The 23 February 2009 amendments to the Acquisition of Land Act 1967 are the most significant overhaul of resumption and compensation law in Queensland since the Act commenced in 1967.
Major changes include:
• clarification of who can claim for compensation
• new individual rights for unit (shared title) owners
• new rights for consequential losses including loss of profit
• a three year limit to claim
The Trigger
The primary objective of the Acquisition of Land and Other Legislation Amendment Act 2009 the was to overcome uncertainties arising from the recent Queensland Court of Appeal decision of Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads, by ‘narrowing the meaning of the term “interest” in the act to limit the class of persons who must be served with a notice of intention to resume and who may be entitled to claim compensation’. Sorrento Medical had an interest in a number of car parks adjacent to the premises of the practice. As a result of the compulsory acquisition of land resumed by Main Roads Queensland for the purposes of road widening, two of those car parking spaces were lost. Main Roads Queensland reached agreement with the registered owners of the land and on-site buildings in respect of the amount of compensation for this compulsory acquisition. Main Roads Queensland refused to pay any compensation to Sorrento Medical, presumably on the grounds that it only had a contractual interest in the site and as such was not entitled to compensation. Both the Land Court and the Land Appeal Court determined that, as Sorrento Medical did not have a proprietary interest in the land resumed, it was not entitled to compensation. On appeal, this view was overturned by the Queensland Court of Appeal.
Who Can Claim
The amending Act explains the meaning of ‘services contract’ as ‘a contract merely for the provision of services on, to, or in relation to, the land’ in question. However, a person who has a contract for the provision of services to the land and has a right to reside on any part of the land will not be excluded from claiming compensation. This provision does not remove a right to claim compensation that is held by a person with a contractual right to enter the land and to use the land.
Separate Claim Rights for Unit Holders
The amending Act now confirms that the proprietor of a lot in a community titles scheme may be entitled to compensation. This permits separate claim and appeal rights rather than relying on the co-operation of other unit holders and body corporate entities.
Under the previous Act, only the Body Corporate received a notice of intention to resume if concerning the common area of a community titles scheme. Whilst this remains essentially the same, some procedural notification processes are clarified. Given the proliferation of shared title over recent decades for residential, commercial or industrial purposes, it would have seemed preferable for all proprietors with an interest to have been notified. It is likely this issue will continue to generate angst and debate.
Disturbance Costs & Consequential Losses
In the context of compulsory land acquisition, disturbance refers to those incidental costs which are the reasonable and probable results of the acquisition and are not directly reflected in the assessment of the value of the land taken such as removal costs, electricity and telephone connections, the redirection of mail, and valuation and legal fees. Disturbance was not referred to in the section of the Acquisition of Land Act that sets out the heads of claim to assess compensation. However, it has been recognised as of special value to the owner and is currently assessed separately by constructing authorities in line with the substantial body of case law.
The Act seeks to provide a list of costs that are to be considered as costs attributable to disturbance including legal, valuation and other professional costs reasonably incurred by the claimant in relation to the preparation and filing of the claim for compensation; applicable stamp duty either incurred or that might be incurred for the purchase of equivalently valued replacement land; costs incurred in relation to the discharge of a mortgage and the execution of a new mortgage but only to the extent that the new mortgage secured the repayment of the balance owed on the discharged mortgage; removal and storage costs relating to the relocation from the land taken; costs relating to the connection to services or utilities on relocating from the taken land; an amount attributed to the loss of profits resulting from the interruption of the claimant’s business as a consequence of the land being taken; and any other economic loss and costs incurred by the claimant as a direct consequence of the taking of the land.
The inclusion of the loss of profits and any other economic loss and costs, is a major step forward towards fair and just compensation. It was previously not claimable.
The Act standardises the practices of constructing authorities regarding what constitutes a consequential cost for the purchase of a replacement principal place of residence. It broadens the class of claimants entitled to be paid consequential costs to include payment of consequential costs for the repayment of an investment property. Currently the payment of consequential compensation to owners of investment properties to recompense them for replacement costs reasonably incurred is not payable. The amendments to Section 18 of the Act seem to term ‘investment property’ to mean any land held for investment purposes, though this is not clearly defined by the amended Act, other than investment property, of a person, means any land held by the person for investment purposes, so this will likely generate further debate and legal action.
Three Year Time Limit
There was previously no statutory time limitation on allowing a claim for compensation. Clause 13(3) places a maximum time limit of three years from the day the land was taken within which a claim for compensation may be served. Other States have similar time limitations. Claims for compensation out of time will be able to be lodged with the constructing authority if there is a “reasonable” argument for doing so. Alternatively, claimants will have a right of appeal to the Land Court where the constructing authority has not accepted the claim served on it outside the three year statutory period.
There are legitimate reasons that may prevent or restrain a dispossessed owner from making a claim within the new limitation period. Commonly a dispossessed owner may wish to wait until the works are completed so the impact of such works can be accurately and fully assessed. The discretion of the constructing authority and Land Court in this regard will again likely be the basis of considerable future debate.
Other Changes Include
by agreement, the taking of additional land where the remainder is – of no practical use or value to the owner
by agreement, the granting of an easement and/or transfer of land by the constructing authority – in satisfaction wholly or partly of the claimant’s claim for compensation
the Land Court can order the recovery of excess advance monies paid by the constructing authority if it was greater than the compensation payable
What was NOT included – No Solatium or Premium – THEY STILL DONT GET IT !!
The solatium or premium is an extra allowance above established and quantifiable valuation methodologies, for the “grief” of putting a dispossessed owner through a resumption process. It has been recognised in other State Legislature and case law to varying degrees for nearly 50 years, yet does not get a mention in this Queensland review.
The resumption of land, whether compulsory acquisition or by negotiation, is perhaps the worst experience any property owner can have. Imagine this … out of the blue a government agency taps you on the shoulder and says we want part of or the whole of your property.
The emotional trauma caused by an acquisition of residential property is particularly horrific and very real.
There is a long held principle enshrined in compensation law and case precedent concerning reinstatement to a position no better or worse. The fact is these are shallow words not backed by legislation or action.
Whist there were plenty of platitudes from both sides of the House in the first and second readings of the Bill about natural justice, and examples raised about unfair outcomes, there was no proposal or mention of a solatium or premium for putting a disposed land owner through this experience.
Acquisitions and resumptions only affect a minority of the voting electorate so it’s not a big political agenda item. Trouble is, it’s usually devastating to those who experience it.
In this respect, it could well be argued that Queensland is still … a rotten State. That is a perhaps a bit harsh, but until we fully recognise the rights of quiet enjoyment to property interests then we will continue to fail in our duty of care.