WA Planning Commission v Temwood Holdings Pty Ltd

[2004] HCATrans 122

[2004] HCATrans 122

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P90 of 2003

B e t w e e n -

WESTERN AUSTRALIAN PLANNING COMMISSION

Appellant

and

TEMWOOD HOLDINGS PTY LTD

Respondent

McHUGH J
GUMMOW J
HAYNE J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 27 APRIL 2004, AT 10.17 AM

Copyright in the High Court of Australia

MR G.T.W. TANNIN, SC:   If the Court pleases, I appear with MS C.J. THATCHER for the appellant.  (instructed by State Solicitor for Western Australia)

MR D.H. SOLOMON:   If it please your Honours, I appear with my learned friend, MR J.C. GILES, for the respondent.  (instructed by Solomon Brothers)

McHUGH J:   Yes, Mr Tannin.

MR TANNIN:   May it please the Court, the appeal concerns the conditional grant of subdivision following three subdivision applications made by the respondent in relation to land within an area affected by the metropolitan regional scheme for the Perth metropolitan area.  The subdivisions were part of a staged subdivision for a much larger area that was being progressively subdivided by the appellant.  If your Honours go to page 164 of the appeal book, there is a diagram which indicates the subject land.  It is an area of coastal land approximately 55 kilometres south of Perth just north of Mandurah.  On the plan at about the centre you will see a pointed arrow to the subject land and the area in green is the public open space which is the foreshore to the Indian Ocean.  The facts are set out ‑ ‑ ‑

GUMMOW J:   When you say “subject land”, what do you mean?

MR TANNIN:   The subject land is the entirety of the original area owned by the respondent.  The map is not a brilliant description of the subject of these proceedings; it simply shows the larger area.  Then if you look where the arrow is, the subject land, you will see the green marked area which is public open space, and that represents the foreshore.

CALLINAN J:   Mr Tannin, the reserve was gazetted on 1 November 1963, is that right?

MR TANNIN:   Yes, it was, your Honour.

CALLINAN J:   That is under the Metropolitan Region Town Planning Scheme Act 1959, is that right?

MR TANNIN:   I beg your pardon?

CALLINAN J:   Gazetting of the reserve is done under the Metropolitan Region Town Planning Scheme Act, is that right?

MR TANNIN:   Yes.

CALLINAN J:   What section?  I am anxious to find out just precisely what the effect of the gazetting is.  That is why I want to see the section.

MR TANNIN:   I will find the provision in a moment, your Honour, but the effect of the gazetting is simply to reserve the land.

CALLINAN J:   I understand that.  I just want to know what the Act says about it.

MR TANNIN:   Section 32 of the Scheme Act.

CALLINAN J:   When you say “reserve it”, it really is another way of saying designates it as being for public open space and not for any other purpose.

MR TANNIN:   Yes, it sets it aside for that purpose but it does not mean that it is acquired. 

GUMMOW J:   Where do we actually see that?  We do not see it in 32.

MR TANNIN:   In the actual scheme itself.  I have provided the Court with a copy of the Gazette of this scheme which is 9 August 1963, together with a document which I call the working copy and which is the up‑to‑date regional scheme.  That shows all the amendments.

CALLINAN J:   Looking at the original, that is, the Gazette of 9 August 1963, Part II deals with “Reserved Land”, is that correct?

MR TANNIN:   Yes.

CALLINAN J:   If you go to Part II, the purpose for which land is reserved should be shown in column 2, is that right?

MR TANNIN:   Yes, clause 12 deals with land that is coloured and delineated.  It might be easier, your Honour, if we refer to ‑ ‑ ‑

CALLINAN J:   Wait a moment, just let me follow this, please.  Clause 12(2) is the table on page 2319 of the gazette, is that correct?

MR TANNIN:   That is right.

CALLINAN J:   It states in (b):

All land coloured dark green with red letter “R” superimposed
Parks and recreation area – restricted public access.

Then (a) is:

Parks and recreation area.

Which of those two is it?  Is it one of those two?

MR TANNIN:   It can be either, your Honour.

CALLINAN J:   In this case, which is it?  164 is just dark green.  Does it have an “R” on it?

MR TANNIN:   No.  I think it is (a), your Honour.

CALLINAN J:   So it is (a), “Parks and recreation area”.  Does that necessarily convey that it is public parks and recreation area?  There may be such a thing as private parks and recreation area.

MR TANNIN:   It has to be read in terms of what then applies under the scheme.  If you look at the following clause, clause 13, it provides that:

Except as provided in Division 2 of this Part no person shall commence or carry out any development on reserved land, other than the erection of a boundary fence – 

CALLINAN J:   I understand that, but that does not alter the fact, however, does it, that being designated simply “parks and recreation area” might mean parks and recreation area for private purposes.

MR TANNIN:   If you look at clause 13 that is one of the implications.  The ownership of the land has not been transferred and, whilst other works are subject to the permission of the appellant, the erection of a boundary fence is not so that the owner of the land can erect a boundary fence around that reserve and effectively restrict access.  One of the consequences of acquisition, that is, ownership to the Crown, one of its planning purposes is that the access to the public is guaranteed by that ownership, in perpetuity.

CALLINAN J:   What I am concerned about is whether the condition might go beyond merely being a condition.  It might, in effect, be a change of zone.  It may, in fact, convert the land from being in 12(2)(a) to land in 12(2)(b) and can you do that by a condition?  May that not be the effect of it?  I am more familiar with the expression “zoning”, but for present purposes treat 12(2)(a) as a zoning of this land, 12(2)(a) plus the table of uses ‑ ‑ ‑

MR TANNIN:   Your Honour, zoning is dealt with under Part III.

CALLINAN J:   All right.  Leave out any question of zoning.  The land now has a designation of being parks and recreation area.  Is that right?

MR TANNIN:   Yes.

CALLINAN J:   The effect of the condition would be to convert the land from “Parks and recreation area” to “Parks and recreation area – restricted public access”.  Is that right?

MR TANNIN:   No.  If you look at the condition, it refers to the foreshore reserve being simply ceded free of cost, without any payment to the Crown.  There is no indication that access will be restricted.  The intention is quite the other way.

GUMMOW J:   How do we read the 1963 Gazette onto the plan at page 164, with the land the subject of the condition that is said to be ‑ ‑ ‑

MR TANNIN:   The map at 164 is part of a town planning scheme.  I was only taking the Court to that map ‑ ‑ ‑

GUMMOW J:   The subject land does not include the green strip, that is all.

MR TANNIN:   Yes, it does.  It is the coastal strip, it is 200 metres along the coast.

CALLINAN J:   Why are the boundaries of the subject land not shown then?  They are not, are they, on the green ‑ ‑ ‑

MR TANNIN:   No, your Honour.  This is simply a plan to put into context where the land is, physically, in Western Australia.

CALLINAN J:   All right.  Do we have a plan which shows the boundaries of the subject land in relation to the reserve?

MR TANNIN:   No, we do not, not in the appeal book.

CALLINAN J:   Are we to understand that the northern boundary, for example, would be a continuation of Crystaluna Drive?

MR TANNIN:   Yes.

CALLINAN J:   Are we to understand that the southern boundary would be a western continuation of the actual boundary which is shown, finishing at the green reserve?

MR TANNIN:   I think it is slightly further north than that.

CALLINAN J:   Slightly further north, but approximately in that locality?

MR TANNIN:   Yes.

GUMMOW J:   What is the Bay Shore Gardens Estate?  That is what we are talking about, is it not?

MR TANNIN:   Yes, that is the entire subdivision development which is marked ‑ ‑ ‑

GUMMOW J:   Where does it appear at 164?

MR TANNIN:   In what is described as the subject land.  If your Honour can see in 164 there is a pink boundary.

GUMMOW J:   That is right.

MR TANNIN:   Part of that boundary contains lots which have already been subdivided.

GUMMOW J:   Yes.

MR TANNIN:   And others in the area shown blank have not been subdivided.  It is areas within that blank area that were the subject of the development applications in these proceedings.  I have not delineated them precisely because in the end, for the purposes of the appeal, it is not going to greatly matter.  What will ‑ ‑ ‑

GUMMOW J:   The Bayshore Gardens Estate does not include, does it, any of the green strip?

MR TANNIN:   No.

GUMMOW J:   But, nevertheless, your opponent’s client owns part of the green strip.

MR TANNIN:   Yes, it did.

GUMMOW J:   Is that the point?  It is contiguous to the subject land.

MR TANNIN:   That is correct.

CALLINAN J:   Now, they just do not want a public park in front of it, in effect.

MR TANNIN:   Well, in our submission it is not that simple.  What the appeal is about is that the appellant has imposed a condition on the subdivision application requiring that the land that is reserved be ceded free of costs to the Crown as a condition of the subdivision without payment of compensation.  The issue is the validity of that provision under section 20 of the Planning Act.  If it is not valid the respondent seeks compensation or seeks the opportunity for compensation for land.  If it is valid the Crown has the land ceded to it without costs.

The central issue, in our submission, in this case, requires this Court to resolve the proper application of section 20 of the Act to this case.  It would assist the Court if your Honours go to the annexures to our submissions.  At annexure 1, page 25, there is set out section 20 of the Town Planning and Development Act.  What we have done ‑ ‑ ‑

GUMMOW J:   I have a reprint as of 3 November 2000, would that be right?

MR TANNIN:   It is from there.  All I have done in the annexure, however, is to print in bold the relevant part of section 20 for ease of reference.  It provides:

Subject to section 68 of the Environmental Protection Act –

which is not relevant for present purposes –

to this section and to section 20B –

which is the saving of agreements –

a person shall not, without the approval of the Commission . . . subdivide any lot . . . and the Commission may give its approval under this paragraph subject to conditions which shall be carried out before the approval becomes effective.

Now, in this appeal, the key, in our submission, to resolving the issues lies in understanding the nature of the exercise of the power undertaken in section 20.  The nature of the exercise of power, in our submission, is properly explained by the judgment of this Court in Lloyd v Robinson, a judgment delivered in 1962, relevantly by Justices Kitto, Menzies and Owen.  In our submission, the Full Court of the Supreme Court failed properly to understand the nature of the exercise of the section 20 power and failed properly to apply Lloyd v Robinson. 

Lloyd v Robinson, which is in our authorities, was an appeal from the Supreme Court of Western Australia against a decision granting a…..declaration that conditions imposed on the grant of subdivision approval by the Town Planning Board and upheld in part on appeal to the Minister were invalid.  The conditions imposed there required the ceding by transfer of land to the Crown.  The respondents, who were the trustees for the landowners, argued that the scheme of the town planning legislation was such that, where the conditions were imposed that would detrimentally affect the rights of ownership, the owners would be entitled to compensation, and the imposition of the conditions was also attacked as being, in effect, a form of taxation.  The respondents claimed that the conditions were unreasonable and that open space provisions should be made on the basis of town planning, not of subdivision.

Now, in Lloyd v Robinson at 154 the Court analysed the nature and effect of the exercise of section 20 power.  The relevant provisions go from 154 to 155.  The Court observed at about point 1:

Given the necessary relevance of the conditions to the particular step which the Board is asked to approve, there is no foothold for any argument based on the general principle against construing statutes as enabling private property to be expropriated without compensation.  The Act at its commencement took away the proprietary right to subdivide without approval, and it gave no compensation for the loss.  But it enabled landowners to obtain approval by complying with any conditions which might be imposed, that is to say which might be imposed bona fide within limits which, though not specified in the Act, were indicated by the nature of the purposes for which the Board was entrusted with the relevant discretion.  If approval is obtained for the subdivision of one area of land by complying with a condition which requires the giving up of another area of land for purposes relevant to the subdivision of the first, it is a misuse of terms to say that there has been a confiscation of the second.  For the giving up of the second a quid pro quo is received, namely the restored right to subdivide the first.

In our submission, unequivocally this Court in Lloyd v Robinson held that the exercise of section 20 power under this Act was not an exercise in confiscation. 

CALLINAN J:   Where does the proprietary right, said to have been given after the subdivide, come from – “proprietary right to subdivide without approval”?

MR TANNIN:   The Act established that ‑ ‑ ‑

CALLINAN J:   Do you say that existed always at common law?

MR TANNIN:   In effect, yes.  The Act established that permission to subdivide henceforth had to be given.

GUMMOW J:   It imposed a prohibition.

MR TANNIN:   Yes.  If I might continue on the passage at 154 and 155, their Honours found at about point 7:

But there is no room for reading the Act down in some fashion by appealing to a principle of construction that has to do with confiscation.  If the Board has performed its statutory duty by giving approval to the subdivision subject only to conditions imposed in good faith and not with a view of achieving ends or objects extraneous to the purposes for which the discretion exists, the inescapable effect of the Act is that the landowner must decide for himself whether the right to subdivide will be bought too dearly at the price of complying with the conditions.  The question ‑ ‑ ‑

GUMMOW J:   Your opponent fixes on the words “with a view of achieving ends or objects extraneous to the purposes for which the discretion exists”.

MR TANNIN:   It does, but it does so, in our submission – and it follows in effect the argument in the Full Court.  It takes the view that this, in effect, is a confiscation of a right.  In effect, the misconstruction of Lloyd v Robinson infects the finding of the purpose.  It is said that Lloyd v Robinson does not apply, cannot apply, and if the kind of result that is achieved in Lloyd v Robinson is applied, then that is invalid.  Our submission is that is not the correct starting point.  If you continue in the judgment here ‑ ‑ ‑

HAYNE J:   Before you do that, the Act as it stood at the time of Lloyd v Robinson had no provision, did it, equivalent to those in section 36 of the Scheme Act upon which the respondent fastens?

MR TANNIN:   Yes, that is correct, and indeed the Full Court distinguished Lloyd v Robinson on that basis.  In our submission, that is not a material distinction.  In our submission, it does not matter whether the land was reserved under the metropolitan regional scheme or not.  That is not a material distinction.

HAYNE J:   I understand that is your submission, but we will need in time to come to grapple with what the respondent says at paragraph 10.7 of its submissions, which points to what are said to be consequences flowing from section 36 and what is asserted to be the need to relate section 20 of the Town Planning Act and section 36 of the Scheme Act.

MR TANNIN:   Yes, your Honour.  I will detail the operation of those provisions and address that point, if I just might finish dealing with Lloyd v Robinson.  The matter was heard in the first instance before Justice Virtue in the Supreme Court.  At page 154.9, their Honours observed: 

The question in the case seemed to Virtue J. to be “whether the Board can expropriate for the benefit of the Crown and without any right to compensation substantial portions of the plaintiffs’ land as a condition of their being able to use the balance remaining”.

If I might just interpolate there, that is exactly the error, in our submission, that the Full Court made in this case.  The High Court observed:

With respect, this is not an accurate way of stating the question.  There is here no expropriation for the benefit of the Crown in any real sense of the expression.  True it is that if the land required for open space reserves is transferred to the Crown for park and recreation purposes as the conditions require, the beneficial title to it will pass to or be vested in the Crown without legal fetter.  There will be a moral obligation on the Government to keep it reserved for the purposes mentioned, but no legally enforceable obligation.  The ultimate sanction must be political only.  But the fact remains that the Board has stipulated for the transfer solely in order to serve purposes which it is justified in serving by an exercise of its power to impose conditions, and has done so because a reliance upon the continuing good faith of the Administration provides the only available means by which the fulfilment of those purposes may be practically secured.

McHUGH J:   Mr Tannin, may not Lloyd v Robinson be a complete red herring in this case? Has the decision anything at all to do with the case? Is not the real question, given the terms of section 3 of the Scheme Act and the enactment of section 36, is it legitimate under section 20 to impose a condition which will destroy the “right” that the respondent has under section 36? And whether or not there ever was a principle that was relied on by the losing party in Lloyd v Robinson is irrelevant, is it not?

MR TANNIN:   Your Honour, with respect, Lloyd v Robinson is the key to understanding this case.

McHUGH J:   I know it is the key to your argument, but is not the real issue whether, as a matter of construction, independently of Lloyd v Robinson – put it in your favour, if you like.  What has it to do with the case?  How can what was said in Lloyd v Robinson defeat the operation of section 6 if, upon its proper construction, section 36 in combination with section 3 prevents the exercise of the power under section 20?

MR TANNIN:   In our submission, there is not an inconsistency between the Scheme Act and the Town Planning Act in this case. Section 36 of the Scheme Act does not prevent the exercise of the power under section 20. The question is how section 20 is to be construed. In Lloyd v Robinson, the Court indicated that the condition could be imposed as part of the conditions of subdivision, as part of the permission.

GUMMOW J:   We understand that.

McHUGH J:   It is in a different context.

GUMMOW J:   You have to interpret the words “conflict” or “inconsistent”, which were not in play in Lloyd v Robinson.

MR TANNIN:   In section 36 of the Scheme Act, there is not ‑ ‑ ‑

GUMMOW J:   We have not really been taken to 36.

MR TANNIN:   No. Obviously, I will need to take you there. I have in the submissions set out a detailed history of how section 36 was inserted into the scheme and the Parliament’s purpose in so doing. In summary, at paragraph 56 of our submissions, the legislative framework operates in this way. The nature and scope of the entitlement to compensation is governed by sections 11 and 12 of the Town Planning and Development Act and by section 36 of the Act. The effect of section 36(3), in our submission, is to condition and defer entitlement to payment of compensation on the occurrence of the relevant events set out in 36(3)(a) and (b).

HAYNE J:   Can I just interrupt you and take you back to the first of those points you make there in 56(a).  Am I right in understanding that the Scheme Act applies to this land?

MR TANNIN:   Yes.

HAYNE J:   The Scheme Act, by section 3, picks up parts of the Town Planning Act?

MR TANNIN:   Yes.

HAYNE J:   Does the Town Planning Act, of its own force, given the provisions of sections 3 and 5 of the Scheme Act, have any direct application?

MR TANNIN:   Yes, it does.  It is the provision which is used to apply the condition in this case.  It is a permission for subdivision that is sought by the respondent pursuant to the Town Planning Act, and it is part of that process that entails this condition.  In the construction of these two Acts, they are to be read in conjunction.  To the extent that there is a conflict, the Scheme Act will prevail, but it does not deny the application of the Town Planning Act.

GUMMOW J:   Wait a minute.  Would section 11 of the Town Planning Act apply of its own force here? 

MR TANNIN:   Yes. 

GUMMOW J:   This was not a town planning scheme, was it?  Do you not have to first have the adjustments by 36(1)?  I just do not have the answer. 

MR TANNIN:   If there has been an application, yes.

GUMMOW J:   Would 11 apply unaltered of its own force?

MR TANNIN:   Subject to the demonstration of the conditions, yes.

GUMMOW J:   But was what happened all those years ago an injurious affectation by the making of a town planning scheme?

MR TANNIN:   No, because there was a reservation.

CALLINAN J:   But why would not a reservation injuriously affect the land?  It is a blight on it.  It would be bound to operate on the mind of a purchaser.

HAYNE J:   You cannot sell it, or not sell it.

MR TANNIN:   The reservation is made under the scheme Act.  To obtain compensation under the scheme Act particular conditions have to be complied with.

CALLINAN J:   But is it not an injurious affection as soon as the scheme is gazetted?

MR TANNIN:   Your Honour, the way the scheme operates is that the person who applies under section 36 must demonstrate not merely the fact that there has been reservation, but the fact of the effect of that reservation. This is set out in the judgment of Bond in the Full Court.

CALLINAN J:   There is an immediate effect on the reservation.

MR TANNIN:   The legislation is designed not ‑ ‑ ‑

CALLINAN J:   They postponed a claim for compensation, but the effect must be instantaneous, must it not?  Tell me why that is wrong, if it is wrong.

MR TANNIN:   In real terms, your Honour’s observation is correct, but the effect of the legislation is to defer any entitlement to compensation that Parliament expressly set out.

