Moloney v Roads and Maritime Services

Case •

[2018] NSWCA 252

•

02 November 2018

No judgment structure available for this case.

Court of Appeal


Supreme Court


New South Wales

  • Summary available
  • Amendment notes
Medium Neutral Citation: Moloney v Roads and Maritime Services [2018] NSWCA 252
Hearing dates: 6-7 June 2018
Date of orders: 02 November 2018
Decision date: 02 November 2018
Before: Beazley P at [1], Basten JA at [2], Payne JA at [25]
Decision:

(1) Appeal dismissed.
(2) Appellants to pay the respondent’s costs as agreed or assessed.

Catchwords:

ENVIRONMENT AND PLANNING – acquisition of land – compensation – compensation awarded for market value including loss of amenity to main dwelling on residue land – whether claim for disturbance available for cost of relocation to replacement dwelling on residue land – relationship between heads of compensation for market value and disturbance – Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 54, 55, 59

ENVIRONMENT AND PLANNING – acquisition of land – compensation – compensation awarded for market value including right to potential profits from acquired land – whether claim for disturbance available for loss of profits from acquired land – relationship between heads of compensation for market value and disturbance – Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 54, 55, 59
Legislation Cited: Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 37, 54, 55, 56, 59, 61; Pt 3
Land and Environment Court Act 1979 (NSW), s 57
Roads Act 1993 (NSW)
Cases Cited: Almona Pty Ltd v Roads and Traffic Authority of NSW [2008] NSWLEC 112; (2008) LGERA 375
Brock v Roads and Maritime Services (formerly Roads and Traffic Authority of NSW) [2012] NSWCA 404; (2012) 191 LGERA 267
Gosford Shire Council v Green (1980) 48 LGRA 201
Harvey v Crawley Development Corporation [1957] 2 WLR 332
Health Administration Corporation v George D Angus Pty Ltd (2014) 88 NSWLR 752; [2014] NSWCA 352
Leichhardt Council v Roads and Traffic Authority (NSW) [2006] NSWCA 353; (2006) 149 LGERA 439
Marshall v Director-General, Department of Transport (2001) 205 CLR 603; [2001] HCA 37
McDonald v Roads & Traffic Authority (NSW) [2009] NSWLEC 105; 169 LGERA 352
Melino v Roads and Maritime Services [2018] NSWCA 251
Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of New South Wales [2006] NSWCA 314
Parfett v Roads and Maritime Services [2014] NSWLEC 1182
Roads and Maritime Services v Allandale Blue Metal Pty Ltd [2016] NSWCA 7
Roads and Traffic Authority (NSW) v McDonald (2010) 79 NSWLR 155; [2010] NSWCA 236
Roads and Traffic Authority (NSW) v Peak [2007] NSWCA 66
Roads and Traffic Authority (NSW) v Muir Properties Pty Ltd [2005] NSWCA 460; (2005) 143 LGERA 192
Tolson v Roads and Maritime Services [2014] NSWCA 161; (2014) 201 LGERA 367
Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5
Category:Principal judgment
Parties: John Brendan Moloney (First Appellant)
Colleen Patricia Moloney (Second Appellant)
Roads and Maritime Services (Respondent)
Representation:

Counsel:

 

Mr I Hemmings SC / Ms A Pearman (First and Second Appellant)
Ms S Pritchard SC / Mr N Eastman (Respondent)

 

Solicitors:

  Stacks Law Firm (First and Second Appellant)
Clayton Utz (Respondent)
File Number(s): 2017/277335
 Decision under appeal 
Court or tribunal:
Land and Environment Court
Jurisdiction:
Class 3
Citation:
[2017] NSWLEC 68
Date of Decision:
13 June 2017
Before:
Pain J
File Number(s):
16/154024
16/154057

Headnote

[This headnote is not to be read as part of the judgment]

The appellants, John and Colleen Moloney, own a working sugarcane farm in regional NSW. In 2015 the respondent, Roads and Maritime Services, compulsorily acquired part of the appellants’ land for the purpose of an upgrade to the Pacific Highway. The upgrade will move the Pacific Highway closer to the location of the appellants’ current dwelling. The appellants decided to build a new home on their remaining land further away from the upgraded highway, although at the time of the primary judgment no location had been selected.

The appellants made several claims for compensation pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (“Just Terms Act”). Relevantly, the appellants made a claim for disturbance pursuant to ss 55(d) and 59(f) in relation to the costs of building a new home on their remaining land and a claim for loss of profits pursuant to ss 55(d) and 59(f) which profits were claimed to have been lost by reason of the appellants’ inability to earn profits from the sale of sugar cane on the acquired land.

The primary judge declined to award compensation in respect of both of these claims. The appellants’ challenged the decision.

On appeal the issues were:

(i)   Whether the primary judge erred in declining to award compensation for the costs of building a new home on the residue land pursuant to Just Terms Act, ss 55(d) and 59(f);

(ii)   Whether the primary judge erred in declining to award compensation for loss of profits pursuant to Just Terms Act, ss 55(d) and 59(f).

The Court (Beazley P, Basten JA and Payne JA) held, dismissing the appeal:

In relation to issue (i),

Per Payne JA (Beazley P and Basten JA agreeing):

The words “direct and natural consequence of the acquisition” direct attention to the nature or degree of the required causal relationship in s 59(f) of the Just Terms Act. Only costs incurred or that might be incurred as a direct and natural consequence of the acquisition are captured. This does not encompass the carrying out of the public purpose, which is a result of the public authority, in pursuit of its statutory powers, deciding to carry out the public purpose for which it acquired the land: [78]

Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 55, 59; Marshall v Director-General, Department of Transport (2001) 205 CLR 603; [2001] HCA 37; Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5; Leichhardt Council v Roads and Traffic Authority (NSW) [2006] NSWCA 353; (2006) 149 LGERA 439; Almona Pty Ltd v Roads and Traffic Authority of NSW [2008] NSWLEC 112; (2008) LGERA 375; Brock v Roads and Maritime Services (formerly Roads and Traffic Authority of NSW) [2012] NSWCA 404; (2012) 191 LGERA 267 applied.

The primary judge’s factual findings are consistent only with the conclusion that the construction of the replacement dwelling on another part of the residue land was not a direct and natural consequence of the acquisition. Rather, the claimed costs are the result of the public authority, in pursuit of its statutory powers, deciding to carry out the public purpose for which it acquired the land: [84]

Roads and Maritime Services v Allandale Blue Metal Pty Ltd [2016] NSWCA 7 distinguished.

