Arcus Shopfitters Pty Ltd v Western Australian Planning Commission
[2002] WASC 174 (S)
ARCUS SHOPFITTERS PTY LTD -v- WESTERN AUSTRALIAN PLANNING COMMISSION [2002] WASC 174 (S)
| Link to Appeal : |
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| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 174 (S) | |
| Case No: | CIV:1377/1998 | 2, 3, 610, 1317, 2024, 2729 MAY, 23 & 29 AUGUST 2002 | |
| Coram: | PULLIN J | 28/06/02 | |
| 11/10/02 | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Interest awarded | ||
| D | |||
| PDF Version |
| Parties: | ARCUS SHOPFITTERS PTY LTD WESTERN AUSTRALIAN PLANNING COMMISSION |
Catchwords: | Interest on compensation Compound interest or simple interest |
Legislation: | Land Administration and Public Works Act 1902, s 63(d), s 63(e) Supreme Court Act 1935, s 142 |
Case References: | Bond v Barrow Haematite Steel Co [1902] 1 Ch 353 Marshall v Director-General, Department of Transport (2001) 205 CLR 603 Re Kearney; Ex parte Jurlama (1984) 52 ALR 24 Zangzinchai v Milanta (1994) 125 ALR 265 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 11 OCTOBER 2002 FILE NO/S : CIV 1377 of 1998 BETWEEN : ARCUS SHOPFITTERS PTY LTD
- Applicant
AND
WESTERN AUSTRALIAN PLANNING COMMISSION
Respondent
Catchwords:
Interest on compensation - Compound interest or simple interest
Legislation:
Land Administration and Public Works Act 1902, s 63(d), s 63(e)
Supreme Court Act 1935, s 142
(Page 2)
Result:
Interest awarded
Category: D
Representation:
Counsel:
Applicant : Mrs L E Rowley
Respondent : Mr C B Edmonds SC & Ms L E Christian
Solicitors:
Applicant : McLeods
Respondent : State Crown Solicitor
Case(s) referred to in judgment(s):
Bond v Barrow Haematite Steel Co [1902] 1 Ch 353
Case(s) also cited:
Marshall v Director-General, Department of Transport (2001) 205 CLR 603
Re Kearney; Ex parte Jurlama (1984) 52 ALR 24
Zangzinchai v Milanta (1994) 125 ALR 265
(Page 3)
1 PULLIN J: I earlier delivered reasons for decision in which I determined that the balance of the compensation which should be paid after taking into account advance payments was $2,218,499.06.
2 I must now decide an issue concerning the interest to be paid on that sum.
3 The applicant's prayer for relief in relation to interest read:
"The applicant claims
25.1.8 Interest on the aggregate of the foregoing amounts inclusive calculated at 8% ie the rate provided by the Act or at such other rate or rates or for such other period or periods as the court may allow whether pursuant to s. 32 of (sic) s. 142 of the Supreme Court Act 1935 or otherwise adjusted in respect of the advance payment already made for a period from 14 November 1995 to the date of payment of the amount awarded by the Court."
4 Counsel for the applicant contends that interest should be awarded under s 63(e) of the Land Acquisition and Public Works Act 1902 (the "Act") and that interest should be at the rate ruling at the date of resumption (ie 8 per cent) and that interest should be compounded.
5 The respondent contends that interest should be awarded under s 63(d) of the Act. The respondent agrees that if that is the section which applies, then the discretion of the Court should be exercised to allow interest at the rates provided for under s 142 of the Supreme Court Act. The respondent does not agree that compound interest should be awarded.
6 Before I deal with the main issues, I should deal with the applicant's submission that the respondent had conceded that s 63(e) of the Act applied. In my view, negotiations between the parties concerning interest involved no concession of any kind by the respondent, other than those announced by counsel for the respondent in open court. No concession was made that s 63(e) applied. However, the question at hand involves a jurisdictional question which has to be decided before I can make any orders. That question requires me to first decide whether or not the land resumed "produced any rents or profits". If it did, s 63(d) applies. If not, then s 63(e) applies.
(Page 4)
Did the Land Produce any Rent?
7 The only evidence on the point, according to the submissions of counsel, was the evidence of Dr Arcus at pages 371 and 400 to 402 and the minutes of a meeting of the directors of Arcus Shopfitters Pty Ltd on 25 October 1995. At page 371-372 of the transcript, Dr Arcus was cross-examined by counsel for the respondent. The passage of cross-examination was as follows:
"Yes. I need to ask you this, and I'm afraid I'm jumping around in time but at the end – that is to say you closed the business or closed the factory in the end of December 1995 and you gave up possession some 5 or 6 months later. Do you recall that? I think it was ?---Gave up possession?
Yes?---I think we gave up possession – it was either in January or February. Anyway, the date is on record.
Yes. I think it may have been a little later. My recollection might be wrong too but I think ?---I will hazard a guess that it was January 18.
