Tahmoor Coal Pty Ltd v Visser

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

1. THE COURT: The first and second respondents, Jan and Yvonne Visser ("the claimants") own a property near Picton, south-west of Sydney. They suffered subsidence as a result of a coal mining operation undertaken by the applicant, Tahmoor Coal Pty Ltd ("the company"). On 20 July 2018 they made a claim to Subsidence Advisory NSW under s 11 of the Coal Mine Subsidence Compensation Act 2017 (NSW) ("Compensation Act"). The claim was investigated by the company and, on 9 April 2020, the company sent to the claimants a letter setting out its determination. The amount of the proposed payment was not accepted by the claimants. On 8 May 2020 they sought a review by the Secretary, Department of Customer Service. On 15 February 2021, a delegate of the Secretary determined that the claimants were entitled to $402,000 by way of compensation.
2. Being dissatisfied with the amount of the determination, on 13 May 2021, the claimants commenced proceedings in the Land and Environment Court. They identified the "Department of Customer Service" as the respondent. They did not join the company as a respondent. The company was, however, notified by the Department of the commencement of the proceedings. By notice of motion filed on 5 July 2021, it sought to be joined as a respondent to the claimants' proceeding. On 25 August 2021 Pain J dismissed the company's application. [1]
3. The company seeks leave to appeal from that interlocutory order. It is the entity responsible for paying the compensation. The application for leave to appeal was supported by the respondent Department and opposed by the claimants. For reasons set out below, there should be a grant of leave to appeal and the appeal should be upheld.

Naming of respondent

1. As noted above, the respondent in the proceedings in the Land and Environment Court was identified as "Department of Customer Service". Unless a statute otherwise provides, a department of a government is not a legal entity which can be a party to proceedings. The Compensation Act does not provide otherwise.
2. Where a claim is made in relation to "an active coal mine", the Chief Executive of Subsidence Advisory NSW is to forward the claim to the proprietor of the coal mine: Compensation Act, s 12(1)(a). The proprietor is to determine the claim for compensation in accordance with the Compensation Act: s 12(7). Where a claim is disallowed in part or in whole, the claimant may request the Secretary of the Department to review the decision: s 15(1). Either the proprietor or the person claiming compensation may appeal from a decision of the Secretary to the Land and Environment Court: s 16(2).
3. The decision-maker, as might be expected, is not identified as the Department, but an individual, namely the Secretary of the Department. The Secretary should have been joined as a respondent in the Land and Environment Court. The Secretary should also have been joined as a party to the application for leave to appeal. It will be sufficient to rectify the record (no issue having been raised by the "Department") by directing the company to file its draft notice of appeal amended to identify the Secretary as the third respondent.

Leave to appeal

1. The claimants opposed the grant of leave to appeal on the bases that (i) the judgment below was not affected by sufficient doubt to warrant its reconsideration, (ii) there was no issue of principle to be determined, (iii) it was not sufficient to demonstrate that the judge was arguably wrong, and (iv) the amount in dispute may be small.
2. With respect to (i) and (iii), there can be no doubt that the company's contention that the primary judge was wrong to refuse to join it as a party was more than arguable. For the reasons set out below, the company's contention was clearly correct.
3. With respect to (ii), the matter was appropriate to be dealt with on an interlocutory basis. The fact that the person required to pay the compensation was not a party to the proceeding would mean that it was not bound by the judgment. Although the company sought, in the alternative to joinder, that it might be allowed to "participate" in the appeal, whether that would provide the relevant level of procedural fairness was a matter which could not be determined in advance. The company noted that the matter might be settled in a conciliation conference which, as a "participant" and not a party, it would not be entitled to attend. (The request to be allowed to "participate" was not pursued on the hearing of the motion.) The company would still not, unless a statute provided otherwise, be bound by the judgment. In a practical sense, the judgment might be unenforceable by the claimants. That would constitute a substantial injustice to all parties.
4. Further, there is clearly an issue of general public importance in identifying the proper parties to such proceedings in the Land and Environment Court.
5. As to (iv), presumably the proposed increase in compensation is not small, or it would not warrant court proceedings. The claimants best know the amount of the claim and have not shown it is "small".
6. Accordingly, the claimants' submissions in opposition must be rejected: there should be a grant of leave to appeal.

