Town planning ­ Compensation for injurious affection where land reserved for a public purpose under a town planning scheme ­ Role of the State Administrative Tribunal under s 176 Planning and Development Act 2005 (WA) ­ Whether Tribunal's role to determine whether land "actually or compensably injuriously affected" ­ Whether land injuriously affected by the making of a town planning scheme ­ Land previously reserved under earlier scheme ­ Proper construction of s 174 Planning and Development Act 2005 (WA)

Commercial Arbitration Act 1985 (WA)

Interpretation Act 1984 (WA), s 19

Metropolitan Region Town Planning Scheme Act 1955 (WA), s 36

Planning and Development Act 2005 (WA), s 3, s 124(1)(a), s 173, s 174, s 175, s 176, s 177, s 179

Town Planning and Development Act 1928 (WA), s 11, s 12, Schedule 1 cl 10

Western Australian Planning Commission Act 1985 (WA)

1 The Tribunal was called upon to decide whether certain land, owned by Avon Capital Estates (Australia) Ltd, was injuriously affected by reason of it being reserved for a public purpose under the City of Canning Town Planning Scheme No 40.

2 The matter came to the Tribunal after Avon Capital obtained conditional approval for residential developments on each of 19 lots within the reserved area. Avon Capital contended that the conditions were unacceptable, and thus that its right to claim compensation for injurious affection by reason of the reservation was triggered under s 177 of the Planning and Development Act 2005 (WA).

3 The City of Canning rejected the application for compensation. It contended that the land was not injuriously affected for the purposes of the compensation provisions of the Planning and Development Act 2005 (WA). Its reasons for that contention were that:

• the conditions of approval were standard conditions that could not reasonably be said to be objectionable;
• the land was previously reserved under an earlier town planning scheme under which no claim for compensation had been made;
• the Serpentine trunk main itself predated the imposition of any public purpose reserve so that the reservation did not injuriously affect the land;
• there was no reason why the development approvals could not now be acted upon; and
• the application for approval was not made by Avon Capital in good faith.

4 Section 174(1) of the Planning and Development Act 2005 (WA) specifies that land is injuriously affected if it is reserved under a planning scheme for a public purpose. Section 176 of the Planning and Development Act 2005 (WA) gives the State Administrative Tribunal the authority to determine any question as to whether land is injuriously affected. Questions as to the manner or amount of payment of compensation are to be determined by arbitration, not by the Tribunal. The City of Canning argued that, on the proper construction of s 176, the Tribunal had the power to determine any question as to whether the land is "actually or compensably" injuriously affected. It argues that, for the reasons referred to above, the Tribunal should determine that the land was not injuriously affected for the purposes of s 174(a) and the other compensation provisions of the Planning and Development Act 2005 (WA).

5 The Tribunal examined the provisions of the Planning and Development Act 2005 (WA) and the provisions of the legislation which it replaced. It determined that its function under s 176 of the Planning and Development Act 2005 (WA) was not to examine questions as to whether any damage or detriment actually occurred on the land, but rather to examine planning issues arising for consideration under s 174. The issues raised by the City were found to relate to the question of the amount of compensation, if any, to be paid. As there was no dispute that the land in question was reserved for a public purpose under the applicable town planning scheme, the Tribunal concluded that it was injuriously affected for the purposes of the Planning and Development Act 2005 (WA). The question of the amount of compensation, if any, payable for the injurious affection was found to be a matter to be dealt with by arbitration.

6 Avon Capital Estates (Australia) Ltd (Avon Capital) is the owner of 19 lots in the Ranford Estate in Canning Vale. The lots are all reserved for public purposes under the City of Canning Town Planning Scheme No 40 (TPS 40). The reason for the reservation is that the Water Corporation's trunk main known as the "Serpentine trunk main" passes through the lots.

7 As a result of an earlier decision by the State Administrative Tribunal (Tribunal), it was determined that residential development was possible on another lot within the reservation area, notwithstanding the reservation. Accordingly, Avon Capital applied for approval of residential developments on each of the 19 lots. Approval was granted by the City of Canning (City) subject to certain conditions. Avon Capital considered, however, that the conditions were unacceptable and asserted that the conditional approval thus triggered a right to compensation for injurious affection under the Planning and Development Act 2005 (WA) (PD Act). It lodged a claim for compensation. The City rejected the claim.

