This judgment determines the outcome of a Notice of Motion brought by the Applicants seeking, inter alia, that the dates for the primary hearing scheduled to commence on 22 March 2018 be vacated. At the hearing of the Motion on 19 March, I decided that the dates should be vacated and made six consequential orders. This judgment sets out the Court's reasons for vacating the dates and makes further orders dealing with costs.
The primary proceedings were commenced by way of an Application Class 3, being an objection to the amount of compensation offered for compulsory acquisition of land, filed 27 February 2017, brought by three related Applicants - Allan, Phillip and Christopher Monti (the Applicants). The Respondent in the proceedings is the Roads and Maritime Services (RMS)
The proceedings have been brought pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act) in relation to a compensation notice issued by RMS dated 1 December 2016 in respect of Lot 7 Deposited Plan 1211069, being part of the land in Certificate of Title 3/1192234 and Lots 8 and 10 Deposited Plan 1211069, being parts of the land in Certificate of Title 2/1192234 (the Acquired Land).
The Acquired Land is an 8.747 ha portion of the Applicants' original whole property of 97.371 ha, the whole of which is known as 103 Montis Road, Bagotville. After acquisition, the Applicants have been left with 88.624 ha of land (the Residue Land).
The Montis' property is approximately 3.5 to 4 kilometres west of the Pacific Highway and 5 kilometres south west of the small rural village of Wardell, which in turn is about 16 kilometres south of the coastal resort town of Ballina itself being on the NSW North Coast.
The Application Class 3 reveals that the Applicants seek $10,453,231.28 in compensation. In the Valuer General's Determination of Compensation dated 30 November 2016 (the Determination), as at the date of acquisition of 1 April 2016, the compensation payable was determined to be $1,445,765. The Valuer General's assessed compensation payable comprises $1,187,000 market value (pursuant to s 55(a) Just Terms Act) and $258,765 for disturbance (pursuant to s 55(d)). It was stated in the Determination that both severance (s 55(c)) and any decrease in the value of other land (s 55(f)) were included in the market value, whereas there was no compensation payable with respect to special value (s 55(b)), solatium (s 55(e) and increase in the value of other land (s 55(f)) - all of which were considered by the Valuer General to be not applicable.
It has been material to the determination I must make to understand that the far greater proportion of compensation sought by the Applicants relates to an alleged s 55(f) "decrease in the value of other land", being the Residue Land retained by the Applicants. Specifically, the following three compensation items constitute the Applicants' s 66 Just Terms Act application for compensation:
(a) the market value of the land on the date of its $660,375.00
acquisition
…
(d) any loss attributable to disturbance $2,619,198.11
…
(f) any increase or decrease in the value of any $7,133,000.00
other land of the person at the date of acquisition
which adjoins or is severed from the acquired
land by reason of the carrying out of, or the
proposal to carry out, the public purpose for which the
land was acquired
In order to understand the unusual contention that has arisen in this case, which has given rise to a Motion to vacate the hearing dates very late in the preparatory stages in these proceedings, it is instructive to refer to the Applicants' Points of Claim filed 22 May 2017. Accepting that any of the propositions in the Points of Claim which are contested by the Respondent are still to be tested in Court, I quote the following extracts without any assessment of their veracity, admittedly leaving out some of the detail which is immaterial for my present purposes.
… …
8. The land is zoned RU2 Rural Landscape under the provisions of the Ballina Local Environmental Plan 2012.
9. The land was, and at all material times has been used as a sugar cane farm and as a quarry for the extraction, processing and sale of products derived from the quarry.
10. The public purpose for which the Acquired Land was acquired was the Pacific Highway, Woodburn to Ballina upgrade, and is some 13.5 kilometres in length ("the Public Purpose").
11. The Woodburn to Ballina upgrade forms part of the larger Woolgoolga to Ballina Pacific Highway upgrade project.
…
13 The Respondents will construct a 5.3 metre high underpass at the intersection of Old Bagotville Road to provide the Applicants with access to the western portion of the severed Land.
14. The eastern portion of the Residue will remain accessible from Wardell and Ballina via Old Bagotville Road.
15. The underpass will enable access to the Residue for all existing traffic including cane and gravel trucks, low loaders and all cane farming machinery.
16. The Public Purpose also included a southbound rest area ("Rest Area") on the eastern side of the realigned Pacific Highway, adjacent to the eastern Residue Land, which is approved for Montis Quarry.
…
35. The Applicants' father opened the adjacent quarry ("Old Monti's Quarry"), approximately 50 years ago.
36. Old Monti's Quarry was operated on a commercial basis by a tenant who paid royalties for the extracted materials.
37. Approximately 24 years ago the Applicants' father sold Old Monti's Quarry and commenced extracting gravel from the southeast corner of the Land, being the land closest to Old Monti's Quarry.
