Ellwood v Mackay Sugar Co-Operative Association Limited [2007] QLC 52 (2007) 28 QLCR 235

LAND COURT OF QUEENSLAND CITATION: Ellwood v Mackay Sugar Co-Operative Association Limited [2007] QLC 52 PARTIES: Colin Ian and Desrae Jane Ellwood (applicants) v. Mackay Sugar Co-operative Association Limited (respondent) FILE NOS: A2006/0712 DIVISION: Land Court of Queensland PROCEEDING: Application for compensation – Sugar Industry Act 1999. DELIVERED ON: 4 July 2007 DELIVERED AT: Brisbane HEARD AT: Mackay MEMBER: Mr RP Scott ORDER: 1. I order that the respondent pay to the applicants compensation in the amount of $17,475.00. 2. I order that interest be paid by the respondent to the applicants on the amount of $15,466.00 from 20 June 2006 and on the amount of $2,009.00 from 27 July 2006 each at a rate of 5.75 per centum per annum up to and including the day immediately preceding the day of payment. CATCHWORDS: Sugar Industry Act – s.68 – non-prescriptive jurisdiction regarding compensation – the provision requires assessment of compensation flowing from grant of easement – not from works earlier carried out on the land. Sugar Industry Act – legal and associated costs – costs of contesting the grant of easement not compensable – costs incurred after filing of originating application are costs in the cause. Compensation – no valuation evidence – untested evidence of a valuer's opinion – parties might have settled on a figure about 10% higher – value per hectare resolved in favour of applicants. -- 1 of 19 -- 2 Compensation for easement assessed at 50% of the total diminution in value retained land caused by physical cane railway and ground of easement. Interest on compensation – not provided for in Sugar Industry Act – interest ordered. APPEARANCES: Mr G S Crow on behalf of the applicants. Mr M Hinson SC on behalf of the respondent. SOLICITORS: Macrossan & Amiet for the applicants. McCullough Robertson respectively for the respondent. [1] This is an application for compensation pursuant to s.68(2) of the Sugar Industry Act 1999. Section 68 relevantly provides: "68 Compensation on grant of access right (1) Subject to subsection (6), if the commissioner or a land-holder grants an access right, the land-holder whose land is affected and the mill owner or grower to whom the access right is granted may agree on the amount of any compensation payable to the land-holder. (2) If the land-holder and the mill owner or grower can not agree on the amount— (a) the holder or the mill owner or grower may apply to the Land Court to decide the amount; or (b) they may jointly apply to the commissioner to appoint a valuer to decide the amount. (3) On an application under subsection (2)(a), the Land Court may decide the amount. (4) On an application under subsection (2)(b), the following provisions apply— (a) the commissioner may appoint a valuer; (b) the valuer may decide the amount; (c) the valuer’s decision is final. (5) The costs of a valuation under subsection (4) are to be paid by— (a) if the access right granted is a cane railway easement—the mill owner; or (b) if the access right granted is a permit to pass—the holder of the permit to pass." The provisions relating to a "permit to pass" are not presently relevant. [2] On 20 June 2006, the Sugar Industry Commissioner made a decision to grant a cane railway easement over land owned by the applicants, for the benefit of the respondent who operates various sugar mills in the Mackay district including in the area where the applicants' land is situated. The applicants' land may be formally described as Lot 1 on Registered Plan 730586 Parish of Ossa, County of Carlisle. A cane railway easement is an "access right" as described in s.63(1)(b) of the Act. Section 63(4) – (6) are relevant to the grant of such an easement: "… (4) An easement (a cane railway easement) may be granted to a mill owner to facilitate harvest of cane and supply of cane to any mill or between any mills. (5) A cane railway easement may be granted whether or not it is annexed to or used and enjoyed together with any other land. -- 2 of 19 -- 3 (6) The grant of an access right is subject to the powers under the Transport Infrastructure Act 1994 of the chief executive or a railway manager within the meaning of that Act." [3] The easement took effect on the day of the Commissioner's decision upon its particulars being recorded in the "access rights register".1 It seems clear that the effect of s.68(1) is that, consequent upon the grant of the easement, the applicants became vested in a right to compensation. In pursuit of that right the applicants lodged an originating application in this Court on 29 August 2006 seeking compensation totalling $61,695.64 plus interest and subject to the final calculation of the head of claim relating to legal expenses. For its part the respondent contends for a lesser compensation amount in its submissions which I discuss below. It is common ground that the parties could not agree on the amount of compensation. There is no challenge to the right of the applicants to make an application under s.68(2)(a) nor to the jurisdiction of this Court under s.68(3). I return to the issue of compensation below, but first set out some historical facts which are relevant to the make-up and of the respondent's challenge to the amount claimed. I take that history from the evidence of two witnesses who were called. [4] Colin Ian Ellwood, one of the co-applicants, was called to give evidence whilst the respondent called David Angus Langham. Mr Langham commenced employment with the respondent in 1988. He became involved in certain negotiations regarding the area of the easement in the year 2000 when he was the Administration Superintendent. He is now the Manager Cane Supply. [5] The applicants purchased the subject property, over which the easement was granted, in 1975. It had previously been used for cattle grazing but the applicants were soon preparing the land for sugar cane. The first cane assignment was recorded in 1976 in an area of 3.52 hectares and gradually increased until 1982 when the area became 23.35 hectares, a level at which it has since remained. [6] Soon after the purchase of the property representatives of the Marian Mill2 approached the applicants and discussed with Mr Ellwood the issue of the construction of a cane railway through the subject property. Mr Ellwood's recollection was that the main focus of the discussion related to the construction of a bridge towards the north-western corner of the subject land, the discussion about that topic leading to an agreement as to the location of the bridge. Mr Ellwood recalls that the respondent's representative did not reveal plans of any proposed location of the railway, however he recalls proposing a 1 Pursuant to s.67(5) and (6). 