Compensation for Injurious Affection · to the issue of compensation for injurious affection to land in Western Australia require reform, and in particular, ... Land Acquisition and

Law Reform Commission of Western Australia

Compensation forInjurious Affection

Project 98

Discussion Paper

October 2007

ii Law Reform Commission of Western Australia – Project No. 98

Law Reform Commission of Western Australia

Commissioners

Chair Ms AG Braddock SC, BA in Law (Cambridge)

Members: Ms ID Petersen, BJuris, LLB (Western Australia)Ms MA Kenny, BJuris, LLB (Hons) (Western Australia), LLM (Iowa)

Executive Officer Ms HJ Kay, LLB, LLM (Western Australia)

© Government of Western Australia

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Law Reform Commission of Western AustraliaLevel 3, BGC Centre28 The EsplanadePerth WA 6000Australia

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iiiCompensation for Injurious Affection – Discussion Paper

Terms of Reference

The Law Reform Commission of Western Australia is to inquire into and report uponwhether, and if so in what manner, the principles, practices and procedures pertainingto the issue of compensation for injurious affection to land in Western Australia requirereform, and in particular, and without detracting from the generality of this reference:

(a) the provisions of s 241(7) of the Land Administration Act 1997 (WA), includingparticularly the rights affected thereby of persons whose land is, or is proposed tobe, acquired by compulsory process by the state or by an instrumentality of thestate or by any other instrumentality otherwise authorised or directed by statuteto acquire interests in land compulsorily, and the extent to which the adjacent landof such persons is affected by such acts and resulting works;

(b) the law and practices in relation to compensation payable or other accommodationscapable of being extended to owners and other persons with interests in alienatedland where such land is to be regarded as injuriously affected under the terms ofthose statutes set out in Schedule 1 regulating land for public purposes or theimplementation of works of a public character;

(c) the continued use and application of the expression 'injurious affection'; and

(d) any related matter

and to report on the adequacy thereof and on any desirable changes to the existinglaw and practices in relation thereto.

Schedule 1

Land Acquisition and Public Works Act 1902

Land Administration Act 1997

Town Planning and Development Act 1928

Western Australian Planning Commission Act 1985 (Peel and Bunbury Regions)

Metropolitan Region Town Planning Scheme Act 1959 (Perth MetropolitanRegion)

Redevelopment Acts (East Perth, Midland, Subiaco, Armadale, Hope Valley-Wattleup etc)

Country Areas Water Supply Act 1947

Water Agencies Powers Act 1984

Energy Operators (Powers) Act 1979

Dampier to Bunbury Pipeline Act 1997

Petroleum Pipelines Act 1969

Swan River Trust Act 1988

iv Law Reform Commission of Western Australia – Project No. 98

Acknowlegements

The Law Reform Commission of Western Australia wishesto express its gratitude to Mr Ken Pettit QC, Ms Michele Payneand Ms Helen Cogan for their contribution to the Commission'sCompensation for Injurious Affection Reference.

The Commission would also like to thank its publication designer,Cheryl MacFarlane, and its Executive Assistant, SharneCranston, for their assistance in preparing this paper forpublication.

vCompensation for Injurious Affection – Discussion Paper

Contents

Chapter 1: Introduction 2Scope of the reference 2Previous inquiries 2Meanings of terms 2Proposals for reform 5Submissions to the Law Reform Commission 5

Chapter 2: Entitlement to Compensation 6Land tenure 6Compulsory acquisition of land 6History of current legislation 7Just terms 8

Chapter 3: Terminology 10Use of the term 'injurious affection' 10

Chapter 4: Entitlement under Land Administration Act 14

Chapter 5: Enhancement 16Set off for enhancement 16

Chapter 6: Entitlement under Planning and Development Act 18Overview 18Entitlement to compensation 18Affected land 20Awareness of entitlement to compensation 21Limitation Period 22

Chapter 7: Voluntary Acquisitions 24Compulsory acquisition 24Voluntary acquisitions 25Election to acquire 29

Chapter 8: A Single Land Compensation Act 32Other Australian jurisdictions 32The Commission’s proposal 33

Chapter 9: Dampier to Bunbury Pipeline Act 34History of the pipeline 34Effects of the Dampier to Bunbury Pipeline Act 1997 (WA) 34State corridor rights 35Compensation 35Similarity to easement 36Concept of injurious affection 36Fairness of compensation 37

Chapter 10: Other Easements 38Easements 38Energy operators 38Easements for water infrastructure 40

Chapter 11: Other Schedule 1 Acts 42Country Areas Water Supply Act 1947 (WA) 42Petroleum Pipelines Act 1969 (WA) 43Swan and Canning Rivers Management Act 2006 (WA) 43

Chapter 12: The Commission’s Proposals 45

Appendix: List of Invitations to Submit 46

1

2 Law Reform Commission of Western Australia – Project No. 98

1Chapter 1 Introduction

SCOPE OF THE REFERENCE

The Attorney General has directed theLaw Reform Commission of WesternAustralia (‘the Commission’) to ‘reportupon whether, and if so in what manner,the principles, practices and procedurespertaining to the issue of compensationfor injurious affection to land in WesternAustralia require reform.’ The Commissionwas particularly directed to consider:

(a) the provisions of s 241(7) of theLand Administration Act 1997 (WA),including particularly the rightsaffected thereby of persons whoseland is, or is proposed to be, acquiredby compulsory process by the stateor by an instrumentality of the stateor by any other instrumentalityotherwise authorised or directed bystatute to acquire interests in landcompulsorily, and the extent to whichthe adjacent land of such persons isaffected by such acts and resultingworks;

(b) the law and practices in relation tocompensation payable or otheraccommodations capable of beingextended to owners and otherpersons with interests in alienatedland where such land is to beregarded as injuriously affectedunder the terms of those statutesset out in Schedule 11 regulating landfor public purposes or theimplementation of works of a publiccharacter;

(c) the continued use and applicationof the term ‘injurious affection’; and

(d) any related matter.

Those terms of reference do not extendto compulsory acquisitions in general, orto planning restrictions (sometimesreferred to as ‘regulatory takings’2) ingeneral. Injurious affection is only oneelement of the law relating to compulsoryacquisitions and only one element ofplanning restrictions.

PREVIOUS INQUIRIESIn August 1986 the Standing Committeeon Government Agencies of the

1. Refer to Schedule 1 to the Terms ofReference, above p iii.

2. For a discussion of the jurisprudence ofcompensation entitlements at commonlaw for regulatory or ‘de facto’ takings,see Gray KJ, ‘Can EnvironmentalRegulation Constitute a Taking ofProperty at Common Law?’ (2007) 24EPLJ 161.

3. Standing Committee on GovernmentAgencies, Resumption of Land byGovernment Agencies: Proposals forreform, 9th Report (August 1986).

4. Ibid 3–4.5. Standing Committee on Government

Agencies, Resumption of Land byGovernment Agencies: Proposals forReform, 13th Report (June 1987) xi,Recommendation 22.

6. For more detail, see below Chapter 2.7. Bloffwitch R, Report of the Legislation

Committee on the Land AdministrationBill 1997 (1997).

8. Standing Committee on Publ icAdministration and Finance, The Impactof State Government Actions andProcesses on the Use and Enjoymentof Freehold and Leasehold Land inWestern Australia, Report No. 7 (May2004).

Legislative Council of the Parliament ofWestern Australia presented its ninthreport.3 The recommendations made bythe Committee related to s 63 of thePublic Works Act 1902 (WA), thepredecessor to the Land AdministrationAct 1997 (WA) in respect of compulsoryacquisition of land for public works. TheCommittee made 35 recommendationsincluding Recommendation 28 that furtherexamination was required of the issues ofinjurious affection and enhancement.4

In June 1987, the Committee’s 13thReport also recommended that injuriousaffection required further examination.5

In December 1995, a Land Administration Billwas introduced into Parliament with a specificaim of providing the public with anopportunity to comment.6 Subsequently, on18 September 1997, Mr Bob Bloffwitch MLA,Chairman of Committees, presented theReport of the Legislation Committee on theLand Administration Bill 1997 to the LegislativeAssembly.7 This report contains the clauseswhich had been agreed or postponed, butdoes not contain records of theCommittee’s deliberations.

In May 2004, the Public Administrationand Finance Committee made 37recommendations concerning the use offreehold and leasehold land in WesternAustralia.8

MEANINGS OF TERMSAt its widest, the expression ‘injuriousaffection’ simply refers to a deleteriouseffect on the value of land caused bysomething done or proposed to be doneon the land or nearby.

When used in the contexts of townplanning and compulsory acquisition, theexpression often carries the connotationthat the deleterious effect is compensable,although this is not always the intentionof a speaker. It is not necessarilycontradictory to speak of an ‘injuriousaffection’ for which no compensation isavailable.

3Compensation for Injurious Affection – Discussion Paper

The law in Western Australia has included twodistinct meanings of ‘injurious affection’ or,perhaps more accurately, two distinctapplications of the expression.

In the context of a compulsory acquisition ofland, the expression applies to freehold landof a person other than the freehold landacquired from that person. It refers to anyreduction of the value of adjoining land of theperson caused by the carrying out of, or theproposal to carry out, the public work forwhich the land was acquired.

In the context of planning law, however, theexpression means the decrease in value of aperson’s land caused by a planning scheme:s 173 of the Planning and Development Act2005 (WA). Typically, land is reserved undera planning scheme for a certain public purposeand thereafter must be dealt with by its ownerin any new manner consistent with thatintended future purpose. The reserved landmay or may not be acquired in the futureand, if acquired, the acquisition may notoccur for many years. In general terms,compensation is for any reduction of the valueof land resulting from the restrictions on useof that land.

The Commission’s terms of reference areprimarily related to s 241(7) of the LandAdministration Act, which relates to thefirst meaning, but the Schedule of relevantstatutes includes those which incorporatethe planning meaning.

A related but distinct concept is ‘severancedamage’, usually abbreviated to‘severance’. Severance, as a distinctconcept, is used in Western Australia onlyin the field of compulsory acquisition. Ithas no distinct application in the planningcontext although, in theory, the conceptcould apply. At common law, severanceusually meant the reduction of value of aperson’s remaining land caused merely bythe taking of part of the person’s land;that is, by the severance of part of theperson’s land from his remaining land, notcaused by the public work for which land wasacquired.9

In the context of compulsory acquisition law,both ‘injurious affection’ and ‘severancedamage’ relate to land retained by a personafter other land is compulsorily acquired fromthat person. Both relate to a reduction ofvalue of retained land.

Their counterpart is ‘betterment’ or‘enhancement’, terms which are used torefer to an increase in value of landretained by a person caused by the takingof part of the person’s land or by the publicwork for which that taking occurred.Betterment arises only for the purposesof set-off. That is to say, bettermentcaused to some of a person’s retained landis set off against compensation payablefor a reduction of the value of that person’sother land.10

‘Disturbance’ is used to mean a person’smonetary loss caused by disruption to theperson, including to the person’s business,arising from a taking of the person’s landor part thereof. At its simplest, ‘disruption’refers to re-location costs and lostrevenue. However, sometimes a taking ofland can completely extinguish a landowner’s business. Disturbance can arise ina part-taking of land and, therefore, canfall for consideration along with injuriousaffection and severance. Usually, orperhaps ideally, disturbance is distinct frominjurious affection and severance becausedisturbance is not concerned with thevalue of land. For example, in a part-takingof land used for a business, it is not usualto describe the cost of re-orientingthe business to a smaller area as ‘severancedamage’. However, in certain circumstances,it may become difficult to preserve thedistinction.

The foregoing definitions do not always accordwith use of the expressions by theparliaments. Much depends upon theprecise statutory context as differentlegislatures differently adjust rights ofcompensation. It is for this reason thatcourts in Western Australia frequently cautionagainst undiscerning reliance on thejurisprudence of other jurisdictions.

9. There are cases in which this distinctionis difficult to draw. For example, landmay be taken for a controlled accesshighway. The taking/highway maydiminish the value of retained land bymaking access to a school/shoppingcentre more difficult. Is that diminutionin value severance (mere loss of theland) or injurious affection (the reducedease of access caused by the particularpublic work, a highway)?

10. For further discussion, see belowChapter 5. This Discussion Paper usesthe term ‘enhancement’ (which wasused in s 63 of the Public Works Act1902 (WA)).


1The above definition of injurious affection isdictated by aspects of Western Australian lawwhich are not universal. In particular, thefollowing aspects of the definition reflectlegislative decisions:

• only injurious affection to ‘adjoining’ landis compensable (whereas other land maybe similarly affected);

• only a person from whom land is takenmay apply for compensation (whereasother people may suffer similar reductionin the value of their lands);

• only freehold land is relevant (whereas aleasehold may also suffer injuriousaffection); and

• the public work which causes the loss invalue need not be constructed on thetaken land.

Section 241(7) of the Land AdministrationAct provides as follows:

If the fee simple in land is taken from aperson who is also the holder in fee simpleof adjoining land, regard is to be had tothe amount of any damage suffered bythe claimant—

(a) due to the severing of the land takenfrom that adjoining land; or

(b) due to a reduction of the value ofthat adjoining land,

however, if the value of any land held infee simple by the person is increased bythe carrying out of, or the proposal tocarry out, the public work for which theland was taken, the increase is to be setoff against the amount of compensationthat would otherwise be payable underparagraph (b).

The section does not refer to ‘injuriousaffection’. Nor does it refer to ‘severance’,although the reference to damage dueto ‘severing’ the land is usually taken tomean severance damage. There is aplausible argument that one cannot fullyunderstand s 241(7) without bearing inmind its predecessor, s 63 of the PublicWorks Act 1902. This is discussed inChapter 2.

Some commentators take the view thatparagraph 241(7)(a) reflects severance andparagraph (b) reflects injurious affection.11

Certainly, the two paragraphs are commonlyreferred to in those terms, even if merely forconvenience, notwithstanding the possibleloss of precision.

This Discussion Paper addresses the followingdrafting issues under s 241(7) of the LandAdministration Act:

• Section 241(7)(b) refers to a reduction ofthe value of retained land. Consideredindependently of implications from thestatutory context (particularly paragraph(a)), paragraph (b) would include anyreduction of value caused by the conceptsof severance and injurious affection.

• If paragraph (b) is intended to includereductions of value of land caused byeither severance or injurious affection,then what is the intended effect ofparagraph (a)?

• Section 241(7)(a) relates to ‘damagesuffered by a claimant’ caused by severingof land. It is not confined to a reduction ofthe value of the retained land. Soexpressed, paragraph (a) may include, orbe confined to, what would otherwise beregarded as disturbance loss or loss of themargin of value called ‘value to owner’.12

• Betterment is to be set off against anydamage suffered by a claimant underparagraph (b). Depending on theabove issues, betterment will be setoff against either injurious affection only,or against both injurious affection andseverance.

Other issues which arise in the context ofinjurious affection are discussed below.

A person is not entitled to compensationfor a reduction in the value of his land causedby a public work unless the person hassuffered a taking of land for the purpose ofthat public work. For example, a freeway maybe proposed to abut the lands of two personsand reduce the values of the two lots in similarfashion. If the freeway authority takes a

11. For further discussion, see belowChapter 3.



portion, however small, of the land of oneowner, that owner will be entitled tocompensation for injurious affection whereashis neighbour will not.

Further, a person is not entitled tocompensation under s 241(7) except inrespect of an estate of fee simple. Aperson whose interest in taken land isleasehold or an easement is compensatedfor the loss of the leasehold or easementtaken, but not for any diminished value ofadjacent retained land.

A major reason for clarity and precision inthe law of compensation is to help ensureboth that a landowner obtains fully thecompensation the parliament intendedand that the landowner is not paid twicefor what is essentially the same loss. Clarityof terms is discussed in Chapter 3.

The use of ‘injurious affection’ in planningraises separate issues. Those are discussedin Chapter 6.

PROPOSALS FOR REFORM

Throughout this Discussion Paper, theCommission has made a number ofproposals for reform and issued invitationsto submit on particular issues.

Interested parties may submit suggestionsfor reform of other aspects of injuriousaffection that, although not discussed inthis Discussion Paper, are within the termsof reference.

The proposals and invitations commonlyinclude the following policy andphilosophical issues:

• Many reformers strive for consistencyacross the legislation of a jurisdiction onthe grounds that it is inherently unjustto treat in different fashion those whoare in materially similar circumstances.This aspect of reform appears in severalof the comparisons made in this DiscussionPaper between different statutes.

• Where, prima facie, injustice arises fromsuch dissimilar treatment of essentially

similar cases, the impetus is usually toredress the imbalance by augmenting therights of the relatively disadvantaged ratherthan by curtailing the rights of theadvantaged. This tendency has acumulative effect upon the public purse.

