Applicants v Respondent

1 Until recently, Kevin and Dorothy Plunkett were the owners of land at 120 Old Sydney Road, Mickleham. In August 2010 a Public Acquisition Overlay was introduced into the Hume Planning Scheme, reserving land to be acquired by the Roads Corporation (VicRoads) for the Outer Metropolitan Ring/E6 Transport Corridor.[1] The Public Acquisition Overlay affects part of the land at 120 Old Sydney Road.

2 Mr and Mrs Plunkett have a right to claim compensation from VicRoads for 'financial loss suffered as the natural, direct and reasonable consequence' of their land being reserved, under s 98(1)(a) of the Planning and Environment Act 1987 (Vic) (PE Act). There is a dispute about when the Plunketts' right to payment of the compensation arose.

3 On 10 May 2017, Mr and Mrs Plunkett signed a contract for the sale of their land, for a purchase price of $2,705,000. In accordance with the contract of sale, the purchasers paid a deposit of $500,000. The contract of sale provided for the balance of the purchase price to be paid on settlement, which was to take place on 17 October 2017. The sale of the land was completed as agreed and by 17 October 2017 the Plunketts had received the full amount of $2,705,000. The purchasers did not become the registered proprietors of the land until 14 December 2017, when the transfer of title was recorded on the Register of Titles.

4 Mr and Mrs Plunkett submitted a claim for compensation under Pt 5 of the PE Act on 17 July 2017. VicRoads disputed the claim in a letter dated 11 October 2017, saying that the claim was premature because the land had not yet been sold. VicRoads advised that the entitlement to compensation 'may arise in the future following settlement of the Contract of Sale'. The Plunketts referred their claim to this Court on 8 December 2017.

5 On 14 August 2018, Derham AsJ made an order by consent, under r 47.04 of the Supreme Court (General Civil Procedure) Rules 2015, for the hearing and determination of the following separate question:

When did the 'sale of the land' for the purposes of sections 99 and 106 of the Planning and Environment Act 1987 occur?

6 I heard the separate question on 10 and 11 December 2018, on the basis of a statement of agreed facts and an agreed court book. Mr and Mrs Plunkett submitted that the sale of their land occurred on 10 May 2017, when they entered into a binding contract of sale. VicRoads contended that the sale did not occur until 14 December 2017, when the transfer was registered and the purchasers became the registered proprietors of the land.

7 For the reasons that follow, I have concluded that the answer to the separate question is that, on the proper construction of ss 99 and 106 of the PE Act, the 'sale of the land' took place on 17 October 2017, upon completion of the contract of sale.

8 Part 5 of the PE Act provides for compensation for what is known as 'planning blight' - a phrase that describes the effect of reserving land for a public purpose. A reservation of this kind may adversely affect the value of the land, and may also limit the owner's use of the land. The scheme of Pt 5 was explained by Emerton J in Capela v Minister for Energy, Environment and Climate Change:[2]

Part 5 does not deliver compensation for the compulsory taking of land but, rather, for any adverse effects on the use or ability to dispose of land as a result of a reservation. It presupposes that the land remains in the ownership or occupancy of the claimant and therefore provides a right to compensation in a narrower set of circumstances than for the compulsory taking of land. Access to compensation is restricted in a number of ways. For example, compensation is available only to owners and occupiers, as opposed to any person who has an interest in the land, and only upon the happening of certain 'trigger' events. Any compensation paid is recorded on title and can be later recovered if the reservation is removed. Compensation paid is to be taken into account in any later claim under Pt 5 and if the land is later compulsorily acquired.

9 The right to claim compensation is conferred by s 98, in the following terms:

(1) The owner or occupier of any land may claim compensation from the planning authority for financial loss suffered as the natural, direct and reasonable consequence of -

(a) the land being reserved for a public purpose under a planning scheme; or

(b) the land being shown as reserved for a public purpose in a proposed amendment to a planning scheme of which notice has been published in the Government Gazette under section 19; or

(c) a declaration of the Minister under section 113 that the land is proposed to be reserved for a public purpose; or

(d) access to the land being restricted by the closure of a road by a planning scheme.

(2) The owner or occupier of any land may claim compensation from a responsible authority for financial loss suffered as the natural, direct and reasonable consequence of a refusal by the responsible authority to grant a permit to use or develop the land on the ground that the land is or will be needed for a public purpose.

10 Section 98 provides for compensation for two different categories of planning blight. Section 98(1) deals with loss caused by a planning prescription that designates the land to be used for a public purpose. Section 98(2) addresses loss suffered due to a refusal of a planning permit because the land is earmarked for such a purpose. An owner or occupier of land affected by one of the circumstances listed in s 98(1)(a)-(d) has an 'inchoate right' to claim compensation.[3] That right matures into an entitlement to be paid compensation on the happening of one of the 'trigger' events in s 99. By contrast, a right to compensation under s 98(2) is 'instantaneously mature', compensation being payable upon the refusal of the permit.[4]

11 This case concerns a claim for compensation for 'loss on sale' under s 98(1)(a). The relevant trigger event is specified in s 99(b):

A right to compensation and the liability of a planning authority or responsible authority to pay compensation arises -

...

(b) under section 98(1)(a), (b) or (c), on the sale of the land concerned under section 106;

Loss on sale

(1) The owner of land may claim compensation under section 98 after the sale of the land if -

(a) the owner of the land sold it at a lower price than the owner might reasonably have expected to get if the land or part of the land had not been reserved or proposed to be reserved; and

(b) before selling the land, the owner gave the relevant authority not less than 60 days notice in writing of the owner's intention to sell the land.

(2) The owner is not required to give notice under subsection (1)(b) if -

(a) the owner and the relevant authority have agreed that the owner does not have to give notice; or

(b) before or after the sale, the Minister exempts the owner from giving notice on the ground that the requirement to give notice would cause hardship to the owner.

(3) In this section relevant authority means -

(a) the Minister, public authority or municipal council designated in the planning scheme as the acquiring authority for the purposes of this Act in respect of the land; or

(b) if there is no acquiring authority, the planning authority.

