Sotirianakos v Commissioner of Highways
[2018] SASC 16
•26 February 2018
SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
SOTIRIANAKOS v COMMISSIONER OF HIGHWAYS
[2018] SASC 16
Judgment of The Honourable Justice Blue
26 February 2018
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - RIGHT TO COMPENSATION - GENERALLY
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - ASSESSMENT - MARKET VALUE - PARTICULAR CASES
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - RIGHT TO COMPENSATION - PERSONS ENTITLED - OCCUPIERS
Reference into Court of question concerning entitlement to compensation for acquisition of land.
In 1996 Vasilios and Angeliki Sotirianakos were the registered proprietors of the fee simple in a house property on Main South Road. They entered into an agreement with the applicants, Tony and Rosa Sotirianakos, for the applicants to carry out renovations, move into the property, maintain the property, pay all outgoings and not pay rent.
In November 2015 the respondent Commissioner of Highways separately acquired the fee simple from Vasilios Sotirianakos and the interest in the property of Tony and Rosa Sotirianakos. In January 2017 Vasilios Sotirianakos died.
The issues on the reference are:
1. Do the applicants have a life interest in the property or merely a licence or tenancy at will to reside in it?
2. To what extent should the assessment of compensation take into account the fact that, while the average life expectancy of an 87 year old male such as Vasilios Sotirianakos was 5.26 years, he in fact died 14 months after the acquisition?
3. Should the assessment be based on the average life expectancy of an 87 year old male or a different period by reference to Vasilios’ state of health?
Held:
(1) The terms of the agreement made in 1996 included that the applicants were to have exclusive possession of the property during the collective lives of Vasilios and Angeliki (at [58]).
(2) The applicants had a life interest in the property (at [75]).
(3) Section 25 of the Land Acquisition Act 1969 (SA) requires the assessment of the actual value of an interest in land to be made based on the position as at the date of acquisition without regard to subsequent events (at [102]).
(4) For the purposes of valuation, there is a presumption that a life tenant had an average life expectancy at the relevant date and the onus lies on the party contending otherwise to prove otherwise (at [107]).
(5) There is no basis to find other than that Vasilios had an average life expectancy (at 109]).
(6) Value of compensation assessed at $66,755 (at [116]).
Land Acquisition Act 1969 (SA) Sections 6, 10, 14, 16, 22B, 23A, 23C and 25; Law of Property Act 1936 (SA Sections 30 and 31; Compulsory Acquisition of Land Act 1925 (SA) S 12; Public Works Act 1912 (NSW) S 124; Acquisition of Land Act 1967 (Qld) S 20, referred to.
Bannister v Bannister [1948] 2 All ER 133; Brisbane City Council v Mio Art Pty Ltd (2011) 183 LGERA 352; Housing Commission of NSW v Falconer [1981] 1 NSWLR 547; Kerry v State Transport Commission (1985) 38 SASR 502; May v May (1881) 44 LT 412; Radaich v Smith (1959) 101 CLR 209; South Australian Land Commission v Bletas (1978) 77 LSJS 344; The Adelaide Fruit and Produce Exchange Co Ltd v Adelaide Corporation (1961) 106 CLR 85; Trustees Executors and Agency Company Limited v The Commissioner of Taxes (Victoria) (1941) 65 CLR 33; Weldon (Commissioner of Taxes for Victoria) v The Union Trustee Company of Australia Ltd (1925) 36 CLR 165, discussed.
SOTIRIANAKOS v COMMISSIONER OF HIGHWAYS
[2018] SASC 16BLUE J:
This is a reference into Court pursuant to section 23C of the Land Acquisition Act 1969 (SA) (the Act) of a question arising concerning entitlement to compensation by the claimants Antonios and Rosa Sotirianakos in relation to an acquisition by the respondent Commissioner of Highways of their interest in a residential property at 1339 Main South Road Bedford Park (the Property).
In April 2015 Vasilios Sotirianakos (Vasilios) was the registered proprietor of the Property. Antonios (Tony) and Rosa Sotirianakos (Rosa) were and had for 18 years been the occupiers of the Property pursuant to an agreement made in 1996.
In April 2015 the Commissioner issued to Vasilios and Tony a notice of intention to acquire the Property pursuant to section 10 of the Act.
Negotiations between Vasilios and the Commissioner resulted in October 2015 in the entry into a contract for the sale of Vasilios’ fee simple interest in the Property to the Commissioner for $375,000. A memorandum of transfer was registered by the Registrar-General in December 2015.
In the meantime, there were negotiations between Tony and Rosa (the Sotirianakos) and the Commissioner concerning the payment of compensation in relation to their interest in the Property, which did not result in agreement.
In November 2015 the Commissioner issued a notice of acquisition of the Sotirianakos’ interest in the Property pursuant to section 16 of the Act.
The issues on the reference are:
1Did the Sotirianakos have a life interest in the Property or merely a licence or tenancy at will to reside in it?
2If the Sotirianakos had a life interest in the Property, what is its value in respect of which they are entitled to compensation? In particular:
(a)To what extent is the assessment to take into account the fact that, while the average life expectancy of an 87 year old male (such as Vasilios) was 5.26 years, he in fact died 14 months after November 2015?
(b)If the fact that Vasilios died is not to be taken into account, should the assessment be based on the average life expectancy of an 87 year old male or some different period by reference to Vasilios’ state of health as at November 2015?
Background
In July 1928 Vasilios was born. In due course he married Angeliki Sotirianakos (Angeliki) and they had two sons being Tony and Dimetrios Sotirianakos (Jim).
In 1982 Vasilios and Angeliki purchased the Property. They lived in the Property with Tony and Jim.
In May 1992 Vasilios and Angeliki purchased another house property at Keswick (the Keswick property). The Sotirianakos family moved into the Keswick property. The Property was rented from time to time and was vacant from time to time.
In December 1995 Tony and Rosa became engaged.
In February 1996 Vasilios and Angeliki rented the Property to Mr Norris for three months expiring on 22 May 1996. I infer as a result of the letter referred to at [14] below that in May 1996 the parties extended the lease for three months to expire on 22 August 1996.
In mid 1996 there was a meeting between Vasilios, Angeliki, Tony and Jim. It is common ground that it was agreed that the Sotirianakos would carry out renovations to the Property, move into the Property, maintain the Property, pay all outgoings and not pay rent. I make findings concerning what more was agreed below. I infer as a result of the letter referred to in the following paragraph that the meeting occurred before 15 July 1996.
