Qasabian Family Investments Pty Ltd v Roads and Maritime Services

Qasabian Family Investments Pty Ltd v Roads and Maritime Services - [2017] NSWLEC 179 - NSWLEC 2017 case summary — Zoe

[3]

Mr Lunney's attempted deferral to Dr Ferrier

Second, however, despite my indication in my earlier decision that the quantum of the rental compensation to which Fishing Station was to be entitled was a matter for consideration and, if agreed, determination by the land valuers, Mr Lunney indicated that he did not consider that this was the appropriate basis upon which such a calculation should be undertaken.
He considered that this should be the subject of further examination by the RMS' expert business valuer Dr Ferrier, on a business valuation basis. Mr Lunney summarised his disagreement on this point, saying: 15. Whilst Mr Lunney appreciates Mr Dyson's position in relation to this issue, he considers that it is necessary to consider the appropriateness of applying a capitalisation rate for a disturbance claim of this nature and not just to simply assess the quantum of a capitalisation rate. 16. Mr Lunney considers that the assessment of an appropriate discount rate for a cost or loss of this nature falls more squarely within the domain of the business valuation experts as opposed to the real estate valuation experts.
Subsequently, Mr Lunney also commented, under the heading "DISAGREEMENT": 22. Mr Lunney considers that the factors influencing the capitalisation rate for the Mona Vale premises are different from the factors which would influence the appropriate discount rate to calculate the present value of the rental disadvantage which may be suffered by Fishing Station by reason of it relocating to the Mona Vale premises.
For this reason, the joint report of Mr Dyson and Mr Lunney had appended to it a further expert report by Dr Ferrier expressing business valuation opinions on this topic.
As I had determined, in my earlier decision, that this matter was appropriate to be dealt with by the land valuation experts, I rejected the comments by Mr Lunney proposing an alternative approach and rejected the material prepared by Dr Ferrier which had been appended to the joint report of Mr Dyson and Mr Lunney.

[6]

Fishing Station - a matter for correction pursuant to the slip rule?

Fishing Station seeks that I correct my earlier decision by allowing it a further $15,000 being for fitout costs at Mona Vale. Mr Hemmings SC for Fishing Station submitted that I should treat the non-inclusion of this amount as a "slip" and thus amenable to correct pursuant to r 36.15 of the Uniform Civil Procedure Rules 2005. He said (Transcript 11 October 2017, page 10 lines 8 to 16): The simple point that we note is that your Honour has not addressed that $15,000 concession or the $15,000 amount for fit out in the judgment. That's for one of two reasons potentially. One, because your Honour decided not to allow it or two, because there was an accidental slip or omission in your Honour's judgment and your Honour simply with respect and otherwise in a very detailed matter missed the $15,000 concession. If the correct approach to that is the second, it was an accidental slip or omission we make the application under the slip rule and your Honour would add the $15,000.
In her written closing submissions the first phase hearing, Ms Duggan wrote, at [18], the following: 18. On the respondent's case compensation under s.59(1)(c) is payable for - (a) …; (b) $15,000 being the fit out costs at Mona Vale.
The footnote to this amount in the written submissions identifies that it was taken from Fishing Station's development application for the Mona Vale premises.
In her closing submissions, Ms Duggan had said (Transcript 9 March 2017, page 186 lines 5 to 7): I should add to that an extra $15,000, which we refer to at paragraph 18 of our written submissions, being the costs of the fit out of the totality of the premises at Mona Vale, when not reducing that to the smaller area.
In this phase of the proceedings, Ms Duggan submitted (Transcript 11 October 2017, page 16 lines 11 to 24): That then brings me to the issue of what my friends call the slip rule. If your Honour was being asked or had done that which Mr Hemmings suggest you did do, then perhaps there may be some latitude for the application of the slip rule. But as you see from the document that was handed up by Mr Hemmings which is p 6 of our submissions in reply, in fact 186 of the transcript on 9 March 2017, the exercise which is suggested contains a concession is an exercise separate from and different from the exercise that your Honour undertook. So what the applicant has done is sought to find something that they didn't get and because we had indicated that if you adopted our method of calculation you would get it, that somehow they are entitled to it and we say that that is not the case. It is a different calculation. The concession isn't one that is at large and if the applicant wished to take advantage of the alternative case, they could have done so and made their claim. At the time they chose not to do so.
It is clear that the RMS approach to compensation in the first phase was endorsed by me and that proposed by Fishing Station rejected.
This matter is easily determined. The non-inclusion of the $15,000 in the compensation for Fishing Station was an inadvertent omission by me. Its availability arises from the case run by the RMS and not that advanced by Fishing Station. To the extent that this comprised an offer by the RMS at the closing submissions stage, it has not been withdrawn nor has any proposition been advanced that it was an inappropriate offer or made in error. The sum proposed is to be included in the compensation to which Fishing Station is entitled.

