Albert House Ltd v Brisbane City Council [1968] HCA 46; (1968) 118 CLR 144 (2 August 1968)

HIGH COURT OF AUSTRALIA

ALBERT HOUSE LTD. v. BRISBANE CITY COUNCIL [1968] HCA 46; (1968) 118 CLR 144

Vendor and Purchaser

High Court of Australia

Kitto(1), Taylor(2) and Menzies(2) JJ.

CATCHWORDS

Vendor and Purchaser - Contract - Implied collateral agreement - Purchaser a local authority - Vendor's right to claim compensation for injurious affection under purchaser's Town Plan - Right given by legislation enacted during negotiations - Conveyance to purchaser completed - Vendor's subsequent claim for compensation - No term in written agreement relating to vendor's right to compensation - The City of Brisbane Town Planning Act of 1964 (Q.), ss. 13, 15, 16 (2), 23 (1). *

HEARING

Brisbane, 1968, May 29, 30;

Sydney, 1968, August 2. 2:8:1968

APPEAL from the Supreme Court of Queensland.

DECISION

August 2.

The following written judgments were delivered:-

KITTO J. This appeal is against a judgment of the Supreme Court of upon the hearing of a motion which by consent was treated as the trial of the action. (at p146)

2. On 4th April 1966 the parties contracted in writing for the sale by the appellant and the purchase by the respondent of a property in Brisbane, upon which was erected a building known as Albert House. The contract price was $530,000 of which $106,000 was paid as a deposit and the balance was made payable on 30th June 1966 "upon execution by the vendor of a transfer capable of registration and the relevant certificate of title being in order and free from all encumbrances". The contract was duly carried into (1806) AC 231, at p 238

execution, and then, some months later, on 29th March 1967, the appellant made a claim upon the respondent under ss. 13 and 15 of The City of Brisbane Town Planning Act of 1964 (Q.) for injurious affection of the appellant's former estate and interest in the property by a restriction of user by a "zoning" for civic purposes which had been imposed by the coming into operation under that Act of what is therein called the Town Plan for the City of Brisbane. The claim was for $120,000, being the difference between what the appellant alleged was the market value of the property immediately after the coming into operation of the zoning namely $530,000 and what the appellant alleged would have been the market value of its estate and interest if the zoning had not come into operation namely $650,000. (at p147)

3. The zoning took effect upon the publication of the Town Plan in the Queensland Government Gazette on 21st December 1965. The effect of the zoning in the case of the subject property was that after the date mentioned, called the appointed day, the property could not be lawfully used for any but "civic purposes" without the consent of the respondent, save that lawful uses of the building which were existing before the appointed day might be continued until the demolition or destruction of the building, or the occurrence of damage precluding the continuance of that use or the discontinuance of the user for six months. See Pt I, s. 1, definition of "existing user"; Pt II, s. 3 (1) (I) and Schedule; Pt III, s. 9. The expression "civic purposes" was not defined, but there is no dispute that it meant purposes peculiar to the respondent as the local government authority of the City of Brisbane. So the operation of the Plan upon the property was to deprive it of all value in the hands of any owner but the respondent, except such value as remained to it by reason of its availability for a limited period for the continuance of its existing uses. (at p147)

4. If there were nothing more than this in the case the appellant would be entitled to prosecute its claim for compensation for injurious affection (by the zoning) of the estate and interest which it had in the property in December 1965; for s. 13 of the Act provides that a person who has an estate or interest (in land) which is injuriously affected by the coming into operation of any provision of the Plan or by any prohibition or restriction imposed by or under the Plan may obtain compensation from the Council (the respondent), and s. 15 enables a claimant for compensation, if his claim be not decided satisfactorily to him by the respondent, to appeal to a Local Government Court constituted under the Act. (at p147)

5. The respondent, however, contends, and was successful in contending before the Supreme Court, that the appellant is disentitled from receiving any such compensation and ought to be restrained by injunction from prosecuting the claim. The contention has taken various forms, but in substance the ground of it is that from the terms and circumstances of the communications that passed between the representatives of the parties in the course of negotiations which led to the making of the contract of sale and purchase it should be inferred that the appellant tacitly promised the respondent, upon the making of the contract and in consideration of the respondent's entering into it, not to make any claim for compensation for the effect which the operation of the Plan had had upon the value of the property. (at p148)

