Leichhardt Council v Roads and Traffic Authority of New South Wales

Land and Environment Court (NSW)|2007-11-14|Before: Lloyd J

Background 1 HIS HONOUR: On 11 July 2003, the respondent, Roads and Traffic Authority of New South Wales ("the RTA"), compulsorily acquired an area of land of 896.8 square metres owned by the applicant, Leichhardt Council. The land was open space with a number of trees and two cricket practice pitches and adjoined a large park used for active recreation, known as Blackmore Park. 2 In proceedings brought by the council in this Court, I determined that the market value of the acquired land was $1,175 per square metre, which I then reduced by 80 per cent, because of certain statutory constraints: Leichhardt Councill v Roads and Traffic Authority of New South Wales [2005] NSWLEC 86. An appeal to the Court of Appeal was allowed in part and the matter has been remitted to this Court for redetermination of the market value of the land: Leichhardt Council v Roads and Traffic Authority of New South Wales (2006) 149 LGERA 439. 3 The RTA now applies for leave to lead further valuation evidence in the remitted proceedings. The council opposes the application. 4 Although the Court of Appeal said nothing about the discretion to admit further evidence, the Court has a discretion whether to do so: Morales v Minister for Immigration & Multicultural Affairs (1998) 82 FCR 374 at 387. 5 The Court of Appeal's order for the remitter, made on 9 February 2007, is in the following terms: Remit the matter to the Land and Environment Court for redetermination of the market value of the land and injurious affection of the residue land (being a 30 % reduction of its value) without reduction on account of the statutory constraint on alienation of the land in the hands of the Appellant. 6 The reference to the statutory constraint on alienation of the land is a reference to the fact that the land was classified as community land under the Local Government Act 1993 ('the LG Act"). A council has no power to sell, exchange or otherwise dispose of community land: s 45(1) of the LG Act. Accordingly, on the hearing of the remitted proceedings this Court is required to ignore the restriction on alienation. 7 In the original proceedings I determined, on the basis of comparable sales evidence, that the market value of the acquired land was $1,175 per square metre, giving a total of $1,053,570. I then reduced that market value by reason of the statutory constraints imposed by both its underlying zoning of open space and the constraint on alienation. It is only the latter constraint which must now be ignored. The critical question on the remitter, therefore, is the appropriate adjustment to be made for the former restriction - that is, the restrictive zoning of the land - alone, and ignoring the latter restriction - that is, the statutory constraint on alienation of the land in the hands of the council.

Parties' submissions on leave to adduce further evidence 8 The RTA submits that there is a number of sales of other land which would assist in determining the appropriate adjustment and which warrants further investigation. The RTA proposes to lead further evidence by its valuer, Mr P Dempsey, of his investigations of these sales in a report of relevance to the appropriate adjustment, being the central question upon the remitter. 9 The council opposes the application to lead further evidence. It relies upon the following submissions:

(a) Leave to re-open should only be granted in very limited circumstances: citing Nasser v Roads and Traffic Authority of New South Wales [2006] NSWLEC 100 at [14] per Pain J, De L v Director General, New South Wales Department of Community Services (No. 2) (1997) 190 CLR 207 and Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of New South Wales [2005] NSWLEC 419.

(b) Three conditions must be met before fresh evidence can be admitted on appeal: (i) it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (ii) the evidence must be such that there must be a high degree of probability that there could be a different verdict; and (iii) the evidence must be credible: Akins v National Australia Bank (1994) 34 NSWLR 155 at 160 per Clarke JA (Sheller JA agreeing);

(c) The discretionary considerations where leave is sought to adduce further evidence after judgment are stricter than where leave is sought before judgment and after evidence has closed, the guiding principle being where the interests of justice lie: Mosca v Roads and Traffic Authority of New South Wales [2007] NSWLEC 79.

(d) The Court must have regard to the important principle of the finality of litigation: D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [34].

(e) There is no issue now before the Court that was not before the Court in the original hearing and there is no relevant distinction between Mr Dempsey's evidence in that hearing and the evidence now sought to be adduced; the proposed evidence could have been adduced in the original hearing; and the proposed evidence satisfies none of the criteria identified in par (b) above.

(f) The additional sales evidence and each market which these sales reflect will need to be investigated afresh by the council and the whole exercise is likely to divert the Court from the simple question before it - which could otherwise be resolved within half a day of court hearing.

Consideration 10 The relevant principles which govern the reception of further evidence upon remitter to the Court following a successful appeal are conveniently set out by Biscoe J in Mosca. The relevant principles may be summarised as follows:

(a) The considerations relevant to the exercise of the discretion are normally similar to those when a party applies to re-open a case after judgment has been delivered, and such leave should only be granted in limited circumstances: Nasser , De L , Mir Bros . It is a jurisdiction which must be exercised with great caution: Autodesk Inc v Dyason (1993) 176 CLR 300 at 302.

