Secretary to the Department of Economic Development Jobs Transport and Resources v Driver [2015] VCAT 813

The further hearing of the claim is adjourned to 28 October 2015 for three days.

Ms Michelle Quigley QC with Ms Marita Foley, of counsel instructed by Messrs Herbert Smith Freehills

Mr Jeremy Gobbo QC with Mr Paul Chiappi of counsel, instructed by Messrs Best Hooper

1. On 9 December 2011 the Secretary to the Department of Transport (as it was then known), now the Department of Economic Development, Jobs, Transport and Resources (the Authority) compulsorily acquired 2.878 hectares of land owned by Amanda Susan Driver (the Claimant) for the purpose of constructing part of the regional rail link connecting land to the south and west of Melbourne with the central city.
2. The land acquired comprises a strip traversing the north-west corner of the Claimant's property which has a northern frontage to Sayers Road, Tarneit.
3. The railway project crossed Sayers Road at its abuttal with the Claimant's land. The effect of the acquisition was to reconfigure Sayers Road so that it now terminates in two bowls, one on either side of the railway. Access to the Claimant's land is now from the bowl to the east of the railway.

1. The Claimant's land had a total area of 113.35 hectares and was at all relevant times used for rural and agricultural purposes and as a family home. The main improvements comprised a dwelling house occupied by the Claimant, her partner Mr Seamus Walsh and their three children. This house is located approximately 200 metres south of Sayers Road. There is a small weatherboard house closer to the northern boundary which is tenanted.
2. The entrance to the Claimant's property from Sayers Road was at the date of acquisition marked by a feature wall extending a short distance to the east and west of the driveway leading to the main house. The wall was of masonry construction and contained an iron gateway. Photographs of the wall and gate are Exhibit 2 to the witness statement of Seamus Walsh (Exhibit C4 in the proceeding).
3. The masonry wall and gates were located on the strip of land acquired by the Authority and were demolished to make way for the railway corridor.
4. The north west part of the Claimant's land is traversed by the Werribee River. The improvements mentioned above are on the east side of the river. Near the weatherboard house there was a water tank containing water pumped from the river. The water was piped for cattle troughs, two on each side of the river. The tank was on the strip acquired by the Authority and was demolished. It has been replaced by a new tank located near the main house to service the troughs on the east side, and a second tank on the west side of the river to service the troughs on that side.
5. The driveway from Sayers Road to the main house was unmade and was surfaced with gravel.

1. On 19 December 2011 the Authority made an offer of $2,180,000 for the market value of the acquired land together with $30,000.00 for solatium plus expenses under s. 41(1)(f) Land Acquisition and Compensation Act 1986 (the Act). An advance was made to the Claimant at her request.
2. The Authority took possession of the acquired strip on 15 March 2012.
3. For reasons which are not entirely clear the Claimant did not make a claim for compensation, and on 11 September 2013 the Authority referred the matter to the Tribunal as a disputed claim.
4. On 28 March 2014 the Claimant lodged particulars of her claim. Those particulars were amended on 29 October 2014 and again on 4 May 2015 to formulate the claim as follows:
   1. Pursuant to section 41 (1)(a) of the Land Acquisition and Compensation Act 1986 ("the Act"), the market value of the Respondents interest in the acquired land:

b. Less "after" value, 110,4741 hectares $35,500,000

1A. Pursuant to s. 41(1)(b) of the Act, the value of the pecuniary advantage in addition to market value which is incidental to the Respondent's ownership or occupation of the land, being the difference between the amount of capital gains tax payable by the Respondent in the event of the acquisition, assuming a sale of the remaining land in 2018, and the amount of the capital gains tax payable upon such a sale in the absence of the acquisition. TBA

1. Pursuant to section 41(1)(d) of the Act, loss attributable to disturbance:
   1. The cost of acquiring replacement land, calculated as stamp duty on land situate at and known as 870 Yea Road, Whittlesea, Victoria, purchased on or about 5 April 2010 for the sum of $1,300,000. $71,500
   2. The estimated cost of:

(i) reinstatement of the external fence $113,329.80

1. In the alternative to paragraph 1A above the difference between the amount of capital gains tax payable by the Respondent in the event of the acquisition, assuming a sale of the remaining land in 2018, and the amount of the capital gains tax payable upon such a sale in the absence of the acquisition. TBA

2A. Further, alternatively to paragraph 1A and 2(c) above, pursuant to s. 30 of the Act, compensation in respect of the additional capital gains tax payable by the Respondent in the event of the acquisition, assuming a sale of the remaining land in 2018, the amount of the capital gains tax payable upon such a sale in the absence of the acquisition. TBA

1. Pursuant to section 41(l)(f) of the Act, legal, valuation and other professional expenses necessarily incurred by the Respondent by reason of the acquisition of the interest:

c. Surveying and engineering expenses: CPG/Spiire $67,296.99

f. Acoustic Engineering: Renzo Tonin and $7,643.50 Associates and WMG

g. Accounting and Taxation Advice: Matthew $9,075.00

j. Ecological: Paul Kelly & Associates and $12,913.45

1. Pursuant to section 44 of the Act, solatium $350,000

The Respondent claims interest pursuant to the Act and costs.

