GAGELER AND NETTLE JJ. Section 177(2) of the Planning and Development Act 2005 (WA) ("the PD Act") stipulates to whom compensation is payable if land is injuriously affected by the making or amendment of a planning scheme reserving land for public purposes. The issue in these appeals is whether s 177(2) of the PD Act affords a right of compensation only to the owner of the land at the time of the land's reservation under the planning scheme or whether s 177(2) also affords an alternative right of compensation to a subsequent purchaser of the injuriously affected land. The judge at first instance (Beech J) and the Court of Appeal of the Supreme Court of Western Australia (Martin CJ, Newnes and Murphy JJA agreeing) held for the latter. For the reasons which follow, we consider that the right of compensation is confined to the former and, on that basis, that the appeals to this Court should be allowed.
The facts and relevant legislation are as set out in the reasons of Kiefel and Bell JJ and need not be repeated.
Proceedings at first instance
At first instance, the following question of law was said to arise in each case from the special case:
"Whether a person to whom s 177(2)(b) of 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."
In answering that question, Beech J acknowledged that, "considered in isolation", the natural reading of s 173 is that it provides compensation only to a person who owns land at the time that a planning scheme is made or amended and thereby injuriously affects the land, and requires that the injurious affection must arise from the making or amendment of the planning scheme, as opposed to its existence. But, his Honour said, to read s 173 as so imposing an unqualified temporal restriction on the entitlement to compensation would be inconsistent with the terms of s 177(2)(b):
"In defining, in s 177(2)(b), the class of persons entitled to make a claim under s 177(1)(b), Parliament has specifically, and unmistakeably, chosen to distinguish the position under s 177(1)(a). Under s 177(1)(a), it is those who own at the time of reservation who can claim. Under s 177(1)(b), it is those who own at the time of the development application. The legislature can be taken to know that most owners acquire title by purchase. One of the two alternative triggering events in s 177(1) is the first sale. In those circumstances, if the legislature had intended that:
(1) upon the first of the alternative triggering events in s 177(1)(a) and s 177(1)(b), the single right to compensation is exhaustively activated; and
(2) thus upon the first sale of the land no further claim for compensation could ever be made;
I think it unlikely that the legislature would have chosen to define the class of persons upon whom the right to claim compensation under s 177(1)(b) was conferred by the general words 'the person who was the owner at the date of the application'. In my view, there is no sufficient foundation in s 177, or elsewhere in pt 11 of the PD Act, for treating the general words of s 177(2)(b) as intended to capture only a (relatively small) subset of those within the ambit of the words used, namely only those who acquired title other than by sale. For these reasons, I consider that the breadth and generality of the language of s 177(2)(b) provides strong support for [the respondents'] construction."
Beech J concluded that the language of s 177(1) and (2) read together is consistent with the creation of two alternative but otherwise independent rights: the first in favour of the owner of the land at the date it is reserved under a planning scheme, being a right to claim compensation when the land is first sold following reservation; and the second in favour of the owner of the land at the date that a development application is made in respect of the land, being a right to claim compensation when and if the application is refused, or granted on unacceptable conditions.
Proceedings in the Court of Appeal
The reasoning of the Court of Appeal was substantially to the same effect and, in the result, Martin CJ, with whom Newnes and Murphy JJA agreed, held that Beech J was correct: on the proper construction of s 177(2)(b) of the PD Act, a person who was not the owner of the land at the time it was reserved for a public purpose, but who acquired the land by purchase after reservation, and who was the owner at the time an application for approval of development on the land was refused, or granted subject to unacceptable conditions, has an entitlement to compensation for injurious affection, provided that compensation arising out of the relevant reservation has not previously been paid.
Constructional choice
In Western Australian Planning Commission v Temwood Holdings Pty Ltd, this Court was divided as to the proper construction of s 36(1), (3) and (3a) of the Metropolitan Region Town Planning Scheme Act 1959 (WA) ("the MRTPS Act"). Those provisions were the legislative predecessors of, and in relevant respects identical in their effect to, ss 173 and 177(1) and (2) of the PD Act. Gummow and Hayne JJ held that s 36(1) established but one entitlement to compensation, which inured in favour only of the owner of the land at the date of the making of a relevant planning scheme, and that the effect of s 36(3) (now, in effect, s 177(1) of the PD Act) was to defer the enforceability of that right until the first to occur of the sale of the land or the rejection, or grant subject to conditions unacceptable to the applicant, of an application for development approval made by the owner of the land. Their Honours reasoned that s 36(3a) (now, in effect, s 177(2) of the PD Act) supported that conclusion. They posited that the reference in s 36(3a)(b) (now, in effect, s 177(2)(b) of the PD Act) to the owner of the land at the date of application "accommodates such special situations 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", and does not apply to purchasers of the land.
