Cox v Water Resources Commission & Anor [1995] QLC 68 (1996-1997) 16 QLCR 266

LAND COURT BRISBANE 9 August 1995 Re: Claims for Compensation Resumption for Burdekin River Irrigation Project Acquisition of Land Act 1967 Water Resources Act 1989 (A91-49, A91-50, A91-51, A91-52, A92-49, A93-43). Vivian Henry Cox v. Water Resources Commission Geoffrey Alexander Cox v. The Commissioner of Water Resources and Water Resources Commission DECISION ON PAYMENT OF INTEREST The Land Resumed from Claimant Mr Vivian Henry Cox (A91-50, A91-51, A91-52, A92-49) Four parcels of the claimant's land with a combined area of 3,705.274 hectares were resumed for purposes of the Burdekin River Irrigation Project. The land was resumed on the following dates: Lot 46 on Plan GS6, Parish of Jarvisfield, area 1092.854 hectares, resumed 5 May 1990; Lot 47 on Plan GS36, Parish of Jarvisfield, area 2327.221 hectares, resumed 5 May 1990; Lot 4 on Plan GL12472, Parish of Northcote, area 78.91 hectares, resumed 22 September 1990; Lot 87 on Plan GL12483, Parish of Jarvisfield, area 206.289 hectares, resumed 27 April 1991. Total area 3705.274 hectares. Despite the different dates of resumption, both parties agreed that for the purpose of calculating any interest that may be ordered to be paid, the period should commence on 5 May 1990, the date that 3,420.075 hectares of the land was resumed. Claims for compensation in respect of Lot 46, Lot 47 and Lot 4 were dated 23 October 1991, and in respect of Lot 87 dated 17 November 1992. The combined claim [1995] QLC 68 -- 1 of 10 -- 2 totalled $6,303,950. On 29 June 1992, an advance against compensation of $1,305,979 was made by the respondent and on 6 January 1993, a further advance of $107,000 was made. On 16 February 1994, during the hearing of the matter, the combined claim was amended to $10,398,000. The amount finally put in evidence by the respondent was $1,908,834, exclusive of the sum of $2,000 agreed for legal fees. On 17 July 1995, compensation was determined at $4,960,400. Mr Cooke Q.C., Senior Counsel for the respondent, submits that it is well established that unreasonable delay in prosecuting a claim may deprive a claimant of an award of interest for part of the period from resumption to payment. He contends that in determining the period during which interest should be paid, the following matters should be taken into account: •The long delay between the date of resumption of the major parcels (5 May 1990) and the date of lodgment of the claim (23 October 1991), a period of one year and five months. •The claim was lodged only after the respondent had referred the matter to the Land Court under the provisions of s.24 of the Acquisition of Land Act 1967 and the issuing of an order under the provisions of s.25 of that Act. •The delay of almost three years between the date of lodgment of the claim to the date the matter first came before the Court; •The adjournments sought and obtained by the claimant because the claimant had not prepared his case. Mr Needham, Counsel for the claimant, argues that, subject to the exercise of the Court's discretion under s.28 of the Acquisition of Land Act 1967, a dispossessed landowner has a prima facie right to interest upon the award of compensation from the date of resumption through to the final date of payment of compensation, taking into account the payment of any advance. He submits that the matter was a complex one and in the circumstances, there was no unreasonable delay in lodging the claims for compensation or in bringing the matter to Court. Because of the ongoing negotiations with the constructing authority and various Government Ministers in respect of a number of issues, including what land was to be resumed, what resumptions would proceed or be rescinded, entitlements to retention farms, water entitlements and their costs, whether any part of the Davco project could be continued and whether the land could be developed privately instead of being resumed, any delays could not be considered to be unreasonable. In addition, much of the expert evidence could be prepared only after information was obtained from the respondent and despite earlier attempts, this was only obtained by subpoena on 20 September 1993. The Practice of the Land Court to Order that Interest be Paid -- 2 of 10 -- 3 The power of this Court to order the payment of interest is contained in s.28 of the Acquisition of Land Act 1967, which provides: "(1) Subject to sub-section (2) of this section, in respect of the period or any part of the period commenced on and including the date on and from which any land is taken and ending on and including the day immediately preceding the date upon which payment of compensation is made the Land Court or, upon appeal, the Land Appeal Court may order that interest be paid upon the amount of compensation determined by it. Such interest shall be at such