Redland Shire Council v Edgarange Pty Ltd
[2008] QLAC 109
•30 May 2008
LAND APPEAL COURT OF QUEENSLAND
CITATION: Redland Shire Council v Edgarange Pty Ltd [2008] QLAC 0109 PARTIES: REDLAND SHIRE COUNCIL
(appellant)v. EDGARANGE PTY LTD
(respondent)FILE NOS: LAC2007/0705 DIVISION: Land Appeal Court of Queensland PROCEEDING: An appeal from a decision of the Land Court regarding the formula for calculating compensation under the Acquisition of Land Act 1967 (Qld). ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 30 May 2008 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBERS: White J
Mr J J Trickett
Mr R P Scott
Joint reasons for judgment of White J and Mr J J Trickett, Mr R P Scott dissenting.ORDER: The appeal be dismissed CATCHWORDS: REAL PROPERTY – RESUMPTION OR ACQUISITION OF LAND – COMPENSATION – STATUTORY RIGHT TO COMPENSATION – CONSTRUCTION OF STATUTE – where land is down zoned so as to give rise to a claim for compensation for injurious affection – where that land is subsequently resumed under the same planning scheme so as to give rise to a claim for compensation under the Acquisition of Land Act 1967 (Qld) – whether the principle of Point Gourde in reverse applies
Acquisition of Land Act 1967 (Qld), s 5, s 7, s 12, s 15, s 18, s 19, s 20, s 24, s 26,
Integrated Planning Act 1997 (Qld), s 5.4.4, 5.4.11
Land Court Act 2000 (Qld), s 55
Local Government Act 1936 (Qld), s 10, s 11, s 12, s 13, s 14
Local Government (Planning & Environment) Act 1990 (Qld), s 3.5Baltic Shipping Co v Dillon [1993] HCA 4; (1992-3) 176 CLR 344, cited
Boncristiano v Lohmann [1998] VSC 228; [1998] 4 VR 82, discussed
Burmah Oil Pty Ltd v Lord Advocate [1965] AC 75, cited
Cox v Commissioner of Water Resources (1992) 14 QLCR 304, cited
Director of Buildings and Lands v Shun Fung Ltd [1995] 2 AC 111; [1995] 1 All ER 846, considered
Doolan Properties Pty Ltdv Pine Rivers Shire Council [2000] QCA 076; [2001] 1 QdR 585, cited
Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547, considered
Housing Commission of New South Wales v San Sebastian [1978] HCA 28; (1978) 140 CLR 196, cited
Marshall v Director-General, Department of Transport [2001] HCA 37; [2001] 205 CLR 603, cited
Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426, considered
Murphy v Overton Investments Pty Ltd [2004] HCA 3; (2003-2004) 216 CLR 388, cited
Nelungaloo Pty Ltd v The Commonwealth [1947] HCA 57; (1948) 75 CLR 495, appliedPointe Gourde Quarrying and Transport Co Ltd v
Sub-Intendent of Crown Lands [1947] AC 565, appliedRe An Arbitration betweenLucas and The Chesterfield Gas and Water Board [1909] 1 KB 16, considered
Rugby Joint Water Board v Shaw-Fox [1973] AC 202, discussed
Sharman v Evans [1977] HCA 8; [1976-7] 138 CLR 563, cited
Sorrento Medical Services Pty Ltd v Chief Executive, Department of Main Roads [2007] QCA 73; [2007]
2 Qd R 373, cited
South Eastern Railway Co v London County Council [1915] 2 Ch 252, discussed
Spencer v The Commonwealth [1907] HCA 70; (1907)
5 CLR 418, cited
The Crown v Murphy [1990] 64 ALJR 593, appliedTM Burke Estates Pty Ltd v Noosa Shire Council [1998] 2 Qd R 448, cited
Toffolutti v Council of the City of Townsville (1984)
10 QLCR 81, distinguished
Viscount Camrose v Bassingstoke Corporation [1966]
1 WLR 1100, considered
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5, considered
Waters v Welsh Development Agency [2004] 2 All ER 915, discussedWilson v Liverpool Corporation [1971] 1 WLR 302, discussed
APPEARANCES: Mr GJ Gibson QC with Mr S Ure for the appellant
Mr CL Hughes SC with Mr J Horton for the respondentSOLICITORS: McCarthy Durie Ryan Neil Solicitors for the appellant
King and Co Solicitors for the respondent
WHITE J AND J J TRICKETT
: The respondent to this appeal,
Edgarange Pty Ltd (‘Edgarange’), was the registered proprietor of land taken
by the appellant, Redland Shire Council (‘the Council’) pursuant to the
Acquisition of Land Act1967 for road and sewerage treatment purposes on
8 October 2004. The land taken was part of a larger holding owned by
Edgarange near Capalaba, comprising some 27 hectares. The land acquired consisted of Lot 701 containing an area of 2.692 hectares and Lot 702 consisting of some 1.873 hectares.
Edgarange made a claim for compensation from the Council pursuant to the Acquisition of Land Act in the sum of $8,000,000 plus $40,760.46 for costs and outlays.
The parties agreed before the learned Member below that to avoid unnecessary costs the Court should hear evidence about and determine as a preliminary question, what would have been the highest and best use of the land before the acquisition. When that had been decided, the parties would then lead evidence concerning the actual value of the land and the amount of compensation. After the publication of the learned Member’s decision concerning the highest and best use, compensation was agreed between the parties on the basis of those reasons in the amount of $5,992,098 which included $34,598 for ‘disturbance’.
In reaching his decision the learned Member accepted Edgarange’s argument that compensation for the land should be assessed as if the Council’s planning scheme, pursuant to which the land was acquired for road and sewerage treatment purposes, did not exist consistently with the principle of compensation known as ‘Pointe Gourde in reverse. The learned Member rejected the Council’s submission that since the land had been injuriously affected by the planning scheme in circumstances giving rise to an entitlement to compensation under applicable local government legislation, that principle did not apply.
The issue on appeal
This appeal raises for consideration a matter said not previously to have been dealt with by this or any other relevant appellate court. The Council contends, as it did below, that since the subject land had been injuriously affected by aspects of its 1988 Plan and provisions in the Local Government Act 1936 and the Local Government (Planning & Environment) Act 1990 provided for compensation to a person whose interest in land had been so affected, the ‘Pointe Gourde in reverse’ principle will not operate on the construction of s 20(2) of the Acquisition of Land Act. The effect is that compensation is to be assessed according to the actual value of the interest in the acquired land on the date when it was taken. That is, when assessing compensation, the planning scheme by which the subject land was acquired is to be taken into account, thereby reducing the value of the land, rather than ignored, which ‘Pointe Gourde in reverse’ mandates.
The point of difference between the parties is thus quite narrow, although the consequences are significant. The Council expressly accepts that the ‘Point Gourde in reverse’ principle is part of the law of compensation in Queensland, but argues that it does not operate to displace the plain meaning of s 20(2) of the Acquisition of Land Act where there is legislative provision for compensation as a consequence of the planning scheme operating adversely on the subject land.
There is little, if any, factual controversy between the parties and they were able to agree about value for compensation purposes once the basis for calculating it was identified by the learned Member.
