City Hill Pty Limited (ACN 064 633 558) v ACT Planning and Land Authority and ACT Civil and Administrative Tribunal

[2015] ACTSC 40

1. The Appellant is given leave to amend the Notice of Appeal from the decision of the Master.
2. The appeal is upheld.
3. The proceedings are remitted to the Master for the hearing of the application for leave to appeal.
4. The parties be heard as to costs.

APPEAL - Decision by an Administrative Tribunal - Question of law - Natural justice

APPEAL - Possible improvements to application for leave process - Hear application for leave with appeal

REGULATION AND ADMINISTRATION - Planning - Lease - Variation - Valuation - Comparable sales - Hypothetical development

ACT Civil and Administrative Tribunal Act 2008 (ACT), ss 10, 22, 86

Administrative Appeals Tribunal Act 1975 (Cth), s 44(1)

Australian Capital Territory (Planning and Land Management) Act 1988 (Cth), s 29

Building and Construction Industry (Security of Payment) Act 1999 (NSW)

Heritage Act 2004 (ACT)

Land and Environment Court Act 1979 (NSW), s 56A

Planning and Development Act 2007 (ACT), ss 276, 277, 408, It 26 Sch 1,

Seat of Government Acceptance Act 1909 (Cth)

Court Procedures Rules 2006 (ACT), rr 21, 5071

ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2) (ACT), r 7

15 Lorimer Street Pty Ltd v Secretary of the Department of Infrastructure (1997) 97 LGERA 239

AMP Capital Investors Ltd v Transport Infrastructure Development Corporation [2008] NSWCA 325; (2008) 163 LGERA 245

Attorney-General for New South Wales v X [2000] NSWCA 199; (2000) 49 NSWLR 653

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321

Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515

Australia Postal Corporation v Sellick [2008] FCA 236; (2008) 245 ALR 561

Baker v University of Ballarat (2005) 225 ALR 218

Balenzuela v De Gail [1959] HCA 1; (1959) 101 CLR 226

Ballantyne v Workcover Authority of New South Wales [2007] NSWCA 239; (2007) 5 DDCR 97

Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232; (2003) 38 AAR 55

B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481

B & T Constructions (ACT) Pty Ltd v Construction Occupation Registrar [2013] ACTSC 219

Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209

Borcherdt v Commissioner of Taxation [2014] FCA 56

Brennand v Hartung [2014] ACTSC 326

Burns v Grint [2014] FAMCAFC 48

Buzzacott v Minister for Sustainability; Environment, Water, Population and Communities [2013] FCAFC 111

Capital Property Projects (ACT) Pty Ltd v Planning and Land Authority (ACT) (2008) 2 ACTLR 44

Charan Das v Amir Khan (1920) LR 47 Ind App 255

City Hill Pty Ltd v ACT Planning and Land Authority at [16], [22], [134

Comcare v Etheridge [2006] FCAFC 27; (2006) 149 FCR 522

Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd [2009] FCA 1210; (2009) 113 ALD 254

Commonwealth v Arklay [1952] HCA 76; (1952) 87 CLR 159

Commonwealth v Milledge [1953] HCA 6; (1953) 90 CLR 157

Cordelia Holdings Pty Ltd v Newkey Investments Pty Ltd [2004] FCAFC 48

Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163

Daandine Pastoral Co Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299

Derring Land Pty Ltd v Port Phillip Council [1998] VSC 182

Dura (Australia) Construction Pty Ltd v Victoria Managed Insurance Authority [2009] VSCA 171

Eastman v Commissioner for Social Housing (2011) 252 FCR 278

Fairfax Media Publications Pty Ltd v Cummings [2012] ACTCA 36; (2012) 269 FLR 182

Faull v Commissioner for Social Housing [2013] ACTSC 121; (2013) 277 FLR 61

Fingleton v The Queen [2005] HCA 34; (2005) 227 CLR 166

Goldie v Minister for Immigration and Multicultural Affairs 1999 FCA 1277; (1999) 56 ALD 321

Grocon Constructions Pty Ltd v Planit Cocciardi Joint Venture (No 2) [2009] VSC 426; (2009) 26 VR 172

Gwynvill Properties Pty Ltd v Commissioner for Main Roads (1983) 50 LGRA 322

Health Care Complaints Commission v Karalasingham [2007] NSWCA 267

John Flynn Community Group Inc v ACT Heritage Council (2012) 6 ACTLR 266

Jones v National Coal Board [1957] EWCA Civ 3; [1957] 2 QB 55

Kassem v Crossley [2000] NSWCA 276; (2001) 32 MVR 179

Kirk v Industrial Court of New South Wales (2010) 239 CLR 531

Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390

Leichhardt Council v Roads & Traffic Authority (NSW) [2006] NSWCA 353; (2006) 149 LGERA 439

Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409

Li Shi Ping v Minister for Immigration, Local Government and Ethnic Affairs [1994] FCA 1512; (1994) 35 ALD 225

Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2002) 212 CLR 111

McCathie v Federal Commissioner of Taxation [1944] HCA 9; (1944) 69 CLR 1

Melbourne Water Corporation v Domus Design Pty Ltd [2007] VSC 114; (2007) 16 VR 539

Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426

Minagall v Ayres [1966] SASR 151

Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24

Mock Sing v Dat [1902] NSWStRp 70; (1902) 2 SR(NSW) 333

Muir v Refugee Review Tribunal [2002] HCA 30; (2002) 76 ALJR 966

Musico v Davenport [2003] NSWSC 977

Neat Domestic Trading Pty Ltd v AWB Ltd [2003] HCA 35; (2003) 216 CLR 277

News Digital Media Pty Ltd v Mokbel [2010] VSCA 51; (2010) 30 VR 248

O'Donnell v Environment Protection Authority [2012] ACTSC 140

Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353

Re Minister for Immigration and Multicultural Affairs; Ex Parte Appellant S 20/2002 [2003] HCA 30; (2003) 77 ALJR 1165

Road & Traffic Authority of New South Wales v Peak [2007] NSWCA 66

Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue of Victoria [2001] HCA 49; (2001) 207 CLR 72

R v Jenkins [1970] TASStRp 2; [1970] Tas SR 13

Sean Investments Pty Ltd v MacKellar [1981] FCA 191; (1981) 38 ALR 363

Secretary of State for Foreign Affairs v Charlesworth Pilling & Co [1901] AC 373

Simmonds v Spooner (Unreported, New South Wales Court of Appeal, Kirby P, Cole JA and Rolfe AJA, CA 40738 of 1990, 28 March 1995)

Spencer v The Commonwealth [1907] HCA 82; (1906) 5 CLR 418

Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141

Tulloh v Prisoners Review Board [2014] WASC 239

Turner v Minister for Public Instruction [1956] HCA 7; (1956) 95 CLR 245

Ucar v Nylex Industrial Products Ltd [2007] VSCA 181; (2007) 17 VR 492

Valuer-General v Perilya Broken Hill Ltd [2013] NSWCA 265

Walsh v Department of Employment, Education, Training and Youth Affairs (1998) 51 ALD 690

Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105; (2014) 200 LGERA 375

Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21; (1947) 74 CLR 492

Williams v The Queen [1986] HCA 88; (1986) 161 CLR 278

Yates Property Corporation Pty Ltd (in liquidation) v Darling Harbour Authority (1991) 21 NSWLR 156

Alan Hyam, The Law Affecting Valuation of Land in Australia (Federation Press: Sydney, 2014) 5th ed, chap 4

R O Rost and H G Collins, Land Valuation and Compensation in Australia (Aust Institute of Valuers: Sydney, 1984) ch 4

Dr R T M Whipple, Property Valuation and Analysis (Thomson, Lawbook Co: Sydney, 2006) 2nd ed

ACT Civil and Administrative Tribunal (Second Respondent)

Case Title: City Hill Pty Ltd v ACT Planning and Land Authority and Anor

Citation: [2013] ACTSC 108

1. Land in the Australian Capital Territory is, by virtue of the Seat of Government Acceptance Act 1909 (Cth), land of the Commonwealth. Under s 29 of the Australian Capital Territory (Planning and Land Management) Act 1988 (Cth), the Executive of the Territory is empowered to grant leases of such land on behalf of the Commonwealth. Now, all (or almost all) land in the Territory is held under lease granted, or taken to be granted, under legislation of the Territory, currently the Planning and Development Act 2007 (ACT) (the Planning Act). If the lease of such land is varied, that variation may require the registered proprietor to pay to the Territory a lease valuation charge (a change of use charge) and the variation will not formally be made until that charge is paid.

2. On 20 August 2009, the Respondent, the ACT Planning and Land Authority, approved a variation to the lease of certain land of City Hill Pty Ltd, the Appellant, that land being Block 19 Section 29 Braddon, known as 16 Lonsdale Street, Braddon. The variation was to add a more diverse range of uses than were previously permitted on the subject land, in particular, to permit residential use other than on the ground or first floor level in any building erected on the subject land.

3. The Respondent assessed the change of use charge in the sum of $1,050,000 whereas the Appellant said that no charge should be levied.

4. At the relevant time, s 276 of the Planning Act provided that the Respondent must not execute a variation of a relevant lease unless the change of use charge has been paid.

5. The change of use charge was, at the time, calculated under s 277 of the Planning Act. That section was, at the time, in the following terms:

277 Working out change of use charge

(1) The planning and land authority works out the change of use charge for a variation of a lease as follows:

CUC = (V1 - V2)x75%

(2) In this section:

CUC means the change of use charge payable for the variation of the lease.

**V1 - **

(a) for a variation other than a consolidation or subdivision, means the capital sum that the lease might be expected to realise if -

(i) the lease were varied as proposed; and

(ii) the lease were genuinely offered for sale immediately after the variation on the reasonable terms and conditions that a genuine seller would require; and

(iii) the rent payable throughout the term of the lease or, for a variation that involves the surrender of a lease and issue of a new lease, the new lease, were a nominal rent; or

(b) for a variation that is a consolidation or subdivision, means the capital sum that the new lease or leases to be granted under the consolidation or subdivision might be expected to realise if -

(i) the consolidation or subdivision were to take place as proposed; and

(ii) the new lease or leases were genuinely offered for sale immediately after the variation on the reasonable terms and conditions that a genuine seller would require; and

(iii) the rent payable throughout the term of the new lease or leases were a nominal rent.

