Lawson v South Australian Minister for Water and the River Murray

These proceedings

1. These proceedings address two preliminary separate questions, drafted by the legal representatives of the State of New South Wales and accepted by Mrs Lawson and the legal representatives of the South Australian Minister for Water and the River Murray as being appropriate for consideration as the next step in this process. Those questions are in the following terms: (1) On the assumed, but not agreed, fact that a person (now being deceased) held an entitlement to claim compensation under the Public Works Act 1912 (NSW) by reason of the resumption of land in 1922, was such an entitlement, as a matter of law, amenable to transfer or transmission to, or otherwise passing to, another person? (2) If question (1) above is answered "yes", by what legal mechanisms and to what person or classes of persons might the entitlement pass?

The location of the hearing

1. As Mrs Lawson is elderly, and as she has not had legal representation for this phase of the proceedings (but had, by leave, been represented by an agent, Mr Dengate, in the pre-trial mentions leading up to the hearing on these preliminary separate questions), the Court and the parties agreed that it would be appropriate to conduct the hearing on these preliminary separate questions at Wentworth Court House, in south-western New South Wales, being close to Mrs Lawson's place of residence.
2. The hearing took place at Wentworth Court House on Wednesday 24 May 2017.

The government parties' written submissions

1. I have had the advantage of comprehensive written submissions from Mr O'Leary, counsel for the South Australian Minister, and from Mr Waters and Ms Carpenter, counsel for the State of New South Wales. Those written submissions disclosed that the position advanced for the South Australian Minister was that the first question should be answered "no", whilst the position advanced for the State of New South Wales was that it should be answered "yes". Although no written submissions were filed for Mrs Lawson, unsurprisingly, she adopted the position advanced for the State of New South Wales on this point.
2. However, there was an agreed approach to be taken to the second question if I were to hold that the first question should be answered in the affirmative.

The hearing

1. At the commencement of the hearing in Wentworth, I dealt with two procedural issues. First, for the purposes of s 63(2) of the Land and Environment Court Act 1979, I granted leave to Mr Dengate to act as Mrs Lawson's agent and to appear on her behalf for the purposes of the hearing of these preliminary separate questions.
2. Second, in light of the positions taken by the South Australian Minister and the State of New South Wales in their written submissions, I proposed that Mr O'Leary should open the proceedings and have the right of reply after Mr Waters and Mr Dengate had addressed me.
3. The parties agreed that this was the appropriate course and the hearing proceeded on this basis.

The statutory basis for a claim for compensation

1. The Public Works Act provided, in Pt 5 Div 1, the process for the compulsory acquisition of land by Gazette Notice. First, s 42 provided that, relevantly, an appropriate notification by the Governor could resume private property for a nominated public purpose. That publication had the effect of vesting the acquired lands in the relevant Constructing Authority (a defined term) proposing to carry out the public works.
2. The interests in private land that existed prior to the resumption were converted, by s 45(2), into a claim for compensation. Although it is not necessary to dissect the terms of subss 45(2) and (3) for the purpose of this decision, I set them out for contextual purposes: (2) Every such estate and interest shall, upon the publication of such notification as aforesaid be taken to have been converted into a claim for compensation in pursuance of the provisions hereinafter contained. (3) Every person shall, upon asserting his claim as hereinafter provided and making out his title in respect of any portion of the said resumed lands be entitled to compensation on account of such resumption in manner hereinafter provided.
3. The provisions of the Public Works Act concerning compensation are contained in Pt 7 Div 1 and deal with the procedure where land is taken or acquired by Gazette Notice (as is here the relevant process).
4. Schedule 3 - Savings, transitional and other provisions of the Land Acquisition (Just Terms Compensation) Act 1991 contains, in Pt 2 - General provisions consequent on enactment of this Act, provisions that have the effect of preserving the operation of the Public Works Act as applicable to the claim processes being pursued by Mrs Lawson in these proceedings.
5. As consequence, the provisions of Pt 7 of the Public Works Act, relevantly set out in s 102 for the purposes of these proceedings, remain engaged. That provision is in the following terms: Every person claiming compensation in respect of any land resumed under any such notification, or in respect of any work or other matter done under the authority of this Act where there has been any such notification shall, within 90 days from the publication of such notification, or at any time afterwards within such time as the Land and Environment Court shall, upon the application and at the cost of the claimant, appoint in that behalf, serve upon the constructing authority and upon the Crown Solicitor a notice in writing setting forth - (a) the nature of the estate or interest of the claimant in such land, together with an abstract of his title; and (b) if he claims in respect of damage, the nature of the damage which he has sustained or will sustained by reason of such resumption or work or matter as aforesaid.

