Leichhardt Council v Roads and Traffic Authority (NSW)

[2006] NSWCA 353

Reported Decision: 149 LGERA 439

Court of Appeal

CITATION:	Leichhardt Council v Roads & Traffic Authority of NSW [2006] NSWCA 353
HEARING DATE(S):	20 October 2006
JUDGMENT DATE:	11 December 2006
JUDGMENT OF:	Spigelman CJ at 1; Beazley JA at 85; Bryson JA at 86; Basten JA at 98; Campbell J at 99
DECISION:	1 Appeal allowed in part; 2 Set aside the judgment of the Land and Environment Court delivered on 4 March 2005 to the extent that it assesses market value pursuant to s55(a) of the acquired land; 3 Remit the matter to the Land and Environment Court for redetermination of the market value of the land without reduction on account of the statutory constraint on alienation of the land in the hands of the Appellant; 4 Respondent to pay the Appellant’s costs of the appeal.
CATCHWORDS:	LAND VALUATION – Compulsory Acquisition – Determination of Market Value – Where land cannot be sold – Whether rule in Corrie v MacDermott applies to valuation under the Land Acquisition (Just Terms Compensation) Act 1991.
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979: s 94 Land Acquisition (Just Terms Compensation) Act 1991: ss 3, 5, 20, 37, 38, 54, 55, 56, 57, 58, 59 Land and Environment Court Act 1979: s 57 Lands Acquisition Act 1989 (Cth) Local Government Act 1993: 25, 35, 45 Public Works Act 1912: ss 51, 124
CASES CITED:	Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 Boland v Yates Property Corp Pty Limited (1999) 74 ALJR 209 Butler v Attorney General (Vic) (1961) 106 CLR 268 Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 Corrie v MacDermott [1914] AC 1056; 18 CLR 511 Ferdinands v Commissioner for Public Employment [2006] HCA 5; 80 ALJR 555 Ganter v Whalland (2001) 54 NSWLR 122 Geita Sebea v Territory of Papua (1941) 67 CLR 544 Hornsby Shire Council v Roads & Traffic Authority of New South Wales (1998) 100 LGERA 105 MacDermott v Corrie (1913) 17 CLR 223 Minister for Public Works v Thistlethwayte [1954] AC 475 Nelungaloo Pty Limited v The Commonwealth (1948) 75 CLR 495 Roads & Traffic Authority v Hurstville City Council (2001) 112 LGRA 223 Royal Sydney Golf Club v Commissioner of Taxation (1955) 91 CLR 610 Saraswati v The Queen (1991) 172 CLR 1 Spencer v The Commonwealth (1907) 5 CLR 418 Sydney Harbour Foreshore Authority v Walker Corp Pty Ltd (2005) 63 NSWLR 407 Sydney Sailors’ Home v Sydney Cove Redevelopment Authority (1977) 36 LGRA
PARTIES:	Leichhardt Council (Appellant) Roads & Traffic Authority of New South Wales (Respondent)
FILE NUMBER(S):	CA CA 40166 of 2005
COUNSEL:	T Robertson SC, L Goodchild (Appellant) B Walker SC, A Galasso SC (Respondent)
SOLICITORS:	Margaret Lyons (Appellant) Clayton Utz (Respondent)
LOWER COURT JURISDICTION:	Land & Environment Court
LOWER COURT FILE NUMBER(S):	30318 of 2003
LOWER COURT JUDICIAL OFFICER:	Lloyd J
LOWER COURT DATE OF DECISION:	4 March 2005
LOWER COURT MEDIUM NEUTRAL CITATION:	[2005] NSWLEC 86

- 2 -

40166/2005

SPIGELMAN CJ
BEAZLEY JA
BRYSON JA
BASTEN JA
CAMPBELL J

Monday 11 December 2006

LEICHHARDT COUNCIL v ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES

The Appellant Council was the registered proprietor of land used as open space. The Respondent compulsorily acquired the land from the Council in order to construct the City West Link Road.

The land in question was subject to a number of restrictions, including a classification as “community land” under the Local Government Act 1993. Only land owned by a local government authority could receive such a classification. Section 45 of the Local Government Act prevented a Council owning land so classified from selling it.

In proceedings before the Land and Environment Court, Lloyd J found the market value of the acquired land to be $1,175 per square metre. However, when determining the compensation payable to the Council for the acquisition of the land, his Honour reduced that figure by 80 percent by reason of the statutory restrictions on the land, including the restriction on alienability. His Honour’s basis for discounting the market value involved an application of MacDermott v Corrie (1913) 17 CLR 223 and, on appeal, Corrie v MacDermott [1914] AC 1056.

The Appellant appealed to this Court, arguing that Corrie v MacDermott could no longer apply as it was inconsistent with the terms of the Land Acquisition (Just Terms Compensation) Act 1991 (the “Act”). The Appellant submitted that it was a requirement of the Act that the market value of land be determined “as if it had been sold”.

The Respondent filed a Notice of Contention and submitted that the 80% reduction in value was otherwise supportable on the basis of the other restrictions upon the land.

HELD
Valuation
Per Spigelman CJ, Beazley, Bryson, Basten JJA and Campbell J agreeing

1 Corrie v MacDermott was based on the concept of “value to the owner”, which was formerly a unifying concept of land valuation, and was applied to the interpretation of statutory schemes which used the formulation “value of land”. Section 55 of the Act should not be interpreted by reference to “value to the owner”. When a restriction affects only the person whose land has been acquired, the restriction is not a matter that must be applied when determining market value. [32], [85], [86], [91], [98], [99]

Boland v Yates Property Corp Pty Limited (1999) 74 ALJR 209; Spencer v The Commonwealth (1907) 5 CLR 418; Minister for Public Works v Thistlethwayte [1954] AC 475 considered.
MacDermott v Corrie (1913) 17 CLR 223; Corrie v MacDermott [1914] AC 1056; Sydney Sailors’ Home v Sydney Cove Redevelopment Authority (1977) 36 LGRA 106 distinguished.
Hornsby Shire Council v Roads & Traffic Authority of New South Wales (1998) 100 LGERA 105; Roads & Traffic Authority v Hurstville City Council (2001) 112 LGRA 223 not followed.
Sydney Harbour Foreshore Authority v Walker Corp Pty Ltd (2005) 63 NSWLR 407; Nelungaloo Pty Limited v The Commonwealth (1948) 75 CLR 495 referred to.


2 The definition of “market value” in s 56 of the Act is an objective test for which considerations entirely personal to an owner are not material. [42], [85], [86], [98], [99]

3 A discount to the value of the land by reason of the restraint on alienation of community land is inconsistent with the statutory hypothesis according to which s56 requires the land to be assessed, and should not be applied. [59], [85], [86], [87], [98], [99]

Ferdinands v Commissioner for Public Employment [2006] HCA 5 applied.
Geita Sebea v Territory of Papua (1941) 67 CLR 544; Royal Sydney Golf Club v Commissioner of Taxation (1955) 91 CLR 610 considered.
Saraswati v The Queen (1991) 172 CLR 1; Butler v Attorney General (Vic) (1961) 106 CLR 268 referred to.