On 15 July 1996 Vasilios and Angeliki gave notice in writing to Mr Norris to vacate the Property by 22 August 2015 for repairs and because the Sotirianakos were going to live in it.
In about September 1996 the Sotirianakos undertook renovations to the Property. Renovations comprised painting the house and installation of new carpets, toilet, stove, sink and cupboard.
Tony and Rosa married on 26 October 1996 and moved into the Property immediately after their marriage. Vasilios, Angeliki and Jim continue to live at the Keswick property.
Over the next 19 years, the Sotirianakos undertook maintenance of and paid the outgoings in respect of the Property. They also undertook renovations comprising replacing a plumbing component, laying concrete at the back of the Property, installing a new window-wall air-conditioning unit, plastering cracks in the lounge room and a bedroom and polishing the floorboards in the lounge room and hallway.
In 2005 Angeliki died and Vasilios became the sole registered proprietor of the fee simple in the Property.
On 27 April 2015 the Commissioner issued to Vasilios and Tony a notice of intention to acquire the Property pursuant to section 10 of the Act.
In May or June 2015 the Department of Planning, Transport and Infrastructure (the Department) sent to Vasilios an Unregistered Interests Nomination Form (the Form). The Form sought details of anyone who may have a legal or equitable interest in the Property. It listed various examples of legal interests, one of which was “leaseholders/tenants/sharefarmers”.
On or after 6 June 2015 Vasilios sent to the Department the completed Form. It listed the Sotirianakos as having an unregistered interest in the Property. It showed their interest as “tenant”.
On 15 July 2015 Standon Lawyers wrote to the Department. They said that they acted for the Sotirianakos (as well as for Vasilios). They said that the Sotirianakos were tenants of the Property and were entitled to compensation under the Act.
On 17 July 2015 Vasilios wrote to the Department stating that he was prepared to sell the Property for $412,500.
On 27 July 2015 the Department wrote to Vasilios purporting to accept his offer but in reality making a counter offer to pay $395,301 plus conditional disturbance compensation of $17,199.
In September 2015 Vasilios suffered a stroke and was admitted to hospital for two weeks. No evidence was adduced as to the seriousness of the stroke or whether and if so to what extent it affected Vasilios’ life expectancy.
On 15 September 2015 Standon Lawyers on behalf of the Sotirianakos sent an email to the Department. They referred to discussions with officers of the Department. They claimed compensation of at least $400 per week for future rent that they would not otherwise have had to pay for many years but for the acquisition. They also claimed compensation for disturbance.
On 5 October 2015 Vasilios served on the Commissioner a Form 1 Vendors Statement in respect of the Property. It is common ground that on that date a contract was made between Vasilios and the Commissioner for the sale by Vasilios of the fee simple in the Property to the Commissioner. Surprisingly no contract of sale was drawn up or executed by the parties.
On 12 November 2015 the Commissioner by his solicitor wrote to the Sotirianakos’ solicitor offering to provide rent-free accommodation at a property at Bedford Park (the Bedford Park property) until 30 April 2016 and thereafter at market rental. On 18 November 2015 the Commissioner extended the rent-free period offered to 30 June 2016.
On 16 November 2015 the Commissioner issued a notice of acquisition of the interest of the Sotirianakos in the Property pursuant to section 16 of the Act. On 19 November notice of the acquisition was published in the South Australian Government Gazette.
On 20 November 2015 pursuant to subsection 23A(2) of the Act the Commissioner made an offer of compensation to the Sotirianakos of $nil for the value of the acquired land pursuant to section 25(1)(b)(i) and $8,000 for disturbance pursuant to section 25(1)(b)(ii) of the Act.
On 25 November 2015 this action was instituted by the Commissioner paying $8,000 into Court pursuant to subsection 23A(3) of the Act.
On 2 December 2015 a memorandum of transfer of the fee simple in the Property from Vasilios to the Commissioner was registered by the Registrar-General.
On 8 December 2015 Rosa moved out of the Property and moved into the Bedford Park property. Tony and Rosa had been experiencing marital problems which came to a head upon their being required to leave the Property.
On 19 December 2015 Tony moved out of the Property and moved into the Keswick property.
In January 2017 Vasilios died.
In August 2017 the Sotirianakos filed a statement of claim pursuant to section 23C of the Act seeking determination of the amount of compensation payable to them in respect to the acquisition of their interest in the Property.
The evidence
An affidavit by Tony was tendered and in addition he gave oral evidence. There is no challenge to his credit and I accept him as an honest witness. There was some challenge to the reliability of his recollection concerning discussions with his family in 1996 on the topic of the Property due to the effluxion of time since then. I address that specific topic below. In relation to other matters, I accept Tony’s evidence, which is reflected in the findings made above under the heading Background.
Two affidavits by Rosa were tendered and in addition she gave oral evidence. There is no challenge to her credit and I accept her as an honest witness. There was a challenge to the admissibility of her evidence concerning discussions with Tony’s family in 1996 on the topic of the Property. I address that specific topic below. In general, I accept Rosa’s evidence, which is reflected in the findings made above under the heading Background.
An affidavit by Jim was tendered. There was an objection to the admissibility of three paragraphs of the affidavit which in light of the evidence given by Tony need not be resolved. Otherwise I accept Jim’s evidence, which is reflected in the findings made above under the heading Background.
An expert valuation report by Stan Pamula was tendered by the Sotirianakos. Mr Pamula also gave oral evidence, being called by the Commissioner. Mr Pamula valued the market rental of the Property at $18,200 per annum as at November 2015. He deducted various outgoings borne by the Sotirianakos that would normally be borne by the landlord under a market rental to give a net annual advantage of $15,661.50 which he converted to a net monthly advantage of $1,305. Mr Pamula expressed opinions concerning an appropriate multiplier in the circumstances which I address below together with other aspects of his evidence.
An expert actuarial report by Laurance Brett was tendered by the Sotirianakos. He also gave oral evidence. He gave evidence that the life expectancy as at November 2015 of an 87 year-old male was 5.26 years (which is common ground). He expressed the opinion that the present value of $1,305 per month for the remainder of the life of Vasilios was $73,328. I otherwise address his evidence below.
A number of documents were also tendered.
Interest in land
The Sotirianakos contend that, pursuant to the terms of a contract made in mid 1996, they had a life interest in the Property being an estate pur autre vie, ie for the lives of Vasilios and Angeliki.
