Western Australian Planning Commission v Southregal Pty Ltd - [2017] HCA 7

HIGH COURT OF AUSTRALIA
KIEFEL, BELL, GAGELER, KEANE AND NETTLE JJ

Matter No P47/2016
WESTERN AUSTRALIAN PLANNING
COMMISSION  APPELLANT
AND
SOUTHREGAL PTY LTD & ANOR  RESPONDENTS
Matter No P48/2016
WESTERN AUSTRALIAN PLANNING
COMMISSION  APPELLANT
AND
TREVOR NEIL LEITH  RESPONDENT
Western Australian Planning Commission v Southregal Pty Ltd
Western Australian Planning Commission v Leith
[2017] HCA 7
8 February 2017
P47/2016 & P48/2016
ORDER
Matter No P47/2016
1.Appeal allowed.
2.Set aside orders (a) and (b) of the Court of Appeal of the Supreme Court of Western Australia made on 24 March 2016, and in their place order that:
(a)appeal allowed;
(b)the respondents pay the appellant's costs; and

(c)set aside orders 2, 3 and 4 of Beech J made on 22 December 2014, and in their place order that:
(i)the question of law be answered: No; and
(ii)the plaintiffs are to pay the defendant's costs.

3.The respondents pay the appellant's costs of the appeal to this Court.
Matter No P48/2016
1.Appeal allowed.
2.Set aside orders (a) and (b) of the Court of Appeal of the Supreme Court of Western Australia made on 24 March 2016, and in their place order that:
(a)appeal allowed;
(b)the respondent pay the appellant's costs; and
(c)set aside orders 2, 3 and 4 of Beech J made on 22 December 2014, and in their place order that:
(i)the question of law be answered: No; and
(ii)the plaintiff is to pay the defendant's costs.

3.The respondent pay the appellant's costs of the appeal to this Court.

On appeal from the Supreme Court of Western Australia
Representation
K M Pettit SC with T C Russell for the appellant in both matters (instructed by State Solicitor (WA))
D F Jackson QC with P McQueen for the respondents in both matters (instructed by Lavan)
Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS
Western Australian Planning Commission v Southregal Pty Ltd
Western Australian Planning Commission v Leith

Town planning (WA) – Compensation – Where land reserved for public purpose under planning scheme – Where s 173 of Planning and Development Act 2005 (WA) makes provision for landowner to be compensated where land injuriously affected by making or amendment of planning scheme – Where, under s 177, compensation not payable until land first sold after reservation or responsible authority refuses development application or grants application on unacceptable conditions – Where landowners purchased land affected by planning scheme after date of reservation – Where purchasers applied to develop land and were refused – Whether purchasers entitled to compensation.
Words and phrases – "compensation", "injurious affection", "planning scheme", "reservation".
Metropolitan Region Town Planning Scheme Act 1959 (WA), s 36.
Planning and Development Act 2005 (WA), ss 171, 173, 174, 176, 177.
Town Planning and Development Act 1928 (WA), ss 11, 12.

KIEFEL AND BELL JJ. The Peel Region Scheme is a planning scheme made pursuant to the provisions of the Planning and Development Act 2005 (WA) ("the PD Act"). It came into effect in March 2003[1] and relevantly reserved the land in question in these appeals for a public purpose, namely for regional open space. At that time the land was owned by persons other than the respondents. In October 2003 Southregal Pty Ltd ("Southregal") and Mr Wee, the respondents in the first appeal, purchased land affected by the reservation and in 2008 applied to develop it. In June 2003 Mr Leith, the respondent in the second appeal, purchased land affected by the reservation and in 2009 applied to develop it. Both applications were refused on account of the reservation. The respondents each claimed compensation pursuant to the provisions of Pt 11 of the PD Act. The claims were refused by the appellant, the Western Australian Planning Commission ("the WAPC"), on the basis that compensation under the PD Act was only available to the person who owned the land at the time of its reservation.
[1]Although the Peel Region Scheme came into effect prior to the commencement of the PD Act, the effect of the statutory regime is that any entitlement of the respondents to compensation for injurious affection is governed by the PD Act.
Each of the respondents brought proceedings in the Supreme Court of Western Australia, in which they claimed to be entitled to compensation. The Court directed that a Special Case be prepared. The primary judge (Beech J) stated the question arising on each Special Case as:
"Whether a person to whom s 177(2)(b) of [the PD Act] would otherwise apply can be entitled to compensation pursuant to ss 173 and 177(1)(b) of the PD Act, in circumstances where the land has been sold following the date of the reservation, and where no compensation has previously been paid under s 177(1) of the PD Act."
Beech J answered the question arising on each Special Case in the affirmative[2]. The Court of Appeal upheld that decision[3].
[2]Leith v Western Australian Planning Commission [2014] WASC 499.
[3]Western Australian Planning Commissionv Southregal Pty Ltd (2016) 49 WAR 487.
The provisions of Pt 11 of the PD Act
Part 11 of the PD Act makes provision for a landowner to be compensated, including where land has been injuriously affected by a planning scheme. Section 173(1) provides:
"Subject to this Part any person whose land is injuriously affected by the making or amendment of a planning scheme is entitled to obtain compensation in respect of the injurious affection from the responsible authority."
Section 174 details the circumstances in which land may be injuriously affected. Section 174(1) relevantly provides:
"Subject to subsection (2), land is injuriously affected by reason of the making or amendment of a planning scheme if, and only if –
(a)that land is reserved (whether before or after the coming into operation of this section) under the planning scheme for a public purpose;
…"
Section 176(1) provides that a claimant or responsible authority may apply to the State Administrative Tribunal to determine any question as to whether land is injuriously affected. Sub-section (2) provides that any question as to the amount and manner of payment of compensation is to be determined by arbitration, in the absence of agreement on some other method of determination.
Section 177(1) and (2) deals with when compensation "is payable" and to whom it is payable. It provides:
"(1)Subject to subsection (3), when under a planning scheme any land has been reserved for a public purpose, no compensation is payable by the responsible authority for injurious affection to that land alleged to be due to or arising out of such reservation until –
(a)the land is first sold following the date of the reservation; or
(b)the responsible authority –
(i)refuses an application made under the planning scheme for approval of development on the land; or
(ii)grants approval of development on the land subject to conditions that are unacceptable to the applicant.
(2)Compensation for injurious affection to any land is payable only once under subsection (1) and is so payable –
(a)under subsection (1)(a) to the person who was the owner of the land at the date of reservation referred to in subsection (1)(a); or
(b)under subsection (1)(b) to the person who was the owner of the land at the date of application referred to in subsection (1)(b),
unless after the payment of that compensation further injurious affection to the land results from –
(c)an alteration of the existing reservation of the land; or
(d)the imposition of another reservation of the land."
Section 177(3)(a) provides that, "[b]efore compensation is payable" under s 177(1), in the case of the first sale, the person appointed to determine the amount of compensation must be satisfied of three matters:
(i)the owner of the land has sold the land at a lesser price than the owner might reasonably have expected to receive had there been no reservation of the land under the planning scheme;
(ii)the owner before selling the land gave written notice to the responsible authority of the owner's intention to sell the land; and
(iii)the owner sold the land in good faith and took reasonable steps to obtain a fair and reasonable price for the land.
In the case of refusal of a development application, or approval on conditions unacceptable to the applicant, s 177(3)(b) provides that the person determining compensation must be satisfied that the application was made in good faith.
