Alexandria Landfill Pty Ltd v Transport for NSW

Solicitors: Addisons Lawyers (Appellant) Norton Rose Fulbright Australia (Respondent) File Number(s): 2019/251630 Decision under appeal Court or tribunal: Land and Environment Court Jurisdiction: Class 3 Citation: [2019] NSWLEC 98 Date of Decision: 18 July 2019 Before: Sheahan J File Number(s): 2016/155678

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] In December 2014 the respondent (RMS) compulsorily acquired two parcels of land owned by the appellant (ALF) in St Peters, Sydney, for the purpose of building the WestConnex motorway. One of the parcels (Lot 2), with which this appeal was concerned, was 15.71ha in size and was being used for landfill and waste operations at the time of acquisition. ALF sought compensation for Lot 2 under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (JTC Act). The Land and Environment Court (LEC) determined that ALF was entitled to be paid about $45.7 million in respect of the market value of Lot 2. ALF then appealed on questions of law to this Court, pursuant to s 57 of the Land and Environment Court Act 1979 (NSW). The principal issues on appeal were: (1) Whether the primary judge constructively failed to exercise his jurisdiction; (2) Whether the primary judge's reasons for findings were inadequate; (3) Whether there was a lack of procedural fairness arising out of the reasons of the primary judge for preferring the evidence of an expert called by RMS; (4) Whether the primary judge's judgment gave rise to an apprehension of bias; (5) Whether the primary judge erred in assessing compensation for disturbance; (6) Whether the primary judge erred in assessing special value. The Court (Basten JA, Macfarlan JA and Leeming JA) dismissed the appeal, determining each of the above issues unfavourably to ALF: In relation to Issues 1 (constructive failure to exercise jurisdiction) and 2 (adequacy of reasons): (Per Basten JA, with Leeming JA in substantial agreement at [413]): The premise underlying a constructive failure to exercise jurisdiction is that there has been an apparent exercise of jurisdiction of the court, but once the underlying issues and materials are teased out, it is demonstrated that a material issue presented for determination has not been resolved: [6]. A "constructive" failure to exercise jurisdiction includes any form of jurisdictional error which is not a mistaken express refusal to exercise the powers of the court, and the terminology has also been used where the adequacy of reasons has been challenged: [12]-[13]. Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353; [1949] HCA 26; Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47; LVR (WA) Pty Ltd v Administrative Appeals Tribunal (2012) 203 FCR 166; [2012] FCAFC 90; Cojocaru v British Columbia Women's Hospital and Health Centre [2013] 2 SCR 357; 2013 SCC 30, referred to. Where an appeal is confined to questions of law, the standard of reasons is such that it must be shown that the decision has not been reached capriciously or arbitrarily, but rationally: [29]. The reasons must thus reveal that all material factors have been identified and addressed, and that no prohibited considerations have been operative: [29]. Pettitt v Dunkley [1971] 1 NSWLR 376; Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33; Boele v Rinbac Pty Ltd (2014) 88 NSWLR 381; [2014] NSWCA 451; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Li v Attorney General for New South Wales [2019] NSWCA 95, referred to. In so far as the complaint alleged a global failure to exercise jurisdiction, relevant factors include: the judge was entitled to reject the highly complex discounted cash flow exercise on which ALF relied; adoption of the submissions of one party on all material issues does not of itself demonstrate legal error; the judge heard the case over 50 days, resolved the ultimate issue and gave structured reasons identifying the key issues, evidence and submissions: [39], [46], [48]. In relation to the specific challenges raised, the primary judge made findings and gave adequate reasons, which were sometimes implicit: [60]-[61], [73], [85], [89]. (Per Macfarlan JA): The extent of the obligation on courts to give reasons for their conclusions is very much dependent upon the context: [294]. The adequacy of reasons is not to be judged against a standard of perfection, but the question is whether they attained the minimum acceptable standard: [316]. In this case, the minimum standard is relevantly undemanding for several reasons: the LEC has to consider highly sophisticated and technical issues, with as much expedition as possible ([295], [317]); valuation issues often involve substantial subjective elements and need not be determined with mathematical precision ([318]); a pragmatic and functional approach is to be taken ([321]); a level of generality and implicit reasoning is acceptable ([322]-[323]); and the length and complexity of the proceedings is relevant ([324]). The primary judgment gave the essential reasons for his Honour's decision and reached the minimum acceptable standard: [325]. The primary judge's reasons were adequate in respect of each of the major issues presented to him for determination: [330]-[341]. Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33; New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231; Apokis v Transport for NSW [2020] NSWCA 39; Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373; Moreton Club v Commonwealth (1948) 77 CLR 253; [1948] HCA 21; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156, referred to. DZH16 v Minister for Immigration [2020] FCCA 1041; LVR (WA) Pty Ltd v Administrative Appeals Tribunal (2012) 203 FCR 166; [2012] FCAFC 90, distinguished. (Additional observations of Leeming JA): The invariable resolution of disputed points in RMS's favour does not of itself indicate error: [387]-[388]. Although there was scant reasoning, more is required in order that there not merely be an error of fact: [395]-[396]. Although some errors in the fact finding process may amount to errors of law, one cannot safely transplant the principles applicable to appeals confined to questions of law: [403]. In this case, ALF did not establish legal (as opposed to factual) error: [412]. In relation to Issue 3 (lack of procedural fairness): (Per Basten JA, Leeming JA agreeing at [417]): The primary judge's preference for one expert's experience, being specific to the exercise undertaken in the present case, in circumstances where a different expert's approach was the subject of cross-examination, provided no basis for a complaint of procedural fairness: [96]. CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458, distinguished. (Per Macfarlan JA): The primary judge's observations as to the experts' relative qualifications and experience were open to be made on the evidence, and there was no need for his Honour to draw his intent to make them to the parties' attention: [348]. In relation to Issue 4 (apprehended bias): (Per Basten JA, Macfarlan JA and Leeming JA): The outcome of a case and the judge's reasons for judgment will not alone support a claim of reasonable apprehension of bias, based on prejudgment: [99], [353], [413]. Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48; Studholme v Rawson [2020] NSWCA 76, referred to. In relation to Issue 5 (disturbance): (Per Basten JA, Leeming JA agreeing with additional reasons at [414]-[416]): On its proper construction, s 59(f) only covers financial costs reasonably incurred by a person with an interest in the land acquired: [116]. The best approach to construction is to read the phrase "other financial costs" in s 59(f), being costs relating to the actual use of the land at the date of acquisition, as not encompassing loss of the opportunity to earn future profits: [137]. G Capital Corporation Pty Ltd v Roads and Maritime Services (2019) 100 NSWLR 771; [2019] NSWCA 234; Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41, referred to. Almona Pty Ltd v Roads and Traffic Authority of NSW [2008] NSWLEC 112; (2008) 160 LGERA 375, distinguished. El Boustani v Minister Administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33; 199 LGERA 198; Health Administration Corporation v George D Angus Pty Ltd (2014) 88 NSWLR 752; [2014] NSWCA 352, not followed. ALF did not actually use Lot 2, and did not establish that the user used it as its agent: [142]. In relation to ALF's assertion that RMS was estopped from denying that an agency relationship existed, there was no factual finding of the kind apparently relied on by ALF in the course of the previous proceedings: [142], [145]. In regard to the disturbance claim for business disruption, the trial judge was correct to find that ALF failed to establish any causal relationship: [154]. Furthermore, it was patently not a claim in relation to the "actual use" of Lot 2: [154]. With regards to the disturbance claim for relocation costs, the business carried on on Lot 2 was not carried on by ALF and ALF did not incur costs of any relocation: [160]. (Per Macfarlan JA): The primary judge correctly held that s 59(f) was inapplicable in the absence of ALF establishing that there was an "actual use" of Lot 2 by it at the date of acquisition: [358]-[359]. The mere fact that land is used by a subsidiary of a holding company which is the owner of the land does not establish actual use by the holding company: [361]. G Capital Corporation Pty Ltd v Roads and Maritime Services (2019) 100 NSWLR 771; [2019] NSWCA 234, referred to. The issue of agency in the present proceedings was not determined in the earlier litigation, in part because in those proceedings the identity of the principals was not determined: [370]-[371]. No estoppel therefore arises: [372]. The agency relationship was not established by the evidence in the present proceedings as ALF did not establish that it (as distinct from a related company) incurred costs or derived revenue in connection with the business on Lot 2: [377]. In relation to Issue 6 (special value): (Per Basten JA, Leeming JA agreeing at [417], and Macfarlan JA): The primary judge expressly applied the language of s 57 of the JTC Act and did not apply the Bronzel test in preference: [166]-[168], [380]. Further, the primary judge could not be criticised for assuming the continued relevance of Bronzel: [381] (Macfarlan JA). ALF failed to establish relevant use, as ALF did not use the land itself and its "agency claim" was rejected: [169], [383]. Bronzel v State Planning Authority (1979) 21 SASR 513; Roads and Traffic Authority of NSW v Hurstville City Council [2001] NSWCA 11; (2001) 112 LGERA 223, referred to.

Judgment

1. BASTEN JA: In December 2014 the respondent, then known as Roads and Maritime Services, acquired a 15.7 hectare parcel of land, and another small parcel, owned by the appellant, Alexandria Landfill Pty Ltd, for the purposes of the WestConnex project. There was a dispute as to the amount due to the appellant under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) ("Land Acquisition Act"). The dispute was resolved by a judgment of the Land and Environment Court in an amount of some $50 million, which included both parcels. [1]
2. The appellant, dissatisfied with the judgment, appealed to this Court on a question of law, pursuant to s 57 of the Land and Environment Court Act 1979 (NSW). The notice of appeal set out nine grounds, limited to the payment assessed for the 15.7ha parcel identified as Lot 2. The grounds of appeal were, briefly stated: (1) constructive failure to exercise jurisdiction; (2) failure to provide any, or adequate, reasons for findings; (3) procedural unfairness in preferring a key expert for the respondent; (4) apprehended bias in finding for the respondent on all material issues; (5), (6) and (7) errors in assessing claims for loss attributable to disturbance; (8) and (9) errors in assessing "special value" of the land.
3. Grounds 1 and 2 were primarily directed to the assessment of the market value of Lot 2. Each ground had particulars, some of which overlapped with elements of grounds 3-9, and must be treated as raising an issue in the alternative in so far as the latter grounds all assume that a particular matter was determined and that reasons were disclosed. Thus, ground 2(d) alleged that no reasons, or no adequate reasons, were given for rejecting claims that Dial A Dump Industries Pty Ltd operated the business on Lot 2 on behalf of the appellant; grounds 5 and 6 attacked the reasons given for disposing of that issue.
4. The primary focus of the appellant's submissions was grounds 1 and 2. However, they were formulated in terms which tended to confuse. It is convenient to address those grounds first and together and to explain their interrelationship.

(1) interrelationship of grounds 1 and 2

1. To understand the scope and interrelationship of grounds 1 and 2, it is necessary to set them out in full. 1. The Court erred in respect of a decision on a question of law because it constructively failed to exercise jurisdiction in that it failed to treat with the disputed evidence and competing submissions in a way that produced a rational and reasoned conclusion as to the assessment of the compensation having regard to s 55 of the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act). The Court: a. Failed to determine inputs necessary to be determined for the proper use of the discounted cash flow methodology (DCF1) in order to determine the highest and best use of and the market value of the land. b. Failed to determine the highest and best use of the land and the market value of the land by a critical assessment of the contested issues in dispute. The Court failed to make any critical assessment of the Respondent's case and failed to consider or determine substantial integers of the Appellant's criticism of the Respondent's case. c. Failed to perform its function with respect to the use of expert evidence: (i) by failing to examine and engage with the substance of the experts' competing opinion(s) for the purpose of forming the Court's own assessment including by reference to documentary evidence; (ii) to the extent that the Court rejected the evidence of the experts called in the Appellant's case, by accepting the evidence of the experts called in the Respondent's case in its entirety, by default; (iii) by concluding that expert evidence from a critical witness, Dr Ferrier, was to be preferred on the basis of alleged experience in Court matters under the Act. d. Failed to determine the Appellant's claims under ss 59(1)(c) at all; and e. Failed to determine the Appellant's claims under ss 59(1)(f) on a critical review of the contested evidence including failing to refer to documentary and lay evidence of the Appellant. 2. Further, or in the alternative, the Court erred in respect of a decision on a question of law by failing to provide any, or any adequate reasons, with respect to substantive contested issues involving: a. The inputs to be determined for use in the DCF; b. The determination of the highest and best use of the land; c. The assessment of market value; d. The existence of a relationship between the Appellant and Dial a Dump Industries Pty Limited (DADI) by which the conduct of, and losses incurred by, DADI ought be attributed to the Appellant; and e. The Appellant's claims under s 59(1)(c)."
2. The premise underlying a "constructive" failure to exercise jurisdiction is that there has been an apparent exercise of the jurisdiction of the court, but one that has failed in a way which can only be teased out by reference to the underlying issues and the materials presented to the court. It may then be demonstrated that a material issue presented for determination has not been resolved. By contrast, a failure to give adequate reasons implies that the relevant issues have been identified, addressed and resolved, but the reasons for reaching the conclusion have not been adequately expressed.
3. Despite the conceptual difference between the two complaints, they are related in a practical way. Because there is no means of interrogating a judge as to his or her intellectual processes, evidence that issues were not addressed can usually only be demonstrated by reference to the reasons. Thus, on the assumption that the judge addressed in the reasons all material matters, the absence of reference to a particular matter may allow the inference that it was not addressed and determined. [2]

(a) constructive failure to exercise jurisdiction - principles

1. The phrase "constructive failure to exercise jurisdiction" has been used by the courts in different contexts. It is convenient to start with the process of inference by which error may be identified. As explained by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation, [3] a case where reasons were not provided: "The conclusion he has reached may, on a full consideration of the material that was before him, be found to be capable of explanation only on the ground of some such misconception. If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law." This reasoning can be applied where the claim that the judge did not address a material part (or the whole) of the case presented by the applicant is derived solely from the reasons for judgment.
2. As to the relevant criterion to be applied, in Dranichnikov v Minister for Immigration and Multicultural Affairs, [4] Gummow and Callinan JJ stated: "[24] To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice. … [25] The question remains however whether what occurred, either characterised as a failure to accord natural justice or as that, and more, which we consider it to be, including a constructive failure to exercise jurisdiction, entitles Mr Dranichnikov to relief under s 75(v) of the Constitution." Gleeson CJ, dissenting as to the outcome, agreed with the principles expressed in other judgments. [5] Kirby J reasoned to similar effect in the following passage: "[86] The applicant submitted that he was entitled to the issue of constitutional writs under s 75(v) on the basis that the Tribunal had constructively failed to exercise its jurisdiction in the manner contemplated by the Act. [6] This principle of relief has been applied in recent times, including in immigration decisions, where it is shown that the decision-maker "failed to consider the substance of [the application] and could only have failed to do so because he misunderstood what is involved in the Convention definition of 'refugee'". [7] … [88] Obviously, it is not every mistake in understanding the facts, in applying the law or in reasoning to a conclusion that will amount to a constructive failure to exercise jurisdiction. But where, as here, the mistake is essentially definitional, and amounts to a basic misunderstanding of the case brought by an applicant, the resulting flaw is so serious as to undermine the lawfulness of the decision in question in a fundamental way."
3. The use of the term "constructive failure" in this context may be understood by reference to a passage in the reasoning in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission, [8] where Kirby J stated: "[81] The remedies of judicial review invoked in this case are only available to require the correction of a category of legal mistake that goes beyond an 'error within jurisdiction' and amounts (relevantly) to a 'jurisdictional error'. Where a constitutional writ of mandamus is invoked, it will rarely be the case that an officer or authority with the power to decide defiantly refuses to exercise powers or functions conferred by legislation whilst acknowledging their existence and applicability. Ordinarily, in modern circumstances, what is involved is a constructive failure on the part of the officer or authority concerned to exercise such functions and powers. Such constructive failure may be traced to a seriously mistaken view of the facts or an error of law concerning the scope of the decision-maker's functions or powers."
4. In Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [9] Gaudron J identified statements of jurisdictional error generally as a constructive failure to exercise jurisdiction. [10]
5. These decisions in the High Court suggest that any form of jurisdictional error which is not a mistaken express refusal to exercise the powers of the court may be described as a constructive failure to exercise jurisdiction. [11] Importantly, there is no suggestion that it involves a novel or expanded category of jurisdictional error.
6. The terminology has also been used where the adequacy of reasons has been challenged. In LVR (WA) Pty Ltd v Administrative Appeals Tribunal, [12] that language was used with respect to detailed reasons given by the Tribunal which constituted an unattributed recitation of the submissions of one party: "[5] Although the appeal raises a short and orthodox question, the circumstances in which that question arises are, in our experience, unique. The reasons of the Tribunal extend to 59 paragraphs and, with the exception of a small number of words, phrases and sentences, were taken verbatim and without attribution from the written submissions filed in the Tribunal on behalf of the Commissioner. … Of themselves, these circumstances would give rise to a serious concern that the Tribunal had failed to bring its own mind to bear on the issues before it and thus that it had constructively failed to exercise its jurisdiction. …The position in the present case is not, however, left at that level of generality because of an additional fact. Thus we do not need to decide and do not decide whether or not there has been a constructive failure to exercise jurisdiction. [6] That additional fact is that the extensive copying, without attribution, of the Commissioner's written submissions filed before the hearing in the Tribunal did not extend to the only paragraphs of those submissions which considered the content of the affidavit of Mr HB Schokker sworn 21 June 2010 (the Schokker affidavit). …"
7. The Full Court referred to the practice of the Refugee Review Tribunal of using "standard paragraphs" to deal with common situations. It distinguished that circumstance, referring to the judgment of French J in WAFK v Minister for Immigration and Multicultural and Indigenous Affairs. [13] "[85] … In that case the issue arose from the use by the Refugee Review Tribunal of uniform text in some sections of its reasons, including sections in which it made findings about the credibility of the appellant. Counsel for the appellant submitted that the overwhelming majority of the 'independent information' which the Tribunal set out in its reasons was copied from previous Tribunal decisions. French J did not consider that, even if a cut and paste technique had been adopted, as seemed likely, that was indicative of a failure by the Tribunal to carry out its statutory function. While French J thought it would be preferable for Tribunal members in drafting their reasons to express their conclusions in their own words rather than those of another decision by another member, failure to do so did not indicate that the Tribunal member had not applied his or her mind to the facts or that the Tribunal member did not in fact hold the view expressed in the reasons given. French J found that no jurisdictional error was disclosed."
8. The Full Court in LVR (WA) concluded: "[91] In our view, speaking generally, it is more appropriate to consider these matters by reference to whether or not the tribunal has discharged its statutory role, its jurisdiction to review the decision before it, rather than to approach it by reference to procedural fairness or the inflexible application of policy or acting under dictation. In our view the fundamental question is whether there has been a constructive failure on the part of the decision-maker to perform its allotted task. In a particular case it may also be that adopting submissions has the consequence that the tribunal has failed to disclose its reasoning."
9. There followed a valuable review of the consideration of similar inadequacies in reasoning in both Australian and North American jurisdictions. In the course of that discussion, the Full Court referred to a matter reserved in the Supreme Court of Canada, judgment in which has since been delivered. In Cojocaru v British Columbia Women's Hospital and Health Centre [14] the Supreme Court addressed the circumstances in which a trial judge had copied submissions of one party without attribution, which were adopted as his own with the addition of some further reasoning. McLachlin CJ concluded: "[35] The concern about copying in the judicial context is not that the judge is taking credit for someone else's prose, but rather that it may be evidence that the reasons for judgment do not reflect the judge's thinking. They are not the judge's reasons, but those of the person whose prose the judge copied. Avoiding this impression is a good reason for discouraging extensive copying. But it is not the copying per se that renders the process of judgment writing unfair. A judge may copy extensively from the briefs in setting out the facts, the legal principles and the arguments, and still assess all the issues and arguments comprehensively and impartially. No one could reasonably contend that the process has failed in such a case. [36] To sum up, extensive copying and failure to attribute outside sources are in most situations practices to be discouraged. But lack of originality and failure to attribute sources do not in themselves rebut the presumption of judicial impartiality and integrity. This occurs only if the copying is of such a character that a reasonable person apprised of the circumstances would conclude that the judge did not put her mind to the evidence and the issues and did not render an impartial, independent decision."
10. While ground 1 referred to a failure to produce "a rational and reasoned conclusion", there was no submission that the award of compensation was "irrational"; nor was there any ground alleging that it was legally unreasonable in the sense accepted in Minister for Immigration and Citizenship v Li. [15]

(b) adequacy of reasons

1. Senior counsel for the appellant articulated his primary argument in language adapted from the reasoning of Asprey JA in Pettitt v Dunkley: [16] "… where in a trial without a jury there are real and relevant issues of fact which are necessarily posed for judicial decision, or where there are substantial principles of law relevant to the determination of the case dependent for their application upon findings of fact in contention between the parties, and the mere recording of a verdict for one side or the other leaves an appellate tribunal in doubt as to how those various factual issues or principles have been resolved, then, in the absence of some strong compelling reason, the case is such that the judge's findings of fact and his reasons are essential for the purpose of enabling a proper understanding of the basis upon which the verdict entered has been reached, and the judge has a duty, as part of the exercise of his judicial office, to state the findings and the reasons for his decision adequately for that purpose. If he decides in such a case not to do so, he has made an error in that he has not properly fulfilled the function which the law calls upon him as a judicial person to exercise and such a decision on his part constitutes an error of law."
2. This principle does not lead to the conclusion that, where the appellant has crafted its case in a particular way, it identifies facts "which are necessarily posed for judicial decision"; nor, where the respondent takes issue with any such fact or facts, is the case therefore dependent upon the "findings of fact in contention between the parties".
3. On an appeal limited to questions of law, it does not provide a basis for reviewing the judge's determination of what factual matters are in issue, or the manner in which the judge has determined them. This point was addressed in Resource Pacific Pty Ltd v Wilkinson [17] in the following terms: "[9] The adoption, on an appeal limited to errors in point of law, of language derived from the supervisory jurisdiction of the court must be undertaken with caution. It is, no doubt, an error of law for the trial court to fail to exercise its constitutional function, which is to resolve a dispute presented to it by the parties by applying the law in accordance with proper procedure. In the present case, that function was almost entirely satisfied by the resolution of disputed factual issues. The term 'constructive failure to exercise jurisdiction' is used to describe a situation where the court has purported to resolve the parties' dispute but has not in fact done so. Thus, particularly with a court or tribunal required to provide reasons for its decision, it may become apparent from those reasons that a material issue has simply not been addressed or that material evidence has been overlooked. Examples of circumstances which may properly give rise to a concern on this kind were referred to by Gummow ACJ and Kiefel J in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 at [23]. On occasion, the function of the decision-maker (which should include a court) has been identified as being to 'give proper, genuine and realistic consideration to the merits of the case': Kahn v Minister for Immigration and Ethnic Affairs (1987) 14 ALD 291 (Gummow J). (The language probably derived from its use in equity to describe the proper exercise by a trustee of a discretionary power in relation to the trust.) Although the nature of the exercise, particularly with respect to discretionary powers, involves no bright-line boundary, care must be taken that the statutory mandate of the appellate court, limited to errors of law, is not breached by adopting as a standard inherently value laden language: see Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; 243 CLR 164 at [30]."
4. As further explained in Boele v Rinbac Pty Ltd: [18] "[54] This approach, followed in Goodwin v Commissioner of Police [2012] NSWCA 379 at [19]-[25], is, perhaps, a preferable conceptual framework than the reference in Dranichnikov to a failure to accord natural justice. The word constructive may not be entirely apt, but it is understood as meaning 'purported', in the sense of there being the appearance of an exercise of jurisdiction, but one which does not conform to the requirements of the law. Whatever language is used, such a failure will generally involve jurisdictional error, analogous to a legally erroneous refusal to exercise an available power: cf Public Service Association of South Australia Incorporated v Industrial Relations Commission of South Australia [2012] HCA 25; 249 CLR 398 at [34] (French CJ) and [65] (Gummow, Hayne, Crennan, Kiefel and Bell JJ). It means that the process of decision-making in the tribunal, being the very function vested in the tribunal by statute, has miscarried."
5. It follows that the relevant grounds in a case alleging error of law are not expanded by reference to a constructive failure to exercise jurisdiction. If there has been jurisdictional error (including with respect to the determination of jurisdictional facts) there will have been error of law which can be addressed on an appeal limited to a question of law. In a case where a court has set out the competing material (thus engaging with an issue) and decides in favour of a particular result, without explaining why, the reasons will fail to meet the criterion of transparency required of judicial decision-makers. Where some reasons are given, expressly or implicitly the element of transparency may well be met, even if an appellate court considering an appeal by way of rehearing would find the reasons flawed.
6. To the extent that the appellant is not able to demonstrate that the trial judge failed to consider any essential element of the claim for compensation, a separate question will arise as to whether the reasons given for the outcome were sufficient in law.
7. If all the material evidence and submissions are identified in the reasons, the basis of challenge becomes a failure to record the process of reasoning from the evidence to a particular finding or outcome. But at what level of detail does the law require the process of reasoning to be recorded? In Pettitt v Dunkley [19] the error was in "the mere recording of a verdict for one side" without any statement of the findings made with respect to essential facts or reasons for decision. [20] In Soulemezis v Dudley (Holdings) Pty Ltd [21] this Court considered a challenge to a judgment in the Compensation Court rejecting a claim for workers' compensation. The hearing "took place over four days scattered over a period of more than a year". [22] The judge found that the applicant suffered a work injury, but awarded damages only for a closed period. The applicant sought to challenge the finding as to the termination date of the period. She was limited to an appeal in point of law. The termination date was the date on which a CAT scan had been obtained which showed no disc lesion consistent with her symptoms. The judge's brief conclusion was: "I am satisfied on the evidence that the applicant was totally incapacitated from 21 December 1982 to 17 January 1984 and fit for all work thereafter. I am satisfied that at the date of the CAT scan report the applicant was fit for all work."
8. Mahoney JA described the finding as involving "some incongruity", [23] but was not satisfied that the reasons were inadequate. He identified the question as "not whether some reasons must be given relevant to the findings of fact which are made, but what reasons are required." [24] Mahoney JA rejected the idea that there was a "formula the application of which to the instant case will indicate what, in that case, the judge must do." He regarded it as sufficient that "by his reasons the judge apprises the parties of the broad outline and constituent facts of the reasoning on which he has acted." [25] In response to the submission that the judge "did not explain, or explain with sufficient clarity, how the CAT scan could and did lead him to the conclusion that after 17 January 1984 the worker's condition changed", [26] Mahoney JA noted that conclusions of that kind "are not arrived at by syllogisms", but rather: [27] "The weight which a judge will give to the evidence of a witness will often be not capable of rationalisation beyond the statement: having heard him, I am not satisfied that I should accept what he says. The weight which a judge gives to a particular fact may be affected by, as it has frequently been put, his experience and, in particular, his experience of the significance of that fact in the order of things. … His reasons, in the particular case, may partake as much of intuition based on experience as on formal and deductive reasoning."
9. The other member of the majority in Soulemezis, McHugh JA, explained why, historically, the obligation of a judge in a civil case to give reasons had not been given careful consideration until the decline of juries in civil matters and the growth of appeals with respect to factual issues. [28] McHugh JA identified the basis of the rule that a judge must give reasons in the following terms: [29] "[A] judicial decision must be a reasoned decision arrived at by finding the relevant facts and then applying the relevant rules or principles. A decision which is made arbitrarily can not be a judicial decision; for the hallmark of a judicial decision is the quality of rationality: cf Lord Denning, Freedom Under the Law (1949) at 91. However, without the articulation of reasons, a judicial decision cannot be distinguished from an arbitrary decision."
10. The factual assertion in that statement may be doubted: it is only where statute has intervened that administrative decision-makers are required to give reasons, but judicial review has long been available on the basis that a particular decision is arbitrary or capricious. [30] A court might find that a decision was arbitrary or capricious, or the result of some undisclosed error of law, if on the material before the decision-maker the decision actually reached could not be explained on a rational basis. [31] Nevertheless, the statement is clearly correct in identifying the rationale for the requirement that a judge give reasons.
11. McHugh JA noted that "the present case is concerned with a finding of fact which involves no legal standard and is not subject to appeal." [32] He continued: [33] "It would be quite erroneous to find as a fact that the applicant was fit for work from the date of the CAT scan simply because the CAT scan failed to reveal any evidence of unfitness. However, the question is not whether his Honour's finding that the applicant was 'fit for all work' after 17 January 1984 was correct. It is whether his Honour gave reasons, however erroneous, for that finding. While it is true that his Honour did not expressly give any reasons for the finding, his reasons for judgment show quite clearly in my opinion that he held that the applicant was fit for work because the CAT scan did not reveal any abnormality. It is not to the point that his Honour's finding was erroneous or as counsel for the applicant claimed, perverse. … Accordingly there was no failure to give reasons sufficient to constitute an error of law."
12. Where the process of fact finding is unreviewable except to the extent that it reveals an error of law, the reasons required must be sufficient to demonstrate that the legal limits of the process have not been contravened. Having regard to the purpose of giving reasons, the standard is properly identified negatively: it must be shown that the decision has not been reached capriciously or arbitrarily, but rationally. The reasons must thus reveal that all material factors have been identified and addressed, and that no prohibited considerations have been operative. If there is an available process of reasoning from the evidence to the outcome which has been adopted, either expressly or by implication, the appellate court should be slow to reach the conclusion that the function of the trial court has not been exercised according to law.
13. Despite the suggestion, frequent in recent years, that the reasons should disclose that the judge has "grappled with" the issues to be resolved, this is a metaphor which provides little guidance as to the intensity or nature of the intellectual process required as a matter of law. Further, the description seems directed to reasons as evidence of a failure to exercise jurisdiction, and not as a standard of disclosure of the process in fact adopted.
14. In any event, such language is inapt to impose a particular standard. The standard should not be set at a level which risks an appellate review involving an assessment of the evidence, a function which is conferred exclusively on the trial judge where the appeal is confined to questions of law.
15. So much is clear from the reasoning of the majority in Soulemezis. It is true that McHugh JA stated in Soulemezis that where there was no right of appeal against findings of fact, "a failure to state the basis of or even a crucial finding of fact, if it involves no legal standard, it will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done." [34] However, the adage that "justice must not only be done, but be seen to be done", whilst a way of identifying the obligation to give reasons as part of the principle of open justice, provides no further assistance in identifying the standard to be applied.
16. In Li v Attorney General for New South Wales, [35] Brereton J (in dissent) stated: "[131] Although the underlying issue is fundamentally the same - whether the judge has applied his or her independent mind to the evidence and the issues so as to render an independent and impartial decision - the approach adopted by the Canadian Court in Cojocaru gives much greater emphasis to a presumption of judicial integrity and impartiality, and less to the appearance of justice having been done by the bringing to bear of an active, impartial and independent judicial mind, than does the jurisprudence in this country. I would not accept that one commences from the position that there is a presumption to be displaced; the essential issue is not only whether there has been, but whether there is also seen to have been, from the perspective of a reasonable person in the position of the unsuccessful party, an independent and impartial judgment. Moreover, I am unpersuaded that absence of attribution is entirely irrelevant; its danger lies in the appearance of obscuring what is being done, which upon being discovered by the unsuccessful party is calculated to exacerbate a sense of grievance from the appearance that its opponent's case has been adopted sub silentio, while its own was ignored. [132] Nonetheless, it is clear that extensive replication, whether or not attributed, of the submissions of one or both parties will not of itself amount to error, so long as the reasons sufficiently reveal that the decision-maker gave independent consideration to the relevant issues. However, this requires that the reasons appear to a reasonable person in the position of the unsuccessful party to demonstrate that the decision-maker has actively engaged with its submissions and contentions, and brought to bear an independent and impartial judgment founded on reason and logic. That requirement will not be satisfied if the reasons leave an impression that arguments have been embraced without serious consideration having been given either to the contrary point of view, or to the application of an independent point of view, as will be the case where reasons which substantially incorporate, reproduce and/or adopt the submissions of one party do not contain indicia, beyond mere formulaic and stylistic changes, that they are the product of the active application of an independent and impartial mind, which has absorbed and analysed the competing submissions to reach a personal conviction on the part of the judge that the orders to be made are just and in accordance with law."
17. The majority in Li v Attorney General rejected the phrase "justice is not seen to have been done" as a criterion of validity of judicial decision-making, as opposed to a value underlying the obligation to provide reasons. [36] It followed that an assessment of the adequacy of reasons was not to be undertaken by reference to the opinion of a reasonable person in the position of the unsuccessful party.

