Spyropoulos v Commissioner of Highways; Spyropoulos v Commissioner of Highways - [2018] SASC 195

SUPREME COURT OF SOUTH AUSTRALIA
(Land and Valuation Division)
SPYROPOULOS v COMMISSIONER OF HIGHWAYS; SPYROPOULOS v COMMISSIONER OF HIGHWAYS
[2018] SASC 195
Judgment of The Honourable Justice Parker
19 December 2018
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - ASSESSMENT - SPECIAL VALUE
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - ASSESSMENT - DISTURBANCE
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - PROCEEDINGS FOR COMPENSATION - SOUTH AUSTRALIA
This judgment deals with two separate applications for compensation made under the Land Acquisition Act 1969 (SA).
On 10 July 2014, the Commissioner of Highways compulsorily acquired from the two respective applicants adjacent parcels of land at 220 and 222 South Road, Croydon 5008. Following a dispute concerning valuation of the two properties, compensation in the amount of $405,000 was paid to each applicant.
Each of the applicants now claim for additional compensation on account of disturbance, and also claim based upon the special value that the respective properties are said to have for the applicants.
Held, per Parker J, dismissing the applications:
1. In considering special value, it is appropriate to proceed on the basis that a hypothetical developer would offer a price for the subject land that minimised their financial risks (at [46]-[47]).
2. The Court must approach the assessment of special value on the basis that the hypothetical purchaser would not pay, in addition to the market value, more than the provable commercial value to them of the special advantages the land has to them (at [48]-[53]).
3. This Court is not bound by decisions of the Queen’s Bench or Privy Council. However, they carry considerable weight (at [74]).
4. This Court is not bound by a decision of a single Judge of the High Court of Australia. However, it is “of the greatest persuasive authority” and is “entitled to the greatest respect” (at [94]-[96], [101]).
5. This Court should follow the decision of an intermediate appellate court in another Australian jurisdiction unless persuaded that it is clearly wrong (at [101]).
6. Neither the Victorian authorities, nor the approach of Jacobs J in Albany v Commonwealth are plainly wrong (at[103]).
7. Costs of acquiring replacement properties are not the "natural, direct and reasonable consequence" of acquisition, where the subject land was not part of a person's stock-in-trade as an investor (at [102]).
Land Acquisition Act 1969 (SA); Land Acquisition (Just Terms Compensation) Act 1991 (NSW) s 59; Lands Acquisition Act 1989 (Cth) s 55; Land Acquisition and Compensation Act 1986 (Vic) s 40, referred to.
Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575; Arkaba Holdings Ltd v Commissioner of Highways [1970] SASR 94; De Ieso v Commissioner of Highways (1981) 27 SASR 248; Spencer v Commonwealth (1907) 5 CLR 418; Yates Property Corp Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156; Commissioner of Highways v Tynan (1982) 53 LGRA 1, applied.
Brewarrana Pty Ltd v Commissioner of Highways (1973) 4 SASR 476, distinguished.
Pastoral Finance Association Ltd v Minister [1914] AC 1083; Commissioner of Highways v Shipp Bros Pty Ltd (1978) 19 SASR 215; Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia (1947) 74 CLR 358; Valentini v City of Salisbury (1997) 69 SASR 332; Sydney Water Corporation v Caruso (2009) 170 LGERA 298; Mitchell v Roads and Traffic Authority (NSW) (2008) 164 LGERA 375; McBaron v Roads and Traffic Authority (NSW) (1995) 87 LGERA 238; Burns v Eurobodalla Shire Council [2006] NSWLEC 677; Bronzel v State Planning Authority (1979) 21 SASR 513; Electricity Trust of South Australia v O’Leary (1986) 42 SASR 26; Minister v Spellman (1963) 9 LGRA 387; Harvey v Crawley Development Corporation [1957] 1 QB 485; Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111; Banno v Commonwealth (1993) 45 FCR 32; Blacktown Council v Fitzpatrick Investments [2001] NSWCA 259; Cannavo v Roads and Traffic Authority (NSW) (2004) NSWLEC 570; Secretary to the Department of Economic Development, Jobs, Transport and Resources v Manor Lakes (Werribee) Pty Ltd [2016] VSC 358; Secretary to the Department of Economic Development, Jobs, Transport and Resources v Manor Lakes (Werribee) Pty Ltd (2017) 224 LGERA 115; Minister of Environment v Petroccia (1982) 30 SASR 333; Melbourne City Link v Teford Pty Ltd (2001) 113 LGERA 102; Redwood Court Pty Ltd v Roads Corporation (1992) 76 LGRA 358; Kennedy Street Pty Ltd v Minister (1962) 8 LGRA 221; Chapman v Minister (1966) 13 LGRA 1; Coastal Estates Pty Ltd v Bass Shire Council [1993] 2 VR 566; Albany v Commonwealth (1976) 12 ALR 201; Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499; Bone v Commissioner of Stamp Duties [1972] 2 NSWLR 651; R v Falzon (2018) 92 ALJR 701, considered.

SPYROPOULOS v COMMISSIONER OF HIGHWAYS; SPYROPOULOS v COMMISSIONER OF HIGHWAYS
[2018] SASC 195

PARKER J: This judgment deals with two separate applications for compensation made by Spiro Spyropoulos and Vasiliki Spyropoulos under the Land Acquisition Act 1969 (SA). The two applications were heard concurrently.
On 10 July 2014 the Commissioner of Highways compulsorily acquired from the respective applicants adjacent parcels of land at 220 and 222 South Road, Croydon 5008. The whole of each allotment was acquired for the purpose of widening South Road as part of the Torrens to Torrens project.
The parties were originally in dispute concerning the valuation of the two properties. The respondent initially offered compensation of $370,000 for acquisition of each of the two properties. However, following a conference between the valuers for the parties it was agreed that compensation of $405,000 should be paid for the acquisition of each property. That sum has been paid by the respondent to each applicant. It has also been agreed between Spiro Spyropoulos and the respondent that he was entitled to compensation of $780 for loss of rent. The applicants have not pursued their initial claim for compensation based upon a rising market.
Each of the two applications involves a claim for additional compensation on account of disturbance and also a claim based upon the special value that the respective properties are said to have for the applicants under the principle in Pastoral Finance Association Ltd v Minister.[1]
[1] [1914] AC 1083 at 1088.
Evidence
The valuation reports referred to below indicate that the two houses at 220 and 222 South Road were both built in about 1920. The design and condition of the two houses was very similar. The dimensions of each site were identical with both comprising 595 square metres. Given the close similarity between the two properties, the valuation reports have consistently assigned the same value to each property.
