Trandos v Western Australian Planning Commission

[2001] WASCA 346

TRANDOS & ORS -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2001] WASCA 346

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2001] WASCA 346
Court:	THE FULL COURT (WA)
Case No:	FUL:17/2000	Heard:	11 & 12 SEPTEMBER 2001
Coram:	ANDERSON J WHEELER J EINFELD AJ	Delivered:	6/11/01
No of pages:	49	Judgment Part:	1 of 1
Result:	Application for leave to appeal dismissed
Category:	A
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Parties:	NICHOLAS TRANDOS STAVROS TRANDOS HARISI TRANDOS WESTERN AUSTRALIAN PLANNING COMMISSION
Catchwords:	Land Valuation Compulsory purchase of land reserved for future roadworks Method of valuation Highest and best use Matters to be considered in determining Reduced value due to proposed roadworks To be disregarded in assessing value
Legislation:	Metropolitan Region Town Planning Scheme Act 1959, s 32(2), s 36(2b)(b)(ii) Town Planning and Development Act 1928 (WA), s 7(4)(b) Western Australian Planning Commission Act 1985, s 18(1), s 60
Case References:	Commissioner of Succession Duties (SA) v Executive Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358 Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 Re Smith, Minister for Local Government for Western Australia; Ex parte Ransberg Pty Ltd (1992) 80 LGERA 401 The Minister v Matford Nominees Pty Ltd (1973) 2 NSWLR 58 Trandos & Ors v Western Australian Planning Commission [2000] WASC 11 Adelaide Clinic Holdings Pty Ltd v Minister for Water Resources (1988) 65 LGRA 410 Benmax v Austin Motor Co Ltd [1955] AC 370 Boland v Yates Property Corporation Pty Ltd [1999] HCA 64; (1999) 167 ALR 575 Bunney v State of South Australia [2001] SASC 18; (2001) 112 LGERA 213 Claire Loch Gold Pty Ltd v State Planning Commission (1995) 14 SR(WA) 239 Davis Properties Pty Ltd v Roads & Traffic Authority of New South Wales, unreported; NSW Land & Environment Court; 18 October 1995 Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Department of Transportation & Development v Hammons (1989) 550 So 2d 767 Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111 Federal Gold Mine Ltd v Ennor (1910) 13 CLR 276 Hillis v Commissioner of Police (1988) 6 SR(WA) 347 Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196 Jones v Capaldi (1956) 98 CLR 615 Joondalup Gate Pty Ltd v The Minister for Land as the Delegate of the Minister for Works, unreported; SCt of WA Compensation Court; Library No 960406; 31 July 1996 Lake Karrinyup Country Club Inc v Valuer General, unreported; SCt of WA; Library No 960515; 13 September 1996 Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426 Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 177 ALR 390 Municipal Council of Sydney v Campbell [1925] AC 338 Oshlack v Richmond River Council (1998) 193 CLR 72 Paterson v Paterson (1953) 89 CLR 212 R v Murphy (1990) 64 ALJR 593 Rendell Holdings Pty Ltd v Athans, unreported; FCt SCt of WA; Library No 7942; 15 November 1989 Rosenberg v Percival (2001) 178 ALR 577 St John Ambulance Association of Western Australia Inc v East Perth Redevelopment Authority [2001] WASC 85 The Minister v Stocks & Parkes Investments Pty Ltd (1973) 129 CLR 385 Thompson v Randwick Corporation (1950) 81 CLR 87 Turner v Minister of Public Instruction (1956) 95 CLR 245 Uranerz (Australia) Pty Ltd v Hale (1980) 54 ALJR 378 Watt (or Thomas) v Thomas [1947] AC 484 Werribee Shire Council v Kerr (1928) 42 CLR 1 Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40 Western Australia v Watson [1990] WAR 248

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : TRANDOS & ORS -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2001] WASCA 346 CORAM : ANDERSON J

WHEELER J
EINFELD AJ

HEARD : 11 & 12 SEPTEMBER 2001 DELIVERED : 6 NOVEMBER 2001 FILE NO/S : FUL 17 of 2000 BETWEEN : NICHOLAS TRANDOS

STAVROS TRANDOS
HARISI TRANDOS
Appellants (Plaintiffs)

AND

WESTERN AUSTRALIAN PLANNING COMMISSION
Respondent (Defendant)

Catchwords:

Land - Valuation - Compulsory purchase of land reserved for future roadworks - Method of valuation - Highest and best use - Matters to be considered in determining - Reduced value due to proposed roadworks - To be disregarded in assessing value

Legislation:

Metropolitan Region Town Planning Scheme Act 1959, s 32(2), s 36(2b)(b)(ii)

(Page 2)

Town Planning and Development Act 1928(WA), s 7(4)(b)
Western Australian Planning Commission Act 1985, s 18(1), s 60

Result:

Application for leave to appeal dismissed

Category: A

Representation:

Counsel:

Appellants (Plaintiffs) : Mr D H Solomon
Respondent (Defendant) : Mr R M Mitchell & Ms L J Dias

Solicitors:

Appellants (Plaintiffs) : Solomon Brothers
Respondent (Defendant) : State Crown Solicitor

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

Commissioner of Succession Duties (SA) v Executive Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358
Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565
Re Smith, Minister for Local Government for Western Australia; Ex parte Ransberg Pty Ltd (1992) 80 LGERA 401
The Minister v Matford Nominees Pty Ltd (1973) 2 NSWLR 58
Trandos & Ors v Western Australian Planning Commission [2000] WASC 11

Case(s) also cited:

Adelaide Clinic Holdings Pty Ltd v Minister for Water Resources (1988) 65 LGRA 410
Benmax v Austin Motor Co Ltd [1955] AC 370
Boland v Yates Property Corporation Pty Ltd [1999] HCA 64; (1999) 167 ALR 575


(Page 3)

Bunney v State of South Australia [2001] SASC 18; (2001) 112 LGERA 213
Claire Loch Gold Pty Ltd v State Planning Commission (1995) 14 SR(WA) 239
Davis Properties Pty Ltd v Roads & Traffic Authority of New South Wales, unreported; NSW Land & Environment Court; 18 October 1995
Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
Department of Transportation & Development v Hammons (1989) 550 So 2d 767
Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111
Federal Gold Mine Ltd v Ennor (1910) 13 CLR 276
Hillis v Commissioner of Police (1988) 6 SR(WA) 347
Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196
Jones v Capaldi (1956) 98 CLR 615
Joondalup Gate Pty Ltd v The Minister for Land as the Delegate of the Minister for Works, unreported; SCt of WA Compensation Court; Library No 960406; 31 July 1996
Lake Karrinyup Country Club Inc v Valuer General, unreported; SCt of WA; Library No 960515; 13 September 1996
Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426
Moneywood Pty Ltd v Salamon Nominees Pty Ltd (2001) 177 ALR 390
Municipal Council of Sydney v Campbell [1925] AC 338
Oshlack v Richmond River Council (1998) 193 CLR 72
Paterson v Paterson (1953) 89 CLR 212
R v Murphy (1990) 64 ALJR 593
Rendell Holdings Pty Ltd v Athans, unreported; FCt SCt of WA; Library No 7942; 15 November 1989
Rosenberg v Percival (2001) 178 ALR 577
St John Ambulance Association of Western Australia Inc v East Perth Redevelopment Authority [2001] WASC 85
The Minister v Stocks & Parkes Investments Pty Ltd (1973) 129 CLR 385
Thompson v Randwick Corporation (1950) 81 CLR 87
Turner v Minister of Public Instruction (1956) 95 CLR 245
Uranerz (Australia) Pty Ltd v Hale (1980) 54 ALJR 378
Watt (or Thomas) v Thomas [1947] AC 484
Werribee Shire Council v Kerr (1928) 42 CLR 1
Western Australia v Bond Corporation Holdings Ltd (1991) 5 WAR 40
Western Australia v Watson [1990] WAR 248

(Page 4)

1 ANDERSON J: This is an application for leave to appeal from a judgment of Heenan J after a trial of preliminary issues.

2 The action concerns the price which the respondent ought to pay to the appellants for the compulsory purchase of land which is reserved for public purposes and in respect of which a development application has been refused.

Introduction

3 The appellants are the registered proprietors of Lot 66 Wanneroo Road, Woodvale. This parcel of land is about 19 kilometres north of Perth within the City of Wanneroo and comprises a little more than two hectares. It is located at the north-western corner of the T-junction of Wanneroo Road and Whitfords Avenue. It is rectangular in shape with its short side (approximately 83 metres) fronting the western alignment of Wanneroo Road and its long side (approximately 245 metres) fronting the northern alignment of Whitfords Avenue. Wanneroo Road runs north and south and Whitfords Avenue comes onto it from the west to form the T-junction.

4 The land is within the area covered by the Metropolitan Region Scheme ("the Scheme") and also the City of Wanneroo's Town Planning Scheme Number 1. Under both schemes, the land is zoned "Rural". Until 1993, it was used as a poultry farm. At the time of trial in November 1999, it was used for growing vegetables.

5 Wanneroo Road is a primary distributor, carrying longer distance traffic between Perth and urban areas to the north, such as Wanneroo itself and Joondalup. Whitfords Avenue is a district distributor, linking the commercial and residential areas along the coast to the primary network of roads, including Wanneroo Road. Speaking generally, both are busy roads carrying through traffic. The speed limit on Wanneroo Road at this point is 80 kilometres per hour.

6 Some 800 metres to the south of the T-junction in question, Gnangara Road comes on to Wanneroo Road from the east to form a T-junction at that point. Gnangara Road is also a busy district distributor. In some quarters, it is thought to be desirable that instead of these two T-Junctions there should be one four-way intersection with grade separation and there are long-term plans to change the alignment of Gnangara Road so that it comes on to Wanneroo Road opposite Whitfords Avenue, forming a four-way intersection at that point.

(Page 5)

7 Planning along these lines goes back many years. There is evidence that as early as 1975 the Scheme contained a proposed realignment of Gnangara Road so as to form a four-way intersection at Whitfords Avenue. This was deleted in 1988. It is a concept which is now once again very much on the planning agenda of the Main Roads Department.

8 In November 1994, the Scheme was amended so as to reserve approximately half of Lot 66 for public purposes, specifically "Other Major Highways". This was to allow for future grade separation at this intersection, that is, an overpass providing vertical separation of north-south traffic from east-west traffic where those lines of traffic would otherwise conflict. Putting this concept into effect will involve the construction of on-ramps and off-ramps in a cloverleaf pattern, for which it is considered that the reserved portion of Lot 66 will be required.

