KINGSTRIPE PTY LTD and COMMISSIONER OF MAIN ROADS

[2010] WASAT 69

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

STREAM:   DEVELOPMENT & RESOURCES

ACT: LAND ADMINISTRATION ACT 1997 (WA)

CITATION:   KINGSTRIPE PTY LTD and COMMISSIONER OF MAIN ROADS [2010] WASAT 69

MEMBER:   JUDGE J PRITCHARD (DEPUTY PRESIDENT)

HEARD:   9 FEBRUARY 2010

DELIVERED          :   14 MAY 2010

FILE NO/S:   DR 229 of 2009

BETWEEN:   KINGSTRIPE PTY LTD

Applicant

AND

COMMISSIONER OF MAIN ROADS
Respondent

Catchwords:

Preliminary issue - Claim for compensation for damage suffered - Insufficient facts agreed for purpose of determining whether damage suffered by reason of the removal of material from the land - Section 203 of the Land Administration Act 1997 (WA)

Legislation:

Land Administration Act 1997 (WA), s 181(1), s 185, s 185(1), s 185(3), s 194(2), s 203, s 203(1), s 203(3), s 205, s 217(1), s 217(2), s 221(1)(b), s 226(2), s 241(6), s 241(7), s 248(1), s 264(2), s 264(3), Pt 9 Div 4, Pt 10 Div 5
Land Administration Bill 1997 (WA)
Local Government Act 1995 (WA), s 3.22, s 3.22(2)

Result:

The preliminary issue is answered 'no'

Category:    B

Representation:

Counsel:

Applicant:     Mr P McGowan

Respondent:     Mr C Bydder

Solicitors:

Applicant:     Lawfield Legal Practice

Respondent:     State Solicitor's Office

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

Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334

Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653

Butler v Egg & Egg Pulp Marketing Board (1966) 114 CLR 185

Finesky Holdings Pty Ltd v Minister for Transport [2002] WASCA 206, (2002) 26 WAR 368

Haines v Bendall (1991) 172 CLR 60

Jacobson v Ross [1995] 1 VR 337

Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522

REASONS FOR DECISION OF THE TRIBUNAL: 

Summary of Tribunal's decision

1. In 2008, Main Roads Western Australia, on behalf of the Commissioner of Main Roads, gave notice that it was planning to undertake work on part of the Great Northern Highway and intended to enter onto a portion of land owned by Kingstripe Pty Ltd to obtain materials from the land for use in the work on the road. Kingstripe Pty Ltd made a claim for compensation pursuant to s 203 of the Land Administration Act 1997 (WA), and that claim was referred to the Tribunal pursuant to s 221(1)(b) of the Land Administration Act 1997 (WA).

2. The Tribunal ordered that a preliminary issue should be determined, and that the parties agree facts for the purpose of the determination of that issue. In short, the agreed facts were that the Commissioner lawfully entered the land and while a valid notice of entry was in force, removed 79,714 bank cubic metres of gravel from the land. The preliminary issue to be determined was 'Are the facts set out above sufficient to establish damage by reason of the removal of any material for the purposes of s 203 of the Land Administration Act 1997 (WA)?'. Section 203(1) of the Act permits the award of compensation to a person holding any interest in land 'who suffers damage by reason of any entry on or occupation of the land, or the removal of any material'.

3. The Tribunal determined that the answer to the preliminary issue was 'no'.  In coming to this decision, the Tribunal considered the meaning of the word damage and concluded that it referred to any loss suffered by the holder of an interest in land arising from an impairment in the value or usefulness to that person of the land or the material taken.  The Tribunal found that there were insufficient agreed facts to conclude whether the taking of the gravel from the land impaired the value or usefulness to Kingstripe Pty Ltd of either the land, or of the gravel. The proceedings were listed to a further directions hearing to consider further progress in the matter.

Background

1. Kingstripe Pty Ltd is the registered proprietor of a portion of Melbourne Location 917 being Lot 101 on Plan 12244 and being the whole of the land contained in certificate of title volume 1513 folio 225 (the land). 

2. By letters dated 13 February 2008 and 6 May 2008, Main Roads Western Australia, on behalf of the Commissioner of Main Roads, gave notice that it was planning to undertake reconstruction work on part of the Great Northern Highway east of Walebing, and in order to complete that work, it intended to enter onto the land, and to obtain materials from the land for use in the construction of the road. 

