Sorrento Medical Service P/L v Chief Executive, Dept of Main Roads [2007] QCA 73

SUPREME COURT OF QUEENSLAND

CITATION: Sorrento Medical Service P/L v Chief Executive, Dept of Main Roads [2007] QCA 73

PARTIES: SORRENTO MEDICAL SERVICE PTY LTD ACN 011 026 903 (claimant/applicant/appellant) v CHIEF EXECUTIVE, DEPARTMENT OF MAIN ROADS (respondent)

FILE NO/S: Appeal No 3944 of 2006 / LAC No 487 of 2005

DIVISION: Court of Appeal

PROCEEDING: Miscellaneous Application-Civil / General Civil Appeal

ORIGINATING COURT: Supreme Court of Queensland

DELIVERED ON: 16 March 2007

DELIVERED AT: Brisbane

HEARING DATE: 15 November 2006

JUDGES: McMurdo P, Holmes JA and Chesterman J / Separate reasons for judgment of each member of the Court, McMurdo P and Chesterman J concurring as to the orders made, Holmes JA dissenting

ORDERS: 1. Appeal allowed / 2. The judgment of the Land Appeal Court be set aside / 3. The appeal from the Land Court is allowed / 4. The appellants claim be remitted to the Land Court for determination / 5. Respondents pay the costs of the appeal

CATCHWORDS: REAL PROPERTY - RESUMPTION OF LAND - COMPENSATION - STATUTORY RIGHT TO COMPENSATION - CONSTRUCTION OF STATUTE - PERSONS ENTITLED - LICENCEE - where appellant is granted a licence to use land for car parking space - where part of that land is resumed - whether the licence was an interest of a person entitled to a part of the land – meaning of ‘interest’ whether licensee is entitled to compensation under the Acquisition of Land Act 1967 (Qld) / Acquisition of Land Act 1967 (Qld), s 12(5) / Acts Interpretation Act 1954 (Qld), s 36 / Commonwealth Director of Public Prosecutions v Hart [2005] QCA 51; [2005] 2 Qd R 246, cited / Hornsby Council v Roads and Traffic Authority of New South Wales (1997) 41 NSWLR 151, distinguished / Marshall v Director General Department of Transport [2001] HCA 37; (2001) 205 CLR 603, cited / Rakus v Energy Australia [2004] NSWLEC 657; (2004) 138 LGERA 373, followed / Roads and Traffic Authority of News South Wales v Heawood [2002] NSWCA 99; (2002) 54 NSWLR 289, cited / West v Roads and Traffic Authority of New South Wales (1995) 88 LGERA 266, cited / Yanner v Eaton [1999] HCA 69; (1999) 201 CLR 351, cited

COUNSEL: C J Carrigan, for the appellant / P J Flanagan SC, with D A Quayle, for the respondent

SOLICITORS: Short Punch & Greatorix for the appellant / Crown Law for the respondent

McMURDO P: This is an appeal from the Land Appeal Court¹ refusing an appeal from the decision of the President of the Land Court’s determination² that the Land Court has no jurisdiction to hear and determine the appellant’s claim for compensation under the Acquisition of Land Act 1967 (Qld) (“the Act”). This Court granted leave to appeal³ on 15 November 2006 when the parties fully argued the grounds of appeal.

The facts and competing contentions are set out in Chesterman J’s reasons so that my reasons for allowing the appeal can be quite shortly stated. The issue is whether the appellant is entitled to claim compensation under the Act in respect of land resumed by the respondent over which the appellant had car parking rights for its medical centre. Central to the determination of that issue is the construction of s 12(5) of the Act.

The Act self-evidently deals with the acquisition of land by the State for public purposes and provides for compensation. Part 1 of the Act “PRELIMINARY” contains definitions; Pt 2 deals with “TAKING OF LAND”; Pt 3 with the “DISCONTINUANCE OF TAKING OF LAND”; Pt 4 with “COMPENSATION”; Pt 5, “GENERAL”, with issues such as entry powers, delegation, service of documents, offences, disposal of land and regulation making powers; and Pt 6 with “TRANSITIONAL PROVISIONS”.

Section 12(5) is in Pt 2 of the Act and states:

“(5) On and from the date of the publication of the gazette resumption notice the land thereby taken shall be vested or become unallocated State land as provided by the foregoing provisions of this section absolutely freed and discharged from all trusts, obligations, mortgages, charges, rates, contracts, claims, estates, or interest of what kind soever, or if an easement only is taken, such easement shall be vested in the constructing authority or, where the gazette resumption notice prescribes, in the corporation requiring the easement, and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act and every person whose estate and interest in the land is injuriously affected by the easement shall have a right to claim compensation under this Act.” (my emphasis)

Were the appellant’s car parking rights over the resumed land an “interest of [a] person entitled to the whole or any part of the land”? The Act does not define any of the italicised words other than “land”. It is defined in s 2 of the Act as “land, or any estate or interest in land, that is held in fee simple, but does not include a freeholding lease under the Land Act 1994.”

