Starshore Pty Ltd v Kellas
[2018] WADC 113
•6 SEPTEMBER 2018
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: STARSHORE PTY LTD -v- KELLAS [2018] WADC 113
CORAM: GLANCY DCJ
HEARD: 2 - 4 MAY 2018
DELIVERED : 6 SEPTEMBER 2018
FILE NO/S: CIV 472 of 2017
BETWEEN: STARSHORE PTY LTD
Plaintiff
AND
ALBERT FRANK KELLAS
First Defendant
ALICE MAREE CLARKE
Second Defendant
Catchwords:
Planning and Development Act 2005, s 159 - Apportionment of costs of road between subdividers
Legislation:
Planning and Development Act 2005, s 159, s 160, s 161
Town Planning and Development Act 1928, s 28A
Transfer of Land Act 1893, s 3, s 58
Result:
Judgment for the plaintiff
Representation:
Counsel:
| Plaintiff | : | Mr P G Donovan & Ms H J Burnside |
| First Defendant | : | In person |
| Second Defendant | : | In person |
Solicitors:
| Plaintiff | : | MDS Legal |
| First Defendant | : | Not applicable |
| Second Defendant | : | Not applicable |
Case(s) referred to in decision(s):
Glew v Frank Jasper Pty Ltd [2010] WASCA 87
Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338
Konings v Commonwealth Bank of Australia [2016] WASCA 122
Lakewood Estates Pty Ltd v John De Boer (1985) 62 LGRA 141
Moleirinho v Talbot & Olivier Lawyers Pty Ltd [2014] WASCA 65
MTI v SUL [No 2] [2010] WASCA 58
Neil v Nott [1994] HCA 23; (1994) 68 ALJR 509, 510; (1994) 121 ALR 148
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
The State of Western Australia v Collard [2015] WASCA 86
Tobin v Dodd [2004] WASCA 288
Van Der Feltz v Legal Practice Board of Western Australia [2017] WASCA 113
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
GLANCY DCJ:
Introduction
The plaintiff is a developer who subdivided land in Kalamunda. In doing so it constructed a road known as Sessilis Crescent.
The plaintiff sold some of the land it proposed to subdivide to a third party who on‑sold it to the first defendant and second defendant (the defendants).
The defendants then subdivided that land into lots. Some of those lots abut Sessilis Crescent.
The plaintiff is seeking to recover from the defendants half the costs of providing land for, and the costs of the construction of part of, Sessilis Crescent, pursuant to s 159 of the Planning and Development Act 2005 (PD Act).
The defendants dispute both liability and quantum.
Section 160 of the PD Act provides that an amount payable under s 159 may be recovered in a court of competent jurisdiction as a debt due; but that no proceedings for recovery of the debt are to be commenced after the expiration of six years from the date of the later subdivision.
It is not in dispute that if s 159 applies, the plaintiff's action is brought within the time required by s 160 of the PD Act.
Outcome
For the reasons set out below, I have found that the defendants are liable to the plaintiff for half of its reasonable costs of providing land for, and the construction of, the relevant portion of Sessilis Crescent and interest on that sum.
I have also found that the defendants are liable to pay to the plaintiff an amount representing the GST which the plaintiff will be required to pay on the judgment sum. The plaintiff also sought interest on the GST amount. As it was not clear to me why interest should be awarded on the GST amount, and no submissions were made on the point, I will give the parties liberty to make submissions on this point within 14 days of judgment should they wish to do so.
Litigants in person
In determining the issues in this matter, I have had regard to the fact that the defendants appeared in person with the first defendant effectively conducting the trial on behalf of both of the defendants. The defendants were, however, legally represented until after this matter went to mediation.
There are well‑established general principles providing guidance on the level of flexibility and assistance which is to be provided to a litigant in person. A litigant in person is entitled to some leniency in relation to compliance with the court rules: Glew v Frank Jasper Pty Ltd [2010] WASCA 87 [10] (judgment of the court). The court should approach the documents in which a litigant in person articulates their claim with some flexibility: Wentworth v Rogers (No 5) (1986) 6 NSWLR 534, 536 ‑ 537 (Kirby P), 543 (Hope & Samuels JJA agreeing). The court needs to be astute to ensure that, in a poorly expressed or unstructured document in which a litigant in person sets out their claim, there is no viable cause of action which, with appropriate amendment or permissible assistance from the court, could be put into proper form: Ibrahim v The Honourable Justice Carolyn Martin [2012] WASC 338 [21] (Beech J); Tobin v Dodd [2004] WASCA 288 [15] (E M Heenan J, with whom Murray & Le Miere JJ agreed [3] and [70]). A 'frequent consequence of self‑representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy': Neil v Nott [1994] HCA 23 [5]; (1994) 68 ALJR 509, 510; (1994) 121 ALR 148, 150 (Brennan, Deane, Toohey, Gaudron & McHugh JJ); Ibrahim [21]; Glew [10]; Tobin [14].
A court ought to assist a litigant in person to the extent consistent with the interests of justice. What the court ought to do will depend upon the nature of the case and the litigant's capacity to understand the issues in the case: Van Der Feltz v Legal Practice Board of Western Australia [2017] WASCA 113, [15] ‑ [16] (reasons of the court); Konings v Commonwealth Bank of Australia [2016] WASCA 122 [12] (Reasons of the Court); Tobin [14]. The advice and assistance which a litigant in person ought to receive from the court should be limited to that which is necessary to diminish, so far as this is possible, the disadvantage that litigant will ordinarily suffer when faced by a lawyer, and to prevent destruction from the traps which the adversarial procedure offers to the unwary and untutored: Van Der Feltz [15] ‑ [16]; Konings [12]; Tobin [14].
