2 Set aside the judgment of the Land and Environment Court delivered on 4 March 2005 to the extent that it assesses market value pursuant to s55(a) of the acquired land.
3 Remit the matter to the Land and Environment Court for redetermination of the market value of the land without reduction on account of the statutory constraint on alienation of the land in the hands of the Appellant.
4 Respondent to pay the Appellant's costs of the appeal.
85 BEAZLEY JA: I agree with Spigelman CJ.
86 BRYSON JA: I agree with the orders which Spigelman CJ proposes and the reasons which his Honour has given.
87 On the assumption that the words of s.55 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (hereinafter "Land Acquisition Act") mean what they say - see Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) (1981) 147 CLR 297 at 304 (Gibbs CJ) - there is no room for an assessment of compensation on resumption to be reduced on the principle in Corrie v MacDermott [1914] AC 1056. In this s.55 gives effect to the guarantee that the amount of compensation will not be less than the market value of land unaffected by the proposal, which is one of the objects stated in s.3 of the Land Acquisition Act. The application of the principle in Corrie v MacDermott could produce an assessment of compensation lower than the market value of the land because some restriction means that the owner of the resumed land did not, before it was resumed, have power to sell or dispose of it; such as the restriction in s.45(1) of the Local Government Act 1993 (NSW) for community land. The concept of "market value" the meaning of which is stated in s.56(1) of the Land Acquisition Act could not be addressed on the basis that the restriction in s.45(1) of the Local Government Act had any relevance; s.56(1) can only be applied if it is assumed that the land could be sold, so it must be assumed that the restriction on the power of sale in s.45(1) did not exist.
88 The words of the Land Acquisition Act make it unambiguously clear that the principle in Corrie v MacDermott has no application. There are powerful considerations which support giving the Land Acquisition Act that construction if it were thought that there is any room for doubt about this.
89 One consideration is that it would be very poor policy if a restriction on the power to sell land imposed for the purpose of keeping the land available to use in a particular way worked to the advantage of a resuming authority which compulsorily acquired the land so as to make it available for use in some other way, as usually happens when land is resumed. It would serve no good purpose and there would be no rhyme or reason in the restriction on the power of sale working for the benefit of the resuming authority at the point where the restriction is overridden and the object of keeping the land available for some particular use is defeated. The purpose of the restriction in s.45(1) on the power of sale of community land certainly did not include making it cheaper for resuming authorities to acquire community land than other land, and did not include offering them temptations to resume community land rather than other land. There could be no good policy in leaving a Local Government authority whose community land had been resumed with less money than the market value of that land with which to address the acquisition of other land for the same purpose.
90 Another consideration is that the principle in Corrie v MacDermott is far from being a clear principle; the principle would always be difficult to apply because it has not been clearly formulated, but whatever it is, it is not a means of establishing market value. This leads me to make some observations about Corrie v MacDermott.
91 Lord Dunedin in Corrie v MacDermott said for the Privy Council at p1062 "If this case be viewed as an ordinary case of compensation their Lordships think that the law is not doubtful." After referring to authority his Lordship went on: "The value which has to be assessed is the value to the old owner who parts with his property, not the value to the new owner who takes it over. If, therefore, the old owner holds the property subject to restrictions, it is a necessary point of inquiry how far these restrictions affect the value." Later (at p1065) Lord Dunedin spoke of "… the value to the owner as he holds." The concept of "value to the old owner" which his Lordship expounded is not found in the Land Acquisition Act, which adopts the quite different test of market value, with an underlying guarantee, and prescribes in s.55 the other matters which are to be regarded.
92 Corrie v McDermott was not a case in which the owners of the resumed land did not have power to sell; they had statutory power to sell, but only to two persons, the local authority and the National Agricultural and Industrial Association: see p1057. The land was not resumed under statutory power, but under a clause in a Crown grant, which provided for payment of "the value of the land … at a valuation to be fixed by arbitration": see p1057. No statutory regime governed the assessment of compensation. Decision turned on the meaning of the Crown grant, and the case could not be a good vehicle for establishing a general principle about compensation on resumption of land in exercise of statutory powers.
