Smith v Minister for Home and Territories [1920] HCA 1

1906 (No. 13 of 1906), secs, 28, 29, 31 - The Constitution (63 & 64 Vict. c. 12), Pree . sec. 51 (XXxxt.). 18-22, ' 25° 29; Oct. 6, ad

_ Pursuant to the powers conferred by the Kalgoorlie to Port Augusta Railway 7,9, 10, 13.

_ Act 1911-1912 and the Lands Acquisition Act 1906 the Commonwealth entered by Ser 27- ' _ upon certain Crown lands in South Australia which had been leased, and took Fe 1 s eee a 'therefrom large quantities of water for the purposes of the railway, 'terre :

__ Held, that the compensation payable to the lessees of the land in respect of Powers J. the water taken should be based on the value to the lessees, of the water

• either for use or sale, at the time it was taken, and irrespective of whether

they were then using the water, but without regard to the special value of

the water to the Commonwealth for the purposes of the railway.

Sec. 19 of the Kalgoorlie to Port Augusta Railway Act 1911-1912 gives power _ to the Commonwealth to acquire lands for the purposes of the railway, and "provides that the value of any lands acquired by compulsory process under the Lands Acquisition Act 1906 " shall be assessed according to the value of 'the lands on the nineteenth day of September one thousand nine hundred Held, that, in valuing lands so acquired, the value should be taken as the at that date with all its advantages and potentialities then existing and ut regard to the state of the land at the time of acquisition.

_ For the purposes of sec. 28 (1) (a) of the Lands Acquisition Act 1906 the ue of land acquired should bo taken to be its value to the claimants, that is, what a willing and prudent purchaser would have paid, and a not unwilling

seller would have accepted, for the land with all its potentialities and advan- tages, including the use of it and the right to use it for the most advantageous purpose, at the relevant date.

See. 28 (1) of the Lands Acquisition Act 1906 provides that, in determining the compensation under the Act, regard shall be had to (inter alia) " (c) the enhancement . . . in value of other land adjoining the land taken or severed therefrom of the person entitled to compensation by reason of the carrying out of the public purpose for which the acquired land was acquired."

Held, that such enhancement is not limited to that which is caused by the acquisition of the land acquired, but includes that which is caused by the carrying out on the acquired land of the public purpose for which it was acquired.

Henry Teesdale Smith and Simon Matheson were lessees under the Pastoral Act 1904 (S.A.) for a term of forty-two years commencing on 19th August 1908 of certain Crown lands in South Australia, about 2,983 square miles in area. Pursuant to the powers contained in the Kalgoorlie to Port Augusta Railway Act 1911-1912, the Minister for Home and Territories of the Commonwealth constructed a railway which passed through portion of the land included in the lease, Pursuant to the powers conferred by that Act and the Lands Acquisition Act 1906, persons authorized by the Minister on various dates in the year 1915 before 31st July entered upon other portions of the leased land and (inter alia) made bores and constructed wells for the purpose of ascertaining the suitability of such land for the public purpose of supplying water for and in connection with the construction and working of the railway, and at the expense of the Commonwealth took from certain wells and bores and used for the purposes of the railway a large quantity of water. On 10th and 31st July 1915 and 6th April 1916 the' Commonwealth, under the powers conferred by sec. 15 of the Lands Acquisition Act, acquired by compulsory process, for the purposes of the railway, certain portions of the leased land. The lessees made claims against the Commonwealth for compensation under the Acts mentioned, in respect both of the water and of the land taken, their claim in respect of the water amounting to £4,747 14s. 2d. and that in respect of the land taken amounting to £102,934 Is. 7d. The Minister offered the lessees £695 in respect of the former claim and £3,250 in respect

the latter. These offers the lessees refused, and, the Minister H- ©. or A.

having instituted proceedings in the High Court under sec. 38 of ee

| Lands Acquisition Act to determine the claims for compensation, Ix xe STH e parties agreed to the claims being determined by the arbitration yy...