38. On October 2005 a site survey was undertaken by Ardill Payne Partners, Registered Surveyors, Civil and Structural Engineers, Project Managers and Town Planners ("Ardill").
39. In April 2006 the Applicants lodged DA/2006/718 with Ballina Shire Council ("Council") for then Lot 2 DP 787102. at Old Bagotviile Road for the extraction of 700,000 cubic metres of shale or chert gravel and over-burden, or consent to operate for a 20 year period, whichever occurs first.
40. On 22 February 2007 the Council issued consent to DA/2006/718 ("DA1") for the purpose of Extractive Industry (Shale Quarry) for 50,000 cubic metres per annum over 20 years, or until 700,000 cubic metres is extracted.
41. At the Acquisition Date the Applicants were carrying out quarrying on the land pursuant to DA1.
42. In or about January 2014 the Applicants again engaged Ardill, and Ausrocks Pty Ltd Consulting Mining Engineers ("Ausrocks") to assist with the planning for expansion of DA1 to a depth of 20 metres within the existing and approved footprints.
Particulars
(i) On or about May 2014, the Applicants commissioned Ardill to prepare a development application for the expansion of DA1;
(ii) On or about January 2014 the Applicants commissioned Ausrocks to confirm the size and quality of the resources available within the footprint on the existing consent ("Resource Assessment Programme")
…
44. On November 2014 the Applicants sought a new approval, DA 2014/615 ("DA2"), for an expansion of DA1 to allow for a total of 100,000 cubic metres excavation per annum for a duration of 25 years, or 2,390,000 cubic metres, whichever occurred first.
45. On 15 April 2015 the Respondent wrote to the Council objecting to DA2 primarily on the basis the subject site was within the alignment of the Public Purpose and seeking refusal of the prosed development.
46. On 20 April 2015 the Applicants submitted a further DA 2014/180 ("DA3") for the purpose of extracting a sand resource encompassing approximately 8 ha of surface area to the north of the Eastern Pit, to a depth of 5 metres, at 30,000 cubic metres per annum for a duration of 25 years or 400,000 cubic metres, whichever occurs first.
…
48. As at July 2015 a large part of Stages 1 and 3 of DA1 of Monti's Quarry had been extracted to RL5.
49. As at July 2015, a site survey by Ausrocks indicated that approximately 270,000t of material remained to be extracted in Stages 1 and 3 of DA1 and LlSMt was yet to be extracted from Stages 2 to 4 of DA1.
50. On 21 August 2015 the Joint Regional Planning Panel ("JRPP") refused DA2 primarily due to impact on the Pacific Highway upgrade corridor as identified in the Respondent's objection letter of 15 April 2015.
51. As a result of the JRPP decision, the Applicants were advised by Council to withdraw DA3.
52. On 3 September 2015 the Applicants withdrew DA3.
53. The Proposed Acquisition Notice ("PAN") was issued on 18 December 2015.
…
58. The acquisition and the bisection of the existing quarry by the Public Purpose have a direct impact on the existing and future operations of Monti's Quarry.
59. Prior to acquisition the highest and best use of the parent parcel was a rural/residential property with an existing quarry with good potential for quarry expansion.
60. But for the proposal to carry out the Public Purpose DA2 would have been approved.
61. But for the proposal to carry out the Public Purpose DA3 would have been approved.
62. But for the proposal to carry out the Public Purpose the Land had the further potential to exploit additional resources run yet the subject of DA1, DA2 or DA3.
63. Any prudent purchaser of a quarry on the land would assume that quarrying may not be carried out within a buffer zone of at least 300 metres from the boundary of the Acquired Land.
64. After acquisition the highest and best use of the Land is as a rural/residential property with the quarry potential being significantly constrained.
This matter came before me for the usual Pre-Trial Mention on Friday 9 March 2018. It transpired in the course of that hearing that, despite the matter being listed for the commencement of the primary hearing on Wednesday 21 March, a hearing scheduled for eleven days' duration, there had been little compliance with both the orders of Moore J of 3 November 2017 that were still extant and his Honour's orders of 15 December 2017. A number of those orders that had been met by the parties had suffered from a very significant slippage in the time schedule set by His Honour, save for the joint experts' report on geology which was served on time on 19 January 2018.
The Pre-Trial Mention on 9 March was far from the usual hearing dedicated to the final "tidying up" directions in relation to procedural and administrative matters for a hearing scheduled to commence a mere 8 working days later. Rather, the almost half day duration of that hearing was primarily occupied with a hotly contested issue regarding a post-acquisition scenario which was described as the "After Case 2". No less than 47 pages of transcript resulted from that Pre-Trial Mention hearing.
