SEMINAR – Monday 7th April 2014
RESUMPTION OF LAND – THE LAND COURT Since QELA’s last seminar on resumption of land in 2006, there have been a number of changes to the Acquisition of Land Act 1967 and developments in case law, including the decision of the High Court in Springfield Land Corporation (No 2) Pty Ltd v Queensland (2011) 242 CLR 632. The purpose of this seminar is to provide an overview of practice and procedure in the Land Court, an update on recent case law in relation to resumption of land, and an overview of valuation of land principles and methodologies. SPEAKERS
HIS HONOUR MR WL COCHRANE Member, Land Court His Honour Mr WL Cochrane will speak about practice and procedure in the Land Court, including experts’ meetings, mediation, the rules of the Court and current issues for practitioners. GRAHAM GIBSON QC Barrister‐at‐Law Graham will generally review legal principles in relation to the resumption of land, with a focus on significant changes to legislation and important legal decisions. MICHAEL SLATER Property Valuer Michael will discuss resumption of land from a valuer's perspective, focussing on valuation principles and methodologies as they apply to the assessment of compensation under the Acquisition of Land Act 1967. CHAIR
Gemma Ayriss – Senior Associate, HopgoodGanim Lawyers
WHEN
Monday 7th April 2014
WHERE
Norton Rose Fulbright, Level 21, ONE ONE ONE, 111 Eagle Street Brisbane
PROGRAM
5.00 pm
5.30 pm
6.30 pm
7.00 pm
Registration
Seminar begins
Questions/discussion
Seminar concludes Refreshments served
CPD POINTS CPD points for QELA seminars may be claimed on the basis of one point for every hour (excluding breaks),
providing that the seminar content is relevant to the solicitor or barrister’s area of practice.
DISCLAIMER While QELA endeavours to encourage debate, the views expressed by speakers are not to be taken as being
the views of QELA. QELA is a non-political organisation, the objects of which are to educate and inform members on issues
of interest.
10585547/1
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10585547/1
QUEENSLAND ENVIRONMENTAL LAW ASSOCIATION SEMINAR 7 APRIL 2014
ACQUISITION OF LAND ACT 1967
- SIGNIFICANT CHANGES TO LEGISLATION
- RECENT CASE-LAW
TABLE OF CASES ................................................................................................................... 3 Introduction ................................................................................................................................ 4 An overview of the scheme of the Act....................................................................................... 4 Taking of land ........................................................................................................................ 4 Taking other than by agreement ............................................................................................. 4 Taking by agreement .............................................................................................................. 5 Discontinuance of taking of land ........................................................................................... 6 Reference of claim for compensation to the Court ................................................................ 8 Costs ....................................................................................................................................... 8 Interest .................................................................................................................................... 8 Mortgages ............................................................................................................................... 9 Disposal of land...................................................................................................................... 9 Other provisions ..................................................................................................................... 9 Recent case-law ....................................................................................................................... 10 “Interest” in land – contractual licence is an interest in land – Sorrento Medical Service Pty
Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd. R. 373 (Court of Appeal) ... 10 The Facts .............................................................................................................................. 10 The Decision ........................................................................................................................ 10 Significance of the Decision ................................................................................................ 11 Enhancement of the value of the claimant’s interest – Springfield Land Corporation (No. 2)
Pty Ltd v State of Queensland & Anor (2011) 242 CLR 632 (High Court of Australia)......... 13 The Facts .............................................................................................................................. 13 The Decision ........................................................................................................................ 14 Significance of the Decision ................................................................................................ 15 Enhancement of the value of the interest of the claimant – land “adjoining” the land taken –
Gold Coast City Council v Halcyon Waters Community Pty Ltd (2011) 32 QLCR 146 (Land
Court Appeal)........................................................................................................................... 16 The Facts .............................................................................................................................. 16 The Decision ........................................................................................................................ 16 Admissibility of evidence of events post-dating acquisition date – Brisbane City Council v
Mio Art Pty Ltd [2012] 2 Qd. R. 1 (Court of Appeal) ............................................................. 17 The Facts .............................................................................................................................. 17 The Decision ........................................................................................................................ 17 Highest and best use – market value – post resumption sales – Brisbane City Council v
Bertoli (2012) 33 QLCR 418 (Land Appeal Court)................................................................. 20 The Facts .............................................................................................................................. 20 The Decision ........................................................................................................................ 20 Scheme of resumption - Department of Transport and Main Roads v Mahoney [2014] QLAC
1 (Land Appeal Court) ............................................................................................................. 22 The Facts .............................................................................................................................. 22 The Decision ........................................................................................................................ 22 2
Business losses/loss of profits/relocation expenses – Ostroco Pty Ltd v Chief Executive,
Department of Transport and Main Roads [2013] QLAC 4 (Land Appeal Court) ................. 25 The Facts .............................................................................................................................. 25 The Decision ........................................................................................................................ 25 Business losses/loss of profits/relocation expenses – Jensin Family Pty Ltd t/a Bank of
Queensland Coorparoo v Chief Executive, Department of Transport and Main Roads (2012)
33 QLCR 386 (Land Court) ..................................................................................................... 28 The Facts .............................................................................................................................. 28 The Decision ........................................................................................................................ 28 The operation of section 18(5) – Chief Executive, Department of Transport and Main Roads v
The Young Men’s Christian Association of Brisbane [2014] 1 Qd. R. 129 (Court of Appeal)
.................................................................................................................................................. 29 The Facts .............................................................................................................................. 29 The Decision ........................................................................................................................ 29 Further Reading ....................................................................................................................... 30 3
TABLE OF CASES
Brisbane City Council v Bertoli (2012) 33 QLCR 418.
Brisbane City Council v Mio Art Pty Ltd [2012] 2 Qd. R. 1.
Chief Executive, Department of Transport and Main Roads v The Young Men’s Christian
Association of Brisbane [2014] 1 Qd. R. 129.
Gold Coast City Council v Halcyon Waters Community Pty Ltd (2011) 32 QLCR 146.
Housing Commission (NSW) v San Sebastian Pty Ltd1- Department of Transport and Main
Roads v Mahoney [2014] QLAC 1.
Jensin Family Pty Ltd t/a Bank of Queensland Coorparoo v Chief Executive, Department of
Transport and Main Roads (2012) 33 QLCR 386.
Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads [2013] QLAC
4.
Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd.
R. 373.
Springfield Land Corporation (No. 2) Pty Ltd v State of Queensland & Anor (2011) 242 CLR
632.
1
(1978) 140 CLR 196 at 206
4
Introduction
1.
Upon its commencement in March 1968 the Acquisition of Land Act 1967 (“the Act”)
repealed or amended the provisions of 36 statutes2 providing for the compulsory
acquisition of land, and thereby consolidated those provisions into the one “umbrella”
statutory scheme.
2.
The Act provides for:
- The purposes for which land may be taken under the Act3
- The procedure for the taking of land (whether compulsorily, or by agreement)
- The discontinuance of the taking of land
- The entitlement to compensation in consequence of the taking of land, the
assessment of compensation and the determination of claims for
compensation by the Land Court (“the Court”).
An overview of the scheme of the Act4
Taking of land
3.
The Act provides for the compulsory taking of land (sections 7-14) and the taking of
land by agreement (section 15).
4.
Schedule 1 of the Act comprises a comprehensive list, divided into 14 Parts, of the
purposes for which land may be taken under the Act. Where the constructing authority
is the Crown, land may be taken under the Act for any purpose set out in the Schedule:
section 5(1)(a). Where the constructing authority is a local government, or a
constructing authority other than the Crown or a local government, land may be taken
for any purpose in Schedule 1 which that entity may lawfully carry out, or for any other
purpose which that entity is authorised or required to carry out by a provision of an Act
other than the Act: section 5(1)(b) and section 5(1)(c).
Taking other than by agreement
5.
A constructing authority which proposes to take any land is obliged to serve a Notice of
Intention to Resume (“NIR”) on any person who, to the knowledge of the constructing
authority, will be entitled to claim compensation under the Act in respect of the taking,
2
3
4
Listed in the First Schedule of the Act in its original form.
Note that the term “land” is defined broadly, to mean land “or any estate or interest in the land, that is
held in fee simple, including fee simple in trust under the Land Act 1994, but does not include a
freeholding lease under that Act”: definition, Schedule 2.
As an overview, the following discussion does not purport to address the provisions of the Act with
precision.
5
or is a mortgagee of the land: section 7(1) and (2). The Act provides for specific
requirements of an NIR: section 7(3). A person to whom an NIR is directed may object
in writing to the taking of the land: section 7(3)(d) and (e). The constructing authority
is obliged to consider the grounds of objection, and it may amend or discontinue the
resumption following that consideration: section 8.
6.
If the constructing authority maintains the intention to continue the resumption, it may
apply to the relevant Minister that the land be taken: section 9(1). Depending on the
circumstances, either the Governor in Council or the Minister may, by gazette notice,
declare that the land is taken for the stated purpose: section 9(6) and (7) and the taking
is effective on the day of publication of the notice: section 9(8).
7.
Privately owned freehold land vests in the Crown, or in the constructing authority
requiring the land, on and from the date of publication of the notice in the gazette:
section 12(1)(a). By section 12(5), on and from the date of publication of the gazette
resumption notice the land vests (or becomes unallocated State land, as the case may
be)
…absolutely free and discharged from all trusts, obligations, mortgages, charges, rates,
contracts, claims, estates, or interest of what kind so ever, or if an easement only is taken,
such easement shall be vested in the constructing authority or…in the corporation
requiring the easement
and
…the estate and interest of every person entitled to the whole or any part of the land shall
thereby be converted into a right to claim compensation under this Act and every person
whose estate and interest in the land is injuriously affected by the easement shall have a
right to claim compensation under this Act.
8.
The amount of compensation may be agreed between the constructing authority and the
claimant, subject to the consent of any mortgagee: section 12(5A). Failing agreement,
a claim for compensation may be enforced against the constructing authority as
provided by the Act: section 12(5B).
Taking by agreement
9.
Section 15 of the Act provides, in straightforward terms, for a resumption agreement
between the constructing authority, and a mortgagee and any person otherwise entitled
to claim compensation under the Act in respect of the taking of the land: section 15(1) –
(3). A resumption agreement may, but need not, include an agreement as to the amount
of compensation payable for the taking: section 15(4). A taking under these provisions
is also effective on the day a gazette resumption notice is published: section 15E.
6
Discontinuance of taking of land
10.
The Act provides for the discontinuance of a resumption at any time before the
publication of the gazette resumption notice (including provision for payment for costs
and expenses incurred by the person who was served with the notice, and any actual
damage done to the land concerned by the constructing authority): section 16, and for
the revocation of a resumption at any time after publication of the gazette resumption
notice and before the amount of compensation payable has been determined by the
Land Court, or payment of compensation has been made, if it is found that the land or
any part thereof is not required for the purpose for which it was taken: section 17(1).
11.
A person who has a right to claim compensation under section 12(5) may claim that
compensation from the constructing authority under and in accordance with the
provisions of Part 4 of the Act: section 18(1). Section 19 prescribes the requirements
for a claim for compensation. Section 20 addresses the assessment of compensation. It
was substantially amended by the Acquisition of Land and Other Legislation
Amendment Act 2009, principally by including specific reference to a claimant’s
entitlement to “costs attributable to disturbance”: section 20(1)(b) and comprehensively
listing the matters falling within the scope of that expression: section 20(5). It’s
importance warrants that it be set out in full:
20.
Assessment of compensation
(1)
In assessing the compensation to be paid, regard shall in every case be had
not only to the value of land taken but also –
(a)
(b)
to the damage, if any, caused by any of the following –
(i)
the severing of the land taken from other land of the claimant;
(ii)
the exercise of any statutory powers by the constructing
authority otherwise injuriously affecting the claimant’s other
land mentioned in sub-paragraph (i); and
to the claimant’s costs attributable to disturbance.
Note - [Excluded]
(2)
Compensation shall be assessed according to the value of the estate or
interest of the claimant in the land taken on the date when it was taken.
(2A) However, in assessing the compensation, a contract, licence, agreement or
other arrangement (a relevant instrument) entered into in relation to the
land after the notice of intention to resume was served on the claimant must
not be taken into consideration if the relevant instrument was entered into
for the sole or dominant purpose of enabling the claimant or another person
to obtain compensation for an interest in the land created under the
instrument.
7
(3)
In assessing the compensation to be paid, there shall be taken into
consideration, by way of set-off or abatement, any enhancement of the value
of the interest of the claimant in any land adjoining the land taken or severed
therefrom by the carrying out of the works or purpose for which the land is
taken.
(4)
But in no case shall subsection (3) operate so as to require any payment to
be made by the claimant in consideration of such enhancement of value.
(5)
In this section –
costs attributable to disturbance, in relation to the taking of land, means all
or any of the following –
(a)
legal costs and valuation or other professional fees reasonably
incurred by the claimant in relation to the preparation and filing of the
claimant’s claim for compensation;
(b)
the following costs relating to the purchase of land by a claimant to
replace the land taken –
(i)
stamp duty reasonably incurred or that might reasonably be
incurred by the claimant, but not more than the amount of
stamp duty that would be incurred for the purchase of land of
equivalent value to the land taken;
(ii)
financial costs reasonably incurred or that might reasonably be
incurred by the claimant in relation to the discharge of a
mortgage and the execution of a new mortgage, but not more
than the amount that would be incurred if the new mortgage
secured the repayment of the balance owing in relation to the
discharged mortgage;
(iii)
legal costs reasonably incurred by the claimant;
(iv)
other financial costs, other than any taxation liability,
reasonably incurred by the claimant;
(c)
removal and storage costs reasonably incurred by the claimant in
relocating from the land taken;
(d)
costs reasonably incurred by the claimant to connect to any services
or utilities on relocating from the land taken;
(e)
other financial costs that are reasonably incurred or that might
reasonably be incurred by the claimant, relating to the use of the land
taken, as a direct and natural consequence of the taking of the land;
(f)
an amount reasonably attributed to the loss of profits resulting from
interruption to the claimant’s business that is a direct and natural
consequence of the taking of the land;
(g)
other economic losses and costs reasonably incurred by the claimant
that are a direct and natural consequence of the taking of the land
8
Example of costs for paragraph (g) –
cost of school uniforms for children enrolled in a new school because of relocation
from the land taken
12.
A claimant for compensation may apply to the constructing authority for payment of an
advance in respect of the compensation claimable by the claimant: section 23(1). If
satisfied that the applicant is entitled to claim compensation and that the amount of the
advance sought does not exceed an amount offered by the constructing authority to
settle the claim (or if no such offer has been made, an amount equal to the constructing
authority’s estimate of the amount of compensation payable to the claimant) it is
obliged to pay the applicant the advance applied for: section 23(2) and (3). Subject to
certain exceptions, any amount payable to a claimant by way of an advance and which
is not paid within 90 days after the application, is recoverable by the claimant as a debt
due and unpaid to it by the constructing authority: section 23(4).
Reference of claim for compensation to the Court
13.
Either the constructing authority or the claimant may refer to the Court the hearing and
determination of the amount of compensation: sections 24 and 25, and the Court has
jurisdiction to hear and to determine all matters relating to compensation under the Act:
section 26. If the constructing authority makes an advance to a claimant under section
23 and the amount of compensation subsequently determined by the Court is less than
the amount of the advance, the Court also has jurisdiction to order the claimant to pay
the difference, with interest, to the constructing authority, which order may be enforced
as if it were an order of the Supreme Court: section 26A.
Costs
14.
Subject to the provisions of section 27(2), costs of and incidental to a hearing and
determination of the Court of a claim for compensation under the Act “…shall be in the
discretion of that court”: section 27(1).
15.
If the amount of compensation as determined is the amount finally claimed by the
claimant in the proceedings or is nearer that amount than to the amount of the valuation
finally put in evidence by the constructing authority costs (if any) shall be awarded to
the claimant. Otherwise, costs (if any) shall be awarded to the constructing authority:
section 27(2). Sub-section (2) expressly does not apply to any appeal in respect of a
decision of the Court: section 27(3).
Interest
16.