McHugh J held, to the contrary, that it was impossible to escape the conclusion that s 36(3a)(b) applied to a subsequent owner, and that there was no reason to confine the class of subsequent owner to those who had obtained ownership otherwise than by purchase of the land. His Honour was of the view that Gummow and Hayne JJ's explanation of s 36(3a)(b), as providing for the special situations of testate and intestate succession, was such an "unlikely construction that it must be rejected". McHugh J concluded that s 36(3a)(a) and (b) created two independent rights and that there was no reason to think that one of those rights should lapse where the other was not pursued.
To similar effect, although for different reasons, Callinan J held that, upon its correct construction, s 11(1) of the Town Planning and Development Act 1928 (WA) ("the TPD Act") (which was imported by s 36(1) of the MRTPS Act (see now, s 173 of the PD Act)) did not confine the right to compensation to the owner of the land at the time of a reservation. It afforded a right to compensation to "[a]ny person" whose land was injuriously affected by the making of a planning scheme and, in Callinan J's view, that included any person who owned the land at the time of reservation or subsequently, if affected by its reservation. Callinan J did not accept that s 36(3) should be read as confined to the first to occur of the sale of the land or the rejection, or grant subject to unacceptable conditions, of a development application, but considered that s 36(3a) prevented double or multiple payments. Heydon J found it unnecessary to deal with the point.
As Martin CJ observed in the Court of Appeal, given the division of opinion in Temwood, it is surprising that the Parliament did not make any change to the form of s 36(3a) of the MRTPS Act when the provision was reconstituted as s 177(2) of the PD Act in 2005. Its retention makes it necessary for this Court now to choose between the competing interpretations of s 36(3a) of the MRTPS Act expressed in Temwood.
Standing alone, s 177(1) of the PD Act conveys the meaning that there is but one right to compensation, which inures in favour of a person whose land is injuriously affected by its reservation for a public purpose under a planning scheme and which becomes payable to that person only once upon the first to occur of the two events specified in pars (a) and (b) of s 177(1). As will become apparent, that meaning also accords with the legislative predecessors of s 177(1). By contrast, if the purpose of s 177(1) were to create two independent rights to compensation (and assuming that were consistent with the remaining provisions of Pt 11, Div 2 of the PD Act) as Beech J and the Court of Appeal held to be the case it is to be expected that s 177(1) would have been drafted in terms that compensation is not payable:
(a) under par (a), until the land is first sold following the date of the reservation; and
(b) under par (b), until 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.
Admittedly, as McHugh J identified in Temwood in relation to s 36(3a) of the MRTPS Act, the difficulty with construing a provision like s 177(1) as providing for compensation to be payable only once upon the first to occur of the two events specified in pars (a) and (b) of s 177(1) is the difference between the way in which the payee is described in s 177. Section 177(2)(a) provides that, where compensation becomes payable upon the first sale of the land following its reservation under a planning scheme, it is payable to "the owner of the land at the date of reservation". In contrast, s 177(2)(b) provides that, where compensation becomes payable upon refusal, or grant subject to unacceptable conditions, of an application for development approval, it is payable to "the owner of the land at the date of application". The difference might be thought to suggest that the owner of the land at the date of the application for development approval could be a person other than the owner of the land at the date of the reservation of the land. That would create the possibility of compensation consequent upon the refusal, or grant subject to unacceptable conditions, of an application for development approval not becoming payable until after the first sale of the land following the reservation. But, as will be seen, the history of the legislation and the extrinsic materials demonstrate that that is not the purpose of the provision.
History of the legislation s 177 of the PD Act and its predecessors
Consideration of a statutory provision's legislative history, and particularly the provision's predecessors, serves to illuminate the meaning most apt to be attributed to it, especially where its meaning appears equivocal. The history of this legislation begins with the TPD Act. So far as is relevant, ss 11 and 12 of the TPD Act provided that:
"11 (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[.]
...
