Macedab Pty Ltd v Director-General, Department of the Premier, E&T Development

[1995] QCA 230

IN THE COURT OF APPEAL	[1995] QCA 230
SUPREME COURT OF QUEENSLAND

Appeal No. 185 of 1994

Brisbane

[Macedab v. Director-General]

BETWEEN:

MACEDAB PTY LTD

Appellant

AND:

THE DIRECTOR-GENERAL, DEPARTMENT OF THE PREMIER,
ECONOMIC AND TRADE DEVELOPMENT

Respondent

Macrossan CJ
Davies JA

Pincus JA

Judgment delivered 09/06/1995

Judgment of the Court

APPEAL DISMISSED WITH COSTS TO THE RESPONDENT TO BE TAXED.

CATCHWORDS:	ADMINISTRATIVE LAW - JUDICIAL REVIEW - Acquisition of land - Cabinet decision to implement policy of compassionate acquisition. Judicial Review Act 1991, Ss. 4, 9, 20.
Counsel:	Mr F.W. Redmond for the appellant. Mr R.I. Hanger Q.C. with Mr Martin for the respondent.
Solicitors:	Hyland & Co., Town Agents for Kenny & Partners, for the appellant. Crown Solicitor for the respondent.
Hearing Date:	15/02/1995

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 185 of 1994

Brisbane

Before Macrossan CJ

Davies JA Pincus JA

[Macedab v. Director-General]

BETWEEN:

MACEDAB PTY LTD

Appellant

AND:

THE DIRECTOR-GENERAL, DEPARTMENT OF THE PREMIER,
ECONOMIC AND TRADE DEVELOPMENT

Respondent

REASONS FOR JUDGMENT - THE COURT

Judgment delivered 09/06/1995

This appeal is brought against the dismissal of an application for judicial review of a decision

which had been made by the Director-General, Department of the Premier, Economic & Trade

Development. That decision was notified to the appellant on 2 February 1993 and advised in effect,

that land owned by it was excluded from the possibility of purchase under a scheme for the

acquisition of land in the Gladstone area. The acquisition scheme has been described as one

operating on compassionate grounds. Notice of the scheme and details of its intended operation

had been communicated to the appellant and other land owners by letter of 12 December 1991 sent
by a Departmental officer.

It was not contested in the proceedings below or before this Court that the decision

conveyed on 2 February 1993 was one within the category of reviewable decisions under the

Judicial Review Act 1991. It was accepted that the decision could be made the subject of review

because within the meaning of s. 4 of the Act it was one made by an officer of the State or a State

authority

"... under a non-statutory scheme or program involving funds that are provided or obtained

(in whole or part)-

(i)          out of amounts appropriated by Parliament; ..."

It was conceded that the consequence then was that an entitlement to statutory review arose under

s.20(1) because the case was comprehended within the grounds specified in subs.(2) and in

particular subs.(2)(e) when read in conjunction with the definition provided by s.9 of an "exercise of

a power conferred by an enactment". The contention was that there had been an improper exercise

of power within the meaning of subs.(2)(e). Although a concession regarding the availability of

review was made by the respondent, the Court on the hearing displayed some interest in the width

of the power to review decisions of Government officers under the provisions referred to. Certain

supplementary submissions were lodged by the respondent in response to the expressions of interest

by the Court, but, in view of the concession referred to, a detailed examination of the availability of

review of the decisions of Government officers under these provisions is not required in the present

case.

The compassionate acquisition scheme which has been referred to was not one which

assured all qualified applicants of substantial relief. The most that it ensured was that applicants who

were qualified under its terms would be engaged in negotiations by officers of the Department of

Lands with a view, it is true, to purchase of their landholdings at "market value" but so that "if

agreement could not be reached on a purchase price, the sale would not proceed". Thus, the level of compassion that the scheme offered had its limits and did not extend to guaranteeing that any

particular landholder's property would be purchased.