6. The respondent's case is therefore one of an implied collateral contract of the kind upon which the Court made some general observations in Shepperd v. Ryde Corporation [1952] HCA 9; (1952) 85 CLR 1 . The question in that case was whether an assurance that certain land in a housing scheme should not be used otherwise than as a park should be inferred, as implied in or collateral to the contract, from the circumstances in which the contract had been made, including the antecedent communications between the contracting parties. Chief among these communications had been a plan of the housing scheme and a descriptive pamphlet, both supplied to the plaintiff as purchaser by the council of the corporation as vendor. The Court said:

"The reluctance of courts to hold that collateral warranties

or promises are given or made in consideration of the making

of a contract is traditional. But a chief reason for this is that

too often the collateral warranty put forward is one that you

would expect to find its place naturally in the principal contract.

In a case like the present it is, we think, otherwise. Doubtless

the main contract might have included a clause by which the

Council undertook not to depart from the housing scheme.

But it seems to be not unnatural that the parties should treat

the contract as devoted to the purchase of the lot which the

individual purchaser acquired, the existence and stability of

the project of which the transaction was an outcome being

presupposed as something antecedent upon which the purchaser

might implicitly rely. It is the common intention that he

would so rely upon it and on that basis proceed to contract

to buy the particular lot allocated to him. It is because of this

that the assurance which is embodied in the plan, when it is

read in the light of the pamphlet, obtains its effect as a collateral

promise"

(1952) 85 CLR, at p 13

. (at p148)

7. Similarly, in the case now before us the crucial question is whether, upon consideration of all the circumstances surrounding the making of the contract for the sale and purchase of the appellant's property, especially the common knowledge of the parties concerning the Plan, and the terms in which their representatives addressed one another at each stage of the negotiations, we should accept the conclusion that the contract of sale and purchase was made upon the basis of a mutual presupposition, intended to be binding upon the appellant, that the amount agreed upon as the purchase price would be paid and accepted as the equivalent of the value of the property assessed without regard to the depressive influence of the restrictions upon user imposed by the Plan. If that is the truth of the matter, the implication for which the respondent contends is made out, for in that case if someone had asked the parties, as they came to execute the contract, whether they intended that the appellant might be at liberty thereafter to assert a right to compensation for injurious affection of its estate and interest by the operation of the Plan they must necessarily have answered with one voice: "Of course not; that goes without saying." (at p149)

8. The history of the matter begins in November 1961 when a Plan, showing a proposed enlargment of King George Square, and showing the appellant's land as within the enlarged Square and as zoned for "civic purposes", was made public under the authority of s. 7 of The City of Brisbane (Town Plan) Act of 1959. This Plan had no legal force or effect at that time. Any effect that it may have had upon value would be a result of the proposal for resumption rather than a result of zoning, for the intention appearing from a proposal to zone land for "civic purposes" would seem to be to devote the land to those purposes in the hands of the Council. Not until approval of the Plan by the Governor in Council was gazetted under s. 4 of the 1964 Act, as it was on 21st December 1965, did a legal restriction upon user of the land result from the zoning. (at p149)

