Kabale Holdings Pty Ltd v Director General, Department of Transport

[1997] QLAC 205

IN THE LAND APPEAL COURT

HELD AT BRISBANE

Re:     Appeals against decisions of the Land Court -
  Determinations of compensation payable and costs -
  Parish of Coomera, County of Ward
  (A94-34)

BETWEEN:

KABALE HOLDINGS PTY LTD

Appellant

AND

DIRECTOR GENERAL, DEPARTMENT OF TRANSPORT

Respondent

JUDGMENT

Delivered at Brisbane this Fifteenth day of October 1997

Introduction
The claimant, Kabale Holdings Pty Ltd, appeals from two decisions of the Land Court constituted by the learned former President. In a decision dated 11 August 1995, the President determined the claim for compensation in relation to the resumption of land being part of the balance of Lot 3 on Registered Plan 209833, Certificate of Title Volume 6999 Folio 221 in the County of Ward, Parish of Coomera, of which the claimant was the registered proprietor of an estate in fee simple. Compensation of $1,539,878.00 together with interest was awarded. In a second decision dated 1 November 1995, the President ordered that the claimant pay 80 per cent. of the costs of the respondent constructing authority of and incidental to the hearing and determination of the claim. The appeals, which were lodged pursuant to s. 26 of the Acquisition of Land Act 1967, were heard together.

Background
The resumed land was the subject of an agreement dated 30 August 1993 between the claimant and the constructing authority. That agreement was made under s. 15 of the Acquisition of Land Act. In it, the constructing authority agreed that, should he take the land, he would bear certain specified expenses and effect any necessary correction of title to the claimant’s remaining land as a result of the resumption. The claimant agreed that it would not offer any objection to his taking the land. No amount of compensation was agreed upon.

A proclamation taking the land was published in the Queensland Government Gazette on 1 October 1993 (Vol. CCCIV, no. 22, p. 355). Before the land taken was surveyed it was thought to be approximately 9.05 hectares but, after survey, was found to be 9.02 hectares.

The property affected by the resumption was part of an aggregation comprising in all some 175 hectares purchased by the claimant in 1988: Lot 3 RP 209833 (73.52 hectares), Lot 5 RP 209833 (1.471 hectares), Lot 6 RP 209833 (4.056 hectares) and Lot 5 RP 188582 (96.03 hectares).

Lot 5 RP 188582 adjoins the eastern boundary of Lot 3. Lot 5 RP 209833 and Lot 6 form a strip of land running along the southern boundaries of those two as well as of an another estate which is situated to the west of Lot 3 and which is known as “River Downs”. Lot 65 RP 188582 adjoins the eastern boundary of Lot 5 RP 188582. It enjoys an access easement (registered as Easement A on RP 17263) over Lot 5 RP 209833 and Lot 6.

The land was taken under the provisions of the Acquisition of Land Act and of the Transport Infrastructure (Roads) Act 1991. It is a strip running along the western boundary of Lot 3 and adjoining a railway reserve. The railway reserve had been acquired from the former owners of the aggregation in 1986 for the purposes of the Beenleigh-to-Robina railway. At the date of the resumption on 1 October 1993, work in connexion with the construction of the railway was being carried out on the railway reserve where it adjoins the aggregation.

The land was taken so that it could become part of a road corridor called the Eastern Transport Corridor (ETC).

At the date of resumption, the aggregation was zoned Residential A and was partly developed as a residential subdivision known as Monterey Keys. Of the lots that had been developed, some had been sold and others were for sale. Other parts of the aggregation were in the course of development, and the balance of the property had yet to be developed.

The original claim for compensation was amended during the hearing. The claim as finally formulated was, as the President recorded on 1 November 1995, for a total sum of $10,193,367.44. That included $2,615,250.00 for the land, made up of $1,250,000.00 for loss of the land “due to ETC including severance”, $1,201,650.00 for injurious affection, and $163,600.00 for disturbance (loss of sale price on lots sold). The remainder of the claim was $7,578,117.44 for disturbance, formulated as follows:

Revised bridge design, foot bridge design and
construction $130,715.55
Intersection redesign and construction 249,629.48
Fees thrown away for survey and subdivision redesign 105,837.14
Costs to prepare compensation claim 81,086.00
Damages for delay 6,872,694.15
Special damages 138,155.12
$7,578,117.44

The President determined that compensation “for land, severance and injurious affection” should be assessed at $1,465,000.00: $1,205,000.00 we shall explain later, together with $260,000.00 for lots owned by the claimant at the date of resumption and not sold. The only claim for disturbance to succeed was for the costs of preparing the compensation claim, assessed at $74,878.00. All other items of claim failed.

As the constructing authority had, on 17 December 1993, made an advance of $1,000,000.00 against compensation, the President ordered that interest at the rate of 10 per cent. per annum be paid on that amount from and including the date of resumption to and including 16 December 1993. From 17 December 1993, interest was to be paid at the same rate on the balance of $539,878.00 to and including the day immediately preceding the day the balance was paid.

The claimant’s grounds of appeal arise from the President’s determination of the issues of injurious affection, severance, disturbance and costs.

Injurious affection
The amount of compensation was determined by the President using the “before and after” method of valuation. Injurious affection was relevant to each part of the calculation. In determining the value of the land before resumption the President considered the injurious effect of the Beenleigh-to-Robina railway on land near the railway land. In determining the value of the retained land after resumption, the President considered the injurious effect of the road corridor.

Various factors were considered by the President when determining injurious affection before the resumption. Valuation evidence was given by Mr Laurence Hamilton, a valuer called by the constructing authority, and by Mr Paul Murphy, a valuer called by the claimant. The President accepted the evidence of Mr Hamilton that, but for the resumption, the railway corridor would have resulted in a loss of “visual amenity” (because parts of the railway line would be seen), noise (from the wheels of passing trains), and vibration to those lots “in reasonable proximity” to it. Messrs Hamilton and Murphy agreed that the effects on values would not have extended further than 60 metres from the boundary of the rail reserve. The President also referred to a passage in Mr Hamilton’s report (Exhibit 5) in which he said that consideration should be given in valuing the land before the resumption to the following matters:

“4      a 4 metre wide easement would be located along the rail corridor frontage        4       approximately 50% of the land had to be filled
4       the elevated land was scarred by excavation works completed
4       two gullies traverse the site” (p. 11)

Mr Hamilton also wrote:

“Part of this area of land prior to the road resumption was affected by the proposed Beenleigh to Robina railway. We have limited the impact of the railway, easement and scarring of part of the land for the purposes of simplicity to a band approximately 60 metres wide. This equates to an area of approximately 8 hectares. We have adopted a diminution value for this component of 15%.” (p. 20)

The President accepted the figures relating to the area of land affected and the extent of the diminution in value.

In determining the value of the retained land in the after-resumption situation, the President concluded that compensation for injurious affection arising from the road corridor was confined to noise and visual impact and that the limit applied by Mr Hamilton was reasonable. Mr Hamilton adopted a ten per cent. diminution factor for all subdivided land within 140 metres of the boundary of the road corridor, having an area of about 10.64 hectares. That figure reflected a reduction in the effect of the road corridor the further land was away from it. Mr Hamilton calculated a reduction in value of 20 per cent. for 25 lots adjoining, 12 per cent. for six lots one removed, and five per cent. for 50 lots reasonably close to that boundary.

