Allandale Blue Metal Pty Ltd v Roads and Maritime Services

[This Headnote is not to be read as part of the judgment] This judgment relates to applications for leave to appeal from two interlocutory decisions in the Land and Environment Court: a decision by Biscoe J in November 2011 to state a separate question for determination prior to the hearing of the proceedings; and a decision by Sheahan J in March 2012, answering the separate question favourably to Roads and Maritime Services. The proceedings in the Land and Environment Court relate to an application for the determination of compensation payable to Allandale Blue Metal in respect of land acquired by Roads and Maritime Services for the purpose of construction of an expressway in the Hunter Valley. The separate question answered by Sheahan J was as to the ambit of a development consent granted in 1979 for the conduct of quarry operations on land adjacent to the acquired land that was also owned by Allandale. The issue was as to whether, properly construed, the development consent permitted the conduct of quarrying operations in respect of an indeterminate area over the whole of two particular portions of land (as Allandale contended) or only over a smaller area identified by a circle on a plan enclosed with the original development application (as Roads and Maritime Services contended). Allandale had waited until after the determination of the separate question before seeking leave to appeal from the decision of Biscoe J and therefore an extension of time for the filing of the Summons was sought in relation to the application for leave to appeal related to that decision. A much shorter extension of time was necessary, and sought, for the filing of the Summons in relation to the application for leave to appeal from the decision of Sheahan J (the delay in relation to that application being due to a different reason). The applications for extension of time and for leave to appeal were heard concurrently with the appeals. Decision of Biscoe J Held: (1) by Meagher and Ward JJA (at [39], [82]) (Macfarlan JA dissenting at [20]) that the application for an extension of time for the filing of the application for leave to appeal from the decision of Biscoe J should be refused. (2) by Macfarlan JA (Meagher JA not deciding) that Biscoe J erred in law in ordering the determination of separate questions on the basis that the determination will not be relevant at the final hearing as to the assessment of market value of the acquired land and no saving in time and expense was likely to result from the separate question order ([17]-[18]) but that the order for separate determination should not be set aside ([20], [35]). (3) (obiter) by Ward JA that the exercise of discretion to state a separate question for determination did not miscarry and was not plainly wrong ([144], [151]). Decision of Sheahan J Held: (1) by the Court that an extension of time for the filing of the application for leave to appeal from the decision of Sheahan J should be granted and that leave to appeal from that decision should be granted (Macfarlan JA [20],[36], Meagher JA [40], Ward JA [77]). (2) by Meagher and Ward JJA that Sheahan J did not err in answering the stated question in the affirmative (Meagher JA [41], Ward JA [201]) and that reference might permissibly be made to the development application and documents accompanying it (in particular, the "Indicative Plan") when construing the development consent to identify (Meagher JA at [55]) or to resolve the ambiguity as to (Ward JA at [201]) the area referred to in the development consent in respect of which quarrying was approved. (3) by Macfarlan JA, dissenting, that the separate question as to whether consent to quarrying is limited by the terms of the development application should be answered in the negative and that Sheahan J erred in law in concluding that the consent letter standing alone was not capable of proper construction ([34]).

Judgment 1MACFARLAN JA: On 12 February 2010, the respondent, Roads and Maritime Services, compulsorily acquired the interest of Allandale Blue Metal Pty Ltd, the applicant, in part of land at Allandale in the Hunter Valley of which it is the registered proprietor. The land was acquired for the purpose of construction of the Hunter Expressway. 2Being dissatisfied with the compensation assessed by the Valuer-General, the applicant commenced Class 3 proceedings in the Land and Environment Court seeking a court determination of the compensation payable to it under the Land Acquisition (Just Terms Compensation) Act, 1991 ("the Act"). One of the matters to which regard must be had in determining the amount of the compensation is the market value of the acquired land at the date of acquisition (s 55(a) of the Act). Another is: "(f) any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired". 3In the interlocutory stages of the proceedings, an issue emerged between the parties as to the ambit of a Development Consent dated 8 May 1979 relating to land of the applicant, it being argued that the extent of the applicant's rights under it is relevant to the amount of compensation to which it is entitled. The Consent was issued by the local authority, the Greater Cessnock City Council, for the conduct of quarry operations 4The applicant contended that, on its proper construction, the Development Consent applied to the whole of Portions 177 and 198 owned by the applicant; whereas the respondent contended that, in construing the Development Consent, recourse to the Development Application was permitted and from that it was clear that the grant of approval was limited to the conduct of quarry operations on a much smaller area, identified by a circle on a plan enclosed with the Development Application. As senior counsel for the applicant informed the Court that the acquired land did not form part of Portions 177 and 198 (Transcript p 17), the Development Consent is presumably only relevant to the impact of the acquisition of the land and construction of the Expressway on the value of the land retained by the applicant (see s 55(f) referred to in [2] above). 5By judgment of 28 November 2011, Biscoe J ordered that the ambit of the Development Consent (together with its validity, which later ceased to be in issue) be determined separately and prior to the principal hearing of the proceedings ([2011] NSWLEC 242). By judgment of 21 March 2012, Sheahan J determined that issue favourably to the respondent ([2012] NSWLEC 57). 6By Summons dated 20 April 2012, the applicant seeks leave to appeal to this Court from both decisions. Leave is required because the decisions are interlocutory (Land and Environment Court Act 1979 ("LEC Act") s 57(4)(d)). If leave is granted, an appeal is available only in respect of a question of law (ibid s 57(1)). As the applicant waited until after the decision of Sheahan J before seeking leave to appeal from the decision of Biscoe J, it needs, and seeks, an extension of time for the filing of its Summons, so far as it relates to the decision of Biscoe J.

THE DECISION OF BISCOE J 7Biscoe J referred as follows to the respondent's argument in support of its application for the issue of construction to be determined separately: "The respondent argues that if it is correct in its construction and the existing development consent is limited to the area of the circle, then the applicant would need a new development consent to quarry outside that area and within the acquired land; and in that event the respondent would need to call expert evidence relating to ecology, rivers and (consequently) surveying, all aimed at establishing that such a development consent would not, or would be unlikely to be granted. If, however, the respondent is correct in its construction, the cost of that expert evidence would be avoided and there would be a substantial saving in costs and time at the hearing" (Judgment [5]). 8His Honour went on to say: "It seems that the proposed preliminary questions would otherwise be ventilated at the final hearing as steps in the inquiry into market value but only after substantial costs had been expended which the respondent does not propose to expend if they are answered in the negative before the final hearing date are fixed" ([8]). 9His Honour took the view that in these circumstances the separate determination sought by the respondent "would have the prospect of substantially narrowing the field of controversy between the parties with the consequence that there would likely be a significant saving of costs" (at [12]). 10At the hearing before this Court, it was common ground between the parties that strong reasons, such as an anticipated significant saving in time and expense in relation to the final hearing, needed to be shown to justify departure from the usual rule that all issues in a proceeding are to be determined at the one time (see for example Tallglen Pty Ltd v TV Holdings Pty Ltd (1996) 22 ACSR 130 at 141 - 2). 11The applicant contended on appeal that the proper construction of the Development Consent will not be a relevant issue at the final hearing at first instance and that its prior determination will not therefore reduce the ambit of that hearing. This was so, it submitted, because the market value of the acquired and retained land on the date of acquisition will be considered, in accordance with established law and s 56(1) of the Act, by having regard to what a hypothetical willing but not anxious buyer would have paid for the land "to a vendor willing to sell it for a fair price but not desirous to sell" (Spencer v The Commonwealth (1907) 5 CLR 418 at 432), that assessment to be take account of all advantages and potentialities of the land known at the date of acquisition (Turner v Minister of Public Instruction [1956] HCA 7; 95 CLR 245 at 268). It further argued, correctly in my view, that because there was no judicial determination prior to the acquisition date of the proper construction of the Development Consent, the Court will have to make an assessment at the final hearing of what the hypothetical purchaser and seller would have thought about the ambit of the Development Consent, based on their own reading of it or on advice given to them. What cannot be done is to impute to the hypothetical parties knowledge at the date of the acquisition of the Court's subsequent determination of the proper construction of the Development Consent. I note in this regard that the respondent eschewed any assertion that evidence of a court determination after the date of acquisition, of the ambit of the Development Consent would be admissible to "confirm a foresight" ("Additional Submissions" dated 11 December 2012 [7]; compare Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 at 558 and Minister Administering Crown Lands Act v Deerubbin Local Aboriginal Land Council (No 2) [2001] NSWCA 28; 50 NSWLR 665 at [69] - [71]). 12The respondent effectively confined its submissions to one that the proper construction of the Development Consent, as determined at the separate hearing, will be relevant at the final first instance hearing by reason of paragraph (c) of the definition of "market value" in s 56 of the Act. In this regard, senior counsel for the respondent appeared to accept that his support for the separate hearing order was dependent on the success of his submission concerning that paragraph (Transcript p 42, line 8). 13That definition of "market value" is in the following terms: "(1) In this Act: market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid): (a) any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and (b) any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law". 14The respondent argued that, by reason of (c), use prior to the date of acquisition of any part of the land contrary to the conditions of the Development Consent would have affected its market value and that it was therefore necessary to know what was the objectively correct meaning of the Development Consent, even if that had not been known at the date of acquisition. 15The difficulty with this argument is that the respondent was unable to identify any way in which use of the land, prior to the date of acquisition, without necessary development consent might, on the facts of this case, have affected its market value at the date of acquisition. It did not, for example, suggest that there had been an unlawful use in the past which had given rise to existing use rights in the applicant, or that any such unlawful use had resulted in improvements to the land that had increased its value. 16The respondent further argued that "use" for the purposes of s 56(1)(c) included future use. In my view this argument conflicts with the language of the provision and should be rejected. If a reference to future use had been intended, words such as "intended use" or proposed use" would have to have been used. As it stands, the provision refers to an actual use that has caused an increase in the value of the land. 17In these circumstances, the respondent's submission that a post-acquisition judicial determination of the proper construction of the Development Consent will, by reason of s 56(1)(c), be relevant at the final hearing as to the assessment of market value of the acquired land must be rejected. This being the basis upon which it was contended to be relevant, it follows that it must be concluded that determination will not be relevant and no saving in time and expense was likely to result from the separate question order. (Neither party suggested that the inclusion in the application of the subsequently not-pressed question concerning the validity of the Development Consent was of any present significance). 18The consequence is that I consider, with respect, that Biscoe J erred in law in ordering the determination of separate questions. I note that it does not seem that his Honour had the benefit of arguments that were as focussed as those that ultimately came to be put on appeal. 19I turn then to the application for extension of time to seek leave to appeal. If a party seeks to challenge an order for the determination of separate questions, it should ordinarily do so before delay and expense is incurred in answering those questions. As the applicant did not seek leave to appeal until the questions were answered adversely to it, it seems that the applicant made a tactical decision to delay its application. 20This would ordinarily result in refusal of the application. However, as I differ from Sheahan J's view as to the ambit of the Development Consent (see [34] below) and as that issue will not arise on any appeal from the final judgment in the proceedings (because it will not be relevant to the disposition of the proceedings), leave should be granted to enable it to be corrected, in case the Consent still has some potential operation in relation to the applicant's retained land. For the same reasons, I would not set aside Biscoe J's order for separate determination, even though I consider it to have been erroneous.

