New South Wales Supreme Court CITATION : Glensaugh P/L v The Registrar General [2001] NSWSC 1114 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 4499/98 HEARING DATE(S) : 02/05/01, 03/05/01, 04/05/01, 11/05/01, 16/05/01 JUDGMENT DATE : 4 December 2001 PARTIES : Glensaugh Pty Limited (Plaintiff) The Registrar General (First Defendant) JUDGMENT OF : Santow J COUNSEL : J E Armfield (Plaintiff) M J Slattery, QC/T H Barrett (Defendant) SOLICITORS : Dignan & Hanrahan (by their city agents Turner Whelan) (Plaintiff) Kenneth Charles Hall, Solicitor for the Registrar General (Defendant) CATCHWORDS : PROPERTY -- Damages claimed against Registrar General for wrongly amending Register to show reserved road -- Damages under s126 or s127 of Real Property Act -- Effect of claimed lost opportunity to sell as a golf course -- Causation issues -- Calculation of damages for loss of a chance - 10% discount -- Valuation issues -- Assessment of loss at time of deprivation. Crown Lands Act 1989 Part 3 LEGISLATION CITED : Crown Lands Regulation 1990 regulations 23(2) and (3) Real Property Act (NSW) 1900 ss126 and 127 Cirino v Registrar General (1993) 6 BPR 97452 Christopoulos v Angelos (1996) 41 NSWLR 700 The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 Fink v Fink (1946) 74 CLR 127 Ho v Powell [2001] NSWCA 168 Lakatoi Universal Pty Ltd v Walker (Einstein J, 10 March 2000, unreported) Levi v Colgate Palmolive Pty Ltd (1941) 41 SR (NSW) 48 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 CASES CITED : Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383 Norris v Blake [No 2] (1997) 41 NSWLR 49 Parker v Registrar General [1977] 1 NSWLR 22 Payne v Parker [1976] 1 NSWLR 191 Poseidon Ltd and Sellars v Adelaide Petroleum NL at (1994) 179 CLR 332 Registrar-General v Behn [1980] 1 NSWLR 589 Registrar of Title (Qld) v Crowle (1947) 75 CLR 191 Spencer's Case (1583) 77 ER 72; [1588]-[1774] All ER 68 State Bank of New South Wales v Brown (2001) 38 ACSR 715 DECISION : Damages allowed (para 108). IN THE SUPREME COURT OF NEW SOUTH WALES NAME OF DIVISION NAME OF LIST SANTOW J No. 4499/98 GLENSAUGH PTY LIMITED Plaintiff THE REGISTRAR GENERAL First Defendant Judgment 4 December 2001 Introduction and Overview 1 The Plaintiff, Glensaugh Pty Ltd, is the registered proprietor of property in the County of Camden and brings these proceedings against the Registrar General (as well as the relevant Minister). On 12 November 1992 a critical event occurred. The Registrar General amended the Plaintiff's title so as to create a reservation of a Crown road on the title. Prior to this amendment to the register, in March 1990, the Plaintiff had been granted development consent over the property for an 18 hole 70 par golf course, such approval being valid for a period of two years. Following both the Register General's amendment to the register and the lapse of the development consent, on 30 November 1995, St Andrews Country Club Pty Limited ("St Andrews") entered into an earlier negotiated option agreement ("the options") with the Plaintiff to purchase the subject property to develop as a golf course. This option was never exercised. 2 The Plaintiff contends that the option was not exercised by St Andrews because the project to develop the property was unviable because of the presence or reservation of the Crown Road. On the other hand, the Defendants contend that the sale of the property to St Andrews did not proceed for reasons wholly unrelated to the Crown Road or its reservation on the title, but specifically because the promoters of the St Andrews joint venture were unable to generate sufficient investment interest in the project. 3 Declarations were made by consent between the parties on 23 February 2001 that the amendment of the Register by the Registrar General to include the reserved road was null and void and of no effect, and that all necessary steps would be taken to restore the Register to its position prior to 12 November 1992. In these proceedings the Plaintiff claims damages against the Registrar General by virtue of either or both of ss126 and 127 of the Real Property Act (NSW) 1900, breach of statutory duty, or in negligence for the lost opportunity to sell the property as a golf course and the expense suffered to remove the existing road and restore the site. 4 In order to determine the Plaintiff's claim for damages against the Registrar General this case raises for determination first, whether or not the presence of the road prevented the sale to St Andrews, thereby demonstrating the negative effect of the Crown Road on an available market to exploit the property as a golf course; second, if the sale would have proceeded but for the reservation of the Crown Road, at the relevant time, what value can be attributed to the Plaintiff's lost opportunity to sell the property as a golf course? AGREED SALIENT FACTS 5 In 1810 Governor Macquarie made land grants respectively to William Gaudry, Henry Kable and Andrew Thompson of Portions 3, 4 and 21 in the County of Camden, Parish of Minto. In the grants of Portions 3 and 4 there was a reservation of a road one chain wide and a reservation of the right to make a public road through the land so granted ("the Reserved Road"). (Affidavit of Ross Andrew Simpson dated 30 August 2000, [2]) 6 In about 1953, Edward Morrish Philpott lodged a Primary Application, subsequently numbered 38405, to bring parts of the said Portions 3, 4 and 21 ("the Granted Land") under the Real Property Act, 1900 (NSW). That Primary Application claimed land described in a survey plan, which plan indicated that the Reserved Road was included in the Primary Application. On 8 November 1955, the Registrar General sent a notice to the Under Secretary of Lands giving notice of the Primary Application and directing attention to the inclusion of the Reserved Road in the Application. A letter in reply dated 11 November 1955 was received acknowledging receipt of the notice, indicating that the matter was receiving attention and a further communication would be sent as early as possible. (Affidavit of Ross Andrew Simpson dated 30 August 2000, [2]) 7 Not having heard further from the Under Secretary of Lands, on 30 April 1956 the Registrar General issued Certificate of Title Volume 7114 Folio 65 in respect of the Primary Application. A plan formed part of that Certificate of Title and showed a brown rectangular marking with word 'brown' written on it. That rectangular marking is the site of the Reserved Road (Affidavit of Ross Andrew Simpson dated 30 August 2000, [2]). Subsequently, by letter of 22 January 1957 the Under Secretary for Lands notified the Registrar General that the Department of Lands did not oppose the Primary Application, provided the Reserved Road was excluded from the subject application. 8 By transfer dated 14 June 1972 Philpott transferred the Granted Land to Campbelltown City Council (Affidavit of Ross Andrew Simpson dated 30 August 2000, "L"). By contract dated 29 May 1987 Campbelltown City Council sold the land in Folio Identifier 71/706546, the land in Certificate of Title Volume 6835 Folio 211, the land in Deed of Conveyance No. 791 Book 3058 and the Granted Land to the Plaintiff for $480,000 (Affidavit of Ian Russell Henry dated 14 June 2000, Document 1.) 9 On 30 December 1987, the Plaintiff sold part of the purchased land to Edna Carol Morgan and Edward George Morgan, ("the Morgans"), the sister and sister-in-law of Helen Anne Henry and Ian Russell Henry respectively, directors of the Plaintiff, and her husband. The land sold was Lot 4 in Deposited Plan 21495 (Affidavit of Ian Russell Henry dated 14 June 2000, [9]) 10 In May 1989, Wellings Smith and Byrnes, Planning and Development Consultants, on instructions from the Plaintiff, prepared a document entitled "Statement of Environmental Effects". That document referred to the Plaintiff proposing "to develop a regulation sized 18 hole golf course with ancillary facilities including a "clubhouse", caretaker's quarters, machinery sheds and a car park" on "Glendallo, a 75 hectare property". That site was later described as "Lots 2-6 in D.P. 88405 and part Lot 7 of Gledswood Estate". It was noted that the zoning prohibited clubs on the land. The report then noted that "(It is not intended to establish a club on the site).". Later, the report noted that "Preliminary studies indicate that an 18 hole par 70 golf course, conforming to the requirements of the regulations for competition at international standard, can be constructed on the site." (Affidavit of Ian Russell Henry dated 14 June 2000, Document 29). On 6 March 1990, Campbelltown City Council granted Development Application for a golf course (Affidavit of Ian Russell Henry dated 14 June 2000, [29]) (Exhibit DX3). That Approval was valid for a period of two years (Exhibit DX3). 11 In about 1990 the Plaintiff was involved in negotiations with the Japanese conglomerate, Mitsubishi, through Price Waterhouse, to sell the Granted Land. However, Mitsubishi required more land than the Plaintiff had available and the negotiations did not proceed to fruition (T, 32.10 - 32.55) (Exhibit DX10). 12 On 27 February 1992, the Plaintiff was de-registered. (Affidavit of Ross Andrew Simpson dated 30 August 2000, [2(j)], "N") (Affidavit of Ian Russell Henry dated 14 June 2000, Document 13). 13 By letter dated 29 June 1992, the Department of Conservation and Land Management ("CALM"), the successor to the Department of Lands, wrote to the Registrar General indicating that the Morgans had been enquiring about using the Reserved Road for access, asserting that, inter alia, the Reserved Road should not have been included in the Plaintiff's title and requesting, inter alia, the Reserved Road be excluded from the Plaintiff's title (Affidavit of Ross Andrew Simpson dated 30 August 2000, [2(j)] "M"). 14 On or about 20 July 1992, Robert Miner a director, secretary and accountant for the Plaintiff received notification from the Australian Securities and Investment Commission ("ASIC") that the Plaintiff had been de-registered (Affidavit of Robert Miner dated 23 April 2001 [4, 9]) (Exhibit DX19). He may have been aware of the de-registration at an earlier time (T, 205.35). 