Merrick Tyler Pty Ltd v Commissioner of Main Roads
[2014] WASC 166
•14 MAY 2014
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MERRICK TYLER PTY LTD -v- COMMISSIONER OF MAIN ROADS [2014] WASC 166
CORAM: LE MIERE J
HEARD: 17 APRIL 2014
DELIVERED : 14 MAY 2014
FILE NO/S: CIV 1830 of 2008
BETWEEN: MERRICK TYLER PTY LTD
Plaintiff
AND
COMMISSIONER OF MAIN ROADS
Defendant
Catchwords:
Compulsory acquisition of land owned in fee simple - Claim for compensation - Preliminary issue - Whether land separated from the Taken Land by Crown Land is 'adjoining' land under the Land Administration Act 1997 (WA) s 241(7)
Legislation:
Acquisition of Land Act 1967 (Qld)
Interpretation Act 1984 (WA), s 18
Land Acquisition and Public Works Act 1902 (WA), s 63
Land Administration Act 1997 (WA), s 3(1), s 241(7)
Result:
Plaintiff's claim dismissed
Category: B
Representation:
Counsel:
Plaintiff: Mr T Houweling
Defendant: Mr K M Pettit SC & Mr J M Misso
Solicitors:
Plaintiff: Cornerstone Legal
Defendant: State Solicitor for Western Australia
Case(s) referred to in judgment(s):
Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1
Gold Coast City Council v Halcyon Waters Community Pty Ltd [2011] QLAC 3; (2011) 188 LGERA 193
Halcyon Waters Community Pty Ltd v Chief Executive, Gold Coast City Council [2010] QLC 138; (2010) 183 LGERA 218
Marshall v Director‑General, Department of Transport (2001) 205 CLR 603
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259
LE MIERE J: On 26 July 2006 the defendant compulsorily acquired from the plaintiff 19.2994 ha of land owned by the plaintiff in fee simple (Taken Land) for the purposes of construction of the new Perth Bunbury Highway (the Taking). Before the Taking the plaintiff owned a portion of Wellington Location 57 comprising 69.6943 ha of land to the west of Old Coast Road and 49.55 ha of land to the east of Old Coast Road. After the Taking, the plaintiff owned 69.6943 ha to the west of Old Coast Road and 30.256 ha to the east of Old Coast Road (Remaining Land). The Remaining Land is comprised in a single lot and title ‑ Lot 2 on Deposited Plan 50722. At all material times the plaintiff's land west of Old Coast Road and the plaintiff's land east of Old Coast Road did not share a common boundary, being separated by a minimum of 60.4 m of Crown owned land comprising Old Coast Road.
In this action the plaintiff claims compensation for the interest in land taken. Section 241 of the Land Administration Act 1997 (WA) (the Act) provides how compensation is to be determined. Section 241(7) provides, in effect, that where the holder of the taken land is also the holder in fee simple of adjoining land, regard is to be had to the amount of any damage suffered by the claimant due to a reduction of the value of that adjoining land. The plaintiff claims that the western portion of Lot 2 is adjoining land to the Taken Land and has been reduced in value and claims compensation for that reduction in value. The defendant denies that the western portion is adjoining land because it is separated from the Taken Land by the Old Coast Road.
I ordered that the issue whether the western land is 'adjoining land' for the purposes of s 241(7) of the Act should be determined as a preliminary issue. The preliminary question for determination is:
Is the plaintiff entitled to claim compensation under section 241(7)(b) of the Act in respect of that part of the plaintiff's land which is west of Old Coast Road?
The Act
The long title to the Act is:
An Act to consolidate and reform the law about Crown land and the compulsory acquisition of land generally, to repeal the Land Act 1933 and to provide for related matters.
The Act consists of 13 parts. Part 1 is concerned with preliminary matters such as commencement, definitions and the application of the Act. Parts 2 and 3 are concerned with general administration and appeals to the Governor. Parts 4 to 8 are concerned with the administration and management of Crown land and roads. Parts 9 and 10 are concerned with the compulsory acquisition of interests in land and compensation. Parts 9 and 10 replace the provisions for compulsory acquisition and compensation in the Land Acquisition and Public Works Act 1902 (WA). Part 11 is concerned with a number of miscellaneous matters. Parts 12 and 13 contain repeal and transitional provisions.