THE JUDGMENT OF SHEAHAN J 21The presently relevant parts of the Council's letter of consent of 8 May 1979 are as follows: "Dear Sir, Development Application 118/679/23 For a Blue Metal Quarry on Portions 177 and 198, Parish of Allandale Further to the above application it is advised that development consent is granted subject to the following conditions: 1. Overburden be placed so as to form a permanent buffer between the operation and the nearest residents. This should be dressed with top soil and grassed. 2. Dams should be placed on creeks or gullies to act as silt traps and prevent siltation of creeks on neighbouring land. 3. Large areas of clay material should not be permitted to remain exposed, but should be dressed with top soil and grassed. 4. All buildings should be of dark green or earth colours. 5. Closet accommodation shall be provided for at the rate laid down by Ordinance 44. A septic tank shall be installed for the on-site treatment of sewage. 6. Waste material arising from the operations shall be disposed of to the satisfaction of the City Health Surveyor. 7. The applicant shall consult with the Soil Conservation Service and prepare a plan satisfactory to the Service for the control of erosion and for the restoration of quarried areas. The applicant shall adhere to the plan to the satisfaction of the Mines Department, Soil Conservation Service and Council. This condition shall cover the whole of the site including the provision of access roads. 8. The applicant shall retain ownership of all land within 1 kilometre of the quarry whilst the quarry is in operation. 9. Council will not permit the subdivision of land within the 1 kilometre area whilst the quarry is in operation. 10. The majority of timber in the paddock to the North East of the quarry shall be retained to act as a buffer. 11. That the applicants shall provide maintenance materials from the quarry suitable for: (a) The maintenance of road shoulders; and (b) The repair of isolated pavement failures at the following sections of the road. (i) Lovedale Harpers Hill Road between the quarry entrance and the New England Highway at Harpers Hill. (ii) Weston Sawyers Gully Road between the junction of Weston Sawyers Gully Road and Old Maitland Road and a point 2.3 kilometres toward Weston. Council agrees that the use of such materials will be made where it can be responsibly determined that the deterioration of the said roads was caused by haulage of materials from the quarry. 12. The applicant shall provide base coarse material for the construction of Majors Lane between the quarry access road and the junction of Majors Lane with Old Maitland Road. The depth of material shall be 100mm consolidated spread over the whole of the road formation. In both conditions 11 and 12 above the applicant shall only be required to supply and load the materials at the quarry and shall not be responsible for the haulage of materials to the work site. This approval relates to development or land use approval only and before any work is commenced in connection with any building it will be necessary for a building application to be lodged with, and approved by Council. The premises must also comply with the requirements of Council's Health Department". 22The documents comprising the Development Application are described in [22] to [36] of Sheahan J's Judgment. It is unnecessary to repeat what his Honour says there, other than to note that his Honour indicated that the applicant's total holding (the whole or part of which was leased by it to a related entity) comprised close to 1,000 acres, that the land referred to in the letter of Development Consent of 8 May 1979 (Portions 177 and 198) comprised 540 acres of that land and that the circled, quarrying area shown on the plan accompanying the Development Application comprised (apparently with a small area for stockpiling and plant) about 99 acres of those Portions. 23Sheahan J concluded that the Development Consent permitted quarrying only within the circled area labelled "Proposed Quarrying Area" on the plan. The essence of his Honour's reasoning was as follows: "109 The consent, standing alone, is not capable of proper construction as to some of its necessary and important details. The most crucial details absent are the size and location of the quarry itself in relation to the land portions nominated in the DA as the location of the proposed development. ... 112 Necessary and important detail in the present case was and is contained in those DA documents, which stand as a 'single package' pursuant to the requirements of the [Planning Scheme Ordinance], and all of them must be taken to be incorporated in the consent, including the marked-up plan, both 'expressly', and, to cure ambiguity, 'by necessary implication'". 24Both parties to the proceedings in this Court approached the determination of this issue on the basis that, in discerning the ambit of the Development Consent, attention must be confined to the Council's letter of consent unless other documents (in this case the Development Application and accompanying documents) were incorporated in the letter, expressly or by implication. Reference in the letter of consent to the Development Application could not, alone, amount to incorporation of the latter into the Development Consent (see generally Ryde Municipal Council v Royal Ryde Homes (1970) 91 WN (NSW) 440: 19 LGRA 321, Auburn Municipal Council v Szabo (1971) 67 LGRA 427, Alcoa Australia Rolled Products Pty Ltd v Western Aluminium Pty Ltd [2006] NSWCA 273 and other authorities to which the primary judge referred in [51] to [89]). 25The principles are consistent with, and give effect to, the approach to construction that Spigelman CJ identified in Winn v Director National Parks and Wildlife (2001) 130 LGERA 508 at [4]: "A public document, such as a development consent, constitutes a unilateral act on the part of the consent authority expressed in a formal manner, required and intended to operate in accordance with its own terms. It has, as Stein JA points out, an inherent quality that it will be used to the benefit of subsequent owners and occupiers. It is also a document intended to be relied upon by many persons dealing with the original grantee, or assignees of the grantee, in such contexts as the provision of security. In some respects it is equivalent to a document of title. It must be construed in accordance with its enduring functions". 26In light of these principles and the absence of any express incorporation of the Development Application documents in the letter of consent, the question for determination in the present case is whether the letter of consent is complete on its face, or whether it is ambiguous or otherwise such that a reader of it, or a person acquainted with the physical features of the land, would conclude that recourse to other documents such as the Development Application documents is necessary to give it a sensible meaning. 27I turn then to comment on the terms of the letter of consent of 8 May 1979 (see [21] above). 28The heading refers to the Development Application and identifies it by number but, in accordance with the principles referred to above, this does not constitute incorporation of the Application in the Consent. The heading to the letter identifies the land to which the Application, and therefore the Consent, relates (Portions 177 and 198, Parish of Allandale) and it identifies the purpose for which the land is sought to be used, namely "for a Blue Metal Quarry". These are the basic integers of a consent: what can be done and where. Contrary to Sheahan J's view, I consider these to be sufficiently stated. 29The first paragraph of the letter refers to the Application but, again, this does not amount to incorporation of the Application in the Consent. The Consent stated to be granted plainly relates to the Application described in the heading. 30Many of the Conditions stated in the letter refer to the quarry and its operation, and assume that the quarry will have a specific location which does not necessarily comprise the whole of the land for which the consent to quarrying operations is granted. This does not in my view render the letter ambiguous and result in the implied incorporation of the application documents in the consent for the purpose of resolving the ambiguity. There is nothing surprising or unusual about the contemplation evident in the letter that the whole of the land that is the subject of the Consent might not at all times be used for the permitted use and that some might not be used at all for that purpose. Unsurprisingly, the locality of quarrying operations on the land might expand or move over time. When the operations expand or move within Portions 177 and 198, they will remain covered by the Development Consent. 31The respondent did not demonstrate that Conditions 8 and 9, referring to a one kilometre distance and area around the quarry, were inconsistent with Development Consent being granted in relation to the whole of Portions 177 and 198. It was not, for example, shown that in 1979 there was land within one kilometre of Portions 177 and 198 which was not in the ownership of the applicant for consent. Even if there were such land, the effect of Condition 8 would be to limit the locations within Portions 177 and 198 where the quarry might be sited. That would not in my view mean that the consent letter was ambiguous and require recourse to the Development Application documents, thus impliedly incorporating those documents into the Development Consent. Conditions 8 and 9 were, on their face, perfectly comprehensible. 32Similarly, Condition 10 was not shown to require recourse to the Development Application documents for it to be understood. As appears from the plan accompanying the Development Application, the paddock to the north-east of the circle describing the "proposed quarrying area" could also be regarded as being to the north-east of Portions 177 and 198 as a whole. Thus the Condition would not be ambiguous to someone who was familiar with the physical features of the land. 33I do not consider there to be any other parts of the letter of 8 May 1979 that arguably constitute an implied incorporation of the Development Application documents into the Development Consent. 34It follows that I respectfully disagree with Sheahan J's conclusion that the consent letter of 8 May 1979, standing alone, "is not capable of proper construction" because "crucial details" such as the size and location of the quarry are not identified in the letter (Judgment [109]). Being a decision concerning the construction of documents, this conclusion involved an error or law. I would accordingly answer the separate question that is relevant on the appeal (as to whether the Consent to quarrying is limited by the terms of the Development Application) in the negative.

