Land and Environment Court of New South Wales CITATION: Perry v Roads and Traffic Authority of New South Wales [1999] NSWLEC 109 PARTIES APPLICANT Raymond Thomas Perry RESPONDENT Roads and Traffic Authority of New South Wales NUMBER: 30009 of 1996 CORAM: Bignold J KEY ISSUES: :- Compulsory acquisition for purposes of "Roads Act 1993" - whether Applicant can claim compensation on the "Raja" principle for the special potentiality of the land where the acquiring authority is only possible purchaser - Whether s56(1)(a) of the Just Terms Act (Pointe Gourde principle) abrogates Raja principle. LEGISLATION CITED: Compulsory acquisition for purposes of "Roads Act 1993" - whether Applicant can claim compensation on the "Raja" principle for the special potentiality of the land where the acquiring authority is only possible purchaser - Whether s56(1)(a) of the Just Terms Act (Pointe Gourde principle) abrogates Raja principle. DATES OF HEARING: 04/15/1998; 04/16/1998; 04/17/1998; 04/21/1998; 04/22/1998; 04/23/1998; 04/24/1998; 04/29/1998; 04/30/1998; 05/01/1998; 05/04/1998; 05/05/1998; 07/27/1998; 07/28/1998; 07/30/1998; 08/07/1998; 08/21/1998; 09/28/1998; 10/07/1998; 10/16/1998; 12/23/1998; 01/13/1999; 02/04/1999 DATE OF JUDGMENT DELIVERY: 05/07/1999 APPLICANT Mr J Webster, Barrister with Ms M Peatman, Solicitor Solicitors: Levy Peatman LEGAL REPRESENTATIVES: RESPONDENT Mr G Downes QC with Mr J Ayling, Barrister Solicitors: Crown Solicitors Office JUDGMENT: A. INTRODUCTION 1-23 B. THE "RAJA" VALUATION - IS IT APPLICABLE? 24-78 C. RESPONDENT'S OBJECTIONS TO "RAJA' VALUATION 79-162 D. THE QUANTUM OF THE " RAJA " VALUATION 163-236 E. DOES THE POTENTIAL COMMERCIAL QUARRY ADD VALUE? 237-284 F. THE APPLICANT'S DISTURBANCE CLAIMS 285-312 G. CONCLUSIONS AND ORDERS 313-315 IN THE LAND AND Matter No. 30009 of 1996 ENVIRONMENT COURT OF Coram: Bignold J. NEW SOUTH WALES 7 May 1999 RAYMOND THOMAS PERRY AND ANOR. Applicant v. THE ROADS AND TRAFFIC AUTHORITY Respondent JUDGMENT Bignold J: A. INTRODUCTIO N 1. This is an objection pursuant to s.66(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act) in respect of the amount of compensation offered to the Applicant in respect of the compulsory acquisition of that part of a rural property owned by the Applicant situate at Perry's Hill, Repton which fronts the Pacific Highway situate some 20km south of Coffs Harbour. 2. The compulsorily acquired land which flanks each side of the Pacific Highway is described in the Notice of Compulsory Acquisition published in Government Gazette No. 135 of 3 November 1995 as follows: Lots 7, 8, 9, 10, 11, 12, 18 and 19 Deposited Plan 852143. 3. That Deposited Plan was prepared by a registered surveyor employed by the Respondent and is described as a "plan of land to be acquired for the purposes of the Roads Act 1993" . It was registered by the Registrar General on 31 August 1995 just a few months prior to the compulsory acquisition. A copy of the relevant sheets of the Deposited Plan showing the said lots is annexed hereto and marked "A" . 4. The aggregated area of the eight lots is 9.44 ha , the majority of which is situate on the western side of the Highway. Prior to the compulsory acquisition, the Applicant's land holding comprising Portion 300 Parish of North Bellingen and lots 177 and 178 Deposited Plan 755553 had an aggregated area of 162.6 ha. Portion 300 comprising 91.46 ha was severed by the Pacific Highway with approximately equal land areas situate on the eastern and western sides of the Highway. The Applicant resides on the eastern side of the Highway, as did his late mother (who is a Co-Applicant) in a separate dwelling. A retail butcher's shop is also located on the eastern side with frontage to Perry's Road which bisects the land holding on the eastern side of the Highway and intersects with the Highway at Perry's Hill. Situate on the Applicant's land on the western side of the Highway is the Applicant's abattoir and an adjacent caretaker's cottage. The remainder of the western land is used for grazing and cattle fattening, being ancillary activities to the abattoir. Also situate on the western side is a disused quarry, the site of which was included in the compulsorily acquired land. The relationship between the compulsorily acquired land and the retained land is shown in Exhibit 68 (being Figure 3 in the Environmental Impact Statement prepared in support of the July 1997 development application for a large quarry on the Applicant's retained land) a copy of which is annexed hereto and marked "B" . 5. The Compulsory Acquisition Notice stated that the land had been acquired "for the purposes of the Roads Act 1993" . (It will be necessary hereafter to examine more precisely the "public purpose" for which the land was compulsorily acquired, in view of the dispute concerning such matter that developed at the hearing and was the cause for leave being given to the Applicant to re-open the case on that issue.) 6. The Compulsory Acquisition Notice given to the Applicant included, conformably to s 42(1) of the Just Terms Act , the Valuer-General's determination of compensation in the sum of $242,000 . 7. The Applicant's claim for compensation had been for $1,239,327 plus further unquantified amounts for disturbance. This is the amount of Mr Robertson's initial valuation ( Exhibit 10 ). Mr Early's initial competing valuation was in the sum of $274,000 (Exhibit FF) . 8. The significant disparity between the valuations is largely explained by the inclusion in Mr Robertson's valuation of (I) an amount of $600,000 representing disturbance to the Applicant's use of his land holding, principally in connection with the abattoir business; and (ii) an amount of $400,000 representing the loss of the value assigned to the disused quarry, in respect of which the Applicant had obtained a deferred commencement consent to re-commence the quarry operation pursuant to the Environmental Planning and Assessment Act 1979 granted by the Bellingen Shire Council, just a few months before the date of the compulsory acquisition, and at a time when the Applicant knew of the Respondent's intention to acquire part of his land. 9. Mr Early's valuation makes no allowance for the loss of the quarry and makes a considerably reduced allowance for disturbance. 10. The hearing time was largely devoted to these two matters and more especially to the question of whether the disused quarry added value to the market value of the compulsorily acquired land (which was otherwise agreed in the course of the proceedings between the valuers in the sum of $158,000 ). Even this question of added value was somewhat eclipsed by Mr Robertson's alternate valuation in the sum of $1,316,000 (Exhibit 11) based upon the "Raja" principle ( Raja Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer Vizagapatan (1939) AC 302 ) reflecting the special potentiality or adaptability of the compulsorily acquired land to provide fill material required for the construction of embankments across the flood plain to accommodate the approved Highway Deviation at Raleigh, situate just one or two kilometres south of the Applicant's land. 11. Early in the course of the hearing, the parties reached significant agreement in respect of a number of the disturbance claims, namely— (i.) the provision of an underpass to provide for the passage of cattle between the Applicant's land situate in the eastern and western sides of the Highway (Exhibit 45) ; (ii.) the construction of a gravel access road from the existing access road (leading to the abattoir) to the carriageway of the new Highway and the provision of emergency access (Exhibit 54) ; (iii.) the construction of an internal access road (flood free) to enable the passage of cattle between the abattoir and the northern paddocks on the land on the western side of the northern (Exhibit 55) ; and (iv.) clearing of drains and drainage lines situate on the western side of the highway (Exhibit 86) . 12. Moreover, at the hearing the Respondent conceded a number of other of the Applicant's disturbance claims (Exhibit 91) . 13. As a result of all these agreements reached in the course of the hearing, the principal disturbance claims that remained in dispute, and require adjudication concern the following matters: (i.) the installation of a DAF system for the disposal of effluent generated by the abattoir ( $187,498 claimed ); and (ii.) supplementary feed for cattle ( $80,000 claimed ). 14. There are several other disputed disturbance claims for much smaller amounts, which need not be particularised at this stage and which will (if required) be considered in detail later in these reasons. 15. According to s 54 of the Just Terms Act the Applicant is entitled to "the amount of compensation….as, having regard to all relevant matters under this Part, will justly compensate (him) for the acquisition of the land" . 16. The relevant matters are exclusively specified in s 55 of the Just Terms Act . Those matters may be summarised as: (a) market value; (b) special value; (c) severance loss; (d) disturbance loss (e) solatium; and (f) injurious affection to, or enhancement of, retained land. 17. In respect of these relevant matters, it is to be noted that the parties" agreement adopting the sum of $158,000 is expressed to reflect matters (a), (b) and (f) so far as they bear upon the existing uses of the Applicant's land (including the compulsorily acquired land), namely for the purposes of "grazing, abattoir, other rural purposes and residential" but not upon any quarry use (potential or approved) of the compulsorily acquired land. 18. It follows that the outstanding matters now requiring adjudication are confined to (i) the disputed " Raja" valuation; (ii) the disputed value of the approved quarry (including any potential extension of that approval); and (iii) the disputed disturbance claims. Apart from the disturbance claims, it will be at once appreciated that the difference in the competing valuations turns upon whether there is value in the land for its potential use, as a source of fill material, as opposed to its agreed value ($158,000) for its existing use which excludes any potential for use as a quarry of the compulsorily acquired land. 19. In terms of s 55 of the Just Terms Act the Applicant's claims to these disputed matters must be sourced in the concept of "market value" so far as concerns matters (i) and (ii) and in the concept of "disturbance loss" so far as concerns matter (iii) . 20. Moreover, because the Applicant's claims to a higher market value (than the agreed amount reflecting the existing use value) of the compulsorily acquired land are predicated upon a potential in the land to be used for a different purpose than the existing use, s61 of the Just Terms Act may have relevance to the Applicant's disputed disturbance claims. Thus, there is an obvious interrelationship between the Applicant's claims to a higher market value (matters (i) and (ii) ) and the Applicant's claims to disturbance loss, which may require to be examined. 21. Moreover, there is a further interrelationship between the Applicant's claims to a higher market value (matters (i) and (ii) ) since they are in truth, alternate claims. According to Mr Robertson's valuations, it is that based upon "Raja" which produces the higher market value, which obviously is the Applicant's primary case. 22. Another preliminary observation to be made concerning the Applicant's alternate bases for determining market value is that the "Raja" valuation is not a result to be added to the otherwise agreed market value of the compulsorily acquired land, whereas the "quarry" valuation is intended to be an additional component of market value. The latter result is a consequence of the fact that the "quarry" valuation is predicated upon the fact that only a portion (2ha) of the compulsorily acquired land (9ha) is to be devoted to the quarry use, whereas the "Raja" valuation proceeds on the basis that all of the compulsorily acquired land is available for the obtaining of the 450,000 cubic metres of fill material that was anticipated by the Respondent prior to the compulsory acquisition to be obtainable therefrom, for use in the Highway Raleigh Deviation across the flood plain. 23. I propose to proceed by determining, in turn, the following matters in dispute: (i.) the "Raja" basis for market value; (ii.) whether the disused quarry and its approved recommencement represents potential that adds to the market value; and (iii.) the unresolved disturbance claims. B. THE "RAJA" VALUATION - IS IT APPLICABLE? 24. Mr Robertson's valuation based upon the "Raja" case was in the amount of $1,315,000. (Exhibit 11) representing the value of the total quantity of 478,000 loose cubic metres of fill (extracted from the compulsorily acquired land by the Respondent's contractor) at the rate of $2.75 per m3. 25. Although the Respondent strenuously opposes the "Raja" valuation there is no dispute that that amount of fill was extracted from the land in the one to two years immediately following the compulsory acquisition or that the Respondent, prior to the compulsory acquisition, knew that it could obtain that amount of fill from the land to be deployed in constructing embankments across the section of the Raleigh Highway Deviation that traverses the flood plain. However, there is a significant dispute concerning Mr Robertson's adoption of the rate of $2.75 per m3 for such fill material. Mr Robertson's valuation report explains why he adopted the rate of $2.75 per m3: vide pp 8 and 9 of Exhibit 11. Mr Early, who did not think that a valuation based upon the "Raja" case was appropriate in any event, adopted a rate per cubic metre within the range of between 54 and 72 cents (yielding for the 478,000 m3 a result between $137,520 and $353,160): Exhibit HH. Having established this range, he opined that the "negotiating framework" required by the "Raja" principle "would not contemplate either party accepting either the highest of lowest end of the range" and noted that midpoint the range would yield a valuation of $245,340, which was less than the amount of his original valuation of $274,000 (Exhibit FF). Mr Robertson's reply to Mr Early's "Raja" valuation criticised it as so grossly understating the assessment of compensation on that basis, as to involve an incorrect application of the principle. 26. In the course of giving evidence in chief, Mr Robertson suggested in a supplementary valuation report (Exhibit 94) an alternate basis to sustain his "Raja" valuation, namely additional value reflecting the "adjoining owner influence". In amplification, Mr Robertson reasoned that the Respondent was "an adjoining owner who had a need for the quarry resources" located on the compulsorily acquired land and that the land "had a special potentiality in the market place for the supply of fill to the Respondent, by enabling it to extract the required amount of fill required for raising the level of the highway across the Raleigh flood plain at a cost well below any other reasonable alternative assessed by the Respondent's Project Managers (SMEC) in the period leading up to the date of resumption". 27. However, Mr Robertson's supplementary valuation report concludes: The value determined by adopting the "Raja" principle already takes account of the special potentiality and the market value of the resumed land to the acquiring authority. Consequently, the circumstances of an adjoining owner influence has been encapsulated in my "Raja" determination.: p 3. 28. In his address in reply, Counsel for the Applicant expressly abandoned Mr Robertson's alternate basis for sustaining his "Raja" valuation (ie "the adjoining owner influence"). In my respectful opinion, this concession was properly made. I agree that the concept of "adjoining owner influence" has no application in the present case. (The outcome may well have been otherwise if the Raleigh Deviation of the Pacific Highway had not extended north of Man Arm Bridge, and thus not involved the Applicant's land as the route of the Highway Deviation). 29. However, in so concluding, I would not wish it to be inferred that there is generally no validity in Mr Robertson's opinion based upon "the adjoining owner influence". The valuation principle was recently recognised in Croghan v. Hawkesbury City Council (1998) 99 LGERA 375 but can be traced back to the judgments of Vaughan Williams LJ and Buckley LJ in In Re Lucas and Chesterfield Gas and Water Board (1909) 1 KB 16, the former Lord Justice expressly agreeing with the following statement of the trial judge, Bray J (1908) 1KB 571 at 579: land adjoining large works would in fact often have a special value because the owner of the works would be likely to require additional land and would be willing to give a larger price because it adjoined his works, and why should not this land have a special value because, if the board desired to build a new reservoir, this was the most convenient site on which to build it?. 30. It thus becomes necessary to consider the basis for Mr Robertson's "Raja" valuation of the compulsorily acquired land. In his report (Exhibit 11) in support of the "Raja" valuation, Mr Robertson identifies a number of the Respondent's documents pertaining to the Raleigh Deviation Highway (being documents made available to the Applicant's legal advisers by the subpoena process and by informal discovery given by the Respondent). Those documents commence with the 1991 Environmental Impact Statement (Exhibit 13) (EIS) prepared on behalf of the Respondent for the Pacific Highway Deviation at Raleigh. At that stage, the proposal involved the combination of a deviation approximately 6.5 km in length between the towns of Urunga and Repton situate between 86.5 and 93 km north of Kempsey. The proposal was to be undertaken in two stages—Stage 1 (from chainage 86.7 to 91 km) being new highway construction and Stage 2 (between chainages 91 and 93 km) being rehabilitation along the existing highway. (The Applicant's land which is adjacent to Stage 2 was not materially affected by the proposal save for some improvement of the intersection of the Highway and Perrys Road.) 31. In Section 5.5 of the EIS, the following Statement appears: CUT AND FILL REQUIREMENTS Cut and fill would be required in the construction of the proposed development. The balance between cut and fill, however, is not equal and therefore fill material would need to be sought from the surrounding region. It is likely that fill for the road construction would be obtained from the Raleigh Shoal, located adjacent to the western bank of the Bellingen River and downstream of the Raleigh Bridge. 32. In representations to the published EIS, it was noted that the Bellingen Shire Council regarded the Raleigh Shoal extraction proposal to be abandoned and that fill material required for the project could become the responsibility of the contractor. 33. On 4 May 1994 the Respondent appointed Snowy Mountains Engineering Corporation Ltd (SMEC) as the successful tender for the provision of professional services for the Project. 34. In its Report dated 31 May 1994, SMEC noted that it was "to investigate the availability of embankment materials". 35. In a note of its site visit on 22 June 1994 SMEC noted that south of the Bellingen River, the road construction would "produce negligible fill and a considerable quantity of imported filling will be required". The report also noted that in the Bellingen Shire, sources of construction material were restricted. 36. In its Note of Meeting with Respondent held on 30 June 1994, SMEC noted that "river was only practical source of material for embankment". 37. In July 1994, SMEC submitted to the Respondent its Concept Design Report (Exhibit 14). It recommended changes to Stage 2 of the approved Project including a deviation of the Highway between chainages 91 and 93km through the Applicant's land with potential excavations of such land to provide a source of fill to eliminate the need for borrow from outside the project for the crossing of the flood plain. 38. Section 2.0.3.05 of the Concept Design Report states the following: Construction Materials The preliminary design of the route identified a deficiency in required fill, particularly north of the Bellingen river. South of the river most of the fill can be obtained from the planned road cuts. A review of potential sources of imported fill has indicated that, in this area, there are few options. The Bellingen Shire Council has restricted the development of borrow areas on environmental grounds and the only local source is sand dredged from the river. Alternative sources identified include quarries at Coffs Harbour and borrow areas near Nambucca Heads. Bellingen Shire have indicated that proposed widening of the road to Dorrigo west of Bellingen could provide the necessary material. There is however at present no program or funding for this project. Each of these sources are about 20 km from the project area and will involve significant transport costs and disruption of traffic resulting in high unit rates for fill. It is likely that, in view of the lack of competition, the price of the local dredged sand would be elevated. It is considered that by modification of the route through the northern ridge it would be practicable to provide sufficient borrow to balance cut and fill on the project. This would involve relocation outside the present road reserve in the area of the disused quarry. Adoption of this alternative would avoid the importation of major quantities of fill and should provide a more realistic unit rate for embankment fill on the project." 39. In its letter to the Respondent dated 1 September 1994, SMEC advised that it had met with Bellingen Shire Council on 14 July 1994 to discuss SMEC's concept design, at which meeting the idea of realigning the highway at Perry's Road to obtain the requisite fill was discussed. 40. In its letter to the Respondent dated 4 September 1994, SMEC, having identified its modified concept as providing the fill required for the embankments across the flood plain, noted that visual assessment indicated that the Applicant's land "may be a suitable source of borrow" and enquired what investigations were planned to confirm the suitability of the fill material for the embankment. 41. In its Community Newsletter on the Raleigh Deviation published in September 1994, the Respondent advised that the northern extension of the project had been announced by the Government. The Newsletter continued: This important development has been incorporated into the work to overcome traffic access concerns, engineering problems and safety issues around the Man Arm Creek Area. This extension will also provide a significant quantity of the embankment material for the new road in the northern side of the Bellingen River offering the best material, aesthetically pleasing and environmentally friendly solution for this area. 42. In its facsimile transmission to the Respondent dated 9 March 1995, SMEC advised that "all requirements for dual carriageway earthworks on the flood plain could be supplied from the cut at the southern end of the job" (ie. at Perry's Hill). 