06/09/2018 - 10:13

Landowner, WAPC in valuation fight

06/09/2018 - 10:13

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The Western Australian Planning Commission is weighing its options after losing a recent appeal against a Board of Valuers’ decision.

Landowner, WAPC in valuation fight
Brian McMurdo says the case had potential ramifications for landowners who sell reserved land at a depreciated price and bid for compensation. Photo: Robert Frith

A long-running battle between the Western Australian Planning Commission and a Southern River landowner appears no closer to resolution, despite the government agency losing a recent appeal regarding the land’s valuation.

Ralph and Lois Prestage bought the property in 1972 as a long-term investment, when it was zoned for rural purposes. In the 1990s, the planning commission made a proposal to rezone the land and surrounding areas to urban, to allow development, but the land was eventually reserved in 2010 because of its environmental significance.

Lavan special counsel Brian McMurdo, who has been engaged by the property owner, said the reservation of the land for public purposes triggered an opportunity for the owner to make a claim for compensation. As part of this process, the owners also lodged a development application to test whether any development would be allowed, despite the land being reserved. The application was refused, leaving the way clear for the compensation claim.

After many years of legal argument, the owner of the land opted to pursue compensation by getting the land valued by the Board of Valuers, a government agency. The land was ultimately valued at $6.2 million.

However, it what Mr McMurdo described as a highly unusual decision, the planning commission sued the Board of Valuers, claiming the board had not shown procedural fairness to WAPC in making its valuation.

“This was despite the fact that WAPC was aware of the board proceedings being commenced, but chose not to intervene or make submissions,” Mr McMurdo said.

“It is very rare for any government entity to litigate and take on another government entity.”

However, the WAPC commenced an application in the Supreme Court to overturn the Board of Valuers’ decision. The Board of Valuers did not participate in the proceedings, forcing the landowner to defend the board’s decision as second respondent. Justice Andrew Beech dismissed the application in 2017, but WAPC continued the battle and lodged an appeal against that decision to the Court of Appeal.

The decision on the appeal, delivered by the then chief justice Wayne Martin and Justice Graeme Murphy in August this year, dismissed the WAPC appeal after finding the board was not obliged to give WAPC a hearing. The finding also noted that WAPC was aware the board proceedings had started but chose not to intervene, or to make submissions.

Or as Mr McMurdo described, WAPC argued it should have been part of the proceedings, despite choosing not to attend or participate.

The latest decision was handed down on August 21 and WAPC has 28 days in which it can opt to make a special leave application to the High Court. It is not known whether WAPC plans to continue its fight against the valuation.

To complicate matters, the original owners of the land, Mr and Mrs Prestage, have both passed away during proceedings, leaving family members to continue the legal battle against WAPC.

WAPC was now making another argument that no compensation should be payable because the landowner had made and withdrawn an earlier claim for compensation. The Prestage family lodged its original claim for compensation in October 2013, which led WAPC to make an offer to acquire the land, rather than pay compensation, as it is entitled to do.

Mr McMurdo said the ongoing legal battle had potential ramifications for any landowner who sells reserved land at a depreciated price and bids for compensation.

WAPC later made an offer of compensation (in May 2014) of $1.64 million, which was rejected by Mr and Mrs Prestage.

Mr McMurdo said if WAPC’s argument that no compensation should be paid was correct, the commission would never be required to pay compensation, and that any future valuations provided by the Board of Valuers would be pointless.

Department of Planning, Lands and Heritage director general Gail McGowan said WAPC was reviewing the decision.

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