The Court or, on appeal, the Land Appeal Court, may order that interest be paid on the
amount of compensation determined by it in respect of the period commencing on the
date on which land is taken and ending on the date immediately preceding the date of
9
payment of such compensation: section 28(1). Such interest shall be at the rate the
Court or the Land Appeal Court, deems reasonable: section 28(1A) and is payable as if
it were part of the compensation in question, and shall be added to the amount thereof
and to be payable accordingly: section 28(1B). Interest is not, however, payable in
respect of any amount of compensation advanced under section 23: section 28(2).
Mortgages
17.
Specific provision is made for payment to a mortgagee of so much of the amount of the
compensation as does not exceed the sum due to the mortgagee: section 32(1).
Disposal of land
18.
When land has been taken, either compulsorily or by agreement and, within seven years
after the date of taking the constructing authority no longer requires the land, it shall
offer the land for sale to the former owner at a price determined by the valuer-general
under the Land Valuation Act 2010: section 41.
Other provisions
19.
The Act includes other provisions, not limited to machinery and facilitative provisions,
which should not be ignored.
10
Recent case-law
“Interest” in land – contractual licence is an interest in land – Sorrento Medical Service
Pty Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd. R. 373 (Court of
Appeal)
The Facts
The appellant conducted a medical practice at Sorrento, on the Gold Coast. It leased part of
the ground floor of a building from the owner, an associated company. The lease conferred
exclusive rights on the appellant, as lessee, to use an identified part of the car parking area for
the parking of vehicles by the appellant or its permitted invitees.
The chief executive resumed part of the land, including part of the car park, for road
widening purposes.
The landowner’s claim for compensation was resolved by agreement. Sorrento’s claim was
dismissed by the Land Court (confirmed on appeal to the Land Appeal Court) on the ground
that “…the estate and interest of every person entitled to the whole or any part of the land…”
(section 12(5) referred to, and required, that the claimant have a proprietary interest in the
land taken, and not merely a contractual licence to use the land).
The Decision
The Court of Appeal (McMurdo P and Chesterman J, Holmes JA dissenting) held that the
appellant did have an “interest” within the meaning of that term in section 12(5) of the Act in
the resumed land and was entitled to claim compensation in consequence of the resumption.
Both McMurdo P and Chesterman J referred to the definition of “interest” in section 36 of the
Acts Interpretation Act 1954.5 Each referred to the well known statement of principle of
Gaudron J in Marshall v Director General, Department of Transport (2001) 205 CLR 603 at
623.6
McMurdo P found support in the wording of section 18(3) for the conclusion that the
appellant’s contractual right to use the car park was an “interest” (within the meaning of
section 12(5) of the Act) in the resumed land.7 Her Honour continued8:
“My preferred construction turns on the application to the Act of the definition of
“interest” in s 36 Acts Interpretation Act. I appreciate that the dangers of construing a
like definition too widely were referred to in Hornsby Council v RTA 151, Mason P. 152
5
6
7
8
[2007] 2 Qd. R. 373 at 378 [8]–[9]; 380 [16]; 384 [40]; 373 [48], [51]–[53].
At 379 [12]; 386 [46].
At 380 [15]. Section 18(3) provides to the effect that “compensation shall not be claimable by a
person…who is a lessee, tenant or licensee of any land taken…” if the construction authority allows the
person’s estate or interest to continue uninterrupted.
At 380 [16]. Note: footnotes deleted.
11
– 153; Meagher JA, 155. The appellant’s apparently valuable contractual car parking
rights in relation to the resumed land for which it seeks to claim compensation under the
Act are plainly distinguishable from the rights asserted in Hornsby, which were no more
than the right of every member of the general public over the land in question. Hornsby
does not require that s 12(5) be construed as excluding the appellant’s entitlement to
claim compensation for its interest in the land it has lost through the respondent’s
resumption of the land.”
Chesterman JA observed9:
“If it is right, as I think it is, to give interest in that section the wider meaning conferred
by the Acts Interpretation Act, then every person entitled to an interest, so defined, ie a
right over or in relation to the land, is entitled to claim compensation upon its
resumption.”
And further:10
“One should not lose sight of the obvious point that one is construing a sub-section
which confers a right to compensation upon the loss of land taken for the public benefit.
One should not search for meanings which are not readily apparent, not be assiduous to
find a statutory context which would exclude the wider definition of interest and so
restrict the right to compensation. One should approach the construction of the provision
in the manner described by Gaudron J and Heydon JA, and one should not rely upon
words of nebulous meaning to provide a statutory context inconsistent with the
application of the Acts Interpretation Act.”
And finally:11
“It may be that to apply the full width of the definition of “interest” found in the Acts
Interpretation Act might, in some cases, produce claims for compensation that might
probably attract the epithet “absurd”, but the present is not of that kind. One has here a
right of property clearly identified, the limits of which are specified and which had a
value. The proprietor is identified and the existence of the licence was proved in a
document available for public search. In my opinion it is a matter of plain justice, not
absurdity, that the proprietor should be compensated when his property is destroyed, for
the good of the wider public.”
Significance of the Decision
Sorrento was the catalyst for the insertion of section 12(5C) in February 2009. It provides
that, despite sub-section (5)12 a person does not have a right to claim compensation under the
Act in relation to an interest in land “…that is an interest under a services contract for the
land.”
9
10
11
12
At 387 [52].
At 388 [57].
At 389 [63].
Noted above at para 7.
12
The second reading speech in relation to the Acquisition of Land and Other Legislation
Amendment Bill stated (rightly or wrongly) that in consequence of the Sorrento decision
“…the scope of what constituted an ‘interest’ [is] somewhat uncertain.” And that “in order to
limit the meaning of ‘interest’, contracts for service, such as cleaning contracts will be
excluded.
In LGM Enterprises Pty Ltd v Brisbane City Council13 the Land Appeal Court applied
Sorrento14 in holding that the lessee of a shop in a small shopping centre had an “interest” in
land comprising a landscaped area with constructed pathways from the footpath to the car
parking area, and thence to the shops, which land was resumed for road widening purposes.
The Court concluded that, on the proper construction of the lease, the resumed land
comprised part of the “common areas” under the lease, in respect of which the claimant had
contractual rights as well as statutory rights under the Retail Shop Leases Act 1994.15
Recently, in Moreton Bay Regional Council v Mekpine Pty Ltd & Anor16 the Land Appeal
Court confirmed the decision at first instance that a lessee of a shop in a shopping centre, one
frontage of which was resumed for road widening purposes, had an “interest” in the resumed
land notwithstanding that there was no express provision in the lease conferring a right in the
lessee “claimant to use the common areas”. It was held to be sufficient that, notwithstanding
the absence of such an express provision, other provisions, properly construed, conferred an
entitlement on the lessee to use the common areas (of which the resumed land comprised
part) for the purpose of ingress to and egress from the premises.17 The Court added that, if
the Court in LGM Enterprises had held to the effect that section 43 of the Retail Shop Leases
Act was itself sufficient to give a lessee of a shop in a retailed shopping centre an interest in
land beyond the leased area, it should not be followed.
13
14
15
16
17
(2008) 29 QLCR 176.
Esp at 176 [23] – 182 [28].
Esp at 180 [18] – 181 [22]; 181 [29]
[2013] QLAC 5
Esp at [73] – [77]
13
Enhancement of the value of the claimant’s interest – Springfield Land Corporation (No.
2) Pty Ltd v State of Queensland & Anor (2011) 242 CLR 632 (High Court of Australia)
The Facts
The appellant (“Springfield”) owned almost 3,000 hectares of land southwest of the Brisbane
CBD which was expected to house at least 60,000 people over the course of its long-term
development. The development, which commenced in about 1992, became the subject of a
draft Springfield Development Control Plan, which identified a Regional Transport Corridor
running from the western end of the Centenary Highway (at the Ipswich Motorway) through
the Springfield land and through or close to the proposed Springfield Town Centre and thence
to the area of Ripley and, ultimately, the Cunningham Highway.
Springfield and the Ipswich City Council entered into an infrastructure agreement whereby
certain land was dedicated for road purposes and, in particular the transport corridor. A
subdivision approval granted by the Council included a term requiring the transfer to the
Council, free of compensation, of certain land to be held for future road purposes, and upon
which would be constructed part of the transport corridor. Subsequently, it became apparent
that some of the land transferred was not required (approx 7 hectares in area), but that some
land not transferred, and still owned by Springfield, was required in consequence of a
realignment of the corridor at a particular location.
The additional area was taken pursuant to a Notice of Intention to Resume that stated the
purpose of the resumption as follows:
“For future transport purposes including the facilitation of transport infrastructure
(namely road and busway, rail or light rail) for the South-West Transport Corridor”.
The parties agreed that compensation would be determined by an arbitrator, but applying the
provisions of the Acquisition of Land Act.
The parties agreed that the value of the additional land taken was in an amount approximating
$1,500,000.00 but disagreed as to whether section 20(3) of the Act applied so as to disentitle
Springfield to compensation. Section 20(3) provided:
“(3) In assessing the compensation to be paid, there shall be taken into a consideration,
by way of set-off or abatement, any enhancement of the value of the interest of the
claimant in any land adjoining the land taken or severed there from by the carrying out of
the works or purpose for which the land is taken.”
It was common ground that the value of Springfield’s land holding was enhanced by the
South-West Transport Corridor. The issue between the parties was whether the purpose for
which the additional land was taken was simply to effect a realignment of the designated
transport corridor which, of itself, caused no enhancement to the value of Springfield’s land,
or whether that purpose was for the carrying out of the works which were the extension of the
14
transport corridor west from the Springfield Town Centre, even though the resumed land
would constitute only a very small part of the land required.
The arbitrator concluded in favour of Springfield. That determination was overturned by the
Supreme Court (upon appeal under the Commercial Arbitration Act 1990). An appeal to the
Court of Appeal was dismissed, from which Springfield obtained special leave to appeal to
the High Court.
The Decision
By majority (French CJ, Gummow, Hayne and Crennan JJ, Heydon dissenting), the High
Court rejected Springfield’s submission.
The joint judgment of the majority identified the relevant “purpose” of the resumption as that
for which the resumed land would have been taken had the statutory processes set in train by
the Notice of Intention to Resume not be supplanted by the arbitration agreement.18 The
purpose for which the resumed land was taken was that identified in the Notice of Intention to
Resume the relevant purpose was “…future transport purposes including the facilitation of
transport infrastructure, being road and busway, rail or light rail for the South-West Transport
Corridor”. The majority endorsed the conclusion of McMurdo J that although, in one sense,
the land was taken to effect a minor realignment of the existing road corridor that was not the
relevant purpose for the operation of section 20(3). The “purpose” referred to in section
20(3) corresponds with the purpose for which there is a power of compulsory acquisition. As
his Honour put it:
“That indicates that the purpose was to be understood as the public benefit or/and to be
achieved, rather than some means to that end, and that the arbitrator’s identification of
the purpose was incorrect.”19
In so concluding, the majority dismissed reliance, by the State and the Chief Executive, on
the “Pointe Gourde” principle. The majority referred to the observations in Walker
Corporation Pty Ltd v Sydney Harbour Foreshore Authority20 to the effect that there is no
common law “principle” derived from Pointe Gourde, the term “scheme” in that case being
used only to explain and amplify terminology in the particular statutory compensation system
there under consideration. That aside, the question for determination turned upon the
particular wording of section 20(3), and neither required nor permitted any broader inquiry as
to an underlying scheme.21
Heydon J, dissenting, considered that the arbitrator had correctly characterised the purpose
for which the land was taken. He did not consider the Notice of Intention to Resume to be
conclusive in that regard. His Honour accepted that, in one sense, the purpose of the
18
19
20
21
At 641 [20]. At 640 – 641 [19]
(2008) 233 CLR 259 at 273 – 275 [41] – [47]
At 639 – 640 [16] – [18]
15
resumption was to facilitate transport infrastructure in the form of a road, the predominant
purpose in the particular circumstances was simply to realign a short stretch of road.22
Significance of the Decision
As it unfolded, the decision in Springfield ultimately turned on a factual question. In
answering that question, however, the principle applied by the majority, and for which the
decision stands as authority, is that the “purpose” referred to in section 20(3) of the Act is the
purpose for which the resumed land was taken, and not the “purpose” identified by some
factual inquiry beyond the terms of the Notice of Intention to Resume.
It should be noted, in conclusion, that although Springfield did not persist with an argument
in the High Court that it had advanced below, to the effect that although it owned a very
substantial area of land adjoining and beyond the transport corridor, the expression “…the
value of the interest of the claimant in any land adjoining the land taken or severed…” in
section 20(3) confined attention to the value of only those lots that immediately adjoined the
land taken. It is to be observed, of course, that section 20(3) does not refer to “any lot
adjoining the land taken…”. Its reference to “any land adjoining the land taken…” would
appear to make such a submission difficult to sustain.
22
At 644 [32] – [33]
16
Enhancement of the value of the interest of the claimant – land “adjoining” the land
taken – Gold Coast City Council v Halcyon Waters Community Pty Ltd (2011) 32 QLCR
146 (Land Court Appeal)
The Facts
Part of the claimant’s land was resumed by the Gold Coast City Council for road, park and
recreation purposes. In proceedings for compensation in the Land Court, the Council
asserted that it was entitled to set-off against the compensation payable, enhancement to the
value of other land (known as the Flebus Land) under section 20(3) of the Act. The issue was
dealt with as a separate, preliminary determination.
The issue was whether the Flebus Land “adjoined” the land taken, so as to be capable of
engaging the operation of section 20(3). The Council’s submission was that the word
“adjoining” in section 20(3) should be given a wider meaning, extending to land which “is or
lies close to or neighbours on” the land taken.23 The Flebus Land was separated from the
resumed land by a road reserve which bisected the entire parcel.
At first instance, the President of the Land Court concluded, and held, that on the proper
construction of section 20(3) land “adjoined” land taken only if it immediately adjoins or is
physically contiguous with the land taken. In consequence, the balance land did not “adjoin”
the resumed land within the meaning of section 20(3) because the two portions were
separated by the road reserve.24
The Decision
The Land Appeal Court dismissed the Council’s appeal. In so holding, the Land Appeal
Court stated:
“The natural meaning of the expression ‘adjoining’ in respect of land is that it describes land
which touches other land, in the sense that it either has a common boundary, or at least a
common boundary point. Usually, the adoption of the natural meaning of a term used, without
definition, in the statute is to be preferred.”25
23
24
25
At 148 [15]
Halcyon Waters Community Pty Ltd v Chief Executive, Gold Coast City Council (2010) 31 QLCR 166 at
172 [34]
At 150 [26]
17
Admissibility of evidence of events post-dating acquisition date – Brisbane City Council
v Mio Art Pty Ltd [2012] 2 Qd. R. 1 (Court of Appeal)
The Facts
The Brisbane City Council resumed part of a parcel of land at Montague Street, West End for
the Hale Street bridge. The highest and best use of the land before resumption was
commercial office development. It was common ground that the hypothetical development
method should be adopted in valuing the land, and that the relevant hypothetical development
required a code assessable development application.
The parties disagreed as to the type of building that might have been built and, in particular,
the height of the building and the number of storeys, which in turn affected the gross floor
area and plot ratio. Some months after the date of resumption a draft plan known as Kurilpa
2 was published, which referred to raising the height limit to 12 storeys. The Land Court
refused to consider Kurilpa 2 in determining the value of the resumed land at the relevant
date. It did find that a prudent purchaser was likely to have been informed, as at the date of
resumption, that the original plan was under review, but because there was no evidence as to
the content of the review at that time and, in particular, as to whether there was any proposal
to raise the height limit, a prudent purchaser could not have taken Kurilpa 2 into account.
The Land Appeal Court allowed an appeal from the decision and increased compensation on
the basis that the draft plan ought to have been taken into account as confirming a foresight
held by a prudent purchaser at the time of resumption.
The Council applied for leave to appeal to the Court of Appeal.
The Decision
The Court of Appeal granted leave to appeal; allowed the appeal; set aside the decision of the
Land Appeal Court and remitted the matter to the Land Appeal Court for decision in
accordance with its reasons.
The Court of Appeal (Fryberg J, with whom McMurdo P and Fraser JA agreed) emphasised
the necessity to focus on the text of section 20(1) and (2) of the Act “…and not to replace it
with judicial dicta from cases dealing with differently worded provisions.”26 His Honour
observed that two points followed from the text of section 20, namely:
1.
