By adopting the piecemeal approach and the before and after method to determine the value of the land taken, severance damage and any enhancement of value are comprehended without any necessity for specification... Where improvements, such as the dairy, are fixtures, they form part of the land and any increase or decrease in the value of those fixtures can be taken into account pursuant to s 55(f) or if they need to be replaced or modified, the costs might be recovered as a loss attributable to disturbance pursuant to s 59(c) or (f).
The market value of the actual land taken can be satisfactorily determined by contrasting the value of the pre-existing 100 hectares of highly improved pasture land to the remaining two parcels after resumption. The before value can be ascertained by reference to sales of comparable land after making an adjustment for the cost of bringing the sale land up to the same level of productivity. Following resumption, the same sales provide sufficient evidence to establish the value of the two severed sections. The western section can be maintained at the same level of productivity as before whereas the eastern section will revert to good quality pasture which is not maintained at the highest level of improvement. A further allowance for the proximity of the new raised section of roadway is permissible under s 55(f).
Apart from fencing, which is accounted for in the actual land value, there is no reason why the Court should not determine any change in value to other farm improvements, including total losses, to reflect part of the increase or decrease in the value of other land pursuant to s 55(f). In this respect the Court is satisfied by the evidence that it will not be practicable to maintain a dairy at the existing location. Accordingly the land will suffer a decrease in value equivalent to replacing the milking bails and associated facilities, after making due allowance for the residual value of what is there now. Without a functioning dairy in close proximity to the pasture land used for the milking herd, there would be no justification for attributing the higher value to those lands in the after situation. Alternatively the cost of a replacement dairy can be addressed as an element of the loss attributable to disturbance."
(b) The effect, if any, of the operation of the Deed for present purposes
(i) The general position
Although, as has been said, the general principles governing the present statutory entitlement appear to be well understood, their application depends upon the particular circumstances of the case and that exercise can be complex and difficult. No doubt, it was in this context, as well as in the context of the resolution of the dispute about the PAD, and its variations, that the Deed was entered into.
A question arises at the outset as to the legal efficacy of the Deed for present purposes, but before going to that issue, it should be noted that there is a further preliminary question to be considered and that is, whether the hearing before Wilcox J. and the appeal to this Full Court should be treated as final for instant purposes or as merely interlocutory. In form, these proceedings were interlocutory. But, as a matter of substance, it may be appropriate to conclude that they be treated as if they were final, notwithstanding, as appears to be the case, that his Honour made no formal orders by way of answer to the separate questions posed (cf. Arrowcrest Group Pty Ltd v Gill (1993) 46 FCR 90 per French J. at 98-101). I will return to this aspect.
In considering the legal efficacy of the Deed, it may be observed that circumstances can arise where, in the course of negotiations seeking to achieve a compromise of a claim for compensation, the resuming authority makes an admission against interest. There are other possibilities in this connection, for instance, the creation of estoppels short of entry into a formal contract.
It is, without question, the policy of the common law to encourage the compromise of any doubtful claim on mutually satisfactory terms, without litigating to the finish (see Field v Commissioner for Railways (NSW) (1957) 99 CLR 285 at 291; Cutts v Head [1984] Ch.290 per Oliver LJ. at 306; Rush & Tomkins Ltd v Greater London Council [1989] 1 AC 1280 at 1299; Trade Practices Commission v Arnott's Ltd (1989) 88 ALR 69 at 71). Compensation claims are a good example of an area where the courts should be particularly concerned to promote compromise by the parties of the whole, or even of discrete parts, of a claim wherever this is appropriate. But, as the history of this litigation shows, where a claim, as here, is complex, the parties must take care to ensure that each of them fully understands the other's position. Regrettably this did not happen here. Although the parties were to be commended for finally resolving their dispute about the size of the acquisition, their attempt to define in the Deed the parameters of the compensation claim was not expressed with sufficient clarity, with the result, as we have seen, that the parties now appear to hold quite different views as to the meaning of the material provisions of the Deed.
If, as was pointed out by the Court in argument, instead of formal entry into the Deed, the parties had sought to tender a joint admission in this area and if, as here, it were to emerge that the admission was not reasonably clear or ambiguous, the Court would, generally speaking, not act on the admission, which is never conclusive, and merely some of the evidence in the case; even a formal admission may, with the leave of the court, be retracted (see J D Heydon, Cross on Evidence, 5th Aust. ed. at 143-4). Ordinarily, leave would be granted to withdraw an ambiguous admission.
