Boland v Yates Property Corp & Anor- Webster v Yates Property

[1999] HCATrans 215

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S24 of 1999

B e t w e e n -

JOHN BOLAND (as representative partner of Abbott Tout Russell Kennedy, Solicitors)

Appellant

and

YATES PROPERTY CORPORATION PTY LIMITED and IAN FRANCIS YATES

Respondents

Office of the Registry
  Sydney  No S28 of 1999

B e t w e e n -

JOHN WEBSTER

Appellant

and

YATES PROPERTY CORPORATION PTY LIMITED and IAN FRANCIS YATES

Respondents

GLEESON CJ
GAUDRON J
GUMMOW J
KIRBY J
HAYNE J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 4 AUGUST 1999, AT 10.17 AM

(Continued from 3/8/99)

Copyright in the High Court of Australia

___________________

GLEESON CJ:   Yes, Mr Macfarlan.

MR MACFARLAN:   Thank you, your Honours.  In light of the limited time available to me, we have reduced to writing our responses to various questions that were put to me yesterday, and that document has been made available to the Court and I will not say anything further about it unless the Court wishes me to do so.

GLEESON CJ:   Thank you.

MR MACFARLAN:   There has also been made available to the Court the summary of the head start evidence that I referred to yesterday, and again I will not say anything more about that.  The other preliminary matter, your Honours, is that I would wish to qualify an answer I gave yesterday which is recorded on page 12 of the transcript at line 421.  Your Honour the Chief Justice asked me whether Mr Simos had advanced a claim for special value of the nature described by Mr Hart either on the first or the second occasion and I said he had not on the first but it would not be accurate to say that he had not on the second.

I wish to qualify that, your Honour.  The position with the second occasion, as we put it to the Court, is that there was an attempt to quantify the value of the

documents consistently with the comments made by Mr Justice Handley, but that was a different exercise to that undertaken by Mr Hart.

GUMMOW J:   An incomprehensible exercise.

MR MACFARLAN:   What was done by Mr Hart was, so we would submit, sufficiently dealt with by the alternative site claim, and not only sufficiently, but properly, dealt with by the alternative site claim rather than the manner in which it was put by Mr Hart.

I say then some more about the question of solicitors’ duties.  The nature of the relationship between YPC and the solicitors that developed is illustrated by what incurred at its inception and I would ask your Honours to look to volume 7 to Mr Yates’ affidavit at page 1643, line 30, where he records a discussion with Mr Miles of Abbott Tout at the time of receipt of the first notification in mid 1984 from the Darling Harbour Authority of an intent to resume.  Mr Yates says at line 31 that he:

had a conference with Mr Miles…..provided Mr Miles with a copy of the 4 June 1984 letter.

The question was asked:

“What do we do about this?  Where do we go from here?”

He replied:

“Let’s arrange a meeting with Pilz as soon as possible.  He sent the letter.  You had also better get some good advice about this.”

I said words to the effect:

“Who would you advise we consult?”

Mr Miles said words to the effect:

“Noel Hemmings QC.  I can prepare a brief if you like”.

I replied:

“Yes please do.”

That was the tenor of the evidence, both then and subsequently, which led to her Honour making the finding at first instance that from the commencement of the proceedings in early 1986 YPC looked to counsel and not to the solicitors for advice about the conduct of the proceedings and that ‑ ‑ ‑

KIRBY J:   I suppose we could take notice, or was it common ground that Mr Hemmings, Mr Simos and Mr O’Keefe were all practitioners who were very experienced in this particular area, but the counsel who were retained were not novices or uninitiated counsel?

MR MACFARLAN:   There was clear evidence to that effect which was not disputed, your Honour.

KIRBY J:   When I was a solicitor, as I was for seven years, I regarded a choice of counsel who were expert in the field as an absolute imperative of a solicitor.  I never released it to barristers’ clients or other barristers.

MR MACFARLAN:   Yes, well, as your Honour will see from the notes we handed up in response to the questions asked yesterday, it was Mr Parkinson who suggested that Mr Webster be briefed and the suggestion was made by Mr Parkinson to Mr Yates who, in turn, conveyed the suggestion to Abbott Tout who implemented that suggestion.

KIRBY J:   Mr Webster is also, I think, recognised as expert in this field.  He has certainly appeared before me several times in the Court of Appeal in this area.

MR MACFARLAN:   Yes, that was certainly the evidence and he was indeed a qualified valuer and had been as such for many years, and maintained his qualification in that respect.

Your Honours, what I mentioned about her Honour’s finding, I have already referred your Honours to that before but I will give the reference again for convenience, volume 1, 153, line 20.  Your Honours, written evidence supporting the view of the relationship adopted by her Honour is to be found in a letter from the liquidator of 19 November 1986 in volume 15 of the appeal books at 3914, and at line 9 the liquidator records that he has received a letter from Mr Parkinson who says “he is agreeable to complete the valuation” for a certain amount of money.

A copy of his letter is enclosed and you will note from that letter that the balance of his costs…..to be met by Mr Ian Yates personally.  A condition of Mr Parkinson’s offer is that Mr Hemmings and Mr Webster or some similarly recognised Counsel shall advise in relation to the valuation and present the case if necessary before the Land and Environment Court.  Your undertaking to complete the legal aspect of the project is therefore necessary before Mr Parkinson will agree to undertake the valuation.

Then the paragraph, your Honours, on the next page, 3915, line 31:

I, as Liquidator, am prepared to request each of the three secured creditors to allow me to use the available funds in the administration in completing the valuation to exchange stage.  Such a request will, however, be conditional upon receiving from you an undertaking that you will be prepared to instruct Mr Webster and Mr Hemmings to complete the valuation as discussed and that your firm will agree to co-ordinate the legal side of the valuation to that stage.

I pause there.  There is obviously a flavour, your Honours, of advice being given by Mr Hemmings and Mr Webster in the completion of the valuation.  They are the ones to complete it and the co-ordination is to be undertaken by Abbott Tout.  Your Honours, at 3921 there is a further letter from the liquidator and he says in the first paragraph at line 23:

I advise that I require you to complete the co-ordination of the legal side of the valuation of the property at Darling Harbour –

and on the next page at line 26 there is reference to a deed being prepared as a matter of urgency.

Now, your Honours, that deed was not prepared and the Full Court placed some store on that fact.  It is apparent that the arrangements were not formalised in the manner contemplated by the liquidator but, nevertheless, these letters from the liquidator are a context against which the nature of the relationship that developed in fact is to be assessed.  What occurred in the preparation of the valuations reflected what had been referred to by the liquidator in his letters as is evidenced by her Honour’s finding to which I referred a few minutes ago.

Your Honours, the findings of the Full Court gave, in our submission, an inaccurate picture of the role played by counsel in settling the valuations and in providing advice as to the valuation issues.  What the Full Court said about that can be seen in volume 2 page 236, first at line 14.  They say at the end of the paragraph:

When the valuations were in final form they were considered by Mr Simos who in mid-1989 had been briefed to appear at the trial on behalf of Yates.

I will go to the evidence indicating the actual fact in a moment, but then, further in the Full Court judgment at page 263 line 24, their Honours refer to evidence of Mr Schwaiger that he:

was guided by and obtained and followed the advice of counsel.

