of hostilities-System of land sales control in force at relevant date-" Value -Lands Acquisition Act 1906-1936 (No. 13 of 1906-No. 60 of 1936), S. 28 (1) (a).

Under the Lands Acquisition Act 1906-1936 in estimating the value of land to an owner dispossessed during a period of land sales control, where the land possesses no particular suitability for some particular business or activity carried on by the owner and has no added potential value if put to better use, the valuer should estimate the price which a vendor willing but not anxious to sell would agree to, if he were allowed, and a willing purchaser would give to obtain, although in his turn he would be subject to controls in re-selling. To arrive at the result he is at liberty, if on the evidence that seems the most satisfactory method, to take into account what he estimates to be the price at which the Treasurer would have consented to the sale at the relevant date and an amount representing the increased value of the land which must arise, if from nothing else, from the fact that when controls terminated it would sell in a free market and might be expected to realize a greatly enhanced price.

Decision of Webb J. affirmed.

APPEAL from Webb J.

On 16th May 1951 Phyllis Joy Arklay commenced an action as plaintiff in the High Court of Australia against the Commonwealth of Australia, as defendant to recover compensation for the acquisi- tion by the defendant on 12th December 1946 of her land situated at 481 Sydney Road, Coburg, Victoria. A statement of the facts appears in the judgment of Webb J. hereunder.

Gregory Gowans Q.C. and P. H. N. Opas, for the plaintiff. G. A. Pape, for the defendant.

Our. adv. vult.

87 CLR 160

WEBB J. delivered a written judgment of which the following are, for the purposes of this report, the material portions :-

In this action the plaintiff claims compensation for land resumed under the Lands Acquisition Act 1906-1936 on 12th December 1945. On the land there was a brick shop with a modern type front. The items of the claim in the prescribed form addressed to the Minister were:

1. Improved value of land 2. Added value given by improvements 3. Loss of business of grocer and hardware merchant

on acquired land and re-establishment in similar business elsewhere On 14th November 1950 the Minister offered £5,500 as compensation. This was refused.

In the statement of claim compensation was claimed on the following basis:

(1) Loss of the said freehold property as measured by

the cost of purchasing a comparable freehold property in the vicinity thereof (2) Cost of purchasing tenancy interest and goodwill of

premises at 106 Bell Street, Coburg aforesaid in order to carry on the said hardware business tem- porarily (3) Cost of alterations and renovations to render the

said temporary premises suitable…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Commonwealth v Arklay

Details

AGLC: Commonwealth v Arklay [1952] HCA 76
Case: [1952] HCA 76
Decision Date: 31 July 1952

CaseChat Overview and Summary

The plaintiff, Phyllis Joy Arklay, commenced an action in the High Court of Australia against the defendant, the Commonwealth of Australia, seeking compensation for the compulsory acquisition of her land. The dispute concerned the amount of compensation payable for the land and improvements, with the plaintiff claiming a higher sum than the defendant was prepared to offer.

The central legal issue before the court was how to determine the "value" of land for compensation purposes under the *Lands Acquisition Act 1906-1936* when the acquisition occurred during a period of land sales control. Specifically, the court had to decide whether the compensation should be limited to the price permitted by government controls, or if it could include an amount reflecting the potential for a higher price in a free market after controls were lifted.

The court reasoned that while the *Lands Acquisition Act* requires compensation to be assessed according to the value of the land at a specific date, this value must be determined in a manner that provides "just terms" as mandated by the Constitution. In a period of land sales control, the hypothetical price a willing but not anxious seller would accept from a willing purchaser must account for the fact that controls might eventually be lifted. Therefore, the valuation should consider not only the controlled price but also an amount representing the anticipated increase in value once controls cease. The court affirmed the decision of Webb J., finding that the plaintiff was entitled to compensation that included this "retention value" or potential future enhanced price, in addition to the controlled price.

The Full Court dismissed the appeal, upholding the trial judge's assessment of compensation. The court found that the trial judge had correctly applied the principles of valuation under the *Lands Acquisition Act*, particularly in considering the potential for enhanced value after the cessation of land sales controls. The compensation awarded to the plaintiff was £3,800, representing the outstanding amount after an initial payment.

Orders