Kettering Pty Ltd v Noosa Shire Council

[2004] HCATrans 4

[2004] HCATrans 004

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  Nos B52 and B53 of 2003

B e t w e e n -

KETTERING PTY LTD

Appellant

and

NOOSA SHIRE COUNCIL

Respondent

McHUGH J
GUMMOW J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 5 FEBRUARY 2004, AT 10.04 AM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friends, MR D.R. GORE, QC and MR R.S. LITSTER, for the appellant in each matter.  Events have made it impossible for Mr Gore to be physically present and I apologise for the absence.  (instructed by Hopgood Ganim)

MR P.J. LYONS, QC:   May it please the Court, I appear with my learned friend, MR T.N. TROTTER, for the respondent, Noosa Shire Council, in these matters.  (instructed by Wakefield Sykes)

McHUGH J:   Yes, Mr Jackson.

MR JACKSON:   Your Honours, as the Court will have seen, the appeal in what we have called Kettering (No 1) concerns the correctness of the Court of Appeal’s decision holding that the second option – a term, the meaning of which I will come in just a moment – was not open to the appellant as a basis for compensation and the appeal in the other matter concerns the correctness of the Court of Appeal’s holding that its decision in the first case precluded reliance on the first option as well as the second.

CALLINAN J:   Which was never argued?

MR JACKSON:   Never argued, your Honour.

CALLINAN J:   And not the subject of a notice of appeal?

MR JACKSON:   Indeed, your Honour, yes.  It suffered from a number of defects.

CALLINAN J:   Mr Jackson, before you go to your argument, can I just ask you one question.  It does not relate to the matter we have just talked about.  The Court of Appeal in the matter that I will describe as live seems to have relied upon Sparke v Noosa Shire Council, an earlier decision of the Court of Appeal, and found that because more than a council discretion was involved the exception applied – the exception which would deny his compensation applying.  Is there any planning application that is subject only to a council decision?  Why I ask that is this:  are not all decisions – and I may not be correct about this – liable to be the subject or can be the subject of an appeal to the Planning Court?  There is always something else involved or the possibility of something else involved other than or in addition to the exercise of a council discretion.

MR JACKSON:   Your Honour is I think correct about the ability to appeal.  That issue was not dealt with in Sparke.

CALLINAN J:   No.

MR JACKSON:   However, what was said was that, I suppose, section 3.5(5) refers to a discretion, I think the word is used, of the local authority.  I imagine that the view taken in Sparke was because of the distinction and because of the specific reference to that it excluded reference to another discretion that might be exercised.

CALLINAN J:   Which was the Minister’s discretion on a rezoning.  What I am really trying to find out is:  is a council’s discretion final and absolute in every case?

MR JACKSON:   No, your Honour.

CALLINAN J:   I am really questioning the correctness of Sparke, I suppose.

MR JACKSON:   Yes.  May I say two things about it.  The first is that what really seems to have been the case in Sparke was that the court assumed, because the parties assumed, that the case was one in which one got to section 3.5(4)(d).

CALLINAN J: That is [2001] 1 Qd R 344.

MR JACKSON:   Yes.  The point which we will seek to make is that one really does not get to that provision at all in a case where the alteration to the planning scheme has been one which does not itself prohibit or restrict the use of land.  In other words, where there is an alteration to say a strategic plan, as it was in Sparke, or to a development control plan in circumstances where the alteration is one which indicates how discretions might be exercised in the future, but does not itself do the thing referred to in 3.5(4)(d), that is, prohibit or restrict, in such a case one does not get to that provision at all.

HAYNE J:   But that is about step three of the question, is it not?

MR JACKSON:   Yes.

HAYNE J:   Do we not have to start at step one and if we can begin there ‑ ‑ ‑

MR JACKSON:   Yes, your Honour, I am going to endeavour to do that if I may now.

CALLINAN J:   You are just responding to my question, Mr Jackson.

MR JACKSON:   Yes, I am.  Your Honours, may I go for just one moment to the basic facts of the case which your Honours will see referred to in our written submissions commencing at paragraph 9.  What your Honours will see is that as at 21 September 1991 the appellant owned a large area of land at Noosa on the hill overlooking Noosa Heads and its associated attractions.  The land was zoned for rural pursuits and that reflected the fact that it had earlier been a banana plantation.  Your Honours will see that referred to at page 93 of the record and that is between lines 30 and 35.

CALLINAN J:   Do we have the town plan?

MR JACKSON:   Yes, your Honour.  I was going to take your Honours to the table of zones in just a moment, but can I do that in just a second, your Honour.  Your Honours will also see a reference to the bananas, there are still some bananas growing but in a wild state.  That is referred to at page 82, line 20.  Now, there was pressure for development.  Your Honours will see that at page 70, lines 30 to 40.  I am sorry, I think that may not be quite the right reference but I will take your Honours to one in just a moment.  The land, as I said, was in the rural pursuit zone and one can see that from two references.  Your Honours will see, first, at page 53, paragraph 6 in the affidavit of the respondent’s town planner, Mr Weychardt, where in paragraph 6 he referred to subdivision being permitted to lots down to two hectares.  That is where this Council had a discretion to allow it. 

Also, your Honours, if I could go then to the table of zones at page 56, your Honours will see the rural pursuits zone.  Now, if one looks at the table, your Honours will see column 3A.  Dwelling houses were permitted, though there is an as of right development.  Your Honours will see in column 4 at about line 22 on the page that a consent use was group housing developments.  That was subject to qualification.  The qualification your Honours will see in the second‑last paragraph in column 5 where it says (b).  Your Honours, that was the qualification.  Now, your Honours will see that the planning scheme changed on 21 September ‑ ‑ ‑

HAYNE J:   Before we come to that, do we have the other parts of the planning scheme to which this seems to be either a schedule or a part?

MR JACKSON:   No, your Honour.  What one has is the development control plan.

HAYNE J:   I understand that, but is all we have of that which regulated use before the development control plan this table of zones?

MR JACKSON:   Not quite, your Honour.  What one has effectively are four things, I suppose:  some commentary of a minor kind by Mr Weychardt about it, which your Honours will see in the text of his affidavit, pages 52 to 55; there is the extract at page 56 from the table of zones; there is the strategic plan at pages 57 to 66 of that town plan; and then there is an extract from the subdivision of land provisions at pages 67 to 68.

HAYNE J:   What I have tried to do and could not was to work my way through to identify what was the legal regime, if you like, that was said to have been engaged by the “unless” clause in 3.5(4)(d).  I find bits of it and that is all.  Is that right?

MR JACKSON:   Yes, your Honour.  One does not see, for example, the definitions of terms used in the table of zones.

HAYNE J:   Nor does one find, does one, what permits, what prohibits, what prohibits subject to condition, what the condition of the prohibition is?  I come to this without any of the lore that seems to have informed the whole of the arguments below.

MR JACKSON:   Could I just say, your Honour, that no doubt those dealing with it below were more familiar with the schemes, but could I just say that if one looks at the table of zones at page 56, the headings really described for practical purposes are what was necessary to be known in a sense because one had the permitted development, which as I said a moment ago was, in effect, the as of right development, permitted development subject to conditions at page 56, consent development ‑ ‑ ‑

HAYNE J:   And the relevant consent was, was it, a consent which could be given at the discretion of the local authority as referred to in 3.5(5)?

MR JACKSON:   Yes.  I should also say that the definitions of those terms can be seen in the Local Government (Planning and Environment) Act, for the purposes of the Act of course but pretty broad over.  For example, one sees “permitted use” and “permissible use” defined in section 1.4(1) and “use” itself is quite widely defined.  What I was going to say was that the planning scheme changed on 21 September 1991 by the gazettal of a development control plan for Noosa Hill and that was called Development Control Plan No 1 Noosa Hill.  It commences relevantly at page 70.  I will come to its terms in just a moment.

May I go first very briefly to the provisions of the statute insofar as they deal with the place of a development control plan in the planning scheme.  The statute is the Local Government (Planning and Environment) Act 1990. The copy which your Honours should have is the Act at the time when this occurred, 21 September 1991.

Your Honour, it defines “planning scheme” in section 1.4(1) – page 7 in the copy I have – and it is a scheme for town planning which conforms with section 2.1 and is approved by the Governor in Council.  That takes one, your Honours, to section 2.1 and section 2.1 at page 10 indicates that a planning scheme is to consist of a number of elements:

(a)  planning scheme provisions for the regulation, implementation and administration of the planning scheme;

that is dealt with further in section 2.2.  The second aspect, your Honours, is set out in 2.1(b).  There are to be:

zoning maps and any regulatory maps;

they are dealt with further in section 2.3.  There is to be also a strategic plan and that is referred to 2.1(c).  “Strategic plan”, your Honours, is defined by section 1.4(1) at page 9.  Your Honours will see it is plan that specifies in general terms the future preferred dominant land uses, et cetera, and it is also referred to in section 2.4 at page 11.  It is to include – and your Honours will see the matters there referred to.

Now, your Honours, if I could pause with the strategic plan for a moment before coming to the development control plan.  Your Honours will see – I will give your Honours the references in just a moment – that the land was dealt with by the strategic plan in this case in two ways.  One was it was described as part of the future urban area and the other was that it had tourist facility growth potential.  Where that comes from is from two parts of the book.  One is at page 53, Mr Weychardt’s affidavit again, paragraph 5.  The other is the strategic plan itself which your Honours will see at page 59.  The two descriptions to which he refers are in paragraphs 2 and 3 in the left column.  So one could see that the potential for development was obvious and, your Honours, that also appeared from the reference I intended to give your Honours earlier at page 79 about line 30, which is part of one of the documents supporting the development control plan.

Your Honours, could I come then to the development control plan.  Your Honours will see from section 2.1(d) that a possible element of a planning scheme, though not an essential one, is a development control plan.  The term is defined by section 1.4(1), page 4, as:

a plan for the orderly growth, development or conservation of an area, that conforms with section 2.5 and is approved by the Governor in Council;

and your Honours will see section 2.5 at page 11 saying what it is to consist of.  Your Honours, the statute makes it clear that the coming into force of a development control plan is an amendment of the planning scheme.  Your Honours will see that first from section 2.18(1), and that is at page 17.  That refers to the ability to amend a plan.  Your Honours will then see that section 2.18(2)(c) on page 18 makes it apparent that the inclusion of a development control plan is a proposed amendment and then section 2.20(9) – that is at page 22 – refers to the amendments becoming part of the scheme, that is, subsection (9)(a) to (c) becomes part of the scheme.

Now, your Honours, the coming into force of Development Control Plan 1 thus potentially brought into play the compensation provision of section 3.5(1)(a), which your Honours will see at page 34.  Your Honours will note the following aspects about section 3.5(1).  Your Honours will see that for a person to have an entitlement to compensation there must be “an interest in premises”.  The interest must be “injuriously affected”.  I will return to that aspect in a moment.  The third thing is that what brings about the injurious affectation may be either of the circumstances referred to in section 3.5(1)(a) – (1)(b) does not matter for present purposes.

Now, your Honours will see that one notes immediately that 3.5(1)(a)(i) is expressed in rather broader terms than is 3.5(1)(a)(ii).  There are exceptions, of course, to the entitlement to compensation.  They are set out in section 3.5(4).  May I come back to them in just a moment because I will need to go to them in some detail.  Your Honours, may I say that if there is an entitlement to compensation it is to be calculated in the manner referred to in section 3.5(8).  The principal provision of that is paragraph (a), the difference in value by virtue of the:

operation of the provision of the planning scheme . . . whereof the claim for compensation arose –

Your Honours, there is a slight betterment provision, as it might be called, in section 3.5(8)(c).  Could I just pause to say that compensation schemes of this general kind seem to derive from an English enactment I will refer to in a moment.  The Queensland ones seem to derive from that enactment in part also from the Cumberland planning scheme in New South Wales, and whilst the language is not the same there are some similarities.  But the original schemes had not just compensation for affectation by the scheme, but an ability to require that there be a levy or tax on those whose land was improved, in effect, by the scheme, but the political will to impose those was, perhaps, no doubt missing and no doubt members of Parliament and also members of local authorities wish to have a second term.  One does not see betterment schemes applied or in being in Queensland, for example.