And further down the page at line 27 their Honours make this comment:

Neither Mr Simos nor Mr Webster was asked to give any advice on what were the possible heads of compensation.  Indeed Mr Webster made it perfectly clear in his evidence that he regarded himself as not having been briefed to give any advice at all and Mr Simos was not asked to give any advice on the substantive aspects of the claim and only saw the valuers’ reports when they were in final form.

Well, that was quite inaccurate, with respect, as I will demonstrate in a moment.

GAUDRON J:   Well, were we looking for compensation and heads of compensation or were we looking for value of this land?

MR MACFARLAN:   Well, the latter, your Honour.  The former was a loose expression as to what was being looked at.

GAUDRON J:   And ultimately that is all the case is concerned with, the value of the land.

MR MACFARLAN:   Indeed.  Your Honours, further down 263 at line 37:

The only advice that Mr Webster or Mr Simos provided to Abbott Tout with regard to the appropriateness of the approach taken by the valuers was their lack of critical comment on the valuations that had been prepared.

Now, against that one has to judge what the evidence was, and I wish to go to volume 13 where Mr Webster’s affidavit is to be found.  At 3272 line 25 Mr Webster says:

On or about 29 November 1989 I settled with Mr Simos QC the report of Mr Parkinson.

Your Honours will recall the Full Court had said Mr Simos only got it when it was in final form.

Commencing in late November or early December 1989 and continuing through to January 1990 Mr Simos QC proceeded to take every witness through their reports and prepared statements for his own personal use as to what they were going to say in evidence –

that is, in‑chief, and there was extensive evidence in‑chief from these valuers.

On many occasions Mr Simos would ask the valuers the following: 

“Why do you say this?”;  “What is the basis for that?”;  “I want you to go away and consider this proposition”;  “I want you to use an alternative approach in addition to what you have done”.  By reason of what Mr Simos requested of the valuers they reviewed, amended and corrected their reports.

In the next paragraph:

Mr Simos QC asked each of the valuers the following from time to time:

“How can you justify your approach using this method?”

Mr Simos during early December 1989 through to January 1990 questioned each of the valuers in detail and analysed each of their reports requiring the valuers to re‑assess, re‑analyse and reconsider parts of their reports.  This required, for example –

and an example is then given.  I would ask your Honours to put that evidence ‑ ‑ ‑

KIRBY J:   Does this really touch the issue?  The issue may not be that Mr Simos was extremely experienced in this field, that he was extremely diligent, very devoted and showed a lot of attention but that he missed a point, so that the fact that he was very careful in lots of other ways does not really touch the point, does it, and that the solicitors and - I mean, Mr Simos was not ultimately found to be responsible but Mr Webster and the solicitors were.  So diligence in generality does not rebut negligence in particularity.

MR MACFARLAN:   No, your Honour.  The point for which I cite this material is to raise it in contrast to the implication arising out of the Full Court judgment that there was not advice flowing from counsel to solicitors.  Now, it is true there was not formal advice – formal written advice – but there was implicit advice because, as I will illustrate in a moment, it was Mr Schwaiger who was present at very many of these conferences where this process of questioning by counsel of the valuers and the making of suggestions by counsel to the valuers and the like occurred justifying the solicitors in a view that counsel was descending to considerable detail about the valuation issues, was apprising himself of what was involved, understanding it and dealing thoroughly with all the questions involved and that is a factor relevant to the extent of the solicitor’s duties, in our submission.

I would ask, in this context, for your Honours to recall that I referred your Honours to material in close proximity to what is at 3272, that is at 3268 concerning the settling by Mr O’Keefe of Mr Parkinson’s first version of his report at line 15 and the conferences at line 30 that were had with Mr O’Keefe concerning the report, and also Mr Hemmings’ role which is referred to at 3286 of the same volume, line 32 onwards; numerous discussions with Mr Hemmings concerning Mr Parkinson’s proposed methods.  Now, from November 1987 Mr Schwaiger was the person from Abbott Tout who was involved on a day-to-day basis.  The liquidator was well aware of that and made no complaint about Mr Schwaiger’s involvement.

I will not go to this but the reference as to the liquidator’s knowledge is volume 4, 852, line 10, and it was Mr Schwaiger who attended the conferences – he was the person from Abbott Tout who attended the conferences with counsel and the valuers, and, of course, Mr Yates attended many conferences as well and I mentioned that he had attended some 40 conferences with counsel.  Again, I will give the references without going to the passages:  volume 8 page 2121 lines 18 to 43; page 2130 lines 12 to 25 and volume 3 page 396 line 13.

Your Honours, contrary to the findings of the Full Court, which I referred your Honours to yesterday, Mr Schwaiger did have a basic knowledge of the relevant principles.  Those findings, which I will not go back to, are to be found at page 235 line 35 of volume 2.  The reality concerning Mr Schwaiger’s knowledge can be seen at volume 5 page 1018, to which I would wish to go.  At page 1018 line 24:

Q.  Did you read any cases in connection with the principles involved in the assessment of compensation shortly after you took over the conduct of the matter?

A.  Not shortly after ‑ ‑ ‑

GUMMOW J:   I thought we looked at this yesterday.

MR MACFARLAN:   Well, we started to, your Honour, and we got the evidence that the Full Court relied upon and I was going on, but did not get to the evidence as to what was his knowledge.  He says at line 19:

A.  At a later stage I read the cases, yes.

Line 23:

A.  Yes, yes, in terms of later stages in the preparation of the case and subsequent to the hearing of – the first hearing – the – I would read cases as part of collecting the cases as part of gathering of the authorities and so forth.

Q.  Prior to the commencement of the first hearing before Justice Cripps in January 1990, had you read cases in connection with the principles involved in the assessment of compensation in a case such as the one that you are undertaking?

A.  Yes.

Q.  When prior to the hearing do you think it was that you first started to read the cases?

A.  Subsequent to Mr Parkinson’s valuation and prior to the hearing of the case in that period 1989.

Line 7:

Q.  Did you read the cases?

A.  It depends what you mean by “read the cases” – certain cases which may have come up in conversation, and particularly cases such as San Sebastian in relation to steps in the assumption process; I recall Falconer’s case – I recall reading and being familiar with that.

And then at page 1023 line 11 he speaks of being familiar with the “reinstatement principle” as a result of the “discussions with counsel, between counsel and between counsel and the valuers”.  And at page 1030 line 10:

Q.  Prior to the hearing in January 1990, you had read some cases in relation to special value?

A.  Yes.

Q.  Can you remember what cases you read?

A.  Oh, I’d be guessing to say anything more than Pastoral Finance.

Q.  But you knew of the concept in Pastoral Finance, did you not?

A.  I knew – I was aware of the concept of special value.

Line 26, he says:

A.  I was aware of the general concept of special value.

There is one other reference, but I just do not have it, your Honour, but I will come back to that if I can.

Now, your Honours, it was not suggested to Mr Bartrop, who was the partner in charge, that he should have attended these extensive meetings with counsel and himself become involved in the detailed discussions about the valuation issues.  Mr Bartrop swore an affidavit indicating what his role was and what Mr Schwaiger’s role was and indicating, in Mr Bartrop’s view, that that was satisfactory and he was not called for cross‑examination at all. 

Now, in those circumstances, we submit that the inquiry that has to be made is whether the point that is alleged against us, if it is found there is a point arising out of Baringa, whether that point was one that should have been obvious to Mr Schwaiger, because even if it should have been obvious to experienced counsel, we submit that it would not necessarily have been a point that should have been obvious to a person in Mr Schwaiger’s position or, indeed, an experienced solicitor in this area, unless that solicitor was required to assume the role of attending these conferences with the valuers and counsel and discussing the minutia of the valuation principles at issue.

