Pfeiffer Nominees Pty Limited v Chief Executive, Department of Transport and Main Roads

This case concerned compensation under the Acquisition of Land Act 1967 for land adjacent to a highway, access to which was impeded by a Declaration made by the Commissioner of Main Roads. At first instance, the Land Court had concluded that the effect of the Declaration should be disregarded by application of the “Pointe Gourde” principle (which requires the effect of a “scheme”, of which an acquisition forms a part, to be disregarded). The Land Appeal Court overturned that conclusion. The Court of Appeal dismissed an appeal from the Land Appeal Court, concluding that the rationale for the Pointe Gourde principle is to avoid unfairness, and that there would be no unfairness in this case if the applicant were compensated according to the actual value of its land (affected by the application of the Declaration).

Morrison and McMurdo JJA and Mullins J

28 May 2019

Background

In 2007, the applicant (now appellant) had some of its land resumed as part of an upgrade to the Captain Cook Highway. [2]. While the land was adjacent to the highway, it did not have access to it, because of a Limited Access Declaration made by the Commissioner of Main Roads in 1983 (“the Declaration”). The effect of the Declaration was that access to the highway could not be obtained without the Commissioner’s prior consent. [3].

At a hearing before the Land Court, the applicant claimed that it was entitled to compensation pursuant to the Acquisition of Land Act 1967, calculated as if the land were unaffected by the Declaration (as if access to the highway had not been legally impeded). [4], [8]. The basis for the argument was the application of the Pointe Gourde principle, which requires the effect of a “scheme”, of which a compulsory acquisition forms a part, to be disregarded when determining compensation. [8]–[14]. As expressed in Melwood United Pty Ltd v Commissioner of Main Roads [1979] AC 426 (quoted at [12]):

“…the landowner cannot claim compensation to the extent to which the value of his land is enhanced by the very scheme of which the resumption forms an integral part: that principle … operates also in reverse.”

The Land Court Member considered that the Declaration and the resumption were part of the same scheme “for the ongoing upgrading of the Captain Cook Highway”. [22]. The Land Appeal Court unanimously overturned this conclusion on the primary basis that the Pointe Gourde principle incorporates a concept of proximity, and that it was erroneous to regard the Declaration and this resumption as part of the one scheme, continuing as if from 1983 (or earlier) (per Henry J and Members Isdale and Stilgoe, each in separate reasons). [25]–[28]. An additional reason given by Henry J and Member Isdale was that the Declaration had existed prior to the applicant’s purchase of the land, and therefore the applicant was effectively seeking to be compensated for a loss which it had never experienced. [27]–[28].

The applicant sought leave to appeal from the Land Appeal Court’s judgment (as required by s 74 of the Land Court Act 2000). [7].

The Court of Appeal’s judgment

McMurdo JA (with whom Morrison JA and Mullins J agreed) began by outlining some of the relevant case law concerning the Point Gourde principle. His Honour noted that the “controversy in many cases, of which the present is yet another example, is the identification of the relevant ‘scheme’”. [14].  As McMurdo JA noted, it was “only by characterising ‘the scheme’ in the general sense that the scheme was the ongoing improvement of the highway” that it could it be said that the Declaration and the resumption were part of the same scheme. [24].

However, his Honour considered that the application of the Pointe Gourde principle was not warranted in this case for at least two reasons. [39]. Firstly, because there was “no evident unfairness in compensating the applicant according to the actual value of its land”. [40]. Secondly, if the scheme were identified as “the ongoing construction and upgrade of the highway” (as the Land Court Member had done), it would be necessary to disregard the effect of this scheme as a whole – not just one component of the scheme (i.e. the Declaration). As his Honour noted, the overall impact of that had not been considered in the proceedings. [41].

His Honour also addressed an argument that the Land Appeal Court had “exceeded the proper bounds of appellate intervention”. [30]. This submission was based on the proposition that the identification of the underlying scheme was a question of fact, “potentially influenced by a variety of considerations, choices and conclusions upon which reasonable minds might readily differ.” [31]. His Honour rejected this argument, noting (per Lord Nicholls in Waters), that this was “not a process of fact-finding as ordinarily understood”. Rather, it involved an exercise of judgment. [32]. Further, the Land Appeal Court had, correctly, only intervened once it had found error in the identification of the scheme by the Land Court Member. [32]–[33].

Accordingly, the Land Appeal Court had been correct to allow the appeal. The Point Gourde principle could not be applied to disregard the effect of the Declaration. Leave to appeal the Land Appeal Court’s decision was granted, but the appeal was dismissed. [42].

W Isdale