DBW REYNOLDS PTY LTD as trustee for THE DBW REYNOLDS FAMILY TRUST -v- PUBLIC TRANSPORT AUTHORITY [2025] WASCA 43 (2 April 2025)

1. For the reasons set out below, the appeal should be dismissed.

1. DBW Reynolds, in its capacity as trustee for the DBW Reynolds Family Trust, acquired the six lots constituting the Land in the early 2000s. One of the lots was a product of an amalgamation of three separate smaller lots that had been acquired earlier by DBW Reynolds.
2. The combination of the six lots resulted in the Land having a somewhat unique feature of three separate road frontages, being to Dundas Road, Sultana Road and Imperial Street, High Wycombe. An aerial photograph of the Land and a diagram identifying the six lots in question are attached at Schedule 1 to these reasons.
3. Century West entered into a lease with DBW Reynolds on 22 March 2011, and operated a road haulage, transport depot and associated storage business from the Land. Century West made use of the three road frontages in order to eliminate the need for space to turn large vehicles. The vehicles could instead enter the Land via one road frontage and exit via another. This arrangement enabled Century West to use some of the Land for the storage part of the business.

1. DBW Reynolds and Century West are separate legal entities. However, they are related in so far as Mr Haydn Reynolds and his wife Mrs Leida (Lisa) Reynolds are each:[2]

(a) directors of DBW Reynolds and Century West;

(b) an appointor and guardian of the DBW Reynolds Family Trust;

(c) members of the class of general beneficiaries of the DBW Reynolds Family Trust; and

(d) shareholders of Century West.

1. The result of the above is that Mr and Mrs Reynolds were involved in the daily operations of each of DBW Reynolds and Century West.

1. A special Act of Parliament is required to authorise the construction of a railway.[3] On 2 November 2015, the Railway (Forrestfield-Airport Link) Act 2015 (WA) received Royal Assent. That Act authorised the construction of a railway along the line specified in sch 1. There is no dispute that the railway in sch 1 is for the purposes of the Forrestfield Airport Link railway project.
2. On 11 November 2015, the respondent registered with the Registrar of Titles a taking order authorising the taking of the Land for the purposes of the Forrestfield Airport Link railway. Upon the registration of the taking order, the interests of the appellants in the Land were terminated and converted into claims for statutory compensation under pt 10 of the LAA.[4]
3. On 17 November 2015, the appellants lodged separate claims for compensation under the LAA. The respondent made offers of compensation to the appellants, but each was rejected and the appellants requested an offer of an advance payment of compensation. The respondent paid each appellant advance payments of compensation. The appellants commenced their claim for compensation by writ of summons filed 15 March 2018.

1. Prior to considering the grounds of appeal, it is convenient to detail the key statutory provisions governing the calculation of compensation payable for the compulsory acquisition of land under the LAA and the relevant heads of compensation.
2. Every person having any interest in land which is taken under pt 9 of the LAA is entitled, subject to pt 10, to compensation for the interest taken.[5] An interest for the purposes of pt 9 and pt 10 of the LAA means any legal or equitable estate or interest in land.[6]
3. On a trial of an action for compensation, the court is to determine the amount of compensation payable in respect of the taking of the interest in land, having regard solely to the provisions of pt 10 of the LAA and in particular to the matters prescribed in div 5 and s 256 of the LAA.[7] Section 256 of the LAA is not relevant in this appeal.
4. Section 241 is contained in div 5 of pt 10 of the LAA and governs the assessment of compensation and identifies a number of different heads of compensation. Relevantly for this appeal, s 241 provides as follows:

(1) In determining the amount of compensation (if any) to be offered, paid, or awarded for an interest in land taken under Part 9, regard is to be had solely to the matters referred to in this section.

(2) Regard is to be had to the value of the land with any improvements, or the interest of the claimant in the land, assessed as on -

(a) in the case of an interest taken for a railway or other work authorised by a special Act - the first day of the session of Parliament in which the Act was introduced; or

and discounting any increase or decrease in value attributable to the proposed public work.

...

(6) Regard is to be had to the loss or damage, if any, sustained by the claimant by reason of -

(a) removal expenses; or

(b) disruption and reinstatement of a business; or

(c) the halting of building works in progress at the date when the interest is taken and the consequential termination of building contracts; or

(d) architect's fees or quantity surveyor's fees actually incurred by the claimant in respect of proposed buildings or improvements which cannot be commenced or continued in consequence of the taking of the interest; or

(e) any other facts which the acquiring authority, the court, or the State Administrative Tribunal considers it just to take into account in the circumstances of the case.

1. It is not in dispute that the valuation date for the purposes of s 241(2) of the LAA in the present case is 11 April 2013, being the first day of the session of Parliament which introduced the Railway (Forrestfield‑Airport Link) Bill 2015 (WA).
2. 'Public work' is defined in s 3 of the LAA as having the meaning given in s 2 of the Public Works Act 1902 (WA), which is as follows:

means a work, facility, building, structure or other thing that is -

(a) declared, or of a class declared, under section 2A to be a public work; or

(b) of a class described in Schedule 1;

1. A railway authorised under a special Act is a class of public work described in sch 1, item 2 of the Public Works Act 1902 (WA), and therefore the present railway project is a public work for the purposes of the compensation assessment.

1. The trial judge identified nine issues for resolution in the trial. However, only the following four of these issues are relevant to this appeal:

(1) Issue one: Whether DBW Reynolds is entitled under s 241(2) of the LAA to a higher compensation amount representing the value of its taken Land assessed to include value 'to the owner', being a sum higher than the Land's market value. This issue is relevant to ground of appeal 1.

(2) Issue two: What is the market value of the Land, including improvements? This issue is relevant to ground of appeal 2.

(3) Issue three: Whether Century West is entitled to compensation under s 241(6) of the LAA for the additional costs of leasing temporary business premises after the taking. This issue is relevant to ground of appeal 3.

(4) Issue four: Whether Century West is entitled to compensation under s 241(6)(b) of the LAA for 'lost income' for a loss of potential future revenue obtainable upon profitable contracts that Century West believes it would likely have obtained with a third party, had the taking of the Land not occurred. This issue is relevant to ground of appeal 4.

1. The appellants appeal on the following four grounds:
   1. The trial judge erred in law in his approach to the question of 'value to the owner' and instead his Honour should have found that the claimants were entitled to additional compensation.
   2. The trial judge erred in principle in his Honour's assessment of the 'market value' of the taken Land resulting in an erroneous valuation.
   3. The trial judge erred in law in his Honour's approach to the assessment of the loss sustained by the appellants by reason of having to relocate their business and should have considered that it was the loss sustained by reason of disruption of the business that was to be determined.
   4. The trial judge erred in principle in considering that a loss of an opportunity to enter into a future profitable contract was not 'loss or damage ... sustained' within the meaning of s 241(6) of the LAA and then in applying a 50% discount.
2. Grounds 1 and 2 concern the assessment of the value of DBW Reynold's freehold interest in the Land under s 241(2) of the LAA.
3. Grounds 3 and 4 concern the extent and amount of compensation payable to Century West under s 241(6) of the LAA for the loss and damage associated with the need to relocate its business.
4. It is important to observe that whilst the appellants jointly ran their case at trial and on appeal, each of the appellants made separate and distinct claims for compensation under the LAA. When considering each of the grounds of appeal, it is necessary to distinguish between the different appellants and which claim for compensation the ground of appeal concerns. However, as the appellants were represented by the same instructing solicitors and senior counsel, a single appellants' case was filed and a single set of oral submissions were made. References in these reasons to 'the appellants' submissions' must be understood in the above context.

1. There is no dispute that DBW Reynolds was the freehold owner of the Land and is entitled to compensation for the value of the Land, with improvements, pursuant to s 241(2) of the LAA.
2. There is a dispute between the parties as to how that valuation should be conducted. DBW Reynolds' case is that the Land should be valued on the basis of what is called 'value to the owner'. The basis of this claim is the pleading at [4] and [40] of the further amended statement of claim filed 9 July 2021, where DBW Reynolds pleads:[8]
   1. By virtue of the relationships and control described in paragraph 3 hereof, Haydn and Leida Reynolds were at all material times able to effect or cause to be effected the following actions:

a) Alter, extend or terminate the lease;
>
> b) defer, increase or decrease the rent payable by the Second Plaintiff under the lease, both formally and informally;
>
> c) forgive any rent arrears not paid by the Second Plaintiff;
>
> d) sell the business;
>
> e) sell the land whether as a whole or individually in any configuration of its six lots at a time of their choosing;
>
> f) continue to cause the Second Plaintiff or any other person or entity of their choosing including themselves to operate a transport depot from lot 757 and to sell or lease all or any of the remaining five lots in any commercially attractive configuration;
>
> g) lease the land to another person or entity whether as a whole or individually in any configuration of its six lots;
>
> h) lease the land to a purchaser of the business for any length of lease required by such a purchaser and whether as a whole or individually in any configuration of its six lots;

1. declare dividends and make distributions to beneficiaries and

j) make decisions collectively or individually for themselves, the First Plaintiff and the Second Plaintiff as a combined ownership and business enterprise

all of which options are collectively characterised as circumstances providing support for a valuation on a 'value to the owner basis' which will be further particularised by evidence prior to trial.

1. The First Plaintiff has spent a considerable amount of time and effort both in putting together the land so that it constituted the ideal shape and configuration for the efficient running of the business and in constructing the improvements erected on the land:

a) the Second Plaintiff specialises in transporting extendable loads and it was therefore important to achieve two road frontages to avoid the need for full turning of very large vehicles inside the depot;

b) the two road frontages were achieved through purchases, amalgamation and re-subdivision with an adjoining owner's land;

c) land swaps with that owner to mutual benefit over a period of five years between 2008 and 2012;

d) land providing a third street frontage was purchased in 2012 for access flexibility and storage for customer product;

e) the First Plaintiff expended a significant amount of money in stamp duty, consultants' fees and planning fees to achieve the configuration discussed in the foregoing particulars;

f) in order to obtain that configuration, the First Plaintiff had to give up 1130 sqm of land in the purchased landholding to form a drainage basin, to provide road reserve for Imperial Street and to contribute to the cost of both;

g) each lot is serviced and has deeper than usual bitumen surfacing to withstand the additional weight of the larger commercial vehicles;

h) each of the three entrances were fitted with automatic gates and security cameras and the exterior of the land was attractively fenced and landscaped;

1. three lots (nos 723,722 and 721) were amalgamated to form Lot 757 and the improvements constructed on that lot, which are of the highest quality and condition are described at paragraphs 33 and 34 hereof; and

j) the First Plaintiff, in acquiring replacement land, is now at risk of having to pay development contributions pursuant to State Planning Policy 3.6 and the Precinct Plans and Development Contributions Plans in course of preparation and imposition upon land within the Shire of Kalamunda

all of which collectively support a compensation valuation for the land calculated on the basis of 'value to the owner'.

1. In the prayer for relief, each appellant separately claims compensation. DBW Reynolds claims compensation for the value of the Land, assessed on a number of alternative bases.
2. The respondent does not admit that the Land should be valued on the basis of 'value to the owner' and instead says that the value of the Land is reflected in its market value. Paragraphs [4] and [40] of the re‑amended defence filed 12 August 2022 pleads as follows:[9]
   1. The Defendant:

4.1. does not admit paragraphs 4(a) to (j) of the Statement of Claim; and

4.2. denies that these options are collectively characterised as circumstances providing support for a valuation on a 'value to the owner basis'; and

4.3. otherwise denies paragraph 4 of the Statement of Claim; and

4.4. says further that:

4.4.1 the First Plaintiff and the Second Plaintiff are separate legal entities; and

4.4.2 immediately prior to 11 November 2015, the First Plaintiff and the Second Plaintiff each held a different interest in the Land, namely:

1. the Second Plaintiff held a leasehold interest either under the Lease or under a tenancy on similar terms to the Lease; and
2. the First Plaintiff held a freehold interest, encumbered by the Second Plaintiff's leasehold interest and a mortgage.

40.1. does not admit paragraph 40 of the Statement of Claim;

40.2. denies that the particulars listed collectively support a compensation valuation for the Land calculated on the basis of 'value to the owner';

40.3. says that:

40.3.1 the value of the Land (taking account of its shape, configuration and improvements) is reflected in its market value; and

40.3.2 the First Plaintiff is properly compensated for the value of all the attributes of the Land by the market value without any further allowance for what is claimed as 'value to the owner';

40.4. denies that any compensation is payable pursuant to an alleged loss of 'value to the owner', and denies that 'value to the owner' as pleaded, is compensable at all; and

40.5. says that to the extent that the Land's shape, configuration and improvements were suitable for the efficient running of the Second Plaintiff's business, this suitability was reflected in the rent payable by the Second Plaintiff to the First Plaintiff.

1. The trial judge heard evidence from four expert valuers: Matthew Garmony and Jenny Le‑Fevre called by the appellants, and Jonathan Fyson and Dale Hall called by the respondent. The valuers provided multiple written reports; participated in a pre‑trial conclave; prepared a joint conferral statement; and participated in a concurrent evidence session.
2. The valuers diverged on whether there was any value to the owner over and above the market value of the Land. Mr Hall and Mr Fyson did not consider there was any such value to the owner save for the fact that the Land consisted of six separate lots and there was flexibility as to how the owner may sell those lots (including single lot sales or in groups). Each of Mr Hall and Mr Fyson included this feature as part of their respective assessments of the market value of the Land.[10] Mr Garmony and Ms Jenny Le‑Fevre considered that there was value to the owner.
3. Mr Fyson valued the market value of the Land at $8,500,000.[11] Mr Fyson also considered the question of whether there was any value to the owner. Mr Fyson considered each of the features of the Land pleaded by the appellants as the basis of the value to owner claim as pleaded at [4] and [40] of the further amended statement of claim. Mr Fyson explained whether he considered each constituted value to the owner; whether each was included in his valuation of the market value or whether any fell within any of the other heads of compensation provided for in s 241 of the LAA.[12] Mr Fyson ultimately concluded:[13]

The combination of these factors does not appear to result in the owner exclusively or almost exclusively being able to exploit financial value from this land, and many of the benefits listed by the Plaintiff are already intrinsically allowed for when assessing the value of land taken.

1. Mr Hall valued the market value of the Land at $7,750,000.[14] Mr Hall also commented on the concept of value to the owner. Mr Hall considered each of the features of the Land pleaded by the appellants as the basis of the value to owner claim as pleaded at [4] and [40] of the further amended statement of claim. Mr Hall also considered each of these factors and explained whether he considered each constituted value to the owner; whether each was included in his valuation of the market value or whether any fell within any of the other heads of compensation provided for in s 241 of the LAA.[15] Mr Hall ultimately concluded that the limited value to the owner had already been included in his assessment of the market value of the Land with improvements.[16]
2. Neither Mr Fyson nor Mr Hall were cross examined about this aspect of their reports and there were no supplementary reports prepared by Mr Garmony or Ms Jenny Le‑Fevre addressing this issue.
3. Mr Garmony first valued the market value of the Land at $9,625,000,[17] and then added the following additional amounts to that market value to calculate the value to the owner:[18]

I have also analysed the value of the subject property to the owner (DBW Reynolds Pty Ltd), who has accumulated the sites over the years and constructed the improvements. In determining the value to the owner, I have arrived at a cost to the owner on the basis they had to acquire the sites with those exact improvements. I have utilised the same approach to determining individual lot values (Gross Realisation) as in my Hypothetical development method of valuation, and then I have then added Stamp duty and Legal Fees & Professional Fess being additional costs that the acquiring owner would need to outlay in replicating the dispossessed lots. This amount reflects the total cost to the owner for the acquisition which equates to $11,585,000 exclusive of GST ...

1. Ms Jenny Le-Fevre also valued the market value of the land, and then provided a number of different methods of valuing the additional value to the owner.
2. The first of those was to assess the market value of the land by way of the comparable sales approach (which Ms Jenny Le‑Fevre valued at $8,500,000 adopting one scenario[19] and $9,500,000 adopting a different scenario[20]) and then to apply an 8% premium to the market value to represent the value to the owner:[21]

In analysing the sales evidence, an 8% premium has been established as being applicable to the market value assessed from the sales evidence, as being at the least the amount the owner would be prepared to pay above market value rather than lose the right to continue to occupy the property.

1. Ms Jenny Le-Fevre also used the summation method. In Ms Jenny Le‑Fevre's primary report, this was described as a 'check assessment',[22] although the submission of the appellants at trial was that by the time Ms Jenny Le‑Fevre gave evidence, this was her preferred method of valuation.[23]
2. Ms Jenny Le-Fevre assessed the summation method on two bases. The first was by depreciating the costs of the improvements. This resulted in the market value for the land (being $8,835,675 for the first scenario and $9,650,303 for the second scenario).[24] The second was by not depreciating the costs of the improvements, on the basis that they were new, but rather that this would be the cost of recreating these improvements on a new site (being $9,550,700 for the first scenario and $10,170,034 for the second scenario).[25] Ms Jenny Le‑Fevre concluded that this second method represented the value to the owner of recreating what had been taken.[26]
3. It is also relevant to record that each party called expert quantity surveyors to give evidence as to the estimated costs of the improvements on the Land. This information was used in different ways by the different valuers. The quantity surveyor's evidence is considered further in these reasons in context of ground 2.

1. The trial judge provided a detailed outline of the principles applicable to the assessment of compensation under the LAA.[27] That outline was drawn from the decision of Edelman J in Lenz Nominees Pty Ltd v The Commissioner of Main Roads[28] (which in turn drew on the decision of Beech J (as his Honour then was) in McKay v Commissioner of Main Roads [No 7][29]) and also the decision of the trial judge in Italiano v The Water Corporation [No 2].[30] No issue is taken with this outline of principles.
2. The trial judge then considered, in detail, the concept of 'value to the owner'.[31]
3. The trial judge commenced by outlining DBW Reynold's pleaded case in relation to value to the owner,[32] as explained in their written opening and closing submissions;[33] and the respondent's case in response.[34]
4. His Honour concluded that the dispute between the parties as to the applicability of value to the owner was not a dispute regarding any real arguments of fact as to the particularised features of the Land, but rather a question of 'principle' and whether proven facts supported a claim for compensation valued on the basis of value to the owner, or whether those facts were already accounted for in the Spencer test of market value or in other sections of the LAA.[35]
5. The trial judge then identified that s 241(2) of the LAA requires a court to assess the value of the taken land, including improvements.[36] His Honour observed, this will usually be determined by identifying the price of a notional bargain between a hypothetical vendor and purchaser who are prudent, well‑informed and willing, but not anxious to complete the exchange.[37] This is known as the market value of the land, or the Spencer test, being a reference to the High Court decision of Spencer v The Commonwealth.[38]
6. The trial judge then went on to consider the concept of 'value to the owner', being a measure of value above market value. His Honour reviewed various cases and other authorities regarding the concept of 'value to the owner'. His Honour accepted the appellants' characterisation of 'value to the owner' as being an 'elusive concept'.[39]
7. The trial judge conducted a detailed consideration of various cases which considered the concept of 'value to the owner'.[40] It is not necessary to set out that consideration in detail at this stage. The trial judge then outlined the following four propositions which his Honour drew from his consideration of the case authorities:
   1. First, as observed by Spigelman CJ, then Callinan J and then later still by the Court of Appeal in Mount Lawley at [286], situations where there is a difference between the market value of the land and a 'special value' to an owner are likely to be 'rare' cases. That is because factors of so-called 'special value' are likely to be components of market value recognisable under, in effect, the Spencer test by perfectly acquainted (with the land and its attributes) notional vendors and purchasers, as are objectively assumed.
   2. Second, a claim predicated upon 'potential' for the subject taken land will be reflected in a correct derivation of its market value.
   3. Third, 'value to the owner', or 'special value' does not encompass economic compensation for loss or damage arising by way of disturbance and dispossession. Such economic loss will be a separate claim, if available, to be pursued separately under the provisions of s 241(6) of the LAA.
   4. Fourth, the terms of s 241(1) of the LAA render it absolutely explicit that in determining an amount of compensation to be paid for an interest in land taken under Pt 9 of the LAA, that regard is to be had 'solely' to matters as referred to in s 241.
   5. Furthermore, it will be remembered that here, as a second plaintiff, Century West - as operator of a road haulage business operated on the land and obtained under lease from DBW - does pursue its separate financial loss claims for its economic disturbance and relocation expense losses said to arise out of a resultant early termination of its lease of its haulage business premises and so, a need for its subsequent relocation of that business to alternate (suboptimal, it says) leased business premises as were obtained (by it) at 415 Dundas Road, also in High Wycombe.
8. In light of these principles, his Honour identified three misconceptions in the approach adopted by DBW Reynolds in relation to its claim that the value of the Land should be assessed on the basis of a 'value to the owner' over and above that of the market value of the Land:
   1. First, on my assessment, applying the observations cited I have cited from Mount Lawley at [286], by Callinan J in Boland and by Spigelman CJ in Leichhardt at [24], the present is not a rare or exceptional case. The correct ascertainment of a market value for the taken land, applying an objective approach long explained by Spencer, will take full account of all the laudable features of the taken land and of the efforts of Mr and Mrs Reynolds over time in assembling this aggregate parcel of land over years - for the purposes of establishing what was a very efficient road haulage transportation depot as its industrial use.
   2. Second, any economic loss component in their (DBW's) 'value to the owner' claim, on my view, would be encompassed in the present claim for economic compensation jointly claimed by the related corporation, Century West, as operator of the business under lease from DBW, as a related corporate owner.
   3. Third, a recurrent feature encountered in the plaintiffs' approach to this compensation exercise was to contend that because the first plaintiff's land had been compulsorily taken from it, that its right to statutory compensation was to be assessed on the basis of something akin to tortious reliance loss damages. The plaintiffs' position, expressed constantly, was that they ought to be restored back to the same position, in effect, to the exact dollar by statutory monetary compensation, so as to, in effect, transplant and relocate both plaintiffs to almost identically reconstructed replacement premises that would replicate every equivalent feature to the former business premises once owned, or as leased to the second plaintiff. That is rarely achievable.
9. The trial judge concluded that this was not 'one of those rare cases in which there is a difference between the market value of the land and its special value to the owner'.[41] His Honour further explained that this was because:
   1. ... any such factors are likely to be components of the true ascertained market value, which are recognisable by the notional Spencer test for the assumed vendor and purchaser, who are 'conversant' or 'perfectly acquainted' with the land and all its features: Mount Lawley at [286]. Nor, in my view, can it be fairly said here that the corporate owner of the land, DBW, held any special qualities that, akin to a blacksmith with a non-conforming use located near a race course example, as was given by Callinan J in Boland, supports a greater 'value to the owner' being found. In effect, this land owner, DBW, was passive. It rented out its premises to a related business operator, Century West. And as far as Century West is concerned, there is no recognisable concept of 'value to the lessee'.
   2. These observations and conclusions will no doubt be said to not recognise the human realities of the Reynolds' control of both corporations. But they chose to use those lawful arrangements. They were not sham arrangements and the two entities they controlled, traded and paid tax on that favourably structured chosen basis. They cannot discard those corporate structures at their convenience for the purposes of a statutory compensation exercise following the taking of the land.
10. In terms of the expert valuation evidence, for the purposes of this ground of appeal, it is sufficient to observe that the trial judge rejected the value to the owner valuations of Mr Garmony and Ms Jenny Le‑Fevre on the basis that these were not conceptually justifiable.[42] His Honour also preferred the evidence of Mr Fyson as being the most convincing property valuation analysis for the purposes of assessing the market value of the Land with improvements.[43]
11. For these reasons, the trial judge assessed the value of the Land for the purposes of s 241(2) of LAA as $8,500,000.

1. The appellants submit that the trial judge erred in concluding that there was no 'value to the owner' over and above that of market value for the Land.
2. In their written submissions, the appellants submit that the trial judge erred in the following five respects in reaching this conclusion:

(1) First, by concluding that value to the owner will only be applicable in 'rare or exceptional' cases, and in so doing adding an additional qualification to the circumstances in which value to the owner will be applicable;

(2) Secondly, by having regard only to the reasons of Callinan J in Boland v Yates,[44] and failing to have regard to the reasons of Gleeson CJ with whom Gaudron and Gummow JJ agreed, and in particular Gleeson CJ's approval of part of the judgment of Bray CJ in the decision of Arkaba Holdings Ltd v Commissioner of Highways.[45] The appellant also submits that the reasons of Gleeson CJ were also cited with apparent approval by the plurality in the more recent decision of the High Court in Northern Territory v Mr A Griffiths (decd) and Lorraine Jones obh of Ngaliwurru and Nungali Peoples.[46] In overlooking these, the appellant submits that the trial judge was deprived of relevant authority;

(3) Thirdly, by concluding that the question of whether 'value to the owner' was applicable was 'essentially a question of law for the court'.[47] The appellant relies on the decision of Gleeson CJ in Boland v Yates who considered that the question of value to the owner 'also raises an issue for factual judgment',[48] and therefore submits that the approach of the trial judge was inconsistent with High Court authority;

(4) Fourthly, the appellants submit that the trial judge applied the incorrect legal test by failing to have regard to the fact that a business was being operated on the Land, and in so doing failed to ask the correct question, being 'what would a claimant with full knowledge of the precise use of the land and the business conducted thereon reasonably pay, rather than fail to gain it?'. The appellants also submit that in answering this question, the trial judge was entitled to have regard to the knowledge of the appellants as to the precise use to which the land was being put, the profitability of the appellants, or hypothetical profits from modernisation and to every matter of value that extends beyond market value; and

(5) Fifthly, by failing to have regard to the expert valuation evidence of the appellants which, if the correct test had been applied, the trial judge would have been required to have regard to, as those were the only experts who assessed value to the owner on the correct basis.

