Court of Appeal (Qld)|2009-02-13|Before: McMurdo P, Cullinane and Atkinson JJ, Separate, reasons for judgment of each member of the Court, McMurdo P and Atkinson J, concurring as to the orders made, Cullinane J, dissenting in part
McMurdo P, Cullinane and Atkinson JJ, Separate, reasons for judgment of each member of the Court, McMurdo P and Atkinson J
Catchwords
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES –
APPEALS FROM THE LAND APPEAL COURT – NATURE OF RIGHT
REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – COMPENSATION
– ASSESSMENT – TIME AT WHICH COMPENSATION ASSESSED
Source
Original judgment source is linked above.
Catchwords
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES –APPEALS FROM THE LAND APPEAL COURT – NATURE OF RIGHTREAL PROPERTY – COMPULSORY ACQUISITION OF LAND – COMPENSATION– ASSESSMENT – TIME AT WHICH COMPENSATION ASSESSED– INJURIOUSAFFECTION OF ADJOINING LAND – where a decrease in value of land due toscheme underlying the acquisition– where a claim for compensation forinjurious affection arises – where Land Appeal Court applied the PointeGourde principle in reverse – whether Pointe Gourde principlein reverse operates when a claim for injurious affection made – whetherdouble compensation can occur – whetherPointe Gourde principleapplies in such circumstancesAcquisition of Land Act 1967 (Qld), s20(2)Integrated Planning Act 1997 (Qld), s 5.4Land Court Act2000 (Qld), s 74Local Government Act 1936 (Qld), s 33
Local
Government (Planning and Environment) Act 1990 (Qld), s 3.5(9)
Boncristiano v Lohmann [1998] 4 VR 82, referred to
Melwood
Units Pty Ltd v Commissioner of Main Roads [1979] AC 426 at 434
[1978] 3
WLR 520, referred to
Nelungaloo Pty Ltd v Commonwealth (1947) 75 CLR
495
[1947] HCA 58, referred to
Pointe Gourde Quarrying and Transport Co
Ltd v
Sub-Intendent of Crown Lands (1947) 63 TLR 486
[1947] AC
545, referred to
The Queen v Murphy (1990) 64 ALJR 593
[1990] HCA 42
,
referred to
Spencer v The Commonwealth (1907) 5 CLR 418
[1907] HCA 82, referred
to
TM Burke Estates Pty Ltd v Noosa Shire Council [1998] 2 Qd R 448
[1997] QCA
267, referred to
Walker Corporation Pty Limited v Sydney Harbour
Foreshore Authority (2008) 82 ALJR 489
[2008] HCA 5, referred
to
Waters v Welsh Development Agency [2004] 2 All ER 915
[2004] UKHL
19, referred to
Judgment (136 paragraphs)
[1]
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - APPEALS FROM THE LAND APPEAL COURT - NATURE OF RIGHT
[2]
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - ASSESSMENT - TIME AT WHICH COMPENSATION ASSESSED - INJURIOUS AFFECTION OF ADJOINING LAND - where a decrease in value of land due to scheme underlying the acquisition - where a claim for compensation for injurious affection arises - where Land Appeal Court applied the Pointe Gourde principle in reverse - whether Pointe Gourde principle in reverse operates when a claim for injurious affection made - whether double compensation can occur - whether Pointe Gourde principle applies in such circumstances
G J Gibson QC, with Mr S Ure, for the applicant/appellant
[16]
McCarthy Durie Ryan Neil Solicitors for the respondent
[17]
[1] McMURDO P: Atkinson J has set out the relevant facts, issues and statutory provisions. I will only repeat or add to these to explain my own reasons for granting this application for leave to appeal, but refusing the appeal with costs and affirming the decision of the Land Appeal Court.
