LEITH -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2014] WASC 499 (22 December 2014)

4 Consequently, the question is, in substance, whether the fact that the plaintiff was not the registered proprietor of the relevant land at the time the PRS came into effect, and subsequently acquired it by purchase, precludes the plaintiff from claiming compensation for the injurious affection of the land by the PRS.

5 For the reasons that follow, in my opinion, the question should be answered favourably to the plaintiffs.

6 Because the question raised is a pure question of statutory construction, it is not necessary to state the facts in any more detail. It is convenient to set out the relevant statutory provisions, before outlining the parties' competing contentions.

7 Although the injurious affection of the land occurred prior to the commencement of the PD Act, the effect of the statutory regime is that the rights to compensation for injurious affection are to be determined under the PD Act.

8 At the time the PRS came into effect, cl 43 of the PRS provided that a claim for compensation for injurious affection may be made under pt II(B) of the Western Australian Planning Commission Act 1985 (WA) (the WAPC Act). Those provisions applied, with necessary changes, the provisions of s 11 and s 12 of the Town Planning and Development Act 1928 (WA) subject to stipulated modifications. Those modifications relevantly included s 33(1) and (2). Those sections were in terms corresponding to what is now s 177 of the PD Act.

9 The Planning and Development (Consequential and Transitional Provisions) Act 2005 (WA) provides that a reference to a repealed enactment in a regional planning scheme is to be read as including a reference to the corresponding provision in the PD Act.[1] Thus a reference in the PRS to pt II(B) of the WAPC Act is to be read as a reference to pt 11 of the PD Act, including s 173 and s 175.

10 Part 11 of the PD Act governs compensation and acquisition.

(1) Subject to this Part any person whose land is injuriously affected by the making or amendment of a planning scheme is entitled to obtain compensation in respect of the injurious affection from the responsible authority.

...

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

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

(b) the scheme permits development on that land for no purpose other than a public purpose; or

(c) the 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.

1. No compensation if Scheme's provisions are, or could have been, in certain other laws

When land is alleged to be injuriously affected by reason of the making or amendment of a planning scheme, no compensation is payable in respect of the injurious affection if or so far as the relevant provisions of the planning scheme are -

(a) also contained in any Act, or in any order having the force of an Act of Parliament, in operation in the area; or

(b) such as would have been enforceable without compensation if they had been contained in local laws.

1. Questions as to injurious affection etc.,how determined

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

(2) 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 2012, unless the parties agree on some other method of determination.

(1) Subject to subsection (3), when under a planning scheme any land has been reserved for a public purpose, no compensation is payable by the responsible authority for injurious affection to that land alleged to be due to or arising out of such reservation until -

(a) the land is first sold following the date of the reservation; or

(b) the responsible authority -

(i) refuses an application made under the planning scheme for approval of development on the land; or

(ii) grants approval of development on the land subject to conditions that are unacceptable to the applicant.

(2) Compensation for injurious affection to any land is payable only once under subsection (1) and is so payable -

(a) under subsection (1)(a) to the person who was the owner of the land at the date of reservation referred to in subsection (1)(a); or

(b) under subsection (1)(b) to the person who was the owner of the land at the date of application referred to in subsection (1)(b),

unless after the payment of that compensation further injurious affection to the land results from -

(c) an alteration of the existing reservation of the land; or

(d) the imposition of another reservation of the land.

(3) Before compensation is payable under subsection (1) -

(a) when the land is sold, the person lawfully appointed under section 176 to determine the amount of the compensation is to be satisfied that -

(i) the owner of the land has sold the land at a lesser price than the owner might reasonably have expected to receive had there been no reservation of the land under the planning scheme; and

(ii) the owner before selling the land gave written notice to the responsible authority of the owner's intention to sell the land; and

(iii) the owner sold the land in good faith and took reasonable steps to obtain a fair and reasonable price for the land;

or

(b) when the responsible authority refuses an application made under the planning scheme for approval of development on the land or grants approval of development on the land subject to conditions that are unacceptable to the applicant, the person lawfully appointed under section 176 to determine the amount of the compensation is to be satisfied that the application was made in good faith.

(1) A claim for compensation for injurious affection to land by the making or amendment of a planning scheme is to be made -

(a) in the case of a claim in respect of injurious affection referred to in section 174(1)(a) or (b), at any time within 6 months after -

(i) the land is sold;

(ii) the application for approval of development on the land is refused; or

(iii) the approval is granted subject to conditions that are unacceptable to the applicant;

or

(b) in the case of a claim in respect of injurious affection referred to in section 174(1)(c), within the time, if any, limited by the planning scheme.

(2) The time limited by a planning scheme under subsection (1)(b) is to be not less than 6 months after the date when notice of the approval of the scheme is published in the manner prescribed by the regulations.

1. Injurious affection due to land being reserved, amount of compensation for

(1) Subject to this Division, the compensation payable for injurious affection due to or arising out of the land being reserved under a planning scheme, where no part of the land is purchased or acquired by the responsible authority, is not to exceed the difference between -

(a) the value of the land as so affected by the existence of such reservation; and

(b) the value of the land as not so affected.

(2) The values referred to in subsection (1)(a) and (b) are to be assessed as at the date on which -

(a) the land is sold as referred to in section 178(1)(a); or

(b) the application for approval of development on the land is refused; or

(c) the approval is granted subject to conditions that are unacceptable to the applicant.

12 By orders made by consent on 10 September 2014, in each case the following question of law arises in the form of a special case:

Whether a person to whom s 177(2)(b) of the Planning and Development Act 2005 (the PD Act) applies can be entitled to compensation pursuant to ss 173 and 177(1)(b) of the PD Act, in circumstances where the land has been sold following the date of the reservation, and where there has not been a previous claim under s 177(1)(a) of the PD Act.

