Moss Capital Pty Limited v Queanbeyan-Palerang Regional Council

Background

1. In July 2011, Moss Capital entered into a joint venture agreement with Cannchar Pty Limited ('Cannchar') and Cannchar Investments Pty Limited ('Cannchar Investments') to form an unincorporated joint venture with Cannchar Investments ('joint venture agreement'). The purpose of the joint venture was to develop property owned by Cannchar, known as 'Curtis Estate' comprising approximately 78 ha and being lots 1-664, 105A, 114A, 173A and 209A in Deposited Plans 15222 and 15764.
2. On 10 July 2015, Council published a Notice of Compulsory Acquisition specifying the acquisition of approximately 3.3 ha of the Curtis Estate comprising lots 69-88, 184-197 and 225-229 in Deposited Plan 15764 ('acquired land').
3. Moss Capital claims that it has an interest in the acquired land as a consequence of the joint venture agreement, which is a compensable interest pursuant to s 4(1) of the Just Terms Act. Accordingly, on 24 November 2015, following a period of correspondence with Council in relation to the claimed compensable interest, Moss Capital submitted a claim for compensation under the Just Terms Act.
4. On 1 December 2015, the solicitors for Council notified Moss Capital that its claim for compensation had been rejected. On 24 February 2016, Moss Capital commenced these proceedings.
5. On 29 March 2017, Cannchar commenced Class 3 proceedings in respect of the acquired land ('Cannchar proceedings'). There has been no request or order that the Cannchar proceedings be joined with these proceedings pursuant to s 25(2) of the Land and Environment Court Act 1979 (NSW).

Relevant legislation

1. Section 67(1) of the Just Terms Act provides: 67 Appeal against failure to entertain claim for compensation (1) A person who has not been given a compensation notice and whose claim for compensation under this Part is rejected (or taken to be rejected) may appeal to the Land and Environment Court against the rejection of the claim.
2. Part 28, Division 2 of the Uniform Civil Procedures Rules 2005 provides: Division 2 Separation of questions 28.2 Order for decision (cf SCR Part 31, rule 2) The court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial in the proceedings. 28.3 Record of decision (cf SCR Part 31, rule 5) If any question is decided under this Part, the court must, subject to rule 28.4, either: (a) cause the decision to be recorded, or (b) give or make such judgment or order as the nature of the case requires. 28.4 Disposal of proceedings (cf SCR Part 31, rule 6) (1) This rule applies if the decision of a question under this Division: (a) substantially disposes of the proceedings or of the whole or any part of any claim for relief in the proceedings, or (b) renders unnecessary any trial or further trial in the proceedings or on the whole or any part of any claim for relief in the proceedings. (2) In the circumstances referred to in subrule (1), the court may, as the nature of the case requires: (a) dismiss the proceedings or the whole or any part of any claim for relief in the proceedings, or (b) give any judgment, or (c) make any other order.

Council's position

1. Council disputes Moss Capital's assertion that it has a compensable interest in the acquired land arising from its position as a co-venturer in the development of Curtis Estate, and a caveatable interest arising through cl 21 or 24.1 of the joint venture agreement. Rather, Council submits that Moss Capital's rights under the joint venture agreement are purely contractual and personal to it. Accordingly, Council submits that Moss Capital does not have a compensable interest for the purposes of the Just Terms Act; see Hornsby v Roads and Traffic Authority (1997) 41 NSWLR 151; Dial a Dump Industries Pty Ltd v Roads and Maritime Services [2016] NSWLEC 39; (2016) 216 LGERA 285 per Preston CJ ('Dial a Dump 2'). Further, Council relies on Dial a Dump Industries Pty Ltd v Roads and Maritime Services [2015] NSWLEC 172 ('Dial a Dump 1') to submit that Moss Capital bears the onus of demonstrating a compensable interest in the acquired land.
2. In support of the Court ordering the separate question in these proceedings, Council relies on the reasoning in Dial a Dump 1, and submits that: 1. a negative answer to the question would be entirely dispositive of Moss Capital's claim; 2. the determination of the answer involves construction of the joint venture agreement and therefore the evidence is confined and is otherwise unrelated to the determination of the quantum of compensation; 3. a positive answer to the question would allow the proceedings to enter into the conciliation process under s 34 of the Land and Environment Court Act 1979 (NSW), which may obviate the need for a contested trial; 4. a positive answer to the question would allow the evidence (especially the expert evidence) to focus solely on the quantum of the claim, therefore providing an obvious cost saving; and 5. if Moss Capital also makes a market value claim in these proceedings, a positive answer to the question could materially affect the preparation and running of the Cannchar proceedings as a result of s 56(2) of the Just Terms Act.