(2) constructive failure to exercise jurisdiction - application

1. The argument was in part presented as a global proposition that the trial judge had to resolve the case presented by the parties and failed to do so. In practice that meant the court had to determine the case as presented by the appellant at trial. The appellant submitted that the approach adopted by it was accepted by the respondent as the correct approach; however, that statement concealed important differences between the parties.
2. The function conferred on the Court was that set out in Pt 3, Div 4 of the Land Acquisition Act. The amount of compensation was to be determined having regard to the six matters identified in s 55. The first, market value, was to be determined in accordance with s 56. At the date of acquisition (December 2014) these provisions read as follows: 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division): (a) the market value of the land on the date of its acquisition, (b) any special value of the land to the person on the date of its acquisition, (c) any loss attributable to severance, (d) any loss attributable to disturbance, (e) solatium, (f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. 56 Market value (1) In this Act: market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. (2) When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition.
3. The appellant sought to value its fee simple interest in Lot 2 by proposing a staged mixture of uses as reflecting the highest economic value of the land. It contended that over a period of eight years (years 1-8) the land would be used for a waste processing business, involving some recycling and the use of uncontaminated residue as landfill; once areas were filled and levelled, they would be subdivided and sold for commercial or industrial development. A further scheme was proposed for valuing the land from years 9-29, when recycling and waste transfer would continue.
4. This process inevitably involved elements of risk and uncertainty at each stage of the process. The risks were identified and (at least in theory) built into the DCF model. However, the argument that each of the lines in dispute in the model was to be resolved by the Court was, the appellant accepted, subject to a qualification, namely that the Court could depart from the model proposed, but only in a way supported by the evidence and justified in its reasons. The appellant submitted that the Court below not having taken and justified an alternative approach, it was required to resolve the disputed elements within the DCF model.
5. That reasoning cannot be accepted without qualification; it sought to impose a rigid straightjacket on the Court's valuation function. That function involves an essentially factual exercise, [37] limited by the requirements of procedural fairness. The valuation exercise involved in assessing the market value of the land required consideration of the likely price to be agreed between a willing but not anxious buyer and a willing but not anxious vendor. The knowledge each would be expected to possess, and how each might be expected to obtain it, was considered in Apokis v Transport for NSW at [36]-[43]. The judge was entitled to reject the highly complex exercise undertaken by the appellant, which sought to reduce a myriad of uncertainties to a set of values which could in turn be subjected to an arithmetical calculation providing a single output. There was expert evidence, which the judge accepted, which expressly dismissed parts of the exercise as implausible and other parts as speculative. The extent to which the reasoning in this regard was adequate will be addressed below.
6. A failure to exercise jurisdiction may be global, or it may be particular. The listing of specific issues in ground 1 suggested that the complaint was addressed only to specific issues. There were in substance three elements to the appellant's case in the Land and Environment Court, namely claims based upon (i) the market value of the land; (ii) special value to the appellant as owner, and (iii) claims for loss attributable to disturbance. Both grounds focussed on (i) but also addressed (iii) in pars d and e.
7. The appellant's case at the global level involved three major complaints, namely that: 1. the parties presented an assessment of value based upon the use of a discounted cash flow (DCF) methodology, which the judge failed to follow; 2. all disputed issues which were resolved were resolved in favour of the respondent, and 3. the competing evidence was not examined and assessed.
8. It is helpful to provide some further explanation of each of these challenges, before considering the legal basis upon which a constructive failure to exercise jurisdiction may be demonstrated.
9. First, the use of the DCF methodology was adopted because there were no comparable sites which would allow a valuation of the land on a comparative basis. [38] Rather, the land was to be valued according to its commercial or industrial use. It was largely used as a waste disposal site, with a recycling component and a landfill component. Ultimately the land would be subdivided and sold for industrial or commercial purposes. The landfill exercise was expected to take eight years from the date of acquisition and the DCF methodology was separately applied to years 1-8 and thereafter, years 9-29, as separate exercises. The calculation was broken down into approximately 300 variables, of which it was said 100 were in dispute and required resolution by the trial judge.
10. The second matter, namely that the disputes were ultimately resolved favourably to the respondent, either raised a claim of partiality, or it challenged the adoption by the judge of the reasoning explained by the respondent's experts and summarised in the respondent's submissions.
11. The third limb of the complaint focused on the expert evidence. It was not suggested that there was no sufficient evidence to support the conclusions reached by the judge nor, for the most part, was it said that he did not advert to the evidence, at least by way of setting out the parties' submissions in respect of it, but rather that he failed to "grapple with" the matters in dispute. The point might also have been described as a failure to give proper, genuine and realistic consideration to the evidence and the submissions. [39]
12. In so far as the appellant alleged a global failure to exercise jurisdiction, it is important to note that a number of factors told against the merit of such a challenge, namely: 1. the judge did not refuse to hear the case, but presided over a hearing extending over 50 days; 2. the judge made numerous interlocutory rulings, delivering five interlocutory judgments, only one of which was (indirectly) challenged; 3. he also made orders which, in their terms, addressed and resolved the ultimate issue, namely the just compensation to be paid for the acquired land; 4. the judge gave reasons for that outcome covering some 270 pages and 861 paragraphs; and 5. the reasons were structured, expressly identified the key issues, and outlined the evidence and submissions on the different issues. It thus becomes necessary to examine the appellant's submissions as to specific issues to demonstrate that, despite appearances, the judge had not applied his mind to resolving the issues in dispute.

(3) Challenges to findings

1. There is no complaint that the trial judge did not adequately identify the plethora of discrete and interrelated issues raised by the parties. Rather, the complaint is that there were particular issues which were not resolved and other issues which were resolved without adequate reasons for their resolution.

(a) default acceptance of respondent's case: ground 1(c)(ii)

1. The global complaint was that on all material issues the judge adopted the submissions of the respondent. Assuming that to be so, that fact does not of itself demonstrate legal (or factual) error. For example, a person may only be convicted of a crime if a court or jury is satisfied that every element of the charge has been established, and established beyond reasonable doubt. The fact of conviction is not a ground for challenging its legality of the process. Otherwise, there appears to be an implicit suggestion of partiality. That complaint was explicitly raised by ground 4, where the complaint was particularised. It will be addressed in dealing with ground 4.
2. It was submitted that those parts of the reasons headed "Consideration" in key areas failed to "grapple with" the issues identified in the preceding summaries of the parties' submissions. However, as noted above, the physical metaphor is of limited assistance in describing an intellectual process. Particularly in circumstances where a choice is required between factors involving evaluative judgment, it may not be necessary or possible to give expansive reasons, if the various competing factors have been identified and addressed. Nor is it necessary that the judge must consider a compromise.
3. In most cases, the judge expressly or implicitly adopted the respondent's submissions for a particular conclusion. This was not a case of unattributed adoption, as considered in LVR and Cojocaru. No authority was relied upon by the appellant for the proposition that adoption of one party's submissions was inadequate to satisfy a judicial obligation to give reasons. In a multi-member court, it is common place for one judge to adopt the reasoning of another. To the extent that the setting out of reasons for a decision is conducive to good decision-making, there could be an objection to that practice, but it is not suggested that a judge who agrees with another judge has failed to provide reasons. On the other hand, the adoption of reasons will not provide an adequate compliance with the obligation to give reasons if the reasons adopted are themselves inadequate. Thus, if the reasons of one party adopted by the judge do not adequately engage with the other party's case, they may not demonstrate that the judge has engaged with that case. Accordingly, it is necessary to look at the content of the adopted submissions in considering a ground of challenge to the adequacy of the reasons and so far as they are relied on to demonstrate a failure to exercise jurisdiction.

(i) discount rate

1. In identifying the approach to the valuation of Lot 2, the trial judge noted that it was necessary to determine whether the "highest and best use" was its existing use or an alternative use for which the land possessed potential and to which it could be advantageously adapted. [40] For that purpose he noted that "the parties agreed to employ DCF methodology …, by which the valuation of Lot 2 is to be calculated by forecasting future revenue, risks and costs, and applying an appropriate discount rate to the cash flow so determined." [41] Each party called a "business valuation expert". The appellant called Mr Tony Samuel; the respondent Dr Rodney Ferrier. In addition to providing his own report, Dr Ferrier undertook a joint report with the respondent's land valuation expert, Mr Lunney. The land and business valuation experts prepared a joint report. A further joint report by Mr Samuel and Dr Ferrier went through several iterations, a final amended report being provided on 9 April 2018, following the last day of the trial. [42] This was not an idle procedural detail; rather it reflected the complexity of the task and the interrelationship between various aspects of the valuation.
2. The trial judge noted that the required exercise had resolved, in the following manner: "[140] Throughout the proceedings, ALF considered several valuation scenarios for Lot 2, posed by its respective experts. Its suggested valuation scenario, for highest and best use, comprises: (1) Landfilling for 8 years by importation of waste soils; (2) Operation of a recycling business (on various parts of the land) in years 1 to 8; (3) Subdivision of "surplus" land; and (4) Operation of a new RRWTF building in years 9 to 29. [141] The Respondent accepted only the first component of that valuation scenario, and disputed the physical, regulatory and/or financial feasibility of the others."
3. The result was an exercise in extreme artificiality. The possibility that either a willing but not anxious vendor or a willing but not anxious purchaser would have engaged in the exercise proposed by the appellant would seem, in practical terms, to be a remote possibility. Yet, subject to the matters which must be disregarded, that is the assessment required by s 56(1) of the Land Acquisition Act. A commercially plausible exercise would not require the meticulous evaluation of multiple discrete calculations with cascading sets of variables. If the judge in fact made some broad evaluative assessments after hearing all the evidence, it could not be said that he acted otherwise than appropriately in carrying out the function of a "judicial valuer". Nevertheless, in a passage not criticised by the appellant, the judge noted: "[435] There are three key issues in relation to business value: (1) The after-tax discount rate to be applied to business related cash flows; (2) The after-tax discount rate to be applied to initial stockpile remediation cash flows; and (3) The valuation of Area E, based on the cash-flow of the future business."
4. In relation to (1), the judge commenced: "[436] The main issue between the business valuers related to the appropriate discount to be applied to the business-related cash flows. [437] In calculating the discount rate, both valuers were required to assess the projected cash flows against inherent business risks. [438] Generally, the experts adopted different calculation methods to generate a discount rate. In Mr Samuel's view, the appropriate discount rate is 8.7% for all businesses, for all periods, derived on the basis of the weighted average of the cost of debt and the cost of equity (i.e. the Weighted Average Cost of Capital - 'WACC'), using the Capital Asset Pricing Model ('CAPM') to establish the cost of equity component: CB 65, Appendix E, par 7. He observed (CB 69, p16, par 6.12.) that: [This approach] establishes the risk free rate and market risk premium by reference to market data, and the cost of debt by reference to ALF's circumstances. It is only the beta element of the cost of equity that is determined by reference to comparable companies, and a typical industry gearing ratio. ... (The "beta element" is an allowance made for "volatility" in the relevant industry at a particular time.) [439] Dr Ferrier observed that it is only appropriate to derive a cash flow for the 'Year 1-8 option', on the basis that landfilling will cease by the end of year 8, and further uses will not be 'inextricably linked' or 'uniquely tied' to the land, and are too uncertain to warrant a DCF calculation: see CB 69, p26, par 6.49(c); CB 128, p8-9, par 2.18. [440] In relation to the cash flows for the 'Years 1-8' option, Dr Ferrier opined that the appropriate methodology to determine the discount rate in this case would have regard to 'Earnings Before Interest Tax Depreciation and Amortisation' (EBITDA), and analyse a number of sales of significant assets (principally operating waste disposal businesses) within the landfill industry: CB 60, p47. Although Dr Ferrier originally derived a discount rate of 19.5%, he ultimately arrived at a discount rate of 13.9%, on the basis of reassessing his discount rate without reference to the Bingo Pty Ltd company listing transaction: CB 69, p28, par 6.59. [441] Noting that the primary position taken by Dr Ferrier and Mr Lunney is that a DCF approach is not appropriate at all from year 9 onwards, Dr Ferrier derives a discount rate of 20.9% (being a 50% increase over 13.9%), if it is relevant, for the years 9 to 29: CB 60, p50, par 150."
5. What followed from [443]-[471] was a detailed exposition of the differing views of the two experts, including each expert's critique of the other's methodology.
6. The judgment identified five elements of the model as to which the experts disagreed, [43] noting that they "primarily disagreed on the applicable risk-free rate" [element 1]. The reasoning continued: "[448] Dr Ferrier disagreed with this approach, and would have adopted a risk-free rate of 4.9%, in accordance with the long term Australian market data published by the Independent Pricing and Regulatory Tribunal of NSW ('IPART'), this State's independent statutory pricing regulator, which undertakes independent reviews and investigations into a diverse range of economic markets, including for water, public transport and local government. [449] In particular, Dr Ferrier observed that, with respect to the IPART document, whether short term or long term, adding the risk free rate with the market risk premium gives approximately the same total risk: CB 69, p30, par 6.63. In explaining this calculation, Dr Ferrier noted (CB 69, p30, par 6.63.): In February 2015, IPART published its WACC Biannual Update (attached as Annexure A to this joint report). That document reported a long term (10 year) average risk free rate of 4.9% and a long term (10 year) average market risk premium of 6.0%. It also reported a short term (40 day) average risk free rate of 2.7% and a short term (40 day) average market risk premium of 8.3%. Mr Samuel's risk free rate (which is the risk-free rate which existed on the date of compulsory acquisition) and his market risk premium (which is a long term average rate and not the rate which existed on the date of compulsory acquisition) are not consistent with the parameters reported by IPART. [450] During cross-examination, Mr Samuel was questioned on his approach to the IPART analysis, and the determination of the 8.3% short term risk rate, and this exchange occurred (Tp2145, LL2-20): LANCASTER: If you make the assumption that IPART have in table 1 on page 70 correctly identified both risk-free rate and market risk premium as at 40 days and as at 10 years, that does create a situation in which your selection of the market risk premium would not sit at all comfortably with your selection of the risk-free rate, if they are right about it? WITNESS SAMUEL: If I had to adopt your assumption, I would agree with you, but I don't know how that figure's been determined. LANCASTER: Do you have any reason or basis to doubt the IPART analysis, or you just don't know how it's been determined? WITNESS SAMUEL: The IPART analysis tells us the long-term market risk premium is 6 per cent, and I'm not sure what the 8.3 per cent is purporting to be."
7. It may be observed that there was close engagement in the opinions expressed by each expert with the counter opinion expressed by the other. The same engagement was to be found in the differing the views as to how one approached the discount rate for the period of 9-29 years after acquisition. [44]
8. Assuming that the judge had no relevant expertise in this area, how was he to resolve the differing views of the experts? One possibility was to state that he found the reasoning of one more persuasive; another was to accept that the experience and credentials of one were of higher quality than those of the other. In fact the judge adopted both. He noted their areas of expertise in the following terms: "[431] Mr Tony Samuel was the business valuation expert for the Applicant. He is an Accountant, who holds a Bachelor of Commerce and a Diploma in International Commercial Arbitration. He has expertise in the valuation of shares, business entities and intellectual property. [432] Dr Rodney Ferrier was the business valuation expert for the Respondent. He holds a Diploma in Technology (Commerce), Bachelor of Arts, Master of Economics (Accounting), and is a Doctor of Philosophy. He has approximately 49 years of experience as an accountant, and has expertise in the valuation of shares, business entities (including waste processing and recycling facilities), and other assets."
9. In making findings (which in this respect he undoubtedly did) the judge noted again the three issues which were to be addressed, [45] summarised the submissions of each party, [46] and then explained his decision in the following terms, shorn of the detail: "[676] I have several reasons for rejecting Mr Samuel's DCF discount rate, and accepting Dr Ferrier's: (i) Dr Ferrier's superior qualifications and experience in the assessment of compensation under the JTC Act, in cases involving extinguishment of a business, and his clear understanding and articulation of relevant provisions of the Act, DCF, and related methodology. (ii) Mr Samuel's use of comparable businesses and transactions in this case was flawed, and Dr Ferrier's was correct. Mr Samuel excluded from his list of comparable stock exchange listed corporations the only two which involved Australian (NSW) businesses. Mr Samuel persisted in relying upon business statistics of large to very large US corporations, and large to very large European (French, Finnish, and UK) corporations. These are listed in Mr Samuel's Appendix F to CB 65. For each company, the relevant currency is given, as well as the market capitalisation (as at 19 December 2014), net debt, enterprise value (EV), EBITDA and the ratio EV/EBITDA. (iii) In Dr Ferrier's opinion, which I accept, the information obtained from these corporations is not comparable to the potentialities of carrying on business on Lot 2. … (iv) Mr Samuel accepted, in cross-examination, that having excluded the Transpacific company, all the large overseas US and European listed companies in Appendix F had market capitalisations in the hundreds of millions, if not billions, of dollars. Mr Samuels had noted that the Betas of Transpacific (1.5) and the Tox Free company (0.18), both of which are Australian, were deliberately excluded by Mr Samuel from his basket of so-called comparable businesses. He agreed that these two Betas were 'wildly different' from each other, and from those of the other (overseas) companies he was considering." This reasoning, which ended with a further expression of his preference for the reasoning of Dr Ferrier, [47] extended over some seven pages.
10. There is no doubt that the trial judge made a finding with respect to the appropriate discount rate, at least for the period to which he accepted it was necessary to apply a discount rate, namely Years 1-8; he applied the rate identified by Dr Ferrier.
11. The submission that he did not give any reasons for that finding is patently untenable. The submission that the reasons were in some way "inadequate" is best characterised as a disagreement with the reasons in fact given. Indeed, so much appears from ground 3 which acknowledged that one step in the reasoning process was to accept the experience and qualifications of Dr Ferrier in preference to those of Mr Samuel. (The separate challenge to that reason is addressed in considering ground 3 below.)
12. In so far as the manner in which the judge dealt with the discount rate was an example (indeed a primary example) of the criticisms levelled in grounds 1 and 2, those grounds must be rejected in that respect as untenable.

(ii) waste operations

1. The heading "waste operations experts" was used by the trial judge in referring to the evidence of three experts who were experienced in the business of waste management and landfill operations. That was the principal commercial use to which the site was put at the date of acquisition. The expectation was that a purchaser would continue to operate such a business for a period of years until a stable foundation had been achieved and the land could be subdivided and sold for general industrial purposes. Broadly speaking, there were two major variables in the proposals put forward by the respective experts. One was the timeframe within which waste operations would continue. The appellant forecast a 29 year timeframe, though with parcels of land being subdivided and sold off over the period. The respondent's experts anticipated that a purchaser would likely plan on filling the area within eight years and subdividing and selling at the end of that period.
2. The second variable concerned the potential use of the land for a recycling business. This was described as a use for a "resource recycling and waste transfer facility" (RRWTF). The appellant's case was that such a use would be commercially viable in years 1-8 and would continue throughout years 9-29. The respondent's position was that such a business would not be sufficiently profitable to persuade a purchaser to engage in the necessary expenditure, given the associated risks.
3. There were a large number of factors involved in these assessments. The waste operations experts provided their own reports, including reports in reply to each other and a joint report. They engaged in a further joint conference with the business valuation experts and prepared a joint report with them. After the commencement of the hearing each prepared a further supplementary report and conducted a joint conference with contamination and stockpile experts. Finally, and importantly, they prepared a further joint report with respect to the construction of a shed, which was a condition of the existing approval for recycling activity and which had not been constructed. (The Land Acquisition Act, s 56(1)(c) required the court to disregard a use carried out in a manner contrary to law.) Where it was to be constructed was a significant issue, as was the extent to which it would be moved over a period of years to accommodate completion of landfill operations in particular areas and the subdivision and sale (on the appellant's case) of portions of the land. [48] The judge identified the options outlined by the appellant's expert (Mr Webster) and the principal expert for the respondent (Mr Berkefeld) in the following passages: "[218] In his initial report, Mr Webster outlined four options, in which Lot 2 could be operated in order to 'maximise the value of the existing [landfill] airspace': CB 43, p23. He proposed the following options: (1) Option 1 - Maintain the status quo, with minimal residual materials from recycling activities being disposed of to landfill on site. (2) Option 2 - Undertake recycling activities on site, with all residual material being disposed of within the Alexandria landfill. (3) Option 3 - Filling the landfill void, within eight years from the DOA, and operating a recycling facility, concurrently. (4) Option 4 - Filling the site as rapidly as possible, and erecting a new RRWTF to operate on the land from years 9 to 29. [219] On the other hand, Mr Berkefeld suggested three elements to the proposed business (CB 44, par 27): (1) Operation of a Mixed Waste Recycling Facility and the disposal of residuals offsite; (2) Operation of a landfill by filling the site with waste soils; and (3) Operation of a temporary crushing operation to crush existing concrete stockpiles for re-use on site."
4. With respect to the construction of the shed, the waste operations experts took advice from the town planning experts as to the need to construct a building, whether it would require to be moved and if so whether a new development application would be required and whether that might in turn trigger a requirement for a new development application for the whole of the site. [49] The judge noted the following concessions made by the appellant's expert: "[230] During the cross-examination, Mr Eastman asked Mr Webster about the construction of the undercover facility. In contrast to his earlier opinion, he conceded that the undercover facility would have to be built three times. Firstly, the resource recovery facility would be built within 8 to 12 months on Area B. Further, Areas C and D would be filled over three to four years. [50] Secondly, it would be constructed on area D at the beginning of year 4. [51] Thirdly, it would be constructed on Area E at the beginning of year 9, and operate there from years 9 to 29. [52] "
5. The appellant's experts considered that a purchaser would allow 8-12 months for the relevant approvals and construction of the shed; the respondent's experts concluded that the exercise would require 15-18 months, thereby, in each case, delaying the opportunity to obtain income from a recycling operation for that period. [53]
6. The appellant submitted in writing that there were two important inputs which went to the "core of the viability of recycling operations", namely: [54] "• The period for which recycling operations would necessarily have to be 'deferred', assuming that a purchaser/operator would accept that they ought not or could not carry out such operations pending the construction of a shed; and • the amount of materials then to be processed (either at licensed levels or at a distinctly lower level)."
7. The appellant complained that the judge resolved these issues simply by adopting the respondent's submissions and thereby concluding that the RRWTF operations "are no more than speculative, and would not form part of the highest and best use of Lot 2, which, put shortly, I find to be to fill the land for 8 years and then sell it in a single parcel." [55] This submission cannot be accepted; it disregarded important aspects of the judgment.
8. Before turning to the reasoning directed specifically to the proposed use of the land, it should be noted that the judge had identified in considerable detail the issues and evidence presented by experts in (i) town planning; [56] (ii) traffic controls; [57] (iii) geotechnical evidence; [58] (iv) waste operations; [59] (v) environmental and contamination issues; [60] (vi) environmental management; [61] (vii) quantity surveyors; [62] (viii) land valuers; [63] and (ix) business valuers. [64] The expert evidence extended to topics such as the likely gate fees to be obtained from acceptance of waste material and the value of any timber and plastics recovered from such material. There was also evidence as to the proportion of material which might be recyclable, given the likely catchment area of the site. [65]
9. The judge's conclusions with respect to this issue were set out in the following terms: "[519] Upon consideration of the evidence and submissions, I accept the Respondent's submissions on the highest and best use, and have come to the following conclusions: (1) On the [date of acquisition], there existed the potential to continue the filling of the landfill void, on Area E, as a profitable enterprise, provided the fill material attracted no landfill levy. This could be achieved by allowing fill consisting of excavated natural material (ENM), and could be totally filled in 8 years; and (2) Resource recovery (RR) activity was permitted under existing [development consents], but was limited primarily to a maximum of 240,000 tonnes per annum, and time-limited to one further five-year extension, subject to the continuation of the landfill and the construction of a building in which to conduct RR; and (3) When the activities (1) and (2) above cease, at the end of the 8 years, the highest and best use of the land would be to liquidate it by sale of the unsubdivided areas post closure of the landfill, and to provide for long term leachate and land fill gas infrastructure and maintenance."
10. The judge then continued: "[520] I shall now elaborate on my reasoning. [521] The Court accepts Mr Eastman's summary of the geotechnical considerations, which affect the highest and best use for Lot 2: [66] 'The way the geotechnical evidence affects my case directly is to say the highest and best use of this land is not for placement of an RRWTF on area E at the end of the landfilling operation and then have a discounted cashflow, to immediately project income from, … The question is the applicants' valuation commences its income on the RRWTF from day 1 of year 9. That is not viable, it is not possible, and cannot be part of the highest and best use. That, on my case, is perhaps the critical issue that arises out of the geotechnical evidence and … is what might be characterised as the disarray in the applicants' case of coordination between different experts on who is dealing with which part of timing and which part of the works that are being done on each of these components of the land.' [522] Mr Eastman described the competing evidence, as follows: [67] 'Your Honour might recall in a general sense I asked Mr Mostyn some questions about a lot of academic articles and about what projections were made for settlement, and what seemed to be germane to that were two things: whether you'd look at a snapshot like Mr Mostyn did, or whether you would look more broadly, like Dr Thomas did; and, secondly, if you would make some safe assumptions about what's already under the ground, which Mr Mostyn thought is pretty clean and unlikely to be biodegradeable and therefore causative of differential settlement over time, whereas Dr Thomas took a different view and he based that on bore hole logs and other things. That essentially means, if you were to accept Mr Mostyn's view, you are accepting as the applicants' (sic) put in their written submissions, yes, settlement might take a long period of time, but it's not of a significant magnitude that couldn't be dealt with. On the contrary, the respondent's evidence is you can't make that projection and to do so would be to deny two critical facts: one is what information we have on what's actually under the landfill; and, secondly, the approach that the academic articles have taken. If you accept Mr Mostyn, you've still got the first problem I have identified, but if you accept Dr Thomas, there is no way that there would be any real projection of doing development in the way that the applicants' (sic) have projected on essentially any of areas C, D and E without waiting or, alternatively, incurring such significant costs that before you'd even factor that into a DCF, that approach would be rejected. That's what Dr Thomas essentially said in the second joint report …. That then is the critical issue between them.' [523] The Court prefers and accepts Dr Thomas's geotechnical evidence, on three grounds: (a) he holds qualifications, and has extensive experience, in assessing the geotechnical and geo-environmental engineering aspects of landfills, and in contaminated land regeneration. I accept his approach to the due diligence requirements, which are required to address the geotechnical risks associated with differential settlement, the decomposition of fill containing significant portions of wood waste, and engineering foundations required to develop the site. In contrast, Mr Mostyn has recommended limited due diligence considerations, beyond the AECOM geotechnical investigations. (b) Dr Thomas was more thorough in researching the differential settlement rates, and he considered extensive research done in regard to similar landfill sites, and the settlement of waste fill, both prior to and after the filling of the sites with structural fill. Noting the thickness of waste fill in PDA2 of the site, Dr Thomas's advice to the hypothetical purchaser considers the structural risks which would likely affect the site's development, if additional piling or an alternative foundation system were not to be adopted. (c) Mr Mostyn's evidence was premised on the assumption that the hypothetical purchaser holds 'experience in developing large sites for industrial/commercial uses'. Such an assumption flies in the face of authority. … [524] The parties to the hypothetical sale would have sought geotechnical advice regarding: (1) The extent and nature of geotechnical investigations that a hypothetical purchaser would be advised to undertake, to ascertain the state of Lot 2; (2) Whether, as at 19 December 2014, any part of Lot 2 was, or could be made, suitable for the erection of buildings for the purposes of industrial development; (3) The type, scale and structure of any buildings, which could be constructed and maintained on Lot 2; and (4) The extent of geotechnical works that would be necessary to enable any parts of Lot 2 to be used for future industrial purposes. [525] Although the Applicant and Respondent accepted the first component of the highest and best use of Lot 2, they proposed differing inputs (and businesses) for the agreed period Years 1 to 8. The Applicant suggested recycling operations on various parts of the site (Areas B, D and E) at line items 36 to 92 of the Years 1-8 …, but the Respondent provided competing final calculations in response to those line items at Annexure B to its final submissions. [526] Taking into consideration the two alternative business models, I accept that the Years 1 to 8 operations should be limited to the Respondent's model."
11. While it is true that the evidence of each party appears to have engaged in detail with the assumptions and positions of the other party, including through the use of extensive joint conferencing between the various experts, it did not follow that the judge was required, in indicating his preferred approach, to address all aspects of the evidence which he did not accept. The reasons set out above were rational and provided a sufficient basis to determine the most financially advantageous use of the land, likely to be accepted by the hypothetical purchaser. That person or entity would not be required to engage in the precise exercise undertaken by the experts for the appellant. Accordingly, in so far as grounds 1 and 2 rely upon the judge's conclusions with respect to the waste operations, they must be rejected.

