Court of Appeal (WA)|2002-02-01|Before: Wallwork J, Scott J

Temwood Holdings Pty Ltd v Western Australian Planning Commission & Anor [2002] WASCA 10 (1 February 2002)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : TEMWOOD HOLDINGS PTY LTD -v- WESTERN AUSTRALIAN PLANNING COMMISSION & ANOR [2002] WASCA 10

Appeal against dismissal by single Judge of Appeal from decision of Town Planning Appeal Tribunal - Proposed subdivision of land at Singleton already subject to foreshore frontage reserve, created pursuant to provisions of Metropolitan Region Scheme ("MRS") - Imposition by Western Australian Planning Commission of term of approval requiring appellant to cede reserve land without cost or payment by the Crown - Original creation of reserve under MRS conferred contingent statutory right of compensation on appellant - Real purpose of impugned condition to extinguish that right - Discussion of nature of right to compensation under Metropolitan Region Town Planning Scheme Act 1958 - Whether general power under Town Planning and Development Act can be relied upon to extinguish specific right conferred by legislation establishing MRS - Whether, in any event, condition imposed for a proper planning purpose - Whether condition imposed bona fide or for some ulterior or extraneous purpose

First Respondent : Ms N Johnson QC & Ms C J Thatcher

Second Respondent : Ms N Johnson QC & Ms C J Thatcher

Bennett & Co v CLC Corporation [2001] WASCA 57

Canada Southern Railway Co v International Bridge Co (1883) 8 App Cas 723

Colonial Sugar Refining Co Ltd v Melbourne Harbour Trust Commissioners [1927] AC 343

Cooper Brookes (Wollongong) Pty Ltd v FCT [1981] HCA 26; (1981) 147 CLR 297

Durham Holdings Pty Ltd v NSW 75 ALJR 501

Falc Pty Ltd v State Planning Commission (1991) 5 WAR 522

Georgoussis v The Medical Board [1957] VicRp 98; [1957] VR 671

Hall & Co Ltd v ShorehambySea Urban District Council (1964) 1 WLR 240

Kirkness v John Hudson & Co Ltd [1955] AC 696

Marford Nominees Pty Ltd v State Planning Commission, unreported; SCt of WA; Library No 960047; 1 February 1996

Minister of Housing and Local Government v Hartnell [1965] AC 1134

Morrell v Mercantile Mutual Insurance (Australia) Ltd [1999] WASCA 250

Municipal Council of Sydney v Campbell [1925] AC 338

O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210

Ocean Reef (WA) Pty Ltd v Town Planning Board (1982) 2 SR (WA)

Perrymead Investments Pty Ltd v Western Australian Planning Commission (1996) 16 SR (WA) 181

Pointe Gorde Quarrying & Transport co Ltd v Sub-Intendent of Crown Land [1947] AC 565

Proctor v Brisbane city Council (1993) 81 LGERA 398

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28

R v Exeter City council; ex parte JL Thomas & Co Ltd [1991] 1 QB 471

R v Toohey; ex parte Northern Land Council [1981] HCA 74; (1980) 151 CLR 170

Re Minister for Immigration and Multicultural Affairs; ex parte Cohen [2001] HCA 10

Re Real Estate and Business Agents Supervisory Board; ex parte Cohen [1999] WASCA 47

Re Warden Calder; ex parte Cable Sands (WA) Pty Ltd (1998) 20 WAR 343

Westel Co-operative Ltd v Foodland Associated Ltd (1987) 5 ACLC 979

1 WALLWORK J: I agree with the reasons for judgment and the orders proposed by Olsson AUJ.

2 There is nothing I wish to add to his Honour's reasons.

3 SCOTT J: I have read in draft the reasons to be published by Olsson AUJ and I agree with his Honour's reasons.

4 OLSSON AUJ: This is an appeal from the decision of a single Judge of this Court dismissing an appeal by the appellant from a decision of the Town Planning Appeal Tribunal ("the Tribunal") dated 21 March 2001. It seeks to re-agitate certain issues of law which arose before the Tribunal in relation to the proper interpretation of provisions of the Town Planning and Development Act (the "TPD Act") and the Metropolitan Region Town Planning Scheme Act 1959 (the "Scheme Act").

5 I first turn to the relevant background facts, which are not in dispute.

6 On 11 May 1992, the appellant became the registered proprietor of an area of land known as Lot 1001 on Plan 17791. That land is on the coast at Singleton, north of Mandurah. It is known as the Bayshore Gardens Estate, which is, progressively, being subdivided and developed as a residential area with associated facilities.

7 The Metropolitan Region Scheme ("MRS"), created pursuant to the Scheme Act, was gazetted on 1 November 1963. It reserved a portion of Lot 1001 for parks and recreation. This included a strip 200 m deep, running the length of the foreshore frontage. No compensation has ever been paid to anyone in respect of that reservation.

8 On 13 October 1993 the respondent approved the subdivision of Part Lot 1001 into approximately 568 residential lots, a primary school lot, eight special development lots, a reserve for recreation of 5.452 hectares and a foreshore reserve of 21.775 hectares which is shown on the relevant subdivision plan as a reserve for recreation.

