The need for this activity has resulted from the acquisition of a previously approved quarry site by the Roads & Traffic Authority and the lack of approved extraction sites in the locality creating demand for the material. Due to the dispersed settlement patterns on the North Coast of New South Wales, suitable sites for extractive industries are difficult to locate and it is considered imperative that an application for approval and the resultant protection of this resource be made now prior to additional developments which may sterilise this site as an extraction site.
262. The Respondent's written submission continues:
Accordingly, the fact that it is now known that any actual 110,000 loose cubic metres quarry on the resumed land could have been relocated on the retained land means that the quarry potential value both "before and after" is undiminished.
263. I do not think that this submission can be accepted principally because it offends the principle that generally speaking facts subsequent to the date of compulsory acquisition are not relevant to the question of value required to be ascertained as at the date of compulsory acquisition: see Gosford Shire Council v. Green (1980) 48LGRA 201 and Housing Commission of New South Wales v. Falconer (1981) 1NSWLR 547.
264. In Falconer Hope JA expressed the general principle in the following passage at 557/558:
There thus has to be considered not what a prudent purchaser in the position of the owner would pay after he had obtained a knowledge of all the circumstances that in fact occurred after the date of resumption, but what a person in his position would pay in the light of knowledge available at the time of the resumption. However, having affirmed this position, the decided cases dissolve into uncertainty. This Court, in Gosford Shire Council v Green (Court of Appeal, 11th July, 1980 unreported), took the view, in relation to a question, to which s 124 applied, that regard could not be had to events that took place after resumption. There a question arose, inter alia, as to the effect on the value of land retained by the plaintiff of the construction on the resumed land of a parking station which was in fact built differed in some respects from that which a purchaser at the time of the resumption would have expected to be built. This question was asked in the stated case:
"Was I justified in law in assuming, for the purpose of considering the question of enhancement, that the knowledge of the hypothetical parties to an assumed sale of the plaintiff's remaining land was limited to the knowledge of a prudent purchaser at the date of resumption?"
The Court held that the answer to this question was "Yes". Reynold JA said that there was no question of preferring actuality to prophecy. There was, however, no evidence in the case to suggest that a change of plans might have been contemplated by a hypothetical purchaser at the time of resumption.
However there are many decisions, including decisions of the High Court, in which it has been held that evidence of future events is admissible not to prove a hindsight, but to confirm a foresight: see, for example, Trustees Executors and Agency Co Ltd v Commissioner of Taxes (Victoria) (1941) 65 CLR 33; Minister for Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459, at pp 514, 515; McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1, at p 16; Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77, at p 108. An application of the principle namely, that "The amount of compensation, being a matter of assessment, can, like damages, be calculated in the light of any subsequent facts to the extent to which they show light upon items of value which can properly be taken into account in the calculation, having regard to the circumstances existing at the date of acquisition": Minister for Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459, at p 514 is to be found in the decision of the Full Court of Queensland in Brisbane City Council v Thorpe (1965) 13 LGRA 31. In that case the council resumed land on which stood a part of a shop building, the other part standing on land retained by the owners. Two years after the date of resumption the council offered to move the existing shops back to the resulting new alignment. In his judgment Gibbs J, as he then was, with whom Hanger and Jeffries JJ agreed, said (at p 37):
"In the present case at the date of the resumption it was reasonable to expect that the council would offer to make the building available, since the purpose of the resumption was to widen a road and possession of a portion of a building could be of no use to the council. The fact that it has since made the offer may be regarded to show that as at the date of resumption the building would have been available."
265. Mahoney JA, in the same case, expressed the general principle in the following passage at 576:
In determining the effect which may be given to events occurring subsequently to the date of resumption, it is necessary to draw certain distinctions.