43. At its meeting held with the Respondent on 20 April 1995, SMEC noted agreement on the relocation of the Highway deviation at Perry's Hill. 44. In its facsimile transmission to the Respondent on 9 May 1995, SMEC advised that there was 480,000 m3 surplus material from work north of Bellingen River. 45. Having chronicled the documentary history that I have just briefly summarised, Mr Robertson's valuation report expresses the following factual conclusion: It is clear from the documents provided to me in this matter that once the landowner of the Bellingen Shoals sand resource placed a high price on the fill material required for the road over the flood plain, the RTA utilised its resumption powers to change the road alignment over the subject property to enable the required amount of fill to be obtained to accommodate the road across the flood plain. 46. The precise significance of this factual conclusion to Mr Robertson's "Raja" valuation is not entirely clear to me. Firstly, at p 9 of his Valuation Report in his application of the "Raja" principle, he applies the principle enunciated in the judgment of Vaughan-Williams LJ in Chesterfield Gas which was cited (and later expressly approved) by the Privy Council in Raja at 319: I agree with Bray J that the fact that no buyer for reservoir purposes can be found except a buyer who has obtained parliamentary powers does not prevent the special value "being marketable", and stated that one of his reasons for so agreeing was that the fact that the board (who were the acquiring authority) might themselves become possible purchasers who would give a special price for the land; ought to be considered. 47. Mr Robertson's application of that principle to the facts of the present case is expressed as follows: For the reasons outlined in Mr Green's (RDM) report in relation to alternate quarry resources in the Repton-Raleigh-Bellingen area and the statement of evidence provided by Mr McGregor (SMEC) it is highly likely that the acquiring authority or the road construction companies who were responsible for obtaining the resource material to construct the road, would have been prepared to pay a special price for the Applicant's land. 48. In this respect, the significance of Mr Robertson's factual conclusion based upon the relevant documentary history, lies in the fact that the Respondent recognised that compulsorily acquiring the Applicant's land would provide the requisite quantity of fill for the embankments across the flood plain to accommodate the Raleigh Deviation and thereby avoid the considerable expense and problem of having to import the fill material from further afield in circumstances where the fill would not be otherwise obtainable from local sources or by any usual cut and fill operation in highway construction. 49. In my judgment, that is the true significance to the "Raja" valuation of Mr Robertson's factual conclusion. 50. However, some confusion appeared to emerge when a different significance to Mr Robertson's factual conclusion was sought to be advanced, both by Mr Robertson and by Counsel for the Applicant, when it was said that the obtaining of the fill material from the Applicant's land was the true "public purpose" for the compulsory acquisition of the Applicant's land. 51. It would appear to me that this different significance was sought to be advanced because of the existence of s56(1)(a) of the Just Terms Act and the difficulties apprehended to be posed by that provision for the validity of any "Raja" valuation in the present case. 52. However, with great respect to the Applicant's advisers, I do not think, upon proper analysis, that the validity and availability in the present case of the "Raja" valuation depends upon a finding that the true public purpose for which the Applicant's land was compulsorily acquired was for the obtaining of the requisite fill for the construction of the embankments across the flood plain to accommodate the Raleigh Highway Deviation. 53. Accordingly, I propose to consider Mr Robertson's "Raja" valuation upon the basis that the Applicant's land was compulsorily acquired for the purposes of the Roads Act 1993 (as is stated in the Notice of Compulsory Acquisition). However, for completeness, I shall later return to the question of the true public purpose for which the Applicant's land was compulsorily acquired, and if necessary, also consider Mr Robertson's "Raja" valuation on that basis. 54. At this point, I note that I am not dealing with the dispute concerning the amount of Mr Robertson's "Raja" valuation. (In this respect, I need only note that there is, and can be, no dispute concerning the quantity of fill material extracted from the compulsorily acquired land and re-deployed in the construction of the embankments, namely 478,000 loose cubic metres. Rather, as I have stated, the dispute concerns Mr Robertson's royalty rate of $2.75 per loose cubic metre). 55. Rather, I am now considering whether there is any validity in Mr Robertson's "Raja" valuation in the present case. 56. At the outset of this consideration, it must be emphasised that "Raja" is principally concerned with the question of the value of a special potentiality or adaptability of the acquired land, in circumstances where that potentiality or adaptability is only realisable in the hands of the body possessing the powers of compulsory acquisition. In such a situation, the Privy Council's conclusion in "Raja" was that …even where the only possible purchaser of the land's potentiality is the authority that has obtained the compulsory powers, the arbitrator in awarding compensation must ascertain to the best of his ability the price that would be paid by a willing purchaser to a willing vendor of the land with its potentiality in the same way that he would ascertain it in a case where there are several possible purchasers and that he is no more confined to awarding the land's "poramboke" value in the former case than he is in the latter: 323. (Note "poramboke" value in the Privy Council's reasons means the value of similar land, but without its potentialities: 315). 57. In arriving at that ultimate conclusion, the Privy Council considered a number of earlier authorities that had considered the question of the value of the special potentiality of land where there is only one possible purchaser: 316. 58. However, dealing with the question apart from authority, the Privy Council stated its opinion on the question in the following passage at 316/317: …But dealing with the matter apart from authority it would seem that the value should be the sum which the arbitrator estimates a willing purchaser will pay and not what a purchaser will pay under compulsion. It was contended on behalf of the respondent that, at an auction where there is only one possible purchaser of the potentiality, the bidding will only rise above the "poramboke" value sufficiently to enable the land to be knocked down to that purchaser. But if the potentiality is of value to the vendor if there happen to be two or more possible purchasers of it, it is difficult to see why he should be willing to part with it for nothing merely because there is only one purchaser. To compel him to do so is to treat him as a vendor parting with his land under compulsion and not as a willing vendor. The fact is that the only possible purchaser of a potentiality is usually quite willing to pay for it. An instance of this is to be found in the case of Inland Revenue Commissioners v. Clay. ([1914] 1 KB 339, 348. 59. Thereafter at pp 318 to 323 the Privy Council considers the authorities relied upon in support of the proposition that "the matter assumes a totally different complexion when the only possible purchaser is the one who has obtained the compulsory powers of purchase" (318). 60. In the course of that consideration, greatest attention is given to the decision of the Court of Appeal in Chesterfield Gas and Water Board and especially to the judgment of Fletcher Moulton LJ upon which was placed chief reliance, who had said "that the decided cases to his mind laid down the principle that when the special value exists only for a particular purchaser who has obtained powers of compulsory purchase, it cannot be taken into consideration in fixing the price, because to do otherwise would be to allow the existence of the scheme to enhance the value of the land to be purchased under it": 319. 61. The Privy Council, at 319 noted that Fletcher Moulton LJ had not specified the authorities which had laid down the suggested principle in question and stated that their Lordships were not aware of any that would justify it: 319. 62. There next follows an extended passage in their Lordship's judgment, which in my respectful opinion, considerably illuminates what is meant by the doctrine (later to be known as the "Pointe Gourde" Principle) of not allowing the existence of the scheme to enhance the price of the land to be taken. I must quote the passage in its entirety at 319/320: …It must, of course, be conceded that the existence of the scheme must not be allowed to enhance the price, if by "scheme" is meant the fact that compulsory powers of acquisition have been obtained for the purpose of carrying into effect a particular scheme for the profitable use of the potentiality. The valuation must always be made as though no such powers had been acquired, and the only use that can be made of the scheme is as evidence that the acquiring authority can properly be regarded as possible purchasers. But their Lordships have some difficulty in seeing why the taking into consideration of the fact that the special value exists for those purchasers only should be said to be allowing the existence of the scheme to enhance the value of the lands. The only difference that the scheme has made is that the acquiring authority, who before the scheme were possible purchasers only, have become purchasers who are under a pressing need to acquire the land; and that is a circumstance that is never allowed to enhance the value. If, on the other hand, the Lord Justice meant by "the scheme" the intention formed by the acquiring authority of exploiting the potentiality of the land, his statement can only mean that the value of the land is not to be enhanced by the fact that they are possible purchasers. The result of this would be that, even in a case where there are two or more possible purchasers, their existence must not be allowed to enhance the value. For each purchaser must be deemed to have a scheme in the sense supposed, and the enhancement of value due to their competition which the Lord Justice envisages will in fact be due to the "schemes". In these circumstances their Lordships are not prepared to follow the dictum of Fletcher Moulton LJ in the Lucas case ([1909] 1 KB 16 and prefer the opinion there expressed by Vaughan Williams LJ. (I have earlier recited the Privy Council's citation from the judgment of Vaughan Williams LJ.) 63. Finally, it is to be noted that the Privy Council in Raja expressly considered two earlier Privy Council decisions, often cited in this area of the law, namely Cedars Rapids Manufacturing and Power Co. v. Lacoste (1914) AC 569 and Fraser v. City of Fraserville (1917) AC 187 and held that they did not stand in the way of the ultimate conclusion reached in Raja, noting that they were not dealing with the situation where there was only one possible purchaser for the potentiality of the land compulsorily acquired. 64. It remains to consider the relevant facts in Raja and the Privy Council's consideration of the assessment of compensation by the inferior courts in that case and the award of compensation that it substituted. 65. The facts, as found by the Subordinate Judge, are recorded at 324. They included the following: (i.) the resumed land contained a water spring capable of being used as a source of water supply to persons beyond the plaintiff's land; and (ii.) the only possible buyers of the water were the Harbour Authority (which resumed the land) and the oil companies and labour camps that might be established as a result of the development of the harbour. 66. The Subordinate Judge had, in assessing compensation, applied the following legal principles (325): (i.) the value of the potentiality of the land can be assessed even though there are no other possible purchasers beyond the acquiring authority; (ii.) it was the contingent possibly of the user that had to be taken as the basis of valuation and not the realised possibility; and (iii.) the use to which the acquiring authority had actually put the property could be taken as a strong piece of evidence to show that the property acquired could be put to such use. 67. The valuation adopted by the Subordinate Judge for RS1, 05, 000 was arrived at by capitalising (at 20 years purchase) the net annual income of the spring by selling water to the harbour area at the rate of 50,000 gallons per day for a price of Re 1 per 1,000 gallons. 68. An appeal from this assessment to the High Court succeeded principally for the reason that the special adaptability of the land to supply drinking water could not conceivably be developed by the land owner and the special adaptability of the land had no value apart from the scheme for which the acquisition was made and that accordingly, the Subordinate Judge had erred in law in awarding compensation for the special adaptability of the land where the Harbour Authority was the only reasonably possible purchaser. Reliance was placed upon the judgment of Fletcher Moulton LJ in Chesterfield Gas and Water Board. 69. An alternative reason for upholding the appeal was said to be founded upon the provisions of s 24(5) of the Indian Land Acquisition Act (at 311) which provided: But the Court shall not take into consideration— fifthly, any increase to the value of the land acquired likely to accrue from the use to which it will be put when acquired. 70. The Privy Council's consideration of the assessment of compensation in the Raja commences at 327. It proceeds upon the basis that the only really possible purchasers of the special adaptability of the land as a water supply was the Harbour Authority (327). 71. However, at the relevant acquisition date, the harbour area was a highly malarious place and "unless this state of affairs was remedied there would be no customers for the appellant's water and the value to him of the special adaptability was nil" (328). The appellant faced this dilemma—either his spring was the only source of water supply to the harbour in which case the Harbour Authority was the only possible purchaser or if there was an alternative source from which the Harbour Authority would obtain water, the requisite permission for the appellant to supply water would almost certainly be refused (328). In point of fact, there was an alternative scheme for water supply which had not been proceeded with when the appellant's land was acquired. However, it was impossible to say what would have been done about the alternative scheme if the appellant's land had not been acquired (329). 72. Having stated the foregoing facts, their Lordships at 329/330 propound the following approach properly to be to adopted in valuing the special adaptability of the acquired land: ….In these circumstances the possibility of the appellant's water being made available for the harbour by anyone other than the Harbour Authority was altogether negligible, and the only enhancement in the value to the appellant of his land by reason of its special adaptability as a water supply was the sum that the Harbour Authority, as a willing purchaser, would have been willing to give in excess of the land's "poramboke" value. Their Lordships have given their reasons for thinking, contrary to the view taken by the High Court, that such sum must be taken into consideration in fixing the compensation payable to the appellant, and that such sum is not to be treated as being a negligible one merely because the Harbour Authority was the only possible purchaser. It remains to deal with s. 24, sub-s. 5, of the Land Acquisition Act. That sub-section as applied to the present case means no more than this: that in valuing the appellant's land on February 13, 1928, it must be valued as it then stood, and not as it would stand when the land had been acquired and the water on it used for ridding the harbour area of malaria. The Harbour Authority would otherwise be made to pay for the water twice over. But the sub-section does not mean that the possibility that a particular purchaser of land will give a higher price for it by reason of its possessing a special adaptability must be disregarded merely because the land will be more valuable in his hands when he exploits that adaptability than it would be if left in the hands of the vendor who was unable to exploit it. In Clay's case ([1914] 1 KB 339), for instance, the house after being added to the nurses" home was no doubt more valuable than it was before. That, indeed, was the reason why the trustees of the home paid 250l.more than any other purchaser would have paid. The house in that case was held to be of the value of 1000l., not because that was its value after being put to the use for which it was acquired, but because that was the price which the willing purchaser was prepared to pay for its acquisition. In the present case the land must be valued not at the sum it would be worth after it had been acquired by the Harbour Authority and used for anti-malarial purposes, but at the sum that the Authority "in a friendly negotiation" (to use Lord Johnstone's words) would be willing to pay on February 13, 1928, in order to acquire it for those purposes. 73. Returning to the award made by the Subordinate Judge, their Lordships at 330 criticise the adopted valuation basis for assuming that at the date of acquisition, the appellant would have been in the position to supply water to the harbour as an income-earning concern at that date, concluding: It is plain, therefore, that in view of the fact that the water could not be exploited by the appellant himself and that it would necessarily be some years before the water would become a profit-earning asset in their hands, the Harbour Authority, however willing purchasers they might be, would not have agreed to pay anything like that sum 74. Rather than return the case to the Subordinate Judge to revise his award, the Privy Council, responding to the parties' request to determine the amount of compensation, expressed the opinion that the price the Harbour Authority would have been willing to pay was RS 40,000. It may be noted that this amount is some 2½ times the "poramboke" value assessed by the award of the Land Acquisition Officer: 323/324. 75. I have spent considerable time in analysing Raja. The undertaking is to my mind both profitable and necessary for the case is complex, because of its comprehensiveness. I mean no disrespect when I say that it is not always properly understood, eg. consider the Report of the Commonwealth Law Reform Commission (Report No. 14) on Lands Acquisition and Compensation at para 233 which seriously misstates the facts of the case and the nature of the special potentiality of the land. 76. It follows from the foregoing analysis of the Raja decision that Mr Robertson's "Raja" valuation is defensible and sustainable in terms of legal and valuation principle, if the following propositions can be affirmed: (i.) the Applicant's land that was compulsorily acquired had the special potential (by virtue of locational, physical and economic advantages) to be the source of some 450,000-500,000 m3 of fill material required for deployment in the construction of embankments across the flood plain to accommodate the Raleigh Highway Deviation; (ii.) that potential was recognised by the parties; (iii.) that potential was readily realisable by the Respondent in the course of undertaking the approved Highway Deviation works; (iv.) realistically speaking, the Respondent was the only possible purchaser of that potential; and (v.) that potential increased the value of the compulsorily acquired land over its existing use value. 77. In my opinion, the evidence overwhelmingly supports affirmative findings in respect of each of these matters. In so concluding, in respect of matter (iv), I would emphasise the magnitude of the extraction activity to obtain the fill material within the relatively brief period anticipated for construction of the Highway Deviation. It is this aspect of the potential of the compulsorily acquired land that dramatically distinguishes it from its very different and far less valuable potential as a commercial quarry to be operated in the manner anticipated by Mr Robertson's alternate quarry valuation exercise limited to the approved recommencement of the disused quarry, including its modest expansion (namely allowing for the extraction of some 110,00 m3 of fill over a period of five to six years to meet the needs of the local community). Indeed the Respondent's expert, Mr Reed, estimated the annual demand for the conventional quarry to be 10,000m3. This is to be contrasted with the extraction of 500,000m3 by the Respondent from the acquired land within 1-2 years immediately following acquisition. Clearly, apart from the Respondent's need for the massive amount of fill material from the applicant's land, there was no market for its special potentiality. 78. Having so concluded that as a matter of valuation and legal principle, Mr Robertson's "Raja" valuation is a valid exercise, I must at once consider the formidable legal objections raised by the Respondent denying the availability of a "Raja" valuation on the facts of the present case. C. RESPONDENT'S LEGAL OBJECTIONS TO THE RAJA VALUATION 79. Since I have had the benefit of the Respondent's written submissions, I should, in deference, set forth the entire submission— I. The "Raja's Case" Claim A. No claim to compensation on a basis involving valuation of the resumed land as a source for fill material of the quantity used in the Raleigh Deviation is available: 1. The Land Acquisition (Just Terms Compensation) Act, 1991 precludes the claim. Reference is made, in particular, to s.54 ("justly compensate"), s.55 ("the following matters only…market value"), s.56 ("willing but not anxious buyer", "disregarding…any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose…"). 2. It is not necessary to refer to either the so-called "Pointe Gourde Principle" or "Raja Principle". 3. If reference is to be made to either of those principles the appropriate one is the Pointe Gourde Principle. 4. The Raja's Case A.C. 302 deals with the circumstances in which there is no market for the land because the resuming authority is the only purchaser. The Pointe Gourde Case A.C. 565 determines that "compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition". 