BETWEEN : WESTERN AUSTRALIAN PLANNING COMMISSION

BETWEEN : WESTERN AUSTRALIAN PLANNING COMMISSION

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : LEITH -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2014] WASC 499

Town planning - Planning scheme - Injurious affection - Compensation - Whether compensation available to person who subsequently purchased property from owner at the time scheme came into effect

Metropolitan Region Town Planning Scheme Act 1959 (WA), s 36

Planning and Development Act 2005 (WA), s 173, s 174, s 176, s 177, s 178, s 179, s 181

Town Planning and Development Act 1928 (WA), s 11

Western Australian Planning Commission Act 1985 (WA), s 33

First Respondent : Mr P D Quinlan SC & Mr P McQueen

Second Respondent : Mr P D Quinlan SC & Mr P McQueen

Attorney General (WA) v Schoombee [2012] WASCA 29

Daniele v Shire of Swan (1998) 20 WAR 164

Kettering Pty Ltd v Noosa Shire Council [2004] HCA 33; (2004) 78 ALJR 1022

Leith v Western Australian Planning Commission [2014] WASC 499

Marshall v Director General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603

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

University of Western Australia v City of Subiaco (1980) 52 LGRA 360

Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 201 ALR 260

Wardley Australia Limited v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514

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

1 There are two appeals before the court. Each appeal is from a decision of Beech J determining a question of law presented to the court in the form of a Special Case. The question of law presented for his determination was whether a person, who was not the registered proprietor of land at the time the land was reserved for a public purpose under a planning scheme made pursuant to the provisions of the Planning and Development Act 2005 (WA) (the PD Act), is entitled to compensation for injurious affection where an application for approval to develop the land is, by reason of the reservation, refused or granted subject to conditions that are unacceptable to the applicant.

2 Beech J answered the question affirmatively in each case.[1] The Western Australian Planning Commission (the WAPC) appeals from those decisions, and asserts that the question should be answered negatively in each case. For the reasons which follow, Beech J was correct to answer the question affirmatively, and each appeal should be dismissed.

3 Southregal Pty Ltd and Mr Wee are together the registered proprietors of land, part of which has been reserved for a public purpose - namely for regional open space, under the provisions of the Peel Region Scheme (the PRS), which is a planning scheme made pursuant to the provisions of the PD Act. Southregal Pty Ltd and Mr Wee were not the registered proprietors of the land at the time it was reserved for that public purpose. Mr Trevor Leith is also the registered proprietor of land that has been reserved for regional open space under the PRS. Like Southregal Pty Ltd and Mr Wee, he was not the registered proprietor of that land at the time it was reserved for regional open space under the PRS. Each of Southregal Pty Ltd and Mr Wee on the one hand, and Mr Leith on the other, applied for approval to develop the land which had been reserved for regional open space. Each application was refused because of the reservation. Each then claimed compensation pursuant to the provisions of the PD Act which I will set out below. WAPC rejected each claim on the basis that neither claimant was the owner of the relevant land at the time it was reserved for a public purpose, and that compensation under the PD Act was only available to the owners at the time of the reservation.

4 At the time the relevant land was reserved for a public purpose, Southregal Pty Ltd and Mr Wee had entered into a contract to buy the land. Settlement of that transaction had not occurred at the date of reservation. If the question of law presented by the parties is answered as WAPC contend, a question would then arise as to whether the interests of Southregal Pty Ltd and Mr Wee as at the date of reservation were sufficient to confer an entitlement to compensation. That question need not be resolved if the question is answered as Beech J determined. The parties agreed that this issue should be deferred for future consideration and determination, if necessary. No such issue arises in the case of Mr Leith.

5 Each of the claimants for compensation (collectively 'the claimants') commenced proceedings in the Supreme Court asserting their entitlement. As I have noted, in each case it was suggested by the parties, and the court directed, the preparation of a Special Case presenting a question of law to the court for its determination. After some contention between the parties with respect to the precise formulation of the question, the question of law formulated and determined by Beech J was:

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.

6 The PD Act provides a system for land use planning and development.[2] The system provided by the Act has various components, including components relating to the promulgation of planning schemes of various kinds[3] which, when promulgated, control the use and development of land, and which generally have the force of law.

7 In each of the cases before the court, the reservation of the relevant land for public purposes occurred prior to the commencement of the PD Act. However, for reasons which it is unnecessary to chronicle, the entitlements of the current registered proprietors of the relevant land with respect to compensation for any injurious affection caused by that reservation are governed by the provisions of the PD Act.[4]

8 In order to address arguments advanced on behalf of the appellants, later in these reasons it will be necessary to undertake a detailed historical review of Western Australian legislation dealing with the provision of compensation to landowners affected by controls placed upon the use and development of land for town planning purposes.[5] However, for present purposes it is sufficient to set out the applicable provisions of the PD Act:

(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. 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.

9 The critical issue for determination concerns the proper construction of s 173 and s 177 read in the context of the other provisions of the relevant Division and the PD Act as a whole. In particular, the question is whether s 177(2)(b) has the effect that a person who was not the owner of land at the time it was reserved for public purposes, but who acquired the land by purchase after the reservation, and who was the owner at the time an application for approval to develop the land was, by reason of the reservation, refused or granted subject to conditions that are unacceptable to the applicant, has an entitlement to compensation for injurious affection, provided that compensation for injurious affection arising out of the relevant reservation has not previously been paid. The claimants contend that the section has this effect by its natural and ordinary meaning. WAPC contends primarily that when the section is read in the context of s 173(1), the only persons who are entitled to obtain compensation pursuant to s 177(2)(b)[6] are those who were owners of the land at the date of reservation. WAPC contends in the alternative that s 177(2)(b) extends the class of persons entitled to compensation only to persons who were not owners at the date of reservation, but who have become owners by some means other than purchase - such as by gift or inheritance.

Western Australian Planning Commission v Temwood Holdings Pty Ltd

10 The same issue arose, albeit somewhat indirectly, in the context of relevantly identical legislation in Western Australian Planning Commission v Temwood Holdings Pty Ltd.[7] Unfortunately, the four members of the High Court who expressed a view on the question were evenly divided as to its answer.

11 The circumstances giving rise to that case were as follows. In 1963 a strip of land approximately 200 m wide running along the foreshore at Singleton, a beachside development south of Perth, was reserved for the public purpose of 'parks and recreation area' by the Metropolitan Region Scheme (the MRS), which was promulgated pursuant to the provisions of the Metropolitan Region Town Planning Scheme Act 1959 (WA) (the MRS Act). In 1992 the land was sold to a developer, Temwood Holdings Pty Ltd (Temwood). Temwood lodged various applications with WAPC for approval to subdivide land other than the portion reserved under the MRS. WAPC purported to approve those applications subject to conditions which included a condition that property in the foreshore reserve be vested in the Crown 'free of cost and without payment of compensation'. Temwood appealed against the imposition of that condition to the Town Planning Appeal Tribunal, and after the failure of that appeal, to the Supreme Court of Western Australia. The latter appeal was dismissed at first instance, but on appeal again was upheld on the basis that Temwood had a right to compensation for injurious affection arising from the reservation, and it was beyond the power of WAPC to impose a condition on the approval of subdivision of land which had the effect of negating that right.

12 WAPC appealed to the High Court which, by a majority of 3:2, upheld the appeal and determined that the condition attached to the subdivisional approval was validly imposed.

13 The question of whether Temwood was entitled to compensation in respect of the injurious affection of the foreshore reserve, notwithstanding that it was not the owner of the land at the time it was reserved, was governed by s 11 of the Town Planning and Development Act 1928 (WA) (the TPD Act) and s 36 of the MRS Act. Section 11(1) of the TPD Act was in terms relevantly identical to s 173(1) of the PD Act, and s 36(3) and (3a) of the MRS Act were in terms relevantly identical to s 177(1) and (2) of the PD Act.