9 The Scheme is given statutory force by s 32(2) of the Metropolitan Region Town Planning Scheme Act 1959 ("the Scheme Act"). The Scheme provides that when land is reserved and an application to commence development on the land is refused on the ground that it is contrary to the intent and purpose of the reservation, the landowner is entitled to make a claim for compensation for injurious affection (the Scheme text cl 20(1)). It is further provided that in lieu of paying compensation for injurious affection the responsible authority may "in accordance with the Scheme Act purchase the land affected by such decision of the Commission at a price not exceeding the value of the land at the time of refusal of approval … " (cl 20(3)). In this case the responsible authority is the respondent. The respondent was established as a body corporate by the name "State Planning Commission" in 1985 pursuant to the provisions of the State Planning Commission Act 1985. It is the successor to the Metropolitan Region Planning Authority. In 1995, the Act was amended, inter alia, to change the title of the Act to the Western Australian Planning Commission Act 1985 and the respondent's name was changed to Western Australian Planning Commission. The functions of the respondent include the administration of the Scheme.

10 On 31 March 1995, the appellants lodged a development application with the respondent, seeking approval to commence development of Lot 66 by constructing a service station, three fast food outlets, three restaurants and three function centres on the land at an approximate cost of $2,000,000. The respondent refused the application on 22 September 1995 on grounds which included a ground that:

(Page 6)

"4. The land is part reserved Other Major Highways and the balance of the land is proposed to be reserved for Parks and Recreation in the Metropolitan Region Scheme … . Approval to the development would be contrary to the purpose and intent of the reservation(s) and prejudice implementation of the Metropolitan Region Scheme."

11 In November 1995, the Scheme was amended so as to reserve the balance of Lot 66 for the purpose of "Parks and Recreation". So the whole of Lot 66 is now reserved for public purposes under the Scheme.

The action

12 Acting under the rights conferred on them by cl 20(1) of the Scheme arising from refusal of their development application, the appellants served on the respondent a claim for compensation for injurious affection. The respondent elected to purchase the land in lieu of paying compensation. Agreement could not be reached on the value of the land and this action was commenced. The right to commence the action is conferred by s 36(2b)(b)(ii) of the Scheme Act.

13 By par 10 of the statement of claim, the appellants claimed:

" … that the price for the Premises should be $1,950,000 or alternatively $900,000 or alternatively $384,325."

14 This claim was particularised and according to the particulars the value of the land was to be assessed firstly on the basis that its highest and best use was as a service station, fast food and convention/function centre; alternatively its highest and best use was as "a small lot subdivision or a retirement village"; and in the third alternative, its highest and best use was one of its past uses; namely, a fully developed poultry farm.

15 There were to be two major issues at trial, the first of which might be described as the issue of highest and best use. The other main issue was, of course, the valuation issue. Whatever might be determined to be the highest and best use of the land, there was likely to be dispute as to its value.

16 The parties decided that the issue of highest and best use should be tried as a preliminary issue. To that end, they obtained orders that the following issues be tried as preliminary issues:

(Page 7)

"(a) What highest and best use the Premises … potentially had as at 16 January 1996 (the date of election to purchase by the defendant) assuming that the Premises had not been reserved for public purposes under the Metropolitan Region Scheme?

(b) What uses other than the highest and best use the Premises had or potentially had as at 6 January 1996 … assuming the Premises had not been reserved for public purposes …

(c) What zoning under the Metropolitan Region Scheme and relevant Town Planning Scheme of the local authority would have been consistent with proper planning to accommodate each such use?

(d) What would have been the highest and best zoning or potential zoning of the premises under the Metropolitan Region Scheme and the Town Planning Scheme as at 16 January 1996 if the land had not been reserved under the Metropolitan Region Scheme?"

17 This claim reflects the provisions of s 36 of the Scheme Act, the relevant parts of which are as follows:

"(2a) Where the Commission elects to acquire the land as provided in subsection (2), if the Commission and the owner of the land are unable to agree as to the price to be paid for the land by the Commission, the price at which the land may be acquired by the Commission shall be the value of the land as determined in accordance with subsection (2b).

(2b) The value of the land referred to in subsection (2a) shall be the value thereof on the date the Commission elects to acquire the land under that subsection, and that value shall be determined …


(b) on the application of the owner of the land, made in the prescribed manner …

…

(ii) by the Supreme Court …

(Page 8)

and that value shall be determined without regard to any increase or decrease, if any, in value attributable wholly or in part to the Scheme."

The judgment on the preliminary issues

18 The preliminary issues were tried over 10 days by Heenan J (Trandos & Ors v Western Australian Planning Commission [2000] WASC 11) between 22 November and 15 December 1999 and his Honour gave judgment on 31 January 2000 rejecting the first and second of the appellants' alternatives as to highest and best use. His Honour's findings were stated in the following terms:

"The preliminary issues in the order of 17 June 1998 and my answers to the questions posed by them are as follows:

Issue (a)

What highest and best use Lot 66 potentially had as at 16 January 1996 assuming that it had not been reserved for public purposes under the Metropolitan Region Scheme ('the MRS')?

Answer

Low traffic generating and low visual amenity impact tourist related and recreational purposes (such as conventional restaurant and function centre not dependent on passing trade, caravan park, camping ground or other low key tourist accommodation) which are complementary to, and capable of being integrated with, the adjacent Yellagonga Regional Park.

This use would have been subject to the proper traffic and access arrangements and public amenity considerations (in terms of both the view from Yellagonga Regional Park to the land and from the adjoining roads).

Issue (b)

What uses other than the highest and best use Lot 66 had or potentially had as at 16 January 1996 assuming Lot 66 had not been reserved for public purposes under the MRS?

Answer

(Page 9)

The land had potential for rural pursuits, special residential (ie 2,000-4,000 sq m) or residential development to a density of not more than R20.

Issue (c)

What zonings under the MRS and relevant Town Planning Scheme ('the TPS') of the Local Authority would have been consistent with proper planning to accommodate each such use?

Answer

In respect of rural pursuits, 'Rural' under the MRS and the TPS.

In respect of special residential development, 'Urban' or 'Rural' under the MRS and 'Special Residential' under the TPS.

In respect of R20 residential development, 'Urban' under the MRS and 'Residential Development R20' under the TPS.

Issue (d)

What would have been the highest and best zoning or potential zoning of Lot 66 under the MRS and the TPS as at 16 January 1996 if Lot 66 had not been reserved under the MRS?

Answer

'Rural' with the potential for 'Urban Deferred' or 'Urban' under the MRS and 'Rural' with the potential for 'Special Purpose (Tourism/Recreation)' or 'Residential Development' under the TPS."

The application for leave to appeal

19 From that decision, the appellants seek leave to appeal. Leave is required because of the interlocutory nature of the judgment sought to be appealed from. We heard the application for leave to appeal and the merits of the proposed appeal at the same time.

20 By the draft grounds of appeal, the appellants plead that the questions should have been answered as follows:

"1.4 The answers to the preliminary issues in the order dated 17 June 1998 are as follows:

(Page 10)

(a) What highest and best use Lot 66 potentially had as at 16 January 1996 assuming that it had not been reserved for public purposes under the Metropolitan Region Scheme ('the MRS')?

Answer

The commercial development proposed by Amendment 542 (as amended on 27 May 1992).


(b) What uses other than the highest and best use Lot 66 had or potentially had as at 16 January 1996 assuming Lot 66 had not been reserved for public purposes under the MRS?

Answer

Residential R40 or R15 - R20 with some R40.

(c) What zonings under the MRS and relevant Town Planning Scheme ('the TPS') of the Local Authority would have been consistent with proper planning to accommodate each such use?

Answer

Under the MRS, 'Rural' or 'Urban'

Under the TPS, as per answers (a) and (b) above.

(d) What would have been the highest and best zoning or potential zoning of Lot 66 under the MRS and TPS as at 16 January if Lot 66 had not been reserved under the MRS?

Answer

Under the MRS, 'Urban'

Under the TPS, the zoning proposed in Amendment 542 (as amended on 27 May 1992)."

21 In order to understand the reference in these grounds of appeal to "Amendment 542 (as amended on 27 May 1992)", it is necessary to give some more history.
(Page 11)

22 The Scheme was promulgated in 1963. Wanneroo, which was then a shire, made its Town Planning Scheme Number 1 on 13 September 1972. As has been noted, the subject land was zoned "Rural" under both schemes.

23 The power of a municipality to make a town planning scheme is in s 6 of the Town Planning and Development Act1928(WA) which provides:

"(1) A town planning scheme may be made, in accordance with the provisions of this Act, with respect to any land with the general object of improving and developing such land to the best possible advantage, and of securing suitable provision for traffic, transportation, disposition of shops, residence, factory and other areas, proper sanitary conditions and conveniences, parks, gardens and reserves, and of making suitable provision for the use of land for building or other purposes and for all or any of the purposes provisions, powers or works contained in the First Schedule."

24 The First Schedule enumerates matters which may be dealt with by a town planning scheme and, in effect, permits the making of very detailed schemes.

The initiation of Amendment 542

25 In February 1990, by which time the Shire of Wanneroo had become the City of Wanneroo, the owners of Lot 66, through their planning consultants, Chappell & Lambert, submitted a proposal to the city for an amendment to Town Planning Scheme No 1 with respect to their land. The proposal was in the form of a detailed plan making provision for the use of Lot 66 for family restaurants, take-away food outlets and a service station, for road access to and from Whitfords Avenue and Wanneroo Road and for traffic circulation within the land. The proposal came before council on 14 February 1990 which resolved to defer consideration of it pending the completion by the city planners of a "structure plan" for a wider area which included wetlands immediately to the north of the subject land.

26 A report in the form of a draft structure plan was prepared and presented to council in June 1990. In essence, the draft structure plan proposed that all privately owned land fronting on to Wanneroo Road

(Page 12)

between Woodvale Drive, well to the north of Lot 66, and Hocking Road, about 400 metres south of Lot 66, be zoned "tourist and recreation". According to the draft structure plan, the uses which were appropriate in that zone were generally of low intensity, although they included holiday cottages, private recreation, restaurants and other uses relating to and used by tourists. The council resolved on 27 June 1990 (AB 1702) to support the draft structure plan.

