The Crown v Murphy

[1990] HCATrans 140

-~-

~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B54 of 1989

B e t w e e n -

THE CROWN

Appellant

and

D.R. MURPHY and COVE HOUSE

AUSTRALIA PTY LTD

Respondents

MASON CJ
BRENNAN J
DEANE J
GAUDRON J

McHUGH J

Murphy(2)

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON TUESDAY, 26 JUNE 1990, AT 10.10 AM

(Continued from 25/6/90)

Copyright in the High Court of Australia

BlT 1 / 1 /LW 41 26/6/90

MASON CJ:	Yes, Mr Callinan?
MR CALLINAN:	Your Honours, in our submission, the Land Appeal Court fell into error of law in three respects
which we would summarize in this way. The Land
Appeal Court impliedly rejected by neither dealing
with, nor in any way referring, to the uncontradicted
assessment of value by Mr Weigh; secondly, by
accepting in the absence of the adoption of the
procedures contemplated by section 32A of the LOCAL
GOVERNMENT ACT that there would inevitably have
been a refusal of rezoning; and, thirdly, in adopting an erroneous and extended meaning of the
word "environment".

Your Honours, as to the first of those matters,

that is, the implied rejection or the failure to

deal with Mr Weigh's evidence, we submit that that

is an error of law in terms of the proposition

which is stated by the Privy Council in the

MELWOOD UNITS case at page 432, letters D to F,

where Their Lordships said:

So also if the Land Appeal Court rejected

as wholly irrelevant to assessment of compensation

a transaction which prima facie afforded some

evidence of value and rejected it for reasons

which were not rational, that in their

Lordships' opinion would be an error of law.

Now, we submit that Mr Weigh's evidence falls within

that sort of description and to fail to deal with it,

uncontradicted as it was, was to fall into error of

law.

McHUGH J: That is not the Australian doctrine, is it?

Perverse findings of fact or irrational findings of

Iact are not errors of law in this country, are

they?

}1R CALLINAN:  Your Honour, in our submission, in relation to

that, we go a little bit - may I accept Your Honour's

proposition. But what has happened here, of course,

goes beyond in a rational or perverse finding,

it is an absolute failure to deal with it.

McHUGH J: Yes, I appreciate that. That is a different point

to what is - - -

MR CALLINAN:  So that I can, with respect, accept

Your Honour's proposition but still make the

submission which I do.

BlTl/2/LW	42	26/6/90
Murphy(2)

Your Honours, if I could just develop that

a little. I will not go to the evidence in any

detail but in addition, Your Honours, to the
references which I provide in paragraph 8 of our

outline - those are the references to Mr Weigh's

evidence - could I give Your Honours a further

reference in volume 2 to his written evidence

from page 432 to page 437 and perhaps if I may
be permitted to go to just one of those at page 435,

second paragraph:

In my opinion the turtle rookery would be the

second most important natural tourist

attraction ..... This attraction is unique and

the site would be in my opinion have had

great potential for development as a tourist

resort. There is more opportunity for a well

spaced development -

and so on, and then, on page 436 he quotes some

figures and reaches his conclusion on page 437,

about point 5:

After deducting the development costs and an

amount for entrepreneurial skills the land to a

developer would be worth say $1,000,000.00.

And for various reasons, which he states, he says

that that would be a conservative value.

McHUGH J:  How do you get to raise that point here in this

Court? The Full Court of the Sunreme Court did not

deal with this point at all. Would you not need

special leave to deal with this point?

MR CALLINAN:  Not in our submission once the appeal is at large.

In fact, I think we did provide a notice of

contention in relation to this matter after snecial	0
leave was granted and the appeal was filed.	But it

is a matter that we have always argued,- we have never

abandoned - and we would submit we are entitled to

given was in no way restricted so far as the	rely upon it here now. The special leave that was	appellant was concerned. There should be no
inhibition upon our being permitted to argue
another basis which we urged elsewhere, below, but
which was not adopted. There is no reason why we
should not be permitted to urge it here, we would submit.

BRENNAN J: With a view to what order, Mr Callinan?