13 The WAPC complains that the form of the question is defective.[2] As part of its case, it submits that a person who has purchased land from the person who was the owner at the time of reservation can never be a person to whom s 177(2)(b) applies. Further, it also submits that whether there has been a previous claim is irrelevant; the PD Act precludes multiple payments, not multiple claims.

14 The plaintiffs did not address submissions to the form of the question. There seems to me to be some merit in the points made by the WAPC.

Whether a person to whom s 177(2)(b) of the Planning and Development Act 2005 (the PD Act) would otherwise apply can be entitled to compensation pursuant to ss 173 and 177(1)(b) of the PD Act, in circumstances where the land has been sold following the date of the reservation, and where no compensation has previously been paid under s 177(1) of the PD Act.

16 I will hear further from the parties in relation to the final form of the question.

The High Court's decision in Western Australian Planning Commission v Temwood Holdings Pty Ltd

17 In Western Australian Planning Commission v Temwood Holdings Pty Ltd[3] the High Court expressed views about provisions of the Metropolitan Region Town Planning Scheme Act 1959 (WA) in terms materially identical to s 173 and s 177 of the PD Act. Gummow and Hayne JJ concluded that a purchaser who acquired the land after the reservation under the planning scheme, there the Metropolitan Region Scheme, had no entitlement to compensation for injurious affection.[4] McHugh J[5] and Callinan J[6] delivered separate reasons in which they both came to the contrary conclusion. The other member of the court, Heydon J, expressed no view on the question.[7]

18 This division of opinion reflects and reveals that there is considerable force in both sets of contentions. There are strong indicators and contraindications for each of the competing views.

19 I do not propose to outline the different approaches taken in Temwood. I have, of course, carefully considered their Honours' reasons. As the parties rely heavily on the judgments in favour of their respective constructions, the following summary of the parties' contentions incorporates the various approaches in Temwood.

20 The plaintiffs contend that, on a proper construction of the statutory scheme, a person who purchases land after it was reserved under a scheme is entitled under s 177(2)(b) to claim compensation if there is an unsatisfactory response to a development application, so long as no compensation has been paid to the seller.

21 In support of that construction, the plaintiffs submit that:

(1) the nature of the legislation means that it should be given a 'fair large and liberal' interpretation.[8] Further, the legislation should be construed with all the generality its words permit. It should not be construed on the basis that the right to compensation is subject to a limitation not found in the terms of the statute;[9]

(2) the language of s 173 is general and broad, providing an entitlement to compensation for 'any person whose land is injuriously affected'. The words 'any person' in s 173 should not be read as confined to a person who owned the land at the time the scheme was made. Any person who owns land affected by the scheme is injuriously affected by the making of the scheme even if that person only acquired the land after the scheme was made.[10] The words 'injuriously affected by the making of a planning scheme' should not be given a temporal connotation limiting injurious affection to the time when the scheme was made. Such a reading of s 173 would not be consistent with the rights given to a subsequent owner who was the owner of the land at the date of application for development and who is entitled to compensation under s 177(1)(b) and s 177(2)(b);[11]

(3) the statutory scheme recognises that the true nature and extent of the adverse effect of a planning scheme may not occur or be known until much later than the time at which the scheme is made.[12] For example, whether the scheme will inhibit a particular development may not be known until application for development approval is made;

(4) one clear element of the statutory scheme is that compensation is payable only once. Thus the scheme provides for two alternative possible adverse effects either of which can be the subject of a claim for compensation. In effect, the legislative scheme confers two independent alternative rights. Section 177(2)(b) gives an independent claim of compensation unrelated to the fact of ownership at the date the scheme was made.[13] One right does not expire simply because the other right was not pursued and has since expired.[14] This is illustrated by the converse case. If the original owner makes a development application which is refused, an entitlement to claim compensation arises. If no claim is brought, why should the owner by precluded from a claim on sale?[15]

(5) the WAPC's construction would require the impermissible reading into s 177(1) of words which are not there: 'whichever shall occur first';[16] and

(6) there is no sufficient justification to give the words 'the person who was the owner of the land at the date of the application' a narrow meaning that covers only the situation where ownership changed after the date of reservation, otherwise than by sale.[17]

22 The WAPC contends to the contrary. It submits that:

(1) it is s 173, not s 177, that creates the entitlement to compensation. It is only a person whose land is injuriously affected by the making or amendment of a planning scheme who is entitled to claim compensation. The injurious affection must be by the making or amendment of the scheme, not by its continuing existence;

(2) section 177 works a deferment of the entitlement to obtain payment of compensation. The purpose of the deferral was to avoid the deluge of claims arising from the making of a planning scheme;[18]

(3) it is wrong to direct attention to any notion of crystallisation of loss. The reservation is the injurious affection notwithstanding that payment is deferred and assessment is done by reference to a later date

(4) thus the WAPC invites adoption of what Gummow and Hayne JJ said:

The construction of the legislation put forward by Temwood should not be accepted. The controlling words of what follows are the opening words of s 11(1) of the Town Planning Act [equivalent to s 173 PD Act]:

'Any person whose land or property is injuriously affected by the making of a town planning scheme ...' (emphasis added)

What follows in s 11(1) is to be read as if, among other things, subs (3) and (4) of s 36 of the Metropolitan Region Act were included and the payment and quantification of compensation were deferred accordingly. In particular, s 36(3) [equivalent to s 177(1)] defers any right to payment until (a) first sale following the date of the reservation, 'or' (b) refusal of a development application or a grant of permission on conditions unacceptable to the applicant for approval (development refusal). The claim for compensation must be made within six months thereafter (s 36(5) [equivalent to s 178]);[19]

