Commissioner for Railways v. Buckler
[1994] QCA 323
•2/09/1994
| IN THE COURT OF APPEAL | [1994] QCA 323 |
| SUPREME COURT OF QUEENSLAND |
Appeal No. 18 of 1994
Brisbane
[Commissioner for Railways v. Buckler]
| Before | The President Pincus J.A. McPherson J.A. |
| BETWEEN |
THE COMMISSIONER FOR RAILWAYS
Appellant
AND
PATRICK BUCKLER and PATRICIA DAWN BUCKLER
Respondents
REASONS FOR JUDGMENT - THE PRESIDENT
Judgment delivered the 2nd day of September 1994
I have read the reasons for judgment of McPherson JA. and Pincus JA., and need not repeat the circumstances giving rise to this appeal.
The compensation to which a person whose land is taken under the Acquisition of Land Act, 1967 by a constructing authority is entitled is (i) the value of [the] land taken (ss.20(1)), plus any damage caused by (ii) the severing of the land taken from other land of the claimant (ss.20(1)(a)) and (iii) the exercise of any statutory power by the constructing authority otherwise injuriously affecting such other land, minus (iv) 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 (subsection 20(3)). "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": subsection 20(4).
Subsection 19(1) obliges a claimant for compensation to lodge a written claim, including:
"(d) an itemised statement of the claim, showing the
nature and particulars of each item and the amount
claimed in respect thereof;
(e) the total amount of compensation claimed."
There is no statutory obligation upon the constructing
authority to respond, but it ordinarily does so, as is recognized by some sections; for example, subsection 23(3)(b) envisages that a constructing authority will have made an "estimate of the amount of compensation payable to the claimant", and subsection 24(6) provides that, in certain circumstances, the constructing authority may file in the Land Court "a document containing or accompanied by all of the particulars required to be contained in or to accompany the claim so far as those particulars are known to it but, in relation to [subsection 19(1)] paragraphs (d) and (e), stating amounts which it is willing to pay."
The jurisdiction given to the Land Court by subsection 26(1) is "to hear and determine all matters relating to compensation under this Act", and, by subsection 27(1), costs are generally in the Court's discretion.
For present purposes, only subsection 27(2) is material. For the first time, without explanation of what the "valuation" of which it speaks refers to, that subsection requires a comparison between, on the one hand, "the amount of compensation ... determined" and "the amount finally claimed by the claimant in the proceedings" and, on the other hand, "the amount of compensation ... determined" and "the amount of the valuation finally put in evidence by the constructing authority". The dispute in the present case depends upon what the "valuation" is intended to refer to.
In my opinion, the "valuation" can only sensibly mean the constructing authority's "valuation" of the compensation to which, in its view, the claimant is entitled.
In this matter, that "valuation" was nil, which was closer than "the amount finally claimed by the claimant in the proceedings", $3.2 million, to "the amount of compensation determined, $1,474,250.00".
I agree with the orders proposed by the other members
of the Court.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 18 of 1994.
Brisbane
[Commissioner for Railways v. Buckler]
BETWEEN:
THE COMMISSIONER FOR RAILWAYS
Appellant
AND:
PATRICK BUCKLER and PATRICIA
DAWN BUCKLER
Respondents
____________________________________________________________
_____
The President
Pincus J.A.McPherson J.A.
____________________________________________________________
_____
Judgment delivered 02/09/1994
Separate reasons for judgment of each member of the Court,
all concurring as to the orders to be made.
____________________________________________________________
_____
APPEAL ALLOWED. ORDERS FOR COSTS MADE IN FAVOUR OF THE
RESPONDENTS IN THE LAND COURT ON 7 APRIL 1993 AND IN THE
LAND APPEAL COURT ON 15 DECEMBER 1993 SET ASIDE.
RESPONDENTS TO PAY THE COSTS OF THE APPELLANT IN THIS COURT
AND IN THE LAND APPEAL COURT.
____________________________________________________________
_____
CATCHWORDS: RESUMPTION AND ACQUISITION OF LAND - claim for costs in Land Court - compensation assessed at $1.4M - respondents had claimed $3.2M - appellants valued remaining land at $2M more than land worth before resumption - question whether amount of compensation closer to amount finally claimed by claimant in proceedings than amount of valuation finally put in evidence by constructing authority, Section 27(2) Acquisition of Land Act 1967.
