St John Ambulance Association of Western Australia Inc v East Perth Development Authority
[2001] WASC 85
•6 APRIL 2001
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COMPENSATION COURT
CITATION: ST JOHN AMBULANCE ASSOCIATION OF WESTERN AUSTRALIA INCORPORATED -v- EAST PERTH REDEVELOPMENT AUTHORITY [2001] WASC 85
CORAM: HASLUCK J (PRESIDENT)
MR R J PRIEST
MR G I GAUNTLETT
HEARD: 14-21 SEPTEMBER 2000
DELIVERED : 6 APRIL 2001
FILE NO/S: PWA 2 of 1997
BETWEEN: ST JOHN AMBULANCE ASSOCIATION OF WESTERN AUSTRALIA INCORPORATED
Claimant
AND
EAST PERTH REDEVELOPMENT AUTHORITY
Respondent
Catchwords:
Compensation Court - Assessment of compensation for land resumed pursuant to Land Acquisition and Public Works Act - Claim of special value to owner with respect to central depot used by ambulance association - Legal principles concerning special value - Claim for special value in addition to market value allowed
Legislation:
Associations Incorporation Act 1987 (WA)
East Perth Redevelopment Act 1991, s 6
Land Acquisition and Public Works Act 1902 , s 112, s 112A
Result:
Judgment for plaintiff in the sum of $423,209
Representation:
Counsel:
Claimant: Mr C J L Pullin QC & Ms J M McAllister
Respondent: Mr M J McCusker QC & Mr J A Thompson
Solicitors:
Claimant: Phillips Fox
Respondent: State Crown Solicitor
Case(s) referred to in judgment(s):
Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575
Bronzel v State Planning Authority (1979) 21 SASR 513
Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358
Cook v City of Stirling [1991] 4 WAR 469
D'Amico v Shire of Swan Guildford [1969] WAR 183
Dangerfield v Town of St Peter's (1972) 129 CLR 586
Director of Building and Lands v Shun Fung Iron Works Ltd (1995) 2 AC 111
G & R Wills & Co v Adelaide City Corporation (1962) 9 LGRA 88
Housing Commission of New South Wales v Falconer (1981) 1 NSWLR 547
Joondalup Gate Pty Ltd v Minister for Lands, unreported; SCt of WA; Library No 960406; 31 July 1996
Kennedy Street Pty Ltd v The Minister [1963] NSWR 1252
McSweeney v Commissioner for Railways (1914) 14 SR (NSW) 18
Minister for Army v Parberry Henty & Co Pty Ltd (1945) 70 CLR 459
Pastoral Finance Association Ltd v Minister [1914] AC 1083
R v Compensation Court (WA); Ex parte State Planning Commission re Della Vedova (1990) 2 WAR 242
Realty Corporation Ltd v The Commissioner for Main Roads (1940) 14 LGR (NSW) 204
Spencer v Commonwealth (1907) 5 CLR 418
The Commonwealth v Milledge (1952) 90 CLR 157
Yates Property v Darling Harbour Authority (1990) 70 LGRA 187
Case(s) also cited:
Arkaba Holdings Ltd v Commissioner of Highways [1970] SASR 94
Commonwealth v Milledge (1953) 90 CLR 157
Commonwealth v Spencer (1907) 5 CLR 418
Crisp & Gunn Cooperative Ltd v Hobart Corporation (1963) 110 CLR 538
Hill v Western Australian Planning Commission (2000) 107 LGERA 229
Minister for Works v Thistlethwayte [1954] AC 475
Turner v Minister for Public Instructions (1956) 95 CLR 245
Valentini v City of Salisbury (1997) 69 SASR 332
JUDGMENT OF THE COURT: The claimant is an association incorporated under the Associations Incorporation Act 1987 (WA). The respondent is a body corporate established pursuant to s 6 of the East Perth Redevelopment Act 1991. The claimant has brought a claim for compensation against the respondent pursuant to provisions of the Land Acquisition and Public Works Act 1902 as a consequence of the respondent having resumed 750m2 portion of the claimant's land in East Perth. The claimant's land was thereby reduced from 3468m2 to 2718m2.
In response to the claim for compensation, the respondent made advance payments to the claimant of $129,523.29 on 11 October 1996 and $127,063.34 on 3 March 1999, on account of and in partial satisfaction of the claimant's claim. These payments amount to $256,586.63 in all. The principal matter remaining in controversy between the parties is a claim for $384,736, representing a claim for special value to the claimant of the land resumed. In order to understand the way in which the claim for special value arises, it is necessary to look closely at the history of the matter.
It will be useful to begin by noting that the claimant association was incorporated in 1919 as a non‑profit organisation. Prior to 1989, the claimant was the entity responsible for all the activities of the association in Western Australia. The effect of a reorganisation undertaken in mid‑1989 was to create five branches. The claimant, known as the Commandery, communicates with bodies elsewhere linked to the Order of St John and acts as a trustee of property. The Ambulance Service is responsible for the administration of funding and on behalf of the claimant provides ambulance services and first aid training. There are also branches concerned with Voluntary First Aid (formerly known as the Brigade), community care and Commandery functions. The metropolitan area is serviced by 18 ambulance stations, the ambulance fleet consisting of 85 ambulances and seven patient transfer vehicles. Revenue is derived from the operation of the fleet. In 1998/99 the Ambulance Service taught 47,128 students State‑wide, with eight training facilities being located in the metropolitan area.
Background
The objects of the claimant association include encouragement and promotion of all work of humanity and charity for the relief of persons in sickness and distress. The objects include reference to the provision of an ambulance and first aid training service for the welfare of the people of Western Australia. Where reference is made in the constitution to the "Commandery", this can be taken as a reference to the incorporated body.
It is apparent from the constitution that the affairs of the body are controlled by an executive committee, which will draw upon the services of a chief executive officer and salaried staff in order to implement its decisions.
For many years, the claimant has owned and occupied land at 209 Wellington Street, Perth. In or about 1941, a fine sandstone building was established upon the site and since that time those premises were regarded as the headquarters of the claimant association.
In the late 1970s, the chief executive officer and administrative staff reporting to him moved to a site at Belmont and have been located in the relevant premises since that time. From its Wellington Street premises, the claimant continued to operate an ambulance depot, Brigade and Commandery facilities and first aid training facility.
Towards the end of the 1980s, the claimant became increasingly aware that the Wellington Street premises were less than satisfactory for a number of reasons. The building was old, it lacked airconditioning, and, being situated close to the city centre on a busy street, there were difficulties of access for ambulances. Accordingly, the claimant commenced looking for a new site for the ambulance depot.
The chief executive officer, Mr Kaye‑Eddie, and the property manager, Mr Nicolaides, were conscious that the depot had to service the central Perth area and be located so that ambulances could gain quick and easy access to the major road systems. The ambulance service had depots at other strategic locations around the metropolitan area, including a depot at the Belmont site mentioned earlier.
In 1986, the claimant sent circular letters to various government departments seeking a 1,200m2 site for an ambulance depot only. These inquiries did not produce a satisfactory result, but in due course a site on the corner of Glyde and Brook Streets in East Perth was identified ("the East Perth site"). It consisted of various parcels in the ownership of the State Planning Commission, the Main Roads Department and the Department of Land Administration.
Mr Nicolaides said in evidence that the land's large size was attractive, as some time in 1985/1996, subsequent to the start of the search for the new central ambulance depot site, but prior to the purchase of the East Perth site, the claimant was approached by a government subsidiary and asked if the association was interested in selling the Wellington Street site. This approach gave rise to discussions between he and the finance manager, Mr Graham Wilson, about the possibility of relocating the entire complex to the East Perth site. Importantly, in regard to the movement of ambulances, the site in question was adjacent to the then proposed route for access to the Burswood Bridge and Great Eastern Highway and there was no need to renovate or demolish an existing building on site.
The Court digresses briefly to note that the East Perth site at that time was affected by a road reservation. Under and by virtue of the City of Perth's planning scheme, the subject property was partly affected by a Metropolitan Region Scheme Reserve for controlled access highway (freeway). According to Mr Nicolaides, he was not aware of this fact. He simply understood that the land was surplus to the requirements of the various government agencies and because the Main Roads Department was one of the parties involved it did not occur to him that a portion of the land would be required for road works in the future. He made various inquiries from the City of Perth and other authorities with a view to satisfying himself that the East Perth site could be used in the manner being considered by the claimant. By a letter dated 26 October 1987, the Town Clerk of the City of Perth drew his attention to the reservation, but went on to say that "there would be no objection, in principle, to the relocation of the central ambulance depot to the subject site". He said further that "details of the proposal would need to be assessed and approved by both the City Council and the State Planning Commission."
A proposal to purchase the East Perth site was brought before the claimant's executive committee. An extract from the committee's minutes of 15 September 1987 records that a proposal was presented "for acquisition of land in the central Perth district, to facilitate the future relocation of the central depot." Plans of the East Perth site said to comprise 3,393m2 were tabled for inspection. The executive committee then resolved that approval be granted to proceed with the purchase for the consideration of $318,900 "for the relocation of the central ambulance depot."
The relevant minutes also contain a footnote to this effect:
"General manager advised that at this stage the association has no intentions of moving from Wellington Street, and the present building will continue to be used for first aid training, Brigade and Commandery activities."
Mr Nicolaides said in evidence that he obtained some advice from Oldham Boas Ednie‑Brown, architects and planners, concerning the development of a concept for relocation to the East Perth site. A letter from Oldham Boas dated 15 December 1987 refers to discussions concerning a first aid ambulance centre based upon a modification of the existing standard layout, followed by a two‑storey training centre and final stage Brigade accommodation. Oldham Boas advised against certain features of the proposed staged development and canvassed various alternatives.
Mr Nicolaides said in evidence that because Oldham Boas became too insistent about the matter, he decided to discourage their interest. It is material to note that in a letter dated 13 December 1987 to Oldham Boas he remarked that "it is no longer a foregone conclusion that any construction other than the ambulance office or accommodation/depot will be undertaken in the long‑term." He went on to say that "if a decision is reached in due course to incorporate a training wing on the same site, the general consensus resulting from initial discussion is that this for safety reasons should be segregated as far as possible from the ambulance depot." The tenor of his evidence was that in fact the claimant was still actively contemplating the transfer of all facilities at Wellington Street to the East Perth site. The somewhat muted account he gave of the claimant's future plans was due to his wish to put off Oldham Boas in a polite way.