MinisTER a Justice of the High Court. The arbitration was accordingly rem ae wd by Powers J. "TORIES.

Powers J., in delivering the reasons for his award, dealt with Feb. 1. he legal questions raised as follows : - 'Before referring to my finding of facts on the evidence, I think it to refer to some at least of the important legal questions in the case, and to state my decisions on them. estion 1. - What should be considered in valuing the water cen by the Government under parliamentary authority, but before lands were acquired? 'The first legal question raised was as to the value of the water taken by the Government before the uisition was to be ascertained by me - namely, whether the value the constructing authority was to be the value, or whether the ar se for which it was to be used was to be considered in assessing value, or whether it was to be the value to the owner of the lands mm which the water was taken, apart from any special value to constructing authority for the public purpose, the railway. question is very important to both parties - especially to the s - because, if I took into consideration the special value e water to the Government for the purpose of the railway, I allow far more as compensation than I can do if I assess the as the value to the owner, apart from that special value. It dmitted by the reference that the taking of the water was duly "pursuant to the powers conferred on the Minister by it," and that "the water was taken for a public purpose in connection with the construction and working of the said yy." It was also admitted during the hearing of the case

H.C. or A. that the water was necessary to enable the Minister to construct rea" and maintain the railway. The reference expressly requires me, In re Smrru in determining the amount of compensation to which the claimants Maes are entitled under the first claim, to determine the amount under ror Home the principles set forth in sec. 31 of the Commonwealth Lands

anp TERRI- torres. Acquisition Act 1906 [which his Honor read]. I must, therefore, grant by my award full compensation for damage done, including the damage done by the Minister and his officers, temporary or per- manent, and the value of the things taken for carrying out the -

public purpose, but I must also recognize that the acts done were

Counsel for the claimants claimed, at the opening of the case, that the value of the water must be taken to' be the value of the water to the Commonwealth (the constructing authority) for the purpose of constructing and maintaining the railway. Counsel, referring to the claim for water taken, said : - "It" (the value) "must include as a factor the value for the purpose for which the Government obtained it. . . . It is not the value of what you take, but the purposes for which it is taken. . . . It would have to be taken into consideration that the thing taken was of great

value for the purposes intended and that it could not have been got otherwise." After the case closed counsel for the claimants, in his closing address, did not go quite so far as that, but contended that the value of the water was really fixed by the sale of water to the railway authorities prior to the taking of the water from the wells _ sunk by the Government; but counsel also contended that the value of the water to the Government for the purpose of the railway _

should be considered in ascertaining the value, if it was not deter- mined on the price paid by the Government for other water for the railway. Counsel for the Commonwealth contended that the "value" under the Act must be the value to the claimant as owner of the land, apart from any special value of the water to the construct- ing authority only for the purpose of the railway (in this case the Commonwealth). Several cases were cited by counsel in support of their respective contentions.

Whether the purpose for which the water was taken must be considered or not in assessing compensation depends on whether

taking was by a wrongdoer or wilful trespasser, or whether the was authorized or in error. The case of Whitwham v.

" the purpose for which land was used " ought to be taken into ccount in this case; but in that case the defendant was a trespasser a wrongdoer, and the principles of the "* way-leaves" cases applied. Here the Minister acted under parliamentary author- and cannot be treated as a trespasser or wrongdoer. The law in such a case was clearly laid down in the Countess Ossalinsky Case, een's Bench case, which is unreported, but the judgment in ch is set out in Browne and Allen's Law of Compensation, 2nd ed., p. 659. In that case Grove J. said, at pp. 662 : - That would bea objection to the award, and a fatal one, because, as far as my e perience goes, it has been the invariable practice sanctioned by the

er is under parliamentary powers with reference to what the ities who are taking the land under compulsory powers are obliged ir necessities, or what they suppose to be their necessities, to for it there - that it is to be excluded from consideration, and the way it can or ought to be put forward at all is as a possible illus- tion of the probability of the land being useful for such a purpose. u must not look at the particular purpose which the defendants 'the case before the arbitrator are going to put land to when take it under parliamentary powers or undertakings for any purpose, but you may possibly use it as an illustration to ticipate or to answer an argument that the schemes thrown out e plaintiff in this case are going to enhance the value of the ind are not visionary, but are schemes with certain probability in m. I donotsee any objection to that being used as an argument."