Two possibilities for preserving a claim for Mrs Lawson

1. The matter has proceeded on the basis that there are only two potential paths by which a claim for compensation arising pursuant to s 45(2) could, on the assumptions to be made for the purposes of these proceedings (assumptions helpfully set out by the legal representatives of the South Australian Minister and reproduced as Annexure A to this decision), there might be a basis to answer the first question in the affirmative.

A "cause of action"?

1. The first requires consideration of whether Mrs Mitchell, at the time of her death, had a "cause of action" that would be preserved in her estate as a consequence of the operation of s 2(1) of the Law Reform (Miscellaneous Provisions) Act 1944, a provision that provides, relevantly: 2 Effect of death on certain causes of action (1) Subject to the provisions of this section, on the death of any person after the commencement of this Act all causes of action subsisting against or vested in the person shall survive against, or, as the case may be, for the benefit of, the person's estate: …
2. This possible path can be disposed of in comparatively short compass. Such a cause of action can only arise if there has been service of a Notice of Claim pursuant to the Public Works Act; absence of agreement as to liability for and/or the amount of compensation; and then the claimant who has had their claim rejected being entitled to institute proceedings (in the Supreme Court -as at the date of Mrs Mitchell's death) seeking determination of their compensation entitlement.
3. In this instance, no claim had been made by Mrs Mitchell prior to her death, and therefore there was nothing that could potentially found any right pursuant to s 104(1) of the Public Works Act to commence proceedings on the basis of a rejected claim.
4. This dispositive approach to the first option was canvassed on behalf of the South Australian Minister and was supported by Mr Waters for the State of New South Wales and, as I understood the position taken by Mr Dengate, was not contested by him on behalf of Mrs Lawson.
5. This position is consistent with the approach adopted by Bignold J in Still v Transgrid [2005] NSWLEC 531 at [29] to [40].

Continuation of a claim as of right?

1. The second potential path for continuation of the process for examination of Mrs Lawson's claim requires consideration of whether or not there was a statutory right for Mrs Mitchell, in 1922, to have sought to have claimed compensation for the resumption and, if so, whether that statutory right had been capable of passing to her estate and, through her estate, to Mrs Lawson. In describing the chain in this fashion, questions of validity are not being examined and determined by me, merely the theoretical legal possibilities necessary to be satisfied if matters of validity were to go on to be considered further.
2. It is clear from the terms of s 102 of the Public Works Act that the ability to claim compensation exists as an absolute right for a period of 90 days after the publication of the Gazette Notice but, after that time, is extinguished unless and until there is a relevant exercise of a judicial discretion to grant an extension of time.