Background
The subject parcels of land were part of Lot 3 on RP 165277 comprising some 29 hectares, lying between Redland Bay Road and Coolnwynpin Creek on the
south-eastern periphery of the Capalaba commercial area. The land was substantially cleared of vegetation except in the area immediately along Coolnwynpin Creek, and had been used initially for small crops and then as a turf farm.
Adjoining Lot 3 to the north-west was a sewage treatment plant belonging to the Council – Lot 2 on RP 165277 - having an area of 6.034 hectares, extending to Coolnwynpin Creek. Access was obtained from Smith Street via a narrow section of Lot 3 running alongside its western boundary. The Council had acquired this land many years previously from the original owner of Lot 3.
In 2000 Edgarange, a successful property developer, contracted to purchase Lot 3, save for a small area fronting Redland Bay Road, from the registered proprietor, Daniel John Holzafel, with the immediate intention of developing it as an industrial estate for which there was demand. When Edgarange purchased the land it was zoned ‘Rural/Non-Urban’ under the 1988 Planning Scheme which was then in force. The 1988 Strategic Plan, which formed part of the Planning Scheme, identified a number of preferred dominant land uses. The southern two-thirds of the land was identified as an ‘Industrial Area’ and immediately north a proposed arterial road was identified running generally in an east-west direction through the land. The land between Coolnwynpin Creek and the proposed arterial road corridor and east of the existing sewerage treatment plant had a preferred dominant land use of ‘Public Open Space’. The proposed arterial road was intended to be a limited access road.
In 1998 amendments were made to the Planning Scheme and the preferred dominant use of the land to the south of the proposed arterial road corridor was changed from ‘Industrial’ to ‘Major Centres’. The preferred dominant land use north of the proposed arterial road corridor and south of Coolnwynpin Creek was changed from ‘Public Open Space’’ to a combination of ‘Special Facilities/Special Purposes’ and ‘Special Protection Area’. The land identified for arterial land use in the 1988 Planning Scheme was changed to ‘Future Transport Corridor’.
In August 2000 Edgarange submitted an application to the Council seeking a Development Permit for Material Change of Use (Industrial and various allied uses) from Rural/Non-Urban Zone, and a Stage 1 reconfiguration. The conceptual plan of layout showed the Stage 1 reconfiguration with the balance of the property designated ‘Future Industry’ apart from parkland along Coolnwynpin Creek.
The Council issued a Development Application Decision Notice concerning Edgarange’s application. It required Edgarange to dedicate a 60 metre wide strip of land of about 2.8 hectares for ‘Transportation – Green Space Trailway (TGT Corridor)’ and to provide for the expansion of the existing sewage and treatment plant on Lot 2 by providing an additional two hectares from Lot 3. Dissatisfied with the outcome of negotiations about the conditions, Edgarange filed an appeal to the Planning and Environment Court. On 11 October 2002 the Council served Notices of Intention to Resume on Mr Holzafel, who was still the registered proprietor of the land, for transport/road and sewerage purposes.
On 25 October 2002 the Planning and Environment Court made orders approving a Development Permit for Material Change of Use as requested by Edgarange and the reconfiguration of the land in Stage 1 on certain conditions. The reconfiguration was made in contemplation of Lots 701 (transport corridor) and 702 (sewerage) being resumed with Lot 703 being, as the learned Member observed, ‘to a significant extent severed from the balance of the land to be subdivided and developed for industrial purposes.’[1] This was because Lot 703, comprising 3.598 hectares, fronted Coolnwynpin Creek and ran down to the transport corridor, to the south of which was the industrial subdivision. By notice in the Queensland Government Gazette dated 26 September 2003, the area of land south of Lot 701 (transport corridor) was taken from the ‘Rural Non-Urban Zone’ and given a new zoning of ‘Industry B’.
[1]Edgarange Pty Ltd v Redland Shire Council [2007] QLC 0012 at [16].
By notice published in the Queensland Government Gazette on 8 October 2004, the Council took Lots 701 and 702 by compulsory acquisition pursuant to s 15 of the Acquisition Land Act.
By application dated 26 February 2001, Mr Holzafel and Edgarange made a claim for compensation pursuant to the Local Government (Planning and Environment) Act 1990 and the Integrated Planning Act 1997 from the Council in the sum of $2,494,800. The claim was for injurious affection to the market value of Lot 3 arising out of the inclusion of that land in the Rural/Non-Urban Zone when, prior to 27 February 1998, the land was included in the Industry designation and Public Open Space designation and Transport Corridor in the superseded Strategic Plan. That claim has not been heard.
The Acquisition of Land Act
Land may be taken under and subject to the Acquisition of Land Act 1967 by a constructing authority, which may include a local government, for any purpose set out in the schedule which the constructing authority is authorised or required by a provision of another Act to carry out, s 5. By s 7, a notice of intention to resume land must be served on any person who ‘will be entitled to claim compensation under this Act in respect of the taking of the land concerned’. The subject land was taken pursuant to s 15 and was effective on the day of publication of the notice, s 15(13).
By s 15(14), s 12, which deals with the effect of a gazette resumption notice, applies to a taking under s 15. By s 12(5)
‘On and from the date of the publication of the gazette resumption notice the land thereby taken shall be vested ... and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act ...’.
Part 4 of the Acquisition of Land Act concerns compensation. By s 18(1) a right to compensation which arises pursuant to s 12
‘... may be claimed from the constructing authority under, subject to and in accordance with the provisions of this part.’
Section 19 sets out the way in which a claim for compensation may be made and must include an itemised statement of claim showing the nature and particulars of each item and the amount claimed for each and the total amount of compensation claimed. The approach to compensation is set out in s 20
‘(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage (if any) caused by either or both of the following, namely –
(a)the severing of the land taken from other land of the claimant;
(b)the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land.
(2)Compensation shall 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.
(3)In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.
(4)But in no case shall subsection (3) operate so as to require any payment to be made by the claimant in consideration of such enhancement of value.’
On receipt of a claim for compensation, the constructing authority may make an advance against compensation on certain conditions, not here necessary to set out. Either the constructing authority or the claimant may refer to the Land Court for hearing and determination the matter of the amount of the compensation, s 24(1). The Land Court by s 26(1)
‘... has jurisdiction to hear and determine all matters relating to compensation under this Act.’
The Local Government legislation
The most relevant local government legislation providing for compensation for injurious affection is s 3.5 of the Local Government (Planning and Environment) Act 1990 (repealed)[2]. It provides, relevantly
[2]The Local Government Act 1936, the previous legislation, in ss (10)-(14) made similar provision for compensation for injurious affection. An interest in land is “injuriously affected” if it is reduced in value, TM Burke Estates Pty Ltd v Noosa Shire Council [1998] 2 Qd R 448 at 450.
‘(2) Where land under a planning scheme is –
(a)included in a zone wherein, pursuant to the planning scheme, the only permitted use of the land (other than the continuance of the use to which the land was lawfully being put at the time of the coming into force of the planning scheme and other than a permissible use of the land) is a use for public purposes; or
(b)is affected by a proposed road (including a road widening);
it is to be taken to be injuriously affected pursuant to subsection (1)(a).’
Such a person is entitled to obtain from the local government, compensation in respect of the injurious affection. By s 3.5(7) the time within which a claim for compensation may be made is three years after the date on which the claim arose.