13 In addition to imposing procedural preconditions to a loss on sale claim under s 98(1), s 106(1)(a) is 'of practical effect in quantifying the loss caused'.[5] Section 106(1)(a):[6]

... by implication at least, furnishes both the measure of the owner's gross loss and satisfaction of the causal requirement of s 98(1). ... [Section] 106 means that a person claiming compensation in respect of a sale does not as a practical matter have to satisfy the express or implied requirements of s 98(1) as to ownership, loss and causation ...

... informs the meaning of s 98(1) to the extent that the 'financial loss' in s 98(1) is the financial loss described in s 106(1)(a).

14 Section 104 imposes a cap on the compensation that may be recovered under s 98, in the following terms:

The compensation payable for financial loss under section 98 must not exceed the difference between -

(a) the value of the land at the date on which the liability to pay compensation first arose; and

(b) the value that the land would have had at the date if the land had not been affected by any circumstance set out in section 98(1) or (2) or 107.

The purpose of s 104 is 'to limit the compensation payable for losses resulting from the reservation or proposed reservation of land'.[8] The limit applies equally to loss on sale and refusal of permit claims for compensation under s 98. Unlike s 106(1)(a), s 104 does not inform the assessment of loss under s 98(1).[9]

15 Section 105 of the PE Act applies Pts 10 and 11, and s 37 of the Land Acquisition and Compensation Act 1986 (Vic) (LAC Act) to the determination of a claim for compensation under Pt 5 of the PE Act, with any necessary changes. Section 37 of the LAC Act provides for the making of a claim for compensation, and prescribes a two year limitation period.[10] Part 10 of the LAC Act provides for the determination of disputes, with ancillary provisions in Pt 11.

16 Section 108 of the PE Act deals with eligibility to claim compensation:

(1) A person does not have a claim for compensation in respect of any land if that person was not the owner or occupier of the land at the time the right to claim compensation arose.

(2) A person does not have a claim for compensation in respect of the sale of land which the person acquired after -

(a) notice is published in the Government Gazette under section 19 of a proposed planning scheme or amendment to a planning scheme which shows the land as being reserved for a public purpose; or

(b) the approval of a planning scheme or amendment reserving the land for public purposes; or

(c) a declaration under section 113 that the land is proposed to be reserved for public purposes -

unless a subsequent amendment to the planning scheme provides or proposes more stringent planning controls over the use or development of the land.

17 In the case of a claim for compensation under s 98(1), eligibility is confined to those who owned or occupied the land at the time the relevant reservation was imposed or proposed.[11] An 'owner' is defined in s 3(1) of the PE Act to mean, in relation to land under the Transfer of Land Act 1958 (Vic), a person who is registered or entitled to be registered as proprietor of an estate in fee simple in the land. An 'owner' of land not under the Transfer of Land Act is the person who is the owner of the fee or equity of redemption.

18 Any payment of compensation must be noted on the title of the affected land.[12] Where a reservation is removed after compensation has been paid, the person who paid the compensation may recover it from the present owner of the land.[13] There is provision for the responsible Minister to defer the repayment on hardship grounds, including by allowing it to be paid 'on the sale or transfer of the land'.[14]

19 The answer to the separate question as to when the 'sale of the land' occurred in this case therefore has significance:

(a) under s 99(1)(b), as the date on which the Plunketts' right to compensation, and VicRoads' liability to pay compensation, arose;

(b) under s 106(1)(a), as the date on which it is to be determined whether they sold the land at a lower price than they might reasonably have expected to get if part of their land had not been reserved - an exercise which in turn informs the assessment of the Plunketts' loss under s 98(1); and

(c) under s 104, as the relevant date for the comparison between the affected and unaffected value of the land, which determines the maximum amount of compensation payable under s 98.

20 In addition, the date on which a sale of land takes place determines when notice must be given, under s 106(1)(b) of the PE Act, and the start of the two year limitation period prescribed in s 37 of the LAC Act. In this case, however, there is no issue about either matter. Mr and Mrs Plunkett gave notice more than 60 days before entering into the contract of sale, and commenced this proceeding well within time.

Principles of statutory construction - common ground

21 The parties were agreed as to the principles to be applied in construing the PE Act.[15] The process of statutory construction begins and ends with the text of the relevant statute. The primary object is to construe the relevant provisions so that their legal meaning is consistent with the language used and the legislative purpose of the statute. Legislative purpose is determined by considering the text of the relevant provisions in the context of the entire statute, as well as the existing state of the law, the mischief that the statute was intended to remedy, the history of the legislative scheme and the extrinsic materials.[16]

22 Part 5 of the PE Act provides for compensation to people whose property rights have been adversely affected by certain planning decisions. In a similar context, in Marshall v Director General, Department of Transport,[17] Gaudron J observed:

The right to compensation for injurious affection following upon the resumption of land is an important right ... and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.

23 The parties were also in agreement about several other aspects of the approach to be taken in construing ss 99 and 106 of the PE Act:

(a) They agreed that the words 'the sale of the land' must have the same meaning in each of s 99(1)(b) and s 106(1), and that the word 'sold' in s 106(1)(a) and the expression 'selling the land' in s 106(1)(b) must have a corresponding meaning.

(b) They accepted that a construction that promotes the statutory purpose is to be preferred over one that does not.[18]

(c) Both parties relied on the principle that a construction that avoids an absurd, unreasonable or anomalous result is to be preferred over one that would have that result.[19]

24 Starting with the text, it may be accepted that the phrase 'the sale of the land' used in s 99(b) and s 106(1) is ambiguous. The words are capable of meaning 'either an agreement to sell or a completed sale'.[20] A sale of land is a transaction that generally takes place over some time, with months or even years elapsing between the start of the transaction and its completion.[21] Whether 'the sale of the land' in ss 99 and 106 of the PE Act refers to the point at which the contract of sale is made, or to the completed sale, or to something else, depends upon the construction of the statute as a whole, and in particular Pt 5.

