Spencer v. Commonwealth

5 CLR 418

(Judgment by: Griffith CJ)

v. Commonwealth

High Court of Australia

Griffith CJ
Barton J
Isaacs J

Subject References:
Resumption of land

Legislative References:
Property for Public Purposes Acquisition Act 1901 (Cth) No 13 - the Act

Hearing date: PERTH 13 November 1906; 14 November 1906; 15 November 1906; 16 November 1906; 22 November 1906; 23 October 1907; 24 October 1907; 25 October 1907; 29 October 1907;
Judgment date: 29 October 1907


Judgment by:
Griffith CJ

This is an action brought under the provisions of the Property for Public Purposes Acquisition Act 1901 (No. 13 of 1901) to recover compensation for land taken by the defendant for public purposes. The land was in fact taken as a site for a fort. By s 6 of that Act land might be acquired by the publication of a notice in the Gazette. Persons claiming compensation in respect of any land so acquired were within a prescribed time to serve a notice on the Minister of the Department concerned and the Attorney-General (s 13). If a prima facie case for compensation was disclosed, the Minister was required to cause a valuation to be made of the land, and to inform the claimant of the amount of the valuation (s 14 (2)). If the claimant and the Minister did not agree as to the amount, the claimant might institute proceedings in the High Court in the form of an action for compensation against the Commonwealth (s 15), which was to be tried by a single Justice without a jury (s 16). In determining the amount of compensation the Justice was not to be bound by the amount of the valuation notified to the claimant (ibid). If judgment were given for a sum equal to or less than the amount of the valuation notified to the claimant, he was to pay the costs of the action unless the Justice otherwise ordered, but, if the judgment were for a sum one third less than that amount, the claimant was to pay the costs in any event (s 17). Either party might move for a new trial or to set aside the finding in accordance with the practice of the High Court (ibid). The Act did not contain any other special provisions as to procedure. In my opinion the direction that the proceedings were to be by action incorporated the general practice of the Court relating to actions, so far as no other practice is substituted.

The plaintiff by his statement of claim, after setting out the necessary facts showing his title to sue, claimed PD10,000. The defendants' defence was in the following words:"The defendants bring into Court the sum of PD3,086 1s. 2d. and say that it is enough to satisfy the plaintiff's claim." Accompanying particulars showed that that sum was made up of PD3,000 for the value of the land and PD86 1s. 2d. for interest at 3% from the date of acquisition to the date of payment, which was the rate prescribed by s 20 of the Act. The plaintiff simply joined issue.

Upon these pleadings the action was set down for trial before Higgins J., who, after hearing much conflicting evidence, found that the value of the land at the relevant date (1st January 1905) was PD2,250 only. He thereupon ordered that that sum with interest at the rate prescribed by the Statute should be paid out to the plaintiff, and that the residue should be paid to the defendant, and directed that judgment should be entered without costs. From this judgment the plaintiff appeals.

Two distinct questions are raised upon the appeal: (1) whether the plaintiff is entitled in any event to the whole of the money paid into Court, and (2) whether the learned Judge was wrong in assessing the value of the land at a sum not exceeding PD3,000. The first question depends upon the effect of the Rules of Court; the second depends partly upon the principles to be applied in estimating the value of the land, and partly upon the evidence in the case.

I have already pointed out that the ordinary practice of the Court is applicable to the action. By Order XVIII., Rule 1, a defendant in an action to recover a debt or damages may before or at the time of delivering his defence (or later by leave of the Court or a Justice) pay into Court a sum of money by way of satisfaction, "which shall, unless otherwise stated, be taken to admit the cause of action in respect of which the payment is made." Or he may pay money into Court with respect to any cause of action with a defence denying liability, in which case the money is subject to the specific provisions contained in Rule 6, one of which is that, if the plaintiff does not accept it in satisfaction, it remains in Court until the determination of the action, and is subject to the orders of the Court. If the defendant succeeds in the action the whole amount is to be repaid to him, and if the plaintiff recovers less than the amount paid in the balance is to be repaid to the defendant.

