Aurizon Property Pty Ltd v The Chief Executive, Department of Transport and Main Roads [2023] QLAC 1

LAND APPEAL COURT OF QUEENSLAND CITATION: Aurizon Property Pty Ltd v The Chief Executive, Department of Transport and Main Roads [2023] QLAC 1 PARTIES: Aurizon Property Pty Ltd ACN 145 991 724 (appellant) v The Chief Executive, Department of Transport and Main Roads (respondent) FILE NOs: LAC001-23 Land Court No AQL054-20 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal from the Land Court of Queensland ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 13 December 2023 DELIVERED AT: Townsville HEARD ON: 10 and 11 October 2023 HEARD AT: Townsville THE COURT: North J WA Isdale, Member of the Land Court Coker DCJ, Acting Member of the Land Court ORDERS: 1. Appeal allowed. 2. The operation of the decision of the Land Court in this matter, Aurizon Property Pty Ltd v Chief Executive, Department of Transport and Main Roads [2022] QLC 22, decided on 9 December 2022, is suspended. 3. The matter is remitted to the Land Court to act according to law with a hearing before another Member. 4. The question of costs is to be decided by the Court on the papers without any hearing. 5. The parties are to file and exchange written submissions by 4:00pm on Wednesday, 31 January 2024, not to exceed two (2) pages. -- 1 of 16 -- 2 CATCHWORDS: REAL PROPERTY – COMPULSORY ACQUISTION OF LAND – PROCEEDINGS FOR COMPENSATION – QUEENSLAND – APPEAL TO LAND APPEAL COURT – whether the Court failed to give adequate reasons – whether the Court failed to identify and decide central issues to the case – whether the Court acted upon the wrong principle APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – WHERE FINDINGS BASED ON CREDIBILITY OF WITNESSES – GENERALLY – where the expert witness’s credit is central to the case – whether the witness gave false evidence – where the credibility of the witness was not expressed in the reasons – whether the Court made an appealable error Acquisition of Land Act 1967 (Qld) s 20 Aurizon Property Pty Ltd v Chief Executive, Department of Transport and Main Roads [2022] QLC 22 Australian Provincial Assurance Association Ltd v Commissioner of Land Tax [1942] ALR 156 Beydoun v Valuer-General [2018] 39 QLCR 34 Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 Chief Executive, Department of Natural Resources and Mines v Kent Street Pty Ltd (2009) 171 LGERA 365 Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219 Eumundi Group Hotels Pty Ltd v Valuer-General [2021] QLAC 2 Fox v Percy (2003) 214 CLR 118 Intertherm Pty Ltd v The Crown (1978) 5 QLCR 21 Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111 Townsville City Council v Chief Executive, Department of Main Roads [2006] 1 Qd R 77 Turner v Minister of Public Instruction (1956) 95 CLR 245 Yates Property Corporation Pty Ltd (in liquidation) v Darling Harbour Authority (1991) 24 NSWLR 156 APPEARANCES: Mr DR Gore KC, with Mr JJ Ware (instructed by Corrs Chambers Westgarth) for the appellant Mr RJ Anderson KC (instructed by Clayton Utz) for the respondent -- 2 of 16 -- 3 THE COURT: Introduction [1] In 2014, the respondent resumed a 30-metre-wide strip of land running the 950 metre length of the northern boundary of the land owned by the appellant at Wulguru, south of Townsville. At the time of the resumption, the appellant was the registered owner of 174.5 hectares of land. The area resumed was 2.875 hectares. However, because of hydrological considerations, it was agreed that pre-resumption the maximum developable area was 90.3 hectares and post-resumption 78.5 hectares with the consequential reduction in the maximum developable area of 11.8 hectares. The appellant applied to the Land Court for compensation assessed under section 20 of the Acquisition of Land Act 1967. The parties agreed disturbance costs of $200,000 (inclusive of interest) requiring the Court below to otherwise assess compensation on the date when the land was taken.1 [2] The compensation claim principally concerned the injurious affection caused to the appellant’s remaining land and there was substantial agreement between the parties with the result that the only experts called to the give oral evidence were civil engineers and valuers. The issues concerning the civil engineering experts were discrete, but there was a “threshold” difference between the parties upon the valuation methodology so that: “… the critical issue between the parties, was the appropriate methodology to value the acquired land, either the direct comparison (Mr Lyons) or the hypothetical development method (Mr Crawford). Mr Lyons’ undertaking involved a sub-issue, namely whether reliance upon parcels of land sold in Townsville for residential development are appropriate to utilise in the direct comparison methodology. Had the hypothetical development method been preferred, disagreement as to the appropriate inputs to be utilised loomed large.”2 [3] The appellant’s expert valuer, Mr Crawford, expressed the opinion that the primary method of valuation should be the hypothetical development approach, looking at what the land would have been capable of being used for compared to what it could be used for after the resumption. This is an acceptable method of valuation in a 1 Acquisition of Land Act 1967 s 20(2). 