LA News Summer Edition 2011/2012

Costs issues in land compensation cases – McKay v Commissioner of Main Roads and Western Australian Planning Commission (2011) WASC 223

On 2 December 2011 the Supreme Court delivered its decision on costs in a long running major land resumption case of McKay v Commissioner of Main Roads and Western Australian Planning Commission (2011) WASC 223 (McKay).  The Court had earlier delivered its 700+ page judgment on 1 September 2011 determining the compensation claim following a long running trial.

The Plaintiffs in the McKay matter had claimed a sum of $46.5 million in total, as compensation for the compulsory taking of certain areas of their landholdings by the Commissioner for Main Roads and the Western Australian Planning Commission (Defendants), however the trial judge determined the compensation to be $5,827,500 plus interest.  The Defendants had previously paid approximately $10 million as an advance payment and had made a compromise offer of $12.3 million plus interests and costs.  The Defendants thereafter made a further compromise offer for $15 million plus interests and costs.  These offers were not accepted by the Plaintiffs.  Approximately two weeks before the commencement of the trial, the Defendants made a ‘Calderbank’ compromise offer of $24 million plus interests and costs.  This was not accepted and the trial proceeded and was heard over a number of part hearings with a total length of hearing of over four months.

After delivery of the trial judge’s award of compensation, both parties sought orders for costs in their favour.  The Plaintiffs argued, amongst other things, that different costs principles apply in land acquisition cases compared to ordinary litigation and that as a general principle the dispossessed landowner ought to receive his or her costs in the action.  The Defendants argued however that the Calderbank offer was open for a reasonable time to consider and respond to it and having regard to the findings on the issues, the Defendants should be seen as the successful party and should have their costs awarded.

The trial judge held that there was no principle in compensation cases that only in an exceptional case should a claimant be deprived of his or her costs or that a claimant should be free to run any arguable case without being constrained by the risk of an adverse costs order.  The trial judge held that there was sufficient time for the Plaintiffs to respond to the Defendants’ Calderbank offer and, having regard to the policy of the law to encourage settlements of actions, ordered that the Plaintiffs pay the Defendants’ costs from the time that was limited by the Calderbank offer for acceptance. 

Lavan Legal comment

The outcome of the costs issues in McKay demonstrate the risks in litigation for a dispossessed owner claiming compensation as a court will consider the reasonableness of offers made before trial and can make costs orders adverse to the dispossessed owner where the defendants’ compromise offer is better than the compensation awarded by the court.  In major long running cases such as this, the impact of such costs orders can have major implications for a litigant.

It is understood that the Plaintiffs have appealed the trial judge's decisions.

If you have any questions in relation to any aspect of land compensation, please contact consultant Brian McMurdo on (08) 9288 6893 /

The importance of statutory interpretation – recent case law

In the recent decision of Freshwater Claremont Pty Ltd v Town of Claremont [2011] WASAT 174 (Decision) the State Administrative Tribunal held that where a proposed development straddles land that is partly zoned under the local scheme (Zoned Land) and partly reserved under the regional scheme (Reserved Land) then as long as the Reserved Land is not also reserved under the local scheme, planning approval is not required under the local planning scheme for that portion of development on the Reserved Land.  It follows that that portion of the development is not required to comply with the development standards of the local scheme.

Following on from the Decision it would arguably also be the case that where development is proposed on land that is wholly reserved under the regional scheme but not reserved under the local scheme, that development approval is not required under the local scheme and equally the development standards of the local scheme do not apply except insofar as they are taken into consideration by the Western Australian Planning Commission (Commission) when it is considering granting approval under the regional scheme.

The Decision related to a proposed multi level mixed use development on Stirling Highway in Claremont.  The Applicant's (Freshwater Claremont Pty Ltd) land, the subject of the application was partly zoned for Special Use and was partly reserved under the Metropolitan Region Scheme (MRS) as Primary Regional Road.  The multistorey building was proposed to be constructed comprising as six levels on the Reserved Land and three levels on the Zoned Land, so as to comply with the requirements of the zone under the local scheme.

The Town of Claremont however refused the proposal on the basis that the portion of the development on the Reserved Land breached the local scheme’s height restriction of 12 metres.  The Applicant challenged the legal authority of the Town to refuse planning approval on the portion of the site that was the Reserved Land.