MR CALLINAN:  Your Honour, we have never contended for more than

was awarded by the Land Court. Our contention has

always been that that amount at least was justifiable

upon the basis of Mr Weigh's evidence.

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Murphy(2)

BRENNAN J:  But how, in your submission, should this Court

deal with the submission you are now making?

By acting upon it as a finding of fact?

MR CALLINAN:  Yes, if Your Honours are satisfied that the

failure to act upon it constitutes an error of

law, then the matter is at large, we would submit,

just as it was at large in the Land Appeal Court.

BRENNAN J:  But should we deal with this question of valuation

in the absence of the view being expressed upon it

by the Full Court?

MR CALLINAN:  Your Honours, there is no reason why you should

not, in our submission. It is uncontradicted.

McHUGH J:  But the Land Court itself did not deal with it,

did it?

MR CALLINAN:	Yes, the member did.
DEANE J:	But he did not accept it.
MR CALLINAN:	No, he did not and I accept that but, of course,

the Land Appeal Court did not accept the member,

if I can put it broadly. And it all stems fro~ the

rather unusual circumstances of being permitted

to hearings with evidence. It would be an unfair

result if we would be bound to accept that part of

the Land Court's decision at first instance which

was adverse to us but the Land Appeal Court, not

dealing with the matter at all, as if it were to be

treated that that was -

DEANE J:	But looking at it it is in an odd position, is it not,
in that if you accept it, it is difficult to conceive
why your client would have gone for the residential
rezoning on the basis that it would yield far less
than this tourist activity?
MR CALLINAN:	Yes, could I respond to Your Honour's suggestion in this way: the relevant State government department -
and we give Your Honours the reference - did
contemplate I think what they described as
"compromise proposals". True it is that the figure
that Mr Weigh is talking about is greatly in excess of the yield from a residential development.
We adopted a conservative view because of contingencies, and although it might be open for us to contend for
a million dollars we never in fact did. Perhaps we
should have done but we did not, but we always contended
for not less than the amount awarded at first instance
and we justified it on two bases, one of which
seems destined to fail - the residential basis - and
this other basis.

BlTl/4/LW	44	26/6/90
Murphy(2)
GAUDRON J:	I do not understand.	I have been lost somewhere.

What zoning was required for a tourist development?

MR CALLINAN:  It would have had to have been, I think,

Your Honour, special uses.

GAUDRON J: And there is - - -

MR CALLINAN:  There is a table of zones. May I - - -

GAUDRON J: Yes, but is there any consideration anywhere of

the likelihood of such a rezoning being effected?

MR CALLINAN:	Only to the extent that it flows from Mr Weigh's evidence and Mr Weigh was a public official.
He was an official of the Tourist and Travel
Corporation.
GAUDRON J:	But I do not think that quite - it seems to me

if you were asking for a valuation by reference to

a residential rezoning and what was required for

this rezoning was special uses rezoning and you
did not call any evidence as to the likelihood of

such a rezoning taking place, this evidence is

by the by, and it certainly could only come into

play, as it were, once there were a finding about

the likelihood of a special uses rezoning?

MR CALLINAN: It is implicit in Mr Weigh's evidence, having

regard to other tourist resorts, some of which are

environmentally sensitive, that such a development

might have been permitted. I do not want to

overstate it, Your Honour, but it is implicit from

his evidence. I think it is right to say that

there was no evidence that it would be refused.

I think that is right. But there is no evidence,

I have to concede which attacks the matter in

the way in which Your Honour Justice Gaudron puts

it.

GAUDRON J:  But would not that be necessary before this

evidence came into play, in any real sense?

MR CALLINAN:	No, in my submission, it is there.
GAUDRON J:	But the land was zoned rural and it must be up to

you, must it not, if you want a valuation based on

something other than its current zoning to establish

the likelihood of a different zoning?