The court must not intervene to such an extent that a position of neutrality cannot be maintained or a litigant in person is given a positive advantage over another party: Konings [12]. The court also needs to ensure that any latitude given to a litigant in person does not deprive the other party of its rights to procedural fairness and a fair hearing: Moleirinho v Talbot & Olivier Lawyers Pty Ltd [2014] WASCA 65 [51]; (judgment of the court); MTI v SUL [No 2] [2010] WASCA 58 [42] ‑ [43]; (Newnes JA, with whom Pullin & Buss JJA agreed); Glew [10].
These principles governed the manner in which I conducted the trial. However, because the defendants had been legally represented until the conclusion of mediation and because of their careful preparation for trial and the approach taken by the plaintiff's counsel, there was little need to intervene in the course of the trial to assist the defendants in presenting their best case and no need to intervene to prevent them from being taken advantage of by opposing counsel.
Summary of the defendants' position at trial
During the course of the trial it became clear that the defendants did not take issue with most of the facts in relation to this matter but resisted liability on the grounds that:
1.section 159 of the PD Act did not apply. There were several reasons why they said that this was so; and
2.it was their view that, as a matter of fairness and law, no one can be held liable for a debt of which they had no knowledge until recovery of it was sought.
The defendants also disputed quantum but did not challenge the evidence of the plaintiff's experts and produced no evidence of their own as to how quantum should have been calculated.
PD Act – Relevant provisions
Section 159 of the PD Act forms part of div 4, pt 10 of that Act. Section 159 provides:
(1)Where —
(a)a person (in this section called the later subdivider) has subdivided land in which —
(i)a lot or lots has or have a common boundary with; or
(ii)a road joins,
an existing road to which there is access from the subdivided land; and
(b)a person (in this section called the original subdivider) who previously subdivided land that also has a common boundary with that existing road, in connection with that subdivision, contributed to or bore solely the cost of providing or upgrading the existing road; and
(c)the later subdivider did not contribute to that cost,
the original subdivider may, in accordance with this Division, recover from the later subdivider a sum representing one‑half of so much of the reasonable cost as was borne by the original subdivider of providing or upgrading the part of the existing road which has a common boundary with the lot or lots, or is joined by a subdivisional road, as referred to in paragraph (a).
(2)In this section —
CPI means the Table described as the Consumer Price Index (All Groups Index) for Perth published by the Commonwealth Statistician under the Census and Statistics Act 1905 of the Commonwealth, or if the same is not published, such other similar index as the Minister may reasonably determine;
market value of land means the capital sum, determined in accordance with section 155(3)(b)(ii), (iii) and (iv), which an unencumbered estate in fee simple in the land might reasonably be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require;
road has the meaning given by section 4(1) and includes a private road created under Part IVA of the Transfer of Land Act 1893 or as defined in the Land Administration Act 1997 section 3(1).
(3)In this section a reference to the cost of providing a road is a reference to the aggregate of —
(a)the value, as at the date of the subdivision referred to in subsection (1)(b), of the portion of the land provided as a road, being such percentage of the market value of the total area of land comprised in that subdivision as the area of the road bears to that total area as at the date of that subdivision; and
(b)the reasonable cost of designing and carrying out the following works —
(i)the survey of the land provided as a road; and
(ii)the formation, preparation, priming and sealing of the road; and
(iii)the provision of kerbing, drainage and service ducts in connection with the road,
escalated by the percentage by which the CPI last published prior to the date of the subsequent subdivision has increased over the CPI last published prior to the original subdivider subdividing the land referred to in subsection (1)(b).
Section 160 of the PD Act sets out how and when an amount payable under s 159 can be recovered. It states:
An amount payable under section 159 may be recovered by the original subdivider in a court of competent jurisdiction as a debt due to the original subdivider by the later subdivider; but no proceedings for recovery of the debt are to be commenced after the expiration of 6 years from the date of the later subdivision.
Section 161 sets out when a subdivision occurs for the purposes of div 4 of pt 10 of the PD Act. It states:
For the purposes of this Division land is subdivided on the date on which the approval of the Commission is endorsed on the diagram or plan of survey relating to the subdivision of the land.
Witnesses at trial
Plaintiff's witnesses
The plaintiff called the following witnesses:
1.Mr Darren Blowes;
2.Mr Peter Golder;
3.Mr Christopher Geers;
4.Mr Mahesh Singh; and
5.Mr Enzo Biagioni‑Froudist.
Mr Blowes is the director of the plaintiff.
Mr Geers is a licensed valuer who gave expert evidence as to the value of the land which was used for the creation of the part of Sessilis Crescent which is the subject of the s 159 claim.
Mr Golder is a chartered professional engineer and has worked as a civil engineer since 1985. He is the director of Groundwork Consulting Engineers. He is the expert engaged by the plaintiff to provide the expert report and give evidence as to the cost of the construction of the relevant portion of Sessilis Crescent.
Mr Singh is a qualified civil engineer and builder and is currently a director of a building and land development company known as Sadhana Constructions Pty Ltd.
From 1996 to 2011, Mr Singh was employed by the Shire of Kalamunda. Between 1996 and 2005 he was the manager of Engineering Services. In this role, he had responsibility for managing the Shire's infrastructure assets including roads, paths and drainage. From the end of 2005 until December 2011 he was the Director of Engineering Services at the Shire and was responsible for the provision and maintenance of transport, parks and building infrastructure assets and the provision of waste management services. Part of his role was related to development approvals for urban development.