**V2 - **

(a) for a variation other than a consolidation or subdivision, means the capital sum that the lease might be expected to realise if -

(i) the lease were not varied during the remainder of its term; and

(ii) the lease were genuinely offered for sale immediately before the variation on the reasonable terms and conditions that a genuine seller would require; and

(iii) the rent payable throughout the term of the lease, or lease to be surrendered, were a nominal rent; or

(b) for a variation that is a consolidation or subdivision, means the capital sum that the lease or leases to be surrendered under the consolidation or subdivision might be expected to realise if -

(i) no consolidation or subdivision were to take place during the remainder of the term of the surrendered lease or leases; and

(ii) the lease or leases were genuinely offered for sale immediately before the consolidation or subdivision on the reasonable terms and conditions that a genuine seller would require; and

(iii) the rent payable throughout the term of the lease or leases to be surrendered were a nominal rent.

(3) If the capital value assessed as V1 is equal to or less than the capital value assessed as V2, no change of use charge is payable.

6. Though s 277 of the Planning Act does not expressly state the date at which the respective valuations are to be made, the references in s 277(2) to the capital sum offered immediately after (V1) or before (V2) the variation make it clear that the valuation is to be made as at that date.

7. In the proceedings to which I refer below (at [12]-[13]), the ACT Civil and Administrative Tribunal (the ACAT) proceeded on this basis, noting the date for valuation to be 20 August 2009, the date of approval of the variation, as noted above (at [2]).

8. As the proceedings between the parties show, the process for variation can be long-drawn out. Hence the importance of knowing the date at which the valuations are to be made.

9. In any event, the Respondent assessed V1, that is the value of the capital sum for which a willing purchaser would have to pay a vendor not unwilling, but not anxious, to sell (Spencer v The Commonwealth [1907] HCA 82; (1906) 5 CLR 418) for the lease after the variation had been made, which I will call the "After Value", as $5,665,000. The Respondent assessed V2, that is, the capital sum payable on the same basis but before the variation had been made, which I will call the "Before Value", as $4,265,000. These values were assessed as at 20 August 2009.

10. It was by applying the formula in s 277 of the Planning Act to these values that led to the change of use charge being calculated by the Respondent to be $1,050,000.

11. The Appellant, however, assessed the After Value as $3,040,000 and the Before Value as $4,050,000. It was, however, prepared to, and, for the purposes of the proceedings, did, adopt the After Value as $4,050,000, thus resulting in a change of use charge of nil. These values were also assessed as at 20 August 2009.

12. The Respondent declined to accept the assessment made by the Appellant, preferring its own, and the Appellant appealed to the ACAT under s 408 of the Planning Act, since the decision was a reviewable one under Item 26 of Sch 1 of that Act and the Appellant was an eligible entity, entitled to appeal to the ACAT against the Respondent's decision.

13. On 16 December 2011, the ACAT varied the decision of the Respondent:

by amending the After Value (V1) to $4,730,000, the Before Value (V2) to $3,900,000, the Added Value to $830,000 and the 75% of Added Value to $622,300 and the CUC Payable to $622,300.

14. The Appellant was dissatisfied with the decision of the ACAT. Under s 86 of the ACT Civil and Administrative Tribunal Act 2008 (ACT), an appeal against a decision under the Planning Act may be taken on a question of law and can only be brought by leave. The Appellant sought leave to appeal to this Court.

15. The Appellant's application for leave to appeal came before the Master on 24 February 2012. On 13 June 2013, the Master dismissed the application: City Hill Pty Ltd v ACT Planning and Land Authority and Anor [2013] ACTSC 108.

16. The Appellant has now appealed from the decision of the Master, seeking that the decision of the Master be set aside and the application be remitted to the Master for determination of the application for leave in accordance with law.

17. The appeal has come before me and not to the Court of Appeal since the decision of the Master, refusing leave to appeal, is an interlocutory order. The Victorian Court of Appeal so held in relation to relevantly similar provisions for appeals from the Victorian Civil and Administrative Appeals Tribunal in Dura (Australia) Construction Pty Ltd v Victoria Managed Insurance Authority [2009] VSCA 171 at [3]- [9].

18. In his Honour's decision, the Master described the proceedings in the ACAT and briefly the decision made. His Honour referred to the draft Notice of Appeal and some procedural problems that the orders sought might occasion. I do not need to address these matters at this stage.

19. His Honour was concerned, however, that the draft Notice of Appeal did not identify a "pure" question of law which would, if answered as the Appellant submitted it should be answered, be determinative of the appeal. His Honour said (at [14]), "[t]he proposed questions of law are not of a kind that would entitle the Appellant to the relief that it seeks. The questions are in reality questions of mixed fact and law".

20. His Honour rejected a submission that the decision of the High Court in Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2002) 212 CLR 111 was authority for the proposition that an appeal on a question of law in a valuation case extends to questions of mixed fact and law.

21. Accordingly, the Master dismissed the application for leave to appeal.

22. Regrettably, the Master did not set out in his Honour's reasons for decision the relevant terms of the draft Notice of Appeal proposed to be filed if leave were granted. Such a document is required to accompany the application for leave under r 5071 of the Court Procedures Rules 2006 (ACT). The draft Notice of Appeal, however, was annexed to an affidavit of the Appellant's solicitor which has been filed in support of the application for leave to appeal and was included on that basis in the Appeal Book. It was, accordingly, available to me.

23. The grounds of the appeal set out in the draft Notice of Appeal were as follows:

In reaching its decision of 16 December 2011, the Tribunal erred in law:

(a) In treating Mr McInerney's Sale 1 and Sale 2 as comparable sales for any purpose.

(b) In adopting an approach to valuation which assumed an increase in value consequent on variation of the lease.

(c) In rejecting as capable of providing any evidence of value the hypothetical development analyses undertaken by Mr Flannery and Mr Svanberg.

(d) In finding that Mr Flannery should, when analysing the sale of 5-7 Torrens Street, have applied the area of 1037m2 and not 1195m2, there being no evidence on which to base the finding or, alternatively, in failing to afford Mr Flannery the opportunity to apprise the Tribunal of the correct position.

(e) In finding that Mr Flannery, when analysing the sale of 5-7 Torrens Street, adopted a high value for parking spaces, there being no evidence on which to base the finding or, alternatively, in failing to afford Mr Flannery the opportunity to apprise the Tribunal of the correct position.

(f) In failing to have regard to the principle in Spencer v Commonwealth when assessing the evidence before the Tribunal.

24. At the hearing before me, however, the Appellant sought to rely on a reformulation of these questions which, it was said, were put as questions of law. These reformulated questions were set out in an affidavit of the Appellant's solicitor and were as follows:

1. The Appellant relies on the following questions of Law:

a) When the Tribunal deducted 5% from the reported sale price in respect of Sales 1 and 2 'because the purchaser was seeking to acquire the additional rights that would accrue if the lease were to be varied' so as to render those sales comparable to the subject lease, was the Tribunal accepting the sales as evidence of value of the subject lease for a reason which was not rational?

b) Was the Tribunal required to take into account the evidence afforded by the hypothetical feasibility development studies in the absence of a finding by the Tribunal that the particular evidence before it was unreliable?

c) Should the Tribunal have given Mr Flannery (and the Appellant) an opportunity to be heard before it made the finding that Mr Flannery should have applied the area of 1037m2 and not 1195m2 when analysing the sale of 5-7 Torrens Street?

d) In respect of the Tribunal's finding that Mr Flannery, when analysing the sale of 5-7 Torrens Street, adopted a high value for parking spaces:

i. Was there any evidence on which the Tribunal could make that finding?

ii. Should the Tribunal have given Mr Flannery (and the Appellant) an opportunity to be heard before it made that finding?

e) Was the process by which the Tribunal adopted $1400.00 as the overall rate for the commercial component of the 'after value' of the subject lease an accepted method for the Tribunal to satisfy itself of that fact?

f) Should the Tribunal have given Mr Flannery (and the Appellant) an opportunity to be heard before it made the finding that Mr Flannery had miscalculated when capitalising the passing rent?

i. In finding that Mr Dunstone had proposed a form of development (as opposed to depicting the form of development proposed by Mr McInerney for the Respondent), did the Tribunal take into account an irrelevant consideration and fail to take into account a relevant consideration?

25. At the hearing before me the Respondent expressly consented to that course. It may be accepted that an Appellant may amend his, her or its draft Notice of Appeal at any time prior to the hearing of the application for leave and, at the hearing, by leave.

26. The implications of that course were not, however, discussed for, insofar as the reformulated questions were different from those considered by the Master, it becomes difficult to evaluate his Honour's decision which was made with respect to differently formulated questions. I will address this further below (at [59]-[64]).

27. The form of the questions was said to be mandated by authority. A number of such authorities have been suggested: Comcare v Etheridge [2006] FCAFC 27; (2006) 149 FCR 522 at 527-38; [18]- [71]; Eastman v Commissioner for Social Housing (2011) 252 FLR 278 at 287; [51]; John Flynn Community Group Inc v ACT Heritage Council (2012) 6 ACTLR 266 at 273; [17]. I have read them as well as Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 523-33 and Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232; (2003) 38 AAR 55 at 57-63. None of these authorities, however, mandate a particular grammatical formulation of the questions of law the subject of an appeal. What each does emphasise, however, is that whatever the grammatical form of the question, it should be formulated in a way that makes very clear what the question of law is that arose in the appeal and not either a question that may be one of fact or of mixed fact and law, or that requires a broad inquiry into the construction and operation of legislation, none of which are questions of law. These authorities require the Notice of Appeal to specify with clarity the question of law to be considered, whether or not it is prefaced by an expression such as "Whether the Tribunal erred [in law] in ..." or not, an apparently permissible form of question.

28. Like other distinctions in the law (such as the difference between an interlocutory and final order: Brennand v Hartung [2014] ACTSC 326 at [24]) the distinction between a question of law and a question of fact is often problematic, with no bright line to resolve the question, despite often significant consequences for the answer.

