Western Australian Planning Commission and Furfaro
[2007] WASAT 24
•30 JANUARY 2007
WESTERN AUSTRALIAN PLANNING COMMISSION and FURFARO [2007] WASAT 24
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2007] WASAT 24 | |
| LAND ADMINISTRATION ACT 1997 (WA) | |||
| Case No: | DR:54/2006 | 31 OCTOBER 2006 | |
| Coram: | JUDGE J CHANEY (DEPUTY PRESIDENT) | 29/01/07 | |
| 17 | Judgment Part: | 1 of 1 | |
| Result: | Balance of compensation assessed at $23 201 including interest | ||
| B | |||
| PDF Version |
| Parties: | WESTERN AUSTRALIAN PLANNING COMMISSION VITTORIA FURFARO |
Catchwords: | Resumption of land Assessment of compensation Tribunal's jurisdiction Allegation that acquisition contrary to the Commonwealth Constitution Value of land Whether remaining land injuriously affected Part of land reconveyed to original owner Affect on compensation for balance Assessment of balance of compensation payable |
Legislation: | City of Stirling Town Planning Scheme No 38 Commonwealth Constitution, s 51, s 109 Criminal Code, s 70, s 173 Interpretation Act 1984 (WA), s 37 Land Administration Act 1997 (WA), s 222(1), s 248 Metropolitan Region Scheme Metropolitan Region Town Planning Scheme Act 1959 (WA), s 37(6) Public Works Act 1902 (WA), s 17(1), s 18, s 18(2), s 36(2)(a), s 46A, s 63, s 63(f), s 63(f)(ii) State Administrative Tribunal Act 2004 (WA) Supreme Court Act 1935 (WA) |
Case References: | Maxwell v Murphy (1957) 96 CLR 261 Nil |
Orders | The balance of the compensation payable by the applicant to the respondent in relation to the resumption of land comprising part of former Lot 43 Oswald Street, Innaloo by notice in the Government Gazette dated 2 November 1984 is assessed as $23 201 inclusive of interest. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : DEVELOPMENT & RESOURCES ACT : LAND ADMINISTRATION ACT 1997 (WA) CITATION : WESTERN AUSTRALIAN PLANNING COMMISSION and FURFARO [2007] WASAT 24 MEMBER : JUDGE J CHANEY (DEPUTY PRESIDENT) HEARD : 31 OCTOBER 2006 DELIVERED : 30 JANUARY 2007 FILE NO/S : DR 54 of 2006 BETWEEN : WESTERN AUSTRALIAN PLANNING COMMISSION
- Applicant
AND
VITTORIA FURFARO
Respondent
Catchwords:
Resumption of land Assessment of compensation Tribunal's jurisdiction Allegation that acquisition contrary to the Commonwealth Constitution Value of land Whether remaining land injuriously affected Part of land reconveyed to original owner Affect on compensation for balance Assessment of balance of compensation payable
Legislation:
City of Stirling Town Planning Scheme No 38
Commonwealth Constitution, s 51, s 109
(Page 2)
Criminal Code, s 70, s 173
Interpretation Act 1984 (WA), s 37
Land Administration Act 1997 (WA), s 222(1), s 248
Metropolitan Region Scheme
Metropolitan Region Town Planning Scheme Act 1959 (WA), s 37(6)
Public Works Act 1902 (WA), s 17(1), s 18, s 18(2), s 36(2)(a), s 46A, s 63, s 63(f), s 63(f)(ii)
State Administrative Tribunal Act 2004 (WA)
Supreme Court Act 1935 (WA)
Result:
Balance of compensation assessed at $23 201 including interest
Category: B
Representation:
Counsel:
Applicant : Mr S Murphy
Respondent : Mr J Dean (Acting as Agent)
Mr S Furfaro (Acting as Agent)
Solicitors:
Applicant : State Solicitor's Office
Respondent : N/A
Case(s) referred to in decision(s):
Maxwell v Murphy (1957) 96 CLR 261
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Summary of Tribunal's decision
1 On 2 November 1984, the Metropolitan Region Planning Authority resumed a portion of land owned by Mrs Furfaro in Oswald Street, Innaloo. A claim for compensation was lodged, but was not dealt with for many years. After a number of years, some of the land that had been taken was found not to be necessary for the purpose originally contemplated, and agreement was reached to retransfer that land to Mrs Furfaro. An offer of compensation was made in respect to the land which was required for the public work. After rejecting the offer, Mrs Furfaro took no action to have her claim for compensation assessed. The Western Australian Planning Commission then applied to the Tribunal for a direction that the amount offered be accepted, or alternatively; that the amount of compensation be assessed.