First, that the value of the land taken is quite separate from the damage caused by
severance or injurious affection and disturbance costs, which are not elements of
land value under the Act; and
26
At 10 [29]
18
2.
Secondly that, unlike compensation for the value of land taken, compensation for
severance, injurious affection and disturbance is not explicitly required to be
assessed by reference to the date of acquisition, even though they are indirectly
connected to that date by the requirement of causation.27
After referring to the description of “market value” in Spencer v The Commonwealth (1907) 5
CLR 418 and to the observations of Griffiths CJ (at page 432) and Isaacs J (at pages 440 –
441) his Honour observed that the requirement that market value be determined by reference
to persons “perfectly acquainted with the land, and cognisant of all circumstances which
might affect its value, either advantageously or prejudicially” shows that, in assessing market
value, it is relevant to take into account the likelihood of future events to the extent that such
likelihood would have been known to the parties to the hypothetical transaction. Future
events such as unexpected prosperity or unanticipated depression were to be ignored.28
His Honour embarked upon a comprehensive discussion of cases referred to by the Land
Appeal Court as supporting its conclusion that evidence of post-resumption events is
admissible in the determination of the market value of the resumed land. Those cases were
Thorpe v Brisbane City Council [1966] Qd. R. 3729; CMB No. 1 Pty Ltd v Cairns City
Council [1999] 1 Qd. R. 130 as well as the earlier judgment of the High Court in Minister for
the Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 45931 and Housing Commission of
NSW v Falconer [1981] 1 NSWLR 5432. His Honour concluded that Parbury Henty,
Falconer and Thorpe, were disturbance cases (and, hence, different in principle from the
exercise required to determine market value under section 20) and CMB involved the
determination of “injurious affection” under the Local Government (Planning and
Environment) Act 1990 and was, therefore, also distinguishable.33
In consequence:
“None of the cases discussed demonstrates that events subsequent to the date of acquisition can
be taken into account in assessing market value.”34
His Honour rejected the admissibility of Kurilpa 2 as confirming a foresight, as at the date of
resumption, of the likely approval of a twelve storey development on the resumed land. His
conclusion as to the correct principle to be applied appears from the following:
“The Spencer test postulates hypothetical parties in full possession of knowledge generally
available on the date of acquisition. That knowledge includes knowledge of future possibilities,
but only as possibilities, and with the weight which prudent persons would ascribe to them.35 It
27
28
29
30
31
32
33
34
35
At 10 [30] At 12 [33]
Referred to in his Honour’s judgment at 12 – 14 [36] – [43]
At 18 – 23 [54] – [68]
At 14 – 18 [44] – [53]
At 23 – 26 [69] – [74]
At 26 [75]
At 26 [77]
Citing Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 per McHugh J at 436 [49]–[50]
19
is difficult to imagine how the fact that a possibility subsequently became a reality could be
directly relevant to that knowledge.”36 (emphasis added)
His Honour continued:
“I see no inconsistency between this approach and that which enables subsequent sales to be
taken into account in assessing market price. Those sales are not taken into account as matters
which would be present in the minds of the hypothetical parties. They are simply evidence of
an event from which an inference can be drawn about the position at an earlier (but not very
much earlier) time. The implicit assumption is that nothing material has changed in the
meantime or that if it has, allowance can be made for the change. Consequently they are
probative of the earlier position.”37 (emphasis added)
In the result, the Court of Appeal concluded that, as at the date of resumption, a prudent
purchaser would have been aware that Kurilpa 1 was under review, but not aware of the
content of the review. In consequence, the subsequent publication of Kurilpa 2 could not
affect that finding and the Land Court did not err in excluding Kurilpa 2 from consideration
in assessing the market value of the land acquired by the Council.38
36
37
38
At 26 [78]
At 26 [79]
At 27 [80] – [81]
20
Highest and best use – market value – post resumption sales – Brisbane City Council v
Bertoli (2012) 33 QLCR 418 (Land Appeal Court)
The Facts
The subject land, owned by the respondent to the appeal, was resumed for the North-South
Bypass Tunnel Project in December 2006. In assessing compensation the Member took into
account that the land had the potential for a mixed use commercial development and had
regard to sales evidence, some of which post dated the date of resumption. The Member also
rejected a submission that the price for which the land had been advertised for sale prior to
the resumption was indicative of its value as at the relevant date.
The appellant, Brisbane City Council, submitted that the Member erred in considering post
resumption sales; erred in determining the highest and the best use of the land at the relevant
date, and erred by failing to take into account the listing of the land by the respondent prior to
resumption. (Although the land had been advertised for sale for $670,000.00 some six
months prior to resumption, the Land Court adopted a value of $1,000,050.00, and awarded
compensation accordingly.)
The Decision
The Land Appeal Court rejected the submission that evidence of post resumption sales was
inadmissible, citing Melwood Units Pty Ltd v Commissioner of Main Roads39 and Leichhardt
Municipal Council v Seatainer Terminals Pty Ltd40 as authoritatively demonstrating that it is
not an error of law to determine the value of land at a particular date by reference to
subsequent sales. Importantly, however, regard must be taken of changes affecting the
market between the resumption date and the date of sale.41
The Land Appeal Court also rejected the complaint about the Member’s failure to give
determinative weight to the price for which the property was listed prior to resumption,
concluding that what weight, if any, should be given to such evidence was primarily a matter
for the court at first instance, referring to Jacob’s Law of Compulsory Land Acquisition at
[19.285]. No error was demonstrated in the Member’s preference for evidence of sales as the
best evidence of market value.42
With respect to the highest and best use of the land, the Court referred to Spencer, and quoted
from a Canadian text, Todd The Law of Expropriation and Compensation in Canada (Second
Ed, 1992) at page 135, cited in Jacob’s Law of Compulsory Land Acquisition (2010) at page
535 as follows:
39
40
41
42
[1979] AC 426 at 436
(1981) 48 LGRA 409 at 434
At 421 [20] – [21]
At 426 [56] – [59]
21
“The legal concept of ‘highest and best use’ is an economic one, ie ‘the use that would bring
about the highest economic value on the open market.’ It is that use of land which may
reasonably be expected to produce the greatest net return to the land over a given period of
time.”43
By way of further amplification, the Court repeated the following passage from the judgment
of Wells J in De Ieso v The Commissioner of Highways (SA)44:
“…[the Court] is not…called on to inquire ultimately whether, as a fact, the planning
authorities would have approved a relevant plan of subdivision. Rather it is called on to decide
how a hypothetical prospect of developer [who may be assimilated in the present context, with
the willing, but not anxious, hypothetical purchaser posed by the judgments in Spencer’s case]
would have viewed his potential financial return if he were considering a proposal that included
one or other of the proposed plans.”45
The Land Appeal Court concluded that no error was disclosed in the reasoning or approach of
the Land Court at first instance. In particular, where the value of land is to be determined by
reference to some use other than its present use, it will not always be necessary, as a matter of
law, to make a specific finding as to the highest and best use of the land and, in particular, as
to the intensity and timing of any proposed redevelopment of it.46 Also, the fact that the
evidence did not identify a particular form of redevelopment which was shown to be
economically feasible did not mean that the Land Court erred in valuing the land by reference
to its potential for redevelopment. The real question was whether the potential would have
affected the price to which the hypothetical vendor and purchaser referred to in Spencer’s
case, would have arrived at.47
43
44
45
46
47
At 423 [38]
(1981) 27 SASR 248 at 253
At 423 – 424 [39]
At 424 [44]
At 424 – 425 [45]
22
Scheme of resumption - Department of Transport and Main Roads v Mahoney [2014]
QLAC 1 (Land Appeal Court)
The Facts
Part of the respondents’ land, situated at the intersection of Ipswich-Boonah Road and the
Cunningham Highway at Yamanto was resumed in October 2006 for future transport
purposes including the facilitation of transport infrastructure for the South-West Transport
Corridor.
The parties agreed that the value of the land taken was either $275,000.00 if valued as if it
were zoned Rural, or $1,707,500.00 if valued as if it were zoned for Future Urban purposes.
The Land Court determined compensation in the amount of $1,707,500.00.
The central issue was whether the San Sebastian “principle” applied48. The land had been
zoned Future Urban when the respondents purchased it in 1982. In 1999 it was rezoned
Rural under a new planning scheme. At first instance, the Land Court accepted that the
change to the zoning in 1999 was a step in the process to resume in 2006 for the purposes of
the SWTC. Applying San Sebastian, the Court ignored the change in the zoning for the
purpose of assessing compensation.
The San Sebastian “principle” is that taken from the observations of Jacobs J (with whom
Gibbs CJ, Stephen, Murphy and Aickin JJ agreed) as follows:
“Restrictions on land use, so that, explicitly or practically, use is restricted to a use for a public
purpose for which land might be resumed, are commonly imposed as a result of consultation
with or direction by the public authority concerned with the carrying out of the particular public
purpose. In such a case where there is a direct relationship between the restriction on land use
the proposed establishment of the public works the effect on value of the zoning or restriction
ought to be ignored.”49
In The Crown v Murphy50 the High Court said that the principle extends to cases where there
is merely an indirect relationship, provided that the planning restriction can properly be
regarded as a step in the process of resumption.
The Decision
In Mahoney, an issue arose as to the significance of observations of the High Court in Walker
Corporation Pty Ltd v Sydney Harbour Foreshore Authority51 and Springfield Land
Corporation52.
48
49
50
51
52
Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196 at 206
(1978) 140 CLR 196 at 206
(1990) 64 ALJR 593 at 595
(2007) 233 CLR 259
(2011) 242 CLR 632
23
In Walker Corporation, the Authority resumed land over which the Council had maintained a
long standing industrial zoning, for the purpose of preventing residential development. The
High Court referred to San Sebastian, Murphy and Pointe Gourde53. The Court rejected the
characterisation of the decision in Pointe Gourde as stating a common law “principle”: rather,
it turned on the particular wording of the legislation there under consideration.54 That view
was subsequently restated in Springfield Land Corporation55. In Walker Corporation, the
High Court accepted the Authority’s submission that the maintenance of the industrial zoning
by the Council was not to be ignored, by an application of San Sebastian. That was because
the compensation to which the claimant was entitled was to be assessed in accordance with
the applicable New South Wales legislation which, upon its proper construction, required that
only an increase or decrease in the value for which the resuming authority was itself
responsible, was to be ignored.
In Mahoney, the Land Appeal Court adopted its earlier decision in Redland Shire Council v
Edgarange Pty Ltd56, which had concluded that Walker Corporation was to be treated with
caution in Queensland because it turned on the specific wording of particular legislation.57
The Land Appeal Court noted that the Member at first instance in Mahoney had found that
the Chief Executive was not involved in the Council’s decision to “down zone” the
respondent’s land, and observed that it did not consider there to be any authority in relation to
the application of San Sebastian in Queensland that mandated that the resuming authority
must be involved in the decision that affects, whether positively or negatively, the value of
the resumed land.58 Nor was there any reason in principle to so limit the application of San
Sebastian.59 In consequence, regardless of whether the resuming authority was involved in
the decision to rezone the land, the question remains the same: was the decision to rezone
nevertheless a step in the scheme of resumption, or was it made with the intent or in
anticipation that the land would be resumed?60
Upon a reconsideration of the evidence, the Land Court concluded that the Member at first
instance had erred in finding that the down zoning was effected pursuant to a scheme which
culminated in the resumption of the land for the South-West Transport Corridor.61 In
consequence, the Chief Executive’s appeal was allowed and the value of the land assessed in
the sum of $275,000.00.
53
54
55
56
57
58
59
60
61
At 272 – 275 [37] – [46]
Walker Corporation at 273 – 274 [41] – [42]
(2011) 242 CLR 632 at 640 [17]
(2008) 29 QLCR 91
See Mahoney at [42] and [43]
At [44]
At [45]
At [46]
At [58] – [67]
24
NOTE: The “principle” and identification of the relevant “scheme” of resumption, has also
been considered and discussed by the Land Appeal Court in Ipswich City Council v Wilson
(2011) 32 QLCR 357 and Land Court in Hope v Brisbane City Council (2012) 33 QLCR 322.
25
Business losses/loss of profits/relocation expenses – Ostroco Pty Ltd v Chief Executive,
Department of Transport and Main Roads [2013] QLAC 4 (Land Appeal Court)
The Facts
In July 2009 the Chief Executive resumed land at 264 Old Cleveland Road, on which the
Coorparoo Shopping Mall was constructed, for the purpose of the Eastern Busway Project.
The appellant, Ostroco, was the lessee of Shop 17, from which it conducted an LJ Hooker
Real Estate Agency under a franchise.
Ostroco’s lease was for a term of three years commencing 1 January 2003 with two options to
renew, each for a term of three years. In 2005 it exercised the first option.
In April 2005 the intended construction of the Eastern Busway was announced. In December
2006 the then Minister announced that it would be located on the northern side of Old
Cleveland Road (the side on which the Coorparoo Shopping Mall was located).
The sole director of Ostroco was a Mr Weiss. He and his wife were trustees of a family
superannuation fund. Desirous of securing appropriate premises for the future conduct of the
real estate agency, the Super Fund purchased premises at 326 Old Cleveland Road in
February 2007. The premises were tenanted on a monthly tenancy, which the tenant
terminated in July 2007. Mr and Mrs Weiss (as trustees of the Super Fund) entered into a
commercial tenancy agreement with Ostroco of the premises at 326 Old Cleveland Road,
with the intention of creating a lease for a term of three years commencing 1 July at a rent of
$6,250.00 per month. The premises were let as “as is” – ie no improvements carried out by
the lessor.
In March 2008 Ostroco exercised its option to further renew the lease in the shopping mall,
which it continued to occupy to, at least, the commencement of the hearing in the Land
Court, notwithstanding the resumption in July 2009.
Ostroco claimed costs of relocation to 326 Old Cleveland Road in an amount approximately
$660,000.00; loss of profits both before and after the date of resumption; and loss of rental
income between July 2007 and June 2012 (being the loss incurred in consequence of its
inability to sublease the premises it let from the Super Fund at 326 Old Cleveland Road).
Ostroco’s claims were considered by reference to section 20(5)(c), (d), (f) and (g) of the Act.
The Decision
As with Jensin Family (below) the decision is illustrative of the operation of section 20(5) in
relation to the relocation of a business in consequence of a resumption.
The Land Appeal Court allowed Ostroco’s appeal with respect to the relocation costs
claimed. It rejected criticism that Ostroco had acted unreasonably in failing to negotiate
26
terms with the lessor of the premises at 326 Old Cleveland Road (the Super Fund) that
obliged the lessor to undertake improvement works to the premises, there being no evidence
that Ostroco could have obtained a lease of suitable premises, at the same rent, on those
terms62, and there being no evidence that the arrangement with the Super Fund was for a
collateral purpose (as, for example, maximising the compensation claimable).63
The Land Appeal Court dismissed Ostroco’s appeal from the Member’s decision declining to
include a sum for economic loss allegedly incurred in consequence of the adverse business
impact of the announcements of the Busway Project from 2005 onwards. Ostroco claimed
that the announcements created “a confusing and uncertain business environment” which,
among other things, caused Harvey Norman (an anchor tenant of Coorparoo Mall) to vacate
in February 2007.64
Although the Land Appeal Court accepted that sections 20(5)(f) and (g) did not preclude the
awarding of compensation for a loss suffered prior to resumption65, the Court concluded that,
on the facts of the case, Ostroco’s claim for loss of income was grounded on the
announcements of the Busway Project, not the taking of the land, and therefore did not come
within the language of section 20(5)(f).66
The Land Appeal Court also rejected Ostroco’s appeal from the Member’s refusal to include
the amount of the claim for lost rental in the compensation awarded. After carefully
considering the facts upon which that claim was made67, the Land Appeal Court emphasised
that such a claim “…directs attention to the nature and degree of any causal relationship
between the taking of the land and the claimed loss”.68
After referring to Director of Building & Lands v Shun Fung Ironworks Ltd69 and Harvey v
Crawley Development Corporation70 the Land Appeal Court expressed the relevant test as
follows:
“The language used by s 20(5)(g) requires the making of a judgment whether the connection
was sufficient to enable the cost or loss to be described as a direct and natural consequence of
the taking of the land. If, on the other hand, reference is made to the tests formulated in
authorities such as Shun Fung Ironworks, a question arises whether the causal connection
between the taking of the land on the one hand, and the cost or loss on the other, is too remote.