The applicants tendered an expert valuation report prepared by Mr Paul Tilley dated 7 November 2017. Mr Tilley dealt with both properties in his report.
The respondent tendered separate reports for each property prepared by Mr Stan Pamula, both dated 12 June 2014. The respondent also relied upon two supplementary reports provided by Mr Pamula dated 12 December 2017 and 1 August 2018 and a document entitled Planning Review of Development Potential – Sites: 220-222 South Road, Croydon prepared by AECOM Australia Pty Ltd dated 25 September 2014.
The experts were not required to give oral evidence. As the parties are not now in dispute about the market value of the properties, it is unnecessary to refer in any detail to that aspect of the reports prepared by Mr Tilley and Mr Pamula.
Prior to the matter coming to trial, Mr Spyropoulos abandoned a contention that the subject land was part of his stock in trade as a developer. He did so after the respondent sought an order for discovery of documents relevant to that contention. Ms Spyropoulos had not advanced such a contention.
Evidence of Mr Paul Tilley
Mr Tilley stated in his report dated 7 November 2017 that each of the properties had a market value of $430,000 as at 10 July 2014, i.e. the date of acquisition. He applied the direct comparison approach.
Mr Tilley annexed to his report advice prepared by a Mr Bill Stefanopoulos, a town planning consultant, dated 19 July 2014 concerning the potential for redevelopment of the two parcels of land as one site. Mr Stefanopoulos considered that there was potential to erect eight medium density dwellings on the combined site. He came to that conclusion after considering the City of Charles Sturt Development Plan.
In light of Mr Stefanopoulos’ advice that there was potential to build eight dwellings on the combined site, Mr Tilley considered that the potential yield would be $920,000. However, that figure was adjusted downwards by $25,000 so as to recognise the risk associated with obtaining planning approval and associated fees. Thus, Mr Tilley concluded that the value of the combined site was $895,000.
Evidence of Mr Stan Pamula
In his reports dated 12 June 2014, Mr Pamula valued each of the two properties at $370,000 as at the date of the reports. As with Mr Tilley, his opinion was based upon the direct comparison approach.
Mr Pamula interpreted the City of Charles Sturt Development Plan as only permitting the development of four dwellings on the combined site. In that light he considered that consolidation of the two allotments would not give the combined site a greater value than the two properties considered separately.
Mr Pamula was subsequently provided with a planning report prepared by AECOM Australia Pty Ltd dated 25 September 2014. This report indicated that the Charles Sturt Development Plan would permit a maximum of four dwellings of two storeys to be developed on the combined site. After considering the AECOM report Mr Pamula adhered to his earlier advice that consolidation of the two allotments would not give the combined site a greater market value than the two properties sold separately.
The joint opinion of the valuers
After conferring, Mr Tilley and Mr Pamula signed a statement of agreement dated 19 February 2018. They agreed as follows:
·The market value of each of 220 and 222 South Road, Croydon as at 10 July 2014 (being the date of acquisition) was $405,000.
·Each of the dispossessed owners was entitled to a payment of $30,000 on account of disturbance.
·“The consolidated site has no greater value than the sum of the value of the individual properties.”
Clearly, as a result of the conference with Mr Pamula, Mr Tilley modified his earlier opinion about additional value based upon ownership by brother and sister with common development intentions.
Evidence of Spiro Spyropoulos
Mr Spyropoulos stated that he had been the registered proprietor since 7 January 1981 of the whole of the land at 222 South Road, Croydon. He had never lived in that property and had always rented it to tenants. He referred to it as his “root investment”. This was an important Greek cultural belief that served to remind him where his property investment and development career had begun. For that reason, the property has particular emotional importance for him.
Mr Spyropoulos also stated that he had been a full-time property investor and developer for the past 20 years, but had owned investment properties prior to that time. He listed 10 different property investments that he currently owns and a further 17 properties that he had owned and developed in the past. These comprised a mixture of houses, residential units, shops, offices, warehouses and vacant land.
Mr Spyropoulos further stated that he had always intended to redevelop his property in conjunction with his sister’s property at 220 South Road. He considered that the number of residential units that could be built on the land would be increased by use of a shared driveway and access to South Road. That would maximise the return on his and his sister’s investments.
While Mr Spyropoulos had not yet purchased a replacement property to cover the loss of 222 South Road, he intended to do so. He has taken a number of steps to locate a suitable alternative property. However, the identification of a replacement property was complicated by the need to find a replacement property adjacent to another property that could be purchased by his sister. That was necessary so that they could redevelop their properties together in the future. The capital gains tax (CGT) legislation also required that a replacement property should be similar in type and value to that which had been acquired.
Mr Spyropoulos stated in cross-examination that he considered that Mr Stefanopoulos’ advice was more credible than the report prepared by AECOM.
Although Mr Spyropoulos stated that he did not necessarily agree with the joint opinion of Mr Tilley and Mr Pamula that the value of 222 South Road was $405,000, he did not challenge their opinion. Nevertheless, he stated that the property was worth significantly more to him than $405,000. If he had been given the option, he would have paid more than $405,000 so as to retain 222 South Road. He stated that he based his opinion of special value on the following matters:
1The property at 222 South Road was always an investment. He had never resided there and never intended to do so. The property was always available to him for residential development as and when this could be done most profitably.
2He is an experienced property developer and had the knowledge, contacts and interest to redevelop the property in conjunction with his sister’s adjacent property.
3His sister would have relied upon his advice and expertise to assist in the redevelopment of her property in conjunction with his property.
4He would had benefitted from his sister’s work as a conveyancer so as to save considerable development costs.
5He would never have sold the property prior to redevelopment of the land. This was because of his personal affection for the property, having owned it since 1981, and his family history of owning properties in the vicinity.
6He was in an advantageous position because he was exempt from CGT upon the sale of the redeveloped premises at 222 South Road.
Mr Spyropoulos asserted that while he could not put a dollar figure upon the special value of the property, he conservatively considered it to be from 2.5% to 5% of the market value. He sought compensation in this amount.
Mr Spyropoulos stated that the asserted special value of 2.5% to 5% above the figure of $405,000 agreed by the valuers was based upon his knowledge as a property developer and his attendance at auctions. While he accepted what the valuers said, he did not think that their opinions actually reflected the market for developers. In his experience, having two properties side‑by‑side makes a property a lot more valuable than a standalone house, due to the wider variety of things that can be done with it.