Section 202, in Part 10, provides that a person is entitled to claim compensation where his or her interest in land has been taken. The term 'interest' is widely defined in s 151 at the commencement of pt 9. Assessing compensation is dealt with by Part 10 div 5 which commences with s 241. Section 241 has been brought across from the Land Acquisition and Public Works Act s 63 with only minor amendments. Section 241(1) provides that the amount of compensation is determined by the principles solely set out in that clause. Section 241(7) requires regard to be given to the decrease in value in adjoining lands owned by the same person as the taken land due to the severance of the land or the impact of the public work. The preliminary question turns on the proper construction of this s 241(7). I will set it out in full:
If the fee simple in land is taken from a person who is also the holder in fee simple of adjoining land, regard is to be had to the amount of any damage suffered by the claimant -
(a)due to the severing of the land taken from that adjoining land; or
(b)due to a reduction of the value of that adjoining land,
however, if the value of any land held in fee simple by the person is increased by the carrying out of, or the proposal to carry out, the public work for which the land was taken, the increase is to be set off against the amount of compensation that would otherwise be payable under paragraph (b).
The value of adjoining land of the owner of the land taken may be decreased or increased as a result of the taking. I observe that any reduction in the land value which can be claimed as compensation can be set off against any increase in value that may occur by reason of the public work. On the other hand, a decrease in value due to the severance cannot be set off against any increase in value. It should also be noted that any increase in value of adjoining land cannot be set off against the compensation of the land taken. Increases in value can only be set off against the adjoining land of the same owner of the land taken.
The competing constructions
The defendant says that 'adjoining land' in s 241(7)(b) means contiguous land, that is land touching or in actual contact with the land taken, bordering the land taken or meeting the land taken at a common boundary. The plaintiff says that 'adjoining' means neighbouring in the sense of being located near or nearby or being separated by some small distance. The plaintiff says that the western land, being separated from the Taken Land by only 60 m, is 'adjoining land' for the purposes of s 241(7).
The approach to construction
This preliminary question turns upon the correct construction of s 241(7) of the Act. The process of construction begins with a consideration of the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose: Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1 [26] (French CJ, Hayne, Keifel & Bell JJ). The primacy of the text is the first principle of interpretation. Text, however, is to be understood in context and in light of the purpose of the statute.
Counsel for the defendant submitted that the dictionary meaning of 'adjoining' is contiguous or bordering. Counsel for the plaintiff, Mr Houweling, submitted that 'adjoining' has a range of meanings from contiguous to nearby. The Macquarie Online Dictionary defines 'adjoining' to mean bordering or contiguous. On the other hand, the Online Oxford English Dictionary defines 'adjoining' to mean adjacent, contiguous, neighbouring.
There are textual indicators in s 241(7) that 'adjoining land' in s 241(7)(b) means contiguous land. The phrase 'adjoining land' appears three times in s 241(7). It is to be expected that it has the same meaning each time it is used. Furthermore, the words 'that adjoining land' in s 241(7)(b) is a reference to 'that adjoining land' in s 241(7)(a) and in the chapeau or opening paragraph of s 241(7). The phrase 'adjoining land' in (b) is to be contrasted with 'any land' in the final paragraph of s 241(7) which provides that 'if the value of any land held in fee simple by the person is increased by the carrying out of … the public work … the increase is to be set off against the amount of compensation that would otherwise be payable under paragraph (b)'. The plaintiff concedes that 'any land' in the final paragraph of s 241(7) is apt to describe land held in fee simple by the person whose land has been taken which is in close proximity to or connected in some way with the land taken. As a general principle words are not to be considered as superfluous or insignificant. 'Adjoining land' in (b) should be considered to be more limited than 'any land held in fee simple' in the final paragraph of s 241(7). That is, 'adjoining land' in (b) is land that is contiguous with, not merely in close proximity to or connected in some way with, the land taken.
There are indicators in the context of s 241(7) that 'adjoining land' means contiguous land. Section 3(1) provides that in the Act, unless the contrary intention appears -
Adjoining, in relation to parcels of Crown Land, includes only separated by -
(a)roads; or
(b)railways; or
(c)water courses or other natural features of such a character as to be insufficient to prevent the passage of stock; or
(d)reserves or unallocated Crown Land.
As a general principle, words or definitions are not to be considered as superfluous or insignificant. If 'adjoining land' when used in the Act extends to land that is in close proximity to but not contiguous then it would not have been necessary to include the definition of 'adjoining' in relation to parcels of Crown land in s 3.
Plaintiff's contentions
The plaintiff advances two principal contentions why 'adjoining land' should be interpreted to include land nearby but not touching the land taken. First, the plaintiff says that such a meaning promotes the purpose of the Act. Secondly, the plaintiff says that the statutory history supports such a meaning.
Purpose of the Act
The plaintiff says that the meaning for which it contends would promote the purpose or object underlying the Act and therefore by reason of s 18 of the Interpretation Act 1984 (WA) should be preferred to a narrower construction that would not promote that purpose or object. The plaintiff says that the purpose underlying the Act is to provide for compensation in accordance with the principle of equivalence, by which compensation paid to a dispossessed owner should equate fairly and fully the value of the owner's loss resulting from compulsory acquisition, but no more or less, except where legislation provides otherwise.