GUMMOW J:   I am still trying to construe section 11.  The making of a town planning scheme referred to in section 11 is to an activity under section 6, is it not?  It has to be in accordance with the provisions of that Act.  This was not so, was it?  It was in accordance with the provisions of the scheme Act.

MR TANNIN:   That is correct.

GUMMOW J:   So section 11 on its own force did not provide any compensation.

MR TANNIN:   That is correct. The compensation, if it is to be sought here, has to be sought pursuant to the provisions of section 36 of the scheme.

GUMMOW J:   That is right, which picks up and relevantly adapts section 11.

MR TANNIN:   Yes.  In Bond, if I might take your Honours there, the ‑ ‑ ‑

HAYNE J:   To demonstrate what?

McHUGH J:   What is the problem?

MR TANNIN:   The clear purpose of section 36 was to defer and condition any entitlement to compensation. The loss that might occur by reservation would only be compensable under the Act upon the happening of particular events, which did not happen in this case, that is a development application or whatever. It is only in those circumstances that compensation can be paid, the right can only be claimed in those circumstances. That event was not triggered here. There was no right to compensation. So the operation, in our submission, of section 20 was not in any way to circumscribe existing rights.

GUMMOW J:   Your opponent fixes on 36(3), does he not?  He says those words “no compensation is payable” does not mean there is no approved right not yet reducible to money and he says there is a Clissold v Perry inchoate entitlement and that that is what is frustrated by using this ‑ ‑ ‑

CALLINAN J:   The word is “until”, not “unless”.  Is that not important?  It seems to assume that compensation will be payable.

MR TANNIN:   But that is also subject to the making of an application in good faith.  Neither event happened here.  Clissold v Perry concerned a case where land was sought to be acquired from a person who was in possession for some 10 years.  That was an existing right.  What is sought to be put up as way of comparison in this case is the potential for a right to compensation, because that is all it is.  There is no doubt that the respondent owns the property in question, but is has only the potential for a determination of compensation.

CALLINAN J:   I must say I would find it more persuasive if the word “until” were not used there and there were words such as “until and unless”.  Once you have the word “until”, it assumes a right ‑ ‑ ‑

MR TANNIN:   If you look at the events that are the subject of that phrase:

until – 

(a)      the land is first sold following the date of the reservation –

which may never happen –

or

(b)      the responsible authority refuses an application made under the Scheme for permission to carry out development on the land or grants permission to carry out development on the land subject to conditions that are unacceptable to the applicant –

and, further, in 4:

Before compensation is payable under subsection (3) –

(b)      . . . the person lawfully appointed to determine the amount of compensation shall be satisfied that the application was made in good faith.

They are all, in our submission ‑ ‑ ‑

HAYNE J:   There is no dispute that those events have not happened.  The complaint is that they cannot and that they are precluded, and we have to grapple with that.  It is not enough to say all those events have not happened.  Of course they have not.

MR TANNIN:   In our submission, the point of stressing that is to say that the right of compensation, if I can call it that, has not accrued either.

GUMMOW J:   Whose right is it?  That is the first question and section 11 gave it to some person long since departed, did it?  There had to be application within six months.

MR TANNIN:   Section 11, as adapted in 36.

GUMMOW J:   That is the question:  how is it adapted in 36?  Why does it now give his successor in title a right?

MR TANNIN:   Under 36(3a), it provides that:

Compensation for injurious affection to any land is payable only once under subsection (3) and is so payable –

(a)      under paragraph (a) of that subsection to the person who was the owner of the land at the date of reservation; or

(b)      under paragraph (b) of that subsection to the person who was the owner of the land at the date of application –

that is, the application to develop, which is then refused.

GUMMOW J:   The land was sold.  It was sold to your opponent’s client.

MR TANNIN:   Yes, that is right.

GUMMOW J:   There is a question of relationship between (a) and (b).  Is it saying, whichever happens first?  The question of construction is, does this right run with the land in any way?

MR TANNIN:   In our submission, it does.

GUMMOW J:   All right.  Well, once you make that concession, it seems to me you are in trouble.

HAYNE J:   That seems to be a concession about the operation of subsection (5).  It may be right, it may be wrong, but subsection (5) and the time limit has to be grappled with.

MR TANNIN:   Your Honour, the operative provision, if there is one here, is, in our submission, (3a)(b).  The point we make is that there has not been that application.  I keep stressing that.

HAYNE J:   That makes an assumption about the operation of a provision somewhere that is giving a right to compensation.  You have taken us to (3) and you take that as being the starting point.  The question being put to you is whether there is an anterior starting point to be found somewhere.

GUMMOW J:   Whose right and when accruing and how postponed?  These are the questions that have to be answered.

MR TANNIN:   It is important, in our submission, to characterise the nature of the right.  It is not sufficient to simply say that, as the owner, a right might, if particular things occurred, accrue.  The point is to determine what it is that was held at the time of the making of the application.

GUMMOW J:   And by whom. 

MR TANNIN:   And by whom.  In our submission, the respondent was the holder of that right.

GUMMOW J:   How did that come about?  How was the right of its vendor translated into its right as a subsequent purchaser – under what section?

MR TANNIN:   Let us step one step back.  We do not say that the right had come about.  We say that it could have come about if this respondent had made its application and done so in good faith and at the appropriate time.  In one sense, this argument, which is really about how one characterises the right, is not apposite.  In the court at single instance, before her Honour Justice McLure, her Honour undertook an exercise of analysis to determine whether or not any particular right had accrued to the respondent and made a careful analysis of the exercise of the power.  I will not take your Honours directly to that, other than to say that her Honour summarised the nature of the right held by the respondent in terms of a Clissold v Perry analysis by indicating that, whilst it had a right of ownership, it had no accrued right in terms of compensation.

GUMMOW J:   Well, how does 3(a) work in all of this, in section 36?

MR TANNIN:   It refers back to subsection 3 and provides the events when the compensation is payable.

HAYNE J:   Can we tackle it by taking your opponents’ rewrite of section 11 to take account of the Planning Scheme Act?  If you go to their submissions, in the first sheet appearing after page 13 of their submissions, you will see a sheet headed “S.11 TPDA applying to the MRS by ss. 3 and 36(1)”.  Do you have that yet?

MR TANNIN:   Yes, thank you.

HAYNE J:   Your opponent says, it seems, that the right to compensation ‑ ‑ ‑

MR TANNIN:   Sorry, excuse me, your Honour, I do not think I do have it ‑ ‑ ‑

HAYNE J:   You still do not have it?

MR TANNIN:   Your Honour, I rewrote that and I annexed it to my list of authorities.  I rewrote subsection 1, perhaps if you do not have that I could hand up a fresh copy.  I sent a fresh copy with the list of authorities, but I have additional copies of it, the reason being I had overlooked modifying subsection 1 in accordance with 36, but if that is not available, I have extra copies here.

HAYNE J:   Yes, well that is a separate sheet entitled “Compilation of section 11 as modified”.

MR TANNIN:   That is right.

HAYNE J:   Perhaps if you could make it harder, you would.  It is said against you that section 11 is engaged in favour of:

Any person whose land or property is injuriously affected by the making of the . . . Scheme -

Now, how does the respondent engage that provision when the respondent is a subsequent purchaser of land which, at the time of purchase, was subject to the reservation?

MR TANNIN:   That is not, in our submission, the entitlement to compensation that the respondent was asserting before the Full Court. Its argument before the Full Court that its right to compensation existed pursuant to section 36(5) as a distinct right which could not be taken away ‑ ‑ ‑

GUMMOW J:   I know that.

MR TANNIN:   The argument ‑ ‑ ‑

GUMMOW J:   We are trying to solve a case.

McHUGH J:   The question is whether he ever had a right, quite apart from your argument about vested, contingent, and so on.  You start with section 11, and the fact that this reservation took place on 1 November 1963.  Under section 11, you had a right to claim compensation in accordance with the scheme.  Now, what was the time limit under section 11 back in 1963?

MR TANNIN:   Six months.

CALLINAN J:   Was it six months or not less than six months?

McHUGH J:   Not being less than six months.

CALLINAN J:   Was there any closing period or closing date, if not less than six months?

MR TANNIN:   No, it depended on the making of the claim.

CALLINAN J:   Do you have the Act as it was precisely in 1963?  Have you got that?

McHUGH J:   Well, section 12 operated in any event, did it not, so that there was no right to compensation back in 1963.  Is that right or wrong?

MR TANNIN:   That is correct, but that is a provision for compensation in relation to provisions made in town planning schemes and this is a reservation under the Scheme Act.

GUMMOW J:   Which is not a town planning scheme.

MR TANNIN:   Not a town planning scheme.

GUMMOW J:   So the question then is, what was the form of 36 back in that distant past some 40 years ago?

MR TANNIN:   The amendments to section 36 and the legislative history are set out in our submissions at page 10 through to page 13. We set out the entire legislative history as to how the two Acts interrelated, the purpose of section 36, how and why the Parliament included those provisions and the intent of the Parliament in enacting the Scheme Act, that is, referable back to what is known as the Slevin v Hepburn report.  All of that history, which is not controversial, unequivocally indicated that the Parliament was restricting the right to compensation to the happening of particular events.  It was not in any way restricting the powers that are found in section 20 of the Development Act, and, whilst your Honour Justice McHugh has stressed the possible irrelevance of Lloyd v Robinson, in our submission, it is the key to the proper understanding of this case.

CALLINAN J:   I have some problems with Lloyd v Robinson anyway, characterisation.  For example, at page 155, the Court said:

True it is that if the land required for open space reserves is transferred to the Crown . . . the beneficial title to it will pass to or be vested in the Crown without legal fetter.  There will be a moral obligation on the Government to keep it reserved for the purposes mentioned, but no legally enforceable obligation.

There is a subsequent case, Mareen Developments v Brisbane City Council, which I am having brought down, in which it was held in this Court – it may have been only on a special leave application – but it was fairly explicitly stated that if land were acquired for a town planning purpose it was, in effect, held on trust for a town planning purpose.  That case has subsequently been referred to by approval in another case in this Court.  I cannot remember the name of it for the moment. 

So there is one problem about Lloyd v Robinson, and I am not too sure about some of the other characterisations either, with respect.  Some of these other propositions that are stated there are very sweeping statements with respect to the imposition of conditions in respect of land not the subject of the application simply because the other land happens to be in the same ownership.  I am not too sure that that is necessarily right either.  There has been a lot of development in town planning and town planning ideas since Lloyd v Robinson was decided.

MR TANNIN:   But in terms of how the land will continue to be held, there is not any controversy in this case.  The central point of Lloyd v Robinson is that the effect of the exercise of the section 20 power is not a confiscation of property and it applies, in our submission, in this case. If the land is reserved, the land has been taken, in effect, from the owner and the blighting, as your Honour Justice Callinan referred to it, has occurred. The value of it is lost until an application for compensation occurs when some aspect of the value might be redeemed. If the land is not reserved and it is simply as a condition taken as part of the subdivision by the Crown and ceded free of cost, it is also lost. It is simply the value that is the same in each case, but the effect of the exercise of the power is the same whether or not the land is reserved or not, and nothing in the legislative scheme in section 36(3) prevents the exercise of the section 20 power which has to be a power obviously exercised in good faith.

HAYNE J:   Can we head back to where we started, namely, in the scheme, and we head first to clause 8 of the scheme.  Clause 8 of the scheme provided a time limit, a time limit for:

Claims for compensation for injurious affection . . . other than claims in respect of land reserved – 

is that right?

MR TANNIN:   Yes.

HAYNE J:   So there is a six‑month time limit “other than claims in respect of land reserved”.  Land reserved dealt with in Part II.  Clause 20 of the scheme provides a further time limit for the case where there is a refusal of approval for development.  A (b) case, is that right?

MR TANNIN:   Yes.

HAYNE J:   I think I am right in saying there is no time limit prescribed in sale cases, is there?

MR TANNIN:   Not in this.

HAYNE J:   Are we not driven at some point then to determining whether under 36(3), the two paragraphs, (a) or (b), are to be read with some temporal element?

McHUGH J:   In other words, the question is, does it mean the land is first sold or the responsibility refuses an application, whichever is the earlier.  Your best argument seems to be one you do not want to run, because on one construction of 36(3) your opponent never ever had any right of any sort: inchoate, contingent, vested or otherwise because back in 1963, the right to compensation vested in the then owner who then sold it to somebody, I assume it was the respondent, and if that is the case the claim for compensation expired under subsection (5) within 6 months of the land being sold.

MR TANNIN:   That is not an argument that we ran at the Full Court.

GUMMOW J:   It is a question of law.  It is not a question of whether you run it somewhere else.  The question is you are running it now.

MR TANNIN:   My hesitation, your Honour, is that the construction we have placed on the decision of the High Court in Lloyd v Robinson, which has been consistently applied in the jurisdiction, has never to this point been challenged.

McHUGH J:   No, but it just seems to me it has confused your whole case.  You have become so obsessed with Lloyd v Robinson that you cannot see the point that stares you in your face and which is your best chance of winning the case.

HAYNE J:   If you win it, it may have rather interesting effects on the costs in this Court and the courts below about who wears the costs too, but that is a separate issue.

MR TANNIN:   The matter went before the Town Planning Appeal Tribunal.  It went before a senior judge of the Supreme Court.  It then went to the Full Court ‑ ‑ ‑

HAYNE J:   And nobody has grappled with the Act, nobody has sat down and started with the words and worked from point A to point Z.

GUMMOW J:   It is the old folklore problem.

MR TANNIN:   If the construction that the Court has raised in issue here is correct, the entire argument falls away because the respondent could never claim.

McHUGH J:   Well, exactly.

MR TANNIN:   The appellant’s position is ‑ ‑ ‑

GUMMOW J:   I have to say this to you, you are at peril of losing your grant of special leave.  You are inviting us to decide the appeal on what seems to be a false basis.

McHUGH J:   Would you like an adjournment to consider the matter and get some instructions?

MR TANNIN:   I would, your Honour.

McHUGH J:   Yes, very well.  The Court will adjourn.  How long would you need?

MR TANNIN:   I need about 15 minutes, your Honour.

McHUGH J:   The Court will adjourn for 15 minutes.

AT 11.15 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.28 AM:

McHUGH J:   Yes, Mr Tannin.

MR TANNIN:   May it please your Honours.  Within the limits of time, I can inform the Court that, firstly, the construction that your Honours have indicated may be open is not a construction we have ever applied, not only in this case but in other cases.  Secondly, the reason for that is that the legislation is to compensate for particular events, and we have never interpreted it in any other way.  In this case ‑ ‑ ‑

GUMMOW J:   Sorry, say that again. 

MR TANNIN:   In this case, we have consistently interpreted the legislation in the way that we did before the Full Court.  I am simply putting some background together.  If your Honours take the view that the proper construction of the legislation demands that conclusion, then, in our submission ‑ ‑ ‑

GUMMOW J:   We have lost the sound.

McHUGH J:   I think we will proceed even though it is not recorded.

MR TANNIN:   If the construction that the Court has identified is open, in our submission, it would determine the appeal.  If it is open, then, in our submission, the matter must be determined, but we do not abandon the grounds we have argued in terms of special leave.  The costs implications ‑ I would simply indicate to the Court, we are not seeking to overturn any orders as to costs in any of the courts.  That was the condition of the grant of special leave and we indeed are paying the costs, I think, of the respondent.  The construction that your Honours have identified in relation to 36 – I think we have some sound back – has, as I have indicated, never been historically applied.  There are provisions in the Scheme Act such as subsection (7) of ‑ ‑ ‑

GUMMOW J:   That is true of lots of constructions. 

MR TANNIN: I accept that, your Honour, but I just point out that there some indicia in the Act that do not seem to support it. For example, section 36(7) provides that:

Where compensation for injurious affection to any land has been paid under subsection (3), the Commission may lodge with the Registrar of Titles a caveat against the land specifying –

(a) the date of payment of compensation;

(b) the amount of compensation so paid; and

(c) the proportion (expressed as a percentage), which the compensation bears to the unaffected value of the land ‑ ‑ ‑

McHUGH J:   But consider subsection (3)(a).  The land is sold with the reservation.  One would expect it would be reflected in the price.  The purchaser would not be paying top dollars for land that is subject to this reservation.  They certainly would not be paying the same sum that they would have been prepared to pay if there were no reservation.  So one would think that it is the seller who has the right to compensation, and that it would be unlikely that what is intended in (3)(a) is that somebody who buys on the cheap then gets a right of compensation.

HAYNE J:   Which seems at odds with (3)(a)’s reference to the land being “first sold”, “first sold following the date of reservation”, and the provisions of (5) limiting the time to “6 months after the land is sold”, that is, after the land, I would have thought, is first sold following the date of reservation, an event which long since has occurred.

MR TANNIN:   With respect, one can see the force of that.  The difficulty is how one then marries that to the procedure that is dealt with in (b), how is that to apply?

McHUGH J:   It just may not apply.

HAYNE J:   It was never engaged.

McHUGH J:   It is just never engaged.

GUMMOW J:   Do you get any support out of subsection (3a), which seems to distinguish ‑ ‑ ‑

MR TANNIN:   It seems to be referring to two different persons.  Under (3a)(a) it provides under paragraph (a) of that subsection:

to the person who was the owner of the land at the date of reservation –

It then distinguishes “or” under paragraph (b) of that subsection:

to the person who was the owner of the land at the date of the application –

It seems to imply two different persons, or at least the possibility of two, which is consistent with the more generous application that we have adopted thus far.

GUMMOW J:   Do we know when (3a)(a) was added?  Subsection (3) itself would have been around 1962.

MR TANNIN:   I think it was part of the (3a) amendments.  At page 150 of the appeal book we set out the history in summary in our submissions, but we have actually set out all the legislative provisions in the appeal book.  At page 150 the amendment No 104 of 1969 is reproduced.  That is assented to in November 1969 ‑ ‑ ‑

GUMMOW J:   So it is 1986, is it not?

MR TANNIN:   Yes, it is the Metropolitan Region Town Planning Scheme Amendment Act [1986] and it provides at the bottom of that page that:

Section 36 of the principal Act is amended by repealing subsection (3a) and substituting the following subsection ‑ ‑ ‑

GUMMOW J:   When was the earlier (3a)?

MR TANNIN:   At 144 of the appeal book there is the 1968 amendments ‑ ‑ ‑

GUMMOW J:   Yes, thank you.

MR TANNIN:   ‑ ‑ ‑ at paragraph (d) which is about point 3 on the page.  I have also extracted the Hansard references which deal with and support, by way of explanation, the entries that I have referred to.  I can say that nowhere in the Hansards that we have provided is there any reference to this particular construction of the legislation.  Of course, that is not determinative, but that, in fairness to the respondent, is what the Parliament did. 

Now, in the time that we have had we have found obviously no case that deals with this construction.  I can say to the Court that every case in the Western Australian jurisdiction has taken the view that the compensation opportunity, rather than right, ran with the land, in effect.  Now, our submissions to the Court in relation to the special leave grant direct themselves to that matter.  I have dealt with the pivotal effect of Lloyd v Robinson, I have dealt with the fact that in Clissold v Perry the actual character of the right held was distinct from the right that is for compensation that is claimed here.  The final area of submissions we make is in relation to the proper planning purpose. 

The Full Court, in effect, found because there had been a misapplication of Lloyd v Robinson that there was, in fact, a confiscation occurring for a fiscal purpose and that there was no proper planning purpose.  In our submission, that incorrect construction infects the Full Court’s findings.  The exercise of the power under section 20 is a power under the Planning Act.  It was for a planning purpose, that is, to acquire the land for the Crown, to guarantee in perpetuity this park.  I take your Honour Justice Callinan’s point in relation to the nature of the trust that is imposed on the Crown ‑ ‑ ‑

CALLINAN J:   It goes a bit further than that.  If you look at page 155 of Lloyd v Robinson, you will see that their Honours say at the top of the page, by reference to what had been said by Justice Virtue:

this is not an accurate way of stating the question.  There is here no expropriation for the benefit of the Crown in any real sense of the expression. 