Section 178(1)(a) relevantly requires that a claim for compensation for injurious affection to land by the making or amendment of a planning scheme where land is reserved is to be made within six months of either the sale of the land, the refusal of a development application or its approval on unacceptable conditions.
Section 179(1) provides that the amount of compensation for injurious affection arising out of the land being reserved for public purposes is not to exceed the difference between the value of the land as so affected by the existence of the reservation and the value of the land if it were not so affected. Section 179(2) provides that the values are to be assessed as at the date on which the land is sold; an application for approval of development is refused; or the approval is granted subject to unacceptable conditions.
The focus of these appeals is on ss 173, 177(1) and 177(2).
Western Australian Planning Commission v Temwood Holdings Pty Ltd
In Western Australian Planning Commission v Temwood Holdings Pty Ltd[4], consideration was given by this Court to s 11 of the Town Planning and Development Act 1928 (WA) and s 36 of the Metropolitan Region Town Planning Scheme Act 1959 (WA) ("the MRTPS Act"). Section 11(1) is in terms substantively equivalent to s 173 of the PD Act; s 36(3)(a) and (b) is substantively equivalent to s 177(1)(a) and (b); and s 36(3a)(a) and (b) is substantively equivalent to s 177(2)(a) and (b). For ease of reference we will refer to the equivalent provisions of the PD Act when discussing the reasons in Temwood.
[4](2004) 221 CLR 30; [2004] HCA 63.
In Temwood, a developer purchased land that included coastal foreshore which had previously been reserved under a town planning scheme. The WAPC approved the development application for three subdivisions of the land subject to a condition in each case that the developer cede the relevant portion of the foreshore reserve to the Crown, free of costs and without compensation.
The condition was held to be valid. More relevantly for present purposes, what was described by Gummow and Hayne JJ as a "threshold issue" arose concerning the provisions equivalent to ss 173 and 177. As their Honours explained[5], if the developer, as successor in title to the owner of the land when the foreshore was reserved, enjoyed no statutory right to compensation for injurious affection, then much of its case would fail. Their Honours held that the developer was not entitled to claim compensation. McHugh J and Callinan J came to the opposite view. Heydon J considered that the issue did not arise and did not address it.
[5]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 67-68 [94].
McHugh J's reasons did not differ from those of Gummow and Hayne JJ on all aspects of the construction of the provisions in question. It was the introduction of the equivalent of s 177(2)(b) in 1986 which provided the critical point of departure in his Honour's reasons, as will be explained.
Gummow and Hayne JJ and McHugh J were agreed[6] that the equivalent of s 173(1) conferred on the owner of land injuriously affected by a planning scheme an entitlement to compensation. McHugh J considered[7] that the entitlement was best described as a "liberty" or "expectation". However, his Honour and Gummow and Hayne JJ considered[8] it to be possible that the nature of the entitlement was such that it might survive any repeal of the equivalent of s 173(1), by the application of the provisions of the Interpretation Act 1984 (WA)[9].
[6]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 45 [30] per McHugh J, 68 [95] per Gummow and Hayne JJ.
[7]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 45 [30].
[8]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 46 [31] per McHugh J, 68 [96] per Gummow and Hayne JJ.
[9]Interpretation Act 1984 (WA), s 37(1)(c).
These observations may be put to one side. The point made by McHugh J[10] was that the equivalent of s 177(1) had the effect of postponing the entitlement. Until one of the three events there listed occurred, "there is no interest, right or privilege that the owner of the Land could enforce against anyone"[11]. Gummow and Hayne JJ also held[12] that the equivalent of s 177(1) had the effect that the right to payment was deferred until one of those events occurred.
[10]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 45 [30].
[11]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 45 [31].
[12]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 70 [102].
The point of departure between Gummow and Hayne JJ and McHugh J is as follows. Gummow and Hayne JJ were of the view[13] that the equivalent of s 177(1) is to be construed by treating the deferral of the entitlement to payment as terminated upon the first of the three events to occur. Once one of the three events triggered a claim for compensation, the later occurrence of the two remaining events could not trigger a further claim. On this construction, because the land in question in these proceedings was first sold to the respondents by persons who owned the land at the date of reservation, the respondents are not able to claim compensation.
[13]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 70 [103].
McHugh J accepted that had the question in Temwood arisen before 1986, the better construction of the equivalent of s 177(1) would have yielded the result referred to above[14]. However, his Honour considered that the amendments made in 1986, which effectively inserted the equivalent of s 177(2)(b) ("the 1986 amendments"), changed the category of persons who could claim compensation.
[14]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 47-48 [37].
Prior to the 1986 amendments, the then s 36(3a) provided that[15]:
"Compensation for injurious affection to any land is payable only once under paragraph (a) of subsection (3) of this section and is payable to the person who was the owner of the land at the date of reservation referred to in that paragraph …" (emphasis added)
[15]Metropolitan Region Town Planning Scheme Act 1959-1982 (WA), s 36(3a).
In 1986[16], the part emphasised became, with a few minor changes, par (a) of s 36(3a). It referred to compensation payable under s 36(3)(a), which is the equivalent of s 177(1)(a). There was then inserted a par (b) into s 36(3a), in essentially the same terms as s 177(2)(b), which is set out above. It referred to compensation payable under the equivalent of s 177(1)(b) and provided that it is payable to "the person who was the owner of the land at the date of application". It may be observed that the equivalent to s 173(1) was not amended at the time the equivalent of s 177(2)(b) was inserted.
[16]Metropolitan Region Town Planning Scheme Amendment Act 1986 (WA), s 9.
The respondents contend that these amendments must be taken to acknowledge that the owner of the land at the date of application for development approval may be a different person from the person who was the owner of the land at the date of reservation.
It may be inferred that Gummow and Hayne JJ did not consider that the equivalent of s 177(2)(b) had any effect on the operation of the statutory scheme. It did not entitle a subsequent purchaser, such as the developer in that case, to claim compensation. Their Honours considered that its inclusion might simply accommodate special situations, such as the death of the owner before sale or development applications made by those taking the land by testamentary or intestate succession[17], but that par (b) did not have any application where there has been a sale by the owner as indicated in par (a).
[17]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 71 [108].
McHugh J, on the other hand, considered[18] that the inclusion of the provision meant that the equivalent of s 173(1) could no longer operate to confine the persons entitled to receive compensation. In his Honour's view, the equivalent provision to s 177(2)(b) must be given effect in its terms, which apply it to a subsequent owner.
[18]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 48 [38].
His Honour considered[19] it to be an unlikely construction that that provision would operate only where the owner at the date of reservation made a development application or where land was conveyed other than by sale, for example by will or operation of law. In his Honour's view, a purchaser who was not the owner at the date of reservation and whose development application was refused or was approved subject to unacceptable conditions may be entitled to compensation, for otherwise the words "owner of the land at the date of application" would have little scope for operation. His Honour concluded that the provision must be regarded as giving an independent claim of compensation unrelated to the fact of ownership at the date when the scheme was made.
[19]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 48-49 [40].
McHugh J does not appear to have considered how this construction of the equivalent of s 177(2)(b), extending the right to claim compensation, is conformable with the terms and effect of the equivalent of s 173(1). Callinan J did and held[20] that the provision equivalent to s 173(1) should not be read as confined to persons who actually owned the land at the time the scheme was made. Gummow and Hayne JJ rejected such a construction. Their Honours considered that the equivalent of s 173(1), and the words "by the making of" appearing in it, controlled the provisions which followed[21].