15 On becoming aware that the Plaintiff was de-registered, by letter of 28 September 1992 the Registrar General gave notice to the Plaintiff, care of ASIC, and the Advance Bank Australia Ltd of the request made by CALM and indicated his intention to amend the Register within 28 days, for which he invited any objections (Affidavit of Ross Andrew Simpson dated 30 August 2000, [2(j)], "P", "O"). No response being received to that correspondence, the Registrar General, on 12 November 1992, amended the Register by including on the Plaintiff's title the words "EXCEPTING THE ROAD RESERVED IN THE GRANTS OF PORTIONS 3 AND 4 AND SHOWN COLOURED BROWN" (Affidavit of Ross Andrew Simpson dated 30 August 2000, [2(j) "L"). 16 In December 1992, CALM notified the Morgans that "The road recently reinstated on the titles of the property formerly owned by Glensaugh Pty Ltd (now deregistered) comprises a Crown road and is available for the use of the public generally for bona fide access purposes." (Affidavit of Ian Russell Henry dated 14 June 2000, Document 5). Mr Morgan then took matters into his own hands and commenced to construct a formed road along the Reserved Road (Affidavit of Ian Russell Henry dated 14 June 2000, [13 and 14]). He apparently asserted that he had CALM permission to do what he was doing, but that was not in fact the case (Affidavit of Ian Russell Henry dated 14 June 2000, Document 6, 8, 10 {reference to letter of 11 November 1992 would seem to be an error and should be 11 December 1992}, 17, 23). 17 Thereafter, there was a flurry of communication and correspondence involving the Plaintiff, its solicitors, CALM, the Morgans, the Campbelltown City Council and the Minister for CALM. This resulted in a cessation of the road works, other than for a brief resumption on 11 January 1993. This resumption was related to the removal of fallen trees and earth embankments which had been placed on the Reserved Road since the initial road works in December 1992 (Affidavit of Ian Russell Henry dated 14 June 2000, Documents 6, 8, 9, 10, 11, 17). The road was subsequently constructed in February 1994, after an application was made to CALM to construct it (Affidavit of Ian Russell Henry dated 14 June 2000 [24], Document 20). 18 In the interim, between the making of the application to construct the road and its construction, by application dated 14 October 1993, Mr Henry, on behalf of the Plaintiff, applied to CALM to close the Reserved Road. CALM did not support that application (Affidavit of Ian Russell Henry dated 14 June 2000, Document 22, 23). 19 During the course of 1995, Mr Henry was in negotiation with the principals of St. Andrews Country Club Pty Ltd in relation to the granting to that company of an option to purchase in respect of both "Glendallo" and "Linden Lodge". The latter was a property owned by Mr and Mrs Henry, which adjoined and was partially surrounded by "Glendallo". By August 1995, those negotiations were sufficiently advanced for instructions to be given for the drawing of an agreement. (DX11). Ultimately, two documents came into existence, being an Option in respect of "Glendallo" (DX4) and an Option in respect of "Linden Lodge" (DX9). 20 By application dated 8 September 1995, the Plaintiff made a further application to close the Reserved Road. This application was referred by CALM for enquiry and report to the Metropolitan Land Board. The matter came before the Land Board on 15 December 1995, and 1, 2 and 3 April 1996. An interim report was then delivered by the Land Board on 10 May 1996 (Affidavit of Ian Russell Henry dated 14 June 2000, Document 25,26, 27). Thereafter, the Plaintiff withdrew its application. (Affidavit of Ian Russell Henry dated 14 June 2000 [27]). 21 By letter of 2 September 1996, the Registrar General wrote to the Plaintiff inviting the submission of any claim for compensation on the part of the Plaintiff as a consequence of the amendment of the Register (Affidavit of Ian Russell Henry dated 14 June 2000, Document 28). 22 The Plaintiff commenced the present proceedings by Statement of Claim filed 2 November 1998. 23 On 23 February 2001, declarations were made by consent in these proceedings in the following terms: (a) declaration that the purported correction by the Registrar General pursuant to s12(1)(d) of the Real Property Act on 12 November 1992 to the title Volume 7114 Folio 65 by the inclusion thereon of the words "EXCEPTING THE ROAD RESERVED IN THE GRANTS OF PORTIONS 3 AND 4 AND SHOWN COLOURED BROWN" ("the Correction") is null and void and of no effect; and (b) order that the Registrar General take all such necessary steps to delete from the said title Volume 7114 Folio 65 the Correction and restore the Register in this respect to its position prior to 12 November 1992. QUESTIONS FOR RESOLUTION 24 I turn now to the issues requiring resolution, both factual and legal, as follows. Question 1 Causality 25 Did the presence of the Crown Road prevent the sale of the property to St Andrews pursuant to the option? Question 2 Lost Opportunity, Basis of Liability 26 If the answer to Question 1 is "yes", are the Defendants liable to the Plaintiff in relation to the lost opportunity to sell, on the basis of a statutory cause of action pursuant to s126 and/or s127 of the Real Property Act, breach of statutory duty or in negligence? Question 3 Damages and Causality 27 If the answer to Question 2 is yes, are damages recoverable for (a) the lost opportunity, and (b) the cost of removing the existing road and restoring the site or are these not so causally connected to the Registrar General's amendment of the register on 2 November 1992 as to permit such recovery? In particular should any discount be applied for loss of the chance or opportunity so to sell the land as a golf course pursuant to the option? Question 4 Quantum of damages and valuations 28 Depending on the answers to the previous questions, for purposes of damages what value can be attributed to the Plaintiff's lost opportunity and in particular (a) is the option material in determining the Plaintiff's damages; (b) should the Plaintiff's damages be reduced because it did not seek an injunction? Question 1 Causality 29 I turn now to consider why St Andrews did not proceed to exercise the option entered into with the Plaintiff and set out below the chronological events and evidence as they bear upon this issue. 30 I start with brief details in respect of the members of the St Andrews joint venture. Mr Bourke was the Managing Director of Sportscapes Australia Pty Limited, a party to the venture as a design and construction expert (PX1A Tab 30 p.8). Mr Bourke was the person left to deal with the question of the road (T, 46.52 – T47.1; T, 166.54 – T, 167.30; T, 86.37 - T87.16). He was a principal decision-maker about issues of the viability of the golf course project: T, 86.40 and T, 167.3. Mr Bourke was not called by either party, and enquiries about his whereabouts suggested that he was in New Zealand: T, 75.35; T, 173.30. Mr Kijurina, called by the Plaintiff, was responsible for looking for project opportunities and only to a small degree researching investors for the project: T, 155.50 - 55; T, 162.55 - T163.10. Mr Curry, called by the Defendants, was responsible for running a number of financial projections under various scenarios and to a limited extent had a role in marketing the proposal: T, 81.20. Mr Gregory was responsible for researching investors in relation to the proposal: T, 163.10. Mr Gregory was not called by either party. 31 Contrary to the Defendants' submission I am not prepared to draw an inference adverse to the Plaintiff by reason of its failure to call Mr Bourke. Although it is clear from the evidence that Mr Bourke was a principal decision maker in the final decision whether or not to go ahead with St Andrews' proposed development of the Plaintiff's property, there was absolutely nothing to stop the Defendants calling him. He was not specifically in the Plaintiff's "camp". As Hutley JA observed in Payne v Parker [1976] 1 NSWLR 191 at 197F a Jones v Dunkel direction should not be given, unless there is actual evidence before the jury that the witness whose absence is to be the subject of comment is not available to the party (here the Defendants) seeking the benefit of inferences from his absence. In this case the Defendants sought and obtained the evidence of Mr Curry as a director of St Andrews. In such circumstances the Defendants' suggestion that Mr Bourke was in the Plaintiff's "camp", on the basis of the letter of the 2 November 1995 (Exhibit DX1A document 31) written to the Minister for Planning and Urban Affairs when it was to optimise any outcome in the interests of St Andrews, must be rejected. It is well settled that the rule in Jones v Dunkel only applies to circumstances where a party fails to call evidence to rebut an inference that otherwise might be drawn against that party. A similar principle, again not applicable in the present case, applies to a party who bears an ultimate or evidentiary onus to prove something. If such a party, without explanation, fails to call evidence which the party would be expected to have and to call in order to discharge that onus, a court is justified in approaching the matter on the basis that such evidence would not have assisted the party's case; see Hodgson JA in State Bank of New South Wales v Brown (2001) 38 ACSR 715 at 731 citing Ho v Powell [2001] NSWCA 168. 32 The evidence discloses that St Andrews commenced meetings with an eye to the development of the Plaintiff's property as a golf course in February 1995, and these meetings were held weekly for several weeks: T, 157.55 – T, 158.1. On 21 July 1995 St Andrews decided to proceed with the project: T, 163.23. 33 In August 1995 Mr Ockwell, the Deputy Director of CALM, advised Mr Henry that he believed that he could get the road taken off the title of the subject property: T, 35.10 - 40. 