2 Mrs Furfaro submitted that the Tribunal had no jurisdiction to deal with the application on the basis that her rights under the Commonwealth Constitution had been violated. The Tribunal rejected those submissions, and assessed the proper amount of compensation based on the evidence of a valuer called by the Commission. Taking into account the land which had been returned, and an interim payment that had been made by the Commission, the Tribunal determined that the balance of the compensation, including interest, due to Mrs Furfaro amounted to $23 201.
The application
3 This application is brought pursuant to s 222(1) of the Land Administration Act 1997 (WA)(LA Act). The applicant seeks a direction that an offer of compensation for the loss of land resumed by the applicant be accepted by the respondent. The land was taken in 1984, but for reasons which will emerge, finalisation of a payment of compensation has been delayed for a period now in excess of 20 years.
The background
4 Prior to November 1984, Mrs Vittoria Furfaro, the respondent, owned a parcel of land being Lot 43 in Oswald Street, Innaloo. Lot 43 comprised an area slightly greater than 6 acres.
5 By notice published in the Government Gazette on 2 November 1984, a portion of Lot 43, comprising an area of 6638 square metres (the original land) was taken by the Metropolitan Region Planning
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- Authority (MRPA) for the purpose of public work, namely the construction of the Stephenson Highway (Mitchell Freeway to Scarborough Beach Road section).
6 Section 18 of the Public Works Act 1902 (WA)(PW Act) (which applied in 1984 but has subsequently been repealed) provided that, upon the publication of a notice under s 17(1) in the Government Gazette – "the estate and interest of every person in such land, whether legal or equitable, shall be deemed to have been converted into a claim for compensation under the provisions hereinafter contained".
7 The notice in relation to Mrs Furfaro's land was given under s 17(1) of the PW Act.
8 A claim for compensation was lodged by the applicant on 4 April 1985. It claimed compensation in the sum of $75 000. The MRPA obtained advice from the Crown Law Department as to whether "the claim is in order for processing", and it was advised that it was not. The reasons for that advice were that an incorrect gazettal date had been inserted, the form wrongly described the resumed land as having been injuriously affected, and the nature of the interest taken had not completed on the form. The form was returned to the respondent for amendment but no amended form was submitted until 15 October 1990. By the amended form, the amount of the claim was increased to $170 000 for the land and $25 000 for injurious affection. The Crown Solicitors advice to the applicant's predecessor was that the fresh claim should be accepted as an amended claim under s 46A of the PW Act, and should be processed. An extension of time for the lodgement of the claim was granted by the Minister on 14 December 1990.
9 An offer of compensation was made on 18 March 1991. The offer was for $38 030, being $34 573 for the land, plus 10% solatium of $3457. The offer reflected a rate of $5.20 per square metre for the land, plus 10% solatium and interest.
10 There followed certain discussions between a valuer engaged by the applicant, and Mrs Furfaro, or members of her family. A further offer of $53 390 inclusive of all heads of compensation and interest was made by letter dated 17 June 1993. Written rejection of the offer was sent by Mrs Furfaro on 6 August 1993.
11 It was subsequently determined that a portion of the original land was no longer required for the purposes of the Metropolitan Region Scheme. That was because the road design for Stephenson Highway had
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- been modified. The effect of that modification was that some 4920 square metres of the original 6638 square metres was no longer needed for the work. Only 1718 square metres (the relevant land) was required for the highway. The balance ultimately became known as Lot 304.
12 In 1996, the applicant decided to offer Lot 304 back to the respondent without requiring payment of a purchase price. It was no doubt hoped that that may assist in the ultimate resolution of the compensation claim.
13 Around the same time the City of Stirling was preparing the Stirling Regional Centre proposal in respect of lands which included the, as yet uncreated, Lot 304. The Stirling Regional Centre proposal was ultimately implemented through the City of Stirling Town Planning Scheme No 38 (Scheme), a guided development scheme which was gazetted on 18 July 1997. Amongst its objectives, the Scheme was designed to improve areas of land and recover the Scheme costs (being the costs of improving the land), from the owners of it.