While the primary judge erred in determining the question of whether costs to be incurred relate to the actual use of the land as a direct and natural consequence of the acquisition by reference to the appellants’ subjective “wish” in relation to the building of a new dwelling, it was not a material error on a question of law: [89]

Land and Environment Court Act1979 (NSW), s 57; Roads and Traffic Authority (NSW) v Peak [2007] NSWCA 66 applied.

Additional observations by Basten JA about the correct construction of s 59(f) of the Just Terms Act: [17]-[23]

In relation to issue (ii),

Per Payne JA (Beazley P and Basten JA agreeing):

Section 55 of the Just Terms Act requires that regard be had to the matters identified within it, without specifying how they should be understood to interrelate. When compensation has been obtained, in full, for losses occasioned by the acquisition in the claim for market value under s 55(a), (b) or (f) of the Just Terms Act, a separate claim for the same amount as disturbance under s 55(d) is not maintainable: [100]

Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 55, 59 applied.

The finding of the primary judge that the claim for loss of profits was encapsulated in the award of compensation for the market value of the land was plainly correct: [99]

Judgment

  1. BEAZLEY P: I have had the advantage of reading in draft the reasons of Payne JA. I express my agreement with the reasons and the orders proposed by Payne JA. I also agree with the observations of Basten JA.

  2. BASTEN JA: On 6 February 2015, the appellants owned two farms used for growing sugar cane in northern New South Wales. On that date a part of their land was acquired by Roads and Maritime Services (the respondent) for an upgrade of the Pacific Highway between Woolgoolga and Ballina. Being dissatisfied with the amount of compensation proffered by the respondent under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (“Compensation Act”), they brought proceedings in the Land and Environment Court. Being dissatisfied with the compensation assessed by the primary judge (Pain J) in the Land and Environment Court[1] they appealed to this Court, alleging erroneous determination of questions of law.

    1. Moloney v Roads and Maritime Services (No 2) [2017] NSWLEC 68 (“Moloney”).

  3. The appeal should be dismissed with costs, for the reasons given by Payne JA. The following observations are by way of addition to those reasons.

Issues of statutory construction

  1. The outcomes in this case and in a second case heard with it,[2] depend on the application of certain provisions of the Compensation Act, which are set out by Payne JA at [66] below. The operation of these provisions must turn on their own language, read in context, and not on different language from other statutory schemes, paraphrases, or additional implications derived from other cases.

    2. Melino v Roads and Maritime Services [2018] NSWCA 251.

  2. This Court has commented in earlier cases on the use of terms such as “just compensation override” and “double dipping” which are not found in the Compensation Act. (The former apparently provides a free-standing basis for assessing compensation in a way which does not find expression in ss 55-60 of the Act, while the latter implies that certain amounts may be claimable twice under the Act, but should only be allowed once). Such terms may be a shorthand for conclusions reached by way of statutory construction, but when they obtain a life of their own, they distract attention from the statutory scheme and can lead to errors in approach. Having said that, it should be acknowledged that those terms were used by the primary judge in this case, without being led astray. [3]

    3. Moloney at [270].

  3. Other glosses upon the statute have been approved in earlier cases, some of which appear to have arisen as a result of too ready an acceptance of the proposition that different heads of claim may “overlap”, and a failure to read the statutory provisions as a whole. It is convenient to explain why these departures from the language of the Compensation Act should be avoided, before addressing the relevant sections in their statutory context.

(i)   just compensation override

  1. Some historical background to the use of the phrase “just compensation override” was provided in Tolson v Roads and Maritime Services. [4] The phrase is said to be derived from s 54(1) of the Act. The first limb of that provision identifies the “amount of compensation to which a person is entitled under this Part”, being Pt 3 of the Compensation Act. That language mirrors the language of s 37 providing that an owner of an interest in land which is acquired “is entitled to be paid compensation in accordance with this Part” by the acquiring authority. It is introductory rather than prescriptive.

    4. Tolson v Roads and Maritime Services [2014] NSWCA 161; 201 LGERA 367 at [86]-[97].

  2. The second limb of s 54(1) identifies the amount payable as “such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land.” That is not language permitting a departure from the terms of Pt 3. For example, one matter to which regard must be had is the market value of the land on the date of its acquisition: s 55(a). The term “market value” is defined to mean “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 …”: s 56. Nothing in s 54(1) allows some different basis for assessing the market value of the land.

  3. Further, s 55 sets out six factors to which regard must be had and which are the “only” matters to which regard may be had. Five of the six factors are defined in the ensuing sections, being ss 56-60. Section 55(f) is not further defined, although it may be affected by s 61. Each of these provisions is to be applied in its terms; s 54(1) gives an overview by reference to the purpose underlying the provisions which follow.

(ii)   “double dipping”

  1. The mandatory factors set out in the exclusive list in s 55 appear on their face to be discrete and independent sources of compensation which, if possible, should be construed so as to avoid overlap. That is to avoid a risk of their being assessed in different ways under different heads, or allowed more than once when the Act does not permit that.

  2. A practical problem facing courts dealing with claims for compensation is that valuers do not always assess value by reference to the statutory concepts. There is no doubt that the common form of “before and after” valuation wraps up a number of elements in one exercise. Often that is the best approach. Nevertheless, it may be necessary to dissect the reports to ensure they address all relevant heads of compensation, do so on a basis consistent with the Act, and do so only once.

(iii)   “intimate connection”

  1. References generally to “land” or “the land” have been held to refer to the acquired land. [5] Section 55(f) refers to an increase or decrease in the value of “any other land … which adjoins or is severed from the acquired land”. This land is sometimes referred to, generically, as residue land. That phrase is inaccurate, but does not generally cause difficulty. It should not be understood as referring to any other land owned by the person or persons from whom the land was acquired, but only such other land as “adjoins or is severed from” the acquired land.

    5. Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of New South Wales [2006] NSWCA 314 at [88] (Spigelman CJ, Handley JA agreeing); Roads and Traffic Authority of New South Wales v Peak [2007] NSWCA 66 at [61] (Beazley and Tobias JJA) (“Peak”).

  2. The variation of statutory language has, however, gone further. By comparison with s 55(f), which deals with “other land”, s 59(f) [6] deals with certain costs “relating to the actual use of the land”, meaning the acquired land. Case law has suggested that “if the actual use of the residue land is so intimately connected with the actual use of the acquired land so that use of the one is [dependent] on use of the other, then that is sufficient to bring it within s 59(f).”[7]

    6. The provision is now numbered s 59(1)(f), pursuant to amendments which commenced on 1 March 2016, after the date of acquisition in the present case.