2 Respondent’s Outline of Submissions, [2] (‘RO’). -- 3 of 16 -- 4 compensation case such as the present.3 Mr Crawford was of the opinion that suitable comparable sales did not exist, so he selected this method. [4] Mr Lyons, the expert valuer called for the respondent, was of a different opinion to Mr Crawford, using sales in the Townsville area which, in his opinion, were comparable, although in different zoning for development and use purposes. [5] The valuers disagreed on the fundamental question of what method to use to arrive at an assessment of compensation. [6] The comparable sales method (advocated by Mr Lyons) has its adherents and for sound reason: “The superiority of sales evidence when valuing land is illustrated by the words of then President Trickett in the Land Court in Fairfax v Department of Natural Resources and Mines: “The principles for determining of the “market value” of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 411). It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that: ‘Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales.’””4 But it is desirable that the comparison be of like with like. The sales must be truly comparable.5 In Intertherm Pty Ltd v The Crown6 this Court said: “It is a primary rule of valuation that like should be compared with like and this applies in so far as all relevant factors, including the zoning, a concern. The rule is recognised by the Land Appeal Court in Amoco Australia Pty Ltd v The Crown (SL30455). ... At page 16 of the judgment it was stated “it is 3 Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209. 4 Beydoun v Valuer-General [2018] 39 QLCR 34, [19] (emphasis in original). 5 See Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111, [18]. 6 (1978) 5 QLCR 21, 25. -- 4 of 16 -- 5 difficult to compare land situated in different zones. It is desirable to avoid such comparison, if possible.” In this case it will be recalled that Mr Lyons drew upon sales of differently zoned land (residential) in valuing the subject land. [7] The hypothetical development method suggested by Mr Crawford is a recognised method of valuation, finding authoritative support in the High Court.7 It is recognised that this method has a particular utility in the absence of reliable comparable sales evidence and the site is vacant or not developed to its highest and best use.8 [8] The discussion of cases above is not novel nor controversial. Both methods of valuation find support in cases of high authority. Both methods can be of more or less utility, depending upon the circumstances and the availability of evidence. [9] This conclusion of which valuer is to be preferred has significant consequences for calculation of the compensation payable to the appellant. The Land Court, accepting the opinion and therefore the methodology employed by Mr Lyons, determined compensation in the sum of $2,450,000. [10] The appellant, dissatisfied with this, has appealed to this Court and submits that the evidence of Mr Crawford should be accepted. This would result, it submits, in compensation being determined in the sum of $6,500,000, of which $5,900,000 is attributable to the hypothetical development calculation. Alternatively, if the Court applies the comparable sales method, the one used by Mr Crawford, it should assess the base compensation at or between $4,200,000 and $5,600,000. The base compensation is arrived at by the use of the hypothetical development valuation method. The difference is accounted for by the value of the land taken, disturbance costs and interest.9 7 See Australian Provincial Assurance Association Ltd v Commissioner of Land Tax [1942] ALR 156 at [158]; Turner v Minister of Public Instruction (1956) 95 CLR 245 and Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209, [286]-[288]. 8 Alan Hyam, The Law Affecting Valuation of Land in Australia (The Federation Press, 6th ed, 2020) 225-228. 