Chief Executive, Department of Main Roads ANDHammercall Pty Ltd
[2001] QLAC 43
•21 May 2002
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Re:Appeal against a decision of the Land Court Claim for Compensation
Resumption for Transport purposes
Acquisition of Land Act 1967
BETWEEN
Chief Executive, Department of Main Roads AND
Hammercall Pty Ltd
Appellant
Respondent
REASONS – MULLINS J AND MR RP SCOTT
Delivered this Twenty-first day of May 2002
[1] Judgment was given in the Land Court on 21 September 2000 in respect of a claim for compensation by Hammercall Pty Ltd (“the claimant”) for land described as Lot 177 on RP899491 County of Ward Parish of Mudgeeraba (“the land”) resumed under the Acquisition of Land Act 1967 (“the Act”) by the Chief Executive, Department of Transport (now Department of Main Roads) (“the respondent”) on 24 November 1995. Compensation was determined at $383,030 as follows:
Value for land lost $337,750
Engineering fees for submitting claim for compensation $37,820 Legal fees for submitting claim for compensation $2,460 Valuation fees for submission of claim for compensation $5,000 TOTAL $383,030
Interest was ordered at the rate of 6.75% per annum to be paid on the amount of $337,750 from the date of resumption of 24 November 1995 up to and including the day immediately preceding the date that the amount of compensation was paid. It was further ordered that interest at the rate of 6.75% per annum was to be paid on the sum of $45,280 from the date of payment of the professional fees (if they were paid) up until the day immediately preceding the date on which compensation was paid.
Each of the claimant and the respondent has appealed that decision.
Background
[4] The land had an area of 1.927 hectares and was part of Lot 76 on RP215311. Prior to resumption Lot 76 had a total area of 29.807 hectares. Lot 76 is located adjoining the Pacific Highway which forms its northern boundary in the suburb of Andrews, 3.5 km south west of Burleigh Heads on the Gold Coast. To the east of Lot 76 is the western portion of Old Burleigh Town Estate which is a 70 hectare site owned by the claimant and being developed in stages for detached housing. To the west of Lot 76 is a 10.8 hectare gravel reserve and a park and recreation reserve being developed for motocross purposes. To the south is Old Coach Road which runs along a ridge line connecting the West Burleigh interchange (2.2 km to the east) and Reedy Creek interchange (2.2 km to the west).
[5] At the date of resumption Lot 76 had been extensively used for extractive purposes by a related company of the claimant for filling used on the Old Burleigh Town Estate.
Lot 76 was encumbered by two easements. Easement A on RP140269 severed the property in a west/east direction. The encumbered area was 2.551 hectares and the easement was taken for water supply purposes by the Gold Coast City Council. Easement D on RP805573 traversed part of the property’s southern boundary. The area encumbered was 7,454 m2 and the easement was taken for water supply purposes by the Albert Shire Council.
[7] The then registered owner of Lot 76 had made two applications for rezoning in respect of parts of Lot 76 in late 1989 and early 1990. The first application sought rezoning of that part lying to the west of the line of the proposed Bermuda Street extension to proposed light industry. It was approved by Albert Shire Council on 26 February 1990 subject to a number of conditions, including “Provision of the land for the extension of Bermuda Street at no cost to Council”. The second application for rezoning was for the balance eastern part of Lot 76 to be included in the special business zone. It was also approved by the Council on conditions which included “Dedication of land to the satisfaction of the Shire Engineer for the construction of the Bermuda Street extension”.
[8] The claimant purchased Lot 76 for $3,200,000 on 22 September 1994 from the mortgagee in possession exercising power of sale. Although the two rezoning applications had been gazetted, no formal agreement in relation to the conditions had been entered into between the registered owner and the Council. It was therefore
common ground that the conditions of rezoning did not become binding on the claimant as the successor in title to Lot 76.
[9] The claimant’s solicitors undertook the usual Queensland Transport search in respect of Lot 76 in connection with the claimant’s purchase and were provided with a sketch which showed the future requirements from Lot 76 for road purposes of a triangular portion for the interchange roundabout abutting the Pacific Highway and a corridor of 100 metres width from that interchange through Lot 76 to Old Coach Road.
[10] Under the Albert Shire Council Planning Scheme which was gazetted on 24 February 1995 Lot 76 was zoned commercial industry.
[11] Queensland Transport provided the claimant a statement of reasons dated 13 July 1995 for the proposed resumption in respect of part of Lot 76, referring to the power conferred on the Director-General, Department of Transport pursuant to s 10(1) of the Transport Planning and Coordination Act 1994 (“TPCA”) to acquire property for the purposes of transport or for an incidental purpose. That statement referred to the public announcement on 5 May 1995 by the Minister for Transport of the decision to construct a road between Burleigh Connection Road and the Pacific Highway, the traffic studies and investigations which had occurred and the identification of the land requirements for the proposed route. The claimant’s land was identified as being necessary to allow the proposed construction to proceed.
[12] The claimant received a notice of intention to resume dated 25 July 1995 (given in pursuance of the provisions of the Act and the TPCA) to which plan R1-754 was attached showing the triangular area of about 1.924 hectares proposed to be taken for road purposes to enable the interchange between the Burleigh Connection Road (Bermuda Street) and the Pacific Highway to be constructed at Andrews. The Andrews interchange would permit traffic moving in an easterly and/or westerly direction on the Pacific Highway to exit the highway and move northerly to the Gold Coast area or the traffic could move southerly from the Gold Coast area and enter onto the Pacific Highway at the Andrews interchange.
[13] For the purpose of effecting the resumption, Lot 76 was subdivided. The land resumed was described as Lot 177 on RP899491. The balance land was described as Lot 176 on RP899491.
[14] The Proclamation published in the Queensland Government Gazette on 24 November 1995 showed that the land was taken for road purposes.
At the time of resumption the Andrews interchange had been designed and was subsequently constructed to accommodate a future road to the south through Lot
That future road is what is referred to as the Bermuda Street southern extension. [16] The claimant’s claim for compensation dated 11 November 1997 was lodged with the Registrar of the Land Court on 11 May 1998 claiming $1,571,760.