rate per centum per annum as the Land Court or, upon appeal, the Land Appeal Court, deeming reasonable, fixes by the order. Interest so ordered to be paid shall be payable as if it were part of the compensation in question and shall be added to the amount thereof and be payable by the constructing authority accordingly. (2) Interest shall not be payable in respect of any amount of compensation advanced under section twenty-three of this Act. " It has long been the practice of this Court to order that interest be paid on compensation as from the date of resumption by the constructing authority until the compensation has been paid. The Land Appeal Court discussed the matter of interest in I Small & Anor v. Brisbane City Council (1968) 35 CLLR 239. In that case the Court referred to the reasoning of the Privy Council in Inglewood Pulp and Paper Co v. New Brunswick Electric Power Commission [1928] AC 492, which was quoted by Dixon J of the High Court in Marine Board of Launceston v. Minister of State for the Navy (1945) 70 CLR 518 at p.532. In the Inglewood Pulp and Paper case, the Privy Council referred to the well established practice requiring the purchaser on a contract for sale and purchase of land to pay interest on his purchase money from the date when he took possession. Lord Warrington, for the Privy Council, went on to say that the law on the point had been extended to cases under the Lands Clauses Consolidation Act, 1845, where the owner was deprived of his property. His Lordship said at p.499, "The right to receive interest takes the place of the right to retain possession and is within the rule. " The Land Appeal Court went on to say at p.248 of Small's case: "We think it would be most unfair and contrary to equitable principles to deny a dispossessed owner interest on his compensation monies in cases where he has lost possession of his property, its enjoyment and/or productivity. To deny interest is to deny him the earning power of the money into which the law provides his interest in the resumed land is ultimately to be converted. It would be a normal incidence of bargaining in the business and commercial world for a purchaser to pay interest on outstanding purchase money after he had obtained possession of the land the subject of his purchase and we fail to see why a resuming authority should be -- 3 of 10 -- 4 placed in a more favourable position than a hypothetical prudent purchaser. " Therefore, it is well established that generally a dispossessed owner is entitled to be paid interest on compensation awarded from the date of resumption to the date of payment of the compensation. However, in the exercise of its discretion to order the payment of interest, the Court has made at least two exceptions: •Where there has been unreasonable delay in lodging the claim for compensation and/or in pursuing that claim; and •Where a dispossessed owner remains in possession of the land. Unreasonable Delay The matter was considered in some detail by the Land Court, in Hardy v. Queensland Electricity Commission (1988-89) 12 QLCR 89 and in an unreported decision in Merchin v. The Commissioner of Main Roads on 16 June 1989. In those cases the learned Member referred to the general discretion in the Land Court to award interest under s.28 of the Acquisition of Land Act 1967. In considering the exercise of his discretion, he referred to a number of cases including the unreported decision in Star v. Council of the Shire of Inglewood, 11 October 1985, where the claim was filed in Court more than three years after the land was taken, following an order made under s.25 of the Act. In that case the Court limited interest to the period beginning on the date one year previous to the date of lodgment of the claim in Court. The learned Member also referred to the Land Appeal Court judgment in White v. Brisbane City Council (1975) 2 QLCR 359. There the Court was dealing with a claim referred by the constructing authority over eight years after the date of resumption. At p.367 the Land Appeal Court said: "The claimant himself lay by and refused to pursue his statutory rights to claim and eventually the respondent had the matter referred to the Court. In these circumstances we are of the opinion that an order that interest at the rate of 6% be paid on the amount determined for a period of three years from the date of resumption is all that is warranted in this case and this order is accordingly made. " In Hardy's case, after considering the reasoning in these judgments, the learned Member said at p.91: "The extraordinary length of time between the resumption and the filing of the claim is on the authorities a relevant consideration. I am also of the opinion the fact that the matter was finally brought to a head by the respondent is a relevant consideration... I think there is every reason in the circumstances of this case to limit the