14 Eventually, Lot 304 was created as a separate lot, and a certificate of title was issued. On 9 February 1999, the Minister for Planning and the Governor consented to dispose of Lot 304 back to the respondent without requiring payment to the applicant, pursuant to s 37(6) of the Metropolitan Region Town Planning Scheme Act 1959 (WA).
15 There was subsequent correspondence between the Ministry for Planning and the City of Stirling in relation to the payment of Scheme costs. The Ministry was concerned that, having been served with a notice regarding payment of Scheme costs, it might ultimately be called upon to pay the Scheme costs in relation to the land to be transferred back to Mrs Furfaro, who would benefit from the expenditure to improve the land. That correspondence resulted in an amendment to the Scheme which enabled recovery of the Scheme costs from a subsequent owner, in this case Mrs Furfaro. That amendment came into effect in January 2004. On 13 July 2004, the Minister for Planning and Infrastructure approved the disposal of Lot 304 to the respondent without payment of a purchase price.
16 On 30 July 2004, the applicant offered to resolve the respondent's compensation claim by the return of Lot 304, subject to Scheme costs, and offering monetary compensation for the relevant land reflecting $5.24per square metre market value, 10% solatium and interest. The monetary compensation amounted to $9900 inclusive of solatium plus interest at the
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- rate of 13.35% per annum for 4 April 1985 to the date of settlement. An alternative offer was made of a payment of $38 500 plus interest for compensation for the resumption of the original land, on the basis that the return of Lot 304 did not form part of the compensation, but was retained by the applicant.
17 Further correspondence ensued after which the applicant represented its offer of 30 July 2004 on 7 February 2005. By letter dated 9 February 2005, Mrs Furfaro accepted the return of Lot 304 subject to her liability to meet the Scheme costs, but rejected the monetary component of the proposal. By deed dated 22 February 2005, a partial discharge of the claim was executed by the respondent to enable the retransfer of Lot 304 to occur. On 4 March 2005, Mrs Furfaro executed transfer of Lot 304 to a third party for a consideration of $500 000, with the purchaser also agreeing to meet the Scheme costs in relation to Lot 304, which, as at the date of settlement, were approximately $230 000.
18 On 1 June 2005, the applicant made an interim payment to the respondent of $36 633.54 comprising $9900 land value, or $5.24 per square metre, plus 10% solatium, plus interest calculated from the date of taking.
19 On 21 February 2006, the applicant commenced these proceedings.
The respondent's contentions
20 Mrs Furfaro did not attend any of the directions hearings, or the hearing before the Tribunal. Instead, Mr James Dean, a friend of the Furfaro family, and one of Mrs Furfaro's children, Mr Salvatori Furfaro, were given leave to represent her. At various times during directions hearings, at the final hearing, and in correspondence to the Tribunal, Mr Dean, on Mrs Furfaro's behalf, contended that the Tribunal had no jurisdiction to deal with the application before it. Principally, Mr Dean contended that Mrs Furfaro had "not been dealt with on 'just terms' by" the respondent, such that her rights under the Commonwealth of Australia Constitution Act (the Commonwealth Constitution) had been offended. Mr Dean argued that, as a consequence of "diminishing the rights of Mrs Furfaro under the Australian Commonwealth Constitution", s 109 of the Commonwealth Constitution invalidates any provision of the State Administrative Tribunal Act 2004 (WA) or any enabling Act giving the Tribunal jurisdiction to assess compensation. The respondent contended that "the matter of settlement on 'just terms' under the Australian Commonwealth Constitution" was a matter within the province of a
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- Federal Court, and not this Tribunal. Mr Dean's reference to "just terms" is a reference to placitum xxxi of s 51 of the Commonwealth Constitution.
21 The respondent's submissions in this regard are misconceived. Placitum xxxi of s 51 of the Commonwealth Constitution provides for the Parliament of the Commonwealth to have power to make laws in respect to the acquisition of property for any purpose in respect of which the Commonwealth Parliament has the power to make laws. It does not preclude, nor constrain, the power of a State government to compulsory acquire land for public works. It is not the case that the Commonwealth Constitution confers any "rights" on the citizens of a State in relation to the compulsory acquisition of land by a State Government or its instrumentalities.