MR CALLINAN: Well, I can only make the same responses I have

already made to Your Honour that it is at least

implicit - I think it is probably right to say perhaps

more than that - explicit in Mr Weigh's evidence

as an unqualified - not a town planner, I acknowledge,

of course, but as an experienced public official

BlTl/5/LW	45	26/6/90
Murphy(2)

in the development of tourist developments - that

this development would be attractive and would be

a likely development.	Now, I cannot put it any
differently from that.

McHUGH J:  But did you raise this point. I know it is in

ground 17 of your notice of appeal but did you

raise and argue this point in the Full Court?

MR CALLINAN:  Yes, I did.

McHUGH J: It was not dealt with?

MR CALLINAN:  No.

McHUGH J: Well, it only means, does it not. at its

highest that all you could get is for this Court

to send it back to the Full Court to deal with?

MR CALLINAN:  That may be right; with respect, that may be right.

But we have always had it there and it has always

been a live issue and the only time it was dealt

with was in the Land Court itself.

BRENNAN J:  To make it a live issue it would be necessary to

say that Mr Weigh's evidence amounted to evidence

that the hypothetical purchaser would have put a

value on the land by reference to the likelihood

of its rezoning and development in this way?

MR CALLINAN:  That is right, yes.

BRENNAN J: Well now the question really is whether Mr Weigh's

evidence goes thus far?

MR CALLINAN:  Yes, and in my submission it does. His view - and

I have read the last page - is really a quite

unqualified view.

BRENNAN J: Well it goes to the value of the property, assuming

its rezoning and availability for development in this

way.

MR CALLINAN:	Yes.
BRENNEN J:	The question is whether it goes to the extent of

saying that the hypothetical purchaser would have

taken into account the likelihood of the rezoning.

MR CALLINAN:  Yes, there are other ways of formulating it,

of course.

BRENNAN J: Perhaps it would be desirable for you to formulate

them.

BlTl/6/LW	4 6	26/6/90
Murphy(2)

MR CALLINAN: Well, the hypothetical purchaser would pay

at least the reduced price of $500,000-odd,

the amount that was awarded, arainst

the reasonable prospect - not even perhaps a

likelihood - what I am really saying is to put
it in terms of a likelihood might be putting it

too high in view of the figures for which we

actually contend but with that qualification

I respectfully accept what Your Honour puts to me.

McHUGH J:  But does this point really arise? If the Land

Appeal Court was correct in saying that the land

would not be rezoned, how can this point arise?

MR CALLINAN:  I do not know, with respect, whether the

Land Appeal Court applied its mind to that matter.

What the Land Appeal Court applied its mind to was a rezoning for residential purposes. It is a

matter of construction of the Land Appeal Court's decision but I would not, with respect, have thought

that the Land Appeal Court decided other than that

a residential zoning, probably a residential zoning

of any kind, would not have been permitted. It is

a matter of construction of the decision. And I

have given Your Honours the references to Mr Weigh's

evidence. Could I just ask Your Honours to look

also at his oral evidence and his qualifications

which show that he had a great deal of expertise

as a State official in the identification of projects
of this kind and their development ; that in effect,

the Corporation acted in a kind of an entrepreneurial

role in relation to these matters and that appears

from his oral evidence.

Could I move then, Your Honours, to the second

of what we submit are the errors of law and could

I simply refer Your Honours to section 32A to show

that it contemplates a procedure in relation to

environmentally sensitive - - -

McHUGH J:  Could I just ask you a question about this because

I have some trouble following the Full Court's

judgment. What has section 32A got to do with this

case at all? What section 33 says is that they

shall take that into account. Let it be assumed

in your favour that the majority of the Full Court

were absolutely right about the construction of

32A. What was there to stop the council from

refusing a rezoning simply because they thought it

might affect the turtles? I mean, the Land Aooeal

Board did not mention section 32A in its judgment.

MR CALLINAN:  Yes, I think it was referred to in argument.

I am not sure. Your Honour, the only response I can

make to that is that 32A is the section which seems

to govern the procedures which should apply when

environmental questions are raised and that section 33 has to

be read subject to it.

BlTl/7/LW	4 7	26/6/90
Murphy(2)

McHUGH J:  But 33 says that you:

shall, amongst other things, take into

consideration -

these things. It is not an exhaustive statement

of what they can take into account.

