Queensland Law Society Symposium

Property Law Stream

Land Court Jurisdiction –

Recent Legislation and Case Law Update

by

CAC MacDonald, President of the Land Court

and

BR O'Connor, Judicial Registrar, Land Court

and

LA Marshall, Research Officer, Land Court

Background As the Land Court may be "under the radar" for many of the lawyers in Queensland, it may be beneficial to provide a brief history of the Court and an outline of its role and jurisdiction. The Court was first established in 1897 to deal mainly with issues relating to Crown leasehold land, as Queensland was progressively settled. That role has substantially changed in more recent times and the Court now deals with a range of land and natural resources matters. The Court is constituted under the Land Court Act 2000. The Court is a statutory Court and has the jurisdiction given to it under an Act (s.5). Currently, jurisdiction is granted in over 40 statutes.1 There is no monetary limit on the Court's jurisdiction in any matters. The vast majority of the Court's caseload revolves around three main areas: 1. Compulsory acquisition of land under the Acquisition of Land Act 1967. Land

may be taken by the State government (for roads, dams, schools and national parks etc), State agencies such as Queensland Rail and electricity authorities, and local governments. While the great majority of resumption matters are settled without Court referral, generally with the professional assistance of lawyers and valuers, those that do proceed to a Court hearing tend to involve the most substantial claims or the more complex issues.

1 See the Land Court website www.landcourt.qld.gov.au and its Annual Report, 2010 - 2011.

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2. Statutory Valuations: These comprise valuations under the Land Valuation Act 2010 for rating, rental and land tax purposes.

The Valuer-General issues some 1.6 million rating valuations per year. The majority of the appeals that proceed to Court for full hearing are those of a more substantial nature, for example, major shopping centres, CBD properties, industrial lands, lands ripe for subdivision and heritage properties. Most of the other appeals are resolved at the ADR process discussed below. Rental matters before the Court relate to such properties as western grazing lands, resort/tourism leases (for example the Southport Spit properties), various coastal islands and coastal marinas.

3. Mining matters under the Mineral Resources Act 1989 (MRA).2 These relate

mainly to:

(a) Applications for the grant of a mining lease. Where objections are made, the Court conducts a full hearing involving written and oral evidence and makes recommendations to the Minister about whether to grant the lease and, if so, under what conditions. Objections may also be made to the proposed environmental authority associated with the mining project, which is issued under the Environmental Protection Act 1994 (EPA). These objections are dealt with by the Land Court at the same hearing as the application for mining lease and objections.

(b) Compensation to landowners for the effects on their property of the mining

activity. It is noted that compensation issues generally do not arise in the very large mining operations, where the miner tends to purchase the whole grazing property. The recent Adani purchase of a property in the Galilee Basin exemplifies this practice.

The Court Constitution and membership The Court as currently established under the Land Court Act 2000 consists of a President and three Members, as well as a Judicial Registrar. The latter is mainly responsible for the Court’s ADR process. The Land Court has two divisions, a general division to which the vast majority of cases are referred and a cultural heritage division. Indigenous assessors can also be appointed to sit on cultural heritage matters as required. Appeals from the Land Court lie to the Land Appeal Court comprising a Supreme Court Judge (presently Justice Peter Lyons in the Southern District) and two Land Court Members. On average, about six to eight cases go to this level on appeal each 2 The Court also has jurisdiction under the Petroleum Act 1923, the Petroleum and Gas

(Production and Safety) Act 2004, the Geothermal Energy Act 2010 and the Greenhouse Gas Storage Act 2009.

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year. Further appeal is by leave to the Court of Appeal on questions of law. About two cases per year are appealed to the Court of Appeal. Very occasionally, a case proceeds to the High Court after grant of special leave. Sittings Brisbane sittings are held in the Brisbane Magistrates Court Building. Circuit courts are held in about 30 centres throughout the State depending on the annual caseload in different areas. Registry The Court registry is located on Level 8 of the Brisbane Magistrates Court Building and is now part of a wider Supreme, District and Land Courts service. Caseload There are approximately 1,000 new matters filed in the Court each year. Alternative Dispute Resolution Most of the valuation cases, with the exception of Land Valuation Act 2010 appeals over five million dollars,3 are referred to a "preliminary conference" conducted by the Judicial Registrar. The conference is designed to assist the parties to reach a resolution of their dispute. The vast majority of those cases are settled at this level. More substantial mining and compulsory acquisition cases are frequently mediated. Court supervised mediation is offered or private mediators may also conduct these mediations at the parties' expense. Mediation involves a more elaborate process than a preliminary conference. Expert witnesses supply joint reports, submissions are exchanged and an outline of arguments is presented in advance. As a general observation, the Court's ADR processes have worked well over the last twelve years making substantial savings in time and costs and having a wide client acceptance. Evidence and Procedure The strict rules of evidence do not apply to Land Court proceedings and the Court must act according to equity, good conscience and the substantial merits of the case.4 However, the more important and substantial the case, where the parties are legally represented, the stricter the Court tends to be when requiring the parties to comply with formal procedures. Land Court procedures are covered by the Land Court Act, the Land Court Rules 2000 and Practice Directions. The Rules are relatively brief but adequate for the standard case. By s.4 of the Rules, the Uniform Civil Procedure Rules 1999 (the

