City of Canning v Avon Capital Estates (Australia) Ltd
[2012] WASC 410
•2 NOVEMBER 2012
CITY OF CANNING -v- AVON CAPITAL ESTATES (AUSTRALIA) LTD [2012] WASC 410
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 410 | |
| Case No: | ARB:11/2011 | 3 OCTOBER 2012 | |
| Coram: | ALLANSON J | 2/11/12 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed in part otherwise dismissed | ||
| B | |||
| PDF Version |
| Parties: | CITY OF CANNING AVON CAPITAL ESTATES (AUSTRALIA) LTD JAMES CHARLES SHOLTO BURCHETT |
Catchwords: | Planning and development Planning and Development Act 2005 (WA) Reservation of land for a public purpose Injurious affection of land Assessment of value of land Turns on own facts Arbitration Commercial Arbitration Act 1985 (WA) Technical misconduct Turns on own facts |
Legislation: | Commercial Arbitration Act 1985 (WA), s 38, s 42 Metropolitan Region Town Planning Scheme Act 1959 (WA), s 34 Metropolitan Water Supply Sewerage and Drainage Act 1909 (WA), s 50A Planning and Development Act 2005 (WA), s 174, s 176, s 179 Public Works Act 1902 (WA), s 63 |
Case References: | Bank of NSW v The Commonwealth [1948] HCA 7; (1948) 76 CLR 1 Bond Corporation Pty Ltd v The Western Australian Planning Commission [2000] WASCA 257; (2000) 110 LGERA 179 City of Canning v Avon Capital Estates (Australia) Ltd [2012] WASC 223 Collector of Customs v AgfaGevaert Ltd [1996] HCA 36; (1996) 186 CLR 389 Forsayth NL v Australasian Gold Mines NL (1992) 7 WAR 549 Gebauer Nominees Pty Ltd v Cole [No 2] [2008] WASCA 41 Griffiths University v Tang [2005] HCA 7; (2005) 221 CLR 99 Housing Commission of New South Wales v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196 McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426 Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226; (2007) 34 WAR 499 Oil Basins Ltd v BHP Billiton Ltd [2007] VSCA 255; (2007) 18 VR 346 Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands (Trinidad) [1947] AC 565 R v Brown [1996] 1 AC 543 R v Compensation Court (WA); Re Della-Vedova (1990) 2 WAR 242 Springfield Land Corporation (No 2) Pty Ltd v State of Queensland [2011] HCA 15; (2011) 242 CLR 632 Thoroughvision Pty Ltd v Sky Channel Pty Ltd [2010] VSC 139 Transport for London v Spirerose Ltd [2009] 1 WLR 1797 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259 Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 Westport Insurance Corporation v Gordian Runoff Limited [2011] HCA 37; (2011) 244 CLR 239 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- GDA 10 of 2011
- Applicant
AND
AVON CAPITAL ESTATES (AUSTRALIA) LTD
First Respondent
JAMES CHARLES SHOLTO BURCHETT
Second Respondent
ON APPEAL FROM:
Jurisdiction : COMMERCIAL ARBITRATION
Coram : JCS BURCHETT QC
Citation : CITY OF CANNING AND AVON CAPITAL ESTATES (AUS) PTY LTD
(Page 2)
Catchwords:
Planning and development - Planning and Development Act 2005 (WA) - Reservation of land for a public purpose - Injurious affection of land - Assessment of value of land - Turns on own facts
Arbitration - Commercial Arbitration Act 1985 (WA) - Technical misconduct - Turns on own facts
Legislation:
Commercial Arbitration Act 1985 (WA), s 38, s 42
Metropolitan Region Town Planning Scheme Act 1959 (WA), s 34
Metropolitan Water Supply Sewerage and Drainage Act 1909 (WA), s 50A
Planning and Development Act 2005 (WA), s 174, s 176, s 179
Public Works Act 1902 (WA), s 63
Result:
Appeal allowed in part otherwise dismissed
Category: B
Representation:
Counsel:
Applicant : Mr B W Walker QC, Mr K M Pettit SC & Mr P L Wittkuhn
First Respondent : Mr J D Elliott SC, Mr P G McGowan & Mr A A Segal
Second Respondent : No appearance
Solicitors:
Applicant : McLeods
First Respondent : DLA Piper Australia
Second Respondent : No appearance
(Page 3)