Moss Capital's position

1. Moss Capital submits that an order for the separate question is unnecessary as: 1. no issue is practically and fully resolved by the separate question when taking into account the "parallel" claim by Cannchar in the Cannchar proceedings; 2. the Court will, as a matter of practicality, be required to resolve the same question twice; and 3. there is no material savings in Court time, or in effort by either the Court or Council, by resolution of the separate question, and in particular, expert evidence of market value of the acquired land will be required regardless.
2. In its written submissions, Moss Capital submits that: While no order has yet been made, it is likely that both sets of proceedings [i.e. the Cannchar proceedings and these proceedings] will be joined together pursuant to s 25(2) of the Land and Environment Court Act 1979 given both Cannchar and Moss Capital express an interest in the subject land.
3. Further, Moss Capital notes that, as per Macfarlan JA in Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182 at [10], "strong reasons" must be shown for the departure from the ordinary course of hearing and determining all issues in a proceedings at the same time.
4. Moss Capital submits that determining Moss Capital's interest, if any, in the acquired land, is not simply a question of the construction of the joint venture agreement, but also requires consideration of the operation of the joint venture agreement in practice, and the nature of the interest granted to Moss Capital as at the date of acquisition.
5. Moss Capital submits that even if the separate question is ordered and answered in the negative, it would not dispose of all the issues, as the Cannchar proceedings remain on foot, and would require consideration of Moss Capital's contribution to development costs (that presumably will be said to be wasted) in the context of the joint venture agreement.
6. Accordingly, Moss Capital submits that there is a real risk that this Court will be required to resolve the same question - being what is the nature of Moss Capital's interest - twice, as even if the separate question is negatively answered, the Court will nevertheless be required to consider the equitable relationship between Cannchar and Moss Capital in the Cannchar proceedings by virtue of the joint venture agreement. By not proceeding to determine the separate question, Moss Capital submits, the Court saves itself the need to consider the same question in two different contexts.