1. Senior counsel for the appellants clarified in oral submissions that in ground 1 the appellants allege that the trial judge made an error of law by applying the wrong test as to the question of whether value to the owner had been assessed. Senior counsel submitted the trial judge failed to apply the correct test, which involved ascertaining what a prudent person in the position of the actual vendor would have been willing to pay for the relevant interest in the Land, rather than fail to obtain it.[49] That is, that the trial judge did not consider the value of the Land from the perspective of the appellants.
2. Senior counsel further clarified that the appellants also submitted that the trial judge made an error of fact in concluding that value to the owner was not applicable to the Land, because any relevant factors going towards value to the owner are 'likely to be components of the true ascertained market value', which are recognisable by the notional Spencer test.[50] Again, the appellants submit that the trial judge failed to have regard to the perspective of the appellants in adopting this approach.
3. By way of broad overview, the respondent submits that the trial judge did not err in law in his approach to the question of value to the owner. The respondent submits that the trial judge applied the correct legal principles in a manner consistent with all the relevant authorities. The respondent submits that the trial judge properly had regard to the fact that a business was being conducted on the Land, and the trial judge did not add an additional qualification that DBW Reynolds' circumstances must be 'rare or exceptional' in order for value to the owner to be applicable. The respondent also submits that there was no error by the trial judge in preferring the expert valuation evidence of Mr Fyson.

1. In order to consider the various issues raised by the appellants in ground 1, it is first necessary to consider in some detail the concept of value to the owner and the various authorities referred to by the trial judge, and the additional authorities relied upon by the parties.
2. It is relevant to observe that whilst the authorities concern the valuation of interests in land, the legislative regimes underpinning the various authorities often differ in some respects from the provisions of the LAA. These differences must be borne in mind.

1. Section 241(2) of the LAA provides that in determining the amount of compensation to be awarded for an interest in land, regard is to be had to the value of the land with any improvements, assessed as on the relevant date, and discounting any increase or decrease in value attributable to the proposed public work.
2. Determining the 'value of the land' involves determining a money equivalent of the land, and doing so by assuming that the land had been sold on the date of its acquisition. The method by which the 'value of the land' will ordinarily be calculated was outlined by the High Court in Spencer v The Commonwealth and is often described as the Spencer test of market value. In summary, it requires the value to be determined by identifying the price of a notional bargain between a hypothetical vendor and a hypothetical purchaser who are prudent and willing, but not anxious, to complete the exchange.[51] Further, it is to be assumed that the hypothetical vendor and purchaser are 'perfectly acquainted' with the land and cognisant of all circumstances and features which might affect its value.[52] Finally, in assessing the price of this notional bargain, it is to be assumed that the hypothetical purchaser would be purchasing the land for the most advantageous use for which it is adapted - also referred to as the land's highest and best use.[53]
3. It is also relevant to observe, as outlined by the respondent in its written submissions, that what is being assessed is the value of the land with improvements, and that costs expended by way of improvements do not necessarily constitute value. However, evidence of the costs of improvements may be relevant to the assessment of the value of the land with improvements.[54] In this regard, Gibbs J held as follows in Collins v Livingstone Shire Council:[55]

... where ... the relevant statute requires compensation to be assessed with reference to the value of the land acquired, evidence of the cost of improvements (whether of actual cost or of what the cost would be at the date of valuation) may be relevant to the value of the land in its improved state, but it is the value and not the cost that is the matter for ultimate determination. Some improvements increase the value of land to a greater extent than the cost, but in other circumstances the cost of an improvement may greatly exceed its value, e.g., because its wasteful design renders it unnecessarily expensive to construct, or because it is redundant or out of place and cannot be put to profitable use having regard to its situation.

...

It was erroneous for the Land Appeal Court to regard the cost of construction [of an improvement] as the proper measure of value; the cost was only one of the facts to be considered in arriving at the value and the weight to be given to it would depend on the other evidence ...

1. The Spencer test of market value has been consistently applied in numerous cases both in this court and in other Australian jurisdictions.
2. However, there is an acceptance in the authorities that in some circumstances the Spencer market value test will not be appropriate and instead the 'value of the land' should be determined on the basis of the 'value to the owner'.

Pastoral Finance Association Limited v The Minister - 'value to the owner'

1. One of the first decisions considering the concept of value to the owner is Pastoral Finance Association Limited v The Minister,[56] where the Privy Council considered an appeal from a decision of the New South Wales Supreme Court concerning the directions by the trial judge to the jury regarding the assessment of compensation for land compulsorily acquired. The appellant had purchased the land for the purposes of moving its successful wool and frozen meat business to the land on the basis that the location would result in increased savings and additional profits for the business. Prior to constructing the necessary buildings to complete the move, the land was compulsorily acquired. The trial was conducted on the basis that the appellant was entitled to compensation for the market value of the land, plus a capitalised amount representing the savings and increased profit that the move would have generated for the appellant's business.
2. Two important principles can be discerned from the decision. The first is that the Privy Council accepted that the appellant was entitled to the value of the land to the appellant. The second is that the appellant was entitled to compensation for the value of the land to them, but not the savings or additional profits. As explained by Lord Moulton:[57]

That which the appellants were entitled to receive was compensation not for the business profits or savings which they expected to make from the use of the land, but for the value of the land to them. No doubt the suitability of the land for the purpose of their special business affected the value of the land to them, and the prospective savings and additional profits which it could be shewn would probably attend the use of the land in their business furnished material for estimating what was the real value of the land to them. But that is a very different thing from saying that they were entitled to have the capitalized value of these savings and additional profits added to the market value of the land in estimating their compensation. They were only entitled to have them taken into consideration so far as they might fairly be said to increase the value of the land. Probably the most practical form in which the matter can be put is that they were entitled to that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it.

1. The reason why an amount additional to the market value of the land was considered appropriate in this case was because the land had a 'special suitability for the use to which the appellant proposed to put it'.[58] The reasons for this 'special suitability' were the location of the land, being within the city boundary and having frontage to Darling Harbour,[59] and the effect of these features on the business being run by the appellant.

1. A second significant case considering the concept of value to the owner is the High Court decision of Boland v Yates. The appellants in the present case place significance on this decision, and in particular the reasons of Gleeson CJ. The appellants also submit that the trial judge placed too great a reliance on the reasons of Callinan J. Accordingly, it is necessary to consider this case in some detail.
2. Boland v Yates was a decision concerning a claim by the respondent alleging professional negligence against his solicitor and barrister for the manner in which the respondent's underlying compensation claim was conducted. The alleged negligence concerned the manner in which the appellants had run the case of special value to the owner. The respondent's case was that the appellants should have run the case on the basis that a hypothetical purchaser in the position of the owner would have paid more for the subject land than an ordinary hypothetical purchaser because the hypothetical purchaser in the position of the owner would have commenced development of the land faster than any other hypothetical purchaser ('the head start case'). The appeal from the Full Court of the Federal Court was allowed, and the High Court concluded that there had been no professional negligence. In order to resolve the question of whether there had been any professional negligence (excluding any issue as to practitioner immunity), the High Court was required to consider the concept of value to the owner, and its application to the facts of that case.
3. The land in question was located in Darling Harbour, and the respondent proposed to develop the land as a retail marketplace. The respondent undertook investigations and developed plans, which were approved by the Sydney City Council. The existing buildings on the land were demolished, but prior to any construction taking place, the Darling Harbour Authority indicated its intention to resume the land. Pursuant to s 12C and s 124 of the Darling Harbour Authority Act 1984 (NSW), the respondent was entitled to receive compensation for the acquired land, and for the purpose of ascertaining the compensation to be paid, regard was to be had to (relevantly) the value of the land taken. There was no statutory equivalent to s 241(6) of the LAA in the relevant statutory regime.
4. Gleeson CJ commenced by acknowledging that the Spencer test of market value was the common starting point for determining the market value of the land.[60] However, the Chief Justice held that in some circumstances, the land in question may have a 'special value' which reflects a value to the owner over and above the price which a hypothetical purchaser may pay.[61] Gleeson CJ referred to the passage from Pastoral Finance outlined earlier in these reasons, and described this as a 'useful explanation of the concept'.[62]
5. Gleeson CJ described the application of the value to owner concept by reference to the decision of Bray CJ in Arkaba Holdings:

[80] It was established in Pastoral Finance Association Ltd v Minister which, has been followed in many subsequent cases, that in some circumstances land may have a special value to the owner which exceeds the market value. If, in a given case, it is contended that such special value exists, that also raises an issue for factual judgment. The subject matter of such factual judgment was explained by Bray CJ in Arkaba Holdings Ltd v Commissioner of Highways:

It is, of course, well established that it is the value to the owner which must be paid, even if that value exceeds the market value . . . The additional element is commonly called 'special value to the owner' . . . But this special value must in my view arise from some attribute of the land, some use made or to be made of it or advantage derived or to be derived from it, which is peculiar to the claimant and would not exist in the case of the abstract hypothetical purchaser. Would a prudent man in the position of the claimant have been willing to give more for this land than the market value rather than fail to obtain it or regain it if he had been momentarily deprived of it?

[81] Bray CJ went on to give, as a typical example of special value, a case where the land is peculiarly adapted to a certain use made of it by the claimant, such as agricultural land worked in connection with a neighbouring residence or farm buildings. (citations omitted)

1. Of particular significance in the decision of Arkaba Holdings, as approved by the Chief Justice, is the emphasis on the value to the owner arising because of some attribute of the land, or some use made of it or to be made of it, or advantage derived from it or to be derived from it, which is peculiar to the claimant, and which would not be captured by the Spencer market value test.
2. Gleeson CJ acknowledged a degree of tension between the concept of value as an exchange value, and the concept of special value to the owner over and above the price that a hypothetical purchaser would pay. However, consistent with the Pastoral Finance decision, Gleeson CJ emphasised that the question for consideration at all times remained the value of the land (or other acquired asset) and not the fixing of compensation for all loss resulting from the resumption or acquisition (leaving to one side any claim for damages founded upon the relevant statutory provisions).[63]
3. Gleeson CJ noted that the dividing line between the value of the land and loss arising from the resumption or acquisition sometimes becomes blurred by claims for special value based on upon what is called 'disturbance' or 'upon wasted (abortive) expenditure'. In this regard, Gleeson CJ referred with approval to the reasons of Dixon CJ and Kitto J in Commonwealth v Milledge,[64] and noted that in a statutory context such as that before the High Court, disturbance or wasted expenditure:

[83] ... can only be justified if they support the conclusion of special value, and not merely some form of loss or damage to the dispossessed owner. In Commonwealth v Milledge Dixon CJ and Kitto J said:

There remains the item of the plaintiff's claim described as business disturbance. Though it was considered convenient in this case, as it often is, to deal with this topic as a separate matter, it must always be remembered that disturbance is not a separate subject of compensation. 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 . . . Disturbance, in other words, 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.

[84] Their Honours went on to make a point about consistency, which has some bearing on the present case. They observed that if the market value of land is determined on the basis of the suitability of land for the more profitable form of use to which the owner was putting it, there could be no justification for finding a special value, on the basis of disturbance, related to such use. That, it was said, would involve an obvious inconsistency, the inconsistency arising out of the assumption on which market value had already been ascertained ... (citations omitted)

1. It is relevant to note here that the statutory regime under the LAA, unlike the regime in Boland v Yates, does include loss or damage arising from 'disruption and reinstatement of a business' under s 241(6)(b) of the LAA.
2. Ultimately, Gleeson CJ held that the respondent's 'head start' claim failed because it was based upon facts which were not found by the trial judge, and it was inconsistent with the manner in which the expert valuers had assessed the market value of the land.[65]
3. In the present case, the trial judge did not refer to the reasons of Gleeson CJ. Rather, his Honour referred to the reasons of Callinan J, observing that the appellants referred his Honour to these reasons in their written opening submissions.[66]
4. Callinan J also agreed that the appeal should be allowed and that there was no negligence on the part of the appellants. Callinan J agreed that the decision of the Full Court of the Federal Court proceeded on the basis of errors of fact.[67] His Honour also held that the facts before the Full Court negatived any 'head start' advantage to the respondent over and above that already accounted for as part of the Spencer test of market value.[68]
5. Callinan J observed that all statutes authorising resumptions of land in Australia effectively require that the relevant compensation court should calculate the value of the resumed property as if it were sold on the date of its acquisition.[69] Further, his Honour observed that it has long been accepted in Australia that the various statements made by justices of the High Court in Spencer v The Commonwealth correctly formulate the principles to be applied in calculating that value.[70] Finally, Callinan J noted that a dispossessed landowner should be compensated for the value of the land on the basis of its highest and best use.[71]
6. Callinan J then went on to consider the concepts of disturbance and special value to the owner together. His Honour described value to the owner as arising where:[72]

The special value of land is its value to the owner over and above its market value. It arises in circumstances in which there is a conjunction of some special factor relating to the land and a capacity on the part of the owner exclusively or perhaps almost exclusively to exploit it.

1. Callinan J went on to express the view that value to the owner will not often arise:[73]

There will in practice be few cases in which a property does have a special value for a particular owner. Obviously neither sentiment nor a long attachment to it will suffice. The special quality must be a quality that has an economic significance to the owner. A possible case would be one in which, for example, a blacksmith operates a forge in the vicinity of a racetrack on land zoned for residential purposes as a protected non-conforming use, the right to which might be lost on a transfer of ownership or an interruption of the protected use. Such a property will have a special value for its blacksmith owner, and perhaps another blacksmith who might be able to comply with the relevant requirements to enable him to continue the use but to no one else.

1. In relation to disturbance, whilst Callinan J referred to the passage quoted by Gleeson CJ from Commonwealth v Milledge, his Honour preferred and endorsed the following explanation of disturbance used by the Australian Law Reform Commission in its report Lands Acquisition and Compensation:[74]

[294] ...'cover[ing] economic losses which result naturally, reasonably and directly from acquisition. It may include such items as removal expenses, costs of necessary replacement of furniture and fittings, legal and other costs of purchasing [an alternative site] and loss of local goodwill'. Some of these items may however also fall under the head of valuation previously referred to as reinstatement. (footnotes omitted)

1. Callinan J observed that in most Australian jurisdictions each of disturbance and special value is a separate statutory head of compensation.[75] Ultimately, his Honour concluded that no question of disturbance loss arose on the facts.
2. Callinan J also considered two decisions said to underpin the application of the 'head start' claim of the respondent and therefore support a claim of value to the owner: Kennedy Street Pty Ltd v Minister,[76] and Baringa Enterprises v Manly Municipal Council.[77] Both are decisions of Hardie J in the Land and Valuation Court of New South Wales.
3. In Kennedy Street, Hardie J considered the valuation of land which the plaintiff had agreed to purchase. The plaintiff was a company that was established for the purpose of acquiring, subdividing and selling land. The plaintiff had paid a deposit and spent money preparing a survey plan, preparing and applying for subdivision approval and undertaking some other work with a view to implementing the approval. The land was then resumed. Hardie J valued the plaintiff's interest in the land as the market value, plus an additional sum representing value to the plaintiff, being a sum which the plaintiff would have paid above the market value. The matters which Hardie J relied on to award value to the owner were that the plaintiff had given close and careful consideration to the problems associated with the proposed subdivision; it had paid stamp duty to acquire it; it had also paid survey fees, engineering fees and the council fee in relation to the subdivision application; that the plaintiff's principal shareholders had acquired knowledge and experience and spent time examining the land and taking the steps appropriate to ensure an expeditious approval of the subdivision; and the length of time that the plaintiff reasonably would require to undertake another similar venture.
4. Callinan J considered that Hardie J erred in concluding that these matters justified an award of compensation on the basis of value to the owner and ought not be followed:[78]

To regard these matters as ones entitling the plaintiff to an allowance for special value is to ignore or misunderstand the formulation in Spencer's case of the principles to be applied in assessing compensation. A vendor armed with the relevant materials, an approval and information which might enable a property to be profitably subdivided would be foolish not to seek and to insist upon obtaining full value for the land or any estate or interest in it having regard to those matters, from any purchaser. And a prudent purchaser would need to be prepared to pay a price accordingly as the utilisation of those materials would enable that purchaser to realise the highest and best use of the property. Everything the plaintiff had in its possession in Kennedy Street was, as is the situation in this appeal, readily transmissible to, and of value to, any purchaser coming into possession of the property.

1. In Baringa Enterprises, Hardie J assessed compensation for land which had been resumed by including a component for value to the owner. Hardie J reasoned that, at the time of the resumption, the plaintiff stood a better chance of obtaining a renewed building approval for the land and successfully undertaking a development than the hypothetical purchaser. By the time of the resumption, the plaintiff had demolished some structures on the land; obtained building approval in principle for the construction of a building to contain shops and flats; obtained plans prepared by an architect; and called for and received tenders for the construction.
2. Callinan J considered that Hardie J had not explained how or why the facts of Baringa Enterprises supported an award of compensation assessed on the basis of the value to the owner and considered that it was a highly questionable decision:[79]

His Honour's statement of the facts does not reveal why a fully conversant purchaser could not, and would not, have been put in possession of all of the information and advantages that the plaintiff was said to have. ... Nor did his Honour explain why the highest and best use might not have been for the construction of a building that had been approved and was beyond the dispossessed landowner's means. If that were the highest and best use there would have been no need for a notional purchaser to seek an approval for a smaller building.

1. Gaudron J agreed with the conclusion and reasoning of Gleeson CJ, save that her Honour also agreed with Callinan J that Kennedy Street was incorrectly decided and should no longer be followed.[80] Gummow J also agreed with the reasons of Gleeson CJ, save that his Honour agreed with the reasoning of Callinan J in relation to both Kennedy Street and Baringa Enterprises.[81]

Cases considering Pastoral Finance and Boland v Yates

1. A number of authorities have considered the concept of value to the owner as considered in Pastoral Finance and Boland v Yates.
2. The appellants referred to the decision of the High Court in Northern Territory v Griffith. This case concerned the assessment of compensation for the extinguishment of native title rights. The subject matter and statutory context were accordingly very different from the present case. However, in the course of the various reasons, both the plurality (comprising Kiefel CJ, Bell, Keane, Nettle and Gordon JJ) and Edelman J, referred to the Spencer test for market value, and the value to the owner. The Spencer test for market value being relevant to assessing the economic value of the native title rights and interest that had been extinguished, with value to the owner being relevant to the assessment of compensation for the additional non-economic or cultural loss occasioned by the consequent diminution of connection to country.[82]
3. Edelman J observed that value to the owner is exceptional in compulsory acquisition cases, but is unexceptional in cases involving native title.[83] His Honour referred with approval to the decisions of Pastoral Finance and the previously cited portion of Bray CJ's decision in Arkaba Holdings in describing the concept of value to the owner.[84] Edelman J also adopted the example used by Callinan J in Boland v Yates of the blacksmith with the protected non-conforming use which will be lost on transfer of ownership as an example of a situation in compulsory acquisition cases where value to the owner is applicable,[85] before going on to conclude that:[86]

The principles of special value, as enunciated, need not be confined to uses made of, or advantages derived from, land that can be immediately translated into money. Indeed, even in cases where the special value concerns a business prospect of financial gain to an owner, the increased or ' special' value of the land is not the capitalised expected profits from the business but the amount that a purchaser in the position of the owner would reasonably pay to obtain the land. Special value can encompass every matter of value to a claimant that extends beyond market value other than issues that are often described as mere 'sentiment'.

1. In the present case, the trial judge referred to a number of additional authorities which considered the concept of value to owner.
2. In Leichhardt Council v Roads & Traffic Authority of NSW,[87] the New South Wales Court of Appeal was required to consider the interpretation of specific sections of the relevant legislation. It is not necessary to set those out in detail. Rather, it is sufficient to observe that in the course of considering the concepts of value to the owner and market value, Spigelman CJ (with whom Beazley, Bryson and Basten JJA and Campbell J) agreed, referred with approval to the following passage of Lord Tucker in Minister for Public Works v Thistlethwayte:[88]

It must not be forgotten that it is the value of the land to the owner that has to be ascertained, and that the willing seller and purchaser is merely a useful and conventional method of arriving at a basic figure to which must be added in appropriate cases further sums for disturbance, severance, special value to the owner and the like.

1. This passage was also referred to with approval by Gleeson CJ in Boland v Yates.[89]
2. In terms of Western Australian authorities, the trial judge referred to two decisions concerning prior compensation legislation applicable in Western Australia: St John Ambulance Association of Western Australia Incorporated v East Perth Redevelopment Authority[90] and Arcus Shopfitters Pty Ltd v Western Australian Planning Commission.[91] In both decisions, reference is made to the Spencer test for market value and the concept of value to the owner. In each decision, the authorities of Pastoral Finance and Boland v Yates are considered.
3. In St John Ambulance, the former Compensation Court concluded that:[92]

The reasoning of the High Court [in Boland v Yates] suggests that unless a claimant shows that another method of determining the value of the land should be adopted, the generally accepted approach is to apply the market value approach in Spencer's case. Where a claim for additional special value is concerned, the reason why there is an onus upon the claimant to substantiate the claim is because the claim is based on the vendor's peculiar perspective. Thus, a claimant may not be entitled to compensation for special value on the basis that its land could, in the future, be subdivided because this would be taken into account by properly applying the Spencer test.

1. The trial judge outlined that the former Compensation Court also cited with approval extracts from A E Radford's article 'Land: Market Value and Special Value in the High Court',[93] to the effect that value to the owner is concerned with 'some feature of the land itself which will excite a higher offer from a potential purchaser over and above the market value of the land' and a claim for value to the owner must be carefully distinguished from disturbance loss, severance and solatium. Further, value to the owner must have nothing to do with the vigour of the personality of the owner nor sentiment for the land.[94]
2. In Arcus Shopfitters, Pullin J held that the usual method of determining the value of land is to apply the Spencer test of market value. However, land may have a special value to the owner over and above the market value. That special value must be something 'objective and ascertainable, derived from the land or some attributable [sic: attribute or] property of it, and cannot be recognised if it rests in mere subjective affection or emotional involvement'.[95] Pullin J also accepted that value to the owner is not to be ascertained by reckoning out savings and additional profits to be derived for the land and then capitalising those savings and additional profits.[96]
3. The trial judge also referred to the decision of Mount Lawley Pty Ltd v Western Australian Planning Commission.[97] This decision concerned the amount of compensation payable under s 36 of the former Metropolitan Region Town Planning Scheme Act 1959 (WA) in relation to land which had been reserved for parks and recreation which the respondent chose to acquire, and a claim for injurious affection in relation to land reserved for a controlled access highway, which the respondent had not elected to acquire. When considering the concepts of market value and value to the owner, the Court of Appeal held that:[98]

In our view, it is likely to be a rare case in which there is a difference between the market value of land and its special value to the owner. That is because the factors of special value are likely to be components of the market value which are recognisable as such by a notional vendor and purchaser who are 'conversant' or 'perfectly acquainted' with the land and all its features.

1. The Court of Appeal referred with approval to Callinan J's observations in Boland v Yates that value to the owner arises in circumstances where 'there is a conjunction of some special factor relating to the land and a capacity on the part of the owner exclusively or perhaps almost exclusively to exploit it'.[99] The Court of Appeal therefore concluded that the concept of value to owner did not extend to the costs of preparing a development application for the Land, as this cost was already reflected in the market value.[100]
2. In relation to Western Australian cases which considered the concept of value to the owner in the context of s 241 of the LAA, the trial judge referred to both McKay v Commissioner of Main Roads[101] and Kelliher v Commissioner of Main Roads.[102] Whilst each authority makes reference to the distinction between the Spencer test for market value and the concept of value to the owner, the latter concept was not relevant in either case.

Cases considering value to the owner in the context of a business being operated on the land

1. The appellants have also referred to a number of additional cases, not referred to by the trial judge in the Primary Decision. These cases concern the valuation of an interest in land, where that land was being used to carry on a business.
2. In The Commonwealth v Reeve,[103] the respondents were lessees of a ground floor room in a large office building in which they carried on a business as a coffee lounge. The entire building was resumed by the Commonwealth and the respondents' claimed compensation for the resumption of their leasehold interest. The Commonwealth did not deny that the respondents were entitled to compensation for the value of their interest in the land. The respondents called evidence regarding the profits generated by the business, the value of various fixtures, the unsuccessful steps taken to find an alternative location in the immediate vicinity, and the valuation of the respondents' tenancy. The Commonwealth did not call any evidence. The trial judge valued the respondents' interest in the land on the basis that by operation of the relevant tenancy legislation, the respondents were entitled to continue in occupation indefinitely, unless an order was made for their eviction on a prescribed ground. Further, on the basis that the business goodwill was associated with the location and was not personal goodwill associated with the individual respondents. The trial judge accepted the evidence of the respondents' valuers as to the value of the tenancy. The Commonwealth appealed on the basis that the trial judge had made errors of law in relation to the principles concerned with the assessment of compensation.
3. The appeal was dismissed with all members of the High Court agreeing that no error of law had been made by the trial judge. Whilst some criticisms were made of the valuation evidence called by the respondents,[104] the court ultimately did not disturb the assessment made by the trial judge on the basis of a combination of the facts as found by the trial judge, the lack of any evidence called by the Commonwealth, and on the basis that it was ultimately a matter for the trial judge as to what weight to give the respondents' evidence.
4. A number of the judgments discuss the legal principles applicable to the assessment of the value of land in the context of a leasehold interest where a business was being carried on from the premises, including the question of value to the owner. Latham CJ held as follows in relation to assessing the value of the respondents' interest in the land:[105]

But when the Commonwealth resumed the land the Commonwealth did not acquire the business, whatever it was, that happened to be carried on in the room, and the Commonwealth did not come under any liability to pay compensation for the loss of the business by the tenants. The measure of compensation is the value of the land, that is, in this case, of the claimants' interest in the land. In this case it happens that the value of such a business as that carried on by the plaintiffs is an important circumstance to be taken into account in determining the value of the tenancy ... This is so because the possibility of using the premises for such a business is one of the valuable features or incidents of tenancy and not because the acquiring authority is bound to pay damages for loss of business or to pay the value of the business. It is often said in compensation proceedings that that which is to be assessed is the value of the land to the owner, and this expression is sometimes understood and applied as if the proposition meant that the owner is entitled to recover whatever loss he may suffer from losing his land. But the point of the phrase ' value to the owner ' is not that the owner is entitled to damages for all his loss consequent upon acquisition of his land, but that the value to the acquiring authority is not the measure of compensation. (citations omitted)

1. Dixon J held that the authorities established that in circumstances where the resumption had deprived a claimant of a business site, the loss of goodwill attaching to that location (and not to the individual claimants themselves) might be awarded.[106] The appellants' written submissions rely on the following passage from his Honour's reasons:[107]

The trade the plaintiffs did in the coffee house depended upon the continuance of their occupation. Once they lost possession of the shop they lost their business. In that sense their business was localized. This gave their right to continue in possession of the coffee shop a special value to them.