The evidence of Mr Spyropoulos, in respect of the asserted special value of 2.5% to 5% above $405,000, referred to at [37] and [40] in his affidavit, and also the corresponding evidence given under cross examination (see [21]-[24] above), was received de bene esse following an objection by the respondent. The basis for the objection was that Mr Spyropoulos was not qualified to give opinion evidence about special value. I will consider later the admissibility of that part of his evidence.
Evidence of Vasiliki Spyropoulos
Ms Spyropoulos stated that she had rented the property at 220 South Road to tenants since it was gifted to her by her parents in 1988. She had intended to continue letting the property until she redeveloped it in conjunction with her brother’s adjacent property. The redevelopment would comprise medium density residential units. Her plans to redevelop the property had always been long-term, mainly because she knew that South Road would eventually be widened.
Ms Spyropoulos also stated that the use of a single shared driveway and access onto South Road would maximise the number of units that could be built on the combined site and thus maximise the return on her and her brother’s investments.
Ms Spyropoulos also stated that she owned several other investment properties. She had not yet purchased a replacement property to cover the loss of 220 South Road but intended to do so. She was aware that her brother was dealing with land agents on an ongoing basis. She had deferred to him in attempting to secure a replacement property adjacent to one that he purchased so that they could undertake a joint development at some future time.
Ms Spyropoulos gave very similar evidence to her brother in support of her assertion that the property was of special value to her. She also stated that she would do all the conveyancing work on behalf of herself and her brother in relation to the intended redevelopment. Her brother would not be charged for that work. As a conveyancer she could attend to such matters as obtaining new certificates of title, the drafting of community title by-laws and a constitution and so forth. Like her brother, she asserted that the special value of the property was from 2.5% to 5% of the market value.
Ms Spyropoulos accepted that the market value of the land as at the date of acquisition was $405,000, as agreed by Mr Tilley and Mr Pamula. She stated in cross-examination that the asserted special value of 2.5% to 5% of the market value was based upon her experience and her brother’s knowledge. She understood that the properties had more potential because they were side-by-side. She also stated that although she did not attend auctions as frequently as her brother, she had a good understanding of property prices. She admitted that the additional percentage claimed for special value was simply speculation but asserted that it was conservative speculation.
Ms Spyropoulos also stated that she intended to claim a CGT rollover benefit so as to avoid having to pay tax on the compensation received from the respondent.
As in the case of her brother, the evidence of Ms Spyropoulos, in respect of her 2.5% to 5% special value estimate, referred to at [32] to [35] in her affidavit, and also the corresponding evidence given in cross examination (see [29] to [30] above), was received de bene esse following an objection by counsel for the respondent. Once again, the basis for the objection was that Ms Spyropoulos was not qualified to give opinion evidence about special value. It was also noted that her evidence was speculative. I will return to the question of admissibility.
Special value
Submissions for the applicants
The applicants submit that the two subject properties had special value to them arising from their relationship of brother and sister and their common intention to merge and jointly redevelop their land. They referred to the observations made by Gleeson CJ in Boland v Yates Property Corporation Pty Ltd where his Honour stated:[2]
It was established in Pastoral Finance Association Ltd v Minister, which has been followed in many subsequent cases, that in some circumstances land may have a special value to the owner which exceed the market value. If, in a given case, it is contended that such special value exists, that also raises an issue for factual judgment. The subject matter of such factual judgment was explained by Bray CJ in Arkaba Holdings Ltd v Commissioner of Highways:
It is, of course, well established that it is the value to the owner which must be paid, even if that value exceeds the market value … The additional element is commonly called “special value to the owner” … But this special value must in my view arise from some attribute of the land, some use made or to be made of it or advantage derived or to be derived from it, which is peculiar to the claimant and would not exist in the case of the abstract hypothetical purchaser. Would a prudent man in the position of the claimant have been willing to give more for this land than the market value rather than fail to obtain it or regain it if he had been momentarily deprived of it?
Bray CJ went on to give, as a typical example of special value, a case where the land is peculiarly adapted to a certain use made of it by the claimant, such as agricultural land worked in connection with a neighbouring residence or farm buildings.
(Footnotes omitted)
[2] (1999) 167 ALR 575 at 596 [80]-[81].

The applicants also refer to the observations made by Wells J about special value in Commissioner of Highways v Shipp Bros Pty Ltd, where his Honour stated:[3]
Where it can justly be said that, in the circumstances relating to the particular land and the particular claimant, there are special advantages to the claimant in owning and using the subject land, a court may conclude that what he would reasonably pay, rather than fail to retain it, takes the value of the land to him above ordinary market value, and that the measure of his loss caused by the acquisition ought to reflect that extra value.
(Citation omitted)
[3] (1978) 19 SASR 215 at 219-220.
In light of the observations made by Gleeson CJ in Boland v Yates, Bray CJ in Arkaba and Wells J in Shipp Bros, the applicants submit that the “attributes of the land” that give it a special value to them include the fact that the adjacent land is owned by their sibling and they hold a common desire to redevelop the land. That attribute of the land is peculiar to the applicants and would not exist in the case of an abstract hypothetical purchaser. This “attribute” of the land conferred upon each applicant the following valuable economic benefits:
·The ability to develop the land in the future for residential purposes at a dwelling density greater than if the two separate parcels had been redeveloped separately;
·The ability for the applicants to engage in such a residential redevelopment collaboratively, thereby saving development costs; and
·In the case of Spiro Spyropoulos, he was entitled to a CGT exemption upon the sale of the residential units because of his continuing ownership of the land since before 1985.
The applicants accept, but do not agree with, the joint opinion of the valuers that the consolidated site has no greater value than the sum of the individual properties. They submit that the joint opinion of the valuers does not resolve the question of special value. That is because the concept recognises the value to the dispossessed owner which exceeds market value. The applicants supported that contention by reference to several authorities where it has been held that when assessing compensation in an acquisition case, any doubt should be resolved in favour of the dispossessed owner or by adopting a more liberal estimate.[4]
[4] Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia (1947) 74 CLR 358 at 374 (Dixon J as he then was); Valentini v City of Salisbury (1997) 69 SASR 332 at 340 (Matheson J); Sydney Water Corporation v Caruso (2009) 170 LGERA 298 at 326 [99]-[100] (Tobias JA); Mitchell v Roads and Traffic Authority (NSW) (2008) 164 LGERA 375 at 380-381 [10]-[11] (Pain J); McBaron v Roads and Traffic Authority (NSW) (1995) 87 LGERA 238 at 244-245 (Talbot J).