"a foreshore reserve to the satisfaction of the Minister for Environment, being shown on the Diagram or Plan or survey as a "Reserve for Recreation" and vested in the Crown under Section 20A of the Town Planning and Development Act (as

amended) such land to be ceded free of cost and without any payment by the Crown (Condition 19)."

10 For some reason, which is not presently apparent, that condition was ultimately waived, following certain negotiations in that regard.

11 On a succession of dates thereafter, commencing on 30 March 1994 and concluding on 26 June 1998, the respondent further approved a variety of additional subdivisions of Part Lot 1001.

12 It appears that no less than seven applications for subdivision were approved, none of which were subject to a condition such as that set out above. There was evidence to suggest that this may have been the product of an oversight on the part of the respondent "as the question of ceding the foreshore was never raised, or it was assumed that the ceding had taken place".

13 On 23 November 1999, the appellant lodged a further application to create two, so called superlots of 16.0602 hectares and 79.8756 hectares respectively.

14 The respondent approved the creation of those superlots on 17 May 2000, subject to the condition:

"That portion of Pt Lot 1001 to the west of the land zoned 'Urban' under the Metropolitan Region Scheme being shown on the Diagram or Plan of Survey as a 'Reserve for Recreation' and vested in the Crown under Section 20A of the Town Planning and Development Act, such land to be ceded free of cost and without any payment of compensation by the Crown. (Condition 1)."

15 The appellant appealed to the Tribunal against the imposition of the above condition (Appeal 29 of 2000).

16 A further approval was issued by the respondent on 7 September 2000 in respect of the proposed subdivision of a portion of the land to the south-east known as Rosebay Grove, Singleton, comprising 23 residential lots and a balance lot. This contained a similar condition and was also appealed against (Appeal 40 of 2000).

17 On the same date the respondent issued a separate approval for subdivision of a portion of the land to the south-west known as Foreshore Drive, Singleton into 46 residential lots and a balance lot. Once again this was subject to the same condition and was appealed against (Appeal 41 of 2000).

18 All three appeals were consolidated before the Tribunal.

19 The Tribunal, in reasons published by it, said that the condition sought to be impugned was expressly designed to have two effects.

20 The first was to bring the subject land within s 20A of the TPD Act. That section stipulates that, when a plan subject to such a condition is received into the relevant Department and approved for the purposes of the Transfer of Land Act 1893, the land to which that condition attaches shall thereupon vest in the Crown "without any conveyance, transfer or assignment or payment of any fee".

21 The second was to defeat the operation of Part V of the Scheme Act. That Part, relevantly, provides that compensation may be claimed for injurious affection to land that is reserved under the MRS. The condition was, the Tribunal said, intended to circumvent such an entitlement.

22 On 21 March 2001 the Tribunal dismissed the consolidated appeals.

23 The core grounds of appeal relied upon by the appellant before the Tribunal were expressed in these terms: -

"1 Condition 1 does not fairly and reasonably relate to the subdivision development of the appellant in that there is not a sufficient nexus between Condition 1 and the subdivision.

2 Condition 1 is so unreasonable that no reasonable planning authority could have imposed it in that the appellant is required by Condition 1 to cede the land free of cost.

3 Condition 1 is so unreasonable that no reasonable planning authority could have imposed it in that it requires the appellant to abandon its right to claim compensation for injurious affection caused by the creation of the foreshore reserve upon occurrence of an event referred to in section 36(3) of the Metropolitan Region Town Planning Scheme Act 1959.

4 The existence of the Reserve for Recreation has led to a substantial detriment or disadvantage being suffered by the appellant which would be compounded by a requirement that the land be ceded free of cost.

5 In any event Condition 1 is not a condition that was reasonable to impose as a matter of orderly and proper planning by reason of the matters referred to in grounds 1-4, alternatively each of those grounds.

6 Alternatively, Condition 1 is so unreasonable that no reasonable planning authority could have imposed it, alternatively, it is not a condition reasonable to impose as a matter of orderly and proper planning, in that the land required by Condition 1 to be ceded is an approximately 200 metre wide coastal foreshore reservation which is excessive in all the circumstances."

24 In its published reasons for decision, the Tribunal, having noted what it perceived to be the two express purposes of the condition appealed against, rejected a proposition that it was not open to the respondent, as a matter of law, to impose a condition under the TPD Act which had the effect of extinguishing a right to compensation which otherwise existed under the Scheme Act.

25 As to the merits of the appeal, it accepted that the test to be applied was that enunciated in Newbury District Council v Secretary of State for the Environment [1981] AC 578 ("Newbury"). To be valid, a condition must:

• fairly and reasonably relate to the proposed development; and

• be not so unreasonable that no reasonable planning authority could have imposed it (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223 ("Wednesbury").

26 It is not entirely clear as to what was concluded by the Tribunal as to the issue of planning purpose.

27 In the course of its discussion of the legal issues, the Tribunal commented:

"26. Balanced against this difficulty is the necessity that the Commission be able to impose a condition, in appropriate cases, that land be ceded free of cost upon subdivision. This necessity arises because of the legitimate community concern that a developer contribute to infrastructure costs to the extent permissible; a concept accepted by the High Court in Lloyd v Robinson [1962] HCA 36; (1962) 107 CLR 142 on the basis that the condition is the price for the privilege of subdivision."

