Roads and Maritime Services v Allandale Blue Metal Pty Ltd

Roads and Maritime Services v Allandale Blue Metal Pty Ltd - [2015] NSWCA 167 - NSWCA 2015 case summary — Zoe

Judgment

BEAZLEY P: On 12 February 2012, the Roads and Maritime Services (RMS) compulsory resumed a portion of land owned by Allandale Blue Metal Pty Ltd (Allandale). Pursuant to the Land Acquisition (Just Terms Compensation Act 1991 (NSW) (the Act), Allandale appealed against the amount of compensation determined by the Valuer-General pursuant to s 47 of the Act. The compensation so determined was $1,162,919. In November 2010, RMS made an advance payment of compensation to Allandale pursuant to s 48 of the Act in the sum of $1,046,627.10. On 24 March 2015, Pain J ordered that the compensation payable to Allandale was $3,387,796.
The lessee of the land, Quarry Products (Newcastle) Pty Ltd (QPN) which operates a quarrying business on the land, accepted the sum of $807,758 for disturbance pursuant to s 55(d) of the Act, based on loss of profits due to reduced access to the site and the resource.
RMS filed a notice of appeal on 18 May 2015. Its principal ground of appeal is that the primary judge erred in determining that Allandale was entitled to compensation for disturbance. It contends, as I understand the argument, that, as a matter of law, Allandale has no entitlement to compensation for disturbance, as such compensation has already been paid to the operator of the quarry, QPN. Alternatively, it contends that, if Allandale is entitled to compensation for disturbance, that compensation should be reduced by the amount of compensation that has been paid to QPN. RMS submitted that if it succeeds on the appeal, it will be liable at most to pay to Allandale the amount of approximately $505,746. There appears to be no reason why that amount, at the least, should not be paid immediately.
On 21 May 2015, RMS filed a notice of motion seeking a stay pending the outcome of the appeal of the orders of Pain J requiring the payment of compensation to Allandale pending the outcome of the appeal. The Court's jurisdiction to order a stay was not in dispute: see the Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 51.44(1). However, Allandale opposes the application on the basis that the RMS has not established a case for a stay.
The principles governing the Court's discretion to order a stay are not in dispute: see Alexander v Cambridge Credit Corp Ltd (1985) 2 NSWLR 685 at 694-695; Woolworths v Strong (No 2) [2011] NSWCA 72; 80 NSWLR 445 at [68]. In particular, the Court must be satisfied that there is a risk that the respondent will be unable to repay the money without difficulty or delay if the appeal were to succeed, or that there is a risk that, pending the appeal, the respondent will dispose of its assets. In addition, the applicant for the stay needs to establish an arguable case on the appeal and to determine where the balance of convenience lies and whether it is in the interests of justice to grant a stay. I propose to proceed on the basis that there is an arguable case on the appeal.
The principal issue on the application is whether there was a risk that Allandale would dispose of its assets pending the appeal. There was also the associated issue that Allandale would not be able to repay the monies without difficulty or delay if RMS was successful on the appeal.
Following the resumption, Allandale retained land with an area of 576 ha. That land is subject in part to a lease to QPM, determinable on one month's notice. The land was valued for the purposes of the resumption proceedings at $5,000 per hectare. RMS submitted that there was no evidence that the retained land will have sufficient value to enable the repayment of the compensation should it be successful on the appeal. However, RMS, as the applicant for the stay, bore the evidentiary as well as the legal onus of establishing its entitlement to a stay. It adduced no evidence that the value of the land was less than had been established in the resumption hearing.
RMS did, however, rely upon the primary judge's finding, at [55] of the principal judgment that rehabilitation costs of at least $2,000,000 would be required for the quarry. In response to that submission, Allandale pointed out that, as the primary judge found, those costs would be met progressively over the course of the quarrying operation.
According to its financial reports for the 2014 financial year, Allandale also has cash of $1,574,566, representing in significant part the amount of compensation paid to it in 2010. It also received royalties in that financial year of just in excess of $400,000. It is apparent therefore that it is in a sound financial position.
RMS adduced evidence of Rodney Ferrier to the effect that there were various ways in which Allandale might dissipate its assets. This of course states the obvious. There was no evidence that, since its receipt of the advance compensation payment in 2010, it has dissipated assets, paid significant dividends or otherwise dealt with its cash assets in a way that would diminish its cash position in any way. Nor was there any other history of it having done so.
RMS submitted that Allandale's cash flow is reliant upon the payment of royalties by QPN, but that those arrangements were amenable to change. The basis of this submission was that QPN was an associated entity of Allandale so that the mutual "controlling minds" of the companies could take action as and when considered fit in a way that could negatively affect Allandale's cash position. There was no evidence to suggest that this was likely. It was merely an assertion of what was hypothetically feasible.
I do not consider that RMS has established that there is a risk that Allandale will not be able to repay the compensation monies should RMS be successful on the appeal, or that there is a risk that it will dissipate its assets. There is a question however as to whether the balance of convenience and the interests of justice are such that a stay should nevertheless be granted.
The considerations relevant to the balance of convenience and the interests of justice point in both directions. First and foremost is the consideration that Allandale is entitled to "the fruits of its victory" such that the compensation ought to be paid. I reiterate that some $500,000 ought to be paid immediately in any event, being the amount that RMS concedes would be payable if it succeeds on its appeal. Secondly, there is a statutory recovery process available to RMS to enable recovery should the monies now be paid but RMS is successful on the appeal: see s 48(5) of the Act.
Against that is the consideration that interest is payable on the amount outstanding at the Treasury rate, which RMS contends is higher than the rate otherwise available for term deposits over $50,000. However, even if that is accepted, the submission is predicated on the funds being invested in a bank term deposit. Allandale would not be so limited in its use of the funds if the application for a stay was refused and the monies paid over.
There is the further consideration that the Court has been able to allocate relatively early hearing date to the matter of 30 September and 1 October 2015. Earlier dates were available, but the hearing dates have been allocated to suit the convenience of counsel, particularly counsel for RMS. However, there will be further delay whilst the Court hearing the matter considers its judgment.
Allandale also contended that RMS had delayed in bringing its application for a stay. I do not accept that submission. I consider that the period in which to consider the delay is relative to the time in which the appeal was required to be brought, namely, 24 June 2015. The appeal was in fact filed on 18 May 2015 and the notice of motion for a stay was filed on 21 May 2015. There had also been an earlier application for a stay made to the primary judge.
On balance, I have come to the decision that the stay should be refused. As I have stated, RMS has failed to establish that there is a risk of dissipation of assets or that Allandale will be able to repay the monies without difficulty or delay. Whilst land is not a liquid asset as such, there was no evidence that it was not saleable. The land was resumed in 2010. There is realistically another 5-6 months before the appeal is determined. In circumstances where the balance of convenience and interests of justice do not fall in favour of one party as opposed to the other, and where RMS has failed to establish that there are risks of dissipation of assets or difficulty in recovering the monies, I consider that the primary principle that the successful party is entitled to the fruits of its victory should prevail.
Accordingly, I make the following orders:
Notice of motion dismissed;
The applicant to pay the respondent's costs of the notice of motion.

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