9. On 19th October 1962, nearly a year after the proposal in the Plan to absorb the property in the enlarged King George Square had become generally known by the publication of the Plan, the respondent's Town Clerk wrote to the appellant offering to negotiate for the acquisition of "property in your ownership", "the premises known as Albert House". The letter began by referring to "the City Plan" containing "provision for an enlarged King George Square", and it described the appellant's property as being "affected". This could only have been intended and understood at that time as meaning that the Plan showed the property as one of those which the Council proposed to acquire for the enlargement of the Square; and the whole tenor of the letter is that the topic upon which negotiations were being suggested was the purchase of the appellant's estate and interest as then existing. Interviews took place on 21st November 1962 and 5th December 1962 at which the appellant's agents sought a price "well in excess" of $600,000. (What they said was 300,000 pounds, but in this judgment I shall use the dollar equivalents for amounts that were expressed in pounds.) The Town Clerk made it clear that he regarded that figure as more than "a reasonable price for the premises". At the second of these interviews the appellant's agents furnished the Town Clerk with details of rentals and of expenditure, including the appellant's balance sheet, obviously in order to support the figure they were contending for; and the inference is inescapable that they were seeking a price which would fully compensate the appellant for the property considered as a rent-producing investment. Of course it could not be such an investment to any substantial extent once it became zoned for civic purposes, but it seems to me as plain as can be that both sides regarded the proposal to zone the land as irrelevant to their purpose, because only after acquisition of the land by the Council would anyone imagine that its availability for use was intended to be restricted to "civic purposes". (at p150)

10. Ten months went by without any reply from the Town Clerk, but when the appellant's agents ultimately stirred him into action he wrote them a letter dated 16th October 1963 stating that the Council "required" the land in order to complete the extension of King George Square and was prepared to negotiate for its acquisition at a reasonable price. The letter said that the Council considered there was "already ample evidence of sale prices of land adjacent to your premises to enable finality to be reached", and was prepared to negotiate further with a view to arriving at a price suitable to both parties "based on sales of comparable land in the vicinity". In a letter dated 29th October 1963 the appellant's agents agreed that there was ample evidence of sales to establish the value, and added that

"the principles and methods of determining value have been

well laid down and established and it should nto therefore be

difficult to arrive at a fair value after having had due regard

to all the factors affecting the issue";

but there was not a word to suggest that the proposed zoning was being regarded as one of those factors. The inference is that in fact it was not. (at p150)

11. After another five months' silence the Town Clerk invited further discussion. The appellant's agents told him on 17th March 1964 that they had two independent valuations of Albert House to support their claim for $700,000, and they produced details of rentals being obtained together with the annual report of the appellant's directors and its financial statement for the year ended 14th November 1963. The Town Clerk said that he had a valuation at an amount in the vicinity of $400,000, based on rental returns and replacement value less depreciation, and that he proposed to obtain another valuation from the Valuer-General. The fact that current rentals were treated by both sides as the basis of valuation shows clearly enough that the offer and counter-offer were made, and understood to be made, on the footing that no restriction of the letting potential of the building by any zoning for "civic purposes" was being allowed for by either set of independent valuers. (at p151)

12. Negotiations broke out again seven months later. On 2nd October 1964 a conference took place between the Town Clerk and the appellant's agents. The former said that the Valuer-General had given a valuation of $450,000, and he insisted that the Council could not go above that figure. The agents came down to $660,000 (and perhaps to $630,000) but would not agree to any less. The discussion was therefore abortive, but there was one feature of it that has significance for present purposes. The Town Clerk suggested that perhaps the better method would be for the Council to resume the land and let the Land Court determine "the valuation". The agents were not agreeable to this, fearing that the costs of compensation proceedings might be heavy. Plainly both parties were talking about proceedings in which the appellant would get compensation for the land in its existing legal situation. (at p151)

13. Letters passed fruitlessly between the parties in the next few months, and on 15th February 1965 the appellant informed the Town Clerk that in the circumstances the appellant considered itself free to offer leases to prospective tenants and proposed to do so. The council, having previously asked that leases should be restricted to the period to 31st December 1964, replied that should any long-term leases be entered into the Council would have no alternative but to resume the premises. This burst of energy seems to have left both parties exhausted for the rest of the year; or perhaps both saw value in sollers inertia. (at p151)

