Huggins v State of New South Wales; NA & J Investments Pty Ltd v State of New South Wales; Commins Partnerships Pty Ltd v State of New South Wales

Civil Procedure Act 2005 LEGISLATION CITED : Water Act 1912 Water Management Act 2000

Hutchins Pastoral Co Pty Limited v The Minister Administering the Water Management Act 2000 and the State of New South Wales L & W Developments Pty Ltd v Della [2003] NSWCA 140 Majik Markets Pty Ltd v S & M Motor Repairs Pty Ltd (No 3), (New South Wales Supreme Court, Young J, 13 October 1987, unreported) Premier Sports Australia Pty Ltd v Dodds [2001] NSWSC 707 (Palmer J) CASES CITED : Rexam Australia Pty Ltd v Optimum Metallising Pty Ltd [2002] NSWSC 916 RSL Com v Mobile Tron [2001] NSWSC 819 Sterling Pharmaceuticals Pty Ltd v Boots Co (Australia) (1992) 34 FCR 287 The Environmental Group Ltd v Croudace (New South Wales Supreme Court, Santow J, 7 August 1998, unreported) Williams v Hunt [1905] 1 KB 512

30055/2009 Stephen Leslie Huggins (First Plaintiff) Carol Margaret Huggins ( Second Plaintiff) State of New South Wales (Defendant)

PARTIES : 30058/2009 NA & J Investments Pty Ltd (Plaintiff) State of New South Wales (Defendant)

30061/2009 Commins Partnership Pty Ltd (Plaintiff) State of New South Wales (Defendant)

FILE NUMBER(S) : SC 30055/2009; 30058/2009; 30061/2009

COUNSEL : D Priestley (Plaintiffs) M Lynch (Defendant)

SOLICITORS : Taylor & Whitty (Plaintiffs) Crown Solicitor's Office (Defendants)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30055/2009 - STEPHEN LESLIE HUGGINS & ANOR v STATE OF NEW SOUTH WALES 30058/2009 - NA & J INVESTMENTS PTY LTD v STATE OF NEW SOUTH WALES 30061/2009 - COMMINS PARTNERSHIP PTY LTD v STATE OF NEW SOUTH WALES

JUDGMENT (Stay of proceedings) 1 HER HONOUR: By notices of motion filed 22 September 2009, the defendant in all three matters seeks an order, pursuant to section 67 of the Civil Procedure Act 2005, that the proceedings be stayed pending the finalisation of proceedings of Hutchins Pastoral Co Pty Limited v The Minister Administering the Water Management Act 2000 and the State of New South Wales commenced in the Land and Environment Court of New South Wales number 41292/2006. 2 The plaintiffs in all proceedings relied on the affidavit of Joshua Daniel Wolff sworn 9 October 2009. The defendant relied on the affidavit of Jacqueline Townsend affirmed 25 September 2009 and 7 December 2009. The proceedings in this Court 3 There are three proceedings in this Court, 30055/2009, 30058/2009 and 30061/2009. In matter number 30055/2009, the plaintiffs are Stephen Leslie Huggins and Carol Margaret Huggins. In matter number 30058/2009, the plaintiff is NA & J Investments Pty Ltd. In matter number 30061/2009, the plaintiff is Commins Partnership Pty Ltd. The defendant in all three Supreme Court proceedings is the State of New South Wales ("the State"). The plaintiffs plead that they purchased properties in the Lower Murrumbidgee farming area of New South Wales and that their properties were said to have held an existing bore water licences. These proceedings in this Court were commenced in late July 2009. 4 In this Court, the plaintiffs seek damages and a declaration of estoppel, as well as interest and costs. It is alleged that they suffered loss as a consequence of negligent oral misstatements made by servants of the State as to the State's intentions to regulate farmers' water entitlements under the Water Act 1912 and the Water Management Act 2000. The alleged misrepresentations were the result of enquiries made in May 2005 by the plaintiff of the defendant as to future ground water entitlements of licence holders to obtain access to ground water in the Lower Murrumbidgee region in New South Wales. It is alleged the defendant represented to the plaintiff that the water entitlements would be reduced in a worst case scenario to 51 per cent of the existing entitlements. In fact, a 2006 Amendment Order amended the Water Management Act and effectively reduced the water entitlements to approximately 18.5 per cent.

5 The plaintiffs assert that one or more employees of the Department of Natural Resources, formerly the Department of Infrastructure Planning and Natural Resources, provided this negligent advice. It is asserted that the State breached an alleged duty owed to the farming ventures and as a consequence of that breach, the plaintiffs purchased properties at what were subsequently said to be prices that had been inflated by the reduced water entitlements. The plaintiffs claim that their farming ventures, the value of their properties and the income able to be derived, have all been diminished. 6 The plaintiffs seek unspecified damages for their alleged loss, as well as declarations that the State is estopped from denying them water entitlements at a level less than the level that was allegedly represented to them in 2005. 7 There are four other proceedings in this Court where the plaintiffs are also plaintiffs in the Land and Environment Court proceedings. The plaintiffs in the other proceedings in this Court are Hutchins Pastoral Company Pty Ltd, Danwallich Pty Ltd, Delta Creek Pty Ltd, Stewart Ronald Hutchins and Jennifer Hutchins. These proceedings have been stayed by consent until the Land and Environment Court proceedings have been finalised.