The post-acquisition scenario "After Case 2" arose out the joint conference of the parties' quarry experts and forensic accounting experts, which led to the preparation and service of their Joint Expert Report, dated 2 March 2018. This report was an instance of the time slippage referred to above, being some thirty days later than the 31 January deadline set by Moore J in the orders of 15 December 2017.
The "After Case 2" scenario was described in paragraphs 4.3 to 4.6 of the Joint Expert Report as follows:
4.3 The experts agreed that the evidence of the geologists indicated that there were significant sand and hard rock resources remaining in the After Case, and that a potential purchaser of the land in the After Case would need to obtain additional consents in order to extract those resources. The cash flows arising from such a scenario had not been considered by Mr Robertson and the experts agreed that these additional resources could enhance the value of the land in the After Case.
4.4 The experts agreed that this case ("After Case 2") is where the quarry land acquisition for the Pacific Highway Upgrade Project had been completed and it is proposed that a DA be prepared ("DA4") to cover the sand on the western side of DA3 and west of the acquisition area and the extraction of DA2 on the western side from 5mRL down to - 15mRL approx. This will require the removal of overburden and spoil to access material suitable for -30mm, -80mm, screened product and the productions of DGB20 roadbase in the MW-SW and SW-Fr material.
4.5 The experts were unable to determine the quarry value in After Case 2 because they do not have sufficient relevant information. In particular, the following additional information is necessary:
i. An assessment from the Town Planning Experts of the cost of resubmitting and obtaining approval, the probability that DA4 would be approved and the timing of that approval. DA4 would be for 100,000bcm/a hard rock and 30,000bcm/a sand;
ii. An assessment by the Geology Experts of the realisable quantities of materials remaining insitu in After 2 case, taking into account the proximity of sand resource to the proposed highway and any necessary buffers during the construction of the motorway and after the opening of motorway,
iii. An assessment by the Blasting Experts of the extent of any necessary buffers during the construction of the highway and after the opening of the highway and of the cost associated with drilling and blasting.
4.6 The experts agreed that they would be able to address the land value in the After Case 2 when the additional required expert evidence is available.
Ms A Pearman of counsel, who appeared with Ms F Berglund, for the Applicants, submitted that the Applicants were significantly prejudiced by this new After Case 2 scenario, arguing that it represented the raising of a new case by the Respondent, which is a novel case, saying that it constitutes "a novel and unique interpretation of the task that's required under s 55(a) of the Just Terms Act to achieve market value" (Transcript p 2). Counsel stressed that "this new novel case is one that takes us by surprise, having only received the joint report in the last week" and that "we are severely prejudiced".
In response to the question from the Court "[s]o is your bottom line that the Court should direct that After Case 2 not be considered?", Ms Pearman replied: "Correct, because it is [this] After Case 2 which is brand new". "This is brand new. It is something that arises at the eleventh hour. It couldn't [have] arisen at a later time. And unfortunately the quarry experts themselves have sat on the joint report for approximately one month before giving it to us. We've had it for less than a week". (Transcript p 8). Mr L Waterson for the Respondent resisted the proposition that issues arising from the After Case 2 were either novel or unique, submitting that the lateness of the scenario emerging could be addressed by appropriate case management directions to allow the Applicants and their experts and legal team to respond.
After considering the submissions from both parties during the Pre-Trial Mention hearing, the Court indicated that it would not be prepared to direct the Respondent to thereafter not rely on the "After Case 2" scenario, despite that being the Applicants' preference. The Court was cognizant of the fact that After Case 2 arose out of the Court directed expert joint conferencing process, observing: "Presumably it emerged out of 'left field' in the course of the two experts sitting in their conclave thinking 'Perhaps this is a possibility, we better get advice on this', and then having got the advice on it, it wasn't going to go away, it was now a live issue" (Transcript, p 17). The Court formed the view that, with the After Case 2 scenario having arisen from the experts in joint conference, the proper time at which to consider the consequential issues was at the primary hearing, rather than being summarily dealt with at a Pre-Trial Mention hearing. The Court surmised the serious questions of law might arise, that the issue may be a complex one and that it would require careful consideration, assisted by full submissions and further evidence.
Options were then explored including: a revised timetable in the remaining days before the scheduled commencement; a staggering of the submission of further material regarding the After Case 2 scenario, including some days after commencement; the staggering of the issues, allowing After Case 2 to be examined later in the primary hearing; contemplating the primary hearing proceeding on schedule, then adjourning it for a second tranche of days to deal with After Case 2; or vacating the hearing altogether, as initially sought by the Applicants' counsel should the Court not rule out After Case 2.
