Coffs Harbour City Council v Noubia Pty Limited

The opposition to leave to appeal

1. Noubia opposed the application for leave to appeal. Noubia submitted that the Council has not discharged the "heavy burden" to establish that there is an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable justifying the grant of leave to appeal: PPK Willoughby Pty Ltd v Baird at [6].
2. As to the first two matters, the primary judge's exercise of discretion to allow the parties to rely on further evidence was dependent on the particular circumstances of the case. Noubia contested the Council's characterisation of the questions involved in the application for leave and any appeal if leave were to be granted. The evidence that is the subject of the primary judge's ruling, the further supplementary joint report of the parties' engineers, was produced in response to the primary judge's orders of 6 May 2021 to enable her to evaluate the engineering evidence. The primary judge was faced with competing evidence of the two engineers, each relying on a different model for predicting and assessing the behaviour of stormwater and drainage in and around the transferred lots. Findings on that topic were relevant to assessing the value of the transferred lots. If the flows could be accommodated in a lesser number of lakes and a channel, rather than the five lakes contended for by the Council, a generous area of land would be available for residential development. If, however, the flows could not be so accommodated in a lesser number of lakes and a channel, and more lakes were needed to manage and control the flows, less land would be available for residential development. The primary judge will need to decide this question, but will be assisted in doing so if the engineers have a common view on the modelling of the flows and the hydrological and hydraulic functioning of alternative drainage schemes. The primary judge accordingly directed the engineers to confer and produce a joint report modelling the flows for both the approved subdivision and Noubia's hypothetical subdivision.
3. Noubia submitted that a proper exercise of the discretion to allow further evidence on the hearing of the remitted matter cannot ignore these circumstances that gave rise to the need for the further evidence. The primary judge, charged with deciding the remitted matter, required the assistance of the parties' experts to enable her to make a decision on the hydrological and hydraulic aspects of the case with a common model and not two conflicting models.
4. Noubia submitted, therefore, that a proper characterisation of the questions involved in the application for leave to appeal and the appeal if leave be granted, is whether the primary judge, having expressed a judicial need for and expressly sought the assistance of the engineering experts, has properly exercised her discretion to allow the parties to rely on the experts' resulting joint report.
5. Noubia contested the relevance of the Council's argument that Noubia's claim involved the assessment of facts at a fixed time in the past. Noubia accepted that the amount of compensation payable is to be determined at the time the two lots were transferred to the Council. But that does not impact on the primary judge's discretion to allow the parties to rely on the further supplementary joint report prepared in response to the primary judge's order. That joint report will assist the primary judge in making a decision about the amount of compensation payable at the time the lots were transferred to the Council, the very task that the Council argues needs to be undertaken.
6. Noubia submitted that it is also not relevant that a past disagreement between the parties' engineers, stemming from their reliance on two different stormwater models, may have been an issue that the original trial judge, Sheahan J, needed to resolve, but failed to resolve. The Council successfully appealed Sheahan J's decision and secured remittal orders for the assessment of the compensation payable by the Council to Noubia for the transferred lots. This is the primary judge's task, which is not to be resolved on the basis of the submissions that the Council made to Sheahan J, or the findings of Sheahan J, but rather on the evidence and submissions before the primary judge at the hearing of the remitted matter. The primary judge determined that the further supplementary joint report of the engineers, in which the parties' engineers have reached agreement on a revised alternative drainage scheme where they were previously in disagreement, should be part of the evidence on which the primary judge will assess the compensation payable.
7. Noubia also took issue with the Council's submissions concerning the process that led to the primary judge's ruling. It may be accepted that Noubia did not file a notice to adduce fresh evidence, but neither the Council nor the Court sought for Noubia to do so. The Court directed the engineers to confer and to prepare, file and serve a joint report by a specified date. The experts did so, although they were delayed so that the joint report was not filed until 27 October 2021. Noubia indicated to the Court that it wished to rely on that joint report and sought the Court's leave to do so. The Council opposed leave being given to rely upon the joint report. In order to resolve this contest and allow the parties to prepare for the resumption of the hearing on remitter, the Court fixed a date, 25 November 2021, for argument as to whether leave should be given to the parties to rely on the joint report that had been filed with the Court. That was a course open to the primary judge in the exercise of her discretion on a question of practice and procedure.
