with the significance of Mr Wells' opinion that lot 7 has "no unique environmental significance". In this regard, Mr Trudgen has testified that:
"Assessment for reservation of areas for conservation purposes is not primarily about 'uniqueness'. The most important underlying principle for assessing conservation value is representation. This includes representation of the unique, but more importantly it includes representation of the common, average and uncommon, but not unique. The concept is that we should protect a proper representation of the biological attributes (biodiversity) of nature. While representation is the most important principle for selection areas for conservation purposes, it is not the only criterion, with other principles being that we should select areas in a way that facilitates the long‑term survival of biodiversity and we should select, or set aside, sufficient areas to facilitate long‑term survival of biodiversity."
Mr Trudgen makes the further point that the underlying goal of Bush Forever and related government strategies is the reservation of not less than a 10 per cent representative sample of each vegetation complex, with a preference that such 10 per cent representation be within the metropolitan area. Accordingly, Mr Wells did not apply the selection methodology of Bush Forever when coming to his opinion that lot 7 lacks "unique environmental significance".
Mr Trudgen was an impressive witness, and I have no hesitation in accepting his criticisms of Mr Wells' methodology. However, in fairness to Mr Wells, the approach that he took was dictated by the question that was asked by the plaintiff's solicitors. The plaintiff's solicitors in turn were obviously concerned to know whether lot 7 had any "prior ineluctable quality", which concern was quite understandable given the legal significance of that issue.
In the end, the evidence does not show that lot 7 has any "prior ineluctable quality" such as the presence on it of the rare bronze coloured flower form of Banksia menziesii. However, the evidence does establish that lot 7 has environmental and conservation significance in that it is a remnant piece of bushland representative of the southernmost areas of the Bassendean North Transition Vegetation Complex which is in very good to excellent condition.
I accept Mr Trudgen's evidence that at the time of his study in 1993, the land now the subject of lot 7 was also part of a significant vegetation link between Gnangara Lake and Jandabup Lake. The protection of such linkages is one of the policy aims of Bush Forever, for the reason that:
" … organisms don't just stay in one place, they move about. In the process of moving about they carry pollen, seeds, their genetic material if they're animals. So linkages are important because they allow the movement of genetic material basically between places. That helps populations of organisms, plants, animals, fungi, to survive. Or if a particular species becomes locally extinct, say because of a very severe fire, it allows reintroduction of that species." (Mr Trudgen's evidence at T 172).
Furthermore, the linkage also had significant landscape value and helped to protect the quality of water flowing into wetlands to the west, including Jandabup Lake. Selection of reserves that will facilitate protection of water quality in wetlands is yet a further principle of Bush Forever.
However, Mr Trudgen has not been back to lot 7 and the surrounding areas that he studied in 1993, and his evidence indicates that he is unaware of the extent of subdivision that has occurred since then. In my view, this subdivisional activity (on areas including the Squarcini land and the plaintiff's former landholding) has clearly compromised and reduced the conservation significance of the vegetation linkage between the two lakes.
Mr Wells and Mr Trudgen are also at odds on the question whether the conservation values of lot 7 could be sufficiently protected by the imposition of conditions on any subdivision. In this regard, the evidence shows that the defendant frequently imposes restrictive conditions on subdivision of private rural land in an endeavour to protect significant remnant bushland. Such conditions generally include the delineation of building "envelopes" of a limited size, and the prohibition of clearing of remaining vegetated areas other than for driveways and firebreaks.
The imposition of such conditions when approving subdivisions is consistent with Metroplan and with the "special controls" referred to in Part 5.6 of the Metropolitan Rural Policy 1995. In the present instance, Mr Wells considers that conditions of this type would adequately protect the conservation values of the bushland on lot 7. However, Mr Trudgen has testified that this is "simply not true". According to him:
"Subdividing areas, even with clearing controls, and even in the unlikely event that they were effective (which is very unlikely in the long term), brings to bear substantial degrading impacts on the vegetation. These include: increased weed invasion; pressure for regular burning at frequencies that mean that the vegetation cannot fully recover, trafficking by people and animals at greater density than in areas not subdivided; the introduction of pollutants such as fertilisers, insecticides and herbicides; increased wind velocities from the inevitable roads. The cumulative impacts of such factors over time is considerable, and is deleterious to the fauna, vegetation and fauna of natural areas. Rural subdivision with clearing control to preserve conservation values is an attempt by the planning process to have its cake and eat it too, and as such is a very poor substitute for proper conservation areas." (Page 17 of evidence‑in‑chief).
In my view, Mr Trudgen's observations accord with common sense, and are also corroborated by the aerial photographs of lot 7 and the surrounding areas which are Exhibit 1.2 and figure 4 in Exhibit 2.2. Despite the imposition of protective conditions on subdivision of the Squarcini land and the plaintiff's former landholding, the damaging effects of human activities on vegetation cover are plain to see.
Nevertheless, and even though the planning process probably does want "to have its cake and eat it too", the fact remains that at all material times government policy has allowed the subdivision of significant remnant bushland subject to restrictive conditions. This policy may well be a poor compromise from an environmental point of view, but it is no doubt the result of budget constraints and the defendant's inability to purchase all areas of private land that are environmentally significant. For present purposes, all that matters is that government policy does allow such subdivisions.