The Commissioner accepts that the parties entered into a contract in mid 1996. However the Commissioner contends that, pursuant to the terms of the contract, the Sotirianakos only had a licence giving them a personal right to reside in the Property and had no proprietary interest in the Property being a licence revocable at will (or perhaps a tenancy at will).
I make findings concerning the terms of the contract before returning to the topic of the existence and nature of an interest of the Sotirianakos in the Property.
Terms of the contract
As noted above, the Commissioner accepts that the parties entered into a contract in mid 1996. The Commissioner does not contend that it was merely a family arrangement absent an intention to create legal relations. In any event, I find that the parties intended to enter into a contract and did so.
By way of background, Tony gave evidence that, before the discussions in mid 1996 concerning the Property, there had been earlier discussions concerning inheritance at which Vasilios, Angeliki, Tony and Jim had been present. Tony gave evidence that his parents told Jim and him that they had made wills under which after they both died everything would be split down the middle between him and Jim, ie that they left all of their property equally to him and Jim. During those discussions it was agreed between Tony and Jim that, upon their parents’ deaths, given that they would inherit two houses (the Property and the Keswick property) Tony would live in one property and Jim would live in the other property.
Tony gave evidence that in mid 1996 (which I find to be before 15 July 1996) there was a meeting between Vasilios, Angeliki, Tony and Jim. As noted above, it is common ground that in mid 1996 the parties entered into a contract (the contract) and it was agreed that the Sotirianakos would carry out renovations to the Property, move into the Property, maintain the Property, pay all outgoings and pay no rent. I make findings concerning further aspects of the agreement.
In his affidavit, Tony said that it was agreed that the Sotirianakos were to “have the exclusive use, occupation and enjoyment of the Property rent free”. In light of Tony’s oral evidence and inherent likelihood, I find that the phrase “exclusive use, occupation and enjoyment” was not used but this was Tony’s understanding based on the discussion.
In cross-examination, Tony said that:
… the discussion with my father was that me and Rosa were getting married and that he would get the tenant to leave so we can repair the house and that will be our house that we will be shifting into after we got married.
Tony also said that:
My father said I could live there for the rest of my life.
Tony said that during the discussion it was reiterated that, when their parents died, everything would be left to Tony and Jim and it was agreed that the Sotirianakos would continue to live in the Property and Jim would continue to live in the Keswick property.
Tony gave evidence that the gist of this discussion was repeated on subsequent occasions when his parents, he and Jim were present.
Rosa gave evidence that she was present on one such occasion. The Commissioner contends that her evidence is not admissible because the contract had already been entered into at that point and generally evidence of post-contractual communications and conduct is not admissible in relation to the terms of the contract. I accept that contention.[1]
[1] See for example Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 446 per Gibbs J and Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 at [35] per Gummow, Hayne and Kiefel JJ approving a statement from James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 at 603 per Lord Reid.
Tony and Rosa both gave evidence concerning their own intentions or understandings. For example Rosa gave evidence that the Sotirianakos were entitled if they wished to rent out the Property (but they did not wish to do so) and Tony gave evidence that their intention was to live in the Property rather than rent it out. This evidence is inadmissible for the purpose of determining the terms of the contract because terms of the contract are to be determined objectively based on the communications between and mutual conduct of the parties up to the date of the contract and not based on internal subjective beliefs, intentions or understandings.[2]
[2] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40] per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ.
The Commissioner contends that the conduct by Vasilios in entering into a contract in October 2015 to sell the Property to the Commissioner was conduct inconsistent with the terms of the contract on the Sotirianakos’ case and is evidence that they did not have a life interest. I reject that contention. Evidence of post-contractual conduct is not admissible as to the terms of a contract.[3] In any event, I find that Vasilios believed in 2015 (rightly) that he had no choice but to sell the Property because it would be compulsorily acquired in any event and his conduct in bowing to the inevitable by choosing to contract to sell the Property rather than its being compulsorily acquired would not affect my findings as to the terms of the contract even if admissible. Moreover, if the Commissioner’s contention were correct, it would follow that the Sotirianakos only had a licence or tenancy at will, which I find is inconsistent with the objective circumstances in which they undertook substantial renovations to the Property and with the discussions between the parties comprising the contract.
[3] See footnote 1 above.
The Commissioner contends that the description of the Sotirianakos in the Unregistered Interests Nomination Form as “tenant” and their description by Standon Lawyers in their letter to the Department of 15 July 2015 as “tenants” is evidence that the Sotirianakos did not have a life interest. However, even if this were admissible, the Form did not seek any greater detail of the tenancy (such as periodic, term of years or life) and the reference by Standon Lawyers to “tenants” equally left it open whether it was a periodic, fixed term or life tenancy.
I take into account the fact that Tony gave evidence about discussions which took place 21 years ago. I take into account the objective circumstances in making findings concerning the terms of the contract. I find that the terms of the contract were as follows:
1The Sotirianakos were to renovate the Property by painting the house, replacing the carpets and installing a new toilet, stove and sink.
2 The Sotirianakos were to have exclusive possession of the Property during the collective lives of Vasilios and Angeliki (the Term).
3The Sotirianakos were to maintain the Property and undertake any renovations necessary for it to remain fit for its purpose or which they desired to improve the Property.
4The Sotirianakos were to pay all outgoings in respect of the Property, including council rates, water rates and any other statutory charges.
5By way of a side agreement between Tony and Jim, upon the death of Vasilios and Angeliki, the Sotirianakos were entitled to continue to have exclusive possession of the Property for life and Jim was entitled to have exclusive possession of the Keswick property for life.
In relation to the second term, which is directly material to the principal issue in the action, the entitlement of the Sotirianakos to possession of the Property was not dependent upon their continuing to live in the Property. If they chose to move out of the Property (and for example leave it vacant), their right to possession would continue and the contract would continue. They would still be obliged to pay all outgoings on the Property. The Sotirianakos were entitled to rent out the Property if they wished in which case they would have to find another property in which to live at their own cost. While the parties did not use the words “exclusive possession”, this was the concept to which they agreed.