The Respondent reserves the right to add to or amend the claim.

1. As a result of mediation and negotiations between the parties, by the adjourned commencement of the hearing on 13 May 2015 the only matters remaining in dispute were as follows:

Stamp duty on purchase of replacement land at Whittlesea

Consultancy expenses provided by Walsh Building Services Pty Ltd

1. Other items which have been agreed are as follows.

(a) Market value of the land at $5,500,000. It is also agreed that this figure can if appropriate be apportioned $748,410.00, being the value of the strip of land acquired, and $4,751,590 for diminution in value of the balance of the land due to severance.

(d) Claims under s. 41(1)(f) set out in paragraph 3

1. There remains outstanding a claim in relation to capital gains tax referred to in paragraphs 1A, 2(c) and 2A of the particulars of claim dated 4 May 2015 which is set down for hearing on 28, 29 and 30 October 2015. This claim has not yet been quantified by the Claimant. The final determination of the claim cannot be made until this item is resolved.

1. The compensation to which the Claimant is entitled is to be determined under Part IV of the Act, which is entitled Measure of Compensation. Section 41 of the Act is entitled General principles on which compensation is to be based. The section provides in so far as is relevant:

(1) Except as otherwise provided in this Part, in assessing the amount of compensation payable to a claimant in respect of an interest in land which is acquired under this Act, regard must be had to the following factors -

(a) the market value of the interest on the date of acquisition;

(f) any legal, valuation and other professional expenses necessarily incurred by the claimant by reason of the acquisition of the interest.

1. "Disturbance" is defined by s. 40 of the Act. It provides:

loss attributable to disturbance means any pecuniary loss suffered by a claimant as the natural, direct and reasonable consequence of -

(a) the service upon the claimant of a notice of intention to acquire, where the Authority has refused or failed to give consent to the carrying out of improvements to the land in respect of which that notice has been served or the effecting or obtaining of any sales, transactions, licences or approvals in respect of that land; and

(b) the fact that an interest of the claimant in that land has been divested or diminished, being a pecuniary loss for which provision is not otherwise made in this Part;

1. In Melbourne City Link v Teford [2001] VSCA 54; (2001) 113 LGERA 102 the Court of Appeal agreed (p. 110) that the conjunction "and" between the two lettered paragraphs of the definition must be read as the disjunctive "or".
2. Most of the items remaining in dispute in this case sound as claims for disturbance. Therefore the test is whether they are pecuniary losses suffered by the Claimant "as the natural, direct and reasonable consequence of" the acquisition, "being a pecuniary loss for which provision is not otherwise made in this Part".
3. The phrase "natural, direct and reasonable consequence" was discussed by Osborn J in Roads Corporation v Love (2010) 31 VR 451 (hereafter referred to as Love). In that case His Honour said (at paragraphs 112 - 113):

(112) The application of the requirement that the relevant pecuniary loss be suffered as a 'natural, direct and reasonable consequence' of the divestment of an interest in land, may give rise to difficult questions of fact.

(113) The expression 'the natural, direct and reasonable consequence' is to be understood by the use of three adjectives in combination, to connote a very close and limited connection between the event giving rise to a right to compensation and the financial loss suffered.

1. His Honour elaborated further in Roads Corporation v Schembri (2009) 28 VR 229 where at p. 234 he cited with approval what had been said by Batt J (as he then was) in Halwood Corporation Limited v Roads Corporation (1995) 89 LGERA 28.

In Halwood, his Honour examined relevant authority[1] and concluded that the word "natural" in this context means arising according to the usual course of things. The word "direct" connotes an immediate and substantial causal connection. The word "reasonable" connotes a reasonable response to the event triggering the right to compensation.[2]

1. In Melbourne City Link Authority v Teford Pty Ltd (2001) supra the Court of Appeal proceeded on the basis that the question of whether a consequence is "a reasonable consequence" within the meaning of the statutory definition requires the application of an objective test.
2. The claims which are not attributable to disturbance are solatium, which is governed by s. 44 of the Act, and the alternative basis upon which the claim for consultancy expenses is put, namely, for professional expenses under s. 41(1)(f) of the Act.
3. It is clear that each of the claims, apart from solatium and for consultancy expenses just referred to, is for a pecuniary loss for which provision is not otherwise made in the Act. This means that in relation to each item of claim for disturbance there are two questions. First, is the loss the natural, direct and reasonable consequence of the acquisition. Secondly, if yes, what is the appropriate amount of compensation.
4. The Tribunal will now address these questions in relation to each item of the claim for disturbance.