(iii) stockpile 21

1. The appellant identified a "central issue" in relation to determination of the market value of lot 2 as the costs of "initial site remediation". [68] The judge agreed. [69]
2. There were a number of stockpiles of waste material on the site, of which the largest was Stockpile 21. At the date of acquisition, "clean up" notices had been served on the licence holder, Boiling Pty Ltd, requiring it to test and dispose of asbestos-contaminated soil. Testing was being undertaken, but had not been completed at the date of acquisition. The cost of site remediation accounted for a large variable in the calculations undertaken by the appellant and the respondent, the appellant allowing a cost of $1.8 million, the respondent assessing the cost at $37.7 million. A large proportion of those sums was identified as "non-compliant stockpile treatment" in the DCF calculations.
3. This issue was significant because, to a lesser degree than other matters, it was not dependent upon detailed inputs into the DCF calculation. Rather, it was dependent upon an assessment of (i) the history of acceptance of asbestos contaminated material and regulatory responses, (ii) the expert evidence, and (iii) an evaluation as to how a hypothetical purchaser would approach the uncertainties in dealing with the stockpile.
4. The expert evidence in relation to this issue was extensive. Each party engaged an expert on contamination, who prepared a report; they conferred and prepared a joint report. [70] The appellant's expert, Dr Bill Ryall, was joined by Dr Daniel Martens and there was further joint conferencing with the waste operations experts, Messrs Webster, Berkefeld and Haywood. [71]
5. The reasoning of the trial judge may be summarised as follows. With respect to the history of the deposits, the judge set out in detail the timing and conditions of two environment protection licences current with respect to Lot 2 as at the date of acquisition, including variations, transfers, the issue of clean-up notices, variations to the clean-up notices, pollution studies, pollution reduction programs, the annual returns and the identification of acceptable waste. The judge also identified the non-compliance records, in a passage which extended over more than four pages of the judgment. [72] The judge noted that there were approximately 24 stockpiles located on Lot 2, [73] and that "[a] central issue in this matter is the cost that a hypothetical purchaser would consider that it would need to incur, at the [date of acquisition], to deal with non-compliant stockpiles on Lot 2." [74] The evidence addressing that issue was summarised at [304]-[328]. The judge then considered in detail other aspects of environmental management of the site, including dealing with leachate and landfill gas.
6. In section 15 of the judgment, commencing at [472], the judge turned to consider the most financially advantageous use of Lot 2. He concluded, at [553] that the most advantageous use would be "to fill the land for 8 years and then sell it in a single parcel." The judge then turned to consider the market value of Lot 2, calculated on that basis. After identifying the relevant legal principles, the judge turned to consider contamination considerations (section 16.2). He noted that the primary contest involved the costs associated with handling the non-compliant stockpiles, especially SP 21. [75] He identified the appellant's case in favour of preferring the advice of its experts as involving two elements. The first was that the respondent's expert, Mr Clay, was not qualified and was not credible, but rather was "particularly partisan". [76] Secondly, the Court was invited to accept Dr Ryall's classification of the stockpiled materials on the basis that the clean-up notices only applied to material added after 2007/2009 and that the work required under the notices was at or nearly complete at the date of acquisition. Each of these matters was challenged by the respondent, as the judge observed at [562]-[571]. For example, the judge noted: "[568] The Respondent also refuted the charge that Mr Clay's evidence was 'partisan'. He had genuinely attempted to assist the Court, by, firstly, preparing eight comprehensive expert reports; secondly, utilising consultant reports post-acquisition to confirm his foresight; and, thirdly, providing adequate reasons for his amendments to final costings for non-compliant stockpile treatment."
7. It is clear that the judge rejected the criticisms of Mr Clay, whom he had seen and heard as a witness, stating: "[572] Both experts are appropriately qualified to advise the hypothetical purchaser, and have assisted the Court in determining the relevant costs. Having considered the competing considerations advanced by both witnesses, I have accepted Mr Clay's evidence on the appropriate values to insert into the DCF spreadsheet for line items 95 and 96."
8. The judge then set out, emphasising passages which he considered important, oral submissions made on behalf of the respondent which, in particular, took issue with Dr Ryall's evidence on the basis that he failed to take into account the fact that the stockpiles were "working stockpiles for many years" and changed over time. [77]
9. The trial judge restricted the use of reports produced after the acquisition to their function as evidence confirming the foresight of substantial due diligence and associated costs, which the hypothetical purchaser would expect to have to undertake and incur. [78] The judge concluded: "[578] Dr Ryall's choice of categories to describe materials within the stockpiles is neither related to any approved study, nor prescribed by any relevant regulatory body, or environmental report. Mr Clay correctly identified the issues with Dr Ryall's reliance on the ADE reports. Accordingly, the Court accepts Mr Clay's calculations for the costs in line items 95 and 96."
10. This reasoning involved a rejection of the challenge to Mr Clay's credibility as a partisan witness, and an acceptance of his evidence based on his qualifications and expertise. It is clear that, through exchanges of written reports, joint conferencing and the preparation of supplementary reports, together with oral evidence and answers given in cross-examination, the experts thoroughly engaged with each other's assumptions and calculations. An appellate court would find it difficult to interfere with findings of the kind made by trial judge if this were an appeal by way of rehearing. But this is not an appeal by way of rehearing: as a matter of law, it is clear that the judge gave reasons for preferring one primary expert over the other in dealing with the contamination issue. He identified the relevant material and the submissions made by the appellant in pursuit of its claim. That is sufficient to reject challenges based on a failure to exercise his judicial function and on a failure to give reasons for adopting a particular figure as a cost the hypothetical purchaser would have taken into account in valuing the acquired land.
11. In written submissions in reply, the appellant stated: [79] "The mere fact that his Honour set out the earlier extract [of issues and evidence] does not demonstrate any engagement with that evidence in the later resolution of this issue, which was a significant difference in excess of $30m between the parties for an input in the DCF model. The Applicant's detailed closing submissions on Stockpile 21 are not extracted or summarised." While observing that the judge appeared to have accepted the respondent's submission that the relevant clean-up notice "remained on foot", [80] the appellant complained that the judge made no reference to the appellant's submission that the notice "could not bind an incoming purchaser".
12. Although it may have been true that the judge did not expressly refer to that aspect of the appellant's submissions, Mr Clay's evidence addressed precisely that issue, including a letter from the Environment Protection Authority dated 8 July 2015, stating that "the EPA is of the clear view that further clean-up action will be required to remove Stockpile 21. As a result, the EPA will issue a new draft clean-up notice to [the acquiring authority] for its review and comment prior to finalising a new clean-up notice for Stockpile 21." [81] It is likely that this was evidence of the kind which the judge had warned himself in relation to, namely post-acquisition evidence confirmatory of foresight. He was entitled to accept it on that basis. His acceptance of Mr Clay's evidence implicitly covered that issue.
13. To the extent that the manner in which the trial judge dealt with Stockpile 21 was the subject of grounds 1 and 2, those grounds must be rejected.

(iv) DCF methodology - other line items

1. There were other specific complaints raised by the appellant relating to grounds 1 and 2. In addition to the issues addressed above, the matters relied upon were line items in the DCF calculation sheet presented to the trial court by the appellant and addressed in terms by the respondent. However, as the appellant effectively acknowledged, the exercise was by no means self-contained and precise, although it required the input of precise figures. In its written submissions in reply in this Court, the appellant stated: [82] "The findings of the trial judge, including: • the cessation of all recycling operations previous[ly] conducted on Lot 2; • the limitation on filling activity to a finite period of 8 years; • the installation of maximal environmental management infrastructure, at the highest cost; and • eventual sale of the en globo parcel at modest industrial land prices at the conclusion of the 8 year period, logically mean that the cash flows derived for this 'most likely use of the land' would then be secure, even very secure. A proper use of the expert valuation evidence about formulating discount rates would need to reflect on those findings in the determination of the appropriate rate."
2. This was not an assertion of a legal error, but rather further explanation of the facts. Putting that to one side, it illustrated the methodological flaws in the exercise undertaken by the appellant. The complaint was, in effect, that once the most financially advantageous use had been ascertained a different discount rate should be applied. However the complaint (i) assumed that the findings which formed the basis of the calculation as to the most advantageous use of the land were "highly conservative"; (ii) failed to account for the fact that the discount rate had been applied in determining that use; and (iii) failed to account for the fact that they were not the assumptions relied upon by Dr Ferrier and accepted by the judge.
3. The submissions highlighted the fact that the discounted cash flow calculation involved a series of evaluative judgments which could only be reduced to precise figures on a spreadsheet in an artificial way which was apt to be misleading. The appellant's commitment to the creation of a spreadsheet on which it could identify each of almost 300 line items as "agreed", "disagreed" or "calculated", and then to require detailed reasons with respect to each line the subject of disagreement was apt to distract from the evaluative assessment as to how the hypothetical willing but not anxious buyers and sellers would likely reach agreement. There is no reason to believe that the trial judge lost sight of that statutory exercise.
4. For these reasons, grounds 1 and 2 should be rejected.

Ground 3 - procedural unfairness

1. Ground 3 read as follows: "3. Further, and in the alternative, the Court erred in respect of a decision on a question of law by a denial of procedural fairness by expressing a preference for a critical witness, Dr Ferrier, based upon perceived experience in the Court's compensation jurisdiction without providing an opportunity to the Appellant to comment upon or provide critique of that potential finding."
2. This ground largely reflected the language of ground 1(c)(iii). However, the written submissions dealt with the matter in a different basis, stating: [83] "Further, an expressed reason for rejecting Mr Samuel in favour of the RMS witness (Dr Ferrier) was Dr Ferrier's perceived 'superior qualifications and experience in the assessment of compensation under the JTC Act'. This demonstrates a fundamental misunderstanding of the function of those experts, as well as of the particular 'specialized knowledge' being utilized by those experts. It provided no proper basis for adopting Dr Ferrier's expressed discount rate."
3. The appellant submitted that it was a denial of procedural fairness for a judge to express "a preference for expert evidence on the basis of the familiarity of that expert to the Court." The authority for that proposition was said to be found in CSR Ltd v Della Maddalena, [84] where Hayne J stated the issue in that case succinctly in the following terms: "[108] The reliance on some witnesses being 'well known to the Court' constituted a breach of procedural fairness. The Full Court acted on material that was not in evidence and was not the subject of argument."
4. No doubt because the appellant's submissions did not set out the language used by the trial judge, it was not immediately apparent that the trial judge did not say that Dr Ferrier was well known "to" the Court; rather, he said that Dr Ferrier had experience in the assessment of compensation under the Land Acquisition Act. [85] In oral submissions, senior counsel for the appellant contended that that statement was "to the effect of the point made in Maddalena." [86] It was then submitted that such experience "is not relevant to anything", [87] apparently in support of the written submission that the reason showed "a fundamental misunderstanding of the nature of its [the Court's] function".
5. The tenuous connection between these submissions and the claim of procedural unfairness was not explored in submissions and need not be explored for present purposes. The substantive objection to the appellant's complaint is that it took the concept of experience in assessing compensation under the Land Acquisition Act out of context. In the next paragraph after referring to that experience, the judge made a comparison with Mr Samuel's use of "comparable businesses and transactions", which he described as flawed. [88] He did so on the basis of Mr Samuel's persistence in relying on statistics relating to very large US and European corporations and in excluding from his list of comparable corporations of the only two involved in businesses in Australia or New South Wales. If that reason was a bad reason for rejecting Mr Samuel's experience, the appellant failed to make clear why that was so. Experience in valuing land sold for commercial purposes in New South Wales may well be important, as compared with experience in valuing commercial businesses generally, absent evidence that large international corporations were likely to be potential purchasers of the land.
6. In any event, it does not matter whether the reason was good or bad, the question is only whether such reasoning was available to the trial judge. His assessment of their respective qualifications was not challenged; his preference for Dr Ferrier's experience, being specific to the exercise undertaken in the present case, in circumstances where Mr Samuel's approach was the subject of cross-examination, provided no basis for a complaint of procedural unfairness.
7. Ground 3 must be rejected.

Ground 4 - bias

1. Ground 4 was discursive; it stated: "4. The Court erred in respect of a decision on a question of law because a fair minded lay observer might reasonably apprehend that the Court might not have brought an impartial mind to bear in determining the substantive contested issues arising because: a. in resolving the conflicting expert evidence across 11 disciplines and involving 11 expert witnesses in the Appellant's case and 13 expert witnesses in the Respondent's case and affidavit and oral evidence from 3 senior managers called for the Appellant and affidavit and oral evidence from 3 lay persons called for the Respondent, the Court preferred the Respondent's witnesses on every occasion (including on over 60 inputs for use with the DCF); and b. it only accepted submissions of the Respondent on contested issues."
2. The formulation of this ground demonstrated an immediate difficulty; the reference to the "fair minded lay observer" invoked the test of a reasonable apprehension of bias. Yet the past tense "brought", read with the particulars, invoked a test to be applied after a final judgment had been delivered.
3. The outcome alone will not support a claim of reasonable apprehension of bias, based on prejudgment. As explained in Michael Wilson & Partners Ltd v Nicholls [89] such a claim is supported "only by (impermissibly) reasoning backwards from what was decided at trial, and how it was decided, to the conclusion that it might reasonably be apprehended that the judge might have prejudged those matters." Further, as noted in Studholme v Rawson: [90] "It is trite to say that the outcome of the case will not demonstrate pre-judgment; it will be the exercise of judgment."
4. There may be circumstances in which a final judgment will confirm a pre-existing apprehension, [91] but the appellant did not put the case on that basis. Nor did the appellant present any case of actual bias. It follows that ground 4 must be dismissed.

(1) statutory scheme

1. Ground 5 in the notice of appeal read as follows: "5 The Court erred in respect of a decision on a question of law concerning the construction of s 59(1)(f) in confining the scope of that provision to require: a. a physical or active use, where on its proper construction the provision requires a consideration of an actual use in contrast to a higher and better use; and b. a requirement it be a physical or active use made by the claimant where on its proper construction the provision only requires that there be an actual use of the land and that user is not limited to the claimant for compensation."
2. In order to address this ground it is necessary to identify the statutory provisions relevant to it. The primary provisions are ss 55 and 59, which appear in Pt 3, Div 4 of the Land Acquisition Act. Section 55 is set out at [36] above. Section 59, also in Div 4, provides a definition of loss attributable to disturbance. As in force at the date of acquisition (19 December 2014) it was in the following terms: 59 Loss attributable to disturbance In this Act: loss attributable to disturbance of land means any of the following: (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land, (b) valuation fees reasonably incurred by those persons in connection with the compulsory acquisition of the land, (c) financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs), (d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired), (e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage), (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.

(2) nature of claims

1. The trial judge accepted the appellant's claims for legal and valuation costs (which were agreed) as properly recoverable as "losses attributable to disturbance". The further claims made by the appellant were for (i) "the extinguishment of landfilling activity"; and (ii) "the costs involved in relocation of the recycling/waste transfer operations (on a smaller scale) from Lot 2 to another (smaller) site in Alexandria." [92]
2. There are difficulties with the terminology used in ground 5. First, as in operation at the date of acquisition, s 59 was not divided into subsections as the chapeau to ground 5 suggested. Secondly, the Court did not require "a physical or active use", never having used either of those terms in relation to the disturbance claim, but having rather used the statutory language of an "actual use". Ground 5(a) was therefore based on a false premise.
3. Ground 5(b) implied that a person may seek compensation for loss incurred by another party. This identified the issue at the heart of the dispute in relation to the appellant's claim for disturbance. The appellant did not itself carry out any activity on Lot 2. Although it was the holder of an environmental protection licence under the Protection of the Environment Operations Act 1997 (NSW) (Operations Act), which permitted the carrying on of landfilling on Lot 2, that business was operated by a subsidiary, Dial A Dump Industries Pty Ltd (Dial A Dump). A separate company, Boiling Pty Ltd, held a licence for recycling operations. Dial A Dump also carried out those operations. Boiling Pty Ltd held a lease, giving an interest in Lot 2. Its claim for compensation was settled. Dial A Dump had no interest in the land and, although it made a claim for compensation, that claim was rejected. [93] In this proceeding, the appellant sought to argue in ground 5(b) that s 59(f) did not require that the actual use of the land at the date of acquisition had to be use engaged in by the claimant for compensation.
4. In the alternative, it sought to argue that Dial A Dump was its "agent" in conducting operations on the land. The latter argument was presented in ground 6 which read: "6. The Court erred in respect of a decision on a question of law in failing to conclude that by reason of the proceedings in Dial a Dump Industries Pty Limited [2015] NSWLEC 172 and Dial a Dump Industries Pty Ltd (2016) 216 LGERA 283 an issue estoppel precluded the Respondent from denying that DADI was relevantly the Appellant's agent."
5. The first case referred to in ground 6 was a decision of the Land and Environment Court identifying a separate question for determination, namely whether Dial A Dump held "an interest in land" under the Land Acquisition Act. The second case referred to was the judgment of the Chief Judge answering the separate question "no", and dismissing Dial A Dump's claim for compensation under the Land Acquisition Act.
6. Ground 7 was in the following terms: "7. The Court erred in respect of a decision on a question of law in that it failed to identify and apply the law in relation to attribution of loss as between [the appellant] and [Dial A Dump] in respect of: a. The claim made under ss 55(d) and 59(1)(c) (Disturbance - relocation); and/or b. The claim made under ss 55(d) and 59(1)(f) (Disturbance - other)."
7. It is convenient to follow the course adopted by the parties on the appeal, namely to deal with grounds 5, 6 and 7 together. However, a number of separate legal issues are raised. As will be noted below, pars (c) and (f) should be understood as dealing with different financial costs, although the concept of "financial costs" in one should apply to the other. Further, it is necessary to have regard to the factual substratum of the appellant's claims, although limited attention was paid in submissions to the different elements of the claims. The claims were identified in the LEC judgment as follows: [94]
8. Lost Profits $173,753,000
9. Loss to 19 December 2014 $2,620,000
10. Business disruption $1,486,000
11. Relocation costs (a) 76 Burrows Road - set up costs by landlord Carlewie for relocation $1,101,475 (b) 76 Burrows Road - Dial A Dump relocation costs $187,082 (c) 33 Burrows Road - aborted set up costs $19,650

1. The first two elements set out above involve loss arising from the termination of the landfilling business operated by Dial A Dump with respect to the land subject to the lease to Boiling Pty Ltd. The appellant claimed it was entitled to compensation for a loss attributable to disturbance on account of operations undertaken by Dial A Dump which were terminated by the acquisition.

(3) construction of s 59(f)

1. It is convenient to commence a consideration of these grounds by identifying the scope of the matters falling within the definition of "loss attributable to disturbance", as identified in s 59 of the Land Acquisition Act. The right to compensation is conferred by s 37 of the Act: 37 Right to compensation if land compulsorily acquired An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part by the authority of the State which acquired the land. The term "land" is defined in s 4(1) of the Land Acquisition Act to include "any interest in land." The latter phrase is defined as follows: interest in land means: (a) a legal or equitable estate or interest in the land, or (b) an easement, right, charge, power or privilege over, or in connection with, the land.
2. Accepting that the term interest in land is broadly defined, the right to compensation conferred by s 37 does not extend to a person who does not have an interest in the land which is acquired.
3. Section 37 appears in Pt 3 of the Land Acquisition Act, which is headed "Compensation for acquisition of land". Division 4 of Pt 3, which contains ss 54-65, is headed "Determination of amount of compensation". The reference in s 55 to the amount of compensation "to which a person is entitled" is a reference to the entitlement created by s 37, which is limited to a person having an interest in land which is divested or extinguished by the acquisition.
4. That understanding is confirmed by the language of s 59. Thus s 59(a) provides for recovery of legal costs "by the persons entitled to compensation in connection with the compulsory acquisition of the land". That phraseology is not repeated in each paragraph in s 59, but is picked up by the references to "those persons" in pars (b)-(e).
5. It is true that par (f) does not expressly use the same language to identify by whom the costs are incurred. Nevertheless, it refers to "other financial costs", a phrase which must be understood as referring to financial costs other than those covered by pars (a)-(e). All of those paragraphs are limited to costs (or fees) incurred by persons entitled to compensation in connection with the compulsory acquisition of the land. There is no reason to read any part of the s 59 as extending beyond those persons, whose entitlement to compensation is conferred by s 37. It should follow that par (f) only covers financial costs reasonably incurred by a person with an interest in the land acquired.
6. Finally, although the appellant denied that this claim involved any element of double recovery, the only basis upon which that could be correct would be that the appellant was not carrying on the business and was not the party suffering the loss as a result of the acquisition. The value of the land acquired had been calculated on the basis of discounted cash flow resulting from future business operations. To value the land on that basis (which was not inappropriate) and then seek to recover loss of future profits as a head of "disturbance" would inevitably involve double recovery.
7. It remains to consider the reasons for these conclusions.

