Western Australian Planning Commission v Temwood Holdings Pty Ltd

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: McHugh J.,Gummow,Hayne JJ.,Callinan J.,Heydon J.
• Judgment Date: 09 December 2004
• Neutral Citation: 2004-1209 HCA A,[2004] HCA 63
• Docket Number: P90/2003
• Date: 09 December 2004

Western Australian Planning Commission

Appellant

and

Temwood Holdings Pty Ltd

Respondent

[2004] HCA 63

McHugh J, Gummow, Hayne, Callinan AND Jheydon JJ

P90/2003

HIGH COURT OF AUSTRALIA

Western Australian Planning Commission v Temwood Holdings Pty Ltd

Town Planning (WA) — Statutory right to compensation conferred upon any person whose land or property was injuriously affected by the making of a specified planning scheme — Land injuriously affected by making of scheme not owned by respondent at time scheme was made but subsequently owned by respondent — Whether right to compensation passed with the land — Whether respondent had a statutory right to compensation.

Town Planning (WA) — Subdivision of land — Application for subdivision approval — Progressive subdivision of larger area — Town planning authority granted subdivision approval subject to a condition that a portion of the larger area be vested in the Crown free of cost and without any payment of compensation by the Crown — Whether condition imposed for a proper ‘planning purpose’ — Whether condition fairly and reasonably related to the development permitted — Whether condition validly imposed.

Town Planning and Development Act 1928 (WA), ss 11, 20, 20A.

Metropolitan Region Town Planning Scheme Act 1959 (WA), ss 3, 5, 36.

1 McHugh J. The issues in this appeal concern the construction of the Town Planning and Development Act 1928 (WA) (‘the Town Planning Act’) and the Metropolitan Region Town Planning Scheme Act 1959 (WA) (‘the Metropolitan Region Scheme Act’). The central issue is whether the Town Planning Appeal Tribunal (‘the Tribunal’) erred in law in approving a condition on the grant of three subdivision approvals under s 20 of the Town Planning Act. The condition required certain land reserved under a town planning scheme to be ceded free of cost to and without payment of compensation by the Crown.

McHugh J.

2 In my opinion, the Tribunal did not err in law in approving the condition. The condition was one that the Tribunal had power to approve, was bona fide imposed for a legitimate planning purpose and was reasonably related to the proposed development.

Statement of the case

3 The appellant, the Western Australian Planning Commission (‘the Commission’), is a body corporate established under s 4 of theWestern Australian Planning Commission Act 1985 (WA). That Act, the Town Planning Act and the Metropolitan Region Scheme Act confer various functions on the Commission. One of the functions of the Commission under the Town Planning Act is to make decisions on applications for subdivision approval.

4 As it then stood, s 42 of the Town Planning Act established the Tribunal. One of the functions of the Tribunal was to hear ‘appeals’ from decisions of the Commission on applications for subdivision approval. They were appeals on the merits of the case. Section 54B of the Town Planning Act allowed appeals from decisions of the Tribunal to the Supreme Court of Western Australia on a question of law1.

5 Temwood Holdings Pty Ltd (‘Temwood’) appealed to the Tribunal against decisions of the Commission approving applications for three subdivisions of a larger parcel of land subject to the condition in each case that Temwood cede a certain portion of that land, which was reserved under a town planning scheme, to the Crown free of cost to and without payment of

compensation by the Crown. The Tribunal dismissed Temwood's complaints about the Commission's decisions2.

6 Temwood then appealed to the Supreme Court of Western Australia arguing that the condition was invalid because the Commission had no power to impose it and because, in any event, it was imposed for an improper purpose. It identified the purpose as the defeat of Temwood's presently subsisting but deferred right to compensation for injurious affection under s 11 of the Town Planning Act and s 36(3) of the Metropolitan Region Scheme Act. McLure J3 dismissed Temwood's appeal. Her Honour found that Temwood did not have a vested right to compensation under s 36 of the Metropolitan Region Scheme Act with respect to the reservation. Its ‘right’ was merely a contingent or inchoate right4. Her Honour held that s 20 of the Town Planning Act gave the Commission (and on appeal the Tribunal) power to impose the condition5 and that the power was not improperly exercised even though the condition defeated Temwood's contingent or inchoate right to compensation6.

