PORT STEPHENS COUNCIL v FIDLER SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SHELLER and POWELL JJA and SHEPPARD AJA 4 August 1997, 4 August 1997 [1997] NSWCA 249 Building Control and Town Planning - Environmental Planning Instruments - Reserved land — Public recreation zone — Request to responsible authority to acquire — Responsible authority and land owner unable to agree on market value — Application by landowner to Land and Environment Court for order that landowner acquire by compulsory process — Whether responsible authority had failed to comply with obligation to acquire. Powell JA This is an appeal pursuant to the provisions of s58 of the Land and Environment Court Act 1979 from a Declaration made on 24 September 1996, and consequential Orders made on 25 November 1996, by Talbot J in Class 4 proceedings which had been brought by the Respondent against the Appellant seeking Orders pursuant to the provisions of Div 3 of Pt6 of the Environmental Planning And Assessment Act 1979. In his Application the Respondent, who was registered as the proprietor of two parcels of land located within an area zoned 6(a) for the purposes of Port Stephens Local Environment Plan 1987, sought the following relief: "1. An order that the Respondent acquire (a) Lot 2 in DP 854716; and (b) proposed lot 71 in DP being part of lot 7 in DP 854332 for which a Certificate of Title has not yet issued; both of which lots are zoned 6(a) pursuant to Port Stephens Local Environment Plan 1987, by compulsory acquisition in accordance with the Land Acquisition (Just Terms Compensation) Act 1991; 9. Costs." On 24 September 1996, Talbot J made a Declaration that the Appellant was required to acquire the two lots by resumption and made orders for costs. On 25 November 1996, when dealing with an application on behalf of the Appellant for a stay of proceedings, Talbot J made an order that the Appellant acquire the two lots by compulsory process and made certain other consequential Orders. The factual, and legal, context which gives rise to the present appeal is a very simple one. The land of which the Respondent is registered as proprietor is, as I have previously recorded, zoned 6(a), the objectives of which zone are: "\.. to recognise and ensure that publicly owned land is developed for open space recreation, to encourage the development of open space which best satisfies community needs and to permit developments associated with or complementary to open space. " development which is permitted either with, or without, development consent being, as one would anticipate, limited to purposes consonant with the objectives of the zone. C128 of the local area planning scheme provides inter alia: 2 UNREPORTED JUDGMENTS "28(1) This clause applies to land within Zone... 6(a)... (2) The owner of any land shown on the map within Zone No: - (a) 6(a); may, by notice in writing require (g) in the case of land referred to in (a)... - the Council to acquire the land. (3) Subject to subcl(4) on receipt of a notice referred to in subcl(2) the public authority concerned is to acquire the land. By two letters dated respectively 1, and 15, December 1995 the Respondent applied to the Appellant, which is the responsible authority for the area within which the subject land is situated, to acquire the land. Although the evidence does not expressly demonstrate that this was so, it seems tolerably plain that, having received those letters, and a similar request from another land owner, the Appellant then applied to the Valuer General for its assessment of the market value of the land in the event that it were to be acquired. In response to that request a report was provided on 3 January 1996, in which report the Valuer General indicated a range of values for each of the two blocks of land in question. In the report of the Valuer General recorded (inter alia): "Valuation basis: The Land Acquisition (Just Terms Compensation) Act 1991 provides the basis where land (not available for public sale) is being acquired by council. When assessing the market value of the land any increase or decrease in the value caused by the proposal to carry out the public purpose for which the land is being acquired has to be disregarded. The oning of the land as Open Space 6(a) is part of the proposal to use this land for public purpose and has been disregarded." Although it is clear that the Appellant does not agree with the basis upon which this report was prepared, on 29 February 1996 the Appellant made to the Respondent an offer for each of the two blocks of land at a price at the bottom of the range of prices which had been suggested by the Valuer General. That offer was rejected by the Respondent by letter dated 4 March 1996. Although the evidence does not clearly demonstrate that this was so, it seems to be the fact that, for a period of time thereafter discussions took place between the Appellant and the Respondent, or their respective representatives, with a view to seeing whether or not some agreement as to an appropriate purchase price could be obtained, but those efforts were unavailing. The proceedings before Talbot J were commenced with the filing of