In his reasons for decision the President noted that, although the estate might ultimately comprise 1,168 home sites and be developed in some 18 stages over seven to ten years, the valuers preferred to consider the effects of the road corridor directly in relation to lots in the area covered by stages 1 to 10 and to regard the eastern section of the estate as englobo Residential A land. The President adopted Mr Hamilton’s valuation of those western parcels of land unaffected by the railway or the road corridor at $135,000.00 per hectare.

The resulting figures for the relevant land before and after resumption were as follows:

Before resumption:
45.97 ha @ $135,000.00/ha  $6,205,950.00
8 ha (rail affected) @ $135,000.00/ha less
15% diminution in value  $   918,000.00
  $7,123,950.00

After resumption:
34.31 ha @ $135,000.00/ha  $4,631,850.00
10.64 ha @ $121,000.00/ha (rounded down)  $1,287,440.00
  $5,919,290.00

$7,123,950.00 less $5,919,290.00 comes to $1,204,660.00, which the President rounded off to $1,205,000.00.

The claimant’s grounds of appeal in relation to injurious affection are, in summary, that the President erred in:
(a)assessing injurious affection from the effects of the railway line in the pre-resumption situation at 15 per cent. over a depth of 60 metres; and
(b)assessing injurious affection from the proposed road corridor at ten per cent. over a depth of 140 metres.

The parties concentrated exclusively on the effect of injurious affection on the western parts of the aggregation, namely 53.97 hectares of land in the before-resumption situation and 44.95 hectares after resumption. Consequently, it is not necessary to include the larger area of englobo land to the east of that land, comprising primarily Lot 5 RP 188582, at either stage of the calculations .

In the course of arguing the matter before this Court, Mr Needham for the claimant submitted that one way of dealing with this issue would be to allow ten per cent. reduction in value for the effects of the railway line and a 15 per cent. reduction for the effects of the proposed road corridor.

The claimant did not argue against the areas which the President considered to be areas injuriously affected in the before and after situations, but submitted that the percentages adopted by him were against the evidence. Consequently, it is necessary to consider only whether appropriate allowance was made in the before and after resumption situations for injurious affection. It should be noted that Mr Hamilton did not apportion the 15 per cent. between the effect of the railway, easement, and scarring other than to say, in cross-examination that “predominantly” it related to the “impact of the rail and the other factors to a lesser extent”.

To resolve the issue, we must consider primarily the effect of scarring on the land resumed and the relative increases in noise levels likely to follow the railway or road developments, and also the evidence concerning the easement.

Scarring: There was an issue about the extent of scarring of the resumed land in the before-resumption state which was relevant to the assessment of injurious affection arising from the railway resumption.

On behalf of the claimant it was submitted that, although the 15 per cent. reduction in value applied by Mr Hamilton in the before-resumption situation referred to the impact of the railway, easement and scarring of part of the land, the President, correctly, did not allow a diminution in value in the before situation for the easement or any scarring of part of the land. The President, however, had allowed the full 15 per cent. suggested by Mr Hamilton. Mr Gallagher Q.C. for the constructing authority attempted to meet that submission by citing various passages from the reasons for decision which show that the President had, correctly in his submission, taken scarring into account.

This aspect of the appeal raises two issues. First, was it appropriate to take scarring into account? Secondly, did the President take it into account in determining the value of the land?

Section 20(1) of the Acquisition of Land Act provides that, in assessing the compensation to be paid to a dispossessed owner, regard shall in every case be had not only to the value of the land taken but also to the damage, if any, caused by either or both of: (a) “the severing of the land taken from other land of the claimant” and (b) “the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land”. As the Land Appeal Court said in Suntown Pty Ltd v. Gold Coast City Council (1979) 6 Q.L.C.R. 196:

“Injurious affection, in the terminology of the [Acquisition of Land] Act, is the type of damage to the retained land which flows from the exercise of any statutory powers by the constructing authority otherwise (i.e. than by severance) injuriously affecting the retained land. The type of damage is related to uses of, or activities on, the resumed land by the constructing authority as a result of the resumption and the consequent depreciation in the value of the retained land.” (pp. 207-8)

Injurious affection may be caused by actual or intended use of the resumed land: D Brown, Land Acquisition, 4th edn (1996), para 3.33, p. 138.

The only relevant scarring could be that caused by work connected with the railway development. Earthworks carried out in connexion with the development by the claimant of the estate land is not relevant to the claim for injurious affection.

The President found that, when developing the estate, the claimant had used the land proposed to be resumed by removing an estimated 29,000 cubic metres of soil. Mr Hamilton, in his report, described the area near the Saltwater Creek frontage as “originally a well elevated ridge” which “was levelled prior to resumption”, it appearing that the material had been used to fill part of the balance of the estate (p. 10). The excavation work had resulted in what Mr Hamilton described as “less attractive and scarred land at the date of resumption” (p. 6).

There was some dispute about whether the claimant continued to take soil from the resumed land after the date of resumption. Mr John Ballantyne, a town planner who was the project manager for the design and development of the Monterey Keys project, said that earth fill was removed before, but not after, October 1993.

Mr Hamilton inspected the land in late September or early October 1993 and observed that the elevated land, particularly the northern part, “was badly scarred by earthmoving operations”. He relied, however, on Mr Robert Higgins’s evidence about the dates on which the material was removed. Mr Higgins, an engineer employed by the constructing authority, inspected the resumed land on 5 October 1993 and observed soil being removed from that land and being deposited on the remaining land. After workers on site had been spoken to and a letter was written to the claimant’s solicitors, that work ceased. There was photographic and oral evidence that soil was removed from the resumed land between 1 and 5 October 1993. Although some earth fill may have been removed from the resumed land between those dates, there is no evidence that that constituted the bulk of the fill relocated to the low lying areas of the balance of the land.

There was also photographic and oral evidence from Mr Higgins to suggest that, as at 1 October 1993, work was also being done on the railway land which resulted in scarring.

It is not necessary in these proceedings to determine the extent of the soil taken between the date of resumption and 5 October 1993. What is relevant is that, although some scarring had occurred in relation to railway works, it is apparent that Mr Hamilton asserted and the President accepted that the resumed land had been scarred by the claimant’s activities in taking substantial volumes of soil for use elsewhere on its land.

There was then evidence of some scarring associated with the railway works and other, more extensive scarring resulting from the claimant’s activities, most of it before the date of resumption. For the purpose of determining the extent of injurious affection to the claimant’s land, however, only the effect of existing and likely scarring from the railway was relevant. The effect of the use by the claimant of soil from the higher parts of what became the resumed land was relevant to a determination of the value of that land but was not relevant for consideration under the heading of injurious affection.

It is not clear from the reasons for decision of the President whether he took account of scarring when assessing the extent of the reduction in the value of the land adjoining the railway land. The President expressly noted Mr Hamilton’s statement that the railway corridor would have resulted in a loss of visual amenity, noise, and vibration to those lots in reasonable proximity to it, and that, in valuing the land before resumption, consideration should be given to inter alia the fact that the elevated land was scarred by works completed. The President noted, however, that Mr Hamilton “made little” of that and other specified factors. That statement may not be the complete expression of the President’s reasoning. Ultimately, we do not have to form a concluded view on the matter. It suffices that it is clear that the President relied on Mr Hamilton’s evidence and that Mr Hamilton gave some weight to the effect of scarring which was unrelated to existing or proposed railway work.