    7. Peak at [71].

  3. Such a gloss on the statutory language would be innocuous if the same test were to be applied with respect to each provision. However, that is not so. With respect to “other land”, s 55(f) allows for the consideration of any increase or decrease in the value of such land “by reason of the carrying out of … the public purpose for which the land was acquired.” Section 59(f), which deals with financial costs incurred relating to the actual use of the acquired land, provides that the loss must be incurred as “a direct and natural consequence of the acquisition.” Self-evidently, these tests differ. At least, the acquisition does not incorporate the carrying out of the public purpose, although the latter could possibly incorporate the former. So much was understood in Peak, the Court holding that the primary judge, whilst purporting to apply s 59(f), had in fact adopted the consequence of carrying out the public purpose test under s 55(f), and had therefore erred in law. [8]

    8. Peak at [74].

  4. Section 55 unambiguously, by identifying certain mandatory matters as the “only” matters to which regard may be had, stipulates in par (f) the only way in which a decrease in the value of “other land” may be compensated. To allow for an award of compensation on a different basis is to contradict the statute. In my view that approach cannot be accepted.

  5. Despite the use of language which may not accurately reflect the statutory provisions, the primary judge applied those provisions without error in each of the respects complained of by the appellants.

Construction of s 59(f)

  1. The principal complaint raised by the notice of appeal concerned the manner in which the trial judge dealt with claims for disturbance under s 59(f) of the Compensation Act. One aspect of the claim involved loss of income from the acquired farm land which was used for sugar cane production. As explained by Payne JA, that claim was correctly dismissed by the primary judge on the basis that the value of the acquired land included its profitable use for agricultural purposes.

  2. The other aspects of the claim for disturbance related to the effects on the principal residence of the appellants, which was not situated on the acquired land, but on adjoining land. There was no doubt that the amenity of the existing home was adversely affected by the rerouting of the highway, so as to create a larger road closer to the house. To explain why the claims under s 59(f) should all have failed requires further consideration of that provision, in its statutory context.

  3. Section 59 defines the scope of the phrase “loss attributable to disturbance”, which appears in s 55(d). Section 59 had six paragraphs. [9] Paragraph (a) addresses legal costs “reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land”, and par (b) deals with valuation fees reasonably incurred by “those persons”. Paragraph (c) addresses various financial costs “reasonably incurred in connection with the relocation of those persons”, being the persons entitled to compensation in connection with the compulsory acquisition of the land. Paragraphs (d) and (e) address limited stamp duty and mortgage expenses incurred by “those persons”, limited to those requiring relocation. There is a question as to whether pars (c), (d) and (e) are limited to relocation of persons as a result of the land on which their home stood being acquired, or whether they include relocation of persons whose home was on adjoining land. There is also a question as to whether, if they extend to the latter category, they are limited to the specified financial costs of relocation caused by the acquisition (that is the loss of ownership of the acquired land) or by the carrying out of the public purpose for which the land was acquired, or both. These questions do not arise in the present case because the focus is on the sixth paragraph in s 59, which is partly in different terms.

    9. This remains true of s 59(1).

  4. Paragraph (f) commences with the phrase “any other financial costs”. The word “other” indicates financial costs other than those referred to in pars (a)-(e); however, the use of the phrase “financial costs” indicates that they are costs of a similar kind.

  5. Secondly, the other financial costs must relate to “the actual use of the land”, namely the acquired land. The reference to “actual use” is to the use to which the land was put at the date of acquisition.

  6. Thirdly, the other financial costs must be reasonably incurred “as a direct and natural consequence of the acquisition.” That language requires a direct and natural causal connection between the use of the land and the fact that the use is no longer possible because of the change in ownership. If the acquired land was actually used at the date of acquisition for the purpose of access to other land, including, in this case, land on which the owners’ house stood, the cost of rerouting the access road would be covered by this provision. That was not the issue in the present case: such costs, legitimately falling within the scope of par (f), had been accepted and agreed. The disputed claims related to the relocation of the dwelling house further from the highway. The claims included the cost of a replacement dwelling and numerous ancillary costs, such as the design of the dwelling and its connection with electrical services, town water supply and a new septic system.

  1. None of these costs fall within the scope of s 59(f). The removal of the house to a place further from the new highway was not caused by the loss of ownership of the acquired land, but by the loss of amenity caused by the proposed use of the acquired land for the public purpose for which it was acquired. Such a claim fell comfortably within the concept of a “decrease in the value of any other land of the person at the date of acquisition which adjoins … 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.” That is the language of s 55(f). In the jargon used in this area of the law, this diminution in value is described as “injurious affectation”. The appellants had a strong claim for injurious effects on amenity under s 55(f). So much was not in dispute and was expressly incorporated within the “before and after” calculations of value accepted by the primary judge. [10] The disputed claims under s 59(f) were correctly disallowed.

    10.    Moloney at [200] and [325].

Conclusion

  1. The appeal must be dismissed; the appellants must pay the respondent’s costs in this Court.

  2. PAYNE JA: This is an appeal from a decision of Pain J in Moloney v Roads and Maritime Services (No 2) [2017] NSWLEC 68. The appellants, John Moloney and Colleen Moloney, own a working sugarcane farm called “Home Farm” in the Tyndale area in northern NSW. In 1971, the appellants purchased Home Farm and resided in a dwelling on the property that fronted onto the Pacific Highway. In 1981-2, the appellants built a new dwelling approximately 950 metres away from the highway, where they continue to reside. In 2013, the respondent, Roads and Maritime Services (“RMS”), decided to realign the Pacific Highway near Tyndale and significantly increase its size and capacity.

  3. On 6 February 2015, RMS compulsorily acquired a strip of land running through Home Farm and another nearby sugarcane farm owned by the appellants named “Watts Farm”, pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (“Just Terms Act”). The upgraded Pacific Highway will be 145 metres away from the appellants’ dwelling on Home Farm. An off-ramp from the Pacific Highway to local roads will be 115 metres from their dwelling.

  4. When informed about the proposed Pacific Highway upgrade, the appellants decided to build a new home on the residue land on Home Farm away from the upgraded highway. At the time of the hearing before the primary judge, no precise location had been selected for the proposed new home and a development application had not been lodged. A number of claims for compensation were made by the appellants which are no longer relevant. The remaining claims relevant on this appeal are:

  1. a claim for disturbance pursuant to ss 55(d) and 59(f) of the Just Terms Act in relation to the costs of building a new home on the residue land on Home Farm away from the upgraded highway (“the home relocation claim”);

  2. a claim for loss of profits pursuant to ss 55(d) and 59(f) which profits were claimed to have been lost by reason of their inability to earn profits from the sale of sugar cane on the strip of land acquired by RMS running through Home Farm (“the loss of profits claim”).

Primary Judgment

  1. The primary judge determined the amount of compensation payable under the Just Terms Act representing the market value of the land acquired and the decreased value of the residue land.