Your Honours, the other reference I was thinking of in relation to Mr Schwaiger’s knowledge was 1064 where he was asked at line 20:

Had you actually read any text works on valuation law at this stage?

His answer was:

I think at that stage I had read – there was a general text that was floating around, Brown, on compulsory acquisition.

Now, your Honours, I can turn to the question of causation and our point about this is a brief one.  It is a topic that we deal with in paragraphs 66 to 68 of our written submissions and can be approached in this fashion:  the Full Court rejected our submissions about causation and reversed her Honour’s findings about causation essentially upon the basis that there would have been a conflict between counsel and solicitors which would have had to have been resolved by the liquidator by resort to one or other of a number of means:  reference to the secured creditors of the company, the obtaining of a second opinion from another counsel, or some other such means. 

What that approach overlooks is this, your Honours, and it is a point we make in paragraph 67(b) of the written submissions, that Mr Silvia’s evidence - he was the liquidator - was that if Abbott Tout had raised a point of concern as to a substantive issue, he would have expected it to be the subject of consultation with counsel and that he would only have sought the opinion of other counsel or obtained judicial advice if the point was not resolved in this way and, with respect, that makes sense.  Someone in the liquidator’s position does not run off in an alarmist fashion until the various lawyers in the team have discussed the matter amongst themselves. 

Now, Mr Bartrop’s evidence, as we set out in paragraph 67(c) of the written submissions was this - and he was not cross‑examined on it. - his evidence was that Mr Schwaiger kept him up to date with developments and that if Mr Schwaiger had brought to Mr Bartrop’s attention an issue which he thought that counsel or the valuers may have approached incorrectly, Mr Bartrop would have raised that matter with counsel and if, so Mr Bartrop said, counsel had adhered to their view after the matter had been raised and had given reasons which Mr Bartrop did not regard as obviously unsupportable, Mr Bartrop would have accepted counsel’s views.

One has to add that to what we mention in 67(h) of the written submission, namely that there is a wealth of evidence that counsel had not and would not have changed their views in relation to this matter.  They very firmly held the view after the point was brought to their attention some time later that the point was not one that had a sound basis.

Now, where the Full Court went wrong, we would submit, with respect, and this is a point we make in paragraph 68, was in misunderstanding evidence that they perceived Mr Simos to have given, and this is a matter I took up earlier in my address.  Your Honours will recall that the Full Court said, “Well, Mr Simos conceded that Mr Yates was entitled to compensation for the work he had done”.  Now, that was a very different thing from saying that Mr Simos accepted that the head start approach as identified by Mr Hart was appropriate.

To the extent that Mr Simos accepted that Mr Yates was entitled to compensation - and I am using that in a loose sense - for the work that was done, he was indicating and accepting something that was obvious and it was an obvious part of the claim that was mounted before Justice Cripps, and it was mounted in a very extensive fashion and the principal means by which compensation was sought was through by the market value in the way that I have indicated or alternatively through the special value claim based on an alternative site.

GLEESON CJ:   Mr Macfarlan, where is the best place for us to look in the papers to find a reasonably succinct expression of Mr Simos’s views on the applicable legal principles?

MR MACFARLAN:    I will need to find that reference, your Honour.

CALLINAN J:   It is a couple of paragraphs, I think, in an affidavit which was quoted by Justice Branson.

MR MACFARLAN:    Yes.  There is a very long affidavit of Mr Simos’s, so I will need to just identify the relevant part. We will take that on notice, your Honour.  So, the effect of all that, your Honours, is this.  If the point had been raised by Abbott Tout with counsel, which was the appropriate way it should have been dealt with, then after discussion with counsel if counsel had adhered to their views, which is clear on the balance of probabilities would have occurred, then the solicitors would have accepted that view as not being one obviously wrong and counsel being the ones who they regarded as having the final view in relation to the conduct of the proceedings.

KIRBY J:   And being counsel of acknowledged expertise in this sphere.  It is the division of labour that was mentioned in that English case.  A local doctor is not going to question the neurosurgeon.  He may raise an issue or concern or something the family has mentioned, but he is not going to get in there and say, “Well, you’ve got to do the knife in this particular way”.

MR MACFARLAN:    He may raise it in a very polite fashion and discuss it ‑ ‑ ‑

GLEESON CJ:   It depends what “it” is.  If there is an egregious error being made, his responsibilities may be different from what they are if there is a debatable matter of judgment to be considered.  The reasoning of the Full Court of the Federal Court, as I understand it, was based upon the premise that what was involved here was an egregious error.

MR MACFARLAN:   A point we would add in relation to that, your Honour, is that what is obvious.  When one asks the question of, “What is obvious?” one has to ask, “To whom is it obvious?”, and the question of obviousness is relative to the person about whose understanding one is inquiring.

GLEESON CJ:   Your argument, as I understand it, is that this is a case in which there was an obvious error but it was not one made by Mr Simos.

MR MACFARLAN:   That is our first argument.  Our fall‑back position is that even if there was something that should have been obvious to counsel who engaged in a detailed examination of these principles in discussion with the valuers, it was not and need not have been regarded as obvious to a solicitor in Mr Schwaiger’s position or indeed Mr Bartrop’s position.

I turn then finally, as to the main matters, to the question of immunity.  We picked that up in paragraph 69 of the written submissions and we identify there the nature of the finding of negligence against us and, as the references we there give indicate, the essence of the complaint found against us was that there was a failure to lead evidence, and to the extent that there was a failure to advise it manifested itself in a failure to lead evidence.

As I have pointed out earlier, the issues before Mr Justice Cripps were not set in concrete at any time prior to this hearing.  Indeed, valuation reports were going on very late.  The final reports of two of the valuers were dated late in November, the third some time in January, and extensive oral evidence was led from each of the valuers at the hearing and at no stage before the end of the hearing before Mr Justice Cripps, or at least until the counsel for YPC had completed their addresses, were the issues fixed and was this point in any sense precluded to YPC.

Now, in those circumstances, we submit that the case here is indistinguishable from that dealt with by the New South Wales Court of Appeal in Keefe v Marks which was a case in which there was a failure to make a claim for interest.  That was a case upon which we relied very heavily before the Full Court but is not mentioned in the Full Court’s judgment and, indeed, in YPC’s submissions to this Court, paragraph 92, there seems to be a concession that the facts here are relevantly indistinguishable from those in Keefe v Marks.

I would wish to go briefly to a couple of passages from Keefe v Marks 16 NSWLR 713. The first passage is at 718 in the judgment of the Chief Justice . At 718G your Honour said:

The substance of the complaint that was made against the barrister is, in my view, simple and clear.  It is that, having been briefed to act as counsel for Mr Tehfe in his action for damages for personal injuries, he did not at any relevant time, either prior to the commencement of the hearing, or during the hearing, direct his mind to the desirability of making on his client’s behalf a claim for interest or take the steps necessary to propound such a claim and that his neglect in that regard produced the result that Master Greenwood failed to award interest and the Court of Appeal declined to intervene.