34 On 16 August 1995 Mr Henry, on behalf of the Plaintiff, sent a fax to his solicitor, Dianne Burgess in respect of negotiations he had held with Mr Bourke to discuss the terms of an option over "Glendallo" and "Linden Lodge": DX11. Relevantly, the fax contained the following: "Whilst the possibility of now closing the Crown Road has now become real over the past few days and will greatly enhance the property John Bourke is very well advanced in his design decisions and consequently not happy or prepared to fully compensate for this possible benefit and I have reluctantly agreed that if the Road closure does legally transpire during the option period the relative considerations will only increase by $200,000…" 35 On 2 November 1995 Mr Bourke wrote a letter to the Minister for the Department of Land and Conservation in respect of the proposed road closure affecting the subject property: PX1A Document 31. I set out the relevant terms below: "The company has spent over six months at considerable cost, to re-design the course and prepare a new planning application to be submitted in the next week or so. To include the provision for a "road" to remain within the present golf course layout simply is not a viable proposition… Much as we would wish to proceed with the purchase of this land from Glensaugh Pty Ltd it is most unlikely we would settle on the property with the road remaining in its present location, if at all, on the development… It is simply not possible to design a championship international course crossing a road on numerous occasions." 36 On 30 November 1995 St Andrews executed the option agreement: DX4. Paragraph 29 of the special conditions of the contract attached to the option provided: "If the Vendor is successful in having the road so removed prior to completion of the contract, the price to be paid for the property shall be increased by the sum of $200,000 in either of the circumstances described in special condition 28 hereof. If the said road is closed and removed from the title after the date of completion of this contract but within a period of six months from the said date of completion, the purchaser shall pay to the vendor the sum of $200,000 within 21 days of the date on which the said road shall be removed from the title." 37 In early 1996, perhaps as late as 2 April, St Andrews issued to prospective investors a proposal outlining the facilities and financial potential of the proposed golf club: PX1A document 30. 38 On 21 April 1996 Mr Bourke wrote a letter to Mr Dennis Moore, the Chief Town Planner of Campbelltown City Council. The thrust of the letter was in the following terms: "To enable us to attract the investors, we need to provide onsite accommodation at the club. This can be in the form of suites or chalets…We consider something in the order of twenty five – thirty five units or chalets would be sufficient to satisfy our clients needs." 39 On 30 June 1996 the option to purchase "Glendallo" expired. There is no evidence that St Andrews sought to extend the time in which the option could be exercised pursuant to the terms of the Deed. 40 There is some dispute between the parties as to the interpretation and significance to be attached to the terms of the option and the correspondence outlined above. First, the Defendants contend that paragraph 29 of the special conditions of the contract attached to the option which provided for the purchaser to pay an additional sum of $200,000 if the road was removed prior to completion of the contract, or within six months of completion, contemplated that when St Andrews exercised the option to purchase it would take the property subject to the Reserved Road and that exercise of the option did not depend on the road. Further, the Defendants claim that had the Reserved Road been an unsurmountable obstacle to the design of the golf course on the site, one would have expected that the option would only have been exercisable for a single consideration and only in the event of removal of the Reserved Road. 41 However, the terms of paragraph 29 are equally explicable by the desire on the part of St Andrews at the time of negotiating the option to secure the property and to attempt to design a Golf Course that accommodated the roadway. On that interpretation, entry into the option on the terms contained in paragraph 29 reflects the fact that the members, including Mr Bourke, were not sure whether or not a design around the golf course could be viably achieved. Indeed, despite Mr Henry's assurances that the Crown Road was likely to be removed it is clear that Mr Bourke attempted to design a golf course around the road. Such attempts were evidenced in the cross-examination of Mr Henry (T, 49.30 - 50): Q. Well, I suggest to you that you had a negotiation with Bourke and among other things, you and he discussed the fact that he was trying to design a golf course with the road there ? A. That's correct, yes. Q. And he told you he was well advanced with that, didn't he ? A. It was on a number of occasions he tried to get the design to work but, ultimately, it didn't work. Q. I put it to you that he was well advanced in his design decisions about designing a course with the road there ? A. That could well be true. I just don't recall him saying specifically that." 42 Mr Kijurina did not recall having seen Mr Bourke design a course on paper for this site: T, 168.5. However, in cross-examination he conceded that he could not say whether or not such a practical attempt was made: "There were plenty of sketches done. John did a lot of things on which in his mind he walked over the site, he went over the site repeatedly, as you see from the material you have got. There is no road in the actual course design that John came up with. I am sure he looked at other options apparently that would not have worked with a road in it; that was why it was just left out." (T, 168.40 - 47) 43 Nevertheless, between the date of negotiating the terms and actually entering into the option, Mr Bourke sent the letter of the 2 November 1995 to the Minister for the Department of Land and Conservation expressing the view that design of a golf course around the Crown Road was impossible. On one view, and in the light of Mr Bourke's attempts to reconfigure the golf course to accommodate the road way, this letter might be considered to be simply special pleading on the part of Mr Bourke to acquire the best possible outcome for the venture. However, a period of close to three months had elapsed between the date of negotiation of the option and Mr Bourke's letter. It is open to infer that during this period Mr Bourke had become increasingly convinced that the task of redesign was impossible so long as the road remained on the title though he may not have finally closed out that possibility altogether of building the golf course to accommodate the road. I incline to the latter interpretation. 44 This said, nonetheless on the evidence I would conclude that the members of the St Andrews venture, from the time that they decided to pursue the project in July 1995, had been assured by Mr Henry that, and were of the view that, they could confidently expect that the road would be removed. In making such a finding I rely upon the evidence of Mr Kijurina. He under cross-examination claimed "(t)he crown road wasn't brought up [during the meetings in 1995] – how can I put it – wasn't brought up constantly because it was understood it was going to be removed." (T, 158.10) (see also T, 178.40 per Mr Kijurina). I would accept his evidence on that point, finding him generally a convincing witness. 45 In any event a decisive factor in determining the commercial viability and reasonableness of the evidence given by Mr Kijurina about St Andrew's entry into the option on 30 November 1995 is the fact that the consideration for the grant of the option up until 30 June 1996 was only a nominal $100.00. This sum was increased with subsequent applications to extend the time in which the option might be exercised, being $10,000 if extended until 31 July 1996, an additional $15,000.00 if extended until 31 August 1996, and a further $20,000.00 if extended until 30 September 1996. On any reasonable interpretation an option grant price set at such a modest level clearly meant that St Andrews was able to secure the property under the option, with the costs involved being no financial deterrent more especially in light of the anticipated financial projections if the project went ahead. Accordingly, it is entirely reasonable that St Andrews sought at the outset to secure the capacity to acquire the property under the terms of the option, even in the event that the road were not removed at some time in the future. Nonetheless, I am satisfied that after the option was acquired, it became clearer during the course of investigation, that the underlying probability, removal of the road was likely to be at least highly desirable and probably essential. When it was suggested to Mr Kinjurini in cross-examination that it was only rationally and commercially expedient to proceed with an option in circumstances where St Andrews knew the road either would be removed or if it was not removed could be accommodated by the golf course design Mr Kinjurini answered: "No, that is not correct…There is a real concern if you don't make a decision somebody is going to make a decision and gazump you. We would have to make a decision to proceed even though the road was still there on the basis that the road was not going to be there at some point along the path" (T, 180.30) 46 This interpretation of the circumstances prevailing at the time the option was entered into and also Mr Bourke's correspondence to the Minister, are both consistent with Mr Kinjurini's recollection that the figure for the deal in general was considered to be "quite substantial" or "very high" (T, 169.33 - .37) and that there was "a bit of unhappiness about the price being asked, whether a fair price or not." (T, 181.20). Such evidence suggests that St Andrews were looking to the optimum outcome of the deal, the removal of the road, and had already factored this into the price that they were prepared to pay. 47 In the light of this already high price and in the knowledge that in August 1995, when the option was being negotiated, St Andrews knew that the possibility of closing the Crown Road had become real, it is unsurprising that it was not prepared to pay very much more for the property if the road were in fact removed, as opposed to entering into an option in circumstances where there was a very real prospect that it was going to be removed. For his part, Mr Henry used the likelihood of the road's removal as a negotiating lever to obtain an increase in the price which St Andrews was prepared to pay (T, 50.38 - .60). 