Rule 5 provides that when money is paid into Court the plaintiff may before joining issue accept it in satisfaction, in which case he may tax his costs up to that date, and if they are not paid within four days may sign judgment for them. The Rules do not contain any express direction as to the payment out to the plaintiff of money paid into Court either with or without denial of liability, but under Order XVII., Rule 3, which provides that when admissions of fact are made on the pleadings any party may at any stage of the cause apply to the Court or a Justice for such judgment or order as upon the admissions he is entitled to, it is clear that the plaintiff is entitled to ask for payment out to him at any time. If a formal order is necessary it is little more than formal, although, no doubt, the Court or a Justice might allow a defendant in a proper case to amend his defence or withdraw his notice of payment, but in the absence of such amendment I think that the plaintiff's right to the money paid into Court without denial of the cause of action is absolute, whatever may be the result of the action. This is in accordance with the view that was always accepted as to the effect of payment into Court before the statutory provisions of the Common Law Procedure Acts (see Archbold's Practice, ed. 1866, vol. 2, p. 1366).

In the present case the defence contained nothing to limit the effect of the payment into Court. It follows that the plaintiff's cause of action in respect of which the payment was made was admitted. No case was cited to us in which it has been expressly decided that the admission involved in a plea of payment into Court is an admission of liability to the full amount paid in, but in all the cases cited this seems to have been taken for granted. In any view the plaintiff became entitled to receive the money as soon as it was paid in, and nothing has since occurred to disentitle him to it, unless the finding of the learned Judge has that effect. The only issue for trial raised by the joinder of issue was whether the sum paid into Court was or was not enough to satisfy the plaintiff's claim. It was, therefore, not material to consider whether it was more than enough. If it was not enough, the plaintiff would be entitled to damages ultra, if it was, he was entitled to no more than he already had. It was suggested that the direction that the Justice should not be bound by the valuation notified to the claimant implies that he should not be bound by an admission on the record, but I am unable to accept this suggestion. I am, therefore, of opinion that the plaintiff is entitled to recover at least the amount paid into Court. In an ordinary case, if a plaintiff does not recover more than the sum paid into Court, judgment is given for the defendant, but the Statute appears to contemplate that there must be a formal judgment for the plaintiff in every case. I think, therefore, that the plaintiff is entitled to judgment for the sum paid into Court in any event.

I proceed to consider whether he is entitled to anything more. The evidence, as I have said, was conflicting, but the divergence was not so much with regard to facts as with regard to the point of view from which the question of value was regarded.

The land is situated at North Fremantle, within 100 yards of the ocean, and at a very short distance from the harbour. The area is more than six acres, and there is a railway line separated from it only by a road. Fremantle is the principal port of the State of Western Australia, and some persons naturally entertain a high opinion of its future prospects. The plaintiff's witnesses thought that the land in question, by reason of its situation, its height, and its exceptionally large area amongst a number of small subdivisions, had a prospective value as a site for a factory or some other enterprise requiring a considerable space. It was also one of a very small number of suitable sites for a fort. The defendants' witnesses on the other hand thought that the land was not fit for anything except subdivision into small allotments for workmen's dwellings, of which there were several in the immediate neighbourhood, and they estimated the value on the basis of the sum which they thought could have been realized for it in January 1905, if so subdivided. The learned Justice, in effect, accepted the view of the defendants' witnesses, or rather of those of them who put the lowest valuation on the land, and, if I rightly understand his judgment, applied his mind to the question of what the plaintiff could have realized by a sale of the land in January 1905, if he had then sold it.