(4) constructional choices

1. The appellant acknowledged that the operations being undertaken on the land at the date of acquisition were carried on by Dial A Dump. According to the appellant, this did not preclude it recovering compensation for loss attributable to disturbance under s 59(f), because that provision was not confined to costs reasonably incurred by the person entitled to compensation in connection with the compulsory acquisition of the land. It is significant, the appellant submitted, that the identification of persons entitled to compensation in par (a), picked up by references to "those persons" in pars (b)-(e), does not appear in par (f). Accordingly, par (f) should be understood to have a wider operation.
2. In construing par (f), there are a number of cases (for example, Apokis v Transport for NSW [95] ) which refer to the statement of Jagot J in Almona Pty Ltd v Roads and Traffic Authority of NSW [96] that "the actual use of the acquired land is the use of the dispossessed owner; not that of the acquiring authority." (There may be cases where the acquiring authority has commenced occupation and use prior to acquisition.) However, the present question involves no competition between the uses of the dispossessed owner and the acquiring authority; rather it is whether par (f) is limited to the use of the dispossessed owner, or can include use by a related party from which the dispossessed owner may have benefited, for example as a shareholder of the entity carrying on the actual use of the land at the date of acquisition.
3. While the appellant's construction may not have been disposed of by Almona (and cases in which Almona was applied), it remains untenable. [97] First, it requires the phrase "costs incurred" to be read as "loss suffered". For reasons explained below, that reading should not be accepted. Secondly, the appellant's loss was the result of the disruption of the business of its subsidiary; yet to fall within the terms of par (f) the costs must be incurred "as a direct and natural consequence of the acquisition." The appellant's loss was at best indirect and dependent upon the passing of a financial benefit by the subsidiary to the appellant. Its case was no stronger than that of the landlords whom this court held "did not themselves occupy the land or conduct any business activities on or from it": G Capital Corporation Pty Ltd v Roads and Maritime Services. [98] Thirdly, the appellant did not establish any loss other than the loss suffered by Dial A Dump, which it valued at over $173 million.
4. It is necessary, therefore, to consider the construction of par (f) more generally.
5. As the trial judge recognised, this Court has recently attempted to provide a coherent and stable basis for assessing claims of compensation for loss attributable to disturbance. First, it has disapproved the suggestion in earlier cases that the Court enjoys a power, referred to as the "just terms override", to supplement compensation calculated in accordance with Pt 3, Div 4 of the Land Acquisition Act, if persuaded that justice required it. [99] That power was inconsistent with the express intention of s 55 to prescribe the "only" matters to which regard could be had. Secondly, the Court has held that general language in one paragraph of s 59 should not be construed so as to undermine the carefully defined limitations in other parts of the definition of "loss attributable to disturbance". [100] So much was accepted by the appellant. That approach depends on the basic proposition that the provisions in a statute should be read together, so as to operate coherently. [101]
6. Applying that principle has three consequences. First, the language of par (f), "any other financial costs reasonably incurred", should have the same operation as "financial costs reasonably incurred" in pars (c) and (e). Secondly, the term "costs", which appears in each paragraph in s 59 other than (b) (which uses the term "fees"), should be the subject of a consistent interpretation.
7. Thirdly, it would be contrary to principle to permit double recovery of particular amounts. In circumstances where that possibility was foreseen by the drafter, express provision was made, as appears in s 61: 61 Special provision relating to market value assessed on potential of land If the market value of land is assessed on the basis that the land had potential to be used for a purpose other than that for which it is currently used, compensation is not payable in respect of: (a) any financial advantage that would necessarily have been forgone in realising that potential, and (b) any financial loss that would necessarily have been incurred in realising that potential. A similar provision is now made in s 56(3) with respect to relocation costs, which can form a basis for assessment of market value where there is "no general market for land used for that purpose." (That provision was introduced after the acquisition of the appellant's land.) A consequential inference is that the heads of recovery were otherwise intended to be independent and self-contained. That conclusion provides a constructional basis for the acceptance of a general principle precluding double recovery, which is otherwise unmoored in the language of the statute.
8. The trial judge rejected the appellant's claim for loss attributable to disturbance on the basis that it was not only wrong in principle, but was inconsistent with the reasoning of this Court in Roads and Maritime Services v United Petroleum Pty Ltd. [102] United Petroleum involved the acquisition of land upon which a service station and restaurant business had been operated by a wholly owned subsidiary of the owner. United Petroleum was in a position analogous to that of Dial A Dump in the present case; it operated the business. Its position was marginally stronger as a claimant than that of Dial A Dump because it held a lease, though the lease itself had no value, being terminable at will. In other words, the market value of its interest in land was nominal. The question was "whether United could be compensated under s 59(f) for the loss of an opportunity to continue to operate its business on the land which had been acquired." [103] I stated (with the agreement of Macfarlan JA): "[16] First, the ordinary meaning of 'financial costs reasonably incurred … relating to the actual use of the land', is not apt to describe the loss of an opportunity to continue to use the land. While there may be financial costs incurred in terminating a business operation, the loss of the opportunity to continue the business operation is not aptly described as a 'financial cost' relating to the actual use of the land at the date of acquisition. [17] Secondly, the direct and natural consequence of the acquisition of the interest in the land was to prevent the continuation of the business on that land; the acquisition did not cause the owner to 'reasonably incur' the termination of the business; rather, in ordinary parlance, the acquisition caused the owner to suffer a loss of revenue. The loss of revenue may have caused the business owner to take other steps, but the loss of revenue itself was not aptly described as a 'financial cost'; however, the cost of taking other steps, such as the cost of relocating the business, readily fell within the language of para (f). [18] Thirdly, and by way of expansion of the last point, the kinds of financial costs covered by paras (a)-(e) are all costs incidental to the loss of the land; they assume the loss of the land for which market value will have been paid pursuant to other provisions in s 55, assuming that the owner's interest in the land had a compensable value. … [20] The point of distinction between disturbance and market value may be readily explained, both in relation to land used and operated for commercial purposes by the owner and land the subject of a lease where the lessee uses the land for commercial purposes. Assuming in each case that the actual use is the best economic use available, the market value of the land may be calculated by capitalising annual maintainable earnings at an appropriate discount rate. … [21] There was no authority relied upon by United which involved compensation for the acquisition of land used for commercial purposes in which some additional amount had been allowed on account of 'disturbance" to reflect the loss of a commercial business operation being conducted on the land. Rather, the capacity of the land to support a profitable commercial operation has always been understood to be reflected in the market value of the land, which is compensable as such. Furthermore, the market value of an interest in land is limited to the value of the legal interest vested in the claimant which was terminated by the compulsory acquisition. …"
9. Payne JA qualified his agreement in relation to [16] and [17] set out above, while harbouring "significant doubts" as to whether the contrary view was correct. However, relevantly for present purposes, Payne JA concluded: "[77] … Assuming that what was being valued was the highest and best use of the acquired land, I fail to see as a matter of principle why the market value of the acquired land, correctly identified, would not include the capacity of that land to generate a profit in the future, including by conducting a market garden. That is, the right to potential profits from market gardening after the date of the acquisition would be encapsulated in the market value of the acquired land. As I explained in Moloney v Roads and Maritime Services, [104] in those circumstances there is no room for any separate 'disturbance' claim."
10. Payne JA also expressed agreement with Sackville AJA and particularly the following passage in the latter's reasons: "[96] If on its proper construction s 59(c) of the Just Terms Act provides compensation only for actual outgoings or liabilities incurred by the relevant person, it follows that none of the five paragraphs in s 59 preceding s 59(f) contemplates compensation for loss of income or profits derived from the acquired land. In construing s 59(f) it is necessary to bear in mind that Parliament is unlikely to have intended the same expression ('financial costs') to be given a different meaning in different paragraphs of the one section. Therefore if s 59(c) is limited to outgoings or liabilities incurred or to be incurred by the person entitled to compensation, it would seem that s 59(f) cannot be construed to provide compensation for loss of income or profits. That conclusion (assuming the interpretation of s 59(c) referred to above) is reinforced by the reference in s 59(f) to 'any other financial costs', which clearly envisages costs of a similar kind to those in s 59(a)-(e). [105] The words 'any other' provide a very powerful indication that s 59(f) is intended to be subject to the same limitations as to subject matter as s 59(c) and (e): that is s 59(f) is intended to be confined to actual outgoings or liabilities incurred or to be incurred as a direct and natural consequence of the compulsory acquisition."
11. Sackville AJA did not determine the matter on that basis, concluding: "[116] United Petroleum's interest at the date of the acquisition was terminable on one month's notice. The lessor was entitled to give that notice at any time. In these circumstances, it cannot be said that United Petroleum's long-term loss of profits by reason of the closure of its business is a 'direct and natural consequence' of the acquisition of its interest in the land on which the business was conducted."
12. The fifth member of the Court in United Petroleum, Preston CJ of LEC, adopted a similar approach to that of Sackville AJA, based on the failure of the claimant to satisfy the phrase, "relating to the actual use of the land". Noting that the use of the land is "the use by the person entitled to compensation"; [106] and "must be an 'actual' use and not a potential future use"; [107] and that the expression "relating to" is of wide import, [108] Preston CJ at LEC stated: "[156] Where the actual use of the acquired land by the person entitled to compensation is terminated by the acquisition, the loss of an opportunity to continue to use the land (and any concomitant financial loss) is not a financial cost reasonably incurred 'relating to the actual use of the land', but rather financial costs not relating to the actual use of the land. The actual use has come to an end. Any financial costs incurred after the actual use has terminated, including the loss of the opportunity to continue operating a business on the land, cannot relate to the actual use of the land (as Basten JA observes at [16])."
13. The reasoning of Sackville AJA and Preston CJ of LEC turned on the proposition that "financial costs" in connection with relocation, identified in par (c) of s 59, could, on the authorities, extend to losses suffered as a result of the termination of a business. That is, the term "costs incurred" in par (c) was apt to include "losses incurred". That reading of s 59(c) had been accepted in El Boustani v Minister Administering the Environmental Planning and Assessment Act 1979 [109] (where recovery of lost profits due to relocation was not in dispute [110] ), and applied in Health Administration Corporation v George D Angus Pty Ltd. [111]
14. Noting that there had been no challenge by Roads and Maritime Services to the reasoning in either case, Sackville AJA concluded that "the construction of s 59(f) of the Land Acquisition Act should be approached on the basis that the expression 'financial costs' in s 59(c) extends to the loss of income or profits resulting from the forced relocation of a business conducted on the acquired land." [112] Adopting that approach, Sackville AJA stated, "there is nothing incongruous in construing the expression 'other financial costs' in s 59(f) to extend to the loss of income or profits where a business conducted on the acquired land is forced to close and cannot be relocated." [113] Despite relying on the lack of challenge to George D Angus, Sackville AJA also held that, in allowing recovery of losses resulting from the acquisition of a tenancy at will, George D Angus was "plainly wrong and should not be followed." [114]
15. In so far as the reasoning in United Petroleum relied on the phrase "relating to the actual use of the land" to reject a claim for the lost opportunity to generate future profits, it adopted a confined reading of the term "relating to". That reading should be accepted, but it involves a constructional choice which finds its justification only in reading the phrase in the broader context of s 59.
16. Justice Payne's reliance on avoiding double recovery should also be accepted. However, the possibility of a claim based on the lost opportunity for future profits will only arise with respect to land actually used for commercial purposes at the date of acquisition. Thus, with one qualification identified below, the principle will operate generally in relation to such claims. It may readily be accepted that the principle underlies the operation of the statutory scheme for recovery of compensation on just terms, but a construction which finds its basis in the express language of s 59 is to be preferred.
17. The qualification to the operation of the double recovery principle arises where the market value of the land used for commercial purposes is assessed by reference to its greater economic value for a different purpose, such as residential development. If that value is higher than its value based on the actual use at the date of acquisition (as it will be if it reflects the "highest and best" use) it would clearly be anomalous for the owner to recover both the higher market value and the loss of commercial profits in the future. It would be doubly anomalous if that recovery could occur when loss of future profits is not available where the actual use of the land reflects its highest economic value. Thus the exception tends to confirm the outcome, even where the calculation of market value does not specifically reflect a capitalisation of expected future commercial returns.
18. On one view, s 61(a) of the Land Acquisition Act, set out at [125] above, forecloses the anomalous result. But s 61(a) did not apply to the general case of double recovery identified in United Petroleum.
19. The approach to construction which avoids these difficulties is readily available, namely to read the phrase "other financial costs" in par (f), being costs relating to the actual use of the land at the date of acquisition, as not encompassing loss of the opportunity to earn future profits. That is consistent with the approach of the majority in United Petroleum which relied upon the phrase "actual use at the date of acquisition" as not encompassing a future use.
20. The constrained reading of "other financial costs" in par (f), while favoured by the majority in United Petroleum, was not adopted because earlier cases dealing with par (c) (which uses the phrase "financial costs") had permitted the recovery of lost profits suffered as a result of the need to relocate. It is correct to give "financial costs" a consistent meaning in par (c) and par (f). However, the term "costs" should, if possible, be read consistently in each paragraph of s 59. To read "costs" in par (c) as permitting the recovery of profits foregone in the course of relocation requires reading "financial costs reasonably incurred" not as limited to expenditure, but as including consequential losses; such a reading is not available in relation to "costs reasonably incurred" in pars (a), (d) or (e), nor in relation to "fees reasonably incurred" in par (b). In principle, "costs" in par (c) should therefore be construed as limited to expenditure. It follows that par (c) provides no basis for reading the term "any other financial costs reasonably incurred" in par (f) as including a lost opportunity to obtain profits contingent upon the continued use of the land.
21. This construction is consistent with that adopted by Macfarlan JA and me in United Petroleum; it was clearly the preferred approach of Payne JA and Sackville AJA in United Petroleum, although not adopted in that case. It provides the correct approach to the appellant's claim for the loss of the opportunity to generate future profits, as a claim for "any loss attributable to disturbance" pursuant to s 55(d) and s 59(f). It also means that the approach accepted by this Court, without challenge, in El Boustani [115] should not be followed.

(5) disturbance - loss of future profits

1. The foregoing discussion explains why the appellant has no claim for lost future profits if, as it conceded, the actual use of the land was undertaken by Dial A Dump. Indeed, even had the appellant carried on the actual use itself, its claim would have failed as an element of double recovery. It follows that the appellant's claim that Dial A Dump was its "agent" for the carrying on of the activities conducted on the land, so that the operations were conducted on its behalf and were an actual use of the land by it, must also be rejected.
2. A claim on this basis must fail for three reasons. First, as explained by Payne JA in United Petroleum, where the claimant's interest in land has been valued by reference to its commercial potential to return profits it would be double recovery for the claimant to obtain the capital value of the land valued on that basis and, in addition, the amount representing the present value of future profits.
3. Secondly, whatever is meant by "agency" in this context, it entails no more than a contractual relationship whereby Dial A Dump had a licence (express or implied) to occupy the land for the purpose of carrying on a business and accounting to the appellant for the profits of the business. Yet the factual elements of that proposed relationship were not established. It was for that reason that the appellant asserted that the respondent was estopped from denying that such a relationship existed. That argument had been raised as a preliminary issue and was the subject of a separate judgment in the Land and Environment Court: Alexandria Landfill Pty Ltd v Roads and Maritime Services; Boiling Pty Ltd v Roads and Maritime Services (No 4). [116] The issue involved both the appellant and Boiling Pty Ltd because the appellant pleaded that Dial A Dump had used Lot 2 "as the agent of [the appellant] and Boiling". [117] The respondent did not admit the allegation of agency, but stated that "to the extent that" the appellant or Boiling Pty Ltd or both conducted businesses on the acquired land, Dial A Dump was their agent, but denied that they did carry on such businesses and therefore asserted that Dial A Dump carried on activities on the land as principal. [118]
4. Thirdly, the manner in which the appellant supported its claim of estoppel in this Court involved a degree of ambivalence. Ground 6 asserted that "by reason of the proceedings in [the claim brought by Dial A Dump] an issue estoppel precluded the Respondent from denying that [Dial A Dump] was relevantly the Appellant's agent."
5. This identification of the issue is perplexing. As noted above, the issue in the proceedings between Dial A Dump and the respondent was the answer to the question, did Dial A Dump have an interest in the land identified as Lot 2? In the Land and Environment Court, the question was answered "No". There were two issues which arose in that case. The first was a claim that a mere "personal permission to occupy land" was a right of the kind identified in par (b) of the definition of "interest" in land in s 4 of the Land Acquisition Act. In the Land and Environment Court, Preston CJ of LEC rejected that basis for asserting an interest in the land. [119] The second basis on which an interest in land was asserted was that Dial A Dump enjoyed the "privilege" of carrying on what would otherwise be prohibited activities under the Operations Act (referred to as the "POEO Act"). The Chief Judge rejected that submission in the following terms: "[147] The environment protection licences held by ALF (EPL 4627) and Boiling (EPL 12594) were personal to ALF and Boiling. … The holder of an environment protection licence has no power under the POEO Act unilaterally to assign the licence it holds to another person. An environment protection licence can only be transferred to another person upon application being made in accordance with s 54 of the POEO Act and the EPA granting the application under s 55 of the POEO Act. No such application to transfer either environment protection licence to DADI was made or granted. [148] In exercising its licensing functions under the POEO Act, including granting or transferring an environment protection licence to a person, the EPA is required to take into consideration whether the person is a fit and proper person: ss 45(f) and 83 of the POEO Act. This emphasises that an environment protection licence is personal to the holder. [149] The holder of an environment protection licence also has no power under the POEO Act to hold its licence on trust for another person who it permits to occupy and carry on at the premises the scheduled activities that are authorised by the environment protection licence. The POEO Act requires each person who is the occupier of premises at which a scheduled activity is carried on to be the holder of an environment protection licence that authorises that activity to be carried on at the premises: s 48(2) of POEO Act. Hence, if a person is permitted to occupy premises in order to carry on scheduled activities on the premises, the person would need to also become a holder of an environment protection licence authorising the carrying on of those activities. The capacity to hold an environment protection licence on trust for another person would also subvert the fit and proper person requirements for licensing. [150] Under this statutory scheme, ALF and Boiling could not grant any permission to DADI to use EPL 4627 or EPL 12594 respectively and DADI could not acquire any privilege of carrying on scheduled activities on Lot 2 without being the holder of an environment protection licence authorising those activities. DADI, therefore, did not have any privilege falling with par (b) of the definition of 'interest in land'."
6. There was no factual finding of the kind apparently relied on by the appellant in the course of the proceedings in the Land and Environment Court. (Indeed, this reasoning cast doubt on the legality of the actual use, which therefore had to be disregarded in assessing the market value of the land: s 56(1)(c).) In seeking evidence that Dial A Dump had an interest in land, the closest suggestion that such a finding was even contemplated was the following passage in the reasoning of the Chief Judge: "[110] The second indication is that ALF recorded that DADI would carry on commercial operations and the waste facility on Lot 2, not on its own behalf but rather 'for and on behalf of the Alexandria Landfill Consolidated tax group' or 'on behalf of the Alexandria landfill group' respectively. The arrangements were even more confused by ALF recording that 'each different activity will be identified as an accounting division within Dial A Dump Pty Ltd', a different corporate entity to DADI, and 'it will account for all waste revenues and expenses on behalf of the Group'. The precise identity of this tax group or other corporate group was not clearly established, but at least it included ALF and DADI as the wholly owned subsidiary of ALF. In these circumstances, for ALF to give permission to its wholly owned subsidiary to carry on operations on Lot 2 'for and on behalf of the ALF Consolidated tax group' or 'on behalf of the Alexandria landfill group' did not give any permission to DADI itself. DADI would not be carrying on the commercial operations or waste facility on Lot 2 as principal but rather only as agent. Hence, the giving of permission to carry on operations on Lot 2 could not carry with it the grant of the right to exclusive possession of Lot 2 to DADI."
7. In other words, based on the evidence before the Land and Environment Court in the proceedings relied upon as creating an estoppel, the suggested agency did not identify the appellant as the principal.
8. In this Court, the appellant set out a lengthy extract from the judgment of the Court of Appeal in the appeal from the judgment in the Land and Environment Court involving Dial A Dump. Although the appeal was one limited to a question of law, Beazley P accepted that, although the primary judge had not made a finding that Dial A Dump was the agent of the appellant, that was the only conclusion consistent with his reasoning. [120] However, what the concept of agency encompassed was not articulated; nor was the identity of the principal material. The observation appears to have been a generic description for a legal relationship which allowed Dial A Dump to occupy and operate a business on land in which it had no legal or equitable interest.
9. McColl JA agreed (subject to an irrelevant qualification) with the reasoning of the President; Leeming JA expressed himself in more circumspect terms. He identified the claim by Dial A Dump that it had a legal interest in the land "by reason of its exclusive possession of the site." [121] Referring to the material before the primary judge, he concluded: "[175] All of those matters sustain the primary judge's finding that Dial A Dump had not established primary facts sufficient to sustain a legal interest in the land. In short, I do not consider that there is an error of law in failing to be satisfied that Dial A Dump lacked exclusive possession, given the nature of the documents and the consequence that if it did, Boiling was in breach of its lease and ALF and Boiling were in breach of their environmental licences."
10. Dial A Dump's claim to an equitable interest based on the principle in Keech v Sanford [122] was dismissed on the basis that it had not been raised below, nor in this Court until a footnote in written submissions in reply. [123] Finally, Leeming JA referred to the argument that Dial A Dump possessed a "right, power or privilege relating to the land". That matter was disposed of in the following terms: "[181] But it is not necessary, in order to resolve this appeal, finally to determine this point. There was no error of law in finding that Dial A Dump did not enjoy a valuable contractual right. It was not a contractual right, because its possession of the land came about by reason of permission or sufferance of either or both of the owner or lessee of the land. It was not a valuable right, because the right was terminable without notice at any stage. Dial A Dump made no response, nor could a response be made, to the submission that such rights which Dial a Dump enjoyed were terminable at will by act of the sole director and shareholder of its parent company ALF."
11. Bearing in mind that Roads and Maritime Services was the respondent in each proceeding, and that, although the present appellant, which purports to be the principal, allowed Dial A Dump to conduct proceedings in its own right, to which the appellant was not a party, it is difficult to identify the precise basis on which Roads and Maritime Services is estopped from arguing that the appellant did not carry on the business conducted on the site. No error of law has been established in the refusal of the trial judge to uphold the estoppel claim, as the basis of a factual assertion that Dial A Dump carried on the activities on the land as the "agent" of the appellant.

(6) Disturbance claim - business disruption

1. A claim of $1,486,000 was made with respect to the loss of an opportunity to exploit a sandstone deposit on the site, known as "Bradshaw Hill". Bradshaw Hill was a parcel of land to the north-east of Lot 2, owned by the respondent. The site was leased in November 2009 to an entity referred to by Mr Samuel as "CRG". In June 2013 CRG received development consent to exploit the sandstone. The appellant objected to the terms of the consent, as a result of which the parties settled the matter on the basis of a transfer to the appellant of CRG's lease, for an amount of $200,000. [124]
2. The basis for the claim in the present proceedings is obscure. As the respondent owned the site and was the lessor, the only acquisition would have been of the lease. That was not a matter before the Land and Environment Court.
3. The appellant's submissions in the Land and Environment Court on this issue did not condescend to identify any statutory basis for the claim. They merely stated the fact that "there can be a disturbance 'loss' even though it is only something 'reasonably likely to occur': McDonald v RTA [2009] NSWLEC 105 at [115]." [125] There was a further reference to Roads and Traffic Authority of NSW v Peak [126] as authority for the proposition that the case was analogous to one where the acquisition of part of the claimant's land precluded advantageous use of another part.
4. The reference to McDonald was inapt: the passage referred to was directed to the operation of s 59(f) with respect to costs that "might reasonably be incurred". The basis of the claim was not that there was any actual use of Lot 2 with respect to the processing of sandstone from Bradshaw Hill, but that without Lot 2, processing of sandstone would not be feasible. (At least that appears to be the basis of the claim, although it was not exposed in this Court.) The trial judge noted the respondent's submission that the appellant had "failed to establish any causal relationship between the acquisition and the lost business opportunity". [127] It may be inferred that that submission was accepted. The trial judge would have been correct to do so. However, it was patently not a claim which could fall under any limb of s 59 other than par (f). Furthermore, it was patently not a claim in relation to the "actual use of [Lot 2]" at the date of acquisition. Assuming that the appellant sought to challenge the rejection of the claim, the challenge cannot be accepted.

(7) Disturbance - relocation costs

1. The basis of the elements claimed by way of relocation costs was not identified in the appellant's written (or oral) submissions in this Court with any precision. However, in the course of oral argument counsel for the appellant accepted that the claims had to succeed under s 59(c), or they would fail. The contrary view would have entailed a claim for relocation costs succeeding under s 59(f), when not available under par (c), so as to permit par (f) to expand the carefully constrained limitation in par (c). In accordance with authority, that was accepted as an unavailable construction of the section.
2. Section 59(c) refers to financial costs reasonably incurred "in connection with the relocation of [persons entitled to compensation]". It may be accepted for the purpose of considering the present claims that these costs may include the establishment or transfer of an extant business to a different location. The primary claim was for "set up costs" incurred by the new "landlord" at 76 Burrows Road, Alexandria.
3. The evidence showed that the owner of the site was Carlewie Pty Ltd and that a lease was granted by Carlewie to Dial A Dump. Whatever costs were incurred by the third party, Carlewie, were not incurred by the appellant. Rather, the complaint as to the manner in which the judge dealt with the relocation claims turned on a failure to address the operation of s 59(c), as a particular of grounds 1 and 2. However, that was not correct. Although the judge focused on the operation of the claim under s 59(f) as involving actual use of the acquired land by the dispossessed owner, he also recorded that the respondent had relied on the same argument with respect to par (c). His conclusion that the appellant did not operate a business on the land disposed of the claim under s 59(c). It was not in doubt that the concept of "relocation", as applied in the present case, could only relate to relocation of a business operated by the appellant on Lot 2. [128] In the course of oral submissions, senior counsel for the appellant accepted the premise of the argument, but not the conclusion. Nevertheless, as a particular of grounds 1 and 2, the argument lacked substance. [129] So far as ground 7 alleged an error of law in relation to the failure to allow the appellant to claim the set up costs incurred by Carlewie Pty Ltd, the complaint was untenable.
4. The second aspect of relocation costs concerned expenses incurred by Dial A Dump in relocating its business from Lot 2 to 76 Burrows Road. On the basis that the appellant and Dial A Dump are distinct legal entities and as Dial A Dump is not a person entitled to compensation in connection with the compulsory acquisition of the land, Dial A Dump could not make a claim under s 59(c). The appellant cannot make the claim because it did not incur the costs. No separate claim of "agency" was made with respect to the operation of the business at 76 Burrows Road. Indeed, it is not clear that it was the same business. No doubt Dial A Dump operated a waste transfer business at 76 Burrows Road, but it did so pursuant to a licence agreement between it and Carlewie, which, among other things, required it to pay a total $1.1million costs allegedly incurred by Carlewie in relation to the site. (Had the factual issues been addressed, it would have been necessary for the appellant to explain how the $1.1 million was recoverable in any event. The "costs of works completed" at 76 Burrows Road was a mere $201,395. The other amounts, totalling $900,000, were identified as "rent adjustment" and "agreed premium for site and waste transfer". [130] )
5. The third element of the relocation costs was a small amount said to be "aborted set up costs" in relation to a site at 33 Burrows Road. There is no basis in the evidence before this Court to allow a finding that this amount was claimable on any basis. [131] Mr Samuel did not deal with the property in detail because it was resumed in March 2015 and, as he noted, a separate compensation claim had been made with respect to it. [132]
6. It follows that the trial judge did not err in dealing with this aspect of the claim on the same basis as the claims made pursuant to s 59(f), namely that the business carried on Lot 2 was not carried on by the appellant, and the appellant therefore did not incur costs of any relocation of the business of Dial A Dump.

Special value

1. At the trial, the appellant claimed an amount of $60,751,000 as the "special value" to it of the land on the date of its acquisition, pursuant to s 55(b) of the Land Acquisition Act. The term "special value" is defined in s 57: 57 Special value In this Act: special value of land means the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person's use of the land.
2. The relevant pleading in the amended points of claim asserted that Dial A Dump "was, prior to the Acquisition Date, using Lot 2, as the agent of [the appellant] and Boiling, for the purpose of carrying out commercial activities including: (i) waste collection; (ii) waste transfer; (iii) waste recycling; (iv) land filling; and (v) storage of vehicles and equipment". [133] The pleading also set out seven "features" of the land which were said to demonstrate special value to the appellant. [134]
3. The pleading had three critical elements: first, the appellant pleaded that it was "using Lot 2 through the actions of its agent [Dial A Dump] for the purposes set out in 3(b)." [135] Secondly, it identified the method of calculating the special value of Lot 2 in the following terms: "35. The special value is determined by accounting for adjustments to the DCF methods for market value employed under Scenario 1 and Scenario 2 by: (a) eliminating what was otherwise imposed as an internal charge for the transferring of waste to other sites given that [the appellant] could transfer to the Eastern Creek Site without such a charge; (b) eliminating what was otherwise imposed as overheads for workshop costs and administrative costs that are not incurred by [the appellant]; and (c) accounting for the fact that [the appellant] had all necessary plant and equipment."
4. The third element, which is reflected in par 35, is that the quantification of the financial value of the advantages was undertaken pursuant to the discounted cash flow methodology relied on to establish market value.
5. Ground 8 in the notice of appeal need not be set out verbatim; as explained in the written submissions, it relied on the fact that the trial judge had set out in his reasons [136] an extract from the judgment of Wells J in the Supreme Court of South Australia in Bronzel v State Planning Authority [137] summarising the meaning of special value under the general law. The extract included the proposition that it is "something objectively ascertainable derived from the land or some attribute or property of it …". Ground 8 noted that that language differed from the definition in s 57 of the Land Acquisition Act, which requires that there be an advantage "which is incidental to the person's use of the land." The appellant's written submissions then stated: [138] "Sheahan J adopted and applied the test from Bronzel and, on that basis, found against [the appellant's] claim for special value. Application of that wrong test meant that all of the factual inquiry then purportedly carried out … was addressed to the wrong question." Submissions to similar effect were made in reply.
6. The proposition that the judge applied the language adopted by Wells J in Bronzel in preference to the language of s 57 was not sustainable. There are three indications that that is so. First, in introducing the extract from Bronzel, the judge noted that it was said "before s 57 was enacted". The emphasis appeared in the judge's own reasons.
7. Secondly, in the next paragraph, the judge said: "[828] As the Applicant's submissions say (par 515): ... The Court's task is to determine the claim by reference to that statutory definition and not by any gloss to be imposed upon the words of the provision from authorities that predate the [JTC] Act." The first word in that statement indicates acceptance of the appellant's submission.
8. Thirdly, in a dispositive passage, the judge stated: "[840] At the DOA, ALF was not itself using the land, and DADI was not using it as ALF's agent, so ALF cannot establish 'any advantage' within the meaning of s 57, nor any element of value, in addition to market value, arising from any special feature of the land, of unique or particular benefit to ALF. None of the 'advantages' asserted by ALF are incidental to its 'use' of the land, within s 57." It is clear from the last sentence that the judge has expressly applied the language of s 57. Ground 8 must be rejected.
9. The wording of ground 9 (the final ground in the notice of appeal) was obscure and need not be set out. It was dealt with by the appellant as part of its submissions with respect to disturbance, the thrust of the ground being directed to the finding that Dial A Dump, as the entity carrying on commercial activities on the land, was not doing so as the "agent" of the appellant. As the trial judge noted, [139] the appellant accepted that it did not directly use the land and that its claim depended on the use of the land by Dial A Dump being attributed to it for the purposes of s 57. Because the so-called "agency claim" had been rejected, the appellant failed to establish relevant use of the land for the purpose of s 57. This was a sufficient, and perhaps the primary, basis on which the trial judge rejected the special value claim. As the challenge to the dismissal of the "agency claim" has been rejected, the special value claim must also fail on this basis.
10. However, as appears from the judgment at [840] set out above, the trial judge also rejected the claim on the basis that the advantages identified in the amended points of claim at par 35, [140] did not fall within the concept of "any advantage, in addition to market value" within the terms of s 57. There was no challenge to that finding. It may also be noted that the claim depended upon acceptance of various aspects of the discounted cash flow methodology relied on by the appellant. The appellant did not raise any alternative case in the event that relevant aspects of that methodology were rejected.
11. For these separate and independent reasons, the appeal, so far as it relates to the rejection of the claim for "special value" must fail and grounds 8 and 9 be rejected.

Conclusions

1. As the appellant has failed on all the grounds set out in the notice of appeal, as developed in its submissions, the appeal must be dismissed. No order has yet been made with respect to the costs of the trial, and the Court was asked not to deal with the trial costs. [141] The appellant must pay the respondent's costs in this Court.
2. MACFARLAN JA: On 19 December 2014 two parcels of land owned by the appellant ("ALF") were gazetted for acquisition by the WestConnex Delivery Authority, the predecessor of the respondent (Transport for NSW, previously called Roads and Maritime Services, referred to in this judgment for consistency with the proceedings below as "RMS"). The area of one lot ("Lot 1") is 2,410 square metres and that of the other lot ("Lot 2") is 15.71 hectares. At the date of acquisition ("DOA") Lot 2 was being used for landfill and waste related operations. The land is at St Peters in Sydney, near to Sydney Kingsford Smith Airport.
3. Subsequently ALF sought compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (the "JTC Act") in respect of the resumption of both lots. This appeal is concerned only with Lot 2.
4. After a lengthy hearing in the Land and Environment Court (the "LEC"), Sheahan J determined by judgment dated 18 July 2019 that ALF was entitled to compensation in respect of the market value of Lot 2 in the amount of $45,742,270 and, in respect of disturbance, $424,910.68 ([2019] NSWLEC 98). ALF appeals to this Court on a number of grounds, most notably that the primary judge "constructively failed to exercise jurisdiction in that [he] failed to treat with the disputed evidence and competing submissions in a way that produced a rational and reasoned conclusion".
5. For the reasons that appear below, I consider that the appeal should be dismissed with costs.