During the hearing of the claim for compensation in April 2000, an amended claim for compensation was ultimately submitted as follows:
Land $790,000
Costs for construction of Andrews interchange western roundabout ramp extension
$203,300
Engineering costs in connection with design and documentation of extension of Bermuda Street and service road
$71,000
| Engineering costs in preparation of plans and presenting | $53,960 | |
| claim for compensation up to date of preparation of claim | ||
| for compensation Legal fees on submitting claim for compensation | $2,460 | |
| Valuation fees for submission of claim for compensation | $5,000 | |
| TOTAL | $1,125,720 | |
| [18] | At the hearing the respondent had contended that, because of | enhancement, |
compensation should be determined at nil.
Key findings of the Land Court
[19] The learned Member found that the “scheme” for the purposes of determining the value of the land for compensation purposes should be taken to include the southern extension road, although that road would not be required until some future time and had not been declared a State-controlled road. The learned Member also found that the southern extension road formed no part of the actual lands resumed and that there had been no actual severance in respect of the southern extension road.
[20] While accepting that the southern connection road was part of the “scheme” for purposes of assessing value of the land taken under the principle in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565, the learned Member did not see a claim for compensation for the loss of the land for the connection road as falling within the meaning of injurious affection.
[21] In respect of the claim made by the claimant for engineering costs associated with the design and documentation for the southern connection road and the service road, the learned Member concluded that those costs were more properly associated with the claimant’s responsibility to satisfy the respondent, that any future development on Lot 176 would not impact the future sub arterial road. The learned Member therefore found that those costs were a reasonable and relevant part of the normal development of Lot 176 and were not compensable in this matter. In addition the learned Member also rejected the claim on the basis that those costs did not emanate from the land resumed. In respect of the construction costs of the claimant for a temporary access road on Lot 176, the learned Member found that the decision to construct the temporary access road indicated that the claimant saw the major, if not total, benefit accruing to the residential areas of the land to the east of Lot 176. Because of the deferred timing of the development of Lot 176, the learned Member rejected any reduction for the costs of the temporary access road, as being a reasonable consequence of the resumption of Lot 177.
[22] In assessing the value of the resumed land, the learned Member followed the “before and after” method of valuation which was used by the valuers for both parties. [23] The learned Member found that any enhancement resulting from direct access to the Andrews interchange could have taken effect only from 20 January 2000. The learned Member concluded that any in globo rate per hectare, reflecting such an enhancement, should therefore be deferred until at least 20 January 2000 in order to allow for the risk of uncertainty of access to the highway. The learned Member calculated the discount rate for that delayed benefit to be 23% (present value at 6.75% for four years), but on the basis that the calculation of this discount rate had the benefit of hindsight which would not have been possessed by a prudent purchaser at the time of resumption, the learned Member allowed the discount rate of 15% to reflect that enhancement.
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Respondent’s grounds of appeal
The grounds of appeal of the respondent which were pursued on the hearing of the appeal are:
"1.The Learned Member erred in law in finding that the southern extension of Bermuda Street (which has not been constructed) was a part of a scheme relevant to the resumption of part of the subject land.
2.The Learned Member’s finding that the southern extension of Bermuda Street formed a part of the scheme relevant to the resumption of part of the subject land was against the evidence and the weight of the evidence.
3.The Learned Member erred in assessing the value of the land in the after case on the basis that the southern extension of Bermuda Street was a part of a scheme relevant to the resumption of part of the subject land.
…..
5.The Learned Member’s findings in respect of the after value of the subject land were against the evidence and the weight of the evidence for reasons including (but not limited to):
.....
(c) In assessing the after value of the subject land, the Learned Member erred in:
…..
(ii)deciding against the evidence and the weight of the evidence that the after value of the land ($125,000/ha) should be discounted by 15% ($106,250) to 'allow for the risk of uncertainty of access' (p. 66, ROJ).
6.The Learned Member erred in fact and in law by taking into account the facts matters and circumstances relied on by him to discount the after value of the land by 15%."
The claimant’s grounds of appeal that were pursued on the hearing of the appeal are:
"2.The learned member erred in finding that the loss of land for the southern connection road did not fall within the meaning of
'injurious affection' or was otherwise compensable in terms of the Acquisition of Land Act 1967.
3.The learned member erred in finding that the claim for engineering costs associated with the design and documentation of the southern connection road and the service road were costs properly associated with the Claimant’s responsibility to satisfy the Respondent that any future development on the subject land would not impact on the future sub arterial road.
4.The learned member erred in rejecting the claim for compensation for the cost of the temporary access road as being a reasonable consequence of the resumption.
5.The learned member erred when valuing the after resumption land by taking into account the whole of the land rather than that land which remains after deducting the land required for the southern extension road."
[27] It is convenient to deal with the respondent’s grounds of appeal 1, 2 and 3, then the claimant’s grounds of appeal and, lastly, the respondent’s grounds of appeal 5 and 6.
Respondent’s grounds of appeal 1, 2 and 3
[28] Although the respondent conceded that the future requirement for the Bermuda Street southern extension had been identified in traffic studies as early as 1987 and was part of an overall long term traffic strategy, and the Andrews interchange had been designed to accommodate the construction of the southern extension when it became necessary, it was the respondent’s case before the learned Member and on appeal that the southern extension of Bermuda Street did not form part of the respondent’s scheme underlying the resumption of Lot 177.
[29] On appeal, the respondent relied on the evidence which pointed to the scheme as it affected the land that was required to construct the Andrews interchange and submitted that there was no evidence to support the learned Member’s finding that the southern extension of Bermuda Street formed part of the respondent’s scheme for the resumption. The respondent relied on the observation of Gobbo J in Rees v Minister for Planning and Housing (1992) 76 LGRA 167, 171 in support of the Pointe Gourde principle being concerned with the effect of the scheme:
"It is not concerned with the activities of another government or other public authority or another scheme of acquisition rather than the very scheme which has brought about the acquisition of the subject land."
The claimant submitted that the finding of the learned Member as to what comprised the scheme was reasonably open on the evidence and should not be disturbed.
