Crisp & Gunn Co-operative Ltd v Hobart Corporation

High Court of Australia|1963-07-01|Before: Windeyer JJ, Crawford J, Stable J

High Court of Australia McTiernan, Taylor and Windeyer JJ. Crisp & Gunn Co-operative Ltd v Hobart Corporation [1963] HCA 55

The Court delivered the following written judgment: -

This is an appeal from a judgment of the Supreme Court of Tasmania (Crawford J.) by which an action brought by the appellant to recover compensation for the compulsory acquisition of certain of its land in Melville Street, Hobart, was determined. The amount originally claimed by the appellant was approximately £180,000 and in the result the learned trial judge entered judgment for £31,500 and directed the respondent to pay the costs of the action. Upon this appeal the appellant challenges the adequacy of the award on a number of grounds and, alternatively, claims that judgment should have been entered for it for £50,000 which sum the respondent had paid into Court. At the outset of the argument we were informed that if the alternative claim, which raises particular questions of law, should succeed the appellant would not be disposed to pursue and would abandon its claim to any sum in excess of that amount. In the circumstances we considered it to be in the interests of the parties that we should deal first of all with the arguments on this aspect of the appeal.

The Rules of the Supreme Court pursuant to which the payment in was made (O. XXIV) were for all material purposes in the same form as O.XXII of the Rules of the Supreme Court of Judicature as they existed prior to 1933. However, some little time after judgment was entered in the action the Tasmanian Rules were amended to bring them into line with the modern English Rules and we are told that they now incorporate the "radical change in the practice of payment into Court" (Annual Practice 1963, p. 531) which was effected by the 1933 amendments in England. Some of the radical changes then made were that, thereafter, no statement of the fact that money had been paid into Court was to be inserted in the pleadings, except in actions to which a plea of tender before action was pleaded or in which a plea under the Libel Acts of 1843 and 1845 had been filed, and that, thereafter, the fact of payment in was to be made known to the plaintiff by a notice in the prescribed form whilst, in 1948, the Rules were further amended by deleting the requirement that a notice of payment in should specify whether it was made with or without a denial of liability. Accordingly, the modern rules do not draw any distinction between payments in with a denial of liability and payments in without any such denial and in all cases costs are in the discretion of the Court. It seems clear that under the Rules as they stand at present a payment into Court is not in any circumstances to be taken as an admission of liability to the extent of the payment in (Bonitto v. Fuerst Bros. & Co. Ltd. [1] ). But it is equally clear that under the English Rules as they stood prior to 1933 the issue which arose after payment into Court without a denial of liability, and, therefore, with an admission of liability, was whether the amount paid in was sufficient to satisfy the cause of action in respect of which it was paid in. Speaking of the difference between a payment into Court with a denial of liability and a payment into Court without any such denial the Court of Appeal, in Davies v. Rustproof Metal Window Co. Ltd. [1] said: "There is, however, the material difference that, if money is paid in with an admission of liability, it follows that liability is admitted up to the amount paid in and judgment cannot be given for less, which is not the case where it is paid in with denial of liability" [2] . Later in Harrison v. Liverpool Corporation [3] Lord Greene M.R., with whom Goddard L.J. (as he then was) and Du Parcq L.J. agreed, said: "There is one further matter to which I should refer. As the result of an amended defence and an amended payment into court, the defendants paid into court the sum of £50 with an admission of liability. Nevertheless, Stable J., declined to give judgment for £50, and gave judgment only for £45.10.0, the result of that, of course, being very important in respect of costs. In my opinion, Stable J., ought to have followed what was said in this Court in Davies v. Rustproof Metal Window Company Limited" [1] and thereafter his Lordship referred to the passage which we have just cited. The observation of the Court of Appeal in the earlier case was, in its application to the Rules as they stood in 1944, disapproved of in Bonitto's Case [1] . "It is" said Viscount Simon "a mistake to suppose (as was suggested in the judgment of the Court of Appeal in Davies' Case [1] and repeated in Harrison v. Liverpool Corporation [4] ) that "if money is paid in with an admission of liability, it follows that liability is admitted up to the amount paid in and judgment cannot be given for less"." But, he added, "that was, no doubt the effect of the previous Rules, before they were displaced in 1933" [1] . This latter view is strictly in accordance with authority in this country and, in particular with the decision in Spencer v. The Commonwealth [1] - a case which we have selected because it was an action for compensation for the compulsory acquisition of the appellant's land. In that case a sum of money had been paid into Court without a denial of liability pursuant to rules which were in all relevant particulars identical with both the Tasmanian Rules and the English Rules prior to 1933 and judgment was given in the first instance for a lesser sum. On appeal judgment was entered for the appellant for the amount paid into Court. Griffith C.J. observed: "In the present case the defence contained nothing to limit the effect of the payment into Court. It follows that the plaintiff's cause of action in respect of which the payment was made was admitted. No case was cited to us in which it has been expressly decided that the admission involved in a plea of payment into Court is an admission of liability to the full amount paid in, but in all the cases cited this seems to have been taken for granted. In any view the plaintiff became entitled to receive the money as soon as it was paid in, and nothing has since occurred to disentitle him to it, unless the finding of the learned Judge has that effect. The only issue for trial raised by the joinder of issue was whether the sum paid into Court was or was not enough to satisfy the plaintiff's claim. It was, therefore, not material to consider whether it was more than enough. If it was not enough, the plaintiff would be entitled to damages ultra, if it was, he was entitled to no more than he already had. I am, therefore, of opinion that the plaintiff is entitled to recover at least the amount paid into Court" [2] . Barton J. and Isaacs J. in separate judgments expressed the same view. If, therefore, there was in this case an effective payment into Court without a denial of liability then the appellant was entitled to have his compensation assessed at a sum at least equivalent to the amount paid in.