Proper parties to the appeal

1. While it is undoubtedly true that a statute conferring jurisdiction on the Land and Environment Court may regulate the manner of the exercise of that jurisdiction, generally the conduct of matters and the management of proceedings will be governed by the Land and Environment Court Act 1979 (NSW) ("the Court Act"), the Civil Procedure Act 2005 (NSW) and the rules made under that Act, namely the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). The jurisdiction of the Court to hear appeals under s 16 of the Compensation Act is referred to in s 19(f1) of the Court Act and forms part of the Court's "Class 3" jurisdiction. The Court Act makes provision in various ways for the conduct of litigation in particular classes, including s 38 (Procedure) and s 39 (Powers of Court on appeals). These do not address the present issue.
2. It is therefore necessary to turn to the general provisions governing civil procedure in this State.
3. Except to the extent that it makes provision for the UCPR (in Pt 2, Div 1) there is nothing in the Civil Procedure Act which is of direct relevance. Schedule 1 to the UCPR sets out the application of the relevant provisions of the Act and Rules, and identifies excluded provisions. The whole of the Civil Procedure Act applies to the Class 3 jurisdiction of the Land and Environment Court, as do the UCPR, subject to a number of exclusions, none of which relates to parties.
4. It is sufficient, therefore, to turn directly to the rules relied upon by the company in its application for joinder, namely UCPR rr 6.24(1) and 6.27. Rule 6.24(1) provides: 6.24 Court may join party if joinder proper or necessary (1) If the court considers that a person ought to have been joined as a party, or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party. Rule 6.27 provides: 6.27 Joinder on application of third party A person who is not a party may apply to the court to be joined as a party, either as a plaintiff or defendant.
5. The principles applicable to the joinder of parties are well settled, although their application in particular cases may give rise to controversy. They were stated by Leeming JA in Ross v Lane Cove Council: [2] "[51] It is settled law that a person who is directly affected by the orders sought in a proceeding is a necessary party, and that the obligation to join that person rests upon the plaintiff or applicant or person applying for those orders. [52] In the Superleague case (News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410) at 524-526, the Federal Court (Lockhart, von Doussa and Sackville JJ) applied the test stated by Lord Diplock delivering the advice of the Judicial Committee of the Privy Council in Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52 criticising the dichotomy between 'legal' and 'commercial' interests. His Lordship said at 56: 'A better way of expressing the test is: will [a non-party's] rights against or liabilities to any party to the action in respect of the subject matter of the action be directly affected by any order which may be made in the action?' [53] That test has very regularly been followed. Most recently, in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 at [131], a unanimous High Court said: '[131] Walker Corporation submitted that where a court is invited to make, or proposes to make, orders directly affecting the rights or liabilities of a non-party, the non-party is a necessary party and ought to be joined. That submission is correct.' (Citations omitted) [54] Sometimes it is said, as it was said in the present appeal, that merely giving notice to the person affected by the order is sufficient. It will be necessary to return to this in more detail below, but it should be recognised immediately that joinder, not notice, is the default position. In the Superleague case, their Honours said at 526: 'In our opinion, the notice given to the players before trial does not, and could not, extend the jurisdiction of the Court to make orders which offend the test stated in Pegang Mining. Absent an application for joinder by a defendant, or by a third party who claims to be directly affected by the proposed orders, it is for the party prosecuting the proceedings to choose who are