Department of Transport and Main Roads v Mahoney & Ors [2014] QLAC 1

Land Court Act 2000

Land Acquisition (Just Terms Compensation) Act 1991 (NSW)

Bowers and Crane v Pine Rivers Shire Council (2007) 28 QLCR 196

De Tournouer v Chief Executive, Department of Environment and Resource Management [2011] 1 Qd R 200

Doolan Properties Pty Ltd v Pine Rivers Shire Council [2000] QCA 76; [2001] 1 Qd R 585

Fox v Percy [2003] HCA 22; (2003) 214 CLR 118

Gallo v Chief Executive, Department of Environment and Resource Management [2013] QLAC 6

Haig v The Minister (1994) 85 LGERA 143

Housing Commission (NSW) v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196

Ipswich City Council v Wilson (2011) 32 QLCR 357

Mahoney v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11

Melwood Units Pty Ltd v Commissioner of Main Roads (1978) 52 ALJR 593

Mio Art Pty Ltd v Brisbane City Council (2010) 31 QLCR 174

Murphy v The Crown (1989) 68 LGRA 286

Nelungaloo Pty Ltd v The Commonwealth [1947] HCA 58; (1948) 75 CLR 495

Pointe Gourde Quarrying and Transport Co Ltd v Subintendent of Crown Lands [1947] AC 565

Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91

Redland City Council v Edgarange Pty Ltd [2009] 1 Qd R 546.

Springfield Land Corporation (No 2) Pty Ltd v State of Queensland [2011] HCA 15; (2011) 242 CLR 632

The Crown v Murphy (1990) 64 ALJR 595

Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259

[1] This is an appeal against a Land Court determination of compensation in respect of the compulsory acquisition of land by the appellant, the Chief Executive, Department of Transport and Main Roads, under the provisions of the Acquisition of Land Act 1967 (the Act).

[2] Prior to the resumption, the land was owned by the respondents, John Mahoney, Kathryn Mahoney and Austin Mahoney and was described as Lot 229 on RP 202963 in the County of Churchill, Parish of Purga. The land is situated at 16-22 Ipswich-Boonah Road, Yamanto at the intersection of that road with the Cunningham Highway and at the date of resumption was zoned Rural. Some 8.593 ha, being over half of the land then owned by the respondents, was resumed on 24 March 2006 for purposes described, in the Notice of Intention to Resume dated 13 October 2005, as future transport purposes including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South-West Transport Corridor (SWTC).

[3] Compensation was determined by the Land Court in the amount of One Million, Seven Hundred and Seven Thousand, Five Hundred Dollars ($1,707,500). The Court also made orders as to interest payable to the landowners.

[4] Having set out the factual matters surrounding the taking of the land, the Land Court noted that although the parties had not agreed on the amount of compensation payable to the Mahoneys, they had agreed that the value of the land taken was either $275,000, if the land were to be valued as zoned Rural, or $1,707,500 if it were valued as if it were zoned for Future Urban purposes and had the development potential associated with that.

[5] The Mahoneys said, before the Land Court, that when they had purchased the land in 1982 it was zoned as Future Urban under the Moreton Shire Planning Scheme. A change in the zoning of the land occurred when the 1999 Ipswich City Council Planning Scheme came into force on 18 February 1999 and the land was rezoned as Rural. The Mahoneys contended that the Ipswich City Council's change to the zoning of the land in 1999 was a step in the process to resume the land in 2006, for the purposes of the SWTC. As a consequence, the principle enunciated in San Sebastian[2] applied and the change in the zoning or designation of the land should be ignored for the purposes of assessing compensation.

[6] The parties did not dispute that the central issue before the Land Court was whether the San Sebastian principle applied to the facts in this matter. The Land Court noted that the onus of proof was on the Mahoneys.

[7] The learned Member referred to various authorities, (Haig v The Minister[3], Redland Shire Council v Edgarange Pty Ltd[4], and The Crown v Murphy[5]), where the San Sebastian "principle" was discussed. The Member observed that the principle is variously described as a principle, or an interpretation applied by courts, of expressions in legislation which refer to the value of land compulsorily acquired. He also noted that the majority in the Land Appeal Court in Edgarange[6] had referred to the much-quoted statement of Dixon J in Nelungaloo Pty Ltd v The Commonwealth[7] as governing the approach to s 20(2) of the Act:

"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. ... 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." (Citations omitted).

[8] Accordingly, the Land Court held, it was necessary to identify the scheme underlying the resumption and to consider whether the downzoning of the subject land formed part of that scheme. The learned Member referred to a number of authorities including the Land Appeal Court decision in Bowers and Crane v Pine Rivers Shire Council where that Court said[8]:

"The effect of San Sebastian was refined in The Crown v Murphy [1990] HCA 42; (1990) 64 ALJR 593 at 595

'The principle applies in cases where there is a direct relationship between the planning restriction and the scheme of which resumption is a feature and extends to cases where there is merely an indirect relationship, provided that the planning restriction can properly be regarded as a step in the process of resumption.' "

[9] The learned Member said that there was no evidence called by the resuming authority as to the reasons for the downzoning of the land. No file had been found to exist explaining the reasons for the change and, said the learned Member, it was simply done along with all the changes in the new planning scheme which commenced in 1999.