[20]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 89-90 [161].
[21]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 70 [102].
The courts below
The primary judge adopted the approach of McHugh J to the construction of s 177(2). Beech J held[22] that s 177(1) and (2), read together, provided for two alternative, independent rights to compensation. Further, in defining, in s 177(2)(b), the class of persons who might claim compensation under s 177(1)(b), Parliament had specifically chosen to distinguish the position under s 177(1)(a), so as to include a person who is the owner at the date of the development application but who need not have been the owner at the date of reservation[23]. The Court of Appeal upheld that decision. Martin CJ, with whom Newnes JA and Murphy JA agreed, said[24] that s 177(2) is specifically directed to the identification of the person entitled to claim compensation. It expressly refers to the entitlement of two classes of persons: the owner at the date of the reservation; and the owner at the date of an application for development approval which is refused or is approved subject to unacceptable conditions.
[22]Leith v Western Australian Planning Commission [2014] WASC 499 at [50].
[23]Leith v Western Australian Planning Commission [2014] WASC 499 at [52].
[24]Western Australian Planning Commissionv Southregal Pty Ltd (2016) 49 WAR 487 at 515-516 [110], [112]-[113].
The construction of the relevant provisions

The relevant part of Pt 11 has a discernible structure. The provisions in question deal with different subject matters but are to be read together.
Entitlement to compensation
There can be no doubt that s 173(1) confers an entitlement to compensation in the event that land is injuriously affected by a planning scheme. It confers an entitlement on the landowner, as evinced by the words "any person whose land". This is confirmed by s 173(3), which provides that "[a] responsible authority may make agreements with owners for the development of their land during the time that the planning scheme or amendment is being prepared". Some such provision for compensation has been provided at least since 1928[25].
[25]Town Planning and Development Act 1928 (WA), s 11.
That entitlement is provided because the person's land is injuriously affected by "the making or amendment of a planning scheme". These words are reiterated in ss 174(1) and 175. Pursuant to s 174(1)(a), land is injuriously affected if it is reserved for a public purpose. Section 179 acknowledges that the value of land reserved under a planning scheme may be affected by the existence of the reservation.
In Temwood, Gummow and Hayne JJ, adopting what was said by Ipp J (Wallwork and Owen JJ agreeing) in Bond Corporation Pty Ltd v Western Australian Planning Commission[26], said[27] that the legislation may be seen to recognise that owners of land suffer loss merely by the reservation of land for public purposes, without any action on their part. They suffer loss by way of a reduction in the market value of their land by reason of the reservation.
[26](2000) 110 LGERA 179 at 187-188 [34].
[27]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 68 [95].
No reference is made in s 173(1) to a person who purchases land which is already affected by a reservation. It does not suggest that anyone but a landowner at the time of reservation will be entitled to compensation. A purchaser does not fall within the description of a person whose land is affected "by the making" of a planning scheme. A purchaser would only be entitled to compensation if there was, subsequent to that person becoming the owner, an amendment of the planning scheme which injuriously affected the purchaser's land.
Compensation is payable
Section 173(1) provides for an entitlement "to obtain compensation". It does not say it is payable on the event of reservation. Section 177(1) provides the point at which a responsible authority becomes liable to pay compensation. According to that provision, compensation will not be payable "until" either (a) the land is first sold; or (b) a development application is refused or is approved on conditions unacceptable to the applicant. It follows that it is only when one of these three events occurs that a claim may be made for compensation.
It appears to us also to follow from the use of the disjunctive "or" that once one of the three events triggers a claim for compensation, the later occurrence of the other two events cannot trigger a further claim, as was held[28] by Gummow and Hayne JJ in Temwood. The reference in s 177(2) to compensation being "payable only once" supports this construction[29]. It further follows that in the present case, since the land has been "first sold" to the respondents, the refusal of their development application cannot trigger a further claim.
[28]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 70 [103].
[29]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 71 [108].
The respondents submit that this is not a correct construction of s 177(1) and that it requires the words "the first to occur of" to be read into s 177(1). That submission should not be accepted. It is not necessary to read words into s 177(1) for it to operate in the way described. It follows from the structure and language of the provision, as explained above. It is not possible, as the respondents submit, to read the sub-section as allowing a claim for compensation despite the fact that it has been "first sold".
The respondents also rely upon what was said by the Court of Appeal with respect to the position of a purchaser from the owner at the time of reservation. Martin CJ considered[30] that a purchaser could have a claim to compensation in the event that the vendor had not claimed compensation. In these proceedings, it would appear that the owners of the land at the time of its reservation did not claim compensation when the land was sold to the respondents.
[30]Western Australian Planning Commissionv Southregal Pty Ltd (2016) 49 WAR 487 at 514 [103]-[105].
Section 177(1) does not identify who may claim compensation. It states three events, one of which will trigger an entitlement to make a claim for compensation. It does not need to identify who may make a claim. Section 173(1) has already done so. The person entitled to obtain compensation is the owner of the land when it is reserved.
Reading the words "payable only once", which appear in s 177(2), with s 177(1) does not advance the construction for which the respondents contend. Those words do not convey that compensation must be paid at least once. If one assumes that every owner of land which is reserved will suffer some loss, an assumption which appears to be made by the statute, the fact that an owner might not make a claim for compensation is not comprehended by the statute and it makes no provision for it.
Something further needs to be said concerning the persons involved in the events referred to in s 177(1), before turning to s 177(2).
The owner of the land at the time that it is reserved is, obviously enough, the person referred to in the first event, that is, the person who may first sell after reservation. The owner may also be the person who makes an application for development on the land which is refused or is approved subject to unacceptable conditions. But s 177(1) also allows for the possibility that another person might be the applicant, a person who is not an owner at all. That possibility arises from the reference in s 177(1)(b)(ii) to the conditions being unacceptable to "the applicant", not the owner. Section 177(3)(b) likewise refers to "the applicant".
It is not difficult to understand why these provisions do not assume that only an owner of land could, or would, apply for development approval. Not all landowners could afford to develop their land or wish to bear the cost of an application to develop, particularly over land the subject of a reservation for public purposes. A developer, however, might wish to investigate the likelihood of approval before committing to a purchase. The form provided for such an application under the Peel Region Scheme[31] would appear to allow for this possibility, provided that the application was made with the consent of the owner of the land.
[31]Peel Region Scheme (WA), cl 28, Sched 1.
It is with this understanding, and an understanding of the scheme of the provisions generally, that one approaches s 177(2).
"Payable to" and s 177(2)(b)
Section 177(2) is not concerned with the identification of persons who may claim compensation. Rather, the purpose of s 177(2) is to identify the person to whom payment is to be made. This identification occurs after a claim is made and the responsible authority has agreed to pay compensation or a determination has been made that it must be paid.
It seems to us that s 177(2)(b) is simply concerned to ensure that, whoever was the applicant for development approval, the payment must be made to the owner. In drafting s 177(2) and its predecessor it may have been overlooked that, in reality, the owner referred to in par (b) would in fact be the owner of the land at the date of reservation. A refusal of an application for development or its approval on unacceptable conditions could only trigger a claim for compensation under s 177(1)(b) if the land had not been first sold by the owner at the date of reservation. In that case it would be retained by that owner.