  2. The primary judge did not allow compensation for disturbance in relation to the home relocation claim. Before addressing the claim for disturbance, her Honour made findings of fact about the market value of the residue land on Home Farm relevant to that question.

  3. Home Farm includes 72.925ha of highly productive cane fields in good condition. Home Farm had good accessibility to the new Pacific Highway and the Tyndale interchange with a connection to the main dwelling by a road to be constructed by RMS. The improvements on what the primary judge described as the residue land (being “other land” 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) included two dwellings being the original dwelling on Lot 1 which fronts the existing highway, which was to be converted to a local council road after completion of the upgraded Pacific Highway, and the main dwelling, where the appellants lived.

  4. Her Honour found that the main dwelling would be affected by significant noise from the new highway but that RMS would at no cost to the appellants carry out the acoustic treatments identified in the planning approval for the upgraded Pacific Highway. Her Honour concluded that the hypothetical vendor and purchaser relevant for determining the market value of the residue land would be imputed with knowledge that the main dwelling on the residue land on Home Farm would require acoustic treatment designed to attenuate the road noise.

  5. The primary judge concluded that for the purposes of a hypothetical sale a “before” and “after” valuation was appropriate. In the “after” scenario, Home Farm would be viewed in the market as a cane farm with two habitable dwellings, good highway access and a main dwelling having less than ideal amenity. The hypothetical prudent purchaser would decrease his or her offer to account for the diminution in amenity wrought by the Pacific Highway upgrade. The primary judge found that the value of the residue land, including the two dwellings, should reflect the change of amenity after acquisition. The curtilage of the main dwelling, accepted by her Honour to be 4,500m², would be adversely impacted. This too was taken into account in assessing market value.

  6. The primary judge found that the hypothetical purchaser in the sale of the “after” land would not sacrifice the main dwelling and erect a like-for-like replacement dwelling costing $848,344 or $711,738 (RMS’ alternative submission about the cost of a “project” home). Her Honour reasoned that erecting a like-for-like replacement dwelling would be out of proportion compared to the price of the farm when the existing main dwelling appears to be in good order, is habitable and will receive acoustic treatment at no cost to the purchaser, which will produce a satisfactory internal amenity without causing sleep disturbance to the occupants. By reference to a comparable local sale, her Honour concluded that a price would be set in the hypothetical transaction which would cover the potential provision of suitable screening vegetation, and perhaps also fencing.

  7. Taking all of these matters into account, her Honour found that the hypothetical sale would fix a price for the main dwelling which was 50 per cent below the “before” value to allow for future expenses caused by any residual acoustic and amenity issues including issues arising requiring expenditure in relation to the external curtilage. In so concluding her Honour found that the value of the land in the hypothetical sale should not be reduced by $848,344, being the cost of erecting a replacement dwelling, thereby writing off the existing main dwelling at effectively nil or nominal value.

  8. These findings, and in particular the findings about the valuation issues for the residue land, formed the backdrop of her Honour’s consideration of the disturbance claims.

  9. In addressing the home relocation claim, which was based on disturbance, the primary judge commenced by reiterating that the value of the main dwelling and its curtilage had been determined as part of the market value claim pursuant to s 55(f) of the Just Terms Act. Her Honour noted, however, that a claim for disturbance under s 59(1)(f) could overlap with a claim for diminution in market value pursuant to s 55(f), citing the decision of Beazley and Tobias JJA in Roads and Traffic Authority (NSW) v Peak [2007] NSWCA 66.

  10. Her Honour found that Peak was a case where the loss of value of the main dwelling and its curtilage was compensated by being taken into account in the “after” valuation as part of the “before and after” valuation of the land. In contrast to Peak, where the main dwelling was rendered uninhabitable by the acquisition, the primary judge distinguished the present case by repeating her earlier finding that, for the purposes of the hypothetical sale transaction necessary to determine market value, the main dwelling in the present case was “not uninhabitable” although there would be a substantial impact on amenity, for which compensation had been awarded as part of the market value claim.

  11. The primary judge stated that in Peak at [83]-[84] the Court held that the valuation exercise actually undertaken was key. A court being asked to address a compensation claim based on disturbance must determine what matters were incorporated by the valuers in the “after” valuation of the residue land for the purposes of the market value claim. The primary judge found that this methodology was adopted by this Court in Roads and Traffic Authority (NSW) v McDonald (2010) 79 NSWLR 155; [2010] NSWCA 236. By reference to McDonald, her Honour said, at [269], that what was not compensable as “disturbance” was any amount of compensation paid under s 55(f) for the loss of the value of residue land “in respect of the same costs” as were claimed as disturbance.

  12. Her Honour concluded that the appellants’ home relocation claim overlapped with the loss in value of the main dwelling already compensated through the “before and after” valuation in the market value claim. As a result, her Honour found at [270] that the claim under s 59(f) “could be” regarded as “double dipping”. Her Honour found that “double dipping” is implicitly excluded by the “just compensation override” and the requirement that an amount of compensation must be determined only in relation to heads of compensation prescribed by s 55 of the Just Terms Act: McDonald at [60] per Tobias JA.

  13. Her Honour recorded the appellants’ principal reliance upon Tolson v Roads and Maritime Services [2014] NSWCA 161; (2014) 201 LGERA 367 at [8]-[9] per Beazley P and [83] per Basten JA. Her Honour distinguished Tolson and held that each case must be determined on its own facts. The “before and after” method in the present case took into account the diminution in value of the main dwelling and thus “the costs of building a replacement dwelling cannot be separately claimed as a disbursement” (by which her Honour apparently meant a cost of disturbance).

  14. Although nothing turns on the error in this case, her Honour referred to the Just Terms Act at an incorrect date. The relevant date was the date of the acquisition, 6 February 2015. Section 59(1)(f), which is relevantly identical to s 59(f), only came into effect on 1 March 2016. The correct version of the section in February 2015 provided as follows:

“59 Loss attributable to disturbance

In this Act:

loss attributable to disturbance of land means any of the following:

…

(f)    any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.”

  1. Her Honour appears to have approached the question of whether the costs were “reasonably incurred (or that might reasonably be incurred)…as a direct and natural consequence of the acquisition” on the basis that the appellants’ subjective wish to relocate their house was the relevant test. Her Honour recorded that the appellants did not address whether the costs were a “direct and natural consequence of the acquisition” in their submissions and appears to have assumed, at [282], that she was being asked to determine the subjective reasonableness of the appellants’ intention to move further away from the highway, by referring to the fact that they had earlier moved. Her Honour (as apparently the appellants had invited her to) focussed on whether the costs of relocation were “reasonably incurred” and found, at [286], that she was not precluded by authority from taking the view pressed on her by the appellants that “their opinion that it is reasonable to move is the relevant test”. Applying that test, her Honour concluded at [306] that the appellants’ intention to move to a replacement dwelling was a direct and natural consequence of the acquisition. However, that finding was qualified by the earlier conclusion that the building cost of the proposed replacement dwelling would constitute “double dipping”.