9 Aurizon Property Pty Ltd v Chief Executive, Department of Transport and Main Roads [2022] QLC 22, [194] (Reasons for judgment in the Land Court, ‘RJ’). -- 5 of 16 -- 6 The Grounds of Appeal [11] The hearing in the Court below (including inspections and submissions) took four days and compensation was determined in the sum of $2,450,000.10 The appellant has appealed the decision. The grounds of appeal are:11 1. The learned Member erred in a. treating the 3 residential sales as comparable sales for the purposes of an industrial site, and in failing to decide the Appellant’s contention, that, as a matter of principle, those sales could not be treated as comparable; b. failing to decide the Appellant’s contention that the Respondent’s valuer, Mr Lyons, could not be relied upon, because, in the course of his evidence, he had demonstrated dishonesty or a reckless disregard for the truth, and because he was a very inexperienced expert witness; c. disregarding the earlier valuation opinions of Mr Lyons, as recorded without objection in the valuation JER, about the sales at Ridge Street, Roseneath, Charlton and Yatala, and the application of those opinions to the subject site; d. failing to decide that the sale for an industrial purpose at Ridge Street, Roseneath, identified, by a significant amount, the lowest value that could be applied to the subject site; e. incorrectly describing a contention of the Appellant that Mr Lyons’ overall assessment of compensation was incapable of being accepted when looking at the increased cost of developing the balance area in the post-resumption scenario as being based on estimates made by the Appellant’s civil engineer, when the true position was that the contention was based on 8 scenarios that were primarily based on agreed facts and evidence that emanated from the Respondent’s consultants (Mr Lyons, Mr Caleo – the valuer first retained by the Respondent – and the Respondent’s civil engineer); f. taking into account the evidence of Mr Lyons that the cost of developing the estate in the post-resumption scenario was less than in the before-resumption scenario, in circumstances where that evidence was explained by the significant loss in area in the post-resumption scenario caused by the resumption; g. failing to decide that the hypothetical development method was the appropriate valuation method to apply, in view of: i. the absence of comparable sales evidence; ii. the large amount of agreed inputs into the method; iii. the consistency of inputs into the method which arises when using the before and after method of valuation; h. with respect to the application of the hypothetical development method: i. concluding that the profit and risk factor is a product of the IRR factor; 10 RJ (n 9). 11 Notice of Appeal, [9]-[10]. -- 6 of 16 -- 7 ii. failing to conclude that Mr Crawford’s profit and risk factor of 20% in both the before and after scenarios was appropriate; iii. failing to conclude that the land was ripe for development; iv. taking into account a post resumption fact, namely, that the balance of the subdivision was not completed at the time of the hearing; v. deciding that Mr Crawford’s sales rate was overly optimistic; vi. concluding that the Respondent’s submission that the vast range of outcomes (from around $16.5M to $6.5M) serve to illustrate the significant difficulties associated with reliance on such a method was relevant and weighed against the adoption of the method in this case; vii. concluding that Estate Master is a program used to prepare a Residual Land Value Assessment to check the value arrived at using a comparable sales method; viii. deciding that in the application of the Estate Master program by Mr Lyons appropriate account was taken of the sales rate (in circumstances where Mr Lyons conceded that was not the case, and that his concession would make a big impact on the numbers generated by his use of that program); i. deciding that, in relation to the hydromulch issue and the intersection cost issue, Mr Crawford had applied the figures provided by the Appellant’s civil engineer, Mr Gould, directly, when the true position was that Mr Crawford had used Mr Gould’s figures as an input to the model that he was using for the hypothetical development method, and the model produced the result used by Mr Crawford; j. failing to apply the liberal estimate principle so as to resolve matters in favour of the Appellant, when the evidence was insufficiently uncertain, ambiguous or unresolved to permit the application of that principle, or otherwise where its application was warranted. 