Case(s) referred to in judgment(s):
Bank of NSW v The Commonwealth [1948] HCA 7; (1948) 76 CLR 1
Bond Corporation Pty Ltd v The Western Australian Planning Commission [2000] WASCA 257; (2000) 110 LGERA 179
City of Canning v Avon Capital Estates (Australia) Ltd [2012] WASC 223
Collector of Customs v AgfaGevaert Ltd [1996] HCA 36; (1996) 186 CLR 389
Forsayth NL v Australasian Gold Mines NL (1992) 7 WAR 549
Gebauer Nominees Pty Ltd v Cole [No 2] [2008] WASCA 41
Griffiths University v Tang [2005] HCA 7; (2005) 221 CLR 99
Housing Commission of New South Wales v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196
McKay v Commissioner of Main Roads [No 7] [2011] WASC 223
Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426
Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226; (2007) 34 WAR 499
Oil Basins Ltd v BHP Billiton Ltd [2007] VSCA 255; (2007) 18 VR 346
Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands (Trinidad) [1947] AC 565
R v Brown [1996] 1 AC 543
R v Compensation Court (WA); Re Della-Vedova (1990) 2 WAR 242
Springfield Land Corporation (No 2) Pty Ltd v State of Queensland [2011] HCA 15; (2011) 242 CLR 632
Thoroughvision Pty Ltd v Sky Channel Pty Ltd [2010] VSC 139
Transport for London v Spirerose Ltd [2009] 1 WLR 1797
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259
Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514
Westport Insurance Corporation v Gordian Runoff Limited [2011] HCA 37; (2011) 244 CLR 239
(Page 4)
- ALLANSON J:
The appeal
1 Avon Capital Estates (Australia) Ltd owns a strip of land in the Ranford Estate, a residential estate in Canning Vale. On 18 February 1994, the City of Canning made Town Planning Scheme 40 (TPS 40). Avon's land was reserved in TPS 40 as a Local Authority Public Purpose Reserve.
2 By s 174 of the Planning and Development Act 2005 (WA), 'land is injuriously affected by reason of the making or amendment of a planning scheme if … that land is reserved (whether before or after the coming into operation of this section) under the planning scheme for a public purpose'.
3 Avon lodged a claim for compensation for injurious affection under pt 11 of the Planning and Development Act. An arbitrator determined that Avon is entitled to compensation.
4 The facts, however, are unusual. Avon acquired the land where the Ranford Estate now stands in 1982. The land was then zoned rural under the Town of Canning Town Planning Scheme No 16 (TPS 16). Avon developed and sold the Ranford Estate, while retaining the strip of land.
5 Before Avon acquired the land, a predecessor of the Water Corporation laid two steel pipes, comprising the Serpentine Trunk Main, under the surface of the land. One pipe was laid in 1959 and the other in about 1965. The strip Avon retained is a corridor through the Ranford Estate containing the pipes. Avon accepted, through counsel, that if the strip of land had not been reserved, 'then the value of the land would be the freehold with the pipes in it, with the restrictions that came with the pipes' (ts 224).
6 Despite these facts, and that concession, Avon contends that it is entitled to be compensated for injurious affection arising from the reservation as if the strip could have been developed for housing had it not been reserved. And the arbitrator so found. This perhaps surprising result is said to flow from the construction of s 179 of the Planning and Development Act when that section, read literally, does not produce it. Avon also relies on authority, although on the application of quite differently worded legislation. It appears there is no authority on the application of s 179, or earlier enactments in similar terms: Metropolitan Region Town Planning Scheme Act 1959 (WA) s 36(6); Western Australian Planning Commission Act 1985 (WA) s 34.