• The balance between doing justice toindividuals and equitably preservingtaxpayers’ funds for greater priorities isperhaps the most pervasive of policyconsiderations.

• In pursuit of that balance, it is inevitablethat distinctions will be drawn that maybe characterised as arbitrary.

In the result, the approach tentativelyadopted by the Commission reflects someacceptance that inconsistencies areinevitable, that arbitrary lines are inevitableand that the government priorities andtax payer tolerance may be insuperableimpediments to complete justice.However, as mentioned, that tentativeapproach should not deter interestedparties from making submissions based ondifferent or contrary policy criteria.

SUBMISSIONS TO THE LAWREFORM COMMISSION

Submissions may be made by telephone,fax, letter or email to the address below.Those who wish to request a meetingwith the Commission may telephone foran appointment.

Law Reform Commission ofWestern AustraliaLevel 3, BGC Centre28 The Esplanade, Perth WA 6000

Telephone: (08) 9321 4833Facsimile: (08) 9321 5833Email: [email protected]

Submissions received by 15 February 2008will be considered by the Commission in thepreparation of its Final Report.


2Chapter 2 Entitlement to Compensation

This Chapter considers the basis ofproperty law and land ownership inWestern Australia and the rights ofgovernment to acquire interests in landunder:

• the Land Administration Act 1997 (WA)when an interest in land is affectedadversely by an acquisition of theadjoining land for public works; and

• the Planning and Development Act2005 (WA) when an interest in land isaffected adversely by the making oramendment of a planning scheme.

LAND TENUREWhen Western Australia was founded asa colony in 1829 the English common lawwas adopted to the extent ‘suitable forlocal conditions’.1 Such laws included thedoctrine of tenure and the doctrine ofdivisible ‘interests’ in land.

Under the doctrine of tenure, all land isoriginally and ultimately owned by theCrown. Private land rights can be tracedto a grant from the Crown and all privateinterests in land continue to be held ‘ofthe Crown’.2 This doctrine has led to useof the word ‘resumption’ to describe thetaking of land by the Crown. In legaltheory, the Crown has resumed what wasonce the Crown’s land.

The doctrine of interests in land has theresult that no person, except the Crown,may absolutely own land. Rather, a personmay own an interest in land. The greatestinterest in land that a person can begranted is a fee simple interest, often alsoreferred to as an ‘estate in fee simple’, a‘freehold title’ or a ‘freehold interest’.

The Crown may also grant lesser interestsin land, notably a leasehold interest, butalso easements and profits a prendre. TheCrown may also grant a ‘licence’ to use,and even to occupy, land. For technicaland historical reasons a licence is nottreated as an interest in land unless astatute so provides.

A private person who holds an interest inland may confer upon another person alesser interest than fee simple.Accordingly, the holder of a fee simple maygrant a lease to another person and eithermay grant an easement. A lease may be a‘lesser’ interest than fee simple in norespect except duration – leases arealways for a certain term whereas freeholdis in perpetuity.

In theory, when the Crown acquires allinterests in a parcel of land, the Crownthereafter holds not a fee simple interest,but the absolute title sometimes referredto as the ‘plenum dominium’. A fee simpleestate implies that the estate is held ‘ofthe Crown’ which is why, in theory, it isinappropriate to describe the Crown asholding a fee simple estate. Nevertheless,some statutes have referred to the Crown,or to an emanation of the Crown, holdingsuch an estate. Indeed, certificates of titleare issued under which the Crownpurportedly holds fee simple title.

This theory was adjusted by the HighCourt in Mabo v Queensland (No. 2) 3 toreflect the fact that native title rights donot derive from a Crown grant. The titleultimately and always held by the Crownwas termed ‘radical title’. In theory, nativetitle in many places may have been socomplete that the Crown, on acquiringsovereignty, held no more than the ‘bare’radical title.

COMPULSORYACQUISITION OF LAND

The power to compulsorily acquire landfrom a private citizen is commonthroughout the world. Indeed, inAustralia, as in the United States, thefederal government has this power underfederal constitution.

The Western Australian state governmentis empowered to compulsorily acquireprivately owned interests in land fordefined purposes under various statutes

1. The general principles for the introductionof English law into a ‘settled’ as distinctfrom a ‘conquered’ colony were laid downin Blackstone W, Commentaries on theLaws of England (1765) vol. 1, 107.

2. For a discussion of the history of theevolution of real property law, seeBradbrook AJ, MacCallum SV & MooreAP, Austral ian Real Property Law(Sydney: Law Book Co., 2nd ed, 1997)[1.02]. See also Standing Committeeon Public Administration and Finance,The Impact of State Government Actionsand Processes on the Use andEnjoyment of Freehold and LeaseholdLand in Western Australia, Report No. 7(May 2004) ch 2.

3. (1992) 175 CLR 1.


each of which provides for compensationto the owner of the land.

The Land Administration Act is WesternAustralia’s principal statute dealing withthe acquisition of land for public works andfor the purpose of completing statutorygrants to other persons. Some otherstatutes, which also deal with the takingof land, expressly incorporate the relevantprovisions of the Land Administration Act.

The Land Administration Act is administeredby the Minister for Planning andInfrastructure. The Department forPlanning and Infrastructure undertakesland acquisitions under the LandAdministration Act.

Under s 51(xxxi) of the CommonwealthConstitution the Federal Parliament hasthe power to acquire property from anystate or person but only ‘on just terms’.That provision is interpreted as aconstitutional right to just terms, andthereby limits the Federal Parliament’scapacity to determine the compensationthat may be paid for compulsoryacquisitions by the federal government.State parliaments, including the WesternAustralian Parliament, are not limited bysuch constitutional constraints.

State statutes, nevertheless, are subjectto certain presumptions of statutoryinterpretation. Legislation is presumed notto alienate vested proprietary interestswithout adequate compensation.4 Astatute is presumed not to extinguish acommon law right unless the legislativeintention to do so is apparent.5 On theother hand, it is a presumption ofinterpretation that mere regulation (in theabsence of clear intent to the contrary),entails no payment of compensation.6

HISTORY OF CURRENTLEGISLATION

Section 63 of the Public Works Act 1902(WA)7 was the predecessor to s 241(7)of the Land Administration Act. Section

63 provided for compensation for injuriousaffection in the following terms:

In determining the amount ofcompensation (if any) to be offered, paidor awarded for land taken or resumed,regard shall be had solely to the followingmatters:

(a) The value of such land with anyimprovements thereon, or the estateor interest of the claimant therein, ason the date of the gazetting of thenotice of the taking or resumption,without regard to any increased valueoccasioned by the proposed publicwork; or in the case of land acquiredfor a railway or other work authorizedby a special Act, on the first day ofthe session of Parliament in which theAct was introduced; or in the case ofland taken by agreement pursuant tos 26, the date of the execution of theagreement, unless the agreementprovides otherwise …

(b) The damage, if any, sustained by theclaimant by reason of the severanceof such land from the other adjoiningland of such claimant or by reason ofsuch other lands being injuriouslyaffected by the taking, but where thevalue of other land of the claimant isenhanced by reason of the carryingout of, or the proposal to carry out,the public work for which the land wastaken or resumed, the enhancementshall be set off against the amount ofcompensation that would otherwise bepayable by reason of such other landbeing injuriously affected by thetaking.

A review and consultation process for theadministration of Crown land began in1988. In 1995 a draft Land AdministrationBill was introduced into the LegislativeCouncil by the Hon. George Cash (thenMinister for Lands) and was open for publicconsultation, submissions and comment.

In his second reading speech, the Minister,after outlining in detail the contents ofthe Bill, said:

I am introducing the Bill this year so that itcan be considered and commented on

4. See Pearce DC & Geddes RS, StatutoryInterpretation in Australia (Sydney:Butterworths, 5th ed., 2001) [5.15]–[5.17].

5. Pyneboard Pty Ltd v Trade PracticesCommission (1983) 152 CLR 328; SouthAustralian River Fishery Association vSouth Australia (2003) 84 SASR 507.

6. Commonwealth v Tasmania (1983) 158CLR 1, 283.

7. The title of this Act was changed to theLand Acquisition and Public Works Actby s 5 of the Acts Amendment andRepeal (Native Title) Act 1995 (No. 52of 1995). It was changed back to PublicWorks Act by s 39 of the ActsAmendment (Land Administration) Act1997 (No. 31 of 1997, which accompaniedthe Land Administration Act ).


2during the parliamentary recess. I amhappy to receive such feedback and toincorporate variations, whereappropriate, in order to produce aworkable and acceptable piece oflegislation for Crown land administration.8

In the Legislative Assembly, the Ministerfor Works said:

The first draft of this Bill was preparedand introduced in the other place inDecember 1995 ... to provide the publicwith an opportunity to familiarisethemselves with the new proposals andto comment on those proposals over theparliamentary recess. During the publicconsultation period written submissionswere received from a range ofgovernment agencies, interest groupsand other people. Briefings were alsoprovided at the request of somecommunity groups and state and localgovernment agencies ... the 1995 Billlapsed. Many of the comments receivedfrom the 1995 Bill were incorporated intoa new Bill in 1996.9 [which also lapsed].

On 18 September 1997 the LandAdministration Act was passed byParliament and commenced on 30 March1998. The Land Administration Actconsolidated the compulsory acquisitionprovisions of a number of Acts. Theseincluded the Land Act 1933 (WA), LocalGovernment (Miscellaneous Provisions) Act1960 (WA) and Land Acquisition and PublicWorks Act 1902 (WA).10

In the transition from s 63 of the PublicWorks Act to s 241(7) of the LandAdministration Act:

• The term ‘injurious affection’ wasremoved and the expression ‘reductionof the value of that adjoining land’ wasincluded. It is not possible, on commonunderstandings of the relevant terms,to hold that ‘reduction of the value of… adjoining land’ adequately describesinjurious affection, since there is noreference to the public work as thecause of the reduction in value.

• The entitlement to claim compensation for‘reduction of the value of that adjoiningland’ narrowed from persons with an‘estate or interest’ in land to holders of ‘feesimple’.

• The provision for set off of enhancementchanged from express application to onlyinjurious affection to (arguably) anapplication to any reduction in value.

During the second reading of the LandAdministration Bill 1997 (WA), the Ministerfor Finance explained that the Bill soughtto modernise the administration andmanagement of Crown land in WesternAustralia.11 The Minister expressly observedthat the law in this area was ‘a complex,difficult and, at best, little understood andantiquated area of land law’.12

The Minister mentioned that the newprovisions for compulsory acquisition ofland and its compensation provisionscontained ‘little change to establishedprinciples’13 and only ‘minor changes’.14 Theminor changes the Minister subsequentlydiscussed during the second readingspeech did not include the change to theclass of people entitled to claimcompensation for injurious affection.

The second reading speech does nototherwise assist an understanding of therationale for the three effects describedabove. The Bill was referred to theLegislation Committee for the preparationof a report. Nothing in either theLegislation Committee’s report15 or itsminutes16 explains the three changes.

JUST TERMS

Some jurisdictions have adopted thelegislative device of ‘just terms’. Ratherthan create an exclusive list of heads ofclaim for compensation, just termslegislation creates a list of non-exhaustiveconsiderations from which the Courtsdetermine ‘just’ compensation. There has

8. Western Austral ia, Parl iamentaryDebates, Legislat ive Assembly, 6December 1995, 12406 (George Cash,Minister for Lands).

9. Western Austral ia, Parl iamentaryDebates, Legislative Assembly, 28August 1997, 5658 (Hon. Mike Board,Minister for Works).

10. For a history of the Bill, see WesternAustralia, Parl iamentary Debates,Legislative Assembly, 28 August 1997,5658/2 (Mike Board, Minister for Works).

11. Western Austral ia, Parl iamentaryDebates, Legislative Council, 26 March1997, 909/2 (Max Evans, MLA, Ministerfor Finance).

12. Ibid 914/1.13. Ibid 909/2.14. Ibid 913–14.15. Parliament of Western Australia, Report

of the Legislation Committee on the LandAdministration Bill 1997 (1997).

16. Legislation Committee, Parliament ofWestern Australia, Minutes of Meeting(16 September 1997) 1.


been considerable debate on whetherWestern Australia’s constitution should beamended to ensure that all statutes providefor just terms compensation.

A consequence of either proposal is a shiftfrom parliament to the courts of the finaldetermination of the types ofcompensable damage. That may entail aloss to parliament of the legislative powerto balance complete justice to eachindividual against competing demands onthe public purse.

The present reference is confined toinjurious affection, which does not warrantan excursion into the general applicationof just terms. However, two aspects ofthe matter may be noted in this context.First, the present reference is concernedwith the instigation of relevant reformsto improve justice to land owners wherepracticable. Second, s 241(6) of the LandAdministration Act already includes aprovision for the acquiring authorities andthe courts to take into account any ‘otherfacts’ they consider relevant to the justiceof the case. That provision may beeffective to include facts extraneous tothe provisions of the section, but it isunlikely to allow a head of damage whichis unavailable under s 241(7), such asinjurious affection for a leaseholder.

3


Chapter 3 Terminology

The law of compulsory acquisition of land andcompensation has its share of jargon. ThisDiscussion Paper has already mentioned‘injurious affection’, ‘severance damage’,‘betterment’ or ‘enhancement’ and‘disturbance’, which occur in legislation. Manymore terms of art occur in the case lawdealing with valuation for compensationpurposes.

There is often good reason for the use inlegislation of terms that the common lawhas developed, without attempting alegislative definition of such terms. Thedanger of definition is that some nuances,not yet explored by judges in cases, willbe overlooked by parliamentary draftsmenwith the result that the legislation maycurtail desirable and just common lawadjustments.

Sometimes, however, terms conceived bythe common law lose what consensus andprecision they ever had through thetinkering of legislatures and the incapacityof commentators to agree coredenotations. The Commission’s tentativeview is that ‘injurious affection’ hassuffered this fate and that the remedy isto either dispense with the expression ordefine it.

As alluded to earlier, on one view, s 241(7)of the Land Administration Act 1997 (WA)has attempted to paraphrase, rather thanto define, ‘injurious affection’. As alsomentioned, it is reasonably clear that theparaphrasing is inadequate.1

A definition which did not materially affectthe law in Western Australia may refer toany reduction in the value of any otherland held by the person in fee simple atthe date of acquisition which adjoins (oris severed) from the acquired fee simpleland by reason of the carrying out of, orthe proposal to carry out, the publicpurpose for which the land was acquired.

Section 241(7)(b) does not specificallyreflect those elements. It might be

implied, but it is not stated, that the cause(or a cause) of the reduction of value of theadjoining land must be the public work. Thereference in the section to ‘the public worksor proposed public works’ is in the context ofenhancement. As explained in Chapter 3, itmay be that the legislative draftsmandeliberately expressed s 241(7)(b) withoutreference to public works because theintention was to encompass both injuriousaffection and severance damage.

As a result, the introduction of s 241(7) hasarguably created a new chicken-and-eggproblem of interpretation: does one readdown paragraph (a) to include onlydisturbance and/or ‘value to owner’damages in light of paragraph (b); or doesone read down paragraph (b) to includeonly injurious affection in light of paragraph(a)?

On a practical note, the latter optionnecessarily re-incorporates into the sectionthe concept of injurious affection,notwithstanding that the probablelegislative intention was to dispense withthe term for its archaism and obscurity, atleast from the perspective of laymen (seebelow). In any event, the Commission’stentative view is that the overall legislativeintention cannot be separated from thequestion of terminology and definition.

USE OF THE TERM‘INJURIOUS AFFECTION’

There is little in Hansard concerning theLand Administration Bill 1997 to explainwhy the term ‘injurious affection’, used inthe Public Works Act 1902 (WA) wasomitted. However, one of the objectivesof the 1997 reforms was to ensure that‘the wording of the Act conformed tomodern English standards’,2 which mayhave been of influence.

In 1986 the Standing Committee onGovernment Agencies recommended that‘the Land Acquisition Act and all notices

1. See above p 4.2. Department of Planning and

Infrastructure, Review of the LandAdministration Act 1997, Final Report(August 2005) 11.


issued under that Act should be draftedin a “plain English” style capable of beingunderstood by a person of averageintelligence and education’.3 The Committee‘recognise[d] that legal requirements imposecertain restrictions on drafting; however, theydo not require convoluted drafting or the useof obscure or archaic terminology’.4

The use of plain English terms to replace theterm ‘injurious affection’ was commented onby the Valuer General in his evidence to theStanding Committee.