[1944] A.C. 75. 2. [1943] 1 K.B. 299. 3. [1943] 1 K.B., at p. 300. 4. [1943] 2 All E.R. 449, at p. 452. 5. [1943] 1 K.B. 299. 6. [1944] A.C. 75. 7. [1943] 1 K.B. 299. 8. [1943] 2 All E.R. 449. 9. [1944] A.C., at p. 85. 10. (1907) 5 C.L.R. 418. 11. (1907) 5 C.L.R., at pp. 429, 430.

However, the learned trial judge held that there had been no effective payment into Court; it was, he thought, a nullity but if it was not, then he considered that, in the circumstances to which reference will shortly be made, it was a payment into Court with a denial of liability.

The view that the payment into Court was without legal effect stemmed, in the first instance, from the fact that, in terms, the provisions of O. XXIV applied to actions "to recover a debt or damages" and in his Honour's opinion an action to recover compensation for land compulsorily acquired is not such an action. "It is not", his Honour said, "an action for debt", apparently, because it "was not an action for a sum certain and involved an assessment of compensation" [1] . Nor was it, he considered, an action to recover damages because the appellants' title to relief did not depend upon proof of any wrongful act. It may be conceded that the action was not strictly an action for damages but the expression used in the rule has a composite significance and, having regard to its history, was doubtless intended to cover any action in which a claim for money, as distinct from other specific forms of relief, was made. However this may be, to say that the action was "not an action for debt" as it was not for a sum certain because of the necessity that compensation should be assessed, was virtually to equate that part of the expression used in the rule - "an action to recover a debt" - with the old form of action of debt. But the rule did not speak of and was never intended to refer to actions of debt; it spoke of an action to recover a debt or damages and the first part of this expression not only covered a field at least as wide as the old common money counts but extended to claims for money sums arising under specialties or statute. It is no answer to this proposition to say that the claim in question here was not for a fixed and certain sum as was requisite in the old action of debt (Spain v. The Union Steamship Company of New Zealand Limited [1] ; Segur v. Franklin [2] ; and Lagos v. Grunwaldt [3] ). Further, we cannot fail to observe that in Spencer's Case [4] the question whether the action was an action to recover a debt or damages passed without question. We have no doubt that O. XXIV applied to an action such as the present.