22 Mr Dean also made some submissions to the effect that, by reason of certain irregularities concerning the Western Australian State Constitution, "all Act [sic] of Parliament enacted since the first illegal amendment to the State constitution renders those Acts of Parliament illegal …" Thus, it was argued, the legislation under which the applicant acted gave no relevant right to compulsorily take the land, and legislation purporting to authorise this Tribunal to assess compensation for such a taking is invalid.
23 It is not open to this Tribunal to review the validity of legislation which confers jurisdiction on it. The Tribunal is obliged to proceed on the assumption that the legislation which creates it, and which confers jurisdiction upon it, is valid. Any challenge to the validity of legislation must be undertaken in the superior courts of the State or Commonwealth. The submissions made by Mr Dean simply do not arise for proper deliberation in the context of the proceedings in this Tribunal. However, in not dealing with them, I would not wish it to be thought that I am encouraging the pursuit of the arguments in any other forum. Mr Dean indicated his intention to pursue the matter elsewhere when these proceedings are completed, and that is a matter for him and Mrs Furfaro. I would not wish it to be thought that discussions during the hearing as to the possibility of taking action elsewhere suggest that I recognise any merit in the constitutional attack on the process before the Tribunal.
24 A further submission by Mr Dean was that there had, in fact, been no effective taking of the land in 1984, because Mrs Furfaro had not been paid for the land simultaneously upon the taking. That submission appears to be based on the proposition of a requirement that land can be taken only on "just terms" by reason of the Commonwealth Constitution,
(Page 8)
- and that land taken without immediate payment cannot said to have been taken on "just terms". As a consequence, Mr Dean argued that the taking of the land constituted a contravention of s 70 of the Criminal Code (forcibly keeping possession of land), or s 173 (refusal by public officer to perform duty). In the course of the hearing, Mr Dean suggested that officers of the Tribunal may be making themselves party to those contraventions of the Criminal Code. Mrs Furfaro's position was that, rather than deal with the application, the Tribunal should instruct the applicant to further negotiate.
25 The respondent's position overlooks the provisions of s 18 of the PW Act which provides that the interest formerly enjoyed by Mrs Furfaro in the original land was converted to a claim for compensation upon the publication of the notices of taking. PW Act, and subsequently the LA Act, provide for a mechanism and basis for the assessment of the value of that right to compensation. The suggestion that payment must necessarily be made at the time of the taking has no foundation in the applicable legislation. Even if there existed an applicable constitutional obligation to take "on just terms", that would not require immediate payment. It would be sufficient that a mechanism for payment of the value of the resumed land be provided in the applicable legislation.
26 Furthermore, there is no jurisdiction for this Tribunal to direct the applicant to further negotiate on the basis of payment for the land at present day values, as suggested by Mr Dean. The basis of the compensation payable is to be found in the applicable legislative provisions, which, in short, direct that the land is to be valued as at the date of the taking.
The basis for assessing compensation
27 While the relevant provisions of the PW Act have been repealed, the respondent's right to compensation pursuant to the terms of the PW Act is preserved (s 37 of the Interpretation Act 1984 (WA)). However, the current provisions under the LA Act relating to the procedure to be followed to determine the content of that right apply to the proceedings (see Maxwell v Murphy (1957) 96 CLR 261 at 267).
28 Section 63 of the PW Act requires that, in determining the amount of compensation to be paid, regard should be had solely to:
(a) the value of the land with any improvements as on the date of gazettal of the notice of taking, without regard to
- any increased value occasion by the proposed public work;
- (b) any damage to the claimant by reason of the severance of land from other adjoining land or any injurious affection to the other remaining land;
(c) an amount, referred to as solatium, not exceeding 10% of the amount of the compensation for the compulsory taking; and
(d) simple interest calculated on the compensation at the rate payable in respect of judgment debts pursuant to s 142 of the Supreme Court Act 1935 (WA) (in this case 13.35% per annum). Interest is to run from the date of the taking.
Land value
29 The respondent did not adduce any expert evidence as to the value of the land. Mr Dean asserted that Mrs Furfaro should be compensated based on the present value of the relevant land, and although he proffered certain figures as to that value, no attempt was made to establish that any particular value by way of evidence. The applicant adduced evidence from Mr Rodney Graham Pember, a licensed valuer, who had substantial involvement in relation to the resumption of the original land going back to 1983. He had prepared a number of reports over the years in relation to the value of the land as at the date of taking.