2 The predecessors of the respondent. -- 3 of 19 -- 4 location along the north-eastern and eastern boundary of the subject property tracking close to Jukes Creek. The respondent did not adopt that line, but chose a route that cut through the subject land creating a sizeable severance in the north-east of the land. It is that location of the railway, which in Mr Ellwood's opinion, causes some of the problems of which the applicants complain. [7] Mr Langham said that during the 1970's the process for obtaining a cane railway was for the growers in the area to approach the mill to which they wanted to cart their cane. As a result of that process the railway located on the Ellwood's property was constructed, becoming known as the Narpi Railway. Mr Langham said that the minutes of Board Meetings did not reveal any disputes as to the location of the railway from any affected landowners, however it was not put to Mr Ellwood that his concern about the location of the railway was not expressed to a mill representative. [8] Mr Langham said that it was not a common practice during the 1970's for Mackay Sugar to record in writing negotiations held with landowners nor any agreed arrangements. Present employees of Mackay Sugar were not involved in those negotiations. There is therefore no evidence of any agreement between the Elwood's and the Mill regarding the construction of the railway. The railway was constructed in 1976 and has been in use since then providing for the delivery of cane from farms to the respondent's mill. It was not a practice at the time for compensation or consideration to be sought, or for easements to be arranged. [9] There was no evidence of the applicants having resisted the construction of the railway. The clearest construction that I can place on the evidence is that there was acquiescence or perhaps tolerance on the applicants' part as to its construction, though Mr Ellwood maintained the view that the line could have been better located. The applicants' attitude may have been influenced, amongst other things, by the fact that harvested cane from another property they own nearby could be transported on the line through the subject land. Cane from the subject itself has to be transported by tractor to Narpi 5 dump point to the south of the subject. My understanding of the state of play between the parties gains support in the contents of a letter from the respondent to solicitors for the applicants on 18 May 2000 part of which says: "… Mackay Sugar has been progressively negotiating the signing of easement documents with landowners throughout our canegrowing area in an effort to 'tidy up' and formalise what has been, in the main, an informal arrangement under the consent of the landowners for number of years. … -- 4 of 19 -- 5 Mackay Sugar is not offering compensation for the signing of these easements as it is seen as a process of formalising an arrangement which has been in place for many years, and involves cane railway infrastructure and sidings provided by Mackay Sugar from which the landowners, along with other growers, have benefited. In this particular case, the cane railway line was constructed in 1976 and the particulars of the negotiations which landowners and any arrangement reached are difficult to determine as our present staff were not involved. it can only be assumed that some agreed position was reached to allow the construction on the line to go ahead, even though formal easements were never finalised." [10] That understanding of the nature of the arrangement regarding the 1976 construction of the railway was not challenged by the applicants at that time nor before me. Indeed it is consistent with the position that the applicants took in their submission to the Commissioner: "The Landholder does not suggest that an easement should not be granted rather seeks that appropriate terms and conditions of that easement (and compensation) be addressed." Furthermore, there was no evidence from the applicants that the respondent was not permitted to construct the railway in 1976, nor any submission that the construction amounted to a trespass. Indeed, if there was a trespass any action and remedy in that respect would not fall within the jurisdiction of this Court. [11] Mr Langham said that fresh negotiations had occurred with the applicants during 2000. The respondent had indicated as part of those negotiations a willingness to undertake certain works in return for the applicants granting an easement to the respondent. At that time Mackay Sugar was not offering compensation to landowners and, as a result of that, the negotiations faltered. [12] Prior to the grant of the easement in June 2006 the respondent had, on 21 July 2005, offered monetary compensation to the applicants together with an offer of works similar in most respects to those the subject of the negotiations in 2000. By that time the respondent had decided to offer monetary compensation and adopted a standard amount of $7,000 per hectare in that respect. That amount was considered insufficient by the applicants who rejected the offer, though I notice that the list of works which were part of the proposal by the respondent in due course became conditions of the easement granted by the Commissioner. [13] Compensation has been claimed under various heads: "(A) Compensation for the area taken (i) The area of land taken by the easement is 7,644 m² as determined by a plan of survey. (ii) The value of the land taken by the easement is calculated as $10,000.00 per hectare x 0.7644 = $7,644.00 -- 5 of 19 -- 6 (B) Compensation for past affected farming practices (i) The Applicants have lost an area of their land which would have been used for sugar cane production and has had its methods of growing and harvesting interrupted by the cane railway. (ii) The area lost to sugar cane production is a total of 2.72 hectares. (iii) The compensation for