Section 18 of the Act is headed “By whom compensation may be claimed” and is contained in Pt 4. Section 18(3) provides:

“Compensation shall not be claimable by or payable to a person who is lessee, tenant, or licensee of any land taken if the constructing authority upon written application allows the person’s estate or interest to continue uninterrupted.” (my emphasis)

I note that the phrase “estate and interest in the land” is used towards the end of s 12(5) and the like phrase “estate or interest in the land” is used in other sections of the Act including s 18(4A), s 19 (contained in Pt 4) and s 37(3) (contained in Pt 5). Those phrases are not defined in the Act. I do not find their use in other sections of the Act of assistance in interpreting the italicised phrase in s 12(5).

The Acts Interpretation Act 1954 (Qld) s 36 defines “interest, in relation to land or other property” as:

“(a)a legal or equitable estate in the land or other property; or

(b)a right, power or privilege over, or in relation to, the land or other property.” (my emphasis)

The Acts Interpretation Act s 4 states:

“The application of this Act may be displaced, wholly or partly, by a contrary intention appearing in any Act.”

I agree with Chesterman J that the appellant’s car parking rights arose from a licence which gave the appellant an apparently valuable contractual right over the resumed land. The appellant did not have an “interest in land” as that phrase has been construed at common law and in some statutory contexts: cf Stow v Mineral Holdings (Aust) Pty Ltd⁴ and The Queen v Toohey; Ex parte Meneling Station Pty Ltd.⁵

Those cases did not concern the construction of statutes conferring a right to claim compensation for injurious affection following the compulsory acquisition of land and nor did they concern the construction of a phrase in the terms of the italicised words in s 12(5) of the Act.

In construing those words, this Court must be cognizant of Gaudron J’s observations in Marshall v Director General Department of Transport:⁶

“The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.”

The Land Appeal Court’s conclusion, that “and” in the italicised phrase in s 12(5) of the Act is there used disjunctively, is not in dispute. The appellant need not have to show it had an estate in the resumed land to establish a right to claim compensation under the Act. That is the limit of commonality between the parties. A reading of Chesterman J’s reasons on the one hand and those of Holmes JA, the Land Appeal Court and the President of the Land Court on the other, demonstrate both the opaqueness of the italicised words in s 12(5) and the persuasive but competing arguments for their construction.

Despite the attractions of the contrary argument, ultimately I prefer the construction of the italicised words in s 12(5) put forward by the appellant. Giving the italicised words in s 12(5) their ordinary meaning and adopting the required reluctance before construing the Act as limiting compensation in a way outside its clear terms, it seems to me that “interest” should be given its meaning in s 36 of the Acts Interpretation Act. Although the Act and the Acts Interpretation Act have been frequently amended since coming into operation, the central provisions set out above remain in the same terms as when first enacted.⁷ There is nothing in the Act or in its Second Reading Speech⁸ to suggest that the legislature did not intend the definition of “interest” in s 36 Acts Interpretation Act to apply to the term “interest” when used in the Act generally or in s 12(5) in particular (cf s 4, Acts Interpretation Act). Indeed, other compensation statutes in Australian jurisdictions have specifically adopted a comparable definition: see Land Acquisition (Just Terms Compensation) Act 1991 (NSW) s 4(1); Land Acquisition and Compensation Act 1986 (Vic) s 3(1), Land Acquisition Act 1969 (SA) s 6(1) and Land Acquisition Act 1989 (Cth) s 6. “[I]nterest” in the italicised phrase in s 12(5) is qualified by the words “of every person entitled to the whole or any part of the land” but that provides no particular assistance in construing either “interest” or the complete italicised phrase. The word “entitled” is not defined in the Act or in the Acts Interpretation Act. The verb “entitle” is defined in the Macquarie Dictionary as “1. to give (a person or thing) a title, right, or claim to something; furnish with grounds for laying claim …”. As already noted “land” is defined as including “any … interest in land …” and “interest” in relation to land has its meaning as defined in s 36 Acts Interpretation Act. The appellant had a contractual right to use the resumed land for the parking of its vehicles or the vehicles of its permitted invitees and in respect of some of that resumed land this was an exclusive right.⁹ This was an apparently valuable contractual right in relation to the resumed land, not only from an obvious commercial perspective but also because the local government approval for the conduct of the appellant’s medical practice turned on provision of sufficient off-street car parking spaces and access to them. Giving the words in the italicised phrase in s 12(5) their ordinary meaning, using the definition of “interest” in relation to land in s 36 and construing those statutes so that ambiguities do not limit or qualify a right to claim compensation, I am satisfied that the appellant’s apparently valuable contractual right to use the resumed land for car parking made it “entitled to the whole or part of the resumed land” within s 12(5). The appellant company’s interest in relation to the resumed land was converted under s 12(5) into a right to claim compensation under the Act.

That conclusion is supported by s 18(3) of the Act which plainly envisages that a licensee, who will inevitably hold something less than a common law proprietary interest in the land, is able to claim compensation under the Act. It also seems generally consistent with the approach taken in recent cases construing statutes providing compensation for compulsorily acquired land: see West v Roads & Traffic Authority of New South Wales;¹⁰ Mooliang Pty Ltd v Shoalhaven City Council¹¹ and Rakus v Energy Australia.¹²

My preferred construction turns on the application to the Act of the definition of “interest” in s 36 Acts Interpretation Act. I appreciate that the dangers of construing a like definition too widely were referred to in Hornsby Council v RTA.¹³ The appellant’s apparently valuable contractual car parking rights in relation to the resumed land for which it seeks to claim compensation under the Act are plainly distinguishable from the rights asserted in Hornsby, which were no more than the right of every member of the general public over the land in question.¹⁴ Hornsby does not require that s 12(5) be construed as excluding the appellant’s entitlement to claim compensation for its interest in the land it has lost through the respondent’s resumption of the land.