14 In their joint judgment, Gummow and Hayne JJ considered that there was a threshold issue which had to be addressed, even though it had not been considered at any point in the proceedings prior to the appeal to the High Court. That point concerned whether Temwood did in fact have an entitlement to claim compensation which would be lost by the imposition of the condition of subdivisional approval. Their Honours concluded that Temwood had no such right.

15 Their Honours placed emphasis upon the conferral of the entitlement to compensation upon persons whose land or property was injuriously affected 'by the making'[8] of the relevant planning scheme. In their Honours' view, Temwood had no land which was injuriously affected by the making of the MRS in 1963.

16 Their Honours rejected Temwood's submission that s 36(3) of the MRS Act[9] had the effect that any entitlement to compensation was deferred until the later of either the first sale following reservation, or refusal of a development application or grant of permission subject to unacceptable conditions. Their Honours considered that the subsection should be construed as 'treating the deferral of the entitlement to payment as terminated upon the first to occur of first sale or development refusal'.[10]

17 Their Honours considered that this construction was supported by the fact that the loss in value arising from the reservation of the land did not become real or tangible until either the first sale after reservation, or the refusal of development as a result of reservation. They also relied upon a portion of the second reading speech in the Legislative Council at the time s 36(3) of the MRS Act was introduced, to support the proposition that the legislative scheme for compensation was intended to protect the owner at the time of reservation, whereas subsequent purchasers who would or should be aware of the scheme provisions at the time of purchase would not be at the same disadvantage as the original owner.[11]

18 Their Honours also considered that s 36(3a) of the MRS Act[12] supported their construction because, in their view, the reference to the payment of compensation to the person who was the owner of land at the date of the application for development approval 'accommodates such special positions as the death by the owner before any sale and the making of a development application by those volunteers taking the land by testamentary or intestate succession from that owner'.[13] In their view, that provision had no application where there had been a sale by the owner at the time of reservation prior to the application for development approval.

19 McHugh J took a contrary view. In his view, s 36(3a)(b)[14] of the MRS Act expressly conferred an entitlement to compensation upon the owner of land at the date of an application for development approval that was refused or granted subject to unacceptable conditions, irrespective of whether that person was the owner at the time of reservation. In his Honour's view:[15]

It is impossible to escape the conclusion ... that s 36(3a)(b) applies to a subsequent owner, and there is no reason for confining the class of subsequent owners to those who have obtained ownership other than by way of sale.

20 McHugh J applied this view of s 36(3a)(b) of the MRS Act to conclude that the reference to 'any person' in s 11(1) of the TPD Act[16] did not require that the owner of the property the subject of a reservation be the same owner as the person who owned the property at the time of the making of the scheme, nor, in his view, should the words 'affected by the making of a town planning scheme' be given a temporal connotation.[17]

Thus, the terms of s 36(3a)(b) point irresistibly to the conclusion that a person who has bought the affected land and whose subsequent development application is rejected or approved subject to unacceptable conditions may be entitled to compensation. The words "owner of the land at the date of application" would have little scope for operation unless this was so. Section 36(3a)(b) would operate only in the limited class of case where the owner at the date of reservation made an application for development or where the land had been conveyed to the applicant other than by sale - for example, by will or operation of law. This is such an unlikely construction that it must be rejected. On the construction of s 36(3a) that I favour, par (b) of that sub-section must be regarded as giving an independent claim of compensation unrelated to the fact of ownership at the date when the Scheme was made.

Moreover, once it is accepted that s 36 in combination with s 11 confers two independent rights, there is no reason why one right should expire because the other right to compensation was not pursued. Thus, where land is reserved under a town planning scheme, upon rejection of a development application or approval subject to conditions unacceptable to the applicant, a claim arises. If the claim lapses, however, for want of prosecution, I see no reason for holding that, upon the first sale of the land, a claim for compensation does not arise. And that is so, whether the rights subsist in different persons or the same person. Section 36(3a) declares that compensation is payable only once. It does not declare that both of the independent rights conferred lapse if one of them is not pursued after its triggering event occurs.

Accordingly, although Temwood had no presently subsisting, vested, deferred or contingent right to compensation under the Metropolitan Region Scheme Act, it would obtain a vested right to compensation if its applications for subdivision were refused or if they were approved subject to an unacceptable condition. But at no time did it have or could it acquire a right to compensation in respect of the sale of the Land. That right belonged to the owner of the Land at the time of the making of the Metropolitan Region Scheme.

22 Notwithstanding his conclusion that Temwood had an inchoate right to compensation, which would crystallise if an application for development approval was made which was refused or granted subject to unacceptable conditions, for reasons which need not be addressed McHugh J nevertheless concluded that the relevant condition of subdivisional approval was valid and for that reason joined with Gummow and Hayne JJ in upholding the appeal.

23 Callinan J was of the view that the condition of subdivisional approval imposed by the WAPC was invalid irrespective of any issue with respect to Temwood's right to claim compensation. However, he expressed his disagreement with the views expressed by Gummow and Hayne JJ on the issue of entitlement to compensation.

24 Callinan J rejected the suggestion that the language of s 11(1) of the TPD Act imposed a temporal limitation, confining the persons entitled to compensation to those who were owners at the time of reservation. In his view:[19]

[T]he words in s 11(1) of the TP Act '[a]ny person whose land or property is injuriously affected by the making of a town planning scheme shall ... be entitled to obtain compensation' should not be read as confined to a person who actually owned the land at the time that the scheme was made if the land has subsequently been sold. The section simply does not say that. Any person who owns land affected by a scheme is injuriously affected by the making of the Scheme even if that person only acquired the land after the Scheme was made. Section 11 is not the provision which specifies the time within which a claim must be made. It can be seen that it contemplates that the Scheme itself may specify a relevant time for the making of a claim and indeed that that time must be not less than six months after the Scheme becomes lawfully enforceable. Clearly it is possible that during such a period of not fewer than six months the property could change hands. Furthermore, the Scheme has a continuing adverse effect after it is first made by continuing to restrict prospective development of land subject to it. It is not without significance that the section does not use the word 'gazettal' rather than 'making'.

Nor do I think that any other provisions of the Scheme Act preclude an owner becoming an owner subsequent to the making of the Scheme, from making a claim.

25 In relation to s 36(3) of the MRS Act,[20] Callinan J pointed out that the section is phrased in such a way as to identify an event before which compensation may not be claimed.[21] In his view, the section could only bear a construction that would defeat a claim for compensation following an application for development approval by a person who was not the owner at the time of the making of the scheme if the words 'whichever shall first occur' are read into the section. In his view, there was no need to read such words in and further, reading those words into the section would be contrary to the proper approach taken to the construction of provisions relating to compensation for the compulsory taking of land.[22]

26 Callinan J considered that s 36(3a) of the MRS Act[23] was consistent with his construction of s 36(3), because its evident principal purpose was to prevent double or multiple payments.[24]

27 Callinan J also considered that his construction was supported by more general considerations. He observed that there may be little or no loss on the first sale following the date of reservation, and that the true or full loss may only crystallise and be sustained by a subsequent purchaser who seeks to develop the land, who is then able to see and assess the precise and full adverse effect of the planning scheme.[25] Callinan J drew support for those observations from secondary materials relevant to the interpretation of the relevant provisions of the MRS Act. Further, in his view:[26]

The construction which I prefer and which eschews implications, provides a fairer result. It allows the claim to be made when the true effect of the Scheme becomes known and the full loss is incurred. In the meantime, the owner of the land remains liable for the rates and other charges payable in respect of it, and the appellant enjoys the advantage of a large measure of control over the land, and the postponement of any liability to acquire or pay for it. If the owner wishes to claim immediately following the making of the Scheme, then that is a matter for it. Because only one claim can be made prudence would ordinarily dictate that it be made as and when the full loss is ascertainable.

