Noubia Pty Limited v Coffs Harbour City Council

Brief procedural history

1. The brief facts of the proceedings were recounted by Basten JA in Noubia CA at [3]: 3. The Lakes Estate is a residential development on the south-west side of Coffs Harbour, forming part of the North Boambee Valley. Pursuant to a development consent given to the respondent, Noubia Pty Ltd (Noubia), in April 2003, three parcels of land were vested in the Coffs Harbour City Council. Noubia, as the developer and owner of the land, sought compensation for the land so vested pursuant to a condition of the consent. The Council agreed to payment of an amount of $110,000 with respect to each of two lots, but denied liability to pay compensation for the third.
2. In Noubia CA (Basten JA, Bathurst CJ and Bell P agreeing) the Court of Appeal allowed the appeal from Noubia LEC (Sheahan J) and made the following orders at [127]: 1. Allow the appeal and set aside orders (1), (2), (3) and (5) made in the Land and Environment Court on 13 August 2019. 2. In place therefore, (a) declare that no amount is payable by the Council to Noubia Pty Ltd with respect to the transfer or dedication of lot 96; (b) otherwise remit the matter to the Land and Environment Court for assessment of the compensation payable by the Council to Noubia Pty Ltd in respect of lots 94 and 163. 3. Order that Noubia Pty Ltd pay the Council's costs in this Court.
3. The remitted matter was allocated to me and was part-heard after a site view and hearing on 29 March to 1 April 2021. On 1 April 2021 I stood the matter over with arrangements to be made for future hearing dates. One of the reasons for standing the matter over was that in the course of the hearing it became clear the parties' engineering experts were using different modelling. I considered that the present state of the evidence was not adequate to enable me to evaluate that evidence. My orders of 6 May 2021 are reproduced below: The Court orders: 1. The part heard hearing before Pain J is listed for further hearing on 9 August 2021 and 13 August 2021 in person at the Land & Environment Court of NSW, Level 4, 225 Macquarie Street, Sydney NSW 2000. 2. By 14 May 2021, the parties' hydrology experts Mr Peter Jamieson and Dr Daniel Martens are to attend the Head Office of Umwelt (Australia) Pty Limited together at 75 York Street, Teralba NSW 2284 and confer regarding: (a) the XP Storm modelling relied on by Mr Jamieson namely, the modelling done in relation to the Development Application approved in 2003 and the modelling done in relation to the Alternative Trunk Drainage Scheme for the purposes of Annexure B of the Joint Hydrology Report dated 20 February 2019 (Exhibit A3) and the Joint Supplementary Hydrology Report (Exhibit A23); (b) the XP Storm modelling of the 2003 Development Application and the 2019 Alternative Trunk Drainage Scheme flow rates at the southern boundary compared with the pre-development flow rate at that location during a 1:100 event; and (c) the Bewsher North Boambee Valley Flood Study November 1991, in particular, the parts comprised by Exhibit R13 (pp 1-3, Figures 8 & 11 (relied on by Dr Martens) and the Appendix A Study Brief), and prepare a further supplementary joint report, which is to be filed and served, and provided by the parties to their valuation experts. 3. By 9 June 2021, the parties are to advise the Court whether the parties' hydrology and/or valuation experts are required by either party for further cross-examination. 4. By 18 June 2021, the applicant is to file and serve written Closing Submissions. 5. By 16 July 2021, the respondent is to file and serve written Closing Submissions. 6. By 30 July 2021, the applicant is to file and serve written Closing Submissions in Reply. 7. The parties have liberty to restore on 3 days' notice.
4. On 2 August 2021 at the parties' request I vacated the August 2021 hearing dates because of the unavailability of a further expert report of the engineers. I listed the matter for hearing before me on 14 to 17 March 2022. On 27 October 2021 the Joint Report was filed with the Court, having required substantially more work from the experts than was originally contemplated by them.