Per Bryson JA

4 Section 56(1) can only be applied if it is assumed that the land can be sold. [87]

5 The principle in Corrie v MacDermott is unclear. [90]

Corrie v MacDermott [1914] AC 1056 considered.


6 The purpose of the restriction on sale of community land does not include making it cheaper for resuming authorities to acquire community land than other land, and did not include offering them temptations to resume community land rather than other land. [89]

Per Campbell J

7 This interpretation is further confirmed by reference to s94 of the Environmental Planning and Assessment Act 1979, which permits land to be overdeveloped on condition that other land be dedicated as open space. It is unlikely that Parliament would have intended ss54, 55 and 56 of the Act to undermine the purpose of this scheme. [102]

Ganter v Whalland (2001) 54 NSWLR 122 referred to.


Appropriate Orders
Per Spigelman CJ, Beazley, Bryson, Basten JJA and Campbell J agreeing

8 As it is not clear that the discount of 80 percent related only to the restriction on alienation, but appears to have taken other factors into account, it is appropriate to remit the matter to the Land and Environment Court. [64], [73], [85], [86], [98], [99]

Notice of Contention

9 It is not possible to uphold the discount of 80 percent on the basis of the other restrictions upon the land. [75], [80], [85], [86], [98], [99]

Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 referred to.

ORDERS


1 Appeal allowed in part.

2 Set aside the judgment of the Land and Environment Court delivered on 4 March 2005 to the extent that it assesses market value pursuant to s55(a) of the acquired land.
3 Remit the matter to the Land and Environment Court for redetermination of the market value of the land without reduction on account of the statutory constraint on alienation of the land in the hands of the Appellant.
4 Respondent to pay the Appellant’s costs of the appeal.

40166/2005

SPIGELMAN CJ
BEAZLEY JA
BRYSON JA
BASTEN JA
CAMPBELL J

Monday 11 December 2006

LEICHHARDT COUNCIL v ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES

Judgment

1 SPIGELMAN CJ: The Appellant (“the Council”) was the registered proprietor of land with an area of about 2,042 square metres. The land was open space with trees and other plants and two fenced cricket practice pitches. The Council managed its land in conjunction with its management of the adjoining Crown land known as Blackmore Park. The Respondent (“the RTA”) acquired part of the Council land for the purposes of the construction of the City West Link Road.

2 In proceedings in the Land and Environment Court, Lloyd J determined that the market value of the acquired land was $1,175 per square metre, giving a total of $1,053,740. His Honour reduced that market value by 80 percent because of certain statutory constraints, to be set out below, and applied in his computations a total value of $210,750 as the market value of the land. By reason of other adjustments, his Honour awarded an amount of $299,446. The Appellant asserts that if his Honour had applied the full market value of the land, without the deduction, it should have received an award of $1,465,438.50.

3 The land in question was “community land” within the provisions of the Local Government Act 1993, which I will set out below. Lloyd J regarded himself as bound to apply the judgment of this Court in Hornsby Shire Council v Roads & Traffic Authority of New South Wales (1998) 100 LGERA 105, in which land classified as community land was assessed for compensation, after the application of a substantial discount to its market value, by reason of the same restriction as applies in the present case. The origins of Australian doctrine with respect to taking into account the extent to which restrictions affect the value of the land is to be found in the judgment of the High Court in MacDermott v Corrie (1913) 17 CLR 223 and, on appeal, in the Privy Council, Corrie v MacDermott [1914] AC 1056; 18 CLR 511.

4 The Appellant contends that this Court should no longer follow the decision in the Hornsby Shire Council case and should determine that the principle identified in Corrie v MacDermott does not apply to the computation of compensation for community land owned by a Council and subject to the restrictions of the Local Government Act.

5 By s57 of the Land and Environment Court Act 1979, appeals to this Court from decisions of this character are limited to an appeal “on a question of law”. The Appellant raises a question of law, namely, the interpretation of s54, s55 and s56 of the Land Acquisition (Just Terms Compensation) Act 1991 (“the Land Acquisition Act”).

Statutory Scheme

6 The relevant provisions of the Land Acquisition Act are as follows:

“3(1) The objects of this Act are:
(a) to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will be not less than the market value of the land (unaffected by the proposal) at the date of acquisition , and
(b) to ensure compensation on just terms for the owners of land that is acquired by an authority of the State when the land is not available for public sale …”
“20(1) On the date of publication in the Gazette of an acquisition notice, the land described in the notice is, by force of this Act:
(a) vested in the authority of the State acquiring the land, and
(b) freed and discharged from all estates, interests … in … the land.”
“37 An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part by the authority of the State which acquired the land .”
“54(1) The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land .”
“55 In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division):
(a) the market value of the land on the date of its acquisition ,
(b) any special value of the land to the person on the date of its acquisition ,
(c) any loss attributable to severance ,
(d) any loss attributable to disturbance ,
(e) solatium ,
(f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.”

7 The “guarantee” referred to in s3(1)(a) of the Act is reinforced by the express obligation under s10 of the Act that, when an authority of the State gives a person written notice to the effect that land is affected by a proposal for acquisition, the notice must contain the following:

“A statement that the Land Acquisition (Just Terms Compensation) Act 1991 guarantees that, if and when the land is acquired by (insert name of authority) under that Act, the amount of compensation will not be less than market value (assessed under that Act) unaffected by the proposal.”

8 Each of the operative terms in s55(a)-(e) is the subject of definition in succeeding sections: s56 (“market value”); s57 (“special value”); s58 (“loss attributable to severance”); s59 (“loss attributable to disturbance”).

9 The relevant definition for present purposes is s56 which provides:

“56(1) In this Act:
market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid):
(a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and
(b) any increase in the value of the land caused by the carrying out by the authority of the State , before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and
(c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law.
(2) When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land , the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State ) exceed the market value of the land at the date of acquisition .”

10 This appeal turns on the fact that the land to be valued was classified as community land under Ch 6 Div 1 of the Local Government Act 1993. The relevant provisions are:

“25 All public land must be classified in accordance with this Part.
26 There are 2 classifications for public land – ‘community’ and ‘operational’.
27(1) The classification or reclassification of public land may be made by a local environmental plan.
(2) The classification or reclassification of public land may also be made by a resolution of the council under section 31, 32 or 33.”

(Sections 31, 32 and 33 do not apply to the acquired land.)