29. In Faull v Commissioner for Social Housing [2013] ACTSC 121; (2013) 277 FLR 61 (Faull) at 77-9; [90], I set out the principles distilled from the authorities which need to be applied to determine whether a question is one of law. That summary is in the following terms:

(ii) Question of law

So far as an appeal on a question of law is concerned, the courts have set out some principles to describe the scope and consideration of such an appeal. They may be summarised as follows:

(a) The function of the Court in such an appeal 'is limited to the identification of an erroneous answer in respect of a question of law: B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481 at [150].

(b) The question of law to be raised on appeal should be carefully drafted and precisely identified as a pure question of law: Edgley v Federal Capital Press of Australia Pty Ltd [1999] ACTSC 95; (1999) 139 ACTR 1 at [3]; Birdseye v Australian Securities and Investments Commission [2003] FCAFC 232; (2003) 38 AAR 55 at [18].

(c) Where an appeal lies 'on a question of law', the subject matter of the appeal is the question or questions of law, as stated in the Notice of Appeal: Comcare v Etheridge [2006] FCAFC 27; (2006) 149 FCR 522 at [13]- [16]. The ambit of the appeal is confined to that question or those questions: Brown v Repatriation Commission [1985] FCA 194; (1985) 7 FCR 302 at 304. It is for this reason that it is important to frame the questions carefully. In an appropriate case, the court may itself be prepared to frame the question of law in order to found its jurisdiction: Rana v Military Rehabilitation and Compensation Commission [2011] FCAFC 80; (2011) 55 AAR 300 at [16].

(d) The appeal does not authorise the court to engage in fact finding on the merits of decisions of the tribunal: B & L Linings at [38], [55], [75]-[77]; Avery v Registrar of Births, Deaths and Marriages [2010] NSWCA 72; (2010) 79 NSWLR 354 at [23].

(e) The power of the Court does not extend to making an evaluative judgement based on primary facts as found by the tribunal from which the appeal is taken or exercising a discretionary power vested in that tribunal, unless the finding or order was the only one open: B & L Linings at [139].

(f) The Court cannot, therefore, usurp the fact-finding function of the tribunal from which the appeal is taken: Osland v Secretary, Department of Justice at [19] [75]. Thus, the hearing of the appeal does not extend to a rehearing of the factual questions before the tribunal from which the appeal is taken on making findings of fact: B & L Linings at [55], [75]; North Broken Hill Ltd v Tumes [1999] NSWCA 309; (1999) 18 NSWCCR 412 at [25]; Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at [69]-[70].

(g) Even where an error of law is demonstrated, the Court cannot engage in fact finding on the merits of the case: B & L Linings at [78].

(h) A question of law does not include a question of mixed fact and law: Williams v The Queen [1986] HCA 88; (1986) 161 CLR 278 at 287, 301-302; Comcare v Etheridge at [16].

(i) An appeal on a question of law is narrower than an appeal 'involving a question of law': TNT Skypak International (Australia) Pty Ltd v Commissioner of Taxation [1988] FCA 119; (1988) 19 ATR 1067 at 1069-1070.

(j) The question of whether facts found fall within a statutory provision properly construed is generally a question of law: Hope v Council of the City of Bathurst [1980] HCA 16; (1980) 144 CLR 1 at 7. This principle is qualified when the statute uses words according to their ordinary meaning and the question is whether the facts as found fall within those words 'where different conclusions are reasonably possible': NSW Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation [1956] HCA 80; (1955) 94 CLR 509 at 512. Then, as the relevant material reasonably admits of different conclusions, the particular conclusion reached is a question of fact: Vetter v Lake Macquarie City Council at [24]-[28].

(k) It is not a question of law to claim that the decision of the tribunal from which the appeal was taken was against the evidence or the weight of the evidence: Collins v Minister for Immigration and Ethnic Affairs [1981] FCA 147; (1981) 58 FLR 407 at 410. It is, however, an error of law if there is no evidence or material to support the finding of fact or if the true and only reasonable conclusion on the evidence contradicts the decision of the tribunal from which the appeal is taken: Federal Commissioner of Taxation v La Rosa [2002] FCA 1036; (2002) 50 ATR 450 at 459.

(l) Whether the decision of the tribunal from which the appeal has been taken has been made with an error of fact, or whether the finding of fact is perverse, illogical or unreasonable are not questions of law: Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 356.

(m) "The grounds required to be specified in the notice of appeal are not grounds of appeal; they are the grounds upon which the Appellant will argue that the answers for which it contends to the questions of law entitle it to the relief which it seeks. It is not possible ... to extend the subject matter of the appeal beyond the specified questions of law by itemising, under the heading 'Grounds', a series of alleged errors (some being errors of law, some being errors of fact and some being errors of mixed law and fact) in the reasons for decision of the Tribunal": HBF Health Funds Inc v Minister for Health and Ageing [2006] FCAFC 34; (2006) 149 FCR 291 at [6].

(n) The function of the Court is to determine whether the decision of the tribunal from which the appeal is taken was right or wrong in law on the evidence before it and according to the law as it stands at the time the appeal is heard: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [12]- [14]; Victorian Stevedoring & General Contracting Co Pty Ltd v Dignan [1931] HCA 34; (1931) 46 CLR 73 at 106-109.

(o) If the Court finds that the tribunal from which the appeal has been taken has made an erroneous decision on a question of law, the power of the Court to make orders that 'it thinks appropriate is not a power which is at large. The orders must be appropriate to the decision reached: B & L Linings at [137].

(p) An immaterial error of law will not vitiate the decision of a tribunal from which the appeal is taken: BTR plc v Westinghouse Brake & Signal Co (Aust) Ltd (1992) 34 FCR 246 at 254.

(q) If, on the facts already found, and in circumstances where there is no question of finding other facts, there is only one outcome in law, this Court can pronounce that result: GPT Re Ltd v Belmorgan Property Development Pty Ltd [2008] NSWCA 256; (2008) 72 NSWLR 647 at [101].

30. Subject to what I say below, these are the principles that I shall apply in this case.

31. It is also relevant when considering the issue to note that it is not enough merely to identify a question of law. In Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409 at 419, Moffitt P set out the relevant principles as follows:

... It is not sufficient to show that some error of law appears in the judgment or during the course of the trial. The error has to be one upon which the decision depends, so the decision is vitiated by the error ... It will not suffice to establish that one or some only of a number of alternate findings upon which the decision was given involved errors of law, if one alternative involved no error of law.

32. As Handley JA pointed out in Yates Property Corporation Pty Ltd (in liquidation) v Darling Harbour Authority (1991) 21 NSWLR 156 at 177, when citing with approval the above statement of Moffitt P, the same approach has been taken in the Federal Court of Australia in exercising its jurisdiction to review decisions of the Administrative Appeals Tribunal.

33. Basten J further stated in B & L Linings Pty Ltd v Chief Commissioner of State Revenue [2008] NSWCA 187; (2008) 74 NSWLR 481 at 506; [125], by reference to Health Care Complaints Commission v Karalasingham [2007] NSWCA 267 at [14]- [16]:

It is not necessary that the answer to the question of law constitutes the ultimate decision of the Tribunal, so long as it is a question material to the decision.

34. Mr R Arthur, who appeared for the Appellant, did not cavil with the above approach except for what is principle (h) in [27] above. He submitted that in Maurici v Chief Commissioner of State Revenue, the High Court had accepted that, in valuation appeals, it was legitimate to appeal where the question to be answered was one of mixed law and fact.

35. His submission was based on the following passage from the unanimous decision of the Court (at 116; [8]):

An appeal lay, and was taken from that decision to a judge of the Land and Environment Court on a question of law pursuant to s 56A of the Land and Environment Court Act 1979 (NSW). We do not doubt that the question argued there, and again here, as to the relevance of scarcity, was a question of at least mixed law and fact. The making of a valuation will frequently involve an application of legal principle or principles. Questions of law, fact and opinion do not always readily and neatly divide themselves into discrete matters in valuation cases and practice. The Privy Council took this view, with which we respectfully agree, of what may constitute a point, or question of law in relation to a valuation of land, in Melwood Units Pty Ltd v Commissioner of Main Roads:

If it should appear that the Land Appeal Court ignored a principle of assessment of compensation for compulsory acquisition (resumption), such as for example that commonly known as the Point Gourde principle, that in their Lordships' opinion would be an error in law. So also if the Land Appeal Court rejected as wholly irrelevant to assessment of compensation a transaction which prima facie afforded some evidence of value and rejected it for reasons which were not rational, that in their Lordships' opinion would be an error in law. And as will be seen, it is on those lines that the developer contends that the Land Appeal Court erred in this case. (footnotes omitted)

36. The Master had rejected Mr Arthur's interpretation of what the High Court had said. His Honour said (at [15]):

The joint judgment of the High Court at [8] identified the question which had gone to the single judge as 'a question of at least mixed law and fact'. Perhaps their Honours were saying that the single judge should not have embarked upon the appeal in those circumstances. But by the time it got to the High Court that was water well under the bridge. It is apparent from the submissions of counsel before the High Court that no issue was raised as to whether the single judge exceeded his jurisdiction in embarking upon the appeal from the Commissioner. Perhaps it was by then too late for that issue to be raised. AT all events, the High Court mentioned the question in passing but did not make any pronouncement of law about it. The appeal was determined without reference to it. I do not take Maurici as authority for the proposition that in valuation cases, an appeal on a question of law extends to an appeal on a question of mixed law and fact. Maurici was not mentioned in any of the judgments in Birdseye or Etheridge, decisions by which I am bound.

37. Mr Arthur sought and was given leave to amend his Notice of Appeal from the decision of the Master to challenge this finding.

38. To evaluate this matter, I need to address the issue of what the High Court was saying. In order to do so, it is necessary to consider the approach that the courts have taken to the limitations that statutes often impose on appeals to courts from administrative tribunals. In that regard, I note in particular that legislative limitations on appeals on those involving questions of law appear in a number of forms, including "on a question of law", "on a question of law alone (or only)" or "involving a question of law".

