Haber v Chief Executive, Department of Main Roads [2005] QCA 123

Bill Cooper & Associates (Moranbah) for the applicant

[1] JERRARD JA: In this application I have read the reasons for judgment of Keane JA, and the further observations of Fryberg J, and respectfully agree with each of those judges and with the orders proposed by Keane JA. I consider it appropriate to rule on the merits of the application for leave to appeal the costs orders, even if the application is out of time.

[2] I add that before 1 January 1978 any registered owner of fee simple land could damage or destroy mangroves growing thereon without breaching Queensland legislation. After that date all such owners needed a permit, as did anyone else. The rights the applicant gained from the planning approval by the local authority in 1975 were irrelevant to the lawfulness of his conduct in damaging or destroying mangroves before 1 January 1978, for which he needed no planning permission at all. The planning permission authorised him to use the land for the purpose approved, but that permission was irrelevant after 1 January 1978 to the lawfulness of his conduct thereafter in destroying or damaging mangroves. That could only be done with a permit granted under the Fisheries Act 1976 (Qld).

[3] The applicant made the issue of the asserted right to continue damaging or destroying mangroves after 1 January 1978 a central plank of the application for leave. Senior counsel submitted that the asserted right to continue destroying mangroves was relevant to the special value of the resumed land to the applicant, as well as to its value excluding that special value. Accordingly, the applicant's failure to present a remotely arguable case in support of the Fisheries legislation point means that leave to appeal should be refused.

[4] KEANE JA: These two applications for leave to appeal from decisions of the Land Appeal Court ("the LAC") were heard together. They may be summarized as follows:

(a) Appeal No 10317 of 2004 is an application for leave to appeal against the order of the LAC of 13 October 2004, whereby it dismissed the applicant's appeal against the determination by the Land Court of compensation payable to the applicant upon the resumption by the respondent of land owned by the applicant ("the Compensation Application");

(b) Appeal No 10369 of 2004 is an application for leave to appeal against the order of the LAC of 13 October 2004, whereby it dismissed the applicant's appeal against the decision of the Land Court to order that the applicant pay 50 per cent of the respondent's costs of the compensation proceedings before the Land Court ("the Costs Application").

[5] I propose to set out the circumstances giving rise to these applications for leave to appeal. I will then deal in turn with the Compensation Application and the Costs Application.

[6] The subject land is located at Malcolmson Street in Mackay. Before resumption, the land enjoyed the benefit of an approval to rezone the land granted by the then Pioneer Shire Council in 1975 ("the 1975 approval"). Under the 1975 approval, the owner of the land was entitled to develop it for use as a caravan park consisting of 250 sites.

[7] As at the date of resumption, 19 February 1999, 200 sites had been developed. Additional filling had been required to complete the second hundred sites; and further filling would be required to complete any further sites. The land which was resumed was land on which the applicant intended to develop the remaining 50 caravan sites.

[8] The actual terms of the 1975 approval are no longer available. It appears that it was a condition of the 1975 approval that the land be filled, where necessary, to a height of 22.5 metres State Datum. Observance of this condition would now require the destruction of mangroves. Since 1 January 1978, a permit has been required under either the Fisheries Act 1976 (Qld) or the Fisheries Act 1994 (Qld) ("the Fisheries legislation") in order to carry out activities involving the destruction of mangroves.

[9] In the Compensation Application the applicant seeks to contend that the 1975 approval conferred upon the applicant "the right to fill as part of the on-going development of the Caravan Park", which right cannot be taken away by subsequent legislation unless that legislation is made clearly retrospective so as to override rights already created. The applicant also seeks to invoke s 20 of the Acts Interpretation Act 1954 (Qld) in support of the argument that the "right to fill" has not been abrogated by the Fisheries legislation.

[10] The applicant accepts that it is "notoriously difficult to obtain a permit to destroy mangroves, a situation that pertained by the date of resumption in February 1999". The uncontradicted evidence before the Land Court was that the permit required to allow the destruction of mangroves was unlikely to be forthcoming.

[11] The applicant gave evidence to the Land Court, which was uncontested, and which the Land Court and the LAC accepted, that the applicant was able to fill his low-lying land at a cost significantly less than market rates using his own method of filling the land and his own equipment. On the footing that the applicant was thereby able to pursue the completion of the development of the caravan park to 250 sites at a price which was less than market price, he contended the land had a special value to him over and above market value.

[12] The applicant's original claim, as filed in the Land Court, sought a total of $2,684,000. On the last day of the hearing, that claim was reduced to $2,500,000. In final submissions, certain claims were abandoned so that the final claim made by the applicant came to $1,591,000.