RELEVANT STATUTORY PROVISIONS

1. Sections of the JTC Act of relevance to the appeal and in their form in force at the date of acquisition are as follows. The primary judge, and the parties in their submissions on appeal, referred to the current form of the legislation which is not materially different from that below although the number "(1)" now appears, but did not then appear, immediately before the words "In this Act" in s 59. 4 Definitions … interest in land means: (a) a legal or equitable estate or interest in the land, or (b) an easement, right, charge, power or privilege over, or in connection with, the land. land includes any interest in land. … 37 Right to compensation if land compulsorily acquired An owner of an interest in land which is divested, extinguished or diminished by an acquisition notice is entitled to be paid compensation in accordance with this Part by the authority of the State which acquired the land. … 54 Entitlement to just compensation (1) The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land. … 55 Relevant matters to be considered in determining amount of compensation In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division): (a) the market value of the land on the date of its acquisition, (b) any special value of the land to the person on the date of its acquisition, (c) any loss attributable to severance, (d) any loss attributable to disturbance, (e) solatium, (f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired. 56 Market value (1) In this Act: market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. (2) When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition. 57 Special value In this Act: special value of land means the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person's use of the land. … 59 Loss attributable to disturbance In this Act: loss attributable to disturbance of land means any of the following: (a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land, (b) valuation fees reasonably incurred by those persons in connection with the compulsory acquisition of the land, (c) financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs), (d) stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired), (e) financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage), (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition. … 61 Special provision relating to market value assessed on potential of land If the market value of land is assessed on the basis that the land had potential to be used for a purpose other than that for which it is currently used, compensation is not payable in respect of: (a) any financial advantage that would necessarily have been forgone in realising that potential, and (b) any financial loss that would necessarily have been incurred in realising that potential.

LOT 2'S USE AT AND PRIOR TO THE DOA

1. From about 1880 Lot 2 was used as a brick shale quarry. The brick shale extraction declined from 1930 and ceased in 1980. In the 1950s the filling of some of the brick pits with domestic garbage began and it was later acquired by the Council of the City of Sydney for use for landfill. It was then acquired by ALF in about 2002. From about that time ALF's wholly owned subsidiary, Dial A Dump Industries Pty Ltd ("DADI"), continued the landfill operation on the land and expanded it to include waste transfer, recycling and recovery.
2. At the DOA, Lot 2 was the subject of a lease dated 7 February 2014 granted by ALF to Boiling Pty Limited ("Boiling"). Boiling was associated with ALF and DADI but those companies did not hold any shareholding interest in Boiling and Boiling did not hold any shares in them.
3. The lease was for a period of one year, with three one year options for renewal, none of which had been exercised at the DOA. DADI conducted operations on Lot 2 under an informal licence from Boiling. After the DOA, Boiling sought compensation under the JTC Act for the acquisition of its interest in Lot 2 and was awarded $11,000.

THE VALUATION METHOD

1. In Apokis v Transport for NSW [2020] NSWCA 39 at [36], Basten JA (with whom Leeming and Brereton JJA relevantly agreed) stated with reference to the concept of "market value" referred to in s 56(1) of the JTC Act that the language there used "has been understood as encompassing the exercise described by the High Court in 1907 in Spencer v The Commonwealth" ((1907) 5 CLR 418; [1907] HCA 82). His Honour then quoted the following passages from the judgments in that case of Griffith CJ and Isaacs J respectively: "The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together." "We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property."
2. Lot 1 was valued by the conventional method of considering comparable sales. The parties to the compensation proceedings however agreed that there were no relevant comparable sales which would enable this method to be adopted in respect of Lot 2. As a result both sides adopted the use of a discounted cash flow ("DCF") methodology, by which value was determined by forecasting future revenue, risks and costs and applying an appropriate discount rate to the anticipated cash flow. By this means, the potential use of the land was able to be taken into account in the valuation process (see Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298 at [173]-[174].
3. The LEC noted that RMS's experts had some reservations about the use of the DCF method but these are not relevant to the appeal (Judgment [6]). To facilitate the DCF valuation, DCF spreadsheets were prepared identifying the large number of relevant inputs and showing the amounts for which each party contended for each input. Using the electronic form of the spreadsheets, the impact of changing particular inputs on the final outcome was able to be readily determined. The spreadsheet identified approximately 300 lines of inputs, of which in excess of 50 were identified as being in dispute between the parties.
4. The DCF inputs for which ALF contended reflected its case as to the highest and best use to which Lot 2 could be put. This was as follows: "(1) Landfilling for 8 years [after the DOA] by importation of waste soils; (2) Operation of a recycling business (on various parts of the land) in years 1 to 8; (3) Subdivision of "surplus" land; and (4) Operation of a new RRWTF building in years 9 to 29." (Judgment [140])
5. The RRWTF referred to above in element (4) is a Resource Recovery and Waste Transfer Facility that ALF argues a hypothetical purchaser would erect on a 5.75 hectare portion of Lot 2.
6. On the other hand, RMS's case was that the highest and best use of Lot 2 was a continuation of landfilling for eight years by importation of waste soils (the first element in ALF's case) and thereafter the sale of the property as one lot. It accordingly rejected elements (2), (3) and (4) in ALF's case.
7. ALF's case required the consideration at the LEC hearing of expert evidence in the following fields: 1. Town planning; 2. Traffic; 3. Geotechnical engineering; 4. Contamination; 5. Environmental management (specifically leachate and landfill gas management); 6. Waste operations; 7. Quantity surveying; 8. Land valuation; and 9. Business valuation.

THE COMPENSATION PROCEEDINGS

1. The proceedings were heard by Sheahan J principally in the period from 16 October 2017 to 30 April 2018, with further limited submissions being made in April and May 2019.
2. At the hearing, evidence was heard from some 24 experts in the fields of expertise referred to above. As well, there were six industry witnesses. Over 5,000 pages of exhibits produced in hard copy form for the purposes of this appeal represented only a limited proportion of the whole of the written material that was before the LEC.
3. The parties' closing written submissions totalled about 1,000 pages and their closing oral submissions occupied some 500 pages of transcript.
4. His Honour's 270 page judgment was carefully structured and expressed. After dealing with introductory matters in the first 50 pages, his Honour sought over the next 90 pages to summarise the expert evidence that had been led before him. Over the following 35 pages he dealt with the parties' submissions and expressed his conclusions as to the highest and best use of Lot 2. On the next approximately 40 pages he expressed his conclusions as to the matters of expert opinion regarding the market value of Lot 2. After dealing with the market value of Lot 1, his Honour then addressed ALF's disturbance and special value claims in respect of Lot 2, before concluding his judgment.

THE GROUNDS OF APPEAL

1. ALF's right of appeal under s 57(1) of the Land and Environment Court Act 1979 (NSW) ("the LEC Act") is limited to challenges to orders or decisions of the LEC "on a question of law" (s 57(1)).
2. By its Notice of Appeal ALF contended that the LEC erred on the following questions of law: "Relating to whole of the decision in the court below 1. The Court erred in respect of a decision on a question of law because it constructively failed to exercise jurisdiction in that it failed to treat with the disputed evidence and competing submissions in a way that produced a rational and reasoned conclusion as to the assessment of the compensation having regard to s 55 of the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act). The Court: a. Failed to determine inputs necessary to be determined for the proper use of the discounted cash flow methodology (DCF) in order to determine the highest and best use of and the market value of the land. b. Failed to determine the highest and best use of the land and the market value of the land by a critical assessment of the contested issues in dispute. The Court failed to make any critical assessment of the Respondent's case and failed to consider or determine substantial integers of the Appellant's criticism of the Respondent's case. c. Failed to perform its function with respect to the use of expert evidence: (i) by failing to examine and engage with the substance of the experts' competing opinion(s) for the purpose of forming the Court's own assessment including by reference to documentary evidence; (ii) to the extent that the Court rejected the evidence of the experts called in the Appellant's case, by accepting the evidence of the experts called in the Respondent's case in its entirety, by default; (iii) by concluding that expert evidence from a critical witness, Dr Ferrier, was to be preferred on the basis of alleged experience in Court matters under the Act. d. Failed to determine the Appellant's claims under ss 59(1)(c) at all; and e. Failed to determine the Appellant's claims under ss 59(1)(f) on a critical review of the contested evidence including failing to refer to documentary and lay evidence of the Appellant. 2. Further, or in the alternative, the Court erred in respect of a decision on a question of law by failing to provide any, or any adequate reasons, with respect to substantive contested issues involving: a. The inputs to be determined for use in the DCF; b. The determination of the highest and best use of the land; c. The assessment of market value; d. The existence of a relationship between the Appellant and Dial a Dump Industries Pty Limited (DADI) by which the conduct of, and losses incurred by, DADI ought be attributed to the Appellant; and e. The Appellant's claims under s 59(1)(c). 3. Further, and in the alternative, the Court erred in respect of a decision on a question of law by a denial of procedural fairness by expressing a preference for a critical witness, Dr Ferrier, based upon perceived experience in the Court's compensation jurisdiction without providing an opportunity to the Appellant to comment upon or provide critique of that potential finding. 4. The Court erred in respect of a decision on a question of law because a fair minded lay observer might reasonably apprehend that the Court might not have brought an impartial mind to bear in determining the substantive contested issues arising because: a. in resolving the conflicting expert evidence across 11 disciplines and involving 11 expert witnesses in the Appellant's case and 13 expert witnesses in the Respondent's case and affidavit and oral evidence from 3 senior managers called for the Appellant and affidavit and oral evidence from 3 lay persons called for the Respondent, the Court preferred the Respondent's witnesses on every occasion (including on over 60 inputs for use with the DCF); and b. it only accepted submissions of the Respondent on contested issues. Relating to that part of the decision in the Court below concerning compensation for disturbance 5. The Court erred in respect of a decision on a question of law concerning the construction of s 59(1)(f) in confining the scope of that provision to require: a. a physical or active use, where on its proper construction the provision requires a consideration of an actual use in contrast to a higher and better use; and b. a requirement it be a physical or active use made by the claimant where on its proper construction the provision only requires that there be an actual use of the land and that user is not limited to the claimant for compensation. 6. The Court erred in respect of a decision on a question of law in failing to conclude that by reason of the proceedings in Dial a Dump Industries Pty Limited [2015] NSWLEC 172 and Dial a Dump Industries Pty Ltd (2016) 216 LGERA 283 an issue estoppel precluded the Respondent from denying that DADI was relevantly the Appellant's agent. 7. The Court erred in respect of a decision on a question of law in that it failed to identify and apply the law in relation to attribution of loss as between ALF and DADI in respect of: a. The claim made under ss 55(d) and 59(1)(c) (Disturbance - relocation); and/or b The claim made under ss 55(d) and 59(1)(f) (Disturbance - other). Relating to that part of the decision in the Court below concerning compensation for special value 8. The Court erred in respect of a decision on a question of law concerning the construction of s 57 and s 55(b) (Special value) in confining the scope of that provision to require 'an advantage objectively determined from the land or some attribute or property of it' where, on its proper construction, the provision only requires 'any advantage, in addition to market value, to the person entitled to compensation, which is incidental to the person's use of the land'. 9. The Court erred in respect of a decision on a question of law in that it failed to identify and apply the law in relation to attribution of conduct as between ALF and DADI in respect of the claim for special value."

THE PRIMARY JUDGMENT

1. ALF's submissions in relation to Grounds 1 and 2 focused on the extent to which Sheahan J had addressed the principal line items forming part of the DCF analysis. I turn therefore to what his Honour said in that respect.

Discount rate

1. The parties agreed before the LEC that assessment of the value of Lot 2 required consideration of an appropriate discount rate to be applied to the projected business cash flows that were incorporated into the DCF model. Over some 12 pages of his judgment, Sheahan J summarised the lengthy expert evidence given by Mr Tony Samuel (for ALF) and by Dr Rodney Ferrier (for RMS) about the manner in which the discount rate should be calculated.
2. Mr Samuel adopted a rate of 8.7% for all of the businesses that ALF contended that the hypothetical purchaser of the land would conduct. He based this on the weighted average of the cost of debt and the cost of equity ("WACC"), using the Capital Asset Pricing Model ("CAPM") to establish the cost of equity component. By a "beta element", Mr Samuel made an allowance in respect of that component for volatility in the relevant industry.
3. Unlike Mr Samuel, Dr Ferrier considered it appropriate to derive a cash flow only in respect of the landfilling business that he envisaged a hypothetical purchaser would conduct in the years one to eight after the DOA ("Years 1 to 8"). He did not consider that recycling operations would be sufficiently profitable in that period to be relevant to the value of the land. Likewise, he considered that the proposed RRWTF business, projected by ALF for the years nine to 29 after the DOA ("Years 9 to 29"), was too speculative to be brought into account and that the value of the land should therefore be assessed on the assumption that it would be sold at the end of the Years 1 to 8 period.
4. Dr Ferrier considered that cash flows in Years 1 to 8 should be estimated on the basis of Earnings Before Interest Tax Depreciation and Amortisation ("EBITDA") and an analysis of sales of significant assets (principally operating waste disposal businesses) within the landfill industry. On this basis Dr Ferrier arrived at a discount rate of 13.9%.
5. As well as in the business cash flows context, a discount rate was required to be identified in relation to the costs of initial land remediation. In respect of this, Mr Samuel applied the same discount as for the business cash flows whilst Dr Ferrier took the view that the remediation costs were subject to a significantly lower estimation risk, and to no business risk, with the result that a different, and lower, rate should be applied.
6. Later in his judgment, the primary judge gave his reasons for preferring Dr Ferrier's evidence to that of Mr Samuel.
7. His Honour's first reason was: "(i) Dr Ferrier's superior qualifications and experience in the assessment of compensation under the JTC Act, in cases involving extinguishment of a business, and his clear understanding and articulation of relevant provisions of the Act, DCF, and related methodology."
8. On appeal ALF attacked this finding on the separate basis stated in Ground 6 to which I will refer later. For reasons I have given when addressing that Ground, this reasoning was open to his Honour to adopt.
9. In giving nine further separately stated reasons, his Honour, inter alia, accepted criticisms made of Mr Samuel's concentration in his analysis on overseas listed companies' performances and of his rejection of consideration of certain transactions that post-dated the DOA. In those reasons he also accepted Dr Ferrier's opinion that there were difficulties in applying Mr Samuel's method and that Dr Ferrier's method was instead based on anticipated EBITDA capitalisation rates evident in comparable transactions in Australia. By way of example, his Honour's second of ten reasons was expressed as follows: "(ii) Mr Samuel's use of comparable businesses and transactions in this case was flawed, and Dr Ferrier's was correct. Mr Samuel excluded from his list of comparable stock exchange listed corporations the only two which involved Australian (NSW) businesses. Mr Samuel persisted in relying upon business statistics of large to very large US corporations, and large to very large European (French, Finnish, and UK) corporations. These are listed in Mr Samuel's Appendix F to CB 65. For each company, the relevant currency is given, as well as the market capitalisation (as at 19 December 2014), net debt, enterprise value (EV), EBITDA and the ratio EV/EBITDA."
10. Finally, his Honour referred to Dr Ferrier's summary of his reasons why Mr Samuel's opinions should be rejected and concluded that Dr Ferrier's evidence should be preferred to that of Mr Samuel.

Waste operations - Years 1 to 8

1. ALF's case in respect of Years 1 to 8 was that the landfill void would be filled in the eight years following the date of the DOA and that, concurrently, the hypothetical purchaser would continue to conduct the recycling facility. Determination of the likely cash flows from these operations, and indeed their viability, involved the primary judge's consideration of a number of inputs to the DCF spreadsheet. Those that were the subject of specific submissions on appeal were as follows.

Receivable tonnage

1. The primary judge referred to the maximum of 240,000 tonnes per annum of landfill that the Environmental Protection Licence ("EPL") prescribed could be processed at Lot 2 and referred to the experts' projections as to the tonnages that might be achievable by a hypothetical purchaser. Messrs Haywood and Berkefeld (expert witnesses for RMS) projected 134,400 tonnes per annum whilst Mr Webster (expert witness for ALF) projected 168,000 tonnes per annum. His Honour referred to their reasons for these projections and quoted two portions of Mr Webster's cross-examination.
2. His Honour did not expressly resolve this dispute but did so impliedly by accepting RMS's DCF spreadsheet.

Recovery rates for plastics and timber

1. On receipt from a customer of material for disposal, the waste operations business charged a "gate fee", a substantial part of which comprised a government levy. This levy was not payable by the operator to the extent that the material was able to be recycled. As a result, the extent to which delivered material was likely to comprise of recyclable material (that is, "recovered material") was of importance in estimating the profitability and viability of the landfilling and recycling businesses.
2. Mr Webster estimated a recovery rate of 65%, whilst Messrs Haywood and Berkefeld estimated a rate of 51%. They differed particularly on the recovery rates for plastics and timber. The primary judge summarised their evidence over four pages of his judgment. His Honour did not make any express finding on this issue but again made implicit findings by adopting RMS's DCF spreadsheet.

Gate fees

1. The experts disagreed as to the gate fees that the hypothetical purchaser could expect to charge in respect of material to be dealt with by the waste operations business. The primary judge noted that they agreed that advertised or publicly available gate fee rates were not the correct point of comparison because "deals are done to attract tonnes to the site", resulting in reduced charges being levied.
2. His Honour summarised the evidence over four pages of his judgment.
3. The primary judge noted that in cross-examination Mr Webster accepted that there was "no objective market evidence" to support his projected rate. His Honour then referred to RMS's experts' estimate which was said to be based on "their discussions with people in the waste operations industry" and noted that RMS also relied on two affidavits from persons in the industry and on two documents said to support RMS's case on this issue.
4. Later in his judgment, the primary judge summarised the parties' submissions concerning gate fees. His Honour noted ALF's criticism of the two industry witnesses that RMS called on this issue and referred again to Mr Webster's concession in cross-examination that there was no objective market evidence to support his view.
5. In resolving the issue in favour of RMS, his Honour referred to the experts on each side as having relevant experience and expertise but relied on the evidence that RMS called from the two industry witnesses and on the documents it tendered.

Period of deferral of recycling operations

1. The primary judge first noted that the site was the subject of development consents which required all recycling activities to be conducted within an undercover facility (referred to at some points in the evidence as "the shed"). The experts agreed that this condition applied to the area relevant to the recycling operations and that at the DOA the condition was not being complied with in respect of the existing operations.
2. His Honour recorded that Messrs McLandsborough and Webster, ALF's experts, considered that eight to 12 months would be required for the shed to be built but there was a likelihood that the regulator would agree to recycling operations continuing in the meantime (Judgment [232]).
3. On the other hand, Messrs Haywood and Berkefeld, RMS's experts, considered that the hypothetical purchaser would have to delay its commencement of recycling operations for 15 to 18 months after the DOA to enable the shed to be built. As a result, they projected that cash flow from recycling activities would not commence for 15 months after the DOA.
4. The primary judge rejected Messrs McLandsborough and Webster's view that negotiations with the Council would result in permission being given to commence recycling operations from the DOA. His Honour described Mr Webster as having taken into account "very minimal time considerations … [for the] proposed negotiations with Council". More generally, his Honour found that the advice that Messrs Haywood and Berkefeld opined would be given would be "cogent advice for a hypothetical purchaser, due to the existing DC [Development Consent], EPL [Environment Protection Licence] and the recycling operations, existing at the DOA".

Conclusion as to recycling operations in Years 1 to 8

1. The primary judge concluded that recycling operations in Years 1 to 8 after the DOA would not have been commercially feasible and would have made a loss, leading to their exclusion as a component of the highest and best use of Lot 2.
2. His Honour gave his reasons over four pages of his judgment. These were in essence as follows. First, he concluded that the construction of a temporary shed for the waste recycling was necessary and that ALF's expert, Mr Webster, had allowed insufficient time for the hypothetical purchaser to negotiate with the local council to obtain its permission to continue recycling operations before erection of the shed. Further, he noted that ALF's experts contemplated that the hypothetical purchaser would have to construct the undercover facility "on three occasions within an eight to ten year period" which would increase capital costs dramatically for a hypothetical purchaser. Moving the facility would have been necessary as a result of the filling from time to time of different parts of Lot 2.
3. Secondly, his Honour accepted RMS's experts' identification of four principal matters that would adversely impact on the conduct of such a business, namely, the need to obtain an extension of the development consent, the need to construct an undercover facility for recycling operations, ongoing obligations to manage existing and future environmental issues and limitations on the volume of recycling waste that could be obtained and processed. Thirdly, his Honour preferred the quantity surveying evidence of Mr Lawson, who gave evidence on behalf of RMS, to that of Mr McLandsborough, who gave evidence on behalf of ALF. His Honour found Mr Lawson's evidence to be impressive in identifying the costs for which allowance needed to be made. Fourthly, his Honour accepted the evidence of Dr Ferrier, given on behalf of RMS, that: "3.2. The consequences of the delayed commencement of operations (resulting in a shorter operational life), the high initial capital costs and the low operating profitability of the waste recycling operations are such that the net present value of the cash flows from those operations is less than the market value of the land (Area B and, possibly, Area A) which would be used for those operations…"

Subdivision and sale of surplus land

1. ALF's case as to the highest and best use of Lot 2 involved the hypothetical purchaser not only using the land for landfilling and recycling for Years 1 to 8 and thereafter for Years 9 to 29 operating a RRWTF facility, but also subdividing and selling of surplus land as it became available in Years 1 to 8. In response, RMS contended that the subdivision of surplus land was not feasible, on physical and regulatory grounds, and would likely be disregarded by the hypothetical purchaser.
2. The primary judge referred to 25 steps which RMS contended that the hypothetical purchaser would have to undertake in order to subdivide and sell the relevant parts of Lot 2 in Years 1 to 8. These related to both physical and regulatory aspects of the proposed subdivisions. His Honour summarised the steps which RMS had identified and explained in more than 40 pages of its written submissions. His Honour then described, at length, ALF's reply in relation to each of those 25 steps.
3. The primary judge subsequently concluded that the hypothetical purchaser would not take into account ALF's subdivision proposal in assessing the value of Lot 2. His Honour gave a number of reasons. First, he referred to inconsistencies between the subdivision plans on which ALF relied. Secondly, he referred to a number of "key limitations, which would delay any subdivision of" the relevant areas. Thirdly, he concluded that any subdivision would "require consideration of significant environment management works, differential settlement, project designs, and regulatory requirements". Fourthly, he considered that the hypothetical purchaser would have to construct an internal road and that there was insufficient evidence before his Honour as to how the capital costs and other aspects of building that road were accounted for in ALF's DCF analysis. Further, he adopted RMS's submission that ALF's valuer, Mr Dyson, had not turned his mind to the 25 issues that RMS raised and are referred to above.

Environmental management and contamination considerations

1. Environmental management and contamination considerations were relevant to a number of aspects of the highest and best use for which ALF contended including in relation to the use ALF claimed a hypothetical purchaser would make of Lot 2 in Years 9 to 29.
2. The primary judge identified the key components of the expert evidence on environmental management consideration as follows: "(1) The approach a party to the s 56 sale would take to the costs associated with leachate management, including the scope, nature and cost of necessary infrastructure, which would be factored in to the DCF valuation; (2) The approach a party to the s 56 sale would take to landfill gas management, including the scope, nature and cost of necessary infrastructure, which would also be factored into the DCF valuation; and (3) Advice that would be given to a purchaser about the environmental management and landfill closure considerations that may impact upon [the plan of subdivision proposed by Mr McLandsborough, one of ALF's experts]."
3. His Honour then summarised the expert evidence over the following 26 pages of his judgment and later in his judgment he summarised the parties' submissions. A total of nine experts gave evidence on these issues. His Honour then stated his conclusions.
4. In respect of the necessary leachate management system and its costs, the primary judge accepted the evidence of Messrs Gamble and Dixon, RMS witnesses. In respect of the nature and cost of the necessary landfill gas infrastructure, his Honour accepted the evidence of Mr Welsh, also an RMS witness. His Honour continued: "[639] My views in this regard have been formed on reconsideration of their respective qualifications and experience, their relative conservatism (in the Applicant's favour), their reliance on modelling (e.g. Welsh's extensive modelling cf., Fridell's very limited modelling), and the transcript of their performance under cross-examination" (Mr Fridell was an ALF witness)."
5. His Honour also quoted and accepted RMS's submissions concerning Mr Welsh's modelling which would require "works across the entirety of Lot 2". In its submissions RMS had contrasted Mr Welsh's modelling with the "guess work that the applicant's experts have engaged in".

Geotechnical considerations

1. The primary judge stated that on this topic "[t]he primary point of disagreement [between the experts] related to the magnitude and timing of settlement on Lot 2, and its consequential effect on the Applicant's proposed 'highest and best use'". His Honour then summarised the evidence given on the topic by Mr Mostyn for ALF and Dr Thomas for RMS.
2. His Honour quoted and accepted RMS's counsel's summary of this expert evidence and his reasons why that of Dr Thomas should be accepted in preference to that of Mr Mostyn. His Honour said that he had three reasons for preferring Dr Thomas' evidence.
3. First, his Honour referred to Dr Thomas' qualifications and "extensive experience" and accepted his approach to the due diligence requirements in preference to those of Mr Mostyn, who he said recommended only "limited due diligence considerations, beyond the AECOM geotechnical investigations". Secondly, his Honour considered that Dr Thomas had been more thorough in his research as to differential settlement rates, describing it as "extensive". Thirdly, he considered that Mr Mostyn's assumption that the hypothetical purchaser would hold "experience in developing large sites for industrial/commercial uses" was contrary to authority.
4. His Honour then identified geotechnical advice that he considered the parties to the hypothetical sale would have sought. This broadly coincided with the opinions that the two experts expressed in evidence.

Other areas the subject of expert evidence

1. Other areas, including the following, were the subject of expert evidence which was addressed by the primary judge in a similar fashion to that in which he addressed the areas of expertise referred to above. It is unnecessary to refer to them in detail because they were not the focus of ALF's submissions on appeal. I note however that ALF emphasised both in writing and orally that Appeal Grounds 1 and 2 were applicable to the judgment generally and that the areas of expert evidence that it focused on in its submissions were examples of, but not exhaustive of, the bases of the complaints it made in Grounds 1 and 2. The other areas to which I have referred include:

• Town planning;
• Traffic; and
• Quantity surveying.

Highest and best use

1. The primary judge commenced by noting that, as a general principle, the Court is required to determine the highest and best use of land before its value is determined. His Honour continued: "[474] The parties agree that, in the course of purchasing the land, the hypothetical purchaser (1) would have regard to all relevant available information; (2) would be cognizant of all circumstances which might affect the value of the land; and (3) would require expert advice as to each of the topics upon which the Court has heard evidence, … Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259, 276-277; Boland v Yates Property Corporation Pty Limited ("Boland v Yates") (1999) 74 ALJR 209; [1999] HCA 64, at [271]-[274]."
2. His Honour then stated that it was necessary for him to determine "the feasibility of each aspect of the valuation scenario, in the light of all the expert evidence".
3. His Honour then summarised ALF's submissions, noting that it contended for a highest and best use as set out in [184] above.
4. His Honour then described RMS's proposed highest and best use as follows: "(1) The use of the land to earn income by filling the landfill void on Lot 2 with waste soils over an eight-year period from the DOA; and (2) The sale of the whole of the land, at the conclusion of those land filling operations, as general industrial land, at the end of year 8."
5. His Honour referred to the following "three key submissions" put by RMS and then outlined the 25 steps to which I have referred in [223] above: "(1) The subdivision of surplus land was not feasible, on physical and regulatory grounds, and would likely be disregarded by the purchaser; (2) The operation of the recycling business in Years 1 to 8 was also not financially feasible, and would likely be disregarded by the purchaser; (3) The operation of the RRWTF building in years 9 to 29 was not feasible, on regulatory or economic grounds, and would likely be disregarded by the purchaser. In any event, it was not a proper component of the valuation methodology."
6. His Honour then summarised ALF's submissions in reply, including its response to the 25 steps identified by RMS. In all, the summary of the parties' respective submissions occupied some 20 pages of his Honour's judgment.
7. His Honour then stated that he accepted RMS's submissions on the highest and best use and had therefore come to the following conclusions: "(1) On the DOA, there existed the potential to continue the filling of the landfill void, on Area E, as a profitable enterprise, provided the fill material attracted no landfill levy. This could be achieved by allowing fill consisting of excavated natural material (ENM), and could be totally filled in 8 years; and (2) Resource recovery (RR) activity was permitted under existing DCs, but was limited primarily to a maximum of 240,000 tonnes per annum, and time-limited to one further five-year extension, subject to the continuation of the landfill and the construction of a building in which to conduct RR; and (3) When the activities (1) and (2) above cease, at the end of the 8 years, the highest and best use of the land would be to liquidate it by sale of the unsubdivided areas post closure of the landfill, and to provide for long term leachate and land fill gas infrastructure and maintenance."
8. The particular aspects of ALF's proposed highest and best use which the primary judge rejected were as follows:

Recycling operations in Years 1 to 8

1. As indicated above, the primary judge concluded that the conduct of recycling operations in Years 1 to 8 would not have been commercially feasible and should not therefore be included as part of the highest and best use of Lot 2. His reasons are referred to at [219]-[221] above.

Subdivision and sale of surplus land

1. The primary judge's reasons for rejecting that the subdivision and sale of surplus land would form part of the highest and best use that the hypothetical purchaser would make of Lot 2 has been dealt with above at [222]-[224].