[18]
[2] The present respondent, Edgarange Pty Ltd, which I shall refer to as Edgarange, purchased a large parcel of land, within the local government area of the present applicant, the Redland City Council. Edgarange began to develop the land for sale as industrial lots. The Council compulsorily acquired a portion of that land under the Acquisition of Land Act 1967 (Qld) for road and sewerage treatment purposes. Prior to the Council acquiring the land and as part of the scheme of resumption, the land was injuriously affected by a provision of the Council's planning scheme. Edgarange applied under both the Acquisition of Land Act and the planning legislation for compensation from the Council.[1] To date, Edgarange has pursued its rights only under the Acquisition of Land Act. The Land Court, determined the preliminary question of what was the highest and best use of the land before acquisition. It held that compensation should be assessed as if the Council's planning scheme did not exist at the date of the Council's acquisition of the land. The Land Court's determination was based on a well-established principle of compensation known by the shorthand term, "the Pointe Gourde principle",[2] a principle which also operates in reverse. The parties have agreed that the amount of such compensation is $5,992,098. The Council unsuccessfully appealed to the Land Appeal Court contending that the Land Court erred in applying the Pointe Gourde principle in reverse to Edgarange's compensation application under s 20(2)Acquisition of Land Act. It now applies for leave to appeal to this Court contending that its appeal should be allowed and the decision of the Land Appeal Court reversed.
[19]
[3] Part 4 of the Land Court Act 2000 (Qld) provides for appeals from the Land Appeal Court of Queensland to this Court. Relevantly, it provides:
[20]
(1) A party to a proceeding in the Land Appeal Court may appeal a decision of the Land Appeal Court to the Court of Appeal on the ground -
[21]
(a) of error or mistake in law on the part of the Land Appeal Court;
[22]
(2) However, the party may appeal only with the leave of the Court of Appeal or a judge of appeal.
[23]
The Court of Appeal may do 1 or more of the following -
[24]
(a) return the matter to the Land Appeal Court for decision in accordance with the Court of Appeal's decision;
[25]
(b) affirm, amend, or revoke and substitute another order or decision for the Land Appeal Court's order or decision.
[26]
(c) make an order the Court of Appeal considers appropriate."
[27]
[4] At the hearing, this Court considered that the question of leave to appeal was so closely related to the Council's contentions in its proposed appeal that both the application for leave and the merits of any appeal if leave were granted should be heard together.
[28]
[5] The question of law raised in this application is a narrow one. It is whether the Pointe Gourde principle applies in reverse to Edgarange's application for compensation under s 20(2) where planning legislation separately provides for compensation arising from a planning scheme's adverse operation on the acquired land. The reasons of the dissenting member of the Land Appeal Court and the submissions on behalf of the Council demonstrate that the answer to this question is not straightforward.
[29]
[6] The application of the Pointe Gourde principle in reverse was explained succinctly by Lord Russell of Killowen in delivering the judgment of the Judicial Committee of the Privy Council in Melwood Units Pty Ltd v Commissioner of Main Roads:[3]
[30]
"Under the principle in Point (sic) Gourde Quarrying and 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 [land to be resumed] and then resume and sever on the basis that the destroyed potential had never existed."
[31]
[7] The High Court has noted that the Pointe Gourde principle has application in Queensland: The Crown v Murphy.[4] It has very recently affirmed the principle in Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority.[5] This approach is consistent with the central principle of the law applying to compensation for compulsorily acquired land: the purpose of compensation is to provide the former owner of the property with the full money equivalent of that of which the owner has been deprived. See Nelungaloo Pty Ltd v Commonwealth[6] and Walker Corp.[7] This principle, which involves ascertaining the money equivalent for the loss suffered, is often known by the shorthand term, "the principle of equivalence".
[32]
[8] The Pointe Gourde principle has been applied in reverse on many occasions in Queensland: see, for example, Doolan Properties Pty Ltd v Pine Rivers Shire Council.[8]
[33]
[9] A literal reading of the terms of s 20(2), without reference to relevant case law, is capable of supporting the contentions of the Council. But, as I have noted, the Pointe Gourde principle and its application in reverse are a well-established part of Queensland law. This is so, even though the principle has not received specific statutory recognition as in other Australian jurisdictions: see Jacobs, The Law of Resumption and Compensation in Australia.[9] It is noteworthy that the Acquisition of Land Act was enacted in 1967. Its full title is "An Act to consolidate and amend the law relating to the acquisition of land for public works and other public purposes, and for other purposes". Although the Pointe Gourde principle has been part of the law relating to compensation for compulsorily acquired land since 1947, there is nothing in the Acquisition of Land Act nor in the speeches introducing it which suggest a legislative intent to qualify that principle. This suggests the correctness of the majority decision of the Land Appeal Court in applying the Pointe Gourde principle in reverse to s 20(2).
