26 March 2007
When a Queensland Government Department or agency acquires land, it must compensate those with an "interest" in land - but what is an "interest"? The Court of Appeal has broadened the class of persons entitled to compensation in its recent decision that a licence to use the land is an "interest in land" for the purposes of the Acquisition of Land Act 1967 ("the Act") (Sorrento Medical Service Pty Ltd v Chief Executive, Department of Main Roads [2007] QCA 73).
Background
The claimant was granted a licence to use car parking spaces adjacent to a medical practice that it leased. The Court of Appeal recognised that the licence was a valuable contractual right. Part of the land on which the car parking spaces were located was compulsorily acquired by the Department of Main Roads.
The question for consideration by the Court of Appeal was whether the licence came within the category of interests that could be compensated under the Act.
The Land Court and the Land Appeal Court had both held that a licence was not an estate or interest in land within the meaning of section 12(5) of the Act. The Land Appeal Court held that the phrase "estate and interest" in section 12(5) of the Act refers to rights of a proprietary or quasi proprietary nature.
What is an interest in land?
The term "interest" is not defined in the Act. In separate judgments, President McMurdo and Justice Chesterman held that the word "interest" in section 12(5) of the Act should be given the same meaning as in the Acts Interpretation Act 1954 ("AIA"). The broad definition of "interest, in relation to land or other property" in the AIA includes a right, power or privilege over, or in relation to, the land or other property. The Court held that a proprietary interest was not required to be able to claim compensation.
Justice Holmes dissented. She stated that the words "entitled to the whole or any part of the land" in section 12(5) of the Act cannot be ignored and they suggest an interest of a proprietary nature and not merely an interest which has some connection with the land.
Implications
A broader class of persons will be entitled to claim compensation under the Act.
A constructing authority will have to make an assessment of all interests of land (not merely the interests registered on title) to determine whether persons should be served with a notice of intention to resume. This is because a notice of intention to resume must be served on "every person who to the constructing authority … will be entitled to claim compensation" under the Act.
The Sorrento decision does not necessarily mean that every person with a right, power or privilege over land will have to be served with a notice of intention to resume. This is because not all of these interests will have value and as such would not support a compensation claim. However, this issue will now need to be assessed on a project by project basis.
Each constructing authority should revisit current projects to determine if there are other persons who may be entitled to compensation.