(5) section 177(1) should be construed as treating the deferral of the entitlement to payment as terminated upon either the first sale or a development refusal, or a grant on unacceptable conditions.[20] The effect of s 178 is that once one of these occurs, the claim must be made within six months thereafter;

(6) section 178 provides that a claim is to be made at any time within six months after the land was sold, or the application for approval of development on the land is refused or is granted subject to unacceptable conditions. Syntactically, that suggests the limitation period ends six months after the first event to occur;

(7) the second reading speech reveals that the deferral of payment of compensation was justified by the fact that the depreciating effect of reservation only becomes real when the land is sold at a depressed price, or when development is frustrated. That depreciation becomes real when the first of those events happens;[21]

(8) a construction should be avoided that allows compensation for those who have suffered no loss. The plaintiffs' construction will allow compensation for a purchaser who has suffered no loss, thereby permitting a windfall gain. A purchaser may have paid a lower price and may be expected to have paid a lower price, given that, generally speaking at least, the existence of the reservation will be publicly available information and therefore will be taken into account in fixing a price;

(9) it is clear that a subsequent purchaser will not be entitled to compensation in relation to his or her further sale of the property. The right under s 177(1)(a) and (2)(a) relates only to the owner at the time of the first sale. It is not clear why the legislature would have intended to confer rights on a person who purchases subsequent to the reservation in relation to a development application, but not in relation to a sale;

(10) the legislature cannot be taken to have intended to protect the position of a subsequent owner. A claim is made available by the scheme to the original owner for compensation triggered by the sale. Such a claim would preclude any claim by a subsequent owner;

(11) as Gummow and Hayne JJ pointed out in Temwood,[22] the second reading speech for subsequent amending legislation referred to subsequent purchasers being aware of the scheme provisions and therefore not being disadvantaged. This supports an inference that the legislature expected or assumed that a purchaser will or should generally not suffer loss; and

(12) in Temwood McHugh J accepted that until 1986, the legislation had the effect that a purchaser after the reservation was not entitled to any compensation, for the reasons stated by Gummow and Hayne JJ.[23] McHugh J held that the legislative change in 1986 altered the position in that respect. The WAPC submits that consideration of the legislative history and the second reading speech for the 1986 amendments support the conclusion that the amendment was intended to make clearer the proposition that compensation could not be claimed twice, and does not support the suggestion that it gave rise to entitlement for a postreservation purchaser to claim upon the refusal of a development application.

Analysis of the competing constructions Overview of the effect of pt 11 of the PD Act

23 I begin with an overview of the effect of pt 11 of the PD Act.

24 Section 173 creates an entitlement to compensation on the part of a person whose land is injuriously affected by the making or amendment of a planning scheme. There is a question whether s 173 has a temporal limitation, as the WAPC contends, so that only the owner at the time of making of the planning scheme has the entitlement conferred by s 173. I will come back to that question later in these reasons.

25 Section 174 controls the question of when land is injuriously affected. Land will be injuriously affected by reason of the making of a planning scheme if, and only if:

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

(2) the scheme permits development on the land for no purpose other than that public purpose; or

(3) the scheme affects a nonconforming use of land in the way described in s 174(1)(c).

26 Section 177 provides that no compensation is payable until the land is first sold after the reservation, or the responsible authority refuses a development application, or grants it subject to unacceptable conditions. The content of the entitlement created by s 173 is elucidated by s 177, to which s 173 is expressly made subject. Section 177 renders inchoate the entitlement to compensation under s 173. There is no claim for compensation unless and until one of the events in s 177(1) occurs.

27 The assessment of compensation is governed by s 179. Section 179(1) provides, in effect, that compensation is to be the difference between the value of the land as affected by the reservation and the value of the land as not so affected. The date for that assessment will depend upon which of the alternatives in s 177 has been invoked. The assessment is to be made at the date when the land is sold, or when the application for approval is refused or granted subject to unacceptable conditions.

28 The combined effect of s 173, s 177 and s 179 is that an owner of land can receive compensation only if one of two circumstances arises: either a sale is effected at a depressed value attributable to the scheme; or consent to development is refused, or granted on unacceptable conditions. Further, compensation is payable only if, and to the extent, that the land as affected by the reservation is worth less than it would otherwise be worth.

The central question: the character of the right(s) created by s 177

29 The most fundamental difference between the parties' competing constructions lies in the nature of the right or rights created by this statutory scheme.

30 On the WAPC's construction, there is a single right to compensation, capable of being triggered in alternative ways. When one of the relevant triggering events occurs, the singular inchoate right matures and becomes exercisable, and its content is thereby exhaustively defined.

31 By contrast, on the plaintiffs' construction the legislation confers two independent alternative rights. First, the owner of the land at the date of reservation has a right to claim compensation when the land is first sold.[24] Under s 179, such a claim is assessed by reference to the difference between the unaffected value and affected value of the land, assessed at the date of the sale. Secondly, the owner of the land at the date a development application is made and refused (or granted on unacceptable conditions) has a right to compensation.[25] Under s 179 that claim is assessed by reference to the difference between the affected and unaffected values, as at the date the application is refused (or conditionally granted).

32 Section 178 provides that a claim for injurious affection arising from a scheme with a reservation for a public purpose or a restriction to development for a public purpose must be made within six months after the land is sold, or the development application is approved or granted subject to unacceptable conditions. Both parties invite a construction of s 178 that is in harmony with, and supportive of, its characterisation of the rights created by s 173 and s 177. The plaintiffs contend that s 178 provides for a time limit that applies independently to each of the alternative claims. The WAPC contends that s 178 provides a single limit for the single claim that arises on the happening of the first of the alternative triggering events in s 177(1).