28 Regrettably, Heydon J considered that the question of whether Temwood had any entitlement to compensation was irrelevant to the issue which had to be determined by the High Court. In his view, the purposes for which the relevant subdivisional condition were imposed were extraneous to the purposes for which the power to impose conditions was conferred, irrespective of whether or not Temwood had an entitlement to compensation. He agreed with Callinan J that the condition was invalid but, as I have noted, the majority took a different view.

29 In summary therefore, Gummow and Hayne JJ favoured the construction of the relevant provisions for which WAPC contends, whereas McHugh and Callinan JJ favoured the construction for which the claimants contend, and the remaining member of the court expressed no view on the issue.

30 Given this division of judicial opinion, as long ago as 2004, on a subject which is obviously of some significance to the finances of the State, it is perhaps surprising that the legislature did not move to clarify its intention either when the PD Act was passed in 2005, or some time thereafter. The replication of the provisions which gave rise to the unresolved controversy in Temwood in s 173 and s 177 of the PD Act has perpetuated that controversy, which must now be resolved by this court, subject to any further consideration of the issue by the High Court.

31 After setting out the issue and the competing contentions of the parties, Beech J referred to a number of general principles of statutory construction and the specific principles which pertain to the construction of legislative provisions relating to compensation for injurious affection. In that context, he observed,[27] correctly, that authority[28] establishes that:

[P]rovisions 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.

32 In that context, Beech J observed that the plain and ordinary meaning of s 177(1)(b) and s 177(2)(b) of the PD Act lead to the conclusion that in the event that an application for development approval was, by reason of the reservation of land for public purposes, refused or granted subject to unacceptable conditions, compensation for injurious affection was payable to the owner of the land at the date of the application. Thus, the natural and ordinary meaning of those provisions raised (rhetorically) the question of whether there are other provisions in the statutory scheme which preclude the natural and ordinary meaning of s 177(2)(b).

33 Beech J considered that if s 173(1) of the PD Act was read in isolation, it could convey the temporal connotation found by Gummow and Hayne JJ in Temwood. In particular, he considered that the words 'the making or amendment of' would be otiose if it was intended that the section confer an entitlement to compensation upon any person whose land is injuriously affected by a planning scheme.[29]

34 However, in his view such a construction of s 173(1) was inconsistent with the clear and explicit language of s 177(2).[30] Beech J noted a submission from WAPC, consistently with the views expressed by Gummow and Hayne JJ, to the effect that the temporal connotation to be derived from s 173(1) can be reconciled with s 177(2) by reading the latter section as extending the entitlement to compensation to the heirs or donees of the owner at the time of reservation.[31] However, Beech J did not consider that such a limitation could be found within the words of s 177(2)(b).[32]

35 Beech J accepted that the effect of s 177 was to defer the right to compensation until one or other of the things specified in s 177(1) occurred. However, in his view, s 177 did more than merely defer a claim created by and under s 173. In his view, the entitlement to compensation was governed by the combined operation of s 173 and s 177. He drew support for that conclusion from the opening words of s 177(2) which referred to compensation being payable under subsection (1). In his view, the language of s 177 was consistent with the creation of two alternative but otherwise independent rights. The first was the right of the owner of the land at the date of reservation to claim compensation when the land is first sold. 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.[33]

36 Beech J gave further consideration to WAPC's submission to the effect that s 177(2)(b) should be read as applying only to persons who became owners other than by purchase. In that context he observed that the legislature could be taken to know that most owners acquire title by purchase, which in turn suggested that if it had been the intention of the legislature to exclude purchasers after reservation from those who could claim compensation in the event of the refusal of development or the grant of approval to develop on unacceptable conditions, the legislature could have been expected to use words to that effect, and there are no words within s 177 which import any such limitation.[34]

37 In the result, his Honour concluded that although both competing constructions were open on the language of the text, and there was no clear indication of legislative purpose which favoured either construction, the established principle against the implication of limitations on the right to compensation not found in the express terms of the statute precluded the implication of a limitation upon the right to compensation conferred by the plain and ordinary meaning of s 177 of the PD Act.[35]

38 Beech J rejected WAPC's submission to the effect that its construction was confirmed by s 178(1)(a) of the PD Act, which should be read as imposing a limitation period by reference to the first to occur of the three alternative events to which reference is made in the subsection. Beech J preferred a construction of s 178(1)(a) to the effect that the limitation period which it provided applied to each of the circumstances which potentially gave rise to an entitlement to compensation, and not merely to the first to occur in point of time.[36]

39 Beech J also rejected submissions advanced by WAPC by reference to s 181 of the PD Act, and by reference to the proposition that the claimants' construction would allow purchasers who had suffered no loss to obtain windfall gains. Beech J rejected that proposition, noting that the statutory scheme provides its own safeguards and limits against windfall gains, including the limitation that compensation is only payable once, and is limited to the difference between the affected and unaffected value of the land. He also noted that the construction for which WAPC contended could unfairly deny compensation to a purchaser who had contracted to purchase land which was reserved prior to settlement.[37]

40 Beech J pointed out that anomalous consequences flow from each of the constructions for which the parties contended. On the claimants' construction, a purchaser subsequent to reservation has a right to compensation if a development application is refused or granted on unacceptable terms, but has no right to claim upon a second sale. However, as his Honour observed, on the construction for which WAPC contends, the acquirer of title by will or gift has a right to compensation in the event that an application for development approval is refused or granted on unacceptable terms, but no right to compensation the first time the property is sold after reservation.[38]

41 Beech J then reviewed the legislative history of analogous provisions in Western Australia, and the secondary materials relating to that legislation. As I will be addressing those materials in the portion of my reasons which follow, it is unnecessary to set out the reasoning adopted by Beech J in relation to those matters, other than to observe that he concluded, as do I, that the legislative history and secondary materials are ultimately equivocal, with the possible exception of the materials relating to the amendments made to the MRS Act in 1986.

42 Beech J summarised his conclusions as follows:[39]

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 [MRS 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. 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. 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. (footnotes omitted)

43 The legislative history of the provisions in Western Australia relating to compensation for the injurious affection of land as a result of the making of a town planning scheme and which are now contained in the PD Act, commences with s 11 of the TPD Act, which was contained in that Act when enacted in 1928. That section provided:

(1) Any person whose land or property 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 six 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 ...

44 In the course of oral submissions, counsel for WAPC submitted that the terms of this provision, when enacted, shed light upon the proper construction to be given to s 173(1) of the PD Act. In particular, counsel submitted that there were two aspects of s 11 which, together, gave rise to an inference that the entitlement to compensation created by the section was limited to persons who were the owners of land at the date of the making of the relevant town planning scheme. Those two matters were said to be the fact that the entitlement to compensation was immediate upon the 'making of' a town planning scheme, rather than deferred, and that the section specified a relatively brief limitation period (six months), within which it was unlikely that the ownership of land would change hands.

45 The second proposition advanced in support of this contention is not correct. Section 11 did not specify a limitation period. Rather, it specified that any claim brought under the section must have been brought within the time 'if any' limited by the relevant town planning scheme, which could have been not less than six months after publication of the relevant scheme. By including the words 'if any', s 11 clearly contemplated that a town planning scheme may have imposed no limitation period within which claims must have been made. Further, the section did not specify any limitation period, but did provide that the limitation may not have been less than six months. Counsel's proposition that these portions of s 11 can be read as, in effect, imposing a short limitation period within which claims must have been made cannot be accepted.