The BMA Study
Some months later, in April 1988, the claimant commissioned a feasibility study by the Building Management Authority to show how all facilities and required carparking spaces could be located on the site ("the BMA study"). The Court notes in passing that the agreed bundle of documents contained two BMA studies. The copy at page 212 related to the site as increased by some land the claimant hoped to purchase. The copy at page 197 relates to the land the claimant in fact purchased and it was this latter copy that counsel for the claimant identified in opening as the operative document. This is a document we have called the BMA study.
The BMA study commenced by saying that "the aim of the association is to develop the site in stages to finally provide replacement accommodation for the current operations at its Wellington Street site Perth. This requires provision of an ambulance depot, facilities for the St John Ambulance Brigade and Commandery and facilities for first aid training. The first stage would be the ambulance depot with the remainder carried out as a second stage. Alternatively, the training facilities could be completed as a second stage with the remainder as a third stage." The feasibility study set out to determine the suitability of the site for the proposed uses and to identify any constraints and problems associated with such development. Various issues were raised for consideration before any decision was taken to purchase the site, but, significantly, none of the issues were thought to be insurmountable. The BMA study indicated in its conclusion that "the proposed site is adequately sized to accommodate the brief requirements."
The BMA study noted, in regard to the Brigade and Commandery, that it comprises offices, meeting rooms, practical area, museum, boardroom, storage and service areas, with the total area required being approximately 800m2 which may be single storey or two storeys. The Court pauses to note that evidence at the hearing suggested that the Brigade and Commandery staff at that time amounted to six or seven full‑time employees. Accommodation also had to be provided to meet the needs of office bearers, committee members and volunteers and for formal occasions and also for museum use.
The BMA study noted that first aid training comprised lecture/training rooms, home care and life support area, office and support facilities. The floor area required to accommodate these activities was not defined precisely in the study. The activities could be at ground or first‑floor level and could be directly associated with the Brigade and Commandery facilities. Good access was required to the building for trainees. The site was required to accommodate a St John Ambulance Association of approximately 26 vehicles and also comply with Perth City Council parking requirements. In looking at the requirements for a two‑stage development, the BMA study noted later that "32 parking bays are proposed" and this requirement is reflected on the sketches forming part of the report.
The BMA study noted that the East Perth area had been set aside by the government for massive redevelopment and it was unclear what direction the area development would take. There were likely to be significant changes to the road pattern. The study canvassed various development options and noted that the buildings may be, in part, two storeys.
Importantly, the BMA study noted that layouts on the site depicted in the study took account of various aims, including placement of the ambulance depot "in a position to give rear access/service and with good egress to Glyde Street, and to provide an isolated ambulance depot building as it is likely to be built as stage 1." The Brigade/training building was to face the major street, namely, Brook Street. Various costings were attached.
Purchase of the East Perth Site
In a letter dated 21 April 1988, the Main Roads Department confirmed that the State Planning Commission, acting on behalf of the Department, had agreed to sell the East Perth site to the claimant as land surplus to the existing reservation for the city northern bypass, this being due to a government decision to re‑site the Burswood Bridge. The sale was effected by an agreement in writing dated 22 July 1988 whereby the land was sold free of encumbrance, save for a restrictive covenant concerning building conditions. At all material times thereafter, the new owner and other interested parties, including the City of Perth seem to have assumed that the claimant was at liberty to proceed with a staged development of the kind projected by the BMA study, notwithstanding that a portion of the site was still affected by the road reservation. It seems that the effect of the East Perth Redevelopment Act (which the Court will come to shortly) was to remove the city northern bypass reservation, although this, in turn, was replaced by a plan to widen Brook Street, which brought about the resumption giving rise to the present claim. The Court must proceed on the assumption that as the reservation was no longer required for the original purpose, and was destined to be removed, the claimant had reasonable prospects of carrying out its staged development of the site. This observation constitutes a finding to that effect.
The minutes of the executive committee suggest that the chief executive officer and his colleagues were keeping the committee informed of these developments. An extract from agenda papers dated 17 May 1988 notes at item 4.8 that "the Building Management Authority of Western Australia has submitted two feasibility studies on the proposed development of our East Perth site. Details of the study will be tabled for discussion." A later minute dated 19 July 1988 notes that the claimant association has paid for the land situated in East Perth and approaches were being made to the Perth City Council and State Planning Commission to have stage 1 of the association's plans approved. It continues, "Once this exercise has been completed, the building operations for our ambulance depot can commence." The reference to approval for "Stage 1" strongly suggests that other stages were to follow, and that the executive committee approved a staged development on the site.
The Ambulance Depot
In July 1989, a new ambulance depot was constructed close to the northern boundary of the East Perth site at a total cost of $376,715. The plan was to sell Wellington Street in due course and then to build the final two stages of the development described in the BMA study on the East Perth site and shift the Commandery, Brigade and training facilities into those buildings. Mr Kaye‑Eddie conceded under cross‑examination that there was no prospect of moving to the East Perth site unless the claimant was able to sell Wellington Street. It is apparent from the various sketch plans brought before the Compensation Court at the hearing, and related photographs, that the depot is separated from the northern boundary by a laneway leading into a parking area at the rear of the depot, a central feature of which is an island constituted by a canopy above a petrol bowser.
Evidence at the hearing established that, at present, the practice is for ambulances to enter the parking/petrol bowser area from Brook Street, refill at the petrol bowser or be washed down, as necessary, and enter the enclosed parking bays within the ambulance depot. They can then emerge in response to a call, from one of three garage doors opening into Glyde Street. The Court notes in passing that the central depot is the busiest depot and is the only depot that has two day shift ambulance crews, plus two, 24‑hour crew shifts. A patient transport crew also operates out of this depot.
In addition to the enclosed parking bays within the ambulance depot, provision was made for the accommodation of drivers and other staff. It seems that medical supplies and equipment are also held at the depot, with the result that ambulances from other metropolitan depots call in from time to time in order to replenish their supplies. The Court received evidence from the claimant's architect, Mr Gill, that the depot was not constructed in strict accordance with the options in the BMA report. The depot is larger by approximately one metre east to west. There is also an increase of three metres in the set‑back from Glyde Street. These changes did not appear to affect the viability of the property to be developed as had been proposed in the BMA report. The changes did give rise to a degree of confusion in the course of the legal proceedings and at the hearing when expert witnesses sought to reconcile the buildings depicted on the BMA plans with the depot actually constructed on the site.
Partial Resumption of the East Perth Site
On 1 July 1992, the East Perth Redevelopment Act was proclaimed, with the result that the East Perth site now lay within the jurisdiction of the respondent authority. By letter dated 12 November 1992, the respondent advised that the claimant's land would be affected by the widening and realignment of Brook Street as part of redevelopment plans for the area. By letter dated 25 January 1993, the claimant asserted that the land was purchased with the express purpose of constructing a central depot and developing the balance of the land for office/training usage. Mr Nicolaides, for the claimant, said in evidence that this exchange of letters was the first occasion on which the claimant became aware that a portion of the East Perth site was to be resumed.
On 2 February 1993, the Minister for Lands gave notice pursuant to s 112 and s 112A of the Public Works Act 1902 of intention to enter upon a portion of the East Perth site for the purpose of carrying out work to realign Brook Street, with the result that part of the realigned street would be located on the claimant's land. This entry was effected on 8 February 1993.
We pause to note that it was common ground at the hearing that the date of this entry represented the relevant valuation date for the purposes of the present dispute, that is to say, 8 February 1993.
By November 1993, the realignment work for Brook Street had been carried out. The realigned road was then partly located on the claimant's East Perth property. By Government Gazette of 5 September 1995, a notice of resumption was published to complete the formal process of taking the claimant's land used for the road.
The land resumed was 48m2 from certificate of title volume 1837 folio 431 and 702m2 from certificate of title volume 1837 folio 432, amounting to 750m2 in all. The claimant's claim for compensation was made on 5 March 1996. We have already noted that at a later stage a part‑payment of compensation was made and a partial discharge executed upon the basis that various claims, including a claim for special value, were to be determined by the Compensation Court if it could not be resolved between the parties by prior agreement.
When the matter was referred to the Court, pleadings were exchanged. The claimant alleges in its statement of claim that the original site was large enough to enable construction of all buildings comprising the proposed development - ambulance depot, brigade/commandery building and first aid training facility - to a height of no more than two floors and with, inter alia, adequate parking and separation between the buildings.
The claimant pleaded that as a consequence of the resumption the buildings (other than the depot) must be constructed to a minimum height of three floors in that a suitable alternative site is not available and, in any event, the buildings are unable to be relocated without the claimant incurring significant re‑establishment costs. An amount is then claimed in par 15 for the special value (s 63(a)), severance damage to the land retained (s 63(b)) and/or to meet the special circumstances of the case (s 63(c)).
The matter is not pleaded in this way, but the case was undoubtedly fought upon the basis that these were alternative heads of claim, each of which in its own right was said to justify an award of compensation equal to the extra building costs. It was quite clear from the outset of the hearing, however, that the claimant was relying principally upon the claim for special value and, on both sides, submissions concerning the law were largely confined to that issue; indeed, counsel for the claimant described the fact situation before the Court as "a classic case for the assessment under the first head." It follows that the Court will look initially at the special value claim, and proceed to the other heads of claim in due course, should that be necessary. The respondent, by its defence, denied liability.
The Gill Plan
In March 1995, prior to the formal resumption, but at a time when it was known that the claimant would be advancing a claim for compensation, Mr Nicolaides contacted Mr Gill, an architect and a member of the firm Oldfield Knott Architects Pty Ltd. Two years earlier, Mr Gill was the project architect for a major renovation and extension of the claimant's Belmont facilities.
Mr Nicolaides said in evidence that he met with Mr Gill on 8 March and sought his opinion as to the increased building and architectural costs associated with changes to the proposed administration buildings that were necessary to maintain the same floor areas as those required prior to resumption. Mr Nicolaides agreed under cross‑examination that he did not put it to Mr Gill in written form that the claimant intended to relocate to East Perth. He wanted to know what the increased cost would be if relocation occurred. His brief to Mr Gill included the provision of a copy of the BMA study and details of the square metreage required for each facility.
Mr Nicolaides advised Mr Gill that he thought the first aid training facility would require approximately 800m2 and the Brigade and Commandery would also require approximately 800m. These figures were different from those in the BMA study because the claimant had by then constructed training facilities at its Belmont premises and was more fully aware of its needs.