[7]

Introduction

Although the Qasabian Investments and Fishing Station proceedings were heard together and were subject to my earlier decision given on a composite basis, there were, in fact, two separate proceedings relating to distinctly different claims. They were only heard together because both Qasabian Investments and Fishing Station are entities associated with the Qasabian family and reasons of efficiency and the objective in s 56 of the Civil Procedure Act 2005 (the just, quick and cheap resolution of the issues genuinely in dispute between the parties), made it appropriate to deal with both claims in a single hearing.
This process resulted in an intermingling, in an imprecise fashion, of the amount of time involved in my earlier hearings that could be attributed to the Qasabian Investments claim or to the Fishing Station claim.
At the commencement of the hearing on 11 October, I raised with Mr Hemmings and Ms Duggan the question of whether it might be appropriate for me to make some apportionment order for costs if I concluded, because there were two separate proceedings, that there might be different outcomes for costs in each of them. I indicated that, at that time, and only tentatively, if I were to reach such a conclusion, the split between the investments and the fishing station proceedings might be 30/70.
Ms Duggan indicated that such an approach was acceptable to the RMS and tentatively indicated that a split on the basis I had postulated might be appropriate might be acceptable in the RMS' view.
On the other hand, Mr Hemmings submitted that, if I were to reach different costs conclusions in the two proceedings, the appropriate path was to have the division of costs dealt with through the assessment process.
As I have come to the conclusion that there should be different costs outcomes between the two proceedings, and because I have insufficient understanding of the extent to which preparation costs might have fallen between the two proceedings (including the costs of the experts), I have concluded that the appropriate course is to leave resolution of how costs should fall and in what amount to the assessment process as proposed by Mr Hemmings.
The approach taken on behalf of Qasabian Investments and Fishing Station is one based entirely on the outcomes in each of the proceedings. Put simply, in each of the proceedings, as the relevant applicant obtained a financial outcome that was greater than that which was the position of the RMS at the conclusion of the hearing, the applicant in each of the proceedings should have its costs awarded in those proceedings.
The position put by the RMS, in each instance, was a common, issues based one. Although advanced in slightly differing fashions concerning Qasabian Investments or Fishing Station, the RMS suggests that I should select the appropriate overall costs outcome from a cascading range set out in Ms Duggan's written submissions. The RMS does not envisage that Qasabian Investments and Fishing Station should, under any circumstances, be regarded as being entitled to having a complete and unalloyed entitlement to costs in the relevant proceedings.
It is not necessary to repeat the range of options posited by the RMS as I am satisfied that the question of costs in each matter can be settled from first principles.

[9]