The applicants stressed that they were not purporting to give evidence contrary to that of the expert valuers. To the contrary, their evidence was simply that they would have been prepared to pay between 2.5% to 5% above the market value rather than lose the properties. Any doubt as to special value should be resolved in favour of the applicants consistently with the authorities. In that light, it was submitted that compensation for special value should be assessed at 5% above the market value in the case of Spiro Spyropoulos and 2.5% above market value for Vasiliki Spyropoulos.
Submissions for the respondent
The respondent submits that neither Spiro Sypropoulos nor Vasiliki Spyropoulos is qualified as an expert in valuation. Thus, they cannot give opinion evidence about matters of valuation. Furthermore, even if their evidence was to be admitted, little weight should be attached to it. Ms Spyropoulos admitted that her evidence about special value was merely speculation.
The respondent also noted that the test for determining special value is objective rather than subjective. The objective evidence provided by the two expert valuers was that the value of the two properties when combined was no greater than the value of the two individual properties.
The respondent also noted that the applicants had not formulated a plan to show how they would derive additional value from the development of the two sites as one entity. There had been no discussions amongst their family about the suggested redevelopment, nor had any material steps been taken to proceed with such a development. On that basis, this case can be readily distinguished from other cases where a developer had actually taken some steps towards developing a site.
The market value already recognises the development potential. Although Mr Spyropoulos apparently had expertise as a property developer and investor while Ms Spyropoulos was a registered conveyancer, their skill sets did not enable this case to be distinguished from an ordinary assessment of market value. Moreover, Mr Pamula had undertaken a careful assessment of the redevelopment potential of the combined sites and Mr Tilley had ultimately agreed with that assessment.
The respondent submitted that the emotional attachment referred to by Mr Spyropoulos could not be taken into account in assessing special value. The authorities make clear that an emotional attachment to land did not entitle a dispossessed owner to compensation under the head of special value.
The respondent submitted that in light of the decision of Wells J in De Ieso v Commissioner of Highways, it was unnecessary for the Court to resolve conflict between the evidence of Mr Spyropoulos, based upon the advice of Mr Stefanopoulos, that the merged land could be developed with eight dwelling units and the opinion of Mr Pamula, which was supported by the report of AECOM, that only four dwellings could be erected on the combined site. [5]
[5] (1981) 27 SASR 248.
The respondent further submitted that the cost of obtaining a CGT rollover exemption was not compensable under the claim for special value.[6] That is because the CGT is a personal liability separate to the land.
[6] See Burns v Eurobodalla Shire Council [2006] NSWLEC 677 at [21]-[26] (Lloyd J).
Consideration – special value
There is a preliminary question as to whether the Court must decide whether the combined sites would accommodate eight dwellings (as suggested by Mr Stefanopoulos), or four dwellings (as reported by AECOM).
Wells J held in De Ieso v Commissioner of Highways that the Court is not required to decide whether the planning authority would have approved a development proposal. The Court must decide how a hypothetical prospective developer would have viewed the potential financial return if they were considering a proposed development. Wells J stated that it would be contrary to the process of reasoning established by Spencer’s case[7] to attribute the opinion of the expert to the hypothetical developer. It was not possible to predict with certainty what decision the planning authorities might make. Wells J therefore held that the Court should approach the matter on the basis that it was likely a developer would seek to minimise business risks in deciding what price to offer for the land.[8]
[7] Spencer v Commonwealth (1907) 5 CLR 418. In essence, the test established by Spencer’s case is that the market value represents what a willing but not over eager purchaser would offer to pay a willing but not over eager vendor in an arm’s length transaction.
[8] (1981) 27 SASR 248 at 253-254.
I agree with and adopt the reasoning of Wells J in De Ieso. Thus, I proceed on the basis that a hypothetical developer would offer a price for the subject land that minimised their financial risks. Such a price would reflect the value placed on the combined parcels of land by Mr Pamula and later adopted by Mr Tilley.
A convenient statement of the principles to be applied in determining whether the acquired land has a special value to the dispossessed owner is found in the judgment of Callinan J in Boland v Yates, where his Honour stated:[9]
The special value of land is its value to the owner over and above its market value. It arises in circumstances in which there is a conjunction of some special factor relating to the land and a capacity on the part of the owner exclusively or perhaps almost exclusively to exploit it. … There will in practice be few cases in which a property does have a special value for a particular owner. Obviously neither sentiment nor a long attachment to it will suffice. The special quality must be a quality that has an economic significance to the owner.
[9] (1999) 167 ALR 575 at 654 [292].
Callinan J makes clear that any emotional attachment that the applicants have to the subject land is not relevant to the assessment of special value.[10] Thus, the suggestion by Mr Spyropoulos that the land at 222 South Road had particular value to him because it was his first investment in real property is not relevant.
[10] See also Bronzel v State Planning Authority (1979) 21 SASR 513 at 525 (Wells J); Valentini v City of Salisbury (1997) 69 SASR 332 at 334 (Matheson J).
Kirby P (as he then was) in Yates Property Corp Pty Ltd (in liq) v Darling Harbour Authority, referred in the following terms to the principles covering the payment of compensation where land has a special value to the owner:[11]
… it is clear that compensation for special value is available, at least to the extent that the owner, at the moment of resumption, enjoyed additional economic advantages directly attributable to its ownership or occupation of the land which would not be reflected in the market value.
(Citations omitted)
[11] (1991) 24 NSWLR 156 at 161.
Bray CJ held in Arkaba Holdings that an objective, rather than subjective, test is to be applied in determining the extent of any special value to the particular owner which exceeds the market value.[12]
[12] See paragraph [33] above.
Wells J enlarged upon the principles to be applied in assessing special value in Commissioner of Highways v Tynan, where his Honour stated:[13]
It seems to me that the principles to be applied where special value is in issue are virtually the same as those laid down in Spencer’s case, though extended and qualified slightly, to accord with the changed enquiry. What the court is being asked to determine is the price at which a person in exactly the same position as the claimant would “come together” with a hypothetical person on the point of dispossessing him, in circumstances in which the claimant would, in order to retain the land under threat, pay a sum representing the market value of the land, together with the value of all its special advantages to him, but would not, in addition to the market value, pay more than the provable commercial value to him of those special advantages. As before, the hypothetical expropriator would be willing, but not anxious, to allow the other party to pay what the land is fairly worth to him.
[13] (1982) 53 LGRA 1 at 9.
The decisive point is that the Court must approach the assessment of special value on the basis that the hypothetical purchaser would not pay, in addition to the market value, more than the provable commercial value to them of the special advantages that the land has to them.