Joint Report

1. The Joint Report included in par 5 a brief chronology of the stormwater modelling review steps undertaken by the experts Mr Jamieson and Dr Martens. As part of the first round of modelling, on 20 May 2021 the experts met to view XPStorm modelling as ordered by the Court on 6 May 2021. The XPStorm model files used for the 2003 development application were in 2019 and 2021 not able to be run using a 2003 XPStorm software version. Instead, the 2019 and 2021 models were imported into, rebuilt and run within the XPStorm 2018.2.1 software version by Mr Darren Lyons of Umwelt (Australia) Pty Ltd. Dr Martens was comfortable that the models provided closely represented those used in 2003/2004. The experts viewed Mr Lyons' XPStorm modelling on 20 May 2021. The models and modelled outputs viewed on 20 May 2021 were forwarded to the experts on 17 June 2021 for review. Dr Martens identified some problems with the models to which Mr Jamieson responded.
2. A revised set of XPStorm models were provided to Dr Martens on 27 July 2021. These models were subsequently superseded as part of a report prepared by Mr Lyons on 6 September 2021. These were the second and third rounds of modelling. The experts made comments on the variations made to the modelling. Dr Martens was content to rely on the modelling supplied by Mr Lyons. The fourth round of modelling occurred in response to comments by Dr Martens on 1 October 2021. The experts agreed in par 6 that the outcomes of the fourth round of modelling were acceptable from a hydrologic and hydraulic perspective and that the revised alternative drainage scheme would comply with the Council's requirements. The experts also considered in par 7 various parts of the Bewsher North Boambee Valley Flood Study dated November 1991.

Applicant's submissions

1. The Applicant wishes to rely upon the Joint Report. The consensus in the Joint Report of Engineers at par 6, which is premised on the retention of Lake 5 and an 18.6 m wide channel, deals with both: 1. hydrologic and hydraulic modelling of flood conveyance in the 1 in 100 year ARI event; and 2. on-site detention (that is, floodplain storage).
2. The Joint Report discharges what was required by order 2(a)-(c) made on 6 May 2021. It ought to be admitted into evidence without qualification and the Applicant should be entitled to rely on the agreed position of the experts.
3. The Court's direction of 6 May 2021 was to produce a further joint supplementary report. The experts were asked to consider the modelling used and prepare a report. Appropriately, the parties' lawyers did not tell the experts what to say. The Joint Report is the report required by the Court. This is not an application to rely on fresh evidence inconsistent with the case run by the Applicant before Sheahan J. The Court asked for a consensus to be reached between the experts to resolve the inability to compare the modelling in March and April 2021 and the experts have produced such a consensus. The Council does not like the answer and is trying to raise procedural objections. The directions given on 6 May 2021 referred to specific modelling, but upon conferring the experts agreed it was impossible to literally comply with the directions and arrived at another consensus position to assist the Court. The Joint Report is entirely consistent with the orders of 6 May 2021. This is distinct from a situation in which the Applicant has produced a new report of its own initiative and sought leave to rely on it on remitter. The Applicant does not wish to run its case again by reference to new evidence.
4. Both experts have agreed to revise their original positions. This is common when experts conference. That the Applicant seeks to rely on these changed positions does not mean the Applicant seeks to entirely change its case. It merely recognises that the experts have reached a new consensus and the case should proceed on the basis of this revised position.
5. An entirely new round of joint reporting on planning and valuation will not be required and the Council seriously overstates its case on that matter. The planners and valuers will be able to deal with the new evidence briefly and ought to have a chance to confer and respond. This is a commonplace procedural step in response to a change of expert evidence in another discipline. This is not akin to a need to start again. For example, the Applicant's case on Lot 94 will be the same. Lot 163 will be affected by the additional storage lake but this is a confined issue and only requires a downward adjustment. Entirely new reports are not necessary.
6. The Council is wrong to submit that it is detrimental that the 2003 modelling that Mr Jamieson said he relied on previously is not available and that this is detrimental for the Applicant. Dr Martens is comfortable that the 2019 and 2021 models which were made available to the experts - which were imported into and rebuilt and run within XP Storm 2018.2.1 software version - closely represent those used in 2003/2004 (see above in [7]). Dr Martens maintained this state of satisfaction in relation to modelling supplied by Mr Lyons to Dr Martens on 6 September 2021 as further modified by a revised set of models (4 models) provided by Mr Lyons to Dr Martens on 14 October 2021, which resulted in consensus and the agreement between the experts that is set out in the Joint Report.
7. It would not be fair to the Applicant to exclude it from relying on a consensus position that is expressed in a joint report, which was obtained after the Court directed the experts to consider the matter and seek to reach agreement.
8. The just, quick and cheap resolution of the remaining real issues in dispute warrant receipt into evidence of the Joint Report which was expressly required by the Court.