Mr Gill's record of the meeting is reflected in a handwritten memo dated 8 March 1995 comprising his notes. Reference is made to the history of the matter and to ongoing negotiations with the respondent. Mr Gill understood the value being offered in respect of the subject land was inadequate to cover the claimant's additional construction costs and trouble caused. His notes include the passage "two storeys become three storeys." He noted that under the "previous brief" the required floor area was Brigade 800m2 net, Training 800m2 net, which he translated into an overall requirement of 1680m2 in respect of a two‑storey building. He noted in respect of the "new brief" for a three‑storey building on the reduced site that the required areas were Brigade 950m2, including foyer, Training 800m2, which he seems to have translated into an overall requirement of 1830m2.
In due course, Mr Gill reported to the claimant by letter dated 19 April 1995. He observed that due to the resumption, it was now necessary to revise the concept of developing the East Perth site. The revised concept required a three‑storey building, housing Brigade and Commandery and a three‑storey structure, including an undercroft, which was to house the training facilities in the two storeys above the undercroft.
Mr Gill went on to say that the revised concept resulted in increasing the development building costs in several areas, being foundations, undercroft carpark, third floor penalty, circulation area, lift and extra redesign costs. More particularly, an undercroft carpark was necessary to maintain on‑site carparking requirements, with the extra costs involved being the difference between carparking on the ground and a suspended concrete floor to the first floor of the training facilities.
Mr Gill commented in regard to the third floor building penalty that building costs increase as the height increases due to extra time to construct, additional stairs, scaffolding and the like. Due to the decrease in the land area, the original concept would not fit on the remaining land requiring the buildings to go upwards to maintain the same area usage. The need for circulation space had to be increased to accommodate foyer areas, stair wells and passages. He also noted that it is essential that a lift be introduced now that the buildings have been increased in height and the extra cost involved apart from the lift and equipment is a lift motor room and lift shaft. He said that the Building Code of Australia and the Disability Discrimination Act require disabled access to be provided to all functions of the building. In the original design, it was possible to satisfy this requirement with ground floor access to sufficient administration and training facilities. In the revised design after the land resumption, the provision of the undercroft carpark prevents disabled access to any of the training facilities and therefore necessitates the provision of a lift to at least the first floor level.
After bringing to account the extra costs involved in respect of each of these items, and additional professional fees on the concept design, Mr Gill concluded that the extra costs amounted to $426,485.
The figure just mentioned has subsequently been amended downwards to $384,736, being the figure previously mentioned in respect of the special value claim. The Court will return to the breakdown of this figure in due course. In essence, however, drawing upon costings prepared by the claimant's quantity surveyor, Mr Rafferty, the amount claimed by the association represents a valuation of the various substantive items indicated by Mr Gill in his initial report.
Mr Gill's report was accompanied by a sketch plan showing the East Perth site as reduced by the resumption.
Mr Gill then made some adjustments to his concept. His adjustments are reflected in a letter to the claimant dated 29 February 1996. He enclosed a copy of a sketch "showing your current accommodation requirement of 1800 square metres" being contained within a two‑storey building. The Court notes that in the letter he refers to the sketch of the two‑storey building as SK1, but the relevant sketch is actually SK2. The Court will henceforth ignore the misdescription in the letter and proceed upon the basis that SK2 depicts the two‑storey building before resumption. Broadly described, SK2 depicts an L‑shaped two‑storey building lying to the south of the existing depot with an open parking area consisting of 30 bays situated partially to the south of the two‑storey building required to house the Brigade/Commandery and the training facilities and partially on the eastern boundary of the East Perth site.
Mr Gill's letter also enclosed a sketch known as SK1. This is a schematic site plan showing a three‑storey building situated on the reduced site after resumption. Broadly described, provision in made for a three‑storey Brigade building depicted as a rectangle situated to the south of the existing depot, linked to a training area of two floors established above a proposed undercroft parking area, and with some open parking spaces situated between the existing depot and the undercroft and upon the eastern boundary.
SK1 portrays a three‑storey Brigade building with each floor being 345m2. The training area of two floors (with undercroft below for parking) presumes that each floor will be 400m2. When these figures are added up, it emerges that in Mr Gill's view, 1835m2 in all is required to accommodate the claimant.
Mr Gill gave evidence at the hearing in which he outlined his reasoning. In his opinion, a review of the relevant planning controls revealed that it was necessary to provide a minimum of 33.35 carparking bays on the East Perth site in order to service a three‑storey development of the kind proposed.
In Mr Gill's view, the requirements of the claimant in respect of the Brigade/Commandery area and training areas were reasonable. The only way they could be accommodated on the reduced site was via a three‑storey building of the kind depicted on SK1 amounting to 1835m2 in all. He provided a revised summary of the costs involved, the figure on this occasion being $415,440.
The Court digresses to note that there was a good deal of controversy at the hearing concerning the claimant's requirements in respect of floor area. The BMA study noted that the total area required for the Commandery and related functions was approximately 800m2 which "may" be single or two storeys. It went on to refer to training facilities that could be directly associated with the Commandery at ground floor or first floor level. Having regard to various constraints, the BMA study and related sketches seemed to presume that the second and third stages of the development would bring into existence a two‑storey structure. (The BMA study contains a reference at page 5 to a planned gross floor area of "approximately 1585 sq m".)
Significantly, par 5 of the claimant's answers to request for further and better particulars contained a plea that "the building which would have been constructed if land had not been resumed would have been a total floor area of 1635 metres squared over two floors, including 35 metres squared of circulation space". Paragraph 4 asserted that the building to be constructed as a result of the resumption was a three‑storey building to include an undercroft for carparking and a lift, it being further asserted in the plea that "no lift was required in initial plans as sufficient facilities could be located on ground floor to comply with disability access codes." It is important to note, however, that the Federal Disability Discrimination Act 1992 was enacted after the BMA study and, not surprisingly, there are no indications in the BMA study itself that issues of this kind were considered. Indeed, as will become apparent in due course, very little evidence was brought before the Court to substantiate the proposition that no lift would be required in respect of a two‑storey building.
Mr Gill's evidence concerning the extra floor areas and building costs required for the three‑storey building depicted on SK1 was supported by the evidence of a quantity surveyor, Mr Rafferty, who provided detailed costings as to the items in contention. The tenor of Mr Rafferty's evidence is set out in the following paragraph. He was responding to Mr Gill's reports and SK1 which pointed to a total floor area of 1835m2 (being Brigade 3 x 345; Training 2 x 400m2 ). The stance of these experts was that with the addition of another floor, the need for circulation space is increased, this being related to foyers, a lift, stairwells and passages. Mr Rafferty proceeded on the basis that the additional circulation space required was 165m2.
In January 2000 Hugh Gill requested that Mr Rafferty determine the additional costs that would be incurred if a three‑storey structure was constructed in lieu of the two‑storey structure shown on the drawings known as SK2. Mr Rafferty was also provided with a report prepared by Soil and Rock Engineering Pty Ltd and calculations and notes prepared by Mr Gill in relation to additional piling requirements.
Mr Rafferty's calculations were based on the areas that were measurable from the drawings. The rates used by him were based on his experience as a quantity surveyor. He used 1995 figures and reduced them by an amount of 3.5 per cent in order to arrive at a figure applicable to the date of valuation, namely, 8 February 1993. This appears in his report dated 25 August 2000. Mr Rafferty said in evidence:
"13.The 3 storey structure required additional foundations, the open car park was cut back in size necessitating an undercroft car park. The additional building height meant that a lift was required within the building. Consideration was also to be given to the extra penalty costs required to build a 3 storey structure. Finally, additional professional fees had to be included in the extra costs.
14.Specifically I was asked to calculate the construction cost estimate for building a 3 storey instead of a 2 storey development on the site. This incorporated increased costs in relation to the foundations, undercroft parking, third floor penalty costs, circulation areas, professional fees and lifts and equipment.
15.…
16.…
17.To calculate the cost of construction I used Rawlinsons Australian Construction Handbook (11ed, 1992) and Rawlinsons Australia Construction Handbook (13ed, 1995) as a guide. In my experience, Rawlinsons figures are a very good guide, reference for estimating purposes but are not definitive. Therefore, I also provided Hugh Gill with my estimation of my opinion of the likely costs. This is indicated as the 'BRA' figures on PGR3.
18.I have seen Hugh Gill's developmental plans described as SK1 and SK2 for stages 2 and 3 of the development.
19.I calculated an estimate of the cost of construction for the proposed St John development in August 2000 based on these plans, the report by Soil and Rock Engineering Pty Ltd … and discussions with Mr Gill.
20.…
21.I consider that the development plan prepared by H Gill in accordance with the clients' requirements uses the most obvious, simple and economical ways from a construction costs viewpoint to fit the same amount of floor and parking space into the reduced area of land."
Mr Rafferty's report dated 25 August 2000 (being a revised version amended during the course of the hearing) arrived at the figure of $384,736 contended for by the claimant as follows:
57
The claimant's case was that the two‑storey building depicted on Mr Gill's SK2 (the proposed development on the assumption no portion of the land was resumed) would have cost $1,505,197.35. Having regard to Mr Rafferty's costing the additional costs required to establish the three‑storey development depicted on Mr Gill's SK1 (the site after resumption) amounted to $384,736 with the result that the overall cost would now be $1,889,933.78.
Claimant's Requirements
In addition to leading evidence from the chief executive officer, Mr Kaye‑Eddie, and the property officer, Mr Nicolaides, concerning the claimant's plans for the East Perth site, the claimant led evidence from Mr Ahern, who is currently the finance administration director of the claimant.
Mr Ahern provided a description of the claimant's requirements in the course of conducting its various operations. He noted that the proposed development for East Perth includes provision for 34 car bays, this being "the minimum requirement we could effectively function with." He testified to a lack of available parking in the immediate vicinity of the East Perth depot. He emphasised that if the site was redeveloped, it was necessary for the ambulance depot to operate in isolation from the other activities on the site so that the movements of ambulances would not be impeded.
The strategy underlying Mr Gill's concept as depicted on SK1 was that ambulances, under such a redevelopment, would now enter the site from Glyde Street, to be able to utilise the bowser, and then enter the parking bays lying within the depot, without unnecessary "backing and filling".
Mr Ahern said that in the event that the claim for compensation was not resolved in the association's favour, the association would more than likely take steps to re‑establish the Wellington Street facilities, either totally at another site or partially at the central depot site and partially elsewhere. Compromising ambulance manoeuvrability was not an option that the claimant would entertain.
He also said that:
"If we had an opportunity to repurchase the land, and we had been informed of the cost of building the three‑storey building necessary to meet all our requirements, I would have recommended to the committee that SJA purchase the land even at a greater cost than the additional storey would have cost as the increased outgoings would have meant purchasing the land and having lower running costs would have been a better investment in the long run."