3 See discussion below under Land Valuation Act 2010. 4 Section 7 Land Court Act 2000.

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UCPR) apply where the Land Court Rules do not cover the field. Matters such as disclosure and interrogatories cause reference to be made to the UCPR. Costs Section 34 of the Land Court Act gives the Court an unfettered discretion to award costs, subject to the provisions of any other statute. So, for example, s.171 of the Land Valuation Act provides that costs may only be awarded against a party in limited circumstances, such as if the appeal is considered to be frivolous or vexatious. With resumptions, the "halfway rule" applies under the Acquisition of Land Act. The only party eligible for a costs award is the one whose final valuation put in evidence is closer to the amount awarded by the Court.5 Time Limits Different time limits apply to the filing of new matters in the Court, depending on the applicable legislation. For example, under the Land Valuation Act, a landowner has 60 days after the issue of a departmental "objection decision" to lodge an appeal in the Court.6 Appeals filed outside of this time period must establish a "reasonable excuse" in order to become entitled to a hearing.7 In acquisition matters, for land taken after 22 February 2009, claims must be filed in the Court within three years from the date of acquisition unless accepted by the resuming authority or failing that, the Court.8 Expert Witnesses The main type of witnesses to give evidence at Land Court hearings are experts including valuers, town planners, engineers, quantity surveyors, hydrologists, economists and occasionally, anthropologists and ecologists. Representation There is a relatively small group of counsel, both senior and junior, who appear regularly in Land Court matters. Their practices normally involve extensive representation in the Planning and Environment Court as well. Similarly, there is a small group of specialist litigation valuers who give expert evidence in the more substantial valuation and acquisition cases in the Court.

5 Section 27 Acquisition of Land Act 1967. 6 Section 157(2) Land Valuation Act 2010. 7 Section 158 Land Valuation Act 2010. 8 Section 19(3) - (6) Acquisition of Land Act 1967.

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Major Legislative Developments Land Valuation Act 2010 The Land Valuation Act 2010 (LVA) came into operation on 20 September 2010 replacing the Valuation of Land Act 1944. The new Act resurrected the position of the Valuer-General, who acts as the independent head of the State Valuation Service. Mr Neil Bray, the Valuer-General in South Australia for the preceding ten years, but formerly from Queensland, was appointed to the position. The Valuer-General is responsible under the Act for making land valuations in Queensland. The LVA introduced new methodologies for land valuations under the Act. The main changes are –

Division of land into rural and non-rural categories – For rural land, value is assessed on the basis of its "unimproved" value. Non-rural land is now assessed on a "site" basis, consistent with the methodology applying in other States.9

Site value reflects the value of the land in its current condition without

deduction for site improvements such as filling, clearing and drainage. Thus site value includes the value of those improvements but ignores other non-site improvements.10 Excavations for footings, foundations and underground building levels (e.g. for an underground car park) are non-site improvements because such improvements are closely linked with the construction of the building and merge with that improvement.

Objections and Objections Conferences – Objections must be lodged within

60 days of the issue of the valuation. Information relied upon to establish each ground of objection, details of comparable sales and the process of comparison reasoning must be supplied with the objection.11

Valuations of less than five million dollars may have an objection conference if the parties agree.12 For valuations of more than five million dollars, the Valuer-General must offer an objection conference.13 The Valuer-General must appoint an independent chairperson for the conference.14 The independent chairperson has power to require information.15 A primary function of the chairperson is to encourage a full exchange of opinion between the parties, including a full disclosure of information relating to the objection.16 Evidence of anything said or done in an objection conference is inadmissible in any following proceedings.17

9 Section 7 Land Valuation Act 2010. "Non-rural land” is defined in s.8 and "rural land” is

defined in s.9 of the Land Valuation Act 2010. 10 Sections 19 and 23 Land Valuation Act 2010. 11 See section 113 of the Land Valuation Act 2010 for the required content of objections. 12 Section 122 Land Valuation Act 2010. 13 Section 123 Land Valuation Act 2010. 14 Section 125 Land Valuation Act 2010. 15 Section 127 Land Valuation Act 2010. 16 Section 126 Land Valuation Act 2010. 17 Section 131 Land Valuation Act 2010.

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Information Requirement – Whether or not an objection conference has been held, the Valuer-General may require an objector to provide further written information (other than information the subject of legal professional privilege) that is likely to be in the objector’s custody, possession or power and is likely to be relevant in the deciding of an objection. The provision applies only to valuations of more than five million dollars.18

Appeal Process – Where an objection does not resolve the dispute, a right of

appeal to the Land Court continues to exist.19

Mitigation Measures – Where there has been a significant increase in value or where new site improvements have been made to the land by the current owner, the Act introduces two mitigation measures - an "offset" allowance and a “site improvement deduction”. Eligible landowners can choose one or the other of these mitigation measures.20

Offset Allowance

The Act introduced a transitional provision for 2011 valuations only, known as an "offset allowance", for properties moving from unimproved to site values. The offset ceases on the sale of the property or after twelve years from the 2011 valuation. The offset allowance applies only to cases where the difference between the previous unimproved value and the 2011 valuation exceeds one million dollars.21

The owner of the land at the date of effect of valuation will be entitled to have the increase greater than one million dollars "offset" in instalments over a twelve year period. Such offset amount will be deducted from the relevant site value with full site value being reflected in the thirteenth year, or on the sale or part sale of the property within the twelve year period.22

Site Improvement Deduction

An owner may apply to the Valuer-General for a "site improvement deduction" for site improvements carried out and paid for by the owner in the twelve years prior to the valuation. The onus is on landowners to apply to the Valuer-General for the deduction and to provide proof of the expenditure and that they themselves paid for the site improvements. A change of ownership will trigger the removal of the site improvement deduction.23

Concessional Values – The concessions in the 1944 Act for exclusive use as a

single dwelling house and for farming continue to apply (in an amended form) for the present. The availability of these concessions is to be reviewed by the end of 2012.

