McKay v Commissioner of Main Roads [No 8] - [2014] WASC 326

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: McKAY -v- COMMISSIONER OF MAIN ROADS [No 8] [2014] WASC 326

CORAM: BEECH J

HEARD: 9 SEPTEMBER 2014

DELIVERED : 17 SEPTEMBER 2014

FILE NO/S: CIV 1558 of 2007

BETWEEN: RODERICK DOUGLAS McKAY
KATHLEEN GLENYS McKAY
Plaintiffs
AND
COMMISSIONER OF MAIN ROADS
First Defendant
WESTERN AUSTRALIAN PLANNING COMMISSION
Second Defendant

Catchwords:

Retrial - Action remitted by appellate court for retrial on limited issues - Scope of evidence admissible on retrial - Turns on own facts

Legislation:

Nil

Result:

Scope of evidence admissible on retrial determined
Rulings on admissibility of evidence made

Category: B

Representation:

Counsel:

Plaintiffs:     Mr P M McGowan
First Defendant             :     Mr K M Pettit SC
Second Defendant         :     Mr K M Pettit SC

Solicitors:

Plaintiffs:     Cornerstone Legal
First Defendant             :     State Solicitor for Western Australia
Second Defendant         :     State Solicitor for Western Australia

Case(s) referred to in judgment(s):

McKay v Commissioner of Main Roads [2013] WASCA 135
McKay v Commissioner of Main Roads [No 7] [2011] WASC 223
BEECH J:

Introduction

In McKay v Commissioner of Main Roads [No 7][1] I published reasons for decision awarding compensation in the sum of $15,427,500 plus interest for the taking of the subject land.
[1] McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 (Trial Reasons). In these reasons, I will use abbreviations used in the Trial Reasons.
In McKay v Commissioner of Main Roads,[2] the Court of Appeal upheld an appeal against my decision, and ordered that the action be remitted to me for a new trial in accordance with the Court of Appeal's reasons, in particular [367] and [368] of the court's reasons.
[2] McKay v Commissioner of Main Roads [2013] WASCA 135 (Appeal Reasons).
In the course of preparation for the retrial, it has emerged that the parties have differing views on the scope of the retrial and, consequently, on the admissibility of additional evidence and as to what forms of reasoning by valuers is permissible. Those differences of view came to the attention of the court. By consent, it was ordered that orders for the exchange of further evidence be vacated, and that the parties file and serve written submissions on the scope of the retrial ordered by the Court of Appeal and whether, in the light of the scope of the retrial, certain additional evidence proposed by one or other party was admissible.
The progress of this action since a retrial was ordered has been significantly slowed by mediation and by the commitment of both sets of solicitors to another substantial valuation trial for large parts of this year.
The questions raised by this application involve the proper construction of the orders and reasons of the Court of Appeal. It is, I think, useful to commence by outlining some aspects of the trial, and my reasons after the trial.