(Page 5)
7 The City appeals from the arbitrator's finding and the award of compensation under s 38 of the Commercial Arbitration Act 1985 (WA). The appeal lies 'on any question of law arising out of an award': s 38(2). In an earlier decision, I granted leave to appeal on two of eleven proposed grounds of appeal: City of Canning v Avon Capital Estates (Australia) Ltd [2012] WASC 223. The first ground has two parts:
The Arbitrator erred in law:
(a) by disregarding the fact of existing STM pipes in his calculation of 'the value of the land as not so affected' for the purposes of s 179(1)(b) Planning and Development Act 2005, when he should have held that that value is to be calculated assuming the STM pipes were present
(b) by awarding compensation in respect of the STM pipes when, for the purposes of s 173(1) Planning and Development Act, he should have held that a claim lies in respect of only the reservation of the land. (original emphasis)
8 Section 179 of the Planning and Development Act provides for assessing the amount of the compensation when no part of the land is acquired. It states:
(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.
- Subsection (2) provides for the date at which the values are to be assessed, in this case, in January 2007 when an application by Avon for development approval was granted subject to unacceptable conditions.
9 Avon submits that the value of the land 'as not so affected' is its value assessed as though the pipes did not run through it. This is because, on the findings of fact made by the arbitrator, the laying of the pipes and the attendant statutory restrictions on the use of the land was part of a process or scheme by the City to reserve the land.
10 The arbitrator's findings of fact cannot be challenged in this appeal. For the purpose of setting out the findings, it is convenient to refer to the
(Page 6)
- various bodies which had statutory authority for water supply over the years as the 'water authority'. Each of those bodies was a public authority. They are distinct entities from the City which, under the Local Government Act 1995 (WA)and its predecessor, is a body corporate established as the local government of the district.
11 Avon submits that the arbitrator made the following relevant findings (ts 204):
(1) the pipes were laid by the water authority;
(2) the water authority which laid the pipes had an intention to resume the land;
(3) the water authority believed it had resumed the land because it asserted title to it from at least the early 1980s;
(4) from October 1973 there were failed attempts to make the land the subject of reservation for public purposes;
(5) those failed attempts were wrongly assumed to be effective;
(6) in February 1994 a reservation was successfully imposed;
(7) at the time of the attempts to reserve and at the time of the actual reservation, all parties, that is, the water authority, the City, and Avon, believed the land was owned by the water authority;
(8) the water authority had 'put itself forward persistently as concerned that the land should be devoted to the purposes of the Serpentine Trunk Main';
(9) that concern of the water authority and its requirements were adopted by the City and the reservation was imposed.
12 The last of these may overstate the actual findings. The arbitrator said (at [36]):
[I]n the case before me, the City's action was neither anterior to, nor disconnected from, the actions of the Water Corporation. Indeed, the Corporation had put itself forward persistently as concerned that the land should be devoted to the purposes of the Serpentine Trunk Main. The anterior action was that of the Corporation, but it was adopted by the City when the reservation was imposed.
(Page 7)
13 The reference to the 'anterior action' picks up some of the language of the High Court in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259 [54], where the anterior actions were 'discussions or agitations … in favour of classifying the Land as public space'. Whether the arbitrator was referring to the water authority putting forward its concerns, or whether he was referring to the act of laying the pipes, is unclear.
14 The arbitrator also found that the preservation of the trunk main was 'the very purpose of the reservation. It was not merely a purpose, it was the operative purpose which produced the reservation' (original emphasis) [42]. On that finding, and on his analysis of the authorities, he concluded at [43]:
[W]hen s 179(2)(c) of the PD Act requires me to assess the value of the STM land (at the date of the grant of approval on unacceptable conditions, ie at 30 January 2007) as not affected by the existence of the reservation, I am required to do so on the hypothetical basis that the value was also not affected by the trunk mains, that is, effectively, that they did not exist in the land.
15 In my opinion, that reasoning and the result are wrong in law.
16 The arbitrator applied s 179(1) of the Planning and Development Act by reference to what is generally called the Pointe Gourde principle (from Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands (Trinidad)[1947] AC 565, 572).