I propose the following orders:

ORDERS:

The appeal is allowed with costs.

Judgment of the Land Appeal Court is set aside.

Instead, the appeal from the Land Court is allowed and the judgment of the Land Court of 22 June 2005 is set aside.

The appellant’s claim is remitted to the Land Court for determination.

HOLMES JA: I have had the considerable advantage of reading the reasons for judgment of Chesterman J. I agree with his Honour that the rights granted by cll 42 and 43 of the lease to the appellant did not amount to a licence or licences coupled with an interest in land, and should be considered as contractual licences, without more. However, I respectfully disagree with his Honour as to the significance of the words “of every person entitled to the whole or any part of the land”, which follow “interest” in s 12(5) of the Acquisition of Land Act 1967, in determining whether those licences constituted an interest compensable under that section.

Section 12(5), in my view, differentiates between, on the one hand, a very broad group of interests, “all trusts, obligations, mortgages, charges, rates, contracts, claims, estates or interest of what kind soever”, from which the land resumed is taken free, and, on the other hand, those estates and interests which give rise to a right to claim compensation. Of the latter, there are two specified: “the estate and interest of every person entitled to the whole or any part of the land”, which becomes a right to claim compensation; and an “estate and interest in the land” injuriously affected by an easement, giving rise to a right to claim compensation.

There is reason to think, despite the difference in expression, that there is no significant distinction between the interests envisaged as founding compensation claims for resumption and injurious affection respectively; that both concern interests in land. By virtue of the definition of “land” in s 2, the expression “the … interest of every person entitled to the whole or any part of the land” should be read more expansively as “the … interest of every person entitled to the whole or any part of the land or any estate or interest in the land”. It follows that, in order to have the right to claim compensation in respect of resumed land, the claimant must at the least be entitled to an interest of some nature in the land.

Section 18(3) of the Act, it is true, contemplates the possibility of a licensee having a right to compensation, by negating such a right if the claimant’s “estate or interest” is allowed to continue uninterrupted; but the sections which follow, dealing with what is entailed in the making and paying of a compensation claim, reinforce the necessity for any such interest to be an interest in land. Section 19(1) of the Act requires the claimant for compensation to give particulars of his or her “estate or interest in the land taken” and to state whether that “estate or interest in the land taken” is subject to any other interest. Section 20(2) requires the assessment of compensation “according to the value of the estate or interest of the claimant in the land taken on the date when it was taken”.

Accepting, then, that the “interest of every person entitled to the whole or any part of the land” described in s 12(5) is an interest in the land, one finds that the Acquisition of Land Act does not define “interest” or “interest in land”. In this it differs from land acquisition legislation in other jurisdictions. Section 4(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) defines “‘interest’ in land” widely, as including a “right, charge, power or privilege over, or in connection with, the land”. Section 6 of the Lands Acquisition Act 1989 (Cth), s 3(1) of the Land Acquisition and Compensation Act 1986 (Vic) and s 6(1) of the Land Acquisition Act 1969 (SA) define the term similarly. But the fact that other jurisdictions have seen fit to adopt an expanded notion of an interest in land does not assist as to the wording in s 12(5). Nor, because of the wide definition in the Land Acquisition (Just Terms Compensation) Act 1991 (NSW), are the New South Wales authorities¹⁵ cited by the appellant illuminating. The words “entitled to the whole or any part of the land”, so far as I am able to discover, do not appear in the equivalent pieces of legislation in other states. They cannot be ignored, and they suggest an interest at a proprietary level in the land, not merely an interest which has some connection with the land.

The appellant submitted that the second limb of the definition of “interest” in s 36 of the Acts Interpretation Act 1954, which resembles the definitions in the Acts from other jurisdictions referred to above, ought to be adopted. But it seems to me that it cannot be readily inserted into s 12(5) where the word “interest” appears, because it encompasses interests in relation to land. For the reasons already given, the Acquisition of Land Act is concerned with a narrower concept, of interests in land*.*

But the common law does provide some guidance. In Stow & Ors v Mineral Holdings (Australia) Pty Ltd,¹⁶ Aickin J considered the ordinary meaning of the expression “estate or interest in land”, which was, he considered –

“an estate or interest of a proprietary nature in the land. This would include legal and equitable estates and interests, e.g., a freehold or a leasehold estate, or incorporeal interest such as easements, profits à prendre, all such interests being held by persons in their individual capacity.”

That interpretation of the expression was adopted by the High Court in The Queen v Toohey; Ex parte Meneling Station Pty Ltd.¹⁷ The Court rejected the contention that a grazing licence constituted an estate or interest in land. Relevant in the present context is the observation of Mason J that

“No one who has a merely personal right in relation to land can be said to have an ‘estate or interest’ in that land”.¹⁸

Wilson J discussed the nature of a licence:

“A mere licence is clearly distinguishable from a profit à prendre. ‘A dispensation or licence properly passeth no interest, nor alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful’: Thomas v Sorrell.¹⁹ It is a personal privilege conferring no interest in the land. It is not transferable, nor can it be granted in perpetuity. It is generally revocable and merely excuses a trespass until it is revoked: Halsbury, vol 14, par 252”.