I make the finding in relation to the second term for several reasons. First nothing was said and nothing was implied that the Sotirianakos were required to continue to live in the Property and that the contract would terminate if they moved out and nothing was said and nothing was implied that the Sotirianakos could not rent out the Property. Secondly it was foreseeable by the parties that circumstances might arise (such as the birth of children) in which it would be sensible for the Sotirianakos to move into a larger property and rent out the Property to help pay the rent on the larger property. Thirdly the Sotirianakos took on the obligation to renovate the property before moving in and to undertake ongoing renovations if necessary or desirable. This obligation is not one that applies in an ordinary landlord tenant relationship and is suggestive of an entitlement at least equal to and indeed greater than an ordinary landlord tenant relationship. Fourthly the Sotirianakos took on the obligation to pay all outgoings including outgoings not normally payable by the tenant in an ordinary landlord tenant relationship. This again is suggestive of an entitlement at least equal to and indeed greater than an ordinary landlord tenant relationship.
Interest in land
I first address the issue whether the Sotirianakos acquired an interest in land in 1996 disregarding the fact that the interest was (on their case) created orally and not in writing.
A life estate is a freehold interest at common law. There are two principal forms: an ordinary life estate in which the duration of the estate is the life of the holder; and an estate pur autre vie in which the duration of the estate is the life of someone other than the holder (the cestui que vie).[4] In the latter case, the cestui que vie could be two persons and the duration of the estate could be until one dies or both have died.[5] A life estate can be made to determine or be subject to conditions, such as determining upon marriage or bankruptcy or upon the tenant ceasing to reside in the property.[6]
[4] See Peter Butt Land Law 6 ed (2010) [10 01]-[10 09]. Other forms are dower and curtesy but they are both now obsolete: see [10 10]-[10 19].
[5] See Charles Harplum, Stuart Bridge and Martin Dixon Megarry & Wade: The Law of Real Property 7 ed (2008) [3-087]; Charles Sweet Challis’s Law of Real Property 3 ed (1911) page 356.
[6] See Charles Harplum, Stuart Bridge and Martin Dixon Megarry & Wade: The Law of Real Property 7 ed (2008) [3-088]; Peter Butt Land Law 6 ed (2010) [10 02.]
A lease for life is a leasehold interest at common law.[7] Like other leasehold interests, historically it was regarded as a chattel (a chattel real) but the important historical distinctions between freehold and leasehold interests have now been eliminated.[8] A lease for life is contractual in nature; whereas a life estate may be created by a unilateral disposition (such as a will or disposition inter vivos).[9] While a lease for life is usually for the life of the tenant, there appears to be no reason in principle why it could not be a lease for the life of another.[10]
[7] See Peter Butt Land Law 6 ed (2010) [15 38.1].
[8] See Peter Butt Land Law 6 ed (2010) [5 17], [6 16]-[6 17].
[9] See Peter Butt Land Law 6 ed (2010) [15 38.1]; Borambil Pty Ltd v O'Carroll [1972] 2 NSWLR 302 at 305-307 per Jacobs JA (with whom Holmes and Moffitt JJA agreed).
[10] There is a prima facie rule that a lease be of certain duration: see Peter Butt Land Law 6 ed (2010) [15 07]. However there are several exceptions, qualifications or clarifications of this rule, including a tenancy at will or at sufferance, a periodic tenancy and a lease for life: see Peter Butt Land Law 6 ed (2010) [15 07]; Re Midland Railway Company Agreement v British Railways Board [1971] Ch 725 at 731-732 per Russell, Fenton Atkinson and Cross LJJ; Greco v Swinburne Ltd [1991] 1 VR 304 at 313-316 per Gobbo J; Haslam v Money for Living (Aust) Pty Ltd [2008] FCA 1536, (2008) 172 FCR 301 at [23] per Middleton J.
Where a contract creates an interest for life, it is a question of construction whether it is objectively intended to create a life estate or a lease for life.
A licence is a more limited right in respect of property. The Commissioner’s case is that the Sotirianakos only had a licence revocable at will. The parties do not expressly address the question whether, if the Sotirianakos had an irrevocable licence to occupy the Property for life, this would amount to an interest in land under the general law or under the definition of “interest in land” in subsection 6(1) of the Act. I note that there is some authority that an irrevocable licence can give rise to an equitable interest in land[11] and it may be arguable that in any event an irrevocable licence is capable of falling within the second limb of the definition of “interest in land” in subsection 6(1) of the Act as a right over or in connection with land. However this case can be determined on the assumption that an irrevocable licence does not create an interest in land and I proceed on that assumption.
[11] See Binion v Evans [1972] 1 Ch 359 at 367 per Lord Denning MR.
The distinction between a lease and a licence is that a lease confers a right to exclusive possession and a licence does not.[12] It does not depend on the intention of the parties.[13]
[12] See Peter Butt Land Law 6 ed (2010) [15 13]-[15 15]; Radaich v Smith (1959) 101 CLR 209 at 214 per McTiernan J, 217 per Taylor J and 222-223 per Windeyer J.
[13] See Peter Butt Land Law 6 ed (2010) [15 13]-[15 15]; Radaich v Smith (1959) 101 CLR 209 at 214 per McTiernan J, 217 per Taylor J and 222-223 per Windeyer J.
It has been held that the distinction between a life estate and a licence depends on the objective intention of the grantor or parties as the case may be.[14] Where the estate/licence is created by a written instrument (such as a will or written contract), the objective intention is ascertained by construction of the instrument.
[14] See for example Re Keenan (1913) 30 WN (NSW) 214 at 215 per AH Simpson CJ in Eq. See Peter Butt Land Law 6 ed (2010) [10 06].
There are two different lines of authority as to the distinction between a life estate and a licence. One line is exemplified by May v May[15] in which it was held that, a will on its proper construction giving the wife of the fee simple owner a right to reside in the property for life but not a right to rent it out, the will created a licence rather than a life estate. The other line is exemplified by Bannister v Bannister[16] in which it was held that, an oral contract on its proper construction giving the sister-in-law of the fee simple owner a right to reside in the property for life but not a right to rent it out, the contract created a life estate determinable if she ceased to reside in the property rather than a licence.
[15] (1881) 44 LT 412 at 413 per Fry J. See also for example White v Arizon Pty Ltd [2003] NSWSC 1051 at [20]-[24] per Young CJ in Eq.
[16] [1948] 2 All ER 133 at 136 per Scott and Asquith LJJ and Jenkins J. See also for example Binion v Evans [1972] 1 Ch 359 at 370 per Megaw LJ and 373 per Stephenson LJ.
The Sotirianakos contend that pursuant to the terms of the contract they had a right to rent out the Property and the entitlement under the contract was not contingent upon their continuing to reside in it. Conversely, the Commissioner contends that pursuant to the terms of the contract the Sotirianakos had only a right to reside in the Property and no right to rent it out and this indicates that they had a mere licence and not a life estate.