ORDERS 35The reason I do not consider that the appeal against the decision of Biscoe J should be allowed and his decision set aside is, in essence, that the separate question he ordered to be determined was in fact subsequently answered (in my view erroneously) (see [20] above). As the respondent's application to Biscoe J should have failed, it should pay the costs of the application. It should also pay the applicant's costs of the application for leave to appeal and appeal against that decision. No special order should be made in relation to the application for extension of time for leave to appeal as the costs referable to it can be assumed to be insignificant in amount. 36For the reasons I have given, I propose the following orders: (1) Extend to 30 April 2012 the time for the applicant to file its application for leave to appeal against the judgment of Biscoe J of 28 November 2011. (2) Grant leave to appeal against the decisions of Biscoe J of 28 November 2011 and of Sheahan J of 21 March 2012. (3) Direct that within 28 days of the date of this Judgment, the applicant file and serve Notices to Appeal in relation to those decisions in the form of the drafts provided to the Court. (4) Dismiss the appeal from the decision of Biscoe J. (5) Allow the appeal from the decision of Sheahan J. (6) Set aside Order 1 made by Sheahan J on 21 March 2012 and entered on 18 April 2012. (7) Answer the following question in the negative: "Whether Development Consent No 118/679/23 granted by Cessnock City Council on 8 May 1979 for the Allandale Quarry only permits quarrying within the area of the circle labelled "proposed quarrying area" on the Indicative Plan for Quarry Products Pty Ltd Development Application dated 26 March 1979". (8) Order the respondent to pay the applicant's costs of the applications for leave to appeal and of the appeals. (9) Grant the respondent a certificate under the Suitors' Fund Act 1951, if qualified. 37MEAGHER JA: Allandale seeks leave to appeal from two interlocutory decisions given in proceedings in the Land and Environment Court. In those proceedings, it seeks an order as to the amount of compensation payable consequent upon the compulsory acquisition by the respondent of land required for the construction of the Hunter Expressway. By the first of those decisions, Biscoe J stated a question for separate determination. By the second, Sheahan J answered the first part of that separate question in the affirmative. That question was whether the development consent granted by Cessnock City Council on 8 May 1979, for what was described as the Allandale Quarry, only permitted quarrying within the area of the circle labelled "Proposed Quarrying Area" on the Indicative Plan which accompanied the relevant Development Application. The other part of the question ordered for separate determination was not pressed before or answered by Sheahan J. 38Before Biscoe J, Allandale opposed the making of orders for separate determination on bases which included that there was little or no utility in deciding the question posed. That was so, it was argued, because ultimately the valuation issues in the proceedings would turn on what would have been paid for the relevant land assuming hypothetical willing but not anxious buyers and sellers not having the benefit of any judicial determination as to whether the development approval limited quarrying operations to that area. Biscoe J made the order for separate questions on 28 November 2011. The separate question was then argued in February 2012 and decided by Sheahan J on 21 March 2012. Allandale did not seek leave to appeal from the decision of Biscoe J until after the decision of Sheahan J had been delivered, and then by applications for leave to appeal from each decision which required extensions of the time for the making of each application. 39In relation to the application for leave to appeal from the decision of Biscoe J, I agree with the observations of Ward JA at [80]-[82]. Where Allandale decided to "take its chances" with respect to the determination of the separate questions and in doing so committed both parties to incurring the costs of that argument, the application for an extension of the time to seek leave to appeal from Biscoe J's decision should be refused. 40As the respondent does not oppose the grant of leave to appeal from the decision of Sheahan J, or the extension of time for the making of that application, and as the determination of that question has possible significance in the underlying proceedings (for the reason referred to by Ward JA at [139]), the extension of time for the making of the application for leave should be granted, as should leave to appeal. 41In my view, Sheahan J did not err in answering the separate question (being that part which was pressed) in the affirmative. The answer to that question depended on the construction of the document constituting the development consent, taking into account any other document or evidence to which reference legitimately could be made for that purpose. That document is the letter from Greater Cessnock City Council to Quarry Products Pty Ltd dated 8 May 1979. The relevant parts of that letter are set out by Macfarlan JA at [21]. 42The relevant principles are, in some respects, more easily stated than applied. The task is to construe the document constituting the consent mindful of the fact that the approval is a unilateral act of the consent authority which has an enduring function. The consent is not the result of a bargaining process between two or more parties, and is not personal to the applicant but enures for the benefit of subsequent owners and occupiers. Its meaning must be determined objectively, having regard to these matters which do not focus on the circumstances in which the consent was given by reference to what was known both to the applicant and the consent authority. To that extent, the principles of construction appropriate to contracts, which provide that in the case of ambiguity or uncertainty reference may be made to surrounding circumstances known to the relevant parties, do not apply: cf Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337 at 352; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40], [41]. 43The extrinsic evidence to which reference legitimately may be made when construing a public document, such as a development consent, is more limited. Reference may be made to documents other than the consent itself if those documents, or parts of them, are incorporated into the consent expressly or by necessary implication: see generally, Ryde Municipal Council v The Royal Ryde Homes (1970) 91 WN (NSW) 440 at 443; Auburn Municipal Council v Szabo (1971) 67 LGRA 427 at 433-434; and the decisions of this Court in Sydney Serviced Apartments Pty Ltd v North Sydney Municipal Council (No 2) (1993) 78 LGERA 404 at 407-408; House of Peace Pty Ltd v Bankstown City Council [2000] NSWCA 44; 48 NSWLR 498 at [23], Winn v Director-General of National Parks & Wildlife [2001] NSWCA 17; 130 LGERA 508 at [2], [4], [199]; and Alcoa Australia Rolled Products Pty Ltd v Weston Aluminium Pty Ltd [2006] NSWCA 273; 148 LGERA 439 at [1], [3], [35]-[36]. See also Adelaide Corporation Pty Ltd v City of Charles Sturt [2008] SASC 260; 162 LGERA 106 at [33], [49], [50]. 44Evidence may also be led to identify a thing or place referred to in the consent: Slough Estates Ltd v Slough Borough Council (No 2) [1971] AC 958 at 962; Wyre Forest District Council v Secretary of State for the Environment [1990] 2 AC 357 at 370-371; Leichhardt Municipal Council v Terminals Pty Ltd (1970) 21 LGRA 44 at 50-51; Sydney Serviced Apartments Pty Ltd at 407. That evidence is not led to vary the consent but to identify the thing referred to in it. Evidence as to the nature or physical features of the land or site may also be admissible for that purpose: Parramatta City Council v Shell Co of Australia Ltd (1972) 2 NSWLR 632 at 637. 45A document which is attached to the consent or otherwise referred to in it for the purpose of identifying or describing something dealt with in the consent will, for that reason, be expressly incorporated in it: Szabo at 434; Sydney Serviced Apartments Pty Ltd at 408. However, the mere reference to a document, such as a development application, is usually not sufficient to constitute express incorporation for this purpose. In each case, whether the reference is sufficient will depend upon the reason for the reference as appears from the consent itself: Sydney Serviced Apartments Pty Ltd at 408; Alcoa at [39], [40]. 46What is sufficient to constitute incorporation, by necessary implication, for the purpose of these principles is less clear. If the consent in terms does no more than approve the application, it will be necessary to go to the application at least to identify the subject matter of the consent: Royal Ryde Homes at 442-443; Szabo at 434; Winn at [5], [199]. A consent in those terms would not necessarily have the effect of incorporating all of the matters dealt with in the application. For example, general matters of fact or assertions of intention furnished or made for the purpose of informing the consent authority of the nature of the development, are not likely to be incorporated: Royal Ryde Homes at 442-443. In Winn, Stein J (with whom Spigelman CJ and Powell JA agreed on this point) rejected an argument that reference could be made to a letter to the consent authority which had accompanied the development application, on the basis that it was not necessary to have regard to the letter in order to resolve any uncertainty as to what the Council had approved. Specifically, that question was whether consents which authorised a mineral sands mine also authorised re-mining or deep mining. It was held that the consents and their conditions sufficiently delineated what the Council had approved: Winn at [5], [108], [199]-[202]. The argument for incorporation of the development application was not rejected on the basis that it was not permissible to refer to it even if the consent and conditions did not sufficiently delineate what had been approved. 47In Stebbins v Lismore City Council (1988) 64 LGRA 132, the issue was whether the consent to a development application for a motel extension included the construction of an entrance or driveway from the motel to the new Bruxner Highway. This Court held (at 135) that the documents constituting the consent included a plan which had accompanied the development application and been marked up and returned with the notice advising of consent. The Court also considered the position on the basis that the notice alone constituted the consent. In that circumstance, the Court said (at 136) that recourse could be had to the application and its accompanying plan because it was not possible to gain a full appreciation of the terms of the approval from the notice of consent alone. In other words, it was permissible to look at the application and its accompanying plans if that was necessary to understand what had been approved. 48A similar exposition of the circumstances in which reference may be made to documents which are not expressly incorporated in the consent, is given in Oakden Shopping Centre Pty Ltd v City of Port Adelaide Enfield [2004] SASC 373; 137 LGERA 189 in the judgment of Doyle CJ (with whom Duggan and Anderson JJ agreed). In summarising the principles by reference to which a court should interpret a development consent, Doyle CJ said (at [45]) that it was usually the case that a consent "will be meaningless" without reference to the plans and proposals submitted and, that being the position, it "must be permissible" when deciding the "meaning, scope and effect of a development authorisation, to refer to the plans or other documents constituting the proposal submitted for authorisation". See also Adelaide Corporation Pty Ltd at [33], [49], [50]. 49It is with these principles in mind that the terms of the letter dated 8 May 1979 advising of development consent must be considered. In its introductory words, the letter says that development consent has been granted "further to the above application" and subject to 12 numbered conditions. The second paragraph, appearing after Condition 12, says that the consent relates to "development or land use approval only", and not approval of any building work to be undertaken as part of that development or use. The heading to the letter identifies the land which was the subject of the application and contains a general description of the use which has been approved. The land is described as Portions 177 and 198, Parish of Allandale. The use is "for a Blue Metal Quarry". What the heading and introductory words do not expressly address is whether the consent permits quarrying operations over the whole of the land or only over some part or parts of it. 50Nor do Conditions 1 to 7 expressly address that question. They contain references to the "operation" (Condition 1), "operations" (Condition 6) and "quarried areas" (Condition 7). Whilst some of these conditions are more consistent with the quarrying operations being confined to a specific area, they do not say that in express terms. Condition 1 refers to the "nearest residents". That is better understood as a reference to the "nearest residence". The obligation imposed is to form a "permanent buffer" between the "operation" and that residence. The language is more consistent with the reference being to a buffer between two places, each of which was specifically identifiable at the time the consent was given. That could not be the position in relation to the "nearest residence", if the "operation" described any area on any part of the site in which quarrying operations were at some time being conducted. There is also an indication in Condition 7 that the "quarried areas" which were to be restored would not extend over "the whole of the site". Otherwise, it may not have been necessary to state expressly that the soil conservation plan should cover "the whole of the site", meaning the whole of Portions 177 and 198. 