What the applicants had in the present case were personal rights. Those rights constituted property, and they existed in relation to the land, but they were not proprietary rights in the land. I agree with the conclusion of the Land Appeal Court that the applicant failed to establish a right of a proprietary nature and had no valid claim to compensation under the Acquisition of Land Act. I would dismiss the appeal with costs.

CHESTERMAN J: The appellant challenges the judgment of the Land Appeal Court given on 31 March 2006 pursuant to leave granted by this Court on 15 November 2006.

In February 1980 Malchada Pty Ltd (‘Malchada’) became the registered proprietor of Lot 49 on RP 118683 being land located on the corner of Allawah Street and Bundall Road, Sorrento on the Gold Coast. The land had an area of 733 m². A month later the Gold Coast City Council gave its approval for the conduct of a medical practice on the land. Later, on 26 January 1982, the Council gave its approval for the land to be used as a ‘24 hour medical centre’. One of the conditions of the approval was:

“Provision of at least ten off-street parking spaces and access thereto to be constructed in accordance with … the town planning scheme … the two car spaces with access to Bundall Road are to be used only for long-term medical practitioner parking.”

Dr David Chan is the principal of both the appellant and Malchada. He conducted his medical practice from the land until 1990 when the appellant was incorporated to conduct the practice and, no doubt, to employ Dr Chan. At about the same time Malchada leased part of the land to the appellant. On the expiration of that lease another was executed in 1994 which, with options, allowed the appellant to occupy the demised land until 30 June 2003.

The lease from Malchada to the appellant was of ‘part of the ground floor of the building erected on [Lot 49 RP 118683] as hatched in red on the attached sketch.’ Obviously enough the demised premises do not include the car parking space which is adjacent to, but separate from, the building erected on Lot 49.

Clauses 42 and 43 of the conditions of the lease state:

“42The lessor grants to the lessee exclusive rights to use the area marked as ‘doctor parking’ on the plan annexed hereto for parking of the vehicles of the lessee or its permitted invitees.

The lessor grants to the lessee in common with the lessee and its invitees of the area marked ‘D’ on the said plan the right to permit its patients and the patients of any person associated with the lessee the right to park its his her or their vehicles upon the land marked ‘patient parking’.”

On 13 October 2000 the respondent, by proclamation published in the Queensland Government Gazette, resumed an area of 167 m² from part of the land for the purpose of widening Bundall Road.

The resumption did not affect the building from which the appellant conducts the medical practice but it did take part of the car park so that now there is only space for five cars. The two spaces reserved for “long-term medical practitioner parking” disappeared.

Both Malchada and the appellant made claims for compensation against the respondent pursuant to the Acquisition of Land Act 1967 (‘the Act’). The claim by Malchada was resolved by agreement. The appellant’s claim for compensation was dismissed by the Land Court on 22 June 2005. An appeal to the Land Appeal Court was disallowed on 31 March 2006.

The appellant’s claim for compensation failed because the courts below held that a right to compensation only exists where a resumption had taken some proprietary interest of the claimant in the land. The appellant had lost no such interest to the resumption. In the Land Court, and the Land Appeal Court, the appellant argued that cll. 42 and 43 gave it a lease of the car park area but that contention was rejected and was abandoned in the appeal to this Court. The appellant did submit that it had a proprietary interest in the land, that being a ‘licence coupled with an interest’ but the appellant’s counsel never satisfactorily articulated what the interest was to which the licence was incidental and this, too, can be ignored.

What the appellant had, pursuant to cll. to 42 and 43, was a licence to occupy the land designated on the plan as car parking lots. The licence was conferred by contract and was granted for a valuable consideration, the entry into the lease. Other things being equal, the conferral of the licence contained an implied negative promise by Malchada not to revoke it during the term of the contract, and that implied term could be enforced by injunction. See Doherty v Allman (1878) 3 App Cas 709; Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173; Verrall v Great Yarmouth Borough Council [1980] 1 All ER 839.

In Yanner v Eaton (1999) 201 CLR 351, the High Court had to consider the word “property” in the context of the Fauna Conservation Act 1974 (Qld), which provided that all fauna “is the property of the Crown”. Gleeson CJ, Gaudron, Kirby and Hayne JJ said (at 365-366):

“The word ‘property’ is often used to refer to something that belongs to another. But in the Fauna Act, as elsewhere in the law, ‘property’ does not refer to a thing; it is a description of a legal relationship with a thing. It refers to a degree of power that is recognised in law as power permissibly exercised over the thing.” (footnotes omitted)

In Director of Public Prosecutions (Cth) v Hart (No. 2) [2005] 2 Qd. R. 246, McPherson JA said of that case (at 257):

“The word ‘property’ is plainly capable of meaning either or both of the thing owned or ownership of the thing; as when one says of something that ‘that property is my property’ … In that context, ‘property’ referred to ownership, and not to the wild animal itself which was … claimed by the Crown … to be, the subject of its ownership.”

The licence granted to the appellant pursuant to the conditions of lease was, obviously, a contractual right which could, as I have mentioned, have been enforced by injunction and for breach of which the appellant could have recovered damages. This contractual right was a right of property, though it was personal, and not real property. It was a right which had value and which could have been assigned, though perhaps only with the consent of Malchada.