39. I accept that, in Williams v The Queen [1986] HCA 88; (1986) 161 CLR 278, which I cited in Faull as authority for principle (h) above (at [29]), the Court was there dealing with an appeal which could only be brought on a question of law alone and it was in that context that Gibbs CJ, relying (at 287) on what Crisp J said in R v Jenkins [1970] TASStRp 2; [1970] Tas SR 13 at 15, and Mason and Brennan JJ (at 301), held that an appeal on such a ground does not include a question of mixed fact and law.

40. Nevertheless, Branson J, with whom Spender and Nicholson JJ agreed, held in Comcare v Etheridge at 527; [16] that in an appeal from the Administrative Appeals Tribunal under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth), which provided for an appeal to the Federal Court from a decision of the Tribunal "on a question of law", that "[a] mixed question of fact and law is not a question of law within the meaning of s 44(1)". Reference was there made by her Honour to what she and Stone J observed in Birdseye v Australian Securities and Investments Commission at 60; [18], but in neither place is there any reasoning advanced or analysis undertaken of why this approach was adopted. It was merely asserted. In particular, no reference was made to any difference arising from the different formulae "question of law" and "question of law alone (or only)".

41. The ACT Court of Appeal addressed this issue in Eastman v Commissioner for Social Housing. The Court held that appeals from the Residential Tenancies Tribunal, provided for in relevantly similar terms to those here being considered, could not be brought to agitate a question of mixed fact and law. The Court (at 289; [61]) simply referred to the fact that Basten JA's reference in B & L Linings Pty Ltd v Chief Commissioner of State Revenue (at 510-1; [140]-[141]) to Williams v The Queen made no relevant distinction between the two formulae.

42. I note that, in Attorney-General for New South Wales v X [2000] NSWCA 199; (2000) 49 NSWLR 653 at 663; [43], Spigelman CJ, with whom Priestly JA agreed, did see a distinction in meaning between the two formulae.

43. It seems that Basten JA was, or may have been, influenced in his approach by the need to protect judicial review from the problems identified by Mason CJ in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 341, namely the problems caused by exposing findings of fact by administrative tribunals to judicial review.

44. Some support for the approach of the ACT Court of Appeal may also arise from the terms of the statute. Section 86 of the ACT Civil and Administrative Tribunal Act 2008 (ACT) permits appeals from the ACAT by leave of the Supreme Court in two circumstances, depending on the legislation under which the decision was made by the ACAT. In general, s 86(1) provides for an appeal by leave on a question of fact or law; s 86(2) restricts appeals from decisions under the Heritage Act 2004 (ACT), the Planning Act or the Free Protection Act 2005 (ACT) by leave, on a question of law. While the drafters could easily have added "only" or "alone" to the reference to "a question of law" and did not do so, there is an available inference that appeals from decisions of the ACAT made under the latter three Acts should only be brought on a question of law and not a question of mixed law and fact, because of the structure of the section and the contrast between the two sub-sections.

45. Has the High Court in Maurici v Chief Commissioner for State Revenue diverted from this line of authority? It certainly did not give any indication in its reasons that it was doing so. In Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390 at 399; [25], French CJ held that the provision there under consideration, namely an appeal where the Tribunal "decides a question with respect to a matter of law", was wide enough to encompass a question of mixed fact or law. By reference to Maurici v Chief Commissioner of State Revenue, his Honour pointed out that "[q]uestions of fact and law are often closely intertwined". The other members of the Court in the latter case did not address the issue in those terms, but held (at 418; [90]) that "the ground usually described as a 'no evidence ground' raises a question of law".

46. In Road & Traffic Authority of New South Wales v Peak [2007] NSWCA 66, the NSW Court of Appeal considered an appeal from the Land and Environment Court which had determined the compensation payable to the Respondent following the compulsory acquisition of his land. Basten JA considered the issue of the extent of the court's jurisdiction on appeal and said (at [140]-[142]:

1. One question is whether the jurisdiction extends to any error of law, in circumstances where it is not possible to identify a question of law which, either expressly or implicitly, has been resolved by the Court below. In most cases, questions of law are not separately identified for determination, and a final operative decision will frequently involve mixed matters of law and fact: Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2002) 212 CLR 111 at [8]. In Maurici the Court further concluded that for the primary judge to ignore 'a principle of assessment of compensation for compulsory acquisition' would constitute a point or question of law ... At least by implication, the statutory provision must involve a decision on a point or question of law which has been determined erroneously and, in that sense, involves an error of law.
2. The present case falls into a somewhat different category. The error committed by the primary judge, on the analysis set out above, was to mistake the undisputed evidence before her. Did such an error involve a point or question of law?
3. The error could no doubt be described as an error of fact: however, it is more than that. In the context of a conflict between two experts, her Honour was entitled, as a matter of judgment, to choose the opinion of one or the other, or to formulate her own opinion based on their evidence. What she was not entitled to do was simply to ignore the evidence of one, without explanation.

47. In AMP Capital Investors Ltd v Transport Infrastructure Development Corporation [2008] NSWCA 325; (2008) 163 LGERA 245, the Court was faced with a submission from counsel for the Appellant, Mr M G Craig QC, that the primary judge's reasons showed that she was not acting on probative evidence or valuation principles. Hodgson JA, with whom Bell JA and Gyles AJA agreed, described the submission and his Honour's response (at 257; [39]-[40] as follows:

The reasons displayed error of valuation principle, and therefore an error of law: Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111 at [8].

I accept Mr Craig's submission that there must be material capable of rationally supporting a conclusion [Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [127]- [129]] that the absence of probative evidence is equivalent to no evidence [Bruce v Cole (1998) 45 NSWLR 163 at 188B], and that an error of valuation principle is or may be an error of law (Maurici).

48. Finally, I note that in Re Minister for Immigration and Multicultural Affairs; Ex Parte Appellant S 20/2002 [2003] HCA 30; (2003) 77 ALJR 1165 at 1175; [55], McHugh and Gummow JJ commented

In various areas of the law, there is a critical line drawn between factual and legal matters. The distinction between law and fact has informed the functions of judge and jury. It has been of central importance, both for the conduct of trials at nisi prius and the detection of reviewable jury error under the old appellate processes of the courts of common law. The matter is discussed by Jordan CJ in McPhee v S Bennett Ltd. Rights of appeal have been conferred by statute from the decisions of courts and tribunals but only in respect of what are identified in the statute as errors of law. The various pieces of New South Wales legislation considered in Azzopardi v Tasman UEB Industries Ltd and, more recently, in Maurici v Chief Commissioner of State Revenue provide two examples. (footnotes omitted).

49. Both of their Honours were members of the Court which decided Maurici v Chief Commissioner of State Revenue.

50. I am not convinced that the High Court in Maurici v Chief Commissioner for State Revenue was re-interpreting the appellate limitation "on a question of law" to include questions of mixed fact and law even (though not expressly articulated to be) limited to valuation matters, but I am troubled by the apparent clarity of what the unanimous Court said which is clearly open to that construction. The point made by the Appellant is not unarguable.

51. It seems to me more likely that the Court was emphasising the close interaction in such cases between fact and law and the grey line between them. To this extent, it seems to me that the approach of Basten JA in Roads & Traffic Authority of New South Wales v Peak is the meaning to be given to what the High Court said, namely that the operative decision may well be a decision of mixed fact or law, but appeal only lies where there is a "pure" question of law, though this will encompass the so-called "no evidence ground" and a misapplication of valuation principle. To the relevant extent, these should be included in the principles set out above (at [27]).

52. It is also relevant to understand the statutory context of what was before the High Court. Section 56A of the Land and Environment Court Act 1979 (NSW) gave a party in certain proceedings a right to appeal. The section is relevantly as follows:

56A (1) A party to proceedings in Class 1, 2, 3 or 8 of the Court's jurisdiction may appeal to the Court against an order or a decision of the Court on a question of law, being an order or a decision made by a Commissioner or Commissioners.

53. It seems to me the High Court was pointing out that the order or decision of the Land and Environment Court involved a resolution of a question that was a question of at least mixed fact or law.

54. The appeal, however, taken from that decision, must be one involving a question of law, though the decision itself was not so limited. This seems to follow from the reference to the decision in Melwood Units Pty Ltd v Commissioner of Main Roads [1979] AC 426 at 432 where the Privy Council twice referred expressly to "error of law" and not "error of mixed law and fact". Nevertheless, the reasoning of the High Court is by no means crystal clear on this point.

55. In relation to the reasoning of the Master on this issue, I do have some concerns. His Honour was not, of course, bound by Birdseye v Australian Securities and Investments Commission or Comcare v Etheridge. He was bound by Eastman v Commissioner for Social Housing, which he did not mention, though he was not bound by it if Maurici v Chief Commissioner for State Revenue was inconsistent with it; his Honour was required to follow the High Court rather than the Court of Appeal if they differed.

56. The argument accepted by the Master that the jurisdiction issue, by the time the appeal had reached the High Court, was "water well under the bridge" cannot be accepted. Jurisdiction is a fundamental issue; it is, in the words of the plurality in Kirk v Industrial Court of New South Wales (2010) 239 CLR 531 at 569; [62], the "authority to decide". While a decision of a superior court without jurisdiction is not a nullity (Mock Sing v Dat [1902] NSWStRp 70; (1902) 2 SR(NSW) 333 at 336, 338) it would ordinarily be set aside on appeal. The court, at whatever level, would be vigilant to ensure that, if appropriate, a decision without jurisdiction would be set aside. See, in a somewhat different circumstance, Fingleton v The Queen [2005] HCA 34; (2005) 227 CLR 166.

57. While, therefore, I do not agree with the reasoning of the Master, I am not satisfied that his conclusion is wrong and would not uphold the appeal on this basis, though I do not consider the point unarguable.

58. Accordingly, I will allow the Appellant to amend the Notice of Appeal from the decision of the Master.

59. I turn now to the questions re-formulated by the Appellant. The Master, of course, did not have these before him; indeed, the draft Notice of Appeal did not set out any questions. As will become apparent, however, his Honour had the substance of most of them.

60. In considering whether leave should be given to appeal a decision of the ACAT, Penfold J in O'Donnell v Environment Protection Authority [2012] ACTSC 140 at [78] identified three "pre-requisites" to the grant of such leave (which, in that particular case, was to appeal on a question of fact or law, not a question of law) as follows:

(a) whether a question of fact or law has been identified;

(b) whether there is at least an arguable case that the Appeal President erred in his resolution of that question; and

(c) whether the correct resolution of that question would be more favourable to the Appellant.

