Allandale Blue Metal Pty Ltd v Roads and Maritime Services

Civil Procedure Act 2005

1. Relevant sections of the Civil Procedure Act 2005 (NSW) (CP Act) provide: 67 Stay of proceedings Subject to rules of court, the court may at any time and from time to time, by order, stay any proceedings before it, either permanently or until a specified day.

Uniform Civil Procedure Rules 2005

1. Rule 51.44 of the Uniform Civil Procedure Rules 2005 (UCPR) provides: 51.44 Appeal proceedings do not operate as stay unless Court or court below directs Subject to the filing of a relevant originating process, the Court may order that the decision below or the proceedings under the decision be stayed. The filing of a relevant originating process does not: (a) operate as a stay of proceedings under the decision below, or (b) invalidate any intermediate act or proceedings.

Land Acquisition (Just Terms Compensation) Act 1991

1. The Just Terms Act provides: 48 Advance payments of compensation etc An authority of the State may, at any time after land is acquired, make an advance payment of compensation to any person who the authority considers is entitled to the compensation. … Any advance or other payment of compensation to a person not entitled to the compensation must be repaid to the authority of the State that made the payment. Any amount due to an authority of the State under this section may be recovered as a debt in any court of competent jurisdiction. 68 Payment of compensation arising from court proceedings Payment of compensation in respect of matters before the Land and Environment Court is to be made in accordance with any agreement reached during the proceedings or, if no such agreement is reached, in accordance with the decision of the Court. Subject to any such agreement or decision: if the authority of the State gave the owner concerned a compensation notice - the authority is required to pay 90 per cent of the amount of compensation offered in the notice (as an advance payment) within 28 days after the authority is given notice of the institution of the proceedings or (if the owner does not accept that advance payment) the authority is required to pay 90 per cent of that amount into the trust account kept under this Part, or if the authority of the State did not give the owner concerned a compensation notice - the authority may (but is not required to) make an advance payment under this Part or pay an amount into the trust account kept under this Part.

RMS's submissions

1. Considerations to which the Court may have regard when determining how to exercise the discretion to grant a stay of execution of an order include, but are not limited to: 1. whether the applicant on the motion has an arguable case on appeal, without looking at the prospects of success; 2. whether there is a risk the respondent on the motion will be unable to repay the money without difficulty or delay if the appeal were to succeed; 3. whether there is a proper basis for the stay so that it will be fair to all parties; 4. whether there is a risk that if a stay is granted, the assets of the applicant will be disposed of; 5. the balance between convenience and the competing rights of the parties; 6. whether there is a risk that the appeal will prove abortive if the appellant succeeds and a stay is not granted.
2. However, the overriding principle is to ask what the interests of justice require.

Arguable grounds on appeal

1. A central issue in the proceedings was whether ABM was entitled to compensation for losses arising from the sterilisation of the andesite resource where the company, QPN, actually occupying and operating the quarry, had already claimed and accepted compensation for the same losses. This question was referred to in Allandale (No 6) as the "threshold question" at [145]-[170].
2. On appeal the RMS intends to argue, among other things, that ABM is not entitled to compensation for quarry activity losses claimed and paid to QPN. If the RMS is correct, then the amount of compensation payable to ABM would simply be the market value of the land acquired calculated on a piecemeal basis and limited disturbance loss.

Financial position of Applicant

1. The RMS refers to par 4-23 of the Ms Li's first affidavit which sets out the background to the acquisition and these proceedings. If the total amount of compensation under the orders is paid to ABM and the RMS succeeds on appeal, ABM will have received an overpayment of compensation of at least $2,633,000. The RMS will need to seek recovery of any overpayment of compensation under s 48 of the Just Terms Act. The main issue then is whether ABM would be able to repay any overpayment. The financial records of ABM identify its main business activity as the agistment of cattle with an income of $82,565 for the financial year ending 30 June 2010. The main asset of land is identified in ABM's 2010 Annual Financial Report as having a value of $347,867. A large part is leased to QPN which conducts quarry operations. The land is a non-current asset and there would be significant difficulties and delays in realising value from the land to enable any amount to be repaid in the event of a successful appeal.

No prejudice to ABM

1. There is no risk to ABM losing the benefit of the judgment by being prevented from enforcing it until after the appeal is heard and determined. There is no suggestion that the judgment sum will not be paid by the RMS if the appeal is ultimately dismissed. There is no risk of ABM losing the benefit of the judgment pending the appeal: TCN Channel 9 Pty Ltd v Antoniadis [No 2] [1999] NSWCA 104; (1999) 48 NSWLR 381 at [15]. ABM is protected from the financial consequences of any delay by the accrual of interest on the judgment in the meantime. Specifically, statutory interest accrues from the date of acquisition until the final payment of compensation (s 49 of the Just Terms Act).
2. The RMS has not delayed in applying for a stay of the orders.
3. The RMS has already paid the business loss to QPN a related company. Neither QPN nor ABM can be materially prejudiced by any stay. An advance payment of approximately $1 million, or 90% of the Valuer-General's offer was paid to ABM in accordance with the requirements of the Just Terms Act.