Legal foundations

The Land Acquisition Act creates a statutory regime to ensure that a holder of an interest in land is provided with just compensation when that interest is compulsorily acquired by some State or local government entity for the carrying out of a public purpose.
The Court of Appeal has considered the question of costs entitlements arising from proceedings where the interest holder and the acquiring entity were unable to agree on all aspects of compensation, leaving it to the Court, in contested proceedings, to make such a determination.
It is appropriate to refer to two Court of Appeal decisions to reflect the appropriate approach to be taken in these two proceedings.
The relevant applicable broad statement of principle was set out by, in Dillon v Gosford City Council (2011) 184 LGERA 179; [2011] NSWCA 328, where Basten JA wrote, at [70] to [72]: In other respects, however, the appellants' propositions may be accepted. They support the proposition that a claimant for compensation in respect of a compulsory acquisition should usually be entitled to recover the costs of the proceedings, having acted reasonably in pursuing the proceedings and not having conducted them in a manner which gives rise to unnecessary delay or expense. That approach is also consistent with the absence of any general presumption that costs should follow the event: the owner who has been compulsorily dispossessed is entitled to take reasonable steps to seek the judgment of the Court in respect of the adequacy of any compensation offered. Whether steps taken in maintaining proceedings are reasonable will depend upon the circumstances of the particular case. …
This approach was subsequently endorsed by a differently constituted Court of Appeal in Brock v Roads and Maritime Services (formerly Roads and Traffic Authority of NSW) (2012) LGERA 267; [2012] NSWCA 404 where Tobias AJA observed, at [95]: As was noted by Basten JA in Dillon at [71], an owner of land who has been compulsorily dispossessed is entitled to take reasonable steps to seek the judgment of the court in respect of the adequacy of any compensation offered. …
His Honour also observed, at [96]: As Basten JA concluded at [72] in Dillon, the purpose of an award of costs, being to compensate the party for expenditure incurred in the course of litigation, must be taken into account although the nature of the litigation and the reasonableness of the conduct of the litigation by the claimant are central considerations.
I now turn to consider each of these proceedings in light of that which is to be taken from the above extracts.

Parties

Applicant/Plaintiff:

Qasabian Family Investments Pty Ltd

Respondent/Defendant:

Roads and Maritime Services

Cases Cited (5)

Judgment

HIS HONOUR: Qasabian Family Investments Pty Ltd (Qasabian Investments) and Fishing Station Pty Ltd (Fishing Station) both made claims against Roads and Maritime Services (the RMS) as a consequence of their differing interests in a site at Frenchs Forest that had been resumed by the RMS. The site was resumed for the purposes of widening Warringah Road, a road widening made necessary as a consequence of the construction of the new Northern Beaches Hospital.
As a further consequence, both Qasabian Investments and Fishing Station became entitled to compensation for their interests in the acquired site. In each instance, their entitlement to compensation is to be calculated in the fashion provided for by the Land Acquisition (Just Terms Compensation) Act 1991 (the Land Acquisition Act).
Qasabian Investments and Fishing Station were unable to reach agreement with the RMS as to the amount of compensation that each was entitled to as a consequence of the resumption. Exercising their rights under the Land Acquisition Act, Qasabian Investments and Fishing Station both commenced proceedings in this Court to have their claims determined.
Because Qasabian Investments and Fishing Station are both entities associated with the Qasabian family, the two claims were heard together between 6 and 9 March 2017. On 21 June 2017, I handed down my decision arising from that hearing (Qasabian Family Investments Pty Ltd v Roads and Maritime Services; Fishing Station Pty Ltd v Roads and Maritime Services [2017] NSWLEC 73) (my earlier decision). It is unnecessary to repeat, in detail, the matters dealt with in my earlier decision. It is, however, appropriate to note that: 1. one element of the Fishing Station claim (compensation for increased rental at the premises to which it had relocated) remained to be determined; and 2. costs of the proceedings, in each instance, were not dealt with in my earlier decision.
As a consequence, a further hearing was held on 11 October to deal with these two outstanding issues.
The terms of final orders to dispose of both the Qasabian Investments compensation claim and the Fishing Station compensation claim were to be discussed (and, if possible, settled) between the parties, in light of my earlier decision. As no agreement was reached on the terms of the necessary dispositive orders, this matter was also dealt with on 11 October.

(2012) 191 LGERA 267

(2011) 184 LGERA 179

[2012] NSWCA 404

[2011] NSWCA 328

Cited By (3)

Azizi v Council of the City of Ryde; Alnox Pty Ltd v Council of the City of Ryde

G Capital Corporation Pty Limited v Transport for NSW; Gertos Holdings Pty Ltd v Transport for NSW; Marsden Developments Pty Ltd v Transport for NSW

The Trustee for Whitcurt Unit Trust v Transport for NSW

At a glance

Court

Decision date

Before

Source

Judgment (14 paragraphs)

Parties

Cases Cited (5)

Cited By (3)