Neale v NSW Department of Planning and Infrastructure

Relevant legislation

1. Several parts of the CP Act and the Uniform Civil Procedure Rules 2005 (UCPR) are relevant to the parties' arguments.

Dismissal

1. The Respondent's motion seeks an order that the proceedings be dismissed pursuant to r 13.4 of the UCPR which provides: Part 13 Summary disposal ... 13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: ... (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, ... the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1).

Leave to amend pleadings

1. The relevant provisions of the CP Act state: Part 6 Case management and interlocutory matters … Division 3 Other powers of court 64 Amendment of documents generally (1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. ... 65 Amendment of originating process after expiry of limitation period (1) This section applies to any proceedings commenced before the expiration of any relevant limitation period for the commencement of the proceedings. (2) At any time after the expiration of the relevant limitation period, the plaintiff in any such proceedings may, with the leave of the court under section 64(1)(b), amend the originating process so as: ... (c) to add or substitute a new cause of action, together with a claim for relief on the new cause of action, being a new cause of action that, in the court's opinion, arises from the same (or substantially the same) facts as those giving rise to an existing cause of action and claim for relief set out in the originating process. (3) Unless the court otherwise orders, an amendment made under this section is taken to have had effect as from the date on which the proceedings were commenced. (4) This section does not limit the powers of the court under section 64. (5) This section has effect despite anything to the contrary in the Limitation Act 1969. (6) In this section, originating process, in relation to any proceedings, includes any pleading subsequently filed in the proceedings.

Application to transfer proceedings to Supreme Court

1. The relevant provisions of the CP Act concerning the transfer of proceedings from the Court to the Supreme Court state: Part 9 Transfer of proceedings between courts ... Division 2A Transfer of proceedings between Supreme Court and Land and Environment Court 149A Definitions (1) In this Division: transfer order means an order referred to in section 149B (1) or (2). transferee court means the court to which proceedings are to be transferred pursuant to a transfer order. transferor court means the court from which proceedings are transferred pursuant to a transfer order. (2) For the purposes of this Division, proceedings are related if the matters with which they deal are so closely associated as to form part of the same controversy. 149B Transfer of proceedings between Supreme Court and Land and Environment Court (1) If either the Supreme Court or the Land and Environment Court is satisfied, in relation to proceedings before it, that it is more appropriate for the proceedings to be heard in the other court, it may, on application by a party to the proceedings or of its own motion, order that the proceedings be transferred to the other court. … (3) No appeal lies against a decision of the transferor court to make, or not to make, an order under this section. ... 149D Proceedings after transfer (1) Subject to the rules of court applicable in the transferee court: (a) any proceedings with respect to which a transfer order takes effect continue in the transferee court: (i) as if the proceedings had been duly commenced in the transferee court on the date on which they were commenced in the transferor court, and … (3) Subject to the rules of court applicable in the transferee court, the power of the transferee court to make orders as to costs includes a power to make orders with respect to the costs of: (a) the application for, and the making of, the transfer order, and (b) any step taken in the proceedings before the transfer order was made.

Costs

1. If amendment of pleadings is allowed the Respondent seeks an otherwise order for costs thrown away in these proceedings to be payable forthwith under r 42.7(2) of the UCPR: Part 42 Costs Division 1 Entitlement to costs ... 42.7 Interlocutory applications and reserved costs (1) Unless the court orders otherwise, the costs of any application or other step in any proceedings, including: (a) costs that are reserved, and (b) costs in respect of any such application or step in respect of which no order as to costs is made, are to be paid and otherwise dealt with in the same way as the general costs of the proceedings. (2) Unless the court orders otherwise, costs referred to in subrule (1) do not become payable until the conclusion of the proceedings.
2. The usual rule for costs in the event of dismissal of proceedings is provided by r 42.20 of the UCPR which states: Part 42 Costs … Division 5 Proceedings discontinued or dismissed ... 42.20 Dismissal of proceedings etc (1) If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant's costs of the proceedings to the extent to which they have been dismissed. ...
3. The Applicant also noted r 12.4 of the UCPR which states: Part 12 Discontinuance, withdrawal, dismissal and setting aside of originating process Division 1 Discontinuance of claim ... 12.4 Stay of further proceedings to secure costs of discontinued proceedings If: (a) as a consequence of the discontinuance of proceedings, a plaintiff is liable to pay the costs of another party in relation to those proceedings, and (b) before payment of the costs, the plaintiff commences further proceedings against that other party on the same or substantially the same cause of action as that on which the former proceedings were commenced, the court may stay the further proceedings until those costs are paid and may make such consequential orders as it thinks fit. ...
4. I also note the following provision in relation to the dismissal of proceedings: Division 3 Dismissal of proceedings etc for lack of progress … 12.10 Stay of further proceedings to secure costs of proceedings dismissed If: (a) as a consequence of the dismissal of proceedings, a party is liable to pay the costs of another party in relation to those proceedings, and (b) before payment of the costs, the party commences further proceedings against that other party on the same or substantially the same cause of action, or for the same or substantially the same relief, as that on or for which the former proceedings were commenced, the court may stay the further proceedings until those costs are paid and make such consequential orders as it thinks fit.