The compensation is to be assessed as provided for in s 3.5(8). The amount of compensation is to be an amount equal to the difference between the market value of the interest immediately after the time of the coming into operation of the provision of the planning scheme by virtue of the operation of which the claim for compensation arose, and what would have been the market value of that interest if the provision had not come into operation.
By s 3.5(9)
‘Where compensation for injurious affection is claimed under this section the local government may at its option, but with the prior approval of the Governor in Council, acquire the land pursuant to its powers under the Acquisition of Land Act 1967 instead of paying compensation for injurious affection’.
Neither party contends that this provision assists in the resolution of the issue under appeal, although counsel for Edgarange venture the submission that it reflects a broad legislative intention extending into the Acquisition of Land Act that there should be a “merging” of the local government claim into an Acquisition of Land Act claim for compensation when both are available and the local government elects to acquire the land. Counsel for the Council contends, correctly, that s 3.5(9), providing for a different situation than the present cannot be employed in this way. However, we are of the view that it may suggest, albeit very faintly, that the legislature inclines towards the Acquisition of Land Act as the principal source of compensation.
The Pointe Gourde principle of construction
Unlike many compensation cases for the compulsory acquisition of land, the Council readily concedes that there was a ‘scheme’ underlying the taking of the land for road purposes which originated in the 1988 Planning Scheme, and a scheme for taking the land for sewerage purposes which originated in the 1998 Strategic Plan.
The approach to compensation known as “the Pointe Gourde principle”, or “Pointe Gourde in reverse principle” is entrenched in practice of land compensation in Queensland. The Council accepts that that is so, but to analyse its argument
that the principle has no role to play in the construction of s 20(2) of the
Acquisition of Land Act,in circumstances where there is also available a statutory entitlement to compensation arising out of the change in local government planning, that principle requires some elaboration. In Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands[3], the Privy Council heard an appeal from the Full Court of the Supreme Court of Trinidad & Tobago concerning the compulsory acquisition of quarry land by the Crown associated with the establishment of a United States of America naval base. The acquisition of this land arose as part of the Lend Lease Arrangements of 27 March 1941 between the United Kingdom and the United States. The United States required for the establishment of the naval base on Trinidad, certain lands owned by the appellants at Pointe Gourde on that island. The Crown compulsorily acquired those lands pursuant to the provisions of the Land Acquisition Ordinance 1941 (UK), the parent Act of which was the Acquisition of Land (Assessment of Compensation) Act 1919 (9 & 10 Geo 5, c57) (UK). On part of the acquired lands there was a large quantity of limestone which the appellants had quarried and sold for many years. In order to consider ‘the principle’ which carries the name of this decision, upon which much depends, it is necessary to say something about the enabling legislation. Section 11(2) of the Ordinance read
‘The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of the Government or the Government of the United Kingdom or any department of either of such Governments or any local or public authority.’
[3][1947] AC 565.
The appeal from the primary tribunal (Supreme Court judge and two assessors) was heard by way of a case stated. It set out that the quarry land had a special suitability or adaptability for the purpose of producing and marketing quarry products and had a market value as quarry land prior to the date of acquisition. The United States had special need of a large quantity of stone for the construction of the naval base. In addition to the special adaptability of the quarry land, the proximity of the quarry land to the base under construction made that land especially suited to the United States’ special needs. The quarry business carried on by the appellants was totally extinguished by the acquisition. In awarding compensation the primary tribunal was largely guided by the estimate it formed of the prospective profits of the quarry business. It considered that the market value of the quarry land and business would be increased if the United States’ needs were supplied from this quarry land on a commercial basis as greater prospective profits might be expected.
The total award was for $101,000 but the appeal related only to $15,000 of that award. The balance of $86,000 included the value of the quarry as a going concern which made due allowance for the ‘special suitability or adaptability’ of the land for the purpose of a quarry. The ‘special adaptability’ covered by the $15,000 was meant to compensate the appellants for the loss of the land’s value in that its proximity to the naval base under construction made it especially suited to the special needs of the Unites States and which could have earned the appellants ‘extra’ profits had the land and quarry remained in their hands.
While their Lordships noted[4] the similarity of s 11(2) of the Ordinance to s 2(3) of the Acquisition of Land (Assessment of Compensation) Act which they said
[4]At 571.
‘... there can be little doubt, was designed to modify the effect of certain decisions of the courts relating to the quantum of compensation in cases of compulsory purchase’
they considered it unnecessary to discuss the historical background of the legislation
‘... as its applicability to the somwehat [sic] peculiar situation presented by this appeal turns, in their opinion, on the actual wording of the enactment.’
They concluded that product of the land rather than the land itself did not come within the exclusion in s 11(2) and, therefore, did not exclude, for that reason, the ‘extra’ $15,000. Nevertheless, they held[5], that the award could not stand because
[5]At 572.
‘[i]t is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition.’
The relevant scheme was not merely the acquisition of the quarry but included the construction of the naval base in its vicinity. In support their Lordships cited the dictum of Eve J in South Eastern Railway Co v London County Council[6] where he set out a number of propositions about compensation for compulsorily acquired land ‘established by authorities binding on this Court’ including
‘... increase in value consequent on the execution of the undertaking for or in connection with which the purchase is made must be disregarded ...’
[6][1915] 2 Ch 252 at 258.
The Court of Appeal in South Eastern Railway approved Eve J’s approach in the circumstances of the compulsory acquisition of part of land owned by a railway company in The Strand by the London County Council to widen The Strand. The railway company also owned land in another street adjoining the land in The Strand. The Council wanted the value of the acquired land to be considered as part of the larger holding which would actually be enhanced by the proposed road widening. The Master of the Rolls, Lord Justice Cozens-Hardy, observed[7], that this was clearly ‘betterment’ of the whole holding but, he added,
‘I think it is quite clear that there is no provision in this Act for taking betterment into consideration.’
This approach emphasises that it is to the legislative enactment permitting the compulsory taking of land that a compensating court must look because, absent legislation or agreement, no government has a right to take land for public purposes[8].
[7]At 262.
[8]Burmah Oil Pty Ltd v Lord Advocate [1965] AC 75.
One further early case may be mentioned which was referred to the Privy Council in argument in Pointe Gourde but was not cited in the judgment, although is discussed with approval in many compensation decisions. In re An Arbitration betweenLucas and The Chesterfield Gas and Water Board[9], Fletcher Moulton LJ observed[10]
[9][1909] 1 KB 16.
[10]At 29-30.
‘The principles upon which compensation is assessed when land is taken under compulsory powers are well settled. The owner receives for the lands he gives up their equivalent, i.e., that which they were worth to him in money. His property is therefore not diminished in amount, but to that extent it is compulsorily changed in form. But the equivalent is estimated on the value to him, and not on the value to the purchaser, and hence it has from the first been recognized as an absolute rule that this value is to be estimated as it stood before the grant of the compulsory powers. The owner is only to receive compensation based upon the market value of his lands as they stood before the scheme was authorized by which they are put to public uses. Subject to that he is entitled to be paid the full price for his lands, and any and every element of value which they possess must be taken into consideration in so far as they increase the value to him.’
