GREEN & MCCAHILL HOLDINGS LIMITED V AUCKLAND COUNCIL (AS SUCCESSOR TO RODNEY DISTRICT COUNCIL) HC AK CIV 2011-404-007233

GREEN & MCCAHILL HOLDINGS LIMITED V AUCKLAND COUNCIL (AS SUCCESSOR TO RODNEY DISTRICT COUNCIL) HC AK CIV 2011-404-007233 [26 March 2013]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2011-404-007233CIV 2012-404-005249[2013] NZHC 507IN THE MATTER OF appeals pursuant to the Land ValuationProceedings Act 1946BETWEEN GREEN & MCCAHILL HOLDINGSLIMITEDAppellantAND AUCKLAND COUNCIL (ASSUCCESSOR TO RODNEY DISTRICTCOUNCIL)RespondentHearing: 27 & 28 February 2013Counsel: A R Galbraith QC and J Collinge for the AppellantR B Lange for the RespondentJudgment: 26 March 2013[RESERVED] JUDGMENT OF WYLIE J andMR G J HORSLEYThis judgment was delivered by Justice Wylie and Mr G J Horsleyon 26 March 2013 at 3.00 pmPursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Distribution: A Galbraith QC: argalbraith@shortlandchambers.co.nzR Lange: richard.lange@simpsongrierson.comINDEXParagraphIntroduction ............................................................................................................ [1]Factual Background ............................................................................................... [3]The Land ...................................................................................................... [3]The Acquisition/Taking................................................................................. [8]The Compensation Application .................................................................. [13]The Tribunal's 2006 Decision .................................................................... [19]Amended Compensation Application by GMH .......................................... [23]The Tribunal's 2011 Decision .................................................................... [24]The Costs Judgment ................................................................................... [31]Penlink ....................................................................................................... [32]The Notice of Appeal ........................................................................................... [33]Nature of Appeal .................................................................................................. [35]The Submissions .................................................................................................. [39]Analysis ................................................................................................................ [45]Issue Estoppel ............................................................................................ [46]Compensation under s 62 of the Public Works Act .................................... [52]The Exceptions — Section 62(1)(b)(i) and (ii) ........................................... [63]What state of affairs is assumed in the after valuation? ............................ [67]Betterment .................................................................................................. [75]Summary in relation to applicable valuation principles ............................ [85]The Valuers................................................................................................. [87](i) Mr Roberts ..................................................................................... [88](ii) Mr Gamby...................................................................................... [92](iii) Mr Dean ........................................................................................ [93](iv) Mr Smithies .................................................................................... [94]Summary in relation to approaches of valuers .......................................... [95]Remedy ................................................................................................................ [98]The Costs Decision ............................................................................................ [100]Conclusion.......................................................................................................... [102]Costs of this appeal ............................................................................................ [104]Introduction[1] Green & McCahill Holdings Limited ("GMH") appeals two decisions of theLand Valuation Tribunal:a) In the first decision dated 19 October 2011,1 the Tribunal held that no compensation is payable to GMH for the compulsory acquisition of 33.3522 hectares of its land, because there is betterment to the balance of GMH's land that exceeds the value of the land taken.b) In the second decision dated 22 August 2012,2 the Tribunal awarded costs and disbursements of $180,046.42 to the respondent, Auckland Council, as successor to the Rodney District Council, ("the Council").[2] The appeals raise issues as to the appropriate valuation principles to be applied when assessing compensation under s 62(1)(b)(ii) and (e) of the Public Works Act 1981. In particular, they ask what factual state of affairs is to be assumed in assessing the compensation (if any) payable to a claimant.Factual BackgroundThe Land[3] GMH is the owner of a large area of coastal land situated between the Weiti River and Okura River Estuary, immediately to the south of the Whangaparaoa Peninsula. Much of the land is comprised in certificate of title 80D/150. Prior to the taking of part of that land by the Council, the title comprised a total of 888.3613 hectares.1 Green & McCahill Holdings Ltd v Rodney District Council [2011] NZLVT 1, LVP 012/04, 19October 2011, Judge J P Gittos and Mr K G Stevenson.2 Green & McCahill Holdings Ltd v Rodney District Council [2012] NZLVT 3, LVP 012/04, 22August 2012, Judge J P Gittos and Mr K G Stevenson.[4] GMH also owns two adjoining blocks of land, but they are not relevant for present purposes.[5] GMH's land is variable in its contour and development potential. Parts of theland have a direct coastal aspect. These parts comprise areas of relatively flat land adjacent to Karepiro Bay. To the south and west, the land rises in a series of ridges and valleys which, while steep, afford extensive sea views. Further back from the coast, and in particular in the north-western corner of the property, the land is much more rugged. This area includes parts of the catchments of the Weiti and Okura Rivers and the Karepiro Stream. This part of the land is riven by a number of deep valleys, and it contains areas of geologically unstable soil known as Onerahi Chaos.[6] Much of the land is planted in a commercial pine forest known as the Weiti Forest, although there are some smaller areas of exotic and native vegetation. The forest land is subject to a forestry right entered into in March 1990 in favour of Elders Resources NZFP Limited. The right is for a term of 27 years over the majority of the property, and for a term of 35 years over a small area of some 20 hectares.[7] Prior to the taking, the land was not landlocked. The title included a narrow tongue of land going across adjoining land which could be used for access to and from State Highway 1a. There was, however, no formed road on this tongue of land.The Acquisition/Taking[8] On 7 March 2002, the Council gave notice of its intention to take part ofGMH's land comprising 31.8997 hectares for roading purposes under the relevant provisions contained in the Public Works Act. It intended to build a road to be known as "Penlink" over the land and adjoining land to link roading on the Whangaparaoa Peninsula with the Northern Motorway.[9] On 10 September 2003, the Council acquired the 31.8997 hectares of GMH'sland by proclamation and, on 2 October 2003, it vested in the Council.[10] On 9 September 2003, the Council issued a further notice of intention under the Act to take an additional 1.4529 hectares of land, also for the Penlink project. The Council acquired this land pursuant to an agreement to acquire dated 28 October 2003.[11] The total area of land taken or acquired from GMH by the Council for the Penlink project is 33.3526 hectares. The land taken or acquired runs from the north-western corner of GMH's land, and along part of the land's western boundary.[12] The effect of the taking and acquisition of the land for the Penlink project was to sever from the balance of GMH's land in title 80D/150, two areas of land totalling 14.1721 hectares. Those areas of land are referred to as the "severance areas". GMH also lost most of the tongue of land which gave the balance of its land access to State Highway 1a.The Compensation Application[13] The parties were unable to reach agreement in relation to compensation, and on 14 June 2004, GMH made application to the Tribunal under s 77 of the Act. It sought:(a) $3 million compensation for the land taken;(b) $396,000 for injurious affection to the balance of its land; and(c) $143,500 for injurious affection to the severance areas.