[T]he Land Administration Act provides forany reduction in the value of adjoining landdue to the taking of the subject land. Underthe old Public Works Act, that would havebeen termed injurious affection. I believethe drafting authorities in their wisdomdecided to reword it in plainer English. Iam not sure whether the end result hasmade it plainer for practitioners, mainlybecause the valuers in the profession reliedon court precedents and, of course, all thecourt precedents referred to injuriousaffection. Then we had this newterminology which referred to a reductionin value of land. Although it is clear to me– and it is probably clear to most peoplereading it – that it refers to a reduction invalue, many members of my professionand some judges have had difficulties inthe sense that they did not have anyprecedent to help them measure that newset of words.5

Accordingly, it seems that at least oneinfluence on the draftsman’s omission ofthe expression ‘injurious affection’ was toavoid obscure and archaic terminology.

On the other hand, there has beensubstantial support among practitioners forthe term ‘injurious affection’ to bereintroduced into the Land AdministrationAct.6 More recently, from interviewsconducted in August 2006, theCommission understands that someofficers from the Valuer General’s Officein Western Australia support the re-introduction of definitions for terms suchas ‘injurious affection’, ‘severance’ and

replacing the term ‘take’ with ‘resume’. Asenior officer from the Planning Commissionalso prefers the use of the terms ‘injuriousaffection’ and ‘severance’ and wouldprefer the term ‘take’ to be replaced.

One Perth solicitor with many yearsexperience has expressed a contraryview.7 He would prefer the term ‘injuriousaffection’ be confined to the planningcontext where it has a strong andingrained meaning in planning law.

Further, if the objective under s 241(7) isto provide compensation for any damagesuffered by a claimant to adjoining land,the question arises whether there is anyneed to distinguish between injuriousaffection and severance damage.

As the history of the concepts has shown,injurious affection originally meant, andperhaps still properly does mean, anyreduction in the value of land caused bysomething done on nearby land. Forexample, the construction of an airportmay, in this sense, injuriously affect theland values of an entire suburb.Accordingly, injurious affection in thissense is independent of any stateacquisition of land. Severance, on theother hand, by definition cannot occurwithout an acquisition of land.

However, the Public Works Act and theLand Administration Act, in common withmany jurisdictions, confined compensationfor ‘injurious affection’ to persons fromwhom land has been taken, effectivelyremoving the major practical reason todistinguish between injurious affection andseverance damage.

One possible reason for preserving thedistinction is so that enhancement maybe set off against injurious affection butnot severance, the rationale for which isalso elusive.8 If that is the sole reason,then, subject to Chapter 5, one mightquestion whether there is any need forparagraph 241(7)(a) at all.

3. Standing Committee on GovernmentAgencies, Resumption of Land byGovernment Agencies: Proposals forreform (1989) 2.

4. Ibid [3.41].5. Fenner G, Transcript of Evidence to the

Standing Committee on Publ icAdministration and Finance (10November 2003) 2.

6. This view has been expressed by thefollowing Perth practitioners: G Di Biasiand G Metcalf, Valuer General’s Office(Perth, 17 August 2006) and interviewwith T Hillyard, Department of Planning& Infrastructure (Perth, 21 August2006). See also Australian PropertyInstitute, Suggested Areas of ReviewLand Administration Act 1997 (undated)4.

7. Interview with Denis McLeod, PrincipalPartner, McLeods Barristers andSolicitors (Perth, 15 September 2006).


3


A contrary argument is that the LandAdministration Act, also in common withother jurisdictions, sets out a list of mattersto which the acquiring authority and thecourts must have regard: s 241(1) LandAdministration Act. That approach providesland owners, acquiring authorities, valuersand courts with a check list of heads ofcompensation. From that perspective, it mayremain useful to list both severance andinjurious affection since they constitutediscrete inquiries as to the cause of anyreduction in value.

Any obscurity or archaism of the expressioncould be ameliorated by a definition of‘injurious affection’. Alternatively, the Actmight paraphrase the concept.

A desirable amendment in this regardmight be to ensure that s 241(7) dealsonly with reduction 0f value of adjoining land;that is, to ensure that the subsection is notconcerned with other categories of damagesuch as business disturbances, reinstatementand extinguishment, which are dealt with ins 241(6).

One difficulty with s 241(7)(a) is that, ifit is intended to apply to or includebusiness losses on account of theseverance of land, such business lossesare confined to the case of a taking offee simple, whereas no such limitationarises under s 241(6).

On the other hand, it is well understoodthat the items in the list of relevant factorsin s 241 are not mutually exclusive, whichis why practitioners and courts are alertto the possibility of double counting.Nevertheless, the inclusion of a matter intwo different items of the section is tobe avoided if possible.

The last issue for discussion in this chapteris that which arose in Edwards v Ministerfor Transport;

9 Commonwealth of Australiav Morison;

10 and Marshall v Director-General, Department of Transport.11 The

question in each case, speaking generally,was whether compensation was availablefor injurious affection suffered in respectof a person’s retained land only when theinjurious affection was caused by a publicwork established on land taken from thatperson. The court in Edwards held thatthe work must be on the taken land.

Morison12 distinguished Edwards withoutoverruling it. The Court held thatcompensation was not limited todepreciatory effects of works constructedon the acquired land itself, but couldreflect the impact of the work as a whole.Marshall, which concerned Queenslandlegislation,13 held that the exercise of anystatutory power associated with the workneed only be the reason for the taking ofland and, accordingly, was more clearlydiscordant with Edwards.

The point was considered for WesternAustralia by Parker J in Cerini v Minister forTransport,14 who held that s 241(7)(b) ofthe Land Administration Act allowedcompensation for injurious affectioncaused by the public work for which theland was taken from Mr Cerini.

As mentioned in Chapter 4, it is somewhatarbitrary that a person from whom land istaken, no matter how little land, shouldbe compensated while his neighbour fromwhom no land is taken is notcompensated. That arbitrariness is lessunder Edwards than under Morison, Ceriniand Marshall. On the other hand, it is noless arbitrary to compensate a person whohas lost some land to a highway shoulderwhile not compensating his neighbourwho has lost land for a buffer verge ofthe same highway.

In the Commission’s view, there is anunavoidable arbitrariness in such decisions.Unless there is good cause, the existinglaw, which is reflected in Cerini and appearsto the benefit of the land owner, shouldnot be altered.

9. [1964] 2 QB 134.10 (1972) 127 CLR 32.11. [2001] HCA 37.12. Morison involved Victorian legislation

similar to the Western Australianprovision.

13. Section 20(1)(b) of the Acquisition ofLand Act 1967 (Qld) which provided:‘the exercise of any statutory powersby the constructing authority otherwiseinjuriously affecting such other land.’

14. [2001] WASC 309. Parker J did notmention the Morison case, but Ceriniappears consistent with Morison.


Invitation to Submit 1

The Commission invites submissions onthe merits of:

(a) retaining the phrase ‘a reduction ofthe value of that adjoining land’ ins 241(7)(b) of the LandAdministration Act 1997 (WA);

(b) expressly confining s 241(7) ofthe Land Administration Act 1997(WA) to reductions in value ofland; and

(c) dispensing with the distinction,however expressed, betweeninjurious affection and severancedamage.

Subject to receiving those submissions,the Commission’s tentative proposals, setout in Chapter 12, are to:

• Retain the reference to ‘damagesuffered’ on the grounds that s 241 isgenerally concerned with compensationfor loss, for which reduction in value of landis relevant but not determinative.

• Omit use of ‘injurious affection’ on thegrounds that, first, while it is prematureto delete the term from all statutes,the process has begun to discontinueits use and that process should not bereversed; and, second, at least inrespect of the principal legislation, theterm will be confined to its planningmeaning.

• Replace paragraph (b) with a definitionof what would traditionally be termed‘injurious affection’, in order to makecertain what loss is referred to.


4Chapter 4Entitlement underLand Administration Act

As mentioned in Chapter 2, the 1997amendments reduced the class ofclaimants eligible for compensation forinjurious affection to those holding feesimple. The diagram below illustrates howthis narrowing of entitlement may operatein practice. Each of the other Australianstates applies similar principles ofcompulsory acquisition to the acquisitionof freehold, leases and other interests inland.

Several policy objectives are at play inrespect of the position in WesternAustralia. First, the government is relievedof the cost of injurious affection andseverance compensation specific to thetenant. Second, it is possible in practicethat the aggregate of the injuriousaffection and severance damages of thelandlord and the tenant will exceed theinjurious affection and severance damageshad the land not been leased. This effectflows, primarily, from the fact that thelandlord is entitled to the full measure ofloss, based on the land’s highest and bestuse. That compensation may not bereduced on account of the grant of alease, at least not to the full extent ofthe compensation to the lessee.

However, apart from issues related to theDampier to Bunbury Pipeline Act 1997(WA) and power line easements, theCommission is not aware of any publicdisquiet since 1997 about unfairlyrestricted awards in cases analogous tothe above example. Nor is there anyevidence before the Commission thatgovernment officers were concerned priorto 1997 that payments were excessive inthis regard.

One reason for this may be that thecompensation to an affected lessee, forloss of part of the demise, can bemeasured to include the ‘value to theowner’ of that part. In this context, ‘valueto the owner’ (ie, the lessee) will includecompensation calculated as the amountwhich a person, in the lessee’s position,would pay for the taken land rather thanlose it.1 The contrary argument is that certainaspects of ‘value to the owner’ replicate thematters in s 241(7) of the LandAdministration Act, and are thereforeremoved from s 241(2) on the properinterpretation of the Act under thegeneralia specialibus non derogant principle(general provisions shall not derogate fromspecific provisions).

1. Pastoral Finance Association Ltd vMinister (NSW) [1914] AC 1083. PastoralFinance is authority for the propositionthat the appropriate value of the land isnot the ‘market value’ in some cases, butthe value a prudent man, in the positionof the owner, would pay for the landrather than lose it. The test in PastoralFinance is a departure from the price thatcould be obtained in the market.

2. Under the terms of the lease, the tenantmay be entitled to a claim against thelandlord who could then make a claimunder s 241 of the Land AdministrationAct 1997 (WA) to recoup these costs.The difficulty is that the tenant has noright under s 241(7)(b) to claimcompensation and must rely on the termsof the lease (if there are any) to becompensated for a loss.

Part of the land isacquired

Fee simple tenure holder(‘Landlord’)

Lesser interest holderPoultry farmer

(‘Tenant’)

Effect: Landlord entitled tocompensation for land taken (to theextent of the reversionary interest) andfor injurious affection and severance toretained land.

Effect: Noise from the freeway constructed on the acquiredland causes major disturbance to the poultry farmer’s eggproduction. The farmer’s profits drop significantly. The farmeris entitled to compensation for loss of part of the leaseholdunder s241(2) and/or for disturbance under s241(6) but isnot entitled to claim compensation under s 241(7).

Interests affected by acquisition

Lease granted

Example of entitlement to claim compensation under s 241(7)(b) 2


Further, s 241(6) permits the payment ofcompensation on account of disruption ofa business and on account of any otherfacts which it is just to take into accountin the circumstances. It may be thatlessees, if any, in a position similar to theabove hypothetical poultry farmer havebeen satisfactorily compensated by theoperation of s 241(6) since 1997.

Accordingly, the rationale for the 1997change may have been that cases ofinjurious affection to leaseholds wereinsignificant. Nevertheless, in theory atleast, there may be cases in which a lesseeis disadvantaged.

In the following example, the proposedfreeway will reduce the value of theleasehold, including the value of the rightto sublet. In many cases, rent reviewclauses may protect the lessee fromfinancial loss under the leasehold. However,in theory at least, the lessee may befinancially disadvantaged with no recourseunder s 241(7) of the Land AdministrationAct. The relative infrequency ofdisadvantage would not appear to justifyto denying a remedy.

A third category of examples concernsinfrastructure easements. An easement

compulsorily taken for high voltage powerlines may have substantial effects on thevalue of the surrounding land. The relevantlegislation is dealt with in Chapter 10.Nevertheless, the point may be made herealso that s 241(7) of the LandAdministration Act does not entitle theland owner to compensation for loss ofvalue to adjacent land caused by thepower lines.

The Commission would be assisted bysubmissions on the extent to which lesseesor the holders of lesser interests havebeen disadvantaged, the significance ofsavings, if any, to government effectedby the 1997 changes, and whether inpractice s 241(6) has been used forcompensation.


The Commission invites submissions onthe merits and consequences ofextending the entitlement to claimcompensation under s 241(7) of theLand Administration Act 1997 (WA)from fee simple holders to includeleaseholders, alternatively to allpersons from whom an interest inland is taken.

Part of the land isacquired for freeway

Fee simple tenure holder Residential lease for99 years, with right to sublet

Effect: Landlord entitled to compensation forland taken (to the extent of the reversionaryinterest) and for injurious affection and severanceto retained land. Because the landlord’s reversionis far in the future, compensation will be reduced.

Effect: Noise from the freeway constructed onthe acquired land diminishes the residential attractionand value of the house. The lessee is legally able tosublet. However, the lessee is not entitled tocompensation under s 241(7) for reduced rent thatthe lessee would obtain.

Interests affected by acquisition

Lease granted

Example of disadvantaged lessee


5Chapter 5 Enhancement

SET OFF FORENHANCEMENT

The Land Administration Act 1997 (WA)recognises that a public work mayenhance the value of land adjacent to aproposed public work. Section 241(7)provides that any such enhancement inthe value of a person’s land is to be setoff against any reduction in the value ofland adjacent to the public work held bythe same person.

There may be arguments for and againstthe inclusion in s 241(7) of the LandAdministration Act of a provision for setoff. However, if a set off is to be retained,it is not clear what reasons could beadvanced for requiring a set off in respectof injurious affection but not severance.As mentioned above, this issue may beanswered if the correct interpretation ofthe subsection is that paragraph (b)encompasses all reductions in value causedby the taking and the public work; thatis, by both injurious affection andseverance.

Section 63(b) of the Public Works Act1902 (WA), the predecessor of s 241(7)Land Administration Act, expresslyprovided that compensation was payablefor damage from severance and frominjurious affection, but provided thatenhancement elsewhere was set offagainst injurious affection only. It is unclearwhy s 63(b) so provided. It has not yetbeen determined by a court whether theLand Administration Act has departed fromthe formulation in s 63(b).

In all other Australian jurisdictions,enhancement is, or may be, set off againstboth injurious affection and severance.1

In most statutes, enhancement is oneconsideration in a list of considerationsrelevant to compensation. In New SouthWales, for example, section 55 of theLand Acquisition (Just TermsCompensation) Act 1991 (NSW) providesthat:

In determining the amount ofcompensation to which a person is entitled,regard must be had to the followingmatters only (as assessed in accordancewith this Division):…

(f) any increase or decrease in the valueof any other land of the person at thedate of acquisition which adjoins or issevered from the acquired land byreason of the carrying out of, or theproposal to carry out, the publicpurpose for which the land wasacquired.

In Tasmania, the set off is more explicitlyrelated to both injurious affection andseverance. Section 27 of the LandAcquisitions Act 1993 (Tas) relevantlyprovides that:

In determining compensation under thisAct, regard is to be had to the followingmatters:

(a) the market value of the estate of theclaimant in the subject land;

(b) any special value the estate in thesubject land may have to the claimantwhich is –

(i) a financial advantage incidentalto the claimant’s ownership ofthat estate; and

(ii) in addition to its market value;

(c) the damage caused by severance ofthe subject land from other landbelonging to the claimant;

…

(e) whether other land belonging to theclaimant is injuriously affected by thecarrying out of, or the proposal tocarry out, the authorized purpose;

(f) any disturbance relating to any lossor damage suffered, or costreasonably incurred, by the claimantas a consequence of the taking ofthe subject land; …

(g) except as provided in this Part, suchother matters as the acquiringauthority, the Court or an arbitratormay consider to be relevant.

(2) Subject to subsection (3), theenhancement of other land referred to insubsection (1)(d) is to be set off against

1. Lands Acquisition Act 1989 (Cth) s 55;Lands Acquisition Act 1994 (ACT) s 45;Land Acquisit ion (Just TermsCompensation) Act 1991 (NSW) s 55;Acquisition of Land Act 1967 (Qld) s 20;Land Acquisition Act 1969 (SA) s 25;Land Acquisitions Act 1993 (Tas) s 27;Land Acquisition and Compensation Act1986 (Vic) s 41.


the amount of compensation determinedunder subsection (1)(a), (b), (c), (e), (f)and (g).

The following discussion is based on theassumption that, in Western Australia, aset off for enhancement elsewhere appliesonly to what would otherwise qualify asinjurious affection. An issue of relevanceconcerns the meaning of ‘any land’. Intheory, some land is taken and someadjoining land suffers injurious affectionand/or severance damage, so that ‘anyland’ must refer to a third area of land,whether also adjoining or not.