17 There is no common law principle derived from Pointe Gourdeand the cases which follow it. It is a principle of statutory interpretation applied to explain and amplify the term 'value' in particular statutory provisions for compensation for compulsory acquisition: Transport for London v Spirerose Ltd [2009] 1 WLR 1797, 1832; Springfield Land Corporation (No 2) Pty Ltd v State of Queensland [2011] HCA 15; (2011) 242 CLR 632 [17]. In Walker the court emphasised:
It is the terms of that legislation that are determinative and it is not to be assumed that they reproduce or attempt to reproduce an understanding of 'principles' derived by way of gloss upon the spare terms of ss 49 and 63 of the 1845 Act [47].
- See also Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226; (2007) 34 WAR 499 [15]; McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 [206] - [207].
(Page 8)
18 Section 179 of the Planning and Development Act is concerned with compensation for injurious affection when there has been no acquisition. The language of the section directs the arbitrator to the effect of the existence of the reservationof the land under the planning scheme. The injurious affection referred to in s 179 (and earlier in s 174) is that described in Bond CorporationPty Ltd v The Western Australian Planning Commission [2000] WASCA 257; (2000) 110 LGERA 179:
Owners of land suffer loss merely by the reservation of land for public purposes. That loss is constituted simply by the reduction in the market value of the land caused by the reservation and the inability of the owner to use the land for purposes conflicting with the reservation (even where the owner does not intend to develop the land in any way) [34].
19 The reservation imposed restrictions on Avon's potential use of the land: under TPS 40, cl 2.1.4 to cl 2.1.7, a Local Authority Reservation may be used only for the purpose for which the land is reserved under the scheme; a person may not commence or carry out any development or construct, extend or alter any building or structure without the approval of the City. The City may either refuse its approval, or grant its approval without conditions or with such conditions as it thinks fit. But had the land not been reserved, (as conceded by Avon) it would have been subject to restrictions on its use: for example, by s 50A of the Metropolitan Water Supply, Sewerage, and Drainage Act 1909 (WA). To arrive at the result he did, the arbitrator had to disregard the pipes and those restrictions which result from their presence.
20 The presence of the pipes cannot be disregarded in assessing the 'as not so affected' value of the land under s 179(1)(b) for the following reasons.
21 First, the disregard of the pipes in assessing the value of the land, as not affected by the existence of the reservation, does not arise out of the natural meaning of the words in s 179(1) and (2).
22 Second, the terms of s 179 are very different from the particular provisions where the court has applied the Pointe Gourdeprinciple so as to disregard restrictions that were imposed as steps in or as part of a process of resumption. Counsel for Avon relied on the word 'value' in s 179(1)(b). But in construing any provision, the court must look to the provision as a whole: see Griffiths University v Tang [2005] HCA 7; (2005) 221 CLR 99 [60]; Collector of Customs v AgfaGevaert Ltd [1996] HCA 36; (1996) 186 CLR 389, 396 - 397, citing Lord Hoffman in R v Brown [1996] 1 AC 543, 561. The word 'value' does not carry the same
(Page 9)
- connotations in the context of s 179 as it may in a provision which requires land to be valued on acquisition and 'without regard to any increased value occasioned by the proposed public work'.
23 Third, even were the principle to apply, the facts found by the arbitrator do not show the kind of relationship between the laying of the pipes and the reservation that leads to the conclusion that the laying of the pipes, with the accompanying restrictions on the use of the land, can properly be regarded as a step in the process of reservation.
24 The arbitrator relied upon the adoption by the City of the anterior acts of the water authority. I am not sure what was meant by adoption in these circumstances, or how it could have the legal effect suggested. Even if the City later acted for the same purpose that had led the water authority to press for the land to be devoted to the purposes of the trunk main, that does not make the act of laying the pipes in some way the act of the City.