14. The gazettal of the Governor's approval of the Plan was not held up by the pendency of the negotiations. It took place, as I have said, on 21st December 1965, so that the odd result was produced that land still privately owned was zoned for purposes which only a civic body could pursue. Not unnaturally, when the negotiations were resumed neither side treated the event as having any significance for the matter in hand. They ignored the change it had made in the legal situation and took up their negotiations at the point that had been reached, continuing to describe the subject matter of their dealing by the expressions they had used before: "Albert House", "the property", "this land", "the land and building known as Albert House", "the subject premises". If one asks why they ignored the change the answer seems obvious: because they had been discussing the appellant's estate and interest as it had theretofore stood, and they were continuing the same discussion. A conference took place on 9th February 1966 at which $575,000, half-way between the appellant's original $700,000 and the Town Clerk's $450,000, was suggested (apparently by the Town Clerk himself) as a compromise figure, and they agreed to submit this to their respective principals. I can see no room for doubt that the appellant's agents intended the Town Clerk to understand them, as they must have understood him, to be still dealing with the question of the amount the Council should pay for the fee simple as it stood when the negotiations began. The zoning, being in its nature related to the use of the property by the Council, was in no one's mind as a relevant matter. (at p152)

15. The proposal for compromise came to nothing, for the Town Clerk wrote to the appellant's agents on 18th February 1966 to say that the Council was unable to make any offer in excess of $530,000; and he added: "The amount payable is for an unencumbered title in fee simple." This expression is, of course, not inconsistent with there being left outstanding a claim for compensation for injurious affection, but if the appellant's agents had had any idea that compensation might be claimed over and above any purchase price that might be agreed upon one would have thought that the Town Clerk's statement would have sufficed to bring the idea out into the open. In fact it produced no reaction at all, and the fair inference seems to me to be that this was because the idea did not exist. The agents replied on 25th February 1966 requesting that the matter be resubmitted to the Council, saying that they were still strongly of opinion that "the true value of the property" was considerably in excess of $575,000. If the response had been a simple assent by the Council to the price of $575,000 it would surely have been unarguable that this was what the appellant had offered to accept "as the true value" in the sense in which the parties had been speaking of "value" all along, that is to say as unaffected by the zoning for the Council's civic purposes. The Town Clerk, however, replied on 4th March 1966 saying that the offer of $530,000 was as high as the Council was prepared to make and that unless it were acceptable he suggested that "the matter" be settled by the Land Appeal Court "consequent to resumption of the property". When this letter is read as a whole, containing as it does no fewer than five references to "the matter", in a context in which the expression means the acquisition of the fee simple of the Albert House property, it seems to me that the rcipients could not possibly have understood that the offer was made on any footing that would leave the appellant with an outstanding claim for compensation for injurious affection. "The valuers", the letter said, "were not prepared to alter the valuations made by them." Valuations of what? Plainly not the property as affected by zoning, for their former valuations had been made before the zoning came into force. (at p153)

16. Within a week, on 10th March 1966, the appellant agreed to the figure thus put forward by the Council. In a letter of 10th March 1966 the appellant's agents said:

"Whereas the directors consider that your offer of $530,000

is still quite inadequate and contrary to the undertaking and

agreement reached at our interview with you on 9th February

(despite your denial) we are instructed to inform you that

they have decided with reluctance to accept the offer made."

What could this possibly be taken to mean other than that the directors considered the offer "still quite inadequate" for what the negotiations had been about from the beginning, namely the property with the extent of its lawful uses unimpaired by any zoning, and that the council's offer was "contrary to the undertaking and agreement" said to have been made on 9th February, when the discussion had been about the same subject matter. The letter enclosed a contract of sale which it described as "embodying the terms of the offer"; and I must say that I do not believe any reasonable person in the position of the agents could have thought that the terms of the offer had been put forward by the Council on the footing that a large element in the former value of the property had been converted into a claim for compensation which the appellant should be at liberty to prosecute as a separate matter. (at p153)

17. We have been solemnly invited to regard it as possible that the appellant did not in fact intend to give up its right to proceed for compensation, and that on the contrary its reason for coming down from the compromise figure of $575,000 (or perhaps from the figure that had last been mentioned before zoning, namely $630,000) was that it knew that zoning had left it with less value to part with and had given it a claim for compensation instead. One may be charitable enough to think it possible that some of the directors may have had that idea; but certainly not the agents, nor any director who knew the course that the negotiations had followed. The oral discussions and the correspondence had conformed to a constant pattern which treated the proper purchase price as being one which would allow fully for the value of the land before zoning. I am not concerned to condemn as dishonest the conduct of the appellant or any of its directors and agents in being parties to the accepting of the Council's offer for "the unencumbered title in fee simple" and then, after the agreed sum had been received, springing the surprise of a claim for compensation; but I am concerned to say, as I believe, that ordinary sensible business men in the position of those who acted for the appellant in the matter would inevitably have understood that the $530,000 was offered by the Council for that which had been the subject of the negotiations from 1962 onwards, and not only for that which the coming into force of the zoning while the negotiations were in progress had left remaining of the appellant's former estate and interest. (at p154)