Mr Biagioni-Froudist is a civil engineer. He was employed by VDM Engineering (previously known as Van der Meer Consulting and Ewing VDM). VDM Engineering was engaged by the plaintiff to oversee the subdivision of the Proposed Development Area and to design the civil works which formed part of the project.
Mr Biagioni-Froudist gave evidence about the way in which the invoices for the works undertaken were assessed by VDM for payment.
Defendants' witnesses
The first defendant herself was the only witness who gave evidence for the defendants. Her evidence was that prior to purchasing Lot 900 the defendants searched the Local Council Register of Orders and the Certificate of Title for Lot 900 to see whether there were any encumbrances or easements affecting the land (ts 145 – 146). She gave evidence that no encumbrances or easements were identified in those searches.
The first defendant also gave evidence that the defendants were not told that a claim against them could be made under s 159 of the PD Act (ts 150).
Credibility of witnesses
As I have said there were no facts in dispute and neither party raised any questions as to the credibility of any evidence given in the course of the trial. I have, therefore, accepted all the witnesses' evidence.
Factual background
The factual background to this matter is not in dispute. The facts which are agreed and which I have found on the balance of probabilities are as follows.
The plaintiff, Starshore Pty Ltd, ACN 108 107 606, is a company of which Mr Darren Blowes is the director. Mr Blowes is a registered real estate sales representative. Over the past 20 years Mr Blowes has been involved in the business of property development, which he conducts through various companies (exhibit 2, [1] – [3]).
The plaintiff was registered on 24 February 2004 for the purposes of conducting the development of an area of land in Wattle Grove, which is within the Shire of Kalamunda (Shire) and comes within an area of the Shire designated as 'Cell 9' in the Shire's Local Planning Scheme No 3 (exhibit 1 – 16).
The land which the plaintiff proposed to develop (Proposed Development Area) consisted of the following two areas:
1.Lot 22, being the whole of the land in Certificate of Title Volume 18900 Folio 442 and Lot 23 (Lot 22); and
2.Lot 23, being the whole of the land in Certificate of Title Volume 1890 Folio 443 (Lot 23).
On 24 February 2004, Lot 22 was owned by a Mr and Mrs Adams and Lot 23 was owned by Mr Blowes.
In May 2004, Mr and Mrs Adams entered into a contract with the plaintiff by which they agreed to sell Lot 22 to the plaintiff. The contract was conditional upon the plaintiff obtaining approval for the subdivision of the Proposed Development Area. It was also a condition of the contract that a specified area of that land, on which the Adams' home was situated (Homestead Lot), would be transferred to them following the subdivision of the Proposed Development Area and the creation of the Homestead Lot as a separate Lot (exhibit 1 – 82; exhibit 2 [9]).
On 10 May 2004, an application for conditional development approval of the Proposed Development Area was made by Gray & Lewis (a planning company) on behalf of Mr and Mrs Adams and Mr Blowes (exhibit 1 – 29; exhibit 2 [20]).
The proposed subdivision of the Proposed Development Area showed the land which was then Lots 22 and 23 being subdivided as follows:
1.21 lots coming from Lot 22;
2.five lots from Lot 23;
3.the upgrading of William Street; and
4.the construction of Extensa Road and Sessilis Crescent.
Conditional approval for the subdivision of the Proposed Development Area was obtained from the Western Australia Planning Commission (WAPC) on 3 December 2004 (exhibit 1 – 35).
The WAPC reference number given to the proposed subdivision of the Proposed Development Area was 125238.
Lot 22 was transferred to the plaintiff on 11 March 2005 (exhibit 1 – 83).
Lot 23 was subsequently transferred to the plaintiff by Mr Blowes. Mr Blowes gave evidence that he does not recall the date on which this occurred (ts 53) and no other evidence was led as to the date.
The subdivision of the Proposed Development Area was effectively carried out in stages.
First, Lots 900 and 9000 were created. Lot 900 was the Homestead Lot. Lot 9000 was the balance of the land which had formerly been part of Lot 22. The WAPC endorsed the relevant Deposited Plan, Deposited Plan 45126 with its approval of this subdivision on 31 May 2005 (exhibit 1 – 53).
Lot 900 (the Homestead Lot) was transferred to Mr and Mrs Adams by the plaintiff on 2 August 2005 in satisfaction of their agreement (exhibit 1 – 87).
Second, the plaintiff further subdivided Lot 9000. This involved the creation of Extensa Road and Lot 9001. The WAPC approval was endorsed on the relevant Deposited Plan, being Deposited Plan 53290 on 26 February 2007 (exhibit 1 – 54).
Third, Lot 9001 was then subdivided by the creation of Lots 601, 602, 603, 615, 616 and 9101. The WAPC approval was endorsed on the relevant Deposited Plan, being Deposited Plan 58752 on 11 April 2008 (exhibit 1 – 55).
Fourth, Lot 9101 was subdivided by the creation of the relevant portion of Sessilis Crescent, and Lots 604 – 606 (inclusive), 609 ‑ 614 (inclusive) and 617 ‑ 622 (inclusive). The WAPC approval was endorsed on Deposited Plan 58760 on 22 May 2008 (exhibit 1 – 56).
The defendants purchased Lot 900 from Mr and Mrs Adams on 5 September 2013 (exhibit 1 – 59) although they had entered into a contract to purchase the land from Mr and Mrs Adams in about July 2013.