[30] The respondent also relied on the limitations of the Transport Infrastructure Act 1994 (“TIA”). Under s 23(1) of the TIA the relevant Minister may, by gazette notice, declare a road or route, or part of a road or route, to be a State-controlled road. Section 26 of the TIA then provides that the chief executive may exercise, for a State- controlled road in the area of a local government, all of the powers that the local government may exercise for a local government road in the area.
[31] Under s 38 of the TIA the chief executive may enter into an agreement with a local government under which the chief executive supplies funds to the local government for road works on a local government road, for other works that contribute to the effectiveness and efficiency of the road network or for the operation of a local government road. Another aspect of the respondent’s role in respect of State-controlled roads is found in s 40 of the TIA. Section 40(1) of the TIA provides:
“40.(1) A local government must obtain the chief executive’s written approval if:
(a)it intends to –
(i) approve a subdivision, rezoning or development of land; or
(ii) carry out road works on a local government road or make changes to the management of a local government road; and
(b)the approval, works or changes would –
(i) require the carrying out of road works on a State-controlled road; or
(ii) otherwise have a significant adverse impact on a State- controlled road; or
(iii)have a significant impact on the planning of a State-controlled road or a future State-controlled road."
The respondent therefore argued on appeal that the learned Member erred in law in finding that the scheme included the southern extension of Bermuda Street, because at the date of the resumption of Lot 177 the respondent was unable to exercise any statutory powers with respect to the proposed southern extension of Bermuda Street, as it was not a State-controlled road and it was contemplated that any development of the southern extension would be under the control of the Council. [33] There was no issue on the appeal that the extent of the scheme underlying the resumption was a question of fact: Fraser v City of Fraserville [1917] AC 187, 194, Wilson v Liverpool City Council [1971] 1 All ER 628, 634 and J R Steven v The
Commissioner of Water Resources (1990) 13 QLCR 75, 81. A qualification on that proposition advanced by the respondent was that the concept of the scheme must be totally dependent on the lawful exercise of power.
[34] It is therefore logical to deal with whether there was an error in the learned Member’s finding of fact that the scheme included the southern extension of Bermuda Street at the date of the resumption and, if there were no error, to consider the issue raised by the respondent that it cannot be a scheme unless it is supported by a lawful exercise of statutory power.
[35] The respondent’s submissions as to the finding the learned Member should have made as to the extent of the scheme were directed at the characterisation of, and the conclusions which should be drawn from, the evidence.
The relevant history began in 1987 with the Gold Coast Area Transport Study prepared for the respondent in conjunction with the Gold Coast City Council and Albert Shire Council. That study indicated a recommended road hierarchy which showed the Bermuda Street southern extension as a future collector/distributor road. [37] In October 1989 a planning report prepared for the respondent by Burchill Bate Parker & Partners Pty Ltd showed two alternatives for the Andrews interchange, one alternative comprising a roundabout on either side of the Pacific Highway and the other a bridged roundabout with separate overpass bridge structures. The report made reference to “the requirement to provide for access to future development south-west of the highway” and stated:
"As stated in the commissioning letter provision for a future access to development south-west of the Highway is to be made.
It follows that the total interchange will only be required when this development occurs and hence staging of the construction will occur. The first stage providing access to and from the Bundall Road Extension onto the Pacific Highway on the eastern side."
[38] The respondent’s requirements for a road corridor associated with the Bermuda Street southern extension and land for the Andrews interchange was communicated by the respondent to the Council by letter dated 15 November 1990 in connection with the rezoning applications for Lot 76. That letter stated:
"The dedication of land associated with the Bermuda Street extension and interchange with the Pacific Highway at Andrews is indicated on the attached sketch. Dimensions would need to be confirmed on site after survey and would be affected by the final levels of earthworks within the Development."
The attached sketch showed a road corridor traversing Lot 76 from the proposed interchange at the Highway to Old Coach Road, but without dimensions.
[39] In March 1994 Veitch Lister Consulting Pty Ltd prepared a report for the respondent, Albert Shire Council and Gold Coast City Council examining the transport needs associated with long term development in Albert Shire and the Gold Coast region. That strategy identified the Bermuda Street southern extension as part of the preferred future road network. When that report was tabled at the Albert Shire Council Co-ordination Committee meeting on 31 May 1994, that Committee resolved that, where possible, the Council would attempt to preserve the corridors identified, including in relation to Tallebudgera Connection Road (or Bermuda Street southern extension) from Andrews interchange to Stackpole Street.
[40] The learned Member referred to the letter dated 9 August 1994 written by the respondent to Milne Consulting Engineers Pty Ltd which acted for the former owners of Lot 76. That letter stated:
"Conditions for rezoning require the dedication of land for the future extension of Bermuda Street. The nominal twenty (20) metres indicated on the initial earthworks plan is not adequate and until detailed cross sections are determined from accurate survey data, no further earthworks should proceed in the one hundred (100) metre corridor indicated on the attached plan number 2013-Sketch 'A'."
On the copy of that letter which the respondent sent to the Council, the request was made that, until an accurate survey was available and detailed design of the Bermuda Street extension had been undertaken, the Council instruct the developer to cease any further earthworks in the 100 metre corridor indicated in the letter.
[41] The learned Member found that within the context of these overall transport studies it was clear that there was a perceived need for the dedication and construction of the southern extension of Bermuda Street between the Pacific Highway and Old Coach Road at some time in the future. The learned Member noted that there was a difference between the parties as to the width of the road reserve needed to accommodate the southern extension, depending on its classification as either a sub arterial or industrial collector road.
[42] The learned Member found that the strategy for the southern extension was further reinforced by correspondence between the Council and the agents for the former owners of Lot 76 in February and June 1990 in respect of the rezoning applications, the respondent and the Council in November 1990, the respondent to the claimant on 14 September 1994 and the respondent to the Council of 25 and 28
October 1994 objecting to any further subdivision of Lot 76, until the conditions of the rezoning approval of 1990 had been complied with.