18. If this be so, the conclusion seems to me to be inevitable that whatever may have been the communings of the appellant's directors and agents among themselves the making of the contract of sale and purchase was entirely inconsistent with the continuance of a right in the appellant to recover compensation for the difference in value between the subject of the negotiations and the remnant left by the zoning. The implication of a collateral promise by the appellant not to prosecute any such claim seems to me to be necessary in the strict legal sense of the word. (at p154)

19. In my opinion the declaration and injunction that are appealed against were rightly granted, and the appeal should be dismissed. (at p154)

TAYLOR AND MENZIES JJ. This is an appeal from a judgment of the Supreme Court of Queensland restraining the appellant from taking any further steps in relation to a proceeding in the Local Government Court to obtain compensation from the respondent for injurious affection in relation to a property known as Albert House by reason of the coming into operation on 21st December 1965 of the Town Plan of the City of Brisbane. A declaration that the appellant was not entitled to such compensation was also made. (at p154)

2. The appellant was at all times material the owner of the Albert House property. In November 1961 the Town Plan of the City of Brisbane became open for inspection. This Plan showed that the Albert House property would form part of a proposed Civic Square and that if the Plan as proposed were to be adopted, the property would be zoned "Special Uses 'A' - Civic Purposes". On 21st December 1965 the Town Plan came into operation and the Albert House property was zoned "Special Uses 'A' - Civic Purposes". The effect of this zoning was that the property could no longer be used for any purpose other than "Civic Purposes" except with the consent of the Council. (at p155)

3. In October 1962 - that is nearly twelve months after the Plan itself had been placed on public display - the Brisbane City Council commenced negotiations with the appellant for the purchase of the Albert House property. These negotiations continued up to 4th April 1966 when a contract of sale was made between the appellant and the Council for the sale of the property for $530,000. This contract was completed on 30th June 1966. (at p155)

4. On 23rd March 1967 the appellant made a claim against the Council for $120,000 compensation for injurious affection of the Albert House property by reason of the restrictions of user imposed by the zoning aforesaid. This claim was made up as follows:

"The difference between the market value of the estate

or interest of the company in the said land immediately after

the time of the coming into operation of the zoning Five

Hundred and Thirty Thousand Dollars ($530,000.00) and

what would have been the market value of the estate or interest

of the company if such zoning had not come into operation

Six Hundred and Fifty Thousand Dollars ($650,000.00)."

The claim was not conceded and the appellant in due course appealed to the Local Government Court pursuant to s. 15 of The City of Brisbane Town Planning Act of 1964. The Council thereupon commenced an action in the Supreme Court to restrain such proceedings. This action was disposed of in favour of the Council upon a motion for a declaration and injunction. (at p155)

5. The right to obtain compensation for the injurious affection by reason of any prohibition or restriction imposed by or under the Plan in respect of lands zoned "Special Uses 'A'" does not arise under s. 13 (2) of The City of Brisbane Town Planning Act until

"(a) the land is first sold after the Plan comes into force; or

(b) the owner, having offered the land for sale in good faith

and having taken reasonable steps to obtain a fair and

reasonable price for the land, has been unable to sell

the land; or

(c) the Council or its delegates refuses an application made

under the Plan for permission to use the land or erect

a building or other structure thereon for a purpose which

is permissible under the Plan." (at p155)

6. The appellant having sold the Albert House property to the Council claimed compensation on the footing that the sale which it had made fell within (a) above. Towards the end of his reasons for the judgment now under appeal and when he had already decided against the appellant on other grounds, the learned trial judge said:

"Although it was not argued before me, I am of the opinion

that in the light of ss. 16 (2) and 23 (1), s. 13 (2) does not

envisage a claim for injurious affection being based upon the

sale, or the offering for sale, of land to the Council."