Mr Ahern was cross‑examined at some length as to this aspect of his evidence. He was not able to point to any specific calculation or analysis which would substantiate an alleged benefit to the claimant or paying a large amount above market value for the subject land. He continued to affirm, however, that there were obvious benefits, having regard to the nature of the claimant body, in having the various activities being conducted at Wellington Street transferred to the East Perth site. When he was asked whether the claimant would in fact be prepared to pay a figure of close to $400,000 simply to resolve a problem about manoeuvrability which seemed to be the claimant's concern about the respondent's various options, he said the claimant would be prepared to pay such a figure because an efficient conduct of the ambulance service in conjunction with the claimant's other activities was central to the claimant's purpose and to the maintenance of its enrolment figures. Mr Nicolaides said under cross‑examination, for much the same reasons, that the claimant would be prepared to pay such a figure, bearing in mind that there were no other suitable sites available.
Mr Ahern said in re‑examination that if it came to a choice of splitting the services between two sites, then, without hesitation, he would recommend the Executive Committee pay the additional $400,000. Looked at over the life of the buildings to be constructed on the site, this was a relatively small premium to pay as against "the value of having the volunteers and the interaction that goes with all being on the one site."
The Respondent's Position
The respondent challenged various aspects of the claimant's case. We will return to the details of the evidence in more detail later. For the moment, suffice it to say that the respondent adduced evidence from an expert witness concerning the effect of the relevant planning controls. It also adduced evidence from a quantity surveyor, Mr Sanders, as to the valuation of the alleged additional costs. Further, it led evidence from an architect instructed by the respondent's solicitors, Mr Wilson, as to whether it was possible to meet the claimant's reasonable requirements not by establishing a three‑storey development upon the site of the kind proposed by Mr Gill, but by establishing a development of two storeys sufficient to house the Brigade/Commandery and training facilities, with related parking.
Mr Wilson's understanding of the claimant's requirements was derived from various documents including the BMA study and the pleadings. He concluded that the total floor area required for a two‑storey building based on the BMA study was 1170m2. The total area required for a two‑storey building without a lift based on the claimant's further and better particulars was 1635m2. The total area required for a three‑storey building with a lift was 1725m2 (that is to say, 110m2 less than the figure of 1835m2 contended for by Mr Gill on SK1).
The respondent's stance in regard to on‑site parking was that the planning controls allowed for a minimum compliance of 29 bays, although the general thrust of Mr Wilson's evidence was to canvass alternatives to the Gill proposal upon the basis that 32 bays would be appropriate for the claimant's requirements.
We pause to note that in the course of testing Mr Gill's proposal, Mr Wilson prepared a series of sketches on which were depicted various options or alternatives as to how the requirements of the claimant could be met by establishing a two‑storey development on the site. These options were depicted on SK1 to SK18, with a further option, SK20, being introduced during the course of the hearing.
The first 18 options presumed that ambulances would enter the East Perth site from Brook Street. Options 1 to 6 were said by the claimant to be unsatisfactory because the existing depot was not depicted correctly, and, in the final analysis, no reliance was placed upon them. The claimant's major objection to the remaining options was that the ambulances entering from Brook Street would have to pass through a parking area being used by first aid trainees and other visitors to the site and this was unsatisfactory in the case of an emergency service.
It is important also to keep in mind that options 9 to 17, which were said in Mr Wilson's report dated 4 September 2000 to be plans meeting all the relevant building requirements as at February 1993, presumed a total floor space requirement of 1725m2 or less, with the result that, in any event, there is an issue between the parties as to the sufficiency of the floor space. Mr Gill's position was that at least 1835m2 was required for a three‑storey building in order to achieve the same usable floor space of 1635m2 required for a two storey building.
Further, the claimant contended, under the respondent's options, entry via the laneway from Glyde Street was not satisfactory because these options did not allow a sufficient turning circle or manoeuvrability for ambulances in the vicinity of the petrol bowser. We pause to note that in regard to this controversy, Mr Gill produced a further sketch, SK3, depicting the required turning circle. He went on to suggest in his evidence that the Wilson options 1 to 18 did not allow sufficient manoeuvrability, having regard to the dimensions depicted on SK3.
It was in the context of this controversy that the respondent adduced a further option by Mr Wilson, SK20. Mr Wilson had this to say about SK20:
"1.I have previously provided two reports for the purposes of the proceedings between the St John Ambulance Association in Western Australia Incorporated and the East Perth Redevelopment Authority. These are dated 4 September and 12 September 2000.
2.Since the commencement of the proceedings, I have been present in Court. I have heard the evidence of Mr Nicolaides, Mr Ahern and Mr Gill. In particular I have heard comments about previous plans I have drawn up.
3.The main concerns which I have heard relate to the ability of an ambulance to manoeuvre into the Depot on returning from a callout and the ability of an ambulance to manoeuvre into position next to the bowser for the purposes of filling up with petrol and washing down.
4.I have attempted to address both concerns in a further plan which I have produced. This is marked SK 20 and is attached to this statement. It is a further refinement of SK 19, which I produced for the purposes of discussion with counsel for the East Perth Development Authority.
5.This plan is similar to my previous plan SK 15.04, which is attached to my report dated 4 September 2000. It has the same floor area (1635 m2) and the same presentation to Brook Street.
6.However, I have also reduced the distance between the proposed building and the existing Depot by approximately 1 metre. The area of undercroft parking is slightly reduced compared to SK 15.04.
7.By making these adjustments, I have been able to re‑arrange the 32 proposed carbays to allow ambulances easier access to the Depot upon returning after a callout, and also to allow ambulances easier access to the bowser for the purposes of obtaining petrol and washing out.
8.The arrangement shown on SK 20 could have a remote‑control boom positioned as indicated upon the plan in order to prevent members of the public entering the carpark area near the bowser. The carbays within this area could be reserved for ambulance crews and staff."
Counsel for the claimant and Mr Gill conceded that SK20 did allow a sufficient turning circle and manoeuvrability. The claimant's witnesses contended, however, that the effect of this extra allowance for turning was to raise additional issues as to parking and situation of the two‑storey development proposed under the Wilson model on SK20, which meant that SK20 could not be regarded as a workable development of the site.
The criticisms of SK20 advanced by Mr Gill included the following:
"4.After allowing 400m2 per floor for Brigade and Commandery this would leave an area on each floor for training as follows:
Ground floor 252.5m2
First floor550.5m2
Total803m2
Such a small training area on the ground floor is not acceptable as we require a virtual duplication of training facilities on each floor. This is required as each training room must cater for the same number of occupants and accordingly must have similar sized support facilities and amenities.
We will also not be able to comply with the Disability Discrimination Act nor the Building Code of Australia by supplying a reasonable proportion of our training facilities at ground level to accommodate disabled students and staff. Even if this imbalance was accepted an elevator would still be needed to access the full sized training rooms which would both have to be on the first floor, with administrative officers etc taking up the smaller area below.
5.The attached marked up sketch 20 also shows that only 30 cars can be located on the site. The car bay on BGW's SK2O are undersized and in some cases would have columns in bays to support the first floor.
6.SK2O shows zero setback to Glyde Street and a stepped facade to the boundary on Brook Street. As stated previously our client always planned on having a landscaped setback as indicated on our SK1 and as originally required by the City [sic] of Perth.
7.The north office wall is located only 4.5m away from the south wall of the depot. This wall in the depot includes bedroom and amenity areas windows.
The BCA clause 3.2 states that windows facing each other in these circumstances must have a minimum distance between of 6m or be fitted with wall wetting external sprinklers, automatic fire shutters - or a blank wall to the facing portion of the office wall."
He finished up by saying:
"9.In summary it is apparent that the building in SK20 is deficient in area, is jammed between the west, south and east boundaries and the depot, with setback difficulties, that cannot be overcome without an extreme loss of amenity or another reduction in area to increase the setbacks.
To have a building design with such constraints thrust upon you before design development (at which stage considerable flexibility is required to overcome and space planning and statutory problems) is unacceptable.
Our SK1 provides room to adjust dimension in any direction and maintains unrestricted windows to all external elevations."
Both parties led further evidence from their quantity surveyors concerning the costing of the development depicted upon the Wilson SK20 plan. We pause to note that the differences between the parties in that regard were summarised in a document headed "Notes on BGW Report". These notes as adjusted in the final moments of the hearing suggested that if the Court held that SK20 was an acceptable solution, then, even so, on the claimant's costings via Rafferty, the total building costs would be $1,692,135. This figure was arrived at pursuant to calculations set out in Mr Rafferty's letter dated 20 September 2000 (exhibit 37) being a total construction cost of $1,555,346 as increased by the sum of $136,789 in respect of "additional requirements" such as lift to service two floors, wall wetting fire sprinkles and additional undercroft and circulation areas.
The lift was said to be necessary, notwithstanding that SK20 depicts a two‑storey building, because SK20 allows for different sized training areas. Absent exact replication on both floors, a lift must be provided in order to comply with the disability rules. The sprinklers were said to follow from the reduction of the space between the depot and the proposed building to the 4.5m. The claimant's case was that when the figure of $1,692,135 was reduced by $1,505,197.35 (being the Rafferty costing of SK2), the claimant's claim for additional costs would be $186,938. This figure was to be viewed as a "fall back" position, that is to say, as an alternative to the principal claim of $384,736. (The Court notes in passing that apart from Mr Rafferty's so‑called "additional requirements", exhibit 37 indicates that Mr Rafferty's costing of SK20 exceeded the figure contended for by the respondent's Mr Sanders by $61,371).
Statutory Provisions and Principles
Before turning to the pleadings exchanged by the parties, and identifying the matters in issue, it will be useful to look briefly at the statutory provisions applicable to the present case and at some of the previously decided cases bearing upon a claim for special value. For ease of reference, and bearing in mind that the title of the Act was changed after the resumption, we will refer to the Land Acquisition and Public Works Act 1902 by its former title, the Public Works Act.
Section 63 of the Public Works Act provides that in determining the amount of compensation regard shall be had solely to various matters. By s 63(a), regard shall be had to the value of the subject land as at the date of first entry (in this case being 8 February 1993). By s 63(b), regard shall be had to the damage, if any, sustained by the claimant by reason of the severance of such land from the other adjoining land of such claimant. We note as to an issue of this latter kind that severance arises where part of an owner's land is taken by compulsory process and part is retained. The owner is entitled to compensation for the part taken. If the value of the retained land is adversely affected by the severance, the owner is entitled to compensation for that adverse effect: G & R Wills & Co v Adelaide City Corporation (1962) 9 LGRA 88 at 93.