33 This legislative scheme has been, in substance, in place, in predecessor legislation, since amendments were made in 1986 to the Metropolitan Region Scheme Town Planning Scheme Act 1959 (WA) (the Scheme Act). In that light, it may be thought surprising that the legislative scheme is ambiguous in this fundamental respect. However, that is the position, reflected in the divergent approaches taken in Temwood, and not resolved by any subsequent authorities. Later in these reasons I will refer to one decision of this court on related issues.

34 The general principles of statutory construction are well known, and were not in dispute in these proceedings. I apply the principles in Curtin University of Technology v Woods Bagot Pty Ltd[26] and in the Commissioner for Corrective Services v RAJ.[27] The following is a broad summary of those principles.

35 The search is for the intention of parliament expressly embodied in the legislation. The starting point is the text of the statute. The text is the surest guide to legislative intention. The language of the statute should be interpreted taking into account its context, including any general purpose or policy of the relevant provisions that may be discerned. The consequences of an interpretation, and any perceived improbability of result, are capable of assisting in choosing between constructional choices that are open on the language of the statute. The statute should be construed as a whole. So far as possible, a construction that gives a harmonious or coherent meaning to the various provisions is to be preferred. The construction of legislation should strive to give meaning and effect to every word and provision.

36 In Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd,[28] French CJ, Hayne, Crennan, Bell and Gageler JJ emphasised the centrality of the text in statutory construction:

'This court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text'. So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.

37 Part 11 of the PD Act provides a statutory scheme for compensation. That engages the principle of statutory construction that beneficial legislation should be given a 'fair, large and liberal' construction.[29] That requires a liberal and beneficial construction, but not an unreasonable or unnatural one. This principle assists in choosing between constructional choices that are open on the language of the legislation; it is not a licence to rewrite or ignore the language of the statute.[30]

38 Consistently with this approach, it has been said that provisions for compensation for injurious affection should be construed with all the generality that their words permit, and that 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.[31]

39 There is, of course, a limit as to how much work the principles of statutory construction of beneficial legislation, and of provisions for compensation, can do in the process of construction. Plainly, the principle that a fair, large and liberal interpretation be given to beneficial legislation (such as provisions for compensation) does not mean that in any case where two constructions are capable of arising from the text, the wider one must be adopted regardless of the extent to which considerations of text, context, object and consequences sustain a distinct preference for a narrower construction.[32] Whether, in a particular case, the narrower of two possible constructions of beneficial legislation should be adopted will depend on the specifics of the legislation in question and its text, context and object amongst other considerations.

40 A straightforward reading of the language of s 177(1)(b) and s 177(2)(b) appears to suggest that if the relevant authority refuses a development application (or approves it on unacceptable conditions) for land in respect of which no compensation for injurious affection has been paid, compensation is payable to the person who is the owner of the land at the date of the application. The principles I have just stated suggest that a question that arises is: what features of this statutory scheme have the result that no claim is available?

41 The WAPC's submissions rely heavily on s 173 of the PD Act, and its place in the statutory scheme. In its written submissions, the WAPC submitted that the effect of s 173 is that a person is entitled to compensation only if they owned the injuriously affected land at the time of the making of the planning scheme.[33] That view finds support in the reasons of Gummow and Hayne JJ in Temwood.[34]

42 In my view, the natural reading of s 173, considered in isolation, is that it:

(1) provides compensation to a person who owns land at the time that a planning scheme is made or amended, thereby injuriously affecting the land; and

(2) requires that the injurious affection must arise from the making or amendment of the scheme, not by its existence.

43 If the continuing existence of a scheme were enough, there would be no need for the words 'the making or amendment of'. The section would just say 'any person whose land is injuriously affected by a planning scheme ...'. Further, the identification of the alternatives 'the making of' and the 'amendment of' indicates an intention to focus upon the time at which the scheme is made or amended. If the continuing existence of a scheme were enough, there would be no purpose to be served in distinguishing between the making and the amendment of a scheme.

44 In my opinion, however, to read s 173 as imposing an unqualified temporal restriction on the entitlement to compensation is not consistent with s 177(2)(b). The language and structure of s 177(2) make it clear beyond doubt that compensation under s 177(1)(b) is not restricted to the person who was the owner at the time of the reservation. If it were so restricted, there would have been no need for, or point in, the two differently worded paragraphs of s 177(2).

45 In oral submissions, senior counsel for the WAPC accepted the need to qualify the absolute temporal limitation said to arise from s 173. He submitted that s 173 means that compensation for injurious affection is available only to a person who owned the land at the time the scheme was made, or to that person's heirs or donees.[35]

46 The scope of that qualification is drawn from and founded on the WAPC's construction of the entitlement in s 177(2)(b) as limited to the original owner or persons who acquired from the original owner other than by sale. The words of s 177(2)(b) are not, in their terms, so limited. Rather, that paragraph refers to the person who was the owner of the land at the date of the development application. The reading of the general words of s 177(2)(b) invited by the WAPC is controversial, and itself requires justification. That justification cannot be found in a restrictive temporal reading of s 173, given that such a reading of s 173 must be qualified by s 177(2)(b). The justification must be found elsewhere in the statutory scheme. To do otherwise would involve an element of circulatory of reasoning.

47 The extent to which s 177(2)(b) qualifies what would otherwise be the natural reading of s 173 is informed by the proper construction of s 177 as a whole, to which I now turn.

48 The WAPC submits that the effect of s 177 is to defer the right to compensation until one of the things in s 177(1)(a) or (b) happens. The deferral comes to an end when the first of those things occurs. It says, the effect of the words used in s 177(1), 'no compensation is payable ... until ...', is that once one of the stipulated events occurs, the entitlement to compensation is no longer postponed. The deferral effected by s 177(1) thus comes to an end.

