Retrial ordered in $3m Ellenbrook zoning case

A supreme Court appeals bench has sent a case involving Mt Lawley Pty Ltd and the Western Australian Planning Commission (WAPC) back for retrial.

The case involved a $3 million payment in relation to a 309-hectare area of land west of Ellenbrook, which had been reserved for parks and recreation, and a controlled access highway via an amendment to the Metropolitan Region Scheme (MRS).

Mount Lawley Pty Ltd, owned by Martin Copley and his family interests, contended that the WAPC valuation was flawed and that the land should have been valued not as rural land but as urban land on the basis that it would have been rezoned urban if not for the reservation. Mt Lawley claimed its value was about $15 million.

In their judgment, justices Steytler, Templeman and Simmonds were unusually critical of Justice McKechnie, the original judge, commenting that his judgment was extraordinarily short given the length of trial and time taken to hand down judgment. The trial lasted for 67 days and featured more than 6,000 pages of transcript and almost 800 exhibits.

There was a delay of more than two years before judgment was handed down. Justice McKechnie’s judgment was 24 pages long.

The Supreme Court bench said it was not in a position to make a determination as to whether the valuers had valued land on a proper basis because it had not heard the evidence of the witnesses and Justice McKechnie had not evaluated it. The bench would therefore have to send the case for retrial.

The bench said Justice McKechnie did not take into account relevant evidence in regards to potential urbanisation of land when determining the land value.

“In making such an assessment [of value of land], it is necessary to take into account any urban potential the land may have, and, as well, those characteristics which mitigate against rezoning,” the judgment says.

McLeods Partner Linda Rowley, one of the lawyers who acted on behalf of Mount Lawley at first instance, said it was very disappointing to have to go back through another trial given the amount of money and effort already expended.

It was likely that Mount Lawley would suffer prejudice in attempting to extract the same evidence again given that the issues had polarised so clearly in submissions, she said.

“One thing that did come from the judgment was that the appeal court ruled that interest was payable on the value of land,” Ms Rowley said.

Concerns over the erosion of private property rights through reservations under the MRSs have been expressed by a number of industry sources.

“Under the Land Administration Act, there are a significant number of alternative lots of heads of damages that can be claimed,” Ms Rowley said.

“But the Government is not using this act as much as it should, and is effectively sterilising land without compensation.”

In the Mount Lawley case, and with all MRS reservations, land is acquired under s36 of the Metropolitan Region Town Planning Scheme Act.

The court referred to the difference between the two statutes, agreeing there was a fundamental distinction between them.

“The difference between the two statutes is that the former [Land Administration Act] focuses on ‘compensation’ whilst the latter [Metropolitan Scheme Act] focuses on the ‘price’ to be paid for ‘acquisition,” the appeals judgement says.

While the difference may appear subtle, several industry sources contacted by WA Business News said the Government was using planning legislation to reduce its compensation burden to landowners, and that s36 of the Land Administration Act needed to be repealed and replaced with a provision providing for compensation.

“No-one will ever be properly compensated under planning legislation, and this is a fundamental problem,” one source said.

“People’s land is being invariably depressed because of the threat of a rezoning reservation, and no-one will buy land with that hanging over it. By the time the rezoning reservation happens, the value of the land is severely reduced, and that is the value that is paid.

“People understand that sometimes land is needed for a public purpose, but it is the community responsibility to pay for this, not the individual land owners’.”