Ostroco v Department of Transport and Main Roads
[2012] QLAC 6
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- Unreported Judgment
- Ostroco v Department of Transport and Main Roads[2012] QLAC 6
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Ostroco v Department of Transport and Main Roads[2012] QLAC 6
Ostroco v Department of Transport and Main Roads[2012] QLAC 6
LAND APPEAL COURT OF QUEENSLAND
CITATION: | Ostroco v Department of Transport and Main Roads [2012] QLAC 006 |
PARTIES: | OSTROCO PTY LTD (appellant) v CHIEF EXECUTIVE, DEPARTMENT OF TRANSPORT AND MAIN ROADS (respondent) |
FILE NO/S: | LAC 003-12 |
DIVISION: | Land Appeal Court |
PROCEEDING: | Appeal |
ORIGINATING COURT: | Land Court |
DELIVERED ON: | 11 October 2012 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15 June 2012 |
COURT: | Peter Lyons J Mr PA Smith Mr WL Cochrane |
ORDERS: |
|
CATCHWORDS: | REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – COMPENSATION – RIGHT TO COMPENSATION – PERSONS ENTITLED – LESSEES – where land compulsorily acquired – where appellant lessee requested and was permitted to continue occupation of land on terms different from original lease – where appellant claimed compensation under s 12 (5) of the Acquisition of Land Act 1967 (Qld) – where Land Court held appellant was not entitled to compensation by virtue of s 18 (3) of the Acquisition of Land Act 1967 (Qld) – whether upon written application, the respondent allowed the appellant’s estate or interest to continue uninterrupted, such that s 18 (3) of the Acquisition of Land Act 1967 (Qld) precluded the appellant from claiming compensation |
COUNSEL: | PJ Flanagan SC and PW Hackett for the appellant DR Gore QC and JM Horton for the respondent |
SOLICITORS: | H Drakos & Company Solicitors for the appellant Clayton Utz for the respondent |
- [1]Ostroco Pty Ltd (Ostroco) was the lessee of shop 17 in the Coorparoo Shopping Mall. Land, including the leased premises, was resumed on 31 July 2009. Ostroco claimed compensation under the Acquisition of Land Act 1967 (Qld) (AL Act). The Chief Executive, Department of Transport and Main Roads (respondent) contended, and the Land Court determined, that compensation was neither claimable by nor payable to Ostroco, by virtue of s 18(3) of the AL Act, Ostroco having requested and been permitted to continue in occupation of the shop after the resumption. The appeal challenges this determination.
Background
- [2]Ostroco entered into a written lease for the shop (described as Lot 20 in Building Units Plan 103054), initially for a term of three years from 1 January 2003, with two options for renewal, each for a further term of three years. It might be noted that the lease conferred rights in respect of the use of common areas of the mall. It was not contentious that the lease was registered; and that both options were duly exercised.
- [3]By letter of 23 March 2009, the respondent gave notice to Ostroco of its intention to resume Lot 20 for the purposes of the Eastern Busway (in particular, a below ground bus station). As has been mentioned, as a consequence of the publication of a notice in the Government Gazette on 31 July 2009, Lot 20 was taken by the respondent from that date (resumption).
- [4]Thereafter, Ostroco remained in occupation of Lot 20. On 15 April 2010, its director, Peter Weiss, wrote a letter to Mr Mark McDonald, Director (Property Services), Department of Transport and Main Roads. The letter complained of the decrease in commercial activity in Coorparoo consequent on the announcement of the proposed Busway. The letter stated that Ostroco was happy to pay rent while it continued in occupation of the premises, pending the negotiation of relocation costs. It proposed the terms and conditions of the lease be those in force prior to the resumption; save that the proposed rental was $2,000 per month, inclusive of outgoings.
- [5]On 14 May 2010, consequent on a meeting between representatives of the respondent and Mr Weiss, a letter was sent to Mr Weiss advising that the respondent was prepared to rent Lot 20 on certain terms and conditions. Rental was to be $3,000 plus GST, payable monthly. The “agreement” was to commence on 1 April 2010. The term was described as follows:
“The term of the lease is on a month to month basis. However, the Department will not require the premises for works until mid 2012.”
- [6]Provision was also made for payments for outgoings, a bond, annual review of rental, the obtaining by Ostroco of public indemnity insurance, and the payment of rent from 1 September 2009. By letter of 19 May 2010, Mr Weiss agreed to these terms. A draft Retail Shop Tenancy Agreement was prepared, but not executed.