8 The City then applied to the Tribunal, under s 176 of the PD Act, for a determination that the land was not injuriously affected by the reservation. Section 174 of the PD Act provides that land is injuriously affected:

"... by reason of the making or amendment of a planning scheme if, and only if -

that land is reserved (whether before or after the coming into operation of this section) under the planning scheme for a public purpose;

9 Relying on that section, Avon Capital contended that, because there was no dispute that the land is reserved for a public purpose under a planning scheme, the Tribunal should summarily determine that the land is injuriously affected. The PD Act contemplates that the amount of any payment of compensation for injurious affection should be dealt with by an arbitrator under the Commercial Arbitration Act 1985 (WA).

10 The applicant argued that, on its proper construction, and having regard to the provisions of earlier legislation which were replaced by the PD Act, the Tribunal's power under s 176 was a power to determine whether land was "actually" or "compensably" injuriously affected. It argued that s 174 of the PD Act simply identified categories of circumstances in which land may be considered to be injuriously affected, but did not declare that any land reserved for a public purpose is necessarily injuriously affected.

11 Section 174(1) of the PD Act provides as follows:

"Subject to subsection (2), land is injuriously affected by reason of the making or amendment of a planning scheme if, and only if -

that land is reserved (whether before or after the coming into operation of this section) under the planning scheme for a public purpose;

the scheme permits development on that land for no purpose other than a public purpose; orthe scheme prohibits wholly or partially -

(i) the continuance of any non conforming use of that land; or

(ii) the erection, alteration or extension on the land of any building in connection with or in furtherance of, any non conforming use of the land, which, but for that prohibition, would not have been an unlawful erection, alteration or extension under the laws of the State or the local laws of the local government within whose district the land is situated."

12 Section 176 of the PD Act is entitled "How questions determined" and provides:

A claimant or responsible authority may apply to the State Administrative Tribunal for determination of any question as to whether land is injuriously affected.

Any question as to the amount and manner of payment (whether by instalments or otherwise) of the sum which is to be paid as compensation under this Division is to be determined by arbitration under and in accordance with the Commercial Arbitration Act 1985, unless the parties agree on some other method of determination."

13 It is common ground that the land the subject of Avon Capital's claim for compensation is land reserved for a public purpose under TPS 40. The respondent argues that, on a plain reading of s 174, once it is established that land is reserved under a planning scheme for a public purpose, it is injuriously affected by reason of the making of that scheme. The force of that submission is obvious.

14 When the council of the City considered the claim for compensation, it rejected it on the basis that it did "not consider that Avon Capital Estate (Australia) Ltd has any legitimate legal basis to claim compensation for injurious affection". By letter from the City's solicitors to the respondent's solicitors, the City's position and reasoning for its decision was explained in the following way:

Condition (v) was a standard conditions [sic] imposed irrespective of any matter connected with the reserve.

1. In any event, the condition has been clarified to Avon in correspondence subsequent to the planning consents, in such a way that condition (v) can only be seen as unobjectionable on any objective view.
2. With regard to any other conditions of approval, Avon has refused to specify which are said to have given rise to injurious affection or how, and the City sees no basis for any argument that any other conditions gave rise to injurious affection.
3. The land in question was first reserved for "public purposes" under the previous Town Planning Scheme No.16. A Claim for Compensation could have been lodged within 6 months of gazettal of that Scheme. It is considered that, if the subject land was ever injuriously affected (which is in any event denied), it could only have been injuriously affected at the time of the gazettal of TPS 16. No claim for Compensation was made within 6 months of that gazettal, and therefore it is considered that any right to claim compensation has expired. There was no new injurious affection brought about by the gazettal of TPS 40, which merely continued the reservation.
4. Moreover, the Serpentine Trunk Main itself pre-dated the imposition of any public purposes reserve. The imposition of the reservation did not injuriously affect the land over and above any injurious affection (and the City says thare [sic] was none anyway) brought about by the mere physical installation of the Serpentine Trunk Main.
5. There is no reason known to the City why the City's development approvals cannot now be acted upon (subject of course to the formality of obtaining a building licence).
6. In light of 1,2,3 and 6 above, and in addition to all of the above, the City is not satisfied that the applications were lodged in good faith with the intention of proceeding with such developments if approved."

