R F Thompson (Qld) Pty Ltd v Noosa Shire Council - [2014] QPEC 17

PLANNING & ENVIRONMENT COURT
OF QUEENSLAND

CITATION:

R F Thompson (Qld) Pty Ltd v Noosa Shire Council [2014] QPEC 17

PARTIES:

R F THOMPSON (QLD) PTY LTD (ACN 010 055 839)

(Appellant)

v

NOOSA SHIRE COUNCIL

(Respondent)

FILE NO:

4533 of 2000

DIVISION:

Appellate

PROCEEDING:

Appeal against respondent council’s refusal of compensation

DELIVERED ON:

24 April 2014

DELIVERED AT:

Brisbane

HEARING DATES:

13, 20-23, 26-30 August , 02-06, 09-13 September, 21-25, 28-31 October 2013

17-21, 26-28 February 2014

Site Inspection 16 August 2013

JUDGE:

Robin QC DCJ

ORDER:

Appeal dismissed; liberty to apply

CATCHWORDS:

Local Government (Planning and Environment) Act 1990 s3.5, s8.2 -

PLANNING AND ENVIRONMENT-Appeal against respondent Council's refusal of compensation for injurious affection asserted by coming into force of a new strategic plan - preferred dominant land use (PDLU) mapping and descriptions of designations changed - open space PDLU designation (with wording allegedly more restrictive of development) significantly expanded to overlie more land zoned Residential High Density - former Urban Area PDLU also reduced where it overlay Future Urban zoning and designated Detached Housing for future - zonings all unchanged - symbol identifying site for potential tourist development removed - whether site's development potential, consequently value, was restricted to a similar extent by the original strategic plan and the continuing planning scheme given provisions in them protective of the environment, local and visual amenity, etc and limiting intensity of development - relevance of Council approval 9 years before of rezoning (not subsequently endorsed by the Governor-in-Council) which would have opened the way for intensive development of the whole site - whether council bound by intimations that a development approved prior to original strategic plan coming into effect complied with its objectives , relevance of a more contemporary approval for the adjoining property, which shared an environmentally sensitive wetland - relevance of subsequent Council assessment of various development applications over the site by reference to the new strategic plan alleged by the appellant to show that it restricted development potential, alleged by the respondent to show it did not - expert evidence as to advice that would have been given to a hypothetical prudent purchaser (by unconditional cash contract) immediately before and immediately after the "relevant date" from ecologists (flora and fauna), engineers (geotechnical, hydraulic, traffic and general civil), visual amenity experts, economists, architects, planners and valuers bearing on the site's highest and best use before and after - changing legislative regimes, Government, community and court attitudes to environmental issues considered - to the extent that development scenarios relied on by the appellant required rezoning, section 3.5(5) did not assist its claim (the “Sparke point”)

COUNSEL:

C L Hughes QC, B D Job and J Lyons for the appellant

G J Gibson QC, R S Litster QC and N J Kefford for the respondent

SOLICITORS:

Geoff Klooger & Associates, then Connor O’Meara Solicitors for the appellant

Wakefield Sykes for the respondent

Contents

Page	Paragraph
Introduction	4	[1]
General principles in compensation matters	5	[4]
Quantifying the appellant’s claim	9	[9]
The Site: “Area A” and “Area B” identified	10	[12]
The new and former strategic plans	11	[13]
Exhibit 4	12	[17]
A mistake in the strategic plan mapping?	13	[18]
The appellant’s before and after cases	14	[21]
Legislation providing for strategic plans and planning schemes generally	16	[26]
Council’s opportunity to adopt, then replace its strategic plan taken up	20	[30]
Zoning	21	[31]
Amendments to town planning scheme December 1997	24	[33]
Population Density and GFA restrictions in zones	28	[37]
Strategic Plan environmental objectives added to zone intents	30	[39]
“Inordinate levels of impact” disfavoured	30	[40]
Strategic plan prior to the “relevant date”	31	[41]
The 1997 Shire of Noosa strategic plan	38	[43]
The experts	42	[45]
The planners	43	[47]
Strategic plan provisions specific to the site	46	[52]
Mr Venn’s analysis of prospects of rezoning	59	[73]
Increasing importance of environmental matters: The courts	66	[78]
R221 and the Council’s attitude to it	81	[98]
Noosa Sanctuary approval	86	[108]
Height limits at Noosa Sanctuary	89	[110]
R527	91	[118]
Council’s assessment of development applications for the site made after the relevant date	100	[127]
R22423: Exhibit 178	100	[127]
Successful development applications for the site from December 2002	108	[141]
The geotechnical experts	120	[150]
Flooding	126	[157]
Flora and fauna constraints: Dr Olsen and the ecologists	131	[163]
Legislative changes before the relevant date	134	[169]
New Council policies	135	[171]
Wet heath or sedgeland?	139	[182]
Terrestrial fauna	151	[187]
Aquatic fauna	152	[191]
Acid sulphate soils	160	[204]
Storm water and water quality	163	[210]
Visual amenity	169	[216]
Traffic matters	184	[235]
The engineers	188	[248]
Economics: Mr Duane and Mr Norling	192	[260]
The architects	197	[272]
The valuation evidence	208	[292]
Alleged inadequacy of the valuation evidence	214	[300]
The Sparke point	217	[305]
Conclusion	222	[314]

Introduction

This appeal is brought against the Council’s refusal of an application for compensation under s 3.5 of the Local Government (Planning and Environment) Act 1990 (PEA). For a time, in consequence of amalgamation of local governments, the respondent was Sunshine Coast Regional Council. Following the amalgamation, by order of the court the proceeding was returned to its original constitution and title. The Council acknowledges that any liability for compensation established will be its responsibility. Paragraph 11 of the Notice of Appeal states:

While the claim for compensation lodged was originally … $34,629,000.00, more detailed analysis of the relevant injurious affection confirms that compensation ought to be assessed in the sum of $52,904,000.00.”

The claim is based on the coming into force at “the relevant date”, namely 5 September 19997 of a new Strategic Plan which changed the preferred dominant land use (PDLU) designations of the appellant’s site. If the designations represented the be-all and end-all of development potential, the appellant would establish injurious affection. The appeal was commenced in 2000, but by reason of s 6.1.50 of the Integrated Planning Act 1997 (IPA) and s 819 of the Sustainable Planning Act 2009 (SPA) it is to be determined under the PEA. By s 3.5(1) where a person’s interest in land is injuriously affected by the coming into force of a provision contained in a planning scheme (or a of a new prohibition or restriction) compensation is payable by the local government in accordance with the section. Subsection (8)(a) is:

“the amount of compensation is (subject to paragraphs (b), (c) and (d)) to be an amount equal to the difference between the market value of the interest immediately after the time of the coming into operation of the provision of the planning scheme by virtue of the operation whereof the claim for compensation arose and what would have been the market value of that interest if the provision had not come into operation;”

In an appeal of the present kind instituted today, the Council would bear the onus of showing it should be dismissed under s 493(7) of SPA, which re-enacts s 4.1.50(6) of IPA. The PEA provided to opposite effect in s 7.1A(2B), the appellant being an “applicant” seeking compensation, and so described in s 3.5(4)(d) and (5), although called a “claimant” elsewhere in s 3.5; the onus is placed on the local government if its assertion that compensation is not payable is based on subsection (4)(d):

subject to subsection (2), where an interest in premises is affected by a planning scheme which by its operation prohibits or restricts the use of land or the erection of use of a building or other structure thereon for a particular purpose, unless the applicant establishes that the applicant had a legal right immediately before the provision in question of the planning scheme came into force to use the land or erect or use a building or other structure thereon for the particular purpose which is so prohibited or restricted;

See subsection (6). Such is the situation here.

General Principles in Compensation matters

I am content to accept the appellant’s description of the “general principles” of compensation in the written outline of submissions[1]:
[1]Footnotes and formatting omitted

“40. At the relevant date the Local Government (Planning & Environment) Act 1990… was in force.
41. Section 3.5 …. relevantly provides:
“(1)       Where a person—
(a)         has an interest in premises within a planning scheme area and the interest is injuriously affected—
(i)          by the coming into force of any provision contained in a planning scheme; or
(ii)         by any prohibition or restriction imposed by the planning scheme; or
…
the person is, subject to compliance with this section, entitled to obtain from the local government compensation in respect of the injurious affection or expenditure and may claim that compensation in accordance with this section.”
It is s. 3.5(1)(a)(i) that is the focus in this case.[2]
[2]As appears below, the appellant’s attempt to avoid confronting s 3.5(4)(d) by distancing its claim from s 3.5(1)(a)(ii) fails.
42. A claim for compensation:
(a) must be assessed having regard to the matters listed in s. 3.5(8)…; and
(b) the circumstances when compensation is not payable are set out in s. 3.5(4)…
43. Section 3.5(8)(a)…. makes it clear that the amount of compensation is to be equal to the difference between the “market value” of the interest immediately before the time of the coming into operation of the relevant planning scheme provision compared to what would have been the “market value” if the planning scheme provision had not come into operation. The focus here, therefore, needs to be immediately before 5 September 1997 (and ignoring the draft 97 SP) and on the other hand immediately after 5 September 1997 when the new strategic plan was in force.
44. The notion of “market value” was explained in the often-quoted case of Spencer v The Commonwealth (1907) 5 CLR 418 where Griffith CJ observed at 432:
“In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring “What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?” It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.”
and further at 441 where Isaacs J observed:
“To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.”
45. The Court would not lose sight of the fact that this case is a compensation case rather than a town planning case. Accordingly the Court is concerned with determining what a prudent purchaser would pay. The following further considerations are relevant:
(a) as the Court is considering provisions of successive strategic plans within a planning scheme, the ordinary principles relevant to construing planning schemes would apply;
(b) the assertions of the Council, as a party now potentially liable to pay compensation, should be treated with appropriate reserve;
(c) unlike in revenue cases, in a compensation case, doubts are resolved in favour of a more liberal estimate as was explained by Dixon J in Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of SA Ltd (1947) 74 CLR 358 …
(d) a number of other relevant principles are set out in Kettering v Noosa Shire Council [2007] QPELR 605 at 622 where this Court observed:
(i)   “The question to be determined is not whether a particular development application would have been approved or refused. The question is whether, in the minds of a hypothetical vendor and purchaser, there was potential for the additional development components identified by Kettering: cf Fast Signs Pty Ltd v Gladstone City Council [2005] QPELR 711 at [61], [62], [68] and [71].
(ii)In that context, the hypothetical purchaser described in Spencer is not to be taken to be a dewy-eyed dreamer who will take the most optimistic view of all things, and nor is the purchaser to be regarded as a wilting lily who will proceed with such pessimism that each potential problem will be seen to result in failure: Yalgan Investments Pty Ltd v Albert Shire Council (1997-1998) 17 QLCR 331 at 341-342.
(iii)   A related point is that where the highest and best use is not a use actually in existence, and planning approval has not been obtained at the relevant date for that highest and best use, the vendor and purchaser must necessarily engage in some prediction about the prospect of obtaining approval. To do so they will not engage experts to work up a development application to a high degree of detail, but will undertake those investigations necessary to produce a state of satisfaction that the highest and best use is achievable: see Yalgan at 342 and Pajares v State of Queensland (2003) QLC 0044 at [74]-[80].
(iv) Given that the hypothetical prudent purchaser is not a dewy-eyed optimist or a wilting lily, he will accept some risk in realisation of the highest and best use. That risk will be reflected in the value: see Fast Signs at [68]-[69] and Heavey Lex No 64 Pty Ltd v Chief Executive Department of Transport (1999) 20 QLCR 29 at 347.” ”

As to 45(b) reliance was placed on the willingness explained in Garbler v Redland Shire Council [2001] QPELR 442 at 464 [59] to “accept the force of Mr Hughes’ proposition that the Council’s assertions, as those of a party now potentially liable to pay compensation, should be treated with appropriate reserve”.