wal in subsequent compensation cases. Where the taking is at by a trespasser, but under parliamentary authority, I hold that value to be ascertained is the value of the water to the owner at time it was taken (see In re Lucas and Chesterfield Gas and

Vestminster Brymbo Coal and Coke Co. (1) was quoted to show Ix xe Surra

Water Board (1); Livingstone v. Rawyards Coal Co. (2); Cedar Rapids Manufacturing and Power Co. v. Lacoste (3) ; Fraser v. City

In ne Surrn of Fraserville (4) ). Every element of value must, however, be taken

into consideration so far as-it increases the value to the owner. The Court or Arbitrator should also consider the most advantageous use the water taken could be put to by the owner, at the date in question, so far as it would increase the value to the claimants

• apart from the value to the constructing authority (Minister for Home Affairs v. Rostron (5) ). In Livingstone's Case the value to the owner of coal taken had to be paid, although the land was too small to warrant the owner working the land himself for coal. The coal had a value for sale to the adjoining owners, and had to be paid for. In that case Earl Cairns L.C. said (6) : - '* Of course the value of the coal taken must be the value to the person from whom it was taken. . . . The question is, what may fairly be said to have been the value of the coal to the person from whose property it was taken at the time it was taken." Lord Hatherley and Lord Blackburn, in separate judgments, concurred in that view.

The value of the water taken in this case, as it was taken from land on which no wells had been sunk by the claimants, could well be taken as what the water was worth to the owner for the most advantageous purpose at the time or for sale, less the cost of obtain- ing it. See Eden v. North-Eastern Railway Co. (7). In that case it was held that the compensation payable by a railway company under sec. 78 of the Railway Clauses Consolidation Act 1845, in respect of such mines as they require to be left unworked, is the full value of the minerals required to be left unworked, namely, what the minerals would have sold for if worked, less the cost of working thereof. Lord Atkinson said (8) : - ' On what principle, then, is compensation to be paid by the railway company? If the minerals had not been leased and had been removed innocently, that is, removed without the commission of any tortious act, the owner would have been entitled to obtain as compensation the value of these

(1) (1909) 1 K.B., 16, at p. 29. (5) 18 C.LLR., 634. (2) 5 App. Ca (6) 5 App. at p. (3) (1914) A.C. (7) (1907) A.C., 400.

insitu. If, as in this case, there be no physical difficulty H. C. or A. the way which would render the working, mining, and raising of aa hem not reasonably practicable, then a fair test of that value would 1x the price the minerals would fetch as and when won and raised, yyjc;erer the cost of working the mine, winning and raising them." I do ¥0* a find anything in the circumstances of this case, under this sub- ToRt®s. ion or in the authorities quoted, to justify me in valuing the powers s. taken at any sum beyond the value of the water taken to the

nimants as lessees of the land from which it was taken at the time

was taken - as lessees exercising their full rights to the use or

sale of the water in question whether using it at the time or not -

but not including the special value of the water to the constructing

thority only for the public purpose, the railway. I propose to

to the question of assessing damages caused by the Minister

e acquisition, no question was raised as to the liability of the

ter to pay full compensation for whatever damage the claimants

by or through any of the acts admitted in the reference

tion 2. - Should the value of the land in question in this case

sessed according to its value in September 1911 or in the state

at the time of the acquisition in 1915? The land in question

not acquired until July 1915, and it was contended that,

gh the Kalgoorlie to Port Augusta Railway Act 1911-1912, by

19, declared that '' the value of any lands acquired by compul-

Bry process under that Act" (the Lands Acquisition Act 1906)

