Kasempa PL v Surf Coast SC (Land Valuation) [2007] VCAT 163

This application is not struck out pursuant to the VCAT Act 1998, s.78(1)(f).

Mr Mitch McKenzie of counsel, instructed by Quinn and Quinn, Solicitors.

Mr Peter Cawthorne of counsel, instructed by Moray and Agnew, Solicitors.

1 The substantive claim in this case is the applicant's ('Kasempa') claim for compensation made under the Planning and Environment Act 1987, s.94(2) ('the planning Act') following a Tribunal order on 10 August 2000 directing the responsible authority (Surfcoast) to amend a planning permit under ss.87 and 91 of the planning Act.

2 That compensation claim was lodged by Kasempa on 9 August 2006, a day short of six years from the date of the Tribunal order.

3 The respondent/responsible authority applies under the VCAT Act 1998 s.78(1)(f), to strike out Kasempa's claim on the ground that it is vexatious, being time barred. Section 78(1)(f) reads:

This section applies if the Tribunal believes that a party to a proceeding is conducting the proceeding in a way that unnecessarily disadvantages another party to the proceeding by conduct such as .... vexatiously conducting the proceeding;

(2) If this section applies, the Tribunal may order that the proceeding be dismissed or struck out, if the party causing the disadvantage is the applicant ... ... ...

4 The time bar application was based in the alternative upon:

i

a two year limitation under the Land Acquisition and Compensation Act 1986 ('LACA') s.37(2) being, which reads:

Subject to section 106(1), a claim for compensation under this section must be made within two years after the date of acquisition.

ii

a six year limitation under the Limitations of Actions Act 1958 ('LAA') s. 5(1)(d) which reads:

The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued.....

(d)

Actions to recover any sum recoverable by virtue of enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.

5 A critical element in both alternatives is the trigger date from which time (either two years or six years) runs.

6 On 24 June 1998 Kasempa obtained its first planning permit for development on the subject land.

7 On 11 August 1998 Kasempa obtained its first subdivision permit no. 98/7421 in respect of the above development.

8 On 21 August 1998 the subdivision permit was amended to correct a clerical error.

9 On 4 September 1998 the amended subdivision permit was amended a second time by an amendment to the preamble permitting a modification to an easement.

10 Kasempa was the subject of a s.87 PEAct 1987 application for amendment of its amended subdivision permit issued on 4 September 1998.

11 On 10 August 2000, Member Hewet and I found that there had been a material mistake by Surfcoast in the issue of the subdivision permit and ordered the permit be amended by Surfcoast[1].

12 To date, Surfcoast cannot produce the amended permit which it needed to issue 'without delay' pursuant to the Planning and Environment Act 1987, s.91(2).

13 We also made an order as to costs against both the responsible authority and Kasempa, with a division of liability. We ordered that party/party costs incurred after 3 December 1999[2], be paid by Kasempa to the s.87 applicants and the Responsible Authority.

14 Mr McKenzie for Kasempa pointed out that substantial portion of its current compensation application included the costs which I had awarded against his client in 2000. Those costs amount to $18,656.30.

15 He drew to my attention that it may not be prudent for me to adjudicate on the merits of his client's compensation application under the Planning and Environment Act 1987, s.94, as his client may perceive that I would not bring an independent and impartial mind to that (substantial) part of the claim.

16 This hearing however, is limited to the discrete point of the merits of a strike out application under the VCAT Act 1998 s.78. His client did not object to my adjudicating upon this preliminary point, so I issued the following direction:

In the event the Responsible Authority is unsuccessful on the "time barred" issue, Tonia Komesaroff will disqualify herself from the hearing on the merits of the s.94 Planning and Environment Act 1987 application for compensation because of a perceived conflict arising from her decision in the s.87 amendment proceeding, to award costs against this s.94 applicant.

Wrongful issue of permit that triggered the s.87 amendment/cancellation application

17 Surfcoast submitted time runs from the date of issue of the flawed permit on 4 September 1998, because it is that action that triggered the s.87 application and subsequent compensation claim. It relied on Sullivan v Oil Company of Australia Ltd[3] which in turn relied upon West Riding County Council v Huddersfield Corporation[4] and Hillingdon London Borough Council v ARC Ltd[5].