On that understanding, the Commissionwould be assisted by submissions on therationale and merit of providing set offagainst injurious affection but notseverance. In any event, there may bemerit in amending s 241(7) to make clearthat set off applies or does not apply toseverance damage.


The Commission invites submissions onthe merits of amending s 241(7)of the Land Administration Act1997 (WA) to make clear thatenhancement is set off against anyentitlement to compensation unders 241(7), whether traditionallydescribed as ‘injurious affection’ or as‘severance damage’.

Subject to those submissions, theCommission is tentatively inclined torecommend an amendment whichprovides or confirms that the set off appliesto any reduction in value of adjoining land.The Commission’s tentative proposal is setout in Chapter 12.

6


Chapter 6Entitlement under Planningand Development Act

OVERVIEW

The Western Australian PlanningCommission (‘WAPC’) and localgovernments are the statutory authoritiesresponsible for urban, rural and regionalland use planning and land developmentmatters. The WAPC and localgovernments are empowered under thePlanning and Development Act 2005 (WA)to ‘reserve’ land by making or amendingregional and local planning schemes.1 Landis reserved by the WAPC for a particularland-use purpose in order to ensure thatit remains reasonably available for thepurpose.

In some cases, land is reserved for animmediate purpose. For example, theWAPC may have acquired land over timefor a rail corridor but find that altered designrequirements necessitate a modifiedcorridor alignment. Additional land may bereserved for the purpose of the corridorto enable the WAPC to acquire the landwithin a short timeframe for the imminentproject.

In other cases, land may be reserved fora period before being used for thereserved purpose. For example, long termplanning may identify a future need for amajor highway. Such land may be reservedfor decades before budget anddemographic conditions lead to acquisitionof the land and construction of thehighway. In such cases, the restrictionsunder the reservation ensure that therequired land is not developed in themeantime in a manner that makes its lateruse for the purpose unnecessarilyexpensive or disruptive.

Both private and public land may bereserved under a planning scheme. Themere reservation of privately owned landdoes not alter its ownership.

The reservation of privately owned landunder region schemes does not give riseto any right to compensation,notwithstanding that restrictions on use

1. Planning and Development Act 2005(WA) s 4 defines a planning scheme as:‘a local or region planning scheme thathas effect under this Act and includes –(a) the provisions of the scheme; and(b) all maps, plans, specifications andother particulars contained in the schemeand colourings, markings or legends onthe scheme.’ The two regional planningschemes are the Metropolitan RegionScheme and Peel Region Scheme forland use in the Perth metropolitan andthe Peel area. Reservations under regionschemes wil l automatically effectreservations under the relevant localplanning schemes.

2. The making or carrying out of a planningscheme, including a reservation of land,may effect betterment of the subjectland. Section 184 of the Planning andDevelopment Act 2005 (WA) allows aresponsible authority to recover from aland owner one half of any suchbetterment. The provision is unrelatedto ‘injurious affection’ under the Planningand Development Act. There is nomention of set off. Rather, the provisionappears concerned to allow a responsibleauthority to be rewarded for its workand expenditure in elevating the valueof land. For those reasons, s 184 is notrelevant to this Discussion Paper.

of the land may accompany the reservation.Instead, each land owner’s entitlement tocompensation is deferred until certain specifiedevents. The objectives of this legislativedeferral are, first, to avoid an extremely largecompensation liability accruing at the date aregion planning scheme is implemented; and,second, to avoid paying compensation forland unnecessarily.

Compensation for particular land mayprove unnecessary because the planningscheme is later amended to remove therelevant reservation or because laterevents cause a land-owner to beunaffected, or even advantaged, by therelevant reservation.

ENTITLEMENT TOCOMPENSATION

Under s 173(1) of the Planning andDevelopment Act, any person whose landis ‘injuriously affected’ by the making oramendment of a planning scheme isentitled to obtain compensation in respectof the injurious affection.2

Section 174(1) sets out the circumstancesin which ‘land is injuriously affected by themaking or amendment of a planningscheme’.

174. When land is injuriouslyaffected

(1) Subject to subsection (2), land isinjuriously affected by reason of themaking or amendment of a planningscheme if, and only if —

(a) that land is reserved (whether beforeor after the coming into operation ofthis section) under the planningscheme for a public purpose;

(b) the scheme permits development onthat land for no purpose other than apublic purpose; or

(c) the scheme prohibits wholly or partially—

(i) the continuance of any non-conforming use of that land; or

(ii) the erection, alteration orextension on the land of any


building in connection with or infurtherance of, any non-conforming use of the land,which, but for that prohibition,would not have been an unlawfulerection, alteration or extensionunder the laws of the State or thelocal laws of the local governmentwithin whose district the land issituated.

(2) Despite subsection (1)(c)(ii), aplanning scheme which prescribes anyrequirement to be complied with in respectof a class or kind of building is not to betaken to have the effect of so prohibitingthe erection, alteration or extension of abuilding of that class or kind in connectionwith, or in furtherance of that class or kindin connection with, or in furtherance of,non-conforming use.

(3) Where a planning scheme wholly orpartially prohibits the continuance of anynon-conforming use of any land or theerection, alteration or extension of anybuilding in connection with or in furtheranceof a non-conforming use of any land, nocompensation for injurious affection ispayable in respect of any part of the landwhich immediately prior to the coming intooperation of the scheme or amendmentdoes not comprise —

(a) the lot or lots on which the non-conforming use is in fact being carriedon;

(b) if the prohibition relates to a buildingor buildings standing on one lot, thelot on which the building stands or thebuildings stand; or

(c) if the prohibition relates to a buildingor buildings standing on more than onelot, the land on which the buildingstands or the buildings stand and suchland, which is adjacent to the buildingor buildings, and not being used forany other purpose authorised by thescheme, as is reasonably required forthe purpose for which the building orbuildings is or are being used.

(4) If any question arises undersubsection (3) as to whether at anyparticular date, any land —

(a) does or does not comprise the lot orlots on which a non-conforming use isbeing carried on;

(b) is or is not being used for any purposeauthorised by a scheme; or

(c) is or is not reasonably required for thepurpose for which any building is beingused,

the claimant or responsible authority mayapply to the State Administrative Tribunalfor determination of that question.

Section 174(1) defines the circumstancesin which injurious affection is deemed tobe injurious affection by reason of ascheme, but does not define ‘injuriousaffection’.

Section 177(1) of the Planning andDevelopment Act sets out the point intime at which a land owner may apply forcompensation in respect of injuriousaffection due to a planning scheme,namely:

1. When the person who owned the landat the date of the planning schemebecame operational first sells it.

2. When an application for approval todevelop the land is refused.

3. When an application to develop landto which a planning scheme applies isapproved but on conditions that arenot acceptable to the applicant.

A claim must be made within six monthsof the above occurring.3 A claim may alsobe made where a planning scheme, whichauthorises the continuing ‘non-conforminguse’ of the land, provides a date withinwhich compensation can be claimed.4

Section 177(3)(a) assists to define theconcept of injurious affection. It appliesto the event of first sale of the reservedland and provides for the assessment ofthe difference between the price whichthe owner could, in good faith, reasonablyobtain and the price the owner couldreasonably have expected had the landnot been reserved. Injurious affection,therefore, is effectively defined in thecontext of the first sale as that differencein price.

3. Planning and Development Act 2005(WA) s 178(1).

4. Planning and Development Act 2005(WA) s 178(1)(b). Section 179(1)(b) isconcerned with the amount ofcompensation for injurious affection,that it must not exceed the differencebetween the value of the affected landand the value of the land as not soaffected.

6


Section 179(1), which sets out the amountof compensation due, provides that theamount due ‘is not to exceed’ that difference,implying that the amount may be less thanthat difference. The compensation due maybe less than that difference when it is payablein respect of a failed, or partly successful,development application, as in the followingexample.

Example

A reservation may restrict developmentof an owner’s land. Nevertheless, adevelopment application may be approvedwhich is less onerous for the owner thanthe terms of the reservation wouldsuggest, but still subject to conditionsdeemed unacceptable by the owner. Insuch a case, the compensation is basedon the allowable development, not on themore onerous restrictions under thereserve.

Conversely, but for this provision, thecompensation may have exceeded theprice difference, as in this example.

Example

A large parcel of developable land may beunder reservation for parks andrecreation. The owner’s developmentapplication will be refused, so preventingdevelopment for urban residences. Refusalof the development application will giverise to compensation. The amount ofcompensation is not determined by theamount the owner might make as a profitshould the owner develop the land andsell the residential lots. Rather, unders 179(1), the amount is capped at thedifference between the prices the ownercould reasonably expect through sale ofthe land affected and sale unaffected bythe reservation. In this example, thecompensation is similar to that under thefirst sale criteria.5

The Planning and Development Act is silenton the means by which injurious affectionis determined in the event of a faileddevelopment application. Section 176(1)provides that a claimant or responsibleauthority may apply to the State

Administrative Tribunal for determination ofany question as to whether land is injuriouslyaffected.6 In general, however, it is clearenough that the measure of injurious affectionis the difference between the value of the landunaffected by the reservation and its valueaffected by the incapacity to develop asdesired.

Accordingly, the Commission’s tentativeview is that no further statutory definitionof ‘injurious affection’ is required in thecontext of the Planning and DevelopmentAct. The Commission would be assistedby submissions in this respect.


The Commission invites submissions onthe merits of, and the possible formof, statutory definitions for theinjurious affection which iscompensable under s 173 of thePlanning and Development Act2005 (WA).

AFFECTED LAND

Under s 174(1) of the Planning andDevelopment Act, compensable injuriousaffection can arise only in respect of theland reserved. This appears to follow thedecision of Miller J in Re Board of valuers,Ex Parte Bond Corp Pty Ltd.7

That creates an anomaly in many cases.Suppose that that the reservation affectsa sliver of land within a much larger parceland that there is no market for the sliverof land. In such a case, the valuationmethod to be applied for the purposes ofs 179 must be one which values the sliverin a way that does not incidentally capturevariance in value for the rest of the landholding. That is to say, a before and afterapproach (often referred to here as an‘affected and an unaffected’ approach)must be applied, and must be applied only tothe sliver.

5. This is not peculiar to the Planning andDevelopment Act 2005 (WA). It is theusual rule in assessing compensation.The courts do not directly compensatefor loss of profits on a venture that hasnot been undertaken.

6. The purpose of the requirement thatthe fact of whether or not injuriousaffection has occurred is to bedetermined by the Tribunal—rather thanan arbitrator under the CommercialArbitration Act 1985 (WA)—is so that itmay be constituted by members withappropriate planning expertise in theevent of complicated factualcircumstances.

7. [1998] 101 LGERA 268.


There are two discrete issues. First, anunaffected value of the sliver must somehowbe obtained. It cannot be obtained from abefore and after approach for the whole land-holding, because that would include the effecton the rest of the land caused by loss of thesliver, contrary to s 174. The same difficultyarises in obtaining an affected value for thesliver.

Second, the question arises whether it isfair to refuse compensation for the effecton the remaining land caused by thereservation of the sliver. As alluded toearlier, this is the parallel in planning of theconcepts of ‘injurious affection’ and‘severance’ as used in the acquisitioncontext. To state the problem in wordsreflecting s 241(7) of the LandAdministration Act, should the law allowthe following compensation for injuriousaffection under the Planning andDevelopment Act?

If a reservation is made of land owned bya person who is also the holder of adjoiningland, regard is to be had to the amount ofany damage suffered by the claimant—

(a) due to the reservation of the land; or

(b) due to a reduction of the value of thatadjoining land,

however, if the value of any [other] landheld by the person is increased by thereservation, the increase is to be set offagainst the amount of compensation thatwould otherwise be payable underparagraphs (a) or (b).

If the law was stated in those terms, theBond case difficulty would disappear. TheCommission is not aware of any case inwhich the Bond principle has operated tothe advantage of the responsibleauthority; that is, to the detriment of theland owner. In the one case of which theCommission is aware, an arbitration, therelevant sliver of land was treated as having‘special value to the owner’ equivalent tothe value of the impact on the remainingland. That result may have merit, but thereasoning is contrary to Bond.

AWARENESS OFENTITLEMENT TOCOMPENSATION

Land may be reserved under a planningscheme for a public purpose; that is, apurpose which serves or is intended toserve the interests of the public or asection of the public and includes a publicwork.8

The public purposes for which land maybe reserved under planning schemesinclude ‘parks and recreation’ purposes orfuture roads and other infrastructure, andfor a variety of public purposes includingeducational uses, and civic and culturalpurposes. In such cases, it is possible,indeed it is often likely, that the land ownerwill be practically unaffected in his day-to-day use of the land. Nevertheless, thevalue of the land may have been affectedby the reservation.

This may arise because a reservation ofpart of the land prevents the attainmentof an otherwise available higher and betteruse. For example, a person may own a1000 square metre suburban block with asingle residence but under zoning thatpermitted subdivision for three residences.A reservation for a new road affecting partof the land may allow subdivision of theremaining zoned land for only tworesidential lots. In such a case, thequestion arises whether the original owneris made aware that a reduction in valuehas occurred and is claimable under thePlanning and Development Act.

When region schemes or schemeamendments are initiated, which involvethe reservation of private land for publicpurposes, documentation is circulated toowners as part of the procedure specifiedby s 43 of the Planning and Development Act.The documentation includes informationabout compensation entitlements.9

Standard conveyancing practice in WesternAustralia involves purchasers obtaining

8. Planning and Development Act 2005 (WA)s 172.

9. See WAPC, ‘Your Property and RegionSchemes’, <www.wapc.wa.gov. au/Property+and+land+management/Your+property+and+region+schemes/default.aspx>.

6


information about zoning and/orreservations. Hence, a purchaser should beaware of the reservation prior to purchase.If injurious affection compensation has beenpaid to an owner, s 180 of the Planning andDevelopment Act provides for a memorial tobe placed on title. Section 171 provides thatno further compensation is payable. Further,previous owners/vendors will have beeninvited to participate in the schemecreation or amendment process that gaverise to the public purpose reservation10 orplanning control area declaration11 andthereby informed about compensationentitlements.

Prior to the decision of the High Court inTemwood,12 cases arose where alandowner applied for compensation onaccount of the refusal of a developmentapplication, but so appliednotwithstanding that the land ownerhad purchased the land from a previousowner who had failed to apply forcompensation upon first sale.13 FollowingTemwood, the WAPC adopted the viewthat, if compensation had not beenclaimed by the owner as at the date ofreservation, no successor in title has anentitlement to claim compensation. Insuch circumstances, the adequacy ofnotice does not arise.

The position under local planning schemesis less clear. The operative provisions14 stillallow claims within six months of thescheme or scheme amendment beingmade, or following the refusal of anapplication for development application byreason of the reservation. The Planningand Development Act now has conflictingprovisions for the circumstances in whichcompensation may be sought in respectof local scheme reservations. Accordingly,amendment to the Model Scheme Textmay be required. The manner in whichany limitations on entitlement tocompensation might be communicated inrespect of claims to local governmentsshould be considered as part of thatprocess.


Submissions are invited on whether thePlanning and Development Act 2005(WA) and/or the Town PlanningRegulations 1967 (WA) should beamended to provide for notice to landowners affected by a planning schemereservation of their rights tocompensation, for example bymemorial on the title.

LIMITATION PERIOD

Related to that issue, is the question ofthe proper interpretation of s 177(1) ofthe Planning and Development Act. InTemwood,15 the High Court consideredwhether there was an entitlement tocompensation which existed in advanceof the right to apply for compensation inrespect of reservations under theMetropolitan Region Scheme. The issuearose for determination because of theambiguity of s 36 of the MetropolitanRegion Town Planning Scheme Act 1959(‘MRTPS Act’), which was in similar termsto s 177(1) of the Planning andDevelopment Act. Section 36(3) of theMRTPS Act provided that compensationwas not claimable until:

(a) The land was first sold following thedate of reservation; or

(b) The WAPC refused an application fordevelopment approval or grantedpermission to carry out developmentwith conditions that wereunacceptable to the applicant.

Under s 36(5) of the MRTPS Act,compensation could only be claimed withinsix months of each of those events andwas payable only once. It was unclearwhether a failure to claim compensationwithin six months of first sale meant thatthe purchaser, who wished to develop theland, was precluded from claiming

10. Planning and Development Act 2005(WA) ss 42 & 84; also Town PlanningRegulations 1967 (WA).

11. Planning and Development Act 2005(WA) Pt 7.

12. Western Austral ian PlanningCommission v Temwood Holdings PtyLtd [2004] HCA 63.

13. This occurred in Kelly v WesternAustralian Planning Commission [2006]WASC 208.

14. The injurious affection compensationclaim provisions are set out in ModelScheme Text appended to the TownPlanning Regulations 1967 (WA) uponwhich all local planning schemes arebased. These still reflect the provisionsof the now repealed s 11 of the TownPlanning and Development Act 1928(WA).