this loss of production and interruption to the methods of planting, cultivating, spraying, fertilising and harvesting for a period of 30 years, 1976 – 2006, is calculated as $18,240. (C) Compensation for future affected farming practices The area which the Applicant has lost to the cane railway which could have been used for sugar cane production and the interruption to the Applicant's methods of growing and harvesting caused by the cane railway and its location shall continue from 2006 into the future. This was also calculated at $608 per year for the period the applicant's foresee that they will continue farming i.e. 12.7 years x $608 discounted at 5% = $5,542.15 (D) Compensation for damage to farming equipment (i) Due to the Respondent's flawed method of construction of drainage, interrupting the natural flow of ground water, under the cane railway the Respondent caused to be placed loose large rock on the northern side of the batter of its cane railway, within the easement area, to slow the flow of water to prevent scouring. The Respondent, due to their failure to maintain, whether by slashing or poisoning, the easement area or tidy up the large loose rock has caused the Applicant's tractor to be damaged. (E) Compensation for diminution in value of the land (i) When the applicant acquired the land prior to 1976 the cane railway did not exist whether on the land or any adjoining land. (ii) The cane railway has a detrimental effect on the land as the cane railway bisects the land causing:- (a) A loss of land area available for cane production; (b) Interruption to recommended farming practices' (c) Limited crossing points' (d) Interruption to the natural flow of ground water' (e) A more dangerous work environment due to:- (1) The presence of locomotives and bins which traverse the cane railway approximately 8 times per day during the can crushing season; (2) The cane railway, its ballast rock, and large loose rock being an attraction and environment for dangerous snakes including Taipans; (3) Ponding of water in areas scoured by water flow. (iii) The reduction in value is calculated as the area of (2.72 hectares – 0.7644 hectares) x $10,000.00 = $19,556.00 (F) Compensation for legal costs incurred '15 The Millowner shall pay all costs, charges and expenses of and incidental to the preparation, execution, stamping and registration of the Easement, and of any plan or survey required for it.' -- 6 of 19 -- 7 (G) Removal of Rock from Headland And Access Roads (i) Due to the Respondent's method of construction of cane railway the Applicant has been required to remove rocks from a headland to make a drain to alleviate the interrupted flow of ground water and repair the access way/unformed roads into the cane paddocks which had no proper access by the spreading of gravel to from an appropriate access for farm machinery. The cost incurred for these works are:- (a) Removal of rocks from headland and construction of drain:- hire of 30 tonne excavator for 15.5 hours at $90.00 per hour = $1,395.00; and (b) Repair to access way/unformed roads to the cane paddock:- 5 loads of gravel including spreading $475.00 (H) Interest (i) The Applicant's claim interest on the compensation until the monies are paid." [14] I notice that the easement provides for the respondent to carry out works designed to address the remediable physical effects of the railway on the applicants' retained land. The easement relevantly provides: "[2] The Millowner shall promptly reinstate any damage caused by the Millowner, or the Millowner's servants, contractors or other authorised persons in the course of gaining access to or carrying out works on the Easement Land. [9] The Millowner shall keep the Easement Land free of noxious weeds and undergrowth. [10] The Millowner shall, after consultation with the Landowner, carry out such drainage works and construct or place such culverts or pipes or drains under or around any tramline, railway line or siding constructed on the Easement Land as is reasonably necessary to rectify any detrimental effect upon the efficient drainage of the Easement Land. The Millowner shall, prior to 20 June 2007, carry out all such construction and other work as was proposed by the Millowner at the hearing by the Sugar Industry Commissioner held in Mackay on 23 May 2006. If the Millowner and the Landholder disagree as to what was verbally proposed, either party may apply to the Sugar Industry Commissioner prior to 20 June 2007 for the Commissioner to impose specific condition(s) relating to such work. This Condition shall apply to any work carried out by or on behalf of the Millowner on or around any such tramline, railway line or siding subsequent to the grant of the Easement. Future maintenance of such drainage works, culverts, pipes or drains shall be the Millowner's responsibility. [11] The Millowner shall construct such vehicle and machinery crossings over the cane tramline, railway line or siding constructed or to be constructed as are reasonably necessary for the efficient and reasonable use of the Landholder's land. Future maintenance of such vehicle and machinery crossings shall be the Millowner's property. [12]The Millowner shall ensure that all ballast is retained and remains on the Easement Land. In the event that ballast is washed or otherwise deposited from the Easement -- 7 of 19 -- 8 Land onto other land the Millowner shall, to the extent that it is reasonably practicable to do so, remove such ballast." Compliance with these terms will address many of the applicants' concerns into the future. Mr Langham said that the material needed for the drainage works was in place at the date of hearing on 15 May 2007 with the intention that the works be undertaken in the immediate future, subject to weather conditions. [15] Before addressing the evidence relating to the various heads of compensation I need to come to grips with the nature of the jurisdiction I am called upon to exercise. That jurisdiction is provided in s.68(3) which says that this Court "may decide the amount" of compensation. No other express guidance is provided. Nevertheless, s 68 provides some clues as to the nature of the jurisdiction. Section 68(1) speaks of a landholder "whose land is affected". Section 68(2)(b) and (4) provides for a valuer to decide the amount of compensation in the circumstances