STATUTORY INTERPRETATION - "amount of valuation" - s. 27(2) Acquisition of Land Act.
| Counsel: | Mr J Griffin Q.C. with him Mr R Jones for the appellant. Mr P Lyons Q.C. with him Mr R Needham for the respondents. |
| Solicitors: | Crown Solicitor for the appellant. Primrose Couper Cronin Rudkin for the respondents. |
| Date of hearing: | 19 August 1994. |
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 18 of 1994.
Brisbane
[Commissioner for Railways v. Buckler]
| Before | The President Pincus J.A. McPherson J.A. |
| BETWEEN: |
THE COMMISSIONER FOR RAILWAYS
Appellant
AND:
PATRICK BUCKLER and PATRICIA
DAWN BUCKLER
Respondents
REASONS FOR JUDGMENT - PINCUS J.A.
Judgment delivered 02/09/1994
This appeal by the Commissioner for Railways from the Land Appeal Court concerns the construction of s. 27(2) of the Acquisition of Land Act 1967 ("the Act"), which deals with the exercise of the Land Court's power to award costs when compensation claims are determined. When land is taken by proclamation made under the Act, it vests in the Crown or in the constructing authority under s. 12(1)(a)(i); the estate or interest of every person entitled to the whole or part of the land acquired is converted into a right to claim compensation under the Act: s. 12(5). Part 4 of the Act deals with such claims for compensation: s. 18(1). Under s. 20, in assessing compensation, regard must be had not only to the value of the land, but to other factors, including damage caused by severance (s. 20(1)(a)) and enhancement of the value of adjoining land by the carrying out of the works or purpose for which the land is taken: s. 20(3). Section 20(4) says:
"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".
Section 24 empowers the Land Court to hear and determine the matter of the amount of compensation; see also s. 26(1). Section 27 reads, so far as relevant, as follows:
"(1) Subject to this section, the costs of and incidental to the hearing and determination by the Land Court of a claim for compensation under this Act shall be in the discretion of that court.
(2) If the amount of compensation as determined is the amount finally claimed by the claimant in the proceedings or is nearer to 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".
Here, land was resumed for railway purposes, including the building of a railway station; the court was told that the question of the extent of enhancement of value of the residue of the land left after effecting the resumption arose particularly because it was suggested that the presence of the railway station would add value to that residue; 13.45 ha. were taken, leaving 99.43 ha. in the respondent's parcel. The claim for compensation made was $3.2M, arrived at by deducting from the value of the parcel before resumption ($12.4M) the value of the reduced parcel ($9.2M). The appellant's valuer prepared a valuation which included a summary as follows.
"The aforementioned "before" and "after"
resumption exercises have resulted in:
Before resumption: $8.0 million
After resumption: $10 millionCompensation is assessed at nil."
The Land Court fixed the amount of compensation at
$1,474,250.
It will be noticed that the method adopted in these valuations did not ascribe any specific value to the land taken. The appellant's valuer concluded that the residue was, taking enhancement into account, worth more than the whole original parcel. That did not mean that the land taken was worthless, but rather that no compensation should be paid for taking it, because its value was more than offset by the enhancement of the value of what was not taken.
On application made by the respondents, the Land Court ordered that the appellant pay the claimants' costs of the Land Court proceedings, with a certain exception which requires no discussion; that decision was affirmed in the Land Appeal Court. Because the appellant's valuer's figure of compensation, nil, is closer than the respondents' figure ($3.2M) to the compensation awarded ($1,474,250) the appellant says the Court had no power to award costs against it. The appellant would have the Court compare the compensation claimed with the conceded entitlement to compensation, in applying s. 27.
The central question is the meaning of the word "valuation" in s. 27(2) of the Act, quoted above. What happened in the present case and what ordinarily happens in matters of this sort is that, as the Land Appeal Court said of the valuations presented to the Land Court:
"To the extent that either report referred to the value of land, it did so only in the context of the making of a before and after assessment of compensation".
The argument presented for the appellant is that a "before and after assessment of compensation" is a "valuation" mentioned in s. 27(2) of the Act.
The difficulty about that contention is principally that, earlier in the same subsection, there is reference to the "amount finally claimed by the claimant"; if the legislature had intended to refer, by using the expression "the amount of the valuation", to the amount of compensation contended for by the constructing authority, one might have expected different language to be used.
