Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads
[2012] QLC 9
•13 March 2012
LAND COURT OF QUEENSLAND
CITATION:Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads [2012] QLC 0009
PARTIES:Ostroco Pty Ltd
ACN 074 629 520
(Applicant)
v.
Chief Executive, Department of Transport and Main Roads
(Respondent)
FILE NO:AQL020-11
DIVISION:General Division
PROCEEDING: Application to determine compensation under the Acquisition of Land Act 1967
DELIVERED ON: 13 March 2012
DELIVERED AT: Brisbane
HEARD ON: 13 and 14 February 2012
HEARD AT:Brisbane
MEMBER:Mr WA Isdale
ORDER/S:1. The application for compensation is refused.
2.Any application for costs is to be filed and served within 14 days of this decision.
3.Any response to such an application is to be filed and served within 14 days thereafter.
CATCHWORDS: Acquisition of Land Act 1967, s.18(3)
City of Brisbane Improvement Act 1916, s.16
Constantine Drake and Anor v Brisbane City Council (1973) 40 CLLR 208
GW & KM Gorlick Industries Pty Ltd v Sunwater (A99-28), Land Court, Brisbane, 31 May 2001
Hudsons and Sons Proprietary Limited v The Commissioner of Main Roads (1981-82) 8 QLCR 150A. Michael v Brisbane City Council (1970) 37 CLLR 5
The Minister v The New South Wales Aerated Water and Confectionery Company Limited 1916 22 CLR 56
W.J. and C.D. Neep v. Gold Coast City Council (1981-82) 8 QLCR 234
Pengly v Commissioner for Railways (1951) 69 WN (NSW) 25
Tooth v Brisbane City Council (1928) 41 CLR 212
APPEARANCES: PW Hackett, instructed by H Drakos & Company, solicitors for the applicant
D Gore QC, instructed by Clayton Utz, solicitors for the respondent
Background
The applicant company operates a real estate business under a franchise from a well known name in that industry. At all relevant times it has operated from leased shop-front premises located at shop 17, Coorparoo Shopping Mall, 264 Old Cleveland Road, Coorparoo.
The respondent, as constructing authority for the State of Queensland, acquired the estate in fee simple of the land pursuant to the Acquisition of Land Act 1967 (the Act). Taking of Land Notice 1836 of 2009 was published in the Queensland Government Gazette on 31 July 2009 and from that date the fee simple of the land vested in the respondent. The Act provides for rights to compensation according to its terms. The land was taken for the purposes of what is known as the Eastern Busway Project.
The claim for compensation
The applicant, as lessee, has claimed compensation for:
(i) relocation costs $595,338.00
(ii) economic loss in relation to its business as a real estate agent
(a) prior to the taking of the land $102,486.00
(b) after the taking of the land $ 74,303.00(iii) loss of subletting income for the period 1 July 2007 to
30 June 2011 $309,037.41(iv) disturbance items $ 35,960.00
$1,117,124.41Evidence was presented by both parties in relation to the proper amounts attributable under various heads of compensation and both recognised the presence of s.18(3) of the Act. The applicant contended that it has no application in this case, while the respondent argued that it has the effect that no compensation is payable to the applicant.
Section 18(3) of the Acquisition of Land Act 1967
Section 18(3) falls to be considered in its context, relevantly, sub-section (1). Together, they provide as follows:
“18 By whom compensation may be claimed
(1) Subject to subsections (2), (3), (4A) and (5) compensation whereto a right is had under section 12 may be claimed from the constructing authority under, subject to and in accordance with the provisions of this part.
…
(3) Compensation shall not be claimable by or payable to a person who is lessee, tenant or licensee of any land taken if the constructing authority upon written application allows the person’s estate or interest to continue uninterrupted.”
Sub-section 3 has not been amended and remains in the form it was in when the Act was passed in 1967.
Sub-section 3 looms as a potential barrier to claims for compensation in the case of someone in the position of the applicant “if the constructing authority upon written application allows the person’s estate or interest to continue uninterrupted.”
Recognising the significance of sub-section 3 to the present claim, both parties have addressed it prominently at the commencement of their submissions. It is appropriate to consider it first in order to ascertain whether the claim can proceed to matters of quantum.
It was not contentious that the applicant was at all relevant times within the meaning of the expression “a person who is lessee, tenant or licensee of … land taken”. Attention will need to be directed particularly to the remaining words of sub-section 3 which refer to a “written application” and to the constructing authority allowing the person’s estate or interest “to continue uninterrupted”.