46 If that erroneous proposition is removed from the argument relating to s 11 of the TPD Act, essentially what remains is the focus upon the implications, if any, to be drawn from the reference to injurious affection 'by the making of' a scheme. However, the implications properly drawn from the use of that expression in the TPD Act in 1928 may well be quite different from the implications properly drawn from the use of those words in the PD Act in 2005, where the context in which those words are to be read is quite different to the context in which the words are to be found in the TPD Act, given that the scheme for compensation contained within the PD Act is considerably more elaborate than that contained in the TPD Act.

47 For these reasons, the terms of s 11 of the TPD Act when enacted in 1928 shed no light upon the issue which must be determined in these appeals, which turns upon the proper construction of the provisions in the PD Act read in their context.

48 The MRS Act was enacted in 1959, although the MRS promulgated pursuant to its terms did not come into effect until 1963. Section 36 of the MRS Act as enacted contained provisions relating to the application of, inter alia, s 11 of the TPD Act to the scheme to be promulgated under the MRS Act.

49 In 1962, before the MRS came into effect, the MRS Act was amended by adding the following provisions to s 36 of that Act:

(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 grants permission to carry out development on the land subject to conditions.

(4) Before compensation is payable under subsection (3) of this section -

(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; or

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

(5) A claim for compensation under subsection (3) of this section shall be made at any time within six months after the land is sold or the application for permission to carry out development on the land is refused.

50 Obviously enough, the scheme for compensation created by those provisions has many of the characteristics found in the scheme embodied within the currently applicable provisions of the PD Act. In particular, these amendments had the effect of deferring any entitlement to compensation until either the land was first sold following the date of reservation, or an application for approval to carry out development on the land was, by reason of the reservation, either refused or granted subject to conditions.[40]

51 The reasons for the introduction of provisions deferring the entitlement to compensation arising from the promulgation of the MRS appear from the second reading speech given in relation to the relevant amending Bill. The Minister[41] advised the Legislative Council that the relevant authority would lack the financial resources to acquire or compensate landowners for the significant areas of land likely to be reserved by the MRS. In relation to the circumstances in which the entitlement to compensation would arise, the Minister observed that the Bill had the effect:[42]

[T]hat compensation for injurious affection be limited to two circumstances - firstly, where a sale is effected at a depressed value attributable to reservation under the scheme; and, secondly, where consent to develop is refused on the grounds of reservation under the scheme.

The new provisions are designed to protect the interests of landowners while, at the same time, securing the success of the scheme by assuring the fund can meet all reasonable claims. The provisions proposed, together with the authority to purchase land, will enable the prevention of individual hardship which otherwise might arise.

52 In the Legislative Assembly, the Minister moving the second reading of the Bill made similar observations with respect to the financial need to defer the entitlement to compensation. He also observed:[43]

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.

53 The observations made in the second reading speeches do not directly address the question which arises in this case. However, to the extent that the observations made shed any light on the issues before the court at all, they are more consistent with the view that the scheme for compensation created by the 1962 amendments deferred the entitlement until one or other of two events came to pass. Each of those events has the effect of crystallising a loss previously inchoate and which is reflected in either the reduced sale price achieved for the land or a restriction upon its use and development by reason of the reservation. The language used in the parliamentary debates is more consistent with those events being true alternatives, and does not suggest that they were mutually exclusive, or that the limitation period introduced by the amendments commenced whenever the first of the alternative events occurred. Nor does such an inference arise from the terms of the limitation provision itself,[44] which is at least open to interpretation on the basis that the limitation period applies to whichever event is said to have triggered the entitlement to compensation, and not only to the first of such events to occur.

54 In 1968, s 36 of the MRS Act was amended by adding, after subsection (3):

(3a) 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.

55 As par (a) of subsection (3) was only concerned with compensation arising when the relevant land was first sold after the date of reservation, this amendment sheds no particular light upon the question of whether the triggers to the entitlement to compensation are true alternatives. Nor do the secondary materials relating to the 1968 amendment shed any light on that question.

56 In 1969, s 36 of the MRS Act was again amended by adding, in subsection (3a)[45] the words:

[A]nd is payable to the person who was the owner of the land at the date of reservation ...

Again, it should be noted that because subsection (3a) was only concerned with compensation in the event of the first sale after reservation, the amendment was also limited to that circumstance.

57 In the second reading speech given by the Minister for Town Planning in support of the amendment Bill, he observed:[46]

Recent examination by the Crown Law Department of the section as amended last year indicates that the provision does not achieve the intended result and is capable of much wider interpretation.

In short, the compensation provision relating to the sale of land that is reserved under the provisions of the metropolitan region scheme is intended to protect the interests of the owner of land at the time it is reserved. Subsequent owners are expected to acquaint themselves with details affecting the land before purchasing. Such owners are, of course, protected by the provisions relating to development and compensation in the event of an adverse decision by the authority.

Whilst there have been no cases of exploitation of original owners by shrewd dealers, nevertheless the provision as it stands could be so used. The aim of this amendment is to ensure that only the person owning land at the time it is reserved under a provision of the scheme can receive compensation under the subsections relating to land that is sold at less than its market value.

58 To the extent that these observations can be used as an aid to the construction of the relevant provisions of the PD Act, they support the construction for which the claimants contend.

59 However, a quite contrary inference is to be drawn from the terms of the second reading speech given by the Minister for Education in support of the amendment Bill in the Legislative Assembly. In that speech he observed:[47]

Under section 36 of the Metropolitan Region Town Planning Scheme Act the authority is responsible for the payment of compensation for injurious affection of land reserved under the provisions of the metropolitan region scheme.

Payment of this compensation is deferred, however, until either, firstly, the land is first sold after it has been reserved or, secondly, an application to develop it is refused by the authority or, alternatively, approved but with conditions attached which are unacceptable to the owner.

The compensation provisions are intended to protect the interest of the owner of land at the time it is reserved and are not intended to be transferable. It devolves upon subsequent owners to acquaint themselves of the details affecting the land before purchasing it.

The Crown Law Department is of the opinion that the provisions of the 1968 amendment are capable of a much wider interpretation than the one intended. It appears that as the Act now stands if a seller who is unaware of the provisions of the Act disposes of his property at less than the unaffected market value and fails to claim compensation for injurious affection, then this right passes to the new owner. The original owner is thus deprived of his right to be compensated for loss of value through the reservation. The purpose of this amendment is to ensure that compensation for injurious affection is received only by the person who owned the land at the time of the reservation.

60 If and to the extent that these observations shed any light on the proper construction to be given to the currently applicable provisions of the PD Act, they support the construction for which WAPC contends.

61 In 1986, s 36 of the MRS Act was again amended by repealing subsection (3a) and substituting the following:

(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.

62 Two aspects of this amendment merit particular attention. First, this amendment was the first occasion upon which there was any legislative prescription of the person to whom compensation was payable in the event that the trigger for the entitlement to compensation was the refusal of an application to develop or the grant of approval subject to conditions unacceptable to the applicant. In such a case, the amendment specified that the person to whom compensation was to be paid was 'the owner of the land at the date of application'.

63 Second, it should be noted that this amendment introduced the legislation in the form which was considered by the High Court in Temwood, and in particular, introduced the provision which, as I have already noted, is in all material respects identical to s 177(2) of the PD Act.

64 Given those features of the amendment, the secondary materials relating to it have a particular significance to the issue under consideration. Fortunately, unlike the secondary materials relating to the 1969 amendments, the relevant passages of the second reading speeches given in each House of Parliament are identical. Those passages were:[48]

[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.