Approaching the matter in accordance with the principle stated by Wells J in Tynan, the opinion of the valuers as expressed in their joint statement is that the “provable commercial value” of the special advantages asserted by each of the applicants is nil. That is because the potential for the merger of the two allotments into one parcel of land and its redevelopment with medium density housing does not give rise to an increase in value. Thus, a person in exactly the same position as the applicants would not pay more than the market value of the subject land so as to retain that land in their ownership.
Similarly, applying the principle stated by Kirby P in Yates, in light of the agreement by the valuers, the applicants did not hold, at the moment of acquisition, any additional economic advantage directly attributable to their ownership which would not be reflected in the market value.
Because the value of the subject land must be determined on an objective basis, the subjective evidence of Mr Spyropoulos and Ms Spyropoulos that they would have been prepared to pay more for the subject land than the two valuers considered it was worth is not relevant and the Court cannot take it into account. Furthermore, while the applicants, particularly Mr Spyropoulos, appear to have greater knowledge about land values in Adelaide than the average person, it was not suggested that they are qualified as experts to give opinion evidence about valuation questions.[14]
[14] Electricity Trust of South Australia v O’Leary (1986) 42 SASR 26 at 28 (King CJ, Zelling and Millhouse JJ agreeing); Minister v Spellman (1963) 9 LGRA 387 at 390 (Else-Mitchell J).
The evidence given by each applicant about what they would have been prepared to pay for the land in support of their claim for special value was received de bene esse. Because neither applicant is an expert in the valuation of land, that evidence cannot be received as opinion evidence. Their subjective evidence about special value (i.e. what they would be prepared to pay) is also not relevant. For these two reason I decline to admit the evidence of Mr Spyropoulos and Ms Spyropoulos that was received de bene esse at the trial.
Disturbance
There are two elements in the claims for compensation on account of disturbance. The first element is the claim for general disturbance, based upon the cost to be incurred in the purchase of a replacement property by each applicant. The respondent has already paid each applicant a sum of $10,000 plus interest on account of general disturbance, but disputes that any further compensation is payable based on the cost of securing a replacement property. The two valuers have agreed, and the parties have accepted, that if the applicants are entitled to compensation based on the cost of securing a replacement property, the quantum should be an additional $20,000 each.
The second element of the disturbance claim is that each applicant seeks compensation of $2,500, based upon the accountancy fees payable in connection with an application to the Australian Taxation Office seeking a rollover of their CGT liability. A letter dated 1 December 2017 offered by Mr Jerry Rossi, Mr Spyropoulos’ accountant, indicates that his fees are likely to be $2,500 for each applicant. The quantum is not disputed by the respondent.
The applicants’ submissions
The applicants place particular reliance upon the judgment of Wells J in Commissioner of Highways v Shipp Bros Pty Ltd, where his Honour considered whether compensation could be awarded for the costs incurred in relocating a business following compulsory acquisition.[15] His Honour stated:[16]
He has not participated in a voluntary sale. Deprivation and consequential loss is forced on him by executive act. Whatever Spencer’s case may say about fixing compensation for the land simpliciter, all reasonable and natural consequences of the taking would seem logically to warrant consideration if they or some of them represent financial loss to the owner – in particular, where he is faced with the practical necessity of expending moneys that he would not have been constrained to expend if the acquisition had not taken place.
Judgments delivered in many cases decided, both in Australia and in England, under various forms of legislation conferring and controlling the power to take land compulsorily, accord generally with the approach foreshadowed above, and unite in recognizing that such consequences may embrace the owner’s decision to incur the costs of re-locating a business previously conducted on the land taken. For to make such a decision and to seek to act on it, may, in certain circumstances, be reasonable, and be the direct consequence of the expropriation. The costs of re-location may then fairly be regarded as having a direct bearing on the measure of the owner’s loss.
(Footnotes omitted)
[15] (1978) 19 SASR 215.
[16] Ibid at 218.
The applicants also referred to the statement by Callinan J in Boland v Yates that the concept of disturbance covers those losses which naturally, reasonably and directly flow from the acquisition.[17] The applicants submit that the cost of purchasing a replacement property is a loss which naturally, reasonably and directly flows from the acquisition of the subject land and should be compensated under the head of disturbance. While the owner of an investment property could elect not to buy a replacement property and instead invest their money in some other form, the decision to buy another property so that they were not required to pay capital gains tax on their compensation or could defer that liability, was a natural, direct and reasonable consequence of the acquisition.
[17] (1999) 167 ALR 575 at 655 [294].
The applicants submit that the limitation in the New South Wales authorities to the payment of compensation for the cost of acquiring replacement property where the acquired property was the stock in trade of an investor is not relevant in South Australia. That is said to be the case because of the particular provisions of s 59 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW). The applicants also submit that under the Victorian legislation disturbance has been held to embrace any expense that was a natural, reasonable and direct consequence of the acquisition.
The applicants submit that, contrary to the submissions of the respondent, the judgment of Bray CJ in Brewarrana Pty Ltd v Commissioner of Highways supports their claim for compensation based on the cost of purchasing a comparable property.[18] Bray CJ specifically referred to the cost of purchasing a comparable property as an example of the type of loss included under the head of disturbance.[19] While Bray CJ noted that claims for loss of the profit which could have been made on the sale of land as an investment, or on development as an investment, had always been rejected, the former Chief Justice was concerned in Brewarrana with a claim for compensation from a developer who was holding land with the intention of subdividing it for profit.
[18] (1973) 4 SASR 476.
[19] Ibid at 484. Bray CJ was referring with approval to a passage in Cripps on Compulsory Acquisition of Land (Stevens & Sons, 11^th ed, 1962) at 4-229 – 4-236.
The applicants submitted that the Court should not follow the observation made by Denning LJ (as he then was) in Harvey v Crawley Development Corporation.[20] By way of example his Lordship suggested that the owner of an investment property could not be compensated for the costs of purchasing a replacement property after acquisition, as those costs would be the result of the person’s own choice to buy another property and not the result of the compulsory acquisition.[21]
[20] [1957] 1 QB 485.
[21] Ibid at 493.
The correct test, in the applicants’ submission, is that a land owner is entitled to be compensated for the reasonable and natural consequences of an acquisition, provided that the loss was not too remote.