28 As to the "reasonably related" issue, the Tribunal had this to say:

"43. The MRS reservation is approximately 200m. Counsel for the Appellant stated that were it not for the fact that the foreshore reserve has at all times been 200m approximately, the appellant would be appealing against a reserve wider than 100m. Commission Policy DC 6.1 'Country Coastal Planning Policy' although not directly applicable, provides in section 3.6 that a setback of 100m from a stable sandy shore is the guideline.

44. Two subdivision applications that are the subject of these appeals relate to land that is physically removed from the land proposed to be ceded. The foreshore is, of course, to the west but the creation of the superlot in Appeal 29 of 2000 is to the east as is the subdivision proposed in Appeal 40 of 2000. Appeal 41 of 2000 relates to land that abuts the foreshore. There remains further land to be subdivided upon which the condition could be again imposed.

45. There is no argument that can be advanced that the condition reasonably relates to the fact or effect of these subdivisions. Rather the condition relates to the entire land holding. If this is the case, the basis for the imposition of the condition is that it was imposed historically and, having not be [sic] effectuated, requires to be imposed again until it is fulfilled.

46. There was no argument that the land, the subject of the condition, should not be set aside for a foreshore reserve. The EPA accepted that part of the foreshore area should be protected in exchange for the development of land in the system 6 M107 recommendation. As well, the Appellant accepted the environmental condition that the land should be set aside for public use.

47. The issue to be resolved is whether, in a staged subdivision, a condition can be imposed on one stage that relates to the entire subdivision but not the parcel the subject of the condition. The three approvals here relate to land that is part of a program of subdivision and development that is being undertaken in accordance with a Comprehensive Development Plan approved by the Commission.

48. The subdivision of a stage of a larger development is not to be examined in isolation but as an aspect of the whole. A condition that relates to the whole can be imposed on all or any of the parts or stages because it reasonably relates to the entire subdivision, of which the stage is a component. This is especially so, as here, where the condition is in respect of open space of regional significant."

29 The decision of the Tribunal then simply concluded with the bald statement:

"Accordingly, the Tribunal finds that the condition serves a clear planning purpose, reasonably relates to the entire subdivision and is not unreasonable."

30 I take the Tribunal to have reasoned that, because the condition served a proper planning purpose, it could not be said to have breached the Wednesbury principle.

31 The appellant appealed against the decision to a single Judge of this Court on 17 July 2000, who dismissed that appeal. The grounds of appeal relied upon in relation to such dismissal were expressed in these terms:

1. in law in that her Honour found that the appellant had a mere contingent or inchoate right to compensation, pursuant to s.36 of the Metropolitan Region Town Planning Scheme Act ("MRTPSA"), with respect to the reservation under the Metropolitan Region Scheme ("MRS") of the appellant's land known as the Foreshore Reserve and that the respondent had power to impose the Condition (as defined in ground 4 below) to defeat the appellant's contingent or inchoate right. Her Honour should have held:-

1.1 the appellant had, at the time of the respondent's decisions to impose the Condition, a substantive vested right, alternatively a substantive right whether vested, inchoate or contingent, to compensation under the MRTPSA arising from the reservation under the MRS of the Foreshore Reserve, which right was property not to be expropriated without compensation by or under any other Act without a clear expression of legislative intent;

1.2 s.3 of the MRTPSA discloses a legislative intent that the appellant's substantive right under s.36 of the MRTPSA was not to be expropriated by a condition imposed under s.20 of the Town Planning & Development Act 1928; and

1.3 the power of the respondent under s.20 of the Town Planning & Development Act 1928 to impose conditions on an approval to subdivide land nearby to the Foreshore Reserve does not empower the respondent to expropriate, without compensation, the appellant's substantive right under s.36 of the MRTPSA;

2.1 that the Tribunal found, at paragraph [26], [27] and [29]-[49] of the Tribunal's reasons for decision, that the Condition was imposed for the purposes set out in those paragraphs of the Tribunal's reasons for decision;

2.2 alternatively, that the matters or purposes referred to in paragraphs [26], [27] and [29]-[49] of the Tribunal's reasons for decision constituted proper planning purposes justifying the Condition being imposed; and

2.3 further, that the appellant had to show that the Tribunal acted for an improper purposes;

3. in law in finding that the focus of the MRSTPA was to secure eventual public ownership of land reserved when her Honour should have found that the primary purpose of the MRTPSA was to provide for the reservation of areas of land in private ownership for certain public purposes and to compensate the private land owner adversely affected by the reservation when the private land owner suffered a crystallised loss due to the reservation;

