Nicolson and Minister for Finance

[2019] AATA 2363

Nicolson and Minister for Finance [2019] AATA 2363 (5 August 2019)

Division:GENERAL DIVISION

File Number(s):      2019/2674

Re:Lachlan Nicolson

APPLICANT

Minister for FinanceAnd  

RESPONDENT

DECISION

Tribunal:Senior Member B J Illingworth

Date:5 August 2019

Place:Adelaide

The application for an extension of time is granted.

.............[Sgnd].....................................

Senior Member B J Illingworth

CATCHWORDS

PRACTICE AND PROCEDURE – application for extension of time to lodge an application for review – explanation for delay – prospects of success – prejudice to respondent – extension of time granted

LEGISLATION

Administrative Appeals Tribunal Act 1975

Lands Acquisition Act 1989

CASES

Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

REASONS FOR DECISION

Senior Member B J Illingworth

5 August 2019

INTRODUCTION

1. This is an application brought by Mr Lachlan Nicolson (“the Applicant”) for an extension of time under s 27(9) of the Administrative Appeals Act 1975 (“the AAT Act”) to apply for review of the decision of a delegate of the Minister for Finance (“the Respondent”), namely a final offer of compensation made on 21 December 2017 pursuant to s 76(1)(a) of the Lands Acquisition Act 1989 (“the Act”) in the sum of $44,227.24.

   LEGISLATIVE FRAMEWORK

2. Section 67(1) of the Act states that a person who considers that he or she is entitled to be paid compensation in accordance with this Part may make a claim for compensation.

3. Relevantly, s 70(1) of the Act states:

   (1)  If the Minister is satisfied that the interest in land specified in a claim was acquired by compulsory process from the claimant, the Minister shall, by written notice given to the claimant:

   (a)  …

   (b)  make an offer to the claimant of the amount of compensation to which the Minister considers the claimant is entitled in accordance with Division 2 or 3; and

   (c)  explain to the claimant how the amount offered was arrived at.

4. Pursuant to s 75 of the Act, a person may accept or reject the offer of compensation.

5. Where a person has rejected an offer of compensation, s 76(1) of the Act relevantly states:

   (1)  On receipt of a notice under paragraph 75(b), the Minister shall reconsider the question of the amount of compensation to which the person is entitled and shall, by written notice given to the person:

   (a)make a final offer to the person of the amount of compensation to which the Minister considers the person is entitled in accordance with Division 2 or 3; and

   (b) explain to the person how the amount of the final offer was arrived at.

6. Section 77 of the Act states that where a person has received, or is taken to have received, a notice under subsection 76(1) of the Act making a final offer of compensation, the person may, by notice in writing given to the Minister, accept or reject the final offer.

7. Section 81 of the Act relevantly provides:

   (1)  A person who has rejected a final offer of compensation under this Part may apply to the Administrative Appeals Tribunal for a review of the decision of the Minister to make the offer.

   (2)  …

   (3)  Section 29 of the AAT Act applies to the application as if the prescribed time for the lodging of the application with the Tribunal were the period of 3 months commencing on the day on which the notice making the final offer was given, or is to be taken to have been given, to the person.

   (4)  …

   (5)  …

   (6)  …

8. It is noteworthy that upon receipt of a notice under subsection 76(1) of the Act and the making of final offer, there is no time limit imposed by the Act for the recipient to reject or accept that final offer. However, if a recipient wants to invoke the jurisdiction of this Tribunal without first obtaining a grant of extension of time within which to do so, the recipient must reject that final offer and file an application with the Tribunal within three months commencing on the day on which the notice making the final offer was given; in this case within three months of 21 December 2017.

9. Section 29(7) of the AAT Act relevantly provides that the Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.

10. As established in the case of Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 (“Hunter Valley”), factors to be considered in an application for extension of time include:

    (a)the explanation for, and length of, the delay;

    (b)the strength of the Applicant’s case;

    (c)whether there is a significant issue to be determined;

    (d)any prejudice to the Respondent or other persons affected by the decision; and

    (e)whether the Applicant has been resting on their rights.

