Middleback Investments Pty Ltd and Minister for Finance

Middleback Investments Pty Ltd and Minister for Finance [2020] AATA 394 (5 March 2020)
Division:GENERAL DIVISION
File Number(s): 2019/1994
Re:Middleback Investments Pty Ltd
APPLICANT

Minister for Finance And
RESPONDENT

DECISION
Tribunal: Deputy President Britten-Jones and Senior Member B J Illingworth
Date:5 March 2020
Place:Adelaide

The Tribunal refuses the Applicant’s interlocutory application dated 29 August 2019.
..................[Sgnd]......................................
Deputy President Britten-Jones
CATCHWORDS
INTERLOCUTORY APPLICATION – whether a question of law should be referred to the Federal Court – whether a preliminary question should be determined by the AAT- risk of fragmentation – no agreed facts – mixed question of fact and law - application dismissed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Lands Acquisition Act 1989 (Cth)
CASES
Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334
Chadrysiak v Commissioner of Highways (2018) 132 SASR 277
Confidential and Australian Prudential Regulation Authority [2005] AATA 350
Meilak v Commissioner for Superannuation (1991) 99 ALR 559; (1991) 28 FCR 315
Rainsford v Victoria and Anor [2005] FCAFC 163
WAKN v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1245
REASONS FOR DECISION
Deputy President Britten-Jones and Senior Member B J Illingworth
5 March 2020