5. Emerald Quarry Industries Pty Ltd v. Commissioner of Highways (1976) 43 LGRA 316 and 273 and Collins v. Livingstone Shire Council (1972) 127 CLR 477 compel a decision on this issue in favour of the respondent. 6. There was a market for the Perry land. A potential buyer may have been the RTA. The RTA is part of the market. However, the RTA is to be seen as simply part of the ordinary market. The RTA would not pay more than anyone else buying the land. Any attribution to the RTA of a willingness to pay more offends the Pointe Gourde Principle and attributes a valuation which is no longer market value. If cases such as Sharpe v. Forbes S.C.; Astron Properties Pty Ltd v. Department of School Education and Croghan v. Hawkesbury CC are authority for some other principle of valuation, they are wrongly decided. However the true underlying proposition of those cases is that the market is to be understood as including the acquiring authority, so that the value of the land in the market must be ascertained taking that fact into account. The final bid fixes the hypothetical value and that bid need do no more than exceed the next highest. A single dollar may be enough. 7. The relevant public purpose for the present resumption was the purposes of the Roads Act, 1993. That public purpose included the making of the road and the procuring of materials therefor. 8. Roadmaking is a process of cutting and filling. That is all that the RTA did in the present case. This is not a case of procuring metal from a mine for use in guard rails. It is not even a case of procuring blue metal from a quarry for road surfacing. In reality the process is simply one of removing material from places where it is in the way and using it to fill up elsewhere. 9. The motive for the acquisition is irrelevant. The purpose was to put a road on the land. Cut and fill methods were means to achieve this result. Whether the use of the land to provide cut material to fill adjacent land was a major or minor consideration cannot be to the point. (Notwithstanding this submission Mr Steven's" evidence is discussed under the heading "The Purpose of the Acquisition" later in this document.) 10. In any event, the obvious major purpose (ultimately) was to construct a four lane highway in a continuous line with minimum curves from the point where the works originally proposed would have terminated at the Man Arm Creek (b) (i) If Raja's Case is relevant at all, it is simply in that a valuation is to be made based on what the relevant authority would pay "in a friendly negotiation" to acquire for the resuming purpose (Raja's Case at p.330). A value based on a royalty is not permissible. As the Privy Council said (p.330) the resuming authority would not "pay anything like that sum". In the present case such a value could not be more than a value determined by reference to what others might pay for the same land in the same market. (See also Emerald Quarry at p.282). (ii) This is wholly consistent with what Gibbs J. said in Collins v. Livingstone Shire Council (1972) 127 C.L.R. 477 at p.497. Any value sought to be attributed to fill for use as part of the public purpose must be disregarded. That would be recognising an enhanced value flowing from "work done under the scheme on other land" (p.498). 80. It is necessary to separately consider each of these objections, although where it is possible to group related objections, I shall so deal with the objections. Objection (i) Section 56(1)(a) of the Just Terms Act Section 56(1) is in the following terms: 56. (1) In this Act: "market value" of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired; and (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired; and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law. 81. The Respondent's argument based upon s 56(1)(a) is to the effect that there must be excluded from the price of the hypothetical sale "any increase in the value of the land caused by the proposal to carry out the public purpose for which the land was acquired". 82. Since Mr Robertson's "Raja" valuation is based upon the special potentiality of the land in the hands of the Respondent to provide the source of the vast quantity of fill material required for the construction of the embankments across the flood plain, it follows, so the Respondent's argument goes, that the increase in value above the agreed "existing use" market value, must "be caused by the proposal to carry out the public purpose for which the land was acquired" within the meaning of s 56(1)(a) and that increased value must, conformably to the section, be disregarded in determining the price for the land in the hypothetical sale. 83. It is at once to be noted that this argument is indistinguishable from the resuming authority's argument in Raja that was decisively rejected by the Privy Council. This initial observation of course does not conclude the question, which is to be answered as a matter of statutory construction of s 56(1)(a) of the Just Terms Act. 84. However, the observation remains pertinent because of (i) the obvious comparability of s 56(1)(a) with the statutory provisions governing the assessment of compensation in consequence of the compulsory acquisition of land considered in Raja (which the Privy Council held to be not materially different from the English Land Clauses Act of 1845 prior to the coming into force of the English Acquisition of Land (Assessment of Compensation) Act 1919 (see 311); and (ii) the legislative antecedents of s 56(1)(a) together with the established judicial interpretation of such provisions. 85. I commence my consideration of s 56(1)(a) by examining its legislative antecedents, namely s 124 of the Public Works Act 1912 which provided: For the purpose of ascertaining the purchase money or compensation to be paid, regard shall in every case be had not only to the value of the land to be purchased or taken, but also to the damage (if any) caused by the severing of the lands taken from other lands of the owner, or by the exercise of any statutory powers by the Constructing Authority otherwise injuriously affecting such other lands; and the same shall be assessed according to what is found to have been the value of such lands, estate or interest at the time notice was given, or notification published, as the case may be, and without the amount of the valuation notified to such claimant being binding in any way in relation to the assessment, and without reference to any alteration in such value arising form the establishment of railway or other public works upon or for which such land was resumed. (Emphasis added). 86. The emphasised words of s 124 have been the subject of considerable judicial exegesis. In Woollams v. The Minister (1957) 2 LGRA 338 Hardie J gave detailed consideration to the legislative history of the statutory phrase and to the proper meaning of the phrase. 87. His Honour considered the meaning of the words "the establishment of railway or other public works upon or for which such land was resumed" in the following passages at 344/345: The phrase "the establishment of railway or other public works upon or for which such land was resumed" creates some difficulty; it was used in the corresponding section of the Public Works Act 1900 (s 117) but did not appear in the Public Works Act 1888 (see s. 24) nor in the Land for Public Purposes Acquisition Act 1880 (see s.18). The relevant provisions of the two last-mentioned Acts followed closely the corresponding section of the English Land Clauses Consolidation Act 1845 (Imp.). It would seem that the phrase was taken into s.117 of the Public Works Act 1900, from s. 45 of the Government Railways Act 1858, where it appeared in language identical with that used in s. 117, except that the words "Upon or for which such land was resumed" were not used. Section 45 of the Government Railways Act came up for consideration by the Supreme Court in Black v. Commissioners for Railways (1890) 11 L.R. (N.S.W.) 160. Darley C.J. (1890) 11 L.R. (N.S.W.), at p.162. stated the effect of the section in these words:— "The jury must ignore the increased value given to the land by the fact of the railway being constructed". Innes J., after indicating that the material portion of the section was "somewhat awkwardly expressed", went on to state that "the land is to be assessed at the value it would have had if the railway for which it was resumed had never been contemplated". All circumstances affecting value must be taken into consideration, he said, "except the effect upon it of the railway for which it is taken" (1890) 11 L.R. (N.S.W.), at p.165. The draftsman of s. 117 of the Public Works Act 1900, appears to have introduced into the concluding portion of that section the part of s. 45 of the Government Railways Act 1858, considered in Black's Case (above), and to have sought to remove from it the awkwardness of expression referred to in the judgment of Innes J., by adding words adopted from the portion of that judgment quoted above, i.e., the words "for which it is taken". However, the introduction of the words "upon or" before the words "for which" would appear to have confused rather than to have clarified the position. ……… For the purposes of the present case the material provision is to be found in the words "without reference to any alteration in such value arising from the establishment of … public works … for which such land was resumed". Properties resumed for public works are normally acquired during the period between the date on which the works are authorised and the date on which they are completed. In some cases they are acquired before any construction work (whether buildings or earthworks) commences; in other cases they are acquired whilst construction is proceeding. In either type of case the acquisitions of properties are part of the process of establishing the public works, just as the carrying out of construction work is part of that process. It matters not whether the construction work is to be carried out on the resumed properties, so long as those properties will ultimately constitute part of the public works. 88. The meaning he ascribed to the final phrase in s124 is stated in the following passage at 345: For the foregoing reasons I am of opinion that s.124 requires the value of the subject property to be determined without regard to any effect on such value of the decision of the Board to establish the Warragamba Storage Dam project, i.e. its proposed establishment, and without regard to any effect on such value of the various steps taken by the Board up to the date of resumption, such as other resumptions and the like, in the process of establishing the project. 89. Finally, at 345 Hardie J noted that case law decided on the English Land Clauses legislation (which contained no express counterpart to the final phrase in s124 of the Public Works Act) had established principles of compensation law having the same practical effect as that he ascribed to that phrase. Pointe Gourde is included in the cases cited by his Honour in that behalf. 90. In San Sebastian Pty Ltd v.Housing Commission of New South Wales (1977) 37LGRA 191, Hope JA at 203 considered the scope of the final phrase in s124 in the following passage: The next question concerns the scope of the matters preceding the date of resumption which fall within the ambit of the qualification. That it can apply to matters other than the actual construction of the works, notwithstanding the literal meaning of the provision, has been long accepted: Black v. Commissioner for Railways (1890) 11 N.S.W.R. (L.) 160.; Woollams v. The Minister (1957) 2 L.G.R.A. 338, at pp. 345-346). The provision seems to have its origin in, or to be similar to, the meaning attributed by judicial interpretation to the word "value" in compensation statutes not containing such a qualification: see, e.g. Pointe Gourde Quarrying and Transport Co. Ltd v. Sub-Intendent of Crown Lands [1947] A.C. 565; Rugby Joint Water Board v. Shaw-Fox [1973] A.C. 202, at pp. 213-215. The decision to go ahead with the proposal or scheme which has resulted in the resumption of the land is clearly within the ambit of the qualification, at any rate where that decision is made by the authority which is to carry out the works, or by someone in a position to require that authority to carry out the works. But such a decision is almost inevitably preceded by actions of many kinds which, if known, show that the works will possibly or probably be carried out. If they are actions by the authority who finally decides to carry out the works, or by someone who is entitled to require their carrying out, and if they are part of a series of actions leading up to, and done in contemplation of, the making of the decision to construct the works, any alteration to the value of the land resulting from them should, in my opinion, fall within the ambit of the qualification. In Rugby Joint Water Board v. Shaw-Fox [1973] A.C. 202, at p. 215, Lord Pearson used the expression "genesis … of the scheme" to describe actions of the kind I am seeking to define. In describing the effect of the qualification, Innes J. said in Black v. Commissioner for Railways (1890) 11 N.S.W.R. (L.) 160, at p. 165: "…the land is to be assessed at the value it would have had if the railway for which it is resumed had never been contemplated." The learned judge must have intended "contemplated by the Commissioner for Railways or other authority entitled to require the Commissioner to construct the railway". In my opinion Innes J. correctly construed the qualification, and actions which form part of such a "contemplation" and which affect value require its application. Whether any particular action is of such a kind is a question of fact in each case: cf. Fraser v. City of Fraserville [1917] A.C. 187, at p. 194. 91. On appeal to the High Court of Australia (140 CLR 196) Jacobs J at 205 said of the statutory phrase: This provision states in statutory form a principle which has been developed in the cases independently of express statutory provision. See Pointe Gourde 92. As Mahoney JA observed in Gosford Shire Council v. Green (1980) 48 LGRA 205 at 209, the position in English land compensation law has been established by judicial decision on the meaning of the phrase "value of the land taken" rather than by legislation. In England, the relevant principle is known as the "Pointe Gourde" principle which is found in the following statement by Lord MacDermott, speaking for the Privy Council in Pointe Gourde Quarrying and Transport Co Ltd v. Sub-Intendent of Crown Lands (1947) AC 565 at 572: ….It is well settled that compensation for compulsory acquisition cannot include an increase in value which is entirely due to the scheme underlying the acquisition. As was put by Eve J in South Eastern Railway Co. v. London County Council (1915) 2Ch 252 at 258 "Increase in value consequent on the execution of the undertaking for or in connection with which the purchase is made must be disregarded". 93. In the cited case, Eve J had said: the following propositions may, I think, be treated as established by authorities binding on this Court: (1.) The value to be ascertained is the value to the vendor, not its value to the purchaser; (2.) in fixing the value to the vendor all restrictions imposed on the user and enjoyment of the land in his hands are to be taken into account, but the possibility of such restrictions being modified or removed for his benefit is not to be overlooked; (3.) market price is not a conclusive test of real value; (4.) increase in value consequent on the execution of the undertaking for or in connection with which the purchase is made must be disregarded; (5.) the value to be ascertained is the price to be paid for the land with all its potentialities and with all the use made of it by the vendor; and (6.) the true contractual relation of the parties—that of purchaser and vendor—is not to be obscured by endeavouring to construe it as another contractual relation altogether—that of indemnifier and indemnified. 94. In Rugby Joint Water Board v. Shaw Fox (1973) AC 202, the House of Lords considered the Pointe Gourde principle, Lord Pearson tracing the origins of the principle to 1870 in the decision in Stebbing v. Metropolitan Board of Works (1870) 6 QB 37. 95. It is to be noted that all the old cases cited by Lord Pearson were decisions concerning the Land Clauses Act 1845 to which the relevant Indian statute was readily assimilated by the Privy Council in its decision in Raja. Moreover, the same decisions were themselves extensively considered in Chesterfield Gas & Water Board and in Raja. 96. Although not cited in Raja the decision of Eve J in South Eastern Railway relied upon by the Privy Council in Pointe Gourde as providing the relevant principle, is itself in the same class of cases decided under the Land Clauses Act 1845, which were comprehensively considered in Raja. The point to be made is simply this, that Raja though principally concerned with the question of value of special potentiality, was also vitally concerned with the doctrine later to be known as the Pointe Gourde principle. 97. Coming then to the Pointe Gourde case itself, it is important to note that the relevant Land Acquisition Ordinance 1941 of Trinidad was substantially in the same terms as the then present English Act, the Acquisition of Land (Assessment of Compensation) Act 1919. That Act, which had been enacted following the Report of the Scott Committee dealing with the Law and Practice Relating to the Acquisition and Valuation of Land for Public Purposes: Cd. 9229 (1918) had attempted to limit compensation payable for the "special suitability or adaptability" of the land taken by stipulating the following Rule for assessing compensation. The special suitability or adaptability of the land for any purpose shall not be taken into account if that purpose is a purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser or the requirements of any Government Department or any local or public authority. 98. The Sixth Edition (1922) of Cripps" "Principles of the Law of Compensation" doubted the efficacy of this Rule but was inclined to the view that the purpose was to require the purpose to be one for which there was a market of more than one purchaser excluding all public bodies. 99. In Pointe Gourde, the Privy Council at 571 noted that the 1919 Act had been designed "to modify the effect of certain decisions of the Courts relating to the quantum of compensation in cases of compulsory purchase". 100. In the event, the Privy Council held that the relevant rule prescribed by the Ordinance relating to "special suitability" etc of the land did not apply to the facts of the case holding that in the statutory phrase, the word "purpose" meant "a purpose to which the land can be applied. It therefore connotes a use, actual or potential, of the land itself, and cannot be regarded as meaning a purpose which is only concerned with the use of the products of the land elsewhere" (572). 101. It was only after so concluding that the Privy Council went on to hold that the award of $15,000 "for special adaptability" must be disallowed because it could only be related to the additional value which was given to the quarry land by the scheme for which the land was acquired, namely for the establishment by the United States of a naval base in Trinidad. It was in this context that the Privy Council applied the dictum of Eve J in South Eastern Railway Co. to disregard any increase in value "consequent on the execution of the undertaking for or in connection with which the purchase is made". 102. In Emerald Quarry Industries Pty Ltd v. Commissioner of Highways (1979) 142 CLR 351, the High Court considered the true effect of s25(h) of the South Australian Land Acquisition Act 1969 which relevantly provided: no allowance shall be made for any enhancement or diminution in the value of the land in consequence of— ……… (c) any proposal to execute the authorised undertaking, or any expectation that it will be executed 103. The principal argument advanced by the appellant that s25(h) was intended to give a new and restricted application to the established principle re-affirmed in Pointe Gourde, was decisively rejected by the High Court—see at 356 per Gibbs J and at 367 per Mason J (with whom all members of the Court agreed) the latter saying at 367: The principle which underlies s. 25 (h) is one of long standing. It denies to the dispossessed owner the benefit of an enhancement in value and the disadvantage of a diminution in value which would flow from the execution of the undertaking. It was a rule of the common law which did not depend upon statute: Fraser v. City of Fraserville [1917] A.C. 187. As Lord MacDermott said in the Pointe Gourde Case [1947] A.C., at p. 572: "It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition." 104. The other principal argument advanced by the appellant was that the trial judge had misapplied the relevant principle by excluding from the valuation (based upon the capitalisation of estimated annual maintainable profits of the quarry) sales of quarry products (i) either to the highway authority itself when the construction of the proposed highway approached the quarry site, or (ii) to an expanded range of customers by virtue of the increased development likely to occur in the neighbourhood of the quarry by virtue of the existence of the highway. 105. The High Court held that the trial judge had not misapplied the principle, Gibbs J saying at 356/357: The Pointe Gourde principle has been frequently expounded and discussed, but for present purposes it is enough for me to cite two statements of the principle. In Fraser v. City of Fraserville [1917] A.C. 187, at p.194: "…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". And in Melwood Units Pty. Ltd. v. Commissioner of Main Roads [1979] A.C. 426, at p. 434, Lord Russell of Killowen said: "Under the principle in Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands… the landowner cannot claim compensation to the extent to which the value of his land is enhanced by the very scheme of which the resumption forms an integral part: that principle in their Lordships" opinion operates also in reverse." The scheme underlying the acquisition in the present case was the building of a freeway. It is clear that any enhancement to the value of the land caused by the building of the freeway should be disregarded. It seems to me to follow that if the building of the freeway had the result that population in the area increased, and that a wider market became available for the products of the quarry, the effect of those circumstances on the value of the business, and thus on the value of the land, must be disregarded. 