15 The grounds of application originally lodged, and the applicant's submissions to the Tribunal, indicate that the City wishes to argue before the Tribunal that there is no "actual" injurious affection because the conditions of development approval are merely standard conditions applicable to any development, and because of the reasons identified in paragraphs 4 and 5 of the solicitor's letter which are set out above. The City contends that the question which is open to determination by the Tribunal is whether the land is "actually or compensably" injuriously affected. In other words, the City contends that it is open to the Tribunal to consider whether the reservation of the land for public purposes has resulted in any damage or detriment to the land such that the value of the land as affected by the existence of the reservation is less than the value of the land not so affected.

16 The City contends that paragraphs (a), (b) and (c) of s 174(1) of the PD Act merely identify categories of circumstances in which land may be considered to be injuriously affected, rather than declaring that land "is injuriously affected" if any of those circumstances pertain. On that basis, it is argued that s 176(1) should be read as allowing a claimant or responsible authority to apply to the Tribunal for determination of any question as to whether land falling within the categories in s 174(1) of the PD Act is "actually or compensable injuriously affected" in a way that is properly compensable.

17 In support of that contention, the applicant argues that the PD Act is intended to be a consolidation of pre-existing legislation formally comprising the Town Planning and Development Act 1928 (WA) (TPD Act), Metropolitan Region Town Planning Scheme Act 1955 (WA) (MRTPS Act) and Western Australian Planning Commission Act 1985 (WA) (WAPC Act). Section 3 of the PD Act expressly specifies that consolidation of that former legislation is a purpose of the PD Act. The applicant places specific reliance on s 3(2) of the PD Act which provides:

the Metropolitan Region Town Planning Scheme Act 1959, the Town Planning and Development Act 1928 or the Western Australian Planning Commission Act 1985 expressed an idea in a particular form of words; and

this Act appears to have expressed the same idea in a different form of words in order to use a clearer or simpler style,

the ideas are not to be taken to be different just because different forms of words were used."

18 Against the background of s 3 of the PD Act, the City argues that the compensation provisions of the previous legislation never contemplated that injurious affection might arise merely by the reservation of land for a public purpose. The City points to the content of the explanatory memorandum for the Planning and Development Bill 2005 (WA) and the Minister's second reading speech, and notes that no mention is made of extending compensation for injurious affection to any land reserved for a public purpose.

19 To support its contentions, the City refers to s 11 and 12 of the TPD Act. Section 11(1) provided that any person whose land or property is injuriously affected by the making of a town planning scheme is entitled to compensation provided the claim was made within 6 months of publication of the scheme. That provision is now reflected in s 173 of the PD Act, although the time limit for making a claim has been removed. Section 12 of the TPD Act is substantially reproduced in s 174 and s 175 of the PD Act. Section 12(2a)(b) of the TPD Act provided:

"Subject to the provisions of paragraph (c), land shall not be deemed to be injuriously affected by reason of any provision of a town planning scheme which comes into force on or after the appointed day, and which deals with any of the matters specified in clause 10 of the First Schedule, unless the scheme

permits development on that land for no purpose other than a public purpose; or

prohibits wholly or partially the continuance of any non-conforming use of that land or the erection, alteration or extension on the land of any building in connection with or in furtherance of, any non-conforming use of the land, which, but for the prohibition, would not have been an unlawful erection, alteration or extension under the laws of the State or the local laws of the local government within whose district the land is situated."

20 Clause 10 of the first Schedule of the TPD Act specified that town planning schemes may deal with classification or zoning for various purposes. It thus covers reservations for public purposes. It can be seen that section 174(1) of the PD Act picks up paragraphs (i) and (ii) of s 12(2a)(b) of the TPD Act but uses a different formulation of words to introduce those paragraphs, and adds in s 174(1)(a), the provision upon which the respondent relies in these proceedings.