18 Section 135 Land Valuation Act 2010. 19 Section 155 Land Valuation Act 2010. 20 Section 280 Land Valuation Act 2010. 21 Section 274 Land Valuation Act 2010. 22 Section 275 Land Valuation Act 2010. 23 Sections 38 - 44 Land Valuation Act 2010.

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Strategic Cropping Land Act 2011 The Strategic Cropping Land Act 2011 (SCL Act) commenced on 30 January 2012 giving the Land Court new jurisdiction to hear appeals in relation to "SCL protection decisions" made for mining and other resource projects. Appeals in relation to "SCL protection decisions" made for development under the Sustainable Planning Act 2009 are dealt with by the Planning and Environment Court. An "SCL protection decision" is a decision about:24

(a) the impact of a resource activity on land that is SCL25 or potential SCL;26 and (b) whether or not to impose conditions on either or both of the environmental

authority or resource authority for the resource activity. The Land Court's role under the SCL Act does not involve making any decisions about whether or not land is SCL. A "validation decision" will have already been made in relation to the relevant land under the SCL Act by the time an appeal reaches the Land Court. Where a project area includes land identified on the trigger map as potential SCL, the project proponent essentially has two choices:

(1) accept the trigger mapping as correct and apply for an SCL protection decision on the basis that the land is SCL; or

(2) conduct an assessment of the land in accordance with the zonal criteria

identified in the Act and apply for a validation decision first, before applying for an SCL protection decision.

In brief, the SCL Act establishes a process to enable project proponents and landowners to apply for confirmation or "validation" as to whether or not a particular parcel or parcels of land are SCL. The decision is generally based on an assessment of the land against the statutory criteria identified in Schedule 1 for the relevant zone in which the land is situated as well as a "cropping history test" where applicable. The decision in the first instance is made by the Chief Executive of the Department of Natural Resources and Mines with appeal rights to the Planning and Environment Court. The following flowchart produced by the then Department of Environment and Resource Management (now the Department of Natural Resources and Mines) provides a useful overview of the SCL assessment process for resource projects:

24 Section 91 Strategic Cropping Land Act 2011. 25 “SCL” is strategic cropping land: s.9(2) of the Strategic Cropping Land Act 2011. “Strategic

cropping land” is land recorded in the decision register as being SCL: s.9(1) of the Strategic Cropping Land Act 2011.

26 “Potential SCL” is land in an area shown on the trigger map as being potential SCL: s.10(1) of the Strategic Cropping Land Act 2011.

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SCL Protection Decisions Once it is determined that a project involves SCL, the project proponent must then apply to the Department for an "SCL protection decision" for the project. An SCL protection decision must consist of the following:27

(a) a decision:

27 Section 99 Strategic Cropping Land Act 2011.

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(i) about the permanent impacts and the temporary impacts on the land of the carrying out of the resource activity; and

(ii) that identifies the extent of each of those impacts; and

(b) a decision about whether or not to impose conditions (referred to as "SCL protection conditions") on either or both of the proposed authorities.

If an SCL protection decision imposes SCL protection conditions, the decision must state on which of the proposed authorities the conditions are imposed (referred to as the "imposed authority") – this may be either the mining tenement or the environmental authority or both. The SCL protection conditions are then taken to be conditions of the imposed authority. If there is any inconsistency between any of the SCL protection conditions and another condition of, or imposed on, the imposed authority, the SCL protection conditions prevail to the extent of the inconsistency.28 An SCL protection condition may:29

(a) prohibit, limit or restrict the carrying out of the resource activity on the land or part of it; or

(b) require the applicant to install and operate stated plant or equipment in a stated

way within a stated period; or

(c) require the applicant to do, or refrain from doing, anything else the chief executive considers is necessary or desirable to achieve the Act’s purpose; or

(d) require security (financial assurance) in favour of the State.

The following criteria must be considered in making an SCL protection decision:30

(a) the extent of the impact of the carrying out of the resource activity on SCL; and

(b) whether the carrying out of the resource activity will have a permanent impact

or a temporary impact on the land; and

(c) whether the applicant has demonstrated that the impact has been avoided or minimised to the greatest extent practicable.

In imposing SCL protection conditions, the chief executive must also consider the "SCL principles". The "SCL principles" are the following principles which are set out in s.11 of the SCL Act:

protection; 28 Section 103 Strategic Cropping Land Act 2011. 29 Section 100 Strategic Cropping Land Act 2011. 30 Section 101 Strategic Cropping Land Act 2011.

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avoidance; minimisation; mitigation; productivity.