Section 12(5) of the Act provides:

“On and from the date of the publication of the … resumption notice the land thereby taken shall be vested … as provided by the foregoing provisions … absolutely freed and discharged from all trusts, obligations, mortgages, charges, rates, contracts, claims, estates, or interest of what kind soever, … in the constructing authority … and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act …”

Section 2 of the Act contains a number of definitions. “Land” is defined to mean:

“… land, or any estate or interest in land, that is held in fee simple, but does not include a freeholding lease under the Land Act 1994.”

Section 36 of the Acts Interpretation Act 1954 (Qld) sets out the ‘[m]eaning of commonly used words and expressions’. One of those meanings is:

“interest, in relation to land … means –

a legal or equitable estate in the land …; or

a right, power or privilege over, or in relation to, the land …”

Section 32A of the Acts Interpretation Act provides that definitions in or applicable to an Act apply except so far as a context or subject matter otherwise indicates or requires.

The question which is raised by the appeal is whether the appellant’s contractual right, a right of personal property, was an “interest of [a] person entitled to … any part of the land” which was resumed. It is not, of course, an interest in the land but if it is a right, power or privilege over or in relation to the land; and if that extended definition of interest is the applicable one for the purposes of s 12(5) of the Act, then the appellant will have made out its claim for compensation.

The Land Appeal Court dealt with the matter in this way. The court identified “the central issue” as being whether, “at the date of resumption, the appellant held an ‘estate and interest’ in the resumed land, within the meaning of s 12(5) of the Act.” The court then set out the definitions of land which appear in the Act and the Acts Interpretation Act. It doubted the appellant’s contention that the wider definition of “interest” appearing in the Acts Interpretation Act should be imported into s 12(5). Having reviewed a number of cases which it will be necessary to mention shortly, the court said:

“[34]The definition of ‘interest’ in s 36 … is extremely wide and cannot … be applied literally. We do not consider that the legislature can have intended that every person who has a contractual right over or in relation to land has a right to claim compensation under the … Act should the land be resumed. As Mason P said in Hornsby, a literal interpretation produces absurdity. We consider, therefore … that some limitation should be placed on the use of the words ‘right, power or privilege’ in para (b) of the definition … in s 36 … at least for the purpose of construing the word ‘interest’ in s 12(5) of the Act.

[35]How should that limitation be framed? In West, Mooliang and Rakus it was held that contractual licences were compensable because they created rights to occupy and privileges over the land. We consider that a mere right to occupy land and its concomitant privileges, with nothing more, is a contractual licence. In our view, the absurdity that would flow from a literal interpretation of paragraph (b) … is not avoided by the approaches of the Courts in West, Mooliang and Rakus. We prefer the reasoning of the … Court of Appeal in Hornsby that is, that the right, power and privilege … should be limited to rights, powers and privileges of a proprietary or quasi-proprietary nature.”

The court then considered the phrase “estate and interest of every person entitled to the whole or any part of the land” which appears in the subsection. It noted that the definitions in the Acts Interpretation Act are to be construed in the context of the Act itself and that “the significance of context in statutory interpretation was emphasised by Mason P in Hornsby.” The court went on:

“The context in which the words ‘estate and interest’ are used in s 12(5) suggests that they refer to rights of a proprietary nature … While a person who has a contractual right, power or privilege over or in relation to land may be regarded as having an interest in relation to land, if a literal interpretation of the definition of ‘interest’ in the Acts Interpretation Act were adopted, such a person is not ‘entitled to the whole or any part of the land’. We have … concluded that the phrase ‘estate and interest’ … refers to rights of a proprietary or quasi-proprietary nature.”

The court did not “consider that it has been established that the appellant’s rights to the car parks are rights of such a nature” and ruled that the appellant had no valid claim to compensation.

Two points should be made at once. The first is that the court did not explain why it is absurd not to recognise the appellant’s claim to compensation. It had a valid contractual right to use the land which was resumed. It had provided valuable consideration for that right. It was deprived of the enjoyment of its right by the resumption. There was nothing fanciful or illusory about the appellant’s right. It was documented in a lease registered pursuant to the provisions of the Land Title Act. Its existence was available to anyone who cared to search the register as, no doubt, the respondent did before moving to issue notices of resumption.

The second comment is that the appellant’s right was of a proprietary nature. Its contractual right was a right of property. That property was destroyed by the resumption. It was not a right of real property, or an interest in land, but it was nevertheless a right of a proprietary nature. The question is whether the appellant’s contractual right was a right over or in relation to the resumed land and whether the statutory context provided by s 12(5) precludes the application of the extended definition of interest which appears in the Acts Interpretation Act.

The second point is the critical one and it is convenient to take it first. The approach to the construction of such provisions as s 12(5) was explained by Gaudron J in Marshall v Director General, Department of Transport (2001) 205 CLR 603 at 623:

“It is a basic rule of statutory construction that legislative provisions are to be construed according to their natural and ordinary meaning unless that would lead to a result that the legislature must be taken not to have intended. The rule serves the important purpose of ensuring that those who are subject to the law understand the nature and extent of their rights and obligations …

Although the rule that legislative provisions are to be construed according to their natural and ordinary meaning is a rule of general application, it is particularly important that it be given its full effect when, to do otherwise, would limit or impair individual rights, particularly property rights. The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.”