(b) The appeal rules relating to fresh evidence, whilst not determinative, provide a useful guide as to the manner in which the discretion should be exercised: Smith v New South Wales Bar Association (1992) 176 CLR 256 at 266-267, Carriage v Stockland Development Pty Ltd (No. 5) [2004] NSWLEC 674. Those principles have been correctly identified by the council and noted in par 9 above.

(c) The rationale for limitations upon the re-opening of cases is the public interest that there be finality in litigation: Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 at 141-142, Pembroke School Inc v Human Rights and Equal Opportunity Commission [2002] FCA 100; (2000) ALD 151 at [25].

(d) In Mir Bros , McClellan J held that it was relevant to enquire why the evidence was not called at the hearing; and whether or not there may be embarrassment or prejudice to the other side by allowing the matter to the reopened. 11 In the present case it is a question of balancing these principles against the potential for injustice if the proposed fresh evidence is not adduced. 12 The order for remitter is not an order for retrial: Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 at 416 [75]. As noted in par [7] above, it is limited to the question of what adjustment should be made for the restriction imposed by the underlying zoning of the acquired land as open space, but ignoring any reduction on account of the statutory constraint on alienation of the land in the hands of the council. That is, it must be assumed that there is a hypothetical sale of the land to a hypothetical purchaser. 13 Because the original proceedings were determined on the basis that the statutory constraint on alienation of the land was to be taken into account, no consideration was given to a determination on the basis that such restriction is not to be taken into account. Moreover, neither of the parties' valuers considered the question of valuation on the correct basis as determined by the Court of Appeal. The council's valuer, Mr T M Dundas, made no deduction for any of the restrictions - that is, neither for the restriction upon use imposed by the underlying zoning nor for the statutory constraint on alienation. The RTA's valuer, Mr Dempsey, as I understand it, made an allowance for both kinds of restrictions. 14 In my opinion, the evidence now sought to be adduced satisfies the principles which govern application to re-open. The necessary evidence was not called at the hearing because nobody approached the question of valuation on the basis now adopted by the Court of Appeal; the evidence is such that there is a high degree of probability that there will be a different verdict; and the evidence is sales evidence which is presumably credible. As I have noted, in the present case, it is a question of balancing the principle of finality of litigation against the potential for injustice if the proposed evidence is not adduced. 15 The cumulative weight of all these consideration persuades me that, on the particular facts and circumstances of this case, the interests of justice are best served by granting leave to adduce the proposed fresh evidence by the RTA's valuer. That being so, I am also prepared to allow the further evidence to be called. 16 In accordance with the Court's usual practice, the additional evidence must be subject to a joint conference by the parties' respective valuers and the production of a joint report by then in accordance with the requirements of Div 2 of Pt 31 of the Uniform Civil Procedure Rules 2005 and the Expert Witness Code of Conduct in Sch 7 to these rules.

Orders 17 I make the following orders: (1) Leave is granted to the respondent to prepare a valuation report concerning the appropriate adjustment to be made to the value of the acquired land without taking into account the restriction on alienation in the hands of the council.

(2) The parties' respective valuers are to confer in accordance with the requirement of Div 2 Pt 31 of the Uniform Civil Procedure Rules 2005 and the Expert Witness Code of Conduct in Sch 7 to these rules and are to file and serve their joint report on or before Friday, 29 February 2008.

(3) The proceedings are listed for further directions at 9:30 am on Friday, 7 March 2008.

(4) The costs of the notice of motion shall be costs in the cause.

I hereby certify that the preceding 17 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

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.

CITATION : Leichhardt Council v Roads and Traffic Authority of New South Wales (No. 2) [2008] NSWLEC 1

Akins v National Australia Bank (1994) 34 NSWLR 155 Autodesk Inc v Dyason (1993) 176 CLR 300 Carriage v Stockland Development Pty Ltd (No. 5) [2004] NSWLEC 674 Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 De L v Director General, New South Wales Department of Community Services (No. 2) (1997) 190 CLR 207 Leichhardt Council v Roads and Traffic Authority of New South Wales (2006) 149 LGERA 439 CASES CITED: Leichhardt Council v Roads and Traffic Authority of New South Wales [2005] NSWLEC 86 Mir Bros Unit Constructions Pty Ltd v Roads and Traffic Authority of New South Wales [2005] NSWLEC 419 Morales v Minister for Immigration & Multicultural Affairs (1998) 82 FCR 374 Mosca v Roads and Traffic Authority of New South Wales [2007] NSWLEC 79 Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 Nasser v Roads and Traffic Authority of New South Wales [2006] NSWLEC 100 Pembroke School Inc v Human Rights and Equal Opportunity Commission [2002] FCA 100; (2000) ALD 151 Smith v New South Wales Bar Association (1992) 176 CLR 256

(2006) 149 LGERA 439

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