I have concluded above that it was a term of the contract that the Sotirianakos were to have exclusive possession of the Property during the collective lives of Vasilios and Angeliki and that this encompassed the right to rent it out and if they chose to move out of the Property their rights and obligations under the contract (including their right to possession) would continue. Accordingly, on the assumption that I should follow the May v May line of authority rather than the Bannister v Bannister line of authority and on the further assumption that the distinction between a life estate and a licence depends on the objective intention of the parties, the Sotirianakos were granted a life estate and not a licence.
For the sake of completeness, I make three observations which are not necessary for my decision:
1.I prefer the Bannister v Bannister line of authority over the May v May line of authority. Because it is well established that a life estate can be made determinable upon the holder ceasing to reside in the property, the mere fact that the holder does not have a right to rent out the property does not indicate that there has been no grant of a life estate but only the grant of a licence.
2.It may be doubted whether it is still good law that the distinction between a life estate and a licence depends on the objective intention of the grantor or parties as the case may be. Since the High Court decided in Radaich v Smith that a licence does not confer a right to exclusive possession, it may be arguable that a relationship cannot be a licence (as opposed to a life estate) if the relevant party has exclusive possession.
3.It is not necessary to decide whether the Sotirianakos had a life estate or lease for life. Either interest is clearly an interest in land both under the general law and under the Act.
Need for writing
Subsection 30(1) of the Law of Property Act 1936 (SA) provides that all interests in land created by parol and not put in writing and signed by the persons creating them have the force and effect of interests at will only.
However subsection 31(d) provides that nothing in section 30 affects the operation of the law relating to part performance.
The Commissioner accepts that the taking of possession of the Property by the Sotirianakos, the payment of outgoings and the making of renovations and maintenance amount to part performance for this purpose. The Commissioner accepts that the fact that the contract was not in writing does not prevent the Sotirianakos having acquired an interest in land in 1996 if they otherwise would have acquired such an interest.
Conclusion
The Sotirianakos acquired an interest in the Property in 1996 being a life estate or a lease for life.
Assessment of value
Subsection 22B(a) of the Act provides that a person is entitled to compensation for the acquisition of land under the Act if his or her interest in land is divested or diminished by the acquisition. The Sotirianakos’ interest in the Property was divested by the acquisition.
Section 25(1)(b) proceeds on the basis that, where an interest in land is divested, ordinarily compensation will be assessed by reference to:
(i)the actual value of the land that is divested (actual value); and
(ii)the loss occasioned by reason of severance, disturbance or injurious affection (collectively disturbance).
The Sotirianakos contend that the actual value of their interest in the Property is to be assessed as at the date of acquisition on the basis that their life interest would have continued for 5.26 years after the acquisition based on the average life expectancy of an 87 year old male.
The Commissioner contends that the value of the Sotirianakos’ interest in the Property should be assessed having regard to the fact that but for the acquisition their life interest would in fact only have continued for 15 months because that is the length of time that Vasilios lived after the acquisition. The Commissioner put this submission in different ways; initially contending that the assessment should be undertaken with the wisdom of hindsight and later contending that even on a prospective assessment regard should be had to the fact that Vasilios died 15 months after the acquisition.
The Commissioner contends that, by reference to Vasilios’ state of health as at the date of acquisition, the value should be assessed on the basis that his life expectancy was substantially less than the average for an 87 year old male.
Prospective or retrospective assessment
The question whether the assessment of actual value should be undertaken as at November 2015 based on the future prospects as at that date (a prospective assessment) or based on the wisdom of hindsight as to what actually occurred (a retrospective assessment) turns on the proper construction of section 25 of the Act.
The Commissioner’s initial contention was that when damages are assessed at common law, they are usually assessed as at the date of the wrong but taking into account events which have since occurred[17] and the same approach is to be taken to an assessment of value under section 25 of the Act.
[17] Citing HTW Valuers v Astonland Pty Ltd [2004] HCA 54; (2004) 217 CLR 640 at [45] per Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ; Great Wall Resources Pty Ltd v O'Sullivan [2009] NSWCA 119 at [21] per Macfarlan JA (with whom Giles and Ipp JJA agreed); Australian Executor Trustees Limited v Propell National Valuers (WA) Pty Ltd [2011] FCA 522 at [119] per Barker J; Propell National Valuers (WA) Pty Ltd v Australian Executor Trustees Limited [2012] FCAFC 31; (2012) 202 FCR 158 at [4]-[9] per Stone J and [80]-[81] per Collier J.
It may be accepted that when damages are assessed at common law, they are usually assessed taking into account events that have since occurred, although this approach is not universal and the ultimate touchstone is that the damages should place the plaintiff in the same position as if the breach had not occurred. However, the question of the approach to be taken to an assessment of value under section 25 of the Act depends on the proper construction of that provision.
Subsection 25(1) relevantly provides:
25—Principles of compensation
(1)The compensation payable under this Act in respect of the acquisition of land shall be determined according to the following principles:
(a) the compensation payable to a claimant shall be such as adequately to compensate him for any loss that he has suffered by reason of the acquisition of the land; and
(b) in assessing the amount referred to in paragraph (a) of this section consideration may be given to—
(i) the actual value of the subject land; and
(ii)the loss occasioned by reason of severance, disturbance or injurious affection; and
(c) compensation shall be fixed as at the date of acquisition of the land; and
(d) where the claimant's interest in the subject land was liable to expire or be determined, any reasonable prospect of renewal or continuation of the interest must be taken into account; and
…
(i) where the land is, and but for acquisition would continue to be, devoted to a particular purpose, and there is no general demand or market for land devoted to that purpose, the compensation may, if reinstatement in some other place is bona fide intended, be assessed on the basis of the reasonable cost of equivalent reinstatement; and
Section 25(1)(b) proceeds on the basis that compensation will be assessed separately in respect of the actual value and disturbance (which is a form of consequential loss). Section 25 has been interpreted to mean that it is mandatory to assess the actual value and (where applicable) disturbance: the word “may” being used to indicate that the compensation is not limited to these two matters rather than that it is optional to assess the actual value and any disturbance.[18]
[18] See for example Commissioner of Highways v George Eblen Pty Ltd (1975) 10 SASR 384 at 390 per Wells J.