    BACKGROUND

11. Middleback Investments Pty Ltd (“Middleback”) was the registered proprietor of farming property, namely Roopena Crown Lease Pastoral No. 2337 (“the property”). At the relevant time, the Applicant was one of two directors and shareholders in Middleback. The Applicant occupied a dwelling on the property known as Roopena Homestead (“the Homestead”) pursuant to an unwritten lease agreement between the Applicant and Middleback which commenced in October 1987 and continued indefinitely.

12. In about 2005, the Applicant attended a meeting with Australian Army representatives at which time he and Middleback first became aware that the Australian Government wanted to compulsorily acquire the property. In about October 2012, the Applicant and Middleback became aware of an Acquisition Notice which was contained in a newspaper advising that the Applicant and Middleback had 56 days to vacate the property and the Homestead. The Applicant was not advised in person.

13. The Applicant and Middleback vacated the property in 2013. Thereafter the Applicant and Middleback were in negotiations with the Respondent for compensation arising from the compulsory acquisition. The Applicant and Middleback were represented by legal practitioners in that process.

14. The Applicant and his family had occupied the property for five generations equating to nearly 100 years.

15. On 21 December 2017, the Applicant’s legal representatives received, on his behalf, a final offer of compensation with respect to his equitable leasehold interest in the Homestead. The final offer was in the sum of $44,227.24. The Applicant had previously made claims under s 67 of the Act for sums in excess of $300,000.00 for solatium, residential rent, and disturbance costs which included storage rent and legal costs.

16. The final offer sought to compensate the Applicant for solatium, relocation and legal professional costs, but not for the disturbance costs claimed by the Applicant.

17. The Applicant was upset with the final offer. He terminated his lawyer’s instructions. He has thereafter been unrepresented in relation to the compulsory acquisition and his compensation claim. He did not reject nor accept that final offer. Middleback continues to be represented by the same lawyers to date.

18. Approximately one year after the Applicant received his final offer, Middleback received its final offer in about December 2018. That final offer was rejected and Middleback currently has an application before the Tribunal.

    CONSIDERATION

19. The Applicant submitted that at the time of receipt of the final offer he knew of the relevant provisions of the Act and his right to apply to this Tribunal for a review of that decision. He submitted that he was, as a result of the conduct of the Commonwealth, the Minister, and the compulsory acquisition of his family’s property, suffering from stress and distress. He acknowledged that he did not reject the final offer. He said he was uncertain what to do in respect of that offer and was concerned that if he had rejected it he would lose the sum of money offered to him by the Respondent.

20. The Applicant said that it was at about that time that he was being treated for depression. A report of Dr Li-sien Neoh was before the Tribunal which confirmed that Dr Neoh had been treating the Applicant for depression for 18 months from in or about June 2013, and thereafter the Applicant decided to wean himself off medication because he did not feel it assisted him. The Applicant said that he continued to be depressed but was not on medication in the period immediately following receipt of his final offer. His condition was exacerbated by his father passing away approximately 2 ½ years ago and thereafter having to provide increased support and assistance to his mother who lived in Adelaide. He said that he travelled to Adelaide at least monthly from Whyalla to provide guidance, support and assistance to his mother. The Tribunal accepts the Applicant’s submission in respect of those personal issues that he was facing at the time and its impact upon him and his decision not to address the final offer expeditiously.

21. The Applicant also provided to the Tribunal his motor-vehicle log dated 17 December 2017 to 17 March 2019 which affirmed various jobs he had undertaken in rural Australia which took him away from Whyalla and his access to legal advice, the internet, telephone and other communication services, and personal supports. He undertook employment because of his loss of business and livelihood arising from the compulsory acquisition of his family property and because he needed to maintain employment and some income.

22. The Applicant readily acknowledged he did not reject the final offer and file an application for review before the Tribunal within the legislative timeframe. He said that it “all became too hard”. However, after Middleback received its final offer and rejected it, he decided it was time to deal with his outstanding issues. Once he made that decision, he acknowledged it only took a few days to deal with the outstanding issues and bring proceedings before the Tribunal.

23. The Applicant filed an application for extension of time within which to file an application for review of the final offer. That application was filed without the Applicant having first rejected the final offer in accordance with s 77 of the Act. That application was approximately 47 weeks out of time. Following directions hearings before the Tribunal, the Applicant withdrew that initial application, rejected the final offer, and applied for another extension of time within which to file an application for review of the final offer. It is the latter application for extension of time that is now before the Tribunal. It was approximately 60 weeks out of time.

