Devir v Western Australian Planning Commission - [1999] WASC 130

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: DEVIR & ANOR -v- WESTERN AUSTRALIAN PLANNING COMMISSION [1999] WASC 130

CORAM: MASTER BREDMEYER

HEARD: 31 JULY 1999

DELIVERED : 13 AUGUST 1999

FILE NO/S: CIV 1400 of 1999

BETWEEN: STEPHEN DEVIR
MARCIA FRAGIADAKIS
Plaintiffs
AND
WESTERN AUSTRALIAN PLANNING COMMISSION
Defendant

Catchwords:

Local government - Town planning - Rezoning of rural land to parks and gardens - Plaintiffs injuriously affected - Claim for misleading and deceptive conduct by Western Australian Planning Commission - Claim struck out

Legislation:

Commercial Arbitration Act 1985 (WA)

Fair Trading Act 1987 (WA)
Metropolitan Region Town Planning Scheme Act 1959 (WA)
Supreme Court Rules (WA)
Town Planning & Development Act 1928 (WA)

Trade Practices Act 1974 (Cth)

Result:

Application allowed in part

Representation:

Counsel:

Plaintiffs: In person
Defendant: Mr R J Andretich

Solicitors:

Plaintiffs: In person
Defendant: State Crown Solicitor

Case(s) referred to in judgment(s):

Commercial Bank of Australia v Amadio (1983) 151 CLR 447
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Re Ku-ring-gai Co-operative Building Society No 12 (Ltd) (1978) 36 FLR 134
Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514

Case(s) also cited:

Alec Finlayson Pty Ltd v Armidale City Council (1994) 51 FCR 378
Gregory v Federal Commissioner of Taxation [1970-1971] 123 CLR 547
McNulty v Carroll [1905] WAR (Vol VII) 187
O'Brien v Smolonogov (1983) 53 ALR 107
Re David Smith v The West Australian Development Corporation; Ex Parte Rundle & Ors (1991) 5 WAR 295
Reidy-Crofts v Antulov [1983] WAR 35