Operation of a Resource Recovery and Waste Transfer Facility ("RRWTF") in Years 9 to 29

1. The primary judge also found that the operation of a RRWTF in Years 9 to 29 would not be feasible in commercial terms and therefore would not affect the hypothetical purchaser's assessment of the value of Lot 2 at the DOA. He found Lot 2's use for that purpose would be "speculative". This reflected the opinions of Dr Ferrier which Dr Ferrier summarised in his evidence as follows: "104 Dr Ferrier. It is also my opinion that no reasonable prospective purchaser of the land and business opportunity (i.e. the land with vacant possession and a unique opportunity to conduct a landfilling business from the site) in December 2014 would determine the price to pay for the land taking into account the prospect of establishing an entirely new business activity on the land in more than 8 years' time, for which there is significant doubt as to whether consents could be obtained and which could be conducted from any similarly zoned land. 105 There are two principal reasons why I hold the opinion expressed in the previous paragraph: (a) As the prospective future use is not unique to the land, taking into account a future business value would attribute a property to the land which it does not have; and (b) As a matter of general principle, no reasonable purchaser would pay to a vendor any sum for a business which does not exist where the entire responsibility for, and risk associated with, the establishment, development and profitability of the business lies with the purchaser and not with the vendor. 106. In any case, it is my opinion that a reasonable prospective purchaser of the land in 2014 would consider that the prospect of a new waste transfer business in more than 8 years' time would be so speculative and uncertain, and of such high risk, that it would be necessary to adopt a very significant discount rate which would be likely to result in very little net present value."
2. His Honour described "[t]he most relevant dispute" in this context as the conflicting opinions of the business valuers on the anticipated cash flows and appropriate discount rate. I have summarised his Honour's findings on these issues in [195]-[204] above. These were adverse to ALF, as were those on other significant issues relevant to the feasibility of a hypothetical purchaser conducting an RRWTF business in Years 9 to 29: see above at [225]-[233] respectively in relation to environmental management, geotechnical and contamination considerations in particular.

Conclusion on highest and best use

1. These considerations led the primary judge to conclude that the highest and best use of Lot 2 was that it be filled for eight years and then sold in a single parcel.

The market value of Lot 2

1. It then remained for the primary judge to assess the market value of Lot 2, taking into account his determination of the highest and best use of Lot 2. His Honour's consideration of the expert evidence, parties' submissions and statement of his conclusions occupied some 43 pages of his judgment.
2. His Honour indicated that the primary area of contest between the parties related to the costs of handling "the non-compliant stockpiles, especially SP 21" ("Stockpile 21"). The emphasis on Stockpile 21 was reflected in the parties' submissions on appeal. ALF proffered the way in which the primary judge addressed the Stockpile 21 issues as a prominent example of the problems of which it complained in Grounds 1 and 2.

Stockpile 21

1. A significant input in the DCF spreadsheet was the costs of "initial site remediation". This was to a significant extent a reference to the costs that a hypothetical purchaser would incur in removing Stockpile 21, which was comprised of waste materials.
2. RMS's case was that the cost to the hypothetical purchaser would be in the order of $30 million because it would incur a government levy, even if the stockpile was only moved into the void adjacent to it on Lot 2. This case was in part based on the evidence of Mr Clay, an expert called by RMS, that the proper classification of Stockpile 21 was as entirely comprised of asbestos waste.
3. On the other hand ALF contended that much of Stockpile 21 did not contain asbestos. ALF contended that a hypothetical purchaser was not likely to be required by the Environment Protection Authority ("EPA") to clean up the stockpile and, even if it was, it was unlikely to encounter significant asbestos in doing so. As a result, on ALF's case, Stockpile 21 represented "an opportunity for a hypothetical purchaser (ie, the availability on site of recyclable material) and not a significant liability".
4. The primary judge summarised ALF's submissions on this topic, including those making a substantial attack on Mr Clay's credibility. His Honour noted ALF's submission that Mr Clay was not "suitable to give objective evidence to either of the hypothetical parties due to the fact that he had already provided advice to the acquiring authority ..." and that Mr Clay's evidence was "particularly partisan", with ALF criticising his demeanour during cross-examination and complaining that his advice was premised on a "reasonable worst case" scenario.
5. His Honour summarised RMS's submissions and then stated his conclusions. His Honour accepted the evidence of Dr Ryall, an RMS expert witness, concerning the composition of the stockpile and Mr Clay's evidence of the estimated cost of its clean-up. On appeal, ALF complained that his Honour failed, in particular, to deal adequately with ALF's substantial attack on Mr Clay's credit, it having made detailed submissions in support of that attack.

Other relevant issues

1. His Honour summarised the quantity surveying evidence and submissions, and, for a number of identified reasons, accepted the evidence of Mr Lawson, RMS's expert, in preference to that of Mr McLandsborough, ALF's expert.
2. His Honour then referred to geotechnical evidence referable to the void space to be filled in Years 1 to 8 and accepted the evidence of RMS's experts over that of ALF's experts (see [230]-[233] above).
3. His Honour next considered the expert evidence concerning ongoing environmental issues with Lot 2, especially the generation of leachate and landfill gas, in relation to which a total of nine experts gave evidence. Having summarised the evidence and parties' submissions, his Honour reached the conclusions to which I have referred above (see [225]-[229]).
4. His Honour then addressed the parties' submissions concerning the gate fees likely to be generated by the waste operations business in Years 1 to 8 and reached the conclusions to which I have referred at [210]-[214] above.
5. His Honour then addressed the parties' submissions concerning the value of Lot 2 at the conclusion of the period of Years 1 to 8. His Honour had earlier summarised the expert evidence as to this value.
6. Finally, his Honour considered the appropriate discount rate to apply to the business related cash flows and the initial stockpile remediation costs. His Honour reached the conclusions referred to at [195]-[204] above.

Conclusion on market value

1. His Honour's conclusions on these various sub-issues led to him assessing the value of Lot 2 at the amount for which RMS contended, namely $45,742,467.

ALF's disturbance claim

1. ALF claimed that it was entitled to be compensated for its loss attributable to disturbance. It relied on s 59(c) and s 59(f) of the JTC Act. Those provisions define "loss attributable to disturbance" as including: "(c) financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs), … (f) any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition."
2. ALF's case was that after the DOA, and to the extent that it was able, it relocated its waste transfer and collections operations to other premises in St Peters and incurred costs in the order of $1.3 million in doing so. It also alleged that it suffered further relocation losses because its anticipated business when conducted at the alternative premises was not likely to be as profitable as it would have been on Lot 2. The reason for this was that not all aspects of the business were able to be relocated due to limitations of the alternative premises. It estimated these losses at $173,753,000. In addition, ALF claimed further amounts of $1,486,000 and $2,620,000 in respect of other losses of a similar character.
3. ALF contended that there was no overlap between its disturbance and market value claims because the disturbance claim was advanced on the assumption (which ALF otherwise contested) that the primary judge was correct to exclude both the proposed recycling operations for Years 1 to 8 and the RRWTF operations for Years 9 to 29 from the calculation of market value compensation to which ALF was entitled.
4. A difficulty which ALF encountered in mounting its s 59(f) disturbance claim was however that, although it was the owner of Lot 2 at the DOA, it neither occupied nor actually used the land. DADI occupied and used Lot 2 for waste operations but was held by this Court in Dial A Dump Industries Pty Ltd v Roads and Maritime Services (2017) 94 NSWLR 554; [2017] NSWCA 73 not to have any proprietary interest in it. His Honour summarised as follows the three means by which ALF sought to overcome this difficulty: "(a) There was an actual use of the land (by DADI), and s 59(1)(f) does not require that the actual use be that of the person entitled to compensation (ALF); (b) DADI was a wholly owned subsidiary of ALF, so, if DADI has suffered a loss, ALF has suffered the same loss, or an equivalent loss; and (in the alternative) (c) DADI used the land as an agent for ALF."
5. Over some 24 pages of his judgment, the primary judge then summarised the parties' submissions on the disturbance claim and referred to a number of recent decisions of this Court that were contended to be relevant.
6. His Honour then rejected the bulk of ALF's disturbance claims on the following bases: "[819] The first alternative claim for entitlement under s 59(1)(f) depended on there being no requirement that actual use be that of the Applicant for compensation in a particular case. If this were correct, it would be contrary to binding recent authority, and the many cases in which passive owners of interests in land have been refused compensation under s 59(1)(f). [820] The second alternative, based on attribution of the occupant DADI's loss to the claimant ALF, would appear contrary to the object, scope and purpose of s 59, as explained by the authorities. [821] The third alternative, based on an agency relationship, has simply not been established. [822] Accordingly, I have concluded that ALF's disturbance claims, other than for legal and valuation costs, which are agreed, must fail."
7. His Honour did not refer in his conclusions to s 59(c).
8. As to the first alternative claim, the primary judge appears to have accepted the submissions in reply of RMS that he had earlier quoted (at Judgment [753]-[758]). His Honour referred in that context to the decision of Jagot J in Almona Pty Ltd v Roads and Traffic Authority of NSW [2008] NSWLEC 112; (2008) 160 LGERA 375 at [60] that "the actual use of the acquired land in [s 59(f)] is the use by the dispossessed owner". Further, his Honour's reference to "the many cases in which passive owners of interests in land have been refused compensation under s 59(1)(f)" appears to have been to his earlier reference to RMS submissions concerning cases in which the actual use of the land was by a tenant (at Judgment [760]). In addition, his Honour's reference to "binding recent authority" would seem to be a reference to the decision of this Court in Health Administration Corporation v George D Angus Pty Ltd (2014) 88 NSWLR 752; [2014] NSWCA 352 to which his Honour had earlier referred in his summary of RMS's reply submissions (at Judgment [756]-[757]). However that decision did not decide the precise point presently in question but rather the different, but still relevant, point that financial losses, as distinct from financial costs in the narrow sense, are recoverable under s 59(f).
9. It is not clear to what his Honour was referring in relation to the second alternative basis of ALF's claim but it was presumably that s 59(f) must be applied according to its terms and not with a latitude which would allow a dispossessed owner to disregard the corporate veil and treat the use of land by one of its subsidiaries as its own use.
10. As to the third basis of claim, his Honour had earlier accepted RMS's submissions (Judgment [764]) as follows: "I accept the submissions of RMS (pars 1279 to 1304) in this regard: The asserted agency relationship between ALF and DADI has not been established, so as to show that the income and the expenditure of DADI, relied upon as the foundation of ALF's disturbance claim, was, either in fact or as a matter of law, the income and expenditure of ALF, or ought to be treated as the income and expenditure of ALF. That conclusion makes it impossible to award compensation to ALF for the alleged lost profits, and any other losses or expenses incurred by DADI in respect of Lot 2."
11. His Honour also rejected ALF's argument that what occurred in the DADI litigation precluded RMS from denying that DADI acted as ALF's agent in using the land ([765]-[769]). In particular, his Honour pointed to the differences between the issues in that case and the issues in the present case.

ALF's special value claim

1. The primary judge referred in this context to the following observations of Wells J in Bronzel v State Planning Authority (1979) 21 SASR 513: "... There is no exhaustive definition of what special value is. If it exists, its value must be assessed at what it is worth to the owner at the date of valuation, and not at what it may be worth to him in the future or after due development. It must be something objectively ascertainable derived from the land or some attribute or propery (sic) of it and cannot be recognized if it rests in mere subjective affection or emotional involvement. For the rest, whether it is present and capable of being evaluated depends on all the circumstances of the case." (Judgment [827])
2. His Honour noted however that Wells J made these observations before s 57 and its counterparts were enacted, and accepted ALF's submission that: "... The Court's task is to determine the claim by reference to that statutory definition and not by any gloss to be imposed upon the words of the provision from authorities that predate the [JTC] Act." (Judgment [828])
3. His Honour then quoted ALF's detailed descriptions of its special value claim. They referred to DADI having commenced operations of another and larger recycling and land facility at Eastern Creek in 2012 and asserted that the business of Lot 2 had operated and had been intended to continue to operate as "a key supplement to the operation of, and [as an] efficient supplier of raw materials to the facility at Eastern Creek" (Judgment [824]). His Honour summarised the claim by stating that it was that "the use of Lot 2, as part of integrated operations with Eastern Creek, has a 'special' economic value to ALF, not covered by market value" (Judgment [835]).
4. His Honour noted that ALF conceded that it was only entitled to special value if DADI was using Lot 2 as ALF's agent because s 57 defined special value as a financial value which is "incidental to the person's use of the land". As his Honour had already held, in connection with ALF's disturbance claim, that DADI was not using the land as agent for ALF, ALF's special value claim failed (Judgment [837]-[839]).
5. His Honour then identified, and adopted, further, and alternative, reasons that RMS submitted that ALF's special value claim failed. Finally, as yet a further reason for the claim's failure, his Honour accepted the "very persuasive evidence, and compelling analysis" of Dr Ferrier, RMS's expert, in preference to the evidence of Mr Samuel upon which ALF based its special value claim.

GROUNDS 1 AND 2: CONSTRUCTIVE FAILURE TO EXERCISE JURISDICTION AND INADEQUACY OF REASONS

ALF's submissions

1. ALF acknowledged that as a "judicial valuer" the LEC is "not bound by the positions taken by the parties and does not determine whether a particular side is correct", citing Mobbs v Valuer-General (1922) 6 LGR (NSW) 73 at 78 per Pike J. ALF continued: "The LEC can reject expert evidence and determine matters for itself based upon its own experience. Yet these matters do not fundamentally alter the basic and defining characteristics of the LEC as a court, particularly one having an equivalent status to the Supreme Court. These include the duty to provide an independent and impartial forum for the hearing of the claim, the duty to act judicially with detachment and fairness as well as to provide sufficient reasons; and the need to assess and determine facts based upon evidence produced within an adversarial process." (citations omitted)
2. ALF then submitted that: "33. … the decision of Sheahan J rests upon an error of law, being a constructive failure to exercise the jurisdiction conferred on him. That error is evident in a number of the ways that his Honour purported to hear and determine ALF's claims for compensation. (1) The error in the whole of the decision is apparent in the manner by which his Honour repeatedly failed to properly use expert evidence in making his decision. (2) The error in the decision is also evident in the way that his Honour failed to understand the purpose of the DCF model that had been provided to him so that the purported resolution of the issue of the highest and best use of Lot 2 was no sensible resolution of the issue at all. (3) The error is also apparent in multiple failures to determine compensation by reference to substantive aspects of ALF's case, including in respect of the issues concerning Stockpile 21 and in respect of a claim for disturbance for relocation under s 59(1)(c) that was not determined. [numbering added] 34. Alternatively, even if this Court considered that his Honour might have exercised his jurisdiction, these same matters would establish that Sheahan J's reasoning fails to be exposed in the text of the Judgment to a manifestly insufficient degree, such that the decision would be one made on an error of law. 35. The result of any one of these errors being made out individually, or any number of them cumulatively, would mean no decision had been lawfully made to determine compensation under s 55 of the Just Terms Act. That is, the reasons given in the Judgment show a basic misunderstanding of the issues put before the LEC to such a degree that it undermines the lawfulness of the decision." (citations omitted)
3. ALF then contended that his Honour's "repeated adoption of the submission(s) of RMS without reference to the submissions of ALF or explanation for why the choice had been made" may itself be indicative of a constructive failure to exercise jurisdiction such as was referred to by Gaudron J in Minister for Immigration v Yusuf (2001) 206 CLR 323; [2001] HCA 30 at [41]. Further, ALF relied on the observations of Allsop P in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [2] that "central controversies put up for resolution by the parties must be dealt with. The competing evidence directed or relevant to such controversies must be analysed and resolved". It also cited Heydon JA's observation in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705; [2001] NSWCA 305 that the trier of fact must "so far as it is reasonably possible to do, … look not merely to the expertise of the expert witness, but … examine the substance of the opinion expressed" (at [71]).
4. ALF further complained that on many occasions the primary judge expressed "a general and absolute preference for one expert over another" without explaining his reasons for preferring one over the other and that his Honour's "expressed general preference for an RMS witness rarely involved any critical analysis of the substance of that expert's evidence".
5. ALF then sought to demonstrate the force of its complaints by referring to some of the most significant topics with which the primary judge dealt.
6. In its written submissions, ALF first referred to the topic of discount rates. It made multiple criticisms of the primary judge's conclusions in relation to discount rates, including a contention that there was an inconsistency in his Honour's conclusions and a criticism of his preference for Dr Ferrier's evidence on the basis of "his superior qualifications and experience in the assessment of compensation under the JTC Act".
7. Secondly, the submissions made many detailed criticisms of the primary judge's conclusions concerning the feasibility of a waste operations business being conducted after the DOA. In particular, ALF's submissions dealt with issues concerning deferral of recycling operations for a period after the DOA, the tonnages likely to be dealt with in the business, the gate fees that would be applicable, environmental management infrastructure and geotechnical considerations.
8. ALF placed particular emphasis in its written and oral submissions on the issues concerning the remediation of Stockpile 21. ALF was particularly critical of the generality with which the primary judge dealt with this topic and his consequent lack of findings on many of the detailed sub-issues that arose in relation to the stockpile. It also criticised the way in which the primary judge dealt with ALF's attack on the credit of Mr Clay, an important RMS expert who gave evidence concerning the composition of Stockpile 21 and the estimated cost of its clean-up. ALF submitted that there was "no analysis, still less any findings, engaging with" the many matters of credit and substance which ALF raised in relation to Mr Clay's evidence.
9. ALF made similar criticisms of the way in which the judgment dealt with, or failed explicitly to deal with, many of the other required inputs to the DCF model used in the valuation process. It contended that his Honour's reasons showed "little more than acceptance of the RMS position", constituting "a judicial ipse dixit".
10. In support of Ground 1, ALF also called in aid the manner in which the primary judge dealt with its disturbance claim, in particular that, so ALF contended, he failed to deal at all with ALF's claim under s 59(c) of the JTC Act. For the reasons appearing at paragraph [377] below concerning Ground 7, I have however found that the primary judge did not err in not expressly addressing s 59(c).
11. In oral submissions in conclusion on Grounds 1 and 2, ALF emphasised that the problems with the judgment to which it pointed were pervasive throughout it, and the complaints which it made were proffered by way of example and were not intended to be exhaustive.

RMS's submissions

1. RMS commenced its written submissions on Grounds 1 and 2 by accepting that there could be an error of law constituted by a constructive failure to exercise jurisdiction if the judgment revealed "a basic misunderstanding of the case brought by an applicant, [so that] the resulting flaw is so serious as to undermine the lawfulness of the decision in question in a fundamental way", citing State Super SAS Trustee Corporation v Cornes [2013] NSWCA 257 at [10]-[12].
2. It also submitted that a judge's reasons are not required to mention every fact or argument relied upon by the losing party or to decide every matter which is raised in argument, citing Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598 at [62]-[63] and Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 at 385-6.
3. RMS contended that the question to be addressed by this Court was: "do the reasons reach a minimum acceptable level to constitute a proper exercise of judicial power?". It referred in this regard to Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] and NSW Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231at [66].
4. RMS continued: "a) economical expression of conclusions, particularly in the context of a factually complicated case, is a virtue and not a vice; b) when assessing reasons for decisions, it is necessary to 'distinguish between the essentials and the peripherals': Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 271-272; c) the absence of express reasoning on a point may be of no moment, if it is evident how and why the relevant conclusion is reached, that is if the reasons for decision on that point are implicit or may readily be inferred; d) 'it will ordinarily be sufficient if … the judge apprises the parties of the broad outline and constituent facts of the reasoning' on which the decision was made: Soulemezis at 273; e) it is necessary to distinguish between an appellant's disappointment with the findings and the absence of any indication of the grounds for those findings: Soulemezis at 280-282; f) 'generally, the concept of 'reasons' requires an explanation connecting any findings of fact with the ultimate decision. Where the legal test to be applied involves an evaluative judgment, it may well not be practicable to provide a detailed articulation as to how specified (and conflicting) factors have been weighed in the balance; the scope of the obligation must recognise that constraint': Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWCA 112, (2014) 242 IR 318 at [46], approved in Orr at [75]; and g) 'the administration of justice requires a pragmatic and functional approach to the obligations imposed on trial judges': Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [46], and see also at [57] and [81]-[82]."
5. RMS submitted, as a general proposition, that the primary judge's judgment disclosed sufficient reasons to "constitute, and demonstrate, a lawful exercise of jurisdiction". Over the following 30 pages of its written submissions, it then provided a detailed response to ALF's criticisms of the judgment relating to Grounds 1 and 2.

Relevant legal principles

1. Whilst it cannot be doubted that, in general, courts have an obligation to give reasons for their conclusions, the extent of the obligation in a particular case is very much dependent on the context in which the question arises for consideration (Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 at 442; Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 386).
2. As to the statutory context relevant to the present case, the following should be noted. The LEC's function was to hear and dispose of the claim for compensation and to do so "completely and finally" (ss 22 and 24 of the LEC Act). It was to do this in accordance with s 38 of the LEC Act which is relevantly in the following terms: Procedure (1) Proceedings in Class 1, 2 or 3 of the Court's jurisdiction shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and as the proper consideration of the matters before the Court permit. [Emphasis added]. (2) In proceedings in Class 1, 2 or 3 of the Court's jurisdiction, the Court is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate and as the proper consideration of the matters before the Court permits. (3) Subject to the rules, and without limiting the generality of subsection (2), the Court may, in relation to proceedings in Class 1, 2 or 3 of the Court's jurisdiction, obtain the assistance of any person having professional or other qualifications relevant to any issue arising for determination in the proceedings and may receive in evidence the certificate of any such person. …
3. By s 57(1) of the Act, parties have a right to appeal to the Supreme Court but only on questions of law.
4. Case authorities of relevance to the nature and extent of the LEC's obligation to give reasons in the present case and otherwise relevant to Grounds 1 and 2 are as follows.
5. The generally subjective nature of valuation issues was emphasised by Isaacs J in Spencer v The Commonwealth (1907) 5 CLR 418; [1907] HCA 82 at 442 by his citing with approval the following observations of the Privy Council in Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373 at 391: "It is quite true that in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which, being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has had his own set of conjectures, of more or less weight according to his experience and personal sagacity. In such an inquiry as the present, relating to subjects abounding with uncertainties and on which there is little experience, there is more than ordinary room for such guesswork; and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at."
6. In the same vein, the use of precise mathematical calculations to resolve valuation issues was discouraged in Moreton Club v Commonwealth (1948) 77 CLR 253 at 259; [1948] HCA 21 and The Commonwealth v Milledge (1953) 90 CLR 157 at 162; [1953] HCA 6.
7. Housing Commission of New South Wales v Tatmar Pastoral Co Ltd (1983) 3 NSWLR 378 concerned an appeal from the LEC alleging errors of law in a judgment quantifying compensation payable on the resumption of land. Hutley JA (with whom Samuels JA agreed) stated that "[t]he extent to which a court must go in giving reasons is incapable of precise definition" (at 381F), whilst Mahoney JA observed: "… [in general] the basis of the decision of a trial judge or of an intermediate court of appeal should be made apparent. This does not mean that the reasons given need be elaborate: an elaborate argument may not require an elaborate answer. Reasons need be given only so far as is necessary to indicate to the parties why the decision was made and to allow them to exercise such rights as may be available to them in respect of it" (at 386F).
8. This decision was affirmed by the Privy Council on appeal ((1984) 58 ALJR 553).
9. In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 there was an appeal from the Workers' Compensation Court of New South Wales limited to errors "in point of law or in relation to the admission or rejection of any evidence". Mahoney JA (who together with McHugh JA formed the majority) stated that: "In my opinion, the law does not require that a judge make an express finding in respect of every fact leading to, or relevant to, his final conclusion of fact; nor is it necessary that he reason, and be seen to reason, from one fact to the next along the chain of reasoning to that conclusion" (at 271C-D).
10. His Honour also stated that "it will ordinarily be sufficient if … by his reasons the judge apprises the parties of the broad outline and constituent facts of the reasoning on which he has acted" (at 273E).
11. McHugh JA observed: "In a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is in no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of law or mixed fact and law. If no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. If, for example, the only issue before a court is whether the plaintiff sustained injury by falling over, a simple finding that he fell or sustained injury would be enough, if the decision turned simply on the plaintiff's credibility. But, if in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff's case, such a simple finding would not be enough" (at 281A-C).
12. Whilst the primary judge in that case did not expressly state reasons for his conclusion, McHugh JA found that it was sufficient that those reasons could be inferred, stating that "[w]hat is decisive is that his Honour's judgment reveals the ground for, although not the detailed reasoning in support of, his finding of fact" (at 282C-D).
13. Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156 was concerned, as is the present case, with an appeal on questions of law against the assessment of compensation for the resumption of land. As here, the proceedings at first instance were protracted. In connection with an issue raised as to the sufficiency of the primary judge's reasons, Mahoney JA stated the following at 171-2: "Nor do I think it is necessary for a judge to attempt, by detailed arithmetic, to indicate how he has reached his per square metre estimate of the value of land. There had been placed before the judge the detailed calculations of a number of witnesses and it was clear that his Honour proceeded from what they had done to his conclusion. He did not adopt but used, in the manner common in valuation law, the estimates which they as experts had given. There could be, or at least need be, no more compelling reason for arriving at a particular sum than that, taking into account all of the evidence, the judge was 'doing the best I can' (at 214). And it is proper to record that, early in his judgment, the learned judge said (at 192): 'The proceedings lasted eight weeks. There are more than 2,000 pages of transcript and more than 300 exhibits, many of which exceed 100 pages. Forty-one witnesses were called, more than twenty of whom were experts dealing with such matters as town planning, financial feasibility and valuation. To summarise all the evidence, written and oral, and to set out in full all the submissions (which extended over five days) would result in a judgment hundreds of pages long. In giving my reasons for judgment I have regard to the circumstance that the parties are fully cognizant of the evidence and, of course, are aware of the submissions made. It would be self-evidently undesirable for me to refer in detail to all the evidence that has been given in the proceedings. It is my intention to make as clear as I can to the parties why I have reached my conclusions and how it is that I have fixed the compensation.' I do not think that, in this case, the learned judge was required to do more than he did" (at 171G-172C).
14. Handley JA (with whom Kirby P concurred) likewise found the primary judge's reasons to be sufficient, with one limited qualification.
15. In Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598 this Court had ordered the new trial of a personal injury damages claim, finding that the primary judge had in effect overlooked relevant parts of the evidence. By a majority in the High Court, this Court's decision was reversed. In the course of its judgment, the majority said: "[62] … it should not be accepted that [the primary judge] failed, at least in a general way, to consider the matters to which the Court of Appeal referred. The fact that his Honour did not refer to these matters in his judgment is not decisive. A judge's reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge's failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party's case. [63] … To suggest that a trial judge has not properly considered a party's case is a serious charge. Such a suggestion should be accepted only when the record of the trial or other evidence persuasively suggests that the judge failed to discharge that paramount judicial duty. …"
16. In Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 an appeal on questions of law only was brought to this Court from a District Court decision in relation to a workplace injury. The appellant contended that the primary judge failed to make findings as to critical facts and, to the extent that she did make them, failed to give adequate reasons for her conclusions. It argued that in these circumstances her Honour had constructively failed to exercise her jurisdiction.
17. Basten JA (with whom Beazley JA agreed) accepted that such a failure may occur where a court has purported to resolve a parties' dispute but has not in fact done, has not addressed material issues or has overlooked material evidence (at [9]). His Honour referred to the difficulty of defining the critical issues in a case when considering whether a primary judge has failed to determine an issue which is said to be critical to the outcome. As his Honour indicated, issues in a case may be capable of being stated at a high level of generality or broken down into sub-issues, or even sub-sub-issues. His Honour added that "[c]ommonsense says that at some point the exercise of division must cease … because the administration of justice requires a pragmatic and functional approach to the obligations imposed on trial judges" (at [46]). His Honour then emphasised that: "[48] … Not only is the obligation [to give reasons] not universal in nature, but it is variable in its content. When an appellate court is invited to find that a trial judge provided inadequate reasons, it is important to understand the nature of the function being invoked. It is not the function of an appellate court to set standards as to the optimal, or even desirable, level of detail required to be revealed in reasons for judgment. Rather it is to determine whether the reasons provided have reached a minimum acceptable level to constitute a proper exercise of judicial power. Transparency in decision-making is an important value, but it is not cost free, and may involve separate parameters of quantity and quality."
18. Basten JA accepted the continuing authority of Soulemezis, at least in the context of an appeal limited to questions of law, and concluded that "[r]eading the judgment as a whole (which is the correct approach) the inescapable inference is that the trial judge accepted the plaintiff's evidence, at least to the extent to which she set it out in her reasons" (at [59]). His Honour further said that the fact that the primary judge noted the challenges made to the plaintiff's evidence in cross-examination and then proceeded to accept the plaintiff's evidence "did not call for further explanation or reasoning, at least in a jurisdiction where appeals are limited to points of law" (at [60]). His Honour later noted that "the minimum acceptable standard for disclosure of reasoning in respect of findings of credibility is undemanding and there can be no doubt that the reasons satisfied the standard articulated in Soulemezis" (at [71]).
19. In Apokis v Transport for NSW [2020] NSWCA 39 at [36] Basten JA expressed reservations about the use of the term "judicial valuer" to describe a judge of the LEC when assessing compensation (see its use for example in Roads and Traffic Authority of NSW v Blacktown City Council [2007] NSWCA 20 at [6], [39], [47] and [48] per Spigelman CJ) and added the following on that topic later in his judgment: "[44] … the label 'judicial valuer' has both positive and negative attributes. Its positive attribute is that it draws attention to the fact that the judge will not be bound by the evidence of the experts. That may always be so, but in this context it arises from the fact that the judge is required to consider the effect of a range of considerations on the hypothetical purchaser and vendor. The negative attribute arises from the need to determine the hypothetical point of agreement, which must occur as at the date of acquisition, and not an objective assessment of market value as at the date of acquisition."
20. In New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231 an appeal was brought from a decision of the Appeal Panel of the New South Wales Civil and Administrative Tribunal in relation to a social housing tenancy. The relevant statute confined the appeal to questions of law unless the court granted leave to extend the appeal more broadly. The appellant contended that the Tribunal's reasons for decision were inadequate.
21. In response, Bell P (with whom Ward JA agreed) emphasised at [66] that the function of an appellate court in reviewing the adequacy of reasons given by a primary court "is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard, referring to Resource Pacific at [48], and "[t]he standard is not one of perfection", referring to Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255.