27 Prima facie the appellants' proposal was inconsistent with the draft structure plan, at least insofar as it made provision for a service station use on the subject land. Also, it made provision for an intensity of use not altogether compatible with the tourist and recreation concept for the area. Against the advice of the city planners, the appellants' proposal was approved by council at its meeting on 25 July 1990. Council resolved to initiate an amendment to Town Planning Scheme Number 1 so as to rezone Lot 66 from "Rural" to "Special Zone (Restricted Use) Service Station, Restaurant/Fast Foods" and to provide for the uses detailed in the appellants' plan. The amendment thus initiated was designated "Amendment No 542".

28 The power of a local authority to amend a Town Planning Scheme is conferred by s 7(4)(b) of the Town Planning and Development Act1928 in the following terms:

"7(4) A town planning scheme may, subject to 7A, be -

(a) revoked by a subsequent town planning scheme

(b) varied or amplified by an amendment to the scheme prepared by the local authority, approved by the Minister and published in the Gazette … "

29 The Act is silent on matters such as public notification by advertising, the right of affected ratepayers to object and so on. Such matters were and are covered by the Town Planning Regulations 1967.

30 The Regulations as they stood at the relevant time were not tendered in evidence before his Honour. During the course of his submissions to us, and without objection, counsel for the appellants, Mr Solomon, handed up a print purporting to be the Town Planning Regulations 1967, but it is hard to say from this document how the Regulations stood in 1990. I think we can take it, however, that the Regulations at all material times provided that if a municipality resolved to amend its town planning scheme, a copy of the amended scheme was required to be lodged with

(Page 13)

the respondent and the respondent was required to examine the amendment and make a recommendation to the Minister as to whether he should allow the amendment to be advertised for public inspection: Reg 13.

Main Roads Department objection to initial Amendment 542

31 On 29 November 1990, the Main Roads Department wrote to the Department of Planning and Urban Development objecting to proposed Amendment 542. Its standing to do so arose from its responsibilities with respect to major roads, in this case, Wanneroo Road. The objection was in the following terms:

"This Department objects to the proposed amendment as it implies provision of a high traffic generation land use with access to Wanneroo Road. Desirably this type of facility including the service station should be located away from major intersections in a shopping centre or if justified, at a location between intersections on roads where the requirements for safe turning movements can be met.

Additional comments on the amendments are as follows:

1. The land use for Lot 66 should conform with an overall structure plan for the area.

2. The service station use, if justified, be located as close as practicable to the western boundary of the lot.

3. All access to the lot is from Whitfords Avenue.

FOOTNOTE:

In your consideration of this amendment this Department brings to your attention the specific conditions for service station location outlined in Section 5 of the 'Report of the Government/Industry Task Force into Problems of Petrol Retail Site Development' (July 1990)."

The Department of Planning and Urban Development

32 It is convenient here to note that the Department of Planning and Urban Development never was the respondent nor joined to the respondent. It was a public service department which was created in

(Page 14)

September 1989 under s 21 of the Public Service Act. Its functions were to undertake planning studies and provide advice to the respondent and to the Minister on matters to do with planning, including town planning schemes and amendments. The department did not have a decision-making authority. In 1994, the Public Service Act was repealed and the Public Sector Management Act was passed. Part III of the latter Act, in effect, re-enacted the main provisions of the repealed Act, but with numerous amendments. In this way, the Department of Planning and Urban Development became the Ministry for Planning. It remained a public sector agency and retained its advisory functions. It is now called the Department for Planning and Infrastructure.

33 I have paused to mention this because at some stages in argument it seemed to me that counsel for the appellants, Mr Solomon, was under the wrong impression that the Department of Planning and Urban Development was the respondent's predecessor. For example, in his written submissions at par 2.7 Mr Solomon made the following statement: "By letter dated 18 August 1992 from Main Roads Department to the Department of Planning and Urban Development (the predecessor to the Respondent), the Main Roads Department objected to the proposed development … ". Heenan J may also have been under the impression that these two governmental bodies were the same. For example, in par 18 of his judgment he refers to Mr Pawluk who was a planning officer in the Department of Planning and Urban Development as a "senior officer of the defendant". I do not think anything turns on these small misconceptions.

34 Returning now to the history, apparently only the Main Roads Department objected to Amendment 542 at this stage.

Committee for Statutory Procedures objection to the initial Amendment 542

35 A body known as the Committee for Statutory Procedures considered the proposed amendment in December 1990 in the light of the objection from the Main Roads Department. This committee was established by the respondent under s 19 of the Western Australian Planning Commission Act 1985 and (by way of delegation) undertook the responsibilities of the respondent with respect to planning matters referred to it by the respondent. It is now called the Statutory Planning Committee. The Committee (in effect, the respondent) resolved to recommend to the Minister (then the Hon Kay Hallahan) that she withhold consent for

(Page 15)

Amendment 542 to be advertised for public inspection and recorded its reasons as follows (AB 2100 - 2101):

"(i) The proposal is premature in the light of the planning study being undertaken by the Department of Planning and Urban Development of the Yellagonga Regional Park which adjoins the proposed site. Any development proposed will need to be co-ordinated with the recommendations of the planning study;

(ii) The service station component is undesirable in the proposed location because of its potential traffic impact and the fact that its location in being extremely prominent should be utilised for a more attractive style development from an urban design point of view

and to advise the applicant that:

The concept of a restaurant complex may be acceptable, however any such development should be co-ordinated with the proposals for the Yellagonga Regional Park and in this case the applicant is invited to liaise with the Department."

Yellagonga Regional Park

36 The reference to Yellagonga Regional Park in the above record is a reference to an environmentally important area of land of some 1500 hectares which adjoins Lot 66. The area includes swamps and wetlands and takes in Lake Joondalup to the north. The land is reserved for parks and recreation and various land use studies were undertaken by the Department of Planning and Urban Development, starting in about 1990, with a view to the whole or most of the area becoming a fully managed regional park. The significance of the area is best described by taking the following extract from the judgment of Heenan J:

[34] … Yellagonga Regional Park was the product of a report which was released for public comment in November 1992. Occupying some 1500 ha comprising Lake Joondalup, Walluburnup and Beenyup Swamp and Lake Goollelal, the Park includes some of the most significant wetlands in the metropolitan region of Perth. The wetlands support an abundance of wildlife and provide summer refuge for water-fowl from inland and other

(Page 16)

areas. The Park was planned so that existing wildlife and wetlands would be retained, a variety of 'passive recreation facilities' developed around the lakes and a system of bicycle, pedestrian and nature trails constructed to enable people to move around the Park itself. 'Recreation, Sports and Leisure' were proposed for the area adjacent to Lot 66. The final report stated that 'there is a need to ensure that appropriate planning controls are in place on land abutting the Park to ensure there is no detrimental impact on the lake system' and that 'structure planning and development guidelines for new developments proposed adjacent to Yellagonga Regional Park should be examined with the objective of maintaining the Park's social, environmental and recreation values and that the design of new development should consider storm water drainage, principles of water sensitive design, retaining and re-establishing native vegetation, managing public access and control of development works'."

37 Precisely how the park was to take shape and be managed was to be the subject of a management plan. This explains the reference by the Committee for Statutory Procedures in its resolution referred to above to a "planning study being undertaken by the Department of Planning and Urban Development of the Yellagonga Regional Park which adjoins the proposed site".

38 In the report which accompanied its recommendations, the Committee for Statutory Procedures raised substantial planning objections with respect to Amendment 542, including:

"• The proposal will attract passing traffic and being at the intersection of a Controlled Access Highway (Whitfords Avenue) and an Other Major Highway (Wanneroo Road) will result in an unnecessary degree of traffic conflict and disruption to the free flow of traffic along these roads;

• The service station site is not well located in respect to the Taskforce's site location criteria i.e. on the intersection of two major roads. The site is also undesirable from an urban design point of view as it is visually prominent and has great potential as the gateway or entry statement for the Yellagonga Regional Park.

(Page 17)

Other Concerns

• The Main Roads Department has objected to the proposal on grounds of traffic impact and considered that the development should conform to an overall structure plan in order to rationalise access to the roads."

39 In the discussion part of the report, observations were made to the effect that the crucial aspect of the proposal to which objection was taken "is the intensity of the development, it being presented as an ad hoc development and the location of the service station on the corner of Whitfords Avenue and Wanneroo Road … The prominent and strategic location of the site offers great potential for a well designed entry statement for the Yellagonga Regional Park … In this respect the service station is totally undesirable in the proposed location and should at least be relocated to the northern corner of the lot or possibly be rejected altogether from the subject site".

The Minister's refusal - December 1990

40 Unsurprisingly, in the light of this report and of the objection from the Main Roads Department, the Minister refused to grant her consent to the advertising of the proposed amendment. That refusal is dated 27 December 1990. Formal advice of it was despatched to the City of Wanneroo on 2 January 1991 by the Department of Planning and Urban Development in a letter in the following terms:

"It is advised that the Hon Minister for Planning has withheld consent for the Amendment to be advertised for public inspect for the following reasons:

1. The proposal is premature in the light of the planning study being undertaken by the Department of Planning and Urban Development of the Yellagonga Regional Park which adjoins the proposed site. Any development proposed will need to be co-ordinated with the recommendations of the planning study.

2. The service station component is undesirable in the proposed location because of its potential traffic impact and the fact that its location in being extremely prominent should be utilised for a more attractive style development from an urban design point of view."

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41 In February 1991, the city resolved to discontinue Amendment 542 and to advise the appellants' consultants that "the outcome of the Yellagonga Regional Park Planning Study should be awaited prior to any further action taking place on the proposal for family restaurants and a service station" (AB 2106).

42 The resolution to discontinue the amendment was later rescinded and replaced by a resolution that "Council … defer consideration of Amendment Nos … 542 until the study of the Yellagonga Regional Park is completed".

43 By late 1991, the Yellagonga Regional Park planning study had still not been completed, but it had become common knowledge that the final report would be little different from the draft report, the content of which was known to the city. The city planner did not think there was any major impediment to the scheme amendment in the draft report, with the possible exception of the proposal for the development of a service station on Lot 66. He so advised the council.

The modified Amendment 542

44 It would appear that on 4 December 1991, the appellants sent a deputation to the council. The purpose of this appears to have been to arrive at a revised scheme amendment which would be satisfactory to the appellants and which the city would be prepared to support and send forward to the Minister for reconsideration.