There could be added to the adopted paragraphs of the appellant’s arguments in that proceeding identified in (d) (60-63, which constitute (i) to (iv) above) paragraph 49:

“The enquiry is not the same as that which arises in an appeal about development approval. The question is not whether an approval would have been given. Rather, because it arises in a compensation context, it requires consideration of reasonable expectation, involving a hypothetical development scenario (not an actual development application), as an intrinsic element of assessing market value.”

Apropos 43 above, it was agreed that the hypothetical contract of sale was an unconditional one (with a completion period of two or three months – it did not seem to matter which), so that the hypothetical purchaser, a “prudent” one, having acquired title and outlaid the contract price in full, took the risk of approvals to permit contemplated development not eventuating. Not only the content or existence of any draft of the new strategic plan must be ignored, but also the investigations and ensuing reports that underlay it: in other words, the only strategic planning by the Council that the putative vendor and purchaser would take into account be that embodied in the existing 1988 Strategic Plan.

The relevant principles emerging from the decision of Judge Quirk relied on by the appellant, Lubrano Pty Ltd v Brisbane City Council [1995] QPLR 81 are clarified in Tonak Pty Ltd v Cairns City Council [2003] QPELR 373 in which the Council’s defence of a compensation claim relied in part on its “Policy 4.06”: Judge White said at [20]:

It is also submitted for the Appellant that even if valid the policy should be ignored. This was on the basis that it was preliminary to the coming into effect of the 1993 Scheme and therefore to give it any weight would be to give some effect to the provisions of the 1993 Scheme. It is submitted that this would be contrary to the requirement that before value is to be assessed on the basis that the 1993 Scheme did not come into effect. Reliance was placed upon the judgment of His Honour Judge Quirk in Lubrano Pty Ltd .v Brisbane City Council (1995) Q.P.L.R 81. In that case His Honour adopted the view of Waddell J in Jones v. Gosford Shire Council (1975) 33 L.G.R.A where the following submission was adopted: -
“It is submitted for the plaintiff that in determining the unaffected value of the land the effect on value of the draft planning scheme and the provisions of Div.7 of Pt 12A of the Local Government Act relating to interim development should be ignored. It is said that as the purpose of s342AC as applied to a case such as the present is to provide compensation for a reduction in the value of the land caused by a restriction that purpose should not be defeated by taking into account the reduction in value, which has already taken pace because of the prospect of the imposition of the restriction.”

I respectfully agree with everything said by their Honours in those cases. However, in my view they are to be distinguished from the present case. The statement in the Jones case seems to me to refer to the effect which knowledge of the impending planning restriction would have in the market place rather than any effect any existing or interim planning restriction would have had on the prospects of development of the subject land. In the Lubrano case His Honour was dealing informal statements of planning intent which His Honour, rightly with respect, concluded should be given no weight.
[21] In this case once it is accepted that Policy 4.06 was validly introduced it is given formal statutory status pursuant to the provisions of the Local Government Planning and Environment Act although it does not form part of the planning scheme itself. See s2.6. Subsection 4.4(3) sets out the various matters to be considered in assessing an application to amend the planning scheme. A local planning policy is not expressly mentioned, although it would no doubt be potentially included in para (1) namely “such other matters, having regard to the nature of the application to amend the planning scheme may give such weight as it thinks fit to a valid local planning policy.

The appellant says that its case is an unusually strong one, apart from what it contends was clear abandonment in the 1997 instrument of a pro-development line in the 1988 instrument: it can point to Council approval of rezoning for large-scale development on the site in 1988, said (by the Council) to be consistent with the objectives of the 1988 Strategic Plan, although applied for in 1987 before there was any strategic plan governing the application (R221); it can also point to a relatively contemporary approval of similar development, on a site immediately adjacent known as Noosa Sanctuary. This was approved by the Council in September 1995, leading to a developer appeal against conditions compromised so as to lead to a consent order of the court in June 1997. The appellant in Barns v Maroochy Shire Council [2010] QPELR 419 could point to nothing equivalent. Much effort was expended by the Council – and successfully in the end – to demonstrate that those approvals would not have had the encouraging or comforting effects that were suggested by the appellant on the mind of a prudent potential purchaser appropriately advised in the before scenario in evaluating the site’s development potential.

Quantifying the Appellant’s claim

To support its 45(c) the appellant relied on the short concurring judgment of Dixon J:

I have had the advantage of reading the judgment prepared by Williams J. and agree in it. I should like, however, to add for myself that there is some difference of purpose in valuing property for revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While this difference cannot change the test of value, it is not without effect upon a court’s attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate. But even so I cannot find grounds for estimating the value of the shares below thirty-seven shillings each.

but shorn of the first and last sentences, also of the fourth – which tends to qualify the recommendation of generosity. The present compensation case may be distinguished from one arising from compulsory acquisition, where the owner loses all or some of the land. The appellant’s title was not affected. The valuers revealed that it sold its land, apparently advantageously, for $95 million in 2005 in a transaction too late to be considered as a comparable sale, and a transaction no doubt affected by the currency of valuable development approvals which the purchaser could (and did) avail itself of. (The Council says that those approvals (from 2003 or later) which are referred to in the 2005 contract (Exhibit 220) illustrate what the hypothetical prudent purchaser would have anticipated immediately after the relevant date as feasible development options. The appellant’s case is that, on the contrary, expectations would have been that the 1997 Strategic Plan would be relied on by the Council to reject development, as allegedly illustrated by the assessment of a development application known as 22423DA in June 2002 (Exhibit 178).)

For purposes of the “before” case, the appellant’s valuer, Mr Brett (less sanguine that the appellant about the development approvals a potential purchaser could confidently anticipate) assessed the value before the relevant date as $41.9 million, compared with $14.45 million immediately after the relevant date. His counterpart, Mr Slater persuasively observed that, different as the circumstances were, the price achieved in 2005 suggests there is something wrong with the “after” valuation. There was no evidence about general movements in the property market in Noosa before or after 1997. The only set of numbers for changing values in Noosa afterwards was Mr Brett’s sales evidence for Noosa Springs October 1996 to June 2005 (Exhibit 214 p 18), which does not suggest even a doubling of values.

Mr Brett adhered to his $14.45 million, but provided alternative values for the “before” case, which might be relied on if the court on various bases considered that development potential (and accordingly market value) in the “before” case was less than he surmised, based on architectural opinions of what was feasible. Thus Exhibit 228 is a reworking in which the before value is $37,730,730. An issue has been whether through Mr Brett or otherwise the appellant has provided a useable formula or enough evidence to support calculation by the court of an award of compensation on the basis of development scenarios not specifically assessed by any valuer. There are no numbers from Mr Slater, who considered that suggesting ultimate dollar amounts for values of the site was an irrelevant exercise, given his underlying view (broadly consistent with the opinions of Mr Robinson, the architect and Mr Venn, the planner) that the before and after values would be the same, changes in strategic planning having no impact on the site’s development potential, as a properly advised hypothetical prudent purchaser would assess it.

The Site: “Area A” and “Area B” identified

The appellant’s land consists of some 37 hectares centrally located in Noosa Heads with a street address of Banksia Avenue and water frontage to the Noosa River system. The real property description as at 5 September 1997 when a new strategic plan came into effect (“the relevant date” for the purposes of s 3.5) was Lot 2 on RP 889602. I have found it helpful to visualise the site in terms of the “hexagon” of metropolitan France, Weyba Creek and Noosa Inlet reflecting the Bay of Biscay and the English Channel/la Manche; Banksia Avenue reflects the straightened-out frontiers with Germany, Switzerland and Italy, separated from the water frontage by the Belgian frontier. The last two sides of the hexagon, being the Mediterranean coast and Spanish border are amalgamated on the site as its straight east-west southern boundary. At the east of the site, there are two areas of high dunes, steep at the northern or western edges, treated in some planning documents as one with Noosa Hill; those two areas are separated by a low-lying corridor running from the “kink” in Banksia Avenue to the low, flat remainder of the site fronting Weyba Creek. The northern of the two dunal areas, which falls to Noosa Inlet, has been identified in the context of this proceeding as Area A, the southern one as Area B. Putative development scenarios are described in relation to these Areas. Begging a question, the flat area may be called the sedgeland.

The new and former Strategic Plans

On the relevant date, the Shire of Noosa Strategic Plan was gazetted. This instrument “affected” the land in various ways, including by particular provisions about it under the objective for the Preferred Dominant Land Use of Urban Semi-Detached & Attached Residential to “Protect sites for resort developments which focus on the Shire’s natural low key outdoor appeal and cultural values” (19.2.4, p 118). The issue is whether the land was affected “injuriously” in the sense of reduced in value: T M Burke Estates Pty Ltd v Noosa Shire Council [1998] 2 Qd R 448. The land’s zoning was not changed and remained as it had been under the 1985 and 1990 planning schemes for Noosa, said to be:-

“Open Space, 1.87 hectares
Residential High Density (RHD), 6.44 hectares
Future Urban (FU), 17.79 hectares
Non-Urban, 9.03 hectares and a separate area of 1.03 hectares.”

The earlier 1988 Strategic Plan had shown Future Preferred Dominant Land Uses, the entire water frontage of the site (to Weyba Creek and Noosa Inlet) and otherwise what might be called the “western half” being designated Public and Private Open Space, the balance of the land Urban Area, with an elongated oval-shaped symbol over the heart of the land generally (covering both designations) and that of its southern neighbour.

The 1997 Strategic Plan changed the Preferred Dominant Land Use Designations (PDLU) and the descriptions of them. Corresponding with the Residential High Density (RHD) Zone was “Semi-Detached and Attached Residential” (SD&AR), limited to 3.852 hectares[3] and “Detached Housing” limited to 7.756 hectares, as compared with the Future Urban (FU) Zone Area, being some 10 hectares greater in extent. Everything else, that is the bulk of the land came within “Open Space - Conservation and Waterway Protection” (OSC & WP), at once the explanation of the Public and Private Open Space PDLU area and of the Non-Urban zone on the one hand and on the other hand a reduction of the Urban Area PDLU and the aggregate RHD and FU zones. The Open Space zoned land separating RHD from FU which fronted Banksia Avenue essentially changed its PDLU on the relevant date from Urban to (Open Space) Conservation and Waterway Protection, which designation also came to be adopted for the Non-Urban zoned areas along Weyba Creek and Noosa Inlet. The foregoing summary involves some approximation, in that the boundaries assigned to the zones and to the two sets of PDLU designations do not coincide precisely. The tourist facility logo disappeared in the new Strategic Plan, but in effect remained, according to the Council. Its stance is that, notwithstanding the various provisions in the PEA mandating the refusal of an application for approval of a proposed development if it conflicted with “any relevant Strategic Plan” (see s 4.4(5A), s 4.7(5A), s 4.13(5A) and s 5.1(6A)), by reason of constraints affecting the land, from a standpoint of determining compensation as required by s 3.5(8)(a), what could be achieved by way of development of the land was not changed by the coming into effect of the 1997 Strategic Plan in a way that would affect the judgment of a prudent purchaser as to its value.
[3]Planner Mr Buckley’s estimate; the architects agreed on 3.374 hectares.