[43] At the hearing of the appeal the respondent emphasised that the 1989 report by Burchill Bate Parker & Partners Pty Ltd specified that the Andrews interchange would be constructed in stages and that the total interchange would be required only when the future development to the south of the Highway had occurred. The respondent relied on the minutes of the Council Committee meeting dated 31 May 1994 as showing that it was part of the Council’s long term transport study to preserve a road corridor for the Bermuda Street southern extension. The respondent referred to the plan attached to the notice of intention to resume identifying that the only land required from Lot 76 was the triangular portion for the Andrews interchange and the land to be resumed to the north of the Highway. The respondent also relied on the express decision behind the requirement for the resumption of Lot 177 specified in the statement of reasons dated 13 July 1995.
[44] The learned Member referred to the concessions made by the respondent’s town planner, Mr Michael Challoner, and its principal engineer (project planning) for the South Coast-Hinterland District, Mr Wayne Leong, that while the southern connection road was not required with the Andrews interchange, it was envisaged by the respondent at the time of the resumption that, in the future, there would be a need for the Bermuda Street southern extension. The learned Member referred to Mr Challoner’s noting that it was not necessary to have the southern extension to justify the Andrews interchange, but that Mr Challoner was unable to explain the justification for the use of the high capacity roundabout that was constructed at the Andrews interchange, rather than a more simple fly-over arrangement.
[45] The claimant had lodged an objection to the acquisition of the land and an objection hearing took place on 7 September 1995. The objection hearing report dated 5 October 1995 was Exhibit 39 before the learned Member. On this appeal the respondent relied on the contents of the letter dated 5 October 1995 from the respondent to Weathered Howe Pty Ltd, the engineers acting on behalf of the claimant in respect of the objection, and, in particular on the following passages:
"· The land required is the minimum necessary to meet the current needs for extending the Southport – Burleigh Road to meet with the Pacific Highway at a location known as the Andrews Interchange. Both the Southport – Burleigh Road and the Pacific Highway are, or are in the process of becoming, State-controlled Roads.
·The Department acknowledges that there may be a need for a road to connect Old Coach Road across your client’s property to the Andrews Interchange. This road would be under the control of Gold Coast City Council and this Department is unable, under its current Acts, to acquire land for roads which are not State- controlled Roads.
Any connection of this road to Andrews Interchange would however require the approval of Queensland Transport."
[46] The respondent also relied on two documents contained in Exhibit 39 which it submitted were relevant to the inter-relationship between the respondent and the Council with respect to the planning proposal for the Bermuda Street southern extension. A document entitled “Ministerial Reply” had been prepared by Mr Leong’s supervisor, Mr V K Dippelsmann, on 24 August 1995 in relation to future road requirements Tallebudgera Connection Road Andrews-Currumbin Valley. Under the heading “100 Metre Road Corridor” in that document, there was the following statement:
"Queensland Transport have had a longstanding planning proposal for the possible future extension of Tallebudgera Connection Road to the Pacific Highway and Bundall Road. (see attached planning layout 191064)."
[47] Reference was also made in that document to the conditions relating to the rezoning of part of Lot 76 to light industry and the condition providing for land for the extension of Bermuda Street at no cost to Council and the following statement was then made:
"The condition did not specify the width of the corridor between the Pacific Highway and Old Coach Road. However a four (4) lane divided carriageway would be reasonable to accommodate the projected traffic growth from surrounding developments and it was envisaged that the corridor would be set aside as and when these developments proceeded."
This document also sets out the reason for the notice of intention to resume which was issued on 13 July 1995 in respect of Lot 76 being limited to land required for the interchange only as being that “this job is identified on the 1995/96 program”.
[48] The respondent also relied on the minutes of the objection hearing which it submitted identified that the scheme underlying the resumption, as far as the officers of the respondent were concerned, was the interchange itself and the roadworks to the north of the Highway and that the design and construct contract for the Andrews
interchange was limited to the interchange and the extension of Bermuda Street to the north of the Highway.
[49] It was submitted on behalf of the respondent that the evidence therefore must result in the conclusion that any future southern extension of Bermuda Street was not a part of any scheme underlying the resumption of Lot 177 and resumptions of other land north of the Pacific Highway and that the requirement for any southern extension of Bermuda Street was a separate project under the control of the Gold Coast City Council, the timing of which was dependent on future development south of the Highway.
[50] The learned Member identified that what was fundamental to the respondent’s definition of the scheme was its conclusion that the timing of development of Lot 76 would precede the overall need for the southern extension and that the preferable course would be for the dedication of the road reserve for the southern extension to be incorporated as a condition of any development approval required for Lot 76.
[51] The learned Member also noted that both parties had agreed that it was only a matter of timing before the traffic demands required the development of the southern extension of Bermuda Street. The pattern of correspondence and traffic studies showed that the planning for this future road had been undertaken by the respondent and the Council was adopting plans for the southern extension consistent with the requirements of the respondent. A fact emphasised in the learned Member’s reasons was the construction of the high capacity dual lane structure at the Andrews interchange which made specific provision for the development of the southern extension to Bermuda Street.
[52] This analysis of the evidence shows that it was clearly open to the learned Member to conclude that, as a matter of fact, the scheme (even if it is described as “the very scheme”) underlying the resumption of Lot 177 did not stop at the Andrews interchange but included the southern extension road, even though it was contemplated that the road would not be constructed until some future time and that it may not necessarily proceed with an acquisition of land from Lot 176 for the southern extension road, but instead with dedication of the requisite land by the owner of Lot 176 as a condition of development approval imposed by the Council or required by the respondent under s 40 of the TIA.
[53] It is therefore necessary to consider whether the legal impediment raised by the respondent to such finding being made, on the basis of lack of power, can be sustained.
[54] A similar argument had been advanced by the respondent before the learned Member. The learned Member found that from the commencement of the TIA the Council had a legal requirement to consult with the respondent in respect of any proposal that might impact the future road network in the region. The learned Member found that in the event that the claimant had sought development approval for Lot 76, under s 38 of the TIA the respondent could have exercised conditions for funding to improve the local network through the local authority, which, under s 38(2)(b) of the TIA may have been subject to certain conditions. The learned Member referred to the evidence of Mr Leong that there would appear to be no reason why official recognition of the southern extension as a State-controlled road could not occur at the appropriate future time, and that action under s 23(1) of the TIA was a matter entirely at the discretion of the Minister. Even though the learned Member acknowledged that it would have been unlawful for the respondent to have resumed the land for the southern extension at the date of the resumption of Lot 177, as the land required for the southern extension was not a State-controlled road or future State-controlled road, that latter impediment was entirely at the discretion of the Minister.