It was submitted on behalf of the applicant that s.18(3) has no application in the present case. In this regard reference was made to the dissenting judgment of Isaacs J in Tooth v Brisbane City Council.[1] His Honour considered s.16 of the City of Brisbane Improvement Act 1916 which relevantly provided:
“No compensation shall be payable to any person who is lessee, tenant, or licensee of any land taken if the Council is willing and upon written application agrees to allow his estate or interest to continue uninterrupted.”[2]
It is clear that this provision is nearly identical to the present s.18(3). After setting out s.16 His Honour said:
“That is to say, if notwithstanding actual resumption of the ‘estate or interest’ the lessee, &c., applies in writing to the Council to abandon its resumption pro tanto, and the Council agrees, then no compensation is payable for what in effect is not taken or is restored. But nothing is said about ‘occupation.’ It is ‘estate and interest’ that is spoken of, and apart from sec. 16 the resumption of a lessee’s interest necessarily connotes in law the termination of his right of occupancy, and any subsequent occupancy must arise not out of prior relations, but out of new and independent relations between the lessee and the Council, not as resuming authority but as proprietor. More particularly is that so where the rental is different. The arrangement was not merely new : it was different both as to tenure and amount. It was as if the resuming authority took land owned and occupied by the same person, and then allowed him tacitly or expressly to remain for a time. There would manifestly be no inseparable tie between the resumption and the new relationship. And so here.”[3]
[1] (1928) 41 CLR 212 at 217-224.
[2] (1928) 41 CLR 212 at 224.
[3] (1928) 41 CLR 212 at 224.
In that case the High Court was considering whether clause 9 of a lease of land and buildings on Wickham Terrace, Brisbane, constituted an equitable assignment of a sum assessed as compensation for resumption of the land. The High Court, by a majority, held that it did not. This question is distinct from the matter under consideration in the present case and His Honour’s comments in his dissenting judgment which I have set out are not able to provide useful guidance in this case.
The applicant submits that there was no written application as required by s.18(3) or as explained in Tooth v Brisbane City Council. Indeed, to the contrary the respondent’s officers met with the applicant on 12 May 2010 and by letter dated 14 May 2010 offered to lease the property to the applicant from 1 April 2010 on different terms to the previously existing lease.[4]
[4] Exhibit 7C page 537-538. The letter dated 19 May 2010 at page 539 of Exhibit 7C is the agreement to the terms proposed in the letter of 14 May 2010 from the respondent.
On this aspect, the respondent points to the letter dated 15 April 2010 from Mr Peter Weiss, principal of the real estate agency operated by the applicant and Director of the applicant company.[5] The letter is in the following terms:
This letter shows that in the applicant’s view the costs of relocating its business remained to be negotiated and that he expected to receive compensation for that.
[5] Exhibit 2.
Is this a written application?
Is this letter an application as referred to in s.18(3)? Clearly, it does not refer to the provision or use its words. The substance of the letter is that it expresses a willingness to pay rent for the premises and expresses a belief, that the terms of the lease formerly had from the then owner, would continue to apply. Following as it does from the fact of the acquisition, its reference to the belief that the terms and conditions of the previous lease would continue to apply demonstrates a view that continuity of the previous arrangements, those pre-dating the resumption, is in expectation in return for a renegotiated rental sum.
I am satisfied that the letter of 15 April 2010 from, effectively the applicant, to effectively the respondent, was a written application to the constructing authority within the meaning of s.18(3) to allow the applicant’s estate or interest to continue.
It was contended on behalf of the applicant that by the respondent’s letter of 14 May 2010 the respondent implicitly accepted that s.18(3) did not apply. The letter states a preparedness to enter into a lease agreement on a month to month basis commencing on 1 April 2010 and ends with an expression urging that a compensation claim be submitted “in the immediate future”. This reference to a compensation claim does indicate what may have been a then shared view but cannot have the effect of varying what the Act provides and I do not accept that it has any relevant operative effect.
Was the applicant’s estate or interest interrupted?
It was not contentious that the applicant’s occupation of the leased premises has been continuous in that its business has continued to operate there. The applicant however contended that its estate or interest was interrupted.
It was not disputed that the applicant had a reasonable expectation that, if the acquisition had not occurred, the previous owner would have given the applicant a further lease on similar terms after the expiry of the current lease on 31 December 2011. With the acquisition, there was no lease between 31 July 2009 and 31 March 2010 and the respondent offered only a month to month tenancy from 1 April 2010. In that respect, and because its monthly rent is now less, the applicant claims that it does not have what it had before the resumption and that its interest has been interrupted.