A basic contention of the appellant was that land it had acquired in the Gladstone area,

described as lots 1-5 on registered plan 801428, had become extremely difficult to sell because of

public knowledge of a Government proposal which might foster the development of industrial lands

in that locality. The climate of uncertainty which made it difficult for the appellant to attract potential

purchasers did not affect it alone and other landholders also considered that the Government

initiative had brought disadvantages. While the suggestion of the appellant was that its land had

become blighted as a marketable commodity, it was less clear how precisely it would be advantaged

if it were accepted as a qualifying landholder under the scheme and so entitled to be approached by

departmental officers with a view to purchase. The appellant could only expect the benefit of a sale

at market value and not, so far as the scheme itself went, at any value enhanced beyond that level.

However, acceptance within the scheme was obviously intended to provide some benefit in practice

and there is no doubt that the appellant thought that in its own case this was so. Although it did not

precisely define for the Court what this benefit was, it appeared that if accepted under the scheme it

hoped that some indulgence of a practical kind would flow to it out of the negotiations with

departmental officers particularly at a time when other buyers were scarce. It can be assumed that

an opportunity to negotiate with the Department under the provisions of the scheme was an

advantage which the appellant did not wish to lose.

Difficulties and delays had been experienced by the appellant in its attempts below to obtain

what it regarded as a full discovery to assist the presentation of its case. Ultimately, additional

documents, in particular two Cabinet minutes, did become available and these, in combination with

other documents which had received wider publication, enabled a sufficiently full picture of the

relevant circumstances to be discussed. The judge below looked to this fuller picture although the

appellant's argument was essentially that a narrow construction should be placed upon certain words which constituted a central aspect of the scheme. In the end it can be concluded that the broader

approach to the essential question of construction is correct.

Consideration can start with one of the two Cabinet minutes, the one dated 24 June 1991,

which was tendered below. That document records a Cabinet decision in these terms: "That a series

of environmental, economic and engineering studies (will) be undertaken to define land suitable for

the development of major industries in the Gladstone region...". The minute also records the

Government's preparedness to acquire land by resumption if necessary which "(a) it considers is

required to provide transport links; and (b) is needed to secure the industrial development of

Government-defined blocks of land.". An interdepartmental committee was accordingly to be set up

with the task of investigating and reporting to Cabinet on alternative mechanisms for "securing and

managing land, on a long term basis, for the development of major industries in the Gladstone

region".

From this beginning as outlined in the minute of 24 June 1991 matters moved along. A

further Cabinet minute of 9 December 1991 records the decision of Cabinet to implement "a policy

of land acquisition on compassionate grounds for land owners on the Carrara and Aldoga sites and

their associated transport corridors". The Premier was given responsibility for the implementation of

this policy. The minute also shows that it was decided that the only land which would be acquired

would need to meet certain criteria. They are stated in this fashion:-

"(a)	the land owner's circumstances suggest a clear case of significant hardship exists; and
(b)	the land is highly likely to be suitable for heavy industry or would be needed for transport corridors to support heavy industry sites. (This condition means that no determinations will be made prior to 31 July 1992 and that the boundaries of these sites/corridors may change from their present locations).
3.	That the detailed processes which would be used are set out in Attachment 3 to the Submission."

Attachment 3 was also in evidence. Amongst other things it delineated points to be
considered in deciding if significant hardship existed. Detailed headings under which hardship would

be considered were set out but since it is accepted that at relevant times hardship was sufficiently

established by the appellant, it is not necessary to take an examination of those particular matters

further. The attachment then continued:

"3.	For cases which meet the hardship criterion, the Director-General of the Premier, Economic and Trade Development (or his nominee) will ascertain whether the land is highly likely to be suitable for heavy industry or is needed for transport corridors to support heavy industry sites. This means that no determinations will be made prior to 31st July, 1992.
This is the relevance criterion."

Then it was provided:

"4. For cases, which meet both the hardship and relevance criteria, the Director- General of the Department of Lands will be requested to arrange for the purchase of the land ..."

The attachment went on to discuss how negotiations for purchase would be managed, saying that if

any contract of purchase were entered into, it would be subject to the approval of the Governor in

Council. The attachment also specifically stated that:

"If agreement cannot be reached on a purchase price, the sale would not proceed."