30 Section 63 of the PW Act makes clear that compensation is to be assessed having regard to the value of the land as on the date of the gazettal of the notice of taking. Mr Dean asserted that, by reason of the decision in November 1998 to retransfer Lot 304 to Mrs Furfaro, the Commission lost any entitlement to revert to 1984 values for the purpose of assessing compensation for the balance of the land. There is nothing in the legislation, nor in the correspondence or documents relating to the retransfer of Lot 304, which provides a basis for that submission.
31 It is necessary to resolve the manner in which the retransfer of Lot 304 is to be treated in the context of the claim for compensation which involved the whole of the original land. The partial discharge of claim executed as a deed on 22 February 2005 declared that the transfer constituted an advance payment made pursuant to s 248 of the LA Act. The transfer constituted partial satisfaction and partial discharge of the right to compensation arising in relation to the acquisition of the original
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- land and/or other claims, loss or damage, or injurious affection of other land, occurring by reason of the acquisition of the original land. The deed further provided that any aspect of the claim or the amount of any compensation due to be paid, which was not agreed, should be determined by action in the appropriate Court and in accordance with the LA Act.
32 On one construction of the deed of partial settlement, its affect might be that the value of the land returned should be set off against the compensation amount for the resumption of the original land valued as at 1984. It is clear that, if that approach were taken, the value of Lot 304 as at the date it was returned to Mrs Furfaro would have been well in excess of her entitlement to compensation for resumption of the whole of the original land.
33 That is not, however, the way that the Commission approached the matter. The offer made in February 2005 clearly contemplated that the return of Lot 304 would represent compensation for the taking of the area of land comprised in Lot 304, and compensation for taking of the relevant land would be assessed on the basis of the value of that land as at the date of taking. In my view, that was a sensible and appropriate proposal in the light of the circumstances of the matter as they had evolved over a very long time. The deed of partial discharge of claim should, in my view, be construed as recording the transfer of Lot 304 as compensation for the taking of the area of land comprised within that lot, leaving compensation for the taking of the relevant land to be assessed. Having considered the evidence as to the value per square metre of the land as at the date of taking, I am satisfied that the return of Lot 304 represented full compensation for the taking of that portion of the land. It follows that the issue for determination is the value of the relevant land at the date of taking.
34 Over the years, Mr Pember was involved in negotiations with the respondent, and was aware of valuations by other valuers prepared in 1985 and 1992. In 1997, when the possibility of retransferring the proposed Lot 304 to Mrs Furfaro was being considered, he prepared a report as to the value of the relevant land. He considered that the land had a value of $5.24 per square metre, and on that basis expressed the opinion that the relevant land was valued, as at 2 November 1984, at $9000 excluding solatium.
35 He subsequently prepared a further valuation report on 23 September 2005. At that time, he concluded that a fair and reasonable
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- value in 1984 for the relevant land would be in the order of $10 per square metre.
36 At the hearing, Mr Pember expressed the opinion that the market value of the original land as at 2 November 1984 was $33 190 to $66 380, which equates to $5 to $10 per square metre. He considered that that rate per square metre was applicable to the smaller portion comprising the relevant land. He considered that, in 1984, the land would have been perceived as marginal for development purposes and that, at that time, was not in an area being "targeted by developers". Although the limited evidence of comparable sales suggested a somewhat lower number, he considered that a value of $10 per square metre for the relevant land could be justified. He considered the value of $17 180 for the relevant land as "generous" and based upon an assumption that the potential for geotechnical problems was limited, whereas "a reasonably informed purchaser would probably have discounted the purchase price … to reflect such a risk in the absence of geotechnical investigation". He expressed concern that the appearance of the land suggested that it may have been peat affected, but noted that the respondent contended that it was not peat affected. Using the benefit of hindsight, Mr Pember considered that it might be reasonable to assume that a potential purchaser may have recognised the potential for higher density development or commercial development within a reasonable period of time, and it was on that basis that he assessed the upper range of value at $10 per square metre.
37 In my view, in the context of an evaluation for compensation purposes, it is appropriate to accept the higher end of Mr Pember's range of values as the basis for the assessment compensation. On that basis, the land value as at 2 November 1984, for the relevant land, amounts to $17 180.