Noise: Mr Needham submitted that the noise and other effects (including dust and fumes) of traffic using the road 24 hours every day would constitute a far more significant detriment for persons on the adjacent land than the noise and other effects of 42 electric trains passing the land at 140 kilometres per hour at regular intervals between 5 a.m. and midnight each day. Consequently, in the claimant’s submission, a lower than 15 per cent. depreciation rate would have been appropriate in relation to land affected by the railway and a higher rate than that adopted in relation to the railway should be adopted for the land affected by the road corridor.

There was, however, evidence to the contrary. Mr Frederik Kamst, an environmental and acoustical consultant who was called by the constructing authority, provided oral and written evidence about expected traffic noise along the road corridor. He relied on information from Queensland Transport that by the year 2006 the road corridor would have an average daily traffic flow of 46,000 vehicles, including ten per cent. heavy vehicles. He referred to 1994 figures showing that about 95.5 per cent. of annual average daily traffic would pass along the road corridor between 6 am and midnight, and that only 7.2 per cent. of the traffic would pass between 10 pm and 6 am. Initial “traffic noise modelling” indicated that the “L10 (18 hour) would exceed 63 dB(A) without any noise ameliorative measures, other than currently existing [October 1994] timber fencing” (Exhibit 7). Mr Kamst said that the intermittent sound of trains passing (with a maximum noise level of 93 dB(A) at 15 metres from the train) would disturb the sleep of people on nearby land more than the background noise of motor vehicle traffic, and, if there were both motor vehicle and train traffic, the noise of the train would be noticeably louder than that of the background motor vehicle traffic noise. Mr Maxwell Winders, an expert called by the claimant, agreed that a train passing at 140 kilometres per hour would probably drown out the noise of road traffic and the train’s noise would be of longer duration than some trucks might be. Furthermore Mr Winders acknowledged that Queensland Rail had no plans to erect noise barriers.

Mr Hamilton explained that the different rates of diminution in the value of land for injurious affection were assessed, in part at least, by reference to the different widths of land affected and to the absence of proposed railside treatment but the “very comprehensive” proposed roadside treatment. In his report Mr Hamilton stated:

“In making a judgement of the level of injurious affection the Valuer was mindful of the following:
·the Department of Transport will provide a comprehensive treatment to the roadway. The treatment will include acoustic fencing along the road verge, adequate tree and scrub planting and earth mounding. Traffic on the motorway and off ramp will not be visible from the estate.

·the Beenleigh-Robina railway line is located in close proximity to the subject land. This line was to carry high speed passenger trains. Little or no treatment was proposed and the moving stock, embankment and overhead power lines would have been visible from the subject land.” (pp. 11-12).

Later in the report he wrote:

“The Department of Transport are committed to providing an effective screen to minimise the impact of the roadway on adjoining lands.
The types of roadside treatments proposed are extensive and are to be applied in their most appropriate form including:
·          landscaped buffer beside roadway
·          earth mounding with vegetation planted above
·          roadside timber screens
Experienced consultants have advised that the proposed works will considerably reduce the impact of the roadway.
Discussions with experienced real estate agents advise that buyer resistance is reduced when the source of noise is out of sight.
The predominant prevailing breezes are from the east thus noise and airborne fumes will generally be blown away from the estate. Comments to this effect have been passed on to the buying public by the marketing agents.
Prior to the construction of the roadway the estate was significantly affected by the presence of the planned Beenleigh-Robina Railway line and railway moving stock, embankment and overhead power lines would have been highly visible as there were no proposals to screen these works.
The public would have become well aware of the presence of the railway due to the construction works commencing in early 1993. These partly completed works would have confirmed as reality the publicity surrounding the line.” (pp. 17-18)

Mr Hamilton gave evidence that the mitigation works and “the broader spectrum of land being considered” in the after-resumption state led to what was, by comparison with land affected by the railway, a reduced rate for injurious affection.

Support for that approach is found in the evidence of Mr Jeffery Humphreys, a planning and environment consultant called by the constructing authority. He said that, before the resumed land was taken, the only proposed protection to the neighbouring land was a safety chain wire fence along the embankments of the railway reserve. Because no noise attenuation or visual barrier was proposed, part of the estate would have been affected visually and by noise from the railway line. In his written report, Mr Humphreys provided information concerning possible increases in noise levels on land immediately adjacent to the railway land and the road corridor land.

The President accepted that by the end of 1990 it was known that buffer works would be included in the road development. His reasons for decision contain a summary of evidence about the types of treatments to be used to attenuate the visual and aural impact of the road. The President concluded that each valuation exercise “possessed difficulties in that in making the comparisons, allowances had to be made for factors other than adjacency or no adjacency to the disturbing feature”. Having heard the expert evidence and inspected the areas, the President concluded that attenuation factors such as cuttings, valleys and buildings etc. are “relevant and real and that a deal of imagination is required in the extrapolation of likely effects upon englobo land proposed for subdivision.”

Easement: It should be noted that Mr Hamilton agreed that what he had described as a four metres wide “easement” alongside the railway land was not an easement (which constituted a blight or was a deleterious factor) but was more properly described as a strip of parkland ten metres wide. He agreed that it was reasonable to think that the loss of that land for development by the claimant would be made up for elsewhere in the estate. Furthermore, he thought it would be fair to take into account the parkland buffer between the notional houses and the railway when determining the percentage diminution in value attributable to injurious affection from the railway.

Having considered the reasoning of the President and the evidence on which he relied, particularly that of Mr Hamilton, we are satisfied that there are proper grounds for reducing the percentage of the diminution in value of the eight hectares of land in the before situation and increasing the percentage of diminution in the value of the 10.64 hectares of land in the after situation.

It is apparent from Mr Hamilton’s evidence that the 15 per cent. diminution on the value of the eight hectares was linked primarily to the detrimental effect of noise from trains passing that land and the visual impact of the railway, but that other factors - including the impact of scarring and the (incorrectly) assumed impact of a narrow easement - were taken into account by him in reaching that figure. We accept that the President did not err in relying on Mr Hamilton’s evidence, so far as it was relevant, to quantify the injurious effects of the railway on the neighbouring land. It was in adopting the full 15 per cent. reduction in value (which included a component for factors the effect of which was overstated) that we conclude the President fell into error. It is of course difficult to decide precisely what the proper allowance should be, but we conclude that there would have been a reduction in value of the eight hectares strip by an average of 12.5 per cent.

We are also satisfied that the impact of noise from the road corridor would have been greater than that it appears allowed by the President because, in our opinion, the hypothetical purchasers of land in the vicinity of the resumed land at the date of resumption would have been less inclined than the President thought to accept that the constructing authority would provide adequate and appropriate noise attenuation treatments. Bearing in mind the evidence about the volume, duration, and frequency of noise from the road corridor, we have concluded that an appropriate reduction in value of the 10.64 hectares of land affected by the road corridor is 12.5 per cent.

The calculations which give effect to our conclusions are as follows:

Before resumption:

45.97 ha @ $135,000.00/ha  $6,205,950.00
8 ha (rail affected) @ $135,000.00/ha less
12.5% diminution in value  $   945,000.00
  $7,150,950.00

After resumption:

34.31 ha @ $135,000.00/ha  $4,631,850.00
10.64 ha (road corridor affected) @ $135,000.00/ha
less 12.5% diminution in value  $1,256,850.00
  $5,888,700.00

$7,150,950.00 less $5,888,700.00 comes to $1,262,250.00, i.e. $57,250.00 more than the amount awarded by the President.