Counsel's researches did not reveal any authority squarely on the present point, although our attention was drawn to, and mention should be made of, some helpful observations by Gobbo J. in King v Minister for Planning & Housing (1991) 76 LGRA 288. There, in the process of negotiations for the purchase by the Board of Works of reserved land, the parties agreed to abide by the specified plans for hypothetical development in the event of the private sale going ahead. No agreement was reached and a notice of intention to acquire compulsorily was given. Compensation was subsequently sought.
It was held: (1) the agreement in respect of the plans for hypothetical development was, in effect, an agreement in the process of negotiations to use the plans in agreeing to a price if a purchase were to take place; but there could not be implied into that agreement a term that if no purchase took place and there was a compulsory acquisition, the plans would be used in the assessment of compensation; and (2) in so far as the acceptance of the plans impliedly recognised that they represented the highest and best use of the land at the time they were drawn up, it constituted an informal admission against interest and was admissible in evidence on the compensation claim in a limited role as part of the evidence relevant to reaching a decision on the highest and best use at the time of the notice to treat.
Gobbo J. said (at 295):
"The above analysis and conclusion that there was no agreement intended to stand alone as a binding agreement makes it unnecessary to decide some interesting questions as to the power of a statutory body with powers of acquisition to make agreements that bind it in the assessment of compensation which is set down in the statute. As a matter of principle I do not understand why the authority could not bind itself in advance, provided it does not act in conflict with the Act. So, for example, as the Act sets a limit of 10 per cent for solatium the authority could not agree to pay a figure of 20 per cent of the market value as solatium. There are strong considerations of public interest that support the making of agreements that reduce litigation and resolve disputes. It is easier to enforce such an agreement if there is a dispute and proceedings following a notice of acquisition, since agreements - even though limited to a portion of the dispute - should be enforced, usually by treating the agreement as an admission in the proceeding."
Turning to the question of a possible estoppel in this area, Gobbo J. said (at 295-6):
"The alternative argument of the claimants was that the authority was estopped from denying that plans X and Y were to be the method of assessment of the market value of the land both in a private sale or following a compulsory acquisition. It was said that the authority had represented that the plans were to be the method of assessment and that the claimants had relied upon that representation to their detriment.
There was no express representation of the kind suggested, but there was sufficient evidence of some agreement to raise the question of an implied representation. Reliance was placed on recent cases for the proposition that in view of the authority's conduct it would be unconscionable for the authority to depart from the representation alleged... It was also put on behalf of the claimants that there was an assumption on their part that the agreement would not be departed from ...
But whatever be the ultimate decision on the question of detriment, the critical issue that still remains relates to the representation and what assumption was created to the knowledge of the authority. The facts as to this are the same as those considered in relation to the agreement. There the conclusion was that there was no separate agreement intended to bind the parties but rather a step in a process of negotiations towards the agreement of a price for a purchase. It was not at that time a step towards the resolution of a dispute after compulsory process had got under way.
It was always going to be difficult for the claimants to succeed on estoppel if the agreement was not made out and the difficulty still remains because it cannot be demonstrated that there was a representation that the plans would be used for the assessment of compensation in any dispute following the service of compulsory process. There was no express representation. As to implication, it is no more possible to infer a representation than it was to do so in relation to the alleged agreement. Nor was an equivalent assumption created."
It was therefore not necessary that Gobbo J. deal with an argument put by the authority that the estoppel suggested by the claimants could not fetter the authority's statutory discretion or the court's powers in the proceedings. However, it appears, in absence of authority on the point, full reference should be made to his Honour's observations as follows (at 297):
"I am by no means persuaded that a public authority cannot bind itself in advance as to an item of compensation. Looking first at the time after dispute is joined, I see no reason why the authority through its agents, cannot resolve part of a dispute whether by concession or by a compromise that involves making one concession in exchange for another. There can be no doubt that it has the power to resolve claims whether before or after a dispute. The implied power to resolve a dispute must carry with it the power to resolve part of a dispute.