Leaving out the question whether this is expropriation or not, there is clearly a benefit for the Crown, is there not?  The Crown gets parkland in the public interest and for the public benefit.  If, in fact, it is the law that the land must continue to be held for that purpose, a park purpose, then clearly the Crown gets a benefit.  The public get a benefit.

MR TANNIN:   It does.  That is what I was going to point out.  There is a balance in the benefit. 

CALLINAN J:   The case I had in mind, Mr Tannin, is Brisbane City Council v Mareen Development Pty Ltd (1972) 46 ALJR 377, referred to with approval – and, indeed, the Full Court decision from which the application was made has also referred to it with approval – in Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566 at paragraph 36. There is also a reference to an earlier case in the Privy Council in paragraph 34, Brisbane City Council v Attorney-General (Qld) [1979] AC 411. Land had been transferred to Brisbane City Council for showground purposes and that was held to create the trust. Now, if that is the true position, then I do not know how their Honours’ statement that the Crown gets no benefit, and that therefore this is not an expropriation by the Crown, can stand as an accurate, current, statement of principle.

MR TANNIN:   It is correct that the land is transferred to the Crown.  The mechanisms in the Town Planning and Development Act ‑ ‑ ‑

CALLINAN J:   Yes.  The Crown must thereafter hold it.  Unless the Crown legislates differently, the Crown must then hold it for parks and recreation – public parks and recreation.  There is clearly a benefit to the Crown, in these circumstances.  It may not affect the other point that has been raised by Justice McHugh and other members of the Court, but if in fact that point does not succeed, I think you have really to address what I have put to you with respect to Lloyd v Robinson.

MR TANNIN:   Your Honour, we are not suggesting there is not a benefit to the Crown in the sense that there is clearly land transferred.

CALLINAN J:   Yes, but if there is a benefit to the Crown, it may be that Justice Virtue’s characterisation of this as an expropriation is correct and it then ceases to be merely something done for a town planning purpose.

MR TANNIN:   Your Honour, the answer to that is that whilst there is a benefit to the Crown, there is also a benefit to the landowner.  That is the balance or the quid pro quo that ‑ ‑ ‑

CALLINAN J:   Who says there is a benefit to the landowner?

MR TANNIN:   The benefit to the landowner is a permission to subdivide which he did not otherwise have.  As part of that permission to subdivide, he is required ‑ ‑ ‑

CALLINAN J:   I understand that, but all of that may be on the premise which is put later in their Honours’ discussion – but it seems to be a premise for everything their Honours said – that this was not an expropriation because there was no public benefit.  If that is wrong, it may be that the foundation for the holdings in Lloyd v Robinson cannot any longer be sustained.  I am not saying that is right; I am just saying that it is something which you may have to confront.

MR TANNIN:   In our submission, the exercise of the section 20 power cannot be characterised merely in terms of whether a benefit to the Crown results.  What has to be understood is that there is a prohibition against subdivision.  The permission for subdivision is given ‑ ‑ ‑

CALLINAN J:   Look, Mr Tannin, the declaration of this as a reserve effectively sterilises the use of that land.  Ignore entirely the balance area which is to be subdivided.  There is an immediate impact, a deleterious impact upon the land the subject of the reserve.

MR TANNIN:   Your Honour, the reservation of the land ‑ ‑ ‑

CALLINAN J:   You cannot build on it, you cannot do anything.

MR TANNIN:   But the owner of the land can enclose us in a boundary fence.

CALLINAN J:   That is not much use, is it?  You still cannot use it.

MR TANNIN:   Given that it is a beach and given that ‑ ‑ ‑

CALLINAN J:   It is not a beach.  It abuts the beach, it is not a beach.

MR TANNIN:   It is an area of foreshore and it includes the beach.  In our submission, the owner as the Crown can guarantee access to the public.

CALLINAN J:   I have said what I think may be a problem, Mr Tannin.  I do not think you are responding to it, but anyway.

MR TANNIN:   The analysis in Lloyd v Robinson, in our submission, characterises in effect a bargain.  As part of that bargain there are two benefits that are identifiable, one to the Crown, but the other to the landowner.  Ownership to the Crown in this context grants something more than the reservation.  It guarantees in perpetuity the existence of that reserve with access to all for all time.  It makes the Crown responsible for that area.  That is a process which the legislature directly contemplated as part of the section 20 power.  It has been there since 1928.  It is by that power that the community plans so that public open space can be made a condition of subdivision, so that recreational reserves can be preserved as a condition of subdivision.

The fiscal impact of a requirement that the Crown compensate because it has had a benefit would be impossible to calculate, but it is patent that the Parliament so intended the power to operate.  There is no restriction on the State Parliaments making that kind of power.  That is the Durham Case.

The finding in the tribunal below and, indeed, the judge at first instance, was that this exercise of power was for a relevant planning purpose.  In our submission, the Full Court’s finding that it was not simply

derives from its misinterpretation of Lloyd v Robinson.  It found, in effect, that the Lloyd v Robinson power, that is the section 20 power, could not in fact be exercised validly in a context where the land is reserved.  In that, in our submission, it is wrong and in that error it has then led to the others.  I have set all that out in my submissions.  We do not resile from the construction we have urged the Court in relation to the special leave except that the other construction is open.  I have indicated what the costs implications are.

McHUGH J:   Thank you, Mr Tannin.  Yes, Mr Solomon.

MR SOLOMON:   If it please the Court, could I firstly deal with the issue which has arisen in the Court’s debate with my learned friend first? Could I firstly take you to section 36, as it stands, and I will then take you to the historical provisions and the extrinsic material? In looking at section 36, there are a number of subsections that I think need to be underlined, and the first is subsection (1) that has not been debated by your Honours with my learned friend.

What subsection (1) has in the words “as if”, that is, it is a deeming provision that one applies sections 11 and 12 of the Town Planning and Development Act to be read

as if – 

(a)      the Commission were the “responsible authority – 

and then (c):

those provisions included subsections (3), (3a), (4), (5) and (6).

Now, the amended compilation that I provided and circulated, the reason I amended what was annexed to the submissions was that I had not given proper effect to section 5(2) of the Scheme Act which to the extent there is a modification effected by the Scheme Act of a section of the Town Planning Act, the Town Planning Act does not apply.  So the six months from the date of reservation referred to in 11(1) of the Town Planning and Development Act is ‑ ‑ ‑

GUMMOW J:   Sorry, just say that again, 5(2)?

MR SOLOMON:   Section 5(2) of the Scheme Act says that to the extent the Scheme Act modifies the Town Planning and Development Act, the Town Planning and Development Act does not apply at all.

GUMMOW J:   It does not say that, does it?  It says:

The provisions of the Town Planning Act, except as modified by this Act, apply ‑ ‑ ‑

MR SOLOMON:   It is the same thing.  If they apply, except as modified, they do not apply.

McHUGH J:   No, it is not the same thing.

MR SOLOMON:   They apply, except as modified.  So, in other words – well, I have read it – if they are modified, they do not apply.  If I am wrong in that, the exception, nonetheless, excludes modified provisions from having application.  So if you look at section 11(1) of the Town Planning and Development Act and you look at section 36(1) of the Scheme Act, section 36(1) is modifying sections 11 and 12. They are to be read as if certain changes were made. So if they are to be read as if certain changes were made, and then the Town Planning and Development Act applies “except as modified”, the six‑month period in 11(1) must be read as modified by subsections (3), (3a), (4), (5) and (6) of section 36. That is why in the compilation I have written that the operation of 11(1), as modified, in my respectful submission, is that the time is a person making a claim within the time stipulated in section 36(5), certainly not six months after the time the land is reserved. That is simply giving effect to the construction mandate in section 36(1).

GUMMOW J:   But 11(1) is the entitlement, is it not?  This is the point Justice Callinan was putting to you.

MR SOLOMON:   Yes, there is a new entitlement ‑ ‑ ‑

GUMMOW J:   Then you come to 36(3), which is “no payment until”?

MR SOLOMON:   That is right, but that the entitlement itself is modified by 36(1).  The entitling section is to be read as modified in the way that 36(1) applies.  What one has, because of section 3 of the Scheme Act – section 3 of the Scheme Act requires that you read the Scheme Act as if it was part of the Town Planning and Development Act.  That is what I have said in my submissions.  It is like a part or a chapter of the Town Planning and Development Act, but to the extent that there is conflict or inconsistency it prevails.  So one would actually say, “Where is the entitlement out of this body of law that the Parliament creates”?  It has the one Act been there since 1928 – the Town Planning and Development Act.  It said, “You will now act as if there was a second body of law”, which is the Town Planning and Development Act with – where the Metropolitan Region Scheme Act applies, that read as an overriding chapter, if you will.

GUMMOW J:   What is the relationship between sections 3 and 5 of the Scheme Act?

MR SOLOMON:   Between 3 and 5?

GUMMOW J:   Yes.

MR SOLOMON:   Section 5 requires there to be a modification made by the Scheme Act to the Town Planning and Development Act, whereas 3 covers the situation where there is no express modification such as is made by section 36(1), but there is nonetheless conflict or inconsistency.

McHUGH J:   Yes, but at the highest, all that the operation of 36(3) does to 11(1) is to take out the “if” clause, does it not, takes out the conditional clause so that you read it:

Any person whose land or property is injuriously affected by the making of a town planning scheme shall . . . be entitled to obtain compensation in respect thereof from the responsible authority –

Then it is subsections (3) and (5) which regulate the making of the claim for compensation.

MR SOLOMON:   Yes, except this, with respect, your Honour.  Subsection (1) expressly applies sections 11 and 12 of the Town Planning and Development Act with modifications, but it expressly applies it such that it plainly in its terms confers the entitlement to compensation and then the deferral that is made by the other sections.

GUMMOW J:   No, 5(2) applies it and 36(1) gives content to the words of 5(2), “except as modified”.

MR SOLOMON:   Yes, the combination.  I accept that, your Honour, yes.

GUMMOW J:   The modification is not 36.

MR SOLOMON:   Yes, I accept that, with respect, your Honour.  When you then come to 36(3), I think there are a couple of words in the preamble to (3) that should be underlined.  They are repeated in 6, and that is “land has been reserved for a public purpose”.  That is the circumstance and the limited circumstance and this is within it.  It is not contended it is not.  It is “land has been reserved for a public purpose” and those words are repeated in (6)(a).

I think your Honour Justice McHugh mentioned to my learned friend an issue about section 12 of the Town Planning and Development Act, but section 12 of the Town Planning and Development Act would not exclude in claims for compensation under that Act a reservation for a public purpose from an entitlement to compensation for injurious affection.  So there is no suggestion, and my learned friend does not make a suggestion, that there is anything in the limitations on compensation.  For instance, one does not get compensation merely for rezoning under the Town Planning and Development Act.

The limitations in section 12, however, do not exclude reservation for a public purpose from the class of matters for which there is a claim for compensation under that Act.  So the same limitation is brought in in the preamble in 36(3) and 36(6).  It implies the operation of section 12 of the Town Planning and Development Act.  It limits an entitlement to where land has been reserved for a public purpose.  “No compensation is payable . . . until”, that is plainly temporal.  It is not “unless”.  There are then throughout the section, with respect, two alternative streams.  There is the stream of first sale and there is the stream of application which is made and they are all expressed disjunctively.  There is, with respect, no possible implication that one would read into this whichever first occurs, which would ‑ ‑ ‑

McHUGH J:   Why not?

GUMMOW J:   You want to sever whichever later occurs, do you?

MR SOLOMON:   I just want to read it as two alternatives, without an implication of whichever first occurs.  The effect of that is whichever later occurs.  If one looks at each subsection, in (3), there are two matters: 

(a)the land is first sold following the date of the reservation; or

(b)the responsible authority refuses an application made under the Scheme for permission to carry out development on the land or grants permission to carry out development on the land subject to conditions that are unacceptable to the applicant.

Then, under (3a), there are the words:  “is payable only once”.  If it was whichever first occurs, the words “only once” would be otiose: 

Compensation for injurious affection to any land is payable only once under subsection (3) and is so payable –

and then (a) and (b) each have the preposition “to” –

(a) . . . to the person who was the owner of the land at the date of reservation; or

(b) . . . to ‑ ‑ ‑

McHUGH J:   Yes, but that is necessary because you could have a situation where the owner at the date of sale was not the owner of the land at the date of reservation.  For example, he may have taken under a will, in which case the person who then sold would not be entitled to compensation.

MR SOLOMON:   That is a remote possibility, with respect, your Honour.

McHUGH J:   It is not a remote possibility.

HAYNE J:   Death is not.

GUMMOW J:   It is the only certainty in life.

MR SOLOMON:   For this reason, if that example applied, the person who was the owner at the date of the land reservation – their successors, for instance, under inheritance law, would stand in their shoes.  But what the legislature has plainly had in mind are completely different persons in (3a)(a) and (3a)(b), that is:

(a) . . . the owner of the land at the date of reservation; or

(b) . . . the person who was the owner of the land at the date of application. 

At the very least, there is relevant ambiguity here that will take one to extrinsic material to ascertain the Parliament’s intention.  Then, when one looks at subsection (5) and the timing, the limitation on time is:

6 months after [either] the land is sold or the application for permission to carry out development on the land is refused or the permission is granted subject to conditions that are unacceptable to the applicant.

Then, under subsection (6), it fixes the maximum amount of compensation.

McHUGH J:   Yes, but your argument is leaving out the important word “making” in section 11(1).  That is what triggers the right to compensation:

Any person whose land or property is injuriously affected by the making of a town planning scheme shall . . . be entitled to obtain compensation ‑ ‑ ‑

MR SOLOMON:   That is all right.

McHUGH J:   So the right to compensation is fixed by the person whose land was “affected by the making”.

CALLINAN J:   Well, any owner is “affected by the making”, because “the making” has a continuing effect.

MR SOLOMON:   That is right.

McHUGH J:   That is what you have to argue.

MR SOLOMON:   What about 36(6)(b)? Section 36(6)(b) is, with respect, the answer to this, your Honour, because 36(6)(b) deals with how the compensation is assessed. If the argument that your Honour is putting to me were correct, one would be looking to assess at the date of the reservation, that being the date that harm was caused by the actual reservation, and yet ‑ ‑ ‑

McHUGH J:   I think that is a weak argument, Mr Solomon.  After all, this is a deferral, this is a deferred compensation.

CALLINAN J:   Mr Solomon, there is another possibility too, that there could conceivably be a sign to a purchaser whose mind was totally unaffected by the existing of the reserve, because that purchaser might have in mind an entirely different use which does not involve any application for subdivision at any stage.

MR SOLOMON:   Indeed.

CALLINAN J:   So that although you would think most prudent purchasers would want to get a discount because of the existence of the blight, if I can call it that, or the burden on the land, it is not inconceivable that there would be a purchaser who would be prepared to pay, upon the basis that that purchaser did not intend, quite welcomed the idea of a public reserve ‑ ‑ ‑

MR SOLOMON:   Yes, there is a further ‑ ‑ ‑

HAYNE J:   Well, that then engages subsection 4, does it not? 

MR SOLOMON:   There has to be a – well, the reasonable sale and the notice point - are your Honours referring to 4(b)?

HAYNE J:   But sold at a lesser price.

MR SOLOMON:   Yes, and that is the next point.  This was a scheme brought in in 1963 for the express purpose of regulating the entire metropolitan region for up to half a century.  Now, there was land reserved, like this land at the southern end of the metropolitan region that was essentially sandhills at the time.  It was a long‑term plan.  There may well have been sales in the 1960s when it was still zoned rural, both under the metropolitan region scheme and any local town planning scheme.

There was no necessary, significant blighting in the sense that there was no significant aspiration to develop, or immediately develop, all land in the metropolitan region in 1963 and the scheme report makes that clear. It was a very long‑term process and what the scheme report said was this, that the Act as it was when it was passed in 1959 which gave rise to the preparation of the scheme, and the members of the board that prepared it, then prepared their report, if one looks at how the Act was in 1959 when they prepared the scheme - that is at pages 77 and 78 of your Honours’ appeal book - and that was why the report recommended the amendments that we are now dealing with because they came to the Act where it was in very brief terms in section 36, as it had been passed at the time, as I say, the original Act authorised the preparation of the scheme and the report and objections and consideration of it, and ultimately, approval of it by the Executive Government ‑ ‑ ‑

GUMMOW J:   Yes, well then the changes were made in 1962.

MR SOLOMON:   That is right.  The changes were made before the scheme started and based on the scheme report, and so it is what is said in the scheme report about what this change was, because those who wrote the report said, conceivably, every person in the metropolitan region whose land is marked green on the scheme maps, can say their land is injuriously affected as soon as the scheme comes into force and the State cannot afford such amounts.  We must, therefore, defer compensation entitlements until these events happen, and I will take your Honours to what is said in the scheme report about that, that it is ‑ ‑ ‑

GUMMOW J:   Anyhow, the mischief that they feared was an immediate and accelerated, if you like, liability to pay public money.

MR SOLOMON:   That is right.  They established a fund.  They established a tax on all land in the metropolitan region with still exists.  It goes out with land tax assessments.  The whole of the metropolitan region is taxed to produce a fund to pay for these acquisitions ‑ ‑ ‑

GUMMOW J:   In postponing the original, as it were, impact of 11(1), you have to say they bit off their nose to spite their face because they encounter this later liability that arises in – when did your client buy this land?

MR SOLOMON:   1992.

GUMMOW J:   1992.

McHUGH J:   What do you say about the operation of subsection (5)?  Your submissions seem to assume that once an application is refused your right to compensation is not necessarily spent; you can continue to bring applications and then claim compensation.  Take a case where somebody brings an application and it is refused or it is subject to conditions.  Now, subsection (5) says you have six months to claim compensation, at least on that refusal.  Now, is it your submission that you can let the six months go by, several years later make another application and you are in business for compensation again?

MR SOLOMON:   No, but with one exception, that if your application was not made in good faith in terms of the final words of (4)(b), then you did not trigger anything.  In other words, if you did not make – and the point of good faith is again part of the deferral, that what the legislature has said is you will only get compensation when you are genuinely impeded in wanting to carry out a particular development.  You cannot just put on what one might call a dummy application to trigger an entitlement to claim compensation.  You have to have a genuine good faith intention to do something.  If you have done that and it is refused or unacceptably conditioned, then time runs on you, in my respectful submission.  Six months runs and if you do not make the claim, you are statute barred, you are time barred.

McHUGH J:   Forever?

MR SOLOMON:   Yes.

McHUGH J:   Well, let us assume that you make a claim in bad faith.

MR SOLOMON:   Well, time does not run.

McHUGH J:   Why not?

MR SOLOMON:   Well, because you have not made an application of a type which could possibly satisfy the entitlements ‑ ‑ ‑

McHUGH J:   That is not what it says.  It says:

where the responsible authority refuses an application . . . the person lawfully appointed to determine the amount of compensation shall be satisfied that the application was made in good faith.

MR SOLOMON:   Yes, but the preamble, with respect, your Honour, to subsection (4) is that before compensation is payable the person has to be satisfied that – we treat it, and I do not understand my learned friend to submit differently, that it is a condition on triggering an entitlement that you have made a development application in good faith.

McHUGH J:   I am not sure that it is a condition of triggering an application.  It is certainly a condition of obtaining compensation.  It is not the same thing.  It may have some importance in your case, may it not, because you made an earlier application?

MR SOLOMON:   Yes, the client did, and it was not ‑ ‑ ‑

McHUGH J:   And it was not made in good faith.

MR SOLOMON:   That was accepted, we concede.  Both parties accepted that.  It was just a single dwelling, more or less, on the whole of the reserve and it was just a trigger.  It was after that that the State Supreme Court decided in a couple of cases that (4)(b) is an important condition on the entitlement to claim compensation.