[13] The Land Court assessed compensation at $273,000, made up of the following sums:

(c) disturbance (which was an agreed figure) - $11,000.

[14] The respondent had contended that the adverse effect of the resumption upon the value of the caravan park land retained by the applicant was $100,000. The Land Court allowed a sum of $242,000, as compared with the claim by the claimant of $689,000.

[15] The applicant had contended for a figure of $445,000 as the value of the land actually resumed, whereas the respondent had contended that that land had no value at all. The Land Court allowed a value of $20,000 in respect of the land which was taken.

[16] Section 34(1) of the Land Court Act 2000 (Qld) provides that:

(1) Subject to the provisions of this or another Act to the contrary, the Land Court may order costs for a proceeding in the court as it considers appropriate."

[17] The discretion conferred on the Land Court by s 34(1) of the Land Court Act is further constrained by the provisions of s 27 of the Acquisition of Land Act 1967 (Qld) which provides as follows:

(1) Subject to this section, the costs of and incidental to the hearing and determination by the Land Court of a claim for compensation under this Act shall be in the discretion of that court.

(2) If the amount of compensation as determined is the amount finally claimed by the claimant in the proceedings or is nearer to that amount than to the amount of the valuation finally put in evidence by the constructing authority, costs (if any) shall be awarded to the claimant, otherwise costs (if any) shall be awarded to the constructing authority."

[18] The Land Court ordered that the applicant pay to the respondent 50 per cent of the costs of the respondent on the footing that the amount of the valuation finally put in evidence by the respondent was nearer to the amount of compensation as determined than the amount finally claimed by the applicant. The LAC affirmed this decision.

[19] The effect of s 27(2) of the Acquisition of Land Act was, of course, that if any costs were to be awarded, they could only have been awarded to the respondent. In the Costs Application, the applicant contends, however, that the Land Court erred in exercising its discretion under s 27 to order the appellant to pay any part of the respondent's costs; and that the LAC erred in failing to accept his contention in that regard.

[20] The applicant contends that the LAC erred in law:

(a) in failing to determine in favour of the applicant that the 1975 approval entitled the applicant to continue his filling operations without a permit under the Fisheries Act 1994 notwithstanding that mangroves will be destroyed as a necessary consequence of those operations. This determination was, so it is argued, necessary to the identification of the highest and best use of the site before the resumption ("the Fisheries legislation point"); and

(b) in failing to appreciate that the applicant's special ability to exploit the entitlement under the 1975 approval meant that the land was of special value to him as owner of the site ("the Special Value point").

[22] The first thing to be said about the Fisheries legislation point is that the Land Court found, and the LAC affirmed,[1] that even if the development of the additional 50 caravan sites could lawfully have been effected on the resumed land, it would not have been economic to do so. That is a conclusion of fact from which no appeal lies. That being so, a real question arises as to whether this Court should refuse leave to appeal, either on the basis that the issue to be agitated is in truth a factual issue, or on the related basis that, because of the factual conclusion of the Land Court and the LAC, a resolution of the Fisheries legislation point in the applicant's favour would serve no useful purpose in that it would not result in any increase in the value of the applicant's claim.

[23] Nevertheless, the point which the applicant urges as an error of law on the part of the LAC is so clearly without substance that it is convenient to dispose of the Compensation Application on the basis that leave to appeal should not be granted because the decision of the LAC is not attended by sufficient doubt to warrant the grant of leave to appeal.[2]

[24] It may be accepted for the sake of argument that the 1975 approval remained valid[3] in the sense that it continued to confer rights of development on the applicant, but the exercise of those rights is, and always has been, subject to the law as enacted by the Parliament. To the extent that Parliament proscribes the destruction of mangroves other than pursuant to a permit, the exercise of rights under the 1975 approval is restricted. In this way, the approval remains valid but its value is diminished because the rights which give it monetary value may not be exercised save in accordance with the law as declared by the legislature from time to time. There is no retrospectivity in treating the provisions of the Fisheries legislation as applying to activities which occur after it has been enacted and come into operation. The 1975 approval always operated in the context of the laws of the land. There was never a legal possibility of the local authority granting a right which would be exercisable by the grantee without regard to the laws enacted by the Parliament. The relevant proscriptions contained in the Fisheries legislation applied to the destruction of mangroves only after that legislation came into force. The Fisheries legislation did not operate retrospectively to proscribe conduct which occurred before it came into force. As was said in Robertson v City of Nunawading:[4]

"There cannot, in any relevant sense, or perhaps in any sense, be a 'right' to exemption or immunity from legislative action. The taking of legislative action in a field where previously there was none cannot be treated as an impairment of a right for the purposes of the principle [against retrospectivity]."