[10] The learned Member referred to a letter to Ms K Mahoney written by Mr John Adams, Planning Manager of the Ipswich City Council, and dated 21 September 2006. Mr Adams said that it would appear that the rural designation was based around the fact that the land was (a) subject to overhead aircraft noise from the operations of the Amberley Air Base, and (b) the land was difficult to service with urban infrastructure owing to topography and location to the south of the Cunningham Highway. These factors rendered the land unsuitable for residential development.

[11] The learned Member observed that the Court ought not approach the case by finding that some possible reasons for the resumption would be good reasons and then imputing them to the decision that was made. He said that Mr Adams' evidence did not purport to give reasons for the decision to downzone the land, rather he gave his opinion of what the reasons were. No evidence of the actual reasons was given, the Member said.

[12] The learned Member also referred to other evidence called on behalf of the resuming authority. Mr Michel, who was the Regional Director (Metropolitan), Department of Transport and Main Roads, stated that the Department did not require local governments to downzone lands to accommodate transport projects and that there was no implied understanding that local governments would downzone lands to accommodate transport projects. Evidence from the Works Manager of the Ipswich City Council suggested that the proposed study area for the SWTC did not appear to extend far enough south and included a map of his suggested amendment, which added land well to the south of the applicants' land. The learned Member observed that the effect of the evidence of Mr Peters from the Main Roads Department and Mr Michel was that the actual route of the SWTC was not chosen until well after the subject land was downzoned, and that the resuming authority did not seek to influence the Ipswich City Council to do so.

[13] The learned Member summarized the effect of the evidence to be that the landowners said that the Ipswich City Council knew the end point of the SWTC, the point at which the corridor would join the Cunningham Highway, when it downzoned the land, whereas the constructing authority said that the end point was not known to anyone until years after the downzoning. The resuming authority also said that it did not have any input into the downzoning decision. The learned Member considered that it would not be necessary for the landowners' case to succeed for them to prove any involvement in the downzoning decision by the resuming authority. Moreover, the landowners did not suggest that there was any special request by the resuming authority to the Ipswich City Council to downzone their land.

[14] The learned Member then referred to the evidence of Mr Adams that the subject land was suitable for a rural zoning because:

1. it was affected by the ANEF[9] in regard to aircraft noise;

2. it was outside the readily serviceable area of the Ipswich City Council;

3. it was not required for development in the future;

4. the Cunningham Highway at that location provided a logical boundary to the urban footprint.

The effect of Mr Adams' evidence, said the learned Member, was that Mr Adams did not say that the land was downzoned for those reasons, only that it was suitable for Rural zoning. Further, Mr Adams did not think that any explanation for the decision to downzone was recorded nor was he aware of any request by the Main Roads Department to rezone the land. He was not aware of any possible connection between the zoning of the land in 1999 and its resumption in 2006.

[15] The Land Court also considered evidence relating to high level planning decisions evidenced by the following documents:

• - the April 1995 report proposed by the WESROC[10] steering committee, which showed the Mahoney land tentatively outside the area marked for urban development;
• - the 1995 Regional Framework for Growth Management (RFGM) which contained, as a priority action, clause 13.14 - "Ensure that identified major existing and future transport corridors are protected through planning schemes";
• - the final WESROC structure planning report, completed in September 1995, which included, as recommendation 32, that there be a major transport corridor to link the Cunningham Highway, Logan Motorway, Ipswich Motorway and Centenary Highway via Ripley and Springfield. Recommendation 44 was that Commonwealth, State and Local Government adopt, as the basis for transport planning in the WESROC subregion, the development of a full transport corridor linking the Cunningham Highway, via Ripley, Redbank Plains and Springfield to the Logan Motorway;
• - the Integrated Regional Transport Plan (IRTP) 1997 which referred to a transport corridor which in the longer term could be extended from the Ipswich-Boonah Road to the Cunningham Highway;
• - the 1998 RFGM which said that every provision should be made to protect the routes of high capacity corridors such as the Springfield- Ripley- Ipswich corridor.

[16] The landowners contended that these high level planning decisions brought about the Council's decision to downzone the land. Their effect was that there was to be a major transport corridor to link the Cunningham Highway, Logan Motorway, Ipswich Motorway and Centenary Highway via Ripley and Springfield and that early provision should be made to protect the routes of high capacity corridors such as the Springfield-Ripley-Ipswich Corridor.

[17] The learned Member also considered town planning evidence given by Mr Perkins, a town planner called by the resuming authority. Mr Perkins' opinion was that the rezoning of the subject land was carried out for planning purposes and was not connected with the resumption of the land. He was also of the view, along with Mr Adams, that it would not be appropriate to make zoning changes to land unless and until there was absolute clarity as to where the transport corridor would be, by reference to metes and bounds. He said that there was no evidence to indicate that the Ipswich City Council had removed the land from the Future Urban zone and placed it in the Rural zone in 1999 because of any knowledge or intent that part of the land was at some later date going to be needed for transport infrastructure.