51Conditions 8 to 12 contain a number of references to "the quarry". In Conditions 8 and 9 that phrase is used to indicate a period of time, namely "whilst the quarry is in operation". It is also used to identify an area. During the same period of time, Condition 8 requires that the applicant retain ownership of all land "within one kilometre of the quarry". Condition 9 records that during the same period the Council will not permit the subdivision of land within "the one kilometre area". Condition 10 requires that the applicant retain the majority of the timber in the "paddock to the North East of the quarry". Conditions 11 and 12 contain references to the "quarry entrance" and the "quarry access road", in each case describing a specific place or thing. 52A number of these references to "the quarry" assume that there will be an area capable of answering that description at all times during the period that quarry operations are conducted. The question of construction which arises is whether those references are to a specifically designated area of Portions 177 and 198 or to the area within that land on which, at any particular time, quarrying operations are being conducted. 53The "one kilometre area" referred to in Condition 9 is the same area as is described in Condition 8. The use of the definite article in Condition 9 to describe that area suggests that the reference is to a specific and definite area for the whole of the relevant period. That meaning of the expression "the quarry" would give Conditions 8 and 9 a clear and certain operation. If the position was otherwise and the expression described whatever area was being used for quarrying operations from time to time, the obligation imposed by Condition 8 would apply to different land at different points in time depending upon the area or areas of the site on which quarrying operations were being conducted. For the same reason, the undertaking of the Council in Condition 9 would apply to different land at different points in time over that same period. If "the quarry" is read as referring to whatever area within the site, consistently with the satisfaction of any other relevant conditions, was being used for quarrying operations, Conditions 8 and 9 could at some time during the life of the quarry apply to all lands outside but within one kilometre of Portions 177 and 198. If it had been intended that they apply to that area of land, different language could and would have been used. 54The obligation in Condition 10 is to retain timber by reference to its location in a paddock which is to the "North East of the quarry". The reference to a paddock would ordinarily be understood as to an enclosed piece of land. In Condition 10 that enclosed land is identified by its constant location in relation to an area described as "the quarry". The obligation is not in terms to retain timber in a paddock which may at one time be to the north east, and at others to the north or east of "the quarry" depending upon where on the site the quarrying operations are being conducted from time to time. The use of the expression "the quarry" in Condition 10 is only consistent with it being a reference to a specifically designated area and not to an area which may be anywhere on the site and expand or move over the life of quarrying operations. 55These considerations lead me to conclude that, properly understood, the references to the "quarry" in the consent, especially in Conditions 8, 9 and 10, are to a specifically designated and definite area which is not the whole of the site. The location and size of that area are not described in, and cannot otherwise be identified from, the letter of consent. For that reason, it is necessary to go to the application for development approval in order to identify the area referred to. That is permissible in accordance with the principles referred to above because by using that expression without identifying the area, the consent must be taken necessarily to incorporate the development application for the purpose of identifying that area. 56When reference is made to the development application, the heading "General information" directs the reader to the "attached letter" which is the letter of Quarry Products Pty Ltd to Greater Cessnock City Council dated 26 March 1979. The Indicative Plan is in turn referred to in that letter as the "attached map". The circled area on that map containing the words "Proposed Quarrying Area" is described on page 2 of the letter as follows: "The proposed maximum area involved in quarrying activities is 40 hectares as indicated in the diagram." and the letter concludes by requesting that the Council "give the proposal" its early and favourable consideration. 57Allandale put various arguments as to why reference to the development application and the attached letter of 26 March 1979 and plan, did not have the consequence that the consent to a quarry was to be understood as a consent to a quarry within that designated area. For the reasons which Ward JA gives (esp at [193]-[200]), those arguments should be rejected. 58Sheahan J did not err in answering the stated question in the affirmative. I agree with the orders proposed by Ward JA. 59WARD JA: Allandale Blue Metal Pty Ltd seeks both an extension of time and leave to appeal from two interlocutory decisions in the Land and Environment Court. The first is the decision of Biscoe J on 28 November 2011, exercising the power pursuant to Rule 28.2 of the Uniform Civil Procedures Rules 2005 (NSW) to state a separate question for determination prior to the hearing of the proceedings. The second is the subsequent decision of Sheahan J on 21 March 2012, answering the first part of that separate question in the affirmative (the second part of that question not having been pressed at the hearing before his Honour). By direction of this Court all issues were heard and are to be determined concurrently. Background 60The proceedings in the Land and Environment Court in which the separate question was stated for determination are proceedings in class 3 of its jurisdiction, concerning an appeal by Allandale from the Valuer-General's determination of the compensation payable to it under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) as a consequence of the compulsory acquisition by the respondent (Roads and Maritime Services) on 12 February 2010 of land owned by Allandale in Allandale, NSW. The land so acquired previously formed part (54.6892 ha) of an irregularly shaped eight lot holding with a combined area of 630.78 ha. On part of the overall landholding (part of what I will refer to as lots 177 and 198), an andesite quarry was operated by Allandale's lessee (Quarry Products (Newcastle) Pty Limited) at the relevant time. (Quarry Products was also an applicant for compensation in the Land and Environment Court and had similarly lodged a summons for leave to appeal from the respective decisions but its claim has since been resolved and the dispute in the present proceedings is solely between Allandale and Roads and Maritime Services.) 61The land that was acquired by Roads and Maritime Services (which was outside lots 177 and 198) was acquired for a public purpose, namely the proposed construction of the Hunter Expressway. It forms a road corridor that passes through a number of Allandale's lots. Allandale claims that the effect of the acquisition is that quarrying can no longer occur on areas of residue land adjacent to the road corridor (as a result of the requirement for an offset or buffer from the road corridor to be created over the remaining Allandale land due to the nature of quarrying operations). (Because the acquired land fell outside lots 177 and 198, there was no suggestion that the acquired land could have been used for quarrying at any time under the existing development consent.) 62It is contended by Allandale that the requirement for a buffer from the road corridor means that a significant amount of the andesite resource on Allandale's land will become inaccessible or sterilised (reducing the remaining life of the quarry by about 1¼ years). In Allandale's Points of Claim in the Land and Environment Court proceedings it claims compensation in the sum of $2,706,320 under section 55(a) of the Land Acquisition (Just Terms Compensation) Act on the basis that this is the market value of the acquired land. (It makes a relatively minor claim under s 55(d) of the Act for disturbance.) The Valuer-General determined compensation in the amount of $1,162,919. 63By letter dated 2 March 2011, Allandale's lawyers provided, by way of further details of its claim, an itemised calculation of the market value of the acquired land. That value was arrived at by deducting, from what Allandale contends is the pre-acquisition value of the overall landholding, the after-acquisition value of the remaining land. Allandale's calculations include a reduction in the present value of the royalties from the quarry land on the apparent assumption (as explained by Allandale's lawyers in the March 2011 letter, albeit in relation to Quarry Products' sterilised resource claim which in effect mirrored the quantum of Allandale's market value claim) that there is a reduced life of the quarry due to the inability to access andesite from the buffer required to be adjacent to the acquired land. Roads and Maritime Services points to these calculations as showing that Allandale's claim for compensation is underpinned by the assumption that it is lawfully entitled to have access to andesite resource from the whole of lots 177 and 198 (rather than simply from the area in a circle labelled on the Indicative Plan lodged with the development application as the proposed quarry) and that Allandale's claim presupposes that there is a different market value between land on which quarrying is permissible and land on which quarrying is not permissible. 64The circumstances in which Roads and Maritime Services came to seek an order for the separate determination of a preliminary question are set out in the affidavit affirmed on 24 October 2011 in support of that application by its solicitor, Ms Li. Biscoe J referred to this evidence as being uncontentious for the purpose of the application for separate determination. 65In essence, in the compensation proceedings Roads and Maritime Services wishes to put in issue the assumption that quarrying within the buffer area is permissible under the existing development consent for the quarry (that being a development consent granted in May 1979). In her affidavit, Ms Li refers to advice received from a town planning expert that under the terms of the current development consent quarrying is permitted only within a particular area (described as "the Circle" about 500 metres from the eastern boundary of lot 198) and that a development application would be required to expand the quarry operations beyond that area. Ms Li has also deposed that the respondent's quarry valuer expressed an inability to proceed with the valuation until it was known whether a development application would be needed in relation to the quarry (on the basis that this would affect the question of which "buffers" would apply to the valuation, whether they needed "offsets" and when the "rehabilitation" would occur). 66The position of Roads and Maritime Services (as subsequently recorded by Sheahan J at [3]) is that the area to be quarried cannot be expanded (beyond that permitted by the 1979 development consent) without a further consent "the grant of which could be problematic, given that it would involve 'designated development'". (No allegation of prior unlawful use, as such, has been raised in the Points of Defence filed by Roads and Maritime Services.) 67The reference to the Circle (being the only area within which Roads and Maritime Services says quarrying is permitted under the existing development consent) is a reference to an area marked on a map labelled an "Indicative Plan" that was submitted to Cessnock Council when a development application was lodged in March 1979 for consent to carry on blue metal quarrying operations on portions of two of the lots now owned by Allandale (lots 177 and 198). The development application (which noted the proposed use as including grazing, thus does not appear to have contemplated quarrying across the whole of the land in question) was lodged by Quarry Products Pty Limited (acting with the consent of the then owner), who wrote to the Council by letter dated 26 March 1979 advising, relevantly, that: The quarry operation would initially take place on areas in both portions 198 & 177 above the 60 metre contour level (see attached map). At a later date, extraction would move down to the 40 metre contour level which would allow natural drainage to continue to the existing creeks. ... The proposed maximum area involved in quarrying activities is 40 hectares as indicated in the diagram. Initially, only a small portion of this will be used - starting locations to be dependent on detail test drilling. (my emphasis) 68An appendix to that letter, headed "Environmental Notes", stated that the total area suitable for quarrying was approximately 40 ha of land. 69Marked on the map, labelled "Indicative Plan for Quarry Products Pty Ltd Development Application 26-3-79", is a red circle in which there appear the words "Proposed Quarrying Area" (there is also a smaller red circle with the words "Stockpiling and Plant Area"), consistent with the description in the covering letter. The area identified as the proposed quarrying area straddles part of both lots 177 and 198 across the north/south boundary of those lots. No reference to the map was made in the formal development application itself. 