His Lordship then turned to what he described as the not happy phrase of ‘special adaptability’ which later exercised the Privy Council in Pointe Gourde. He said[11]
‘The question has arisen only in the cases where the special adaptability is for purposes for which lands are required only when used for works of public utility, which are naturally different from the uses to which lands are put while in private hands, and which therefore do not necessarily influence the price which such lands command in the market. Ought the owner to be entitled to higher compensation by reason of the, to him, useless peculiarities which the lands possess?’
[11]At 30.
In that case land had been acquired by the Board under successive acts of Parliament for a reservoir. The evidence suggested that there were competitors for the land for reservoir purposes in the area, with a number of potential providers of water being identified. His Lordship thus concluded[12]
‘The scheme which authorises the new reservoir only entitles the owner of the land to receive as compensation the value of the land unenhanced by that scheme, and, unless its situation and peculiarities create a market for it as a reservoir site for which other possible bidders exist, I do not think that the single possible purchaser that has obtained parliamentary powers can be made to pay a price based on special suitability merely by reason of the fact that it was easy to foresee that the situation of the land would lead to compulsory powers being some day obtained to purchase it.’
[12]At 35.
The concern that compensation for land compulsorily acquired should only reflect the value to the claimant/owner of the land taken without recourse to the added value which it obtained because of its special suitability for the public purpose for which it was acquired, was similarly expressed when the land was reduced in value. Melwood Units Pty Ltd v Commissioner of Main Roads[13], an appeal from the Full Court of the Supreme Court of Queensland to the Privy Council, was concerned with the compulsory acquisition of land for highway purposes which the claimant had hoped to sell for a shopping centre. Their Lordships said[14]
[13][1979] AC 426.
[14]At 434.
‘Under the principle in Pointe Gourde Quarrying & Transport Co Ltd v Sub-Intendent of Crown Lands [1947] A.C. 565 the landowner cannot claim compensation to the extent to which the value of his land is enhanced by the very scheme of which the resumption forms an integral part: that principle in their Lordships’ opinion operates also in reverse. A resuming authority cannot by its project of resumption destroy the potential of the whole 37 acres for development as a drive-in shopping centre, and then resume and sever on the basis that that destroyed potential had never existed. Moreover, in their Lordships’ opinion the principle remains applicable in a case such as the present, notwithstanding that planning permission had not been given for the whole 37 acres and would not have been given, when the lack of such permission was manifestly due to the expressway project, and it is established that, without the expressway project, such planning permission would have been given for the whole 37 acres. To hold otherwise in this case would enable the acquiring authority to inflict by its project the same injustice at one remove. Further, as to the premise of the Land Appeal Court above mentioned, if it is meant thereby that because the developer bought the land with knowledge he should not, on some principle, be allowed compensation except on the basis of what he knew, this would be doubly wrong: a person buying land buys with it the right to compensation for resumption and severance.’
A little later[15] they summarized
‘In their Lordships’ opinion it is a part of the common law deriving as a matter of principle from the nature of compensation for resumption or compulsory acquisition, that neither relevantly attributable appreciation nor depreciation in value is to be regarded in the assessment of land compensation.’
[15]At 435.
The High Court in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority[16] queried what was meant by the expression ‘the common law’ in this passage referring to Lord Pearson’s observation in Rugby Joint Water Board v Shaw-Fox[17] where he said of the Pointe Gourde ‘principle’ that it could not be described as a common law principle
[16][2008] HCA 5 at [29].
[17][1973] AC 202
‘... because compulsory acquisition and compensation for it are entirely creatures of statute.’[18]
Lord Pearson continued
‘[t]he Pointe Gourde principle in my opinion involves an interpretation of the word “value” in those statutory provisions which require the compensation for compulsory acquisition to include the value of the lands taken.’[19]
[18]At 214.
[19]At 214 -5.
Later in Walker Corporation, the High Court expressed concern[20] about the reference in Pointe Gourde to the underlying ‘scheme’ whereby the land was taken.
‘What was meant in Pointe Gourde and other cases by references to “the scheme” does not readily appear. ... In the context of statutory compulsory acquisition of land, a “scheme” may be taken to be a broad expression derived from the promotion in the 19th century of bills for a special statute to permit the construction of canals, railways, dams and other complex infrastructure. The “scheme” referred to the obtaining by the promoters of compulsory powers without which their proposal could not be implemented. With that background in mind the description in Pointe Gourde of the resumption of land to assist the construction of an air force base under Lend Lease as part of a “scheme”, may readily be understood.’
[20]At [46].
Lord Widgery had answered this concern in Wilson v Liverpool Corporation[21]
‘Whenever land is to be compulsorily acquired, this must be in consequence of some scheme or undertaking or project. Unless there is some scheme or undertaking or project, compulsory powers of acquisition will not arise at all, and it would, I think, be a great mistake if we tended to focus our attention on the word “scheme” as though it had some magic of its own. It is merely synonymous with the other words to which I have referred, and the purpose of the
so-called Pointe Gourde rule is to prevent the acquisition of the land being at a price that is inflated by the very project or scheme which gives rise to the acquisition.’
[21][1971] 1 WLR 302 at 310.
The court in Walker Corporation was at pains to emphasise that it is the terms of the compensation legislation which will be determinative of the approach to compensation, clear of any gloss derived from cases construing earlier English Acts. The need to be alert not to transpose dicta from cases considering different legislative provisions is readily seen when considering relevant Australian legislation concerning compulsory acquisition of land. This is conveniently set out in Jacobs’ The Law of Resumption and Compensation in Australia[22] to which the Court was referred by Mr Gibson QC for the Council. Although variously expressed, and, in varying degrees, the Pointe Gourde principle has received statutory recognition in every Australian resumption statute except Queensland.[23] The learned author notes that
‘The principle is so entrenched that, even in Queensland where there is no statutory expression of this principle at all, and where the resumption statute disregards increases but not decreases in value, the Pointe Gourde principle has and will continue to receive judicial recognition’.[24]
[22](1998).
[23]Jacobs at para 27.3, p509.
[24]At para 27.4, p509.
This is because, as a matter of statutory construction, the courts have concluded that the legislature may be assumed to be aware of this long-held and widely accepted construction of what is meant by ‘value’ at the time of acquisition. Lord Pearson in Rugby Joint Water Board[25] quoted Lord Denning MR in Viscount Camrose v Bassingstoke Corporation[26]
‘The legislature was aware of the general principle that, in assessing compensation for compulsory acquisition of a defined parcel of land, you do not take into account an increase in value of that parcel of land if the increase is entirely due to the scheme involving the acquisition. That was settled by Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565.’
Or, as the High Court noted in Walker Corporation, what is in play are general considerations which have been influential in fleshing out compulsory acquisition provisions drawn in brief terms[27].
[25]At 762.
[26][1966] 1 WLR 1100 at 1107.
[27]At para 35.
However, McHugh J warned against the dangers of ‘slavishly’ following judicial decisions of the courts of other jurisdictions in respect of similar or even identical legislation. In Marshall v Director-General, Department of Transport[28] his Honour noted
‘The duty of courts, when construing legislation, is to give effect to the purpose of the legislation. The primary guide to understanding that purpose is the natural and ordinary meaning of the words of the legislation. ... Judicial decisions are not substitutes for the text of legislation although, by reason of the doctrine of precedent and the hierarchical nature of our court system, particular courts may be bound to apply the decision of a particular court as to the meaning of legislation.’