GUMMOW J:   How many purchases were there, do we know, intervening between 1962, say, and 1992, of the land subject to the reservation?

MR SOLOMON:   I am just not sure if that is what is before us.

GUMMOW J:   Presumably, the price had been affected each time.  Was there no title search?

MR SOLOMON:   There may have been a title search before the Tribunal, but most of that material has not been produced in the appeal book, your Honour.  I did appear at the Tribunal, but I just cannot remember.  I cannot give you a definitive answer from the papers, your Honour.

HAYNE J:   It leads to the difficulty about what hitherto has been the mutual assumption that, but for the condition on permission to subdivide, section 36 might properly have been invoked. Once you challenge that, we are off into an area where the facts are not explored in the courts below.

MR SOLOMON:   That is right.

HAYNE J:   All that we know is that this respondent acquired its land in 1992.

MR SOLOMON:   Yes.  If that was the end of it, as far as we are concerned ‑ ‑ ‑

GUMMOW J:   Things had been moving for some years in this area before 1992, had they not?

MR SOLOMON:   In that part of Perth?

GUMMOW J:   Yes.  You both know better than I do.  There had been activity in the sandhills, had there not, for some time? 

HAYNE J:   And also some development.

MR SOLOMON:   Mr Giles points out to me that the Tribunal found at paragraph 30 at page 175 that as late as 1990, its zoning in the metropolitan region scheme was still “Urban Deferred”.  I suppose your Honours are familiar with things like that.  It has probably gone from rural to an intermediate urban deferred, which would ultimately go to urban.  So, in 1990, one might infer from what the Tribunal has said there that it was about to become ‑ ‑ ‑

GUMMOW J:   I am sorry, what page was that?

MR SOLOMON:   Page 175.  That is paragraph 30 of the Tribunal’s reasons. 

HAYNE J:   Justice Heydon points out to me at paragraph 29:

Its history –

that is, the history of the site –

can be derived from the papers attached to the witness statements –

which are not in the appeal book, but may well have been part of the record below.

MR SOLOMON:   Yes.  That was my point, your Honour.  There may have been a title search that showed historical ownership.

CALLINAN J:   Mr Solomon, do you have an alternative argument that even if the respondent’s view of the Act is correct, you do not have a claim for compensation?  Let us assume you do not have a valid claim for compensation.  Was it a legitimate planning purpose?

MR SOLOMON:   That is always my alternative argument.

CALLINAN J:   Because you really have a finding to that effect in the Full Court, have you not?

MR SOLOMON:   Yes, indeed.

CALLINAN J:   At paragraph 83, page 257.  It seems to me that they do not go to an implementation of planning policy at all?

MR SOLOMON:   Yes, but that is all ‑ ‑ ‑

CALLINAN J:   The real reason was to make sure, if you like, to put it beyond doubt that they could get it for nothing, and that is not a legitimate planning purpose.

MR SOLOMON:   Yes.

CALLINAN J:   And you have a finding in the Full Court to that effect?

MR SOLOMON:   Yes, which is based on the Tribunal’s finding that the condition had only two purposes: one being an administrative machinery purpose of creating the reserve as a separate lot on a separate title, which is section 20A; and the second - as the Tribunal put it very clearly at paragraph 8 of the reasons, just prior to the passage I was referring your Honours to a moment ago, paragraph 8, page 167 - the Tribunal, with respect, did not shirk from what they said they were doing. The second intended effect of the condition is ‑ ‑ ‑

GUMMOW J:   I know, but what were they doing in terms of administrative law?

MR SOLOMON:   In terms of administrative law, they were reviewing de novo the Commission’s decision.  That is section 52 of the Town Planning and Development Act.  It is a merits review, de novo, was what they were doing.  I think my learned friend and I are at even on that.  Justice McLure wrote about that and nobody is disputing that it was a merits review, de novo, but what they said is its intended effect is ‑ ‑ ‑

GUMMOW J:   Just a minute, section 20A of the Town Planning Act contemplates a condition, does not it, for vesting in the Crown as a condition “for the purpose of conservation” et cetera.  How can you say it is not a Town Planning purpose - 20A?  We have to look ‑ ‑ ‑

MR SOLOMON:   What 20A does is, as the Full Court said, when the Commission has approved a subdivision shown on a diagram, on condition that certain portions shall vest, then it really automatically vests once it is shown on the diagram in that form.  In other words, it is a machinery provision to just give effect to the underlying decision.

GUMMOW J:   And section 20C?

McHUGH J:   That is not right, though, is it, because an express condition about vesting was laid down, but somehow or other seems to have been overlooked or waived or something has happened.  You would be hard pressed, given the terms of 20A to say that the original condition was invalid, would not you?

MR SOLOMON:   No.  It was imposed for the same purpose.  There was no suggestion ‑ ‑ ‑

HAYNE J:   That argument seems to say that 20A just sits there, can never be invoked, and that cannot be.  Section 20A contemplates that these conditions can exist.  What is the circumstance in which they can exist?

MR SOLOMON:   Section 20(1)(a) is the section my learned friend relies upon which is the section which allows for the condition.  Section 20A says, where there is such a condition, and there is an area of land appearing on a diagram, pursuant to that condition, the registrar simply gives effect to it.

GUMMOW J:   It assumes there will be such a valid condition.

MR SOLOMON:   Yes, it is machinery provision to implement.

GUMMOW J:   That is right.  Because it assumes that there will be such a valid provision, it is a matter to be taken into account in accordance with ordinary principles in indicating the subject scope and structure of the Act to throw light on section 20.  It is an adverse light from your point of view, is it not?  It does not help you.

MR SOLOMON:   It neither helps nor hinders, with respect.  All it shows is that there is the possibility that 20(1)(a) may give rise to a valid condition requiring vesting of land.  What 20A does not say is that there may be a condition that requires vesting of land free of compensation.  It does not say anything about whether it is a valid condition to vest land which is free of compensation.

CALLINAN J:   For the purposes of avoiding payment of compensation rather than for a legitimate town planning purpose.  You say 20A still requires that there be a legitimate town planning purpose with respect to the ceding of the land.

MR SOLOMON:   Yes.

CALLINAN J:   And there may well be cases where it does further some town planning end.

MR SOLOMON:   Sure.  That is what Lloyd v Robinson was really about, that ‑ ‑ ‑

GUMMOW J:   Wait a minute.  Do you say there is no town planning purpose here?

MR SOLOMON: No. The only purpose was ulterior as found by the Full Court and, as said by the tribunal at paragraph 8, the only purpose was to defeat the operation of Part V relating to compensation in the Metropolitan Region Town Planning Scheme Act.  That is what ‑ ‑ ‑

GUMMOW J:   I know they use this word “purpose” but what do they mean?

MR SOLOMON:   The tribunal?

GUMMOW J:   Yes.  Is it mala fide, is it?  We are in the area of administrative law.

MR SOLOMON:   That is right.

CALLINAN J:   Or are you merely saying that the tribunal did not apply its mind to town planning purpose; it simply stopped at saying getting it for nothing was a legitimate purpose?

MR SOLOMON:   No, the tribunal ‑ ‑ ‑

CALLINAN J:   Do you put it in the alternative, either that it was mala fides or some species of mala fides, or that the tribunal simply never considered what it should have considered, that is a proper town planning end to the requirement that the land be ceded?

MR SOLOMON:   That is right.  For instance ‑ ‑ ‑

GUMMOW J:   Where does this expression “town planning purpose” come from, by the way, in this Act?

MR SOLOMON:   It does not in this Act, your Honour.  It is another of what I suppose your Honour would call folklore.

GUMMOW J:   More folklore, yes.

MR SOLOMON:   Where people have consistently ‑ ‑ ‑

McHUGH J:   We have used this expression in cases like Thompson v Randwick Municipal Council and cases like that.

MR SOLOMON:   On the good faith side.  On planning policy, as Justice Walsh’s judgment in Allen Constructions, which was endorsed in the joint judgment in Bathurst Council v PWC Properties.

CALLINAN J:   Musgrave Shire Council - King Ranch is another one.

MR SOLOMON:   Yes.  As his Honour Justice Walsh said in Allen, planning policy is derived from the Act and not from some extraneous notions of what planning policy might be.  I noticed in paragraph 14 of my learned friend’s reply ‑ ‑ ‑

GUMMOW J:   All you are talking about is the subject scope and purpose of the Act.  It is just a convenient label, that is all.

MR SOLOMON:   Indeed it is.  There is a lot of reference to the House of Lords decision in ‑ ‑ ‑

HAYNE J:   Just before you go to that, the land is subject to reserve.  It is a reserve, true?

MR SOLOMON:   Yes.

HAYNE J:   It is a reserve for particular purposes?

MR SOLOMON:   Yes.

HAYNE J:   Those purposes are relevantly proper town planning purposes, are they?

MR SOLOMON:   The answer to the question is yes but ‑ ‑ ‑

HAYNE J:   It has to be, has it not?

MR SOLOMON:   Yes.

HAYNE J:   And then you focus on the mechanism of acquiring title to the land and say, what, the mechanism for acquiring is not for a proper town planing purpose?  But we are in a different realm of discourse, are we not, at that point?

MR SOLOMON:   What I say to that, your Honour, is this, that section 42 of the Scheme Act makes it an offence to use the land differently from its reservation, so there are criminal sanctions.  Clause 13 of the scheme itself, that my learned friend has taken you to, provides that:

Except as provided in Division 2 of this Part no person shall commence or carry out any development on reserved land, other than the erection of a boundary fence, without first applying for and obtaining the written approval of the Authority to do so.

So my point about planning purpose is the entire planning purpose is already achieved by the reservation.  We cannot do anything with the land.  So that the sole purpose, or, as Justice Olsson writing for the Full Court said, a major component of the purpose of imposition of this condition was purely fiscal.  Because the reservation itself meant that we could not do anything with it inconsistent with its reservation as a reserve, there is no valid planning purpose to make us cede to freehold.  After all, the Metropolitan Region Town Planning Scheme Act binds the Crown anyway.  So until the land was reserved in another way under that Act, the fact that we cede the land to the Crown would not in any way change the uses of it ‑ ‑ ‑

CALLINAN J:   And you never made any application to change the use of it in any way.

MR SOLOMON:   We never did anything wrong with it at all.  There was no evidence that we were doing things inconsistent with the reservation, or threatening to do things inconsistent with the reservation.

CALLINAN J:   It might be that the compensation would be very, very small, in fact.

MR SOLOMON:   The answer to that, your Honour, is actually this, that that could well be so, but the funny thing about this reservation – and it is in my written submissions – this was created – this is an historical anomaly.  It is 200 metres from first vegetation that it goes back, but the current State planning policy which is in the appeal book is that generally the setbacks are 100 metres.  So we actually have an historical anomaly.  We are required to cede 200 metres, when that is not what policy 6.1 says.  It says generally 100 metres and the tribunal ‑ ‑ ‑

CALLINAN J:   We do not have to concern ourselves with that.

MR SOLOMON:   No, but ‑ ‑ ‑

McHUGH J:   But there was a reason, was there not?  I cannot remember – there was a specific reason why it was 200 metres in this case.  I think it was because of location or something, was it not?

MR SOLOMON:   No, there is no reason at all.  It is a green mark on a map that was done 40 years ago.  When one comes to the scheme report, one will see that those who wrote that map – it was a map of the whole of the Perth metropolitan region.  They did not have the facilities available to them to closely examine everything and they took it that there would be very careful consideration when development applications were made as to whether or not to approve them.  If they were approved, they would effectively be giving up the reservation, because they understood – then there would be no trigger because they allow a development and they will never refuse it in the future. 

So it was a very provisional plan covering the whole metropolitan region.  In fact, over the 40 years, the 200 metres that are shown on it is 100 metres more than current planning policy.  I mention that in answer to your Honour Justice Callinan’s point, that if the reservation were of an area which one would generally expect under usual planning conditions to be required under a valid condition to give up – that is to say if the land was not reserved under this scheme and one applied to develop the land, including the reserved land, one would expect a condition, and a valid condition, to create a public reserve for 100 metres, and one would not have any claim for compensation with respect to that.

Our complaint is really about the back 100 metres, and the Tribunal noted that at paragraph 43 of their reasons.  If I could just mention that, at page 179, paragraph 43:

The MRS reservation is approximately 200m.  Counsel for the Appellant stated that were it not for the fact that the foreshore reserve has at all times been 200m approximately, the Appellant would be appealing against a reserve wider than 100m.  Commission Policy DC 6.1 “Country Coastal Planning Policy” although not directly applicable, provides in section 3.6 that a setback of 100m from a stable sandy shore is the guideline.

So that is actually where the claim for compensation will be pursued – with respect to that back 100 metres – in this case, although I accept that there may well be cases where there will be very limited compensation because one would expect a valid planning condition to give up land if it were for a proper purpose.

GUMMOW J:   Where do we find the merits review provision you referred to, Mr Solomon?

MR SOLOMON:   Section 52, I believe, your Honour, in the Town Planning and Development Act. 

GUMMOW J:   There is a general jurisdiction in 44.  There does not seem to be much explanation about the nature of the appeal.

MR SOLOMON:   I am just turning it up in my submissions, because I have given your Honour the wrong number.  I know Justice McLure mentioned it and I mentioned it in – 54B, sorry.

GUMMOW J:   That is to the Supreme Court.

MR SOLOMON:   No, sorry.

GUMMOW J:   It has to be a question ‑ ‑ ‑

MR SOLOMON:   It is in paragraph 4 of my submissions referring to footnote 2, 199 at 77 in the appeal book.  Sorry, pages 215 to 216.  Well, their Honours referred to section 52 there as well, so, unless that has been amended, that was the section I had in mind.  I think it must be 51.  I think that when I wrote the submissions I took her Honour’s reference at paragraph 77 to section 52 and just copied that.  But I think her Honour is referring to section 51, that it is a determination under 51 – well, the various subsections – deals with each appeal with as little formality and technicality, determines each appeal with speed, as requirements of the Act, rules and regulations permit.  I think that is ‑ ‑ ‑

GUMMOW J:   There is not a provision like there is in the Administrative Appeals Tribunal Act.

MR SOLOMON:   Like section 43 in that Act?

GUMMOW J:   Yes.

MR SOLOMON:   Yes.

GUMMOW J:   It is important - this is an appeal from what, in terms of the sections in Part V?

MR SOLOMON:   It is a right that is created to appeal from a decision of the appellant.  That is right.

GUMMOW J:   It talks about the Minister in it.

MR SOLOMON:   Administrative process.  For instance, there is express power under section 8A of the Town Planning and Development Act to appeal from discretionary decisions, et cetera.

GUMMOW J:   Section 8A, that is to the Minister.

MR SOLOMON:   I am sorry.  Then, yes, okay the ‑ ‑ ‑

GUMMOW J:   How do you get straight from the permission to the Tribunal?

MR SOLOMON:   Tribunal?

GUMMOW J:   Tribunal, yes.  That is what has me foxed at the moment.

MR SOLOMON:   Section 26, the applicant “may appeal”.

GUMMOW J:   Yes, “to the Minister”.  There has been no involvement of the Minister here ‑ ‑ ‑

MR SOLOMON:   No.  There is a right of appeal either to the Minister, which is subject to change, but a right of appeal either to the Minister or the Tribunal, and there were regulations which provide that commencement of one brings to an end the other.  The Tribunal is established under Part V ‑ ‑ ‑

GUMMOW J:   Where is it?

MR SOLOMON:   And the regulations under the Act give a right of appeal either to the Minister or the Tribunal as it stood at the relevant time and one elected to go to one or the other, and commencing one ‑ ‑ ‑

GUMMOW J:   You say all this, but where do we see it?

MR SOLOMON:   I do not know if it is produced.

GUMMOW J:   We had better be provided with it at some stage, that is all.

MR SOLOMON:   I will undertake to provide that after the hearing.

GUMMOW J:   Yes.

CALLINAN J:   I would like a complete copy of both Acts and the regulations as soon as possible.

MR SOLOMON:   Yes.  That particular provision that extinguishes an appeal to the Minister by commencing one before the Tribunal and vice versa is insubordinate legislation.  Where we were was, without question, your Honour, we elected to go to the Tribunal and we were therefore under Division 4 starting at section 47 and following.

CALLINAN J:   Mr Solomon, there is an adoption by Justice Stephen in The Queen v Toohey; Ex parte Northern Land Council (1980‑1981) 151 CLR 170 at page 203 of something said by Lord Denning and Lord Justice Roskill in Congreve v Home Office “that a Minister’s discretionary power” – I do not see why that should not apply to a commissioner or a town planning authority “must be uninfluenced by any ulterior motives”.

MR SOLOMON:   Yes.

CALLINAN J:   So that it may be that if that is correct, any ulterior motive may taint the decision.  You have a finding of the Full Court in that ‑ ‑ ‑

MR SOLOMON:   The joint judgment in Randwick in this Court would suggest that it certainly does not have to be the sole purpose – I think a material tainting point.

GUMMOW J:   How did Justice McLure, having referred to Thompson, nevertheless decide the way she did?

MR SOLOMON:   Just before I answer that, your Honour, could I just mention section 50 of the Act in answer to your question a moment ago?

GUMMOW J:   Yes, thank you.

MR SOLOMON:   I was just going to say in reference to section 50, your Honour, I asked my learned friend and he cannot quite remember it either, but I can provide it after, but in this Court’s judgments in recent years, Allesch v Maunz and the other case, there is reference to an industrial law decision in the High Court where by analysing a section such as section 50 – all I can think of is the case name starts with a “B” – I cannot get it in my mind – but where a tribunal has power to affirm the decision, vary the decision, set aside the determination, et cetera, a list of powers such as in section 50, that that is indicative of a merits review de novo.  I will provide that reference.  Your Honour, the answer to the next question, how did ‑ ‑ ‑

McHUGH J:   It is Brideson.  Is that the case you were ‑ ‑ ‑

MR SOLOMON:   Yes, thank you, your Honour.

McHUGH J:   Yes.

HAYNE J:   Has it come to this, Mr Solomon, that you say there was an ulterior purpose of defeating an entitlement to compensation?  Is that step one?

MR SOLOMON:   I am sorry, your Honour.  Could you just put that question to me again, please?

HAYNE J:   There was an ulterior purpose, that purpose being the purpose of defeating an entitlement to compensation?

MR SOLOMON:   Yes.

CALLINAN J:   Or making sure that there is no entitlement?

MR SOLOMON:   Yes, on the basis that as we ‑ ‑ ‑

CALLINAN J:   Even if it were arguable that you were not entitled, it is strongly arguable it was intended to put that beyond any doubt, to avoid the argument, as it were?

MR SOLOMON:   Yes.

HAYNE J:   That assumes arguability.  Let us leave that aside for a moment.  Step two has to be that there is an entitlement to compensation otherwise.  Is that right?

MR SOLOMON:   No, I would adopt, with respect, or put what Justice Callinan was saying:  there has to be an arguable entitlement.

HAYNE J:   Let us look at arguability a moment.  Arguability depends upon the proper construction of the Act.  Is that right?

MR SOLOMON:   Obviously, yes.

HAYNE J:   There is but one proper construction, is that right, namely the construction which is determined by a court or the court?

MR SOLOMON:   Or this Court ultimately, yes.

HAYNE J:   Yes.  If it happens to have been determined before the events which give rise to the impugned action, there may be no doubt about it.  Is that right?

MR SOLOMON:   That is right.

HAYNE J:   But the fact that it may be determined after that event does not deny the fact that there is but one proper construction of the Act.  Is that right?

MR SOLOMON:   That is true.

HAYNE J:   Yes.  That seems to present rather a considerable difficulty in the way of the arguability analysis, does it not?

MR SOLOMON:   No, because until those events happen there may be a valid claim for compensation that may be made ‑ ‑ ‑

HAYNE J:   There may be an arguable claim, but the question of whether it is valid would be determined in the course of the determination of that application, would it not?  It would have to be.