Your Honours, could I then say the burden of proof of an exception lays on the local authority – that is section 3.5(6) – and it has an option to acquire the land, if there is a claim for compensation – that is section 3.5(9) – or to amend the planning scheme – that is section 3.5(2)(b).  Could I come back, your Honours, to the development control plan itself. 

May I say before doing so, could we invite your Honours to refer to two features appearing from Justice Davies’ reasons in the first judgment at page 124.  In paragraph [25] at page 124 your Honours will see the first sentence where he refers to the scheme and then in the second sentence he says:

It seems to have been common ground in this case that the respondent was so entitled unless its entitlement was excluded by s 3.5(4).

Now, your Honours, that common ground was entirely undermined by the view taken by the court expressly in the second judgment, not quite so clearly in the first one.  Our submission is – and I will come to develop this – that we do, in fact, have a prima facie entitlement which remains to be quantified but, of course, at the time all that was being decided was a preliminary point.  The second feature about his Honour’s reasons is that one sees a summary of the development control plan at page 125, paragraph [29] and one can also see its effect, generally speaking, referred to at page 120, paragraph [14].

Could I come to the words of the plan.  Your Honours will see it commences at page 70.  May I indicate to your Honours the parts that are immediately relevant.  Your Honours will see the heading in the left column at about line 20.  Your Honours will then see in the right column paragraph 4, about line 22:

In order to effectively implement the aim and objectives of this Development Control Plan, the area has been divided into three precincts.

It refers to where they are.

McHUGH J:   You are on precinct 2, are you not?

MR JACKSON:   Yes, it is referred to on the next page, your Honour, page 71, left column at about line 38 or 39 “PRECINCT 2 – PRIMARY UNCOMMITTED”.  Your Honours will see it is described there in that first paragraph under that heading and then the next paragraph commencing at line 44, it “Has been divided into four sub‑precincts.”  The sub‑precincts are then dealt with in the right column and on the next page.  Your Honours, “Sub‑precinct A”, in the third line under that heading:

It is intended to permit limited development of the sites of an intensity equivalent to that of conventional dwelling house development.

Could I just pause to say, your Honours, the first sentence under that heading “Sub‑precinct A”, “Intent”, says, “Three small parcels of land”.  When one speaks of parcels of land, it is not meaning actual existing subdivisions of land.  What it is meaning is parcels that the plan itself – areas it circles or marks and indicates them as parcels.  Our land is one un‑subdivided block.

Your Honours will then see in the same column about line 24 there is the proposal for implementation of it in the form of group housing developments, then “Sub-precinct B” further down the same page.  Again it refers to two parcels of land and speaks of intending to permit limited development in that sub-precinct.  Then your Honours will see in the next paragraph there is reference to the potential for multiple dwellings, et cetera, and a reference at the bottom of the page to densities.  At page 72, line 15, the left column:

Sub-precinct C . . . will feature the most intensive of development forms within Precinct 2.

Your Honours will see that there referred to.  Some restrictions are contained under the heading “Implementation” about line 34 and then, most importantly, at the bottom of the left column on 72, Sub-precinct D is to be retained for open space.

I mentioned at the start of our submissions that two options were involved.  The options can be seen set out in the letter which is at page 10.  This is a letter from our solicitor to the solicitor for the Council.  Your Honours will see the nature of the subject matter in the first paragraph.  Then, if one goes to about line 44, it is said:

it is clear that the majority of the site is included within sub‑precinct D.

Then on the next page about line 15 one sees the two bases set out.  “But for the DCP”, and your Honours will see them there.  The first option is:

(a)  by obtaining town planning consent for “group housing developments”.  Such a consent would have enabled development of both attached and detached dwellings; or

(b)  rezoning from the Rural Pursuits Zone to another zone where land could be subdivided into smaller allotments for dwelling houses.

Then your Honours will see an argument advanced in the succeeding paragraph and a perhaps prescient observation in the penultimate paragraph of the letter.  It was the second of those options, (b), that was the subject of the proceedings in the Planning and Environment Court and in the first judgment in the Court of Appeal.

Could I go then to the provisions of section 3.5(4) of the Act, the provisions which set out the circumstances in which compensation is not payable.  Might I ask your Honours perhaps also to look at our written submissions, paragraph 28, in connection with that, where we have endeavoured to summarise some of them.  Your Honours will see that subsection (4)(a) says, to put it shortly, that compensation is not payable in respect of something that was done contrary to law, to put it shortly.  So that is that class.

If I could move then to paragraph (e), your Honours will see again there is a disqualification “in respect of anything done in contravention of a planning scheme” and, your Honours, if one goes to paragraph (f), one sees that unlawfulness is again a disqualification in respect of things “done in contravention of any interim development control provisions”.

Now, pausing at that point if I may, your Honours will see that the way in which those three paragraphs are expressed does not in any way purport to cut down the ambit of the entitlement to compensation given by section 3.5(1) in terms of construction of the provisions.  The point I am seeking to make is this, that what the Court of Appeal seems to have done, at least in the first judgment, is to say that the compensation provisions are, in effect, determining what the ambit of compensation given by section 3.5(1) is as distinct from being matters which cut into the compensation otherwise conferred.

The simple point I am seeking to make, your Honours, is if one pauses at those three provisions they say nothing about how one construes section 3.5(1).  What they say is that in cases otherwise falling within 3.5(1) compensation is not payable if the circumstances are unlawful.  Perhaps I should just say more specifically that the view the Court of Appeal seems to have taken is that there was no difference between the two paragraphs of section 3.5(1)(a), notwithstanding the complete difference in language. 

Your Honours, staying with section 3.5(4), section 3.5(4)(b) says that compensation is not payable “where an interest in premises is injuriously affected”, et cetera, if, to put it shortly, there was a similar provision in force at the time when the provision which would otherwise attract section 3.5(1) came into being.  Your Honours will also see then that if one goes to section 3.5(4)(c) it says that compensation is not payable “by a planning scheme which by its operation” does a number of things, that is, “prescribes the space about buildings”.  Your Honours I will not read it out, but your Honours will see that it does a number of things which, in the text, have been described as the “good neighbour” provisions.  They are provisions which, in effect, local authorities, before there were planning schemes, commonly made by‑laws about.  One sees that they are provisions where their application may improve the amenity of the area generally.

Your Honours, if I could pass over (d) for a moment and then go to subsection (g).  Compensation is not payable if the subdivision of land is prohibited or restricted.  Now, your Honours, it has to be a planning scheme or a by‑law whereby “the subdivision of the land is prohibited or restricted”.  In that case, our submission would be, if this became an issue at some point in the case, that what is contemplated is a provision which has a direct effect, a provision which prohibits or restricts.

GUMMOW J:   Now, prohibits or restricts without any supervening exercise of discretion?

MR JACKSON:   Yes, your Honour, and that approach to provisions of this kind has been taken in a number of cases to which I will give your Honours a reference in a moment.

Your Honours, if I could come then to section 3.5(4)(d), the provision which was at issue in Kettering (No 1).  Your Honours will see immediately two features about it.  The first is that it deals with a limited subject matter, namely:

the use of land or the erection or use of a building or other structure thereon for a particular purpose –

The second thing is that for it to be applicable, the relevant provision of the planning scheme must by its operation prohibit or restrict “the use of land . . . for a particular purpose”.  Your Honours will see that the words “prohibits or restricts” are the same as those used in section 3.5(1)(a)(ii), “prohibition or restriction”.  Our submission is that the DCP 1 did not itself prohibit or restrict the use of land for a particular purpose for which it might lawfully have been used before the plan came into operation and that that provision was not one which was applicable.

Could I invite your Honours to note, for example, the change in language between section 3.5(4)(b), which reflects section 3.5(1)(a)(i), and the more prescriptive, if I can use that word, language of paragraphs (c), (d) and (g).  Your Honours, there is nothing in section 3.5(4) which suggests that land is not injuriously affected by the coming into force of a provision in a planning scheme in terms of 3.5(1)(a)(i) if the provision is one which does not itself prohibit or restrict but, rather, indicates intended use for the future.

Your Honours, our submission is that the view adopted by the Court of Appeal – and I will take your Honours to the passage in just a moment –in this regard is contrary to the language of the provision.  May I take your Honours to what was said by the Court of Appeal.

HAYNE J:   Can I just interrupt you at this point and, I fear, catch up.  If we go to page 12 of the appeal book, we have there the statement in question which gives rise to the series of proceedings.  The question is framed by reference to, first, 3.5(4) and 3.5(5), generally?

MR JACKSON:   Yes.

HAYNE J:   Second, it is framed by reference to the second option?

MR JACKSON:   Yes.

HAYNE J:   Was the only provision of 3.5(4) or (5) which was said to be engaged paragraph (d) of subsection (4)?

MR JACKSON:   Your Honour, I have to answer that this way.  What one had was a situation – perhaps the answer is, your Honour, we do not yet know.  What happened was – and the letter to which I referred a moment ago was a letter in which we were resisting the proposition that the issue which the authority wanted to raise, namely, whether 3.5(4)(d) prevented us getting any money – we were resisting the proposition that that should be dealt with as a separate issue.  It was that issue that, contrary to our contention, in effect, Judge Quirk at page 12 ordered be dealt with as a separate question.

HAYNE J:   But the way the order is framed has this difficulty of general reference to 3.5(4) and (5).  Was the only paragraph on the table for debate paragraph (d) or was there reference in argument to other paragraphs?

MR JACKSON:   Well, your Honour, the written arguments in the Court of Appeal are in the appeal book.  I cannot say that there was never a reference to the other provisions; no doubt there was because your Honours will see that the Court of Appeal discusses some of them.  But your Honour will see the way in which the question is framed.  It goes over from the bottom of page 12 to the top of page 13. The question was whether those two provisions operated to preclude the payment of compensation to the extent we were relying on the second option.  So that was the narrow question, your Honour, and that is the only issue that at that point was raised.

HAYNE J:   Because the root of the difficulty seems to me to be, or the root of my difficulty at least, is that the second option identified at page 11, and indeed perhaps the first option as well, are not immediately connected, at least in my mind, with the operation of 3.5(1)(a), whether in subparagraphs (i) or (ii), and it seems to be cast at a level two or three steps beyond the engagement of 3.5(1)(a)(i) or (ii).  I would understand you to say that you have a claim or may have a claim under (a)(i).

MR JACKSON:   Yes.

HAYNE J:   In part because the development control plan does not itself constitute prohibition or restriction but indication of what is to happen in the future.

MR JACKSON:   That is so, your Honour, yes.  Your Honour, that is I think in fact summarised probably accurately and in short form in Justice Davies’ judgment in the first case at page 125, paragraph [28] in the second sentence:

The reason why the respondent’s interest is affected by the coming into force of the development control plan is that that plan, by its operation, restricts the use of land.  But it does not do so immediately and directly; it does so only potentially thereby reducing its value.

Now, your Honour, the way in which his Honour puts it in a sense is reflecting his view – what I think is his view – of (1)(a)(ii), but our case of course is based on (1)(a)(i).

Now, your Honour, it is something in relation to which the amount we might succeed in getting, who knows, but we have not got to that point really.  The view which the Court of Appeal adopted appears from its second set of reasons, your Honours, at page 145, paragraphs [6] to [8].  Now, your Honours will see in paragraph [6] that his Honour says:

One reason why this Court reached a conclusion contrary –

and he refers to 3.5(4)(d).  Now, your Honours, he then goes on to paragraph [7].  He says:

It is true that a claim based upon the first option . . . would require evidence to be heard in order to determine whether . . . the appellant had a legal right –

Your Honours, could I just pause to say that assumes that 3.5(4) would be operating in relation to it, but he goes on to say then in the next sentence, about line 30:

However even if it did have such a right, it was not one which the coming into force of a development control plan prohibited or restricted for the reason that . . . a development control plan affects land only potentially because it merely indicates the intentions for the future development of designated parts or the whole of a planning scheme area.

which seems to mean, your Honours, if one goes back then to what is said in paragraph [6], the development control plan, or the implementation of the development control plan, cannot give rise to a claim for compensation, or an entitlement to compensation under 3.5(1)(a)(i).  That is the essence of what they say.