[28][2001] 205 CLR 603 at 632.
Nevertheless, while Housing Commission of New South Wales v San Sebastian[29] was concerned to construe s 124 of the Public Works Act (1912) NSW which reproduced in statutory form the Pointe Gourde principle, Jacobs J observed[30]
[29](1978) 140 CLR 196.
[30]At 205.
‘This provision states in statutory form a principle which had been developed in the cases independently of express statutory provisions. See Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands’
This approach to construing the Acquisition of Land Act provisions about compensation was affirmed for Queensland by the High Court in The Crown v Murphy[31] where the court held
‘One purpose of this principle is to ensure that a resuming authority does not employ planning restrictions to destroy the development potential of the land and then assess compensation for its resumption on the basis that the destroyed potential had never existed.’[32]
[31][1990] 64 ALJR 593.
[32]At 595.
Mr Gibson referred, as did the learned Member, to the much-quoted statement of Dixon J in Nelungaloo Pty Ltd v The Commonwealth[33] as governing the approach to s.20(2).
‘Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it. You do not give him any enhanced value that may attach to his property because it has been compulsorily acquired by the governmental authority for its purposes (Vyricherla Narayana Gajapatiraju v. Revenue Division Officer, Vizagapatam [(1939) AC 302 at 318]. Equally you exclude any diminution of value arising from the same cause. The hypothesis upon which the inquiry into value must proceed is that the owner had not been deprived by the exercise of compulsory powers of his ownership and of his consequent rights of disposition existing under the general law at the time of acquisition.’
[33](1948) 75 CLR 495 at 571-2.
Mr Gibson then referred to the observations of the Privy Council in Director of Buildings and Lands v Shun Fung Ltd[34] which he submitted further governs the construction of s 20(2) in the present circumstances. The Privy Council was hearing an appeal from the Court of Appeal of Hong Kong as to whether the amount of compensation which a claimant should be awarded when his land was resumed included the cost of relocating his business. The dispute concerned issues of remoteness and causation. The relevant legislation provided for an amount for the ‘loss or damage to a business conducted by a claimant ...’. Their Lordships said[35]
‘The purpose of these provisions, in Hong Kong and England, is to provide fair compensation for a claimant whose land has been compulsorily taken from him. This is sometimes described as the principle of equivalence. No allowance is to be made because the resumption or acquisition was compulsory; and land is to be valued at the price it might be expected to realise if sold by a willing seller, not an unwilling seller. But subject to these qualifications, a claimant is entitled to be compensated fairly and fully for his loss. Conversely, and built into the concept of fair compensation, is the corollary that a claimant is not entitled to receive more than fair compensation; a person is entitled to compensation for losses fairly attributable to the taking of his land, but not to any greater amount. It is ultimately by this touchstone, with its two facets, that all claims for compensation succeed or fail.’
Their Lordships recognised[36], that the ‘general principle of fair and adequate compensation bristles with problems’ and ‘it [fairness] suffers from the drawback of being imprecise, even vague, in practical terms ...’. Mr Gibson submitted that “fairness” required the Council’s construction of s 20(2).
[34][1995] 2 AC 111.
[35]At 125.
[36]At 126.
One further case needs to be discussed. The learned Member referred counsel to Toffolutti v Council of the City of Townsville[37] as a case which, at first sight, appears to support the Council’s contentions. Mr Gibson and Mr Ure found solace in Toffolutti in their written submissions but, it is fair to say, by the time Mr Gibson was developing oral submissions, he was rather less attached to it.[38]
[37](1984) 10 QLCR 81.
[38]Appeal transcript 24.
The learned Member below devoted considerable effort to analysing the decision but expressed some difficulty in understanding the basis for the Court’s apparent acceptance of the proposition that the right to seek compensation under the Acquisition of Land Act was limited by the operation of s 33(10) of the Local Government Act 1936. Mr Hughes and Mr Horton for Edgarange suggested, in their written submissions, that the key may lie in the wording of s 33(10) as it was at the time, a submission which we accept. It is unnecessary to set out the facts of Toffolutti in the same detail as did the learned Member; the following from the head note will suffice.
‘From a parent parcel of 1.8514 hectares fronting Bergin Road, Cranbrook, the respondent Council resumed, for park purposes, an area of 5207 m² within 60 metres of the high bank of the Ross River.
Since 1959 the respondent Council had a policy to acquire land along the banks of the Ross River for Riverside Parkland and that policy prohibited the construction of buildings within 60 metres of the high bank of the river. The 1967 Town Plan – the current plan at date of the appellants’ purchase of the parent parcel – showed land within 60 metres of the high bank as being zoned “Proposed Open Space” with the balance of the parent parcel being zoned “Rural”. The 1982 Town Plan showed a strip 9 metres wider as being zoned “Public Open Space” with a notation arrowed to the boundary line indicating such line was “Subject to survey. Generally 60m from high bank.”. The balance of the land was zoned “Residential A”.
The appellants, shortly after their purchase, had been given approval to subdivide and rezone the parent parcel up to a line 60 metres from the high bank but this subdivided area neither occupied all the land zoned “Rural” on the 1967 Plan nor the land zoned “Residential A” on the 1982 Plan, the boundary of which was noted with a dimension indicating 160 metres from Bergin Road. This dimension and the concept of 60 metres from the high bank did not meld.
The Court below adopted the view of the valuer for the respondent Council that all of the resumed land was zoned “Proposed Open Space” and also his estimate of compensation, namely $1,900.
In allowing the appeal, the Court held:-
(a)the appellants could not receive anything more for the land zoned “Public Open Space” than its value in that zoning because under the provisions of section 33(10) of the Local Government Act 1936-1983 the right to compensation in that the land had been injuriously affected by such zoning rests with their vendor;
(b)as to the balance of the parent parcel, any knowledge that the appellants had, at date of purchase, as to the respondent Council’s policy which led to ultimate resumption, in no way affected their right to full compensation and the quantum thereof;
(c)the purpose of the resumption (the underlying scheme) as well as the zoning and planning in anticipation thereof must be ignored when assessing compensation;
(d)the 1982 Town Plan – the plan current at date of resumption – was a plan prepared with the Parkland Scheme (the underlying scheme) in mind. Its zonings should therefore be ignored for purposes of assessing compensation. The apparent conflict between the zoning boundaries thus becomes irrelevant;
(e)but for the zoning in anticipation of resumption and the Parkland Scheme, the appellants could have obtained approval for subdivision of an area up to 160 metres from Bergin Road with park contribution coming from land zoned “Public Open Space”; ...’
Mr Gibson particularly drew the Court’s attention to the following passage[39]
‘We agree with counsel for the appellants that section 33(10) of the Local Government Act restricts the right to compensation for injurious affection flowing from the “Proposed Open Space” zoning to the appellants’ vendor so that for that part of the parent parcel zoned “Proposed Open Space” at date of purchase, the appellants before us are entitled to receive compensation for its acquisition on the basis of its restricted value only.’
[39]At 88.