15. Above n 12.


compensation when his subdivision approvalcontained unacceptable conditions.

The High Court was divided on the issue –two of the three majority judges concludedthere was only one right to claimcompensation, which implies that the expiryof six months from first sale terminates allcompensation. However, it was not necessaryto determine the issue and the point has notbeen authoritatively resolved.

The Commission understands that, prior toTemwood, the WAPC (which is the primarysource of injurious affection compensationpayments arising from planning schemerestrictions) was prepared to accept claimsfor compensation arising from refusals topermit development on land due toreservations, notwithstanding that six monthshad elapsed since the relevant sale of the landto to the claimant. Since Temwood, theWAPC has taken the view that a purchaser islikely to have obtained land (including thereserved land) at the injuriously affected pricein the first place, and should be treated asineligible to claim injurious affectioncompensation under s 173 of the Planningand Development Act. This is on the basis thatpayment would constitute compensation forloss of something he never had and may nothave paid for. Further, if the original ownerhad been compensated upon sale of the land,no entitlement would arise for that or anysubsequent owner whose developmentapplication is refused due to the scheme.

In Nicoletti,16 the Supreme Court decided thata landowner affected by a reservation isentitled to submit a claim for compensationfor injurious affection (following refusal of adevelopment application) and to thenwithdraw and resubmit a further claim. Thishas the practical effect of amending the dateof valuation or assessment. In theory, theland owner could continue this process untila time convenient to the land owner.17

From the broadest perspective, the issue iswhether successors in title should be able toobtain compensation at all. The interpretationcould be put beyond doubt by legislative

amendment to s 178 of the Planning andDevelopment Act.


Submissions are invited on whetherthe Planning and Development Act2005 (WA) should be amended toprovide for:

• independent rights tocompensation, with independentsix month limitation periods, undereach of sub-paragraphs (i), (ii) and(iii) of s 178(1)(a) of the Act;alternatively

• the termination of all rights tocompensation for injuriousaffection upon expiry of sixmonths from the first sale afterthe land is reserved, or refusal ofthe first application fordevelopment approval, whicheverfirst occurs.

Subject to those submissions, theCommission’s tentative view is that allentitlement to compensation shouldexpire:

• for the original owner, six months afterfirst sale or after a refused developmentapplication, provided that nocompensation has earlier been paid; and

• for a purchaser, six months after a faileddevelopment application provided thatthe original owner has, at the time ofselling the land, assigned in approvedform his entitlement to compensationto the purchaser.

16. Nicoletti v Western Australian PlanningCommission [2006] WASC 131.

17. Planning and Development Act 2005(WA) s 187(4).

7


Chapter 7 Voluntary Acquisitions

Compensation should be the full monetaryequivalent of the value to [an owner] ofthe land. All else is subsidiary to this end.1

Chief Justice Dixon,High Court of Australia

This chapter deals with the questionwhether the price agreed under voluntaryacquisitions returns to an owner ‘the fullmonetary equivalent of the value to theowner of his land’ and, if not, whetherreforms should be recommended.

COMPULSORYACQUISITION

Upon compulsorily acquiring land, theacquiring authority will offer an amountof compensation based upon a valuationobtained by the authority. There areprocedures to be followed to adjudicateany dispute.

The procedure relating to valuing landunder the Land Administration Act 1997(WA) is as follows:

• An affected land owner has six monthsto initiate a claim for compensation.2

• A claim must be made in the approvedform and served on the acquiringauthority.3

• A claimant may request that the claimbe satisfied by the provision ofcompensation in a form other thanmoney and the acquiring authority mustconsider the request and negotiate ingood faith.4

• If the claim for compensation is notdisputed the acquiring authority mustproduce a report dealing with the valueof the interest and the value of anydamage suffered by the claimant within90 days of receiving the claim.5 Theacquiring authority must as soon aspossible after that report is produced

1. Turner v Minister for Public Instruction(1956) 95 CLR 245, 264.

2. Land Administration Act 1997 (WA) s207. The Minister can extend the periodif he/she ‘is satisfied that the applicationis reasonable and made in good faith’:Land Administration Act 1997 (WA) s207(2). If the time limit has expiredwithout a claim being made and itappears to the acquiring authority thatthe person who held the interestimmediately before the taking is absentfrom the state or under 18 years old, isout of the state or is incapable ofinstigating legal proceedings then aspecific set of procedures apply: LandAdministration Act 1997 (WA) s 210.The acquiring authority must make anoffer of compensation and apply to theState Administrative Tribunal (SAT) fora direction on how to proceed. If theSAT accepts the offer of compensationon behalf of the person, thecompensation must be paid into theSupreme Court within 30 days of thedecision and remain there until anapplication is made by the personconcerned: Land Administration Act1997 (WA) ss 210, 249.

3. Land Administration Act 1997 (WA)s 211. The notice must provide detailsof: ‘(a) the particulars identifying theland in respect of which the claim ismade; (b) the nature and particulars ofthe claimant’s interest in the land; (c) ifthe land or the interest is charged,leased, or subject to any easement –particulars of the charge, lease, oreasement; (d) each matter on accountof which compensation is claimed, withparticulars of the nature and extent ofthe claim; and (e) the claimant’s fullname and address for service.’

4. Land Administration Act 1997 (WA)s 212.

5. Land Administration Act 1997 (WA)s 217(1).

6. Land Administration Act 1997 (WA)s 217(3). This claim and offer can beamended by notifying the other side,after the offer has been made but not ifthe matter of compensation has beenreferred to a court or the SAT fordetermination: Land Administration Act1997 (WA) s 218.

7. A claimant can only reject an offer oramended offer within 60 days of beingserved with it: Land Administration Act1997 (WA) s 219(1).






make an offer of compensation to theclaimant.6

• If a claimant rejects an offer7 themethod of determining compensationcan be by way of any of the followingmethods:

(a) by agreement between theacquiring authority and theclaimant;

(b) by an action for compensation bythe claimant against the acquiringauthority …;

(c) by reference to the StateAdministrative Tribunal.8

• If an offer is not made by the acquiringauthority within 120 days the claimantmay commence proceedings in a court(which court will depend on theamount of compensation sought) orthe State Administrative Tribunal.9 Aclaimant must give the acquiringauthority 30 days’ notice beforecommencing proceedings.10

• If a claimant rejects an offer, the mattercan be taken to the StateAdministrative Tribunal by serving onthe acquiring authority a notice ofappointment of assessor. Within 30 daysof this the acquiring authority must:

(a) appoint an assessor and inform theclaimant of the appointment; or

(b) make an offer of compensation ifan offer has not already beenmade; or

(c) increase the offer ofcompensation.11

If none of the above three conditionsis met within 30 days, the President ofthe State Administrative Tribunal can,on the request of the claimant, appointan assessor for the purpose ofdetermining what compensation shouldbe paid.12


Those processes, while dealing with acompulsory acquisition, allow agreementon the amount of compensation. Aproperly informed land owner will be awarethat the compensation should include allheads of compensation set out in s 241of the Land Administration Act, includinginjurious affection.

VOLUNTARY ACQUISITIONS

The Land Administration Act, the Planning andDevelopment Act and many of the Acts listedin the Schedule13 have provision for thevoluntary acquisition of land as an alternativeto compulsory acquisition. In all but one suchcase, the use of those provisions has excitedlittle controversy.

Section 11 of the Land Administration Actallows the Minister to acquire land bypurchase or exchange. This provision hasnot caused significant public disquiet sofar as the Commission is aware.

Within Part 9 of the Land AdministrationAct, dealing with ‘Compulsory Acquisition’,s 168 provides that, where an interest inland is required for a public work, the acquiringauthority (a) may enter an agreement withthe land owner to purchase the interest or(b) may obtain the land owner’s consent tothe taking, with compensation to be providedunder Part 10; that is, under s 241. Further,in the event that the acquiring authority andthe land owner proceed by agreement underparagraph (a) of s 168, the agreement mayspecify the price or consideration or maystipulate that the price is to be assessed as iffor compensation under Part 10: s 169(1).

The acquiring authority is obliged by s 168(2)to advise the land owner of the proceduresof Parts 9 and 10 and payment of purchasemoney or compensation. Accordingly, it isopen to the land owner at any stage to makean informed election to have Part 10compensation applied to the proposed

transfer of land – either by so agreeing withthe acquiring authority or by declining anyagreement and thereby precipitating acompulsory acquisition to which Part 10 willapply.

The importance of having such a choice liesin the possibility that the provisions of s 241will produce compensation in excess of themarket value of the land in question. This mayoccur for several reasons.

First, ss 241(8) and (9) provide for what isfrequently referred to as ‘solatium’. Solatiumis an amount, over and above the assesseddamage, paid as solace for the compulsorytaking. The Land Administration Act providesthat solatium of up to 10 per cent of theamount otherwise awarded may be added tothe compensation. Exceptional circumstancesmay justify payment of more than 10 percent.14 On their faces, ss 168 and 169appear to allow solatium to be paid inrespect of an agreed taking.

However, s 241(8) provides that solatiumis payable ‘if the interest in land is takenwithout agreement’ and may be paid ‘tocompensate for the taking withoutagreement’. The Commission is not awareof any authority on the question whethersolatium is payable under ss 168 or 169and tentatively holds the view that it isnot. However, it has been the practice ofsome government agencies to include allheads of claim. Of course, the agreed pricemay reflect a generous view of marketvalue in any event, and render theseformalities immaterial.

This issue of solatium is not directly withinthe Commission’s terms of reference. It israised here because of its connection toa second reason choice under ss 168 and 169which may be important.

In a part taking, it is not clear that agreementsunder s 168(a) of the Land Administration Actnecessarily include injurious affection and

13. Schedule 1 of the Terms of Reference:see above p iii.


7


severance. Unless the government’s valueris specifically instructed to assess anyreduction in value of the land owner’sremaining fee simple, it seems unlikely thatinjurious affection and severance would beincluded. On the other hand, if the acquisitionproceeds under s 168(b) or s 169, it appearsobligatory to include injurious affection andseverance; they being part of‘compensation’.

Voluntary acquisitions are included in otherstatutes. In some statutes, the voluntaryand compulsory acquisition provisions ofthe Land Administration Act are bothexpressly incorporated. For example, eachof the ‘redevelopment acts’ expresslyincorporates Parts 9 and 10 of the LandAdministration Act, and hence ss 168 and169:

East Perth Redevelopment Act 1991(WA) s 21;

Subiaco Redevelopment Act 1994(WA) s 24;

Midland Redevelopment Act 1999(WA) s 23;

Hope Valley-Wattleup RedevelopmentAct 2000 (WA) s 6;

Armadale Redevelopment Act 2001(WA) s 20.

On the other hand, s 29(2) of theDampier to Bunbury Pipeline Act 1997(WA) provides that a right, title or interestmay be acquired for the purpose of thepipeline either (a) by agreement or (b)compulsorily under Part 9 of the LandAdministration Act (and presumably Part10 in consequence). While the LandAdministration Act is incorporated forcompulsory acquisition, it is not for voluntaryacquisitions. The result is that agreementsunder the Dampier to Bunbury Pipeline Actdo not include the benefits of ss 168 and169 of the Land Administration Act.

Section 190 of the Planning and DevelopmentAct contains a clear example of a stand-alonevoluntary acquisition provision:

The responsible authority may, for thepurpose of a planning scheme, in the nameand on behalf of such responsibleauthority, purchase any land comprised inthe planning scheme from any person whomay be willing to sell the same.

In other statutes, the position is less clear.An acquisition of land for the purposes ofthe Water Agencies (Powers) Act 1984(WA) appears to be administered underthe Land Administration Act, although thisis not expressly stated in the Act.Section 75 of the Water Agencies(Powers) Act deals only with the powerof the relevant authority to take aninterest in land less than the interest heldby its owner. In that context, theexpression is used ‘whether by way ofagreement or by way of a compulsorytaking under Part 9 of the LandAdministration Act’. So expressed, theimplication is that the ‘agreement’intended is not an agreement under ss 168and 169 of the Land Administration Act.

Section 37 of the Energy Operators(Powers) Act 1979 (WA) is in similar termsto the Water Agencies (Powers) Act.

Section 19 of the Petroleum Pipelines Act1969 (WA) provides in subsection (1) thatland may be compulsorily ‘taken’ by theMinister at the instance of a pipelinelicensee and, if so, the taking must beeffected under Part 9 of the LandAdministration Act (and presumably Part10 in consequence). Subsection (2)provides that subsection (1) does not applyunless the Minister is first satisfied that thepipeline licensee has made reasonableattempts to acquire the land by agreementwith its owner. The pipeline licensee hasno capacity to rely on ss 168 or 169 of


the Land Administration Act. While a licenseemay of its own accord inform the owner ofthe process and of entitlements upon acompulsory acquisition, it would not ordinarilybe in the commercial interests of the licenseeto do so.

Because of the word ‘taken’ (see definition ins 151 of the Land Administration Act), itappears that the Minister has no statutorycapacity under the Petroleum Pipelines Actto renew an attempt to acquire the land byagreement under ss 168 or 169 of the LandAdministration Act, although this is notbeyond doubt.

Government policy is to endeavour topurchase land at market value: Policy9.3.115 of the Government Land PolicyManual, which stipulates that compulsoryacquisition is to be regarded as an actionof last resort. Agencies are required toexercise due diligence in ascertaining andnegotiating a fair market price, utilising theadvice of the Valuer General wherepractical. If a price has been negotiatedin excess of 110 per cent of the ValuerGeneral’s assessment of market value, theconsent of the Minister for Land must beobtained.

The issue for consideration in thisDiscussion Paper is whether all acquisitionsfor a public purpose should be treated asat least quasi-compulsory, so that thesafeguards of ss 168 and 169 of the LandAdministration Act apply. In the furtheralternative, whether there is a middlecourse between those options.

It is debatable that the legislativeintention for ss 168 and 169 of the LandAdministration Act includes application totruly consensual purchases in the senseused in the market or applied in the casesdealing with market value. In thecircumstances relevant to ss 168 and 169,the land owner may be aware that the

land is required for a public work and that,should the land owner not ‘agree’ to sell, theland will probably be compulsorily acquirednotwithstanding. That is to say, ss 168 and169 may be more designed to facilitateamicable compulsory acquisitions than tofacilitate truly consensual transfers.

This issue has a practical and a theoretical side.From a perspective of statutoryinterpretation, the issue is whether it isopen to agencies to voluntarily acquireland at a bargain. However, in view of thepractice and policy of agencies, even ifthat is an open interpretation, is reformrequired? Initial investigation of this pointindicates that the sections are not usedto skirt s 241 provisions and obtainbargains. Further, the Commission is notaware of any public disquiet in this regard.

Further, some government acquisitions aremore closely analogous to voluntary salesin the market. This is particularly the casein the planning and environmentalcontexts, where government’s piecemealacquisitions of land in the market haveresulted in major efficiencies for largeprojects.16 Therefore, a quite differentlegislative approach may be justified insuch cases. Section 190 of the Planningand Development Act reflects thisapproach.

With the exception of the WesternAustralian Planning Commission (which hasthe ability to utilise the MetropolitanRegion Improvement Fund to acquire landlikely to be needed for long-term works)most agencies’ capital works budgets areformulated to shorter developmenttimeframes, resulting in a more disruptive ‘justin time’ policy affecting acquisitionnegotiations. In these cases, ss 168 and 169apply, rather than ‘purely’ voluntaryprovisions such as s 11 of the LandAdministration Act or s 190 of the Planningand Development Act.

15. Policy 9.3.1 was most recently updatedin June 2005.

16. Some of these are explained in WesternAustralian Planning Commission, ‘TheCase for Retaining the MetropolitanRegion Improvement Tax’ (April 2007).

7


Therefore, in practice, it may be that thecriteria for distinguishing truly voluntaryacquisitions from agreed compulsoryacquisitions has become related to: first,the urgency of the requirement; second,whether the land comes onto the marketindependently of any governmentinitiative; and, third, whether a land owneris attracted by a government initiatedoffer to purchase. Those criteria do notappear in the legislation.

To an extent, such criteria are included inlegislation elsewhere. For example, s 38in the Land Acquisition (Just TermsCompensation) Act 1991 (NSW) providesthat:

38. Compensation entitlement ifland (not available for public sale)acquired by agreement

An authority of the State is to take intoaccount, in connection with any proposedacquisition by agreement of land notavailable for public sale, the same mattersas are required to be taken into accountunder this Part in determining thecompensation payable for an acquisitionby compulsory process.