Your Honours, I said a moment ago the reasoning, with respect, is not entirely clear and in relation to paragraph [7] why would one get to section 3.5(4)(d), which is a provision excluding compensation otherwise payable, when the essence of the judge’s reasoning was there was no entitlement in the first place.  Of course, your Honours, as the wording of the second sentence of paragraph [7] of those reasons indicates, there is reference there made only to the second part of 3.5(1)(a) and no attention is given to the first.

Now, the view of injurious affection adopted by the Court of Appeal in that regard is contrary to the language of the provision, in our submission, and also to a number of other decisions.  An early and leading case on compensation provisions is Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1 at 9. Your Honours, I said it was a leading case. It is referred to as such in the commentaries on provisions of this kind. We have handed your Honours today rather fuller extracts from two books on the subject, one by Justice Wilcox and the other by Dr Fogg. Could I go to page 9 of the reasons for judgment. Your Honours will see in the left column, speaking about provisions which relevantly were similar to paragraph (a):

The notion of “injurious affection” of an estate or interest in land . . . is apparently not intended to be confined to the taking away or cutting down of one or more of the rights which are normally incidental to such an estate or interest.  Subparagraph (iii) deals with “restrictions,” but the expression “any provision contained in the prescribed scheme” in sub‑par (i) and the expressions in other sub‑sections . . . are not thus limited.

He then goes on to refer, your Honours – I will not read it out - it is a passage that goes through for most of the paragraph to the fact that the provision from which it appeared to be derived in the English Town and Country Planning Act added the words which your Honours will see italicised halfway down the left column:

being a provision . . . which infringes or curtails his legal rights in respect of that property.”  In our Act the words which I have emphasised are omitted from sub‑par (i).  The distinction between the broader head of injurious affection . . . and the more precisely delineated head under sub‑par (iii) –

which is relevantly sub‑paragraph (ii) here:

is carried into other provisions of the legislation –

If I could go then to page 12 in the left column, your Honours will see in the first new paragraph on the page his Honour saying:

It is apparent from the whole tenor of the legislation . . . that a prescribed scheme is intended to do more than merely to regulate and control “the use of land . . . by means of commands and prohibitions . . . A prescribed scheme is also intended to serve as what may be termed a blue‑print for the future development or redevelopment of an area, perhaps over a long term of years, providing a guide for the responsible authority . . . Portions of the scheme which do no more than to provide a guide and an indication in this way are none the less “provisions” . . . with an “operation.”

Your Honours will see in the next paragraph:

they provide such a guide and such an indication . . . They . . . provide a foundation necessary for the exercise of powers –

in the future.  Then the first new paragraph in the right column says:

unlike the corresponding English provision is not confined to “provisions” of any one type . . . or to any one mode of “operation” . . . It relates to “any provision,” as do other provisions, earlier referred to, which deal with affection or injurious affection ‑ ‑ ‑

GUMMOW J:   These provisions would not amount to an acquisition in the constitutional sense.

MR JACKSON:   No, your Honour.  Whilst I do not think these provisions were referred to, a somewhat similar question arose, I think in the Tasmanian Dam Case, about the restriction provisions there on the use of the land.

GUMMOW J:   I think in the United States it is said they are not a taking, are they?

MR JACKSON:   Yes, not a taking.  Could I just go back to page 9 for a moment in the right column.  He then refers in the first paragraph to “the prima facie measure of compensation”, being the market value.  That is elaborated upon at page 11 in the right column, the first new paragraph where he speaks of the injurious affection being something if it “brings about a diminution in the ‘market value’ of the estate or interest”.  Your Honours will see the last sentence in that paragraph.  I am sorry to have taken some time with that case, but what it does demonstrate is that it is contrary to the view expressed by the Court of Appeal in this case.

Could we also say that in the Court of Appeal itself in an earlier decision appears to have accepted the broader view.  That is T.M. Burke Estates Pty Ltd v Noosa Shire Council [1998] 2 Qd R 448. T.M. Burke Estates was not significantly different in factual terms from this case.  Your Honours will see, if I could go to page 449, that the second paragraph refers to section 3.5 and in the second sentence of that paragraph:

The phrase “injuriously affected” is not defined but it was submitted . . . and not contested . . . this meant “reduced in value”.

That was supported by subsection (8)(a).  If one goes to the facts at the bottom of the page about line 42, the appellant owned 59 hectares, it was zoned rural pursuits and designated urban area under the strategic plan, very like this case.  Four lines from the bottom of the page:

under the strategic plan, areas designated Urban Area –

and then it is described.  Then the last line on that page:

Thus, although, as presently zoned, the land could not be subdivided, because the strategic plan saw residential use as its future use, there were reasonable prospects that, at some time in the future, rezoning would be permitted to allow subdivision for residential use.  The appellant proposed to develop the land in accordance with a concept plan –

and so on.  In the next paragraph at page 450 there is a reference to what happened.  An amendment of the planning scheme in two respects:  first, designation of the subject land under the strategic plan was changed to public and private open space areas and then about line 12:

Secondly, a development control plan was gazetted applying solely to this land.

Without going to the detail of it, at about line 19 on that page:

It is plain that these amendments together put an end to the prospects, which existed before 5 May 1995, that the ultimate use of the subject land would be urban residential and that, to that end, it would be subdivided –

as envisaged.  Your Honours will see, if one goes down to about line 43 on that page, it is said:

The effect of the changes on 5 May were to the potential future use of the land.  There is no doubt that they reduced its value because, as we have said, they put an end to the prospect which previously existed of the land being used for residential use and, consequently, of being subdivided for that purpose.

One sees then a discussion of the possible application of section 3.5(4)(c) and (g), but then, your Honours, in dealing with the matter presently in question at the bottom of page 451 in the last paragraph:

Unless paras (c) or (g) apply, as these are the only preclusion provisions relied on, the appellant is entitled to compensation for the injurious affection to its interest and the amount of that compensation is the amount by which the interest is reduced in value by the amendments of 5 May 1995 –

and, your Honours, those amendments are the ones I referred to a moment ago, the amendments to the strategic plan.  Now, the strategic plan does not itself have an operative effect in prohibiting or restricting.  No doubt it has an effect but it does not have the effect itself of prohibiting or restricting.  Now, your Honours, could we refer also – and I will do so very briefly – to two other cases on this point.

GUMMOW J:   Just before you leave Burke, at the top of 449 there are three cases which are cited.  You do not know, do you, if any of those referred to Bingham, as to injurious affection?

MR JACKSON:   Your Honour, I have Douglas here, I think, but I do not know whether it did – I am sorry, I cannot give your Honour a short answer to it.  I was going to refer your Honours to two further cases.  One is Sparke v Noosa Shire Council [2001] 1 Qd 344 and, your Honours, I simply use this for the moment by way of example.  Your Honours will see at the bottom of page 344:

The appeal concerns land in the Noosa Shire the appellants’ interest in which, as is common ground, was “injuriously affected” within the meaning of s 3.5(1) of the 1990 Act by the circumstance that there came into force on 5 September 1997 a new strategic plan.

It is referred to a little more in that paragraph.  What happened in that case was that no point was taken that 3.5(4)(d) was not potentially applicable.  Your Honours will then see on page 345, about line 21 that immediately there was movement on to a discussion about the operation of 3.5(4)(d) without any consideration of the question whether it was applicable at all, but what seems to have been assumed was that subject to the operation in the other provision that 3.5(1) would apply where there was a change in the strategic plan.

Finally, your Honours, another decision of the Court of Appeal in Bennett v Fitzroy Shire Council (2003) 128 LGERA 341. The case does not decide the issue. It is simply an example of a case where the bringing into being of a development control plan was treated as giving rise to a claim for compensation. Your Honours will see that referred to at page 342, paragraph 2 and then under the heading “This appeal” on page 343 your Honours will see that the bringing into being of the development control plan was the basis of the claim for compensation.

GUMMOW J:   Just going back to Sparke, at 345, line 45:

the appellants’ contention is that they had a “legal right” within the meaning of the former provision.

Where does the phrase “legal right” ‑ ‑ ‑

MR JACKSON:   Section 3.5(4)(d), your Honour, the fifth line.

GUMMOW J:   Yes, thank you.

HAYNE J:   You say we never get there?

MR JACKSON:   Do not get there, your Honour, yes.  What is curious, your Honour, with respect, is that the view expressed by the court in the second of the present cases was one that one does not see elsewhere expressed.  Could I refer your Honours to some textbooks on it, Wilcox, The Law of Land Development in New South Wales (1967) at page 280, where your Honours will see at page 280 under the heading at the top of the page, “Meaning of Injurious Affection”.  He simply adopts in the passage that goes down to the fifth last line on the page what had been said in Bingham.

In Fogg, Land Development Law in Queensland (1987) at page 718 your Honours will see ‑ could I say that at the time Dr Fogg was speaking of the two enactments which were replaced by the enactment with which the Court is currently concerned, those two enactments being the City of Brisbane Town Planning Act on the one hand and the Local Government Act on the other, dealing with places outside the City of Brisbane.  He was using the City of Brisbane Town Planning Act as the base for his discussion.  Your Honours will see at page 718 in the paragraph commencing about point 3 on the page:

Assuming the claim is not for worsenment and also offends against neither of the other two principles of identification, what is the mark of its existence in relation to specific land?

Your Honours will see the reference to Bingham that goes through to pretty much to the bottom of the page and over to the top of the next page. He says at page 719, the first new paragraph:

The thrust of this passage is equally relevant in Queensland.

Your Honours will see what he says about it.  Could I go then to our written submissions, to paragraph 33 and, in particular, if I could go to paragraph 33(b) on page 11.  Your Honours, I will not read out what is there, but that is what we would submit about the view adopted by Justice Davies that I have been referring to.

McHUGH J:   What do you say about the passage that appears in the judgment of Justice McPherson at page 119, paragraph [10]?

MR JACKSON:   Your Honours, there are a couple of things I wanted to say about that.  May I come to them in just a moment?

McHUGH J:   Yes.

MR JACKSON:   I do intend to go to that and, your Honour, if I could just say one thing about it.  It starts, with respect, unpromisingly, because what your Honours will see is that he says what seems to be a very curious thing:

The respondent’s submission would treat s 3.5(4)(d) as creating a right to compensation that is different from and in some respects wider than the right under s 3.5(1)(a) from which it is intended to detract.

Now, your Honour, on no view ‑ ‑ ‑

GUMMOW J:   There is only one right.

MR JACKSON:   Yes, your Honour.  On no view could that be correct.  Your Honour, may I come back to it a little more?  Your Honours, if I could just say a couple more things about the aspect adopted by the Court of Appeal in the second judgment.  If the approach which it took is not correct, which meant the consequence would be that section 3.5(1)(a)(i) was applicable, your Honours, there was nothing in section 3.5(4)(d) which would deny an entitlement to compensation based on the first option, for group housing development.  That was so for two reasons. 

The first is one which I will mention and then develop in a moment, namely that the operation of the provision was not itself to prohibit or restrict.  The second is, your Honours, that we would have the opportunity to establish in any event that we had a legal right in the sense used in section 3.5(4)(d) and explained by section 3.5, and in relation to that second aspect group housing development was a consent use under the table of zones, that is at page 56, and we would be entitled to seek to rely on section 3.5(5).