70Development consent was issued by way of letter on 8 May 1979, the reference header of which referred to the development application by number and as being "for a Blue Metal Quarry on Portions 177 and 198, Parish of Allandale". (Allandale relies on this header as indicating that the development consent pertained to the whole of those lots, subject only to the conditions in the letter being satisfied in relation to wherever quarrying was in fact undertaken on those lots.) The May 1979 letter made no reference to the map or indicative plan attached to the March 1979 letter with which the development application was lodged. 71Development consent was granted subject to a number of stated conditions, including (8) that the applicant retain ownership of all land within one kilometre of "the quarry" whilst "the quarry" was in operation and (10) that the majority of the timber "in the paddock to the North East of the quarry" be retained to act as a buffer. The precise location or size of the quarry was not identified in the May 1979 letter (nor was there any restriction expressed as to the maximum area of the quarry), though there are a number of references to 'the quarry', including those in (8) and (10), in terms suggesting it was to be a particular identifiable place. (As indicated, Allandale contends that the development consent permits quarrying anywhere within lots 177 and 198 provided that the stated conditions are satisfied. It also contends that there is no maximum area within those lots beyond which the quarrying occupations cannot extend, noting that the reference to 40 hectares in the accompanying letter was indicative only). 72The land was compulsorily acquired in February 2010 and the Valuer-General's determination of compensation was made in July 2010. In October that year the class 3 proceedings were filed in the Land and Environment Court and, following service of Points of Claim and Points of Defence, Roads and Maritime Services made its application for separate determination of the question relating to the permissible use of the land as a quarry. 73Over the objection of Allandale (and Quarry Products), on 28 November 2011 Biscoe J ordered the separate determination of the following question in advance of the hearing of the proceedings: Whether development consent No 118/679/23 granted by Cessnock City Council on 8 May 1979 for the Allandale Quarry (a) only permits quarrying within the area of the circle labelled "proposed quarrying area" on the Indicative Plan for Quarry Products Pty Ltd development application dated 26 March 1979, or in the alternative, (b) is void for uncertainty. 74There was no application by Allandale (or Quarry Products) for leave to appeal from that decision until after the hearing and determination by Sheahan J of the stated question. Sheahan J in due course answered (a) in the affirmative. As noted earlier, an answer to (b) was not pressed when the application came before Sheahan J for hearing. Allandale then lodged its summons for leave to appeal from both decisions. 75Leave is necessary for the appeals sought to be made by Allandale from the respective decisions, those being interlocutory decisions, pursuant to s 57(4)(d) of the Land and Environment Court Act 1979 (NSW). Appeals from decisions in class 3 proceedings are maintainable only on questions of law (s 57(1)). Extension of time/Leave to Appeal 76An extension of time for the bringing of the applications for leave to appeal is also required in respect of both decisions (though in respect of the decision of Sheahan J only a very short extension is necessary). 77No issue arises as to the extension sought in relation to the decision of Sheahan J (an explanation for the delay has been proffered; it has not been suggested that any prejudice will be suffered by reason of such an extension; and Roads and Maritime Services does not oppose either the extension or the grant of leave, conceding that this is a decision that affects the substantive rights of Allandale). In my opinion, leave should be granted for that extension of time and for the bringing of the appeal itself. 78What Roads and Maritime Services does oppose is the grant of leave in relation to the application for leave to appeal from the earlier decision of Biscoe J (for which application a more significant extension of time is necessary). 79For Allandale, it is submitted that it was not unreasonable for it to delay the approach to this Court until after the determination of the separate question "in part because it remained open to the [Land and Environment] Court to decide that it was inappropriate to answer the question at all" (para [9] of the Applicants' Summary of Argument dated 20 April 2012). It is also submitted that no prejudice is occasioned to Roads and Maritime Services by the delay since Allandale relies on the same essential arguments for both the contention that the question should not have been stated at all and the alternative contention that the question as stated should have been answered "inappropriate to answer" (and therefore the legal issue relied upon to determine the application in relation to the decision of Biscoe J is one that would be before this Court in any event in the challenge to the decision of Sheahan J). 80What the latter submission does not take into account is the fact that, on Allandale's case, the hearing before Sheahan J would not have been necessary at all had the decision to state a separate question been the subject of a timely (and successful) appeal from the earlier decision of Biscoe J. Thus the delay in seeking leave to appeal from the first decision must necessarily have raised the spectre (if Allandale were to be successful in its contention that there should not have been an order for separate determination of the stated question) of unnecessary costs being incurred in the hearing in the meantime of the separate question in accordance with his Honour's orders. This seems to me to be inconsistent with the statutory objective (itself invoked by Allandale in its challenge to the decision of Biscoe J) for the just, quick and cheap resolution of the real issues in dispute mandated by s 56 of the Civil Procedure Act 2005 (NSW)). 81The fact that there was no prompt challenge in respect of the order for separate determination (Allandale instead awaiting the outcome of the separate determination) seems, by inference from the submission in [9(i)] of Allandale's initial Summary of Argument, to have been the product of a forensic decision to see if the answer to the preliminary question were favourable to Allandale's position. I see no reason why Allandale should not be bound by that forensic decision (and now left to its challenge in respect of the ultimate determination of that question). 82I would therefore not grant the extension of time sought for the bringing of the application for leave to appeal from the decision of Biscoe J in circumstances where the explanation proffered for the delay by Allandale is not consistent with the statutory objective under s 56. 83For Roads and Maritime Services it was contended that leave to appeal from Biscoe J's decision should not be granted on the basis that none of the matters raised by Allandale demonstrated that there was any merit in any ground of appeal or that his Honour had failed to consider relevant matters (at best, it was said, the grounds of appeal raised only an arguable basis for appeal - Senior Counsel for Roads and Maritime Services, Mr Tomasetti SC, citing Blackmore v Browne [2011] NSWCA 114 at [18] - [19]) per Campbell JA); and that there is no error that results in substantial injustice since all that followed from his Honour's determination was that there was a determination by Sheahan J of the separate questions (referring to Minogue v Williams (2000) 60 ALD 366). 84In the event that an extension of time were to have been granted for Allandale to bring the application for leave to appeal from both of the decisions (not simply the decision of Sheahan J), then I would have granted leave to appeal in respect of that decision on the basis that there are reasonably arguable grounds of appeal raising issues of principle as to the operation of the statutory compensation regime under the Land Acquisition (Just Terms Compensation) Act. 85As Macfarlan JA takes a different view on the issue of leave (see [20] above) and as I respectfully differ on the question whether Biscoe J erred in making the order for separate determination, I have set out below my reasons on the challenge to Biscoe J's decision had leave been granted for the extension of time to appeal therefrom. 86I turn then to the respective decisions under challenge. (i) Separate determination of preliminary question Legal Principles 87In Idoport Pty Limited v National Australia Bank Limited (15) [2000] NSWSC 1215, Einstein J (at [7]) summarised the applicable principles when considering an application for the separate determination of an issue made under the former Part 31 r 2 of the Supreme Court Rules (those principles being equally applicable to the exercise of discretion under rule 28.2 of the Uniform Civil Procedure Rules: Pioneer Park Pty Limited (in liquidation) v ANZ Banking Group Limited [2005] NSWSC 832; Matrix Film Investment 1 Pty Limited v Alameda Films llc and Warner Brothers Entertainment and Pictures Inc [2007] NSWSC 523). In so doing, his Honour noted, among other things, that the court is enjoined to give effect to the overriding statutory purpose provided for under the applicable court rules and that the court begins with the proposition that it is ordinarily appropriate that all issues in the proceedings should be disposed of at the one time (Tallglen v Pay TV Holdings Pty Limited (1996) 22 ACSR 130). 88One set of circumstances in which his Honour noted that the separate determination of an issue might prove to be an appropriate procedure was "where the resolution of that separate issue will have the effect of resolving the entirety of the litigious controversies or of substantially narrowing the field of litigious controversy" (his Honour there citing CBS Productions Pty Limited v O'Neill [1985] 1 NSWLR 601 at 606 per Kirby P and Dunstan & Simmie & Co Pty Limited [1978] VR 670 at 671 per Young CJ and Jenkinson J). 89Pausing there, it was not suggested in the above cases that it is necessary (for the power to state a separate question to be exercised) that the determination of the separate question be finally dispositive of the litigation or of one or more issues in the litigation; rather, it was contemplated that it might be sufficient if it would substantially narrow the field of litigious controversy (requiring a quantitative assessment to be made). Disposition of a step necessary for the determination of one or more issues in the proceedings might well have the effect in a particular case of substantially narrowing the field of litigious controversy. Thus, while it is submitted for Allandale that, at most, the separate question would resolve a potential step in the determination of the relevant issue in the compensation proceedings, that of itself does not preclude the exercise of the power under Rule 28.2.) 90Einstein J also set out various circumstances in which he considered that the separate determination of an issue would rarely be seen to be an appropriate procedure (to some of which reference was made by Mr Lancaster SC, Senior Counsel for Allandale), those including where there are intertwined issues of fact or law (such that the determination of the separate question would not have any substantial effect on the width of the field of litigious controversy or the prospect of the settlement of the balance of the litigation) and where there is a possibility that the resolution of the separate issue will not finally determine the issue but merely result in an appeal from that decision in relation to that separate issue creating what his Honour referred to as a multiplicity of proceedings, interruptions to the court and undesirable fragmentation of the proceedings. 