25 VicRoads relied on the High Court's decision in Chan v Dainford Ltd,[22] which concerned whether a contract was a 'contract for the sale of land' and hence an 'instalment contract' for the purposes of s 71(2)(b) of the Property Law Act 1974-1978 (Qld). The contract was for the sale of lots to be created by a sub-division that had not taken place at the time the contract was entered into. The Court held that the contract was a contract for the sale of land:[23]

Although the lots were not in existence when the contracts were made, they were to be in existence at the time stipulated for their sale. The primary meaning of sale is an exchange of property, the subject of the sale, for money. A sale occurs at the time when the title to the subject of the sale is conveyed or transferred. A 'contract for the sale of land' within the meaning of those words in the definition of 'instalment contract', is a contract pursuant to which a sale is to occur in the future - a contract whereby the purchaser will become 'entitled to receive a conveyance' of the land sold at a time subsequent to the making of the 'payment or payments (other than a deposit)' mentioned in the definition. A contract for the sale of land is an agreement to sell land, but it is not a sale.

26 Mr and Mrs Plunkett submitted that the High Court's decision in Chan v Dainford turned on the facts of that case and the legislation in question. They referred me to Octra Nominees Pty Ltd v Chipper,[24] concerning the construction of a 'first right of refusal' clause in a lease. A Full Court of the Federal Court distinguished Chan v Dainford and held that a sale of land, for the purposes of the clause in question, occurred upon entry into a contract of sale.[25] VicRoads responded by referring me to R&R Fazzolari Pty Ltd v Parramatta City Council,[26] in which French CJ applied the reasoning in Chan v Dainford in a different statutory context. I also had regard to the numerous authorities surveyed by Miller J, the trial judge in Bond Corporation Ltd v Western Australian Planning Commission.[27] The only principle that can really be drawn from these authorities is that the meaning of 'the sale of the land' - and related expressions such as 'selling of land' and 'at the time of sale' - depends heavily upon the context in which it appears.[28]

27 Of more assistance is a series of Western Australian authorities, dealing with provisions in the Metropolitan Region Town Planning Scheme Act 1959 (WA) (Scheme Act) that were similar to Pt 5 of the PE Act.[29] A similar issue of timing was the subject of litigation between Bond Corporation and the Western Australian Planning Commission. The issue was whether Bond Corporation had given the required notice 'before selling the land',[30] when it had given notice after entering into a contract for the sale of land but before the conveyance of the land. The question posed for determination by the Supreme Court of Western Australia was:

Whether the reference to 'selling the land' in Section 36(4)(a)(ii) of the Metropolitan Region Town Planning Scheme Act 1959 ... is to be a conditional contract for the sale of land or a conveyance of land by transfer.

28 At trial, Miller J held that 'selling the land' meant entering into a contract for the sale of land. His Honour held that the requirement that the owner give notice of the intention to sell the land meant giving notice of 'entry into a contract for the sale of the land, whether conditional or otherwise'; that is, 'notice is required to be given before the terms of a contract of sale are concluded'.[31] As in this case, authorities that considered the meaning of expressions like 'sale of land' in other contexts did not help in interpreting the Scheme Act.[32] His Honour reviewed the extrinsic materials and found them to be of 'limited assistance'.[33] Most significant was 'the clearly intended opportunity for the authority to elect to complete acquisition of property rather than meet a compensation claim' after receiving notice of intention to sell.[34] This seems to have been the main reason for concluding that the meaning of 'selling the land' that his Honour preferred 'fit best with the structure' of the Scheme Act.

29 On appeal, the Full Court reached the opposite conclusion, holding that 'sold' in s 36(3) meant 'conveyed'. Ipp J, with whom Wallwork and Owen JJ agreed, approached the construction task by first considering the purpose of the notice requirement in s 36(4)(a)(ii). He noted that the provision did not fix a notice period, and considered that a requirement to give reasonable notice could not be implied.[35] It followed that the purpose of the notice requirement could not have been to enable the authority to acquire the land. It was more likely that the purpose of requiring notice was to ensure that the authority was aware of the sale and to enable it to investigate the transaction immediately.[36]

30 Ipp J then considered the philosophy underlying s 36 of the Scheme Act. He noted that, although owners of land suffer loss merely by the reservation of land for public purposes, Parliament had provided that 'compensation was not to be payable upon that kind of loss being sustained'.[37] Rather, compensation became payable when more 'concrete or tangible loss' was sustained - either loss on sale of the land, or a development refusal that prevents the owners from utilising their land as they wish. His Honour concluded:[38]

In my opinion, the philosophy underlying the deferment of payment of compensation as provided for by the Scheme Act is that compensation for injurious affection should only be payable when the owner of the land involved suffers a significantly more tangible loss than that which occurred when the land was reserved. In my view, the construction advanced by the appellant is more consistent with this approach. That is to say, I prefer the argument that Parliament intended the Scheme Act to provide that payment for compensation should be only be made when the owner of land actually receives less money for the land than he or she would have received had there been no reservation, or when the genuine intention of the owner to develop the land is frustrated by a development refusal brought about by the reservation. On this basis 'sold' in s 36(3) should be construed as meaning 'conveyed'.

31 That view was confirmed by an examination of the language used in s 36, its form and structure.[39] Ipp J concluded:[40]

In my view, the construction advanced by the appellant is to be preferred. I have come to the conclusion that this construction interferes least with the common law rights of owners, it accords with the accepted canons of construction, it is consistent with the general philosophy underlying the date on which compensation becomes payable for injurious affection, it is more consistent with the ordinary meaning of the language used in the section, and gives appropriate weight to the context in which s 36(4)(a)(ii) appears in the Scheme Act.

32 I have set out the reasoning of the trial judge and the Full Court at some length because it was submitted, on behalf of the Plunketts, that Miller J's analysis was superior and that I should prefer it to that of the Full Court. I cannot agree. As will become apparent, I find the reasoning of the Full Court - in particular, Ipp J's articulation of the underlying philosophy of the compensation scheme - to be of considerably more assistance in construing the words 'the sale of the land' as they appear in Pt 5 of the PE Act.