It does not seem to us to matter unduly that s 177(2)(b) is not really necessary. The rationale for it – its intended operation – is clear enough. It was intended to ensure that payments were made to owners and not to someone else. It was not intended to extend the category of persons who could make a claim for compensation upon the refusal, or approval on unacceptable conditions, of a development application beyond persons identified by s 173(1).
Nothing in the provisions of Pt 11 suggests that a subsequent purchaser of land, rather than its owner at the time of the reservation, was to be a claimant for compensation. The references to "first sold" and "payable only once" point the other way.
In the second reading speech of the Bill which, in 1968, added the reference to compensation being payable "only once"[32], the responsible Minister said[33]:
"The provision for the payment of compensation in such cases was designed to protect the owner of land at the time the scheme – or an amendment – included land in a reservation so that when he later sells the property he is compensated by the authority if he is unable to realise the full market value. Subsequent purchasers are aware of the scheme provisions at the time of purchase … and would not be at the same disadvantage as the original owner."
This statement recognises what may be obvious enough. A purchaser may be taken to be aware of the status of land, as subject to reservation, and may be expected to adjust the purchase price accordingly. This is the loss which the statute predicts the original owner will suffer.
[32]Metropolitan Region Town Planning Scheme Act Amendment Act 1968 (WA), s 3(d).
[33]Western Australia, Legislative Council, Parliamentary Debates (Hansard), 3 September 1968 at 754.
The MRTPS Act was relevantly amended again in 1969 to add the words "and is payable to the person who was the owner of the land at the date of reservation"[34]. Martin CJ in the Court of Appeal[35] referred to two – apparently conflicting – statements made by the Minister for Town Planning with respect to this amendment. In the second reading speech the Minister[36] said that:
"Subsequent owners are expected to acquaint themselves with details affecting the land before purchasing",
but went on to say:
"Such owners are, of course, protected by the provisions relating to development and compensation in the event of an adverse decision by the authority."
[34]Metropolitan Region Town Planning Scheme Act Amendment Act 1969 (WA), s 2.
[35]Western Australian Planning Commissionv Southregal Pty Ltd (2016) 49 WAR 487 at 503-504 [57].
[36]Western Australia, Legislative Council, Parliamentary Debates (Hansard), 4 November 1969 at 2098.
However, in response to a question from the Deputy Leader of the Opposition in the Legislative Assembly, the Minister for Education confirmed[37] that the Bill introducing the amendment:
"is designed to ensure that the owner at the time of reservation, and he alone, will be compensated for any loss of value due to reservations." (emphasis added)
[37]Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 1969 at 2608.
Up until 1986 the legislation consistently referred only to the owner of land at the time the planning scheme came into effect as entitled to obtain compensation. It was concerned to compensate the owner for what was recognised to be an injurious affection to the land by the planning scheme.
The courts below considered that the 1986 amendments changed this position. However, one would have to wonder why Parliament would then suddenly decide to extend that entitlement to subsequent purchasers by permitting them to claim compensation when their development application was refused or subjected to unacceptable conditions. They do not suffer the loss that the original owner has suffered. The circumstances relating to the respondents furnish examples. Southregal and Mr Wee purchased their land for $2.6 million and claim compensation of $51.6 million; Mr Leith paid $1.28 million for his land and now claims $20 million in compensation.
There is no background from which it may be inferred that the 1986 amendments had the effect for which the respondents contend and which the courts below held. Further, at the time the Bill which inserted the equivalent of s 177(2)(b) was read the second time, the Minister for Planning said[38] that:
"The matters provided for in this Bill do not constitute major changes to the present … legislation".
This was repeated in the Legislative Council[39]. The responsible Ministers identified the concern to which the amendments with respect to the payment of compensation were addressed as claims being paid more than once in relation to the same portion of land.
[38]Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 12 June 1986 at 173.
[39]Western Australia, Legislative Council, Parliamentary Debates (Hansard), 2 July 1986 at 1199.
A construction of s 177(2)(b) which does not read it as referable to a subsequent purchaser who makes a development application has the advantage of consistency, which, after all, is the primary object of statutory construction[40]. Sections 173 and 177(1) and (2) may be understood to refer to the owner at the time of reservation as the person entitled to compensation; the person who claims compensation; and the person to whom compensation is paid.
[40]Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 [69]; [1998] HCA 28.
The construction favoured by the Court of Appeal, on the other hand, would be productive of inconsistency as between ss 173 and 177(2). Instead of s 173 conferring an entitlement only on the owner at the time of reservation, if s 177(2) is to have the operation which the Court of Appeal held, an entitlement to compensation must be taken somehow to run with the land and pass to the subsequent owner. An argument to that effect was rejected by Gummow and Hayne JJ in Temwood[41].
[41]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 69-70 [100]-[102].
In Temwood, Callinan J implicitly acknowledged that an inconsistency would arise, for his Honour considered it necessary[42] to read the equivalent of s 173(1) so as to permit a broadening of the class of claimant. However, the proper construction of s 177(2)(b) does not necessitate such a drastic step. The opening words of s 173(1) – "Subject to this Part" – do not warrant reading s 173(1) as subject to a provision dealing with another topic. In context, those words merely require that s 173(1) be read with what follows. This is not to say that s 173(1) should be regarded as the controlling provision, as the appellant submits, but simply that it be read with s 177(1) and (2) so that it produces a harmonious result.
[42]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at 89-90 [161].
Lastly, whilst it must be accepted that words chosen by the legislature should be given meaning and endeavours should be made to avoid them being seen as redundant, they should not be given a strained meaning, one at odds with the scheme of the statute. Moreover, it has been recognised more than once that Parliament is sometimes guilty of "surplusage" or even "tautology"[43]. The possibility that Parliament may not have appreciated that the reference in s 177(2)(b) was not necessary, and was liable to confuse, is not a reason for giving it a literal interpretation[44].
[43]Leon Fink Holdings Pty Ltd v Australian Film Commission (1979) 141 CLR 672 at 679; [1979] HCA 26; Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531 at 589; see also Beckwith v The Queen (1976) 135 CLR 569 at 574; [1976] HCA 55.
[44]See Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 12; [1992] HCA 64.
Conclusion
The appeals should be allowed with costs. The orders of the Court of Appeal should be set aside and in lieu thereof it should be ordered that the appeals from the decision of Beech J made on 22 December 2014 be allowed with costs and the answer to the question of law for determination in each Special Case and the declarations made by his Honour be set aside. The question of law stated for determination in each Special Case should be answered "no". The respondents should pay the costs of the hearing before Beech J.
GAGELER AND NETTLE JJ. Section 177(2) of the Planning and Development Act 2005 (WA) ("the PD Act") stipulates to whom compensation is payable if land is injuriously affected by the making or amendment of a planning scheme reserving land for public purposes. The issue in these appeals is whether s 177(2) of the PD Act affords a right of compensation only to the owner of the land at the time of the land's reservation under the planning scheme or whether s 177(2) also affords an alternative right of compensation to a subsequent purchaser of the injuriously affected land. The judge at first instance (Beech J) and the Court of Appeal of the Supreme Court of Western Australia (Martin CJ, Newnes and Murphy JJA agreeing) held for the latter. For the reasons which follow, we consider that the right of compensation is confined to the former and, on that basis, that the appeals to this Court should be allowed.
The facts and relevant legislation are as set out in the reasons of Kiefel and Bell JJ and need not be repeated.