It has often been pointed out that, when a cause has been heard by a Judge on oral evidence, a Court of Appeal is very reluctant to differ from him on a question of fact, especially when there is a conflict of evidence. And the same considerations apply whether the conflict is as to the actual facts, or as to a matter of opinion as to which it is material to weigh the relative values of the opinions of different witnesses. So far, therefore, as Higgins J. founded his judgment on the weight to be given to the opinion of the different witnesses as to relevant facts, I am not prepared to differ from him. I therefore accept the conclusion (though I doubt whether I should have arrived at it myself) that, if the land had been cut up and sold in small allotments in January 1905, it would not have realized more than PD2,250. I will assume also that he thought that at that date it would have realized more if sold in that mode than in any other. But I do not think that these facts conclude the question of value, although they are very relevant to the question.

In the case of chattels it is often, though not always, easy to ascertain the value. In order that any article may have an exchange value, there must be presupposed a person willing to give the article in exchange for money and another willing to give money in exchange for the article. When there is a large or considerable number of articles of the same kind which are the subject of daily or frequent sale and purchase, the value of the articles is taken to be their current price. Thus, in the Sale of Goods Act, the measure of damages for wrongful refusal to deliver goods is to be ascertained with reference to "the market or current price of the goods." The foundation of this doctrine is that a man desiring to sell such articles can readily find a purchaser at a price which is fairly certain, and conversely that a man desiring to buy can find a seller at about the same price. But these considerations are not necessarily equally applicable to land. There is, no doubt, much land in many places the value of which per acre is as definitely fixed as the price of wheat or sugar. But in the case of a new port, in a new State, where the area of land is limited, and each piece differs in many of its characteristics from the rest, it is impossible to apply any such rule. Bearing in mind that value implies the existence of a willing buyer as well as of a willing seller, some modification of the rule must be made in order to make it applicable to the case of a piece of land which has any unique value. It may be that the land is fit for many purposes, and will in all probability 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.

In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring "What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?" It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. 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. This is not, as I understand the evidence and the decision of the learned Justice, the test which was applied by him or by the witnesses upon whose testimony he relied. On this ground I think that his assessment of the value is open to be reviewed.

But, applying what I conceive to be the true test, I am unable to come to the conclusion upon the whole evidence that the plaintiff has satisfied the onus, which is upon him, of showing that such an owner would not in January 1905 have accepted an offer of PD3,000 cash, although I am not prepared to say that he would have accepted a smaller sum. In coming to this conclusion I have given much weight to the opinion of the learned Justice, as I understand it, as to the value of the testimony of the respective witnesses so far as regards their accuracy and the soundness of the basis of their opinion. I am, therefore, of opinion that on this ground, as well as on that already dealt with, the plaintiff was entitled to recover PD3,000. But the result, so far as regards the issue for trial, is the same, namely, that the sum paid into Court was enough to satisfy the plaintiff's claim.

If the action had been triable, and tried, with a jury, the result would have been that the plaintiff would have had to pay the costs of the issue on which he failed. And I do not see any sufficient reason for departing from this rule in the present case. Higgins J., in the exercise of his discretion under s 17 of the Act, relieved the plaintiff from payment of costs although he recovered less than the amount of the valuation, and the Court could not review that exercise of discretion if it applied to the case as now determined. But I do not think that he applied his mind at all to the question of costs on the basis that the plaintiff was entitled to the PD3,000 paid into Court. We must, therefore, exercise our own discretion, which I think will be best done by following the ordinary rule.

Counsel for the defendant asked for leave to amend the defence by stating that the liability for the full sum paid in was not admitted. Assuming that such an amendment could be made, it would, in the view which I take of the facts, be prejudicial and not beneficial to the defendant, for it would entail payment by it of the costs of the action. But, even if I took a different view of the facts, I do not think that any sufficient ground was shown for allowing so unusual an amendment.

The judgment appealed from should therefore be varied by directing judgment for plaintiff for PD3,081 1s. 2d., with costs up to the time of payment into Court. The plaintiff must pay the defendant's costs of action after payment. The respondent should pay the costs of this appeal.