4. in law in holding the Condition was valid, in circumstance where the Tribunal had found (which finding was not the subject of a cross appeal or notice of contention), that the intended effect, alternatively that the substantial intended effect, of the Condition imposed by the respondent on the appellant with respect to the Foreshore Reserve, namely that the 'portion of part lot 1001 west of the land zoned 'Urban' under the Metropolitan Region Scheme being shown on the Diagram or Plan of Survey as a 'Reserve for Recreation' be ceded to the Crown free of cost and without any payment of compensation by the Crown' (the 'Condition') was to defeat the operation of Part V (including s.36) of the MRTPSA and deprive the appellant of the opportunity of claiming compensation under the MRTPSA after the land is vested to the Crown. Her Honour should have held that the Condition was invalid as:-

4.1 the Condition was beyond power for the reasons in grounds 1 and 3 above;

4.2 further or alternatively, the reservation of the Foreshore Reserve under the MRS prevented use or development of that land inconsistently with the reservation and, consequently, the Condition had no valid planning purpose and, rather, had the sole purpose of preventing the appellant ever claiming compensation under s.36 of the MRTPSA. Further or alternatively, in light of the matters in grounds 2 and 3, the Condition can not be for a valid planning purpose;

4.3 further or alternatively, the Condition did not fairly and reasonably relate to the development by the appellant of the land the subject of the development applications as the Foreshore Reserve was already reserved for public purposes and, consequently, no planning purpose was achieved by requiring the appellant to cede the Foreshore Reserve to the Crown;

4.4 further or alternatively, the Condition was so unreasonable that no reasonable planning authority could have imposed the Condition."

32 I first turn to the relevant provisions of the Scheme Act and the TPD Act.

33 In doing so a convenient commencement point is a consideration of s 3 of the former which stipulates that the Scheme Act:

"shall be construed in conjunction with the [TPD Act] as if the provisions of this Act were incorporated with and formed part of that Act, but where the provisions of this Act are in conflict or are inconsistent with the provisions of that Act, the provisions of this Act prevail to the extent to which they are so in conflict or inconsistent."

34 Inter alia, the Scheme Act envisaged and authorised the preparation of the MRS, which was to be evolved in accordance with the procedure set out in Part III of the statute. When ultimately approved by the Governor, it was tabled before Parliament.

35 Part V of the Scheme Act contains provisions related to compensation, betterment and acquisition. It expressly incorporates the provisions of s 11 of the TPD Act as to entitlement to compensation. That section stipulates that any person whose land is injuriously affected by the making of a town planning scheme shall:

"if such person makes a claim within the time, if any, limited by the scheme (such time not being less than 6 months after the date when notice of the approval of the scheme is published in the manner prescribed by the regulations), be entitled to obtain compensation in respect thereof from the responsible authority."

36 The reservation by the MRS of the foreshore frontage strip potentially enlivened the provisions of ss (3) and (4) of s 36 of the Scheme Act.

"(3) Subject to subsection (4), 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 grants permission to carry out development on the land subject to conditions that are unacceptable to the applicant."

38 The qualification in ss (4) is expressed in these terms:

"(4) Before compensation is payable under subsection (3) -

(a) where the land is sold, the person lawfully appointed to determine the amount of the compensation shall be satisfied -

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

(ii) that the owner before selling the land gave notice in writing to the responsible authority of his intention to sell the land; and

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

(b) where the responsible authority refuses an application made under the Scheme for permission to carry out development on the land or grants permission to carry out development on the land subject to conditions that are unacceptable to the applicant, the person lawfully appointed to determine the amount of compensation shall be satisfied that the application was made in good faith."

39 The nature of the entitlement to compensation pursuant to those statutory provisions is the decrease in the market value of the land caused by the reservation and the inability of the owner to use the land for purposes conflicting with the reservation (Bond Corporation Pty Ltd v Western Australian Planning Commission [2000] WASCA 257 par [34] ("Bond")).

40 A core issue arising on this appeal is whether that right can be extinguished by the imposition, pursuant to s 20 of the TPD Act, of a condition of planning approval, of the nature of that adverted to in s 20A of the same statute.

41 So far as is material for present purposes, the latter provision stipulates that:

"(1) When the Commission has approved, under this Act, a subdivision of land subject to the condition that certain portions of that land shown on a diagram or plan of survey relating to the subdivision shall vest in the Crown for the purpose of conservation or protection of the environment or a waterway, pedestrian accessway, right-of-way or reserve for water supply, sewerage, drainage, foreshore management, waterway management, or recreation, if, after section 98 of the Transfer of Land Amendment Act 1996 comes into operation, the diagram or plan or subdivision of the land as so approved is received in the Department within the meaning of the Transfer of Land Act 1893 or the Registry of Deeds and is approved for the purposes of the Transfer of Land Act 1893, the Registrar of Titles or the Registrar of Deeds shall, in accordance with the condition, vest in the Crown any land shown on the diagram or plan as being reserved for the purpose of a waterway, pedestrian accessway, right-of-way or reserve for water supply, sewerage, drainage, foreshore management, waterway management, or recreation without any conveyance, transfer or assignment or the payment of any fee."

42 Section 20A is manifestly intended to achieve an administrative, machinery purpose only. Any power to require a developer to cede land necessarily derives from the provisions of s 20(1)(a). (Lloyds & Ors v Robinson & Anor [1962] HCA 36; (1962) 107 CLR 142 ("Lloyds")).