[25] The applicant's attempt to invoke the aid of s 20 of the Acts Interpretation Act is also misconceived. First, it is wrong to speak, as the applicant's submissions do, of a "right to fill". That is because the filling of the land was a condition of the 1975 approval. The benefit of the approval was subject to the obligation to fill the land to the prescribed level. If the development was to proceed, then the condition as to filling the land had to be observed; but the 1975 approval did not purport to confer a right to continue filling the site into the indefinite future.

[26] Even if the applicant was given a "right" to continue to fill the land, reference to s 20 of the Acts Interpretation Act shows that it says nothing which might be apt to preserve any right in the applicant to continue filling operations free of the obligation to observe the requirements of the Fisheries legislation in relation to the destruction of mangroves. The subject matter of s 20 is the alteration of rights or liabilities created by an Act of Parliament as a result of the amendment or repeal of that Act. Even if it may be accepted that a "right to fill" under the 1975 approval owed its existence to the Local Government Act 1936 (Qld), it cannot sensibly be argued that the enactment of the Fisheries Act 1994 was an amendment of the Local Government Act.

[27] The special value which the applicant asserts depends upon his ability to exploit the 1975 approval for an indefinite period of time by the low costs methods which give him a special advantage in the market. Even if all other aspects of the applicant's argument in relation to special value were accepted, if the applicant was not entitled to continue filling operations he could not have completed the further 50 caravan sites so that no special value attached to the land.

[28] The effect of my conclusion in relation to the Fisheries legislation point means that the fundamental assumption on which the Special Value argument is premised is incorrect. Accordingly, there is no substance in the Special Value point.

[29] The applicant contends that the LAC erred in failing to correct the error of the Land Court in exercising the discretion conferred on it by s 34(1) of the Land Court Act 2000 (Qld) and s 27(1) of the Acquisition of Land Act 1967 (Qld). It appears that this application was filed out of time. The Court heard full argument on the application for leave, and I am of the firm view that the application would have failed on the merits even had it been filed within time. I shall explain why I take this view.

[30] The applicant submits that the Land Court erred in failing to regard it as decisive of the exercise of its discretion that:

(a) the applicant had no choice but to bring the claim for compensation; and

(b) that the award of costs would "obviously and significantly erode" the applicant's compensation.

The applicant concedes that these matters were taken into account by the Land Court, and, having made that concession, is driven to the extreme argument that these considerations should override all other factors which also have a legitimate claim to affect the exercise of the discretion to award costs. Those other factors include consideration such as the relative success of the parties on the issues contested between them,[5] and the extent to which the applicant's claim could fairly be said to have been excessive,[6] even if not "vexatiously" or "grossly" so.

[31] The applicant assumes a heavy burden in asking this Court to affirm that as a matter of law, either of the considerations referred to above must be decisive of the proper exercise of the Land Court's discretion as to costs. In my view, the applicant fails at this threshold. The proposition upon which the applicant's argument about costs depends is not one which can be accepted by this Court. It requires the imposition by this Court of fetters upon the discretion conferred on the Land Court which the legislature has left relevantly unfettered.

[32] The applicant also urges that leave should be granted by this Court to enable the applicant to contend for acceptance of the principle that the discretion conferred by s 27 of the Acquisition of Land Act should be exercised against an acquiring authority where that authority has engaged in "disqualifying conduct" in relation to the compulsory requisition of land. The LAC did not reject the relevance of the respondent's conduct as a factor relevant to the exercise of the discretion under s 27 of the Acquisition of Land Act. Indeed, it specifically adverted to "the fact that the appellant had no choice but to bring the claim", and to the Land Court's acknowledgement that it was "reasonable for the appellant not to have accepted the respondent's original offer of $1,000 ... and to prepare for a hearing", as matters relevant to the exercise of the Land Court's discretion as to costs.[7] To the extent that the applicant's complaint is that this consideration was not accorded more weight by the Land Court and the LAC, that complaint does not identify an error of law on the part of either the Land Court or the LAC.

[33] Further, as to the applicant's complaint that he was forced to litigate because of the respondent's derisory offer of $1,000, it must be recognized that the order for costs denied the respondent half its costs. That reduction was itself a recognition (albeit in a broad brush way) that, insofar as the respondent incurred costs before it disclosed a realistic view of the value of the land, it should not recover those costs. There can be no doubt that the bulk of the parties' costs would have been incurred during the five day hearing before the Land Court.