61. Pre-requisite (a) is important. In this case, however, it does not seem to me that the administration of justice is enhanced by requiring an appellant for leave to appeal to be denied his, her or its otherwise right to have the application for leave heard and determined merely because what is or can plainly be seen to be a question (of fact or law) is not in interrogative form. This may more readily be accepted where the appellant is a litigant in person.

62. On the other hand, lawyers should not shield behind such an approach to justify sloppy legal drafting where a question can appropriately be formulated and where this has not been done. Indeed, as I have referred to above (at [27]), it may sometimes not be patent precisely what the question is, or the formulation may be ambiguous as to the question to be considered and this may have a direct bearing on whether leave should be given, because the question may not disclose a question of fact or law (as the case may be) either at all or under one or more of the possible interpretations. The Court can then refuse leave or strike out the offending question.

63. While the court should not so intervene that it undertakes the role of drafter for the appellant, the court should not grant leave unless and until the question, or questions, have been clearly identified and, perhaps during argument and with some direction or appropriate assistance from the court, clearly articulated.

64. In this case, the questions finally articulated in the affidavit of the Appellant's lawyer did bear some resemblance to the errors allegedly identified in the draft Notice of Appeal, though I found it difficult to reconcile some of the former to the latter. Nevertheless, there seemed to be sufficient correspondence to make the hearing of the application appropriate and the Respondent did not object or challenge the Appellant's right to proceed on the reformulated questions. The Respondent, being a model litigant, was, in the circumstances, perhaps obliged not to object or challenge.

65. Accordingly, I will consider the reformulated grounds in turn.

(a) When the Tribunal deducted 5% from the reported sale price in respect of Sales 1 and 2 'because the purchaser was seeking to acquire the additional rights that would accrue if the lease were to be varied' so as to render those sales comparable to the subject lease, was the Tribunal accepting the sales as evidence of value of the subject lease for a reason which was not rational?

66. This question is said to re-state in interrogative form the grounds (a) and (b) in the draft Notice of Appeal.

67. In order to determine the Before Value and the After Value, the ACAT, with the assistance of evidence from expert valuers, must determine the relevant capital sum referred to in s 277 of the Planning Act, a question of valuation. Valuation, in this context, has been helpfully and definitively defined by the High Court in Spencer v Commonwealth at 432 where Griffith CJ said:

In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring "What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?" It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. 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 to together.

68. This was amplified by Isaacs J who explained further (at 441):

To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. 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.

69. There is, however, no one method of valuation of land. Indeed, in the leading text on valuation law, Alan Hyam, The Law Affecting Valuation of Land in Australia (Federation Press: Sydney, 2014) 5th ed, chap 4, eight principal methods are identified, with other methods also noted in subsequent chapters relating to specific types of property. See also R O Rost and H G Collins, Land Valuation and Compensation in Australia (Aust Institute of Valuers: Sydney, 1984) ch 4 and R T M Whipple, Property Valuation and Analysis (Thomson, Lawbook Co: Sydney, 2006) 2nd ed, passim.

70. While some methods are more commonly used and some more appropriate to the valuation of certain property than others, the courts have indicated that there is no legal principle that requires any particular method to be rejected or to be preferred, as pointed out by Callinan J in Boland v Yates Property Corporation Pty Ltd (1999) 74 ALJR 209 at 267.

71. As Santow JA said, though in a dissenting judgment, in Port Stephens Shire Council v Tellamist Pty Ltd [2004] NSWCA 353 at [223]:

There is no one single method or technique which should be applied to the exclusion of all others though methods of valuation have come to form recognised categories.

72. Nevertheless, the most common method is what is known as the Comparable Sales Method (sometimes known as Direct Evidence Method, or described by Dr R T M Whipple as the Adjustment Grid Method). As the High Court said in Maurici v Chief Commissioner of State Revenue at 120; [16]:

The traditional, and usually unexceptionable method is to seek out relatively contemporaneous sales of comparable properties between parties at arm's length, unaffected by special circumstances, such as, for example, a strong desire by a purchaser to buy an adjoining property, and to use those sales as a yardstick for the valuation of the relevant land.

73. A good summary of this method was set out by Hope JA in Leichhardt Municipal Council v Seatainer Terminals Pty Ltd at 434-5 as follows:

Theoretically a comparable sale may be of the very land to be valued, as where, for example, a contract for its sale was entered into on the very day upon which it was to be valued. This would be a most unusual situation, but often evidence is available of sales of very similar land close in point of time to the date of valuation. However, probably more often, the lands the subject of the sales relied upon are in some way different from the land to be valued, giving the latter land a higher or lower value than that to be deduced from the sales. The times of the sales in relation to the date of valuation may also have to be considered in the light of general movements in land prices. The need to make adjustments to values deducted from sales in order to arrive at the true valuation of the land to be valued does not preclude the court which has the task of valuing the land from relying upon the sales as comparable in the relevant sense, nor from the making by the court or by valuers of adjustments which may be nothing more than the best guess that can be made ... Whether the differences between land a sale of which is to be relied upon and the land to be valued are so great that the land the subject of the sale cannot be regarded as comparable is a question of fact and degree. The difference may be so great that a court may be constrained to hold that the land is in no sense comparable, and that the adjustments which have been made are so great that the sale can provide no evidence of the value to be determined, and no basis upon which that value can be assessed.

74. The question of what sales are comparable is a question of fact as held in Yates Property Corporation Pty Ltd (in liquidation) v Darling Harbour Authority at 177-8. See also the cases there cited. Of course, if there is no evidence to support the finding or the finding was not reasonably possible or open on the evidence (Leichhardt Municipal Council v Seatainer Terminals Pty Ltd at 434) or the findings were otherwise vitiated by an error of principle (Melwood Units Pty Ltd v Commissioner of Main Roads at 432) then an error of law has been made. That error must vitiate the decision: Valuer-General v Perilya Broken Hill Ltd [2013] NSWCA 265 at [73].

75. In Commonwealth v Arklay [1952] HCA 76; (1952) 87 CLR 159 at 174-5, the High Court adopted the explanation of the Privy Council in Charan Das v Amir Khan (1920) LR 47 Ind App 255 at 264:

Now this Board will not interfere with any question of valuation unless it can be shown that some item has improperly been made the subject of valuation or excluded therefrom, or that there is some fundamental principle affecting the valuation which renders it unsound.

76. In this case, the valuers retained and called to give evidence before the ACAT by both the Appellant (Mr S Flannery) and the Respondent (Mr G McInerney and Mr T Svanberg) relied on comparable sales, though the Appellant's valuer also relied on the Hypothetical Development Method (see ground (c) below at [96]-[101]).

77. As is clear from what I have quoted from Hope JA, adjustments will nearly always have to be made to the evidence of other sales (above at [73]) there will rarely be a precise comparability. It is as to the adjustment here made that this ground is directed.

78. As indicated above (at [74]), the decision as to which sales are comparable is a question of fact; so also, it would appear, is the decision of what adjustments are to be made. In Leichhardt Council v Roads & Traffic Authority (NSW) [2006] NSWCA 353; (2006) 149 LGERA 439 at 454; [83], Spigelman CJ, with whom Beazley, Bryson and Basten JJA and Campbell J agreed, said of the Land and Environment Court (which may be said, in the circumstances, to have some, though not complete, similarity to the expertise expected of the ACAT):

[The Land and Environment Court] is not a jurisdiction in which a judicial valuer is obliged to act only on the basis of evidence adduced by expert valuers who appear as witnesses. A judge of [that] Court is perfectly entitled to reject the whole of the expert evidence and, drawing on the experience of the Court, to do as best [he or she] can to identify an appropriate level of discount or, relevantly, an appropriate quantum of adjustment to the comparable sales figure ...

79. In this case, the Respondent's valuer identified, inter alia, two sales, referred to as Sale 1 and Sale 2 (terminology it is convenient that I follow), as comparable, though to which adjustments still had to be made. They were used as comparable sales for determining both the Before Value and the After Value.

80. Since s 277 of the Planning Act requires that the capital sum to be determined under that section must, for the Before Value, be determined on the assumption that the lease will not be varied during its currency, the not unreasonable likelihood that the actual purchaser of a comparable property may see value in a possible future variation which that purchaser can, of course, seek to have made and so pay more to purchase the property, may well require in appropriate cases an adjustment to be made for such additional value to ensure comparability with the subject land.

81. In the case of Sale 1 and Sale 2, the ACAT discounted the sale price by 5% to account for this claimed extra value.

82. The Appellant submitted that to do so was fallacious and irrational in this case. To justify this claim, the Appellant submitted that:

(i) there was, when a lease is varied, no necessary increase in value, a proposition acknowledged by the legislation in s 277(3) of the Planning Act which contemplates that there may be no increase;

(ii) the ACAT erred in assuming that there was an increase in value in Sale 1 and Sale 2;

(iii) there was no evidence to support that assumption; and

(iv) there was no rational basis for the application of the discount.

83. Were this to be the position, I accept that there would have been an error of law that the ground correctly identified. Mr R Arthur, appearing for the Appellant, summarised his argument in his Summary of Argument as follows:

In a case in which both vendor and purchaser give (genuine) evidence [I interpolate - not the case here] to the effect that their estimates of the before and after values were the same, a reliable adjustment of the sale price for comparative purposes may be possible. Short of that, however, the size of the increase, if any, is imponderable and any adjustment is completely arbitrary and rests on the unfounded assumption that there is an increase in value - it has an essentially different character from that of the educated guess that is sometimes required. (footnote omitted)

84. As Mr W Sharwood, who appeared for the Respondent, pointed out, there was evidence from which the ACAT could properly draw the inference that there was such an increased value seen by the purchaser. The Respondent's valuer had obtained information from the actual purchasers in both Sale 1 and Sale 2 that they had, in the case of Sale 1, "bought [the property] for redevelopment purposes" and, in the case of Sale 2, "was aware that the lease [of the purchased property] might prevent redevelopment for some time, but they hoped to get around that because in similar situations, the lease had been broken". Indeed, one had actually commenced building. See City Hill Pty Ltd v ACT Planning and Land Authority at [16], [22], [134].