After a brief adjournment during which counsel for the Applicants sought instructions, with the potential option of an adjournment of potentially many months being the realistic consequence, the Applicants then indicated that they no longer pressed for an adjournment. However, it was very clear to the Court that the Applicants decision to press ahead with the scheduled hearing was on the explicit understanding that the "After Case 2" scenario would need to be clearly defined within a tight timetable, with the Respondent being required to file both written submissions and further supplementary evidence.
The transcript of the Pre-Trial Mention hearing (with slight grammatical corrections) confirms (Transcript, p 37) the Applicants' position, as expressed by Ms Pearman of counsel:
"My instructions are that we do not seek a vacation, because of the prejudice a vacation would cause to my clients. So the instructions are to proceed to hearing, but to proceed to hearing commencing on the given date of the Wednesday, because we just don't know what this After Case [2] is and what is going to be required. We know that some further material is sought from all sorts of areas of expertise, even though we will not have our Geotech expert.
Nonetheless, my instructions are to proceed and to try and come to some agreement with the Court about a timetable for evidence, but subject to this …... where we are prejudiced …
At para 8, where the respondent is proposing a leisurely week
in circumstances where we have this brand new case, that we would say the appropriate direction there would be that the respondent serves any supplementary expert reports and any written submissions on the legal basis of the After Case 2.
…. On Wednesday, … they will have to turn their mind to it. They will have to explain to us in written submissions what the After Case 2 is, so that the Court and the applicants have a full understanding. It's not in respect of the materials or the supplementary reports, but it's so that we can understand what this case is. At this stage we just don't know what it is, but there must be some legal basis that [what] the respondent is saying is a correct legal basis. We need to understand that.
We think in the circumstances, where we're so prejudiced, that would be an appropriate order for the Court to make"
Later in the Pre-Trial Mention hearing Ms Pearman again confirmed the Applicants' stance (Transcript, p 39):
"PEARMAN: I don't want it to be mistaken again, your Honour, that we are agreeing to deal with After Case 2. I'm simply saying that we are prepared to meet a timetable which has evidence go on in respect of After Case 2. I may be making some further submissions along the way"
Finally, the following passages from the Transcript (pp 45-46) are important:
WATERSON: Just I think we cannot commit to doing next Wednesday, your Honour, for our evidence, due to availabilities. We can do Thursday, I'm told, but [not] Wednesday‑‑
HIS HONOUR: This is order?
WATERSON: 8 - and you know, I hope my friends aren't going to just sit pat and wait for our evidence on this point. We've agreed to go first. The planners' two page email seems to canvass most of the relevant issues, so they can be thinking about these issues and preparing their evidence rather than waiting for us to put on our evidence. They know as well as we do what the issue is. It's set out in the joint report agreed to by their quarry experts. So I don't want to put up a date that I'm instructed just can't be met, your Honour, in terms of this‑‑
HIS HONOUR: So currently order 8 has it set as Wednesday the 14th.
WATERSON: We can do Thursday the 15th.
….
PEARMAN: Your Honour, I press the 14th in the circumstances. They should know their case by now. They should be getting their experts working on it immediately. And frankly, in terms of the legal basis of this case, I'm hearing in the back of the courtroom that they're going to provide us with a few pages of a textbook. Well, that's not particularly helpful, but in any event, I would hope that something more useful than that might come forward, and the sooner the better. So I do press the 14th.
WATERSON: I'm instructed, your Honour, we just - there's one expert in particular who has issues about the 14th. He's travelling, and we‑‑
HIS HONOUR: All right.
PEARMAN: We press the written submissions then on the 14th, and the material on the 15th if that's the case. But I want the written submissions, your Honour.
HIS HONOUR: I was about to say, with the Wisdom of Solomon, I was going to do that.
PEARMAN: Thank you.
HIS HONOUR: So the legal submissions will be on the 14th and the expert [evidence] on the 15th.
With it being patently clear that with respect to the After Case 2, the Respondent would be required to file its submissions on the scenario by 14 March and then its supplementary evidence the next day on 15 March, the Court outlined the orders that would be made, directing the parties to draft the final orders by consent and submit them for the Court's consideration. On Monday 12 March the agreed consent orders were provided and then made by the Court. Amongst fifteen new orders, orders 5 to 10 are material to the issue that has subsequently caused the Applicants to seek, by its Motion, the hearing dates be vacated:
5. Any joint supplementary report by the parties' quarry experts responding to Annexure E of the Quarry and Business Joint Report is to be served by 15 March 2018.
