Beams v Minister for Lands & Works

[1990] TASSC 78

Serial No B1/1990
List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Beams v Minister for Lands & Works [1990] TASSC 78; B1/1990

PARTIES:  BEAMS, James Edward
  v
  MINISTER FOR LANDS & WORKS

FILE NO/S:  552/1976
DELIVERED ON:  9 January 1990
JUDGMENT OF:  Nettlefold J

Judgment Number:  B1/1990
Number of paragraphs:  14

Serial No B1/1990
List "B"
File No 552/1976

JAMES EDWARD BEAMS v THE MINISTER FOR LANDS & WORKS

REASONS FOR JUDGMENT  NETTLEFOLD J

9 January 1990

1. Interlocutory Application dated 15 August 1989 filed by the plaintiff, Mr Beams, and seeking the following orders:

"1THAT THE DEFENDANT DO PAY TO THE PLAINTIFF THE SUM OF $12763.77 BEING THE BALANCE OF INTEREST ACCRUED AND DUE ON THE JUDGEMENT [sic] DEBT OF $36200.00.

2THAT THE DEFENDANT PAY THE COSTS OF AND INCIDENTAL TO THIS APPLICATION."

1. Section 44 of the Lands Resumption Act 1957 enacts the law on three points. Those points are:

1that compensation under the Act shall carry interest.

2that it shall carry interest during a certain period, namely, "from the date of the acquisition of the estate or interest, or the time when the right to compensation otherwise arose, until payment thereof is made to the claimant, or until the amount thereof has been paid into the Treasury".

3that, subject to subs(2) of s44, it shall carry interest at the rate specified in subs(1) of that section, namely the long term bond rate in respect of Commonwealth securities as at the time when the compensation becomes payable.

Only one rate of interest is specified in subs(1) and it must be the intention, subject of course, to subs(2) of the section, that rate is payable in respect of the whole of the period referred to in proposition (2) above. On the correct interpretation of the section there is no room for variations in the rate during the relevant period.

1. Subsection (2) of the section allows a reduction in the rate specified in proposition (3) above where the compensation is paid within three years from the time when it first became payable or the amount thereof is deposited in the Treasury within that time.

1. The words "from the date of the acquisition of the estate or interest" no doubt refer back to s14 of the Act and the registration of a notification under s13 of the Act.

1. The words "or the time when the right to compensation otherwise arose" refer to the time when the right to compensation arose otherwise than by acquisition of an estate or interest by registration of a notification for example, compensation for damage arising from entry under Part III of the Act.

1. The remaining question is to determine on the facts of this case "the time when the compensation becomes payable" within the meaning of those words in s44, because, subject always to s44(2), it is the long term bond rate at that time which determines the amount of interest to be paid. To answer that question we must turn to s45.

1. The plaintiff became a person who was entitled to a "determined amount of compensation" when the compensation was assessed by reasons for judgment published on 28 February 1986 (B4/1986). By those reasons the compensation was assessed at $31,200.00 which was to "carry interest from 28th November 1974 as prescribed in the statute". However, there was a slip in those reasons which was subsequently corrected by consent order. The slip was that a sum of $5,000 which was assessed as an item in the total compensation was not added in as an item in the piece of arithmetic which appears at the end of the reasons and which produced the figure of $31,200.00. Adding in the figure of $5,000 you get the true final assessment of $36,200. It is clear from the facts that application must have been made to the Minister within the meaning of s45(1). It should be inferred that the plaintiff made out to the satisfaction of the Crown Solicitor a title to the land in respect of which the compensation was payable. The Minister was entitled to waive compliance with s45(2) of the Act the provision which s45(2) contains being one existing for his benefit alone and not for the benefit of the plaintiff (Halsbury's Laws of England 4th ed Vol 16 para1471).