The Trial Reasons

The plaintiffs' case at trial was that the subject land (lots 191 and 192) would have been zoned urban by the date of taking. That case was put in a series of alternative ways. Each alternative involved detailed attention to the town and regional planning regimes, broader planning environment, other rezoning applications and other circumstances applying during several different periods between 1990 and 2006. A further alternative was that the subject land would have been zoned rural, with urban potential.
By any measure, the trial was a long one. It occupied 17 sitting weeks, spread over more than 12 months from October 2009 to December 2010. As Murphy JA observed in the Appeal Reasons:
The case involved an enormous amount of documentary evidence and numerous witnesses. It appears that each point that might conceivably have been taken was taken. No stone was left unturned.[3]
[3] Appeal Reasons [358].
The parties advanced valuation evidence on a series of alternative bases. One valuation base was that the land was, at the time of taking, zoned rural, with urban potential. The findings that I made in sections 4 ‑ 8 of the Trial Reasons meant that the land was to be valued on the basis that:
(a)it was zoned rural at the taking date;
(b)its highest and best use reflected its potential future use for urban development; and
(c)the hypothetical parties would have thought that:
(i)there was a reasonable prospect that the result of the Planning Review would support short‑term urban rezoning of the subject land;
(ii)there was, however, considerable uncertainty about that prospect, and the odds did not favour that outcome; and
(iii)if the subject land was identified in the Planning Review for immediate urban rezoning, it would take about five to six years from the date of taking to achieve the rezoning to urban.
Consequently, attention was directed to the valuers' urban potential valuations.
In section 9.2 of the Trial Reasons, I set out an overview of the expert valuation evidence. In the course of that overview, I identified all of the sales that any valuer suggested was a useful comparable sale for the purposes of valuing the subject land. The most important valuation issue was whether there were any comparable sales that assisted in assessing the value of the subject land, and, if so, which sales.[4]
[4] Trial Reasons [2331].
The following is a broad summary of the views of the valuers about comparable sales.[5] Mr Wilson said there were no comparable sales. Ms Le‑Fevre relied on the Gold Fortune sale, a number of sales in Baldivis, and a sale in Wellard. Mr Brown did not rely on the sale in Wellard, but otherwise relied on the sales relied on by Ms Le‑Fevre, as well as the Clough/Rapley sale and other sales in Baldivis. Mr Zucal relied on lot 23 Pinjarra Road, a number of sales south of Austin Cove, and some other sales.
[5] Trial Reasons [2331].
In the course of sections 9.4 to 9.8, I considered all of the sales that had been proposed by any valuer as a useful comparable sale. In the course of doing so, I considered the evidence about the property the subject of each potential comparable sale, and other relevant matters, in assessing whether and to what extent that sale might be a useful comparable sale.
I found that only three transactions were of real assistance: the Clough/Rapley transaction, the Gold Fortune transaction, and the sale of lot 23. Lot 23 was the only transaction which was a comparable sale. The Clough/Rapley transaction provided an indication of a floor value, and the Gold Fortune transaction provided an indication of a ceiling value.
In the course of analysing each of those transactions, I made adjustments from the per hectare price in the relevant transaction in order to see what it indicated about the subject land. As will be seen, in the course of making those adjustments, I made the errors found by the Court of Appeal.
I outlined my conclusions as follows in section 9.9 of the Trial Reasons:
2651In the end, in my view, there is very limited sales data that provides a sound foundation for valuing the land. For the reasons given in section 9.6, I do not think the Baldivis sales are of assistance. There are two transactions relating to land in the vicinity of the subject land that was sold as rural with urban potential: Clough/Rapley and Gold Fortune. However, neither is a conventional unconditional sale and, on my analysis, neither directly indicates the value of the subject land. Rather, one indicates a floor value for the subject land and the other a ceiling value.
2652On my analysis, the Clough/Rapley contract can be used in two ways. First, it can be taken as an indication of a floor price for lot 301 as rural land with urban potential. That floor price of $194,000 per hectare in November 2005 is escalated to $255,000 per hectare at the date of taking. I consider lot 301 to be substantially more valuable per hectare than the subject land. I would adjust the floor price for the subject land derived from the sale of lot 301 to a figure in the range of $145,000 to $175,000 per hectare (after discounting for the increase in value attributable to the Highway). See section 9.4.10. There is nothing in the other comparable sales that would cause me to review the extent of that adjustment.