Section 63(c) of the Public Works Act provides that where the land is taken or resumed compulsorily and where the Court is of the opinion that the application of the provisions of the Act would not result in the assessment of compensation adequate to meet the special circumstances of the case, the Court may determine such compensation as it considers adequate for compulsory taking.
The decided cases suggest that this provision allows the Court to depart from the other heads of compensation when the Court in its discretion concludes that special circumstances of a particular case are such that the more normal methods of assessment of compensation will lead to an inadequate result: R v Compensation Court (WA); Ex parte State Planning Commission re Della Vedova (1990) 2 WAR 242; D'Amico v Shire of Swan Guildford [1969] WAR 183; Cook v City of Stirling [1991] 4 WAR 469 at 475.
Section 63(c)(ii) provides that if a court is determining the amount of compensation, the Court may include in the award such amount, not exceeding 10 per cent of the amount of compensation determined under this section, as the Court deems proper for compulsory taking. A solatium of this kind may be ordered where an owner has to recast its plans as a result of the resumption and is likely to suffer unquantifiable loss and inconvenience: Cook v City of Stirling (supra); Joondalup Gate Pty Ltd v Minister for Lands, unreported; SCt of WA; Library No 960406; 31 July 1996. By s 63(e), interest is payable on the total of the compensation award.
We have already indicated that the principal controversy between the parties in the present case, having regard to the pleadings and the manner in which the case was argued at trial, concerns the concept of "special value". In order to understand that concept, it is necessary to look firstly at the principles emerging from the decided cases as to how the value of land resumed is to be determined.
In that regard, a familiar point of reference is the decision of the High Court in Spencer v Commonwealth (1907) 5 CLR 418 which suggests that the market value of the land is determined by having regard to the price a willing purchaser would pay and the sum acceptable to a willing seller. In that case, Isaacs J said this at 441:
"The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. 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."
In other words, before turning to the concept of "special value", one must keep steadily in mind that under the process just described of arriving at market value, both parties to the hypothetical transaction have notionally made allowance for various qualities attaching to the land. Spencer's case will cover most situations because, although it assumes a willing vendor (the dispossessed owner), it does not contemplate one who would lightly relinquish a property which had a particular value to him for less than that value.
Nonetheless, over the years a separate principle has emerged that the resumed land may have a market value determined by the hypothetical willing seller and willing buyer test, but may also have a special value to the owner over and above its market value.
The principle has its roots in Pastoral Finance Association Ltd v Minister [1914] AC 1083 where the Privy Council placed the emphasis on the principle that the value to be established is the value of the land to the owner dispossessed. In consequence, a vast body of common law principle has been developed by the courts to give meaning to the concept of special value to the owner. See Brown: Land Acquisition (4th ed) par 3.17.
In the Pastoral Finance case (supra), the Privy Council held that the claimants were entitled to receive compensation based on the value of the land to them. In that case, they had bought the land with a view to transferring their business to it, but before they had erected the necessary buildings, the land had been resumed. The Privy Council said that no doubt the suitability of the land for the purpose of their special business affected the value of the land to them, and the prospective savings and additional profits which it could be shown would probably attend the use of the land in their business, furnished material for estimating what was the real value of the land to them. But that was a very different thing from saying that they were entitled to have the capitalised value of these savings and additional profits added to the market value of the land in estimating their compensation. They were only entitled to have them taken into consideration so far as they might be fairly said to increase the value of the land. The Privy Council went on to say at 1088:
"Probably the most practical form in which the matter can be put is that they were entitled to that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it."
The Pastoral Finance principle of what the prudent man would be willing to give for the land rather than fail to obtain it has been followed and applied in many other cases. It has become well settled that the dispossessed owner is entitled to the market value of the land under the Spencer principle or its value to him or her, whichever is the greater. The Spencer test envisages two equal parties at the negotiating table reaching an agreed price for the land. The Pastoral Finance test places the emphasis on the hypothetical seller. It remains an objective test, but the willing buyer plays a lesser role. See Brown: Land Acquisition (supra) at par 3.17. The price must represent the full value of the property to the vendor, so that slightly to adapt the words used by Lord Moulton in delivering the judgment of the Privy Council in Pastoral Finance, probably the most practical form in which the matter can be put is that the vendor is entitled to that which a prudent purchaser in the position of the claimant would have been willing to give for the property sooner than fail to obtain it Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358 at 362; Joondalup Gate (supra).
The case of Dangerfield v Town of St Peter's (1972) 129 CLR 586 is an example of land which had a special value to the owner who was able to earn revenue by using it as a rubbish dump. It is important to note, however, that in relation to "special value", events subsequent to resumption are of no relevance except to the extent that they provide some evidence of what was foreseeable by the owner in calculating what he would have accepted or offered at the time of the resumption. It also seems that the value to the owner approach is not limited to improved land. McSweeney v Commissioner for Railways (1914) 14 SR (NSW) 18; Minister for Army v Parberry Henty & Co Pty Ltd (1945) 70 CLR 459 at 514; Housing Commission of New South Wales v Falconer (1981) 1 NSWLR 547 at 563; Yates Property v Darling Harbour Authority (1990) 70 LGRA 187 at 201.
A leading authority in this area of the law is the recent decision of the High Court in Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575. The reasoning of the High Court suggests that unless a claimant shows that another method of determining the value of the land should be adopted, the generally accepted approach is to apply the market value approach in Spencer's case. Where a claim for additional special value is concerned, the reason why there is an onus upon the claimant to substantiate the claim is because the claim is based on the vendor's peculiar perspective. Thus, a claimant may not be entitled to compensation for special value on the basis that its land could, in the future, be subdivided because this would be taken into account by properly applying the Spencer test. This seems to be the reason why three members of the High Court in Boland doubted Kennedy Street Pty Ltd v The Minister [1963] NSWR 1252.
Further, if the claimant wishes to say that the special value of the land is to be measured by the cost of developing other land to achieve the same facilities as it planned for the resumed land, this is a claim for consequential losses caused by the resumption. The claimant must show that there is a causal connection with such loss. Director of Building and Lands v Shun Fung Iron Works Ltd (1995) 2 AC 111 at 126. For example, if there is other available land which would allow the claimant to pursue its business equally well, the claimant would be unable to show that the resumption of land has caused any consequential loss. Realty Corporation Ltd v The Commissioner for Main Roads (1940) 14 LGR (NSW) 204 at 205. Accordingly, the claimant must show, on the balance of probabilities, that this is a type of loss which it has sustained, or will in the future sustain.
Evidently, if the resumption actually deprived the claimant of a facility which already existed, it is straightforward to demonstrate a causal connection with a consequential loss which has been incurred, as, for example, the cost of building an equivalent amount of floor space to the area resumed. G & R Wills & Co Ltd v Adelaide City Corporation (supra). It was against this background, that the respondent in the present case submitted that where no facility has actually been affected by resumption, and all that has happened is that a building which was planned would need to be constructed differently, it would be insufficient to demonstrate the necessary causal connection to prove that construction of the new facilities was "something which was merely hoped might be done at some indefinite time in the future." See Ministry for Housing in New South Wales v Falconer (supra) at 555.
We have already noted that the Pastoral Finance principle relates to what a "prudent" person would do. This prompted the Compensation Court in Joondalup Gate (supra) to suggest that regard is had, both for market value and special value to the owner, to the objective standard of a hypothetical purchaser in the position of the claimant. In the present case, the respondent submitted that another way of expressing this is to ask whether it would have been reasonable for the claimant to have proceeded to construct a three‑storey facility after the resumption, bearing in mind that the law expects those who claim recompense to behave reasonably. Thus, in Sung Fung Iron Works (supra) Lord Nicholls said, at 126:
"If a reasonable person in the position of the claimant would have taken steps to eliminate the loss, and the claimant failed to do so, he cannot fairly expect to be compensated for the loss or the unreasonable part of it. Likewise if a reasonable person in the position of the claimant would not have incurred, or would not incur, the expenditure claimed, fairness does not require that the authority should be responsible for such expenditure. Expressed in other words, losses or expenditure incurred unreasonably cannot sensibly be said to be caused by, or be the consequence of, or be due to the resumption."
The respondent submitted that what a reasonable person would do is to be measured by reference to economic considerations. Callinan J defined "special value" in Boland in the following way at par 292:
"The special value of land is its value to the owner over and above its market value. It arises in circumstances in which there is a conjunction of some special factor relating to the land and a capacity on the part of the owner exclusively or perhaps almost exclusively to exploit it … there will in practice be few cases in which a property does have a special value for a particular owner. Obviously neither sentiment nor a long attachment to it will suffice. The special quality must be a quality that has an economic significance to the owner. A possible case would be one in which, for example, a blacksmith operates a forge in the vicinity of a racetrack on land zoned for residential purposes as a protected non‑conforming use, the right to which might be lost on a transfer of ownership or an interruption of the protected use. Such a property will have a special value for its blacksmith owner, and perhaps another blacksmith who might be able to comply with the relevant requirements to enable him to continue the use but to no one else."
In a recently published article by A E Radford: Land: Market Value and Special Value in the High Court 74 ALJ 773 (November 2000), the learned author explores the implications of Boland(supra) for special value claims. The learned author submits that special value is a quality of the land itself which is special only in the sense that it is a potentiality demonstrated by the use to which it has been put by the owner. This head of claim must be carefully distinguished from disturbance (which relates to costs flowing from the disruption of some business or activity), severance (which relates to damage caused to the land remaining) and solatium (being a sum of money to make up for loss or inconvenience).
In regard to a special value claim, properly characterised, the author goes on to submit that there must usually be an existing active use of the property compared to a proposed one before any concept of special value will enter the debate. He concludes by saying, at 780:
"Special value in lands compensation claims can no longer be based upon incurring of expenditure in respect of a planned development of a vacant site. This was the tendency which had crept into special value claims through the aegis of decisions such as Kennedy Street and Baringa. By the removal of these authorities the trilogy of the Yates Property land claim decisions themselves are left as an isolated and discredited instance as an authority of special value in respect of expenses incurred before resumption and other expenses after acquisition in respect of resumed land which was then vacant.
The solution is now, that to find special value, one must look to see whether there is some feature of the land itself which will excite a higher offer from a potential purchaser over and above the market value of the land. One must thus look, as always, beyond the 'one‑liner' traditionally extracted from Pastoral Finance, but which, historically was applied as if it was definitive. However, the claim must have nothing to do with the vigour of the personality of the owner nor sentiment for the land, nor the length of attachment of the owner to the land nor with the separate concepts of disturbance, severance or reinstatement of solatium. It must also be more than a potential of the land going to market value."