[18] The learned Member held that it was not necessary that any step in the resumption scheme which had the effect of reducing the value of the land resumed be undertaken or connived in by the resuming authority. He accepted that the resuming authority did not do anything to seek to bring about the downzoning by the Ipswich City Council of the land subsequently resumed. He said that the actual reason or reasons for the downzoning were not recorded and were sought to be inferred. He was not satisfied that the progressive planning regime was constrained by an already chosen end point for the SWTC, however, it was unnecessary for the landowners to show that the route or any part of it had been predetermined. The learned Member considered that the landowners would succeed if they showed that the rezoning was entirely due to the underlying scheme. They would be able to succeed if they could show that it was more likely than not that the downzoning was intended to preserve the present route of the corridor. The learned Member concluded that the effect of the authoritative instructions from the strategic planners to local authorities, to protect transport corridors, was that the Ipswich City Council was required to preserve the corridor. At a time after that direction the Council downzoned the subject land which reduced its development potential, an action that could well be understood as preserving the corridor.

[19] The learned Member said that when the downzoning was viewed in the light of the existence of the instruction to preserve the corridor and, accepting that to interpret this instruction as incapable of being acted upon until the actual details of the corridor were finally settled was to interpret it as lacking the effect it clearly directed, it was more likely than not that the downzoning was done in pursuit of the scheme. That conclusion, the learned Member said, was easier to reach in view of the fact that there was no evidence as to why the decision was actually made.

[20] Accordingly the learned Member was satisfied that compensation should be assessed as if the land when resumed, enjoyed its former Future Urban zoning and the associated development potential. In accordance with the agreement of the parties relating to the value of the land, compensation was determined at $1,707,500.

[21] The learned Member also decided that interest should be allowed so as to preserve the value of the award. Accordingly, he allowed interest at the rates set out in the judgment on and from the date of resumption of 24 March 2006 to and including the day immediately preceding the date upon which payment was made.

[22] The appellants say that the learned Land Court Member erred:

1. in concluding that it was not necessary for the respondents to prove any involvement by the appellant in the downzoning decision by the Ipswich City Council which was central to the respondents' case;

2. in concluding that it was not necessary to explore the reasons given by Mr Adams, the City Planner for Ipswich City Council for the downzoning decision by the Ipswich City Council on the ground that it was not the Court's function to infer what the reasons for the decision were;

3. in concluding that it was "more likely than not that the downzoning was done in pursuit of the scheme";

4. in concluding that it was easier to reach the view that he did on the basis that there was no evidence of why the downzoning decision was actually made;

5. in failing to conclude that there was no relevant connection between the downzoning of the respondents' land in 1999 and its resumption by the appellant in 2006;

6. in making final orders (including with respect to interest) despite being advised by the parties that he was not invited to do so.

[23] Section 64 of the Land Court Act 2000 provides that a party to a proceeding in the Land Court may appeal to the Land Appeal Court against all or part of a decision of the Land Court.

[24] Section 56(1) of that Act provides that an appeal in the Land Appeal Court must be decided on the evidence on the record of the proceeding in which the decision appealed against was made, unless the Court has admitted new evidence pursuant to s 56(2).

[25] Section 57 provides that:

The Land Appeal Court may do 1 or more of the following -

(a) suspend the operation of the decision and remit the matter, with or without directions, to the court or tribunal that made the decision to act according to law;

(b) affirm, amend, or revoke and substitute another order or decision for the order or decision appealed against;

(c) make an order the Land Appeal Court considers appropriate."

[26] The authorities indicate that the effect of those provisions is that an appeal to this Court is by way of re-hearing which is to be decided on the record of the proceedings in the Land Court, unless leave has been granted to adduce new evidence[11]. To succeed in an appeal of this nature, the appellant must ordinarily establish that the lower Court's decision resulted from factual, legal or discretionary error[12] and this Court is obliged to give the judgment which, in its opinion, ought to have been given at first instance while observing the natural limitations that exist in the case of an appellate court proceeding wholly on the record[13].

[27] As at the date of resumption, s 20 of the Act provided[14]:

(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."

[28] As noted above, the central issue before the Land Court and this Court was whether the San Sebastian decision applied in the circumstances surrounding the acquisition.

[29] In Housing Commission (NSW) v San Sebastian Pty Ltd[15] Jacobs J said:

"Restrictions on land use, so that, explicitly or practically, use is restricted to a use for a public purpose for which land might be resumed, are commonly imposed as a result of consultation with or direction by the public authority concerned with the carrying out of the particular public purpose. In such a case where there is a direct relationship between the restriction on land use and the proposed establishment of the public works the effect on value of the zoning or restriction ought to be ignored."

[30] The learned Judge continued[16]:

"There are, however, many situations where the relation between the zoning and the proposed public works is not as clear-cut as it was in Chapman v. The Minister (16). One can take an example away from the present case. Assume an area of land on the outskirts of existing settlement, and assume a planning authority concerned to designate land uses in a planning scheme. The land is designated open space. Thereafter it is resumed for the purpose of a public reserve. The fact that the land was zoned as open space may have depreciated its value. Does the resuming authority pay compensation at the depreciated value of open space or at some other value? The question cannot be correctly answered without knowing whether there was any connexion between the zoning as open space and the subsequent resumption. If the zoning was done with the intent or in anticipation that the land should be resumed for a purpose such as a public reserve or if the zoning was proposed or dictated by the resuming authority then s. 124 requires that the zoning be ignored. It is only a step in the process of subsequent resumption. But in other circumstances the resumption may be unconnected with the act of zoning. It may be that the resuming authority selects the land for resumption as a public reserve because it is zoned open space; if it does so it is doing no more than ensuring that it, as well as others, conforms to the planning scheme. In those circumstances there is no relevant relationship between the zoning and the public purpose. No public purpose, existing or anticipated, intended, or urged by the zoning authority, leads to the zoning; rather, the zoning leads to the public purpose and consequent resumption." (Citation omitted).

