HEADNOTE
[This headnote is not to be read as part of the judgment]
In December 2014 the respondent (RMS) compulsorily acquired two parcels of land owned by the appellant (ALF) in St Peters, Sydney, for the purpose of building the WestConnex motorway. One of the parcels (Lot 2), with which this appeal was concerned, was 15.71ha in size and was being used for landfill and waste operations at the time of acquisition. ALF sought compensation for Lot 2 under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (JTC Act). The Land and Environment Court (LEC) determined that ALF was entitled to be paid about $45.7 million in respect of the market value of Lot 2. ALF then appealed on questions of law to this Court, pursuant to s 57 of the Land and Environment Court Act 1979 (NSW).
The principal issues on appeal were:
(1) Whether the primary judge constructively failed to exercise his jurisdiction;
(2) Whether the primary judge's reasons for findings were inadequate;
(3) Whether there was a lack of procedural fairness arising out of the reasons of the primary judge for preferring the evidence of an expert called by RMS;
(4) Whether the primary judge's judgment gave rise to an apprehension of bias;
(5) Whether the primary judge erred in assessing compensation for disturbance;
(6) Whether the primary judge erred in assessing special value.
The Court (Basten JA, Macfarlan JA and Leeming JA) dismissed the appeal, determining each of the above issues unfavourably to ALF:
In relation to Issues 1 (constructive failure to exercise jurisdiction) and 2 (adequacy of reasons):
(Per Basten JA, with Leeming JA in substantial agreement at [413]):
The premise underlying a constructive failure to exercise jurisdiction is that there has been an apparent exercise of jurisdiction of the court, but once the underlying issues and materials are teased out, it is demonstrated that a material issue presented for determination has not been resolved: [6]. A "constructive" failure to exercise jurisdiction includes any form of jurisdictional error which is not a mistaken express refusal to exercise the powers of the court, and the terminology has also been used where the adequacy of reasons has been challenged: [12]-[13].
Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353; [1949] HCA 26; Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; [2000] HCA 47; LVR (WA) Pty Ltd v Administrative Appeals Tribunal (2012) 203 FCR 166; [2012] FCAFC 90; Cojocaru v British Columbia Women's Hospital and Health Centre [2013] 2 SCR 357; 2013 SCC 30, referred to.
Where an appeal is confined to questions of law, the standard of reasons is such that it must be shown that the decision has not been reached capriciously or arbitrarily, but rationally: [29]. The reasons must thus reveal that all material factors have been identified and addressed, and that no prohibited considerations have been operative: [29].
Pettitt v Dunkley [1971] 1 NSWLR 376; Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33; Boele v Rinbac Pty Ltd (2014) 88 NSWLR 381; [2014] NSWCA 451; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Li v Attorney General for New South Wales [2019] NSWCA 95, referred to.
In so far as the complaint alleged a global failure to exercise jurisdiction, relevant factors include: the judge was entitled to reject the highly complex discounted cash flow exercise on which ALF relied; adoption of the submissions of one party on all material issues does not of itself demonstrate legal error; the judge heard the case over 50 days, resolved the ultimate issue and gave structured reasons identifying the key issues, evidence and submissions: [39], [46], [48]. In relation to the specific challenges raised, the primary judge made findings and gave adequate reasons, which were sometimes implicit: [60]-[61], [73], [85], [89].
(Per Macfarlan JA):
The extent of the obligation on courts to give reasons for their conclusions is very much dependent upon the context: [294]. The adequacy of reasons is not to be judged against a standard of perfection, but the question is whether they attained the minimum acceptable standard: [316]. In this case, the minimum standard is relevantly undemanding for several reasons: the LEC has to consider highly sophisticated and technical issues, with as much expedition as possible ([295], [317]); valuation issues often involve substantial subjective elements and need not be determined with mathematical precision ([318]); a pragmatic and functional approach is to be taken ([321]); a level of generality and implicit reasoning is acceptable ([322]-[323]); and the length and complexity of the proceedings is relevant ([324]). The primary judgment gave the essential reasons for his Honour's decision and reached the minimum acceptable standard: [325]. The primary judge's reasons were adequate in respect of each of the major issues presented to him for determination: [330]-[341].
Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33; New South Wales Land and Housing Corporation v Orr (2019) 100 NSWLR 578; [2019] NSWCA 231; Apokis v Transport for NSW [2020] NSWCA 39; Secretary of State for Foreign Affairs v Charlesworth, Pilling & Co [1901] AC 373; Moreton Club v Commonwealth (1948) 77 CLR 253; [1948] HCA 21; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247; Yates Property Corporation Pty Ltd (In Liq) v Darling Harbour Authority (1991) 24 NSWLR 156, referred to. DZH16 v Minister for Immigration [2020] FCCA 1041; LVR (WA) Pty Ltd v Administrative Appeals Tribunal (2012) 203 FCR 166; [2012] FCAFC 90, distinguished.