(3) Where a town planning scheme is altered or revoked by an order of the Minister under this Act, any person who has incurred expenditure for the purpose of complying with the scheme shall be entitled to compensation from the responsible authority, in so far as any such expenditure is rendered abortive by reason of the alteration or revocation of the scheme.
...
12 (1) Where land or property is alleged to be injuriously affected by reason of any provisions contained in a town planning scheme, no compensation shall be payable in respect thereof if or so far as the provisions are also contained in any public general or local Act, or in any order having the force of an Act of Parliament, in operation in the area, or are such as would have been enforceable without compensation, if they had been contained in by-laws lawfully made by the local authority."
Plainly enough, s 11(1) of the TPD Act created but one right to compensation a right which inured solely in favour of the owner of the land at the time of the making of the town planning scheme in respect of injurious affection caused to land by the making of a town planning scheme. That was necessarily implicit in the way in which the provision framed injurious affection as an event coincidental with the making of a town planning scheme the occurrence of which immediately gave rise to a right to compensation in the person "whose land" was affected by the event of injurious affection. As is also apparent, the right to compensation so created was liable to be defeated unless the owner of the land at the time of the making of the town planning scheme made his or her claim for compensation within the time limited by the scheme.
The next step was the enactment in 1959 of the MRTPS Act, which established the Metropolitan Region Scheme consequent upon a report commissioned by the Western Australian Government published in 1955 and entitled Plan for the Metropolitan Region: Perth and Fremantle: Western Australia. Section 36 of the MRTPS Act in effect imported ss 11 and 12 of the TPD Act and applied them to the Metropolitan Region Scheme, in modified form, as follows:
"(1) For the purposes of applying the provisions of sections eleven and twelve of the [TPD] Act to the provisions of the [Metropolitan Region] Scheme, the former provisions shall be read and construed as if
(a) the [Metropolitan Region Planning] Authority were the 'responsible authority or local authority' wherever referred to in the sections; and
(b) the passage, 'varied, amplified or revoked by the Authority' were substituted for the passage, 'altered or revoked by an order of the Minister under this Act' in subsection (3) of section eleven; and
(c) those provisions included subsections (3), (4), (5) and (6) of this section.
...
(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 that are unacceptable to the applicant.
(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 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.
(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 or the permission is granted subject to conditions that are unacceptable to the applicant.
(6)(a) Subject to this section, the compensation payable for injurious affection due to or arising out of the land being reserved under the scheme for a public purpose, where no part of the land is purchased or acquired by the Authority, shall not exceed the difference between
(i) the value of the land as so affected by the existence of such reservation; and
(ii) the value of the land as not so affected.
(b) The value referred to in subparagraphs (i) and (ii) of paragraph (a) of this subsection shall be assessed as at the date the land is sold as referred to in paragraph (a) of subsection (3) of this section or the date on which the application for permission to carry out development on the land is refused or the permission is granted subject to conditions that are unacceptable to the applicant."
In the second reading speech relating to the introduction in 1962 of sub‑ss (3)-(5) into s 36 of the MRTPS Act, the Minister explained that the relevant statutory body lacked sufficient immediate resources to compensate all owners whose land might be injuriously affected by the reservation of the large amounts of land which were to be reserved under the Metropolitan Region Scheme. In order to overcome that difficulty, the purpose of s 36(3) was to defer the need to pay compensation until the injurious affection resulting from the reservation of the land came home to the owner upon sale of the land or upon rejection, or grant subject to unacceptable conditions, of an application for development approval:
"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."
Pausing here, the following points may be noted:
(1) By so importing the provisions of s 11(1) of the TPD Act, s 36(1) of the MRTPS Act created a right to compensation which inured solely in favour of the owner of the land at the time of the making of the relevant town planning scheme for the injurious affection caused to the owner's land due to or arising out of the making of the scheme.
(2) By s 36(3) of the MRTPS Act, the enforceability of the right to compensation so created by s 36(1) was deferred so as not to become "payable" until and unless the land were first sold or the relevant statutory body refused an application for development approval or granted the application on conditions which were unacceptable to the applicant.
(3) Because the right to compensation created by s 36(1) inured solely in favour of the owner at the time of the making of the relevant town planning scheme, it was necessarily implicit in s 36(3) that the deferral of the enforceability of that right was a deferral until the first to occur of the first sale of the land following its reservation under the scheme, or a refusal, or grant subject to unacceptable conditions, of an application for development approval.