The planning schemes for Noosa, for purposes of this proceeding, have never contained provision, as encountered in some other planning schemes, excluding the Strategic Plan from consideration in assessing development applications. Thus, the Strategic Plans for consideration here must be accounted “relevant”. The 1988 (and Noosa’s first) Strategic Plan was gazetted on 13 February that year and, in the appellant’s case, there is much significance in the Council’s having approved, by decisions in the weeks and months following gazettal a particular rezoning application on the basis (to be reported to the Minister) that the proposal accorded with the objectives of “Council’s Strategic Plan”, necessarily the 1988 one. See Exhibits 8 and 9.

Exhibit 4

What goes before can be better understood by reference to exhibit 4, reproduced here with a note naming Mr Buckley added. It was tendered by Mr Hughes QC (leading counsel for the appellant) in his opening address as a litigation aid, as which it is useful. Unfortunately, it came to have more reliance placed on it by some witnesses than it deserved.

Area A is generally where the RHD zoning is shown; Area B is generally where the Detached Housing PDLU is shown. The term “shrinkage area” came to be used as a convenient way of describing the difference between “Area A” and the new “SD&AR PDLU”. Roughly, it corresponds with the south-western part of the RHD zoned land. The vice of exhibit 4, which caused mischief from time to time, was its depiction of the PDLU pushed too far back from Noosa Inlet.

A Mistake in the strategic plan mapping?

Mr Slater’s bold characterisation of the 1997 strategic plan boundary between the SD&AR and OS-C&WP PDLUs as a mistake, for all that it is unexplained and seems inexplicable, is rejected. From an early point in the appeal, long before Mr Slater gave evidence, Mr Hughes submitted that a mistake in designations was without consequences if a landowner was able to show injurious affection come the relevant date, albeit based on a mistake. Presumably he had in mind CMB No1 Pty Ltd v Council of Shire of Mulgrave [1997] QPELR 51, in which land that had recently been rezoned from Residential A to Local Shopping Zone following a consent order in the court in a conditions appeal was inexplicably shown as Rural Zone in the Town Planning Scheme Map when a new Town Planning Scheme for the Shire was gazetted two weeks later. The mistake was quickly rectified by the Council’s approaching the Department of Local Government, which fast tracked matters, leading to rezoning to the intended Commercial Zone, the Department waiving provision of an environmental impact statement. At relevant times, the site was under an uncompleted contract of sale for 5 million dollars, the parties to which made some adjustments (for example to the deposit amount) on being alerted to the mistake, without changing the sale price. The judge in this court considered that reference could not be made to events after the relevant date, producing a result he conceded was “somewhat less than satisfying in that the compensation which I have been required to assess appears to be greater than the loss actually sustained”, dealing with the valuation evidence in this way:

“ I fear that M Coonan has been overly influenced by the effective and very commendable way in which the Respondent did in fact deal with the problem which arose. The hypothetical exercise must be carried out as at the relevant time. Whether it would have been as apparent as he believes to prudent hypothetical parties faced with the gazettal on 17 December 1993 that matters would occur as they have is another matter entirely.
As Mr Stallman correctly pointed out it would have been obvious to a prudent and properly advised party that there were matters which were not entirely within the Respondent’s control. The new town Planning scheme, upon its gazettal, had, as a matter of law, an unfavourable impact upon land use rights which could be reversed only by prescribed procedures. Whether an application to return the land to an appropriate zoning would be able to be made (as it was) in a way that excluded opportunity for objection and appeal (e.g. by competing commercial interests) and whether the trouble and expense of a further Environmental Impact Statement would be able to be avoided was not at all clear at the relevant time.
Whether the problems in the settling of conditions of a rezoning which had earlier presented themselves might re-surface because of any change in the attitudes of the statutory authorities involved could not be known with certainty. That some other misadventure (such as was responsible for all of this trouble) might occur could not be discounted.
Against this background to suggest that the inclusion of the subject land in the Rural Zone on 17 December 1993 had a negligible effect on its market value is, in my view, to ignore reality. As it was, the matter moving as favourably as one night have expected, it was nearly six months before the land was once more in an appropriate zoning.”

The decision was reversed by the Court of Appeal, by majority: CMB No1 Pty Ltd v Cairns City Council [1999] 1 Qd R 1. The majority considered that “immediately” in s 3.5(8)(a) admitted of some flexibility, permitting, subject to limits, reference to subsequent events as confirming foresight, as Williams J put it at page 21, when he said (19-20):

“What the respondent appears therefore to be saying is that it is permissible, if not necessary, to have regard to hypothetical subsequent events in determining compensation, but one must ignore what actually occurred. There is nothing in the legislation, in my view, which forces one to accept that; it must generally be regarded as an absurd proposition”.

The matter was remitted to this court with an intimation that the dominant component of the compensation it had allowed was inappropriate, but without any other intimation as to which, if any, of the other components should be awarded. Both parties here referred to subsequent events, in particular to what Council officers said about or did under the 1997 Strategic Plan. This was done without reference to CMB. It has been considered subsequently, for example in Mio Art Pty Ltd v Brisbane City Council [2010] QLAC 0007, an appeal from which was allowed: Brisbane City Council v Mio Art Pty Ltd [2012] 2 Qd R 1. The headnote indicates that the Court of Appeal distinguished CMB which, however, I would regard as good law. The decision was not without precedent, reference being made to Thorpe v Brisbane City Council [1966] Qd R 37, where use was made of an offer made by the respondent Council two years after an acquisition.

In this case, there was no amendment, but we have a subsequent history of Council approvals for the site expressly based on the idea that the SD&AR designation and the RHD zoning were for practical purposes the same (following what looks like a strong “obiter” ruling against development outside SD&AR in exhibit 178): Exhibit 221ff. The idea of a mistake made in 1997, however, seems inconsistent with the Council’s rejection in that year of Mr Buckley’s submission on behalf of the appellant that boundaries of the zone and the designation should coincide: Exhibit 190. These matters will be canvassed at greater length below

The appellant’s before and after cases

The appellant never abandoned its ambit claim based on the entire site having potential to attract necessary approvals for the R221 proposal approved in 1988 or something similar, by 5 September 1997. Although such a development may have been achievable in engineering terms, for environmental reasons it would have been rejected. The Council needed to raise the environmental issues it did to put R221 out of contention: no witness supported it or anything like it as a possibility by the relevant date. The relevant witnesses identified various constraint lines on the site within which they considered development should be confined, giving rise to a revised “before” case. The appellant’s closing submissions (in bold type) argue that:

“414 At the end of the day, the Court would be satisfied that the highest and best use of Area A in the ‘before’ would be as the architects McKerrell and Robinson agreed, in accordance with McKerrell’s ‘before’ plan yielding a GFA of some 72,918m².”

There was less directness regarding Mr McKerrell’s before case for Area B; Mr McKerrell is mentioned only once in passing in paragraphs 435-450, reliance being placed on Mr Brett’s exhibit 26A; the 65,045m² of GFA propounded is no doubt based on Mr McKerrell’s work.

Area A and Area B have always been treated separately, in the former in the before case taking full advantage of the RHD zoning and in the latter of rezoning to Residential Medium Density. Exhibit 23 (page 97) is one depiction in evidence demonstrating achievement of GFA of 74,958m² in some 20 typical three and four storey buildings and six smaller ones in Area A and 71,985m² in Area B (from exhibit 23 page 109) in some two dozen typical buildings plus 48 board walk villas on stilts above the southmost edge of the sedgeland (67,269m² without them).

The appellant’s after case for highest and best use of the site was that Area B had potential for detached housing only about in Area A no development would be permitted outside the SD&AR PDLU, even on land zoned RHD. GFA achievable reduced to 33,740m², the 20 buildings reducing to 13 and the six smaller structures to four.

Regarding the appellant’s paragraph 45(b), it is not only the Council’s evidence and arguments in a compensation claim that should be approached cautiously. Just as the Council may be motivated by minimising any liability for compensation, an applicant may be presumed desirous of winning more compensation rather than less. Development scenarios propounded will never be tested in the real world from the point of view of being funded or of attracting ultimate purchase(s) in the market. There may be a temptation to present an unduly rosy picture of what could have been done with a site before the relevant date and an unduly negative one of what could have been done after. The obverse applies to the respondent Council. Chapter and verse argument in following paragraphs, inviting the riposte at both sides are playing to win. Against the Council’s assertion that increasing environmental awareness through the 1990s affected development expectations in a negative way, it was pointed out that no formal planning document reflects this.

The Council stands accused of rewriting history by now advocating inconsistently with what it “was actually doing around the time of the relevant date” and (rather than focus upon “the clear wording of the two different strategic plans”) impermissibly (given the Pointe Gourde[4] principles) relying on “informal documents” that were “part and parcel” of its review of the old strategic plan: Paragraph 50. The Council contends that the appellant’s case laces too much reliance on the map in the 1997 strategic plan and ignores vital parts of the other statutory components of a strategic plan identified in s 2.4 of the PEA, in particular statements of objectives for the PDLUs and criteria for implementation. An important provision which establishes the flexibility inherent in the 1997 strategic plan, it says, is s 25.2.6, found among the Strategic Principles in s 25 which requires that “all development should adhere to the Strategic Principles”. Under the heading Environmental Principles is:

“It is necessary to reveal in detail the matters adverted to in a summary way here.”
[4]Pointe Gourde Quarrying and Transport Company Ltd v Sub-Intendent of Crown Lands [1947] AC 565

Legislation providing for strategic plans and planning schemes generally

The Local Government Act 1936 – 1984 in s 33(1) defined a strategic plan as:

“‘Strategic plan’ – A plan that specifies in general terms the future preferred dominant land uses for the town planning scheme area for the progressive development of lands within such area[5] during the period for which the scheme has force and effect.”
[5]The following words were replaced in the PEA by ‘that conforms with section 2.4 and is approved by the Governor in Council’.

The following subsections provided:
“(2A) Inclusion of a strategic plan, development control plan in town planning scheme. (a) In the course of preparation of a town planning scheme by it in accordance with a resolution approved by the Minister pursuant to subsection (2)(c) subsequent to the commencement of the Local Government Act and Another Act Amendment Act 1980, the Local Authority –
(i)shall, unless exempted by the Minister (he being hereby thereunto authorised) from so doing, prepare a strategic plan for the town planning scheme area. …

(2C) Composition of town planning scheme. A town planning scheme shall consist of –
(a)the Order in Council notifying approval of the scheme, together with the schedules, if any, to the Order in Council;
(b)the scheme maps;
(c)by-laws made by the Local Authority (whether before or after the commencement of the Local Government and Another Act Amendment Act 1980) to implement the scheme and to provide for, regulate and control the administration and execution of the scheme;
(d)strategic plans and development control plans (whether made before or after the commencement of the Local Government Act and Another Act Amendment Act 1980), together with supporting documents;
(e)every amendment of the scheme duly approved from time to subsequent to the approval of the scheme.