The reference in both the Cabinet minute of 9 December 1991 and Attachment 3 to the date

31 July 1992 as having significance in terms of determinations which might be made under the

compassionate acquisition policy is explained by what is recorded in a letter sent to the appellant

and other land owners. The letter is a fairly lengthy one and it is fully set out in the reasons of the

judge below. Certain particularly relevant matters which were notified in the letter should be

referred to again. Consultants were to be appointed to undertake studies related to the Gladstone

industrial land project; a Government policy had been established concerning the acquisition, on

compassionate grounds, of land which would be affected by the studies; the consultant's work had

been arranged to proceed in stages; stage one would involve consideration of existing data and was

expected to be completed by 31 March 1992; stage two would call for the collection and analysis of information and should be completed by 31 July 1992; at the end of stage two "a rough

assessment (could) be made of whether particular properties on the Carrara and Aldoga sites (or

some variation of them) (would) be suitable for heavy industry."; stage three would involve the

consultant in giving further consideration to the matter and producing draft recommendations which

would be completed, it was hoped, by about the end of October 1992; a public display of the draft

report would follow; stage four would call for the consideration by the consultants and government

agencies of the comments resulting from the public display of the draft report; and a final report

would be prepared by the consultants by the end of February 1993. The letter to the land owners

declared it probable that the Government would make its decision with respect to the study's

recommendations by June 1993.

The letter which has been referred to outlined the policy for the acquisition of land on

compassionate grounds. The relevant aspects of the policy were stated in terms generally consistent

with those stated in Attachment 3 although in some respects a fuller statement appears in the letter.

Having referred to the hardship criterion, the letter went on to state that for cases falling within its

scope, the Department would ascertain from the named consultants "whether the land is likely to be

suitable for heavy industry or is needed for transport corridors to support heavy industry sites". The

letter continued: "This means that no determinations can be made prior to 31st July, 1992 as (the

named consultants) will not have completed gathering and analysing the information needed for this

decision.". The letter repeated that the Director-General would be responsible for deciding which

cases fulfilled the conditions for acquisition on compassionate grounds and expanded by saying that

while requests could be made at any time, some of the information needed to assess applications

would not be available until 31 July 1992 and "thus the Director-General cannot make any decisions

until after that date". These further matters appear:

"... the land acquisition policy outlined above is purely an attempt to address the difficult circumstances in which some people have found themselves. It should not be interpreted as meaning the Government has decided to proceed with an industrial land acquisition program at Gladstone. The Government's policy with respect to this matter is unchanged in that any such decision will only be made after it has considered the consultant's final reports. If the Government ultimately decides that an industrial land acquisition program is inappropriate, then any land which has been acquired on compassionate grounds will be disposed of in some manner."

The Director-General wrote a letter to the appellant dated 3 March 1992 expressly

accepting that the appellant's circumstances were such that in its case a clear case of significant

hardship existed but adding that in accordance with previous advice the Director-General was

unable to make a determination upon the second qualifying matter namely that "the land is highly

likely to be suitable for heavy industry or would be needed for transport corridors to support heavy

industry sites" until after 31 July 1992 "because of the need for the land use studies to be sufficiently

advanced so that a judgment can be made with a reasonable degree of confidence.".

It does not appear that the appellant raised any objection to the delay in giving further

consideration to its case although the reason for the delay was clearly stated in the letter.

A ministerial submission dated 21 September 1992 from the Director-General to the

Premier, shows that stage two of the consultant's study was completed at the end of July 1992 and

that while the outcome of the study very strongly suggested that the Aldoga site should be preferred

for industrial development, there remained questions concerning air quality issues and Aldoga could

not be definitely stated as preferred and it was not possible to discard the Carrara site. Six residents

at Carrara were revealed to be applying for compassionate acquisition. There were three options

identified: that a decision on acquisition could be held back for a further period; that acquisition

could proceed in the case of the landholders whose properties were accepted for purchase on

compassionate grounds, or, as a compromise, that a purchase price could be negotiated with those

landholders although a decision on acquisition could be delayed. One particular case, that of a Mrs

Huth, was mentioned as involving extreme hardship it being said that this might distinguish it from the

other cases where hardship had also been accepted as existing.