43 On the hearing of the appeal, Mr Solomon, counsel for the appellant, addressed the details of legislative scheme arising from the interaction of the Scheme Act and the TPD Act.

44 He submitted that the learned Judge had, in applying the principle stemming from Clissold v Perry [1904] HCA 12; (1904) 1 CLR 363 at 373 ("Clissold") (that statutes "are not to be construed as interfering with vested interests unless that intention is manifest"), inappropriately sought to apply the relevant dictum by reference to characterisations derived from the law of trusts. Hence the discussion, in her published reasons, of the respective legal concepts of vested, contingent and inchoate rights or entitlements.

45 The learned Judge concluded that the appellant could not rely on the Clissold principle and the associated presumption against acquisition without compensation for two reasons, namely -

(1) At the time of the imposition of the impugned condition, the appellant did not have a vested right to payment of compensation. As she put it, on the happening of a triggering event under s 36(3) of the Scheme Act, a vested right to claim compensation arises. If and when a claim is made within the prescribed six-month period, a vested right to payment of compensation arises; and

(2) Regardless of how the appellant's rights are characterised, the statutory presumption does not limit the scope of the appellant's power in s 20(1)(d) of the TPD Act to impose the relevant condition, for the reasons given by the High Court in Lloyd.

46 With respect, it seems to me that neither of those propositions can be supported.

47 Clissold stands as authority for the well-known principle of statutory construction that, where a statute confers specific, definite rights on a party, those rights are not to be deemed to be taken away by some other statutory provision unless such an intention is manifest.

48 That case related to a situation in which a person had been in adverse possession of land for in excess of 10 years. Under the relevant statute this produced the result that he was "deemed to have been lawfully entitled to such lands until the contrary [was] shown to the satisfaction of the court" by some person with a higher title, such as the legal owner ie, as was said in the headnote to the case, he had "an inchoate possessory title". The Crown took steps to compulsorily require the land and this extinguished the possessory rights of the occupant. A question arose as to whether he was entitled to compensation, as a person having an interest in the land. The Crown argued that he had no compensable interest, inasmuch as his title was not complete. He did not have a vested interest in the land.

49 Griffith CJ, with whom the other Judges concurred, pointed out that, by virtue of statute, the occupant's possessory entitlement held good "against all the world except the real owner". The legislature was not to be taken, by the enactment of the compulsory acquisition legislation, to "swallow up" the entitlements of the occupant resulting from his 10 years of occupation.

50 On a careful reading of the judgment of the learned Chief Justice, it is clear that, when he spoke of "vested interests" he was speaking of what he later referred to as "certain definite rights" - in that case a right to maintain his right to continued possession, against all comers other than the legal owner, of the subject property.

51 The reasoning of Ipp J in Bond reflects a similar process of reasoning, as does the approach of their Lordships in Hughes and Anor v Doncaster Metropolitan Borough Council [1991] 1 AC 382 at 395, and that of Hope JA in New South Wales Aboriginal Land Council v Minister Administrating The Crown Lands (Conciliation Act) and the Western Lands Act (1988) 14 NSWLR 685 at 694 - 696.

52 Translated into the context of the present case, such a concept requires initial consideration of the effect of s 36 of the Scheme Act. The learned Judge considered that the effect of the legislation was to confer what she described as only an inchoate or contingent right to compensation. A vested right to actually claim the compensation only arose when a s 36(3) triggering event occurred. (Cf Cape Developments Pty Ltd v City of South Barwon [1982] VicRp 102; [1982] VR 1011 at 1018 - 1019)

53 At the end of the day it becomes important to avoid being ensnared by pure semantics. As Mr Solomon put it, s 11 of the TPD Act expressly conferred on the appellant a positive, unequivocal, statutory right to compensation as a consequence of the MRS scheme reservation, actual enjoyment of which was deferred until the relevant event stipulated in s 36(3) of the Scheme Act took place.

54 In my opinion, the s 11 right, as expressly recognised by and incorporated into the ambit of operation of the Scheme Act, was undoubtedly a specific, definite, substantive right of the type adverted to by Griffith CJ in Clissold. (Cf Esber v The Commonwealth of Australia and Anor [1992] HCA 20; [1991-1992] 174 CLR 430 at 440)

55 I find it impossible to accept that, having conferred such a specific statutory right, the legislature had in mind that, per medium of the general power of imposing conditions of approval conferred by s 20(1)(a) of the TPD Act, the respondent could, in its discretion, attach a condition to an approval to subdivide which directly negated that right by extinguishing it. If that was the intention, then one would have expected such a situation to have been made abundantly plain, particularly having regard to the harmonising provision in s 3 of the Scheme Act.

56 I read nothing in Lloyd which runs counter to such a conclusion. As appears from the joint judgment in that case at p 154, the Court was there concerned with the general ambit of operation of s 20 of the TPD Act (as that statute operated in 1960), considered separately and apart from the Scheme Act as related to the MRS, as it stood on the gazettal of the MRS.