This is an interlocutory application dated 29 August 2019 by the Applicant who requests a referral of a question of law for determination by the Federal Court or, in the alternative, that the question of law be heard and determined as a preliminary question by a Presidential member of the Tribunal. The question of law is as follows:
Is loss due to a rising market in the nature of that identified by the Supreme Court of South Australia in Chadrysiak v Commissioner of Highways (2018) 132 SASR 277 at [83] a recoverable head of loss pursuant to the heads of claim and loss under the Lands Acquisition Act 1989 (Cth)?
In Chadrysiak v Commissioner of Highways,[1] Blue J said:
In conclusion, a loss due to a rising market is a recoverable head of loss provided that the claimant proves causation on the evidence and subject to principles of remoteness and mitigation of loss.
[1] (2008) 132 SASR 277 at [83]
The Respondent opposes the application in both respects.
Background
This matter relates to a claim for compensation arising out of property compulsorily acquired by the Commonwealth pursuant to the Lands Acquisition Act 1989 (Cth) (“the Act”).
Section 55(1) of the Act provides that the amount of compensation to which a person is entitled is such amount as “will justly compensate the person for the acquisition.”
Section 55(2) of the Act provides that in assessing the amount of compensation to which a person is entitled, regard shall be had to relevant matters, including:
(c) any loss, injury or damage suffered, or expense reasonably incurred, by the person that was, having regard to all relevant considerations, including any circumstances peculiar to the person, suffered or incurred by the person as a direct, natural and reasonable consequence of:
(i) the acquisition of the interest; or
(ii) the making or giving of the pre-acquisition declaration or certificate under section 24 in relation to the acquisition of the interest;
other than any such loss, injury, damage or expense in respect of which compensation is payable under Part VIII.
The Applicant was the former registered leaseholder of two pastoral leases in South Australia known as Roopena and Katunga. The Applicant engaged in the business of wool production.
The leasehold properties were acquired by the Commonwealth and declarations were published in the Commonwealth Government Gazette on 17 October 2012.
On 25 March 2013, the Respondent approved an advance payment to the Applicant in the sum of $5,044,000.00, which payment was received by the Applicant on or about 31 May 2013.
During 2018, the parties exchanged offers of compensation and requests for reconsideration of such offers.
In December 2018, the Respondent paid a further advance to the Applicant in the sum of $4,985,346.25 pursuant to s 76(1) of the Act.
On 14 January 2019, the Respondent made a final offer to the Applicant in the sum of $11,833,974.74 in accordance with s 76(1) of the Act.
The Applicant filed an application for review of decision on 11 April 2019 for review of that final offer seeking that it be varied by the Tribunal to the amount of $22,129,240.53. As part of that variation, the Applicant makes a claim for the following losses:
(i)loss due to rising market – $6,340,500; and
(ii)loss due to rising wool market – $2,557,499.50.
The alleged factual basis for determination of the question of law
In support of the interlocutory application, the Applicant’s solicitor, Ms Ellis, filed an affidavit sworn on 29 August 2019 attached to which was annexure BE-3 headed ‘Draft Statement of Facts’ which purports to summarise the facts of the compulsory acquisition and the exchange of offers and request for reconsideration. Paragraph [11] of the Draft Statement of Facts states:
In paragraphs 22 - 23 and 30 - 31 of its Application for Review of Decision made to the Tribunal in April 2019, the Applicant asserts the following:
22.The Applicant claims the further amount of $6,340,500.00 for disturbance loss in a rising market.
23. The Applicant:
23.1.At all times since the date of the compulsory acquisition has intended to purchase replacement farm land for that which was lost;
23.2.The Respondent did not provide to the Applicant at any time after the acquisition of the land sufficient funds to purchase replacement land for that which was acquired;
23.3.The Applicant did not have at any time after the acquisition sufficient resources of its own to purchase replacement property; and
23.4.As assessed by the Applicant’s valuer Mr Norris, there has been a 90% uplift in the market for relevant replacement land since the date of the acquisition.
…
30.The Applicant:
30.1. At all times since the date of the compulsory acquisition has intended to purchase replacement farm land for that which was lost;
30.2.The Respondent did not provide to the Applicant at any time after the acquisition of the land sufficient funds to purchase replacement land for that which was acquired;
30.3.The Applicant did not have at any time after the acquisition sufficient resources of its own to purchase replacement property;
30.4.The Applicant’s farming business conducted upon the acquired land was intrinsically linked to the land;
30.5.As a result of the Applicant being deprived of its land as a consequence of the acquisition, the Applicant consequently lost its farming business; and
30.6.Between the date of the acquisition of the land and 2018, wool price estimates have increased by a factor of 78.98%.
31.The Applicant claims the further amount of $2,557,499.56 for disturbance loss in a rising market for its wool business.
The Applicant submits[2] that the annexure BE-3 provides the “proper factual basis upon which the Federal Court may make a decision upon the question.” The Respondent disagrees and says that the annexure BE-3 merely contains “the Applicant’s assertions.” [3]
[2] Outline of Submissions of the Applicant dated 11 October 2019 at [7]
[3] Outline of submissions of the Respondent dated 17 October 2019 at [16]
We agree with the Respondent. The Draft Statement of Facts says that “the Applicant asserts the following” and goes on to set out the claims of the Applicant. The quoted passages of the Draft Statement of Facts are not agreed facts but merely the reproduction of the pleadings before the Tribunal. They assert the Applicant’s case before the Tribunal which is yet to be proved by the receipt of evidence and findings of fact by the Tribunal.
The absence of a set of agreed facts is fatal to the application as set out below.
The referral of a question of law
In Meilak v Commissioner for Superannuation,[4] the Full Court of the Federal Court said:
We wish to emphasise for future cases that if questions of law are to be asked [of] the Court, the Court must be provided with a proper factual basis upon which to make its decision. This may be done by the parties agreeing upon a statement of facts which can be tendered. If appropriate, relevant documents can be annexed to it. If this is not done, the Tribunal itself must find the primary facts and its findings upon those facts must be tendered in evidence before the Court will proceed.
[4] (1991) 99 ALR 559; (1991) 28 FCR 315 at [28]
In Bass v Permanent Trustee Co Ltd (Bass)[5] the High Court said:
The purpose of a judicial determination has been described in varying ways. But central to those descriptions is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy...
[5] [1999] HCA 9; 198 CLR 334 at [45]
In Rainsford v Victoria and Anor,[6] the Full Court of the Federal Court said that in exercising federal jurisdiction either the parties must agree on the relevant facts or the court must first determine the facts before going on to decide the question. In referring to Bass, the Full Court said:
…it was inappropriate to answer the questions because, in the absence of facts judicially determined or agreed by the parties, the questions were hypothetical … [t]he purpose of judicial determination … is the notion that such a determination includes a conclusive or final decision based on a concrete and established or agreed situation which aims to quell a controversy.
[6] [2005] FCAFC 163 at [36] – [38]
In Confidential and Australian Prudential Regulation Authority,[7] Downes J (President) observed:
[5] Questions of construction of legislation are often mixed up with questions of application of the legislation to the facts of the relevant case … it will be necessary for there to be at least some preliminary findings of fact made, if agreement cannot be reached, before any reference could be made to the Full Federal Court.
…
[10] The history of referring questions of law to a Full Court has not been a happy one. Attempts to shorten proceedings by referring a question which may dispose, or help in disposing, of a case has often, in the past, resulted in more complexity rather than less complexity. I fear that this case may be a further example of those experiences. That is another reason why I think it is not appropriate for me to refer the questions of law.
[11] It is also true to say that appellate courts have on a number of occasions said that they value a primary decision, including the views of the primary decision-maker on the questions of law arising, as a kind of filtering process which enables the appellate court to more satisfactorily come to grips with the issues.
[7] [2005] AATA 350 at [5] and [10]-[11]
Consideration as to whether there should be a referral to the Federal Court
There is no statement of agreed facts prepared by the parties in this matter. In effect, the Applicant is seeking to request the Federal Court to pronounce whether the claimed heads of loss are available to the Applicant in the application before the Tribunal. The problem for the Applicant is that in order to answer that question, factual matters must be resolved.
The question for referral raises questions of mixed fact and law. Section 55(2)(c) of the Act requires consideration of whether the Applicant’s claims for loss due to a rising market is a loss suffered that was “as a direct, natural and reasonable consequence” of the acquisition of its interest in Roopena and Katunga. This is not a question of law which can be considered in the abstract. It is a question that can only be answered after determination of questions of fact.
It follows that the Tribunal refuses the application to state a case to the Federal Court.
The hearing of a preliminary question
The Applicant seeks in the alternative, that the Tribunal answer the intended question as a preliminary issue prior to the substantive hearing of the application. The Respondent opposes that application.
There is no specific power for the Tribunal to hear and determine preliminary questions; however, s 33(2) of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”) empowers the Tribunal to give directions as to the procedure to be followed in the Tribunal.
In WAKN v Minister for Immigration and Multicultural and Indigenous Affairs[8] French J said that ruling on a preliminary question is “a power to be exercised with caution because, as the experience of the courts has shown, it can lead to fragmentation of what should be a relatively informal and expeditious process...”
[8] [2004] FCA 1245 at [40]
The impediments faced by the Applicant in persuading the Tribunal to grant the case stated remain and are applicable. There is no agreed set of facts which would enable the Tribunal to make a decision about whether the entitlement to loss due to a rising market meets the threshold test in s 55(2) of the Act, namely that it was “as a direct, natural and reasonable consequence” of the acquisition of the Applicant’s interest in the leasehold properties. This can only be determined following receipt by the Tribunal of the whole of the evidence.
As Blue J observed in Chadrysiak v Commissioner of Highways,[9] any determination as to loss would first require the Applicant to prove causation on the evidence and be subject to principles of remoteness and mitigation of loss.
[9] (2008) 132 SASR 277 at [83]
Further, it is arguable that to proceed to determine this preliminary question may enliven a real risk of fragmenting the proceedings. A ruling adverse to the Applicant may arguably give rise to an application to the Federal Court because the consequence of the ruling will be to prevent the Applicant from pursuing a claim for loss to which it is said to be entitled.
It would not be appropriate to decide the question as a preliminary issue before the substantive hearing. The Tribunal is not presented with all the evidence and has not made findings of fact, nor alternatively have the parties reached agreement as to those relevant facts from which it can be determined that an entitlement to compensation and loss pursuant to s 55(2) of the Act is enlivened.
The Tribunal refuses the application to decide the question as a preliminary point.
Decision
The application is dismissed.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for the decision herein of

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Associate
Dated: 5 March 2020
Date of hearing: 25 October 2019
Representative for the Applicant: Mr K Tredrea, instructed by Mills Oakley
Representative for the Respondent: Mr T Cox QC, instructed by the Australian Government Solicitor

[2020] AATA 394

5 March 2020

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Jurisdiction

Statutory Construction

Remedies

Procedural Fairness

Standing