The same point was made by Heydon JA (with whom Handley JA and McClellan J agreed) in Roads and Traffic Authority of New South Wales v Heawood (2002) 54 NSWLR 289. His Honour said (at 296-297):

“The natural and ordinary meaning of ‘loss of access’ extends beyond total loss. If a different meaning … were to be selected, there would be a limitation on or impairment of the proprietary rights of persons in the position of the respondents … the right to compensation for impact on access is, depending on its scope, an important right, and hence s 32(2) should be construed with all the generality its words permit, and not by inserting limitations or qualifications by reference to the adjective “total” which is not to be found in s 32(2).”

The section in question in that case was found in the Roads Act 1993 (NSW) which obliged a road authority to pay compensation to the owner of land who suffered a loss of access because of work undertaken by the road authority.

With this interpretative precept in mind one turns to consider the context provided by s 12(5) to see why it should preclude the wider definition of interest found in the Acts Interpretation Act. The Land Appeal Court identified nothing other than that the words “estate and interest” should be held to refer to “rights of a proprietary nature” and that “absurd” results would follow from giving “interest” its wider definition. As I have mentioned, the court did not appear to notice that the rights in question were “of a proprietary nature”. The court appears to have assumed rather than to have reasoned that the phrase ‘estate and interest’ meant an interest in land. That court did not identify why a right over or in relation to land could not be an interest in land save for the assertion that the interest had to be “proprietary”, which begs the question.

The critical phrase to construe is “the estate and interest of every person entitled to the whole or any part of the land”. The conjunctive “and” is clearly misplaced. There can be no doubt that the estate or interest of any person entitled to the whole or any part of resumed land is converted into a right to claim compensation. The question is whether the phrase provides a statutory context making the extended definition of “interest” inapplicable. It can only do so if one reads that part of the phrase “entitled to the whole or any part of the land” as meaning that the interest must be “in” the land because it must be an interest of a person entitled to the whole or any part of the land. To adopt this reasoning is to assume what is to be ascertained. The word “entitled” is quite general. It does not necessarily mean entitled to an interest in land.

The definition of land which appears in s 2 of the Act takes on importance for the respondent’s argument. Significance is attached to the words “interest in land”. It should be understood however that the purpose of that particular definition is to identify land the resumption of which will give rise to a right to claim compensation. Such land is land, or an interest in it, which is held by someone in fee simple. The purpose of the definition is to restrict the right to claim compensation under the Act to the loss of freehold land. The right to compensation for the resumption of Crown leaseholds is dealt with by ch. 5 pt 3 of the Land Act 1994.

It is, in my opinion, significant that s 2 contains no definition of “interest” in land. It is not to be thought that the draftsman of the Act was unaware of the provisions of s 36 of the Acts Interpretation Act. There is nothing in s 2 which indicates that interest when used in the definition of “land” does not mean interest as defined by the Acts Interpretation Act.

Section 12(5) of the Act does not speak of an “interest in land”. It speaks of an “interest of every person entitled to the whole or any part of the land” resumed. The particular question for the appeal is whether “interest of every person entitled to … any part of the land” is a statutory context which precludes the extended definition of interest. “Land” means, by virtue of the definition contained in s 2, an “interest” in land. If it is right, as I think it is, to give interest in that section the wider meaning conferred by the Acts Interpretation Act, then every person entitled to an interest, so defined, i.e. a right over or in relation to the land, is entitled to claim compensation upon its resumption. On this view of the subsection there is, obviously, no inconsistency or statutory indication that the extended definition of “interest” should not apply

It must be said that the subsection is not entirely clear. In particular the meaning of the phrase “interest of every person entitled to the whole or any part of the land” is obscure. I think it means only that the person entitled to the interest (whatever it be) has a right to claim compensation. This leaves unanswered the question, what is meant by “interest”? A definition is provided by s 36 of the Acts Interpretation Act and, if the phrase means what I have just indicated, it does not preclude the application of that definition.

If the phrase “the interest of every person entitled to the whole or any part of the land” does not have the meaning I have ascribed to it, what does it mean? The reference to “part of the land” is puzzling. The definition of land contained in s 2 of the Act makes it clear that an interest in freehold land less than the fee simple is converted into a right to compensation if the interest is lost by resumption. So “part of the land” cannot mean an interest less than the fee simple for that would make the phrase redundant. Nor can it mean an aliquot part of a parcel of land, the whole of which is resumed, for that would limit the right to compensation to those who held possessory interests or estates. It would exclude from the right to claim compensation reversioners, remaindermen, and the holders of incorporeal interests, easements and profits à prendre.

The respondent would construe the phrase as if it read “the interest (in land) of every person entitled to the … land (or an interest in the land) is converted to a right to claim compensation”. This is a possible construction but there is nothing in the phrase, or the balance of s 12(5), which indicates that that is the true meaning.

The truth is that the statutory context provided by the subsection is neutral. When the word “interest” is used it could as easily mean “interest in land” or “interest” as defined by the Acts Interpretation Act.

One should not lose sight of the obvious point that one is construing a subsection which confers a right to compensation upon the loss of land taken for the public benefit. One should not search for meanings which are not readily apparent, nor be assiduous to find a statutory context which would exclude the wider definition of interest and so restrict the right to compensation. One should approach the construction of the provision in the manner described by Gaudron J and Heydon JA, and one should not rely upon words of nebulous meaning to provide a statutory context inconsistent with the application of the Acts Interpretation Act.