[14] The parties accepted that for the purpose of assessing compensation, October 2003 should be regarded as the specified date in terms of s 62(2) of the Act.[15] As at October 2003, the land was zoned by the Council in both its Operative District Plan and its then Proposed District Plan as "Special 8". TheSpecial 8 zone was a spot zone which applied solely to the land in certificate of title 80D/150. It had been in place since 1986, and it permitted subdivision anddevelopment of part of the GMH land up to a maximum of 150 residential sites within a specified area on the coastal fringes. No development was permitted in the vicinity of the proposed Penlink route.[16] Immediately to the west of the GMH land is another block of land known as Weiti Station. It has been referred to as "the Green Group land". On the south- western boundary, there is an area of land known as "the Huron land". In October 2003, both of these properties were zoned as countryside living zones. This zoning had been developed in the mid-late 1990s, and it had been incorporated into theCouncil's Proposed District Plan. It permitted residential development in clusters,with the proviso that the overall density was not to be less than one lot per 1.5 hectares of land. The density of development permitted under the countryside living zone was much more intense than that permitted in the Special 8 zone.[17] GMH considered that its land also had potential for development as a countryside living zone. The Council disagreed. It considered that there were significant physical differences between the GMH land and the Green Group/Huron properties.[18] At the parties' request, the Tribunal dealt with the compensation claim in two separate hearings, the first held in late 2005 and the second in early 2011. We deal with each in turn.The Tribunal's 2006 Decision[19] This initial hearing was to determine the highest and best use of GMH's land, and it was limited to the planning and hypothetical subdivision assumptions applicable to determine compensation. The hearing was necessary because, as we have noted, the parties had been unable to agree on the potential rezoning of GMH'sland that could have been reasonably contemplated as at October 2003 for thepurpose of determining the land's value.[20] The Tribunal heard from a number of experts and, in a decision issued on 25 January 2006,3 it observed as follows:(a) that s 62(1)(b)(ii) of the Act applied to the assessment of the appropriate compensation because the acquired land could not besubdivided from the rest of GMH's land and it did not constitute amarketable piece of land in its own right; and(b) that compensation and injurious affection should be assessed by determining the market value of the whole of GMH's land anddeducting from that value the market value of the land after the taking and acquisition — the "before" and "after" approach to theassessment of compensation. It stated that, in the after situation, the Penlink project had to be regarded as being in existence.4[21] The Tribunal found that the highest and best use of GMH's land affected by Penlink was for limited residential development. It adopted "before" and "after"prospective subdivision plans prepared by a Mr Wood for the Council, and concluded that the acquisition and taking caused the loss of a maximum of four lots, but the addition of a further seven lots in the severance areas.[22] There was no appeal by either party against the 2006 decision.Amended Compensation Application by GMH[23] On 30 April 2010, GMH filed an amended application for compensation. It abandoned its claim for injurious affection and substantially reduced its claim for the loss of the land. It sought $1,250,000 for the loss of its land, together with interest at the rate of 7.5 percent from October 2003 to the date of payment.3 Green & McCahill Holdings Ltd v Rodney District Council [2006] NZLVT 20, LVP 012/04, 25January 2006, Judge J D Hole.4 At [15].The Tribunal's 2011 Decision[24] The second hearing was to determine the quantum of compensation. It washeld in March/April 2011, and the Tribunal's decision issued on 19 October 2011.5[25] The Tribunal started by noting that the effect of the Council taking land for the Penlink development had been:(a) to reduce the overall area of GMH's land by 33.3522 hectares;(b) to sever from the north-western side of the main body of GMH's landtwo smaller parcels, the severance areas, totalling 14.1721 hectares; and(c) to provide enhanced road access to the greater part of GMH's land.It also noted that the Council had provided for road access to the severance areas by acquiring part of the Green Group land, which would give road access to the severance areas when the Green Group's plans for subdivision of its land were realised. It acknowledged that insofar as the severance areas were concerned,GMH's opportunity of further development depended upon the timing of any development of the Green Group land.[26] The Tribunal went on to refer to its 2006 decision. It recorded that the 2011 hearing represented a continuation of the process begun before the Tribunal at the earlier hearing, and observed that its 2011 decision was to be read together with its 2006 decision. It considered that the determinations made by the Tribunal in 2006 were binding on it, insofar as they affected its approach to the hearing before it, and its decisions upon the issues remaining to be determined. The Tribunal then expressed the following views:6 it was made plain to the parties that the scope of the valuation argument to be presented at this further hearing must necessarily be founded upon the5 See, above, n 1.6 Green & McCahill Holdings Ltd v Rodney District Council, supra n 1, at [10]–[12].Wood plans. Counsel for the respondent correctly submits that the effect of the Tribunal's earlier decision requires that an appraisal on a before and after basis be made in terms of s 62(1)(b) of the Public Works Act 1981. Any method of valuation could be considered, but it is plain that the essential issues raised by the earlier decision for determination at this present hearing, i.e. measurement of betterment as against the value of the land taken and the value of injurious affection to the remainder can only be coherently approached by adoption of before and after methodology.It is further perfectly clear as a matter of principle that in embarking upon the valuation exercise presented at this hearing we cannot properly have regard to hindsight, nor to the speculative views offered by several witnesses as to whether and when the Penlink road will be constructed. That as a matter of principle is made quite clear in the Tribunal's earlier decision at paragraph [15]:It will be apparent that when applying s 62(1)(b)(2) a hypothetical situation is envisaged. In translating that concept to the instant case, when considering the before situation the existence or prospect of the Penlink project must be ignored. In the after situation the Penlink project must be regarded as being in existence. Further the concept envisages both a hypothetical seller and a hypothetical buyerThe judgment goes on to cite further authorities for this principle. To the extent therefore that the applicant now seeks to rely upon a rezoning of the land in 2010, or upon uncertainty surrounding the date of construction of Penlink, such reliance is misconceived[27] The Tribunal had received a joint memorandum from the valuers retained by the parties which, inter alia, raised for consideration:(a) whether or not the before and after approach should be followed; and(b) the appropriate valuation methodology to be followed.The Tribunal took the view these two questions had been substantially dealt with in its previous decision.