The problem created, however, if one does not give the expression "the amount of the valuation" the meaning just mentioned is that it is not easy to suggest any other construction which makes practical sense. One possibility, at least in theory, is to read s. 27(2) as requiring a comparison between the amount of compensation finally claimed by the claimant, on the one hand, and the constructing authority valuer's valuation of the land taken, on the other. But where there are substantial factors in the assessment of compensation other than the value of the land taken, such as damage by severance, or enhancement, the two are not comparable and the comparison may become almost absurd. Such a construction may enable the Court to order the claimant to pay costs, even where its claim is much closer than the resuming authority's figure is to the figure awarded.
It was held at first instance, in effect, that one should compare with the amount claimed "the valuation put before the Court which results in an enhancement factor of $2M or as used in argument before the court 'minus $2M'...".
In the Land Appeal Court, the suggestion that "the amount of the valuation" should be taken to refer to the value of the land taken was rejected, in substance for the reason I have given. The reasons of the Land Appeal Court included the following:
" The plain fact is that the valuation and report of the appellants' valuer on his before and after method of assessment under s. 20 of the Act did not value the resumed land at nil. What it did do was value the balance of the land retained by the claimants at $10 million. It was on the basis of this land valuation that compensation was assessed at nil -having regard to the "before" valuation adopted by the valuer in the amount of $8 million. On any view the amount of the valuation finally put in evidence on behalf of the constructing authority was a "valuation" of the "betterment" resulting to the claimants from the resumption in the amount of $2 million to meet the claimants' claim for compensation for the detriment resulting from the resumption in the amount of $3,424,250".
The same theme was taken up again later:
" This Court takes the view that "the valuation" of the appellant's valuer was within the meaning of s. 27(2) a valuation of the betterment or enhancement of the value of the balance of the respondents' land after resumption in the amount of $2 million. It was not a valuation of the land resumed at a nil value. To construe the valuation relied upon by the appellant as one quantifying the enhancement of the value of the respondents' remaining land by reason of the use of the resumed land for the purpose for which it was acquired in the sum of $2 million, is not in our view to regard it as "asserting a negative $2 million value" as contended for the appellant; rather it is to regard it as asserting a valuation of the respondents' remaining land relevant to the assessment of compensation payable by the appellant in respect of the acquisition of the land resumed". (emphasis added)
That is, the Land Appeal Court concluded that the only relevant valuation put in on the appellant's side was a valuation of the enhancement, namely $2M. It has to be said that this view gives rise to an oddity: the amount of compensation assessed by the court, namely $1,474,250, is closer to $2M than to the amount claimed by the respondents, namely $3.2M. One should also note that it is not accurate to describe the figure of $2M deducible from the constructing authority's valuation as being a valuation of the betterment or enhancement of the value of the balance of the respondents' land. In truth, the constructing authority's valuer put no figure on that, not even implicitly. The sum of $2M corresponds to the difference between the value of the land taken and the enhancement or betterment of the residue. That sum is not the value of any possibly relevant entity - neither the value of the claim for compensation, nor that of the land resumed, nor even that of the enhancement of the value of the residue. It has to be said, also, that it is not possible to treat the $2M as in any sense "asserting a valuation of the respondents' remaining land".
It was argued in effect that the appellant's contention cannot be accepted, because the amount of compensation put forward by its valuer is not, in this particular case, "the amount of the valuation". One answer is that the valuers' figures, on each side, were arrived at by processes of valuation - i.e., valuing two parcels of land, calculating the difference, and applying s. 20(4) of the Act, where necessary. Another answer is that what is in issue is the value of the right to claim compensation into which, under s. 12(1)(a)(i) of the Act, the estate or interest acquired is converted. In s. 20(2) of the Act one finds:
"Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken..." (emphasis added)
This appears to treat the amount of compensation as a matter of valuation.
It was also contended on behalf of the respondents that the "amount of the valuation" in the present case is minus $2M, as counsel put it, the "combined effect of the four elements including enhancement as well as the value of the land". But minus $2M is not the "amount of the valuation" of any land, or of the claim; it is, in effect, the amount which would be arrived at in valuing the claim in accordance with the Act, if the Act did not contain s. 20(4).