Then, between A and B:

The question is whether a claim of that nature is within the area of immunity to which reference has earlier been made.  Whatever may be the answer to that question, it does not appear to me that it could depend upon the detail of the evidence adduced at a hearing of the District Court action.  Indeed, the relevant principle of immunity would be capricious in its operation if its application in a case such as the present were made to depend upon the precise history or circumstances of the communications and dealings between the barrister and his solicitor and lay client.  A rule of law which is said to be based upon considerations of public policy should not depend for its practical operation upon chance.

And, just above D:

The barrister’s alleged negligence involved a continuing course of conduct, or inaction, which extended up until the conclusion of the hearing before Master Greenwood and manifested itself in a failure to make a claim for interest, and to apply for any necessary amendment to the pleadings in order to enable that claim to be pursued.

At the foot of the page his Honour refers to Justice McCarthy in Rees v Sinclair where he spoke of:

the particular “pre‑trial work of which complaint is here made was “so intimately connected with the conduct of the cause in Court that it can fairly be said to be a preliminary decision affecting the way that cause (was) to be conducted when it (came) to a hearing”.

The substance of the allegation against the opponent is that he was negligent in the way in which he conducted Mr Tehfe’s action, and the principle of immunity which applies in such a case cannot be circumvented by drawing fine distinctions between the preparation and the conduct of the case, or between the opponent’s failure to advert to the matter of interest while he was in his Chambers and his failure to do so while he was in Court. 

Justice Meagher at 728 letter G said this:

That is because – and it was not in dispute – a mere failure to include a prayer for interest in a statement of claim does not prevent one from asking for interest at the hearing, whether with or without an amendment, and any such application is automatically granted.  It follows that no damages – a necessary ingredient in an action of negligence – could flow from a mere pleading deficiency of this type.

Moreover, each of the allegations…..seem to me to involve conduct which is necessarily inseparable from the conduct of the case itself.

KIRBY J:   What was the point of distinction that Justice Priestley differed from the majority in that case?  I see that the headnote gives a common holding about the liability of a barrister and the immunity and then there is a distinction in respect of the application to this particular case, is it?

MR MACFARLAN:   Yes, well, he thought it was arguable, your Honour.

KIRBY J:   I mean, I could understand a principle, as I understand it, that what the barrister fails to do on his feet in court he has an immunity but for what he fails to plead in a statement of claim, I may be wrong, but I can see it as a potential for liability for that, that the immunity does not extend so far.

GLEESON CJ:   Although it hardly turns upon whether he is sitting down or standing up at the time.

MR MACFARLAN:   No, indeed.

KIRBY J:   But does it turn on whether or not he is acting in the courtroom or whether or not he is preparing a pleading which articulates a statement of claim?  I could well understand a barrister is liable for the latter and not the former because the pressures are different.

MR MACFARLAN:   It is a factual question as to the degree of connection with the court proceeding.  If the statement of claim is prepared and there is no further connection with the court, then there may be a case for basing the claim on what occurred in connection with the pleading but where, as here and as in Keefe, there was a continuing opportunity to make the claim, nothing flowed from the pleading deficiency.  The cause of the loss was the absence of the claim being made at times up to and including the actual hearing itself.

KIRBY J:   Does that mean that if a barrister does not advise an obvious, patently obvious claim and contain it within the statement of claim that the immunity that is conferred on the barrister extends to relieving him and his solicitors from that liability or liability in respect of that omission.  It pushes the immunity further than I understood it to go.

MR MACFARLAN:   It really depends, your Honour.  There can be circumstances where deficiencies in the pleading can lead to liability, for example, where the barrister advises that someone not be sued, not be included as a defendant.  That may be completely different but where, as here, the matter proceeds through to a court hearing and there is the opportunity to rectify the defect right until the end, then the complaint is, in essence, about the manner in which the hearing has been conducted.

GLEESON CJ:   There is no criticism of the pleading in the present case.  The essence of the allegation against the solicitors and the barrister in the present case was a failure to lead evidence and a failure to put an argument.

MR MACFARLAN:   Yes.

GLEESON CJ:   The occasion for leading the evidence and the occasion for putting the argument was, as I would have thought, only in court.

MR MACFARLAN:   Yes, that is so, your Honour.  As I pointed out, there were no formal pleadings in this case, certainly none that defined the valuation issues in the sort of detail that would throw up the point raised against us.  Your Honour, the nub of what Justice Priestly said – I think he is best seen as 725C to D – but I will not pursue that any further unless your Honour wishes me to. 

The other point raised against us in connection with the immunity question is that advocate’s immunity is not available to solicitors, certainly solicitors who do not stand on their feet and speak in court in the conduct of the action.  We submit that no such arbitrary distinction is to be drawn.  It depends, perhaps, what one concludes about the nature of the solicitor’s duty in this case.  If the conclusion against our submissions is that my clients had a primary duty coextensive with that of counsel as to the conduct of the proceedings and as to the leading of evidence, then we would submit that it would be capricious not to hold the immunity was equally available to the solicitors.  If my client’s role was of a secondary character accessory to the role of counsel, for the reasons I have given, we say we would not be liable but there would, of course, be an argument against us that the immunity should not be available in such circumstances.

GLEESON CJ:   It may be that the extent of the immunity and the extent of the liability are just two sides of the one coin.

MR MACFARLAN:   Yes.

GLEESON CJ:   If it was the solicitor’s duty at some stage before Mr Justice Cripps reserved his decision to tug the barrister on the gown and say, “Do not forget about the head start”, then the corresponding immunity may apply.

KIRBY J:   That happens all the time, does it not, I mean, not all the time, but it is not infrequent for a solicitor to remind counsel, who is under tremendous pressure often in the course of running a case, not to forget the claim – it is generally about costs - or about the claim for interest or indemnity costs or something like that that can be overlooked.

MR MACFARLAN:   Yes, yes it does, although in the normal context that the counsel have the primary responsibility for the conduct of the proceeding in the court.

GLEESON CJ:   On the subject of immunity, Mr Macfarlan, did the valuers enjoy an immunity from action?

MR MACFARLAN:   That has not been in issue, your Honour, but I am not sure I could give your Honour an adequate answer to that question, but there may be a policy reason for affording them that, but the law as it stands at the moment probably would not give them that.

GLEESON CJ:   As witnesses.  You can sue a witness for negligence, can you?

MR MACFARLAN:   That may be a question, your Honour.

GLEESON CJ:   I did not think it was.

MR MACFARLAN:   I am just getting some assistance.

GLEESON CJ:   Negligent witnesses can most obviously cause harm in certain circumstances, one would have thought.

MR MACFARLAN:    It possibly depends on the way in which they were negligent.  If it occurred in the course of giving of evidence, then they would be protected but, if it occurred at some other stage, it may not be.  But certainly the rationale is similar in relation to values as it is to advocates.  A point, your Honours ‑ ‑ ‑

KIRBY J:   Sir Garfield Barwick, who must have disliked solicitors pulling on the gowns, put the solicitors in this Court at such a great distance that it can never, or virtually, never happen.  But there are courtrooms, ordinary courtrooms, where it happens not infrequently, not in every case, but the interaction ‑ ‑ ‑

MR MACFARLAN:    Yes, all the solicitors sit on the other side of the Bar table and ‑ ‑ ‑

GLEESON CJ:   That is right, eyeball you.

MR MACFARLAN:    Eyeball the counsel, yes – very disconcerting.

KIRBY J:   That is a crude Victorian practice.

HAYNE J:   Some of us grew up under that practice, Mr Macfarlan.