45 At this meeting, or shortly before or after it, a modified amendment proposal was submitted by the appellants in which four family fast food restaurants, a reception/function centre and a service station were proposed, with different landscaping. According to this proposal, the service station would remain on the Wanneroo Road frontage. The council resolved to accept this modified proposal, although it is apparent from the city planner's report that there remained quite serious planning concerns. In his report to the council for its meeting on 13 November 1991 at which the modified proposal was to be considered, the city planner, Mr Drescher, said:

"The Minister has expressed some concern at the service station aspect of the proposal. Council itself has previously not supported a service station on this site. However, the applicant is proposing an integrated development and landscaping of the

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proposal is a high priority, together with the provision of links through to the Regional Open Space.

The applicants have been advised previously that there will be a need to modify the concept for the development and any further concerns the Minister may have could be addressed through the amendment process."

46 He recommended to council that it seek the Minister's reconsideration of the amendment in the form put up by the appellants with a view to obtaining his approval for the new concept to be advertised for public comment. It is apparent that he anticipated resistance to Amendment 542 even in its modified form, but considered that the specific objections could be addressed when and if raised by the respondent or by the Minister. Mr Drescher's recommendation was accepted and council resolved to modify Amendment 542 so as to rezone the subject land from "Rural" to "Service Station and Special Zone (Restricted Use), Restaurant/Fast Foods, Convention/Function Centre" so as to provide for the modified proposal; and to forward this form of scheme amendment to the Minister seeking "reconsideration of the amendment for preliminary approval to advertise".

47 As it turned out, the exact modification to the original scheme amendment became something of a sticking point and was the subject of considerable debate over a number of meetings of council. From the minutes of the meetings which were tendered in evidence, it would appear that some councillors were of the view that there should be no service station on the site at all. Most were of the view that the service station should at least be relocated to the other (western) end of the site away from the Wanneroo Road frontage and with no direct access from Wanneroo Road. Ultimately, it seems, the appellants managed to persuade the council to adopt their proposal and to send it forward to the Minister for his "reconsideration … for … approval to advertise". These resolutions were passed on 13 May 1992.

48 It is as well to set out the full text of the resolutions passed by the council on that date. They were as follows (AB 1744 - 1745):

"Resolved to:

1. modify Amendment No 542 by rezoning Lot 66 Whitfords Avenue, Woodvale from 'Rural' to 'Service Station and Special Zone (Restricted Use), Restaurants/Fast Foods, Convention/Function Centre';

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2. forward modified Amendment No 542 to the Hon Minister for Planning seeking his reconsideration of the amendment for preliminary approval to advertise;

3. prior to final adoption of Amendment No 542, require approval for the development from the Technical Officers of the Environmental Protection Authority;

4. advise the applicants Chappell & Lambert on behalf of N, S & H Trandos that the proposed concept should be modified to delete the left turn only lane from Whitfords Avenue;

5. advise the applicant to cede an 0.1 m access control strip along the Wanneroo Road and Whitfords Avenue frontage;

6. prior to final adoption of Amendment No 542, require determination of the entry/exit on Wanneroo Road by the Main Roads Department."

49 The reference in item 4 to "the left turn only lane from Whitfords Avenue" reflects an objection from the city engineers. This was to the effect that for traffic flow reasons, and to preserve the function of Whitfords Avenue within the road hierarchy in the north-west corridor as a traffic carrier with limited access at specified intersections, access to the site from Whitfords Avenue should be limited to full intersection access (in and out, so to speak) at a single point. The city engineers considered that this point should be at the western boundary of the development, ie, the boundary furthest from the Wanneroo Road/Whitfords Avenue T-junction.

50 It would seem that by July 1992, the Main Roads Department had once again begun seriously to think about the future need for grade separation at, inter alia, the Whitfords Avenue intersection as the result of predictions in a "new model" with respect to the north corridor traffic volumes. It was recognised at this time that this possibility had "implications" for the appellants' proposal: AB 2138.

51 On 18 August 1992, the Main Roads Department wrote to the Department of Planning and Urban Development reiterating its earlier objections to the appellants' proposal. This letter made no reference to the possibility that at some time in the future there might be a need for grade separation at this intersection.

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52 There is evidence that by 14 October 1992, the Main Roads Department had come firmly to the view that in due course there would have to be a four-way intersection with grade separation at this point for which about half Lot 66 would be required and that this was known to the Department of Planning and Urban Development. So much is apparent from the letter written by the Department of Planning and Urban Development to the Main Roads Department on that date (AB 1472).

Objection of Committee for Statutory Procedures objection to the modified Amendment 542

53 The modified rezoning application, ie, the modified Amendment 542, was considered at the meeting of the Committee for Statutory Procedures on 1 December 1992. The minutes of that meeting were tendered in evidence before Heenan J (AB 2144). It is apparent that the Committee was opposed to the proposal on a number of grounds. At the risk of oversimplification, I would summarise the Committee's objections as follows:

1. Traffic flow predictions revealed that in due course it would be necessary to realign Gnangara road so that it came on to Wanneroo Road opposite Whitfords Avenue and to install a four-way grade separate intersection with lights at that point. This would involve the construction of a "half cloverleaf" for a portion of which at least half of Lot 66 would be required.

2. In any event, it was undesirable that a high traffic generation land use with access to Wanneroo Road be located at this point. This type of facility should be located away from major intersections, preferably in a shopping centre or alternatively at a location between intersections where the space requirements for safe turning movements could be met.

3. Any development on the site should, anyway, conform to an overall structure plan in order to rationalise access to the site and the adjoining reserved land - the Yellagonga Regional Park.

4. The proposed development was not consistent with a number of major planning initiatives, such as "Metro-plan" and the North-West Corridor Retail Strategy which

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advocated against allowing sporadic retail developments outside existing and planned retail centres or precincts.

5. The proposed development would be inconsistent with the main principles contained within these studies which discourage commercial ribbon development along major highways, the main function of which is to carry through traffic.

6. The proposed development would be inconsistent with the Yellagonga Regional Park report which aimed for or encouraged the retention of "visual relief" views to Lake Joondalup and its environs from Whitfords Avenue and Wanneroo Road.

7. The proposed development did not fit in with the overall concept of recreation, sport and leisure activities proposed in the Yellagonga report. No integration with those activities was attempted in the proposals for Lot 66. The development was designed to attract passing trade, not to service people who might be attracted to the park.

8. The location of the service station did not meet the broad planning objective that service stations should not be established at locations which are unsuitable on traffic and amenity grounds. The Whitfords Avenue/Wanneroo Road intersection would be working beyond its capacity before long and on that ground alone a service station at the site was undesirable. On amenity grounds, the service station did not complement the Yellagonga Regional Park.

9. The fast food outlets were not complementary to the development of the Park. They relied on passing trade and were high traffic generators, making them also undesirable at this busy intersection.

10. Whilst restaurants and conventions centres were uses which may be compatible with Yellagonga Regional Park, the intensity of the proposed development was inappropriate. It was preferable to locate restaurants and kiosks within the park adjacent to scenic places.

54 The Committee recommended that the Minister withhold consent for advertising.
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The Minister's refusal - December 1992

55 The Minister accepted the Committee's recommendation and refused to give his consent for the modified amendment to be advertised for public comment. In a letter to the city of 10 December 1992, the Department of Planning and Urban Development said:

"It is advised that the Hon Minister for Planning has withheld consent for the Amendment to be advertised for public inspection for the following reasons:

1. The proposed rezoning and subsequent development would give rise to excessive traffic generation at the intersection of Wanneroo Road/Whitfords Avenue which would interfere with the free flow of traffic and create a potential traffic hazard.

2. The proposal conflicts with the Metropolitan Centres Policy which advocates that commercial development should be located in planned centres. The proposal would result in ad hoc commercial ribbon development contrary to the objectives of the Policy.

3. The proposal would be detrimental to the visual amenity of the Yellagonga Regional Park.

4. The proposal has not been designed to promote integration with land to the north of the site and therefore does not satisfy the objectives of the Yellagonga Regional Park Report.

5. Part of the site of the proposed rezoning may be required for road improvements and the proposal could prejudice this requirement."

The Minister's reconsideration of the modified Amendment 542 - January 1993

56 The appellants were undeterred. They sought an appointment with the Minister and asked the town clerk of the City of Wanneroo to make representations to the Minister on their behalf. The acting town clerk

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acceded to this request and on 13 January 1993 wrote to the Minister (by now The Hon D L Smith MLA) in the following terms:

"Dear Minister

AMENDMENT NO 542: TRANDOS

I understand that Mr N Trandos has an appointment to meet with you regarding refusal of permission for Amendment No 542 of the City of Wanneroo Town Planning Scheme No 1 to be advertised for public comment … I have been requested to write to you to inform you of the Council's resolution in this matter.

The Council has consistently supported the proposed rezoning and its Resolution G20514 is set out in full below.

(The full text of the six resolutions passed at the 13 May 1992 meeting are then set out).

I understand you may not have been aware of this resolution in detail. If approval is granted to advertising, all interested parties and the general public will have the opportunity to comment and the Council will be in a position to consider the matter further."

The Minister's consent to advertise the scheme amendment

57 It is not clear from the evidence whether the appellants ever did get an audience with the Minister. However, on 18 January 1993, the Minister made a note on the foot of the acting town clerk's letter of 13 January in the following terms:

"Having read this letter I am prepared to reconsider and allow this to go to advertising.

However it should be noted that I do so with the following specific reservations:-

1. Having a service station on this site especially in the position and with the access indicated.

2. The traffic entry and circulation which seem to me to be almost unworkable. The original slipway proposal seems better - especially if it was combined with a small

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vegetation strip and a wide accessway at the back parallel with Whitfords Avenue. The accessways in general should not go through car parking areas - especially where children are likely to be. It is also sometimes better to have more vegetation on site than on the verge.

3. The approval to advertise is only that and the final approval will depend on public submissions and some resolution of the issues I have raised."

58 The decision of the Minister to allow the amendment to go forward for advertising for public comment is heavily relied on by the appellants in support of their case that the highest and best use of the land was the use proposed in the modified Amendment 542. As I understood the argument, the proposition underlying this contention is that by obtaining the Minister's approval to advertise, the appellants and the city had cleared all major hurdles in the way of the amendment and, subject perhaps to some changes of detail, the amendment would obtain final approval.