Appeals to the Land Court

The chief executive's SCL protection decision may be appealed to the Land Court.31 The appeal must be started within 28 days after receiving notice of the decision or such longer period as may be determined by the Court.32 It is worthwhile to note that unless the landowner is also the applicant for the proposed project, the chief executive is not required to notify the landowner of the SCL protection decision and the landowner therefore has no appeal rights in relation to the decision. Landowners instead are given the right to lodge objections to the proposed project under the MRA and the EPA. An appeal under the SCL Act is by way of hearing anew33 and the Land Court has the same powers as the chief executive.34 In deciding an appeal, the Court may:35

(a) confirm the decision appealed against; or (b) change the decision appealed against; or (c) set aside the decision appealed against and –

(i) make a decision replacing the decision set aside; or (ii) return the matter to the chief executive with directions the court

considers appropriate. The new appeal process adds another layer of complexity to the Land Court's existing function of holding integrated hearings about the grant of mining leases and associated environmental authorities. Currently, under the MRA, the Land Court is charged with the function of conducting a hearing in relation to applications for the grant of mining leases and any objections made in relation thereto, and making recommendations to the relevant Minister about whether to grant the proposed leases and if so, recommending any relevant conditions. Similarly, under the EPA, the Court hears any objections to an application made for an environmental authority, the draft environmental authority and any conditions included in the draft environmental authority, and makes recommendations to the relevant Minister about whether to grant the application and if so, on what conditions. 31 Section 109 Strategic Cropping Land Act 2011. 32 Section 266 Strategic Cropping Land Act 2011. 33 Section 111 Strategic Cropping Land Act 2011. 34 Section 112 Strategic Cropping Land Act 2011. 35 Section 113 Strategic Cropping Land Act 2011.

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The Land Court holds a combined hearing in relation to the objections made under both the MRA and the EPA for the grant of proposed mining leases and associated environmental authorities. SCL issues are likely to be relevant to the statutory criteria that the Court must consider when making its recommendations under the MRA and the EPA. For example, s.269(4) of the MRA provides (amongst other things) that the Court must take into account and consider whether the proposed mining operation is an appropriate land use and whether there will be any adverse environmental impact caused by those operations. Under s.223 of the EPA, the Court must consider "the standard criteria" which is defined to include the character, resilience and values of the receiving environment. The SCL Act provides that an environmental authority for a resource activity can not be issued until an SCL protection decision has been made for the resource authority (ie. the proposed mining lease or other tenure/tenement) and the associated environmental authority.36 This makes sense since an SCL protection decision may ultimately impact on the nature and extent of the proposed activity. Although the Court is yet to receive any appeals under the SCL Act, it is likely that the Court will hear SCL appeals together with the hearing of any objections made under the MRA and the EPA for the activity. The Land Access Framework The Land Access Framework was introduced by the Geothermal Energy Act 2010. It applies to:

(1) geothermal tenures under the Geothermal Energy Act 2010; (2) GHG authorities under the Greenhouse Gas Storage Act 2009; (3) petroleum authorities under the Petroleum and Gas (Production and Safety)

Act 2004 (the P&G Act); (4) 1923 Act petroleum tenures under the Petroleum Act 1923; and (5) exploration permits and mineral development licences under the Mineral

Resources Act 1989. The land access provisions for petroleum, GHG and geothermal tenures commenced on 29 October 2010. The land access provisions for exploration permits and mineral development licences under the MRA commenced on 10 December 2010. What is the Land Access Framework? The Land Access Framework consists of:

36 Section 93 Strategic Cropping Land Act 2011.

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- the Land Access Code, comprising best practice guidelines and mandatory conditions concerning the conduct of authorised activities on private land; and

- access and compensation provisions contained within the various Resource

Acts. Access and Compensation Provisions Schedule 1 of the MRA sets out the access and compensation provisions for exploration permits and mineral development licences.37 See also Chapter 5 of the P&G Act,38 Chapter 6 of the Geothermal Energy Act 2010, Part 6H of the Petroleum Act 1923 and Chapter 5 of the GHG Act. The access and compensation provisions are not identical in each statute. However, they generally provide for:

- Entry notices; - Conduct and compensation agreements; - Compensation determinations by the Land Court.

Compensation vs. Access and Conduct Under the MRA, the Land Court is given jurisdiction for determining the compensation liability for authorised activities carried out on land within the tenure area.39 If, however, the parties cannot agree on access and conduct issues in circumstances where the statutory conference/ADR process is unsuccessful, there appears to be no other dispute resolution mechanism available to the parties. The issue is quite significant as Schedule 1, s.5 of the MRA appears to allow mining companies to enter land to carry out advanced activities by simply giving a notice of entry, once the matter has been referred to the Land Court under Schedule 1, s.22, but before the Court has made any final decision – this is referred to as the "Land Court application exemption". The relevant provisions of the Land Access Code would apply to any such entry. These issues were raised for the first time before the Land Court in the recent case of Endocoal Limited v EMIN Pastoral Company Pty Ltd & Ors.40 In that case, the parties had agreed on the amount of compensation but the manner in which advanced activities would be undertaken had not been agreed. In other words, the conduct of the parties had not been agreed. The mining company purported to refer the matter to the Court under Schedule 1, s.22 of the MRA. The landowners argued that the referral to

37 See, in particular, Schedule 1, sections 22, 23, 26 & 27 of the Mineral Resources Act 1989. 38 See, in particular, sections 508, 509, 537B & 537C of the Petroleum and Gas (Production and

Safety) Act 2004. 39 See Schedule 1, section 22 of the Mineral Resources Act 1989 and section 537B of the

Petroleum and Gas (Production and Safety) Act 2004. 40 [2012] QLC 0011.