MR SOLOMON:   The application on the validity of the condition?

HAYNE J:   The application for compensation would necessarily raise the question whether the compensation was properly payable.  Is that right?

MR SOLOMON:   Yes, it would.

HAYNE J:   So the question then becomes, is there an entitlement to compensation?  Correct?

MR SOLOMON:   No, the question becomes – once the land is ceded, there can never be a claim for compensation because there will never be a development application.

HAYNE J:   I understand that.  There can be no defeating unless there is otherwise an entitlement.  Is that right?

MR SOLOMON:   No, because what the defeating is is the ability to run the claim as owner, as a person who makes an application which is refused or ‑ ‑ ‑

GUMMOW J:   Ability to make a claim that is going to fail?

MR SOLOMON:   Hindsight is a wonderful thing but ‑ ‑ ‑

GUMMOW J:   Yes.

HAYNE J:   Yes, the courts deal in it constantly, Mr Solomon, especially when it comes to the law.

MR SOLOMON:   That is why valid compromises of arguable claims are enforced.  There is always uncertainty and the giving up of an entitlement to make a claim, albeit that it might suffer the uncertainty of a new argument in the ultimate Court of Appeal – it happens.  It happened today.

HAYNE J:   Then, at least on one view of the case, the question becomes, does the entitlement to compensation extend to the case where there is an acquisition, which leads you back to the interrelationship between section 20 and section 36.

MR SOLOMON:   The answer to that is the term of the condition itself required ceding without payment or compensation, so that ‑ ‑ ‑

HAYNE J:   I understand that, and that can be a defeating of an entitlement to compensation if, and only if, there is some contrariety, conflict, contest – call it what you will – between the two provisions.  I thought that was central to your argument.

MR SOLOMON:   Not really, because if the only point is to defeat something which perhaps has no real existence, because ultimately there is no right to compensation, that does not validate ‑ ‑ ‑

GUMMOW J:   Wait a minute.  You keep using this word “ultimately”.  That is just not the relevant jurisprudential framework, is it?

MR SOLOMON:   No, I am sorry, your Honour.  If the point of the condition is to eliminate any possible argument about a claim for compensation being made, because the land is ceded before the landowner can make an application, if that is its purpose, even though there may ultimately be no possible valid claim for compensation, does not turn that condition into one with a valid planning purpose.

CALLINAN J:   Is that not the point, that it does not matter – I am only putting this as a suggestion – it may not matter whether compensation is payable or not?  That does not relieve the Commission of the obligation to apply its mind to town planning considerations.  It cannot just apply its mind to the question of whether this can be obtained for nothing or not.  It has to apply its mind to town planning considerations insofar as they relate to that application.  You would say whether the council gets it for nothing or not is not relevant to town planning purpose.

MR SOLOMON: Because there was none other identified, that the only purpose that was identified is that in paragraph 8 of the Tribunal’s reasons. Its intended effect was to defeat the operation of those provisions. If it turns out those provisions ‑ ‑ ‑

HAYNE J:   The moment you put the notion of “defeat the operation of” you are making assumptions, you are proceeding from premises that that which is done is not open.

MR SOLOMON:   All I was actually trying to do, your Honour, was repeat the identical words that the Tribunal has used.

HAYNE J:   I understand that.  What I am putting to you is that you have to look a bit deeper than simply parroting the words that the Tribunal has produced.

McHUGH J:   It is getting close to a quarter to 1.  Over the lunch hour you may have to give some thought to whether or not you need a notice of contention or perhaps, worse still from your point of view, an application for special leave to appeal insofar as you seek to rely on some misdirection by the Tribunal of its functions.  Do you follow?  Justice Callinan put to you a proposition, which you seem to adopt, that the Tribunal was bound to consider certain matters.  Now, that is not really a notice of contention point and it is not really an answer to the appellant’s submissions.  On one argument, you say, given the findings of the Tribunal, the condition was invalid, but I understood you to adopt an argument that, in any event, even if it was arguable that it was a planning condition, the Tribunal did not properly consider the various aspects that were relevant to that.

MR SOLOMON:   I do not think it goes beyond what Justice Olsson wrote, your Honour.  Justice Olsson dealt with the case on three bases.

McHUGH J:   That may be, but just give some thought to it, Mr Solomon. 

MR SOLOMON:   I will do.

CALLINAN J:   When you do look at ground (iii)(b) of the appellant’s grounds of appeal on page 269 it may be - I am not saying that it does - that efficiently raises the question to enable you to respond to it.  I am not saying it necessarily does, but just look at that.

MR SOLOMON:   I took it that I was here arguing on the basis of supporting what the Full Court’s reasons were that there was no planning purpose and, thirdly, that there was no condition imposed in good faith.  The Full Court decided on both of those bases ‑ ‑ ‑

GUMMOW J:   Assume that they are wrong, that there was no planning purpose whatever, that is not necessarily an end to your case, is it?  There may have been an improper purpose as well.

MR SOLOMON:   Yes, that is what they found, their Honours found.

GUMMOW J:   Is that presently encompassed by your support of the Court of Appeal of the Full Court?

MR SOLOMON:   Inasmuch as I took it that their Honours found both ways that there was no planning purpose or alternatively, if there was, it was not imposed in good faith and relied upon, ran with, et cetera ‑ ‑ ‑

GUMMOW J:   What it all came down to is they had to have regard to relevant purposes and they had to ignore irrelevant considerations.  The relevant consideration is those that have planning purpose, maybe they had regard to that.  You say they had regard to an irrelevant and, therefore, illegitimate purpose, the other purpose.

MR SOLOMON:   That is right, your Honour, that is what Justice Olsson said was his third basis for decision, that the decision was not in good faith which was having regard to ulterior purpose.  Paragraph 96, page 260 in the appeal book is the final part of his Honour’s reasons where he says that:

At the very least, the Tribunal reasons evidenced, by clear inference, the existence of a major ulterior or extraneous purpose ‑ ‑ ‑

McHUGH J:   That may be sufficient for your purpose.

MR SOLOMON:   Yes, that was the third basis that the Full Court decided the matter on, your Honour.  If it please, your Honours.

McHUGH J:   Yes.  Very well, we will adjourn to 2.15.

AT 12.47 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.15 PM:

McHUGH J:   Yes, Mr Solomon.

MR SOLOMON:   May it please your Honours, I wanted to take you to the extrinsic material that is referred to in my written outline which is section 11 of my written outline.  You will see at the end of section 11, that is, 11.6.2, that I referred to that extrinsic material to demonstrate that there was no intention expressed in the report, that is, the Metropolitan Region Scheme Report that is in the appeal book that I will come to presently, that:

the actual areas reserved for public purposes in the MRS would be acquired –

and that there was no intention that they would be acquired without compensation.  There are some elements of that extrinsic material – and in particular I am referring to paragraph 11.4.2 – that are very material to the issue that arose this morning as to whether there is a right in a person who is not the owner of the land at the date that it is reserved under the scheme to claim compensation.  You will see at 11.4.2 a footnote 25 which refers to paragraphs 21 and 22 and 183 of the report which is at appeal book 85 and appeal book 121.  One would conveniently, for the purposes we are now looking at, include paragraph 20 as well as 21 and 22 to that list. 

If one goes to paragraph 20, which is at page 85 – as I say, this is the report which results in a second reading speech that implements it, to bring in the changes to section 36 before the scheme came into operation. The authors of the report at paragraph 20 say this:

It might be said that upon the coming into operation of the Scheme property subject to reservation suffers an immediate depreciation of value insofar as its development is subject to a particular degree of control and its tenure is limited in time.  Sec. 11 of the Town Planning and Development Act appears to envisage that the total amount of such depreciation might have to be met by way of compensation for injurious affection.  It is a matter of conjecture as to what amount of money would be likely to be involved, but it might well be quite beyond the financial resources of the Authority –

the Authority was the predecessor of the Commission –

to meet it in face of its widespread commitments to acquire property reserved.  The depreciation in value is, however, in many instances hypothetical.  It becomes real only when property is sold at a value depressed by the reservation, or when development is frustrated by a refusal of consent under the Scheme. 

The Authority has accordingly submitted that liability for compensation for injurious affection be limited to two circumstances: –

(a)where a sale is effected at a depressed value attributable to reservation under the Scheme; or

(b)where consent to development of property is refused on the grounds of reservation under the Scheme. 

In either situation it is submitted that any compensation payment so made, based on the difference between unrestricted market value and value restricted by the Scheme, be registered as a caveat on the title of the subject property and that in determination of the value on subsequent acquisition, regard be had to any amount of compensation so paid.  In either case the Authority may, as the legislation now stands, elect to complete acquisition of property rather than meet a compensation claim.

And I might interpose there, that is still the case under section 36(2), that when a claim for compensation is made, the Authority is given a right to elect to acquire the property, rather than pay compensation.

The other material paragraph, 183, in the report is at page 121.  That is under a division heading of “Compensation”, that heading being just above paragraph 182.  What was said in 183 is that:

Different considerations arise in respect of compensation and reservations.  As discussed earlier in this Report, the Authority believes it essential that legislative provision be made for compensation in respect of reservations to be contained to those areas where a sale at a depressed price has been effected or where consent for development has been withheld.  There is accordingly no time specified in the Scheme within which a compensation claim must be lodged in respect of reservations.  These may be expected to arise at any time following either a sale at a depressed price or a decision under the Scheme to refuse consent for development, and they must be lodged within six months thereafter.

What was taken up with that appears in the second reading speech at page 135 to 136.  That gave rise to the amendment in 1962 based on that report.  The Minister’s speech in the Legislative Assembly for September 1962 starts at 135.  At 136, column one at line 33 and following the Minister said:

The Bill also amends the compensation provisions in respect of the metropolitan region scheme.  This amendment arises from a consideration of the financial resources of the metropolitan improvement fund – 

that is the fund established under section 38 – 

and problems of planning authorities in other States where claims for compensation have totalled many millions of pounds – far beyond the resources of the responsible authorities.  It has been said that many of these claims were due to the uncertainty of the owners in respect of their right.

As indicated in the report submitted by the authority, it is quite impossible to contemplate the acquisition immediately, or over a short period of time, of land which will not be required for many years ahead and the cost of which will, in the aggregate, run to many millions of pounds.  However, as the Act stands, the authority could be confronted with a heavy claim for compensation in respect of the whole of the land reserved under the scheme and far beyond its financial ability to meet.  Nevertheless, it is necessary that the land be reserved in the scheme for this future need; and the reservation imposes an obligation in respect of compensation.

It can properly be argued that reservation under the scheme depreciates the value of land.  However, the depreciation is, in many cases, hypothetical and becomes real only when the land is sold at a price which reflects this depreciation, or ‑ ‑ ‑

GUMMOW J:   Is not this paragraph against you - “hypothetical and becomes real only when”.

MR SOLOMON:   That is right.  So when it becomes real is when there will be a claim that can be made and allowed.  It may become real at the time of a later owner who is still affected by the reservation.

GUMMOW J:   No, “when the land is sold at a price”.

MR SOLOMON:   Well, it is either.  The land is sold ‑ ‑ ‑

GUMMOW J:   It became real then.

MR SOLOMON:   I am sorry:

becomes real only when the land is sold at a price which reflects this depreciation –

which may or may not happen on the first sale –

or when development is frustrated by a refusal of consent under the scheme.  The amendment proposes that compensation ‑ ‑ ‑

GUMMOW J:   We can all read it, Mr Solomon.  What I am asking you is:  does not the hypothetical only become real once?

MR SOLOMON: Yes, it becomes real in one of two possible circumstances. It does not relate to the circumstances of the person at the time of the reservation; it relates under section 36(3a)(b) in the latter case to the circumstances of the landowner at that time. That is why the distinction is drawn. There is not one word that suggests that the only person who can make the claim is the person who is the owner of the land at the time of the reservation. The whole intention plainly of the amendment was to defer for as long as landowners might otherwise consider appropriate their either selling at a depressed price or applying to develop land so that it would be deferred until there was some real compensatory effect that occurred and that may occur at a time of a later owner.

CALLINAN J:   Is there any evidence that your client bought it at a depreciated value?

MR SOLOMON:   There is no evidence one way or the other about that, your Honour, no.  As was made clear by my learned friend this morning, no one in Western Australia has ever contemplated a construction that limited this right to the owner at the time.

GUMMOW J:   The fact that no one in Western Australia has thought of it does not matter.

McHUGH J:   Nobody challenged the legislation in the Boilermakers’ Case for 27 years.

MR SOLOMON: No. Well, it does matter in this respect, surely. When we come to the second part of the case and look at whether there was a planning purpose – a valid planning purpose or a planning purpose with good faith – what is relevant is to look at the state of mind of the Commission and the Tribunal. Their state of mind, whether it was right or wrong, was that there was a right in my client to compensation under section 36, and that the condition was imposed with a state of mind that it ought to be extinguished. So in identifying the purpose and identifying its validity or invalidity, the state of mind that the authorities in Western Australia, represented by the State solicitors who are here today ‑ ‑ ‑

McHUGH J:   This is your alternative point.

MR SOLOMON:   That is the alternative point; it is relevant to that.  My primary point, your Honours, just to continue with that page 136 – I have not read the last paragraph, but the first sentence of the last paragraph is material: 

These provisions are designed to protect the interests of landowners as well as to secure that the scheme shall not be defeated by the inability of the fund to meet claims upon it.  The authority is already empowered to purchase land –

and your Honours will find that in section 37A of the Scheme Act. That is, the Authority, if it wants to acquire freehold, can do so and compulsorily acquire under section 37A. What this section 36 does is, if the landowner applies to develop and, on the grounds of the reservation, the application is refused or unacceptably conditioned, then there is a claim for compensation and section 36(2) triggers a right for the Commission to elect to buy, rather than pay compensation.

McHUGH J:   Let us just put it this way, Mr Solomon.  Supposing it was shown objectively that land was sold at a depressed value which is attributable to reservation, but the person who sold it did not make a claim for compensation.  On your submission, could a subsequent owner – maybe even the purchaser – then make a claim for compensation on the ground that his or her application for development had been refused?

MR SOLOMON:   Your Honour postulates an unusual factual situation, that is, that in fact there is a sale at a depressed price but no claim made.

McHUGH J:   It may be this very case, we do not know, but I am just putting to you the hypothetical.

MR SOLOMON:   Yes, it is hypothetical and it is unusual.  One would, in the first place, expect ‑ ‑ ‑

GUMMOW J:   I know, but what is the answer?

MR SOLOMON:   I think the answer is that the claim can be made because if no claim is made by the seller of the land on the basis that they have actually suffered loss by selling at a depressed price, then what section 36(3a) makes clear is that there is compensation payable “only once”. That is what is says. It is payable once either to “the person who was the owner” at the time of “reservation” who first sells, or the landowner “at the date of application”.

If the landowner at the time of reservation sells and does not make a claim, one would start from a presumption that there was no depression in price on account of the reservation, which was why no claim was made.  But the compensation is payable “once only”, which is what 36(3a) says in the preamble, and the caveat provision in 36(7) I think would make it clear that if those, and I say unlikely, events happened – a sale at a depressed price, but no claim for compensation – the subsequent owner could thereafter make a claim if and when a development application was made and refused or unacceptably conditioned so far as the purchaser was concerned.

GUMMOW J:   The applicant for permission need not be the owner, is that right?

MR SOLOMON:   Need not be the owner at the time of reservation?

GUMMOW J:   No, at the time of the application.

MR SOLOMON:   It would have to be the owner.  One could not make a development application to develop land in which one did not have an interest.  People do make applications, but as agents.

GUMMOW J:   Tenants have interests, Mr Solomon, but they are not owners.

MR SOLOMON:   Yes, that is what I mean, an agent or somebody who has an interest under the owner, but once you have ceded the land to the State you could not make a development application over it.  You have no interest in it at all and that was what the Tribunal said its effect was with respect to this condition to ‑ ‑ ‑

GUMMOW J:   Am I right in thinking the metropolitan scheme – paragraph 13 imposes a prohibition, does it not?

MR SOLOMON:   It imposes a prohibition on carrying out development without consent.  That is right.

GUMMOW J:   Yes, “no person shall commence or carry out”.

MR SOLOMON:   That is right, and section 42 of the Act itself, the Scheme Act, creates an offence to do so.

GUMMOW J:   Just let me finish:

no person shall commence or carry out . . . without first applying for –

Right?

MR SOLOMON:   Yes, that is correct.  The point of the matter is that what the extrinsic material made clear – which I have referred to at 11.4.4 in my outline and the references in the footnote 29 to paragraphs 158, 170, 200, 201, 203, 215 – I will not pause to read all of those paragraphs in the report, but what they make clear is that this was a very broad general reservation and questions would arise, and serious questions would arise at the time development applications were made, whether or not to approve them with the intention that if a significant development were approved on reserved land that would effectively be giving up the reservation because it would not trigger compensation because the landowner has not been deprived of consent.  They have been allowed to proceed, and it would be effectively unreserving it is what those who wrote the report contemplated so that this was to delineate land, long term, and to put a hold on it to require the Commission itself to consider development.

It is made clear in the scheme that although zoning issues under the metropolitan region scheme would be delegated to local authorities these issues would not, with respect to reserves, be delegated to local authorities.  It would require a regional consideration.  The body was then called the Metropolitan Region Planning Authority and it was later absorbed in the State Planning Commission.  It would require an overarching consideration of whether or not to approve an application for development and if applications for development were approved the report notes that that would effectively – although not formally, but effectively, unreserve the land because it would not be expected to be acquired later.

All of that was put off to be considered if and when development applications were received.  All of that approach that is referred to in 11.4.4 of my outline and those various paragraphs of the report is all inconsistent with any suggestion that it had to be the owner at the time of the reservation who made the development application.

The purpose of the legislature was to put off these claims for as long as sensibly possible.  There may have been sales which were not depressed simply because the reservation had no great effect at that time.  It was, as the report and the reading speech noted, essentially hypothetical initially.

McHUGH J:   How would you test compensation in 50 years time?  How would you assess it?

MR SOLOMON: Section 36(6)(b) tells you how to do it, that you assess it so that it does not exceed what is listed there in 36(6), and again, it follows the stream where there are two alternatives for the two possible sources. It is:

(i)       the value of the land as so affected by the existence of such reservation –

the difference between that and:

the value of the land as not so affected.

You do it on:

the date on which the application for permission to carry out development on the land is refused or the permission is granted subject to conditions that are unacceptable to the applicant.

So one is looking at – if one makes a claim for compensation, there is a piece of freehold land here.  It would have value of X if it were not subject to the reservation, but with the reservation it is reduced to Y.  That is how it is calculated.  My learned friend reminds me that there really is a statutory enactment of the point good principle in the very final words at the end of 36(2b) which says the:

value shall be determined without regard to any increase or decrease, if any, in value attributable – 

Now, that is where one is determining a purchase price where the Commission elects to acquire, so that if a claim for compensation is made within the time required by 36(5), the Commission then, under 36(2)(a) and (2)(b) can elect within three months to acquire the land, and the price is then to be determined but the value is determined without regard to increase or decrease attributable wholly or in part to the scheme, which is really just a statutory statement of the point, good principle, but where the compensation goes on and is assessed rather than an acquisition under 36(2) then it is the difference in value between the land unreserved and the land reserved is what the assessor ‑ ‑ ‑

McHUGH J:   You have to say that in section 11 “is injuriously affected” means has been injuriously affected.

MR SOLOMON:   Has been and continues to be, yes – no, but not necessarily has been.  The whole reference to hypothetical that the injurious affection may be of reasonably nominal amount initially, but it has been injuriously affected, it continues to be injuriously affected.  It may be that it has become injuriously affected, although only hypothetically, so at the time that the scheme was first implemented in 1963, but certainly it has to be ongoing, and it may be that it becomes as the report and the Minister put it, it becomes real over time, as the metropolitan region expanded.