The effect of the Minister's consent to advertise the scheme amendment

59 There was evidence from planners to the effect that in their experience it is generally the case that a scheme amendment for which approval to advertise has been given will be given final approval. There is no reason to doubt their evidence. A planning decision made by the responsible Minister to allow a town planning scheme or an amendment to a scheme to go to the public for comment would ordinarily mean that the Minister was himself satisfied that, on the face of it, no serious planning objections existed or remained. There would be little point in going ahead with advertising unless this was so.

60 In this case, however, it was not the position that ministerial consent to advertise meant that all significant planning objections had been cleared away. It would appear from the evidence that the Minister and the advisory bodies remained opposed to Amendment 542 and that the single factor which caused the Minister to alter his decision to refuse to allow the proposed amendment to be advertised for public comment was the letter which was written by the acting town clerk of the City of Wanneroo, reproduced above. The only point of persuasion of any substance at all in that letter is the plea in the last sentence: "If approval is granted to advertising, all interested parties and the general public will have the opportunity to comment and the Council will be in a position to consider the matter further." That was an entreaty to the Minister to at least allow

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advertisement, notwithstanding his opposition to the proposal, and on the understanding that the Minister might well still refuse it on planning grounds. The Minister's reaction to the letter does not indicate that he was in any way persuaded that the planning objections to the proposal were insubstantial or that he was ready to approve the amendment. As he put it, "The approval to advertise is only that … ".

61 The Committee for Statutory Procedures remained opposed to the amendment and by recommendation sent to the Minister on 2 February 1993 even attempted to persuade him to reconsider his latest decision to allow advertising. According to his note at the foot of that recommendation he did reconsider, but was not persuaded to change his mind to allow advertising.

62 On 18 February 1993, the Department of Planning and Urban Development wrote to the city advising it that consent for the scheme amendment to be advertised for public inspection had been granted by the Minister. It was expressly advised that this consent had been granted notwithstanding a recommendation from the Committee for Statutory Procedures that rezoning should be refused on grounds including:

(a) that the proposal conflicted with the Metropolitan Centres Policy (a planning study which advocated that commercial development should be located in planned centres);

(b) that the proposal would result in ad hoc ribbon development which also was contrary to the objectives of the Metropolitan Centres Policy; and

(c) that the proposal would be detrimental to the visual amenity of the Yellagonga Regional Park.

In this letter, the city was advised that it would be required to "respond" to these concerns if and when the amendment was submitted for final approval.

63 In short, and notwithstanding the Minister's grant of consent to advertise, there remained very substantial opposition to the scheme amendment and it is obvious that that opposition would have been maintained by the governmental planning bodies right down to the final approval procedures.
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The end of Amendment 542

64 The city then set about advertising the amendment, and on 24 February 1993 the town clerk wrote the Main Roads Department inviting that department to "comment on the proposed rezoning". There is evidence that other government bodies and agencies with planning responsibilities were also invited to comment.

65 The Main Roads Department responded on 2 April 1993 as follows:

"Main Roads is opposed to this amendment as the proposal allows for the establishment of a high traffic generating development adjacent to the Wanneroo Road/Whitfords Avenue intersection. Ideally, this form of development should be contained within planned regional shopping centres.

The following comments are offered for consideration in your review of the amendment:-

1. Land use for lot 66 should conform with an overall structure plan for the area.

2. Negative impact of a significant traffic generating development on the function of the Wanneroo Road/Whitfords Avenue intersection.

3. Wanneroo Road and Whitfords Avenue's function in this locality is to carry high volumes of through traffic and not to provide a service and direct access function to adjacent developments.

4. A traffic impact study should be undertaken to assess the impact of the proposed development on the Wanneroo Road/Whitfords Avenue intersection before the amendment is approved.

5. Whitfords Avenue is classified in the Metropolitan Region Scheme as a Category 1 road (No access permitted). Main Roads will permit access of Wanneroo Road, however, this will be restricted to left in, left out only. A median break will not be permitted in Wanneroo Road for right turning traffic.

6. A grade separation structure is being proposed at the intersection of Wanneroo Road/Whitfords Avenue and

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the proposed Gnangara Road realignment. Discussions have taken place with your Council, Mr P Pikor, and the Department of Planning and Urban Development on this proposal. The proposed rezoning will prejudice this proposal as land may be required from lot 66. Should this proposal be accepted, then access of Wanneroo Road will be prohibited and will only be available from Whitfords Avenue. An amendment to the scheme will be required to allow for this."

66 A number of objections were received from members of the public. These objections ranged from over-supply of service stations and fast food outlets in the locality to environmental considerations relating to the Yellagonga Regional Park. It is apparent, however, that the advice of the Main Roads Department in item 6 of its letter of 2 April 1993 that a grade separation structure was being proposed for the intersection involving part of Lot 66 put a stop to further consideration of the scheme amendment. At a meeting on 7 May 1993 between representatives of the city, the Main Roads Department and the Department of Planning and Urban Development (Messrs Drescher, Muttaqui and Pawluk respectively) and two of the appellants, it was accepted on all sides that the development potential of Lot 66 was severely restricted by the proposal for a grade separated crossing with associated ramps at the intersection. Notwithstanding that it was unlikely the roadworks could be started within the next 20 to 25 years, it was agreed that governmental acquisition of the property should be investigated. Amendment 542 was never submitted to the Minister for final approval.

67 It is perhaps worth observing that in March 1993 there was a change of government. There is no evidence which would reveal the attitude of the new Minister to this matter.

68 It was in these circumstances that Lot 66 was reserved in the manner referred to at the commencement of this judgment.

"Highest and best use" - the test

69 The question presented for his Honour's consideration was: what was the highest and best use of the land at the time the respondent elected to purchase it on 16 January 1996? It is clear from the provisions of s 36(2b) of the Metropolitan Region Town Planning Scheme Act that this question is to be considered without regard to the effect of the reservation itself - more accurately without regard to the scheme which effected the

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reservation. It was submitted by Mr Solomon, and it appears to have been accepted by Heenan J, that s 36(2b) reflects the principle stated by the Privy Council in Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 at 572. In that case, the Privy Council said:

"It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. As it was put by Eve J in South Eastern Railway Co v London County Council [1915] 2 Ch 252, 258 'Increase in value consequent on the execution of the undertaking for or in connexion with which the purchase is made must be disregarded'."

70 This, of course, was not a compulsory acquisition pursuant to a scheme that has tended to increase the value of the land as in Point Gourde. It is a case of a scheme reservation which has, if anything, blighted the land. I must say I do not see why it is necessary or appropriate to try to apply the so-called Point Gourde principle to the case. The case is entirely covered by s 36(2b), in my opinion. Applying that section, the land was to be valued without regard for the fact that within 20 or 25 years it would be required for roadworks and without regard for the fact that it was reserved for that purpose in the Metropolitan Region Scheme.

71 As to the meaning of "highest and best use", Heenan J said:

"[4] The phrase 'highest and best use' does not appear in the Act nor, as far as I am aware, in other legislation. I have been unable to discover its precise origin, but over the past 30 years or more the phrase has been applied in many Australian cases dealing with compensation to the landowner for compulsory acquisition of his land. In Adelaide Clinic Holdings Pty Ltd v Minister for Water Resources (1988) 65 LGRA 410 at 415 Jacobs J said, '… the highest and best use means exactly what it says - the most advantageous use of the subject land having regard to planning and all other relevant factors affecting its present and future potential'."

72 To this may be added The Minister v Matford Nominees Pty Ltd [1973] 2 NSWLR 58 per Else-Mitchell J at 59 - 60:

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"A long line of decisions of this Court and the High Court of Australia, of which Turner v Minister of Public Instruction (1956) 95 CLR 264 is an outstanding example, establishes that the value of land at any point of time will reflect its potentiality for the best and highest or most profitable use to which it can be put. This potentiality will arise before actual development or redevelopment is undertaken and, in the case of en globo lands or broad acres, must not be regarded as non-existent until approval for development or redevelopment has in fact been granted."

73 It seems to me that an evaluation of highest and best use does not necessarily depend on an assessment of the subjective intentions and personal views of the particular Minister of the day. Mr David Smith, who was the Minister who granted advertising approval with respect to Amendment 542, was not called to give evidence. Neither was his successor in office, on whom the responsibility would have fallen to grant or refuse the amendment. The potentiality of the land is to be judged by reference to planning considerations viewed objectively, the question being: what is the most advantageous use to which the land can be put, having regard to the dictates of orderly and proper planning? No doubt, this question can be posed in terms of what uses the relevant planning authorities were likely to approve, but care must be taken not to turn the question into a subjective one. I do not think it would be to the point to prove, for example, that a particular Minister was given to disregarding sound planning advice.

Heenan J's conclusions

74 A large volume of planning and traffic evidence was presented to Heenan J. In the end, he had to decide a question of fact, that being whether, but for the reservation, the most advantageous use of this land having regard for proper planning principles was one of the alternative uses proposed by the appellants or some other use.

75 As counsel for the respondent has pointed out, the trial Judge was faced with competing views of expert witnesses on that question. The conclusion he reached was as follows:

"[41] I have concluded that as at 16 January 1996 Lot 66 had clear potential for some form of urban use and that even then it was ripe for development. While its situation at the intersection of Wanneroo Road and Whitfords

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Avenue gave it prominence and made it attractive from a commercial point of view, that same factor rendered it unsuitable for a service station, for a fast food outlet or outlets or for any use which would attract a large volume of traffic. Even if the land were zoned in accordance with Amendment No 542 a development application would need to have been made. Bearing in mind that it would have required the approval both of the defendant and the Main Roads Department (see the evidence of Mr Lambert under cross-examination) it is unlikely that the development could have proceeded.

[42] On the other hand, the land was suitable for uses which would attract no more than a small volume of traffic and which would either enhance the attractiveness of Yellagonga Regional Park or at least complement its function and purposes. Such a use, as suggested by counsel for the defendant, would be a conventional restaurant and function centre not dependent on passing trade, a caravan park, a camping ground or other low key tourist accommodation.

[43] As to the possibility of using the land for residential purposes, in my view the correct approach is that expressed by Mr Foley in his statement of evidence as follows:


'Higher density residential or aged persons developments are not considered to be appropriate uses for the site. Whilst, if carefully designed, such uses could take advantage of the adjoining Park and would be adjacent to a bus route, the site is not in close proximity to district and local centres and other community facilities, would be relatively isolated and would need to have safe vehicular access from the adjoining roads without adverse affects [sic] on the efficiency or safety of those roads.'
If there had been a residential development on Lot 66 it would have needed protection from the heavy traffic at the intersection. An estate wall - whilst providing protection, comfort and community for the residents -

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might also be concealed, or even rendered attractive, by trees, shrubs and imaginative landscaping.