106. It is noteworthy that in the High Court, no case had been mounted for a value reflecting the special adaptability of the quarry for the needs or purposes of the acquiring authority. In these circumstances, it is not surprising that Raja is not cited, either in the argument or the reasons for the Court's judgment. 107. However, interestingly, Raja is cited in the judgment of the South Australian Full Court at an earlier stage in the proceedings when that Court determined questions of law that had been referred to that Court by the trial court: see Emerald Quarry Industries v. Commissioner of Highways (1976) 14 SASR 486. In answering affirmatively the question "whether s.25(h) of the Land Acquisition Act had any application to the claim", Chief Justice Bray, did make reference to Raja (and two more recent Canadian decisions) in the following passage at 497: I should say, however, that there was some discussion about the principles applied in the decision of the Privy Council in Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam [1939] A.C. 302 and by the Canadian Courts in Fraser v. The Queen (1963) 40 D.L.R. (2d) 707 and in Re Friesen (1968) 68 D.L.R. (2d) 171. In the Indian case the Privy Council held in effect that when the land has some peculiar potentiality the owner must be compensated in respect of that potentiality notwithstanding that the only possible exploiter of it, and hence the only hypothetical purchaser who would be willing to pay something extra for it, is the acquiring authority itself. The same principle, as I see it, was applied in the case of Fraser v. The Queen (1963) 40 D.L.R. (2d) 707. In the second Canadian case of Friesen (1968) D.L.R. (2d) 171 the Court of Appeal of Saskatchewan might have intended to go somewhat further and to hold that consideration can in some circumstances be given to increased value due to such special suitability or adaptability arising solely in respect of the scheme of the expropriating authority and that where quarrying land is taken to obtain gravel for use in highway construction the compensation should be based on the taking of a gravel pit rather than on the taking of agricultural land. The Court purported to follow Fraser's case (1963) 40 D.L.R. (2d) 707, which was a decision of the Supreme Court of Canada, and I doubt if they really intended to go beyond it. If they did, I would not, with respect, accompany them. There is no mention in the report of any statutory equivalent to our s. 25 (h). I do not doubt that the principle laid down in Vyricherla's case [1939] A.C. 302 and Fraser's case (1963) 40 D.L.R. (2d) 707 would apply here if there were any facts to call that principle into operation. So far as I can see there are none. 108. The Chief Justice had earlier observed (at 496) after discussing the Pointe Gourde principle ("a general proposition of law….made specific in s25(h)") that the case was concerned with that subsection and "not the special suitability subsection (s25(e))" 109. In my opinion the Chief Justice's observations on Raja, and particularly his citation of the Canadian cases applying the "Raja" principle, provides the key to properly understanding the true ambit of the "Raja" principle and the "Pointe Gourde" principle, and to dissolving what otherwise may appear to be a fundamental conflict between the two Privy Council decisions on the question of the value of a "special potentiality, adaptability or suitability" of the land that is compulsorily acquired. 110. The apparent conflict between the two principles is nowhere better illustrated than in the majority and dissenting, judgments of the Supreme Court of Canada in Fraser v. The Queen (1963) 40 DLR (2d) 707 where land was expropriated for the purpose of supplying a suitable supply of rock for the building of a public causeway. 111. The relevant facts of the case as succinctly stated by Cartwright J at 709, were as follows: On July 9, 1952, when the appellant's lands were expropriated for the use of Her Majesty in the right of Canada it was already known (i) that the causeway was to be built, (ii) that approximately 9 million tons of rock would be required as material to be used in its construction, (iii) that rock admirably suited to this purpose and in excess of the amount required was contained in the appellant's land, (iv) that its location was such that the costs of quarrying and transportation would be less than in the case of any rock in other locations belonging to other persons, and (v) that there were ample other possible sources of supply although because of their location none would be equally economical. The lands of the appellant were not required to form any part of the bed of the causeway or the approaches thereto; the purpose of the expropriation was simply to obtain a suitable supply of rock. Apart from the requirements for the causeway there was no probability of the appellant selling any substantial quantity of his rock in the foreseeable future. The value of the expropriated land if all possibility of selling the rock contained in it was disregarded was about $50 per acre. A prudent contractor bidding on a contract the performance of which would require great quantities of rock to be supplied by him would have been willing to offer and pay from 5c to 7½c per ton for suitable rock in situ in a convenient location. 112. On these facts, the Court was faced with "two sharply conflicting views as to what should be paid to the appellant for 9 million tons of rock" (709), the appellant contending that he should receive the market price for the rock required and the respondent contending that "there would have been no market for the rock apart from the building of the causeway and that the appellant is entitled only to the lower value of the land considered as wasteland" (709). 113. Cartwright J expressed the view that it "was plain" that the contention of the appellant was correct, were if not for a 19th century decision of the Supreme Court. However, Cartwright J held that that earlier decision was inconsistent with the decision in Raja. Accordingly, he held the appellant to be entitled to the fair market for the quarry of the rock taken from the expropriated land (711). 114. The leading majority judgment was given by Ritchie J who, in my respectful opinion, in the following passage at 722 provides an illuminating analysis of the effect of the Pointe Gourde principle on an undeveloped potentiality of expropriated land: The respondents counsel contends that the only potential value of the expropriated lands over and above their "bare ground" value was "solely and exclusively related to the scheme of constructing the causeway" and should accordingly have been excluded in fixing the value for the purposes of compensation. The leading authorities cited in support of this contention are: Cedars Rapids Mfg. & Power Co. v. Lacoste, 16 D.L.R. 168, [1914] A.C. 569; Fraser v. City of Fraserville, 34 D.L.R. 211, [1917] A.C. 187, and Pointe Gourde Quarrying & Transport Co. v. Sub-Intendent of Crown Lands, [1947] A.C. 565. None Of these cases is, in my opinion, authority for the proposition that a hitherto undeveloped potentiality of expropriated property is to be entirely disregarded in fixing the value of that property for compensation purposes on the ground that the expropriating authority is the only present market for such potentiality and that it has developed a scheme which involves its use. These cases do, however, make it plain that the amount fixed by way of compensation must not reflect in any way the value which the property will have to the acquiring authority after expropriation and as an integral part of the scheme devised by that authority. 115. Later, at 724 following a detailed analysis of the decision in Pointe Gourde, Ritchie J reiterates the conclusion he had earlier expressed when he says, expressly adopting the reasoning in Raja at 322/323: The exclusion from the Court's consideration of "increase in value consequent on the execution of the undertaking" to build a causeway and of any value based on the Crown acting under compulsion as a necessitous purchaser, does not mean that the value of the special adaptability to the owner at the date of expropriation is to be disregarded. 116. The dissenting judgment of Judson J is also noteworthy because it amply attests to the inherent complexity in the interplay between the Raja principle and the Pointe Gourde principle. Judson J was of the opinion that the Pointe Gourde principle was "directly in point" (718), his reasons for this opinion having been earlier stated in the following passage commencing at 715: Any increase in value over $50 per acre was entirely the result of the scheme no matter what date one chooses to look at the problem. The $40,000 that the trial Judge awarded was just as clearly in this classification as the $1 million which the appellant claimed in his defence. These lands had no value for their special adaptability (sic) for the purpose of quarrying in general, but only for the purpose of quarrying for the needs of the causeway. The scheme and nothing else created the special adaptability in this case and I do not think that the expropriating authority is to be charged for the value which it and it alone brought into being. The appellant's case to me depends upon the unacceptable principle that there is a value to him for which he should be compensated because of the needs and purpose of the expropriating authority. These needs and the purpose are unique. No one else had these needs and no one else could have used the rock for that purpose. The Crown was expropriating some 12 acres of land for the purpose of opening up a quarry. It is the purpose and the use of the rock that creates value. Yet the appellant is claiming compensation as though the power of expropriation had not been exercised and he had been left to deal with a private undertaker upon whom he could have imposed his own terms, within the limits of competition. There is only one possible source of value in this case over and above the $50 per acre, and that must be based, not on value to the owner, but on value to the taker. 117. In so concluding Judson J had earlier paid obviously scant regard to Raja. Having noted that the trial judge had followed Raja in rejecting the Crown's argument, "that any increase in the value above the base market value of $50 per acre as waste land was entirely attributable to the scheme and should be disregarded in assessing compensation" (714), Judson J stated that the judgment in Raja had been based upon disapproval of the dictum of Fletcher Moulton LJ in Chesterfield Gas and Water Board and the adoption of the contrary opinion of Vaughan Williams LJ (715). 118. With great respect to the reasoning adopted by Judson J, he has set aside the principle established by Raja by in effect reviving the opinion of Fletcher Moulton LJ in Chesterfield, being the very opinion that the Privy Council expressly disapproved in Raja. 119. I would respectfully decisively prefer the majority judgment of Ritchie J in Fraser, which in my opinion, most satisfactorily elucidates both the Raja principle and the Pointe Gourde principle, and the interplay of those principles in a given case (in the same manner that Raja itself had dealt with the principles). In some cases, such as Emerald Quarry, there will simply be no interplay because the claim to compensation is not advanced on the basis of the value of the special potentiality, adaptability or suitability of the acquired land and accordingly, the Raja principle will have no application on the facts. In other cases, (such as Raja and Fraser) there is an interplay, but the Pointe Gourde principle will not operate so as to require to be disregarded in determining value "the undeveloped potentiality of the expropriated property on the ground that the expropriating authority is the only present market for such potentiality and that it has developed a scheme which involves the use of that potentiality" (Fraser at 722). 120. The foregoing analysis of the Raja principle and the Pointe Gourde principle, and the interplay of the principles, is supported by the High Court of Australia in its decisions in Geita Sebea v. Territory of Papua (1941) 67 CLR 544 and Collins v. Livingstone Shire Council (1972) 127 CLR 477. 121. Collins is particularly noteworthy because in that case both the Privy Council decisions in Raja and Pointe Gourde are cited and applied. 122. Walsh J at pp 490 and 491 distilled the following principles from Raja which he held to be applicable to the assessment of compensation in the case before the High Court: What had to be assessed was the value at the date of acquisition of the land with any improvements then upon it. The value of the land to the owner had to be ascertained, by considering "the price which a willing vendor might reasonably expect to obtain from a willing purchaser". In Raja Vyricherla Narayana Gajapatiraju v. Reneue Divisional Officer, Vizagapatam [1939] A.C. 302, at p. 312, their Lordships, after using the expression which I have just quoted, went on the say: "The disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy must alike be disregarded. Neither must be considered as acting under compulsion. This is implied in the common saying that the value of the land is not to be estimated at its value to the purchaser. But this does not mean that the fact that some particular purchaser might desire the land more than others is to be disregarded. The wish of a particular purchaser, though not his compulsion, may always be taken into consideration for what it is worth". Later their Lordships said (1) that if land possesses special features as regards its position or its potentialities, what has to be ascertained by the arbitrator as best he may from the materials before him is what a willing vendor might reasonably expect to obtain from a willing purchaser "for the land in that particular position and with those particular potentialities". Their Lordships decided, also, that that principle applies where there is but one potential purchaser and it applies if that potential purchaser is the authority which possesses compulsory powers of acquisition. 123. Gibbs J (as he then was) cites Pointe Gourde in the following passages commencing at p 497: But although the appellants are entitled to the value of the land with the structures thereon, it does not follow that the structures must be valued as though they formed part of a completed reservoir. In Pointe Gourde Quarrying and Transport Co. Ltd v. Sub-Intendent of Crown Lands [1947] A.C. 565, at p. 572, Lord MacDermott said: "It is well settled that compensation for the compulsory acquisition of land cannot include an increase in value which is entirely due to the scheme underlying the acquisition. As it was put by Eve J. in South Eastern Railway Co. v. London County Council: [1915] 2 Ch. 252, at p. 258 "Increase in value consequent on the execution of the undertaking for or in connexion with which the purchase is made must be disregarded"." This principle there laid down has been discussed and applied in many cases, of which the most recent appears to be the decision of the House of Lords in Rugby Joint Water Board v. Shaw-Fox [1973] A.C. 202. In the present case the scheme underlying the acquisition provided for the construction of a complete reservoir. In so far as the work done in pursuance of that scheme was done on the land of the appellants, I have already pointed out that it cannot be disregarded for it affected the condition of the land itself. However, in so far as the work done under the scheme on other land had the effect of further enhancing the value of the appellants" land, it has to be disregarded. In other words, the appellants were entitled to be awarded the value of the land in its actual condition at the time of resumption and with all the potentialities it had at that date, but without any increase in value due to the fact that the construction of the reservoir and fence had been completed. The Land Court and the Land Appeal Court were therefore required to indulge in a flight of the imagination and to value the land on the assumption that no part of the reservoir or the fence had been erected on the adjoining lands. The facts stated in the case show that the section of the reservoir erected on the subject land could not have been put to any profitable use by itself and that the cost of removing it would have exceeded the value of the land on which it stood. Nevertheless it is possible, if not probable, that an uncompleted portion of the reservoir standing on the appellants" land could have been extended into a complete reservoir by the doing of further work on the adjoining lands. If so, this potentiality for development had to be valued. The case stated does not reveal whether, or with what difficulty or cost, an uncompleted concrete retaining wall and base could have been used in the construction of a complete and useable reservoir, but evidence on this aspect of the matter would be necessary to enable a court to assess the value of the potentiality of the portion of the reservoir to be converted into a whole. Obviously no difficulty existed in relation to the extension of the fence. It appears from the case stated that there were other sites in the area on which a reservoir could have been built. However, if it would have been possible to put the part of the reservoir on the appellants" land to substantial use in the construction of a complete reservoir, this potentiality would obviously have given the appellants" land an advantage over vacant lands in the area. 124. His Honour next proceeds to cite Raja in the following passages at 498: It further appears from the case stated that the reservoir could not have been put to use by anyone other than the respondent. The fact that the respondent would have been the only possible purchaser of the land with its potentialities for development into a completed reservoir does not mean that the appellants must only be allowed the unimproved value of the land. That this is so is now well established. In Raja Vyricherla Narayana Gajapatiraju v. Reneue Divisional Officer, Vizagapatam [1939] A.C. 302, at p. 323, in a well-known passage, Lord Romer said that: "even where the only possible purchaser of the land's potentiality is the authority that has obtained the compulsory powers, the arbitrator in awarding compensation must ascertain to the best of his ability the price that would be paid by a willing purchaser to a willing vendor of the land with its potentiality in the same way that he would ascertain it in a case where there are several possible purchasers …" In Geita Sebea v. Territory of Papua [1941] 67 C.L.R. 544 this Court acted on the same view. 125. What is notable from these judgments in Collins is the fact that the High Court recognised that the resumed land possessed a special potentiality (by virtue of the existence of that part of the dam that had been constructed by the resuming authority prior to resumption on that land) which enhanced the value of that land, notwithstanding that (i) that special potentiality was of no value to the landowner (498); (ii) that special potentiality could be put to use only by the resuming authority (498); and (iii) the scheme underlying the acquisition provided for the construction of a complete reservoir (497). 126. The application of the Pointe Gourde principle was confined, in the judgment of Gibbs J, to excluding any increase in value of the resumed land "due to the fact that the construction of the reservoir and fence had been completed" (on the adjoining land). 127. As pointed out by Gibbs J in Collins, the earlier High Court decision in Geita Sebea proceeded on the same view as had been adopted in Raja. In Geita Sebea the special potentiality of the acquired land lay in the fact that it had been developed by the Crown, pursuant to a lease, as an aerodrome, and that potentiality was only realisable by the Crown, being the acquiring authority, which had acquired the land for the purpose of an aerodrome. The High Court held that the compensation payable in respect of the value of the resumed land should include the value of the special potentiality of the land for use as an aerodrome. In so holding, the Court expressly followed the decision in Raja. 128. Although Geita Sebea was decided before the Privy Council decision in Pointe Guarde, it is noteworthy that the relevant Land Acquisition Ordinance 1914 contained provision similar to that contained in the final phrase in s124 of the NSW Public Works Act. 129. Starke J, after quoting the relevant provisions of the Ordinance stated at 551: The principle upon which compensation is assessed is the same as in English law. It is the value that a willing vendor might reasonably expect to obtain from a willing purchaser for the land with all potentialities, but any enhanced value attaching to the land by reason of the fact that it is being compulsorily acquired for the purpose of the acquiring authority must be disregarded (Cedars Rapids Manufacturing and Power Co. v. Lacoste (1914) A.C. 569; Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam (1939) A.C. 302. 130. In the same case, Williams J also cited Raja in the following passage at 557: The Crown stressed the fact that under the peculiar circumstances of this case it was the only possible purchaser, but even so, as pointed out by the Privy Council in Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam (1921) 2 A.C. 399, "if the potentiality is of value to the vendor if there happen to be two or more possible purchasers of it, it is difficult to see why he should be willing to part with it for nothing merely because there is only one purchaser. To compel him to do so is to treat him as a vendor parting with his land under compulsion and not as a willing vendor. The fact is that the only possible purchaser of a potentiality is usually quite willing to pay for it". 131. At 558 Williams J explained the "special potentiality" of the acquired land by virtue of the existence thereon of the built aerodrome, saying: It is true that the Crown was free to acquire other suitable lands of the same dimensions and construct an aerodrome there, but to do so would require considerable outlay, so that the resumed lands had the potentiality that, having been improved to the extent already mentioned, the Crown would be willing to acquire them for their agricultural value plus the value of the expenditure already made rather than to have to purchase other lands at their agricultural value and then have the trouble and expense of improving them to the same extent. Assuming therefore, that the appellants were willing vendors and the Crown was a willing purchaser the price would be determined having regard to the fact that the vendors would know that the Crown would pay this amount but no more, and the Crown would know that the vendors could reasonably expect this price 132. In Anthony v. The Commonwealth of Australia (1973) 29 LGRA 61, Walsh J determined compensation in accordance with the then recent High Court's decision in Collins and at 79 declined to entertain submissions that had been advanced by the defendant suggesting limitations that may need to be placed upon the applicability of the Raja principle and upon the ambit of the "potentialities" to which that principle is to be applied. 