There are some cases in which the theory or principle on which the compensation is to be assessed prevents regard being had to subsequent events. Thus, where the compensation which is to be given is measured by the ordinary market price of the property taken, the principle on which that market price is to be determined prevents (or at least restricts) reference to subsequent events. That market price is the price acceptable to a willing but not anxious vendor and purchaser on the relevant date. Such persons are to be taken to know what an appropriately informed person would know on that date. That being the principle, it follows that such persons (and the court, as determining what they would have done) cannot be seen as knowing more. The price which such persons would accept at that date will be affected by the uncertainties as at that date, as to, for example, the future demand for land at the relevant time, future decisions of zoning authorities and the like. Those uncertainties and the effect of them on the postulated vendor and purchaser help to determine what price will be found acceptable. In that regard, therefore, evidence of what subsequently has occurred in relation to such matters may not ordinarily be referred to. This does not operate so as necessarily to exclude evidence of subsequent sales: Melwood Units Pty Ltd v Commissioner of Main Roads (1975) 52 ALJR 593, at pp 597, 598; [1978] 3 WLR 520, at pp 527, 529, 530; [1979] 1 All ER 161, at pp 166, 167, 168; McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1, at p 16. Such sales are evidence, not of the subsequent outcome of matters which, at the relevant date, were inherently uncertain, but of the price a relevant vendor and purchaser found acceptable at that date for comparable land. The assumption of the law is that from that evidence it is possible to infer what the relevant vendor and purchaser would have found acceptable for the subject land: see generally Harris v Minister for Public Works (NSW) (1912) 12 SR (NSW) 149, at pp 161-4; 29 WN 33; reversed 14 CLR 721; McDonald v Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 231, at p 239.
266. The principle, is of course, subject to exceptions, as the judgment of Hope JA demonstrates, but these are generally concerned with evidence of "subsequent sales". As in Falconer, subsequent events may be relevant to any application of the reinstatement principle.
267. However, in the present case, the question is to be considered in the context of a "before and after" valuation exercise in respect of the Applicant's lands ie. "before and after" the compulsory acquisition of part of his land in November 1995. The subsequent fact, occurring in January 1998, of the grant of the second deferred commencement consent for a very large quarry activity, in my opinion is not relevant, principally because of its remoteness in time, to the facts obtaining as at the earlier date when, and by reference to which, the before and after valuations must be undertaken.
268. However, despite rejecting the Respondent's submission, I think that the question of whether there survived in the retained land any of the potential for quarry use following compulsory acquisition, remains alive and must be answered.
269. Mr Robertson's supplementary Valuation Report (Exhibit 89) deals with this vital question in the following passages (noting that his reference to "Mr Atkinson" is a reference to the Consulting Engineer who had prepared (i) the supporting material for the Applicant's development application for the 28,000 m3 quarry; (ii) the development application and the supporting EIS for the 900,000 m3 quarry approved by the Council in January 1998 and (iii) much of the content of the RJM reports which were in evidence in these proceedings):
(c) Mr Atkinson in his report indicates that he believes the extension of the existing approval to accommodate 88,000 m3 from a 2 ha site would be readily obtainable upon application. (Refer RDM Report - Quarry Resources)
(d) Mr Atkinson has indicated that an additional 350,000 m3 of fill would have been available by extending the existing quarry. Such approval would have required a full Environmental Impact Statement (EIS) which Mr Atkinson believes would have supported the extension to the quarry and as such Mr Perry would have had a very good chance of obtaining consent for a large quarry operation.
(e) Mr Atkinson has been instructed to determine if Mr Perry could simply relocate the existing development approval to adjoining land to the north. I am advised by Mr Atkinson that due to the steeper slopes on the adjoining land Council would require a full EIS.
(f) Consequently, as a result of the resumption, Mr Perry has lost the ability of being able to win 28,000 m3 of material under the existing approval with a strong chance of being able to extend the approval area and quantity to 2 ha and 88,000 m3 without an EIS.
(g) It appears that the additional area that could have been developed by expanding the 2 ha site and that would have needed an EIS, may be able to be relocated on the retained property. As a result the potential that existed for expanding the quarry has not been lost as a result of the resumption.
(h) Given the low risk associated with extending the development approval to cover a 2 ha area, I have assessed the quarry as having a 88,000m3 resource and have adopted a higher profit and risk factor to account for the small additional risk of obtaining the extended development approval.