:MR CALLINAN:  Of course, one cannot read section 33 in

isolation. In what circumstances then, one might

ask, does section 32A apply?

McHUGH J:  On your argument it would cover matters that

affected the environment but if turtles are not part of the environment, well, there is nothing to stop the council taking them into consideration

under 33.

:MR CALLINAN:	If they are part of the environment.
McHUGH J:	No, if they are not part of the environment

for the purpose of 32A.

:MR CALLINAN: Well, there is no point in my repeating myself,

I simply say that 33 has to be read subject to 32A

which is the dominantor determinate section in

relation to "environmental matters". And I s imp l ·-'

refer Your Honours generally to section 32A whic~·

contemplates the provision and assessment of an
environmental impact statement or assessment.

And could I, in that connection, simply again give

Your Honours some references. The references I

want to give Your Honours in this connection are

those that I referred to in paragraph S(d) of our

synopsis. I do not think I need take Your Honours

to them at this stage but what appears from the

evidence of those passages is that there was always

a possibility of a compromise proposal and that

the parties involved, or some of the witnesses

involved and in particularly Mr Ballard who was

called by the State and who was a qualified town planner,

he did make reference to the adoption of procedures

under section 32A, albeit that he did say in the end -

again I concede this, he did say in the end - that

he thought that the environmental considerations

in relation to the turtles were such that probably

no environmental impact assessrrEnt statement v.:ould rreet tbose

objections but he did contemplate, as did other

persons, compromise proposals and the possibility of

compromise proposals and also that there might need

to be an environmental impact assessment.

BRENNAN J:	Mr Callinan, could I just take you back to the wording of the relevant paragraph or subparagraph of section 33.
I am at a loss to understand quite what it means.

BlTl/8/LW	48	26/6/90
Murphy(2)

Perhaps if I refer to the page numbers first of all: page 181 which is the commencement of paragraph (e),

it says:

In respect of an application made pursuant

to this section, the Local Authority shall,

amongst other things, take into consideration -

and then we go over to (v) on page 182:

whether -

and I omit for clarity for the moment all the rest

of (v) down to (B) whether:

the provisions of section 32A of this Act

should be applied.

Now, I am at a loss to understand how it is that the local

authority is required to take into consideration

whether 32A should be applied when 32A specifies -

MR CALLINAN: It is mandatory language.

BRENNAN J:  - that which shall be applied. What does it

mean?

MR CALLINAN:  Of course, it would be very attractive for me

to suggest to Your Honours that 32A has to be read

subject to paragraph (B) to which Your Honour has

draw my attention but there is an obvious problem

about it no matter which way one approaches it.

BRENNAN J: It seems to suggest that in planning activity

that which the legislature says is mandatory

the local authority can regard as discretionary.

MR CALLINAN:  As discretionary. I would invite Your Honours,

of course, to take the view that the considerations

are discretionary and not mandatory. Obviously

I would do that. That is a little attractive in

practical terms in this sense that very often,

of course, land which is environmentally sensitive,

on that account, will be very attractive land and by the operation of the provisions in a mandatory way the land can effectively be sterilized at the

expense of the land owner for a public benefit.

That may or may not be an unattractive result.

We submit it is rather unattractive and it is

particularly unattractive, we would submit, when

one has regard to the compensation provisions in

the LQCAL GOVERNMENT ACT. Your Honours, we deal with

those in our paragraph 13 of our outline.

BlTl/9/LW	49	26/6/90
Murphy(2)

Could I just draw Your Honours' attention to subsections (10) to (14) of section 33 and the scheme

is,with some qualification, if a council rezones

land in such a way as to make it less valuable

then the council may be obliged to pay compensation.

Now, that is not an irrelevant matter here because

if one goes to the table of zones which appear

in volume 4, pages 767 and 768, Your Honours will

see that there are two possible zonings into which

categories the land could possibly have fallen.

I am referring to "Special Uses", some kind of an

environmental park, or perhaps "Parks and Recreation".