ll be assessed according to the value of the lands on the

"' T was bound to assess the value of the land as in its 1915

(ie., with the well, water and equipment) but according to

911 value (7.e., with no additional value owing to the railway

r }). The first and second parts of that contention appear to

ne to be directly opposed to each other, because the 1915 state of

ne land, including the wells, proved water supply, &c., was entirely

ving to the carrying out of the public purpose, the railway, and

H.C. or A. the wells on the land acquired, and at the expense of the Govern- tis ment. [His Honor here read sec. 19.] The question whether I am In re Sarre " to assess the value of the land in its 1915 state immediately before | Miawerer the acquisition" is a very important one for both parties in connection rs He '1. With the claim for the Kingoonya acquisitions, because (1) before vorrs. the actual acquisition at Kingoonya the Government had spent. powers s, hundreds, if not thousands, of pounds in boring and sinking wells, and providing pumping machinery, tanks, &c., on the land they

proposed to acquire, if water was discovered; those improvements

were, as is claimed, at the date of the acquisitions improvements

effected while the land was the claimants' - they were, however,

effected by the Government under the authority of an Act of Par-

liament and admittedly, by the submission, for carrying out the

public purpose, the railway ; (2) if the value is to be the value of

the land at the date of acquisition plus improvements made by the Government after 19th September 1911 and before the acquisition,

it would include thousands of pounds spent on the lands used

for the railway in constructing the railway through the claimants' leasehold lands (including the necessary stations, buildings, works and railway plant), which lands have not yet been acquired by the Government.

Before deciding whether in valuing the land I can consider the facts that the land was so improved before acquisition and was proved in 1915 before acquisition to have an underground water supply, I must decide whether I am to value the land under sec. 19 as of the value on 19th September 1911 (1) in the state it then was with all its existing advantages and its potentialities, or (2) as it was at the date of acquisition, or (3) as it was in 1915 with any increased value proved to have been attached to it in 1915 by the expenditure of Government money expended for the purpose of the railway in 1915 but prior to the actual acquisition.

The evident intention of the section, and of similar sections in other Acts, was to prevent claims on the public funds by owners of land for the increased value which the construction or projected construction of railways generally, or works in connection there- with, usually caused to lands through which a railway is constructed. A similar question, under another Act, was decided in May last by

for Home and Territories v. Lazarus (1). In that case

the value of, the land, and that, as the goodwill was attached the land, the value of the goodwill on 8th October 1908, date fixed by the Act there in question as that in respect of which the value of the land should be assessed, not the value in March 916, the date on which the land was acquired by the Commonwealth, to be the value considered in assessing compensation. Under e Act in question in that case the owner of lands compulsorily juired was protected to the extent of entitling him to the value 'his interest in permanent improvements on the land at the date 'the acquisition. No such proviso appears in the Kalgoorlie to Augusta Railway Act 1911, In Spencer v. The Commonwealth (2) e statute in question fixed Ist January preceding the acquisition is the date on which the value was to be ascertained. Isaacs J., in that case (3), said : - All circumstances subsequently " (to Ist juary 1905) " arising are to beignored. Whether the land becomes e valuable or less valuable afterwards is immaterial. Its value fixed by statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening er the date named, must be alike disregarded. The facts existing Ist January 1905 are the only relevant facts." All the members the Court in that case assessed the value as on Ist January 1905, not at the date of acquisition. _ It appears to me that the value in this case is not to be the value the land at the date of the acquisition: sec. 19 was passed to ent that. It also appears to me equally impossible to assess the value of the land on 19th September 1911 on some fact about it not ined until 1915, and then only by increased expenditure for purpose of the railway. Under sec. 29 of the Commonwealth Acquisition Act 1906 I am expressly required to assess the lue without any reference to the increase in value arising from the oposal to carry out the public purpose. I hold that I am required t this submission and the Kalgoorlie to Port Augusta Railway

(I) WGLR,, 159. (2) 5C.LR, 418, 2. (3) 5 CLR. at p. 440.

High Court (under a somewhat similar clause) in the case of H.C. oF A.

it was held that the goodwill of a hotel attached to, and added 1s pape

In RE SmitH AND May: ror HomE Anp TERRI- TORIES.