The previous owner of the land who had sold it to the Toffoluttis had vested in him the right to compensation for the difference in market value of the land in its Public Open Space zoning compared with its potential for re-zoning to Residential A. Pursuant to s 33(10)(b)(i) of the Local Government Act 1936 the entitlement to compensation only vested when the land was first sold although the entitlement arose when the scheme was first proposed many years earlier. That this was understood by the court, as Mr Hughes and Mr Horton submitted, is clear from a passage at 87-88
‘[Counsel] submits that the appellants could not receive anything more for the land zoned “Public Open Space” than its value in that zoning because, under the provisions of s 33 subsection 10 of the Local Government Act 1936-1983 the right to compensation in that the land has been injuriously affected by such zoning rested with the vendor.’
The Court explained its approach[40]
‘In formulating a plan for the “before” resumption valuation, we have to envisage, on the authorities previously referred to [Pointe Gourde], that the parkland scheme and its ancilliary provisions did not exist but it is relevant to our consideration that the appellants have a limited right to compensation in respect of the area zoned “Proposed Open Space” under the 1967 Town Plan because of the provisions of section 33(10) of the Local Government Acts. This area we are satisfied commenced about 169 metres back from Bergin Road. The 1982 Town Plan appears to be a plan prepared with the parkland scheme in mind. Its zonings have therefore been ignored for our purpose and the apparent conflict between the zoning boundaries thereon becomes irrelevant. The appellants retain the right to full compensation (including injurious affection) for that area of land outside the former “Proposed Open Space” and now included in the “Public Open Space” and “Residential A” zones. But for the zoning in anticipation of resumption and the parkland scheme, we are satisfied the appellants could have obtained approval for a subdivisional plan in accordance with Mr Reynolds’ plan PS 84/1242A, that is up to 160 metres from Bergin road with the park contribution coming from the land zoned “Public Open Space”.
We note that the parties are now in agreement, in the special circumstances of this case (section 33(10) of the Local Government Act), that the land zoned “Proposed Open Space” falls to be valued as land in that zoning with all the limitations attaching thereto.’
Once it is understood that the vendor had the entitlement to compensation in the particular strip of land, Toffolutti poses no great difficulty. There is no similar provision in s 3.5 of the Local Government (Planning and Environment) Act 1990.
[40]At 90.
The Council eschews reliance on double compensation as the basis for its position, preferring what counsel described as the more principled recourse to fair compensation. However the dangers of permitting Pointe Gourde to intrude into s 20(2) in the circumstances where there is entitlement to compensation under
local government legislation do relate, largely, to that undesirable outcome. The evils of double compensation are well-accepted. They are most commonly encountered in the field of personal injury claims, but will arise in any case where there is more than one defendant against whom concurrent liability is claimed. In Boncristiano v Lohmann, a building case, the Court of Appeal in Victoria said[41]
‘[t]he law, which now embraces equity, will not permit a plaintiff, whatever procedural device is used, to recover more than the damages which have been suffered, no matter what the cause of action upon which he proceeds against the various defendants: see per Purchas L.J. in Townsend’s case at 49. This principle was accepted by Steyn J. (as he then was) in Banque Keyser Ullman S.A. v Skandia (U.K.) Insurance Co. Ltd. (No. 2) [1988] 2 All E.R. 880 at 881-2.’[42]
[41][1998] 4 VR 82 at 89.
[42]See also observations by Bignold J in Parnell v Roads and Traffic Authority (NSW) No. 30294 of 1993, unreported decision of 6 April 1995; and Franklins Self Serve Pty Ltd v Wyber [1999] NSWCA 390.
The windfall concerns can be dealt with by the compensating court and the opposing party being alert to issues of double compensation as well as abuse of process. Some of those concerns are addressed in the present local government legislation which expressly deals with issues of double compensation in s 5.4.4(4) of the Integrated Planning Act 1997
‘(4)If a matter for which compensation is payable under this Part is also a matter for which compensation is payable under another Act, the claim for the compensation must be made under the other Act.’
That means that where there is potential for claims under both local government provisions and the Acquisition of Land Act the claim must be made first under the Acquisition of Land Act. Furthermore, compensation is to be recorded on the land title.[43]
[43]Integrated Planning Act, s 5.4.11.
‘(1)The chief executive officer of the local government must give the Registrar of Titles written notice of the payment of compensation under s 5.4.2.
(2)The notice must be in the form approved by the Registrar.
(3)The Registrar must keep the information stated in the notice as information under the Land Title Act 1994, section 34.’
The Acquisition of Land Act is the principal means in this State whereby land is compulsorily acquired for public purposes and compensation is paid for that dispossession in accordance with the methods there set out. The assessment of compensation, in the absence of more comprehensively drawn legislation, is informed by the kinds of considerations mentioned in Nelungaloo, expanded by what is known as the Pointe Gourde principle. There is nothing in that approach which would allow for a differential statutory construction in the particular circumstances of an entitlement, either actual or theoretical, in the landowner to apply for compensation for injurious affection under different legislation in respect to the same land.
The appeal is dismissed.
WHITE J
J J TRICKETT
PRESIDENT OF THE LAND COURT
RP SCOTT
: The central issue in this appeal lies in the question of whether the Pointe Gourde principle in reverse applies in circumstances where the
"down zoning" of the resumed land, as part of the scheme of resumption, gave rise to a claim for compensation for injurious affection[44] under the provision of
The Local Government (Planning and Environment) Act 1990or its predecessor
The Local Government Act 1936. If Pointe Gourde in reverse applies, compensation is to be assessed as if no down zoning took place and no right to claim compensation for such down zoning arose.
[44]T.M. Burke Estates Pty Ltd v Noosa Shire Council [1998] 2 QdR 448 at 449.
I am content to adopt the outline of facts provided in the joint reasons of White J and Mr Trickett. Also, I am of the view that the exposition in those reasons of the Pointe Gourde principle and its application in reverse correctly states the law as it has been expressed and applied in the authorities thus far. My opinion diverges from the views of the majority with respect to the application of this law to the facts of the present matter. In my view the material facts in this appeal are such that Pointe Gourde in reverse does not apply.
The source of the right to claim compensation following a resumption of land under the Acquisition of Land Act lies in s 12(5)[45] which converts the landholder's estate or interest[46] into a right to claim to compensation. "Compensation" is not defined in the Act though the approach to assessing compensation is provided for in s 20.[47] That provision refers in s 20(1) to the "value of land taken" without further definition of that phrase; to "severing" (s 20(1)(a)); and "… the exercise of any statutory powers… injuriously affecting" retained land (s 20(1)(b)).
[45]See [18].
[46]It was held in Sorrento Medical Services P/L v Chief Executive, Department of Main Roads [2007] 2 Qd R 373 at [49] that the conjunctive "and" in s 12(5) was misplaced and the provision should be understood as referring to "an estate or interest".
[47]See [19].
Section 20(3) provides for a set-off or abatement of compensation where land retained by the dispossessed owner may have increased in value by a virtue of the "carrying out of the works or purpose for which the land is taken". This "enhancement" provision is therefore concerned with post-resumption effects of the works or purpose of the resumption. It is not concerned with any effect on the value of the resumed land caused by the actions of the constructing authority or on its behalf before the resumption which has an effect on the value of the land taken, be it to increase or reduce that value. Such effect on value falls for consideration in the application of the Pointe Gourde principle, but in this case Pointe Gourde in reverse is the source of the relevant principle.