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the court was not valid and therefore that the miners were not entitled to rely on the notice of entry to go on the land. In light of evidence that the mining company was already starting to undertake advanced activities on the land, the Court ordered that the advanced activities be restrained, to maintain the status quo, and further ordered that the parties attend urgent mediation. The matter was resolved at the mediation and the Court subsequently lifted the injunction. Further on this point, it is relevant to note that the jurisdiction and powers of the Court under the P&G Act appear to be broader as compared to the MRA. Compare in particular the Court's "additional jurisdiction" in Schedule 1, s.26 of the MRA with s.537DB in the P&G Act as set out in the table below: MINERAL RESOURCES ACT 1989 SCHEDULE 1 s26 Additional jurisdiction (1) This section applies if –

(a) an exploration tenement holder and an eligible claimant can not reach agreement about a conduct and compensation agreement; or

(b) there is a conduct and compensation agreement or deferral agreement.

(2) The Land Court may assess all or part of the relevant exploration tenement holder’s compensation liability to another party.

(3) In this section - party means any of the following -

(a) the relevant exploration tenement holder;

(b) an eligible claimant mentioned in subsection (1)(a);

(c) an eligible claimant who is a party to an agreement mentioned in subsection (1)(b).

PETROLEUM AND GAS (PRODUCTION AND SAFETY) ACT 2004 s537DB Additional jurisdiction (1) This section applies to a petroleum

authority holder and an eligible claimant (the parties) if any of the following apply -

(a) the petroleum authority holder has carried out a preliminary activity;

(b) the parties can not reach agreement about a conduct and compensation agreement;

(c) there is a conduct and compensation agreement or deferral agreement between the parties.

(2) The Land Court may do all or any of the following -

(a) assess all or part of the relevant petroleum authority holder’s compensation liability to another party;

(b) decide a matter related to the compensation liability;

(c) declare whether or not a proposed authorised activity for the relevant petroleum authority would, if carried out, interfere with the carrying out of lawful activities by the eligible claimant;

(d) make any order it considers necessary or desirable for a matter mentioned in paragraph (a), (b) or (c).

Example— The Land Court declares that a particular proposed authorised activity interferes with the carrying out of lawful activities by the eligible claimant. It may also order that a stated modification of, or reduction in, the activity would remove the interference.

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Given the brevity of this presentation, I have not undertaken a comparison with the other Resource Acts. Practitioners should be aware however that there are subtle differences in the Court’s jurisdiction and powers under the various Resource Acts. Case Law Update In this part of the paper I consider a number of recent decisions relevant to the Land Court’s jurisdiction.41 Springfield Land Corporation (No. 2) Pty Ltd v Queensland42 This was an appeal to the High Court, by special leave, from a decision of the Queensland Court of Appeal to award 'nil' compensation in a resumption matter. In October 2005, the Department of Main Roads (DMR) issued notices of intention to resume land owned by Springfield Land Corporation (SLC) at Springfield near Ipswich. The total area of resumed land was a little less than seven hectares. SLC had been developing the area now known as Springfield since about 1992. On any view it was, and is, a very large residential development project, containing 2,851 hectares and expected to house at least 60,000 people. It was developed from a greenfield site. In 1994, a draft Springfield Development Control Plan was prepared which identified a "Regional Transport Corridor". In 1998, SLC and the Ipswich City Council entered into what was called the Springfield Infrastructure Agreement whereby certain land within the development site was to be dedicated for this transport corridor. In the course of planning an extension of the corridor from the Springfield Town Centre to Ripley, it was found that some of the land within the corridor earlier set aside would not be required, but that some other land owned by SLC adjacent to the corridor land was required instead.

The newly required land was called the "transfer land". In that context, DMR gave the notices of intention to resume the transfer land in October 2005. The parties were unable to agree on the amount of compensation payable for the land and the matter proceeded to arbitration. On 9 October 2008, the arbitrator made an award under which DMR was to pay to SLC compensation assessed at $1,468,806. An appeal by DMR to the Supreme Court from that determination was allowed.43 P McMurdo J held that the compensation payable was ‘nil’ because the balance land retained by SLC had been enhanced by the works or purpose for which the land was

41 Significant decisions of the Land Appeal Court and the Land Court are reported in annual

volumes of the Queensland Land Court Reports (QLCRs), and online at www.austlii.edu.au. All decisions of both Courts can be found at the Land Court website www.landcourt.qld.gov.au.

42 (2011) 242 CLR 632; [2011] HCA 15. 43 State of Queensland v Springfield Land Corporation (No. 2) P/L & Anor (2009) 169 LGERA

284; [2009] QSC 143.

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taken. An appeal to the Court of Appeal by SLC failed.44 SCL then further appealed to the High Court. The appeal was dismissed. The principal question before the High Court concerned the interpretation of the enhancement provision in s.20(3) of the Acquisition of Land Act 1967 (ALA) which reads as follows:

“20 Assessment of compensation (3) In assessing the compensation to be paid, there shall be

taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.”

The specific issue was whether, for the purposes of s.20(3) of the ALA, “the works or purpose for which land [was] taken” from SCL were limited to the works immediately associated with the land taken or whether they included the totality of a road building project of which those works were only a part. The High Court held:

Under the ALA, the notices of intention to resume the transfer land were required to “specify the particular purpose” for which the land was required. The stated intention was “for future transport purposes including the facilitation of transport infrastructure (namely road and busway, rail or light rail) for the South-West Transport Corridor” (emphasis added).