period during which interest should be paid on the award. It is reasonable to assume that a claimant be given at least twelve months from the resumption to lodge a claim and that some negotiations would take place in an endeavour to effect a settlement prior -- 4 of 10 -- 5 to the matter coming to Court. " In Merchin's case, the amount of compensation was settled by the parties soon after the lodgment of the claim. The learned Member concluded that the matter could have been finalised much sooner. At p.5 of his judgment he said: "In the circumstances I am of the opinion that interest on the agreed sum could be terminated some twelve (12) months after the date of the first communication from the Department in 1987 or 5 January 1988, being the date of the last communication prior to the matter being put into court by the respondent. " I am of the opinion that the circumstances of the present case can be distinguished from those of the cases where interest was limited because of unreasonable delay. In Hardy's case it had been held that it was reasonable that the claimant be given at least 12 months from the resumption to lodge a claim and that some negotiations would take place in an endeavour to effect the settlement prior to the matter coming to Court. Although in the present case the claim was filed following a s.25 order, one year and five months after the date of the resumption of the major areas of land, it was only 13 months after the resumption of Lot 4 and only six months after the resumption of Lot 87. It must also be remembered that it was a period during which the whole of the family's aggregation was under threat of resumption. Negotiations were held and representations were made as to retention areas, entitlements, etc. There is evidence on the record of the results of some of those actions. The resumption of David Cox's land was prevented, or at least delayed, by an injunction and the resumption of Geoffrey Cox's land was rescinded. Furthermore, after the Court made the s.25 order, the complexity of the claim was such that even the claimant's valuer, Mr Eales, could provide little assistance with the amount of the claim. Negotiations and representations no doubt continued after the lodgment of the claim and there is evidence of attempts to hold a without prejudice conference to try to settle the matter, or at least limit the issues. The day after the conference was held, the Crown Solicitor, on behalf of the respondent, requested that the Court commence hearing the matter on 22 June 1993. There is further evidence that, because of the complexity of the expert evidence, there was some delay in preparing the claimant's case for hearing. This was not assisted by the delay in obtaining information from the respondent. This information, which was essential to the claimant's case, was provided only after it was subpoenaed on 20 September 1993. In the circumstances, I have come to the conclusion that there was not undue -- 5 of 10 -- 6 delay in lodging the claim or in bringing the matter to hearing. The matter was complex and it was simply not a situation where the claimant did nothing to advance the matter. The claimant's case could be finalised only after all the statements by the numerous expert witnesses had been prepared. The record clearly indicates that there are also unexplained delays on the part of the respondent. Therefore, I am not prepared to hold that there should be a departure from the general practice of this Court to award interest on compensation monies. Occupation by the Dispossessed Owner It was only after compensation had been determined and the matter of interest was being addressed that the respondent raised the issue of occupation by the claimant of at least part of the resumed land after the date of resumption. There had previously been some evidence of occupation of part of Lot 47 as the effluent area of the feedlot for at least 12 months after the date of resumption. However, in an affidavit dated 27 July 1995, Mr RJ Walker, Senior Property Officer of the Department of Primary Industries, raised the matter of the use of part of the resumed land for the grazing of cattle. Annexures to the affidavit indicate also the use or occupation of the farm shed on Lot 47 in the vicinity of the feedlot. In an unchallenged answering affidavit Mr Geoffrey Cox, who at the relevant time had power of attorney for the claimant in these matters, states that at the respondent's request all cattle were removed from Lot 47 prior to the date of resumption. This was done to allow the respondent's contractors to commence work in the favourable season and so avoid delay. However, with the agreement of the respondent, Kalamia Plains Pastoral Company continued to use Lot 46 for grazing in conjunction with Lot 87 and Lot 4 for approximately one year after the resumption of Lot 46. Mr Cox states that this was the result