Now, your Honours, maybe we would succeed, maybe in the end we would fail, but we would say two things.  We should not have been knocked in limine, as it were, on the 3.5(1)(a)(i) issue on the first option, and that section 3.5(4)(d) in fact never came into play because the provisions at least of the development control plan do not themselves prohibit or restrict.  May I come to that point, your Honours.  We would say no doubt the provisions are very material to decision making.  The more material they are the greater the compensation we would hope, but they do not do more than that.  Now, your Honours, there is a body of decisions ‑ ‑ ‑

McHUGH J:   Is not one problem with your argument this, that you say you are entitled to compensation under 3.5(1)(a) because of the statement of intent in this plan which affects the value of your land, and yet you say paragraph (d) only takes away a right to compensation when the planning instrument in effect directly prohibits or restricts the use of land.

MR JACKSON:   Yes.

McHUGH J:   Now, what would be the policy reason for that?  Why would the legislature distinguish between a planning instrument whose statement of intents injuriously affects your land because it says that in the future you will not be able to use it, and one that directly restricts the use of land?

MR JACKSON:   Your Honour, the first thing is – if I can just refer for a moment to what we have said in our submissions in reply, paragraph 3.  I just wanted to take your Honour first to the ambit of the provision, how it works in effect.  Your Honours, the first thing we say is this, that under 3.5 (1) both a direct effect and an indirect effect give an entitlement to compensation if there is a reduction in value.

Now, if one has a direct effect – it directly prohibits or restricts I mean – then if I was converting an as of right use to one which is prohibited there is no denial of compensation because one has a legal right to use it and so 3.5(4)(d) does not deny compensation and, your Honour, this is at the top of page 2.  The change of the use from a consent one to a prohibited one, compensation is only denied if you could not show that it was reasonable to expect that the exercise of discretion would be in your favour.  That is a direct effect.

If one goes then to an indirect effect from say a development control plan, you still have to show in order to get damages that it was reasonable to expect that there had been exercise of discretion in your favour.  As we say in that part in parenthesis there, a development control plan, which is discretion guiding, could not have an adverse effect on as of right use because you are entitled to do it.  It can only affect the use which requires some other consent.  If it has an indirect effect, this is paragraph (e), the prospect is greater that in the after case the land still has some value, referred to by way of use.

The result of all that is that in the case of 3.5(4)(d), which in historical terms in a sense was partly cut out of the provision immediately before it to make it clearer.  It relates only to use for a particular purpose.  What one has is a situation where, in order to bring into being a prohibition or restriction of that kind, there has to be the political will to do it without there being compensation and it is a provision really having its similarities to paragraph (c).  That is, it is part of the good neighbour aspect of it.

McHUGH J:   The amenity clause.

MR JACKSON:   Yes.  Could I just say about it that it is one thing to say, “For the future this is what we’re going to do.  If that adversely affects land, one’s entitled to compensation for it”.  If, however, the situation arises where there is an absolute prohibition on doing something that would have required consent, then it requires, I use the expression, political will to bring it in but, having done so, that is the point at which one does not get compensation for that.  So one is really talking in a sense about different points in a way.

Could I also say that your Honours will not find I think any of the commentaries on provisions of this kind saying that these provisions have an entirely satisfactory rationale.  There is some historical base to them.  The betterment parts that were the obverse of them have been cut out and it is difficult to say that there are not some cases where one person will be dealt with less fairly than another.  If I could just say in relation to that, in the area of compensation generally it is not entirely unusual, as the Court observed, to find that provisions will benefit some but not others, but one has to in the end apply the language of the provisions.

I was going to give your Honours a reference to Marshall v Director General, Department of Transport (2001) 205 CLR 603. At page 620 in the reasons of four members of the Court – but I think the other members of the Court have agreed with these reasons, your Honour Justice McHugh giving separate reasons – at paragraph 28 one of the arguments was that if compensation of this kind was held to be appropriate, then there would be people who unfairly would miss out. What was said was:

It is no answer to say, as was suggested . . . that there may be others who have lost no land but who may be either equally, or almost equally, injuriously affected in the enjoyment of their land by the implementation of a constructing authority’s purpose, yet have no entitlement to any compensation.  That is irrelevant.

Your Honours will see the remainder of the paragraph then set out.  I do not think I could attempt successfully to demonstrate a complete rationale through the provisions, but what we do say is that they are provisions to be applied according to their terms.  Could I come back, your Honours ‑ ‑ ‑

CALLINAN J:   It is very difficult to demonstrate a rationale for compensation provisions under the Acquisition of Land Act in some respects.

MR JACKSON: If I could say one sees in Australia two philosophies constitutionally. One is in respect of the Commonwealth that section 51(xxxi) of the Constitution says the acquisition of land must be on just terms. Insofar as the States are concerned, there is a number of decisions saying there is no requirement for there to be compensation in State statutes for acquisition or any level of compensation.

CALLINAN J:   The referendum on that failed, did it not?

MR JACKSON:   I think it did, your Honour, yes.  Some States have statutes providing for ‑ ‑ ‑

GUMMOW J:   The referendum was not just on that.

McHUGH J:   No, it was on four provisions ‑ ‑ ‑

CALLINAN J:   It bundled up a number of questions.

McHUGH J:   They were too smart.

MR JACKSON:   Your Honour, one has a cupboard full of referendum proposals that have not succeeded and no reference I have ever made to them has ever succeeded either.

CALLINAN J:   Some thought that was the only attractive question, I think.

MR JACKSON:   Your Honours, could I come back for a moment to the words “prohibits or restricts” that one sees used in 3.5(4)(d).  There is a body of decisions in this area, in our submission, to the effect that the right to compensation is given in broad terms and the exceptions should not be given a meaning wider than their terms properly there.

Could I go first, your Honours, to Baker v Cumberland County Council [1956] LGR 321 at 332.  Now, his Honour Mr Justice Sugerman was at the time dealing with the provision that is close enough to the equivalent of paragraph (c), rather than (d), and he said in the second paragraph on the page: 

In order that a provision of a prescribed scheme should satisfy one of the descriptions contained in –

an exclusion provision, to put it shortly –

it must, in my opinion, appear from the provision itself that it fulfils that description, for example, that it is a provision which “prescribes the space about buildings”.  It is not sufficient, that is to say, that it is a provision which brings about, or is capable of bringing about, the same result by other means.

What he then referred to in the next paragraph is one of the early decisions in the English Court of Appeal on similar legislation.  I will not read out the passages, but your Honours will see the extract from Lord Justice Bankes and then Justice Eve.  His Honour goes on to say on the fifth‑last line on that page:

The “well established rule” . . . is satisfied by reading s 342AC (2) (c) as limited in its application to such provisions as are on the face of them within the terms of that paragraph and as not extending to provisions of which no more can be said than that by indirect means they bring about, or are capable of bringing about, the same results.  The rule does not require that legislation whose character has led to its being expressed in general terms should not be applied to cases which are fairly within the scope of its general language –

et cetera.  Your Honours will see that part at the bottom of 332 to the top of page 333.

McHUGH J:   It is just a particular application of a more general principle stated in Coco’s Case, that you do not construe legislation as taking ‑ ‑ ‑

MR JACKSON:   It was referred to also, your Honours, again in Marshall v Director General, Department of Transport (2001) 205 CLR 603 at 623, paragraphs 36 and 37, by Justice Gaudron, but a different compensation context. Your Honour Justice Hayne specifically agreed with that passage at page 634, paragraph 67, and that passage was applied by the New South Wales Court of Appeal to another type of compensation in a decision in which your Honour Justice Heydon wrote the principal reasons, Roads and Traffic Authority of New South Wales v Heawood (2002) 54 NSWLR 289. At page 296, paragraph [20], there is a reference to those two paragraphs and then on the next page, at the top of page 297, there is a reference in the second line to an argument that Marshall had been:

a case where there clearly was an entitlement to compensation (the only question being its quantum), whereas the issue in the present case was one whether there was any entitlement to compensation at all.  In my opinion the principle of construction enunciated by Gaudron J is not to be read down, and does not lose its relevance, by reason of that circumstance.

The provision is at page 291, paragraph [4], subsection (2).

Your Honours, I referred a moment ago to Baker v Cumberland County Council.  That decision was applied in the New South Wales Court of Appeal in Chapman v The Minister(1966) 13 LGRA 1, first of all by Justice Wallace at page 3 just about halfway down the page where he said - your Honours will see a reference to Baker’s Case which was applied by, in effect, his Honour, then also at page 14 the other two members of the court, Justices Jacobs and Asprey.  At page 14, about point 4 on the page your Honours will see a sentence commencing “It is not sufficient that the use by the public body only” and that then goes through pretty much to the end of the paragraph where there is a reference to Baker’s Case.  At the top of page 15, the fourth line:

An indirect consequence of a zoning of land for purposes and a prohibition of other purposes may be that use or character of buildings thereon is prescribed.  However, such effect would not in our view be sufficiently direct for par (c) to apply –

Paragraph (h) dealt with the whole matter.  It was applied also by Justice Waddell in Jones v Gosford Shire Council (1975) 33 LGRA 368 at 371. Your Honours will see the passage commencing about halfway down the page where there is a reference to Baker and it goes on for six or seven lines following that.  It also seems to have been applied by the Court of Appeal itself in T.M. Burke (1998) 2 Qd R 448 at the bottom of page 450, where your Honours will see a reference I have previously given, in the last paragraph on that page to the second sentence of it, but then he goes on to say at line 47:

The question is whether these were changes which “by their operation” limited the size of allotments of “under which” the subdivision of land was prohibited or restricted.  It is no doubt possible to gives these phrases a broad meaning . . . But in order to see whether that was the intention of the legislature –

one had to see how they operated.  Your Honours, one sees on page 451 about line 9:

It is para (d) . . . which would apply where a rezoning rezoned land to a less intensive use.  Such a rezoning would “by its operation” prohibit or restrict the use of land . . . It would ordinarily also indirectly affect both the right to subdivide and the size of allotments.

They went on to say then in the next paragraph that:

To give such a rezoning the effect that either para (c) or (g) would apply would have, it seems to us, a consequence unintended by the legislature in a case which –

would otherwise fall within (d).  Your Honour, when one speaks about rezoning one is talking about provisions which of their nature are ones in the context they were speaking.

McHUGH J:   What do you say about Justice Davies’ explanation of T.M. Burke that appears at 123, paragraph [20]?

MR JACKSON:   Well, your Honour, it is an explanation in a sense.  It is not correct, with respect, because what one sees is that what the court was doing in T.M. Burke was to say that if you look at the things that fall within paragraph (d) – and this is not quite the language of the court, but it is the way in which it was doing it – it was saying you do not treat a rezoning as something which would be within (c) or be within, I think the other one was (g).  You do not treat it as having that incidental effect.  Something that is a rezoning, in terms of a particular purpose for land, of course, would be something that would fall within (d).  It would fall within (d) because it would prohibit or restrict.  But, your Honours, it is right to say that they were not dealing specifically with the question of the meaning of “prohibit or restrict” in (d), but the example which they gave was one which demonstrated that it was a provision which had a direct effect.

When one comes to paragraph [20] on page 123, it may be right to say, “Well, perhaps the court didn’t really deal with that point in T.M. Burke”, but it is not right to say, with respect, that somehow that affects the ambit of the entitlement, first of all, under 3.1(a)(i) but, secondly, to say that one reads the words “prohibits or restricts” in paragraph (d) as having a wider operation.  Where does one get it from?  These are provisions which, after all, are restricting a right to compensation.

Your Honours, I was going to go now if I may to the detail of the judgments in the Court of Appeal.  Could I go first of all to paragraph [1] of Justice McPherson’s reasons at page 117.  Your Honours will see the language that his Honour uses in speaking of “prohibition or restriction”.  That is correct as far as it goes, but what it leaves out of account is the fact that when one comes to the specific legislation, section 3.5(1)(a) has two arms, not one.  Your Honours, if one moves on from that to the substance of his reasons at paragraphs [6] to [8] at page 118, what your Honours will see ‑ ‑ ‑

HAYNE J:   But is not the root difficulty that is exposed in paragraph [1] a difficulty about what is meant by “planning scheme”, that it includes more than prohibitions and restrictions; it includes statements of intent.