1. Dixon J went on to explain that:[108]

Ultimately what is to be found is the value to the owner of the interest taken. All the actual and potential advantages to the proprietor of the interest enter into that value to him. If the goodwill of his business is annexed inseparably to the interest, it may not be possible to disentangle the one from the other. But it is the money equivalent to him found to be contained in the interest expropriated that must be assessed. You cannot simply take the profits of the business and capitalize them at a rate of interest and directly add them to whatever is thought to be the value of the land or interest therein to one who purchases it for some other purpose. That is shown by Pastoral Finance Association Ltd. v. The Minister. But you may be guided in your assessment of the value to the owner of his proprietary interest by weighing the effect such a consideration would have upon a person anxious to step into the owner's shoes in making his estimate of what he would give in order to do so and what effect it would have upon the owner in fixing an amount for which he would be ready to part with his interest. (citations omitted)

1. The second case referred to by the appellants is the decision of Dangerfield v Town of St Peters.[109] This case concerned land which at the time of its compulsory acquisition was zoned for residential use. The owner had, for some time prior to this zoning, leased the land to a company who used the land for rubbish collection and disposal. Because of this pre-existing arrangement, the owner and the lessee could continue to use the land in this manner, notwithstanding the change in zoning. The land had the physical capacity to accommodate rubbish for another 35 to 40 years, and the lease had approximately 23 years to run from the date of the compulsory acquisition. The compulsory acquisition destroyed the lessee's business.
2. Following the compulsory acquisition of land, both the owner and the lessee sought compensation for the value of their interest in the land. At first instance, the trial judge recognised that the land should be valued on the basis of the value to the owner. However, the trial judge was not satisfied that a purchaser of the land would be likely to value the prospective return from the use of the land as a rubbish ground as being so great as to justify payment of a capital price for the land in excess of the price representing the value of the land for recreational purposes in its final form. Further, the trial judge concluded that if, for any reason, rubbish disposal had to cease on the land, considerable expense would be required in order to reduce the surface of the land to a sufficient level form to make it suitable for use as a recreational area. The trial judge therefore valued the land on the basis that the land was not suitable for building purposes or ordinary domestic construction, but was suitable for recreation purposes only.
3. Barwick CJ (with whom McTiernan and Windeyer JJ agreed) concluded that this was the incorrect basis upon which to value the fee simple interest in the land. Rather, Barwick CJ concluded that, in accordance with the test in Pastoral Finance, the appropriate basis upon which to value the land was as land suitable for rubbish collection and disposal. This was the use to which the land had been put to date, and the appellants' preferred future use of the land.[110] This resulted in a higher valuation than awarded by the trial judge. In relation to the concept of value to the owner, after recounting the test from Pastoral Finance, Barwick CJ held:[111]

That is to say, one supposes that the owner of the land, with his knowledge of it and its suitability for the special purposes to which he has been putting it, was considering buying that land for that purpose from a willing seller. The sum he would pay to secure that land for those purposes rather than lose it will be the value of the land to him. The knowledge and experience he had of the particular use to which it could successfully and lawfully be put must be reflected in that sum. Here the owners were familiar with the business of the cartage of city garbage and aware of the potential of this land for the disposal of it. They knew that there was no other land available for that purpose. They knew that the land might lawfully be put to the proposed use for a very considerable time.

...

Suppose the owner appellants to be desirous of obtaining land in that situation for that purpose, what would they prudently give for it rather than lose it? It is pointed out in the Pastoral Finance Case that one does not arrive at that sum by capitalizing the profits which such a person might expect to make by the use of the land in the business concerned: but in my opinion the profitability of that use must be a factor in the assessment of the price which it is found that the owners would give.

1. Whilst the owners' knowledge of the use to which the land could be put in this case was a relevant factor referred to by Barwick CJ, the Chief Justice did not discuss the interaction between that knowledge and the matters to which the hypothetical vendor and purchaser would be assumed to be aware of under the Spencer test of market value. Ultimately, what appears from the decision to be the key basis for upholding the appeal was the error made by the trial judge in failing to identify that the highest and best use to which the appellants could put the land was significantly different from that of the hypothetical purchaser. So understood, this case is similar to the blacksmith example given by Callinan J in Boland v Yates and endorsed by Edelman J in Northern Territory v Griffith - being a non-conforming use which the owners could continue to exploit for many years, which would be lost on transfer of ownership.
2. In relation to the valuation of the lessee's interest in the land, the trial judge valued the business on the basis of the goodwill of the business, which had been destroyed by the resumption. However, the trial judge made some adjustments to this figure which Barwick CJ held should not be made.[112] The issue of the adjustments is not material to this ground of appeal.
3. The appellants also referred to the decision of Emerald Quarry Industries Pty Ltd v Commissioner of Highways (South Australia).[113] In this case, the appellant held a leasehold interest in land resumed for the purposes of a highway. The appellant operated a quarry business on the land. The effect of the resumption was to terminate the appellant's business. There was no dispute that the reserves on the land were sufficient for the balance of the appellant's lease. The trial judge accepted the valuations of two valuers who valued the land on the basis of estimates as to the future profitability of the business, with some deductions and adjustments. To a large extent, the appeal concerned the elements of the valuation exercise carried out by the valuers, none of which are relevant to the present case. The appeal also concerned the interpretation of the relevant legislation, and the extent to which any increase in sales caused by the purpose of the resumption ought be excluded from the valuation of the business.
4. The appellants rely on the following passage of Mason J (with whom Gibbs CJ, Jacobs, Murphy and Aickin JJ agreed):[114]

It has long been recognized that the law of compensation does not limit a dispossessed owner to the recovery of the value to a purchaser of the land which has been taken from him; he is entitled to recover the value which the land has to him for the precise use which he was putting it to at the date of acquisition.

1. In this passage, Mason J was considering whether the particular compensation statute recognised that a person was entitled, in an appropriate case, to recover compensation for disturbance in addition to compensation directly based on the value of the land. Mason J went on to quote with approval the reasons of Dixon CJ and Kitto J in Commonwealth v Milledge, which were also referred to by Gleeson CJ in Boland v Yates and set out in [75] of these reasons as to the interaction between disturbance and value to the owner. The legislation in question permitted an award of compensation for the actual value of the subject land and also the loss occasioned by reason of d[115]urbance.115

Summary of legal principles relating to value to the owner

1. It has been necessary to review the relevant authorities in detail before considering the specific grounds of appeal in order to identify the relevant legal principles that were applicable to the task faced by the trial judge.
2. Relevantly for this appeal, the following propositions can be drawn from the authorities regarding the concept of value to the owner:

(1) The primary task is to give effect to the relevant statutory provisions. In the present case, s 223(8)(a) of the LAA provides that the court is to determine the amount of compensation payable in respect of the taking of the interest in land, having regard solely to the provisions of pt 10 of the LAA and in particular to the matters prescribed in pt 10 div 5 of the LAA.

(2) Section 241 of the LAA (contained in pt 10 div 5) governs the assessment of compensation and identifies a number of different heads of compensation. Section 241(1) provides that in determining the amount of compensation (if any) to be awarded for an interest in land taken under pt 9, regard is to be had solely to the matters referred to in s 241 of the LAA. Relevantly for ground 1 of the appeal, s 241(2) provides that regard is to be had to the value of the land with any improvements, or the interest of the claimant in the land, assessed as on the relevant date, and discounting any increase or decrease in value attributable to the proposed public work.

(3) The reference to 'value of the land' is a reference to the exchange value of the land. Ordinarily, that value will be ascertained by reference to the market value of the land, as outlined in the decision of Spencer v The Commonwealth. That is, by identifying the price of a notional bargain between a hypothetical vendor and a hypothetical purchaser who are prudent and willing, but not anxious, to complete the exchange. It is to be assumed that the hypothetical vendor and purchaser are 'perfectly acquainted' with the land and cognisant of all circumstances and features which might affect its value, and also that the hypothetical purchaser would be purchasing the land for the most advantageous use for which it is adapted.

(4) However, in some circumstances the land may have a special value to the owner which exceeds the market value. In those circumstances it is necessary to value the land on the basis of the 'value to the owner', being the amount which a prudent person in the position of the owner would have been willing to give for the land, over and above its market value, rather than to fail to obtain it.

(5) Value to the owner must arise from some attribute of the land, some use made or to be made of it, or some advantage derived or to be derived from it, which is peculiar to the owner and would not exist in the case of the abstract hypothetical purchaser and be captured by the Spencer test of market value. Matters of sentiment are not sufficient.

(6) Both market value and value to the owner are applicable when determining the value of an interest in land on which a business has been operating. However, at all times what is being determined is the value of the land or the interest in the land and any improvements. In the context of value to the owner, matters such as the cost of improvements or profits or savings that may be made from the land may be relevant for estimating the value of the land to the owner. However, the owner is not entitled to simply add the cost of improvements to the value of the land, or to have the capitalized value of these profits or savings simply added to the market value of the land. That is, the owner is entitled to the value of the land with improvements, and not compensation for all loss resulting from the resumption or acquisition.

(7) Finally, it is also important to observe that s 241 of the LAA contains other heads of compensation to which regard should be had, including s 241(6) of the LAA.

1. When the reasons of the trial judge are read as a whole, his Honour did not add a qualification that value to the owner will only be applicable in rare or exceptional cases, or require DBW Reynolds to establish that its case was rare or exceptional.
2. The trial judge observed that the usual method by which the value of an interest in land is ascertained is by applying the Spencer test of market value. However, his Honour acknowledged and accepted that in some cases a value greater than that which may be ascertained by applying the Spencer test may applicable. His Honour then observed that the circumstances in which value to the owner will be applicable are rare and exceptional because the factors going towards value to the owner are likely to be components of market value recognisable under the Spencer test. This is simply an observation about what is usually the position as a matter of fact as opposed to stating an inflexible rule of law, and one which is borne out by the authorities. This observation has also been echoed in other authorities, including Mount Lawley Pty Ltd v Western Australian Planning Commission;[116] by Edelman J in Northern Territory v Griffith;[117] and by Callinan J in Boland v Yates.[118] Whilst not expressly put in these terms by Gleeson CJ in Boland v Yates, the trial judge's observation is not inconsistent with the Chief Justice's reasons.[119]
3. The trial judge concluded that value to the owner was not applicable because all of the factors relied upon by DBW Reynolds as demonstrating value to the owner were already accounted for in the Spencer market value test; because DBW Reynolds did not hold any special qualities supporting a value to the owner over and above market value (as it was a passive landowner who rented out the Land); because any economic loss component of the value to owner claim of DBW Reynolds would be encompassed by the claim for economic compensation made by Century West; and because aspects of the appellants' claim to compensation went beyond the statutory text and were akin to a claim for tortious reliance loss damages.[120] The trial judge did not conclude that value to the owner was not applicable because DBW Reynold's case was not rare or exceptional.
4. Accordingly, the trial judge did not err in the manner alleged in issue (1) of ground 1.

Issue (2) - failure to have regard to aspects of Boland v Yates and Northern Territory v Griffiths

1. The appellants also claim that the trial judge erred in law by failing to have regard to the reasons of Gleeson CJ in Boland v Yates (with whom Gaudron and Gummow JJ agreed). In particular, the reference by Gleeson CJ to the decision of Bray CJ in Arkaba Holdings. The appellants also submit that the trial judge did not have regard to the reasons of Edelman J in Northern Territory v Griffiths. The appellants submit that in failing to have regard to these reasons, the trial judge was 'deprived of highly relevant authority'.
2. It may be accepted that the trial judge did not refer in his reasons to the above authorities. However, the appellants do not explain what error results from the trial judge being 'deprived of highly relevant authority'. Leaving aside the other specific errors identified in the appellants' written submissions for this ground (which are each considered separately in these reasons), the appellants do not identify how the task undertaken by the trial judge was inconsistent with or contrary to the reasoning of Gleeson CJ, Bray CJ or Edelman J. His Honour's review of the cases and the key legal principles drawn from this review is not obviously inconsistent with the reasoning of Gleeson CJ in Boland v Yates, Bray CJ in Arkaba Holdings or Edelman J in Northern Territory v Griffiths. Further, as will be explained later in these reasons, the application of these legal principles by the trial judge was also not obviously inconsistent with the above authorities.
3. Accordingly, no error of law has been established.

1. The appellants' case in relation to this issue is that the trial judge erred in concluding that the question of whether value to the owner was applicable was, 'essentially a question of law for the court'.[121] The appellants submit that, consistent with the decision of Gleeson CJ in Boland v Yates, the question of whether there is any value to the owner is a question of fact, and to conclude to the contrary is an error of law.
2. The relevant paragraph of the Primary Decision is as follows:[122]

Here, I ought first observe that merely because some of the four engaged expert property valuers under their revised conferral statement prepared for trial (exhibit 22) ventured to express views about 'value to the owner', that any such views will not be determinative, upon what is essentially a question of law for the Court concerning a potential engagement with such a principle in all the circumstances.

1. Whilst the trial judge refers to 'a question of law', when the paragraph is read in full and in context it becomes apparent that the trial judge understood that the ultimate question was whether, on the facts of the case, value to the owner was applicable. The trial judge had previously outlined that the dispute between the parties as to the applicability of the concept of value to the owner was a question of 'principle' rather than one raising any real arguments over the features of the Land or the circumstances of the appellants pleaded in support of the claim for value to the owner.[123]
2. In the paragraph in question, the trial judge goes on to observe that merely because an expert valuer expresses an opinion as to value on the basis of value to the owner is not determinative of the answer. Rather, it is for the court to then consider whether value to the owner, as that legal concept is understood, has been established on the facts. So understood, no error is revealed by the paragraph.
3. However, to the extent the trial judge did err by referring to the question as being a question of law, we do not consider any such error to be material to the conclusion of the trial judge. This is because, for the reasons set out below in relation to the next aspect of ground 1, the trial judge did consider, as a question of fact, whether any value to the owner had been demonstrated. The trial judge considered the pleaded case, the relevant case law and the evidence of the valuers and concluded that no value to the owner had been demonstrated over and above market value.

Issue (4) - failure to ask the correct question/apply the correct test

1. The appellants submit, as part of issue (4), that the trial judge erred by applying the incorrect legal test. The appellants submit that the trial judge did so by failing to have regard to the fact that a business was being operated on the Land, and in so doing failed to ask the correct question - being, 'what would a claimant with full knowledge of the precise use of the land and the business conducted thereon reasonably pay, rather than fail to gain it?'. The appellants also submit that in answering this question, the trial judge was entitled to have regard to the knowledge of the appellants as to the precise use to which the land was being put, the profitability of the claimant, or hypothetical profits from modernisation and to every matter of value that extends beyond market value.
2. It is correct that the trial judge did not use the precise formulation, 'what would a claimant with full knowledge of the precise use of the land and the business conducted thereon reasonably pay, rather than fail to gain it?'. However, when the reasons of the trial judge are read as a whole, they do not reveal any error in the trial judge's identification and application of the correct legal test.
3. The Primary Decision reveals that in considering whether value to the owner was applicable in the present case, the trial judge:

(1) identified that the primary task was to give effect to the relevant statutory provisions, being s 241 of the LAA and the requirement that the court determine the value of the Land with any improvements;[124]

(2) approached the compensation task on the basis that the reference to the 'value of the land' is a reference to the exchange value of the land which will ordinarily be ascertained by reference to the market value of the land in accordance with the Spencer test of market value - including that the land be valued on the basis of the highest and best use of the land and on the basis that the hypothetical vendor and purchaser are 'perfectly acquainted' with the land and cognisant of all circumstances and features which might affect its value;[125]

(3) understood and accepted that in some circumstances land may have a special value to the owner which exceeds the market value. The trial judge identified the test as being one in which value to the owner is the amount which a prudent person in the position of the owner would have been willing to give for the land, over and above its market value, rather than to fail to obtain it;[126]

(4) understood that value to the owner must arise from some attribute of the land, or some use of it which is peculiar to the owner and would not exist in the case of the abstract hypothetical purchaser and be captured by the Spencer test of market value;[127]

(5) accepted the underlying facts upon which DBW Reynolds based its claim for value to the owner and applied the test articulated to those facts;[128] and

(6) was cognisant of the other heads of compensation under s 241 of the LAA.[129]

1. The trial judge's reasons for concluding that value to the owner had not been established in this case also demonstrates that his Honour applied the correct legal test. The trial judge concluded that there was no difference between the market value of the Land and the value of the Land to DBW Reynolds. This was because the Spencer test for market value took 'full account of all laudable features of the taken land and the efforts of Mr and Mrs Reynolds over time in assembling the aggregate parcel of land over the years - for the purposes of establishing what was a very efficient road haulage transportation depot as its industrial use'.[130] As identified by the trial judge, the various assessments of market value by all the valuers had all been undertaken on the basis that the highest and best use of the land was 'the existing light industrial use of the land as permitted' which included the three road frontages and 'the potential for individual sale of the lots as per the titles, or in 'groups' of lots'.[131]
2. In reaching this conclusion, the trial judge applied a test which looked to an element of value over and above that of the market value, when considered from the perspective of DBW Reynolds. His Honour's reasons demonstrate that he had regard to the fact that a business was operated from the Land and that the Land consisted of six lots which could be sold individually or in groups. The reasons also reveal that his Honour applied a test whereby value to the owner had to arise from some attribute of the Land, some use made or to be made of it or advantage derived or to be derived from it, which is peculiar to DBW Reynolds.
3. The trial judge contrasted DBW Reynolds' situation with that of the blacksmith example referred to by Callinan J in Boland v Yates and endorsed by Edelman J in Northern Territory v Griffiths.[132] The trial judge held that DBW Reynolds was not in the same position as the blacksmith and did not hold any similar 'special qualities'. That is, this was not a case of DBW Reynolds being in a position where because of the use being made of the Land, or some advantage being derived from it, there was a greater value to DBW Reynolds than what was already accounted for in the Spencer test of market value. That is, unlike the blacksmith example, the market value of the Land already encompassed the highest and best use of the land from DBW Reynolds' perspective. In utilising the blacksmith example, the trial judge captured the various elements of the concept of value to the owner.
4. The trial judge concluded that to the extent there was an economic loss component to DBW Reynolds' claim under s 241(2) of the LAA, that was a matter which more properly fell within the scope of Century West's claim under s 241(6) of the LAA.[133] That is, the trial judge had regard to the express statutory scheme and the other available heads of compensation.
5. The trial judge also concluded that the appellants' case was based on 'something akin to tortious reliance loss damages'.[134] In so concluding, the trial judge correctly proceeded on the basis that the question was one of value and not of costs incurred.
6. In considering DBW Reynolds' claim for value to the owner, the trial judge considered the specific pleading of the appellants as to the basis of the claim for value to the owner. Specifically, that DBW Reynolds had spent a considerable amount of time and effort both in putting together the Land so that it constituted the ideal shape and configuration for the efficient running of the business of the second appellant, and in constructing the improvements erected on the Land, all of which collectively support a compensation valuation for the Land calculated on the basis of value to the owner. The particulars then detail Century West's business, the time spent by DBW Reynolds and the various improvements constructed on the Land by DBW Reynolds.
7. As outlined above, the trial judge considered these matters (and the further explanation provided in the written opening and closing submissions) as part of applying the test of market value. The appellants have not indicated with any specificity any additional matters to those pleaded regarding the knowledge of the appellants as to the precise use to which the Land was being put; the profitability of the appellants; or hypothetical profits from the modernisation which the appellants submit the trial judge ought to have had regard to but did not.
8. Rather, the basis of DBW Reynolds' case is that even if the features had been considered as part of the assessment of market value, they had not been considered from the perspective of DBW Reynolds. Senior counsel for the appellants emphasised that the test must consider the value from this perspective.[135]
9. The concept of value to the owner does consider the value of the land from the perspective of the owner, as opposed to the exchange value that would be agreed between the hypothetical purchaser and valuer. However, there are two aspects to the concept of value to the owner. First, that there is some special feature or attribute of the land, or some use made or to be made of it or advantage derived or to be derived from it, and secondly that such a special feature or attribute is peculiar or unique to the owner and would not exist in the case of the hypothetical owner and purchaser scenario. As explained by Callinan J in Boland v Yates, it is the conjunction of these two factors which brings about the existence of a value which from the owner's perspective is greater than that of the market value.
10. In the present case, the trial judge concluded that the particular features of the Land, including the use of the Land, which comprised the pleaded case of value to the owner were not peculiar or unique to DBW Reynolds and/or were already captured by the Spencer test of market value. In these circumstances, the trial judge concluded that there was no difference between the market value of the Land and the value to the owner. This line of reasoning involves considering the question of value from the perspective of DBW Reynolds.
11. Nothing in the above reasoning process of the trial judge is inconsistent with anything in the authorities referred to earlier in these reasons, including the specific cases referred to by the appellants concerning the resumption of land in circumstances where a business is operating on the land.
12. The trial judge's approach is not inconsistent with the reasoning of either Gleeson CJ or Callinan J in Boland v Yates, nor is it inconsistent with the reasoning of Bray CJ in Arkaba Holdings.
13. The appellants placed particular significance on the Dangerfield decision. However, this case does not assist the appellants. Unlike the owner of the land in the Dangerfield case, DBW Reynolds did not possess some form of special advantage to either continued use of the Land, or to continued renting of the Land, for a purpose or in a manner not enjoyed by the hypothetical purchaser. In Dangerfield, that special advantage concerned the ability to continue renting or using the land for a purpose which was no longer permitted under the altered zoning of the land. In the present case, the Land was zoned for light industrial purposes, and that was its use by Century West. Unlike in Dangerfield, the market value of the Land already encompassed the highest and best use of the Land from DBW Reynolds' perspective - which was also the highest and best use of the Land from the hypothetical purchaser's perspective.
14. The decision of the trial judge is also not contrary to the decisions of The Commonwealth v Reeve or Emerald Quarry Industries. The market value of the Land was assessed by all valuers on the basis that the highest and best use of the Land was the current use, with the ability for DBW Reynolds to sell the Land as individual lots, or in groups of lots.[136] The trial judge accepted that the Land was being rented by DBW Reynolds to Century West for a transport business at a market rent.[137] His Honour did not fail to have regard to the business being conducted on the Land.
15. Finally, the appellants refer to the statement by the trial judge that, as far as Century West is concerned, there is no recognisable concept of value to the lessee[138] and submit that in this regard, the trial judge erred. It is not necessary to consider this aspect of his Honour's reasons. Even if this was an error of law, the error was not material to the decision as there is no claim under s 241(2) of the LAA by Century West. Further, nothing in this statement detracts from the other aspects of the trial judge's reasons for concluding that there was no value to the owner above the market value in relation to DBW Reynolds' interest in the Land.
16. Accordingly, the trial judge did not err in law or in fact in the manner alleged in issue (4) of ground 1.

Issue (5) - valuation evidence relied upon by the trial judge

1. The last aspect of ground 1 is the appellants' submission that the trial judge had regard to the incorrect valuation evidence by adopting the valuation of Mr Fyson, as opposed to the valuation of Mr Garmony. The appellants then invite the court to accept the value to the owner valuation of Mr Garmony, with some adjustments to reflect the quantity surveyor evidence relied on by the appellants.
2. This aspect of ground 1 is premised on the assumption that the trial judge has made an error of law or fact in concluding that there was no value to the owner over and above the market value of the Land, and therefore that it was an error to accept Mr Fyson's market value valuation over Mr Garmony's value to the owner valuation. Given our conclusion that the trial judge did not make an error of law in identifying and applying the incorrect test when considering the concept of value to the owner, there is no error in the trial judge proceeding to accept Mr Fyson's market value valuation over Mr Garmony's value to the owner valuation.
3. To the extent the appellants, as part of ground 1, submit that the trial judge erred in preferring Mr Fyson's approach to the evidence of the quantity surveyors over that of Mr Garmony's approach, it is important to observe that this aspect of Mr Fyson and Mr Garmony's evidence concerned their assessment of the market value of the Land. Accordingly, we have considered this issue as part of ground 2 of the appeal.

1. For the above reasons, none of the errors raised by the appellants in ground 1 of appeal have been established and the ground should be dismissed.

1. Ground 2 proceeds on the assumption that the correct basis upon which to value DBW Reynolds' fee simple interest in the Land for the purposes of s 241(2) of the LAA is by determining the market value of the Land.
2. The appellants' case is that the trial judge erred 'in principle' in preferring Mr Fyson's valuation of the market value of the Land and should instead have preferred Mr Garmony's valuation. The appellants do not submit that the trial judge ought to have preferred the valuation of Ms Jenny Le-Fevre.