[31] In The Crown v Murphy[17] the High Court said:

"The principle applies in cases where there is a direct relationship between the planning restriction and the scheme of which resumption is a feature and extends to cases where there is merely an indirect relationship, provided that the planning restriction can properly be regarded as a step in the process of resumption: Housing Commission of New South Wales v San Sebastian Pty Ltd, at 206-207."

[32] The High Court has now said in relation to the Point Gourde[18] "principle" (which is the reverse of the San Sebastian "principle") that[19]:

"... it should be noted that recently the House of Lords has affirmed, consistently with what had been said by this Court in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority, that there is no "common law" principle derived from Pointe Gourde; the term "scheme" was used there to explain and amplify the term "value" as understood in particular statutory compensation systems commencing with the Land Clauses Consolidation Act 1845 (UK). These points were made by Lord Walker of Gestingthorpe and Lord Collins of Mapesbury in Transport for London v Spirerose Ltd." (citations omitted).

[33] Neither the Pointe Gourde decision nor the San Sebastian decision has been expressly incorporated into the Act. However, prior to the decisions of the High Court in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority[20] and Springfield Land Corporation (No 2) Pty Ltd v State of Queensland[21], it had been recognized on a number of occasions that the decisions in Pointe Gourde and San Sebastian were relevant in interpreting various Queensland statutory provisions concerning the assessment of the value of land compulsorily acquired[22]. The application of those decisions, post Walker and Springfield, is discussed further below.

[34] Counsel for the appellant submitted that because the downzoning of the respondents' land gave rise to a right to claim compensation under the Integrated Planning Act 1997, (the planning legislation in force at the time of the downzoning), and the compulsory acquisition of the land also gave rise to a right to claim compensation, there was a risk of double compensation, as recognized by the Court of Appeal in Redland City Council v Edgarange Pty Ltd[23]. That risk, together with the caution expressed by the High Court in Walker as to the application of a so-called Pointe Gourde principle, meant that San Sebastian could only affect the application of s 20(2) of the Act in "the clearest of cases".

[35] We do not accept that submission. Section 20(2) of the Act requires the Court to determine compensation having regard to the value of the estate or interest of the claimant in the land taken. The issue in this case is whether the value is to be assessed by ignoring the rezoning of the subject land from Future Urban to Rural for the reasons discussed by the High Court in San Sebastian and The Crown v Murphy, as set out in the quotations above. That question is to be answered by considering the authorities and the relevant evidence and there is nothing in the authorities to suggest that San Sebastian is only to be applied in the clearest of cases. There is no question of double compensation here.

Involvement of the appellant in the downzoning decision

[36] The learned Member found that the appellant was not involved in the downzoning decision but he also held that it was not necessary for the respondents to prove that the appellant had been involved in that decision, if the downzoning was a step in the resumption scheme.

[37] Counsel for the appellant submitted that the Member had taken the reference to an indirect relationship in The Crown v Murphy to mean that in cases where the suggested step in the process of resumption is a planning restriction, and where the planning authority and the resuming authority are different entities, it is sufficient for the application of the San Sebastian principle to demonstrate that the planning authority took the step with the resumption in mind, even though it was not requested by the resuming authority to do so. Counsel submitted that that was an erroneous view, because -

• the San Sebastian decision should only operate if the planning restriction is a step in a resumption scheme being pursued by the resuming authority. There is no good policy reason for burdening a resuming authority with the consequences of any planning decision taken by a planning authority independently of the resuming authority.
• The distinction between the actions of a planning authority and a resuming authority was most clearly identified by the High Court in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority[24] where the Court said, in interpreting the New South Wales compensation statute, that the effect of the relevant section was that what was to be disregarded was any increase or decrease in value for which the resuming authority is responsible. Counsel submitted that the High Court did not take a wide view as to the sufficiency of an indirect relationship where the planning restriction was imposed by a separate entity in advance of the pursuit by the resuming authority of its resumption process.
• The Crown v Murphy did not involve any independent action on the part of the relevant council. In that case, the Full Court of Queensland held that the resuming authority had influenced the Shire Council to maintain a particular zoning[25] and the High Court proceeded on the same basis.[26] The decision in Walker illustrates that action taken by a different entity, albeit with the same general object in mind, cannot properly be regarded as a step in a resumption process which commences after that action has been taken and is carried out by a different entity.
• In San Sebastian, the answers given by the High Court to the questions posed in the case stated establish that it is only proper to take a step into account if it involved an act by the resuming authority or the government entity responsible for the rezoning.

[38] In Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority[27], the Foreshore Authority resumed land in respect of which, prior to the resumption or proposal for the resumption, the local council had maintained an industrial zoning to prevent development for residential purposes. The High Court held that any change in value referable to the council's actions was not to be disregarded.