2. In view of the errors in para 1, the learned Member erred: a. in law, in treating residential sales as comparable sales for the purposes of an industrial site; b. in law, in failing to decide central questions in the hearing (namely, those identified in the grounds in sub-paras 1(a)-(d), above); c. in law, in failing to give adequate reasons for his decision (namely, reasons relating to the grounds identified in sub-paras 1(a)-(d), above); d. in law, in failing to adopt the hypothetical development method; e. in law, in failing to apply the liberal estimate principle; f. in failing to apply the hypothetical development method in accordance with the evidence of Mr Crawford; g. in failing to decide that the correct assessment of compensation was $6,500,000. [12] Prominent among the grounds of appeal are those that complain that the reasons for certain important findings were inadequate. All grounds were agitated before us at the hearing of the appeal, but it is convenient to consider the complaints of the inadequacy of reasons first. Essentially, the appellant submitted that the reasons in -- 7 of 16 -- 8 (broadly speaking) three respects were inadequate and in each case it involved an issue fundamental to the assessment and determination of compensation. The issues concerned: (a) The failure to give reasons for the acceptance of Mr Lyons notwithstanding an attack upon both his credit and his inexperience as an expert witness; (b) The failure to give reasons for the acceptance of Mr Lyons valuation based on comparable sales; (c) The failure to give reasons for the rejection of Mr Crawford’s valuation based on a hypothetical development method. [13] For the reasons given in what follows, the appeal must succeed and the orders made in the Land Court must be set aside. Notwithstanding the submissions and urging of the appellant that this Court should assess the compensation, the proper course in the particular circumstances is for the proceeding to be remitted to the Land Court for a hearing before and determination of compensation by a different Member. In that hearing, the determination of compensation should be based upon the evidence tendered and relied upon by the parties at that hearing. The challenge to the credit of Mr Lyons [14] At the hearing below, there was a sustained attack upon the credibility of Mr Lyons. This is demonstrated by the outline of submissions relied upon by the appellant at the hearing below:12 “177. There are some conventional credibility issues that have arisen in this hearing. It is convenient to deal first with the 2 valuers, given that there [sic] evidence is at the core. 178. Regrettably, Mr Lyons exhibited the traits of a witness whose evidence should be treated with particular caution. 179. First a serious question about his honesty arose in connection with exhibit 74, his typed record of his interview with Kent Burbidge from the Maidment Group on 6 October 2022. The mere production of this document arose in suspicious circumstances. It was not provided to Aurizon or the Court until 9:12am on Tuesday, 25 October 2022, which was day 3 of the hearing, after Mr Lyons was sworn in as a witness on day 2. Aurizon noted at the start of day 3 that it was “particularly troubling” that documents 74, 75 and 76 had “arrived overnight”. 180. But matters only got worse from there. The tender of exhibit 74 came after the following exchange with Mr Anderson KC: … 12 Appeal Record Book, p 2732 (‘RB’). -- 8 of 16 -- 9 181. It can be seen that when asked the specific question when he typed the note, Mr Lyons unequivocally told this Court that he typed the note on 6 October 2022. He confirmed that in the following exchange at the start of his cross examination after the document had been tendered: … 182. It was then established that that evidence (which had been given twice) was incorrect, by the documents that became exhibit 80, which were tendered after the following exchange: … 183. There is no innocent explanation for the giving by Mr Lyons of the incorrect evidence about when exhibit 74 was typed. Either it was a deliberate falsehood, or it was evidence given with reckless disregard for the truth. Regrettably, the former is the more likely explanation of the two. His attempt to justify the inconsistency on the basis that he “must have misunderstood Mr Anderson” itself lacks credibility. Mr Anderson’s question was crystal clear, and so too was Mr Lyon’s response. Further inconsistency then arose in relation to the handwritten notes; in his evidence in chief, he said: “I think” I’ve destroyed the handwritten notes, but once the truth came out, he became dogmatic that he had destroyed them. 184. These are multiple conventional signs of a witness whose evidence should be treated with great caution. The content of exhibit 74 is not at the heart of the case, but the credibility of Mr Lyons is. If he is prepared to be flirtatious with the truth about a side issue, his evidence about a central issue should be treated with great caution. 