24. The Tribunal indicated that insofar as the Applicant had filed his initial application 47 weeks out of time, it was done so because of a misunderstanding of the legislative framework and that the additional 13 weeks to remedy that position should not be to the Applicant’s detriment. The Respondent did not disagree with that approach.

25. The Respondent’s argument referred the Tribunal to the general principles relating to an application for grant of extension of time as outlined in Hunter Valley.

26. Until recently, the Applicant had neither accepted nor rejected the final offer. Hence, it could not be said that the Respondent had proceeded on the basis that the final offer was finally determined. Further, Middleback had rejected its final offer and that matter was before the Tribunal. Counsel for the Respondent did not seek to submit that there was a detriment to the Respondent arising from the failure of the Applicant to bring his application within time or arising from a decision to grant an extension of time within which to now bring the application. That concession was proper in all the circumstances.

27. The Respondent opposed an extension of time on the basis that the explanation for the delay was inadequate because there are periods of inactivity in the motor-vehicle logbook and the Applicant’s treatment for depression is not relevant to the period in question. The Respondent submitted that the length of delay was significant and the application generally lacked merit.

28. In summary, the Respondent referred correctly to the substantive issues in dispute being the Applicant’s entitlement to rental costs for the loss of the residence and storage following the acquisition of the Homestead. It was submitted that Middleback paid the Applicant’s rental at the Homestead, continued to pay rent at his residential address including storage, that the Applicant was a director and shareholder of Middleback, and that the amount of rental payments made by Middleback are recorded against the Applicant’s shareholder loan account and treated as unfranked dividends which amounts to a gain to the Applicant. It was submitted that to compensate the Applicant for these disturbance costs would be, in effect, to compensate Middleback, that Middleback had already been compensated for the market value of the Homestead, and to now compensate the Applicant would amount to double recovery which was impermissible. In effect, it was submitted that to compensate the Applicant would have the effect of double dipping; and accordingly the application is without merit.

29. The final offer to Middleback was made in January 2019; approximately 13 months after the final offer that was made to the Applicant. In respect of the final offer made to Middleback, that final offer was rejected within three months of the date of receipt, and an application was filed with the Tribunal to review that final offer. That application remains pending before the Tribunal.

30. Arguably questions arising from the intended application may include whether the Applicant was entitled to each of the heads of compensation claimed by him, and in particular disturbance costs of residential rent, and disturbance costs of storage and, if so, the quantum of each; the nature of the financial arrangement between the Applicant and Middleback and its impact upon the claimed heads of compensation; and the entitlement of each of them, the Applicant and Middleback, to such compensation in whole or in part to the exclusion of the other, or at all.

31. Given the total sum in relation to those disturbance costs exceeds $250,000.00, should the Applicant rightly be the sole beneficiary of such compensation, then, in the absence of a grant of extension of time, any compensation payable to Middleback may be substantially to the detriment of the Applicant.

32. If the application by the Applicant was the only application before the Tribunal in relation to compensation for the land acquisition, the Tribunal would have less sympathy for the granting of an extension of time within which to bring the application to review the final offer made to the Applicant. However, as there is a competing claim for compensation by Middleback, unless the Applicant is given the opportunity to be heard, it is arguable that Middleback and its shareholders may be compensated to the detriment of the Applicant’s rightful entitlement. The underlying consideration is to whom compensation is rightly payable, if at all, and the amount of that compensation.

33. The delay in bringing the application out of time does not cause any detriment to the Respondent. Further, there is a need to determine the competing interests of the Applicant and Middleback and to ensure that the justice of the matter is done and is seen to be done. Accordingly, the Tribunal is satisfied that it is reasonable in all the circumstances to extend the period of time within which the Applicant may file an application for review to 17 June 2019.

    DECISION

34. The application for extension of time is granted.

I certify that the preceding 34 (thirty-four) paragraphs are a true copy of the reasons for the decision herein of Senior Member B J Illingworth

......[Sgnd]..............................

Associate

Dated: 5 August 2019

Date of hearing:	23 July 2019
Applicant:	In person
Advocate for the Respondent:	Cameron Retallick, Australian Government Solicitor