described therein. The term "valuer" is not defined in the Act, however would in common parlance be understood as referring to someone who estimates the worth or value of property.3 Where a valuer is required to decide compensation with respect to land that is "affected" by the grant of an access right, it is clear to me that the type of valuer in question is a "registered valuer" under the Valuers Registration Act 1992. That is, it is one who values land. That understanding is reinforced by the granting of jurisdiction to the Land Court to decide compensation – a Court whose exercise of similar jurisdictions such as those granted by the Acquisition of Land Act (1967) would have been well known to Parliament. [16] It seems clear then that compensation contemplated by s.68 relates to the land that is "affected" and not to other possible complaints such as personal suffering of the landholder in relation to the grant of the easement, or to torts of the mill owner or its employees. The language of s.68(1) which indicates that the need for a cause and effect between the grant of "an access right" and the "land (which) is affected" not only reinforces that understanding, but introduces the notion of there being a relevant date from which compensation is to be assessed. That is, if the effect on the land by the grant of an access right is to be the basis of compensation then it is the effect which arises on the day of grant, viewed prospectively. It would be illogical to construe s.68(1) as, for example, permitting compensation to be assessed having regard to events that took place prior to the grant of the access right. Such events could not have been caused by the grant of the easement. That understanding becomes relevant to my consideration of some of the heads of compensation discussed below. My 3 See for example 49 Halsbury's Laws (4th edition) paras 1, 6, and Macquarie Dictionary second edition. -- 8 of 19 -- 9 understanding of the nature of the jurisdiction which I need to exercise is reinforced by the consideration of some authorities which deal with the issue of compensation. I now turn to those authorities. [17] The term "compensation" is one to which the High Court has given attention in Nelungaloo Proprietary Limited v The Commonwealth & Ors4 a case concerning the acquisition of wheat by the Commonwealth. I take the following quotation from the judgment of Dixon J (as he then was) at 571: "Now 'compensation' is a very well understood expression. It is true that its meaning has been developed in relation to the compulsory acquisition of land. But the purpose of compensation is the same, whether the property taken is real or personal. It is to place in the hands of the owner expropriated the full money equivalent of the thing of which he has been deprived. Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. …" [18] In the present case the grant of rights to the respondent by way of the cane railway easement constitutes an encumbrance on an otherwise clear title and therefore brings about a deprivation in or an exercise of the rights previously enjoyed by the applicants in their land. It is that deprivation which triggered the right to compensation and, as is described by his Honour, the character of that compensation. [19] Prior to the enactment of the Sugar Industry Act 1999 the similarly named Act of 1991 provided: "11.6 Compensation. (1) Where the Corporation grants an easement under section 11.2, any person who, if the mill owner in question were empowered to take and took the easement as a constructing authority under the Acquisition of Land Act 1967-1988, would be entitled to claim compensation, may claim compensation in respect of the easement. (2) For the purposes of the claim for compensation, the provisions of Part IV of the Acquisition of Land Act 1967 – 1988 apply as if a reference to a constructing authority were a reference to the mill owner." Part IV of the Acquisition of Land Act 1967 contains sections 18 to 35 and deals with compensation. Section 20 relevantly provides: "Assessment of compensation (1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage (if any) caused by either or both of the following, namely – (a) the severing of the land taken from other land of the claimant; (b) the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land. 4 (1947) 75 CLR 495. -- 9 of 19 -- 10 (2) Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken." [20] It was suggested by the respondent that s.20 may provide useful guidance in the matter before me. As the legislature has seen fit to remove the reference to the Acquisition of Land Act provisions from the Sugar Industry Act and to replace that with the language now found in s.68, it would seem inappropriate that I simply disregard that initiative and treat it as not having occurred. [21] The respondent also referred me to the schedule to the Acquisition of Land Act which for the purpose of s.5, sets out the purposes for which land may be taken under the Act. The relevant closing words of para (a) of that schedule say: "… and also for the construction or erection of any public or other works which the constructing authority is authorised by any Act or resolution of Parliament to construct or erect or for the purposes of any Act;" [22] I do not think that to be relevant in the present case. It is referrable to a power to take land, whereas there is no evidence that the respondent here has such power. Indeed, it is not a "constructing authority" which is defined in s.2 of the Acquisition of Land Act as: "constructing authority means – (a) the State; or (b) a local government; or (c) a person authorised by an Act to take land for any purpose." [23] Having said that, I should state my view that s.20 of the Acquisition of Land Act appears to do little more than codify the types of loss in land value that might be encountered if one were to assess compensation for the taking or compulsory grant of an easement applying the guidance Dixon J provided in Nelungaloo. That is, compensation could arise from the practical loss of the land over which the easement tracks and severance caused by the breaking of the land into separate parts leading to operational difficulties.5 There is no "exercise of any statutory powers"6 in the present case as one finds in s.20(1)(b), but the exercise of the rights granted by the easement to the respondent could injuriously affect retained land which the easement traverses. [24] The Property Law Act 1974 in s.180 provides for the "imposition of statutory rights of user in respect of land". Such a right of user "may take the form of an easement, licence or otherwise"7 so, to that extent, there is some similarity to the power exercised by the Commissioner under the Sugar Industry Act in granting the railway easement over the 5 see Gold Coast City Council v Suntown Pty Ltd (1979) 6 QLCR 196. 