Dial a Dump Industries Pty Ltd v Roads and Maritime Services

Claims for Compensation Made by ALF, DADI and Boiling as Determined by Valuer General

1. On 13 March 2015 ALF, Boiling and DADI made a single claim (the "combined March claim") for compensation under s 39 of the Act totaling $284,466,805.
2. As Dr Brunton deposes, in answer to question 3.2 of the combined March claim, "What is your interest in this land?", an "X" was placed next to the words "Registered Proprietor" and "Lessor". Although the form provided a space to place a cross next to the alternate words "Lessee", "Residential Tenant", "Licensee", and "Other", those boxes were not marked.
3. Then on 22 May 2015 ALF, DADI and Boiling each made separate claims for compensation ("the May claims") under s 39 of the Act, this time totaling $413,690,760 comprising: 1. $218,488,218 claimed by ALF; 2. $195,192,542 claimed by DADI; and 3. $10,000 claimed by Boiling.
4. In answer to the question "What is your interest in this land" in the May claim lodged by ALF, an "X" was placed next to the word "Registered Proprietor" and "Other". The box entitled "Lessor" was not marked. In answer to the question "if you ticked the box 'other' provide details here of your interest in the land", the following response was given on page 1: Holder of environment protection licence from EPA on part of Lot 2.
5. In answer to the question "What is your interest in this land" in the May claim lodged by DADI, an "X" was placed next to the word "Licensee" and "Other". In answer to the question "if you ticked the box 'other' provide details here of your interest in the land," the following response was given on page 1: There is no documented licence, however Boiling as lessee of the land permitted Dial a Dump Industries Pty Ltd to operate a waste and landfill business on the land.
6. In answer to the question "What is your interest in this land" in the May claim lodged by Boiling, an "X" was placed next to the word "Lessee" and "Other". In answer to the question "if you ticked the box 'other' provide details here of your interest in the land," the following response was given on page 1: As a holder of an environment protection licence over part of the Land which is considered an interest in Land.
7. Annexure 'A' on page 5 of the May claim lodged by Boiling states: Boiling Pty Ltd holds the lease and EPL for the Land on trust for the Dial Dump Industries Trust. Boiling permits Dial a Dump Industries Pty Ltd to operate the landfill and waste business on the land it leases from Alexandria Landfill Pty Ltd and on that part of the land that its EPL applied. All of Boiling's expenses in relation to the lease and the EPL are covered/reimbursed by Dial a Dump Industries Pty Ltd. Accordingly, although it would otherwise be claimed that Boiling Pty Ltd has lost a valuable asset in the lease and EPL, because it is Dial a Dump Industries Pty Ltd that carries on the business and to avoid double dipping, Dial a Dump Industries Pty Ltd not Boiling will make a claim for lost business expenses and value. Likewise, because Boiling's interests are aligned with Alexandria Landfill Pty Ltd and Dial a Dump Industries Pty Ltd, Boiling is not claiming disturbance costs other than an estimate to obtain legal and valuation advice on any determination.
8. In addition to the difference in quantum (approximately $130 million) between the combined March claim and the May claims, the basis on which some of the entities sought to establish their interest in the land and the categories of the claimed compensation changed.
9. For example, the amount claimed for market value in the combined March claim by the three entities was $276,550,000. In the May claims, the amount claimed by ALF for market value of its interest was $212,450,000 and the amount claimed by DADI for market value of its interest was $192,581,000.
10. On or about 30 July 2015, the Valuer General ("VG") issued determinations of compensation in respect of the claims for compensation as follows: 1. $70,019,285 for ALF; and 2. $11,000 for Boiling.
11. On 19 August 2015 RMS issued a letter to DADI rejecting its claim for compensation on the basis that it had not established to RMS's satisfaction that it had an interest in land. The VG did not issue a determination of compensation in respect of the claim by DADI and RMS has not made an offer of compensation to DADI under s 42 of the Act.
12. Proceedings nos 30702 of 2015 and 30703 of 2015 have been commenced by ALF and DADI respectively in the Court.
13. Boiling has not commenced any proceedings in the Court in respect of the acquisition of Lot 2. It appears to have accepted the compensation offered although it has not completed the required releases.
14. Although the $195,192,542 claim by DADI is described in its Class 3 application filed on 14 August 2015 as a claim for "market value" (which includes a claim for disturbance of $2,611,542), Mr Ian Hemmings SC, counsel for DADI, informed the Court that in fact the entirety of the claim is for disturbance under s 55(d) and 59(f) of the Land Acquisition (Just Terms Compensation) Act 1991 ("the Act").