That New South Wales provision appliesthe principles of compulsory acquisitionsto all ‘agreed’ acquisitions except thosewhich follow upon a landowner placingland on the market.

The Standing Committee on GovernmentAgencies17 concluded that, in landacquisitions which are the subject of aninjurious affection claim under planninglegislation, the acquisition is more akin tocompulsory than to voluntary acquisition. Itrecommended that acquisitions of this natureshould be treated on the same terms andconditions as a compulsory acquisition underthe Land Administration Act.18 As explained,that recommendation goes further than theCommission’s proposal under this Discussion

Paper and further than the New South Walesstatute.

The government’s response to the StandingCommittee’s recommendation under avoluntary acquisition was that thelandowner’s position differred from theposition under a compulsory acquisition,and should not be assimilated.19 On itsface, that response does not apply to theCommission’s proposal which is based onthree different situations.

The government neverthelessacknowledged the impost to an owner/occupier of land that is subject to aplanning scheme reservation. To accountfor this impost, where land is voluntarilyacquired, it suggested market value plusa five per cent premium should be paidwhere the property is the land owner’sprincipal place of residence.20

However, , since some acquisitions are atleast quasi-compulsory, and becausevoluntary or non-litigious resolutions arepreferable and ultimately less onerous fortax payers, the return for those voluntaryacquisitions should more closelyapproximate those for compulsoryacquisition.

The Commission’s proposal is that theprovisions of ss 168 and 169 of the LandAdministration Act, which contain certainsafeguards, should be available to allpersons from whom land is acquired forpublic purposes at the government’sinitiative. All other acquisitions (ie, of landthat comes onto the market, or is privatelyoffered to the government) may be underss 11 or 168(1)(a) of the LandAdministration Act or s 190 of the Planningand Development Act.

The rationale for this proposal is to ensurethat land owners are aware of their rights.It is not the intention of the proposal to

17. Standing Committee on GovernmentAgencies, Resumption of Land byGovernment Agencies: Proposals forReform, 9th Report (August 1986) 453–54.

18. Ibid 454, Recommendation 33.19. See Western Australian Government,

Response to the Western AustralianLegislative Council Standing Committeeon Public Administration and Finance inRelation to the Impact of StateGovernment Actions and Processes onthe Use and Enjoyment of Freeholdand Leasehold Land in WesternAustralia, Parliamentary Paper No.2947 (2004) 22.



ensure that acquiring authorities and theWestern Australian Planning Commission,in particular, always pay to land ownersthe array of entitlements under s 241(7).Many land owners will be willing to sell forless than the sum available under thatsection. Indeed, many would beadvantaged by the opportunity to sellrather than wait, perhaps for many years,for a compulsory acquisition.


The Commission invites submissions onthe criteria for the application ofss 168(1)(b) and 169 of the LandAdministration Act 1997 (WA) tosome agreed acquisitions in order toensure that a land owner:

• is informed of the option ofclaiming compensation for injuriousaffection and severance; and/or

• is entitled to be considered for anaward of solatium,

and whether these criteria should beincluded in the legislation.

ELECTION TO ACQUIRE

The Planning and Development Actcontains provision for voluntary purchaseof land (s 190), compulsory acquisition(s 191, which refers to Part 9 of the LandAdministration Act) and the ‘election toacquire’ process (s 187).21 The ‘electionto acquire’ process does not fall neatly withinthe preceding discussion. It is the one‘voluntary’ acquisition process that appearsto have caused public disquiet.

Section 187 has replaced s 36(2) of theMetropolitan Region Town PlanningScheme Act 1959 (WA), which has beenthe subject of several cases in the

Supreme Court, most recently in: MountLawley Pty Ltd v Western AustralianPlanning Commission (No. 1) 22 andWestern Australian Planning Commissionv Kelly.23

Section 187 of the Planning andDevelopment Act provides that, where aclaim is made for injurious affection to landcaused by a reservation of, or restrictionupon, the land under that Act, theresponsible authority may ‘at its optionelect to acquire the land so affectedinstead of paying compensation’. If theauthority and the owner cannot agree aprice, the matter may be referred to theState Administrative Tribunal (amongother options): ss 187(3) and 188(2).

Mt Lawley (No. 1) 24 held that the valueto be determined on such a referencedoes not include injurious affection orseverance damage to adjacent land of theowner. Since Kelly, it seems clear that suchvalue does not include ‘value to owner’or ‘special value’ as explained in the PastoralFinance case.25 Accordingly, not only is thevalue determined by the Tribunal not toinclude such damage, it follows thatagreement under s 187 of the Planningand Development Act as to price is unlikelyto include it either.

Before the Planning and Development Actcame into effect, an election by theauthority to purchase was binding uponthe authority but not upon the landowner.26 To that extent, the owner couldavoid an acquisition that omitted paymentin respect of injurious affection and severanceand continue to use land for any existing lawfulpurpose. By doing so, however, the landowner might also deprive himself of anycompensation pending compulsoryacquisition, which may not occur for decades.

Apparently in response to the problem that aland owner might refuse an election to acquire,

21. Section 187 re-enacts a powerpreviously exercised exclusively by theWestern Austral ian PlanningCommission (WAPC). In respect ofcompensation claims for region schemereservations under the Planning andDevelopment Act 2005 (WA), thepowers now extend to localgovernments regarding claims underplanning scheme public purposereservations which are not otherwisereflected in region scheme reservations.However, as such reservations areexceptional, the discussion in thisChapter is confined to the practices ofthe WAPC.

22. (2004) 29 WAR 273.23. [2007] WASCA 160.24. Above n 22.25. Pastoral Finance Association Ltd v

Minister (NSW) [1914] AC 1083.26. Mt Lawley (No. 1), above n 24, [257] &

[263]. The Full Court noted that it isopen to the land owner to avoid theprocess by withdrawing an applicationfor compensation. That is no doubt truein the case of a refused application todevelop the land. There was nodiscussion of the case in which theapplication for compensation arose upona proposed first sale. It is hard to seehow a similar option is available shouldthe application be for compensationupon first sale.

7


even after taking the matter through anexpensive litigation process, Parliamentamended this provision in s 187(4) of thePlanning and Development Act. Under thatamendment, a land owner may withdraw anapplication for compensation and therebyterminate the election to acquire27 but notuntil after a determination as to the quantumof the purchase price is finally made.

It may be useful to restate in this contextthat ‘injurious affection’ has twomeanings. The election to acquire maybe made instead of paying ‘injuriousaffection’, which here means the reducedvalue of land caused by restrictions on thatland under a planning scheme. Thediscussion above does not concern‘injurious affection’ in that sense. Rather,the above discussion is concerned with,and arises only upon, an acquisition of land,which acquisition may involve ‘injuriousaffection’ (and severance) damage toother land, and ‘injurious affection’ herehas the meaning used in the Public WorksAct 1902 (WA). Indeed, that other landmay not be the subject of any schemeand hence not the subject of any ‘injuriousaffection’ in the first sense.

Further to the election to acquire process,s 190 of the Planning and DevelopmentAct provides, independently of s 187, thata responsible authority may ‘purchase anyland comprised in a planning scheme fromany person who may be willing to sell thesame’. It appears open to pay to thatperson the value of the land to him or her,including therefore some recognition of thecost to the owner occasioned by severancedamage or damage caused by theprospective public work.

On the other hand, s 190 may be viewed bythe authorities, and intended by Parliament,as a no-fuss means of acting in the marketas would any private purchaser.Nevertheless, an astute owner will realise that

the land is required, that a compulsoryacquisition could be engineered, and thatthe government is likely to adjust theagreed price accordingly.

The distinction made earlier in this Chapter,between truly consensual purchases andcompulsory or quasi-compulsoryacquisitions, is more difficult to apply tothe circumstances which give rise to theelection to acquire process. Often, thelandowner initiates an application forcompensation long before the acquiringauthority requires ownership of the land.Should it follow, in such cases, that theland owner is unable to obtain thecompensation in respect of adjacent landthat the land owner would obtain had theacquisition been compulsory under s 241of the Land Administration Act?

On one view, the retention of the electionto acquire process in light of the availabilityof s 190 serves no practical policy purposeother than to avoid compensation inrespect of adjacent land, in the casewhere a reservation affects part of aperson’s land.

Acquisitions under s 187 are ‘agreed’ inthe sense that the land owner may declineto sell, but they are quasi-compulsory inthe sense that the relevant planningauthority has unilaterally imposedrestrictions on any new use of the land.

The Commission would be assisted bysubmissions on the utility of the election topurchase process in respect ofWestern Australian Planning Commission’soperations under region schemes, thepotential application of such powers by localgovernments under local planning schemes,and the fairness of its retention.

The Commission’s tentative view is that thevoluntary and compulsory processes of ss190 and 191 of the Planning andDevelopment Act appear to accord the

27. As above, it is not clear how thisoperates in the context of an applicationupon first sale.


acquiring authorities the flexibility theyrequire and at the same time ensure thatland owners have the legal capacity tosecure receipt of an amount closer to fullcompensation.


The Commission invites submissions onwhether the election to acquireprocess in s 187 of the Planning andDevelopment Act 2005 (WA) shouldbe repealed.

8


Chapter 8 A Single Land Compensation Act

Injurious affection is referred to in 13different statutes in Western Australia.

This Discussion Paper is concerned withinjurious affection, not with compensationgenerally. Nevertheless, this Chapter hasbeen included because initial inquiriessuggest that a disproportionate numberof contentious cases in acquisition lawinvolve injurious affection and/orseverance.

In its 2003 report to the Stategovernment, the Standing Committee onPublic Administration and Finance (‘theCommittee’) recommended:

[T]he enactment of a single Act dealingexclusively with all aspects of thecompulsory acquisition of land in WesternAustralia [and that] where multipleagencies are involved in the compulsoryacquisition of land for significant majorpublic works projects, that a lead agencybe appointed to carry out all of theacquisitions. 1

In its response to the Committee’s report,the government supported the intent ofa single Act but indicated that it regardedthe Land Administration Act 1997 (WA)as performing that role. The governmentconsidered that other enabling legislationapplying to statutory authorities andspecialist agencies should continue,essentially in its current form. This wasfurther developed in the government’s‘Statement of Principle’ contained in itsresponse; in particular:

The Government considers that due tothe complexity and possible impacts onthe economic, social and environmentaldevelopment of the State, a ‘one size fitsall’ approach is not appropriate and thatthe ability for individual agencies withenabling powers to acquire land bemaintained but the processes of the LandAdministration Act 1997 in terms of ‘takingand compensation’ be applied to thegreatest possible extent’.2

The government appeared to accept theconcept of a ‘lead agency’ indicating thatthe Department of Planning andInfrastructure’s State Land Services is theappropriate lead agency in most instances.State Land Services is the lead agency fortakings in the name of the Minister forLands.

A wider role for a lead agency may bedesirable. For example, the WesternAustralian Planning Commission and MainRoads are responsible for the majority oftakings but they do not necessarily followthe process of State Land Services. Thevarious redevelopment authorities, whichhave statutory exemption from some ofthe pre-taking procedures, may also departfrom the State Land Services process.

The Commission tentatively suggests that,in this complex area of the law, there isno distinct advantage in consolidating allstatutory provisions relating to injuriousaffection, not least because two separatemeanings attach to the expression. In thecase of land acquisitions, whethercompulsorily or by agreement, the bettermeans of ensuring consistency and balanceis to apply the provisions of one Act, theLand Administration Act, so far as possible.

OTHER AUSTRALIANJURISDICTIONS

For most acquisition purposes, theCommonwealth, both territories, and everystate except Western Australia rely mostlyon one Act with provisions dedicated onlyto land acquisition and compensation.Some also have provisions for entry andoccupation of land and native titleprovisions, but usually only insofar as theyare relevant to land acquisition andcompensation.3

While all other Australian states haveadopted the model of one land acquisitionstatute, the significance of this should notbe overstated.

1. Standing Committee on Publ icAdministration and Finance, TheImpact of State Government Actionsand Processes on the Use andEnjoyment of Freehold and LeaseholdLand in Western Australia, Report No.7 (14 May 2004) 80, Recommendations3 and 4.

2. Western Australian Government,Response to the Western AustralianLegislative Council Standing Committeeon Public Administration and Financein Relation to the Impact of StateGovernment Actions and Processes onthe Use and Enjoyment of Freeholdand Leasehold Land in WesternAustralia, Parliamentary Paper No.2947 (2004) Principle 2.

3. Land Acquisition Act 1989 (Cth); LandsAcquisition Act 1994 (ACT); LandAcquisition (Just Terms Compensation)Act 1991 (NSW); Lands Acquisition Act(NT); Acquisition of Land Act 1967(Qld); Land Acquisition Act 1989 (SA);Land Acquisition Act 1993 (Tas); LandAcquisition and Compensation Act(1986) (Vic).


THE COMMISSION’SPROPOSAL

Subject to submissions on this issue, theCommission is inclined againstrecommending a single acquisition act. Thereasons are:

1. There is little on the merits todistinguish between a single acquisitionact and a system for the uniformadoption by other Acts of Parts 9 and10 of the Land Administration Act. Inother words, there does not appearto be significant advantage in excisingParts 9 and 10 from the LandAcquisition Act in order to form adedicated acquisition statute.

2. That system allows exceptions to beeasily inserted in individual statutewhere exceptional circumstancesrequire a different approach.

3. Western Australian practitioners andthe public are accustomed to thepresent dominance of the LandAdministration Act, so that significantadvantage should be demonstratedbefore recommending another majorchange.


9Chapter 9 Dampier to Bunbury Pipeline Act

This Chapter deals with the contentiousissues of ‘state corridor rights’ and‘injurious affection’ under the Dampier toBunbury Pipeline Act 1997 (WA). It isperhaps ironic that, in the same year theterm ‘injurious affection’ was omitted fromthe Land Administration Act, apparentlyfor its archaism and obscurity, it wasintroduced into the Dampier to BunburyPipeline Act, with compensation to bedetermined under the Land AdministrationAct 1997 (WA).

There are three inseparable issues: whatis the effect of the legislation; is the effectexpressed with sufficient clarity; and is thateffect in need of substantive reform? Theeffect of the legislation is not easilyexplained.

HISTORY OF THE PIPELINE

Construction of the Dampier to Bunburynatural gas pipeline (‘DBNGP’) wascompleted in 1984. A 30 metre wideeasement was taken from each land owneralong the path of the pipeline and notedon the affected titles. Each easement wasexpressed to permit the holder of theeasement to construct pipelines; that is,it was not restricted to the single pipelinethen planned for construction. Theeasement was initially held by the StateEnergy Commission, but was transferredand is now held by the ‘DBNGP LandAccess Minister’ (as defined in the Dampierto Bunbury Pipeline Act) (‘the Minister’).The landowners were paid compensation.

The Dampier to Bunbury Pipeline Act wasenacted 13 years after the Dampier toBunbury pipeline was constructed. Onepurpose of the Dampier to BunburyPipeline Act was to facilitate the sale ofthe pipeline, as is clear from the Act’s longtitle. A second purpose was to set outthe process by which more pipelines mightbe authorised and constructed.

In 1998, the strip of land containing thepipeline and easement was converted into‘land in the DBNGP corridor’ pursuant to

s 31(4). At that point, all rights held bythe Gas Corporation in the DBNGP corridortransferred to the Minister. The ‘land inthe DBNGP corridor’ was then the sameas the land in the 1984 easement.

In 2002, a widening of the DBNGP corridorto 100 metres was declared from aboutthe Burrup Peninsula to Bullsbrook, justnorth of the metropolitan area. Thataddition to the DBNGP corridor was madeunder s 33. The 30 metre corridor stillexists in the metropolitan area, fromBullsbrook to Kwinana. Work is in progressto widen the southern section of theDBNGP corridor, between Kwinana andKemerton, from 30 to 50 metres.

EFFECTS OF THE DAMPIERTO BUNBURY PIPELINE ACT

Of interest under the Commission’s termsof reference, the Dampier to BunburyPipeline Act contains three means ofaffecting land owners’ rights: s 34 (saleto private operator), s 41 (statutoryrestrictions) and s 29 (‘acquisition of Statecorridor rights’).

Section 41 imposes restrictions on the useof land in the DBNGP corridor. Therestrictions are generally to the effect thatnothing may be done that is inconsistentwith rights that have been, or may be,conferred under s 34. The s 41 restrictionsdo not appear to be more onerous to landowners than the 1984 easement, butextend in some places to a wider areathan the easements. The restrictions cameinto effect upon the declaration orextension of the DBNGP corridor, earlierthan and independent of any taking ofstate corridor rights or sale to a privateoperator.