  2. Her Honour then turned to consider the loss of profits claim. The appellants claimed the loss of income from the acquired strip of land on Home Farm used as a sugarcane farm as loss of profits in perpetuity in the amount of $148,258 as disturbance costs falling within s 59(f).

  3. Her Honour did not allow the loss of profits claim. The basis of her Honour’s conclusion was that the compensation already awarded for the market value of the acquired land included the capacity of the land to generate a profit as a sugarcane farm. Her Honour found that the hypothetical sale amount of the acquired land (adopted for the purposes of the market valuation of the acquired land) included the whole of the amount that would have been paid if the land had been sold, disregarding the effects of the public purpose. Her Honour found that expectations of future capital increments and the right to collect income from the land from rent or from carrying on sugarcane farming for profit on it were rights which existed in the land itself for the benefit of the holder of the fee simple and which were reflected in that valuation. As a result, the right to potential profits from growing sugarcane after the date of acquisition were encapsulated in the market value of the land and no additional claim for disturbance for loss of profit pursuant to s 59(1)(f) was maintainable.

Grounds of appeal

  1. On 24 November 2017 the appellants filed a Notice of Appeal listing seven grounds of appeal. Ground seven is no longer pressed.

  2. Grounds one to four relate to the home relocation claim, and can be summarised as follows:

  1. the primary judge erred in her Honour’s interpretation and application of s 59(f) of the Just Terms Act by finding that the appellants’ home relocation claim was not available;

  2. the primary judge erred in her Honour’s interpretation and application of s 59(f) of the Just Terms Act by finding that the cost of building a replacement dwelling could not be separately claimed as the application of the “before and after” valuation method had already taken into account the loss of value of the dwelling;

  3. the primary judge erred by implying an exclusion into s 55 of the Just Terms Act by reference to the “just compensation override” in s 54 of the Just Terms Act; and

  4. the primary judge erred in the interpretation and application of s 55 of the Just Terms Act by conflating the hypothetical assumptions in the “after” valuation for the purposes of the market value claim with actual findings for the purposes of the s 59(f) disturbance claim.

  1. Grounds five and six relate to the loss of profits claim, and can be summarised as follows:

  1. the primary judge erred in finding that the loss of profits claim was not available “as a matter of valuation principle”; and

  2. the primary judge erred in finding that the claim was “not available”.

The home relocation claim

Appellants’ submissions

  1. The appellants submitted that there is a clear and consistent line of authority on the relationship between the subparagraphs of s 55 of the Just Terms Act. Namely, while the heads of compensation that relate to value (ss 55 (a), (b), (c), and (f)) may be aggregated, disturbance (s 55(d)) is a separate head of compensation because financial costs are different in nature to changes in value: Health Administration Corporation v George D Angus Pty Ltd (2014) 88 NSWLR 752; [2014] NSWCA 352 at [47]; McDonald at [127], [132]; Tolson at [83], [118]).

  2. The appellants submitted that disturbance should be assessed according to the statutory entitlement in s 59(f); namely, the cost or loss must be reasonably incurred. If that is established (and the claim otherwise falls within the requirements of s 59(f)), then the claim is “just”: Tolson at [83]; George Angus at [57]; McDonald at [132].

  3. The appellants submitted that the “before and after” valuation did not include the matters addressed by the home relocation claim, and the primary judge erred by finding that the matters were so encapsulated.

  4. The primary judge rejected the appellants’ disturbance claim which was found to otherwise meet the statutory requirements of s 59(1)(f). The effect of this finding was a refusal to allow the totality of the relocation claim (agreed at $804,250 on the basis of the valuers’ valuation) on the basis of an “overlap” between the valuation and disturbance claims.

  5. The appellants submitted that the primary judge erred in finding that the home relocation claim involved “double dipping” because the compensation awarded pursuant to s 55(f) (the $121,250 award) was for injurious affectation to the current main dwelling, a matter distinct from the appellants’ intention to incur costs to build a new replacement dwelling as a direct and natural consequence of the acquisition. The latter is a cost which has not yet been incurred whereas the former was referable to a value which was determined at the date of acquisition: McDonald at [84].

  6. The appellants submitted that a claim with multiple components that may fall into both the value and the disturbance heads of s 55 is not to be rejected, but rather reflects “just compensation”: McDonald at [132]. The primary judge erred in finding there to be “double dipping”.

  7. The appellants submitted that the primary judge erred in relying on the “just compensation override” in s 54 to exclude “double dipping” because this Court has not accepted the override (cf Tolson at [9] and [12]). Further, the override in fact supports the appellants’ case because it is informed by the objects of the Just Terms Act which include ensuring compensation on just terms (s 3(1)(b)) and guaranteeing that compensation will not be less than market value (s 3(1)(a)). The appellants will not receive just compensation as guaranteed without an award made under both heads.

Respondent’s submissions

  1. The respondent submitted that the primary judge was correct in finding that the home relocation claim was not recoverable. The finding is consistent with the line of authority that the “before and after” method of valuation can be used to capture multiple heads of compensation in s 55: Gosford Shire Council v Green (1980) 48 LGRA 201 at [208]; McDonald v Roads & Traffic Authority (NSW) [2009] NSWLEC 105; 169 LGERA 352 at [37].

  2. The respondent submitted that ss 54-55 of the Just Terms Act are not directed to a claim for “reinstatement”, quoting Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of New South Wales [2006] NSWCA 314 at [46] per Spigelman CJ:

“As I have noted above it is a feature of the before and after approach of valuation that it does not separately address each of the matters in s 55. It does, by its nature, make allowance for more than one of those matters. The before and after method, albeit in this rolled up way, can be understood to achieve ‘just compensation’ because its application, insofar as money can do so, places a person in the same position as that person would have been in if the acquisition had not occurred. This approach to compensation is, of course, equivalent to the measure of damages in tort. I do not wish to suggest that this is the criterion, because it bears a close analogy with a reinstatement basis for valuation to which ss 54 and 55 are not directed. Nevertheless, in an appropriate case, the before and after method can be used to determine ‘just compensation’.”

  1. Rather, the statutory scheme in s 55 is directed towards compensation for loss: Tolson at [3]-[4] per Beazley P. The fact that ss 3 and 10 of the Just Terms Act emphasise the guarantee of compensation for “market value” indicates that compensation is to be assessed on the basis of what has been lost and not what it would cost to replace that loss. A loss can only be compensated as disturbance under s 59(f) if it has not already been properly compensated under ss 55(a) and (f).