[1962] Tas. S.R., at p. 109. 2. (1923) 32 C.L.R. 138, at pp. 142, 145, 158. 3. (1934) 34 S.R. (N.S.W.) 67. 4. [1910] 1 K.B. 41. 5. (1907) 5 C.L.R. 418.

A more difficult question arises because of the fact that the provisions of sub-r. II of r. 1 of O. XXIV were not observed in relation to the payment into Court. Sub-rule I of r. 1 of the Order provided that where there were pleadings in an action to recover a debt or damages, a defendant might, before or at the time of delivering his defence, or at any later time by leave of the Court or a judge, pay into Court a sum of money by way of satisfaction, which should, unless otherwise stated, be taken to admit the claim or cause of action in respect of which the payment was made, or he might, with a defence denying liability pay money into Court which should be subject to the provisions of r. 4. Then sub-r. II provided that payment into Court should be signified in the defence. But if the defendant paid money into Court before delivering his defence he was required to serve upon the plaintiff a notice specifying both the fact that he had paid in such money and also the claim or cause of action in respect of which such payment had been made. For the purposes of this sub-rule a form of notice was prescribed by the rules. The defence in the action was filed on 27th October 1959 and the payment into Court took place more than twelve months later, on 25th November 1960, pursuant to an order made two days earlier by which leave in accordance with sub-r. I was duly granted. But in spite of the fact that about this time - a few days before the hearing of the action commenced - the appellant was notified by the respondent of its intention to apply at the hearing for leave to amend its defence in certain particulars no reference was made to any proposed amendment which would have the effect of signifying the payment into Court in accordance with sub-r. II. Nor was any such amendment ever made. What happened was that the payment into Court was signified to the appellant by a contemporary notice, in the form prescribed for use in the circumstances mentioned in sub-r. IV, that the sum of £50,000 had been paid into Court and in this notice the respondent asserted that this sum was "enough to satisfy the plaintiff's claim for compensation for the acquisition of two roods twelve and seven-tenths perches (2 roods 12-7/10 perches) situate between Bathurst Street and Melville Street in Hobart and for which the plaintiff has claimed compensation in the sum of one hundred and forty-six thousand four hundred and forty pounds (£146,440)". The failure of the respondent to comply with sub-r. II was treated by the learned trial judge as an additional ground for regarding the payment into Court as a nullity but we would have difficulty in accepting this view if it appeared that notwithstanding the informality of the payment in, the case had proceeded on the basis that an effective payment into Court with an admission of liability had been made. In those circumstances r. 21 of O. LXXX might well have been in point. That rule provided that non-compliance with any of the rules, or with any rule of practice for the time being in force, should not render any proceedings void unless the Court or a judge should so direct; but such proceedings might be set aside, either wholly or in part, as required, or amended, or otherwise dealt with in such manner, and upon such terms as the Court or judge might think fit. But neither party at the hearing in any way sought to raise the issue whether the amount paid into Court was sufficient to meet the appellant's claim and the pleadings in the form in which they stood did not raise any such issue for determination. That being so, it is, we think, impossible to conclude that the case should have turned on any such issue.

Possibly the attitude of the parties to the payment into Court was in some measure determined by the fact that at the time when the payment into Court was made the defence left in issue one matter upon which the appellant's title to relief depended. It, expressly, did not admit the appellant's title to the land in question. But it was argued that the amendments made at the trial had the effect of displacing this refusal to admit and there may be a great deal to be said for this view. It is, however, unnecessary to pursue this topic since the fact remains that at the time when the payment in was made there was upon the pleadings a denial of liability and it is difficult to see how an informal payment into Court made at a time when liability was denied on the pleadings could, ex post facto, be transformed into a payment into Court with an admission of liability. In those circumstances we are of the opinion that the appellant's alternative submission fails.