Proceedings at first instance
At first instance, the following question of law was said to arise in each case from the special case[45]:
"Whether a person to whom s 177(2)(b) of the [PD Act] would otherwise apply can be entitled to compensation pursuant to ss 173 and 177(1)(b) of the PD Act, in circumstances where the land has been sold following the date of the reservation, and where no compensation has previously been paid under s 177(1) of the PD Act."
[45]Leith v Western Australian Planning Commission [2014] WASC 499 at [15].
In answering that question, Beech J acknowledged that, "considered in isolation", the natural reading of s 173 is that it provides compensation only to a person who owns land at the time that a planning scheme is made or amended and thereby injuriously affects the land, and requires that the injurious affection must arise from the making or amendment of the planning scheme, as opposed to its existence[46]. But, his Honour said, to read s 173 as so imposing an unqualified temporal restriction on the entitlement to compensation would be inconsistent with the terms of s 177(2)(b)[47]:
"In defining, in s 177(2)(b), the class of persons entitled to make a claim under s 177(1)(b), Parliament has specifically, and unmistakeably, chosen to distinguish the position under s 177(1)(a). Under s 177(1)(a), it is those who own at the time of reservation who can claim. Under s 177(1)(b), it is those who own at the time of the development application. The legislature can be taken to know that most owners acquire title by purchase. One of the two alternative triggering events in s 177(1) is the first sale. In those circumstances, if the legislature had intended that:
(1)upon the first of the alternative triggering events in s 177(1)(a) and s 177(1)(b), the single right to compensation is exhaustively activated; and
(2)thus upon the first sale of the land no further claim for compensation could ever be made;
I think it unlikely that the legislature would have chosen to define the class of persons upon whom the right to claim compensation under s 177(1)(b) was conferred by the general words 'the person who was the owner at the date of the application'. In my view, there is no sufficient foundation in s 177, or elsewhere in pt 11 of the PD Act, for treating the general words of s 177(2)(b) as intended to capture only a (relatively small) subset of those within the ambit of the words used, namely only those who acquired title other than by sale. For these reasons, I consider that the breadth and generality of the language of s 177(2)(b) provides strong support for [the respondents'] construction."
[46]Leith [2014] WASC 499 at [42].
[47]Leith [2014] WASC 499 at [44], [52].

Beech J concluded[48] that the language of s 177(1) and (2) read together is consistent with the creation of two alternative but otherwise independent rights: the first in favour of the owner of the land at the date it is reserved under a planning scheme, being a right to claim compensation when the land is first sold following reservation; and the second in favour of the owner of the land at the date that a development application is made in respect of the land, being a right to claim compensation when and if the application is refused, or granted on unacceptable conditions.
[48]Leith [2014] WASC 499 at [50].
Proceedings in the Court of Appeal
The reasoning of the Court of Appeal was substantially to the same effect and, in the result, Martin CJ, with whom Newnes and Murphy JJA agreed, held that Beech J was correct[49]: on the proper construction of s 177(2)(b) of the PD Act, a person who was not the owner of the land at the time it was reserved for a public purpose, but who acquired the land by purchase after reservation, and who was the owner at the time an application for approval of development on the land was refused, or granted subject to unacceptable conditions, has an entitlement to compensation for injurious affection, provided that compensation arising out of the relevant reservation has not previously been paid.
[49]Western Australian Planning Commission v Southregal Pty Ltd (2016) 49 WAR 487 at 492 [9], 515-516 [110] per Martin CJ (Newnes and Murphy JJA agreeing at 516 [112], [113]).
Constructional choice
In Western Australian Planning Commission v Temwood Holdings Pty Ltd[50], this Court was divided as to the proper construction of s 36(1), (3) and (3a) of the Metropolitan Region Town Planning Scheme Act 1959 (WA) ("the MRTPS Act"). Those provisions were the legislative predecessors of, and in relevant respects identical in their effect to, ss 173 and 177(1) and (2) of the PD Act. Gummow and Hayne JJ held[51] that s 36(1)[52] established but one entitlement to compensation, which inured in favour only of the owner of the land at the date of the making of a relevant planning scheme, and that the effect of s 36(3) (now, in effect, s 177(1) of the PD Act) was to defer the enforceability of that right until the first to occur of the sale of the land or the rejection, or grant subject to conditions unacceptable to the applicant, of an application for development approval made by the owner of the land. Their Honours reasoned that s 36(3a) (now, in effect, s 177(2) of the PD Act) supported that conclusion. They posited that the reference in s 36(3a)(b) (now, in effect, s 177(2)(b) of the PD Act) to the owner of the land at the date of application "accommodates such special situations as the death by the owner before any sale and the making of a development application by those volunteers taking the land by testamentary or intestate succession from that owner"[53], and does not apply to purchasers of the land.
[50](2004) 221 CLR 30; [2004] HCA 63.
[51]Temwood (2004) 221 CLR 30 at 70 [102]-[103].
[52]Section 36(1) incorporated, and provided for the application of, ss 11 and 12 of the Town Planning and Development Act 1928 (WA).
[53]Temwood (2004) 221 CLR 30 at 71 [108].
McHugh J held[54], to the contrary, that it was impossible to escape the conclusion that s 36(3a)(b) applied to a subsequent owner, and that there was no reason to confine the class of subsequent owner to those who had obtained ownership otherwise than by purchase of the land. His Honour was of the view[55] that Gummow and Hayne JJ's explanation of s 36(3a)(b), as providing for the special situations of testate and intestate succession, was such an "unlikely construction that it must be rejected". McHugh J concluded[56] that s 36(3a)(a) and (b) created two independent rights and that there was no reason to think that one of those rights should lapse where the other was not pursued.
[54]Temwood (2004) 221 CLR 30 at 48 [38].
[55]Temwood (2004) 221 CLR 30 at 48-49 [40].
[56]Temwood (2004) 221 CLR 30 at 49 [41].
To similar effect, although for different reasons, Callinan J held[57] that, upon its correct construction, s 11(1) of the Town Planning and Development Act 1928 (WA) ("the TPD Act") (which was imported by s 36(1) of the MRTPS Act (see now, s 173 of the PD Act)) did not confine the right to compensation to the owner of the land at the time of a reservation. It afforded a right to compensation to "[a]ny person" whose land was injuriously affected by the making of a planning scheme and, in Callinan J's view, that included any person who owned the land at the time of reservation or subsequently, if affected by its reservation. Callinan J did not accept that s 36(3) should be read as confined to the first to occur of the sale of the land or the rejection, or grant subject to unacceptable conditions, of a development application, but considered that s 36(3a) prevented double or multiple payments[58]. Heydon J found[59] it unnecessary to deal with the point.
[57]Temwood (2004) 221 CLR 30 at 89-90 [161].
[58]Temwood (2004) 221 CLR 30 at 90-91 [164]-[167].
[59]Temwood (2004) 221 CLR 30 at 95 [180].
As Martin CJ observed[60] in the Court of Appeal, given the division of opinion in Temwood, it is surprising that the Parliament did not make any change to the form of s 36(3a) of the MRTPS Act when the provision was reconstituted as s 177(2) of the PD Act in 2005. Its retention makes it necessary for this Court now to choose between the competing interpretations of s 36(3a) of the MRTPS Act expressed in Temwood.
[60]Southregal (2016) 49 WAR 487 at 497 [30].