[28] The Tribunal stated as follows:7While no doubt the betterment occasioned to the applicant's land by construction of Penlink will only be physically realised when the construction is completed, it is wrong in principle to conclude from that that betterment, and injurious affection, arising from the public work cannot or should not be assessed at the date of taking. As counsel for the respondent7 Ibid, at [16]–[17].points out there are numerous instances where compensation taking into account both betterment and injurious affection has been assessed and paid well before the public works for which the land was taken has been completed, or even in many cases commencedInsofar as the applicant bases its valuation methodology upon these precepts it is in our view not only wrong as a matter of law, but ignores the clear directions of this Tribunal's earlier decision. The valuation evidence presented by the objectors on a limited basis of comparable sales evidence to support desired block values is in our view selective and unconvincing when compared to the more comprehensive evidence presented by the respondent, and moreover leaves the appellant's valuers poorly placed when it comes to comment upon the evidence as to betterment offered by the Council's witnesses.[29] The Tribunal considered the various valuations in evidence before it. It very much preferred the evidence of one valuer, a Mr Roberts, called by the Council. It also accepted the evidence of Council witnesses that:(a) There would be betterment to GMH arising from the Penlink project. In particular, the balance of GMH's land would acquire road access, thus relieving GMH from the costs of forming 2.1 kilometres of road to access a subdivision on the site from its own resources; and(b) The Penlink project would provide a further seven rural residential sites within the severance areas, which otherwise would not have been available to GMH.[30] The Tribunal considered that whatever method of valuation was adopted, it had to be based upon the Wood plans, and done using a "before" and "after"approach in order to properly take into account potential betterment and injurious affection arising from the Penlink project. The Tribunal did not consider it necessaryor desirable to attempt what it called the "somewhat academic exercise" of seekingto establish a definitive value in dollar terms, because it found on the evidence overall that it was "abundantly plain that the betterment to [GMH's] land occasioned by the Penlink development greatly exceed[ed] the value of the land taken, and of any injurious affection to the remaining land". It therefore held that GMH's claim tocompensation failed.The Costs Judgment[31] In a further judgment delivered on 22 August 2012, the Tribunal awarded costs and disbursements in favour of the Council against GMH in the sum of $180,046.42 under s 90(1) and (2) of the Act. It noted a submission for the Council that GMH had stubbornly attempted to ignore or sidestep the conventional before and after approach to the determination of compensation, even though that approach was not only clearly appropriate, but also required as a result of the 2006 decision. The Tribunal seems to have agreed with this submission. It concluded that the lengthand complexity of the 2011 hearing was very largely attributable to GMH's failure to address the issues "in the manner required by the 2005 decision".8 It held that it was a proper case for an award of costs in favour of the Council.Penlink[32] It is common ground that the Penlink Highway has not been built. Mr Galbraith QC appearing for GMH told us that it is unlikely that the road will proceed until 2024, at the earliest. Mr Lange appearing for the Council did not dispute that assertion.The Notice of Appeal[33] The notice of appeal is dated 11 November 2011. Inter alia, it asserts that there was no betterment to GMH's land arising from the acquisition or taking, and that betterment is either not likely to occur, or to occur (if at all) at an indeterminate time in the future. It asserts that there was no betterment which exceeded the value of the land taken. Further, the notice of appeal asserted that, in the context of a compulsory acquisition, and in particular in relation to the taking of the land here in issue for the Penlink project, it was wrong in principle to offset a theoretical betterment value that might never be realised against an actual loss.8 Green & McCahill Holdings Ltd v Auckland Council, supra n 2, at [19].[34] The appeal was filed out of time. GMH applied for an extension of time to appeal, and also for leave to adduce further evidence (an affidavit from a Mr McDonald, who is a civil engineer specialising in transportation, and the development of major transport and infrastructure). Both applications were opposed by the Council. They were heard by Andrews J on 14 March 2012, and in a reserved judgment released on 1 December 2012, both were granted.9Nature of Appeal[35] Any award made by the Tribunal under the Public Works Act is final as to the amount awarded, subject however to s 26 of the Land Valuation Proceedings Act 1948.10[36] Section 26 provides that any person affected by an order of the Tribunal may appeal to the High Court, and that every such appeal is by way of re-hearing.11Upon any appeal, the Court can confirm, discharge, or vary the order of the Tribunal, or direct that the matter be referred back to the Tribunal for further consideration as it thinks fit. The Court can generally make such order as it considers just and equitable in the circumstances of the case.12[37] The approach the Court should take on appeals by way of re-hearing from the Tribunal has been considered in other valuation cases.13 The approach is that discussed in Austin, Nichols & Co Inc v Stichting Lodestar.14 The Supreme Court there noted as follows:15(a) the appellant bears the onus of satisfying the appeal Court that it should differ from the decision under appeal;9 Green & McCahill Holdings Ltd v Auckland Council [2012] NZHC 858.10 Public Works Act 1981, s 95(1).11 Land Valuation Proceedings Act 1948, s 26(1).12 Section 26(4).13 Kent's Nurseries & Anor v Upper Hutt City Council HC Wellington CIV 2005-485-1958, 6August 2007 at [49]–[50]; Hall v Chief Executive of Land Information New ZealandHC Auckland CIV 2005-404-7222, 9 December 2009 at [23]–[26].14 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 (SC).15 At [4]–[5], [13] and [16]–[17].(b) it is only if the appellate Court considers that the appealed decision is wrong that it is justified in interfering with it;(c) the appeal Court has the responsibility of arriving at its own assessment on the merits of the case;(d) no deference is required beyond the customary caution appropriate when seeing the witnesses provides an advantage because, for example, credibility is important; and(e) the appellate Court is entitled to use the reasons of the first instance decision maker to assist it in reaching its own conclusions, but the weight that the Court places on them is a matter for it.[38] We have adopted this approach in considering this appeal.The Submissions[39] Mr Galbraith argued that the Tribunal made a fundamental error. He submitted that the error was contained in [11] of its judgment (set out above in [26]), when it picked up on an observation made by the Tribunal in the 2006 situation, namely that in the after situation, the Penlink project must be regarded as being in existence. Mr Galbraith argued that the Tribunal's decision was incorrect in fact and in law in that:(a) it wrongly assessed that betterment from Penlink accrued to theresidue of GMH's land as from the date of taking, and ignored theuncertainties surrounding the Penlink project; and(b) it failed to objectively apply settled principles in assessing the appropriate compensation for the value of the land actually taken for the Penlink project.[40] Mr Galbraith noted that, as a matter of fact, the Penlink road was not in existence at the date of taking, and that the proposition that its existence was to be presumed as at the date of taking was incorrect. He submitted that the 2011 Tribunal was not bound in that respect by the statements contained in the 2006 decision, that those statements were obiter, and that the presumption of the existence of the Penlink road, adopted by both Tribunals, was contrary to the knowledge and information which a hypothetical buyer would have had as at the date of taking. He argued that the approach adopted by both Tribunals assumed the existence of a road which did not, in fact, exist, and which would not have been taken into account by an informed hypothetical buyer as being in existence, and that as a result, the Tribunalhad erred and reached a "false value". He argued that nothing in the statute can be interpreted as requiring compensation, as it is affected by betterment, to be calculated on the basis of false facts or values.