In each case, a judgment must be made, where no point of demarcation is clearly identified for
determining whether a cost or loss is the subject of compensation.”71
62
63
64
65
66
67
68
69
70
71
At [44] – [46]
At [47]
At [64] At [68] At [72] and [76]
For example, at [90]
At [93]
[1995] 2 AC 111
[1957] 1 QB 485 at 494 at page 126
At [95]
27
In the result, the Land Appeal Court concluded that the claimed loss was not an immediate
consequence of the taking of the resumed land; a number of intervening events occurred
before Ostroco suffered the loss for which it claimed compensation; and whether one asked if
the loss was too remote or if the loss was a direct and natural consequence of the taking of the
land, the exercise of the judgment required by section 20(5)(g) led to the conclusion that the
loss was not compensable.72
72
At [96]
28
Business losses/loss of profits/relocation expenses – Jensin Family Pty Ltd t/a Bank of
Queensland Coorparoo v Chief Executive, Department of Transport and Main Roads
(2012) 33 QLCR 386 (Land Court)
The Facts
This case arose out of the resumption of the same shopping centre as was the subject of the
Ostroco case. The Bank of Queensland was the lessee of the premises pursuant to a lease
which, including options, would have expired in October 2013. The claimant occupied the
premises as a licensee pursuant to a franchise agreement with the Bank of Queensland.
The claim included amounts for loss of value of the business, loss of profits and relocation
expenses, in consequence of the relocation of the business to what was said to be inferior
premises (because of inadequate customer parking).
The Decision
The decision is another illustration of the operation of section 20(1)(b) and (5) to a claim for
business losses.
29
The operation of section 18(5) – Chief Executive, Department of Transport and Main
Roads v The Young Men’s Christian Association of Brisbane [2014] 1 Qd. R. 129 (Court
of Appeal)
The Facts
The YMCA held an estate in fee simple in certain land pursuant to a deed of grant in trust
(“DOGIT”) issued under the Land Act 1994. The trust was for “recreation (Youth
Community Centre) purpose and for no other purpose whatsoever”. The Chief Executive
resumed the land, whereupon it became unallocated State land. The YMCA claimed
compensation assessed by reference to the costs it incurred to relocate or reinstate its
operation to another site.
The Land Court and Land Appeal Court having held that the YMCA could claim costs of
reinstatement, the Chief Executive sought leave to appeal to the Court of Appeal, asserting
that as the whole of the land the subject of the DOGIT had been resumed, the trust had come
to an end or otherwise continued on for a limited purpose that did not include relocation of
the YMCA’s operations.
The Decision
Section 18(5) of the Act provides to the effect that a claim for compensation by a trustee in
respect of the taking of any land shall be limited to the amount of actual damage caused to the
trust by reason of the taking, and no such trustee shall have any other right, remedy or claim
whatsoever in respect of such taking.
The Court of Appeal (Gotterson JA, with whom Fraser JA and Daubney J agreed) granted
leave to appeal, but dismissed the Chief Executive’s appeal.
Gotterson JA accepted that there were “strong reasons” for concluding not only that upon the
taking of the land, the trust established by the DOGIT terminated, but also that the right to
compensation was not held by the YMCA subject to that trust. The land had become
unallocated State land and, by section 12(5) was absolutely freed and discharged from all
trusts.73 Further, his Honour accepted that the trust was specific to the resumed land and for
the purposes stipulated in the DOGIT.74 Those considerations notwithstanding, the
entitlement to claim compensation is a species of property, which the YMCA held free of any
trust referrable to the DOGIT. In consequence, the YMCA held its entitlement to claim
compensation free of any trust referrable to its DOGIT, and was at liberty to apply the
compensation amount, when received, to the pursuit of the objects for which it was
established as it sees fit.75
73
74
75
At 137 [30]
At 137 [31]
At 137 [33]
30
His Honour held that it did not follow, however, that, under section 18(5) no cost incurred by
a trustee claimant to relocate and reinstate its operation to another site was payable by way of
compensation upon a resumption of trust land under the Act. What amount of actual
damages has been caused in a particular case is pre-eminently a question of fact to be
ascertained by reference to the particular circumstances of, and consequences for that trust, of
the taking.76
Further, it was incorrect to treat the taking of DOGIT land under the Act as equivalent to a
cancellation or surrender of a DOGIT under the Land Act 1994.77
Finally, his Honour noted that it was equally clear that the YMCA was not entitled to recover
compensation in an amount equal to the cost of acquiring a fee simple estate in alternative
land. That is because it was not the fee simple estate that was taken; the YMCA held a fee
simple estate, but only in trust under the Land Act 1994, and subject to the limitations and
restrictions thereby imposed. Clearly, an attempt to be placed in the position where it would
be the owner of a fee simple estate in equivalent land free of any statutory trust and similar
incidents would go well beyond reinstatement.78
Further Reading
Jacob’s, Law of Compulsory Land Acquisition
Hyam, The Law Affecting Valuation of Land in Australia
Brown, Land Acquisition
Graham Gibson QC
7 April 2014
76
77
78
At 138 – 139 [36] – [40]
At 139 [43] – [44]
At 140 [50] – [51]
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT MICHAEL SLATER
FAPI
The compulsory taking of land which is required for a public purposes by
appropriately authorised bodies as constructing authorities do so under the
provisions of the Acquisition of Land Act 1967.
The assessment of compensation due as a consequence of the taking of an interest in land
is to be carried out in accordance with sec. 20 of the Act.
Part 4 Compensation
20
Assessment of compensation
(1)
In assessing the compensation to be paid, regard shall in every
case be had not only to the value of land taken but also—
(a)
to the damage, if any, caused by any of the following—
(i)
the severing of the land taken from other land of
the claimant;
(ii)
the exercise of any statutory powers by the
constructing authority otherwise injuriously
affecting the claimant’s other land mentioned in
subparagraph (i); and
(b)
to the claimant’s costs attributable to disturbance.
(3)
In assessing the compensation to be paid, there shall be taken
into consideration, by way of set-off or abatement, any
enhancement of the value of the interest of the claimant in any
land adjoining the land taken or severed therefrom by the
carrying out of the works or purpose for which the land is
taken.
(4)
But in no case shall subsection (3) operate so as to require any
payment to be made by the claimant in consideration of such
enhancement of value.
Apart from nominating the heads under which compensation is to be assessed, the Act
gives next to no guidance as to the process of assessing compensation
The principles, and to a lesser extent the methodology, to be applied in an assessment are
largely established and continually refined under common law.
We’ll look at the several heads under which compensation is assessed and at several
decisions which guide particular aspects of an assessment.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 2 VALUE OF LAND
Leaving aside severance issues, the value of the resumed land is generally more or less
straightforward.
The value of the land however is held to mean the value of the land to the dispossessed
owner. There may be no difference between the value of the land to the owner or the value
in the market generally.
This is usually the case. There are few circumstances where land has particular attributes
that have a value to the owner beyond wider market value. There are obvious exceptions.
For instance a dwelling which has been constructed to accommodate wheelchair access.
Or a church. Where there is a premium value it is often termed Special Value.
While the assessment of the value of the land cannot be on the basis of the value to the
resuming authority, that does not rule out the taking into consideration of a special
adaptability the land might have for the purpose for which the land was resumed. (Pointe
Gourde Quarrying and Transport Co Ltd v. Sub-Intendent of Crown Lands (Trinidad) [1947]
AC 565)
SEVERANCE
This is a form of injurious affection damage which has earned it’s own place in sec. 20.
Specifically, the section requires the assessment to have regard to any damage caused by
the severing of the resumed land from other land of the claimant.
There can be a misconception that a severance arises when a parcel is divided into two or
more parts by the resumption of part of the land. That is of course a severance but not the
only form of severance.
A very good explanation is to be found in the LAC judgement in the Suntown case.
(Suntown Pty Ltd v. The Gold Coast City Council (1979) 6 QLCR 196)
This judgement followed an appeal and cross appeal against the Land Court's
determination of the compensation payable following the resumption of an area of 45
hectares at Arundel. The purpose of the resumption was for "Rubbish Depot Purposes".
The claimant retained ownership of a large parcel of land across the road from the resumed
land (approximately 185 hectares of rural zoned land), and claimed, in addition to the
value of the resumed land, an amount for injurious affection.
The Court commented, and I quote:
“Severance and injurious affection are concepts which are very closely linked
sometimes to the point of confusion.
Both are forms of damage flowing from a resumption and both are in respect of land
retained by the claimant.
In a sense severance damage is a specialised form of injurious affection to the
retained land. Severance damage arises from the separation or division of the
claimant's land as a result of the resumption.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 3 The severance may be by way of a division of the retained land into two parts, for
example, by way of a resumption for an intersecting road. It may also occur where a
part only of the claimant's land is taken leaving a compact parcel.
Severance damage is depreciation in the value of the retained land resulting from its
division into two or more parts, or its reduction in area and consequent loss of value
for some current or higher (potential) use.
Injurious affection, in the terminology of the Act, is the type of damage to the
retained land which flows from the exercise of any statutory powers by the
constructing authority otherwise (i.e. than by severance) injuriously affecting the
retained land.
This type of damage is related to uses of, or activities on, the resumed land by the
constructing authority as a result of the resumption and the consequent depreciation
in the value of the retained land.”
The Suntown judgement predated the HC of A decision in Marshall so the expression by
the Court just quoted:
uses of, or activities on, the resumed land by the constructing authority no longer applies
in Queensland.
I will come back to the Marshall case.
The Court went on to say:
“The Council valuer reasons that a prudent subdivider/purchaser might well feel, by
the time the balance area was ripe for subdivision, that the conversion of parts of the
dump to park and/or playing fields would confer a benefit on the retained area as
would the improved access roads. Given the nebulous nature of the whole matter, the
valuer considers that a prudent purchaser would not be influenced to pay more or
less for the balance area although his personal feelings are that enhancement would
outweigh injurious affection.”
I’ll come back to that in a discussion about enhancement.
The substantive ruling to come out of Suntown was the fact that the resumed land was
separated by a road from the other land of the claimant was no bar to an award for
compensation for injurious affection flowing from activities by the constructing authority
on the resumed land.
The most commonly encountered form of severance damage is when part of the land is
taken leaving the balance land intact rather than leaving the balance land divided.
A classic severance loss can arises in a case of resumption from land where town planning
encourages site amalgamation by granting of disproportionately higher densities as site
area increases. A part take may reduce the maximum Plot Ratio or FSR or refuce the
allowable building height, or both.
An example is the Lutwyche Road Corridor Plan.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 4 The value the resumed land adds to the site is going to be greater than the average value
rate applicable to the unaffected site because the balance land is going to have a lower
value rate than the unaffected site.
The difference between the rate applicable to the balance retained land and the rate
applicable to the unaffected site indicates the loss arising from the severance.
As with severance, it is generally the case that compensation is best assessed by before and
after valuations. Quite obviously severance and injurious affection arise only where part
only of a parcel or holding is resumed.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 5 INJURIOUS AFFECTION
The concept is simple. The assessment of loss as a consequence not always so.
If as a consequence of the activities of the constructing authority or the purpose of the resumption cause a loss in value of the retained land the an compensation is payable for the injurious affection to the balance land.
Marshall v Department of Transport is a quite significant injurious affection case.
The circumstances were that the Marshall property was essentially floodplain of Eudlo
Creek just upstream from the Bruce Highway bridge of the creek to the south of the
Nambour turnoff. The land was taken from the Marshall property for the purpose of
upgrading the Bruce Highway in this area. The works entailed in part the raising of the
level of the road. The raised level had an effect of acting as a dam and increasing the
flooding of Mr Marshall’s property. There was a finding of the Land Court that the
roadworks raising the level were within the original road reserve. Consequently by the
application of the Edwards principle (the offending works were not constructed on the
resumed land) no compensation was assessable for injuries affection.
Ultimately this position was overturned in a High Court judgement with the finding that
compensation was payable in circumstances where there was injurious affection arising
from the scheme works at large.
Marshall v Director General Department of Transport [2001] HCA 37; 205 CLR 603; 75
ALJR 1218 (21 June 2001)
ENHANCEMENT
Sec 20 (3) says:
In assessing the compensation to be paid, there shall be taken
into consideration, by way of set-off or abatement, any
enhancement of the value of the interest of the claimant
1 in any land adjoining the land taken or severed therefrom
2 by the carrying out of the works or purpose for which the land is
taken.
The assessment and offsetting of enhancement is never straightforward and that is no doubt
part of the reason for infrequent applications of sec. 20(3).
•
•
Enhancement is seldom easy to prove;
Understandably, a court would need to be left in no doubt that there is enhancement
if it were to make a finding that it ought to be considered.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 6 Not surprisingly, it’s difficult to convince a dispossessed owner that his land can be taken
and he’s not going to get any compensation. Particularly if his neighbor gets a similar
uplift in value and has no land taken.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 7 The latter was summed up nicely by Land Court member Mr Neate in the unreported
decision in the Skrobar resumption case. Maria Skrobar and the estate of Stefan Skrobar
(deceased) and Antun Frlan and Anna Frlan v Chief Executive, Department of Transport
(A94-67)
I quote:
The unfairness (if any) to a landowner from the application of the legal
principle is a matter which cannot influence the result. In that respect, the
recent decision in Boterhoek v Council of the Shire of Redland is a case in
point. The President of the Land Court dealt with a claim for compensation
for 75 m2 of land taken under the Acquisition of Land Act 1967 for road
purposes. The works were part of a scheme for upgrading roads in the area
including the provision of a roundabout on land adjacent to the claimants'
corner block. In the conclusion of his judgment the learned President noted
that the claimant's valuer had conceded that the whole scheme had
enhanced the area to some degree but had failed to appreciate why the
enhancement should be used as a set off against any claim possessed by the
claimants when other land owners with no land resumed for the purposes
reap the benefit of the scheme at no cost. The President concluded that,
although "the argument identifies a degree of inequality in these
circumstances, which is not new, the law requires the Court to proceed on
the principles stated."
Skrobar was one of the few cases where there was a relatively minor award and
enhancement was an issue.
The matter followed the resumption of land for the construction of the Yawalpa Rd
interchange at Pimpama. There was a disagreement as to the potential of the land in any
event but the case for the constructing authority was that, if the land had potential for a
higher order use, then that was because of the construction of the interchange or at least
was more valuable for that purpose.
The claimants’ case with respect to the enhancement issue, put simply, was that it had been
commonly known for many years that an interchange would be built in that vicinity and
consequently any value arising from the scheme had already accrued prior to the
resumption and should not be offset.
The member discussed a number of cases around the point however the most relevant
authority was the House of Lords decision in Wilson v Liverpool City Council. Wilson v
Liverpool City Council [1971] 1 All ER 628
Wilson was essentially a Point Gourde case but the issue was “the scheme” or , in terms of
the Act, the works or purpose for which the land is taken.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 8 "A scheme is a progressive thing. It starts vague and known to few. It
becomes more precise and better known as time goes on. Eventually it
becomes precise and definite, and known to all. Correspondingly, its
impact has a progressive effect on values. At first it has little effect
because it is so vague and uncertain. As it becomes more precise and
better known, so its impact increases until it has an important effect. It is
this increase, whether big or small, which is to be disregarded as at the
time when the value is to be assessed."
So that’s one issue, what is the works or purpose, or the scheme.
The other defining criteria is:
“in any land adjoining the land taken or severed therefrom”
The retained land for which there is a claimed enhancement in value is sought to be used as
an offset must adjoin the resumed land which is used for the enhancing works.
Adjoin means sharing a common boundary. It does not mean touching at a point. As far as
I know that issue has not been decided in the context of enhancement. It was it was an
issue in a Trade Practices matter. In McCormick, a 1987 case, land at Carmody Rd was
advertised by the selling agent as adjoining Ironside Park whereas the land over the back
fence was in fact privately owned. The park adjoined the rear neighbour’s land and had a
common point with McCormick’ a s land. The Court found the representationthat the
subject land adjoined parkland, among others) was caught by the Trade Practices Act.
This may seem self-evident however a Crown valuer in fact sought to offset enhancement
in those very circumstances in a school site resumption case in the 1990s.
A further point is that adjoining "land" does not mean "lot" or "parcel". It means land in
general.