The defendants subdivided, or caused to be subdivided on their behalf, the land comprised in Lot 900. That involved the creation of Lots 901, 902, 903, 904, 905 and 906. The WAPC approval of that subdivision was endorsed on Deposited Plan 405986 on 4 September 2015 (exhibit 1 – 60).
Lots 903, 904, 905 and 906 abut Sessilis Crescent. There is access to Sessilis Crescent from each of those Lots (exhibit 1 – 60).
The length of that portion of Sessilis Crescent which abuts Lots 903, 904, 905 and 906 is 60.71 m (exhibit 1 – 60; exhibit 3 [37]).
The relevant portion of Sessilis Crescent is 15.002 m wide (exhibit 1 – 56).
The area of Sessilis Crescent which abuts Lots 903, 904, 905 and 906 is approximately 910 sqm (exhibit 3 [28]).
The defendants paid to the Shire the sum of $136,575.00 being full payment of the Cell Infrastructure Contribution that was a condition of the conditional approval given by the WAPC on 3 December 2004.
On 4 July 2008 the Shire paid to the plaintiff the sum of $109,437.65 (including GST) for the installation by the plaintiff of infrastructure (stormwater pipes) that was needed for the benefit of the broader Cell 9 Local Planning Scheme No 3 (exhibit 1 – 25.9 and exhibit 4 [59] – [82]).
The CPI last published prior to March 2008 was 90.5 (exhibit 1 – 78).
The CPI published prior to 4 September 2015 was 107.7 (exhibit 1 – 78).
Issues in the proceedings
The defendants claim they are not liable to pay the plaintiff for the following reasons:
1.they are not a later subdivider because the subdivision of Lot 900 by them was merely the fulfilment of the subdivision of the Proposed Development Area which had been approved by the WAPC on 3 December 2004;
2.even if they are a later subdivider, by making a payment to the Shire of Kalamunda as they were required to do by virtue of the Cell Infrastructure Contributions, they had contributed to the cost of that portion of Sessilis Crescent;
3.to find the defendants liable to the plaintiff, would be to allow double recovery of construction costs which would have been recovered by a subdivider in the sales of the lots created by the subdivision. The PD Act cannot have been intended to be construed so as to entitle a subdivider to recover the same costs twice;
4.at the time the original subdivision of Lot 22 by the plaintiff occurred, Sessilis Cresent was not a road but rather was only a 'proposed road' with the result that s 159 has no application in respect of it;
5.even if they are a later subdivider they are not liable to the plaintiff because they had no agreement with the plaintiff;
6.the PD Act cannot be construed to require a person who acquires land and later subdivides it to pay an original subdivider money for a debt of which they had no notice at the time of purchase.
The defendants also claim that, even if they are liable to the plaintiff under s 159 and s 160 of the PD Act, they take issue with the quantum of any payment. In particular, they say the value of the land which was surrendered for the purposes of construction of the relevant portion of Sessilis Crescent has not been determined in accordance with the requirements of s 159 of the PD Act.
Legal issues pleaded but not pursued at trial
At trial the defendants conceded that they no longer resisted liability on the grounds that the plaintiff had not provided them with a taxable supply (ts 143 – 144).
The defendants also expressly conceded that they no longer disputed quantum on the grounds that the amount claimed included a sum that the plaintiff had in fact recovered from the Shire (ts 143). This was because the plaintiff had, by trial, amended its claim to exclude the disputed amount.
Liability
There is no factual dispute to be resolved in determining liability. The issue of liability turns on the construction of s 159 of the PD Act.
Previous authorities
There have been few cases concerning the interpretation of s 159 of the PD Act or its predecessor, s 28A of the Town Planning and Development Act 1928 (TPD Act).
In Level Holdings Pty Ltd v Laurendi [No 2] [2013] WADC 33; (2013) 83 SR (WA) 96, Staude DCJ reviewed the legislative history of s 159 of the PD Act, its predecessor, s 28A of the TPD Act, and the few cases which had considered those provisions.
His Honour stated at [15]:
In their respective statutory contexts s 28A and s 159 provide a mechanism for an earlier subdivider to recoup part of the cost of putting in a road from which a later subdivider benefits: Cinanni v Western Australia Planning Commission [2003] WATPAT 82.
His Honour also noted that in Skypoint Investments Pty Ltd v Gavranich [No 2] [2004] WADC 208, Martino DCJ reached a different conclusion to Crisford DCJ in Skypoint Investments Pty Ltd v Gavranich [2006] WADC 153 concerning the application of s 28A(1) to cases where a subdivisional road joined an existing road. Those two cases, concerned as they were with the application of s 28A to a situation where an original subdivider had constructed as part of a subdivision an extension of an existing road, provide little assistance in the resolution of this case.
In Lakewood Estates Pty Ltd v De Boer (1985) 62 LGRA 141, the Full Court of the Supreme Court of Western Australia determined, by majority, that an original subdivider who had constructed a road entirely within the subdivided land could recover a contribution to the cost of that road from a later subdivider who had acquired land from the original subdivider which had a common boundary with the existing road. In that case, after commenting on the difficulty caused by the language of the TPD Act, Kennedy J, who dissented as to the outcome, made the following comment (148) – (149):
… what the section contemplates is a road dividing the land which was originally subdivided from the land subsequently divided, the relevant common boundaries lying on either side of the road.
To that extent, the case accords with the facts of this case.