2653Secondly, the Clough/Rapley contract can be taken as an indication of the urban value of lots 300 and 301. On that analysis, a per hectare rate of about $300,000 is shown for those lots. After escalating for the increase in land values to July 2006, discounting for the effect on value of the Highway, and then adjusting for the lesser value of the subject land, this indicates an urban value for the subject land of a little under $300,000 per hectare. Given my view of the uncertain urban potential of the subject land, that indicates that the value of the subject land is something very substantially less than $300,000 per hectare.
2654The other transaction in the locality involving rural land with urban potential relates to the Gold Fortune land. For the reasons I have explained in section 9.5:
(a)after discounting for the effect on value of the Highway proposal, I think the first exercise price of the Gold Fortune option indicates a ceiling price for the subject land of something in the range of $210,000 to $230,000 per hectare; and
(b)I do not consider that the exercise price in August 2007 can be used to derive a higher per hectare value for the subject land in July 2006.
2655The other sale of some utility is the sale of lot 23 Pinjarra Road. It sold in March 2006 for about $139,000 per hectare. Notwithstanding that it is a sale of only about 11 ha, for the reasons explained in section 9.8.1, I think it indicates a per hectare value of the subject land in July 2006 that is a little higher than the value of lot 23, in the range of $140,000 to $180,000.
2656In my view, there are only three sales of real assistance. Each assists in a different way. One indicates a floor, one a ceiling, and only one provides a direct indication of the value of the subject land. Due to uncertainty in the adjustment process, I have assessed each as indicating a range. Thus, I have derived a floor range, a direct value range and a ceiling range. The floor range ($145,000 to $175,000 per hectare) is derived from Clough/Rapley and overlaps to a substantial degree with the direct value range from lot 23 ($140,000 to $180,000 per hectare).
…
2667Thus, leaving aside the HSA methodology, the effect of the comparable sales can be summarised as follows:
(a)the Clough/Rapley sale of lot 301 indicates a floor value in the range $145,000 to $175,000 per hectare, adopting $160,000 per hectare as the midpoint;
(b)the Gold Fortune option indicates a ceiling value in the range $210,000 to $230,000 per hectare, adopting $220,000 per hectare;
(c)the sale of lot 23 indicates a value in the range of $140,000 to $180,000 per hectare, adopting $160,000 per hectare;
(d)these values are consistent with other broader indications in the sales evidence; and
(e)these sales support or suggest a value of the subject land of $160,000 per hectare.[6]
[6] [2651] ‑ [2656], [2667].
My final conclusion on value was as follows:
I have set out my conclusions earlier in this section 9, particularly in sections 9.9, 9.10 and 9.12. For convenience, I summarise my conclusions on the value of the subject land as follows.
(1)There is limited sales data providing a sound foundation for valuing the land. For the reasons given in section 9.6, the Baldivis sales do not assist.
(2)The Clough/Rapley transaction indicates a floor price for lot 301 as rural land with urban potential. When that price is escalated to take account of the rising market, discounted for the effect on value of the Highway, and adjusted to take account of the superior value of lot 301, it indicates a floor value for the subject land in the range of $145,000 to $175,000 per hectare.
(3)The Clough/Rapley contract can also be taken as an indication of the urban value of lots 300 and 301. After escalating for the increase in land values to July 2006, discounting the effect on value of the Highway and adjusting for the lesser value of the subject land, that indicates an urban value for the subject land of a little under $300,000 per hectare. That is an indication that the value of the subject land, with its uncertain urban potential, is something very substantially less than $300,000 per hectare.
(4)The first exercise price of the Gold Fortune option indicates a ceiling price for the subject land in the range of $210,000 to $230,000 per hectare.
(5)The sale of lot 23 is an indication of a per hectare value of the subject land in the range of $140,000 to $180,000.
(6)These ranges are consistent with other broad indications in the sales evidence.
(7)In the circumstances of this case, the HSA method is not reliable. The long periods from the taking date to the commencement and completion of the notional subdivision mean that it is not a reliable indicator of the value of the land. Adoption of the midpoint of the ranges indicated by comparable sales is more reliable than using the HSA method to inform the selection from within those ranges.
(8)Adopting the midpoint of the ranges, the sales suggest a value of the subject land of $160,000 per hectare.
(9)Adopting that rate produces a total value of $14.025 million. I value the subject land in that sum.[7]
[7] Trial Reasons [2798].
I turn to the reasons of the Court of Appeal.