The agreed discontinuance by the parties of the procedures under the ALA

was in exchange for:

(i) the transfer of the transfer land for amalgamation with land already held by DMR; and

(ii) payment of compensation for the transfer land, in accordance

with the requirements of Part 4 (ss.18-35) of the ALA, "as if" the transfer land had been taken under that statute.

The onus was on the State of Queensland (acting through DMR) to establish

that there was some relevant enhancement and its amount.

The Pointe Gourde45 principle was not relevant for the purpose of considering enhancement to other lands for the purposes of s.20(3).

44 State of Queensland v Springfield Land Corporation (No 2) P/L & Anor (2009) 171 LGERA 38;

[2009] QCA 381. 45 Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands (Trinidad)

[1947] AC 565.

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The “purpose” in s.20(3) corresponds with the purpose for which there is a power of compulsory acquisition. That is, the purpose was to be understood as the public benefit or end to be achieved, rather than some means to that end.

The relevant “purpose” in this case was that for which the transfer land would

have been taken had the statutory processes set in train by the notices of intention to resume not been supplanted by the Agreement.

The “purpose” was not identified by some factual inquiry into the reason why

the notices of intention to resume were given – that is, a decision to realign the proposed road corridor “in minor respects”.

The Supreme Court and Court of Appeal had also held in Springfield that to decide the extent of any enhancement under s.20(3) of the ALA, the interest of the claimant in the whole of the land adjoining the land taken was to be taken into account, not just the lots immediately adjoining the land taken. This aspect of the decision was not challenged in the High Court. SLC had argued that the relevant enhancement was only that relating to the lots which immediately adjoined the land taken. Gold Coast City Council v Halcyon Waters Community Pty Ltd46 The Gold Coast City Council resumed part of the claimant’s land for road, park and recreation purposes. Prior to the resumption, the claimant’s land was bisected by a road reserve into northern and southern sections. The northern section was resumed. Part of another area of land, the Flebus land, shared a common boundary with the retained land. For the purpose of determining a preliminary point, it was assumed that the Flebus land had been enhanced by the works or purpose for which the resumed land was taken and that the claimant held a relevant interest in the Flebus land. The Court was asked to determine, as a preliminary point, whether the Flebus land was land “adjoining the land taken or severed therefrom” within the meaning of s.20(3) of the ALA which, as set out above, provides that -

“20 Assessment of compensation (3) In assessing the compensation to be paid, there shall be

taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.”

The Land Court held that the allegedly enhanced land must physically adjoin the resumed land for the enhancement provisions of the ALA.47 The Council appealed this decision to the Land Appeal Court.

46 [2011] QLAC 0003. 47 Halcyon Waters Community Pty Ltd v Chief Executive, Gold Coast City Council (2010) 183

LGERA 218; [2010] QLC 0138 at [34].

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The question on appeal was whether the word “adjoining” should be construed narrowly requiring “physical contiguity”, or more widely extending to land which “is or lies close to or neighbours on” the land taken. The Land Appeal Court held that the narrow view or the natural meaning of the word “adjoining” as used in s.20(3) means that there must be physical contiguity. A common boundary is required, or at least a common boundary point. The Flebus land did not come within the description “land adjoining the land taken” in s.20(3) of the ALA. As a result, the Council was not entitled to assert that the alleged enhancement of the value of the Flebus land by the resumption scheme could be relied upon by way of set-off or abatement, in the assessment of compensation for the taking of the resumed land. To come within the term “severance”, the resumed land did not have to be physically contiguous to the retained land. However, common ownership in the resumed and the retained land was not sufficient to establish severance. Some additional “connecting factor” was necessary. The Land Court had also held at first instance that, applying Springfield, the claimant's interest in the whole parcel of any land adjoining the resumed land was to be considered in determining any question of enhancement. Thus, even though the retained land was not enhanced by the resumption, the retained land adjoined part of the Flebus land and, for the purposes of s.20(3), the relevant land was the retained land plus the Flebus land. In view of the conclusion that the Flebus land did not adjoin the resumed land, the Land Appeal Court said that it was unnecessary to consider whether the retained land also must be enhanced to trigger any enhancement claim for the Flebus land which adjoined it. Van Byron Pty Ltd v Chief Executive, Department of Main Roads Further implications of the Springfield decision were explored in Van Byron Pty Ltd v Chief Executive, Department of Main Roads.48 Prior to the resumption, the claimant owned two adjoining lots, Lot 5 and Lot 14. Part of Lot 14 was resumed for the purposes of transport, in particular road purposes. No land was resumed from Lot 5 but the compensation claim included a claim for injurious affection to Lot 5. As at the date of resumption, the lots were used together for grazing. However the parties were agreed that the highest and best use for each lot, before and after, was as separate rural home sites.

The relevant issue, for the purposes of this discussion, was whether the claimant was entitled to compensation for the injurious affection to Lot 5 under s.20(1)(b) of the ALA. As at the date of resumption, ss.20(1) and (3) provided that -

48 [2011] QLC 0065.

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“20 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 –

(a) to the damage, if any, caused by either or both of the following –

(i) the severing of the land taken from other land of the

claimant; (ii) the exercise of any statutory powers by the constructing

authority otherwise injuriously affecting the claimant’s other land mentioned in subparagraph (i); and

… (3) In assessing the compensation to be paid, there shall be taken into

consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.”