The applicants submit that the four year delay in securing replacement properties was fully and rationally explained in their evidence. Until February 2018, they had not been not aware of the amount of compensation that they would receive for the market value of the property. They had always considered that they were entitled to compensation greater than that originally offered by the respondent. They were eventually paid about 10% more than the original offer. They always intended to obtain replacement properties because of their longstanding and particular desire and intention to invest in land. By doing so they would also benefit from the CGT rollover. However, until they knew what compensation they were to receive, they did not know what money they had to spend on buying replacement properties.

The applicants also submitted that the fees of $2,500 payable to their accountant in relation to the CGT rollover are no different to the costs incurred in purchasing a new property, e.g. stamp duty and professional fees. The applicants do not submit that the cases where it had been held that a CGT liability was not a compensable loss were wrongly decided. They simply contend that the cost of obtaining the CGT rollover was a reasonable and natural cost of the acquisition.
The respondent’s submissions
The respondent primarily relies upon the example provided by Denning LJ (as he then was) in Harvey v Crawley Development Corporation, that the costs incurred by a person who held a property as an investment in purchasing an alternative property upon acquisition would be too remote to attract compensation for disturbance.[22] The respondent acknowledges that the example provided by Denning LJ was obiter, but observes that his Lordship’s comment has been approved in later cases.[23]
[22] Ibid.
[23] Brewarrana Pty Ltd v Commissioner of Highways (1973) 4 SASR 476 at 484 (Bray CJ); Director of Buildings and Lands v Shun Fung Ironworks Ltd [1995] 2 AC 111 at 126.
The respondent also seeks to draw support from the judgment of Callinan J in Boland v Yates.[24] The plaintiff sought damages for professional negligence relating to his legal representation in land acquisition proceedings. One element of the compensation claim had been a payment in respect of legal expenses, interest and stamp duty incurred in purchasing an alternative site. Callinan J observed that the plaintiff had been fortunate to receive payment for those items as “[i]t may well have been arguable that the claims for them were too remote.”[25] His Honour suggested that the claims may have been too remote because every investment will involve the payment of charges and costs, whether it is sold or compulsorily acquired. While Callinan J did not refer to the dicta of Denning LJ, the respondent suggests that his Honour adopted the same approach.
[24] (1999) 167 ALR 575.
[25] Ibid at 657 [302].
The respondent acknowledged that compensation had been awarded in New South Wales and Victoria for costs incurred in purchasing an alternative property, where land that formed part of the stock in trade of an investor was compulsorily acquired. The respondent stressed that the New South Wales cases turned upon the particular terms of the Land Acquisition (Just Terms) Compensation Act 1991 (NSW).
The respondent accepts that the claim for payment of compensation based on the cost of seeking a CGT rollover from the ATO rises or falls with the claim for compensation in respect of the costs of purchasing an alternative property. The respondent submits that both claims should fail.
Consideration – replacement costs
The key difference between the position of the applicants and the respondent in relation to the payment of compensation for the costs incurred in purchasing an alternative property is that the applicants submit that I should not follow the observations made by Denning LJ in Harvey v Crawley Development Corporation, while the respondent contends that I should decide the matter in accordance with the suggestion made by his Lordship.
Harvey v Crawley Development Corporation
In Harvey, after finding that the applicant was entitled to compensation under the head of disturbance for removal expenses and the like, Denning LJ stated:[26]
But I would not like this to be taken too far. Cases were put in the course of the argument. Supposing a man did not occupy a house himself but simply owned it as an investment. His compensation would be the value of the house. If he chose to put the money into stocks and shares, he could not claim the brokerage as compensation. That would be much too remote. It would not be the consequence of the compulsory acquisition but the result of his own choice in putting the money into stocks and shares instead of putting it on deposit at the bank. If he chose to buy another house as an investment, he would not get the solicitors’ costs on the purchase. Those costs would be the result of his own choice of investment and not the result of the compulsory acquisition.
[26] [1957] 1 QB 485 at 493.
This Court is not bound by the observation of Denning LJ in Harvey. However, it carries very considerable weight. This Court is also not bound by the endorsement of the view of Denning LJ expressed by the Privy Council in Director of Buildings and Lands v Shun Fung Ironworks Ltd.[27] Nevertheless, that endorsement substantially reinforces the authority of the view expressed by Denning LJ.
Brewarrana Pty Ltd v Commissioner of Highways
[27] The Privy Council provided its advice on the appeal to Her Majesty after appeals from this Court to the Privy Council were abolished in 1986. See s 11 of the Australia Act 1986 (Cth) and the Australia Acts (Request) Act 1985 (SA).
The respondent has also referred to the fact that in Brewarrana, Bray CJ referred with approval to the observation of Denning LJ in Harvey.[28]In fact, Bray CJ referred to that observation as authority for the principle that compensation is not paid for the loss of profit when the acquired land has been held as an investment.[29] Thus, the point decided in Brewarrana is different to the present question.
Banno v Commonwealth
[28] (1973) 4 SASR 476 at 484.
[29] Walters J agreed with Bray CJ that the applicant was not entitled to compensation for loss of profit, but Wells J expressly did not decide the point.
In Banno v Commonwealth, Wilcox J of the Federal Court decided a claim under the Lands Acquisition Act 1989 (Cth) where the applicants sought compensation for the cost of re-establishing their business at a new location.[30] After considering the example given by Denning LJ in Harvey, Wilcox J concluded that a distinction should be drawn between the replacement of a passive investment and the transfer of an active business to a new location.[31] His Honour did not cite any authority for that proposition.
[30] (1993) 45 FCR 32.
[31] Ibid at 40.
Wilcox J referred in Banno to paragraph 242 of a report of the Australian Law Reform Commission (ALRC) entitled Lands Acquisition and Compensation.[32]The ALRC referred to the example given by Denning LJ in Harvey and commented:[33]
It seems unreasonable that a land owner who is forced to reinvest his money because of compulsory acquisition should not be compensated for the cost of such reinvestment, provided it was reasonably incurred.
[32] Ibid.
[33] Ibid quoting Land Acquisition and Compensation, ALRC Report No 14 (1980).
To that end, the ALRC recommended that compensation should be payable for any loss or damage suffered or costs incurred as a “natural and reasonable” consequence of the acquisition. The ALRC also recommended that the use of the word “direct” should be avoided, as the courts had refused to award compensation to cover the cost of acquiring alternative land as that expense was not regarded as a direct consequence of the acquisition.
Wilcox J observed in Banno that although the Lands Acquisition Act 1989 (Cth) was substantially based upon the recommendations of the ALRC, the Parliament had not adopted the ALRC suggestion that use of the word “direct” should be avoided. Because the word “direct” was included in s 55(2)(c) of the Lands Acquisition Act, Wilcox J suggested that the statute “possibly thereby import[ed] the limitations perceived by Denning LJ.”