(4) Perforce of s 36(4)(a)(ii), in the case of the sale of the land, compensation was not "payable" unless, before selling the land, the owner gave notice in writing to the responsible authority of the owner's intention to sell the land.
(5) Perforce of s 36(6)(b):
(a) in the case of a claim for compensation due to or arising out of the sale of the land, compensation was to be assessed as at the date of sale; and
(b) in the case of a claim for compensation arising out of an application for approval to carry out development on the land being refused, or being granted subject to conditions unacceptable to the applicant, compensation was to be assessed as at the date of the refusal, or grant subject to unacceptable conditions, of the application.
(6) In either case, compensation was not payable unless the owner of the land at the time it was reserved made his or her claim for compensation within six months after the first sale of the land, or after the refusal, or grant subject to unacceptable conditions, of an application for development approval, as required by s 36(5).
(7) Since the owner of the land at the date of the reservation under the scheme was the only person capable of making the first sale of the land following the reservation, he or she was referred to in s 36(4)(a)(i), in relation to a claim for compensation consequent upon that sale, as "the owner of the land".
(8) By contrast, since it was possible for a person other than the owner of the land at the date of reservation to make an application for approval to develop the land before the first sale of the land following reservation, s 36(3)(b), (4)(b) and (6)(b) referred, in relation to a claim for compensation consequent upon refusal, or grant subject to unacceptable conditions, of such an application, to conditions that were unacceptable to "the applicant", rather than unacceptable to the owner.
In 1968, the MRTPS Act was amended by the Metropolitan Region Town Planning Scheme Act Amendment Act 1968 (WA) ("the 1968 Amendment Act") by, inter alia, the insertion of a new s 36(3a), as follows:
"(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."
As may be apparent from what has already been said about the history of the legislation, the effect of that amendment was implicit in s 36(3) without the amendment. But, as is clear from the second reading speech concerning the introduction of sub‑s (3a), it emerged that there was some doubt about the matter which needed to be resolved:
"[The amendment] clarifies a provision of subsection (3) of section 36. The wording of the present section leaves some doubt as to the intent of the provision, which indicates that compensation for injurious affection does not become payable in the case of land reserved under the provisions of the metropolitan region scheme until the land is first sold.
The provision for the payment of compensation in such cases was designed to protect the owner of land at the time the scheme or an amendment included land in a reservation so that when he later sells the property he is compensated by the authority if he is unable to realise the full market value. Subsequent purchasers are aware of the scheme provisions at the time of purchase ... and would not be at the same disadvantage as the original owner."
The absence from the second reading speech of any mention of doubt about the identity of the intended payee of compensation consequent upon refusal, or grant subject to unacceptable conditions, of an application for development approval implies that, at that stage, it was not thought that there was any doubt that compensation under s 36(3)(b) was payable only to the person who was the owner of the land at the date of its reservation under the relevant planning scheme.
In 1969, s 36(3a) of the MRTPS Act was amended by the Metropolitan Region Town Planning Scheme Act Amendment Act 1969 (WA) ("the 1969 Amendment Act") so as to introduce the following words into the provision (as indicated by italics):
"Compensation for injurious affection to any land is payable only once under paragraph (a) of subsection (3) of this section and is payable to the person who was the owner of the land at the date of reservation referred to in that paragraph, unless after the payment of that compensation further injurious affection to the land results thereafter from an alteration of the existing reservation on the land or the imposition of another reservation thereon."
Once again, it may be appreciated from what has already been said that the effect of this amendment was implicit in s 36(3) prior to the further amendment in 1969, especially following the introduction of s 36(3a) in 1968. But, as was explained in the second reading speech pertaining to the 1969 Amendment Act, some doubt had arisen since the last occasion:
"Last year I introduced an amendment to the Metropolitan Region Town Planning Scheme Act which, among other things, attempted to define more clearly the meaning of 'first sold' as it relates to the payment of compensation for injurious affection.
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." (emphasis added)
Pausing at that point, it is to be observed that, despite the stated doubts about the meaning of s 36(3a) and, consequently, about the meaning of s 36(3)(a), it was not then suggested that there was any doubt about the meaning of s 36(3)(b). Noting the emphasised sections of the second reading speech last referred to, it appears to have been thought clear that compensation was payable under s 36(3)(b) only in relation to a refusal, or grant subject to unacceptable conditions, of a development application lodged before the date of the first sale of the land following reservation and, in that event, only to the person who was the owner of the land at the date of reservation.