The written material which had been brought into existence by about September 1992
showed with sufficient clarity that two possibilities under consideration were the use of the Carrara

site alone and the use of the Aldoga site alone whether or not there might be some modification of

the site boundaries originally contemplated. The action which the Director-General took in

executing the policy which had been determined upon clearly enough appears to have been carried

out in accordance with the directions of the Premier in the course of a process of continuing

consultation. To that extent it represents what can be described as government authorised activity.

It seems that Mrs Huth was notified in October 1992 of a decision made to purchase her property

but the other landholders involved, including the appellant, were informed that a decision had, in their

case, been deferred. An information bulletin had been published in September 1992 and it

expanded upon the circumstances in which it might be necessary to decide "which of Aldoga and

Carrara is to be preferred in terms of suitability for future industrial development". It said that, "on

the information so far available the consultants' preference would be for the Aldoga site".

The letter which purported finally to determine the fate of the appellant's property was one

dated 2 February 1993. This stated that stage three of the study in the public review period had

been completed and it had been decided that future work on the project would concentrate on the

Aldoga site and the Carrara site would be excluded from further investigation. It was conveyed that

accordingly there was no interest on the part of the State in the appellant's property and no offer to

purchase would be made. This statement represents the decision which the application for statutory

review sought to challenge.

The relevant provisions of the Judicial Review Act have been referred to above. The

background which has been outlined indicates that the appellant's challenge is brought against the

Director-General's assumption of an entitlement to decide upon the appellant's position by having

regard to the fact that interest in the Carrara site lapsed following the consultant's report with the

associated decision to favour the Aldoga site exclusively. The appellant's argument is that in this

respect the Director-General wrongly exercised the power which had been conferred upon him under the Government decisions. Fundamentally the appellant argued for a particular construction of

the conferred power by narrowly concentrating on one part of the documentation in which the terms

of the policy are stated. It looked to the requirement that land to be acquired had to meet two

criteria of which one was that it would be "highly likely to be suitable for heavy industry or would be

needed for transport corridors to support heavy industry sites" (to quote the form in which the policy

is stated in the Cabinet minute of 9 December 1991.) The appellant's construction disregarded the

phrase "highly likely" where it appears to qualify suitability and invited attention to a condition of

suitability in the abstract or, as it were, in a vacuum. If the land in question was physically "suitable

for heavy industry" it was submitted that was then enough to bring it within the criterion. It may be

suggested that this construction seems very likely to lead to the conclusion that all or virtually all of

the land in both the Carrara and the Aldoga sites would fall into the relevant category since both of

those areas were under active consideration and a detailed study was necessary to decide between

them. Although this is a possible basis upon which a compassionate governmental acquisition

scheme could be instituted, it is not necessarily what one would expect to find. It could be that a

benevolent government would decide that its protracted deliberations upon an industrialisation policy

might so blight the marketability of land in a particular area, that to alleviate hardship it would offer to

purchase all of the land of any landholder in the area who came forward. However, policies of this

kind, if implemented, could absorb large amounts of public funds. An alternative way for the

Government to proceed where it observes that its deliberations over land use policy are causing

temporary difficulties for landowners, would be to say that while the utilisation of the land under the

policy remains a serious possibility and marketability remains impaired in consequence, the

Government will, in cases of hardship, assist affected landholders. This way of proceeding could

serve to accelerate entitlement to compensation in cases where lands are destined to be needed for

some Government supported scheme or destined to be zoned in some way to conform with a