[39] As counsel for the appellant conceded, the decision in Walker depended primarily on the wording of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW), particularly ss 56(1)(a) and 3(1)(a). Section 55 of the NSW Act provides, relevantly, that :

"In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division):

(a) the market value of the land on the date of its acquisition,

"market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid):

(a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and

[40] The High Court said that s 56(1)(a) may be read with the statement in s 3(1)(a) of the objects of that Act[28]. That object is:

"to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will not be less than the market value of the land (unaffected by the proposal) at the date of acquisition."

[41] The High Court accepted the following[29]:

"The construction of the market value disregard in [s 56(1)] para (a) for which the Foreshore Authority correctly contends, links "the proposal" to that of the resuming authority. It puts aside anterior discussions or agitations by the Council and others in favour of classifying the Land as public space. In this way there is reflected in the terms of para (a) of s 56(1) a policy to require a disregard only of that increase or decrease (as in this case) in value for which the resuming authority is responsible."

[42] There are no equivalent provisions to s 56(1)(a) and s 3(1)(a) of the NSW Act in the Acquisition of Land Act. The decision in Walker must, therefore, be treated with some caution in Queensland. This was recognized by the Land Appeal Court in Redland Shire Council v Edgarange Pty Ltd[30]. The Court pointed to the need to be alert not to transpose dicta from cases considering different legislative provisions but accepted, nevertheless, that the Pointe Gourde principle continued to apply in Queensland:[31]

"... 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."

[43] We respectfully agree with the reasoning of the Land Appeal Court in Edgarange. Accordingly, we consider that in determining the value of land in accordance with s 20(1) and s 20(2) of the Act, this Court should ignore any diminution in value to the land caused by planning restrictions where there is a direct relationship between the planning restriction and the scheme of resumption or, if there is merely an indirect relationship, where the restrictions can properly be regarded as a step in the process of resumption.

[44] We do not consider that there are any authorities in relation to the application of the San Sebastian decision in Queensland that mandate that the resuming authority must be involved in the decision that affects, whether positively or negatively, the value of the resumed land. There were two alternatives identified by Jacobs J in San Sebastian in discussing the necessary connexion between the rezoning and the proposed public works[32]:

• (i) if the zoning was done with the intent or in anticipation that the land should be resumed for a purpose such as a public reserve,

(ii) if the zoning was proposed or dictated by the resuming authority,

The first alternative does not require that the resuming authority be involved in the rezoning.

[45] Nor do we consider that there is any good reason to limit the application of the San Sebastian decision in the way suggested by counsel for the appellant. It is not difficult to envisage a scenario where a higher regulatory authority develops a scheme or policy and directs that the scheme or policy be implemented by a lower level planning authority rezoning the relevant land and, subsequently, a resuming authority resuming it. In such a case, the resuming authority has not been involved in the decision to rezone. Yet clearly that decision is a step in the scheme underlying the resumption, and, in our opinion, such a rezoning is to be ignored in determining the value of the claimant's estate or interest in the land under s 20(2) of the Act.

[46] Questions of fact and degree will necessarily be involved in determining the sufficiency of the connexion between the depreciating factor, in this case the rezoning of the subject land, and the scheme of resumption.[33] Where, as here, there is an unchallenged finding that the resuming authority was not involved in the decision to rezone the land, the question to be answered remains the same, was the decision to rezone nevertheless a step in the scheme of resumption[34], or was that decision made with the intent or in anticipation that the land should be resumed for the SWTC.[35] In our view the evidence before the learned Member did not support an affirmative answer to either question. To the contrary, such evidence as there was supported the conclusion that the rezoning of the land was independent of the resumption process.

[47] The learned Member found that there was no evidence of the "actual reasons" for the rezoning given.[36] He thought that the evidence was limited to opinion evidence which justified the rezoning after the fact. The Member referred to Mr Adams' letter to Ms Mahoney dated 21 September 2006 in which Mr Adams said that "It would appear that the Rural designation was based around the fact that the land" was subject to overhead aircraft noise and difficult to service with urban infrastructure. And it is true that this letter reads as though Mr Adams did not know why the land was downzoned.

[48] Counsel for the appellant submitted that the Member had overlooked the fact that Mr Adams was, in that letter, dealing with the 1992 review by the Moreton Shire of its Strategic Plan which lead to the 1993 Draft Strategic Plan. That is, he was not dealing with the rezoning in question. Mr Adams had not been employed by the Moreton Shire, having been employed by the Ipswich City Council since 1981. We accept that submission.

[49] The learned Member also referred to Mr Adams' statement, and his evidence more generally, but concluded that this evidence was also rationalisation or reconstruction after the fact, rather than direct evidence of the reasons for rezoning.[37] Counsel for the appellant submitted that the Member had wrongly emphasized the generalized language in that material and overlooked Mr Adams' direct oral evidence about the reasons for the downzoning. We accept that submission. During the course of cross-examination by Mr Favell, then Counsel for the Mahoneys, Mr Adams' evidence was[38] -

"And can you explain briefly why - what were the planning reasons in your recollection and understanding for the land being zoned rural rather than perhaps having a more intensive urban designation?-- A number of factors came to play and I was involved in the zoning with the 1999 scheme. Essentially there was a block to the west a - an industrial zone block that really took our attention that was completely unserviced in a very difficult location. That drew our attention to try and look at that - the southwest corner of the urban footprint and in terms of how that came together, the future urban zone that was on the subject site is predominantly a residential zone and the ANEF situation meant that that could not be developed for residential purposes. In terms of commercial and industrial options, really we've got and we still have and we had then, enough surplus land for commercial industrial purposes to the north of the Cunningham Highway and Warwick Road so looking at the constraints on the - on the land, the difficulty of getting urban services to it being on the southern side of the highway, providing a logical urban edge to the urban footprint it really meant that - that - a couple of blocks there should have been rezoned back to a more appropriate rural zone and that's what was done."

