“Adjoining land” in the Land Administration Act 1997 (WA)

His Honour Le Miere J’s decision in Merrick Tyler Pty Ltd v Commissioner of Main Roads [2014] WASC 166 was delivered by the Supreme Court on 14 May 2014. It provides some useful guidance on claiming compensation in respect of severance and reduction in value of adjoining land, as provided for by s 241(7) of the Land Administration Act 1997 (WA) (LAAct).

His Honour also makes some useful observations about the application of s 241(7), and about statutory interpretation generally.

Facts

The Defendant compulsorily acquired from the Plaintiff approximately 20ha of land for the purposes of construction of the Perth Bunbury Highway. Before the acquisition, the Plaintiff owned a portion of land to the west of Old Coast Road and another portion of land to the east of Old Coast Road. At all material times the Plaintiff’s land west of Old Coast Road did not share a common boundary with the Plaintiff’s land east of Old Coast Road and these properties were separated by a minimum of 60.4m of Crown land comprising Old Coast Road.

The Plaintiff argued that the western portion of land was “adjoining land” to the acquired land, notwithstanding that Old Coast Road ran in between the two portions of land, and so the Plaintiff claimed that the western portion of land had been reduced in value as a consequence of the compulsory acquisition.

Legal question

His Honour was tasked with determining whether the western portion of land is “adjoining land” for the purposes of s 241(7).

Section 241(7) provides, in effect, that where the holder of the taken land is also the holder in fee simple of adjoining land, regard is to be had to the amount of any damage suffered by the claimant due to a reduction of the value of that adjoining land.

Determination of legal question

The Defendant says that “adjoining land” in s 241(7)(b) means contiguous land, that is land touching or in actual contact with the land taken, bordering the land taken or meeting the land taken at a common boundary.

The Plaintiff says that “adjoining” means neighbouring in the sense of being located near or nearby or being separated by some small distance.

His Honour considered both parties’ arguments with respect to the proper approach to statutory interpretation. He preferred the Defendant’s argument that s 241(7) should be construed by applying a literal approach first, and secondly a contextual approach.

In applying the literal approach to interpretation, His Honour considered dictionary definitions of the word “adjoining” submitted by the parties – with the Macquarie Online Dictionary supporting the Defendant’s argument that “adjoining” must mean bordering or contiguous, and the Online Oxford English Dictionary supporting a wider meaning in line with the Plaintiff’s argument.

Next, His Honour stated that there are textual indicators in the context of s 241(7) that support the conclusion that “adjoining land” means contiguous land, including:

• the term “any land” is used in s 241(7) to mean something wider than “adjoining land”;
• the fact that the term “adjoining” in relation to Crown land has been given a definition, at s 3(1); and
• the term “adjoining land” is used three times.

His Honour stated that applying a purposive approach to statutory interpretation is difficult in this case because the LAAct has no express statement of purpose or object of the compensation provisions of the LAAct. Further, s 241 implies a narrow reading as it states that in determining compensation, regard is to be had “solely to the matters referred to in this section”.

Lastly, His Honour dismissed the relevance of a number of legal authorities put forward by the parties in which other courts had considered the meaning of the words “adjoining land” in other legislation. His Honour stated at [23] that “the meaning of words must be determined by examining the statutory context in which the words appear”, and thus he concluded that judicial commentary on the meaning of the words as they appear in other legislation are not helpful.

Commentary on application of s 241(7)

His Honour made a number of observations about the application of s 241(7) generally, at [7]:

• any reduction in the land value which can be claimed as compensation can be set off against any increase in value that may occur by reason of the public work;
• on the other hand, a decrease in value due to the severance cannot be set off against any increase in value;
• any increase in value of adjoining land cannot be set off against the compensation of the land taken; and
• increases in value can only be set off against the adjoining land of the same owner of the land taken.

Further observations were made at [18] with regard to the at times challenging and novel application of s 241(7), which valuers will be familiar with:

• only a person from whom land is taken may claim compensation, whereas other people may suffer similar reduction in the value of their lands;
• compensation arises only when freehold land is taken, whereas damage may also be suffered when lesser interests are taken;
• only the owner of freehold land may claim compensation, whereas an adjoining leasehold may also suffer due to the severing of the land or reduction of the value of adjoining land; and
• only adjoining freehold land is relevant, whereas an adjoining leasehold may also suffer injurious affection.

Lavan Legal comment

The decision provides some useful guidance on statutory interpretation in the context of the LAAct. The decision demonstrates that the courts still uphold the primacy of the text in legislation and it demonstrates the limits on the application of the purposive approach to statutory construction in some cases.

In terms of the practical implication of this decision, compensation can now only be claimed under s 241(7) where adjoining land is contiguous or physically touching the taken land.

If you are contemplating lodging a claim for compensation in respect of land compulsorily acquired or injuriously affected, please contact Lavan Legal for further information.