Severance
The claimant argued that the President had erred in not allowing compensation under the heading of severance. In his judgment, the President did not consider the issue of severance separately but considered it together with issues relating to compensation for loss of the land and injurious affection. On our reading of his judgment, the $1,465,000.00 he allowed “for land, severance and injurious affection” was made up entirely of compensation for the taking of the land and injurious affection.

In presenting its claim for compensation for severance, the claimant had relied upon the evidence of Mr Murphy. The President considered his report (Exhibit 4) and workings and expressed his conclusions regarding Mr Murphy’s evidence in the following passage:

“Before proceeding further, I may speak generally to the workings of Mr Murphy. The workings included estimates of development costs with and without the ETC. Costs were shown to be dearer after the resumption than before the resumption. The resumption altered the balance between wet and dry lots. Severance is alleged. However, I can make no firm conclusions on this point for reasons that the number of lots said to be lost varied in evidence between 84 and 96 and whilst the ratio of wet lots to dry lots has been altered, the weighing of the balances would include such factors as the depreciation the rail line would have had upon the lots and their selling prices. The land value obtained by Mr Murphy over the western section of the estate (Stages 1 to 10) seems to have been obtained upon the physical position which would have existed had the resumption taken place immediately before the commencement of the development of the estate. The analysis performed in section 9 [of Exhibit 4] would end in the sum of $1.8 million for loss of land plus severance and injurious affection and by addition thereto the allowance which he contended for in respect of the depreciation of the land contained in the eastern section of the estate. The analysis has not been made in accordance with the facts as they existed at the date of resumption, although it does prove in my opinion that the valuation made by Mr Hamilton is reasonable in the circumstances.”
The President continued by considering the development and sale of Monterey Keys to the date of the hearing and the location of, and impact of the road corridor upon, access roads to the development. Helensvale Road, which runs along the southern boundary of the estate, is the responsibility of the Albert Shire Council (ASC). The President concluded that its location might have been influenced by the road corridor but that any such influence was too remote from the resumption to be a relevant consideration in assessing compensation. He reached the same conclusion in relation to Monterey Keys Drive, which connects Helensvale Road and Oxenford-Southport Road.

Mr Needham submitted that severance damage was caused in this case as a result of the removal from the estate of “a large part of the more elevated and relatively easy and cost effective land for development”. The only way to assess that damage in this case is by reference to the costs of development. Those costs are calculated by means of hypothetical development exercises for before and after resumption. The damage will not be revealed in what a purchaser will pay for a developed lot in the market place.

Mr Murphy undertook such hypothetical development exercises. He had first undertaken a costing of the hypothetical development before the resumption. The cost of that development, Mr Needham submitted, was known and none of the engineering evidence on that aspect had been challenged by the constructing authority before the President. Mr Murphy’s second step had been to prepare a costing of a hypothetical development after the resumption.

Mr Needham submitted that the constructing authority had not challenged the evidence that 87 lots had been lost from the development as a result of the resumption. That figure came from Exhibit 4: see p. 15. (Mr Hamilton calculated the loss at 84 lots, but said that the discrepancy between his assessment and Mr Murphy’s would not affect any of his opinions, one of which was that there had been no severance damage.) The figure of 96 to which the President referred would, Mr Needham continued, have been obtained from an exercise that dealt with the hypothetical development of stages 1 to 18 of the estate from a time some three and a half years before the resumption. It was not relevant to the claim with respect to severance damage, and had never formed any part of the claimant’s case concerning that damage

We do not think, with respect to the President, that there is any substance in the first and second bases for his conclusion concerning severance. As we have related, there was no material disagreement between the valuers as to the number of lots lost, and the second difficulty could no doubt have been overcome by proper analysis of the evidence. The third matter is one, however, that raises a question of principle. There being on the one hand evidence from the constructing authority’s valuer that there was no severance damage the questions then arose as to whether there was any or any sufficiently cogent evidence of such damage from the claimant.

Mr Needham acknowledged that the costs of the entire area within stages 1 to 10 had been taken into account in assessing the “before” valuation. That was so even though some of the lots in those stages had been sold before the resumption. He submitted that it was impossible to isolate the costs separately for those lots which had been sold from those which remained unsold on 1 October 1993.

Assessment of compensation by adopting a “before and after” the resumption valuations is dependent upon identification of the relevant factors in relation to the claimant’s land both before and after the resumption and upon an accurate identification of the effect of the resumption upon the land remaining. Adoption of a hypothetical development method to determine those values does not eliminate the need to undertake that task in the first instance. At the foundation of any determination of the relevant factors will be a determination of the characteristics of the land in which the claimant has an estate or interest both immediately before and immediately after the resumption. That may prove a difficult task as in the case of separating lots that had been sold from those which had not at a particular date but the difficulty of the task does not eliminate the need to undertake it.

If the Court were to accept that it could consider Monterey Keys as it existed at some time before the date of resumption, it would not be adopting a proper approach. Subsection 20(2) of the Acquisition of Land Act requires that compensation be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken. A claimant cannot be said to have an interest or estate in those lots which have been sold to that date. To argue, as Mr Needham did, that their omission is unfair to the respondent is not, even if we were to accept it, to the point.

We have mentioned the President’s finding concerning the removal of an estimated 29,000 cubic metres of soil from the resumed land and Mr Hamilton’s evidence on that subject. In cross-examining Mr Murphy, Mr Gallagher suggested to him that he treated the resumed land for the purposes of his valuation in the before situation at p. 13 of his report (where loss of land is dealt with) as “high elevated, untouched land ready for en globo sale with subsequent sub-division”. Mr Murphy replied, “I have to admit, like, that the aspect that you’re alluding to here, we haven’t directly factored that into our assessment”. It does not appear that Mr Murphy did so indirectly. We should mention that Mr Murphy maintained - without disagreement from the constructing authority - that a high proportion of the resumed land was “relative to all the rest of the land of an elevated nature”. The effects of ignoring the removal of the soil are, however, obvious: any resulting increases or decreases in development costs of the resumed and the retained land will be ignored.

It does not follow that in every case in which part of an owner’s land has been taken and part retained that the value of the retained land will be affected. Proper evidence must be presented to the Court to support a claim for compensation for severance. Without such evidence the requisite findings cannot be made and compensation under this heading cannot be awarded.

In this case, the Court cannot from the evidence of the global development costs for stages 1 to 10 (i.e. including those costs attributable in some measure to sold lots) assess those costs which would have been incurred for the hypothetical development of the land owned by the claimant immediately before the resumption on 1 October 1993. The failure to bring into account the effect of the removal and placement of soil from the resumed land constitutes an additional obstacle of the same kind for the claimant.