the necessary parties to enable the Court to make the orders sought. Generally speaking, to permit [the party prosecuting the proceedings] to transfer to others who might be affected by the outcome of the proceedings the responsibility of deciding whether or not they should apply to be joined could be productive of uncertainty and inconvenience. At times, it could lead to the need to halt expensive litigation part-way through, because a third party insufficiently understood the proceedings, or, through impecuniosity or some other reason, was not adequately advised.' (Emphasis added) [55] In John Alexander's Clubs the last two sentences of that passage were reproduced, and endorsed by the High Court in these terms at [140]: '[140] … News Ltd v Australian Rugby Football League Ltd was a case where players who had not been joined in the proceedings but only informed of them were not debarred from attacking the orders made. There is no doubt that Walker Corporation was aware of the first proceedings, and it informed the Court of Appeal of that fact. Walker Corporation said there was a reasonable explanation for its delay in seeking to be joined. Whether or not that is so, it had no duty to seek to be joined, and its delay does not in this case call for explanation.' [56] … [57] … The joinder of a party directly affected by an order is not, at least not ordinarily, a matter of discretion: it is a matter of obligation upon the party seeking the order. That is why the High Court referred to the position of the non-party Walker Corporation in John Alexander's Clubs at [153] as depending on 'matters of right affecting non-parties which rest on general law principles of natural justice'. [58] For that proposition, the High Court cited State of Victoria v Sutton [1998] HCA 56; (1998) 195 CLR 291 at [77], where McHugh J said: '[77] The rules of natural justice require that, before a court makes an order that may affect the rights or interests of a person, that person should be given an opportunity to contest the making of that order. Because that is so, it is the invariable practice of the courts to require such a person to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order.' (Footnote omitted)"
6. The omitted footnote from State of Victoria v Sutton (footnote (77)) stated that "[t]his rule is derived both from the common law and by implication through the power of courts to join parties who are necessary and proper for hearing", citing the predecessor to the rules invoked in this case.
7. The claimants sought to distinguish Ross on the basis of its particular circumstances. In so far as the outcome is concerned, that may well be correct; the principles stated above are, however, self-evidently, principles of general application. They were binding on the primary judge; they are binding on this Court.
8. The nature of the applicant's interest in this case is not equivocal or uncertain. The purpose of the proceedings in the Land and Environment Court is to obtain a larger amount of compensation for the claimants. That is, a larger amount than that determined by the Secretary on review, for which the company accepts liability. Presumably the proposed increase is not small, or it would not warrant court proceedings. In any event the proceedings put the company in jeopardy of an increased legal liability. In the Class 3 application the claimants sought to have the determination of the Secretary set aside and, in lieu thereof, "an amount of compensation payable to the applicants to be determined by the Court." The form of the order does not, and need not, reflect the fact that the compensation is payable by the company, by virtue of the Compensation Act. Section 8 of the Compensation Act provides that "[c]ompensation under this Act is to be paid … by the proprietor of the coal mine that caused the subsidence", in the case of an active coal mine. That is the company. Thus, the judgment of the Court can create a new legal liability on the part of the company. Failure to make the payment is an offence: s 15(6). Pursuant to s 39(5) of the Court Act, the decision of the Court is deemed to be the final decision of the Secretary. It follows that the company was a necessary party and ought to be have been joined.