When did the subdivision of Lots 900 and 9101 occur?
Section 159, s 160 and s 161 of the PD Act form part of pt 10 div 4 of that Act. Part 10 is concerned with subdivision and development controls. Section 160 makes clear that for the purposes of div 4 of that part, land is subdivided on the date on which the approval of the WAPC is endorsed on the diagram or plan of survey in relation to the subdivision of the land. This section is unambiguous and is not concerned with the date on which conditional approval of a proposal to subdivide is given.
It follows from an application of the express words of the statute that:
1.the subdivision of Lot 9101 occurred on 22 May 2008; and
2.the subdivision of Lot 900 into Lots 903 – 906 (inclusive) occurred on 4 September 2015.
It is not in dispute that the defendants were responsible for carrying out, or causing to be carried out, the works required for Lot 900 to become Lot 903 – Lot 906 (inclusive) and for applying for the approval of the WAPC which was required to be endorsed on the relevant deposited plan such that new titles could be issued for the newly created Lots.
The defendants' contention is that they merely carried out a part of the subdivision of the Larger Development Area which had been approved by the WAPC on 3 December 2004 and hence come under the umbrella, so to speak, of the term 'original subdivider'.
A conditional approval to a subdivision of land is not the actual subdivision of land as it does not legalise the division of a larger parcel of land into smaller parcels or lots: D'Orazio v Perron Developments Pty Ltd [2014] WASC 304 [55] and [56].
Are the defendants a later subdivider?
The defendants submitted that the fact that each deposited plan ultimately submitted to the WAPC for approval of subdivision bore the same WAPC reference number (WAPC 125238) supported their argument that each subdivision was merely a stage of the development of the Larger Development Area rather than a separate subdivision.
The fact that, in subdividing Lot 900 as they did the defendants were bringing into effect a part of the plan for the area which at an earlier time had been proposed by the plaintiff and conditionally approved by the WAPC on 3 December 2004, well prior to their involvement with Lot 900, does not alter the effect of s 161 of the PD Act.
The effect of s 161 of the PD Act is that the subdivision of Lot 900 took place at a later time than the subdivision of Lot 9101 and hence the defendants are a later subdivider for the purposes of s 159 of the PD Act.
No common boundary with Sessilis Cresent and proposed or existing road arguments
The defendants contend that s 159 of the PD Act does not apply because Lot 900, having been created within the larger Proposed Development Area, did not have a common boundary with Sessilis Crescent.
The defendants also resist liability on the basis that Sessilis Crescent was not an existing road at the time subdivision of the Proposed Development Area was conditionally approved.
These contentions misapprehend the test which is to be applied under s 159 and are underpinned by their error regarding the time at which the relevant subdivisions occurred at law. The assessment which is to be undertaken pursuant to s 159 is an assessment of whether, at the time of the later subdivision, the lots created have a common boundary with a road which was in existence at the time of the later subdivision.
As Staude DCJ found in Level Holdings Pty Ltd v Laurendi [No 2] [43] for s 159 to apply three preconditions must exist. They are:
1.there is access from the adjoining subdivided land to the existing road;
2.the existing road has a common boundary with the original subdivider's land; and
3.the existing road has a common boundary with the later subdivision or is joined by a road of that subdivision.
Where those preconditions are met, s 159 of the PD Act then requires consideration of whether the original subdivider contributed to or bore the costs of providing or upgrading the relevant road. Where that is the case, then s 159 allows the original subdivider to recover half of the reasonable costs of having done so.
In Lakewood Estates Pty Ltd v De Boer, Burt CJ found that the point in time at which Lots must have had a common boundary with a road is the time of the later subdivision. While that case concerned s 28A of the Town Planning Act 1928 (WA), the predecessor to s 159 of the PD Act, the decision still provides guidance as to the way in which the successor s 159 is to be interpreted because it has not changed in relation to the point in time at which the assessment is to be made.
In this case:
1.the defendants are a later subdivider who on 4 September 2015 subdivided Lot 900 thereby creating Lots including Lots 903 – 906.
2.Lots 903 – 906 had a boundary with and access to Sessilis Crescent;
3.at 4 September 2015 the plaintiff's subdivision of Lot 9101 had already occurred (having taken place on 22 May 2008); and
4.some of the Lots created from Lot 9101 had a common boundary with Sessilis Crescent.
Those facts having been established, it follows that, unless as a matter of fact the defendants either establish that they contributed to the costs of providing Sessilis Crescent or succeed in their construction arguments, the plaintiff is entitled to recover from the defendants a sum being one half of the reasonable costs it contributed to or bore solely in constructing the portion of Sessilis Crescent which abuts Lots 903 ‑ 906.
Impact of the defendants paying scheme fees to Shire
The defendants contend that they contributed to the cost of providing Sessilis Cresent through their payment of five Local Planning Scheme (Cell 9) Developer Contributions to the Shire as was required of them under Local Planning Scheme No 3 (exhibit 1 – 16). The Shire's Local Planning Scheme No 3, states that Scheme Fees are raised to pay for 'Cell Infrastructure Works'.
The expression 'Cell Infrastructure Works' is defined in the Local Planning Scheme No 3 as follows:
(a)the acquisition of land for any public facility work or service as identified on the Cell 9 ODP and also any of the works or facilities referred to in this definition;
(b)the acquisition of land for a school as identified on the Cell 9 ODP;
(c)the provision of land for and the improvement of public open space as identified on the Cell 9 ODP;
(d)the creation of any water‑way identified on the Cell 9 ODP;
(e)the widening or improvement of the following roads within Cell 9:
‑Hale Road;
‑Arthur Road (existing and proposed extension);
‑Sheffield Road.