One might have thought in practical terms it

might have been fairer for the council, rather than

to reject the rezonin& to itself have rezoned the

land to special uses or parks and recreation, as

to the latter upon conditions which would protect
the environment, in which event, of course,

there would have been an opportunity for the

land owner to apply for compensation under

subsections (10) to (14).

Now I appreciate that much of that is an argument of convenience but it does, we would

submit, provide some support for a construction

of the LOCAL GOVERNMENT ACT in the case of the

conflict to which YourHonour Justice Brennan

referred me which leans in favour of the rights

of the land owner rather than in favour of giving

section 32A an unqualified mandatory application because

we ¾Duld put the proposition and we would not want to

add anything to the way in which we put it in

paragraph 12 of our outline.

BRENNAN J:  Mr Callinan, to consider a prospect of the value

of the land to a prospective purchaser on the hypothesis of the rezoning to either of those

categories, would not one need to have some evidence

which would indicate what the problems of rezoning

to those categories might be?

MR CALLINAN:  Your Honour, I was not contemplating the purchaser

seeking or having in mind the prospect of such a

rezoning. What I was putting was the submission

that it would have been more appropriate for the

council of its own initiative to rezone to either

of those two zones and it would have been fairer

to the land owner in the sense that, although
that would have sterilized the land for any use

other than those uses which would have had the

consequence of protecting the land and the

environment for public purposes, it would have given

the land owner an opportunity or a right to claim

compensation.

BlTl/10/LW	so	26/6/90
Murphy(2)

BRENNAN J:	Can the council rezone land of its own motion?
MR CALLINAN:	Yes, subject to - it can initiate the procedure. In the end it can only be done, I think, by the
Governor-in-Council, but the council does it all the time, of course, every time it introduces a town
plan in the sense that it makes the proposal to the Governor-in-Council and the Governor-in-Council then considers any objections, any new town plan
or any proposed rezoning by council; it is open to
objection and then it is either adopted or rejected
by the Governor-in-Council, but, yes, Your Honour, it happens subject to that qualification and the
final decision is the Governor-in-Council's.
It happens all the time that councils initiate the
rezoning process.

(Continued on page 52)

BlTl/11/LW	5 1	26/6/90
Murphy(2)

MR CALLINAN (continuing): And indeed subsections (10) and (14)

contemplate that that will be so and there have

indeed been very few cases in which claims for

compensation have been made under those subsections.

I doubt that there have been more than half a dozen

of them, but their existence and all of the other

matters to which I have referred, do provide some

support, we would submit, for the proposition that
the discretionary rather than the mandatory

construction should be preferred and,as I say, we

put the proposition in paragraph 12 of our synopsis.

Your Honours, the only other matter is the meaning

to be given to the word "environment" and we really

do not add anything to what we say in paragraph 14

of our outline. We are, of course, heartened by

the fact that the legislature seems to have thought
that the definition was too narrow perhaps to include

fauna and has legislated to achieve that purpose.

And it is, we would submit, a submission with some

weight if one looks at the legislatures imputed

intention. Thank you, Your Honour.

MASON CJ:  Thank you,Mr Callinan. Mr Solicitor.

MR DAVIES: Your Honours, can I deal first with our learned

friend's submission that the counsel's decision

was vitiated by bad faith. Your Honours, there
was no finding to that effect and indeed the finding

is to the contrary. The passages which our learned

friend refers to in his outline are either to the
contrary or entirely neutral. The first passage
our learned friends refer to in their outline is

at the bottom of page 790 to the top of page 791.

That is the passage,Your Honours will recall,which

referred to "mutD.al concern for the protection of
the turtles" and it was that concern, as we

submitted yesterday on the part of the council,

which caused both its hope that the government would

resume and its refusal of rezoning.	The passage
which he	then refers to on page 792, point 2,

simply records submissions, and we ask Your Honours

to note what the court said at point 4 of that page.

And the final passage our learned friends relied

on is at page 792, point 8, which was the passage

which has been read more than once to Your Honours,

about how a:

developer would have been faced with a Council

which would have been strongly and reasonably

opposed to any rezoning -

McHUGH J: What do you say about the sentence "This may be assumed

to be quite correct" on 792, which follows the

recital of the submission?