Mr Murphy stated that upgrading of Helensvale Road was directly attributable to the road planning in relation to the proposed road corridor. The President’s conclusion on that matter was:

“Helensvale Road is the responsibility of the ASC. It connects with the Pacific Highway at the Helensvale Road or Cades County interchange. It is alleged, and it is reasonable to conclude, that when the connection is made to Boykambil the road will carry a greater density of traffic. In fact, Mr Hamilton seems to be of the opinion that such access will be preferred to the Oxenford-Southport Road. It is contended that the ETC will also have an effect on traffic density on this road. The ETC is said to have been the cause of the relocation and its specifications. Using hindsight to confirm foresight, someone as naive as myself may ask - Would the position with Helensvale Road have ended any differently had the ETC not come into existence? The ETC will not replace the Pacific Highway nor close down the Cades County interchange. It is reasonable to assume that usage of either the Pacific Highway or the ETC will depend upon destinations. I appreciate the reasoning of Mr Hamilton that the ETC will provide a convenient facility for usage by residents of Monterey Keys and it can be expected to be used by residents of Oyster Cove and those easterly and northerly thereof. Some forethought on location of the road may have been influenced by the ETC but that, in my opinion, is too remote from the resumption to become a matter for consideration, whether in general terms or in terms of severance or injurious affection. This finding is equally applicable to the evidence of anticipated effects on Monterey Keys Drive which in the Eppell report is included as a network proposal (connection between Helensvale Road and the Oxenford-Southport Road).”

Having considered the evidence, we find no grounds on which to disagree with this conclusion.

As there is no proper evidentiary foundation upon which the relevant characteristics of the land and development in which the claimant had an interest immediately before and after the resumption can be determined, it follows that any damages which may have flowed as a result of severance from the resumption cannot be assessed. We conclude therefore that the President was correct in his conclusion with regard to severance.

Disturbance
As we have mentioned, for disturbance the President disallowed all but the $74,878.00 for the costs of preparing the compensation claim. Before us the claimant pursued only two of the disallowed items: that for alleged losses on the sales of developed lots in the Monterey Keys estate made before the resumption, and that for additional intersection costs brought about, it was alleged, by the resumption. The sums sought were $163,600.00 and $76,000.00 respectively. The $163,600.00 was the sum contended for before the President as the claim was finally formulated. The $76,000.00 was based on a finding of the President that the evidence of Mr Maurice McAnany, an engineer called by the constructing authority, was more convincing than that of Mr Warren Morton, an engineer called by the claimant. The sum claimed before the President for the additional intersection costs was $249,629.48, as we have related. Arguments were advanced to us on behalf of the constructing authority concerning the quanta of the claims, and we shall return to them later.

The claim to the $163,600.00 was based on losses on the sale of 60 allotments allegedly suffered after November 1992 when sales of Monterey Keys land began and before 1 October 1993: $154,000.00 on 44 allotments within 200 metres of the road corridor on which Mr Murphy assessed the average loss in sale price caused by the corridor at $3,500.00 per allotment; and $9,600.00 on 16 allotments beyond the 200 metre line on which he assessed the average loss in sale price from that cause at $600.00 per allotment (paras. 4.6, 8.6, and 8.7 of Exhibit 4).

If the effect of the impending resumption had, as we conclude, been restricted to the land within 140 metres of the corridor the number of allotments affected would have been 24. Applying the loss of $3,500.00 to the 24 allotments one arrives at $84,000.00, the figure contended for on behalf of the constructing authority should this Court allow anything for this item. The assessment of 24 allotments derives from Exhibit 5: see p. 12. Although the constructing authority challenged the number of allotments affected he did not contend for a figure of less than $3,500.00 per allotment.

In a report dated 18 October 1994 concerning, inter alia, the additional intersection costs (Exhibit 8), Mr McAnany had arrived at $76,272.00 for that item: $592,941.00 calculated as the cost of a roundabout intersection in a different place from that originally proposed, less $516,669.00 calculated as the cost of a “T” intersection in the place originally proposed. In giving evidence on 14 November 1994 Mr McAnany said that he had recalculated the figures and had arrived at $59,190.40: $511,894.40 less $452,704.00. The President in his judgment mentioned only the sum of “about $76,000.00”, for which the claimant contended on the appeal. In our view , however, if a sum is to be awarded for this item it should be based on the $59,190.40 calculated by Mr McAnany upon whose evidence the claimant now seeks to rely.

The intersection in question was built with an associated bridge across Saltwater Creek. Intersection and bridge were completed in late 1992, i.e., before the date of the resumption. The intersection, with the Oxenford-Southport Road, was to the north of the north-western section of Monterey Keys. It was originally to be a “T” intersection but in the end was built as a roundabout. Drawings showing the original design and the later one may be found in annexures 7, 8, and 9 to Exhibit 4. The main entrance to the estate is from the Oxenford-Southport Road at the roundabout over the bridge across Saltwater Creek and then on to Monterey Keys Drive. The bridge and the roundabout are approximately 60 metres further east of the original position proposed for them. The bridge over Saltwater Creek is now next to another bridge, which is part of the Oxenford-Southport Road and which crosses a nearby anabranch of the Coomera River.

The constructing authority’s approval was required for the intersection. By a letter dated 22 September 1988 the constructing authority gave conditional approval for the “T” intersection design, and by a letter dated 16 November 1988 conditional approval for the widening of the bridge, a necessary part of the intersection construction. By a letter dated 8 May 1989 the Albert Shire Council, whose approval was also required, gave conditional approval for the bridge.

By a letter dated 13 June 1991 a district engineer of the constructing authority notified agents for the claimant that the authority’s final approval for the bridge and roadworks had not been “processed” and continued: “we would not support any access which did not take account of the proposed eastern corridor. The bridge over Saltwater Creek should be located in a permanent location clear of the proposed road and rail structures”. Attached to the letter was a plan showing “an indicative alignment for an intersection on the Oxenford-Southport Road west of the railway corridor” which, it was said, “may be acceptable to this Department subject to the submission of detailed Engineering Drawings”. In the event the intersection was, as we have mentioned, constructed to the east of the rail corridor.

Design plans for the roundabout as it was constructed were submitted on 28 July 1992 and the constructing authority approved them on 25 September 1992. Construction then proceeded.

Not all losses sustained or costs incurred as a result of a resumption can be the subject of compensation. A claimant is confined to those provided for in s. 20 of the Acquisition of Land Act. Disturbance is not expressly referred to in that section, but compensation for disturbance is allowed on principles explained in The Commonwealth v. Milledge (1953) 90 C.L.R. 157 and Crisp & Gunn Co-operative Ltd v. Hobart Corporation (1963) 110 C.L.R. 538. Compensation to a former owner for the loss of the owner’s land must include not only the amount which any prudent purchaser would find it worth his or her while to give for the land, but also any additional amount which a prudent purchaser in the position of the owner, that is to say with a business such as the owner’s already established on the land, would find it worth his or her while to pay sooner than fail to obtain the land. If the land is valued, however, on the basis of its suitability for a more profitable form of use than that to which the owner was putting it at the date of resumption then nothing will be recoverable for disturbance. As was further explained in Universal Sands & Minerals Pty Ltd v. Commonwealth (1980) 30 A.L.R. 637:

“Disturbance is not a separate head of compensation. In some circumstances, it is a relevant factor in assessing the value of land or an interest in land to the owner for the use to which he was putting it at the date of acquisition. Where relevant, it is calculated by reference to economic loss which can, or should have been, expected to be sustained, or costs which can or should have been expected to be incurred by the claimant as a natural and reasonable consequence of the acquisition.” (p. 640).

No question of the land’s being valued on the basis of its suitability for a more profitable form of use than that to which the claimant was putting it at the date of resumption arises in this case.

