Luka v Lake Macquarie City Council [2006] NSWLEC 533 | Case summary

Land and Environment Court (NSW)|1996-12-02|Before: Lloyd J, Bignold J

The applicant's notice to produce 68 The applicant served a notice to produce on the council dated 24 February 2006 requiring the production of documents described in the schedule to the notice. The schedule described a wide range of documents and not limited to any particular point in time. The notice to produce is clearly too wide and should be set aside.

Conclusion 69 I have noted at the outset the amount of costs generated by these proceedings, in particular the costs of the initial hearing before Bignold J of some 27 hearing days, which are totally disproportionate to the real sum in dispute. Bearing in mind the need for the "just, quick and cheap" disposal of the proceedings", the further hearing of the remitted proceedings will require a common sense approach by the parties if the further costs are to be contained within sensible proportions. That is, the parties will have to focus on the essential issue of the market value of the land from the point of view of the hypothetical prudent purchaser in accordance with the well-known test in Spencer v The Commonwealth (1907) 5 CLR 418 at 441. This should - and ought to be - a relatively simple exercise occupying a short hearing. In this respect I note that the list of remaining issues appears to contain a number of apparently immaterial questions in what is a simple valuation exercise.

Orders 70 It is appropriate that the following formal orders be made:

(1) The respondent's notice of motion dated 22 December 2005, for an order that the applicant's objection be dismissed on the ground of her consistent failure to comply with directions and orders of the Court, is dismissed.

(2) The applicant is granted leave to rely upon her points of claim filed on 19 April 2006.

(3) The respondent's notice of motion dated 13 April 2006 for security for costs is dismissed.

(4) The applicant's notice to produce dated 24 February 2006 is set aside.

(5) The costs of determining the separate questions herein, the two notices of motion dated 22 December 2005 and 13 April 2006 and the costs related to setting aside the applicant's notice to produce dated 24 February 2006 will be costs in the final proceedings.

I hereby certify that the preceding 70 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.

Suitors Fund Act 1951(NSW)

CITATION : Luka v Lake Macquarie City Council [2006] NSWLEC 533

Bungendore Residents Group Inc v Palerang Council & Anor [2005] NSWLEC 235; Danny Kidron & Andrew Spaile Architects Pty Ltd v Garrett (1994) 35 NSWLR 572; Gallo v Dawson (1990) 93 ALR 479; 64 ALJR 453; Hunter Ecologically Sustainable Employment Group Inc v HEZ Pty Ltd (2003) 129 LGERA 344; Investment Invoice Financing Ltd v Limehouse Board Wills Ltd [2006] 1 WLR 985 CA; Jackamarra v Krakouer (1998) 195 CLR 516; Kalmneft JSC v Glencore International AG [2002] 1 All ER 76; 1 Lloyd's Rep 128; KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189; Lake Macquarie City Council v Luka (1999) 106 LGERA 94; Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 2 December 1996, unreported; Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 23 June 1997, unreported; CASES CITED: Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 23 December 1998, unreported; Luka v Lake Macquarie City Council (1998) 99 LGERA 283; Luka v Lake Macquarie City Council (2000) 21(15) Leg Rep SL4c; Luka v Lake Macquarie City Council [2001] NSWLEC 251; Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82; Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573; Morres v Papuan Rubber and Trading Co Ltd (1914) 14 SR (NSW) 141; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; Onerati v Phillips Constructions Pty Ltd (in liq) (1989) 16 NSWLR 730; Outboard Marine Australia Pty Ltd v Byrnes (1974) 1 NSWLR 27; Sinclair v British Telecommunications plc [2002] 1 WLR 38 CA; Spencer v The Commonwealth (1907) 5 CLR 418; State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