91In various authorities, caution has been advocated in the exercise of such a power (such as Perre v Appand Pty Ltd (1999) 198 CLR 180 at [436] per Callinan J; Allstate Explorations NL v Beaconsfield Gold NL [1999] NSWSC 832 at [24] per Santow J, as his Honour then was; Tepko Pty Ltd v Water Board (2001) 206 CLR 1 at [168] per Kirby and Callinan JJ; Strathfield Municipal Council v Poynting (2001) 116 LGERA 319 at [112] - [113] per Young CJ in Eq, as his Honour then was). In Idoport, Einstein J noted the reason for such caution in the following passage: The experience of courts suggests that the separation of proceedings often does not result in the quicker and cheaper resolution of proceedings as anticipated, but often has the reverse effect, merely causing added delay and expense to the resolution of the litigation. Thus, before an issue is to be separately determined, it must be possible to clearly see that it will facilitate the quicker and cheaper resolution of the proceedings [his Honour there citing Tallglen v Pay TV Holdings Pty Limited; Parramatta Stadium Trust v Civil and Civic Pty Ltd (unreported, Supreme Court of NSW, 27 August 1996, per Hunter J) and Century Medical v THLD [2000] NSWSC 5 (unreported, Supreme Court of NSW, 3 February 2000, per Rolfe J)]. (my emphasis) 92However, it has also been recognised that if the separate determination of particular discrete issues may achieve economies in time and expense in the resolution of the proceedings or obviate the necessity for a trial on all issues then it may be both appropriate and desirable for there to be such an order (Flore v NSW Department of Education and Training [2006] NSWSC 1227 at [32]; Street & 7 ors v Luna Park Sydney Pty Limited & 3 ors [2007] NSWSC 697 at [6]; Stewart v Ronalds [2009] NSWSC 455; Hubertus Schuetzenverein Liverpool Rifle Club Limited v Commonwealth of Australia (1994) 51 FCR 213, (1994) 85 LGERA 37 - though in the last case the order for separate determination was by consent). 93Allandale contends that Biscoe J adopted too low a threshold for the test as to when it is appropriate to state a preliminary question for determination, by reference to his Honour's conclusion which adopted the analysis by Craig J in Reysson v Roads and Traffic Authority [2011] NSWLEC 153 (namely that the determination of the question would have "the prospect of" substantially narrowing the field of controversy between the parties with a consequence that there would likely be a significant saving of costs) rather than the test expressed in Strathfield Municipal Council v Poynting [2001] NSWCA 270; (2001) 116 LGERA 319 at [113] (to the effect that a separate question should only be posed when there is "a critical matter" which, if dealt with in a preliminary hearing, will "far more likely than not" be convenient and save significant expense). 94Mr Lancaster submitted that, even if the question as asked was one that was possibly relevant to the determination of an issue arising in the compensation proceedings (and this was not conceded), the question as stated could potentially have resolved only a modest part of the case. Therefore, it is contended that the determination of that question could not meet the threshold for the exercise of the power to state a separate question for preliminary determination. 95The reference to a "critical" matter seems to me to be a reference to something that is or may be necessary for the determination of a particular question in the proceedings (as opposed to an incidental or ancillary issue). If the separate question is or may be dispositive of a relevant issue in the proceedings (or even dispositive of a discrete step in the process of determining a relevant issue in the proceedings), then if there is a reasonable prospect of a significant saving of costs by its determination in advance, this would (among others) be an appropriate factor to take into account when determining whether to exercise the discretion to order a preliminary hearing on the separate question. 96Insofar as the criticism is of the conclusion being expressed in terms of satisfaction as to the "prospect" of substantially narrowing the litigious controversy rather than something that "will far more likely than not" have the effect of so doing, it is important to note that what is being carried out in the exercise of the discretion is a balancing exercise as to the likely utility in the expeditious and cost-effective case management of the proceedings, having regard to the interests of justice as between the parties, of posing the question for separate determination in advance of the hearing. The potential for costs or time savings must at least in part be impacted by the assessment as to the amount by which the field of controversy is likely to be narrowed. If there was the potential for a huge costs saving then it might be that a lesser prospect of there being a substantial narrowing of the litigious controversy might be thought to be sufficient. 97The adoption of a "far more likely than not" test seems to me most likely to be an expression of the caution his Honour considered should be exercised in determining the exercise of discretion. In Idoport, the test was expressed in less dogmatic terms, as being whether it was possible "clearly" to see that the separate determination would facilitate the quicker and cheaper resolution of the proceedings. In considering that question, it may well be that the relative informality of the compensation proceedings would be a relevant consideration (since that might affect the assessment of the likely costs savings) but there is no suggestion in the authorities that there is a different threshold in exercising the discretion under rule 28.2 in class 3 proceedings in the Land and Environment Court than in other proceedings in that Court or elsewhere. 98Here, there is a dispute to the criticality of the issue posed by the separate question to the relevant issue(s) for determination in the proceedings. However, unless the contention of Roads and Maritime Services (that lawfulness of use of the buffer area as a quarry is a relevant matter in considering the compensation payable to Allandale) is clearly wrong, then it cannot be said that the separate question did not address an issue that was potentially a critical issue in the proceedings (even if one that might not be finally dispositive of the matter). 99A relevant question on the present challenge, therefore, is as to whether the question to be the subject of an order for separate determination can be said to be one that will or may be a relevant issue to be determined in the hearing. If so, then the fact that ultimately it may not be critical to the overall determination of the proceedings is a, but not necessarily the determining, factor to be taken into consideration. Reasoning of Biscoe J 100Biscoe J dealt with the application on an ex tempore basis and, understandably, his Honour's reasons were relatively brief. His Honour considered the evidence of Ms Li, the submissions of the parties and relevant authorities. 101Having regard to the manner in which his Honour recorded the respective submissions of Counsel appearing on the motion, it appears that Roads and Maritime Services had pressed its application largely if not wholly on the basis of the substantial costs (and time) saving that it contended would result if its construction of the existing development consent were to be incorrect. That saving was by reference to the avoidance (if the answer were to be in the negative) of the need to call expert evidence relating to ecology, rivers and surveying to address the question whether a new development consent would be likely or unlikely to be granted (see [5] of his Honour's judgment). The scope of the existing development consent, on the respondent's case, was an issue raised by the assumption underpinning the compensation claim that the whole of the land was lawfully able to be quarried. 102His Honour concluded at [12]: In Reysson Craig J made an order for the determination of a preliminary question as to whether a development consent had lapsed. His Honour considered that this question was severable and collateral to the principal issues in the proceedings. The reason was that the determination of the question would have a significant bearing upon the admissibility, or utility of considering a significant portion of the expert evidence sought to be led on behalf of the respondent. If the question were answered in the negative before the proceedings were listed for hearing, there would be a dual advantage of costs savings in the preparation of expert reports, and it would enable the Court to better and more realistically determine the hearing time needed to be allocated to the final hearing. His Honour concluded that the determination of the question would have the prospect of substantially narrowing the field of controversy between the parties with a consequence that there would likely be a significant saving of costs: at [14] - [16]. In my view, a similar analysis is applicable to the present case. (my emphasis) 103Biscoe J noted (from [7] to [10]) the three substantive submissions made by Allandale in opposition to the proposed preliminary questions: first, a lack of utility (since, even if answered in the affirmative, i.e. in favour of the respondent's construction, this would not be dispositive for the purpose of the proceedings as there would still be argument that the hypothetical parties to a sale at the resumption date would not regard the development consent as so limited or, alternatively, would not regard it as void for uncertainty); second, that the separate question was not purely a question of law; and, third, that there was no jurisdiction to determine in class 3 proceedings whether the development consent was void for uncertainty (this last submission going to part (b) of the question which was not ultimately pressed before Sheahan J.) 104As to the utility argument, Biscoe J accepted that there was force in Allandale's submission that the proposed question (even if answered in the affirmative) would not be dispositive for the purpose of the proceedings of the proceedings but went on to say: Nevertheless, it seems that the proposed preliminary questions would otherwise be ventilated at the final hearing as steps in the inquiry into market value but only after substantial costs had been expended which the respondent does not propose to expend if they are answered in the [affirmative] before the final hearing date is fixed. [It is accepted that the word "negative" in the last sentence must in context have been intended to be "affirmative".] 105As to the second argument (the fact that there was a mixed question of fact and law), as I understand it Mr Lancaster submits that there was a greater ambit of potential evidentiary material than simply the three documents to which Biscoe J referred (although it does not appear that this was the case when the matter was heard by Sheahan J). If the question had been as to the lawfulness or otherwise of the past use, that may well have been the case. Here, however, on Allandale's case the development consent fell to be construed on its face. It was not contended that, if extrinsic evidence were necessary to construe the consent this went beyond the three documents in question. Basis of challenge to Biscoe J's decision 106Insofar as Allandale here challenges the exercise of a discretionary power, the principles in House v King (1936) 55 CLR 499 at 505 apply: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. Unlike courts of criminal appeal, this court has not been given a special or particular power to review sentences imposed upon convicted persons. Its authority to do so belongs to it only in virtue of its general appellate power. 107It is necessary for Allandale to identify an error of law made by Biscoe J in the exercise of the discretion to make the order for separate determination of the preliminary question. Allandale's draft notice of appeal identifies two alleged errors of law: first, that the separate question was not apt to address or answer the relevant legal question involved in the determination of appropriate compensation for the market value of Allandale's interest in the relevant land (but, rather, was a "free-standing" question that did not properly arise in the compensation proceedings) and, second, that the statement of the separate question in that form did not give effect to (and the answer to the question was not capable of giving effect to), and was inconsistent with, the overriding objective required by s 56 of the Civil Procedure Act. 108As to the first alleged error, it submitted by Mr Lancaster that the separate question is a free-standing question as to legality of use (as distinct from the question required to be determined for the purpose of determining the statutory compensation payable to Allandale, that being the market value of the land as that term is defined in s 56 of the Land Acquisition (Just Terms Compensation) Act, for which purpose focus is on the position of the hypothetical purchaser/vendor). 109As to the second alleged error, it is submitted that the informality of the procedure applicable in the conduct of class 3 proceedings under the Land and Environment Court Act is a relevant consideration. 110It is submitted that the primary matter taken into account by his Honour in separating the issue was a costs saving that was based on an illusory contingency because there was nothing to prevent Roads and Maritime Services from later seeking at the final hearing of the compensation proceedings to address the evidence the subject of the envisaged costs saving, irrespective of the outcome of the separate determination. In this regard, Mr Lancaster notes that there was nothing foreclosing argument as to other impediments to quarrying on the land and that no undertaking was sought from or proffered by Roads and Maritime Services to that effect. 111As a result of the above matters, it is contended that the exercise of his Honour's discretion miscarried.