The Court held that the claim for injurious affection to Lot 5 was available. The decision of the Land Appeal Court in Suntown Pty Ltd v Gold Coast City Council49 was authority for the proposition that there must be a severance within the meaning of s.20(1)(a) of the ALA for a claim for injurious affection to succeed under s.20(1)(b). There was clearly a severance of part of Lot 14 from the balance of Lot 14 and the respondent had accepted that the balance of Lot 14 was injuriously affected. Although the decision in Springfield was concerned with the interpretation of s.20(3), the Court held that similar reasoning could be applied to the interpretation of the words “other land” in s.20(1)(b). That is, the words “other land” refer to the whole of the landowner's balance parcel, in this case the balance of Lot 14 and Lot 5. Brisbane City Council v Mio Art Pty Ltd & Anor50 Brisbane City Council appealed to the Court of Appeal against a decision of the Land Appeal Court on a narrow, but most important legal issue – could an event occurring subsequent to the date of valuation be used in the assessment of market value for compensation purposes under the ALA. The subject land, part of a larger parent parcel, situated at West End, was resumed in August 2007 for the southern approaches to the Hale Street bridge. The parties agreed that the “before and after” approach to valuation was appropriate and that the value of the residue land after the acquisition was $9 million. Where the parties differed was as to the development potential of the land in the before case and, consequently, the value of the land in the before case.

49 (1979) 6 QLCR 196. 50 (2011) 183 LGERA 352; [2011] QCA 234.

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One of the relevant town planning instruments was a draft Kurilpa Structure Plan (Kurilpa 1), published in April 2007, which identified a proposed maximum building height of 9 storeys for the subject land. In December 2007, the Council published a second draft of the Kurilpa Structure Plan (Kurilpa 2) which showed an indicative building height for the land of 12 storeys. The Land Court found that, as at the date of resumption, there was no evidence as to the content of any structure plan review and in particular as to whether the proposal to raise the relevant height limit to 12 storeys was in circulation. Accordingly, the Court found, on the evidence, that a prudent vendor and purchaser would have considered the maximum average height of buildings which could have been approved on the site was 10 storeys. The Land Appeal Court allowed an appeal from the Land Court on one ground only. It held that the Land Court had wrongly disregarded Kurilpa 2 in its consideration of the size of the development which a prudent vendor and purchaser would have expected to have been approved. The Land Appeal Court held that it was foreseeable in August 2007 (the resumption date) that the building heights allowed under Kurilpa 1 would be increased (at some unspecified future time). The Court also held that evidence of events subsequent to acquisition was admissible to confirm what was foreseeable at the date of acquisition, citing Thorpe v Brisbane City Council51 and CMB No 1 Pty Ltd v Cairns City Council.52 The application of sales evidence would have been affected by any significant change to the Land Court's finding about the development potential of the land.

No quantitative assessment was made of the likelihood (apparent to the hypothetical vendor and purchaser as at the date of acquisition) of an increase in the building heights in Kurilpa 1 or in the height limit likely to be accepted by the Council upon consideration of development applications for the subject site. Brisbane City Council appealed on the ground that events arising subsequent to acquisition must be ignored in assessing market value for compensation purposes. The Court of Appeal granted leave to appeal, stressing that this was an important point which must arise frequently in Land Court cases, and that the decision of the Land Appeal Court was binding on the Land Court in future cases. If that decision were wrong, it had the potential to result in numerous future miscarriages of justice. The appeal was allowed. The Court of Appeal said that the assessment of compensation for the acquisition of land in Queensland is controlled by s.20 of the ALA. It is important to keep the text of the section firmly in mind, and not to replace it with judicial dicta from cases dealing with differently worded provisions. Two points follow from the text of s.20. The first is that “value of the land taken” is quite separate from damage caused by severance or injurious affection and

51 [1966] Qd R 37. 52 [1999] 1 Qd R 1.

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disturbance costs. Compensation for the value of the land taken is to be assessed as at the date of resumption. The second point is that, unlike compensation for the value of the land taken, compensation for severance, injurious affection and disturbance is not explicitly required to be assessed by reference to the date of acquisition. Compensation for severance, injurious affection and disturbance are awarded in respect of matters which often arise or are to be quantified after the taking. None of these types of compensation have to be assessed as at the date of resumption, either by the terms of the legislation or by reason of the decision in Spencer's case.53 The Court reviewed the previous authorities and held that where, as in Queensland, there is statutory provision for injurious affection, severance and (since 2009) disturbance, there is no limitation on the extent to which regard may be had to events subsequent to the date of acquisition (subject, of course, to proof of causation). The respondent had submitted that Kurilpa 2 could be taken into account in assessing market value under s.20 “not to prove a hindsight, but to confirm a foresight” of the likely approval of a 12 storey development. The meaning of that catchy dictum is unclear. So is its logic. For direct proof of market value, it is an expression best forgotten. To determine market value, the Spencer test postulates hypothetical parties in full possession of knowledge generally available on the date of acquisition. That knowledge includes knowledge of future possibilities, but only as possibilities, and with the weight which prudent persons would ascribe to them. The Court of Appeal concluded that the Land Court did not err in excluding Kurilpa 2 from consideration in assessing the market value of the land acquired by the Council. Xstrata Coal Queensland Pty Ltd v Friends of the Earth - Brisbane Co-op Ltd & Ors, and Department of Environment and Resource Management54 This case relates to the proposed Wandoan coal mine which, if it is approved, it is said will be the largest coal mine in the southern hemisphere. The decision deals with applications for the grant of mining leases and objections thereto as well as objections to the application for an environmental authority for the project, the draft environmental authority and conditions included in the draft environmental authority. The objections fell into two broad categories – landowners, whose objections, in general terms, were based on their concerns as to the size of the proposed mine and its impact on their general amenity and the productive use of their land. The Friends of the Earth (FoE) objection was based on climate change grounds. The decision is lengthy and deals with numerous issues. It is impossible to deal with it fully in this paper. One aspect of the decision which has attracted attention is the Court’s consideration of the climate change issues.