Act to value the land acquired subsequently to September 1911 at its value with all its existing advantages and all its potentialities as on 19th September 1911.

Question 3. - What is the correct method of assessing the " value" of the land under sec. 28 (1) (a) of the Lands Acquisition Act 1906 ? The most important legal questions raised have been as to the method or basis upon which I am to determine the value of the land acquired. As I have mentioned, the written consolidated claim was based solely on estimated capitalized expected profits for thirty- three years, principally from land alleged to have been severed by the acquisition from the only valuable underground water supply in that district. The evidence as to value tendered by the claimants at the hearing was chiefly, based on estimated capitalized expected profits for ten years assuming the claimants spend £51,000 (not yet expended) on new improvements including the reticulation of Kingoonya block. Counsel for the Commonwealth contended, and I think rightly, that the evidence submitted as to capitalized expected profits could only be taken into consideration by me as an element in assessing compensation, and only to the extent I thought it safe to adopt the evidence as to probable profits.

The rea] carrying capacity of pastoral country must in all cases be taken into consideration as a very important element in valuing the property. It was held in Fisher v. Deputy Federal Com- missioner of Land Tax (N.S.W.) (1) that, "in ascertaining the unimproved value of a pastoral property which has been improved and worked for some years, the only practical method in the majority of instances is to begin by finding the fair carrying capacity of the land, taking into consideration all existing improvements." This question of adding expected capitalized profits to the value of the land was fully dealt with by the Privy Council in the case of Pastoral Finance Association Ltd. v. The Minister (2); in which case Lord Moulton, in delivering the judgment of their Lordships, said (3): - Their Lordships are of opinion that this direction is seriously at fault. That which the appellants were entitled to receive was compensation not for the business profits or savings

(1) 20 C.L.R., 242. (2) (1914) A.C., 1083. (3) (1914) A.C., at pp. 1088-1089.

hich they expected to make from the use of the land, but for the e of the land to them. No doubt the suitability of the land

to them, and the prospective savings and additional profits which it could be shown would probably attend the use of the land their business furnished material for estimating what was the al value of the land to them. But that is a very different thing saying that they were entitled to have the capitalized value these savings and additional profits added to the market value the land in estimating their compensation. They were only itled to have them taken into consideration so far as they might

tical form in which the matter can be put is that they were ntitled to that which a prudent man in their position would have willing to give for the land sooner than fail to obtain it. Now evident that no man would pay for land in addition to its et value the capitalized value of the savings and additional its which he would hope to make by the use of it. He would 'doubt reckon out these savings and additional profits as indicat- g the elements of value of the land to him, and they would guide in arriving at the price which he would be willing to pay for land, but certainly if he were a business man that price would not be calculated by adding the capitalized savings and additional ts to the market value."

Counsel for the claimants did not, so far as | understood them, ndon the view that I had in some way to consider the purpose which the land was taken, or the view that the claimants were tled to have the value to the Government for the public purpose lered by me in assessing the value of the land. I have pre- ly referred to the class of cases in which the purpose for which land or other property is taken can be taken into consideration ; but as the land in this case was compulsorily acquired under parlia- nentary authority, I hold that the purpose for which it was taken,

ration in assessing the compensation to be paid to the claim- (see cases referred to under Question | as to the value of the

wr the purpose of their special business affected the value of the 1x payate

Ty rE SmirH AND MINisTER ror Home AnD TERRI- TORIES.

water taken). The judgment in the Cedar Rapids ce. Co.'s Case (1) also deals with the question. In that case it was held " that in assess- ing the compensation payable to the respondents it was not proper to treat the value to the owners of the lands and rights as a proportional part of the value of the realized undertaking which the appellants were proposing to carry out ; that the proper basis for compensation was the amount for which the respondents' lands and rights eould have been sold had the appellants with their acquired powers not been in existence, but with the possibility that that company or some other company or person might obtain those powers." In arriving at the value of the land I am bound to follow the principles laid down by the Privy Council and by our own High Court of Australia in compulsory acquisition cases.