[50] Subsequently, Mr Adams said[39] -

"Now, at the time of the 1999 rezoning of the subject land, did you or anyone else to your knowledge, have foreknowledge that the subject site or part of it was going to be required for a future road resumption in 2006?-- No. No. Our expectations were that it was probably heading towards Champions Way-----

And can you explain also - when you say our expectations, are you referring to the council planning officers or the council generally or who are you referring to?-- Probably the council staff more so would be engineers and planners.

Right. And are engineers and planners the ones that advise the council as to future directions?-- Certainly are.

Now, you also indicate in your affidavit or your statement that at no stage were you aware of any approach or any - anything of that nature from the DTMR to the council or any council officers in any communicating in 1998 or 1999 the future road requirement; is that correct?-- That's correct.

Are you aware as the planner for Ipswich City Council, of any possible connection between the zoning of the land in 1999 and it's ultimate presumption in 2006?-- No."[40]

[51] The effect of that evidence is, in our opinion, that Mr Adams stated the reasons for the change in zoning of the subject land effected by the 1999 Planning Scheme. He also said that he was involved in the 1999 zoning, the clear implication being that he was able to and did state, from his own knowledge, the reasons for the rezoning. This evidence was not referred to by the learned Member in his reasons for judgment.

[52] It was not put to Mr Adams that the reasons he gave for the downzoning in his statement were not the actual reasons. Nor was there any effective challenge, in cross examination, to Mr Adams' oral evidence as to the reasons for the rezoning of the subject land. Indeed the learned Member said that, from his observations of the witnesses who gave evidence, he was satisfied that they were being truthful and endeavouring to be of assistance to the Court.[41] The learned Member correctly noted that there were no contemporary written reasons for the rezoning[42]. The lack of a written record as to the reasons does not lead to the conclusion that Mr Adams' reasons in his oral evidence were incorrect.

[53] Further, the evidence given by the town planner Mr Perkins, supported the reasons for the downzoning given by Mr Adams in as much as Mr Perkins' evidence was that in his opinion the subject land was rezoned for planning reasons and that the rezoning was not connected with the resumption.[43] It would not be a sensible approach to change the zoning until a specific alignment for the corridor had been determined, he said. Further, the designation of the subject land as Rural was not an appropriate mechanism for preserving the corridor for future transport purposes. A zoning such as special purpose, community purpose, or special purpose road would be more appropriate.[44]

[54] Civil engineer, Mr McAnany also said that there were sound reasons, relating to sewerage reticulation and maintenance of water quality in the land waterways, which would have been relevant considerations in the change in designation.[45]

[55] We consider therefore that the learned Member erred in his understanding of the evidence. Mr Adams did give evidence of actual reasons for rezoning and they were independent of the scheme of resumption. There was no reason not to accept that evidence, and it was consistent with Mr Perkins' and Mr McAnany's evidence. It was also consistent with the contemporary documents discussed below.

[56] Given our conclusions in this regard, it is unnecessary to consider the respondents' submissions that the development constraints over the subject land identified by Mr Adams - aircraft noise and provision of services - similarly impacted other nearby land that was designated Urban in the planning instruments. Whether the rural zoning was appropriate for the subject land and consistent with other zonings in the vicinity is not an issue in these proceedings, once it is accepted that Mr Adams' evidence established the actual reasons for the rezoning.

[57] Having found that there was no evidence as to the actual reasons for the downzoning, the Member held that there was evidence from which he could infer that the reason for the decision to downzone was a step in the resumption scheme. The learned Member found that the effect of various high level planning instruments was that local authorities were directed to protect transport corridors. In particular, the Ipswich City Council was required to preserve the SWTC. Thereafter the Council rezoned the subject land. The learned Member concluded, in the light of this evidence, that it was more likely than not that the downzoning was done in pursuit of the scheme.

[58] Counsel for the appellant submitted that the learned Member erred in concluding that it was more likely than not that the downzoning was done in pursuit of the scheme and relied on the following evidence, in support of those submissions -

• in the period from 1990 to the downzoning in 1999, planning documents produced by the Moreton Shire Council and the Ipswich City Council identified the respondents' land as unsuitable for development for urban purposes;
• in the period between 1996 and the downzoning in 1999, both the State Government and the Ipswich City Council conducted themselves on the basis that any future transport corridor would be south of the respondents' land;
• even after the downzoning, in 2000, the Ipswich City Council showed a preference for any corridor to be south of the respondents' land;
• it was not until 2000 that planning for the future SWTC commenced;
• it was not until 2005 that the planning for the SWTC affirmatively identified a requirement for part of the respondents' land.