New South Wales authorities
The applicants’ case is not assisted by the New South Wales authorities. The New South Wales Court of Appeal held in Blacktown Council v Fitzpatrick Investments that a person who carries on the business of developing land for profit, and is not a passive investor, is entitled to compensation for the expenses incurred in buying replacement land.[34] However, that case was decided under s 59(f) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW), which defined the relevant category of compensable loss as follows:[35]
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.
[34] [2001] NSWCA 259 at [35]-[36] (Brownie AJA with Stein JA and Ipp AJA agreeing).
[35] In 2015, s 59 was amended by the Regulatory Reform and Other Legislative Repeals Act 2015 (NSW) such that the numbering of this section changed from s 59(f) to s 59(1)(f). There has been no change to the language of this subsection.
Brownie AJA, with Stein JA and Ipp AJA agreeing, held that the holding of land for development as part of the applicant’s “land bank” was an “actual use” of the land within the meaning of s 59(f). Accordingly, the costs incurred in purchasing replacement land were a direct and natural consequence of the acquisition.
The same principle was applied by Talbot J of the New South Wales Land and Environment Court in Cannavo v Roads and Traffic Authority (NSW), but with a different outcome.[36] The evidence was that the applicants were holding the subject land as an investment rather than as trading stock or a “land bank”. Talbot J held “[t]he rather vague and unstructured proposal to develop the land in conjunction with a neighbour in due course does not in my opinion raise the case above the example used by Denning LJ in Harvey.” On that basis his Honour held that the applicants were not entitled to compensation under s 59(f) of the NSW Act.
Victorian authorities
[36] [2004] NSWLEC 570.
In Secretary to the Department of Economic Development, Jobs, Transport and Resources v Manor Lakes (Werribee) Pty Ltd, Emerton J of the Supreme Court of Victoria awarded compensation based upon the loss incurred by the developer by way of stamp duty paid on the purchase of alternative land to be held as its stock in trade.[37] Her Honour observed:[38]
There is longstanding authority on the availability of compensation under the LAC Act for the costs of replacing land that was a developer’s stock in trade.[39] Thus, for example, in Redwood Court Pty Ltd v Roads Corporation,[40] Gobbo J allowed a claim for legal fees and stamp duty for the acquisition of replacement land on the basis that the land was stock in trade that had to be replaced. Referring to earlier cases,[41] his Honour said:[42]
Those cases are illustrations of a principle that in my view supports an award of compensation to an owner developer who is in effect deprived of his stock in trade and incurs expense and costs of delay in securing replacement land to develop. The award of market value does not meet the situation as the developer owner cannot simply buy replacement land by entering the market. He has to search and investigate and incur cost and delay before he is again in substance in the position he was in at the time of the … acquisition.
(Footnotes in original)
[37] [2016] VSC 358.
[38] Ibid at [59]
[39] Batt JA referred to a number of authorities in footnote 18 in Melbourne City Link v Teford (2001) 113 LGERA 102.
[40] (1992) 76 LGRA 358.
[41] Kennedy Street Pty Ltd v The Minister (1962) 8 LGRA 221; and Chapman v The Minister (1966) 13 LGRA 1.
[42] Ibid 362.
The Victorian Court of Appeal dismissed an appeal against the award of compensation by Emerton J in Manor Lakes.[43] The appellant had contended that the payment of stamp duty was not a direct consequence of the compulsory acquisition.[44]
[43] Secretary to the Department of Economic Development, Jobs, Transport and Resources v Manor Lakes (Werribee) Pty Ltd (2017) 224 LGERA 115.
[44] Section 40 of the Land Acquisition and Compensation Act 1986 (Vic) defines a “loss attributable to disturbance" to mean "any pecuniary loss suffered by a claimant as the natural, direct and reasonable consequence of [acquisition]”.
It is clear that in Victoria the costs incurred by a developer in purchasing replacement land to maintain its “land bank” or stock in trade will be compensable on the basis that such an expense is the “natural, direct and reasonable consequence” of acquisition within the meaning of s 40 of the Land Acquisition and Compensation Act 1986 (Vic). However, it is necessary for the Court to be satisfied that the developer will purchase replacement land and incur the associated costs.[45] In contrast to the position in New South Wales (see paragraphs [82]-[82] above), the Victorian approach is not based upon a statutory provision peculiar to that State. While the words “natural, direct and reasonable consequence”, or the like, do not appear in the Land Acquisition Act 1969 (SA), the limitation of compensation to costs that satisfy this description is nevertheless well recognised.[46]
[45] Coastal Estates Pty Ltd v Bass Shire Council [1993] 2 VR 566 at 595-596 (Gobbo J).
[46] See, eg, Commissioner of Highways v Shipp Bros Pty Ltd (1978) 19 SASR 215 at 218 (Wells J); Minister of Environment v Petroccia (1982) 30 SASR 333 at 362 (Wells J).
While the applicants have not relied upon the Victorian authorities, they contend that the costs they will incur when purchasing replacement properties are a “natural, direct and reasonable consequence” of the acquisition of the subject land. Thus, they submit that compensation should be awarded. The applicants’ evidence is also that they intend to purchase replacement properties, but have deferred doing so until the quantum of their compensation is resolved. However, even if that evidence was to be accepted, the applicants would not be entitled to compensation under the Victorian approach. That is because neither applicant contends that the subject land was part of their stock in trade as a developer.
The applicants submit that the Court should find that they are entitled to compensation for the costs incurred in purchasing replacement land, because that expenditure is a natural, reasonable and direct expense arising from the acquisition of the subject land. In substance, they also submit that the Court should not adopt the limitation applied in Victoria whereby compensation is only payable where the acquired land has been part of the stock in trade of a developer and costs have been or will be incurred in replacing that land. The appellants also submit that the Court should not follow the view expressed by Denning LJ in Harvey.
Albany v Commonwealth
Without referring to the dicta of Denning LJ in Harvey, Jacobs J when sitting as a single Judge of the High Court in Albany v Commonwealth applied precisely the same reasoning as Denning LJ to reject a claim for costs incurred in purchasing a replacement property.[47] Jacobs J stated:[48]
The plaintiff also claims the sum of $3350 as an amount which would be required, by way of estate agent’s commission and legal fees, in order to replace the land. I do not think that this claim can be allowed. The plaintiff will receive the full value of the land acquired. It may or may not expend the compensation in the purchase of other land. If it had wished to sell the subject land and purchase other land it would have had the expense of agent’s commission and legal costs. I do not think that the possible expenses of acquiring other land should be allowed, at least in a case where compensation or value is not calculated on a reinstatement basis.
