Boland v. Yates Property Corporation Pty Ltd
167 ALR 575(Judgment by: Hayne J.)
Boland v Yates Property Corporation Pty Ltd
Webster v Yates Property Corporation Pty Ltd
Judges:
Gleeson CJ
Gaudron J
Gummow J
Kirby J
Hayne JCallinan J
Judgment date: 9 December 1999
Canberra
Judgment by:
Hayne J.
[165] In August 1981, Yates Property Corporation Pty Ltd (YPC) agreed to buy land at Darling Harbour, Sydney, for $5.1 million. It settled that purchase on 30 December 1983. Six months later, YPC was told that it was likely that the land would be resumed and on 7 May 1985 the land was compulsorily acquired by the Darling Harbour Authority.
[166] By order of the Land and Environment Court of New South Wales made on 1 May 1990, YPC was awarded $22,334,500 compensation. [201] YPC appealed against that award and on the case being remitted to the Land and Environment Court, the award was varied, on 1 April 1992, by increasing it by $217,443.78. YPC again appealed - against the varied award. This second appeal was compromised and it was agreed in November 1992 that a still further sum of $1,250,000 would be allowed as compensation.
[167] YPC contends that it received too little compensation because the land was worth more to it than the sum of nearly $24 million it was paid as compensation. It says that it was deprived of the chance of obtaining proper compensation because of the negligence of its solicitors and of counsel retained by those solicitors. In 1993 it brought an action in the Federal Court against the solicitors and counsel. This action was dismissed by Branson J. [202] The Full Court of the Federal Court allowed appeals by YPC. [203]
[168] The present appeals are the sixth occasion that aspects of the claim for compensation by YPC have come before the courts. They are appeals brought by the solicitors and by junior counsel against the orders of the Full Court of the Federal Court. Each appeal should be allowed.
[169] YPC sought, and the Land and Environment Court allowed as compensation, the amount which that court determined was the amount of money "someone in [YPC's] position would have been prepared to have paid [for the land] sooner than lose it". [204] YPC alleged in its actions in the Federal Court that its case in the Land and Environment Court was not put to its best advantage because evidence was not led (and arguments were not advanced) to show that, because YPC was able to start redeveloping the land in the way it proposed sooner than anyone else, the land was therefore worth more to it than it was to others.
[170] Valuers called on behalf of YPC in the Land and Environment Court gave evidence of their opinions of the value of the land to YPC. One valuer, whom Branson J found to have been regarded as the principal valuer for YPC in the proceedings in the Land and Environment Court, based his opinion of the market value of the land on the hypothesis that a purchaser would begin to derive income from the redeveloped land six months after the notional sale of the land to it. The case that YPC contended in the Federal Court should have been put on its behalf was based on a different assumption: that a purchaser would have taken 20 months to develop the land before it started to derive income whereas Yates could have redeveloped the land in six months. But the case that was in fact presented in the Land and Environment Court was no less favourable to YPC in this regard than the case it now says should have been put. Moreover the case which YPC contended should have been put was found by Branson J to be factually flawed. It assumed that YPC had been ready to begin redevelopment immediately and that the markets would therefore have started producing income for YPC in six months' time. Branson J found as a fact that YPC had not been ready and able to start redeveloping the land immediately.
[171] The factual premises for the allegations of negligence by counsel and solicitors were that YPC could have developed the land sooner than anyone else and that such a case was not advanced in the Land and Environment Court. Those premises were not established on the trial of the present proceedings in the Federal Court. The special capacity which YPC alleged it had to develop the land quickly was put before the Land and Environment Court by YPC's legal advisers and it was central to the valuation evidence which was tendered on behalf of YPC in that court. No one could have developed the land sooner than that valuation evidence assumed. These are reasons enough to conclude that the appeal to the Full Court of the Federal Court should have been dismissed.
[172] In addition, however, as Branson J found, the views which were held by senior and junior counsel who presented the case on behalf of YPC in the Land and Environment Court, and which underpinned the way in which they did so, "were views which it was reasonably open to barristers of their respective seniorities experienced in valuation law to hold". [205] The Full Court held, in effect, that a legal principle, not previously mentioned in decided cases or reputable writings in the area, was so obvious that it was negligent of junior counsel and solicitors not to advance a case founded on this principle. This was the so-called "head start" element of value - that the property was more valuable to YPC than others because it had a head start over any other purchaser of the land. This was said to be, or to be an element of, the "special value" of the land to YPC.
[173] It is neither necessary nor desirable to explore all of the decided cases relating to "special value" or to examine any tension between "special value" and "market value" (as that concept is described in Spencer v Commonwealth ) [206] . For present purposes I am prepared to accept that the "value" that was to be assessed by the Land and Environment Court was the value of the land to YPC in the sense described by the Privy Council in Pastoral Finance Association Ltd v Minister [207] - as "that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it". This view of valuation finds reflection in several decisions of this court, albeit in contexts that in some cases may not be uninfluenced by the effect of s 51(xxxi) of the Constitution and the concept of "just terms". [208]
[174] It is always necessary to bear well in mind three things: that the inquiry which was to be undertaken in the Land and Environment Court was one of valuation not calculation; that the inquiry was one of valuation not assessment of damages; and that it was an inquiry about which reasonable minds may well differ widely. Further, although it may often be convenient to apply labels or tags to describe particular processes of reasoning or kinds of evidence that bear upon the general question of valuation of a piece of land, it is usually unwise to elevate those labels to statements of principle. Doing so gives undue emphasis to the decisions in particular cases that are decisions owing more to the peculiar facts of the case than any general proposition of principle. Especially may this be so with cases such as Kennedy Street Pty Ltd v Minister [209] and Baringa Enterprises Pty Ltd v Manly Municipal Council [210] about which so much has been said in the argument of this matter.
[175] The "head start" which was said to give special value to YPC was a capacity to take advantage of approvals obtained by YPC and preliminary work which it had done for redeveloping the land as markets. All of the evidence advanced on behalf of YPC in the Land and Environment Court was directed to establishing a value for the land that assumed it would be redeveloped in this way and that, but for the resumption, YPC would have reaped the rewards of the redevelopment as soon as it could. To put a label on this contention - whether "head start" or "special value" - does not alter the fact that the contention was put. Nor does it reveal some principle of law which should have informed how counsel and solicitors presented the case. The contention was one of fact, not law. The relevant principle for which YPC has always contended (and which has been accepted at every stage of the litigation to determine the compensation to be allowed and the subsequent litigation which culminates in the present appeal) is that compensation should be assessed as the amount which YPC would have paid for the land sooner than lose it. The case called for the application of no other principle of the kind which was said to be described by the label "head start".
[176] In these circumstances I need not consider the issues raised about the immunity principle established by the decision of this court in Giannarelli v Wraith . [211] In particular, I need not consider the decision of the Court of Appeal of New South Wales in Keefe v Marks . [212]
[177] The appeals should be allowed and orders made as proposed by Gleeson CJ.