(Additional observations of Leeming JA):
The invariable resolution of disputed points in RMS's favour does not of itself indicate error: [387]-[388]. Although there was scant reasoning, more is required in order that there not merely be an error of fact: [395]-[396]. Although some errors in the fact finding process may amount to errors of law, one cannot safely transplant the principles applicable to appeals confined to questions of law: [403]. In this case, ALF did not establish legal (as opposed to factual) error: [412].
In relation to Issue 3 (lack of procedural fairness):
(Per Basten JA, Leeming JA agreeing at [417]):
The primary judge's preference for one expert's experience, being specific to the exercise undertaken in the present case, in circumstances where a different expert's approach was the subject of cross-examination, provided no basis for a complaint of procedural fairness: [96].
CSR Ltd v Della Maddalena [2006] HCA 1; (2006) 80 ALJR 458, distinguished.
(Per Macfarlan JA):
The primary judge's observations as to the experts' relative qualifications and experience were open to be made on the evidence, and there was no need for his Honour to draw his intent to make them to the parties' attention: [348].
In relation to Issue 4 (apprehended bias):
(Per Basten JA, Macfarlan JA and Leeming JA):
The outcome of a case and the judge's reasons for judgment will not alone support a claim of reasonable apprehension of bias, based on prejudgment: [99], [353], [413].
Michael Wilson & Partners Ltd v Nicholls (2011) 244 CLR 427; [2011] HCA 48; Studholme v Rawson [2020] NSWCA 76, referred to.
In relation to Issue 5 (disturbance):
(Per Basten JA, Leeming JA agreeing with additional reasons at [414]-[416]):
On its proper construction, s 59(f) only covers financial costs reasonably incurred by a person with an interest in the land acquired: [116]. The best approach to construction is to read the phrase "other financial costs" in s 59(f), being costs relating to the actual use of the land at the date of acquisition, as not encompassing loss of the opportunity to earn future profits: [137].
G Capital Corporation Pty Ltd v Roads and Maritime Services (2019) 100 NSWLR 771; [2019] NSWCA 234; Roads and Maritime Services (NSW) v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41, referred to. Almona Pty Ltd v Roads and Traffic Authority of NSW [2008] NSWLEC 112; (2008) 160 LGERA 375, distinguished. El Boustani v Minister Administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33; 199 LGERA 198; Health Administration Corporation v George D Angus Pty Ltd (2014) 88 NSWLR 752; [2014] NSWCA 352, not followed.
ALF did not actually use Lot 2, and did not establish that the user used it as its agent: [142]. In relation to ALF's assertion that RMS was estopped from denying that an agency relationship existed, there was no factual finding of the kind apparently relied on by ALF in the course of the previous proceedings: [142], [145].
In regard to the disturbance claim for business disruption, the trial judge was correct to find that ALF failed to establish any causal relationship: [154]. Furthermore, it was patently not a claim in relation to the "actual use" of Lot 2: [154]. With regards to the disturbance claim for relocation costs, the business carried on on Lot 2 was not carried on by ALF and ALF did not incur costs of any relocation: [160].
(Per Macfarlan JA):
The primary judge correctly held that s 59(f) was inapplicable in the absence of ALF establishing that there was an "actual use" of Lot 2 by it at the date of acquisition: [358]-[359]. The mere fact that land is used by a subsidiary of a holding company which is the owner of the land does not establish actual use by the holding company: [361].
G Capital Corporation Pty Ltd v Roads and Maritime Services (2019) 100 NSWLR 771; [2019] NSWCA 234, referred to.
The issue of agency in the present proceedings was not determined in the earlier litigation, in part because in those proceedings the identity of the principals was not determined: [370]-[371]. No estoppel therefore arises: [372]. The agency relationship was not established by the evidence in the present proceedings as ALF did not establish that it (as distinct from a related company) incurred costs or derived revenue in connection with the business on Lot 2: [377].
In relation to Issue 6 (special value):
(Per Basten JA, Leeming JA agreeing at [417], and Macfarlan JA):
The primary judge expressly applied the language of s 57 of the JTC Act and did not apply the Bronzel test in preference: [166]-[168], [380]. Further, the primary judge could not be criticised for assuming the continued relevance of Bronzel: [381] (Macfarlan JA). ALF failed to establish relevant use, as ALF did not use the land itself and its "agency claim" was rejected: [169], [383].
Bronzel v State Planning Authority (1979) 21 SASR 513; Roads and Traffic Authority of NSW v Hurstville City Council [2001] NSWCA 11; (2001) 112 LGERA 223, referred to.