7 Temwood then appealed to the Full Court of the Supreme Court of Western Australia (Wallwork and Scott JJ and Olsson AUJ), which allowed the appeal7. The Full Court held8 that s 11 of the Town Planning Act — which provides a mechanism for compensating persons whose land or property is injuriously affected by the making of a town planning scheme — conferred upon Temwood a ‘positive, unequivocal’, ‘specific, definite, substantive’ statutory right to compensation as a consequence of the reservation of that portion of its land under the relevant town planning scheme, the Metropolitan Region Scheme. The Court held9 that actual enjoyment of this right was deferred until ‘the

relevant event stipulated in s 36(3) of the [Metropolitan Region Scheme Act] took place.’ The relevant event was when the land was first sold following the date of the reservation or when the Commission refused an application for subdivision approval or granted subdivision approval subject to conditions that were unacceptable to the applicant. The Court held10 that a manifest legislative intention was required to abrogate this statutory right. Olsson AUJ, with whose judgment Wallwork and Scott JJ agreed, said11:

‘I find it impossible to accept that, having conferred such a specific statutory right, the legislature had in mind that, per medium of the general power of imposing conditions of approval conferred by s 20(1)(a) of the [Town Planning Act], the [Commission] could, in its discretion, attach a condition to an approval to subdivide which directly negated that right by extinguishing it.’

8 The Court held12 that it was beyond the Commission's power under s 20(1)(a) of the Town Planning Act — which empowers the Commission to give subdivision approvals ‘subject to conditions’ — to attach a condition to a subdivision approval that directly negated that right. Accordingly, the Court held that the condition was beyond power and invalid. The Full Court also found13 that the Commission had improperly exercised its power because the condition served no planning purpose and was not imposed as a bona fide exercise of the Commission's powers.

9 Subsequently, this Court granted the Commission special leave to appeal against the decision of the Full Court.

The material facts

10 The Bayshore Garden Estate (‘the Land’) is situated in a coastal area of Western Australia at Singleton, north of Mandurah and approximately 55 kilometres south of Perth. A Metropolitan Region Scheme was created and gazetted14 in 1963 under ss 30 and 32 of the Metropolitan Region Scheme Act. On gazettal, the Scheme reserved a strip of land running the length of the foreshore frontage of the Land for the purpose of ‘Parks and recreation area’.

The strip of land was approximately 200 metres wide and contained 20 ha (‘the Foreshore Reserve’). The then registered proprietor of the reserved foreshore land retained ownership of that land: the reservation did not divest ownership.

11 In 1992, the respondent, Temwood, became the registered proprietor of the Land. Neither Temwood nor any previous registered owner has received compensation as a result of the reservation of the Foreshore Reserve.

12 Since 1993 Temwood has progressively subdivided and developed the Land as a residential area with associated facilities. In 1999 and 2000, Temwood lodged three applications with the Commission for subdivision approval in relation to portions of the Land. None of the applications sought approval to subdivide any part of the Foreshore Reserve. Acting under s 20(1)(a) of the Town Planning Act, the Commission approved the first application on 17 May 2000 and the other two on 7 September 2000. Each approval was subject to the condition that the Foreshore Reserve be ‘vested in the Crown under section 20A of the [Town Planning Act]’ and ‘be ceded free of cost and without any payment of compensation by the Crown.’ The condition stated:

‘That portion of Pt Lot 1001 to the west of the land zoned “Urban” under the Metropolitan Region Scheme being shown on the Diagram or Plan of Survey as a “Reserve for Recreation” and vested in the Crown under section 20A of the [Town Planning Act], such land to be ceded free of cost and without any payment of compensation by the Crown.’

The Commission's contentions

13 The Commission contends that its power to impose conditions on subdivision approval is not affected by any statutory presumption against interference with vested proprietary rights15. The Commission says that it is irrelevant that the Land is the subject of a reservation under the Metropolitan Region Scheme. The Commission also contends that the imposition of a condition on subdivision approval requiring the ceding of land to the Crown, free of cost, is not a confiscation or expropriation of a proprietary right.

14 The Commission contends that the Full Court erred in characterising the imposition of the condition as an extinguishment of a statutory right. The Commission claims that the entitlement to compensation for injurious affection for land reserved under the Metropolitan Region Scheme is governed by ss 11 and 12 of the Town Planning Act, as modified by s 36 of the Metropolitan

Region Scheme Act. An entitlement to compensation is conditional upon the occurrence of one of the events specified in s 36(3)(a) and (b) of the Metropolitan Region Scheme Act and upon the claimant making a claim within the time...