The Eddie Arnott Corporation Pty Ltd v Sydney Metro

Land and Environment Court (NSW)|2025-03-03|Before: Pritchard J

JUDGMENT

These Class 3 proceedings commenced for hearing for four days on Monday, 3 March 2025 (the substantive hearing).
On Friday, 28 February 2025 at 10:28am, the applicant, The Eddie Arnott Corporation Pty Ltd (the applicant), and the second respondent, Dr Imad Arnaout (the second respondent), filed and served a notice of motion seeking to vacate the Class 3 proceedings set down to commence on Monday, 3 March 2025 (the notice of motion to vacate). The notice of motion to vacate was accompanied by an affidavit of Dr Imad Arnaout dated 28 February 2025 (Dr Arnaout's 28 February 2025 affidavit).
The notice of motion provided as follows: The Applicant and the Second Respondent respectfully request 1. That the 4-day hearing listed to commence on 3 March 2025 be. 2. That the First Respondent provide an extension of time for the Applicant's and the Second Respondent's to: a. Respond to the two Notices to Produce [filed and served on the applicant and second respondent on 3 February 2025] served upon them, ensuring sufficient preparation time; b. Finalize and file the Court Book, Bundle of Documents, Statement of facts, and other required materials for the 4-day hearing. 3. That the Defendant's application to exclude Dr Arnaout 's recently filed updated affidavit be dismissed, allowing its admission into evidence. 4. That the matter be relisted for hearing. 5.That the First Respondent be ordered to bear the costs and incidental of this application.
The notice of motion to vacate and Dr Arnaout's affidavit dated 28 February 2025 outlined grounds for vacating the hearing, including: 1. the two notices to produce [filed and served on the applicant and second respondent on 3 February 2025] were served "at the last minute" and with "unreasonably short deadlines" which "caused significant disruption, creating extreme time constraints for Dr Arnaout to adequately prepare critical documents."; 2. further issues said to related: 1. negotiations between the parties under s 10A of the Just Terms Act negotiation process, being the minimum period of negotiation for acquisition by agreement of at least 6 months, during which the authority of the State is to make a genuine attempt to acquire the land by agreement before initiation of compulsory acquisitions (the s 10A period); 2. without prejudice communications between the parties in an attempt to settle these proceedings; 3. communications for the purpose of conciliation conferences under s 34 of the Land and Environment Court Act 1979 (NSW) (LEC Act); 4. prejudice caused to case preparation by being required to attend an additional pre-hearing mention; 5. prejudice caused by the complexity of dealing with both the freehold claim and the leasehold claim; and 6. Prejudice to the second respondent's dental business.

Background

By Class 3 application filed on 21 February 2023, the applicant brought proceedings pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (Just Terms Act) objecting to the amount of compensation offered by Sydney Metro (the first respondent) for the acquisition of its freehold interest in land comprising Lot 7 in Strata Plan 65054, known as Shop 1A, 5 Hunter Street, Sydney (the acquired land) (the freehold claim).
On 29 November 2024, the Court made orders pursuant to s 25(2) of the LEC Act joining the second respondent in relation to his claimed leasehold interest in the acquired land (the leasehold claim), and made orders in relation to the pleadings in the freehold claim, amended pleadings in relation to the leasehold claim, and lay evidence and expert evidence sought to be relied upon by the applicant and the second respondent.
On Monday, 17 February 2025, at a pre-hearing mention, various matters were canvassed, including the first respondent's objections to the evidence sought to be relied on by the applicant and/or second respondent. The first respondent requested that the Court make rulings in relation to its objections to that evidence prior to the commencement of the substantive hearing. I subsequently listed the matter again before me for a pre-hearing mention on Tuesday, 25 February 2025.
On Tuesday, 25 February 2025, at the second prehearing mention various further matters were canvassed, including the first respondent's objections to the affidavit of Dr Imad Arnaout filed 18 February 2025, Dr Arnaout's evidence concerning the s 10A period, which evidence the Court did not allow, [1] and the expert witnesses for the applicant and/or the second respondent, David Haskew, town planner, and John Sanidas, valuer, whom Dr Arnaout confirmed would not be called and made available at the hearing for cross-examination.

First respondent's objections to the notice of motion to vacate

In its submissions dated 3 March 2025, the first respondent opposed the vacation of the hearing on the basis that: 1. Dr Arnaout's 28 February 2025 affidavit did not demonstrate sufficient grounds to warrant the vacation of the hearing, including identifying the adjournment sought; 2. the dictates of justice did not weigh in favour of an adjournment; 3. an adjournment would be unlikely to assist in the resolution of the real issues for determination by the Court; 4. it would be contrary to case management principles, including the efficient use of judicial resources and timely disposal of proceedings; and 5. the first respondent would be burdened with incurring additional costs.
In relation to the issues raised on the notice of motion to vacate, the first respondent submitted in particular as follows.