8. As to the third matter of injustice, Noubia submitted that there is no injustice in allowing both parties (and not just Noubia) to rely on the joint report. The joint report will advance the determination of the remitted matter, namely for assessment of the compensation payable by the Council to Noubia in respect of the two lots transferred to the Council. Indeed, to the contrary, it would be a material injustice to exclude the joint report from consideration and to require the primary judge to assess the compensation payable based on the previous disagreement of the experts, and their competing modelling, in ignorance of their later agreement in the joint report using common modelling and a revised alternative drainage scheme that can deal with both site flows and upstream flows. There would also be injustice to Noubia, if the joint report, recording the parties' engineers' agreement, were to be excluded.
9. In answer to the Council's second claimed injustice, Noubia noted that the primary judge acknowledged that acceptance of the joint report may give rise to additional joint reporting by other experts. That has now occurred. In accordance with Pain J's orders, the parties' planners and valuers have conferred and produced joint reports on 24 December 2021 and 20 January 2022 respectively. Each report has had regard to the joint report of the parties' engineers. Costs are an adequate remedy for this additional joint reporting.
10. Noubia submitted that none of the proposed grounds in the draft notice of appeal have any merit. The first ground of inadequate reasons is without substance given that the primary judge identified the contested issue (at [9], [17]-[18]) and put it in context (at [3]-[6]) and set out the parties' competing submissions (at [9]-[16] and [17]-[25]), before giving consideration to the matters and principles relevant to the exercise of discretion (at [26]-[30] and [32]). Nothing has been advanced by the Council to establish that the primary judge constructively failed to exercise her discretion (ground 2). The Council has not demonstrated why the primary judge's exercise of discretion miscarried (grounds 3, 4 and 5). The primary judge's decision was reached on a legally reasonable basis and the discretionary power was exercised in accordance with legal reasonableness.
11. In short, Noubia submitted that the proposed grounds of appeal are very weak, which is another factor warranting refusal of leave to appeal.

Leave to appeal should be refused

1. Ordinarily it is appropriate to grant leave to appeal only concerning matters that involve an issue of principle, a question of general public importance or an injustice which is reasonably clear, in the sense of going beyond what it merely arguable: Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69 at p 3 per Kirby P; Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]; and PPK Willoughby Pty Ltd v Baird at [6]. It is not sufficient merely to show that the trial judge was arguably wrong: Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl at p 2 per Sheller JA; Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56 at [32]; Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32].
2. There is an even greater reluctance to grant leave to appeal where the decision involves an exercise of discretion on a point of practice and procedure rather than an exercise of discretion which determines substantive rights: In re The Will of FB Gilbert (1946) 46 SR (NSW) 318 at 323. Ordinarily such a discretionary decision on a matter of practice and procedure will be overturned on appeal only if it can be demonstrated that the judge "(a) made an error of legal principle, (b) made a material error of fact, (c) took into account some irrelevant matter, (d) failed to take into account, or gave insufficient weight to, some relevant matter, or (e) arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning": Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [45]. Leave to appeal against such a discretionary decision will not be granted if such errors justifying appellate interference with the decision are not likely to be demonstrated.
3. I consider that the Council has not established any of these matters that are needed to justify the grant of leave to appeal against the primary judge's discretionary decision on a matter of practice and procedure to allow the parties to rely on the joint report of the engineers.
4. First, the proposed appeal does not raise any error of legal principle. The Council argued that the primary judge ought to have applied, but did not apply, the "principles" relevant to the adducing of fresh evidence on remitter. The Council contended that those principles were, firstly, the principles governing applications to reopen a case after judgment has been delivered, secondly, the principle of finality and, thirdly, the need for the just, quick and cheap resolution of the proceedings.