…

[45] In my opinion, although Lot 66 is suitable for residential development, there is a strong likelihood that the density of that development would be not more than R15 or R20. The zonings and uses proposed by counsel for the defendant are those which should be adopted."

The first ground of appeal: the Pointe Gourdeprinciple

76 It was a major part of the appellants' case on appeal that Heenan J failed to apply the Pointe Gourde principle. This was the substance of the first ground of appeal. If I understood it correctly, this argument went as follows. In deciding that the uses contended for by the appellant (in effect the uses in Amendment 542) were not a suitable use of Lot 66, his Honour was significantly influenced by traffic considerations and, in particular, traffic volume projections. It was these considerations which underlay the amendment to the Metropolitan Region Scheme by which part of Lot 66 was reserved "Other Major Highways". Therefore, they should have been left out of account by the Court in determining highest and best use.

77 These contentions are pleaded in ground 1 of the grounds of appeal as follows:

"1. His Honour erred in law in failing to give proper effect to section 36(2b) of the Act in that:

1.1 having held that the Pointe Gourde principle reflected in that section required that not only the reserving of the Land for public purposes but also the potential need for grade-separation of the Intersection be ignored, His Honour proceeded to take into account, as a matter of fundamental importance, the likely increase of traffic congestion at the Intersection in deciding whether or not the Proposed Development would have proceeded but for the Reservation; and

1.2 His Honour should have held that the Pointe Gourde principle required him to hold that any projected increase in traffic at or near the

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Intersection resulting from the Proposed Development could be adequately accommodated by the Intersection."

78 I am not persuaded that a proper application of the Point Gourde principle or of s 36(2b) of the Scheme Act required the trial Judge to leave out of account altogether traffic projections predicting a likely increase of traffic congestion at the intersection or that it required the trial Judge "to hold that any projected increase in traffic at or near the Intersection resulting from the Proposed Development could be adequately accommodated by the Intersection". That would be a wholly unreal approach. In determining the highest and best use of the land for the purpose of determining its value under s 36(2b), the Court was required to have regard for the basic principles of sound town planning as they should be applied to this land. Orderly and proper planning must include looking at the land in the light of the function and main purpose of highways abutting the land; and the extent to which particular land uses, if allowed, may prejudice or compromise traffic efficiency and safety on those roads now and in the future. That is all that his Honour did. He said:

"[28] Wanneroo Road is the only north/south primary distributor east of Lake Joondalup and is likely to remain so for the foreseeable future. Because of the presence of the lake system Whitfords Avenue is one of the few carriers of east/west traffic in the district. For that reason and also because the intersection is only a short distance north of Gnangara Road, which serves the growing residential and industrial areas further east, Whitfords Avenue is a key district distributor.

[29] … Since well before 1996 Wanneroo Road and Whitfords Avenue each has carried a large volume of traffic. It is inevitable that the volume will increase as the North West Corridor continues to expand. Those responsible for planning the use of the adjoining land must give careful consideration to the implications of that use upon the safety and efficiency of the intersection.

[30] If Lot 66 had been developed as proposed by the plaintiffs, the site would have attracted a lot of customers, almost all in motor vehicles. Many would have gone to the service station and to the fast food restaurants during the morning and evening rush hours when the volume of

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traffic passing through the intersection is at its peak. Mr Garry Mason, a consulting engineer with long experience in traffic management, road safety and transport systems, testified that the proposed development would have had a significant impact on the heavy traffic carried by the intersection. He expressed concern mainly with the level of turning traffic. He gave two reasons for that concern. The first reason is that there is potential for a crash every time a motor vehicle turns either left or right. The second reason is that drivers have to slow down to turn, thereby reducing the efficiency of the intersection. He stressed that the increase in the number of vehicles is of far less significance than the increase in the level of turning traffic, particularly when vehicles are entering and leaving a site close to such an intersection."

79 To take these matters into account, as Heenan J plainly did, was not to misapply the principle that the value of the land is to be arrived at without regard for the fact that part of it would be needed for future roadworks. It was to do no more than to say that, prima facie, it is not good planning to provide for a development or developments which will significantly exacerbate traffic congestion, interfere with traffic flow and significantly reduce overall traffic efficiency and safety at a busy intersection especially if that intersection was likely to get even busier in years to come.

80 Of course, whether the learned Judge was entitled, on the evidence, to reach those particular conclusions, or should have done so, is another question, but it was not a misapplication of s 36(2b) or of the Point Gourde principle to look into the future in attempting to assess the likely impact of the proposed land use on traffic using the intersection.

81 In my opinion, ground 1 has not been made out. It is appropriate to deal next with the third ground.

The third ground of appeal - the planning merits

82 By their third ground of appeal, the appellants plead, in effect, that there should have been a finding firstly that because approval to advertise Amendment 542 had been granted and because no new or substantial objections emerged from the public comments following advertising, Amendment 542 would have obtained final approval, and secondly, or

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anyway, the development provided for in Amendment 542 "had intrinsic merit".

83 I have already tried to explain why I do not consider that it is much to the point to engage in predictions as to what the particular Minister might have decided to do if and when the proposed amendment came to him for final approval after advertising. Insofar as this ground of appeal pleads that there should have been a finding that this particular Minister would have granted final approval, it is misconceived and must be rejected as entirely speculative.

84 Insofar as the ground of appeal pleads that the proposal to develop the land in the manner provided for in Amendment 542 "had intrinsic merit", it comes down to a plea that the planning objections to Amendment 542 were insubstantial; or not sufficiently substantial to justify a rejection of the scheme amendment on planning grounds.

85 Heenan J did decide on planning grounds that the use provided for in Amendment 542 was not an appropriate use of the land. I would summarise his findings as follows:

1. It would be bad planning to locate a high traffic generating development such as the proposed development at this intersection of two busy major distributors, the principal function of which is to carry through traffic.

2. The proposed development would be inconsistent with a major planning objective for the development of the metropolitan area reflected in studies such as the Metropolitan Centres Policy, pursuant to which piecemeal or ah hoc commercial ribbon development along major roads should be discouraged.

3. The proposed development did not complement the function and purpose of Yellagonga Regional Park or enhance its attractiveness.

86 It is plain that Heenan J did not think that the objections to piecemeal commercial ribbon development or the incompatibility with Yellagonga Regional Park were of themselves decisive. It is, however, equally plain that he considered that the three matters in the aggregate disqualified the site from this form of use.

87 On behalf of the appellants, it was contended that in reaching this conclusion, his Honour failed either to understand, or give proper weight

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to, the expert evidence led on behalf of the appellants which was to the contrary.

88 In my opinion, that criticism is not justified. Two planning experts were called on behalf of the appellants, they being Mr Lambert and Mr Schrapnel. Their opinion was that there were not substantial planning grounds on which to refuse the proposed development. It is obvious from his judgment that the learned Judge gave careful consideration to their views. He expressly referred to and correctly identified the main points made by Mr Lambert and Mr Schrapnel.

89 Mr Lambert made a detailed analysis of all the major planning studies which might possibly affect a decision as to how Lot 66 should be developed. He concluded that if it had not been reserved "Other Major Highways" and "Parks and Recreation areas", it would have "certainly been developed for urban purposes" (AB 920). He acknowledged the validity of a policy which discouraged ad hoc piecemeal commercial ribbon development along major highways, but considered that the site in question had special attributes which outweighed that consideration.

90 Mr Schrapnel also acknowledged the undesirability from a planning viewpoint of commercial ribbon development, but expressed the opinion that the proposed development did not represent a typical commercial ribbon development. He did not think activities such as restaurants and fast food outlets and function centres were in the same category as showrooms, car yards, big retail stores and the like which comprise the most objectionable form of ribbon development along highways; nor did he consider that the uses the subject of Amendment 542 would set a precedent for commercial ribbon development on the major roads in question.

91 Mr Schrapnel produced a study which he described as a "demographic feasibility and general planning" study of the potential for a mixed use development on the lot. It was his opinion that the site's elevation relative to the wetlands and its visually exposed corner position set it apart from the regional open space around it and it was not right to treat it as if it was a part of that regional open space. For these reasons, he considered that the site possessed a definite commercial development potential. It was his opinion that the site was very well suited to use as a service station, restaurants, fast food outlets and function centres.

92 The respondent also called two planning experts, Mr Drescher and Mr Foley. Mr Drescher had been the city planner for some 25 years

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employed by the City of Wanneroo. When he gave evidence he was in private practice as a planning consultant. It is apparent from his evidence that he had a close knowledge of the planning issues with respect to the area in question. He expressed the opinion that if Lot 66 had not been reserved for public purposes, it would have been rezoned for urban and residential purposes. He thought it would have been rezoned to "Urban" under the Metropolitan Region Scheme and "Residential" under the city's town planning scheme. He thought the highest density coding which the residential rezoning would have received would have been R20, although it was possible that a slightly higher coding may have been permitted for part of the land "to create some small higher density lots within" the new residential estate. He did not believe a rezoning to achieve a more intensive use would have obtained final approval.

93 Although Mr Drescher's reports are expressed in terms of predictions as to what uses and zonings would be permitted, it seems to have been accepted that his predictions were, in fact, his own opinion as to the highest and best use. Understood as such, Mr Drescher's evidence contradicted the opinion evidence of Mr Lambert and Mr Schrapnel. Mr Drescher's opinion was fully supported by Mr Foley.

94 Mr Foley is the Manager, Metropolitan North Branch, Implementation Division in the Ministry for Planning and Infrastructure. He prepared a comprehensive report (exhibit 238) which detailed the planning background with respect to the region containing Lot 66. Concerning the highest and best use for Lot 66, he pointed out that when considering proposals such as development and subdivision applications, planning authorities, including the respondent, had a duty to take "the long-term view". As he said, "it is very difficult if not impossible to change things such as approved access arrangements" once developments and subdivisions are in place. He noted that various studies and modelling had indicated that the intersection of Wanneroo Road and Whitfords Avenue will have very considerable traffic volumes when the land zoned in the Scheme for future "urban" and "industrial" purposes is developed. It was his opinion that "uses which mostly rely on the attraction of passing vehicles such as service stations and fast food restaurants and which are high traffic generators would be detrimental to traffic efficiency and safety and would not represent orderly and proper planning for Lot 66". He described the proposed development as "ad hoc growth of shopping and other commercial uses outside of existing and planned centres" and considered that this would be inconsistent with the Metropolitan Centres Policy which advocated the concentration of commercial development in planned centres. He said that to allow

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commercial uses outside existing and planned centres "can be unattractive, impair traffic flows and safety, and result in lost opportunities to capitalise on development in more appropriate locations".