11 The restrictions contained in the Local Government Act 1993, which determined the amount of compensation awarded by Lloyd J, are found in Div 2 of Pt 2 of Ch 6 of that Act, entitled “Use and management of community land”. The directly relevant sections are:

“35 Community land is required to be used and managed in accordance with the following:
• the plan of management applying to the land
• any law permitting the use of the land for a specified purpose or otherwise regulating the use of the land
• this Division.”
“45(1) A council has no power to sell, exchange or otherwise dispose of community land.
(2) A council may grant a lease or licence of community land, but only in accordance with this Division.”

12 The Division goes on to significantly restrict the ability of the Council to lease or licence community land in terms which do not need to be set out for present purposes.

The Appeal

13 The issue in this appeal is a narrow point of statutory interpretation of the provision for a hypothetical sale, contained in the definition of “market value” in s56(1) of the Land Acquisition Act, as set out above. That sale is based on the amount that would have been paid for the land “if it had been sold”. The issue is whether or not the restriction on sale or disposal in s45(1) of the Local Government Act 1993 can be regarded as a restriction affecting the value of the land, within the principle identified in Corrie v MacDermott, for the purposes of s56(1) of the Land Acquisition Act.

14 I do not doubt that the principle in Corrie v MacDermott is appropriate to be applied to various kinds of restrictions upon the use of land, e.g. zoning restrictions. However, the application of that principle must be determined in accordance with the relevant statutory scheme.

15 Mr B Walker SC, who appeared for the RTA, submitted that there was no contradiction between an assumption that a sale of land occur and the fact that no sale could actually happen. He submitted that the notion of an actual transfer plays no part in the relevant operation of the Act, nor in the prior case law. The only “fiction” he submitted, is the assumption that the assessment is done between willing participants, as distinct from being forced.

16 Mr T Robertson SC, who appeared for the Appellant, submitted that a valuer under the Land Acquisition Act must assume both a sale and willing parties. That is expressly required by the words “if it had been sold”.

17 In my opinion, for the purposes of s56(1) of the Land Acquisition Act, the statutory prohibition on sale of community land cannot be taken into account under the principle of Corrie v McDermott, when determining the market value of the acquired land.

Prior Case Law

18 It is open to this Court to determine the issue that has arisen. I am further of the opinion that leave to argue that the Hornsby Shire Council decision should not be followed is not required. The reason why I do not believe leave is required is that the point that is sought to be argued in this case was expressly conceded in Hornsby Shire Council. In any event, if leave is required, it should be granted. The Appellant raises an issue of importance and of substance.

19 Stein JA, who delivered the principal judgment in Hornsby Shire Council, said at 107:

“ The Appellant accepts that the classification of the parcels as ‘community land’ under the LG Act constitutes a restriction which is relevant to the determination of compensation upon resumption. Corrie v MacDermott (at 1062) is authority for the proposition that it is necessary to determine to what extent the restrictions affect the value of the land. The chance of those restrictions being discharged must also be considered (at 1064). Finally a restriction which prevents sale by the dispossessed owner will not reduce its value to nil (at 1064).” [Emphasis added]

20 To similar effect are the observations of Priestley JA who said at 106:

“ The Appellant accepted the correctness, and the applicability to the present case, of Corrie v MacDermott [1914] AC 1056. I agree with the reasons given by Stein JA for concluding that the Appellant’s argument, which took what was called the rule in Corrie v MacDermott as one of its premises, should not be accepted.” [Emphasis added]

21 A similar concession was made in Roads & Traffic Authority v Hurstville City Council (2001) 112 LGRA 223 at [14].

22 Other authorities, whilst applying Corrie v MacDermott, are also inconclusive. For example, in Sydney Sailors’ Home v Sydney Cove Redevelopment Authority (1977) 36 LGRA 106, this Court was concerned with a restriction on disposition under a declaration of trust. The landowner could not sell the land without approval of the Governor. Hope JA, with whom Moffitt P and Glass JA agreed, applied Corrie v MacDermott stating at 118 that the reasoning in that case did apply to “restrictions on disposition”. This was not, however, a case in which there was a prohibition on alienation. The restriction involved was the need to obtain the Governor’s consent. Indeed, Hope JA noted at p116:

“The declaration of trust did not affect the owner’s notional power to convey the fee simple to the authority.”

23 Corrie v MacDermott concerned a reservation in a Crown grant of land, which grant significantly restricted the sale or lease of the land. The Crown reserved the right to resume the land for a public purpose, subject to payment of “the value of the said land … at a valuation fixed by arbitrators”. In accordance with a long line of authority the word “value”, in the context of compulsory acquisition, was held to mean “value to the owner”. (See e.g. [1914] AC at 1062 1065-1066; 17 CLR at 234-5, 239, 248-251.) As Barton ACJ put it (17 CLR at 233): “[T]he word ‘value’ in the grant, prima facie means the value to the owner”. (See also Boland v Yates Property Corp Pty Limited (1999) 74 ALJR 209 at [11].)

24 The traditional formulation of “value to the owner” was developed as a gloss on the statutory words “value of land” or equivalent appearing in a statute authorising compulsory acquisition. It was a unifying concept which encompassed “market value”, “special value”, “disturbance” and “severance”. “Value to the owner” was not a concept which, at least in its origins, operated as an addition to market value. Rather, market value was, in most cases, the way of computing “value to the owner”. As Barton ACJ said in Corrie v MacDermott at 233, the test in Spencer’s case was “a broad rule for ordinary cases of resumption” and constituted “value to the owner”. (Referring to Spencer v The Commonwealth (1907) 5 CLR 418.)

25 To similar effect are the observations of Lord Tucker in Minister for Public Works v Thistlethwayte [1954] AC 475 at 491:

“It must not be forgotten that it is the value of the land to the owner that has to be ascertained, and that the willing seller and purchaser is merely a useful and conventional method of arriving at a basic figure to which must be added in appropriate cases further sums for disturbance, severance, special value to the owner and the like.”

This passage was referred to with approval in Boland v Yates Property Co supra at [83].

26 Corrie v MacDermott should be understood as an application of the concept of “value to the owner”. This unifying concept was most commonly applied to increase the amount of compensation over market value when the land had a positive special value to the owner. In Corrie v MacDermott the concept was applied to reduce the compensation when the land had what could be described as a negative special value to the owner.

27 In general terms, it might be appropriate to characterise the whole of s55(a)-(e) as collectively answering the description “value to the owner”. Other than in that sense, the reasoning in Corrie v MacDermott is not directly applicable to s55. That section requires that separate consideration be given to each of its sub-paragraphs and to each of the definitions in ss56-60. The word “value”, let alone “value to the owner”, has no operative function. “Value” only appears in conjunction with another word – “market value”, “special value” – and the conjoined words are precisely defined.

28 The Land Acquisition Act was clearly influenced by the Lands Acquisition Act 1989 (Cth), which was based on the Report of the Australian Law Reform Commission. That Report recommended the replacement of the “value to the owner” approach by a statutory list, subject to a “just compensation override”. (See ALRC Report No 14 Lands Acquisition and Compensation Canberra 1984 at [231]-[237].) This recommendation is clearly reflected in s54 and s55. Indeed, the New South Wales Parliament, unconstrained by a Constitutional requirement of just terms, could and did go further by making the list an exhaustive one.

