Spencer v. Commonwealth

5 CLR 418

(Judgment by: Isaacs J)

v. Commonwealth

High Court of Australia

Judges: 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:
Isaacs J

I agree with the order proposed by the learned Chief Justice. The only issue raised by the pleadings was whether the sum of PD3,086 1s. 2d. brought into Court without any denial of liability was enough to satisfy the plaintiff's claim. His claim for compensation was solely for the value of the land itself, and did not include any claim for damage otherwise. The particulars of the sum paid into Court showed that the money was in respect of the identical claim made, and consisted of an amount representing the valuation of the land together with interest at 3% from the date of acquisition of the land until the date of payment into Court.

The amount found by the learned primary Justice as the true value of the land was PD2,250, and His Honour directed that judgment should be entered for that sum.

The first question is, whether the plaintiff, notwithstanding the finding that PD2,250 was the actual value, is entitled to judgment for the amount of PD3,086 1s. 2d. paid into Court.

Section 15 of the Property for Public Purposes Acquisition Act 1901, which was in force when this action was tried and until July 1st 1907, prescribed that, in the absence of an agreement as to the amount of compensation, proceedings might be instituted in the High Court in the form of an action for compensation. This brings into application the principle enunciated by James L.J. in Dale's Case [F7] , at p. 450. "It was strongly urged that this was a new jurisdiction and a new procedure. According to my view of the case, that is not material, because if a new jurisdiction is given to an existing Court-that is to say, a jurisdiction to deal with some new matters in a different mode and with a different procedure-if that jurisdiction be so given to a well-known Court, with well-known modes of procedure, with well-known modes of enforcing its orders, it must, unless the contrary be expressed or plainly implied, be given to that Court to be exercised according to its general inherent powers of dealing with the matters which are within its cognizance."

Subject, therefore, to any special provision contained in the Act itself, the ordinary rules and practice of the Court apply; and in the absence of any express rules or practice governing the procedure, the Court must pro hac vice act on its own views of justice and convenience. There is nothing in the Act which in any degree interferes with the constant rule that the Court tries the issues raised, and does not treat as still in contention any matters admitted between the parties on the pleadings as they stand.

What then is the effect to be attributed to the payment of PD3,086 1s. 2d. into Court upon the only item of claim made by the plaintiff? Clearly, that the defendant has expressly admitted the value of the land to be at all events PD3,000, and that so much in any event ought to be paid to the plaintiff.

Money paid in on a plea not denying liability, so long as the pleading so stands, is, as it always has been, a formal admission that the sum paid in is due.

In the words of Lord Denman C.J. in Steavenson v Berwick Corporation [F8] , at 159, the defendants say "We do not choose to dispute so much of the demand." The cases are uniform as to this.

Whether in any particular case such a payment has any further effect may depend on the form of the action and of the payment itself. But money paid in simply and without denial of liability is, in the absence of permitted amendment, the money of the plaintiff if he chooses to take it; but if he determines to proceed for more, then he runs the risk of the money, which is his money, being dealt with by the Court so as to protect the defendant from some possible injustice. Apart from that contingency, the unqualified payment into Court is for him, and leaves the money at his disposal.

There having been no amendment of the pleadings, it was not, in my opinion, competent for the defendant to dispute the right of the plaintiff to a judgment for at least PD3,000 with interest.

It appears, however, that this view was, by inadvertence, not placed before Higgins J., and that it was admitted before him by plaintiff's counsel that under the authority of Gray v Bartholomew [F9] there was power to order the repayment to the defendant of the difference between PD2,250 and PD3,086 1s. 2d. Assuming there was power to limit the amount recoverable by the plaintiff to PD2,250, there was also power to order the balance to be refunded; and, in any event, if costs were payable to the defendant, there was equally power to order them to be first paid out of the sum in Court before payment out to the plaintiff.

There were no costs so payable; and though the learned Justice was quite justified in asking himself, and indeed bound to ask himself, the true value of the land irrespective of the amount paid in, yet when that was once ascertained to be below the amount paid in, the answer only enabled the Court to determine in favour of the defendant the issue as to sufficiency of the amount paid in. It did not alter the admission of the pleadings up to that amount, or the plaintiff's right to receive the sum paid in. In an ordinary action final judgment would in such a case be given on the issue for the defendant, but here the language of the Act contemplates a judgment for the plaintiff, and in the circumstances the judgment must be for at least the sum paid in.

The plaintiff, however, was not content to accept that sum as sufficient; he denied its sufficiency, and has further contended on the appeal that the learned Justice ought to have given more. Invited to state the minimum amount that would meet the legal requirements of the evidence, learned counsel for the appellant candidly admitted it would be impossible to do so.

It would be profitless to examine the evidence in close detail, but there are some broad considerations to which reference may be directed.

In the first place the ultimate question is, what was the value of the land on 1st January 1905?

All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding 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. The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. 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 voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook 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 then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.