Power to Order a Separate Question

1. Rule 28.2 of the Uniform Civil Procedure Rules 2005 ("the UCPR") provides that a "court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings". In r 28.1 of the UCPR the term "question" is defined to include an "issue'.
2. In making such an order, the Court must have regard to the overriding purpose rule contained in s 56 of the Civil Procedure Act 2005 ("the CPA") of the just, quick and cheap resolution of the real issues for determination in the proceedings.
3. The legal principles applicable to the exercise of the Court's discretion to order the determination of a separate question are well known. They were summarised by Jagot J in Metropolitan Local Aboriginal Land Council v Minister Administering the Crown Lands Act [2006] NSWLEC 57; 145 LGERA 276 (at [12]) and restated by her Honour in Greg Young v Parramatta City Council [2006] NSWLEC 116; (2006) 144 LGERA 193 (at [6]-[9]). The principles were recently usefully reformulated and distilled by Biscoe J in 820 Cawdor Road Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 8; (2013) 195 LGERA 170 as follows (at [10]): (a) Generally speaking, all issues should be tried and decided at the same time. (b) It is for the party seeking the order to show to the Court that separate decision of a question is appropriate. (c) Separate decision of a question is likely to be appropriate where it can clearly be seen that it will facilitate the just, quick and cheap resolution of the proceedings or the central issues in the proceedings. This gives effect to s 56 of the Civil Procedure Act. Thus, the procedure needs to be fair and involve real savings in time and cost. (d) Separate decision of a question may be appropriate where it is critical to the outcome of the proceedings and (at least if decided in one way) will bring the proceedings to an end. (e) In particular circumstances separate decision of a question may be appropriate even if it will not bring the proceedings to an end. This may occur where the decision will substantially narrow the field of controversy by obviating unnecessary and expensive hearing of other questions or where the decision carries with it a strong prospect that the parties will then be able to agree upon resolution of the proceedings. But on such occasions care must be exercised lest fragmentation of the proceedings (particularly where the exercise of appeal rights is borne in mind) brings delay, expense and hardship greater than that which the making of an order was intended to avoid. (f) Separate decision of a question is unlikely to be appropriate where it may involve the credibility of witnesses which is material to remaining issues in the proceedings (and thus require the remaining issues to be dealt with by another judge). (g) Where the question sought to be separated involves a question of law, there should be a clear definition of what the point of law raised is and all the facts upon which that question has to be considered should be agreed or clearly ascertainable. (h) Where the facts upon which decision depends are contentious, confidence in the utility of the separate question process may be less likely.
4. These principles have been endorsed and applied by this Court on numerous occasions, including in the context of claims for compensation for compulsory acquisition (see, for example, Hunter v Wyong Shire Council [2012] NSWLEC 250 at [12]-[15]; Fobitu Pty Ltd v Marrickville Council [2012] NSWLEC 81 at [11]; Wollongong City Council v Vic Vellar Nominees Pty Ltd [2011] NSWLEC 138 at [19] and Reysson v Roads and Traffic Authority [2011] NSWLEC 153 at [10]).
5. In Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182, the Court of Appeal restated the applicable legal principles in the following way (at [87]-[92]): 87 In 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). 88 One 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). 89 Pausing 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.) 90 Einstein 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. 91 In 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 … 92 However, 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 …
6. With respect to the exercise of the discretion to order a separate question, the Court of Appeal went on to observe that (at [95]-[96]): 95 The 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. 96 … 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. …
7. Therefore, in summary, cogent reasons, such as anticipated savings in time and expense in relation to the final hearing, should be shown to justify departure from the orthodox position that all issues in a proceeding are to be determined at the one time (Allandale at [10], [92] and [95]-[96]).
8. Where the resolution of the question would be dispositive of the litigious controversy, or would substantially narrow the field of controversy, this will favour the making of an order for a separate question. This is not a necessary circumstance, but it may be a sufficient one (Allandale at [88]-[89] and [95]).
9. Conversely, circumstances in which separate determination of an issue may not be appropriate include: 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; or where there is a possibility that the resolution of the separate issue will not finally determine the proceedings (Allandale at [90]-[91] and [94]).