Right. Can you assist us with this: at that time in December 95 part of the premises were being leased, were they not, under some arrangement with a tenant who was using part of the premises for – I can't remember, was it carparking, or something of that order?---That 's right.
Do you remember the name of the tenant?---Yes, I do.
Who was that?---Bob Maher.
All right?---He was the gentleman who owned and operated what was then a restaurant or nightclub occupying what was the old post office on Aberdeen Street, almost opposite us.
Can you assist us with a date? From about when was he renting the property and when did he have to vacate? Did he vacate at the same time that you gave up possession?---No. I think Main Roads allowed him to stay for some time.
All right, thank you?---As for when he started, no, I can't remember. I can't put a date on that but it was, I would say, a year or so before we had to quit.
(Page 5)
- Could I have document number 1 and page 108, thank you?
This is minutes of the directors in October 95, 25 October.
Do you see it on your screen, Dr Arcus?---Yes. I may have it here.
You appear to be present? There seems to be a reference there to Boss Entertainment?---That's it.
Is that the same as Mr Maher?---That's right.
Is Mr Maher Boss Entertainment?---He is the major domo of that institution, yes.
I take it then that he was there from 25 October 1995 until, as you understand it, after the date that you gave up possession of the premises?---That's right.
Very well, thank you. Dr Arcus, was that on 138 Aberdeen Street or on 154 Aberdeen Street?---With respect to the parking arrangement?"
8 In re-examination, at pages 400 and 401, there were the following questions and answers:
"Dr Arcus, do you remember the questions this morning concerning the arrangement with Boss Entertainment, Mr Maher?---Bob Maher?
Yes?---Yes.
Can you see it on the screen there, opposite Parking?---Yes, Boss Entertainment, that's him.
Is that an accurate representation of the arrangement with Mr Maher?---Just a minute, I'll read it.
Thank you.
PULLIN J: It's apparently not an exhibit yet, Mrs Rowley.
ROWLEY, MS: No. I did note that, thank you, your Honour?---I can't swear to the exact numbers there, my memory is not that good, but the general purport of this is correct.
(Page 6)
- It says, 'suggested details of an agreement.' Was that arrangement in place at the date of these minutes?---Would you say that again?
Was that arrangement, the suggested details of the agreement, in place at the date of these minutes, and perhaps we could scroll up to the top of the page to check the date of the minutes.
Do you see the date of the minutes, 25 October?---Yes.
Yes. Have you any idea when that arrangement was put into place?---No, but I would say very soon after.
Very soon after?---It might even have started before that meeting.
Well, it doesn't seem to be suggestive. 'The suggested details of an agreement'
EDMONDS, MR: That's leading again, with respect, your Honour.
ROWLEY, MS: The rental obtained by Arcus in respect of that arrangement, would that appear in their annual turnover for that year?---Would it appear in the annual?
Turnover for 1995?---In the accounts you mean. Would it appear in the accounts?
Yes?---Yes.
It would. It would be treated like that, would it, as part of the income?---It wouldn't be shown in the annual accounts under Boss Entertainment or anything like that.
No, but it would be part ?---No, you wouldn't find it there. It would be lumped in with a whole host of miscellaneous income.
I tender that page, your Honour.
PULLIN J: What document is this in, Mrs Rowley?
ROWLEY, MS: This is document number 1, your Honour, so it's 1.108.
(Page 7)
- PULLIN J: All right. So page 108 in document 1 will be exhibit 1.108.
EXHIBIT 1.108 Plaintiff Arcus Shopfitters Pty Ltd minute book 1975-1997 – page 108."
9 Exhibit 1.108 was a set of minutes of a meeting of directors of Arcus Shopfitters Pty Ltd on 25 October 1995. Arcus personnel attended the meeting. Mr Maher did not attend. No-one else from Boss Entertainment attended the meeting. The item in the exhibit relevant to this issue was as follows:
"PARKING. Boss Entertainment, the operators of a nightclub soon to open in the old post office on the corner of Parker Street, have requested the use of our yard for their staff for parking of up to 10 cars during the day, and night parking for nightclub clients. They have suggested $200 per month for day parking and $1/car/night payable to Arcus.
Suggested details of an agreement were submitted by R. Arcus and were accepted, but it was to be put to Boss that a flat fee of $1000/month be paid instead of the day fee plus $1/night/car for night parking."
10 The meeting therefore took place two days before the resumption notice was published in the Government Gazette. The minutes of the meeting record the fact that Boss Entertainment had requested the use of the yard for parking, and they had "suggested" a rental per month for day parking and an amount per car per night. The minutes record that the details of "an agreement" were submitted by R Arcus "and were accepted" but it was to be put to Boss that a flat fee of $1000 per month be paid instead of the day fee plus a rate per vehicle for night parking. In my opinion, that reveals that negotiations were still under way and had not been concluded. No agreement had been reached concerning rent. The cross-examination at pages 371 to 372 proceeds on the assumption that there was an arrangement of some kind in place, but it is clear that Dr Arcus has a faulty memory about the details. At page 400, Dr Arcus was asked in re-examination whether he had any idea when the "arrangement" was put into place, and his answer was "no". He speculates that it was soon after 25 October 1995, and he speculates also that it might have started before the meeting. Ignoring the speculation, and accepting Dr Arcus' evidence that he had no idea when the arrangement was put into place, means that the minutes of meeting provide the only certainty about the situation concerning rent.