[34]
[10] The dissenting member of the Land Appeal Court identified what he considered to be a potential evil in applying the Pointe Gourde principle in reverse when interpreting s 20(2). He considered it would lead to a triumph of pragmatism over principle, requiring courts to tailor its application to the facts of each case so as to avoid the prospect of double compensation. The Council in its submission to this Court also warned of the danger, not just of double compensation, but of "a windfall" should the Pointe Gourde principle apply in reverse to the assessment of compensation under s 20(2).
[35]
[11] Whilst these arguments are open, I remain unconvinced. I consider the better view is that of the majority in the Land Appeal Court: these concerns can be dealt with adequately by the courts determining compensation applications.[10] The application of the Pointe Gourde principle in reverse to the assessment of compensation under s 20(2) will not result in unfair windfalls or double compensation when the individual circumstances of each case are taken into account. Lord Nicholls of Birkenhead observed in Waters v Welsh Development Agency,[11] in applying the Pointe Gourde principle:
[36]
"there is of course no magical detailed formula which will provide a ready answer in every case. That is in the nature of things, circumstances varying so widely. But some pointers may be useful. (1) 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."
[37]
[12] This is hardly a novel proposition. In all aspects of the law, courts take care in assessing compensation or awarding damages to avoid double compensation. See, for example, in the context of damages under the Trade Practices Act 1974 (Cth), the observations of the High Court in Murphy v Overton Investments Pty Ltd.[12] So, too, in assessing compensation arising from the compulsory acquisition of land, courts will routinely avoid double compensation: see, for example, Polegato & Anor v Griffith City Council;[13] Shannon Luka v Lake Macquarie City Council[14] and Nevitoro Investments Pty Ltd v Hawkesbury City Council.[15] Such an approach is not a triumph of pragamatism over principle, but the orthodox application of legal principle to the individual facts of each case in fairly assessing damages or awarding compensation. It is not a reason for this State to depart from the application of the well-established Pointe Gourde principle in reverse to applications for compensation under s 20(2).
[38]
[13] It is nonetheless comforting to note that Edgarange through its senior counsel has undertaken not to seek compensation under planning legislation if it ultimately remains successful in its compensation application under s 20(2).
[39]
[14] In my view, the Land Appeal Court has not erred in the present circumstances in applying the Pointe Gourde principle in reverse to the assessment of compensation under s 20(2). It is a fine line as to whether leave to appeal should be granted. The case turns on its own facts and there has been no error of law. But in the end I am satisfied that the question of law raised is of sufficient importance to justify the granting of leave to appeal, even though the resulting appeal must fail and the decision of the Land Appeal Court affirmed.
[40]
[16] CULLINANE J: I respectfully adopt for the purposes of these reasons the outline of the factual history of the matter set out in the reasons of Atkinson J.
[41]
[17] The application for leave concerns a single legal issue. Argument on the application and the substantive appeal were heard together.
[42]
[18] Briefly the issue can be stated as being whether in assessing compensation pursuant to the Acquisition of Land Act 1967 as amended upon the acquisition of land thereunder, the principle known as the Pointe Gourde principle is to be applied where the land resumed was earlier "down zoned" (to use the term of the applicant) by provisions of a town planning scheme pursuant to which a right to compensation in respect of such down zoning arises. The applicant argues that it should not be applied in such cases and says that this is so whether a claim has been made but is yet to be determined or whether it has not yet been made but can still be made at the time compensation falls to be assessed. A fortiori the argument would apply where compensation for injurious affection had already been awarded.
[43]
[19] The principle has been referred throughout as being the Pointe Gourde principle in reverse but for the sake of simplicity I will refer to it as the Pointe Gourde principle.