Prejudice to public funds

1. Conversely however, payment of compensation to ABM is a payment out of the public funds administered by the RMS. The public interest is served by preserving the judgment fund pending the determination of the appeal relying on Cudgegong Australia Pty Limited v Transport for NSW (No 2) [2014] NSWLEC 36 at [21] and [29].
2. If the RMS succeeds in the appeal, and ABM is unable or unwilling to repay any overpayment of compensation there will be irreparable loss to public monies.

ABM's submissions

1. There is nothing to which a stay order can be directed given the statutory scheme whereby the Court determines (declares) the amount of compensation under s 68(1). Further no notice of appeal has been filed, so that the opening operative words in r 51.44 have yet to arise. That weighs heavily against the exercise of discretion to grant a stay. The application is pre-emptive. Further, in the exercise of the Court's discretion the RMS has not demonstrated sufficient reason why a stay order ought be made.

No stay order made

1. There is no dispute that the Court has the power to order a stay of proceedings in the exercise of its discretion whether under s 67 of the CP Act or r 51.44 of the UCPR. The RMS has requested a prompt decision as the Deed of Release referred to in notes 3 and 4 at the end of the orders dated 24 March 2015 provides that payment be made by the RMS to ABM by 21 May 2015. It is debateable whether that date agreed by the parties is a relevant deadline for the Court in the sense that the deadline is not imposed by any court order or specific statutory provision. Nevertheless in the interests of accommodating the RMS's request for an early judgment these reasons will be somewhat truncated and will be assisted by quoting extracts of the commentary on the applicable UCPR rule, r 51.44, from Ritchie's Uniform Civil Procedure NSW, LexisNexis vol 1, at 9254.113-9254.115: [51.44.5] Stay pending appeal - power to grant A respondent, or prospective respondent, has no automatic right to a stay of proceedings: The Annot Lyle (1886) 11 PD 114 at 116 (in the absence of an informed assessment of the correctness of the judgment appealed from an appeal court should not deprive a party of the fruits of victory); Monk v Bartram [1891] 1 QB 346; Grimson v Freeman (1909) 26 WN (NSW) 3; Small v Cmr of Railways (1938) 55 WN (NSW) 99b; Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184; Veritas Property Group Pty Ltd v Ronali Pty Ltd [2012] NSWSC 368; BC201207222. … This proposition applies not only to judgments for the payment of money, but also where the successful party is entitled to an enquiry: Shaw v Holland [1900] 2 Ch 305; Coleman & Co v Smith & Co Ltd [1911]2 Ch 572. However, doubts have been expressed as to whether it is appropriate to order the stay of a declaratory order: Bunnings Forest Products Pty Ltd v Bullen (1994) 54 FCR 342; 126 ALR 660; BC9400209; The Roosters Club Inc v The Northern Tavern Pty Ltd [2003] SASC 143; BC200302518. [51.44.10] Stay application to the trial judge It is usually appropriate for stay applications to be made, at least in the first instance, to the trial judge: Frith v Sipple (NSWCA, Moffitt P, Hutley and Mahoney JJA, 11 September 1978, CA No 210/78, unreported) (at [456,125] behind guide card "Practice Decisions" in vol 3). … The refusal of a stay by the trial judge does not preclude a further application being made to the Court of Appeal (Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 692; 10 ACLR 42; Cropper v Smith (1883) 24 Ch D 305; Cox v Mosman [1908] St R Qd 211; JC Scott Constructions v Mermaid Waters Tavern Pty Ltd (No 2) [1983] 2 Qd R 255 ) … [51.44.15] Stay - relevant considerations (ordinary litigation) In order to justify a stay, an applicant must identify the circumstances that warrant a departure from the general rule that the judgment below should be presumed to be correct and is appropriate to be enforced: Klinker Knitting Mills Pty Ltd v L'Union Fire Accident and General Insurance Co Ltd [1937] VLR 142; [1937] ALR 298; Barker v Lavery (1885) 14 QBD 769; Atkins v Great Western Railway (1886) 2 TLR 400; Wilson v Church (No 2) (1879) 12 Ch D 454; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1972) 7 SASR 268; JC Scott Constructions v Mermaid Waters Tavern Pty Ltd (No 1) [1983] 2 Qd R 243. An appellant applicant does not have to show that the circumstances relied on to support a judgment stay can properly be described as "special" or "exceptional": Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685; 10 ACLR 42; Powerflex Services Pty Ltd v Data Access Corporation (1996) 67 FCR 65; 137 ALR 498; 35 IPR 193; BC9602459. An appellant's ability to identify reasonably arguable grounds of appeal is highly relevant to the exercise of the stay discretion: Andrews v John Fairfax & Sons Ltd [1979] 2 NSWLR 184; Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 695; 10 ACLR 42. The existence of arguable grounds of appeal is not necessarily sufficient to justify the grant of a stay: McBride v Sandland (No 2) (1918) 25 CLR 369, at 374; 25 ALR 54; BC1800006. But their absence is likely to be a determinative consideration against the stay application: Chen v Lym International Pty Ltd [2009] NSWCA 121; BC200904486 at [15] per Beazley JA; Trad