In 1986, s 36 of the MRTPS Act was further amended by the Metropolitan Region Town Planning Scheme Amendment Act 1986 (WA) ("the 1986 Amendment Act") as follows:
"Section 36 of the [MRTPS] Act is amended by repealing subsection (3a) and substituting the following subsection
'(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.'"
As was earlier noticed, standing alone, s 36(3a) as so amended could perhaps be read as signifying that the person referred to in s 36(3a)(a) as "the person who was the owner of the land at the date of reservation" need not be the same person as the person referred to in s 36(3a)(b) as "the person who was the owner of the land at the date of application". But if that were so, it would have meant that, as a result of the 1986 amendment to s 36(3a), the effect of s 36(3) also had been changed with effect that, thenceforth, if the owner of the land at the date of reservation did not claim compensation under s 36(3)(a) or (b), a subsequent purchaser of the land could claim compensation under s 36(3)(b). Read against the background of the legislative history that has been referred to, that presents as most unlikely.
If it had been so, it would have meant that the amendment had worked a fundamental change to the central concept of s 36(1) (that the right to compensation for which it provides should inure solely to the benefit of a person who was the owner of land at the date of the making of a town planning scheme) and further a fundamental change to the central concept of s 36(3) (that the enforceability of the right to compensation for which s 36(1) provides should be deferred until the first to occur of the first sale of the land following its reservation under a scheme or the refusal, or grant subject to unacceptable conditions, of an application for development approval). There is, however, nothing otherwise about the 1986 Amendment Act which suggests that its purpose was to make fundamental changes to the MRTPS Act and, so far as may be relevant, the second reading speech relating to the 1986 Amendment Act expressly states to the contrary:
"The matters provided for in this Bill do not constitute major changes to the present metropolitan region scheme legislation but they are part of the Government's comprehensive package of initiatives for speeding up and improving the statutory planning process. ...
[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." (emphasis added)
Admittedly, it is not entirely clear what other purpose the drafter of the 1986 Amendment Act had in mind in drawing the distinction between "the person who was the owner of the land at the date of reservation" in s 36(3a)(a) and "the person who was the owner of the land at the date of application" in s 36(3a)(b). But, if the object of the exercise had been to create two independent rights to compensation, to amend s 36(3a) in the way that was done would have been a very odd way of going about it. For, as has been emphasised, prior to 1986, the only right to compensation was the right to compensation created by s 36(1) (read in conjunction with s 11 of the TPD Act), which inured solely in favour of the owner of the land at the time of the making of the relevant planning scheme. Thus, it is clear that until 1986 the sole function of s 36(3) (read in conjunction with s 36(3a)) was to defer the enforceability of the right created by s 36(1) until the first to occur following the reservation of the land under a scheme of the sale of the land or the rejection, or grant subject to unacceptable conditions, of a development application. Accordingly, if the purpose of the 1986 amendment to s 36(3a) had been to create a new right in favour of a subsequent purchaser that is, a right in favour of a subsequent purchaser to compensation consequent upon an unsuccessful application for development approval lodged by the subsequent purchaser after the first sale of the land it is only to be expected that the 1986 Amendment Act would have been directed to restructuring the right-creating provisions of s 36(1), rather than amending the deferment-of-enforceability provisions of s 36(3a) while making no change to s 36(1).
If, however, the purpose of the 1986 amendment were merely to emphasise that the enforceability of the right to compensation created by s 36(1) was deferred until the first to occur of a sale of the land and a rejection, or grant subject to unacceptable conditions, of a development application as was stated to be the case in the second reading speech it makes evident sense that the amendment was confined to the deferment-of-enforceability provisions of s 36(3a) and made no change to the right-creating provisions of s 36(1).