In respect of the actual value, section 25(1)(b)(i) and (c) read together suggests that the assessment of the actual value of the interest in land is to be made based on the position as at the date of acquisition without regard to subsequent events. The use of the adjective “actual” emphasises this in the context in which the assessment must be fixed as at the date of acquisition.
Section 25(1)(d) reinforces this construction because it refers to the prospect of renewal or continuation (as at the date of acquisition) rather than the subsequent fact of renewal or non-renewal or continuation or non-continuation.
Section 25(1)(i) reinforces this construction because, for the purpose of assessing the reasonable cost of equivalent reinstatement, it is necessary to assess the condition of the land and this must be the condition of the land as at the date of acquisition.
Both the text and context of the relevant provisions suggest that the assessment of the actual value is to be made based on the position as at the date of acquisition without regard to subsequent events.
Turning to evident purpose, the evident purpose of the provision is that, subject to consequential losses, the owner of an interest in land that is acquired will be paid the actual value of the land as at the date of acquisition and this value will not be affected by events occurring subsequent to the acquisition (as opposed to information later discovered about conditions unknown at the time of acquisition).
It may be accepted that section 25(1)(a) provides an overall principle that the claimant be compensated for any loss suffered by reason of the acquisition but this does not detract from the meaning or operation of section 25(1)(b)(i) for the reasons given above. It may also be accepted that the mere fact that section 25(1)(c) provides for compensation to be fixed as at the date of acquisition does not necessarily dictate that subsequent events cannot be taken into account because the general approach of the common law is that damages are assessed as at the date of the wrong and yet subsequent events are often taken into account. However, when section 25 is construed as a whole in context and by reference to its evident purpose, there is a clear legislative intention that subsequent events are not to be taken into account in assessing actual value. The position may be contrasted with that in respect of disturbance (or other consequential loss), in which case the disturbance necessarily arises after the date of acquisition.
There are only two relevant authorities cited by the parties in relation to section 25. Before turning to them, I first consider the judgment of the High Court in The Adelaide Fruit and Produce Exchange Co Ltd v Adelaide Corporation[19] concerning section 12 of the Compulsory Acquisition of Land Act 1925 (SA). Section 12 was the predecessor of section 25 of the Act. Section 12(1)(a) related to the value of the land taken and section 12(1)(b) and (c) related to consequential loss which was similar to the dichotomy in subsection 25(1)(b) between actual value and disturbance. Subsection 12(2) provided that value was to be assessed twelve months before the giving of the notice to treat but was otherwise similar to section 12(1)(c). The land was acquired in 1950 (to be assessed as at 1949) but compensation was not assessed until 1960. The High Court contrasted section 12(1)(a) with section 12(1)(b) and (c), holding that the latter provided for a retrospective approach and implicitly that the former provided for a prospective approach. Dixon CJ, Fullagar, Kitto, Menzies and Windeyer JJ said:
It is to be observed, too, that it is only with respect to the value of the land that it is expressly provided regard shall be had to its value as at the beginning of a period of twelve months from the giving of the notice to treat and in the absence of r (9) this might raise some question about the time as at which damage by reason of severance, &c. is to be assessed and the time as at which enhancement is to be determined. Rule (9), however, confines the provisions of r (2) to determining the value of the land taken and r (2) has no application in the determination of the other items that must be taken into account in assessing the compensation payable. Although r (9) does not expressly refer to the land taken, when it is read in conjunction with rr (1), (2) and (8) there is not very much room for doubt that that is what it means. The determination of damages for severance or for the effect of the execution of works upon adjoining lands and the determination of enhancement are not, therefore, subject to the rule that the beginning of the period of twelve months prior to the giving of the notice to treat is the relevant date. Such matters must be determined as at the time when compensation is assessed and whatever information is then available may be taken into account in making these determinations. In this case the value of the land taken was assessed in May 1960 as at April 1949, and damages for severance and the deduction for enhancement were assessed as at May 1960. In this Ross J was correct.[20]
[19] (1961) 106 CLR 85.
[20] At 90.
In South Australian Land Commission v Bletas[21] Wells J drew the same distinction in respect of section 25(1)(b)(i) and (ii) of the Act. Wells J said:
The dominating principle is stated in paragraph (a) of s 25, which reads: 'The compensation payable to a claimant shall be such as adequately to compensate him for any loss that he has suffered by reason of the acquisition of the land.' Broadly speaking, that loss falls under two headings: first of all, there is the actual value of the land taken, which must be fixed as at the date of acquisition; and then there are other losses which are occasioned by reason of the taking and which may be placed under the headings of severance, disturbance, injurious affection, or any other loss. The categories, however, are not closed. One thing about the other losses, ie other than the loss of the subject land, is that they are assessed prospectively. One looks initially at the date of acquisition, but then one is allowed to take into account things that have happened after the date of acquisition: that is a principle that has been well confirmed by decisions of this and many other courts.[22]
[21] (1978) 77 LSJS 344.
[22] At 347.
In Kerry v State Transport Commission[23] Matheson J approved this passage saying:
Section 25(c) provides that compensation shall be fixed at the date of acquisition of the land, but this does not necessarily apply to items such as disturbance. I refer to South Australian Land Commission v Bletas…[24]
[23] (1985) 38 SASR 502.
[24] At 509.
There are decisions of intermediate appellate courts interstate in which the same distinction drawn by Wells J and Matheson J was drawn in respect of broadly comparable legislation. While each statutory provision must be construed by reference to its own text, context and evident purpose, the statutory provisions considered in those cases were sufficiently comparable that the decisions have persuasive force in respect of the South Australian provision.
In the seminal case of Housing Commission of New South Wales v Falconer[25], the New South Wales Court of Appeal considered the approach to the assessment of value and consequential loss under the Public Works Act 1912 (NSW). The first part of section 124 was expressed in similar terms to section 25(1)(b)(i) of the Act; the second part was expressed in similar terms to section 25(1)(b)(ii) of the Act; and the third part was expressed in similar terms to section 25(1)(c) of the Act. The Court of Appeal held that subsequent events could not be taken into account in assessing the value, distinguishing (in the case of Glass and Mahoney JJA) the position in respect of ordinary value from the position in respect of consequential loss. Hope JA said:
[25] [1981] 1 NSWLR 547.