Stamp Duty on Purchase of Replacement Land at Whittlesea

1. This is a claim for $71,500, being the stamp duty payable in acquiring replacement land at Whittlesea.
2. In an appropriate case a claim for stamp duty payable on the purchase of land to replace the land acquired can be allowed as an item of disturbance (see Redwood Court Pty Ltd v Roads Corporation (1992) 76 LGRA 358; Roads Corporation v Schembri, supra and Melbourne City Link Authority v Teford Pty Ltd, supra).
3. In each case it is a question of fact whether the claim for stamp duty meets the test of being "the natural, direct and reasonable consequence" of the acquisition.
4. The Authority submitted that stamp duty paid upon the acquisition of the "replacement property" is not compensable because the test is not satisfied.
5. The Authority pointed out that the replacement Whittlesea land was purchased well before the subject land was acquired. Moreover the claim in relation to the replacement land was made approximately two and a half years after the date of acquisition and approximately five years after the date of purchase of the land. The Authority also points out that the Claimant still resides on the subject land and indicates every intention of continuing to do so for as long she can. Her children attend school in Geelong.
6. The Authority also argued that if the Tribunal finds that a claim for a disturbance loss has been established for the stamp duty associated with the purchase of the Whittlesea land, the claim cannot be allowed because of s. 41(2) of the Act.
7. Section 41(2) of the Act states:

If the market value of an interest in land is assessed on the basis that the land had potential to be used for a purpose other than the purpose for which it was used on the date of acquisition, compensation must not be allowed for -

(a) any special value in respect of any pecuniary advantage that would necessarily have been forgone in realizing that potential; and

(b) any loss attributable to disturbance that would necessarily have been incurred in realizing that potential.

1. The Tribunal's finds that the relevant facts in determining whether or not stamp duty on the purchase of the replacement property is a natural direct and reasonable consequence the acquisition are as follows.
   • The Whittlesea land was purchased well before the date of acquisition and therefore does not easily answer the description of a 'consequence'.
   • The portion of the subject land acquired was less than 3 hectares of a property with an area in excess of 113 hectares.
   • The acquired land was not a separate parcel (with or without separate title) and formed part of a larger parcel, namely Lot 6 on Plan of Subdivision 701129N.
   • The Claimant's ability to continue to reside in the family home and use the remaining 110 hectares of land has not been affected by the acquisition.
   • Mr Walsh's witness statement dated April 2015 confirms that he and the Claimant with their family reside at the subject property, and his evidence indicates that they wish to continue to do so.
2. The Tribunal's view is that the purchase of the replacement property is not a natural, direct and reasonable consequence of the acquisition as that expression has been interpreted by the Supreme Court. Accordingly the claim for stamp duty is disallowed.
3. In the light of this finding, there is no need to consider whether the claim is defeated by s. 41(2) of the Act.

1. The first question is whether this item is compensable. In relation to this question the Tribunal makes the following findings of fact.

(a) The masonry wall, which could be described as a feature wall, was located on the land actually acquired by the Authority.

(b) The wall was demolished in the course of construction of the project for which the land was acquired.

(c) The Authority subsequently commenced to replace the wall with a post and wire fence of a type common in rural areas, including the area which includes the subject land.

(d) Mr Walsh removed the posts prior to the completion of this fence and decided on his own initiative to reinstate the feature masonry wall in a position along the new common boundary of the Claimant's land with the acquired land. This he did.

(e) The new wall is less imposing and less expensive than the original wall.

1. Ms Quigley QC, who with Ms Foley of counsel appeared for the authority, argued that the feature masonry wall and gates were on land actually acquired by the Authority and were therefore included in the assessment of the value of that land.
2. In the case of an acquisition of the whole of a claimant's land this would be a complete answer because unless the claimant owns contiguous or adjacent land there can be no claim for severance or disturbance. However, if the land acquired contains an improvement or improvements which benefit the remaining land, the dispossessed owner is entitled to be reimbursed the costs of replacing those improvements on the remaining land. The Tribunal considers that these costs fall squarely within the definition of "disturbance".
3. For example, if the land acquired contains a tennis court or a swimming pool which is enjoyed by the land remaining, the owner is entitled to have that loss compensated by the replacement of the facility on the balance of the land. It matters not whether the improvement is functional, such as a shed, or ornamental, such as a fish pond.
4. The second question is: What is the appropriate amount of compensation?
5. In this regard the evidence is less than satisfactory on both sides. For the Claimant the work was carried out at a cost to her of $113,329.80. The work was carried out by Walsh Building Services Pty Ltd, a company owned and operated by the Claimant's domestic partner, Mr Seamus Walsh. This raises a question as to whether the transaction was at arms length. Mr Walsh gave evidence that he had obtained an estimate of the costs of the work from a Mr Frank Formosa which supported the cost invoiced to the Claimant. However, he had lost this estimate and was unable to produce it or a copy.
6. The Authority relied on the evidence of Mr Brian Paroissien, an experienced civil engineer. He estimated the cost of replacing the wall at $67,206.72, which with GST would come to $73,927.39. However, this estimate was based on what he described as a "desk top evaluation" which was carried out without the benefit of an inspection of the site or the new wall. In fact, Mr Paroissien did not inspect the wall until the day before the scheduled commencement of the hearing. Moreover, Mr Paroissien's estimate did not allow for galvanised gates or three coats of render which Mr Walsh said were necessary.
7. The Tribunal considers that on balance the Claimant's evidence is of greater probative value. Mr Walsh is an experienced builder and his company actually carried out the work for which it was paid. On the other hand Mr Paroissien's estimate is more theoretical, based on assumptions and data of general application rather than relating to the particular site and the particular works. It is an estimate made without the benefit of seeing the works.
8. One should also keep in mind the observations of Osborn J in Love at paragraph 122:

Other things being equal, if there is a doubt as to the amount properly payable by way of compensation that doubt should be resolved in favour of the more liberal estimate.[3]

1. Although this is not determinative of the Tribunal's decision it is a principle that provides some comfort for the Tribunal's finding.
2. The Tribunal will allow this item of claim in the amount of $113,329.80. This includes GST.

1. This item is really a component of the cost of replacing the masonry wall. The expense was necessitated by the fact that the Authority had installed a 240 volt underground cable along and within 200mm of the realigned boundary. This meant that digging the footings of the new wall had to be carried out by hand to avoid the risk of machinery hitting the cable.
2. The cost of $6,400 is calculated as the cost of two men, both employees of Mr Walsh's company, for five days working eight hours a day at $80.00 an hour. This seems at the high end of what may be regarded as reasonable, but the Authority led no evidence on the question of cost. The Tribunal will allow this item of claim at $6,400.

1. The acquired land included the driveway entrance to Sayers Road from the Claimant's land. This means that the entrance had to be relocated to provide access to the eastern bowl of Sayers Road.
2. For the reasons mentioned above in relation to the replacement of the masonry wall this is a legitimate item of disturbance.
3. In relation to the appropriate allowance for this item the evidence before the Tribunal is similar to that relating to the replacement wall. The work was carried out by Mr Walsh's company and invoiced to the Claimant in the sum of $57,200. On the other hand Mr Paroissien's "desk top evaluation" yielded a figure of $28,156.80. Again, the evidence led by the Claimant is of greater probative value.
4. The claim in relation to the reinstated driveway includes an amount for the asphalting of a curved section of the driveway near the new entrance. It was said that this was necessary to avoid gravel being shifted to one side of the driveway by the movement of vehicles, both cars and trucks, including large cattle trucks.
5. The Tribunal is not persuaded by this argument. There is no credible basis for the suggestion that the volume and speed of traffic using this section of the driveway would be such as to unduly disturb the gravel. The replacement of the gravel driveway with a partly asphalted new driveway would not be reinstating like for like. The Claimant previously had a gravel driveway, and is entitled to have that replaced with another gravel driveway.
6. Mr Paroissien estimated that the proposed asphalting of part of the driveway would increase the cost by approximately one third. The Tribunal accepts Mr Paroissien's expertise in this regard. It will allow this item in the amount of $38,324 being two thirds of the cost paid by the Claimant.

1. This is clearly an allowable item of disturbance. The Authority accepts this, so the only issue is as to the amount.
2. The Authority is prepared to allow $50,000 being what the Claimant has paid thus far in relation to this item. The balance of the claim relates to the provision of a solar pump, which Mr Walsh says will be installed when the railway project has been completed and the location of the water tank secured by appropriate fencing. Until this happens Mr Walsh is concerned that the pump will be vulnerable to vandalism and theft.
3. The Tribunal considers that Mr Walsh's concerns are not unwarranted. It seems certain that the new pump will be installed. The watering system serviced by the water tank could not operate effectively without the pump.
4. The Tribunal will allow this item at the figure claimed $79,500.