The reasons of the Court of Appeal

The Court of Appeal found two species of error in the Trial Reasons. The first lay in the use of a range in the context of a ceiling value or floor value. The second was a breach of procedural fairness in the adjustment process in relation to the value for the subject land to be deduced from the sale of lot 23, the Clough/Rapley transaction, and the Gold Fortune transaction.
As to the first, the Court of Appeal held that it was an error to find a 'ceiling value' range and a 'floor value' range for the subject land and to use those ranges in the ultimate determination of the value of the subject land.[8] The court also found that the way in which the evidence of floor value, derived from transactions which had been found not to be conventional comparable sales, was used was tantamount to providing direct evidence of value in the same way as the comparable sale of lot 23.[9] That was found to be an error in the application of the comparable sales methodology.
[8] Appeal Reasons [128].
[9] Appeal Reasons [131].
The second error was one of procedural fairness. The Court of Appeal found that I should not have proceeded to make adjustments in respect of the Clough/Rapley, Gold Fortune and lot 23 transactions without first giving the plaintiffs the opportunity to call further evidence and/or to make submissions on the adjustment process.[10] The circumstances that led to that conclusion were set out in [159] ‑ [162] of the Appeal Reasons. Later in these reasons I will analyse in more detail what the Court of Appeal said.
[10] Appeal Reasons [163].
The Court of Appeal's order was framed in terms that 'the retrial be in accordance with the court's reasons for judgment, in particular [367] and [368]'. Those paragraphs are in the following terms:
It seems to me that in all the circumstances of this case, justice would be served if the issue of valuation were remitted to the primary judge on the basis, broadly speaking, that all of his Honour's findings stand, up to and including the point where his Honour found, in effect, that:
(a)lot 23 is the only comparable sale;
(b)the Clough/Rapley transaction indicates that as at the taking date, but for the proposed highway:
(i)the value of the Clough/Rapley land zoned urban within three years was in the order of $375,000 per hectare;
(ii)lot 301 of the Clough/Rapley land had a floor price of approximately $240,000 per hectare;
(c)the Gold Fortune transaction indicates that as at the taking date, but for the proposed highway, the ceiling price for that land was $285,000 per hectare.
This would leave, in effect, the parties with the opportunity to call further evidence and make submissions on the adjustment process in relation to the value to be deduced from the sale of lot 23, the 'urban value' derived from the Clough/Rapley transaction, and the likely ceiling price and floor price of the subject land having regard to the conclusions identified in sub‑paragraphs (b) and (c) of the preceding paragraph. I would hear further submissions from the parties as to the precise form of the orders for retrial once they have had an opportunity to consider these reasons.

The parties' submissions

These paragraphs of the Appeal Reasons evidently contemplated that the parties would make further submissions to the Court of Appeal, and the court would refine the precise terms of the orders for retrial. That is consistent with the basis of the remittal to the trial judge being expressed in terms 'broadly speaking, …'. In the event, there was no refinement. The order is in terms that there be a retrial in accordance with the Appeal Reasons, in particular [367] and [368].
The parties have filed submissions reflecting markedly different understandings of the scope of the retrial.
The plaintiffs submit that:
(1)[367] of the Appeal Reasons remits the issue of valuation to the trial judge, on the basis that the findings referred to in that paragraph stand;
(2)[368] of the Appeal Reasons does not limit the scope of the issue remitted, as identified in [367] - it simply 'describes the opportunity, in effect, provided to the parties';[11]
(3)subject to the findings that stand, as identified in [367], the issues of valuation are at large, and the scope of evidence that may be led with respect to these issues is not limited;
(4)consequently, it is open to the plaintiffs to lead further non‑valuation evidence, including:
(a)evidence from the purchaser of lot 23, said to be relevant to 'the extent to which any urban potential of lot 23 had crystallised';[12]
(b)evidence from Mr Brett Flugge, the manager of strategic planning at the Shire of Murray as at the taking date, about the potential for urban development of lot 23 at the taking date;
(c)other evidence from Mr Brett Flugge about the presence of a chaff factory on property adjoining lot 23, and the implications that that had for the development potential of lot 23;
(d)minutes of a meeting of the Planning and Development Services Committee dated 18 July 2006 said to be relevant to the development potential and permissible lot sizes in development of lot 23.
[11] Plaintiffs' submissions [8].
[12] Plaintiffs' submissions [13].
The defendants submit that the scope of further evidence is limited to opinion evidence of valuers about the reasoning and quantification of the adjustment processes. No evidence is admissible from lay witnesses, planners or other experts and, in particular, no evidence is admissible relating to the facts and circumstances relevant to the extent of the comparability of each or any of lot 23, the Clough/Rapley land and the Gold Fortune land with the subject land.[13]
[13] Defendants' submissions [30].
For the reasons that follow, I do not accept the plaintiffs' submissions, and accept the submissions of the defendants about the scope of the retrial of the action.