[59] Leaving aside Mr Adams' evidence as to the reasons for the downzoning, we do not consider that it was open to the learned Member to infer on the evidence before him that the downzoning was done in pursuit of the resumption scheme.

[60] There were no documents dated before the rezoning which showed the SWTC impinging on the respondents' land. To the contrary, the following documents identified the SWTC as follows -

• The May 1996 discussion draft IRTP for South East Queensland produced by the Department of Transport and Main Roads showed the SWTC well south of the subject land. Although there is a spur link to the Cunningham Highway shown, that link is to the east of the subject land.[46]
• The 1997 IRTP showed the Springfield-Ripley-Ipswich Corridor well south of the subject land;[47]
• The Veitch Lister Consulting Report 1997 showed potential significant roads including the South-West Arterial (Camira Bypass), (an earlier name for the SWTC) which was well south of the subject land;[48]
• On 26 May 1998 the Ipswich City Council advised the Department of Transport and Main Roads of the indicative location of the SWTC in the Swanbank-Ripley area. The attached sketch shows the SWTC heading in a direction well south of the subject land.[49]
• Mr Michel, a Regional Director of the Department of Transport and Main Roads, said that the 1998 SWTC route location draft brief stated that the South West Corridor extends from Springfield to Willowbank and showed the SWTC as commencing in the vicinity of the planned Springfield Town Centre; the corridor is then broadly defined as the area between the Cunningham Highway and the future Ripley Town Centre, and then continues further west to the Cunningham Highway in the vicinity of Willowbank.[50] No map showing the location of the corridor was included in the Record.

[61] It is also noted that in September 2000, the Ipswich City Council wrote to the Department of Main Roads saying that the proposed study area did not appear far enough south along the Cunningham Highway and pointing out that the Veitch Lister Consulting Study 1997 showed the South West Arterial joining the Cunningham Highway in the vicinity of Champions Way, near the Willowbank Raceway. The appended maps show the expanded study area as suggested by the Council.[51] The subject land is shown within the study area for the corridor in that map. Similarly, the project brief dated October, 2000 shows the subject land in the study area for the Corridor.[52] However both those documents were created after the rezoning.

[62] There was no specific finding by the Land Court as to when the resumption scheme commenced. It may be that the policy underlying the scheme was reflected in the documents set out at [60] above. However, given the generality of those documents, even that is speculative. Even if there were sufficient evidence to establish the existence of the resumption scheme before the rezoning, such evidence as there was pointed to a route well south of the subject land.

[63] The respondents referred to the Southern Corridor Planning Study prepared by Humphreys Reynolds Perkins at the request of the Ipswich City Council. The Planning Study reported in April 1999, some three months after the rezoning of the subject land. Under the heading Ripley Road Corridor the report says:[53]

"Alternative access to the City Centre is possible from the western side of the Ripley Valley via the Ipswich Boonah Road and Warwick Road."

Figure 11.4/1 in the Study shows a major inter-suburban link travelling north west from what appears to be the SWTC through the respondents' land to provide a connection to the Cunningham Highway at the Yamanto interchange[54]. Mr Perkins, who was involved in the preparation of this document, gave evidence that the document could not possibly have informed the 1999 Ipswich Planning Scheme because work on the study commenced in March 1998 and in January 1998 the Ipswich City Council had produced a new Planning Scheme Report in which it was proposed that the subject land be located in the Rural zone[55] which was the zoning adopted in the 1999 Planning Scheme.

[64] There was no evidence that the Council was aware of the content of the Southern Corridor Planning Study at the time of the rezoning. Rather Mr Perkins' evidence is to the contrary. We do not consider that this document assists the respondents' case.

[65] As to the planning instruments, the uncontradicted evidence before the Land Court was that in 1993 the previous local authority for the area where the subject land is located, the Moreton Shire Council, published a draft Strategic Plan which identified the land as predominantly within a Rural area, and partly within an Urban Development area. Mr Perkins' evidence was that the land appeared to be predominantly within the Amberley Air Base noise affected area and that Council would not approve development within that area.[56]

[66] We also note that the following Ipswich City Council planning documents leading up to the introduction of the 1999 Planning Scheme showed the subject land in the Rural zone and within the frame area of the Amberley Air Base Buffer Area -

• the Ipswich 1998 Planning Scheme Report
• the draft Planning Scheme which was placed on public display in April 1998.

[67] There is nothing in the evidence that points to an inference that the Ipswich City Council was responding to a directive from the higher planning authorities to protect the proposed SWTC in downzoning the subject land. Further there appear to have been sound planning reasons for the decision, although we accept that those reasons were criticized by the respondents. It follows that there was not sufficient evidence to support a conclusion that the downzoning decision was a step in the scheme of resumption or was made with the intention that or in anticipation that the subject land would be resumed for the SWTC.

[68] Accordingly the appeal should be allowed. Compensation should be assessed on the basis that the land was zoned Rural and that zoning was independent of the scheme of resumption. The orders made by the learned Member should therefore be set aside. For the reasons which follow we are unable to substitute an alternative compensation order, but must remit the matter.