It was argued, however, that the authority could not so settle an issue so as to run counter to the method of assessment laid down in the statute or so as to limit the discretion of the board or court that had to resolve the dispute. A concession of law that runs counter to the express provisions of the statute that gives an entitlement to compensation would almost certainly be beyond power. Thus an express agreement to pay solatium in the sum of 20 per cent of market value when the statute provides for a maximum of 10 per cent of market value would clearly be beyond power.
The matter becomes more difficult, however, where the matter is dependent on the weight of evidence and where the issue is one of fact - or at best - one of mixed law and fact. Thus a dispute about value where there are conflicting valuations founded on different uses of sales evidence is one that lends itself to reasonable compromise or concession even if this involves a concession of a figure not directly supported by the authority's own valuer's opinion. The same would in my opinion be true of a concession about highest and best use or what is sometimes described as the notional or underlying zoning of land reserved for a public purpose.
The position may be otherwise however where it is not so much a concession on a category of entitlement but is rather an acknowledgment of a category of compensation that is neither provided by the statute nor by judge-made law.
All of the foregoing remarks are made in the context of what may be compendiously described as statute law and judge-made law. It does not advert to internal regulation or monitoring mechanisms set up to compel additional authorisation for purchases or settlements in relation to land by departments or statutory bodies. However rigorous these mechanisms, they do not in my view impinge on the validity of an agreement or concession that is otherwise within power."
Addressing next the question of a possible admission by the authority, Gobbo J. said (at 297-8):
"The claimants also argued that in any event the conduct of the authority amounted to an admission against interest that the agreed 'before' plans constituted the highest and best use of the land.
There is in my view sufficient material in the evidence already reviewed to support the proposition that the authority did by its acceptance of the plans impliedly recognise that the plans represented the highest and best use of the land at that time. In one sense this is a statement against the interest of the authority which had been contending that the northern land could not be subdivided at all or to the extent reflected in the plans.
This does not mean however that there was therefore a formal admission of a contested matter of the kind that can occur in a pleading in litigation. It was plainly not that kind of admission. Rather it was in the category of an informal admission against interest. As such, it could not bind the authority to the proposition admitted and was no more than an item of evidence that could be considered along with all the other evidence on that issue. The question was whether the admission could have the decisive effect contended for by the claimants who sought to rest their primary assessment upon it, if the agreement and estoppel arguments failed.
In my view the proper but limited role of the evidence was as part of the evidence in reaching a decision on highest and best use at the time of the notice to treat. The claimants' planning evidence did not support a development as high as that depicted in the plans. Rather the evidence of the claimants' expert as to the planning history of the land supported a lesser development which, though less than that in agreed plans was higher than the single allotment case put for the authority. The admission constituted by the plans stood virtually alone and could not on the evidence properly lead to the fifteen lot development of the northern land being regarded as the highest and best use.
....
I therefore conclude that though the admissions do not formally bind the authority, they are admissible and material to the issue as to what was the highest and best use of the land at the date of acquisition."
Finally, in coming to his award, Gobbo J. said (at 322):
It would always, of course, be open to the parties to convert their firm understandings, if not agreements, into legally binding agreements by recourse to legal formalities. That could have been done in this case. But it is not necessarily a course to be encouraged and in the long run it may not be in the public interest. It is better to encourage, and abide by the result of, useful negotiations between well-informed experts seeking to resolve what are often difficult and complex questions."
I respectfully agree with all of these observations. I would only add that in the Federal context, as here, nothing can be lawfully agreed by the parties if it detracts from the constitutional guarantee of "just terms" enacted in ss.55(1) and 93 of the Act.
As has been noted, the proceedings before Wilcox J. were interlocutory, at least in their form. The issues were described as "preliminary". Yet, as has been said, a considerable body of evidence was tendered, presumably by way of background, or to provide at least some of the context in which the parties entered into the Deed. In his reasons, Wilcox J. made some findings of fact and answered the questions posed, on what may be taken to be a final basis. Yet the parties now say that they intend, and have always intended, to adduce further evidence at the final hearing. Can it be said then that the findings of Wilcox J. or, on appeal, our findings, are interlocutory or final? The question is important for several reasons, including the possible result that there will be an issue estoppel on the issues decided. The point is not free from controversy.