of an agreement with the respondent's officers. In return for such use, the claimant agreed to forego any claims with respect to entries by the respondent and its agents prior to the resumptions and any claims with respect to disruption of cattle operations on the resumed land. It also avoided any claim with respect to loss of use of Lot 87 and Lot 4 prior to their resumption. Mr Cox also states that Kalamia Plains Pastoral Company used to run up to 700 head of cattle on the resumed land. By the date of resumption there were approximately 300 head of cattle left running on Lots 46, 87 and 4. Lots 87 and 4 were still owned by the claimant but were not separately fenced from Lot 46. The only cattle yards and main watering facilities were on Lot 46. There is also evidence that when requested to do so the claimant removed the cattle from the land in May 1991. Mr Cox states that any cattle on the resumed land after that date were strays, as gates were frequently left open and fences cut as the -- 6 of 10 -- 7 respondent's officers, contractors and others, accessed the area. It is clear that occupation by the dispossessed owner of the resumed lands has always been a relevant matter in the exercise of the Court's discretion as to the award of interest. In Small's case, the Land Appeal Court said at p.246-47: "From 1925 to the present time the practice of the Land Court and the Land Appeal Court has been to award interest on compensation monies except where the dispossessed owner has remained in possession or derived some benefit from the resumed land after date of resumption. In the latter cases the Court has refrained from granting interest or reduced the rate of interest usually awarded commensurate with the benefit derived from the land and dependent on circumstances applying in the particular case under consideration. " The Land Appeal Court also dealt with the matter in William Collin & Sons Pty Ltd v. Co-Ordinator-General of Public Works (1971) 38 CLLR 50. At p.68, the Land Appeal Court said: "As the claimant had full use of the resumed land free of all liability during the whole of the statutory period during which interest, in the discretion of the Court, may have been payable, there will be no award of interest. " The matter has been considered by the Land Court in a number of cases. In Silverton Grazing Pty Ltd v. The Commissioner of Water Resources (1980-81) 7 QLCR 197, the learned Member said at p.198: "When a dispossessed owner loses possession of his land at the date of resumption interest is usually granted by the Court from the date of resumption to the date of payment. Where the owner continues to reside on or make productive use of the resumed land after the date of resumption I have held that the owner is not entitled to an allowance for interest on compensation during the period he resides or makes productive use of the land rent and rate free but that interest should only be paid from the time he ceases to enjoy such rights. " However, in Shann v. Commissioner of Water Resources (1986-87) 11 QLCR 194, there was continued occupation of the resumed land after the date of resumption. In the circumstances of Shann's case, despite that use and occupation of the land, the Court held that such subsequent events were irrelevant. Also in Zandonadi v. The Commissioner of Water Resources in an unreported judgment delivered on 31 July 1986, the Court found against a submission that no interest should be awarded because the claimants since the date of resumption had use of the land for grazing purposes. After referring to the decision in the Silverton case, the learned Member said: "It is the submission by Counsel for the claimants that they have been deprived very substantially of the use of the resumed land since resumption. The respondent has used the lands for the purpose of carrying out the works -- 7 of 10 -- 8 upon it of constructing and fencing the channel, setting up pilot farms, traversing the land with machinery and drilling test bores. It is his submission that the Commissioner, since acquiring the land, has made the fullest use that he has wished with the land and any incidental use whether accidental or deliberate because the cattle have been upon the land should be disregarded. I am in agreement with this submission. It is clear upon the evidence that the respondents have not continued to use the land without any interference in the way it was used prior to resumption. The sheer magnitude of the work has certainly prevented this and I find no grounds to persuade me against giving an order for interest on the award." In the subject case, Counsel for the respondent, makes no submission with regard to the occupation of the effluent area or the farm shed near the feedlot on Lot 47. He raises the matter of the use of part of the resumed lands for the purpose of cattle grazing not as a separate issue, but