[41] Colourfully, but not unhelpfully, Mr Galbraith said that as a result of theTribunal's decisions:(a) GMH had 33 hectares of its land taken by the Council, in October 2003;(b) the Council has paid nothing for the 33 hectares of land which it has owned since October 2003;(c) the Council has a costs order for $180,000 approximately in its favour;(d) the Council has not spent $1 on the construction of Penlink, the existence and benefit of which was the sole reason that the Council was not ordered to pay compensation to GMH.Mr Galbraith submitted that this was a very odd outcome, given that a substantial area of land has been compulsorily acquired.[42] Mr Lange for the Council submitted that the Tribunal properly held that no compensation was payable to GMH, because betterment to the balance of GMH'sland exceeded the value of the land taken and of any injurious affection to the remaining land. He submitted that the Tribunal's approach was a correct applicationof relevant legal and valuation principles to the particular circumstances of the land acquisition in question. He argued that GMH has suffered no economic loss as a result of the land acquisition, and that as at the specified date of October 2003, it stood to gain considerably from the prospect of the intended public work.[43] Mr Lange emphasised that the 33 hectares taken for the public work was of a size, shape and nature such that there was no general demand or market for the land. He argued that s 62(1)(b)(ii) creates an exception to the usual requirement in s 62(1)(b) that the amount of compensation payable for land taken is the amount which the land, if sold in the open market by a willing seller to a willing buyer on the specified date, might be expected to realise. He submitted that s 62(1)(b)(ii) requires a before and after approach, and that the section was clearly applicable in the circumstances which apply. He submitted that the Tribunal correctly so found in 2006, that its observations in this regard were not obiter; rather, they gave rise to an issue estoppel precluding GMH from now raising the matter.[44] Mr Lange also referred to general compensation principles, and disputed thatthere was any fundamental error in the Tribunal's approach. He argued that thebefore and after approach requires the valuation of two separate situations, both hypothetical and on the same day, with compensation to be assessed as the difference between the two valuations. He submitted that both hypothetical situations require the making of assumptions that do not accord with reality. It was his argument that the two different hypotheticals are assessed as at the same date, so that neither can be factually correct. In the before situation, the existence or prospect of the relevant public work is totally ignored, even though the public work will obviously be in prospect. In the after situation, the required presumption is that the public work physically exists, even though almost invariably that will not be the case. He argued that while it is necessary to apply the hypothetical seller/hypothetical buyer approach to both the hypothetical before situation and the hypothetical after situation, this did not change the factual assumptions that form part of the hypothetical before and afterscenarios. Rather, he argued that the actions of the hypothetical seller and hypothetical buyer must be assessed within the factual confines of the assumed before and after scenarios.Analysis[45] We deal first with issue estoppel, and then with the approach the Act takes to the assessment of compensation when land is acquired or taken. We then set out what we consider to be the required approach to these matters and compare that approach to the approaches taken by the Tribunal and valuers. We then consider the appropriate remedy. Finally, we deal with the Tribunal's costs decision.Issue Estoppel[46] As noted above, the Council maintained that the statement made by the Tribunal in the 2006 decision, that the Penlink project must be regarded as being in existence in the after situation, was a final determination, giving rise to issue estoppel. GMH disputed this assertion. It argued that the issue was not required to be determined for the purpose of determining the highest and best use of the taken land, and that that was the only matter in issue in the 2006 decision.[47] We agree with GMH's submission.[48] Issue estoppel is concerned with the prior resolution of issues. It precludes a party from contending the contrary of any precise point which, having once been distinctly put in issue, has been solemnly and with certainty determined against him or her.16 For a point to be the subject of issue estoppel, it must have been raised and determined with certainty in the earlier litigation.17 Further, an issue estoppel can only be founded on determinations which are fundamental to the earlier decision, and without which it cannot stand. Other determinations cannot support an issue estoppel however definite the language in which they are expressed. For a decision16 Joseph Lynch Land Co Ltd v Lynch [1995] 1 NZLR 37 (CA) at 41.17 Ibid, at 41–42.on any matter to give rise to an issue estoppel, that matter must be one which it was necessary to decide and which was actually decided. 18[49] It follows that, as a matter of law, there can be no issue estoppel in the present case. In the 2006 decision, the Tribunal expressly noted that GMH'sapplication for compensation was proceeding in two stages, that the first hearing was to determine the highest and best use of the subject land, and that the first hearing was limited to the planning and hypothetical subdivision assumptions applicable todetermining compensation. The Tribunal's observations as to the applicable valuation principles were not fundamental to its decision on the matters which it was deciding, and without which its decision could not stand.[50] There are also difficulties with asserting issue estoppel as a matter of fact. The Tribunal, in its 2006 decision, said that in the after situation, the "Penlink project" must be regarded as being in existence. Prima facie, there is a distinction between the project and the road itself if and when it is built. In the 2011 decision, the Tribunal assumed — albeit implicitly — that the project and the road were the same thing when it held that the existence of the road had to be assumed in undertaking the after valuation. Even if we are wrong in our view that issue estoppel cannot apply as a matter of law, any estoppel must be limited to the "Penlink project"being in existence, and not the road.[51] Accordingly, we hold that GMH is not estopped from challenging the 2011 decision by the Tribunal that the existence of the Penlink road has to be assumed in any after valuation.Compensation under s 62 of the Public Works Act[52] In any developing community, there must be power to take land from private owners for public purposes. However, in a society such as ours, where the private ownership of land is permitted, justice requires that compensation should be paid for such taking.1918 Talyancich v Index Developments Ltd [1992] 3 NZLR 28 (CA) at 37–38.19 Birmingham City Corp v West Midland Baptist Trust [1970] AC 874 (HL) at 908–909.[53] These principles are clearly recognised in the Public Works Act.[54] The taking of land for public purposes is provided for in the Act. The Minister of Lands is empowered to acquire any land required for a Government work.20 Further, every local authority is empowered to acquire land required for a local work for which it has financial responsibility.21 Acquisition may be by agreement,22 or by way of compulsory taking.23 Where any land is acquired or taken for any public work, or suffers any injurious affection resulting from the acquisition or taking of any other land of the owner for any public work, or suffers any damage from the exercise of any power under the Act or any power which relates to a publicwork, the owner of the land is entitled to "full compensation" for the acquisition, taking, injurious affection or damage.24[55] The expression "full compensation" means such sum of money as will place the dispossessed owner in a position as similar as possible to that which the owner was in before the land was taken.25 The governing principle of compensation is the award of a monetary equivalent for that which has been lost. The word "full" canprobably be equated with the word "fair".26 A claimant is entitled to receive the full money equivalent of what he has lost and in respect of each category of compensatable loss. Use of the word "full" implies a direction that his or her entitlement must not be whittled down in any