49 To the extent that the purpose and effect of s 177 is to defer an entitlement to compensation, there is force in this submission. However, in my view, s 177 does more than defer a claim created by and under s 173. To my mind, the right to claim compensation is created by the combined operation of s 173 and s 177, not solely by s 173. The opening words of s 177(2) indicate that compensation is payable under s 177(1). Section 177(1) gives a party referred to in s 177(2)(a) or s 177(2)(b) the ability to claim compensation. Further, s 177(1)(b) and s 177(2)(b) read together mean that the owner at the time of a development application, who need not be the owner at the time of reservation, is entitled to compensation.

50 In my view, the language of s 177(1) and s 177(2), read together, is consistent with the creation of two alternative but otherwise independent rights. The first is the right of the owner of the land at the date of reservation to claim compensation when the land is first sold.[36] The second is the right of the owner of the land at the date a development application is made and refused (or granted on unacceptable conditions) to claim compensation.[37]

51 The WAPC's construction of s 173 and s 177(1) means that when the first sale after the reservation occurs, the right to compensation is exhausted. No claim is available to the purchaser. On the WAPC's construction, an owner at the time of the development application who was not the owner at the time of the reservation can only make a claim under s 177(1)(b) if he or she became the owner other than by sale. As senior counsel for the WAPC emphasised, that does give the words of s 177(2)(b) some effect. However, s 177(2)(b) is expressed in broad and general terms, and confers an entitlement to claim compensation. In those circumstances, the fact that the WAPC's construction gives s 177(2)(b) a significantly narrower scope for operation than its wide language would suggest is a consideration favouring the plaintiffs' construction.[38] At the least, this element of the WAPC's construction invites attention to the question of whether there is sufficient justification in the statutory scheme for confining the class of subsequent owners to those who have obtained ownership other than by sale. For the reasons that follow, I am not satisfied that there is.

52 In defining, in s 177(2)(b), the class of persons entitled to make a claim under s 177(1)(b), Parliament has specifically, and unmistakeably, chosen to distinguish the position under s 177(1)(a). Under s 177(1)(a), it is those who own at the time of reservation who can claim. Under s 177(1)(b), it is those who own at the time of the development application. The legislature can be taken to know that most owners acquire title by purchase. One of the two alternative triggering events in s 177(1) is the first sale. In those circumstances, if the legislature had intended that:

(1) upon the first of the alternative triggering events in s 177(1)(a) and s 177(1)(b), the single right to compensation is exhaustively activated; and

(2) thus upon the first sale of the land no further claim for compensation could ever be made;

I think it unlikely that the legislature would have chosen to define the class of persons upon whom the right to claim compensation under s 177(1)(b) was conferred by the general words 'the person who was the owner at the date of the application'. In my view, there is no sufficient foundation in s 177, or elsewhere in pt 11 of the PD Act, for treating the general words of s 177(2)(b) as intended to capture only a (relatively small) subset of those within the ambit of the words used, namely only those who acquired title other than by sale. For these reasons, I consider that the breadth and generality of the language of s 177(2)(b) provides strong support for the plaintiffs' construction.

53 Identification of the purpose of these provisions does not seem to me to assist in any significant way in the choice between the two constructions. The evident purpose of this statutory scheme is to compensate a landowner for injurious affection arising from reservation under a planning scheme, but only where the owner suffers one of two stipulated forms of concrete loss or disadvantage by reason of the reservation.[39] In my view, that purpose can fairly be said to be advanced by both of the competing constructions. In that respect it is to be borne in mind that, on any construction, compensation is payable only once.[40]

54 For these reasons, in my view both of the competing constructions are open on the language of the text, and on consideration of its purpose. That seems to me to engage the principles of statutory construction relevant to beneficial legislation generally and, more specifically, to statutory provisions for compensation for injurious affection. In construing provisions for injurious affection the court should be slow to imply limitations on the right to compensation that are not found in the express terms of the statute. Adopting a 'large and liberal' construction favours the plaintiffs' construction, entailing two alternative but otherwise independent rights, over the more restrictive construction advanced by the WAPC.

55 The WAPC also relies on s 178 of the PD Act. It submits that:

(1) as a matter of grammar and syntax, the language of s 178 suggests that the six month limitation period in that section ends six months after the first event to occur of the three alternative stipulated in subpars (i) to (iii) of s 178(1)(a); and

(2) that construction is consistent with, and supportive of, its construction of s 173 and s 177 as giving rise to a single right of compensation upon the happening of the first of the events stipulated in s 177(1)(a) and (b).

56 I do not accept the first of those propositions. In my view the language of s 178(1) can comfortably be read in the way invited by the plaintiffs' construction of that section. In effect, s 178(1)(a) can be read as if it concluded with the words 'as the case may be'.

57 One purpose of a provision such as s 178 which stipulates a time limit is to ensure that proceedings are commenced within a reasonable proximity of the events or circumstances to which attention must be given in the proceedings. That purpose is equally advanced by either construction of s 178.

58 The WAPC also relies on s 181 of the PD Act. Section 181 provides for the responsible authority to recover from the owner of land at the date of a revocation or reduction of a reservation an amount determined in accordance with that section. The WAPC submits that that section is an indication of a legislative assumption that a purchaser of reserved land pays a depressed price on account of the reservation. However, in my view, s 181 is not of significant assistance for present purposes. I do not think it sustains the broad legislative assumption invited by the WAPC. That is because s 181 only applies when compensation for injurious affection has been paid,[41] and in those circumstances the fact of that payment, and other relevant information, will have been notified on the title to the land under s 180.