v Harbour Radio Pty Ltd [2010] NSWCA 41; BC201001404 at [48] per Tobias JA; Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 695; 10 ACLR 42. Circumstances sufficient to justify the grant of a stay exist where: ∙ refusal would render the appeal futile: Wilson v Church (No 2) (1879) 12 Ch D 454; Re Middle Harbour Investments Ltd (in liq) (NSWCA, 15 December 1976, unreported); ∙ where money paid to a respondent to satisfy the judgment may be irrecoverable if the appeal is successful: TCN Channel 9 v Antoniadis (No 2) (1999) 48 NSWLR 381; [1999] NSWCA 104; BC9901834; … [51.44.20] Stay - relevant considerations (public interest litigation) The overriding principle in any stay application is that of upholding the interests of justice in the particular circumstances: New South Wales Bar Assn v Stevens (2003) 52 ATR 602; [2003] NSWCA 95; BC200301897 at [83]…
2. The power to grant a stay of an order is a discretionary one. On one view the issue is quickly determined in ABM's favour by not making the orders sought in the Notice of Motion. Order 1 of 24 March 2015 is a determination of compensation under s 68 of the Just Terms Act simpliciter. It does not specify any obligation on the RMS to pay ABM the amount determined or any timeframe for doing so as that is resolved separately under the Just Terms Act. As identified in Ritchie's Uniform Civil Procedure NSW it is doubtful whether a declaratory order, which I consider order 1 of 24 April 2015 is, could or should be stayed. I am inclined to agree with ABM that an order staying a determination of compensation is meaningless. The authorities in Ritchie's Uniform Civil Procedure NSW at [51.44.5] appear to contemplate the stay of the execution of an order is the more usual (albeit not exclusively) circumstance for a stay application.
3. The RMS emphasised in oral submissions it wishes to be relieved of the obligation to pay ABM the amount of compensation determined by the Court until the outcome of appeal is known. As noted in the previous paragraph, execution of payment of the amount of compensation determined was not the subject of my order. The obligation to pay does not arise by virtue of my order but by the operation of s 68 of the Just Terms Act. As ABM submitted this Notice of Motion is not the appropriate vehicle by which to achieve a stay of the obligation to pay ABM. Hypothetically, if ABM commences proceedings seeking enforcement of the amount payable under the Deed of Release that may be the opportunity for the RMS to make the appropriate application for a stay. Given the declaratory nature of order 1 I would not make the order for a stay sought by the RMS.
4. I will briefly consider other matters raised. While ABM submitted that the absence of a notice of appeal, in contrast to a notice of intention to appeal, disqualified the application from succeeding, I consider that r 51.44 can apply in these circumstances. A number of decisions to stay proceedings have been made where a notice of intention to appeal rather than a notice of appeal has been filed, for example Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 at 687. That alone is not a disentitling factor for the RMS.
5. The general rule for granting a stay pending appeal is that the judgment in question should be presumed to be correct and is appropriate to be enforced: Ritchie's Uniform Civil Procedure NSW at [51.44.15]. The RMS must identify circumstances that warrant a departure from this rule which are relevant considerations to the exercise of my discretion to grant a stay, assuming that it remains at large. Exceptional circumstances are not required to justify a stay order.
6. If necessary to do so I would be reluctant to exercise my discretion to order a stay in part because of the statutory scheme relating to compulsory acquisition of private land for a public purpose. ABM's property was compulsorily acquired for a public purpose giving rise to a statutory right to compensation as regulated by the Just Terms Act. As a general proposition such an applicant should get the benefit of an award of compensation by this Court in its favour sooner rather than later. That the compensation is presently held appropriately and earns interest while an appeal process proceeds should not be seen to offset the primary function of the statutory scheme to provide compensation to those whose land is compulsorily acquired. Given that scheme, the submission that there is no prejudice to ABM because it must wait many more months for payment of compensation now lawfully determined when the acquisition took place on 12 February 2010 is not accepted. While ABM appealed a preliminary question of law to the Court of Appeal resulting in unusually lengthy proceedings nevertheless, and regardless of that appeal period, a considerable time has elapsed since the date of acquisition.
7. Nor do I accept that it is the usual practice in matters of this kind to stay a determination of compensation pending appeal where there is a risk a plaintiff will be unable to repay the money without difficulty or delay if the appeal were to succeed. The RMS so submitted, relying on Woolworths Ltd v Strong (No 2) [2011] NSWCA 72; (2011) 80 NSWLR 445 at [68] which is not a Class 3 compensation matter. Firstly, there is no usual practice in this Court in this kind of matter because it seems likely this is the first such application. Secondly, I find below that the RMS has not discharged the onus it bears of establishing a potential risk of ABM not repaying any overpayment of compensation.