[47] (1976) 12 ALR 201.
[48] Ibid at 236.
As neither counsel had referred to this authority in their submissions, I invited them to make further written submissions upon the preceding passage in the judgment of Jacobs J. Both counsel provided written submissions.
The applicants submit that the observations of Jacobs J in Albany are distinguishable from the facts of the present case. The applicants have given unequivocal evidence that they will purchase replacement properties and clearly explained why they had not yet done so. The costs they will incur in purchasing replacement properties, and obtaining a rollover of their CGT liability are a “natural, direct and reasonable consequence” of the acquisitions. Compensation should be awarded on that basis.
The applicants accept that compensation will ordinarily be awarded for the purchase of a replacement property where the acquired land has been the owner’s principle place of residence. However, where the subject land has been held as an investment, compensation should only be awarded for costs incurred in buying a replacement property where the evidence before the Court establishes that the dispossessed owner will purchase other land.
The applicants also submit, to the extent that the observations of Jacobs J in Albany could be regarded as imposing a different test for the payment of disturbance from that identified by Callinan J in Boland v Yates, the view of Callinan J should be preferred and applied.
The respondent submits that the observations made by Jacobs J in Albany are entirely consistent with the dicta of Denning LJ in Harvey and should be followed.
Because Jacobs J was sitting alone in the original jurisdiction of the High Court, the question arises as to whether a single judge of this Court is bound by a decision of a single justice of the High Court. [49]
[49] Prior to the creation of the Federal Court of Australia in 1976 it was not uncommon for single justices of the High Court to exercise its original jurisdiction in such matters as judicial review, taxation appeals, land acquisition by the Commonwealth Government and so forth.
Gummow J, sitting alone in the Federal Court, held in Businessworld Computers Pty Ltd v Australian Telecommunications Commission that he was not bound to follow a single judge of the High Court.[50] His Honour observed:[51]
Nevertheless, Mr Stevens submitted that this court, both at first instance and presumably on appeal, was bound by considered statements of principle in decisions of single justices of the High Court exercising its original jurisdiction. Hence, he submitted, I was bound by the passage I have set out from Queensland v Australian Telecommunications Commission (1985) 59 ALR 243; 59 ALJR 562 at 563. Whilst, of course, such decisions are deserving of the closest and respectful consideration, I believe Mr Stevens’ submission is incorrect. Stare decisis involves courts being bound by appellate decisions of courts standing above them and in the same hierarchy. A decision of a single justice of the High Court is not such a decision. I refer to what was said, albeit with reference to the position of an intermediate court of appeal in relation to judgments of single justices of the High Court, in Bone v Commissioner of Stamp Duties [1972] 2 NSWLR 651 at 654 and 664.
(Emphasis added)
[50] (1988) 82 ALR 499.
[51] Ibid at 504.
The New South Wales Court of Appeal had previously held in Bone v Commissioner of Stamp Duties that it was not bound by a decision of a single justice of the High Court[52] on the basis that such a decision was not given “when sitting as a member of a court in the framework of the appellate structure of which this Court is a part.”[53] However, such a decision was “entitled to the greatest respect”[54] and was “of the greatest persuasive authority”.[55]
[52] [1972] 2 NSWLR 651 at 654 (Jacobs P), 664 (Hope JA) and 666 (Reynolds JA agreeing with both Jacobs P and Hope JA).
[53] Ibid at 654 (Jacobs P).
[54] Ibid.
[55] Ibid at 664 (Hope JA).
Conclusion
While the policy recommendation made by the ALRC that I have noted at paragraphs [77]-[78] has some merit, I must decide these applications in accordance with the relevant legal principles.
As I have already indicated, I am not bound by the dicta of Denning LJ in Harvey, but the view expressed by his Lordship carries considerable weight. The authority of his Lordship’s view has been strengthened due to its endorsement by the Privy Council in Shun Fung Ironworks Ltd.
The New South Wales authorities discussed at [82]-[82] above are not relevant because they were decided under the particular provisions of s 59(f) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW).

In Manor Lakes the Victorian Court of Appeal dismissed an appeal against a finding that compensation may be awarded to a developer for the costs incurred in purchasing replacement property following compulsory acquisition of land held as stock in trade. However, it is clear that in Victoria, compensation will not be awarded for such costs if the investor does not intend to buy replacement land or, more relevantly in this case, the land was not held as stock in trade
The Victorian approach is contrary to that adopted by Jacobs J sitting as a single Judge of the High Court in Albany. Although I am not bound by the decision of Jacobs J, it is “of the greatest persuasive authority” and is “entitled to the greatest respect”. However, it is also the case that this Court should follow the decision of an intermediate appellate court in another Australian jurisdiction unless persuaded that it is clearly wrong.[56]
[56] R v Falzon (2018) 92 ALJR 701 at 712 [49] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).
Even if I were to adopt the Victorian approach, because neither applicant contended that they held the subject land as part of their stock-in-trade as an investor, the costs of acquiring alternative properties are not the “natural, direct and reasonable consequence” of the acquisitions. It is therefore unnecessary for me to decide whether I should adopt the Victorian approach or the contrary finding by Jacobs J in Albany (and also by Denning LJ in Harvey and the Privy Council in Shun Fung Ironworks). In other words, that issue does not arise on the present facts, as both approaches would produce the same outcome.
The applicants have effectively contended that I should adopt a more liberal approach than that taken in Victoria, by finding that the costs of acquiring alternative properties and a GST rollover are the “natural, direct and reasonable consequence” of the acquisitions regardless of the fact that they have not contended that they held the subject land as part of their stock-in-trade as an investor. However, such a decision would be contrary to both the Victorian authority and the approach adopted by Jacobs J in Albany. For the reasons stated at paragraph [101] above, I can only depart from those authorities if I consider them to be plainly wrong. While in some factual situations the two lines of authority produce different outcomes (albeit not on the present facts), I cannot say that either is wrong. I must therefore reject the applicants’ contention.
Decision
I dismiss the applications made by Spiro Spyropoulos and Vasiliki Spyropoulos for the award of compensation based upon the alleged special value of the land. I also reject their claims based upon the costs that they will incur in purchasing replacement properties and obtaining a CGT rollover. The latter is inextricably linked to the claim to be compensated for the costs incurred in purchasing a replacement property.
I will hear the parties as to costs.