5. At the outset, I note that there are no universally applying "principles" that govern the exercise of discretion to allow further evidence on the hearing of a remitted matter. The specific circumstances of the case need to be considered, including the nature and scope of the appeal against the original decision, such as whether a full appeal on fact and law or a limited appeal on questions of law; the particular grounds of appeal on which appellate reversal occurred; the terms of the remittal order and in particular any limitation on the nature and scope of hearing of the remitter matter; and the circumstances and timing at which the decision to allow further evidence was made at the hearing of the remitter matter. In short, one set of "principles" does not fit all the circumstances of remitted matters.
6. As to the first principle said to be applicable, the Council noted that the circumstances in which a court will reopen a judgment once delivered are "extremely rare" (Wentworth v Woollahra Municipal Council at 684) or "very limited" (Mosca v Roads and Traffic Authority of NSW at [12]).
7. However, the Council's analogy with the reopening of a case after judgment has been delivered is inapt in the circumstances of this case. Noubia did not seek, and the primary judge did not allow Noubia, to reopen its case after the primary judge has delivered judgment. The primary judge's ruling allowing the parties to rely on the joint report of the engineers was made in the course of the hearing of the remitted matter. This Court had set aside the earlier decision and orders of the original trial judge, Sheahan J, and remitted the matter to the court below for assessment of the compensation payable by the Council to Noubia: at [127]. Once this Court set aside the decision of the court below, there were extant proceedings that were yet to be finally determined. This is the task that the primary judge is undertaking. It may be accepted that both parties had closed their cases before the original trial judge had reserved his judgment, but on remitter further steps, including further evidence and further submissions, may be required before the primary judge can again reserve judgment: Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority at [81].
8. This is especially true in the circumstances of this case where the remitted matter needs to be heard and determined by a different judge as the original trial judge has retired. In these circumstances, the primary judge did not err on a matter of principle in not applying the approach taken by courts when a party applies to reopen a case and adduce further evidence after judgment has been delivered.
9. A more obvious analogy might be with reopening of a case prior to delivery of judgment, but the aptness of that analogy will depend on the circumstances. These include the grounds on which the appellate court reversed the decision of the court below, the terms of the remittal order, and the time at which the application to adduce further evidence is made during the hearing of the remitted matter.
10. As to the first circumstance, it will be relevant if the further evidence relates to matters that the appellate court found had not been properly decided rather than findings that are unaffected by the appellate reversal: Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority at [92]. This is the case here: the further evidence relates to the contested issues left unresolved by the trial judge and that need to be resolved by the primary judge on remitter.
11. As to the second circumstance, it will be relevant that the circumstances of remittal may involve a degree of complexity not found in an application to reopen a trial: Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority at [92]. This also is the case here: the original trial judge's constructive failure to exercise jurisdiction to decide the contested issues necessitates on remitter the primary judge determining complex and interacting issues concerning the alternative stormwater drainage scheme and the resultant hypothetical subdivision as necessary foundational findings for the assessment of the compensation payable.
12. As to the third circumstance, the primary judge's ruling that the parties may rely on the joint report was made during the course of the hearing of the remitted matter. The primary judge found, contrary to the Council's submission, that the joint report was responsive to the primary judge's concern about the inadequate state of the evidence of the engineers adduced earlier in the hearing and her direction that the engineers confer and produce a joint report endeavouring to remedy the inadequacies with the evidence. Neither party has closed their case at the hearing of the remitted matter. The further evidence of the joint report will therefore be adduced before either party closes their case. There will be no need for a party to apply to reopen its case before judgment is delivered.
13. In these circumstances, there is danger in relying upon the analogy of reopening a case before delivery of judgment; it distracts attention from the specific circumstances of the case at hand: see Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority at [92]. In any event, however, the primary judge did not make an error of legal principle in not applying the approach that courts have taken when a party applies to reopen a case before judgment has been delivered.
14. As to the second and third principles that the Council claimed the primary judge failed to consider, I consider the primary judge did not make an error of legal principle in failing to consider the guiding principle of finality and the need for the just, quick and cheap resolution of litigation.