185. But there are many other reasons why the Court should treat Mr Lyons’ evidence with great caution. He is plainly an inexperienced witness, having only given evidence once before in this Court, nearly 30 years ago. In that 30 year period, there have been many changes in all Courts in the country in relation to the giving of evidence by expert witnesses, with the guiding theme being that the expert’s overriding duty is to the Court, and not to be an advocate. In this Court, that development in the law is reflected in rule 20 of the Land Court Rules 2022, which also picks up Schedule 1C of the UCPR. It is obvious from his overall performance in this case that Mr Lyons has not kept pace with these changes in relation to the giving of expert evidence. 186. Some illustrations of his failure to understand his duty have already been given above, in connection with his changes of position in relation to the Charlton and Yatala sales, and in relation to the production of his supplementary report (ex.27), and his shift of position on Roseneath, and his inconsistent positions in relation to the use of post-resumption facts. His shifts of position consistently favoured the Department. He was unaware of the term “model litigant”. He never volunteered that the advance which the Department had paid to Aurizon was based upon a report by an experienced valuer who had applied a value of $150,000/ha to the developable lands, it being immaterial, insofar as credibility issues are concerned, that that earlier report ultimately assessed compensation by reference to the cost of placing fill. In a case where the valuers giving evidence are so far apart, there was an onus on Mr Lyons to bring it to the attention of the Court that his predecessor had valued the developable lands at nearly double the value that Mr Lyons puts on the developable lands. -- 9 of 16 -- 10 187. Mr Lyons also shifted position in relation to the highest and best use issue, both within the JER itself, and in his supplementary report. His explanations for his shifts of position were unsatisfactory. 188. There were various occasions in cross examination when Mr Lyons was not directly responsive to a question, and he had to be pulled up by the cross examiner, and there was a distinct tendency in all of his evidence to be an advocate for his client, rather than a witness assisting the Court.” (citations omitted) (emphasis added) [15] The only occasion when the Member, in the course of his reasons, discussed the credibility issues was in paragraph [9] where he said: “The credibility of both valuers was to a greater or lesser extent challenged during the hearing. In the end I accept that both valuers were firm in their views, perhaps a little inflexible, but not disingenuous.”13 [16] The Member did not address in a reasoned way the criticisms of Mr Lyons made by the appellant in the hearing below. This has ramifications when considering his reasons for accepting Mr Lyons’ valuation opinion and rejecting those of Mr Crawford. The acceptance of Mr Lyons’ methodology and rejection of Mr Crawford’s [17] The Member foreshadowed his findings early in his judgment: “[42] The evidence which is canvassed later in these reasons lead me to favour the view of Mr Lyons in this regard.”14 Thereafter, the reasons contained numerous findings largely accepting the methodology of Mr Lyons and rejecting Mr Crawford’s.15 [18] The findings at [143] and [144] form part of the reasons for rejecting the methodology of Mr Crawford: “[143] In my view, Mr Crawford’s sales rate is overly optimistic. I accept the submission that there is no evidence to support the assertion that the supply of new industrial land of lots greater than 2 ha will generate demand. [144] The evidence of Mr Lyons, who has 27 years of valuation experience in the Townsville area, was that there was limited demand for lots of greater than 2 ha, and that that limited demand has to date been met by amalgamating parcels in other industrial subdivisions. I accept the respondent’s analysis of absorption rates that in the 5 years prior to the resumption date there only 8 lots greater than 2 ha taken up in the Townsville area.”16 13 RJ (n 9), [9]. 14 RJ (n 9), [42]. 15 See for example, RJ (n 9), [61], [73], [143], [144], [160], [161], [167], [168] and [169]. 