Lord Buckmaster, in delivering the judgment of their Lordships in one of the latest cases dealing with the principles regulating the assessment of compensation where lands are compulsorily acquired,

namely, in Fraser v. City of Fraserville (2), said : - " The principles which regulate the fixing of compensation of lands compulsorily acquired have been the subject of many decisions, and among the most recent are those of In re Lucas and Chesterfield Gas and Water Board (3); Cedar Rapids Manufacturing and Power Co. v, Lacoste (1), and Sidney v. North-Eastern Railway Co. (4). The principles of those cases are carefully and correctly considered in the judg- ments the subject of appeal, and the substance of them is this: that the value to be ascertained is the value to the seller of the property in its actual condition at the time of expropriation with all its existing advantages and with all its possibilities, excluding any advantage due to the carrying out of the scheme for which the property is compulsorily acquired, the question of what is the scheme being a question of fact for the arbitrator in each case. It is this that the Courts have found that the arbitrator has failed to do, and it follows that his award cannot be supported." In that case the award in question was set aside because it was based upon the value to the buyer and not to the sellers. Sec. 19 of the Kalgoorlie to Port Augusta Railway Act fixes the date in this case on

9th September 1911 instead of "at the time of expropriation." H.C. oF A. er Moulton L.J., in Lucas's Case (1), said : - " The principles spat ypon which compensation is assessed when land is taken under Ix ne Sarre mpulsory powers are well settled. The owner receives for the ainsi

Bs . . * . 5 = = vor Home lands he gives up their equivalent, i.c., that which they are worth io tae

to him in money. His property is therefore not diminished in Tontes. amount, but to that extent it is compulsorily changed in form. But powers J. "the equivalent is estimated on the value to him, and not on the value o the purchaser, and hence it has from the first been recognized an absolute rule that this value is to be estimated as it stood before the grant of the compulsory powers. The owner is only _ to receive compensation based upon the market value of his lands as they stood before the scheme was authorized by which they are put to public uses. Subject to that he is entitled to be paid the price for his lands, and any and every element of value which y possess must be taken into consideration in so far as they

ase the value to him. " Lord epunaden, in sraphbeta ti the

• • "' For the present purpose it may be mifficient | to state two tie: propositions : - (1) The value to be paid for is the value to the owner as it existed at the date of the taking, not the value to the

taker. (2) The value to the owner consists in all advantages which _ the land possesses, present or future, but it is the present value alone of such advantages that falls to be determined." In the e of Lords case of Commissioners of Inland Revenue v. Glasgow d South-Western Railway Co. (3) Lord Halsbury referred to the "value" as " the value under the circumstances to the person who compelled to sell," and said that " the thing which is to be ascer-

ned is the price to be paid for the land - that land with all the otentialities of it, with all the actual use of it by the person who ds it." In Pastoral Finance Association Ltd. v. The Minister (4) was held that the compensation payable to the owner of land sumed by the Government under the Public Works Act 1900 of New South Wales is the amount which a prudent man, in the position the owner, would have been willing to give rather than fail to

(3) 12 App. Cas., 315, at p. 321. (4) (1914) A.C, 1083.

In the High Court case of Spencer v. The Commonwealth (1) it was held that where land is compulsorily acquired, in assessing the

Is ne Suir Value of the land resumed under the Act the basis of valuation

should be the price that a willing purchaser would at the date in question have had to pay to a vendor not unwilling, but not anxious, to sell. Griffith C.J., in his judgment in the case, said (2) : - "It may be that the land is fit for many purposes, and will in all proba- : bility be soon required for some of them, but there may be no one actually willing at the moment to buy it at any price. Still it does not follow that the land has no value. . . . The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together." Barton J. said (3): " A claimant is entitled to have for his land what it is worth to a man of ordinary prudence and foresight, not holding his land for merely speculative purposes, nor, on the other hand, anxious to sell for any compelling or private reason, but willing to sell as a business man would be | to another such person, both of them alike uninfluenced by any consideration of sentiment or need." Isaacs J. (4) refers to the value as the fair price of the land which a hypothetical prudent purchaser would entertain if he desired to purchase it for the most advantageous purpose for which it was adapted, and says : - " To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by volun- tary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would over- look any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the

present demand for land, and the likelihood, as then appearing H. ©. or A.