Going back to the Suntown LAC decision:
The valuer for the Council held the view that enhancement would off-set losses by
injurious affection. He told the court that ultimately it would be expected that the land
would be developed as parkland and this would be beneficial to a likely future residential
estate on the retained land.
The court did not accept the proposition. The argument ought failed on two fundamental
points:
•
•
the land on which the park might have been developed in the future did not adjoin
the balance retained, and
park was neither the works nor the purpose of resumption.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 9 It should also have failed because of lack of certainty and for very good reasons. They
retained land has been developed for residential purposes however the resumed land
continues to function as the site of a waste transfer station.
This brings us to the recent SPRINGFIELD case.
Without delving too deeply into the facts, a corridor through the Springfield
development was set aside and handed to Council in trust for construction of the
SWTC - Centenary Highway extension ultimately to the Cunningham Highway.
Subsequently TMR took over the project and the ownership of the corridor
land was passed to the Department.
As the alignment was refined, further land was required and subsequently transferred by
agreement rather than by formal resumption and an agreement reached that
compensation be settled by arbitration with Acquisition of Land Act principles
applying.
For purpose of this discussion, transfer land is a substitution for resumed land.
The case for the Department was that the SWTC scheme enhanced the balance adjoining
land. This was an extensive holding to the south of the now Centenary Highway & west
of the S'field - Greenbank Arterial.
This included the retail and commercial land around the Orion shopping centre and
several hundred hectares of residential land.
The transfer land was only 6 hectares or so and consequently there needed to be only a
relatively minor increase in the value of the balance adjoining land to overtake the value
of the transfer land. The case for the department was NIL compensation. That is, the
enhancement in the value of all of the adjoining Springfield land to the south was
sufficient to fully offset the added value of the transfer land.
Springfield’s case was in 2 parts
Firstly, if there was enhancement by the scheme or purpose then this happened
much earlier than the relevant transfer.
The purpose of the transfer was simply a realignment of the corridor and could not be
seen as part of the scheme giving rise to the enhancement in the value of the balance
adjoining land. Effectively, it was a different scheme.
Secondly,"adjoining land" meant only those lots or parcels directly adjoining the
transfer land, not also the land further adjoining those to the south.
Those adjoining lots or parcels were relatively small in area and a substantial part was
quite steep so there was less value in those lots and consequently less enhancement.
The arbitrator found for Springfield on all substantive points.
The arbitrator’s award was found by the Supreme Court to be wrong in law and was
set aside and the award varied by substituting NIL as the assessed compensation.
The Supreme Court decision was upheld on appeals through to the High Court.
QELA SEMINAR RESUMPTION OF LAND – THE LAND COURT 10 The appeal courts upheld the philosophy in Wilson discussed by Mr Neate in Skrobar- a
scheme is a progressive and evolving thing.
The question of what is the works or purpose or (the scheme) will obviously turn on the
individual facts.
An important finding, and a perfectly logical finding I believe, is that adjoining land
means just that. Not just adjoining lots or parcels.
Matters for Practitioners
1. Directions Hearings & Reviews
2. Appearances
3. Adjournments
4. Hearings
5. Orders
Directions Hearings
1.
Familiarity with - file generally
- issues
- discreet areas of disagreement
- experts
- steps taken
- future
- draft orders
2.
Timing
Appearances
1. Rule 24 – personally
– by a lawyer
– by an agent
2. By telephone
Adjournments
(a) Not granted as a matter of course
(b) Late requests
(c) Costs implications
(d) Trial unable to be completed
(e) Failure to comply with orders.
Hearings
(a) Generally in a centre near to the subject
land
(b) Estimates of time
(c) Awareness of experts’ availability
(d) General tendency to hear expert
evidence in cohorts
(e) Telephone evidence
Orders
1. Desirability of drafts
2. Sensible estimates of time
3. Compliance
Land Court Rules 2000
7 Starting proceeding
(1) A proceeding is started by filing an
originating process in the registry.
(2) An originating process may be filed by
facsimile.
originating application means an
application in the approved form that starts
a proceeding in the court, other than an
appeal.
originating process means any of the
following that, under an Act conferring
jurisdiction on the court, may start a
proceeding in the court—
(a) an originating application;
(b) a notice of appeal;
(c) another document.
8 Content of originating process
An originating process for a proceeding must—
(a) comply with any requirements of the Act giving
jurisdiction for the proceeding to the court; and
(b) identify the respondent; and
(c) briefly state the facts, circumstances or other
relevant matters on which the proceeding is
based; and
(d) identify the land, building, watercourse, tenure
or licence to which the proceeding relates; and
8 Content of originating process
contd
(e) state—
(i) the orders or other relief sought in the
proceeding;
and
(ii) the grounds on which the orders or other
relief are sought.
9 Contact details and address for
service
(1) An applicant or appellant (the person) acting
personally must ensure all of the following
details are stated on the originating process
before it is filed—
(a) the person’s residential or business address;
(b) the person’s telephone number, if any, or a way
of contacting the person by telephone;
(c) the person’s facsimile number, if any;
(d) the person’s email address, if any.
9 Contact details and address for
service … Contd
(2) A lawyer or agent acting for the person must ensure all
of the
following details are stated on the originating process
before it is filed—
(a) the person’s residential or business address;
(b) the name of the lawyer or agent;
(c) if the lawyer practises in a firm or the agent conducts or
is employed in a business, the name of the firm or
business;
(d) the address of the lawyer’s or agent’s place of business;
(e) the lawyer’s or agent’s telephone number;
(f) the lawyer’s or agent’s facsimile number;
(g) the lawyer’s or agent’s email address.
9 Contact details and address for
service …Contd
(3) The address for service of the person is—
(a) for a person acting personally—the address
given under subrule (1)(a); or
(b) for a person for whom a lawyer or agent acts—
the address given under subrule (2)(d).
(4) Notice of any change in a party’s address for
service must be filed and served on all other
parties.
9 Contact details and address for
service … Contd
10 Signing originating process
The applicant or appellant, or the lawyer or agent acting for the
applicant or appellant, must sign the originating process.
11 Giving originating process to other parties
Unless the court otherwise orders, the applicant or appellant must
serve a copy of the originating process on each other party.
12 Documents served on the State
A document required to be served on the State must be served on the
chief executive of the department administered by the Minister
administering the provision giving jurisdiction to the court to hear the
proceeding to which the document relates.
13 Disclosure
Chapter 7 of the uniform rules applies, with necessary changes, to
disclosure in relation to a proceeding in the court.
24 Party must ensure expert ready to
take part in meeting of experts
Before a meeting of experts, a party to a proceeding must do all things
reasonably necessary or expedient to ensure an expert chosen by
the party is ready to take part fully, properly and promptly in the
meeting, including by giving the expert—
(a) reasonable prior notice that the court has ordered or directed a
meeting of experts; and
(b) notice of the contents of any order or direction about the meeting,
including the time by which the meeting must be held; and
(c) reasonable notice of the issue in dispute in the proceeding to the
extent it is relevant to the expert’s expertise; and
(d) enough information and opportunity for the expert to adequately
investigate the facts in relation to the issue in dispute in the
proceeding; and
(e) written notice that the expert has a duty to assist the court and the
duty overrides any obligation the expert may have to the party or
any person who is liable for the expert’s fee or expenses.
24A Experts attending meeting
must prepare joint report
(1) The experts attending a meeting of experts
must, without further reference to or instruction
from the parties, prepare a joint report in relation
to the meeting.
(2) However, the experts attending the meeting
may, at any time before the joint report is
completed, ask all parties to respond to an
inquiry the experts make jointly of all parties.
(3) Despite subrule (1), any of the experts may
participate in a mediation involving the parties.
(4)The joint report must—
(a) confirm that each expert understands the
expert’s duty to the court and has
complied with the duty; and
(b) be given to the parties
(5)
The applicant or appellant must deliver
to the registry,personally or by facsimile
or email, a copy of the joint report
received under subrule (4) at least 21
days before the date set for the
hearing.
24E Expert must prepare
statement of evidence
(1) An expert must prepare a written statement of the expert’s evidence
(a statement of evidence) for the hearing of a proceeding.
(2) If the expert has taken part in a meeting of experts—
(a) a joint report prepared in relation to the meeting is taken to be the
expert’s statement of evidence in the proceeding; and
(b) a further statement of evidence in relation to any issue of
disagreement recorded in the joint report is to be prepared by the
expert.
(3) However, the further statement of evidence must not, without
the court’s leave—
(a) contradict, depart from or qualify an opinion in relation to an issue
the subject of agreement in the joint report;
or
(b) raise a new matter not already mentioned in the joint report.
24F Requirements for statement of
evidence other than joint report
(1) An expert’s statement of evidence, other than a joint
report, must be addressed to the court and signed by the
expert.
(2) The statement of evidence must include the following
information, to the extent the information is not already
contained in a joint report prepared for the proceeding—
(a) the expert’s qualifications;
(b) all material facts, whether written or oral, on which the
statement is based;
(c) references to any literature or other material relied on by
the expert to prepare the statement;
24F Requirements for statement of
evidence other than joint report Contd
(d) for any inspection, examination or experiment
conducted, initiated or relied on by the expert to prepare
the statement—
(i) a description of what was done; and
(ii) whether the inspection, examination or experiment was done by the
expert or under the expert’s supervision; and
(iii) the name and qualifications of any other person involved; and
(iv) the result;
(e) if there is a range of opinion on matters dealt with in the statement,
a summary of the range of opinion and the reasons why the expert
adopted a particular opinion;
(f) a summary of the conclusions reached by the expert;
(g) a statement about whether access to any readily ascertainable
additional facts would assist the expert in reaching a more reliable
conclusion.
24F Requirements for statement of
evidence other than joint report Contd
(3) The expert must confirm, at the end of the statement of evidence—
(a) the factual matters included in the statement are, as far as the
expert knows, true; and
(b) the expert has made all enquiries considered appropriate; and
(c) the opinions included in the statement are genuinely held by the
expert; and
(d) the statement contains reference to all matters the expert considers
significant; and
(e) the expert understands the expert’s duty to the court and has
complied with the duty; and
(f) the expert has read and understood the rules contained in this part,
as far as they apply to the expert; and
24F Requirements for statement of
evidence other than joint report Contd
(g) the expert has not received or accepted
instructions to adopt or reject a particular
opinion in relation to an issue in dispute in
the proceeding.
24I Evidence from only 1 expert
may be called
Other than with the court’s leave, a party
to a proceeding, at any hearing of the
proceeding, may call evidence from only 1
expert for each area of expertise dealt with
in the hearing.
24J Statement of evidence of
witness other than expert
(1)
This rule applies to a party who intends to do either or both of the
following—
(a)
give evidence in a proceeding;
(b) call another person, other than an expert, to give evidence in a proceeding.
(2) Before giving the evidence or calling the other person, the party must
deliver to the registry, personally or by facsimile or email, and serve on
each other party, a written statement containing—
(a) the name, address and occupation of the party or other person; and
(b) the evidence of the party or other person for the hearing.
24J Statement of evidence of
witness other than expert Contd
• (3) The party must comply with subrule (2) at least 21
days
• before the date set for the hearing or, if the court directs
a
• different time, within the time directed by the court.
• (4) During examination in chief, the party or other person
must
• not, without the court’s leave, repeat or expand on
matters
• contained in the party’s or person’s statement delivered
under
• subrule (2) or introduce new material.
26 Judicial registrar’s power to
hear and decide matters
A judicial registrar may constitute the court to hear and decide the following
matters—
(a) the jurisdiction of the court to hear and decide a matter;
(b) an application for disclosure;
(c) an application for an order to answer interrogatories;
(d) a matter in relation to which the parties ask that an order be made by
consent;
(e) any other matter directed by the president in writing that the president
considers appropriate having regard to—
(i) the nature and complexity of the matter; or
(ii) any special circumstance in relation to the matter.
Example of a special circumstance—
A matter has a connection with land in a location and could be dealt with
promptly by a judicial registrar because the judicial registrar is on circuit in
the location.
34 Request for trial date
(4) For this rule, a party is ready for trial if,
as far as the party is concerned—
(a) all reasonable steps have been taken to
separate and resolve the issues and settle
the proceeding; and
(b) the proceeding is, in all respects, ready
for trial.
35 Request for decision without
oral hearing
(1) A party may, with the written consent of each
other party to a proceeding, ask the court to
decide the proceeding or an application in the
proceeding without an oral hearing.
(2) A request under subrule (1) must be
accompanied by an outline of argument and
details of the evidence proposed to be
submitted.
36A Court may dispense with
oral hearing
The court may, in the court’s discretion, dispense
with the oral hearing of a proceeding or an
application in a proceeding if—
(a) the court is satisfied that it is appropriate to
decide the proceeding or application without an
oral hearing; and
(b) the parties are given notice of the court’s
proposal to make the decision without an oral
hearing; and
(c) there is no objection raised by any party to the
proceeding.
50 Opening hours of registry
(1) Subject to subrule (2), the registry must
be open between 9am and 4pm on
business days, other than a court holiday.
(2) The president or registrar may direct that
the registry is to be opened or closed at
any time.
QUEENSLAND ENVIRONMENTAL LAW ASSOCIATION SEMINAR 7 APRIL 2014
ACQUISITION OF LAND ACT 1967
- SIGNIFICANT CHANGES TO LEGISLATION
- RECENT CASE-LAW
TABLE OF CASES ................................................................................................................... 3 Introduction ................................................................................................................................ 4 An overview of the scheme of the Act....................................................................................... 4 Taking of land ........................................................................................................................ 4 Taking other than by agreement ............................................................................................. 4 Taking by agreement .............................................................................................................. 5 Discontinuance of taking of land ........................................................................................... 6 Reference of claim for compensation to the Court ................................................................ 8 Costs ....................................................................................................................................... 8 Interest .................................................................................................................................... 8 Mortgages ............................................................................................................................... 9 Disposal of land...................................................................................................................... 9 Other provisions ..................................................................................................................... 9 Recent case-law ....................................................................................................................... 10 “Interest” in land – contractual licence is an interest in land – Sorrento Medical Service Pty
Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd. R. 373 (Court of Appeal) ... 10 The Facts .............................................................................................................................. 10 The Decision ........................................................................................................................ 10 Significance of the Decision ................................................................................................ 11 Enhancement of the value of the claimant’s interest – Springfield Land Corporation (No. 2)
Pty Ltd v State of Queensland & Anor (2011) 242 CLR 632 (High Court of Australia)......... 13 The Facts .............................................................................................................................. 13 The Decision ........................................................................................................................ 14 Significance of the Decision ................................................................................................ 15 Enhancement of the value of the interest of the claimant – land “adjoining” the land taken –
Gold Coast City Council v Halcyon Waters Community Pty Ltd (2011) 32 QLCR 146 (Land
Court Appeal)........................................................................................................................... 16 The Facts .............................................................................................................................. 16 The Decision ........................................................................................................................ 16 Admissibility of evidence of events post-dating acquisition date – Brisbane City Council v
Mio Art Pty Ltd [2012] 2 Qd. R. 1 (Court of Appeal) ............................................................. 17 The Facts .............................................................................................................................. 17 The Decision ........................................................................................................................ 17 Highest and best use – market value – post resumption sales – Brisbane City Council v
Bertoli (2012) 33 QLCR 418 (Land Appeal Court)................................................................. 20 The Facts .............................................................................................................................. 20 The Decision ........................................................................................................................ 20 Scheme of resumption - Department of Transport and Main Roads v Mahoney [2014] QLAC
1 (Land Appeal Court) ............................................................................................................. 22 The Facts .............................................................................................................................. 22 The Decision ........................................................................................................................ 22 2
Business losses/loss of profits/relocation expenses – Ostroco Pty Ltd v Chief Executive,
Department of Transport and Main Roads [2013] QLAC 4 (Land Appeal Court) ................. 25 The Facts .............................................................................................................................. 25 The Decision ........................................................................................................................ 25 Business losses/loss of profits/relocation expenses – Jensin Family Pty Ltd t/a Bank of
Queensland Coorparoo v Chief Executive, Department of Transport and Main Roads (2012)
33 QLCR 386 (Land Court) ..................................................................................................... 28 The Facts .............................................................................................................................. 28 The Decision ........................................................................................................................ 28 The operation of section 18(5) – Chief Executive, Department of Transport and Main Roads v
The Young Men’s Christian Association of Brisbane [2014] 1 Qd. R. 129 (Court of Appeal)
.................................................................................................................................................. 29 The Facts .............................................................................................................................. 29 The Decision ........................................................................................................................ 29 Further Reading ....................................................................................................................... 30 3
TABLE OF CASES
Brisbane City Council v Bertoli (2012) 33 QLCR 418.