The South Australian Minister's submissions

1. The position advanced for the South Australian Minister is that the avenue now being pursued by Mrs Lawson cannot be regarded as falling within the scope of a statutorily preserved right. Such a right, if it exists, would fall within the definition of a personal estate in s 3(1) of the Probate and Administration Act 1898 (the Probate Act) and would therefore fall to be dealt with under relevant testamentary processes after Mrs Mitchell's death.
2. The position advanced by Mr O'Leary on this point (and amplified by him in his oral submissions) was contained in [31] to [37] of his written submissions. These were in the following terms: 31. Similar to the analysis in respect of identifying a "cause of action", before analysing whether a statutory right survives death, it is necessary to characterise or identify the relevant "right". In this case, the "right" may be expressed as an entitlement to claim compensation for the resumption of land. Expressed at that level of generality, the relevant right appears uncontroversial. However, the terms of the statute are critical to identifying the relevant right. 32. As noted above, s 45 converts an estate or interest in land to a statutory entitlement to claim compensation. Such a claim must be advanced through the provisions of Part VII. As noted, if the 90 day period in s 102 has not elapsed, a person would have a statutory entitlement to serve the requisite notice in order to trigger the operation of ss 103 and 104. If any such notice had been served within the 90 day period, the pre-conditions giving rise to the statutory right to enforce the claim for compensation will have been satisfied, in the sense that absent agreement, proceedings could be commenced. 33. However, in this case, no step had been taken under the PWA during the lifetime of the purported owner of the land. Following expiry of the 90 day period, a person who may have had a statutory entitlement under s 102 will not have any entitlement to serve the requisite notice. Rather, the person would have no more than standing to approach the Court to seek a favourable exercise of a statutory discretion to extend time to serve the notice: [citations omitted]. That being so, there would be no "entitlement" per se under the PWA. The "entitlement" to serve the requisite notice under s 102 will not have vested in the owner. At its highest, a person with standing would have an entitlement to approach the court for a favourable exercise of discretion. 34. If the entitlement to claim compensation does not vest or accrue unless and until the owner exercises an entitlement bestowed under Part VII of the PWA, it is difficult to construe the PWA as manifesting an intention that some other entitlement, such as the ability to move the Court to exercise a discretion to extend time, is transmissible. 35. The only construction that gives rise to a statutory entitlement that would survive the death of an owner who had not taken any steps to advance that entitlement is one that locates the vesting of the statutory entitlement under s 45(2) of the PWA. That is, s 45(2) must be construed so as to give rise to a statutory entitlement to claim compensation that vests or accrues in the owner on the resumption of the land and is not thereby dependent upon the satisfaction of any other pre-condition of the PWA. On that construction, the statutory entitlement would be a personal right to take action under the PWA. On that construction, the statutory entitlement to claim compensation would be a "right" within the definition of "personal estate" as defined in s 3 of the Probate and Administration Act 1898 (NSW) (Probate & Administration Act). If s 45(2) establishes a right that is a "personal estate", such a "right" would be transmissible under the Probate & Administration Act as in force at the time of the owner's death. However, there is no statutory indication in the PWA that such a personal right derived solely from s 45(2) survives the death of the owner. 36. In summary, the First Respondent submits that on the assumed facts in this case, the entitlement to claim compensation under the PWA is not a "cause of action" within the terms of s 2(1) of the Reform Act and does not, therefore, survive the death of the owner. Further, on the assumed facts in this case, there is no statutory entitlement to claim compensation unless the pre-conditions giving rise to that entitlement under Part VII have vested in the owner, which is not this case. 37. The only available construction of the PWA that leads to an affirmative answer to Question (1) is that s 45(2) gives rise to a statutory entitlement to claim compensation that vests or accrues in the owner on the resumption of the land and is not thereby dependent upon the satisfaction of any other pre-condition of the PWA. On that construction, the statutory entitlement would be personal right to take action under the PWA. That personal right to take action under the PWA would, on this analysis, belong to the estate of the owner in possession as at the date of resumption.