[44]
[20] The applicant used the term "down zoning" to cover any adverse impact arising from a town planning scheme upon land which gives rise to a right to claim injurious affection as a consequence. Generally this will be the result of a single rezoning of the land limiting its use to certain public purposes preparatory to its subsequent acquisition. In the present case there were multiple impacts as the result of town planning schemes but nothing turns upon this distinction and the term "down zoning" is used to cover all such cases.
[45]
[21] In the present case the respondent made a claim for injurious affection but it has not to this point been pursued. Before us senior counsel for the respondent gave an undertaking, the effect of which was that no such claim for compensation would be pursued if the respondent retained the award of compensation made by the Land Court below and affirmed by the Land Appeal Court.
[46]
[22] Since the applicant's concern is that the respondent would be entitled to keep the award of compensation made under the Acquisition of Land Act and in addition pursue a claim for injurious affection for the down zoning it seems to me that the factual basis upon which the applicant has proceeded no longer exists. No claim for compensation for injurious affection consequent upon the down zoning has proceeded to an assessment in the Planning and Environment Court and an undertaking has been given that none will proceed upon the assumption that the award stands. There was no other challenge by the applicant to the assessment of compensation by the Land Court.
[47]
[23] The Pointe Gourde principle is one of fundamental importance in the assessment of compensation for the acquisition of land for public purposes.
[48]
[24] That it is part of the law of Queensland is established by a number of cases of the highest authority including judgments of the High Court and the Privy Council. See The Crown v Murphy [1990] HCA 42; (1990) 64 ALJR 593 and Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426.
[49]
[25] Briefly stated the effect of the principle is that any increase or decrease in the value of land arising from the scheme underlying the acquisition is to be ignored in assessing the compensation payable upon the acquisition of the land.
[50]
[26] In some States the legislation dealing with the acquisition of land for public purposes expressly recognises the principle. No such recognition is to be found in the Acquisition of Land Act. In fact, s 20(2) on its face would appear to be at odds with such a principle but has not been seen as an impediment to its application. The fundamental nature of the principle is such as to require its recognition as necessary to produce a fair result as between a dispossessed owner and the resuming authority.
"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."
[53]
[28] In the present case the applicant seeks a qualification to the Pointe Gourde principle which would allow in the circumstances of a case such as this, s 20(2) to take effect according to its terms.
[54]
[29] That is, the applicant contends that in assessing compensation upon the acquisition of land for public purposes, which land has been previously affected by the impact of provisions of a town planning scheme giving rise to a right to compensation for injurious affection in respect of such adverse impact and where such right is still able to be pursued at the time of the acquisition of the land and the assessment of compensation therefore, such compensation is to be assessed upon the basis of the reduced value of the land consequent upon the adverse impact of the town planning scheme instead of ignoring it as the Pointe Gourde principle would require.
[55]
[30] Senior counsel for the applicant acknowledged that the proposition for which his client contends finds no support in any of the authorities.
[56]
[31] It is obvious that if the applicant's argument is to be accepted then compensation will be payable for injurious affection at the time of the adverse impact of the town planning scheme in accordance with the provisions of that legislation namely by a comparison of the value of the land immediately before the adverse impact and its value immediately thereafter. In addition the owner would, upon the subsequent acquisition of the land be entitled to the value of the taken land assessed according to its reduced value as a result of the adverse impact together with compensation under any of the specific heads of compensation which the Acquisition of Land Act recognises. This would involve the assessment of compensation in two separate tribunals. For present purposes I put to one side any complication arising from the fact that the right to compensation for injurious affection and the right to compensation upon resumption may be held by different claimants.
[57]
[32] On the other hand the assessment of compensation which was made in this case which was made in accordance with the hitherto accepted basis for such assessment was based upon the assessment of the value of the land as at the date of acquisition by reference to all of the considerations which touch upon that issue but ignoring under the Pointe Gourde principle the reduction in value brought about by the impact of the town planning scheme. That is the value of the land affected by all considerations relevant to that question but ignoring the limitations arising from the impact of the town planning scheme. In addition such assessment would include assessment of compensation under any of the relevant statutory heads of compensation permitted by the Act.
[58]
[33] There may be a very significant difference between the two outcomes resulting from the two approaches.