MR JACKSON:   Yes, and that was the point.  That is statutorily, absolutely clear in the case of the present legislation, but it is the point that was made by Justice Sugerman in the first of those cases.  One does not have to apply – I think Chief Justice Griffith used the expression – the bastinado to have the result that to someone before their conduct may be affected.  Threats can sometimes be sufficient.

HAYNE J:   Not often in this place, Mr Jackson.

MR JACKSON:   Your Honour, this is one of the exclusions…..Your Honours, could I just say, if one goes to paragraphs [6] to [8] what one sees Justice McPherson doing immediately is to rely on the decision in Sparke but to go immediately to section 3.5(4)(d) without going to the question whether there was an entitlement in the first place.  Your Honours, as I submitted earlier, Sparke was a case where the application of 3.5(4)(d) was not put in issue.  The question was how it operated in that particular case.

Your Honours, at paragraph [9] one sees his Honour saying that the language of section 3.5(4)(d) is the same in substance as that used in both paragraphs of 3.5(1)(a) and, your Honours, it is, with respect, manifestly not so.  The provision conferring the right to compensation is wider and 3.5(4)(d) uses the language but only half of 3.5(4)(1).

McHUGH J:   Was the Court of Appeal taken to Bingham ‑ ‑ ‑

MR JACKSON:   Your Honour, I had the impression there was a reference to Bingham in the written submissions.  Could I give your Honour an answer to that in just a moment?

McHUGH J:   Yes.

MR JACKSON:   Your Honours, could I just say, coming back to paragraph [10] of Justice McPherson, I made an observation about the first sentence of it, but your Honours will see that the last sentence on page 119 says:

The foundation for the respondent’s claim to compensation is s 3.5(1) and the exception imposed upon it by s 3.5(4)(d) cannot create a right to compensation that rises above its source.

Your Honour, it is very difficult, with respect, to follow what his Honour is endeavouring to convey in relation to that.  On no view of the statute could that be right.

GUMMOW J:   Page 38, footnote 3.

MR JACKSON:   Yes, thank you, your Honour.  Yes, it is referred to in footnote 3 and your Honours will see it refers to the text in paragraph [4].  Thank you, your Honour.  Your Honours, Justice Davies’ reasons in the first case commence, essentially, at paragraph [27] on page 125.  Your Honours will see the thesis set out in the first sentence:

It can be seen from the paragraphs of s 3.5(4) that injurious affection which may give rise to compensation is thereby limited to affection of an interest in premises which is direct and immediate.  Nowhere is this clearer than in what I have described as the exceptions to par (d) -

Our submission, your Honours, with respect, is that what his Honour is doing is to construe the ambit of the right by reference to the exceptions.  No doubt one can take into account the whole of a statute to interpret it, but it is a curious thing to do, with respect, to say that the ambit of the right is determined by the exceptions.  Your Honours, in particular, your Honours will see the example which he gives commencing at about line 20:

one of the ways in which a planning scheme might most directly and immediately operate to prohibit or restrict the use of land would be where, before it came into force, there was a right to use the land for a particular purpose which the provision prohibited or restricted.  To construe par (d) . . . so as to exclude payment of compensation only where a planning scheme, by its direct operation, restricts the use of land would be inconsistent with the scheme of these paragraphs – 

Now, your Honours, if there was a right to use it then there would be an entitlement to compensation, and it is difficult, with respect, to see what his Honour was making from that example.  Paragraph (d) would not be applicable to deny compensation.

At page 125 he goes on in paragraph [28] – I have given your Honours a reference already to it – where he recognised that the plan does affect the interest and reduces its value.  It is true, of course, that there will be circumstances where the operation of the provision will give rise to a right to compensation because the affectation is in one sense indirect, but that is what it says.  In our submission, this was a case where the decision of the primary judge in the first case was one which was correct and the approach taken by the Court of Appeal was incorrect.  So far as the second case was concerned, if one puts to one side for a moment the fact that the matter was not in issue before it, one has a situation where the legal principle applied by them was in any event, in our submission, incorrect.

Your Honours, those are our submissions.  Could I just add that one of the documents we have given your Honours this morning is one to which I have not referred specifically but it is what seems to be an extract from a book by Professor Starke, as he was, in connection with land development in New South Wales.  It is a section on compensation.  It is simply background material if your Honours wish to refer to it.  Those are our submissions.

McHUGH J:   Thank you, Mr Jackson.  Yes, Mr Lyons.

MR LYONS:   Your Honours, before I come to submissions in support of the position which the Council takes in this Court, can I mention a couple of matters very briefly.  Your Honour Justice Hayne asked about provisions which create the discretion to grant consent referred to in section 3.5(5).  In the Act sections 4.12 and 4.14 deal with applications for town planning consent and, in particular, section 4.13(1) requires the local authority to consider the relevant application for consent and objections, for which provision is made in the previous section.

Then in subsection (4) it is to make its decision on the application within a stated period, and in subsection (5) its power to make decisions is set out.  By comparison, could I draw attention to sections 4.3, 4.4 and 4.5.  These deal with rezoning applications, which are obviously different from town planning consent applications, rezoning requiring a change of the zoning consent, providing for approval of a particular use which in the zone may be carried out with consent.  Section 4.3 deals with the making of the application, 4.4 with its assessment by the local authority, including subsection (1), requiring consideration obviously, and subsection (4), a time limit for making the decision, and subsection (5), the power to decide.  Section 4.5, however, requires the additional consent of the Governor in Council for that matter.

There is one other very minor point I will mention for the purposes of accuracy.  In section 3.5(2) provision is made for an amendment of the scheme as a response to a claim.  It is only in the case dealt with in subsection (1), that is where land is included in a zone, where it is to be used for public purposes or where land is affected by road purposes.  It is not material to the present case, but something was said which perhaps failed to recognise that.

Could I ask the Court to go to our written argument, paragraph 20, from which the Court will have seen that the respondent in this case takes a limited position in respect of the outcome of the case.  Consistent with the argument advanced in our written outline, our contention is not that compensation is not payable under section 3.5 where a strategic plan and what is called a discretion‑guiding development control plan has an effect on the use of land. 

Our contention, in other words, is that subsection (4)(d) is invoked, but generally that the remedy for compensation is not excluded simply because a provision affects a discretion of a kind to which a development control plan, like the one we are considering here, or a strategic plan, is directed.  I may have put the matter slightly broadly – I think I introduced the word “use” when I first stated our position and that is perhaps too broad.  We do not seek to maintain fully the position reached by the Court of Appeal.

HEYDON J:   Does that mean you abandon the second judgment, as it were?

MR LYONS:   Effectively.  We did not contend, as the Court will have seen from the record below, that the first option was unavailable as a basis for claiming compensation.  We only contended that the second option was excluded.  Although I was not in the proceedings, either in the Planning and Environment Court or in the Court of Appeal, my understanding is that the primary exclusion we relied upon was paragraph (d), the effect of which, of course, must be read with subsection (5). 

CALLINAN J:   You joined in seeking a correction of the order, Mr Lyons.

MR LYONS:   We did, your Honour.

McHUGH J:   Yes, consent order.

CALLINAN J:   Very properly, yes.

MR LYONS:   So we contend for the position that the determination which was originally sought should have been granted, and we have set out the effect of it in paragraph 20.  We understand the appellant contends for a narrow view of the operation of paragraph (d) – I think your Honour Justice McHugh introduced the words “direct effect”, in an attempt to paraphrase what really was said.  We contend for a wider view, and that is what our submissions are directed towards.

HAYNE J:   So when you say in paragraph 20 that: 

s. 3.5(4) and (5) preclude the pay of compensation to the appellant if and to –

a limited extent, the only provision of 3.5(4) or (5) which you say is engaged is paragraph (d), is that right?

MR LYONS:   Paragraph (d) is the exclusionary provision, modified by subsection (5).

HAYNE J:   Yes.

MR LYONS:   We submit that, read naturally, paragraph (d) applies to exclude the payment of compensation in a planning scheme that contains provisions which “by its operation” in guiding the exercise of discretions which are to be exercised in relation to the planning scheme: 

restricts the use of land . . . for a particular purpose –

We submit that such provisions operate on the decision‑making process so as to reduce the prospects that the appellant’s development in this case might be carried out and thereby restrict the use of land, and that accordingly paragraph (d), if I may so briefly refer to it, applies to the planning scheme provisions in question here which are found in Development Control Plan 1. 

We submit the expression “by its operation”, found in paragraph (d), focuses on what the provisions of the development control plan do, that is, on their substantive effect, and the expression “by its operation” is to be constructed with an expression such as “in terms” or “expressly”.

We note that this expression “by its operation” is not found in the earlier provisions from New South Wales which have been the subject of a number of the cases that have been referred to by our learned friends and from which the Queensland provisions appear to have been ultimately drawn with, we would add, a number of adaptations.

McHUGH J:   But your argument comes to this, does it not, that if the value of land is affected by a statement of intent the owner of the land is not entitled to any compensation even though the relevant authority lacks what I will call the political will to put the intent into action?  So, if it never comes to fruition you are not entitled to any compensation?

MR LYONS:   Our argument comes to the view that the submission - that paragraph (d) embraces both those cases which directly and indirectly restrict land.

McHUGH J:   Yes.

MR LYONS:   Your Honour then raises with me that that means that there is a lack of political will to bring to fruition the restricting effect.  That, in our submission, is not a reason to read down the scope of paragraph (d).  It simply means that paragraph (d) protects less stringent and more stringent provisions in a planning scheme and we would submit that there is no reason - I will come back to this a little later – to take the view that the more stringent provisions are protected by (d) but the less stringent are not.

HAYNE J:   In what way does Development Control Plan 1, by its operation, restrict the use of the appellant’s land?

MR LYONS:   Its operation is to guide the exercise of discretions and in doing so it will restrict the use of land.  The appellant’s case in its claim for compensation is that it cannot use all of the land in sub‑precinct D which is designated as open space because the development control plan will guide the exercise of discretions relating to rezoning and subdivision under option 2.

HAYNE J:   It may sound a captious point, but I do not think it is, its complaint is not, in effect, that it cannot use the land, its complaint is that its value is reduced and that it cannot sell it to someone who wants to set about developing it for the price it could have obtained before this plan was promulgated.

MR LYONS:   Ultimately that is so, but the features which engage the exclusionary provisions require attention to be paid by the way the development control plan affects value.

McHUGH J:   Perhaps I do not quite understand this, but does the existence of the DCP 1 prevent the Council from giving consent as to a scheme that would have operated immediately before September 1991?

MR LYONS:   If an application was made immediately before September 1991 and the coming DCP were ignored, which I think is really the question that I need to respond to, then there would have been no prohibition and an expectation that the rezoning would have been approved because the strategic plan provisions to which the Court was taken earlier tended to favour that outcome.

The introduction of the DCP does not provide a complete legal bar to the approval of the rezoning, but it does, in practical terms, have the likely outcome that it will be refused, and it is in that sense which we would submit it operates to restrict the proposed use of the appellant’s land.

CALLINAN J:   Mr Lyons, was rezoning necessary before the DCP came in?

MR LYONS:   Yes.

CALLINAN J:   That would have been necessary in order to develop the land ‑ ‑ ‑

MR LYONS:   For option 2, yes.

CALLINAN J:   For option 2.

MR LYONS:   That is the distinction between the first option and the second option.

CALLINAN J:   But you say there was a reasonable expectation that that rezoning would have been granted ‑ ‑ ‑

MR LYONS:   We certainly would be prepared to assume that for the purposes of the questions I am responding to, yes.

CALLINAN J:   All right.  Rezoning would still be required to develop the land in any way or in any more intensive way after the DCP came in?

MR LYONS:   The need for the rezoning, in a legal sense, is not affected by the introduction of a development control plan.  It is the operation on the exercise of a council’s discretion to approve and the influence it has on objectors who would no doubt make submissions and perhaps appeal.