Compensation under the head of disturbance may include compensation for business losses. In Harvey v. Crawley Development Corporation [1957] 1 Q.B. 485, a householder whose home had been compulsorily purchased by a new town development corporation sought compensation for disturbance. The relevant legislation expressly provided for such a claim in that case, but that is not material to the question of principle that arises in this case. Denning L.J. referred to “the rule that everything that is a direct consequence of the compulsory acquisition can be recovered under the head of ‘compensation for disturbance’” and continued:

“Mrs. Harvey gets compensation for having to move out her furniture and put it into the new house: she gets compensation for having to alter the curtains and carpets and remake them to fit the new windows and floors. Take business premises where fixtures and fittings have to be moved; or where there is loss of business through being turned out; or loss of goodwill. All that loss and expense is the proper subject of ‘compensation for disturbance’ in addition to the open market value of the land.” (p. 493)

A recent example of a successful claim for business losses is Director of Buildings and Lands v. Shun Fung Ironworks Ltd [1995] 2 A.C. 111.

Compensation for losses suffered or costs incurred before resumption in the “shadow” period, as alleged in relation to the two items the subject of this appeal, can be recovered: Prasad v. Wolverhampton Borough Council [1983] Ch. 333; Mario Piraino Pty Ltd v. Roads Corporation (1990) 76 L.G.R.A. 263; and Director of Buildings and Lands v. Shun Fung Ironworks Ltd.

Compensation for disturbance is for everything which is a direct consequence of the compulsory acquisition, as Denning L.J. said in Harvey v. Crawley Development Corporation. A loss sustained by a dispossessed owner which is too remote cannot be the subject of an award of compensation for disturbance. In a passage in the same case, the authority of which is well accepted, Romer L.J. said:
“It seems to me that the authorities to which our attention was drawn do establish that any loss sustained by a dispossessed owner (at all events one who occupies his house) which flows from a compulsory acquisition may properly be regarded as the subject of compensation for disturbance, provided, first, that it is not too remote and, secondly, that it is the natural and reasonable consequence of the dispossession of the owner.” (p. 494)

The difficulty is, of course, in applying the rules particularly that concerning remoteness. No dispute over remoteness arose in Director of Buildings and Lands v. Shun Fung Ironworks Ltd, but the following passage from the judgment delivered by Lord Nicholls of Birkenhead outlines the difficulty:
“The application of the general principle of fair and adequate compensation bristles with problems. As useful guidelines there are three conditions which must be satisfied. First, it goes without saying that a prerequisite to an award of compensation is that there must be a causal connection between the resumption or acquisition and the loss in question.

The adverse consequences to a claimant whose land is taken may extend outwards and onwards a very long way, but fairness does not require that the acquiring authority shall be responsible ad infinitum. There is a need to distinguish between adverse consequences which trigger a claim for compensation and those which do not. A similar problem exists with claims for damages in other fields. The law describes losses which are irrecoverable for this reason as too remote. In Harvey v. Crawley Development Corporation [1957] 1 Q.B. 485, 493, Denning L.J. gave the example of the acquisition of a house which is owner-occupied. The owner could recover the cost of buying another house as his home, but not the cost of buying a replacement house as an investment. The latter would be too remote.

The familiar and perennial difficulty lies in attempting to formulate clear practical guidance on the criteria by which remoteness is to be judged in the infinitely different sets of circumstances which arise. The overriding principle of fairness is comprehensive, but it suffers from the drawback of being imprecise, even vague, in practical terms. The tools used by lawyers are concepts of chains of causation and intervening events and the like. Reasonably foreseeable, not unlikely, probable, natural are among the descriptions which are or have been used in particular contexts. Even the much maligned epithet ‘direct’ may still have its uses as a limiting factor in some situations.

In the present case it is not necessary to pursue these problems in relation to claims for compensation on resumption. No dispute arises over remoteness in the instant case. Suffice to say as a matter of general principle, to qualify for compensation the loss must not be too remote. That is the second condition.” (p. 126)

The third condition is that those who claim compensation behave reasonably.

The President held that the claim based on alleged losses on the sales of developed lots made before the resumption had no support in law and should accordingly be disallowed. The President treated this part of the claim as one for injurious affection, and before us it was conceded that it could not succeed under that heading; but it was pointed out that it had been made under the heading of disturbance.

It may be accepted that there was credible evidence of losses on the pre-resumption sales, so that the requirement that causation be established was satisfied. In our view, however, this part of the claim must fail because the losses were too remote to qualify as disturbance. They were secondary rather than direct consequences of the kind referred to by Denning L.J. in Harvey v. Crawley Development Corporation. It is not always easy to say where the line should be drawn, but we are satisfied that this part of the claim falls on the wrong side of the line for the claimant. This is a case in which we think the maxim expressio unius est exclusio alterius may safely be applied. Although the claimant has sought to put this part of its claim under the heading of disturbance, it is obviously enough a complaint of injurious affection prior to resumption. It is well established of course that the categories of damage may overlap but the essence of the complaint is one of injurious affection. Injurious affection as a head of claim is expressly provided for in s. 20 of the Acquisition of Land Act, but not injurious affection before the date of resumption. That is no doubt why the claimant has made the concession it has. The express reference to injurious affection at the time of resumption indicates that injurious affection prior to resumption is something for which compensation cannot be sought.

The President held, as we understand his reasons, that the additional intersection costs could not be recovered because they were incurred as a result of works done or expected to be carried out on land not taken from the claimant. He referred to Edwards v. Minister of Transport [1964] 2 Q.B. 134, in which it was held that where compensation is claimed for injurious affection, and damage to the claimant’s retained land has arisen partly because of the use of the land taken and partly because of use of land never the claimant’s, the claimant could recover compensation only for the damage attributable to the activities on the land taken. That principle applies not only to claims in respect of injurious affection, but also to claims in respect of severance and disturbance. Compensation is allowed under the heading of disturbance only for the taking of the subject land and the use made of it: The Crown v. R.H. and J.M. Corbould (1986) 11 Q.L.C.R. 50 at pp. 57-58. As a second reason for disallowing this part of the claim the President held, as we understand him, that the alleged damage did not arise from the taking of the claimant’s land, but from a scheme “comprising more than one option and not as such a scheme which in the relevant sense is covered by the Pointe Gourde [Pointe Gourde Quarrying & Transport Co. v. Sub-Intendant of Crown Lands (Trinidad) [1947] A.C. 565] principle were that principle relevant”. (Before us it was said that it was not suggested, and never had been suggested on behalf of the claimant, that the Pointe Gourde principle was applicable.) Thirdly, the President found, as we understand him, that the alleged damage flowed from the decision of the constructing authority to withdraw approval in principle given for the location of the bridge in 1987 - which withdrawal was of course reflected in the letter of 13 June 1991. The President held that the withdrawal of approval was not a matter for which compensation could be recovered under s. 20 of the Acquisition of Land Act.

In our view the President’s conclusions are correct, but only up to a point. While it is true that the additional intersection costs were incurred as a result of works - the building of part of the new highway - expected to be carried out on land not taken from the claimant, it is also correct to say that the taking of the claimant’s land for the proposed continuation of the highway onto that land was equally a cause of those costs. The proximity and interdependence of the intersection, the bridge, and the entrance to the estate leads to that conclusion. In those circumstances we think it fair to allow compensation in the sum of half the proved additional costs.