This observation was not supported by the respondent before us and it is sufficient to say that we do not share the view expressed by his Honour. It is desirable, however, to refer to s. 16 (2) and s. 23 (1) for other purposes. So far as relevant they are as follows:

"16 (2) Where compensation for injurious affection is

claimed under this Act the Council may at its option take the

land under 'The City of Brisbane Improvement Acts, 1916 to

1953', instead of paying such compensation . . . ."

"23 (1) In addition to its powers under 'The City of Brisbane

Improvement Acts, 1916 to 1953', the Council may purchase

or, with the prior approval of the Governor in Council, take

under that Act any land in the City which is required for any

purpose of the Plan, whether such land is so required

immediately or not, and for that purpose shall have all the

powers and authorities conferred on it and be subject to all

the duties imposed on it by that Act." (at p156)

7. The learned trial judge based the declaration made and the injunction granted upon three grounds which he considered separately. In the first place, he rested his decision upon the principle "of estoppel or quasi estoppel", viz. that the appellant should not be permitted to depart from the assumption upon which it was found that the Council had acted, i.e.,

"that the sale of the Albert House land was a sale of all the

defendant's rights and interest therein including any right it

may have had to claim from the Council compensation, by

way of injurious affection or otherwise, in addition to the

consideration on sale".

Secondly, his Honour said:

"the defendant impliedly promised the Council that it would

not, after the sale to the Council, make a claim for

compensation

for injurious affection pursuant to The Town Plan Act,

that this implied promise was intended to create legal relations

and was one which, to the defendant's knowledge, was intended

to be acted upon by the Council. The Council did act upon

the faith of such promise and thereby suffered a detriment.

I am of the opinion that this implied promise gives rise to an

estoppel so that the defendant should not be allowed to act

in a way inconsistent with such promise."

Finally, his Honour said:

"In my opinion the facts justify a finding, which I make,

that the defendant in the months of February, March and

April, 1966, agreed with the Council that it would waive any

rights it may have to claim compensation for injurious affection

pursuant to The Town Plan Act. This waiver was supported

by consideration in that, in reliance upon it, the Council agreed

to purchase the property for a certain figure, executed the

contract of sale, paid over the sum of $530,000 and demolished

the building known as Albert House. The waiver was not

stated in express terms but was part of the general implied

(by words and conduct) statement of intention by the

defendant

that the sale of the freehold title to the land would be

the end of all matters in dispute between the parties and would

amount to a transfer of all the defendant's rights over and in

respect of the land." (at p157)

8. Before this Court it was common ground that whatever mode of expression might be adopted the critical question was whether the appellant, in consideration of the making of the agreement of sale, had impliedly promised or undertook that it would not claim compensation for injurious affection for any prohibition or restriction imposed by or under the Plan in respect of the property by reason of the fact that it had been zoned "Special Uses 'A'". (at p157)

9. The respondent's case for such a promise or undertaking depended upon a course of negotiations from October 1962 until April 1966 which it is necessary to outline. (at p157)

10. The price first asked by the appellant through R. W. and J. W. Cameron was 350,000 pounds. This was stated to have been based upon two valuations. The Council, it seems, obtained an independent valuation based upon rental returns and replacement costs less depreciation of about 200,000 pounds. The Council also obtained a valuation from the Valuer-General of 225,000 pounds. Preliminary negotiations showed that the parties were so far apart that the Town Clerk of the Council suggested the resumption of the land and the fixing of compensation by the Land Court. To this suggestion the appellant, through the Camerons, demurred. In October 1964 the Council offered 225,000 pounds and the appellant countered with an offer to take 350,000 pounds. Nothing eventuated and negotiations were taken up again after the Town Plan came into force. The appellant then asked 315,000 pounds but it was indicated by J. W. Cameron that 300,000 pounds would be acceptable. The Town Clerk again suggested the resumption of the land and put forward a figure of 287,500 pounds, being midway between the 225,000 pounds originally proposed by the Council and 350,000 pounds originally asked for by the appellant. By letter of 18th February 1966, the Council offered $530,000 for "an unencumbered title in fee simple". It was stated as a condition of this offer

"that immediately on acceptance you will give notices to

quit to all tenants save those. . .and that you will use your

best endeavours to have these areas vacant on 30th June

next". . .