That being so, it becomes necessary to deal with the substance of the appeal. It is, we think, unnecessary to traverse the facts in great detail for this has been done by the trial judge [1] and there has been little criticism of his various findings of fact. To this criticism we shall refer presently. It is, however, necessary to mention that the parcel of land which was acquired by compulsory process was but one of three parcels which were used by the appellant in its general business of a timber merchant at Hobart. These parcels were not contiguous but were separated by Brisbane Street and Melville Street. A parcel fronting the north-western side of Brisbane Street was used as what was called the "pine store". Immediately opposite was the second parcel on which was erected the appellant's main business premises. This parcel extended through to Melville Street where its frontage was immediately opposite to the third parcel. The third parcel, which, in turn, extended through to Bathurst Street was used as the "scantling yard". There can be no doubt that the three parcels, together, constituted the business premises of the appellant in this area and that they were exclusively and in common devoted to the purposes of the business. It was the third parcel which was the subject of the resumption and it may be that it had a special value to the appellant. It is also possible that each of the other two parcels, used, as they were, in combination with one another and with the scantling yard, might possibly have been regarded as having some such special value. But no such claim was directly made and no evidence was given in the case to justify any such conclusion. There was, however, a claim for a substantial amount "for severance and injurious affection" but the particulars of this claim show that it was based on damage said to have resulted from disturbance of the appellant's business.

What happened after the resumption was that the appellant transferred its scantling yard to a parcel of land, referred to as Gourlays, which was the property of the appellant and which was situated some three blocks away from the resumed land, and the claim which was made related to the setting up of this land as the scantling yard. It included expenditure on the provision of roads, timber racks, and other necessary accommodation at Gourlays, the estimated loss of revenue and the increased operational costs which would result from the establishment of a scantling yard some distance from the main premises and other sundry and related items. The items included in this claim were the subject of a close scrutiny by the learned trial judge and he found that the disturbance in the appellant's business following upon this re-arrangement of its activities would result in an overall loss to it of a little over £4,000. It may be that this loss should have been estimated at nearly twice this figure but this is of no consequence in the case for, acting upon the principle enunciated in Standard Fuel Co. v. Toronto Terminals Railway Co. [1] and further elaborated upon in Horn v. Sunderland Corporation [1] and The Commonwealth v. Milledge [2] , the learned trial judge made alternative assessments. He assessed the market value of the land at £31,500 and the value of the land for use as a scantling yard at £21,500. This latter valuation was, he thought, necessary as a starting point in the assessment of compensation which would take into account as a factor loss resulting from the disturbance of the appellant's business. But in the result he found that the market value of the land exceeded any claim that could be substantiated on the alternative basis. And, of course, the result would be the same even if the figure of approximately £4,000, which his Honour found to be the loss by reason of disturbance of the appellant's business, were assessed at double that figure.

[1935] 3 D.L.R. 657. 2. [1941] 2 K.B. 26. 3. (1953) 90 C.L.R. 157.