6 see Marshall v Director General, Department of Transport (2001) 205 CLR 603. 7 s.180(2). -- 10 of 19 -- 11 subject land. Another similarity can be found in the provision in s.180(4)(a) for the assessment of compensation: "(4) An order under this section (including an order under this subsection) – (a) shall, except in special circumstances, include provision for payment by the applicant to such person or persons as may be specified in the order of such amount by way of compensation or consideration as in the circumstances appears to the Court to be just;" [25] That provision is similar to s.68 in that neither provision is prescriptive as to the manner of assessment of compensation. In such circumstances re: Seaforth Land Sales Pty Ltd's Land (No. 2)8 is of particular interest as it deals with the issue of compensation under s.180(4)(a). At 334 D M Campbell J referred to Nelungaloo then said: "… at p.571, Dixon J said that the purpose of compensation was to 'place in the hands of the owner the full money equivalent of the thing of which he has been deprived'. In Dixon v Calcraft [1892] 1 QB 459, at p. 463, Lord Esher M.R. said that the expression 'is not ordinarily used as an equivalent for damages'. Dealing with the compensation payable by an electric authority for the taking of easements for electric line purposes under the Acquisition of Land Act1967-1969, the Land Appeal Court said in Joyce v The Northern Electric Authority of Queensland (1974) 1 Q.C.L.L.R. 171, at p.177: 'The principle to be applied in the compulsory taking of an easement are [sic] no differently applied when the full fee-simple is taken. This Court must restore, as best it may, the claimant in money form to the position which he enjoyed prior to the taking of the easement. For practical purposes it becomes a matter of assessing the extent to which he has been disadvantaged as the natural and reasonable consequence of the taking of the easement.' " [26] His Honour then went on say that the words in s.180(4)(a) "… as in the circumstances appears to the Court to be just" made it plain: "… that the legislature intended that all the circumstances should be taken into account in arriving at the compensation or consideration, and not merely the diminution in value of the land. One circumstance is, of course, how the situation has come about to cause an application to be made under the section. …" [27] There is therefore no complete comparison between s.180(4)(a) and compensation for the compulsory acquisition of land by public authorities. Nevertheless, putting aside those additional words in s.180(4)(a) it is clear that the approach to compensation described in Joyce was considered appropriate for assessing compensation under that provision. Additional words of the type referred to in that provision are not found in s.68 of the Sugar Industry Act, thus the description provided in Joyce would appear to be appropriate to employ. It reflects my understanding of the nature of the jurisdiction provided by s.68. [28] Another difference to be noted between s.68 and s.180(4)(a) is that in the latter provision there is reference to "compensation or consideration". In Lang Parade Pty 8 [1977] QdR 317. -- 11 of 19 -- 12 Ltd v Peluso & Ors9 Douglas J considered the inclusion of the word "consideration", concluding in [29] to [33] that it did not erode or embellish the meaning of compensation. His Honour said: "[35] A more attractive approach to the assessment of compensation or consideration may be that expressed by Cooke P in Jacobsen Holdings Ltd v Drexel [1986] 1 N.Z.L.R. 324, 324-329 where his Honour referred to the assessment of compensation by saying that it was the price that 'willing parties would arrive at in friendly negotiation that has to be found, on such materials as are available,' recognising that in many cases it might be a matter of considerable difficulty. …" [29] Mr Crow drew my attention to s.7 of the Land Court Act 2000: "7. In the exercise of its jurisdiction, the Land Court – (a) is not bound by the rules of evidence and may inform itself in the way it considers appropriate; and (b) must act according to equity, good conscience and the substantial merits of the case without regard to legal technicalities and forms or the practice of other courts." [30] This provision was recently considered by the Court of Appeal in Townsville City Council v Chief Executive, Department of Main Roads.10 For the purpose of these reasons I will summarise what I understand to be the key points of that decision:  The words "equity, good conscience and the substantial merits of the case" are not terms of art with some fixed legal meaning.11  The application of s.7 in a particular case may, having regard to "the nature of the issues involved and, where appropriate clear intendment of any statute", indicate the application of strict principles of law on the one hand or the adoption of "a broader approach of common sense".12  The inclusion of such a provision 'widens rather than restricts the discretion available to a decision maker". "It is facultative not restrictive'13  ' … the merits may not be able to trump a countervailing rule of law but they are one factor that must be taken into account when exercising a discretion.' "14 [31] In the present matter I have considered the construction of s.68 of the Sugar Industry Act and have drawn conclusions as to the nature of the jurisdiction I am called on to exercise. On the face of it s.68 provides for the assessment of compensation with respect to the effect on land of the grant of a right of access. It was submitted by Mr Crow that, having regard to s.7 of the Land Court Act and the consideration of that provision by the Court of Appeal, I should approach the construction of s.68 broadly, such that it extended to the cane railway which has been physically in place since 1976. Section 7 cannot, in my view, be relied on to modify the statutory jurisdiction being 9 [2005] QSC 112. 