[34] Once the valuation reports were exchanged, and this occurred one month prior to the Land Court hearing, the applicant was on notice of the respondent's real view of the value of the claim. He then had the opportunity to negotiate towards a satisfactory figure had he been minded to do so, and had the respondent been willing to engage in that process. There is no suggestion in the material before this Court that either party was disposed to negotiate further; but, however that may be, it cannot sensibly be said that the applicant was at that stage "compelled to litigate" either in the manner he did, or for as long as he did, by the respondent's original offer of $1,000. Most importantly in this regard, the attitude adopted by the respondent had nothing to do with the amount "finally claimed by the applicant", that being the amount which is significant for the purposes of the operation of s 27 of the Acquisition of Land Act.

[35] As to the applicant's complaint concerning the erosion of the applicant's compensation by the award of costs, such an outcome is plainly contemplated by s 27 of the Acquisition of Land Act. No doubt the Land Court will not seek to punish dispossessed landowners merely because they have an enthusiastic view of their entitlements to compensation; but it cannot be denied that the terms of s 27 of the Acquisition of Land Act expressly create the possibility that a dispossessed landowner who persists in too high a claim may be required to pay a price for that enthusiasm. This price will inevitably erode the compensation otherwise payable to that landowner.

[36] As to the quantum of the costs awarded to the respondent, no basis on which this Court might interfere with this exercise of the Land Court's discretion has been identified by the applicant.

[37] The arguments advanced by the applicant in each application are not of sufficient substance to warrant the grant of leave to appeal against the decisions of the LAC. I would, therefore, dismiss each application and order the applicant to pay the respondent's costs to be assessed on the standard basis.

[38] FRYBERG J: The nature of these applications for leave to appeal is set out in the reasons for judgment of Keane JA. In what has been called the compensation application, the proposed grounds of appeal are as follows:

"(1) The Land Appeal Court (and the Land Court) erred in law in failing to find that prior to embarking on a determination of the highest and best use, it was necessary to determine the so called "Fisheries Act point", namely that the 1975 town planning approval to develop a 250 site caravan park remained valid notwithstanding the 1976 (and subsequent) amendments to the Fisheries Legislation.

(2) The Land Appeal Court (and the Land Court) erred in law in failing to determine the Fisheries Act point in circumstances where such a failure inevitably coloured the approach of those Courts to:

(a) the question of (and the evidence pertaining to) the highest and best use of the subject land generally; and in particular

(b) the highest and best use of the parent parcel (ie "the whole of the land") in the "before" situation namely a caravan park with 200 existing caravan sites together with all necessary approval for; the right to construct; and the land available to accommodate an additional 50 caravan sites; and

(c) the highest and best use of the parent parcel in the "after" situation namely a caravan park with 200 existing caravan sites and no prospect of (let alone the right to construct or the land available to accommodate) any additional caravan sites in the future; and

(d) the value applied (ie nominal value only) to the resumed land.

(3) The Land Appeal Court (and the Land Court) erred in law in failing to determine in the circumstances that the resumed land had a special value to the appellant or was capable of having a special value to the appellant, whether that special value be categorised as or related to special value, disturbance or severance (in accordance with the recent authorities).

(4) The Land Appeal Court in particular erred in confusing the concept of special value with market value (Reasons: paragraph [29]) in circumstances where the law is clear that special value is a monetary sum or value in respect of the owner which exceeds market value."

[39] Despite the scope of those grounds the only material from the courts below put before this court was the decision of the Land Appeal Court and (belatedly) a copy of a "Full Planning and Development Certificate" and annexures issued by the Mackay City Council together with three enlarged aerial photographs of the applicant's land. This was insufficient for the Court to gain a full appreciation of the factual matrix. In the result the argument on the application proceeded in something of a vacuum; a number of questions which arose during the argument had to remain unanswered. That might have limited the grounds upon which leave could be granted. This was unsatisfactory, but in the end it does not matter. It is not a case for leave.

[40] It appears from the aerial photographs that the applicant's land, an approximate rectangle defined by survey lines, included a section of mangrove-covered tidal land which we were told was part of the Pioneer River system. That section was resumed by the respondent. The applicant claimed compensation on the basis that he would have been able to use that section for his caravan park, by filling it and constructing van sites on it.