48 Furthermore, the "possible benefit" to be obtained by St Andrews referred to in Mr Henry's fax of 16 August 1995 is open to a number of different explanations, none of which Mr Henry was pressed upon in cross examination. First, it may refer to the benefit of certainty and time from the roadway's removal that St Andrews might have gained had the condition been fulfilled. Second, it may refer instead to Mr Henry's understanding of St Andrew's viewpoint at the time of the negotiations when he knew Mr Bourke had been engaged in attempts to design plans accommodating the roadway and although he "had great concerns personally that [Mr Bourke] would not be able to design the road into the deal. If he could. Well and good." (T, 49.50) 49 This interpretation of the events is consistent with St Andrews' release in April of the following year (1996) of a brochure designed to encourage investment in the project. No reference was made to the Crown Road in the contents of the brochure, nor did the diagram of the proposed course include the Road. If, in the final analysis and assessment of design options, the roadway was not going to be part of the golf course, then there was no need to mention it in the marketing document. From the evidence, I am prepared to draw the inference that the brochure was prepared on the assumption that the road way would be removed before the investors committed funds to the proposal. 50 On this basis, Mr Bourke's letter of 21 April 1996 to the Chief Town Planner of Campbelltown City Council requesting consideration to be given to permitting onsite accommodation to attract investors, and Mr Large's concession that it would be more desirable for the site to have had development consent to permit the construction of villas or similar development (T, 80.15 - .20), pose additional obstacles to the development of the property as a golf course. However, whilst Camden Lakeside nearby had approval for convention facilities, hotel rooms and equestrian facilities it was not in fact developed with those facilities, and as such I would not accept that a development would be non-viable if these features were absent from the subject property. 51 In any event, on the evidence, I am first and foremost of the view that by April 1996 Mr Bourke had determined that accommodation of the road was impossible and that any additional steps taken to further the venture were on the assumption that the road would be removed. Accordingly, I conclude that the effective reason that the option was not exercised by St Andrews by 30 June 1996 was that despite all assurances, the road had still not been removed. Conclusion 52 I am satisfied that the presence of the Crown Road did prevent the sale of the property to St Andrews, such that the necessary causal connection between the two is established.. Question 2 Lost Opportunity, Basis of Liability 53 The Plaintiff's case proceeds on the basis that it lost the opportunity to sell the property as a Golf Course and suffered the expense of removing the existing road and restoring the site. The Plaintiff contends that the defendant is liable for its loss by virtue of s126 or s127 (or both) of the Real Property Act 1900 (NSW), or for breach of statutory duty, or in negligence. The statutory cause of action 54 Although the Plaintiff seeks compensation in its Amended Statement of Claim pursuant to s126 and/or s127 of the Real Property Act, and in its submissions addressed its entitlement under s127, it is clear from the terms of s127 that in order to be entitled to compensation under that latter section the remedy provided by s126 must be inapplicable. Section 127 is in the following terms:- "(1) Any person sustaining loss or damages through the omission, mistake or misfeasance of the Registrar-General or any of the Registrar-General's officers or clerks in the execution of their respective duties under the provisions of this Act, or by the registration otherwise than under section 45E of any other person as proprietor of land, or by any error, omission, or misdescription in the Register, and who by the provisions of this Act is barred from bringing proceedings in the Supreme Court or the District Court for possession of that land, or other proceedings or action for the recovery of such land, estate, or interest or to whose claim every such proceedings or action would be inapplicable may, in any case in which the remedy by action for recovery of damages as hereinbefore provided is inapplicable , bring an action against the Registrar-General as nominal defendant for recovery of damages." [my emphasis] . 55 Relying on its pleading of s126 in its Amended Statement of Claim the Plaintiff has proceeded on the basis that s126 is applicable. Section 126 is in the following terms: "(1) Any person deprived of land or of any estate, or interest in land: (a) in consequence of fraud; or (b) through the bringing of such land under the provisions of this Act; or (c) by the registration of any other person as proprietor of such land, estate, or interest; or (d) in consequence of any error, omission, or misdescription in the Register, may bring and prosecute in any Court of competent jurisdiction an action for the recovery of damages. (2) An action under subsection (1) shall, in any case in which the land to which the action relates has been included in two or more folios of the Register created under Part 3, or a folio of the Register has otherwise incorrectly been created under Part 3, be brought and prosecuted against the Registrar-General as nominal defendant and, in any other case, shall, subject to subsections (3), (4) and (5), be brought and prosecuted against the person: (a) upon whose application the land was brought under the provisions of this Act; (b) upon whose application the erroneous registration was made; or (c) who acquired title to the land, or the estate or interest therein, through the fraud, error, omission or misdescription." 56 In terms of s126, the Registrar General's act in amending the register on 12 November 1992 did amount to an "error, omission or a misdescription in the Register" because it had the effect of creating an entry in the register which incorrectly described the Plaintiff's title by omitting reference to the area which was the subject of the reserved road from the title (see para [30] of the Plaintiff's submissions). 57 Although the Plaintiff has now had the estate or interest returned to it by the Registrar General, the Plaintiff nonetheless meets the statutory description of a person "deprived" of an interest in land for the purposes of s126 of the Act. As the Defendants conceded, the Plaintiff must so qualify following the decision in Parker v Registrar General [1977] 1 NSWLR 22 where Mahoney JA observed in the Court of Appeal (at 28G): "The fact that, as far as the company's interest was concerned, it later ceased to be registered as proprietor of the land it acquired and that land was revested in the plaintiffs, does not, in my opinion, mean that for the purposes of s126(1), the plaintiffs were not a "person deprived of land" as far as concerns the company. The fact that the land was subsequently revested in them goes, in my opinion, only to damages…I see no reason to doubt that, even though the land be revested, the person affected is entitled, in an appropriate case, to recover, for example, the rents and profits from the land during the period of his deprivation in so far as they have been lost to him because of it." 58 However, there is some dispute between the parties with respect to the date at which damages should be assessed. On the basis that damages should be calculated so as to put the person in the same position, so far as money can do, as if the wrongful act had not been done, the Plaintiff contends that damages should be assessed as at 12 November 1992, this being the date at which the Registrar General amended the register to include the Crown Road and the Plaintiff suffered loss. On the other hand, the Defendant contends that damages should be assessed at the date of hearing. 59 In Registrar-General v Behn [1980] 1 NSWLR 589 Mahoney JA delivering the judgment of the Court observed (at 597) that while Spencer's Case (1583) 77 ER 72; [1588]-[1774] All ER 68 and Registrar of Title (Qld) v Crowle (1947) 75 CLR 191 should not be seen as limiting damages in all cases to the value of the land at the date when the plaintiff was deprived of it, he did not mean to express the view "that in every case damages under the statutory count should be assessed by reference to the value of the land of which the plaintiff was deprived at the time of judgment". He considered that each case should be considered according to its own facts, and that the damages awarded must be commensurate with the loss that the plaintiff had sustained and as such would put the plaintiff in the same position so far as money can do it as if the wrongful act complained of had not been done (citing Spencers case (supra)). 60 On the basis that from 12 November 1992 the Plaintiff was deprived of the opportunity to sell the property as a Golf Course by the Registrar-General's amendment of the register, I take the view that it is appropriate in the present circumstances to assess the land value at the date of deprivation. Clearly, although at the time of the Registrar-General's purported correction of the register the development consent had already lapsed, the fact that St Andrews thereafter entered into the option indicates the existence of a market prepared to purchase the land on the basis that a further Development Application could be obtained in the future. 