Consideration of Grounds 1 and 2

1. Ground 1, which senior counsel for ALF described as being, with Ground 2, the heart of ALF's appeal to this Court, asserted that the LEC "constructively failed to exercise jurisdiction in that it failed to treat with the disputed evidence and competing submissions in a way that produced a rational and reasoned conclusion as to the assessment of compensation" (emphasis added). Senior counsel was asked in oral argument whether he in fact contended that the decision was irrational. He replied that he only did so to the extent that he would subsequently expressly indicate that that was the position (Tpt p 25). His subsequent references to materiality were limited and largely focussed upon the absence of reasoned conclusions on various topics. Ground 1 therefore substantially overlaps with Ground 2 which concerns the adequacy of the reasons that his Honour gave. On appeal RMS did not suggest that the complaints stated in Grounds 1 and 2 did not raise questions of law, and therefore did not argue that ALF was entitled not to put those questions before this Court for its determination.
2. As ALF submitted, in a case such as the present the LEC has "the duty to provide an independent and impartial forum for the hearing of the claim, the duty to act judicially with detachment and fairness as well as to provide sufficient reasons; and the need to assess and determine facts based upon evidence produced within an adversarial process" (see [278] above). The adequacy of a primary judge's reasons for a decision are not however to be judged against a standard of perfection. The question to be addressed is whether they attained the minimum acceptable standard (Resource Pacific; Orr - see [310] and [314] above). The following considerations indicate that in the present context the minimum standard is not a high one and is relevantly undemanding.
3. First, the LEC acted as, in effect, a "judicial valuer" (see Apokis v Transport for NSW at [312] above). In fulfilling that role, courts are often required, as occurred in the present case, to consider multiple issues requiring the application of expertise of a highly sophisticated and technical nature to resolve. In such circumstances, adoption by the judge of the detailed calculations of expert witnesses, without the judge making his or her own calculations, does not of itself in my view indicate error.
4. Secondly, the issues raised in a valuation case will often involve, as they did in the present case, substantial subjective elements (see Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co referred to above at [298], which was concerned with a more traditional valuation exercise than the DCF analysis involved in the present case but which is nevertheless applicable to many aspects of the DCF inputs which arose for consideration). Many valuation issues are thus not able to be, and should not be attempted to be, dealt with with mathematical precision (see Moreton Club v Commonwealth and The Commonwealth v Milledge referred to in [299] above).
5. Thirdly, s 38(3) of the LEC Act permits the Court to obtain the assistance of any person "having professional or other qualifications" in discharging its functions and s 37(2) of the LEC Act permits the Court to be assisted by a Commissioner. As the judge recorded in his judgment at paragraph [11] he received such assistance in the present case from an Acting Commissioner of the Court (Judgment [11]). The fact of that assistance increases the reluctance that an appellate court would in any event normally have to conclude that a serious charge that a trial judge had not properly considered a party's case, such as was effectively made in the present case, was substantiated (see Whisprun above at [308]).
6. Fourthly, s 38(1) of the LEC Act directs that proceedings such as the present are to be determined with as little "formality and technicality" as possible (see [295] above). This provision gives added reason to apply in the present context judicial statements indicating that, at least where appeals are available only on questions of law, a statement of the "broad outline and constituent facts of the reasoning" suffices (Soulemezis at [303] above) and that "a failure to state the basis of even a crucial finding of fact, if it involves no legal standard" will not ordinarily vitiate the judgment (Soulemezis at [304] above). As McHugh JA said in Soulemezis, it is sufficient if the judgment "reveals the ground for, although not the detailed reasoning" supporting findings of fact (see [305] above).
7. Fifthly, case authorities confirm that "a pragmatic and functional approach" is to be taken in considering whether the duty of a primary judge to give reasons has been discharged (see Resource Pacific at [310] above). As RMS submitted, economy of expression is a virtue and not a vice (see [292] above).
8. Sixthly, as Basten JA envisioned in Resource Pacific, questions may arise, as they do in the present case, as to the level of generality at which issues need to be addressed (see [310] above). Here, the ultimate DCF inputs were expressed at a high level of generality but below them rested issues and sub-issues and even sub-sub-issues, not all of which the LEC could reasonably be expected to address expressly.
9. Seventhly, it is sufficient in many cases, depending on the issues involved, for the primary judge's reasons to be implicit in his or her judgment rather than explicit (see Soulemezis and Resource Pacific at [302]-[305] and [311] above).
10. Eighthly, the length and complexity of the proceedings is relevant to the extent of the judicial obligation to give reasons, as demonstrated by Yates (see [306] above). As in Yates, the hearing of the present proceedings before the LEC was protracted. The parties' closing written submissions alone totalled over 1000 pages and their closing oral submissions occupied some 500 pages of transcript (see [190] above). Achievement of the expedition mandated by s 38(1) of the LEC Act (as to which see [295] above) inevitably meant that, in the judgment, a broad rather than a detailed approach was permissible in respect of many of the issues, sub-issues and sub-sub-issues raised by the parties. As it is, the judgment below extended to some 270 pages in length without including any material that I would regard as surplusage. To attain the standard for judicial reasons for which ALF contends, the judgment would have had to be very considerably longer and would no doubt have taken the primary judge much longer to prepare than the approximate 15 months after the conclusion of the oral hearing which he in fact took.
11. Judged by these standards, the primary judgment in my view reached the minimum standard required in the present context. It gave the essential reasons for his Honour's views, in particular as to the DCF inputs that needed to be determined. It therefore made plain in a step by step fashion what the basis of his Honour's compensation assessment was, this being the essential purpose of his Honour's reasons for judgment. In many instances his views were stated by way of adoption of RMS's submissions or were otherwise implicit, rather than express. That was in my view however permissible in the present context. This is not a case where the judge simply expressed preference for one witness over another (compare Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 at [28]). Instead, the primary judge identified the extensive reasoning given by the expert witnesses to support their views and in many instances adopted that of one or the other without any, or any significant, independent reasoning. By doing this, his Honour sufficiently discharged his duty to state his reasons for his decision, at least in a case such as the present (see Tolson v Roads and Maritime Services [2014] NSWCA 161; (2014) 201 LGERA 367 at [66]).
12. Moreover, the judgment does not reveal a wholesale, or indeed any, lack of understanding by the primary judge of the expert evidence or ALF's case. On the contrary, the primary judge's lengthy summaries of the parties' submissions appear to indicate the contrary. This was not a case where the judge appears to have "cut and paste" one party's submissions such that an inference of a lack of understanding of them arises (compare for example DZH16 v Minister for Immigration [2020] FCCA 1041, where in reviewing the decision of a Ministerial delegate not to grant a visa the Tribunal "cut and paste" sections of the delegate's decision). ALF did not suggest that any such cutting and pasting occurred and thus did not ask this Court to compare parts of the judgment to parts of the submissions with a view to the Court concluding that that had occurred. Nor did ALF suggest that the primary judge had engaged in unattributed copying of RMS's submissions (compare LVR (WA) Pty Ltd v Administrative Appeals Tribunal (2012) 203 FCR 166; [2012] FCAFC 90).
13. To respond specifically to ALF's submissions described at [279]-[281] above, I indicate that in my view the judgment does not reveal that his Honour did not "properly use expert evidence in making his decision" or failed "to understand the purpose of the DCF model … so that the purported resolution of the issue of the highest and best use of Lot 2 was no sensible resolution of the issue at all" (see [279] above). Nor, again contrary to those submissions, were there "multiple failures to determine compensation by reference to substantive aspects of ALF's case", the issues concerning Stockpile 21 and the claim under s 59(c) being instanced by ALF. Once again contrary to ALF's submissions, the judgment does not "show a basic misunderstanding of the issues put before the LEC" ([279] above). Finally, his Honour's "repeated adoption" of RMS's submissions and RMS's expert witnesses did not, contrary to ALF's submissions, indicate any failure of the primary judge to critically analyse that evidence. ALF's expert evidence was at all stages critically analysed by RMS's experts and submissions. It was permissible for the judge to adopt their analyses in the instances when he did so.
14. ALF also complained that there were issues identified by his Honour to which he did not return to resolve. It was not however incumbent on his Honour to determine every issue raised by the parties in the proceedings irrespective of their criticality to what his Honour considered to be the proper method of determining the compensation to which ALF was entitled (Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 at 385E-F). ALF's lack of success on the major elements of its claim was evident without the need to determine these additional issues to which ALF referred on appeal. I add that the force of these considerations is not diminished by the general desirability of first instance judges making contingent findings concerning non-dispositive issues in order to avoid the need for remission in the event of a successful appeal: see for example Chief Commissioner of State Revenue v Adams Bidco Pty Ltd [2019] NSWCA 34 at [3].
15. I turn then to the particular high level issues that were tendered to his Honour for determination.

Discount rate

1. The primary judge's reasons in respect of this topic, which I have summarised at [195]-[204] above, were in my view adequate. They reveal an understanding by his Honour of the competing evidence and submissions relevant to the discount rate issues. His summary of the evidence and issues was not a mechanical recitation of what had been led and put before him. The reasons given by Dr Ferrier, and adopted by his Honour, for preferring his methodology to Mr Samuel's, including his reliance on locally derived data, were by no means irrational. Having summarised the parties' submissions in a manner that indicated his understanding of them, it was a sufficient discharge of his Honour's duty in relation to this issue to give the reasons that I have described, albeit that in large measure they constituted an adoption of Dr Ferrier's views.
2. Having chosen Dr Ferrier's methodology over that of Mr Samuel's, many of the particular points raised by ALF concerning Mr Samuel's methodology became unnecessary for his Honour to determine.

Waste operations - Years 1 to 8

1. As indicated in [205]-[221] above, his Honour gave implicit reasons for adopting RMS's position on the receivable tonnage and the recovery rates for plastics and timber issues. As also indicated, his Honour gave reasons, which I regard as adequate in the context of these proceedings, in relation to the topics of gate fees and the period of deferral of recycling operations, and for his conclusion as to the lack of viability of recycling operations in Years 1 to 8.

Subdivision and sale of surplus land

1. I consider that the reasons given by the primary judge on this topic (referred to at [222]-[224] above) were sufficient.

Waste operations - Years 9 to 29

1. I consider that the reasons for judgment in respect of the various aspects of this topic (see [225]-[234] above) also reached the minimum standard required. For reasons given above (at [325]) the fact that the reasoning was largely expressed by way of the adoption of particular expert evidence or submissions does not contradict that conclusion.
2. Similar observations are applicable to the way in which his Honour addressed geotechnical considerations and the other expert evidence relevant to these waste operations (see [230]-[234] above).

Highest and best use

1. As earlier indicated (see [241] above), his Honour found that "at the end of the 8 years, the highest and best use of the land would be to liquidate it by sale of the unsubdivided areas post closure of the landfill, and to provide for long term leachate and land fill gas infrastructure and maintenance".
2. His Honour's reasons in respect of the various aspects of this topic (see [235]-[247] above) were again adequate despite his Honour in many respects expressing them by way of adoption of RMS's submissions.

The market value of Lot 2

1. The primary judge gave adequate reasons for rejecting ALF's attack on Mr Clay's credibility in relation to his evidence concerning Stockpile 21. His Honour acknowledged the existence of the substantial attack that ALF made and referred to some important features of it. It was unnecessary for his Honour to recount every aspect of that attack or to deal with every such aspect in the course of rejecting it (see [311] above referring to Resource Pacific at [60] and [71]). Although the reasoning was to a significant extent by way of adoption of RMS's submissions, the reasoning in respect of Stockpile 21 and the other issues under this heading met the minimum standard required.

ALF's disturbance claim

1. The primary judge's reasons for rejecting this claim were adequate in the circumstances. His Honour made plain his view, which was determinative of this claim, that ALF did not establish that DADI conducted the waste operations business on Lot 2 as its agent such that ALF became entitled to the revenue and bore the responsibility for the expenses of the business (see [267] and [271] above). As I have indicated when addressing Grounds 5, 6 and 7 below, ALF did not establish any error in that conclusion.
2. The remaining complaint in respect of the disturbance claim was that his Honour did not deal with ALF's claim under s 59(c) of the JTC Act. As I have indicated at [276], his Honour's conclusion (which has not been shown to be erroneous) on the agency issue was determinative not only of ALF's disturbance claim but also of its special value claim. It was an obvious consequence of this conclusion that the claim based on s 59(c) failed and it was unnecessary for his Honour to state that.
3. For these reasons, Grounds 1 and 2 should be rejected.

GROUND 3: PROCEDURAL FAIRNESS

1. By this Ground ALF contends that it was denied procedural fairness as a result of the primary judge "expressing a preference for a critical witness, Dr Ferrier, based on [his] perceived experience in the Court's compensation jurisdiction without providing an opportunity to the Appellant to comment upon or provide [a] critique of that potential finding".
2. The passage of the judgment to which exception is taken is the following, which appears first after his Honour's statement that he had "several reasons" for rejecting Mr Samuel's DCF discount rate and accepting that of Dr Ferrier's: "Dr Ferrier's superior qualifications and experience in the assessment of compensation under the JTC Act, in cases involving extinguishment of a business, and his clear understanding and articulation of relevant provisions of the Act, DCF, and related methodology."
3. In its written submissions on appeal, ALF stated that "[i]t is a denial of procedural fairness for a judge to express a preference for expert evidence on the basis of the familiarity of that expert to the Court". ALF referred to CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458 at [106]-[109], [144]-[147] and [161]-[164], which supports that proposition. The primary judge in the present case did not however express a preference on that basis.
4. The passage in his Honour's judgment does not profess to be based upon any information or knowledge not derived from the evidence, nor can any inference be drawn that it was. What his Honour said was open to him to say on the basis of the evidence before him concerning the respective qualifications and experience of Dr Ferrier and Mr Samuel.
5. In his Curriculum Vitae, which was in evidence, Dr Ferrier described his qualifications, including a Master's degree from Sydney University and a Doctorate of Philosophy in Accounting from the University of Edinburgh. He said that his accounting career had begun in 1969 when he was employed to undertake accounting activities at a firm of public accountants and auditors. He listed a number of areas in which he had provided professional accounting services including "assessment of compensation in compulsory acquisition matters". In his list of completed assignments were valuations "of shares, options, business entities and other assets", including of "Waste processing and recycling facilities". Also amongst the areas in which he said that he had completed assignments was the "assessment of disturbance costs (including loss of profits, relocation costs and extinguishment value) arising from compulsory acquisition of land". This evidence provided a proper basis for the primary judge's impugned statement concerning Dr Ferrier's qualifications and experience.
6. Mr Samuel's Curriculum Vitae stated that he obtained a Bachelor of Commerce degree in 1983 and qualified as an Australian chartered accountant in February 1987. It referred to his experience in relation to many types of valuation but, unlike Dr Ferrier's Curriculum Vitae, it did not suggest that he had had experience in the assessment of compensation in compulsory acquisition matters (with the exception of one listed example), the completion of assignments in the area of waste processing and recycling facilities, or the assessment of disturbance costs (including loss of profits, relocation costs and extinguishment value) arising from the compulsory acquisition of land.
7. In these circumstances, his Honour's observations as to these experts' relative qualifications and experience were open to be made. As the observations drew in a straightforward fashion on uncontentious evidence, there was no need for his Honour to draw his intent to make them to the parties' attention. His Honour was not confined to relying on only the parts of the evidence that were specifically mentioned in the addresses the parties made to him. The Curricula Vitae were tendered to enable his Honour to form views about the relative qualifications and experience of the experts. That is what he did.
8. Further, the last portion of the impugned passage in the judgment simply contained a comment, which his Honour was entitled to make, about the clarity and articulation of Dr Ferrier's evidence.

GROUND 4: APPREHENDED BIAS

1. In support of this ground, ALF submitted that, in the whole of his lengthy judgment, the primary judge did not find any point in favour of ALF, whether related to inputs to the DCF model, to matters of evidence or in contest in the submissions generally. It submitted that this gave rise to "an apprehension that the outcome was one-sided: the chosen method was to pick a winner, and on each occasion the winner picked was the expert witness called by RMS". ALF contended that this apprehension was heightened by the primary judge's "overwhelming" number of references to RMS's submissions as compared to those of ALF and by his frequent quotation of the cross-examination of ALF witnesses "with almost no similar extracts of cross examination of RMS witnesses by ALF counsel".
2. In its written submissions RMS did not seek to contradict this description by ALF of the judgment but did reject the proposition that a reasonable person might apprehend bias on the part of the judge. RMS submitted that "[w]ithout more (as in this case), a reasonable person would attribute a loss on all issues to the nature of the applicant's claim, not the bias of the judge". In reply, ALF emphasised that it was "not only the extremity of [the] outcome, but also the way in which it was reached - especially the lack of reasoning showing engagement with the substance of the expert evidence" that gave rise to the relevant apprehension.
3. There is no doubt as to the appropriate principle to be applied. It is that stated as follows in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63 at [6]: "Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, subject to qualifications relating to waiver (which is not presently relevant) or necessity (which may be relevant to the second appeal), a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle." (citations omitted) This statement of the principle has been frequently applied including in Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [31].
4. As ALF's complaint is expressly limited to one of apparent as distinct from actual bias, it confronts a threshold difficulty that it is solely founded on an appearance of bias said to have been given by the contents of the primary judge's final judgment. The decision in Michael Wilson v Nicholls at [67]-[73] indicates that such an approach is impermissible. The possibility that a "composite approach", involving examination of pre-judgment circumstances in conjunction with the terms of the judgment (see Studholme v Rawson [2020] NSWCA 76 at [52]-[56]), is permissible does not arise for consideration here as ALF relied solely upon the judgment. Moreover, as I now indicate, ALF's reasonable apprehension of bias contention is not in any event supported by the terms of the primary judgment.
5. Contrary to ALF's submissions, I do not consider that a fair-minded lay observer might reasonably apprehend that the primary judge might not have brought an impartial mind to the resolution of the questions his Honour was required to decide. The fair-minded observer would of course see that ALF suffered a comprehensive loss on all grounds but I do not consider that the fair-minded observer would or might reasonably attribute that loss to bias on the part of the judge, rather than weakness of the case ALF presented. Some observers might well disagree with the outcome of the case but I do not think that they would, or might, without more, reasonably attribute the outcome to a lack of judicial integrity. It can be assumed in my view that a fair-minded observer would consider the judgment as a whole and conclude that it appeared to be based on extensive expert evidence. Like an allegation of a failure properly to consider a party's case, a contention that a judge has produced a judgment that might reasonably give rise to a view that he or she was biased is a serious charge which should only be accepted where the judgment "persuasively suggests that the judge failed to discharge [his or her] judicial duty" of deciding the case in a fashion that was not only even-handed but also appears to have been even-handed (see Whisprun at [308] above).
6. I would accordingly reject this ground of appeal.

Ground 5: Use of Lot 2

1. In its written submissions ALF addressed Grounds 5, 6, 7 and 9 together without clearly identifying the submissions applicable to each ground. It appears however that the points it makes which are referable to Ground 5 are as follows.
2. ALF first submitted that at paragraph [819] of his judgment the primary judge held that s 59(f) "could not apply unless there was an active use of Lot 2 by ALF at the Acquisition Date" and that "[t]he LEC's incorrect requirement for an actual use meant (1) that it must be a physical or active use; and (2) that it must be that use made by the claimant for compensation".
3. The first limb of that submission, referring to "active use", should be rejected because his Honour did not in the paragraph referred to, or elsewhere, conclude that there needed to have been an "active use". Instead, his Honour, appropriately, used the same language as used in s 59(f), namely, "actual use".
4. As to the other limb, in concluding that use had to be made by the claimant for compensation his Honour referred inter alia to a number of cases in which passive owners had been denied compensation for disturbance because any use of the land was not by them but by their lessees. Subsequent to his Honour's judgment, this Court delivered its decision in G Capital Corporation Pty Ltd v Roads and Maritime Services [2019] NSWCA 234 which confirmed the correctness of his Honour's approach. In that case, Meagher JA (with whom Gleeson and McCallum JJA agreed) held that the "actual use" of land to which s 59(f) refers "is the use by the dispossessed owner at the time of the compulsory acquisition" and that "the use must exist in fact at the time of acquisition, rather than be a proposed future or potential use" (at [19]). The Court concluded that the land there in question was not used by its owners in circumstances where it was leased to tenants on terms that the tenants had exclusive rights of occupation and no area of the land was exempted from the tenancies for use by the owners (at [26]).
5. ALF submitted that G Capital Corporation was distinguishable because the owners and tenants in that case were unrelated commercial parties whereas in the present case the use of the land was undertaken by a wholly owned subsidiary of ALF, namely DADI. ALF submitted that these circumstances required "a factual inquiry into the nature of the use by the subsidiary and holding company".
6. The mere fact that land is used by a subsidiary of a holding company which is the owner of the land in question does not however establish actual use of the land by the holding company. Further circumstances, such as that the subsidiary carried on business as agent of the holding company, would be necessary to achieve that. The question of agency arises separately in relation to Ground 6 (as to which see [364]-[373] below). In the absence of any finding of agency, the primary judge was clearly correct to conclude that DADI's use of Lot 2 was not ALF's use of it. To hold otherwise would be to disregard the fundamental tenet of company law that companies are distinct legal entities (see Salomon v Salomon & Co Ltd [1897] AC 22).
7. Another contention of ALF was that the primary judge erred in stating "that the C of A has recently tightened its interpretation and appreciation of s 59(1)". His Honour was referring to the decisions of this Court in Melino v Roads and Maritime Services (NSW) (2018) 98 NSWLR 625; [2018] NSWCA 251, Moloney v Roads and Maritime Services (NSW) (2018) 98 NSWLR 651; [2018] NSWCA 252 and Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41. Whether or not that comment is an accurate summation of the effect of those cases is however of no consequence as his Honour's judgment is to be assessed on the basis of the manner in which he addressed particular issues that were presented for his determination. It is not apparent that his Honour's view about the general effect of this Court's recent decisions affected his decision on any of those particular issues.
8. For these reasons, Ground 5 should be rejected.

Ground 6: Issue estoppel and abuse of process in relation to agency

1. As noted earlier, one way in which ALF sought to avoid the conclusion that it did not use Lot 2 at the relevant time was to assert that DADI carried on business on the Lot as agent for ALF. As an alternative to pointing to the evidence before the primary judge that it contended established the nature of the relationship between ALF and DADI (as to which see [374]-[376] below in relation to Ground 7), ALF argued that the principles of issue estoppel and abuse of process precluded RMS denying that DADI conducted the business as agent for ALF because to do so would involve it in a direct contradiction of the finding of Beazley P (with whom McColl and Leeming JJA concurred) in Dial A Dump Industries Pty Ltd v Roads and Maritime Services (2017) 94 NSWLR 554; [2017] NSWCA 73 at [53] (the "DADI CA Decision"). ALF contended that RMS "sought to relitigate [the] exact issue" determined by her Honour. This reflected the vital importance of identifying what was in issue and decided in the prior proceedings (see Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34 at [61]-[62]).
2. The passages in Beazley P's judgment particularly relied upon by ALF are as follows: "[57] Accepting, or at least assuming for Dial A Dump's benefit, that his Honour did not make a positive finding of agency, I am nonetheless of the opinion that no other conclusion is tenable on the facts found by his Honour. As GE Dal Pont explains in Law of Agency (3rd ed, 2014, LexisNexis Butterworths) at 6 [1.4], the relationship of agency necessarily involves: '… acting in a representative capacity for the principal, whether for the purpose of creating contractual relations for a principal or to represent the principal in a more restricted ambit.' [Emphasis in original] … [59] The terms of the resolution of 30 June 2008 were that Dial A Dump was 'to act on behalf of ALF and Boiling' in the respects referred to in the document. Dial A Dump had no independent right to carry on the businesses itself. Dial A Dump's letter of 1 August 2008 to customers was only consistent with Dial A Dump carrying on the businesses on behalf of the two companies and was a representation of the capacity in which it was acting."
3. To address this ground, it is necessary to refer to Preston CJ's judgment at first instance in Dial A Dump Industries Pty Ltd v Roads and Maritime Services (2016) 216 LGERA 285; [2016] NSWLEC 39. One of the issues before his Honour was whether DADI was at the DOA carrying on the waste operations business on Lot 2 on its own behalf. If so, its claim that it had an interest in the land and therefore its claim to compensation on resumption of the land had a prospect of success. If it was not carrying on that business on its own behalf, it was not of any particular significance for the purpose of those proceedings to identify the person or persons for whom the business was in fact carried on. It was in this context that Preston CJ referred as follows to the evidence before him concerning the conduct of the business: "[103] I turn to ALF. ALF was the lessor of Lot 2, having granted leases to Boiling commencing, for the first lease, on 1 July 2007 and for the second lease, on 1 January 2014. At its meeting on 30 June 2008, ALF noted that the Dial A Dump Industries Trust would "cease commercial operations of recycling, waste transfer and collections carried on" by the Trust and instead that DADI would "commence commercial operations of landfilling, recycling, waste transfer and collections, which it will carry on under the name of" DADI. ALF noted that DADI would undertake these commercial operations "for and on behalf of the Alexandria Landfill Consolidated tax group" but that DADI would operate the waste facility "on behalf of the Alexandria landfill group". ALF noted that EPL 12594, the environment protection licence held by Boiling authorising certain scheduled activities, "will remain with Boiling as trustee for Dial A Dump Industries Trust and the Trust will hold the licence and the lease of the premises on trust for" DADI. The lease referred to was presumably the lease of Lot 2 that ALF had granted to Boiling commencing 1 July 2007."
4. Later, his Honour said that for ALF to give permission to DADI to "carry on operations on Lot 2 'for and on behalf of the ALF Consolidated tax group' or 'on behalf of the Alexandria landfill group'" (expressions used in the 30 June 2008 minutes referred to in the above quote) would not be to give permission to DADI to carry on the operations on its own behalf but rather to DADI only as agent (at [110]). His Honour thus did not make any clear finding of agency. He contemplated that an agency might have existed but considered that, if it did, that fact would not assist DADI. Further, the agency which his Honour contemplated was one on behalf of the ALF Consolidated tax group, the precise identity of which his Honour held had not been clearly established "but at least it included ALF and DADI as the wholly owned subsidiary of ALF" (ibid).
5. His Honour referred later to the possibility that DADI was carrying on the business on Lot 2 "for and on behalf of ALF and Boiling" (at [117]). He referred to these two companies because they were the holders of relevant environment protection licences relating to Lot 2 but, by reason of his earlier findings, his Honour should not be taken to have identified ALF and Boiling as the only principals. Rather, it is clear from reading his judgment as a whole that he was of the view that if there was an agency, it was on behalf of all the members of the ALF group, whoever they might be.
6. Beazley P's decision on appeal should be understood in a similar fashion. Her Honour referred to the 30 June 2008 minutes and later made the observations quoted above concerning agency. In the course of those observations, her Honour referred to the 30 June 2008 resolution speaking of Dial A Dump being deputed "to act on behalf of ALF and Boiling". The resolution however in fact only referred to DADI acting "for and on behalf of" the ALF group. The distinction was not of consequence to her Honour's reasoning as it was the fact of agency, rather than the identity of the principals, that was important in that case.
7. The following observations may therefore be made about the DADI proceedings: 1. To the extent that there was a finding of agency by Beazley P, the identity of the principals in that agency relationship was not of significance. What was of importance to the issues in the proceedings was whether DADI carried on the Lot 2 waste operations business on its own behalf. 2. To the extent that the principals in the agency relationship were identified in the judgments, they were identified tolerably clearly as the members of the ALF group, which was said to include ALF and Boiling. 3. Even if this Court should be understood as having decided in the DADI proceedings that ALF and Boiling were the only principals, the nature of the relationship between ALF and Boiling and their entitlements inter se to the revenue of the business and their responsibilities for its expenses were not addressed. 4. In any event, even if there was a finding that DADI acted as agent for ALF, there was no finding as to the entitlements to revenue and responsibility for expenses of the business as between ALF and DADI.
8. In these circumstances, it is clear, contrary to ALF's submissions, that the point at issue in the present proceedings was not determined in the DADI litigation. To establish its disturbance and special value claims in the present case, ALF had to demonstrate that it was entitled to the revenue and bore the expenses of DADI's conduct of the waste operations business on Lot 2. It is only if it did this that ALF would have established that it suffered its claimed disturbance loss and expenses, and suffered loss by reason of its loss of the features of the land that were allegedly of special value to it. Establishment of no more than an "agency" relationship would not have established those matters, the concept of agency being intrinsically amorphous. As Gummow J said in Scott v Davis (2000) 204 CLR 333; [2000] HCA 52 at [268], "[t]o use the term "agent" is to begin but not to end the inquiry" about the applicable legal relations (see also Cassegrain v Gerard Cassegrain & Co Pty Ltd (2015) 254 CLR 425; [2015] HCA 2 at [38]).
9. For these reasons, ALF's estoppel contention must fail, even if the difference in the identity of the parties as between the DADI proceedings and the present proceedings is disregarded. Further, in the absence of any inconsistency between RMS's contentions in the present proceedings and findings in the DADI proceedings, ALF failed to establish any abuse of process on the part of RMS (see generally Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [24]-[26]).
10. In light of these conclusions, it is unnecessary to address RMS's alternative argument that, as a matter of principle, an estoppel such as ALF alleged could not circumscribe the LEC's obligation to assess compensation in accordance with the JTC Act. This was not an issue addressed by the primary judge.