29 In the prior case law, notably under s124 of the Public Works Act 1912, the relevant formulation was “value of the land”. That is not the formulation that falls to be interpreted under the Land Acquisition Act. It is always dangerous to characterise a statutory provision and then to apply the formulation in the characterisation, rather than to apply the words of the statute. Under the Land Acquisition Act, the characterisation “value to the owner” is not applicable. The earlier case law must be treated with care.

30 Section 55(a)-(e), together with the distinct definitions in ss56-60, contains five components. The component identified in s55(a), as defined in s56, must be given a meaning in accordance with the law of statutory interpretation. There is no warrant to refer to an extraneous concept, such as “value to the owner”, derived from case law based on different, albeit analogous, legislation.

31 Section 3(1)(a) of the Act states that it is one of the objects of the Act to “guarantee that … the amount of compensation will be not less than the market value of the land”. This guarantee confirms that the terminology of “market value” is not used in the sense of “value to the owner”, which was the unifying concept that was applied to reduce the amount of compensation below market value in Corrie v MacDermott.

32 In my opinion, once the idea of “value to the owner” is taken away as a unifying concept, as it has been, the foundation of the reasoning in Corrie v MacDermott has also been removed. There are, of course, restrictions on use, e.g. zoning, which affect all vendors and purchasers in the hypothetical sale. Where, however, a restriction affects only the person whose land has been acquired, in my opinion, the restriction is not a matter that must be applied when determining the market value.

33 I note the Appellant’s submission that previous case law is not relevant on the basis that the Lands Acquisition Act constituted a radical change to the law in that it regulated for the first time acquisition by agreement and not only by resumption. (See s5(1) and s38 of the Land Acquisition Act.) This submission does not appear to be correct.

34 Section 51 of the Public Works Act 1912 applied to the purchase of land by agreement. Section 124 of that Act, which sets out the basis for assessment of the value of land, applied both to “compensation”, applicable to compulsory acquisition, and to the ascertainment of “the purchase money”, applicable to acquisition by agreement. Under the Land Acquisition Act, the s55 list, albeit by force of s38 not exhaustively, applies to a broader range of consensual acquisitions than the 1912 Act. However, that application cannot be characterised as a “radical departure” which, of itself, renders the earlier case law inapplicable.

The Statutory Text

35 Matters of valuation turn in large measure on the precise statutory scheme. These schemes differ from one area of discourse to another. It is always important to commence with the precise words of the statute. There appears to be a tendency to take a judgment about one statutory regime and classify its conclusion as a “valuation principle” which is applied to any process of valuation, no matter how different the statutory regime may be.

36 The need to determine the value of assets arises in many different legal contexts. It is the context which determines the relevant principles of valuation to be applied. An assumption that there is in existence some abstract body of “valuation principles” applicable in all contexts, irrespective of the statutory scheme or contractual provision, is liable to lead to error. Judgments in one context may prove instructive by way of analogy when dealing with another context. Nevertheless, statutory differences must be borne in mind. The ultimate task must always come back to the application of the principles in the particular context, relevantly in the present case, to a statutory formulation that is expressed to be exhaustive. (See Sydney Harbour Foreshore Authority v Walker Corp Pty Ltd (2005) 63 NSWLR 407 at [23], [32].)

37 The context in which, relevantly, s56(1) falls to be interpreted, is as one of the matters identified in s55, which constitutes an exhaustive list to which regard must be had when determining the amount of compensation under s54. These matters do not, however, constitute a mathematical formula. They are matters which the valuer must take into account. The dominant test is contained in s54, that is, the task is to determine the amount that will “justly compensate the person for the acquisition of the land”. This carries into effect the object of the Act set out in s3(1)(b) “to ensure compensation on just terms for the owner of land that is acquired …”.

38 The statutory context of “compensation” is reinforced by s37 which creates the basic entitlement as a right “to be paid compensation”. As Dixon J said in Nelungaloo Pty Limited v The Commonwealth (1948) 75 CLR 495 at 571: “Compensation prima facie means recompense for loss …”.

39 A focus on what will “justly compensate” for an “acquisition” encompasses the loss of the property. Indeed, by s37 the entitlement to compensation is conferred upon a person who has been deprived of an interest in land. However, the use of the word “acquisition” in s54(1) and “acquired” in s3(1)(b), rather than a word of deprivation like “loss”, does suggest a slightly different focus than that which has traditionally been applied. The use of language of “acquisition”, rather than language of deprivation, involves a difference in focus that may be subtle, but that is not immaterial.

40 This focus, together with the fact that the legislative scheme to a substantial, but not exact, extent applies to the acquisition of land by agreement as well as to compulsory acquisitions, indicates that it is one of the objects of the Act to ensure proper conduct on the part of State authorities acquiring land.

41 Significantly for present purposes s3(1)(a) states that one of the objects of the Act is to “guarantee” that “compensation will not be less than … market value”. The Court should be slow to interpret the definition of market value in s56(1) as permitting regard to be had to a matter which necessarily means that the owner will not receive market value. With respect to a restraint on alienation applicable only to the particular owner whose land is being acquired, that is what the application of the principle in Corrie v MacDermott to a prohibition on alienation must mean. The Court should not adopt such an interpretation in the absence of express words or necessary intendment.

42 As Mr B Walker SC submitted, the case law, including Spencer’s case, proceeds on the basis of a hypothetical sale. Spencer’s case is, in Australian jurisprudence, the origin of the formulation in s56(1)(a). However, when a judicial formulation is incorporated as a provision in a statute, its legal nature is altered. The words must be interpreted as statutory language, albeit having regard, in an appropriate way, to the origins of the statutory formulation. Section 56(1) is an objective test to which considerations entirely personal to the owner are not material.

43 In my opinion, the statutory prohibition on sale of community land is a consideration which affects the land by reason only of the identity of the person who happens to own it. The process of classification and the concomitant restraint on alienation are not characteristics of the land that are capable of constituting an element of the hypothetical sale for which s56(1) provides.

44 In my opinion, the critical textual indicator for present purposes is the express words in the s56(1) definition of market value: “if it had been sold”. These words necessarily assume that the owner of the property is legally entitled to sell the land. The sale is hypothetical, but the statutory hypothesis is that the land is able to be sold. There is nothing hypothetical about the capacity to sell. The prohibition on sale in s45 of the Local Government Act 1993 is inconsistent with the statutory hypothesis in s56(1) of the Land Acquisition Act.

The Statutory Intersection

45 There is a “general presumption that there is no contradiction between two Acts of the one legislature”. (Ferdinands v Commissioner for Public Employment [2006] HCA 5; 80 ALJR 555 at [48]; see also at [18], [108]-[110]; referring to Saraswati v The Queen (1991) 172 CLR 1 at 17 and see Butler v Attorney General (Vic) (1961) 106 CLR 268 at 276.)