57 The High Court merely pointed out that, considered on its own (and not in the context of the operation of s 36 apropos the MRS), s 20 conferred on landowners, otherwise deprived by the statute of the proprietary right to subdivide without approval, a capacity to obtain approval "by complying with conditions which might be imposed, that is to say, which might be imposed bona fide within limits which ... were indicated by the nature of the purposes for which the Board was entrusted with the relevant discretion". As the majority went on to comment:

"If the Board has performed its statutory duty by giving approval to the subdivision subject only to conditions imposed in good faith and not with a view of achieving ends or objects extraneous to the purposes for which the discretion exists, the inescapable effect of the Act is that the landowner must decide for himself whether the right to subdivide will be bought too dearly at the price of complying with the conditions."

58 It is stating the obvious to say that those general pronouncements must be read and applied in light of and subject to the specific legislative developments which followed it. There is nothing in them which in any way runs counter to the reasoning which I have above espoused.

59 It follows that I must respectfully disagree with the relevant conclusions come to by the learned Judge. I consider that the purported exercise by the respondent of a s 20 power, in the manner adopted in the instant case, was beyond power.

60 If I am incorrect as to that, it remains to consider whether, as asserted by the appellant, the condition imposed by the respondent is, in any event, invalid within the criteria articulated in Newbury.

61 Although counsel traversed various aspects of those criteria, I am of the opinion that only one of them is critical for present purposes, namely, whether the evidence indicates that the condition imposed can be said to have a relevant, legitimate planning purpose.

62 As to this, certain fundamental principles need to be borne firmly in mind.

63 It was reiterated in Marshall v Director-General, Department of Transport (2001) 180 ALR 351 par [21], that a power such as that of imposing the impugned condition must be exercised bona fide for the relevant statutory purpose. A s 20 condition must be imposed for a clear planning purpose and not some ulterior or extraneous purpose (Newbury at 599; Renstone Nominees Pty Ltd v Metropolitan Region Planning Authority (1986) 21 APAD 12 at 33). If the condition is imposed for an ulterior or extraneous purpose, the exercise of the power will not be bona fide (Thompson and Ors v The Council of the Municipality of Randwick [1950] HCA 33; [1950] 81 CLR 87 at 106 ("Thompson")). Moreover, it will be an abuse of power if there is more than one purpose, but an ulterior purpose is a substantial purpose (Thompson at 106).

64 In prosecuting the appeal as to the merits, the appellant propounded the following baseline propositions:

• Where land has been reserved for parks and recreation under the MRS, it cannot be used for a purpose inconsistent with the reservation, because all town planning schemes are overridden (the Scheme Act s 34, s 35(1) and s 35A). Subject land cannot be developed without the approval of the respondent.

• Ceding of land reserved as a foreshore reserve under the MRS is therefore not required in order to reserve the land for that use. It achieves no planning purpose not already achieved by the original reservation.

• Vesting under s 20A is also not required in order to reserve land for a foreshore reserve, when it is already reserved for that purpose.

• It follows that there was no separate, substantive planning purpose in imposing the condition, beyond a desire by the respondent to remove a statutory right to compensation; and neither the Tribunal nor the Judge appealed against identified any.

65 So it was that the appellant argued that the respondent had exercised its power for an impermissible purpose. It was "bound to treat the application for planning approval ... on its merits, and not in such a way as to enable the [Crown] to acquire the land for less or more easily" (Moneywood Pty Ltd v Salamon Nominees Pty Ltd [2001] HCA 2; (2001) 177 ALR 390 at [175]). That was, in fact, the aim, or at least a substantial aim, of the imposition of the impugned condition. As such, it was improper (Thompson at 104).

66 Moreover, it was said, such an approach is inconsistent with the concept of s 3 of the Scheme Act and what fell from this Court in Bond.

67 In my opinion, this case falls to be resolved, as to the merits, by posing and answering two successive questions, namely -

(1) Did the evidence before the Tribunal establish the existence of any, and if so what, planning purpose, which could found the imposition of the impugned condition?

(2) If that question be answered in the affirmative, was that condition imposed bona fide for such a planning purpose?

68 The first question necessarily requires consideration of the issue as to what constitutes a planning purpose, within the concept espoused by their Lordships in Newbury. Walsh J expressed the view, in Allen Commercial Constructions Pty Ltd v The Council of the Municipality of North Sydney [1970] HCA 42; [1970] 123 CLR 490 that, in the context of a planning scheme, the purpose can conveniently be described, in accordance with the expression used by Lord Jenkins in Fawcett Properties Ltd v Buckingham County Council [1961] AC 636 at 684 ("Fawcett"), as being "the implementation of planning policy", provided that it is borne in mind that it is from [the appropriate statutory source] and not from some preconceived general notion of what constitutes planning, that the scope of planning policy is to be ascertained. What fell from Walsh J was affirmed by the High Court in the later case of Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; [1998] 195 CLR 566 at 577.

69 By way of contrast, in Western Australian Planning Commission v Erujin Pty Ltd [2001] WASCA 139 at par [47], Miller J posed the question as to whether a condition imposed "was supported by relevant planning considerations". I do not take him to have been applying a test different from that propounded in Fawcett.