The question of any prejudice caused by the first respondent's notices to produce

Firstly, there was no prejudice caused by the two notices to produce dated 3 February 2025 and, even if there were (which was denied), the applicant and second respondent had not made use of available opportunities to reduce any perceived prejudice. That is: 1. the notices to produce seek documents expressly referred to in Dr Arnaout's 5 August 2024 affidavit (for example, in respect of claims for disturbance, evidence of invoices for legal fees addressed to the applicant or second respondent and their payment). It was reasonably to be expected that such documentary evidence would be readily available to Dr Arnaout; 2. neither the applicant nor second respondent had taken steps available to them to seek to set aside the notices to produce or have them narrowed, a matter is relevant pursuant to s 58(2)(b)(v) of the CP Act which provides that the court may have regard to the following matter to the extent to which it considers it relevant: the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings.
Secondly, there was "no basis" to the allegation that the notices to produce caused the "caused significant disruption, creating extreme time constraints to prepare critical documents" including: court book, evidence book, bundle of documents, opening submissions, statement of facts, objections and reasons. The first respondent accepted that there is a disparity of resources between the self-represented applicant and second respondent, and those of the first respondent. However, the facts of this case were otherwise far removed from those considered in Kelly v Westpac Banking Corporation [2014] NSWCA 348 (Kelly) in which the respondent bank did not serve evidence in accordance with court orders and raised new issues during an adjournment application seven business days before a hearing, including evidence which should have been disclosed by the respondent bank during discovery. In Kelly, McColl JA, Gleeson JA and Sackville AJA held at [42]: It was also relevant, in our view, for the primary judge to take into account the relative position of the parties in preparing the case for the imminent trial. All are equal before the law. Courts cannot prefer the interests of self-represented litigants over those who are legally represented: Reisner v Bratt [2004] NSWCA 22 (at [4]) per Hodgson JA (Ipp JA agreeing); Malouf v Malouf [2006] NSWCA 83 (at [94]) per Mason P (McColl and Bryson JJA agreeing). Nevertheless, that does not mean that in considering the dictates of justice (s 58, CP Act) courts ignore the disparity which can exist between the resources available to a well-funded litigant such as Westpac and a self-represented litigant: see, for example, Serobian v Commonwealth Bank of Australia [2010] NSWCA 181 (at [42]) per Macfarlan JA (Tobias JA and Sackville AJA agreeing).
In particular, the first respondent submitted: 1. Court book - the first respondent had already prepared the court book which it filed and served on 26 February 2025, and with the exception of the written submissions, statement of facts, and chronology of the applicant and second respondent, "it is unclear what further work Dr Arnaout needs to do"; 2. Evidence book - the first respondent had already prepared the evidence book which contained the expert and lay evidence of the applicant and second respondent which was filed and served on 26 February 2025 for the substantive hearing; 3. Tender bundle - the first respondent had already prepared the tender bundle which it filed and served on 20 February 2025 and Dr Arnaout did not identify that any relevant further documents or categories of documents are needed for the tender bundle of the applicant and second respondent; 4. Objections and reasons - the Court already made rulings on objections to evidence in its rulings dated 27 February 2025, and Dr Arnout does not depose to having any objections to the evidence of the first respondent.
The first respondent said that the alleged prejudice claim "ought to be carefully scrutinised, particularly in light of the following surrounding circumstances": 1. Dr Arnaout has been aware since the orders made on 8 October 2024 of the Court's requirements to prepare material such as a bundle of documents and opening submissions for the hearing. 2. The first respondent did not delay in issuing its notices to produce; it did so on 3 February 2025, 10 days after receipt of the evidence filed and served by the second respondent on 24 January 2025. 3. Subsequent to the service of the notices to produce, instead of appearing at Court at the return of the notices to produce and producing documents, Dr Arnaout was able to file and serve his 633 page 18 February 2025 affidavit. 4. The Court would not be satisfied that the applicant and second respondent are fulfilling their duties to assist the Court to further the overriding purpose and, to that effect, to participate in the processes of the Court and to comply with directions and orders under s 56(3) of the CP Act, as demonstrated by the lengthy affidavits and "apparent disregard" of the Court's most recent decision and orders made 25 February 2025.