the Application on 30 May 1996. Thereafter Points of Claim and Points of Defence were filed by the parties, the Respondent in his Points of Claim asserting (inter alia): "(5) The Applicant has made a request to the Respondent to acquire the lands pursuant to the LEP but the Respondent has refused or neglected to do so. (6) In the absence of any agreement between the Applicant and the Respondent, the Respondent is obliged to acquire the lands pursuant to the Land Acquisition (Just Terms Compensation) Act 1991. " In its Points of Defence the Appellant asserted (inter alia): "(6) The respondent denies para6 of the Points of Claim and in further answer to the paragraph says: (a) that at no time following the receipt of the said notices has the respondent indicated to the applicant that it is unwilling to acquire the Lands; (b) that by letter dated 29 February 1996 it offered to purchase the Lands; URJ PORT STEPHENS COUNCIL v FIDLER (Powell JA) 3 (c) that by letter dated 4 March 1996 the respondent's offer to purchase the Lands was rejected; and (d) that the respondent remains ready, willing and able to acquire the lands for a price which represents its true market value. " It would seem that the basis of the disagreement between the parties as to an appropriate purchase price is to be found in their differing views as to the proper method of valuing the lands in question, the Appellant, as I have previously indicated, rejecting the view expressed by the Valuer General that the potential effect of the restrictions on land use must be disregarded, with the Respondent, through his valuer, taking a different approach to the appropriate methodology. The Application which was brought before Talbot J is, as I have previously noted, based upon the provisions of Div 3 of Pt6 of the Environmental Planning And Assessment Act 1979, the relevant provisions of which are as follows: "122 Definitions In this Division (a) a reference to a breach of this Act is a reference to: (i) a contravention of of failure to comply with the Act (b) a reference to this Act includes a reference to: (i) an environmental planning instrument 123 Restraint etc of breaches of this Act (1) Any person may bring proceedings in the Court for an order or a r emedy or restraint of breach of this Act, whether or not any r ight of that person has been or may be infringed by or as a consequence of that breach; 124 Order of the Court (1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will unless restrained by an order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach." The burden of Talbot J's Judgment may be found in the following passages (AB 208-209): "The Court is satisfied that cl28 does not provide the sole source of power and obligation in relation to the acquisition of the land the subject of these proceedings. There is no dictate in cl28 that would enable the Court to read down the words of the clause to discern between one means of acquisition or the other. The Court has regard to powers which a council has to acquire land either by agreement or by a compulsory process. If an agreement cannot be reached then the only alternative left is for the process of compulsory acquisition to be implemented. There is (sic) no criteria which is established in the LEP or elsewhere that says the negotiations to achieve an agreement must be conducted in a particular way. This is not a case where either party has been shown to be recalcitrant or is responsible in its demands. Indeed this is a case where there is a genuine dispute between the parties as to the methodology that should be adopted in regard to the way by which compensation should be determined. In those circumstances it is reasonable for the Court to accept that the pursuit of a privately negotiated agreement is unlikely to materialise in a positive result. I am not satisfied that the applicant should be placed in the situation where it should explore anything beyond an attempt to reach an agreement as if the applicant was a willing but not anxious vendor and the council a purchaser who is prepared to pay the market value for the land. 4 UNREPORTED JUDGMENTS It is not common to resolve disputes as to purchase price by referring the matter to arbitration, mediation, conciliation or any other means of involving a third party to resolve differences between the parties. I am not saying that never occurs but it is not a usual means of dealing with disputes as to price. The parties have attempted to agree on a price and they have failed. The law provides a process whereby statutory authorities may acquire land by means of the compulsory process and establishes a regime u hereby the amount of compensation can be established according to that statutory framework. lam satisfied in the circumstances that it is appropriate for the applicant in this case to have the benefit of an order requiring the council to implement the procedures for compulsory acquisition by resumption. " When the appeal was called on for hearing this morning Mr JF Kildea appeared for the Appellant while Mr WR Davison SC and Mr DR Parry appeared for the Respondent. As I understand his submissions Mr Kildea does not