Injurious affection
38 In his initial reports, Mr Pember expressed the view that the balance of the respondent's land was not injuriously affected by the resumption of the original land. That was his opinion as expressed in his statement at the hearing. It was, however, a contradiction to comments made by him in one version of his September 2005 report. In that report he said:
"8.2 Severance
Damage suffered
- (f) Due to the severing of land taken from adjoining land in the same fee simple ownership
As there is no composite development over the common boundaries, there would appear to be no compensation arising in regard to the severing of the land from the adjoining land.
(g) Due to a reduction of the value of that adjoining land
Notwithstanding the land has been resumed for the development of the Stephenson Highway, it is relevant to note that given the elevated contour of the land reserved and developed, which would be above that of the remaining land, some disturbance would arise from vehicle movement.
Nevertheless, at the same time of resumption in 1984, Oswald Street was the subject of extensive traffic movement associated with the Innaloo Shopping Centre and the Mitchell Freeway was in place at that time. Vehicle noise associated therewith would have been a significant problem.
We are therefore of the view that the excision of the land for the implementation of the Stephenson Highway would only have added a nominal additional impediment to the remaining land.
Notwithstanding analysis of sales of similar developments backing onto Freeway reserves and other major thoroughfares leads us to the opinion that there is a diminution of value normally of between 8% and 12% on those lots affected when compared with unaffected lots in the same release.
For the reasons outlined in relation to heavy vehicle movements on Oswald Street and the Mitchell Freeway, we have considered the fact that the rear land would be developed to a lesser degree than that closer to Oswald Street. We
- consider therefore that development would be some distance from the Stephenson Highway reserve, and for that reason we have applied a lower impact on value for the remaining land. This is at a 5% diminution in value.
The area of that land is 23,850 hectares, which at $10 per square metre reflects $238,500. A diminution in value of 5% reflects $11,925.
We have rounded the injurious affection to $12,000."
- 8.3 Betterment
Value increase due to the carrying out of, or the proposal to carry out, the public work. The increase to be set off against the amount of compensation that would otherwise be payable under 3(b) above
Nil"
"51. In further re-inspecting the land and not being certain or able to establish where the final levels at which the Stephenson Highway would rest, I was prepared to allow for the possibility that if the levels were excessively above the natural contours, the highway might serve as a visual impediment and allow noise disturbance from future traffic movement to envelop the balance of the Original Land, so as to have an impact on the redevelopment potential. Any sense of an impact from the highway work at the date of valuation in 1984 was not immediately evident given the low intensity nature of development on the Original Land and adjoining properties.
52. As with most Main Roads projects, noise abatement and landscaping measures are ordinarily employed to limit the
- impact. In this instance, I concluded that there might be scope to allow a small diminution in value and provided for the sum of $12,000. My initial report included that component in an attempt to provide a justification for escalation of the compensation sum for a settlement to be reached, as well as addressing a higher core land value, based on the reasons expressed."
40 Mr Pember said that he was prepared to include an injurious affection component of compensation to reflect an assumption that there may have been injury to the perceived redevelopment opportunity for the balance of the land. He said, however:
"I could equally have concluded there was no injury if I had assumed the land could be redeveloped in a commercial manner experiencing good exposure from Oswald Street, and alternatively from the future Stephenson Highway. In 2005 in the context of a need for a report to provide some flexibility for settlement options, I opted for the most generous approach over and above the generous allowance for land value, by allowing a component for injurious affection in the sum of $12,000."
41 His opinion was, however, that in truth there was no injurious affection for the balance of the land.
42 This opinion of Mr Pember was not challenged in cross-examination. Nothing was put forward by the respondent to suggest that the retained portion of Lot 43 was injuriously affected by the resumption. In my view, the assumptions which Mr Pember relied upon in an endeavour to find some justification for an allowance for injurious affection are not reliable. As Mr Pember said, they are assumptions suggested on the basis of hindsight, and events which occurred well after the date of resumption. In my view, a hypothetical purchaser of the balance of Lot 43 would not have paid a reduced price for that land by reason of the public works proposed for the original land, or the severance of the original land from Lot 43. I accept Mr Pember's considered opinion that the portion of Lot 43 which was not resumed was not injuriously affected by the taking.