3. That notice was given pursuant to s 185(3) of the Land Administration Act1997 (LA Act), which is located in Division 4 of Part 9 of the LA Act. Subsection 185(1) of the LA Act permits the Minister to authorise a person to occupy and use any land temporarily for the purpose of constructing or repairing any public work, and the person with that authority may, amongst other things, take stone, gravel, earth and other materials from the land. The Commissioner entered the land pursuant to the notice and took gravel from the land.

4. Kingstripe gave notice that it wished to pursue compensation for damage it alleged it suffered as a result of the Commissioner's entry onto the land. Compensation is provided for in s 203 of the LA Act. It is convenient to set out the terms of that section in full:

   (1)A person holding any interest in any land, or lawfully occupying the land, who suffers damage by reason of any entry on or occupation of the land, or the removal of any material, under Division 4 of Part 9, is entitled, subject to this Part, to compensation for the damage from the acquiring authority if the land is not subsequently taken.

   (2)No compensation is payable under this section in respect of any entry or occupation under Division 4 of Part 9 unless some person having an interest in the land gives notice in writing to the acquiring authority during the entry or occupation concerned that the person will require compensation.

   (3)Compensation paid under this section in respect of any land must not exceed the amount that would have been payable in respect of the land had the land been taken.

5. Kingstripe's claim for compensation was referred to the Tribunal pursuant to s 221(1)(b) of the LA Act.

6. Senior Member Parry ordered that the Tribunal should, at the outset, determine a preliminary issue (the terms of which are set out below).  He ordered that the parties file an agreed statement of facts and an agreed bundle of documents in relation to the preliminary issue. 

7. The preliminary issue was listed before me. Pursuant to s 226(2) of the LA Act, the parties provided their consent in writing to the preliminary issue being dealt with by the Tribunal constituted by me sitting alone.

The preliminary issue and the agreed facts

1. The parties agreed the following facts for the purposes of the determination of the preliminary issue:

   1.The Applicant is the registered proprietor of portion of Melbourne Location 917 being Lot 101 on Plan 12244 and being the whole of the land contained in the certificate of title volume 1513 folio 225 (the land).

   2.The Respondent lawfully gave notice of entry to the land under section 185 of the Land Administration Act1997 (WA).

   3.The Respondent lawfully entered the land pursuant to that notice.

   4.During the entry and while a valid notice of entry was in force the Respondent removed 79,714 bank cubic metres of gravel from the land.

2. The preliminary issue referred to me for determination is:

   Are the facts set out above sufficient to establish damage by reason of the removal of any material for the purposes of section 203 of the LandAdministration Act1997 (WA)?

3. Counsel for Kingstripe submitted that if the answer to the preliminary issue is 'yes' then this would equate to a finding of liability on the part of the Commissioner, so that at any further hearing of Kingstripe's application it would only be necessary to establish the quantum of the compensation which should be paid to Kingstripe. 

The parties' submissions

1. Counsel for Kingstripe submitted that the preliminary issue should be answered 'yes'. He submitted that the purpose of s 203 of the LA Act was to provide compensation for what was removed from land. Counsel for Kingstripe did not deal expressly in his submissions with the meaning of the words used in s 203. Instead, he submitted that Kingstripe had necessarily suffered damage because a considerable volume of gravel was taken from the land, that gravel is a commodity which has value, and the removal of the gravel from the land, without more, gives rise to damage suffered by the owner of the interest in the land. Counsel submitted that a key aspect of his submission in this case was the fact that a significant quantity of gravel was taken, and that to remove such a volume of gravel must necessarily constitute damage suffered by Kingstripe.

2. Counsel for the Commissioner submitted that the preliminary issue should be answered 'no'. He submitted that under s 203 of the LA Act, Kingstripe would only be entitled to compensation for any impairment to the value or usefulness to it of its land, or the gravel, which was caused by reason of the removal of the gravel from the land. As the term 'damage' is not defined in the LA Act, counsel relied on the dictionary meaning of the word 'damage' in support of this submission. He submitted that 'damage' can only be suffered by a person if the value or usefulness of the thing damaged to that person has been impaired.