The reasons given by the Land Appeal Court to conclude that an entitlement to an interest in land did not include rights “in relation to land” are unsatisfactory. It is only if one approaches the phrase, “interest of every person entitled to … any part of the land”, with the presupposition that the interest must be in land that one arrives at a context which is inconsistent with the extended definition. But that is to assume the construction rather than analyse the section with a view to establishing what it means.

Another provision of the Act should be noted. Section 18 sets out the persons “by whom compensation may be claimed”. Subsection (3) provides:

“Compensation shall not be claimable by or payable to a person who is lessee, tenant or licensee of any land taken if the constructing authority upon written application allows the person’s estate or interest to continue uninterrupted.”

The clear implication from the subsection is that the Act recognises that for its purposes a licensee of land has an estate or interest in it. The implication assists the appellant. The respondent submits that “licensee” should be read down to refer only to those licensees who have an interest in land with which the licence is coupled.

The Land Appeal Court did not “consider” that s 18(3) assisted the appellant because it had concluded that the words “estate and interest” where they appear in s 12(5) meant an estate or interest in land and that the extended definition of interest found in the Acts Interpretation Act did not apply.

In my opinion the proper approach is to consider whether s 18(3) assisted in the construction of s 12(5) rather than to ascribe a meaning to that section and then ignore s 18(3) because it was inconsistent with the ascribed construction.

That subsection is only a small indication of statutory intention but within its limits it supports the appellant and suggests that, for the purposes of the Act, a licensee has an interest in land. It will have such an interest if “interest” is given its extended definition.

It may be that to apply the full width of the definition of “interest” found in the Acts Interpretation Act might, in some cases, produce claims for compensation that might properly attract the epithet “absurd”, but the present is not of that kind. One has here a right of property clearly identified, the limits of which are specified and which had a value. The proprietor is identified and the existence of the licence was proved in a document available for public search. In my opinion it is a matter of plain justice, not absurdity, that the proprietor should be compensated when his property is destroyed, for the good of the wider public.

The Land Appeal Court was influenced by the decision of the (NSW) Court of Appeal in Hornsby Council v Roads and Traffic Authority of New South Wales (1997) 41 NSWLR 151. The authority resumed part of a park which was Crown land. Sections of the Local Government Act (NSW) conferred the “care, management and control” of the land upon the Hornsby Council. Mason P expressed the opinion that the sections imposed a responsibility on the local authority akin to a “public trust” which was not an “interest” in the land.

By s 37 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) “an owner of an interest in land” is entitled to compensation upon its resumption. ‘Interest in land’ was defined to mean:

“(a) a legal or equitable estate or interest in the land; or

“(b) an easement, right, charge, power or privilege over, or in connection with, the land.”

It will be appreciated that this definition is very similar to that found in the Acts Interpretation Act. The difference, of course, is that that definition only applies to the extent that it is not inconsistent with a specific statutory enactment or context. The Just Terms Act definition is made applicable by the Act itself.

Mason P said (at 152):

“It is true that the definition of ‘interest’ is liberal, especially in its second part. But, as Meagher JA demonstrates, a literal interpretation produces absurdity, and the words cannot be construed out of context.”

Meagher JA said in a passage much-quoted though not with universal acclaim (at 155):

“The sole, rather glancing, connection between the appellant and the land was that the Council had the ‘care, management and control’ of the land … Can such a right be the sort of ‘right’ which is referred to in limb (b) of the definition of ‘interest’? … In a sense every member of the public has a ‘right’ over the land in question: he can go on it and have a picnic. But it was hardly intended that he could claim compensation on a resumption. If it were, the machinery of notifying holders of ‘interests’ would extend to infinity. Some limitation must be placed on the words. Whilst the rights which fall within par (b) must be wider than the rights which fall within par (a), I feel that they must be limited to jura in re aliena, proprietary or quasi-proprietary rights less than a full-fledged estate, that is, easements, charges, profits à prendre, profits à rendre, licences coupled with interests, etc.”

His Honour’s remarks must be understood in their context: a claim by a local authority for compensation for the resumption of Crown land which it was charged to manage and control and with respect to which it had no proprietary interest. They are not a substitute for the terms of s 12(5) of the Act. Moreover, as I have pointed out, his Honour’s insistence that the rights the loss of which will give rise to a claim for compensation must be proprietary, is met in this case. Nor do I think his Honour’s rather disparaging reference to picnickers was necessary. The reason why such persons could not claim compensation was that they would have lost nothing by the resumption which could have been valued in money. But suppose a man contracted for the right to take his family and friends on to some farm land of some rare arcadian charm. Suppose he paid a substantial sum, in advance, for the right. Suppose the land was resumed the next day. Is it right to call “absurd” a claim for compensation upon the destruction of the property over which he exercised a right for which he had paid?

In a case the facts of which have no present relevance, Minister for Education and Training v Tanner (2003) 128 LGERA 281 the (NSW) Court of Appeal said (284):

“What Meagher JA said in Hornsby was apt to resolve the issue posed in that case, but of course his Honour’s words ought not to be treated as a substitute for or a restatement of the words of the legislation, and they need to be read in their context. It may be that on some future occasion it will seem appropriate to refine those words, if they are to be used for guidance in the resolution of other cases, but that is not necessary or appropriate now.”