6. The Respondent is to prepare written submissions on the legal basis of the "After Case 2" by 14 March 2018.
7. The Respondent is to serve any supplementary expert report/s addressing the matters referred to in paragraphs 4.3 to 4.5 (inclusive) of the Quarry and Business Joint Report by 15 March 2018.
8. The Applicants are to serve any supplementary experts report/s in reply to the reports served under paragraph 7 by 19 March 2018.
9. The Applicants are to serve any amended points of claim and schedule of disturbance losses under section 59(1)(f) arising from the evidence served under paragraphs 8 and 9 by 19 March 2018.
10. The Respondent is to serve any amended points of defence in response to any amended points of claim served under paragraph 10 by midday on 20 March 2018.
By Notice of Motion dated 19 March 2018, the Applicants sought the following orders:
ORDERS SOUGHT:
1. An order that the hearing dates commencing 22 March 2018 be vacated.
2. An order that the respondent pay forthwith on an indemnity basis:
a. the Applicant's costs arising from the Respondent's "After Case 2"; and
b. the Applicants' costs thrown away by the vacation of the hearing dates.
3. Such further or other Order as the Court see fit.
The Applicants' Notice of Motion was supported by an affidavit of Digby Lyell Dunn, affirmed 19 March 2018. Mr Dunn is the solicitor on the record for the three Applicants in this matter. Mr Dunn's affidavit states as follows:
2. On 9 March 2018 this Honourable Court made short minutes of order pursuant to which the Respondent was to file and serve any supplementary experts reports by Thursday 15 March 2018 …
3. On 15 March 2018 at 4 31pm the Respondent served by email the following additional evidence:
(a) Supplementary Statement of Robin Rankin dated 9 March 2018 (but with a coversheet dated 10 March)
(b) Supplementary Statement of Peter Duniam dated 12 March 2018
(c) Supplementary Statement of Darren Herdman & Clayton Hill signed 14 March but with a coversheet dated 15 March 2018
(d) Supplementary Statement of Paul Mitchell dated 15 March 2018.
A copy of the email from Aaron Moss of Clayton Utz serving these supplementary statements is annexed hereto and marked "B".
4. On Saturday 17 March at 10 25pm the Respondent served by email the following additional evidence:
(a) Supplementary Statement of Clayton Hill dated 16 March 2018 and
(b) Supplementary Statement of Rod Ferrier dated 17 March 2018 (including spreadsheet of Annexure A).
A copy of the email from Alison Packham of Clayton Utz is annexed hereto and marked "C': Annexure A of the supplementary statement of Rod Ferrrier is annexed hereto and marked
5. Annexure D discloses that:
(i) Dr Ferrier now calculates a different amount in "After Case 1" than he has previously; and
(ii) Dr Ferrier has calculated another new amount for "After Case 2".
6. At the time of making this affidavit, the Respondent has not indicated to the Applicants whether it intends to press its case on the basis of After Case 1 or After Case 2 or in either case whether it relies on the new figures presented by Dr Ferrier.
7. Due to the late service of the supplementary evidence of Dr Ferrier and Mr Hill, I am informed by Mr Muilins that he will not be in a position to fully examine and respond to the supplementary statement of Dr Ferrier in respect of After Case 2 before the scheduled commencement of the hearing.
8. Due to the lateness of the supplementary evidence and the lack of clarity surrounding the Respondent's case, the Applicants will not be in a position to comply with the current timetable for evidence in reply, pleadings or submissions.
9. My clients are prejudiced by the lateness of the Respondent's supplementary evidence, the lack of clarity regarding the case the Respondent intends to press and the consequent impacts on the ability of those representing my clients to adequately prepare the Applicants'
case.
10. Accordingly the Applicants' seek orders for the vacation of the hearing scheduled to commence on Thursday 22 March 2018.
Annexure B to paragraph 3 of Mr Dunn's affidavit was a copy of an email sent at 4.32pm on Thursday 15 March 2018, by Mr Aaron Moss of Clayton Utz, on behalf of the Respondent. Omitting that which is immaterial for present purposes, this email advised:
Please see attached, by way of service, the following expert reports:
Supplementary Statement of Robin Rankin dated 10 March 2018;
Supplementary Statement of Peter Duniam dated 12 March 2018;
Supplementary Statement of Paul Mitchell dated 15 March 2018; and
Supplementary Statement of Darren Herdman and Clayton Hill dated 15 March 2018.
These reports address the matters referred to in paragraphs 4.3 to 4.5 (inclusive) of the Quarry and Business Joint Report.
We note that a further supplementary expert report of Dr Rod Ferrier also forms part of this evidence.
Unfortunately, due to competing hearing commitments, that evidence has not yet been finalised but Dr Ferrier is looking to complete it as soon as possible. Accordingly, we will serve it as soon as it is received.