So what we do know, as I mentioned before the adjournment, your Honours, is that shortly prior to my client acquiring this land, it was urban‑deferred.  One can see that becoming real and moving out of the hypothetical phase has happened with respect to this land as contemplated by the legislators in 1963, many years subsequent thereto.

GUMMOW J: What do you say about the narrative of events by Justice McLure at page 217, paragraphs 81 and 82? We know something was happening in 1990. That is before your client came on the scene.

MR SOLOMON: Yes. As your Honours see at paragraph 82, our client purchased in 1992 and commenced what those in the industry would call a staged development, doing it in stages, subdividing in stages, getting approval in stages and doing the head works and selling it and then using the sale proceeds to fund the next stage. All of that history was found by the Full Court to be nothing more than that; it was background. It did not give rise to a relevant planning purpose. What I say ultimately as to what her Honour said at 86, the problem with the first sentence of paragraph 86 at page 218, is 85(a). Paragraph 85(a), with respect, is correct. I detailed the sections in the report about that. The report ever only contemplated acquisition using the fund established under section 38 of the Scheme Act. That is the region‑wide taxing fund. Her Honour then leaves that part of it out in the first sentence of 86 and just says:

Thus, the focus of the Scheme Act and the MRS is to secure (eventual) public ownership of land reserved for public purposes.

There are, with respect, two errors in that.  Firstly, it does harm to what is correctly summarised at 85(a) because it only states part of the position.  It does not mention that the intention was to acquire property with money, not through conditions under section 20 of the Town Planning and Development Act.  Secondly, it is inconsistent with the section that is dealt with in my submissions that shows that there was no initial intention to acquire all of the reserved land at all.  It was to mark it aside, it is to stop development on it, but the intention was to consider it and review it at the time that development applications were made.  It is 11.4.4 in my submissions and the various paragraphs in the report that I will read.

The Full Court rejected this analysis and, with respect, rightly so.  It did harm to the report to suggest that – it just suggested that the entire area reserved would be acquired for public purposes, full stop.  It did not suggest the entire area would be acquired and it certainly never suggested it would be acquired otherwise than by providing payment of compensation to the landowners.  Throughout the report that was contemplating that.  That is dealt with at 11.5 of my outline.  Also, your Honours, could I mention 11.6.1 and footnote 36, a reference in paragraph 199 that the report said land acquisition will be consistent with equitability so far as property owners are concerned was what the intention was.

GUMMOW J:   What do you say about the last sentence at paragraph 87, page 219 of the trial judge’s reasons? 

MR SOLOMON:   All of that is all built on the first sentence of 86, that there is a proper planning purpose of simply “achieving public ownership” of all reserved land, full stop, that is, without regard to using the fund that is expressly established and the tax that is expressly imposed to create the fund.  So the last sentence of 87: 

if there may be ways to produce a positive result similar in effect (albeit short of public ownership) if the land remained in private ownership, that does not result in the imposition of a vesting condition being for an improper or non planning purpose. 

CALLINAN J:   Well, it does not relieve the Authority of the obligation of applying its mind to town planning considerations, and not simply to monetary considerations as to how best and cheapest it can get the land.

MR SOLOMON:   Exactly.  Your Honour Justice Callinan said words to that effect in a decision called Moneywood Pty Ltd v Salamon Nominees Pty Ltd in this Court, which I have noted at 14.1 in my submissions, and, indeed, Justice Olsson adopted those words as well.  That was, of course, obiter in that case.  It was a case about a real estate agent’s commission entitlement in Queensland, but in looking at the question of a possible planning there, your Honour said words very similar to that which we have adopted in the submissions and the Full Court adopted.

CALLINAN J:   It is notorious that these commissions and authorities try to get land for public purposes for the cheapest possible amount they can. 

GUMMOW J:   They would be obliged to do so, would they not?

MR SOLOMON:   Well, no, with respect ‑ ‑ ‑

CALLINAN J:   Their obligation is to pay a fair price.

MR SOLOMON:   Yes.

HAYNE J:   Which rather takes us back to what your client paid in 1992, and why, in 1992 – one should contemplate the possibility – it paid a price, unaffected by the then existence, for many years, of the reservation.  That must be the hypothesis for so much of the debate you have just been having, that your client paid a price unaffected by the reservation that then existed.

MR SOLOMON:   Well, it was urban deferred land.  If it is urban deferred land and it is all sandhills, it may be that, at that time, there is no depression in the price through the reservation.  It only affects it, and starts to affect it, when you can do, economically, something different with it.

CALLINAN J:   Well, the vendor might have been acting on the apprehension, right or wrong, that the purchaser would in due course be able to claim compensation and be compensated, and, therefore, there ought not to be any discount.

MR SOLOMON:   Indeed.  Indeed, and that ‑ ‑ ‑

CALLINAN J:   There is simply no evidence either way. 

MR SOLOMON:   That is right, but the reference to depressed prices throughout the report and the second reading speech makes it clear that there is the possibility of a sale with no depression.  In a sense ‑ ‑ ‑

McHUGH J:   That is a bold submission.

HAYNE J:   It is an unusual market in Western Australia, then.

McHUGH J:   There must be thousands of unfortunate farmers, for example, who sold rural land because they thought it was rural land and some smart developer knew in a very short period of time they would get a rezoning which would treble or quadruple the value of the land.  Of course the zoning affects the land.  It has to.  Every rational businessperson takes into account what the zoning is and what the potential uses of the land are.

MR SOLOMON:   Your Honour, bear in mind, this is an area, in addition to the foreshore reserve, of some 60 hectares that my client bought, plus a foreshore reserve of about 20.  It was about 80 hectares.  What the question is is whether in that overall area there is any depression when it is merely urban deferred land.  There certainly is no evidence one way or the other as to what the parties considered about this at the time.  It was not raised as an issue at all below.  One just does not know.

McHUGH J:   Well, obviously, your client thinks it is worth something now.

MR SOLOMON:   As Mr Giles points out to me, if there are issues like that, they can all be had out on the compensation claim as to what is fair compensation.

HAYNE J:   Your argument proceeds from the proposition that your client has been precluded from pursuing compensation which otherwise is open to it. That is a proposition that depends upon the operation of section 36, and, in particular, on the operation that is to be given to the first sale reference there and whether that first sale reference is perhaps to take account of what might be thought to be the ordinary expectation of informed purchaser and vendor, contracting at arm’s length, having regard to the then state of public knowledge, as, for example, the existence of a reservation.

MR SOLOMON:   Yes, but the point is, your Honour, we are subjected to a condition that is for the sole purpose of preventing us testing those matters.

HAYNE J:   This is the third time, I think, you have been subjected to this condition, is it not?  1993, is it not?

MR SOLOMON:   It is a lot worse than that.  We were subjected to it in 1993, but then what happened was after we lodged what is accepted to be a bad faith application which, in a sense, awoke the Commission to the fact that we wished to make this claim, every development application we made was subjected to this.  My client was effectively commercially strangled; they could not proceed with any development.  The condition was put on four separate stages, time after time after time, to ‑ ‑ ‑

HAYNE J:   Do you take issue with the chronology attached to the appellant’s submission?  Is it inaccurate in some respect, because it records after 1993 ‑ ‑ ‑

MR SOLOMON:   There are seven stages where it was not imposed.  It was imposed on the first stage, but it was not insisted upon, for reasons which the Commission officer said were an oversight, before the Tribunal.  There were seven stages; once it became apparent that my client wanted to make a claim, it was imposed on every stage such that the whole development stopped.  Three of them were subject to the actual appeal before the Tribunal.  They were all heard together.

The fourth one went to another appeal as well, but all on the same issue.  The result at the moment, your Honour, just to complete the chronology, is after we succeeded in the Full Court our plans of subdivision have gone ahead.  We are at least commercially operative again.  We gave undertakings in the Full Court that if we were unsuccessful in this Court we will cede that foreshore reserve and will consent to a mandatory injunction to do so.  So what has happened in the result when we succeeded in the Full Court is our subdivision plans have gone through.  We still have the freehold title to the foreshore reserve.  If we succeed here, we can pursue our claim for compensation under arbitration.  We have lodged a development application which we consider is in good faith.  We have triggered the right for an arbitration.  We cannot agree on an arbitrator and we had proceedings in the Supreme Court to appoint an arbitrator and they are stayed, pending the hearing of this appeal.

Everything about that background, as Justice Olsson and their Honours who agreed with him in the Full Court said, is nothing more than background.  It did not give rise to a planning purpose.

McHUGH J:   You have said that a number of times.  Time is moving on.  You have to leave some time for your opponent to have a reply and you have three points you have to deal with, I think.

MR SOLOMON:   That is right.

McHUGH J:   You have to deal with the Lloyd v Robinson point.  You have to deal with the Clissold v Perry point.  You have to deal with the claim that this case does not fall under Newbury District Council, and to some extent you have dealt with that, but you have not fully developed your argument.  You have three matters, so you might move on, Mr Solomon.

MR SOLOMON:   Yes, I will move on, your Honour.  Your Honours will appreciate my concern at the new argument ‑ ‑ ‑

McHUGH J:   I understand that.

MR SOLOMON:   This will become a very Pyrrhic victory for us if we end up showing that it was a bad faith condition but we have no right.  The new issue is of fundamental importance to what we are here for.

McHUGH J:   You please yourself as to how you allot your time, but your opponent has principally relied not on this matter that was raised by the Court, but on these other three points and you have not spent much time in answer to his argument, but if you want to keep on with this point, that is a matter for you.

MR SOLOMON:   No, thank you very much, your Honour, I think I have said all I wish to say.  I have summarised as best I can the relevant legislation in paragraph 10 of the written outline and I do not think I need to speak orally any further about it.  I will come then to paragraph 12 of my outline, which deals with the Clissold point.  I think I should take your Honours back to paragraph 1 of my outline because I say there are three ways of dealing with the question.  The question is, does section 20(1)(a), which gives power to impose conditions, extend to a condition which has the intended effect of defeating Part V?  They are the words from what the Tribunal found and the Full Court said they found.

GUMMOW J:   You say “intended effect”.

MR SOLOMON:   That is right.

GUMMOW J:   What do they mean?

MR SOLOMON:   That is what the Tribunal said.

GUMMOW J:   I know that is what they said.

McHUGH J:   That is the language of the Tribunal.  It is not the best use of the relevant terms, “purpose” is better, but the intended ‑ ‑ ‑

MR SOLOMON:   “Purpose” is probably the same thing – “sole purpose” or “intended effect”.  That was its intended effect and I have to deal with construing the two Acts together and applying the provision about section 3.  The only other thing I would say about section 3 is this, that it uses the words “in conflict or are inconsistent”.  I would say that “conflict” means some type of direct conflict between the language of the Scheme Act and the language of the Town Planning and Development Act, but “inconsistent” is broader.  It says, “where the provisions . . . are in conflict or inconsistent”, and where the inconsistency ‑ ‑ ‑

McHUGH J:   Conflict seems to imply textual collision whereas inconsistency may be wider.

MR SOLOMON: Yes. That is my submission, with respect, your Honour. So that where section 36 confers, when read with sections 11 and 12, a right – or at least that is our submission, it confers a right - then there is an inconsistency in the general power in the subservient section 20 of the Town Planning and Development Act in being able to impose a condition to extinguish that right.  That is the point I am making at 10.7 in my outline as to the relevant inconsistency which is just construing the legislation.

I then said at 1.2 that one reaches that result under the extrinsic material.  The third point is Clissold v Perry.  Clissold v Perry is, like all rules of construction, an aid to construction, but ultimately it is the text to which one goes.  That is why I have started with the text, I have gone to the extrinsic material and Clissold v Perry is really a curial presumption with respect to construction, but plainly all of these presumptions are subject to anything in the text which is clearly to the contrary.

It is a rule that arose in a case. It is in the first volume of the reports of this honourable Court and it has stood all of this time. It gave an entitlement to compensation and the question was whether a person in occupation who had 10 out of 12 years possession against the true owner was a person who was entitled to compensation and it was held that they were. As I have mentioned at paragraph 12 of the outline, Justice Olsson analysed part of that judgment. There is another a couple of pages on which is at page 376. I will just read it briefly to your Honours. The short point that we make is that when Sir Samuel Griffith used language like “vested” he was not using it in any technical sense from the law of trusts or the like, and that is what the Full Court held with respect to this interest. The Full Court referred to the passage at 373 - this is 1 CLR 363 at 373 – that such legislation is:

not to be construed as interfering with vested interests unless that intention is manifest.

He goes on to refer to “certain definite rights” as is noted by Justice Olsson.  The other passage that his Honour did not mention is at the start of 376 that also, I think, elucidates what the Court was speaking of there, being a right of 10 out of 12 years occupation.

GUMMOW J:   That is not quite right, is it?  If you look at 373, the paragraph in the middle:

When this land was resumed, Clissold was in possession, and that possession gave him certain definite rights.

Then there is a reference to Cholmondeley:

possession is always regarded by the law as primâ facie title ‑

Right?

MR SOLOMON:   Yes, but not against the true owner.  That would be against everyone except the true owner.

GUMMOW J:   That is right.

MR SOLOMON:   As against the true owner, what his Honour talks at 376 I think explains the position which Clissold had as against the true owner.  Starting at the top of 376, his Honour said:

Bearing in mind that the Statute is to be construed, if possible, so as not to interfere with vested rights ‑

so this is a different use of the word “vested” now with rights, as opposed to interest, vested rights ‑ ‑ ‑

GUMMOW J:   What are you trying to get out of Clissold?

MR SOLOMON:   What I am trying to get of it is this, that if the presumption applied to a person like Mr Clissold who had 10 out of 12 years of a possession ‑ ‑ ‑

GUMMOW J:   It is not a question of whether it was 10 out of 12 years.  He could have sued the constructing authority and kicked them out.  It is a trespass.

MR SOLOMON:   Yes, but just the point at 376 where his Honour says:

But, if the contention of the respondents were to prevail, that the effect of the notification was to swallow up the ten years’ title of the claimant, that would be to give to it the effect of a judgment in ejectment recovered by the real owner‑who is unknown to this day‑against the person in possession, and the claim to compensation into which the estate is to be converted would be illusory.

That would certainly ‑ ‑ ‑

McHUGH J:   I do not know that Clissold has much to do with the case.  It is certainly not against you, but I do not know that it helps you.  Is not your simple point that if you are right about coming within the Act then you are given a statutory right.  It is a sort of Esber-type case.  You have a right and it is of some value.  It may only be a chance or whatever it is, but nevertheless it is a right.

MR SOLOMON:   I will just read the one last sentence that Sir Samuel Griffith said:

To construe the Act in that way would be to make it an Act, not for compensation, but for confiscation.

If section 36 of the Metropolitan Region Town Planning Scheme Act and section 20 have the result that once the land is reserved, although there is reference to a right of compensation deferred until some event, but, in fact it can just simply be taken away as soon as you apply for subdivision approval by a condition to cede it, it truly has turned what was a reservation coupled with a right of compensation into confiscation.

GUMMOW J:   When did this right first arrive, the statutory right, and in whom?

MR SOLOMON:   The statutory right arose, and it is, in a sense, a species of a right in rem as we put it because it passes to a subsequent owner who wants to develop, it rose at the time of reservation, but it was not to become liquid or the subject of a claim in compensation until certain events happened, but it was an immediate right which was deferred until certain events, either the land is sold and a claim is made after the sale or ‑ ‑ ‑

GUMMOW J:   So it attaches to the land?

MR SOLOMON:   Yes, but, of course, it is only payable once and if the owner at the time sells and says they have sold at a depressed price and makes a claim that is the end of it.  It is payable once, but it is either payable to the owner at the time of the reservation who sells, or who may be the person who makes the application before they sell.  The owner at the time may be that person.  They may make a development application without selling, but either of those events, it is payable once, it attaches to the land and it is there to ensure that the claims are deferred for as long as landowners sensibly do not want to sell or develop.

CALLINAN J:   And that is consistent, you say, with all of the extrinsic material, which indicates a shortage of money and that the interests of the Authority lay in postponing for as long as possible payment of the money?

MR SOLOMON:   Yes, and did not want to trigger claims, which is what they said in paragraph 20.  There will be a whole level of uncertainty in the minds of people who find out in 1963 that their land is reserved – they will all start making claims because they do not know what the impact is.  So, to protect the landowner, which is what the Minister says, it is all deferred. 

All I can say further about Clissold’s Case is that, with respect, Justice Olsson was right.  What Justice McLure did was a very detailed analysis of the word “vested” in the law of trusts and the like, yet what the Court was speaking of in Clissold v Perry as between the person acquiring a possessory title and the true owner is less than a person here.  Why?  Because in Clissold v Perry what the person in possession depended upon was the true owner not coming forward and making a claim for ejectment.  Here the entitlement to trigger a claim depends solely on a decision of the landowner.

GUMMOW J:   Yes, but it all becomes circular, does it not, because this right, because it is a statutory right, is qualified by whatever bears upon it from any other statute, and we are back where we were with the Town Planning Act.

CALLINAN J:   All you get out of Clissold, really, is an aid to construction, do you not?

MR SOLOMON:   Yes, I accept that.  That is why it is part 3 of my argument.

GUMMOW J:   The fact is, Clissold is useful when you are construing a statute bearing upon common law rights of some inchoate nature, but here you have statute bearing on statute.

MR SOLOMON:   It certainly has been applied to statutory rights as well.

GUMMOW J:   I am not saying it cannot be.

MR SOLOMON:   Justice McLure noted that, actually.

GUMMOW J:   All I am saying is, it begins and ends with construing the statutes.

MR SOLOMON:   Yes, but it has not been limited to common law rights.

McHUGH J:   You have to maintain that it is a right in rem and not a right personal to whoever was the owner at the time when the scheme was made.

MR SOLOMON:   Yes, and it is a right that is subject to being extinguished in three ways that I identified in paragraph 10.6 of my outline.

McHUGH J:   This case may be wrongly named.  Perhaps it should be called the Bayshore Gardens Estate.

MR SOLOMON:   It is actually singular, your Honour.  I think my learned friend’s submissions says it is “Gardens”.  The correct name is Bayshore Garden Estate, for what that matters.  My learned friend reminds me, your Honour, I think I am going over old ground, but a caveat is only consistent with it being a right in rem.

GUMMOW J:   Where is the caveat provision?

MR SOLOMON: Section 36(7), your Honour. Once compensation is paid, there is a caveat put on.

GUMMOW J:   Yes, but not beforehand.

MR SOLOMON:   No, once it is paid, because it is only payable once.  That fits with 36(3a), that it is only payable once.  The Commission lodges the caveat.  The Commission has given us a right to lodge ‑ ‑ ‑

GUMMOW J:   So all this is operating outside the transfer of land system.  It is a right appurtenant to the land, but not noted on the title in any way.

MR SOLOMON:   That is right, but once it is paid it provides for a Transfer of Land Act notification by caveat that compensation has been paid, so that there will not be any more.  The three elements I probably should just mention, in 10.6 in my submission, as to when the right to compensation goes.  It firstly goes if one makes a claim for compensation and there is an acquisition.  Under 10.6.2, it goes if there is a development application and it is approved, notwithstanding the reservation.  I have referred to the passages in 11.4.4 about that. 

The third thing is that the reservation may be revoked. Now, that is a concession on my side that I base on section 36(9), because 36(9) actually provides for recovery from the owner at the time if a reservation is revoked after compensation is paid. So I readily concede that if there is a revocation before an application for development is made, there cannot be any right to compensation. In other words, it can be recovered if the reservation is revoked. That is dealt with in 36(9), and then there are following subsections that deal with calculating value for a recovery where compensation has been paid.

If it convenient to your Honours I will move on to the last two points.  As far as Lloyd v Robinson is concerned, we really have little more to say than what the Full Court said.  Lloyd v Robinson was decided before the Metropolitan Region Scheme Act commenced.  It did not have any ‑ ‑ ‑

GUMMOW J:   Would there not have been a power of resumption under some other statute?