persons best capable of forming an opinion, of a rise or fall for ee

reason soever in the amount which one would otherwise be Iy xe Ssara

to fix as the value of the property." See-also Minister yy:sreren

Home Affairs v. Rostron (1); in which case Spencer's FO® eel

(2) was applied, and it was held that, "in determining the Tontes.

amount of compensation payable under the Lands Acquisition Act powers 3. 906, the Court should consider the most advantageous purpose

or which the land, was adapted at the date in question in so far

such purpose would increase its value to the claimant, and assess

It was contended that the fact that the land or water was not

put to any or the best possible use by the claimants at the time it

taken or acquired must not in itself be considered in assessing

e value. I hold that that contention is correct. In Trent-

ton v. Barbados Water Supply Co. (3) certain streams of

er had been extracted from the appellant's property by a water

mpany acting under the Water Supply Act 1886, and it was held

'that the compensation due to the appellant included the value

his proprietary interest therein, and was not limited to the amount

0 pecuniary benefits obtained by past user thereof in disregard of

ible benefits in the future." Lord Halsbury, in delivering the

ments of their Lordships, said (4) : - '' Their Lordships are of

pinion that the question was, what was the value of the interest

the appellant in the streams, it being conceded that in the exer-

e by the respondent of the powers conferred upon it by the Act,

hose streams had been abstracted, and that the appellant had been

ived of the power of exercising the rights which he had up to

that time possessed in respect of them. That is 'damage or loss'

within the meaning of the Act. Though he never had up to that

ime obtained one farthing for the use of the streams, and might

r have made any use of them, nevertheless, the damage or loss

hich he sustained was, that he was deprived of the power of using

_ I propose in deciding upon " the value " to follow the principles

7 a (3) (1893) A.C., 502. SCLR., 418. (4) (1893) A.C., at p. 504.

referred to in the cases mentioned, and to consider the value of the land to the claimants, and what a willing and prudent purchaser

Iv xe Sorx would have paid, and a not unwilling seller would have accepted,

for the land acquired with all its potentialities and its existing advan- tages including the use of it and the right to use it for the most advantageous purpose on 19th September 1911; subject in this case to the fact that the claimants are lessees only and claim only as lessees. zi

Question 4. - Is the enhancement referred to in the reference, and in sec. 28 (1) (c) of the Lands Acquisition Act 1906, to be deter- mined in this case by the enhancement caused only by the aequisi- tions in question, or by the enhancement caused by the construction and use of the railway including the works carried out on the lands in question ? Under the submission I have to determine the com- pensation in accordance with the principles set forth in secs. 28 and 29 of the Commonwealth Lands Acquisition Act 1906 and sec. 19 of the Kalgoorlie to Port Augusta Railway Act 1911-1912.

Claimants' counsel contended that I cannot find any enhance- ment in value of the other lands of the claimants by the acquisi- tions in question. The lands on which the railway has been con- structed have not yet been acquired. It is contended that the taking of the land for water for the railway construction cannot in itself possibly enhance the value of the rest of the land. The Government's answers to that are (1) that the acquisition of the land and discovery of a permanent and large supply of water on the land by wells and boring did enhance the value of the adjoining lands ; and (2) that the parties have agreed by the submission that I am to determine the compensation in accordance with the prin- ciples set forth in sees. 28 and 29 of the Lands Acquisition Act 1906, and that sec. 28 provides that I am to set off the amount by which I find that the other land of the claimants adjoining the land taken are enhanced " by reason of the carrying out of the public purpose for which the acquired land was acquired" ; not the enhancement caused only by acquiring any particular piece of land. It is also admitted by the parties in the submission that the acquisition and all other acts complained of were authorized and were for "the public purpose " of the said railway.