3. Counsel for the Commissioner submitted that the ordinary meaning of the word 'damage' in s 203 was not inconsistent with the apparent meaning of the word 'damage' as it is used in other provisions in the LA Act, namely s 181(1), s 194(2), s 205, s 217(1) and (2), s 241(6) and (7), s 248(1) and s 264(2) and (3) of the LA Act.

4. Counsel for the Commissioner also submitted that the meaning of 'damage' which he advanced was consistent with the way in which the word has been interpreted by the courts.  In the context of negligence actions, the word 'damage' means 'what the plaintiff suffers as the foreseeable consequence of the tortfeasor's act or omission.  Where a tortfeasor's negligent act or omission causes personal injury, 'damage' includes both the injury itself and other foreseeable consequences suffered by the plaintiff':  Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 (Mahony) at 527.

5. Finally, counsel for the Commissioner referred, by way of comparison, to s 3.22 of the Local Government Act 1995 (WA).  Under that section compensation is payable for damage sustained through the performance by a local government of its functions under that Act.  Section 3.22(2) provides that '[t]he assessment of damage for which compensation is to be paid is to include the value of any material taken under Subdivision 2.'  Counsel submitted that this provision reflected the fact that on its ordinary meaning, 'damage' does not automatically follow from the removal of material, because otherwise s 3.22(2) would be otiose.

Construction of s 203

1. There is, at the least, a superficial attraction in Kingstripe's submissions, to the extent that taking something away from a person's land represents a loss of some kind, even if only a nominal loss.  However, ultimately I am not persuaded by Kingstripe's submissions to answer the preliminary issue affirmatively, for three reasons.

2. First, the submissions made by counsel for Kingstripe were flawed in two respects.  They were founded on facts not agreed between the parties, namely that gravel is a commodity which, at least in substantial quantities, has value.  Irrespective of the accuracy of that statement, the fact that the preliminary issue is to be answered solely by reference to the facts agreed between the parties means that it is not appropriate to rely on other facts not agreed.  It is also not appropriate to proceed by reference to facts which are not proved, or agreed, because to do so may render the preliminary determination 'unfruitful':  Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at [53] (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ) citing Jacobson v Ross [1995] 1 VR 337 at 341 (Brooking J).

3. In addition, the submission made by counsel for Kingstripe ­ that the taking of gravel from land necessarily represented a loss to the owner of that land ­ was based on an assumption.  That assumption was that gravel, a raw material, which may (depending on its quality and the purpose for which it is to be used) require work to extract it from the ground and to exploit it for use or for trade, necessarily has a value to the owner of the land when that gravel is situated in its raw state in the ground.  Without evidence to support that assumption I am unable to accept it.  If the owner of land has no present or intended use for a commodity found in its raw state in the land, has no present nor foreseeable future means of extracting that commodity from the ground, or if no market exists to trade the commodity once it is extracted from the ground, it may be arguable whether the commodity has any, or anything more than a nominal, value to the owner of that land. 

4. The second reason why I would not answer the preliminary issue affirmatively is that I do not accept that the word 'damage' in s 203 should be interpreted in the manner submitted by counsel for Kingstripe. The ordinary and natural meaning of the word 'damage' when used as a noun is 'loss or damage to one's property, reputation', 'harm done to a thing … esp physical injury impairing value or usefulness' (Shorter Oxford English Dictionary). 

5. In a legal context, the word 'damage' is ordinarily understood as having a meaning consistent with its ordinary and natural meaning.  'The word 'damage' describes the actual detriment which has been suffered by the plaintiff as a result of the defendant's wrong:  it is equivalent to 'loss' or 'injury'':  MJ Tillbury, Civil Remedies, Volume One, Principles of Civil Remedies (1990) at p 37 [3004]. As counsel for the Commissioner submitted, in Mahony at 527 the High Court observed that the word 'damage' was not to be equated with 'damages' awarded by a court, but rather referred to 'what the plaintiff suffers as the foreseeable consequence of the tortfeasor's act or omission.'