By s 29(2) of the Dampier to BunburyPipeline Act, ‘state corridor rights’ may beacquired by the Minister by way of acompulsory acquisition under Part 9 of theLand Administration Act. State corridorrights may be taken only within a pre-existing DBNGP corridor. State corridor


1. [2005] WASC 17.2. This point is slightly obscured by the

fact that the Minister holds theeasements originally created in 1984.However, the Minister holds no suchrights in the widened part of theDBNGP corridor where a pipeline couldbe constructed.

3. It should be noted that although thispoint is quite clear from the Dampier toBunbury Pipeline Act itself, the Ministerin his Second Reading speech for theDBP Bi l l expressed the matterdifferently: ‘Part 4 creates state corridorrights which are the rights that allow apipeline operator access to the land toconstruct, operate, or enhance a gaspipeline in the corridor. The land accessMinister will be able to designateadditional land to be in the corridorprovided the land is intended in thefuture to be available to confer rightson a pipeline operator to build andoperate a gas pipeline’: Hansard,Legislative Assembly, 11 November1997, 7525/1.

rights were acquired north of themetropolitan area in respect of both thewidened and original DBNGP corridor bytaking orders under the LandAdministration Act. The taking orderswere expressed to take ‘all interests andrights in the land such as to enable [theMinister] to hold State corridor rights’.

Section 34 provides for the conferral ofrights on a private pipeline operator forthe purposes of constructing andoperating a pipeline.

STATE CORRIDOR RIGHTS

State corridor rights are defined in s 28:

State corridor rights are an interest in landin the DBNGP corridor and the extent ofthe interest is such that, if state corridorrights are held in land, neither conferringrights under section 34 nor exercising anyright conferred under that section wouldinjuriously affect any right, title, or interestin the land.

The meaning of ‘state corridor rights’ hascaused considerable debate. Pullin Jexpressed some misgivings about theexpression in the course of hearing Auld vThe Minister.1

Creation of the DBNGP corridor: (a) triggersthe imposition of s 41 restrictions; (b)permits the Minister to confer on a thirdparty the rights described in s 34, to have,construct and operate a pipeline; and (c)permits but does not require the Ministerto take state corridor rights. Each of thoseeffects occurs only in the DBNGP corridor.

Section 34(1) is the provision thatfacilitates the conferral of rights by theMinister to construct and operate furtherpipelines. It is not necessarily the case thatthe Minister will own the s 34 rights atthe time the Minister confers them upona third party. The Minister might confersuch rights directly at the expense ofexisting landowners. That is to say, it ispossible for the entire process (for anotherpipeline) to occur without the Minister

acquiring the necessary rights as anintermediate step.2 It is also possible forthe Minister to pay compensation to alandowner affected by the conferral andexercise of s 34 rights without the Ministerfirst acquiring s 34 rights.

In short, the purposes of authorising andconstructing another pipeline andaccording compensation could all beeffected without the Minister taking anyright or interest in the DBNGP corridor.3

However, the Dampier to Bunbury PipelineAct also provides a process under whichthe Minister does acquire an interest inland directly from the landowner: s 29.Even if state corridor rights are taken, thefuture sale of pipeline rights is stillaccomplished by the conferral of rightsunder s 34. In other words, there is noprovision for the conferral of state corridorrights upon a third party. On the contrary,the Minister retains state corridor rights,including after the full sale of pipeline rightsunder s 34.

Therefore, it seems, state corridor rightsare not an alternative form of propertyfor sale, and they are not a necessary stepin either the sale of rights to constructanother pipeline. Rather, in theCommission’s view, state corridor rightsmerely provide an alternative method forthe operation of the compensationprovisions of the Dampier to BunburyPipeline Act. That is made clearer by thecompensation provisions themselves.

COMPENSATION

Section 42(1)(c) allows compensation forthe imposition of restrictions under s 41.Sections 42(1)(a) and (b) allowcompensation for the sale of rights andthe exercise of rights under s 34.

Section 29(2) allows compensation for thetaking of state corridor rights. Section42(2) prevents double recovery. Itprovides that s 42(1) is inoperative if statecorridor rights have been taken.


9Clause 35 of Schedule 4 of the Dampier toBunbury Pipeline Act provides that, inapplying the Land Administration Act (forthe purposes s 29), the taking of landand the land taken are to be regarded aseffected for the purposes of the conferralof rights under s 34 ‘whether or not rightshave already been conferred under thatPart in respect of the land’. Clause 35 doesnot apply to s 42 of the Dampier toBunbury Pipeline Act because that sectiondoes not concern any ‘taking’ of land.Clause 35 appears to confirm that thelegislative intention behind state corridorrights is, among other things, to allowcompensation to be paid in advance ofthe conferral of s 34 rights and in advanceof the operation of some restrictionsunder s 41(2)(a).

Hence, it seems to the Commission, statecorridor rights constitute a mechanism bywhich the Minister may consolidate, andmay expedite, rights to compensation, butwhich otherwise does not affect theprocess of declaring the DBNGP corridor,imposing restrictions, conferring rights ona purchaser or constructing andmaintaining a pipeline. That mechanism isintended to facilitate the sale of s 34rights unencumbered by claims tocompensation. In other words, statecorridor rights ensure that the Ministerholds an interest in land, but that interestis not used for any purpose other than totrigger, and settle, compensation.

SIMILARITY TOEASEMENT

Section 28(1) provides that, by the actof acquiring state corridor rights, theMinister acquires any right, title or interestfrom the land owner, which the landowner might otherwise have relied uponto claim that his land is injuriously affectedby the sale, construction or maintenanceof the pipeline. That is to say, statecorridor rights are defined by referenceto things that might later be done to the

land under s 34, in particular by reference tothe land’s capacity to be injuriously affected(and hence the landowner’s capacity to claimcompensation) when those things are donelater.

In this respect, state corridor rights are similarto an easement for the purpose of a gaspipeline.4 Upon taking an easement, the landowner is paid, in effect, for his loss of legalcapacity to resist the construction and useof a pipeline. State corridor rights could besimilarly viewed, except that state corridorrights are expressed entirely by reference tothe loss of capacity of the landowner to laterclaim compensation, rather than by referenceto the landowner’s loss of capacity to resistthe conferral of s 34 rights. That is becausethe land owner’s loss of capacity to legallyresist the pipeline is affected by ss 34 and41, not by state corridor rights.

It is the Commission’s tentative view thatParliament, rather than taking an easementunder which payment must be made atthe outset, has allowed the alternativesof state corridor rights and s 42. This mayhave been done so that the latter mightbe utilised where, for example, the costof taking is especially high and perhaps willultimately be proven unnecessary.

CONCEPT OF INJURIOUSAFFECTION

Earlier in this Discussion Paper, a distinctionwas drawn between two different usesof the expression ‘injurious affection’: aplanning use and an acquisition use. TheDampier to Bunbury Pipeline Act uses theexpression ‘injuriously affect’ and is takento include both meanings. Section 42(1)allows claims for injurious affection:

• caused by exercising rights under s 34,eg by constructing a pipeline, acompulsory acquisition meaning; and

• caused by restrictions on use of theland in anticipation of a possible pipeline,a planning meaning.

4. The Minister referred to an easement inthe Motion to Suspend Standing Ordersfor the Second Reading: ‘The Bill, whichI hope to second read in a little while,authorises AlintaGas to sell the pipeline;lays down rules for the use of theeasement, sets up criteria under theauspices of the Minister for Lands forthe easement to be expanded and aregime to allow progressive reductionin transport charges to gas users. Itfacilitates many other mechanicalmatters necessary to conclude the saleprocess’: Hansard, Legislat iveAssembly, 11 November 1997, 7518/6.


The expression ‘injurious affection’ is used inthe Dampier to Bunbury Pipeline Act to simplymean ‘affect by reducing the value of theland’. Used in that manner, it would be apt tocapture a reduction in value which traditionallymight be termed ‘severance damage’.

FAIRNESS OFCOMPENSATION

Section 42(1) permits compensation forinjurious affection arising both from theconferral or exercise of rights mentionedin s 34 and from s 41 restrictions. Section42(3) provides that Schedule 2 applies withrespect to compensation.

Clause 2(2) of Schedule 2 provides that‘the claim for compensation may extendnot only to land in the DBNGP corridorbut also to any other affected land of theclaimant’. Hence it is clear that the injuriousaffection mentioned in s 42(1) includesinjurious affection to land adjacent to theDBNGP corridor. That is confirmed by thedefinition of ‘land holder’ in s 42(4), whichis not confined to holders of land in theDBNGP corridor.

Clause 6 of Schedule 2 provides that, inthe event the Minister and land ownercannot agree on the amount ofcompensation, the matter may bedetermined under Part 10 of the LandAdministration Act which applies with suchmodification as the circumstances require.In particular, it appears that one required‘modification’ is that s 241(7) of the LandAdministration Act is to be treated as if itwere not confined to a taking of feesimple.

The Commission is not aware of any case-law on this aspect of the Dampier toBunbury Pipeline Act. It is not clearwhether it was discussed in Auld’s case,although it does not appear in his Honour’sreasons.

Under s 29, compensation for the taking ofstate corridor rights (or any interest in land)

is also determined either by agreement orunder the Land Administration Act.

In light of the above, the Commission’stentative view is that the provisions forcompensation in the Dampier to BunburyPipeline Act are not less fair to the affectedland owners than the Land AdministrationAct. On the contrary, in respect of injuriousaffection to adjacent land, the Dampierto Bunbury Pipeline Act is distinctly moregenerous. It is also more generous thanthe provisions applying to otherinfrastructure easements, as discussed inChapter 10.

Rather, the controversy concerning theDampier to Bunbury Pipeline Act stemsfrom the difficulty in understanding theAct, particularly the concept of statecorridor rights. It is beyond the scope ofthe Commission’s terms of reference torecommend a wholesale redraft of theDampier to Bunbury Pipeline Act.

Subject to submissions, the Commission’stentative view is that the difficulty ofinterpretation is not aggravated by use ofthe expression ‘injuriously affected’ orcognates. The Commission is presentlydisinclined to recommend any amendmentof the Dampier to Bunbury Pipeline Act.


The Commission invites submissions onwhether the Dampier to BunburyPipeline Act 1997 (WA) should beamended to:

• replace or define the expression‘injuriously affect’;

• clarify rights to compensation; and/or

• increase or decrease compensation.

10


Chapter 10 Other Easements

EASEMENTS

An easement is a right enjoyed by aperson in respect of the land of another,where the exercise of the right interfereswith the usual rights of the owner of theland.1 More particularly, an easement is aright attached to one piece of land bywhich the owner of that land enjoys aright in respect of other land.

From that definition, an easement requiresa ‘dominant tenement’ (the land to whichthe right attaches) and a ‘servienttenement’ (the land to which the rightapplies), which must be owned bydifferent persons.

In the context of government landacquisition, however, the governmentmay acquire an ‘easement’ without beingthe owner of a dominant tenement.Rather, the government may hold whatis referred to as an ‘easement in gross’,which simply means an easement withouta dominant tenement.

The State and the local governments arecurrently able to create and take aneasement in gross under s 195 LandAdministration Act 1997 (WA). Aneasement in gross is the common methodby which electricity, gas and waterauthorities acquire the right to install andmaintain infrastructure over private land.

Chapter 9 dealt with the issue of theDampier to Bunbury Pipeline Act 1997(WA). The taking of state corridor rightsis similar to the taking of an easement.While complex, that Act does appear toprovide for compensation for the effectof the pipeline on land both within thepipeline corridor and outside the corridor.

The primary focus in this Chapter is uponthe absence of compensation in otherinfrastructure legislation for compensationin respect of land outside the easement.For example, an energy operator whichacquires an easement for the erection ofpower lines across private property isrequired to pay for the easement but is

1. District of Concord v Coles (1906) 3 CLR96.

2. The definition of ‘energy operator’ underthe Energy Operators (Powers) Act 1979(WA) s 4 includes an electricity corporationsuch as Western Power.

3. Energy Operators (Powers) Act 1979(WA) s 28(3)(d).

4. Energy Operators (Powers) Act 1979(WA) ss 28(3)(e), 37(1), 45(4) & (5).

5. Energy Operators (Powers) Act 1979(WA) s 36.

not required to pay for any decline in thevalue of the rest of the property causedby those power lines.

In a sense, such compensation could beregarded as injurious affection damage tothe owner’s remaining land. It is so termedin the Dampier to Bunbury Pipeline Act.The only reason it might not be so termedin other infrastructure legislation is that itis not compensable and is not related tothe taking of fee simple (this issued isdiscussed in Chapters 2 and 3).

ENERGY OPERATORS

Energy operators2 in Western Australiamaintain and upgrade the electricitynetwork in the state. They have powerunder the Energy Operators (Powers) Act1979 (WA) to compulsorily acquire, enterand occupy land to carry out the publicworks necessary to meet this responsibility.

The Energy Operators (Powers) Act allowsenergy operators to acquire land bycompulsory acquisition (either the wholeor a portion) for public works either byagreement with a land owner3 or bycompulsory acquisition under the LandAdministration Act.4 ‘Land’ is defined toinclude interests in land, and includes aneasement.5

Compensation for compulsory acquisition,although generally under the LandAdministration Act, is affected by s 45 ofthe Energy Operators (Powers) Act:

45. Claims against the energyoperator for the use of land andthe application of the LandAdministration Act 1997

(1) Subject to subsection (3), an energyoperator shall not be liable to paycompensation for, or in respect of anydamage attributable to, the placingof any works or other things to whichsection 43(1) applies or by virtue ofthe grant of the right of accessdeemed by that subsection to bevested in the energy operator.


(2) No claim lies against an energyoperator by reason of any loss ofenjoyment or amenity value, or byreason of any change in the aestheticenvironment, alleged to beoccasioned by the placing of works ofthe energy operator on any land.

(3) No claim lies against an energyoperator by reason of the placing ofany works of the energy operatorupon, in, over or under any land,other than a claim —

(a) pursuant to section 120;6 or

(b) under Part 10 of the LandAdministration Act 1997, as readwith this section, where theenergy operator –

(i) is by this or any other Actrequired; or

(ii) by reason of the nature ofthe works there placed, thenature of the locality inwhich the works are placed,the safeguarding ofparticular works, publicsafety, future developmentproposals, or otherwise,elects,

to acquire the land or an estateor interest in the land.

When reporting to the state governmentin 2004, the Standing Committee notedthat there appeared to be no equivalentstatutory provision to s 45(2) of theEnergy Operators (Powers) Act in anyother Australian state.7 The StandingCommittee noted:

Each of the other Australian States applybasically the same process for thecompulsory acquisition of easements asthey do for the compulsory acquisition offreehold land, and the same generalcompensation and valuation principlesapply to both types of transactions.8

The relevant effects of s 45 appear tobe:

• Subsection (1) is related to damagecaused by use and presence ofinfrastructure, not to the taking of landwhich presumably precedes such useand presence. It is not relevant to injurious

affection. In any event subsection (1) issubject to subsection (3).

• The reference to Part 10 LandAdministration Act by subsection (3) doesnot allow compensation for injuriousaffection to land outside a power lineeasement, because s 241(7) of the LandAdministration Act applies only when feesimple is taken.

• However, subsection (3) also applies if theauthority takes fee simple land for a powerline, and may then have the effect ofincluding injurious affection. However, theCommission understands that theauthority in Western Australia proceeds byeasement in most cases. Indeed, greatinconvenience might be occasioned wereit to take freehold instead becauselandowners would thereby lose the rightof access (unless they took an easementover the authority’s land).

• While it is not entirely clear what effectsubsection (2) has, it does not appearto be related to the application of theLand Administration Act, or theavailability of injurious affection throughsubsection (3).

In most cases in Western Australia,easements for power infrastructure worksare acquired by agreement, in which caseChapter 7 above is relevant.

Easements for electricity transmission linesare frequently taken over farming properties.9

The Standing Committee recommended togovernment in 2004 that:

[A]n appropriate method and level ofcompensation should be established bylegislation for those landholders whose landis subject to an electricity transmission lineeasement. To achieve that end, theCommittee recommends that one of thefollowing two positions be implemented byState Government:

(a) Section 45(2) of the Energy Operators(Powers) Act 1979 be repealed; and

(b) The Land Administration Act 1997 beamended to expressly provide forcompensation to a landholder for

6. Energy Operators (Powers) Act 1979(WA) s 120 provides that an energyoperator must pay adequatecompensation for physical damage orotherwise make good the physicaldamage done to the land in the exerciseor purported exercise of an energyoperator’s powers under the Act.