1. Prior to considering the reasons of the trial judge, it is helpful to summarise the valuation evidence before the trial judge. As this ground of appeal is concerned with whether the trial judge should have preferred Mr Garmony's valuation over that of Mr Fyson, this summary deals with these valuers' evidence only, unless otherwise necessary to understand the trial judge's reasons.
2. The parties called both expert valuers and quantity surveyors.
3. Turning to the quantity surveyors, the appellants relied on the report of Paul Rafferty, whilst the respondent relied on the report of Stephen Bolt. The quantity surveyors also attended a joint conferral and produced a joint report. The quantity surveyors each revised the figures in their original costings after the conferral. The references in these reasons to any figures are to the revised figures.
4. Mr Rafferty undertook the task of estimating the cost of rebuilding the improvements present on the Land as at April 2013. Mr Rafferty received a set of drawings for the improvements on the Land and ultimately calculated a replacement cost estimate of $3,649,010.98.[139]
5. Mr Bolt also calculated a replacement cost estimate for the improvements on the Land as at April 2013. However, Mr Bolt went about this task by way of estimating the replacement costs of the improvements on what he considered to be an equivalent site located at 2 and 3 Nardine Close. Mr Bolt derived a series of rates per square metre for various elements of the improvements. Mr Bolt then conducted an exercise of applying those rates to the details of the improvements for the Land. Mr Bolt ultimately prepared a replacement cost estimate for the improvements on the Land as at April 2013 of $2,946,709.76.[140]
6. In terms of the valuation evidence, in valuing the Land Mr Garmony considered and used three different valuation methodologies: the comparable sales method, the summation method and the hypothetical development method. Mr Garmony (like all the valuers) revised his valuation as contained in his original report following the joint conferral of the valuers. There is nothing inappropriate in doing so. The various valuations referred to in these reasons are to the respective revised valuations of each valuer.
7. Mr Garmony assessed the market value of the Land using the comparable sales method as being between $8,225,000 (being $550 per m2) - $8,975,000 (being $600 per m2).[141] In adopting this method, Mr Garmony directly compared similar properties sold and leased for the whole of the improved land on an en globo basis and not as six individual lots.
8. Mr Garmony assessed the market value of the Land using the summation method as being $9,360,000. Mr Garmony described the summation method as being 'the value of the land plus the depreciated value of the improvements'.[142] In adopting this valuation, Mr Garmony assessed the unimproved value of the Land at $5,980,000 (being $400 per m2) and assessed a depreciated value for improvements of $3,381,765.[143] In relation to the depreciated value for improvements, as the trial judge observed, this figure was essentially arrived at from the costing figures provided by Mr Rafferty, which Mr Garmony then depreciated at a uniform rate of 5%.[144]
9. Mr Garmony also assessed the market value of the Land using a hypothetical development method. This method is a form of feasibility analysis in which the development of the land is envisaged in a hypothetical exercise and all estimated costs of the proposed development are taken into account, so as to derive an underlying land value. Mr Garmony explained that he used this method as a 'check'.[145] Mr Garmony assessed the market value of the Land using this method at $8,635,000.[146]
10. Mr Fyson valued the market value of the Land using the summation method and an income capitalisation method.
11. Mr Fyson assessed the market value of the land using the summation method at $8,500,000. Mr Fyson described the summation method as adding 'depreciated replacement cost new of the improvements to an assessed land value'.[147]
12. Mr Fyson first assessed the unimproved value of the Land alone by using comparable sales to identify a value. Unlike Mr Garmony, Mr Fyson did not value the Land as on an en globo basis, but instead valued the lots individually, with the value varying between $425 per m2 to $445 per m2 depending upon the lot. Mr Fyson explained this aspect of his valuation as follows:[148]
    • Whilst at the Date of Valuation the site was used as a single contiguous parcel, I have not treated the land as a 14,950m2 site but as six (6) individual lots with each having an individual title, dedicated street frontage and individual access (notwithstanding crossovers would need to be constructed on Lots 729, 739 and 741 if disposed of piecemeal / individually);
    • It is appropriate to treat the land as 6 separate titles given the advantages it affords the land owner, in the ability to individually sell off parcels in a variety of configurations. As the built form improvements are wholly within Lot 757 with no encroachment, individual lots could be readily sold without impacting on structural improvements and the continuing use of lot 757 in isolation.
13. Mr Fyson's total revised unimproved value of the Land was $6,500,395.[149] To this figure, Mr Fyson added the value of improvements, which Mr Fyson assessed at $2,248,775.[150] Mr Fyson included in his valuation report a detailed explanation of the improvements based on his own inspection and photographs he had been provided with.[151] In calculating the value of the improvements, Mr Fyson adopted the following approach:[152]

(311) The Summation approach to value adds the depreciated replacement cost new of the improvements to an assessed land value, and has been calculated by reference to Quantity Surveyors Cost Handbooks.

(312) I have referred to Rawlinsons Construction Cost Guide 2013 and Cordell Building Cost Guide May 2013.

(313) I am not a Quantity Surveyor, but it is common practice for a Valuer to refer to construction cost guides in order to arrive at square metre rates for application to built form structures as a means of assessing the added value of improvements.

(314) The cost guides provide guidance as to the replacement cost new, and thereafter an appropriate depreciation factor is applied which recognises the age, functionality and use of the improvements.

(315) In addition to consulting the Rawlinsons and Cordell cost guides, I have been provided a copy of a Joint Statement of the Quantity Surveyor (QS) experts.

(316) The QS experts provide opinions as to the building cost at the Date of Valuation in April 2013 for the improvements on the subject property.

(317) The report provides a comparison of costs to reconstruct the subject improvements versus a new facility at Lots 2 & 3 Nardine Close, Forrestfield.

(318) I note the QS estimates include all costs associated with developing a new site, being similar to an insurance assessment of a complete replacement / reinstatement cost. The QS estimates include preliminary & design fees, and a contingency factor.

(319) For market valuation purposes, I have assessed the depreciated replacement cost of the improvements which when added to the underlying land value produce a total summated value.

(320) Such an assessment excludes items such as initial design and preliminary fees, being such costs already incurred by a developer. The market is not going to pay for these sunk costs when purchasing an improved property.

(321) I can however infer from the QS Joint Statement applicable square metre rates to apply to the subject improvements.

1. Mr Fyson explained his reasons for looking at both the quantity surveyor figures and those from the Rawlinsons and Cordell cost guides in his evidence in chief:[153]

And there was a couple of reasons for looking at both: for starters, both Rafferty and Bolt were looking at a reinstatement assessment, so there were a number of additional costs included in their assessments, such as headworks, contingency fees, other professional fees. I wanted to isolate those fees out because as part of the summation, we're looking at the depreciated replacement cost of improvements, not costs that were sunk years ago by a developer.

And so the other reason is in applying the summation on a piecemeal basis to each individual lot, I needed to be able to break up that improvement value, whereas it's an all-encompassing figure in the QS estimates. It covers the whole depot site. So I looked at a portion in the external works to each individual lot and the primary improvements of external works to lot 757. But having the QS reports, they provide excellent guidance as to the unit rates, which I looked at comparatively to things like Rawlinsons Construction Guide, which is an industry-standard construction guide, and they were all consistent.

So the rates applied to the improvements were consistent with those of the QS experts. My external work allowance reflected a figure closer to the Rafferty allowance than the Bolt allowance. But that's - that's, in essence, how I arrived at the replacement costs ...

1. Mr Fyson applied a variable depreciation rate to the cost of the improvements for the following reasons:[154]

(324) As tabled above, depreciation rates have been applied to individual components, recognising different use and function. Higher rates have been applied to the older hardstand, with such external improvements having a shorter lifespan comparative to built form structures. There is a higher degree of wear & tear on hardstand for a trucking depot comparative to say the office building.

(325) I do recognise the improvements are modern, the majority of which were constructed in late 2008 /early 2009, but also include more recent hardstand on Lots 728 & 729. Accordingly, a lower rate of depreciation has been applied to these lots.

(326) The rates adopted for the main structures fall within the range provided by the QS experts in their Joint Statement.

...

(328) My allowance sits at the upper end of the range provided by the QS experts being $1,165,543 ($77.96/m²) to $1,510,203 ($101.02/m²).

1. Mr Fyson then applied a 3% discount to this figure for 'profit and risk' for the following reason:[155]

My assessment allows for a small [profit and risk] factor to reflect costs to sell off lots individually (reinstate fencing, crossovers plus a small return for time to do so).

1. Mr Fyson also undertook an income capitalisation assessment of the Land. Mr Fyson's assessment using this method was $6,720,000. Mr Fyson observed that this assessment arrived at a 'considerably lower value' than his summation method valuation. Mr Fyson concluded:[156]

(384) The subject property is in my opinion well suited to an owner occupier, and would appeal to this market segment. An owner occupier may be willing to accept a lower return and pay a higher value comparative to an investor for a property that suits their requirements, whereas an investor looks at the potential rental return or redevelopment prospects.

(385) The subject property, given its use as a trucking depot, is underdeveloped at a site coverage ratio of 7.20% over the combined 14,950m² landholding. The income producing built form improvements are somewhat minimal, with the site predominantly providing for bituminised hardstand. The summation approach recognises the high cost of constructing this heavy duty hardstand.

1. Mr Fyson therefore did not base his final assessment of the market value on the value derived from the income capitalisation approach. In the conferral process (but not his original report), Mr Fyson also engaged in a direct comparable sales approach by which he assessed the market value of the Land and improvements on a whole site basis at between $7,900,000 - $8,290,000.[157] Mr Fyson considered this to be within the range of his preferred summation valuation.[158]
2. It is also necessary to say something about Mr Hall's valuation. Mr Hall assessed the market value of the Land using the summation method, the income capitalisation method and the comparable sales method.
3. Using the summation method, Mr Hall assessed the unimproved value of the Land at $5,678,000 by valuing the individual lots.[159] Mr Hall then applied a 'bulk discount' of 10% to the unimproved land value on the assumption that a single buyer would buy all the lots.[160] Mr Hall valued the improvements at $2,065,000, a figure arrived at by using the Rawlinsons costs guide.[161] Mr Hall applied varying depreciation rates to the improvements, based on their age, condition and utility.[162]
4. Mr Hall's final assessment of the market value of the Land using the summation method was $7,750,000.
5. Mr Hall also assessed the market value of the Land using the income capitalisation method at $6,770,000.[163] However, Mr Hall concluded that this method did not best reflect the value of the property due to its low site coverage ratio.[164]
6. Mr Hall then conducted a check of these valuations against sales of other industrial properties, which reassured Mr Hall that his summation method valuation was his preferred valuation.[165]
7. Mr Garmony, Mr Fyson and Mr Hall all agreed that the summation method was the most appropriate method by which to value the market value of the Land.[166] All three valuers also agreed that the capitalisation method was not appropriate as it did not properly have regard to the owner/occupied nature of the Land and did not assess the Land on the basis of its highest and best use.[167] Further, due to the unique nature of the Land, consisting of a single parcel but in six individual titles, there were limited comparable sales.

1. Having determined that it was appropriate to value DBW Reynolds' interest in the Land on the basis of the market value of the Land, the trial judge spent some time outlining the evidence given by the valuers as to their assessment of the market value of the Land.
2. The trial judge commenced by outlining the matters which were agreed between the valuers at their expert conferral, and which were reflected in the revised valuers' conferral statement. These matters included the date of valuation; that the Land was held in fee simple by DBW Reynolds; that the Land had three street frontages; that the Land consisted of six separate titles; that at the date of valuation the Land was leased to Century West - but as this was a related company, the valuers valued the Land on the basis that it was owner‑occupied; that the Land was located in an expanding established industrial area in close proximity to the airport and road train rated routes; that the Land was zoned 'light industrial' under the relevant planning documents; and that the highest and best use of the Land was the existing industrial use with the potential for individual sale of the lots as per the titles, or in 'groups' of lots.[168]
3. The trial judge observed that the valuers had each used various valuation methodologies as part of their respective market value valuations of the Land. However, the trial judge observed that by the time of the trial at least Mr Fyson, Mr Garmony and Mr Hall all favoured the use of the summation valuation methodology as their preferred method for valuing the Land.[169]
4. The trial judge spent some time discussing the various comparable sales relied upon by the valuers as part of their respective valuations of the unimproved value of the Land. It is not necessary to detail this aspect of his Honour's reasons for the purposes of this ground of appeal.
5. The trial judge ultimately concluded that he preferred the valuation analysis of Mr Fyson. His Honour's reasoning was as follows.
6. First, the trial judge considered the evidence of the quantity surveyors, and the use made by the valuers of this evidence. In relation to the respective quantity surveyors, the trial judge concluded that:[170]

My end assessment of all this quantity surveyor expert evidence is that it was apparent that both quantity surveyors were highly competent and articulate professionals, as well as being meticulous in their work.

1. The trial judge rejected criticisms directed at Mr Bolt in terms of his suggested over-reliance on using the data extracted by him from a widely used and industry respected Rawlinsons Cost Guide for some of his costing inputs concluding that this:[171]

did not, on my view, provide any convincing basis for preferring the views of Mr Rafferty over those of Mr Bolt. Given what was a relatively low level fiscal scale for the overall exercise, I would commend the approach of not 'over-egging the pudding', where possible.

1. The trial judge also rejected the criticism of Mr Bolt's approach of working out a replacement cost to construct essentially the like array of improvements (to those on the taken land) upon the Nardine Close site, rather than by reference to conducting the same exercise from inception on the Land, concluding that this:[172]

again did not seem to me to provide a legitimate or convincing basis for differentiating as between the work of the two quantity surveyors.

1. However, the trial judge did conclude that not all cost items included by the quantity surveyors were appropriate. His Honour concluded that the amount allowed for the costs of the accommodation building by Mr Rafferty should be removed, as this item was a tenant's fixture of Century West and allowed for under another head of compensation.[173] The trial judge also concluded that three further items should be rejected on a conceptual basis. These were an allowance for demolition (included by each quantity surveyor) which the trial judge found was not directed towards the value of the improvements,[174] and also Mr Rafferty's allowances for a contingency or headworks, which the trial judge held were sunk costs.[175]
2. The trial judge also questioned the need for and use to be made of the quantity surveyors' costings. His Honour considered that the matter was ultimately one of value and not cost:
   1. The quantity surveyor evidence was said to have been procured and assembled for a purpose of assisting the expert property valuers in their task, particularly by reference to assessing the value for improvements on the taken land, as at April 2013.
   2. Accordingly, it was then for the property valuers to make such use of that quantity surveyor report material, as they saw fit.
   3. I would observe that for most land resumption compensation cases, even when applying the summation valuation methodology (which attributes independent values for the land, then for its improvements, and ultimately aggregates those two sums), an experienced property valuer would usually not need to have recourse to a specialist quantity surveyor's report - minutely inquiring back into the cost of reconstructing afresh all the land's improvements. I repeat that the compensation exercise and the property valuer's task is, as a matter of principle, fundamentally concerned with the issue of value, not the cost of construction. Sometimes quantity surveyors will be able to provide what will be some relevant costing inputs - to assist with aspects of that ultimate valuation exercise. But primarily, it is for the property valuers themselves to receive, review, weigh, adjust and assimilate the costing input information they need and have at their disposal - as they see fit.
3. The trial judge observed that in the present case, the quantity surveyor evidence was 'economically disproportionate' to the amounts in dispute between the parties and overly complicated what should have been a more 'straightforward exercise in valuation'.[176] The trial judge concluded:
   1. Unless an expert property valuer explicitly says that a quantity surveyor's report is required for their purposes of reliably completing their valuation task, for most cases it is for the property valuer to utilise their own considerable experience and training. That will invariably extend to their access and use where required to historically collected industry cost referencing source pricing information - such as to be found in publications such as Rawlinson's Cost Guide for the appropriate historic times. Usually, the exercise can be left entirely to the industry property valuers who, by their training and day-to-day work, are very well familiar on a routine basis with those costing reference sources. Here, the scale of the quantity surveyor evidence adduced was disproportionate to the overall property valuation exercise to be undertaken. For the future, I would not allow it as a claimable disbursement, if claimed at a subsequent costs taxation - on either side.
   2. But given such exercises by the quantity surveyors being undertaken, there can be no criticisms here directed towards any of the property valuers - by having recourse to this material provided to them. My wider point, however, is that the quantity surveyors' costing evidence is just one mere input - in a much greater dimension valuation exercise being undertaken by the property valuers.
4. Secondly, in relation to Mr Garmony's summation method valuation, the trial judge observed that the depreciated value for improvements was essentially arrived at from the figures provided by Mr Rafferty, which Mr Garmony then depreciated at a uniform rate of 5%.[177] However, his Honour concluded that the following deductions would need to be made from Mr Garmony's depreciated value for improvements:

(1) First, the trial judge considered it was appropriate to deduct the drivers rest area improvement at a depreciated rate of $64,241. This was a demountable structure that was left on the Land at the request of the respondent, and for which Century West advanced a separate claim which was accepted by the respondent.[178]

(2) Secondly, his Honour deducted the 'depreciated contingency' in the amount of $161,037 on the basis that such a contingency 'cannot be supported in principle, given the nature of the exercise looking back, not forwards'.[179]

(3) Thirdly, the trial judge deducted the professional fees of $291,174, on the basis that these were 'a fully sunk cost and not bearing on the market value valuation end task required'.[180]

1. Following these deductions, Mr Garmony's revised figure for depreciated value of improvements, as calculated by his Honour, was $2,852,169. This resulted in a revised value for the Land with improvements adopting the summation method of $8,835,169. The trial judge observed that this adjusted amount was roughly only $100,000 below Mr Garmony's valuation arrived at by way of the comparable sales method approach (which was $8,975,000). His Honour also concluded:
   1. That number is broadly speaking within the range of the defendant's expert property valuer's (Mr Fyson) summation end amount of $8,500,000 - comprised by Mr Fyson's land component amount of $6,500,395 added to his depreciated improvements amount of $2,248,775.
   2. Were Mr Fyson's 3% profit and risk discount as is mentioned by him at pages 15 to 16 of the revised valuers' conferral statement (exhibit 22) and under annexure JF6 to his witness statement of 21 September 2022 (exhibit 26) (generating the amount of $254,854) removed, Mr Fyson's summation amount is then $8,750,000 at 585m2 - even closer to Mr Garmony's revised number.
2. Thirdly, the trial judge observed that Mr Garmony's value for improvements was higher than that of Mr Fyson and Mr Hall. The trial judge concluded that he would afford considerable weight to Mr Hall's assessment for the reason that Mr Hall conducted an inspection of the Land and the improvements closest in time to the date of valuation (being on 3 December 2015).[181] His Honour considered this earlier inspection:[182]

in my view, put him in the best position of all of the four valuers to express a reliable view about the condition and worth of these improvements to the land.

1. Fourthly, in relation to Mr Fyson's summation method, the trial judge preferred Mr Fyson's approach to the evidence of the quantity surveyors. In so far as Mr Fyson had regard to the evidence of the quantity surveyors in determining the value of the improvements, the trial judge concluded:[183]

Mr Fyson weighed and took proper account, on my assessment of his evidence, of all the quantity surveyor information provided to him, including the differences between the two quantity surveyors. It was proper for him to take that course, because ultimately, the use made of such costing information provided is for the valuer to determine. As canvassed earlier, at the end of a day of concurrent evidence at trial from the two quantity surveyors, I came to ascertain that there was only a difference of approximately $700,000, as between them in their rival assessments of replacement cost for improvements. The property valuers would then apply their depreciation rate to that costing information, they assessed as appropriate for the valuation exercise.

1. The trial judge concluded that Mr Garmony's approach, of directly importing Mr Rafferty's calculations:
   1. ... comes too close to conflating what is always the distinct concept of cost (ie, a replacement cost in reconstructing afresh the improvement structures by reference to historic cost information that is proximate to the valuation date), with the more relevantly applicable concept of value.
   2. Ultimately, a costing exercise will only generate what is an input factor of cost data for the valuer to weigh and apply ...
2. The trial judge also made some observations regarding when evidence from a quantity surveyor may be required in a valuation exercise:
   1. Absent much greater economic stakes, a valuation task for statutory compensation ascertainment purposes, should usually be left to the property valuers - without the need to go to the costly lengths of reconstructing multiple counterfactual rebuilding construction cost inputs towards the finding of a replacement cost for the land's improvements by recourse to quantity surveyors.
   2. A hypothetical Spencer purchaser for a property of these dimensions, whilst fully informed, would not be expected to go to the length of engaging a quantity surveyor, at no doubt very considerable expense, to provide input costing data for such an exercise.
3. It is unnecessary, given the grounds of appeal, to deal with the trial judge's observations on this issue. However, it should not be thought that the court's determination of ground 2 provides any implicit approval of his Honour's observation on this issue.
4. Fifthly, as part of his summation method valuation, Mr Fyson applied a 3% discount for 'profit and risk'. His Honour observed that this discount was strongly challenged during Mr Fyson's cross‑examination, but concluded:[184]

Nevertheless, on my assessment his discount is conceptually defensible and was appropriate, essentially, for the reasons then given by Mr Fyson towards any assumed individual sale exercise.

1. The trial judge concluded that he preferred this approach to that of Mr Hall, who applied a 10% bulk discount to the unimproved value of the Land.
2. Sixthly, the trial judge observed that when the adjustments to Mr Garmony's figures for the improvements were made, the assessed value for the improvements of Mr Fyson ($2,248,775) and Mr Garmony ($2,855,169), 'broadly speaking, fall within a reasonable range of each other'.[185]
3. Ultimately, the trial judge observed that the valuations reached using the summation method were by Mr Hall at $7,750,000, Mr Fyson at $8,500,000 and Mr Garmony at $9,360,000.[186] His Honour considered that Mr Hall's valuation was on the low side, essentially due to his 10% bulk discount applied to the unimproved value of the Land. This left the valuations of Mr Fyson and Mr Garmony as to which his Honour concluded:
   1. That leaves the summation methodology amounts arrived at by Mr Garmony and Mr Fyson - as between which I would favour the force of conceptual reasoning by Mr Fyson.
   2. That preference was reinforced by seeing all the valuers give their concurrent evidence in person at the trial and questioned about those views.
   3. At the end, Mr Fyson and Mr Garmony were broadly, as I have earlier discussed, within range of each other - with their gap difference essentially being in their approaches to the value of improvements as inputs, under the summation method.
   4. Since in the end I prefer Mr Fyson's approach, I will consequently accept and assess the level of market value compensation to DBW to be $8,500,000.

1. The appellants submit that the trial judge erred 'in principle' in preferring Mr Fyson's valuation over that of Mr Garmony for the following reasons:

(1) In not relying on the evidence of the appellants' quantity surveyor Mr Rafferty and instead adopting Mr Fyson's approach to the valuation of the improvements on the Land. This issue was raised in the context of ground 1 of the appeal, but is also relied upon in support of ground 2,[187] and is more appropriate to consider in the context of this ground;

(2) In adopting Mr Fyson's depreciation rate for the improvements on the land as opposed to Mr Garmony's rate, or no depreciation rate at all;

(3) In accepting Mr Fyson's evidence that it was appropriate to deduct a 'profit and risk factor' associated with the sale of the individual lots; and

(4) In failing to apply the Executor Trustee principle resulting in a lower valuation being accepted and a lower amount of compensation being awarded. The appellants' raise the Executor Trustee principle both as a part of issues 1 - 3 above, and also separately in terms of the overall valuation. Given the degree of overlap, we have considered all aspects of the appellants' submissions regarding the application of the Executor Trustee principle as part of the final issue relevant to this ground of appeal.

1. The written submissions of the appellants do not identify whether the errors alleged to have been made by the trial judge are errors of law or fact. In oral submissions, senior counsel for the appellants submitted that they consist of both.
2. The assessment of the market value of the Land with improvements is a question of fact. To the extent the appellants submit that the trial judge erred in preferring the approach of one expert over that of another, or accepting certain valuation evidence, those are errors of fact.
3. The only errors of law identified in the appellants' submissions relate to the first issue raised in relation to the quantity surveyors, being whether the trial judge erred in concluding that the use to be made of the quantity surveyors' evidence was a matter for the valuers, and whether the trial judge erred in failing to apply the Executor Trustee principle.
4. By way of broad overview, the respondent's case is that no error was made by the trial judge in preferring the valuation of Mr Fyson over that of Mr Garmony. The respondent submits that the appellants have failed to have regard to the purpose of the assessment being to assess the value of the Land with improvements and not to ascertain costs. The respondent submits that no error is revealed in the trial judge's conclusions regarding the quantity surveyors, the rate of depreciation or the application of a profit and risk factor.