respect.27[56] The assessment of compensation is governed primarily by s 62. Relevantly, it provides as follows:20 Section 16(1).21 Section 16(2).22 Section 17.23 Sections 23–27.24 Section 60(1).25 Russell v Minister of Lands (1898) 17 NZLR 241 (SC) at 253; and see Peter Salmon, TheCompulsory Acquisition of Land in New Zealand (Butterworths, Wellington, 1982) at [11.1].26 Riddiford v Attorney-General [2009] NZCA 603 at [24].27 Drower v Minister of Works and Development [1984] 1 NZLR 26 (CA) at 29; Laws ofNew Zealand Compulsory Acquisition and Compensation at [66]; and see Te Marua Ltd vWellington Regional Water Board [1983] NZLR 694 (CA) at 697.62 Assessment of compensation(1) The amount of compensation payable under this Act, whether for land taken, land injuriously affected, or otherwise, shall be assessed in accordance with the following provisions:(a) subject to the provisions of sections 72 to 76, no allowance shall be made on account of the taking of any land being compulsory:(b) the value of land shall, except as otherwise provided, be taken to be that amount which the land if sold in the open market by a willing seller to a willing buyer on the specified date might be expected to realise, unless—(ii) only part of the land of an owner is taken or acquired under this Act and that part is of a size, shape, or nature for which there is no general demand or market, in which case the compensation for such land and the injurious affection caused by such taking or acquisition may be assessed by determining the market value of the whole of the owner's land and deducting from it the market value of the balance of the owner's land after the taking or acquisition:(c) where the value of the land taken for any public work has, on or before the specified date, been increased or reduced by the work or the prospect of the work, the amount of that increase or reduction shall not be taken into account:(e) the Tribunal shall take into account by way of deduction from that part of the total amount of compensation that would otherwise be awarded on any claim in respect of a public work that comprises the market value of the land taken and any injurious affection to land arising out of the taking, any increase in the value of any land of the claimant that is injuriously affected, or in the value of any other land in which the claimant has an interest, caused before the specified date or likely to be caused after that date by the work or the prospect of the work:[57] As can be seen, the section deals, in our view in a rather confused fashion, not only with the assessment of compensation for land taken, but also with the assessment of compensation for other land of the dispossessed owner that is injuriously affected. It then provides that increases in value of any land that isinjuriously affected as a result of the acquisition/taking may be deducted from the total amount of compensation that would otherwise be payable. The confusion arises mainly because:(a) directions affecting the approach to assessments of compensation, for example, s 62(1)(a), (c) and (d), are run together with a staged series of steps designed to result in a net compensation assessment;(b) the assessments of compensation for land taken, and for other land of the dispossessed owner injuriously affected, are run together in s 62(1)(b)(ii), but the subsection fails to recognise that loss arising from injurious affection is not limited to loss caused by the taking or acquisition.[58] The primary rule contained in s 62(1)(b) is that the "value of land" (whetherthe land taken or other land injuriously affected) is taken to be the amount which the land, if sold in the open market by a willing seller to a willing buyer, on the specified date, might be expected to realise. There are two specific directions which will invariably have to be taken into account in assessing this value. First, no allowance is to be made for the fact that the taking of any land is compulsory;28 secondly, where the value of the land taken has been increased or reduced by the work or prospect of the work, the amount of that increase or reduction is not to be taken into account.29 A third direction, namely that any special suitability or adaptability of the land, or of any natural material, is not to be taken into account if there is no market apart from the special needs of any Government Department or local authority,30may occasionally apply.[59] Section 62(1)(b) in its terms is directed to assessments of compensation for land taken, and/or for other land of the dispossessed owner that is injuriously affected. It is not directed to betterment. That topic is covered generally in s 62(1)(e), and specifically in s 62(1)(f) where the increase in value occurs as a result28 Section 62(1)(a). This rule was apparently included in the legislation to bring to an end thepractice whereby an additional 10 percent was given to soften the blow of compulsoryacquisition; Peter Salmon The Compulsory Acquisition of Land in New Zealand at [13.2].29 Section 62(1)(c).30 Section 62(1)(d).of the exercise by the New Zealand Road Transport Authority of any power under s 91 of the Government Roading Powers Act 1989.[60] Pursuant to s 62(1)(b), it is the land taken, and the other land injuriously affected, which is required to be assessed by reference to the willing seller/willing buyer notional transaction, in an open market, at the specified date. The subsection treats the compulsory acquisition or taking as a notional sale and purchase transaction, and a valuer undertaking a compensation assessment is required to give his or her professional advice on the likely sale/purchase figure. The valuation must be of the relevant land in the state in which it was in on the specified date, and any potentialities must be taken into account.31[61] As was noted in Boat Park Limited v Hutchinson, the objective is to assess the market value of the subject land at the effective date.32The market value, or fair market value, is arrived at by determining whatprice the property would sell for on the open market under the normal conditions applicable in the market for the type and location of the property being valued Fundamental to this task is the willing seller/willing buyer principle. Thus, "market value" is defined in the New Zealand Institute ofValuers, Valuation Standard 1, in these terms:Market value is the estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.[62] We agree with comments made in the course of an arbitral award in relation to the Green Group land, which the parties referred us to,33 that this requires identification of the knowledge or information the hypothetical parties would have been likely to have and to have taken into account at the specified date in coming to their conclusions about value. The nature and extent of the knowledge or information which the hypothetical party will be assumed to have had will be31 Cedar Rapids Manufacturing & Power Co v LaCoste [1914] AC 569 (HL) at 576; Re Whareora2E Block [1957] NZLR 284 (CA); affirmed on appeal, Māori Trustee v Ministry of Works [1959]NZLR 7 (PC).32 Boat Park Ltd v Hutchinson [1999] 2 NZLR 74 (CA) at 83.33 Kilmacrennan Farm Ltd & Kerrykeel Farm Ltd v The Rodney District Council, 7 June 2005.The arbitrators were Mr Galbraith, a Mr G Cheyne and a Mr R Stevenson.influenced by the nature and sensitivity of the particular issue to the value of the land in question.The Exceptions — Section 62(1)(b)(i) and (ii)[63] Subsection 62(1)(b) applies "except as otherwise provided", and the primary willing seller/willing buyer approach set out in the subsection is followed by theword "unless". There are two qualifications to the subsection:(a) The first is not directly relevant for present purposes. It comes into play only where the assessment of compensation required relates to any matter which is not directly based on the value of land. In such circumstances, there is little or no point in using the willing seller/willing buyer test to assess the market value of the land becausethe compensation being sought is not directly based on the land'svalue. Rather unhelpfully, the Act does not however go on to provide how assessments of compensation are to be made in such cases, unless the matter in respect of which the right to compensation arises is covered by one or more of the specific provisions which follow on from s 62.34(b) The second exception is contained in s 62(1)(b)(ii). It allows for the use of before and after valuations as a means of assessing compensation in defined circumstances. It is directed to the situation where there is no general demand or market for the land which has been taken, because of its size, shape or nature. In such situations, it is pointless to require that any assessment of compensation is based on the amount that the land, if sold in the open market by a willing seller to a willing buyer, might be expected to realise, because there is no demand for the land taken and it therefore can be assumed that it has no market value. Therefore, the legislature has provided that, in the defined circumstances, compensation both for the land and for any34 See, for example, s 66 (disturbment payments); s 67 (compensation for loss on repayment ofa mortgage); s 68(compensation for business loss).injurious affection caused by the taking or acquisition, can be assessedby determining the market value of the whole of the owner's land, and deducting from it the market value of the balance of the owner's landafter the taking or the acquisition.