In an address to the Western Australian Law Summer School in 2011 former Chief Justice Gleeson said:
In order to be of rational assistance in the decision of a question of interpretation, the purpose or object of an Act has to be identified at an appropriate level of specificity. Furthermore, many Acts are the product of political compromise, and the real problem is not so much to discover the purpose of the Act as to work out how far Parliament intended to go in pursuit of that purpose. At one level, it is true to say that the purpose of a taxing Act is to raise revenue, but that is not of assistance in working out issues that arise from the complex fiscal policy reflected in particular taxing provisions.
The Act does not contain any express statement of the purpose or objects of the compulsory acquisition and compensation provisions in pt 9 and pt 10. The object of pt 10 is not to provide 'full compensation' to all persons adversely affected by the compulsory taking of land. Only a person with an interest in the land taken is entitled to compensation. Section 241 of the Act does not provide that a person whose land is taken is entitled to 'full compensation'. To the contrary, s 241 provides that in determining the amount of compensation 'regard is to be had solely to the matters referred to in this section'.
Section 241(7) of the Act limits damage which may be claimed due to the severing of land or a reduction of the value of land not taken to 'adjoining land' of the owner in fee simple of the land taken. The section makes somewhat artificial or arbitrary distinctions. Only a person from whom land is taken may claim compensation, whereas other people may suffer similar reduction in the value of their lands. Compensation arises only when freehold land is taken, whereas damage may also be suffered when lesser interests are taken. Only the owner of freehold land may claim compensation, whereas an adjoining leasehold may also suffer due to the severing of the land or reduction of the value of adjoining land. Only adjoining freehold land is relevant, whereas an adjoining leasehold may also suffer injurious affection. The search for the purpose of the compensation provisions in s 241(7) of the Act lead the reader back to the text of the provision understood in its context.
Legislative history
Section 241 of the Act is the successor to s 63 of the Land Acquisition and Public Works Act. On the Second Reading of the Bill that became the Act the Minister said:
The provisions of the Land Acquisition and Public Works Act dealing with the compulsory acquisition of land and compensation have been incorporated, with minor changes, into the Bill.
The plaintiff says that under s 63(b) of the Land Acquisition and Public Works Act compensation was awarded for the damage sustained by the claimant by reason of the severance of any land injuriously affected by the taking of not just land contiguous with the land taken. Therefore, the plaintiff says s 241(7) should be similarly construed.
Section 63(b) of the Land Acquisition and Public Works Act does not expressly say that compensation may be awarded for damage sustained by the claimant by reason of the severance of land that is not adjoining taken land. The better view is that, on its proper construction, s 63(b) of the Land Acquisition and Public Works Act provided for compensation to be payable for damage sustained by reason of the land contiguous with the land taken being injuriously affected by the taking. The difference in terminology between 'such lands … injuriously affected by the taking' and 'other lands of the claimant … enhanced by reason of the carrying out of … the public work …' indicates an intention that only contiguous land injuriously affected is relevant.
Further, notwithstanding the statement by the minister in the Second Reading speech, in the transition from s 63 of the Land Acquisition and Public Works Act to s 241(7) of the Act a number of changes were made. One change is that the entitlement to claim compensation for 'reduction of the value of that adjoining land' narrowed from persons with an 'estate or interest' in land to holders of 'fee simple'. Construing s 241(7) by reference to s 63 of the Land Acquisition and Public Works Act is not a sound approach to construction of s 241(7) of the Act.
Other authorities
Both parties cited authorities concerning the meaning of 'adjoining land' in support of their contentions. Those cases show that the meaning of the word 'adjoining' in s 241(7) of the Act cannot be determined by simple reference to authorities. Words and phrases take their meaning from their context. The meaning of 'adjoining' in s 241(7) must be determined by examining the statutory context in which the word appears as well as the purpose of the legislation as a whole. In Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259 Gleeson CJ, Gummow, Hayne, Hayden and Crennan JJ applied McHugh J's comments in Marshall v Director‑General, Department of Transport (2001) 205 CLR 603 where he said:
But that does not mean that the courts of Queensland, when construing the legislation of that State, should slavishly follow judicial decisions of the courts of another jurisdiction in respect of similar or even identical legislation. The duty of courts, when construing legislation, is to give effect to the purpose of the legislation. The primary guide to understanding that purpose is the nature and ordinary meaning of the words of the legislation. Judicial decisions on similar or identical legislation in other jurisdictions are guides to, but cannot control, the meaning of legislation in the court's jurisdiction. Judicial decisions are not substitutes for the text of legislation although, by reason of the doctrine of precedent at hierarchical nature of our court system, particular courts may be bound to apply the decision of a particular court as to the meaning of legislation [62].