61 A further issue arises as to whether damages for the loss of opportunity claimed by the plaintiff are available at all under s126 or s127. The Defendant contends that the authorities require that only actual established loss is recoverable. In Cirino v Registrar General (1993) 6 BPR 97452 Cole J said (at 13,268) that "s127 of the Real Property Act 1900 gives a remedy only to a person 'sustaining loss or damages'. It does not confer a remedy for prospective loss." However, in that case the loss was only prospective, being the loss that the plaintiffs would suffer if a heightened building was built upon Lot 1, or when the plaintiffs or their executors sold Lot 2 without the benefit of the single storey covenant burdening Lot 1, or when they made a payment to the owner of Lot 1 for the reinstatement of the single storey covenant as a burden upon Lot 1 (at 13,269). In this case, the resulting (and not anticipated) loss and the quantum of that loss, being the loss of the sale of the property as a golf course, have been the subject of evidence, in circumstances where that loss is now capable of being established, so is not to be considered "prospective loss": see Cole JA in Christopoulos v Angelos (1996) 41 NSWLR 700 at 711. 62 The Defendant also seeks to take issue with the extent to which the damages awarded can relate to land which is not the subject of the Registrar-General's error. The Defendant contends that damages are only appropriate in respect of the rents and profits from the land during the period of the Plaintiff's deprivation that might have been generated by the land the subject of the road. The Defendant claims that it is mere happenstance that the Plaintiff owns the adjoining property which together with Portions 3 and 4 is said to have special value. On the other hand, the Plaintiff claims that to ignore the fact that the Plaintiff owned property besides that which was the subject of the road would be to ignore the true nature of the Plaintiff's loss which was the opportunity to develop the site as a Golf Course and the cost of restoration. By analogy with the "egg-shell skull rule", the fact that the Registrar-General should have foreseen that its amendment to the Plaintiff's title on 12 November 1992 might result in economic loss to the Plaintiff, means that the Registrar-General is responsible for the full extent of damage to the Plaintiff, even though, owing to particular circumstances analogous to some unusual weakness or defect peculiar to the Plaintiff, in this case the Plaintiff's ownership of adjoining property and its vulnerability to being deprived of its best use by the intrusion of the Crown road, the damage was greater than that which would have been suffered by the ordinary person: Mount Isa Mines Ltd v Pusey (1970) 125 CLR 383; Levi v Colgate Palmolive Pty Ltd (1941) 41 SR (NSW) 48. The defendant must take the plaintiff as it found him. 63 Accordingly, given that the Plaintiff has established on the balance of probabilities that it suffered loss or damage as a result of the loss of its commercial opportunity to sell its property to St Andrews (Poseidon Ltd and Sellars v Adelaide Petroleum NL at (1994) 179 CLR 332 at 355), and on the basis that the Plaintiff can show the necessary causal connection between the Registrar General's error or misdescription and the loss or damage suffered, it is entitled to damages pursuant to s126 of the Real Property Act 1900. 64 Given my findings in respect of s126 it is unnecessary to consider the Plaintiff's alternative claims, being breach of statutory duty and negligence. Question 3 Damages and Causality 65 The Plaintiff claims damages under two heads. The first is the loss of opportunity to sell the subject property as a Golf Course and the second is the cost of removing the existing road and restoring the site. The Plaintiff contends that each of these losses was caused by or resulted from the Registrar General's act in purporting to "correct" the Plaintiff's Certificate of Title so as to exclude the land which was the subject of the road. The Loss of Opportunity 66 On the basis of the traditional "but for" test, one is required to ask whether the damage would not have occurred but for the wrongful act. The evidence discloses that Mr Henry, acting on the Plaintiff's behalf, acquired the property with the intention of either developing it into a Golf Course or using it as a place for Mr Henry to retire: T, 28.55 – T, 29.25. In March 1990, Mr Henry applied for and was granted a Development Application by Campbelltown Council to develop the property as a golf course, though this was for a private club to operate on the site (T, 44). Mr Henry indicated that thereafter he intended to develop the property as a golf course and, though with some interruptions due to illness, sought to attract potential developers: T, 32.4 - .55. I am satisfied that the illness the Plaintiff was suffering explains why, in the period from early 1990 to December 1992, the Plaintiff did not actively seek out potential investors, interest having been earlier manifested by a Japanese group (see T, 32.10 and 34). At the time of the Registrar General's amendment of the register, I am satisfied the Plaintiff enjoyed the benefit of a real opportunity to sell the property for development as a golf course. That said, for reasons developed below, some discount is required to take account of the possibility that sale for use as a golf course would not prove feasible. 67 The prospects for this opportunity are substantiated by the fact that an option was indeed granted to St Andrews on 30 November 1995 (having been earlier negotiated) to develop the property as a golf course. In the light of my earlier findings of fact, I conclude that, but for the presence of the road on the title, it would have been more likely than not that St Andrews would have exercised the option. I deal below however with the discount to be applied to take account of the lesser possibility of that exercise (or a like sale) not coming about, doing so on the hypothesis that the reservation for the road had not occurred. The road in fact remained on the title until 23 February 2001 when declarations were made by consent to delete the Registrar General's earlier mistaken amendment. This was at a time when the earlier opportunity to develop the property as a golf course had disappeared due to a number of such developments in close proximity to the property: Mr Kijurina's Affidavit, 9 March 2001, para 11. Accordingly, I am satisfied that this loss of opportunity was caused by the Registrar General's earlier wrongful amendment to the register. 68 The fact that the loss or damage sustained was of an opportunity to obtain a commercial advantage or benefit rather than a straightforward "actual" loss, is no impediment to a claim for damages, although it may be relevant in determining the quantum of damages awarded: per Mason CJ, Dawson, Toohey and Gaudron JJ in Poseidon Ltd and Sellars v Adelaide Petroleum NL at (1994) (supra) at 355-56; Brennan J at 364. While the loss of a mere opportunity to acquire a benefit is not in itself a loss, the loss of the benefit will be such a loss if the plaintiff, as here, proves that it could and would have taken the opportunity and that the benefit would then have been yielded: per Brennan J at 362. 69 The question of how loss of such a chance is to be valued is dealt with in the propositions below. 70 The propositions below proceed on the basis that the Plaintiff (as I am satisfied it has) has demonstrated on the balance of probabilities that the loss of opportunity for which compensation is claimed was caused by the defendant and had some real value. (i) A lost commercial advantage or opportunity is a compensable loss even though there may have been a less than 50 per cent likelihood that the commercial advantage would be realised: The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 per Mason CJ and Dawson J at 92, Brennan J at 102-4 and Deane J at 118-19; Poseidon Ltd and Sellars v Adelaide Petroleum NL per Mason CJ, Dawson, Toohey and Gaudron JJ at 349. (ii) Subject to the Plaintiff proving on the balance of probabilities that the Defendant's breach caused it some loss, the damages will be ascertained by reference to the degree of probabilities, or possibilities, inherent in the Plaintiff's success in securing the object of the chance had the Plaintiff been given that chance: Poseidon Ltd and Sellars v Adelaide Petroleum NL per Mason CJ, Dawson, Toohey and Gaudron JJ at 349. (iii) Accordingly, in this area evaluation becomes a matter of informed estimation, proof on the balance of probabilities having no part to play in the evaluation of such hypotheses or possibilities: Lakatoi Universal Pty Ltd v Walker (Einstein J, 10 March 2000, unreported) at para [1402]. (iv) Save for the references to percentages in the majority judgment of the High Court in Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 643-45 there is no High Court authority which supports the adoption of a scientific, or quasi scientific, approach to the assessment of damages in a case in which there is a requirement that account be taken of future possibilities and past hypothetical situations: Norris v Blake [No 2] (1997) 41 NSWLR 49 at 68-69 per Clarke JA (with whom Handley and Sheller JJA agreed) (v) Nonetheless, if there is evidence in a case capable of demonstrating that a particular scientific approach is likely to reach a more accurate assessment than an intuitive judicial approach then, provided full weight is given to the uncertain nature of the future, there is no reason for failing to adopt that method: Norris v Blake (supra) at 68-69 per Clarke JA (vi) Accordingly, the force of the possibilities and probabilities operative in any particular case may, but need not, be expressed in the award as a percentage of the greatest possible loss which the Plaintiff might have suffered of the type in question: Malec v J C Hutton Pty Ltd (supra) at 639-40 per Brennan and Dawson JJ. (vii) Where the Plaintiff establishes that has been an actual loss of some sort, difficulties in estimating the loss in money will not defeat an award of damages: Fink v Fink (1946) 74 CLR 127 per Dixon and McTiernan JJ at 143. (viii) However, extreme cases do arise in which curial procedures are inadequate to: (a) determine whether there was any real or significant chance that an alleged benefit would actually have been obtained but for the contractual breach; (b) assess the intrinsic worth of a particular suggested 'benefit': Amann (supra) per Deane J at 125-6. (ix) In particular, the damage arising from loss of opportunity to obtain a benefit may be so dependent upon a number of contingencies as to be negligible (so no compensable damage results): Fink v Fink (supra) per Latham CJ and Williams J at 134. Discount for a chance? 