25 On the facts found, the water authority in 1959 and again in 1965 laid the pipes, intending to resume the land and believing it had done so. The City later reserved the land because it contained the pipes, and (if belief is relevant) believing the land was owned by the water authority. The City had no purpose of reserving the land as a Local Authority Reserve which it urged on the water authority. Paraphrasing Jacobs J in Housing Commission of New South Wales v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196, 207: no public purpose, existing or anticipated, intended, or urged by the City led to the laying of the pipes; rather the presence of the pipes led to the public purpose of restricting the use of the land in which they lay, and the reservation. That connection between the laying of the pipes and the reservation is not a basis for disregard of the existence of the pipes.
26 For these reasons the arbitrator erred in law in assessing value, as not affected by the existence of the reservation, on the hypothetical basis that the value was also not affected by the trunk mains. I would uphold ground 1(a) and allow the appeal. It is not necessary to separately consider ground 1(b), which does not add anything to the first paragraph.
27 Ground 2 is an alternative, should I find that the arbitrator correctly held that the presence of the pipes should be disregarded in determining the 'as not so affected' value. It is not necessary to consider it further.
28 Before leaving the grounds of appeal, I should comment briefly on the decision in R v Compensation Court(WA); Re Della-Vedova (1990)
(Page 10)
- 2 WAR 242, a decision on which both the arbitrator and Avon relied. In that case, under s 63 of the Public Works Act 1902 (WA), the Compensation Court had determined the amount of compensation to be awarded for land that had been resumed by the State Planning Commission. Section 63(a) required the court to have regard to 'the value of such land with any improvements thereon, or the estate or interest of the claimant therein, as on the date of the gazetting of the notice of the taking or resumption, without regard to any increased value occasioned by the proposed public work'. There were electricity transmission lines, supported by pylons, over part of the land. In assessing the value of the land, the Compensation Court included the value of land under the transmission line, valued on the hypothesis that no transmission line was present.
29 On an application for certiorari, the Full Court held that the applicant could not challenge the Compensation Court's finding of fact that one of the purposes of the resumption was to acquire the land to protect the pylons and transmission lines, or, in other words, one of the purposes of acquisition was for the public work which had already been executed upon the support land. Their Honours in the Full Court gave various reasons for supporting the decision below. Their Honours appear to have agreed that, on the Compensation Court's finding of fact, the carrying out of the public work and the subsequent resumption were inter-related and part of a scheme or project of resumption: Wallace J (257); Brinsden and Walsh JJ (265). On that finding, Brinsden and Walsh JJ saw the case as falling within Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426, in which the Privy Council held that the principles stated in Pointe Gourde apply equally to any decrease in the value of the land due to the scheme underlying the acquisition.
30 At a basic level, there are two inter-related reasons why the decision should be distinguished. First, there is the different wording of the two statutory provisions. Second, this different wording reflects two different functions. The court in Della-Vedova was valuing land following resumption, not determining the compensation payable for injurious affection where no part of the land has been acquired. The distinction is apparent within the Planning and Development Act when the terms of s 179 are compared with s 188 (valuing land to be acquired). Decisions on the construction and application of differently worded provisions which are directed to a different, though related, question cannot determine the meaning of s 179.
(Page 11)
Misconduct
31 The City brought a concurrent application for the award and orders of the arbitrator to be set aside under s 42 of the Commercial Arbitration Act on the ground of misconduct on the part of the arbitrator in conducting the proceedings. Alternatively, the City sought a declaration that the award is not binding 'in that it was made without jurisdiction and in breach of the Arbitration Agreement'.
32 There were two allegations pursued:
(1) the arbitrator failed to properly address the City's contentions about the vesting of the land in the water authority and the implications of that vesting;
(2) the arbitrator failed to address the City's evidence and contentions concerning actions of Avon which caused an under-utilisation of the reserved land.
33 Each is said to support a finding of misconduct, in the sense that there has been a mistake in procedure that has or may have unjustly prejudiced the City: see, for example, Thoroughvision Pty Ltd v Sky Channel Pty Ltd[2010] VSC 139 [28] - [29].
34 Under s 176(2) of the Planning and Development Act, '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 … is to be determined by arbitration under and in accordance with the Commercial Arbitration Act, unless the parties agree on some other method of determination'. The parties proceeded by arbitration, and the parties and the arbitrator executed an arbitration agreement.