[64] The before and after approach calls for two valuations, one before and one after the taking or acquisition. The before and after approach is not a valuation technique as such.35 Rather, it is a tool or method intended to assist in assessing theowner's net loss arising both from the taking and from any injurious affection to theremainder of the owner's land.36 The loss is the difference between the value of the land immediately prior to the taking, and the value of the severed residue immediately after the taking.37[65] We do not consider that this second exception from the primary rule contained in s 62(1)(b) abandons the willing seller/willing buyer notional transaction approach to the assessment of compensation. In this respect, it differs from the first exception. Under s 62(1)(b)(ii), a valuer adopting the before and after approach must assess the "market value" of the land on a before basis and then again on an after basis. Market value can only be assessed by reference to the willing seller/willing buyer test set out in s 62(1)(b). The valuations undertaken in the before situation and again in the after valuation should be made on a willing buyer/willing seller basis and by the most appropriate method that suits the circumstances. For example, a comparison of comparable sales may assist. So may a hypothetical subdivision analysis, or a discounted cashflow analysis. As Speedy has observed, although it is useful for the purposes of comparison to use the same method for each valuation required, it is not necessary if the circumstances indicate another approach. Further, as in any normal valuation, where possible, another method should be used as a cross check.3835 Squire L Speedy Land Compensation (New Zealand Institute of Land Valuers, Wellington, 1984)at 33.36 Ibid, at 32.37 Ibid, at 33.38 Ibid, at 33.[66] It should be noted that the before and after approach is not compulsory, even in situations where there is no general demand or market for the land taken or acquired. The exception provides that the before and after approach "may" be used.A valuer assessing compensation under the Act, and a Land Valuation Tribunal hearing a compensation claim, will have to consider whether or not the before and after approach is appropriate. There can be practical difficulties in using the before and after approach. It may be unreliable if any averaging valuation method is used, as the approach determines the difference between the two situations. If a relatively small difference is revealed by the before and after approach, another method may need to be considered.39 It may not fairly assess the loss of improvements when viewed on a broad scale.40 Indeed, the Act expressly recognises that where land taken or acquired for a public purpose is of such a nature that there is no general demand or market for the land, compensation can be assessed on the basis of the reasonable cost of reinstatement in some other place.41What state of affairs is assumed in the after valuation?[67] Pursuant to s 62(1)(b)(ii), it is "the taking or acquisition" which is required tobe taken into account in the after valuation.[68] There is nothing in s 62(1)(b)(ii) expressly requiring that the existence of the proposed work be taken into account in undertaking the after valuation. Indeed, the Act points to a contrary conclusion. The use of the words "after the taking or acquisition" in s 62(1)(b)(ii) can be contrasted with the use of the words "by thework or the prospect of the work" used in s 62(1)(c) and in s 62(1)(e), and the words"as a result of the exercise" of the relevant statutory power in s 62(1)(f).[69] There is, in our judgment, a clear distinction to be drawn between taking or acquisition, and the completion of the public work intended. Taking or acquisition focuses attention not on the carrying out or completion of the public work proposed,39 Ibid, at 32–33.40 Ibid, at 34.41 Public Works Act 1981, s 65(1). It appears that this section is directed to the situation where thewhole of a claimant's land is taken.but rather on the legalities surrounding the taking or acquisition by the Crown or local authority.[70] This is clear enough when the case requires before and after valuations of the land which is actually taken. The issue becomes less clear however when injurious affection is also required to be assessed, as part of a compensation claim arising from the taking of land, through before and after valuations.[71] Injurious affection is not defined in the Act. It is a "piece of jargon", albeit of "respectable pedigree".42 It is loss suffered by other land of the disposed owner that is not taken. Section 60(1)(b) of the Act gives an entitlement to compensation forinjurious affection as a result of the "acquisition or taking". The terminology used in s 62(1)(b)(ii) — "after the taking or acquisition" — fits in with the entitlement to compensation created by s 60(1)(b). However, in practice, two types of loss areincorporated in the term "injurious affection".43 The first is the depreciation in the value of the remaining land caused as a result of the severance from that land of the portion taken for the public work. This type of loss is expressly allowed by s 60(1)(b) and caught by the words "after the acquisition or taking" used in62(1)(b)(ii). However, it is commonly accepted that injurious affection also extends to loss which is caused by the operation of the public work on the land taken. Injurious affection of this type can, for example, arise from dust, noise, visual detraction, loss of privacy and the like. Notwithstanding that injurious affection of this kind has been recognised by the law for well over a century — the leading case dates back to 187244 — the relevant provisions in the Act dealing with the assessment of compensation for injurious affection45 do not expressly recognise that losses of this kind, commonly accepted to be compensatable, arise from the carrying out or operation of the public work rather than the taking or acquisition.[72] Curiously, the provisions governing the assessment of compensation for substantial injurious affection from a public work where no land is taken but a42 Edwards v Minister of Transport [1964] 2 QB 134 at 144.43 Salmon, above n 25, at [15.1].44 Duke of Buccleuch v Metropolitan Board of Works (1872) LR 5 HL 418.45 Public Works Act, ss 60(1)(b) and 62(1)(b)(ii).person's land is nevertheless affected in certain ways, expressly refer to substantialinjurious affection "caused by the construction" of the public work.46[73] It seems that, as a matter of practice, generous interpretation of the statute has allowed the words "taking or acquisition" used in s 62(1)(b)(ii) to extend to injurious affection not directly arising from the taking or acquisition but rather from the existence and operation of the public work. Consequently, the practice has developed, by default, of assuming that the public work exists, when calculating under s 62(1)(b)(ii) injurious affection on other land of the claimant caused by the taking or acquisition.