In considering the application of Pointe Gourde in reverse particular notice needs to be taken of s 20(2):
"(2)Compensation shall 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."
It is quite clear, I think, that Pointe Gourde in reverse involves other than a strict application of the language of s 20(2). That departure is justified on the basis that any inquiry under s 20 relates to "compensation" with regard to the "value of land taken". Compensation has been a topic of judicial consideration on many occasions in the context of compulsory acquisition of land. In Nelungaloo Pty Ltd v Commonwealth[48] Dixon J said:
"Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it."
[48](1948) 75 CLR 495 at 571.
In Housing Commission of NSW v Falconer[49] Mahoney JA referred to the importance of the words "compensation" and "value" then said at 569 that the entitlement to compensation is "the right to be put, so far as money can do it, in the same position as if his land had not been taken from him." It is the amount the land might be expected to have realised if sold on the market by a not unwilling vendor to a prudent purchaser and is to be assessed according to the "highest and best use" of the land at the relevant date.[50]
[49][1981] 1 NSWLR 547.
[50]Spencer v The Commonwealth (1907) 5 CLR 418 per Griffith CJ at 432.
[51][1995] 1 All ER 846 at 852.
The principle referred to by Mahoney JA in Falconer has often been
identified as "the principle of equivalence". That phrase was employed in
Director of Building and Lands v Shun Fung Ironworks Ltd[51]where at 852
Lord Nicholls of Birkenhead said:
"The purpose of these provisions in Hong Kong and England is to provide fair compensation for a claimant whose land has been compulsorily taken from him. This is sometimes described as the principle of equivalence. No allowance is to be made because the resumption or acquisition was compulsory; and land is to be valued at the price it might be expected to realise if sold by a willing seller, not an unwilling seller. But subject to these qualifications, a claimant is entitled to be compensated fairly and fully for his loss. Conversely, and built into the concept of fair compensation, is the corollary that a claimant is not entitled to receive more than fair compensation: a person is entitled to compensation for losses fairly attributable to the taking of his land, but not to any greater amount. It is ultimately by this touchstone, with its two facets, that all claims for compensation succeed or fail."
The principle of equivalence also underlies the principle illustrated in
Pointe Gourdeand Melwood Units Pty Ltd v Commissioner of Main Roads[52] to the effect that compensation for the compulsory acquisition of land cannot include either an increase or decrease in value attributable to the scheme underlying the resumption.[53]
[52][1979] AC 426.
[53]See Point Gourde at 572 and Melwood Units at 435 and 438.
The principle of equivalence is rooted in the proposition that compensation needs to be based on the "value to the owner"[54]
"The principles upon which compensation is assessed when land is taken under compulsory powers are well settled. The owner receives for the lands he gives up their equivalent - i.e., that which they were worth to him in money. The property is, therefore, not diminished in amount, but to that extent it is compulsorily changed in form. But the equivalent is estimated on the value to him, and not on the value to the purchaser …"
[54]Re An Arbitration Between Lucas and Chesterfield Gas and Water Board [1909] 1 KB 16 at 29.
In Waters v Welsh Development Agency[55] Lord Nicholls referred to the basis of the Pointe Gourde principle and its application in reverse in these terms.
"the 'Pointe Gourde principle' is not a reference to a principle separate and distinct from the 'value of the owner' principle. It is no more than the name given to one aspect of the long established 'value to the owner' principle.
[55][2004] 2 All ER 915 at [42].
I distil from the authorities the proposition that the Pointe Gourde principle and its application in reverse is concerned with two intertwined principles: that of fairness to the parties; and that compensation is to be based on value to the owner neither increased nor reduced by the scheme or project giving rise to the resumption.
A prominent example of land in the hands of the dispossessed owner being reduced in value by the scheme of resumption is to be found in Melwood Units. I take the following quote from 434:
"A resuming authority cannot by its project of resumption destroy the potential of the whole 37 acres for development as a drive-in shopping centre, and then resume and sever on the basis that that destroyed potential had never existed. Moreover, in their Lordships' opinion the principle remains applicable in a case such as the present, notwithstanding that planning permission had not been given for the whole 37 acres and would not have been given, when the lack of such permission was manifestly due to the expressway project, and it is established that, without the expressway project, such planning permission would have been given for the whole 37 acres. To hold otherwise in this case would enable the acquiring authority to inflict by its project the same injustice at one remove."
It would, in short, be unjust if a resuming authority were permitted to devalue a parcel of land by down zoning it, then pay compensation for the resumption of that land based on its down-zoned value. The principle of Pointe Gourde in reverse as described by the Privy Council in Melwood Units was designed to address such an injustice.
The facts of the present matter are different in substance from those found in Melwood Units in that in this case the "infliction" did not take place "at one remove" but in three steps each of which gave rise to a right to claim compensation. The first step was made in the 1988 Strategic Plan in identifying the proposed arterial road and the second in the 1998 Amendments to the Planning Scheme which repeated reference to the arterial road, but as a "Future Transport Corridor" and identified land for "Special Facilities/Special Purposes" for the sewerage works extension. There is no dispute between the parties that the down zoning in 1988 and that in 1998 relating to the identification of the land for sewerage purposes, gave rise to rights to claim compensation for the consequent "injurious affection" and that none of the exclusionary provisions in the statute operates to exclude such claims.
A right to claim compensation for injurious affection as a result of down zoning is a right independent of any subsequent right to claim compensation following a resumption of down zoned land. Where the process employed is such that no right to claim compensation for down zoning has come into existence and where the grounds for applying Pointe Gourde in reverse are present, that principle would apply and it would be just or fair to do so. There can, however, be no justification in principle, in my view for applying Pointe Gourde in reverse in circumstances where a right to claim compensation, separate from the right to claim for a resumption, exists with respect to a down zoning which precedes the resumption. To apply Pointe Gourde in reverse in such circumstances would be at odds with the basis of that principle.
The learned Member below said that applying Pointe Gourde in reverse in circumstances such as the present[56] avoids the need for two applications and two possible trials. But it is not unusual that more than one type of statutory application might be needed to redress a situation. It was also said[57] that the occasions in which two such claims might be made would be rare. Whilst such practical considerations have their place they ought not, in my view, form the basis for the extension of Pointe Gourde in reverse beyond the circumstances for which it has been identified. These considerations are based on pragmatism not principle and can, as I say below, lead to an unjust outcome of the constructing authority being required to pay enlarged compensation.
[56]Edgarange Pty Ltd v Redland Shire Council [2007] QLC 0012 at [42].
[57]At [43].
It has been pointed out by the respondent that doubling up of compensation or the prospect of a windfall can be addressed if a claimant persists in a claim for down zoning in a case where Pointe Gourde in reverse has been applied to award full compensation for a resumption.[58] The existence of a means addressing the side effects of a misapplication of principle cannot in my view justify the misapplication in the first place. It also needs to be borne in mind that this Court and the
Planning Environment Courtare creatures of statute and the extent to which resort may be had to general principle in the exercise of, or the refusal to exercise, statutory jurisdiction may be limited.