133. It follows from the foregoing discussion that the Pointe Gourde principle has been held by the High Court of Australia on at least two separate occasions, not to exclude the value of the special potentiality or suitability or adaptability of compulsorily acquired land even where that special potentiality is only realisable in the hands of the acquiring authority, and even where that special potentiality etc is relevant to the public purpose for which the land is compulsorily acquired. In so concluding, the High Court has applied the Raja principle just as did the Canadian Supreme Court in Fraser. It inevitably follows that the Raja principle has not been abrogated or displaced by the Pointe Gourde principle (the origins of which predate Raja and date back to the 19th Century). Nor has it ever been held to be abrogated or displaced by legislation along the lines of s124 of the Public Works Act, although it has been abrogated, at least in respect of some aspects the concept of the value of "special adaptability or suitability", by legislation along the lines of s2(3) of the English Acquisition of Land (Assessment of Compensation) Act 1919 (now embodied in the Land Compensation Act 1961 (section 5 Rule 3). 134. Similar legislative abrogation to the post 1919 English Statutes is to be found in the Commonwealth Lands Acquisition Act 1989 (s60(a)), in the South Australian Land Acquisition Act 1969 (s25(e)) and in the Victorian Land Acquisition and Compensation Act 1986 (s43(1)(b)). Significantly however, there is no counterpart provision contained in the Just Terms Act. 135. It is against this extensive legislative and judicial background that the task of interpreting s56(1)(a) of the Just Terms Act is to be undertaken. 136. In my opinion, it is entirely clear, that s56(1)(a) of the Just Terms Act is intended to operate in a similar manner to the operation ascribed by judicial decisions to the final phrase formerly contained in s124 of the Public Works Act. 137. The language of the two comparable statutory provisions is very similar and to the extent that the language of s56(1)(a) is apparently wider, including not only "the carrying out of" the public purpose (cf. "the establishment of the railway or other public works") but also "the proposal to carry out the public purpose" it merely reflects the extended meaning given to the former provision by judicial interpretation—see Woollams; San Sebastian. 138. In these circumstances, I would give to s56(1)(a) the established meaning ascribed to the final phrase in s124 of the Public Works Act by the decided cases (cf. Blue Mountains City Council v. Mulcahy (1998) 100 LGERA 193 at 199 where a similar approach was adopted in respect of s56(1)(b) of the Just Terms Act by the Court of Appeal) by holding that the section does not require the special potentiality or adaptability or suitability of the acquired land to be disregarded in determining the price in the hypothetical sale even where that special potentiality etc is only realisable by the acquiring authority possessing compulsory powers (it being the only possible purchaser of that potentiality) and even where that potentiality is relevant to the public purpose for which the land is compulsorily acquired. In other words, I would interpret s56(1)(a) of the Just Terms Act conformably to the meaning ascribed in the decided cases in the final phrase in s124 of the Public Works Act and any other statutory equivalent (including the common law Pointe Gourde principle) so as not to abrogate the Raja principle concerning the value of "special potentiality or adaptability or suitability" of the compulsorily acquired land. 139. For all the foregoing reasons, I must reject the Respondent's objection based upon s56(1)(a) of the Just Terms Act. Objection (ii) Reference to either the Pointe Gourde Principle or the Raja Principle is unnecessary 140. I take this objection to be a derivative of objection (i). 141. Of course it is trite to say that the question is to be determined by the proper interpretation and application of s56(1)(a) of the Just Terms Act. However, as I have endeavoured to show in dealing with the Respondent's first basis of objection, the legislative history of the statutory antecedents to s56(1)(a) and the course of judicial authority on such antecedents, is inevitably bound to influence the interpretation of s56(1)(a). In this respect, the Pointe Gourde principle is obviously relevant to the exegesis of s56(1)(a) (Emerald Quarry) but equally so is the Raja principle (Geita Sebea; Collins; Fraser). 142. Accordingly, and for the reasons given in respect of the Respondent's first objection, I must also reject this objection. Objections (iii) and (iv) If reference is to be made to the principles in Raja and Pointe Gourde, the latter provides relevant principle 143. Again, I have dealt with this (and the related) objection in considering the Respondent's first objection. For the reasons there given, both principles may apply in a given case (Collins; Raja; Fraser) but where they do, the Pointe Gourde principle does not require "special potentiality adaptability or suitability" of the land to be disregarded even where the acquiring authority is the only possible purchaser and the special potentiality etc is related to the public purpose for which the land is acquired. The Raja principle is not abrogated. 144. Accordingly, I must reject these related objections. Objection (v) The decisions of the High Court in Emerald Quarry and Collins compel a decision in favour of the Respondent. 145. Again, I have dealt with this objection in considering the Respondent's first objection. 146. What I there said in relation to those decisions leads me to emphatically reject this objection since, as I have shown, Emerald Quarry was not a case of special potentiality etc and Collins applied both the Raja and Pointe Gourde principles in a manner that did not require special potential to be ignored in assessing compensation. 147. Accordingly, I must reject this objection. Objection (vi) There was a market for the Applicant's land and the Respondent was a potential purchaser, but it would not have paid any more than any other potential purchaser. 148. In my opinion, this objection entirely misses the crucial point that the Applicant's claim is based upon the special potentiality of the land to supply some 500,000m3 of fill for the Respondent's Raleigh Highway Deviation within a very short time frame. There was no market for such potentiality, the Respondent (or its contractors) being the only possible purchaser. The evidence of local market demand for fill material advanced by the Respondent was for 10,000m3 per annum, a far cry from 500,000m3 within 1 to 2 years. 149. Accordingly, I reject this objection. Objections (vii), (viii), (ix) and (x) The relevant "public purpose" for which the Applicant's land was compulsorily acquired was "purposes of the Roads Act 1993" and this purpose includes building the Highway Deviation and obtaining requisite fill etc for the construction. 150. As I have earlier pointed out, my evaluation of Mr Robertson's "Raja" valuation proceeds on the assumption that the Applicant's land was acquired for the "purposes of the Roads Act 1993". 151. My consideration of the "Raja" valuation is entirely independent of the Applicant's contention that the true "public purpose" for the compulsory acquisition of his land was the obtaining therefrom of the required volume of fill. 152. Hence I am content to wholly accept the Respondent's submission on the "public purpose" for which the Applicant's land was acquired. 153. However, that acceptance provides no basis for rejecting the "Raja" valuation. 154. Accordingly, I must reject these objections. 155. The remaining submissions advanced by the Respondent address the quantum of the "Raja" valuation and I shall presently deal with that issue. 156. For all the foregoing reasons I hold that none of the Respondent's objections to the validity of the "Raja" valuation or to the applicability of "Raja" to the facts of the present case has prevailed and that in consequence, I hold that Raja applies to the present case, and provides both the necessary legal and valuation support for Mr Robertson's "Raja" valuation. 157. I would emphasise that these conclusions are based upon my acceptance, at face value, of the Compulsory Acquisition Notice and in particular of the statement therein that the purpose of the Acquisition was for the purposes of the Roads Act 1993. 158. As I have earlier mentioned, a vast body of documentary and oral evidence was given concerning the evolution of the Raleigh Deviation of the Pacific Highway, including evidence adduced on the Applicant's successful application to re-open the case and to administer interrogatories (as to which see my interlocutory judgment of 16 November 1998). Based upon this evidence, the Applicant submitted that the Court would find that the true and dominant public purpose for which the Applicant's land was compulsorily acquired was for the purpose of obtaining some 500,000 m3 of fill for deployment in constructing embankments across the flood plain to accommodate the Raleigh Deviation. Moreover, as I have earlier stated, Mr Robertson also, in justification of his "Raja" valuation appeared, particularly under cross-examination to place considerable reliance upon the fact that the true and dominant "public purpose" was for the Respondent to obtain a source for the known need for fill. As earlier indicated, it appeared that Counsel for the Applicant, at least at some stage during the hearing, must have thought this factor to be vital to the Applicant's claim based upon a "Raja" valuation. 159. It may be surmised that such thinking was directed to an avoidance of any possible application of the Pointe Gourde principle, for in that very case it had been unsuccessfully argued by the appellant that "the relevant scheme was the acquisition of the quarry land and not the construction of the naval base in its vicinity" (573). In rejecting the argument, the Privy Council did not state what effect, if any, upon the relevant principle an acceptance of the appellant's argument would have yielded, but presumably it had been advanced to curtail or limit the application of the relevant principle. So here, it was submitted that if the true and dominant purpose for the acquisition of the Applicant's land was for the obtaining of fill, what s 56(1)(a), or the Pointe Gourde principle, required to be disregarded in assessing market value was any enhanced value in the land caused by the carrying out of the public purpose or the proposal to carry it out (and not the construction of the highway deviation). 160. Ultimately, in view of my primary holding on the applicability of "Raja", I do not think that I need explore the Applicant's submission in this behalf, other than to say that if I were required to determine what was the true and dominant public purpose for which the Respondent compulsorily acquired the Applicant's land, in elaboration or elucidation of the stated public purpose, namely "for the purpose of the Roads Act 1993" (cf Mulcahy at pp 199/200), I would find that there were at least two purposes, namely (i.) to obtain the required quantity of fill from the land for the purposes of the Raleigh Deviation in that section which traversed the flood plain; and (ii.) to continue that deviation north of Man Arm Creek by way of a realignment of the Highway between chainages 91 and 93 kms, and that the first mentioned purpose was a principal purpose. 161. Obviously both purposes (and any related purposes) qualify as "purposes of the Roads Act 1993". However, I am of the opinion that this finding does not affect my conclusion that the "Raja" principle applies to the facts of this case, and supports in terms of legal and valuation principle, Mr Robertson's "Raja" valuation. 162. I now proceed to determine the proper quantum of that valuation. D. THE QUANTUM OF THE "RAJA" VALUATION 163. As I have earlier mentioned, Mr Robertson's valuation was based upon his opinion that the parties in their "friendly negotiations" would agree upon a price that reflected the rate of $2.75 per cubic metre for the 478,000 cubic metres of fill extracted from the Applicant's land and deployed in constructing the embankments across the flood plain. 164. As I earlier indicated, there is no dispute about the quantity of the fill material extracted. It is to be noted that that quantity has not been ascertained by hindsight, but reflects the known facts that before the compulsory acquisition the Respondent (i) recognised that it required this amount of fill for the purposes of constructing the embankments across the flood plain; (ii) had identified the Applicant's land, being the planned route of the Highway Deviation between chainages 91 and 93 kms as the source of this fill; and (iii) satisfied itself that the physical properties of that material were suitable for its purposes; and (iv) recognised that considerable cost savings would be achieved by utilising this material. 165. What is seriously in dispute in the amount of Mr Robertson's "Raja" valuation of $1.3 million (478,000 x $2.75) is the adopted "royalty" rate of $2.75 per m3.. 166. In this respect, the Respondent makes two alternative submissions— (i.) a valuation upon a royalty basis is not a permissible "Raja" valuation approach; and (ii) if a royalty basis valuation is permissible, the Court would reject Mr Robertson's rate of $2.75 (and all the supporting evidence) and instead adopt Mr Reed's estimate of a royalty within the range of 54 to 72 cents per cubic metre. 167. Mr Early's "Raja" valuation (Exhibit HH) had adopted Mr Reed's royalty rates producing the following results :— (i.) 478,000 x 54 c = $258,120 (ii.) 478,000 x 72 c = $344,160 from which Mr Early reasoned, by applying the "Raja" approach, might justify a "midpoint" price of $245,340. 168. However, I return to the Respondent's primary submission, namely that "Raja" did not support a valuation based upon a royalty for the fill material. 169. The Respondent submitted that Raja involved the "mental construct of a market in which "something extra" is paid by the acquiring authority, that "something extra" not being the value of the resource or potentiality to the acquiring authority…but rather is that sum above the hypothetical highest bid in the "ordinary market" which the acquiring authority would offer and the vendor would accept in friendly negotiations to secure a deal" (p.31 of Respondent's written submissions). 170. The Respondent submitted that "logically the something "extra" will usually be no more than a small sum over and above the hypothetical highest bid". 171. To illustrate this submission, the Respondent referred to the facts in Raja noting that the Privy Council's decision to reduce the compensation from Rs 1,75,000 (sic Rs 1,05,00) to Rs 40,000 indicated that the reduced figure reflected "something extra" over and above the "poramboke" value which "would have been just enough to overcome the vendor's reasonable reluctance to sell his land". 172. With the greatest respect to the Respondent's submissions, they involve both a fundamental misunderstanding and misapplication of the Raja principle. 173. In the first place, there is simply nothing in "Raja" which, as a matter of legal or valuation principle, would exclude the valuation methodology based upon an estimated royalty payment for the fill material. (Indeed the royalty basis was the precise basis for assessing compensation adopted by the Supreme Court of Canada in Fraser where that decision, as earlier noted, was expressly founded on Raja). 174. In point of both legal and valuation principle, the Respondent's submission comes very close to the respondents central argument in Raja which was rejected by the Privy Council in the following passage at 316/317: It was contended on behalf of the respondent that, at an auction where there is only one possible purchaser of the potentiality, the bidding will only rise above the "poramboke" value sufficiently to enable the land to be knocked down to that purchaser. But if the potentiality is of value to the vendor if there happen to be two or more possible purchasers of it, it is difficult to see why he should be willing to part with it for nothing merely because there is only one purchaser. To compel him to do so is to treat him as a vendor parting with his land under compulsion and not as a willing vendor. The fact is that the only possible purchaser of a potentiality is usually quite willing to pay for it. 175. A little earlier (at 314 to 316) the Privy Council had decisively rejected the utility of the suggestion of the arbitrator holding an "imaginary auction" to determine the value of the "potentiality" concluding (at 316) that the proper approach was as follows: The truth of the matter is that the value of the potentiality must be ascertained by the arbitrator on such materials as are available to him and without indulging in feats of the imagination. 176. For the same reasons, I would reject the Respondent's submission concerning the assessment of the value of the "special potentiality" of the compulsorily acquired land. 177. I am also of the opinion that the Respondent's submission involves a misapplication of the Raja principle by virtue of a misunderstanding of how the compensation was determined in that case. There is simply no warrant for suggesting that the amount of compensation awarded by the Privy Council represented "just enough" above the "poramboke" value to induce the vendor to sell since, as I have earlier demonstrated, the amount of compensation awarded by the Privy Council (Rs 40,000) was 2 ½ times more than the "poramboke" value (Rs 15,000). It is true that the Privy Council significantly reduced the Subordinate Judge's award by some 60%, but it is to be recalled that that award had been based upon a valuation reflecting a (20 years purchase) capitalisation of the net annual income to the claimant derived from selling fresh water from his spring to the harbour area, which valuation methodology had necessarily presupposed (i) the ability of the claimant to be in the position to supply the water to the harbour and (ii) the income earning capacity of the asset being immediately available at the date of acquisition. Both these presuppositions were rejected by the Privy Council at 330, and it was on this account, that the Privy Council held that "however willing purchasers they may be" the Harbour Authority "would not have agreed to pay anything like that sum" (i.e. representing the capitalised value of an immediately available income producing asset). 178. For all these reasons, I must reject the Respondent's submissions that it is impermissible for the Raja valuation to be based upon a royalty payment for the fill material known to be obtainable from the Applicant's land. 179. I come then to the admittedly difficult question as to the appropriate royalty rate that would be determined in the "friendly negotiations" between the Respondent and the Applicant, each being a willing party but not under compulsion. 180. Mr Robertson's Report (Exhibit 11) explains why he adopted a royalty of $2.75 per m3. His reasoning included reliance upon the following factors: (i.) Except for the Applicant's land and the sands from Raleigh Shoals, there was no readily available fill material in the local area; (ii.) the cost of importing fill from sources located in Coffs Harbour and Nambucca would involve prohibitive transportation costs; (iii.) it was known to the Respondent that the Applicant's land contained sufficient fill material to satisfy the Respondent's demand for some 500,000 m3 for constructing the embankments across the flood plain, situate a short distance to the south of the Applicant's land; (iv.) Resource Design Management (RDM) had advised the Applicant that an appropriate commercial value of the fill material from his land was $4.50 per loose cubic metre, which amount was considered to involve an economically viable cost to the road construction authority; and (v.) notwithstanding RDM's cost benefit analysis for the acquiring authority to take some 500,000 m3 of fill from the Applicant's land, Mr Robertson adopted the royalty rate of $2.75 per m3 "to take account of the approval process required by the Council, the costs involved, the quantity of fill material taken, the (assumed) advance payment of the full royalty rather than its staged or progressive payment during the life of the excavation activity:" 181. Mr Robertson's royalty rate of $2.75 per m3 was supported by the opinion of Mr Armstrong, an experienced civil engineer practicing in the Coffs Harbour area, who suggested a royalty rate in the range of $2.50 and $3.50 per m3 (Exhibit 63). 182. Mr Robertson's royalty rate was also supported by a number of local earth moving contractors that he had contacted in the course of his investigations e.g. Mr Keogh in his written statement (Exhibit 64) suggested a royalty rate of $4.50 to $5.50 to be paid to the farmer (who owned the quarry). 183. Mr Robertson's royalty rate is supported by advice that the Department of Conservation and Land Management had adopted from 1 July 1995 the following licence charges from the licencee of the Raleigh Shoals dredging operation— Fill Sand (River) - direct dredge to site (compacted land fill) $2.40 Sand - Dredged: needs screening and washing $2.00 : Exhibit 76; and by advice dated 2 May 1995 from State Forests to a proposed developer in respect of a proposed extraction site in the Newry State Forest that the "going rate" for fill material was $2.00 - $2.50 per m3: Exhibit 62. 184. All of these suggested royalty rates are to be contrasted with Mr Reed's opinion that "royalty payments for low grade fill material are usually negotiated at about 6-8% of the normal ex bin selling price of equivalent material per established quarries….. equating to 36 to 72 cents per m3": Exhibit O. 185. In his subsequent reports (Exhibits P and Q) Mr Reed adhered to this opinion of a royalty within the range of 54 to 72 cents per m3. 186. As I have earlier noted, Mr Early, in undertaking his "Raja" valuation adopted Mr Reed's estimates of royalty rates: Exhibit HH. 187. How is this significant difference in estimated royalty rates to be resolved? The Respondent submitted that I would decisively prefer Mr Reed's opinions because of his vast and impressive experience within the extractive industry. This submission was allied to a significant attack on Mr Robertson's credit, as an expert witness, it being submitted that he had demonstrated himself to be biased. I shall later return to deal with this submission. For the present, I am concerned to examine more closely the bases for the competing opinions concerning the royalty rates which the parties in their friendly negotiations would be likely to agree upon. 188. I should point out at the outset of this examination that Mr Reed's opinions were always in response to expert opinions advanced on behalf of the Applicant in these proceedings. 