Council's submissions

1. The Council does not object to par 7 of the Joint Report, related to the Bewsher 1991 Flood Study. However, the balance of the Joint Report is not responsive to the Court's directions. The Council opposes leave being given to rely upon the Joint Report (noting that pars 1, 2 and 3 are merely introductory).
2. In addition to not responding, the objected to paragraphs now seek to support a further revised alternative drainage system. The Applicant is seeking to rely on fresh evidence and it is far too late given that the proceedings have proceeded to date on certain bases, which the Joint Report will set at nought.
3. The specific task involved in the Court's directions made on 6 May 2021 was one described by the experts at the hearing in March/April 2021 as "straight forward" (Tcpt, 1 April 2021, p 169(25)).
4. However, fundamental to the task was the ability to compare the modelling that was done in 2003 (Tcpt, 1 April 2021, p 169(40)) with the modelling done in 2019. Indeed, it was necessary to be able to compare the 2019 model against "exactly the same model as the one that was used in 2003" (Tcpt, 1 April 2021, p 169(47)). That task should not have been a difficult one. Mr Jamieson had, during the course of the giving of his oral evidence on 31 March 2021 repeated on numerous occasions that he had used the same 2003 model and then compared it against the 2019 model. As it transpired, the 2003 model was not able to be run in 2019 (Joint Report par 5(a)(i)) and in 2019 a new model attempting to replicate the 2003 model was rebuilt. No mention has ever been made of that fact at any time during these proceedings. Nor has any explanation been given as to why the 2003 model was not available. Further, although the Council invited the Applicant to prepare evidence in support of its reliance upon the Joint Report, no evidence has been provided to explain the obvious inconsistencies between Mr Jamieson's evidence on 6 March 2019 and 31 March 2021 and his contribution to the Joint Report. The model also had to be rebuilt in 2021 (Joint Report par 5(a)(i)). The Joint Report does not respond to the Court's direction of 6 May 2021. If the experts say they could not comply with the orders they should have sought to amend the orders.
5. That being so, the question arises as to whether the Applicant can seek leave to rely on the new modelling in 2021. That application should be rejected. These proceedings are remitted proceedings. During the first hearing the Council made it clear that the inadequacies of the Applicant's modelling, and the failure to make it available to the Council, rendered the Applicant's evidence in relation to the channelised system unsatisfactory. That had the further consequence, so it has already been submitted before Sheahan J, that the Court would reject the Applicant's evidence to support its channelised system and prefer the Council's evidence in relation to the five-lake system.
6. Upon remitter the Applicant did seek leave to rely upon additional evidence. That additional evidence came from the Applicant's valuer, its town planner and also from Mr Jamieson. The Court allowed additional evidence from Mr Jamieson but that evidence did not address criticisms of the modelling. The Applicant reopened the issue in cross-examination.
7. This is not one of the very limited circumstances where the Court would give leave to rely on fresh evidence. Plainly, the issue could have been addressed during the first hearing. It was not. It could have been addressed when leave was sought to rely upon additional evidence. It was not. The present circumstances are, in the Council's submission, a classic example of where the Court would, in the exercise of its discretion, not grant leave. The first hearing - at which the Applicant took the risk in relation to the modelling criticism - was not merely a 'warm-up for the main event on the remitter'.
8. This leads to another problem which is that fresh joint reporting by planners and valuers will now be necessary if the Joint Report is allowed. It is now a different scheme being assessed. The further revised alternative hypothetical scheme is one that changes from two lakes and a channel to one that comprises three lakes and a channel. The channel is wider, deeper and shorter (Joint Report par 5(b)(vi)). Another round of joint reporting will be necessary. Cross-examination will be needed of the experts. Almost the entirety of the hearings before Sheahan J and Pain J on remitter would be wasted. In relation to the valuers, the Court of Appeal remitted the matter in Noubia CA partly because the Applicant's valuers did not do a proper analysis and Sheahan J was wrong to prefer the Applicant's evidence without proper engagement. Anything that allows the Applicant to "start afresh" on valuation is dangerous. The only part of the first hearing that would not be rendered obsolete is that part of the hearing that related to the question of whether or not compensation was payable in respect of Lot 96. In relation to that part of the first hearing Sheahan J found that compensation was payable. The Court of Appeal found that no compensation was payable and that issue was not therefore remitted.
9. If the Joint Report is not allowed into evidence the Council will make the same submissions as it made in 2019 that its evidence should be preferred to the Applicant's. It would not be an issue that different modelling would be used by the experts because all that matters is relativity, in that a model can compare two points in time. The Court need only consider which evidence is to be preferred and there is no fresh evidence needed. It could not be described as just, quick or cheap to allow the Applicant to, in effect, start again in relation to a new scheme.