MR SOLOMON:   Under what was then called the Public Works Act, yes ‑ ‑ ‑

GUMMOW J:   Yes.

MR SOLOMON:   To acquire land for public purposes, yes, there was.

GUMMOW J:   The same argument as to improper purpose would have been available there?

MR SOLOMON:   Except that one does not have a body of law that is two Acts to be read as one, but with one part of it to override in the case of conflict or inconsistency.  The point would have been as to whether or not what the land was required to be ceded for was a public purpose.

GUMMOW J:   Wait a minute, your first point would go to lack of power?

MR SOLOMON:   Yes.

GUMMOW J:   I was asking about improper purpose.

MR SOLOMON:   I see.

GUMMOW J:   There would have been an argument as to improper purpose, would there not?

MR SOLOMON:   Based upon the Public Works Act power of acquisition?

GUMMOW J:   Yes.

MR SOLOMON:   Maybe not, for this reason, that it may not have – the particular condition in Lloyd v Robinson may not have amounted to a public purpose for which land could be taken under the Public Works Act.  Even though it might be required to be ceded by a developer for some purposes, there would not be a one‑to‑one hand in glove relationship there.

CALLINAN J:   If it got beyond that, there would be no question if the taking - or under that Act there would be an entitlement to full compensation.

MR SOLOMON:   Indeed, that is a standard compulsory acquisition Act with fair ‑ ‑ ‑

CALLINAN J:   Under that Act, perhaps public purposes would be much wider than say town planning purposes?

MR SOLOMON:   Perhaps.

CALLINAN J:   There may be all sorts of reasons why the Crown wants land and it may not necessarily be for a town planning purpose?

MR SOLOMON:   Yes, it may have been that there was an alternative way open to the Town Planning Board, as it was then called in Lloyd v Robinson, to acquire that land, to take it and pay compensation, but they imposed a condition on the basis of infrastructure need that was generated by the developer, that is, the developers developing the land, creating the need for a park or the need for a school site or whatever, so that it was appropriate to impose a condition that the developer should pay for it.

CALLINAN J:   That would be the more usual sort of thing, I would have thought, and that is all discussed by this Court in Cardwell Shire Council v King Ranch Australia Pty Ltd (1984) 53 ALR 632. It is not reported in the Commonwealth Law Reports. There has to be some nexus between the condition and the town planning application. That was a case of a bridge, I think, beyond the subject land.

MR SOLOMON:   Yes.  Before I leave Perry, could I just make this observation – it may be of no importance ‑ ‑ ‑

CALLINAN J:   Just leaving that, the test seems to be at 635:

there is some requisite nexus, identification or relationship between the development and the purpose to which the contribution is to be put or the moneys expended ‑ ‑ ‑

MR SOLOMON:   Yes.

CALLINAN J:   Justice McLure does not even seem to have considered any of that, whether there was a nexus or ‑ ‑ ‑

MR SOLOMON:   Justice McClure’s decision is limited to that.  There is a planning purpose in the land being acquired by the public.

CALLINAN J:   Getting it for nothing.

MR SOLOMON:   That is it.  If there is a planning purpose in the land being acquired for public purposes, that is all there was to it.  That was a planning purpose.  That was her decision, or the rationale for it.  Before I go on to the planning ‑ ‑ ‑

HAYNE J:   Just before we leave Lloyd v Robinson, am I right in thinking that there were three areas there in issue, two for foreshore reserve and one for parks and reserves?

MR SOLOMON:   I think that is right.

HAYNE J:   Yes.

MR SOLOMON:   Yes, it was pre the region scheme and I think the land was actually south of what became the region anyway.  You will see the facts in that case go back to 1959.  It was even before the Act and certainly before the scheme that came in in 1962.  The Scheme Act obviously had been passed when the High Court delivered its decision.  The point I made, actually, about that – I might just mention it – it is paragraph 27 of the report.  The report is dated July 1962.  Paragraph 27 at page 86 appears clearly to refer to Justice Virtue’s decision.  When one realises that Lloyd’s Case was handed down by the High Court on 27 July 1962, all of this was written before that appeal was allowed, because it is noted in paragraph 27 that:

the Supreme Court has declared that in the absence of direct legislative sanction, the Board has gone beyond its powers in requiring land to be transferred free of cost to the Crown for such purpose. 

They go on and then develop a whole scheme therefore to provide compensation.  Now, after the Court’s decision in July, the second reading speech that was given in September and all of the provisions that have been added to the refining of the compensation provisions, nobody has ever gone back on the notion that there would be a fund created under section 38 to pay compensation.  So I can readily enough concede that when that report was written the authors of it had in mind they were applying Justice Virtue’s decision, but nothing changed.  It was decided to go ahead with a fair scheme for compensation with a tax on all land in the metropolitan region to pay the acquisition cost. 

The only other point I wanted to make about Clissold – and it is by the by, as, indeed, I think your Honours are saying to me, Clissold is a bit by the by itself, but I just wanted to mention the decision of this Court in Bathurst City Council v PWC where the word “trust” in the relevant New South Wales legislation with respect to land that was held for parking purposes – the Court said that “trust” was not there used in any significant legal meaning.  It is paragraph 67 of the judgment is the conclusion.  It started at paragraph 45.  The court said, although the word “trust” is used in the Act, it did not mean trust where you have a set law and a beneficiary and the like.  It had a particular statutory meaning in that context. 

Now, how much more so with a word like “vested” in a judgment, where it is used in the context of vested interest, vested right, certain definite rights?  It was not used in any definitive sense that was bringing into play all of the learning with respect to the law of trusts any more than the word “trust” in an Act was where it was out of context.  Justice McLure’s analysis of the word “vested”, erudite as it was, is not what the Court had in mind in Clissold’s Case. 

With paragraph 13 then, the planning purpose point, I have mentioned Lloyd’s Case at footnote 47 there, and my learned friend read the passages and I think one of your Honours – I think Justice Gummow – mentioned to my learned friend the passage that I would be referring to, that conditions have to be imposed in good faith for a proper planning purpose.  That is why the Full Court was quite right to say there was nothing in Lloyd that stood in the way of a decision that a condition that was imposed purely for the purpose of, or intended effect – let us leave it at purpose – for the purpose of defeating a statutory right of compensation ‑ ‑ ‑

GUMMOW J:   I still have difficulty with that.  Was there any evidence as to the mental processes of any decision‑maker tendered at any stage?

MR SOLOMON:   As far as I know, no.

GUMMOW J:   No.  All it is saying is – it said that it speaks for itself because of its inevitable legal consequence.  That is all that is being said, is it not?

MR SOLOMON:   When you say “the decision‑maker” you mean the Commission?

GUMMOW J:   Yes.

MR SOLOMON: Justice Olsson put it at paragraph 95 in his reasons that what was said at paragraph 8 of the Tribunal’s reasons was an obvious and necessary inference, that there could be no other purpose to cede land which was reserved.

GUMMOW J:   It does not matter whether it had the purpose or not, it had the inevitable legal effect.

MR SOLOMON:   That is right.

GUMMOW J:   So purpose is irrelevant.

MR SOLOMON:   Except for ulterior motive in administrative law.

GUMMOW J:   Why, if it had the necessary legal effect.  It does not matter what they thought was going to happen, it was going to happen.  What is being spoken about, mala fides?

MR SOLOMON:   Yes.

GUMMOW J:   Mala fides?

MR SOLOMON:   Yes, mala fides in the sense used in Randwick Corporation, in the joint judgment in Randwick Corporation.  Their Honours there are saying at ‑ ‑ ‑

CALLINAN J:   Or Northern Land Council v Toohey?

MR SOLOMON:   Yes, indeed, the case your Honour mentioned this morning.  I brought that down after lunch.

GUMMOW J:   How did they use the expression “mala fides”?

MR SOLOMON:   In Northern Land Council 151 CLR 202 at 203, your Honour, Justice Stephen’s judgment, with whom Justice Mason agreed and added comments ‑ ‑ ‑

GUMMOW J:   Is that on the list?

MR SOLOMON:   No, Justice Callinan mentioned it this morning, your Honour.  It is a case called ‑ ‑ ‑

GUMMOW J:   If you would just give me the page.

MR SOLOMON:    ‑ ‑ ‑R v Toohey; Ex parte Northern Land Council 151 CLR 170.

GUMMOW J:   This was the expansion of Darwin, was it not?

MR SOLOMON:   Yes, that is right, and it is at pages 202 to 203 where his Honour says this:

In Congreve v Home Office, Lord Denning MR observed that a Minister’s discretionary power must be uninfluenced “by any ulterior motives” –

He goes on to also refer to a judgment of Lord Wilberforce who observed:

the courts will ensure that a discretionary power given to a minister has not been exercised “outside the purpose of the Act, or unfairly, or upon an incorrect basis of fact” ‑ ‑ ‑

GUMMOW J:   I realise that, but that is not what “mala fides” means.  That is not what mala fides means in administrative law.

MR SOLOMON:   I am using it in – and I think the Full Court used it, your Honour, in the sense that it was used in ‑ ‑ ‑

GUMMOW J:   It is a very serious allegation to make against a public body.

MR SOLOMON:   Yes.  If I could refer your Honour to Thompson v The Council of the Municipality of Randwick 81 CLR 87, which is on my list. That is a joint judgment of Justices Williams, Webb and Kitto. It was with respect to a taking of land where it was more than what was required for a particular purpose so that they could make a profit. The purpose can be seen in the first paragraph on 102 which refers to the engineer’s report that if the local authority took more land that what they required they could resell it at a profit. The various sections of the Act are then analysed and at the end of ‑ ‑ ‑

GUMMOW J:   There is a lot of evidence about what was going on inside the decision making. 

MR SOLOMON:   That is right, but at the very foot of 105, these are, I think, the words that I am using, and the Full Court relied on this decision.  The last sentence on 105, after stating the rules:

If it does [contravene those requirements] in attempting to resume more land than is required to construct the road, [it] is not acting in good faith.  By that we do not mean that the Council is acting dishonestly.  All that we mean is that the Council is not exercising its powers for the purposes for which they were granted but for what is in law an ulterior purpose.

GUMMOW J:   No mala fides, Mr Solomon.

MR SOLOMON:   Well, except in the sense that the words are used there.  It is a species of lack of good faith in that sense.  That is, I think, the way the Full Court used it, because they relied on this decision of the Court and the way I am using it.  Fraud on a power, I suppose, is another way of putting it.

GUMMOW J:   That is something less than red‑blooded common law dishonesty.

MR SOLOMON:   Yes, that is quite true.  So far as my point at paragraph 13 of the submissions is concerned, the only inference that could be drawn was that drawn at paragraph 95 in the Full Court’s judgment in referring to what the Tribunal had decided of what the intended effect was.  There was a strong reason why, if there was to be a proper planning purpose beyond taking the land free of cost, it needed to be shown. 

They were the points I made at 13.2, that the area was twice the current usual area – I have dealt with that this morning and I have footnoted it back to paragraph 8 above – I will not take your Honours back to that – at 13.2.2, that there was no planning reason to force ceding such a large area, rather than waiting to consider a development application over part of it, and the third thing is that we were disabled from using the land. I have dealt with that – I should have a footnote there at 13.2.3 back to 11.6, footnote 35, and also paragraph 13 of the scheme itself. So this was a very large and unusual area according to current planning policies and yet there is no explanation other than that the land is to be ceded, although it is reserved, free of cost and without compensation.

CALLINAN J:   I must say, I find it difficult to understand how getting the land for nothing can further any town planning purpose.

MR SOLOMON:   Yes.  Your Honours, in that regard, at paragraph 13.3, I have relied on the case of Allen.  Your Honours will recall that Justice Walsh’s judgment, with whom Chief Justice Barwick and Justice Windeyer agreed, was adopted in the joint judgment in Bathurst v PWC. I have noted that in the footnote at 47.

Allen was an unusual case because it involved in a planning approval the imposition of a condition about the times during which construction of the development the subject of the application would be built.  So there was, in effect, a condition imposed that said you can only carry out the building 9 to 5, and I think 9 to 1 on Saturday.  That was done under a particular ordinance.  The point that is adopted in PWC is at page 499 and over to page 500 in dealing with whether this condition – this was a condition of approval just like ours is a condition of approval – imposed under clause 40 of the ordinance. Justice Walsh said:

The powers conferred on the responsible authority either to grant an application unconditionally or to grant it “subject to such conditions as it may think proper” or to refuse to grant it are expressed to be “subject to the provisions of this Ordinance”.  Elsewhere in the Ordinance provision is made . . . 

In accordance with a well-recognized rule, s. 40(1) –

read for 40(1) or 20(1a) in the Town Planning and Development Act –

ought to be understood (quite apart from the limitation contained in its opening words) –

and that is subject to the ordinance which we can put aside for the moment –

not as giving an unlimited discretion as to the conditions which may be imposed, but as conferring a power to impose conditions which are reasonably capable of being regarded as related to the purpose for which the function of the authority is being exercised, as ascertained from a consideration of the scheme and of the Act under which it is made.  This purpose may be conveniently described, in accordance with the expression used by Lord Jenkins in Fawcett Properties Ltd v Buckingham County Council as being “the implementation of planning policy”, provided that it is borne in mind that it is from the Act and from any relevant provisions of the Ordinance, and not from some preconceived general notion of what constitutes planning, that the scope of planning policy is to be ascertained.

So with those final words, one sees, so far as this case is concerned, that in identifying planning policy one has to look at the Act.  The Act here is the body of law that is the composite Town Planning and Development Act in metropolitan regions ‑ ‑ ‑

GUMMOW J:   You have to include section 20C.

MR SOLOMON:   Section 20C?

GUMMOW J:   Yes.

MR SOLOMON:   I think we mentioned this this morning, your Honour.

GUMMOW J:   No, you mentioned 20A.  This notion of town planning, as has just been said in that passage you read to us, comes out of the whole of the statutes.

MR SOLOMON:   That is right.

GUMMOW J:   It does not exist dehors these statutes.

MR SOLOMON:   Section 20C, your Honour, is a completely different section with respect to paying compensation in lieu of setting aside of land.  That is a completely separate power.  Let me make very clear there was no suggestion in this case that this land was required as public open space or as a public open space commitment by a developer.  There was nothing of that sort.  Section 20C really speaks about developers who are given an option of either setting aside public open space or paying compensation in lieu.  But the sole basis on which this ‑ ‑ ‑

GUMMOW J:   Your point is it was already set aside.

MR SOLOMON:   The condition?

GUMMOW J:   Yes.

MR SOLOMON:   Absolutely.  It is already set aside by the reservation.  The whole planning purpose of the reservation is to stop it being used except with approval of the Commission, and there was nothing to be achieved other than, as Justice Olsson put it, the fiscal purpose of compensation not being payable.  That was the sole purpose.  He used the word “fiscal” I think in paragraph 91 in the judgment.  As I say at 13.3 of the submission, if Allen Constructions is right, one must find a proper planning purpose or the implementation of planning policy in considering the legislation itself.

I did want to briefly refer to a couple of additional authorities in the UK, given that my learned friend’s reply has focused on the Newbury Case.  If I could just provide you with a copy of those, I have brought copies and I will mention them very briefly because things have moved on in the UK since Newbury was decided by the House of Lords.  This will only take a couple of moments.  I will just take your Honours to the passages if I can, very briefly.

Of course, my primary submission is cases like Allen in this Court are the Court’s primary focus, but to the extent the Newbury Case is being pressed, I thought it important to refer to the developments in the House of Lords.  In Westminster Council v Great Portland Estates [1985] AC 661, this was a challenge to a planning policy of the Westminster City Council and the judgment of their Lordships of Lord Scarman was adopted by all. The passages I refer to are at 669, from the fourth line down to about 670 point 4. What their Lordships have done is to treat the test, as it is noted in the first full paragraph on 670, that what Lord Parker said in East Barnet Urban District Council, that in looking at planning policy, one is looking at the character of the use of land.  Their Lordships say at the second full paragraph on 670:

It is a logical process to extend the ambit of Lord Parker C.J.’s statement so that it applies not only to the grant or refusal of planning permission and to the imposition of conditions but also to the formulation of planning policies and proposals.

So it applies to imposition of conditions, as we have here.  It is a general test for the United Kingdom and the test of what is a material consideration.  There is then reference to Newbury and then this final sentence there:

And a planning purpose is one which relates to the character of the use of land.  Finally, this principle has now the authority of the House.

GUMMOW J:   I realise that. They are construing the 1971 Act, 1972 Act, are they not?

MR SOLOMON:   That is right.

GUMMOW J:   In Newbury at 618H, “The three tests suggested”, et cetera.  Then 619E, “The subsection therefore expressly mentions the first two tests”, right, namely, fairly and substantially relate to the provisions of the development plan.

MR SOLOMON:   Yes.

GUMMOW J:   Then “fairly and reasonably relate to the permitted development”:

The third test arises from the application to the planning law of the reasonableness test as enunciated by Lord Greene M.R. in Associated –

That just bears out with what has been said in this Court in Allen, does it not?

MR SOLOMON:   It is very similar.

GUMMOW J:   They get it out of the particular statute.

MR SOLOMON:   That is right.

GUMMOW J:   Why are we worried about all these English cases?

MR SOLOMON:   All right.  While your Honour has it open, I did want to read Lord Fraser’s comment at the foot of page 607 in Newbury, inasmuch as the case that he has endorsed I have provided you with a copy of.  That is R v Hillingdon London Borough Council; Ex parte Royco Homes Ltd.  In referring to planning purpose, it is saying:

It may have other purposes as well as its planning purpose.  But if it is imposed solely for some other purpose or purposes, such as furtherance of the housing policy of the local authority, it will not be valid as a planning condition.

I have provided your Honours with a copy of Hillingdon.  What I thought, if I could just very briefly take you to the third case that I have handed you there which is R v Westminster Council; Ex parte Monahan in 1990.  This was to do with a condition of approval to do up the Royal Opera House and the approval was on the basis that the developer needed to build an office block adjacent in order to fund it.  The council did not think it was a very good thing, the office block, but approved the overall approval.

The point I wanted to take your Honours to about that is Lord Justice Kerr’s judgment between pages 111 and 114, really just his analysis of the authorities and, in particular, his analysis of a judgment of Lord Justice Lloyd in Bradford City Metropolitan Council v Secretary of State for the Environment [1986] 1 EGLR 199, which he refers to at 113. What is shown in that section from 111 is that:

a grant of planning permission coupled with a condition based on an ulterior motive.

This is referring at 114.

And in most such instances, though not necessarily, the motive will no doubt be financial or have some financial implications.  The facts in the Bradford case were similar, although less extreme, and were judged to fall on the same side of the line.  In both cases a condition with financial implications had been imposed with the ulterior motive of furthering the purposes of the local authority.  In the result both decisions were held to be “manifestly unreasonable,” to use the words of Lloyd LJ which he understandably preferred to “irrational.”

That had been used in another case.  With respect, his Lordship’s judgment from 111 to 114 is a summary of the developments in the UK since Newbury.  He deals with, of course, Westminster City Council v Great Portland Estates at 112 and quotes the passage I have referred to.  He refers to Bradford’s Case at 113 and shows where the line is to be drawn. 

The case of R v Hillingdon London Borough Council; Ex parte Royco [1974] QB 720 that was approved by Lord Fraser in Newbury again required for the financial detriment of the landowner and for the benefit of a local authority but not otherwise related to the land in question, development of a road, and that was held to be beyond power.  So my respectful submission is the developments in the United Kingdom reflected in those decisions are not inconsistent with Allen’s Case in this Court and Bathurst ‑ ‑ ‑

GUMMOW J:   Well, it would be tough if they were.