[59]
[34] In many cases years pass between the time that the right to injurious affection arises and the subsequent assessment upon resumption of the land of compensation under the Acquisition of Land Act.
[60]
[35] In the present case some six years passed and in some of the other cases to which we were referred considerably longer periods passed between the adverse impact of the town planning scheme and the subsequent resumption.
[61]
[36] The circumstances of the land may have changed very significantly in that time. For example, at the earlier date the land may be in a rural or semi-rural situation but by the time of acquisition be surrounded by urban development.
[62]
[37] Indeed in the present case senior counsel for the applicant acknowledged that the compensation recoverable by the respondent would be likely to be significantly less because of such considerations upon the approach which the applicant contends for. Mr Scott in his dissenting judgment in the Land Appeal Court briefly touched upon this matter (see (2008) 165 LGERA 351 at [69]).
[63]
[38] The dispossessed owner, then, may suffer a significant disadvantage if the argument of the applicant which requires the modification of the Pointe Gourde principle is accepted when compared to the current position.
[64]
[39] The difference which the compensation recoverable under the two approaches might produce is quite unrelated to the amount of possible overcompensation which is the primary basis of the applicant's argument that the Pointe Gourde principle should not be applied in a case of this kind.
[65]
[40] The matter just referred to it seems to me provides a substantial basis upon which to reject the applicant's argument and to accept the decision of the majority in the Land Appeal Court.
[66]
[41] However as I have said, it seems to me that this is not in any case as things now stand a case in which the issue expressly arises.
[67]
[42] It is of course clear that there is a potential for double compensation in the circumstances of some cases where the Pointe Gourde principle is applied.
[68]
[43] There has been no separate award of injurious affection in this case nor can there be given the undertaking given but it must be accepted that the problem of double compensation can arise.
[69]
[44] It was contended by the applicant that the Court did not have the capacity to ensure that double compensation was avoided when awarding compensation and that the only solution to the problem was to modify the Pointe Gourde principle so that it did not apply in a case of this kind.
[70]
[45] I do not accept that this is the case. In my view the Court is never required to permit an unjust result to follow from the application of a principle of general application. The principle is not to be permitted to operate to bring about an injustice. As Lord Nicholls of Birkenhead said when speaking of the Pointe Gourde principle in Waters v Welsh Development Agency [2004] UKHL 19; [2004] 2 All ER 915 at 931:
[71]
"The principle is soundly based but it should be applied in a manner which achieves a fair and reasonable result. Otherwise the principle would thwart rather than advance the intention of Parliament."
[72]
[46] Moreover, it is not unknown (albeit in circumstances which are different to those here) for courts assessing compensation consequent upon the acquisition of land to have to take into account other rights to compensation in respect of the land to ensure that overcompensation does not occur. See Commercial Banking Co of Sydney Ltd v Penrith City Council (1970) 91 WN (NSW) 642 and R v Compensation Court (WA); Re Della-Vedova (1990) 2 WAR 242. See also Jacobs "The Law of Resumption and Compensation in Australia" (1998) para 13.10.
[73]
[47] The courts can in my view ensure that double compensation is not awarded without qualifying a fundamental principle of the assessment of compensation with possible unintended consequences which might flow from such a qualification.
[74]
[48] I put to one side any complication which might arise in those cases in which different parties may be involved in each of the claims. This is not the case here and how over compensation is to be avoided in those cases can be addressed when those circumstances present themselves.
[75]
[49] In the course of argument the effect of s 33(13) of the Local Government Act 1936 and s 3.5(9) of the Local Government (Planning and Environment) Act 1990 arose. Both of those provisions apply here.
[76]
[50] It is sufficient to say that I think it is clear that the applicant did not in this case seek to exercise the powers conferred upon it under that legislation but rather proceeded to exercise powers available to it under the Acquisition of Land Act. Section 33(13) and s 3.5(9) cannot provide in my view the answer to the issue which arises here.