Standing alone, s 177(1) of the PD Act conveys the meaning that there is but one right to compensation, which inures in favour of a person whose land is injuriously affected by its reservation for a public purpose under a planning scheme and which becomes payable to that person only once upon the first to occur of the two events specified in pars (a) and (b) of s 177(1)[61]. As will become apparent, that meaning also accords with the legislative predecessors of s 177(1). By contrast, if the purpose of s 177(1) were to create two independent rights to compensation (and assuming that were consistent with the remaining provisions of Pt 11, Div 2 of the PD Act) - as Beech J and the Court of Appeal held to be the case - it is to be expected that s 177(1) would have been drafted in terms that compensation is not payable:
(a)under par (a), until the land is first sold following the date of the reservation; and
(b)under par (b), until the responsible authority refuses an application made under the planning scheme for approval of development on the land or grants approval of development on the land subject to conditions that are unacceptable to the applicant.
[61]See and compare Kettering Pty Ltd v Noosa Shire Council (2004) 78 ALJR 1022 at 1028-1029 [28]-[30]; 207 ALR 1 at 9-10; [2004] HCA 33; Temwood (2004) 221 CLR 30 at 70-71 [103]-[108] per Gummow and Hayne JJ.
Admittedly, as McHugh J identified in Temwood[62] in relation to s 36(3a) of the MRTPS Act, the difficulty with construing a provision like s 177(1) as providing for compensation to be payable only once upon the first to occur of the two events specified in pars (a) and (b) of s 177(1) is the difference between the way in which the payee is described in s 177. Section 177(2)(a) provides that, where compensation becomes payable upon the first sale of the land following its reservation under a planning scheme, it is payable to "the owner of the land at the date of reservation". In contrast, s 177(2)(b) provides that, where compensation becomes payable upon refusal, or grant subject to unacceptable conditions, of an application for development approval, it is payable to "the owner of the land at the date of application". The difference might be thought to suggest that the owner of the land at the date of the application for development approval could be a person other than the owner of the land at the date of the reservation of the land. That would create the possibility of compensation consequent upon the refusal, or grant subject to unacceptable conditions, of an application for development approval not becoming payable until after the first sale of the land following the reservation. But, as will be seen, the history of the legislation and the extrinsic materials demonstrate that that is not the purpose of the provision.
[62]Temwood (2004) 221 CLR 30 at 47-48 [35]-[38].
History of the legislation - s 177 of the PD Act and its predecessors
Consideration of a statutory provision's legislative history, and particularly the provision's predecessors, serves to illuminate the meaning most apt to be attributed to it, especially where its meaning appears equivocal[63]. The history of this legislation begins with the TPD Act. So far as is relevant, ss 11 and 12 of the TPD Act provided that:
"11 (1) Any person whose land or property is injuriously affected by the making of a town planning scheme shall, if such person makes a claim within the time, if any, limited by the scheme (such time not being less than six months after the date when notice of the approval of the scheme is published in the manner prescribed by the regulations), be entitled to obtain compensation in respect thereof from the responsible authority[.]
...
(3) Where a town planning scheme is altered or revoked by an order of the Minister under this Act, any person who has incurred expenditure for the purpose of complying with the scheme shall be entitled to compensation from the responsible authority, in so far as any such expenditure is rendered abortive by reason of the alteration or revocation of the scheme.
...
12 (1) Where land or property is alleged to be injuriously affected by reason of any provisions contained in a town planning scheme, no compensation shall be payable in respect thereof if or so far as the provisions are also contained in any public general or local Act, or in any order having the force of an Act of Parliament, in operation in the area, or are such as would have been enforceable without compensation, if they had been contained in by-laws lawfully made by the local authority."
[63]Beckwith v The Queen (1976) 135 CLR 569 at 578-583 per Mason J; [1976] HCA 55; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 306 per Gibbs CJ, 310-311 per Stephen J, 319-323 per Mason and Wilson JJ, 324, 334 per Aickin J; [1981] HCA 26. Cf Pearce and Geddes, Statutory Interpretation in Australia, 8th ed (2014) at 88-89 [3.2]. See also Interpretation Act 1984 (WA), s 19(1).
Plainly enough, s 11(1) of the TPD Act created but one right to compensation - a right which inured solely in favour of the owner of the land at the time of the making of the town planning scheme - in respect of injurious affection caused to land by the making of a town planning scheme. That was necessarily implicit in the way in which the provision framed injurious affection as an event coincidental with the making of a town planning scheme the occurrence of which immediately gave rise to a right to compensation in the person "whose land" was affected by the event of injurious affection. As is also apparent, the right to compensation so created was liable to be defeated unless the owner of the land at the time of the making of the town planning scheme made his or her claim for compensation within the time limited by the scheme.
The next step was the enactment in 1959 of the MRTPS Act, which established the Metropolitan Region Scheme consequent upon a report commissioned by the Western Australian Government published in 1955 and entitled Plan for the Metropolitan Region: Perth and Fremantle: Western Australia[64]. Section 36 of the MRTPS Act in effect imported ss 11 and 12 of the TPD Act and applied them to the Metropolitan Region Scheme, in modified form, as follows[65]:
[64]Stephenson and Hepburn, Plan for the Metropolitan Region: Perth and Fremantle: Western Australia, (1955).
[65]As it appeared immediately prior to its amendment in 1968, discussed below at [74]-[76].
"(1)     For the purposes of applying the provisions of sections eleven and twelve of the [TPD] Act to the provisions of the [Metropolitan Region] Scheme, the former provisions shall be read and construed as if -
(a)the [Metropolitan Region Planning] Authority were the 'responsible authority or local authority' wherever referred to in the sections; and
(b)the passage, 'varied, amplified or revoked by the Authority' were substituted for the passage, 'altered or revoked by an order of the Minister under this Act' in subsection (3) of section eleven; and
(c)those provisions included subsections (3), (4), (5) and (6) of this section.
...
(3)      Subject to subsection (4) of this section, where under the Scheme any land has been reserved for a public purpose, no compensation is payable by the responsible authority for injurious affection to that land alleged to be due to or arising out of such reservation until -
(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.
(4)      Before compensation is payable under subsection (3) of this section -
(a)where the land is sold, the person lawfully appointed to determine the amount of the compensation shall be satisfied -
(i)that the owner of the land has sold the land at a lesser price than he might reasonably have expected to receive had there been no reservation of the land under the Scheme;
(ii)that the owner before selling the land gave notice in writing to the responsible authority of his intention to sell the land; and
(iii)that the owner sold the land in good faith and took reasonable steps to obtain a fair and reasonable price for the land; or
(b)where 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, the person lawfully appointed to determine the amount of compensation shall be satisfied that the application was made in good faith.
(5)      A claim for compensation under subsection (3) of this section shall be made at any time within six months after 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.
(6)(a) Subject to this section, the compensation payable for injurious affection due to or arising out of the land being reserved under the scheme for a public purpose, where no part of the land is purchased or acquired by the Authority, shall not exceed the difference between -
(i)the value of the land as so affected by the existence of such reservation; and
(ii)the value of the land as not so affected.
(b)      The value referred to in subparagraphs (i) and (ii) of paragraph (a) of this subsection shall be assessed as at the date the land is sold as referred to in paragraph (a) of subsection (3) of this section or 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."