The Scheme then provides at par 4 (exhibit 1 – 16):
Cell Infrastructure Works
…
4.2(Works not included in Cell Infrastructure Works) For the sake of clarity, the following works are not Cell Infrastructure Works:
…
(e)the provision of or contribution to the cost of providing any road within Cell 9 or the widening or improvement of any road within Cell 9 other than as specified in paragraph (d) of the definition of Cell Infrastructure Works.
The reference in 4.2(e) to roads in par (d) is intended to be a reference to the roads in par (e) as par (d) makes no reference to roads at all. Mr Singh, who had been an employee of the Shire with responsibility for (among other things) managing its infrastructure assets and the provision and maintenance of transport assets while Local Planning Scheme No 3 was in force, gave evidence that this was the case (ts 122 – 123).
Applying that interpretation, it follows that the defendants' Local Planning Scheme Cell 9 Developer Contributions did not go towards the construction of Sessilis Crescent.
The defendants are unable to resist liability on this basis.
Recovery of costs twice argument
The defendants also resist liability on the basis that the costs of the construction of Sessilis Crescent should have been, and would have been, built into the sale price of the lots which the plaintiff created by its subdivision of the land and any recovery from the defendants would amount to double, or at least over, recovery.
The defendants' argument assumes that the plaintiff profited from the sale of the lots. There is no evidence that that was the case.
No doubt a prudent developer would have endeavoured to realise the maximum sale price possible for each lot created by its subdivision of land. However, depending on the state of the market at the time lots are offered for sale, a developer may not profit from the sale of any or all lots developed. That said, the sale price of the lots created by a subdivision of the land by an original subdivider is irrelevant to the application and operation of, s 159 of the PD Act.
Section 159 of the PD Act sets out how the amount able to be recovered under that section is to be calculated. It does not permit any consideration of the profit that the earlier subdivider may have made from the sale of the lots which have a common boundary with the relevant road.
It follows that the defendants' argument on this point also fails.
No agreement argument
The defendants deny liability for the sum sought to be recovered by the plaintiff on the basis that they neither:
1.entered into any contract or agreement with the plaintiff to pay the amount claimed; nor
2.ever acknowledged the payment was owed to the plaintiff.
The obligation of a later subdivider to pay an original subdivider under s 159 of the PD Act arises from the operation of the Act itself. If s 159 applies, the payment is owed to the plaintiff by the defendants irrespective of whether or not they appreciated, acknowledged or agreed that that was so.
No prior knowledge or warning argument
The defendants also deny liability on the basis that, prior to purchasing Lot 900 they had searched the Certificate of Title for Lot 900 and had no knowledge of the possibility that they would be required to contribute to the road construction costs (defendant's submissions, pars [9], [10], [11], [12] and [18]). The effect of the first defendant's evidence is that the defendants had no knowledge of the possibility of the claim being made under s 159 at any time during the subdivision of Lot 900. They contend that any potential s 159 claim ought to have been registered as an encumbrance on the title of Lot 900.
The defendants' submission was expressed as follows (ts 150):
The defendants don't believe that legislation would permit a person just to drop a statement of claim or a letter of demand upon somebody without them being aware that they had a debt due. There must be some way that a person prior to subdividing land, must be made aware that they have a debt due without having to refer to the Act.
and;
Like, to recover a debt due - the debt - what's a debt? A - a - a debt has to be an amount known by you. You must know you owe that money - to become a debt otherwise it's a false claim.
There is no requirement in the PD Act for any notice of potential liability to be given. The PD Act simply states that where an original subdivider can recover from a later subdivider under s 159, the amount may be recovered as a debt due, provided that any proceedings for recovery are commenced within six years from the date of the later subdivision.
It follows that the defendant must also fail on this ground.
Land owned by the State/fraud
The defendants contend that the relevant portion of Sessilis Crescent is owned by the State and that it is fraudulent for the plaintiff to claim for something it does not own (defendant's submissions [42]).
The ownership of a road is not what founds an entitlement to make a claim under s 159 of the PD Act. Section 159 of the PD Act recognises that a subdivider who subdivides land and who, by the terms of the subdivision approval, is required to give up a portion of that land through the creation of a road which it will not own, is entitled to recover from a later subdivider a percentage of the costs of providing the road in certain circumstances. The cost of providing the road includes the reasonable costs of designing and carrying out the construction works and the value of the relevant portion of the land which is given up to become the road.
Section 159 expressly acknowledges that the original subdivider gives up the ownership of the land comprising the road.
The plaintiff has not been involved in any fraud in making its claim and bringing this action against the defendants.
Transfer of land defence
In their written submissions, the defendants assert that by operation of s 3(1) and s 58 of the Transfer of Land Act 1893 (TL Act), they are not liable to the plaintiff because they were the third party owners of Lot 900. This submission was not elaborated on by the defendants at the hearing.
Section 3(1) of the TL Act states that laws which are inconsistent with the TL Act shall not apply or be deemed to apply to land.
Section 58 of the TL Act states:
No instrument until registered in manner herein provided shall be effectual to pass any estate or interest in any land under the operation of this Act or to render such land liable to any mortgage or charge or to make any dealing in respect of Crown land effective, as the case requires; but upon such registration the estate or interest comprised in the instrument shall pass or as the case may be the land shall become liable in manner and subject to the covenants and conditions set forth and specified in the instrument or by this Act declared to be implied in instruments of a like nature, or the dealing in respect of Crown land is made effective, as the case required.