59 I do not accept the WAPC's submission that the plaintiffs' construction should be avoided because it allows compensation to be claimed by a purchaser who has suffered no loss, thereby permitting a windfall gain. First, loss is not a distinct concept given statutory force in pt 11. Rather, the relevant concepts are whether the land has been injuriously affected, as that concept is explicated in s 174, and the assessment of compensation in accordance with s 179. Secondly, the statutory scheme provides its own safeguards and limits against producing a windfall. Compensation is limited to the difference between the affected and unaffected value of the land. Compensation is only payable once. If a purchaser has paid a lower price due to the reservation, it can be anticipated that the seller would have claimed the compensation thereby available to the seller, precluding any claim by the buyer. Thirdly, it is possible to imagine circumstances in which the WAPC's construction could lead to the denial of compensation to a purchaser who without fault contracted to purchase land in circumstances where the land subsequently became reserved prior to settlement. On the WAPC's construction, upon settlement of the sale, all claims are exhausted. No claim is available to the seller since the price obtained was not affected by the then unknown reservation.

60 It is not altogether easy to discern a coherent rationale for the legislature's apparent choices about to whom and in what circumstances a claim of compensation is available. As the WAPC submits, on the plaintiffs' construction a subsequent purchaser is given a right to compensation under s 177(2)(b) upon refusal of a development application, but clearly has no right to claim upon a second sale. It is not immediately obvious why a subsequent purchaser would be intended to be given rights under s 177(1)(b), but no rights under s 177(1)(a). However, I do not think this consideration assists, because a similar point can be made on the WAPC's construction. On that construction, a subsequent acquirer by will or gift has a right to compensation under s 177(1)(b), but no right to compensation on the first sale, because the right under s 177(1)(a) is given only to the owner at the date of the reservation.[42]

61 The WAPC also relies upon the extrinsic materials for and legislative history of the Scheme Act. For the reasons that follow, I think that consideration of the 1986 amendments that introduced what is now s 177(2)(b) supports the plaintiffs' construction, and that otherwise the legislative history and extrinsic materials are equivocal.

62 The deferral of the right to compensation for injurious affection was introduced to the legislative scheme by amendment made in 1962.[43] The primary purpose of the deferral of the right to compensation was, as the WAPC submits, the desire to avoid a flood of claims from the then proposed introduction of the first Metropolitan Region Scheme. From the point of view of fairness to landowners, the deferral was said to be justifiable in that it was only when one of the alternative triggering events occurred that any perceived depreciation of the value of the land became real. The Metropolitan Region Scheme Report 1962 said as follows:

[20] It might be said that upon the coming into operation of the Scheme property subject to reservation suffers an immediate depreciation of value insofar as its development is subject to a particular degree of control and its tenure is limited in time. Sec 11 of the Town Planning and Development Act appears to envisage that the total amount of such depreciation might have to be met by way of compensation for injurious affection. It is a matter of conjecture as to what amount of money would be likely to be involved, but it might well be quite beyond the financial resources of the Authority to meet it in face of its widespread commitments to acquire property reserved. The depreciation in value is, however, in many instances hypothetical. It becomes real only when property is sold at a value depressed by the reservation, or when development is frustrated by a refusal of consent under the Scheme.

[21] The Authority has accordingly submitted that liability for compensation for injurious affection be limited to two circumstances:

(a) where a sale is effected at a depressed value attributable to reservation under the Scheme; or

(b) where consent to development of property is refused on the grounds of reservation under the Scheme.

...

[183] Different considerations arise in respect of compensation and reservations. As discussed earlier in this Report, the Authority believes it essential that legislative provision be made for compensation in respect of reservations to be contained to those areas where a sale at a depressed price has been effected or where consent for development has been withheld. There is accordingly no time specified in the Scheme within which a compensation claim must be lodged in respect of reservations. These may be expected to arise at any time following either a sale at a depressed price or a decision under the Scheme to refuse consent for development, and they must be lodged within six months thereafter.[44]

63 In the second reading speech for the 1962 amendments of the Scheme Act the responsible Minister said as follows:

The Bill also amends the compensation provisions in respect of the metropolitan region scheme. This amendment arises from a consideration of the financial resources of the metropolitan improvement fund and problems of planning authorities in other States where claims for compensation have totalled many millions of pounds - far beyond the resources of the responsible authorities. It has been said that many of these claims were due to the uncertainty of the owners in respect of their right.

As indicated in the report submitted by the authority, it is quite impossible to contemplate the acquisition immediately, or over a short period of time, of land which will not be required for many years ahead and the cost of which will, in the aggregate, run to many millions of pounds. However, as the Act stands, the authority could be confronted with a heavy claim for compensation in respect of the whole of the land reserved under the scheme and far beyond its financial ability to meet. Nevertheless, it is necessary that the land be reserved in the scheme for this future need; and the reservation imposes an obligation in respect of compensation.

It can properly be argued that reservation under the scheme depreciates the value of land. However, the depreciation is, in many cases, hypothetical and becomes real only when the land is sold at a price which reflects this depreciation, or when development is frustrated by a refusal of consent under the scheme. The amendment proposes that compensation for injurious affection be limited to two circumstances: where a sale is effected at a depressed value attributable to reservation under the scheme, or where consent to develop is refused on the ground of reservation under the scheme.

These provisions are designed to protect the interests of landowners as well as to secure that the scheme shall not be defeated by the inability of the fund to meet claims upon it. The authority is already empowered to purchase land; and, with the provisions now proposed, there should be no problem in dealing with a case of individual hardship should it arise.[45]

64 In my view, none of this sheds much light on the questions of construction arising in this case. What is said in these respects is equivocal, as is reflected in the fact that both Gummow and Hayne JJ[46] on the one hand, and Callinan J[47] on the other hand, drew support from this material for their competing constructions. Gummow and Hayne JJ said that once one of the stipulated events happens, the depreciation becomes real and the deferral comes to an end. Callinan J emphasised that the language in the report and in the Minster's speech is language in the alternative 'either', 'or', and pointed to the absence of any reference to the first occurrence of either of the alternative events.