The respondent’s argument can be stated in terms that a proposal can be part of a scheme underlying a resumption only if the legislative power required to implement that proposal has been exercised.
[56] The authority on which the respondent relied to support its submissions was an observation in Birmingham District Council v Morris and Jacombs Ltd (1976) 33 P&CR 27, 33:
"A scheme means, I think, no more than a project on the part of the authority concerned to acquire land – and, of course, to acquire it for some purpose for which it is authorised to acquire it."
[57] Neither that authority nor any of the authorities to which the parties referred considered circumstances analogous to those relating to the respondent’s resumption where, as a matter of fact, the actual resumption did not extend to all the lands to which the scheme underlying the resumption applied. That a wider public purpose can be served by an acquisition than the particular purposes to which the resumed land will be put was adverted to by Handley JA in Roads and Traffic Authority (NSW) v Perry (2001) 116 LGERA 244, 257.
[58] In this matter, even though the Bermuda Street southern extension had not been declared a State-controlled road and the land for it was not resumed at the same
time as Lot 177, there was a physical relationship between the resumption of Lot 177 for the Andrews interchange and the southern extension of Bermuda Street, as the Andrews interchange was intended, designed and constructed to accommodate that southern extension.
[59] It was not suggested on behalf of the respondent that the respondent would not have the power to acquire the land for the southern extension of Bermuda Street, if the respondent chose to proceed under s 23(1) of the TIA.
[60] At the date of the resumption of Lot 177 there was, prospectively, sufficient power under either the TPCA or the TIA to enable the respondent to be able to implement the proposal of completing the southern extension of Bermuda Street from the Andrews interchange to Old Coach Road, although the means by which that would be accomplished would depend on future events. When that is coupled with the physical connection between the existing resumption for the Andrews interchange and the proposal for the southern extension to Bermuda Street and the evidence identified by the learned Member as to the strategy of the respondent for the southern extension, there was sufficient statutory power available to be exercised by the respondent to enable the determination to be made by the learned Member that the scheme underlying the resumption of Lot 177 extended to the southern extension of Bermuda Street. This conclusion can be reached even though the respondent had not at that time exercised the power to acquire the part of Lot 176 required for the southern extension or any of its other statutory powers which would ensure that that land was set aside for the southern extension.
The respondent must fail with respect to grounds of appeal 1, 2 and 3.
Claimant’s grounds of appeal 2, 3, 4 and 5
[62] These grounds of appeal relate to the refusal of the learned Member to award the claimant compensation for the following losses claimed by the claimant:
(a)loss of the additional land which a purchaser of Lot 176 would envisage would be required to be dedicated, free of cost, to the respondent or the Council as a development condition, for the corridor for the Bermuda Street southern extension which was over and above that which the purchaser would have expected would have been required to be dedicated pre-resumption for a lower standard road;
(b)the engineering costs for the design and documentation of the southern extension road and service road which the respondent required the claimant to expend in February 1997; and
(c)the construction costs for a temporary access road in a different location to the final road layout which would be required for developing the claimant’s residential land to the east of the southern extension road and the western end of Lot 176.
[63] Before the learned Member the claimant had submitted that it should be compensated for the loss of the land required from Lot 176 for the Bermuda Street southern extension as injurious affection. The claimant’s valuer, Mr Hamilton, in his assessment of the value of Lot 176 after the resumption attributed no value to the part of Lot 176 anticipated to be required for the southern extension. The terms of the claimant’s ground of appeal 2 reflect the claimant’s case before the learned Member. The issue was argued by the claimant on appeal, however, as being a claim for diminution in value of Lot 176 due to the hypothetical prudent purchaser foreseeing the additional land required for the southern extension road above that which could have reasonably or relevantly been required by the Council to be dedicated by the claimant for the purpose of a road, as a condition of development of Lot 176.
[64] The point was taken by the respondent on the hearing of the appeal that the claimant was endeavouring to introduce a new case for compensation on the basis of an additional 36-45m width of land being required for the southern extension above that which the claimant submitted that the Council could have required to be dedicated as a condition of development of Lot 176, when the case before the learned Member had been conducted on the basis of the loss of the whole of the land anticipated to be required for the southern extension corridor. The claimant’s decision to pursue a claim on appeal for compensation for diminution in the value of Lot 176 due to the anticipated loss of part of the land required for the southern extension rather than the whole of the land should be characterised as the claimant’s continuing to agitate part of the case that was pursued before the learned Member, rather than introducing a new case.
[65] It was submitted on behalf of the claimant that as the learned Member’s rejection of the loss of the additional land for the southern extension as injurious affection was based on the application of Edwards v Minister of Transport [1964] 2 QB 134, the matter should be remitted to the learned Member for reconsideration in light of the rejection of the authority of Edwards in determining compensation under s 20(1)(b) of the Act in Marshall v Director-General, Department of Transport (2001) 75 ALJR 1218.
[66] The issue in Marshall was the construction of s 20(1)(b) of the Act and whether compensation for damage to the balance land was restricted to the impact of the work done on the actual land resumed for the purpose for which it was resumed for which Edwards was authority.
[67] The conclusion reached in the joint judgment of Gleeson CJ, Gummow, Kirby and Callinan JJ at para [20] was:
"[20] In our opinion, however, the language of s 20(1)(b) of the Act could hardly be plainer. In assessing compensation, regard is to be had not only to the value of the land taken but also to the damage caused by the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other [the remaining, severed] land. The section does not say 'the exercise of any statutory powers by the constructing authority on and only on the land taken …'. The section clearly distinguishes between the land taken and the severed land. It does not seek to distinguish between the various activities carried out by a constructing authority in the exercise of its statutory powers: for example, the conduct of a survey, the construction of a road, the building of a bridge, the installation of drainage or footpaths beside the road, and the subsequent use of everything that has been done or brought into existence as, and for the purposes of, a road. In truth, all of these can relevantly and properly be characterised as part and parcel of the construction, and subsequently the use of the road. Once the constructing authority acquires land for a statutory purpose and carries out the statutory purpose, it must, pursuant to s 20(1)(b) of the Act, compensate the dispossessed owner for the injurious effect upon the residual land resulting from the undertaking and the implementation of that purpose, actual and prospective."
