Structure plans and compensation for injurious affection – liability for local governments

In the recent case of Scutti v City of Wanneroo [2018] WASCA 175, the Court of Appeal has held that the responsible local government may be liable for compensation for the impacts of an approved structure plan where land is designated for a public purpose (such as local open space). The decision will have potentially far –reaching ramifications for the liability of a local government in adopting structure plans that ‘reserve’ land for such public purposes and for the corresponding opportunities for landowners whose land is impacted by a structure plan to claim compensation.

Background

The Court of Appeal considered and reversed the decision of the primary judge (Justice Le Miere) who had considered a decision by the State Administrative Tribunal (SAT) that had ruled that a structure plan which designated the applicants’ land for ‘public open space’ did not injuriously affect (depreciate)  the value of their land. The SAT had held that although the relevant clauses in the planning scheme could in certain circumstances injuriously affect land the particular wording of the structure plan did not ‘reserve’ the land for public purposes (only designating as ‘public open space’).

Justice le Miere held that the status of a structure plan under the ‘Deemed Provisions’ of the Regulations 1 was no more than a policy instrument which a decision maker (the City) was to have regard to (but not bound by) and was not incorporated into the City’s planning scheme  itself. Justice le Miere held that the applicants’ land had not been reserved by the planning scheme and that the designation in the structure plan for ‘local open space’ did not intend to impose a reservation upon the applicants’ land.

The applicants appealed the primary judges decision to the Court of Appeal. The Court of Appeal judges’ unanimous decision was that the interpretation of the relevant provision of the Planning and Development Act 2005 (PDAct) was to connote a causal relationship between the injurious affection (arising from the structure plan) and the making of the planning scheme. The Court of Appeal held that by reason of such causal connection the applicants’ land was reserved under the planning scheme for a public purpose so that compensation may arise under section 174 PDAct.

Reasoning of the Court of Appeal

The applicants argued that the provisions of the planning scheme should be construed broadly, rather than pedantically, and with a sensible practical approach. The applicants argued the references in the structure plan to ‘public open space’ was a classification of reservation of land which had effect under the planning scheme. The City argued to the contrary, that the ‘public open space’ designation was merely an “allocation” that did not detract from the permissibility of other uses that might be approved under the planning scheme.

The Court of Appeal noted that the subject land was zoned Urban Development under the City’s planning scheme and that the provisions of the planning scheme gave effect to the structure plan’s classifications as to permissible uses for that zone. The Court of Appeal held that these provisions extended to the classification of a local reserve to land designated Public Open Space in the structure plan.

The Court of Appeal noted that the structure plan provided for other possible uses to be approved, however, that did not negate the classification of the subject land as a reserve for Public Open Space. The Court of Appeal observed that the matter of reservation was to be  determined objectively, not by reference to whether the City may subjectively harbor an intention that the land  may ultimately not be required for acquisition.

The Court of Appeal noted that the land had not been reserved by the planning scheme itself, or by an amendment to the planning scheme, but nevertheless held that the structure plan designation of the subject land for a public purpose was a reservation of the land ‘under’ the PDAct so as to be within the relevant compensation provision of the PDAct.

Lavan comment

This case significantly broadens  the potential  situations in which injurious affection may be held to occur where there is a designation of land for  public purposes in a structure plan, notwithstanding that the structure plan (or indeed the scheme) may not refer to such land as being ‘reserved’ for a public purpose. This case will have implications in particular for local governments preparing and administering structure plans. Anyone who is involved in land affected by a structure plan should consider obtaining specialist legal advice in respect of their particular site, especially if the structure plan in question identifies any part of the land as reserved or set aside for public purposes as the opportunity for compensation may arise.

If you have any queries in this regard, please contact the Lavan Land Compensation team.