95 Mr Foley identified a number of areas nearby, including the 600 hectare Wangara industrial area on the eastern side of Wanneroo Road as a better location for commercial facilities. It was his opinion that lower intensity traffic generating uses and development such as some forms of housing, private recreation development or tourist orientated development such as a function centre or conventional restaurant could represent orderly and proper planning for Lot 66, but not the intensity of development provided for in Amendment 542. He thought that the proximity to Yellagonga Regional Park also called for a development having low traffic generation and which was visually attractive and integrated with the park. He was firmly of the view that uses such as service stations and fast food restaurants "which are oriented towards passing traffic, would not be proper planning for Lot 66. They would not build on the opportunity presented by the Park (which has been acquired at considerable public expense) by integrating with and addressing it, resulting in potential detrimental impacts on the amenities of the locality including possible visual, noise, lighting, odours and fume impacts and increased potential for litter and antisocial behaviour".

96 In my opinion, there is nothing which compelled his Honour to accept the opinion evidence of Mr Lambert and Mr Schrapnel in preference to the evidence, in the aggregate, of Mr Drescher and Mr Foley. In particular, Mr Foley's evidence is, on the face of it, convincing and persuasive. He was cross-examined at length and it is fair to say that he was not persuaded to change his opinion as to the general unsuitability of Lot 66 for development in the manner provided for in Amendment 542. Neither was it demonstrated that his opinion was based upon misconceptions or a wrong appreciation of the facts.

97 His final conclusion was that potential uses of the land as at 16 January 1996 which were consistent with proper planning and which would likely come within the expectation of a well-informed and prudent purchaser could have included rural pursuits (with or without the poultry farm operating), private recreation, tourist oriented facilities such as a conventional restaurant, caravan park/camping ground, function centre or accommodation, a special residential subdivision or perhaps a conventional R15 to R20 residential development.

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98 With respect specifically to the traffic problems at this intersection, the appellants called two traffic engineers, Ms McAuley and Mr Boardbar, who expressed the opinion that the traffic impacts of a development such as that provided for in Amendment 542 could be overcome by traffic engineering. The respondent called three traffic engineers, Mr Muttaqui, Mr Uloth and Mr Mason, each of whom expressed the opinion that the traffic impacts of a development such as that provided for in Amendment 542 would be inconsistent with the intended function of the roads at this intersection.

99 I do not consider it necessary to set forth an exhaustive analysis of their lengthy evidence. There appeared to be no disagreement between them that Wanneroo Road is an important primary distributor, the function of which is to carry heavy volumes of through traffic between Perth and important regional centres to the north, beyond Lot 66. Neither was there any difference of opinion as to the importance of Whitfords Avenue as a district distributor carrying heavy volumes of through traffic on an east-west route to and from Wanneroo Road and, via Gnangara Road, to the urban and industrial regions to the east of Wanneroo Road - the so-called north-eastern corridor. Naturally, all of the experts agreed that it was important that the efficient functioning of these distributor roads and of the intersection should be preserved. The appellants' traffic engineer, Ms McAuley, agreed that the role of both Whitfords Avenue and Wanneroo Road was to carry large volumes of traffic both within and between regions ("intraregional traffic and inter-regional traffic" in the language of traffic engineers) and that it was desirable to maximise the efficiency of those roads for that purpose. She agreed that on forecasting done by her own firm, Sinclair Knight Merz, traffic volumes would exceed the capacity of the intersection by the year 2020 without regard for any development on Lot 66.

100 There was no real disagreement between the experts that vehicles turning into and out of Lot 66 would tend to interfere, and come into conflict, with through traffic. Mr Boardbar gave evidence that the main purpose of Wanneroo Road was to carry major regional and inter-regional traffic movement and to carry large volumes of generally fast-moving traffic. Whitfords Avenue was a class-A distributor, the function of which was to carry traffic between industrial, commercial and residential areas and generally connect to primary distributors. His evidence was that this class of distributor has only limited access to adjoining properties; are likely to be truck routes and so on. He agreed that traffic generated by a development of Lot 66 would be traffic that was turning on and off the

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road network adjacent to the intersection and in this sense it would be traffic which conflicted with the through traffic using the intersection.

101 The main difference between the experts was that whereas those called on behalf of the appellants did not consider the traffic impacts to be sufficiently unusual or significant to rule out a development of the kind proposed in Amendment 542, the experts who gave evidence on behalf of the respondent held the opinion that whatever was done in an attempt to mitigate the adverse effect of the development (that is, the traffic generated by the development) on traffic flow through this intersection, those adverse effects could not be reduced to acceptable levels. In substance, their opinion was that the movement of traffic into and out of the service station and fast food outlets inevitably would interfere with the through traffic for which the two roads were mainly provided. Mr Mason, whom his Honour described as a consultant engineer with long experience in traffic management, road safety and transport systems, gave evidence that the proposed development would have had a significant impact on the heavy traffic carried by the intersection. Heenan J was particularly impressed by Mr Mason. He recounted Mr Mason's evidence as follows:

"He expressed concern mainly with the level of turning traffic. He gave two reasons for that concern. The first reason is that there is potential for a crash every time a motor vehicle turns either left or right. The second reason is that drivers have to slow down to turn, thereby reducing the efficiency of the intersection. He stressed that the increase in the number of vehicles is of far less significance than the increase in the level of turning traffic, particularly when vehicles are entering and leaving a site close to such an intersection. In his statement of evidence Mr Mason amplified his concern in the following way:

'Also, motorists travelling through this intersection itself are required to exercise a higher level of concentration than when some distance away. For example:

• Which lane do they need to be in on the approach to the intersection?

• Can they change lanes readily if required?

• What is the state of the traffic signals?

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• If turning left through a Give Way sign, are there any conflicting vehicles approaching from other directions?

• What are the vehicles in front doing?

The close proximity of this site to a major intersection adds to the complexity of the decision making that approaching motorists have to undergo and hence a greater probability of error. In my view, it is the increase in complexity of traffic movements at intersections that is a major contributor to road crashes at these locations.'

Mr Mason posed the traffic problem in a way which I found helpful and convincing. The problem would have arisen not as much from increase in traffic passing through the intersection as from disruption which would have been generated by vehicles turning into and out of the proposed development."

102 As his Honour pointed out, it was this consideration which had led the respondent to adopt a policy that uses such as service stations should be confined to more convenient and accessible sites associated with shopping and commercial centres in the new suburbs.

103 I am not persuaded that the learned trial Judge's preference for Mr Mason's evidence reflects error on his part, as was submitted by Mr Solomon. He was not concerned merely to consider whether it would be possible by clever road design to mitigate or diminish the problems which a high traffic generator such as the proposed development would bring to traffic passing through this intersection. His Honour had to weigh up all the planning considerations, not the least of which was that, as Mr Foley said, it is not in accordance with orderly and proper planning to allow commercial developments on less suitable sites when there are opportunities for such developments to occur nearby on suitable sites. To do so is to waste opportunities for orderly and proper planning. It is, of course, the essence of urban and regional planning that development should be encouraged or made to occur in the most suitable and appropriate locations; and it is a matter of common sense that if ad hoc developments are permitted in less suitable locations, the opportunity to (as Mr Foley put it) "capitalise on development in more appropriate locations" will be lost or at least diminished.

104 It must also be said that the expert opinion led on behalf of the respondent was generally in accordance with the main thrust of the

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objections consistently made by planning authorities and agencies such as the Department of Planning and Urban Development (especially through its Metropolitan Centres Policy), the Committee for Statutory Procedures and the Main Roads Department.

105 In my opinion, ground 3 of the grounds of appeal has not been made out.

The conspiracy theory

106 Another matter should be mentioned only to show that it has not been overlooked. This is what may be described as the conspiracy theory. Mr Solomon tried to persuade us that the trial Judge should have found (and that we should find) that all the planning objections which had been raised by the Main Roads Department and the other governmental planning bodies, at least since about mid-1992, were a smokescreen. He said that there was only one substantial reason why these bodies objected to Amendment 542 and that was to facilitate the acquisition of Lot 66 for roadworks. As I understood Mr Solomon's contentions, they were to the effect that the governmental planning bodies conspired to conceal this fact; and that the range of other objections put forward by these agencies were calculated to mask the true position which was that there were no real planning objections to the use of the land for the purposes proposed in Amendment 542 except that to allow the land to be so used would make it impossible, impracticable or, at the very least, inordinately expensive eventually to resume the part of Lot 66 which, in due course, would be required for the roadworks that were proposed. So, it should be held that the highest and best use was, indeed, the uses provided for in Amendment 542.

107 In order to accept this submission, the Court would be required to find that the objections which had been put forward consistently by the Main Roads Department, the Committee for Statutory Procedures and the Department of Planning and Urban Development since 1990 were not bona fide. Heenan J rejected this submission. I am not persuaded he was wrong to do so.

108 It is true that the Main Roads Department had the idea of a future four-way intersection with grade separation firmly in mind by August 1992, or thereabouts, long before that became one of its stated grounds of objection to Amendment 542. However, the Main Roads Department objected to Amendment 542 on general planning grounds from the start. That is, as early as its first opportunity to object, which was in late 1990.

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As I understood his argument, the main plank in Mr Solomon's conspiracy theory was a few lines in a letter (exhibit 80) written to the Main Roads Department on 2 June 1993 by Mr Pawluk of the Department of Planning and Urban Development. The letter contains a paragraph in the following terms:

"It came to light during the advertising period [that is the advertising period with respect to Amendment 542] that Main Roads had undertaken some traffic forecasting which had given rise to the potential need for a grade-separated crossing at the intersection of Wanneroo Road and Whitfords Avenue. The indicative sketch plans, submitted to DPUD in December 1992, show that approximately half the property would be required to accommodate the proposed on/off ramp. Following receipt of your advice the Council has not proceeded any further with the amendment."