- [7]Ostroco sent to the respondent a compensation claim under the AL Act, under cover of a letter dated 22 July 2010. It filed an application for compensation on 19 June 2011, which resulted in the determination of the Land Court, mentioned previously.
Statutory provisions
- [8]It is first necessary to identify the legal consequences of the publication of the resumption notice in the Government Gazette on 31 July 2009. They are specified in s 12(5) of the AL Act as follows:
“On and from the date of the publication of the gazette resumption notice the land thereby taken shall be vested or become unallocated State land as provided by the foregoing provisions of this section absolutely freed and discharged from all trusts, obligations, mortgages, charges, rates, contracts, claims, estates, or interest of what kind soever, … and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act ….”
- [9]The right to claim compensation, conferred by s 12(5), is further regulated by s 18 of the AL Act, which includes the following:
“18 By whom compensation may be claimed
- (1)Subject to subsections (2), (3), (4A) and (5) compensation whereto a right is had under section 12 may be claimed from the constructing authority under, subject to and in accordance with the provisions of this part.
…
- (3)Compensation shall not be claimable by or payable to a person who is lessee, tenant or licensee of any land taken if the constructing authority upon written application allows the person’s estate or interest to continue uninterrupted.”
Effect of s 18(3)
- [10]The Land Court held that Ostroco’s letter of 15 April 2010 constituted a written application for the purposes of s 18(3); and that the result of it was that the respondent had allowed Ostroco’s “estate or interest to continue uninterrupted”; with the consequence that compensation was not claimable by or payable to Ostroco. It therefore ordered that Ostroco’s claim for compensation be refused.
- [11]Ostroco, in this appeal, contends that the letter of 15 April 2010 was not a written application for the purpose of s 18(3); and further that the respondent did not allow its estate or interest to continue uninterrupted. In support of the latter contention, it submitted that the Land Court member erred by equating the continuation of occupation with the continuation of an estate or interest. These submissions are controverted on behalf of the respondent.
- [12]The submissions of Ostroco should be accepted, for the reasons which follow.
- [13]It is convenient to commence with a consideration of s 18(3). The appeal has been conducted on the basis that Ostroco was, at the time of the resumption, the lessee of Lot 20. It was not suggested that, at that time, its interest was not a registered interest, and accordingly that it did not enjoy the benefit of the indefeasibility provisions of the Land Title Act 1994 (Qld).
- [14]In s 18(3), the expression “the person’s estate or interest” which occurs towards the end of the subsection is to be understood by reference to the earlier expression “a person who is lessee, tenant or licensee of any land taken”. The expression which occurs towards the end of the subsection is intended to describe that by virtue of which the person is a lessee, tenant or licensee.
- [15]Reference was made to the definition of the expressions “estate” and “interest” in s 36 of the Acts Interpretation Act 1954 (Qld) (AL Act). The definition of the expression “estate” is an inclusive definition. As will be seen, it is that term which is the primary focus in the present appeal. It is unnecessary to consider its extended effect as a result of that definition, even if the definition were applicable.[1]
- [16]It is well recognised that a lessee has an estate in land[2]. Given the reference to “a person who is a lessee” in the early part of the subsection, the reference to that person’s “estate” would appear to include a reference to what is held by a lessee as the result of a grant of a lease.
- [17]While ordinarily the natural (or grammatical) meaning of a provision is to be adopted as the meaning intended by the legislature, a number of factors may warrant the adoption of a different meaning, for example, the context, the consequences of a literal construction, the purpose of the statute or the canons of construction. The task of the Court is to give the words of the provision the meaning which the legislature is taken to have intended them to have[3].
- [18]There is reason not to read s 18(3) in a way that is completely literal. It is apparent from s 12(5) of the AL Act that, on the publication of the resumption notice, the land is “absolutely freed and discharged” from such an estate, the estate being converted into a right to claim compensation under the AL Act. It was not suggested by either party, and it is unlikely, that s 18(3) was intended to permit a constructing authority to alter the effect of s 12(5). Indeed, Senior Counsel for the appellant drew attention to the provisions of s 17 of the AL Act, which makes elaborate provisions for the consequences of an action which alters the effect of s 12(5). Unless s 18(3) is intended to have the effect that, at least so far as a lease is concerned, s 12(5) is not to take effect, the publication of a gazette resumption notice brings a lessee’s estate to an end, and to that extent, “interrupts” it. It then becomes necessary to search further for the meaning which the legislature is to be taken to have intended s 18(3) to have.