Reasoning of primary judge

1. As the applicant noted in its two grounds of appeal, the reasoning set out above is inconsistent with the reasoning of the primary judge.
2. The primary judge started with two passages involving statements of principle. The first, which was entirely correct, was as follows: "[28] … The involvement of the mine proprietor is integral to these processes, which result in the proprietor of an active coal mine being directly liable to pay compensation to a claimant, the amount of which is determined by the Secretary under s 15 if not resolved earlier in the statutory process."
3. Secondly, the judge set out the passages from Ross in the judgment of Leeming JA which have been set out above. [3] The judge then stated: "[30] While the extract immediately above is a clear statement of the generally applicable law on joinder, one important observation to make is that Ross, White City and Superleague were not considering statutory compensation schemes, here concerned with compensation for mine subsidence. One would usually expect that the appropriate parties are identified in the relevant legislation establishing the scheme. …"
4. The expectation identified in the last sentence is manifestly inconsistent with the scope and detail to be found in the Civil Procedure Act and the UCPR. The inference that statutory compensation schemes stand apart from the usual run of civil litigation does not withstand inquiry. First, there is nothing in Sch 1 to the UCPR which identifies any such exclusion. Secondly, the most widely litigated statutory scheme for compensation is that found in the Land Acquisition (Just Terms Compensation) Act 1991 (NSW). Part 3, Div 5 of that Act provides for appeals to the Land and Environment Court in relation to such claims: it makes no provision for the proper parties to the proceedings in the Court. Thirdly, the Compensation Act does not need to make such provision with respect to the entity liable to pay compensation: it follows from general law principles, quite apart from the UCPR, that the party liable to make the payment is entitled to be heard in the proceedings and should be bound by the judgment. Those two essential elements are only achieved by making it a party.
5. It follows that the judge's statement at [31] that there is "no provision in the [Compensation Act] to warrant a finding that Tahmoor ought to be joined as a party" cannot be accepted. As the Secretary submitted, there is equally no provision for a claimant to be a party to an appeal by the company; yet the conclusion that a claimant would not be allowed to defend its determination of compensation is patently implausible. The Compensation Act is devoid of procedural provisions relating to court proceedings. It does not expressly confer any powers on the Land and Environment Court: it does not provide for the interlocutory steps undertaken in this case, nor does it identify any final orders the Court may make.
6. Similarly, the statement in Visser at [38] that the "carefully structured statutory compensation scheme … suggests the application of the general joinder provisions in the UCPR are not relevant on the question of who is a necessary party" cannot be accepted. No such exclusion of the statutory effect of the UCPR can be implied in the circumstances of the legislation summarised above.

Costs

1. The company seeks its costs in the event of success in this Court, where costs normally follow the event. The company also seeks its costs of the motion in the Land and Environment Court, where an open discretion applies. [4] The claimants sought to resist an adverse costs order on the basis that this was a "test case" of the kind adverted to in A Goninan & Co Ltd v Gill. [5] However, the circumstances of that case were quite different. The company should not have been put to the expense of seeking to be joined, [6] let alone the costs of an actively opposed application. The claimants' active opposition to the company's motion in the Land and Environment Court raised many, if not all, of the matters relied on by the primary judge.
2. In Visser v Department of Customer Service (No 2) [7] the primary judge made orders that the company pay the claimants' costs of the company's notice of motion and of the costs application. Those orders should be set aside. The claimants should pay the company's costs of the joinder motion in the Court below and its costs in this Court.

Orders

1. The Court makes the following orders: 1. Grant Tahmoor Coal Pty Ltd leave to appeal from the judgments given in the Land and Environment Court on 25 August 2021 and 21 October 2021. 2. Direct that Tahmoor Coal file within 7 days a notice of appeal, in the form of the draft notice of appeal contained in the white folder, but identifying the third respondent as the Secretary, Department of Customer Service. 3. Dispense with the requirements of the rules for service of the notice of appeal. 4. Allow the appeal and set aside orders 1 and 2 made in the Land and Environment Court on 25 August 2021 and orders 1 and 2 made by that Court on 21 October 2021. 5. Order that Tahmoor Coal be joined as a respondent to the proceedings brought by Jan and Yvonne Visser in the Land and Environment Court and that the Class 3 application be amended to reflect the additional party. 6. Order that Jan and Yvonne Visser pay the costs of Tahmoor Coal of and incidental to its application for joinder as a party. 7. Order that Jan and Yvonne Visser pay Tahmoor Coal's costs in this Court. 8. Make no order as to the costs of the Secretary in this Court or the Land and Environment Court. 9. Grant the Vissers a certificate under the Suitors' Fund Act 1951 (NSW).

Endnotes

1. Visser v Department of Customer Service [2021] NSWLEC 88 ("Visser").
2. (2014) 86 NSWLR 34; [2014] NSWCA 50.
3. Visser at [29].
4. Civil Procedure Act, s 98, unfettered by UCPR r 42.1: see UCPR, Sch 1 col 4(excluded provisions).
5. (2001) 51 NSWLR 441; [2001] NSWCA 77 at [60] (Heydon JA).
6. Superleague at 526, set out in Ross at [54]: at [17] above.
7. [2021] NSWLEC 114 (21 October 2021). 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: 11 March 2022