7. Electricity Act 1994 (Qld) ss 6 & 116;Electricity (Pacific Power) Act 1950(NSW) s 14 & 44; Electricity IndustryAct 2000 (Vic) s 86; Electricity Act1996 (SA) ss 4 & 46; Electricity SupplyIndustry Act 1995 (Tas) ss 3 & 51.

8. Standing Committee on Publ icAdministration and Finance, TheImpact of State Government Actionsand Processes on the Use andEnjoyment of Freehold and LeaseholdLand in Western Australia, Report No.7 (May 2004) 102.

9. The Standing Committee on PublicAdministration and Finance heardevidence from a number of witnessesas to the impact that transmission linescan have on an agricultural property,ranging from decreased land value forthe entire property, the prevention offurther development of land near thetransmission lines, and restrictions onthe use of new technology, such aslarger farm machinery and moreefficient irrigation equipment (ie, boomsprinklers). Agricultural landholdersexpressed frustration at the limitedgrounds for compensation for the impactof transmission lines: ibid 104.

10


injurious affection to the landholder’sland arising from the acquisition by aState government department, agencyor body or any interest in thatlandholder’s land. The calculation ofinjurious affection should also takeinto account the value of the landcovered by the easement.

OR

Both the Energy Operator’s (Powers) Act1979 and the Land Administration Act 1997be amended to provide that thecompensation to be paid to a landholderfor the acquisition by Western PowerCorporation of an electricity transmissionline easement must include a componentfor land value that is equivalent to onehundred per cent of the land value of theland covered by the easement.10

The government rejected the StandingCommittee’s recommendation on financialgrounds. It relied on information from theMinister for Energy that additional levelsof compensation to private landownerswould need to be accounted for throughincreased tariffs paid by electricityconsumers. It further commented that:

The Committee’s recommendation couldpotentially have significant financialimplications for the State, and should notbe considered without a thoroughinvestigation of the public benefits andcosts.11

In light of previous chapters of thisDiscussion Paper it appears that:

1. The compulsory acquisition of aneasement under the Energy Operators(Powers) Act does not raise anentitlement to injurious affection orseverance in respect of adjacent land.In that respect, its effect is the sameas compulsory acquisitions under theLand Administration Act of interestsless than fee simple, such as aneasement.

2. The model of the Dampier to BunburyPipeline is, in this regard, anomalouslybeneficial to the land owner. It appearsunique in according rights to

compensation in respect of adjacent landnotwithstanding that no fee simple istaken.

3. The implicit criticisms from the StandingCommittee appear to be restricted tofarming properties. It appears to besuggested that compulsory acquisitionsunder the Energy Operators (Powers) Actbe treated in much the same way ascompulsory acquisitions under theDampier to Bunbury Pipeline Act.

The two major issues to be addressed arethe fairness of the compensationprovisions and the consistency of thoseprovisions with other statutory schemes.As mentioned in Chapter 1, a degree ofarbitrariness seems inescapable whendrawing the boundary of compensability.Generally, once the decision is made toallow or disallow injurious affectioncompensation in the absence of a takingof fee simple (as in s 241(7) LandAdministration Act), it seems unnecessarilyarbitrary to alter that outcome in morespecific statutes. This point is alsodiscussed in Chapter 8 (dealing with theneed for a single compensation statute).


The Commission invites submissionson whether there should becompensation to landowners whoseland is devalued by electricitytransmission line easements.

EASEMENTS FOR WATERINFRASTRUCTURE

The Water Corporation provides water,wastewater, drainage and irrigationservices to metropolitan and regional areasof Western Australia.12 The WaterAgencies (Powers) Act 1984 also providesthat water agencies can acquire partialinterests in land, such as easements, for publicworks.13

10. Ibid 135.11. Western Austral ian Government,

Response to the Western AustralianLegislative Council Standing Committeeon Public Administration and Finance inRelation to the Impact of StateGovernment Actions and Processes onthe Use and Enjoyment of Freeholdand Leasehold Land in WesternAustralia, Parliamentary Paper No.2947 (2004) 8.

12. For a comprehensive list of the functionsof the Water Corporation, see WaterCorporation Act 1995 (WA) s 27.

13. Water Agencies (Powers) Act 1984 (WA)s 75(1).


The majority of land required for waterinfrastructure comprises easements acquiredby agreement. During the two years prior to2003, the Water Corporation completed2,210 acquisitions of which only four werecompulsory acquisitions.14

As discussed above, the policy of acquiringeasements for water infrastructure seemsinevitable, it being impractical andinconvenient to acquire freehold. Thedegree to which water infrastructureunder easement adversely affects landvalues is a matter of fact for evidence.However, since such easements are socommon, and apparently well accepted,the Commission is tentatively inclined torecommend no amendment of the WaterAgencies (Powers) Act.


The Commission invites submissionson whether there should becompensation to landowners whoseland is devalued by waterinfrastructure easements.

14. Standing Committee on Publ icAdministration and Finance, The Impactof State Government Actions andProcesses on the Use and Enjoymentof Freehold and Leasehold Land inWestern Australia, Report No. 7 (2004)137.

11


Chapter 11 Other Schedule 1 Acts

COUNTRY AREAS WATERSUPPLY ACT

The Country Areas Water Supply Act 1947(WA) was originally enacted to replacethe Goldfields Water Supply Act 1902(WA). It now includes provision for theconstruction, maintenance, administrationand safeguard of water supplies to theGoldfields and Great Southern areas,including control of catchment areas. Inthe latter endeavour, the legislationrequires a licence to clear land incatchment areas: ss 12 B and 12 C.

A land owner is entitled to compensationif his application for a licence is refused. Aclaim may be in respect of the land soughtto be cleared and any other land underthe same occupation or ownership whichis rendered unproductive or uneconomic,or is ‘otherwise injuriously affected’:s 12E(2).

Section 12E(4), which reflects s 173 ofthe Planning and Development Act 2005(WA), provides for compensation forinjurious affection in the event anapplication to clear land is refused, refusedin part, or is approved with conditionsunacceptable to the applicant.

Section 12E(6) provides thatcompensation may be resolved by anagreement to purchase the land or by acompulsory acquisition under Part 9 of theLand Administration Act, and in either casecompensation for injurious affection willbe paid only in respect of land, or anestate or interest in land, that is notpurchased or compulsorily acquired.

Those provisions operate upon only theplanning meaning of ‘injurious affection’.That is because the cause of the injuriousaffection mentioned in the Act is neitherthe taking of land nor the purpose forwhich the land is taken. It may be thatthe taking does cause ‘injurious affection’in the acquisition sense, in which case itwill be assessed under s 241(7) of the

Land Administration Act, as provided in s12E(6) of the Country Areas Water SupplyAct.

In the view of the Commission, theprovisions of the Country Areas WaterSupply Act appear to accord compensationto a class of persons beyond those whowould be entitled if the policy of thePlanning and Development Act applied. Inparticular, compensation for injuriousaffection is available under the CountryAreas Water Supply Act in respect of landthat is not itself the subject of a restriction(cf s 174 of the Planning and DevelopmentAct).

The Commission would be assisted bysubmissions on the policy underpinning thisdifference.

It is also to be noted that land clearingcontrols are imposed under Part V Division2 and Schedule 5 of the EnvironmentalProtection Act 1986 (WA) together withthe Environmental Protection (Clearing ofNative Vegetation) Regulations 2004 (WA)for which no compensation is payable. Thisrenders the provision under the CountryAreas Water Supply Act all the moreanomalous.


The Commission invites submissionson the policy and effect of thoseprovisions of the Country Areas WaterSupply Act 1947 (WA) which accordcompensation in respect of land otherthan land affected by restrictions onclearing, and in light of the limitationson clearing under EnvironmentalProtection legislation.


PETROLEUM PIPELINESACT

The Petroleum Pipelines Act 1969 (WA)provides that in Western Australia a personshall not commence, continue theconstruction of, alter or reconstruct apipeline without a license. A person solicensed is referred to in the legislation asa ‘licensee’.

Section 19(1) of the Petroleum PipelinesAct relevantly provides that:

[T]he Minister may, on the application ofthe licensee and at his expense in allthings, take under Part 9 of the LandAdministration Act 1997, as if for a publicwork within the meaning of the Public WorksAct 1902, any land or any easement overany land whether for the time beingsubsisting or not.

Subsection (1) does not apply unless theMinister is satisfied that the licensee, aftermaking reasonable attempts to do so, hasbeen unable to acquire the land oreasement over the land by agreementwith the owner thereof. This has beendiscussed in Chapter 7 (VoluntaryAcquisitions).

In respect of injurious affection, theseprovisions have the effect that the takingof fee simple for a pipeline would excites 241(7) of the Land Administration Actin respect of adjacent land, but the takingof an easement for the same purposewould not.

This is similar to the provisions of theEnergy Operators (Powers) Act and theWater Agencies (Powers) Act 1984 (WA),discussed in Chapter 10 (OtherEasements), but dissimilar to the provisionsof the Dampier to Bunbury Pipeline Act1997 (WA) discussed in Chapter 9.

Submissions invited in those chapters willapply here too.

SWAN AND CANNINGRIVERS MANAGEMENT ACT

In September 2006, the WesternAustralian Parliament passed the Swan andCanning Rivers Management Act 2006(WA) and the Swan and Canning Rivers(Consequential and Transitional Provisions)Act 2006 (WA). The legislation had notcome into effect at the time this DiscussionPaper was prepared. On taking effect, itwill replace the Swan River Trust Act 1988(WA).

A primary object of the Act is to makeprovision for the protection andmanagement of the Swan and CanningRivers and associated land.

Section 89 of the Swan and Canning RiversManagement Act, like the Swan RiverTrust Act,1 provides that an owner ofprivate land is entitled to compensationfor ‘injurious affection’ where the Ministerrefuses, or approves on unacceptableconditions, an application to develop landwithin a management area. ‘Injuriousaffection’ in s 89 carries the planningmeaning of the expression.

Generally, the compensation provisionsunder s 89 reflect those in the Planningand Development Act, including theelection to acquire provision discussed inChapter 7 of this Discussion Paper. Twomatters are of relevance.

First, ‘owner’ is now defined as theproprietor of freehold land, which willnarrow the entitled class from thatpresently entitled. Hansard and theexplanatory memoranda do not explainthat change.

Second, the provisions of Part 5 (dealingwith development control) apply to muchland that is already the subject of reservesand planning controls under the Planningand Development Act. Subsection 89(3)of the Swan and Canning RiversManagement Act provides that, if an 1. Swan River Trust Act 1998 (WA) s 63.

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application for compensation may bebrought under s 89(2), then nocompensation is available upon first saleof the land under s 177(1)(b) of thePlanning and Development Act.

The effect of subsection (3) appears tobe that an owner of affected land, whodoes not wish to develop, but whonevertheless suffers a reduction in thevalue of his land because of Part 5restrictions on development, will never beentitled to compensation. That is incontrast to the regime under the Planningand Development Act which at leastaccords such an owner the opportunityto claim compensation. On the face of it,s 89(3) appears to unfairly deprive anowner of compensation, and to doublycompensate a successor in title who doeswish to develop. That issue is discussedin Chapter 6.

Invitation to submit 13

The Commission invites submissionson the merits of retaining theprovisions of s 89 of the Swan andCanning Rivers Management Act 2006(WA) by which:

(a) entitlement to compensation isrestricted to those holding feesimple; and

(b) an owner of affected land whomakes no developmentapplication is not entitled tocompensation if the owner wasable to, but did not, apply undersubsection 89(2).

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The Commission’s Proposals

The Commission tentatively proposes that:

Compulsory acquisitions

• In each case where it is practicable,statutes which require provision forcompulsory acquisition of landincorporate the provisions of Parts 9and 10 of the Land Administration Act1997 (WA).

• In each case where it is practicable,statutes which require provision forvoluntary acquisition of land incorporatess 168 and 169 of the LandAdministration Act, and thereby also therelevant provisions of Parts 9 and 10.

• Sections 168 and 169 of the LandAdministration Act should apply to allacquisitions initiated by government,but not to acquisitions which followupon a land owner offering land for sale.

• The provisions in s 187 Planning andDevelopment Act 2005 (WA) for anelection to acquire process should berepealed.

• Section 241(7) of the LandAdministration Act be amended toprovide as follows:

If the fee simple in land is taken froma person who is also the holder in feesimple of adjoining land, regard is tobe had to the amount of any damagesuffered by the claimant—

(a) due to the severing of the landtaken from that adjoining land;or

(b) due to the effect on thatadjoining land caused by thecarrying out of, or the proposalto carry out, the public work forwhich the land was taken,

however, if the value of any other landheld in fee simple by the person isincreased by the carrying out of, orthe proposal to carry out, the public

work for which the land was taken,the increase is to be set off againstthe amount of compensation thatwould otherwise be payable underparagraphs (a) or (b).

Planning restrictions

• The election to acquire process shouldbe removed from the Planning andDevelopment Act 2005 (WA) and theSwan and Canning Rivers ManagementAct 2006 (WA).

• An owner, whose land becomesaffected by a compensable restriction,should be entitled to compensationupon either refusal or unacceptableconditional approval of a developmentapplication or upon first sale, whicheverfirst occurs.

• If an owner is not paid compensation,a purchaser of the land should not beentitled to compensation unless theentitlement of the owner is assignedin prescribed form to the purchaser.

Chapter 12


Appendix List of Invitations to Submit

Invitation to Submit 1 [page 13]

The Commission invites submissions on the merits of:

(a) retaining the phrase ‘a reduction of the value of that adjoining land’ in s 241(7)(b) of theLand Administration Act 1997 (WA);

(b) expressly confining s 241(7) of the Land Administration Act 1997 (WA) to reductions invalue of land; and

(c) dispensing with the distinction, however expressed, between injurious affection andseverance damage.


The Commission invites submissions on the merits and consequences of extending theentitlement to claim compensation under s 241(7) of the Land Administration Act 1997(WA) from fee simple holders to include leaseholders, alternatively to all persons fromwhom an interest in land is taken.


The Commission invites submissions on the merits of amending s 241(7) of the LandAdministration Act 1997 (WA) to make clear that enhancement is set off against anyentitlement to compensation under s 241(7), whether traditionally described as ‘injuriousaffection’ or as ‘severance damage’.


The Commission invites submissions on the merits of, and the possible form of, statutorydefinitions for the injurious affection which is compensable under s 173 of the Planningand Development Act 2005 (WA).


Submissions are invited on whether the Planning and Development Act 2005 (WA)and/or the Town Planning Regulations 1967 (WA) should be amended to provide fornotice to land owners affected by a planning scheme reservation of their rights tocompensation, for example by memorial on the title.


Submissions are invited on whether the Planning and Development Act 2005 (WA)should be amended to provide for:

• independent rights to compensation, with independent six month limitation periods,under each of sub-paragraphs (i), (ii) and (iii) of s 178(1)(a) of the Act; alternatively

• the termination of all rights to compensation for injurious affection upon expiry ofsix months from the first sale after the land is reserved, or refusal of the firstapplication for development approval, whichever first occurs.



The Commission invites submissions on the criteria for the application of ss 168(1)(b) and 169of the Land Administration Act 1997 (WA) to some agreed acquisitions in order to ensure thata land owner:

• is informed of the option of claiming compensation for injurious affection andseverance; and/or

• is entitled to be considered for an award of solatium,

and whether these criteria should be included in the legislation.


The Commission invites submissions on whether the election to acquire process in s 187 of thePlanning and Development Act 2005 (WA) should be repealed.


The Commission invites submissions on whether the Dampier to Bunbury Pipeline Act 1997(WA) should be amended to:

• replace or define the expression ‘injuriously affect’;• clarify rights to compensation; and/or• increase or decrease compensation.


The Commission invites submissions on whether there should be compensation to landownerswhose land is devalued by electricity transmission line easements.


The Commission invites submissions on whether there should be compensation to landownerswhose land is devalued by water infrastructure easements.


The Commission invites submissions on the policy and effect of those provisions of the CountryAreas Water Supply Act 1947 (WA) which accord compensation in respect of land other thanland affected by restrictions on clearing, and in light of the limitations on clearing underEnvironmental Protection legislation.


The Commission invites submissions on the merits of retaining the provisions of s 89 of theSwan and Canning Rivers Management Act 2006 (WA) by which:

(a) entitlement to compensation is restricted to those holding fee simple; and(b) an owner of affected land who makes no development application is not entitled

to compensation if the owner was able to, but did not, apply under subsection89(2).


Documents

Compensation for Injurious Affection · to the issue of compensation for injurious affection to land in Western Australia require reform, and in particular, ... Land Acquisition and