70 In Love v Western Australian Planning Commission [1999] WATPAT 4 at par [32], the Tribunal considered that the requirement that a condition have a planning purpose has two facets. The first involves an inquiry as to whether the type of condition imposed bears a relationship to planning theory and policy. The second necessitates a further inquiry to determine if the condition, in the particular circumstances of the case, actually fulfils a proper planning purpose.

71 In other words, the Tribunal, quite correctly, appreciated that it is one thing to be able to characterise, in conceptual terms, the topic of a condition as, prima facie, being related to a planning purpose. It is entirely another to conclude that it is in fact required to actually fulfil such a purpose, in the circumstances under consideration. Interestingly, for present purposes, the example ventured by the Tribunal was a condition requiring ceding of open space where, patently, that was unnecessary for the orderly and proper planning of a locality of which the relevant subdivision was a part.

72 In the present case, the relevant policy is, by virtue of the Scheme Act, to be derived from the MRS which mandates the principles of orderly development to be applied to the subject land.

73 It is to be noted that there was some difference in approach, as to the identification of relevant planning purpose by the Tribunal, on the one hand, and the learned Judge, on the other.

74 It is not easy to follow the reasoning process of the Tribunal in that regard. At the outset of its reasons, the Tribunal made the unequivocal statement that, in its view, the impugned condition was designed to have the two effects earlier recited, ie, to enliven the machinery provisions contained in s 20A of the TPD Act (thereby facilitating the mechanical transfer of title to the foreshore reserve to the Crown) and also "to defeat the operation of Part V" of the Scheme Act, (thereby rendering nugatory any right, in accordance with s 36 of the Scheme Act, to compensation for injurious affection).

75 So far as I can determine, the only other reference to what was considered by the Tribunal to be a planning purpose appears to be what is said in par 26 of its reasons, which I have earlier recited, ie, a perceived necessity for the respondent to be able to impose a condition, "in appropriate cases", that land be ceded free of cost on subdivision "because of the legitimate community concern that a developer contribute to infrastructure costs to the extent permissible".

76 Having so pronounced, the Tribunal then appears to have directed its attention to the quite different issue as to whether the condition imposed was reasonably related to the subject land.

77 With all due respect, I find it impossible to perceive how the Tribunal could, on its own reasoning, fairly have arrived at its final bland pronouncement that "Accordingly, ... the condition serves a clear planning purpose".

• the reference to s 20A of the TPD Act is to a mere machinery and administrative process, which has nothing whatsoever to do with the implementation of planning policy, in the sense adverted to in Fawcett;

• the object of avoiding a requirement to pay compensation otherwise payable pursuant to the provisions of the Scheme Act, likewise, cannot possibly be characterised as the implementation of the planning policy (Cf Newbury at 608); and

• the concept expressed by the Tribunal in par 26 of its reasons also fails the test, because it merely reflects a general notion of what constitutes planning, does not implement planning policy established by the MRS and, in fact, was counter to the expressed policy of the Scheme Act.

79 There was, thus, simply no basis in the reasons of the Tribunal to support its ultimate conclusion.

80 The learned Judge expressed a different perception of the situation revealed by the established facts and of her analysis of the Tribunal reasons.

"The Tribunal is saying nothing more than it infers from the wording of the Condition that it was designed to achieve the stated effects. The Tribunal then goes on in its reasons to test the validity and conduct a merits review of the Condition. In particular, it makes an assessment that:

(a) it is necessary for the Commission in appropriate circumstances to impose a vesting condition because of the legitimate community concern that a developer contribute to infrastructure cost to the extent permissible on the basis that the condition is a price for the privilege of subdivision (par 26);

(b) the Condition does not take away a future right to compensation but requires the giving up of the reserved land free of cost which is the effect the Condition has on an owner of unreserved land (par 27);

(c) having considered the history of the subdivision (set out earlier in these reasons) and the relationship between the relevant land and the Condition, the Condition had a clear planning purpose (pars 29 to 49)."

82 With respect, I have difficulty with that analysis, if it is intended, as Ms Johnson QC, senior counsel for the respondent contends, to demonstrate the existence of a relevant planning purpose.

83 It seems to me that (a) and (b) have already been dealt with above and no more need be said about them. They do not go to the implementation of a relevant planning policy at all.

84 As to (c), I am respectfully unable to understand how the paragraphs referred to identify any planning purpose. Paragraphs 29 to 42 inclusive do no more than recite the factual history leading up to the present situation, in a form somewhat more amplified than the summary which I have attempted. Paragraphs 43 to 49 inclusive assume the existence of a planning purpose and deal with the legal issue as to whether the condition imposed can properly be said to reasonably relate to the subject land, having regard to the fact that it may not be contiguous with the foreshore reserve. As the Tribunal said, in conclusion, on this topic -

"The issue to be resolved is whether, in a staged subdivision, a condition can be imposed on one stage that relates to the entire subdivision, but not the parcel the subject of the condition."

85 Later in her reasons, at par [86], the learned Judge separately expressed the view -

" ... the focus of the Scheme Act and the MRS is to secure (eventual) public ownership of land reserved for public purposes. That is a planning purpose. That same purpose of achieving public ownership of land to be used for public purposes is achieved by the Condition. It is no less a proper planning purpose because it is achieved at an earlier time as part of subdivisional approval of land of which the reserve forms part."