Brisbane City Council v Mio Art Pty Ltd [2012] 2 Qd. R. 1.
Chief Executive, Department of Transport and Main Roads v The Young Men’s Christian
Association of Brisbane [2014] 1 Qd. R. 129.
Gold Coast City Council v Halcyon Waters Community Pty Ltd (2011) 32 QLCR 146.
Housing Commission (NSW) v San Sebastian Pty Ltd1- Department of Transport and Main
Roads v Mahoney [2014] QLAC 1.
Jensin Family Pty Ltd t/a Bank of Queensland Coorparoo v Chief Executive, Department of
Transport and Main Roads (2012) 33 QLCR 386.
Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads [2013] QLAC
4.
Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd.
R. 373.
Springfield Land Corporation (No. 2) Pty Ltd v State of Queensland & Anor (2011) 242 CLR
632.
1
(1978) 140 CLR 196 at 206
4
Introduction
1.
Upon its commencement in March 1968 the Acquisition of Land Act 1967 (“the Act”)
repealed or amended the provisions of 36 statutes2 providing for the compulsory
acquisition of land, and thereby consolidated those provisions into the one “umbrella”
statutory scheme.
2.
The Act provides for:
- The purposes for which land may be taken under the Act3
- The procedure for the taking of land (whether compulsorily, or by agreement)
- The discontinuance of the taking of land
- The entitlement to compensation in consequence of the taking of land, the
assessment of compensation and the determination of claims for
compensation by the Land Court (“the Court”).
An overview of the scheme of the Act4
Taking of land
3.
The Act provides for the compulsory taking of land (sections 7-14) and the taking of
land by agreement (section 15).
4.
Schedule 1 of the Act comprises a comprehensive list, divided into 14 Parts, of the
purposes for which land may be taken under the Act. Where the constructing authority
is the Crown, land may be taken under the Act for any purpose set out in the Schedule:
section 5(1)(a). Where the constructing authority is a local government, or a
constructing authority other than the Crown or a local government, land may be taken
for any purpose in Schedule 1 which that entity may lawfully carry out, or for any other
purpose which that entity is authorised or required to carry out by a provision of an Act
other than the Act: section 5(1)(b) and section 5(1)(c).
Taking other than by agreement
5.
A constructing authority which proposes to take any land is obliged to serve a Notice of
Intention to Resume (“NIR”) on any person who, to the knowledge of the constructing
authority, will be entitled to claim compensation under the Act in respect of the taking,
2
3
4
Listed in the First Schedule of the Act in its original form.
Note that the term “land” is defined broadly, to mean land “or any estate or interest in the land, that is
held in fee simple, including fee simple in trust under the Land Act 1994, but does not include a
freeholding lease under that Act”: definition, Schedule 2.
As an overview, the following discussion does not purport to address the provisions of the Act with
precision.
5
or is a mortgagee of the land: section 7(1) and (2). The Act provides for specific
requirements of an NIR: section 7(3). A person to whom an NIR is directed may object
in writing to the taking of the land: section 7(3)(d) and (e). The constructing authority
is obliged to consider the grounds of objection, and it may amend or discontinue the
resumption following that consideration: section 8.
6.
If the constructing authority maintains the intention to continue the resumption, it may
apply to the relevant Minister that the land be taken: section 9(1). Depending on the
circumstances, either the Governor in Council or the Minister may, by gazette notice,
declare that the land is taken for the stated purpose: section 9(6) and (7) and the taking
is effective on the day of publication of the notice: section 9(8).
7.
Privately owned freehold land vests in the Crown, or in the constructing authority
requiring the land, on and from the date of publication of the notice in the gazette:
section 12(1)(a). By section 12(5), on and from the date of publication of the gazette
resumption notice the land vests (or becomes unallocated State land, as the case may
be)
…absolutely free and discharged from all trusts, obligations, mortgages, charges, rates,
contracts, claims, estates, or interest of what kind so ever, or if an easement only is taken,
such easement shall be vested in the constructing authority or…in the corporation
requiring the easement
and
…the estate and interest of every person entitled to the whole or any part of the land shall
thereby be converted into a right to claim compensation under this Act and every person
whose estate and interest in the land is injuriously affected by the easement shall have a
right to claim compensation under this Act.
8.
The amount of compensation may be agreed between the constructing authority and the
claimant, subject to the consent of any mortgagee: section 12(5A). Failing agreement,
a claim for compensation may be enforced against the constructing authority as
provided by the Act: section 12(5B).
Taking by agreement
9.
Section 15 of the Act provides, in straightforward terms, for a resumption agreement
between the constructing authority, and a mortgagee and any person otherwise entitled
to claim compensation under the Act in respect of the taking of the land: section 15(1) –
(3). A resumption agreement may, but need not, include an agreement as to the amount
of compensation payable for the taking: section 15(4). A taking under these provisions
is also effective on the day a gazette resumption notice is published: section 15E.
6
Discontinuance of taking of land
10.
The Act provides for the discontinuance of a resumption at any time before the
publication of the gazette resumption notice (including provision for payment for costs
and expenses incurred by the person who was served with the notice, and any actual
damage done to the land concerned by the constructing authority): section 16, and for
the revocation of a resumption at any time after publication of the gazette resumption
notice and before the amount of compensation payable has been determined by the
Land Court, or payment of compensation has been made, if it is found that the land or
any part thereof is not required for the purpose for which it was taken: section 17(1).
11.
A person who has a right to claim compensation under section 12(5) may claim that
compensation from the constructing authority under and in accordance with the
provisions of Part 4 of the Act: section 18(1). Section 19 prescribes the requirements
for a claim for compensation. Section 20 addresses the assessment of compensation. It
was substantially amended by the Acquisition of Land and Other Legislation
Amendment Act 2009, principally by including specific reference to a claimant’s
entitlement to “costs attributable to disturbance”: section 20(1)(b) and comprehensively
listing the matters falling within the scope of that expression: section 20(5). It’s
importance warrants that it be set out in full:
20.
Assessment of compensation
(1)
In assessing the compensation to be paid, regard shall in every case be had
not only to the value of land taken but also –
(a)
(b)
to the damage, if any, caused by any of the following –
(i)
the severing of the land taken from other land of the claimant;
(ii)
the exercise of any statutory powers by the constructing
authority otherwise injuriously affecting the claimant’s other
land mentioned in sub-paragraph (i); and
to the claimant’s costs attributable to disturbance.
Note - [Excluded]
(2)
Compensation shall be assessed according to the value of the estate or
interest of the claimant in the land taken on the date when it was taken.
(2A) However, in assessing the compensation, a contract, licence, agreement or
other arrangement (a relevant instrument) entered into in relation to the
land after the notice of intention to resume was served on the claimant must
not be taken into consideration if the relevant instrument was entered into
for the sole or dominant purpose of enabling the claimant or another person
to obtain compensation for an interest in the land created under the
instrument.
7
(3)
In assessing the compensation to be paid, there shall be taken into
consideration, by way of set-off or abatement, any enhancement of the value
of the interest of the claimant in any land adjoining the land taken or severed
therefrom by the carrying out of the works or purpose for which the land is
taken.
(4)
But in no case shall subsection (3) operate so as to require any payment to
be made by the claimant in consideration of such enhancement of value.
(5)
In this section –
costs attributable to disturbance, in relation to the taking of land, means all
or any of the following –
(a)
legal costs and valuation or other professional fees reasonably
incurred by the claimant in relation to the preparation and filing of the
claimant’s claim for compensation;
(b)
the following costs relating to the purchase of land by a claimant to
replace the land taken –
(i)
stamp duty reasonably incurred or that might reasonably be
incurred by the claimant, but not more than the amount of
stamp duty that would be incurred for the purchase of land of
equivalent value to the land taken;
(ii)
financial costs reasonably incurred or that might reasonably be
incurred by the claimant in relation to the discharge of a
mortgage and the execution of a new mortgage, but not more
than the amount that would be incurred if the new mortgage
secured the repayment of the balance owing in relation to the
discharged mortgage;
(iii)
legal costs reasonably incurred by the claimant;
(iv)
other financial costs, other than any taxation liability,
reasonably incurred by the claimant;
(c)
removal and storage costs reasonably incurred by the claimant in
relocating from the land taken;
(d)
costs reasonably incurred by the claimant to connect to any services
or utilities on relocating from the land taken;
(e)
other financial costs that are reasonably incurred or that might
reasonably be incurred by the claimant, relating to the use of the land
taken, as a direct and natural consequence of the taking of the land;
(f)
an amount reasonably attributed to the loss of profits resulting from
interruption to the claimant’s business that is a direct and natural
consequence of the taking of the land;
(g)
other economic losses and costs reasonably incurred by the claimant
that are a direct and natural consequence of the taking of the land
8
Example of costs for paragraph (g) –
cost of school uniforms for children enrolled in a new school because of relocation
from the land taken
12.
A claimant for compensation may apply to the constructing authority for payment of an
advance in respect of the compensation claimable by the claimant: section 23(1). If
satisfied that the applicant is entitled to claim compensation and that the amount of the
advance sought does not exceed an amount offered by the constructing authority to
settle the claim (or if no such offer has been made, an amount equal to the constructing
authority’s estimate of the amount of compensation payable to the claimant) it is
obliged to pay the applicant the advance applied for: section 23(2) and (3). Subject to
certain exceptions, any amount payable to a claimant by way of an advance and which
is not paid within 90 days after the application, is recoverable by the claimant as a debt
due and unpaid to it by the constructing authority: section 23(4).
Reference of claim for compensation to the Court
13.
Either the constructing authority or the claimant may refer to the Court the hearing and
determination of the amount of compensation: sections 24 and 25, and the Court has
jurisdiction to hear and to determine all matters relating to compensation under the Act:
section 26. If the constructing authority makes an advance to a claimant under section
23 and the amount of compensation subsequently determined by the Court is less than
the amount of the advance, the Court also has jurisdiction to order the claimant to pay
the difference, with interest, to the constructing authority, which order may be enforced
as if it were an order of the Supreme Court: section 26A.
Costs
14.
Subject to the provisions of section 27(2), costs of and incidental to a hearing and
determination of the Court of a claim for compensation under the Act “…shall be in the
discretion of that court”: section 27(1).
15.
If the amount of compensation as determined is the amount finally claimed by the
claimant in the proceedings or is nearer that amount than to the amount of the valuation
finally put in evidence by the constructing authority costs (if any) shall be awarded to
the claimant. Otherwise, costs (if any) shall be awarded to the constructing authority:
section 27(2). Sub-section (2) expressly does not apply to any appeal in respect of a
decision of the Court: section 27(3).
Interest
16.
The Court or, on appeal, the Land Appeal Court, may order that interest be paid on the
amount of compensation determined by it in respect of the period commencing on the
date on which land is taken and ending on the date immediately preceding the date of
9
payment of such compensation: section 28(1). Such interest shall be at the rate the
Court or the Land Appeal Court, deems reasonable: section 28(1A) and is payable as if
it were part of the compensation in question, and shall be added to the amount thereof
and to be payable accordingly: section 28(1B). Interest is not, however, payable in
respect of any amount of compensation advanced under section 23: section 28(2).
Mortgages
17.
Specific provision is made for payment to a mortgagee of so much of the amount of the
compensation as does not exceed the sum due to the mortgagee: section 32(1).
Disposal of land
18.
When land has been taken, either compulsorily or by agreement and, within seven years
after the date of taking the constructing authority no longer requires the land, it shall
offer the land for sale to the former owner at a price determined by the valuer-general
under the Land Valuation Act 2010: section 41.
Other provisions
19.
The Act includes other provisions, not limited to machinery and facilitative provisions,
which should not be ignored.
10
Recent case-law
“Interest” in land – contractual licence is an interest in land – Sorrento Medical Service
Pty Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd. R. 373 (Court of
Appeal)
The Facts
The appellant conducted a medical practice at Sorrento, on the Gold Coast. It leased part of
the ground floor of a building from the owner, an associated company. The lease conferred
exclusive rights on the appellant, as lessee, to use an identified part of the car parking area for
the parking of vehicles by the appellant or its permitted invitees.
The chief executive resumed part of the land, including part of the car park, for road
widening purposes.
The landowner’s claim for compensation was resolved by agreement. Sorrento’s claim was
dismissed by the Land Court (confirmed on appeal to the Land Appeal Court) on the ground
that “…the estate and interest of every person entitled to the whole or any part of the land…”
(section 12(5) referred to, and required, that the claimant have a proprietary interest in the
land taken, and not merely a contractual licence to use the land).
The Decision
The Court of Appeal (McMurdo P and Chesterman J, Holmes JA dissenting) held that the
appellant did have an “interest” within the meaning of that term in section 12(5) of the Act in
the resumed land and was entitled to claim compensation in consequence of the resumption.
Both McMurdo P and Chesterman J referred to the definition of “interest” in section 36 of the
Acts Interpretation Act 1954.5 Each referred to the well known statement of principle of
Gaudron J in Marshall v Director General, Department of Transport (2001) 205 CLR 603 at
623.6
McMurdo P found support in the wording of section 18(3) for the conclusion that the
appellant’s contractual right to use the car park was an “interest” (within the meaning of
section 12(5) of the Act) in the resumed land.7 Her Honour continued8:
“My preferred construction turns on the application to the Act of the definition of
“interest” in s 36 Acts Interpretation Act. I appreciate that the dangers of construing a
like definition too widely were referred to in Hornsby Council v RTA 151, Mason P. 152
5
6
7
8
[2007] 2 Qd. R. 373 at 378 [8]–[9]; 380 [16]; 384 [40]; 373 [48], [51]–[53].
At 379 [12]; 386 [46].
At 380 [15]. Section 18(3) provides to the effect that “compensation shall not be claimable by a
person…who is a lessee, tenant or licensee of any land taken…” if the construction authority allows the
person’s estate or interest to continue uninterrupted.
At 380 [16]. Note: footnotes deleted.
11
– 153; Meagher JA, 155. The appellant’s apparently valuable contractual car parking
rights in relation to the resumed land for which it seeks to claim compensation under the
Act are plainly distinguishable from the rights asserted in Hornsby, which were no more
than the right of every member of the general public over the land in question. Hornsby
does not require that s 12(5) be construed as excluding the appellant’s entitlement to
claim compensation for its interest in the land it has lost through the respondent’s
resumption of the land.”
Chesterman JA observed9:
“If it is right, as I think it is, to give interest in that section the wider meaning conferred
by the Acts Interpretation Act, then every person entitled to an interest, so defined, ie a
right over or in relation to the land, is entitled to claim compensation upon its
resumption.”
And further:10
“One should not lose sight of the obvious point that one is construing a sub-section
which confers a right to compensation upon the loss of land taken for the public benefit.
One should not search for meanings which are not readily apparent, not be assiduous to
find a statutory context which would exclude the wider definition of interest and so
restrict the right to compensation. One should approach the construction of the provision
in the manner described by Gaudron J and Heydon JA, and one should not rely upon
words of nebulous meaning to provide a statutory context inconsistent with the
application of the Acts Interpretation Act.”
And finally:11
“It may be that to apply the full width of the definition of “interest” found in the Acts
Interpretation Act might, in some cases, produce claims for compensation that might
probably attract the epithet “absurd”, but the present is not of that kind. One has here a
right of property clearly identified, the limits of which are specified and which had a
value. The proprietor is identified and the existence of the licence was proved in a
document available for public search. In my opinion it is a matter of plain justice, not
absurdity, that the proprietor should be compensated when his property is destroyed, for
the good of the wider public.”
Significance of the Decision
Sorrento was the catalyst for the insertion of section 12(5C) in February 2009. It provides
that, despite sub-section (5)12 a person does not have a right to claim compensation under the
Act in relation to an interest in land “…that is an interest under a services contract for the
land.”
9
10
11
12
At 387 [52].
At 388 [57].
At 389 [63].
Noted above at para 7.