MASTER BREDMEYER: This is an application by the defendant to strike out pars 27 and 30 and prayers for relief 1 and 2 of the statement of claim as not disclosing any arguable cause of action. A strike out application of this type should only succeed if the cause of action is "so obviously untenable that it cannot possibly succeed" or is "manifestly groundless": General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129.
The plaintiffs in their written submissions have objected to me hearing this application on a number of grounds. Registrar Johnston on 4 May 1999 ordered that the defendant file a defence or application to strike out by 11 May 1999. The defendant filed its defence on 12 May and the application to strike out parts of the statement of claim also on 12 May. Both documents are dated 11 May but they were filed in this Court on 12 May. That is a minor failure and I propose to overlook it. The plaintiffs also say that the defendant did not serve its defence upon the plaintiffs by 11 May. The plaintiffs say the service was irregular as was the service of the defendant's application to strike out. Both documents were served, according to the plaintiffs, after 9.00 pm on 18 May at the insistence of Mr Devir for the plaintiffs. I have been offered no explanation for that lateness but I propose to overlook it in the interests of getting to the merits of this application and not unduly delaying the determination of important interlocutory matters. The Court has a goal of determining interlocutory applications within a reasonable time so long as that is fair and just: see O 1 r 4A of the Supreme Court Rules (WA). Accepting that the plaintiffs were served on the evening of 18 May, I consider they have had adequate time to prepare for the hearing before me on 30 July and the plaintiffs prepared detailed written submissions with reference to authorities.
The plaintiffs purchased a 4-hectare (10 acre) property known as Lot 1, Old Northam Road, Chidlow. They became the registered proprietors of that land on 12 March 1996. At the date of purchase the land was zoned for rural use. On 16 April 1996 the defendant resolved to proceed under s 33 of the Metropolitan Region Town Planning Scheme Act 1959 (WA) ("the Metropolitan Act") with Metropolitan Region Scheme Amendment 978/33 which had the effect of rezoning the land for public purposes only being a parks and recreation reserve as part of the Darling Range Regional Park. The plaintiffs objected to the proposed amendment by written submissions but were unsuccessful. A total of 240 submissions were received by the defendant. On 14 November 1996 the proposed amendment became effective as an amendment to the Metropolitan Region Scheme. The coming into effect of this amendment was published in the Government Gazette on 22 November 1996. The effect of the amendment was to prevent the plaintiffs from developing the land in any way. They had proposed to build a home on it and use the land for development of a business - I think permaculture.
Section 11(1) of the Town Planning & Development Act 1928 (WA) ("the Town Planning Act") provides that any person whose property is injuriously affected by the making of the Town Planning Scheme shall be entitled to obtain compensation from the responsible authority. Section 11(4) provides that any question as to whether any land is injuriously affected or not and as to the amount of compensation which an owner can recover is to be determined by an arbitrator in accordance with the Commercial Arbitration Act 1985 (WA) unless the parties agree on some other method of determination.
Pursuant to s 36(3)(b) of the Metropolitan Act, where land has been reserved for a public purpose, compensation is payable when the responsible authority refuses an application made under the scheme for permission to carry out development on the land. The relevant responsible authority here is the defendant.
By a letter dated 5 July 1996 the defendant offered to purchase the land from the plaintiffs for the value of the land plus compensation and requested that the plaintiffs advise the amount that they would be willing to accept for the transfer of the land to the defendant. By a letter dated 19 September 1996 the defendant offered to purchase the land for $80,000 plus compensation of $5000 for associated costs of purchase and sale of the land. By a letter dated 19 October 1996 the plaintiffs refused that offer and offered to sell the land for $159,600 inclusive of compensation.
On 3 January 1997 the plaintiffs applied to the Shire of Mundaring and the defendant to develop the land. On 26 February 1997 the defendant refused the plaintiffs' application on the ground that the Metropolitan Region Scheme permitted development for no purpose other than a public purpose.
The plaintiffs plead that pursuant to s 12(2a)(b)(i) of the Town Planning Act they were entitled to make application for compensation for injurious affection arising out of the refusal of their application. Pursuant to s 36(2)(a) of the Metropolitan Act the scheme may provide where compensation for injurious affection is claimed as a result of the operation of s 12(2a)(b)(i) or (ii) of the Town Planning Act, the Commission may, at its option, elect to acquire the land so affected instead of paying compensation. Pursuant to s 36(2)(b) the Commission shall, within three months of the claim for injurious affection being made, either elect to acquire the land or advise that it does not intend to acquire the land.
On 14 August 1997 the plaintiffs made a claim upon the defendant for compensation in the sum of $170,060 for the injurious affection on the land arising from the refusal to permit the development mentioned above. On 2 September 1997 the defendant purported to elect to purchase the land from the plaintiffs and offered the sum of $80,000 for the land. The plaintiffs dispute the election of the defendant and say that, on the basis of the negotiations for purchase of the land already mentioned, and on the basis of the plaintiffs' application to the Shire of Mundaring and to the defendant to develop the land which was rejected, they are entitled to compensation of $170,060.