For the appellant, however, it was contended that his Honour erred in treating the case as entirely covered by the cases referred to. In the first place, it was pointed out that this assessment took place under a statute which provided that in determining the amount of compensation regard should be had, not only to the value of the land and other specified items, but also to "disturbance and any other matter not directly based on the value of the land". Secondly, it was contended that the authorities to which we have referred to were not directly in point. It was pointed out that they were concerned with cases where the resumption was of land upon which the expropriated owner's business was solely and exclusively conducted and where it was possible to say that realization of the land at its full market value would necessitate the giving up of the owner's business upon the land. But we can see no distinction between such cases and the present case. As was pointed out in Milledge's Case [1] "it must always be remembered that disturbance is not a separate subject of compensation" and that "its relevance to the assessment of the amount which will compensate the former owner for the loss of his land lies in the fact that the compensation must include not only the amount which any prudent purchaser would find it worth his while to give for the land, but also any additional amount which a prudent purchaser in the position of the owner, that is to say with a business such as the owner's already established on the land, would find it worth his while to pay sooner than fail to obtain the land" [1] . Accordingly, "a prudent purchaser in the position of the owner would not increase his price on account of the special advantage he would get by not having to move his business, unless the amount he would have been prepared to pay apart from that special advantage was the value of the land considered as a site for that kind of business". "Disturbance" it was said, "is relevant only to the assessment of the difference between, on the one hand, the value of the land to a hypothetical purchaser for the kind of use to which the owner was putting it at the date of resumption and, on the other hand, the value of the land to the actual owner himself for the precise use to which he was putting it at that date" and "it follows that if in the first instance the land is valued on the basis of its suitability for some more profitable form of use, there can be no justification for making an addition to the value so ascertained because of disturbance" [1] . The principles implicit in these observations apply with equal force, we think, whether the land resumed represents the whole of the land or one only of several parcels upon which business activities are conducted. Further we are of the opinion that the requirement of the statute that regard should be had in assessing compensation to a number of factors including "disturbance and any other matter not directly based on the value of the land" does not justify the award of any amount for disturbance in addition to the market value of the land where, as here, that value exceeds the "present use" value by an amount in excess of any loss resulting from disturbance.

(1953) 90 C.L.R. 157. 2. (1953) 90 C.L.R., at p. 164. 3. (1953) 90 C.L.R., at p. 164.

There was some criticism of the assessment by his Honour of the "present use" value of the scantling yard at £21,500 and we are inclined to think that it is not without foundation. The assessment was made on the somewhat scanty evidence of a valuer to the effect that if the subject land had been "zoned" for use exclusively as a scantling yard "it would be worth about 17 /- per square foot". To us it seems that this was not a sufficient foundation for the determination of the "present use" value of the land used, as it was, in common with the other two parcels as the premises upon which the appellant's business in the area was conducted but, although there was some evidence that the land was not being put to its best economic use, there was no other evidence which could justify the assessment of a "present use" value which would have resulted in an alternative assessment in excess of the market value of the land.

The appellant also put its case as one in which it was entitled to compensation for damages sustained by reason of severance of the resumed land from the land comprised in the other two parcels. We have no doubt that this was a case of severance although the three parcels were not contiguous (Holt v. The Gas Light and Coke Company [1] ; Cowper Essex v. The Acton Local Board [1] ; and Wilson v. The Minister [2] ). Further we are of the opinion that in assessing compensation for damage resulting from severance regard should be had to the special value, if any, to the expropriated owner of the whole of the land before severance. But as already pointed out there was no evidence in this case that the land in question had any special value to the appellant over and above the market value. Nor was there any evidence to suggest that the resumption of the third parcel in any way operated to diminish the market value of the first and second parcels.

(1872) L.R. 7 Q.B. 728. 2. (1889) 14 App. Cas. 153. 3. (1908) 8 S.R. (N.S.W.) 427.

A further suggestion that the proved business loss should be regarded as a loss resulting from the severance must also be rejected for, as we have already said, the alternative basis upon which compensation was assessed, i.e. the market value of the land, provided full compensation to the appellant.

The final matter to which the contentions of the appellant require us to direct our attention is the assessment by the learned trial judge of the market value of the land at £31,500. At the hearing four valuers gave evidence and their evidence as to the market value of the land ranged between £31,500 and £49,000 and it was the lowest valuation which his Honour accepted. But he did so after an exhaustive survey of what might be regarded as comparable sales in the area and no substantial reason appears, or was advanced, why his assessment should be reviewed. As was pointed out in Milledge's Case [1] : "The rule has been consistently applied in this Court that on a question of valuation an appellate tribunal is not justified in substituting its own opinion for the opinion of the court below unless it is satisfied that the court below acted on a wrong principle of law or that its valuation was entirely erroneous" [1] . Applying this principle to the present case it is not open to us in any way to interfere with his Honour's finding.

(1953) 90 C.L.R. 157. 2. (1953) 90 C.L.R., at p. 159.

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