[77]
[51] Similarly it does not seem to me that s 5.4 of the Integrated Planning Act is a basis for refusing leave. It was not in force at the relevant time but can be expected to apply to most future claims. It was contended that upon its proper construction it would prevent an issue of this kind arising in the future requiring all claims of compensation to be dealt with under the Acquisition of Land Act. I have considerable reservations that the terms of s 5.4 of the Integrated Planning Act can be read in this way.
[78]
[52] Whilst the issue raised by the applicant is of importance it seems to me that ultimately the case is not one in which it can be regarded as any longer directly arising and for this reason I would refuse leave. If leave were to be granted for the reasons I have given above I would have dismissed the appeal.
[79]
[53] The application should be refused and the applicant ordered to pay the respondent's costs.
[80]
[54] ATKINSON J: This appeal from a decision of the Land Appeal Court was brought under s 74 of the Land Court Act 2000 which provides that a party may appeal only with the leave of the Court of Appeal or a judge of appeal and that an appeal may be based only on the grounds of error or mistake in law on the part of the Land Appeal Court, or that that court had no jurisdiction to make the decision, or that it exceeded its jurisdiction in making the decision. In this case the application for leave to appeal and the appeal were heard together. The applicant submitted that the Land Appeal Court made an error of law warranting both the granting of the application for leave to appeal and allowing the appeal.
[81]
[55] The error of law was said to be in the application by the Land Appeal Court of the principle of assessment of compensation, commonly known as the Pointe Gourde principle[16] in reverse to the assessment of compensation payable to a person whose interest in land is resumed pursuant to the Acquisition of Land Act 1967 (ALA). What is commonly referred to as the Pointe Gourde principle is taken from the judgment of the Privy Council delivered by Lord MacDermott in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 at 572:
[82]
"It 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."[17]
[83]
[56] The Pointe Gourde principle in reverse is that compensation for the compulsory acquisition of land cannot include a decrease in value which is entirely due to the scheme underlying the acquisition.[18] The common law principle is that where the value of the land to be acquired is increased or decreased because of the scheme underlying the acquisition, that change in value is to be ignored in assessing the compensation payable on compulsory acquisition of the land.[19]
[84]
[57] The purpose of the principle is perhaps most clearly stated by the High Court in The Crown v Murphy [1990] HCA 42; (1990) 64 ALJR 593 at 595:
[85]
"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 ... 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."
[86]
[58] The question for determination in this case is whether the Pointe Gourde principle in reverse applies where there has been a decrease in value of the land due to the scheme underlying the acquisition in circumstances which give rise to a claim for compensation for injurious affection under the Local Government (Planning and Environment) Act 1990 (the P&E Act) or its predecessor, the Local Government Act 1936 (the LG Act), or the Integrated Planning Act 1997 (IPA).
[87]
[59] The facts, which are not in dispute, may be relatively briefly stated. The respondent Edgarange Pty Ltd ("Edgarange") is a land development company. On 19 July 2000, it entered into a contract to purchase 27.72 hectares of land (the "land") which was part of parcel of land then described as Lot 3 on RP 165277. Lot 3 was situated between Redland Bay Road and Coolnwynpin Creek on the south eastern edge of the Capalaba commercial area. That lot was effectively subdivided by the contract of sale in such a way as to leave the 1.396 hectares fronting Redland Bay Road in the hands of the vendor, Daniel Holzafel.
[88]
[60] To the north west of the land was a sewerage treatment plant belonging to the Redland Shire Council (the "Council"). The land was at that time subject to the Redland Shire Planning Scheme which commenced operation in February 1988 and was zoned Rural/Non Urban. The Planning Scheme included a Strategic Plan (the "1988 Strategic Plan") and a number of Development Control Plans. The 1988 Strategic Plan and Development Control Plan No 1 (DCP1) showed an arterial road (not yet constructed) traversing Lot 3 with the area to the north of that road designated Public Open Space.
[89]
[61] The area of the road to be constructed and the area north of it constitute the part of Lot 3 which was later resumed. The land which was resumed was by that time known as Lots 701 and 702. Lot 701 has an area of 2.692 hectares; and Lot 702, 1.873 hectares.