Paragraph 27 of the statement of claim reads:
"27.By reason of
27.1the coming into effect of the Proposed Amendment as part of the Metropolitan Region Scheme, and
27.2the Defendant's refusal of the Plaintiffs' development application the Plaintiffs have suffered loss and damage full particulars whereof shall be rendered before Trial
Particulars of Loss and Damage
1.cost of acquisition of the Land
2.all costs of maintaining the Land
3.all rates, taxes and other outgoings related to the Land
4.interest and bank charges paid pursuant to National Australia bank mortgage secured against the Land
5.cost of alternative accommodation for the Plaintiffs due to the Defendant's refusal to permit the erection of a dwelling on the Land
6.Loss of opportunity to develop the Land for commercial rural purposes as originally intended when the Land was purchased
7.Loss of profits arising from the inability to use the Land for any purpose
8.Diminution in the resale value of the Land"
Prayer for relief 1 reads:
"1.Compensation pursuant to s11 of the Town Planning and Development Act, s37(3) and s37(4) of the Metropolitan Region Town planning Scheme Act and s36 of the Metropolitan Region Town Planning Scheme Act, in the sum of $170,060.00."
I propose to let par 27 and prayer 1 stand. The plaintiffs are entitled to fair compensation for the rezoning of their land. Whether it is under s 11(1) of the Town Planning Act or s 36(2b)(b) of the Metropolitan Act, in this case, I do not know. Section 11(1) of the former Act allows a person whose land or property is injuriously affected by the making of a town planning scheme, to claim compensation. It is fixed by arbitration. When the plaintiffs' application to develop the land was rejected they were supplied with a Form 4 entitled "Compensation for Injurious Affection". I learnt that from the plaintiffs' submissions. The defendant says that right is now lost because the defendant has elected to acquire the land, and, by operation of s 36 of the Metropolitan Act, the plaintiffs' right to compensation is now converted into a right to be paid a proper value for the land - to be fixed by the Supreme Court where, as here, the parties cannot agree on the value. I will leave it to the trial judge to determine which is the correct compensation. It is helpful for the Court to know the heads of compensation sought by the plaintiffs, and they are set out in the particulars to par 27. If the plaintiffs succeed in their argument that compensation should be fixed under a 11 of the Town Planning Act, then the Court will have to refer the parties to arbitration.
Paragraph 30 pleads a case against the defendant of misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (WA). I quote par 30 in full:
"30.Further and alternatively:
30.1at all material times the Defendant was a corporation involved in trade and commerce within the meaning of the Trade Practices Act and the Fair Trading Act 1987
30.2in the course of business the Defendant made various representations to the Plaintiffs regarding the availability of compensation payable to the Plaintiffs arising from the implementation of the Proposed Amendment.
30.2.ain the course of business the Defendant made various representations to the Plaintiffs regarding its knowledge of the factors and circumstance of the particular matter and was also cognizant of the need to finalise it speedily and represented to the Plaintiffs the Defendant's intention to do so
Particulars of Representations
1.The Defendant's employee Pedersen verbally represented in mid June 1996 that if the Proposed Amendment were given effect then the Defendant would purchase the Land and reasonable compensation would be paid to the Plaintiffs.
2.By letter dated 5 July 1996, from the Defendant to the Plaintiffs, the Defendant represented that the Defendant would consider payment of compensation to the Plaintiffs.
3.The Defendant's employee Pedersen verbally represented at a meeting held on 9 July 1996 that the Defendant was prepared to purchase the Land promptly for a fair value.
4.The Defendant's Chairman, Holthouse, verbally represented at the Submission Hearings on 5 September 1996 that acquisitions were then currently being undertaken pursuant to s37.3 of the Metropolitan Region Town Planning Scheme Act.
5.Holthouse, at the submission hearings, further represented that factors identified and known were compensable and to be taken into account together with the value of the Land in negotiations to purchase which were to be finalised in as short a time as possible and also that within his role for the Defendant he would ensure it was done quickly.
6.In the 'Report on Submissions', published by the Defendant in October 1996, the Defendant expressly represented to the Minister, Governor, Plaintiffs, Parliament and the public at large that the matters pleaded in paragraphs 4, 6 and 7 of the Statement of Claim above were due [absurdly] to March 13th 1996 falling some time after April 16th 1996.
7.In its 'Report on Submissions', published in October 1996, the Defendant represented that negotiations to acquire had begun 'and through this process the landowners' aspirations for their land may be compensated'.
30.3The representations were deceptive and misleading within the meanings of s52 and s51A of the Trade Practices Act and s9 and s10 of the Fair Trading Act in that:
30.3.1at the time of making the representations the Defendant had no reasonable grounds for believing the representations were accurate, and
30.3.2the Defendant has at no time since the representations were made, offered to pay to the Plaintiffs reasonable compensation for the injurious effect of the Metropolitan Region Scheme upon the Land
30.3aThe representations referred to in paragraphs 5 and 6 of the Particulars of Representations above were unconscionable conduct within the meaning of s.51AA of the Trade Practices Act and s11 of the Fair Trading Act by reason that:
30.3a.1regarding paragraph 5 of the Particulars of Representations, the Defendant had no intention of conducting the matter to finality as quickly as possible nor reason or grounds for believing the Defendant had that intention.
30.3a.2regarding paragraph 6 of the Particulars of Representations at the time of publication the Defendant knew of a reliance upon that document in the conditions precedent for the Minister and Governor to form an opinion regarding the proposed Amendment and that the representation was false.
30.4By reason of the representations the Plaintiffs were deceived and mislead into believing that they would be compensated by the defendant for all of their losses arising from the change to the Metropolitan Region Scheme if it came into effect.
30.5In reliance upon the representations, and induced by the representations, the Plaintiffs did not exercise all of their potential rights of appeal against the decision of the Defendant to proceed with the Proposed Amendment.
30.6By reason of the matters pleaded in paragraph 30 of this Statement of Claim the Plaintiffs have suffered loss and damage.
Particulars of Loss and Damage
1.Loss of opportunity to challenge the decision of the Defendant to give effect to the Proposed Amendment.
2.All losses particularised in paragraph 27 of this Statement of Claim."
I also quote prayer for relief 3:
"3.Further and Alternatively remedy against the Defendants actions or negligent actions pursuant to s82 Trade Practices Act or alternatively s79 of the Fair Trading Act in damages and award for same in respect of Special Damages, Aggravated Damages and Exemplary Damages for those actions as they constitute contraventions:
3apursuant to s51A Trade Practices Act or alternatively s9 of the Fair Trading Act
3bpursuant to s52 Trade Practices Act or alternatively s10 of the Fair Trading Act
3cpursuant to s51AA - 51AB Trade Practices Act or alternatively s11 of the Fair Trading Act"
I do not consider that any of the allegations contained in the particulars, either taken singly or cumulatively, arguably amount to misleading or deceptive conduct. Where, I ask, is the misleading or deceptive conduct outlined in particulars 1, 2 and 3? The defendant through its employee, Pedersen, told the plaintiffs that the defendant would purchase the land and that reasonable or fair value compensation would be paid to them. That is not falsified in the pleading. Fair compensation for the value of the land is going to be paid to the plaintiffs. Because the parties have been unable to agree on that compensation, the compensation is to be fixed by the Supreme Court under s 36(2b)(b) of the Metropolitan Act or possibly fixed by an arbitrator under s 11 of the Town Planning Act. This present application is delaying that process whereby the Court can hear valuation evidence and determine proper compensation.
Particular 4 states that the defendant's chairman, Holthouse, verbally represented at hearings on 5 September 1996 that acquisitions were then currently being undertaken. That is not falsified in the pleading.
In particular 5 Holthouse represented that factors identified and known were compensable and would be taken into account in negotiations to purchase the land which would be finalised in as short a time as possible and he would ensure that it was done quickly. It is clear that the negotiations to purchase the land have not been finalised quickly. The plaintiffs may be able to ask for interest or further compensation on account of this. It does not, in my view, give an arguable case for misleading and deceptive conduct.
Particular 6 pleads some inaccuracy in the official report on the plaintiffs' submissions. I need not go into details here. I ask how did this "misrepresentation" cause the plaintiffs loss or damage? As stated above, the plaintiffs are going to be compensated and that compensation is going to be fixed by the Supreme Court or by an arbitrator.
Particular 7 is similar to earlier particulars. In my view it is not falsified in the pleading. The plaintiffs are going to be compensated.
Paragraph 30.3.1 says that at the time of making the representations the defendant had no reasonable grounds for believing that the representations that the land would be purchased promptly for fair value etc, were accurate. Where, in the pleading, is that falsified? The land is being purchased and compensation will be paid. The purchase has not been concluded promptly but negotiations began promptly. The defendant's representations in the particulars to par 30 were made in June, July, September and October of 1996. I note that in July 1996 the defendant offered to purchase the land and requested the plaintiffs to state a figure. They apparently did not do so at the time. The defendant offered $85,000 in September. That offer was refused in October 1996 and met by a counter‑offer which was not accepted by the defendant.
Paragraph 30.3.2 says that the defendant at no time has offered to pay to the plaintiffs reasonable compensation for the injurious effect to them of the Metropolitan Region Scheme upon their land. The defendant says its offer is reasonable. The plaintiffs say it is not. The Court or arbitrator will decide.
In relation to all of the allegations in par 30 it is instructive to ask what step did the plaintiffs take as a result of the misleading or deceptive conduct? Or, to put it another way, how did the plaintiffs act to their detriment as a result of the representations made by the defendant said to be misleading and deceptive? There is no answer to that. The plaintiffs desisted from building a house and starting a business on the land, but they are to receive compensation fixed by the Supreme Court for the value of the land. They applied on 3 January 1997 to the Shire of Mundaring and the defendant to develop the land and that application was refused in February 1997 as might be expected. That may or may not give rise to statutory compensation but, if it does, that is separate from the relief being sought here.