Issue (1) - use of quantity surveyor evidence and value of improvements

1. The appellants submit that the trial judge erred in not relying on Mr Rafferty's evidence in assessing the value of the improvements. The appellants identify four bases upon which they alleged the trial judge erred in this regard.
2. First, the appellants submit that the trial judge erred 'in principle' in concluding that the question of the use to be made of the quantity surveyor's evidence was a matter for the valuers. The appellants submit that this is incorrect as a matter of principle because the use to which expert evidence is put must be subject to the control of the court. The appellants submit that in circumstances where the trial judge concluded that both quantity surveyors were highly competent and articulate professionals, it was not a matter for the valuers as to what use to put the quantity surveyors' evidence. Rather, the appellants submit that the trial judge ought to have accepted and used Mr Rafferty's figures.[188]
3. The appellants' submission misstates the reasoning process of the trial judge. The trial judge did not conclude that the question of the use of the quantity surveyor's evidence was a matter for the valuers to the exclusion of the court. Rather, the trial judge outlined that the ultimate question was the value of the Land and improvements. The trial judge accepted that the costs of the improvements was an input into that assessment of value as part of the summation valuation method. However, what the trial judge did not accept is that the cost estimates prepared by the quantity surveyors must automatically and uncritically be accepted by the valuers (and by extension, the court). Rather, the trial judge concluded that the valuers, when carrying out their valuation exercise, were required to receive, review, weigh, adjust and assimilate that costing input information as they saw fit.[189]
4. Further, the trial judge did not simply 'cede control' of the use to be made of the quantity surveyors' evidence to the valuers. The trial judge considered the various costs included in both quantity surveyors' revised costings, and identified those which his Honour did not consider ought be included on the basis that they were either sunk costs or the hypothetical purchaser would not pay for those costs as part of identifying the value of the improvements.[190]
5. His Honour then went on to consider the approaches adopted by the valuers to the use of the quantity surveyors' evidence. Mr Garmony used the costings of Mr Rafferty. Mr Fyson considered the evidence regarding the costs of the improvements from both quantity surveyors and the relevant industry guides, as well as making his own assessment as to which costs were sunk costs and would not be paid by the market. His Honour preferred the approach of Mr Fyson for the reason that Mr Fyson 'weighed and took proper account' of all the quantity surveyor information provided to him, including the differences between the two quantity surveyors,[191] whereas Mr Garmony simply adopted the figures of Mr Rafferty.[192]
6. Finally, the trial judge had regard to Mr Hall's valuation of the improvements, to which he afforded 'considerable weight', given the timing of Mr Hall's inspection of the improvements in situ, compared to Mr Fyson and Mr Garmony. Mr Hall's valuation was lower than both Mr Fyson and Mr Garmony.[193]
7. In these circumstances, the trial judge did not err in the manner alleged by the appellants, and it was not appropriate for the trial judge to simply adopt Mr Garmony's higher value for the value of improvements and combine that figure with Mr Fyson's higher unimproved land value as part of the summation methodology.
8. Secondly, the appellants submit that the trial judge erred in deducting from Mr Rafferty's assessment the cost of the allowance for design fees and headworks, demolition and a contingency. The appellants submit that these deductions were all items which make up a properly assessed construction cost, and cannot be disregarded or discounted.
9. The trial judge outlined in the Primary Decision why he considered that the specific deductions should be made. His Honour considered that the headworks and a contingency were sunk costs by the land-owner and would not be reflected in the value of the improvements. His Honour considered that the demolition costs were not a cost that fell within the task of valuing the improvements existing on the Land. This was the evidence of both Mr Fyson and Mr Hall.
10. The appellants do not identify what error was made by the trial judge in adopting this approach. There is no obvious error in the reasoning process of the trial judge, in the circumstances where the statutory task was to assess the value of the Land with improvements. The trial judge provided a rational explanation for making the particular deductions. It is not sufficient to simply assert that a different conclusion should have been reached or a different expert witness or approach should have been preferred. The principles upon which an appellate court will interfere with the decision of a primary judge on a question of valuation were stated by Dixon J in The Commonwealth v Reeve as follows:[194]

It would not be proper for this court on an appeal of this nature to substitute its own opinion for that of the court below unless it were satisfied that the court below acted on some wrong principle of law, or that the value was entirely erroneous.

1. This passage was approved by Gibbs J and Aickin J in Emerald Quarry Industries.[195] See also McKay v Commissioner of Main Roads.[196]
2. Thirdly, the appellants submit that the trial judge erred in not rejecting Mr Bolt's conclusions as to the costs of the improvements. The appellants identify a number of different reasons why they say that Mr Bolt's costings should have been rejected.
3. It is not necessary to consider this alleged error in any detail because even if an error is established, the appellants have not identified how, given the other findings made by the trial judge, any such error was material to his Honour's conclusion.
4. The trial judge did not prefer Mr Bolt's evidence over Mr Rafferty's evidence or reach a conclusion as to the value of the improvements based solely on Mr Bolt's evidence. The trial judge concluded that all evidence as to the costs of the improvements, including Mr Rafferty's assessment (with some deductions) were relevant inputs to the valuation process. The trial judge preferred the approach of Mr Fyson, who took into account the evidence regarding the costs of the improvements from both quantity surveyors and the relevant industry guides, as well as making his own assessment as to which costs were sunk costs and would not be paid by the market, as part of assessing the value of the improvements.
5. Fourthly, the appellants submit that the trial judge erred in preferring Mr Fyson's assessment of the value of the improvements in circumstances where Mr Fyson failed to expose the basis for his reasons for departing from the quantity surveyors' costs, contrary to the principles in Makita (Australia) Pty Ltd v Sprowles.[197] We do not accept there has been any error in this regard. Mr Fyson outlined the basis of his calculation of the value of the improvements, including his calculation of the replacement costs of the improvements. Mr Fyson outlined why and in what manner he had regard to the quantity surveyors' costs, the Rawlinsons and Cordell cost guides, and why he had excluded certain costs identified by the quantity surveyors from his calculations.[198] There was no failure by Mr Fyson to comply with the principles in Makita, and no resulting failure by the trial judge to prefer the evidence of Mr Fyson.

1. The appellants submit that the trial judge erred in accepting Mr Fyson's assessment and application of the variable depreciation rates to the cost of the different improvements. The appellants identify two bases upon which they allege the trial judge erred in so doing.
2. First, the appellants submit that the evidence of Mrs Reynolds established that the construction of improvements on the Land commenced in late 2008 and took 18 months to complete. The appellants further submit that the final construction of hardstand, lighting and security on lots 728 and 729 occurred in the second half of 2012. The appellants therefore submit that the improvements were brand new in appearance and in 'mint' condition. The appellants' written submissions state that 'this raises the question whether a depreciation rate is applicable at all and if so in what amount'. However, the appellants appear to accept that a depreciation rate of some sort was acceptable, as the appellants submit that the uniform depreciation rate of 5% utilised by Mr Garmony should have been preferred to Mr Fyson's variable depreciation rates.
3. The question of whether the cost of the improvements should be depreciated, and if so the appropriate rates, are questions of fact. For the following reasons, we do not consider the appellants have established any error of fact on the part of the trial judge in relation to adopting Mr Fyson's variable rates approach to depreciation.
4. The evidence before the court in relation to the age of the improvements was contained in Mrs Reynolds' supplementary witness statement:[199]
   1. In mid 2008 we obtained a development approval to construct a transport depot on 249 Dundas Road followed by a building licence.
   2. Construction started in late 2008 and was completed within 18 months.
   3. The hardstand, fencing, gates, crossovers and security system for lots 728 and 729 were done in 2012.
5. The precise date that the transport depot was completed was not identified. Mrs Reynold's evidence was that construction commenced in late 2008 and was completed within 18 months. In cross-examination, it was put to Mr Fyson and Mr Hall that these improvements were completed at the end of 2009 and therefore were not more than three and a half years old.[200] The improvements on lots 728 and 729 were newer and were completed around one year before the valuation date. That is, as submitted by the respondent, the improvements were not all brand new and had all been used to varying degrees as at the date of valuation.
6. Mr Fyson's second statement detailed his revised depreciation rates.[201] On lots 728 and 729 the hardstand, lighting and fencing were installed in early 2012, making them only 12 months old at the date of valuation. Mr Fyson adopted a 5% depreciation rate for these improvements. On lots 739, 740 and 741 the hardstand, lighting and fencing were installed in late 2008 or early 2009. Mr Fyson adopted a 15% depreciation rate for these improvements. On lot 757, Mr Fyson depreciated the improvements as follows:

(a) Office: 5% (built in late 2008 or early 2009 - 4 years old at date of valuation);

(b) Four bay workshop and amenities: 10% (built in 2008 - 5 years old at date of valuation);

(c) Washdown bay: 10% (built in 2008 - 5 years old at date of valuation);

(d) Electric fence and gate: 15%;

(e) Hardstand, lighting and parking: 15% (built in 2008 or 2009); and

(f) Loading ramp: 5%.

1. Mr Fyson described the improvements as presenting to a good modern standard and were ideally configured for truck servicing.[202]
2. Mr Fyson's explanation for the varying rates was provided in his first report and also examination in chief:[203]

(324) As tabled above, depreciation rates have been applied to individual components, recognising different use and function. Higher rates have been applied to the older hardstand, with such external improvements having a shorter lifespan comparative to built form structures. There is a higher degree of wear & tear on hardstand for a trucking depot comparative to say the office building.

(325) I do recognise the improvements are modern, the majority of which were constructed in late 2008 / early 2009, but also include more recent hardstand on Lots 728 & 729. Accordingly, a lower rate of depreciation has been applied to these lots.

(326) The rates adopted for the main structures fall within the range provided by the QS experts in their Joint Statement.

1. In this context, it is not clear what error arises from applying varying depreciation rates as opposed to a uniform depreciation rate. It is not sufficient to simply assert that a different conclusion should have been reached.
2. Mr Fyson has provided a rational explanation for adopting these variable rates. It was put to Mr Fyson in cross examination that the transport depot was not completed until 2009, and Mr Fyson's evidence was that this did not change his revised depreciation rates.[204]
3. All the valuers applied a depreciation rate to the cost of improvements when determining the market value of the Land using the summation method. In addition to Mr Fyson, Ms Jenny Le-Fevre also used two different rates (8.33% for buildings and 10% for external works)[205] whilst Mr Hall also used variable rates to depreciate different improvements.[206] The trial judge afforded considerable weight to Mr Hall's assessment of a lower value for improvements on the basis that he was the valuer who conducted an inspection of the improvements closest in time to the valuation date, being on 3 December 2015 (which was one month after the taking date but before Century West had vacated the premises).[207] Mr Garmony's inspection was on 10 April 2017 and Mr Fyson's inspection was on 6 June 2019.[208]
4. In light of these matters, it cannot be said that there was any error in the trial judge's approach or findings on the issue of depreciation rate for the improvements on the Land.

1. In relation to this issue, the appellants submit that having accepted Mr Fyson's market valuation of the vacant Land, and the depreciated improvements, the trial judge erred in then applying a 3% discount for the 'profit and risk' of selling off the six lots individually.
2. The appellants identify three reasons why they submit this was an error.
3. First, that this discount is 'wrong in principle' because when the comparable sales approach is applied to value a resumed property, there is no application of selling costs to reduce the amount of compensation to be awarded. Therefore, contrary to the trial judge's conclusion, the exercise was not 'conceptually defensible'.[209]
4. Secondly, the appellants submit that Mr Fyson failed to prove any of the underlying facts as to the quantum of this discount, contrary to the principles governing experts' evidence in Makita.
5. Thirdly, by adopting this approach, the appellants submit that the trial judge failed to award any value for the underlying inherent premium attaching to the Land as a landholding comprising six subdivided and serviced titles which may be sold separately or as one combined landholding. Rather, the trial judge instead treated the valuation exercise akin to a hypothetical subdivision exercise to arrive at an end result where the qualities had no value because the already expended cost of obtaining them had been built into the exercise as a further deduction.
6. The respondent submits that the appellants have failed to have regard to the different basis upon which Mr Fyson assessed the underlying market value of the Land, in comparison to Mr Garmony. When this is done, the respondent submits that no error is revealed.
7. All the valuers valued the Land on the basis that its highest and best use was the existing industrial use of the Land with the potential for the individual sale of the lots or the sale of groups of lots.
8. Mr Garmony valued the underlying market value of the Land, both for the comparable sales method and as part of his preferred summation method, as an en globo parcel of land with a flat rate per square metre, to which he added a premium of between 10% ‑ 20% to represent the three street frontages and drive through access.[210] For the purposes of the summation method, Mr Garmony's updated land value was $5,980,000 (being $400 per m2).
9. Mr Fyson, on the other hand, applied different rates to each of the six lots, valuing each as individual end lots as opposed to on an en globo basis. Mr Fyson's revised land value was $6,500,395 and was, accordingly, higher than that of Mr Garmony.[211] Mr Fyson applied the 3% 'profit and risk' deduction to reflect the costs involved in achieving a sale of the individual end lots. The 3% profit and risk deduction was made to the improved value of the Land.
10. Mr Fyson further explained his approach in his evidence in chief as follows:[212]

So following on from the valuers conferral as we discussed these approaches, in order to realise, of course, the aggregate of all of the six titles, there are some costs which an owner is going to incur. In other words, if he were to sell those properties tomorrow, he may need to reinstate fencing to the lots, he may need to reinstate crossovers to the lots. There may be - well, there will be some selling and marketing costs associated with realising that. So that was discussed and - so from my adjusted value under summation in the valuers conferral, I allowed for a small allowance to cover some of those costs in realising each of the six titles.

1. Mr Fyson was challenged in cross examination as to this approach:[213]

WITNESS, FYSON: So my allowance for the three per cent was to cover the real costs of being able to individually dispose of the properties. So if I go to sell off one, two, three or five of the lots, or six lots independently, I will incur the physical costs of recreating titles, which is the fencing crossovers, but I will also incur - - -

McGOWAN, MR: Well, sorry. Just stop there. There are already six separate titles.

WITNESS, FYSON: Yes.

McGOWAN, MR: You don't need to recreate titles.

WITNESS, FYSON: No, but you may need to fence them. Depending on the configuration, you may need to create crossovers, because they don't each have a crossover.

McGOWAN, MR: All right. Well, just one step at a time. You're not creating title because I've already got titles.

WITNESS, FYSON: Yes, but you need to physically create a saleable product.

McGOWAN, MR: All right. So what I'm after is whether you've done an exercise so we can see how you arrive at 250,000

...

McGOWAN, MR: Have you done an exercise - - -

WITNESS, FYSON: Yes. Yes, I have.

McGOWAN, MR: - - - so we can see what the numbers are - - -

WITNESS, FYSON: Because in my allowance of three per cent, there will be selling and marketing fees associated with that as well. So my three per cent is actually a very low allowance, because if I go to sell those lots, I go ring up Knight Frank or Jones Lang LaSalle and I say, 'Please, come sell my lots', they're going to quote me one and a half per cent selling fee, they're going to quote me marketing costs, probably to the tune of about two per cent in total. I'm going to need to fence those lots, create crossovers, and I'm going to want some return for my effort.

...

So in my view, three per cent is a very conservative allowance for those costs.

1. Mr Hall also adopted an approach of applying a discount as part of his summation method but did so in a different manner. Mr Hall valued the individual lots separately in so far as lot 757 was valued at a different rate from the remaining lots, and then applied a 'bulk discount' of 10% to the unimproved land value on the assumption that a single buyer would buy all the lots because:[214]

it is normal throughout the industry, regardless of zoning or use, when you buy multiple lots, a proven purchaser would expect not to pay the individual values for a site which is made up of amalgamated lots and used as one.

1. It is also relevant that in Mr Garmony's hypothetical development analysis check method of valuation, Mr Garmony determined the underlying value of the Land on a lot‑by‑lot basis, at a higher rate than his en globo rate. Mr Garmony then added a cost per lot to create fencing between the lots. Mr Garmony also noted that from his past experience, developers would aim for a profit and risk factor of between 15% ‑ 25% for en globo lots, but in this case, given the legal titles had already been created, Mr Garmony applied a 5% rate.[215] This was conceptually the same approach.[216]
2. When the different valuation approaches are understood in this context, it is not apparent that the trial judge made any error in adopting the 3% profit and risk deduction to Mr Fyson's end lot market value of the six individual lots. There is no conceptual error in making an allowance for the fact that whilst the individual lots were legally created, they would need to be physically created in terms of fencing and cross-overs if the lots were to be sold on that basis, and to take into account the additional marketing and selling costs of having this flexibility.[217]
3. There is also no error by Mr Fyson in failing to allow for any inherent premium of having a single en globo parcel of land that can also be sold off as six already existing individual lots. By valuing the Land on the basis of six individual end lots, Mr Fyson had already captured that inherent premium.
4. Finally, this is not a case of Mr Fyson failing to set out or to prove any of the underlying facts as to the quantum of this profit and risk discount, contrary to the principles governing expert evidence in Makita. Mr Fyson explained the basis of the 3% profit and risk discount in his second report and in his examination in chief and cross-examination as detailed above. Arriving at a percentage figure is a matter falling within a valuer's expertise. It is not a matter of exact science. It was open to the parties to cross-examine a valuer as to the particular figures adopted so as to challenge whether it is appropriate in all the circumstances. In this case, Mr Garmony applied a 5% profit and risk discount in his hypothetical development check evaluation and Mr Hall applied a discount of 10% to the unimproved land value as part of his summation method valuation. In these circumstances, there is nothing to suggest that Mr Fyson's discount is unreasonable.
5. In these circumstances, the appellants have not established any error by trial judge in accepting Mr Fyson's valuation which included a deduction for a 'profit and risk' factor of 3% to take into account the need to physically create and sell the six separate lots.

1. The Executor Trustee principle provides that in a land compensation matter, if there are any doubts in assessing the amount of compensation payable, then those doubts should be resolved by a liberal estimate in favour of the dispossessed owner.
2. The principle is derived from the decision of Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd.[218] That decision concerned an appeal from a valuation of shares in a deceased's estate for the purposes of succession duty by the Supreme Court of South Australia. The relevant legislation required that the net present value of the property be ascertained. Latham CJ, Rich and Williams JJ, and Dixon J writing separately, held that such an assessment will usually involve ascertaining the market value of the property. However, the shares in question were not listed on the stock exchange and there was no evidence of any private sales of the shares. The trial judge valued the shares using the Spencer test of market value. Whilst the majority held that this approach was correct, they concluded that the trial judge had not applied the test correctly, and considered that the valuation was too low. What is relevant for present purposes, however, is the following proposition of Dixon J:[219]

I should like, however, to add for myself that there is some difference of purpose in valuing property for revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While this difference cannot change the test of value, it is not without effect upon a court's attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate.

1. The above proposition was endorsed by Callinan J in Boland v Yates,[220]and McHugh J in Marshall v Director‑General, Department of Transport.[221]
2. However, the proposition proceeds on the basis that there are 'doubts' in assessing the compensation payable. In Trandos v Western Australia Planning Commission,[222] Anderson J, with whom Wheeler J and Einfeld AJ agreed, dismissed a ground of appeal alleging a failure to apply the Executor Trustee principle on the basis that there were no doubts:

Accepting that the analogy between the valuation of shares for the purpose of exacting succession duty and the valuation of land for the purposes of s 36(2b) of the Scheme Act is good, I am not persuaded that application of the principle expressed by Dixon J would have led to any different conclusion in this case. As I understand the judgment of Heenan J, he was satisfied that the highest and best use of this land was as he determined. I cannot see that there was an occasion for 'doubts to be resolved in favour of' a higher use.

1. The appellants rely on the Executor Trustee principle in the following ways:

(1) as part of their submission regarding the trial judge's error in not accepting and applying only Mr Rafferty's costings for the purposes of assessing the value of the improvements on the Land. The appellants submit that having found both quantity surveyors to be highly competent and not preferring one over the other, the trial judge ought to have used Mr Rafferty's costings (after making the various identified deductions) for the purposes of assessing the value of the improvements;

(2) as part of their submission regarding the trial judge's error in accepting Mr Fyson's variable depreciation rates. The appellants submit that the trial judge erred in not preferring Mr Garmony's depreciation rate because his Honour concluded that the two approaches were within a 'reasonable range' of each other;

(3) as part of their submissions as to the final summation method valuation. The appellants submit that the summation exercise requires the separate address of the value of the land and the value of the improvements. In their written submissions, the appellants submitted that adopting the Executor Trustee principle, the trial judge ought to have preferred Mr Fyson's higher land only value ($6,500,395), and then added Mr Garmony's higher improvement value ($3,023,699) to arrive at a market value using the summation method of $9,524,094; and

(4) the appellants submit that even if the trial judge did not make any of the other errors alleged in ground 2, the trial judge still erred in failing to apply the Executor Trustee principle and prefer the final market value valuation of Mr Garmony, after deducting every error identified by his Honour, of $8,832,169 over Mr Fyson's final market valuation of $8,500,000.

1. We do not consider the Executor Trustee principle has any application to the present facts in the manner submitted by the appellants for the following reasons.
2. First, whilst the trial judge found both quantity surveyors to be highly competent and did not prefer one over the other, the trial judge did prefer Mr Fyson's approach to the valuation of improvements, including in relation to the use to be made of the costs as assessed by the quantity surveyors. Accordingly, the trial judge did not express any doubts as between Mr Rafferty's costs and Mr Fyson's use of them in the broader valuation exercise.
3. Secondly, the trial judge did not express any doubts as between Mr Garmony and Mr Fyson's respective valuations of the improvements in the context of the summation method of valuation. To the contrary, the trial judge expressed a clear preference for Mr Fyson's approach to the valuation of the improvements (compared to Mr Garmony's approach) stating that he preferred the 'conceptual reasoning' of Mr Fyson and Mr Fyson's 'overall, more measured approached'.[223] The reference to the two valuations being within a reasonable range of each other is, in the context of the reasons as a whole, used more in the nature of a check against the trial judge's preferred valuation of Mr Fyson.
4. Thirdly, the appellants have not cited any authority for the proposition that the Executor Trustee principle requires a court to break down the various valuations before it into constituent parts, and then select the highest valuation for each constituent part. Further, such an approach is conceptually inappropriate in the present case, in circumstances where Mr Fyson and Mr Garmony each valued the market value of the land in a different manner, and where the application of a profit and risk factor was, accordingly, only applicable to Mr Fyson's valuation. In these circumstances, it is not conceptually appropriate to separate the constituent parts of the summation valuation in the manner proposed by the appellants.
5. Finally, the appellants submit that even if the trial judge did not make any of the other errors alleged in ground two, the trial judge still erred in failing to apply the Executor Trustee principle and prefer the final adjusted market value valuation of Mr Garmony. Again, in circumstances where the trial judge expressed a clear preference for Mr Fyson's valuation methodology over that used by Mr Garmony,[224] this was not a situation where there were any doubts as to the correct valuation and consequently where the Executor Trustee principle was applicable. All that the trial judge was doing in comparing an adjusted version of both the valuations of Mr Garmony and Mr Fyson,[225] was conducting a check assessment against his Honour's preferred valuation.
6. The trial judge did, however, appropriately have regard to the Executor Trustee principle as between Mr Hall and Mr Fyson in so far as it concerned the value of the improvements, where his Honour indicated that as a matter of fairness to DBW Reynolds, he would adopt Mr Fyson's higher figure.[226] This was in circumstances where both Mr Fyson and Mr Hall adopted a similar valuation methodology.

1. For these reasons, the trial judge did not err in fact or in law in assessing the market value of the Land. Ground 2 should be dismissed.

1. Grounds 3 and 4 concern the claim for compensation by Century West, and specifically, the extent and amount of compensation payable to Century West under s 241(6)(b) of the LAA for the loss and damage associated with the need to relocate its transport haulage business and storage facility.
2. The key issue concerning ground 3 is whether Century West is able to claim losses caused by the disruption to its business by reference to the overall economic performance of DBW Reynolds and Century West as a combined economic unit. The issue underpinning ground 3 concerns only one aspect of Century West's claim for disruption and reinstatement loss or damages - described as being the additional costs of leasing temporary premises. Century West was awarded compensation for other types of loss or damage falling within the scope of s 241(6) of the LAA.
3. The key issue concerning ground 4, is whether Century West is able to claim lost profits concerning an opportunity to enter into future profitable storage contracts.
4. Both of these claims were denied by the respondent at trial.
5. It is convenient to consider the pleadings relevant to these two grounds together, before considering the individual grounds of appeal.

1. In par [1] of the further amended statement of claim, the appellants plead that DBW Reynolds was the registered proprietor of the Land. In par [2] of the further amended statement of claim, the appellants plead that Century West was the operator of a transport business located on the Land, which is then defined as 'the business'.
2. The pleadings which underpin Century West's case that it is able to claim losses by reference to the overall performance of the combined economic unit are contained in pars [3] ‑ [4] which are set out earlier in these reasons. In these paragraphs, the appellants plead the nature of the involvement of Mr and Mrs Reynolds in both appellant companies and outline a number of matters which form the basis of the appellants' claim that DBW Reynolds' interest in the land should be valued on the basis of the value to the owner for purposes of the claim for compensation under s 241(2) of the LAA. In addition to these pleadings, the appellants also plead:

IN ADDITION TO OR IN THE ALTERNATIVE TO [4] HEREOF:

4A By virtue of the relationship between the First and Second Plaintiffs including but not limited to common interest, control and beneficial entitlement, the claims of the First and Second Plaintiffs should be determined as one global claim for the purposes of compensation.

1. The appellants go on to plead that following the taking of the Land, Century West entered into a lease for what is pleaded as being 'temporary accommodation'.[227] However, as at the date of trial Century West remained at this 'temporary accommodation' and the lease had been extended.[228] Century West then pleads as follows:
   1. The temporary premises are less efficient than the land and, as a consequence, the Second Plaintiff has incurred additional operational costs caused by time lost through more cumbersome manoeuvrability on site and general and specific operational inefficiency.
   2. Income has been lost due to the fact that the temporary premises have no or little surplus space to rent to clients for storage pending delivery to mine sites and other locations which in turn has resulted in the loss of consequential freight contracts for the movement of items in storage quantified by expert evidence.
2. The appellants also plead that the rent payable for the 'temporary accommodation' is greater than the loan repayments for the former mortgage over the Land, with the following consequences:
   1. The rent and variable outgoings payable by the Second Plaintiff on the temporary premises at 415 Dundas Road are significantly more than the loan repayments payable to the bank in respect of the former mortgage on the land which rent and outgoings have put significant financial pressure on the cash flow and profitability of the business.