as support for his principal argument of undue delay. In the circumstances, therefore, it is not strictly necessary to consider whether the use of part of the resumed land by the claimant's cattle constitutes such occupation of the land that it would cause this Court to depart from its usual procedure of awarding interest. However, I am of the opinion that the evidence clearly establishes that the use of part of the subject land was by agreement which was undertaken in order to mitigate against further possible claims against the respondent or its contractors. It seems clear from the attachments to the affidavits that there was no delay in the construction works on the resumed lands and that when requested to do so the claimant removed his cattle forthwith. What cattle remained on the lands were strays, possibly there because of the interference with fencing by the respondent, its officers or its contractors. Conclusion After carefully considering all the circumstances in this case, I have come to the conclusion that the delays in filing the claim and in bringing the matter to court were not unreasonable, and that the use of part of the land for the grazing of cattle after the date of resumption in no way contributed to those delays. Therefore, I find that there is nothing which would prevent me from exercising my discretion and adopting the usual procedure of this Court. It is an appropriate case where interest should be paid on the award of compensation from the date of resumption to the date of payment of compensation, making due allowance for advances that have been made. -- 8 of 10 -- 9 In accordance with the principle in Varitimos v. Queensland Electricity Commission) (1990-91) 13 QLCR 1, interest on professional fees incurred in the preparation of the claim is payable only from the date of payment of those fees by the dispossessed owner. In the present case I am informed that the legal fees agreed at $2,000 were paid on 6 July 1992. Order for the Payment of Interest I order that the respondent pay to the claimant interest at the rate of 9.75 percent per annum as follows: •On the amount of $4,958,400 from 5 May 1990 to 29 June 1992 when the first advance of $1,305,979 was paid; •on the amount of $3,652,421 from 30 June 1992 until 6 January 1993, when the second advance of $107,000 was paid; and •on the amount of $3,545,421 from 7 January 1993, until the day immediately preceding the date of payment of that sum. I further order the respondent to pay to the claimant interest at the rate of 8.75 percent per annum on the legal fees of $2,000 from 6 July 1992 until the day preceding the date of payment of that sum. The Land Resumed from Claimant Mr Geoffrey Alexander Cox (A91-49 and A93-43) Lot 4 on Plan 748503 and Lot 6 on Plan 748055, both in the Parish of Northcote, with areas of 1.173 hectares and 900 square metres respectively, were resumed by the Commissioner of Water Resources from land owned by the claimant on 29 April 1989. On 23 October 1991, the claimant lodged claims for compensation of $4,000 in respect of Lot 4 and $500 in respect of Lot 6. Then on 20 February 1992, the respondent made advances of compensation of $1,500 in respect of Lot 4 and $100 in respect of Lot 6. On 17 July 1995, compensation of $3,000 was determined in respect of Lot 4 and $500 in respect of Lot 6. Easement C in Lot 3 on Registered Plan 748055 on Plan 801634, Parish of Northcote, containing an area of 10.49 hectares was taken by the Water Resources Commission over land owned by the claimant on 4 May 1991. On 23 August 1993, the claimant lodged a claim for compensation for the taking of the easement of $1,312.50. No advance against compensation was made. On 17 July 1995, compensation of $500 was determined in respect of Easement C. These claims in respect of these relatively minor resumptions from lands owned by Mr Geoffrey Cox were heard together with the claims in respect of the resumptions -- 9 of 10 -- 1 0 from lands owned by Mr Vivian Cox. In the circumstances, there is no reason to depart from the usual practice of this Court to order the payment of interest from the date of resumption to the date of payment of compensation, making allowance for the advances that were made. Accordingly, I order that the respondent, the Commissioner of Water Resources, pay to the claimant interest at the rate of 10.25 per cent per annum as follows: •On the amount of $3,500 from 29 April 1989 to 20 February 1992 when the advances were made; •On the amount of $1,900 from 21 February 1992 until the day immediately preceding the date of payment of that sum. I further order that the respondent, the Water Resources Commission, pay the claimant interest at the rate of 9 per cent per annum on the amount of $500 from 4 May 1991 until the day immediately preceding the date of payment of that sum. (JJ Trickett) Member of the Land Court -- 10 of 10 --