33 The parties identified various aspects of the compensation scheme under Pt 5 of the PE Act that they submitted provided support for their preferred construction of ss 99 and 106 of the PE Act. I deal with each of these in turn below, before examining the broader context of the law regarding the sale of land in Victoria.

Context - only an 'owner' can claim compensation

34 Mr and Mrs Plunkett drew attention to the fact that only an 'owner' has a claim for compensation under s 98 of the PE Act. They submitted that this indicates that the right to compensation arises on entry into a contract for the sale of the land - before ownership of the land passes to the purchaser - rather than on completion of the sale. They pointed out that, on VicRoads' construction, they could only make a claim for compensation after they were no longer the owners. As noted, 'owner' is defined to mean, in relation to Torrens land, a person who is registered or entitled to be registered as proprietor.[41]

35 I do not accept that a person must be an 'owner' of land affected by a reservation at the time a claim for payment of compensation is made. The 'owner of land' for the purposes of s 106 is the owner at the time the land was reserved for a public purpose, in one of the ways set out in s 98(1). As Emerton J concluded in Capela, 'an entitlement to compensation belongs to the person who owns the land at that critical point in time, that is, at the time the reservation was imposed or proposed'.[42] That person is not entitled to payment of compensation until the occurrence of one of the events in s 99 - one of which is the sale of the land. The loss to be compensated remains, however, loss consequent upon the reservation.

36 It is the case that the words 'owner of land' also appear in s 107 of the PE Act. In that context, they do not mean the owner of land at the time of the reservation. Section 107, like s 98, creates a right to compensation. Unlike s 98, s 107 provides for compensation for any financial loss suffered in consequence of the removal, lapsing or cancellation of a reservation. The 'owner of land' for the purposes of s 107 is the owner at the time the reservation is removed, lapses or is cancelled.

37 This understanding is supported by the fact that s 37(2) of the LAC Act, applied by s 105 of the PE Act, provides that a claim for compensation must be made within two years after the relevant date. A two year limitation period would be meaningless if only the current owner of land could make a claim for compensation. Even if, as the Plunketts contend, the right to make a claim arises on entry into a contract for the sale of land, many (perhaps most) sales will be completed within two years, before the expiry of the limitation period. The provision for a two year limitation period suggests that Parliament did not intend that the entitlement to claim compensation should cease when ownership of the land ceases. Rather, it contemplated that a claim could be made for up to two years from the date on which the claim first arose.

Context - requirement to give notice in s 106(1)(b)

38 Next, the Plunketts relied on the requirement, in s 106(1)(b) of the PE Act, to give the relevant authority 'not less than 60 days notice in writing of the owner's intention to sell the land'. They submitted that the main purpose of requiring notice is to enable the authority to consider what action it wants to take in response to the notice. That action could include removing the reservation if it is not required, offering to purchase the land, or compulsorily acquiring the land. Notice of intention to sell could only achieve these purposes if it must be given before the owner enters into a binding contract to sell the land.

39 The difficulty with this submission is that there is no indication elsewhere in the PE Act, or in any of the extrinsic materials for the PE Act,[43] that Parliament had this purpose in mind. The actions that the Plunketts asserted could be taken by an authority, on receiving notice under s 106(1)(b), are all actions that it could take in any event, whether or not the owner intends to sell the land. They did not suggest that there was any existing practice, at the time the PE Act replaced the Town and Country Planning Act 1961 (Vic), that a notice of intention to sell[44] prompted the taking of any particular action by a relevant authority.

40 A similar argument was put in the Bond Corporation litigation, that notice of intention to sell was required in order to provide the authority with an opportunity to acquire the property rather than meet a compensation claim. While this argument found favour with the trial judge,[45] it was rejected on appeal, because the purpose could not be achieved in the absence of a minimum or fixed notice period.[46] The Full Court considered that the purpose of the notice requirement was more likely to be to enable the responsible authority to investigate the transaction at around the time it took place.[47] A subsequent Law Reform Commission of Western Australia report accepted that the purpose of the notice requirement was to allow earlier investigation and described this purpose as 'insubstantial'.[48] It recommended repealing the notice requirement.[49]

41 I do not accept that the notice requirement has the purposes contended for by the Plunketts. It appears to be no more than a mechanism to bring an imminent compensation claim to the attention of the authority that will have to pay the compensation. Part 5 of the PE Act establishes a scheme under which many years may pass between an authority's reservation of land for a public purpose, and its liability to pay compensation for loss caused by the reservation. In that context, it is sensible to require a land owner to put the authority on notice that compensation will soon be payable. I do not read anything more than that into the notice requirement in s 106(1)(b).

Context - 'sale or transfer' in s 111(3)(b)

42 A further contextual argument put by Mr and Mrs Plunkett drew attention to the distinction made between 'sale' and 'transfer' in s 111(3)(b) of the PE Act. Section 111 deals with recovery of compensation already paid, where the reservation is removed. Section 111(2) specifies when the owner must pay the compensation that is recoverable. Under s 111(3), the Minister may allow the amount owing to be paid at a later date, including 'on the sale or transfer of the land'. This is an indication, they submitted, that the drafter understood that a 'sale' is different from a 'transfer' of land. Hence, they argued, the 'sale' of land occurs on entry into a contract of sale and the 'transfer' takes place separately, at a later time.

43 While I accept that there is a distinction drawn in s 111(3)(b) between a sale of land and a transfer of land, I do not see that the distinction supports the Plunketts' construction of ss 99 and 106. Section 45 of the Transfer of Land Act 1958 (Vic) enables a registered proprietor to transfer an estate or interest in land by instrument. An interest in land may be transferred other than by sale - for example by way of a gift or by settlement on a trustee - and this may explain the use of 'sale or transfer' in s 113(3)(b). A transfer typically occurs on completion of a contract for the sale of land, but the transfer is not identical to the sale transaction. The distinction between sale and transfer does not assist in determining whether 'the sale of land' occurs at the start or the end of the sale transaction.