Section 159 of the PD Act is not inconsistent with the TL Act. It operates entirely separately and independently of the TL Act; allowing for monies to be recovered by an original subdivider from a later subdivider as a debt in particular circumstances. It does not create any interest in land.
The defendants also fail on this ground.
Disputed documents
There were several documents in the trial bundle which the defendants sought to tender to which the plaintiff objected. In the interests of completing the hearing the plaintiff ultimately consented to the tender of these documents on the basis that I would consider their grounds of objection when deciding what weight I would give to the documents. The documents concerned are set out in a table below. I agreed to adopt that course in relation to these documents.
| Document No | Description of document |
| 22 | Copy of a facsimile from the Shire of Kalamunda to unknown - Tree Bonding |
| 23 | Copy of Lot 900 William Street - Council register of orders |
| 28 | Copy of Emails from Alice Clarke to Jordan Koroveshi with reply |
| 62 | Copy of the Certificate of Title - DP 58752 Vol 2687 Folio 92 registered 28 April 2008 |
| 63 | Copy of Landgate Certificate of Title - Sellers for Lot 900 |
| 64.1 | Copy of registered notifications on Certificate of Title (J263852 NR) |
| 64.2 | Copy of registered notifications of Certificate of Title (J284551 NO) |
| 79 | Copy of Development Control Policy 1.7 - Western Australian Planning Commission |
| 80 | Copy of REIWA & Law Society Joint Form of General Conditions for the sale of land 2002 (part only) |
| 84 | Copy of Water Corporation Land Development Agreement between the Water Corporation and Starshore Pty Ltd |
| 85 | Copy of pages from 'Minutes - Ordinary Council Meeting' 18 April 2005 |
| 88 | Copy of Suncorp Banking Development Loan Summary for Lot 9000 William Street Wattle Grove |
| 89 | Copy of pages from 'Minutes - Ordinary Council Meeting' 20 February 2006 |
| 95 | Copy of sales plan and annexure for Flame Trees Estate - Lot 22 William Street Wattle Grove |
| 96 | Copy of sales plan for Lot 22 William Street Wattle Grove |
| 97 | Copy of REIWA & Law Society Joint Form of General Conditions for the sale of land 2011 |
The defendants did not articulate the findings which they would submit I could make from these documents. Having considered these documents it seems that they evidence the inquiries the defendants made about notifications and encumbrances on the title to Lot 900 prior to it being purchased by them and the answers they received as a result of those inquiries. The point being, as I apprehend it, that they had no notice of the possibility that they could be responsible for paying for part of the cost of the construction of Sessilis Crescent by the plaintiff.
I would have allowed the tender of those documents on that basis. However, as I have found that there is no requirement for the earlier subdivider to give any notice of an entitlement to make such a claim before the liability of a later subdivider arises under s 159 to s 161 of the PD Act, the admission of these documents into evidence does not assist the defendants' case.
Conclusion regarding liability
It follows from what I have found above that the defendants are liable to the plaintiff for one half of the reasonable costs which the plaintiff contributed to or bore solely in providing the relevant portion of Sessilis Crescent.
Quantum
Having determined that the defendants are liable to the plaintiff, it falls to determine the quantum of that liability.
As I stated at the outset, the defendants dispute quantum, asserting that the calculation was not undertaken in accordance with the requirements of the PD Act. In particular, the defendants assert that the market value of the land was not determined as a percentage of the market value of the total area of land comprised in the subdivision as the area of the road bears to the total area as s 159(3)(a) requires.
The defendants did not, however, take any other issue with the plaintiff's evidence regarding the calculation of quantum and adduced no evidence of their own regarding the quantum.
Calculation of the defendants' portion of road costs
Section 159(1) of the PD Act effectively provides that where the later subdivider has not contributed to the cost of providing the common road, the original subdivider may recover from the later subdivider a sum representing one half of so much of the reasonable costs as was borne by the original subdivider in providing or upgrading the part of the existing road which has a common boundary with the lot or lots created by the later subdivider.
Section 159(3) then sets out what the expression 'the cost of providing a road' means in s 159(1) while s 159(2) defines some of the terms used in s 159(3). Those sections were set out earlier in this judgment and do not need to be repeated here.
Market value of the relevant portion of Sessilis Crescent –s 159(3)(a)
Section 159(3)(a) directs attention to the market value of the common portion of road as assessed at the time of the earlier subdivision.
Evidence was given by Mr Geers, a licensed valuer, as to his assessment of the value of the portion of Sessilis Crescent which abutted the later subdivision.
His evidence was that he assessed the value of the relevant portion of Sessilis Crescent as at the date of the original subdivision (exhibit 1 – 2, page 3) and that he undertook that task in accordance with the requirements of s 159 and s 155 of the PD Act (exhibit 1 – 2, page 3).
Mr Geers' evidence was that he valued the 910 sqm of Sessilis Crescent at $237,000 (exhibit 1 – 2, executive summary and page 18).
The defendants contend that the assessment of the value of the relevant portion of Sessilis Crescent has not been done in conformity with the requirements of s 159 of the PD Act and therefore they are not liable for the costs. Their complaint is that Mr Geers' assessment of the value of the relevant portion of land given up for the creation of Sessilis Crescent is arrived at by valuing the land per square metre rather than being expressed as a percentage of the value of the totality of the area which was given to the creation of Sessilis Crescent.