65 I respectfully agree with Beech J that these materials lend support to the construction for which the claimants contend, because:

(a) the natural and ordinary meaning of the language used in the second reading speeches is to the effect that the entitlement to compensation is:

(i) conferred upon the owner at the date of reservation in the event that the trigger for that entitlement is the first sale following reservation, but

(ii) is also conferred upon the person who is the owner at the time of an application for development approval in the event that the trigger for the entitlement to compensation is the refusal of that application or the grant of approval subject to conditions unacceptable to the applicant; and

(b) there is nothing in either speech to suggest that owners at the time an application for development approval is made which is refused or granted subject to unacceptable conditions can only claim compensation if they were also the owner at the date of reservation.

The Western Australian Planning Commission Act

66 For the sake of completeness, I should note that in 1999, the Western Australian Planning Commission Act 1985 (WA) was amended by introducing, as s 33 of that Act, a section which contains provisions materially identical to s 177(1) of the PD Act. However, neither party has relied upon any secondary materials relating to the introduction of those provisions.

67 WAPC also relies upon the explanatory memorandum relating to the Planning and Development Bill 2005, and in particular, the portion relating to cl 173 of the Bill which states:[49]

[P]rovides entitlement to compensation where land is injuriously affected by the making or amendment of a planning scheme. Reflects existing section 11(1) [TPD Act].

68 This provision is said to support the proposition that s 173 should be read in the manner in which WAPC contends s 11 of the TPD Act should be read - namely, as restricting the entitlement to compensation to owners at the date of reservation.

69 That argument must be rejected for the same reason the argument based upon the construction to be given to s 11 in the form in which it was introduced in 1928 must also be rejected - namely, it ignores the obligation to read s 173 of the PD Act in its context.

70 This flaw in the argument is reinforced by the reference in the explanatory memorandum to cl 177, which records that it reflects s 36 of the MRS Act.[50] One aspect of the issue considered by the High Court in Temwood upon which all judges who addressed that issue agreed was the proposition that s 11 of the TPD Act and s 36 of the MRS Act had to be read as part of a legislative scheme. Obviously that proposition is even stronger when, in the case of the PD Act, the relevant provisions are to be found in the same Division of the one Act.

71 For these reasons, I respectfully agree with the conclusions at which Beech J arrived following the review of the relevant legislative history. Because of the differences in the relevant legislative provisions at earlier times in that history, little or no assistance is to be derived with respect to the proper construction of those provisions in their current form. Further and in any event, in many instances the secondary materials are equivocal and, in one instance (the 1969 amendment to the MRS Act), directly inconsistent. The amendment of greatest significance to the issue currently before the court is the amendment of the MRS Act in 1986. The secondary materials relating to that amendment support the construction which the claimants place upon the relevant provisions of the PD Act.

72 It is convenient to briefly summarise the propositions identified in the review of the decision of the High Court in Temwood, the decision at first instance in this case, and the legislative history of the relevant provisions.

73 First, the terminology of s 173(1) of the PD Act is capable of supporting the construction for which WAPC contends, by its reference to a person whose land is injuriously affected 'by the making or amendment of a planning scheme'. Those words focus attention upon persons with an interest in land at the time of the making or amendment of a relevant scheme.

74 Second, however, that view of s 173(1) is directly contrary to the plain and ordinary meaning of s 177(1) and (2) of the PD Act, which explicitly provide that compensation is payable to the person who was the owner of the land at the date of an application for development approval which was refused or granted subject to unacceptable conditions.

75 Third, the plain and ordinary meaning of s 177(1) and (2) of the PD Act can only be reconciled with the construction of s 173(1) for which WAPC contends if:

(a) s 177(1) is read as deferring the entitlement to compensation only until the time at which the first of either of the two events to which it refers occurs, and should therefore be read as if the words 'whichever shall first occur' are to be found at the end of the subsection; and

(b) if the reference in subsection (2) to the person who was the owner of the land at the date of the application for development approval is read as if it is restricted to a very limited and special class of owners - namely, owners at the date of reservation; or alternatively, to owners who were not the owner at the time of reservation but became an owner by some means other than purchase after the date of reservation. WAPC contends that s 177(2)(b) must be read as if words having one or other of these limiting effects are to be implied into the subsection.

76 Fourth, the legislative history of the relevant provisions, and the secondary materials relating to that legislative history are either equivocal or, to the extent that they shed light upon the issue of construction now under consideration, tend to support the claimants' contentions.

77 Subject to the consideration of the arguments advanced by WAPC on appeal which follows, this summary of the issues tentatively supports the construction for which the claimants contend. With respect, the fundamental obstacle in the path of the construction found by Gummow and Hayne JJ, and each of the alternative constructions for which WAPC now contend, is that they require, in effect, words to be read into each of s 177(1) and (2) which have not been included by the legislature, and which would have the effect of limiting the entitlement to compensation for the injurious affection of land. That approach to the construction of legislative provisions of that character is directly contrary to established High Court authority.[51] It will be apparent from these observations that subject to the analysis which follows, I am tentatively disposed to favour the views expressed by McHugh and Callinan JJ, and the judge at first instance in this case, in preference to the views expressed by Gummow and Hayne JJ. It is necessary to now consider whether that tentative view is displaced by the various arguments advanced on behalf of WAPC on appeal.

78 I will address the submissions advanced on appeal by WAPC in the order in which they are found in the appellant's case, then in the document entitled 'appellant's supplementary case', and then by reference to the submissions advanced during oral argument. I have already addressed such of those arguments as draw upon the legislative history of the relevant provisions.

79 Understandably, WAPC places great reliance upon the use of the words 'the making or amendment of a planning scheme' in s 173(1) of the PD Act. Beech J acknowledged, as do I, that those words are capable of supporting the construction for which WAPC contends. However, three qualifications to that observation must be noted.

80 First, s 173(1) must be read in the context of div 2 of pt 11 of the PD Act, and in the context of the Act as a whole. That is why, as I have noted, arguments based upon s 11 of the TPD Act, viewed in isolation, are of little or no significance.

81 Second, although the making or amendment of a planning scheme can, no doubt, injuriously affect land by constraining the use to which it can be put, the precise manner and extent of the injurious affection will not be apparent unless and until either:

(a) the land is sold at a lesser value than it might otherwise have achieved but for the reservation; or

(b) the land cannot be developed[52] as desired because of the reservation.

This consideration explains, at least in part, why the entitlement to compensation is deferred until one or other of those events occurs.

82 Third, as a matter of logic, any injurious affection which a planning scheme has upon land must derive from the making or amendment of that scheme. Thus, the words used in s 173(1) might be explained as a recognition of that obvious fact, rather than by an attempt to define or constrain the class of persons who might claim compensation - a topic more specifically addressed by s 177.

83 In summary, the words in s 173(1) upon which WAPC places emphasis are, of course, a significant step down the path towards the construction for which it contends but are not sufficient, in themselves, to confirm that construction of the relevant Division of the PD Act.

84 WAPC submits that s 174(1) 'reiterates and confirms that the sole source of compensable injurious affection is the event of making/amending a scheme'. As I have noted, the proposition that any injurious affection by reason of a planning scheme must derive from the making or amendment of that scheme cannot be doubted. However, statutory recognition of that inevitable fact does not, of itself, convey significant information with respect to the legislature's intention in relation to the ambit of the class or classes of persons who might be compensated as a consequence of the making or amendment of a planning scheme. WAPC's submission that s 174(1) cannot be read as providing that 'land is also injuriously affected by the state of affairs of being reserved land' must be rejected. As I have already noted, while the source of injurious affection is to be found (inevitably) in the making or amendment of a planning scheme, the making or amendment of a scheme gives rise to a continuing state of affairs in which the precise manner and extent of the injurious affection may not be known until one or other of the events specified in s 177(1) has occurred.