Context - references to 'contract for the sale of land' elsewhere in PE Act

44 VicRoads relied on the use of the expression 'contract for the sale of land' in Pt 9B of the PE Act, concerning growth areas infrastructure contributions.[50] Part 9B was added to the PE Act in 2010, and at that time the drafter distinguished between a sale of land and a contract for the sale of land. VicRoads submitted that, if 'the sale of the land' in Pt 5 means a contract for the sale of the land, one would expect the same words to be used in Pt 9B.

45 This provides a slight - or, as VicRoads put it, peripheral - indication that, in the PE Act, a contract for the sale of land is a separate and distinct concept from the sale of the land. However, I am conscious that language used in a 2010 amending statute sheds only dim light on the meaning of provisions that were included in the PE Act as originally enacted in 1987.

46 Although the Plunketts referred to the colloquial understanding of 'sale' and 'sell', that understanding is not a sure guide to the meaning of those words in the context of Pt 5 of the PE Act. Of much greater assistance is the existing state of the law regarding the sale of land when the PE Act was first enacted. The sale of land is a transaction about which there is a considerable body of law, several aspects of which are notable for present purposes.

47 The first matter of note is that the sale of land as a transaction is regulated in Victoria by the Sale of Land Act 1962 (Vic). The Sale of Land Act contains various prohibitions and minimum requirements regarding aspects of the transaction, such as the provision of information by vendors,[51] sale by public auction,[52] and terms contracts.[53] Significantly for present purposes, the Sale of Land Act specifies a number of circumstances in which a contract for the sale of land may be brought to an end before the contract is completed.[54] While these provisions have developed since 1987, the Sale of Land Act has always contained provisions that allow for the cancellation of a contract for the sale of land in specified circumstances.[55]

48 A second feature of the transaction is that it can take almost infinitely various forms. Many contracts for the sale of land are straightforward, involving payment of a deposit upon entry into the contract, and payment of the balance of the purchase price on the agreed settlement date two, three or perhaps six months later. The contract of sale in this case was an example of this kind of contract. However, some contracts are more complicated, with a number of instalment payments to be made, and an agreed settlement period of years rather than months. Completion may also be conditional on the happening of an event such as approval of a sub-division or grant of a planning permit. VicRoads included a number of examples of these more complex contracts for the sale of land in the agreed court book. Common to all of these forms, however, is that completion of the sale transaction depends upon the fulfilment of the conditions specified in the contract. Even the simplest contract for the sale of land is conditional upon payment of the purchase price.

49 The third thing to be noted is that, in Victoria, there are still two separate systems of land title. Most land in Victoria is Torrens system land, under the Transfer of Land Act, but there remains some general law land that is not subject to the Transfer of Land Act. Both parties accepted that the interpretation of 'sale of the land' in ss 99 and 106 of the PE Act must accommodate both systems.

50 In the case of general law land, legal title is usually conveyed to the purchaser upon the completion of the contract of sale. In relation to Torrens system land, the additional step of registering the transfer is required before the purchaser becomes the registered proprietor of the land.[56] This difference is significant in relation to the fourth matter of note, the changing positions of vendor and purchaser as the contract of sale is performed.

51 The Plunketts referred me to the classic description of the positions of the parties to a contract for the sale of land in Voumard - The Sale of Land:[57]

Upon the signing of a valid and specifically enforceable contract for the sale of land, the vendor becomes in equity (and so long as the contract is specifically enforceable he continues to be) a trustee of the land for the purchaser, and the beneficial ownership passes to the latter subject to the payment of the purchase money. The vendor is, however, until the whole of the purchase money is paid, a trustee in a qualified sense only, for until that time he still has a substantial interest in the property - a lien on the property as security for the payment of the purchase money, the right to retain possession (unless the contract otherwise provides) until payment in full of the purchase money, and an active right to protect his interest if anything should be done to endanger it.

52 The nature and extent of a purchaser's beneficial interest in land has been much debated, and it is not really accurate to describe a vendor as trustee for the purchaser from the time the contract is signed.[58] The relationship between vendor and purchaser is essentially contractual, with the purchaser's 'interest' in the land commensurate with the availability of specific performance of the contract.[59] It is not until the contract becomes unconditional - usually upon payment of the full purchase price - that the purchaser can be regarded as the 'owner' of the land and the vendor as no more than a trustee for the purchaser. In the case of Torrens system land, it is then that the purchaser becomes entitled to be registered as proprietor of the land. This is reflected in the definition of 'owner' in the PE Act.

53 Mr and Mrs Plunkett submitted that land is 'sold' when the interests of the parties are altered by entering into a binding contract of sale. That is, in my view, an oversimplification of the position. A sale of land begins at the point when a contract is entered into between vendor and purchaser, but the transaction is not completed until all of the conditions in the contract are fulfilled and the vendor conveys or transfers ownership of the land to the purchaser.

54 None of the contextual matters discussed above provides a strong indication one way or the other as to what is meant by 'the sale of the land' in ss 99 and 106 of the PE Act - whether it is the beginning or the end of the sale transaction. It is therefore necessary to determine which meaning best gives effect to the legislature's purpose, and hence to consider the purpose of Pt 5 of the PE Act.

55 The objectives of planning in Victoria are set out in s 4(1) of the PE Act, as follows:

(a) to provide for the fair, orderly, economic and sustainable use, and development of land;

(b) to provide for the protection of natural and man-made resources and the maintenance of ecological processes and genetic diversity;

(c) to secure a pleasant, efficient and safe working, living and recreational environment for all Victorians and visitors to Victoria;

(d) to conserve and enhance those buildings, areas or other places which are of scientific, aesthetic, architectural or historical interest, or otherwise of special cultural value;

(e) to protect public utilities and other assets and enable the orderly provision and co-ordination of public utilities and other facilities for the benefit of the community;

(f) to facilitate development in accordance with the objectives set out in paragraphs (a), (b), (c), (d) and (e);

(fa) to facilitate the provision of affordable housing in Victoria;

(g) to balance the present and future interests of all Victorians.

The objectives in s 4(1)(a), (c), (e), (f) and (g) are of particular relevance here.