1. The Minister had paid into court on 25 June 1985 the sum of $30,000. Interest accrued on that sum paid into court and a sum of $3,520.68 had accrued by 4 August 1986. That total sum of $33,520.68 was paid to the plaintiff's solicitors on 22 August 1986. A further $42,284.99 was paid to the plaintiff on 25 August 1986. Thus a total sum of $75,805.67 was paid to the plaintiff, being $36,200 in compensation and $39,605.67 interest. The figure for interest, $39.605.67 is made up as follows:

$36,200 at five per cent per annum
from 28 November 1974 to 30 November
1976 (301176 being the date when
s44 of the Act was amended to the
form it is now in and five per cent
being the rate of interest prescribed

by the statute prior to the amendment) –   $ 3,631.00.

Interest on $36,200 from 1 December 1976
to 27 August 1986 at 10.2 per cent –   $35,974.67

$39,605.67

1. In the claim which the plaintiff makes in this application he treats 21 August 1986 as the time when the compensation became payable, a time when the long term bond rate for 15 years was 14.05 per cent according to the plaintiff's evidence (see exhibit "A" to his affidavit sworn 21 August 1989). However, I note that counsel for the Minister submitted that the plaintiff was treating the date of actual payment as the date when compensation became payable and that the rate at that time was 13.65 per cent. That figure conflicts with the plaintiff's figure of 14.05 per cent. I am not in a position to resolve that conflict and that point must be referred back to the parties.

1. On the evidence one cannot say when application was made to the Minister within the meaning of s45(1) of the Act for payment of the judgment sum or when title was made out to the satisfaction of the Crown Solicitor. Presumably the waiver occurred at the time of payment of compensation and what the Minister regarded as the full amount of interest due. Therefore, the position is that I cannot specify with certainty on the evidence on what date the compensation became payable. I can only note that the plaintiff asserts that the date was 21 August 1986 and the Minister has not joined issue with that proposition. However, no doubt, that detail can be sorted out by the parties. The real point of substance at issue is the true construction of s44 on the subject of the rate of interest to be used when assessing interest on the compensation.

1. The argument of counsel for the Minister, in effect, is "that s44(1) sets the rate and allows the variation up to the date when the compensation becomes payable, that is from the date of acquisition until payment is made ... On the defendant's interpretation of s44 the plaintiff is paid market value as at the date of the acquisition and the interest rate varying over the period until payment". Counsel for the Minister also relied on a similar construction of the legislation which is to be found in Fricke: Compulsory Acquisition of Land in Australia 2nd ed pp262–3, and submitted in conclusion, "it is the defendant's submission ... that interest is payable when compensation is payable in accordance with s45 that the rate of interest is the long term bond rate from the date of the acquisition to the date of payment".

1. I do not accept the argument for the Minister nor the construction of the section outlined in Fricke (supra). I accept the substance of the submission by the plaintiff. In my opinion the function in the section of the words "from the date of the acquisition of the estate or interest ... paid into the Treasury" is to specify the period during which interest is to be paid. Those words do not govern or in any way affect the rate of interest to be used in the calculation. The sole provision as to the appropriate rate of interest in the sub–section is that contained in the words "at a rate which is the same as the rate of interest payable at the time when the compensation becomes payable in respect of Commonwealth securities, that rate being the long term bond rate". Those words are clear. Strictly speaking the rate is not the long term bond rate; it is to be the same as the long term bond rate. But it is not the long term bond rate from time to time over the relevant period. It is to be the same as the long term bond rate at a particular time, namely "at the time when the compensation becomes payable". The argument for the Minister fails to give proper weight to the words just quoted. Those words "payable at the time when the compensation becomes payable" govern the words "rate of interest" immediately preceding them and not the word "interest" first appearing in line two. The argument for the Minister in effect, strikes out the words "at the time when the compensation becomes payable". But effect must be given to all the words of the sub–section.

1. I have found it useful to contrast the terms of the Tasmanian section with s36 of the Lands Acquisition Act 1955–1973 (Clth).

1. I shall publish these reasons and then hear the parties as to the orders to be made.