1. Whilst the downturn in the profitability of the Second Plaintiff due to market conditions is substantially unrelated to the resumption of the land and the consequences of that taking, the obligation to pay rent on specific dates without deferral, remission or flexibility for premises required to ensure the continuation of the business is a direct consequence of the resumption.
2. Had there been no resumption the First Plaintiff would have been able to continue, even with reduced profitability due to market conditions, to make its repayments to the bank and would have continued to hold the land.
3. The further amended statement of claim also pleads that each of the appellants separately made a claim for compensation under the LAA.[229] In the prayer for relief, each appellant separately claims compensation. DBW Reynolds claims compensation for the value of the Land, assessed on a number of alternative bases. Century West claims compensation pursuant to (relevantly) s 241(6) of the LAA.
4. In its amended defence, the respondent pleads that each of the appellants are separate legal entities, and each held a different interest in the Land.[230] The respondent denies that the claims of the appellants should be determined as one global claim:

4A. In relation to paragraph 4A of the Statement of Claim, the Defendant:

4A.1. denies the paragraph and says that the determining of two separate claims by two separate persons based on two separate interests in land as 'one global claim' is not an approach consistent with law; and

4A.2. says further and in the alternative that if that the claims of the First and Second Plaintiffs are to be determined as 'one global claim', the quantum of compensation payable under the global claim would be no more than the sum of the compensation payable to the First Plaintiff and the compensation payable to the Second Plaintiff, determined according to their respective interests in the Land.

1. The respondent admits that the 'temporary accommodation' is less efficient than the Land and, as a consequence, Century West has incurred additional operational costs.[231] However, the respondent denies that Century West is entitled to compensation for any loss of income due to the lack of storage space at the temporary premises:
   1. The Defendant:

46.1. denies paragraph 46 of the Statement of Claim;

46.2. says that in any event if the Second Plaintiff had lost any income by virtue of not having any surplus space to sublet to clients, and consequentially losing freight contracts, such income must be offset against the rent that the Second Plaintiff no longer has to pay under the Lease for that surplus space (namely, the saving in leasing costs pleaded at [49.2] below);

46.3. says further in the alternative that if the Second Plaintiff has lost any actual net income by virtue of not having any surplus space to rent to clients and consequentially losing freight contracts, the Second Plaintiff has failed to take reasonable steps to obtain suitable alternative or additional space that would have avoided the loss of any such rental income and consequential freight contracts; and

46.4. says that if the claim is that the First Plaintiff has (or the Plaintiffs acting together have) lost any income by virtue of not having any surplus space to rent to clients, the ability to obtain such rental income is an incident of ownership of the Land and is therefore incorporated in the market value of the Land, for which the First Plaintiff is separately compensated.

1. The respondent accepts that the rent and variable outgoings payable by Century West on the temporary premises are more than the loan repayments payable by DBW Reynolds on its former mortgage, but denies that either appellant is entitled to any compensation on this basis because the respondent:

49.2. says that the rent and variable outgoings payable by the Second Plaintiff on the premises at 415 Dundas Road are significantly less than the rent and variable outgoings that were payable by the Second Plaintiff to the First Plaintiff under the Lease.

1. The respondent denies the appellants' claim that the obligations under the lease for the temporary premises have had consequences for the continuation of the road haulage business:
   1. In relation to paragraph 54 of the Statement of Claim, the Defendant:

54.1. says that the downturn in the profitability of the Second Plaintiff due to market conditions is unrelated to the resumption of the Land and the consequences of that taking;

54.2. otherwise denies the paragraph;

54.3. further says that the obligation to pay rent for premises required to ensure the continuation of the business is an obligation that the Second Plaintiff would have had pursuant to its leasehold interest in the Land, if the Land had not been compulsorily acquired; and

54.4. repeats paragraph 49.2 above; and

54.5 says that, in any event, any deferral, remission or flexibility with respect to the Second Plaintiff's obligation to pay rent to the First Plaintiff, would have had a corresponding impact on the interests of the First Plaintiff that must be taken into account in determining the compensation payable.

1. The Defendant does not admit paragraph 55 of the Statement of Claim.

Ground of appeal 3 Summary of reasons of the trial judge

1. There was no dispute that DBW Reynolds and Century West are separate corporate entities. There was also no dispute that Mr and Mrs Reynolds were (and remained) involved in the day‑to‑day operations of each appellant.
2. The trial judge found that the corporate structure involving the appellants, and the family trust, were deliberately put in place by Mr and Mrs Reynolds. The trial judge found that:[232]

They were no sham arrangements and the two entities they controlled, traded and paid tax on that favourably structured chosen basis.

1. The trial judge outlined the facts underpinning Century West's claim for compensation under s 241(6)(b) of the LAA and outlined the claims made by Century West.
2. A number of facts were not in dispute between the parties, including that Century West vacated the Land on 29 February 2016, save for being given permission by the respondent to continue to use a loading ramp on the Land for a further month, until 31 March 2016.[233] It was also not in dispute that Century West relocated its road haulage transport business to a new premises. Century West entered into a three-year lease at nearby premises at 415 Dundas Road. This was described as being 'temporary' accommodation, however the trial judge observed that as at the trial date Century West continued to operate its road haulage transport business from this address.[234] The lease that was entered into by Century West was with an unrelated and arm's length third‑party landlord, in contrast to the previous lease with DBW Reynolds.[235]
3. The appellants relied on the expert evidence of Ms Jacqui Le‑Fevre, a certified practising accountant, in support of each of its claims. The appellants also relied on the evidence of Mr Reynolds in relation to possible future storage and freight contracts, and the evidence of Mr Peter Slack from Austral shipping.[236] In response, the respondent relied on the expert evidence of Mr Martin Langridge, a chartered accountant.

1. The trial judge described Century West's claim for compensation for disruption to its business by reference to the overall economic performance of DBW Reynolds and Century West as a combined economic unit as being a 'novel claim'. After referring to par [49] of the further amended statement of claim, his Honour summarised the claim as follows:
   1. Accordingly, Century West advances this further economic loss claim for $684,275. That loss amount is described as the 'additional costs' of it leasing the so-called 'temporary' premises at 415 Dundas Road - as the difference between the level of the rent it now must pay at its relocated business premises at 415 Dundas Road at a level of rent that is above the (lower level) secured loan, interest only, payments once being made by the first plaintiff, DBW, to its mortgagee (Westpac) for 249 Dundas Road. ...
2. The trial judge described the mortgage arrangements as follows:
   1. It is necessary to point out that the borrowing arrangements at 249 Dundas Road were such that DBW, the first plaintiff (not the second plaintiff, Century West), had borrowed funds exceeding $3,000,000 from Westpac - secured by first registered mortgages over all the six lots - on which monthly interest was then payable by DBW on an interest only loan with the bank.
   2. DBW bore the legal responsibility as the borrower for meeting those interest payments to Westpac. It was DBW as owner and borrower, not Century West as a lessee of the land from DBW and the business operator, that was liable for the interest to Westpac on those loans. Century West paid rent to DBW and it seems the level of the rent (when paid) matched, or was close to the level of the loan interest repayments. But those back‑to‑back arrangements were friendly, rather than strictly legal. At times, there were unpaid arrears by Century West, that were not pursued. Century West's rent when paid was said, roughly, to have been at about the level of market rent. That as received rent by DBW was then conveniently deployed by it to service the interest accruing due on its Westpac loan. That is what their accounts reflect. The 'rent' paid by DBW was claimed as a tax deductible business expense. Friendly as these arrangements obviously were, they were legally distinct and no doubt tax efficient.
3. There is no challenge to this description of the mortgage arrangements, or the trial judge's finding that it was DBW Reynolds who incurred the loan and who was legally responsible for the mortgage repayments and not Century West.
4. The trial judge concluded that this aspect of Century West's claim impermissibly sought to lift the corporate veil as between DBW Reynolds and Century West.[237] His Honour concluded that this impermissible one economic unit approach 'fatally infects' Century West's claim 'as it came to be assembled for it by a business accountant expert witness at trial, Ms Jacqui Le-Fevre'.[238] His Honour concluded that not only did the claim lack any supporting precedent, but it also conflated the interest paid to the bank by DBW Reynolds with the level of Century West's rent payment obligation due to DBW Reynolds.[239]
5. Whilst accepting that the lease payment arrangements as between DBW Reynolds and Century West were more flexible in terms of enforcement, owing to the related nature of the corporations and their common control by Mr and Mrs Reynolds, as compared to the current lease arrangements between Century West and the third‑party landlord,[240] the trial judge rejected this claim for the reason that:
   1. The plaintiffs, on my assessment, seek at the trial to deconstruct for compensation pursuit purposes the legalities of the lessor/lessee relationship effected as between DBW and Century West, at 249 Dundas Road. This approach, in my view, is unprecedented, unprincipled and, in the end, unsustainable.
   2. The suggested approach was rightly rejected in the expert evidence of the defendant's business expert, chartered accountant Mr Martin Langridge, in his report and by his evidence at the trial during a concurrent evidence session with Ms Jacqui Le-Fevre. Mr Langridge's views, which I overwhelmingly prefer and would accept over those of Ms Jacqui Le-Fevre, correctly address the position as a matter of concept.
6. The trial judge noted that the business structure put in place by Mr and Mrs Reynolds was not unusual and delivered taxation benefits and also protected Mr and Mrs Reynolds against potentially unlimited personal liability exposures in respect of any business losses.[241] His Honour held that there was nothing improper in the business structure put in place by Mr and Mrs Reynolds, however it was not now possible to disregard that structure for the purposes of the assessment of compensation under the LAA:
   1. Those beneficially enjoyed corporate holding and trading structures were no doubt chosen to deliver their benefits, but they cannot then be cast aside later merely because they present as less convenient for the purposes of pursuing a compensation exercise. That exercise must, by regard to s 241 of the LAA, be conducted solely by reference to valuing the discrete interests of a corporate land owner (DBW) and the corporate lessee/business operator (Century West).

1. But none of that undoubted former convenience detracts from the true character of the legal relationships deliberately put in place as between the two plaintiff corporations. These were not sham arrangements to be casually ignored when inconvenient. The submission that either corporate plaintiff was economically harmed because Century West was forced to enter a new lease, whilst thereupon paying a lower level of rent to its new arm's length landlord, is a preposition that is simply not sustainable in principle.
2. The trial judge also concluded that even if this claim was allowed, any additional costs would need to be set off against the gains received by Century West by reason of the lower rent obligations under the new lease in comparison with the leasing arrangement with DBW Reynolds.[242]
3. Finally, his Honour also concluded that nothing in his decision would necessarily prevent a differently framed economic loss case (supported by evidence) by Century West, by reference to compensation for trading losses suffered by Century West from being pursued. However, it was not pursued.[243]

1. The appellants' case in relation to this ground is that as a matter of statutory construction the loss suffered by DBW Reynolds and Century West, when considered together as one economic unit, falls within the scope of loss or damage 'sustained' for the purposes of s 241(6)(b) of the LAA. Further, that the loss or damage sustained by the appellants was due to the 'disruption and reinstatement of a business'.
2. The appellants submit that their case as presented (and pleaded) was one of a global economic claim where there was a single business conducted by both appellants jointly on the Land. The appellants submit that in applying the words 'a business' it is necessary to take the business as it is operated or conducted or structured by the claimants, and also to have regard to all aspects of the business and not just to a short-hand description of the business. The appellants submit that a more 'fulsome' description of the business carried on by DBW Reynolds and Century West includes not only the operation of the road haulage business, but also:[244]

the payment for the ownership and use of the land and the buildings on the land as assets of the business and the activities of the business and the employment of the income of the business. It would include the use to which the assets are put as a means of earning income: see Eastaway supra. In so describing the business, one must necessarily have regard to the structure and respective contributors to the business, in this case, the two companies as owner and as lessee.

1. The appellants' case is also that the business was disrupted and reinstated when the Land was taken. However, in the reinstated form the appellants lost the benefit of the 'beneficial relationship' that previously existed whereby DBW Reynolds owned the Land and Century West leased the Land.[245] The appellants' case is that the true cost to the appellants in occupying the Land for the purposes of the business was the cost of loan repayments to the bank, whereas the true cost to the appellants in occupying the new premises is the cost of rent payable to their new landlord, the latter being higher than the former. The appellants' expert accountant, Ms Jacqui Le‑Fevre, valued that difference over a four‑year period at $684,275. That amount was not disputed by the respondent's expert Mr Langridge, although the premise of the recoverability was not accepted.
2. The appellants submit that there is no statutory impediment to proceeding on this basis. The appellants submit that as a matter of construction, s 241(6) of the LAA is not a valuation exercise and does not require the court to value the discrete interests of each appellant, but rather to have regard to the loss or damage suffered by a claimant.[246] Therefore, there is no impediment to considering the losses sustained by appellants together, or with Century West's claim including losses sustained by DBW Reynolds. The appellants refer to the decisions of Smith, Stone & Knight v Birmingham Corporation[247] and Eastaway v The Commonwealth[248] in support.
3. The respondent's case is that the trial judge was correct to reject this aspect of Century West's claim for compensation on the basis that the 'single economic unit' approach is conceptually misconceived. The respondent submits that as a matter of statutory construction, each appellant has a claim for compensation relating to their respective taken interests in the Land. The respondent submits that there is no statutory basis for the treatment of the claims of DBW Reynolds and Century West as one global claim for the purposes of the assessment of compensation. Rather, each claim must be assessed separately, and the statutory task is to determine the amount of compensation payable in respect of each taken interest.
4. The respondent submits that the authorities referred to by the appellants do not assist their case, and rather the authorities support the respondent's construction. The respondent also submits that the effect of the appellants' submission is an impermissible attempt to lift the corporate veil.
5. Finally, the respondent also disputes the basis of the calculation of the figure by the appellants' expert accountant for a number of different reasons. However, given our below conclusion, it is not necessary to consider this aspect of the respondent's case.

Is Century West entitled to damages for additional leasing costs on the basis of the financial position of the single economic unit?

1. For the following reasons, we do not consider that the trial judge made any error in concluding that this aspect of Century West's claim did not fall within the scope of s 241(6)(b) of the LAA.

1. First, the case advanced by the appellants is not consistent with the further amended statement of claim.
2. Senior counsel for the appellants submitted that the appellants' case as run at trial (and maintained on appeal) was that whilst the appellants were separate legal entities, the appellants jointly ran the business from the Land.
3. Paragraph [4A] of the further amended statement of claim pleads that the claims of the appellants should be determined 'as one global claim for the purposes of compensation'. However, that is not the manner in which the remainder of the further amended statement of claim is pleaded.
4. The appellants' pleaded case draws a distinction between the claim for compensation made by DBW Reynolds and the claim made by Century West. The appellants plead that each appellant made a separate claim for compensation. The prayer for relief is reflective of these separate claims. Only Century West pleads a claim under s 241(6) of the LAA. The relevant item in the table for the purposes of ground 3, is 'item (e) ‑ additional costs of leasing temporary premises'. The claim by DBW Reynolds is limited to a claim for the value of the Land (being a reference to s 241(2) of the LAA).
5. The appellants also plead that it is Century West who is the operator of a transport business located on the Land. That description is then defined as 'the business' for the purpose of the remainder of the further amended statement of claim. There is no plea that DBW Reynolds is the operator of 'the business' or any business at all. There is no plea that 'the business' was run jointly by DBW Reynolds and Century West. DBW Reynolds' role was as landlord to Century West.
6. The appellants do not plead any direct relationship between each of DBW Reynolds and Century West outside of the involvement of Mr and Mrs Reynolds. That is, the corporate appellants are not in a relationship of, for example, partnership, parent and subsidiary, or principal and agent. At its highest, the appellants plead that Mr and Mrs Reynolds have an involvement in, or a role in, each of DBW Reynolds, Century West and the DBW Reynolds Family Trust. These various roles have resulted in Mr and Mrs Reynolds having control over each of DBW Reynolds and Century West.

The single economic unit approach is contrary to the provisions of the LAA

1. Secondly, we do not consider that the appellants' case as articulated by senior counsel is supported by the statutory text.
2. The question of the scope of the reference to 'a business' in s 241(6)(b) of the LAA is a question of statutory construction. The question is whether the reference to 'a business' is a reference to a business of the claimant whose loss or damage is being assessed for the purposes of making an award of compensation, or whether it is a reference to a business carried on by any other claimant in relation to the land that has been taken, regardless of whether the loss or damage is referrable to the particular interest of the claimant whose claim for compensation is being assessed.[249]
3. The general principles concerning the process of statutory construction are well known and are not in dispute. Statutory construction involves the attribution of objective meaning to the statutory text having regard to considerations of text, context and purpose. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The statutory text is the surest guide to Parliament's intention. A decision as to the meaning of the text requires consideration of the context, in its widest sense including the general purpose and policy of the provision, the history of the legislative scheme and the mischief to which the provision is directed.[250]
4. Section 151(1) of the LAA (which is located in pt 9) provides, relevantly, that in pt 9 and pt 10:

(1) claimant means 'a person entitled to claim compensation under Part 10'; and

(2) interest means, relevantly, 'any legal or equitable estate or interest in land'.

1. Section 179(b) of the LAA provides that upon the registration of a taking order, every interest in land is terminated and is converted into a claim for statutory compensation under pt 10 of the LAA. Section 202(1) provides that every person having any interest in land which is taken is entitled, subject to pt 10 of the LAA, to compensation for the interest taken.
2. Section 208 is concerned with who can make a claim for compensation, and makes provision for some claims to be made on behalf of a person entitled to make a claim:

(1) A claim for compensation may be made by any person entitled to compensation under this Part, or by the person's executor or administrator, whether or not the person has the power to sell and convey the interest on which the right to compensation depends.

(2) Any claim on behalf of beneficiaries of trusts, wards or incapable persons may be made by their trustees or guardians.

1. Section 211 details the requirements for the content of a claim for compensation, which includes the nature and particulars of the claimant's interest in the land and each matter on account of which compensation is claimed, with particulars of the nature and extent of the claim. A claim must be served on the acquiring authority and must include all deeds and documents necessary to establish the claimant's title to the interest.
2. Section 215 and s 216 of the LAA make provision for an acquiring authority to dispute 'a claimant's title to the interest in land, or to some part of the interest'.
3. Section 217(1) provides that if a claim is made under pt 10 and the acquiring authority does not dispute the 'claimant's title to the interest in land, or disputes it only in part', then the authority must cause a report to be made within 90 days as to 'the value of the interest' which is not in dispute. Under s 217(3), the acquiring authority must serve 'on the claimant in an approved form an offer of compensation with respect to the interest in the land or the part of the interest in question' as soon as possible after receiving the report.
4. Section 223 of the LAA is concerned with court actions for compensation. Section 223(4) provides that the court may, on application by the defendant, by order direct any other person claiming compensation in relation to the taking of any interest in that portion of land, or who appears to have had an interest in that portion of land, to join as a plaintiff to the action.
5. Section 223(8) provides that upon the trial of the action, the court is to determine the amount of compensation payable in respect of the taking of the interest in land having regard solely to the provisions of pt 10 and in particular to the matters prescribed in div 5 and s 256 of the LAA. To the extent two persons are entitled to share in the compensation, the court is to determine the amount payable to each person.
6. Set in that context, s 241(1) provides that in determining the amount of compensation (if any) to be awarded for an interest in land taken under pt 9, regard is to be had solely to the matters referred to in s 241 of the LAA. Section 241(2) continues the reference to an 'interest', stipulating that regard is to be had to the value of the land or the interest of the claimant in the land. Section 241(6) provides that regard is to be had to the loss or damage, if any, sustained 'by the claimant by reason of' any of the matters referred to in the following sub-paragraphs. Section 241(6)(b) specifies 'disruption and reinstatement of a business'. Section 241(8) is concerned with solatium, and again refers to 'the interest in land', whilst s 241(10) and s 241(11) are concerned with the payment of interest, and again make reference to 'the interest in land taken'.
7. Section 244(1) provides that the court hearing the action for compensation may award one aggregate amount as compensation for a whole claim or may divide the claim into several items and award a separate amount for each claim.
8. The plain language of the text of s 223(8)(a) and s 241(1) of the LAA identify that what is required to be assessed is the compensation to be paid to a claimant for their interest in land which has been taken. This involves the identification of both a claimant and its interest in land which has been taken. In the context of assessing the amount of compensation, s 241(6)(b) provides that regard may be had to any loss or damage sustained by 'the claimant' by reason of disruption and reinstatement of a business. The reference to 'a business' must therefore be understood as a reference to a business of the claimant (or a business in which the claimant has a legal or equitable right or entitlement) that is associated with the claimant's interest in land which has been taken.
9. This construction is consistent with the broader context and purpose of pt 9 and pt 10 of the LAA. As revealed by the above summarised provisions, these parts establish a regime whereby compensation is payable to a person for any 'interest in land' which is taken. There is nothing in the text of s 241, or any other provision of the LAA, which enables a court assessing the amount of compensation to have regard to loss or damage sustained by a person other than the claimant, or to a different interest in the taken land from that of the claimant.
10. Section 244(1) does not suggest otherwise. This section permits an aggregate sum of compensation to be awarded for 'a whole claim' or permits a court to divide 'the claim' into several items and award a separate amount of compensation for each item. The reference to a claim in this section must be understood in the context of the provisions outlined above and should be understood as a claim for compensation being made by a person who has an interest in land that has been taken. Properly construed, s 244(1) does not provide for the combining of claims by different claimants each having a separate and distinct interest in land which has been taken.
11. Section 208 of the LAA also does not suggest otherwise. In the circumstances specified in s 208, a claim for compensation may be brought by a person on behalf of a claimant. In such a case, the court is to determine the amount of compensation payable to the claimant on whose behalf the claim is brought. This does not involve assessing compensation by reference to a person other than the claimant, or by reference to a different interest in the land which has been taken.
12. It may be that in respect of any one interest in land there is more than one claimant. For example, in a case where two individuals own the fee simple in land which has been taken as tenants in common. In such a case, the court is to determine the amount of compensation payable to each claimant in relation to that claimant's interest in land. Again, this does not involve assessing compensation by reference to a person other than the claimant, or by reference to a different interest in the land which has been taken.
13. The appellants submit that as a matter of construction, s 241(6) of the LAA is not a valuation exercise and does not require the court to value the discrete interests of each appellant, but rather to have regard to the loss or damage suffered by a (or any) claimant. However, this submission is inconsistent with the express language of s 223(8)(a) and s 241(1) which identify that the statutory task is to determine the amount of compensation payable to the claimant for the taking of the 'interest in land'. It also inconsistent with the text of s 241(6) which requires that regard be had to the loss or damage sustained 'by the claimant'. It is also inconsistent with the broader context of pt 10 of the LAA, which establishes a compensation system which is based on a claim by a specific claimant in relation to their specific interest in land which has been taken.

The authorities support the respondent's construction

1. Thirdly, the parties referred the court to a number of cases in support of their respective constructions. These authorities are not inconsistent with the above construction.
2. In Eastaway, the resumed land was held by two individual plaintiffs on trust for the third corporate plaintiff. The corporate plaintiff conducted an engineering and iron-foundry business on the land. It was not in dispute that the effect of the taking was to completely destroy the business operated by the corporate plaintiff. The two individual plaintiffs were the shareholders of the corporate plaintiff and also its directors. It had originally been proposed that the corporate plaintiff would lease the land, but the need for the lease ceased after the individual plaintiffs executed a declaration of trust. It was not in dispute that in light of the trust relationship, the corporate plaintiff alone was entitled to compensation for the taking of the land.[251] The High Court held that the corporate plaintiff was entitled to compensation for the value of the land as well as the loss of the value of the goodwill of the business.[252] In valuing the goodwill, the High Court held that it was not appropriate to deduct an amount to represent the notional rent for the land.[253]
3. In Smith, Stone & Knight, the claimant company was the owner of a factory and a number of small houses. A wholly owned subsidiary company of the claimant operated a waste business from those premises. The claimant owned all the shares in the subsidiary, save for the shares held by the directors of the claimant, each of whom held their shares on trust for the claimant. All profits made by the subsidiary from the business went straight to the claimant parent company and there were no separate books maintained by the subsidiary.
4. When the premises were resumed, an issue arose as to whether the claimant company could claim compensation for disturbance to the business, or whether only the subsidiary company could claim disturbance loss. The court approached the issue on the basis that it was a question of fact as to whether the subsidiary was carrying on the waste business as the claimant's business, or as the subsidiary's business. Atkinson J held that at all times the business 'belonged to the claimant' and it was the real occupier of the premises. To the extent the subsidiary was in occupation, it was for the purpose of the service it was rendering to the claimant. Atkinson J held that the subsidiary was an agent of the claimant.[254]
5. In DHN Food Distributors Ltd and Ors v London Borough of Tower Hamlets,[255] the appellants operated a grocery importation and wholesale business. The appellants' business affairs were arranged such that one company, DHN Food Distributors, owned the business and was the parent company of two other companies. One of these wholly owned subsidiary companies owned the land from which the business operated and the other wholly owned subsidiary company owned the vehicles used in the business. The parent company owned all the shares in both subsidiary companies, and all three companies had the same directors.
6. The local authority compulsorily acquired the land from which the business operated for housing. At first instance, the Lands Tribunal held that the subsidiary company which owned the land was entitled to compensation for the value of the taken land, but was not entitled to any compensation for business disturbance as it did not own or operate the business. Further, that the parent company, who did operate the business which had been disturbed, was not entitled to compensation for that disturbance as it did not have any interest in the land.
7. This decision was overturned by the Court of Appeal of England and Wales which held that, on the facts of the case, the parent company held an equitable interest in the land or, alternatively, an irrevocable licence to carry on the business on the land. It is not necessary to outline the complex facts underpinning this conclusion. The members of the court also accepted that given the parent company, DHN Food Distributors, controlled the subsidiaries, it was appropriate to look at the economic entity comprising the three companies together. Goff LJ held that this final conclusion was based on the specific facts of the case and did not accept that such a conclusion would apply to all situations.[256]
8. Woolfson and Anor v Strathclyde Regional Council[257] involved a claim for compensation for disturbance by Mr Woolfson. Mr Woolfson was the owner of two parcels of adjoining land with a further two adjoining parcels being owned by company S. Mr Woolfson and his wife owned the shares in company S. All four premises were shops, and the entire four parcels were used by company C to operate a wedding garment business. Mr Woolfson and his wife worked in the business. Mr Woolfson and his wife owned the shares in company C. Mr Woolfson was the sole director. When the entirety of the land was compulsorily acquired, Mr Woolfson and company S jointly claimed compensation for the value of the land and disturbance of the business. Mr Woolfson and company S claimed that company C carried on the business as their agents. Neither company was a parent of the other.
9. The Lands Tribunal rejected the claim for compensation for disturbance by Mr Woolfson and company S. The Lands Tribunal held that the business was that of company C and there was no basis to pierce the corporate veil. Mr Woolfson and company S appealed. The House of Lords rejected the appeal and held that there was no basis for treating the company structure as a façade and that, unlike DHN Food Distributors, this was not a case where one company was a wholly owned subsidiary and controlled by another company.
10. Mario Piraino Pty Ltd v Roads Corporations [No 2][258] involved a claim for compensation under Victorian legislation, not in relation to the compulsory acquisition of land, but rather for loss sustained as a result of the refusal of the applicant's planning application. The relevant provision of the legislation provided:[259]

The owner or occupier of any land may claim compensation from a responsible authority for financial loss suffered as the natural, direct and reasonable consequence of a refusal by the responsible authority to grant a permit to use or develop the land on the ground that the land is or will be needed for a public purpose.