56 The objectives of the planning framework established by the PE Act are set out in s 4(2), and include providing for compensation when land is set aside for public purposes.[60] Part 5 of the PE Act gives effect to that purpose. In Minister for Energy, Environment and Climate Change v Morton,[61] Garde J said:[62]

It is reasonable to conclude that Parliament intended that the compensation provisions in Pt 5 would provide a fair, just and reasonable compensation regime where landowners and occupiers whose interests were affected by the imposition of public acquisition reservations or overlay controls would be compensated. Parliament intended that the compensation regime established by the PE Act would be responsive to the adverse effects of public acquisition reservations and overlays on landowners and occupiers, suffered by compulsion of law. It cannot be taken to intend that the compensation provisions be construed in an arbitrary, illogical or unduly limited manner so as to deprive claimants of compensation that they might otherwise have been awarded, having regard to the financial and non-financial impacts sustained by reason of a public acquisition reservation or overlay.

57 At the same time, it is apparent that the compensation provisions of Pt 5 strike a balance between the private interests of owners and occupiers of affected land, and the public interest in 'fair, orderly, economic and sustainable' land use and development.[63] As Emerton J pointed out in Barilla, the regime for compensating planning blight in the PE Act differs in important respects from the regime for compensation for compulsory acquisition of land under the LAC Act.[64] The most significant difference is that compensation is not payable immediately following the reservation of land for a public purpose. The entitlement of an owner or occupier to be paid compensation does not arise until the happening of one of the trigger events specified in s 99 - either a loss on the sale of the land or the refusal of a permit.

58 What is the purpose to be served by separating the reservation of land for a public purpose and the entitlement to payment of compensation for loss suffered in consequence of the reservation? There is no indication to be found in either the explanatory memorandum for the PE Act or the Minister's second reading speech.

59 With some modifications, the PE Act re-enacted the compensation scheme that had been in place under the former Town and Country Planning Act 1961 (Vic). That scheme was examined in the Morris report, which recommended no substantial change to the existing law. Mr Morris explained his recommendation as follows:[65]

The existing system is based on the philosophical distinction between designating land for public vis-à-vis private use. This distinction ... is one that has found wide acceptance. One of the reasons for this is that the right to compensation is clear-cut - there are no blurred edges. The existing system recognises that, as landowners reap the benefit of favourable planning decisions, they must take the consequences - at least up to a point - if planning decisions are adverse. That point is when loss is suffered as a result of the land being reserved or required for public purposes.

The existing system has also enabled wide-ranging planning and conservation measures to be taken. In a world full of uncertainties some caution should be shown in the use of resources. The extension of compensation rights for planning restrictions would inevitably mean fewer restrictions and fewer conservation controls. Whether this is a good or bad thing depends very much on the viewpoint of the person making the judgment. From the community point of view, however, there can be little doubt that sensitive planning controls are in our long term interest and should be retained.

60 The need to strike a balance between public and private interests was also reflected in the rationale for a recommendation made in the Morris report to (in effect) provide for compensation for land affected by planning blight:[66]

• It provides landowners with the opportunity to claim compensation when an actual loss is suffered: that is at the time of sale.
• It does not commit Authorities to purchase land long before the land is required or in circumstances where the land may not ultimately be required for any public purpose.
• It maintains land in private ownership, thus ensuring that it is used to its full productive capacity by a person who has a stake in the land.
• It is less expensive to Authorities than a selective policy of acquisitions, but can relieve more landowners by spreading compensation payments.
• It does not contribute to the psychology of blight in the same way as does a policy of selective acquisitions.
• It integrates the planning of major projects with the planning process generally. This strengthens the planning process and improves co-ordination between authorities.

61 The compensation provisions in Pt 5 of the PE Act reflect the recommendations made in the Morris report[67] and, it is reasonable to assume, the policy rationale for those recommendations articulated in the report. Their purpose is to provide for fair compensation for affected landowners, while also facilitating orderly land use planning for public purposes and conserving public funds by deferring the payment of compensation until actual loss is suffered. This balancing of private and public interests is in keeping with the purposes set out in s 4 of the PE Act. It is also consistent with the philosophy that Ipp J discerned to underlie the equivalent compensation provisions in Western Australia - namely, 'that compensation for injurious affection should only be payable when the owner of the land involved suffers a significantly more tangible loss than that which occurred when the land was reserved'.[68]

62 In my view the purpose to be served by Pt 5 of the PE Act is better achieved if 'sale of the land' in ss 99 and 106 is understood to mean completion of the contract for sale of the land, when the full purchase price is paid and the contract becomes unconditional. Until that time, the loss suffered in consequence of the reservation of the land for a public purpose remains prospective, contingent on completion of the sale. Until that time, it remains possible that the contract will fall through, that there will be no change in ownership, and that the vendor will be able to continue to use the land or to sell it to another purchaser.

63 To put it another way, it would not further the purpose of Pt 5 to interpret ss 99 and 106 so that compensation is payable to an owner who has not suffered 'concrete or tangible' loss. That would be the effect of understanding 'sale of land' to mean entry into a contract for the sale of land.

64 It remains to consider whether the meaning of 'sale of land' that I prefer would have such absurd, unreasonable or anomalous consequences that it cannot have been intended by Parliament. Mr and Mrs Plunkett drew attention to several matters in that regard.

65 First, they submitted that if a 'sale of land' did not occur until the completion of a contract for the sale of land then the notice required by s 106(1)(b) would often not be received by an authority until after a binding contract of sale had been entered. In those circumstances, the authority would not be able to respond to the notice by offering to buy the land itself. As already discussed, I do not accept that the purpose of the notice requirement is to prompt the authority to consider buying the land, or compulsorily acquiring it, or removing the reservation. It is no more than a mechanism to warn the authority of an imminent liability to pay compensation.[69]

66 It follows that I do not agree that there is any difficulty that arises if notice under s 106(1)(b) need only be given 60 days prior to settlement. To the contrary, this has the advantage that the settlement date is generally fixed by agreement and known well in advance. The date on which a contract of sale is entered into cannot usually be predicted with such certainty. The later notice date also works in favour of landowners who might be less diligent than the Plunketts, as was the case in the Bond Corporation litigation.