6. The word 'damage' in s 203(1) must also be construed by reference to its statutory context. Subsection 203(1) makes clear that 'damage' must be suffered by the holder of the interest in the land. Both parties agreed that the damage which may be compensated under s 203 is damage which is personal to the holder of an interest in the land. In addition, the damage suffered must be 'by reason of' the entry or occupation of the land, or the removal of material from the land by the acquiring authority. That is, a causal link must be shown between the entry, occupation or taking of material by the acquiring authority and the damage suffered by the holder of the interest in the land.

7. The final contextual consideration which arises from s 203(1) is that the entitlement in that subsection is to 'compensation' for the damage suffered. The express reference to 'compensation' (rather than, for example, to 'damages') for the damage suffered by the holder of the interest in land suggests that the objective behind the award of money under s 203(1) is solely to compensate an owner of an interest in land for the impact of the entry or occupation of the land or the taking of material from the land.

8. In actions in both tort and contract, the award of damages aims to compensate the plaintiff for the injury suffered, or the breach of contract.  The objective, generally speaking, is to provide a sum of money which will, as nearly as it is possible to do, restore the plaintiff to the position they would have been in had they not sustained the injury as a result of the tort, or had there been no breach of contract:  Butler v Egg & Egg Pulp Marketing Board (1966) 114 CLR 185 at 191, Haines v Bendall (1991) 172 CLR 60 at 63, and Burns v MAN Automotive (Aust) Pty Ltd (1986) 161 CLR 653 at 667 (although cf. the exceptions to this approach adopted in some actions in tort, discussed in Finesky Holdings Pty Ltd v Minister for Transport [2002] WASCA 206, (2002) 26 WAR 368 at [50] ­ [59] (Steytler J, Wallwork J and Parker J agreeing)).

9. The purpose behind s 203 was not expressly referred to or explained in either the second reading speech given by the Minister in respect of the Land Administration Bill 1997 (WA) or the clause notes for that Bill. However, having regard to the express reference to 'compensation' in s 203(1), and to the meaning of compensation at common law, it appears that Parliament's intention was to restore the owner of an interest in land to the position in which they would have been but for the entry onto, or occupation of, their land, or the removal of the material from their land. In turn, that suggests that in order to determine whether a person has suffered 'damage' which may be compensated under s 203, it will be necessary to consider whether, and how, the entry or occupation of land, or the removal of material, has actually impacted on the owner of the interest in the land.

10. Having regard to the ordinary and natural meaning of the word 'damage', to the terms of s 203(1) as a whole, and to the statutory context in which the word 'damage' appears, the word 'damage' in s 203(1) in my view refers to any loss suffered by the holder of an interest in land arising from an impairment in the value or usefulness to that person of the land itself, or of the material taken, and which occurs by reason of the entry onto, or occupation of, the land or the taking of material from the land.

11. The third reason why I would not answer the preliminary issue affirmatively is that in order to determine whether there had been an impairment in the value or usefulness to the owner of the materials subsequently taken, it would be necessary to consider evidence, apart from evidence of the bare fact that the material had been taken from the land.  That might include evidence, for example, as to whether the owner of the land had been using the material prior to its being taken by the acquiring authority, or whether the owner intended to use that material in the foreseeable future, whether the material which was actually taken was material which would otherwise have been used by the owner (so that the taking of that material would require the owner to expend money to obtain similar material from other sources), or whether the owner's needs would be met by the use of any remaining, similar material on the property. 

12. In the present case, there are not sufficient facts in the agreed facts to say whether the taking of the gravel impaired the value or usefulness to Kingstripe of either the land, or of the gravel. Accordingly, I am not persuaded that the limited facts agreed by the parties for the purposes of resolving the preliminary issue are sufficient to establish damage by reason of the removal of any material for the purposes of s 203 of the LA Act.

13. This conclusion does not, of course, determine the question whether Kingstripe in fact suffered damage by reason of the gravel being taken.  That question will need to be determined on the basis of evidence adduced by the parties in these proceedings.

Conclusion and orders

1. In my view, the preliminary issue should be answered 'no'.  I make the following orders:

   1.The preliminary issue is answered 'no'.

   2.The application is listed for directions to commence at 11.30 am on 28 May 2010 to consider further progress in the matter.

I certify that this and the preceding [32] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

JUDGE J PRITCHARD, DEPUTY PRESIDENT