35 Under the heading 'Background', the agreement recited:
A The Claimant has made a claim for compensation for injurious affection of land it is the registered proprietor of, located in a subdivision known as the Ranford Estate arising out of a reservation of the land by the Respondent.
B The Respondent denies that the Land in question has been injuriously affected as alleged by the Claimant and further denies that the Claimant is entitled to compensation arising from the alleged reservation.
C The Parties are therefore in dispute over the entitlement to compensation (Dispute).
(Page 12)
- D The Parties are now proceeding to arbitration of the Dispute and related issues including but not limited to the amount of compensation payable to the Claimant by the Respondent in the event that the Respondent is found liable to pay compensation to the Claimant.
36 In the first of its operative provisions, the parties appointed the arbitrator and the arbitrator accepted the appointment to arbitrate the 'Dispute'. The City emphasised the breadth of the arbitration agreement, arguing that it goes beyond the matters reserved to arbitration under s 176(2) of the Planning and Development Act. Certainly Recital D suggests that the arbitration goes beyond the Dispute (the entitlement to compensation) and includes 'related issues'. The City accepted, however, that whether the land was injuriously affected had been determined by the decision of the State Administrative Tribunal.
37 It is not necessary to determine whether the breadth of the arbitration agreement would include matters falling outside the Planning and Development Act. While the defined Dispute is broad, s 176(2) is similarly broad in its reference to 'any question as to the amount'. The City's written submissions included the proposition that 'the Dispute' must be taken to include all of the issues pleaded, except to the extent that a party asserted validly that a pleading was outside 'the Dispute'. The two matters they relied upon, however, were more limited and do not require me to accept the City's submission at its extreme.
The vesting point
38 The City contended that Avon did not own all of the reserved land as, by force of certain statutory provisions, part of the land was vested in the Minister referred to in the Metropolitan Water Supply, Sewerage, and Drainage Act. To that extent, Avon was not a person whose land was injuriously affected and was not entitled to obtain compensation. This contention was pleaded in par 58(a) of the City's defence, argued in opening submissions, and adopted in its closing submissions.
39 In its closing, Avon submitted that nothing in the sections relied upon by the City provided that it owned the land - at most it established that the pipes vested in the Minister but this did not extend to the land above, below, or on either side of the pipes.
40 In its written submissions in the application under s 42, the City says that its claim raised three points for determination: whether something was vested in the water authority; if so, what that something was; and, if land was vested, what is the nature of that vesting [108]. It says the
(Page 13)
- arbitrator dismissed the first point in error, did not address the second, and purported to dismiss the third as 'anomalous'. It further says that because Avon's claim was for compensation for the whole of the reserved land, with no alternative claim confined to the balance, the arbitrator was required to determine the vesting point and, presumably, identify the land for which compensation was awarded.
41 The arguments about vesting were also the subject of proposed ground 6 in the application for leave to appeal, and the argument is outlined at [112] - [125] of my decision in that application. I do not need to set it out here, because the misconduct alleged is a failure by the arbitrator to deal in his reasons with relevant substantial submissions. Such a failure may be misconduct: see Oil Basins Ltd v BHP Billiton Ltd[2007] VSCA 255; (2007) 18 VR 346 [76]. On the other hand, errors of law, even gross errors of law, made in determining the substantive issues in the arbitration, in themselves are not misconduct: Forsayth NL v Australasian Gold Mines NL (1992) 7 WAR 549, 560; Gebauer Nominees Pty Ltd v Cole [No 2] [2008] WASCA 41 [62].
42 The threshold question is whether the arbitrator dealt with the vesting point. He did not use the word 'vesting', referring instead to 'some kind of anomalous statutory title'. The City submits that the use of the term 'anomalous' has almost a flavour of deprecation. I do not read it in that way. The expression 'innominate and anomalous interests' has been regularly used in referring to a range of property interests since Bank of NSW v The Commonwealth [1948] HCA 7; (1948) 76 CLR 1. Its use to describe title in land said to arise from the statutory vesting of works situated in that land was not unduly dismissive.