189. This is not surprising since it was the Respondent's case from the outset that there was no justification for a "Raja" valuation in respect of the fill material extracted from the Applicant's land. 190. The Applicant's "Raja" claim first evidenced itself in these proceedings in Mr Green's (RDM) report (Exhibit 58) which inter alia, examined "alternative quarry resources" (Section 4) on the assumption that the required amount of fill from the Applicant's land had not been available to the Respondent. Three existing quarries were identified—(i) CSR at Boambee; (ii) Jungs at Coffs Harbour; and (iii) Landrigan's at Coffs Harbour. 191. The estimated cost of supplying fill material to the Respondent at Raleigh from these three sources was $15/16; $15 and $14 per m3 respectively. 192. The prospect of developing a new quarry within a closer range to Raleigh was considered in the report but was rejected as being "costly and facing many difficulties". 193. Section 5 of the RDM Report considered in the value of the fill material extracted from the Applicant's "land" based upon the cost of importing material from an existing quarry or the cost of developing a new quarry resource. RDM's estimated value of the 478,000 m3 of fill taken from the Applicant's land based upon existing quarries is either (i) $2.868 million (based upon $6 per m3 with no delivery costs) or (ii) $6.692 million (based upon $6 per m3 plus $8 per m3 transport costs). 194. RDM's value of the same quantity of fill taken from the Applicant's land based upon the development of a new quarry resource located within a 6 km range of Raleigh was the equivalent to a royalty of between $4-4.50 per m3. This figure reflected the deduced "unit costs" of establishing such a quarry "assuming that a potential site can actually be found ….". The factors comprised in that unit cost were (i) royalty payments estimated at $1.50 per m3 (ii) costs of obtaining development consent; (iii) transport costs and (iv) s 94 contribution payments to the Council for use of Council roads in transporting the material to Raleigh. 195. It is to be recalled that Mr Robertson's "Raja" valuation utilised the RDM estimated royalty of $4.50 per m3 but reduced it to $2.75 for the reasons I have earlier recited. 196. Mr Reed's Report (Exhibit R) contains his response to the RDM Report. 197. Firstly, Mr Reed disputes the RDM opinion that there are no alternative sources in the vicinity of Raleigh. He states: The obvious place to go looking for alternative sources of equivalent quantity phyllite is within properties adjacent to the Raleigh deviation roadworks. The prime targets for my own search were the State Forests located immediately north and some kilometres south of the highway fill area (These are references respectively to Pine Creek State Forest and Newry State Forest.) 198. Commenting on the RDM estimated royalty rate, Mr Reed's response was to maintain his earlier opinion (Exhibit O) that a royalty of 54 to 72 cents per m3 was the appropriate rate to adopt. In support, he cited the recent example of 47 cents per loose cubic metre paid by the Respondent for fill material quarried adjacent to the new roadway constructed around Lake George. 199. Mr Reed states: Any royalty figure has to be negotiated between the landowner and the quarry operator. The outcome of such negotiations will be significantly influenced by the availability (or absence) of alternative material. In the case of the Raleigh deviation, alternative sources of fill have been identified and I see no reason to alter my estimation of a fair royalty payment i.e. within the range of 54-72 cents per loose cubic metre 200. Finally, Mr Reed responds to RDM's method of arriving at an estimated royalty of $4.50 per m3. 201. Firstly, he rejects the $1.50 minimum royalty and instead adheres to his suggested royalty rate of 54-72 cents. 202. Secondly, he considers the RDM allowance of $500,00 for obtaining development consent "seriously flawed" on account of the fact that faced with such a claim, the RTA would have "sought an alternative highway route which would have resulted in fill being obtained at a lower cost" or alternatively, adopted the approach it took in relation to the Lake George road (i.e. securing an "offsite" quarry source). 203. Mr Reed's sanguine opinion concerning the availability of alternative sources of fill material from the two State Forests he has nominated is not shared by Mr Green or Mr Armstrong. Nor was it corroborated by satisfactory evidence from State Forests. 204. More importantly, it is utterly contrary to the results of SMEC's investigation on behalf of the Respondent of possible alternative sources of fill to the sand from Raleigh Shoals which had been earlier nominated as the source of required fill for the construction of the embankments across the flood plain. Indeed, this last aspect of the Respondent's case is baffling for instead of acting upon the uncontested evidence of what SMEC had advised the Respondent, concerning the high cost of importing fill because of the expense involved in obtaining sand from Raleigh Shoals as originally proposed, leading to the recommendation to continue the highway deviation north of Man Arm Creek to encompass the Applicant's land so as to obtain some 500,000 cubic metres of the required fill material, the Respondent invites the Court to accept Mr Reed's opinion, (prepared for the purpose of this litigation, and given in response to the expert opinions advanced on behalf of the Applicant) based upon his investigations some two years after the compulsory acquisition of what he asserts (without adequate corroboration) to be available sources of fill material obtainable from nearby State Forests. No attempt was made by the Respondent to show that Mr Reed's belated revelations in some manner cancelled the relevant facts at the date of the acquisition. 205. I intend no disrespect to Mr Reed when I say on the basis of the uncontested evidence that there was at the date of acquisition no source of inexpensive fill material available to the Respondent, that I am singularly unpersuaded by his opinion concerning the nearby availability of cheaper alternative sources of fill material. Nor do I find his opinion concerning the conventionally struck royalty rate of 6-8% of exbin selling price, to be altogether apposite to the task of determining what the Respondent in a friendly negotiation with the Applicant at the date of compulsory acquisition, would agree to be an appropriate royalty rate reflecting the special potentiality, adaptability or suitability of the Applicant's land to the Respondent. 206. Indeed, Mr Reed, who is not a valuer, may not have fully appreciated that the royalty rate to be estimated in the present case, is one that reflects the desire, though not the compulsion of the Respondent, to obtain the Applicant's land so as to obtain the requisite amount of fill for the construction of the embankments across the flood plain, at a cost saving estimated to reduce the relevant section of the Raleigh Highway Deviation by some $3 million. 207. The relevant factual context of that friendly negotiation is relevantly that which is revealed in the evidence concerning the state of knowledge of the parties as to the cost of obtaining the requisite fill from the Raleigh Shoals or from far away quarries where transport costs were prohibitive. 208. Moreover, the parties are presumed to be fully conversant with all of the potentialities of the land, including most materially, the knowledge of the Respondent that by continuing the Highway Deviation north of Man Arm Creek across the Applicant's land, the Respondent would at one and the same time satisfy its need for 500,000 m3 of fill material and obtain the land for locating the highway deviation and by so doing, would avoid the need for obtaining any development consent for the extraction of some 500,000 m3 of fill from the compulsorily acquired land (since that activity in a town planning sense was but an incident of constructing the highway at the reduced levels). This feature of the acquisition accordingly enhanced the special potentiality of the land as a source of fill material. Accordingly, RDM was correct in factoring into its estimates of value to the Respondent, the advantage of not having to obtain development consent to conduct what was a very large quarry operation. 209. In this respect, Mr Reed was clearly wrong in ignoring such an advantage to the Respondent and in failing to appreciate that it necessarily enhanced the special potentiality of the Applicant's land. It was an advantage that would be necessarily foregone by the Respondent if it were to attempt to open up a quarry as it had apparently done in the case of the Lake George road improvements. 210. This leads me to consider Mr Armstrong's estimate of a royalty rate of between $2.50 and $3.50 reflecting the known royalty of $2.40 per m3 for the sand extracted from Raleigh Shoals. Mr Armstrong had increased his estimate of the royalty for the fill material to be obtained from the Applicant's land above the Raleigh Shoals sand royalty rate because of his opinion that the former would be less expensive to extract and more easily placed in embankment formation than would be the Raleigh Shoals sand. 211. Mr Reed's response (Exhibit S) to Mr Armstrong's opinion tends to dismiss the latter's reliance upon the royalty rate for sand at Raleigh Shoals "because it was considered too expensive by the RTA who sought alternative sources of fill material". It is doubtless the case that the Respondent (or its consultant SMEC) considered the Raleigh Shoals sands too expensive, and hence looked to the Applicant's land to provide the requisite quantity of fill as part and parcel of the northerly extension of the Highway Deviation, but it does not follow that it found the royalty rate to be too expensive. The royalty rate was what the licensee from the Department of Conservation and Land Management paid to the Department. The cost of the sand to the Respondent was not the royalty rate. Rather, it was what the licensee charged for the supply and delivery of the sand. 212. Although this precise amount was not established by evidence (Mr Robertson suggested the charge was $15m3), the evidence does reveal that the estimated cost of the Raleigh Deviation across the flood plain would be reduced by some $3 million if the fill was obtained from the Applicant's land (Exhibits 14, 15 and 97), as SMEC had recommended and the Respondent had accepted that recommendation and the costing. 213. Accordingly, I do not accept the criticism of Mr Armstrong's royalty estimate based upon the royalty for the Raleigh Shoals sand. Rather, the comparative cost of the Raleigh Shoals sand was obviously a factor that the parties in their friendly negotiations would have taken into account in determining their agreed price. Obviously, the Respondent would wish to pay less for fill from the Applicant's land than it would have had to pay for the Raleigh Shoals sand or for importing fill material from far away quarries in Coffs Harbour etc, and the greater the costs saving, obviously the greater the attractiveness to the Respondent of the special potentiality of the Applicant's land as a source of the needed fill material. 214. Another advantage to the Respondent in obtaining the fill from the Applicant's land, rather than from alternate sources lay in the fact that the Respondent was also obtaining the Applicant's land upon which it would locate the highway deviation north of Man Arm Creek. 215. It remains to consider two further matters, namely:- (i.) the considerable evidence concerning the manner in which the developer of the Bellingen Keys project obtained fill for that development; and (ii.) Mr Early's Raja valuation utilising Mr Reed's estimated royalty rates. 216. As to the Bellingen Keys evidence, I did not find it to be particularly helpful. It was confusing and conflicting insofar as its account of facts was concerned and it was difficult (even if the confusing facts were unravelled) to appreciate what assistance it provided on the question of determining an appropriate royalty rate to be adopted by the parties in their friendly negotiations. The amount of fill obtained was in the order of 30,000 m3 and the royalty said to be paid was variously analysed within the range of 75 cents to $1.42 per m3. Other than to show what an enterprising developer may do to keep his development costs at a minimum insofar as the obtaining of fill is concerned, I do not think the evidence of the Bellingen Keys experience has much or any comparative value in the task of determining the royalty rate to be determined by the parties in their friendly negotiations. 217. Concerning Mr Early's "Raja" valuation, I have already noted that it utilises Mr Reed's estimated royalty of between 54 and 72 cents per m3. Whereas I am satisfied that Mr Early appreciated the "Raja" principle, his "Raja" valuation ultimately depends upon an acceptance of Mr Reed's estimated royalty rates. 218. I should also say that whereas Mr Early's "mid point" solution in the friendly negotiations has been adopted in some cases (most notably by Walsh J in Anthony) it is a practical approach which carries no inherent conviction or plausibility. 219. Having regard to the competing expert opinions on what is an inherently difficult question, I have come to the conclusion that the Applicant's experts are to be preferred to the Respondent's competing experts. My preference is largely founded upon my satisfaction that the Applicant's experts more accurately and realistically considered (i) the facts that would have influenced the parties in their friendly negotiations; and (ii) more particularly, the true nature of the special potentiality, adaptability and suitability of the Applicant's land in the hands of the Respondent. 220. In so concluding, I must reject the Respondent's attack on the credit of Mr Robertson, based upon the suggestion that he improperly set himself up as a judge of Mr Steven's veracity as a witness. I have considered the relevant passages in the transcript of Mr Robertson's cross-examination. In truth, he was put in the position of commenting on Mr Steven's testimony by the cross-examiner. I do not think that he sat in judgment on Mr Steven's testimony. He emphatically declared that nothing in Mr Steven's testimony had caused him to change his opinion as to the true purpose for which the Respondent had acquired the Applicant's land. But having also carefully considered Mr Steven's testimony, I do not think there was anything improper in Mr Robertson's responses to cross-examination, his answers simply reflected his belief that the opinion he had expressed remained valid, notwithstanding Mr Steven's testimony. That is not to suggest that there is any conflict in the testimony or that Mr Steven's testimony is in any way to be doubted. 221. Ultimately, in a case such as the present, where the true purpose for which land is acquired is put in issue, the result is generally a matter for inference based upon the evidence. I have already held, to the extent that it became necessary, that a principal purpose in acquiring the Applicant's land was for obtaining needed fill material. Mr Steven's testimony, though disputing the suggestion that the Applicant's land was acquired principally for that purpose, candidly conceded that the need to obtain that amount of fill was a purpose of the acquisition. My conclusion that it was a principal purpose does not mean that Mr Steven's" testimony is to be doubted or rejected. Rather, it reflects my finding, as an ultimate inference based upon the entirety of the evidence, which in documentary form was both vast and complex. Mr Steven's testimony helpfully sought to summarise the fairly extensive history of the Raleigh Deviation project. I have no doubt that he undertook that task honestly, fairly and reliably. 222. Having expressed my preference for the expert evidence adduced on behalf of the Applicant, I think that the price to be determined in the friendly negotiations would have been in the order of $1 million (reflecting a royalty rate of some $2.10 per m3). 223. The approximately 25% reduction I have made to Mr Robertson's valuation of $1.314 million provides, I believe, the necessary element of inducement for the Respondent to acquire the Applicant's land for its source of fill material, in preference to obtaining the required fill material from alternate sources at obviously much greater cost for the Raleigh Deviation Project. 224. As I have earlier noted, the royalty basis estimating the value of the special potentiality of the acquired land as a source of fill material was adopted by the Canadian Supreme Court in Fraser where Ritchie J held (728) …that the reality of the matter is that the Crown was expropriating tons of rock in the ground rather than acres of land in the rough so that the value of the special adaptability of these lands is to be determined for the purpose of fixing compensation for their expropriation on the basis of the value that a willing vendor might reasonably expect to obtain from a willing but not anxious purchaser for the rock in situ at the date of expropriation. 225. In assessing the amount of the purchase price, Ritchie J was "much influenced by the evidence of John D. Stirling,, a disinterested contractor of high repute and wide experience, whose company had estimated the value of the rock with a view to including this item in its tender for the contract to construct the causeway": 728 226. Ritchie J continued at 728 to discuss the relevant integers in the hypothetical bargain: If the special adaptability of the lands is to be measured in terms of the value of the rock in situ the quantity involved must, in my opinion, be treated as being the amount of the requirement estimated by the Crown before expropriation, i.e., 9 million tons. This constituted an immediate market for a substantial amount of the appellant's rock, and the unprecedented opportunity to dispose of such a quantity of his supply at one time must, in my view, be treated as a circumstance which would induce a prudent man to willingly accept less than he might expect to receive if he was required to sell the commodity piecemeal but, with all respect, it does not, in my opinion, mean that such a man should be required to accept less than one-tenth of the amount which an experienced contractor would have been prepared to pay if he had had to include the rock in his tender for the contract, and this appears to me to be the effect of the value fixed by the learned trial Judge. 227. Much of what Ritchie J here says, is directly applicable to the facts of the present case, and I have respectfully adopted his Honour's approach in determining market value. 228. For all the foregoing reasons, I would adopt $1 million as the market value of the Applicant's land reflecting its special potentiality, adaptability or suitability to the Respondent to provide the source of needed fill material. 229. In his "Raja" valuation (Exhibit 11) Mr Robertson acknowledged that as a consequence of adopting such a valuation, "it is not appropriate to further claim items of disturbance associated with the loss of that land for quarry purposes, except for these items of disturbance which relate to, or occurred during, the actual construction of the road and costs associated with capital gains tax": p 10. 230. Accordingly, he confined claimable disturbance items to these enumerated in items (i), (iv), (vii), (vx), (xiv), (xv), (xix,), (xxi), (xxii), (xxv), (xxix), (xxx) and (xxxii) of the Applicant's Amended Points of Claim: (Exhibit 90). 231. All of these items had been agreed upon in the course of the proceedings except for the following items: (ix) repairs to damaged buildings $17,000 (xiv) supplementary cattle feed costs $62,559 (xv) supplementary cattle feed costs $26,000 (xix) additional lighting to abattoir building $ 4,586 232. I shall presently consider these disturbance claims but I should note that Mr Early expressed the opinion that if a "Raja" valuation were to be adopted in this case, then it should operate as the exclusive source of compensation and to this end, oust or eclipse any disturbance claim. He reasoned that the Applicant in his friendly negotiations with the Respondent, would factor into the price he would agree to accept compensation for the adverse consequences to his retained lands of the carrying out by the Respondent of the massive excavation activity so as to obtain 500,000 m3 of fill material in a very short period of development (1-2 years). 233. However it is to be noted that there is nothing conceptually in a "Raja" valuation that compels the adoption of Mr Early's opinion. This is because a "Raja" valuation in truth remains from first to last a "market value" valuation in the defined sense, as the following extracts from the Privy Council's judgment in Raja, makes plain: The compensation must be determined, therefore, by reference to the price which a willing vendor might reasonably expect to obtain from a willing purchaser. The disinclination of the vendor to part with his land and the urgent necessity of the purchaser to buy must alike be disregarded. Neither must be considered as acting under compulsion: at 312; ……But sometimes it happens that the land to be valued possesses some unusual, and it may be, unique features, as regards its position or its potentialities. In such a case, the arbitrator in determining its value will have no market value to guide him and he will have to ascertain as best as he may from the materials before him, what a willing vendor might reasonably expect to obtain from a willing purchaser for the land in that particular position and with those particular potentialities: at 313; …..even where the only possible purchaser of the land's potentiality is the authority that has obtained the compulsory powers, the arbitrator in awarding compensation must ascertain to the best of his ability the price that would be paid by a willing purchaser to a willing vendor of the land with its potentiality in the same way that he would ascertain it in a case where there are several possible purchasers and that he is no more confined to awarding the land's "poramboke" value in the former case than he is in the latter.: at 323. 234. It follows that it would involve a misconception of the "Raja" principles to postulate, as Mr Early may have done, that adoption of a "Raja" valuation automatically excludes compensation being awarded for disturbance. 