93 The course taken by the litigation in Corrie v MacDermott meant that the issue determined on appeal was whether the owners were entitled to 7,490 pounds "on the basis of freehold land unrestricted in any way, and as land in fee simple": see p1057. The alternative determined by the umpire in the arbitration, that the value of the land "being required for a public purpose (namely an exhibition ground)" was 3,835 pounds, was not open to consideration on appeal. This result flowed from the terms in which the umpire stated the case for the opinion of the Court. The issue was whether the owners were entitled to the greater sum, and the Crown did not dispute that if they were not so entitled, they were entitled to the lesser sum, without any judicial examination of the basis on which it was determined; see pp1057-1058. Accordingly the three courts which considered the matter did not pass judgment on whether the owners were entitled to the reduced amount, or on the basis on which the reduced amount was determined. Lord Dunedin observed that the finding which established the sum of 3,835 pounds was "… based upon an obviously irrelevant consideration": see p1066; but nonetheless accepted the limitations on what was to be done on appeal which arose from the form of the stated case and the positions taken by the parties.
94 In these circumstances what Lord Dunedin said about the effect of a restriction which prevented sale was not essential for the Lordships' disposition. His Lordship said (pp1064-1065):
And now it may be remarked that a restriction which prevents selling, though it must be taken into account, and may very well affect the value, does in no way reduce the value to nil. To a judge on the facts in Stebbing's Case L.R. 6 Q. B. 37 it might indeed well appear that the value was nil. For the land could not be sold, for it was dedicated to spiritual purposes; and further its use so far as profitable, as, e.g., in the matter of fees, was also exhausted, for the ground was full and no further interments were possible because of the Order in Council. But other circumstances would lead to a perfectly different result, and as an illustration their Lordships would refer to a case which, though not at law, was decided by a judge of authority, the late Lord Shand. A strip of land in the West Princes Street Gardens below the Castle Rock in Edinburgh was taken by the North British Railway under an Act of Parliament under terms of paying compensation to the corporation of Edinburgh, who were the owners of the ground. By Act of Parliament the corporation was prohibited from ever building on the land, or alienating it; but was bound to keep it for all time as a public garden.
Under the circumstances the railway company contended before Lord Shand, who was chosen as sole arbitrator, that the land was worth nothing, and that a mere nominal sum should be paid. The corporation on the other hand maintained that the true compensation was what would provide another strip of exactly the same quality; and as this could only be got by taking Princes Street itself, that the money value must be estimated at what it would cost to buy a strip of Princes Street--the most valuable site in Edinburgh. Lord Shand held both these views to be wrong. He held that, the corporation being restricted, the value could not be measured by the value of unrestricted land in a similar position; but that on the other hand the land was of value to the corporation who enjoyed it with the rest of the adjoining land, for the use of the citizens as a garden, which garden would be so much the less valuable because it was smaller; and he assessed on that view. Their Lordships consider that this judgment proceeded on correct principles.
95 It is consistent with these observations that the restriction may very well not affect value; and it is also consistent with these observations that the value of the land to the Edinburgh Corporation, who enjoyed it with the rest of the adjoining land for the use of the citizens as a garden, might conceivably be as much as or more than the value which the land would have had if there had been no restriction on its sale. Lord Dunedin's view was that the value to be assessed was "… the value to the owner as he holds …" (p1065) (and this is not the test in s.55). In accordance with this exposition it could be that the value of land set aside and used for some public purpose such as a public park, considered as the value to the owner as it held the land, was at least as much as, or much the same as the value which the land would have if it were available for sale and could be sold off; the process of setting the land aside for a public purpose and restricting its saleability can fairly be interpreted as an indication that, in the view of the public and the public authority, setting the land aside and having it available for the public purpose is worth at least as much as or more than the proceeds of selling it off.
96 The Privy Council's approval of the judgment of Lord Shand in the Princes Street Gardens Arbitration can add little to an understanding of what the relevant principle is. Lord Shand's decision is printed as an appendix to Cripps on Compensation 8th ed. 1938 at pp916-934. His Lordship made a very detailed review of the facts before him, and acknowledged the difficulties of finding clear means of putting a value in money on the land which the railway company had resumed. It is not possible to understand how Lord Shand's reasoning produced the amount of money awarded by reference to any calculations; it does appear that his Lordship in some way made an allowance for the restriction on sale, and also an allowance for advantages to the public represented by the Edinburgh Corporation having a public garden; but he gave no detailed exposition of how this process was carried out.