In the second reading speech relating to the introduction in 1962 of sub‑ss (3)-(5) into s 36 of the MRTPS Act, the Minister explained that the relevant statutory body lacked sufficient immediate resources to compensate all owners whose land might be injuriously affected by the reservation of the large amounts of land which were to be reserved under the Metropolitan Region Scheme. In order to overcome that difficulty, the purpose of s 36(3) was to defer the need to pay compensation until the injurious affection resulting from the reservation of the land came home to the owner upon sale of the land or upon rejection, or grant subject to unacceptable conditions, of an application for development approval[66]:
"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 when development is frustrated by a refusal of consent under the scheme. The amendment proposes that compensation for injurious affection be limited to two circumstances: where a sale is effected at a depressed value attributable to reservation under the scheme, or where consent to develop is refused on the ground of reservation under the scheme."
[66]Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 4 September 1962 at 820.
Pausing here, the following points may be noted:
(1)By so importing the provisions of s 11(1) of the TPD Act, s 36(1) of the MRTPS Act created a right to compensation - which inured solely in favour of the owner of the land at the time of the making of the relevant town planning scheme - for the injurious affection caused to the owner's land due to or arising out of the making of the scheme.
(2)By s 36(3) of the MRTPS Act, the enforceability of the right to compensation so created by s 36(1) was deferred so as not to become "payable" until and unless the land were first sold or the relevant statutory body refused an application for development approval or granted the application on conditions which were unacceptable to the applicant.
(3)Because the right to compensation created by s 36(1) inured solely in favour of the owner at the time of the making of the relevant town planning scheme, it was necessarily implicit in s 36(3) that the deferral of the enforceability of that right was a deferral until the first to occur of the first sale of the land following its reservation under the scheme, or a refusal, or grant subject to unacceptable conditions, of an application for development approval.
(4)Perforce of s 36(4)(a)(ii), in the case of the sale of the land, compensation was not "payable" unless, before selling the land, the owner gave notice in writing to the responsible authority of the owner's intention to sell the land.
(5) Perforce of s 36(6)(b):
(a)in the case of a claim for compensation due to or arising out of the sale of the land, compensation was to be assessed as at the date of sale; and
(b)in the case of a claim for compensation arising out of an application for approval to carry out development on the land being refused, or being granted subject to conditions unacceptable to the applicant, compensation was to be assessed as at the date of the refusal, or grant subject to unacceptable conditions, of the application.
(6)In either case, compensation was not payable unless the owner of the land at the time it was reserved made his or her claim for compensation within six months after the first sale of the land, or after the refusal, or grant subject to unacceptable conditions, of an application for development approval, as required by s 36(5).
(7)Since the owner of the land at the date of the reservation under the scheme was the only person capable of making the first sale of the land following the reservation, he or she was referred to in s 36(4)(a)(i), in relation to a claim for compensation consequent upon that sale, as "the owner of the land".
(8)By contrast, since it was possible for a person other than the owner of the land at the date of reservation to make an application for approval to develop the land before the first sale of the land following reservation, s 36(3)(b), (4)(b) and (6)(b) referred, in relation to a claim for compensation consequent upon refusal, or grant subject to unacceptable conditions, of such an application, to conditions that were unacceptable to "the applicant", rather than unacceptable to the owner.

The Planning Commission submitted that the assessment of compensation is governed by s 179(1), so that, whether at first sale or upon a development application, the assessment is based on an opinion on what is likely and unlikely to be approved. The Planning Commission submitted that it is this assessment which establishes the extent of loss apparent, not the sale or development application outcome. But the terms of s 179 expressly contemplate that the compensation payable for injurious affection may reflect not only the diminution in the price the land may command upon sale in the market, but also the diminution in value attributable to refusal of development approval or a grant of approval upon unacceptable conditions.
In any event, one should not approach the construction of Pt 11 of the Act, and s 179 in particular, on the assumption that the compensation for which the Part provides is confined to compensation for loss suffered by reason of a diminution in the value of land realisable by sale. This notion is better discussed in the context of a discussion of the purpose of s 177.
The purpose of s 177
Several excerpts from Hansard may usefully be noted here as having a bearing upon an understanding of the purpose of s 177 of the Act. A concern directly on the point at issue here was raised in 1969 in the Legislative Assembly[116] in response to the Second Reading Speech[117] for the enactment of a Bill[118] to amend s 36 of the MRTPS Act. In answer to the question, the Minister for Education said[119]: "The Bill ... is designed to ensure that the owner at the time of reservation, and he alone, will be compensated". This answer supports the view urged by the Planning Commission.
[116]Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 1969 at 2607‑2608.
[117]Western Australia, Legislative Council, Parliamentary Debates (Hansard), 4 November 1969 at 2098.
[118]Metropolitan Region Town Planning Scheme Act Amendment Bill 1969 (WA).
[119]Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 12 November 1969 at 2608.
It may be accepted that, before the 1986 amendments, it was clear that only the owner of land at the date of the reservation was entitled to be paid compensation, but it is not apparent that that intention survived the amendment. The more explicit the change in the text of the legislation effected by an amendment, the less compelling is an inference, based on legislative history, that no change in effect was intended by the amendment.
When one looks at the materials which explain the introduction of the then equivalent of s 177(2)(b), it is apparent that the principal concern was to ensure that compensation is paid only once. That concern was pursued by the enactment of a measure which, read literally, contemplated that more than one owner of affected land may be eligible for a payment of compensation for injurious affection.
In 1986, in the Second Reading Speech[120] by the Minister for Planning, in relation to the Bill[121] for the enactment of provisions in the same terms as would ultimately become s 177 of the Act as a further amendment to the MRTPS Act, it was said that "[t]he matters provided for in this Bill do not constitute major changes to the present metropolitan region scheme legislation". The Minister went on to refer to a "comprehensive package of initiatives for speeding up and improving the statutory planning process", and then, having discussed those matters of process, the Minister said:
"Next, it is proposed to amend the Act in relation to the payment of compensation for land which has been reserved under the metropolitan region scheme so that it is clear that compensation for injurious affection is paid only once to the person who is the owner at the date of reservation when the land is first sold following the date of reservation; or the person who is the owner at the time when the responsible authority refuses an application for development on the land or grants permission subject to conditions which are unacceptable to the owner.
At present there is uncertainty about claims being able to be paid more than once in respect of the same portion of land."
[120]Western Australia, Legislative Assembly, Parliamentary Debates (Hansard), 12 June 1986 at 173.
[121]Metropolitan Region Town Planning Scheme Amendment Bill 1986 (WA).
The Second Reading Speech is significant in two respects. First, it identifies the mischief at which s 177 was directed. That mischief was uncertainty as to the possibility of more than one claim for compensation becoming payable in respect of the same parcel of land. The proposed measure was clearly intended to ensure that compensation is paid once only in respect of the one reservation; but there was no indication of an intention that only the owner at the time of reservation should be paid compensation. Much less was there an indication that compensation should not be paid at all if it were not payable to the person who was the owner at the date the reservation came into effect, even though a subsequent owner actually suffers a diminution in value because the refusal of a development approval (or approval on unacceptable conditions) means that the land may not be exploited to its highest and best (and most valuable) use. It cannot be said that the language of s 177, in its ordinary meaning, "leads to a manifest contradiction of the apparent purpose of the enactment, or to some inconvenience or absurdity which can hardly have been intended"[122].
[122]Cf Langan, Maxwell on the Interpretation of Statutes, 12th ed (1969) at 228.