Analysis

The reasons of the Court of Appeal must, of course, be read as a whole.
The reference in [367] of the Appeal Reasons to the trial findings 'up to and including the point where his Honour found, in effect, that …' is a reference to the logic of the reasoning employed in the Trial Reasons. It is not a reference to the order in which findings were set out in the Trial Reasons.

I will refer to sales said by any valuer to be a comparable sale as Comparable Sale Candidates.
An element of my determination of which the Comparable Sale Candidates were in fact of assistance as comparable sales was consideration of all the evidence relating to each piece of land said to be a Comparable Sale Candidate, and the evidence of the circumstances relating to each sale. In light of my conclusions on those matters, together with my findings about the subject land, the question of comparability was assessed. A determination of which sales were of assistance as comparable sales necessarily involved an assessment of the extent of the comparability. The questions are, or at least on my approach were, inextricably intertwined.
My analysis of the Clough/Rapley transaction may be considered in more detail, to illustrate the point I am making.
I dealt with the Clough/Rapley transaction in section 9.4 of the Trial Reasons (pages 570 to 589). I set out findings about the land,[14] the background to the sale,[15] the contract,[16] and variations to the contract.[17] I outlined the valuers' competing views of the transaction.[18] I then analysed the transaction to consider what, if anything, it indicated about the value of lots 300 and 301, the two lots comprising the Clough/Rapley land.[19] I considered the question of the extent to which a price or value reflected in the transaction in November 2005 needed to be escalated to the taking date in July 2006,[20] before discounting the effect on value of the highway and the RRF.[21]
[14] Trial Reasons [2375] ‑ [2379].
[15] Trial Reasons [2380] ‑ [2392].
[16] Trial Reasons [2393] ‑ [2400].
[17] Trial Reasons [2401] ‑ [2403].
[18] Trial Reasons [2404] ‑ [2433].
[19] Trial Reasons [2437] ‑ [2453].
[20] Trial Reasons [2454] ‑ [2464].
[21] Trial Reasons [2465] ‑ [2473].
Section 9.4.10 of the Trial Reasons dealt with the question of comparability: how does the value of the subject land compare to the Clough/Rapley land? Paragraphs 2474 to 2487 of the Trial Reasons were as follows:
2474The plaintiffs tendered substantial environmental evidence about the Clough/Rapley land, including from Dr Semeniuk (exhibit 225C, 3/161); Mr Butterly (exhibit 194E, 28/1170 - 1171); and reports of ENV Australia Pty Ltd (exhibit 106, 1/25, 32, 155, 166). The ENV reports analyse the percentage of the total area of lots 300 and 301 that is subject to environmental constraints. There is also engineering evidence about the comparative development costs (statement of Mr Bowyer, exhibit 110, 9/88). I do not think that detailed analysis of the kind in this evidence is of much assistance. The purchaser of the Clough/Rapley land did not obtain reports of this detail and so did not know as much about the environmental characteristics and constraints of the Clough/Rapley land as is revealed in the ENV reports. In any event, I do not think much turns on the question. The purchaser understood there were substantial environmental constraints for the Clough/Rapley land and took that into account in its decision.
2475The environmental constraints of the Clough/Rapley land limited its developable area. There are no similar constraints for the subject land. The subject land has better overall lot yields per hectare than the Clough/Rapley land.
2476Nevertheless, for the reasons that follow, in my view these considerations are substantially outweighed by other factors, so that the per hectare value of the subject land is substantially less than the Clough/Rapley land.
2477A number of the valuers said, in their respective reports, that lot 189 was worth more than the subject land, and that lot 301 was comparable to lot 189. In other words, the Clough/Rapley land was seen as more valuable than the subject land: see Mr Wilson (exhibit 271A, 47/140 [143]); and Ms Le‑Fevre (exhibit 270C, 39/1084 - 1085). Ms Le‑Fevre maintained this view in her oral evidence (ts 6646). In his reports, Mr Brown said that lot 189 was worth more than lots 191 and 192. However, Mr Brown appeared to avoid the question when it was put to him that he considered the per hectare rate for lot 189 was higher than for the subject land. His first response was to say that he had put lot 189 out of his mind (ts 6646). Then he said that he did not recall what figure he put on lot 189 (ts 6646). When I asked him whether he had thought that lot 189 was worth more per hectare than the subject land, he said, 'I think so but I'm not sure' (ts 6647).