21 In my view, having regard to the command of s 3(2) of the PD Act, the words "land is injuriously affected ... if and only if" in s 174(1) of the PD Act are simply a reformulation and a better expression, of the words "land shall not be deemed to be injuriously affected ... unless the Scheme" used in s 12(2a)(b) of the TPD Act. The difference between the two provisions is therefore, in effect, the introduction of par (a) of s 174(1) of the PD Act.

22 The subject of compensation in relation to land reserved for public purposes under the Metropolitan Region Scheme (MRS) was dealt with by s 36 of the MRTPS Act. Section 3 of the MRTPS Act provided that that Act shall be construed in conjunction with the TPD Act as if the provisions of the MRTPS Act were incorporated and form part of the TPD Act. In the case of inconsistencies between the provisions of the two Acts, the provisions of the MRTPS Act were to prevail. Section 36 of the MRTPS Act specifically adopted the provisions of s 11 and s 12 of the TPD Act with certain changes required to make those provisions applicable to the Metropolitan Region Scheme. The section also added some specific provisions (being subsections (3)(3a), (4), (5) and (6) of s 36 MRTPS Act) to the provisions of s 11 and s 12 of the TPD Act for the purposes of the MRS. Section 36(3), (3a), (4), (5) and (6) of the MRTPS Act are now reproduced in the PD Act in sections 177 and s 179(1). Those sections all deal with compensation in respect to injurious affection arising, or alleged to be due or arising, out of a reservation for a public purpose.

23 The City argues that, under the previous legislative regime, injurious affection could only arise where the scheme permits development on the land for no purpose other than a public purpose, because the provisions of s 12(2a)(b) of the TPD Act apply to the compensation provisions of s 36 of the MRPTS Act. Conversely, it was argued, if the reservation for a public purpose did not preclude development other than for a public purpose, no injurious affection could arise. The City argues that by reason of s 3 of the PD Act and the extrinsic materials referred to, the proper construction of s 174(1) is simply to read the subparagraphs as categorising circumstances that may be considered injurious affection, and that s 176 of the PD Act authorises the Tribunal to determine questions as to whether land falling into those categories is actually injuriously affected.

24 The construction urged upon the Tribunal by the applicant requires the notional insertion of the words "actually or compensably" before "injuriously affected" in s 176 of the PD Act. It seems to me that it also requires that the word "is" where it first appears in s 174(1) of the PD Act must be read as "may be". The question for determination is whether s 3 of the PD Act, and the extrinsic materials referred to, cause the words of those sections to be construed in that way. In my view they do not.

25 It is clear that the words of s 174(1)(a) constitute a provision not previously found in the compensation provisions of the MRTPS Act or the TPD Act. If it was intended that compensation for reservation for a public purpose was limited to those cases identified in s 12(2a)(b) of the TPD Act that same limitation could have been achieved in s 174(1) by omitting par (a) from that subsection. They are, however, new words with a plain meaning.

26 In relation to the extrinsic materials, the applicant contends that, to the extent that provisions of the Act introduced substantive changes from the existing legislation, it would be expected that the explanatory memorandum and the Minister would mention those changes. Materials to which I was directed do not discuss the meaning and effect of s 124(1)(a). Extrinsic materials can be relied upon to confirm the meaning of the words of the statute, to resolve ambiguity or to prevent absurd construction - see s 19 of the Interpretation Act 1984 (WA). In my view, the words of s 174(1)(a) are unambiguous. The extrinsic materials do not address those words specifically. The assumption that might be made as to the absence of discussion as to the meaning and effect of s 174(1)(a) is not a basis for confirming a meaning of the words used that is different from their plain and ordinary meaning. The objects of the PD Act as identified in s 3 do not demand a different conclusion. Apart from the purpose of consolidation, the purposes of the Act include the provision of an efficient and effective land use planning system in the State and the promotion of the sustainable use and development of land in the State. A number of modifications to the previous legislation were made, and there was no basis for concluding that, to the extent that s 174(1)(a) introduced a potential claim for injurious affection which did not previously exist, that would be inconsistent with the object and purposes of the Act.