71 I turn now to the question what discount, if any, should be applied in quantifying damage for loss of the chance to have sold the property as a golf course pursuant to the option or by way of some other equivalent transaction? I do so, having earlier concluded that the loss of that opportunity was caused by the Registrar General's earlier wrongful amendment to the register. 72 The arguments put by the Defendant for a heavy discount on the opportunity to develop the subject property as a golf course in 1995 and immediately following are to an extent a repetition of the arguments I have rejected, denying there was any such opportunity at all. They are conveniently set out in the Defendants' written submissions as follows: "(a) no reliable evidence has been called to establish that the St Andrews venture would have proceeded and the option would have been exercised had the Reserved Road in fact been removed; (b) no evidence has been called to establish that the Campbelltown Council would have agreed to the variation of the development consent obtained in 1990 to permit a private club to operate on the site (T, 44). A private club on the site was a very different proposal from that in the original DA. It is difficult to imagine investors being attracted to such a venture unless they could also have the benefit of membership; (c) all the evidence in the case suggests that golf course developments such as this are only viable with surrounding residential or commercial supplementary development (T, 80.20). Despite the fact that this was exactly what the only investment interest being shown in the property was demanding (Curry, T, 92.30), there was no evidence that Campbelltown Council were likely to approve any such change to the DA, indeed the only available evidence on that subject is to the contrary (T, 92.45). (d) If Mr Kijurina is right and the road was always going to be removed, then the investment performance of the project should really be assessed on the same basis, namely that the road was going to be removed. Even on that basis, the investor interest was so negligible that neither Mr Curry nor Mr Kijurina was able to recollect the names of any potential investors other than FAI who rejected the proposal (T, 164-5). (e) There is strong evidence that the deal was an ill fated one right from the beginning because Mr Henry was demanding too high a price for the property about which St Andrews and Mr Curry in particular were very unhappy according to Mr Kijurina (T, 169.40). If that is right, the deal was very unlikely to go ahead." 73 Taking each of these factors seriatim, perhaps the strongest evidence for the likelihood that the golf course option would have been exercised, or a like deal transacted, is the fact that a number of golf courses have been developed in the area near the subject property since 1995. Indeed as of now that number makes the subject property no longer viable as a golf course. No convincing evidence was advanced to the effect that the topography of the property was in some way unsuitable for a golf course; the fatal defect was clearly, in the end, the road. Moreover, negotiations with the St Andrews group did proceed to the point of an option being executed, though the grant price started off at a nominal amount, subsequently increased for extension of time, though still at a relatively modest level. The second and third factors were to the effect that the development appraised in 1990 was only for a private club, and also that surrounding supplemental residual or commercial development would be necessary for viability (T, 80.20 and T, 92.30); yet there was no evidence that Campbelltown Council were likely to approve any such change to the DA to accommodate this. It is then said that the only available evidence on that subject was to the contrary from a Mr Curry, for the Defendant, who was an investment banker member of the syndicate. At T, 92.45 Mr Curry did say that "we were always given to understand I was given to understand that … Campbelltown Council, … were never going to allow residential subdivision in that area". But clearly enough that evidence proceeds on the basis that he had made no independent enquiry on the subject, and was merely stating hearsay. Moreover, while Camden Lakeside was approved (by a neighbouring council) with convention facilities, hotel rooms and equestrian facilities, it was not in fact developed with those facilities. That suggests at least those additional facilities were not necessary to secure a substantial price as a golf course site; but see later at paras 89-92. No positive evidence was led by the Defendant to suggest that the development would not be viable if those commercial or resident facilities were not available. 74 Nor was any evidence led by the Defendant that the Development approval would not have been extended to accommodate such development. The valuer Mr Large, for the Plaintiff, proceeded on the basis that the Development Approval relating to the subject property might be varied in the future to permit similar ancillary features as were approved for the Camden Lakeside site by its DA (T, 63.20). He gives no particular reason for that conclusion (Camden and Campbelltown were in fact different councils). He stated that when he made enquiries of Campbelltown Council from the town planner "he just said, we cannot comment. The only way we could comment is if an application were given to us" (T, 80.27 - .35). In the absence of such ancillary features, Mr Large did however express doubts about the viability of the site as a golf course (T, 80.25). 75 On the contention from the Defendant that investor interest was negligible, Mr Kijurina for the Plaintiff gave evidence that there was no point in getting investors until the road was removed (T, 169.10 - .15). I would accept that proposition. 76 I do not give much weight to the suggestion from the Defendant that Mr Henry had abandoned his marketing efforts. He continued, though in ill-health, to attempt to get the road off the title. The fact the 1990 Development Application lapsed is not significant, because it was not seriously disputed that a new Development Application for a golf course would have been approved. 77 Finally the Defendant contends that "if Mr Kijurina is right and the road was always going to be removed, then the [poor] investment performance of the project should really be assessed on the same basis, namely that the road was going to be removed". But that misconstrues the position. While Mr Kijurina may have so thought, (as it turns out in the long run correctly, but not till years later, namely this year), the truth of the matter is that it does not follow that investor interest was put off by the demerits of the proposed development, irrespective of the position regarding the road. The Plaintiff's evidence, which I accept, is that it was premature even to seek investor interest until the road was out of the way (see earlier). 78 Taking then all relevant factors into account, I could not conclude at either extreme, namely no discount or discount that was very heavy. I would accept that there were some factors favouring a modest discount. I would favour, by that "process of informed examination", a discount of 10%, despite the difficulty of that assessment, as sufficiently allowing for those contingencies that might have frustrated a sale for a golf course, though there were no road. An intervening cause preventing recovery of the cost of removing the road? 79 Following the Registrar General's "correction" of the Plaintiff's title a road was constructed by the Plaintiff's neighbours, the Morgans, on the excluded land. The Plaintiff contends that the act of the Registrar General in excising the land from the title and categorising it as a road was by its very nature an act highly likely to result in a road being physically constructed. Further, the Plaintiff claims that the construction of the road was a foreseeable consequence of the Registrar's amendment because the amendment itself was the result of a request from the Department of Land and Conservation on behalf of the Morgans for access by way of the Crown Road. On the other hand, the Defendant claims that by its action the Registrar General restored a crown road to the Register and that the existence of a crown road is not the equivalent to the creation of a formed road. Moreover, the Defendant contends that the fact that the construction of the road began as an actionable trespass by Mr Morgan and CALM means that the creation of the road was not a primary consequence of the Registrar General's action. On that basis the Defendant contends that those damages for removal of the road and reinstatement are not recoverable from the Torrens Assurance Fund because they are not occasioned by the deprivation or loss of the fee simple. 80 The Registrar-General's "correction" of the Register to exclude the Crown Road was in response to a letter from the Department of Conservation and Land Management. I quote the relevant terms of the letter of the 29 June 1992 below: "Your attention is drawn to the subject roads which are illustrated by pink colour on the attached diagram. Following recent enquiries from the owner of lot 4, DP 214954, requiring the roads for access, it was found that the subject roads have been included in the Register… Would you please now take action to exclude the roads from lands in the Register and advise this Department on completion of your action so that the owner of lot 4 in DP 21495 may be appropriately advised." (DX5 – annexure "M") 81 The terms of the letter from the Department of Conservation and Land Management indicate that it was seeking the relevant land to be excised from the Plaintiff's title for the purpose of access to the adjoining property. 