The Land and Environment Court proceedings 8 In separate class four proceedings in the Land and Environment Court 41292/2006, some 31 farming ventures, all of which are said to hold bore water licences under the Water Act 1912, are suing the State for damages in respect of claims that the 2006 Amendment Order and the Water Management Act 2000 are invalid on various grounds and for misrepresentations.

9 The plaintiffs' claim includes each of the three plaintiffs in the Supreme Court proceedings discussed earlier in this judgment The water licences the subject of the Land and Environment Court litigation are the same as those referred to in the Supreme Court proceedings. 10 The plaintiffs' Second Further Amended Points of Claim in the Land and Environment Court pleads (at [13]) that: "The 2006 Amended Plan or the 2006 Amendment Order is invalid as a purported amendment of the Plan and/or as a law of New South Wales and is ultra vires and of no effect."

And (at [13.11]): "The making of the misrepresentations alleged below in the course of and for the purposes of the plan making functions or purported plan making functions such that the said functions were exercised in an anomalous manner or in bad faith. " (sic) 11 The "Particulars of Misrepresentations" and "Particulars of Falsity" set out at 1-8 and 1-9 respectively, overlap with the particulars in the Supreme Court statement of claim by S & C Huggins which plead that the claims of the alleged "representations" were "materially false and misleading" (at [15]-[20]) and were made negligently (at [21]). There are similar pleadings in the other two Supreme Court matters - [14]-[21] in the NA & J Investments matter and [13] - [22] in the Commins matter. 12 Counsel for the State submitted that there is considerable duplicity in the nature of the principal cases brought by the same three plaintiffs in both the Land and Environment Court and the Supreme Court proceedings. Because of the confusing way in which the Land and Environment Court Points of Claim are pleaded, there is some ambiguity as to the extent of that overlap. On one view, the plaintiffs are seeking relief for the similar causes of action in two courts at the one time and that amounts to an abuse of process: Williams v Hunt [1905] 1 KB 512. Counsel for the plaintiffs submitted that there are two separate causes of action, one in each court and they are distinct. The plaintiffs also submitted that they would suffer financial hardship, yet no evidence to this effect was forthcoming. In my view, there will be an overlap of evidence given in both this Court and the Land and Environment Court. If both are heard at the same time, the Courts may make different factual findings. 13 However, there is no ambiguity in the duplicity of the relief sought in both sets of proceedings. In the Land and Environment Court proceedings, the plaintiffs jointly seek at [22] of the Second Further Amended Points of Claim "the restoration or making good in monetary terms of their loss and damage" said to arise from the claim at [21] of alleged breaches of the Water Management Act 2000 or Regulations" or, [22.5] in the alternative, "damages": The Land and Environment Court Second Further Amended Points of Claim sets out various forms of relief including at [22.6] a claim for "compensation". 14 At [24] of the Land and Environment Court Second Further Amended Points of Claim, the plaintiffs seek compensation pursuant to s 87AA of the Water Management Act for the reduction to their water entitlements created by the 2006 Amendment Order. 15 At [27] the plaintiffs plead: "In the premises, the Applicants ask the Court to make the declarations sought and orders for such compensation by way of appeal or otherwise that is just in all circumstances of the case, or alternatively to make the directions for the assessment and payment of same" 16 At [54] the plaintiffs plead: "By reason of the matters pleaded the Applicants are entitled to be paid just compensation, taking into account market value by the First and Second Respondents in accordance with the Just Terms Act".

The stay of proceedings 17 Section 67 of the Civil Procedure Act 2005 provides that 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. Additionally, the State of New South Wales relies on the inherent jurisdiction of this Court. This discretion is judicial and to be exercised only upon relevant grounds at law. The overriding principle involves the question of what the interests of justice require. It is more convenient and consistent with the 'overriding purpose' of the Civil Procedure Act (ss 56-58), that all or as many disputes as possible between the same parties are determined in the one proceeding and any ultimate relief to be obtained is obtained as quickly and cheaply as possible. 18 In so far as a stay of proceedings is concerned, in L & W Developments Pty Ltd v Della [2003] NSWCA 140, Mason P (with whom Giles and Santow JJA agreed) referred to Sterling Pharmaceuticals Pty Ltd v Boots Co (Australia) (1992) 34 FCR 287, where Lockhart J said (at 290-1):

"The court has a general power to control its own proceedings, and that power extends to enable it to order a temporary stay of proceedings in various circumstances including the case where proceedings are pending in another court and it is desirable that those proceedings should proceed to their conclusion first…. The court is a superior court of record and obviously may control its own proceedings including, where appropriate, the exercise of a power to grant a stay….