85 The fact that injurious affection gives rise to a continuing state of affairs is recognised by the scheme of pt 11 div 2, which defers the entitlement to compensation until an event has occurred which crystallises the landowner's loss, and which might well occur many years after reservation. It is also recognised by the language used in the Division, in which injurious affection is commonly referred to in the present tense, consistently with its continuing effect.[53] Legislative recognition of the continuing nature of injurious affection is also to be found in the fact that compensation is assessed by reference to values at the date of the event crystallising the inchoate claim to compensation, rather than the values prevailing at the date of reservation.[54]

Reservation before or after the commencement of the PD Act

86 WAPC submits that the reference in s 174(1)(a) of the PD Act to the reservation of land whether before or after the coming into operation of that section would be otiose if s 173 conferred an entitlement to compensation merely from the existence of a reservation. However, that submission fails, essentially for the same reason as the submission based on s 174(1) to which I have just referred also fails. Put shortly, the use of language which recognises the inevitable fact that all injurious affection of land by reason of a planning scheme must derive from the making or amendment of such a scheme sheds no significant light upon the class or classes of persons entitled to compensation by reason of that fact. Contrary to WAPC's submission, the provision is not otiose, as it clearly and expressly provides that an entitlement to compensation is conferred in respect of planning schemes made or amended prior to the commencement of the section. In that sense, the section is another aspect of the legislative scheme which recognises the indisputable fact that the injurious affection caused by the making or amendment of a planning scheme is not merely instantaneous but creates a state of affairs which continues as long as the scheme is in force and, to that extent, is more consistent with the construction for which the claimants contend than that for which WAPC contends.

87 WAPC submits that s 177(1) has the object and effect of deferring the entitlement to compensation created by s 173 and does not, of itself, create an entitlement to compensation. That submission may be accepted but, with respect, misses the point of the scheme created by s 173 and s 177. Section 173 confers an entitlement to compensation arising from the making or amendment of a planning scheme. Section 177 defers that entitlement until the landowner's loss has crystallised either because the land has been sold, or because an application for development approval has been refused or granted subject to unacceptable conditions. No question arises of there being more than one entitlement - plainly there can only be one entitlement, compensation can only be paid once[55] and compensation cannot be claimed until one or other of the events specified in s 177(1) has occurred. Because those events will occur, by definition, at a date later than the date upon which the relevant scheme is made or amended, a question necessarily arises as to the person or persons entitled to claim compensation after one or other of the crystallising events has occurred. That question is specifically addressed by s 177(2) which, when read with s 177(1), clearly and explicitly specifies that the person entitled to compensation is the person who is the owner of the land at the date of the application for development approval, if the event which crystallised the inchoate entitlement to compensation was the refusal of such an application, or the grant of approval subject to unacceptable conditions.

Section 177 of the PD Act does not create another entitlement to compensation

88 WAPC submits that s 177 cannot be construed as creating another entitlement to compensation. That proposition can be accepted. However, it fails to deal with the scheme evident in s 173 and s 177, which creates an entitlement to compensation which is deferred until the happening of one or other of the events specified in s 177(1) in a context in which s 177(2) defines the persons entitled to claim compensation, depending upon the event which has crystallised the inchoate entitlement.

89 WAPC submits that s 177(2)(b) is not superfluous, even if its contention that only owners at the date of reservation are entitled to compensation is accepted. However, WAPC does not now contend that s 177(2)(b) serves the purpose identified by Gummow and Hayne JJ[56] in Temwood of conferring an entitlement to compensation upon heirs or donees. Rather, WAPC contemplates a narrower class of owner, and cites as examples of that class: survivorship by a joint tenant and the execution of a Binding Financial Agreement by husband and wife who were joint owners of land at the date of reservation. Unlike the examples posited by Gummow and Hayne JJ, each of these hypothetical examples has the characteristic that there is at least one person who was an owner both at the date of reservation and also at the date of application for development approval, consistently with WAPC's fundamental proposition that only owners at the date of reservation have an entitlement to compensation.

90 WAPC submits that s 177(2) should be construed as having the effect that the personal representative of a deceased joint tenant may claim in the event that the trigger to the inchoate entitlement to compensation is a sale, but not if the trigger is the refusal of an application for development approval or its grant on unacceptable conditions. Similarly, WAPC submits that the subsection should be construed as having the effect that a husband who transfers sole ownership of land jointly owned at the date of reservation because of the execution of a Binding Financial Agreement may claim compensation if either of the triggering events to which reference is made in s 177(1) occur prior to the execution of the Binding Financial Agreement but, after the agreement is executed, only the wife can claim if the triggering event is the refusal of an application for development approval or the grant of approval subject to unacceptable conditions.

91 A number of aspects of these submissions must be noted. First, there is nothing in the language of s 177(2) which would suggest the construction for which WAPC contends. Second, there is nothing in s 177(2) or in any of the secondary materials which would suggest that the legislature had in mind circumstances such as the death of a joint tenant or the execution of a Binding Financial Agreement between the date of reservation and the date upon which the entitlement to compensation arises. Third, there is nothing in the language of s 177(2) or any of the secondary materials which would suggest that the legislature intended the distinctions in the entitlement to compensation which WAPC would attribute to the subsection, nor is there any apparent reason in public policy why such distinctions would be intended - to the contrary, on their face the distinctions appear somewhat bizarre and irrational.

92 Finally, it is significant that WAPC does not now embrace the construction of s 177(2)(b) proposed by Gummow and Hayne JJ,[57] but advances an alternative construction which would impose different constraints and limitations upon the entitlement to compensation. This difference in construction reinforces the fact that neither the limitation upon the operation of the subsection proposed by Gummow and Hayne JJ, nor the limitations upon the operation of the subsection for which WAPC now contend, derive any support from the language of the subsection but are, in each case, said to be entirely implicit. The fact that WAPC now contends that the limitations implicit in the subsection are not those proposed by Gummow and Hayne JJ rather suggests that neither limitation is so obvious as to go without saying. As I have already noted, the need to imply limitations upon the plain and ordinary meaning of the language of s 177(1) and (2) highlights the fundamental obstacle in the path of the construction for which WAPC contends, as such a process of construction is contrary to established principle relating to the construction of statutes dealing with compensation for injurious affection.

93 WAPC advances another example which is said to justify s 177(2)(b). It submits that but for that provision, an owner at reservation who sells the land without making a claim could await a development application by the purchaser of land, and then claim compensation despite no longer being an owner of land. However, the difficulty with this proposition is that s 177(2) does not disqualify an owner at the date of reservation who sells land, and who can claim at any time within the relevant limitation period (provided compensation has not already been paid), but rather provides that in the event that the relevant trigger is the refusal of an application for development approval, or the grant of approval on unacceptable conditions, the owner of the land at the date of the application for development approval is also entitled to compensation.

94 One of the evident deficiencies in the Division is its failure to deal with the potentially competing claims to compensation which arise from the specification of two different classes of persons having an entitlement. While it is tempting to attempt to fill that gap by construing s 177(1) as applying only to the first of the two alternative events to occur in point of time, that construction still ignores s 177(2)(b), because the owner at the date of the application for development approval will also be the owner at the date of reservation unless the land has been sold since reserved. That is why s 177(2)(b) must be constrained either in the manner proposed by Gummow and Hayne JJ, or in the manner now proposed by WAPC, if the Division is to have the effect for which WAPC contends - neither of which constraint draws any support from the language of the subsection.