Any prejudice caused by dealing with the freehold and leasehold claims

In relation to the question of any prejudice caused by dealing with the freehold and leasehold claims, the first respondent submitted that the introduction of the leasehold claim itself has not caused the proceedings to become more complex and thus cause prejudice to the applicant and second respondent. That was submitted to be for the following reasons: 1. While Dr Arnaout was only joined as the second respondent on 29 November 2024, he had been seeking to agitate his leasehold claim since the commencement of the proceedings on 21 February 2023. He contended in his points of claim dated 16 December 2024 that he had a leasehold interest, and the separation of the freehold claim and the leasehold claim by orders made pursuant to s 25(2) of the LEC Act was necessary in determining the proper holder of each claimed interest in land (if any) and the entitlement to compensation. 2. It was Dr Arnaout who caused the delay in having the order for joinder pursuant to s 25(2) of the LEC Act made on 29 November 2024. The first respondent consented to the order being made at the first return of that notice of motion on 25 October 2024.
The first respondent submitted that given that these proceedings were commenced more than two years ago on 21 February 2023, the fact that the applicant and first respondent do not have legal representation is not a sufficient reason to vacate this hearing now. Dr Arnaout has at all times been aware of the importance of obtaining legal assistance, and "made a considered choice to be a self-represented litigant": 1. From time to time, Dr Arnaout received legal advice and representation from time to time from four different law firms (that is, pre-acquisition and during the proceedings), and at the pre-hearing mention on 17 February 2025, asked for more time to obtain legal advice). 2. In his 5 August 2024 affidavit, Dr Arnaout deposed to the fact that he is aware of "the importance of professional expertise, particularly in a highly specialised legal field and complex cases such as those of compulsory acquisition", but did not obtain legal representation and barrister input for the remainder of the Court proceedings because he was "preoccupied" with various matters including "researching compulsory acquisition topics online" and his "good will based cost minimisation approach."

Remaining grounds in the notice of motion to vacate

In relation to the remaining grounds in the notice of motion to vacate, the first respondent submitted that these would be readily dismissed as they fail to support an application for an adjournment, and demonstrate that such relief would have little utility: 1. Any prejudice to Dr Arnaout caused by the requirement to attend an additional prehearing mention was "of his own making", and arose from the filing on 18 February 2025 of a 633 page affidavit, without the leave of the Court or otherwise in accordance with r 35.9 of the UCPR or cl 10 of the Practice Note for Class 3 Applications. 2. The remainder of the grounds (and evidence in support) seek to impermissibly challenge the existing findings and orders of the Court, including those of 29 November 2024 and to the recent decision of The Eddie Arnott Corporation Pty Ltd v Sydney Metro [2025] NSWLEC 12 rejecting the 18 February 2025 affidavit.

Additional factors weighing against the grant of an adjournment

Further, the first respondent submitted that to the extent that Dr Arnaout seeks an adjournment to allow further time for evidence to agitate complaints regarding the period of negotiations between the parties under s 10A of the Just Terms Act, the interests of justice would not be served by an adjournment. This Court has already rejected such evidence, including on the basis that such matters cannot be taken into account pursuant to s10A(7) of the Just Terms Act.
Rather, the issues for determination in these proceedings relate to the amount of compensation payable to the applicant and second respondent (if any) as a consequence of the acquisition of the acquired land.
The first respondent submitted that the Court should consider not only the prejudice to the first respondent, but also to other parties in the Court and also to the Court's resources and the proper management of the Court's lists.
The relevant legal principles are as follows.
The Court's Practice Note Class 3 Compensation Claims dated 10 September 2024 addresses applications to vacate hearings at [63]-[65], and in particular at [64] provides: Compensation Claims usually will not be adjourned because of failure to comply with this practice note or directions or because of lack of preparedness for any attendance before the Court. If failure to comply or lack of preparedness nevertheless does cause the adjournment of proceedings, the defaulting parties or legal practitioners may be ordered to pay costs …;