[90]
[62] In 1998, the Planning Scheme was amended by the substitution of a new Strategic Plan ("the 1998 Strategic Plan"). The 1998 Strategic Plan included a Preferred Dominant Land Use Map, which showed a Future Transport Corridor traversing Lot 3 at about the same place as the arterial road on DCP1. The Future Transport Corridor is generally within Lot 701. The area to the north of it, Lot 702, was designated under the 1998 Strategic Plan as Special Facilities/Public Purpose, to allow for the extension of the sewerage treatment works. Lot 703 was identified, in part, as Special Facilities/Public Purposes and, in part, as Special Protection Area.
[91]
[63] By an application dated 26 February 2001, the respondent and Mr Holzafel made a claim for compensation pursuant to the P&E Act and the IPA from the Council for injurious affection to the market value of Lot 3 arising out of the inclusion of part of that land in the Special Facilities/Public Purposes designation and part of it in the Special Protection Area. That application is still extant to preserve the legal rights of the respondent should this application for leave to appeal and the appeal be successful. However Mr Hughes SC gave an undertaking to this court that if the application for leave to appeal were unsuccessful or the appeal dismissed and the decision were not the subject of a successful appeal to the High Court then the claim for compensation under the P&E Act and the IPA would be abandoned.
[92]
[64] On 8 October 2004, the Council compulsorily acquired Lot 701 for "road purposes" and Lot 702 for "sewerage treatment plant purposes". Edgarange made a claim for compensation under the ALA. The Land Court ordered compensation of $5,992,098 and an appeal against this decision was dismissed by the Land Appeal Court. Both the Land Court and the Land Appeal Court, by majority, applied the Pointe Gourde principle in reverse when assessing the quantum of compensation.
[93]
[65] Whether or not the common law principle referred to as the Pointe Gourde principle or the Pointe Gourde principle in reverse operates when a claim for injurious affection has been made, depends on a close reading of the Acts under which the application for compensation for injurious affection can be made. If compensation for injurious affection because of a planning scheme could be given under those Acts, and then compensation for compulsory acquisition which ignored the effect of the scheme and again compensated the land owner for the value of the land acquired ignoring the effect both of the scheme and the compensation already paid because of the scheme, then the legislation would provide for double compensation, an unattractive and unlikely outcome.[20]
[94]
[66] However, a close reading of the Acts governing compensation for injurious affection shows that such an outcome cannot occur in a case such as the present. Applications for compensation for injurious affection under the LG Act are governed by s 33. Assessment of the compensation payable is governed by sub s 33(13), cl (b) of which provides:
[95]
"Where compensation for injurious affection is claimed under this section the Local Authority may at its option, but with the prior approval of the Governor in Council take the land instead of paying such compensation."
[96]
A similar provision is found in the P&E Act where subs 3.5(9) provides:
[97]
"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 power under the Acquisition of Land Act1967 instead of paying compensation for injurious affection."
[98]
In this case the Governor in Council gave its approval for the acquisition of Lots 701 and 702 on 7 October 2004 and they were acquired by the Council on 8 October 2004.[21]
[99]
[67] Under the IPA, compensation for injurious affection is governed by s 5.4. Sub-section 5.4.4 places limits on the compensation payable. In particular cl 5.4.4(4) provides:
[100]
"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."
[101]
[68] Accordingly it appears that in each of the Queensland statutes under which a claim for injurious affection can be made,[22] such claim must give way to any compensation payable under the ALA.
[102]
[69] Under the LG Act and P&E Act this is because the Council may compulsorily acquire the land when an application for injurious affection is made. Instead of paying compensation for injurious affection, it is then liable to pay compensation under the ALA.
[103]
[70] Under the IPA, if there is compensation payable under the ALA then the claim for compensation is payable under that Act and not the IPA. This is because the "matter for which compensation is payable" under the IPA is part of "the matter for which compensation is payable" under the ALA. The "matter for which compensation" is payable under the IPA is for the loss of value of the land because of the change in the planning scheme i.e. the difference between the market value of the land before the scheme and after the scheme.[23] The "matter for which compensation is payable" under the ALA is for the loss of the value of the land because of its acquisition; that is, the market value of the land before the scheme which preceded its acquisition. It can be seen that the compensation payable under the ALA is greater than, and includes, the compensation that would otherwise be payable for injurious affection. The claim for compensation must then be made under the ALA rather than the IPA. Accordingly no question of double compensation arises.