85. Indeed, Mr Arthur accepted this in his submission, where he said:

The Tribunal had accepted evidence that the purchasers in Sales 1 and 2 were purchasing for redevelopment after varying the lease to include residential use. The Tribunal (rightly) recognised that the purchasers would thus have been paying something additional to the present value of the lease reflecting that potential, and that the sales would not be comparable unless the price paid was adjusted to eliminate the additional element. The Tribunal deducted 5% accordingly.

86. This left only the amount of the increase, which, in the submissions from which I have quoted above (at [83]), Mr Arthur submitted was arbitrary, the alleged unfounded assumption having been answered by the evidence from which a reasonable inference could be drawn.

87. The amount of the adjustment, the discount, seems to me to fall squarely within the principle in Leichhardt Council v Roads & Traffic Authority (NSW) cited above (at [78]). The only issue that could be argued is that, since the approaches of the purchasers in the sales were different, one being less sure than the other about the intention, timing and possibility of development, the application of an identical discount may seem strange. Any error made by the ACAT seems to me to be an error of fact and not of law.

88. The nature of valuation, though aiming at finding a fact, namely the value of land, is notoriously a matter of discretion, perhaps even conjecture. Isaacs J in Spencer v Commonwealth at 442-3 quoted with approval the following passage from the decision 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.

89. It must, of course, be rational; to be irrational is an error of law. To apply a discount is rational; to apply the same discount is not irrational but probably factually wrong. This, however, absent error of principle, is a decision entrusted to the ACAT.

90. In my view, the suggested ground of appeal does not arise and, insofar as it refers to an issue in the proceedings, it is a question of fact and not of law. As articulated, the ground is said to be an error of law, but as explained and related to the evidence it is not. I am, here, probably going further than the appeal strictly requires and entering the realm of the leave application.

91. I must say, however, that the application of the same discount to two sales where there were, on the ACAT's own account, relevant differences in the attitude of the purchasers to future development, does seem to me, without further argument, to have been an error, but an error of fact.

(b) Was the Tribunal required to take into account the evidence afforded by the hypothetical feasibility development studies in the absence of a finding by the Tribunal that the particular evidence before it was unreliable?

92. This question appears to re-state in interrogative form ground (c) of the draft Notice of Appeal.

93. Both parties produced at the hearing before the ACAT an alternate valuation for the After Value prepared under the Hypothetical Development Method. That for the Appellant was prepared by its expert valuer; that for the Respondent was prepared by a second valuer who had not prepared the valuation based on the Comparable Sales Method.

94. The ACAT described the valuations in some brief detail: City Hill Pty Ltd v ACT Planning and Land Authority at [114]-[116]. At [147]-[149], the ACAT then expressed its conclusions about them:

1. A great deal of evidence and much examination and cross examination was devoted to these studies and the inputs that had been used to undertake them, but the Tribunal considers them to be of little assistance in arriving at its conclusions. The hypothetical development feasibility method is said to be widely used by valuers, in particular, when developers are seeking finance from banks and other lending institutions, but it is normally used only when there are no comparable sales data available (Hyam, p 188).
2. While its use in some cases has been endorsed, including by the High Court, it has been criticised by Courts and Tribunals because it applies an apparently scientific formula to a great number of subjectively established variables and small variations to these variables can have a very great impact on the result (Roper J, in Closer Settlement Ltd v The Minister (1942) 17 LGR 62 at 252). The changes that were made to Mr Svanberg's analysis as a result of relatively small changes in various inputs are evidence of this.
3. We do not propose to give these studies any further consideration as we do have adequate, if not ideal, comparable sales to consider.

95. There appear to be three reasons expressed by the ACAT for not considering the valuations arrived at under this method as follows:

(i) it is a misleading method, because of its apparent objectivity while relying on a great number of subjective variables;

(ii) there were satisfactory comparable sales so it was not necessary to rely on it and it should only be used where there are no comparable sales; and

(iii) changes made to the date during the hearing and, despite the two valuers using the same data, different results were obtained.

96. There is no doubt that the Hypothetical Development Method has been the subject of critical comment in the authorities. Thus, Cripps J said of it in Gwynvill Properties Pty Ltd v Commissioner for Main Roads (1983) 50 LGRA 322 at 326:

The hypothetical development method is normally suspect because it depends on a number of assumptions and a number of estimates, e.g. cost of building, estimated gross rentals obtainable, probably outgoings and, most significantly, the rate percentum of return which could be expected and the profit and risk factor expressed in percentage terms. It has been said that because many estimates and assumptions must be made, the hypothetical development method ought not be used where some use can be made of a comparable sale.

97. Nevertheless, his Honour in that case did rely on it and, despite taking into account the Comparable Sales Method used by the Defendant's valuer, preferred it because of the identified and described weaknesses of the comparable sale (at 325).

98. The criticism in the first sentence of [148] in the ACAT's decision quoted above (at [94]) comes from the comment by Byrne J in 15 Lorimer Street Pty Ltd v Secretary of the Department of Infrastructure (1997) 97 LGERA 239 at 252. His Honour, however, went on to say (at 253):

One feature which runs through these warnings is the danger of applying the approach where the hypothetical development is not to be carried out within a reasonably short time: see Cienda Pty Ltd v SA Urban Land Trust (1988) 66 LGRA 360 at 363, per Jacobs J (King CJ and Bollen J concurring) (SA). It is for this reason that the approach is considered inappropriate when the subject land is not ripe for subdivision or development. Ripeness in this context, however, is a matter of degree and this restriction upon the approach is not to be applied in any mechanical way. What is in question is whether the value of the approach is so diminished by the uncertainties involved in the use of current estimates to future conditions that it lacks utility: see Coastal Estates v Bass Shire Council (at 576-577), per Gobbo J. I have no doubt that in the present case the hypothetical development approach to valuing the subject land is of no assistance where the development is to take place in 2004, 10 years after the relevant date.

99. In this case, of course, the development of the subject property was to be constructed on the subject land and apparently in the near future - though events have conspired to prevent that. Thus, the purchaser is likely to have prepared - and, indeed, did prepare - a proposed development, which would be a very relevant factor in assessing value.

100. The Hypothetical Development Method was used by the High Court in Turner v Minister for Public Instruction [1956] HCA 7; (1956) 95 CLR 245. In Boland v Yates Property Corporation Pty Ltd at 266-9; [276]-[289], Callinan J explained in some detail the importance and validity of it. Indeed, at 269; [281], his Honour pointed to its peculiar appropriateness in the case of city development cases, of which this case is one.

101. I also note the point made by Dixon CJ in Turner v Minister for Public Instruction at 268:

The formula, the use of which apparently has become so familiar in valuing land suitable for sub-division, contains a number of factors all of which seem to depend on little or nothing more than opinion and it may be supposed that widely different results may be produced by variations in detail, though no given variation may itself seem considerable. It would appear natural therefore for a judicial valuer to seek to check his result by reference to as many sources of information and inference as may be found, even if he might consider that they would not provide him, had they stood alone, with a satisfactory independent basis for an ultimate conclusion.

102. This is relevant in this case, for the sales said to be most comparable, namely those I earlier noted as Sale 1 and Sale 2, had a significant number of dissimilarities with the subject land. These included: further from the Central Business District of Canberra, purchased by an adjoining owner, inferior purpose clauses, superior rental return, different block sizes, the dates of sales were distant from the relevant date for valuation of the subject property.

103. While a number of these are common differences, which valuers regularly take into account, each difference introduces an element of inference, discretion, opinion, perhaps conjecture. For the reasons enunciated by Dixon CJ, the consideration of other methods to assist in narrowing such elements is highly desirable.

104. To reject consideration of the Hypothetical Development Method because of a preconceived perception that it had been criticised by the courts and so should be rejected out of hand is to fail to take into account a relevant consideration, namely, a proper method of valuation which needed to be considered and only rejected, if it was to be rejected, on proper grounds, not summarily as the ACAT had done.

105. Accordingly, it seems to me that the question of whether the ACAT erred in refusing to take into account the Hypothetical Development Method used by valuers for both parties for the reasons it gave was a question of law.

106. As the value provided by this Method by both valuers (though they gave different values, some $500,000 apart), was significantly below the value arrived at by the Comparable Sales Method, it was an issue which, if the question formulated by the Appellant were to be answered in its favour, had the capacity to affect the outcome in the Appellant's favour.

107. In rejecting the ground which encompassed this question as not being a question of law, the Master erred.

(c) Should the Tribunal have given Mr Flannery (and the Appellant) an opportunity to be heard before it made the finding that Mr Flannery should have applied the area of 1037m2 and not 1195m2 when analysing the sale of 5-7 Torrens Street?

(d) In respect of the Tribunal's finding that Mr Flannery, when analysing the sale of 5-7 Torrens Street, adopted a high value for parking spaces

(i) Was there any evidence on which the Tribunal could make that finding?

(ii) Should the Tribunal have given Mr Flannery (and the Appellant) an opportunity to be heard before it made that finding?

(f) Should the Tribunal have given Mr Flannery (and the Appellant) an opportunity to be heard before it made the finding that Mr Flannery had miscalculated when capitalising the passing rent?

108. It is convenient to consider these three grounds together for they each raise the same issue (other than (d)(i), which I will deal with separately), namely of whether errors or differences from the evidence of an expert said to have been found by the ACAT after the decision had been reserved, should have been brought to the attention of the expert for appropriate comment.

109. There is no doubt that it is an error of law if material evidence is rejected, unless its rejection could not have affected the outcome of the proceedings. See Balenzuela v De Gail [1959] HCA 1; (1959) 101 CLR 226 at 232, 238, 239, 242. This is clearly part of the fair trial principle articulated by the English Court of Appeal in Jones v National Coal Board [1957] EWCA Civ 3; [1957] 2 QB 55 at 67.

110. Part of the fairness is that the rules of natural justice should apply to the trial and a breach will irretrievably compromise its fairness, unless the failure could have made no difference to the outcome of the trial.