The submissions for the State of New South Wales

1. Before turning to the detail of the submissions advanced on behalf of the State of New South Wales, I should record that Mr Waters' and Ms Carpenter's written submissions said, at [2]: (2) The Second Respondent is aware that the Applicant may seek legal assistance after service of these submissions and has, to possibly facilitate a better understanding of the separate questions in the context of the proceedings, provided some background information beyond that strictly directed to the separate questions. As these submissions will at least initially be considered by the Applicant without legal assistance we have also included more substantial extracts from legislation and cases than is usual.
2. I am grateful to them for having set out, compendiously, the matters contained in their submissions as it was clear, from Mr Dengate's oral submissions at the hearing, that these written submissions had assisted in his ability to represent Ms Lawson competently (as he did) at the hearing.
3. It is, however, not necessary for me to set out lengthy extracts from these submissions in order to deal with this matter.
4. The general approach taken in these submissions, however, is well summarised in [31], a submission which read: 31. It would be odd to construe a statute such as the PW Act, which on the one hand seeks to provide for the equitable (albeit compulsory) acquisition of interest in land where such land is needed for public purposes as creating a right to compensation only to make the actual recovery of compensation as fragile as the health of a particular landholder, and dependent upon the survival of a claimant. It would also be odd to impute to the legislature an intention that the particular time at which a person entitled to compensation by reason of PW Act s45 might die could have a bearing upon a the entitlement of that party's representative to recover compensation - that is, whether it should make any difference that a death might occur before or after the giving of notice under PW Act s102, before or after receipt of a report as provided for by PW Act s103 or before or after an entitlement to commence proceedings arises by operation of PW Act s104 (or indeed the commencement of proceedings).
5. During the course of his oral submissions, Mr Waters put the proposition that, effectively, adoption of the South Australian Minister's position would mean that, at the expiry of 90 days after a claim for compensation was potentially triggered by s 102, a guillotine fell on it as a right and all that was left was an ephemeral ability to seek the exercise of a discretion (as opposed to a right to seek the exercise of a discretion). Adopting such a position would give rise to potentiality for significant injustice, he submitted.

Consideration

1. The broad approach of Pt 7 of the Public Works Act embodies provisions that would, in contemporary legal commentary, be described as "facultative and beneficial" for dispossessed owners of property rights.
2. Section 102 clearly contains two separate rights. The first right is the absolute one to make a claim for compensation within 90 days. The second right is a right to seek the exercise of a discretion in favour of a potential claimant who has not made a claim within the 90-day period of automatic entitlement.
3. It seems to me that there is no distinction to be drawn between their status as rights and that the position adopted by the State of New South Wales (and supported by Mr Dengate for Mrs Lawson) is to be preferred.
4. Given that there are these two rights, the absurdity of suggesting that the second of them, the right to seek an extension of time to make a claim, is extinguished by the death of a potential claimant is, as Mr Waters submitted during oral submissions, demonstrated by what would be the necessary consequence if a potential claimant died shortly after midnight upon the expiry of the 90 days permitted by s 102. The second right, to seek to exercise the discretion to extend time, would be extinguished on this construction.
5. The combination of this provision and the provisions of the Probate Act must be regarded as protecting, for the estate of a potential claimant, the right to seek an extension of time.
6. To counterbalance this, the rights of a Constructing Authority to be protected from claims that are made unreasonably late (whether by a living potential claimant or on behalf of the estate of such a now deceased potential claimant) is given by the fact that granting such an extension is discretionary.
7. In the exercise of that discretion, as was discussed by Biscoe J in Lawson (No 2), reasons for delay are factors to be weighed in determining whether to exercise that discretion. That was what his Honour undertook in his determination that Mrs Lawson was to be granted the necessary extension until March 2015 to make her claim.
8. That is not to say, as was discussed during the course of the hearing before me, that his Honour's decision effected any estoppel barring the South Australian Minister from adopting the position now taken in these proceedings. I have simply determined, in these interlocutory proceedings, that Mrs Lawson did have the right (on the assumptions made) to approach the Court for an extension of time. The consideration of exercising of that discretion that necessarily arose from that right is what was undertaken by his Honour in Lawson (No 2).