MR SOLOMON:   Yes, but to the extent that my learned friend’s submissions suggested – it was paragraph 14 of my learned friend’s reply which suggested that the test that was enunciated ‑ ‑ ‑

GUMMOW J:   Whenever we get an appeal from Adelaide or Perth, we always get deluged with English cases, as somehow providing some starting point.

MR SOLOMON:   I will finish it here, your Honour.  In paragraph 14 of my learned friend’s submissions, he had in inverted commas the words that come out of Allen’s Case and said that is not how you identify planning policy, and cited Newbury.  So it is just my answer to that, that Newbury is not how you identify planning policy in this field either, without reading it in light of the later developments.  So our point is, there was no planning purpose. 

The third point, as I mentioned before lunch – the third basis upon which the Full Court decided this case, alternatively to all of that:  if there was a planning purpose, it had an ulterior motive.  That was based upon Municipality of Randwick.  The Full Court relied on that, relied on this Court’s decision in Marshall v Director General, Department of Transport, and also Justice Callinan’s comments in Moneywood Pty Ltd v Salamon Nominees Pty Ltd.  This is paragraph 14.1 of my submissions.  If I could just refer briefly to Marshall (2001) 205 CLR 603 ‑ ‑ ‑

McHUGH J:   For what purpose?

MR SOLOMON:   Just to take your Honours to the passage. 

McHUGH J:   If Justice Barwick was presiding, he would say, “We can read, Mr Solomon”. 

MR SOLOMON:   I will be brief, your Honour. 

GUMMOW J:   Just tell us the paragraph number.

MR SOLOMON:   It is in paragraph 21, footnote 50 of my submissions.

GUMMOW J:   No, in the judgment. 

MR SOLOMON:   Yes, paragraph 21 in the judgment.  It is footnote 50 in my submissions.  It is at 616 to 617:

A constructing authority does not have an unfettered right to resume land.  Unless the authority has a bona fide purpose of exercising a statutory power in respect of the land, a purported resumption of it would be unlawful.

That is four Justices citing R v Toohey; Ex parte Northern Land Council.  What is extraordinary here is the respondent’s submission that, having acquired the land for road purposes, its use of the land thereafter was and is not for any of those purposes.  While I have Marshall there, on the earlier point, I wanted to refer to Justice Gaudron’s additional comments at paragraph 38, page 623, with which Justice Hayne also agreed, I think, at paragraph 67, page 633 to 634.  What Justice Gaudron said is, in my respectful submission, probably a fair contemporary statement of the Clissold principle in another way, but to the same effect, that:

Although the rule that legislative provisions are to be construed according to their natural and ordinary meaning is a rule of general application, it is particularly important that it be given its full effect when, to do otherwise, would limit or impair individual rights, particularly property rights.  The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit.  Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.

I would, with respect, adopt that, particularly with respect to the additional points that have been argued today as a comment that really only currently has the approval of Justice Gaudron and Justice Hayne, but it is a more contemporary and more precise statement of the position than Clissold.  I would respectfully submit it should be adopted and applied in this case to reach a result that our client does have a right of compensation subject to making a development application which was rejected.

I will not read the passage from Moneywood v Salamon Nominees of Justice Callinan’s judgment.  It is in footnote 51.  I will not take your Honours to it.  He has a list of authorities there including Randwick Corporation and the Full Court relied upon it and, with respect, it is entirely apposite.

As we say at the start of our submissions, your Honours, this was a case where the only purpose, or as it was put, intended effect of the condition was to take the land free of cost or compensation.  The two Acts cannot be harmoniously read in light of section 3 of the Scheme Act by allowing such a condition to be imposed for that limited and sole purpose which is how I have stated the question in paragraph 1.  That is all that this case raises.

I might say that I am not here today to suggest that there cannot be appropriate cases where conditions might be imposed requiring ceding of land.  My point is that it cannot be that section 20(1)(a) even gives power to impose a condition where its sole purpose is to extinguish the right or the possible right of compensation.  It just does not give power.  They were the words Justice Olsson used.  There was no power under section 20(1)(a).  That is the first argument.  We say the Full Court was right.  It was right reading the Acts together.  It is made clear when one looks at the extrinsic material that the intention is that there would be a right of compensation to landowners and the Clissold v Perry or the updated way of expressing it in her Honour’s judgment in Marshall applies.

The alternative argument is that if it was within power it did not have a valid planning purpose because it was not in any way related to the purpose of town planning of finding a valid planning policy in terms of the Act, in terms of being related to the development as referred to in the threefold test in Newbury.  If there was a planning purpose it was not imposed in good faith, in the limited sense those words are used in Randwick Corporation, not with dishonesty, but it was not a proper exercise of the power because there were ulterior motives and purposes either solely or certainly mainly.  Randwick suggests it does not have to be a sole purpose and the case adopted in Northern Land Council suggests if it is ulterior at all it is invalid in Justice Stephen’s judgment with which Justice Mason agreed.

With respect, your Honours, the decision below should be upheld.  It should also be held that my client as a subsequent owner of the land did not acquire property which would not be subject to compensation if a development application was rejected or conditioned when there had not been one made before.  May it please the Court.

McHUGH J:   Thank you, Mr Solomon.

CALLINAN J:   Just one moment, Mr Solomon, before you sit down, you were asked about evidence and motives and whether there was any evidence.  Is there not evidence of that summarised at 176 and 177 of the appeal book?  The summary of evidence before the Tribunal, the manager of the Environmental Planning Branch gave evidence, did he not, paragraph 32, page 176, for example.

MR SOLOMON:   Yes.

CALLINAN J:   I have only looked at it quickly, but there does not seem to be any suggestion that in that evidence or anywhere else it was asserted by the authority or the planning authority that this was needed for a town planning purpose.

MR SOLOMON:   No.

HAYNE J:   Is that right?  What about page 180, paragraph 46, where your side is recorded as accepting the environmental condition that the land should be set aside for public use for at the moment, of course, it is not available for public use, is it?  It is reserved, but your client owns the land and your client can exclude anyone, can it not?

MR SOLOMON:   Actually, it is a bit of a longwinded answer to that, your Honour, but if you look at the formal order of the Full Court in this case when it came to working out what orders the Full Court would make, rather than have it sent back to the Tribunal to consider alternative conditions, there was an order made by consent that there would be an easement for public access over the reserved land granted.  So, in fact, there is now a public access easement granted pursuant to the reservation in favour of the local council, and that is referred to in paragraph 3.5 of the formal order of the court.

GUMMOW J:   Yes, but that is not the answer to his Honour’s question though, is it?

CALLINAN J:   Not all public uses are town planning uses or purposes.  Is that not right?

MR SOLOMON:   Absolutely.

CALLINAN J:   Or recreational purpose.

MR SOLOMON:   Absolutely.

HAYNE J:   Let me put to you directly this, which I draw from section 20A and you should have it in front of you so that you can follow the words, that the condition which was imposed was a condition that the land which was part of the residual lot in the subdivision should vest in the Crown for one or other or more than one of the following purposes, namely:

the purpose of conservation or protection of the environment or . . . reserve for . . . foreshore management . . . or recreation.

Is that the effect of the condition that was imposed?

MR SOLOMON:   No, because it is already reserved.  What section 20A says is this ‑ ‑ ‑

GUMMOW J:   It is not already vested in the Crown.

MR SOLOMON:   No, but the words “for the purpose of” in section 20A are descriptive of the condition.  That is:

When the commission has approved . . . a subdivision of land subject to the condition that certain portions of land

shown on a diagram . . . 

shall vest in the Crown for the purpose of conservation or protection –

that is the condition’s purpose being:

conservation or protection of the environment or a . . . pedestrian accessway –

It was not for that condition.  It was not for that purpose.  The condition was not for that purpose because the purpose is already achieved by the reservation under the metropolitan region scheme.  So the answer to your Honour’s question is there was no condition imposed for that purpose.  The sole purpose of this condition was to vest land that was already reserved and would stay reserved and the Crown would be bound by the reservation.

The authorities that Justice Callinan mentioned before lunch such as Brisbane Council v Mareen make it clear that even if the Metropolitan Region Act did not bind the Crown, it would still hold it for those purposes because it was reserved for those purposes.  So the purpose of the reservation is achieved by the reservation.  This condition is not for a purpose of achieving that result.  It is for a purpose of achieving Crown ownership, subject to the reservation, free of compensation.  So really 20A actually did not apply because there was not a condition imposed for that purpose at all. 

Unless I have misread 20A(1) such that the words “for the purpose” are descriptive of the condition, this condition was not for that purpose.  I cannot read it another way and that the sole purpose was to get the land free, not to change the character of its use.  The character of its use was governed by the scheme and the Scheme Act.  Have I answered all of the outstanding issues your Honours have raised with me?

McHUGH J:   Yes.  I think there were only two questions asked of you. 

MR SOLOMON:   Thank you, your Honour.

McHUGH J:   Thank you, Mr Solomon.  Yes, Mr Tannin.

MR TANNIN:   May it please the Court.

GUMMOW J:   What is the answer to that last point made by your opponent?

MR TANNIN:   I will answer that, your Honour.  Can I come to that in the course of the reply so that I can keep the matter neat.  My learned friend’s principal submission this morning was that there was no town planning purpose.  He sought to support that submission by saying the Crown had taken an inordinate area, some area anomalously outside the 100 metre guideline and that it was a very large area.

The history of this matter which is in evidence – if your Honours go to page 43 – is a complete rebuttal of the force, if any, that submission had.  The proposal was that of the respondent itself.  At 43 you have an extract of a consultative environmental review which was prepared for the purposes of the environmental review.  At page 43, line 15, you can see an observation that:

Ordinarily a coastal reserve 100m from the first line of vegetation back from the beach would be required to protect the coastal features of the land.  This is discussed fully in Section 4.4.  Temwood Holdings propose that this area be extended back to a line of elevated dunes as far back as about 230m ‑ ‑ ‑

GUMMOW J:   That is what Justice McHugh had in mind this morning, I think.

MR TANNIN:   Yes.  It continues at the very bottom of that page to acknowledge that the proposal is that of the proponent itself.  Originally there was an east‑west reservation and that became impractical because of the development of the areas around it.  The proponent itself suggested this area, so for it to suggest now that this area is somehow anomalous and indicative of an improper planning purpose is, with great respect, absurd.  Similarly, when one looks to the history at appeal book 177 – and I have set all the history out in our submissions; I will not go through that in detail – it is apparent that – I look at appeal book 177, line 35, there is reference to a letter dated 13 January 1993.  That is not in the appeal book but there is a quote from it and that acknowledges that “the Appellant”, that is Temwood, “advised the Hon. Minister that ‘the conditions meet with our approval.’”  They agreed with it.

CALLINAN J:   Mr Tannin, better, I suppose, from your point of view is on page 43, that seems to be the clearest possible acknowledgment that this is a condition that is relevant to the proposed subdivision.

MR TANNIN:   Yes.  I was going to take your Honours to ‑ ‑ ‑

CALLINAN J:   The respondent accepts that this is relevant to the subdivision.

MR TANNIN:   That is correct.  I was going to take your Honours to the - your Honour Justice Callinan queried where her Honour Justice McLure, whose decision we respectfully submit is correct, dealt with the question of whether there was any nexus between this condition and the proposed development.  Her Honour actually did make findings as to that at appeal book page 222, paragraphs 94 and 95, where her Honour acknowledged that:

The appellant –

in that case, that is Temwood –

in its submissions on ground 2.3 of the appeal did not expressly rely on the argument rejected . . . in Lloyd v Robinson that there was no relevant connection between the land the subject of the applications for subdivision and the Condition.

Her Honour observed at 95:

The Tribunal’s conclusion, clearly open on the evidence, was that the Condition reasonably related to the entire subdivision of the land and that the subdivisions the subject of the appeal were a stage of a larger development which had to be considered as an aspect of the whole.  This aspect of the Newbury test of validity is not in terms an independent ground of common law review.  However, if this requirement was not met it would justify or support a finding of ultra vires ‑ ‑ ‑

CALLINAN J:   Paragraph 96 at page 222, how is that to be reconciled with what was just said?

MR TANNIN:   Was that page 122, your Honour?

GUMMOW J:   No, 222, just below where you were.

CALLINAN J:   It seems to contradict what was otherwise said.  I just do not understand – it would be the opposite, I think.

MR TANNIN:   That is an observation about how the appellant conducted its appeal, but the point is ‑ ‑ ‑

CALLINAN J:   At that point, the respondent seemed to be attempting to say something quite different from ‑ ‑ ‑

MR TANNIN:   Yes.  I think that what her Honour is pointing out is that the way the matter was argued is different to the way the grounds were formulated, but if your Honour’s observation is correct, it nevertheless remains the point that there were findings in relation to the nexus between the condition and the land.  It was not implemented by a series of bureaucratic oversights but, in our respectful submission, nothing takes away the fact that the respondent agreed to it, and indeed, proposed it.

The second point we make is that in this case what occurred was a lawful exercise of planning power.  My learned friend, in answer to your Honour Justice Gummow querying the application of section 20A, stated baldly that it did not apply.  In our respectful submission, patently it does.

McHUGH J:   Yes, but your problem is what I would call the “kicker” in the condition, that is, the concluding words “such land to be ceded free of cost and without any payment by the Crown”.  If those words were not there, it seems to me as plain as a pikestaff, notwithstanding Mr Solomon’s submissions, that this condition would be within 20A and relevant to a planning matter, but the condition has added to it those words “such land to be ceded free of cost and without any payment by the Crown”.  You get no authority from 20A.  You have to rely on a general power under section 20, and as opposed, you have to face the compensatory provisions which assume that when a section like 20A operates, or 20 operates, the landholder will be entitled to compensation.

MR TANNIN:   Your Honour, the power in 20A is not restricted, is the first point I make.  The power must include the power to cede free of cost, that is, the effect, in our respectful submission, of understanding how 20C should operate.  If you look at 20C:

Where the Commission has approved a plan of subdivision of land upon condition that portion thereof be set aside and vested in the Crown for parks, recreation grounds or open spaces generally ‑ ‑ ‑

GUMMOW J:   That says you can pay money rather than hang onto the land?

MR TANNIN:   Yes.

McHUGH J:   In New South Wales, provisions like 20C have caused terrible problems.  Councils used to take money, for instance, under similar conditions in relation to parking.  They had a similar condition in relation to things such as parking.  So developers would prefer to pay money rather than provide off‑street parking, and now you have tremendous traffic problems as a result.

MR TANNIN:   I am conscious of the cases that deal with buying planning permission, and, indeed, some of the English appellate authorities my friend deals with are about that, but the point I make about 20C is it simply reflects the other side of the same coin, that if the Crown can take it, there is an alternative that is available, but in each case the value is taken, and we rely entirely on Lloyd v Robinson in relation to the taking of that value under the statute.  I have only to say in relation to the question of ‑ ‑ ‑

GUMMOW J:   Do we know the dates when 20A and 20C were added?  They are post Lloyd v Robinson, I think.

MR TANNIN:   Yes, I can, I think, pick that up pretty quickly.

HEYDON J:   Section 20C was first inserted in 1982.

MR TANNIN:   Section 20A was inserted by No 45 of 1962.  Your Honour, I have a compilation table to my Act.  It might just save time if I provide the compilation table and copy that for the Court.

CALLINAN J:   Together with full copies of all of the legislation at each of the relevant times.  Can you do that?

MR TANNIN:   Yes, I will do that, your Honour.  That second exercise might take a bit longer, but I will do that.

GUMMOW J:   And 20C, when did that go in?

HEYDON J:   1982.

MR TANNIN:   1982.

GUMMOW J:   That is certainly after Robinson.

MR TANNIN:   Yes.  Now, my friend repeatedly characterised the purposes of the appellant as some matters that were in evidence.  What is actually occurring is that he is confusing the legal effect of what occurred and extrapolating from that some wrong or improper purpose.  The only evidence of the purpose – if that is the right word – that is before the Tribunal, and, indeed, before this Court, is a statement at appeal book page 3, which is the statement of the respondent filed in the proceedings.  The passage that your Honour Justice Callinan referred to – if I might just interpolate while your Honours are coming to it – at appeal book page 176, paragraph 32, is a statement of the officer of the Environmental Protection Authority.  It is not a statement of the mind of the appellant Commission.

CALLINAN J:   Was that person called by the Commission, though?

MR TANNIN:   Yes, he was.

CALLINAN J:   He was the Commission’s witness, was he not? 

MR TANNIN:   He was the Commission’s witness, but he was talking about his own authority.  That is the point I make.  He is not from the Commission.

CALLINAN J:   No, but the Commission seems to have adopted the views of the Authority, has it not, in imposing the condition?

MR TANNIN:   It took account of the recommendations, but the point is that the only ‑ ‑ ‑

CALLINAN J:   Why call him to prove those matters, to say those things, unless the Commission was adopting them?

MR TANNIN:   Because the Commission was proving the environmental value of the land by reference to these consultative reviews.

CALLINAN J:   In any event, I am not sure that that is the only evidence.  I am not sure that you cannot draw an inference from the paragraph on page 43 that you referred us to.

MR TANNIN:   That may be open, your Honour, but the point is that the statement at appeal book page 3 is the statement by the respondent prepared under section 45 of the Act, which deals with the basis upon which it contested the appeal, and that is the only statement of its purposes that one can see in this appeal book.  I will not read that, bearing in mind your Honour Justice McHugh’s observation of a former Chief Justice.

The only other point we need make is that we rely entirely on the analysis by her Honour Justice McLure at pages 216 to 219 of the appeal book, particularly paragraphs 83, 85 to 86, 87, 88 through to 90, and the reliance on Westminster Bank.

GUMMOW J:   I think your opponent fixed, amongst other things, upon the first sentence of 86, which he said ignored or underplayed what was found in 85(a), in particular, the words “imply eventual”.

MR TANNIN:   In our submission, the only understatement in that area is the failure to refer to the provisions of the Town Planning Act. That is the only understatement. It is not a misstatement. Now, as to the other area that your Honour Justice Gummow raised before lunch, on the question of appeals, the relevant provisions as at the 2000 Act are contained in Part V, particularly section 36 onward.

CALLINAN J:   There has to be a question of law involved, does there not?

MR TANNIN:   If the appeal is not defined ‑ ‑ ‑

GUMMOW J:   It has to get to the court. 

MR TANNIN:   Sorry, your Honour, we are talking about the appeal from the ‑ ‑ ‑

CALLINAN J:   Tribunal to the court.

MR TANNIN:   No, from the Commission to the Tribunal, rather than from the Tribunal to the court. At the earlier stage, there is not a definition of what an appeal is. I just point out that section 36 deals with “all appeals within the meaning of this Part”.

GUMMOW J:   How did this get from the Commission to the Tribunal?  What section?  That is what I could not understand.

MR TANNIN:   The Act has been changed several times, but, under the appeal provisions at that time, an appeal was defined.  If you go to section 39, it contains the alternative appeal provisions.  They are not in the regulations, as my friend suggested earlier: 

An appeal may be made to the Minister or to the Appeal Tribunal –

and at the commencement of one, the other appeal is extinguished.  Relevantly, then, at section 44, the jurisdiction of the Appeal Tribunal is defined. 

There are some contest provisions or natural justice provisions in section 45.  Sections 51 and 52 you have already been taken to and ‑ ‑ ‑

CALLINAN J:   Section 51:

appellant shall not be restricted to the grounds . . . of appeal ‑ ‑ ‑

MR TANNIN:   That is right, and then the Tribunal is bound to notify persons if any other grounds are to be considered.  Then there is section 53 which requires the Appeal Tribunal to have regard to planning policies prepared pursuant to section 5AA of the Act which incorporate all of the earlier planning statements and materials that are referred to at appeal book 43.  They are my submissions.

McHUGH J:   Thank you, Mr Tannin.  The Court will reserve its decision in this matter.  We will adjourn until 10.15 am tomorrow.

AT 4.06 PM THE MATTER WAS ADJOURNED