111. Thus, where a court stopped counsel addressing it as to the acceptability of some evidence on the basis that the evidence should be rejected in any event and then relied on that evidence in its decision, the High Court held in Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141 that there had been a denial of natural justice. This principle has been extended so that where a court takes into account its observations of the conduct of a party but without drawing that to the attention of the parties, the fairness of the trial may have been compromised as in Kassem v Crossley [2000] NSWCA 276; (2001) 32 MVR 179. The Court there approved the expression of the rule - though not an absolute rule - in Minagall v Ayres [1966] SASR 151 at 156:

The condition upon which a judge is at liberty to take notice of what he has seen for himself is that the parties should know or be informed of what he has noticed, and have an opportunity of answering or dealing with it.

112. See, more recently, Ucar v Nylex Industrial Products Ltd [2007] VSCA 181; (2007) 17 VR 492 at 514-21; [59]- [80] to the same effect.

113. There is also no doubt that a failure to afford a party procedural fairness will constitute an error of law and be an available ground of appeal: Goldie v Minister for Immigration and Multicultural Affairs 1999 FCA 1277; (1999) 56 ALD 321 at 331; [44]; Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc [2014] NSWCA 105; (2014) 200 LGERA 375 at 383; [5].

114. Another aspect of the procedural fairness, that must be accorded to the parties at trial to that to which I have already referred, is that the court must not decide an issue in the trial on the basis of a matter that was not in issue or argued in the proceedings. This principle was set out in Muir v Refugee Review Tribunal [2002] HCA 30; (2002) 76 ALJR 966 at 969-92; [123]- [139]. It has been followed a number of times since. See Baker v University of Ballarat (2005) 225 ALR 218 at 237-8; [41]-[43]; Grocon Constructions Pty Ltd v Planit Cocciardi Joint Venture (No 2) [2009] VSC 426; (2009) 26 VR 172 at 208; [134]; Warkworth Mining Ltd v Bulga Milbrodale Progress Association Inc at 392; [39].

115. In Musico v Davenport [2003] NSWSC 977 at [59], McDougall J, after referring to the comments of McHugh J in Muir v Refugee Review Tribunal said of the process to be adopted by an adjudicator under the Building and Construction Industry (Security of Payment) Act 1999 (NSW):

Where, after considering an adjudication application and an adjudication response, an adjudicator comes to the view that there was some matter, not traversed in them, that might cause him or her to deal with the application in a manner adverse to one or other party, the principle enunciated by McHugh J would ordinarily require that the adjudicator request further written submissions and comments thereon. But whether or not this principle is enlivened in a particular case must, necessarily, depend on an analysis of the 'matter', and of its significance to the determination ultimately made by the adjudicator.

116. Reference should also be made to Simmonds v Spooner (Unreported, New South Wales Court of Appeal, Kirby P, Cole JA and Rolfe AJA, CA 40738 of 1990, 28 March 1995) where the Court held that the Judge's reliance on an affidavit that had not been read (and, therefore, was not in evidence) resulted in a breach of the rules of natural justice.

117. It seems to me that the three questions I am considering are all questions of law. To the extent that the Master found otherwise, I consider he was in error.

118. There is no doubt that, for the purposes of a grant of leave, which I am not considering, the court must decide whether the answer to the question will have a relevantly significant effect on the outcome of the proceedings. This may well require consideration of the evidence. For example, the evidence of Mr Flannery may well need to be scrutinised to see whether there is an arguable case as to whether his evidence was challenged in a way that would render the question of law unarguable. I note that, of course, it was the Appellant that was entitled to natural justice to ensure a fair hearing, not Mr Flannery. I am, however, satisfied that there are questions of law that are arguable on these grounds.

119. Finally, question (d)(i) is not a question as to whether the Appellant was afforded natural justice. It is, instead, what I have called above (at [51]) a "no evidence ground". For the reasons there stated, I accept that this, too, is a question of law.

(e) Was the process by which the Tribunal adopted $1400.00 as the overall rate for the commercial component of the 'after value' of the subject lease an accepted method for the Tribunal to satisfy itself of that fact?

120. This question does not relate to any ground in the draft Notice of Appeal. It relates to the valuation of the commercial component of the proposed development of the subject property after the lease variation for determination of the After Value.

121. The ACAT considered the evidence of the valuers called by both parties and analysed the comparable sales on which they relied for the determination of the value of the commercial component.

122. Mr McInerney relied on Sale 1 and Sale 2 which he suggested showed a value of $1,691/m2 and $1,681/m2 respectively for the maximum gross floor area, thus supporting for the subject property a value of $1,700/m2 for its maximum gross floor area.

123. Mr Flannery's comparable sales analysis resulted in a value of $1,000/m2, though an earlier analysis by his company had shown a value of $1,317/m2. As the result of what it held to be a mistake (the subject of question (c)), the ACAT recalculated this to be $1,200/m2 for the maximum gross floor area.

124. Other analyses showed values of $1,482/m2 and $1,506/m2 but the ACAT expressed some reservations about these values.

125. For reasons that are not entirely transparent, the ACAT then decided to find that the "overall rate for the commercial component ... would fall somewhere between $1,300 and $1,500/m2 GFA". The ACAT then adopted $1,400/m2.

126. The Appellant submitted that this constituted improper reasoning. This is somewhat ironic since the Appellant's counsel had earlier submitted that, in relation to the values calculated in the Before Value at $4,265,000 (Respondent) and $4,050,000 (Appellant), the ACAT should establish a value "at the middle of the range", the error said to have been here committed.

127. Nevertheless, that is not the issue before me, which is to decide whether the question formulated is a question of law.

128. Mr Arthur submitted that merely to average between rival valuations (if that is what the ACAT was really doing, as neither figure was one that either valuer appears to have found) was an error. He relied on what Dixon CJ and Kitto J had said in Commonwealth v Milledge [1953] HCA 6; (1953) 90 CLR 157, at 160-2 where their Honours said:

The learned judge formed a confident opinion that all six of these valuers were men of experience and integrity, and he drew no distinction amongst them in regard to soundness of judgment or otherwise. Since they differed so widely, not only in result but in approach and in choice of material, the task presented to a judge to whom they all seemed equally reliable was one which could not be satisfactorily performed in any other way than by making a critical selection of the most helpful facts from the mass of information provided by the evidence, and applying correct principles in the light of the selected material. Unfortunately it does not appear from the judgment which his Honour delivered that he dealt with the matter in this way. He did not make any choice amongst the proved sales of other lands for the purpose of finding a basis for any reasoning of his own. Indeed he expressed the view, although he does not seem to have acted upon it, that the true basis for computation is not that to be found in one comparable sale, but in the average of a number, the larger the number the more acceptable the result. 'Such a statistical average', he added, 'will tend to eliminate the effect of the individual peculiarities (if any) of those in the transactions'. We do not find it possible to give countenance to this view. Perhaps it would be safer to work from an average of several prices than from one price if the sales were substantially contemporaneous sales of parcels of land which were identical in all material respects, but it must be rarely, if ever, that a process of averaging sale prices can be anything but fallacious ... But what is worse is that it would it [a figure arrived at by averaging] would be a figure not arrived at by the application by the court of the established principles of valuation ... It is no answer to say ... that the question was essentially a jury question and was so treated by his Honour. It was indeed a jury question, in the sense that it was to be decided, not by a strict adherence to precise arithmetical calculations, but by a commonsense endeavour, after consideration of all the material before the court, to fix a sum satisfactory to the mind of the court as representing the value contained in the land on 1st January 1946. But to say that the question was a jury question is not to say that it admitted of solution by accepting the opinions of all the experts as equally reliable and going through a process capable of being described as giving group consequence to the totality. The problem was not to eliminate the idiosyncracies of the individual opinions; it was to form an estimate which really satisfied his Honour's mind as being the value of the property to the plaintiff on the material date. [Emphasis added.]

129. Williams J had earlier said in Daandine Pastoral Co Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299 where his Honour had said, pithily "[t]his method of averaging is unsound", a comment his Honour re-affirmed in McCathie v Federal Commissioner of Taxation [1944] HCA 9; (1944) 69 CLR 1 at 15.

130. In Cordelia Holdings Pty Ltd v Newkey Investments Pty Ltd [2004] FCAFC 48 at [109] the Court described that:

[Commonwealth v Milledge] stands as authority for the proposition that it must rarely, if ever, be other than 'fallacious' to engage in a process of averaging. Secondly, the joint judgment makes it clear that a judge who has to decide an issue about value must proceed according to established principles. Bearing in mind that valuation is an area of specialist expertise, the need to proceed according to established principles can hardly be a matter of controversy.

131. There is no doubt that averaging is an inappropriate method of valuation. While afflicted by the uncertainties to which I have already referred, valuation is a matter of determining a fact and it is important that valuers, including administrative valuers (as the ACAT is) and judicial valuers, use principle and rationality, though inevitably opinion and estimate will often play a prominent part.

132. While the difference between $1,300/m2, $1,400/m2 and $1,500/m2 does not appear much when so stated, it only needs to be multiplied by the size of the maximum gross floor area of the subject property to show a difference of between $225,000 and $837,000, depending on the choices made.

133. The Appellant is entitled to know, as clearly as can be explained, why a particular value is chosen. For example, the subject property may be more or less comparable to the property for which one value or another is chosen and so on.

134. Thus, a choice of such a value should not merely be an average but based on some rational valuation principle.

135. To proceed in the way suggested amounts to proceeding on a wrong principle and, therefore, to constitute an error of law.

136. I am satisfied that the question is a question of law.

(i) In finding that Mr Dunstone had proposed a form of development (as opposed to depicting the form of development proposed by Mr McInerney for the Respondent), did the Tribunal take into account an irrelevant consideration and fail to take into account a relevant consideration?

137. I have "numbered" this question in the way it appears in the affidavit of the Appellant's solicitor, but it seems to me that it was not a "sub-paragraph" of question (f). See above (at [24]). Both counsel addressed it as a separate question. It does not relate to any of the grounds in the draft Notice of Appeal.

138. I did not really understand the issue here. Part of that may be because the nature of Mr Dunstone's development was not clear from the reasons of the ACAT. Nevertheless, Mr Sharwood also indicated perplexity; his written submissions stated:

The Respondent does not yet understand this point; [sic] and wishes to reserve its position in relation to it.