86 She arrived at that conclusion following a consideration of the Second Reading Speech to the MRS Amendment Act 1962, the 1962 MRS Report and the provisions of the Scheme Act. She felt that, in their totality, they disclosed that the reservation provisions generally imply eventual acquisition of the land by means of funding established under s 38 of the Scheme Act; a reservation in the MRS is not an acquisition (in that reserve land can be developed with consent); in the event of a claim for compensation in accordance with the Scheme Act the Authority can elect to acquire the property in lieu of paying compensation; and limited funds meant that acquisition of reserved land had to be spread over a very long period.

87 As it seems to me, there are several obvious ripostes to such reasoning.

88 First, with respect, I consider it questionable that the source material justifies the conclusion arrived at. There is simply no compelling reason to conclude from it that the focus is necessarily upon Crown acquisition of ownership of all, or any specific, reserve land. It seems to me that, rather, the focus is on ensuring that adequate and appropriate reserves are created to satisfy proper planning objectives and that, if a compensation claim is made in accordance with the statute, the Crown can elect to acquire actual ownership, rather than pay compensation merely to preserve a status quo. The relevant decision by the Crown would, no doubt, be a reflection of the quantum of compensation likely to be payable.

89 Second, whilst it is true that consent could be given to development within the foreshore reserve, it is quite unrealistic to imagine that this would occur unless the respondent was satisfied that development would be in sympathy with and enhance the purposes for which the reserve was created (eg by means of construction of public facilities such as toilets, cark parks and the like). Mr Solomon repeatedly and reasonably posed the rhetorical question, "Why would the Crown wish or need to take further action to secure the existence of a reserve which has already been brought into existence by the MRS?"

90 Finally, the shortage of acquisition funds, is scarcely any basis for supposing that the legislature envisaged creation of the somewhat Gilbertian situation that it would confer a specific statutory right, by interaction of s 11 of the TPD Act and s 36 of the Scheme Act, and, at the same time, leave it open to the respondent, by exercise of a general power of imposing conditions on subdivision applications, to effectively negate that right.

91 I am unable to accept the propositions either that the focus of the Scheme Act and the MRS is as stated, or that it can fairly be said that it was a planning purpose, in the Fawcett sense, merely to accelerate possible Crown ownership in the manner adumbrated. Such a concept is not, in the circumstances before the Court, pitched at the orderly development of the locality and preservation of the amenity of the locality at all. Rather, it simply manifests an administrative desire to contain monetary cost. Its essential thrust is based on fiscal, rather than planning, objectives.

92 In my view, at the end of the day, not only was no planning purpose identified either before the Tribunal or in the court below, but also there was simply no evidence of such a purpose ever placed before the Tribunal.

93 It follows that the appellant was entitled to succeed on the merits in any event and the Tribunal erred in dismissing its appeal.

94 If I am incorrect in that assessment and some planning purpose was established, it finally becomes necessary to address the question as to whether the impugned condition was imposed, bona fide, for that planning purpose.

95 As the Tribunal correctly identified, there can be no doubt that a salient object of the respondent, in imposing the condition, was to circumvent the potential operation of s 36 of the Scheme Act, in a situation in which the requisite reserve already existed under the MRS. Mr Solomon quite correctly declaimed that, in essence, the condition, in terms, did nothing at all to achieve any actual creation of a foreshore reserve, the existence of which, it was conceded, was a desirable planning aim. That reserve had actually existed since the approval of the MRS in 1963. The condition did no more than seek to enliven s 20A and attempt to abrogate the existing right to seek compensation in accordance with s 36 of the Scheme Act. That was the conclusion of the Tribunal and the only inference which could reasonably be drawn in the circumstances.

96 At the very least, the Tribunal reasons evidenced, by clear inference, the existence of a major ulterior or extraneous purpose - namely to avoid a compensation liability to the appellant, conferred on the latter by statute. The reasoning in Newbury and Thompson inexorably leads to the conclusion that, in the circumstances, the imposition of the impugned condition cannot be regarded as the bona fide exercise by the respondent of its powers for a legitimate planning purpose.

97 Various other issues were addressed by counsel in the course of the appeal, but it is unnecessary to review them.

98 The foregoing conclusions inevitably lead to the result that this appeal must be allowed. The decision of the Tribunal should be set aside and an order allowing the consolidated appeals substituted for it. I would hear counsel as to the precise manner in which that order ought to be expressed.

Region Town Planning Scheme Act 1959

Development Act 1928

Land Amendment Act 1996

Region Town Planning Scheme Act](/cgi-bin/viewdoc/au/legis/wa/repealed_act/mrtpsa1959423/) Amendment Act 1962

Planning and Development Act 1928

Temwood Holdings Pty Ltd v Western Australian Planning Commission & Anor [2002] WASCA 10

At a glance

Court

Decision date

Before

Catchwords

Source

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Judgment (179 paragraphs)

Temwood Holdings Pty Ltd v Western Australian Planning Commission & Anor [2002] WASCA 10 (1 February 2002)

Parties

Legislation Cited (7)

Cases Cited (11)