Conclusion

1. The consequence of what is set out above is that the first question is to be answered in the affirmative and, having reached that conclusion, the agreed position with respect to the second question then follows.
2. Therefore, the answers to the two questions posed should be, as proposed, on behalf of the State of New South Wales: (1) On the assumed, but not agreed, fact that a person (now being deceased) held an entitlement to claim compensation under the Public Works Act 1912 (NSW) by reason of the resumption of land in 1922, was such an entitlement, as a matter of law, amenable to transfer or transmission to, or otherwise passing to, another person? Answer: Yes (2) If question (1) above is answered "yes", by what legal mechanisms and to what person or classes of persons might the entitlement pass? Answer: The entitlement might pass (or might have passed) on the death of a person holding such an entitlement under Probate and Administration Act 1898 s61 to the Public Trustee and on the grant of probate of a will of that deceased person or letters of administration of the estate of that deceased person (as the case may be) Probate and Administration Act 1898 s44, to the executor or administrator of the estate of that deceased person named in the grant of probate or letters of administration on trust for such person or persons entitled under the will of that deceased person or in the case of an intestacy for such persons entitled to the estate of that deceased person on intestacy. Except as stated, it is inappropriate to answer the question.

Future progress of Mrs Lawson's claim

1. Although Mrs Lawson has now succeeded on these two preliminary steps, there nonetheless remain further matters (starting with addressing matters arising from the answer to Question (2)) to be dealt with before a final determination of her claim can be made. It will, therefore, be necessary for further directions to be made to progress the matter.
2. For this purpose, I set the matter down for a further telephone directions hearing before me, as the LVC Judge, at 9.00 am AEST on 16 June 2017.
3. The parties are to discuss and settle, prior to the further directions hearing, if possible, directions for the step of addressing the answer set out above to Question 2.

ANNEXURE A First Respondent's assumed facts Resumption of land On 1 December 1922, the Governor of New South Wales resumed land within the State of New South Wales by notice published in the Gazette. The land was resumed pursuant to the Public Works Act 1912 (NSW) (PWA) as then in force. As at 1 December 1922, it is assumed for the purposes of answering the two preliminary questions that Ms Mary Alice Mitchell (nee McGregor) (Ms Mitchell) had an interest in the resumed land. For the purposes of answering the two preliminary questions, it is assumed that Ms Mitchell's interest in the resumed land was a fee simple estate held as a tenant in common by way of adverse possession. On the assumptions in [3] and [4] above, on resumption of the land, Ms Mitchell had an entitlement to assert a claim for compensation in accordance with, and subject to the limitations of, Part VII of the PWA as then in force. Ms Mitchell Ms Mitchell died in 1956. At the time of her death, Ms Mitchell had not made any claim for compensation under the PWA, nor taken any step toward doing so. There is no evidence in relation to any estate of Ms Mitchell, including any evidence of a grant of probate or letters of administration in relation to any estate of Ms Mitchell. Ms Lawson The Applicant, Ms Dorothy Lawson (Ms Lawson), was born in 1936. Ms Lawson is a paternal grand-daughter of Ms Mitchell. Ms Lawson's parents (Harry Mitchell Jr and Myrtle Mitchell (nee Johnson)) pre-deceased Ms Mitchell. On [2 May 2014], Ms Dorothy Lawson made an application in the Land and Environment Court of New South Wales (Court) pursuant to s 102 of the PWA seeking an order extending time in which to serve notice upon the Constructing Authority (the first respondent) and the Crown Solicitor (the second respondent) of a claim to compensation under the PWA. On 8 December 2014, the Court made an order extending time to issue the notice to 15 March 2015. On 1 April 2015, the first respondent was served notice under s 102 of the PWA. The notice was dated 31 March 2015. On 23 July 2015, the applicant commenced proceedings in this Court pursuant to s 104 of the PWA. Ms Lawson's application is asserted as a beneficiary of Ms Mitchell's entitlement to claim compensation under the PWA. 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: 31 May 2017