27 Given that a determination as to whether land is reserved under a planning scheme for a public purpose is a matter easily resolved by reference to public documents, the question arises as to why s 176(1) provides for a determination, by this Tribunal, of a question as to whether land is injuriously affected. The answer lies in the other provisions of s 174. The question of whether or not a scheme permits development on land for no purpose other than a public purpose, or prohibits wholly or partially the continuance of the non-confirming use of land, are potentially matters involving the proper construction of town planning schemes. They are matters which fall squarely within the expertise of the Tribunal. In the explanatory memorandum for the Planning and Development Bill 2005 (WA), mention was made (in relation to s 174 which also confers jurisdiction on the Tribunal) that the provision "will ensure that planning matters are dealt with in a forum which is qualified and experienced in planning matters." Section 176(1) therefore serves a purpose of conferring on the Tribunal the task of determining what are essentially planning issues that may be contentious and which arise under section 174(1)(b) and (c) in particular.

28 It is clear that the question of the amount of compensation to be paid for injurious affection is left to an arbitrator under the Commercial Arbitration Act 1985 (WA). The arbitrator is charged by s 177 of the PD Act with determining whether certain preconditions to an entitlement to compensation are met. These preconditions include a requirement for the arbitrator to be satisfied, where the land has been sold, that it was sold in good faith, and that the vendor took reasonable steps to obtain a fair and reasonable price. Where there has been the imposition of unacceptable conditions, the arbitrator must be satisfied that the application for approval was made in good faith. By s 179(1) the arbitrator is required to assess the value of the land unaffected by the reservation and compare it to the land affected. It might be that the land value after reservation is the same as the value before reservation. In that case the amount of compensation would be zero.

29 Those provisions make it clear that matters of valuation, and the assessment of the amount of the "actual or compensable injurious affection", are matters to be determined by an arbitrator.

30 All of the arguments which the applicant seeks to agitate before the Tribunal are arguments which are open to it before an arbitrator. They are matters going to whether there has been any diminution in the value of the land by reason of the reservation. Because the PD Act directs that an arbitrator is to determine the amount of compensation, it would appear inconsistent with the objects of the PD Act for the Tribunal to embark upon valuation questions for the purpose of determining whether the land is "actually or compensably" injuriously affected.

31 There is one aspect of the City's argument that involves a different question as to the proper construction of s 174(1)(a) of the PD Act. That is the (at least implicit) contention that, because the land was previously reserved for a public purpose under the previous City of Canning Town Planning Scheme No 16, it was not injuriously affected by "the making ... of" TPS 40. In other words, it might be argued that, on its proper constitution, s 174(1)(a) applies only to land not reserved before the relevant scheme comes into operation. Because of the focus, in submissions, on the notion of "actual or compensable injurious affection" the import of the words "by reason of the meaning of ... a planning scheme" were not specifically addressed in the course of argument. It may be that the City does not advance that contention, but if it does, then I would reject it.

32 I do so because of s 177(1) of the PD Act. That section deters any claim for compensation until either the land is sold or an unacceptable conditional development approval, or a refusal of development, is issued by the responsible authority. It may well be that, between the initial reservation and the happening of one of those events, the applicable town planning scheme is revoked and a new scheme introduced in its place. If the reservation continues unchanged under the new scheme, there is nothing to suggest that the inchoate right to compensation is extinguished by the revocation of the old scheme. To conclude otherwise would defeat the object and purpose of the compensation provisions of the PD Act. It follows that the fact that land was originally reserved for a public purpose under an earlier scheme does not prevent the application of s 174(1)(a) to that land if it is continues to be reserved for a public purpose under a later scheme.

33 For the foregoing reasons, I am of the view that because the land is reserved under TPS 40 for a public purpose, it is, by operation of s 174(1) of the PD Act, injuriously affected by reason of the making of that scheme.

34 Whether the injurious affection results in any compensation being properly payable is a matter for an arbitrator to determine. Nothing in these reasons should be taken as expressing a view as to the answer to that question.

1. The Tribunal finds that, by reason of the fact that the 19 lots the subject of these proceedings are reserved for a public purpose under City of Canning Town Planning Scheme No 40, they are injuriously affected for the purposes of Part 11 of the Planning and Development Act 2005 (WA).

I certify that this and the preceding [34] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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