16 RJ (n 9), [143]-[144]. -- 10 of 16 -- 11 [19] They are found at the heart of the Member’s consideration “Conclusions on Methodology”, which commences at [127] and concludes at [160] and [161]: “[160] I note the issues raised by Mr Crawford concerning Mr Lyons analysis of englobo residential sales and that some of those issues may be valid, however my decision goes to the reliability of the method in this case and the application of the method I consider the more reliable. [161] There is no question that the residential sites are different to the subject site. In the circumstances however, despite the shortcomings, I am of the view that the comparable sales approach is the more reliable methodology.”17 [20] In fairness to the Member, below a reading of his reasons demonstrates that he methodically addressed the points of fact and law agitated by the parties in support of their rival contentions concerning the valuation of the compensation. Without expressing any view upon the criticisms made by the appellant in support of the appeal, so far as it concerns discreet issues of valuation (fact and law) agitated by the parties, it must be acknowledged that the Member was at pains to address the rival contentions systematically. Further, as the pages from his reasons quoted above18 demonstrate, he was at pains19 to explain why, in the case of numerous issues, he preferred the opinion of Mr Lyons to that of Mr Crawford. But in this context, his reasons do not address why, in respect of the issues agitated, he preferred Mr Lyons’ opinion notwithstanding the attack upon his credit and his inexperience as an expert witness. A review of some of the cases [21] A failure by a Court to give reasons is a serious failing resulting in an error of law. In Yates Property Corporation Pty Ltd (in liquidation) v Darling Harbour Authority20 Handley JA said: ““The giving of proper reasons for decision has been seen to be “an incident of the judicial process”. Housing Commission of New South Wales v Tatmar Pastoral Co (at 386) per Mahoney JA, approved by Gibbs CJ in Public Service Board (NSW) v Osmond (1986) 159 CLR 656 at 667. Accordingly judicial officers have a duty to give proper reasons, and a failure to perform this duty constitutes an error of law: Pettitt v Dunkley. Compliance with the requirements of natural justice is also an incident of the judicial process: see Commissioner of Police v Tanos (1958) 98 CLR 383 at 396. Denial of natural justice to a litigant has also been held to be an error of law: see Escobar v Spindaleri (1986) 7 NSWLR 51 at 57, 59, 60; Sullivan v 17 Ibid, [160]-[161]. 18 See [17]-[19] above. 19 Albeit sometimes somewhat tersely. 20 (1991) 24 NSWLR 156. -- 11 of 16 -- 12 Department of Transport (1978) 20 ALR 323 at 342; Barbaro (S) v Minister for Immigration and Ethnic Affairs (1982) 65 FLR 127 at 130 and News Corporation Ltd v National Companies and Securities Commission (1984) 5 FCR 88 at 95, 122. The duty of a judicial officer to hear and determine a claim made in judicial proceedings conducted before that officer is also an incident of the judicial process. Since breaches of the duty to give proper reasons and to observe procedural fairness involve errors of law, there seems every reason to hold that a breach of the duty to hear and determine a claim made in judicial proceedings also gives rise to such an error.”21 [22] The principles outlined by Handley JA are well established and there are many authorities to similar effect in the context of Courts or Tribunals from whom an appeal may lie. In Drew v Makita (Australia) Pty Ltd22 Muir JA (with whom Holmes JA and Daubney J agreed) said: “[57] A court from which an appeal lies must state adequate reasons for its decision. The failure to give sufficient reasons constitutes an error of law. [58] The rationale for the requirement that courts give reasons for their decisions provides some guidance as to the extent of the reasons required. The requirement has been explained, variously, as necessary: to avoid leaving the losing party with “a justifiable sense of grievance” through not knowing or understanding why that party lost; to facilitate or not frustrate a right of appeal; as an attribute or incident of the judicial process; to afford natural justice or procedural fairness; to provide “the foundation for the acceptability of the decision by the parties and the public” and to further “judicial accountability”. [59] The extent to which a trial judge must expose his or her reasoning for the conclusions reached will depend on the nature of the issues for determination and “the function to be served by the giving of reasons”. For that reason, what is required has been expressed in a variety of ways. For example, in Soulemezis v Dudley (Holdings) Pty Ltd, Mahoney JA said: “…And, in my opinion, it will ordinarily be sufficient if – to adapt the formula used in a different part of the law … by his reasons the judge apprises the parties of the broad outline and constituent facts of the reasoning on which he has acted.” [60] McHugh JA’s view was that reasons sufficient to meet the above requirements do not need to be lengthy or elaborate but “… it is necessary that the essential ground or grounds upon which the decision rests should be articulated”. [61] In Strbak v Newton, Samuels JA said: “… What is necessary, it seems to me, is a basic explanation of the fundamental reasons which led the judge to his conclusion. There is no requirement, however, that reasons must 21 Ibid, [186]. 