We do not accept that there is any merit in the suggestion that since only conditional approval had been obtained for the original intersection design and because there had been some delay by the claimant in proceeding with the project the additional costs cannot be attributed to the resumption of the claimant’s land. Had the road corridor scheme not intruded there is on our assessment of the evidence no doubt that the “T” intersection would have been constructed in the place originally proposed. On our assessment of the evidence half of the $59,190.40 calculated by Mr McAnany can properly be attributed to disturbance caused by the resumption. We do not think the additional costs should be regarded as too remote to warrant an award for this part of the claim, again because of the proximity and interdependence of the intersection, the bridge, and the entrance to the estate.

We therefore conclude that the claimant is entitled to an additional $29,595.20 for disturbance.

Costs
In his decision dated 1 November 1995 the President ordered that the claimant pay 80 per cent. of the constructing authority’s costs of and incidental to the hearing and determination of the claim. The claimant appealed against the order seeking either no order for costs or an order for “some amount considerably less than 80 per cent.” The constructing authority had sought all its costs before the President, who, Mr Gallagher submitted, had been “lenient” on costs.

The power of the Land Court to order costs is found in s. 41(9) of the Land Act 1962 (preserved by s. 521 of the Land Act 1994). The subsection provides:

“Powers of Court

...

(9) The Court may make such order as it thinks fit as to the costs of or incidental to any matter that it has jurisdiction to hear and determine including, without limiting the generality of this subsection, the costs of an adjournment or application made in a pending matter, allowances to witnesses attending for the purpose of giving evidence at the hearing and the costs of any survey of boundaries.”

Section 27 of the Acquisition of Land Act 1976 provides:

“(1) Subject to this section, the costs of and incidental to the hearing and determination of the Land Court of a claim for compensation under this Acquisition of Land 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.
(3) Subsection (2) does not apply to any appeal in respect of the decision of the Land Court or to costs awarded pursuant to section 24(3) or section 25(3).”

Section 24(3) concerns amendments to claims and s. 25(3) leave to a claimant to appear and be heard on a reference by a constructing authority when the claimant has failed to enter an appearance on the reference.

Although a claim for $14,987,012.52 in compensation was served on the constructing authority, the amount of compensation finally claimed was, as we have related, $10,193,367.44. The amount of the valuation finally put in evidence by the constructing authority was $1,185,000.00, excluding any allowance for disturbance. Clearly the amount of compensation as determined by the President was nearer to that finally put in evidence by the constructing authority than the amount finally sought by the claimant. The question is whether the order for costs was an appropriate exercise of the Court’s discretionary power.

The Full Court of the Supreme Court of Queensland in Wyatt v. Albert Shire Council [1987] 1 Qd.R. 486 made the following general observations about the power to award costs:

“The power to award costs of proceedings is entirely the creation of statute. Under the general law there was no power of awarding costs. This was true in the common law courts and apparently also in equity: see Re Birkman ex p. Pickering (1860) 1 Q.S.C.R. 14, 15, per Lutwyche J. What is more important, it is equally true of tribunals that are statutory in origin: see R. v. Justices at Brisbane ex p. Zagami (1901) 11 Q.L.J. 81, 83, per Griffith C.J. speaking on behalf of the Full Court. In exercising their jurisdiction to award costs the common law courts adopted the principle that costs should follow the event. The ‘event’ for this purpose meant the jury verdict, provided, at any rate, that judgment accorded with the verdict; but those courts also awarded costs related to success or failure on particular ‘issues’ irrespective of the overall outcome of the litigation. The rule that costs followed the event was, however, a common law rule which did not prevail in the equity jurisdiction, where the discretion of the Court of Chancery over costs was, at least in theory, regarded as unfettered.” (p. 488)

In that case the Full Court was considering the scope of a section which gave the Local Government Court power to “make such order as it thinks fit as to the costs of any proceedings before it”. That discretion - which is essentially the same as the discretion conferred on the Land Court by s. 41(9) of the Land Act 1962 - was described by the Full Court as “complete” (p. 488). (A similar power was described by Macrossan J, with whose reasons W.B. Campbell and Matthews JJ. agreed, as “full” in Assignment Pty Ltd v. Kirby [1981] Qd. R. 129 at p. 134.) The Full Court continued:

“To say that, however, is not to say that the discretion may be exercised in an arbitrary manner. In England, where since 1890 the discretion of the High Court over costs is also acknowledged to be unfettered by statute, it continues to be recognized that the discretion must be exercised judicially: see Knight v. Clifton [1971] Ch. 700. As the judgments in that case show, such a power does not exclude resort to the ‘settled practice’ of a court where such a practice has evolved; but, to refer once again to what was said by Macrossan J. in Assignment Pty. Ltd v. Kirby, supra, a purported exercise of discretion ‘which fails because the mind is closed to relevant considerations through a rigid adherence to preconceptions’ involves an error of law that is open to correction on appeal.” (p. 489)

The Full Court considered that one should approach such a discretion with no preconceptions as to its exercise, save that it must be exercised “judicially”.

“That can only mean for reasons that can be considered and justified. In saying that, we do not intend to imply that reasons must always be given for awarding or withholding costs. In some, perhaps many cases the matter may be so obvious as not to require explanation in the form of stated reasons. In such cases the findings themselves will ordinarily afford reason and justification for the decision on costs that follows. But where what has been done appears to lack rational justification either in the findings or in the reasons expressed for it, a question may arise whether the decision has been arrived at judicially. It may then be open to review the decision on costs as involving error or mistake of law.” (p. 489.)
See also Poole v. Enlor Pty Ltd [1987] 1 Qd. R. 80 at p. 87.

The frequently cited authorities on the Land Court’s power to award costs proceed in the same vein: although the Land Court’s discretion is unfettered, it must be exercised judicially, i.e., by reference to relevant considerations.

In its application to the President, the constructing authority submitted that an order for costs should be made for various reasons:

The decision of the Land Court was “comprehensively in accordance with compensation as assessed by the Constructing Authority” and bore no resemblance to the amount claimed;
The nature of the case prepared by the claimant was “so unreasonable as to make litigation unavoidable”;
There were no matters which could be pointed to in respect of the behaviour of the constructing authority which ought to have denied it its rights to costs;
Many of the items claimed were either not sustainable at law or not supported by facts;
The relevant findings of fact were “comprehensively in favour of the Constructing Authority”.

The constructing authority also submitted that this was an appropriate case to award costs in accordance with the general principle that costs should follow the event. Moreover, if one had regard to the exorbitant and excessive nature of the claim, one must conclude that “any further negotiations taken” to try to settle it would have been futile. It was also submitted that the hearing of the case was “quite prolonged” by the examination of the issues of disturbance advanced by the claimant and found not supportable at law. Those claims were not “the subject of a proper award” and should not have been made, it was submitted; furthermore, the late amendment of the claim “from $14 M to $10 M at the commencement of the hearing had caused some earlier work done by the Constructing Authority to be categorised as ‘costs thrown away’ without proper notice to the Constructing Authority”.