There was no reference to any other condition. In reply, the Camerons stated

"we are still strongly of opinion that the true value of

the property is considerably in excess of 287,500 pounds".

The Town Clerk replied saying:

"The valuers were not prepared to alter the valuations

made by them but the Council, with a view to obtaining

finality in this matter, agreed to make the offer of $530,000.

As stated, the matter was considered again yesterday by

the Council when I was directed to advise you that the offer

is as high as the Council is prepared to make and, unless it is

acceptable to you, I am to suggest that the matter be settled

by the Land Appeal Court consequent to resumption of the

property."

The Council's offer of $530,000 was then accepted by the appellant. (at p158)

11. This course of negotiation does not ex facie require any implication that the appellant was promising or undertaking not to make any claim for compensation for injurious affection if the Council bought the property for $530,000. (at p158)

12. It was, however, argued for the respondent that, because the valuations upon which the parties had relied in the course of negotiations were valuations made before 21st December 1965, the appellant could not be entitled to recover compensation for what it did not possess at the time when the valuations were made. Furthermore, it was argued for the respondent that the purchase price of $530,000 had to be equated with the compensation that would have been payable upon resumption if compensation were to have been fixed by the Land Court for land taken under s. 16 (2) or s. 23 (1) of The City of Brisbane Town Planning Act. In fixing this compensation, so the submission continued, the Court would have to pay regard to the fact that the resumption would prevent the owner of land zoned "Special Uses 'A'" from becoming entitled to compensation for injurious affection by selling the land or offering it for sale so as to bring itself within s. 13 (2) (a) or (b) of The City of Brisbane Town Planning Act. By this course of reasoning it was sought to arrive at the conclusion that the $530,000 offered must cover everything that the respondent could receive in respect of the land together with compensation for injurious affection. It is not necessary to come to any final conclusion whether the argument of counsel for the respondent that compensation under The Land Act would cover the effect of acquisition upon an owner's rights under s. 13 (2) is correct, for there is nothing whatever in the record of negotiations to show that there was intended an exact correspondence between the amounts to be received by the appellant whether its property were to be resumed or were to be sold. It is, of course, quite clear that the appellant wanted to sell its land in preference to having its land resumed, presumably because it thought that the former would be more to its advantage than the latter, but it never became apparent just wherein that advantage was thought to lie. To imply a promise not to claim compensation for injurious affection by imputing to the appellant (1) an understanding that, in the event of the resumption of its land, it would be compensated for its lost opportunity to obtain compensation for injurious affection - a matter of law by no means clear, particularly having regard to s. 17 of The City of Brisbane Town Planning Act and to the alternative given to the council by s. 16 (2) of that Act in cases where it had not itself proposed to resume land instead of paying compensation for injurious affection - and (2) an intention to take the price of $530,000 in satisfaction of all that could be covered by compensation under s. 18 of The City of Brisbane Improvement Acts, 1916 to 1953, is not, we think, a justifiable course. It would be going too far to imply a promise to give up any claim for compensation for injurious affection upon such problematical foundations. (at p159)

13. Accordingly we think the learned trial judge was in error in declaring that the appellant was not entitled to payment of compensation for injurious affection in respect of the zoning of the Albert House property and in restraining the appellant from prosecuting its appeal in the Local Government Court in respect of its claim for such injurious affection. (at p159)

14. The appeal should therefore be allowed. (at p159)

ORDER

Appeal allowed with costs. Judgment of the Supreme Court of Queensland in favour of the plaintiff set aside. In lieu thereof order that judgment in the action be entered for the defendant with costs.

Solicitors for the appellant, Thynne & Macartney.

Solicitors for the respondent, S. E. Gatfield, City Solicitor.

M. G. M.