This question has to be considered in the light of the principle that this compensation has to be assessed by reference to what additional amount a prudent purchaser in the position of the owner would have found it worth his while to pay sooner than fail to obtain the land. There thus has to be considered not what a prudent purchaser in the position of the owner would pay after he had obtained a knowledge of all the circumstances that in fact occurred after the date of resumption, but what a person in his position would pay in the light of knowledge available at the time of the resumption…
… a prudent purchaser, properly advised, would have anticipated a significant rise in building costs… Accordingly a prudent purchaser would have taken into account the probability, indeed certainty, of increasing building costs. The Court would not be concerned here, as it has been in ordinary damages cases, to determine what the amount of those inflated costs would be; it would be concerned with what a prudent purchaser would do in the knowledge that there had been a sudden and very large growth of inflation which was likely to continue.[26]
[26] At 557, 558.
Glass JA said that:
… the following propositions constitute part of the relevant law.
…
5. In relation to both market value and special value, events subsequent to the resumption are of no relevance except to the extent that they provide some evidence of what was foreseeable by the owner in calculating what he would have accepted or offered at the time of resumption.
6. The compensation recoverable could also extend to consequential losses suffered over and above the market value of the land such as costs of removal, loss of profits, etc. Actual losses caused by the forced acquisition are described as claims for disturbance…. Subsequent events were necessarily relevant to such claims.[27]
Mahoney JA said:
In determining the effect which may be given to events occurring subsequently to the date of resumption, it is necessary to draw certain distinctions.
There are some cases in which the theory or principle on which the compensation is to be assessed prevents regard being had to subsequent events. Thus, where the compensation which is to be given is measured by the ordinary market price of the property taken, the principle on which that market price is to be determined prevents (or at least restricts) reference to subsequent events. That market price is the price acceptable to a willing but not anxious vendor and purchaser on the relevant date. Such persons are to be taken to know what an appropriately informed person would know on that date. That being the principle, it follows that such persons (and the court, as determining what they would have done) cannot be seen as knowing more. The price which such persons would accept at that date will be affected by the uncertainties as at that date, as to, for example, the future demand for land at the relevant time, future decisions of zoning authorities, and the like. Those uncertainties and the effect of them on the postulated vendor and purchaser help to determine what price will be found acceptable. In that regard, therefore, evidence of what subsequently has occurred in relation to such matters may not ordinarily be referred to…
The amounts here in question are of the third kind [an amount which is given to the dispossessed owner (whether called disturbance or by some other name) because of the special value which the property has for him as owner of it]. Amounts of this kind are not given because they are part of the market price of the land. If this be so, then the reasons which, in the case of market price compensation restrict reference to subsequent events, do not apply. As a general rule, the courts prefer facts to prophecy, particularly if the prophecy is based on artificial assumptions, and it is therefore necessary to consider whether there are any other reasons why, in quantifying the amounts here in question, the courts should not have regard to events subsequent to the resumption.[28]
[27] At 563. (Citations omitted)
[28] At 576-577. (Citations omitted)
In Brisbane City Council v Mio Art Pty Ltd[29] the Queensland Court of Appeal considered the approach to the assessment of value and consequential loss under the Acquisition of Land Act 1967 (Qld). The chapeau to subsection 20(1) was expressed in similar terms to section 25(1)(b)(i) of the Act; paragraphs 20(1)(a) and (b) were expressed in similar terms to section 25(1)(b)(ii) of the Act; and subsection 20(2) was expressed in similar terms to section 25(1)(c) of the Act. On the date of acquisition, the relevant planning instruments limited development to a maximum of ten storeys. Three or four months after the date of acquisition a new planning instrument (Kurilpa 2) was issued which permitted development to a maximum of 12 storeys. The President of the Land Court at first instance held that the subsequent event could not be taken into account in assessing value. This decision was overturned by the Land Appeal Court but that decision was in turn overturned by the Court of Appeal which upheld the decision of the President that subsequent events could not be taken into account in assessing value. Fryberg J (with whom Margaret McMurdo P and Fraser JA agreed) distinguished decisions holding that subsequent events could be taken into account in assessing disturbance and consequential loss, saying:
None of the cases discussed demonstrates that events subsequent to the date of acquisition can be taken into account in assessing market value.
…The Spencer test postulates hypothetical parties in full possession of knowledge generally available on the date of acquisition. That knowledge includes knowledge of future possibilities, but only as possibilities, and with the weight which prudent persons would ascribe to them. It is difficult to imagine how the fact that a possibility subsequently became a reality could be directly relevant to that knowledge.
I see no inconsistency between this approach and that which enables subsequent sales to be taken into account in assessing market price. Those sales are not taken into account as matters which would be present in the minds of the hypothetical parties. They are simply evidence of an event from which an inference can be drawn about the position at an earlier (but not very much earlier) time. The implicit assumption is that nothing material has changed in the meantime or that if it has, allowance can be made for the change. Consequently they are probative of the earlier position. to prove what would have been known by the hypothetical vendor and purchaser…
… The President held that a prudent purchaser would have been aware that Kurilpa 1 was under review, but not aware of the content of the review. The subsequent publication of Kurilpa 2 could not affect that finding.
The Land Court did not err in excluding Kurilpa 2 from consideration in assessing the market value of the land acquired by the Council.[30]
[29] [2011] QCA 234, (2011) 183 LGERA 352.
[30] At [77]-[81].
In the different context of duty payable on a life estate passing under a will, the High Court has held that the life estate should be valued on a prospective rather than retrospective basis. In Weldon (Commissioner of Taxes for Victoria) v The Union Trustee Company of Australia Ltd[31] the estate of Mrs Jameson was subject to a life estate in favour of Mrs Twomey. Mrs Twomey’s life expectancy based on her age and gender as at Mrs Jameson’s death was substantial but Mrs Twomey in fact died only 12 weeks after Mrs Jameson. The High Court held that regard could not be had to the fact that Mrs Twomey died prematurely compared to her life expectancy. Knox CJ (with whom Isaacs, Rich and Starke JJ agreed) said:
In my opinion the Supreme Court was clearly right in rejecting the contention of the present appellant that, in valuing the interest of Margaret Jameson under the will of Timothy Twomey deceased, the fact that Mrs Twomey, the annuitant under that will, died twelve weeks after Margaret Jameson should be taken into consideration. The value of Margaret Jameson's interest was to be ascertained at the date of her death, and, in my opinion, only the facts and circumstances existing at that time should be taken into consideration in valuing it.[32]
[31] (1925) 36 CLR 165.
[32] At 168.