(2D) Composition of strategic plan. A strategic plan referred to in subsection (2A) shall consist of –
(a)a map or series of maps identifying preferred dominant land uses;
(b)a statement of objectives of the Local Authority in relation to preferred dominant land uses together with other criteria for determining the type , scale or distribution of other uses required as an integral component to service the preferred dominant land uses;
(ba)copies of writings for the implementation of that plan;
(c)copies of writings containing supporting information used or in connexion with for the preparation of that plan.”

The corresponding PEA provisions were:

“PART 2 – PLANNING SCHEMES
Composition of planning scheme
2.1 A planning scheme is to consist of –
(a)planning scheme provisions for the regulation, implementation and administration of the planning scheme;
(b)zoning maps and regulatory maps;
(c)a strategic plan;
(d)a development control plan (if any);
(e)any amendment approved by the Governor in Council in respect of the planning scheme.

Planning scheme provisions
2.2 Provisions for the regulation, implementation and administration of a planning scheme are to include –
(a)       the designation of each zone;
(b)       a statement of the intent of each of the zones;
(c)       requirements for –
(i)        the use of premises; and
(ii)       the erection of structures; and
(iii)      the subdivision of land;

(d) administrative requirements for –
(i) the form of making of applications; and
(ii)matter for consideration in deciding applications; and
(iii)the keeping of records and registers in respect of the planning scheme; and
(iv)matters relating to offences; and
(v)other matters necessary for the proper and orderly administration of the planning scheme.

Zoning and regulatory maps
2.3(1) Zoning maps are to depict the zones into which a planning scheme area is divided.
(2) Regulatory maps are to depict areas which are subject to particular planning controls.
(3) Zoning maps and regulatory maps are to have a cadastral base.
Strategic plan
2.4 A strategic plan is to include –
(a)a map or series of maps depicting preferred dominant land uses for the area;
(b)a statement of objectives in respect of each of the preferred dominant land uses together with other criteria for determining the type, scale or distribution of other uses required as an integral component to service each preferred dominant land use;
(c)criteria for the implementation of the plan.

Development control plan …
Supporting documents to a planning scheme
2.6(1) Each planning scheme is to be supported by –
(a) planning studies; and
(b) local planning policies (if any).

(2) The supporting documents referred to in subsection (1) do not form part of a planning scheme.
Planning studies
2.7(1) A planning study is to be prepared in connection with the formulation of each –
(a)       planning scheme; and
(b)       strategic plan; and
(c)       development control plan

(1A) In preparing the planning study, the local government concerned must have regard to relevant State planning policies.
(1B) The planning study must include a statement about the extent to which the local government had regard to State planning policies.
(2) Each planning study is to include an assessment of each of the following matters which are relevant to the formulation of the planning scheme, the strategic plan or the development control plan –
(a)       topography;
(b)       natural or built environment (or both);
(c)       regional land use patterns;
(d)public utility infrastructure systems and transport systems;
(e)regional or local economic and employment factors;
(f)the social and cultural features of the population, including housing;
(g)any constraints and opportunities in respect of development;
(h)in the case of a strategic plan, any reasonable development options available.”

Some features of foregoing, relevant to the adoption of the adoption of the 1997 strategic plan which at p175 lists thirty-four underlying planning studies, some of which became exhibits are that:

· It is the documents described in s 2.1(a), (b) and (e), s 2.2 and s 2.3 which set out the requirements for uses of premises. The 1988 strategic plan was specific that:

“PREFERRED DOMINANT LAND USES
2. The strategic plan maps designate preferred dominant land use categories which are not zones, and do not confer development rights for individual sites. Uses which may establish within the preferred dominant land use areas are subject to the land in question being included in an appropriate zone on the scheme maps. This Plan in no way abrogates the use rights applicable to the existing zones under the town planning scheme.”

There is nothing corresponding in the 1997 strategic plan, by the legislative provisions set out above establish the primacy of the zoning arrangements.

· The maps referred to in those provisions are to have a cadastral base – not a requirement of maps in a “strategic plan”.

· The definition of “strategic plan” implicitly acknowledges that preferred dominant land uses may not necessarily come about; different uses may. The 1997 strategic plan itself recognises this in what I think constitutes a helpful explanation of “preferred dominant land use”, an expression not defined:

“To assist the interpretation of the objectives, a table for each designation includes the following descriptions:-
· The name of the Preferred Dominant Land Use or Other Designation. The Preferred Dominant Land Use name is intended to reflect the dominant land use likely to be found within its mapped area, in the life of this Strategic Plan. The names of the preferred Dominant Land Uses cannot reflect all land uses which will be found within the designation, however a brief statement regarding the principal uses associated with each Preferred Dominant Land Use, is contained in the table.”

At first blush, the lack of deference to zoning as the basis of uses permitted or potentially permitted bespeaks a grab at primacy by the new strategic plan. I do not accept that there is any change from the situation since the commencement of the PEA with its requirement to reject a development proposal conflicting with a strategic plan in the absence of sufficient planning grounds favouring the proposal to outweigh the conflict. No doubt it would be a planning ground that the zoning favoured the proposal. Of course, the application may be for rezoning, as would have to be the case here. Thus, for example, possibilities were canvassed of Area A being rezoned Special Facilities from RHD or Area B rezoned from Future Urban to Residential Medium Density (RMD). So the issue becomes whether the new PDLU arrangements might stand in the way of a particular proposal in the outcome in a way that the old PDLU arrangements would not have.

(The PEA provisions set out alleviate my initial concerns that the 1997 Strategic Plan contained nothing corresponding to the self-effacing acknowledgement immediately following the introduction to the 1998 Strategic Plan:

“PREFERRED DOMINANT LAND USES
2.The strategic plan maps designate preferred dominant land use categories which are not zones, and do not confer development rights for individual sites. Uses which may establish within the preferred dominant land use areas are subject to the land in question being included in an appropriate zone on the scheme maps. This Plan in no way abrogates the use rights applicable to the existing zones under the town planning scheme.”

The 1997 replacement contains minimal, if any, acknowledgment of zoning. Nevertheless, it will be the unaltered zoning that determines development rights, that specifies the “requirements for the use of premises” as the PEA puts it. The zoning had to be right before any development could be approved and rezoning by amendment of the planning scheme may well be required. It would have been required for the site outside the RHD zone/PDLU for anything beyond limited residential development. Of course, this is where the provision in s 4.4(5A) requiring the local government to refuse to approve the application if:

“the application conflicts with any relevant strategic plan …; and
(b) there are not sufficient planning grounds to justify approving the application despite the conflict,”

comes into play.

Council’s Opportunity to adopt, then replace its Strategic Plan taken up

During closing addresses there was some speculation about whether the Council was obliged to adopt a new strategic plan in 1997 or, having no obligation, took up an opportunity to do so, perhaps in pursuit of an agenda to reduce the development potential of parts of the shire, such as the site. The answer to this question, which leads nowhere in particular, lies somewhere in the middle. By s 2.16(2) the Council had seven years following 15 December 1990 (I think it unlikely that the starting date was 13 February 1988) to review its planning scheme (including the 1988 strategic plan) to determine its suitability for continued operation. The Council had to decide one way or the other. Subsection (3) required a report to the chief executive if continued operation was considered suitable. Otherwise, a new or consolidated or amended planning scheme had to be prepared. Subsection (5) mandated preparation of a new planning scheme. It is not clear to me whether the 10 year limit from “notification of each order in Council last notifying approval of a planning scheme” applies to the requirement “to prepare” or the requirement “to supersede” (which would shorten the time available to the Council). Subsection (6) allowed the Council to extend or further extend the time limit, but subject to the Minister’s written direction to different effect under subsection (7). There was no evidence showing in what way s 2.16 had been applied by the Council here. While there may have been an “agenda” of sorts involved in the approach of limiting roads to two lanes, investigating the idea of a population cap for the Shire and the like, nothing in the voluminous evidence speaks a mission to bring to an end strategic planning to make “Noosa Shire a land of opportunity”, or to accord environmental considerations increased wake in assessing development proposals: If it had been possible to locate any statements by the Council or significant Council personnel indicating such an agenda, I would expect them to have got into evidence. We know, for example, that a detailed public statement was recommended to be (and was) prepared to explain why the Council compromised the appeal about R527. See exhibit 135, p 1095 and p 1175.

Zoning

What uses might be made of the site depended on existing zonings, or re-zonings that were achievable. Stated intents for the zones relevant to the appellant’s land in the Town Planning Scheme for the Whole of the Shire of Noosa were as follows:

“4.Residential High Density Zone – This Zone is intended to provide for areas of relatively high density residential unit development generally providing accommodation for holiday makers and tourists. It is intended that the maximum height of such residential accommodation to be six storeys.
Ancillary resort development of a comprehensive nature (wide range of associated holiday support and tourist orientated development which would be compatible with the nature of this Zone), is permissible with the Council’s consent.
It is not intended that the Council approve all development applications where such comply with the scheme and policies, because of the potential for detrimental effect on the visual environment and surrounding amenity in this Zone. The Council will encourage the formulation of development proposals by liaison with the Council and the testing, where appropriate, of public opinion.
5.Future Urban Zone – This Zone is intended to provide a reservoir of land to cater for the expansion of urban areas until the next review of the scheme.
A prerequisite for the rezoning of this land by inclusion in a higher density urban zone is the adequacy of public utility services, but temporary uses of land are permitted or permissible depending on the circumstances without the extension of full public utility services

The future development of such areas is not wholly restricted to residential usage and, in appropriate locations, the rezonings of such land to include same in other zones may be possible, but the development of land in this Zone will be compatible with the strategic plan, development control plans and policies. …

10.Open Space Zone – This Zone includes private and public land used or intended for use for passive parkland purposes or for sport and recreation purposes. It is also intended that some land included in this Zone serve functions such as providing floodways and buffer areas between residential and other development.
Land in this Zone of suitable size and circumstances may be developed for facilities for organised sports with associated facilities such as amenities blocks, stadiums, carparking facilitates, kiosks and the like.

Some land included in this Zone may be used for community facilities. …

19.Non-Urban Zone – This Zone is intended to include land in close proximity to existing urban areas which are considered to be unsuitable for urbanisation. It includes land adversely affected by excessive slope, inundation by floodwaters or other physical disabilities. This Zone includes the worst affected parcels of land which are also included in Drainage Problem Area, Area Subject to River Flooding or Sand Dune Problem Area allocations. Subdivision of land in this Zone is severely restricted.”

That planning instrument was gazetted on 4 May 1985.