65 In any event, to the extent that the 1962 amendments support the view adopted by Gummow and Hayne JJ, attention must nevertheless be directed to the position after the later amendments, in 1986, in which the provisions equivalent to s 177(2)(a) and s 177(2)(b) were introduced.

66 In 1968, the Scheme Act was amended to add a new subsection (3a) in s 36. The new s 36(3a) provided as follows:

Compensation for injurious affection to any land is payable only once under paragraph (a) of subsection (3) of this section, unless after the payment of that compensation further injurious affection to the land results thereafter from an alteration of the existing reservation on the land or the imposition of another reservation thereon.

67 The object of this amendment appears to have been to ensure that further compensation is payable if further injurious affection results from an alteration of the existing reservation or the imposition of another reservation.

68 In the second reading speech for the bill for the 1968 amendments the responsible minister said as follows:

The wording of the present section leaves some doubt as to the intent of the provision [s 36(3)], which indicates that compensation for injurious affection does not become payable in the case of land reserved under the provisions of the Metropolitan Region Scheme until the land is first sold.

The provisions for the payment of compensation in such cases was designed to protect the owner of land at the time the scheme - or an amendment - included land in a reservation so that when he later sells the property he is compensated by the Authority if he is unable to realise the full market value. Subsequent purchasers are aware of the scheme provisions at the time of purchase - s 36A sets out procedures - and would not be at the same disadvantage as the original owner.[48]

69 Gummow and Hayne JJ pointed out in Temwood[49] that this is indicative of a view on the part of the legislature that subsequent purchasers can be taken to be aware of scheme provisions at the time of purchase, and so they are not at the same disadvantage as the original owner.

70 In my respectful view, what was said by the Minister in the context of the 1968 amendments is of only very limited weight for present purposes. That is because by 1968 the provisions equivalent to s 177(2)(a) and s 177(2)(b) had not been introduced.

71 I come to the amendments made to the Scheme Act in 1986. Before the 1986 amendments s 36(3) and s 36(3a) provided as follows:

(3) Subject to subsection (4) of this section, where under the Scheme any land has been reserved for a public purpose, no compensation is payable by the responsible authority for injurious affection to that land alleged to be due to or arising out of such reservation until:

(a) the land is first sold following the date of the reservation; or

(b) the responsible authority refuses an application made under the Scheme for permission to carry out development on the land or grant permission to carry out development on the land subject to conditions that are unacceptable to the applicant.

(3a) Compensation for injurious affection to any land is payable only once under paragraph (a) of subsection (3) of this section and is payable to the person who is the owner of the land at the date of reservation referred to in that paragraph, unless after the payment of that compensation further injurious affection to the land results thereafter from an alteration of the existing reservation on the land or the imposition of another reservation thereon.

72 The 1986 amendments repealed subsection (3a) and substituted a new s 36(3a) in terms of substantially identical to s 177(2) of the PD Act. The new s 36(3a) was in the following terms:

(3a) Compensation for injurious affection to any land is payable only once under subsection (3) and is so payable -

(a) under paragraph (a) of that subsection to the person who was the owner of the land at the date of reservation; or

(b) under paragraph (b) of that subsection to the person who was the owner of the land at the date of application,

referred to in that paragraph, unless after the payment of that compensation further injurious affection to the land results from -

(c) an alteration of the existing reservation thereof; or

(d) the imposition of another reservation thereon.

73 In the second reading speech for the 1986 amendments bill, the responsible Minister said as follows:

[I]t is proposed to amend the Act in relation to the payment of compensation for land which has been reserved under the metropolitan region scheme so that it is clear that compensation for injurious affection is paid only once to the person who is the owner at the date of reservation when the land is first sold following the date of reservation; or the person who is the owner at the time when the responsible authority refuses an application for development on the land or grants permission subject to conditions which are unacceptable to the owner.

At present there is uncertainty about claims being able to be paid more than once in respect of the same portion of land.[50]

74 The WAPC submits that it is clear from the Minister's speech that the purpose of the 1986 amendments was to remove uncertainty about whether compensation could be claimed more than once. Consequently, the WAPC submits, it is clear the amendment was not intended to give rise to a new entitlement for a postreservation purchaser to claim compensation on the refusal of a development application.[51]

75 I do not accept these submissions. By replacing the words 'compensation ... is payable only once under paragraph (a) of subsection (3)' with the words 'compensation ... is payable only once under subsection (3)' the 1986 amendment made clear that compensation could be payable only once, regardless of which paragraph of s 36(3) had been invoked. That had evidently not previously been clear. By definition, the existence of such uncertainty reflected a view that the existing legislative scheme created, or may have created, more than just a single right to compensation. The legislative response to this uncertainty was not to make it clear that there was only a single right to compensation, arising upon the first to happen of the events in s 36(3)(a) or s 36(3)(b). Rather, the legislative response was to make clear the alternative character of rights under s 36(3)(a) and s 36(3)(b), by stating that compensation is payable only once under s 36(3).

76 Further, the 1986 amendments did more than just remove uncertainty about whether more than one claim could be made. The amendments also affected who was entitled to bring a claim. The amendments also provided that, unlike a claim under par (a) of subsection (3), a claim under par (b) of subsection (3) could be made by the person who was the owner of the land at the date of application. The legislature thereby unmistakeably evinced an intention that a person who was not the owner at the time of reservation but who was the owner at the time of the development application would be entitled to claim compensation. The observations I made at [52] in relation to s 177(2)(b) apply to the enactment of the 1986 amendments to insert the new s 36(3a). Given that:

(a) one of the alternative triggers in s 36(3) was the first sale; and

(b) Parliament can be taken to know that most owners acquire title through purchase;

I think it unlikely that, if Parliament intended that upon the first sale no further claim could ever be made, Parliament would have used the broad words of s 36(3a)(b) to define the class of those entitled to claim under s 36(3)(b). To my mind, the better view is that Parliament intended to confer an alternative and otherwise independent right under s 36(3)(b) upon the person who was owner at the time of the development application.