95 As Beech J observed,[58] however the relevant Division is construed, and irrespective of whether the construction for which WAPC contends or the construction for which the claimants contend is adopted, it can be cogently argued that there are significant anomalous consequences in differing hypothetical factual scenarios. In those circumstances, the identification of hypothetical scenarios of the kind proposed by WAPC does not assist to provide any guide to presumed legislative intention, and the focus of attention must be directed to the language used in the relevant provisions.

96 WAPC draws attention to the opening words of s 177(2), which provide that compensation for injurious affection is payable only once and submit that these words prevent s 177(1) being read as creating a new entitlement to compensation. However, there is no inconsistency between a provision requiring that compensation be paid only once, and a provision which defers the entitlement of compensation until the happening of one or other of two events; although, as I have noted, the legislation does not address the question of how competing claims to compensation are to be resolved, nor is there any construction of the legislation available from the words used which would resolve that question. More fundamentally and in any event, for the reasons I have already given, WAPC's submissions directed to the question of whether there is one or more than one entitlement to compensation are not to the point.

97 WAPC submits that it would be wrong to rewrite s 173(1) and s 174(1) in order to resolve inconsistency with s 177(2). However, there is no need to rewrite, or to imply words into, s 173(1) or s 174(1) to render them consistent with the plain and ordinary meaning of s 177(1) and (2). As I have already noted, there is no difficulty in reading the reference in each of s 173(1) and s 174(1) to injurious affection arising from 'the making or amendment of a planning scheme' as recognition of the inevitable fact that the initial source of any injurious affection must be the making or amendment of a scheme. As the injurious affection caused by the making or amendment of a scheme gives rise to a continuing state of affairs and, further, given that the entitlement to compensation as a result of the injurious affection arising from the making or amendment of a scheme is deferred until the manner and extent of the injurious affection is crystallised either by sale of the land at reduced value or by the refusal of development approval or the grant of approval subject to unacceptable conditions, a question necessarily arises as to the identity of the person entitled to compensation upon the occurrence of the event crystallising the inchoate entitlement. That is not a question addressed by either s 173(1) or s 174(1). It is precisely the question addressed by s 177(1) and (2). The construction for which the claimants contend does not create any inconsistency between those provisions, and therefore creates no need to rewrite or imply words into either of the earlier sections.

98 WAPC criticises Beech J's reliance upon authorities suggesting that beneficial legislation should be given a 'large and liberal' interpretation. I have elsewhere referred to the practical difficulty of applying that principle to the construction of a remedial or beneficial statute which expressly imposes some constraints upon the entitlements which it confers.[59] The same practical difficulties do not attend the application of the more specific principle of construction upon which Beech J relied, which is to the effect that the court should be slow to imply limitations on the right to compensation that are not found in the express terms of the statute. As I have already noted, Beech J concluded, correctly in my view, that the construction for which WAPC contends contravened that principle by requiring words of limitation to be read into each of s 177(1) and (2) of the PD Act.

99 WAPC submits that the construction for which the claimants contend would permit a purchaser who has acquired land at a reduced value because of its reservation to obtain a windfall gain if and when that purchaser subsequently applies to develop the land and the application is refused or granted subject to unacceptable conditions. Of course, such a claim could only be made if the vendor of the land has not made a claim for compensation arising from the sale of the land at a value reduced by reason of the reservation. In the ordinary scheme of things, one would think such a circumstance would be relatively rare, as there is no apparent reason why a vendor who has suffered loss by reason of a sale of land at a value reduced by the fact of reservation would not pursue the entitlement to compensation conferred by the PD Act.

100 While the theoretical possibility of such a gain must be accepted, as I have already observed, whichever way the relevant Division is construed, there are anomalous consequences in different circumstances. For example, under the construction for which WAPC contends, the specific beneficiary of land devised pursuant to a will would have no claim for compensation when the land devised is first sold after its reservation - rather, the claim would form part of the residuary of the deceased estate, to be distributed amongst the beneficiaries of the residuary estate. On the other hand, on the view taken by Gummow and Hayne JJ in Temwood, such a beneficiary would have an entitlement to compensation if the event crystallising the inchoate claim was the refusal of development approval or the grant of approval subject to unacceptable conditions, but not if the event crystallising the inchoate claim was the sale of land. As I have noted, Beech J referred to other anomalies flowing from the construction for which WAPC contends. I reiterate that, because anomalous consequences flow from whichever construction is adopted, assessment of potential hypothetical outcomes in differing factual scenarios does not advance the resolution of the construction issue, which must focus upon the words used.

101 WAPC submits that s 178(1) supports the construction for which it contends because, properly construed, that section imposes a single limitation period which commences to run upon the first to occur of any of the events which might crystallise the inchoate entitlement to compensation. However, that construction of s 178(1) is far from self-evident. Indeed, there is no more reason to read into s 178(1) the words 'whichever shall first occur', than there is to read those words into s 177(1). A construction of s 178(1) which would apply the limitation period to whichever of the crystallising events has in fact given rise to the particular claim made is equally open on its language. But in any event, even if s 178(1) is construed as WAPC contends, and the limitation period commences upon the occurrence of the first event which crystallises an entitlement in point of time, no light is shed upon the construction to be given to s 177(2)(b). That is because there is no reason why a purchaser could not submit an application for development approval which is refused,[60] thereby giving rise to an entitlement to compensation prior to the expiry of the limitation period arising from the first sale after reservation.

102 In the alternative, WAPC presses for the construction adopted by Gummow and Hayne JJ in Temwood. However, as I have already noted, that construction has its own difficulties and anomalies. Further, the fact that WAPC presents this case in the alternative counts against any suggestion that the limitations to be implied upon the natural and ordinary meaning of the words used in s 177(2)(b) are obvious or self-evident.

103 WAPC submits that as it is clear that a purchaser of land after reservation cannot claim compensation when the land is resold by that purchaser, there is no reason why the legislature would have intended that such a purchaser should have an entitlement to claim in the event that an application for development approval is refused or granted subject to unacceptable conditions.

104 Three points should be noted in respect of this submission. First, such a purchaser would only have a claim to compensation in the event that the vendor has not claimed compensation - perhaps because the sale price was not reduced by the reservation. Second, it is relatively easy to imagine a circumstance in which a reservation will have no practical impact upon the value or use of the land until some time well into the future - perhaps when changed circumstances render the land ripe for a change of use. In such a circumstance, provided that compensation has not been claimed or paid previously, there is no reason why the legislature should not be taken to have intended the owner at the time the injurious affection crystallises into a loss to have an entitlement to compensation.

105 Third, as I have noted a number of times, because anomalous consequences flow from whichever construction is adopted, consideration of hypothetical scenarios provides little assistance to the question of construction.

106 WAPC submits that the words used in s 177(2)(b) can be explained by the fact that an application for development approval may be made by a person who is not the owner of the land the subject of the application. The fact that a person other than the owner of land may apply for approval to develop that land may be accepted, but that fact provides no explanation for, nor does it imply any limitation upon, the words used in s 177(2)(b). That is because the entitlement to compensation to which reference is made in that subsection is conferred upon the owner of the land at the date of the application for development approval, not the applicant. The fact that the applicant for development approval may not have been the owner at the time the application is made does not detract in any way from the fact that the subsection clearly distinguishes between the entitlement of the owner of land at the date of reservation, and the entitlement of the owner of the land at the date of the application for development approval, contrary to WAPC's contention that only the former has an entitlement to compensation.

No provision for priority between competing claimants

107 WAPC also endeavours to draw support for its contentions from the fact that the legislation contains no provisions with respect to the priority of claims which might be lodged by competing claimants - an omission which I have already noted. However, as I have also already noted, that omission is not resolved by the construction for which WAPC contends - whatever view is taken of the Division, there is a prospect of competing claims which is not addressed by the legislation, other than through the provision that compensation may be paid only once.