43 Although he did not go through the statutory provisions relied on by the City, the arbitrator addressed the argument at [30] - [32] of his reasons, when he held that the pipes were the property of the water authority but that did not confer title on the water authority to the space from which they have displaced the soil. He gave his reasons for that conclusion. They were sufficient to dispose of the point argued. I do not need to consider whether his reasons or conclusion were correct. There was, in my opinion, no misconduct of the kind alleged.
The causation point
44 The City pleaded in its defence in the arbitration that the value of the land, as affected by the reservation, was less than that alleged by Avon, and that was caused by the existence of the pipes and by Avon's actions. The City gave particulars of Avon's actions: it ceded other land as public
(Page 14)
- open space when it could have ceded the reserved land as public open space and thereby eliminated the loss claimed; and Avon could have designed a structure plan with a higher estate lot yield which would have eliminated the loss claimed. In its written submissions in this application, the City summarised its contention: the inability to use the reserved land for commercially valuable uses arose, not from the reserve, but from Avon's structure planning for the estate [122].
45 The City says that the arbitrator did not deal at all with this contention. In my opinion, he was not required to. The arbitration agreement defined the Dispute as Avon's entitlement to compensation. But that cannot be read divorced from the Planning and Development Act, and the use of 'compensation' in pt 11 of that Act. One must go to s 179.
46 The requirement to give reasons for the award has statutory form in s 29 of the Commercial Arbitration Act. In Westport Insurance Corporation v Gordian Runoff Limited[2011] HCA 37; (2011) 244 CLR 239, the majority accepted the submission that 'no wholly satisfactory formula can be found to flesh out the requirement in s 29(1)(c)', and what is required by way of reasons in a given case will depend upon the circumstances of that case: [53], [54], and Kiefel J [170]. The reasons in that case were inadequate because there was no indication of factual findings which supported the arbitrators' conclusion on the application of a statutory proviso, or the considerations which tended to support its application: [56], [170].
47 The adequacy of the reasons in the present case must be judged against the matters which the arbitrator needed to find in order to make his award. There are three relevant elements in the determination to be made under s 179: first, the compensation is payable for injurious affection due to or arising out of the land being reserved; second, the compensation is not to exceed the difference between the values referred to in s 179(1)(a) and (b); third, those values are to be assessed at the dates specified in s 179(2). I have described the meaning of injurious affection, as it is used in s 174 and in s 179 at [18] above: it is the loss constituted by the reduction in market value caused by the reservation and the inability of the owner to use the reserved land for purposes conflicting with the reservation.
48 The 'causation point' does not affect the first element because the arbitrator was not called on to decide whether the injurious affection was due to or arose out of the reservation. That was determined by s 174 and, in this case, also by the decision of the State Administrative Tribunal
(Page 15)
- under s 176(1). Section 174 says land is injuriously affected 'by reason of' the making of a planning scheme if the land is reserved under the scheme for a public purpose. Section 179 does not use the expression 'by reason of' but says 'injurious affection due to or arising out of the land being reserved'. The words in each section are different, but the concept of causation is capable of a variety of expressions: see, for example, Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514.
49 The 'causation point' does not arise in the second element, because in assessing the injurious affection the land is to be valued at the time specified in s 179(2). The arbitrator addressed the evidence of value at 30 January 2007, the date the City approved a development application subject to unacceptable conditions, see: [43], [45]. The findings necessary to support the arbitrator's determination of compensation, in accordance with s 179, do not include whether the highest and best use of the land could, historically, have been urban, and whether the land could have been worth more had Avon behaved differently at an earlier time.
50 There is no other question requiring the causation point to be determined before the arbitrator could make his award.
51 Because the arbitrator was not required to determine the causation point, I am not satisfied that the City has shown it was, or may have been, prejudiced by any mistake, either of law or procedure, by the way the arbitrator approached his task. There was no misconduct and I dismiss the application under s 42.
Conclusion
52 Accordingly, the appeal is allowed on ground 1(a). It is unnecessary to consider either ground 1(b) or the alternative ground.
53 The application to set aside the award for misconduct is dismissed.
0
22
5