53 Spencer v The Commonwealth of Australia (1907) 5 CLR 418. 54 [2012] QLC 013.

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The FoE lodged objections to the project under both the Mineral Resources Act 1989 (MRA) and the Environmental Protection Act 1994 (EPA). The FoE contended that the Court should recommend refusal of the project because the greenhouse gas (GHG) emissions which will result from the project, particularly from transporting and burning the coal produced by the project, will contribute to anthropogenic climate change and ocean acidification. Under the Greenhouse Gas Protocol, which contains internationally accepted accounting and reporting standards for GHG emissions, GHG emissions are classified into 3 "scopes":

Scope 1 emissions: direct GHG emissions from sources that are owned or controlled by a company.

Scope 2 emissions: indirect GHG emissions from the generation of

purchased electricity consumed by the company. Scope 3 emissions: all other indirect greenhouse gas emissions resulting

from a company's activities, but occurring from sources not owned or controlled by the company. Examples include extraction and production of purchased materials, transportation of purchased fuels and use of sold products and services.

The FoE submitted that scope 3 emissions from the mine must be considered when assessing its impact under the MRA and the EPA; the public right and interest was prejudiced due to the contribution the mine will make to climate change and ocean acidification; and the mine is not consistent with the principles of ecologically sustainable development (ESD) set out in the National Strategy for Ecologically Sustainable Development. The science of climate change was not disputed by the applicants, nor was it disputed that the project will generate GHG emissions which will contribute to climate change. Further it was not disputed that climate change will result in increased global temperatures and increased ocean acidification. However, the applicants said that stopping the project would not affect the amount of GHGs in the atmosphere as the coal it would have produced will be produced elsewhere which will produce the same or a higher amount of GHG emissions when burned. Further, the mining and burning of the coal from the project would have negligible or no separate impact on climate change and, balancing any impacts against the benefits, the project should be permitted to proceed. The Court held that the climate change objections and the evidence adduced in support thereof were not sufficient to warrant refusal of the applications for mining leases or the draft environmental authority. In relation to the objections to the mining lease application, the Court reached this conclusion primarily by construing the relevant provisions of the MRA. In particular, s.269(4)(j) of the MRA provides that the Court must take into account and consider whether there will be any adverse environmental impact caused by “those operations”.

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The words “those operations” take their meaning from s.269(4)(i) which refers to “the operations to be carried on under the authority of the proposed mining lease”. Section 234(1) of the MRA provides that mining leases may be granted to mine the minerals specified in the lease and for associated purposes. Section 6A(1) of the MRA relevantly provides that to mine means to carry on an operation for the purpose of (a) winning mineral from a place where it occurs, or (b) extracting mineral from its natural state. Section 6A(4)(a) provides that extracting does not include a process in a smelter, refinery or anywhere else by which mineral is changed to another substance. The Court held that the effect of these statutory provisions was that s.269(4)(j), in referring to “the operations to be carried on under the authority of the proposed mining lease”, was confined to the physical activities associated with winning and extracting the coal. It did not include the activities of transporting the coal to ports and burning the coal in power stations located overseas. Accordingly, the only emissions to be considered by the Court were the scope 1 and 2 emissions, that is, the emissions arising from the physical activities of winning and extracting the coal. The Court went on to consider the FoE submission that the words “impact” and “environmental” in s.269(4)(j) of the MRA should be given a wide meaning so as to cover all the impacts flowing from the use of the coal, wherever they may occur. The FoE relied on authorities such as Minister for the Environment and Heritage v Queensland Conservation Council Inc55 (the Nathan Dam case) where it was held that the Minister's assessment under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBCA) of the impact of the construction of the Nathan Dam on the Dawson River in Central Queensland should have included a consideration of the impacts of the activities of third parties, regardless of the fact that such activities were not within the control of the project proponents, so long as those impacts may be imputed as within the contemplation of the proponents. The Land Court held that the reasoning in the Nathan Dam case could not be applied to the MRA because of the difference in the definition of the words “action” as used in the EPBCA and “operations” as used in the MRA. The Court also construed the word “environmental” as used in s.269(4)(j) to apply to the operations of “prospecting, exploring and mining”. Section 2 of the MRA (the objects section) suggests that these are the activities which the MRA is intended to regulate and accordingly any consideration of environmental impacts under the MRA must be confined to activities which are authorised and regulated by the MRA. Similarly, in relation to the objections under the EPA, the Court held as a matter of statutory construction that the Court's jurisdiction extended only to a consideration of the activities which fell within the scope of an “environmental authority” under the EPA which is issued for “mining activities”. Section 147 of the EPA defines a “mining activity” as an activity that is authorised under the MRA to take place on land to which the mining tenement relates. It does not therefore apply to activities such as transporting and burning coal.

55 (2004) 139 FCR 24.

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The Court held that the impact of the scope 1 and 2 emissions was not such as to warrant refusal of the proposed mining leases or the environmental authority. An appeal to the Land Appeal Court has now been lodged by the FoE. May 2012