The 1985 planning scheme was replaced by the Town Planning Scheme for the Shire of Noosa which was gazetted on 15 December 1990; it exhibits some differences in language, which the parties apparently accepted were not of any significance in this appeal. It might be noted in particular that reduction of the maximum building height in the Residential High Density (RHD) Zone was said to be unimportant, as the appellant never had any interest in buildings higher than four stories (The 4 storey limit had come in by the end of 1988). In 1990, the intents became:

“4.Residential High Density Zone – This zone is intended to provide for areas of unit accommodation for predominantly holidaymakers and tourists. There are limited areas of land included within the Residential High Density Zone and it is not intended to increase the area of land included within this zone over that existing at the appointed day. Buildings of up to four (4) storeys in height will be found in this zone and high levels of design, aesthetic and landscape treatments are demanded, commensurate with the tourism objectives of the Strategic Plan. To encourage diversity of building form and further control the scale and bulk of buildings within the Residential High Density Zone, a maximum gross floor area for any site is stipulated.
The table of Zones provides for a broad range of uses which may be achieved with the consent of Council, all of which are intended to provide a level of attraction or service, associated with the holiday and resort functions found within this zone. …

6.Future Urban Zone – The intent of this zone is to set aside areas for planned urban development until all services and all urban facilities can be provided. The ultimate land use will be predominantly residential and the Table of Zones reflects this intention by limiting land uses which may be achieved with consent, to those which are likely to be conducted on a temporary or interim basis or those which may be compatible with urban residential functions.
The rezoning of land included in the Future Urban Zone for other than residential land uses, will only be considered where such land uses will necessarily be associated with urban areas, and where such rezonings accord with the Strategic Plan. …

18.Non-Urban Zone – This zone includes land, which is generally in close proximity to urban areas, where that land is considered to be unsuitable for urban development. Land included within this zone will be adversely affected by excessive slope, inundation by flood waters, poor subsoil conditions giving rise to foundation difficulties, etc, which have been determined to be of such significance that urban uses should not be permitted. Land included in the designated Sand Dune Problem Areas, Drainage Problem Areas, Steeply Sloping Land and Areas Subject to River Flooding upon the Scheme Maps and which feature high levels of constraint, are included in this zone.
19.Open Space Zone – This zone includes private and public land used or intended for use for passive open space/park functions or for sport and recreation purposes. Some land included within this zone serves buffer or conservation functions. In appropriate areas, land included within this zone will be suitable for development to cater for indoor and outdoor sports, with associated facilities such as amenities blocks, stadiums, kiosks, car parking facilities and the like.”.

Zonings for the appellant’s land did not change. Only the first sentence of the RHD intent as at 1985 survived. What follows in the revision of paragraph 4 is plainly a set of new restrictions – an indication that in 1990, two years after the first Strategic Plan, the existing arrangements may have been allowing more intensive development than was by 1990 notions acceptable. (The four storey limit had come in by the end of 1988.) The 1990 intent is more prescriptive than its predecessor, set out in the preceding paragraph. The outcome of this appeal depends not on changes made in the wording of planning instruments which speak for themselves, but on consequential changes, if any, in the market values of specific sites affected, in particular by new restrictions limiting development potential. The culprit here is said to be the new strategic plan, regarding whose effects the parties present diametrically opposed cases. There is much room for argument about its effects, whose assessment obviously requires a proper understanding of the effects of its predecessor. There had been changes in the zoning provisions in 1990, which greatly affected development potential of the site. Those were not the subject of any compensation claim of concern to the court. Whether in this appeal the appellant can recover compensation for later changes in December 1997 said by it to be consequent upon the new strategic plan to the extent they can be assimilated with it, has been the subject of controversy.

Amendments to Town Planning Scheme 1997

There are issues arising from amendments effected to the town planning scheme schedule effected in December 1997, in particular those reducing maximum densities permitted in the RHD zone were so much part and parcel of the 1997 strategic plan’s coming into effect, “inextricably linked” to quote the appellant’s written submissions at 386ff or were something independent and irrelevant as at the relevant date for purposes of the appellant’s compensation claim, as the Council submits at 450ff.

On 29 August 1997 the Council advertised in the Noosa News a “proposal to amend”, commencing as follows:

“PUBLIC NOTICE OF A PROPOSAL TO AMEND A PLANNING SCHEME
Section 2.18
An amendment to the Planning Scheme for the Shire of Noosa is proposed by Noosa Council.
The proposed amendment relates to the Schedule to the Planning Scheme and includes the following:-
·      changes to some definitions and adding new definitions
·      delete the Tourist & Entertainment Facilities Zone
·      changes to some of the Intents of the Zones
·      changes to the Table of Zones
·      changes to the existing use provisions
·      changes to a number of development standards including residential, commercial and carparking.
Particulars of the proposed amendment will be open to inspection at Council’s offices …”

3 October 1997 was the cut-off date for requesting details of the proposed amendment by mail or otherwise and for the making of submissions. At the Council’s offices, one would have located a single page summary commencing:
“NOOSA COUNCIL
PROPOSED AMENDMENTS TO
THE SCHEDULE TO THE PLANNING SCHEME
THE AMENDMENTS PROPOSE A SERIES OF CHANGES FOR REASON OF-
·THE NEW STRATEGIC PLAN
·NEW INITIATIVES
·CLARIFICATION OR UPDATING OF PROVISIONS

THE CHANGES RELATING TO THE NEW STRATEGIC PLAN ARE AS FOLLOWS-
·RESIDENTIAL DEVELOPMENT DENSITIES ARE TO BE REDUCED IN-
-     THE RESIDENTIAL LOW DENSITY ZONE (120 TO 100 P/HA)
-     THE RESIDENTIAL MEDIUM DENSITY ZONE (200 TO 160 P/HA)
-     THE RESIDENTIAL HIGH DENSITY ZONE IN HASTINGS STREET (340 TO 280 P/HA)
-     THE RESIDENTIAL HIGH DENSITY ZONE OUTSIDE HASTINGS STREET (340 TO 250 P/HA).
·IN AREAS WITHOUT SEWERAGE, RESIDENTIAL DEVELOPMENT SHALL NOT EXCEED DUPLEX DWELLINGS
·CHANGES HAVE BEEN MADE TO THE PROVISIONS OUTLINING THE INTENTS OF THE VARIOUS RESIDENTIAL AND FUTURE URBAN ZONES”

and 12 pages following of “suggested amendments”. The one change in the definition of “Building height in storeys” has been noticed elsewhere

“1.13     Intents for the Zones
PART:              B                   DIVISION:                3
CLAUSE:        10(6)             TABLE/APPENDIX: Nil
SUBJECT:       Intents of the Zones
ISSUE:The Intents require review for consistency with the approach of the Strategic Plan.
…
(4)Residential High Density Zone – The Residential High Density Zone provides for high density residential uses, with building heights of 3 to 4 storeys. This zone is intended to provide for areas of unit accommodation for holidaymakers and tourists. The Strategic Plan provides for multiple dwellings, accommodation buildings and group housing developments in this zone. …
…
(6)Future Urban Zone – The intent of this zone is to retain areas for future urban development until a time when all services and urban facilities can be provided. The ultimate land use will be predominantly residential and the Table of Zones reflects this intention by limiting land uses which may be achieved with consent, to those which are likely to be conducted on a temporary or interim basis or to those which may be compatible with urban residential functions.
The zone is generally bounded by real property boundaries and consequently may include land feature environmental constraints that preclude its use for urban purposes. These aspects require specific consideration in the assessment of any planning application. ...”

In 1.28.1 the suggested amendment of Appendix XV Part F in respect of maximum population density for the RHD zone for all sites (whether larger or smaller than the benchmark of 1,000m² site area consulted in other zones) reduced the maximum to 250 persons from 340. The above material under this heading may be found in Appendix 1.6.7(ii) in Exhibit 124, the supplementary joint expert reports of the architects dealing with the After Case. At p 56 Mr McKerrell identified:

“… proposed changes of particular relevance to RHD zoned Area A which were identified in part as:-
·Section 1.13.1(4) – ‘…building heights of 3-4 storeys’ are proposed in the RHD zone. This was to replace the existing planning scheme provisions which stated that ‘buildings of up to four (4) storeys in height will be found in this zone.’
·‘Performance standards for multiple dwellings … seek to control the impact of these buildings …’
·Section 1.28.1 – It was proposed that a downgraded RHD maximum population density of 250 persons/ha would replace the maximum 340 persons/ha population density provision in the existing planning scheme.

MTM states that this document was in the public realm on the Relevant Date and that the document would have been considered by the town planner, architect and/or PP.
NR believes that the document referred to by MTM was most possibly in the public area for the purposes of gaining comment and feedback from stakeholders such as the residents of Noosa, potential developers as well as consultants, and others working with the plan. There could be no guarantee that what was proposed would become law in any way, shape or form. …”

The “downgraded” density cap was particularly influential in limiting what Mr McKerrell thought could be achieved as the highest and best use in the after case: see p 137. He proposes eight buildings of three storeys (two linked by an “ancillary services” component), only four of four storeys and two clusters (a “building”-equivalent footprint) of two storey duplexes. As to height, I think that as a misreading of the change which I see as setting a minimum building height of three storeys, I do not see how it can be regarded as precluding four storey structures.

The Council makes telling points in this regard:

“452.That the development potential of the Land would be diminished in the after case as a consequence of the August 1997 proposed amendments to the 1990 Planning Scheme was not a matter advanced in the Points of Claim.
453.Further, and in any event, the language of section 3.5(1) and (8) of the P&E Act tells against consideration of the August 1997 proposal in connection with a claim for compensation that arises on the coming into force of the 1997 Strategic Plan.
454.In addition, Mr McKerrell could offer no cogent explanation as to why a prudent purchaser would have regard to the document in the after case, but not in the before case (see T21-11/L42 – T21-17/L38).”

There was cited in support of 453 Lubrano v Brisbane City Council [1995] QPLR 81 at 83:[6]
“… Mrs Heinke (who was called by the Respondent) was of the opinion that any application for consent for a use of an industrial kind was likely to be unsuccessful because of its incompatibility with residential use which would have been seen as the preferred type of development for the area in question.
It appears however that, in reaching this conclusion, she was influenced by planning indications that occurred prior to gazettal and which related to the prospect of a change in the area’s zoning (except in relation to land fronting Lytton Road) to protect the amenity of existing residential use in the area. Particular reference was made to a minute of the Planning Policy Advisory Committee…
…
If one has, in looking at the “before” situation of the subject land, to exclude from consideration the impending change of zoning, it would follow, in my view, that one should not be distracted by informal (in the sense that they are not part of the Town Plan) expressions of planning strategy that contemplated and evidently led to the change in zoning.”
[6]This is the decisions relied on by the appellant as authority for ignoring the draft 1997 Strategic Plan, etc in determining market value at the relevant date.

In opening addresses, at the beginning of the appeal hearing, it was made abundantly clear by Mr Gibson that the Council’s view (which I think is a correct one) is that the December 1997 changes may well have caused injurious affection, for which compensation could have been but was not claimed; it is not open to the appellant to use a compensation claim based on the December 1997 changes which, from the standpoint of the relevant date, might never have come about. In similar vein, I do not think it was justifiable to frame the highest and best use in the after case by reference to restrictions which, as things stood on the relevant date, might or might not come to pass.
Population Density and GFA Restrictions in the Zones

Appendix XV from 1990 provided:

APPENDIX XV

Performance Standard Residential Low Density Zone Residential Medium Density Zone Residential High Density Zone Commercial A and Commercial B Zones

Minimum site width (metres) 15 15 13 15

Maximum population density, sites less than 1000 square metres (persons) 5 persons plus 0.5 persons per 35 square metres of site area in excess of 600 square metres 7 persons plus 0.5 persons per 16 square metres of site area in excess of 600 square metres As for sites of 1000 square metres or more 7 persons plus 0.5 persons per 16 square metres of site area in excess of 600 square metres

Maximum population density, sites of more than 1000 square metres or more (persons per hectare) 120 200 340 200

Maximum gross floor area (square metres) Maximum allowable population in persons multiplied by 40 Maximum allowable population in persons multiplied by 40 Maximum allowable population in persons multiplied by 40, provided that the maximum gross floor area shall not exceed 13600 square metres Maximum allowable population in persons multiplied by 40

Maximum site cover (percent) 40 35 45 35

Minimum landscaped open space (square metres Proposed population in persons multiplied by 40 Maximum allowable population in persons multiplied by 30 Maximum allowable population in persons multiplied by 14 Maximum allowable population in persons multiplied by 30

Maximum building height in storeys 2 3 4 3

Maximum building height in metres 8 12 15 12

This had a predecessor in the old Appendix X[7], but the limit to the 13,600m² of GFA per site, which featured largely in the appeal, and had been overlooked by some experts in designing development proposals to establish “yields” possible for the site in different scenarios, was new. Changes to the Table of Zones in 1990 imposed new restrictions on development of the site. Column IV uses for which Council consent was required, but (by definition) contemplated, were reduced in relation to the site; it not having frontage to Hastings Street, hotels (previously in column IV) and Service Stations became prohibited development along with other uses such as “Tourist facilities.” The reference to “conservation functions” of the Open Space Zone was new in 1990. Dwelling houses were permitted development in all residential zones (3 storeys or 12 metres high in RHD and RMD, otherwise 2 storeys and 8 metres) and in the Future Urban. In Residential Single Unit, Future Urban, Non Urban and Open Space Zones, accommodation buildings, duplex dwellings and multiple dwellings were prohibited; those uses were consent development in all of the residential zones mentioned (Residential Single use being excluded) so that Council consent had to be applied for and obtained.