The appeal against the whole of the judgment and orders of the New South Wales Supreme Court, Court of Appeal given and made on the 7th day of December 1999 is allowed to the extent that Order 3 of the orders made by the Court of Appeal is deleted.
The Applicant is to pay the costs of the respondent of the application. 9 On 26 September 2001, the council filed a notice of motion for an order that the remitted proceedings be dismissed for want of prosecution. That motion was heard by Bignold J on 22 October 2001, during which the parties also raised questions as to the true scope of further hearing and determination of the remitted proceedings. In a reserved judgment on 31 October 2001, Luka v Lake Macquarie City Council [2001] NSWLEC 251, Bignold J, in dismissing the council's motion, analysed the effect of the Court of Appeal's orders as amended by the High Court's orders. In particular, Bignold J rejected the council's argument that the Court's statutory function in the remitted proceedings is confined to determining by how much the sum of $16,500 (being the Valuer-General's assessment of compensation in the statutory compensation notice given to the owner) is to be reduced on account of any amount of compensation that may be awarded to other potential claimants. (In the events that have since happened, there are no other claimants.) 10 The council then brought an application for leave to appeal against Bignold J's judgment of 31 October 2001. That application was heard on 3 May 2004, on which occasion the Court of Appeal refused leave to appeal, dismissed the council's summons, and ordered that the costs in that Court be at the discretion of the Land and Environment Court. 11 In the interim the council brought three notices of motion for (i) dismissal of the proceedings for want of prosecution; (ii) dismissal of the proceedings for the failure of Ms Luka to comply with directions of the Court; and (iii) a stay until the owner pays the council's assessed costs ordered by the Court of Appeal and by the High Court, or alternatively, that Ms Luka provide security for costs. Bignold J heard the motions on 15 September 2003. His Honour dismissed the motions, reserving costs. 12 Since then the council has filed two further notices of motion: for an order that Ms Luka's objection be dismissed on the ground that she has failed to comply with directions of this Court and a notice of motion that she provide security for costs. On 27 April 2006, I heard evidence from Ms Luka which established that she is impecunious - she has virtually no assets and is applying for a sole parent pension. She said that she was acting for her broader family, namely her mother, father, sisters and brother, all of whom are also said to be impecunious. Although she is the co-owner with her former partner of an investment property, she has very little equity in it. None of the notices of motion were formally dealt with, but following the giving of Ms Luka's evidence the parties agreed that nine issues should be determined separately and as a preliminary matter to the determination of any valuation issues in the remitted proceedings. I agreed to this course of action and this judgment deals with those questions. 13 For the purpose of deciding the nine preliminary issues, the Court again has been furnished with voluminous written submissions which deal at some length with a range of procedural and peripheral questions. 14 In reciting the history of the proceedings I have omitted various other procedural motions and directions in the Court. I have recited the history of the proceedings to reinforce what was said by Stein JA in the first Court of Appeal's judgment of 7 December 1999 (at 109 [81] - [82]): I wish to make some additional remarks about the proceedings. It beggars belief that the proceedings in the Land and Environment Court took up 24 hearing days over a dispute concerning a very modest amount of compensation. Some of the blame for this situation rests squarely with the parties because of the forensic decisions they made at various points of time about how to conduct the litigation. One of the parties is a local government authority funded in part by ratepayers. In addition to the no doubt enormous costs of the litigation, is to be added the costs to the State of almost 5 weeks of sitting time of a Superior Court. The impact on other litigants waiting in the queue is not be [sic] ignored. I would like to think that such situations will be avoided in the future. However, this will require a common sense approach by parties to litigation because, to an extent, the court is powerless to intervene. 15 The parties clearly ignored the advice of Stein JA. The vast amount of written material which has since been generated, the time involved in generating the voluminous written submissions and the time taken in resolving the dispute thus far, together with the enormous costs that have been incurred (see par [41] below), is entirely disproportionate to the amount in dispute. It is the kind of conduct which brings the practice of the law into disrepute. This is a relatively modest claim, which, in the normal course, should have been completed within two, or at most, three hearing days. Cases of greater complexity and involving tens of millions of dollars are regularly conducted in this Court within a few days. As Stein JA observed, the blame for the present situation rests squarely with the parties and, I should add, with their legal representatives. It is to be hoped that, having now answered the preliminary questions below, the question of the amount of compensation can be dealt with in accordance with the overriding principle that now governs civil litigation - that is, "the just, quick and cheap disposal of the proceedings": cf Uniform Civil Procedure Rules 2005, Pt 2.1. As Stein JA observed, this will require a common sense approach by the parties - something that appears to have been hitherto absent. It cannot be said that the compensation for a compulsory acquisition which occurred in 1993 and which still remains outstanding, which has generated the volumes of material that this has, and which has resulted in entirely disproportionate costs, amounts to the "just, quick or cheap" disposal of the proceedings. 16 I now turn to the nine preliminary issues that the Court is asked to determine.