97 In my opinion the New South Wales legislature has not sacrificed any important principle by making provisions in s.55 of the Land Acquisition Act which do not leave room for Corrie v MacDermott to apply.
98 BASTEN JA: I agree with the orders proposed by the Chief Justice and with his Honour's reasons.
99 CAMPBELL J: I agree with the Chief Justice.
100 The fundamental task of the court in the present appeal is to construe the text of sections 54, 55 and 56 of the Land Acquisition Act in the light of its history, statutory context and purpose, as the Chief Justice has done. However, a supplementary aid to construction -admittedly a weak one, that is able to be used only as a check that a construction arrived at by other means is correct - is that one assumes that Parliament is not doing something irrational in enacting the legislation in question (eg Ganter v Whalland (2001) 54 NSWLR 122 at 131 [35]-[36] and cases there cited). That assumption operates in conjunction with the "general presumption that there is no contradiction between two Acts of the one legislature": para [45] of the Chief Justice's judgment, and cases there cited.
101 Section 94 Environmental Planning and Assessment Act 1979 provides:
"(1) If a consent authority is satisfied that development for which development consent is sought will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant the development consent subject to a condition requiring:
(a) the dedication of land free of cost, or
(b) the payment of a monetary contribution,
or both.
(2) A condition referred to in subsection (1) may be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services concerned.
(3) If:
(a) a consent authority has, at any time, whether before or after the date of commencement of this Part, provided public amenities or public services within the area in preparation for or to facilitate the carrying out of development in the area, and
(b) development for which development consent is sought will, if carried out, benefit from the provision of those public amenities or public services,
the consent authority may grant the development consent subject to a condition requiring the payment of a monetary contribution towards recoupment of the cost of providing the public amenities or public services (being the cost as indexed in accordance with the regulations).
(4) A condition referred to in subsection (3) may be imposed only to require a reasonable contribution towards recoupment of the cost concerned.
(5) The consent authority may accept:
(a) the dedication of land in part or full satisfaction of a condition imposed in accordance with subsection (3), or
(b) the provision of a material public benefit (other than the dedication of land or the payment of a monetary contribution) in part or full satisfaction of a condition imposed in accordance with subsection (1) or (3).
(6) If a consent authority proposes to impose a condition in accordance with subsection (1) or (3) in respect of development, the consent authority must take into consideration any land, money or other material public benefit that the applicant has elsewhere dedicated or provided free of cost within the area (or any adjoining area) or previously paid to the consent authority, other than:
(a) a benefit provided as a condition of the grant of development consent under this Act, or
(b) a benefit excluded from consideration under section 93F (6).
(7) If:
(a) a condition imposed under subsection (1) or (3) in relation to development has been complied with, and
(b) a public authority would, but for this subsection, be entitled under any other Act to require, in relation to or in connection with that development, a dedication of land or payment of money in respect of the provision of public amenities or public services or both,
then, despite that other Act, compliance with the condition referred to in paragraph (a) is taken to have satisfied the requirement referred to in paragraph (b) to the extent of the value (determined, if the regulations so provide, in accordance with the regulations) of the land dedicated or the amount of money paid in compliance with the condition."
102 One fairly obvious effect of section 94 is that local councils can allow a development on a particular site which, if the site is considered on its own, is an overdevelopment of the site, on the basis that the developer will make a section 94 contribution to the Council of land that will itself be used as open space, of money to enable the Council to purchase elsewhere land that will be used as open space, or of money to defray the cost of land that the Council has already purchased for use as open space. There is a fairly obvious capacity for this to happen in relation to several, perhaps numerous, different development sites within the one municipality. I doubt that Parliament would have intended sections 54, 55 and 56 of the Land Acquisition Act to work in a way that undermines the basis on which such section 94 contributions have been extracted, by not providing the local council, when open space is resumed, with enough money to buy other land, similarly zoned, for use as open space. This consideration provides some additional comfort that the construction arrived at by the Chief Justice is correct.
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