12
The second reading speech in relation to the Acquisition of Land and Other Legislation
Amendment Bill stated (rightly or wrongly) that in consequence of the Sorrento decision
“…the scope of what constituted an ‘interest’ [is] somewhat uncertain.” And that “in order to
limit the meaning of ‘interest’, contracts for service, such as cleaning contracts will be
excluded.
In LGM Enterprises Pty Ltd v Brisbane City Council13 the Land Appeal Court applied
Sorrento14 in holding that the lessee of a shop in a small shopping centre had an “interest” in
land comprising a landscaped area with constructed pathways from the footpath to the car
parking area, and thence to the shops, which land was resumed for road widening purposes.
The Court concluded that, on the proper construction of the lease, the resumed land
comprised part of the “common areas” under the lease, in respect of which the claimant had
contractual rights as well as statutory rights under the Retail Shop Leases Act 1994.15
Recently, in Moreton Bay Regional Council v Mekpine Pty Ltd & Anor16 the Land Appeal
Court confirmed the decision at first instance that a lessee of a shop in a shopping centre, one
frontage of which was resumed for road widening purposes, had an “interest” in the resumed
land notwithstanding that there was no express provision in the lease conferring a right in the
lessee “claimant to use the common areas”. It was held to be sufficient that, notwithstanding
the absence of such an express provision, other provisions, properly construed, conferred an
entitlement on the lessee to use the common areas (of which the resumed land comprised
part) for the purpose of ingress to and egress from the premises.17 The Court added that, if
the Court in LGM Enterprises had held to the effect that section 43 of the Retail Shop Leases
Act was itself sufficient to give a lessee of a shop in a retailed shopping centre an interest in
land beyond the leased area, it should not be followed.
13
14
15
16
17
(2008) 29 QLCR 176.
Esp at 176 [23] – 182 [28].
Esp at 180 [18] – 181 [22]; 181 [29]
[2013] QLAC 5
Esp at [73] – [77]
13
Enhancement of the value of the claimant’s interest – Springfield Land Corporation (No.
2) Pty Ltd v State of Queensland & Anor (2011) 242 CLR 632 (High Court of Australia)
The Facts
The appellant (“Springfield”) owned almost 3,000 hectares of land southwest of the Brisbane
CBD which was expected to house at least 60,000 people over the course of its long-term
development. The development, which commenced in about 1992, became the subject of a
draft Springfield Development Control Plan, which identified a Regional Transport Corridor
running from the western end of the Centenary Highway (at the Ipswich Motorway) through
the Springfield land and through or close to the proposed Springfield Town Centre and thence
to the area of Ripley and, ultimately, the Cunningham Highway.
Springfield and the Ipswich City Council entered into an infrastructure agreement whereby
certain land was dedicated for road purposes and, in particular the transport corridor. A
subdivision approval granted by the Council included a term requiring the transfer to the
Council, free of compensation, of certain land to be held for future road purposes, and upon
which would be constructed part of the transport corridor. Subsequently, it became apparent
that some of the land transferred was not required (approx 7 hectares in area), but that some
land not transferred, and still owned by Springfield, was required in consequence of a
realignment of the corridor at a particular location.
The additional area was taken pursuant to a Notice of Intention to Resume that stated the
purpose of the resumption as follows:
“For future transport purposes including the facilitation of transport infrastructure
(namely road and busway, rail or light rail) for the South-West Transport Corridor”.
The parties agreed that compensation would be determined by an arbitrator, but applying the
provisions of the Acquisition of Land Act.
The parties agreed that the value of the additional land taken was in an amount approximating
$1,500,000.00 but disagreed as to whether section 20(3) of the Act applied so as to disentitle
Springfield to compensation. Section 20(3) provided:
“(3) In assessing the compensation to be paid, there shall be taken into a consideration,
by way of set-off or abatement, any enhancement of the value of the interest of the
claimant in any land adjoining the land taken or severed there from by the carrying out of
the works or purpose for which the land is taken.”
It was common ground that the value of Springfield’s land holding was enhanced by the
South-West Transport Corridor. The issue between the parties was whether the purpose for
which the additional land was taken was simply to effect a realignment of the designated
transport corridor which, of itself, caused no enhancement to the value of Springfield’s land,
or whether that purpose was for the carrying out of the works which were the extension of the
14
transport corridor west from the Springfield Town Centre, even though the resumed land
would constitute only a very small part of the land required.
The arbitrator concluded in favour of Springfield. That determination was overturned by the
Supreme Court (upon appeal under the Commercial Arbitration Act 1990). An appeal to the
Court of Appeal was dismissed, from which Springfield obtained special leave to appeal to
the High Court.
The Decision
By majority (French CJ, Gummow, Hayne and Crennan JJ, Heydon dissenting), the High
Court rejected Springfield’s submission.
The joint judgment of the majority identified the relevant “purpose” of the resumption as that
for which the resumed land would have been taken had the statutory processes set in train by
the Notice of Intention to Resume not be supplanted by the arbitration agreement.18 The
purpose for which the resumed land was taken was that identified in the Notice of Intention to
Resume the relevant purpose was “…future transport purposes including the facilitation of
transport infrastructure, being road and busway, rail or light rail for the South-West Transport
Corridor”. The majority endorsed the conclusion of McMurdo J that although, in one sense,
the land was taken to effect a minor realignment of the existing road corridor that was not the
relevant purpose for the operation of section 20(3). The “purpose” referred to in section
20(3) corresponds with the purpose for which there is a power of compulsory acquisition. As
his Honour put it:
“That indicates that the purpose was to be understood as the public benefit or/and to be
achieved, rather than some means to that end, and that the arbitrator’s identification of
the purpose was incorrect.”19
In so concluding, the majority dismissed reliance, by the State and the Chief Executive, on
the “Pointe Gourde” principle. The majority referred to the observations in Walker
Corporation Pty Ltd v Sydney Harbour Foreshore Authority20 to the effect that there is no
common law “principle” derived from Pointe Gourde, the term “scheme” in that case being
used only to explain and amplify terminology in the particular statutory compensation system
there under consideration. That aside, the question for determination turned upon the
particular wording of section 20(3), and neither required nor permitted any broader inquiry as
to an underlying scheme.21
Heydon J, dissenting, considered that the arbitrator had correctly characterised the purpose
for which the land was taken. He did not consider the Notice of Intention to Resume to be
conclusive in that regard. His Honour accepted that, in one sense, the purpose of the
18
19
20
21
At 641 [20]. At 640 – 641 [19]
(2008) 233 CLR 259 at 273 – 275 [41] – [47]
At 639 – 640 [16] – [18]
15
resumption was to facilitate transport infrastructure in the form of a road, the predominant
purpose in the particular circumstances was simply to realign a short stretch of road.22
Significance of the Decision
As it unfolded, the decision in Springfield ultimately turned on a factual question. In
answering that question, however, the principle applied by the majority, and for which the
decision stands as authority, is that the “purpose” referred to in section 20(3) of the Act is the
purpose for which the resumed land was taken, and not the “purpose” identified by some
factual inquiry beyond the terms of the Notice of Intention to Resume.
It should be noted, in conclusion, that although Springfield did not persist with an argument
in the High Court that it had advanced below, to the effect that although it owned a very
substantial area of land adjoining and beyond the transport corridor, the expression “…the
value of the interest of the claimant in any land adjoining the land taken or severed…” in
section 20(3) confined attention to the value of only those lots that immediately adjoined the
land taken. It is to be observed, of course, that section 20(3) does not refer to “any lot
adjoining the land taken…”. Its reference to “any land adjoining the land taken…” would
appear to make such a submission difficult to sustain.
22
At 644 [32] – [33]
16
Enhancement of the value of the interest of the claimant – land “adjoining” the land
taken – Gold Coast City Council v Halcyon Waters Community Pty Ltd (2011) 32 QLCR
146 (Land Court Appeal)
The Facts
Part of the claimant’s land was resumed by the Gold Coast City Council for road, park and
recreation purposes. In proceedings for compensation in the Land Court, the Council
asserted that it was entitled to set-off against the compensation payable, enhancement to the
value of other land (known as the Flebus Land) under section 20(3) of the Act. The issue was
dealt with as a separate, preliminary determination.
The issue was whether the Flebus Land “adjoined” the land taken, so as to be capable of
engaging the operation of section 20(3). The Council’s submission was that the word
“adjoining” in section 20(3) should be given a wider meaning, extending to land which “is or
lies close to or neighbours on” the land taken.23 The Flebus Land was separated from the
resumed land by a road reserve which bisected the entire parcel.
At first instance, the President of the Land Court concluded, and held, that on the proper
construction of section 20(3) land “adjoined” land taken only if it immediately adjoins or is
physically contiguous with the land taken. In consequence, the balance land did not “adjoin”
the resumed land within the meaning of section 20(3) because the two portions were
separated by the road reserve.24
The Decision
The Land Appeal Court dismissed the Council’s appeal. In so holding, the Land Appeal
Court stated:
“The natural meaning of the expression ‘adjoining’ in respect of land is that it describes land
which touches other land, in the sense that it either has a common boundary, or at least a
common boundary point. Usually, the adoption of the natural meaning of a term used, without
definition, in the statute is to be preferred.”25
23
24
25
At 148 [15]
Halcyon Waters Community Pty Ltd v Chief Executive, Gold Coast City Council (2010) 31 QLCR 166 at
172 [34]
At 150 [26]
17
Admissibility of evidence of events post-dating acquisition date – Brisbane City Council
v Mio Art Pty Ltd [2012] 2 Qd. R. 1 (Court of Appeal)
The Facts
The Brisbane City Council resumed part of a parcel of land at Montague Street, West End for
the Hale Street bridge. The highest and best use of the land before resumption was
commercial office development. It was common ground that the hypothetical development
method should be adopted in valuing the land, and that the relevant hypothetical development
required a code assessable development application.
The parties disagreed as to the type of building that might have been built and, in particular,
the height of the building and the number of storeys, which in turn affected the gross floor
area and plot ratio. Some months after the date of resumption a draft plan known as Kurilpa
2 was published, which referred to raising the height limit to 12 storeys. The Land Court
refused to consider Kurilpa 2 in determining the value of the resumed land at the relevant
date. It did find that a prudent purchaser was likely to have been informed, as at the date of
resumption, that the original plan was under review, but because there was no evidence as to
the content of the review at that time and, in particular, as to whether there was any proposal
to raise the height limit, a prudent purchaser could not have taken Kurilpa 2 into account.
The Land Appeal Court allowed an appeal from the decision and increased compensation on
the basis that the draft plan ought to have been taken into account as confirming a foresight
held by a prudent purchaser at the time of resumption.
The Council applied for leave to appeal to the Court of Appeal.
The Decision
The Court of Appeal granted leave to appeal; allowed the appeal; set aside the decision of the
Land Appeal Court and remitted the matter to the Land Appeal Court for decision in
accordance with its reasons.
The Court of Appeal (Fryberg J, with whom McMurdo P and Fraser JA agreed) emphasised
the necessity to focus on the text of section 20(1) and (2) of the Act “…and not to replace it
with judicial dicta from cases dealing with differently worded provisions.”26 His Honour
observed that two points followed from the text of section 20, namely:
1.
First, that the value of the land taken is quite separate from the damage caused by
severance or injurious affection and disturbance costs, which are not elements of
land value under the Act; and
26
At 10 [29]
18
2.
Secondly that, unlike compensation for the value of land taken, compensation for
severance, injurious affection and disturbance is not explicitly required to be
assessed by reference to the date of acquisition, even though they are indirectly
connected to that date by the requirement of causation.27
After referring to the description of “market value” in Spencer v The Commonwealth (1907) 5
CLR 418 and to the observations of Griffiths CJ (at page 432) and Isaacs J (at pages 440 –
441) his Honour observed that the requirement that market value be determined by reference
to persons “perfectly acquainted with the land, and cognisant of all circumstances which
might affect its value, either advantageously or prejudicially” shows that, in assessing market
value, it is relevant to take into account the likelihood of future events to the extent that such
likelihood would have been known to the parties to the hypothetical transaction. Future
events such as unexpected prosperity or unanticipated depression were to be ignored.28
His Honour embarked upon a comprehensive discussion of cases referred to by the Land
Appeal Court as supporting its conclusion that evidence of post-resumption events is
admissible in the determination of the market value of the resumed land. Those cases were
Thorpe v Brisbane City Council [1966] Qd. R. 3729; CMB No. 1 Pty Ltd v Cairns City
Council [1999] 1 Qd. R. 130 as well as the earlier judgment of the High Court in Minister for
the Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 45931 and Housing Commission of
NSW v Falconer [1981] 1 NSWLR 5432. His Honour concluded that Parbury Henty,
Falconer and Thorpe, were disturbance cases (and, hence, different in principle from the
exercise required to determine market value under section 20) and CMB involved the
determination of “injurious affection” under the Local Government (Planning and
Environment) Act 1990 and was, therefore, also distinguishable.33
In consequence:
“None of the cases discussed demonstrates that events subsequent to the date of acquisition can
be taken into account in assessing market value.”34
His Honour rejected the admissibility of Kurilpa 2 as confirming a foresight, as at the date of
resumption, of the likely approval of a twelve storey development on the resumed land. His
conclusion as to the correct principle to be applied appears from the following:
“The Spencer test postulates hypothetical parties in full possession of knowledge generally
available on the date of acquisition. That knowledge includes knowledge of future possibilities,
but only as possibilities, and with the weight which prudent persons would ascribe to them.35 It
27
28
29
30
31
32
33
34
35
At 10 [30] At 12 [33]
Referred to in his Honour’s judgment at 12 – 14 [36] – [43]
At 18 – 23 [54] – [68]
At 14 – 18 [44] – [53]
At 23 – 26 [69] – [74]
At 26 [75]
At 26 [77]
Citing Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 per McHugh J at 436 [49]–[50]
19
is difficult to imagine how the fact that a possibility subsequently became a reality could be
directly relevant to that knowledge.”36 (emphasis added)
His Honour continued:
“I see no inconsistency between this approach and that which enables subsequent sales to be
taken into account in assessing market price. Those sales are not taken into account as matters
which would be present in the minds of the hypothetical parties. They are simply evidence of
an event from which an inference can be drawn about the position at an earlier (but not very
much earlier) time. The implicit assumption is that nothing material has changed in the
meantime or that if it has, allowance can be made for the change. Consequently they are
probative of the earlier position.”37 (emphasis added)
In the result, the Court of Appeal concluded that, as at the date of resumption, a prudent
purchaser would have been aware that Kurilpa 1 was under review, but not aware of the
content of the review. In consequence, the subsequent publication of Kurilpa 2 could not
affect that finding and the Land Court did not err in excluding Kurilpa 2 from consideration
in assessing the market value of the land acquired by the Council.38
36
37
38
At 26 [78]
At 26 [79]
At 27 [80] – [81]
20
Highest and best use – market value – post resumption sales – Brisbane City Council v
Bertoli (2012) 33 QLCR 418 (Land Appeal Court)
The Facts
The subject land, owned by the respondent to the appeal, was resumed for the North-South
Bypass Tunnel Project in December 2006. In assessing compensation the Member took into
account that the land had the potential for a mixed use commercial development and had
regard to sales evidence, some of which post dated the date of resumption. The Member also
rejected a submission that the price for which the land had been advertised for sale prior to
the resumption was indicative of its value as at the relevant date.
The appellant, Brisbane City Council, submitted that the Member erred in considering post
resumption sales; erred in determining the highest and the best use of the land at the relevant
date, and erred by failing to take into account the listing of the land by the respondent prior to
resumption. (Although the land had been advertised for sale for $670,000.00 some six
months prior to resumption, the Land Court adopted a value of $1,000,050.00, and awarded
compensation accordingly.)