[69] The appellant submitted that the Land Court erred in making final orders (including with respect to interest), as the Member was only asked to determine the San Sebastian issue. The respondents submitted that the Land Court's orders were appropriate in the circumstances.

[70] It appears from the transcript of the discussion between the learned Member and counsel for both parties at the commencement of the hearing[57] that the learned Member was concerned that he was being asked to determine the San Sebastian issue only, and that the parties then envisaged that the trial would have to continue at a later date. The Member queried whether it would be better to deal with the matter in one full hearing.

[71] Counsel then advised the Member that the parties had agreed on two values of the land, depending on whether San Sebastian applied. Both counsel agreed that the determination of the San Sebastian issue would determine the matter, although "formal" issues such as disturbance had not been agreed. The Member was assured that a determination of the San Sebastian issue would be likely to significantly shorten and simplify the proceedings. Consequently the Member said he was prepared to proceed in that way.

[72] Since we have not been advised whether the "formal matters" have been agreed, we consider that it would not be appropriate to make a final determination as to the compensation and any interest payable. Such determination is to be made on the basis that the parties had agreed that the value of the land, in the circumstances we have found, was $275,000.

2. The orders of the Land Court made on 20 March 2013 are set aside.

1. The matter is remitted to the Land Court for determination of the compensation and any interest payable to the respondents.

[1] Mahoney v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11.

[2] Housing Commission (NSW) v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196.

[3] (1994) 85 LGERA 143.

[4] (2008) 29 QLCR 91.

[5] [1990] HCA 42; (1990) 64 ALJR 593.

[6] Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91 at 100 [40].

[7] [1947] HCA 58; (1948) 75 CLR 495 at 571-572.

[8] (2007) QLCR 196 at [22].

[9] ANEF is the acronym for Australian Noise Exposure Forecast.

[10] WESROC is the acronym for Western Sub-Regional Organisation of Councils.

[11] De Tournouer v Chief Executive, Department of Environment and Resource Management [2011] 1 Qd R 200, 206, 207 [22]; Mio Art Pty Ltd v Brisbane City Council (2010) 31 QLCR 174 at 179, 180 [36]; Ipswich City Council v Wilson (2011) 32 QLCR 357 at 363 [41]; Gallo v Chief Executive, Department of Environment and Resource Management [2013] QLAC 6 at [28].

[12] De Tournouer v Department of Environment and Resource Management [2011] 1 Qd R 200 at 207 [22]; Mio Art Pty Ltd v Brisbane City Council (2010) 31 QLCR 174 at 179, 180 [36]; Ipswich City Council v Wilson (2011) 32 QLCR 357 at 363 [41]; Gallo v Chief Executive, Department of Environment and Resource Management [2013] QLAC 6 at [39].

[13] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 125-126 [23]; Ipswich City Council v Wilson [2011] 32 QLCR 357 at 363 [41].

[14] Acquisition of Land Act 1967, Reprint 4D.

[15] [1978] HCA 28; (1978) 140 CLR 196 at 206 per Jacobs J; Gibbs CJ, Stephen, Murphy and Aickin JJ concurring.

[17] [1990] HCA 42; (1990) 64 ALJR 593 at 595.

[18] Pointe Gourde Quarrying and Transport Co Ltd v Subintendent of Crown Lands [1947] AC 565.

[19] Springfield Land Corporation (No 2) Pty Ltd v State of Queensland [2011] HCA 15; (2011) 242 CLR 632 at 640 [17].

[20] [2008] HCA 5; (2007) 233 CLR 259.

[21] [2011] HCA 15; (2011) 242 CLR 632.

[22] See, for example, Melwood Units Pty Ltd v Commissioner of Main Roads (1978) 52 ALJR 593; The Crown v Murphy [1990] HCA 42; (1990) 64 ALJR 593.

[23] [2009] 1 Qd R 546.

[24] [2008] HCA 5; (2008) 233 CLR 259 at 277, 278 [54].

[25] Murphy v The Crown (1989) 68 LGRA 286 at 290.

[26] The Crown v Murphy (1990) 64 ALJR 493 at 594, 595.

[27] [2008] HCA 5; (2008) 233 CLR 259.

[30] (2008) 29 QLCR 91. Although this decision was appealed to the Court of Appeal (Redland City Council v Edgarange Pty Ltd [2009] 1 Qd R 546), the application of Pointe Gourde was not discussed extensively by that Court - see however the judgments of McMurdo P at 549 [9] and Cullinane J at 551 [26].

[31] Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91 at 100 [38].

[32] [1978] HCA 28; (1978) 140 CLR 196 at 207.

[33] Doolan Properties Pty Ltd v Pine Rivers Shire Council [2000] QCA 76; [2001] 1 Qd R 585 at 594 [25].

[34] The Crown v Murphy [1990] HCA 42; (1990) 64 ALJR 593 at 595.

[35] Housing Commission (NSW) v San Sebastian Pty Ltd [1978] HCA 28; (1978) 140 CLR 196 at 207.

[36] See for example the reasons below Mahoney v Chief Executive, Department of Transport and Main Roads (No 3) [2013] QLC 11 at [28]- [32].

[40] It appears that the word "presumption" in the final section of the quotation is a mistranscription of "resumption".

[41] Mahoney v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11 at 45.

[43] R1/217, see also R4/628,629; R4/634; R4/791.