The statements in Hornsby went further than the facts of the case required. Although the President spoke of absurd results should the wider definition of interest be employed, no example was given, apart from that of the picnickers, of such an absurd result. The Land Appeal Court was attracted by the proposition. Indeed it seemed to be the reason why that court concluded that interest could not have its wider meaning. That court though did not provide any examples of absurdity which might result from the application of the wider definition.

The extended definition would allow those who had a right over or in relation to land to claim compensation upon its resumption. But the right must be one which has a value: it must be a right of property. There is no reason to disagree with Meagher JA on that point. That requirement excludes the picnickers who go on public land from the class of those who may claim compensation if the land is resumed. But I hope I have made it clear that I do not regard it as absurd to read the Act as conferring a right to claim compensation on those who have lost a valuable right of personal property by reason of the resumption of land.

If interest in s 12(5) is to be given its wider meaning, as I think it should, the question then becomes whether the appellant’s contractual licence was a “right, power or privilege over or in relation to … land …”. The Land Appeal Court thought it was a right in relation to land and I would agree. It is probably also a right or a power or privilege over land.

A similar right was thought to be a right “in connection with” land by Talbot J (Land and Environment Court of NSW) in West v Roads and Traffic Authority of New South Wales (1995) 88 LGERA 266. The applicant company occupied the ground floor of a house which was the dwelling of Mr and Mrs West and their family who were shareholders in the company. The arrangement by which it occupied the ground floor and conducted its business gave it “a mere contractual licence … not capable of creating a legal or equitable estate or interest in the land” but its contractual right was a right in connection with the land so that para (b) of the definition of land in the Just Terms Act was satisfied. See at p 274.

Two other decisions of the Land and Environment Court are of assistance. In both, a tenancy at will which gave applicants for compensation rights of occupation on the land resumed but no estate in it, a “privilege in connection with land” sufficient to satisfy para (b) of the definition in the Just Terms Act. The cases are Mooliang Pty Ltd v Shoalhaven City Council (2001) 114 LGERA 45 and Rakus v Energy Australia (2004) 138 LGERA 373.

A tenancy at will confers no estate or interest in the land. It is merely a personal right or relationship between owner and occupier by which the latter may remain in possession during the will of the former. See Megarry’s Manual of the Law of Real Property (8th ed) p 349; Wheeler v Mercer [1957] AC 416 at 427 per Viscount Simonds and 428 per Lord Morton; Chelsea Investments Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 1 at 6-7; Arnold v Mann (1957) 99 CLR 462 at 466. These latter cases concern the position of a tenant at will in premises controlled by Rent Restrictions Acts which conferred particular protection on tenants, but the remarks appear equally apposite to tenants at will under the general law.

In Rakus Lloyd J (at 379) quoted from the judgements of Mason P and Meagher JA, in Hornsby which I also have quoted, and went on:

“These passages demonstrate that the definition may be limited to remove any absurdity that would result from a literal interpretation. That case, however, differs significantly from the facts in these proceedings. Hornsby involved the public’s purported interest in a reserve … clearly, the definition of para (b) would be absurd if it entitled the public at large to assert an interest in, and claim compensation for the acquisition of, a public reserve. The limitation imposed by Meagher JA removed that absurdity in the specific circumstances of that case. That limitation, however, need not be applied to other factual circumstances where such absurdity would not result. Rather, the statutory definition must first be considered according to the ordinary meaning of the words. Only if an absurdity then arises in its application, should a limitation be placed upon the definition.”

I respectfully agree with this suggested approach to the legislation.

I conclude that the appellant had a right or power over or in relation to the land taken by the respondent. In my opinion such a right or power is an interest in the resumed land for the purposes of s 12(5). That is so because the definition of “interest” found in the Acts Interpretation Act is the applicable one, the statutory context and subject matter not indicating or requiring otherwise.

Accordingly the Land Appeal Court should have allowed the appeal to it from the Land Court and remitted the appellant’s claim for compensation to that court for determination. The appeal should be allowed; the judgment of the Land Appeal Court should be set aside; and instead it should be ordered that the appeal from the Land Court be allowed and the appellant’s claim be remitted to the Land Court for determination. The respondent should pay the costs of the appeal.

Footnotes

1. Sorrento Medical Service Pty Ltd v Department of Main Roads [2006] QLAC 0016 ↩

2. Sorrento Medical Service Pty Ltd v Department of Main Roads [2005] QLC 0033 ↩

3. see s 74(2) and s 75 Land Court Act 2000 (Qld) ↩

4. (1977) 180 CLR 295 ↩

5. (1982) 158 CLR 327, 342 ↩

6. (2001) 205 CLR 603, 623 ↩

7. The Act, s 2 (“land”), s 12(5), s 18(3); Acts Interpretation Act, s 4 and s 36 (“interest”) ↩

8. Queensland Parliamentary Debates, Vol 248, 1967-68, 2296-2300 ↩

9. See cl 42 of the appellant’s lease from Malchada Pty Ltd (the registered proprietor of the resumed land) ↩

10. (1995) 88 LGERA 266 ↩

11. (2001) 114 LGERA 45 ↩

12. (2004) 138 LGERA 373 ↩

13. (1997) 41 NSWLR 151, Mason P,152-153; Meagher JA, 155 ↩