[2]
CONSIDERATION
The relevant principles of law in relation to motions to vacate or adjourn hearings are well established. One instance of a useful summary of the principles, which I adopt for the purposes of this judgment, was set out by Sheahan J in Thaler v Cooma Monaro Shire Council (No 2) [2014] NSWLEC 51, at [3]-[4]:
3 The principles to apply to motions to vacate or adjourn hearings were concisely summarized in Kenoss Pty Ltd v Palerang Council ("Kenoss") [2013] NSWCA 174, by Ward JA, who said (at [13]):
The power to adjourn proceedings or vacate hearings in s 66 of the Civil Procedure Act 2005 (NSW) confers a discretion that must be exercised in accordance with the overriding purpose described in s 56(1) of the Civil Procedure Act and in accordance with the dictates of justice as described in s 58 of that Act. The considerations that must be taken into account include: the prejudice to the respondent by such an adjournment; the prejudice to the applicant if such an adjournment is refused; the circumstances in which the application is brought; and considerations relating to the administration and management of matters in this Court.
4 The discretion, including as to costs as a remedy for resulting prejudice, has to be "exercised in the context of the common law adversarial system as qualified by changing practice and that this is not a system which today permits disregard of undue delay" (Kenoss at [16], citing Aon Risk Services Australia Limited v ANU [2009] HCA 27; (2009) 239 CLR 175, per French CJ at [24]).
The Court is satisfied that, as a consequence of slippage in the timeline set for the last critical days of case preparation, the Applicants are severely prejudiced in being able to adequately prepare their case. Although the overall slippage in the case management schedule for the preparation of the case should be a shared responsibility of the professional teams for both parties, specifically with respect to the quarry experts and forensic accounting experts failing to complete their Joint Expert Report until 2 March 2018, some thirty days later than the 31 January deadline set by Moore J in the orders of 15 December 2017, the most recent slippage is not the fault of the Applicants.
The exceedingly tight schedule, which was set at the Pre-Trial Mention hearing, was a compromise outcome where the Applicants agreed to no longer press for the vacation of the hearing dates, instead agreeing to the schedule which required the Respondent to provide both legal submissions and supplementary evidence regarding the post-acquisition After Case 2. The legal submissions were received on time together with some of the evidence on time, but the material from Dr Ferrier, which was clearly considered by the Applicants to be critical in understanding the ramifications of After Case 2, together with additional material from Mr Hill, was received well after the deadline. When it was served on a Saturday night at 10.24pm, it clearly placed the Applicants' team in an invidious position, not unreasonably submitting that there was now insufficient time for their experts, in particular David Mullins and John Heilig, to respond. From the material placed before the Court at the Pre-Trial Mention, the Applicants' town planner Paul Snellgrove was to be next in line to do his analysis, following the receipt of further advice from the other experts.
Although in other cases a couple of days slippage might be within tolerance (although strictly it should never be if it is a court order that has set the timetable) in this case adherence to the timetable set by the Court's orders of 12 March was absolutely critical and, unambiguously, was the precondition that led to the Applicants' counsel not pressing on 9 March for a vacation of the primary hearing dates at that stage. The Court considers the practical effect of the Respondent not meeting the Thursday 15 March deadline with Dr Rod Ferrier's material, was to rule out any chance of the Applicants responding with their supplementary expert evidence in response on Monday 19 March and by that same date serving any amended Points of Claim and schedule of disturbance losses under s 59(1)(f) of the Just Terms Act.
When material is to be served on a given date, in this instance Thursday 15 March, it logically means within office hours, effectively no later than 4.30pm. Receipt by such time of the Respondent's material would have enabled distribution that day, thereby allowing the relevant responding experts to commence work that evening. Instead the material was received at 10.24pm Saturday 17 March. The time of 10.24pm does not represent evening service, rather it is late at night when most people have gone to bed. Had the material been received earlier that Saturday, conceivably the Applicants might have prevailed upon their experts to work on the Sunday, although still unreasonable in the circumstances of the timetable that was set. However, given the lateness of the Saturday night service, there ought be no expectation that anyone would be available to work on the Sunday, as having not heard anything by that time, there ought be an expectation that people would have made alternative arrangements for their Sunday, after all, most people are entitled to pursue their private interests on such a weekend day if they've had no forewarning of another pressing commitment. Accordingly, the Court considers that the practical effect of the Respondent serving the material when they did, means it was effectively received on Monday 19 March, the very day the Applicants were to somehow have their experts prepare their evidence in response and for their legal team to have sufficient time to carefully deliberate on the extent of changes required to amend their Points of Claim and prepare a revised schedule of disturbance losses.