67 Next, Mr and Mrs Plunkett submitted that assessing the loss on sale at the date of settlement might give a different result to assessing the loss when the sale price is agreed in the contract. There may or may not be such a difference in an individual case, and any difference might be positive or negative, depending on the direction in which the market has moved. I cannot see that this possibility gives rise to any absurdity or inconvenience. Indeed, in this case, VicRoads has indicated that the value of the land may have increased between contract and settlement, to the advantage of the Plunketts.

68 Third, it was submitted that an owner of land affected by a reservation could sell the land on an extended settlement - say five years - and would not be able to claim compensation until the end of the settlement period. During this time the authority would be unaware of the impending claim for compensation and there might be a significant change in the value of the land. If the reservation were removed before settlement, the purchaser would enjoy a windfall gain. The Plunketts submitted that there is greater certainty if the right to compensation arises when the contract of sale is first entered into. I do not accept that uncertainty in these circumstances is an inconvenient or absurd result. Rather, the uncertainty that they identify is inherent in both the nature of the compensation scheme in Pt 5 and in an agreement to sell land over a lengthy period.

69 Part 5 of the PE Act contemplates considerable uncertainty. An authority that has reserved land for a public purpose is exposed to latent claims for compensation by affected owners and occupiers from the time of the reservation. During this time the value of the land may well change. Whether and when the authority becomes liable to pay compensation depends on matters beyond its control - for example, an owner's decision to sell or an application for a permit to use or develop the land - and the authority is unlikely to be aware of these matters until they occur.

70 At the same time, a contract for the sale of land with a long settlement period is necessarily uncertain, all the more so if it is contingent on complex conditions being met. The contract may not be completed and the land may not, in the end, be sold. An owner who agrees to sell land on such terms must accept the uncertainty that comes with that bargain.

71 None of these matters persuades me that any absurd, unreasonable or anomalous results would flow from reading 'sale of the land' in ss 99 and 106 to mean completion of the contract for the sale of land. To the contrary, I consider that meaning best achieves the purpose of Pt 5.

The sale of the land - settlement or transfer?

72 A final matter for resolution is whether the completion of a contract for the sale of land for the purposes of s 99 and 106 takes place at settlement or upon registration of the transfer. VicRoads submitted that it was the latter.

73 I understood this submission to be based on the conclusion of Ipp J in Bond Corporation (FC), that 'sold' should be construed as meaning 'conveyed'.[70] This conclusion was responsive to the question of law posed for the court in that case, which was whether reference to 'selling the land' in the relevant provision was reference to a conditional contract for the sale of land or a conveyance of land by transfer. It is not clear from the reports whether the land in question was general law land or Torrens land.

74 As mentioned, the conveyance or transfer of title in general law land usually takes place on settlement of the contract of sale. In that instance there is no distinction to be made between settlement and conveyance. This may explain the terms in which the question was asked and answered in the Bond Corporation cases.

75 In the case of Torrens land, however, there may be a delay between settlement and the registration of the instrument of transfer. Once the vendor has given the signed transfer to the purchaser at settlement, there is nothing more for the vendor to do in order to complete the sale. Registration of the transfer is a matter for the purchaser. From the time of settlement of a contract for the sale of Torrens land the vendor owns the land as a bare trustee for the purchaser, who is entitled to be registered as the proprietor of the land, although title does not pass to the purchaser until the transfer is registered.

76 The question is resolved by the definition of 'owner' in s 3 of the PE Act, which makes it clear that an 'owner' of Torrens land includes a person who is entitled to be registered as proprietor of an estate in fee simple in the land. This indicates that, for the purposes of the PE Act, the transfer of property in exchange for consideration involved in a sale of land is complete at settlement, when the purchaser becomes entitled to be registered as the proprietor of the land.

77 I will make an order to the effect that the answer to the separate question is that, on the proper construction of ss 99 and 106 of the PE Act, the 'sale of the land' took place on 17 October 2017, upon completion of the contract of sale.

78 The answer to the separate question highlights a procedural issue to be addressed. Mr and Mrs Plunkett have commenced two proceedings in this Court in relation to their claim for compensation for loss on the sale of their land. This proceeding concerns a claim submitted to VicRoads on 17 July 2017, before their claim had arisen. The second proceeding, in S CI 2018 00826, was commenced on 7 March 2018. It concerns a claim submitted on 21 November 2017, by which time the Plunketts did have a right to claim compensation under Pt 5. The issue therefore is which proceeding is to be the vehicle for the assessment of the claim, which may in turn be significant for the calculation of interest on the amount awarded.[71]

79 During the hearing of the separate question VicRoads submitted that, whatever the answer to the separate question, this proceeding could continue and the Court would have jurisdiction to determine the claim for compensation. That position is in keeping with VicRoads' responsibility, as a model litigant, not to rely on technical arguments. However, senior counsel for Mr and Mrs Plunkett was less confident that the Court would have jurisdiction if there was not strict compliance with the procedural requirements in Pt 10 of the LAC Act before the claim was referred to this Court.[72] Subject to anything the parties may have to say, I propose to hear and determine both proceedings together, and to deal with this issue only if it becomes necessary.

80 I will hear the parties on the question of the costs of the hearing and determination of the separate question, and directions to be made for the future conduct of the proceeding.

[1] Amendment VC68 to the Victoria Planning Provisions, published in the Victorian Government Gazette on 6 August 2010.

[2] [2018] VSC 360 (Capela), [19] (citations omitted).

[3] Halwood Corporation Ltd v Roads Corporation (1995) 89 LGERA 280 (Halwood), 286; Halwood Corporation Ltd v Roads Corporation [1998] 2 VR 439, 447-448 (Tadgell JA, Brooking and Ormiston JJA agreeing).

[8] Barilla v Roads Corporation (2017) 54 VR 198 (Barilla), [72].

[11] Capela, [66]. In the case of a claim under s 98(2), eligibility is determined at the time of the permit refusal.