Although it involves a slight straining of language, the expression "the amount of the valuation" must be read as a reference to the valuation of the right to claim compensation, created by s. 12(5) of the Act.
The appeal must therefore be allowed, and the order for costs made in favour of the respondents in the Land Court as well as the order made in their favour in the Land Appeal Court set aside. It will be ordered that the respondents pay the costs of the appellant in this Court as well as its costs in the Land Appeal Court.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 18 of 1994
Brisbane
| Before | Fitzgerald P. Pincus J.A. McPherson J.A. |
[Commissioner for Railways v. Buckler]
BETWEEN
THE COMMISSIONER FOR RAILWAYS Appellant
- and -
PATRICK BUCKLER and
PATRICIA DAWN BUCKLER Respondents
REASONS FOR JUDGMENT - McPHERSON J.A.
Judgment delivered the Second day of September 1994
In ordinary legal proceedings in the courts the general rule is that costs follow the event. To apply that rule in an unqualified way in compensation cases would in practice enable the claimant to contest the amount of compensation with more or less complete impunity as to costs. It is rare for no compensation at all to be awarded in such cases.
Various devices have been tried with a view to encouraging early settlement and discouraging exorbitant claims in compensation cases. The method adopted in s.23(7) of the Public Works Resumption Act 1906 was to limit the general discretion of the Land Court as to costs by making it subject to a rule in effect that costs, if any, were to be awarded to the constructing authority unless the amount of compensation finally determined by the Court was the amount claimed by the claimant or was nearer to it than to the amount offered by the authority, in which case costs, if any, were to be awarded to the claimant.
Section 23(7) was introduced into the Act of 1906 by an
amendment (15 Geo. 6 No. 11, s.36) to the Land Act in 1951.
The formula was retained when a new s.23(7) was substituted
in 1954 by 4 Eliz. 2 No. 48, s.8(iii). At that time the
legislation seems to have contemplated that an offer would
ordinarily be made by the constructing authority within a
stipulated time after receiving the claimant's claim and
particulars, which themselves had to be furnished within a
limited period. The only difference made by the amendment
in 1954 was that the authority's offer could be used as
evidence of the amount of that offer irrespective of when
the offer had been made. The result no doubt was to give
the constructing authority an advantage not shared by the
claimant. Obstinately refusing until the last moment to
agree on reasonable compensation is not something that is
necessarily confined to claimants.
Section 27(2) of the Acquisition of Land Act 1967 is
thus the third in this line of attempts to resolve the
question by means of a statutory provision governing costs.
It preserves the device used in the earlier two provisions
of treating nearness to the amount awarded as decisive, but
does so with two changes. One is that, in deciding the
question, it is not the first amount but the "final" amount
claimed by the claimant that is relevant; the other is that
it is not the amount of any offer made by the constructing
authority but "the amount of the valuation finally put in
evidence by the constructing authority" that matters.
Stated in general terms, what the Court is now required to do in fixing the incidence of costs under this rule is look to the final positions taken up by the parties. In the case of the claimant, it is the quantum of compensation last claimed. Theoretically at least, its amount might not be known until the final address of counsel for the claimant.
In practice, however, s.24(2A) furnishes a disincentive against conduct like that. It does so by restricting the right to amend a claim once it has been filed in accordance with s.24(2A) of the Act. Thereafter an amendment may be allowed; but on terms including payment of costs: see s.24(3).
On the other hand, there seems to be no comparable restriction preventing the constructing authority from deferring disclosure of its final position until a late stage of the proceedings. It will be discoverable only from "the amount of the valuation finally put in evidence by the constructing authority", which means that it cannot with confidence be known what the amount of it is until the constructing authority closes its case.
Why s.27(2) uses the expression "amount of the valuation" is not clear. The word "valuation" is not used anywhere else in the Act in a way that throws light on its meaning. The heading to s.20 is "assessment of compensation". In addition to the amount claimed, one would expect the amount of the assessment put forward by the constructing authority to be the other relevant factor in deciding whether it, or the amount of the claim, was nearer to the sum awarded. Section 20(2) states the primary principle, which is that compensation is to be assessed according to the value of the estate or interest taken. In assessing the compensation to be paid, there must under s.20(1) be added the damage if any caused by severance from and injurious affection to other land of the claimant. From that total there must by s.20(3) then be deducted any enhancement of the value of the claimant's interest in any land adjoining the land taken or severed by the carrying out of the works or purpose for which that land is taken.