  1. The respondent submitted that there is an important distinction between s 55(f), which refers to the effect on value of giving effect to the “public purpose”, and s 59(f), which refers to the “direct and natural consequence of the acquisition”. The former encapsulates the noise and visual impacts of the upgraded highway, being the public purpose, and the latter is directed to the acquisition itself and associated procedures.

  2. The respondent submitted that the appellants’ reliance on Tolson was misplaced. Unlike in Tolson, the appellants’ claim for relocation costs was not a “disbursement” but rather a “reinstatement” because the losses arising out of the impact of the public purpose on the main dwelling were already compensated pursuant to s 55(f).

  3. The respondent relied upon the principle of “double dipping” described by Biscoe J in McDonald, where his Honour stated (at [148]):

“Where the before and after method captures the decreased value of the residue land, a disturbance claim under s 59(f) would be double-dipping to the extent of the capture.”

  1. The respondent submitted that Biscoe J’s reference to the “extent of the capture” goes to the components of a disturbance claim. In the present case, this covered the appellants’ home relocation claim because the loss relating to relocation of the main dwelling was already compensated under s 55(f) using the “before and after” valuation.

  2. The respondent submitted that whether the issue be framed as one of an “override” or not, the appellants’ claim fails under these grounds of appeal because there is no “loss attributable to disturbance” (s 55(d)) as any applicable loss has already been compensated under ss 55(a) and (f).

Consideration

  1. Claims for compensation arising from the compulsory acquisition of land are determined in the Class 3 jurisdiction of the Land and Environment Court. An appeal from a judgment in such proceedings is limited to challenging an order or decision of the Court on a question of law: Land and Environment Court Act1979 (NSW), s 57. That section provides, relevantly:

“57   Class 1, 2, 3 and 8 proceedings—appeals

(1)    A party to proceedings in Class 1, 2, 3 or 8 of the Court’s jurisdiction may appeal to the Supreme Court against an order or decision (including an interlocutory order or decision) of the Court on a question of law.

(2)    On the hearing of an appeal under subsection (1), the Supreme Court shall:

(a)    remit the matter to the Court for determination by the Court in accordance with the decision of the Supreme Court, or

(b)    make such other order in relation to the appeal as seems fit….”

  1. Accordingly, this appeal is limited to a question of law. An error on a question of law permits the Court to set aside the judgment of the primary judge, if it is a material error: Peak at [152] per Basten JA.

  2. The interpretation, and application, of s 59(f) of the Just Terms Act and the relationship between compensation for disturbance payable under s 55(d) of the Just Terms Act and compensation payable under the “value” grounds in s 55(a), (b) and (f) of the Just Terms Act are at the heart of this appeal.

  3. The provisions of the Just Terms Act relevant to this appeal are ss 54, 55, 56, and 59. They provided (as at 6 February 2015, the date of acquisition) the following:

“54    Entitlement to just compensation

(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.

(2)    If the compensation that is payable under this Part to a person from whom native title rights and interests in relation to land have been acquired does not amount to compensation on just terms within the meaning of the Commonwealth Native Title Act, the person concerned is entitled to such additional compensation as is necessary to ensure that the compensation is paid on that basis.

55    Relevant matters to be considered in determining amount of compensation

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.

56    Market value

(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.

59    Loss attributable to disturbance

In this Act:

loss attributable to disturbance of land means any of the following:

(a)    legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land,

(b)    valuation fees reasonably incurred by those persons in connection with the compulsory acquisition of the land,

(c)    financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs),

(d)    stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired),

(e)    financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage),

(f)    any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.”

  1. The relationship between the grounds in s 55 of the Just Terms Act and the operation of s 59, in particular s 59(f), has been the subject of consideration in this Court on a number of occasions.

  2. The question of what has been determined about the construction of these provisions in the earlier cases must be approached with a little care. The precise factual background in each case has provided the occasion for some apparently broad statements of principle made by the Court, which on one view are difficult to reconcile. It is thus necessary to examine whether a number of those statements are expressions of principle relevant to the central construction questions posed here or are better understood as expressions relevant to the operation of the Just Terms Act in the particular case being considered.

  3. Expressions which have been used in some of the cases, such as the “just terms override” which is said to underlie a presumption against “double dipping” are a gloss on the language of the statute. Whether, in substance, there is a construction of ss 54 and 55 of the Just Terms Act requiring a conclusion which has been given the label “just terms override” in some of the cases is not a matter that squarely arises in this case. Determination of that issue should await a case where it squarely arises for the reasons given by Basten JA in Tolson at [86]-[97]. Further, the concept of “double-dipping”, which apparently springs from remarks made by Tobias JA in RTA v Muir Properties Pty Ltd [2005] NSWCA 460; (2005) 143 LGERA 192, is another gloss on the language of the statute. Whether, in substance, there is a construction of ss 54 and 55 of the Just Terms Act requiring definition of the concept of “double-dipping” is not a matter that arises in this case.

  4. The starting point in construing the appellants’ right to compensation under the Just Terms Act is the decision of the High Court in Marshall v Director-General, Department of Transport (2001) 205 CLR 603; [2001] HCA 37. In that case Gaudron J stated:

“[38] Although the rule that legislative provisions are to be construed according to their natural and ordinary meaning is a rule of general application, it is particularly important that it be given its full effect when, to do otherwise, would limit or impair individual rights, particularly property rights. The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.”

  1. In Marshall, Hayne J agreed (at [67]) with these observations about the importance of construing legislation according to its natural and ordinary meaning. The approach in Marshall is consistent with the correct approach to the Just Terms Act explained in Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5 at [31] and [35].

  2. The Just Terms Act should be approached on the basis that the appellants’ right to compensation should not be subject to limitations or qualifications which are not found in the terms of the statute.

  3. In Leichhardt Council v Roads and Traffic Authority (NSW) [2006] NSWCA 353; (2006) 149 LGERA 439, Spigelman CJ held that s 55 of the Just Terms Act constituted “an exhaustive list to which regard must be had when determining the amount of compensation under s 54”. The Chief Justice went on to explain that the matters specified in each of the sub-sections of s 55 do not constitute a “mathematical formula”. His Honour added:

“[37]…The dominant test is contained in s 54, 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 s 3(1)(b) 'to ensure compensation on just terms for the owner of land that is acquired ...'.”