CALLINAN J:   The DCP is part of the planning scheme?

MR LYONS:   Yes.  I was seeking to focus on the words “by its operation”.  I was going to take the Court to Bingham’s Case which the Court has already seen which is ‑ ‑ ‑

HAYNE J:   Sorry, could I detain you a moment on “restrict the use of land”.  What relevantly do you say is the use of land?

MR LYONS:   The use of land which the appellant has particularised is the use of all of the land for residential development and the restriction is that the open space areas cannot so be used.

HAYNE J:   So the use is the erection of dwelling houses or ‑ ‑ ‑

MR LYONS:   And their occupation, ultimately, and so forth.

HAYNE J:   Yes.  That is a use as of right under the scheme as it stood before the DCP.  What you could not do was subdivide?

MR LYONS:   The use of the block as a single block for a house was a use as of right, but that was not the use the appellant saw as reflecting the highest and best value.  The use the appellant saw as reflecting the highest and best value was a series of smaller allotments with separate houses and much of the land ‑ ‑ ‑

HAYNE J:   Which you say encompasses the necessary subdivision?

MR LYONS:   In this context, yes, and particularly when a rezoning is required which would invoke, as it were, the guiding effect of the development control plan to exclude the open space areas of sub‑precinct D from such a use.  I was then going to move to Bingham’s Case 20 LGR (NSW) – the reference has already been given – simply to return, if I might, briefly to a passage on page 12.  I have mentioned that in the New South Wales legislation the exclusionary provisions do not have the expression “by its operation”, but there was a similar expression in the provision which granted the right to compensation in the first place, and that has been discussed on page 12 in the left‑hand column in the paragraph commencing at about point 3.

Your Honours have already seen that a scheme goes beyond commands and prohibitions addressed to owners and, as his Honour says, it is:

intended to serve as what may be termed a blue-print . . . a guide for the responsible authority and for other authorities –

In the last sentence in that paragraph to which the Court has been taken, it is said that:

Portions of the scheme which do no more than to provide a guide and an indication in this way are none the less “provisions” . . . with an “operation.”

They have an operation in the sense that they provide such a guide and such an indication as I have mentioned . . . 

The colourings and markings on the map . . . But they have an “operation” in the sense of providing such a guide and such an indication as I have mentioned –

and then goes on to refer to other consequences.

This, in our submission, demonstrates the expression has been used in a similar context to extend to provisions which guide discretions.  We note that this judgment given in 1954 dealing with early compensation schemes in this country appears to have been regarded as something of a seminal judgment on the way that the compensation provisions as they appeared in the New South Wales Act and provisions similarly drawn might operate.  We would submit therefore that the effect of the introduction of the expression “by its operation” in paragraph (d) is to pick up discretion‑guiding provisions such as Development Control Plan 1.

GUMMOW J:   The text of 342AC is set out at page 4 in the right-hand column.

MR LYONS:   Thank you, your Honour.

CALLINAN J:   Mr Lyons, would it not be, however, more accurate to say that a DCP by its operation influences, perhaps heavily influences, the use of land rather than absolutely prohibits or restricts?

MR LYONS:   Your Honour, one can take a range of views of the meaning of those expressions.  For example, one could simply say prohibits or restricts and one could say “prohibits” plainly means the legal effect of the provision is to prevent the activity occurring.  The term “restrict” is broader, but the introduction of the words “by its operation” seems to be intended to modify what might otherwise be one way of reading the expression “prohibits or restricts”.

HAYNE J:   It is sharply distinct from the wording of 3.5(1)(a)(ii).  Paragraph (d) might have read, “Subject to subsection (2), where an interest in premises is affected by any prohibition or restriction imposed by the planning scheme”, et cetera, “unless”.

MR LYONS:   We would, with respect, adopt that, thank you.  We would say the word “imposition” is more mandatory or ‑ ‑ ‑

GUMMOW J:   The phrase in 342AC was “by the coming into operation” and 3.5(1)(a)(i), “by the coming into force”.

MR LYONS:   Can I just catch up with your Honour for a minute.  342AC(1)(a), was it, your Honour?

GUMMOW J:   :

injuriously affected –

(i)  by the coming into operation of any provision ‑ ‑ ‑

MR LYONS:   Yes, that is so.  That is the provision granting the remedy, yes.

GUMMOW J:   The counterpart of that in the Queensland statute is 3.5(1)(a)(i).

MR LYONS:   It would be the closer analogy.

GUMMOW J:   They change it.  They said “by the coming into force” and (d) is talking “by its operation”, which is not a thing the same as “by the coming into force”.

MR LYONS:   Yes, that probably is correct, with respect, your Honour, but “by its operation” has the effect that we submit his Honour Mr Justice Sugerman was seeking to identify in the passage we took your Honours to at page 12.  I am sorry, your Honour.

CALLINAN J:   Another word instead of “prohibits or restricts” in 3.5(4)(d) which might be more apt as to the operation of the DCP might be “affects” rather than “influences” and which would pick up the language of 3.5(1)(a) “injuriously affected”.  There is no doubt that the land is injuriously affected by the coming into operation of the DCP, is there?

MR LYONS:   Well, it may be accepted for the purpose of the argument that the value is affected ‑ ‑ ‑

CALLINAN J:   Yes, I know.  You may want to argue about that later.

MR LYONS:   Yes.

CALLINAN J:   But would the assumption that we make for this purpose, for the determination of the point of law, is ‑ ‑ ‑

MR LYONS:   There is a real prospect it will be established that the value was reduced.

CALLINAN J:   So let us assume that the land is injuriously affected.  Does not the DCP do no more than by its operation affect the use of the land rather than prohibit or restrict the use of the land?

MR LYONS:   Your Honour, the answer depends upon what effect one gives to the expression “restrict” and what effect one gives to the words “by its operation” as modifying that.

CALLINAN J:   Well, why give it any different meaning from the meaning that it obviously bears, that is, “prohibits or restricts”, which is different, expressly different, from “affects”, which is not a word used elsewhere in the same section.

MR LYONS:   “Affect” can be positive or negative and the word “restrict” is an alternative word which ‑ ‑ ‑

CALLINAN J:   Well, you would not have any claim if it positively affected it.

MR LYONS:   No.

CALLINAN J:   So it must mean adversely affects.

MR LYONS:   I think your Honour commenced this discussion with a reference to paragraph (b), did you not?  Paragraph (d), was it?  I am sorry, I may have misunderstood.

CALLINAN J:   I was referring to (d), Mr Lyons.

MR LYONS:   Paragraph (d) only?  I am sorry, your Honour.  Thank you, your Honour.

CALLINAN J:   I was contrasting “prohibits or restricts” ‑ ‑ ‑

MR LYONS:   With “affected” at the beginning of the second line – yes, thanks.

CALLINAN J:   ‑ ‑ ‑ with the word “affected” in 3.5(1)(a).

MR LYONS:   Your Honour, I do not know that I can say more than I have said.  It is different to “imposed” in 3.5(1)(a)(ii).

CALLINAN J:   I am sorry, Mr Lyons, where is that?

MR LYONS:   Section 3.5(1)(a)(ii) talks about “any prohibition or restriction imposed by the planning scheme”.

CALLINAN J:   Yes.

MR LYONS:   That would have been a formulation which could have been adopted to express the view that your Honour is raising with me.  We would submit there is some force in the argument, the discussion of the word “operation” in Bingham.  It is intended to be expansive, if anything.  It is not ‑ ‑ ‑

McHUGH J:   Well, your opponent’s argument in effect writes out the words “by its operation”.

MR LYONS:   Yes.

McHUGH J:   His construction would be the same if the words “by its operation” were not there.

MR LYONS:   Yes, your Honour.

McHUGH J:   You say “by its operation” obviously means that the way it operates in practice must restrict.

MR LYONS:   Yes, that is, with respect, what we seek to say.

CALLINAN J:   Mr Lyons, if, in fact, the proposition I put to you is right, that “prohibit or restrict” is something different from “affect”, something much larger and perhaps more absolute than “affect”, then your case fails, does it not?

MR LYONS:   I think that is probably right, your Honour.

HAYNE J:   Or is “restrict” simply a species of the genus “affect”?

MR LYONS:   Yes, that is what I have sought to say a little while earlier.  Depending on how far one goes with the prescriptive effect of the expression “prohibit or restrict”, it may well defeat my case entirely, I think that is perhaps correct.

CALLINAN J:   Or if we substituted the word “influence” for “prohibits or restricts” the same would be the case.

MR LYONS:   No.

CALLINAN J:   That is to say that “prohibits or restricts” is something quite different from “influence” and it must be, and it is quite clear that the DCP at the very least influences the use of the land.

MR LYONS:   Your Honour, if “prohibits or restricts” simply means “influences”, then I suspect that means we win, because influences ‑ ‑ ‑

CALLINAN J:   No, no, I was putting to you that it was quite different, that there were an alternative to “affect” and as different from each of them, “affect” or “influence” being quite different from “prohibit or restrict”.

MR LYONS:   It is certainly different from “prohibits”, because “prohibits” is much more prescriptive.  The word “restrict”, we submit, has a broader effect – I am having difficulty in finding separate words for all of these things.  Can I say that we have also given the Court, simply to demonstrate that our submission is open, some dictionary definitions, intended to show that the word “operation” is apt to extend to “influence”.  Shall I simply mention them without taking the Court to them?  I am happy to take the Court through the dictionary definitions if need be. 

In the Macquarie Dictionary extract we provided, paragraphs 4 and 3 both refer to “influence”.  In the Australian Concise Oxford Dictionary extract we have provided, the definition of “operation” is also, we submit, relatively broad.  In definition 1, paragraph c, it talks about:

The scope or range of effectiveness of a thing’s activity –

showing a fairly broad operation.

GUMMOW J:   But “operation” is used in juxtaposition, in a way, and perhaps in contrast to “coming into force” and “impose”, is it not?

MR LYONS:   Yes.  It is, with respect, yes.

GUMMOW J:   It is saying something different from what is being said by either of “coming into force” or “impose”.

MR LYONS:   We would submit so.  Could I then turn to another proposition, which I have mentioned already briefly.  We would submit that a logical consequence ‑ ‑ ‑

GUMMOW J:   Because – just go back a moment – it is the coming into force or the imposition which generates the “affection”, is it not, that is being spoken of, and that is then assumed in the opening words of (d).

MR LYONS:   Yes.  It is an exemption, then, obviously, from the right to compensation which is ‑ ‑ ‑

McHUGH J:   You might get some help in the “unless” clause from the words:

before the provision in question of the planning scheme came into force –

which rather suggests that (d) and (a)(i) are synonymous.  You see, (a)(i) talks about:

the interest is injuriously affected –

(i)by the coming into force of any provision contained in a planning scheme –

and the “unless” clause speaks about:

before the provision in question of the planning scheme came into force –

and that is tacked onto the restriction in the opening clause of (d).

MR LYONS:   We would, with respect, adopt a suggestion that it indicates ‑ that is, the words that follow “unless” indicate – that (d) is to operate in respect of a provision dealt with in 3.5(1)(a)(i).

McHUGH J:   Yes.

MR LYONS:   Our next submission is that the logical consequences ‑ ‑ ‑

GUMMOW J:   Just explain to me how the qualification to (d) works?

MR LYONS:   The qualification to (d), your Honour, in (d) itself, works in this way.  If it were not for the qualification, any provision of any kind which prohibited or restricted the use of land would be excluded from the compensation regime.  The qualification then ‑ ‑ ‑

GUMMOW J:   And “unless” reinstates, does it not, in some way?

MR LYONS:   It reinstates, effectively, yes.  Cases where there was a legal right which is expanded by subsection (5) immediately before the provision came into force.