235. However, there is one important rider to this conclusion, namely the effect of s 61 of the Just Terms Act, which limits "disturbance" compensation, in circumstances such as the present case, where market value is assessed on the basis of potential use rather than existing use. 236. Before considering the disputed disturbance claims, I must consider the Applicant's alternative claim to compensation based upon the potential use of a small commercial quarry located on part of the compulsorily acquired land on the western side of the existing highway. However, although that alternative claim to assessment of compensation on the basis of a potential use of the commercial quarry occupied the most time and greatest amount of evidence at the hearing, I propose, in view of my determination of the "Raja" valuation, to deal with the matter, but briefly, since at its highest, the claim is for an amount of $362,000 (Mr Robertson's valuation Report Exhibit 82) in addition to the otherwise agreed existing use value of $158,000 in respect of the compulsorily acquired land. Thus, even the maximum valuation contended for this potential commercial quarry when added to the otherwise agreed market value of the existing use results in an aggregated value of $520,000 which is considerably less than the $1 million I have determined in respect of the Raja valuation claim. E. DOES THE POTENTIAL COMMERCIAL QUARRY ADD VALUE? 237. There is very substantial conflict in the expert evidence concerning this question. Numerous valuation exercises undertaken by Mr Robertson were tendered in evidence. Ultimately his preferred opinion was that the quarry potential added value of some $362,000 over and above the agreed market value of the existing use. 238. Mr Reed, again responding to Mr Robertson's valuation exercises, was of the opinion that any commercial quarry attempting to realise the suggested potential would not be a commercially viable proposition. Despite this, he undertook exercises adopting Mr Robertson's valuation methodologies producing various outcomes ranging from a value of between (i) $18,400 and $20,350; (ii) $25,043 and $28,763. One of his later exercises yielded a valuation of $162,140 on assumptions that he did not personally accept (namely that there would be no additional fixed costs for a quarry producing 110,000 m3 above the fixed costs for a quarry producing 28,000 m3) which valuation he reduced to $46,990 by significantly increasing fixed costs etc (Exhibit S). 239. Both Mr Robertson and Mr Reed maintained their mutual dissent from each other's opinions in a series of Reports and Reports in reply, too numerous (and argumentative) to justify or require precise recitation or analysis in this judgment. 240. Ultimately, the differences between them came down to the following issues:- (i.) whether development consent could be readily obtained for a quarry occupying some 2 ha in the location of the long existing borrow pit situate to the west of the existing highway generally opposite the intersection of the Highway with Perrys Road (including the risks and costs of obtaining such consent); (ii.) the costs of complying with the Council's deferred commencement consent granted in 1995 for a quarry producing 28,000 m3; (iii.) the costs of establishing the larger (110,000 m3) suggested quarry on 2 ha (by way of extending the approved quarry); and (iv.) the market demand for fill material in the local area, including the annual volume of sales of such material. 241. Mr Robertson's valuation opinions were supported by engineering advice obtained from RDM concerning establishment costs, i.e. costs of satisfying the conditions of the Council's deferred commencement consent and costs of extending that consent for a larger quarry, and were supported by local earth moving contractors so far as his estimate of market demand was concerned. 242. Mr Robertson was criticised for undertaking his research into probable market demand, by not considering official records of annual production levels of extractive materials from existing quarries in the Coffs Harbour area and in basing his opinion on "anecdotal" evidence given him by local earthmoving contractors. 243. His answer to this criticism was that he was seeking to establish market demand for the Applicant's proposed quarry at Repton, and its environs and that because of the prohibitive transport costs of materials sourced in Coffs Harbour, no utility would be served by consulting official records of materials extracted from quarries situate in Coffs Harbour which were beyond the market area for the Applicant's proposed quarry. 244. The task of determining whether the value of the compulsorily acquired land should be increased over and above the agreed existing use market value, is intrinsically difficult in the present context which contemplates, not the separate sale of the 2 ha or so involved in the suggested extended quarry operation (producing a total of 110,00 m3 of fill material)—but because the quarry potential must be factored into the "before and after" valuation exercises undertaken by Mr Robertson and Mr Early in respect of the Applicant's land. A compounding difficulty is that the realisation of the potential contemplates the co-existence of the quarry use with the abattoir and related cattle fattening and grazing use of the Applicant's land. A further difficulty in attempting to value the suggested potential lies in the fact that until it had been announced by the Respondent that the Raleigh Deviation would be extended northwards from Man Arm Creek to across the Applicant's land, there had been no development consent in existence for the quarry use, even though that use, on the basis of a borrow pit, had had a prior history of some 40 years. 245. In these circumstances, any consideration of the potential of part of the compulsorily acquired land being used as a small scale commercial quarry must commence with the grant of the deferred commencement consent by the Bellingen Council on 18 August 1995 (Exhibit 23). 246. The development application had been lodged by the Applicant on 30 June 1995 seeking an "in principle" approval. It was supported by material prepared by Reg Walters and Partners, a firm of Consultants which described the development proposal in the following terms: The purpose of the application is to legitimise the continued use of the existing quarry. 28,000 cubic metres will be excavated over a period of 3 years or more; the total area to be disturbed is approximately 1 ha. 247. Under the headings "Future Expansion", the supporting material states: The subject property contains many similar ridge situations which could be utilised as future quarry sites. This site will be used to gauge the viability of any further expansion or new sites. The owners are aware that any further expansion of their quarry activity may alter the definition of their activity to a designated development. Any such move would require the preparation of an EIS and the lodgement of a further development application. Due to the difficulty in locating sites such as this with suitable attributes for quarry operations, this issue warrants consideration by the landowner in the future. We consider the subject site is ideally located to operate as a quarry. The operation will not have any detrimental impact on the locality and in fact, it will free up a valuable resource. 248. In granting development consent, the Bellingen Council imposed three deferred commencement conditions pursuant to s 91AA(1) of the Environmental Planning and Assessment Act 1979 which were stipulated as requiring satisfaction by 18 August 1996. Additionally, six other conditions of consent were imposed including the following condition relating to the treatment of the junction of the access road with the Pacific Highway: The junction of the access road with the Pacific Highway shall be constructed at no cost to Council, to the Roads and Traffic Authority's standard Type "A" inter-section and in accordance with Council's "Standard Conditions for Engineering Works Associated with Developments". Plans and specifications including schedule of quantities is to be submitted to and approved by the Roads and Traffic Authority and Council prior to commencement of works. [To provide adequate access] 249. Within three months of the grant of the deferred commencement consent, the Applicant's land had been compulsorily acquired. That land included the site of the existing borrow pit and the site of the approved quarry. 250. In the course of the hearing, it was suggested on behalf of the Respondent that the deferred commencement consent had been an exercise in futility and that the Council had not taken the matter seriously. There is no warrant in the evidence for such a submission and I reject it. 251. In his final submissions, Senior Counsel for the Respondent submitted that the deferred commencement consent should be given no weight because to allow it to affect value would be contrary to s 56(1) of the Just Terms Act and the principle established by the High Court's decision in San Sebastian. 252. It was submitted by the Respondent that if there had been no proposal to resume, there would have been no application for development consent. 253. In my opinion, these submissions must be rejected. 254. It is of course true that the Applicant made the development application on advice from his lawyer in order to establish that the potential of the land to be worked as a quarry was realisable by obtaining the requisite development consent therefor. However, this fact does not mean that the existence of the deferred commencement consent must be ignored in determining the value of the potentiality. 255. The next question to be considered is whether the deferred commencement consent might have been extended to sanction a larger quarry operation as suggested by the Applicant's experts (namely a quarry occupying a surface area of 2 ha rather than 1 ha for the approved quarry) and producing a total quantity of 110,000 m3 of fill material (3 times the approved quantity). 256. On this issue, which was fiercely in contention between the opposing experts, I am satisfied that development consent for the suggested larger quarry would probably have been granted, had it been sought. However, it had not been sought prior to the date of compulsory acquisition and therefore cannot be assumed to have been granted in any "before valuation" in the conventional before and after valuation exercise to be undertaken as at the date of compulsory acquisition. 257. However, with that important qualification, I am satisfied by the Applicant's expert evidence that a hypothetical purchaser of the Applicant's land as at the date of compulsory acquisition would have placed reliance upon the existence of the deferred commencement consent for the smaller quarry and would have assumed that there were good prospects of obtaining development consent for the larger quarry as suggested by the Applicant's experts ie. a quarry producing a total quantity of fill material of 110,000 m3 and occupying an area of some 2 ha. However, he would proceed on the basis that additional costs would be incurred in obtaining that additional consent and he would factor into his price an appropriate allowance for risk (i.e. of not obtaining the additional consent or having to pay more costs than expected in obtaining it). 258. To translate the foregoing findings into a conventional "before" and "after" valuation exercise would ordinarily mean that the "before value" would reflect whatever extra value the potential quarry gave to the Applicant's land and that extra value would be absent from the "after value" exercise, because that value excludes the land upon which the approved quarry (and its suggested extension) is located. 259. However, the Respondent submitted that on the facts of the present case, the "after value" exercise would, contrary to conventional valuation methodology, not exclude the quarry potential because that potential must be taken to have existed, on the retained land—a fact attested by the subsequent grant of a deferred development consent for the extraction of some 900,000 m3 from part of the retained land located in the north-eastern corner of part of the Applicant's land situate west of the existing highway (and the Highway Deviation). 260. That deferred commencement consent (Exhibit 24) was granted on 15 January 1998 to a development application for designated development made by RDM on behalf of the Applicant. 261. The supporting environmental impact statement had introduced the proposed development in the following terms: The proposed activity involves the extraction of a phyllite material varying in strength from very low to medium to high strength. The material is considered suitable for general filling and sub-base with the higher strength material acceptable as a base material. The extraction will be undertaken over three (3) stages and removal of the material from the site will not be undertaken until after the opening of the Raleigh Deviation to ensure minimal traffic impacts. Extraction rates are difficult to predict, however demand indicates up to 20,000 m3 per annum and for the purposes of this statement we have adopted this figure. The following table provides basic detail of the activity: Table 1 - Staging and Proposed Extraction Area Yield Average Annual Extraction Time Frame Stage 1 28ha 300,000 m3 20,000 m3 1998 - 2013 Stage 2 4.0 ha 350,000 m3 20,000 m3 2013 - 2035 Stage 3 2.0 ha 250,000 m3 20,000 m3 2035 - 2050 The need for this activity has resulted from the acquisition of a previously approved quarry site by the Roads & Traffic Authority and the lack of approved extraction sites in the locality creating demand for the material. Due to the dispersed settlement patterns on the North Coast of New South Wales, suitable sites for extractive industries are difficult to locate and it is considered imperative that an application for approval and the resultant protection of this resource be made now prior to additional developments which may sterilise this site as an extraction site. 262. The Respondent's written submission continues: Accordingly, the fact that it is now known that any actual 110,000 loose cubic metres quarry on the resumed land could have been relocated on the retained land means that the quarry potential value both "before and after" is undiminished. 263. I do not think that this submission can be accepted principally because it offends the principle that generally speaking facts subsequent to the date of compulsory acquisition are not relevant to the question of value required to be ascertained as at the date of compulsory acquisition: see Gosford Shire Council v. Green (1980) 48LGRA 201 and Housing Commission of New South Wales v. Falconer (1981) 1NSWLR 547. 264. In Falconer Hope JA expressed the general principle in the following passage at 557/558: There thus has to be considered not what a prudent purchaser in the position of the owner would pay after he had obtained a knowledge of all the circumstances that in fact occurred after the date of resumption, but what a person in his position would pay in the light of knowledge available at the time of the resumption. However, having affirmed this position, the decided cases dissolve into uncertainty. This Court, in Gosford Shire Council v Green (Court of Appeal, 11th July, 1980 unreported), took the view, in relation to a question, to which s 124 applied, that regard could not be had to events that took place after resumption. There a question arose, inter alia, as to the effect on the value of land retained by the plaintiff of the construction on the resumed land of a parking station which was in fact built differed in some respects from that which a purchaser at the time of the resumption would have expected to be built. This question was asked in the stated case: "Was I justified in law in assuming, for the purpose of considering the question of enhancement, that the knowledge of the hypothetical parties to an assumed sale of the plaintiff's remaining land was limited to the knowledge of a prudent purchaser at the date of resumption?" The Court held that the answer to this question was "Yes". Reynold JA said that there was no question of preferring actuality to prophecy. There was, however, no evidence in the case to suggest that a change of plans might have been contemplated by a hypothetical purchaser at the time of resumption. However there are many decisions, including decisions of the High Court, in which it has been held that evidence of future events is admissible not to prove a hindsight, but to confirm a foresight: see, for example, Trustees Executors and Agency Co Ltd v Commissioner of Taxes (Victoria) (1941) 65 CLR 33; Minister for Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459, at pp 514, 515; McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1, at p 16; Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77, at p 108. An application of the principle namely, that "The amount of compensation, being a matter of assessment, can, like damages, be calculated in the light of any subsequent facts to the extent to which they show light upon items of value which can properly be taken into account in the calculation, having regard to the circumstances existing at the date of acquisition": Minister for Army v Parbury Henty & Co Pty Ltd (1945) 70 CLR 459, at p 514 is to be found in the decision of the Full Court of Queensland in Brisbane City Council v Thorpe (1965) 13 LGRA 31. In that case the council resumed land on which stood a part of a shop building, the other part standing on land retained by the owners. Two years after the date of resumption the council offered to move the existing shops back to the resulting new alignment. In his judgment Gibbs J, as he then was, with whom Hanger and Jeffries JJ agreed, said (at p 37): "In the present case at the date of the resumption it was reasonable to expect that the council would offer to make the building available, since the purpose of the resumption was to widen a road and possession of a portion of a building could be of no use to the council. The fact that it has since made the offer may be regarded to show that as at the date of resumption the building would have been available." 265. Mahoney JA, in the same case, expressed the general principle in the following passage at 576: In determining the effect which may be given to events occurring subsequently to the date of resumption, it is necessary to draw certain distinctions. There are some cases in which the theory or principle on which the compensation is to be assessed prevents regard being had to subsequent events. Thus, where the compensation which is to be given is measured by the ordinary market price of the property taken, the principle on which that market price is to be determined prevents (or at least restricts) reference to subsequent events. That market price is the price acceptable to a willing but not anxious vendor and purchaser on the relevant date. Such persons are to be taken to know what an appropriately informed person would know on that date. That being the principle, it follows that such persons (and the court, as determining what they would have done) cannot be seen as knowing more. The price which such persons would accept at that date will be affected by the uncertainties as at that date, as to, for example, the future demand for land at the relevant time, future decisions of zoning authorities and the like. Those uncertainties and the effect of them on the postulated vendor and purchaser help to determine what price will be found acceptable. In that regard, therefore, evidence of what subsequently has occurred in relation to such matters may not ordinarily be referred to. This does not operate so as necessarily to exclude evidence of subsequent sales: Melwood Units Pty Ltd v Commissioner of Main Roads (1975) 52 ALJR 593, at pp 597, 598; [1978] 3 WLR 520, at pp 527, 529, 530; [1979] 1 All ER 161, at pp 166, 167, 168; McCathie v Federal Commissioner of Taxation (1944) 69 CLR 1, at p 16. Such sales are evidence, not of the subsequent outcome of matters which, at the relevant date, were inherently uncertain, but of the price a relevant vendor and purchaser found acceptable at that date for comparable land. The assumption of the law is that from that evidence it is possible to infer what the relevant vendor and purchaser would have found acceptable for the subject land: see generally Harris v Minister for Public Works (NSW) (1912) 12 SR (NSW) 149, at pp 161-4; 29 WN 33; reversed 14 CLR 721; McDonald v Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 231, at p 239. 266. The principle, is of course, subject to exceptions, as the judgment of Hope JA demonstrates, but these are generally concerned with evidence of "subsequent sales". As in Falconer, subsequent events may be relevant to any application of the reinstatement principle. 267. However, in the present case, the question is to be considered in the context of a "before and after" valuation exercise in respect of the Applicant's lands ie. "before and after" the compulsory acquisition of part of his land in November 1995. The subsequent fact, occurring in January 1998, of the grant of the second deferred commencement consent for a very large quarry activity, in my opinion is not relevant, principally because of its remoteness in time, to the facts obtaining as at the earlier date when, and by reference to which, the before and after valuations must be undertaken. 268. However, despite rejecting the Respondent's submission, I think that the question of whether there survived in the retained land any of the potential for quarry use following compulsory acquisition, remains alive and must be answered. 