[68] McHugh J dealt with the construction of s 20(1)(b) in a separate judgment as follows:
"[44]The natural and ordinary meaning of s 20(1)(b) of the Act directs the relevant tribunal, when determining the amount of compensation to be awarded to the claimant, to have regard to any damage caused by the exercise of any statutory powers by the constructing authority injuriously affecting the land of the claimant that he or she retains after the severance. That is a separate head of compensation from compensation for the value of the land taken and compensation for damage resulting from the severing of the land of the claimant. Nothing in the section gives any ground for supposing that compensation for injurious affection is conditioned on the statutory powers of the constructing authority being exercised on the resumed land. All that the claimant is required to prove is that the exercise of a statutory power by the constructing authority injuriously affected the 'other land' of the claimant.
[45]Mr D F Jackson QC, counsel for the appellant, accepted that the damage must be relevant to the implementation of the purpose for which the land was compulsorily acquired. That concession would seem to be correct. The 'constructing authority' referred to in s 20(1)(b) is the 'Crown or any person or local authority authorised by his Act or any other Act … to take land for any purpose'. It seems natural to read the reference in that paragraph to ‘the exercise of any statutory powers’ by that authority as referring to the exercise of powers implementing the purpose for which the land was taken. The exercise of a power for any function or purpose incidental to the purpose for which the land was acquired is therefore an exercise of statutory power within the meaning of s 20(1)(b). No narrow view should be taken of what is incidental to the purpose for which the land was acquired. If part of a parcel of land is taken for road purposes, any damage caused to the residue in the course of constructing, paving, draining or making safe the road and its accessories will be injurious affection for the purpose of the paragraph."
[69] The determination of the scheme underlying the acquisition of Lot 177 for the purpose of applying the Pointe Gourde principle is not determinative of the issue of whether there has been an exercise of statutory powers by the respondent which triggers the application of s 20(1)(b) of the Act. The statutory powers that have been exercised by the respondent with which the acquisition of Lot 177 is connected are those that authorised the acquisition and the construction of the Andrews interchange. The design and construction of the Andrews interchange left no doubt to a hypothetical prudent purchaser of Lot 176 at the date of resumption of Lot 177 as to the future likely requirement for a corridor through Lot 176 for the Bermuda Street southern extension.
[70] The next issue is whether that foreshadowed Bermuda Street southern extension as a result of the design and construction of the Andrews interchange injuriously affected Lot 176. (As the foreshadowed Bermuda Street southern extension arose from the exercise by the respondent of statutory powers in respect of the resumed land, the decision of the High Court in Marshall was not strictly needed by the claimant to enable the issue of damage caused to Lot 176, as a result of that exercise of statutory powers, to be considered as injurious affection.)
[71] On the appeal the claimant, in effect, abandoned seeking compensation for the actual loss of land for the southern extension in favour of the contention that the compensation was for injurious affection due to the diminution in value of Lot 176, as a result of the requirement of land for the southern extension. The claimant’s
argument still focussed on the loss of land for the southern extension as the basis for assessing the diminution in value.
[72] This raised a conceptual difficulty which was referred to by Mr Gallagher of Queen’s Counsel who appeared on behalf of the respondent in argument. He postulated that what was being sought by the claimant was value for the balance of land to be set aside by condition imposed on development approval, but not yet taken, and valued, as if it were taken.
[73] The future loss of land for the southern extension corridor will require a separate exercise of statutory power by either the respondent or the Council or both the respondent and the Council. For the purpose of this appeal, it is neither necessary nor possible to decide whether or not the Council would be able to impose a condition on any development application by the owner of Lot 176 which would require the dedication of the entire width of the corridor needed to accommodate a sub arterial road for the southern extension. It would be a question at the time of the imposition of the condition as to whether there was the relevant nexus between the proposed use of the site and the condition sought to be imposed: Wootton v Woongarra Shire Council (1985) 56 LGRA 301, 303, s 6.1(1)(c) Local Government (Planning and Environment) Act 1990 and now s 3.5.30 Integrated Planning Act 1997. It is possible that if it were not a relevant or reasonable condition for the Council to require the width of corridor which the respondent were to seek for the construction of the southern extension, the Council or the respondent may be forced to proceed with a compulsory acquisition of the additional land. If a future acquisition were to take place, the then owner of Lot 176 would be compensated for the value of the land acquired for the southern extension. If the land for the southern extension were obtained as a result of a condition imposed on a development approval, the condition could not be imposed, unless and until there were a development application.
[74] When the learned Member was considering the reasons why the respective valuers for the parties had reached different values for the resumed land, he stated in his reasons for judgment:
“In adopting his piecemeal approach, Mr Hamilton has assessed the future road reserves separating the severances as having nil value. Presumably he does that on the basis that the claimant would be required to cede those lands to the respondent, at no cost to the respondent. While that may be the eventual outcome of negotiations between the parties, it may not be accurate as to conclude that the area of the resumed lands has no value to the claimant.
At the very least, such lands would be a negotiating point to seek to obtain some concessions from the respondent. After all, if the claimant is unable to proceed with development due to the economic inadvisability of such an approach, then eventually the respondent may be forced by traffic pressures to move to resume the land. It is not uncommon in the development industry for some compromise to be achieved."
