It is well established in Queensland that a claim for costs attributable to disturbance can include reasonable expenses incurred in obtaining professional help (from lawyers, valuers, town planners and the like) in formulating a claim for compensation. Claims for owner's time are less clear cut.
Historically, the Courts in Queensland had consistently denied claims for owner's time spent in preparing a claim for compensation. That position shifted with the decision of the Land Appeal Court in Heavey Lex No 64 Pty Ltd v Chief Executive, Department of Transport (2001) 22 QLCR 177 (Heavey Lex). Following Heavey Lex, the costs attributable to the time spent by a claimant in preparing a compensation claim are potentially recoverable but only in certain, very specific, circumstances.
While clearly in the public interest, the resumption of land is often the cause of understandable anguish for affected land owners. Claimants in resumption matters are unwilling litigants and can hardly be expected to renounce a claim for compensation after their land is compulsory acquired. That is, owners have no real choice but to file and pursue a claim for compensation and are likely to devote considerable time to protecting their interests. Against that, resuming authorities should not be exposed to ambit claims for time spent by owners in preparing a claim where there is no evidence of actual loss.
In Heavey Lex, the Land Appeal Court struck a balance by indicating that owner's time may be claimed where it can be demonstrated that the claimant, in devoting his or her own time to the claim, has suffered a "compensable loss". Heavey Lex involved a claim for just under $100,000 for time spent by a director and an employee in the preparation of the company's claim for compensation. While the claim failed at the threshold due to a lack of evidence (there was no evidence that the company paid the director at relevant times nor any evidence that the employee had charged for his services, or that the company was legally obliged to pay for those services, meaning it could not be said that the company suffered any loss) the decision marked a shift away from a blanket refusal on claims for owner's time.
Since the Heavey Lex decision, the Land Court has recognised that it is possible, under the Acquisition of Land Act 1967 (ALA), for an applicant to make out a claim for owner's time, relying on the authority of Heavey Lex and section 20(5)(g) of the ALA. Section 20(5) of the ALA deals with the costs attributable to disturbance and subparagraph (g) allows a claim for "other economic losses and costs reasonably incurred by the claimant that are a direct and natural consequence of the taking of the land".
In the decision of Lowry v CoordinatorGeneral [2012] QLC 0026, the Land Court provided some practical boundaries around claims for owner's time. It indicated that an owner cannot be compensated simply for time spent opening correspondence or doing background research on a claim. A value has to put on the owner's time based on some quantifiable formula, with some link to a form of economic loss.
Examples of costs to owners that could be easily, and reasonably, quantifiable include:
- taking leave from work to be present while a valuer undertakes a full inspection of a landholders property;
- loss of actual paid employment;
- employment of substitute or extra, replacement labour.
The overarching test, in each case, is whether the activities are reasonable in the circumstances and whether the level of remuneration is reasonable. It should also be noted that a claim for owner's time is separate to a claim for business loss, or lost profits.
In a claim for owner's time, it will not be sufficient to simply state that a claimant spent an hour or so per week trying to resolve a claim. Proper particulars are required, explaining why the time is claimed and, where necessary, appropriately verifying expenditure. It will be necessary to not only demonstrate that a certain amount of time was spent on relevant activities, that the time incurred was reasonable and that the amount claimed for that time is reasonable but also that there has been some form of economic loss. In the absence of evidence of actual economic loss, an owner is not entitled to recover their time spent in preparing the claim for compensation.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