The Separate Question Should be Ordered for Determination

1. As stated above, at this stage RMS does not accept that DADI has a interest in land sufficient to engage the Act. If it does not, then plainly DADI's claim for compensation will fail because the Act will not apply.
2. It should be noted at this juncture that a foreshadowed application by RMS to adjourn the hearing of the application for a separate question on the basis that it had only recently been served with the evidential material said to comprise DADI's interest in land for the purposes of the Act was expressly not proceeded with.
3. DADI's submissions in favour of the Court ordering a separate question may be put succinctly. In short, given the magnitude of the quantum claimed and the complexity of proceedings (a contention not disputed by RMS), and given the wholly dispositive nature of the question if answered adversely to DADI, there is considerable utility in making the order. This is because neither the parties nor the Court ought to be required to expend valuable resources in hearing and determining the proceedings in full, with all of its attendant costs (for example the commissioning of expert reports), if the matter can be completely disposed of by a negative answer to the separate question.
4. In my opinion, DADI is correct. In the present case, there is a clear demarcation of an anterior issue, the early determination of which will either wholly dispose of the proceedings or, if not, will save costs in the preparation of expert evidence focussed uniquely upon the sole question of compensation.
5. In reply, RMS argued that: 1. first, having regard to s 56 of the CPA, the determination of the separate question would not result in any savings in time or costs because, given the size of the claim, whichever party lost the separate question would appeal the decision. This would have the effect of delaying the final resolution of not only the DADI proceedings, but the related Class 3 proceedings commenced by ALF (matter no 30702 of 2015); 2. second, because it was likely that the multiple claims for compensation would be heard together (the DADI and ALF claims, with Boiling potentially joined as a party to one or both claims), it was preferable that all of the issues be determined compendiously in the one set of proceedings to avoid a multiplicity of litigation. Various illustrations were given from the authorities of examples where the question of whether a party had an interest in land in the relevant sense was decided together with the other issues in the case; 3. third, the separate question involved mixed issues of fact and law; 4. fourth, relying on the material contained in Dr Brunton's affidavit concerning the manner in which DADI has described its interest in the land, the question as framed was vague and not adequately specific insofar as it failed to particularise the nature of the interest that DADI asserted it possessed; and 5. fifth, the separate determination of the question as framed did not satisfy the principles espoused above. This was in essence a repetition of the first submission.
6. The submissions can be rejected for the following reasons. First, the spectre of an appeal thereby fragmenting and delaying the final determination of the DADI and ALF claims, and augmenting the cost of the DADI proceedings, is not determinative (Perilya Broken Hill Limited v Valuer-General (No 5) [2015] NSWLEC 20 at [82]). Given the size of the claim, it is likely that, applying this logic, whether separately determined or not, the losing party will appeal the decision of the Court. Where, in a claim of this magnitude, the proceedings may be relatively swiftly disposed of if the question is answered in the negative, resulting in significant savings in time and costs to the parties, even if the outcome may be challenged elsewhere, the Court, ought to facilitate this by ordering the separate question.
7. Second, at this stage, the DADI proceedings and the ALF proceedings have not been consolidated and Boiling has not been joined as a party. By agreement with the parties, such application (presently filed) are to be adjourned until after the pleadings have closed. It is therefore difficult to comprehend the antipathy of RMS to the application for a separate question on this basis. The authorities upon which RMS relied in this regard, each turned on their own facts, and I must deal with the circumstances of this application, which do not presently concern a single proceeding with multiple claimants.
8. Third, although the separate question involves a question of mixed fact and law, this is not fatal to the application. The authorities in this Court are replete with successful applications where such issues are intertwined. In any event, RMS had now been served with all of the evidence upon which DADI sought to rely on to demonstrate that it had a sufficient interest in land to engage the Act. Moreover, if further particulars are needed of the way in which DADI claimed the relevant interest, then DADI has expressed a willingness to provide them, or alternatively, a preparedness to file written submission early in order to provide this information to RMS.
9. Fourth, in my opinion, the question, as now articulated, is sufficiently clear and precise. And if it is not, then to reiterate, further particulars of the nature of the interest in land can be sought.
10. Mr Peter Tomasetti SC, counsel for RMS, sought to argue that in order for the Act to apply it was necessary for DADI to establish both an interest in land and the value of that interest triggered by the acquisition, and that therefore, little would be gained by ordering a separate question dealing only with the former. This contention is plainly wrong. As the Court of Appeal explained in Health Administration Corporation v George D Angus Pty Ltd [2014] NSWCA 352 (at [69]-[71]): 69. The appellant's argument proceeds on the assumption that the terms and limitations of the respondent's interest in the Yabtree Street land govern, as a matter of law, the question of whether the respondent reasonably incurred a loss of income and/or profits as a direct and natural consequence of the acquisition. Herein lies the fallacy of its contention. Those terms and limitations were relevant to the assessment of the market value of the interest acquired but not to the assessment of any loss attributable to post-acquisition disturbance. 70. In the present case, as the respondent's tenancy was terminable on one month's written notice, it had no market value. But the fact that it was compulsorily acquired thereby converted the relevant interest into an entitlement to claim compensation in accordance with, relevantly, Div 4 of Pt 3 of the Just Terms Act: see s 37. That acquisition gave rise to loss attributable to disturbance where that loss related to the actual use of the land and was reasonably incurred as a direct and natural consequence of the acquisition. That consequence was triggered by the compulsory extinguishment of an interest in the land as defined: the nature of that interest mattered not for the purpose of s 59(f). Its work was done when it was acquired and its only relevance was its influence on its market value as at the date of acquisition. 71. In other words, the respondent's disturbance losses were triggered by the extinguishment of its interest in the Yabtree Street land but were not referable to it. On the contrary, those losses were referable to the actual use of the land as a direct and natural consequence of its acquisition.
11. RMS also sought to argue that, once DADI's points of claim were filed, DADI was, by characterising its claim as one exclusively concerned with disturbance, lodging a new claim for compensation under the Act (see George D Angus Pty Limited v Health Administration Corporation [2013] NSWLEC 212 at [44] per Preston J where his Honour noted "points of claim cannot be used as an alternative means to lodge a new claim for compensation under Part 3 of the Act", undisturbed on appeal). It is not clear in that case if his Honour was proposing that there must be a strict correlation between the compensation ultimately claimed and the Class 3 application, for the claim to be maintainable. I doubt this was his Honour's intended meaning. Rather, the Chief Judge appeared to be opining no more than a self-evident proposition that where the difference between the claim as pleaded and the claim contained in the Class 3 application is great, having regard to the amounts claims, the bases of assessment for the categories of loss, and any additional financial costs then, in fact, a new claim for compensation has been lodged. This is not, at this nascent stage at least, the present case (cf George D Angus at [45] per Preston J).
12. For all these reasons, and having regard to the overriding purpose contained in s 56 of the CPA, and the legal principles outlined above as to the appropriateness of ordering a separate question, I make the order sought by DADI.