46 This presumption is, in my opinion, applicable where there is a statutory intersection of the character in issue in the present case, namely where the operation of one statute proceeds on a statutory hypothesis which the second statute denies. This is not a case where there is direct contradiction in the operative effects of the two statutory regimes. In such a case the question of implied repeal arises. Where the statute containing the hypothesis can be given full effect, without affecting the operation of the statute which denies the hypothesis, then the second statute should be set aside for purposes of the first statute.

47 The High Court considered an analogous statutory intersection to that involved in the present appeal in Geita Sebea v Territory of Papua (1941) 67 CLR 544. The Court determined that a statutory prohibition on the sale of land by indigenous Papuans was not a restriction that diminished the value of the land for purposes of the valuation there under consideration. Of course, this conclusion was determined by the particular statutory provisions there under consideration. (As Hope JA noted in Sydney Sailors’ Home supra at 118.) Nevertheless, the judgment is instructive.

48 In Geita Sebea, Williams J said at 557:

“The Land Ordinance 1911-1935, sec 3, prohibits the disposal of land owned by natives by sale, lease or any other dealing and any contract made by them to dispose of land is void, but this restriction could have no detrimental effect upon the determination of the value of the land when compulsorily acquired, because in the hands of the Crown it would be freed therefrom. Indeed, the reference in the Lands (Kila Kila Aerodrome) Acquisition Ordinance 1939, sec 3, to the Lands Acquisition Ordinance 1914 is sufficient to show that the appellants as full owners of the land are entitled to have the compensation assessed upon as ample a basis as though it had been acquired from a European.”

49 The “reference” which his Honour mentioned was a provision to the effect that compensation was to be determined as nearly as possible in the manner prescribed in the 1914 Ordinance.

50 Starke J referred to the restriction on sale and said at 555:

“The Lands (Kila Kila Aerodrome) Acquisition Ordinance 1939, however, disposes of the matter. It enables the Government to acquire the lands in question here and prescribes for payment of compensation to the natives or persons entitled thereto.”

51 This reasoning, in my opinion, turns on the unexpressed proposition that a statutory prohibition on sale does not impinge on a process of valuation which assumes the possibility of sale. Unlike the restrictions on alienation in Corrie v MacDermott and Sydney Sailors’ Home, there was an element of inconsistency. In my opinion, as in Geita Sebea, the present case also involves an inconsistency.

52 A similar intersection between statutes arose in Royal Sydney Golf Club v Commissioner of Taxation (1955) 91 CLR 610. That case involved valuation for purposes of land tax of land zoned, in effect, as open space. The taxable value of the land was required by the statute to be computed on the basis of an unencumbered fee simple, with no condition restricting the use of land. The High Court held that the zoning restriction was not the kind of restriction on use which the statute provided was to be excluded from the computation of taxable value.

53 The High Court said at 624:

“There is all the difference between a public law affecting the enjoyment of land and a restriction on title.”

54 The zoning restriction was held to be of the former kind and, accordingly, was not the kind of restriction or encumbrance which the statute said should be ignored in the valuation exercise.

55 The distinction is the very one drawn by Isaacs J in MacDermott v Corrie at 245-246:

“…[T]he law has … made it incapable of being sold or leased by the Society … It is impossible, therefore, to regard the land as having the attribute of an unrestricted title in fee simple. Unless, therefore, there be found some legislative direction to regard the land for some special purpose in a fictional light, it must be taken to be what it actually is in fact and in law.”

56 In my opinion, s56(1) of the Lands Acquisition Act adopts precisely such a “fictional light”.

57 In Royal Sydney Golf Club, the Court concluded at 624-625 that the zoning was:

“… a restriction which arises from the law affecting an area in which the land lies, and not something altering the hypothesis upon which the Federal statute requires the land to be assessed.”

58 The clear implication is that if the statutory hypothesis had been ‘altered’ then the Act containing the hypothesis would have been given effect absent, presumably, any direct contradiction.

59 In my opinion, in the present case, the application of a discount by reason of the restraint on alienation of community land, applicable only to the particular owner, does ‘alter the hypothesis’ on which s56 “requires the land to be assessed”. That restraint is not an element that can be taken into account in determining “market value” as defined in s56(1).

The Appropriate Order

60 Lloyd J determined the market value of the land acquired by the RTA from the Council by discounting what he identified as the “initial figure of $1,175 per square metre” by 80 percent, to reach a figure of $235 per square metre ([at 3]).

61 His Honour had introduced his discussion of the Corrie v MacDermott principle, and the authorities in this Court, in the following way:

“[22] … this leads to the question of whether I should have regard to the restrictions which applied to the acquired land by reason of its zoning as open space and its classification as community land under the Local Government Act and whether such restrictions should be taken into account in assessing the market value.”

62 Having decided that the “restrictions” should be taken into account, his Honour said:

“[47] Having accepted that the acquired land is subject to the restrictions of the kind described above … and thus offers less potential uses than other land not so restricted, I now turn to the question of the extent to which the restriction affects its market value.”

63 His Honour was referring to the restriction on sale of community land under the Local Government Act However, the use of the plural “restrictions”, and the balance of the passage in par [47], with its reference to “thus offers less potential uses than other land not so restricted”, suggests that his Honour was also referring to the open space zoning.

64 If it were clear that, when his Honour came to apply the discount of 80 percent, he attributed the whole of that amount to the restrictions applicable to community land, then it would be appropriate for this Court to simply place his Honour’s initial figure of $1,175 per square metre into the calculation and recompute the amount of compensation payable. However, it is not clear to me that that is what has happened and, accordingly, the most appropriate order for this Court to make is to remit the matter.

65 The reason for my uncertainty in this regard arises because of the way in which his Honour made his computation of the adjustment required to the comparable sales by reference to two factors. The first was the fact that a number of the properties acquired by the Council for the purposes of conversion to open space had existing use rights, the value of which would need to be deducted from the amount paid for that land in order to produce a figure for the acquired land, which had no such rights. The second matter was the fact that a number of the comparable sales required expenditure by way of remediation, for which an amount would need to be added to the amount paid for the comparable sales in order to produce a figure which was comparable to the acquired land, which required no such expenditure.

66 The proceedings before Lloyd J proceeded on the basis that market value had to be determined on the basis that the land was open space. There is a market for such land from councils, schools, colleges, sporting organisations and property developers who are required to satisfy open space requirements for major developments.

67 Accordingly, when his Honour referred to the need to make an adjustment for a “restriction” applying to the acquired land, which he described as “by reason of its zoning as open space”, it was not the zoning per se to which his Honour was referring. It appears clear, and no submission to the contrary was made, that the only “restriction” that would answer that description was the fact that the comparable sales needed to be adjusted by reason of the existing use rights that attached to a number of them.