Nicoletti v Western Australian Planning Commission

108 WAPC also submits that Nicoletti v Western Australian Planning Commission[61] was wrongly decided and should be overruled. In that case McKechnie J held, in effect, that an applicant for compensation relying upon the refusal of development approval or the grant of development approval subject to unacceptable conditions could withdraw such a claim before it was met, and, in the event that a subsequent application for development approval was refused or granted subject to unacceptable conditions, make a further claim at that time.

109 If WAPC's contentions as to the construction of the Division are correct, it would follow that Nicoletti was wrongly decided. However, it does not necessarily follow from the acceptance of the claimants' contentions with respect to the proper construction of the Division that Nicoletti was rightly decided. To the contrary, it is unnecessary to determine whether or not Nicoletti was correctly decided in order to evaluate the claimants' contentions. Because I do not accept WAPC's contentions with respect to the construction of the Division, in my view it would be preferable to defer consideration of the correctness of Nicoletti until a case arises in which that issue is squarely raised for determination and supported by full argument on each side of the issue.

110 For these reasons, the arguments advanced by WAPC on appeal do not, either individually or in combination, displace the tentative view arising from the propositions which emerge from an analysis of the judgments in Temwood, the decision at first instance in this case, and the legislative history of the relevant provisions. At the risk of repetition, s 177(2) of the PD Act, which is specifically directed to the question of the identification of the person entitled to claim compensation, expressly

refers to the entitlement of two classes of persons - namely, the owner at the date of reservation, and the owner at the date of an application for development approval which is refused or granted subject to unacceptable conditions. WAPC submits that on the proper construction of pt 11 div 2 of the PD Act, there is only one class of persons entitled to compensation, namely, the owner at the date of reservation. That construction can only be accepted if the entitlement conferred by the plain and ordinary meaning of the words used in s 177(1) and (2) is significantly constrained by implied limitations not found in the express words of the statute. That approach to the construction of statutes providing for compensation to landowners for the injurious affection of their land is contrary to well established principle and should not be accepted.

113 MURPHY JA: I agree that these appeals should be dismissed, generally for the reasons given by Martin CJ, subject to the following further brief observations.

114 Whilst, unlike in s 174(1) and s 175 of the Planning and Development Act 2005 (WA) (Act), the word 'by' in s 173(1) of the Act is not followed by the words 'reason of', the word 'by' in s 173(1) in the phrase 'by the making or amendment of a planning scheme' is nevertheless used in a causative sense.[62]

115 In my respectful view, the construction advanced by the appellant, by reference to the joint reasons of Gummow and Hayne JJ in Western Australian Planning Commission v Temwood Holdings Pty Ltd[63] (joint reasons) would have greater force if s 173(1) used the word 'upon', so that the relevant phrase in s 173(1) read 'upon the making or amendment of a planning scheme', rather than 'by the making or amendment of a planning scheme'. That would give a plain 'temporal connotation'[64] to s 173(1). Such a temporal connotation appears to be central to the discussion in the joint reasons of the subsequent fructification of the 'concrete or tangible',[65]

or 'real'[66] losses to the owner at the time of reservation, or to his or her testamentary or intestate successors.[67]

116 The absence, in my respectful view, of any plain temporal connotation in s 173(1) of the Act, and the principle that provisions for compensation for injurious affection should be construed with all the generality that the words permit,[68] are powerful indications, to my mind, that the construction advanced by the appellant should not be the preferred construction.

[1] Leith v Western Australian Planning Commission [2014] WASC 499.

[4] This was common ground at first instance and on appeal.

[5] Commencing with the Town Planning and Development Act 1928 (WA).

[7] [2004] HCA 63; (2004) 221 CLR 30.

[8] Section 11(1) TPD Act and s 173(1) PD Act.

[9] Which corresponds to s 177(1) of the PD Act.

[12] Which corresponds to s 177(2) of the PD Act.

[14] Which corresponds to s 177(2)(b) of the PD Act.

[16] Which corresponds to s 173(1) of the PD Act.

[20] Which corresponds to s 177(1) of the PD Act.

[22] See Kettering Pty Ltd v Noosa Shire Council [2004] HCA 33; (2004) 78 ALJR 1022 [31] (McHugh, Gummow, Hayne, Callinan & Heydon JJ).

[23] Which corresponds to s 177(2) of the PD Act.

[28] Marshall v Director General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 [38] (Gaudron J); Kettering [31] (McHugh, Gummow, Hayne, Callinan & Heydon JJ).

[32] Agreeing in that respect with McHugh and Callinan JJ.

[37] Leith [59]. This observation appears to have been made on an assumption that such a purchaser would not be an 'owner' at the date of reservation. However, as I have noted, the parties are agreed that in the case of Southregal Pty Ltd and Mr Wee, if the question of law is answered as WAPC contend, this issue may need to be considered and determined.

[40] Cf s 177(1) of the PD Act; although note that, curiously, the provisions introduced in 1962 contained no requirement that the conditions of development approval be unacceptable to the applicant for development, as a condition of the entitlement to compensation arising.

[42] Western Australia, Parliamentary Debates, Legislative Council, 12 September 1962, 929 - 930 (The Hon L A Logan, Minister for Town Planning).

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

[45] Which is the subsection introduced by the 1968 amendment.

[46] Western Australia, Parliamentary Debates, Legislative Council, 4 November 1969, 2098.

[47] Western Australia, Parliamentary Debates, Legislative Assembly, 6 November 1969, 2285 (Mr Lewis, Minister for Education).

[48] Western Australia, Parliamentary Debates, Legislative Assembly, 12 June 1986, 173 (Mr Pearce, Minister for Planning); Western Australia, _Parliamentary Debate_s, Legislative Council, 2 July 1986, 1199 (The Hon K Hallahan, Minister for Community Services).

[49] Explanatory Memorandum, Planning and Development Bill 2005 (WA), 25.

[50] Explanatory Memorandum, Planning and Development Bill 2005 (WA), 25.

[51] Marshall [38] (Gaudron J); Kettering [31] (McHugh, Gummow, Hayne, Callinan & Heydon JJ).

[52] In this context 'developed' includes any change in use - see s 4(1) PD Act and University of Western Australia v City of Subiaco (1980) 52 LGRA 360, 363 - 364 (Burt CJ); Daniele v Shire of Swan (1998) 20 WAR 164.

[55] Unless further injurious affection is caused by a subsequent amendment to the planning scheme or the imposition of another reservation of the land: s 177(2).

[56] At least not in its primary contentions - see above at [18] and Temwood [108].

[57] Cf WAPC submissions to the primary judge: Leith [45].

[59] Attorney General (WA) v Schoombee [2012] WASCA 29 [41] - [42] (Newnes & Murphy JJA agreeing); see also Victims Compensation Fund Corporation v Brown [2003] HCA 54; (2003) 201 ALR 260 [33] (Heydon J, McHugh ACJ, Gummow, Kirby & Hayne JJ agreeing).

[60] Or deemed to be refused by the effluxion of time.

[61] [2006] WASC 131; (2006) 147 LGERA 33.

[62] cf Wardley Australia Limited v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, 525.

[63] Western Australian Planning Commission v Temwood Holdings Pty Ltd [2004] HCA 63; (2004) 221 CLR 30, especially [95], [102] - [108].

[64] Adopting the language of McHugh J in Temwood [39].

[68] Marshall v Director General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 [38]; Kettering Pty Ltd v Noosa Shire Council [2004] HCA 33; (2004) 78 ALJR 1022 [31].