139. I was not addressed on the point by Mr Arthur and, perhaps therefore, by Mr Sharwood. I assumed initially that this meant that the point was abandoned. The following exchange then took place:

HIS HONOUR: Well, sorry, you're abandoning (d) and (e)?

MR ARTHUR: No, your Honour. No. Mr Sharwood and I were in agreement that if your Honour was to find that we have raised one question of law.

HIS HONOUR: Yes.

MR ARTHUR: Irrespective of the merits behind that question, whether it's going to be successful or not, we've got through the test that we were set before the Master.

HIS HONOUR: Well, except that I should - I mean, if I find that there is a ground that is not an error of law I should not permit you to have leave to raise that ground.

MR ARTHUR: Well, your Honour, the only question before your Honour is whether there is a question of law. Leave is not yet on the agenda, as I was seeking to explain this morning.

140. Mr Sharwood did not demur from these submissions and I assume the agreement is accurately described.

141. In hindsight, I acceded to this approach too readily. I accept that the Master was only dealing with a preliminary question of whether a question of law had been raised by the Appellant. That is, of course, one of the matters that is required to be considered on the hearing for leave as I have noted above (at [31]). It can, however, be conveniently considered as a preliminary point, for, if there is no question of law, there can in no case be leave. Other considerations are perhaps either of a more discretionary kind or require a balancing of interests. The identification of a question of law goes to jurisdiction.

142. Perhaps all I need to say is that the question would need some more consideration. There is authority that a failure to take account of relevant considerations is an error of law. See Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179; Ballantyne v Workcover Authority of New South Wales [2007] NSWCA 239; (2007) 5 DDCR 97 at 126; [113]. Similarly, in Commissioner of Taxation v Trail Bros Steel & Plastics Pty Ltd [2009] FCA 1210; (2009) 113 ALD 254 at 265; [42] Greenwood J held that taking into account an irrelevant consideration is an error of law. For recent decisions to this effect, see Tulloh v Prisoners Review Board [2014] WASC 239, Burns v Grint [2014] FAMCAFC 48 and Borcherdt v Commissioner of Taxation [2014] FCA 56. It is also consistent with the approach taken by Burns J in B & T Constructions (ACT) Pty Ltd v Construction Occupation Registrar [2013] ACTSC 219.

143. I mention these cases only because of the observation of the Full Court of the Federal Court of Australia in Comcare v Etheridge at 530 which suggests that these grounds are not amenable to review as errors of law but only under judicial review legislation. That approach was recently applied in Australia Postal Corporation v Sellick [2008] FCA 236; (2008) 245 ALR 561.

144. I am, however, satisfied that a failure to take account of relevant considerations or the taking into account of irrelevant considerations is an error of law.

145. What is important to note, however, is the strict meaning given to the phrase "relevant considerations" and "irrelevant considerations". This is located in what was said first by Deane J in Sean Investments Pty Ltd v MacKellar [1981] FCA 191; (1981) 38 ALR 363 at 375 and endorsed by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 62 CLR 24 at 39. These approaches, however, restated earlier High Court consideration, such as in Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21; (1947) 74 CLR 492 at 505. It was held, and has been followed thereafter, that a consideration is a relevant consideration only if the decision-maker is bound to take it into consideration. The same reasoning led to an irrelevant consideration being one that the decision-maker is forbidden to take into account. These issues are not limited to being identified from express statutory provision and a more expansive view needs to be taken of where the obligation is to be found as pointed out by Gleeson CJ in Neat Domestic Trading Pty Ltd v AWB Ltd [2003] HCA 35; (2003) 216 CLR 277 at 288; [20].

146. There are, however, limits on the obligation to take into account relevant considerations. One is materiality as pointed out in Buzzacott v Minister for Sustainability; Environment, Water, Population and Communities [2013] FCAFC 111 at [127].

147. Another is the distinction between taking into account relevant considerations and taking into account particular pieces of evidence, a point noted by R D Nicholson J in Walsh v Department of Employment, Education, Training and Youth Affairs (1998) 51 ALD 690 at 694. See also the decision of the Full Court of the Federal Court of Australia in Li Shi Ping v Minister for Immigration, Local Government and Ethnic Affairs [1994] FCA 1512; (1994) 35 ALD 225 at 237.

148. It is not clear to me that this question refers to what, in terms of judicial review, can properly be described as relevant or irrelevant considerations which are material and which are not simply particular pieces of evidence.

149. Nevertheless, regrettably, I do not have the material before me to be able to make a finding on this issue. It will have to be considered in the context of the hearing of the application for leave.

150. I am satisfied that the questions posed by the Appellant are, with the exception of question (a) and, subject to further submissions, the last question (numbered (i) but probably (g)) questions of law. Accordingly, the decision of the Master must be set aside. The application for leave must be heard. I shall hear submissions about that.

151. It seems to me that the Appellant has been not only successful in the terms in which it has sought to challenge the decision of the Master, as agreed by the Respondent as noted above (at [25]) but also has been substantially successful in sustaining its proposed questions of law.

152. In these circumstances, I provisionally propose that the appropriate order for costs is that the Respondent pay the Appellant's costs, but I will hear the parties.

153. These proceedings are not the finest example of how disputes should be settled in the Courts and Tribunals of the Territory. I regret that I have contributed to some extent to this.

154. The decision of the Respondent to vary the lease was made on 20 August 2009. The change of use change was only notified to the Appellant on 24 December 2010. I do not know whether that is a usual time, but it does seem a lengthy period between the two decisions.

155. The Appellant then had 28 days to seek reasons for the latter decision (s 22B(1)(b) of the ACAT Act). It had 28 days from the decision in which to apply for a review of the decision (s 10(2) of the ACAT Act) though that period could be extended (r 7 of the ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2) (ACT).

156. I have not been favoured with the date on which the application was made and do not know whether an application for an extension of time was made or granted. Otherwise, the application should have been made on or before 21 January 2011.

157. Section 22P of the ACAT Act requires applications under the Planning Act to be decided within 120 days after the application is made. That date would be 21 May 2010.

158. I have not been told when the hearing was conducted, but the decision of the ACAT was delivered on 16 December 2011. I am aware of the pressure of business on the ACAT. This may account for the time taken.

159. The application for leave to appeal was made to the Court on 20 January 2012. The Master heard the application on 24 February 2012. His Honour delivered his reasons on 13 June 2013. Again, I am aware of the pressure of business in this Court.

160. The appeal against the decision of the Master was filed on 20 June 2013. The appeal, however, was not able to be heard until 7 November 2013, again because of the pressure of business in this Court, I have now delivered my decision and it has taken longer than I would have liked but, as can be seen, there were some complexities in the issues to be decided and this Court continues to be a busy one under pressure.

161. The decision I have made, however, has been only a small start to the consideration of the review of the decision of the ACAT. It has simply decided that there are questions of law that can be considered by this Court if leave is granted. Following my decision there is the possibility (assuming my decision is not subject of appeal to the Court of Appeal) of two further hearings and delay - one to decide whether leave should be granted and one to decide whether, if leave is granted, the review should be upheld and the decision of the ACAT set aside or the review should be dismissed. If the review is upheld, the most likely decision will be to refer the matter back to the ACAT for a rehearing. All these steps will take time and costs.

162. I have set out in Capital Property Projects (ACT) Pty Ltd v Planning and Land Authority (ACT) (2008) 2 ACTLR 44 at 51; [23]-[24] the rationale for a requirement for leave from interlocutory decisions. Some of the reasons there set out are relevant to a grant of leave for appeal against a decision of the ACAT.

163. It seems to me that leave is required to ensure that there is a question, and in appropriate circumstances, a question of law to be considered. It is also provided to filter out vexatious, hopeless or otherwise unmeritorious appeals did not take up the time and resources of this court: cf Derring Land Pty Ltd v Port Phillip Council [1998] VSC 182 at [9].

164. These are important and worthwhile considerations. They have, however, led to extended hearings and the need to give reasons as required by the High Court in Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue of Victoria [2001] HCA 49; (2001) 207 CLR 72 at 83; [26].

165. This often requires the Court to deal with issues of some complexity and brings inevitable delay, as this matter shows. See also John Flynn Community Group Inc v ACT Heritage Council.

166. In order to attempt a speedier and cheaper resolution of some of these issues (as required by r 21 of the Court Procedures Rules), I suggest that parties give careful thought to ways in which the process could be improved.

167. There is one obvious possibility, where both parties are represented (or, possibly, where the Respondent to the application for leave to appeal is represented); If the Respondent is satisfied that there is a question (or questions) of law properly articulated by the Appellant, that the questions are reasonably arguable and that the real issue is whether the questions are sufficiently arguable and likely, if answered in favour of the Appellant, to affect the decision of the ACAT, that is there are no other issues on the appeal of the kind to which I referred in Faull at 76-7; [83]-[89], then the parties could well so submit and indicate to the Court that it would be appropriate for the application for leave to be heard with the appeal. The Court could, at such a hearing, still refuse leave, but with full knowledge of the strength of the respective cases of the parties and, if leave is granted, deal with the appeal instanter.

168. To hear the application for leave with the appeal is a common order in a number of courts throughout Australia in appropriate cases. I have used it on occasion. See Fairfax Media Publications Pty Ltd v Cummings [2012] ACTCA 36; (2012) 269 FLR 182. In some courts, such an order may be made by the Registrar: News Digital Media Pty Ltd v Mokbel [2010] VSCA 51; (2010) 30 VR 248 at 254; [15]. Applications for leave to appeal from decisions of the Victorian Civil and Administrative Tribunal have been heard in this way: Melbourne Water Corporation v Domus Design Pty Ltd [2007] VSC 114; (2007) 16 VR 539 at 542; [10].

169. It is a matter that the parties in this matter may well consider and, if they so submit, no doubt the Court, conscious of the purposes that the provision for leave is designed to achieve, but having regard to r 21 of the Court Procedures Rules may, in its discretion, be prepared to adopt.

170. As a result, I shall order that the appeal be upheld but otherwise hear the parties as to other orders that should be made, including consequential orders and costs.

I certify that the preceding one hundred and seventy [170] numbered paragraphs are a true copy of the Judgment of his Honour Justice Refshauge.