[104]
[71] The applicant argued that although the common law principle referred to as the Pointe Gourde principle and the Point Gourde principle in reverse remains part of the law with regard to compensation for compulsory acquisition of land, the principle has no application where there is a right to claim compensation for injurious affection and a right to claim compensation for compulsory acquisition. The applicant argued that in such a situation the plain meaning of the words of s 20(2) of the ALA should be applied without regard to the common law principle. Section 20(2) provides:
[105]
"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."
[106]
[72] However, the right to claim compensation for injurious affection is subsumed by the right to claim compensation for compulsory acquisition and so does not survive. As the right to claim compensation for injurious affection has been lost because it has been replaced by the right to claim for the compulsory acquisition, then the common law principle can and should apply. The value of the estate or interest of the claimant on the date on which it was taken is, as it usually is at common law, the value ignoring the increase or decrease in value caused by the scheme which gave rise to the compulsory acquisition. Such value has not been reduced by the payment of compensation for injurious affection or the right to make such a claim.
[107]
[73] The application of the Pointe Gourde principle and the Point Gourde principle in reverse is consistent with the principle that the compensation should be the money equivalent of the loss suffered by the landholder, no more and no less.[24]
[108]
[74] Where a real problem may arise is if the claim for injurious affection has not only been made but has been paid. The applicant then has no further right to claim for injurious affection since the claim has been satisfied. If the land is subsequently compulsorily acquired, the value of the land has already been reduced by the payment of compensation for injurious affection. In such a case the common law rule, which requires the court assessing the compensation to ignore the effect on the value of the land of the scheme underlying the acquisition in order to adequately compensate the landholder, has no application. The value of the land has already been reduced because of the scheme and that reduction in value has already been compensated. The value of the estate or interest of the claimant in the land on the date on which it is taken no longer includes the value of the land prior to the scheme underlying the resumption. The court can and should ignore the effect of the reduction in value of the land caused by any scheme for which compensation has already been paid.
[109]
[75] The Pointe Gourde principle in reverse has no application where, prior to the land being compulsorily acquired, compensation has been paid for the decrease in the value of the land whether or not the decrease in value was because of the scheme underlying the subsequent compulsory acquisition. This is an example of the type of case where the Pointe Gourde principle should not be pressed too far. As Lord Nicholls of Birkenhead observed in Waters v Welsh Development Agency at 931:
[110]
"The principle is soundly based but it should be applied in a manner which achieves a fair and reasonable result. Otherwise the principle would thwart, rather than advance, the intention of Parliament."
[111]
[76] As no compensation for injurious affection had been paid in this case, the Pointe Gourde principle in reverse applied so the amount of compensation was assessed without regard to the diminution in value caused by the scheme underlying the compulsory acquisition.
[112]
[77] This was an important question to be decided, and has never previously been considered at the appellate level. Accordingly, leave to appeal should be granted but the appeal dismissed with costs.
[113]
[1] See Local Government (Planning and Environment) Act 1990 (Qld) (repealed), s 3.5, applicable by way of the transitional provisions of the Integrated Planning Act 1997 (Qld): see s 6.1.27.
[24]Spencer v The Commonwealth (1907) 5 CLR 418 at 432 per Griffith CJ; Nelungaloo Pty Ltd v The Commonwealth[1947] HCA 58; (1948) 75 CLR 495 at 571-572 per Dixon J; Horn v Sunderland Corporation[1941] 2 KB 26 at 42 per Scott LJ; Housing Commission of New South Wales v Falconer[1981] 1 NSWLR 547 at 569; Director of Buildings and Lands v Shun Fung Ironworks Ltd[1995] 2 AC 111 at 125 per Lord Nicholls of Birkenhead.
Parties
Applicant/Plaintiff:
_Redland SC
Respondent/Defendant:
Edgarange P/L_
Legislation Cited (6)
Land Act 1967
Court Act 2000
Practices Act 1974
Government Act 1936
Local Government (Planning and Environment) Act 1990