The fact is that the value of the land would be the same irrespective of whether it were calculated as a percentage of the valuation of the whole of the land or by working out a cost per square metre and then multiplying that cost by the number of square metres which are comprised in the relevant portion of Sessilis Crescent.
Therefore, given that neither Mr Geers' expertise nor his valuation was challenged by the defendants, I accept Mr Geers' evidence as to the market value of the relevant 910 sqm portion of Sessilis Crescent.
Reasonable costs of designing and carrying out specified works – s 159(3)(b)
The plaintiff's evidence was that it engaged various experts to assist it in carrying out the subdivision of the Proposed Development Area which had been conditionally approved by the WAPC. It is not in dispute that VDM Engineering was an engineering company which was engaged to oversee the project and to design the civil works which were to be undertaken in the course of the subdivision. It is also not in dispute that Miluc Civil Pty Ltd (Miluc) is a civil contractor who was engaged by the plaintiff, on the advice of VDM, to undertake the civil works which had been designed by VDM.
The undisputed evidence of the plaintiff is that the civil construction works progressed in stages and that at the completion of each stage Miluc issued to the plaintiff an invoice for what is known as a 'progress payment' for the stage. Each invoice was then assessed by VDM and provided to the plaintiff for payment only after VDM had assessed that the amount invoiced was reasonable and the works for which payment was being claimed had actually been completed (exhibit 4 [45] – [56]).
The plaintiff's evidence was that it paid 10 progress payments to Miluc which represented the total payments for all of the works carried out by or for it in connection with its development of the Proposed Development Area, including the construction of Sessilis Crescent (exhibit 2 [48] – [54]). The total paid was $865,801.36 (exhibit 1 ‑ 70.9; exhibit 1‑– 69.13).
Mr Golder is a civil engineer. He was engaged by the plaintiff to calculate the costs of providing the works for the relevant portion of Sessilis Crescent. His expertise in this regard was not challenged by the defendants.
His unchallenged evidence was that the costs charged by Miluc for the works which it undertook for the plaintiff in the development of the Proposed Development Area were, in his expert opinion, reasonable (exhibit 3 [73]). In the absence of any evidence to the contrary I accept his evidence on this point.
Mr Golder's evidence was that he calculated the costs of designing and carrying out the works set out in s 159(3)(b)(i) ‑ (iii) in so far as they related to the relevant portion of Sessilis Crescent by reference to the rates and quantities which were set out in Miluc's Progress Payment 9 because that was the payment that covered the works involved in constructing Sessilis Crescent (ts 90 – 91). He gave evidence that he utilised three different methods in calculating the cost (ts 95; exhibit 3 [24]). Mr Golder gave reasons for adopting each of the three methods. Mr Golder's evidence was that, based on his expertise and experience, the methods he employed to calculate and apportion the costs of the construction of portions of roads within a development area were methodologies he and others in his field would engage when a valuation of this type is being undertaken (ts 95).
Neither the methods used nor the calculations themselves were challenged by the defendants in these proceedings.
I therefore accept Mr Golder's evidence that the reasonable costs of providing the works for the relevant portion of Sessilis Crescent was $33,143.10.
It follows that the cost of providing the relevant portion of Sessilis Crescent for the purposes of s 159(3)(a) and s 159(3)(b) of the PD Act is the sum of the cost of providing the land ($237,000) plus the costs of the relevant works ($33,143.10), being a sum of $270,143.10.
CPI
Section 159(3) then requires the sum arrived at be escalated by the percentage by which the CPI last published prior to the date of the subsequent subdivision has increased over the CPI last published prior to the original subdivider subdividing the land referred to in s 159(1)(b).
It was agreed that the CPI last published prior to 22 March 2008 was 90.5 and the CPI last published prior to 4 September 2015 was 107.7. The relevant percentage is therefore to 19.0055%.
Total cost of providing Sessilis Crescent and sum to be apportioned to the defendants
When $270,143.10 is escalated by 19.0055%, the total of the reasonable costs of providing the relevant portion of Sessilis Crescent which were borne by the plaintiff is found to be $321,449.20. Fifty percent of that sum is $160,724.60.
GST
Any sum ordered to be paid in respect of a claim under s 159 of the PD Act will be a taxable supply. Goods and Services Tax Ruling GSTR 2001/4 confirms that this is the case. Accordingly, the defendants are also liable to pay to the plaintiff the amount of GST which the plaintiff will be required to remit to the Australian Tax Office (ATO).
Interest claimed on GST
The plaintiff claimed interest on the GST amount claimed. No submissions were made by either party about why interest on the GST should or should not be payable. As it is not apparent to me that the plaintiff would be required to remit to the ATO the GST payable on the judgment sum together with interest on that sum, I have not awarded the plaintiff interest on the GST amount which the plaintiff is to be paid by the defendants.
I will however give liberty to the parties to make further submissions in relation to that matter within 14 days should they wish to pursue their claim for interest on the sum of $16,074.26.
Conclusion
It follows from the above that the defendants are liable to the plaintiff in the following amounts:
1.$160,724.60 (being the sum owed under s 159 of the PD Act);
2.Interest on the $160,724.60 at a rate of 6% per annum calculated from 4 September 2015 until the date of judgment.
3.$16,074.26 (being the GST amount).
I will allow the parties 14 days to file further written submissions in relation to the claim for interest on the GST amount, and I will also hear from the parties as to what orders should be made, including as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
CH
ASSOCIATE TO JUDGE GLANCY5 SEPTEMBER 2018
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