77 For these reasons, I agree with McHugh J that, whatever the position before 1986, after the 1986 amendments the effect of s 36(3) was to create two alternative and otherwise independent entitlements: first, the entitlement of the owner at the date of reservation to claim upon the first sale,[52] and second, the claim of the owner at the date of a development application upon the refusal of or grant on unsatisfactory conditions.[53]

78 Although not dealing with precisely the same question, the construction I have adopted is consistent with the decision of McKechnie J in Nicoletti v Western Australian Planning Commission.[54] In that case, his Honour declared that on a proper construction of s 36 of the Scheme Act, if a person to whom s 36(3)(b) the equivalent of s 177(1)(b) of the PD Act applies has made a claim for compensation, but no compensation has been paid to that person, that person can, in respect of a later development application, make a claim for compensation under s 36(3)(b) and s 36(5) of that Act.

79 For the reasons I have given, on balance I prefer the construction advanced by the plaintiffs. By way of summary, the most significant considerations favouring my preferred construction are the breadth and generality of the language of s 177(2)(b), the legislative history of the introduction of the predecessor provision by the 1986 amendments to the Scheme Act, and the principles of statutory construction for compensatory legislation. I construe pt 11 of the PD Act as giving rise to two independent alternative rights to compensation. The owner of the land at the date of reservation has a right to claim compensation when the land is first sold.[55] The owner of the land at the date a development application is made and refused (or granted on unacceptable conditions) has a right to compensation.[56] Any claim must be brought under s 178 within six months of the event which triggers the entitlement to claim. Compensation is payable only once. Once compensation has been paid, no further claim can be made by any party.

80 For these reasons, I would answer the question in the affirmative. I will hear from the parties as to the final form of the question, the orders to be made, and as to costs.

[3] Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30.

[8] AB v The State of Western Australia [2011] HCA 42; (2011) 244 CLR 390 [24] (French CJ, Gummow, Hayne, Kiefel and Bell JJ).

[9] Temwood [160], [166] (Callinan J); Kettering Pty Ltd v Noosa Shire Council [2004] HCA 33; (2004) 78 ALJR 1022 [31] [32] (McHugh, Gummow, Hayne, Callinan and Heydon JJ).

[11] Temwood [38] [39] (McHugh J); see also plaintiffs' submissions in reply [12], [13].

[18] See Western Australia, Parliamentary Debates, Legislative Assembly, 4 September 1962, 820 (EHM Lewis, Minister for Education).

[19] Temwood [102] (Gummow and Hayne JJ).

[20] Temwood [103] (Gummow and Hayne JJ).

[21] Temwood [106] (Gummow and Hayne JJ).

[26] Curtin University of Technology v Woods Bagot Pty Ltd [2012] WASC 449 [34] [41].

[27] Commissioner for Corrective Services v RAJ [2014] WASC 338 [40] [45].

[28] Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 [39] (footnotes omitted).

[29] AB v The State of Western Australia [24] (French CJ, Gummow, Hayne, Kiefel and Bell JJ); IW v City of Perth [1997] HCA 30; (1997) 191 CLR 1, 12 (Brennan CJ, McHugh J); Pearce DC and Geddes RS, Statutory Interpretation in Australia (8th ed, 2014) [9.2].

[30] Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 77 ALJR 1797 [33] (Heydon J, McHugh AC, Kirby and Gummow, Hayne JJ agreeing); Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48; (2008) 237 CLR 285 [48] (Hayne, Heydon, Crennan and Kiefel JJ); Kavalee v Burbidge [1998] NSWSC 111; (1998) 43 NSWLR 422, 44 (Mason P).

[31] Marshall v Director General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 [38] (McHugh J); Kettering Pty Ltd v Noosa Shire Council [31] (McHugh, Gummow, Hayne, Callinan and Heydon JJ).

[32] See, for example, Comcare Australia v Pires [2005] FCA 747; (2005) 143 FCR 104 [44] [46].

[39] Bond Corp Pty Ltd v Western Australian Planning Commission [2000] WASCA 257; (2000) 110 LGERA 179 [32] [34], [37], (Ipp J, Wallwork and Owen JJ agreeing); Town Planning Department, Metropolitan Region Planning Authority, Metropolitan Region Scheme Report 1962 [20], [21], [183]; Western Australia, Parliamentary Debates, Legislative Assembly, 4 September 1962, 820 (EHM Lewis, Minister for Education).

[43] Metropolitan Region Town Planning Scheme Act Amendment Act 1962 (WA).

[44] Town Planning Department, Metropolitan Region Planning Authority, Metropolitan Region Scheme Report 1962 [20], [21], [183].

[45] Western Australia, Parliamentary Debates, Legislative Assembly, 4 September 1962, 820 (EHM Lewis, Minister for Education).

[48] Western Australia, Parliamentary Debates, Legislative Council, 3 September 1968, 754, (LA Logan, Minister for Town Planning).

[50] Western Australia, Parliamentary Debates, Legislative Assembly, 12 June 1986, 173 (B Pearce, Minister for Planning).

[51] WAPC's submissions [74] [76]; ts 44 46.

[54] Nicoletti v Western Australian Planning Commission [2006] WASC 131; (2006) 147 LGERA 33.