The meaning of 'adjoining land' in the context of compensation for compulsory acquisition of land was considered by MacDonald P in Halcyon Waters Community Pty Ltd v Chief Executive, Gold Coast City Council [2010] QLC 138; (2010) 183 LGERA 218. The council resumed part of the applicant's land for public purposes. The remainder of the land was separated from the resumed part by a road. Section 20 of the Acquisition of Land Act 1967 (Qld) (the Acquisition Act) dealt with the assessment of compensation for compulsory acquisition of land. Section 20(3) of the Acquisition Act provided that any enhancement of the value of the interest of the claimant 'in any land adjoining the land taken' is to be taken into account in assessing compensation. The applicant submitted that the retained land did not adjoin the resumed land because the two parcels were separated by a public road. MacDonald P observed that:
The authorities cited by counsel for both parties indicate that courts have interpreted the word 'adjoining' both narrowly and widely. The strict or narrow view is that 'adjoins' means physical contiguity. The wider or looser interpretation is that the word means in close proximity to [24].
After referring to relevant authorities MacDonald P further observed:
The Macquarie Dictionary defines 'adjoining' to mean 'bordering or contiguous'. Its primary meaning therefore connotes physical contiguity [31].
MacDonald P found that the word 'adjoining' as used in s 20(3) of the Acquisition Act should be given its primary meaning, that is, it should be construed as referring to land which is contiguous with the land taken. However, the President rested her decision not on the dictionary meaning of 'adjoining' but on its statutory context and in particular the difference in terminology between s 20(1) and s 20(3) of the Acquisition Act which indicated an intention to limit the extent of any enhancement that is to be taken to account under s 20(3).
An appeal to the Land Appeal Court of Queensland was dismissed: Gold Coast City Council v Halcyon Waters Community Pty Ltd [2011] QLAC 3; (2011) 188 LGERA 193. The court referred to authorities which established that a claim for compensation for damage resulting from the severance of resumed land from other land of a claimant is not confined to damage suffered in respect of land which is contiguous with the resumed land. However, the court observed that something more than common ownership is required to establish that the resumed land has been severed from the retained land: [20]. The court found consequently that the submissions of the council that land severed from the resumed land must be land which previously was physically contiguous with it was incorrect. The court observed that there is a degree of arbitrariness in the statutory provisions relating to compensation:
A landowner, none of whose land is resumed, and who is adversely affected by the project for which the resumption is carried out, has no right of compensation; whereas a landowner who suffers the loss of a very small portion of land may be awarded a large amount of compensation, principally for injurious affection. Equally, a landowner whose land is resumed, and who has other land which could in most sense be said to be adjoining the resumed land, or severed from it, may enjoy a great enhancement of the value of that other land by reason of the project for which the land is resumed. Again, the statute does not provide for that to be taken into account in the assessment. The provision of an example where, on one construction of the section, some enhancement is not taken into account, is not particularly persuasive. It is of considerably less weight than an examination of the statutory language in context, in the light of long‑standing authorities dealing with a closely related topic [25].
The court found that the natural meaning of the expression 'adjoining' in respect of land is that it describes land which touches other land, in the sense that it either has a common boundary, or at least a common boundary point. The court observed that usually the adoption of the natural meaning of a term used, without definition, in the statute is to be preferred.
In Gold Coast City Council v Halcyon Waters Community Pty Ltd the Court said that something more than common ownership is required to establish that the resumed land has been severed from the retained land and referred to this additional requirement as a 'connecting factor'. In this case the plaintiff expressly disavowed that there was any connecting factor. The plaintiff's case is that 'adjoining land' includes any land that is in close proximity to the taken land. In my view, land is not severed from the taken land merely because the remaining land is in close proximity to the taken land. In this case the plaintiff's land which is west of Old Coast Road was not severed from the Taken Land.
Conclusion
The words 'adjoining land' in s 241(7)(b) of the Act should be given their primary meaning, that is it should be construed as referring to land which is contiguous with the land taken. That meaning is indicated by the difference in terminology between 'adjoining land' and 'other land' in s 241(7) and by the extended definition of 'adjoining land' in relation to Crown Land in s 3(1) of the Act. On that basis the western portion of the remaining land does not adjoin the Taken Land within the meaning of s 241(7)(b) of the Act because the two portions of land are separated by Crown owned land comprising Old Coast Road. The preliminary question should be answered as follows:
Question: Is the plaintiff entitled to claim compensation under s 241(7)(b) of the Act in respect of that part of the plaintiff's land which is west of Old Coast Road?
Answer: No.
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