  1. It is clear that the various heads of compensation in s 55 are capable of overlapping. That is so despite those heads addressing different issues and involving different tests to determine whether compensation is available and, if so, the amount of that compensation. So much was established in Mir Bros Unit Constructions per Spigelman CJ (Handley and Tobias JJA agreeing). The potential for overlap between compensation for the market value of the acquired land and compensation for disturbance is a key question in the present case, as it has been in a number of cases in this Court. In addressing this question it is necessary to refer to these earlier decisions, which are not always easy to reconcile. I have addressed those questions in the context of a related series of questions raised in Melino v Roads and Maritime Services [2018] NSWCA 251, which was also handed down today. I will adopt, but not repeat that discussion of the relevant authorities here.

  2. Assuming that s 59(f) can apply to the costs claimed in this case, the question posed by this case is whether the appellants have incurred or might reasonably incur costs relating to the actual use of the acquired land which costs are a direct and natural consequence of the acquisition, rather than the giving effect by the respondent to the public purpose, being the purpose under the Roads Act 1993 (NSW) of upgrading the Pacific Highway.

  3. The answer to this question, on the facts found by the primary judge, is tolerably clear. In Almona Pty Ltd v Roads and Traffic Authority of NSW [2008] NSWLEC 112; (2008) LGERA 375 at [55]-[61], Jagot J explained that there was a difference between losses associated with the carrying out of the public purpose and losses which were the direct and natural consequence of the acquisition. Her Honour explained that the focus of s 59(f) is the costs incurred or that might be incurred, which must relate to the actual use of the land and be a direct and natural consequence of the acquisition. This, her Honour explained, raises a different question to the carrying out of the public purpose for which land is acquired.

  4. Jagot J explained, correctly, that each of the sub-paragraphs in s 59 involves a causal relationship between the fact of the acquisition (that is, the taking of the land as effected by publication of the acquisition notice, referred to in s 20 of the Just Terms Act) and some cost. The focus of s 59 is financial costs connected in some way to the acquisition of the land itself. Her Honour, correctly, regarded Peak and the other decisions analysed in Peak as supporting an approach to s 59(f) focusing on a relationship between the acquisition (that is, the taking of the land) and the claimed costs. The relevant costs are limited to costs “relating to the actual use of the land, as a direct and natural consequence of the acquisition”. The “actual use” of the acquired land in s 59(f) refers to the use by the dispossessed owner, not the use by the acquiring authority for the public purpose. The words “the acquisition” direct attention to the fact of the taking of the land.

  5. Critically, for present purposes, the words “direct and natural consequence of the acquisition” direct attention to the nature or degree of the required causal relationship. Only costs incurred or that might be incurred as a direct and natural consequence of the acquisition are captured. The carrying out of the public purpose is possible because of the acquisition, but that does not mean that costs incurred because of the carrying out of the public purpose are themselves a direct and natural consequence of the acquisition. They are a result of the public authority, in pursuit of its statutory powers, deciding to carry out the public purpose for which it acquired the land.

  6. In Brock v Roads and Maritime Services (formerly Roads and Traffic Authority of NSW) [2012] NSWCA 404; (2012) 191 LGERA 267 at [40] Tobias AJA with whom Beazley and Meagher JJA agreed, approved the description of the required causal relationship given in Almona.

  7. The primary judge's finding in Brock was that the construction of a fence required to keep livestock from finding their way on to a road and the ongoing maintenance of the fence would result in a decrease in the value of residue land by reason of the construction of the proposed road, being the public purpose for which the land was taken. The taking of the acquired land did not, of itself, require the erection of the fence. The public purpose for which the land was taken, the new road with its increase in traffic, did. It was the road which posed a potential danger to the appellant's livestock, not the change in title of the acquired land. It followed that compensation for disturbance was not payable.

  8. Turning then to the facts of the present case, the primary judge’s factual findings are consistent only with the conclusion that the construction of the replacement dwelling on another part of the residue land was not a direct and natural consequence of the acquisition. The taking of the acquired land did not require the erection of a replacement dwelling.

  9. After the acquisition of the land, the dwelling was habitable albeit suffering a diminution in amenity wrought by the Pacific Highway upgrade. Although not expressed in those terms, her Honour implicitly made such a finding at [265] by her reference to Peak and her rejection of the submission that the dwelling was uninhabitable.

  10. The carrying out of the public purpose was possible because of the acquisition. That does not mean that the costs to be incurred by the appellants because of the carrying out of the public purpose, being those that would be incurred in rebuilding the dwelling at another location, are themselves a direct and natural consequence of the acquisition.

  11. On the facts found by the primary judge, the claimed costs here are clearly the result of the public authority, in pursuit of its statutory powers, deciding to carry out the public purpose for which it acquired the land. If, as in Roads and Maritime Services v Allandale Blue Metal Pty Ltd [2016] NSWCA 7, the house was no longer able to be used by the appellants for its “actual use” at the time of the acquisition as part of the sugarcane farming operation conducted on Home Farm, the position may be different. However, on the findings of the primary judge, the existing dwelling was still able to be used, albeit with a diminution in amenity. Critically, however, that diminution in amenity was due to the public purpose being carried out; the proposed upgrade to the Pacific Highway, not the acquisition of the land. It follows that the proposed costs of rebuilding the dwelling on another part of the residue land were not a direct and natural consequence of the acquisition.

  12. It is true, as the appellants submitted, that the primary judge did not reason in the way I have described immediately above. That is, the finding at paragraph [272] that “[t]he application of the ‘before and after’ method in this case takes into account the loss of value of the main dwelling. The cost of building a replacement dwelling cannot be separately claimed as a disbursement by the [appellants] as that has already been taken into account in the 'before and after method' was an error on a question of law in the interpretation, and application, of s 59(f) of the Just Terms Act. An error on a question of law permits the Court to set aside the judgment of the primary judge, if it is a material error: Peak at [152] per Basten JA.

  13. Given the express and implicit factual findings made by the primary judge, the error on a question of law identified by the appellants was not a material error. On the basis of those factual findings, her Honour reached the correct conclusion, namely that costs to be incurred in moving the main dwelling were not recoverable as disturbance costs. Her Honour’s error was thus not a material error in that applying the correct test to the facts that she had found leads inexorably to the same result.

  14. There is a remaining issue about whether her Honour’s finding in a different part of the case (concerning the costs of moving services to any new dwelling if it was built), at [306], that the appellants’ intention to move to a replacement dwelling is a direct and natural consequence of the acquisition gives rise to any different conclusion. The appellants did not take the point that a notice of contention had not been filed by the respondent about the finding at [306], but did rely on the point that what the appellants described as a finding of fact in [306] had not been challenged by the respondent.