18 I agree with Mr McKenzie that the trigger date under section 94(2) is a direct result of a permit cancellation or amendment.

19 In my opinion, time cannot run before the cause of action (in this case for compensation) accrues. Such a cause of action does not accrue until, pursuant to the Planning and Environment Act 1987, s. 94(2) the permit is amended under Division 3 of Part 4 of that Act. It is the act of amendment by the Responsible Authority which founds the claim. That one can point to the source of the problem is not to the point, for the Tribunal may have exercised discretion not to direct the council to amend the disputed permit.

20 The authorities cited are not to the contrary, they only deal with unquantified sums of money at a certain point, but not with the cause of action which triggers the statutory claim.

21 In the alternative, Surfcoast submitted time runs from the incurring of the liability for the expenditure, as opposed to the date upon which the permit was amended pursuant to the Tribunal's order.

22 Surfcoast applies this argument to the following particulars of claim lodged by Kasempa:

The section 87 applicant's (Pitt) costs paid by Kasempa under VCAT order

23 Surfcoast's argument revolves around the principle that they are time barred even applying the six year limitation, because the inchoate liability for these costs was incurred before the VCAT Order on 10 August 2000, when the bills were rendered by the surveyor or consultants etc, or when solicitors and counsel were briefed and performed their work.

24 An immediate flaw applies to the $2,050 surveyor's costs for Grant St Quentin which work was performed after the Tribunal order, necessitated by the need to submit an amended plan of subdivision and which is accordingly within a six year limitation period.

25 This argument fails for the same reason as the previous argument, in that it is the cause of action that founds a claim, not the expenditure of monies that comprise an inchoate liability. Only when the permit is amended under s.94(2) does any liability arise. Until that date the monetary expenditure has no status.

26 In the further alternative, Surfcoast submitted time runs from the date of the Tribunal's Order dated 10 August 2000, even though the Tribunal does not itself amend the permit, merely directs the responsible authority to issue an amended permit. Mr McKenzie demurred, submitting that time only runs from the date of issue by council of the amended permit.

27 As Surfcoast could not produce the amended permit, it asked me to assume it issued soon after 10 August 2000. Kasempa objected, submitting it was incumbent upon council to produce the document, as it was the physical document, the actual amended permit, that triggered its right to compensation under s.94(2) and which started the clock ticking and time running.

If a permit is cancelled or amended under this Division the responsible authority is liable to pay compensation to any person who has incurred expenditure or liability for expenditure as a result of the issue of the permit in respect of any of that expenditure which is wasted because the permit is cancelled or amended.

28 I advised I would give Surfcoast the opportunity to look once again for the document, if it transpired that the physical document was critical to my decision. This would only occur if:

i

I accepted Surfcoast's submission that the two year limitation period under s.37(2) LACA applied; and

ii

I also decided that Kasempa's application was so utterly hopeless under s.78 that under no event could Kasempa obtain an extension of time under s.106 LACA.

29 Kasempa has made no such s.106 extension application, and an issue is whether, if I strike out this proceeding, Kasempa could apply afresh to the Tribunal under s.106 for such an extension to lodge a compensation application, without being subject to issue estoppel.

30 Although Surfcoast submitted my decision on 'time bar' was not an issue estoppel to Kasempa's ability to apply for an s.106 extension of time, it reserved the right to raise such an argument at that later point in time.

31 Given my opinion that the cause of action does not arise until the permit is amended by council, and that could not have happened before the Tribunal Order dated 10 August 2000, there is no doubt that Kasempa has brought its claim within a six year period, if the Limitations of Actions Act 1958 ('LAA') s. 5(1)(d) applies. (State of Victoria v Bradto [2006] VCAT 1813 per Bowman J).

32 The 'two year limitation' arises under a link between the Planning and Environment Act 1987 and the Land Acquisition and Compensation Act 1986.

33 The Planning and Environment Act 1987, section 94(5) reads:

Parts 10 and 11 and section 37 of the Land Acquisition and Compensation Act 1986 with any necessary changes apply to the determination of compensation under this section as if a claim for compensation were a claim under section 37 of that Act.