Ground 7: Attribution of loss between ALF and DADI

1. Under this ground ALF contends that irrespective of any question of issue estoppel or abuse of process, the primary judge should, on the evidence before him, have found that DADI did in fact conduct the business on Lot 2 as agent for ALF.
2. The primary judge specifically addressed this contention at Judgment [764] (see [271] above). His Honour held that ALF failed to establish that the business income and expenditure was that of ALF's rather than DADI's. This was a finding of fact in relation to which no appeal is available to ALF.
3. In any event, at the hearing of the appeal, senior counsel for ALF was invited to refer this Court to evidence that established the proposition for which ALF contended but he was able to do no more than refer the Court to financial accounts of a group of companies. These did not identify earnings and expenditure of ALF individually. There is therefore no reason to think that the primary judge erred in this (unappealable) finding.
4. This ground of appeal as framed refers not only to s 59(f) but also to s 59(c), which is concerned with the financial costs of relocation. ALF complained on appeal, including through Ground 1 (see [193] above), that the primary judge did not determine ALF's claim under s 59(c). That provision is however concerned with costs reasonably incurred in connection with the relocation of "those persons". The expression "those persons" is a reference back to the persons referred to in s 59(a), namely, "the persons entitled to compensation in connection with the compulsory acquisition of the land". It therefore refers to the incurring of costs by the applicant for compensation, in this case ALF. For the various reasons given above in relation to ALF's disturbance claim, ALF did not establish that it, as distinct from DADI, incurred costs (or derived revenue) in connection with the waste operations business conducted on Lot 2. As that was an obvious answer to ALF's claim based on s 59(c), there was no error in his Honour not stating that that was the case.
5. For these reasons, Ground 7 should be rejected.

Ground 8: Relevance of observations in Bronzel

1. As noted in [273]-[274] above, the primary judge quoted the observations of Wells J in Bronzel but noted that they were made before the legislative definition of special value in s 57 of the JTC Act was enacted.
2. On appeal, ALF submitted that the observations of Wells J are inconsistent with the statutory definition because the former require special value to be "something objectively ascertainable derived from the land or some attribute or property of it" whilst s 57 refers to a financial advantage to the owner which is "incidental to the person's use of the land". The primary judge however made it clear that, to the extent that there was any difference, he was bound to, and would, apply the words of s 57. His Honour did this by prefacing his recitation of ALF's submission to that effect by the words "As the Applicant's submissions say …", indicating his acceptance of the submission (at [828]).
3. ALF also submitted on appeal that the primary judge not only adopted the Bronzel test but also applied it in paragraphs [841] and [846] of his judgment. Judgment paragraph [841] records a submission by RMS, subsequently accepted by his Honour in [846], denying that the matters relied upon by ALF for its special value claim identified "any special feature of the land, or 'something objectively determined from the land or some attribute or property of it'". This submission used substantially the same language as the Bronzel test and his Honour's acceptance of it indicated that he did not see any difference, at least for the purposes of the present case, between it and s 57. His Honour could not however be criticised for taking that approach because this Court did likewise in Roads and Traffic Authority of NSW v Hurstville City Council [2001] NSWCA 11; (2001) 112 LGERA 223 at [46], in assuming the continued relevance of the Bronzel test notwithstanding the enactment of s 57.
4. Even if there were force in ALF's submissions on this Ground, those submissions would not however avail it as its special value claim was bound to fail for the reason stated below in relation to Ground 9.

Ground 9: Use of Lot 2 by ALF

1. As the definition in s 57 of the JTC Act of "special value" requires that any such value be "incidental to the person's use of the land", it was necessary if ALF were to succeed in its special value claim (like its disturbance claim) for it to establish that it, rather than DADI or any other entity, used Lot 2 to conduct the waste operations business. As indicated above, it failed to do this. The consequence is that its special value claim was properly rejected.

Conclusion on special value claim

1. For the reasons set out above, ALF did not establish that the primary judge made any error of law in respect of the special value claim, with the consequence that Grounds 8 and 9 should be rejected.

CONCLUSIONS

1. As each of ALF's grounds of appeal has been rejected, the appeal should be dismissed with costs.
2. LEEMING JA: I have had the advantage of reading the judgments of the other members of the Court. I agree with them that the appeal should be dismissed with costs. Their reasons enable me to be concise, and what follows presupposes familiarity with the background.
3. The primary grounds advanced on appeal were grounds 1 (constructive failure to exercise jurisdiction) and 2 (inadequacy of reasons). Ground 4 (apprehended bias) overlapped with these grounds. Yet all these grounds were in essence directed to the same feature of the judgment at first instance: very lengthy reasons following a very long trial, which were said not sufficiently to attend to resolving the competing evidence and submissions. In part this was said to follow from an alleged absence of dispositive reasoning, as opposed to the lengthy recitation of competing evidence and submissions. In part it was said to follow from the invariable resolution of disputed points in the respondent's favour ("the effect of his Honour's valuation was to accept the respondent's figure in the respondent's column for every single one of the disputed items").
4. I discount the latter point immediately. True it is that there are some keenly contested cases where many points are in issue, and where some are resolved in favour of one side, and others in favour of the other side. But litigation, risky as it is, is quite unlike tossing a coin or betting on black at a casino. Litigators are familiar with cases where one side loses every point in contest. Indeed, a numerous class of civil litigation comprises defendants who deny duty, breach, causation, damages and assert various defences; it could scarcely be suggested that any inference is to be drawn from a plaintiff obtaining a judgment in such a case. It must be borne in mind that most disputes never reach a court, and of those which do, the majority is resolved prior to trial. The self-selecting minority of disputes which go to judgment includes a disproportionate share of unduly uncompromising litigants.
5. Valuation appeals following compulsory acquisitions of land are different from actions for negligence, but once again the phenomenon of one party whose evidence and submissions push the envelope in every respect, while the other propounds reasonable findings, is not unfamiliar. In the present case, the gap between the parties was enormous. The Valuer-General determined the market value of the appellant's land at $56,900,000 while the appellant initially maintained it was in excess of $275,000,000, rising by the time of its Draft Amended Points of Claim to in excess of $343,000,000. On any view, at least one side (and perhaps both) was tens of millions of dollars away from the true value.
6. Not all of the issues presented in the litigation involved binary choices. The appellant's counsel illustrated his point by the choice of discount rate, which (obviously) has an enormous effect on the number generated by a discounted cashflow methodology: "So just taking for example discount rates at line 14 which is recycling and landfill operations post tax nominal, you'll see the applicant contended for 8.7%, the respondent contended for 13.9%. There was a huge amount of expert evidence about that and it would be open to his Honour to come up with any figure at all whether within that range or indeed outside it, but one would expect that it would be somewhere between 8.7 to 13.9."
7. I certainly agree that a dispute between 8.7% and 13.9% on something as fundamental as the discount rate for the valuation of a business is a strikingly large dispute. However, I disagree that one would "expect" that the outcome of the curial process would be somewhere in the range. That submission carries with it the unstated premise that both sides' experts had been unduly ambitious. Contrary to the appellant's submission, if one knew nothing else about the case, one might readily infer that at least one and perhaps both of the valuers was relying on a faulty assumption or a faulty methodology. If indeed both valuers had used unrealistic assumptions or methodologies, then I would agree that one would expect a finding within the range. But it is perfectly possible that only one opinion will be shown to be faulty, and the other will stand up to such challenges as are made of it. In that case there is no reason for rejecting the opinion of the latter.
8. Accordingly, I turn to the appellant's submission that there was insufficient engagement by the primary judge with the substance of the competing evidence and submissions.
9. I reject the attack on the reasons provided for accepting Dr Ferrier's discount rate. To be fair, I did not understand this to be held out as the appellant's best point. Nonetheless, it is the single largest integer in the methodology, and the result is highly sensitive to the rate selected.
10. The primary judge gave some six pages of reasons for preferring Dr Ferrier's rate. The appellant complained that what should have been done was to analyse critically the analysis underlying the selection of 13.9%; rather, the primary judge accepted Dr Ferrier's opinion ("The way in which his Honour reasons is to not accept what Mr Samuel says and then in a sense by default, accept Dr Ferrier for the full 13.9%"). I accept that it would be open to a judicial officer to have resolved this dispute in different ways, including in the way now favoured by the appellant. But I do not accept that there is any error of law in the fact finding process which the primary judge employed to resolve the competing opinions proffered by either side.
11. I do not wish it to be thought that I underestimate the force of the appellant's submissions. I think it may fairly be said that, to use the two examples highlighted in the appellant's submissions in reply, there is scant reasoning to explain why the particular gate fees were ultimately selected and why an up-front cost of some $35 million for remediation was chosen. The reasons are long on recitation of the parties' submissions, but very short on resolving the issues which those submissions gave rise to. It is regrettable that these two items, which also make a large contribution to the discounted cashflow analysis, were not addressed more fully.
12. Nonetheless, there was a determination of those two key inputs. The appellant is dissatisfied that the former is not higher and the latter is not lower. But that is not enough. More is required in order that there not merely be an alleged error of fact which is outside the limited grant of appellate jurisdiction to this Court. This was, I infer, why the appellant contended that the primary judge had not merely erred in fact, but had failed to "grapple" with the submissions.
13. In response to the complaint about failure to grapple, the respondent said that comfort could be drawn from the lengthy recitation of what inevitably was a small minority of the voluminous submissions propounded by both parties (the appeal books contained no fewer than 1101 pages of submissions at first instance, with both sides contributing roughly equal shares). This, so it was said, itself demonstrated that the primary judge had "grappled" with the submissions, insofar as he had exercised judgment in selecting what to include and, more relevantly, the swathes to exclude.
14. Conversely, the appellant submitted that this was doing no more than reproducing the essence of the submissions, and did not disclose the requisite judicial engagement with their resolution. When one reached the sections of the judgment headed "Consideration", the appellant submitted that even then those sections were substantially directed to a recitation of the parties' oral submissions, with no reasoning process evident to understand the preference which was given to the respondent's position, and no suggestion that significant underlying contested issues had been engaged with.
15. I am prepared for present purposes to accept that the task of summarising the parties' submissions is quite distinct from the task of resolving which is to be accepted and which rejected, even though I am inclined to think that such an assumption is unduly favourable to the appellant. That is to say, I doubt that the appellant is correct to discount the large majority of the reasons which merely record evidence and submissions. In most cases, the parties' submissions inform a court's dispositive reasoning. That certainly occurs in cases where the reasons do not give so complete a summary of the evidence and submissions as occurred in this judgment. Not lightly should it be assumed that the process of sifting through the 1101 pages of submissions may not itself reflect an active engagement with the issues, enabling the dispositive paragraphs to be concise. Much may turn on the details. It is one thing to reproduce parties' submissions verbatim, another to record them in indirect speech, and another thing entirely to summarise them in the judge's own words.
16. It is perhaps unfortunate that part of the debate focussed about the meaning of "grappled" in this context. The expression is not uncommonly used in determining appeals from the District Court (such as Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [116]; Chen v State of New South Wales [2014] NSWCA 41 at [87]), or from a Division of the Supreme Court (for example, EPS Constructions Pty Ltd v Mass Holdings Pty Ltd [2015] NSWCA 317 at [90]; Hutchison Construction Services Pty Ltd v Fogg [2016] NSWCA 135 at [58]-[69]). However, as has been explained, including in Bunnings Group Ltd v Borg [2014] NSWCA 240 at [36], Coote v Kelly [2013] NSWCA 357 at [39] and Croucher v Cachia (2016) 95 NSWLR 117; [2016] NSWCA 132 at [124], what is being inferred in such cases is a failure in the process of fact finding. As McColl JA explained in Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [66]: "Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried."
17. That echoed Hayne J's reasoning in Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816 at [130]: "because the primary judge was bound to state the reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Understanding the reasons given at first instance in that way, the error identified in this case is revealed as an error in the process of fact finding. In particular, it is revealed as a failure to examine all of the material relevant to the particular issue."
18. This in turn picks up what was said about findings being made without "a consideration of the real strength of the body of evidence [the losing party] presented": State Rail Authority (NSW) v Earthline Constructions Pty Ltd (In liq) [1999] HCA 3; 73 ALJR 306 at 321 and indeed, more concisely, the obligation upon an appellate court to undertake a "real review" of the evidence: Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 at [25]; Robinson Helicopter Co Inc v McDermott [2016] HCA 22; 90 ALJR 679 at [43].
19. Where an appeal is confined to questions of law, the considerations summarised above - which are directed to the resolution of competing issues of fact - do not directly arise. While I accept that some errors in the fact finding process may amount to errors of law (actual bias is an example), I also think that one cannot safely transplant the principles applicable to an appeal by way of rehearing to appeals confined to questions of law.
20. The content of the obligation to give adequate reasons must in part turn upon the function performed by the tribunal and the nature of any appeal which is created in respect of its decisions. The reasons for judgment of most Judges of Appeal in the majority of judgments are a single sentence expressing agreement with the more detailed reasons of another member of the Court. My reasons for dealing with grounds 3, 8 and 9 in this appeal are a single sentence. Yet I do not consider that by expressing agreement with the reasons of another judge in rejecting those grounds I have failed to give adequate reasons.
21. It is to be borne in mind that the notion of obtaining reasons for factual determinations from courts is a recent development so far as the common law is concerned. Most determinations of fact at common law were made by juries until the middle of the twentieth century. I respectfully agree with Basten JA's observation that there has been a tendency for the intensity of scrutiny of the adequacy of reasons to increase over time: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [55], noting that the change is all the more dramatic when the earlier role of juries is borne in mind. This is significant, because appeals on questions of law emerged no later than the nineteenth century, when most facts were determined by juries, without reasons (as to which see Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378 at [3]).
22. True it is that it has been said, in a passage which has been often applied, that it is not sufficient to set out the conflicting evidence and conclude, without analysis, that the judge prefers one body to another: Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186; [2006] NSWCA 187 at [28]. But that is in the context of an appeal by way of rehearing to this Court from the District Court or a Division of the Supreme Court.
23. On rare occasions, these principles have sought to be invoked in applications for judicial review. One example may be seen in Laing O'Rourke Australia Construction Pty Ltd v H&M Engineering and Construction Pty Ltd [2010] NSWSC 818 at [34]. But it was emphasised that the court's review must not slide into the merits: Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd (2018) 98 NSWLR 712; [2018] NSWCA 276 at [24]-[25]; see also Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164; [2010] HCA 48 at [23]. The same point was made, in the context of an appeal confined to a question of law brought pursuant to s 57 of the Land and Environment Court Act 1979 (NSW), in Hoy v Coffs Harbour City Council [2016] NSWCA 257; 218 LGERA 411 at [18].
24. Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 276 was an appeal following a four day trial before a judge of the Compensation Court. The dispositive reasons were extremely short: "On the evidence I am satisfied she fell and suffered injury at work on 21 December 1982 and that the boss knew she had suffered injury on that date. I am also satisfied that the applicant suffered injury at work in April [1980] when she fell whilst pushing a box. … The applicant had X-rays of her left knee and tibia which were normal. She had an X-ray of the lumbar spine on 29 December 1982 which was normal. A myelogram was performed which revealed no abnormality. A CAT scan report of [17] January 1984, stated: 'No evidence of disc prolapse has been demonstrated, and apophyseal joints are within normal limits. Spinal canal diameters are adequate and there is no evidence of spinal stenosis. Nerve roots show no evidence of compression.' I am satisfied on the evidence that the applicant was totally incapacitated from 21 December 1982 to 17 January 1984 and fit for all work thereafter. I am satisfied that at the date of the CAT scan report the applicant was fit for all work."
25. McHugh JA observed that: "What is decisive is that his Honour's judgment reveals the ground for, although not the detailed reasoning in support of, his finding of fact. But that is enough in a case where no appeal lies against the finding of fact. Accordingly there was no failure to give reasons sufficient to constitute an error of law."
26. Mahoney JA agreed that there was no failure to give reasons. His Honour's reasons contemplated the possibility of an obligation to state reasons which transcended what was required by the establishment of jurisdiction and vindication of a right of appeal (at 273B). But his Honour rejected the need to provide additional details as to the reasoning process - much as the appellant's submissions invited this Court to hold - because of basal aspects of the judicial process. As his Honour put it at 274: "A fact is found in a particular case if the judge is satisfied that it is so. ... [I]t would be to misunderstand the basis of a decision and in particular decisions in matters of assessment, weight and the like, to assume that decisions can always, or perhaps ordinarily, be justified by objective rather than subjective considerations. And, if such be true of the reasoning process, it is, in my opinion, a mistake to conclude that a judge should or can set forth the reasoning process he has followed from one fact to another. It is in my opinion, because of the recognition of factors such as these that the reasons which the law requires a judge to give are not such as have been suggested by the worker in this case."
27. It follows that the appellant's submissions insofar as they complain of failing to engage with the evidence and submissions are outside the scope of an appeal confined to questions of law. In reaching that conclusion, I am conscious that the fact/law distinction is scarcely a crisp one. The High Court's statement in Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 at 394; [1996] HCA 36 that "no satisfactory test of universal application has yet been formulated" is to be understood not merely of the failure hitherto to do so, but as an acknowledgement of the impossibility of the task. Even so, the limitation imposed by s 57 of the Land and Environment Court Act must be given work to do, and I am satisfied that on its proper construction, the complaints advanced by the appellant do not give rise to legal error.
28. Ultimately the appellant's submissions, faced with the task of falling within an appeal limited to questions of law, sought to transmute deficiencies in factual findings into deficiencies in the process of making findings or recording reasons. I am unpersuaded that the appellant can in that fashion make out legal error, as opposed to factual error.
29. Insofar as ground 4 turned upon the reasons for judgment, it cannot amount to a reasonable apprehension of bias; the essence of apprehended (as opposed to actual) bias is prejudgment, and the reasons are consequent upon an actual judgment. Insofar as the appellant sought also to incorporate the idea of the primary judge "not engaging with the substance" of the issues, then that is not an aspect of apprehended bias, but rather is addressed under the rubric of a constructive failure to exercise jurisdiction, or an absence of reasons, under grounds 1 and 2. Subject to the foregoing, I agree with what Basten JA has said concerning grounds 1, 2 and 4.

Disturbance (grounds 5, 6 and 7)

1. The question concerning s 59(f) was whether the "actual use of the land" had to be actual use by the person claiming compensation. As recent judgments of this Court have held, the text and structure of the subsection informs the approach to be taken. First, paragraph (f) is the last of six elements of the definition. Secondly, it commences with the words "any other financial costs", confirming thereby that the list is one comprising various forms of "financial costs" (in argument reference was commonly made to "loss", which is a much broader concept than "financial costs") and further that the financial costs were part of the same genus as those in the previous paragraphs. Thirdly, paragraph (a) refers explicitly to the costs incurred "by the persons entitled to compensation" and each of paragraphs (b), (c), (d) and (e) refers to "those persons", which can only be a reference to the "persons entitled to compensation" referred to in paragraph (a). The principal difficulty faced in this appeal is that if there were costs incurred by Dial A Dump, the only company which was actually using the land, they were, ex hypothesi, not financial costs incurred by the appellant. That might not be so if Dial A Dump were shown to have been the appellant's agent, or if one could in some way go behind the (quite elaborate) corporate structure which had been put in place in respect of the activities being conducted on the land, but that was elsewhere addressed adversely to the appellant, as Basten JA and Macfarlan JA have explained.
2. Paragraph (f) should not be seen as a tail which wags the dog of the balance of the definition of loss attributable to disturbance. The appellant invited an inference to be drawn from the absence of narrowing words to support a construction which would outflank the rather precisely crafted and internally qualified other heads of such loss. That submission should not be accepted.
3. The more recent decisions of this Court on s 59 should be followed, including insofar as they reject the reasoning in El Boustani v Minister administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33; 199 LGERA 198 and Health Administration Corporation v George D Angus Pty Ltd (2014) 88 NSWLR 752; [2014] NSWCA 352. I agree with what Basten JA has said concerning grounds 5, 6 and 7.

Remaining grounds

1. I agree with what Basten JA has said concerning grounds 3 (procedural fairness) and 8 and 9 (special value).

Endnotes

1. Alexandria Landfill Pty Ltd v Roads and Maritime Services; Boiling Pty Limited v Roads and Maritime Services (No 6) [2019] NSWLEC 98 ("LEC Judgment").
2. Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816 at [129]-[130] (Hayne J).
3. (1949) 78 CLR 353 at 360; [1949] HCA 26.
4. (2003) 77 ALJR 1088; [2003] HCA 26.
5. Dranichnokov at [1].
6. R v Toohey; Ex parte Northern Land Council (1981) 151 CLR 170 at 267-268; cf Ex parte Hebburn Ltd; Re Kearsley Shire Council (1947) 47 SR (NSW) 416 at 422
7. Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at 82 [81].
8. (2000) 203 CLR 194; [2000] HCA 47.
9. (2001) 206 CLR 57; [2001] HCA 22.
10. Miah at [80]-[81].
11. See also The King v The War Pensions Entitlement Appeal Tribunal; ex parte Bott (1933) 50 CLR 228 at 242-243 (Rich, Dixon and McTiernan JJ); [1933] HCA 30.
12. (2012) 203 FCR 166; [2012] FCAFC 90 (North, Logan and Robertson JJ).
13. (2003) 133 FCR 209; [2003] FCA 1293.
14. [2013] 2 SCR 357; 2013 SCC 30.
15. (2013) 249 CLR 332; [2013] HCA 18.
16. [1971] 1 NSWLR 376 at 382C-E.
17. [2013] NSWCA 33.
18. (2014) 88 NSWLR 381; [2014] NSWCA 451.
19. [1971] 1 NSWLR 376, 383C.
20. Ibid at 383C.
21. (1987) 10 NSWLR 247.
22. Soulemezis at 249E (Kirby P).
23. Soulemezis at 264G.
24. Soulemezis at 268C.
25. Soulemezis at 273E.
26. Soulemezis at 273F.
27. Soulemezis at 273-274.
28. Soulemezis at 277.
29. Soulemezis at 278-279.
30. The King v Connell; Ex parte The Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430-432 (Latham CJ); [1944] HCA 42, referring to Sharp v Wakefield [1891] AC 173, 179.
31. Avon Downs at 360 (Dixon J).
32. Soulemezis at 281F.
33. Soulemezis at 282C.
34. Soulemezis at 281B.
35. [2019] NSWCA 95.
36. Li at [55]-[67].
37. Apokis v Transport for NSW [2020] NSWCA 39 at [45]; Turner v Minister of Public Instruction (1956) 95 CLR 245 at 267-268 (Dixon CJ); [1956] HCA 7.
38. Comparable sites were relied on to value sales after subdivision: LEC Judgment at [413]ff, [662].
39. Minister for Immigration and Citizenship v SZJSS (2010) 243 CLR 164; [2010] HCA 48 at [26]-[34].
40. LEC Judgment at [128].
41. LEC Judgment at [130].
42. LEC Judgment at [434].
43. LEC Judgment at [446].
44. LEC Judgment at [463]-[465].
45. LEC Judgment at [665].
46. LEC Judgment at [666]-[675].
47. LEC Judgment at [681].
48. LEC Judgment at [213]-[214].
49. LEC Judgment at [224]-[229].
50. Tcpt p 1285(36)-(39).
51. Tcpt p 1286(4)-(10).
52. Tcpt p 1292(44)-(47).
53. LEC Judgment at [231]-[233].
54. Appellant's written submissions, par 68.
55. LEC Judgment at [553].
56. LEC Judgment at [147]ff.
57. LEC Judgment at [161]ff.
58. LEC Judgment at [190]ff.
59. LEC Judgment at [211]ff.
60. LEC Judgment at [280]ff.
61. LEC Judgment at [329]ff.
62. LEC Judgment at [386]ff.
63. LEC Judgment at [397]ff.
64. LEC Judgment at [430]ff.
65. LEC Judgment at [251]-[265].
66. Tcpt p 2636 (1)-(18). (Mr Eastman appeared for the respondent.)
67. Tcpt pp 2638 (29)-2639 (13).
68. Appellant's written submissions at par 92.
69. LEC Judgment at [296].
70. LEC Judgment at [282].
71. LEC Judgment at [286].
72. LEC Judgment at [294].
73. LEC Judgment at [295].
74. LEC Judgment at [296].
75. LEC Judgment at [556].
76. LEC Judgment at [558], [559].
77. LEC Judgment at [573]-[576].
78. LEC Judgment at [577].
79. Appellant's submissions in reply, filed 27 April 2020, par 10.
80. LEC Judgment at [576].
81. Evidence quoted in the respondent's final submissions in the Court below at par 578.
82. Appellant's submissions in reply, par 17.
83. Appellant's submissions filed 11 February 2020, par 59.
84. (2006) 80 ALJR 458; [2006] HCA 1 at [106]-[109] (Hayne J); [144]-[147], [161]-[164] (Callinan and Heydon JJ.)
85. LEC Judgment at [676(i)], set out at [59] above.
86. CA Tcpt 07/05/20, p 77(5).
87. Tcpt, p 77(15).
88. LEC Judgment at [676(ii)], set out at [59] above.
89. (2011) 244 CLR 427; [2011] HCA 48 at [73].
90. [2020] NSWCA 76 at [54].
91. Vakauta v Kelly (1989) 167 CLR 568 at 572; [1989] HCA 44, discussed in Studholme v Rawson at [53]-[56].
92. Appellant's written submissions, par 129.
93. Dial A Dump Industries Pty Ltd v Roads and Maritime Services [2017] NSWCA 73.
94. LEC Judgment at [737].
95. [2020] NSWCA 39 at [57]; see also Moloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252 at [77] (Payne JA).
96. [2008] NSWLEC 112; 160 LGERA 357, at [60].
97. Cf Roads and Maritime Services v United Petroleum Pty Ltd ("United Petroleum") (2019) 99 NSWLR 279; [2019] NSWCA 41 at [8].
98. (2019) 100 NSWLR 771; [2019] NSWCA 234 at [26] (Meagher JA, Gleeson and McCallum JJA agreeing).
99. Moloney at [5] (in my reasons), [69] (Payne JA); Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251 at [57]-[59].
100. United Petroleum at [13].
101. United Petroleum at [96] (Sackville AJA).
102. See fn 97.
103. United Petroleum at [15].
104. See fn 95, at [97]-[100].
105. Melino v Roads and Maritime Services (2018) 235 LGERA 63 at [12] (Basten JA).
106. United Petroleum at [153].
107. United Petroleum at [154].
108. United Petroleum at [155].
109. [2014] NSWCA 33; 199 LGERA 198 at [76]-[80].
110. United Petroleum at [100] (Sackville AJA).
111. [2014] 88 NSWLR 752; [2014] NSWCA 352.
112. United Petroleum at [104]
113. Ibid.
114. United Petroleum at [119]-[120].
115. See fn 109 above.
116. [2018] NSWLEC 31.
117. Draft amended points of claim as at 29 March 2019, par 3(b).
118. Respondent's further amended points of defence, par 3(b) and (c)(ii)-(v).
119. Dial A Dump Industries Pty Ltd v Roads and Maritime Services [2016] NSWLEC 39 at [139].
120. Dial A Dump Industries at [57].
121. Dial A Dump Industries at [170].
122. (1726) 25 ER 223 (dealing with renewal of a lease subject to a trust).
123. Dial A Dump Industries at [178].
124. Samuel Report, 4 December 2017, pars 266-268; affidavit of Darin Marks, 26 September 2017.
125. Written submissions (LEC), par 494.
126. [2007] NSWCA 66 at [52]-[71], [74].
127. LEC Judgment at [762].
128. LEC Judgment at [753]-[755].
129. CA Tcpt, 07/05/20, p 84(25)-(50).
130. Affidavit of Darin Marks, and Samuel Report, 4 December 2017, p 57.
131. The evidence is a one line entry in Mr Samuel's Report (par 262), based on Mr Marks' affidavit, which was not in the material provided to this Court.
132. Samuel Report, 4 December 2017, pars 223-226.
133. Amended points of claim, par 3(b).
134. Amended points of claim, pars 10-16.
135. Amended points of claim, par 34B.
136. LEC Judgment at [827].
137. (1979) 21 SASR 513 at 525.
138. Appellant's written submissions at par 127.
139. LEC Judgment at [838]-[840].
140. See [168] above.
141. CA Tcpt, 06/05/20, p 14(24). DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 August 2020