(o) Mr Perry has lost the potential income from the sale of 88,000m3 of material from the quarry (110,000m3 of loose material) as a result of the resumption and or/the ability to sell that potential income stream to a local contractor.
270. In the course of cross-examination, it was pressed on Mr Robertson that the quarry potential had not been lost by virtue of the compulsory acquisition because it was simply a matter of relocating the quarry elsewhere on the retained land. Mr Robertson stoutly resisted this, and allied suggestions, maintaining his view that the compulsory acquisition had deprived the Applicant of the quarry resource located on the acquired land and that this loss was, in truth, independent of any question of whether any part of the retained land could be developed as a quarry resource, which in his view would pose considerably higher risks for any purchaser of the retained land.
271. Having regard to the evidence, I am of the opinion that if the hypothetical purchaser of the Applicant's land before compulsory acquisition would consider its value enhanced over its existing use value, by virtue of the quarry potential, the hypothetical purchaser of the retained land, after compulsory acquisition, would likewise recognise some enhanced value by virtue of the survival, at least in part, of that same potential. In so concluding, I accept that in realising this surviving quarry potential, the hypothetical purchaser of the retained land, would probably consider that the realisation of that potential to be more problematic and costly than would the hypothetical prudent purchaser of the land in its "before value". However, the greater risk involving in realising the potentiality does not mean that no such potentiality exists. Nor do I think it appropriate to regard the compulsory acquisition as causing the total loss of the quarry resource, because of the vast quantities of phyllite material contained elsewhere on large parts of the Applicant's land, the quantities of which render it somewhat theoretical to regard the quarry potential as a wasting asset.
272. The difficult task is to quantify the surviving potential and to compare the respective values of the "before and after" potentials. Based upon the evidence, I would conclude that 50% of the potential survived the compulsory acquisition and that the difference between "the before and after values" in respect of any enhanced value by virtue of the quarry potential of his lands would be in the order of 50%. This assessment accommodates the factors of the higher risk and greater cost of realisation of the quarry potential in the "after" value compared with the "before" value.
273. Accordingly, whatever be the enhanced value to be attributed to the quarry potential, I would consider 50% of that value would survive the compulsory acquisition and the resultant loss in any enhanced value of the compulsorily acquired land by virtue of its quarry potential be determined at 50% of that enhanced value in the before value.
274. My conclusion is not based upon the Respondent's submission that whatever quarry potential the Applicant's land had, was not affected by the compulsory acquisition except for any consequent need to relocate the quarry. Nor do I accept the Respondent's submission that the quarry potential existed in an undifferentiated fashion throughout the Applicant's land.
275. Coming then to the question of any enhanced value by virtue of the quarry potential, and faced with the vast range of values proffered by Mr Robertson and Mr Reed, I think that the hypothetical prudent purchaser would be prepared to pay some $200,000 extra for the Applicant's land in the "before value" situation reflecting the enhanced value of the quarry potential. This figure is mid point Mr Reed's value of $162,000 (Table 4 Exhibit S) based upon an 11 year operating period with average annual sales of fill material of 10,000 m3 and Mr Robertson's "comparison" valuation of $235,000 (Option 6B(2) Exhibits 82 and 93).
276. The average annual sales rate of 10,000 m3 reflects a conservative assessment of market demand. (Mr Robertson's preferred valuation postulated twice the annual sales and accordingly, half the development period.) The difference between these two comparison valuations lies in the different establishment costs, and particularly the costs of satisfying the condition of the Council's 1995 deferred commencement consent for a quarry of 28,000 m3 requiring a type A intersection at the junction of the access road with the Pacific Highway. It is unnecessary to resolve the differences in establishment or development costs because the decision of the hypothetical prudent purchaser would be cognisant of both estimates and the competing opinions of Mr Reed and Mr Robertson, neither of which is shown to be demonstrably wrong or unsound. However, I do not myself accept (nor do I believe the hypothetical prudent purchaser would accept) Mr Reed's opinion concerning the additional establishment and development costs (including risks) involved in converting the potential from an approved 28,000 m3 quarry to a 88,00 m3 quarry. In respect of that matter, I think Mr Reed has vastly overstated the risks and the additional costs of the larger venture - to exploit the quarry potential.