The usual approach to assessing compensation for injurious affection is by determining the effect of the relevant exercise of statutory power on the value of the balance land from the viewpoint of a hypothetical prudent purchaser at the date of resumption: Gold Coast City Council v Suntown Pty Ltd (1979) 6 QLCR 196, 210. [76] Disregarding the resumption of Lot 177, the hypothetical prudent purchaser of Lot 176 would have regard to the recent history of rezoning applications affecting Lot 176 and would take into account in determining the value of Lot 176, the likely requirement of the Council in respect of any development application for Lot 176 for the dedication of land for a road in the vicinity of that corridor for the southern extension to provide a link between the Pacific Highway and Old Coach Road through Lot 176. The learned Member expressly referred to the rezoning plan in 1993 (Exhibit 23) as demonstrating that connection.
[77] What has happened at the date of resumption, as a result of the exercise by the respondent of its statutory powers in respect of the acquisition of Lot 177 and the design and construction of the Andrews interchange, is that the risk of the requirement for a sub arterial road through Lot 176 to provide the southern extension of Bermuda Street to Old Coach Road has become more apparent. What the hypothetical purchaser of Lot 176 may be faced with, however, at the date of resumption is uncertainty as to how that foreshadowed requirement for the southern extension will be achieved. There are a number of possibilities as to how and on what terms the land for the southern corridor may be excised from Lot 176. The possibilities depend on the timing of any development application for Lot 176 in relation to the need of the respondent to proceed with the southern extension of Bermuda Street to implement its traffic proposals for the region; the nature of any development application for Lot 176; what width of corridor would be a reasonable or relevant condition for the Council to impose in respect of the development application for Lot 176; potential delays in obtaining access to the interchange, the possibility that the owner of Lot 176 may need to satisfy the respondent as to the design requirements for the southern extension before proceeding with development of Lot 176; any benefits the owner of
Lot 176 is able to obtain from the respondent in connection with the proposed development of Lot 176, as a result of owning the land required for the southern extension corridor; and, to the extent that the respondent is forced to resume some part of the land required from Lot 176 for the southern extension, that compensation may be payable to the owner of Lot 176 under the Act in respect of that resumption.
[78] Because of the effect on the hypothetical prudent purchaser at the date of resumption of the foreshadowed likely future requirement of land from Lot 176 for the southern extension, as a result of the design and construction of the Andrews interchange on Lot 177, the hypothetical prudent purchaser may, taking into account the possibilities outlined in the preceding paragraph, make some adjustment to the value of Lot 176 which is appropriately characterised as injurious affection caused to Lot 176 from the acquisition of Lot 177 and the design and construction of the Andrews interchange.
This was not the case for injurious affection on this aspect that was advanced by the claimant before the learned Member or on this appeal. The diminution in value of Lot 176 compared with the pre-resumption position as a result of the hypothetical prudent purchaser on the date of resumption taking into account the various possibilities that emerge from the foreshadowed likely future requirement of land from Lot 176 for the southern extension, does not result in a diminution in value equivalent to the loss of the land from Lot 176 required for the southern extension or the loss of land from Lot 176 for the southern extension being the additional amount of land to that which a purchaser would have expected would have been required to have been dedicated as part of the development of Lot 176 prior to the resumption. [80] Even though the learned Member relied on Edwards in concluding that compensation for loss of land for the southern extension did not fall within the meaning of injurious affection, the learned Member’s conclusion remains correct in light of the above analysis as to whether diminution in value equivalent to the value of that part of Lot 176 anticipated to be lost as a result of a further resumption or dedication pursuant to a condition of development approval for the purpose of the southern extension can amount to injurious affection within the meaning of s 20(1)(b) of the Act caused by the exercise by the respondent of its statutory powers in respect of Lot 177.
The difficulty for the claimant is that the only evidence of diminution of value of that part of Lot 176 anticipated to be required for the southern extension which was before the learned Member was that after resumption it should be given no value. In
the light of this and the terms of the claimant’s ground of appeal 2, the issue arises whether there is any basis on which the matter of injurious affection of the nature which we have described, can be remitted to the learned Member for assessment of compensation. As a finding of injurious affection in the terms which we have found was not the subject of argument on appeal, we propose to invite the parties to make submissions as to what the consequences of such finding should be.
[82] The claimant’s ground of appeal 5 also raises the issue of how that part of Lot 176 required for the southern extension should be treated, but in connection with the assessment of the value of the after resumption land. The claimant’s submissions, both written and oral, in respect of the appeal concentrated on the issue of treating the anticipated loss of additional land from Lot 176 as injurious affection, rather than the issue raised by the claimant’s ground of appeal 5.
[83] The learned Member’s approach to the valuation of the after resumption land was based on his finding that there had been no actual severance created by the foreshadowed requirement of land from Lot 176 for the southern extension. As that finding was not challenged (and could not be challenged) on appeal, the claimant’s ground 5 of appeal cannot succeed.
The learned Member dealt with the engineering costs of $71,000 for the design and documentation of the southern extension road and service road and the costs of building the temporary access road of $838,200 in the context of whether or not they were items of disturbance. On the hearing of the appeal, the claimant sought to recover these items on the basis that they were damage caused to Lot 176 and compensable as injurious affection, relying on Marshall.
In the light of the analysis set out above concerning the foreshadowed likely requirement of the southern extension was a consequence of the respondent’s exercise of statutory powers in respect of Lot 177, the claimant did not need the benefit of the decision in Marshall in order to seek to pursue these items of costs as injurious affection.
[86] These costs were incurred by the claimant as a result of negotiations which took place between the claimant and the respondent in respect of the respondent’s requirements of the claimant in connection with the Old Burleigh Town Estate and access to Lot 176. There was an exchange of correspondence between the parties in February 1997 in respect of the requirements.
[87] It was submitted on behalf of the claimant that the hypothetical prudent purchaser would take into account at the date of resumption that the foreshadowed
southern extension of Bermuda Street through Lot 176 would generate requirements from the owner of Lot 176, such as the design and documentation of the southern extension road and service road and the temporary access road and the value of Lot 176 would be diminished accordingly.
[88] In relation to the engineering costs, the claimant takes issue with the learned Member’s reference to the claimant’s responsibility to satisfy the respondent that any future development on Lot 176 would not impact the future sub arterial road, on the basis that the learned Member did not follow the Pointe Gourde principle which would result in the assumption being made in the before situation that the respondent would have had no requirement for a sub arterial road across Lot 176.