MR MACFARLAN:    Yes, your Honour.  It is probably a salutary practice too.  The final point we would make about immunity is that if the line was drawn so as to exclude solicitors in our position from claiming the benefit of the immunity, then it would be difficult to see how junior counsel who are led could claim the immunity.  The immunity cannot, we submit, with respect, depend upon who stands up in court and speaks.  Junior counsel who is led by a senior counsel has a responsibility along with senior counsel as to the conduct of the proceedings and should be equally covered by the immunity as should a solicitor if that solicitor has the same responsibility.

There are two final matters, your Honours, which we have dealt with in paragraph 72, 73 and 74 of our written submissions.  The fact-finding matter I think I have sufficiently dealt with already in the course of dealing with other topics.  On the question of remission, we say the Full Court should not have indicated that the remission should not have been made to her Honour.  It was a lengthy trial and it is very inconvenient to ‑ ‑ ‑

GLEESON CJ:   They gave a reason for it, did they not?  They said that she, in the course of dealing, I think, with some issues as to costs, would have looked at some material that would have been embarrassing.

MR MACFARLAN:    If there is a settlement negotiation.

GAUDRON J:   Now, is there any finding anywhere of damage, actual damage?

MR MACFARLAN:    No, there is an assumption by the Full Court that there was a head start that led to damage but ‑ ‑ ‑

GAUDRON J:   And that that would have been greater than – the assumption must be – I am sorry to take this up with you at the last part of your argument, but it seems to me that the head start, head of damage, well, head of special value - let us get this terminology right – that the head start component of special value is actually inconsistent with the alternative site displacement head of special value.  If I am wrong in that, please tell me.  That being so, there has to be evidence somewhere that that head of special value was greater than the alternative site.

MR MACFARLAN:   Yes.  There was no such evidence, your Honour.  The quantification of the alternative site claim was many tens of millions; the attempt to quantify the head start claim came out at a vastly lesser figure.

KIRBY J:   But this is not a matter that you have argued in your written submissions; is it a matter you raised elsewhere, because there may be factual questions that would have to be elucidated?

MR MACFARLAN:   Well, the way we have put it in the written submissions and continued to put it is that her Honour at first instance found there was no head start, and it follows from that that no loss was suffered and we could not therefore be responsible in negligence.

GLEESON CJ:   Well, what the Full Court, as I understand it, did in their reasons was to assert that Justice Handley had “referred” to the “fact” that Yates could have built these markets quicker than anybody else, whereas what Mr Justice Handley actually said was that it might have been the case, but Justice Cripps made no finding of fact to that effect.  Then Justice Branson made a finding of fact to the contrary of that.

MR MACFARLAN:   Yes, that is the position.

GLEESON CJ:   And that constituted the entire factual foundation for the head start theory.

MR MACFARLAN:   What your Honour has described is accurate and the finding of Justice Branson was not referred to by the Full Court.  The final matter, your Honours, is ‑ ‑ ‑

GUMMOW J:   It is not just that.

GAUDRON J:   Yes, can I take you back.  Do you contend that if there is such a notion as the head start component of special value, it is in addition to, or can be in addition to, the alternative site component?

MR MACFARLAN:   No, if there is one it is subsumed in the alternative site claim which was mounted and pressed.

HAYNE J:   Subsumed in or inconsistent with?  Are you not having the penny, the bun and the shop window in which it sits?

MR MACFARLAN:   Well ‑ ‑ ‑

HAYNE J:   Not you, but is not the claimant then having ‑ ‑ ‑

MR MACFARLAN:   When I say “subsumed in”, it is not in any sense added to the alternative site claim, but to the extent that the dispossessed owner has done work which has created an advantageous position for himself.  That is reflected in the alternative site analysis and there is nothing more ‑ ‑ ‑

HAYNE J:   But the alternative site analysis proceeds from the premise that you would pay more for this land than anyone else because it would cost you a lot of money to go elsewhere.

MR MACFARLAN:   Yes.

HAYNE J:   The head start analysis says you would pay more to stay there because you could get on quicker than others if you stayed there.  Can you have allowance for both?

MR MACFARLAN:   No.  The final matter, your Honours, is as to the question of costs.  In the second-last sentence of the judgment the Full Court said that Mr Yates or YPC should have its costs if it recovered any more at the trial.  That, we submit, was an unwarranted interference with the discretion of the trial judge.  It may be, of course, that any recovery is only a very small one or there are other circumstances which might lead the trial judge to decline to award the costs of any further trial to Mr Yates or, indeed, the costs of the original trial, and there was no basis for the Full Court fettering the discretion of the trial judge in that respect.  The last sentence is, of course, the subject of a separate appeal by Mr Simos to this Court.

CALLINAN J:   Do you rely upon that at all as indicative of some fault or error of law in the fact-finding process or the application of the law as tainting the judgment of the Full Federal Court?

MR MACFARLAN:   It is not strictly relevant to our appeal, I think I have to say, your Honour.

KIRBY J:   All they are saying is if in the outcome the respondent gets more, then their having brought the appeal has been shown to be warranted and if they do not then – this is really Justice Gaudron’s point, perhaps, in another form – if they do not get more damages, well, they have just wasted everybody’ time and therefore they should not get the costs.

MR MACFARLAN:   Yes, their Honours, in that sentence are talking about the costs of the original trial – the costs of the trial ‑ ‑ ‑

CALLINAN J:   They are talking about the costs that Mr Simos was awarded and they take them away, do they not?

MR MACFARLAN:   Yes.  Your Honour Justice Callinan is referring to the last sentence about Mr Simos?

CALLINAN J:   Yes.

MR MACFARLAN:   I cannot say that that is strictly relevant to our appeal.

CALLINAN J:   No.

MR MACFARLAN:   As to the second last which I think Justice Kirby is referring to, the point we would make is that whether or not YPC should have its costs of the trial is a matter for the trial judge who would take into account a whole variety of factors.

GLEESON CJ:   Did the Full Court advert in their reasons to the fact that in New South Wales at the relevant time there was no contractual relationship between a barrister and a lay client?

MR MACFARLAN:   No, your Honour.

GLEESON CJ:   It just occurs to me that if they had adverted to that and to the fact that damages were of the gist of the action against Mr Webster, they could not leave open the question of whether or not there would be extra awarded if a head start claim was pursued.

MR MACFARLAN:   Yes.

GAUDRON J:   And, indeed, they could not make the order in order 2, which is back where I started.  It cannot be remitted for the assessment of damage.  At best, it could be remitted to determine whether there was damage, and if so, its quantification.

MR MACFARLAN:   Yes, I understand that, your Honour.

GUMMOW J:   Now, the action against Mr Webster, as I understand the pleading, was not in contract anyway, it was only in tort.

MR MACFARLAN:   That is as I understand it.

GUMMOW J:   And the action against the solicitors was in both.  That is as I understand it.

MR MACFARLAN:   Yes.

GUMMOW J:   So, there seems to be, consequential upon what Justice Gaudron has just said, a real problem in so far as the Webster action is concerned, at least.

GAUDRON J:   And in so far as you act for the solicitors – that is right, is it not?

MR MACFARLAN:   Yes.

GAUDRON J:   There is this question I adverted to at the beginning as to whether any longer there is to be a term implied into the contract or whether the implication of the term has been overtaken by the general law of negligence so that your liability is in negligence alone and that that depends on proof of damage, a matter which has not been addressed.