(Page 8)
11 In my view, the minutes (Ex 1.108) show only that negotiations were taking place and that Boss Entertainment had made a proposal and that Arcus Shopfitters Pty Ltd was to make a counter proposal. Even if I am wrong and the minutes of the meeting should be read as stating that the Boss Entertainment "suggestion" was an offer which was "accepted", there is no evidence that such acceptance was communicated to Boss Entertainment.
12 I find that the resumed land was not producing any rent on 27 October 1995 or between that date and January 1996 when the applicant vacated the premises. There is no suggestion that the land produced any rent after January 1996.
Was the Land Producing Profits?
13 There was a debate about the meaning of the word "profits". The applicant pointed to the fact that Arcus Shopfitters Pty Ltd did not make a trading profit in the last six years of its existence as a business operating from the subject land.
14 The respondent, however, argues that the word "profits" in s 63(d) is not to be read as a reference to a "trading profit", or to an "accounting profit", or to a "gross profit" or "net profit". The respondent's submission was that the word "profits" means simply a reference to revenue earned as a result of the use of the property.
15 The ordinary meaning of the word "profit" can vary, depending on the context.
16 It may mean:
"1. … pecuniary gain resulting from the employment of capital in any transaction …
2. … returns, proceeds, or revenue, as from property or investments.
3. Econ. the surplus left to the producer or employer after deducting wages, rent, cost of raw materials, etc.
4. … such additional benefits as interest on capital, insurance, etc.
5. advantage; benefit; gain …" (Macquarie Dictionary).
(Page 9)
17 Neither party has cited any authority to me in relation to the meaning of the word.
18 In Bond v Barrow Haematite Steel Co [1902] 1 Ch 353, it was noted that no single definition of the term "profit" will fit all cases.
19 If the word "profits" was here intended to mean "trading profit" or an "accounting profit", ie a net or gross profit, then it would not fit very well with s 63(d)(i), because from the amount of "profits" must be deducted the reasonable cost of "collection". If "profits" meant "net profit", then the cost of collection would already be reflected in the "net profit".
20 The word "collection" also gives a hint as to the meaning of the word. The word "collection" can refer to the gathering of money, ie revenue.
21 In my opinion, the word "profits" is to be equated with "revenue".
22 On 27 October 1995 and for some weeks after 27 October 1995 until the factory was shut in December 1995, Arcus Shopfitters Pty Ltd earned revenue from the factory that operated on the land, even though it was revenue which, when added to revenue for the rest of the year and expenses for the year deducted, made no accounting profit for Arcus Shopfitters Pty Ltd for the relevant financial year.
23 Arcus Shopfitters Pty Ltd earned revenue from its business. The business was conducted on the land. The question is whether the land "produced" profits. This was not a question raised by the parties, but in my view it must be considered. The word "produce" can mean to cause or "cause to accrue" (see Macquarie Dictionary), and in my view that is the meaning here. The factory was on the land, and work was done in the factory on the land. Revenue was earned from the work done in the factory on the land. In my view, the land produced revenue, and therefore "profits".
Were Rents or Profits Received by the Respondent?
24 There is no suggestion that the respondent received any rent or profits from the day when the land was resumed.
25 The land ceased to produce profits when the factory was closed in December 1995.
(Page 10)
26 As a result, interest has to be paid by the respondent as though the respondent had exercised the option provided in s 63(d)(ii): see s 63(d)(iii). Section 63(d)(ii) provides that interest shall be paid on the amount of compensation at the rate of 6 per cent per annum "or such higher rate as the respondent or the court considers adequate having regard to the circumstances of each case".
27 The respondent agrees that there should be a higher rate. It proposes interest as provided for in s 142 of the Supreme Court Act, namely interest at 8 per cent and later at 6 per cent.
28 The applicant suggests that I should exercise my discretion and increase the rate to 8 per cent through the whole period until payment is made in full.
29 I see no basis for departing from the rates prescribed for the purpose of s 142 of the Supreme Court Act 1935. That rate is struck with an eye on the movement of interest rates generally. I therefore determine that interest should be paid from the date in December 1995 when the factory was closed at the rates provided for under s 142 of the Supreme Court Act 1935.
Compound Interest
30 Section 63(d) authorises the Court to order the payment of interest "on the amount of compensation". No authority is given to the Court to award interest on interest. An award of compound interest necessarily involves an award of interest on interest. As a result, the claim for compound interest is dismissed. In any event, the prayer for relief did not claim compound interest, and there would have to be proper particularisation of such a claim to specify whether compounding would occur annually or at some other interval. There were no such particulars.
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