McHUGH J:   Where you seem to get some assistance, I think, is that the “unless” clause seems to operate on the hypothesis that what it is dealing with is the very provision which has brought into operation the opening part of paragraph (d).  It is because there is a provision in question in the planning scheme that by its operation has prohibited or restricted the use of the land that you have to ask whether you had a legal right immediately before its enactment.

MR LYONS:   That is correct, and I think I tried to say a little while ago that moreover the “unless” provision assumes that it is the “coming into force” provisions which can trigger the compensation claim which (d) deals with generally.  I do not know whether I fully answered your Honour Justice Gummow’s question about the effect of paragraph (d), but a practical example may be of assistance to avoid any debate about the scope of the expression “prohibit or restrict by its operation”, if one simply took a case where unit development was a permitted use in a scheme.  That was because the land was in – we will call it a residential B zone, a common zone where unit development is permitted, and the new scheme put the land in the residential A zone and the unit development was there prohibited, then the “unless” clause would operate because, on any view, there was a legal right previously to carry out the unit development which has been lost as a result of the new scheme.  That is when the “unless” clause ‑ ‑ ‑

GUMMOW J:   Lost as a result of the coming into force or the prohibition?

MR LYONS:   In this case, it is a prohibition that I have taken as the example because it is non‑contentious and it is lost as a result of the prohibition.

McHUGH J:   As is so often the case, it is the use of the passive voice in paragraph (d) that leads you into ambiguity and trouble.  You just do not know what is the actor that prohibits.

MR LYONS:   Yes.  What your Honour says is true, but then again it may be a technique for expanding the operation of (d).

McHUGH J:   It is a common technique.

CALLINAN J:   Mr Lyons, just getting back to Justice Davies’ judgment in paragraph [5].  His Honour seems to have used this as an aid to construction.  At page 124, paragraph [25], about halfway through it his Honour said:

Speaking generally, these are cases in which the coming into force of a provision of a planning scheme has only a remote or indirect effect on the value of –

That just is not right, is it?  For example, if you look at any of them, apart from those relating to contravention, the effect would be very direct, and it just does not seem to me to be ‑ ‑ ‑

GUMMOW J:   You do not embrace that, do you?

MR LYONS:   No, we do not contend that direct effects only are compensable or that the exclusions in (4) relate only to indirect effects.  I was going to go to the next submission, which was that the appellant’s approach, as we understand it, to paragraph (d), has illogical consequences.  It is a matter which your Honours have already seen was adverted to by his Honour Mr Justice McPherson in the second sentence in paragraph 10 on page 119.  We, with respect, would perhaps formulate the proposition or express the difficulty in language which is a little different but nevertheless adopt the sentiment expressed there.

We would make these submissions.  Under paragraph (d) compensation is not payable where use of land is expressly prohibited unless the land only previously had a legal right, including the extended sense in subsection (5), to carry out the use.  The consequence is the local authorities may introduce provisions into a planning scheme which prohibit the use of land, knowing no claim can be made against them unless the land owner previously had a legal right.  On the appellant’s argument, however, a local authority which introduces a discretion‑guiding provision, as distinct from the prohibition, does not enjoy the same protection.

We would submit that is illogical for two reasons.  The first is that the provision which prohibits the use will do greater injury to the land owner than will the discretion‑guiding provision because there is always the prospect that in a particular case a discretion‑guiding provision will yield to other considerations and we would submit it would be ‑ ‑ ‑

GUMMOW J:   Why?  The measure of compensation would differ, would it not?

MR LYONS:   That may or may not be the case.

GUMMOW J:   One category is more ethereal than the other, is it not?

MR LYONS:   When it comes down to the practicalities, that is not necessarily so.  It may be in a particular case if we did not have the exclusionary provision there may be full compensation because of a discretion‑guiding provision and there may be limited compensation if the discretion‑guiding provision is not likely to be effective.  But the claims are large, this is a claim for $9.3 million and there are other examples.  The purpose, we would submit, is protective, and we would submit that it is not logical for the reason I have already advanced.

The second reason, we would submit, is this.  The appellant’s approach has the consequence that local authorities are encouraged to actually prohibit uses, thereby protecting themselves from claims for compensation, rather than to introduce more flexible discretion‑guiding provisions which may yield to other considerations in a particular case.

CALLINAN J:   I do not know about that, Mr Lyons.  I suspect that local authorities bring in DCPs and that kind of thing because they are going to be palatable but they intend to apply them to the letter anyway.  There are all sorts of political considerations and objectives operating here.  They might not bring in totally restrictive and prohibitory provisions because they know the Minister will not approve them anyway.  These have to be approved by the Minister and the Governor in Council, do they not?

MR LYONS:   As an amendment to the scheme, they do.

CALLINAN J:   They just will not get them through.  Easier to get through than prohibitions, but they intend to apply them as of they were prohibitions.

MR LYONS:   Your Honour, the fact remains so far as their intention to apply them is concerned, ultimately there are rights of appeal in any event, so that if they really wish to have something which is effective regardless of the exercise of discretion the subject of regulation in that respect.

CALLINAN J:   If you have got the money and the endurance to appeal, the patience.

MR LYONS:   True.  But, nevertheless, that is the remedy the statute gives for the difficulty which your Honour raises.  With respect, your Honour, it remains correct, in our submission, that it pushes a local authority to a less flexible approach to regulating development in its area which, we would submit, is not a desired outcome in terms of the implementation of this legislation.

McHUGH J:   Have you come to the end of your submissions?

MR LYONS:   No, I have not, I am sorry, your Honour.  I have finished that point.  I will try to be relatively brief.

McHUGH J:   No.

MR LYONS:   I was simply waiting for responses.  I seem to be getting a lot of responses and I did not want to proceed beyond this before I dealt with it.  Your Honours, in our written submissions we have dealt with a submission to the effect of which the purpose of paragraph (4) is protective of local authorities, and we dealt with one of the objectives expressed in the Act which we have submitted is to facilitate orderly planning and development.

We have not in terms referred to section 14A of the Acts Interpretation Act, which we provided to the Court recently, but it is a provision which I am sure the Court is familiar with at least from other jurisdictions, which favours the construction of that provision which gives effect to the Act’s purpose.  I am happy to go through that in detail, but I am also happy to rely on the written submission in that regard because I suspect the point is sufficiently clear there and understood by the Court.

Could I then turn to Sparke’s Case.  Can I first deal with the question which your Honour Justice Callinan raised at the beginning as to whether there is ever a situation where a local authority exercises a discretion of the kind referred to in section ‑ ‑ ‑

CALLINAN J:   Which is absolute.

MR LYONS:   Which is absolute - in subsection (5).  I think your Honour was perhaps focusing on where the expression “legal right” is expanded by the exercise of the local authority’s discretion.  Your Honour referred in particular to the rights of appeal to the Planning and Environment Court.  I should first say obviously that this is not a discretion which is subject to ministerial control, unlike a rezoning.  Sorry, the discretion to grant a consent is not subject to ministerial control, unlike a rezoning, and I took the Court earlier to sections 4.12 and 13 and contrasted them with sections 4.3, 4.4 and 4.5.

Secondly, in respect of appeals, could I take the Court to the Act to section 7.1 on page 97, where Part 7 deals with appeals.  Section 7.1 picks up the right, and 7.1A deals with determination of the appeal.  It provides in subsection (4) – I probably should mention first of all subsection (3), various powers of the court on an appeal, and they are set out in the paragraphs (a) through to (f).  Then subsection (4):

Where a determination of the Court amends or alters a decision of the Local Authority, the determination of the Court is to be the decision of the Local Authority superseding the previous decision (or part thereof, as the case may be) of the Local Authority.

So in a sense, we would submit ‑ ‑ ‑

CALLINAN J:   I understand the point, yes.

MR LYONS:    ‑ ‑ ‑ subsection (5) is directed to that.  Could we add to that, if I may briefly.  If we were wrong there does not seem to be any discretion which subsection (5) would be directed to.

CALLINAN J:   Mr Lyons, does an objector have an appeal against any application that the appellant might have made?

MR LYONS:   A rezoning application, yes.  That is in, I think, section 4.3, from memory – the provisions relating to objections on rezoning applications.

CALLINAN J:   That objector could then become a party to an appeal?

MR LYONS:   Yes, that is so.  We would simply say of Sparke that it is a decision actually based on section 3.5(4)(d).  It related to the introduction of a strategic plan – as I think has been pointed out by our learned friends earlier – which is a discretion‑guiding provision, and the decision was that paragraph (d) applied to prevent compensation.  Now, the point may not have been expressly taken, but it does underlie the court’s decision.

We submit there is no need to introduce a gloss into paragraph (d) of the kind which was found necessary in Burke for paragraphs (c) and (g).  There was particular reasoning which led to that and it turned on the effect of paragraph (d).  It is found in Burke [1998] 2 Qd R 448, the reasoning being at page 451, commencing a little above line 10. What the court considered was this. Paragraphs (c) and (g) were concerned with exempting compensation where an interest in premises was affected by a provision which limited the size of allotments or prohibited or restricted a subdivision.

What the court said was this.  There will be cases frequently where land is, as they described it, rezoned to reduce the development rights.  They would directly affect use and that sort of rezoning – or a change in zoning in a new scheme – would directly affect use and also: 

affect both the right to subdivide and the size of allotments –

That is referred to at about line 14.  Their Honours then said: 

To give such a rezoning the effect [of that kind] that either para. (c) or (g) would apply would have, it seems to us, a consequence unintended –

because paragraph (d) was intended to ensure that where a right to use land existed prior to the introduction of the new zoning, compensation was payable.  They therefore held that the view which we now contend for of the words “by its operation” in paragraph (c) could not be maintained in respect of that paragraph.  That reasoning, in our submission, cannot apply to (d).  The other provisions of subsection (4) do not have that effect.

In respect of some of the other cases that have been mentioned, I should deal with them briefly.  The New South Wales cases on which reliance has been placed – and I mean in particular Baker, Jones and Chapman – are all cases which dealt with section 342AC(2)(c) of the Local Government Act 1919, which was quite differently worded. In our submission, in Baker it is clear the decision turned on the meaning of the word “prescribed”.  Could I take the Court to Baker (1956) 1 LGRA 321 and draw to the Court’s attention his Honour’s discussion of the language used in paragraph (c) at the bottom of page 330 in the last paragraph. He, in effect, defines the word in the fifth line on page 331 to mean:

some authoritative definition, or laying down beforehand, of rules of action.

We would submit it is clear from his Honour’s characterisation of paragraph (c), which appears at page 332 at about point 4, that it is the scope which his Honour has given to the word “prescribe” which leads to the conclusions his Honour came to about the need to say that on its face the provision had the effect of laying down rules, as it were, about use or character or space about buildings.

GUMMOW J:   Mr Lyons, have you finished with Baker?

MR LYONS:   I have really, your Honour.  With the references, I think it will be sufficient for the Court to see the point I make.

GUMMOW J:   Could you just go back to Bingham for a minute to page 4, where in the right-hand column 342AC is set out:

is injuriously affected – (i) by the coming into operation of any provision . . . or (iii) by any restrictions imposed by or under –

Is there any explanation of why (iii) was needed and why it would not be absorbed within (i) anyway?

MR LYONS:   Your Honour, I have not identified any and the same question arises in ‑ ‑ ‑

GUMMOW J:   It arises with (a), yes.

MR LYONS:   Yes.

GUMMOW J:   Why do you need (a)(ii), if it would have been absorbed within (a)(i)?

MR LYONS:   I really cannot give your Honour a helpful answer on that.

GUMMOW J:   The root of it seems to be in the old 342AC.

MR LYONS:   Yes.

GUMMOW J:   But you do not know of any discussion of the distinction in 342AC in these New South Wales ‑ ‑ ‑

MR LYONS:   I cannot say I have never read any discussion, your Honour, but I do not recall anything that really gives a sensible answer as to why both (i) and (iii) appear.

GUMMOW J:   It is that curiosity that makes it so difficult then to construe (4)(d).