22 [2009] 2 Qd R 219. -- 12 of 16 -- 13 incorporate an extended intellectual dissertation upon the chain of reasoning which authorises the judgment which is given. [62] Woodward J, in Ansett Transport Industries (Operations) Pty Ltd v Wraith, said that the decision maker: “… should set out his understanding of the relevant law, any findings of fact on which his conclusions depend (especially if those facts have been in dispute), and the reasoning processes which led him to those conclusions.” [63] Meagher JA in Beale v Government Insurance Office Of NSW stated these propositions: “… there are three fundamental elements of a statement of reasons, which it is useful to consider. First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered. However, where certain evidence is important or critical to the proper determination of the matter and it is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it: North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435. Where conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to. Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached. The obvious extension of the principle in North Sydney Council is that, where findings of fact are not referred to, an appellate court may infer that the trial judge considered that finding to be immaterial. Where one set of evidence is accepted over a conflicting set of significant evidence, the trial judge should set out his findings as to how he comes to accept the one over the other. But that is not to say that a judge must make explicit findings on each disputed piece of evidence, especially if the inference as to what is found is appropriately clear: Selvanayagam v University of the West Indies [1983] 1 WLR 585; [1983]1 All ER 824. Further, it may not be necessary to make findings on every argument or destroy every submission, particularly where the arguments advanced are numerous and of varying significance: Rajski v Bainton (Court of Appeal, 6 September 1991, unreported). Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found. Those reasons or the process of reasoning should be understandable and preferably logical as well.” [64] Whilst, in my respectful opinion, it would be inconsistent with authority to apply the three “fundamental elements” rigidly, and I do not understand his Honour to be suggesting otherwise, they provide useful guidance for a determination of the sufficiency of reasons in the general run of cases. -- 13 of 16 -- 14 [65] The following remarks of Henry LJ in Flannery v Halifax Estate Agencies Ltd relating to expert evidence were referred to with approval in the reasons of Ipp JA in Wiki v Atlantis Relocations (NSW) Pty Ltd: “It is not a useful task to attempt to make absolute rules as to the requirement for the judge to give reasons. This is because issues are so infinitely various. For instance, when the court, in a case without documents depending on eye-witness accounts is faced with two irreconcilable accounts, there may be little to say other than that the witnesses for one side were more credible … But with expert evidence, it should usually be possible to be more explicit in giving reasons: see Bingham LJ in Eckersley v Binnie (1988) 18 ConLR 1 at 77-78: ‘In resolving conflicts of expert evidence, the judge remains the judge; he is not obliged to accept evidence simply because it comes from an illustrious source; he can take account of demonstrated partisanship and lack of objectivity. But, save where an expert is guilty of a deliberate attempt to mislead (as happens only very rarely), a coherent reasoned opinion expressed by a suitably qualified expert should be the subject of a coherent reasoned rebuttal, unless it can be discounted for other good reasons …’” And: “… [w]here the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other …”.”23 Discussion [23] In submissions before us, Mr Anderson KC for the respondent submitted that it was clear from the reasons for judgment that the Member preferred the evidence by Mr Lyons to that of Mr Crawford. That may be accepted from a reading of the reasons, and in particular the paragraphs quoted and referred to above. But the reasons do not explain why those findings were made in light of the attack on Mr Lyons’ credit and experience as an expert witness. [24] It will be recalled that the criticisms of Mr Lyons were not limited to an isolated credit issue of little