[7]It prescribed a minimum site area of 2,500m², and ability to contain a 50m diameter circle within site boundaries, also somewhat more stringent maximum site cover and landscaping provisions.

Apropos permitted uses, one might note the definitions in the PEA s 14:
“permissible use’ means a use of premises which may only be undertaken pursuant to a planning scheme with the approval of the local government pursuant to section 4.13;
‘permitted use’ means a use of premises which may be undertaken pursuant to a planning scheme without the approval of the local government notwithstanding that the local government may require an application for the setting of conditions for the issue of a certificate of compliance or in respect of any other matter;
‘prohibited use’ means a use of premises which by virtue of the zone in which the premises are situated, is a use which is not permitted use or a permissible use;”
A useful discussion of consent uses is found in Bell v Noosa Shire Council [1983] QPLR 311, at 313:

“Because the proposed use is a consent use, it obviously is one which, in the overall scheme of the Town Plan, should be permitted in a appropriate case. Otherwise it would have been made a prohibited use. In my opinion an appropriate case is one in which one can give effect to the ancient right of a landowner to use his land for any lawful use he desires while at the same time protecting the modern rights (given by Town Planning Schemes) of the other landowners in the vicinity not to have the enjoyment of their land detrimentally affected to an unreasonable extent. The qualification ‘to an unreasonable extent’ is obviously a necessary one, because any development land almost certainly will have some detrimental effect on other land in the vicinity. Under a town planning scheme however a landowner must be taken to contemplate that a nearby parcel of land will be put to one of the uses to which that land may be put as of right. He must also be taken to contemplate that such a parcel of land may come to be put to one of the uses permitted with the consent of the Local Authority. Those are the expectations which he must be taken to have in relation to that parcel of land. So while it may be that as Mr Hewison , the town planner called by the Respondent, said, the development of a consent use such as a caravan park would have an adverse psychological effect on those residents who have built permanent homes in the area, in that they have a particular image of the area, I cannot see that fact alone as being properly very persuasive to the mind of a town planning authority. The consent use was always possible; the real question is whether if the proposed use is established on the subject land and it will substantially degrade the area, whether it would unreasonably disrupt the lives of the occupants in the neighbourhood.”

Strategic Plan environmental objectives added to Zone intents

I think it is clear that the new GFA restriction in Appendix XV is to be applied with reasonable rigour, as a way of achieving the intent set out in words in 1985. By 1990, the Shire’s first Strategic Plan had come into effect, featuring new provisions in Tourism Objective 3(3) to maintain and enhance the Shire’s natural attributes and Urban Objective 4(5):

“To ensure that the expansion of the urban area occurs in areas which do not create significant environmental impacts, and within areas which do not suffer physical or engineering constraints which cannot be overcome.”

– sentiments filled out in each case in text following.
The urban objectives’ “aim” was to encourage residential growth to meet community and tourist needs and lifestyles, having regard to the needs of the “natural environment”. Unremarkably the public and private open space objectives have a “conservation” aim, in particular:
“(1)To preserve the Noosa River and Lake System as a natural resource within the Shire…
(2)To retain, in a natural state, areas of ecological and environmental significance and to consolidate and secure such areas in public ownership…
(6)To ensure that the development of privately owned land included within the Public and Private Open Space Area, is in keeping with its setting and has due regard for the inherent qualities of the land.”

“Inordinate levels of impact” disfavoured

Apropos (1) and the explanatory paragraphs within it, the appellant contended that the only development proposals disfavoured were ones which would have “inordinate levels of impact” on the environment, apparently on the basis that “inordinate” was a synonym for massive, enormous, huge or the like. In my opinion the term has the second of the first two meanings given in the Oxford Dictionary:

“1. Not ‘ordered’; devoid of order or regularity; deviating from right or rule; irregular, disorderly; not regulated, controlled, or restrained.
1398 TREVISA Barth. De P.R. III. xxv (Add. MS 27,994), Anon be puls is swift and picke quakinge and inordinat. 1485 Act I Hen. VII, c. 7 Statutes.. for the Punition of unlawful and ordinate Huntings in Forests. 1581 J. BELL Haddon’s Answ. Osor. 414 That the cryme which is inordinate may be reduced to the order of Justice. 1625 FLETCHER Noble Gent. II. i, When did ye there keep such inordinate hours? 1692 RAY Dissol. World i. (1732) 3 A rude and inordinate heap. 1774 STRANGE in Phil. Trans LXV. 43 From the inordinate course of the Appenines in general, the volcanic hills of that chain afford no observation so interesting to physical geography. 1898 J. R ILLINGWORTH Div. Immanence iv. *4. 94 To remedy this lawlessness, to restore this inordinate state of humanity to order.
2. Not kept within orderly limits, immoderate, intemperate, excessive.
c1386 CHAUCER Pars. T. P340 The clothyng… is cowpable.. for the superfluitee, or for the inordinate scantnesse of it. c1425 Orolog. Sapient. ii. in Anglia X. 342/2 Querleyde with a inordinate sorowe and vnskilfulle heuynesse. C1530 Pol. Rel & L Poems 31 Inordynat bilding causith hasty sale of placys. 1545 BRINKLOW Compl. 6b, Filled w. the Spirit (1867) 15 Drunkeness with wine, or inordinate drinking, is altogether inconsistent with being filled with Spirit. 1716 ADDISON Freeholder No. 30 P5 He only taxes us with our inordinate Love of Pudding. 1791 BURKE Let. Memb. Nsat. Assembly Wks. VI. 31 Their object is to merge all natural and all social sentiment in ordinate vanity. 1840 MISS MITFORD in L’Estrange Life (1870) III. Vii. 108 Making us pay an inordinate rent for the luxury. 1872 YEATS Growth Comm. 284 The prices… were so inordinate.”

and in a context of planning may be seen to equate to unacceptable. It seems to me that in this context, given the prospects of conditions being imposed on any development, we can forget about “inordinate levels of impact” in the sense of uncontrolled or unregulated levels. This conclusion has implications for the validity of a contention that when the expanded, differently described open space designation from 1997’s intent called for “exclusion of development which would have impact on [environmental] values [referred to] irrespective of the scale of impact or the time taken to result in unmeasurable impact” – with a view to triggering investigations or measures to deal with the situation where relevant “development is proposed” (19.7.5.4 – see [16] below), there is a “paradigm shift” or anything like it. Further, standards and values change over time. Impacts that were acceptable in the 1980s or earlier may no longer be deemed acceptable in the 1990s. Consideration of the acceptable impacts is, of course, an exercise frequently undertaken by assessment managers and by this court, and unsurprisingly is one acknowledged in academic works, e.g. Stein Principles of Planning Law 197. The appellant’s written submissions in paragraph 223, as noted elsewhere, acknowledge that what is “environmentally acceptable” is something that “has evolved over time”. This analysis would be the same on the basis of the Macquarie (Revised Third Edition) definition propounded by the appellant:

In the after case, I have difficulty accepting that informed parties to a sale would accept that there was no higher potential than a 41 lot subdivision.
I acknowledge however that in the after case the purchaser would see a higher risk in securing an approval of the scale of that proposed by Mr Robinson.”

Mr Slater’s court report of 27 October 2013, Exhibit 215, confirmed and expanded on his views, with some tightening. I agree with his view that, apart from unknown taxation benefits that may have flowed from dedication of the wetland area, the price obtained in July 1995 is difficult to reconcile with an after value of only $14.1 million in September 1997, even acknowledging the number of years that had passed, a rising market in the early 1990s and the approvals granted in respect of Area B and the whole of Area A. Treading close to (or relying on) other areas of expertise, he questioned achievability of the architects’ before case given that the 13,600m² per site maximum GFA cap had been ignored and the after case on the basis that Mr McKerrell’s assumption that no development outside the SD & AR PDLU was possible, questioning why the 1988 open space designation was regarded as of no limiting effect on development at all, and whether the later reduction in maximum population density applied retrospectively. The now familiar issues regarding Area B he expounded more or less as Mr Robinson had. Mr Slater said that a purchaser would or might pay for the prospects of getting approval for more than detached housing in Area B and of getting approvals over the “shrinkage land” in Area A which in his (lay) judgment had no features distinguishing it from the SD & AR component. He may be seen as succumbing to the general tendency of the witnesses to take confident or pessimistic views about the prospects from a developer’s perspective of approvals being obtained which tend to favour the interests of the party engaging them in this appeal. Thus, he emphasises the risk, cost and delay accompanying the rezoning which may have been needed to achieve Mr McKerrell’s 72,908m² of GFA in Area A in the before case, and to allow any significant development at all in Area B. On reflection (paragraph 19.3.2) he came to the view that the risks were such that for Area B, a purchaser would not pay any more than the “base value”, being that for residential sub-division as advanced by Mr Brett:

“19.3.3 The degree of risk is fundamental to this valuation.”

He reminded us again of the length of the development period and the consequences of allocating over a smaller number of apartments certain development costs which were essentially fixed. It is not possible to work recalculations on a simple linear basis. Another feature of risk was “internal competition” as developed units on the site came on to the market to be resold. The simplicity and certainty of residential sub-division (and the ability to achieve thereby cash flow and reduce debt quickly) he thought would have made the likely fate of Area B in the before case residential development such as has befallen Area B in the event. I find these views persuasive.

Mr Brett’s methodology was not really challenged, except as to its appropriateness once one moved terribly far from Mr McKerrell’s scenarios, and for some quibbling about dollar amounts necessarily derived from available sales data which seems troublingly scant. It is no criticism of the valuers that truly comparable sales could not be found. Given the site’s characteristics and location, there are no others in Noosa that could be thought comparable.

As matters turn out, the appellant does not establish any injurious affection, or (should I be wrong in so thinking – because, say, some potential for three storey development in Area B as per Mr Venn was feasible, or Mr Robinson’s after case for Area B was considered too optimistic) if it had, there is no formula for converting to dollar terms that could be applied with confidence: there is simply insufficient evidence to permit assessment of compensation; further, the discrepancies are too great to permit adjustment downwards of Mr Brett’s work, as occurred, permissibly in my view, in Exhibits 26A and 228.