  1. Her Honour, in making the finding at [306], fell into the error described in Peak. The question of whether costs to be incurred relate to the actual use of the land as a direct and natural consequence of the acquisition was not to be determined by reference to the appellants’ subjective ‘‘wish” in relation to the building of a new dwelling. Her Honour appears to have assumed, at [282], that she was being asked to determine the subjective reasonableness of the appellants’ intention to move further away from the highway, by referring to the fact that they had earlier moved. Her Honour (as apparently the appellants had invited her to) focussed only on that part of the test of whether the proposed costs were “reasonably incurred” and found at [286] that she was not precluded by authority from taking the view pressed on her by the appellants that “their opinion that it is reasonable to move is the relevant test”.

  2. Her Honour’s finding, in this different part of the case, that the appellants’ intention to move to a replacement dwelling involved costs to be incurred which related to the actual use of the land as a direct and natural consequence of the acquisition, was based on an error of approach. That finding, based as it was on the appellants’ subjective intentions, does not give rise to any material error on a question of law.

  3. Returning then to grounds one to four of the notice of appeal, I have concluded that the appellants have shown error on a question of law but it is not a material error. This is because, on the factual findings made by the primary judge, and on the basis of the law as correctly applied, the costs of rebuilding the dwelling on another part of the residue land were a consequence of the carrying into effect of the public purpose, not the “direct and natural consequence of the acquisition”.

  4. Grounds one to four should be dismissed.

The loss of profits claim

Appellants’ submissions

  1. The appellants submitted that the primary judge erred in dismissing the loss of profits claim as a matter of principle instead of assessing it through application of the provisions of s 59(f). If the requirements of s 59(f) are met, then the appellants are entitled to compensation for disturbance. It was submitted that the fact that this disturbance award may be in addition to a market value claim is the obvious and deliberate intention of the disturbance provisions.

  2. To the extent that the primary judge relied on the decision in Parfett v Roads and Maritime Services [2014] NSWLEC 1182, the appellants submitted that this was in error as the correct approach is to consider the application of ss 55(d) and 59(f). Parfett was incorrectly decided because Miller AC failed to apply the defined term “market value” and instead separately defined the words “market” and “value”.

  3. The appellants submitted that the primary judge placed too much emphasis on there being no “actual use of the land” after acquisition. This factor is largely irrelevant because there can never be an “actual use of the land” after acquisition in any s 59(f) claim. In the present case the s 59(f) claim related to losses suffered because the land is no longer able to be used for the purposes of cane farming.

Respondent’s submissions

  1. The respondent submitted that the ability of land to produce profit is inherently a feature of the market value of the land, for which the appellants had already been compensated in the market value claim. There was no error in the primary judge’s approach to the loss of profits claim because where sugarcane is an inherent component of what adds value to the land and the land has a specific valuation rate per hectare, as it did here, compensation for market value on a rate per hectare basis fully compensated the appellants for their loss.

  2. Further, the respondent relied on Harvey v Crawley Development Corporation [1957] 2 WLR 332 for the proposition that any loss from the acquisition arose from how the appellants decided to invest the compensation received for market value rather than from the acquisition itself.

Consideration

  1. As I have said, the provisions of the Just Terms Act must be applied according to their terms and without preconceptions based on limitations which do not appear in the statute.

  2. I reject the appellants’ contention that whatever be the content of a claim made and addressed under ss 55(a), (b) and (f), the Court must separately determine entitlement to compensation for disturbance under s 55(d) as reflected by s 59(f) of the Just Terms Act, without regard to the fact that the same amount, in whole or in part, has already been the subject of a claim for compensation under s 55(a), (b) or (f) of the Just Terms Act. This approach is inconsistent with the overlapping nature of the heads of compensation in s 55 and with prior authority in this Court, including McDonald which was otherwise heavily relied upon by the appellants.

  3. The loss of profits claim illustrates the potentially overlapping nature of the heads of compensation in ss 55(a), (b) and (f) of the Just Terms Act and s 55(d) as reflected by s 59(f) of the Just Terms Act. The finding of the primary judge that “the right to potential profits from growing sugarcane after the date of the acquisition is encapsulated in the market value of the land” was plainly correct. The market value of the acquired land included the capacity of that land to generate a profit in the future, whether by growing sugar cane or doing anything else.

  4. It is not a gloss on the legislation to recognise the overlapping nature of the heads of compensation in s 55. Section s 55 requires that “regard must be had" to the identified matters, without specifying how they should be understood to interrelate. When compensation has been obtained, in full, for losses occasioned by the acquisition in the claim for market value under s 55(a), (b) or (f) of the Just Terms Act, a separate claim for the same amount as disturbance under s 55(d) is not maintainable.

  5. Finally, I would reject the respondent’s reliance on Harvey. The caution in construing modern Australian legislation by reference to "principles" derived from legislation from other jurisdictions was addressed in Walker Corporation where the High Court said:

“[31] The caution required in construing modern Australian legislation by reference to "principles" derived in this way is indicated by McHugh J in Marshall v Director‑General, Department of Transport. That case concerned the expression ‘injuriously affecting’ as it appeared in s 20 of the Acquisition of Land Act 1967 (Q); ss 49 and 63 of the 1845 Act had used the same phrase as had the subsequent legislation in various jurisdictions. Differing interpretations had been given to the expression in question. McHugh J noted the similarity in the terms of the legislation and went on:

“But that does not mean that the courts of Queensland, when construing the legislation of that State, should slavishly follow judicial decisions of the courts of another jurisdiction in respect of similar or even identical legislation. The duty of courts, when construing legislation, is to give effect to the purpose of the legislation. The primary guide to understanding that purpose is the natural and ordinary meaning of the words of the legislation. Judicial decisions on similar or identical legislation in other jurisdictions are guides to, but cannot control, the meaning of legislation in the court's jurisdiction. Judicial decisions are not substitutes for the text of legislation although, by reason of the doctrine of precedent and the hierarchical nature of our court system, particular courts may be bound to apply the decision of a particular court as to the meaning of legislation.’” (footnotes omitted)

  1. Grounds five and six should be dismissed.

Conclusion and order

  1. For the foregoing reasons the appeal must be dismissed.

  2. I propose the following orders:

  1. Appeal dismissed;

  2. Appellants to pay the respondent’s costs as agreed or assessed.

**********

Endnotes

Amendments

02 November 2018 - Typographical errors corrected in [48], [49], [65], [74], [85].

28 June 2019 - Tobias JA changed to Biscoe J at [60], [61]. "which predates the Just Terms Act" deleted at [70].

Decision last updated: 28 June 2019

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

19

Sydney Metro v C & P Automotive Engineers Pty Ltd [2024] NSWCA 186
Sydney Metro v C & P Automotive Engineers Pty Ltd [2024] NSWCA 186
Transport for NSW v Eureka Operations Pty Ltd [2022] NSWCA 56