In relation to the engineering costs, the respondent relies on the learned Member’s findings that those costs were not reasonably attributable to the resumption of Lot 177, but were costs associated with the normal development of Lot 176. It is submitted by the respondent that there was cogent and probative evidence to support the learned Member’s findings on this aspect and those findings should not be disturbed.
[90] For the expenditure on engineering costs for the design and documentation of the southern extension and service road to be injurious affection, the expenditure must have been caused by the resumption of Lot 177 or the design and construction of the Andrews interchange which foreshadowed the southern extension. The question of causation is a matter of fact. Although the learned Member did not articulate the issue in terms of whether the engineering costs were caused by the resumption and what that foreshadowed by way of need for the southern extension or the development of Lot 176, the learned Member’s findings based on extensive evidence attributed those costs to being a consequence of the development of Lot 176.
[91] The claimant did not attempt to show that there was no evidence to support that conclusion of the learned Member. In fact, it is apparent that the evidence does support the conclusion of the learned Member that those engineering costs associated with the design and documentation for the southern extension and the service road were caused, as a result of the anticipated development of Lot 176. There is therefore no basis for interfering with the learned Member’s findings in respect of the engineering costs. The claimant cannot succeed on its ground of appeal 3.
[92] The respondent’s claims in respect of the costs of the temporary access road can be disposed of on the same basis. There was probative and cogent evidence to support the learned Member’s findings of fact that the temporary access road was a
strategic marketing decision of the claimant to benefit the Old Burleigh Town Estate. That precludes a finding that those costs were caused by the resumption of Lot 177 (which was an express finding of the learned Member) or the foreshadowed southern extension, as a result of the design and construction of the Andrews interchange. The claimant has not shown that the learned Member’s finding as to the cause of that expenditure was not supported by the evidence. Ground 4 of the claimant’s appeal must also fail.
Respondent’s grounds of appeal 5 and 6
As that part of the learned Member’s decision which is the subject of the respondent’s grounds of appeal 5 and 6 may also raise aspects of injurious affection which could overlap with the finding of injurious affection on which we are inviting the parties to make further submissions, we will defer dealing with the respondent’s grounds of appeal 5 and 6 until the parties have responded to that invitation to make further submissions.
Costs of hearing in the Land Court
[94] There is also an appeal by the claimant against the order for costs of the hearing in the Land Court which was made by the learned Member on 15 May 2001. In the reasons published on that date the learned Member stated:
"(45) … In the current matter I believe that the actual quantum of the amount determined is a relevant issue for awarding costs under s.27(2) of the Acquisition of Land Act 1967, where there were no special circumstances to dictate otherwise.
(46) On the evidence supplied, and balancing the outcomes and the behaviour of the parties, I am not persuaded that the respondent is not entitled to the normal rule that costs should follow the event. As the final amount ordered is nearer to the amount finally led by the respondent than that submitted by the claimant, I order that the claimant pay to the respondent the costs of and incidental to the hearing and determination of the claim for compensation, the amount of such costs to be ascertained and fixed by the Registrar of the Supreme Court in Brisbane, pursuant to s.34(5) of the Land Court Act 2000."
[95] The claimant has appealed on a number of grounds including that the decision on costs was manifestly in error, the learned Member gave too much weight to the amount of compensation determined in all of the circumstances and the learned Member erred in considering that the normal rule that costs follow the event was a rule from which he needed to be persuaded.
[96] The learned Member made findings that the claim “was not greatly exaggerated, as the principles involved in the matter, and the way it was argued, and
not just the amount involved, are the more significant determining features for consideration” and that each of the claimant and the respondent had acted reasonably in the matter.
The learned Member referred to the general principles governing the awarding of costs under s 27 of the Act which were identified by the Land Appeal Court in Yalgan Investments Pty Ltd v Albert Shire Council (1997) 17 QLCR 401, 406-408 and set out the substance of the principles including those found in paras (j) and (k) at 408 of Yalgan which are:
"(j)Section 27(2) of the Acquisition of Land Act 1967 should not be regarded as a legislative suggestion that, where the claim is substantially more than the amount awarded, and the amount put in evidence by the constructing authority is not substantially less than the amount awarded, the Court should not merely refrain from awarding any costs to the claimant but should award costs to the authority (Moyses at p. 274).
(k)Where the Land Court is considering whether it should award costs to a constructing authority, it could be wrong to have regard merely to the amounts of the claim and of the award and of the value put in evidence by the authority. Usually it would be more relevant to enquire whether the conduct of the claimant (such as, for example, making an exorbitant claim) has been such as to force the authority, unreasonably and unnecessarily, into litigation (Moyses at p. 274) or whether the claimant has pursued a vexatious, dishonest or grossly exaggerated claim or presented his case in such a way as to impose unnecessary burdens on the constructing authority or the Court (Banno at p. 53)."
[98] In the context of this matter, where the learned Member in para 46 of his reasons in respect of the application for costs referred to “the normal rule that costs should follow the event”, he could be taken to be referring only to the event that the compensation had been determined at an amount nearer to that put in evidence by the respondent than the claimant. To treat that as the starting point for the exercise of the discretion in relation to costs is not reconcilable with the above principles from Yalgan.
[99] When the amount of compensation as determined is nearer to the amount of the valuation finally put in evidence by the constructing authority, than the amount of compensation finally claimed by a claimant, the discretion which is required to be exercised under s 27(2) of the Act is whether or not costs should be awarded to the constructing authority. There is no “normal rule” in this context that costs should follow the event.
[100] There was therefore an error in principle in the learned Member’s considering the issue of costs by reference to the so-called normal rule.
[101] It will be appropriate for the issue of costs of the hearing in the Land Court to be determined, when it is determined whether the substantive appeal has resulted in any alteration to the amount of compensation.
Order
As we are inviting further submissions in the manner indicated in these reasons, it is not appropriate to make any orders at this stage disposing of any of the substantive aspects of the appeal.
[103] We therefore order that the hearing of the appeals be adjourned to a date to be fixed.
(Mullins J) JUSTICE OF THE SUPREME COURT
(RP Scott) MEMBER OF THE LAND COURT
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