277. It follows, from the foregoing reasons that in my opinion, the hypothetical prudent purchaser would pay an additional $200,000 for the Applicant's land in respect of its quarry potential in the "before" situation and the hypothetical prudent purchaser would pay an additional $100,000 for the Applicant's retained land for the surviving potential.
278. Accordingly, I find, by giving effect to the conventional "before and after" valuation principle, that there is an enhanced value of $100,000 in respect of the quarry potential of the acquired land over and above its agreed existing use value of $158,000 resulting in a market value of $258,000 to the acquired land.
279. This amount is obviously significantly less than the $1 million adopted in the "Raja" valuation.
280. In leaving this topic I should say that I do not accept the Respondent's attack on Mr Robertson's credit because unlike Mr Reed, he did not, in carrying out his research into likely market demand for the quarry product, have regard to official records of productions levels of established quarries in Coffs Harbour etc.
281. I do accept that Mr Reed has vast and impressive experience in the quarry and extractive industry and in assessing enhanced value in respect of the quarry potential, I have accepted his conservative scenario on market demand (half of what Mr Robertson predicted, involving twice the development period with the consequent significant reduction in the present value of the quarry potential). To that extent, I think that I, like the hypothetical prudent purchaser, would have regard to what might fairly be regarded as a "worst case" scenario in terms of demand and selling period.
282. However, this evaluation of the expert evidence does not require or justify a rejection of Mr Robertson's valuation exercises, notwithstanding that Mr Robertson has no previous experience in valuing a quarry. However, Mr Robertson's valuation methodology was plainly correct and indeed Mr Reed adopted it. Additionally, as I have earlier said, Mr Reed is not a valuer and Mr Robertson is a valuer of considerable experience and high reputation. The attack made by the Respondent on Mr Robertson's credit has been rejected. The true basis for resolving the conflict in the competing opinions of Mr Reed and Mr Robertson in the manner I have done, lies in the established concept of the hypothetical prudent purchaser. In saying that, I do not intend to suggest that in every case, a Court hearing competing evidence concerning the potential of land and its value will conclude that the hypothetical prudent purchaser, deemed to be fully conversant with all matters affecting the potential of the land, and its value, will always, when confronted with competing opinions, opt for the "midpoint" solution. That would, as a general principle, produce absurd results and render litigation on disputed compensation claims a mere game, the outcome of which being mechanically predictable.
283. Obviously, the question of value, being one of fact, must ultimately be determined by the Court in its proper role as judicial valuer, and in this role, of course, the result will be determined by the Court's evaluation of the competing valuation and other expert evidence. However, since in determining "market value" the opinion of value ultimately determined must be determined, through the medium of the hypothetical parties to the hypothetical sale, the resulting adjudication must conceptually, be mediated through that process, and it will not always be achieved simply by the Court's preference for one expert opinion over a competing expert opinion.
284. In the present case, I have determined the enhanced value to be attributable to the quarry potential in both the "before and after" values, via the mediated "willing vendor and purchaser concept" and in so doing, have also evaluated the competing opinions of Mr Reed and Mr Robertson via that process.
F. THE APPLICANT'S DISTURBANCE CLAIMS
285. In view of the results of my determinations of the value of the compulsorily acquired land reflecting its special potentiality ($1 million for the "Raja" valuation and $258,000 for the land reflecting its commercial quarry potential in addition to its existing use value), I propose to confine my consideration of the Applicant's disturbance claims to the limited disputed claims set forth in Exhibit 90 flowing from my adoption of the "Raja" valuation, because it is obvious that the wider disturbance claims even if wholly successful, when combined with the market value of $258,000, would produce a figure that falls very far short of the $1 million "Raja" value determination. (For completeness I would add that I would be disposed to the view that the Applicant has generally established all the other disputed disturbance claims.)
286. The limited disturbance claims in dispute, total $113,145 and comprise the following items:
(i.) supplementary cattle feed costs incurred to the date of commencement of the hearing