consequence that can be brushed off. The attack on Mr Lyons’ credit was extensive and wide ranging. His credit and honesty were impugned and his 23 Drew v Makita (Australia) Pty Ltd [2009] 2 Qd R 219, [57]-[65]. -- 14 of 16 -- 15 conduct as an expert witness was the subject of extensive submissions.24 It was a criticism of his veracity as a witness and experience as an expert witness. It was submitted that he was unaware of his obligations to the Court as an expert. With respect to the Member, his reasons do not explain how he arrived at the conclusion expressed in [9] of his reasons and how the conclusions asserted concerning methodology issues were reached in face of the credit issues raised by the appellant.25 [25] These matters lead us to conclude that the reasons do not address matters raised by the appellant that go to the heart of the proceedings. In failing to provide reasons for the acceptance of Mr Lyons, notwithstanding the attack on his credit and experience, the reasons fail to demonstrate how the conclusion to reject the evidence of Mr Crawford in favour of that of Mr Lyons was reached. The parties are entitled to know from the reasons if the Member had in mind the “credit issues” when considering the competing opinion evidence concerning methodology and valuation. Further, they are entitled to know what effect or weight was given to these matters and if not much or any significance, why not. [26] In that way we conclude that the reasons by the Member are insufficient. Conclusion [27] Earlier,26 we foreshadowed orders that the appeal should succeed and the matter be remitted to be decided by a different Member. The inadequacy of the reasons effectively leaves the question of the reliability of Mr Lyons, as an expert witness, unresolved. It infects the findings made about the valuation methodology and the questions arising that are fundamental to the resolution of the compensation claim. We are not unmindful that the statutory framework considered by Keane JA in Townsville City Council v Chief Executive, Department of Main Roads27 empowers this Court to, in an appropriate case, substitute its own findings when error is 24 Though it should be acknowledged that some of the issues the subject of complaints were of little consequence for the assessment of compensation. For example, the controversy concerning Exhibit 79 was not central to the case or valuation but was a stark example of the credit issues. 25 See [15] above. 26 See [13] above. 27 [2006] 1 Qd R 77, [38]-[43]. -- 15 of 16 -- 16 detected28 by utilising the expertise of the specialist Members.29 But the circumstances here prevent such a course. There is no foundation for a starting point of proven acceptable evidence. A question such as the credit or reliability of such an important witness cannot be resolved on the papers, it requires a rehearing where the experts are allowed to give evidence. Mindful as we are not to place too much faith in the interpretation of demeanour30 it remains the case that an appellate court has limitations which: “limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses’ credibility and of the ‘‘feeling’’ of a case which an appellate court, reading the transcript, cannot always fully share.”31 [28] In light of our conclusions, it is not necessary to address the other grounds of appeal and complaints made by the appellant against the decision appealed from. We are persuaded that the appeal should succeed and the matter reheard. Those other grounds are better addressed in the context of the evidence and findings at the rehearing. Further, most complaints, if not all, have to be considered in light of the findings made about whose opinion should be preferred. [29] In the circumstances, the rehearing should be before a different Member of the Court. Orders 1. Appeal allowed. 2. The operation of the decision of the Land Court in this matter, Aurizon Property Pty Ltd v Chief Executive, Department of Transport and Main Roads [2022] QLC 22, decided on 9 December 2022, is suspended. 3. The matter is remitted to the Land Court to act according to law with a hearing before another Member. 4. The question of costs is to be decided by the Court on the papers without any hearing. 5. The parties are to file and exchange written submissions by 4:00pm on Wednesday, 31 January 2024, not to exceed two (2) pages. 28 See Chief Executive, Department of Natural Resources and Mines v Kent Street Pty Ltd (2009) 171 LGERA 365, [39], [216]. 29 This occurs not infrequently, see for example, in another statutory regime Eumundi Group Hotels Pty Ltd v Valuer-General [2021] QLAC 2. 30 Fox v Percy (2003) 214 CLR 118. 31 Ibid, [23] per Gleeson CJ, Gummow and Kirby JJ. -- 16 of 16 --