In arriving at values in the present case the valuers acting respectively for the appellant constructing authority and the respondent claimants did not adhere literally to the scheme of s.20. What they did was to follow the conventional course of valuing the whole of the claimants' holding of 112.879 ha. before and after resumption of the particular portion (which was 13.45 ha. in area) that was taken. The respective values arrived at were as follows:
Claimants Authority
| Value of parcel before resumption | $12.4m | 8m |
| Value of parcel (reduced) after |
resumption $ 9.2m 10m $ 3.2m Nil
The amount of compensation assessed by the Land Court was $1,474,250, which is closer to Nil than it is to $3.2m. Accordingly it was submitted by the constructing authority (but not accepted below by the Land Court or the Land Appeal Court) that it was the amount of its nil valuation, and not the amount of the claimant's claim, that was nearer to the amount of the compensation awarded. The claimants, on the other hand, contended that the true position was that the amount of the valuation finally put in evidence by the constructing authority was (although it did not specifically say so) really minus $2 million, with the consequence that the amount claimed of $3.2 million was nearer to the amount awarded of $1,474,250 than was the amount of the constructing authority's valuation.
In arriving at his nil result, the valuer for the constructing authority may have been relying at least in part on the provisions of s.20(4) of the Act. It provides that in no case is s.20(3) to operate "so as to require any payment to be made by the claimant in consideration of" the enhancement that is to be taken into consideration pursuant to that subsection. Once the valuer arrived at the conclusion that the process of valuing, and then combining, the amounts of each of the items mentioned in sub-ss. (1), (2), and (3) of s.20 would produce a negative or minus quantity, he evidently went no further but simply ruled off the balance at Nil. Strictly speaking, in order to achieve this, it was not necessary for him to rely on s.20(4) at all. Section 20(3) requires no more than that, in assessing the compensation to be paid, the enhancement is to be taken into consideration "by way of set off or abatement". The process of setting off or abating can never produce a negative or minus figure. Unlike a counterclaim, a set off or abatement can reduce the amount of the claim to nil but not go beyond it. The result reached by the valuer for the constructing authority would, given his premises, thus have been the same in the present case under s.20(3) even without having to resort to the provisions of s.20(4).
Once these conclusions are reached, I do not think it can be doubted that what the constructing authority valuer was really doing was valuing the claim for compensation rather than valuing the land taken and the consequential impact of the resumption on other land of the claimant.
That is, in the end, what both s.20(1) and s.20(3) require.
Each of those subsections opens with the expression "In
assessing the compensation to be paid ..." . It may be said
that, strictly speaking, it is no part of the valuer's
function to arrive at an opinion about the amount that is to
be paid by way of compensation. Under s.26(1) of the Act it
is the function of the Court to assess the compensation
payable in accordance with s.20, and an expert valuer may
not usurp that function. But to insist rigidly on that
distinction in a case like the present seems artificial. No
one objected to the constructing authority's valuation
report because it said its purpose was "to assess the amount
of compensation payable on account of the resumption ...".
The real contest in the present case was over the money
value of the land taken and the extent of the enhancement to
the other or adjoining land of the claimant that would
result from carrying out the works or purpose for which the
subject land was taken. Once it was plain from the
constructing authority's valuation that, on the values
ascribed to the various components identified in s.20, the
result would be nil, there was no need for the valuation to
state a negative or minus amount in order to show that no
compensation was payable.
My conclusion is that the expression "valuation" in s.27(2) refers to the constructing authority's assessment of the compensation payable, which in the ordinary way will be contained in a valuation report put in evidence in the proceedings. Here the amount payable was assessed in the valuation finally put in evidence as Nil. The amount is nearer to the amount awarded of $1,474,250 than is the amount $3.2 million claimed. On that footing, s.27(2) operated in this case to authorise an award of costs in favour of the constructing authority but not the claimant in this case.
It follows in my opinion that the appeal should be allowed with costs and the decisions of the Land Appeal Court and of the Land Court should be reversed. The respondents should be ordered to pay the appellant's costs of the appeal to the Land Appeal Court. No order is sought with respect to the costs of proceedings in the Land Court.
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