Alleged Inadequacy of the Valuation Evidence

The Council contended that the court was not entitled to speculate about market values in the absence of evidence, the point being that there might be a finding of injurious affection in a scenario the valuers had not considered and given market values for. It was suggested that no assessment of compensation could be made unless the appellant could point to evidence of relevant values. At T36-81, lack of specific valuation evidence was said to be an insurmountable difficulty for the appellant unless the court “accepts the McKerrell before and the McKerrell after … the evidence simply does not provide any basis upon which [to] determine the market value of the land either before or after.” This exchange occurred in final addresses:

“HIS HONOUR:         if you’re too inflexible about that, you make it next to impossible for someone like the appellant, don’t you?
…
…         Because he doesn’t know ---
…
…         what the court is going to make of … highest and best use possibilities.
MR GIBSON: Well, that’s why, presumably, for example, in the Kettering case, the question of valuation was kept separate from the fundamentally underlying question, because there is a simple way of addressing this and ---
…
…         - the hearing would be split
…
…         both valuers, in effect, defer the valuation exercise until they’re aware of the court’s determination as to whether the McKerrell before was achievable, or whether some other, and if so, what other is achievable. That has happened. My learned friend and I did it in the Land Court in a case some years ago. And the valuers in that case proceeded to agree on the value because the – most of the uncertainties had been removed. At this stage, … their fundamental point of disagreement is not a valuation point. The point of disagreement concerns what development is – would be achievable, … in the before situation, area A and B, and what development was achievable in the after.
HIS HONOUR:           As a potential purchaser ---
…
…         would
…
…         judge those things.
MR GIBSON: Exactly. … I’m not submitting there is a requirement for mathematical, or quasi mathematical precision or accuracy in the evidence that a party, in the position of the appellant, puts forward. But at the end of the day, there has to be an evidentiary basis for the conclusion the court is going to draw.
…
It’s all very well for Mr Brett to say, well, if you’re going to reduce the GFA, then all you’ve got to do is tinker with my schedule because it all … pro rata’s out, … but you’ve got to know what the reduction in the GFA is first. And we don’t have any evidence about that.
…
…         what one would have expected to find is a series of alternative plans by Mr McKerrell. … If Mr Venn’s accepted, here … plans to accommodate that and the valuers address them.
…
… the appellant, being the onus of proof is encumbent upon it to either provide valuation evidence which responds to the court’s determination of what was the before development potential … and what was the after development potential ---
HIS HONOUR: Or a formula ---
MR GIBSON: Exactly.
HIS HONOUR: In a way, there’s a formula there
…
… as we went on, we got Mr Brett applying the formula.
Mr Slater said that it gets a bit rough and ready ---
---
…
… as the cost per potential apartment balloons.
MR GIBSON: Exactly. So Mr Brett said well, look, if you knock a few units off here, and he gave his exhibit 235 or something, if you knock a few units off, then you just reduce the GFA, and then you can discount by $360 per square metre, which is my rate in my schedule, and you get the lower figure. Well, that’s – that may be accurate if we’re knocking a few units off, but its deceptively simple and ultimately misleading if we are talking about a more extensive reworking of either the before or the after. Because, as Mr Slater said and it’s just common sense, a point will be reached where it’s not a straight line reduction, because you’ve got the elephant in the room which is the development cost sitting here and … you’ll get to a point … where you can’t go on with - linear reduction.”

Next morning, Mr Gibson came armed with authorities: McCrohon v Harith [2010] NSWCA 67, with reference to paragraphs [101], [107], [117] and [121]; Narni Pty Ltd v National Australia Bank Limited [2001] VSCA 31 making reference to [23] and [32] and Ray Teese Pty Ltd v Syntex Australia Limited [1998] 1 Qd R 104 at 109 ff, in which as the trial judge I had erred in making what amounted to a “speculative” assessment of damages. In reviewing the many authorities defining a court’s duty where the assessment of damages is “difficult” given the state of the evidence, Pincus JA said at 110.

“The competing considerations are that to insist on more certainty of proof than is reasonable may unfairly disadvantage the plaintiff who, perhaps because of mere lack of foresight or incompetence, is unable to give a reliable account of the losses suffered. On the other hand, it would seem unfair to the defendant, at least in some circumstances, to make an assessment of damages which is no more than a guess, where the situation is such that a reasonably accurate estimate of the true amount of the loss could have been made, had the plaintiff taken any trouble about the matter.”

It may be an open question whether the principles found in cases about assessment of damages apply in assessment of compensation under a provision like s 3.5 of the PEA, although it is easy to slip into using the expression “assessment of damages” to describe the court’s present task, as Mr Hughes did at T38-62, responding to the Council’s argument. He relied on Brisbane City Council v Bortoli [2012] QLAC 8 at [42] ff, as showing that in valuation cases “you don’t need too much precision”. There the claimant’s evidence had not established any highest and best use for resumed land which the Court considered feasible; it was held entitled to form a new view of the highest and best use and determine compensation accordingly. That decision does not persuade me that flexibility is available here to the extent of permitting decisions to be made as to before and after highest and best uses at any points within the architects’ combined ranges and then applying figures offered in the valuation evidence suggesting sums in dollars per square metre of GFA, per apartment or per residential allotment. Acknowledging Mr Hughes’ point (T38-65) that Mr Slater had accepted there was nothing extraordinary about development costs which might stand in the way of “discounting” if Mr McKerrell’s opinions were too optimistic, I am of the view that one is justified in proceeding only so far in this way; in other words, there are limits. As one gets close to the realm of Mr Robinson’s scenarios and numbers, a discounting-type exercise becomes so problematic that it can instill no confidence whatever and should not be pursued. Mr Hughes is no doubt right that, quoting McPherson J in Nilon v Bezzina [1988] 2 Qd R 420, 424, “the degree of precision with which damages are to be proved is proportionate to the proof reasonably available.”

At the end of the day, it is obvious that without much percentage effect on length of the appeal, additional development scenarios could have been devised and presented to the valuers for conversion to market prices. Last October the chasms separating the architects in their views of the highest and best use before and after had appeared clearly. The parties declined the court’s offer to make as many further hearing dates as were required available in 2013, when only the valuers, evidence was outstanding. In effect, the court was committed to a two-part hearing. No request was made that the court rule on what one might call the architects’ issues. On the last day of the hearing, 28 February 2014, the appellant sowed the seeds of the idea of the parties coming back to give the court “some assistance with respect to the mathematical calculations”, in reliance on Metroplex Management Pty Ltd v Brisbane City Council [2010] QCA 333 [see T38-73]. It is too late for that now.

In any event, the court’s determination is that Mr Robinson’s before and after cases for both Area A and Area B are essentially correct in the sense that they describe the development potential a prudent purchaser properly advised would be prepared to pay for in an unconditional cash contract, and also what a vendor willing but not anxious to sell would settle on the basis of.[50] Mr Robinson may have been (I do not say was) too negative about three-storey development in Area B in the before case, as Mr Venn suggested, but any understatement by him of the development potential would be modest and in my opinion not quantifiable by a process of working backwards and downwards from market values attributed to Mr McKerrell’s before case, which was of a different order entirely: it would have been more appropriate to start by assessing market value on Mr Robinson’s before case and then working up. In the circumstances, I am not troubled at the thought that acceding to the Council’s submission under discussion would result in unfairness or injustice, given the way in which the appeal has been conducted.

The Sparke point

[50] In the after case for Area B, Mr Robinson of course swore to development potential in excess of what the valuers considered a purchaser would pay for.

The Council relied, effectively all along, on an important decision of the Court of Appeal, Sparke v Noosa Shire Council [2001] 1 Qd R 344, affirming [1999] QPELR 126[51] as a basis for rejection of the appellant’s claim for the most part, if not entirely. Mr Brett’s opinion was that at the relevant date the market value of Area A fell from $24.36 million to about $11.8 million, that of Area B fell from $17.49 million to $2.63 million. Rezoning of the latter from Future Urban would have been necessary for any development, including Mr McKerrell’s “before” case, based on Residential Medium Density Zone. Rezoning of Area A to Special Facilities may have been necessary to achieve the architects’ maximum potential GFA given the 1990 planning scheme’s non‑relaxable GFA limit of 13,600m² per “site”. Rezoning at all relevant times required approval of the local government and in turn approval of the Governor-in-Council. Many compensation claims under s 3.5 rely on injurious affection attributed to strategic plan changes, the claimant contending that in the “before” case such rezoning as might be necessary to the propounded, and now frustrated, development scenario could have been anticipated in the “before” regime.
[51]The claim was for injurious affection by reason of the 1997 Strategic Plan changing the PDLU description of land zoned Non-Urban from Urban Area to Rural Conservation PDLU for the most part, otherwise to Open Space-Conservation and Waterway Protection.

Where, as here, the Council relies on s 3.5(4), paragraph (d) in particular, as establishing an apparently wide exception to the “very expansive”[52] entitlement to compensation under subsection (1), an onus is imposed on the claimant for compensation to establish an exception to the exception. What must be shown is a legal right in the before situation to use the land for the relevant particular purposes prohibited or restricted from the relevant date. The notion of a legal right is expanded in aid of a claimant so placed by s 3.5(5):
[52]The High Court’s description. See Kettering (infra) at [28].

“For the purposes of subsection (4)(d), it is not to be taken that an applicant did not have the legal right referred to in that subsection by reason only that the applicant's right depended upon an exercise of discretion by the Local Authority in the applicant's favour if the applicant shows that it is reasonable to expect that the exercise of discretion would have been in the applicant's favour had it been sought immediately before the relevant provision of the planning scheme came into force.”

– of which the Court of Appeal said at 346:

“Cancelling the double negative at the beginning of the provision, its general intention appears to be, to put it simply, that there must be taken to be a legal right, for the purposes of para 4(d), in cases where the only reason for saying otherwise is that the right depends upon an exercise of discretion by the local government, if the exercise of discretion by the local government could be expected to have been favourable.
But here one cannot postulate that the only reason for saying that there is no legal right is the existence of a discretion in the local government. Another reason, equally potent, is the existence of a discretion vested in the Governor-in-Council. I understand the appellants’ counsel to say that it is unlikely that the legislature intended to exclude from the benefit of the compensation provisions claimants in the position of the appellants and it is manifestly unjust to do so. But the literal interpretation of the relevant provisions does not leave them without practical effect and the language is, in my view, quite clear.”

This decision binds me. To the extent that the before case depended on achieving a rezoning, it prevents the appellant’s establishing the “helpful” (to its case) exception to the “unhelpful” exception on the assumption that the latter applies. Further, although the Council approved rezoning in R221, there was no “legal right”, as approval of the Governor-in-Council was wanting at the relevant date, and could not be presumed under s 3.5(5). Indeed, approval had already been directly refused on 22 February 1990: Exhibit 134 p 400_9. The appellant argues that Sparke does not embarrass it, because its claim is expressly on the basis of s 3.5(1)(a)(i), so that the Council never gets into a position to rely on subsection (4)(d). It is suggested that Sparke is in doubt since a decision of the High Court in 2004 which made reference to it in footnote 11.