109 It was Mr Solomon's contention that the first sentence of the paragraph contained a deliberate misstatement: that the requirement for eventual grade separation at the intersection had only "come to light" in the advertising period with respect to Amendment 542. It was a misstatement, he said, because the requirement for eventual grade separation was known before the advertising period, that is, before the period between 18 January and 6 April 1993. It was, he said, a deliberate misstatement because it was clear on the evidence that Mr Pawluk knew of the Main Roads Department's plans for eventual grade separation by October 1992 at latest. This, he submitted, was clear evidence of sinister dissembling by the government agencies.

110 Heenan J found that Mr Pawluk's letter did contain a misstatement of the true position but that the misstatement did not sustain the inference of deliberate deception which was contended for by Mr Solomon.

111 I agree that this letter is a wholly insufficient basis on which to erect such a serious allegation. In the first place, I am not myself convinced that there is a misstatement in the letter. It depends on exactly what Mr Pawluk was referring to as having "come to light"; and to whom it came to light. Secondly, this was a letter written to Mr Muttaqui, one of the planning engineers in the road network planning branch of the Main Roads Department itself, and he could not possibly have been deceived by the letter, if deception was intended. Thirdly, in the very next sentence there is a reference to "indicative sketch plans" having been submitted to the Department of Planning and Urban Development in December 1992

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showing grade separation at the intersection. If the first sentence of the paragraph has the meaning contended for by Mr Solomon, the second sentence contradicts it. Fourthly, there would seem to be little point in the Department of Planning and Urban Development trying to deceive the Main Roads Department as to when the Main Roads Department first appreciated the need for grade separation at the intersection. Finally, although Mr Pawluk did not give evidence, Mr Muttaqui did and under cross-examination by Mr Solomon he would not agree that the letter necessarily had the meaning contended for by Mr Solomon.

112 There is no suggestion in Mr Muttaqui's evidence that he was actually misled by Mr Pawluk's letter and there is no suggestion that any other relevant body was misled or could have been misled by it. Mr Foley was also cross-examined about the letter and he dismissed the sentence in question as "unfortunately worded".

113 If it were to be suggested (and I do not think Mr Solomon went quite so far) that Mr Pawluk and Mr Muttaqui were acting in concert to lay a false trail of some kind by writing letters containing false statements concerning the timing of the commencement of planning for grade separation at this intersection, this suggestion was not put to Mr Muttaqui in cross-examination and there is absolutely no evidence to support it.

The second ground of appeal - doubts to be "resolved in favour of the citizen"

114 In ground 2, it is pleaded that:

"His Honour erred in fact and in law in failing to apply the principle that, in cases concerning compensation for resumption, doubts are resolved in favour of the citizen."

115 In support of this ground of appeal, Mr Solomon cited Commissioner of Succession Duties (SA) v Executive Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358, especially at 373 - 4. The particular passage relied on is taken from the judgment of Dixon J at 373 - 4 where the Judge said:

"I should like, however, to add for myself that there is some difference of purpose in valuing property for revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what

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money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While this difference cannot change the test of value, it is not without effect upon a court's attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate."

116 Accepting that the analogy between the valuation of shares for the purpose of exacting succession duty and the valuation of land for the purposes of s 36(2b) of the Scheme Act is good, I am not persuaded that application of the principle expressed by Dixon J would have led to any different conclusion in this case. As I understand the judgment of Heenan J, he was satisfied that the highest and best use of this land was as he determined. I cannot see that there was an occasion for "doubts to be resolved in favour of" a higher use.

117 In my opinion, ground 2 has not been made out.

The fourth ground - likely failure to obtain development approval

118 The fourth ground of appeal is in the following terms:

"His Honour erred in fact and in law in holding that, even if the Land were zoned in accordance with Amendment 542, it is unlikely that the Proposed Development could have proceeded because a development application would have to be made which would require approval of Main Roads Department and the respondent (defendant) in that … "

119 This ground arises out of the statement made by Heenan J in that part of his judgment reproduced in par [41] where the Judge said:

"Even if the land were zoned in accordance with Amendment No 542 a development application would need to have been made. Bearing in mind that it would have required the approval both of the defendant and the Main Roads Department (see the evidence of Mr Lambert under cross-examination) it is unlikely that the development could have proceeded."

120 It is not altogether clear, with respect, what his Honour had in mind when he made that observation. If he thought that the respondent and the Main Roads Department, or either of them, could simply refuse to approve development of the land in the manner provided for in the scheme amendment on the same grounds upon which they had opposed

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the scheme amendment, I doubt the correctness of the proposition. The landowner would be entitled to say that a refusal of the development application on the ground of matters fully considered by the Minister when he/she made his/her decision to grant final approval to the scheme amendment would be a refusal based on matters which were no longer relevant: Re Smith, Minister for Local Government for Western Australia; Ex parte Ransberg Pty Ltd (1992) 80 LGERA 401.

121 In my opinion, however, if his Honour was in error in thinking that the objections made by the Main Roads Department and the respondent could be raised by them again at the development application stage, the error was not material. The learned Judge's reference to the matter was by way of an aside and in no way formed the basis for the conclusion which he had reached on principles governing orderly and proper town planning.

122 I would not uphold ground 4 of the appeal.

The fifth ground - density code R40

123 Ground 5 is in the following terms:

"Alternatively, His Honour erred in fact and in law in failing to find that, if the Land did not have potential for the uses the subject of Amendment 542, its highest and best use was R40 zoning."

124 The reference to "R40 zoning" is a reference to residential density. Under the residential density codes, an R40 zoning would permit 40 residential dwellings per hectare or lots of 250 square metres. That is a residential density zoning that would be appropriate for, say, a retirement village and raises the question whether the location is suitable for such a development.

125 The appellants contended that the respondent's own witness, Mr Drescher, had accepted that Lot 66 had potential for some R40 zoning and that Heenan J was not justified in rejecting his evidence.

126 Mr Drescher did not give evidence that this land was generally suitable for an R40 zoning. His evidence (AB 740) was as follows:

"Can I take you then back to page 5 of your statement and in the third paragraph you give, if you like, a summary of your view of the highest and best use of the land as at January 1996 and can you just tell his Honour what that is?---Having seen and

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been involved in the structure plans and the various evaluations, the various rezonings - my view was that a residential form of development, residential zoning, could have been achieved for the land in short. Although the city supported rezonings, knowing the application, knowing how the commission works, I have difficulty accepting that the land would have been zoned for anything other than single residential or some form of residential development.

Do you have any view as to the likely density of that residential development?---I've heard it said that, you know, R40 would be appropriate but, as I indicated previously, R40 would be something that we would consider adjoining a more intense form of development like a shopping centre or a district shopping centre or local shopping centre. In isolation like this I would have assumed that the best one would have achieved would have been an R20 zoning. You may have had the opportunity to incorporate a small parcel of two or three lots within that that might have had a higher density of R30 or maybe R40 which is in line with the commission's policy. They encourage some small areas of density within residential subdivision but in this location I would say that it would probably be predominantly single residential and there may have been some small higher coding on a few of the lots."

127 Mr Solomon criticised his Honour for failing to refer to this evidence. I do not see how Mr Drescher's evidence really advances this part of the appellants' case which was that the whole of Lot 66 was suitable for "development as either a small lot subdivision or a retirement village". At best for the appellants, Mr Drescher conceded the possibility (as little more than a bare possibility, it seems to me from the transcript) that some small degree of R40 zoning might be approved within an R20 zoning. This was not the only evidence against the suitability of the site for an R40 zoning.

128 Mr Foley gave the following evidence:

"Higher density residential or aged persons development are not considered to be appropriate uses for the site. Whilst, if carefully designed, such uses could take advantage of the adjoining Park and would be adjacent to a bus route, the site is not in close proximity to district and local centres and other community facilities, would be relatively isolated and would

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need to have safe vehicular access from the adjoining roads without adverse effects on the efficiency or safety of those roads."

129 The learned Judge's finding was, at par [45] of his judgment:

"In my opinion, although Lot 66 is suitable for residential development, there is a strong likelihood that the density of that development would be not more than R15 or R20."

130 These findings are amply supported by the evidence of Mr Foley when read together with the evidence of Mr Drescher. In any event, it seems to me that there is much to be said, as a matter of common sense, for the view that it is not in accordance with orderly and proper planning to locate a retirement village at a comparatively isolated site on the busy intersection of two major thoroughfares, the principal function of which is to carry fast-moving through traffic between regional centres.

131 I would accept the submission of Mr Mitchell on behalf of the respondent that there is no cogent evidence to support a finding that a residential density above R20, generally speaking, was appropriate for this land. It was not the appellants' case on the pleadings, nor so far as I can see at trial, that in the event that the Judge found that the appropriate residential zoning was for single residential R20 or something less than R40, he should have found that within that zoning there was the potential for one or two duplexes or a small cluster of townhouses, or something of the kind.

132 I would not uphold ground 5.

The sixth ground - costs

133 Heenan J ordered the appellants to pay the costs of the trial of the preliminary issues, including reserved costs, in any event. By this ground of appeal, it is pleaded that it was not a proper exercise of discretion to award the respondent the whole of the costs because the respondent changed its position at a late stage as to what was the highest and best use of and proper zoning for the land and presented a considerable volume of traffic evidence which was "ultimately not considered relevant by His Honour … ".

134 Little or no argument was addressed to this ground of appeal. Although it was not abandoned, I do not think it was pressed and I can see

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no reason to interfere with the costs order. By far the greater part of the time and effort expended on the trial of the preliminary issues was expended on the question whether the use provided for in Amendment 542 was the highest and best use. There was also substantial controversy on the question whether an R40 residential zoning was appropriate at this location. The appellants' case on both those issues was unsuccessful. That his Honour found that a use higher than rural use was an appropriate use did not oblige him to mulct the respondent in costs. On any appraisal of the outcome of this trial, the respondent was substantially successful.

135 Ground 6 has not been made out.

136 Although we heard argument on the merits as if leave to appeal had been granted, that was only for the sake of convenience. I would dispose of the matter on the basis that the judgment of Heenan J is not attended by sufficient doubt to warrant the grant of leave to appeal and I would dismiss the application for leave to appeal.

137 WHEELER J: I am in agreement with the reasons for judgment of Anderson J, which I have had the advantage of reading in draft. I too would dismiss the application for leave to appeal.

138 EINFELD AJ: I agree with Justice Anderson that leave to appeal should be refused for the reasons his Honour gives.