1. The Claimant is claiming $85,962.03 for consultancy expenses pursuant to an agreement entered into between herself and her partner's building company, Walsh Building Services Pty Ltd (WBS) in February 2014. The thrust of the agreement was that WBS would manage the claim or, in colloquial terms, do the legwork on behalf of the Claimant.
2. The claim is put either as an item of disturbance or alternatively as a claim for "professional expenses" under s. 41(1)(f) of the Act. It is convenient to deal first with the alternative basis.
3. The Tribunal is of the view that as a claim for "professional expenses" it cannot be sustained. Mr Walsh gave evidence that his company is a building company which carries out a variety of building works throughout the metropolitan region. It clearly has expertise in this area. However, the Tribunal considers that it does not provide a professional service of the type contemplated by s. 41(1)(f). "Professional expenses" in paragraph (f) must be read in the context of legal and valuation services to mean the services of a profession as understood in the common parlance. In ordinary and everyday language WBS would be regarded as engaged in a trade rather than a profession.
4. The type of professional services contemplated by paragraph (f) are those involved in the formulation and prosecution of a claim for compensation. These may include town planners, architects, accountants, engineers and similar services of an advisory nature. It might have some limited application to the building industry if, for example, a quantity surveyor was required in connection with costing an item of disturbance, or in estimating subdivision expenses. But the paragraph relates to those who advise rather than those who actually carry out the work.
5. Further, the Tribunal considers that the consultancy expense cannot be described as "necessarily incurred". The Claimant had already retained a number of professional advisers who are set out in the particulars of claim (para 12 above) and in paragraph 69 of Mr Walsh's statement of evidence. The retention of WBS might be described as useful, or at most as desirable, but by no means necessary.
6. As an item of disturbance the claim meets with two immediate difficulties.
7. First, it cannot be said to have the very close and limited connection with the acquisition that in the words of Osborn J is connoted by the phrase "natural, direct and reasonable consequence" of the acquisition.

(a) It is not a natural consequence in the sense of being an inevitable result of the acquisition.

(b) It is not a direct consequence of the acquisition. It was the result of a decision made by the claimant to avail herself of services that were optional rather than necessary.

(c) It could not be described as reasonable having regard to the large number of other professional advisers retained by the Claimant, most of whose fees have been paid by the Authority.

1. It is for the claimant to manage his or her claim, and any inconvenience or anxiety resulting from that is a matter to be taken into account in considering solatium. The claimant is entitled to retain such professional assistance as may be necessary to formulate and prosecute the claim. If the claimant enters into an arrangement to manage the claim with a person who has no experience in the area of compulsory acquisition of land or any of the disciplines associated with that process that is an indulgence for which the Authority is not required to pay. Even more so when that person is the claimant's spouse or partner when the payments involved do not alter the family balance sheet. One might well query whether a payment by one domestic partner to the other is a "pecuniary loss" within the definition of "disturbance".
2. Mr Walsh quite frankly conceded in evidence that neither he nor his company had any knowledge or experience in the somewhat arcane area of compulsory acquisition of land and compensation for such acquisition, or in valuation, legal or procedural matters relating to that area. His only real contribution was to liaise with the numerous experts and consultants already retained by the Claimant, something which she herself would normally do. If for any reason or reasons other than physical or intellectual incapacity she did not wish to be associated with the process that is her decision. It is not a decision for which the Authority must accept financial responsibility.
3. The second difficulty with the claim is grave doubts regarding how it is quantified.

(a) The claim purports to be made under an agreement between the Claimant and WBS entered into in February 2014, two and a half years after the land was acquired. There was no explanation for this delay other than Mr Walsh's admission that he is not much good with paper work.

(b) Only one invoice dated 6 October 2014 was ever rendered to the Claimant. That invoice covered works said to have been done between October 2010 and September 2013. There was a total absence of documentation relating to this work. It has been itemised on the basis of Mr Walsh's recollection and some records held by the Claimant's solicitors, Messrs Best Hooper. On the basis of Mr Walsh's confession that his recollection is less than perfect there is a suspicion of recent invention about many of the items listed in the invoice.

(c) WBS's contribution to the prosecution of the claim is reflected to some extent by his frank admission that he did not read any of the valuers reports other than the bottom line.

(d) The October 2014 invoice relates to work done for both the Claimant and in relation to another property owned by Benneb Pty Ltd, a company owned by Mr Walsh. There was no explanation as to why all this work was invoiced to the Claimant other than it was a mistake. The amount claimed is said to be an apportionment between the two properties.

(e) The itemised work included work done in relation to the Claimant's participation, through Mr Walsh, in the Riversdale Precinct Structure Plan, which included both the Claimant's land and the Benneb land located opposite the subject land on the north side of Sayers Road. The Structure Plan related to the future urban planning of the area. The Claimant and Benneb have a major landholding in this area and therefore had a vital interest in the Structure Plan. But the Structure Plan has nothing to do with the Authority's acquisition of a strip of the Claimant's land for the railway corridor. The work attributable to the structure plan was not excised or severed from the invoice.

(f) Mr Walsh charged for WBS's services at the rate of $250.00 an hour. No justification or trade standard was provided to support this rate other than Mr Walsh's statement that he would not have done the work for anything less. The Tribunal, as an expert body, believes that there are any number of people who would have done this type of leg work requiring no professional or trade qualifications or trade experience for considerably less.

1. For these reasons the Tribunal considers that the October 2014 invoice does not provide a sound basis for quantifying this item of disturbance. So even if, contrary to the Tribunal's finding, the item is compensable as disturbance it must fail for lack of substantiation.