Before leaving this summation, we observe in passing that the learned author seems to accept that the Pastoral Finance principle, properly understood, continues to apply, with the result, as in the example of the blacksmith's forge given by Callinan J, the claimant is entitled to that which a prudent purchaser in the position of the claimant would have been willing to give sooner than fail to obtain the property. In other words, the blacksmith owner, or the proprietor of land suited to an unusual activity which cannot be easily accommodated on another site, are in a position to advance a claim for special value, provided that subject land is already being used for the special business or unusual activity.
Issues
The claimant in the present case contended that the East Perth site had a special value to it. The site was the subject of an existing use, in that part of the site was already being used as an ambulance depot, and the balance of the site had been laid out in a manner allowing for further development. The East Perth site represented an opportunity for the operations being conducted at Wellington Street to be moved to an alternative location situated in the central metropolitan area. Importantly, the central ambulance depot - the busiest depot - was situated close to major highways.
The claimant submits that because it is not able to move elsewhere (despite endeavours to find another site), the extra cost involved in establishing its operations upon the East Perth site in accordance with the Gill plan represents the amount that it would be prepared to pay to re‑acquire the resumed land immediately after it was resumed in the manner contemplated by the Pastoral Finance principle. The evidence of Mr Ahern, mentioned earlier, is particularly relevant to this aspect of the matter.
The claimant says that important relevant factors which would have persuaded it to pay the sum in question are that it would be inefficient and costly to locate the Brigade and Commandery and the first aid training facilities on some other land. If that happened, there would be a doubling of costs. Extra stamp duty would have to be paid on the purchase of the other land. Facilities such as toilets and other staff facilities would have to be duplicated on both sites. It would also duplicate administrative costs and lead to inconvenience and unnecessary travel between the two properties.
Further, the claimant would lose money spent on the ambulance depot if it sold the existing site and built on another one, even if another site could be found. The ambulance depot was purpose‑built. It was not a building which can be used in its present form for other purposes. In fact, negotiations with Bovis Homes in the hope of finding another location nearby revealed that the claimant would not recoup the value of the ambulance depot building if it sold the East Perth site. A sale of the remainder of the East Perth site with the ambulance depot on it would result in a loss to the claimant, even if other land could be found.
The claimant submitted also that it was essential that the Brigade and Commandery and first aid training facilities and associated parking be accommodated on‑site without interfering with ambulance movement. Ambulance response times are critical. Any interference with their free movement will delay response times.
In essence, then, the claimant contends that for many years past it has been conducting an unusual activity on the site, namely, an ambulance service. The site is suited to the activity and this has economic implications. It is reasonable in the special circumstances of the case for the claimant to persist with its original intention of moving the entirety of its Wellington Street operations to the site, for the work and activities of the organisation viewed as a whole are properly linked to the active use of the ambulance depot, this being an essential and visible manifestation of the claimant's underlying credo. The effect of the resumption is to require the claimant to incur additional building costs of $384,736 in order to effect the removal. This figure is said to represent the special value because the claimant or any prudent and reasonable purchaser in the position of the claimant would be prepared to pay the amount in question, being an amount in excess of the market value of the site, so as to relieve itself of the burden imposed by the additional building costs.
Put shortly, because the claimant is not able to move elsewhere (despite endeavours to find another site) the extra building cost is, at least, the amount the claimant would have been prepared to reacquire the land immediately after it was resumed. When the matter is viewed in that light, it becomes apparent that the claim should be characterised as a special value claim rather than as a disturbance claim or severance claim. It is a claim for special value because the claimant brings to account considerations referable to special features of the land itself. For ease of reference, the Court will henceforth refer to the matters referred to in this and the preceding paragraphs under the heading "Issues" as the "essence of the claimant's case".
The respondent answered these contentions by saying that there was no persuasive evidence to show that the claimant firmly intended to construct the proposed facilities on the East Perth site. No specific plans had been set in motion and the minutes do not establish clearly that the governing body of the claimant made a decision to purchase the East Perth site with a view to moving the entirety of the operations at Wellington Street to the new site. Further, there were financial restraints and organisational reasons (such as the concern of aged members) weighing against such a finding.
The respondent submitted also that a reasonable person in the position of the claimant would not have paid the additional costs for building a three‑storey facility. Matters relevant to this view of the matter were that the site was, at all relevant times, subject to a reservation which could have been discovered by proper searches. No reasonable person could assume that the removal of the northern city bypass reservation upon the commencement of the EPRA Act would mean that no other reservation would affect the site. Further, the claimant could have operated the Brigade and Commandery facility and a first aid training facility from another location. The requirements of the claimant (as at 1993) could reasonably have been accommodated in a two‑storey facility, which would have been much cheaper to construct than the proposed three‑storey facility.
The respondent submitted further that to the extent that the claimant maintains that it would have paid an extra amount to have all of the facilities on one site, due to its "culture" this should be disregarded as a subjective consideration akin to emotional attachment to a particular piece of land.
The respondent submitted further that even if the claimant succeeded in proving that it would have proceeded to construct the proposed Brigade and Commandery and first aid training facility on the East Perth site at some definite point in time and that a reasonable person in the claimant's position would have paid the additional amount claimed in order to avoid the surplus costs of constructing the proposed facilities on the reduced site, it still does not follow that the claimant is entitled to the full costs of building a three‑storey facility. Recovery of such costs would be to adopt a reinstatement approach to compensation, which is not justified where, at the time of resumption, there are no buildings to be reinstated. See Housing Commission of New South Wales v Falconer (supra) at 575. The issue is the value of the land to a prudent purchaser, having regard to the consequential loss to the claimant caused by having to build a three‑storey building.
The respondent submitted that a prudent purchaser would take steps to be placed in an equivalent position to the position occupied before resumption, namely, to have an equivalent facility in all respects. Therefore, in this case, the maximum additional amount a prudent purchaser would pay for the resumed land would be the cost of building a three‑storey building, less the market value of the land resumed. A prudent purchaser in the position of the claimant would have given consideration to upgrading and continuing to use the premises at Wellington Street.
It is apparent from this review of the relevant principles and the respective contentions of the parties that the Court is required to resolve a number of discrete issues. There appears to be a broad acceptance by the respondent that in certain circumstances a claimant is entitled to press a claim for special value. The respondent also seems to accept that a claim for special value may be available to the claimant in the circumstances of the present case if it is able to satisfy the Court upon the balance of probabilities that the East Perth site had a special significance for the claimant in financial terms. Nonetheless, the respondent contends that the evidence does not support the claimant's claim for special value.
Against this background, the claimant must prove that as at February 1993 it had formed a definite intention to relocate the remainder of its facilities from Wellington Street to the East Perth site, where the ambulance depot was relocated in 1990. With a view to avoiding repetition, the Court will make an initial finding in regard to this issue that the claimant is the party affected by the resumption and is the party entitled to compensation that may be awarded. The land was resumed from the claimant as the title holder and apparently the beneficial owner, and although, since 1989, the claimant's role has arguably been reduced to that of property trustee, it is quite clear that the various branches comprising the group are essentially under the claimant's control and acting in accordance with its credo. The Court will proceed from the premise implicit in this finding in resolving all issues. We will call this "the relocation issue".
The claimant must also establish, consistently with the plea reflected in its particulars of claim, that the floor space reasonably considered necessary in February 1993 for the accommodation of the facilities to be relocated to the East Perth site, namely, the Commandery/Brigade and training centre, was the area reflected in the Gill plan, principally SK1, as a result of instructions received from Mr Nicolaides in 1995 after the resumption. We will call this "the floor space issue".
If the floor space was reasonably necessary for the intended purpose, then the claimant must establish that it could only be provided at a cost greater than would have been the cost, had the subject land not been resumed. In other words, the claimant must establish, consistently with its particulars and the proposal reflected in Mr Gill's SK1, that as a consequence of the resumption it became necessary to establish a three‑storey Commandery/Brigade building with adjacent two‑storey training centre plus undercroft in order to accommodate the claimant's reasonable requirements. We will call this "the construction issue".
We pause to note that the construction issue embraces a number of subsidiary issues. It will be apparent from the earlier narrative that there is a difference of opinion between the parties and their advisers as to whether a three‑storey building in accordance with the Gill plan is necessary. The respondent, via its architect, Mr Wilson, has put up 19 options, including the final option depicted on SK20, which is said to resolve any difficulties concerning ambulance manoeuvrability, with a view to persuading the Court that the claimant's accommodation requirements can be satisfied without carrying into effect the Gill plan. We will call this "the two‑storey building issue".
Further, even if it be held that the Gill plan is the only workable proposal, a further question arises as to whether the additional costs of implementing such a plan amount to $384,736 as contended for by the claimant. This will involve a consideration of the items described as extras and the costings undertaken by the respective quantity surveyors. We will call this "the costs issue".
Further, contrary to what was depicted on SK20, 32 parking bays could not be provided, as some of the bays would be obstructed by columns required to support the training area building. These columns and the staircase to the undercroft would have the effect of reducing the bays to 30 bays and this would not represent a sufficient compliance with the relevant planning controls, notwithstanding the evidence of Mr Melsom from the respondent authority to the effect that 29 bays only were required to conform to the relevant planning controls.
The Court gave careful consideration to these evidentiary issues. In the final analysis, the Court was satisfied that SK20 was not sufficient to provide the claimant with its reasonable requirements and, therefore, could not be regarded as a workable alternative to the Gill proposal depicted on SK1. The claimant was being asked to accept various compromises, both as to parking and as to adjustment of training areas which seemed to be unreasonable. The Court was also obliged to keep in mind that the Wilson options were directed to a limited purpose, namely, a response to the Gill proposal. Mr Wilson did not put up a positive alternative as to how the claimant's requirements could be addressed. The Court also feels obliged to take account of the evidence given by Mr Gill that some flexibility is required. To have a building concept hedged about with some rather tight constraints before design development is unwise and "unacceptable" because in the ordinary course of events considerable flexibility is required during the design phase to overcome planning and statutory problems.
The Court pauses briefly to note that if it be wrong in the conclusion just expressed, with the result that any costings of the construction works should proceed from the premise that SK20 represents a suitable response to the claimant's requirements, then it is necessary for the Court to make some determination as to whether any additional costs of construction flow from the costing of SK20, bearing in mind that there was a degree of controversy between the quantity surveyors in this respect. It follows from earlier discussion that the claimant's position was that, even on this view of the matter, the additional costs amounted to $186,938. The Court will return to this issue later.