MR DAVIES:	792?
BIT2/l/CM	52

Murphy(2)
McHUGH J: Yes, the second sentence in the first complete

paragraph on that page.

MR DAVIES: Yes, it certainly did happen following that.

There is no doubt about that, but the submission

which was made by the National Parks and Wildlife,

as I indicated to Your Honours yesterday, expressed

two concerns.	One was an environmental concern
which ·would justify their refusal of rezoning.	And
the other was its concern about the value of the
land.	So, Your Honours, really the first and last

of those passages, in our respectful submission,

demonstrate the reasonable concern justifying a

refusal of rezoning. And the other point we really

want to make about vitiation by bad faith is a

point which Your Honour Justice Brennan really

made to our learned friends yesterday that a finding

that that decision was vitiated by bad faith really

only goes half the way. The respondent must also

show that a council acting reasonably or a local

government court on appeal from that council would

have rezoned and the findings again are to the

contrary. Secondly, Your Honours, can we deal with
the evidence of Mr Weigh. The first point we want

to make is the point which several of Your Honours

have made, and that is that his proposal also

involved rezoning and, for that reason alone. there

was no need for the Land Appeal Court to deal with

his evidence.	The second point which should be made
is that he was not a valuer.	He could not give

evidence of the value of the land as a tourist
development, as he frankly admitted. It was put

might be relevent to a valuer, but they would not

to him in cross-examination comparable land sales.

mean anything to him.

Can I give Your Honours some passages in his

evidence, page 83, lines 40 to 57. And finally,

Your Honours, with respect to Mr Weigh, his

evidence was not accepted in the Land Court, that

with in the Land Court and my learned junior has	appears from page 518, point 1. It was not dealt
perused the transcript of the argument on our
learned friend's side in the Land Appeal Court, and
it was never submitted to the Land Appeal Court that his evidence should be accepted. Understandably,
of course, because a feasibility study,
which was all he was talking about, was not a
valuation. Your Honours, can I then deal with our
learned friend's submission in paragraph 9 of the
written outline which submits that, for two reasons,
this matter should go back to the Land Court for
an assessment of compensation and can I deal with
those two Roman numbered paragraphs in turn? As to
the first of them, that is the extent to which bad

BIT2/2/CM	53
Murphy(2)

faith apart the council decision could be maintained,

there was already a finding of the Land Appeal Court

of fact as to that on page 792. As to the second,

whether the respondent should recover at least the

amount initially awarded by virtue of the utility

of a site for a tourist resort, we have really

answered that when dealing with Mr Weigh's evidence,

for his was the only evidence on the topic.

Can I then deal with the submissions which are made

really in paragraph 12 and perhaps more specifically

in paragraph 13, about how the land should have

been rezoned by the local authority to some zoning

which would have entitled the developer to make

some money claim. In our respectful submission,

the respondent really cannot contend for that for

the first time here. They did not ever ask for that.

The local authority at no stage was ever asked to

and one could not imagine that the local government court on appeal would have ever have done so unless

it had been asked and, of course, the developer,

looking at the matter reasonably, would never have

asked for that.

And finally, Your Honours, can I come to the

question of construction which Your Honour Justice Brennan

raised this morning, as to the	relationship between
section 32A and the provision in section 33(6A).	I

am not suggesting this is the complete answer to the

question of construction, but there are really two

parts to section 32A:	subsection (1) which is
mandatory in its terms and then subsection	( 2) ,and

(3) and (4) are consequential upon (2), which is

discretionary, and again, subsection (5) which is

an alternative to subsection (2), which again is

discretionary, and, in our respectful submission, the

reference to the discretion in section 33, is a

reference back to the discretionary parts of section 32A.

We have no further submissions.	May it please the
Court.

MASON CJ:  Thank you, ~ir Solicitor. The ~urt will consider

its de<!ision in this matter.

AT 10.47 Al.~ THE MATTER WAS ADJOURNED SINE DIE

Murphy(2)

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