1. Section 44(1) of the Act provides:

(1) The amount of compensation may be increased by such amount, not exceeding 10% of the market value of the land, by way of solatium as is reasonable to compensate the claimant for intangible and non-pecuniary disadvantages resulting from the acquisition.

1. This provision should be given as liberal a construction as the words reasonably allow. In Marshall v Director General Department of Transport [2001] HCA 37; (2001) 205 CLR 603 Gaudron J said (p 623):

The right to compensation for injurious affection following upon the resumption of land is an important right of that kind and statutory provisions conferring such a right should be construed with all the generality that their words permit. Certainly, such provisions should not be construed on the basis that the right to compensation is subject to limitations or qualifications which are not found in the terms of the statute.

1. The concept of solatium is described in the well know passage from March v City of Frankston No 1 (1969) VR 350 in which Barber J referred to solatium, which was at that time dealt with in s. 26(c) Valuation of Land Act 1960, as:

an expression apt to describe an award of some amount to cover inconvenience and in a proper case distress caused by compulsory taking. It is quite inapt to describe an amount awarded for provable loss to which the claimant is entitled.

On my view of the meaning of solatium I should endeavour to compensate the claimants for the nuisance and annoyance resulting from the disruption of their business and the trouble, caused them by the acquisition. Any such award must not include any of the factors which they have established and been compensated for under s26(b), but represents only the imponderables which are not specifically provable.

I accept that both the dictionary definition and the observations of Barber J illuminate central aspects of the class of disadvantage which is ordinarily compensable by way of solatium. I do not accept however that either description of the concept should be substituted for the statutory definition. That definition is potentially broader in its compass than either of the descriptions referred to.

This is consistent with the observation of Gaudron J cited above.

1. In Love Osborn J went on to say (at para 776):

What is contemplated is the discretionary award of a lump sum in circumstances justifying such award. This reflects the approach taken by Barber J in respect of earlier legislation. In Mayberry v Melbourne and Metropolitan Board of Works, unreported, 8 June 1970 Barber J said of the then s 26(c):

The proper approach is not to deal in percentages but to decide what amount of money will compensate for the compulsory nature of the acquisition. What has the claimant lost as a matter of intangibles - worry, trouble and nuisance which is not compensated for by any element in the amount awarded in respect of substantial legally provable claims. Such sum should be awarded, whatever percentage of the value of land it represents, so long as it is within the limit imposed by the 10%.

I do not accept that it is not open to express an award of solatium by reference to a percentage of reduction in market value but I do accept the submissions of both parties that the fundamental task is to assess an appropriate lump sum amount.

1. It can be seen from the above observations that an award for solatium is not unlike an award for pain and suffering in an action for damages for personal injury.
2. The determination of solatium is a two stage process. First, the Tribunal must determine whether the circumstances of the case justify an award of solatium, and if so, what is the appropriate lump sum. Secondly, it must then decide whether the lump sum exceeds the 10 percent cap imposed by s. 44.
3. The first stage requires the Tribunal to follow the directions set out in s. 44(2) of the Act. The sub-section provides:

(2) In assessing the amount payable under subsection (1), there must be taken into account all relevant circumstances applicable to the claimant including, without limiting the generality of the foregoing -

(a) the interest of the claimant in the acquired land; and

(b) the length of time during which the claimant had occupied the land; and

(c) the inconvenience likely to be suffered by the claimant by reason of removal from the land; and

(d) the period of time after the acquisition of the land during which the claimant has been, or will be, allowed to remain in possession of the land; and

(e) the period of time during which, but for the acquisition of the land, the claimant would have been likely to continue to occupy the land; and

(g) where the claimant at the date of acquisition is occupying the land as the claimant's principal place of residence, the number, age and circumstances of other people (if any) living with the claimant.

1. The Authority's offer for solatium is $30,000.
2. The Claimant's claim for solatium has varied as the matter has progressed. In the most recent amended particulars of claim $350,000 is claimed for solatium. In the opening submission by the Claimant, the claim for solatium was amended to $220,000. In the closing submissions for the Claimant the amount of solatium, whilst remaining at $220,000, was said on no view should be less than $165,000. It was said that a sum of $100,000 should be considered as 'rock bottom'.
3. The facts in the proceeding before the Tribunal that are required to be taken into account under Section 44(2) are as follows:
   • (a) the interest of the claimant in the acquired land.

The Claimant is the sole owner of the subject land.

(b) the length of time during which the claimant had occupied the land.

The Claimant purchased the subject land in May 2001 and has occupied the property since then.

(c) the inconvenience likely to be suffered by the claimant by reason of removal from the land.

The Claimant has not been removed from the land as the acquisition did not take all of the land. The land remaining after acquisition provides an ample curtilege for a family house in a rural setting.

(d) the period of time after the acquisition of the land during which the claimant has been, or will be, allowed to remain in possession of the land.

The acquisition of a portion of the front of the subject land has not diminished the Claimants ability to remain indefinitely on the balance of the subject land.