The Applicants' counsel also indicated, quite reasonably, that there was an inconsiderate element in the Respondent's conduct in the context of the Applicants' solicitor being a sole practitioner based in a regional town, whereas the Respondent's solicitors are one of the Nation's largest legal firms, a Sydney based "big city law firm", as Ms Pearman put it, with a far greater capacity to allocate human resources to the demands of case management.
In all the circumstances, the Court has concluded that the Applicants' counsel is correct when she submitted that: "the prejudice to the Applicants' case is severe" and that "the preparation of the Applicants' case has been greatly disrupted". The Applicants have been deprived of sufficient opportunity to speak to their experts and denied an opportunity to consider their legal response in a timely fashion (necessarily dependent, in part, on a consideration of their experts' analysis). The Applicants' experts, presumably waiting to utilise a narrow "window of opportunity" should the Respondent's material had been received on time, have now advised that it would be impossible to respond prior to the scheduled commencement of the primary hearing. It necessarily follows, that by reason of the Respondent's experts' tardiness, it would be impossible for the Applicants to comply with the Court's orders 8 and 9 of 12 March.
The Court asked counsel for the Respondent to identify any prejudice that the Respondent might suffer should the scheduled hearing dates be vacated. Without describing the usual irritation or frustration that any party must feel upon finding a scheduled hearing abandoned, when geared up to commence the primary hearing in a case, Mr Waterson confirmed that there was no specific prejudice likely to be suffered by the Respondent, save that there may be uncertainty with respect to the availability of witnesses for the final hearing whenever it might occur.
An additional consideration emerged from the exchanges in Court on 19 March: the Applicants are firmly of the view that the scheduled number of hearing days is insufficient. The original eleven days had been reduced to ten at the Pre-Trial Mention. On the 19 March the Respondent's counsel said the effect of the unfortunate slippage could be ameliorated by the Court not sitting on Friday 23 March, thereby allowing the Applicants a weekend to consider their position and reducing the hearing to eight days duration. The Applicants' counsel vigorously rejected such a proposition, submitting that far from contemplating reducing the hearing duration to eight days, the Court will most likely need to set down substantially more days than the originally scheduled eleven days. The Applicant stressed that the case now had 17 primary expert reports, which when considered in the context of further supplementary reports and joint reports, now amounted to some 46 expert reports.
In considering the consequences that flow from the Court's decision to vacate the scheduled hearing dates, in the context of having decided that the Respondent should be allowed to ventilate After Case 2, thereby providing the Applicants sufficient time to properly consider this new scenario, prepare and file further evidence in response and formulate their legal arguments, the Applicants' counsel relied upon the High Court decision of Aon Risk Services Australia Limited v Australian National University [2009] HCA 26, 239 CLR 175, as providing guidance to the Court.
This Aon Risk Services Australia Limited v Australian National University decision clarifies that a party does not have an entitlement to amend a pleading, subject to payment of costs by way of compensation. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact that substantial delay and wasted costs and their effect on the parties, the court and other litigants - the concerns of case management - would assume importance on an application for leave to amend. Relevant matters would also include the nature and importance of the amendment to the party applying, the stage the litigation had reached when the amendment was sought, and the explanation for any delay in applying for amendment. At [97]-[99], the Court's joint judgment said as follows:
The Court Procedures Rules make plain that the Rules are to be applied having regard to the stated objectives of the timely disposal of the proceedings at an affordable cost. There can be no doubt about the importance of those matters in litigation in the courts of the Australian Capital Territory.
Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.
In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all (195). Such a view may largely explain the decision of this Court in Shannon v Lee Chun (196), which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment (197).
Although the Court does not consider the Aon Risk Services case is at "all fours" with the case before me, as the Respondent has strictly not yet sought to amend its "pleading" (or the way it puts its case) but rather relies on evidence that has emerged late from the joint conferencing between experts from both parties, saying that the After Case 2 scenario is proper to consider in the context of s 55(f) of the Just Terms Act, nevertheless the Court considers Aon does usefully place relevant principles in a proper context for consideration in this case. The paramount consideration of achieving a "just resolution" in the context of "the timely disposal of the proceedings at an affordable cost" is important. As my orders made on 19 March indicated, I have formed the view that, in order to achieve a just resolution, the Applicants have made out their case that the scheduled hearing dates for the primary hearing ought to be vacated and so they have succeeded on their Motion, for the reasons I have explained earlier.
In determining the issues arising from the Notice of Motion and previously having made the various case management orders at Pre-Trial Mention, the Court does not consider it has commenced its deliberation of the primary issues in the case, nor has it commenced a consideration of the merits of either parties' respective positions. Accordingly, the Land Valuation and Compensation List Judge will have a free hand to determine the next appropriate case management orders that are to be made on 13 April 2018.