15. The principle of finality is relevant where a judgment has been delivered that finally disposes of the proceedings. As Barwick CJ observed in Bailey v Marinoff (1971) 125 CLR 529 at 530, it would "not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed". In the present case, however, as a result of the appellate reversal of the original trial judge's decision and remittal of the matter for assessment of the compensation payable, the proceedings have yet to be finally determined. The principle of finality is not strictly engaged in this circumstance. Nevertheless the primary judge was well aware of the circumstance of relevance to the principle of finality that she was considering whether to allow the parties to rely on the further evidence of the joint report at the hearing of a remitted matter.
16. The primary judge expressly considered, in deciding whether to allow the parties to rely upon the joint report, the purpose to facilitate the just, quick and cheap resolution of the real issues in the proceedings (s 56 of the Civil Procedure Act 2005). The primary judge found that "the just, quick and cheap resolution of proceedings favours allowing the Joint Report to be relied upon" (at [32]). There is no merit in the Council's argument that the primary judge failed to consider this purpose.
17. What I have said so far deals with the proposed first ground of appeal, that the primary judge failed to give adequate reasons. The Council contended that the primary judge's reasons were inadequate because they did not disclose that she had turned her mind to the principles for allowing a party to reopen a case after (or before) judgment and the principles of finality and the just, quick and cheap resolution of litigation. That ground is not even fairly arguable for the reasons I have earlier given. The primary judge did not make an error of legal principle in not referring in her reasons to the principles for reopening of a case after or before judgment or to the principle of finality. The primary judge did consider and refer in her reasons to the purpose of facilitating the just, quick and cheap resolution of the proceedings.
18. My findings on that ground are also applicable to the proposed second ground of appeal, that by failing to address the relevant principles the primary judge constructively failed to exercise her discretion to allow further evidence on the remitter, and the proposed third ground of appeal, that the primary judge erred in her approach to the exercise of discretion. As the Council has not demonstrated that the primary judge made an error of legal principle in the exercise of her discretion to allow the parties to rely on the joint report, both of these grounds are not even fairly arguable.
19. The other two grounds of appeal allege that the primary judge's exercise of discretion to allow the further evidence miscarried. No particular is advanced for the fourth ground but for the fifth ground the Council contended that the primary judge's ruling to allow the parties to rely on the joint report was "unreasonable or plainly unjust". Neither ground is demonstrated.
20. The bare allegation in the fourth ground that the discretion miscarried is insufficient - the Council must demonstrate how the discretion miscarried. In oral argument, the Council suggested that the discretion miscarried because the joint report was not responsive to the terms of the primary judge's order directing the engineers to confer and produce a joint report. That argument is unpersuasive. There is nothing in the terms of the order limiting the content of the joint report that would result from joint conferencing, the order instead only giving direction as to the topics to be addressed in joint conferencing. In any event, however, the primary judge's finding that the joint report was responsive to her order for joint conferencing and report was a factual one and involved no error of legal principle justifying appellate interference with a discretionary decision on a matter of practice and procedure.
21. The allegation of unreasonableness is not made out. The primary judge's exercise of discretion to allow the parties to rely on the joint report was within the bounds of what a reasonable judge may decide in the circumstances of the case.
22. For these reasons, the Council has not established that the primary judge made an error of legal principle warranting the grant of leave to appeal against the primary judge's discretionary decision on a matter of practice and procedure.
23. As to the second matter that an applicant for leave may need to establish, none of the proposed grounds of appeal raise a question of public importance. The primary judge's exercise of the discretion to allow further evidence at the hearing of the remitted proceedings was a discretionary decision on a matter of practice and procedure. Nothing about the primary judge's exercise of that discretion in the circumstances of this case raises a matter of public importance.
24. As to the third matter that an applicant for leave to appeal may need to establish, the Council has not demonstrated that, if leave to appeal were not to be granted, it would suffer a reasonably clear injustice going beyond something which is merely arguable.