[15] The Plunketts relied on Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, [78] (McHugh, Gummow, Kirby and Heydon JJ); Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27, [46]-[47]; and Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503, [39]. VicRoads relied on a number of additional authorities including Certain Lloyds Underwriters Subscribing to Contract No IHOOAAQS v Cross [2012] HCA 56; (2012) 248 CLR 378, [24] and Colonial Range Pty Ltd v CES-Queen (Vic) Pty Ltd [2016] VSCA 328 (Colonial Range), [47]-[55].

[17] [2001] HCA 37; (2001) 205 CLR 603, [38].

[18] Interpretation of Legislation Act 1984 (Vic), s 35(a); Colonial Range, [51].

[20] Bond Corporation v Western Australian Planning Commission [2000] WASCA 257; (2000) 110 LGERA 179, (Bond Corporation (FC)) [25] (Ipp J, Wallwork and Owen JJ agreeing).

[21] Bradbrook et al, Australian Real Property Law (Thomson Reuters, 5th ed), [8.100].

[22] [1985] HCA 15; (1985) 155 CLR 533 (Chan v Dainford).

[24] (2007) ANZ ConvR 455; [2007] FCAFC 92 (Octra Nominees).

[26] [2009] HCA 12; (2009) 237 CLR 603, [49] (French CJ).

[27] [1999] WASC 157; (1999) 108 LGERA 235 (Bond Corporation), [15], [18], [28].

[28] See e.g. Glass v Ralph (1965) 13 LGRA 90, 93 - '... each case, to some extent, turns upon the terms of the particular enactment taken in conjunction with the relevant circumstances. ... To a considerable extent the determination of the issues depends upon the proper application of construction of documents, in this case the statute and the contract of sale ...'; Chitts v Allaine (1981) 48 LGRA 92, 93 - 'I was referred to a considerable number of case where the word "sale" and its derivatives had been discussed, but the contexts were different and there so often seemed to be indications from other parts of those contexts which assisted in arriving at a meaning.'

[29] Metropolitan Region Town Planning Scheme Act 1959 (WA) (Scheme Act), s 36; replaced by Planning and Development Act 2005 (WA), Pt 11 - Compensation and acquisition.

[30] Required by s 36(4)(a)(ii) of the Scheme Act.

[33] Bond Corporation, [17]; see also [24].

[34] Bond Corporation, [29]; see also [24].

[35] Bond Corporation (FC), [26]-[30].

[36] Bond Corporation (FC), [50]-[51].

[39] Bond Corporation (FC), [43]-[48].

[41] PE Act, s 3(1) - definition of 'owner', paragraph (a).

[43] Being the explanatory memorandum for the Planning and Environment Bill 1987, the Minister's second reading speech, and the January 1983 report to the Minister for Planning by Stuart Morris, Barrister, Land Acquisition and Compensation: Proposals for New Land Acquisition & Compensation Legislation (Morris report).

[44] Given under s 42(5)(c) of the Town and Country Planning Act 1961 (Vic).

[46] Bond Corporation (FC), [27]-[30]. Section 36(4)(a)(ii) of the Scheme Act did not stipulate any minimum notice period and nor was there an implied requirement to give reasonable notice.

[48] Law Reform Commission of Western Australia Report, Compensation for Injurious Affection, July 2008, 45.

[49] Ibid, Recommendation 19. The recommendation has not been acted on - s 177(3)(a)(ii) of the Planning and Development Act 2005 (WA) still requires that 'the owner before selling the land gave written notice to the responsible authority of the owner's intention to sell the land.'

[50] PE Act, s 201R - definitions of 'contract for the sale of land' and 'settlement', s 201SLA(2), s 201TI(1).

[51] Sale of Land Act, Pt II, Div 2 and Div 2A.

[52] Sale of Land Act, Pt II, Div 4.

[53] Sale of Land Act, Pt I, Div 4.

[54] Sale of Land Act, ss 27(8)(b), 31, 32K (general); ss 29F, 29N, 29S(1)(a), 29W(3) (terms contracts); ss 9AC(2), 9AE (prescribed contracts).

[55] Sale of Land Act as enacted, ss 7(4)(a), 9(2), 14(1); Sale of Land Act as at February 1987, ss 7(4)(a), 9AC(2), 9AE, 9AH(2), 14(1).

[56] Transfer of Land Act, s 40.

[57] PN Wikramanayake SC, Voumard - The Sale of Land, 6th edition (Voumard), [4050] (citations omitted). The same passage from an earlier edition of Voumard was cited in Fisher v The Minister (1980) 38 LGRA 412, 414, relied upon by the Plunketts.

[58] Chang v Registrar of Titles [1976] HCA 1; (1976) 137 CLR 177, 189-190 (Jacobs J); Kern Corporation Ltd v Walter Reid Trading Pty Ltd [1987] HCA 20; (1987) 163 CLR 164, 191-192 (Deane J); Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315 (Tanwar Enterprises), [47]-[48], [53] (Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ).

[59] As discussed in Tanwar Enterprises, [53].

[61] (2017) 228 LGERA 71.

[63] PE Act, s 4(1)(a). See also the discussion in A Lanteri, 'Compensation under the Town and Country Planning Act 1961 (Vic) - Pt 1', (1980) Melbourne University Law Review 311, 311-4.

[65] Morris report, [821]-[822] in Chapter VIII - Town Planning Compensation.

[66] Morris report, [918] in Chapter IX - Land Affected by Blight.

[67] Victoria, Parliamentary Debates, Legislative Assembly, 18 September 1986, 670 (Mr Wilkes, Minister for Housing).

[69] See [38]-[41] above.

[71] In Minister for Energy Environment and Climate Change v Morton (2017) 228 LGERA 71, Garde J held that interest was payable under s 60(1) of the Supreme Court Act 1986 (Vic) on an award of compensation under Pt 5 of the PE Act. Interest awarded under s 60(1) of the Supreme Court Act is calculated from the commencement of the proceeding. I was informed by counsel that this decision is under appeal.

[72] It is a question of construction whether failure to comply with a statutory requirement results in invalidity: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, [91]-[93] (McHugh, Gummow, Kirby and Hayne JJ).