8. I am prepared to accept for the purposes of this application that there is one arguable appeal ground identified in the draft notice of appeal annexed to Ms Li's second affidavit in relation to the question of "double dipping", a threshold question I resolved in ABM's favour in Allandale (No 6). This is a relevant factor but is not sufficient on its own to justify a stay, per Ritchie's Uniform Civil Procedure NSW at [51.44.15]. I observe that a number of other draft grounds of appeal are not framed as questions of law and appear to be impermissible challenges to findings of fact but I need not spend further time on the draft grounds. While the existence of at least one arguable ground of appeal is a relevant factor for the Court to consider, see Ritchie's Uniform Civil Procedure NSW at [51.44.15], there are other relevant matters to consider in weighing up how my discretion should be exercised.
9. Concerning delay in making the application, the substantive judgment in Allandale (No 6) was handed down on 17 February 2015. Final orders were made on 24 March 2014. I note that two notices of intention to appeal were filed by the RMS one dated 17 February 2015, which would require the notice of appeal to be filed by 17 May 2015. Given the evidence in Ms Li's second affidavit sworn 14 May 2015 that a draft notice of appeal had been prepared but not filed in the Court of Appeal, I infer that notice of intention to appeal will not be relied on by the RMS. The second notice of intention to appeal dated 20 April 2015 can be relied on to enable a notice of appeal to be filed by 24 June 2015. Three months have in any event elapsed since the substantive judgment and while the finalisation of orders took several weeks that was not due to the actions of ABM. This application for a stay is delayed given that length of time since the substantive judgment.
10. The RMS bears the onus of establishing on the civil standard that there is a likelihood that ABM will not be able to repay any overpayment of compensation if the appeal succeeds, if the matter is remitted and if the Court determines a lesser amount of compensation on the remitter (several "ifs" as ABM's counsel submitted). The Annual Financial Report relied on by ABM refers to the original price paid for the land of $347,867. The land is highly likely to have appreciated since that date. As ABM submitted I found in Allandale (No 6) at [399] that the land value of the residue land as at the date of acquisition in 2010 was $5,000 per hectare. ABM owns 576 hectares of residue land which would result in sale proceeds of approximately $2.9 million at that rate per hectare. This suggests that ABM does have resources which it can draw on if necessary to repay money. That the land is partially leased to QPN does not prevent it being dealt with. ABM offered through its solicitor to provide notice of its intention to sell the land in a letter dated 23 April 2015 but I note that offer was conditional on payment of compensation by a certain date.
11. As to the RMS's concern that if it cannot recover any overpayment public money will be lost, which I accept is an important consideration, the Just Terms Act provides specifically for statutory liability falling on the recipient of an overpayment of compensation (or of an advance payment) in s 48(5). In this unlikely event the RMS will have a specific statutory recovery process available to it.
12. Cudgegong (No 2), Class 3 proceedings concerning the Just Terms Act relied on by the RMS, determined a stay application in quite different circumstances of which party an advance payment provided for under the Just Terms Act should be made to prior to any substantive hearing. The reasoning cannot assist here.
13. In summary I do not consider that a stay will be fair to all parties, that the appeal will prove abortive if the RMS appeal succeeds and that the interests of justice suggest that a stay ought be given, .
14. At the end of its submissions the RMS submitted that as an alternative a stay ought be granted for 28 days allowing the RMS to apply for a further stay from the Supreme Court. For the above reasons it is not apparent I can or should make such an order. The deadline for payment of 21 May 2015 under the Deed of Release is inter partes. The RMS can apply to the Court of Appeal for a stay (see authorities at [51.44.10] Ritchie's Uniform Civil Procedure NSW) in any event. I accept it is unlikely to be able to have such an application heard before 21 May 2015 but that date has been agreed inter partes and is not the subject of a court order. If not complied with by the RMS the issue of a stay remains "live" at least to the extent the matter can be raised in the Court of Appeal. I consider the RMS's Notice of Motion dated 8 May 2015 should be dismissed.

Orders

1. The Court makes the following orders: 1. The Roads and Maritime Services' Notice of Motion dated 8 May 2015 is dismissed. 2. Costs are reserved. 3. Exhibits are to be returned.

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: 20 May 2015