No doubt the purpose of so emphasising the deferment of the right to compensation could have been achieved without drawing the distinction in s 36(3a) between the "owner of the land at the date of reservation" and the "owner of the land at the date of application". But it will be recalled that, even as it stood prior to the 1968 Amendment Act, and certainly at each point afterwards until the 1986 Amendment Act, s 36 drew a comparable distinction. Since the owner of the land at the date of reservation was understood to be the only person capable of making the first sale of the land following reservation, he or she was referred to in s 36(4)(a)(i) (in relation to a claim for compensation consequent upon the first sale of the land following the reservation) simply as "the owner of the land". By contrast, since it was possible for a person other than the owner of the land at the date of reservation to make an application for development approval before the first sale of the land following reservation, s 36(3)(b), (4)(b) and (6)(b) referred to "the applicant", rather than the owner, in relation to a claim for compensation consequent upon a refusal, or grant subject to unacceptable conditions, of such an application. The distinction drawn in s 36(3a) as amended by the 1986 Amendment Act between the owner of the land at the date of reservation and the owner of the land at the date of application is consistent with that approach and more generally with the history of the legislation.
More particularly, when s 36(3a) was amended in 1969, the fact that compensation consequent upon the first sale of the land following reservation was payable only to the owner of the land at the date of reservation was emphasised by an express statement to that effect. The fact that a corresponding amendment was not made in relation to compensation arising from an anterior rejection, or grant subject to unacceptable conditions, of an application for development approval implied that, at least at that stage, it was not considered to be in doubt that compensation of the latter variety was payable only to the owner of the land at the date of reservation. As a result, when in 1986 it was decided that an amendment was required to make that position clearer (as was stated to be the case in the second reading speech pertaining to the 1986 Amendment Act) it appears most likely that the reason the drafter referred in s 36(3a)(b) to "the person who was the owner of the land at the date of application" was to recognise that a person other than the owner of the land at the date of reservation was capable of making a development application in relation to the land before the first sale of the land, and, therefore, to make clear that, in the event of such an application being made, compensation would be payable to the owner of the land at the date of application, rather than to the applicant.
As counsel for the appellant emphasised in argument, it had been commonplace since at least 1963 for an owner of land to allow a prospective purchaser of the land to apply for development approval in order to assess the development potential of the land. If such an application were successful, the sale price could then be structured accordingly and, in that event, there would be no occasion for compensation. If the application were unsuccessful, the owner might then claim compensation under s 36(3)(b) without proceeding to sale. Hence it appears that the purpose of s 36(3a)(b) was to stress that the compensation would be payable to the "owner of the land at the date of application" rather than to the "applicant".
A further and related reason to draw such a distinction between the owner at the date of reservation and the owner at the date of application was that the expression "owner of the land at the date of application" aligned with the circumstance that, under s 36(6)(b), the amount of compensation payable pursuant to s 36(3)(b) was to be assessed as at the date on which the application was refused, or granted subject to conditions unacceptable to the applicant. Yet another reason might have been that, because s 36(3a)(a) provided that compensation arising upon the first sale of the land following reservation was payable to the owner of the land at the date of reservation (in contradistinction to the owner of the land at the date of sale), and by that means excluded the possibility of compensation being payable to the purchaser, consistency of approach was thought to require that s 36(3a)(b) should provide for compensation payable to the owner of the land at the date of application (in contradistinction to the owner of the land as at the date of rejection, or grant subject to unacceptable conditions, of the application), and by that means to exclude the possibility of compensation being payable to a purchaser under a contract of sale made between the date of application and the date of refusal, or grant subject to unacceptable conditions, of the application.
As was earlier observed, in Temwood Gummow and Hayne JJ posited that the reason for the distinction between "owner" in s 36(3a)(a) and (b) was to make specific provision for the testate and intestate successors of the owner of the land at the date of reservation. McHugh J regarded that idea as untenable; and, with respect, it is difficult to defend. The improbability of the purpose of the distinction being to provide for testate and intestate succession is illustrated by the circumstance recognised by Beech J and the Court of Appeal that, although the testate and intestate successors of the owner of the land at the date of reservation would be able to claim compensation in the event of the refusal, or grant subject to unacceptable conditions, of a development application, they would be denied the right to claim compensation upon the first sale of the land. There is no logic in that. Alternatively, if it is to be assumed that "the person who was the owner of the land at the date of reservation" includes the testate and intestate successors in title of the person who was the legal owner of the land at the date of reservation, the distinction would be pointless.
It remains, however, that, because there were other logical and more compelling reasons for the drafter of the 1986 Amendment Act to draw a distinction between the owner at the date of reservation and the owner at the date of application, there is good reason to eschew a construction of the amendment to s 36(3a) that would have brought about a fundamental change in the structure of the compensation provisions of the MRTPS Act. Viewed against the history of the legislation, it is very much more probable, and therefore the preferable construction, that the amendment proceeded from the assumption implicit in the MRTPS Act from its inception that the right to compensation identified in s 36(3)(b) could only ever arise in the event of an unsuccessful development application lodged before the first sale of the land following reservation and, in that event, compensation would be payable to the owner of the land, rather than the applicant for development approval.