2478For the reasons that follow, I find that the Clough/Rapley land was worth substantially more per hectare than the subject land. In summary, that is because the Clough/Rapley land had waterfront aspects, superior urban prospects, and was smaller in area.
2479First, the Clough/Rapley land had the benefit of significant exposure to water. Part of lot 301 abuts the Murray River. Parts of both lots abut Wilgie Creek. It is clear from Mr Tucker's evidence that these features were significant attractions in the mind of the buyer. I think the exposure to water significantly enhances likely demand for lots on the Clough/Rapley land. In my view, the connection to the river and Wilgie Creek significantly enhances the value of the Clough/Rapley land, compared to the subject land.
2480Next, on the findings I have made about the subject land's urban prospects, the Clough/Rapley land had significantly superior urban prospects than did the subject land. I have found that the parties to the Clough/Rapley transaction entered the transaction confidently expecting that the land would be rezoned to urban within three years. By contrast, on my findings, the hypothetical parties would view the urban potential of the subject land as uncertain. A number of matters explain that difference, including the following:
(a)the Clough/Rapley land was shown as 'future communities' in Network City. I have found that the subject land would not have been designated in that way in the assumed absence of the proposed public works;
(b)the Clough/Rapley land is in close proximity to and has a close relationship with other urban zoned land in the area, including on the other side of Wilgie Creek. Urbanisation of the Clough/Rapley land can be seen as a natural progression and a completion of an urban node. As explained in section 7, urbanisation of the subject land would not be viewed in the same way;
(c)the Clough/Rapley land and Gold Fortune land could be expected to be viewed as a separate precinct for new urbanisation (see exhibit 54, 2/1/144; exhibit 139; ts 4605 - 4606). By contrast, the subject land would be expected to be viewed by the WAPC as part of a much larger area north of Old Mandurah Road, thus raising greater potential issues and obstacles for urban rezoning; and
(d)by July 2006, the application to rezone the Clough/Rapley land had been underway for more than a year.
2481Finally, the Clough/Rapley land is smaller in area than the subject land. Particularly where one is analysing lot 301 alone, that consideration favours a lower rate per hectare for the subject land than for the Clough/Rapley land.
2482As I outlined in section 2.5, the adjustment to values derived from comparable sales may be 'nothing more than the best guess that can be made.' Judicial statements to that effect are made in the context of adjustments made by a valuer, thus based on the valuer's expertise and experience. In this case, no valuer has offered an opinion on the extent of the appropriate adjustment of the floor value of lot 301 to derive a floor value for the subject land. In my view, given the very limited sales data of any assistance and the limitations of the HSA method in this case (see section 9.10), I must make my own assessment of the appropriate adjustment.
2483There is an element of arbitrariness or guesswork in quantifying an appropriate level of adjustment. Nevertheless, in the end, in my view, I must do the best I can with the evidence I have, in light of the findings I have made.
2484If and to the extent that this were seen as the court acting as a 'third valuer', it seems to me to be unavoidable and not impermissible (see section 2.5). It is unavoidable because, if I decline to do it, I will be left with no basis to assess the value of the subject land. That is because, as I will explain in more detail in sections 9.9, 9.10 and 9.12, I do not accept the essential steps in the reasoning of any of the valuers in their urban potential valuations. In a nutshell, on my analysis in the remainder of this section 9:
(a)the only transactions of any real assistance are Clough/Rapley, Gold Fortune and lot 23; and
(b)because of the long time period in urbanising the subject land and selling the lots, the HSA method is not reliable.
2485I express my assessment of the floor price in terms of a range, not a single figure. That reflects the degree of uncertainty, in my assessment, of the quantification of the appropriate adjustment of the floor value of lot 301 to derive a floor value of the subject land.
2486Taking into account all of the matters I have referred to, and doing the best I can with the limited available evidence, I think the discounted, escalated urban potential floor value of lot 301 of $235,000 to $240,000 at the date of taking suggests a per hectare floor value of the subject land in the range of $145,000 to $175,000 per hectare. Each comparable sale is not to be viewed in isolation. I will revisit this assessment in light of what is revealed by all the comparable sales, and by the HSA.
2487Taking into account the first and third reasons stated for my view of Clough/Rapley's superiority (the second reason does not apply to an urban valuation), the discounted, escalated urban value of $370,000 to $375,000 per hectare for the Clough/Rapley land suggests a per hectare urban value of something a little under $300,000 for the subject land. In light of my view of the timing and uncertainty of the urban potential of the subject land, this is an indication that the urban potential value of the subject land is something very significantly less than $300,000 per hectare.
On the logic of the plaintiffs' submissions, all of the matters considered in section 9.4.10 are reopened by the retrial, and it is open to the plaintiffs to lead further evidence about any of them. For example, notwithstanding the very substantial environmental evidence and engineering evidence that is referred to and considered in [2474], on the logic of the plaintiffs' submissions, it is open to the plaintiffs to lead more evidence about the Clough/Rapley land, and its physical, environmental and planning characteristics. I see nothing in the reasons of the Court of Appeal to suggest that those matters are to be reopened.
In oral submissions, the plaintiffs submit that it is only in respect of lot 23, and not the Clough/Rapley or Gold Fortune land, that further factual evidence relating to the land and its sale can be led.[22] In my view, nothing in the Appeal Reasons suggests any wider class of evidence for lot 23 than for the Clough/Rapley or Gold Fortune land was required by procedural fairness to be permitted, or is permitted on the retrial.
[22] ts 48, 50, 51.
In my view, the effect of the Appeal Reasons is that my reasoning up to and including [2481] stands, but it is open to the parties to lead evidence and make submissions about my reasoning in [2482] ‑ [2487]. Those paragraphs relate to the questions of:
(a)the use of a floor value derived from the Clough/Rapley transaction to assist in deriving a value for the subject land; and
(b)the question of the quantification of the adjustments that should be made in relation to the findings made in [2475] ‑ [2481].
I think those two questions are what Murphy JA referred to as 'the process and quantification of adjustment in relation to the comparable sale exercise'.[23]
[23] Appeal Reasons [360].
Paragraph 368 of the Appeal Reasons provides, in effect, that on the retrial, the parties are to have, 'the opportunity to call further evidence and make submissions on the adjustment process …'. In my view, the reference to the adjustment process is a reference to evidence of valuers as to the appropriate quantification of the adjustment(s) to be made in deriving a value from lot 23, and, if and to the extent thought by the valuer appropriate, in deriving a floor or ceiling value from the Clough/Rapley or Gold Fortune transactions respectively. Contrary to the plaintiffs' submissions, it is not a reference to admission of additional evidence of facts and circumstances or non‑valuation expert evidence relating to the sale of lot 23, or the Clough/Rapley or Gold Fortune transactions, or those pieces of land. The subject matter of the opportunity to call further evidence is the adjustment process referred to in [368]. That is the natural reading of the language of the paragraph; the further evidence and the further submissions relate to the same subject matter.