10 (2006) 1 QdR 77 from [37] to [45]. 11 At [38] quoting from Qantas Airways Ltd v Gubbins (1992) 28 N.S.W.L.R. 26 at 30. 12 At [39] quoting from Trittenheim Pty Ltd, Heaney & Heaney v H & H Gill Nominees Pty Ltd (1994) 64 S.A.S.R. 434 at 442. 13 At [40] and [41] quoting from Minister for Immigration & Multicultural Affairs v Eshetu (1999) 197 CLR 6 11. 14 At [43]. -- 12 of 19 -- 13 exercised. It is a provision which is relevant only to the manner of exercise of jurisdiction and nothing in the Court of Appeal's judgment in Townsville City Council indicates otherwise. [32] To the preceding discussion I would add the reasoning of the Court of Appeal in Sullivan v Oil Company of Australia Ltd (No. 2)15 where Holmes J said: "[29] The respondents argued for an expansive approach to the construction of s 99(1)(e), sufficiently wide to include injurious affection. Such an approach would, it was submitted, accord with what was said by McHugh J in Marshall v Director General Department of Transport (2001) 201 CLR 603 at 627: 'legislation dealing with the compensation ... in respect of the compulsory acquisition of land ... should be construed with the presumption that the legislature intended the claimant to be liberally compensated'. [30] The statutory provisions in this case are rather different from those under consideration in Marshall. There the question was as to the extent of the circumstances in which an expressly conferred right of compensation for injurious affection arose. Here the Act contains no mention of injurious affection. What is sought is the implication of a very significant right of compensation, embraced, in effect as an afterthought, in the expression 'all consequential damages'. Although one starts with a presumption of liberal construction, still there must be something in the statute to support that construction. " [33] I now turn to consider the heads of claim starting with head B. This head relates to the physical imposition of the cane railway on the subject land from 1976 and relates to inefficiencies in planting, cultivating, spraying, fertilising and slashing in the cropped area. [34] I need not comment on the method of assessment of compensation as I find the claim to be unsustainable, as not being an effect of the grant of the easement. There was, prior to the grant of easement in June 2006, a railway in place on the subject land. It was that railway, not the easement which was created in 2006, which generated the inefficiencies complained of. In the words of Joyce, the disadvantages are not "the natural and reasonable consequence of the (granting) of the easement". [35] In Denar Pty Ltd v Mackay Sugar Co-operative Association Ltd16 there was a cane railway easement through the relevant land, such easement owing its existence to a series of statutory declarations.17 Associated with that railway were two sidings and an access road which did not owe their existence to any easement or other legal interest in land. In due course the Commissioner granted three easements over the land to encompass those three improvements – the matter before the Court relating to the compensation flowing from the grant of those easements. 15 (2003) 2 QdR 105. 16 (2002) 23 QLCR 114. 17 At 117. -- 13 of 19 -- 14 [36] The claimant had approached the question of value on the basis that the value of the land before the granting of the easements should be ascertained on the assumption that the two sidings and the access road did not exist.18 The learned President of the Land Court did not accept that approach as being valid and proceeded on the basis of the physical existence of the sidings and access road before the granting of the easements as being relevant to the before value of the land.19 [37] Whilst Denar was based on s.11.6 of the Sugar Industry Act 1991 there is no difference in principle that I am aware of that requires me not to follow that decision on this point. I raised with counsel the question as to whether the so-called Pointe Gourde principle in reverse might apply to the present case such that the conclusion I have just stated should not apply. [38] Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands (Trinidad)20 is authority for the proposition that the value of the resumed land may not, for compensation purposes, be increased having regard to any enhancement resulting from the scheme of which the resumption is part. In Melwood Units Pty Ltd v. Commissioner of Main Roads21 the Privy Council said in reference to the Pointe Gourde principle: "In their Lordship's opinion it is part of the common law deriving as a matter of principle from the nature of compensation for resumption or compulsory acquisition, that neither relevantly attributable appreciation nor depreciation in value is to be regarded in the assessment of land compensation." (at 153)" [39] Neither Mr Hinson SC nor Mr Crow was able to provide me with submissions as to whether the principle discussed above was applicable in the present circumstances. Without the benefit of submissions I am loathe to depart from the approach of the learned President in Denar. Apart from that, the evidence before me is that the existence, if not the exact location of the railway on the applicant's land, was accepted by the applicants. It was an arrangement that could have continued indefinitely, there being no evidence that the applicants expected the railway to be moved or relocated. The grant of the easement was for the protection of the respondent's interest and to impose obligations on the respondent for the benefit of the applicants. [40] It follows from the above reasoning that I do not allow head of claim B. Head of claim C suffers similarly and it also proceeds on the assumption that the railway was not in 18 At 122. 19 At 131 and 133. 20 [1947] AC 565. 