(5) Whether or not the statement of claim upon which Ms Luka purports to rely contains any reasonably arguable or cognisable cause of action, and if not, whether it should be struck out with costs. 28 The council's criticism is directed to Ms Luka's points of claim dated 23 November 2005. Since the formulation of these issues, however, Ms Luka has without obtaining the leave of the Court filed a later version of her points of claim dated 18 April 2006, upon which she now intends to rely. The council nevertheless opposes the grant of leave to Ms Luka to file out of time and to now rely upon the latest version of her points of claim. 29 The points of claim which Ms Luka now seeks to rely upon raise a claim for the value of road improvements or infrastructure within the acquired land, a claim for the value of the land contained in lanes (being part of the acquired land) and a claim for the value of the area referred to as the Park Street land. 30 The council says that Ms Luka is not able in these remitted proceedings to make any claim for road improvements. This question arises under issue No. 8, which is discussed below. The council also says, however, that Ms Luka is unable to make a claim for the value of the Park Street land. 31 Ms Luka had previously (in written submissions dated 10 November 2005) abandoned the claim for the Park Street land. It is apparent that she wants to reinstate the previously abandoned claim for compensation for the Park Street land. The council says that Ms Luka needs leave to withdraw the admission and to now rely upon this new claim. Such leave should, it is submitted, be sought by way of a notice of motion supported by an affidavit and the council's counsel should be entitled to cross-examine the deponent about the making of the original admission and to test the validity of the claim. 32 I accept the council's submission that Ms Luka requires the leave of the Court to rely upon the new points of claim and to withdraw an admission. Mr P J McEwen SC, appearing for Ms Luka, made an oral application for such leave. 33 Of course, if a notice of motion and supporting affidavit were to be filed it would mean the incurring of additional costs, together with the costs of the separate hearing of the notice of motion. I have already observed that the costs in this case have blown out of all proportion to the amount in dispute and I am anxious to ensure that any further costs can be either avoided altogether or constrained. I am thus prepared to consider Mr McEwen's oral application. 34 I now turn to the question of whether leave should now be granted to Ms Luka to rely upon the amended points of claim and withdraw her previous abandonment of any claim for the Park Street land. In Cohen v McWilliam (1995) 38 NSWLR 476 at 481, Priestley JA described the relevant principle to be applied in the following terms (citing Davies v Pagett (1986) 10 FCR 26 at 233): The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. …. The temptation to impose a limitation through motives of professional discipline or general deterrence is readily understandable; but, in our opinion it is an erroneous exercise of the relevant discretion to yield to that temptation. 35 Priestley JA (at 479-482) acknowledged that although delay (and I should add, a failure to comply with directions of the court) is to be considered, the various cases show that the primary emphasis is on the question whether there is an arguable case to be tried on the merits. 36 In the same case Sheller JA (at 490) adopted the words of Lord Wright in Evans v Bartlam [1937] AC 473 at 489: The primary consideration is whether he has merits to which the Court should pay heed; if merits are shown the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication. 37 Sheller JA also adopted what King CJ said in United Motors Retail Ltd v Australian Guarantee Corporation Ltd (1991) 58 SASR 156 at 161-162, namely, the need to do justice to the party will ordinarily take precedence over policy considerations. 38 In State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, the High Court held that case management principles, although a relevant consideration, should not be used to shut out a party from litigating an issue that is fairly arguable - the overriding concern is the attainment of justice. 39 Finally, Pt 10, r 1(1) of the Land and Environment Court Rules 1996 states that the Court may, at any stage of any proceedings, on the application of a party or without any such application, order, on terms, that any document filed in the proceedings be amended. Importantly, sub-r 1(2) states that all such amendments shall be made so as to lead to the determination of the real questions raised by or otherwise depending on the proceedings. In applying the principles discussed above I grant leave to Ms Luka to file her points of claim dated 18 April 2006, which include the claim for the Park Street land, thereby withdrawing the previous abandonment of that part of her claim.

(2003) 129 LGERA 344

Luka v Lake Macquarie City Council

At a glance

Court

Decision date

Before

Source

Judgment (10 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (21)