In Re Martin; Ex parte Amtron Australia Pty Ltd (1996) 62 FCR 438, Cooper J. held that, in some circumstances, an interlocutory decision may give rise to an issue estoppel. His Honour said (at 442-3):
"In the instant case, the judicial determination in question is an interlocutory judgment. I do not agree with the proposition that an issue determined in interlocutory proceedings cannot give rise to an issue estoppel (cf Whitemark Pty Ltd v Cann Australia Pty Ltd (unreported, Federal Court, French J, 31 March 1993) at p 6).
Whilst it is clear that a decision which is 'truly' interlocutory cannot found a relevant estoppel (for example, dismissal of a claim for interlocutory relief on the ground that there is not disclosed a serious question to be tried; see Schlieske v Minister for Immigration and Ethnic Affairs (1987) 79 ALR 554 at 574 per Beaumont J), there is authority that, in certain circumstances where an issue is finally determined in what are interlocutory proceedings, an issue estoppel may arise (see Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 3) [1970] Ch 506 at 538-539; Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 at 42-43; Makhoul v Barnes (1995) 60 FCR 572 at 582.
In Joseph Lynch Land Co at 42-43, the New Zealand Court of Appeal said:
'The purpose behind cause of action estoppel and issue estoppel is that litigants should not be twice vexed by the same claim or point and it is in the public interest that there be an end to litigation: see New Zealand Social Credit Political League Inc v O'Brien [1984] 1 NZLR 84 at 95 per Somers J; Gregoriadis v Commissioner of Inland Revenue [1986] 1 NZLR 110 at 114 per Richardson J and at 118 per Somers J and also the Carl Zeiss case at 946 per Lord Upjohn.
While we acknowledge that points decided in interlocutory proceedings may in certain circumstances lead to an estoppel, the rationale is less powerful in an interlocutory context. Therefore the justice of the case must be compelling before a decision which is in substance interlocutory is held to prevent the later ventilation of an issue. We consider that the statement in Cross on Evidence (4th NZ ed, 1989), p 317, par 12.9 that a decision on an interlocutory matter will not suffice for an issue estoppel is too widely expressed.'
In my view, the correct approach is to consider whether in the circumstances it is reasonable to regard the earlier decision as a final determination of the issue which one of the parties wishes to raise again, rather than to restrict consideration to the nature of the earlier proceedings (Joseph Lynch Land Co at 43; Makhoul v Barnes at 582-583)."
I respectfully agree with these observations. If parties have conducted an aspect of their litigation upon the footing that this part of the proceedings is to be then determined, to that extent, finally, it is only reasonable that they be bound by the way their cases on this aspect have been conducted.
In my opinion, the hearing before Wilcox J., and before this Court, on the issue of interpretation of the material provisions of the Deed, has been treated by the parties as if it were a final hearing. But so far as concerns the issue of the proper amount of compensation, the hearings to this point should, I think, be regarded as truly preliminary and thus interlocutory only; for instance, no attempt was made, or could have been made, before Wilcox J. or this Full Court to arrive at a figure for compensation.
Apart from issue estoppel by judicial determination, there may be estoppels arising from entry into the Deed itself. But there are limits to the creation of estoppels of this kind as Jordan CJ. said in Discount & Finance Ltd v Gehrig's NSW Wines Ltd (1940) 40 SR (NSW) 598, (at 603-4):
"The authorities show that if the defendants are to be bound by estoppel by deed, in the present action on the deed, it must be shown (1) that in the deed there is a precise and unambiguous statement of the fact in question, and (2) that the statement is a statement by the defendants. It is not sufficient to point to something in the deed from which the existence of the fact might be inferred: Onward Building Society v. Smithson. Nor is a promise that the fact exists equivalent, for this purpose, to a statement that it exists: General Finance Mortgage and Discount Co. v. Liberator Permanent Benefit Building Society. There must be a clear and explicit statement that it exists. Further, it is not sufficient that the fact is stated if, according to the true intendment of the deed, it is not the party sought to be bound by the estoppel who has stated it."
Finally, it should be mentioned that, given the wide differences in the parties' respective interpretations of the Deed, this is not a case of estoppel arising from a deed by convention (cf. Offshore Oil N.L. v Southern Cross Exploration N.L. (1985) 3 NSWLR 337).