Interestingly, the Applicant had previously obtained approval for the proposed development from the Commission under the MRS.  This left the Applicant in a curious position whereby the development was supported at a state level, but not supported at a local level.  The difference in positions is explained by the State’s objective of increasing higher density development around transport nodes (which includes Claremont) thereby disregarding the Town’s position which reflected its prescribed height limits.

The Town unsuccessfully relied on a general clause of the local scheme which provided at clause 25(1) that 'a person shall not carry out development 'of any land in the District' without obtaining the approval of the Town of Claremont under that Scheme'.

The Tribunal determined that, on its proper interpretation, when read in the context of other relevant provisions of the local scheme and by reference to its evident purpose, clause 25(1) does not require planning approval to be obtained in relation to development of land which is regionally reserved for two reasons:

  • First, clause 25(1) should be read in the context of clause 5 which declares the responsible authority in relation to a 'Regional Reservation' to be the Western Australian Planning Commission, rather than the Town of Claremont.

  • Secondly, other clauses of the scheme establish a context that requires clause 25(1) to exclude land that is regionally reserved from the expression 'any land in the District’.

Such an outcome is in Lavan Legal’s view entirely consistent with section 124 of the Planning and Development Act 2005, which establishes the primacy of the MRS over a local planning scheme.

Impact for property owners

The Decision is yet another authority from the Tribunal in support of a method of statutory interpretation that looks beyond the literal meaning of the words used in the scheme, to a meaning which fits properly into the context of the scheme as a whole and by reference to its purpose.

What this means from a statutory interpretation perspective is that where there is inconsistency between provisions in a scheme, or ambiguity, it is necessary to review the entire scheme to read meaning into the words of the scheme.

What this means for development proposed on land that is regionally reserved but not reserved under the scheme is that it is likely that planning approval is not required under the local scheme and the scheme’s restrictions and standards are also not applicable. The scheme’s standards would simply be a relevant consideration in the exercise of the Commission’s general discretion to grant planning approval under clause 30(1) of the MRS.

Lavan Legal represented the successful Applicant.

For further information on the requirement to obtain planning approval and this case, please contact partner Paul McQueen on (08) 9288 6943 / or solicitor Clare Gleeson on (08) 9288 6782 /

When is a maximum building height not actually a maximum?

Lavan Legal's Planning and Environment Team also had success recently in representing the applicants in 242 West Coast Highway Pty Ltd v City of Stirling [2011] WASAT83.

In that case the State Administrative Tribunal determined, as a preliminary issue, that there was discretion under the City of Stirling's Local Planning Scheme No. 3 (LPS3) to approve the height of a 13 storey building at No. 242 West Coast Highway, Scarborough even though the relevant clause in the scheme prescribed a maximum building height development standard of the lesser of 44 metres above natural ground level or 12 storeys in respect to the subject land.

The case put forward was based on whether the relevant height clause in the scheme prescribed a maximum building height development standard, in which case there could be discretion under the general variation provision of the scheme to approve a one storey exceedance of the general provision.  The City's response was that the height clause was instead to be considered a special power of variation, subject to limitations and qualifications, which under established case law would exclude the application from the general variation provisions under the scheme and make the provisions of the height limit binding on the developers.

The Applicant successfully argued that the City's interpretation was flawed on two fronts:

  • Firstly, it was argued that the City's suggested interpretation would give rise to a 'perverse outcome' as it would bind the subject land to a maximum height of 44 meters above natural ground level or 12 storeys (whichever is the lesser), even though the development is required to provide a significant public access thoroughfare through the site under the provisions of the scheme, while neighbouring sites could potentially obtain development in excess of 44 meters or 12 storeys under the general variation provisions of the scheme without having to provide any public benefit.

  • Secondly, it was argued that the maximum height development standard for the site conferred a 'height bonus' over the otherwise applicable maximum building height development standard in compensation for, or as an incentive for, the redevelopment of the site subject to the provision of a public access thoroughfare as required by the scheme and as a result, discretion could be used under the general variation provisions of the scheme to allow the proposed 13 storey development.

The Tribunal agreed with both arguments and concluded that there was discretion to approve the height of the proposed building, including the number of storeys proposed under the provisions of LPS3.

This case represents significant progress towards recognising the aims outlined in the Directions 2031 policy framework for increased densification of Brownfield sites within the Perth metropolitan area.

For further information on any aspect of this case and how it may affect your proposal(s), please contact partner Paul McQueen on (08)9288 6942 / or senior associate Craig Wallace on (08) 9288 6828 /

Please note our office will be closed from 23 December 2011 until 3 January 2012.

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.