1. The relevant facts were that Mr and Mrs Piraino were the directors of the claimant company. They were also directors and sole shareholders of another company called Australian Furniture Suppliers Pty Ltd (AFS) which ran a number of furniture shops. Mr Piraino desired to seek a new site to replace one of the stores. A suitable premises was located, and a contract of sale was signed by the claimant. It is not necessary to detail all aspects of the approval process, but ultimately the position was that approval was refused because the Roads Corporation objected on the basis that a nearby road was to be built which, whilst not ultimately being on the premises, did have consequences for the roads near the premises and access issues.
2. The claimant then commenced an action in the Victorian Supreme Court seeking compensation for the refusal of the development application and the forced abandonment of the new shop project. The relevant issue in dispute between the parties was that part of the claimant's claim for the loss of profits at the new premises, which the claimant submitted would have been operational by a certain date. The respondent submitted that these profits were not recoverable by the claimant as, if they were sustained, they were not sustained by the claimant, but rather the related entity AFS.
3. Gobbo J held that the claimant company could not recover for the loss of profits for the following reasons:[260]

The claimant is faced with the difficulty that the loss of profits has been sustained by AFS which was neither the owner nor the occupier of the land at any material time. The factual basis for overcoming this formidable hurdle is said to be the close links and community of interest between the two companies. This is founded on the undoubted fact that Mr and Mrs Piraino have the actual control and management of both companies. They are both full time directors and Mr Piraino is managing director, in function if not in title. Mr and Mrs Piraino are the only directors of the claimant. The same is true of AFS save that Mr Tempone is also a director. Mr and Mrs Piraino are the sole shareholders of AFS. Though the claimant is a family trust company, Mr and Mrs Piraino by their control of the claimant control the operation of the trust. It is said that Mr and Mrs Piraino in substance constitute the claimant and AFS and that the loss sustained by AFS is a loss sustained by the claimant.

Though this argument has much factual validity, it is not entirely correct. Thus the beneficial ownership of the two companies is not the same for the shareholders in the claimant are Mr Tempone and Mr Tropeano. Though the Pirainos and their children are the specified beneficiaries under the trust, there is also a wide category of general beneficiaries listed.

It was argued that recovery by the claimant of losses sustained by AFS could be sustained by recourse to two arguments, namely, that the claimant held the subject land on trust for AFS and that there was such a common interest that, allied to the concept of value to the owner, there ought to be recovery.

As to the trust argument, this must fail. There was no evidence that any trust has been created.

...

As to the second argument, this has considerably more weight. It is necessary at the outset, however, to consider the attempted reliance on the concept of value to the owner. The entitlement under s 98 is not founded on this concept; it requires proof that an owner or occupier of land has suffered financial loss as a result of a refusal of a permit to use or develop that land. Value to the owner is relevant to the next stage namely, assessment of such loss. It does not in my view assist in the present type of claim. Even if this were an acquisition, I doubt whether the concept would advance an argument that in substance really amounts to saying of a third party's loss 'His loss is my loss'.

1. Gobbo J went on to distinguish the facts before him from those in Smith, Stone & Knight. His Honour held that unlike Smith, Stone & Knight, AFS was not the agent of the claimant. Rather, the real case advanced by the claimant was that Mr and Mrs Piraino owned everything and could treat all the entities as one unit.[261] Gobbo J held that this was insufficient:[262]

It was said in the present case that there was 'an utter identity and community of interest'. But at the end, the question has to be answered as to what gives the claimant the right to treat the loss of AFS as its loss so as to the claimant's right to recover. If community of interest is taken to sustain the ultimate, then presumably the claims are interchangeable and AFS itself could sue. The DHN case illustrates how a parent can claim for its own loss even though the business disturbed is on land owned by the subsidiary. Here the claimant seeks to recover for loss of an associate company on its own land. There is no question of the two companies here being in the relationship of parent and subsidiary. It means that in order to sustain the claim here, being a case where the same two individuals control two companies, one has to treat AFS's loss as that of the claimant and to rest this not on the subsidiary status but on the identity of interest.

I am not satisfied that mere common control provides identity of interest sufficient to make claims and entitlements in effect interchangeable. I say mere common control because this was not a case of common shareholders and in that sense common ownership. Nor did the family trust do more than introduce an additional complication. I have therefore come to the conclusion that the profits lost by AFS cannot be recovered by the claimant.

1. None of the above cases assist the appellants' submissions in relation to this ground of appeal. None of the authorities stand for the proposition that when assessing the compensation payable to a claimant pursuant to s 241 of the LAA (or more generally) it is appropriate to have regard to the losses suffered by not only the claimant, but the claimant together with other entities as part of a single economic unit. Rather, in each case the question was whether the losses suffered by the other entity could be construed as being losses suffered by the claimant, being the party with the interest who was entitled under the relevant legislation to make a claim for compensation.
2. Eastaway, DHN Food Distributors and Smith, Stone & Knight are factually very different from the present case. In each case there was a relationship between the claimant and the third party of such a legal nature as to mean that the claimant's interest in the land encompassed the interest of the other entity. In Eastaway and DHN Food Distributors, the claimant for compensation had an equitable interest in the land and was therefore also able to obtain compensation for the value of the land. In Smith, Stone & Knight the claimant was the parent company of the company that operated the business, and the subsidiary acted as agent for the claimant. All profits of the wholly owned subsidiary company went to the parent company. In DHN Food Distributors the claimant was also the parent company of the corporate entity that owned the land.
3. Each of these factual situations fall comfortably within the statutory regime established in the LAA for the assessment of compensation. None of these factual situations involve the court assessing the compensation owed to one claimant by reference to losses or damage suffered by a different claimant in relation to a different interest in the taken land. Nor do these factual situations involve the court considering the losses suffered by the claimant as part of a single economic unit, irrespective of the legal form and structure that exists as between the claimant and the other members of the economic unit.
4. The facts of the decisions of the Mario Piraino and Woolfson cases are closer to the present facts. In those cases, the lack of any legal relationship between the claimant and the associated company precluded the claimant from being awarded compensation. The fact that the respective related companies were controlled by the same individuals was not sufficient.

Application of the statutory provision to the facts

1. Fourthly, the facts of this case do not support the conclusion that the loss or damage sustained by Century West by way of disruption and reinstatement of 'a business', includes the losses claimed by the appellants as being the additional costs of leasing the temporary premises.
2. In any case the question of what constitutes 'a business' for the purposes of s 241(6)(b) of the LAA and the assessment of compensation will be a question of fact for the court to determine. It will be necessary for the court to consider whether the business in question is a business of the claimant, and one which is associated with the claimant's interest in land which has been taken.
3. It is not in dispute that DBW Reynolds and Century West are separate legal entities, with separate taxation arrangements. DBW Reynolds was the owner of the Land and leased the Land (and equipment) to Century West. Century West then operated the transport haulage business on the Land and paid rent to DBW Reynolds for the land and equipment. DBW Reynolds was the entity who obtained the relevant loans and who was responsible for their repayment. Separate sets of books were maintained for each appellant and the profits of Century West were not the profits of DBW Reynolds. The trial judge held that these were not sham arrangements. The evidence was not that DBW Reynolds and Century West jointly ran the transport haulage business, but rather that Mr and Mrs Reynolds jointly ran both DBW Reynolds and Century West.
4. The relevant claimant for the purposes of the assessment was Century West. Therefore, in having regard to the loss or damage sustained by the disruption and reinstatement of its business on the new premises, regard should be had to the losses (if any) sustained by Century West, and not those of DBW Reynolds. The only claimed basis for the loss the subject of this claim is the loss to DBW Reynolds of the rent being paid by Century West, which was in turn used by DBW Reynolds to pay the mortgage repayments. The unchallenged findings are also that the rent paid by Century West to the new landlord is less than the rent required to be paid by Century West to DBW Reynolds under the terms of the previous lease.
5. In these circumstances, there has been no loss or damage sustained by Century West in the form of additional leasing costs by reason of the disruption and reinstatement of its transport haulage business. There was no error on the part of the trial judge in concluding that the case advanced by the appellants did not constitute loss or damage sustained by Century West for the purposes of s 241(6)(b) of the LAA.
6. Adopting this approach does not fail to have regard to the business as operated. The appellants operated as two distinct corporate entities. Century West operated the business and leased the Land and equipment from DBW Reynolds, who was the owner of the Land and who obtained the loans. This was not a situation, as in Eastaway, where one appellant held its interest in the Land on trust for the other. It was also not a situation, as in Smith, Stone & Knight, where the appellants were in a principal - agent relationship or a parent - subsidiary company relationship. Rather, the factual situation is more closely aligned with the decision of Mario Piraino.
7. As correctly observed by the trial judge, Mr and Mrs Reynolds chose to put in place a particular corporate structure, and there is nothing improper in doing so. However, the appellants and Mr and Mrs Reynolds cannot now, for the purposes of the assessment of compensation, seek to have the court disregard that corporate structure for the purposes of considering Century West's claim under s 241(6)(b) of the LAA.

1. For the reasons set out above, ground 3 should therefore be dismissed.

Ground of appeal 4 Summary of the reasons of the trial judge

1. The trial judge described Century West's claim for compensation based on the loss of storage contracts as follows:
   1. Century West claims for a loss of a business opportunity suffered, for it to earn further revenues over time under a third‑party storage area utilisation arrangement - that it says was feasible at the former premises, due to its more utilisable configuration for spare space. However, such an arrangement around storage use for third parties was not feasible, it says, at the relocated business premises, although, in fact, they are of a greater area.
2. The quantum of Century West's claim ranged between $803,100 (for the Austral contract) and $587,210 (for the alternative contracts).
3. The trial judge outlined that the respondent denied the lost opportunity claim as being unprincipled, and described the legal issue arising in the following terms:
   1. There is a conceptual issue arising in the trial over whether, as a matter of law, a claim for statutory compensation under s 241(6) of the LAA can legitimately support a claim to what is, in effect, a claimed economic loss of a chance, or a lost business opportunity. This is the claim for the allegedly lost business opportunity of obtaining greater revenue through the (lost) opportunity to enter more profitable third-party contractual arrangements, albeit such arrangements were never actually ever perfected.
   2. The PTA's contrary position is that ss 241(6)(a) and (6)(b) of the LAA in particular, cover only 'loss or damage' that is 'sustained' by reason of a disruption or a reinstatement of a business. Hence, it is said that, the loss of a mere economic opportunity, or of a chance, does not engage with that required statutory threshold, according to the PTA.
4. In terms of the legal principles relevant to this aspect of the appellants' claim, the trial judge referred to the decision of Edelman J in Lenz Nominees as being instructive. Lenz Nominees concerned a claim for compensation under s 241 of the LAA following the resumption of part only of the plaintiff's land for the purposes of the Forrest Highway. The trial judge referred to that portion of the reasons which considered a claim under s 241(6)(e) of the LAA:[263]

Section 241(6)(e) does not permit the recovery of losses which have not been suffered for several reasons. First, s 241(6)(e) is concerned with loss or damage 'sustained' by the claimant. The focus of these introductory words of the section is upon loss or damage actually incurred. The words of s 241(6)(d) do not detract from this. Those words refer to architect's fees or quantity surveyor's fees 'actually incurred by the claimant in respect of proposed buildings or improvements'. The reference to 'actually incurred' narrows those fees which are recoverable. This is perhaps in contrast with s 241(6)(c) which may include future lost profits from the termination of building contracts. Or it could be to emphasise that only those fees incurred prior to the Taking are recoverable. (the trial judge's emphasis in bold)

1. The trial judge observed that the appellants' relied on s 241(6)(b) of the LAA but concluded that:
   1. Edelman J's observations made at [423] in Lenz Nominees, by reference to the word used in the preface of s 241(6)(e) of the LAA, namely, 'sustained', must in my assessment be equally applicable by parity of reasoning to a s 241(6)(b) claim.
   2. In Lenz Nominees, Edelman J had earlier observed, by reference to case authority under the former compensation legislation, to the reasons of Virtue J in Konowalow and Felber v Minister for Works [1961] WAR 40,41, observing:

[417] The genus in s 63(aa)(i) - (iv), which Virtue J identified, is 'compensation for loss or damage resulting from interference with the activities being carried on by the plaintiff on the land'.

1. The trial judge dismissed this aspect of Century West's claim for the following reasons:
   1. On my assessment, the conceptual character of the as-articulated loss of a chance claim raised by Century West - in respect of a claimed lost opportunity to win additional revenues potentially obtainable from the storage and consequent additional road haulage work from its existing customer, Austral - does not align to the legal character of a permissible claim for loss or damage that has been sustained, under s 241(6) of the LAA.
   2. Nor, in my view, does that lost future revenue opportunity claim meet the threshold textual criteria of s 241(6)(b) - in regard to showing loss or damage suffered by reason of 'disruption and reinstatement of a business'. Hence, the claim is too wide by Century West.
   3. A loss of the chance of gaining a future assumed profitable contract relationship, is a claim of a different ilk to a consequential loss and damage cause of action, as is envisaged by s 241(6) of the LAA. This claim must fail.
2. The trial judge went on to find that even if he were to allow the claim based on possible future contracts with Austral, consistent with the approach of French J (as his Honour then was) at first instance in Sellars v Adelaide Petroleum NL,[264] he would apply a discount of at least 50% to that claim to take into account the 'real prospect that it might not have ever eventuated, or may have been derailed by other circumstances before it was perfected'. This discount resulted in an amount of $401,550 in relation to the Austral lost income claim.[265]
3. The trial judge also held that this amount would then need to be set off against the benefit flowing to Century West by reason of its lesser rent payable at the new premises as explained by Mr Langridge.[266]
4. The trial judge concluded that he would not allow the alternative claim for lost contracts on the basis that it was insufficiently proved.[267]

1. The appellants' case in relation to ground 4 is that the trial judge erred 'in principle' by rejecting Century West's claim for lost income that Century West would have obtained if it had entered into a new agreement with Austral.
2. Senior counsel for the appellants confirmed that the ground of appeal alleged that the trial judge made an error of law in rejecting this aspect of Century West's claim.[268] The appellants submit that the trial judge erred in law by:

(1) concluding that the loss of a future profitable business opportunity was not 'loss or damage sustained' for the purposes of s 241(6)(b) of the LAA. The appellants submit that such a loss (if factually established) is an example of a loss of a chance or a loss of an opportunity that is recoverable for breach of contract, in tort and in misleading and deceptive conduct cases. The appellants rely on a number of the authorities in this regard, including The Commonwealth v Amann Aviation Pty Ltd[269] and Sellars v Adelaide Petroleum NL. The appellants' case is that there is no reason why such a loss is not 'loss or damage' that is 'sustained', which the appellants submit should be given its ordinary meaning;

(2) concluding that the loss or damage was not suffered by reason of 'disruption and reinstatement of a business'. The appellants submit that the loss or damage was suffered because of the taking of the Land, and by the inability of Century West to provide storage services at the new location; and

(3) concluding that Century West's claim was of a 'different ilk' from a consequential loss and damage cause of action as envisaged in s 241(6) of the LAA. The appellants submit that the trial judge provided no reasons for this conclusion, but that the loss or damage suffered is of the same genus as the other examples contained in s 241(6) of the LAA.

1. Senior counsel for the appellants confirmed that the appellants' claim was based only on s 241(6)(b) and not s 241(6)(e) of the LAA.[270]
2. The appellants' ground of appeal also refers to the trial judge making an error in concluding that if such loss did fall within the scope of s 241(6)(b) of the LAA, it was appropriate to apply a 50% discount to the loss or damage claimed for contingencies and uncertainty. However, in oral submissions, senior counsel for the appellants accepted that there was no 'error in principle' in applying such a discount.[271] Rather, senior counsel submitted that the trial judge erred 'in principle' in relying on 'commercial experience' in concluding that a 50% discount was appropriate, when there was no evidence to that effect.[272] Senior counsel for the appellants accepted that the ground did not allege an error of fact in relation to the conclusion that the figure of 50% was appropriate to be applied.[273]
3. The appellants do not advance any claim that the trial judge erred in law in dismissing the alternative basis of the claim for loss of profits from other lost contracts on the additional basis that it was 'insufficiently proved'.
4. The respondent accepts that, in light of the authorities referred to by the appellants, the conclusion of the trial judge that a loss of a future profitable business opportunity (if established) was not loss or damage 'sustained' for the purposes of s 241(6)(b) of the LAA, is an error of law. The respondent accepts that, consistent with the authorities, such a loss would be 'sustained', meaning 'suffered'.[274] However, the respondent submits that for two different reasons there was no error on the part of the trial judge in relation to his Honour's ultimate conclusion not to allow any compensation for this aspect of Century West's claim.
5. First, the respondent submits that s 241(6) of the LAA is concerned with consequential loss or damage arising from the interference with activities carried out on the taken land. Properly construed, s 241(6) does not extend to loss of a chance or opportunity to use the land to engage in an income earning activity. Rather, this is an aspect of the land's potential and something that properly falls within the market value of the land, or in this case the market value of the leasehold interest in the Land, which is addressed in s 241(2) of the LAA. The respondent relies on the authorities of Moloney v Roads and Maritime Services[275] and Roads and Maritime Services v United Petroleum Pty Ltd[276] in support. To this extent, the respondent submits that the conclusion of the trial judge that the claimed loss was of a different 'ilk' to the loss or damage addressed in s 241(6) of the LAA is correct. The respondent's case is that Century West has not made a claim for compensation under s 241(2) of the LAA, which the respondent says is not surprising given the rent previously being paid by Century West to DBW Reynolds was market rent and the business was not destroyed, but rather relocated.
6. Secondly, and in any event, the respondent submits that if the claimed loss does fall within s 241(6)(b) of the LAA, then it is necessary to offset that loss against the benefit obtained by Century West from the new lease, being the reduced rent. The amount of this reduced rent is in the vicinity of $890,000. When this is done, the respondent submits that Century West has not suffered any loss or damage (irrespective of whether a 50% discount for uncertainty is applied). The respondent submits that this second issue alone is sufficient to resolve the ground of appeal without determining the first issue.

Is a loss of a business opportunity loss or damage 'sustained'?

1. Resolution of this ground of appeal is largely a matter of statutory construction of s 241(6) of the LAA.
2. The appellants' case, which the respondent accepts, is that a loss of a future profitable business opportunity from an established customer (if factually established) can be loss or damage 'sustained' for the purposes of s 241(6) of the LAA.
3. The term 'sustained' is not defined in the LAA. The appellants submit that it should be given its ordinary English meaning. The Macquarie Dictionary and the Oxford English Dictionary each define 'sustained' as including to undergo or experience or suffer injury, loss, damage. The respondent accepts this to be correct, and we agree that the text, context and purpose of the relevant provisions of the LAA support the application of the ordinary meaning to this term in the context of s 241(6) of the LAA.
4. The question that arises is whether, as a matter of construction, a loss of a future business opportunity is loss or damage which is 'sustained' - or suffered - by an individual, or whether sustained has a more limited meaning. Damages for a loss of a chance or an opportunity to obtain a commercial benefit can be awarded in the context of breach of contract claims, in tort and for misleading and deceptive conduct.[277] In such cases, the question of causation is required to be established by the plaintiff on the civil standard of the balance of probabilities. For a breach of contract, the opportunity will usually be established by proving the contract itself. In the context of a tort or misleading and deceptive conduct, the plaintiff must prove on the balance of probabilities that they have suffered some loss. The question of the value of that lost opportunity is then ascertained by reference to the court's assessment of the prospects of success of that opportunity had it been pursued. That is, by reference to the degree of probabilities or possibilities.
5. The position was explained by the plurality of Mason CJ, Dawson, Toohey and Gaudron JJ in Sellars v Adelaide Petroleum NL as follows:[278]

... the general standard of proof in civil actions will ordinarily govern the issue of causation and the issue whether the applicant has sustained loss or damage. Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had value (not being a negligible value) the value being ascertained by reference to the degree of probabilities or possibilities.

1. In The Commonwealth v Amann Aviation, and TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd, the compensable loss was the loss of the opportunity of obtaining a renewal or extension of a contract.
2. The appellant relies on the reasons of Brennan J in Sellars v Adelaide Petroleum NL who held that:[279]

There is no rational basis for distinguishing between a loss for which more than nominal damages may be awarded in contract and a loss for the purposes of s 82(1) of the Act and the law of torts.

1. The appellants submit that there is no rational basis for adopting a different approach in the context s 241(6) of the LAA. As a matter of statutory construction, we agree that there is no reason in the text of s 241(6)(b) of the LAA, when considered in its statutory context, that would exclude loss or damage for the loss of a commercial opportunity from being loss or damage which is 'sustained' - that is 'suffered'. There is also nothing inherent in the nature of a claim for compensation following the compulsory acquisition of the land which would suggest that a loss which is sustained in the context of a breach of contract, in tort or as a result of misleading and deceptive conduct, would not also be a loss which is 'sustained' in the context of s 241(6)(b) of the LAA.
2. Accordingly, the trial judge erred in holding that the loss of an opportunity to win additional storage contracts was not loss or damage 'sustained' for the purposes of s 241(6)(b) of the LAA. However, it is necessary to go on to consider whether this error was material to his Honour's final conclusion to dismiss this aspect of Century West's claim.

Has Century West in fact suffered any loss or damage?

1. It is first convenient to consider the second of the respondent's submissions in relation to this ground of appeal, being whether Century West has in fact suffered any loss at all as a result of missing the opportunity of the storage contract with Austral, or the alternative contracts.
2. Century West's claim is quantified by Ms Jacqui Le‑Fevre in her expert report. Ms Jacqui Le‑Fevre undertook the exercise of comparing the terms of the lease between Century West and DBW Reynolds, and then the terms of the lease between Century West and the new third-party landlord. Ms Jacqui Le‑Fevre then calculated the total amounts that Century West would be likely to pay under each lease for the four-year period between when Century West vacated the Land, and 29 February 2020. The amounts are as follows:[280]

(a) rent and outgoings under the terms of the former lease with DBW Reynolds: $3,016,691; and

(b) rent and outgoings under the terms of the new lease with the third‑party landlord: $2,091,167.

1. As these figures reveal, Century West paid a total of $925,000 less over the four‑year period under the new lease. Mr Langridge, in the joint report of the accountants agreed with these figures, save that Mr Langridge deducted some additional costs.[281]
2. However, in par [444] of the Primary Decision the trial judge refers to the figure $990,000. It is submitted by the respondent, with no objection from the appellants, that this is a typographical error, and it should in fact be $890,000. The respondent submits that the figure should be the sum calculated by Ms Jacqui Le‑Fevre as representing the difference in rent and outgoings between the terms of the two leases over the relevant period - being $925,000. From this figure, the trial judge has offset two costs incurred by Century West in leasing the new premises, being $5,695 (being for lease fees) and $23,350 (being for the provision of a rental bond). This results in a figure of $895,955, which presumably has been rounded to $890,000.[282] We have proceeded on this basis for the purposes of the appeal.
3. The amount claimed by Century West for the loss of income from the chance of the Austral contract over the same four-year period is $803,100.[283] The amount claimed by Century West for the loss of income from the chance of the other alternative contracts over the same four-year period is $587,210.[284] Whilst described in the pleadings as being lost income, Ms Jacqui Le‑Fevre's calculation is actually the estimated lost gross profit of the contracts. Ms Jacqui Le‑Fevre did not take the amount of rent into account when calculating this figure on the basis that Ms Jacqui Le‑Fevre considered it was not appropriate to do so as rent is not a direct cost but rather an overhead that would need to be incurred in any event. Ms Jacqui Le‑Fevre's evidence was that it would conflate two different issues to take the rent into account.[285]
4. The period of four years was adopted by Ms Jacqui Le‑Fevre because originally the move by Century West to the new rented premises was intended to be temporary, until DBW Reynolds could find a suitable premises to purchase. At that point, any losses would end. At the time of the expert reports, the length of the lease at the temporary premises had been extended to four years.[286]
5. Assuming that the loss of a commercial business opportunity does fall within the scope of s 241(6)(b) of the LAA, the respondent submits that when determining the quantum of any such loss it is necessary to have regard not only to the income that has been lost as a result of the disruption and reinstatement of the business, but also any savings or other benefits that have resulted because of that disruption and reinstatement. In the present case, that means accounting for the reduced rent that Century West paid. The respondent submits that when this is done in the present case, it reveals that Century West cannot demonstrate that it has sustained any loss, even if the 50% discount for uncertainty is not applied.
6. In response, the appellants submit that as a matter of statutory construction, s 241(6)(b) does not require any benefits conferred as a result of the disruption and reinstatement of the business to be set off against any losses that are sustained.
7. The appellants submit that there is no reference in the text of s 241(6)(b) to the requirement to 'set off' any such sums. In contrast, in s 241(7) of the LAA, there is a reference to the requirement to set‑off certain sums. The appellants submit that as a matter of statutory construction, this is an indicator that no such set off is required under s 241(6)(b) of the LAA.
8. Section 241(7) is concerned with compensation for severance and injurious affection. It only applies in a specific circumstance, namely where the fee simple in land is taken from a person, and that person is also the holder in fee simple of adjoining land.

