THE COMMONWEALTH MILLEDGE Resumption-Land-Compensation-Acquisition by Commonwealth-Assessment-
Value-Effect of land sales controls--Allowance for fall in purchasing power of money-Business disturbance-Existing business-Valuation for more profitable use-Lands Acquisition Act 1906-1936-(No. 13 of 1906-No. 60 of 1936), S. 29.
A claim for compensation was made in respect of certain land acquired under the Lands Acquisition Act 1906-1936 (Cth.). The following two matters in respect of which compensation was claimed, were in dispute (1) the unimproved value of certain freehold land, and (2) the amount of compen- sation to be allowed for disturbance of the plaintiff's business of a dairy and racing stud. At the date fixed by the Act for assessing compensation, the price for which land might be sold was controlled by law. Valuations of the land were made by six professional valuers. The valuations differed widely, not only in result, but also in approach and choice of material. Some were made on the footing that land sales were still controlled; some on the footing of a free market others on other hypothetical circumstances. They gardening land, the purpose for which, economically, it was best adapted. The trial judge, who considered all the valuers to be men of experience and integrity, assessed compensation by giving cumulative effect to the various opinions, semble, by taking as a figure from which to work, the average of
Held, by Dixon C.J. and Kitto J., that the trial judge had acted on a wrong principle.
Held, further, by the whole Court, that the value of the land was to be ascertained by asking what price would be agreed upon between a willing seller and a willing buyer, on the assumption that official consent to the sale
would be forthcoming but that the buyer would himself be subject to control if and when his turn came to sell, should the controls not be terminated in the meantime.
The Commonwealth v. Arklay (1952) 87 C.L.R. 159 applied. Held, further, by the whole Court, that an additional sum allowed by the trial judge by reason of the fall in the purchasing power of money between the date fixed for assessment and the date of his judgment ought not to have been included.
Held, further, by Dixon C.J. and Kitto J. and, semble, by Webb J., that a claim for compensation for disturbance to an existing business conducted on land acquired under the Act could not be sustained where the land had been valued on the basis of its suitability for some more profitable use than that to which it was being put at the date of acquisition.
Standard Fuel Co. v. Toronto Terminals Railway Co. (1935) 3 D.L.R. 657 and Horn v. Sunderland Corporation (1941) 2 K.B. 26 followed.
Decision of the Supreme Court of South Australia (Mayo J.) reversed.
APPEAL from the Supreme Court of South Australia.
In an action brought by James Henry Milledge against the Commonwealth, compensation was claimed in respect of an acquisi- tion of land effected under the
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.
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AGLC
Commonwealth v Milledge [1953] HCA 6
Case
[1953] HCA 6
Decision Date
CaseChat Overview and Summary
The Commonwealth appealed to the High Court of Australia against a decision of the Supreme Court of South Australia concerning compensation for land acquired under the *Lands Acquisition Act 1906-1936* (Cth). The dispute involved two primary matters: the unimproved value of certain freehold land and the compensation awarded for the disturbance of the respondent's dairy and racing stud business. The date for assessing compensation was fixed as 1 January 1946, a period when land sales were subject to legal controls.
The High Court was required to determine whether the trial judge had applied the correct legal principles in assessing the unimproved value of the land and in awarding compensation for business disturbance. Specifically, the court needed to consider how land sales controls should be factored into the valuation, whether an allowance for the fall in the purchasing power of money between the assessment date and the judgment date was permissible, and whether compensation for business disturbance could be awarded when the land was valued on the basis of a more profitable use.
The Court held that the trial judge had erred in his approach to valuation. The unimproved value of the land should be determined by the price a willing seller and a willing buyer would agree upon, assuming official consent to the sale, but with the buyer also subject to existing controls if they remained in effect. The additional sum awarded by the trial judge for the fall in the purchasing power of money was also disallowed, as the *Lands Acquisition Act* mandated valuation as at a specific past date and did not provide for adjustments due to currency depreciation. Furthermore, the Court found that compensation for business disturbance could not be awarded where the land had been valued based on its suitability for a more profitable use than the existing business.
The appeal was allowed, the judgment of the Supreme Court was set aside, and a new trial was ordered. The costs of the former trial were to be determined by the court at the new trial, and the parties were to bear their own costs of the appeal.