Orders

1. I agree with the submission of the parties that until such time as the separate question is determined, it is appropriate not to make any further orders with respect to the pleading to be filed by the parties in either the DADI or ALF matters, in order to avoid multiple amendments to those documents.
2. It is also appropriate to standover the hearing of the notices of motion by RMS to consolidate the DADI and ALF proceedings, and to join Boiling as a party to those proceedings, until after the determination of the separate question, and moreover, that these applications should be determined only after the pleadings have been closed. For administrative convenience, however, it is appropriate that the two sets of proceedings be ordered to travel together.
3. Accordingly, the orders of the Court are: 1. that the following separate question be determined under r 28.2 of the UCPR: Whether Dial a Dump Industries Pty Ltd had an "interest in land" as at the acquisition date for the purposes of s 5 of the Land Acquisition (Just Terms Compensation) Act 1991, as defined in s 4 of that Act, in, over, or in connection with, Lot 2 DP 1168612. 1. that the parties have leave to approach the Registrar forthwith for the allocation of a hearing date for the separate question (estimate of two days) not before 1 February 2016; 2. that DADI file and serve its submissions in respect of the hearing of the separate question by 13 November 2015; 3. that RMS file and serve its evidence and submissions in respect of the hearing of the separate question by 11 December 2015; 4. that DADI file and serve any evidence and submissions in reply by 15 January 2016; 5. that RMS's notices of motion for consolidation of the proceedings in matter nos 30702 (ALF) and 30703 (DADI) of 2015, and the joinder of Boiling, be stood over until after the final determination of the separate question referred to above, and after the pleadings in both sets of proceedings have closed; 6. that matter nos 30702 and 30703 of 2015 travel together; 7. the costs of DADI's application for an order for the determination of a separate question are reserved; and 8. liberty to restore on 48 hours written notice.

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