[41] As Keane JA demonstrates in his reasons for judgment, State legislation has since 1978 required people to obtain a permit to destroy mangroves. Without a permit filling (which necessarily involves destruction of mangroves) is prohibited. It does not appear whether the applicant has ever tried to obtain a permit, but the application was conducted on the assumption that none would be forthcoming. The applicant submitted that he did not need to obtain a permit because the legislation would not be construed so as to deprive him of a vested right. Relying on findings of the Land Appeal Court, he identified that right as "the benefit of town planning approval for development for a caravan park consisting of 250 sites obtained from the then Pioneer Shire Council ... in 1975." He submitted that it was a condition of the approval that the land be filled to a height of 22.5 m State Datum. The approval was, he submitted, an ongoing approval without any time limit.

[42] Notwithstanding its importance the applicant was unable to place before the courts below any copy of the relevant approval. That is unfortunate, as it is critical to the applicant's submissions that the approval be an ongoing one. The nature of the approval and the terms of the legislation under which it was granted would, of course, be material to this question. According to the planning and development certificate referred to above, there is no record of any consent for use under the relevant section of the Local Government Act 1936. The only approvals are one to re-zone part of the land from Residential A to Residential B for a caravan park, granted in late 1974 or early 1975, and two building permits granted in October and December 1975.

[43] The re-zoning was to enable expansion of the caravan park and it was gazetted on 27 March 1975. There is no evidence that any re-zoning deed was entered into between the applicant and the Council by which any rights or duties might have been conferred upon the applicant. The certificate states, "[T]here is sufficient evidence to suggest ... filling, drainage, street works and sewerage works were required by Council for the development of the Caravan Park. The works details were approved by Council and undertaken in stages; the whole of the land approved for the Caravan Park has not yet been developed."

[44] The building permits are not in evidence. They ante-dated the coming into force of relevant parts of the Building Act 1975. Presumably they were issued under the bylaws of the then Pioneer Shire Council. They do not answer the description "approval for development" used in the judgment of the Land Appeal Court. It is difficult to imagine how a building permit of such a nature could be regarded as an ongoing approval without any time limit.

[45] The applicant criticised the Land Appeal Court for failing to determine what he called "the fisheries legislation point". His "central contention" in relation to that point was "that the 1975 town planning approval to develop a 250 site caravan park remained valid notwithstanding the subsequent amendments to the fisheries legislation." On the material before us, the criticism is unwarranted. Without any identification of the precise nature and terms of the approval or the legislation under which it was given it would have been impossible to decide the point.

[46] Even assuming the existence of an approval answering the description referred to above,[8] the applicant cannot succeed. The argument advanced on his behalf assumes that such an approval conferred "the right to fill as part of the ongoing development of the Caravan Park". There is no reason to think it did any such thing. Assuming compliance with the planning scheme for the Shire (and subject to the provisions of the Harbours Act 1955 relating to reclamation of land) the applicant did not need to be given the right to fill his own land; the right to do so was an incident of his ownership. The assumed approval allowed him to build and use caravan sites, not to fill the land. On the assumption, and for the reasons given by Keane JA, the fisheries legislation point must be decided against the applicant.

[47] On the other matters raised in the applications I agree with Keane JA. I also agree with the orders which his Honour proposes.

[1] See Haber v Department of Main Roads [2004] QLAC 0086; LAC 2004/0023, 13 October 2004 at [79] - [83].

[2] See Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCAFC 844; (1991) 33 FCR 397 at 398 - 400; Rayner v Whiting [1999] QCA 214 at [5]; [1999] QCA 214; [2000] 2 Qd R 552 at 553.

[3] Cf Haber v Department of Main Roads [2004] QLAC 0086; LAC 2004/0023, 13 October 2004 at [83].

[4] [1973] VicRp 81; [1973] VR 819 at 825.

[5] In this regard, as the respondent points out, the Land Court disallowed:

(a) the applicant's "redundancy" claim as having "no substance";

(b) the applicant's "solatium" claim on the basis that it was "abundantly clear" that it could not succeed.

See Haber v Department of Main Roads [2003] QLC 0083; A2001/0709 at [170] and [192]. Further, the respondent also points out that the applicant's claims for $500,000 for loss of amenity due to the construction of the road, and for $520,000 for demolishing the original caravan park were abandoned by the applicant, but only during final addresses.

[6] Haber v Department of Main Roads [2004] QLAC 0087; LAC 2004/0047, 13 October 2004 at [19].

[7] Haber v Department of Main Roads [2004] QLAC 0087; LAC 2004/0047, 13 October 2004 at [17].