Other factors relevant to subdivision

Consistent with the policy documents referred to earlier, there are a number of other factors which need to be taken into account when assessing whether lot 7 was suitable for subdivision as at 18 April 2000. These include the landscape (as distinct from environmental) values of the land, the need to protect water quality in the Gnangara water mound, and the minimisation of risk due to fire hazard.
The evidence in general does show that lot 7 has landscape value, but not to any greater extent than those other areas of land in the vicinity which have already been subdivided. The subdivision of lot 7, subject to restrictive conditions against clearing, would leave most of the major vegetation intact. To my mind, it is self‑evident that subdivision on this basis would provide adequate protection of such landscape values.
As I understand the evidence, the protection of the Gnangara water mound has been partially achieved by the reservation of the Gnangara pine plantation for future parks and recreation. A further policy response has been to restrict the subdivision of overlying areas of private land to lots with a minimum size of 4 hectares. Accordingly, the subdivision of lot 7 into 4 hectare lots combined with conditions restricting clearance of vegetation, would have been consistent with government policy on protection of the water mound.
As with all bushland subdivisions, the subdivision of lot 7 into 4 hectare lots would have required adequate measures to be taken for protection against fire. The presence of the nearby Gnangara pine plantation magnified the risk from wildfires. The minimisation of this risk would have required not only firebreaks, but the clearance of "hazard reduction zones" in excess of the 1000 square metre building envelopes. These measures obviously would have had the tendency to compromise the environmental and landscape values of lot 7, but (on the evidence) not to an extent sufficient to prevent subdivision subject to restrictive conditions.

Whether lot 7 could have been subdivided

Expert town planning evidence has come from Gregory Howard Rowe and Vincent Michael McMullin. Mr Rowe is a consultant town planner, and Mr McMullin is employed by the Department for Planning and Infrastructure. These two witnesses have provided opposing opinions as to whether an application for subdivision of lot 7 as at 18 April 2000 was likely to be granted, and each has based his opinion upon an assessment of the relevant planning strategies and policies.
These witnesses have in effect given opinions as to the very question that the Court must answer and it would be inappropriate for me to determine that issue by simply accepting one or other of their views. Nevertheless, I should take account of all matters canvassed by those witnesses in coming to my own opinion as to whether lot 7 could have been subdivided.
Mr McMullin's opinion that an application for subdivision would not have been approved is based, in part, on matters that I am required to disregard pursuant to s 36 of the Act; (eg, the Minister's decision on appeal that lot 7 should be set aside for future reservation). Notwithstanding this, Mr McMullin has provided a very useful catalogue of extracts from all of the relevant planning policies and strategies.
In my view, the evidence in general shows that a strict application of those policies and strategies (other than those to be disregarded pursuant to s 36) may well have resulted in an application for subdivision of lot 7 as at 18 April 2000 being refused. However, the evidence also shows that the government's planning policies and strategies were not always strictly applied. In this regard, the most relevant examples are the Squarcini land and the subdivided portion of the plaintiff's former landholding. Each of these areas formed part of the link between Lake Jandabup and Gnangara Lake, and (on the evidence) had vegetation with a conservation value equal to that on lot 7. The evidence does not provide any basis for differentiating lot 7 from those other properties (even allowing for additional government policies that issued during the period until 18 April 2000).
The evidence does not inform me whether the policy goal of reserving not less than 10 per cent of each vegetation complex had been achieved in respect of the Bassendean North Transition Complex as at 18 April 2000. However, Mr Wells contends that vegetation similar to that on lot 7 is known to occur on a total of 21 plots within government reserves. It is also Mr Trudgen's evidence that the Bassendean - North Transition Vegetation Complex "is one of the less impacted complexes overall" albeit with most of what remains being outside the Perth metropolitan region (page 11 of evidence‑in‑chief).
Against this background, it is significant that the Ministry for Planning, by letter dated 12 August 1997, advised the plaintiff's town planning consultants that for valuation purposes "it is not unreasonable to assume that the property could be subdivided". Furthermore, the Ministry later withdrew this advice because it had been based on "normal planning guidelines" and had overlooked the terms on which the plaintiff's appeal had been granted by the Minister on 15 June 1995 (a matter which must, of course, be disregarded for present purposes). Obviously, these letters from the Ministry provide powerful corroboration of the plaintiff's case.
For all of these reasons I have come to the conclusion that a hypothetical vendor and purchaser, perfectly acquainted with the land and all of its characteristics as at 18 April 2000, would have considered it to be suitable for subdivision (subject to the usual restrictive conditions). The plaintiff has satisfied me of that fact to the required standard on the balance of probabilities.
Accordingly, I find that the value of lot 7 at the date of reservation on 18 April 2000 should be determined to be the sum of $900,000.