25. The Council's first claimed injustice was that admission of the joint report might weaken the Council's prospects of success in the proceedings. The Council had criticised the modelling and alternative stormwater drainage scheme proposed by Noubia's engineer, which were the foundations for the hypothetical subdivision advanced by Noubia. The Council's case was that this hypothetical subdivision would not have been approved by the Council and hence could not be used as the basis for valuation of the lots transferred to the Council. In the further supplementary joint report of the parties' engineers, they agreed on common modelling and a revised stormwater drainage scheme that addressed the Council's criticisms. The engineers agreed that the revised hypothetical subdivision, based on the common modelling and revised stormwater drainage scheme, may now be one capable of being approved by the Council. The revised hypothetical subdivision might, therefore, be one from which the value of the transferred lots could be derived. This may undermine the Council's criticisms and its case. No longer will the Council's hypothetical subdivision be the only one from which the value of the transferred lots could be derived.
26. Even if this were to be the situation, this is not a relevant injustice for two reasons. The first is that parties' cases can and often do change on remitter. Further steps may be required before a remitted matter can again be reserved for judgment. This may include the admission of further evidence, which prompts the parties to refine or revise their cases in response. In the present case, by the terms of the remittal order, the primary judge was charged with the task of assessing the compensation payable to Noubia for the lots it had transferred to the Council. In discharging that task, the primary judge will need to have regard to the respective cases put by each party at the hearing of the remitted matter, including all of the evidence adduced and submissions made on the remitter. The fact that the cases run by the parties on the remitter may differ in some respects from those run at the original trial is to be expected. No relevant injustice to the parties is caused by the parties doing so.
27. The second reason, particular to the circumstances of this case, is that no relevant injustice can be suffered by the Council having to pay just compensation for lands transferred to it. Under the condition of consent, the Council is obliged to compensate Noubia for the transferred lands in an amount equal to the value of the lands determined in accordance with s 54(1) and other relevant provisions of the Land Acquisition Act. Section 54(1) provides that: "The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land."
28. The task of determining an amount that will "justly compensate" Noubia for the lands it transferred to the Council pursuant to the condition of consent is not one confined to deciding merely the contest between the parties' experts. The trial judge is not obliged to accept or reject the evidence of one or other of the parties' valuers, for example, but may assign such weight to part or all of a witness' evidence as the judge determines is appropriate and may reach a conclusion that does not coincide with the evidence of any witness although it is based on the evidence. As Mason P observed in Roads and Traffic Authority of NSW v Hurstville City Council (2001) 112 LGERA 223; [2001] NSWCA 11 at [50]: "In the field of judicial valuations, the task is ultimately evaluative."
29. This exposes the flaw in the Council's argument of injustice. In order to make a declaration as to the amount of compensation that will justly compensate Noubia for the lands transferred to the Council, the trial judge is not obliged simply to accept the Council's evidence if Noubia's original evidence is discredited, but instead undertakes an evaluative task of determining what is the value of the transferred lands and hence the amount of compensation payable. The primary judge has found that the joint report of the engineers, which she directed to be prepared, will assist her in undertaking that evaluative task to determine the amount that will justly compensate Noubia. If the primary judge ultimately determines that just compensation should be in an amount greater than the amount contended for by the Council, then there is no relevant injustice in the Council being required to pay that higher amount as will justly compensate Noubia.
30. The Council's second claimed injustice is that the admission of the joint report of the engineers may trigger, and in fact has triggered, further joint conferencing and reporting by the parties' planners and valuers. Further cross examination may be required in relation to this further evidence of the planners and valuers. Again, this process does not cause relevant injustice to the Council. The taking of further steps on the remittal of the matter is to be expected, so that the costs of doing so does not cause the Council to suffer injustice. However, if there be a basis for making an order for costs to compensate the Council for the costs incurred in obtaining and responding to this further evidence, the Council can seek and the Court below can order costs in favour of the Council. This was recognised by the primary judge (at [30]).
31. For these reasons, the Council has not established any of the three matters that would be sufficient to warrant leave being granted to appeal against the primary judge's decision to allow the parties to rely on the joint report of the engineers at the hearing of the remitted matter. Leave to appeal should be refused. The Council should pay Noubia's costs of the application for leave to appeal.
32. I note the Court made the following orders: 1. The summons for leave to appeal is dismissed. 2. The applicant is to pay the respondent's costs of the application for leave to appeal.

Amendments 16 March 2022 - Correction to typographical error at [18] and [67]. 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: 16 March 2022