[58]See for example Sharman v Evans [1976-7] 138 CLR 563 at 576 (The judgment of Gibbs and Stephen JJ at 576.8 makes reference to avoiding awarding "compensation twice over"); Baltic Shipping Co v Dillon (1992-3) 176 CLR 344 at 383 at about 383.2 in the page (The judgment of Deane and Dawson JJ referred with approval to the Courts below (ie the learned trial judge and the majority of the Court of Appeal) being "clearly conscious of the need to avoid overlapping or double compensation"); Murphy v Overton Investments Pty Ltd (2003-2004) 216 CLR 388 at 408 [50] where the judgment of the Court referred to the necessity to "mould relief in a way which will avoid double compensation".
The misapplication of Pointe Gourde in reverse in circumstances such as the present would, whether a claim for injurious affection for down zoning is or is not made, lead to the resuming authority having to pay compensation based on 2004 values for land down zoned in 1988 and 1998. It is apparent that there would be a substantial difference in values between the earlier dates and 2004 given the substantial industrial development in the vicinity of the resumed land. Whilst there is no easy way of addressing such an issue as to relevant dates where no right to claim compensation with respect to down zoning arises,[59] that should be understood as an imperfection in the appropriate application of Pointe Gourde in reverse not a basis for its misapplication. Indeed, its misapplication can visit an avoidable injustice on a party such as the appellant.
[59]See Doolan Properties Pty Ltdv Pine Rivers Shire Council [2001] 1 QdR 585 at 594.
Imagine an owner of land which is down zoned and who claims and receives compensation for such down zoning, then sells the land which is subsequently resumed. Assume also that the down zoning and the resumption are part of the one scheme and that, if Pointe Gourde in reverse were to apply as I would understand the respondent's argument suggests it should, compensation for the resumption would be based on the proposition that no down zoning had taken place. There is no principle of double compensation to which a Court may refer in deciding to address what I have described as a misapplication of Pointe Gourde in reverse, as the landowner at the time of the resumption had no right to receive compensation for the down zoning. To avoid application of Pointe Gourde in reverse the Court would need to devise a qualification to that principle or resort to pragmatism.
Assume the same facts as in the preceding paragraph except that the original owner of the land does not claim compensation for the down zoning. Should the outcome there be that the owner of the land at the time of resumption is awarded compensation on the basis of Pointe Gourde in reverse? That is, should the resuming authority, who might be a different entity from the planning authority, be visited with an enlarged compensation figure simply because the previous owner of the land failed to claim compensation for down zoning? I do not think that the question of compensation for the resumption should depend on whether a claim for down zoning compensation has been made. To require that would mean that the amount of compensation a constructing authority would have to pay for a resumption would be dependent on what the owner of the land at the time of down zoning decided to do or not do. Nor should it depend on the amount of any such compensation. It should depend only whether a statutory right to claim compensation arose.
The need for principle to trump pragmatism is, I think, demonstrated in
Melwood Units. It was public knowledge that detailed planning for an expressway project involving the relevant land was underway by the end of 1962. The claimant purchased the relevant land in December 1964. The Privy Council held that compensation should be based on the highest and best use of the land as if the scheme of resumption including the detailed planning had not taken place. The Land Appeal Court had adopted what I would describe as the practical or pragmatic approach of premising its assessment of compensation on the fact that the claimant was aware of the expressway project and the potential devaluing effect it would have on the land. In contrast, the Privy Council adopted what I would call a principled approach.
It is important, I think, to notice that there is no authority on point to which the Court may turn in this matter. If this Court were to allow the appeal it could do so without providing any qualification to the application of Pointe Gourde in reverse to the type of case it was designed to address. The circumstances of this case which distinguish it from Pointe Gourde in reverse are capable of resolution into a principle that is neither inconsistent with Pointe Gourde nor which undermines the just application of that principle in reverse. Indeed, I think that the first step in a case such as this would not be to attempt to fit Pointe Gourde and the facts, but to consider the statute. After all, Pointe Gourde in reverse comprises a qualification of the statute and resort to that principle should occur only where a departure from the strict language of the statute, particularly s 20(2), is justified. To apply
Pointe Gourdein reverse in the way the respondent urges upon on has the advantage of pragmatism. But in my view it does no good to distort the law for practical purposes. In Waters v Welsh Development Agency at [63] Lord Nicholls counselled care in the application of Pointe Gourde:
"The Pointe Gourde principle should not be pressed too far. The principle is soundly based but it should be applied in a manner which achieves a fair and reasonable result."
In my view the principle that should apply in a case such as the present is one consistent with the submissions of the appellant. When assessing the compensation payable in consequence of the compulsory acquisition of an interest in land, the principle of Pointe Gourde in reverse should not apply where the market value of the resumed interest has been depreciated by a scheme of resumption in circumstances in which the existence of that scheme also confers a statutory entitlement to compensation on the owner of the interest. In such
a case, compensation is to be assessed in accordance with s 20(2) of the
Acquisition of Land Actunaffected by the Pointe Gourde in reverse principle.
It was submitted for the respondent that this Court would, in accordance in s 55(b) of the Land Court Act 2000, prefer its submission to those of the appellant which it characterised as "theoretical". Section 55 provides:
"In the exercise of its jurisdiction, the Land Appeal Court—
…
(b) must act according to equity, good conscience and the substantial merits of the case without regard to legal technicalities and forms or the practice of other courts."
I do not accept that this provision can be relied on to justify the application of a principle, such as Pointe Gourde in reverse, in circumstances where its application is not apposite. To hold otherwise would reduce the jurisdiction of this Court to one of complete subjectivity.[60]
[60]Cox v Commissioner of Water Resources (1992) 14 QLCR 304 at 320.
The appellant had the option at the time of resumption in 2004 of utilising s 3.5(9) of the Local Government (Planning and Environment) Act 1990:
"Where compensation for injurious affection is claimed under this section the local government may at its option, but with the prior approval of the Governor in Council, acquire the land pursuant to its powers under the Acquisition of Land Act 1967 instead of paying compensation for injurious affection".
The effect of the appellant utilising that provision would have been to produce a compensation outcome similar to the application of Pointe Gourde in reverse. The appellant did not employ s 3.5(9). It would anomalous, in my view, if the respondent was awarded compensation as if s 3.5(9) was utilised, unless some other justification for that outcome can be found.
The conclusion that I have drawn seems to me to be consistent with the views expressed by Jacobs[61] at 526:
"If the planning instrument provides that compensation is to be paid to the owner whose interest is later resumed, that amount must obviously be deducted from the gross amount of compensation. Section 59(2)(c) of the Lands, Acquisition Act 1989 (Cth) makes specific provision for such a deduction."
[61]"The Law of Resumption and Compensation in Australia" (LBC Information Services Marcus S Jacobs QC 1998).
Applying s 20(2) in this case preserves the principle of equivalence and does not attempt to recast or diminish the Pointe Gourde principle in reverse. I would allow the appeal.
RP SCOTT
MEMBER OF THE LAND COURT
Key Legal Topics
Areas of Law
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Property Law
Legal Concepts
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Adverse Possession
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Compensatory Damages
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Statutory Interpretation
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