Legislative framework

Section 56 of the Civil Procedure Act 2005 (NSW) (CP Act) provides in relation to the overriding purpose of the CP Act: 56 Overriding purpose (cf SCR Part 1, rule 3) (1) The overriding purpose of this Act and of rules of court, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (3A) (Repealed) (4) Each of the following persons must not, by their conduct, cause a party to civil proceedings to be put in breach of a duty identified in subsection (3) - (a) any solicitor or barrister representing the party in the proceedings, (b) any person with a relevant interest in the proceedings commenced by the party. (5) The court may take into account any failure to comply with subsection (3) or (4) in exercising a discretion with respect to costs. (6) For the purposes of this section, a person has a relevant interest in civil proceedings if the person - (a) provides financial assistance or other assistance to any party to the proceedings, and (b) exercises any direct or indirect control, or any influence, over the conduct of the proceedings or the conduct of a party in respect of the proceedings. Note - Examples of persons who may have a relevant interest are insurers and persons who fund litigation. (7) (Repealed)
Section 57 of the CP Act provides in relation to the objects of case management: 57 Objects of case management (1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects - (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1).
Section 58 of the CP Act provides as follows in relation to the dictates of justice: 58 Court to follow dictates of justice (1) In deciding - (a) whether to make any order or direction for the management of proceedings, including - (i) any order for the amendment of a document, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court - (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant - (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case.
Section 66 of the CP Act provides in relation to the adjournment of proceedings: 66 Adjournment of proceedings (1) Subject to rules of court, the court may at any time and from time to time, by order, adjourn to a specified day any proceedings before it or any aspect of any such proceedings. (2) If a judicial officer is not available at the time appointed for the hearing of any proceedings, a registrar may adjourn, to a later time on the same day or to a later specified day, any matters listed for hearing by the judicial officer at the appointed time.

Consideration

I am satisfied that the notice of motion brought by the applicant and second respondent to vacate the hearing set down to commence on 3 March 2025 does not demonstrate sufficient grounds to warrant the vacation of the hearing.
In particular, I find that no material prejudice was caused by the notices to produce filed and served on the applicant and second respondent on 3 February 2025 as the notices to produce seek documents expressly referred to in Dr Arnaout's 5 August 2024 affidavit.
I find in accordance s 58(2)(b)(v) of the CP Act that the applicant and second respondent could have made use of the opportunities available to them in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, to set aside or narrow the notices to produce, including at the pre-hearing mentions on 17 February 2025 and 25 February 2025. The applicant has also been aware of the requirement to produce a court book, evidence book, bundle of documents, objections, submissions, statement of facts, chronology, and list of relevant persons since the Court made orders relating to those materials on 8 October 2024. The first respondent, in the circumstances, prepared a court book, evidence book, and tender bundle without any input by the applicant and second respondent.
As extracted above at [16] in Kelly at [42] McColl JA, Gleeson JA and Sackville AJA held that while courts cannot ignore the disparity of resources which can exist between a self-represented applicant and a well-funded litigant, courts "cannot prefer the interests of self-represented litigants over those who are legally represented".
However, it is well established that that does not mean that in considering the dictates of justice under s 58 of the CP Act, courts ignore the disparity which can exist between the resources available to a self-represented litigant and a well-funded litigant or institutions, including Government departments and agencies. It is contended that the party seeking the exercise of a discretion to grant the orders that it seeks bears the onus of persuading the Court that it is appropriate to do so.
I am satisfied that the introduction of the leasehold claim has not resulted in prejudice to the applicant or second respondent as it did not cause the proceedings to become more complex.
Further, any prejudice to Dr Arnaout caused by the requirement to attend an additional pre-hearing mention on 25 February 2025 arose from the filing of the 633 page 18 February 2025 affidavit without leave of the Court or otherwise in accordance with r 35.9 of the UCPR or cl 10 of the Practice Note for Class 3 Applications.
The remainder of the grounds in the notice of motion to vacate, including those in relation to the s 10A period, without prejudice communications between the parties, and communications made for the purpose of conciliation conferences under s 10A of the LEC Act, seek impermissibly to challenge the existing orders and findings of the Court, including orders made by me on 29 November 2024 and in The Eddie Arnott Corporation Pty Ltd v Sydney Metro [2025] NSWLEC 12 on 27 February 2025 in which the Court rejected the 18 February 2025 affidavit.
I am satisfied, pursuant to ss 56 and 57 of the CP Act, that dismissing the notice of motion to vacate will facilitate the just, quick and cheap resolution of the real issues in the proceedings, and the objects of the just determination of the proceedings, the efficient disposal of the business of the court, the efficient use of available judicial and administrative resources, and the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable to the parties. In so doing, I have acted in accordance with the dictates of justice in this case, having had regard to the provisions of ss 56 and 57 of the CP Act and the matters I consider relevant in s 58(2)(b), in particular those in s 58(2)(b)(i), (ii), (iii), (iv), (v) and (vi).

Orders

The Court orders that the notice of motion filed by the applicant and second respondent on 28 February 2025 seeking to vacate the Class 3 proceedings set down to commence on 3 March 2025 is dismissed.

Endnote

The Eddie Arnott Corporation Pty Ltd v Sydney Metro [2025] NSWLEC 12.

Amendments 06 March 2025 - [36] Typographical error corrected. 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: 06 March 2025

Civil Procedure Act 2005(NSW)ss 56, 57, 58(2)(b)(v), 58, 66

Land and Environment Court Act 1979(NSW)ss 25(2), 34, 57(4)(d)

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