MR MACFARLAN:   Yes.  If what Justice Deane said in Hawkins v Clayton were correct ‑ ‑ ‑

GAUDRON J:   It was not simply Justice Deane, was it?

MR MACFARLAN:   No, not simply Justice Deane but if that were a correct analysis, then we would be in the position your Honour has described.

GAUDRON J:   But we have not heard argument on it.

MR MACFARLAN:   Your Honours have not, no.

GLEESON CJ:   Of course, it may be more complicated still.  The Full Court did not find it necessary to advert to the significance of the alleged contravention of section 52 of the Trade Practices Act, but that is an issue that would have required consideration if they had adverted to the fact that the claim in negligence against Mr Webster was purely in tort and not in contract.

MR MACFARLAN:   Yes.

GLEESON CJ:   I do not know what the position would be in relation to that section 52 claim against a barrister on the assumption that you come to the view that there was negligence in the sense of failure to conform to a standard of care but you leave open the question of whether there was any damage.

MR MACFARLAN:   My recollection is ‑ ‑ ‑

GUMMOW J:   They would have had to consider section 82 which is recovery of the amount of the loss or damage.

MR MACFARLAN:   Yes.

GAUDRON J:   I suppose if these are matters that arise, could it be that the appropriate course is for the matter to be remitted to the Full Court to consider them if they arise?  I mean, it may be that they do; it may be that they do not.

MR MACFARLAN:   Your Honours, this did not specifically concern me, that is the 52 action against the barristers, but my recollection is that that was not pursued on the appeal to the Full Court.  I will be open to correction on that.

GAUDRON J:   I think it was not pursued at first instance, was it, although the fair trading claim was.

MR MACFARLAN:   Yes.  We do make some comments in a document we handed up in response to the question that was asked yesterday about the section 52 claim.  That is on the second page in the middle.  We say that:

Branson J notes that YPC did not press reliance on sections 52 and 82…..so far as Mr Simos was concerned.  Her Honour continued that the extent to which YPC ultimately pressed reliance on these sections so far as ATRK and Mr Webster were concerned was unclear –

but then those matters were not pursued on the appeal to the Full Court.

CALLINAN J:   It must have been the hook to get it in to the Federal Court, if it was not pursued, the trade practices claim.

MR MACFARLAN:   That would seem to be so, your Honour.

KIRBY J:   That does not affect the validity of the judgment of the Federal Court, does it?

MR MACFARLAN:   We do not conceive it to, no, your Honour.  My learned friend Mr Quick may be able to indicate that it was pursued in the Full Court and I will be open to correction.

KIRBY J:   But it is you who would have the interest to allege that the judgment is now invalid by reason of the decision of the cross‑vesting cases.

MR MACFARLAN:   We do not allege that.

GUMMOW J:   It is a question of whether it was pursued before the trial judge.  It was.  She said, “I don’t need to get into it too much because it’s agreed that the outcome on the negligence claim will determine the other claim”.

MR MACFARLAN:   Yes.

KIRBY J:   That was on an assumption that cross‑vesting was valid, which assumption has been exploded.

MR MACFARLAN:   Yes.

GUMMOW J:   Well, it is not an assumption about that.  It was just an assumption that it was all one matter.

MR MACFARLAN:   Your Honours, unless there is anything else, those are the submissions I would make.  There is one question outstanding, perhaps as to Mr Simos’s affidavit, your Honour the Chief Justice asked.  Page 3112 of volume 12 is the affidavit of Mr Simos which sets out his views.  That goes for some eight pages and we think that it probably the best reference.

CALLINAN J:   I think the important paragraphs were at pages 143 and 144 of volume 1 in the judgment.

MR MACFARLAN:   In the judgment, yes.

CALLINAN J:   There are only a couple of paragraphs but I think they are the critical paragraphs.

MR MACFARLAN:   Thank you, your Honour.  If your Honours please, those are the submissions for the appellant.

GLEESON CJ:   Thank you.  Yes, Mr Jackson.

MR JACKSON:   Your Honours, if I could deal first with the issues relating to market value and special value.  The Court has our written submissions and has heard my learned friend Mr Macfarlan’s oral submissions and I do not intend to go in detail over the same ground.  May I refer to a number of aspects arising in relation to it.

Your Honours, one starts, of course, from the relevant statutory provisions and they make it clear that the claim to compensation, into which the land is converted, is a claim to the value of the land.  That is made apparent from the several provisions which are referred to in Justice Branson’s reasons at page 110 and following.  Section 124 of the Public Works Act, which is one of those provisions, makes it apparent that the compensation is for the value of the land at the time of the resumption.

Now, your Honours, the concept of value of the land involves, of course, two elements.  One is value and the other is, what is the land?  May I deal with those in the reverse order?  The land, of course, means the realty or, in the appropriate case, the estate or interest in the realty.  If the land resumed is, for example, a transport depot, it includes the fixtures and so on, the hard standing, the bays, the office building, but does not, of course, include the vehicles or the cans of diesel fuel that there may be in the area.

Your Honours, because one is talking about the value of the land, it does not include – and I will give your Honours a reference in this regard in just a moment – for example, the value of any business carried on on it or carried on from it.  It does not include the value of any business which might be carried on on or from it.  Those matters, however, are not irrelevant.  They provide some guides as to the other aspect involved, namely, value.  I said I would give your Honours a reference in that regard, that was to The Commonwealth v Reeve (1949) 78 CLR 410, in particular, the judgment of Chief Justice Latham at the bottom of page 417 going over to page 418. Your Honours will see in the last paragraph on page 417 that his Honour said:

Owen J. approached the determination of the question before him by inquiring whether on the relevant date “the circumstances gave a special value to the premises in the hands of the plaintiffs.”  I entirely agree that it is proper to inquire whether any circumstances gave a special value to the premises.  But in my opinion the introduction of the words “in the hands of the plaintiffs” suggests that the basis of compensation is the loss suffered by the plaintiffs by the compulsory acquisition.  But when the Commonwealth resumed the land the Commonwealth did not acquire the business, whatever it was, that happened to be carried on in the room, and the Commonwealth did not come under any liability to pay compensation for the loss of the business by the tenants.

Your Honours will then see, and I will not read it out, that if one goes through the remainder of that paragraph in page 418, that his Honour emphasises the “measure of compensation” being “the value of the land” and that the value of a business can be a “circumstance to be taken into account” in relation to the value of the land.  Your Honours will then see, if I can go to about point 3 on that page, 418, his Honour says:

But the point of the phrase “value to the owner” is not that the owner is entitled to damages for all his loss consequent upon acquisition of his land, but that the value to the acquiring authority is not the measure of compensation.

Your Honours will then see – perhaps I should take your Honours to the next paragraph:

The value of land to the owner is what he can get for it.   He can never get for it more than other people will give for it.  But what other people will give for it is not unaffected by what the owner is prepared to take for it, and if the sale of the land would involve him in costs and expenses that fact may be an element which would affect the amount ‑ ‑ ‑

GLEESON CJ:   Is that the answer to the problem raised by Justice Hayne yesterday?  That it is not so much that you are hypothesising that the owner is in there bidding at the auction, either overtly or covertly, but that the question of what the owner will take for it is relevant to what a prudent purchaser would have to pay for it.

MR JACKSON:   Indeed, your Honour, and once one assumes – and I will come to this in just a moment – the Spencer equation of the knowledge, then the purchaser is a person who is given the knowledge which the vendor, as it were, has and that has the consequence that the assumed purchaser is paying for what the vendor’s interest in the land is.