Is that sufficient reason to prefer the meaning of s 36(3a) identified by Gummow and Hayne JJ to the meaning identified by McHugh J? Counsel for the respondents submitted that to construe the legislation in the manner identified by Gummow and Hayne JJ would require reading in a large number of words or reading the terms of the legislation otherwise than according to their natural and ordinary meaning. That is not so. It is true that, according to orthodox statutory interpretation principles, the difference between the expressions "owner of the land at the date of reservation" and "owner of the land at the date of application" prima facie suggests that each expression has a different meaning. But, given that the right to compensation created by s 36(1) was the right to compensation under s 11(1) of the TPD Act (as modified by s 36(1) and following provisions), which inured solely for the benefit of the owner of land at the time the relevant planning scheme was made, it logically accords with the scheme of the legislation and is not repugnant to the natural and ordinary meaning of the text to construe the difference between the two expressions as denoting no more than the two different circumstances in which compensation was payable to the person who was the owner of the land at the time it was reserved for a public purpose under a planning scheme: either the first sale of the land following reservation (hence, "the owner of the land at the date of reservation"); or, if an application for development approval were lodged before the first sale of the land following reservation, rejection, or grant subject to unacceptable conditions, of that application (hence, "the owner of the land at the date of application").
Counsel for the respondents further submitted that to construe the legislation in the manner identified by Gummow and Hayne JJ would lead to the irrational consequence that, if a person who was an owner of land at the date of reservation entered into a contract for sale of the land which remained uncompleted at the date of reservation, the owner of the land at the date of reservation would receive the benefit of having sold the land at a pre-reservation price, and yet would be entitled to claim compensation, whereas the purchaser, who agreed to pay a pre-reservation price, would be precluded from claiming compensation. By contrast, it was said that, if the provisions were construed as creating two independent rights to compensation in the manner identified by McHugh J, it would conduce to the more just and, therefore, more likely intended result that the purchaser would be entitled to claim compensation. But that submission is not persuasive either.
Assuming the facts were as suggested, the vendor would have been the owner of the land at the date of reservation and the only person entitled to claim compensation under s 36. Although a purchaser under an uncompleted contract of sale of land has an equitable interest in the land, or at least acquires an equitable interest in the land once the contract becomes enforceable by specific performance, the way in which s 36 referred to the owner and provided for payment of compensation only once signifies that what was meant by "the owner of the land" was the legal owner of the land. But it is unlikely that an owner of land would have been able to sell the land at a pre-reservation price so shortly before the land was to be reserved that the contract of sale would remain uncompleted at the date of reservation. (The notice provisions of the MRTPS Act meant that the possibility of reservation would have been announced long before the date of reservation.) And, even if that did occur, the amount of compensation payable to the owner under s 36(3)(a) would have been nil. Section 36(6) capped the amount of compensation payable at the difference between the values of the land as unaffected by the reservation and the land as so affected, and, ex hypothesi, the owner would have received under the contract the value of the land as unaffected. Certainly, in those circumstances, the purchaser would have had no right to compensation. But, as was submitted in the course of argument, the only circumstance in which a purchaser would have need of compensation would be where the purchaser had failed to undertake the kinds of inquiries which the Parliament considered ought ordinarily to be undertaken and if undertaken would have revealed that the land was likely to be reserved. As was noticed in the second reading speech pertaining to the 1968 Amendment Act, purchasers are aware of the scheme provisions at the time of purchase and are not at the same disadvantage as the original owner.
When the PD Act was enacted in 2005, it had as one of its objects consolidation of the MRTPS Act and the TPD Act. Consequently, as has been seen, Div 2 of Pt 11 of the PD Act (ss 172-183) appears in substantially identical terms to the comparable provisions of the MRTPS Act and the TPD Act. It is accepted that mutatis mutandis the provisions of the PD Act are to be construed as having the same effect as the predecessor provisions. It follows that s 177(2)(b) is to be construed as having the same operation as s 36(3a)(b) of the MRTPS Act.
Conclusion
For these reasons, we consider that the appeals should be allowed with costs and agree with the orders proposed by Kiefel and Bell JJ.