21 (1978) 5 QLCR 145. -- 14 of 19 -- 15 place prior to the relevant date of 20 June 2006. I disallow that head of claim. I now come to head of claim D. [41] The evidence was that the respondent had placed rocks on the applicants' land in order to slow the run-off of water and to therefore ameliorate erosion. One large rock in these works became overgrown by vegetation in due course, and in April 2006, the applicants' tractor came into contact with that rock and was damaged. The applicants claim the cost of repairs though there was no documentary proof of the claim in the form of invoices or receipts. In any event, this is a loss that precedes the grant of the easement so cannot be said to be the natural and reasonable consequence of that grant. That head of claim is therefore disallowed as is head of claim G which is similarly dependent on the construction and existence of the railway line. Apart from that there is no evidence as to the time at which the works referred to in head of claim G were undertaken nor any evidence that records were maintained as to the hire of the excavator or the cost of gravel. That is, this head of claim also fails for want of proof. [42] Head of claim F relates to legal costs. The claim as it appeared in the originating application was modified to the following: Period Amount 20 April 2005 to 23 June 2006 $5,404.40 26 June 2006 to 28 August 2006 $2,008.31 28 August 2006 to 15 May 2007 $16,777.30 [43] The respondent admitted the amount claimed of $2,008.31 and I accept that as being appropriate. For convenience I will round this up to $2,009.00. The last mentioned amount relates to the period following the filing of the originating application in the Court. That is, it relates to the commencement of the litigation seeking determination of compensation by this Court. Such costs are therefore not costs associated with the preparation of the claim for compensation as in the case of the amount admitted by the respondent, but are costs in the cause. Such costs are not therefore appropriately the subject of an order for compensation. They may, subject to any application, be considered following the making of an order relating to the substantive application for compensation. [44] The first mentioned amount is for the period up to the day after the hearing of the application for the grant of an easement by the Commissioner. That application was made on 7 April 2006. Mr Ellwood's participation in the Commissioner's hearing appears to have been for the purpose of moulding the terms of the easement in order that the physical impact of the railway such as in inhibiting water flow and the movement of -- 15 of 19 -- 16 machinery, would be addressed by the respondent. The inclusion of the conditions referred to at [14] were apparently designed for that purpose. There is no provision in the Sugar Industry Act for costs of proceedings before the Commissioner. The power to grant costs is, of course, a power that must be referrable to statute and it would be inappropriate for me to, in effect, order costs for proceedings in which the Commissioner had no such power. Apart from that the costs incurred in the hearing of the application before the Commissioner are not costs which resulted from the grant of the easement by the Commissioner. They are not therefore part of the compensation contemplated by s.68 of the Sugar Industry Act. [45] I will now turn to head of claim A. There is no dispute as to the area contained within the easement, the difference between the parties being confined to the value per hectare which should apply to the land. Mr Ellwood said that the claimed figure of $10,000 per hectare was not a purported value but was simply the amount claimed. Having said that he said that he considered such a figure to be supported by a sale which appeared in exhibit 6, a valuation report prepared for the respondent but in respect of which the author was not called. [46] In that exhibit there were seven sales included, the sale referred to by Mr Ellwood being sale 1 in that group and which revealed a price inclusive of stools of $13,333 per hectare. The author of exhibit 6 recorded an opinion that the market value of the subject property inclusive of stools was $9,500 per hectare for the cultivation component and exclusive of stools was $8,750 per hectare. It might be useful in the present context for me to refer again to the figure of $7,000 per hectare referred to by Mr Langham as being the figure generally offered by the respondent to landowners during 2005. [47] In short, I am bereft of evidence of value that has been justified by expert evidence and tested by cross-examination. I do know, however, that based on what appears in exhibit 6 the applicant could have accepted a valuation figure of $8,750 per hectare. I am also judicially aware that professional valuers will usually accept that the figure identified by them is generally subject to a range or error allowance of up to 10%. I could therefore foresee in open and informed negotiations, and bearing in mind that valuers often use rounded figures, that the parties could have settled at a figure of about $9,500 per hectare or a slightly higher figure. [48] With that figure in mind I should mention Mr Crow's submission that the question of the rate of value of the subject land was not raised by the respondent as being an issue in dispute between the parties during pre-trial procedures. I accept that the respondent did contest the issue of the quantum of compensation based on its view that the existence of -- 16 of 19 -- 17 the railway before the grant of the easement needed to be taken into account. However, I do not understand the respondent in the statement of issues to have challenged the rate of $10,000 per hectare as being an unaffected value of the subject cane land. In addition, the respondent informed the applicants and the Court that it did not intend calling the author of exhibit 6, though it did provide that document to the applicants as part of its disclosure obligations. The applicants could well have been lulled into thinking, until cross-examination of Mr Ellwood was underway and exhibit 6 was tendered, that there was no issue in relation to the rate per hectare of land value. In the circumstances I think it appropriate that I determine land value at $10,000 per hectare, not because there is expert evidence which supports that figure, but because on my reasoning a $9,500 per hectare rate could have found support in negotiations and because the figure of $10,000 was not notified as an issue in dispute and is reasonably proximate to $9,5000 per hectare. I also bear in mind the need to resolve doubt "in favour of a more liberal estimate".22 Apart from that, it is a figure that is