[74] In the present case, we need say no more about this, because injurious affection was not claimed by GMH in its amended application and the Tribunal was not required to address it. Whether the practice which has developed is accommodated by the Act should be determined on another day when the issue is directly before the Court. Suffice it to say that we do not consider that the de facto practice, developed in relation to injurious affection, essentially as a matter of expediency, affects the proper interpretation of s 62(1)(b)(ii) in relation to before and after valuations of land taken or acquired for a public work, when there is no general demand or market for the land, and when before and after valuations are considered to be the best way of assessing the compensation which should prima facie be awarded to the dispossessed land owner. In our judgment, the section is quite clear.The section requires that the market value of the balance of the claimant's land be assessed "after the taking or acquisition", and not after the public works the subjectof the taking or acquisition have been carried out. It follows that in our judgment, the Tribunal fell into error when it held that the after valuation in this case had to proceed on the basis that the Penlink road had been built.Betterment[75] Any increase in the value of lands retained by a dispossessed owner due to a public work cannot be set off against the compensation monies payable for the land46 Section 63(1)(a) and (3); section 64.taken or acquired, unless there is specific provision in the statute under which the compensation is assessed authorising the set off.47[76] The Public Works Act does allow for set off in s 62(1)(e) and (f).[77] The word "betterment" is used elsewhere in the Act,48 but for some reason its use is not repeated in s 62(1). Rather, s 62(1)(e) refers to "any increase in the value of any land of a claimant". The same wording is used in s 62(1)(f).[78] A betterment calculation under s 62(1)(e) cannot, in our judgment, be run together with an after valuation undertaken pursuant to s 62(1)(b)(ii). The two subsections are dealing with different things. In our view, the Tribunal, and any valuer addressing the issue, should first assess the total amount of compensation that would otherwise be awarded to any claimant both for the market value of the land taken and for any injurious affection to other land of the claimant arising out of the taking, and then assess any increase in the value of any land of the claimant that is injuriously affected, or in the value of any other land in which the claimant has an interest, and deduct that increase in value from the total amount of compensation that would otherwise be awarded.49[79] The wording of s 62(1)(e) makes it clear that betterment is only deductable from compensation that would otherwise be awarded for the market value of the land taken and for any injurious affection to other land of the claimant. It is not deductable from any compensation awarded under other heads of loss.50[80] Section 62(1)(e) is in mandatory terms. The Tribunal is directed to allow for betterment. It is a matter it should take into account. However, an increase in value is only required to be taken into account when the increase is "caused" before thespecified date or likely to be caused after that date by the work or the prospect of the work. There has to be a proven causative connection arising out of the public work47 Railway Commissioner of New South Wales v Perpetual Trustee Co Ltd (1905) 3 CLR 27 at 39–40.48 Section 18(1)(c).49 Napier City Council v Marist Holdings (Green Meadows) Ltd [2012] NZHC 658 (HC) at [10].50 And see, The Laws of New Zealand Compulsory Acquisition and Compensation at [72].or prospect of the work that results in betterment.51 The increase in value must be causally linked in a way that is more than minor.52 Convincing evidence is required.53[81] In the present case, the Tribunal assumed the existence of the Penlink road throughout, not only when it was assessing the after value of the land taken, but also when it was assessing betterment.[82] In our judgment, the Tribunal fell into error in this regard. First, as a matter of fact, the Penlink road did not exist in October 2003. It cannot logically be said that any increase in the residue land owned by GMH was caused by the work for the simple reason that the work had not then been undertaken. Secondly, while it may be that there was at the specified date an increase in the value of other land owned by GMH by the "prospect of the work", that is a different issue, which was not addressed either by the Tribunal, or by the valuers.[83] We agree with Mr Galbraith that if what is claimed to be betterment, is anincrease in value to the residue of GMH's land, or to other land owned by it, arising from the prospect of the Penlink works, then that increase needs to be proved. The public work cannot be assumed to be in place. Any enquiry into its prospects will necessitate an enquiry into the certainty or otherwise of the works proceeding and their timing, all assessed as at the date of taking/acquisition.[84] For the sake of completeness, we observe that under the Public Works Act, if any increase in value exceeds the amount otherwise payable by way of compensation, the Government Department or local authority cannot claim the excess from the owner. In some situations, an excess may be recoverable under s 326 of the Local Government Act 1974, but that issue was not before us.51 Finlayson v Minister of Works [1934] NZLR 456 (SC) at 467 and 470-1.52 Napier City Council v Marist Holdings (Green Meadows) Ltd, supra n 49, at [18].53 Candy v Thames Valley Drainage Board [1956] NZLR 416 (Land Valuation Court) at 421.Summary in relation to applicable valuation principles[85] In the present case, it is common ground that only part of GMH's land has been taken or acquired, and that the part taken or acquired is of a size, shape or nature for which there is no general demand or market. As a result, the following approach should have been adopted:(a) The valuers/Tribunal should have considered whether or not a before valuation, and then an after valuation, undertaken pursuant to s 62(1)(b)(ii), would have been likely to assist in assessing the compensation payable to GMH as the dispossessed owner.(b) If the answer was "no", then alternative approaches to the assessmentof GMH's loss should have been taken.(c) If the answer was "yes", then a before valuation should have beenundertaken of the whole of GMH's land, using the willing seller/willing buyer approach, and taking into account the directions contained in s 62(1)(a) and (c).(d) An after valuation should then have been undertaken for the whole ofGMH's land, again using the willing seller/willing buyer approach, taking into account the statutory directions, and also taking into account all the potentialities affecting the land and advantages and disadvantages attaching to those potentialities. In undertaking this assessment, the valuers/Tribunal should have assumed the taking or acquisition, but not the existence of the public work.(e) A separate assessment should then have been made of any increase in the value of any residue land of GMH, or in the value of any other land in which GMH has an interest, likely to be caused after the specified date by the prospect of the work. Any betterment caused by the prospect of the work had to be proved, and by convincing evidence. Any proven increase in value caused by the prospectiveworks could then be deducted from the total amount of compensation otherwise to be awarded, to result in a net figure. Any increase in value caused by other factors would need to be discounted.54(f) If any betterment caused by the prospective works and found to be proved, exceeded the total amount of compensation otherwise payable, then GMH would not have been entitled to any compensation.55(g) If any betterment found to be proved did not exceed the total amount of compensation otherwise payable, then an award should have beenmade in GMH's favour for the net loss.(h) If an award was made in GMH's favour, the Tribunal should haveconsidered whether it carried interest and if so, from what date and at what rate.[86] Unfortunately, the Tribunal did not follow this approach. Rather, it held that the existence of the Penlink road was to be presumed as at the date of taking. This approach permeated its findings not only in relation to the value of the land taken, but also to the way in which it approached the issue of betterment. In our judgment, the Tribunal has misconstrued the statute and erred in the way in which it approached GMH's claim to compensation.The Valuers[87] Four valuers were called by the parties, a Mr Roberts and a Mr Gamby by the Council, and a Mr Dean and a Mr Smithies by GMH. We briefly consider the approach taken by each of them.54 Napier City Council v Marist Holdings (Green Meadows) Ltd, supra n 49, at [18].55 Montgomery Investments Ltd v Minister of Works [1962] LVCB 453; see also, albeit in adifferent statutory context, AMP Capital Investors Ltd v Transport Infrastructure DevelopmentInc (2008) 163 LGERA 245 at 256–257 and 261.