Applicant's submissions

1. The Applicant submitted that as the proceedings were commenced in the Supreme Court and transferred to the Land and Environment Court, the Court ought to grant leave to amend the pleadings and transfer the proceedings to the Supreme Court. The claims in the amended pleadings arise from essentially the same facts as those giving rise to the original summons. The history and factual matrix are the same and therefore the matter should remain active.
2. Amendment avoids potential limitation issues. The Applicant referred to s 65(3) of the CP Act to indicate that if leave were granted to amend its statement of claim he would be less likely to encounter issues with limitation periods in the Supreme Court.
3. As fraud is alleged limitation may not even arise. The Court does not need to determine the question of limitation. There is no prejudice to the Respondent in referring proceedings that started in the Supreme Court back to the Supreme Court.
4. The Applicant accepts that certain costs have been thrown away. If amendment is allowed costs thrown away should be ordered but these should not be ordered as payable forthwith and should be limited in scope to the costs of the Respondent's motion. If the amendment is allowed the otherwise order sought by the Respondent under r 42.7 of the UCPR is not appropriate and costs ought to be dealt with upon the final determination of these proceedings in the Supreme Court, as provided by s 149D(3) of the CP Act.
5. If the proceedings are dismissed the Respondent may seek an order that its costs are payable forthwith. Such an order may prevent the commencement of the Supreme Court proceedings as these can be delayed until costs are paid as provided under r 12.4 of the UCPR. The Applicant submitted that the burden imposed by r 42.20, whereby the Applicant is liable to pay the Respondent's costs of the entirety of these proceedings, should be taken into account by the Court when considering whether to amend and transfer the proceedings.

Respondent's submissions

1. The Respondent pressed its motion to have the proceedings dismissed and an order that the Applicant pay its costs. The Respondent submits that r 13.4(1)(b) and (c) of the UCPR apply. The original statement of claim filed on 8 May 2012 discloses no reasonable cause of action. The relief sought is futile given the major project concept plan to which it relates was finally determined by the PAC in December 2014. To continue the proceedings in these circumstances would be an abuse of the processes of the Court.
2. The Respondent submitted that the Applicant can and should file a new originating process in the Supreme Court as that is the court with jurisdiction in the matter as now pleaded. The Court should not rule on any matters of limitation as those are matters of some complexity and should ultimately be considered by the Supreme Court if the matter proceeds there. I agree.
3. If the Court is minded to allow the amendment the Respondent's costs of the proceedings should be payable forthwith as costs thrown away.

