Australia: Land Court of Queensland refuses to strike out one claim for compensation but prevents another after finding an estoppel

In brief

The case of Kube & Anor v Sunshine Coast Regional Council [2017] QLC 48 concerned an application by the Council in the Land Court of Queensland to strike out the Applicants' claims for compensation under the Acquisition of Land Act 1967 (ALA) for developments, identified as the "first works" and "second works", which were undertaken prior to a compulsory acquisition of the Applicants' land at 76 Wharf Road, Bli Bli.

The Court ultimately refused to strike out the claim for the first works after concluding that there was no evidence to confirm that allowing the proceeding to continue was vexatious or prejudicial to a fair hearing. However, the Applicants' claim relating to the second works was struck out after it was determined that an estoppel prevented submissions being heard that effectively sought to revisit previous enforcement orders made by the Planning and Environment Court.

The Planning and Environment Court made enforcement orders against the Applicants after determining that a development offence had occurred

The Council provided written notice of its intention to perform stormwater drainage maintenance on the Applicants' land at 76 Wharf Street, Bli Bli. The Applicants notified the Council verbally that it would undertake the works personally.

The Applicants proceeded to carry out earthworks on the land, identified as the first works, which included a 455 metre long drainage channel that had no relation to the Council's requirements. The Council compulsorily acquired the affected land for of an easement before bringing proceedings against the Applicants in the Planning and Environment Court.

The Planning and Environment Court determined that the Applicants had committed a development offence by failing to carry out the first works in accordance with a relevant development permit. The Planning and Environment Court subsequently made enforcement orders which required the Applicants to carry out works, identified as the second works.

The Applicants sought compensation for the completed works

The Applicants later filed an originating application in the Land Court which sought compensation for the Council's compulsory acquisition of the land under the ALA.

Section 20(1)(b) of ALA allowed the Court to have regard to the Applicants' "costs attributable to disturbance". Section 20(5)(g) of the ALA defines costs attributable to disturbance to include "other economic losses and costs reasonably incurred by the claimant that are a direct and natural consequence of the taking of the land".

The Council brought an application seeking to strike out the Applicant's compensation claims

The Council brought an application in the Land Court which sought to strike out the Applicants' compensation claims on the following grounds:

  • the claims disclosed no reasonable basis for compensation under the ALA; and
  • the claim relating to the second works sought to revisit enforcement orders made by the Planning and Environment Court and therefore amounted to an abuse of process.

The Council argued that there was nothing before the Court to support the Applicants' claim while the Applicants relied on precedents established in earlier decisions

The Council submitted that it had not requested the Applicants to carry out the first works or any part of them and that the first works were carried out prior to the acquisition of the land and without formal notice to the Council.

Relying on these facts, the Council contended that there was nothing before the Court to demonstrate that the Applicants had suffered losses or costs reasonably incurred and as a direct and natural consequence of the first works.

The Applicants submitted that all facts upon which their claims were based, including that the first works were undertaken in the knowledge that the Council's acquisition was imminent, were capable of proof. The Applicants argued that for the Council to succeed in striking out the claims it must establish that they were obviously untenable within the meaning of section 20 of the ALA.

The Applicants directed the Court to the decision of the High Court in General Steel Industries Inc v Commission for Railways (NSW) (1964) 112 CLR 125, in which the Court held that the jurisdiction to strike out the items of a claim should be used sparingly, and only where the prospects of success were untenable.

Reference was also made to the decision of the Court of Appeal in Brisbane City Council v Mio Art Pty Ltd & Anor [2011] QCA 234, where the Court held that reference to the date of the acquisition is not explicitly required when assessing compensation claims.

The Applicants also submitted that in Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads (2013) 34 QLCR 314 the Land Court had supported an argument that section 20(5) of the ALA, particularly paragraphs (f) and (g) allowed for the award of compensation for a loss suffered prior to the acquisition of land.

The Court found no reasonable basis to strike out the Applicants' claim for compensation for the first works

The Court referred to the decision in George D Angus Pty Ltd v Health Administration Corporation [2013] NSWLEC 212, in which the NSW Land and Environment Court found the words "direct" and "natural" in comparable legislation are designed to limit compensation by reference to the nature or degree of the required causal relationship.

After considering an agreed statement of facts provided by the parties, the Court determined that the key issue was whether the first works were attributable to disturbance within the meaning of the ALA and whether the Applicants' claim was so futile that it should be struck out.

The Court refused to strike out the Applicants' claim over the first works after concluding that there was no evidence to support the argument that allowing the application to continue would be vexatious or have a tendency to delay or prejudice a fair hearing.

The Council argued that the Applicant's claim over the second works was an abuse of process

The Council argued that the second works were ordered by the Planning and Environment Court and that the Applicants' claim for compensation was an abuse of process as it effectively sought to litigate a matter which had already been determined. The Council submitted that if the claim was permitted it would create an inconsistency with the Planning and Environment Court's decision.

Whilst the Applicants accepted that a party will be estopped from bringing an action which conflicts with an earlier judgment, they submitted that such a scenario was not present as the claim sought compensation only for those works which the Planning and Environment Court had ordered, but which exceeded the extent of work that needed to be done.

The Court found that an estoppel arose against the Applicants' claim for the second works

The purpose of the Planning and Environment Court's enforcement order was found to require the Applicants to, as far as practicable, restore the land to its state prior to the development offence being committed. Upon review, the Land Court found that a reading of the orders led to the inescapable conclusion that the specified works were necessary to fulfil the stated purpose.

The Land Court held that the Applicants were therefore estopped from arguing that the Planning and Environment Court orders exceeded the extent of the works which were required to return the land to its state prior to the development offence. In finding that the Applicants were prevented from arguing this claim the Land Court found that it was unnecessary to consider whether related submissions were an abuse of process.

The Court nevertheless addressed this issue and found that if the claims were allowed for the second works they would effectively revisit the Planning and Environment Court's decision and amount to an abuse of process.

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.

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Authors
Ian Wright
 
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