In my opinion relevant considerations to be taken into account in the present case include the following:

Which proceeding was commenced first. Whether the termination of one proceeding is likely to have a material effect on the other. The public interest. The undesirability of two courts competing to see which of them determines common facts first. Consideration of circumstances relating to witnesses. Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted. The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues. How far advanced the proceedings are in each court. The law should strive against permitting multiplicity of proceedings in relation to similar issues. Generally balancing the advantages and disadvantages to each party." 19 The Court of Appeal in L & W Developments v Della continued: "53 Several decisions in the Equity Division have recognised this distinction in a context similar to the present, where a defendant to commercial contract proceedings in the Equity Division has applied to the Industrial Relations Commission pursuant to s106 of the Act seeking to have the underlying contract avoided or varied. These cases include Majik Markets Pty Ltd v S & M Motor Repairs Pty Ltd (No 3 ) , (New South Wales Supreme Court, Young J, 13 October 1987, unreported); The Environmental Group Ltd v Croudace (New South Wales Supreme Court, Santow J, 7 August 1998, unreported); Premier Sports Australia Pty Ltd v Dodds [2001] NSWSC 707 (Palmer J); RSL Com v Mobile Tron [2001] NSWSC 819 (Barrett J) and Rexam Australia Pty Ltd v Optimum Metallising Pty Ltd [2002] NSWSC 916 (Einstein J). These decisions correctly recognise the distinction between a stay based on forum non conveniens and a temporary stay of proceedings in one court to enable related proceedings in another to proceed first to determination (see esp RSL Com at 14; Rexam Australia Pty Ltd at 21-22).

54 In The Environmental Group Ltd , Santow J cited and applied the decision of Lockhart J in Sterling Pharmaceuticals Pty Ltd . His Honour then analysed the nature of the Supreme Court proceedings which he had jurisdiction to determine and of the related proceedings in the Industrial Relations Commission which he did not have jurisdiction to determine. He stated his conclusion in terms which are equally applicable to the present situation: Several things are therefore clear. First, neither the Supreme Court nor the IRC can deal with all matters in dispute between the parties. Second, if all are to be litigated it would be inevitable there will be two sets of proceedings. Thus while 'the law should strive against permitting multiplicity of proceedings in relation to similar issues', here a multiplicity of proceedings may prove unavoidable. It is true it could be said that hearing one set of proceedings before the other makes it less likely the second set will ever be litigated. But that begs the question which proceedings should be heard first and either party may claim first right to be heard.

55 Santow J then examined relevant factors that bore on the granting of a stay and their relative weight in the final balance. These included: The impact of the Supreme Court and IRC proceedings on each other. The relative progress of each proceedings. Conduct of the parties with respect to the relative progress of each proceedings. The fact that the Supreme Court proceedings were commenced first in time. Not all parties to the Supreme Court proceedings were parties to the IRC proceedings. Possible jurisdictional problems in relation to the IRC proceedings and how they bore on the stay application. Financial disadvantage. (Cf also the useful checklist offered by Einstein J in Rexam at [21].) 56 Santow J recognised that the defendants bore the onus of satisfying him that the requirements of justice required an exercise of discretion in favour of a stay. …" 20 The Land and Environment proceedings were commenced about three years earlier than these Supreme Court proceedings. The pleadings in that Court have undergone a number of refinements. They are listed in February 2010 for directions. There are 33 plaintiffs in the Land and Environment Court proceedings. Seven of the plaintiffs in the land and Environment Court are plaintiffs in this Court. Four of those plaintiffs have consented to the stay of their Supreme Court proceedings pending determination of the Land and Environment Court proceedings. Only these three have not. Most of the issues in dispute will be determined in the Land and Environment Court. It is my view that the negligent misstatement or misrepresentations alleged in this Court will cover the same evidence as the cases pleaded in the Land and Environment Court. It would be undesirable to have the possibility of two courts making different factual findings. Thirty of the 33 plaintiffs are content to have their proceedings heard in the Land and Environment Court. Only three are not. The defendant has discharged its onus of proof. I am satisfied that the requirements of justice require that a stay of proceedings be granted. 21 I order that the proceedings be stayed pending the finalisation of proceedings of Hutchins Pastoral Co Pty Limited v the Minister of Ministering the Water Management Act 2000 and the State of New South Wales commenced in the Land and Environment Court of New South Wales number 41292/2006 or until further order of the Court. Costs are reserved.

(1) I order that proceedings in the Supreme Court of New South Wales of Stephen Leslie Huggins & Anor v State of New South Wales , number 30055/2009; NA & J Investments Pty Ltd v State of New South Wales , number 30058/2009; and Commins Partnership Pty Ltd v State of New South Wales , number 30061/2009 be stayed pending the finalisation of proceedings of Hutchins Pastoral Co Pty Limited v The Minister of Ministering the Water Management Act 2000 and the State of New South Wales commenced in the Land and Environment Court of New South Wales number 41292/2006 or until further order of the Court.

(2) Costs are reserved. **********

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