269. Mr Robertson's supplementary Valuation Report (Exhibit 89) deals with this vital question in the following passages (noting that his reference to "Mr Atkinson" is a reference to the Consulting Engineer who had prepared (i) the supporting material for the Applicant's development application for the 28,000 m3 quarry; (ii) the development application and the supporting EIS for the 900,000 m3 quarry approved by the Council in January 1998 and (iii) much of the content of the RJM reports which were in evidence in these proceedings): (c) Mr Atkinson in his report indicates that he believes the extension of the existing approval to accommodate 88,000 m3 from a 2 ha site would be readily obtainable upon application. (Refer RDM Report - Quarry Resources) (d) Mr Atkinson has indicated that an additional 350,000 m3 of fill would have been available by extending the existing quarry. Such approval would have required a full Environmental Impact Statement (EIS) which Mr Atkinson believes would have supported the extension to the quarry and as such Mr Perry would have had a very good chance of obtaining consent for a large quarry operation. (e) Mr Atkinson has been instructed to determine if Mr Perry could simply relocate the existing development approval to adjoining land to the north. I am advised by Mr Atkinson that due to the steeper slopes on the adjoining land Council would require a full EIS. (f) Consequently, as a result of the resumption, Mr Perry has lost the ability of being able to win 28,000 m3 of material under the existing approval with a strong chance of being able to extend the approval area and quantity to 2 ha and 88,000 m3 without an EIS. (g) It appears that the additional area that could have been developed by expanding the 2 ha site and that would have needed an EIS, may be able to be relocated on the retained property. As a result the potential that existed for expanding the quarry has not been lost as a result of the resumption. (h) Given the low risk associated with extending the development approval to cover a 2 ha area, I have assessed the quarry as having a 88,000m3 resource and have adopted a higher profit and risk factor to account for the small additional risk of obtaining the extended development approval. (o) Mr Perry has lost the potential income from the sale of 88,000m3 of material from the quarry (110,000m3 of loose material) as a result of the resumption and or/the ability to sell that potential income stream to a local contractor. 270. In the course of cross-examination, it was pressed on Mr Robertson that the quarry potential had not been lost by virtue of the compulsory acquisition because it was simply a matter of relocating the quarry elsewhere on the retained land. Mr Robertson stoutly resisted this, and allied suggestions, maintaining his view that the compulsory acquisition had deprived the Applicant of the quarry resource located on the acquired land and that this loss was, in truth, independent of any question of whether any part of the retained land could be developed as a quarry resource, which in his view would pose considerably higher risks for any purchaser of the retained land. 271. Having regard to the evidence, I am of the opinion that if the hypothetical purchaser of the Applicant's land before compulsory acquisition would consider its value enhanced over its existing use value, by virtue of the quarry potential, the hypothetical purchaser of the retained land, after compulsory acquisition, would likewise recognise some enhanced value by virtue of the survival, at least in part, of that same potential. In so concluding, I accept that in realising this surviving quarry potential, the hypothetical purchaser of the retained land, would probably consider that the realisation of that potential to be more problematic and costly than would the hypothetical prudent purchaser of the land in its "before value". However, the greater risk involving in realising the potentiality does not mean that no such potentiality exists. Nor do I think it appropriate to regard the compulsory acquisition as causing the total loss of the quarry resource, because of the vast quantities of phyllite material contained elsewhere on large parts of the Applicant's land, the quantities of which render it somewhat theoretical to regard the quarry potential as a wasting asset. 272. The difficult task is to quantify the surviving potential and to compare the respective values of the "before and after" potentials. Based upon the evidence, I would conclude that 50% of the potential survived the compulsory acquisition and that the difference between "the before and after values" in respect of any enhanced value by virtue of the quarry potential of his lands would be in the order of 50%. This assessment accommodates the factors of the higher risk and greater cost of realisation of the quarry potential in the "after" value compared with the "before" value. 273. Accordingly, whatever be the enhanced value to be attributed to the quarry potential, I would consider 50% of that value would survive the compulsory acquisition and the resultant loss in any enhanced value of the compulsorily acquired land by virtue of its quarry potential be determined at 50% of that enhanced value in the before value. 274. My conclusion is not based upon the Respondent's submission that whatever quarry potential the Applicant's land had, was not affected by the compulsory acquisition except for any consequent need to relocate the quarry. Nor do I accept the Respondent's submission that the quarry potential existed in an undifferentiated fashion throughout the Applicant's land. 275. Coming then to the question of any enhanced value by virtue of the quarry potential, and faced with the vast range of values proffered by Mr Robertson and Mr Reed, I think that the hypothetical prudent purchaser would be prepared to pay some $200,000 extra for the Applicant's land in the "before value" situation reflecting the enhanced value of the quarry potential. This figure is mid point Mr Reed's value of $162,000 (Table 4 Exhibit S) based upon an 11 year operating period with average annual sales of fill material of 10,000 m3 and Mr Robertson's "comparison" valuation of $235,000 (Option 6B(2) Exhibits 82 and 93). 276. The average annual sales rate of 10,000 m3 reflects a conservative assessment of market demand. (Mr Robertson's preferred valuation postulated twice the annual sales and accordingly, half the development period.) The difference between these two comparison valuations lies in the different establishment costs, and particularly the costs of satisfying the condition of the Council's 1995 deferred commencement consent for a quarry of 28,000 m3 requiring a type A intersection at the junction of the access road with the Pacific Highway. It is unnecessary to resolve the differences in establishment or development costs because the decision of the hypothetical prudent purchaser would be cognisant of both estimates and the competing opinions of Mr Reed and Mr Robertson, neither of which is shown to be demonstrably wrong or unsound. However, I do not myself accept (nor do I believe the hypothetical prudent purchaser would accept) Mr Reed's opinion concerning the additional establishment and development costs (including risks) involved in converting the potential from an approved 28,000 m3 quarry to a 88,00 m3 quarry. In respect of that matter, I think Mr Reed has vastly overstated the risks and the additional costs of the larger venture—to exploit the quarry potential. 277. It follows, from the foregoing reasons that in my opinion, the hypothetical prudent purchaser would pay an additional $200,000 for the Applicant's land in respect of its quarry potential in the "before" situation and the hypothetical prudent purchaser would pay an additional $100,000 for the Applicant's retained land for the surviving potential. 278. Accordingly, I find, by giving effect to the conventional "before and after" valuation principle, that there is an enhanced value of $100,000 in respect of the quarry potential of the acquired land over and above its agreed existing use value of $158,000 resulting in a market value of $258,000 to the acquired land. 279. This amount is obviously significantly less than the $1 million adopted in the "Raja" valuation. 280. In leaving this topic I should say that I do not accept the Respondent's attack on Mr Robertson's credit because unlike Mr Reed, he did not, in carrying out his research into likely market demand for the quarry product, have regard to official records of productions levels of established quarries in Coffs Harbour etc. 281. I do accept that Mr Reed has vast and impressive experience in the quarry and extractive industry and in assessing enhanced value in respect of the quarry potential, I have accepted his conservative scenario on market demand (half of what Mr Robertson predicted, involving twice the development period with the consequent significant reduction in the present value of the quarry potential). To that extent, I think that I, like the hypothetical prudent purchaser, would have regard to what might fairly be regarded as a "worst case" scenario in terms of demand and selling period. 282. However, this evaluation of the expert evidence does not require or justify a rejection of Mr Robertson's valuation exercises, notwithstanding that Mr Robertson has no previous experience in valuing a quarry. However, Mr Robertson's valuation methodology was plainly correct and indeed Mr Reed adopted it. Additionally, as I have earlier said, Mr Reed is not a valuer and Mr Robertson is a valuer of considerable experience and high reputation. The attack made by the Respondent on Mr Robertson's credit has been rejected. The true basis for resolving the conflict in the competing opinions of Mr Reed and Mr Robertson in the manner I have done, lies in the established concept of the hypothetical prudent purchaser. In saying that, I do not intend to suggest that in every case, a Court hearing competing evidence concerning the potential of land and its value will conclude that the hypothetical prudent purchaser, deemed to be fully conversant with all matters affecting the potential of the land, and its value, will always, when confronted with competing opinions, opt for the "midpoint" solution. That would, as a general principle, produce absurd results and render litigation on disputed compensation claims a mere game, the outcome of which being mechanically predictable. 283. Obviously, the question of value, being one of fact, must ultimately be determined by the Court in its proper role as judicial valuer, and in this role, of course, the result will be determined by the Court's evaluation of the competing valuation and other expert evidence. However, since in determining "market value" the opinion of value ultimately determined must be determined, through the medium of the hypothetical parties to the hypothetical sale, the resulting adjudication must conceptually, be mediated through that process, and it will not always be achieved simply by the Court's preference for one expert opinion over a competing expert opinion. 284. In the present case, I have determined the enhanced value to be attributable to the quarry potential in both the "before and after" values, via the mediated "willing vendor and purchaser concept" and in so doing, have also evaluated the competing opinions of Mr Reed and Mr Robertson via that process. F. THE APPLICANT'S DISTURBANCE CLAIMS 285. In view of the results of my determinations of the value of the compulsorily acquired land reflecting its special potentiality ($1 million for the "Raja" valuation and $258,000 for the land reflecting its commercial quarry potential in addition to its existing use value), I propose to confine my consideration of the Applicant's disturbance claims to the limited disputed claims set forth in Exhibit 90 flowing from my adoption of the "Raja" valuation, because it is obvious that the wider disturbance claims even if wholly successful, when combined with the market value of $258,000, would produce a figure that falls very far short of the $1 million "Raja" value determination. (For completeness I would add that I would be disposed to the view that the Applicant has generally established all the other disputed disturbance claims.) 286. The limited disturbance claims in dispute, total $113,145 and comprise the following items: (i.) supplementary cattle feed costs incurred to the date of commencement of the hearing $62,559 (ii.) supplementary cattle feed costs anticipated to be incurred in the period before the construction of the Raleigh Deviation is completed (allowing for a period of 6 months ); $26,000 (iii.) repairs to damage sustained to the abattoir building and to the adjoining caretaker's cottage; $17,000 (iv) lighting to the abattoir $4,586 287. Mr Robertson's support for these claims was on the basis that they concern damage or disturbance caused by the construction of the Highway Deviation to the Applicant's retained land and particularly to the conduct thereon of his abattoir and cattle fattening and related cattle grazing business. 288. By the end of the hearing, the Applicant's claim in respect of supplementary cattle feed had been reduced to $79,815 (because the anticipated opening of the Highway Deviation was now sooner than previously existed). 289. The circumstances giving rise to the need to resort to supplementary cattle feed were satisfactorily explained in the evidence. The need arose because, during the construction of the Highway Deviation, as it affected the Applicant's land, he was not able to transfer cattle destined for the abattoir, from the fattening paddocks or holding areas situate on his land located on the eastern side of the Pacific Highway because of the denial of physical access across the highway, including via the underpass near Man Arm Creek. 290. Accordingly, the cattle could not be stored and fattened in the eastern paddocks and enclosures and in consequence, they had to be maintained in holding yards adjacent to the abattoir situated on the western side of the Pacific Highway and deprived of access to the paddocks on the eastern side of the property. The only way in which the Applicant could continue to carry on his abattoir business throughout the deviation construction process was for the cattle to be nourished by supplementary grain feed delivered to the abattoir precincts situate on the western side of the highway. 291. Ultimately, the Respondent's resistance of the claim came to be founded on the following propositions: (i.) the long standing arrangements whereby the Applicant readily transferred cattle across the existing highway was not the subject of any formal agreement and the Applicant did not have the benefit of any legal rights in respect of the arrangement; (ii.) the Applicant, when faced with the problem of lack of physical access could have mitigated his loss by attempting other solutions—e.g. trucking the cattle from the paddocks on the eastern side of the highway to the abattoir on the western side; and (iii.) other farm management techniques may have been attempted to avoid "running up" a huge bill for supplementary cattle feed. 292. The Respondent submitted that in these circumstances, the claim should not be allowed in full because the supplementary cattle feed costs were unreasonably large. 293. It was also submitted that in allowing the claim, there may be the risk of overcompensation inasmuch as the Applicant was being compensated for the loss of prime grazing land by obtaining full "market value" for that land, while seeking compensation for the cost of supplementary cattle feed which had enabled him to maintain the same cattle numbers, notwithstanding the permanent loss of prime grazing land by virtue of the compulsory acquisition. 294. In my opinion, the Respondent's submissions should be rejected. They are not supported by the evidence, including the expert farm management testimony, which involved no conflict of opinion. 295. The evidence satisfied me that there were no real alternative solutions available to the Applicant if (as he obviously did) he wished to maintain his abattoir business. Trucking the cattle from the eastern side of the property was not a satisfactory solution. 296. The impact of what was a massive construction activity on the highway deviation upon the Applicant's retained land, and upon his business in particular, was substantially and significantly adverse. 297. Not only was physical access for cattle movement between the eastern and western sides of the property cut off, but the land on the western side of the highway, and especially that adjacent to, and downslope of, the massive excavation activity, had been rendered a virtual quagmire. 298. Additionally, physical access between the abattoir and its holding areas situate in the south and prime grazing land in the north was effectively denied because it depended (for all weather access) upon the elevated land adjacent to the highway which, was encompassed by the compulsory acquisition. 299. If, as would appear to be common ground, the claim is founded on s 59(f) of the Just Terms Act disturbance loss includes: financial costs reasonably incurred …. relating to the actual use of the land, as a direct and natural consequence of the acquisition. 300. In my opinion, the supplementary cattle feed costs were "reasonably incurred" within the meaning of s59(f) and the claim should be allowed. 301. In so concluding, I do not think that allowing this disturbance claim involves any "double compensation" or the risk thereof, as suggested by the Respondent in its written submissions. The Respondent suggested that the risk arose because of the fact that the Applicant was being fully compensated for the loss of the acquired land. However, this submission overlooks the true basis for the present claim. It is not the loss of land, rather it is the denial of physical access between the several parts of the Applicant's retained land, which access is essential and fundamental to the abattoir and related cattle fattening and grazing business conducted thereon by the Applicant. 302. In so concluding that the disturbance claim properly compensates the Applicant for that damage caused by the Respondent's construction of the Highway Deviation, I do not think the fact that the long standing access arrangement (involving decades of continuous use) may not be the subject of any private legal right is to the point. The fact is that the access arrangement has not previously been brought into question and the Respondent did not purport to terminate it in any legal sense (assuming that it may have had the power to do so). 303. The remaining two items of disturbance claim relate to small items of damage (cracking etc) to the abattoir building and adjacent caretaker's cottage, probably caused by vibration from the earth moving equipment etc. used in the excavation and highway deviation construction. The claimed amounts total $17,000. 304. In my judgment, these claims have been established and should be allowed. 305. The final claim relates to additional lighting installed in the abattoir building as a result of the diminution in natural light caused by the installation of shutters to prevent dust emanating from the Respondent's construction site from entering the abattoir building. The amount of the claim is $4,586. 306. I am satisfied that this disturbance claim has been established and should be allowed. 307. For all the foregoing reasons, I would allow the Applicant's limited disturbance claims in the total amount of $101,400. Since no submission was advanced by the Respondent that awarding this amount would violate the operation of s 61 of the Just Terms Act, I do not propose to consider that issue, save to say that the effect of that section was extensively discussed in my recent judgment in Peter Croke Holdings Pty Ltd v Roads and Traffic Authority of NSW (1998) 101LGERA 30 at 41 to 44 (and) that there has been no suggestion that the financial loss compensated for by my awarding of the amount of $101,400 for disturbance was a loss "that would necessarily have been incurred in realising that potential". 308. The only other disputed claim for disturbance claimed by the Applicant in consequence of the adoption by the Court of the "Raja" value concerns the claim to compensation for capital gains tax paid or payable by the Applicant in respect of his receiving compensation for the compulsory acquisition. 309. Although the question has been fully argued, with the Respondent submitting that "any claim for additional compensation arising out of the Applicant's asserted liability to income tax on capital gains must be rejected", the Applicant's submissions in reply suggested that until the Applicant's Accountant had negotiated the matter further with the Australian Taxation Office in order to identify the amount of any capital gains tax liability of the Applicant by virtue of his receiving compensation in respect of the compulsory acquisition of his land, the Court would not be in the position to make any final determination. 310. Whereas I appreciate that the Respondent's submission is to the effect that as a matter of legal principle, no income tax liability arising from compensation payable in consequence of the compulsory acquisition can give rise to further compensation in terms of the Just Terms Act and accordingly, no purpose is to be served by reserving the question until any such taxation liability (apart from the amount of $30,146 already paid by the Applicant in respect of the advance payment of compensation made to him in these proceedings) is imposed, I think it more appropriate to adopt the Applicant's submission and reserve the whole question of whether a finite income tax liability incurred in consequence of the payment of compensation for the compulsory acquisition, gives rise to any recoverable basis for compensation in terms of the Just Terms Act. 311. Accordingly, and for all the foregoing reasons, I would grant compensation for disturbance loss in the amount of $101,400 to be paid in addition tot he amount of $1 million that I have determined as the market value of the compulsorily acquired land. There is also to be added to the disturbance the agreed items as established in Exhibit 91 that remain relevant (Exhibit 90). These agreed items total $29,030 which should be added to the disturbance allowed in respect of disputed items. 312. In addition to reserving the question of the claim to compensation based upon any capital gains tax liability, I also reserve the question of compensation in respect of valuation fees and legal costs as referred to in s 59(a) and (b) of the Just Terms Act (the latter question being readily capable of resolution by agreement between the parties). G. CONCLUSIONS AND ORDERS 313. For all the foregoing reasons, I determine compensation in the sum of $1,130,430 being :— (i.) market value $1 million (ii.) disturbance loss $130,430 314. I reserve the questions of whether compensation is payable in respect of any capital gains tax liability incurred by the Applicant in consequence of the award of compensation for the compulsory acquisition in these proceedings. I also reserve the question of compensation in respect of valuation fees and legal costs as referred to in s 59(a) and (b) of the Just Terms Act. 315. Accordingly, I make the following orders: 1. Subject to Order 2, compensation is determined in the sum of $1,130,430. 2. The questions of whether any further compensation is payable to the Applicant in respect of (i) valuation fees and legal costs (as referred to in s 59(a) and (b) of the Just Terms Act and (iii) any capital gains tax liability incurred by the Applicant in consequence of his receiving the payment of compensation awarded in these proceedings are reserved. 3. Exhibits may be returned. 4. Question of costs is reserved. 5. Liberty to apply on 3 days notice. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.