GLEESON CJ:   If that is right, why is special value referred to as something over and above market value?

MR JACKSON:   Your Honour, I am just going to come on to that in a moment, if I may, and there are signification difficulties, with respect, in relation to the notion of special value.  What I mean by that is that one does see in the cases references to a concept of special value and a concept which is said to be something above what market value would be.  Now, your Honour, what I am going to seek to say about it is that there are really very few circumstances in which land could be regarded as having a special value, and I am going to seek to say that it is some attribute of the land.  It may be, for example, proximity to other land.  If I could just perhaps give one example.  If one took the case of land, if one looked at it as it would be, if one looked at the surface of it, rather poor grazing land but it contains in it metal that can be used in a quarry, it is a large piece of land but a freeway resumption goes through it and what it cuts out of it is the part of the land upon which the crushing operation is carried on as distinct from the quarrying one.  Now, the land actually taken, if one looked at the - added on a market value approach, one probably would have difficulty in saying that on the market that land would itself have any value to a purchaser other than its value as agricultural land, but it does have some additional value to a person in the situation of the quarry owner of whose land it formed part when it was taken.

CALLINAN J:   Mr Jackson, that might be compensable under that other head in this area of severance.

MR JACKSON:   It could be, your Honour.

CALLINAN J:   Which highlights, I think, the inexact way sometimes the terms are used and the interchangeability of them sometimes.

MR JACKSON:   Indeed, your Honour.  Your Honour, what I was going to say was that what appears from that passage in Chief Justice Latham’s observations, but what also appears in Arklay in some observations in the Court in Arklay to which I will come in a moment, is that a confusion is introduced because when the cases speak of value to the owner, what in truth is being spoken of is value according to the Spencer principle, that is, market value.  Your Honours, may I come to that in just a moment.

CALLINAN J:   Just before you do, Mr Jackson, if you look at what Chief Justice Latham said at page 420, about point 5, that shows that people do not use the term “special value” as a term of art because there his Honour said:

Thus, if the land has some special value by reason of a potential use –

Potential use should always be taken up as highest and best use.  That is a typical example of the inexact usage of special value in the way in which perhaps the strict and more rigorous texts and judges use it.

MR JACKSON:   Your Honour, what I am going to come to suggest, if I may, a little later is that, in fact, if one looks at the language in Pastoral Finance, Pastoral Finance is, in fact, a case of putting a value to the potentiality of the land as in truth a market value case.

CALLINAN J:   Exactly.

KIRBY J:   That is not so special, that is just the value of the special land in a sense.  It is not the special value of the land; it is the value of the special land.

CALLINAN J:   That is the whole point, Mr Jackson, is it not, that people sometimes say, special value, when they are really meaning, the highest and best use or the value.

MR JACKSON:   Yes.

KIRBY J:   The phrase has been very strongly criticised in those academic law reform bodies, but I did not take you to be submitting that there is no such concept.

MR JACKSON:   No, your Honour, I do not, but could I just say in relation to it, what I submitted a moment ago was that there will be very few cases in which special value can be regarded as being something that is there.  Now, your Honour, there will be some cases, perhaps, and if one took the quarry case I adverted to a moment ago, that is a possibility; other cases may be ones where, by reason of proximity, I use the term again, the land can be regarded as having some value which it would not otherwise have and it may be that the case of the warehouse next to the distribution centre is one.

GLEESON CJ:   But the kind of special value that we are talking about is assumed, is it not, to be something over and above market value?

MR JACKSON:   Well, your Honour, the kind of special value that the Full Court seemed to be talking about, seems to be something over and above market value.

GLEESON CJ:   Quite.

MR JACKSON:   But, could I say, your Honours, that that really, with respect, misinterprets entirely what the Court of Appeal said, and I am going to seek to demonstrate that in just a moment, because what the Court of Appeal was really saying, it was not that it was open slather about special value in this case, what they were saying, in effect, was you were lucky you got what you did and I do not know why the judge gave it to you.  Your Honours, may I come to it in a moment.

Your Honours, what I was going to say was that one is looking first of all at the land and what is meant by land in talking about value of the land; secondly, one comes to identify the characteristics of value, it is a money sum, of course, it reflects what the land was worth and what it was worth to the person from whom it was resumed.

GLEESON CJ:   But, in this context, value means exchange value, does it not?  That is to say, what you can sell it for.

MR JACKSON:   Your Honour, I accept that; what I was going to say was, it reflects what it was worth to the person from whom it was resumed, but not in any subjective sense; it reflects that in an objective way.

GAUDRON J:   But does it perhaps mean any more than that there really are not lands with which a true comparison can be made, therefore comparable sales do not tell you the value, because of something peculiar to that?

MR JACKSON:   Your Honour, it may not.  Could I just say in relation to comparable sales that there is no doubt that comparable sales is a very common and, in most classes of land, the ordinary way of arriving at a value for land.  Equally, however, one can take into account the discounted value of a future income stream; one can take into account what might be likely to be the estimated net, and perhaps discounted, proceeds of a subdivision or something of that kind.  They are all ways at arriving at the value. 

Now, undoubtedly, your Honours, there are cases where, first of all, it is difficult to make a comparison because it is unlikely that there would be anyone in the market for the particular land.  You can have a case, in effect, where what is chopped off is a piece of land that might have been used in a subdivision, but taken by itself one could not imagine a person buying it – too small, for example.  And there are other cases, your Honour, where it is just impossible to make any satisfactory comparison.  What one is endeavouring to do is then to give to the person from whom the land has been taken something which represents the true value of that land to that person in the sense that, if one looks at it objectively, what is it worth to the person, not, what does the person think it is worth.

HAYNE J:   That is whether you are valuing or compensating.  Sliding into damages, again, are you not, Mr Quick?

MR QUICK:   Well, I hope it is the first occasion.

GAUDRON J:   The problem does not arise - the problem Justice Hayne adverts to does not arise if the question is, “What would a willing vendor, willing to sell but knowing it has some special value to him, what is the price that the willing vendor would be prepared to accept?”, thus feeding into the true market value, on one view?

MR QUICK:   Your Honour, the support for that view derives from the case mentioned this morning – I am not sure whether it is Turner or Reeve or both of them.

GAUDRON J:   Yes, but it really does, I think, raise a very fundamental question about the principles to be applied in valuation law.

HAYNE J:   And the knife in the napkin lies in the fact that if you can take to account economic considerations, why cannot you take to account considerations of convenience, considerations of emotional and other kinds that have been debated earlier?

MR QUICK:   Your Honour, in point of principle, it still has to be valuable because it is the value of the land.

HAYNE J:   The barrister whose dwelling house is resumed may find that dwelling house particularly convenient because it is close to his or her chambers, they can get into work early.  Lucky them.  Is that to be given some special value?

MR QUICK:   On the existing authority, it is.

GLEESON CJ:   Indeed, that is very close to an example that Chief Justice Bray gave of what he called a typical case of special value, he said a “doctor’s consulting rooms”.

MR QUICK:   Yes.

GLEESON CJ:   You can test the principle, can you not, very well by the other example he gave of a typical case:  agricultural land worked in conjunction with a neighbouring residence or farm buildings.  Take that case.  Suppose that such land is resumed and the resuming authority is obliged to pay the value of the land to the owner, what is the process of reasoning that leads you to the conclusion that that exceeds the market value?