Solatium
43 All offers by the applicant have involved a component of solatium to the value of 10% of the value of the resumed land. There was no suggestion at the hearing that an allowance of 10% should not be permitted.
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Interest
44 The respondent is entitled to interest on the amount of compensation "from the date of the service of the claim on the respondent to the date of settlement of the claim".
45 The applicant argued that the commencement date for interest should be 15 October 1990, when the amended claim was lodged. It will be recalled that the first claim was lodged by the respondent on 4 April 1985, but was said by the MRPA not to be a valid claim. When the amended claim was received on 15 October 1990, the Crown Solicitors' Office suggested that the amended form be treated as an amendment pursuant to s 46A of the PW Act. Notwithstanding that advice, the then Minister for Planning was requested to, and did, grant an extension of time for lodging a claim pursuant to s 36(2)(a) of the PW Act.
46 The first offer of compensation was made in March 1991, and referred to Mrs Furfaro's claim for compensation "dated the 4th day of April 1985 (original) and your amended claim for compensation dated the 6th day of October 1990".
47 When a further offer was made on 27 October 1997, it proposed the payment of interest "from the date of receipt of claim (4 April 1984)[sic]". The re-presented offer made on 7 February 2005 offered interest from "date of receipt of claim (4 April 1985)". The advance payment made by the applicant in June 2005 was foreshadowed in a letter to Mrs Furfaro dated 14 February 2005. That letter makes it clear that the interest component was calculated from 4 April 1985.
48 It is apparent from the history of correspondence that the applicant has treated the October 1990 claim as an amendment to the original claim lodged 4 April 1985. The extension of time granted by the Minister is inconsistent with that general approach, but otherwise 4 April 1985 has been treated as the date on which the claim was initially made, and as the date from which interest should run. In my view, given that the deficiencies in the document lodged on 4 April 1985 were deficiencies more of form than substance, it is appropriate that that document be treated as the initiation of the claim for compensation. Interest should run from that date.
49 Pursuant to s 63(f) of the PW Act, when an advanced payment of compensation is made, interest on the total amount of compensation is payable only to the date of the first payment, and interest is payable thereafter only on the balance outstanding from time to time.
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- Section 63(f)(ii) provides that when an offer of an advance payment is not accepted within 30 days, no interest shall be payable in respect of the amount so offered.
50 An offer of advanced payment was initially made on 18 March 1991. It was not accepted. It was, of course, an offer in relation to compensation for the taking of the original land. Counsel for the applicant submitted that the failure to accept that offer should be taken into account in assessing the interest payable in relation to any award to which the Tribunal found the applicant entitled.
51 That does not appear to be the approach taken by the applicant in making the advance payment in June 2005. Given the unusual history of this matter and in particular the retransfer of Lot 304, it is not easy to apply the interest provisions fairly. It is clear that there were ongoing negotiations over an extended period, the details of which were not fully explored at the hearing. Whatever may have transpired in those negotiations, the applicant (or its predecessors) always appear to have been prepared to pay interest from the time of the claim to settlement. In the peculiar circumstances of this case, it would not be appropriate to use s 63(f)(ii) to disentitle Mrs Furfaro to interest.
52 The interim payment made to the respondent calculated interest on the sum of $9900 as from 4 April 1985. Interest on that amount should not be recovered after the date of the interim payment. Interest should be paid on the difference between $9900, and the value of the land and solatium as determined by the Tribunal, from 4 April 1985 to the date of this decision.
The amount of compensation
53 The total amount of compensation in relation to the taking of the relevant land amounts to $18 898, comprising $17 180 in land value, and $1718 by way of solatium. The advanced payment made on or about 1 June 2005 was based on a land value and solatium of $9900. The balance remaining is $8998. Interest on that sum at the rate of 13.35% from 4 April 1985 to 30 January 2007 (11 years, 301 days) amounts to $14 203. The total compensation payable by the applicant to the respondent in relation to the relevant land amounts therefore to $23 201.
Orders
54 The balance of the compensation payable by the applicant to the respondent in relation to the resumption of land comprising part of former
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- Lot 43 Oswald Street, Innaloo by notice in the Government Gazette dated 2 November 1984 is assessed as $23 201 inclusive of interest.
I certify that this and the preceding [54] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUDGE J CHANEY, DEPUTY PRESIDENT
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