challenge that finding of Talbot J which I have set out in the passages which I have included above that: "Tn those circumstances it is reasonable for the Court to accept that the pursuit of a privately negotiated agreement is unlikely to materialise in a positive result.". Rather, Mr Kildea has submitted that, that finding notwithstanding, it has not been demonstrated that the Appellant has, in the relevant sense, failed to comply with the provisions of cl28 of the Port Stephens Local Environmental Plan 1987. In this regard, Mr Kildea has submitted that, before a finding of failure is justified, some element of fault on the part of the Appellant needed to be demonstrated, and that, far from that having been done, the evidence established, and Talbot J held (inter alia) that the Appellant had acted in a reasonable and responsible manner. With respect, I am unable to accept that submission. While it is true, that there may be some circumstances in which the words "fail" or "failure" carry with them the suggestion of fault on the part of a person who is alleged to have failed or whose alleged failure is in question, fault is not a necessary part of meaning of either of those words. Thus the Concise Oxford Dictionary (7 Ed (1982) 347) records (inter alia) that the word "fail", in either its intransitive, or transitive, senses as a verb may include a meaning "not be able to" while the word "failure" is given, as one of its primary meanings "non-occurrence". Similar meanings may be found in Macquarie Dictionary ((1982) 436) where the verb "fail" is said to include as a primary meaning "be wanting in action" and the word "failure" is said to include as primary meanings "a proving unsuccessful" and "non-performance of something due or required". It seems to me that, when one sees that the word "failure" in s122(a)(i) of the Environmental Planning And Assessment Act 1979 is used in a disjunctive sense from the Nvord "contravention" - a word which, to me, suggests a knowing breach - one is entitled to proceed upon the basis that one may fail to comply with a provision of the Act or of a relevant planning instrument, even though there is no fault, in the conventional sense, in the failure involved. In the present case, given the provisions of s187 of the Local Government Act 1993, which provides that a council may acquire land by only two means, that is, by negotiated agreement or private treaty, on the one hand, and by compulsory acquisition pursuant to the provisions of the Lands Acquisition (Just Terms Compensation) Act 1991, on the other; and given that there has been an inability URJ PORT STEPHENS COUNCIL v FIDLER (Sheppard AJA) 5 on the part of the Appellant, as the relevant responsible authority, and the Respondent, as the relevant land owner, to negotiate an agreement for the acquisition of the land, there has, in my view, been a relevant failure to comply with the provisions of cl28 of the Port Stephens Local Environment Plan 1987. It seems to me that, in a case where such a failure has been demonstrated, it is not open to the Land and Environment Court, at first instance, or to this Court, on an appeal, as a matter of discretion, to refuse to make an order for compulsory acquisition In the present case the finding of fact by Talbot J not being challenged and there having been a relevant failure, it follows, in my view, that the appeal should be dismissed with costs, and I so propose. Sheller JA I agree. Sheppard AJA I also agree. It seems to me that this case really does involve a question of fact. This was emphasised in his Honour's judgment when he said at the conclusion: "However the Court is satisfied that although the legislation does not spell it out, there is nevertheless a clear process whereby council may acquire land, or should I say there are two clear processes whereby council can acquire land. One of those processes has, on the evidence, failed, and the applicant is thus entitled to the order which he seeks." That was a finding which it was open to his Honour to make, notwithstanding submissions to the contrary made by counsel for the appellant. I would also say that to the extent that that finding involved the exercise of a discretion, and I am not sure that it did, there is nothing to suggest that the discretion in any way miscarried. The only other thing I wish to say is by way of reservation. I would prefer to leave for another day the question whether contravention in s122 of the Environmental Planning And Assessment Act (1979) necessarily involves an element of fault. It is possible that neither failure used in that section nor contravention require, necessarily, an element of fault. I express no concluded view in relation to contravention, I would simply prefer to leave the matter until it arises directly for consideration. I agree that the appeal should be dismissed. SHELLER JA: The order of the Court will be that the appeal is dismissed with costs. Appeal dismissed with costs. Counsel for the Appellant: JF Kildea Solicitors for the Appellant: Trevor Dunn Solicitors (Hamilton) Counsel for the Respondent: WR Davison SC and DR Parry Solicitors for the Respondent: Clayton Utz