- [19]It might be observed that s 18(3) is intended to take effect consensually. So much is apparent from the fact that it takes effect only if there was a written application by the former lessee; and the response by the constructing authority, described in the subsection.
- [20]However, the relevant response is to allow “the person’s estate … to continue uninterrupted”. The language used in the subsection suggests something significantly different from merely permitting the former lessee to continue to occupy the land. That language suggests, in the case of a lessee, the creation of an estate; and an estate which might in some sense be identified with the estate held prior to the resumption.
- [21]Section 18(3) is intended to restrict the right to claim compensation. A provision which confers a right to compensation following upon the resumption of land should be construed with all the generality that the words of the provision permit[4]. Provisions relating to compensation for the compulsory acquisition of land are intended to ensure that the person whose land has been taken is justly compensated; and such provisions should be construed with the presumption that the legislature intended the claimant to be liberally compensated[5]. The considerations which underlie these principles would suggest that the meaning of a provision restricting a right to claim compensation, such as s 18(3), should not be extended, unless an extended meaning is clearly intended. This approach is consistent with the principle that, in the absence of clear words, legislation is not to be construed as intending to interfere with economic rights and principles without compensation[6]. To interpret the subsection in a way that is consistent with the respondent’s submissions would give rise to cases where there has been an interference with an economic interest, without a consequent right to compensation. To extend the natural meaning of the expression “the person’s estate” so as to equate a term of some length with a monthly tenancy would extend the operation of s 18(3) in a way that is not consistent with these principles.
- [22]It follows that s 18(3) does not prevent a lessee from claiming and recovering compensation, unless the lessee is granted an estate. Further, the expression, “the constructing authority … allows the person’s estate or interest to continue uninterrupted” would indicate an intention on the part of the legislature that the estate must be identical to, or at least closely approximate, the estate held by the lessee immediately before the resumption.
- [23]In the present case, in the period immediately after 31 July 2009, Ostroco had no right to occupy shop 17. It was, at best, a tenant at will. That is not an estate[7]. That remained the position until 19 May 2010.
- [24]Under the agreement reached between the parties, Ostroco was granted a monthly tenancy. That cannot be equated to the estate which it held immediately prior to the resumption, which was for a term expiring on 31 December 2011. The fact that Ostroco may have been permitted to occupy the premises for a longer period cannot affect the construction of s 18(3).
- [25]It follows that Ostroco’s estate was not allowed to continue uninterrupted, and it was not precluded from claiming compensation.
- [26]The letter of 15 April 2010 did not seek a continuation of the lease which had existed immediately prior to the resumption. Rather it referred to a continued occupancy of the premises until relocation costs were negotiated. It was therefore not a written application for the continuation of the estate previously enjoyed by Ostroco.
- [27]The respondent has submitted that Ostroco has, in the events which have happened, suffered no loss. It is not possible on this appeal to determine the correctness of that submission. Moreover, the issue determined in the Land Court was whether the claim was barred, not whether it was of value. The submission is not relevant to the determination of the appeal.
Conclusion
- [28]The appeal should be allowed, and the matter remitted to the Land Court for the determination of Ostroco’s claim for compensation.
ORDERS
- Appeal allowed.
- The matter be remitted to the Land Court for the determination of the claim for compensation by Ostroco Pty Ltd.
PETER LYONS J
PA SMITH
MEMBER OF THE LAND COURT
WL COCHRANE
MEMBER OF THE LAND COURT
Footnotes
[1] See s 4, or possibly 32A, of the AL Act. It may be doubted whether the definition of “interest” could be applicable, because it includes a legal estate in land, already covered by the expression “estate” in s 18(3).
[2] See Megarry & Wade The Law of Real Property (7th ed) at 3-010; Bradbrook, MacCallum and Moore, Australian Real Property Law (4th ed) [2.65], [2.135], [2.140].
[3] See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [78].
[4]Marshall v Director-General, Department of Transport (2001) 205 CLR 603, 623; see also Roads and Traffic Authority of NSW v Heawood (2002) 54 NSWLR 289 [296]-[297].
[5]Marshall at [48], per McHugh J.
[6]Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30 at [43].
[7]Sorrento Medical Services Pty Ltd v Chief Executive, Department of Main Roads [2007] 2 Qd R 373 at [75].