In reply, the claimant submitted that costs should not be awarded to the constructing authority. Although it agreed that factors referred to by the constructing authority were relevant to determining whether costs should be awarded, the claimant submitted that:

Issues were raised in the case upon which valuation opinion could legitimately differ and the claimant had not acted unreasonably in relying on the opinion of its valuer;
Because the law on disturbance is complex and evolving it was not unreasonable for the claimant to make the claims for disturbance it did, even though a number of the claims were rejected; and
There were aspects of the constructing authority’s behaviour which ought to deny it its right to costs. In particular, although the claimant was willing to attempt to reach agreement on as many aspects of the case as possible, that was not the intent of the constructing authority from at least May 1994. In support of that submission, reliance was placed on an affidavit of Mr Edward Kann, the solicitor who had conduct of the matter on behalf of the claimant. That affidavit described a conference between representatives of and advisers to the parties which took place on 30 July 1993; decisions made at the conference concerning the steps to be taken in connexion with the taking of the land, the exchange of information, the claim for compensation, and the payment of an advance in respect of compensation; attempts by Mr Kann to arrange a further “without prejudice” conference with the constructing authority; and the apparent unwillingness of the constructing authority from May 1994 to participate in such a conference. In the claimant’s submission, the constructing authority had failed in its duty to act reasonably in conferring with the claimant and in attempting to settle all or some of the matters in dispute between the parties.

The constructing authority took issue with some of the submissions and with some of the statements by Mr Kann. It asserted that there was more than one “without prejudice” conference between it and the claimant. The conferences resulted in “no compromise of the action on the part of the Claimant and in fact the claim increased from $9.5 M to in the order of $15 M before amendment at the commencement of the hearing”. The constructing authority asserted that it had acted reasonably at all times. It also submitted that, given that the claim was based on “a clear misunderstanding of the relevant authorities”, any reliance on the possibility of resolving “engineering issues” was “to all intents and purposes meaningless”. When arguing the appeal, Mr Gallagher submitted that because the sums for which the parties contended were so far apart there was “not much to talk about”.

In his reasons for decision on the application for costs, the President referred to decisions relevant to the exercise of the Land Court’s discretionary power to award costs: Moyses and Others v. Townsville City Council (1979) 6 Q.L.C.R. 271; Minister for the Environment v. Florence (1980-81) 45 L.G.R.A. 127; Banno and Another v. Commonwealth of Australia (1993) 81 L.G.E.R.A. 34; Denning v. The Council of the City of Ipswich (1988-89) 12 Q.L.C.R. 171. He noted that in this case there was little between the valuers on the question of the value of the land taken, including severance. The bulk of the claim, including injurious affection, turned on principles which the President held were applicable to an assessment of compensation for disturbance and injurious affection under s. 20 of the Acquisition of Land Act. The President referred to the affidavit of Mr Kann, and noted that the claimant elected to argue issues which the constructing authority said were not supported by law. On those issues the claimant was unsuccessful. The President concluded:

“In the circumstances, I fail to see why the respondent should not receive costs for taking a firm stand on matters about which it was successful. Had the case been confined to the matters of the value of the land taken and severance, it is doubtful if the respondent would have obtained an order for costs.”

The decision that the claimant pay 80 per cent. of the costs of the constructing authority is consistent with the following propositions on the partial award of costs set out by Toohey J. in Hughes v. Western Australian Cricket Association (Inc) (1986) 8 A.T.P.R. 40-748:

“1.Ordinarily, costs follow the event and a successful litigant receives his costs in the absence of special circumstances justifying some other order ...

2. Where a litigant has succeeded only upon a portion of his claim, the circumstances may make it reasonable that he bear the expense of litigating that portion upon which he has failed ...

3.A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party’s costs of them. In this sense, ‘issue’ does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law ...”. (p. 48, 136)

In Dodds Family Investments Pty Ltd v. Lane Industries Pty Ltd (1993) 26 I.P.R. 261 the Full Court of the Federal Court of Australia observed that the propositions enunciated by Toohey J. in Hughes v. Western Australia Cricket Association (Inc) are:

“.. subject to the further consideration that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case ... In Trade Practices Commission v. Nicholas Enterprises Pty Ltd (No. 3) (1979) 42 F.L.R. 213; 28 ALR 201, Fisher J. regarded the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party. Generally speaking, and notwithstanding the considerations referred to by Toohey J. and the other authorities mentioned above, the demands of the community for greater economy and efficiency in the conduct of litigation may properly be reflected in a qualification of the presumption that a successful party is entitled to all its costs.” (pp. 271-272)

The power of this Court to deal with costs in the Land Court is governed by s. 44(16) of the Land Act 1962 which provides:
“(16) The Land Appeal Court may make such order as it thinks fits as to the costs of and incidental to an appeal ... and may rescind, confirm or modify any order as to costs made by the Land Court.”
In J.T. and L.J. Barns v. Director-General, Department of Transport (A93-55, A93-56, decision dated 2 September 1997, not yet reported) the Land Appeal Court considered the scope of this Court’s power and the relevance of s. 27 of the Acquisition of Land Act 1967 to the exercise of that power in a case such as this. We respectfully adopt the Land Appeal Court’s reasoning in that case.

We further observe that appeal courts are reluctant to interfere with a discretionary decision such as an award of costs unless the decision can be shown to be clearly wrong. As the Full Federal Court said in the Dodds Family Investments case, where there is a mixed outcome in proceedings “the question of apportionment is very much a matter of discretion for the trial judge”. (p. 272)

Mr Needham conceded that difficulty when he cited passages from the judgments of the High Court in House v. The King ((1936) 55 C.L.R. 499 at pp. 504, 505) and Australian Coal and Shale Employees’ Federation v. Commonwealth ((1953) 94 C.L.R. 621 at p. 627). Those passages were relied on by the Full Court of the Supreme Court of Queensland in Wyatt v. Albert Shire Council and were referred to by that Court in Poole v. Enlor Pty Ltd at p. 85. It is sufficient to quote the following passage from the judgment of Kitto J. in the Australian Coal and Shale Employees’ Federation case:

“.. the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgment is that there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction sufficient to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance: House v. The King.” (p. 627)

Mr Needham acknowledged that that was the standard to be adopted in resolving the appeal against costs. He repeated, in essence, the submissions made to the Land Court, and relied on the history of communications between the claimant and the constructing authority in relation to the resumption which, in his submission, demonstrated that the claimant did everything possible before the hearing commenced to try to narrow the issues between the parties. That history is set out in Mr Kann’s affidavit. Mr Needham suggested that if the parties had had those discussions the hearing before the President would have taken “a considerably shorter time than three weeks”. (Mr Gallagher said it went for three and a half weeks.)

We are not persuaded that the President’s discretion miscarried. The matter of greatest moment on the question of costs was of course the substantial discrepancy between the claim and the constructing authority’s assessment of the compensation payable. While the possibility that some further discussion between the parties before the hearing may have narrowed the issues of fact somewhat may have been accepted, it remained a mere possibility. It was far more likely in our, and we think the President’s, assessment that no further progress would have been made towards resolution of the issues. There was moreover a distinct possibility that further discussion would merely have added to the parties’ costs rather than reduced them. At all events it would never have been possible we think to remove the chief obstacle of the discrepancy to which we have referred.

Accordingly, having regard to the decision of the President in relation to the claim for compensation, the judgment of this Court on appeal from that decision, and the President’s reasons for the partial award of costs, we have concluded that the appeal against the order for costs should fail.

Conclusion
We conclude then that the claimant’s appeal on the question of compensation should be allowed in part, that the President’s determination that compensation under all headings of $1,539,878.00 was payable should be set aside and the sum of $1,626,723.20 substituted. The claimant’s appeal on the question of the costs of the hearing before the President will be dismissed. We shall invite further submissions on interest and the costs of these appeals.

HELMAN J
JUSTICE OF THE SUPREME COURT

GJ NEATE
MEMBER OF THE LAND COURT

SA FORGIE
MEMBER OF THE LAND COURT

[1997] QLAC 205

15 October 1997