• Relevance of preliminary question 112The first of the alleged errors of law turns in essence on the relevance or otherwise of the preliminary question to any question in issue in the compensation proceedings. 113For Allandale, it is submitted that the relevant question for the compensation proceedings is as to the market value of the land for the purposes of s 55(a) of the Land Acquisition (Just Terms Compensation) Act and that, having regard to the definition of market value in s 56 (and the principles articulated in Spencer v The Commonwealth (1907) 5 CLR 418 at 432), this requires an assessment as to how an hypothetical willing but not anxious buyer would bargain for the land (informed by all known advantages and potentialities of the land at the acquisition date - Turner v Minister for Public Instruction (1956) 95 CLR 245 at 268). 114Allandale contends that the question as to the scope of the development consent is of no or little relevance to the question as to what an hypothetical purchaser would be willing to pay for the land (and that for it to be of any relevance there would need to be a basis for the assumption that an hypothetical purchaser would have doubts as to the lawfulness of use and as to what advice an hypothetical purchaser who did make enquiries as to the lawfulness of continued use of the quarry would be likely to have received). 115Emphasis is placed by Mr Lancaster on the fact that, as at the acquisition date, the Allandale land had the benefit of the 1979 development consent and that an hypothetical purchaser would not then have had the benefit of a judicial determination as to the construction of that development consent. It is submitted that had the question been properly framed (as to the effect, if any, that any doubt regarding the scope or application of the development approval might have on the market value of the acquired land and hence the compensation payable to Allandale), it would have been clear that it was one of mixed fact and law and inappropriate to be determined in advance of the hearing. 116It is submitted by Mr Lancaster that the determination made by Sheahan J of the separate question would not in that context be a matter that should be taken into account in determining what a hypothetical purchaser would have bargained for the land at the future hearing of the compensation proceedings (since it would not be probative of the conclusions of the hypothetical parties in respect of the rights and obligations under the development consent). 117In response, Mr Tomasetti maintains that the suggestion that "market value" turns on how an hypothetical purchaser might approach the question whether the quarry operated lawfully at the date of compulsory acquisition is incorrect. He contends that s 56(1)(c) of the Land Acquisition (Just Terms Compensation) Act, by requiring any increase in value caused by use that is contrary to the development consent to be disregarded, imposes a statutory (and artificial) assumption (of lawful use), that not necessarily being the assumption that might apply if the land were being sold in the actual marketplace. In other words, Mr Tomasetti submits, in essence, that this provision replaces the common law test of market value (encompassed in the opening words of s 56 of the Act) with an artificial statutory test the application of which makes relevant the lawfulness of any quarrying outside the area permitted by the development consent (and hence the construction of the development consent is a relevant issue to be determined). 118Mr Tomasetti submits that the question whether the existing quarry had operated lawfully or unlawfully is one that does have an impact on the determination of compensation (though, as already noted, no allegation of prior unlawful use is made in the Points of Defence) because, if there is no present entitlement lawfully to extract andesite from the area near the road corridor (and there is either no or a doubtful potential to obtain that right in the future), then the andesite deposit that is claimed by Allandale to have been sterilized was worthless irrespective of the acquisition of the land by Roads and Maritime Services. 119Thus, the relevance of the stated question to the determination of the market value of the land is put by Roads and Maritime Services squarely by reference to the statutory requirement in s 56(1)(c) of the Land Acquisition (Just Terms Compensation) Act. 120Sheahan J considered that the scope of the development consent could be relevant in the compensation proceedings having regard to that section, noting in the course of the determination of the separate question that: This could become very important, as any use of land affected by the acquisition, beyond what enjoys consent, might have to be disregarded for compensation purposes, by virtue of the Land Acquisition (Just Terms Compensation) Act 1991 s56(1)(c). (my emphasis) Section 56(1)(c) 121Sub-section 56(1) of the Land Acquisition (Just Terms Compensation) Act defines the "market value" of land "at any time" as meaning the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid), among other things: (c) any increase in the value of the land caused by its use in a manner or for a purpose contrary to law (my emphasis) 122There is little guidance in the authorities as to the construction of sub-s 56(1)(c). In Doueihi v RTA [2004] NSWLEC 51, Cowdroy J considered a contention that the applicants were entitled to compensation upon the basis of a chance that the unauthorised use would be rendered lawful and noted at [38] that: ... In its assessment of the market value of the subject land and business the Court is required to disregard any increase "in the value of the land caused by its use in a manner or for a purpose contrary to law". Accordingly the development and use of the subject land which does not have lawful approval cannot be included in the market value of the subject land and business pursuant to s 56(1)(c) of the Just Terms Act. (emphasis per original) Hence, whatever value an hypothetical purchaser might have placed on the potential for an existing lawful use subsequently to become lawful was to be disregarded. 123There is no specific reference in the second reading speech given at the time of the passage of the Land Acquisition (Just Terms Compensation) Bill to this sub-section. Mr Tomasetti, however, refers to the reference in that second reading speech (as recorded in Hansard 11 April 1991 p 1975) to the Australian Law Reform Commission Report No. 14 on Lands Acquisition and Compensation in 1980 (which report preceded the enactment of the Land Acquisition Act 1989 (Cth), in which s 60(b) appeared in almost identical language to s 56(1)(c)). 124Mr Tomasetti notes that the ALRC report, though not a report falling within s 34(2)(b) of the Interpretation Act 1987 (NSW), was considered by Beazley JA in Blue Mountains City Council v Mulchay (1998) 45 NSWLR 577 at 582A, when her Honour considered the construction to be placed on in another part of s 56 (s 56(1)(b) of the Act). 125Reliance is placed by Mr Tomasetti on what is said at pp 33-4 of the report, from which I extract the following discussion as to the account to be taken of illegality of use of land for the purposes of valuation on its compulsory acquisition: 253 lllegality. The 1919 United Kingdom Act provided: Where the value of the land is increased by reason of the use thereof or of any premises thereon in a manner which could be restrained by any court, or is contrary to law, ... the amount of that increase shall not be taken into account. [Acquisition of Land (Assessment of Compensation) Act 1919, s 2 r 4] The South Australian Act contains an almost identical provision [Land Acquisition Act 1969 s 25(f)]. The Victorian Act has no equivalent. Most of the Canadian statutes which have enumerated the compensation ingredients have copied the United Kingdom [Ontario Expropriation Act 1969, s 14(4)(c); Manitoba Expropriation Act 1970, s 27(2)(d); New Brunswick Expropriation Act 1973, s 39(4)(c); Newfoundland Expropriation Act 1957, s 27(1)(d)] or excluded any 'increase in the value of the interest resulting from its having been put to a use that was contrary to law' [Federal Expropriation Act 1970, s 24(9)(d); Nova Scotia Expropriation Act 1973 s 33(d)]. Professor Todd has commented upon the Canadian provisions: These sections clearly exclude value resulting from the illegal use of property for such purposes as gambling and prostitution. Unquestionably even without such statutory provisions the courts would exclude such value on the general ground of public policy. In practice the more common instances of illegal uses are those which are contrary to municipal by-laws, particularly those relating to zoning. For example the owner of residence zoned for a single family dwelling cannot claim an increase in capital value on account of revenue derived from an 'illegal suite' even though there may be evidence that buyers in the market would pay almost as much for such a residence as for one with a 'legal suite' [fn Compare the approach taken in respect of illegal existing uses for the purposes of planning legislation: Grozier v Tate (1946) 64 WN (NSW) 1; Nash v Stlow [1950] VLR 39; Parramatta City Council v Brickworks Ltd (1972) 128 CLR 1, 256]. It has been held that the onus of proving the illegality of the particular use is on the expropriating authority, and that in certain circumstances the latter may be estopped from asserting the illegality. ... This Commission agrees with these comments. Moreover, it is difficult to see the necessity for any reference to a use that could be restrained by a court since such a use must necessarily be an unlawful use. It is recommended that the statutory enumeration should provide that the court disregard any increase in value of the acquired land resulting from its use in a manner or for a purpose contrary to law. [Draft bill, cl 40(b)] 126It is of relevance to note that reference was made at the time of passage of the 1991 legislation with apparent concurrence to the report of the Commission in which the Commission considered examples of unlawful use of land that might result in an increase of value that should be excluded by legislation of the kind there considered: namely, gambling, prostitution and use contrary to municipal by-laws "particularly those relating to zoning". At least the former uses would arguably only result in an increased land value by reference to the revenue that might be engendered from the use (and hence a value consistent with an assumption as to continued such use). 