The Court is satisfied on the evidence and so finds that the Gill proposal on SK1 represents an appropriate and reasonable basis for implementing the staged development on the East Perth site with a view to meeting the claimant's reasonable requirements. This brings with it a finding that certain necessary elements of the three‑storey structure with undercroft carparking depicted on SK1 and contended for by Mr Gill had to be costed on the basis that they represented additional building costs. These are the items identified in earlier discussion commencing with Mr Gill's letter of 19 April 1995, in which he singled out as extras piling costs, undercroft carpark, third floor penalty, circulation area, lift and redesign costs. The Court notes in passing that, on Mr Gill's evidence, the lift installation had to be regarded as a necessary extra item in order to satisfy the requirements of the Building Code and Disability Discrimination Act. According to Mr Gill, the relevant rules require that a disabled person must not be treated less favourably than another person in regard to obtaining access to facilities in the building. Findings are now required as to whether the figure of $384,736, representing the value of the additional cost to the claimant, is reasonable.
As to that issue, the Court is satisfied and so finds that the costings undertaken by Mr Rafferty, as described in more detail earlier in these reasons, were reasonable.
There were only three significant areas of dispute, being the lift issue, the undercroft rate and the floor rate.
The Court was satisfied by Mr Rafferty's evidence that, in his experience, there was an extra cost involved in constructing the lift shaft and plant room which is in addition to the ordinary floor rate. Accordingly, if the Court were ultimately satisfied that a lift was necessary in a three‑storey building, but not in a two‑storey building, then the extra costs estimated by Mr Rafferty are justifiable in the Court's opinion. The Court will defer for consideration in due course the question of whether the claimant has established that a lift is not required for a two‑storey building, so that the lift depicted on SK1 should be regarded as an extra expense.
As to the undercroft rate, the claimant's submission was that two quantity surveyors had published material which suggested that for undercroft parking the rate was $290 minimum. A publication put out by Mr Sanders' own firm suggested that $290 to $340 was the appropriate rate. Mr Sanders sought to diminish this by saying that this included earthworks, but the Court was not convinced by his reasoning in that regard.
Mr Sanders also sought to diminish the rate by saying that some items of expenditure would not be included. In summary, the position was that Sanders contended $212 per square metre. Mr Rafferty proposed $255.73 per square metre. The Rawlinsons' position was $290 as an average and this was consistent with figures appearing in a publication put out by Mr Sanders' own firm. In the final analysis, the Court was prepared to accept the Rafferty figure. The Court was also satisfied that the rate proposed by Mr Rafferty in respect of the floor rate should be accepted.
It follows that, subject to the reservation concerning the lift, the Court was generally satisfied that $384,736 represented the additional costs of constructing the Gill proposal depicted on SK1 as compared to a development of the kind originally proposed as depicted on SK2. The Court has already noted, however, in summarising the various issues to be addressed, that this is not necessarily the end of the matter.
The Prudent Purchaser Issue
It is apparent from earlier discussion that the Pastoral Finance principle requires the claimant, acting reasonably, to satisfy the Court that a prudent person in the position of the claimant would have been prepared to pay in February 1993 an amount for the resumed land above market value rather than lose the land. This is said to be the special value to the owner.
The respondent reminded the Court in closing that the claimant's subjective wishes are not the issue. The question is: What would a hypothetical prudent party in the position of the claimant pay to keep the land? One could not necessarily presume that the claimant would be prepared to pay an amount representing the increased building costs in order to keep the land.
The Court set out the essence of the claimant's case in earlier discussion. The claimant relied strongly upon the evidence of Mr Ahern that rather than lose the resumed land, the claimant would have paid the full amount it would have had to pay out by way of additional building costs in order to retain the land and proceed with a development capable of meeting the claimant's reasonable requirements. In other words, the amount the claimant would have had to pay out in the circumstances of the present case would be the amount required to accommodate themselves on the reduced site, that is to say, the additional costs associated with establishing the three‑storey structure in place of the two‑storey structure in contemplation originally.
The claimant drew attention to various matters raised in evidence in support of its position. The premises at Wellington Street were inefficient and costly to maintain and, thus, viewing the matter as at 1993, a move to the East Perth site was appropriate. It was conceded by the respondent at the hearing that no other suitable site could be found. The Court is satisfied on the evidence that it was not reasonably possible to divide the facilities so that the ambulance depot remained at East Perth and the other facilities went elsewhere. This was unacceptable, having regard to the claimant's financial position, which obliged it to sell the city site in order to finance development on the East Perth site, and to important intangible factors such as recruitment, the efficient use of facilities, and the unnecessary duplication that would result if the Commandery/Brigade and training areas went elsewhere. The claimant also argued that in the context of land which had already been purchased for an outlay of approximately $700,000, and where proposed building costs of $1,889,933.78 were under consideration, a decision by the claimant to pay $384,736 above market value should not be regarded as inordinate.
The Court has already noted in its review of the relevant principles, with particular weight being given to the reasoning in Pastoral Finance and Boland and the views expressed by Mr Radford, that a claim for special value must be carefully distinguished from other heads of compensation, such as disturbance and severance, and that there must usually be an existing active use of the property and not simply a proposed use. Further, as in the example of the blacksmith's forge, the claim must be referable not merely to sentiment or to long association, but to some distinctive feature of the land having economic implications. There must also be a causal connection between the resumption and the amount claimed, and the Court must be satisfied that it was not reasonably open to the claimant to eliminate or mitigate the loss.
In the present case, the Court is satisfied that these requirements have been established on the evidence. The site was being used actively as an ambulance depot prior to the resumption and the land had been laid out to allow for the proposed development. There was a degree of ambiguity concerning the effect of the road reservation, but, for the reasons previously given, the Court is satisfied that the claimant was in a position to proceed with or obtain relief in respect of the proposed development. The activity on or to take place on the site was of an unusual kind. The location and special features of the site had economic implications bearing upon the efficient conduct of the claimant's activities, especially the ambulance service and training classes, and these could not be easily attended to by removal to another site or remedial action. It follows that the claim can potentially be regarded as a special value claim. The Court is satisfied that, prima facie, in order to meet the reasonable requirements of the claimant, additional building costs of $384,736 had to be incurred, subject to its further comments concerning the lift issue.
Against this background, and in the absence of evidence that any suitable site was available in the alternative, the Court is satisfied that a prudent purchaser/party in the position of the claimant, acting reasonably, would have been prepared to pay a sizeable amount above market value in order to continue and complete a development which would permit it to transfer the entirety of its Wellington Street operations to the East Perth site as the central depot and commandery of the claimant association.
The claimant's case was that the sizeable amount in question would be an amount equal to the extra construction costs required to complete improvements corresponding to the improvements envisaged prior to the resumption. The Court is satisfied that the prudent purchaser issue should be resolved upon that basis. That leaves the question, however, as to what part of the building costs the subject of the Court's finding on the construction issue should be regarded as extra costs. This meant, in the Court's view, that the figure of $384,736 contended for by the claimant had to be subjected to further scrutiny.
The Court has accepted that, prima facie, this figure represents the additional costs of meeting the claimant's reasonable requirements for a development on the reduced site. The task of the Court is, however, not simply to choose one of several competing valuations or estimates, but to make a critical selection of the most helpful facts from the mass of evidence with a view to fixing a sum satisfactory to the mind of the Court as representing the true value of the claim at the relevant valuation date: The Commonwealth v Milledge (1952) 90 CLR 157 at 160 to 162; Bronzel v State Planning Authority (1979) 21 SASR 513. The Court must also be satisfied, in circumstances where the burden of proof lies upon the claimant, that the various constituents of the claim have been made out. This brings us back to one of the items forming part of the claim for $384,736, namely, the sum of $96,500 in respect of the lift that was said to be necessary in the case of the proposed three‑storey structure.
Mr Gill said in his report dated 29 February 1996 that "it is essential that a lift be introduced now that the buildings have been increased in height and the extra cost involved apart from the lift and equipment is a lift motor room and lift shaft." He said in evidence that Building Code of Australia and the Disability Discrimination Act require disabled access to be provided to all functions of the building. In the original design, it was possible to satisfy this requirement with ground floor access to sufficient administration and training facilities. In the revised design after resumption, the provision of the undercroft carpark prevents disabled access to any of the training facilities and thereby necessitates the provision of a lift to at least the first floor level.
Mr Rafferty's figure of $96,500 was based on his experience and is referable to a hydraulic passenger lift costing approximately $93,025 with an allowance of $14,475 for lift shaft construction. This and other evidence showed that a lift should be included in a three‑storey structure of the kind depicted on SK1, for the Court has already accepted that proper weight should be given to rules concerning discrimination whereby a disabled person cannot be treated less favourably than other persons in the terms and conditions on which they are allowed access to facilities on the subject premises.
The Court must also be satisfied by the claimant, however, having regard to considerations of this kind, that a lift would not be required in a two‑storey building of the kind that might have been constructed prior to the resumption, so that the amount in question can properly be regarded as an additional building cost.
Mr Gill was cross‑examined at some length about this matter. The tenor of his evidence was that without a lift in the case of a two‑storey building, it would be necessary for all facilities to be on the first floor to be replicated exactly on the ground floor so that disabled persons could not complain of being treated less favourably. It was for this reason that he contended that a lift was required in the respondent's SK20 proposal (which led to Mr Rafferty costing SK20 upon that basis in a letter dated 20 September 2000). In Mr Gill's opinion, a detailed analysis of SK20 reveals that the claimant would be left with a ground floor training area of 252.2m2 and a first floor area of 550.5m2. A lift would therefore be required to comply with the disability rules. After being questioned extensively about the need for storerooms, common rooms and the need for toilet facilities and prescribed class sizes, a question arose as to whether Mr Gill had fully investigated how all these matters would be attended to in regard to a two‑storey structure of the kind depicted on SK2. The nature of the claimant's operations at Wellington Street and its requirements as detailed in the BMA study might suggest that apart from the training areas, functions would be performed and facilities made available on a second floor which would not necessarily be replicated on the ground floor of a two‑storey building. Accordingly, bearing in mind that Mr Gill himself gave considerable weight to the disability provisions as a factor influencing design and in certain circumstances requiring that a lift be installed, the Court considered that it had to be satisfied by the claimant in the circumstances of the present case that a lift would not be necessary in a two‑storey building, but would be necessary in a three‑storey, with the result that the costs associated with the lift were properly included in the additional building costs of $384,736 from which the special value claim was derived.