82 However, Mr Morgan clearly committed an actionable trespass in December 1992 when he began work on construction of the road without CALM approval (Letter from CALM to Marsdens 9 March 1993, PX1A document 10). Indeed, although no submission was put that development consent was necessary for the construction of the road, contrary to the letter of the 5 May 1993 from the Campbelltown City Council to Marsdens (the Plaintiff's solicitors – PX1A – document [19]), in 1993 Part 3 of the Crown Lands Act 1989 provided that the Minister should cause to be instituted a programme for the assessment of Crown land. Pursuant to this assessment regulations 23(2) and (3) of the Crown Lands Regulation 1990 provided that the Minister should invite public representations on the draft assessment by way of notice in a locally circulating newspaper. Consistent with this process and Mr Morgan's application for a licence to carry out road works within the Crown Road, CALM sent a copy of the draft report, "Draft Land Assessment at Varroville", to the Plaintiff's solicitors on 16 June 1993 inviting submissions (PX1A document [20]). 83 Given the opportunity for public discussion about the use to which the subject Crown Land might be put under the Crown Lands legislation which in the ordinary course might have been expected to follow the Registrar General's "correction" of the Plaintiff's title, and given the opportunity for submissions that would ordinarily have been afforded the Plaintiff before any such construction began, I would view Mr Morgan's acts in earlier commencing to build the road as an intervening event, or cause, despite the fact that the Reserved Road was completed in early February 1994 after CALM approval. Indeed, the view that the physical creation of the road was not a necessary or probable consequence of the Registrar General's "correction" is strengthened by the Local Land Board's Interim Report in May 1996 to the Minister which indicated that "At some stage prior to the issue of the licence to construct the road a meeting between all parties should have been convened, or the matter referred to the Local Land Board, under section 22 of the Crown Lands Act 1989." (PX1A document 27 at page 4) Conclusion 84 On the basis that the creation of the road was a consequence of Mr Morgan's actions which were not foreseeable on the part of the Registrar General, given that the construction of any such physical road would require public consultation under legislation, I consider that the Plaintiff is unable to claim damages against the Defendant for the costs of removing the existing road and restoring the site. That construction represents an intervening cause. Question 4 Quantum of damages and valuations 85 On the basis of my earlier finding that on the balance of probabilities the Plaintiff suffered loss because it had a commercial opportunity to sell its property for development as a golf course, and lost that chance, it is necessary to determine damages by assessing the value to be gained from exploiting that opportunity, had it been pursued: Poseidon Ltd and Sellars v Adelaide Petroleum NL at 355. The fact that St Andrews took up an option to purchase the property for just such a development substantiates the existence of an available market to exploit the property as a golf course. My earlier finding of fact concluded that it was highly likely that such a development would have gone ahead, but for the road, with only a modest discount of 10% to take account of the relatively slight risk that it would not have been feasible to sell for a golf course. Accordingly, in undertaking the assessment of the damages incurred, it is necessary finally to consider the effect of the valuation evidence tendered by the parties. 86 The highest and best use of the land prior to the Reserved Road being placed on the title is said by the Plaintiff to be as a golf course. The Plaintiff claims that the highest and best use of the land after the affectation is as a single allotment bisected by a public road. In determining the value for the best use of the property after the amendment it is noted that the Registrar General does not now seek to advance a case that the best use of the Plaintiff's property would be achieved by way of subdivision. On that basis then the valuation issue is based solely on the determination of what was the value of the land "before" and "after" the amendment of the Register, without reference to subdivision possibilities. 87 On the valuation of the Plaintiff's expert valuer, Mr Large, who assessed the value of the property as a golf course as at 12 November 1992, the property was worth $22,000.00 per hectare. Multiplying this amount by 75 hectares resulted in the figure of one million six hundred and fifty thousand dollars ($1,650,000.00). Valuing the property as a single allotment which could not be used as a Golf Course Mr Large valued each hectare as being worth $12,000.00. Multiplying this amount by 75 hectares resulted in the figure of $900,000.00. Accordingly, he assessed the diminution in value of the property as being $750,000.00. 88 Mr Large prepared his report on an analysis of sales of golf courses or sites approved for golf courses. Of the seven sites, six were physically remote from the valuation site (T, 61.40) and were developed sites at the time of sale (T, 62.15). Despite the fact that the Plaintiff's property would have been undeveloped at the time of sale Mr Large did not carry out any analysis of the value of capital improvements on these sites so as to work back and calculate a land value for the unimproved land (T, 64a.10 - .20). 89 The one remaining comparable, the Camden Lakeside site, had a number of development approval advantages not possessed by the Plaintiff's property. These advantages were: hotel-style accommodation (T, 62.40); villas for sale (T62.45); a fully licensed club (T, 63.10); better road access (T, 63.30 - 64.0); and topographical advantages (T, 64.30 - 55). 90 Mr Large's assessment of the type of development which could be carried out on the Plaintiff's property was informed by a number of assumptions. First, he assumed that an 18 hole par 72 course could be physically and permissibly constructed on the property: T, 79.35. Second, he considered, realistically or not, that the development approval relating to the development of the property might be varied in the future to permit similar ancillary features as were available to Camden Lakeside: T, 63.20. In the absence of such ancillary features Mr Large expressed doubts about the viability of the site as a golf course: T, 80.25. The fact that such features had been approved in respect of Camden Lakeside is some assurance, though not a certain indication of the position in respect of the Plaintiff's property, given that this site was in the jurisdiction of a different council: Annexures to Mr Large's report 23 May 2000 (PX1). 91 However, contrary to the submission of the Defendant's Counsel that the lapse of time between the sale of Camden Lakeside in June 1990 and the date of valuation of the Plaintiff's property, November 1992, should be considered a very significant factor which discounts the Camden Lakeside price per hectare due to the fall in asset markets during that period, the Defendant's own valuer expressed the view that there had been a marginal increase in values between these dates (DX2 page 30). 92 In addition, the Defendant's submission that the fact that the Plaintiff's property would have been the third golf course site in the immediate vicinity to become available for development and must, as a matter of inevitable commercial commonsense, reduce in value is not compelling. Indeed, the mere fact that there were some other golf courses in the vicinity is not necessarily a depressing factor in respect of the value of the property. As the Plaintiff submitted, the fact that the area was becoming a golfing mecca might, on one view, increase the value of the property because the other golf courses could be thought to act as draw cards for players. On the basis that neither argument was supported by evidence I attribute no value, reduced or otherwise, to the property as a consequence of similar developments in the vicinity over this period. 93 Nevertheless, Mr Large's report presents no detailed analysis of how he arrived at his dollar per hectare rating for the valuation site of $22,000 on the basis of the comparables (particularly $28,429 per hectare for Camden Valley Way) that he used. 94 The precise way in which Mr Large assessed the "after" value of the property as a bisected single rural holding is also not disclosed in his report. He said in cross-examination that the $900,000.00 total for the property was "an opinion of value based upon sales within similar areas" and that there was no directly comparable sale: T, 76/77.5 - .15. He also indicated that he was of the view that the property was worth $900,000.00 as a single holding and that he had extrapolated from this sum, rather than using a rate per hectare as the basis for his methodology (the approach adopted by Mr Field): T, 118.48 - .55. In any event, whichever method is to be preferred Mr Large's report does not contain a table of comparable single rural holdings. 95 The Defendant commissioned a valuer in August 2000 who produced a written report (T, 13.35 - .44). However, no explanation was led as to why that report was not served or the valuer not called. The Defendant's solicitor made no reference to the commissioning of that report in his affidavit sworn 1 May 2001 which was prepared for the purposes of explaining the delay in obtaining Mr Field's report. 96 The Defendant's valuer, Mr Field, prepared his report on the basis of inspections of the property on 4 and 11 April which consisted of inspecting the property from St Andrews Road, walking along the Water Board easement and part of the access road to Lot 1 (T, 124.1 – T, 127/8.25). As Mr Field acknowledged, normally the procedure would be to physically inspect the property without restriction: T, 128.5. 