The plaintiffs also rely on s 51AA of the Trade Practices Act which refers to unconscionable conduct. I quote:
"A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law from time to time, of the States and Territories."
Section 11 of the Fair Trading Act is in similar terms.
The defendant has referred to me to a leading case on unconscionable conduct; Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 461:
"Relief on the ground of unconscionable conduct will be granted when unconscientious advantage is taken of an innocent party whose will is overborne so that it is not independent and voluntary, just as it will be granted when such advantage is taken of an innocent party who, though not deprived of an independent voluntary will, is unable to make a worthwhile judgment as to what is in his best interests."
I consider it is not arguable to say that when a statutory body is exercising its statutory powers, to rezone or purchase land, with compensation to be determined by the Supreme Court, it is acting unconscionably.
In summary, I consider that it is not arguable to say that the loss and damage suffered by the plaintiffs by having their land rezoned from rural to parks and recreation, and by having their application to build a house and start a business on the land rejected, was caused by the representations categorised as misleading, deceptive, or unconscionable set out in par 30. Clearly their loss or damage was caused by the defendant exercising its statutory powers to rezone the land and to purchase the plaintiffs land.
The defendant has raised another more technical objection to the cause of action pleaded in par 30 and that is that the plaintiffs have raised no arguable case for saying that the defendant in taking the action that it did was acting in trade and commerce. Sections 51AA and 52 of the Trade Practices Act and the equivalent sections 10 and 11 of Fair Trading Act only relate to actions taken by a defendant who is engaged in trade or commerce. I do not consider it is arguable that the WA Planning Commission exercising its statutory powers to rezone land and purchase the plaintiffs land, is acting in trade and commerce. The defendant's actions do not bear a trading or commercial character In Re Ku-ring-gai Co-operative Building Society No 12 (Ltd) (1978) 36 FLR 134 at 139, Bowen CJ said:
"The terms 'trade' and 'commerce' are ordinary terms which describe all the mutual cummunings, the negotiations, verbal and by correspondence, the bargain, the transport and the delivery which comprised commercial arrangements… The word 'trade' is used with its accepted English meaning: traffic by way of sale or exchange or commercial dealing …"
The High Court in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603 held:
"It is plain that section 52 was not intended to extend to all conduct, regardless of its nature in which a corporation might engage in the course of, or for the purpose of its overall trading or commercial business… The reference to conduct 'in trade or commerce' in section 52 can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character."
At 613 in that case Brennan J said:
"In my view, s 52(1) is aimed at conduct in which a corporation engages when that conduct takes place in a situation which fairly answers the description 'in trade or commerce'. The words 'trade or commerce' are of wide import. Re Ku-rang-gai Co-operative Building Society (No 12) Ltd (1978) 36 FLR at 139, 167. But their focus is on commercial activity, the providing of goods and services for reward."
In this case I do not consider it is arguable that the defendant in rezoning the land and negotiating to purchase the plaintiffs' land was providing goods and services for reward. I have looked through the standard text on this subject, Miller's Annotated Trade Practices Act (20th ed), and can find no case where a statutory body such as the defendant, in exercising its statutory powers, has been held to have engaged in trade or commerce. The plaintiffs have not cited to me any case in which conduct of the kind described in par 30 by a statutory body such as the defendant has been held by a Court to be in trade and commerce, misleading or deceptive or unconscionable. The plaintiffs, who are unrepresented but who have told me that they have had the benefit of some legal advice, are handicapped by their lack of skilled legal advice. They have not in pars 30 and prayer 3 of their statement of claim been able to plead an arguable case.
Paragraph 30.3a of the statement of claim refers to unconscionable conduct under s 51AA of the Trade Practices Act and prayer for relief 3 refers to s 51AA and s 51AB of the Act. The defendant says another reason for striking out this sub-paragraph is that the time limit to bring a claim under either of these two sections is two years by s 87(1CA) of the Act and that limit has expired. I think the argument is correct. The representations pleaded took place between July and October 1996. This action was brought on 16 April 1999. This time barring is one of the "clearest of cases" which justifies a strike out: see Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 533. The Trade Practices Act does not permit any extension to the two-year period.
There is another problem with reliance on s 51AB, which is not mentioned in par 30 but is mentioned in prayer for relief 3, and on s 11 of the Fair Trading Act. Those sections only apply to the "supply or possible supply of goods and services" to a person. I do not consider that the rezoning of land of the defendant and the rejection of the plaintiffs' application to develop the land can be called a supply of goods or services to the plaintiffs.
In par 30.5 the plaintiffs plead that as result of the representations pleaded, they did not exercise all of their rights of appeal against the rezoning. That is not arguable. There is no right of appeal given by statute. There is a right of objection which was exercised.
For all these reasons I consider the plaintiffs' plea in par 30 of the claim and in prayer 3 is manifestly groundless and these paragraphs will be struck out.