Secondly, the Second Reading Speech contains no hint that the then equivalent to s 177(2)(a) and (b) was intended to refer to the very same person, ie the owner of the land at the date the reservation came into effect. It offers no reason to suppose that s 177(2) does not intentionally differentiate between the person who was the owner at the date of reservation and the person who was the owner at the date of an application for development approval in respect of reserved land. Indeed, the assumption on which s 177(2) proceeds is that compensation may be claimable by more than one owner. That is why it provides that it is to be payable only to one of them.
The Planning Commission submitted that a person who comes to purchase land reserved under a planning scheme knows, or should know[123], of the restriction giving rise to the injurious affection. It submitted that the decision of the Court of Appeal would allow a person who has paid an "affected" price, and has therefore suffered no loss on the purchase, to be paid compensation. The Planning Commission submitted that it is an implicit object of the regime not to "compensate" persons who have suffered no loss.
[123]See cl 47(1) of the PRS, under which a "certificate" is issued on settlement requisitions "stating the manner in which [the land] is affected by the Scheme".
The argument advanced on behalf of the Planning Commission proceeds on the assumption that the adverse effect of a planning scheme in relation to a particular parcel of land will be manifest in the reduction of the market value of the land reflected in the price achieved upon the first sale of the land after the planning scheme comes into effect. But this case offers a concrete example of the fragility of that assumption. In this regard, at the time of the reservation, two of the claimants, Southregal and Mr Wee, were not the owners of the land; they entered into the first contract of sale before the reservation had come into effect. More generally, Pt 11 of the Act does not employ the concept of "loss" as a measure of compensation. As the primary judge observed, Pt 11 of the Act is concerned to provide for the payment of compensation where land is injuriously affected by a planning scheme, as explained by s 174[124].
[124]Leith v Western Australian Planning Commission [2014] WASC 499 at [59].
It is wrong to approach the proper interpretation of Pt 11 of the Act as if it were solely concerned to provide compensation measurable by reference to the first sale by an owner of affected land. While the sale price may be less than it otherwise would have been because the effect of the reservation is factored in, in some general way, to the price of the first sale after the reservation comes into effect, s 177(2)(b) and s 179(2)(b) and (c) expressly contemplate a diminution in value arising out of the reservation and the subsequent refusal of an application for development approval or grant of an approval on unacceptable terms. It must be borne in mind that the reservation of land for public purposes does not operate to resume land or effect an absolute prohibition on development. Whether a reservation of land for public purposes actually diminishes the value of land in a sufficiently material way, so as to entitle the owner of the land to payment of compensation, may not be known until an application for a development approval is refused. And that diminution in value may bear little relationship to the price paid by the owner.
The Planning Commission's argument sits uneasily with the reasoning of the Full Court of the Supreme Court of Western Australia in Bond Corporation Pty Ltd v Western Australian Planning Commission[125]. In that case, the Full Court held[126] that "sale" in the then statutory equivalent of s 177(1) of the Act meant "conveyance" rather than "agreement to sell". It is not necessary in these appeals to consider whether Bond Corporation was correctly decided because no party sought to challenge the decision or the reasoning of the Court in that case. It is sufficient for present purposes to note the difficulty in accommodating the terms of s 177(3)(a)(iii), which expressly contemplate the taking of steps which can only be taken before the making of an agreement to sell, with the view that sale means a conveyance which may occur after a reservation has come into effect, in circumstances where the vendor had no opportunity to comply with s 177(3)(a)(iii).
[125](2000) 110 LGERA 179 ("Bond Corporation").
[126](2000) 110 LGERA 179 at 190‑191 [50]‑[51].
More relevantly for present purposes, in Bond Corporation, Ipp J, with whom Wallwork and Owen JJ agreed, said[127]:
"Owners of land suffer loss merely by the reservation of land for public purposes. That loss is constituted simply by the reduction in the market value of the land caused by the reservation and the inability of the owner to use the land for purposes conflicting with the reservation (even where the owner does not intend to develop the land in any way). The loss sustained on reservation occurs without the owner taking any action in connection with the land, and while the owner still holds the land in the form it was in immediately prior to the reservation. When compared to the kind of loss sustained on conveyance or development refusal where owners are prevented from developing land in accordance with their genuine intent, the loss suffered on reservation is less concrete or tangible. The point to be noticed is that Parliament, by s 36(3), provided that compensation was not to be payable upon that kind of loss being sustained."
[127]Bond Corporation (2000) 110 LGERA 179 at 187‑188 [34].
The reference by Ipp J to "s 36(3)" is a reference to s 36(3) of the MRTPS Act, which was a precursor to s 177(1) of the Act. The point to be made here is that Ipp J rejected the proposition that the loss "constituted simply by the reduction in the market value of the land caused by the reservation" was the object of the compensation for which the legislation provided. His Honour went on to say[128]:
"It seems to me that loss caused by the entering into of an agreement of sale at a price lower than the price the land would have fetched but for the reservation, is a loss that falls into the same category as loss sustained on reservation. Until the owner actually receives payment of the purchase price for the land (ordinarily upon conveyance), the loss suffered upon the agreement of sale being entered into differs little in character from the loss suffered upon the land being reserved. In a limited sense each of those losses can be described as 'paper' losses inasmuch as they do not result in the owner of land actually receiving less for the land on sale, or being unable to use the land as genuinely intended."
[128]Bond Corporation (2000) 110 LGERA 179 at 188 [35].
Having made the point that the legislation is not concerned to provide compensation for notional or paper losses, Ipp J went on to say[129]:
"In my opinion, the philosophy underlying the deferment of payment of compensation as provided for by [the MRTPS Act] is that compensation for injurious affection should only be payable when the owner of the land involved suffers a significantly more tangible loss than that which occurred when the land was reserved. … I prefer the argument that Parliament intended [the MRTPS Act] to provide that payment for compensation should be only be made [sic] when the owner of land actually receives less money for the land than he or she would have received had there been no reservation, or when the genuine intention of the owner to develop the land is frustrated by a development refusal brought about by the reservation."
[129]Bond Corporation (2000) 110 LGERA 179 at 188 [37].
Two points may be made here. First, as Ipp J explained in Bond Corporation, the Act contemplates the possibility of a diminution in the value of land which does not crystallise sufficiently to entitle an owner to a payment of compensation until the refusal of an application for development approval or the approval of an application on unacceptable conditions. The Act provides that this diminution in value is compensable by a payment of compensation, whatever price the owner at that time may have paid for the land. The extent of compensation payable for injurious affection in such a case will, by the application of s 179(1), reflect the diminution in the value of the land attributable to the owner's inability to use the reserved land in accordance with its highest and best use at the date specified in s 179(2)(b) or (c).
Secondly, while it is no doubt possible to draw a formal distinction between the creation of a right and the deferment of its realisation by payment, the difference may have no significance as a matter of substance. While it may be possible to say that s 173(1) of the Act creates a right to compensation, the realisation of which is deferred by s 177(1), it is no less true to say as a matter of substance that injurious affection by reservation is not compensable until the diminution in value is determined by sale or the refusal of a development application or approval on unacceptable terms, whichever first occurs. Accordingly, to accept that the right to compensation created by s 173(1) is not realisable until the occurrence of the first of the events contemplated by s 177(2) is to accept no more than that s 173(1) is subject to s 177, which is what s 173(1) expressly states. This is not to assert that s 173(1) creates a right of compensation which "runs with the land". Rather, it is to acknowledge that the operation of s 177, and in particular s 177(2)(b) and s 177(3)(b), explains the nature, effect and practical operation of s 173(1).
Conclusion
Each appeal should be dismissed with costs.