Consideration

1. If I do not allow the Applicant to amend his claim and transfer the proceedings to the Supreme Court the Applicant's statement of claim should be dismissed as disclosing no cause of action pursuant to r 13.4(1)(b) of the UCPR. I will therefore firstly consider whether the amendment should be allowed.
2. The basis of the Applicant's application to amend under the CP Act or UCPR was not clearly articulated. I infer that the application is being made under s 65(2) of the CP Act which refers to applications being made after the expiration of a relevant limitation period. The events referred to in the amended pleadings occurred in 2011. The Applicant appeared to accept that a limitation period would apply for the claims other than the fraud claim, in relation to which there is apparently no limitation period. I should stress that I am unable on the arguments before me to resolve any Limitation Act 1969 issues. Such matters would be far better addressed with fulsome argument in the Supreme Court.
3. The Applicant referred to s 65(3) which provides that, unless the court otherwise orders, an amendment made under s 65 is taken to have effect as from the date the proceedings commenced. This it was submitted would overcome any statute of limitation problems as the amendments would be deemed to commence from 2011. As just stated in par 23 above I do not consider the question of limitation should be resolved finally now. If I allow amended pleadings to be filed I would make an otherwise order under s 65(3) concerning the date from which the amendments commence, most logically the date of this judgment.
4. Under s 65(2)(c) a new cause of action may be added if it arises from the same or substantially the same facts as in the court's opinion give rise to an existing cause of action and claim for relief set out in the originating process. Considering causes of action firstly, while the Applicant submitted that the new causes of action arise from the same facts as the original summons that is correct in only the broadest sense. Both the summons and the amended statement of claim identify causes of action said to arise from the same concept plan approval process for the same land. The causes of action articulated in both and the facts cited to establish these are otherwise entirely different. The events to which the original summons refers have been overtaken by subsequent events. Apart from at the broadest level, there are no facts underpinning the original causes of action identified to support the causes of action in the amended statement of claim.
5. Considering relief secondly, the relief claimed originally was for declarations and orders in relation to the assessment of the concept plan by the Respondent. The amended statement of claim seeks declarations of alleged fraudulent conduct or conduct amounting to injurious falsehood or misfeasance and seeks damages for the Applicant for such conduct. There is no overlap between the relief sought in the original pleadings and the amended pleadings.
6. In these circumstances s 65(2)(c) has no application given its express terms.
7. While not expressly stated in s 65(2)(c) implicit in its application must be that a court has jurisdiction to determine any new cause(s) of action sought to be raised as any amendment is theoretically otherwise futile. Qualifications to such a statement can be readily identified but it serves to underscore at a general level that where a court has no jurisdiction to determine a new cause of action the usual course would be that the proceedings are commenced in the court with jurisdiction.
8. That the proceedings were originally commenced in the Supreme Court before being transferred to this Court because it had jurisdiction over the matters then raised does not assist the Applicant's application. The amendments contain entirely new causes of action and claims for relief which are appropriately dealt with in the Supreme Court. These matters suggest that the amendment should not be allowed.
9. There is no legal bar so far as I am aware to the Applicant commencing proceedings in the Supreme Court subject to the resolution of any Limitation Act issues. I have already held that it is not appropriate that I determine any limitation issues. These are best dealt with in the Supreme Court. I exercise my discretion to refuse leave to the Applicant to rely on the amended statement of claim. Accordingly, the proceedings should be dismissed.
10. The motivation for the Applicant's application appears to be in part the seeking of procedural advantage in relation to the transfer of essentially fresh proceedings to the Supreme Court in a manner intended to overcome limitation and costs issues. To that end reliance was also placed by the Applicant on provisions in the CP Act concerning the transfer of proceedings to the Supreme Court but as I have determined that I will not allow the amended pleadings to be filed in this Court these provisions do not arise.

Costs

1. Costs are compensatory not punitive per Latoudis v Casey (1990) 170 CLR 534 at 543. The usual rule if proceedings are dismissed is that the party whose claim is dismissed pay costs of the proceedings, as provided by r 42.20 of the UCPR. The Court can exercise its discretion under that rule to make an otherwise order. The Applicant submits that it will be at a cost disadvantage if the proceedings are dismissed and a costs order is made under r 42.20. The Respondent will be able to seek a stay of any Supreme Court proceedings if the costs order is not paid. The relevant rule is r 12.10. Whether r 12.10 can be relied on by the Respondent in the future is not immediately apparent. The rule allows an application for the stay of new proceedings identifying similar causes of action and relief where there is an outstanding costs order between parties. I have found that the amended pleadings identify new causes of action and new claims for relief which are entirely different from the original claim.
2. In considering whether to make an order that all the Respondent's costs are payable, another way to characterise events concerning the original summons for costs purposes is that a supervening event, the approval of the concept plan, removed the subject matter of the proceedings rendering them otiose. The Applicant could have applied to discontinue the proceedings a long time ago. Due to the tardiness of the Applicant in doing so the Respondent has been put to the expense of filing and arguing the contested motion seeking dismissal. It should have its costs of that motion paid by the Applicant as it has been successful.
3. There have been a large number of mentions before the Court in these proceedings. Of the 17 mentions, a substantial number were for the purpose of advising this Court of the progress of other proceedings first in the Supreme Court, then the Court of Appeal and finally the High Court. Very little happened substantively in this Court despite the length of time the matter was here. The wider history of this matter from the Applicant's point of view is unfortunate given the financial issues that overwhelmed him in relation to the concept plan assessment process for his former land, ultimately pursued successfully by the receivers and managers appointed by the Commonwealth Bank. The present financial difficulties of the Applicant are relevant to consider in making a costs order. It is appropriate to make a limited costs order in the Respondent's favour from the time that the PAC approved the concept plan MP08_0207 on 19 December 2014. Arguably the Applicant should have amended his pleadings (assuming a claim which came within the Court's jurisdiction could be articulated) or discontinued the proceedings at that time. Consequently the Applicant must pay the Respondent's costs from 19 December 2014.

Orders

1. The Court orders that: 1. The Respondent's Notice of Motion dated 16 December 2016 is upheld. 2. The Applicant's proceedings are dismissed. 3. The Applicant is to pay the Respondent's costs from 19 December 2014.

---

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: 13 June 2017