34 The Land Acquisition and Compensation Act 1986, section 37(2) reads:

Subject to section 106(1) a claim for compensation under this section must be made within two years after the date of acquisition.

i

Under section 37 of the Land Acquisition and Compensation Act 1986, it is not absolutely necessary to substitute the word 'date of acquisition' with the words 'date of Tribunal order' or 'date of amended/cancelled permit'.

ii

The determination of compensation referred to in section 94(5) Planning and Environment Act 1987, does not apply to the application for compensation lodged on 9 August 2006.

iii

Pursuant to the Land Acquisition and Compensation Act 1986, sections 106(1) and 106(2), VCAT can extend the two year time limit, pursuant to discretion. That discretion should be exercised in Kasempa's favour, because it would only be an extreme case where the responsible authority suffers prejudice due to the effluxion of time that would justify a refusal of extension. In this case the responsible authority suffers no prejudice because the costs are fixed and easily ascertainable, and there is no witness evidence that is necessary to found the claim.

36 Mr McKenzie distinguished Analed Pty Ltd v Roads Corporation [1998] VSC 174 in which Balmford J accepted without argument the proposition that the limitation period for a claim arising under sections 98, 99 and 105 of the Planning and Environment Act 1987 is two years, by virtue of the s.37 link. Mr McKenzie distinguishes Analed as dealing with a different type of compensation claim, and because it did not deprive the claimant forever of a right to compensation because Balmford J held that there were other rights to compensation that the applicant in that case could trigger.

37 Because section 94(5) incorporates section 37 of the Land Acquisition and Compensation Act 1986 with its two year time limit, necessary changes must be made to make the link relevant between the two Acts. Otherwise section 94(5) merely needed to refer to parts 10 and 11 and could have omitted the section 37 limitation period.

38 The Land Acquisition and Compensation Act 1986, section 106(1) & (2) allow for an extension of time application to be made to the Tribunal.

39 Mr McKenzie submitted that if there is any doubt whether the limitation period is two years or six years the extremely high hurdle that Surfcoast must meet pursuant to the VCAT Act 1998 s. 78 is not met. That extremely high hurdle can only be met if, on the facts, Kasempa's claim is, in the final analysis, manifestly hopeless and untenable. Mr McKenzie referred me to Pizer's Annotated VCAT Act second edition paragraph 3174.

40 In fact, Pizer's paragraph 3174 refers to the extremely high hurdle set by the VCAT Act 1998, s.75 (summary dismissal of unjustified proceedings) and not s. 78 (conduct of proceeding causing disadvantage).

41 The latter s.78 is the one under which this strike out application has been brought, and a perusal of Pizer at paragraphs 3240 reveals an even higher hurdle, being Kasempa's conduct of the proceedings (not their merit) disadvantaging council.

42 Time cannot run before the cause of action (in this case for compensation) accrues. Such a cause of action does not accrue until, pursuant to the Planning and Environment Act 1987, s. 94(2,) the permit is amended under Division 3 of Part 4 of that Act. It is the act of amendment by the Responsible Authority which founds the claim.

43 Council should find the amended permit which it was directed by the Tribunal to issue.

44 All Kasempa has done in this case is to lodge an application for compensation pursuant to the Planning and Environment Act 1987, s. 94(2). It has itemised its claim, served its papers, and there is no allegation of delay, obfuscation or other misconduct against Kasempa, other than that the claim may be time barred. The compensation expenditure it seeks is ascertained and fixed, and no detriment is caused to council by the mere reason of the lodging of this application, whether the limitation period is two years or six years.

45 I rule that s.78 does not form a basis for its strike out application, as Kasempa's conduct of the proceeding, to wit its mere lodgement, is not inherently vexatious within the purview of s.78 (1) (f). Therefore, it is neither necessary for me to give Surfcoast an opportunity to find the subdivision permit amended after 10 August 2000, nor to decide whether a two year limitation period or a six year limitation period applies.

46 Kasempa can seek an extension of time under the Land Acquisition and Compensation Act 1986, s.106 (1) & (2). Any such application, as well as the merits hearing, should not be listed before me, in accordance with my direction under the heading 'Preliminary Matter'.

[1] Pitt Others v Surf Coast SC and Another [2000] VCAT 1664 (31 August 2000)

[2] which were subsequently taxed by the Registrar at $18,656.30

[3] (2002) 2 QDR 94 (Supreme Court of Appeal)

[4] [1957] 1 QB 540 (Queen's Bench)

[5] [1999] Chancery 139 (English Court of Appeal)