68 Indeed, as his Honour put it in the paragraph immediately after he had come to the conclusion that the comparable sales suggested a value of $1,175 per square metre for the acquired land:

“[21] It must be remembered, however, that although the sites to which I have had regard were acquired for open space purposes they all enjoyed existing use rights. That is, the purchaser could have continued to use the land for its existing use rather than as open space, or, alternately, could have made an application to change the existing use to some other use. That is not the case with the acquired land, which at the date of its acquisition was used as open space and which could not readily be put to any other use.”

69 The structure of his Honour’s reasons strongly suggest that his Honour had not taken this factor into account before arriving at the figure of $1,175 per square metre. That would explain his subsequent reference of taking into account two kinds of “restrictions” before determining the quantum of the discount.

70 The Appellant submitted that if his Honour had taken into account any “restriction” arising from an open space zoning, for purposes of the second calculation, that was a palpable error amounting to double counting. The basis of this submission was the fact that his Honour discounted the comparable sales when considering each particular sale.

71 The structure of his Honour’s reasons in dealing with the comparable sales was to identify the rate per square metre of the sale and then make adjustments for each particular sale. It is noticeable that in no case does his Honour state that he is making an adjustment by reason of existing use rights. It is also noticeable that in each case, where it is relevant, he does purport to make an adjustment for decontamination. So, in the case of the comparable sale which his Honour regarded as the most closely analogous to the present case, where the Leichhardt Council had in fact acquired an old industrial building which adjoined a park within the municipality for the purpose of converting it to open space, his Honour said:

“[16] … the underlying value is $1,728 per square metre. Again, this figure would include an element for existing use entitlements. This land is also contaminated. Of all the sales, however, this is in my view, a location which is the most comparable to that of the acquired land. Having regard to the need for decontamination it is, in my opinion, indicative of a value for the acquired land of about $1,550 per square metre.”

72 As expressed, his Honour purported to make an adjustment only for the “decontamination” and not for the existing use rights. If that is correct then the adjustment appears to be made in the wrong direction. That is to say, by reason of the need to decontaminate the comparable sale, the indicative value for the acquired land should have been higher than the “underlying value” of the comparable sale. In fact, his Honour made a downward adjustment. It was on this basis that the Appellant submitted that his Honour must have in fact made a net adjustment for the existing use of entitlements. Nevertheless, as the Respondent submitted, that inference is contrary to the structure of his Honour’s judgment.

73 As it is by no means clear to me what has happened in the present case, I do not feel confident in adopting his Honour’s figure of $1,175 per square metre as the market value of the acquired land. Accordingly, it is necessary for this Court to remit the matter for further computation.

The Notice of Contention

74 The Respondent contends that if his Honour erred in making a reduction in his computation of market value, by reason of the restriction under the Local Government Act 1993, nevertheless, his Honour’s finding that the market value of the land acquired should be reduced by 80 percent can be upheld on the basis of the evidence before him that such a discount was a result of the restrictive zoning of the land. This contention is based on the proposition that the only evidence before his Honour as to what might be an appropriate discount suggested a figure in excess of 80 percent, which his Honour had rounded down to 80 percent.

75 The first thing to say about this proposition, raised by way of Notice of Contention, is that this was not the only evidence on the appropriate discount before his Honour. Evidence called by the valuer for the Council was that, in the circumstances of this case, the appropriate discount was nil. His Honour completely set aside this evidence because he regarded it as “contrary to principle” ([48]). The principle to which his Honour referred was the application of the reasoning in Corrie v MacDermott. As noted above his Honour was wrong to act on the basis that the evidence of the valuer for the Council was contrary to principle in this respect.

76 The evidence which his Honour adopted for purposes of the computation of the “discount” was advanced by the valuer for the Respondent and concerns some land at Port Stephens. His Honour’s reasoning in this respect was as follows:

“[49] … [The RTA’s valuer] sought to quantify a discount from actual sales evidence, comparing the sale of land having development potential with sales of nearby land without development potential. Since no such sale evidence exists in Leichhardt, Mr Dempsey examined the sales of land in North Arm Cove, Port Stephens.
[50] In North Arm Cove there is subdivided village land zoned ‘Zone 1(a) Rural’ and ‘Zone 2 Village’ in close proximity. The lots in the ‘Zone 1(a) Rural’ cannot be used for residential purposes because the land must have an area of at least 40 hectares for the erection of a dwelling. There are no proposals in the foreseeable future for any changes to these planning controls. The subdivided village land in ‘Zone 2 Village’ can be used for residential purposes. The lots in both zones have similar amenity. The sales evidence shows the difference in value between the lots in the two zones is between 87 per cent and 90 per cent. In Mr Dempsey’s opinion, the discount to be applied should be at least 80 per cent and may be up to 90 per cent given that there is less likelihood of the restrictions in Leichhardt being changed.”

77 The passage in which his Honour applied this “comparable” was:

“[51] I find that the likelihood of the restrictions being lifted in the present case was at least as unlikely as, and probably more unlikely than, the land described by Mr Dempsey at North Arm Cove.
[52] The only evidence of a direct comparison between the value of land which is subject to restrictions and land which is not is contained in the evidence of Mr Dempsey that I have described. It thus seems that the appropriate discount in the present case, based upon the evidence of the sales comparisons at North Arm Cove and the extremely remote possibility of the restriction being lifted in the present case, is in the order of 87 to 90 per cent. No contrary sales evidence has been adduced by Mr Dundas. Bearing in mind that in compensation cases doubts are resolved in favour of a more liberal estimate of value ( Commissioner of Succession Duties (SA) v Executor Trustee and Ageing Co of South Australia Ltd (1947) 74 CLR 358 at 373-374), and having regard to the sale evidence described by Mr Dempsey, I am thus prepared to adopt a discount of 80 per cent.”

78 The only factor that could have made the restrictions on the Port Stephens land remotely comparable with anything which his Honour had to decide was the restriction on alienability. This is what his Honour primarily, perhaps exclusively, had in mind. The other restriction to which his Honour referred, namely, the existing use rights by which the comparable sales needed to be adjusted, was comparatively minor. Once the element of restriction on alienability is removed as a pertinent “restriction”, the Port Stephens land becomes irrelevant for the purposes of computing any matter before the Court.

79 Mr Walker submitted that, nevertheless, the Port Stephens land was the only evidence of quantum with respect to a discount for the matter that his Honour took into account, namely the “zoning restriction”. Accordingly, as this Court is limited to considering questions of law, the Court cannot look behind the computation.

80 As I have indicated above, it is not entirely clear whether his Honour discounted the comparable sales by reason of the existing use entitlements before computing his $1,175 per square metre figure or whether he took it into account together with the restriction on alienability in calculating the appropriate level of discount. Nevertheless, the proposition raised by way of Notice of Contention should be rejected for either of two reasons.