This decision was followed in Trustees Executors and Agency Company Limited v The Commissioner of Taxes (Victoria).[33]
[33] (1941) 65 CLR 33 at 36-37 per Rich ACJ; 38 per Starke J and 40-41 per Williams J: see [106] below.
A consideration of the decided authorities (albeit in most cases in the context of different legislation) supports the construction of section 25 of the Act derived from its text, context and evident purpose.
I conclude that section 25 requires the assessment of the actual value of the interest in land to be made based on the position pertaining as at the date of acquisition without regard to subsequent events. In some cases this approach will result in a higher value and in other cases it will result in a lower value than a retrospective assessment.
The assessment of actual value should be undertaken as at November 2015 based on the future prospects as at that date (a prospective assessment).
Vasilios’ state of health
The Commissioner contends that, by reference to Vasilios’ state of health as at the date of acquisition, the value should be assessed on the basis that his life expectancy was substantially less than the average for an 87 year old male.
Tony was asked in cross-examination about Vasilios’ state of health. He said that Vasilios was well until he had a fall at home in 2016, broke his hip, was admitted to hospital and suffered a stroke in hospital, resulting in his being admitted to a nursing home. He said that Vasilios had had an earlier stroke in September 2015, as a result of which he was admitted to hospital and he also had high blood pressure/a heart condition. He referred at one point in his evidence to Vasilios having suffered strokes (plural) which might be construed as referring to the position before he broke his hip in 2016 but on balance I find that he gave evidence of only one stroke before Vasilios broke his hip in 2016. No further evidence was adduced about Vasilios’ state of health and no medical evidence was adduced about his state of health.
The Commissioner submits based on this evidence that Vasilios had a lower life expectancy as at November 2015 than an average 87 year old male. The Commissioner did not plead this answer in his defence.
In Trustees Executors and Agency Company Limited v The Commissioner of Taxes (Victoria)[34] Mr Dunne left a life estate to his wife. They were both fatally injured in a motor vehicle collision, Mr Dunne dying half an hour before Mrs Dunne. The High Court held that the value of the life estate was to be assessed at the time of Mr Dunne’s death by reference to the inevitability that Mrs Dunne would die within a short period thereafter rather than with the wisdom of hindsight that she in fact died half an hour later. The value was not to be assessed on the assumption that Mrs Dunne would have an average life expectancy because it was known that she was fatally injured at the time of Mr Dunne’s death. Williams J said:
The question at issue between the appellants, who are the executors of the will, and the respondent Commissioner of Taxes is whether the value of the widow's life estate should be calculated for the purposes of duty on the actuarial basis that she would reach an age based on the ordinary probabilities of life and death ascertained from tables of mortality appropriate in the particular case; or whether the valuation is one of fact having regard to all the circumstances existing at the material date, namely, the instant the testator died.
In my opinion the latter method is correct. It would not, however, be feasible or decent to make a medical examination of the health of every life tenant and annuitant whose interest has to be valued. In any event the examination would usually be futile, because expert opinion would probably vary as to the likelihood of and the extent to which the state of health would affect his or her normal expectation of life. In every apparently normal case, therefore, the ordinary and sensible practice is to estimate the duration of the interest on an actuarial basis. Where, however, the life is at the material instant of time subject to some disability which destroys the probability that it will run its normal course, it would be opposed to all reality to assume that such a life would do so. To take the extreme case of a young life tenant condemned to be executed half an hour after the testator's death, could it possibly be said there was at that instant of time any reasonable probability that he would live another forty years? A similar situation would arise where the life tenant was suffering from an incurable disease such as advanced tuberculosis or cancer.[35]
[34] (1941) 65 CLR 33.
[35] At 40.
There is a presumption that a life tenant had an average life expectancy for a person of that age and gender and the onus lies on a party contending otherwise to prove otherwise.
In the present case the Commissioner has not discharged the onus of proving that Vasilios’ life expectancy as at November 2015 was less than (or different to) the average. Many 87 year olds have suffered a stroke by the time they attain that age and many have high blood pressure/a heart condition. Many 87 year olds have other conditions (whether congenital, diseases or injuries) of which there is no evidence that Vasilios suffered. In the absence of comprehensive evidence about Vasilios’ state of health and expert medical evidence, there is no basis for me to find that Vasilios’ life expectancy was other than average.
The Commissioner relies on the fact that Vasilios lived for only 14 months after the acquisition as prima facie evidence that this was his life expectancy as at the date of the acquisition. I am not prepared to draw this inference. There are many reasons why people die earlier or later than their life expectancy as at an earlier date. For example, it is simply unknown whether the fall and stroke suffered by Vasilios in 2016 after the acquisition caused a substantial reduction in his life expectancy. Again, in the absence of comprehensive evidence about Vasilios’ state of health and expert medical evidence, there is no basis for me to find that Vasilios’ life expectancy was other than average.
In any event, in the circumstances in which the Sotirianakos had served Mr Brett’s actuarial report and were plainly relying on an actuarial approach to Vasilios’ life expectancy, if the Commissioner wished to contend that a different approach should be taken due to Vasilios’ state of health, it was incumbent on the Commissioner to give advance notice of that contention (whether by pleading or otherwise) to give the Sotirianakos an opportunity to adduce relevant evidence. In the circumstances, the Commissioner ought not to be permitted to advance this contention.
Calculation of present value
It is common ground that the market rental of the Property as at November 2015 was $18,200 per annum as valued by Mr Pamula.
It is common ground that outgoings borne by the Sotirianakos that would normally be borne by the landlord under a market rental should be deducted. It is common ground that Mr Pamula correctly calculated this deduction subject to two alterations. First Mr Pamula mistakenly overstated fixed water and sewer rates by $30 per annum. Secondly the figure of $400 for actual water usage should not be deducted. These two adjustments result in a net annual advantage of $16,091.50 which converts to a net monthly advantage of $1,340.96.
It is common ground that, if (as I have held) Vasilios’ life expectancy is to be assessed prospectively and assessed on the basis that as at November 2015 he had an average life expectancy, the appropriate multiplier is 56.19 (being the present value of $1 per month for 5.26 years) as calculated by Mr Brett.
Applying a multiplier of 56.19 to $1,340.96 results in a present value of $75,348.54.
Offset for rent free accommodation provided to Rosa
It is agreed that there should be an offset of $4,550 being the value of the rent free accommodation provided by the Commissioner to Rosa for a period of three months.
Conclusion
The Sotirianakos are entitled to compensation of $70,798.54. I will hear the parties as to consequential orders.
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