[3]
COSTS
The Applicants seek their costs on an indemnity basis arising from (a) the Respondent's After Case 2 being raised so late in the proceedings; and (b) their costs thrown away by the vacation of the hearing dates.
The Court will make no order in response to the Respondent's After Case 2, but rather considers that it is more appropriate that the associated costs be costs in the cause, to be determined in the usual manner at the conclusion of the primary hearing. The Court accepts the After Case 2 arose out of the joint conferencing process with the experts for both parties participating. Having been examined by the experts as a possible scenario, it was unrealistic to expect the Respondent to thereafter suppress consideration of it. The Court understands the inconvenience that has arisen as a consequence of After Case 2 emerging, but considers that there has been no wasted effort in considering it to date and all such consideration will contribute to the proper examination of it when examined in detail in the course of the primary hearing.
With respect to the Applicants' costs thrown away by the vacation of the scheduled hearing dates, the Court has decided that the Applicants should have their costs thrown away paid by the Respondent, irrespective of the final outcome of the primary hearing. Although the normal course in Class 3 proceedings is that an applicant who is successful will be entitled to their costs, given that the outcome in these proceedings are far from being determined, it is appropriate that the Court flags at this stage that the Applicants are entitled to their costs thrown away come what may.
Having flagged that the Applicants are entitled to these costs thrown away, as for the determination of their quantum and the consequential details as to when they are to be paid, those are all matters for the trial judge at the conclusion of the case. In rejecting the Applicants' submission that these costs should be paid forthwith, I am mindful that pursuant to the usual procedure under s 68(2)(a) of the Just Terms Act the Applicants have been paid by the Respondent 90% of the Valuer General's assessment of the compensation due to the Applicants.
The final remaining question is whether the order for costs in favour of the Applicants should be for costs on an indemnity basis. The judgment of Sheahan J in Young v King (No 11) [2017] NSWLEC 34 at [106]-[110] usefully sets out a summary of the law relating to the award of indemnity costs. For the purpose of this judgment, the principles set out in Young v King and the many authorities therein set out are relevant and apposite to guiding my determination whether indemnity costs should be awarded.
I do not consider that the Respondent's conduct in failing to meet the Thursday 15 March deadline gives rise to any of the descriptions of conduct referred to by Sheahan J. as giving rise to a justifiable award of indemnity costs. I do not believe the Respondent's conduct, via its experts or its lawyers, constitutes conduct that was "ethically or morally delinquent", that it was motivated by an "ulterior motive", or that there was a deliberate element of abuse of process. The Court's "discretion to award indemnity costs is absolute and unfettered, it must be exercised judicially in the sense that there is some special or unusual feature in the case justifying such an award".
I suspect that the Respondent's solicitors had no wish to be trying to meet the Court's orders at 10.24pm on a Saturday night, as indeed Dr Ferrier had no wish to be embarrassed by being caught up in competing hearing commitments, most probably before another judge of this Court, and thereby unable to meet the commitments in this case. In short, in the context of the authorities confirming that "each case turns on its own facts, as they may be found to display the reasonableness or otherwise of the parties' conduct", on the facts in this case I do not consider that with respect to the order for costs I now make that it would be warranted to do so on an indemnity basis.
[4]
ORDERS
The Court made the following orders at the conclusion of the hearing on 19 March 2018
1. That the hearing dates commencing 22 March 2018 be vacated.
2. That the date of 19 March 2018, as appearing in Order 8 of the Court Orders dated 12 March 2018, be substituted with date of 29 March 2018, and that the supplementary expert report/s referred to therein be filed before close of business hours on that date.
3. That any further joint supplementary reports prepared by the parties' experts in the disciplines of blasting, geology, planning, quarrying and forensic accounting, be served before close of business hours on 10 April 2018.
4. That orders 9, 10, 11, 12 and 13, as appearing in the Court Orders dated 12 March 2018, be vacated.
5. The proceedings be listed for directions before the Land Valuation and Compensation List Judge on Friday 13 April 2018.
6. Liberty to restore at three working days' notice.
The Court now makes the following additional orders:
(7) The Applicants' costs thrown away due to the vacating of the scheduled dates for the primary hearing are to be paid by the Respondent, with the final orders with respect to their quantification and payment to be determined by the Court at the conclusion of the proceedings.
(8) The parties' additional costs incurred by reason of the emergence of the After Case 2 scenario following the service of the Joint Expert Report dated 2 March 2018, be costs in the cause.
[5]
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Decision last updated: 21 March 2018