Disturbance is a term used to refer to the economic loss that a dispossessed owner suffers when required to vacate the land taken. In Queensland, disturbance forms part of the assessment of compensation under the Acquisition of Land Act 1967 (ALA). Section 20(1)(b) of the ALA indicates that, in assessing the compensation to be paid, regard must be had not only to the value of the land taken but also the claimant's "costs attributable to disturbance."
A complete definition of the "costs attributable to disturbance" is contained in section 20(5) of the ALA. It includes:
- legal costs and valuation or other professional fees relating to the preparation of the claim for compensation;
- costs associated with the purchase of a replacement property, including stamp duty and financial costs associated with the discharge of a mortgage and executing a new mortgage;
- removal expenses;
- connection fees for services or utilities at a replacement property;
- loss of profits resulting from interruption to the claimant's business; and
- other economic losses and costs (for instance, the costs of school uniforms for children enrolled in a new school because of relocation from the land taken).
Any disturbance items claimed must be "reasonably incurred". That test involves two components – first, whether the costs have actually been incurred (or will be incurred) by a claimant, and second, whether the costs are reasonable. That test of "reasonableness" involves looking at what a reasonable person in the position of the claimant would have done, or caused to be done. The fees and charges for the work must also be reasonable. In preparing or assessing a claim for compensation, it is important to justify or seek justification as to the disturbance items claimed. This is usually done by providing invoices for each disturbance item. Where the costs are anticipated, or estimated, two or more quotes should be provided.
A second check is that the economic losses claimed must not be too remote and must be the direct and natural consequence of the taking of land. This test applies particularly to claims for business loss, financial costs associated with the use of the land taken and other economic losses and costs incurred as a result of the taking of the land. The Land Appeal Court has indicated that attention must be paid to the nature and degree of any causal relationship between the taking of the land and the claimed loss. Questions include whether or not the claimed loss was an immediate consequence of the taking of the resumed and or whether a number of intervening events incurred before the loss was suffered. Ultimately, a judgment is required about whether or not the loss is compensable.
Finally, unlike compensation for the value of land taken, the assessment of compensation for disturbance is not fixed by the date of acquisition. By their very nature, expenses associated with disturbance items are often incurred after the land is taken.
Reaching agreement about disturbance items can assist with early resolution of claims for compensation. Finding common ground is important because, in complex cases where the claim for compensation is referred to the Land Court for determination, disputes about disturbance items can significantly extend the length of a trial.
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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.