81 First, as noted above, the relevant restriction in the Port Stephens case concerned the difference between two zones, in one of which development for residential purposes was permissible and in the other of which no such use was permissible. This simply bears no relationship of even the most tangential kind to the matter to which his Honour referred as a “zoning restriction” in the present case, i.e. an adjustment required to the comparable sale by reason of their existing use entitlements.

82 It may be the case that, in accordance with the line of authority in this Court stemming from Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139, a perverse finding of fact does not raise a question of law. Nevertheless, Azzopardi is not authority for the proposition that in an appeal limited to questions of law, this Court must dismiss an appeal, in which a question of law has been raised, on the basis of facts which are palpably perverse. Nor should such a precedent be created.

83 The second reason for rejecting the proposition is that, even if it be the case, which in my opinion it is not, that the only evidence from which a discount could be computed was the Port Stephens sale, this is not a jurisdiction in which a judicial valuer is obliged to act only on the basis of evidence adduced by expert valuers who appear as witnesses. A judge of the Land and Environment Court is perfectly entitled to reject the whole of the expert evidence and, drawing on the experience of the Court, to do as best s/he can to identify an appropriate level of discount or, relevantly, an appropriate quantum of adjustment to the comparable sales figure by reason of the existing use rights of some of those sales. The relevant exercise of judgment was never confined in the manner for which the Respondent contends.

Conclusion

84 I propose the following orders:

1 Appeal allowed in part.

2 Set aside the judgment of the Land and Environment Court delivered on 4 March 2005 to the extent that it assesses market value pursuant to s55(a) of the acquired land.
3 Remit the matter to the Land and Environment Court for redetermination of the market value of the land without reduction on account of the statutory constraint on alienation of the land in the hands of the Appellant.
4 Respondent to pay the Appellant’s costs of the appeal.

85 BEAZLEY JA: I agree with Spigelman CJ.

86 BRYSON JA: I agree with the orders which Spigelman CJ proposes and the reasons which his Honour has given.

87 On the assumption that the words of s.55 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (hereinafter “Land Acquisition Act”) mean what they say – see Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 304 (Gibbs CJ) – there is no room for an assessment of compensation on resumption to be reduced on the principle in Corrie v MacDermott [1914] AC 1056. In this s.55 gives effect to the guarantee that the amount of compensation will not be less than the market value of land unaffected by the proposal, which is one of the objects stated in s.3 of the Land Acquisition Act. The application of the principle in Corrie v MacDermott could produce an assessment of compensation lower than the market value of the land because some restriction means that the owner of the resumed land did not, before it was resumed, have power to sell or dispose of it; such as the restriction in s.45(1) of the Local Government Act 1993 (NSW) for community land. The concept of “market value” the meaning of which is stated in s.56(1) of the Land Acquisition Act could not be addressed on the basis that the restriction in s.45(1) of the Local Government Act had any relevance; s.56(1) can only be applied if it is assumed that the land could be sold, so it must be assumed that the restriction on the power of sale in s.45(1) did not exist.

88 The words of the Land Acquisition Act make it unambiguously clear that the principle in Corrie v MacDermott has no application. There are powerful considerations which support giving the Land Acquisition Act that construction if it were thought that there is any room for doubt about this.

89 One consideration is that it would be very poor policy if a restriction on the power to sell land imposed for the purpose of keeping the land available to use in a particular way worked to the advantage of a resuming authority which compulsorily acquired the land so as to make it available for use in some other way, as usually happens when land is resumed. It would serve no good purpose and there would be no rhyme or reason in the restriction on the power of sale working for the benefit of the resuming authority at the point where the restriction is overridden and the object of keeping the land available for some particular use is defeated. The purpose of the restriction in s.45(1) on the power of sale of community land certainly did not include making it cheaper for resuming authorities to acquire community land than other land, and did not include offering them temptations to resume community land rather than other land. There could be no good policy in leaving a Local Government authority whose community land had been resumed with less money than the market value of that land with which to address the acquisition of other land for the same purpose.

90 Another consideration is that the principle in Corrie v MacDermott is far from being a clear principle; the principle would always be difficult to apply because it has not been clearly formulated, but whatever it is, it is not a means of establishing market value. This leads me to make some observations about Corrie v MacDermott.

91 Lord Dunedin in Corrie v MacDermott said for the Privy Council at p1062 “If this case be viewed as an ordinary case of compensation their Lordships think that the law is not doubtful.” After referring to authority his Lordship went on: “The value which has to be assessed is the value to the old owner who parts with his property, not the value to the new owner who takes it over. If, therefore, the old owner holds the property subject to restrictions, it is a necessary point of inquiry how far these restrictions affect the value.” Later (at p1065) Lord Dunedin spoke of “… the value to the owner as he holds.” The concept of “value to the old owner” which his Lordship expounded is not found in the Land Acquisition Act, which adopts the quite different test of market value, with an underlying guarantee, and prescribes in s.55 the other matters which are to be regarded.

92 Corrie v McDermott was not a case in which the owners of the resumed land did not have power to sell; they had statutory power to sell, but only to two persons, the local authority and the National Agricultural and Industrial Association: see p1057. The land was not resumed under statutory power, but under a clause in a Crown grant, which provided for payment of “the value of the land … at a valuation to be fixed by arbitration”: see p1057. No statutory regime governed the assessment of compensation. Decision turned on the meaning of the Crown grant, and the case could not be a good vehicle for establishing a general principle about compensation on resumption of land in exercise of statutory powers.

93 The course taken by the litigation in Corrie v MacDermott meant that the issue determined on appeal was whether the owners were entitled to 7,490 pounds “on the basis of freehold land unrestricted in any way, and as land in fee simple”: see p1057. The alternative determined by the umpire in the arbitration, that the value of the land “being required for a public purpose (namely an exhibition ground)” was 3,835 pounds, was not open to consideration on appeal. This result flowed from the terms in which the umpire stated the case for the opinion of the Court. The issue was whether the owners were entitled to the greater sum, and the Crown did not dispute that if they were not so entitled, they were entitled to the lesser sum, without any judicial examination of the basis on which it was determined; see pp1057-1058. Accordingly the three courts which considered the matter did not pass judgment on whether the owners were entitled to the reduced amount, or on the basis on which the reduced amount was determined. Lord Dunedin observed that the finding which established the sum of 3,835 pounds was “… based upon an obviously irrelevant consideration”: see p1066; but nonetheless accepted the limitations on what was to be done on appeal which arose from the form of the stated case and the positions taken by the parties.