The High Court decision is Kettering Pty Ltd v Noosa Shire Council (2004) 78 ALJR 1022; 207 ALR 1; 134 LGERA 99, not reported in the Commonwealth Law Reports. Kettering’s claim in respect of the Banana Plantation Site on Noosa Hill followed gazettal of the Noosa Hill Development Control Plan on 21 September 1991. It was for $9.3 million for injurious affection occasioned by “the coming into force of a [DCP] provision … and/or a prohibition or restriction imposed by or under [the DCP]”, replicating the alternatives in s 3.5(1)(a)(i) and (ii). In this court a preliminary issue as to whether one of the “before” options, one based on a future rezoning, was incapable of supporting a compensation claim was determined favourably to Kettering: it was held that the DCP, which indicated intentions to reduce subdivisional yields, did not have the effect (to quote s 3.5(4)(d)) “by its operation” of relevantly prohibiting or restricting use of land; section 3.5(4)(d) did not avail the Council. The Court of Appeal disagreed. It was held by the High Court (the parties agreeing) that it was erroneous to issue an order precluding the claim to compensation based on before options that did not require rezoning; more importantly, for present purposes, the High Court rejected the Court of Appeal view of what constituted restricting:

“[26] The DCP had no prohibitory effect upon the appellant's use of the land. Its effect, although no doubt significantly so, was no more than influential. The respondent submits however that this means that its effect was at least restrictive, and therefore that it falls within the alternative limb of the exception contained in s 3.5.4(d), as a provision of a planning scheme which, by its operation, restricts the use of land.

[27] In our opinion ‘restricts’ should not be read in this way in s 3.5(4)(d). To give the word "restricts" such a meaning as, ‘restricted by influencing’ or ‘by having a strong bearing upon’ would be to give it a strained and artificial meaning, and one not compelled, either by the context of its use as held by the Court of Appeal, or by any extraordinary consequences otherwise.
[28] Section 3.5(4) does not expressly or by implication confine compensation to affection which is direct and immediate. The meaning of s 3.5(1)(a)(i) is not to be construed as the Court of Appeal did, by reference almost exclusively, to the exceptions to it. The appropriate approach is to identify the extent to which the very expansive right to compensation which it confers, is reduced by the subsequent exceptions for which s 3.5(4) provides. …”

After observing upon various subparagraphs of s 3.5(4), the reasons continue:

“… It can be seen that each exception is quite specific, and not, as the Court of Appeal held, confined to instances of remote or indirect effects on value, expressions nowhere used in the Act.
[29] The Court of Appeal was of the opinion that acceptance of the construction urged by the appellant would produce an anomalous, indeed extraordinary result that an injurious affection by way of a prohibition or restriction upon use would not attract compensation, whereas such an affection by way of an indirect and only influential change would. But this is to overlook the particularity and limited nature of the subject matter with which s 3.5(4)(d) is concerned: the prohibition on the use of land, or the restriction on use of buildings or other structures, for particular purposes. The effect of the DCP here is upon the potential of the land for subdivision, and greater intensity of use, and not of use for a particular purpose. It should be pointed out that this is a different construction of s 3.5(4) from the one placed upon it by the Court of Appeal in TM Burke Estates Pty Ltd v Noosa Shire Council in which it was unnecessary to construe the section for the purposes of the decision.
[30] There is nothing in the language of s 3.5 which requires that a distinction be drawn between direct and indirect effects. To do so is to introduce concepts themselves imprecise and removed from the words actually used.”

The disapproval of Burke is in marked contrast with Sparke’s surviving unscathed. The consequences of Sparke (an ex tempore decision whose correctness seems patent) are so draconian that one would expect the High Court to have added a fourth correction of the Court of Appeal to the three administered, had it been considered that Sparke was wrong.

The drafting of s 3.5 attracted much adverse comment, restructuring and reworking being advised at [33]. Half a dozen different expressions in subsections (1), (4) and (8) (two used twice) were considered all to refer to the same event – gazettal “and therefore the occasion for the commencement of … legal enforceability” – including the relevant expressions in (1)(a)(i) and (1)(a)(ii): paragraph [25]. More specifically, at [23], the Court made it clear that (i) and (ii) added nothing to the other, but described the same thing. In the circumstances, I reject the appellant’s assertion that it can exclude s 3.5(4)(d) by asserting that its claim has nothing to do with (1)(a)(ii). I think that (4)(d) applies to a claim expressly based on (1)(a)(i) as much as to one based on (1)(a)(ii). In my opinion, the appellant cannot be heard to say that the 1997 Strategic Plan does not “restrict” particular uses. Not only do the written submissions expressly state in dozens of places that it does, the allocation of more of the site than heretofore (including RHD and FU-zoned land) to an open space PDLU designation at the expense of terrain formerly designated Urban Area restricts: there will arise new scope for conflict with the strategic plan which would require the Council or this court to refuse a development application in the absence of sufficient countervailing grounds.

Reference was made to Barns v Maroochy Shire Council [2010] QPELR 419 whose headnote states:

“Under the 1985 planning documents, the subject site was zoned Rural A. Approximately two-thirds of the site was included in the Urban Areas preferred dominant land use designation, while the remaining third was included in Rural Areas preferred dominant land use designation. After the relevant date, the subject site, whilst still zoned Rural A, was thereafter included in the following preferred dominant land use designations:
·      Rural or Valued Habitat (majority of the site affected by this);
·      Conservation; and
·      Agricultural Production.”

The court determined, in a way contrasting with my determination immediately above, that the case was one like Kettering, that the new strategic plan did not by its operation restrict or prohibit any use “in the relevant sense” but rather affected potential for subdivision and greater intensity of use: see [76]. The Barns had elected to proceed under s 3.5(1)(a)(i), like the appellant here. They failed on grounds other than Sparke.

The appellant says that the 1997 Strategic Plan does not “prohibit or restrict in the relevant sense” any use of its land (the italicised words having been added to paragraph 81 of its written outline late, in closing oral addresses), asserting that [26] in Kettering describes its situation. It seems to me, however, that the very point of strategic plans is to deal with uses, as stated in s 2.4 of the PEA; the corresponding section about development control plans (2.5) says nothing about uses. I reject the submission at paragraph 82 that the new provisions (like the DCP provisions in Kettering, which was not concerned with a “strategic plan” and uses the expression only once, in paragraph [3], in paraphrasing s 2.1 of the PEA) are about “potential of the land for subdivision and greater intensity of use, and not about use for a particular purpose” – or “particular purposes”, as the Council points out, by reference to the Acts Interpretation Act 1954.

The Sparke point succeeds. So far as the claim concerns Area A, that could not have been decided without a trial, which for reasons explained elsewhere is found to have had the same development potential before and after the relevant date. The Council thus has no need to invoke Sparke so far as Area A is concerned, except to the extent that a rezoning might have been postulated. Area B, of course, could not be developed without rezoning. In other contexts one might be concerned that a landowner was left by changes in strategic planning with land reduced to a fraction of its value otherwise, by recourse had to Sparke. I am not persuaded that the appellant here finds itself the victim of an uncompensated “loss”, to use Dixon J’s term. That is all by the bye. Ignoring any effect of Sparke, the Council has established to my satisfaction that at the relevant date there occurred no diminution in development potential of the site – and therefore no diminution of market value.

Conclusion

For the foregoing reasons, the appeal should be dismissed. The appellant applicant does not show that its interest was "injuriously affected", which is the essential foundation for recourse to s3.5 of the PEA. The parties are invited to make submissions in writing as to any further orders which might be made under general liberty to apply.

CITATION:	R F Thompson (Qld) Pty Ltd v Noosa Shire Council [2014] QPEC 17
PARTIES:	R F THOMPSON (QLD) PTY LTD (ACN 010 055 839) (Appellant) v NOOSA SHIRE COUNCIL (Respondent)
FILE NO:	4533 of 2000
DIVISION:	Appellate
PROCEEDING:	Appeal against respondent council’s refusal of compensation
DELIVERED ON:	24 April 2014
DELIVERED AT:	Brisbane
HEARING DATES:	13, 20-23, 26-30 August , 02-06, 09-13 September, 21-25, 28-31 October 2013 17-21, 26-28 February 2014 Site Inspection 16 August 2013
JUDGE:	Robin QC DCJ
ORDER:	Appeal dismissed; liberty to apply
CATCHWORDS:	Local Government (Planning and Environment) Act 1990 s3.5, s8.2 - PLANNING AND ENVIRONMENT-Appeal against respondent Council's refusal of compensation for injurious affection asserted by coming into force of a new strategic plan - preferred dominant land use (PDLU) mapping and descriptions of designations changed - open space PDLU designation (with wording allegedly more restrictive of development) significantly expanded to overlie more land zoned Residential High Density - former Urban Area PDLU also reduced where it overlay Future Urban zoning and designated Detached Housing for future - zonings all unchanged - symbol identifying site for potential tourist development removed - whether site's development potential, consequently value, was restricted to a similar extent by the original strategic plan and the continuing planning scheme given provisions in them protective of the environment, local and visual amenity, etc and limiting intensity of development - relevance of Council approval 9 years before of rezoning (not subsequently endorsed by the Governor-in-Council) which would have opened the way for intensive development of the whole site - whether council bound by intimations that a development approved prior to original strategic plan coming into effect complied with its objectives , relevance of a more contemporary approval for the adjoining property, which shared an environmentally sensitive wetland - relevance of subsequent Council assessment of various development applications over the site by reference to the new strategic plan alleged by the appellant to show that it restricted development potential, alleged by the respondent to show it did not - expert evidence as to advice that would have been given to a hypothetical prudent purchaser (by unconditional cash contract) immediately before and immediately after the "relevant date" from ecologists (flora and fauna), engineers (geotechnical, hydraulic, traffic and general civil), visual amenity experts, economists, architects, planners and valuers bearing on the site's highest and best use before and after - changing legislative regimes, Government, community and court attitudes to environmental issues considered - to the extent that development scenarios relied on by the appellant required rezoning, section 3.5(5) did not assist its claim (the “Sparke point”)
COUNSEL:	C L Hughes QC, B D Job and J Lyons for the appellant G J Gibson QC, R S Litster QC and N J Kefford for the respondent
SOLICITORS:	Geoff Klooger & Associates, then Connor O’Meara Solicitors for the appellant Wakefield Sykes for the respondent

Performance Standard	Residential Low Density Zone	Residential Medium Density Zone	Residential High Density Zone	Commercial A and Commercial B Zones
Minimum site width (metres)	15	15	13	15
Maximum population density, sites less than 1000 square metres (persons)	5 persons plus 0.5 persons per 35 square metres of site area in excess of 600 square metres	7 persons plus 0.5 persons per 16 square metres of site area in excess of 600 square metres	As for sites of 1000 square metres or more	7 persons plus 0.5 persons per 16 square metres of site area in excess of 600 square metres
Maximum population density, sites of more than 1000 square metres or more (persons per hectare)	120	200	340	200
Maximum gross floor area (square metres)	Maximum allowable population in persons multiplied by 40	Maximum allowable population in persons multiplied by 40	Maximum allowable population in persons multiplied by 40, provided that the maximum gross floor area shall not exceed 13600 square metres	Maximum allowable population in persons multiplied by 40
Maximum site cover (percent)	40	35	45	35
Minimum landscaped open space (square metres	Proposed population in persons multiplied by 40	Maximum allowable population in persons multiplied by 30	Maximum allowable population in persons multiplied by 14	Maximum allowable population in persons multiplied by 30
Maximum building height in storeys	2	3	4	3
Maximum building height in metres	8	12	15	12