MR QUICK:   Your Honour, I did not hear the very first part of your Honour’s question, I beg your pardon?

GLEESON CJ:   I am taking an example from Chief Justice Bray, which he says is a typical case of special value:  an agricultural land worked in conjunction with a neighbouring residence or farm buildings, and my question is, what is the process of reasoning that leads you to the conclusion that the value of that land to the owner exceeds its market value?

MR QUICK:   It is the proximity to a place where an activity is carried on.

GLEESON CJ:   But why would the owner pay more than anybody else in the community?

MR QUICK:   Because it is only the owner who has the proximity to the place where the activity is carried on.

GLEESON CJ:   But who is bidding him up above the amount that would be paid by anybody else?

MR QUICK:   Your Honour, we would submit no one, because what is contemplated in special value is not a competitive situation at all.  It is a question of what the dispossessed owner would demand in order to be convinced to pay it.  He is not willing to sell.  He is just there but this is the amount which he would demand rather than to be dispossessed of the land because that is what he values it at.  I am not sure that is a very satisfactory way of answering your Honour’s question.

GAUDRON J:   That puts the dispossessed owner back in the position of the vendor for the purposes of valuing or assigning an amount to what is said to be special value.

MR QUICK:   I agree that that is an implication ‑ ‑ ‑

GAUDRON J:   And once you do that you come back to what Justice Callinan asked you.  Why would not all this information which is said to constitute a head start be made available in theory to a purchaser?

MR QUICK:   Because, as authority has it and the words used by Lord Moulton and the words used by Chief Justice Bray clearly have the dispossessed owner not as a vendor.  They have that person as a purchaser.  If I could refer to the particular passages.

GAUDRON J:   You have done that in relation to Pastoral Finance.

MR QUICK:   In relation to Arkaba Holdings, the passage in (1970) SASR 94 at 100, where Chief Justice Bray says – I am reading from paragraph 11 of our submissions on page 2:

Special value must in my view arise from some attribute of the land, some use made or to be made of it or advantage derived or to be derived from it, which is peculiar to the claimant and would not exist in the case of the abstract hypothetical purchaser.

Then his Honour goes on:

Would a prudent man in the position of the claimant have been willing to give more for this land than the market value rather than fail to obtain it –

so, he is a purchaser there –

or regain it –

again a purchaser –

if he had been momentarily deprived of it.

GAUDRON J:   All right, now, let it be assumed that that does not accurately reflect the true principle – let it be assumed.  What is there then, if the true principle be one that requires the question to be asked in relation to a vendor, that, of the matters that go to constitute head start, that would not be made available to a purchaser?

MR QUICK:   Your Honour, in one case one is dealing with information which a willing vendor has and will make available to someone else but ‑ ‑ ‑

GAUDRON J:   Yes, we understand that, but we are asking you to accept that the point of principle is the opposite of what you contend the authorities say and on that hypothesis, namely, we are looking at a willing vendor.  Then what is there in the matters which you say together make up head start that could not be made available, or would not be made available, to the purchaser, your hypothetical purchaser?

MR QUICK:   Your Honour, it is no longer a matter of knowledge, it is a matter of the capacity to use the knowledge and to develop it; the difference between the two people.  One can assume the knowledge is equal, but the capacity of one person to immediately develop and bring an income stream on, the knowledge is greater on one hand than in the other, by reason ‑ ‑ ‑

CALLINAN J:   Mr Hart really contradicts that, in a sense, because he says, if you are undertaking this sort of development, you put a project team together and you rely upon them, the project team, in effect, to monitor and bring the project to fruition.  So there is no reason why the efforts of that project team and that project team itself could not be used –…..a purchaser.  There is no knowledge in it that does not belong to the project team.

MR QUICK:   Your Honour, the assumption that is implicit in your Honour’s question, if I may say so with respect, is that the same project team is going to be available to the purchaser as was available to the dispossessed owner.  Now that may not be so, for very good reason, they may not like the new purchaser.

CALLINAN J:   But all of their work would have been committed, in one way or another, to paper, and not only would it be readily transmissible, but the vendor would have no interest in using it, because it could not be used on any other site, it is unique to that site, and this development was, we were told anyway, a unique development, apart from Paddy’s Market.

MR QUICK:   The situation that your Honour then puts to me is that the project team is no longer in place, or some part of it is not, but their work is recorded.  One then has to find a new project team, have that project team familiarise itself with what has to be done, be available to do what has to be done.  All of those things take time, your Honour, and that is what the case is all about.

CALLINAN J:   I would have thought about a week, perhaps, Mr Quick, really.  To suggest that 20 months would be involved is, I think, absurd, and obviously Justice Branson thought so, too.

MR QUICK:   Your Honour, with respect, it is our submission that her Honour Justice Branson did not come to that conclusion at all and I will refer your Honour to the evidence.  What her Honour has decided is that she was precluded from even investigating the head start without expecting a total equality of situation between the new owner and the old owner, and that is not the case.  Although there might be a requirement on one understanding of the law, which we do not, in our submission, say is correct, even though there may be an equality of knowledge required by Spencer’s Case, if that be the law for all purposes, including the assessment of special value, there is nothing in her Honour’s judgment to say that there is no head start.  What her Honour says is she puts it in the negative.  First of all her Honour says, “There will be some people who repeat everything and do the whole lot again, but there will be some people who might take up everything and just start, if they have got the capacity to do it.”  Statistically, there will be some people in the middle, and that is probably the most probable.

Then your Honour goes on to say, “It cannot reasonably be hypothesised that there is not a person who would start immediately.”  Her Honour does not find that a person acting prudently would do that.

GLEESON CJ:   I thought what she actually said is the point of having a hypothetical purchaser is to eliminate considerations like that.  Tell me ‑ ‑ ‑

MR QUICK:   Your Honour, I agree with that, but the questions that I am answering, your Honour, are as to the fact of – Justice Callinan was putting questions to me in relation to the fact, I was attempting to argue those.

GLEESON CJ:   Thank you.  Mr Quick, in your submission, was Arkaba v Commissioner of Railways correctly decided or wrongly decided?

MR QUICK:   On the facts of the matter, your Honour?

GLEESON CJ:   On the facts.

MR QUICK:   Could I take that on notice and deal with it tomorrow morning, your Honour?

GLEESON CJ:   All right, the other question you might take on notice is why Arkaba was not a classic head start case.

MR QUICK:   Thank you, your Honour, I will take that on notice.

GLEESON CJ:   Against the possibility of complaints made by your opponents which we would disregard, we will start at 9.30 in the morning,

thereby undermining the basis of the agreement that you have made with them.

MR QUICK:   I will have to think through the consequences of that, your Honour.

GLEESON CJ:   But that is your benefit and it is yours to take such advantage of as you wish.

MR QUICK:   I am grateful to the Court for that.

Might I respectfully ask the Court one matter.  We have sought leave in our submissions to argue the correctness of Giannarelli v Wraith.

GLEESON CJ:   Why do you not put whatever arguments you want to put on that point, and we will reserve the question of whether we should give leave.  In other words, we will not decide the leave issue.  Is that a convenient way for everybody.

MR QUICK:   Yes, it is, your Honour, and the submissions will be very short.  We largely rely on what is written.

GLEESON CJ:   Is that suitable?  All right, we will do that.  We will adjourn until 9.30 in the morning

AT 4.15 PM THE MATTER WAS ADJOURNED