Springfield Land Corporation (No 2) Pty Ltd v Queensland

Springfield Land Corporation (No 2) Pty Ltd v Queensland - [2011] HCA 15 - HCA 2011 case summary — Zoe

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FRENCH CJ, GUMMOW, HAYNE AND CRENNAN JJ. This is an appeal from the decision of the Court of Appeal of the Supreme Court of Queensland (Keane and Fraser JJA and Atkinson J)[1], which affirmed that of the primary judge (McMurdo J)[2]. The appeal turns upon the construction of Queensland legislation respecting resumption of land by the State for statutory purposes and the assessment of compensation. The litigation was instituted in the Supreme Court after an award made under an arbitration agreement between the relevant parties in which they had agreed that the issues between them should be determined by the arbitrator as if the ordinary statutory processes had applied.
Section 38 of the Commercial Arbitration Act 1990 (Q) ("the Arbitration Act") provides for an "appeal" to the Supreme Court "on any question of law" which arises out of an award, with the consent of all parties to the arbitration agreement, or with the leave of the Supreme Court where it considers there is "a manifest error of law on the face of the award". McMurdo J granted leave and varied an award made on 9 October 2008 by the arbitrator (the Hon WJ Carter QC) by substituting "nil" in place of the award of $1,468,806 in favour of the present appellants ("the Springfield companies")[3]. The award had been made against the State of Queensland "acting through" the Chief Executive of the Department of Main Roads. The reasons for this description of the State party will be explained below.
The appeal by the Springfield companies to the Court of Appeal having been dismissed, in this Court the Springfield companies seek, in effect, the reinstatement of the award by the arbitrator. For the reasons which follow, the appeal to this Court should be dismissed.
McMurdo J referred[4] to the development since about 1992 by the Springfield companies from a greenfield site of a large residential development 24 kilometres to the southwest of the Central Business District of Brisbane and in the local government area of Ipswich City Council. The site contains 2,851 hectares and the development is expected to house at least 60,000 people.
McMurdo J added[5]:

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The litigation concerns the award of compensation made by the arbitrator with respect to the Transfer Land. The events leading up to the award began with the taking of steps under s 7 of the Acquisition of Land Act 1967 (Q) ("the Acquisition Act") in conjunction with s 25 of the Transport Planning and Coordination Act 1994 (Q) ("the Planning Act"). Section 25 empowered the Chief Executive of the Department of Main Roads, acting "for the State", to acquire or otherwise deal with property "for the purposes of transport", including "the facilitation of transport infrastructure" (s 25(3)(a)), and classified the Chief Executive as a "constructing authority" within the meaning of the Acquisition Act (s 25(8)). In this Court, the State of Queensland and the Chief Executive are joined as separate parties, the first and second respondents.
Section 7 of the Acquisition Act, when read as so required by the Planning Act, provided for the Chief Executive to serve notices of intention to resume the Transfer Land and required that the notices "specify the particular purpose" for which the Transfer Land was required. By notices dated 13 October 2005 and 12 January 2006 ("the s 7 Notices"), the Chief Executive stated the intention to take the Transfer Land "for future transport purposes including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South-West Transport Corridor" (emphasis added). The terms of the s 7 Notices as to purpose thus reflected the terms of the power of acquisition conferred by s 25 of the Planning Act.
The statutory processes under the Acquisition Act following the giving of the s 7 Notices would have included the consideration by the Chief Executive of any objections to the taking of the land (s 8), the declaration by the Governor in Council (by gazette notice) that the Transfer Land was taken "for the purpose mentioned in the [s 7 Notices]" (s 9(7)), and the vesting of the Transfer Land in the Chief Executive (s 12). The publication of the gazette resumption notice, in the absence of rebuttal, would be conclusive evidence that the notice requirements of s 7 had been complied with (s 12(6)(b)). In any event, no attack has been made upon the validity of the s 7 Notices. There is no suggestion that there was any abuse of power in the issue of the s 7 Notices.
However, events took a different course. By written agreement made 21 April 2006 between the State "acting through the Chief Executive of the Department of Main Roads" and the Springfield companies and styled "Springfield Acquisition Agreement" ("the Agreement"), the parties agreed (cll 3.6, 3.7) that processes under the legislation for the resumption of the Transfer Land would be discontinued. This discontinuance was permitted by Pt 3 (ss 16‑17) of the Acquisition Act. The agreed discontinuance of procedures under the statute for resumption was in exchange for (i) the transfer of the Transfer Land for amalgamation with land already held by the Department of Main Roads (cl 3.4), and (ii) payment of compensation for the Transfer Land, in accordance with the requirements of Pt 4 (ss 18‑35) of the Acquisition Act, "as if" the Transfer Land had been taken under that statute on 26 September 2006 (cl 6.2(b)). In the absence of agreement, the issue of the compensation payable was to be submitted to arbitration (cll 6.2(c), 6.3). Had the statutory procedures remained in play, s 24 of the Acquisition Act would have provided for the hearing and determination by the Land Court of Queensland of the matter of the amount of compensation.
The Springfield companies emphasised in submissions to this Court that by the time of the Agreement large parts of the Springfield land had been developed and sold. However, the South West Transport Corridor identified the preferred route of proposed construction from Springfield to Ripley and the Cunningham Highway. The arbitrator accepted expert evidence that the Springfield Town Centre, together with other land for proposed commercial development and undeveloped residential areas still held by the Springfield companies, would derive, from the acquisition of the Transfer Land for the purpose of development of the South West Transport Corridor, enhancement in value clearly exceeding the value of the Transfer Land. However, the arbitrator went on to accept the submission by the Springfield companies that, on its proper construction, s 20 of the Acquisition Act confined the relevant enhancement so as to exclude consideration of the enhanced value of these other Springfield lands.
Section 20 of the Acquisition Act thus is the provision of central importance. The heading states "Assessment of compensation", and the section at the relevant time read:

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The relevant "purpose" is that for which the Transfer Land would have been taken had the statutory processes set in train by the s 7 Notices not been supplanted by the Agreement. These were future transport purposes including the facilitation of transport infrastructure, being road and busway, rail or light rail for the South West Transport Corridor. This was the statutory purpose and the determinative purpose.
Contrary to the construction given to s 20(3) by the arbitrator, which the Springfield companies support, the "purpose" was not identified by some factual inquiry, beyond the terms of the s 7 Notices, into the reason why the s 7 Notices were given in the then current state of planning for the road corridor.
In written submissions filed, by leave, after the conclusion of oral argument, the respondents emphasised the importance of other terms of the Agreement in addition to the requirement imposed by cl 6.2(a) that compensation be assessed "as if" the Transfer Land had been compulsorily acquired. Recital B of the Agreement stated that the Transfer Land was required for the South West Transport Corridor and that "Main Roads intends to construct an extension to the Centenary Highway within the South West Transport Corridor".
Reference has been made to the arrangements for certain land to be held on trust in favour of the Springfield companies for future road purposes. This included Trust Lot 7. Clause 11.1 required the parties to take all steps necessary to amend these trust instruments to reflect "the Purpose", defined in cl 1.1 in familiar terms as meaning "future transport purposes, including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South West Transport Corridor". That term in turn was defined in cl 1.1 as meaning "the preferred route for a road and public transport corridor linking the Centenary Highway to Ripley and the Cunningham Highway at Yamanto, as shown [in the plan] at Annexure D". The further terms of the Agreement thus emphasise the incorporation of the statutory description of "purpose" which is picked up by cl 6.2(b) for the assessment of compensation in respect of the Transfer Land.
The appeal should be dismissed with costs.
HEYDON J. Section 20(3) of the Acquisition of Land Act 1967 (Q) ("the Act") provided:

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The appellants own land in the south-eastern part of Queensland. In the 1990s it was contemplated that a "South-West Transport Corridor" adjoining the appellants' land would be created. Many steps were taken pursuant to that contemplation. The appellants' land was 2851 hectares in area and was to be the site of a master planned community being developed by the appellants. The question is whether the resumption of small areas of the appellants' land in 2005‑2006 created any enhancement of the value of the rest of its land which should be taken into account by way of set off against or abatement of the compensation to be paid for the land resumed in 2005-2006. Underlying the question is a further question whether any enhancement in value as a matter of fact happened much earlier than 2005-2006 and had nothing to do with the small resumptions in 2005-2006.
The primary question was seen by the parties as being the ascertainment of the "purpose for which the land [was] taken" within the meaning of s 20(3). The respondent State of Queensland in its further amended points of defence enunciated the position which it maintains in this appeal, namely that the land resumed in 2005-2006 "was acquired for future transport purposes, including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South-West Transport Corridor".
The arbitrator disagreed. He found that the notices of intention to resume given on 13 October 2005 and 12 January 2006 "were given solely for the purpose of [the Department of Main Roads] advising an intention to realign part of the existing Corridor". He said that the notices of intention to resume evidenced only an "intention to acquire smaller parcels to achieve the desired realignment and as a further consequence to return to [the appellants] any land which had in 1998 been given to Ipswich City Council on trust and later transferred to [the Department of Main Roads], but which was no longer required." He also said that "it was the very narrow purpose of the resumption to realign in minor respects an existing proposed road corridor" and that the reason why the notices of intention to resume were given was to "provide for" or "accommodate" what the respondents' witness described as "a slightly different corridor".
Section 5(1) of the Act gave power to acquire land "for any purpose set out in the schedule". Paragraph (a) of the schedule listed the following purpose:

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Further, s 20 is a provision that affected the rights of individual property owners. Provisions of that kind providing compensation for compulsory acquisitions of property are customarily construed amply. Sub-sections (1) and (2) gave rights to compensation; sub-s (3) cut them back. Section 20(3) is to be construed as preserving rather than destroying the right to compensation by directing attention to specificity of purpose in particular circumstances.
The respondents submitted that any enhancement in the value of the adjoining land in the period leading up to the resumptions in 2005-2006 had to be taken into consideration by way of set-off against or abatement of the compensation to be paid for those resumptions. That is unsound, because the enhancement described in s 20(3) must be the result of the acquisitions for which compensation is being considered and cannot have preceded it. That proposition follows from the words "any enhancement … by the carrying out of the … purpose for which the land is taken", particularly the word "by". There was evidence before the arbitrator that the increase in value of the appellants' lands by reason of the South-West Transport Corridor was substantial, but no evidence accepted by the arbitrator that that increase in value was derived from the resumptions in 2005-2006. The onus of showing enhancement from the resumption in 2005-2006 was on the respondents. They did not discharge it, and thus they failed to exclude the possibility that any enhancement of the value of the appellants' land which adjoined the land resumed in 2005-2006 is likely to have resulted from the scheme dating from the 1990s rather than from the resumption in 2005-2006. Indeed the arbitrator positively found that value had been enhanced from at least 1999. Hence success does not flow for the respondents even if they are correct in submitting that the "purpose" of the 2005‑2006 resumptions was the facilitation of transport infrastructure. The respondents did not negate the proposition that while before 2005-2006 there was an enhancement in the value of the appellants' land (as the arbitrator positively found) since no land owned by the appellants relevant to these proceedings was resumed in that period, they have no entitlement to compensation in that respect and the enhanced value is irrelevant. And the respondents did not negate the proposition that while in 2005-2006 there were resumptions, there was no enhancement "by" the carrying out of the purpose for which the land was taken, since the enhancement had occurred earlier. It is wrong to treat the "purpose", which applied over quite a number of years and which was carried out in different ways at different times over those years, as being a single thing which in an instant of time both underlay the 2005-2006 resumptions and the much earlier value-enhancing activity.
There are questions not posed by the respondents which call for examination because an adverse answer would favour them. Accepting that if the land resumed in 2005-2006 had in fact been resumed in the 1990s, s 20(3) would have applied, why does s 20(3) not apply when instead the land is resumed in 2005-2006? Why does a difference in the timing caused perhaps by an erroneous estimation of the appropriate alignment, not corrected until 2005-2006, matter? The answer lies in considerations touched on in the previous paragraph. If the land resumed in 2005-2006 had been resumed six years earlier, that particular aspect of "the carrying out of the … purpose" would be related to the enhancement in value of the appellants' interests in adjoining land. But, as it happened, the land was only resumed in 2005-2006, and the respondents failed to establish that that later aspect of "the carrying out of the … purpose" was related to the enhancement in value of the appellants' interest in adjoining land.
The respondents relied on various authorities. None of them related to s 20(3), and it is undesirable to take up further space in a dissenting judgment analysing what the respondents said about them.
The appeal should be allowed and consequential orders made.

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