MR LYONS:   In a sense that is so, yes.  I had dealt with Baker.  The other cases our learned friends relied upon were Marshall, Ellis and Road Transport Authority v Heawood.  Both Marshall and Ellis were concerned with the extent of the right and the views expressed were that the grant of a right should not be read down unless that is required by the natural reading of the language.  The issue here is not the extent of the right; it is the scope of the limitation.  We submit the natural reading of the language has the effect for which we have previously contended and we do not seek to introduce words which were not there or read it down.  We, therefore, submit that those passages really do not provide a great deal of assistance in the present case.

Your Honours, I should have mentioned also Douglas’ Case, which we have given to the Court.  I will refer to it briefly.  This is in support of my submission about Baker – I am sorry I am slightly out of order on this.  In Douglas’ Case [1993] 2 Qd R.  Again, it was the scope of the word “prescribe” which seems to have been determinative.  That appears at page 20, commencing at about line 5, where the court said:

Relevantly, the subsection is concerned with provisions which prescribe, not prohibit; put broadly, with provisions which lay down requirements which are to be met, not with prohibitions on what may be done except in the limited sense that every positive requirement carries within it a negative obligation –

It simply reinforces our submission that the decision in Baker and the decisions which followed it really do not assist in interpreting paragraph (d).  In essence, therefore, we submit that paragraph (d) should not be narrowly construed because ‑ ‑ ‑

GUMMOW J:   Can we just look at subsection (4) again?

MR LYONS:   Yes.

GUMMOW J:   Now, (b) uses the phrase “injuriously affected”, (c) it becomes “affected”, (d) it becomes “affected” – not injuriously affected – is there anything in this slipping and sliding by the draftsman?

MR LYONS:   Perhaps it indicates that not a great deal is to be drawn by comparing (c) and (g) on the one hand, with (d) on the other, but beyond that, I am not sure that I can give your Honour a great deal of assistance.

GUMMOW J:   It is “affection” again in (g).

MR LYONS:   Yes.  There is no mention of either “affect” or “injuriously affect” in (e), for example.

GUMMOW J:   No, that is right.

MR LYONS:   But ultimately, they simply seem to be various ways to describe the remedy available in subsection (1), it would seem, and it is there by implication in (e), perhaps.  I do not know that I can more than that.  Ultimately, we place some weight on the fact that it seems intended to give an expansive rather than a narrow view to paragraph (d), which is consistent with the general purpose of the Act and avoids the illogical consequences we have referred to.

CALLINAN J:   Mr Lyons, say if you were to succeed, what order should the Court make?  There would still have to be some allowance of the appeal, would there not?

MR LYONS:   Yes, we cannot contend the appeal should not be allowed on the position we have taken.

GUMMOW J:   There are two formulations in Mr Jackson’s submissions, one of them might be acceptable to you, I think.

MR LYONS:   It is suggested to me it is in paragraph 42, your Honour.

CALLINAN J:   Yes.

GUMMOW J:   You would live with paragraph 42, would you not?  Is that right?  We had better be clear about this. 

MR LYONS:   Up to paragraph (b), yes.

GUMMOW J:   Would you say that again, Mr Lyons?

MR LYONS:   Up to paragraph (b).  Paragraph (c) deals with costs, including the costs in the Court of Appeal and in this Court.

CALLINAN J:   Should you have the costs awarded against you in the Court of Appeal, though?  Because you did not invite the ‑ ‑ ‑

MR LYONS:   That is right.  We would submit we should get the costs in the Court of Appeal, because if the submissions I have made are successful ‑ ‑ ‑

CALLINAN J:   You have won there.

MR LYONS:   We effectively won there.  The decision at first instance was against us.

CALLINAN J:   But then the second hearing or the second appeal – you should not really have costs ordered against you there, because in fact you took the contrary position that that order should not have been made.

MR LYONS:   We did.

CALLINAN J:   Is there anything under the costs?  Is there a Costs Act or anything ‑ ‑ ‑

MR LYONS:   There is in Queensland an Appeal Costs Fund Act.

CALLINAN J:   Perhaps you and Mr Jackson should look at that and tell us what ‑ ‑ ‑

MR LYONS:   Perhaps we should, your Honour.  What it does, from recollection, is that it gives us a right where there has been a mistake of law to seek relief if an order is made against us.

GUMMOW J:   Could you just be quite clear about – have we a minute from you as to what order ‑ ‑ ‑

MR LYONS:   In paragraph 20, we have stated in brief form the order we seek.  It does not say anything about costs, if that is what your Honour is really ‑ ‑ ‑

HAYNE J:   I, for my part, would like a minute of what precise form of order you say should be made.  I do not want you to draft it on your feet.

MR LYONS:   No.

GUMMOW J:   Including costs.

MR LYONS:   That is what I really wanted to be clear about.

CALLINAN J:   Really, you and Mr Jackson should be able to agree as to what it would be in either case ‑ if he were to succeed completely or only partly and what the orders as to costs should be in each of those cases.

MR LYONS:   Yes, it was being suggested we might provide the Court with something in writing in due course.

CALLINAN J:   Yes, I was just suggesting it could be done by agreement, that is all.

MR LYONS:   I would be happy to do that.  There is nothing else.  Those are our submissions.

McHUGH J:   Yes, thank you, Mr Lyons.  Yes, Mr Jackson.

MR JACKSON:   Your Honours, the point with which I wish to deal concerns the use of the expression “operation” one sees in section 3.5(4)(d).  The term is used in a number of ways, not with really great precision in section 3.5, and one sees that particularly from 3.5(8)(a) because what your Honours will see there is that it says:

the amount of compensation is . . . to be an amount equal to the difference between the market value of the interest immediately after the time of the coming into operation of the provision of the planning scheme by virtue of the operation whereof the claim for compensation arose –

It is obvious, your Honours, that it is used there compendiously to describe the effect of the planning scheme, whether one uses the words “coming into force” or “the operation”, whichever it may be, and it is a provision which is used, there at least, to speak of the town‑planning scheme, the coming into operation of the provision which brings about the entitlement to compensation, and it is obviously referring back to both parts of 3.5(1)(a).  Your Honours, when ones goes to look to the provisions of 3.5(4)(d) where the ‑ ‑ ‑

GUMMOW J:   It is also in (4)(c).

MR JACKSON:   I am sorry, your Honour, (4)(c)?  Yes, I am sorry.  I was going to come back to that in just a moment.  Could I just say that staying with subsection (8) for the moment, you will see the expression used again in relation to what I call the “slight betterment” provision, that is paragraph (c), by virtue of “the coming into operation of the relevant provision . . . of the planning scheme”.  Your Honours, also in paragraph (d), “since . . . the planning scheme came into operation”.  So when it speaks of coming into operation, it really means coming into effect. 

Now, what operation?  One has to ask when one goes to provisions, where the expression “by its operation” is used, what type of operation?  If one goes to subsection (4)(c) your Honours will see that it speaks of it being “Affected by a planning scheme which by its operation prescribes”, and then when one goes to (d) it says “which by its operation prohibits or restricts”.  So it is saying, what aspect of operation is involved?  Is it prescribing on the one hand, which one would think, your Honours, with respect, must refer to prescription in the sense of saying, “This space about buildings is to be this or that or the other”.  When one comes to (d), it is speaking of an operation which is to prohibit or restrict.  “Use for a particular purpose”, your Honour.  It is easy to leave out those words in (d), but it is speaking about use for a particular purpose.

Now, as your Honours are aware, and one can see it, for example, in the table of zones that is referred to, the provisions of town plans usually list a number of uses which are permitted – permitted, permitted with consent or subject to conditions or prohibited.  They list them as uses.  The uses are usually the subject of definition.

McHUGH J:   Your argument would have the same effect if the words “by its operation” were not there in paragraph [10], would it?

MR JACKSON:   Your Honour, if one said “which is affected by a planning scheme which prohibits or restricts the use of land”, it would probably cover the same ground, but what the words “by its operation” in the particular context there and in (c) require one to look at is to say, is it affected by a planning scheme which by the operation of that scheme.

McHUGH J:   In (c) you have a precise authority in Baker’s Case, have not you?

MR JACKSON:   Yes.

McHUGH J:   Mr Justice Sugerman specifically held that it had to be directly operating.

MR JACKSON:   Yes.  Your Honour, we are not talking about provisions conferring a right.  We are talking about the provision taking it away.

CALLINAN J:   Mr Jackson, “by its operation” might be used there, in any event, to contrast the situation which is referred to in 3.4(1) which requires a Local Authority:

to give such weight as it considers appropriate to the new planning scheme – 

when an application has been lodged before the new planning scheme came into operation.

MR JACKSON:   Yes, your Honour, it ‑ ‑ ‑

CALLINAN J:   So it may be contrasting the position under 3.4(1) with the position under 3.4(d).

MR JACKSON:   Your Honour, if one looks at the composite words in (c) and asks the question, “Does it, by its operation, prescribe?” and in (d) asks the composite question, “Does it, by its operation, prohibit or restrict?”, the answer to the question is either, one says, “Yes, this operates to prohibit or restrict”, but if one looks at other circumstances in the case of a development control plan of this kind, one says, “Does this provision by its operation prohibit or restrict?”  The answer is, “No, its operation is not to prohibit or restrict.  Its operation is to do something else”.

GUMMOW J:   And its operation is really that which it has by its coming into force, within the meaning of (a)(i).

MR JACKSON:   Yes, your Honour.  Whilst the remaining words of (d) are not decisive on the question, they do, if one looks at the provision in toto, convey the impression, in our submission, that what one is looking at ‑ and I am looking at the words after “by its operation”:

prohibits or restricts the use of land . . . for a particular purpose, unless the applicant establishes that the applicant had a legal right immediately before the provision in question of the planning scheme came into force –

coming into force, in that context, conveys the impression of a provision which is prescriptive or prohibitive in nature –

to use the land or erect or use a building or other structure thereon for the particular purpose which is so prohibited or restricted –

What that means, of course, is if one took land in which there was the ability to obtain consent to use it for five purposes, one of them is prohibited or restricted.  That is what it seems to be speaking of, that kind of thing.

The restriction is something going to the extent or perhaps intensity of use for that purpose.  If one took the case of the various types of noxious industries, there may be in relation to it a prohibition on the use of the land for that particular purpose.  There may be a restriction saying, this can only be used to – in the case, say, of a waste transfer station – deal with waste of particular kinds, no liquid waste, for example, or such a quantity, or so many vehicular movements to and fro every day.  That is the kind of restriction that is being contemplated.  If one looks at the provision, that, in our submission, is what it is intended to cover.  The words “by its operation

prohibits or restricts” are a composite expression.  One looks to see what does the provision operate to do and does it satisfy that test.

Your Honours, I just wanted to say one more thing and it was this.  Our learned friend, I think in answer to your Honour Justice Callinan, said that people could object in the case of zoning.  Your Honour, it is a zoning application.  They also can object in the case of consent ones at section 4.12.

CALLINAN J:   And become parties to appeal.

MR JACKSON:   Yes.  Your Honour, there is something my learned friend wants to mention.

McHUGH J:   How long will counsel need for the agreed consent orders?

MR JACKSON:   Could we make it a week?

McHUGH J:   Seven days.

MR LYONS:   Thank you, your Honour.

McHUGH J:   Yes.  Yes, you want to mention something, Mr Lyons?

MR LYONS:   Yes, it was simply the matter I dealt with very early in response to the question your Honour Justice Hayne raised.  In addition to the provisions of the Act which deal with approvals for consent applications and rezonings I should have mentioned that there are some clauses in the planning scheme which underpin the table of zones and give legal effect to it.  I am sorry we have not included them but if the Court would find them helpful we will arrange to have them sent.  I have only a very poor photocopy with me.  They are clauses 5 through to 8.  I will show them to my learned friend first, if the Court wishes to see them.

McHUGH J:   Yes.  The Court will reserve its decision in this matter and will now adjourn until Tuesday morning.

AT 12.45 PM THE MATTERS WERE ADJOURNED