In support of the proposition that the applicant’s estate was interrupted, Counsel for the applicant referred to the decision of the Land Appeal Court in A. Michael v Brisbane City Council.[6] In assessing compensation for the acquisition of land, the Land Appeal Court was of the view that the long history of the monthly tenure in that case would give an intending purchaser confidence in a lengthy secure tenure which would have been reflected in what the purchaser would have been prepared to pay. The then President of the Land Court, Mr Smith, made a similar finding in Hudsons and Sons Proprietary Limited v The Commissioner of Main Roads.[7]
[6] (1970) 37 CLLR 5. It was followed, unwillingly, by the member in W.J. and C.D. Neep v. Gold Coast City Council (1981-82) 8 QLCR 234.
[7] (1981-82) 8 QLCR 150. The claimant had every reason to expect that but for the acquisition it would have been able to continue to win and sell clay from its land. This virtual certainty would have added value in the eyes of a purchaser and was compensable.
In GW & KM Gorlick Industries Pty Ltd v Sunwater[8] the Judicial Registrar, applying Hudsons & Sons Proprietary Limited v The Commissioner of Main Roads[9], had regard to the irrigation potential of the land notwithstanding that there were no current licences authorising that use at the date of acquisition of the land.
[8] Land Court, Brisbane 31 May 2001. A decision of the Judicial Registrar.
[9] (1981-82) 8 QLCR 150.
It was submitted on behalf of the respondent that some authorities support the proposition that the prospect of a further lease being granted is not to be taken into account in assessing compensation[10] but some authorities are to the contrary.[11]
[10] The Minister v The New South Wales Aerated Water and Confectionery Company Limited (1916) 22 CLR 56.
Pengly v Commissioner for Railways (1951) 69 WN (NSW) 25.
Constantine Drake and Anor v Brisbane City Council (1973) 40 CLLR 208 at 212.
[11] A. Michael v Brisbane City Council (1970) 37 CLLR 5.
The respondent’s position was that the prospect of renewal of the lease was irrelevant in view of the clear words of s.18(3).
Whether or not the prospect of renewal of the applicant’s lease may have a value compensable after acquisition is a different question to the meaning of the words in sub-section 3. In the context of the Act the concept of the applicant’s estate or interest continuing uninterrupted must be determined leaving the fact of the acquisition to one side, otherwise the words could not have any useful meaning since each acquisition would be an interruption.
The word “interrupt” is not defined in the Act. The Concise Oxford Dictionary[12] defines it as, inter alia:
“Act so as to prevent from proceeding continuously … ; obstruct; … break the continuity of”
The Shorter Oxford English Dictionary[13] gives the meaning as:
“To break in upon; to break the continuity of; to break off, hinder the course of, cause to cease or stop;”
The Macquarie Dictionary[14] defines “interrupt” as:
“To make a break in (an otherwise continuous extent, course, process, condition, etc); to break off or cause to cease, as in the midst or course : to stop (a person) in the midst of doing or saying something; esp. as by an interjected remark; to cause a break or discontinuance;”
[12] The Concise Oxford Dictionary of Current English. 6th edn. Oxford.
[13] The Shorter Oxford English Dictionary on Historical Principles. 3rd edn. Oxford.
[14] The Macquarie Dictionary. Second Edition.
In view of its context in the Act in which it is used and the meanings recorded in the dictionaries to which I have referred I am satisfied that “uninterrupted” in s.18(3) means that there was unbroken enjoyment of the estate or interest.
Leaving aside the fact of acquisition and the resultant change of owner as a determinant of the presence of an interruption, I conclude for the reasons I have given that a person in the position of the respondent will, within the meaning of s.18(3), allow the estate or interest of a person in the position of the applicant to continue uninterrupted where it allows unbroken enjoyment of the substantive benefit conferred by its interest, in this case the right to occupy.
In the present case the applicant has at all relevant times enjoyed continuously its occupancy of the premises and I accordingly find that s.18(3) of the Act applies to the facts of the case and operates according to its terms to provide that compensation shall not be claimable by or payable to the applicant.
The parties have not made submissions on the matter of costs of the proceedings and should they wish to do so, an application would be able to be considered within the framework provided by s.27 of the Act.
Orders
1.The application for compensation is refused.
2.Any application for costs is to be filed and served within 14 days of this decision.
3.Any response to such an application is to be filed and served within 14 days thereafter.
HIS HONOUR WA ISDALE
MEMBER OF THE LAND COURT
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