94 In these circumstances what Lord Dunedin said about the effect of a restriction which prevented sale was not essential for the Lordships’ disposition. His Lordship said (pp1064-1065):

And now it may be remarked that a restriction which prevents selling, though it must be taken into account, and may very well affect the value, does in no way reduce the value to nil. To a judge on the facts in Stebbing's Case L.R. 6 Q. B. 37 it might indeed well appear that the value was nil. For the land could not be sold, for it was dedicated to spiritual purposes; and further its use so far as profitable, as, e.g., in the matter of fees, was also exhausted, for the ground was full and no further interments were possible because of the Order in Council. But other circumstances would lead to a perfectly different result, and as an illustration their Lordships would refer to a case which, though not at law, was decided by a judge of authority, the late Lord Shand. A strip of land in the West Princes Street Gardens below the Castle Rock in Edinburgh was taken by the North British Railway under an Act of Parliament under terms of paying compensation to the corporation of Edinburgh, who were the owners of the ground. By Act of Parliament the corporation was prohibited from ever building on the land, or alienating it; but was bound to keep it for all time as a public garden.
Under the circumstances the railway company contended before Lord Shand, who was chosen as sole arbitrator, that the land was worth nothing, and that a mere nominal sum should be paid. The corporation on the other hand maintained that the true compensation was what would provide another strip of exactly the same quality; and as this could only be got by taking Princes Street itself, that the money value must be estimated at what it would cost to buy a strip of Princes Street--the most valuable site in Edinburgh. Lord Shand held both these views to be wrong. He held that, the corporation being restricted, the value could not be measured by the value of unrestricted land in a similar position; but that on the other hand the land was of value to the corporation who enjoyed it with the rest of the adjoining land, for the use of the citizens as a garden, which garden would be so much the less valuable because it was smaller; and he assessed on that view. Their Lordships consider that this judgment proceeded on correct principles.

95 It is consistent with these observations that the restriction may very well not affect value; and it is also consistent with these observations that the value of the land to the Edinburgh Corporation, who enjoyed it with the rest of the adjoining land for the use of the citizens as a garden, might conceivably be as much as or more than the value which the land would have had if there had been no restriction on its sale. Lord Dunedin’s view was that the value to be assessed was “… the value to the owner as he holds …” (p1065) (and this is not the test in s.55). In accordance with this exposition it could be that the value of land set aside and used for some public purpose such as a public park, considered as the value to the owner as it held the land, was at least as much as, or much the same as the value which the land would have if it were available for sale and could be sold off; the process of setting the land aside for a public purpose and restricting its saleability can fairly be interpreted as an indication that, in the view of the public and the public authority, setting the land aside and having it available for the public purpose is worth at least as much as or more than the proceeds of selling it off.

96 The Privy Council’s approval of the judgment of Lord Shand in the Princes Street Gardens Arbitration can add little to an understanding of what the relevant principle is. Lord Shand’s decision is printed as an appendix to Cripps on Compensation 8th ed. 1938 at pp916-934. His Lordship made a very detailed review of the facts before him, and acknowledged the difficulties of finding clear means of putting a value in money on the land which the railway company had resumed. It is not possible to understand how Lord Shand’s reasoning produced the amount of money awarded by reference to any calculations; it does appear that his Lordship in some way made an allowance for the restriction on sale, and also an allowance for advantages to the public represented by the Edinburgh Corporation having a public garden; but he gave no detailed exposition of how this process was carried out.

97 In my opinion the New South Wales legislature has not sacrificed any important principle by making provisions in s.55 of the Land Acquisition Act which do not leave room for Corrie v MacDermott to apply.

98 BASTEN JA: I agree with the orders proposed by the Chief Justice and with his Honour’s reasons.

99 CAMPBELL J: I agree with the Chief Justice.

100 The fundamental task of the court in the present appeal is to construe the text of sections 54, 55 and 56 of the Land Acquisition Act in the light of its history, statutory context and purpose, as the Chief Justice has done. However, a supplementary aid to construction –admittedly a weak one, that is able to be used only as a check that a construction arrived at by other means is correct – is that one assumes that Parliament is not doing something irrational in enacting the legislation in question (eg Ganter v Whalland (2001) 54 NSWLR 122 at 131 [35]-[36] and cases there cited). That assumption operates in conjunction with the “general presumption that there is no contradiction between two Acts of the one legislature”: para [45] of the Chief Justice’s judgment, and cases there cited.

101 Section 94 Environmental Planning and Assessment Act 1979 provides:

“(1) If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant the development consent subject to a condition requiring:
(a) the dedication of land free of cost, or
(b) the payment of a monetary contribution,
or both.
(2) A condition referred to in subsection (1) may be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services concerned.
(3) If:
(a) a consent authority has, at any time, whether before or after the date of commencement of this Part, provided public amenities or public services within the area in preparation for or to facilitate the carrying out of development in the area, and
(b) development for which development consent is sought will, if carried out, benefit from the provision of those public amenities or public services,
the consent authority may grant the development consent subject to a condition requiring the payment of a monetary contribution towards recoupment of the cost of providing the public amenities or public services (being the cost as indexed in accordance with the regulations).
(4) A condition referred to in subsection (3) may be imposed only to require a reasonable contribution towards recoupment of the cost concerned.
(5) The consent authority may accept:
(a) the dedication of land in part or full satisfaction of a condition imposed in accordance with subsection (3), or
(b) the provision of a material public benefit (other than the dedication of land or the payment of a monetary contribution) in part or full satisfaction of a condition imposed in accordance with subsection (1) or (3).
(6) If a consent authority proposes to impose a condition in accordance with subsection (1) or (3) in respect of development, the consent authority must take into consideration any land, money or other material public benefit that the applicant has elsewhere dedicated or provided free of cost within the area (or any adjoining area) or previously paid to the consent authority, other than:
(a) a benefit provided as a condition of the grant of development consent under this Act, or
(b) a benefit excluded from consideration under section 93F (6).
(7) If:
(a) a condition imposed under subsection (1) or (3) in relation to development has been complied with, and
(b) a public authority would, but for this subsection, be entitled under any other Act to require, in relation to or in connection with that development, a dedication of land or payment of money in respect of the provision of public amenities or public services or both,
then, despite that other Act, compliance with the condition referred to in paragraph (a) is taken to have satisfied the requirement referred to in paragraph (b) to the extent of the value (determined, if the regulations so provide, in accordance with the regulations) of the land dedicated or the amount of money paid in compliance with the condition.”

102 One fairly obvious effect of section 94 is that local councils can allow a development on a particular site which, if the site is considered on its own, is an overdevelopment of the site, on the basis that the developer will make a section 94 contribution to the Council of land that will itself be used as open space, of money to enable the Council to purchase elsewhere land that will be used as open space, or of money to defray the cost of land that the Council has already purchased for use as open space. There is a fairly obvious capacity for this to happen in relation to several, perhaps numerous, different development sites within the one municipality. I doubt that Parliament would have intended sections 54, 55 and 56 of the Land Acquisition Act to work in a way that undermines the basis on which such section 94 contributions have been extracted, by not providing the local council, when open space is resumed, with enough money to buy other land, similarly zoned, for use as open space. This consideration provides some additional comfort that the construction arrived at by the Chief Justice is correct.

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