97 Mr Field's first report valued the property as at 12 November 1992 at one million three hundred and fifty thousand dollars ($1,350,000.00). As a golf course Mr Field considered that the property might range in value from $1,350,000.00 - $1,500,00.00. As a single rural holding he valued it in the range of $1,150,000 - $1,215,000, and adopted a value of $1,200,000. These ranges were worked out by reference to the land sales contained in his first report (pages 26-30). 98 Of the land sales which Mr Field took into account in his assessment only the sale of Camden Lakeside is really comparable (page 29 Mr Field's Report DX2). As Mr Field observed in cross-examination the properties at Enderslie and Appin are only comparable on the basis that they constitute the sale of "substantial vacant land" (T, 139.57). In contrast to the Plaintiff's property, those two properties are planned for residential development and have different zoning: thus Lodges Road, Enderslie T, 138.55 – T, 139.15; and Appin Road, Appin T, 139.16 - .27. Similarly, the sale of Menangle Road, Menangle was of a much smaller area, has some flood affectation and was inferior (T, 141.40 - .45), and the sale of Spring Farm was a family transaction of a smaller property, located approximately 30 kilometres from the Plaintiff's property: T140.20-T141-25. Mr Field conceded that he could not find a single holding which could be considered precisely comparable to the Plaintiff's property, although he sought to use the seven sales to "paint a picture of market activity at that point in time": T, 141.53 – T, 142.5-10. 99 On the basis of Mr Field's report, the Camden Lakeside sale in 1990 was clearly the most comparable. Further Mr Field accepted both in his report (p31 of his report) and in his evidence (T, 134.7 - .10) that there had been a marginal increase in the value for Golf Courses during the period from 1990 - November 1992. Notwithstanding this he proceeded to discount the value of the Plaintiff's property by a factor of 37% as against the Camden Lakeside sale. 100 When Mr Field was cross-examined about the factors he took into account in determining the appropriate rate of discount, namely the location, access, land quality, size and time of sale he conceded that he had not attributed certain percentiles or certain dollar values to each component to make up the 37% discount. Nevertheless, he selected a figure at the bottom of the range of the value that he had attributed to the land as a golf course, being a range of $1,350,000.00 to $1,500,00.00 (p31 Report). 101 In his second report dated 3 March 2001 Mr Field assessed the value of the Property as a single lot after the imposition of the road at one million two hundred thousand dollars ($1,200,000). In that report he expressed the view that the effect of the imposition of the road might warrant a reduction in value of 10 - 15%. On this basis the range of value for the property was estimated to be $1,150,000 - $1,215,000. However, Mr Field adopted the value of $1,200,000, being a value towards the top of the range. This has the effect of reducing the significance of the imposition of the road and thus reducing the amount of the loss sustained. 102 Given that the valuation reports of the valuers for both the Plaintiff and Defendant reveal that there is really only one comparable sale of an undeveloped property as a golf course, being Camden Lakeside, and neither report identifies a comparable rural single-holding, one must rely instead upon impression of the professional opinion and knowledge of the valuers. In so doing I observe that it is clear that in assessing the value of the Plaintiff's property as a golf course, apart from its potential advantage of access to water, its sole comparator, Camden Lakeside, has a number of other advantages both by way of development potential and to a lesser extent in respect of road access and topography. 103 In that context, given that Mr Large's assessment of the price as a golf course was founded on a purportedly comparative value of $1,650,000.00, which is the equivalent of a value of $22,000 per hectare, and Mr Field's valuation would indicate a rate of $18,000 - $20,000 taking into account location, access, land quality, size and market timing I would consider that these factors have been taken into account sufficiently to justify adopting the highest value of the Defendant's range, being $20,000 per hectare. Accordingly, the resultant value of the Plaintiff's 75 hectares is $1,500,000 as a golf course site. 104 In respect of the "after-value", the fact that Mr Large's assessment of the price as a single bisected rural holding was founded on an "opinion of value" of $900,000, being the equivalent of $12,000 per hectare, for which he did not attempt to provide indicators of market activity, and Mr Field's valuation indicated by reference to relevant factors that the road would cause a reduction in value of 10-15%, providing a range of $1,150,000 - $1,215,000 I am prepared to accept a value for the Plaintiff's property as a single rural holding of $1,150,000 on the basis that the figure incorporates these reductions and is part of what was considered by the Defendant's valuer to be a reasonable range. 105 On that basis the diminution in value arising from the opening of the Crown road on the 12 November 1992 is a sum of $350,000.00, but to that a 10% discount should be applied. That reduces it to $315,000. Is the option material in determining the Plaintiff's damages? 106 The Defendant submitted that clause 29 of the option taken by St Andrews was an indication of the market price of the differential that the valuers were required to assess for the purposes of this case and that it was a most material matter for the valuers to take into account. In the light of my earlier determinations, I attribute little significance to the option as an indicator of real market value. Evidence suggests that both parties were privy to information about closing the Crown Road at the time of negotiation (DX11) and that the figure for the deal was considered to be "very high" (T, 169.33 - .37). Given that such evidence suggests that St Andrews had already factored the removal of the road into the price that they were prepared to pay, I consider that it is unjustified to view the figure of $200,000.00 referred to in the special condition to the option as reflecting a true market differential. Should the Plaintiff's damages be reduced because it did not seek an injunction? 107 The Defendant contends that the Plaintiff had a right to put an end to the interest of the Crown by taking the action which was ultimately taken. On that basis the Defendant claims that to a large degree the period of the pendency of the Crown's interest was in the hands of the Plaintiff who must have appreciated that unless action was taken damage would accrue. The Defendant contends that there was opportunity to take action in the form of an injunction as the Reserved Road was not substantially built until January 1994 (Affidavit of Ian Russell Henry dated 14 June 2000 Document 9, 27 and Henry T, 37.30 - 42.40). 108 In the light of evidence that Mr Henry, acting on behalf of the Plaintiff, made a complaint to Campbelltown City Council (p4 affidavit), caused his Solicitors, Marsdens, on 7 January 1993 to write to CALM (PX1A document 8) and also to the Minister (PX1A document 9), and made an application to close the Crown Road on 14 October 1993 (which was rejected by CALM on 20 December 1993) (PX1A documents 22 and 23) it could hardly be contended that the Plaintiff sought to stand by and wait for damage to accrue to the property. Although clearly the Plaintiff did not seek an injunction at any time prior to the completion of the road, pending its application to rectify the register, Mr Henry gave evidence that he was given legal advice from Marsdens (among others) that it was not thought to be the appropriate action to take at that time, and that it was preferable to press the Plaintiff's claims "through the system" (T, 40.50 - .51, T, 41.50 – T, 42.13). Accordingly, the Plaintiff "continued to pursue the matter politically and personally through lawyers" (T, 41.24 - .25). On the evidence I find that Mr Henry, acting on behalf of the Plaintiff undertook all reasonable avenues of agitation to prevent the road's construction (and later to facilitate its closure) that he believed were open to him at that time, and that he considered that "like any genuine, normal citizen, [he] had to follow legal advice given…or [act] prudently" (T, 42.45-6). I consider that his actions at the time were reasonable overall and not such as to deny him redress or have his damages reduced. OVERALL CONCLUSION 109 The Plaintiff, having first made out an action under s126 of the Real Property Act as a person deprived of an interest in land in consequence of an error in the Register and second, having discharged the onus of proving that it was deprived of the commercial opportunity to sell its property for development as a Golf Course by reason of the Registrar General's purported correction to the Register on 12 November 1992, is entitled to damages for this loss of opportunity, being a diminution in the value of the land assessed at $350,000.00, discounted by 10%. However, the Plaintiff's claim for damages to compensate it for the cost of removing the existing road and restoring the site must fail on the basis that the Morgans' initial construction of the road was in contravention of the processes for public participation provided for in the Crown Lands Act 1989 (and regulations), thereby constituting an intervening event in the chain of causation. ORDERS AND COSTS 110 I direct the parties to submit orders giving effect to this judgment within ten days. Prima facie costs should follow the event, but the parties may address me on costs if they wish. ********** Last Modified: 12/06/2001 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. 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