So, in my view, the further evidence and further submissions relate to the quantification of the adjustments to be made in reasoning from one of these three sales to the subject land. The further evidence and submissions do not extend to matters of fact and evidence that would or might feed into the adjustment process.
That reading is also consistent with the findings of error made in [161] ‑ [163] of the Appeal Reasons. The retrial arises from the errors found by the Court of Appeal. In resolving a question as to the scope of the retrial ordered by the Court of Appeal, attention should be given to the subject matter, nature and scope of the errors found by the Court of Appeal. Moreover, the Court of Appeal found that the issues upon which an error has arisen 'may effectively be disjoined from the wider case on valuation'.[24] This suggests that the Court of Appeal intended the scope of the retrial to reflect the scope of the errors made at trial.
[24] Appeal Reasons [361].
Generally, once a decision is reserved after trial, the parties are not entitled to any further opportunity to adduce evidence and make submissions. However, the Court of Appeal found that this was a case where 'certain matters emerge in the judge's consideration of the case after trial which the judge regards as potentially dispositive but in relation to which, in all the circumstances, it is to be inferred that the parties did not have a proper opportunity to address at trial'.[25]
[25] Appeal Reasons [156].
In [159] ‑ [162] of the Appeal Reasons, the Court of Appeal set out the facts and circumstances which, it found, required me as trial judge to have given the plaintiffs the opportunity to call further evidence, once certain matters had emerged in my consideration of the case after I reserved my decision. None of those were facts or circumstances respecting the allegedly comparable properties or the sale transactions. Rather, all of those matters related to questions of valuation reasoning. To my mind, that reinforces the view that it was valuation evidence, and not other forms of evidence, which should have been the subject of an opportunity to adduce further evidence.
This reading is also reinforced by [363] of the Appeal Reasons. Murphy JA referred to a number of comments in the Trial Reasons in which I 'lamented' the absence of material to assist me in the adjustment process. All of those comments related to evidence of valuers about the quantification of adjustments from a comparable sale to the subject land.[26]
[26] See Trial Reasons [174], [2483], [2539], [2644].
If, and insofar as, I have a discretion to admit evidence in addition to the evidence required to be admitted by force of the Court of Appeal's order and the Appeal Reasons, in light of the long history of this action and the volume of evidence adduced at the trial, I would not permit any additional evidence to be led.

Conclusion

I summarise my conclusions as follows:
(1)on the retrial, further evidence may be adduced from a valuer:
(a)expressing an opinion on the question of whether and to what extent it is useful to attempt to derive a floor value of the subject land from the Clough/Rapley transaction and to derive a ceiling value of the subject land from the exercise of the first option in the Gold Fortune transaction; and
(b)expressing an opinion on the quantification of the appropriate adjustment to be made from each or any of the three transactions, in deriving a value, floor value or ceiling value, as the case may be, for the subject land. That opinion must be based on the findings made in the Trial Reasons and, to the extent not inconsistent with such findings, evidence before the court in the trial;
(2)it is not open to lead evidence of fact from lay witnesses. Nor is it open to lead non‑valuation expert evidence such as planning or environmental expert evidence.
It follows from this that the additional evidence proposed by the plaintiffs is not admissible. It also follows, as the defendants accept, that the additional evidence they propose to lead of the contract of sale of lot 23 and from Mr Hiller is not admissible. I make rulings accordingly.
The parties should now finalise preparation for trial, including any valuation evidence to be adduced, in light of these reasons.