127The issue of the lawfulness of quarrying operations beyond the Circle is not one as to a use considered to be contrary to public policy or decency. However, for the following reasons, a use of the Allandale land contrary to the terms of the 1979 development consent would (in the absence of anything more) be a use of the land in a manner or for a purpose contrary to law. 128Use not in conformity with a prescribed scheme prepared and approved under the provisions of the Local Government Act 1919 (relevantly, s 342C(1)(a) and s 342J(2)(a)) was an offence under that Act (with limited exceptions such as those in s 342NA(5) of the Act of the 1919 Act). The relevant Ordinance in the present case was one made with reference to a prescribed scheme under the Act. Hence, use not in compliance with the Ordinance would be use in a manner contrary to law having regard to that legislation. Under the transitional provisions of the Environmental Planning and Assessment Act, contained in Division 10 of that Act, recipients of previous planning instruments were permitted to continue to use the land in the lawful manner in which it was used before the commencement of that Act (s 109). However, that did not extend to an alteration or intensification of the earlier lawful use. In such a case, approval to the changed use was required under the 1979 Act. (Failure to comply with any part of that legislation would be a breach of the 1979 Act.) 129Hence, if there had been use of the Allandale land contrary to the terms of the 1979 development consent, without the grant of a further approval under the subsequent Act authorising an extension of the permitted use or anything else to render it lawful, that would amount to use in a manner or for a purpose contrary to law for the purposes of s 56(1)(c) of the compensation legislation. (Whether such use would be likely to be restrained or the subject of enforcement action is a separate issue and one that does not arise in this appeal.) The question then would be whether any increase in value of the land relevantly being assessed had been caused by that unlawful use. 130Turning to the comparable UK legislation, s 2 rule 4 of the now repealed Acquisition of Land (Assessment of Compensation) Act 1919 (UK) (to which reference was made in the 1980 Australian Law Reform Commission report) was carried over into the Land Compensation Act 1961 (UK) (in sub-section 5(4)) when the 1919 Act was repealed. That section remains in force through sub-section 4(4)(b) of the Land Compensation Act 1973 (UK), which specifically retains certain rules for assessing compensation for compulsory acquisition under the 1961 Act. 131In Hughes v Doncaster Metropolitan Borough Council [1991] 1 AC 382 (which seems to be the only reported decision in which English courts have made reference to the "contrary to law" provision), the House of Lords considered the meaning of s 5(4) of the 1961 Act) but not in the context of the question whether it pertained solely to a past or existing use contrary to law (or could have encompassed a contemplated future use contrary to law). Instead, the question considered was whether use of land without planning permission, where that user was immune from enforcement under the Town and Country Planning Act 1971 (UK), fell under the rubric of use "contrary to law". It was held by the House of Lords that it was not and therefore that such use could be taken into account in assessing the value of the land. Position of Roads and Maritime Services 132It is submitted by Mr Tomasetti that s 56(1)(c) is enlivened if there is a use of the Allandale land for quarrying beyond the limits permitted by the development consent (since that would be a use in a manner or for a purpose contrary to law) and that if there is such a use, then the market value of the acquired land is not able to be valued as if quarrying operations could be carried out over the whole of the remaining land (since this would or may cause an "increase in the value of the land caused by its use in a manner or for a purpose contrary to law"). To the extent that this submission suggests that what s 56(1)(c) requires to be disregarded includes an increase in the value of land caused by the contemplation of a future unlawful use and not an increase in value deriving from a past unlawful use, that would only in my view be the case if the past use conveyed some assumption as to the continuity of such use for the reasons that I explore below. 133Mr Tomasetti accepts that whether that is in fact the valuation outcome in terms will depend upon further enquiry in the compensation proceedings but contends that (assuming the correctness of the construction of the development consent by Sheahan J) the land in the 'before' scenario is to be valued as if quarrying were permitted on lots 177 and 198 only within the Circle, and with potential for development consent to permit further expansion of the quarry upon the land, rather than the (residue) land being valued as if its actual use at the date of acquisition was a lawful use. Construction of s 56(1)(c) 134The word "land" in s 56(1)(c) clearly refers to the land the market value of which is being determined (for a purpose referable to the Act). The compensation provisions require the market value of the acquired land to be determined. It seems to be common ground that no quarrying was permitted under the terms of the existing consent on the land that has been acquired (since the acquired land is not part of lots 198 and 177). Therefore, the issue is not as to the sterilisation of any resource on the acquired land. However, on the before/after valuation methodology on which Allandale relies for its claim for compensation, the market value of the acquired land is to be assessed by deducting from the market value of the overall land prior to acquisition the market value of the residue land after acquisition. The only relevant difference between those values on Allandale's case is referable to the sterilisation of the royalty claimed to have arisen from the necessity of having a buffer zone adjacent to the acquired land. To the extent that the market value of the overall land is thus to be determined, that must be done having regard, inter alia, to the provisions of s 56(1)(c). 135Pursuant to that statutory provision, what is to be disregarded, in terms, is any increase in the value (as at the date of acquisition) of the relevant land which has been caused by use in a manner or for a purpose contrary to law (an unlawful use), not any potential increase in its value from an anticipated future use. (This must surely be the case since it would be speculative to postulate potential future unlawful uses, and the value attributable thereto, only then to disregard them. I note in this regard the comment made by Cowdroy J in Doueihi.) 136There might, however, be a number of ways in which a past unlawful use could be said to have led to an increase in the value of the land in the eyes of an hypothetical purchaser. One would be if the previous unlawful use had increased the value of the land by reference to improvements or infrastructure on the land erected for that unlawful purpose or (as in the illegal suite example considered by the Commission in 1980) the ability to earn revenue from a structure contrary to the relevant planning permission or zoning of the land in question. Another might arguably be if a past unlawful use conveyed to an hypothetical purchaser the prospect of an ability in the future to continue to use the land in such a fashion or if the past unlawful use had otherwise caused the land to be developed in a way that made it more valuable to a purchaser. Conclusion as to relevance of the stated question 137If the relevant question is whether a willing but not anxious hypothetical purchaser would be likely to be concerned as to the potential unlawfulness of future use of the quarry under the terms of the existing development consent, then I accept that the enquiry in the compensation proceedings would relevantly focus, first, on whether such a purchaser would be likely to have had such a concern (or to have been made aware that there was some doubt as to the legality of the use as a quarry of land outside the circle on the relevant map) and then, if so, as to what advice would be likely to have been given to any such enquiry as at the date of acquisition. 138I accept that on such an enquiry the relevance of a subsequent judicial determination as to the proper construction of the development consent would (on the authority of Housing Commission NSW v Falconer [1981] 1 NSWLR 547 and Minister Administering the Crown Lands Act v Deerubbin Local Aboriginal Land Council (No 2) (2001) 50 NSWLR 665) arise only if it could be said that it confirmed a foresight likely to have been held by the hypothetical purchaser at the relevant time and that this would be a matter for evidence at the final hearing of the compensation proceedings (involving a degree of speculation). 139However, if a (though not necessarily the only) relevant question is (as the case for Roads and Maritime Services seems to contemplate) whether any part of the value of the acquired land, assessed on the common law hypothetical purchaser basis (by reference to a methodology taking into account the value of the residue land), represents or reflects an increase in the value of the overall landholding caused by past unlawful use of part of the residue land, then the proper construction of the development consent would be a relevant issue (and the fact that a determination of this is made after the acquisition date is immaterial). While this does not seem to be precisely the way Roads and Maritime Services put its case in the submissions on appeal, it does seem to me to be a question that arises in the context of its challenge to the basis of valuation relied upon by Allandale. 140I have therefore concluded that it cannot be said that the stated question was one that has no potential relevance to the determination of the issue in the compensation proceedings (having regard to the way that Roads and Maritime Services contends that s 56(1)(c) operates in the present circumstances), though I accept (as Biscoe J implicitly acknowledged) that it was not one the determination of which will necessarily be dispositive of the question as to the market value of the acquired land. Conclusion as to exercise of discretion 141As to the exercise of his Honour's discretion, it is submitted by Mr Lancaster that Biscoe J did not address the right question in that his Honour did not start from a position that all issues should be resolved at one time and that his Honour did not (or did not sufficiently) take account of the warnings in the authorities as to the caution to be exercised in separating issues for determination prior to trial or the identification in the authorities (such as Idoport) of categories of inappropriate questions, when stating the preliminary question for separate determination. Biscoe J did, however, note the relevant authorities in this area and appears to have had regard to the material before him and the relevant principles. I do not consider that the summary way in which his Honour's conclusion was expressed bespeaks the adoption of an inappropriate threshold for the application of the test as to when it is appropriate to order separate determination of a question. While, on balance, I may not have come to the same conclusion, that is not the test for a finding of error warranting appellate intervention. 142As to the potential for significant cost (and time) savings (on the basis of the respondent's stated position in relation to the circumstances in which it would not be necessary to call expert evidence as to the likelihood of any expansion of the development consent), his Honour recognised that these would arise only if the determination of the question was in the negative. His Honour clearly must have balanced the potential for such savings against the possibility that the decision might ultimately not be that way. The fact that savings of costs and time did not transpire does not mean that the potential for such savings was illusory. 143As to the lack of an undertaking in relation to the calling of evidence of the kind that Roads and Maritime Services submitted it would not need to call if the determination of the separate question were against the construction of the development consent for which it contended, it is by no means clear that it was ever suggested to his Honour that such an undertaking would be necessary or desirable. Moreover, it is difficult to accept that Roads and Maritime Services would have been permitted to call such evidence at the final hearing contrary to the express basis on which it had put its application for separate determination. 144Having regard to the conclusion I have reached as to the potential relevance of this issue to the question sought to be raised by Roads and Maritime Services at the final hearing, I am not satisfied that his Honour was plainly wrong in concluding that the determination of the question was one which would have sufficient prospect of substantially narrowing the field of controversy so as to warrant the separate determination of the stated question. I am therefore not satisfied that, in a House v King sense, the exercise of his Honour's discretion miscarried.

Orders 202I would therefore make the following orders: 1 Extend the time for filing of the Summons seeking leave to appeal from the decision of Sheahan J to the date of filing the Summons and dismiss the application for leave to extend the time for the filing of the Summons seeking leave to appeal from the decision of Biscoe J. 2 Grant leave to appeal from the decision of Sheahan J and dismiss the appeal. 3 Order the appellant to pay the respondent's costs of the Summons seeking leave to appeal and the appeal.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 May 2013