(i) Mr Roberts[88] Mr Roberts stated that his compensation assessment followed the 2006 decision. In [70] of his valuation, he stated as follows:I have assessed compensation for the acquisition of the area of land in question, on the basis of the "before and after" method. This methodrequires as assessment of the market value of. the entire property prior to the acquisition, and. the balance of the property after the acquisition.He went on to state that this approach is authorised under s 62 of the Public WorksAct 1981, and specifically by s 62(1)(b)(ii). He noted that the approach "willaccount for any loss in value (injurious affection) and/or alternatively any increase in value (betterment) which may occur as a result of the proposed works".[89] At [116] of his brief, Mr Roberts stated that his after valuation assumed the existence of the Penlink road. Further, at [125] he stated as follows:In preparing this valuation I have made the following assumptions relating to subdivision of the [GMH] property. the before valuation for the [GMH] property does not contemplate theprospect of the Penlink road. the after valuation is based on the assumption that the Penlink road wouldbe constructed and would be fully operational by the time the subdivisiondevelopment commences.[90] Mr Roberts made no allowance for any delay which might occur in the construction of the Penlink road. He noted in [109] of his valuation that he had allowed for "a seven year deferment" back to October 2003. The deferment recognised the existence of the forestry right and the fact that development could not commence until the forestry right has expired. Clearly, Mr Roberts made no deferent for any delay which might occur in construction of the Penlink road. Rather, he considered the road to exist, and observed that it would have a positive impact on the cost of subdividing the balance of the property, but without the negative impact normally associated with a road such as Penlink through a rural area.[91] Mr Roberts assessed the market value of the whole of GMH's land on a before and after basis, first by reference to an analysis of comparable block land sales, secondly as a hypothetical subdivision utilising a discounted cashflow method, and thirdly, based on a hypothetical subdivision budget. He noted in his conclusion that all three valuation methods yielded a higher "after valuation" than the before valuation, primarily reflecting the significant saving in upfront road construction costs.(ii) Mr Gamby[92] Mr Gamby also considered that the appropriate method for assessing compensation was the before and after approach. He made no express mention of the 2006 Tribunal decision. Nor did he specifically state that his after valuation assumed the existence of the Penlink road. However, his valuations in the after scenario quite clearly assumed the existence of the road, because he referred to the corresponding savings in development costs to GMH. Further, he was cross- examined about the approach he took to his valuation. He accepted that he assumed,when undertaking his after valuation, that Penlink was a "foregone conclusion".56(iii) Mr Dean[93] Mr Dean took a completely different approach to that taken by the Council'svaluers. He only endeavoured to value the land taken. He considered that the before and after approach was unnecessary and inappropriate, and he disputed that the 2006 decision made by the Tribunal was binding on anything other than issues of zoning and land utilisation. In a reply brief, he argued that when considering betterment, it was necessary to contemplate when any benefit would arise. Ultimately, however, his approach in simply endeavouring to value the land taken fell down. It was put to him in cross-examination that the 33 hectares taken and acquired was not subdivisible, and that it was not saleable in its own right. Ultimately, he was forced to agree with this assertion. This, of course, undermined his approach to the assessment of compensation.56 Transcript, day 5, at 44.(iv) Mr Smithies[94] Mr Smithies took a similar approach to that of Mr Dean. He described hismethodology as "being the value of the loss of the land where the land taken is not a significant portion of the overall property". He considered that the loss could be determined by a comparison with market sales evidence. His approach also failedfor much the same reasons as Mr Dean's approach failed. There were no comparable sales and there was no demand for the land that was taken.Summary in relation to approaches of valuers[95] In our judgment, the Council's valuers proceeded on an erroneous basis. They ran together the value of the land taken, injurious affection, and betterment in the one after valuation. Further, they assumed that Penlink had been constructed in this after valuation, and they did not allow for the possibility that Penlink might not proceed either in a timely fashion, or at all. In effect, they postulated betterment, on an erroneous assumption.[96] The valuers called by GMH adopted an approach which ultimately they were forced to concede was inappropriate.[97] We do not underestimate the difficulties which faced the valuers, and which they acknowledged. There were no comparable sales. There was no demand for the land taken. While it undoubtedly has a value, for example, for the provision of reserve land as part of any overall subdivision, that value is not easy to assess. The problems with any hypothetical subdivision analysis, or discounted cashflow analysis, are acute because of the likely time delays until any development can take place. Assumptions required as part of such analyses are likely to throw up differences which, multiplied over time, can lead to wildly disparate answers. Be this as it may, the fundamental difficulty is that the Tribunal concluded that betterment exceeded the value of the compensation otherwise payable, but it did not properly assessed betterment. Nor did the valuers. It was assumed that the work existed, rather than acknowledging that the work was only in prospect. No consideration was given to the likely delays, assessed as at October 2003.Remedy[98] There is insufficient material before us on which we can properly conclude what compensation, if any, should or should not be payable to GMH. We have no alternative but to set aside the Tribunal's 2011 decision and refer GMH's claim backto the Tribunal for reconsideration.[99] Mr Galbraith submitted to us that should we reach this point, we should direct that the matter be considered by a freshly constituted Tribunal, given the strongly expressed views contained in the 2011 decision and in the costs decision. We are not persuaded that a direction to this end is appropriate. While the Tribunal did express strong views, there is no reason to suspect that it would not set aside those views, and reconsider the matter in accordance with the directions given in this judgment.The Costs Decision[100] The appeal has succeeded, and it follows that the award of costs made by the Tribunal on 22 August 2011 should be set aside.[101] Mr Galbraith submitted that costs should be awarded to GMH in respect of both the 2006 and 2011 hearings. We make no direction in that regard. We leave it to the Tribunal to reconsider the issue of costs in their totality when it reconsidersGMH's claim for compensation.Conclusion[102] The Tribunal's decision of 19 October 2011 is set aside. GMH's claim forcompensation is referred back to the Tribunal for further consideration.[103] The Tribunal's costs decision of 22 August 2011 is set aside.Costs of this appeal[104] GMH as the successful party is entitled to its reasonable costs and disbursements in relation to this appeal.[105] Counsel have already agreed, and the Court has directed, that the appeal is classified as category 3 for costs purposes. We anticipate that counsel will be able to agree on the appropriate costs and disbursements. In the event that there is any dispute, GMH is to file a memorandum detailing the costs it claims within 10 working days of the date of this judgment. Any memorandum in response by the Council is to be filed within a further 10 working days. We will then deal with the issue of costs on the papers, unless we require the assistance of counsel.[106] For the avoidance of doubt, the Registrar is directed to refund to GMH the sum paid by way of security for costs pursuant to the Court's minute dated 21 May2012._________________________Wylie J_________________________G J Horsley