Consideration

1. The parties' submissions characterise the purpose of the Joint Report differently, as new evidence for which leave must be sought by the Applicant and refused (the Council), or as the joint report implementing the Court's orders on 6 May 2021 which can be relied on (the Applicant). I agree with the Applicant's characterisation of what has occurred, which is that the engineers have sought to respond to the Court's orders made on 6 May 2021, essentially ensuring that they provide their opinions based on the same model. This is not a case in which a party on remitter has sought to adduce fresh evidence and asked for leave to rely on that evidence unprompted by the Court. The Applicant seeks to rely on the Joint Report because the report seeks to comply with my orders of 6 May 2021.
2. That both experts have obviously had to go to some trouble to produce the modelling which enables the necessary comparisons and observations to be made is clear from the Joint Report, summarised above in [7]-[8]. Several rounds of modelling were considered necessary by them in order to comply with the Court's orders. Dr Martens agrees that the models they have built reflect generally the 2003/2004 model the subject of Mr Jamieson's earlier evidence, above in [7].
3. I cannot accept the Council's submission that the Joint Report does not meet my orders of 6 May 2021 because what has been prepared does not precisely align with the task I required, which task was entirely informed by what the experts thought was possible at that stage. Upon attempting to comply with the orders the experts have done their utmost in my view to produce a report which would assist the Court. I consider the Joint Report is generally in line with the orders of 6 May 2021. The Joint Report does not result in an entirely new case for the Applicant, who identifies above in [13] that the only resulting change is to Lot 163. No change in relation to Lot 94 arises from the Joint Report. Such evidence is essential to enable me to evaluate the engineering evidence, and to avoid some of the difficulties which appear to have arisen in the earlier proceedings before Sheahan J.
4. The acceptance of the Joint Report may give rise to additional joint reporting by other experts. According to the Applicant this is quite limited.
5. Much of what the Council identified may (I emphasise may) be relevant to an argument about costs, a matter I have no view about at present given the further four days of hearing in March 2022.
6. Given the large amounts likely to have been spent on legal and expert fees to date with more to be incurred in further hearing time I encourage the parties to explore settlement options.
7. The just, quick and cheap resolution of proceedings favours allowing the Joint Report to be relied upon.
8. The parties supplied the Court with orders by consent made in chambers on 25 November 2021. They are as follows.
9. The Court ordered: 1. Both parties have leave to rely upon the Joint Hydrology Report of Engineers filed on 27 October 2021. 2. The Applicant has leave to and may rely upon the revised alternative trunk drainage scheme annexed to the Joint Hydrology Report of Engineers filed on 27 October 2021. 3. By 24 December 2021, the parties' town planners Keiley Hunter and Clare Brown are to confer and provide a further joint supplementary report having regard to the Joint Hydrology Report of Engineers filed on 27 October 2021. 4. By 21 January 2022, the parties' valuers John Maher and Terry Davis are to confer and provide a further joint supplementary report having regard to the Joint Hydrology Report of Engineers filed on 27 October 2021. 5. By 28 January 2022, the parties are to advise the Court whether the parties' hydrology experts, town planners and/or valuation experts are required by either party for further cross-examination. 6. The parties are to participate in good faith in a mediation by 4 February 2022. 7. By 11 February 2022, the applicant is to file and serve written Closing Submissions. 8. By 4 March 2022, the respondent is to file and serve written Closing Submissions. 9. By 11 March 2022, the applicant is to file and serve written Closing Submissions in Reply. 10. The parties have liberty to restore on 3 days' notice.

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: 03 December 2021