n Harding v. Board of Land and Works (1) it was held that the H. ©. or A. 'enhancement in value" (under the Victorian Act in question) mR ludes that which arises from the use as well as the construction Ix xe Sucre the railway." In the Commonwealth Act the words used are yjerren "by reason of carrying out the public purpose." In that case the pers aa y Council held that the enhancement would only be set off Tonres. nst the damages sustained and not against the value of the land powers 3. en, but the Commonwealth Act expressly provides that it must set off against both the value and damages. I hold that I am quired to find to what extent the rest of the adjoining lands of claimants is enhanced in value by reason of carrying out the lic purpose for which the land in question was acquired, namely, the construction and use of a railway from Port Augusta to Kalgoorlie. Counsel for the claimants also during the case claimed that as the titution only gave the Commonwealth power to compulsorily uire land "on just terms" (sec. 51 (xxxr.) ) it was not within the power of Parliament to authorize the Commonwealth to take without paying for them even if a railway did enhance the e of other lands adjoining owned by a claimant to an nt exceeding the value of the lands taken. As arbitrator I assume that an Act is unconstitutional or declare it to be and in this case I cannot regard the section as unjust, because 'the reference both parties have compelled me in assessing com- tion to do so on the principles laid down in sec. 28, which es that the enhancement shall be set off against the value of lands taken, Under the reference it was provided that the arbitrator might t any stage of the proceedings, or in and by his award, and should, . directed. by the High Court of Australia, state in the form of a case for the opinion of the said Court any question of law in the course of the reference. I have not been directed by Court to state any special case, nor have I been requested the parties to state any special case. As no request has been ade to me to state a case, and the legal questions have been ably

H.C. or A. and fully argued by counsel for both parties, I do not propose to

meeag put the parties to the expense of a special case. Ty RE Sane [His Honor then dealt with the facts of the case and awarded

Pre to the claimants £945 in respect of the water taken, and in ror Home addition the value of the land taken.)

AnD TERRI- TORIES. Solicitors for the claimants, Symon, Browne, Symon & Povey. (one Aka Solicitor for the respondent, Corton H. Ceti Crown Solicitor for Ee tide the Commonwealth. aan We ie, Tey oly LR We as ) patie ney Big Mn eke? waifbo 316 Arba v Sicist BL tee 5 Fol pits

a 4 ICL G0 ie Wag jamesv Nar Foorball HairStudio RAB. Fea et Char Py tidy Few ae : Argel, fas ee = Ea BER Bary? ee Grea i A493

ield 165 '$00 mith v WP se {HIGH COURT OF AUSTRALIA.} W. & A. McARTHUR LIMITED. e PLAINTIFF ; AGAINST

H.C. or A. Constitutional Law - Powers of Parliament of State - Freedom of inter-State trade and commerce - Validity of State legislation - Prohibition of sales of goods above

ey certain price - The Constitution (63 & 64 Vict. c. 12), secs. 51 (1.),92 - Profiteering Mernourne, Prevention Act 1920 (Qd.) (10 Geo. V. No. 33), secs. 3, 12. Cee The Profiteering Prevention Act of 1920 (Qd.) provides, by sec. 12 (1), that it shall be unlawful for any trader whether as prineipal or agent to sell or agree SYDNEY, to sell or offer for sale any commodity at a price higher than a price declared Nov. 29. in the Queensland Government Gazette; and, by sec. 3, defines "trader" as cee Ay including " the agent" of any person carrying on the business of selling any ee ee commodities. Rich and Starke JJ. 'The plaintiff, a Sydney company, had its travellers in Queensland, and they

sold calicoes, &c., at a price higher than the declared price for delivery in

Queensland. Held, by Knox ©.5., Isaacs, Higgins, Rich and Starke JJ. (Gavan Duffy J. dissenting), that so far as regards the sales by the travellers of goods stipulated