(e) the period of time during which, but for the acquisition of the land, the claimant would have been likely to continue to occupy the land.

The land acquired land is 2.88 hectares of a 113.35 hectare property. The site comprises two houses, one of which the Claimant and her family reside in. The two houses have not been removed as a result of the acquisition and the claimant and her family are able to reside on the subject site indefinitely.

The Tribunal was informed that the Claimant is 44 years of age.

(g) where the claimant at the date of acquisition is occupying the land as the claimant's principal place of residence, the number, age and circumstances of other people (if any) living with the claimant.

Ms Driver's principal place of residence is the subject land where she lives with her partner, Seamus Walsh and their three children aged 14, 9 and 7.

1. The Tribunal heard no evidence from the claimant. Ms Driver provided no witness statement and did not appear before the Tribunal. In R K Morgan Holdings Pty Ltd v Melbourne and Metropolitan Board of Works (1992) 77 LGRA 102 Gobbo J said (at p. 115):

I have on two recent occasions in claims for solatium rejected such claims entirely. I refer to Elense No 17 Pty Ltd v Minister for Public Works (1990) 77 LGRA 46 and Rees v Minister for Planning and Housing (1991) 76 LGRA 167. In the first case I drew particular reference to the fact that no director of the company had been called and, in the second, I noted that neither of the claimants had been called. Where a claim is made for solatium founded on intangible or non-pecuniary disadvantages, it will be difficult, though not impossible, to establish these without calling evidence, especially evidence from the party itself.

1. The Claimant sought to disassociate herself from anything to do with the acquisition by engaging her partner, Mr Walsh and his building company as a consultant in a commercial arrangement to deal with the various issues surrounding the Regional Rail Link (RRL) as outlined in Mr Walsh's witness statement at paragraph 13, 66 and 67.
2. Mr Walsh's witness statement in paragraphs 14 to 30 outlines the impact of the RRL works that describes to some extent the impact on his family. Some of the issues raised such as dust and mud on Mr Walsh's car have been financially recompensed by way of car wash vouchers.
3. There is a question, which was adverted to but not argued during the hearing, as to whether amenity intrusions, such as dust, heavy vehicle and machinery movements and the like, are attributable to the carrying out of the project for which the land has been acquired rather than to the acquisition itself, and therefore not a matter to be considered in the assessment of compensation.
4. However, where the front entrance to the Claimant's property and the dwelling house occupied by herself and her family are very close to the land on which the project will be constructed, there is a reasonable apprehension that such amenity impacts will be suffered in the short or medium term future. The stress and anxiety arising from such apprehension is a legitimate factor to be taken into account in determining solatium.
5. The key considerations in assessing a reasonable amount to compensate the Claimant for indefinable non financial disadvantages resulting from the acquisition are as follows.
   1. The Claimant herself has provided no evidence of the distress and inconvenience caused by the acquisition.
   2. The only evidence before the Tribunal is the witness statement from Mr Walsh that combines Mr Walsh's evidence acting as a consultant (and the difficulties encountered as a consultant) and Mr Walsh as the Claimant's domestic partner. Mr Walsh is effectively wearing 'two hats', as a consultant and as the Claimant's domestic partner. The issues relating to Mr Walsh acting as a consultant do not meet the criteria of 'non-pecuniary disadvantages'. Mr Walsh submitted an invoice and was paid by the Claimant for these services. They formed part of the Claimant's claim.
   3. The acquisition is a partial acquisition that acquired approximately 2.5 percent of the 113 hectares of the subject land. The Claimant's ability to remain on the land indefinitely has not been diminished as a result of the acquisition. The Claimant may choose to move off the land to realise the development potential of the land. However, the Claimant is not required to move off the land as a result of the acquisition.
   4. The area of land acquired in the north western portion of the subject land directly impacted the front entrance and driveway access to the Claimant's house, and was within a couple of hundred metres of the house itself. The impact on the Claimant and her family at the main access point to the subject land is outlined in Mr Walsh's evidence. This includes the disruption to day to day living over a one and a half year period, and the disruption in access to the Claimant's property. There was also stress occasioned by disrupted accommodation of farm animals and fear for their safety.
   5. Mr Walsh's gave oral evidence that the changed amenity of the subject property in the after scenario with the railway line in close proximately may result in the family moving off the land earlier than anticipated. Mr Walsh's witness statement outlines at paragraph 8 the Claimant's intention was to continue to operate the primary production business until at least 2018. It is noted that the financial impact of the RRL on the subject land in the after scenario has been compensated in the reduction or difference in market value in the before and after scenario pursuant to Section 41(3) of the Act.
   6. Notwithstanding the absence of direct evidence from the Claimant, it is clear that she and her family have suffered anxiety and stress as a result of the acquisition, and of course stress suffered by the Claimant's family will transmit to the Claimant herself.
6. In these circumstances the Tribunal considers a lump sum of $100,000 for solatium is an appropriate amount to compensate for the intangible consequences of the acquisition, being the inconvenience, disruption and distress of the whole process.
7. The second stage requires the Tribunal to determine whether the award of solatium exceeds the 10 percent cap imposed by s. 44(1).
8. In this case the market value of the claimants land has been agreed at $5.5 million. At first glance the award for solatium is well within the 10 percent cap, being just under 2 percent. However, the Authority argued that the 10 percent cap must be applied to the value of the land actually acquired by the Authority, that is the 2.878 hectares acquired for the railway project. The value of this strip has been agreed between the valuers at $748,414.00. It was said that the balance of the agreed market value, which is attributable to severance, is to be disregarded.
9. Counsel for both parties referred to what was said to be a divergence of authority on this point between decisions of the Supreme Court in Love v Roads Corporation (2013) VSC and the Tribunal in Heislers v Melbourne Water Corporation (2014) VCAT 632, on the one hand, and decisions of the Supreme Court in a number of cases and the most recent decision of the Tribunal in CRG Nominees Pty Ltd v Department of Economic Development, Jobs, Transport and Resources [2015] VCAT 632, on the other hand. The debate is outlined in some detail in CRG Nominees at paragraphs [71] - [89] and there is no need to repeat it here.
10. It is instructive to recall the question frequently asked by Kirby J, recently retired from the High Court, which is:

1. In this instance the statute says it all. The statute is quite clear and there is no need to go beyond it. Section 44 refers to the "market value of the land" as the determinant of the cap. In the case of a partial acquisition, which is this case, s. 41(3) provides:

... the market value of the acquired interest is the difference between the market value of the interest before the acquisition and the market value of the interest after the acquisition.

This must be the market value referred to in s. 44 of the Act.

1. The difference referred to in s. 41(3) comprehends both the value of the land actually acquired, that is, the 2.878 hectares, and any diminution in the value of the balance of the land as a result of severance. That diminution is obviously reflected in the after value of the land.
2. It is artificial and antithical to the scheme of the legislation to attempt to apportion that difference between the market value of the land actually acquired and diminution in the value of the balance of the land due to severance. What has to be valued is the whole of the land before the acquisition and the whole of the land remaining after acquisition. The difference is the market value for the purpose of the Act, including s. 44.
3. This analysis is consistent with basic principle. In Murdesk v Roads Corporation (2006) VSC 363 Osborn J said at paragraph 26 with reference to s. 41(3):

This sub-section requires the assessment of market value in the present case to be undertaken by way of a "before and after" analysis. A before and after analysis will embrace not only the loss of the value of the land acquired but also the effect of the acquisition upon the value of the balance. Loss attributable to severance as defined in the LAC Act is thus embraced by the before and after analysis (at least insofar as the notion of severance applies to the balance of the acquired land).

1. His Honour expressed the same sentiment in Love at paragraphs 86 - 87 as did Gobbo J in R K Morgan Holdings Pty Ltd v Melbourne and Metropolitan Board of Works, supra at p. 114.
2. If further support is required it is to be found in a comparison between the current s. 44 and its legislative predecessor, s. 11B(1)(a) Lands Compensation Act 1958.
3. Paragraph (a) of the sub-section provided:

(a) The compensation shall be based upon the market value of the lands at the time that the notice to treat was given together with such additional amount not exceeding ten percent of the market value of the lands required by the Minister as the Minister thinks just to offer by way of solatium because of the compulsory nature of the acquisition of the lands.

1. The specific reference to "the lands required by the Minister" adds significant weight to an argument that the cap is to be set by reference to the value of the land actually acquired. The legislation makes no reference to a "before and after" valuation in the case of a partial acquisition. Diminution in value due to severance is implicitly excluded from the calculation of the 10% cap because it is unrelated to "the lands required by the Minister".
2. It must be concluded that in changing the legislation the legislature intended a different and a more broadly based formula for the calculation of the cap.
3. The Tribunal concludes that the amount it considers appropriate to be awarded for solatium is well within the cap.

1. In relation to matters that have been agreed between the parties and which were the subject of debate during the hearing the Tribunal determines that the Claimant is entitled to compensation as follows.

(a) Market value of the land acquired assessed in $5,500,000

(i) replacement of masonry wall and gates $113,329.80

1. In addition interest is payable under Part 6 of the Act to be agreed between the parties or in default of agreement determined by the Tribunal.
2. As mentioned a final determination of the claim cannot be made until the outstanding claim relating to capital gains tax has been agreed or determined by the Tribunal. All questions of costs can be addressed at that stage.

[2] In that case a refusal falling within the terms of s 98 of the P&E Act. In this case an acquisition.

[3] Commissioner of Succession Duties (SA) v Executive Trustee and Agency Co of SA Ltd [1947] HCA 10; (1947) 74 CLR 358, at 374; Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547, at 565.