IT’S COMING LIKE IT OR NOT: YOUR GUIDE TO WHAT TO DO
Queensland position:
While about two third of the route from Melbourne to Brisbane will use existing rail corridors, in Queensland the position is different and will require substantial compulsory acquisitions (resumptions) in relation to the following Queensland stages: –
– NSW border (Yelarbon) to Gowrie.
– Gowrie to Helidon
– Helidon to Calvert
– Calvert to Kagaru
– Kagaru to Acacia Ridge/Bromelton
The Yelarbon to Gowrie stage is currently attracting the most concern because of its potential impact on the viability of agriculturally important and valuable Condamine flood plain properties. Equally significant impacts will likely be caused in all stages depending upon the specific and differing impact of resumption on each particular affected landowner.
Purpose and Objective of this Publication
The objective of this publication is to assist any affected parties in making sure you are in a position to achieve the best outcome from any resumption of your property.
We will briefly outline the process and make general suggestions as to the types of preparatory action you should be talking at various stages in the process.
The impact of a resumption can differ vastly from property to property. For example if the resumed land is in poor country and on the boundary of the property so that it has no major impact upon the operation and viability of the property, the position is comparatively simple. It is a case of just making sure you get proper compensation for the value of the resumed land. On the other hand if the resumed land bisects the property it is likely that it will present much more complex issues. Those issues include: –
Access difficulties in trying to operate a property divided by rail line.
Impact on water flows and consequential ramifications including economic, environmental or erosion .
Ongoing economic impact on the cost of operation and ease of management of a divided property.
Process Steps
While there is no legal obligation on the constructing authority (i.e. the party making the resumption) to consult with affected parties prior to issuing a formal notice of intention to resume, the Australian Rail Track Corporation (ARTC) has indicated that it intends to work with the Queensland constructing authority which will be making the required resumptions (Constructing Authority) to consult with affected landowners during the design process.
If your property is likely to be seriously impacted by a proposed resumption then it will be important for you to engage seriously in this informal process as the Constructing Authority may be prepared to agree to variations of modifications that will minimise the impact of any resumption on your operations. We understand that this process has commenced but in many cases without resulting in any significantly useful outcomes for affected landowners.
In order to get the best outcome it will be necessary for you to obtain experienced accounting advice as to the likely impact of the resumption on the ongoing profitability of your operations even at this early stage. If the constructing is already can see you have a significant claim for compensation because of the resumption, it is likely to make them more responsive to changes in order to minimise the likely compensation claim.
Notice of Intention to Resume
The Constructing Authority is required to give you a notice of intention to resume your land. Once that notice is served you have the right to make an objection in writing to the land being taken before a date not less than 30 days after the date of the notice
Matters pertaining to the amount or payment of compensation are not grounds for objection. In general term objectors are entitled to procedural fairness by the Constructing Authority. Despite that in the case of a project such as the Inland Rail our view is that it will only be in exceptional cases that the objection process is likely to totally prevent a resumption. The objection process may however in some cases result in meaningful amendments to the proposed resumption area.
If no objections are made or if after due consideration , the Constructing Authority is satisfied the resumption should proceed then the Constructing Authority can apply to the relevant minister to take the land by means of a gazette resumption notice. This application is required to be made within 12 months after the notice of intention to resume is served
Gazette Resumption Notice – Compensation Rights
From the date of the publication of the relevant gazette, title to the resumed land passes to the Constructing Authority. Parties having an interest in the resumed land whether as owner ,lessee, mortgagee or easement holder have a right to claim compensation under the Acquisition of Land Act !967 (the Act. The amount of compensation can be negotiated between the claimant and the Constructing Authority subject to consent of any mortgagee.
Making a Claim for Compensation
If the claimant is not able to negotiate the amount of compensation , the onus is on the claimant to serve on the Constructing Authority a written compensation claim within three years of the land been taken. The compensation claim must set out various matters set out in section 19 of the Act. In practical terms to key matter is an itemised statement of the claim showing the nature and particulars of each item as well as the total amount of compensation claimed.
In order to maximise the prospects of successfully and promptly negotiating settlement of a compensation claim at the maximum realistic figure it is important that the claim is prepared with care and proper professional advice where the resumption will put at risk or result in the loss of some form of animal welfare certification or approval (such as the RSPCA) or an organic certification or approval the economic loss will be significant. In these and any other cases where the resumption impacts the viability of a business enterprise conducted on the remaining part of the resumed land, it will be vital to obtain specialist accounting advice from accountants experienced both in resumption and also more importantly the complex financial modelling applicable to the relevant industry be that agricultural or some other business. This is imperative in order to fully and properly determine the full extent of ongoing business losses. Some cases will also involve not just establishing the value of the resumed land and economic business losses but may also involve the cost of acquiring replacement land and relocation costs.
Legal, valuation and other professional fees and costs reasonably incurred by the claimant in properly preparing and filing a claim are able to be claimed and so claimants will not be out of pocket for expenses properly incurred.
In many cases it will be of significant financial advantage to ensure that the compensation claim is made and payable in a particular manner to ensure that it does not become taxable. We will be shortly adding a further section to this Guide, contributed by the Toowoomba office of RSM . RSM are very experienced in this type of resumption work and this section will set out some of the key factors for you to consider both in terms of calculating economic loss and ensuring tax effective structuring.
Referral to Land Court
The preferred course both in terms of time and cost is to resolve claims by negotiation with the Constructing Authority. The actions we have suggested above and our approach to these matters are designed to maximise the prospects of negotiating a claim with the Constructing Authority for the highest realistically achievable amount.
If the claimant and the Constructing Authority are not able to resolve the claim either the claimant or the Constructing Authority can refer the matter to the Land Court for de termination. This can be done at any time after the claim has been lodged with the Constructing Authority.
Our Approach
Our approach is as follows: –
Firstly to focus upon the specific circumstances and details of each individual claim in order to fully understand the impact of the resumption on the individual property. Only by adopting this approach can your claim be fully and properly made and the proper amount of compensation paid. Put shortly resumption claims are not sensibly dealt with by class actions because the impact of resumption differs so greatly from property to property.
Secondly in cases where the resumption will have a significant impact on the profitability or viability of an agricultural or other business enterprise, we believe it is critical to obtain the best financial advice in order to determine the full ongoing financial impact of the resumption. It is vital that this advice is both detailed and more importantly robust so that it will stand up to critical review by the Constructing an Authority and its advisors. In this regard we can confidently recommend RSM Australia Pty Ltd. We are confident Will Laird and David Lethbridge in the Toowoomba office have the required specialist experience in such matters and are familiar with local rural and other businesses
Thirdly in relation to valuations again it is important to engage valuers who are experienced in resumption matters and with knowledge of the local area. We have identified a number of local valuers who have a very good track record in producing valuations which are reliable and most importantly stand up to scrutiny in circumstances where other parties are seeking to challenge the valuation.
Fourthly we strongly believe in the old adage “That a champion team will always beat a team of champions” For that reason we have established strategic working relationships with the other vital professional advisors needed in these matters namely accountants and valuers.
What this approach means to clients is that we have the ability to deliver a complete local team (working as a team) and with all the needed skills and local knowledge to deliver the best outcome.