If the fee simple in land is taken from a person who is also the holder in fee simple of adjoining land, regard is to be had to the amount of any damage suffered by the claimant -

(a) due to the severing of the land taken from that adjoining land; or

(b) due to a reduction of the value of that adjoining land,

however, if the value of any land held in fee simple by the person is increased by the carrying out of, or the proposal to carry out, the public work for which the land was taken, the increase is to be set off against the amount of compensation that would otherwise be payable under paragraph (b).

(emphasis added)

1. As a matter of construction, we consider that s 241(6)(b) of the LAA does require consideration to be given to any benefits or savings that have resulted as part of the disruption and reinstatement of a business. We have reached this conclusion for the following reasons.
2. First, s 241(6)(b) of the LAA requires regard to be had to 'the loss or damage, if any, sustained by the claimant by reason of ... disruption and reinstatement of a business'. The expression 'by reason of' requires that there be a casual nexus between 'the loss or damage, if any, sustained by the claimant', on the one hand, and the 'disruption and reinstatement of a business', on the other. The disruption and reinstatement of a business may produce individual or discrete items of loss or damage and may also produce individual or discrete items which involve benefits or savings. The text of s 241(6)(b) is not concerned with individual or discrete items of loss or damage. Rather, it is concerned with the totality of any loss or damage. The determination of the totality of any loss or damage sustained by the claimant by reason of disruption and reinstatement of a business requires that all individual or discrete items of loss or damage and all individual or discrete items which involve benefits, or savings, by reason of disruption and reinstatement of the business be brought to account.
3. Secondly, in any event, it is implicit in the text of s 241(6)(b) of the LAA that consideration must be given to any benefits or earnings. The text of s 241(6)(b) requires the following steps, or considerations:

(a) identifying any loss or damage claimed to have been sustained by the claimant;

(b) demonstrating the causal connection between that loss or damage and the 'disruption and reinstatement' of the business; and

(c) valuing that loss or damage.

1. The ordinary meaning of the term 'sustained' is to suffer, which the appellants accept is the appropriate meaning to apply to the term. In order to establish that loss or damage has been suffered as a result of the disruption and reinstatement of the business, it is necessary to consider the entire position of the person claiming the loss or damage. This includes not only any loss or damage suffered arising from the disruption and reinstatement of the business, but also any benefits or savings conferred by the disruption and reinstatement of the business. To disregard any benefits or savings conferred, results in an incomplete picture of the extent of the loss or damage that has been suffered. A determination of whether there has in fact been any loss or damage, and if so the quantum, can only be arrived at after considering all relevant factors.
2. The issue is not one of whether a set off is required because the initial calculation already includes and requires the consideration of any benefits or savings conferred. When the task imposed by s 241(6)(b) is properly understood, the lack of any express requirement in the text to set off any sums is therefore not material, as it is simply not required.
3. Thirdly, the position adopted in the other subsections of s 241 of the LAA is consistent with the above construction. In both s 241(2) and s 241(7) the value of land is required to be ascertained. In s 241(2) it is the value of the land which is taken and in s 241(7) it is the value of adjoining land. In both subsections there is (relevantly) a requirement to disregard any increase in value caused by the public work.
4. The requirement to disregard any increase in value caused by the public work is consistent with an approach under s 241(6)(b) of requiring regard to be had to any benefits or savings which have resulted from the 'disruption and reinstatement' of the business as part of ascertaining whether (or to what extent) there has been any loss or damage. However, unlike the assessment of loss or damage sustained by the 'disruption and reinstatement' of a business, the task of assessing the value of a property does not implicitly include consideration of any increases (or decreases) in value caused by any specific item or activity. In this regard, the concept of value is different from the concept of loss or damage. Accordingly, unlike the task of assessing loss or damage in s 241(6)(b), express language is required in each of s 241(2) and s 241(7) if the legislature intends the valuation task to expressly have regard to or to disregard, any factor, including any increase in value caused by the public work.
5. Fourthly, the above construction of the component parts of s 241 of the LAA is consistent with the broader context and purpose of pt 9 and pt 10 of the LAA, which is to ensure that a person whose interest in land is taken, is awarded compensation for the loss of that interest in land. The scheme developed by the legislation provides for an award of compensation to ensure that the person is compensated for any loss caused by the taking and the associated public work. As part of that regime, any positive impact caused by the taking and public work must either be disregarded or also be taken into account.
6. Accordingly, we agree with the respondent's submission that on the facts of this case, when assessing the quantum of the loss of opportunity of the Austral contract, or the loss of the alternative contracts, it was necessary to have regard not only to the total claimed loss of $803,100 (for the Austral contract) or $587,210 (for the loss of the alternative contracts), but also the saving in rent over the same period of $925,000.
7. The loss as claimed by Century West is the estimated lost gross profit of the particular contracts. In calculating that estimated lost gross profit, Ms Jacqui Le‑Fevre has characterised the rent paid by Century West as being an overhead, and not an expense, and has not included this in her calculation. The proper approach is not one of accounting practice. Rather, the proper approach is to apply the statutory text and requirements to the facts.
8. The saving in rent occurred because of the disruption and reinstatement of the business at the new premises which could not accommodate the same amount of storage. Accordingly, to the extent that the loss claimed arises from the disruption and reinstatement of the business at the new premises which did not have sufficient room for the storage activities of Century West, it is also necessary to have regard to the savings in rent consequent upon the new premises not having those storage facilities. The result is that Century West has not suffered any loss or damage as a result of the disruption and relocation of the business. This is the case even without the 50% discount for uncertainty being applied.
9. This factual failing in relation to Century West's case alone is sufficient to dispose of ground 4, which should be dismissed.

1. The submissions of the parties raise two other issues in relation to this ground of appeal: being whether the trial judge erred in law in applying a discount of 50% to the estimated lost gross profit figure of Ms Jacqui Le‑Fevre for uncertainty; and whether the loss of a commercial opportunity is 'loss or damage' falling within the scope of s 241(6)(b) of the LAA. This second issue includes whether the loss arises because of the 'disruption and reinstatement of a business' and whether such a loss is something properly assessed in the context of s 241(6)(b) of the LAA or whether it is instead a component of the value of the interest in land which has been taken and is therefore assessed in the context of s 241(2) of the LAA.
2. In light of the facts underlying this aspect of Century West's claim, and given our conclusion that on these facts, Century West has not suffered any loss or damage as a result of the loss of the opportunity to enter into storage contracts, it is not necessary or appropriate to consider these issues.

1. Notwithstanding our conclusion that the trial judge erred in holding that the loss of an opportunity to win additional storage contracts was not loss or damage 'sustained' for the purposes of the s 241(6)(b) of the LAA, as Century West has not in fact suffered any loss, this ground should be dismissed.

1. For the above reasons, we are of the view that the appeal should be dismissed.
2. We will hear further from the parties in relation to the appropriate orders and as to costs.

Diagram showing the individual lots comprising the Land

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] DBW Reynolds Pty Ltd as trustee for the DBW Reynolds Family Trust v Public Transport Authority [2023] WASC 165 [453] ‑ [454] (Primary Decision).

[2] Further Amended Statement of Claim [3] BAB 128 and Re-Amended Reply [1A] BAB 147.

[3] Public Works Act 1902 (WA) s 96(1).

[8] Further Amended Statement of Claim BAB 128 ‑ 129, 138 - 139.

[10] Witness Statement of Jonathan Fyson dated 21 September 2022 [396] GAB 505; Report of Independent Valuers of Western Australia with Dale Hall's signature dated 22 August 2019 [103] - [104] GAB 555; Revised Valuers' Conferral Statement, item 18, GAB 224 (Revised Joint Conferral Statement).

[11] Witness Statement of Jonathan Fyson dated 21 September 2022 [18] GAB 522.

[12] Expert Report of Jonathan Fyson filed 26 August 2019 [393] - [409] GAB 503 - 506.

[13] Expert Report of Jonathan Fyson filed 26 August 2019 [401] GAB 505.

[14] Witness Statement of Dale Hall filed 21 September 2022 [5] GAB 609.

[15] Report of Independent Valuers of Western Australia with Dale Hall's signature dated 22 August 2019 [102] ‑ [115] GAB 554 - 556.

[16] Report of Independent Valuers signed by Dale Hall dated 22 August 2019 filed on 26 August 2019 [104] GAB 555.

[17] Witness Statement of Matthew John Garmony with the attached Garmony Property Consultants report filed 23 August 2019 [124] GAB 184.

[18] Witness Statement of Matthew John Garmony with the attached Garmony Property Consultants report filed 23 August 2019 [125] GAB 184.

[19] Witness Statement of Jenny Jane Le-Fevre dated 23 August 2019 [480] GAB 330 - valuing the Land where the highest and best use was the existing whole-of-site depot.

[20] Witness Statement of Jenny Jane Le-Fevre dated 23 August 2019 [500] GAB 332 - valuing the Land with lot 757 as a stand-alone depot plus five individually titled lots.

[21] Witness Statement of Jenny Jane Le-Fevre dated 23 August 2019 [506] GAB 333.

[22] Witness Statement of Jenny Jane Le-Fevre dated 23 August 2019 [513] GAB 334.

[23] Primary Decision [226], [353].

[24] Second Witness Statement of Jenny Le-Fevre dated 4 October 2022 [2] GAB 416.

[25] Second Witness Statement of Jenny Le-Fevre dated 4 October 2022 [2] GAB 416.

[26] Witness Statement of Jenny Jane Le-Fevre dated 23 August 2019 [515] - [517], [548(c)] GAB 335, 339.

[28] Lenz Nominees Pty Ltd v The Commissioner of Main Roads [2012] WASC 6; (2012) 186 LGERA 58 (Lenz Nominees).

[29] McKay v Commissioner of Main Roads [No 7] [2011] WASC 223.

[30] Italiano v The Water Corporation [No 2] [2020] WASC 112.

[31] Primary Decision [74] - [92], [99] - [154].

[36] Primary Decision [99] - [104], [108] - [112] and the authorities cited therein.

[37] Primary Decision [99] - [104].

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

[39] Primary Decision [113] - [114].

[40] Primary Decision [116] - [148] and the authorities cited therein.

[42] Primary Decision [338] - [340], [344] - [351].

[44] Boland v Yates [1999] HCA 64; (1999) 74 ALJR 209 (Boland v Yates).

[45] Arkaba Holdings Ltd v Commissioner of Highways (1970) 19 LGRA 398; [1970] SASR 94, 100 (Arkaba Holdings).

[46] Northern Territory v Mr A Griffiths (decd) and Lorraine Jones obh of Ngaliwurru and Nungali Peoples [2019] HCA 7; (2019) 269 CLR 1 (Northern Territory v Griffiths).

[50] Appeal ts 17 - referencing Primary Decision [415].

[51] Spencer v The Commonwealth (432) (Griffith CJ), (441) (Isaacs J).

[52] Spencer v The Commonwealth (441) (Isaacs J), (432) (Griffith CJ) - 'conversant with the subject'; Boland v Yates [266] - [269] (Callinan J); Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 233 CLR 259 [51].

[53] Spencer v The Commonwealth (441) (Isaacs J); Boland v Yates [271] (Callinan J); ISPT Pty Ltd v Melbourne City Council [2008] VSCA 180; (2008) 20 VR 447 [40] and the authorities cited therein.

[54] Collins v Livingstone Shire Council [1972] HCA 35; (1972) 127 CLR 477, 483 - 484 (Barwick CJ), 489 (Menzies J), 493 (Walsh J), 500 - 501 (Gibbs J); Blue Mountains City Council v Mulcahy (1998) 45 NSWLR 577, 584 ‑ 585 (Beazley JA (as her Honour then was) with whom Sheller and Powell JJA agreed).

[55] Collins v Livingstone Shire Council (500 ‑ 501).

[56] Pastoral Finance Association Limited v The Minister [1914] AC 1083 (Pastoral Finance).

[60] Boland v Yates [15] (Gleeson CJ).

[61] Boland v Yates [16], [80] (Gleeson CJ).

[62] Boland v Yates [16] (Gleeson CJ).

[63] Boland v Yates [83] (Gleeson CJ).

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

[65] Boland v Yates [89] - [92] (Gleeson CJ).

[67] Boland v Yates [313] - [329] (Callinan J).

[68] Boland v Yates [298] (Callinan J).

[69] Boland v Yates [265] (Callinan J).

[70] Boland v Yates [266] (Callinan J).

[71] Boland v Yates [271] (Callinan J).

[72] Boland v Yates [292] (Callinan J).

[73] Boland v Yates [292] (Callinan J).

[74] Australian Law Reform Commission, Lands Acquisition and Compensation, Report No 14 (1980) [241].

[75] Boland v Yates [296] (Callinan J).

[76] Kennedy Street Pty Ltd v Minister [1963] NSWR 1252; (1962) 8 LGRA 221 (Kennedy Street).

[77] Baringa Enterprises v Manly Municipal Council (1965) 15 LGRA 201 (Baringa Enterprises).

[78] Boland v Yates [336], (Callinan J). See also [339], [348] (Callinan J).

[79] Boland v Yates [343] (Callinan J). See also [344].

[80] Boland v Yates [99] - [100] (Gaudron J).

[81] Boland v Yates [110] - [111] (Gummow J).

[82] Northern Territory v Griffith [84] (Kiefel CJ, Bell, Keane, Nettle & Gordon JJ), [304] (Edelman J).

[83] Northern Territory v Griffith [304] (Edelman J).

[84] Northern Territory v Griffith [306] (Edelman J).

[85] Northern Territory v Griffith [307] (Edelman J).

[86] Northern Territory v Griffith [308] (Edelman J).

[87] Leichhardt Council v Roads & Traffic Authority of NSW [2006] NSWCA 353; (2006) 149 LGERA 439 [25].

[88] Minister for Public Works v Thistlethwayte [1954] AC 475, 491.

[89] Boland v Yates [83] (Gleeson CJ).

[90] St John Ambulance Association of Western Australia Incorporated v East Perth Redevelopment Authority [2001] WASC 85; (2001) 114 LGERA 112 (St John Ambulance Association).

[91] Arcus Shopfitters Pty Ltd v Western Australian Planning Commission [2002] WASC 174; (2002) 125 LGERA 180 (Arcus Shopfitters).

[92] St John Ambulance Association [92].

[93] Radford A E, 'Land: Market Value and Special Value in the High Court' (2000) 74 Australian Law Journal and Reports 773.

[94] St John Ambulance Association [97] - [98].

[95] Arcus Shopfitters [73] and the authorities cited therein. See also [69] - [70].

[97] Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149; (2004) 29 WAR 273.

[98] Mount Lawley Pty Ltd v Western Australian Planning Commission [286].

[99] Mount Lawley Pty Ltd v Western Australian Planning Commission [287].

[100] Mount Lawley Pty Ltd v Western Australian Planning Commission [288] - [289] and the authorities cited therein.

[101] McKay v Commissioner of Main Roads [No 7] [151].

[102] Kelliher v Commissioner of Main Roads [2015] WASC 478 [86].

[103] The Commonwealth v Reeve [1949] HCA 22; (1949) 78 CLR 410.

[104] The Commonwealth v Reeve (421) (Lathan CJ).

[105] The Commonwealth v Reeve (417 ‑ 418) (Lathan CJ).

[106] The Commonwealth v Reeve (427 ‑ 428) (Dixon J).

[107] The Commonwealth v Reeve (424) (Dixon J).

[108] The Commonwealth v Reeve (428 ‑ 429) (Dixon J).

[109] Dangerfield v Town of St Peters [1972] HCA 15; (1972) 129 CLR 586 (Dangerfield).

[113] Emerald Quarry Industries Pty Ltd v Commissioner of Highways (South Australia) [1979] HCA 9; (1979) 142 CLR 351 (Emerald Quarry Industries).

[114] Emerald Quarry Industries (365).

[115] Land Acquisition Act 1969 (SA) s 25.

[116] Mount Lawley Pty Ltd v Western Australian Planning Commission [287].

[117] Northern Territory v Griffith [304] (Edelman J).

[118] Boland v Yates [292] (Callinan J).

[119] See in particular Boland v Yates [15] - [16], [80] - [84].

[120] Primary Decision [192] - [195], [415].

[124] Primary Decision [153], [156] - [165], [195].

[125] Primary Decision [70] (quoted paragraphs (5) - (9)); [71] (quoted paragraphs (g) - (h), (s) - (aa)); [99] ‑ [104].

[126] Primary Decision [105], [108], [111], [115], [118] - [119], [148].

[127] Primary Decision [128], [150], [415].

[128] Primary Decision [74] - [76], [85] - [88], [91].

[130] Primary Decision [192], [414] - [415].

[131] Primary Decision [212], [214], [219] - [220].

[139] Quantity Surveyors' joint report dated 23 May 2019 GAB 124 and 128; ts 128 and 153.

[140] Quantity Surveyors' joint report dated 23 May 2019 GAB 124 and 127; ts 159 - 160, 169.

[141] Second witness statement of Matthew John Garmony dated 5 October 2022 GAB 210.

[142] Witness statement of Matthew John Garmony dated 23 August 2019 GAB 180.

[143] Second witness statement of Matthew John Garmony dated 5 October 2022 GAB 210.

[144] Primary Decision [325]; Witness statement of Matthew John Garmony dated 23 August 2019 GAB 184.

[145] Witness statement of Matthew John Garmony dated 23 August 2019 GAB 182.

[146] Second witness statement of Matthew John Garmony dated 5 October 2022 GAB 209.

[147] Expert valuation report of Jonathan Fyson dated 21 August 2019 [311] GAB 479.

[148] Expert valuation report of Jonathan Fyson dated 21 August 2019 [301] GAB 478.

[149] Witness statement of Jonathan Fyson dated 21 September 2022, JF6, GAB 528.

[150] Witness statement of Jonathan Fyson dated 21 September 2022, JF6, GAB 528.

[151] Expert valuation report of Jonathan Fyson dated 21 August 2019 GAB 443 - 450.

[152] Expert valuation report of Jonathan Fyson dated 21 August 2019 GAB 479.

[154] Expert valuation report of Jonathan Fyson dated 21 August 2019 GAB 480.

[155] Revised valuers' conferral statement signed by all four experts dated 18 February 2022 GAB 226. See also Primary Decision [390].

[156] Expert valuation report of Jonathan Fyson dated 21 August 2019 GAB 501.

[157] Witness statement of Jonathan Fyson dated 21 September 2022 [18] GAB 522; Revised valuers' conferral statement dated 18 February 2022 GAB 225; ts 276 - 277.

[159] Witness statement of Dale Hall dated 21 September 2022 GAB 609.

[160] Witness statement of Dale Hall dated 21 September 2022 GAB 610; ts 402 - 403, 497.

[161] Report of Independent Valuers of Western Australia with Dale Hall's signature dated 26 August 2019 GAB 574, 609.

[162] Report of Independent Valuers of Western Australia with Dale Hall's signature dated 26 August 2019 GAB 574.

[163] Report of Independent Valuers of Western Australia with Dale Hall's signature dated 26 August 2019 GAB 573.

[164] Report of Independent Valuers of Western Australia with Dale Hall's signature dated 26 August 2019 GAB 554; ts 283.

[165] Report of Independent Valuers of Western Australia with Dale Hall's signature dated 26 August 2019 GAB 576; ts 283, 284.

[166] Revised valuers' conferral statement dated 18 February 2022 GAB 225, 226, 228.

[167] Revised valuers' conferral statement dated 18 February 2022 GAB 223.

[168] Primary Decision [209] - [221].

[169] Primary Decision [223] - [228], [235] - [239].

[173] Primary Decision [290], [301].

[174] Primary Decision [291], [302].

[175] Primary Decision [292], [302].

[178] Primary Decision [327] - [330].

[186] Putting to one side the valuation of Ms Jenny Le-Fevre: see Primary Decision [406].

[187] Appellants' written submissions [41], [47].

[189] Primary Decision [304] - [305].

[190] Primary Decision [290] - [292], [302].

[193] Primary Decision [375] - [376].

[195] Emerald Quarry Industries (355), (374).

[196] McKay v Commissioner of Main Roads [2013] WASCA 135 [141].

[197] Makita (Australia) Pty Lt v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 [64] - [86] (Makita).

[198] Mr Fyson's reasons are summarised above in these reasons in the section headed 'Valuation Evidence'. See also Expert valuation report of Jonathan Fyson dated 21 August 2019 GAB 443 - 450 and 478 - 480; Revised valuers' conferral statement dated 18 February 2022 GAB 221 - 222; ts 272.

[199] Supplementary Witness Statement of Leida Reynolds dated 22 September 2022 [9] - [11] GAB 61.

[201] Witness statement of Jonathan Fyson dated 21 September 2022, JF1, GAB 523.

[202] Expert valuation report of Jonathan Fyson dated 21 August 2019 [243] - [244] GAB 452.

[203] Expert valuation report of Jonathan Fyson dated 21 August 2019 GAB 480; ts 272 - 273.

[205] Witness statement of Jenny Jane Le-Fevre dated 10 August 2019 [535], [539] GAB 337 - 338.

[206] Witness statement of Dale Hall dated 19 September 2022 [6] GAB 609.

[207] ts 281 - 282; Primary Decision [376].

[208] ts 432 - 433 (Mr Garmony's inspection); ts 268-269 (Mr Fyson's inspection).

[210] Witness statement of Matthew John Garmony dated 26 August 2019 [103], [111], [121] - [123] GAB 180, 182, 184. Figures updated in the Supplementary witness statement of Matthew John Garmony with attached tables of calculations GAB 210.

[211] Witness statement of Jonathan Fyson dated 21 September 2022, JF6, GAB 528.

[214] Witness statement of Dale Hall dated 19 September 2022 GAB 610; ts 402 - 403, 497.

[215] Witness statement of Matthew John Garmony dated 23 August 2019 [113] - [119] GAB 182 - 183.

[217] See also Bennett v The Fitzroy Shire Council [2003] QCA 444; [2004] Qd R 494 [18] - [19].

[218] Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd [1947] HCA 10; (1947) 74 CLR 358.

[219] Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd (373 ‑ 374).

[221] Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 [48].

[222] Trandos v Western Australian Planning Commission [2001] WASCA 346; (2001) 117 LGERA 257 [116].

[223] Primary Decision [399] - [400], [410] - [413].

[224] Primary Decision [399] - [400], [410] - [413].

[225] Primary Decision [340] - [342].

[227] Further amended statement of claim [42] BAB 139.

[229] Further amended statement of claim [17] - [18] BAB 132.

[230] Amended defence [4.4] BAB 154.

[232] Primary Decision [416], [431].

[233] Primary Decision [49] - [50].

[236] Primary Decision [432], [437].

[240] Primary Decision [420] - [422].

[241] Primary Decision [426] - [428].

[242] Primary Decision [444] - although the trial judge used the figure $990,000 in this paragraph, it is submitted by both parties that this is a typographical error and should be $890,000. This is discussed later in these reasons.

[244] Appellants' written submissions [60] WAB 22.

[247] Smith, Stone & Knight v Birmingham Corporation [1939] 4 All ER 116 (Smith, Stone & Knight).

[248] Eastaway v The Commonwealth [ 1951] HCA 80; (1951) 84 CLR 328 (Eastaway).

[250] CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384, 408; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 [47]; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 [14].

[255] DHN Food Distributors Ltd and Ors v London Borough of Tower Hamlets [1976] 3 All ER 462 (DHN Food Distributors).

[257] Woolfson v Strathclyde Regional Council [1978] UKHL 5; (1978) 38 P & CR 521 (Woolfson).

[258] Mario Piraino Pty Ltd v Roads Corporations [No 2] [1993] VicRp 9; [1993] 1 VR 130 (Mario Piraino).

[259] Planning and Environment Act 1987 (Vic) s 98(2).

[263] Primary Decision [180] citing Lenz Nominees [423].

[264] Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 (as discussed in Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160 [908]).

[265] Primary Decision [434] - [436].

[269] The Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64.

[275] Moloney v Roads and Maritime Services [2018] NSWCA 252; (2018) 98 NSWLR 651.

[276] Roads and Maritime Services v United Petroleum Pty Ltd [2019] NSWCA 41; (2019) 99 NSWLR 279.

[277] Sellars v Adelaide Petroleum NL; The Commonwealth v Amann Aviation Pty Ltd; TC Industrial Plant Pty Ltd v Robert's Queensland Pty [1963] HCA 57; (1963) 180 CLR 130.

[278] Sellars v Adelaide Petroleum NL (355).

[279] Sellars v Adelaide Petroleum NL (364).

[280] Witness statement of Jacqueline Andre Le-Fevre dated 20 March 2020, appendix 7, GAB 682.

[281] Joint report of Martin Langridge and Jacqueline Andre Le-Fevre dated 18 March 2020 [6.25] - [6.31] GAB 1016.

[282] Primary Decision [444]; appeal ts 94 - 96; Witness statement of Jacqueline Andre Le-Fevre dated 20 March 2020, appendix 7, GAB 682. See also Mr Langridge's calculation at Joint report of Martin Langridge and Jacqueline Andre Le-Fevre dated 18 March 2020 [6.25] - [6.31(b)] GAB 1016.

[283] Witness statement of Jacqueline Andre Le-Fevre dated 20 March 2020 [136] GAB 635.

[284] Witness statement of Jacqueline Andre Le-Fevre dated 20 March 2020 [136] GAB 635.