Consideration

1. The principles applicable to the exercise of the Court's discretion to order the determination of a separate question are well known, and were distilled by Biscoe J in 820 Cawdor Road Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 8; (2013) 195 LGERA 170 at [10] as follows: (a) Generally speaking, all issues should be tried and decided at the same time. (b) It is for the party seeking the order to show to the Court that separate decision of a question is appropriate. (c) Separate decision of a question is likely to be appropriate where it can clearly be seen that it will facilitate the just, quick and cheap resolution of the proceedings or the central issues in the proceedings. This gives effect to s 56 of the Civil Procedure Act. Thus, the procedure needs to be fair and involve real savings in time and cost. (d) Separate decision of a question may be appropriate where it is critical to the outcome of the proceedings and (at least if decided in one way) will bring the proceedings to an end. (e) In particular circumstances separate decision of a question may be appropriate even if it will not bring the proceedings to an end. This may occur where the decision will substantially narrow the field of controversy by obviating unnecessary and expensive hearing of other questions or where the decision carries with it a strong prospect that the parties will then be able to agree upon resolution of the proceedings. But on such occasions care must be exercised lest fragmentation of the proceedings (particularly where the exercise of appeal rights is borne in mind) brings delay, expense and hardship greater than that which the making of an order was intended to avoid. (f) Separate decision of a question is unlikely to be appropriate where it may involve the credibility of witnesses which is material to remaining issues in the proceedings (and thus require the remaining issues to be dealt with by another judge). (g) Where the question sought to be separated involves a question of law, there should be a clear definition of what the point of law raised is and all the facts upon which that question has to be considered should be agreed or clearly ascertainable. (h) Where the facts upon which decision depends are contentious, confidence in the utility of the separate question process may be less likely.
2. These principles have been followed in a number of subsequent proceedings, including Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182 at [10] (per Macfarlan JA) and [87]-[92] (per Ward JA), Dial-a-Dump Industries Pty Ltd v Roads and Maritime Services [2015] NSWLEC 172 at [30]-[36] and Challenger Listed Investments Ltd v Valuer General [2015] NSWLEC 7 at [14].
3. Applying these principles to the material submitted, I am satisfied that it is appropriate to make an order for a separate determination of the question in the Motion. My reasons can be stated briefly.
4. First, I am satisfied that a separate determination of the question stated in the Motion will result in a real time and cost saving. I accept the statement in paragraph 8 of the affidavit of Rodney Anthes affirmed 20 February 2017 that a hearing on the separate question would take 1 to 2 days, whereas a full hearing on all the matters would take approximately 7 to 10 days. I am satisfied that this time and cost saving fulfils the overriding purpose as set out in s 56 of the Civil Procedure Act 2005 (NSW), being to facilitate "just, quick and cheap resolution of the real issues in the proceedings".
5. Second, I am further satisfied that the separate question is warranted in these proceedings as a negative answer to the separate question will be dispositive of these proceedings.
6. I note Moss Capital's submission that, even if these proceedings are disposed of, the Court will still be required to consider the nature of Moss Capital's interest in the acquired land for the purposes of determining compensation in the Cannchar proceedings. While this may be the case, I am reluctant to take this into account in determining this Motion, given that the two proceedings have not been joined. In determining the appropriate course I am required to consider the effect of granting the Motion on the proceedings presently before me, and in those circumstances I am convinced that granting the Motion would be the most efficient course. Additionally, I note Council's submission that Moss Capital can lead evidence from Cannchar in relation to the determination of the separate question, and that any findings made in the current proceedings can be taken into account in the Cannchar proceedings.
7. Third, I accept Council's submission that the evidence on the separate question will relate to the construction of the joint venture agreement for the purpose of determining the nature of Moss Capital's interest. I do not accept Moss Capital's submission that expert evidence of market value of the acquired land will be required regardless of whether the separate question is ordered. The issue to be determined by hearing the separate question is whether Moss Capital has a compensable interest in the acquired land. On the evidence before me, it appears that the market value of the acquired land will only be relevant if it is determined that Moss Capital does have a compensable interest in the acquired land. This evidence is not relevant to determining whether Moss Capital has a compensable interest in the first instance.
8. Accordingly, I am satisfied that, should the separate question be answered in the affirmative, there is unlikely to be an overlap between the evidence required for the separate question and the balance of the proceedings, which would relate to the quantum of compensation. Further, I do not consider that the separate question will involve any issues relating to the credibility of witnesses involved in the balance of the proceedings.
9. Fourth, for the reasons set out in [25] above, I find that the separate question involves a separate point of law to that which falls to be determined in the balance of the proceedings, should they proceed. Further, the parties have not indicated that the facts relating to the separate question will be contentious.
10. In the circumstance, I find that Council has demonstrated that the hearing of the proposed separate question will likely facilitate the just, quick and cheap resolution of the proceedings and will achieve substantial time and cost savings. I am satisfied that the usual concerns relating to the fragmentation of proceedings is offset to a significant extent, and that the determination of the separate question in these proceedings is warranted.

Orders

1. The Court orders that: 1. The following separate question be determined under r 28.2 of the UCPR: Did the Applicant have an "interest" in the following land: a. Lots 69-88 in Deposited Plan 15764 (inclusive); b. Lots 184-197 in Deposited Plan 15764 (inclusive); and c. Lots 225-229 in Deposited Plan 15764; as at 10 July 2015 for the purpose of section 37 of the Land Acquisition (Just Terms Compensation) Act 1991? 1. The parties have leave to approach the Registrar forthwith for directions for the allocation of a hearing date for the separate question. 2. The costs of Council's application for an order for determination of the separate question are reserved.

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: 19 April 2017