The Decision
The Land Appeal Court rejected the submission that evidence of post resumption sales was
inadmissible, citing Melwood Units Pty Ltd v Commissioner of Main Roads39 and Leichhardt
Municipal Council v Seatainer Terminals Pty Ltd40 as authoritatively demonstrating that it is
not an error of law to determine the value of land at a particular date by reference to
subsequent sales. Importantly, however, regard must be taken of changes affecting the
market between the resumption date and the date of sale.41
The Land Appeal Court also rejected the complaint about the Member’s failure to give
determinative weight to the price for which the property was listed prior to resumption,
concluding that what weight, if any, should be given to such evidence was primarily a matter
for the court at first instance, referring to Jacob’s Law of Compulsory Land Acquisition at
[19.285]. No error was demonstrated in the Member’s preference for evidence of sales as the
best evidence of market value.42
With respect to the highest and best use of the land, the Court referred to Spencer, and quoted
from a Canadian text, Todd The Law of Expropriation and Compensation in Canada (Second
Ed, 1992) at page 135, cited in Jacob’s Law of Compulsory Land Acquisition (2010) at page
535 as follows:
39
40
41
42
[1979] AC 426 at 436
(1981) 48 LGRA 409 at 434
At 421 [20] – [21]
At 426 [56] – [59]
21
“The legal concept of ‘highest and best use’ is an economic one, ie ‘the use that would bring
about the highest economic value on the open market.’ It is that use of land which may
reasonably be expected to produce the greatest net return to the land over a given period of
time.”43
By way of further amplification, the Court repeated the following passage from the judgment
of Wells J in De Ieso v The Commissioner of Highways (SA)44:
“…[the Court] is not…called on to inquire ultimately whether, as a fact, the planning
authorities would have approved a relevant plan of subdivision. Rather it is called on to decide
how a hypothetical prospect of developer [who may be assimilated in the present context, with
the willing, but not anxious, hypothetical purchaser posed by the judgments in Spencer’s case]
would have viewed his potential financial return if he were considering a proposal that included
one or other of the proposed plans.”45
The Land Appeal Court concluded that no error was disclosed in the reasoning or approach of
the Land Court at first instance. In particular, where the value of land is to be determined by
reference to some use other than its present use, it will not always be necessary, as a matter of
law, to make a specific finding as to the highest and best use of the land and, in particular, as
to the intensity and timing of any proposed redevelopment of it.46 Also, the fact that the
evidence did not identify a particular form of redevelopment which was shown to be
economically feasible did not mean that the Land Court erred in valuing the land by reference
to its potential for redevelopment. The real question was whether the potential would have
affected the price to which the hypothetical vendor and purchaser referred to in Spencer’s
case, would have arrived at.47
43
44
45
46
47
At 423 [38]
(1981) 27 SASR 248 at 253
At 423 – 424 [39]
At 424 [44]
At 424 – 425 [45]
22
Scheme of resumption - Department of Transport and Main Roads v Mahoney [2014]
QLAC 1 (Land Appeal Court)
The Facts
Part of the respondents’ land, situated at the intersection of Ipswich-Boonah Road and the
Cunningham Highway at Yamanto was resumed in October 2006 for future transport
purposes including the facilitation of transport infrastructure for the South-West Transport
Corridor.
The parties agreed that the value of the land taken was either $275,000.00 if valued as if it
were zoned Rural, or $1,707,500.00 if valued as if it were zoned for Future Urban purposes.
The Land Court determined compensation in the amount of $1,707,500.00.
The central issue was whether the San Sebastian “principle” applied48. The land had been
zoned Future Urban when the respondents purchased it in 1982. In 1999 it was rezoned
Rural under a new planning scheme. At first instance, the Land Court accepted that the
change to the zoning in 1999 was a step in the process to resume in 2006 for the purposes of
the SWTC. Applying San Sebastian, the Court ignored the change in the zoning for the
purpose of assessing compensation.
The San Sebastian “principle” is that taken from the observations of Jacobs J (with whom
Gibbs CJ, Stephen, Murphy and Aickin JJ agreed) as follows:
“Restrictions on land use, so that, explicitly or practically, use is restricted to a use for a public
purpose for which land might be resumed, are commonly imposed as a result of consultation
with or direction by the public authority concerned with the carrying out of the particular public
purpose. In such a case where there is a direct relationship between the restriction on land use
the proposed establishment of the public works the effect on value of the zoning or restriction
ought to be ignored.”49
In The Crown v Murphy50 the High Court said that the principle extends to cases where there
is merely an indirect relationship, provided that the planning restriction can properly be
regarded as a step in the process of resumption.
The Decision
In Mahoney, an issue arose as to the significance of observations of the High Court in Walker
Corporation Pty Ltd v Sydney Harbour Foreshore Authority51 and Springfield Land
Corporation52.
48
49
50
51
52
Housing Commission (NSW) v San Sebastian Pty Ltd (1978) 140 CLR 196 at 206
(1978) 140 CLR 196 at 206
(1990) 64 ALJR 593 at 595
(2007) 233 CLR 259
(2011) 242 CLR 632
23
In Walker Corporation, the Authority resumed land over which the Council had maintained a
long standing industrial zoning, for the purpose of preventing residential development. The
High Court referred to San Sebastian, Murphy and Pointe Gourde53. The Court rejected the
characterisation of the decision in Pointe Gourde as stating a common law “principle”: rather,
it turned on the particular wording of the legislation there under consideration.54 That view
was subsequently restated in Springfield Land Corporation55. In Walker Corporation, the
High Court accepted the Authority’s submission that the maintenance of the industrial zoning
by the Council was not to be ignored, by an application of San Sebastian. That was because
the compensation to which the claimant was entitled was to be assessed in accordance with
the applicable New South Wales legislation which, upon its proper construction, required that
only an increase or decrease in the value for which the resuming authority was itself
responsible, was to be ignored.
In Mahoney, the Land Appeal Court adopted its earlier decision in Redland Shire Council v
Edgarange Pty Ltd56, which had concluded that Walker Corporation was to be treated with
caution in Queensland because it turned on the specific wording of particular legislation.57
The Land Appeal Court noted that the Member at first instance in Mahoney had found that
the Chief Executive was not involved in the Council’s decision to “down zone” the
respondent’s land, and observed that it did not consider there to be any authority in relation to
the application of San Sebastian in Queensland that mandated that the resuming authority
must be involved in the decision that affects, whether positively or negatively, the value of
the resumed land.58 Nor was there any reason in principle to so limit the application of San
Sebastian.59 In consequence, regardless of whether the resuming authority was involved in
the decision to rezone the land, the question remains the same: was the decision to rezone
nevertheless a step in the scheme of resumption, or was it made with the intent or in
anticipation that the land would be resumed?60
Upon a reconsideration of the evidence, the Land Court concluded that the Member at first
instance had erred in finding that the down zoning was effected pursuant to a scheme which
culminated in the resumption of the land for the South-West Transport Corridor.61 In
consequence, the Chief Executive’s appeal was allowed and the value of the land assessed in
the sum of $275,000.00.
53
54
55
56
57
58
59
60
61
At 272 – 275 [37] – [46]
Walker Corporation at 273 – 274 [41] – [42]
(2011) 242 CLR 632 at 640 [17]
(2008) 29 QLCR 91
See Mahoney at [42] and [43]
At [44]
At [45]
At [46]
At [58] – [67]
24
NOTE: The “principle” and identification of the relevant “scheme” of resumption, has also
been considered and discussed by the Land Appeal Court in Ipswich City Council v Wilson
(2011) 32 QLCR 357 and Land Court in Hope v Brisbane City Council (2012) 33 QLCR 322.
25
Business losses/loss of profits/relocation expenses – Ostroco Pty Ltd v Chief Executive,
Department of Transport and Main Roads [2013] QLAC 4 (Land Appeal Court)
The Facts
In July 2009 the Chief Executive resumed land at 264 Old Cleveland Road, on which the
Coorparoo Shopping Mall was constructed, for the purpose of the Eastern Busway Project.
The appellant, Ostroco, was the lessee of Shop 17, from which it conducted an LJ Hooker
Real Estate Agency under a franchise.
Ostroco’s lease was for a term of three years commencing 1 January 2003 with two options to
renew, each for a term of three years. In 2005 it exercised the first option.
In April 2005 the intended construction of the Eastern Busway was announced. In December
2006 the then Minister announced that it would be located on the northern side of Old
Cleveland Road (the side on which the Coorparoo Shopping Mall was located).
The sole director of Ostroco was a Mr Weiss. He and his wife were trustees of a family
superannuation fund. Desirous of securing appropriate premises for the future conduct of the
real estate agency, the Super Fund purchased premises at 326 Old Cleveland Road in
February 2007. The premises were tenanted on a monthly tenancy, which the tenant
terminated in July 2007. Mr and Mrs Weiss (as trustees of the Super Fund) entered into a
commercial tenancy agreement with Ostroco of the premises at 326 Old Cleveland Road,
with the intention of creating a lease for a term of three years commencing 1 July at a rent of
$6,250.00 per month. The premises were let as “as is” – ie no improvements carried out by
the lessor.
In March 2008 Ostroco exercised its option to further renew the lease in the shopping mall,
which it continued to occupy to, at least, the commencement of the hearing in the Land
Court, notwithstanding the resumption in July 2009.
Ostroco claimed costs of relocation to 326 Old Cleveland Road in an amount approximately
$660,000.00; loss of profits both before and after the date of resumption; and loss of rental
income between July 2007 and June 2012 (being the loss incurred in consequence of its
inability to sublease the premises it let from the Super Fund at 326 Old Cleveland Road).
Ostroco’s claims were considered by reference to section 20(5)(c), (d), (f) and (g) of the Act.
The Decision
As with Jensin Family (below) the decision is illustrative of the operation of section 20(5) in
relation to the relocation of a business in consequence of a resumption.
The Land Appeal Court allowed Ostroco’s appeal with respect to the relocation costs
claimed. It rejected criticism that Ostroco had acted unreasonably in failing to negotiate
26
terms with the lessor of the premises at 326 Old Cleveland Road (the Super Fund) that
obliged the lessor to undertake improvement works to the premises, there being no evidence
that Ostroco could have obtained a lease of suitable premises, at the same rent, on those
terms62, and there being no evidence that the arrangement with the Super Fund was for a
collateral purpose (as, for example, maximising the compensation claimable).63
The Land Appeal Court dismissed Ostroco’s appeal from the Member’s decision declining to
include a sum for economic loss allegedly incurred in consequence of the adverse business
impact of the announcements of the Busway Project from 2005 onwards. Ostroco claimed
that the announcements created “a confusing and uncertain business environment” which,
among other things, caused Harvey Norman (an anchor tenant of Coorparoo Mall) to vacate
in February 2007.64
Although the Land Appeal Court accepted that sections 20(5)(f) and (g) did not preclude the
awarding of compensation for a loss suffered prior to resumption65, the Court concluded that,
on the facts of the case, Ostroco’s claim for loss of income was grounded on the
announcements of the Busway Project, not the taking of the land, and therefore did not come
within the language of section 20(5)(f).66
The Land Appeal Court also rejected Ostroco’s appeal from the Member’s refusal to include
the amount of the claim for lost rental in the compensation awarded. After carefully
considering the facts upon which that claim was made67, the Land Appeal Court emphasised
that such a claim “…directs attention to the nature and degree of any causal relationship
between the taking of the land and the claimed loss”.68
After referring to Director of Building & Lands v Shun Fung Ironworks Ltd69 and Harvey v
Crawley Development Corporation70 the Land Appeal Court expressed the relevant test as
follows:
“The language used by s 20(5)(g) requires the making of a judgment whether the connection
was sufficient to enable the cost or loss to be described as a direct and natural consequence of
the taking of the land. If, on the other hand, reference is made to the tests formulated in
authorities such as Shun Fung Ironworks, a question arises whether the causal connection
between the taking of the land on the one hand, and the cost or loss on the other, is too remote.
In each case, a judgment must be made, where no point of demarcation is clearly identified for
determining whether a cost or loss is the subject of compensation.”71
62
63
64
65
66
67
68
69
70
71
At [44] – [46]
At [47]
At [64] At [68] At [72] and [76]
For example, at [90]
At [93]
[1995] 2 AC 111
[1957] 1 QB 485 at 494 at page 126
At [95]
27
In the result, the Land Appeal Court concluded that the claimed loss was not an immediate
consequence of the taking of the resumed land; a number of intervening events occurred
before Ostroco suffered the loss for which it claimed compensation; and whether one asked if
the loss was too remote or if the loss was a direct and natural consequence of the taking of the
land, the exercise of the judgment required by section 20(5)(g) led to the conclusion that the
loss was not compensable.72
72
At [96]
28
Business losses/loss of profits/relocation expenses – Jensin Family Pty Ltd t/a Bank of
Queensland Coorparoo v Chief Executive, Department of Transport and Main Roads
(2012) 33 QLCR 386 (Land Court)
The Facts
This case arose out of the resumption of the same shopping centre as was the subject of the
Ostroco case. The Bank of Queensland was the lessee of the premises pursuant to a lease
which, including options, would have expired in October 2013. The claimant occupied the
premises as a licensee pursuant to a franchise agreement with the Bank of Queensland.
The claim included amounts for loss of value of the business, loss of profits and relocation
expenses, in consequence of the relocation of the business to what was said to be inferior
premises (because of inadequate customer parking).
The Decision
The decision is another illustration of the operation of section 20(1)(b) and (5) to a claim for
business losses.
29
The operation of section 18(5) – Chief Executive, Department of Transport and Main
Roads v The Young Men’s Christian Association of Brisbane [2014] 1 Qd. R. 129 (Court
of Appeal)
The Facts
The YMCA held an estate in fee simple in certain land pursuant to a deed of grant in trust
(“DOGIT”) issued under the Land Act 1994. The trust was for “recreation (Youth
Community Centre) purpose and for no other purpose whatsoever”. The Chief Executive
resumed the land, whereupon it became unallocated State land. The YMCA claimed
compensation assessed by reference to the costs it incurred to relocate or reinstate its
operation to another site.
The Land Court and Land Appeal Court having held that the YMCA could claim costs of
reinstatement, the Chief Executive sought leave to appeal to the Court of Appeal, asserting
that as the whole of the land the subject of the DOGIT had been resumed, the trust had come
to an end or otherwise continued on for a limited purpose that did not include relocation of
the YMCA’s operations.
The Decision
Section 18(5) of the Act provides to the effect that a claim for compensation by a trustee in
respect of the taking of any land shall be limited to the amount of actual damage caused to the
trust by reason of the taking, and no such trustee shall have any other right, remedy or claim
whatsoever in respect of such taking.
The Court of Appeal (Gotterson JA, with whom Fraser JA and Daubney J agreed) granted
leave to appeal, but dismissed the Chief Executive’s appeal.
Gotterson JA accepted that there were “strong reasons” for concluding not only that upon the
taking of the land, the trust established by the DOGIT terminated, but also that the right to
compensation was not held by the YMCA subject to that trust. The land had become
unallocated State land and, by section 12(5) was absolutely freed and discharged from all
trusts.73 Further, his Honour accepted that the trust was specific to the resumed land and for
the purposes stipulated in the DOGIT.74 Those considerations notwithstanding, the
entitlement to claim compensation is a species of property, which the YMCA held free of any
trust referrable to the DOGIT. In consequence, the YMCA held its entitlement to claim
compensation free of any trust referrable to its DOGIT, and was at liberty to apply the
compensation amount, when received, to the pursuit of the objects for which it was
established as it sees fit.75
73
74
75
At 137 [30]
At 137 [31]
At 137 [33]
30
His Honour held that it did not follow, however, that, under section 18(5) no cost incurred by
a trustee claimant to relocate and reinstate its operation to another site was payable by way of
compensation upon a resumption of trust land under the Act. What amount of actual
damages has been caused in a particular case is pre-eminently a question of fact to be
ascertained by reference to the particular circumstances of, and consequences for that trust, of
the taking.76
Further, it was incorrect to treat the taking of DOGIT land under the Act as equivalent to a
cancellation or surrender of a DOGIT under the Land Act 1994.77
Finally, his Honour noted that it was equally clear that the YMCA was not entitled to recover
compensation in an amount equal to the cost of acquiring a fee simple estate in alternative
land. That is because it was not the fee simple estate that was taken; the YMCA held a fee
simple estate, but only in trust under the Land Act 1994, and subject to the limitations and
restrictions thereby imposed. Clearly, an attempt to be placed in the position where it would
be the owner of a fee simple estate in equivalent land free of any statutory trust and similar
incidents would go well beyond reinstatement.78
Further Reading
Jacob’s, Law of Compulsory Land Acquisition
Hyam, The Law Affecting Valuation of Land in Australia
Brown, Land Acquisition
Graham Gibson QC
7 April 2014
76
77
78
At 138 – 139 [36] – [40]
At 139 [43] – [44]
At 140 [50] – [51]