Government scheme. It would also, in a practical sense, offer compensation to other landholders during the period that their lands are frozen and removed from the market by the Government's

policy deliberations. This, at least equally with the interpretation of the scheme which the appellant

advocated, is a way in which a reasonably benevolent government could choose to proceed. One

thing that is clear is that the matter is not to be resolved by looking at one particular part of the

policy formulation in isolation. The reality is that government consideration was being given to the

need to delineate land to meet its industrialisation policy and this was perceived as possibly involving

the choice between two distinct sites. At all times suitability for heavy industry or associated

transport corridors was seen as related to the need to select land which best met its policy

requirements and it hoped to clarify the issues confronting it with the assistance of an expert

investigation which it commissioned. Most importantly, it envisaged the question of suitability, to use

the phrase as it is expressed in the policy as something which would not be decided until after the

expert's reports had become available to it. This explains the reference to the date 31 July 1992 in

the statement of the policy with its clear intimation that no determinations under it would be made

prior to that date. The result is that the continuation of the process from the time that the policy was

first announced and the broad view of the policy itself which emerges from a consideration of the

documents which enshrine or refer to it, lead to the conclusion that the compassionate acquisition

policy was meant to offer relief to landowners only while their properties remained potentially

appropriated to the Government's industrialisation objectives. This means that the determination of

the Director-General to exclude the Carrara lands from further consideration under the

compassionate acquisition policy once the decision had been made to proceed with Aldoga alone

was a correct decision or was at least fully justifiable in terms of the way the policy had been

constructed. The appeal therefore against the decision of the judge below should be rejected.

It is desirable to add that although the amenability of the Director-General to judicial review

under the terms of the Act was not disputed in the present case, it should not be regarded as

surprising that the legislature may have accepted decisions of this kind as being subject to judicial review. Decisions of a comparable kind have been accepted as subject to the supervisory

jurisdiction of the Court: see e.g. R v. Criminal Injuries Compensation Board, ex parte Lain (1967)

Q.B.D. 864. In that case it was held that the Board in question was subject to certiorari although as

a body it was constituted under the prerogative and not by statute and its determinations gave rise to

no legally enforceable rights. Lord Parker CJ at 883 accepted that the fact that a body existed

which acted on instructions from the executive government under a published scheme whereby

applications would be received and entitlement to payment of compensation adjudged in accordance

with a nominated procedure, made the body amenable to the supervisory jurisdiction of the Court.

Lord Diplock at 886 stated that while "it may be a novel development in constitutional practice to

govern by public statement of intention made by the executive government instead of by legislation"

in fact "the only limitation upon the power of executive government to confer benefits upon subjects

by way of money payments is a practical one, to wit, the necessity to obtain from Parliament a

grant-in-aid for that purpose". His Lordship at 885 also stated that "the executive government

could alter its instructions ... as set out in `the scheme' in any way that it chose" and there would be

no jurisdiction in the Court "to call in question the executive government's power to do so". This last

observation would seem to imply that even if the scheme in the present case as originally constituted

had the meaning for which the appellant contends, the Executive, having brought the scheme into

existence under its prerogative power could later alter the scheme in a way which took away

potential, although not perhaps realised, benefits. Here the Director-General, in the approach he

took in February of 1993, appears to have acted with the approval of the Premier especially when

the terms of the communications passing between them are considered. The Premier, as the

responsible Minister, may be taken to represent the Government in any instructions express or

implied which he conveyed to the Director-General. The Premier both administers a department

and "independently of this consideration, as head of the administration ... must be assumed to speak

with the authority of the Government": cf. Dixon J in New South Wales v. Bardolph (1934) 52 C.L.R. 455 at 507. However, the extent to which the doctrines expressed in Lain's case (supra)

apply in the present case need not be further considered. This is because concessions made on

behalf of the respondent accept the jurisdiction to review under the Act and accept also that the

funds involved under the compassionate acquisition scheme were, within the meaning of s.4(b)(i),

funds coming "out of amounts appropriated by Parliament". The phrase just quoted is repeated in

s.9 of the Act.

It was ordered below that the parties should have leave to appeal in respect of the order for

costs but no separate submissions were made to this Court on that question. It should accordingly

be concluded that no reason is shown to interfere with any aspect of the orders made below. The

appeal should be dismissed with costs to the respondent to be taxed.