In dealing with this issue, the Court begins by noting that it found Mr Gill to be a satisfactory and compelling expert witness. In 1993, he was the project architect for the major renovation and extension of the claimant's Belmont facilities. This included renovations to the existing training and operations facility and a 1000m2 extension with training facilities, office, library and amenities. It was apparent from his evidence in the present case that in the course of completing the Belmont project he had been obliged to give careful consideration to the application of the disability rules and was knowledgeable in regard to that area of building practice.
As the Court has already noted, Mr Gill said in his evidence‑in‑chief in the present case that a lift was essential in the development depicted on SK1, having regard to the effect of the disability rules because the provision of the undercroft carpark would prevent proper disabled access to any of the training facilities. When the suitability of the respondent's two‑storey proposal depicted on SK20 became a live issue at the hearing, Mr Gill fleshed out his initial analysis. The disability rules required that in the case of a two‑storey building without a lift, the training facilities on the ground floor would have to match the facilities on the first floor. In his view, splitting the training facilities into two different sized areas inherent in SK20 would not comply. The thrust of his evidence was that the two‑storey building without a lift depicted on his SK2 would comply and thus the building costs associated with the lift depicted on his SK1 should be regarded as an extra. The value of the item was said to be $96,500.
The question of whether the disability rules might also require that a lift be provided in the two‑storey development depicted on SK2, with the consequence that it could not be regarded as an extra, was put directly to Mr Gill in cross‑examination. To the question whether "your SK2 was something which would have met any problem without a lift" he gave a clear, affirmative answer. It is true that in the following passages of cross‑examination more detailed questions were asked as to how exactly he would accommodate the various rooms and areas in a way that would provide equal access to all facilities and meet the disability requirements, and some of these questions were met by the answer that SK1 and SK2 were concept designs, with the details to be worked out in due course. Nonetheless, he did not resile from his central assertion and it was apparent from his answers that he was fully conversant with the relevant rules.
It is significant also that the respondent did not present any countervailing evidence via Mr Wilson to the effect that a lift would be required for a two‑storey building such as SK2 in order to comply with the disability rules. Indeed, the general thrust of his evidence was to the contrary.
Against this background, the Court was persuaded on the balance of probabilities that a lift would not have been required in a two‑storey building of the kind depicted on Mr Gill's SK2, but was required in respect of SK1 in order to comply with the disability rules. The sum of $96,500 should therefore be regarded as part of the extra for building costs.
The Court is otherwise satisfied that the items identified as extras should be classified accordingly and, as we have already held in respect of the construction issue, that the figures contended for by Mr Rafferty have been established on the balance of probabilities. It follows that the claimant's special value claim will be allowed in the sum of $384,736.
The SK20 Costs Issue
The Court has already noted that if it be wrong in its previous conclusion that Mr Wilson's SK20 does not represent a suitable provision of the claimant's reasonable requirements, then a further question arises as to whether the construction of a building in accordance with SK20 would, nonetheless, involve the claimant in additional construction costs. There was not a large difference between the parties in regard to this area of the dispute.
Mr Rafferty's evidence was that the construction cost of SK20, including his so‑called "additional requirements" was $1,692,135 compared with SK2 which, on his figures, could be constructed at a cost of $1,505,197. This meant, on the claimant's case, that even if the Court concluded that a two‑storey building of the kind depicted on SK20 was sufficient to meet the claimant's needs, the extra building costs involved amounted to $186,938. These workings are in exhibit 37. A major constituent of Mr Rafferty's so‑called "additional requirements" is provision for a lift upon the basis that SK20's depiction of different sized training areas bring into play the disability rules; and hence the need for a lift. It follows from earlier discussion that such an approach is reasonable. The Court finds that the figures contended for by Mr Rafferty in exhibit 37 are persuasive and should be accepted as a matter of costing.
The Court feels obliged to add, however, for the sake of completeness, that if the Court be wrong in its previously expressed finding that the lift should be regarded as an extra, with the result that the costs of the lift should be removed from the equation, then the sum of $107,075 would have to be deducted, leaving $79,863 as the claimant's justifiable "fall back" figure.
The relevant elements taken from Mr Rafferty's letter of 20 September 2001 (exhibit 37) give rise to the figure of $107,075 as follows:
| Lift to service two floors | $74,525.00 |
| Previous lift cost Less cost of one floor | $82,025.00 $ 7,500.00 |
| Cost of lift shaft on a pro rata basis of previous calculations [$14,475 divided by 4 x 3] | $10,856.00 |
| Additional circulation space 18m2 @ $868.50 | $15,633.00 |
| Fees @ 6 per cent | $6,061.00 $107,075.00 |
In summary, then, the Court is satisfied that the various items comprising the claim of $384,736 and referable to the development depicted on SK1 are justifiable as extra building costs. For the sake of completeness, however, the Court notes that if it be wrong in its views and that SK20 be regarded as an appropriate form of development then the extra costs would be $186,938 (if the lift is thought to be a justifiable extra) or $79,863 (if the lift is not thought to be a justifiable extra). It follows from earlier discussion that the Court is satisfied in regard to the Pastoral Finance issue that the claimant would have been prepared to pay an amount of $384,736 above market value as a prudent party in the claimant's position, acting reasonably, sooner than fail to obtain the site.
Relief
The pleadings reveal that on 5 March 1996, the claimant served a claim for compensation in respect of its interest in the land resumed. The respondent made advance payments amounting to $256,586.63 in partial satisfaction of the claim, this figure representing a partial discharge of the claim made pursuant to s 63(a) of the Public Works Act (but not including any compensation for any special value that the land may have for the claimant), a solatium of 10 per cent on the partial discharge figure and interest from 8 February 1993 to the date of payment. A Deed dated 3 March 1999 allowed for the claimant to pursue any aspects of the claim not resolved by agreement. It was on this basis, as pleaded in par 15 of the statement of claim, that the claimant pursued a claim for the special value (s 63(a) of the Public Works Act), severance damage to the land retained (s 63(b)) and), severance damage to the land retained (s 63(b)) and/or to meet the special circumstances of the case. We have already noted that these heads of claim represent discrete causes of action - to be regarded as alternative heads of claim - and one category should not be confused with another. The Court has already indicated that the claim will be allowed at $384,736 for the special value of the land to the claimant.
In par 16 of the statement of claim, the claimant also claimed an amount pursuant to s 63(c), being a solatium of 10 per cent on the balance of the claim unpaid. The claimant contended in its outline of submissions that a solatium of 10 per cent should be paid on the overall compensation finally agreed or determined. It certainly appears from the Deed executed by the parties that a solatium of this kind was added to the amounts paid by way of partial discharge, but an agreement of the kind contended for by the claimant is not reflected in the provisions of the Deed. At the hearing, the respondent did not seem to accept that any such agreement had been entered into and at par 30 of its written submissions argued that there were no special facts justifying the award of additional solatium having regard to the considerations set out in various decided cases: Cook v City of Stirling (supra) at 475; Joondalup Gate Pty Ltd v Minister for Lands (supra); D'Amico v Shire of Swan Guildford (supra) at 186.
The decided cases suggest that a solatium of 10 per cent is frequently provided as a form of compensation referable to the inconvenience and disruption inevitably associated with a compulsory taking: Brown (supra) par 3.35. The Court considers that in this case, as in Cook v City of Stirling (supra), the claimant has suffered unquantifiable loss and inconvenience by reason of the resumption. It is significant that a claim of this kind was conceded in respect of the payments previously made. Accordingly, in addition to the sum of $384,736, the claimant will be allowed a further amount of $38,473 by way of solatium, being 10 per cent of the principal amount, with the result that the total amount due to the claimant is the sum of $423,209. The claimant will also be allowed interest on this figure (to be calculated by the parties) at 8 per cent per annum from 8 February 1993 to the date of judgment. The Court will hear from the parties as to whether any further orders are required and as to the precise amount due in respect of interest.
Alternative Heads of Claim
The Court has already noted that, having regard to the pleadings and the manner in which the case was argued on both sides at trial, the principal matter in controversy was the claim for special value. The other heads of claim advanced in par 15 of the statement of claim of severance (s 63(a) of the Public Works Act) were to be viewed as claims in the alternative. As the Court has found in favour of the claimant in regard to special value, strictly speaking, it is not necessary to deal with these further heads of claim, especially in circumstances where most of the findings already made are generally applicable to the alternative claims. Nonetheless, for the sake of completeness, the Court will briefly address these further issues.
A claim for damage sustained by reason of the severance is a claim for consequential loss flowing from the resumption. It is necessary, of course, to demonstrate a causal connection between the consequential loss brought about by the resumption and, in that regard, it would not be sufficient to point to the obstruction of a project that was merely hoped for as contrasted with a project that was in the course of being implemented or the inability to continue using buildings or parts of a piece of land that had been in use: Minister for Housing in New South Wales v Falconer (supra). In the present case, however, it follows from the Court's earlier findings that at the time of the resumption the staged development of the East Perth site was in the course of being implemented and probably would have occurred, but for the resumption. In the event, it could not be completed in the manner initially intended. To obtain the equivalent facilities, on the Court's earlier findings, extra building costs had to be incurred to the extent of $384,736. There were no suitable sites available elsewhere. In the circumstances, it would be reasonable for the claim to proceed with a development of the kind depicted on SK1. Accordingly, the Court is satisfied, consistently with its earlier findings, that there is a demonstrable link between the resumption and the consequential loss arising from the severance, with the result that, in the alternative, the claimant is entitled to recover the sum of $423,209 (being $384,736 plus solatium of 10 per cent) pursuant to this head of claim. Conceptually, the claim for severance appears to raise no further issues apart from those that have already been dealt with.
The Court considers that the special circumstances head of claim is essentially brings into play the issues dealt with earlier in regard to the special value claim. Accordingly, the Court considers that the claimant is entitled to recover the amount previously mentioned under this head of claim. The Supreme Court in this State has ruled previously that the words "special circumstances" in s 63(c) are words of general operation and should not be limited in their effect simply because they are located within what is commonly regarded as the solatium provision. See Cook v City of Stirling (supra) at 475.
Summary
The claimant will be allowed the sum of $423,209 by way of further compensation, comprising $384,736 in respect of the claim for special value and $38,473 in respect of the claim for additional solatium. The claimant will also be allowed interest on the further amount payable by way of compensation at the rate of 8 per cent per annum from 8 February 1993 to the date of judgment. The Court will hear from the parties as to the form of the orders.
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