not obviously out of line with sale 1 which I have mentioned above. There was no submission from the respondent that the rate of $10,000 per hectare was patently wrong. On the basis of that reasoning and applying the rate for the area of the easement, the head of claim A is allowed in the amount of $7,644. [49] This brings me to head of claim E, an item that appears to relate to matters of severance and injurious affection arising partly from the physical existence of the railway and partly from the imposition of the easement. [50] Senior counsel for the respondent referred me to Rogerson v The Minister.23 In that case there was a sewer main running through the relevant land and, in due course, the Minister resumed an easement along the part of the land where the sewer main passed. The Court was asked to determine compensation flowing from the taking of the easement. Hardy J found that the value of the land, on the basis that it was sewered but without the sewer main or an easement, was $11,000. On the basis that it was affected by both the sewer main and the easement it had a value of $8,000, in his opinion. His Honour concluded that the depreciation in value of $3,000 should be ascribed as to two thirds to the existence of the sewer main and one third to the easement. Compensation was therefore determined in the amount of $1,000 being that which flowed from the taking of the easement. 22 Commissioner of Succession Duties (SA) V Executor Trustee & Agency Co of SA Ltd (1947) 74 CLR 358 at 374. 23 (1968) 16 LGRA 400 -- 17 of 19 -- 18 [51] Having regard to the reasoning in Rogerson, which I find helpful, I have reviewed the grant of easement in the present matter and noted its terms including the works to be undertaken by the respondent and the intrusions that would result into the land of the applicants. I have also had regard to the fact that the easement will now appear on the title to the land and that, whatever the fate of the railway might have been before the granting of the easement, it is now quite clear that the applicants have no choice at all as to whether to accept the railway traversing their land. Similar reasoning is found in Denar at 113. [52] It seems that the parties are at one as to the effected area of diminution in value being 2.72 hectares minus 0.7644 hectares equals 1.9556 hectares. The calculation of the area affected under this head of claim related mainly to Mr Ellwood's measurement of the headland area abutting each side of the railway. The physical loss of headland area to cane and the other physical effects of the railway have been in place for many years. Based on my earlier reasoning and consistent with the reasoning in Rogerson I propose therefore to allow compensation with respect to the imposition of the easement only. The evidence I have from the applicants suggests that the combined effect of the physical railway and the easement totally destroys the value of the affected area. I do not accept that this area would have a nil value, but agree that the diminution in value from both sources would be substantial. Doing the best I can I will adopt a total diminution figure of 80%; that is $8,000 per hectare. Mr Hinson SC suggested that having regard to the reasoning in Rogerson and to the facts in the present case, any depreciation in value of the retained land could be apportioned on a 50/50 basis with half being applied to the presence of the cane railway and half to the creation of the easement. My judgment is that this a suggestion founded in generosity and it is one that I will adopt. Accordingly, for the head of claim E I will allow compensation for 1.9556 hectares at $4,000 per hectare, totalling $7,822. [53] At one stage the respondent appeared to advance a case that the subject land and/or other land owned by the applicants benefited from the railway and that this was relevant to compensation. This proposition was not pressed home in submissions. I need to make clear that I have not offset any compensation figure on the basis of betterment. [54] The applicants seek interest on compensation decided by me. The purpose of ordering the payment of interest is to compensate the landowner for not having the use and benefit of the money or the asset it replaces. There is no provision for the payment of interest in the Sugar Industry Act, however there is no requirement for an express power -- 18 of 19 -- 19 to found the jurisdiction to order interest. Dixon J (as he then was) said in Marine Board of Launceston v Minister of State for the Navy24 "The difference, I think, is quite clear between the sum awarded or assessed as compensation as at the date of acquisition for loss of property and a sum awarded for interest or compensation because the acquisition deprived the claimant of the profitable occupation or use of the property without any immediate recoupment of capital in money. But, where a legislative instrument empowers a court or tribunal to deal with the question of compensation, it is a question of interpretation whether its jurisdiction is extensive enough to cover incidental matters and so to enable the court or tribunal to order that interest shall be paid on the compensation assessed and awarded, where according to legal or equitable principles it is payable." [55] It seems to me that s.68 of the Sugar Industry Act not only fails to exclude the payment of interest, but implicitly includes it in the use of the term "compensation". Accordingly, I will order the payment of interest with the rate of interest being based on the assumption of a secure, conservative investment. I was not provided with the date of payment by the applicants of the legal expenses which I have held are compensable. I will therefore adopt a median date of 27 July 2006 as being the date of payment on the assumption that the expenses were paid during the period identified in the amended claim. Order 1. I order that the respondent pay to the applicants compensation in the amount of $17,475.00. 2. I order that interest be paid by the respondent to the applicants on the amount of $15,466.00 from 20 June 2006 and on the amount of $2,009.00 from 27 July 2006 each at a rate of 5.75 per centum per annum up to and including the day immediately preceding the day of payment. RP SCOTT MEMBER OF THE LAND COURT 24 (1945) 70 CLR 518 at 532 – 533. -- 19 of 19 --