In The Queen v Brown [F10] , at p. 631 Cockburn C.J. said:"A jury, whether the dispute be as to the value of land required to be taken by the company, or as to the compensation for damages by severance, in assessing the amount to which the landowner is entitled, have to consider the real value of the land, and may take into account not only the present purpose to which the land is applied, but also any other more beneficial purpose to which in the course of events at no remote period it may be applied, just as an owner might do if he were bargaining with a purchaser in the market. That is the mode in which the land would be valued." Having mentally placed itself in the position of the bargaining parties as on the critical date, 1st January 1905, the question for the tribunal is, what is the point at which the parties would meet; what is the sum the one would be willing to give and the other to take? That is practically the same as asking what is the highest sum such a purchaser would give, because we must assume the owner would be willing to take the best he can get. The best he can get in those circumstances is the test of what he loses, and it is his loss which must be replaced. It is not, as it seems to me, proper for this purpose to assume that the owner retains his land unsold indefinitely because such an assumption could only be for the purpose of getting an improved value, arising from more favourable circumstances than those existing in January 1905, which is the very thing forbidden by the Statute. If permissible in his favour, it would also be permissible against him, and it would be palpably unjust to him to diminish the price he could actually have got in January 1905 because some time after he could not have obtained so much. What is to be avoided is the supposition that on the specified date there is to be a forced sale, and that is completely guarded against by the considerations I have enumerated.

That being so, how has the plaintiff satisfied the onus he undertook in asserting the insufficiency of the amount paid into Court? The value of the land for workmen's cottages as determined by the learned Justice cannot, on the materials present here, be disturbed on the ordinary principles upon which an appellate tribunal acts. It is urged, however, that His Honour was wrong in not accepting the estimates of the plaintiff's witnesses on the basis of a business site. But apart from balancing their relative competency as compared with the gentlemen called for the defendant, by reason of varying personal professional experience of this particular locality, there is ample material to justify the primary tribunal to disregard this aspect of their testimony without being chargeable with error which the appellate Court would correct. As the Privy Council said in Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [F11] , at p. 391:

"It is quite true that in all valuations, judicial or other, there must be room for inferences and inclinations of opinion which, being more or less conjectural, are difficult to reduce to exact reasoning or to explain to others. Everyone who has gone through the process is aware of this lack of demonstrative proof in his own mind, and knows that every expert witness called before him has had his own set of conjectures, of more or less weight according to his experience and personal sagacity. In such an inquiry as the present, relating to subjects abounding with uncertainties and on which there is little experience, there is more than ordinary room for such guesswork; and it would be very unfair to require an exact exposition of reasons for the conclusions arrived at."

The suitability of the land for a factory site is incontestable. But its inherent suitability, and its money value, for a factory site are two very different matters. No demand for factory sites there existed on 1st January 1905, and therefore no special value could be placed on it for that purpose, unless the hypothetical prudent purchaser would then take into his calculation the future prospects of the land being wanted for such a site. As to this not a single concrete fact leading to such a probability, or likely to influence a would-be purchaser, is adduced. Indeed, one witness for the plaintiff, James Morrison, although his valuation is on the basis of a factory site, says:"Owing to the neighbourhood, I think of no value except for workmen's cottages."

The evidence for the defendant, equally honest and capable, was precise and clear that the highest price obtainable for the land was for cottage property. There was a general agreement of opinion among the witnesses that for some years past prices of land have come down in the locality and are still on the decline. Reading the judgment as a whole, I understand the learned Justice practically to arrive at a special finding that on 1st January 1905, whatever the property might have fetched as a future factory site, the highest value of the land was for workmen's cottages. This conclusion was founded on conflicting opinions of equally honest competent and confident experts. I entertain no doubt that such a finding cannot be reversed by a Court who do not see the witnesses, and are not in so favourable a position as the learned primary Justice to form what after all is only a judicial opinion of the relative weight to be attached to the opinion of witnesses regarding the estimate they think a hypothetical purchaser would form of the probable use to which the land might in the indefinite future be most beneficially applied. This is altogether too unsubstantial for an appellate Court to act upon in such a case. Unless some error of principle is established, or the evidence on one side so far preponderates over that on the other, by reason of its character, force or quality, as to distinctly outweigh the disadvantages of not seeing and hearing the witnesses, it is almost impossible to disturb a finding of the nature now under consideration.

In the result then the special adaptability of the land for factory sites is immaterial, and the general value of the land as workmen's residences prevails, at a sum not exceeding the amount paid into Court.

The question of costs is all that remains. Ordinarily that is also a matter for the discretion of the primary tribunal. But here the plaintiff invokes the general practice of the Court to escape from the specific finding of the learned Justice limiting him to PD2,250, and he is entitled to do so; but the same general practice also says that in such a case the ordinary rule is that the plaintiff should get his costs up to payment into Court, and should, if he fail on the issue as to sufficiency, pay them to the other side. That is only the complete statement of the one rule.

As a new feature operating to his advantage has been introduced into the judgment at the instance of the plaintiff to secure a benefit, it is only just to apply it in its entirety unless special circumstances, not appearing here, make it more just to order otherwise. In this sense the order varying the provision of the judgment as to costs is no departure from the well established rule of non-interference with the discretion of the primary Court as to costs. It is not improbable that, if the principle we are acting upon had been urged before Higgins J., he would have accompanied its application with the same order as to costs that this Court now makes.

(1893) 1 Q.B., 367

17 N.Z.L.R., 241

40 L.J.Q.B., 1

17 N.Z.L.R., 780

(1903) 1 K.B., 574

Browne and Allan on Compensation, 2nd ed., App. p. 659

6 Q.B.D., 376

1 Q.B., 154

(1895) 1 Q.B., 209

L.R. 2 Q.B., 630

(1901) A.C., 373