Vilro Pty Ltd v Roads and Traffic Authority of NSW

Civil Procedure Act 2005 ss 56-60 LEGISLATION CITED: Uniform Civil Procedure Rules 2005 r 31.23 and Sch 7 Land and Environment Court Rules 2007 r 3.7(2)

Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175 CASES CITED: Fostoria-Fannon (Aust) Pty Ltd v Minister Administering the Water Management Act 2000 [2010] NSWLEC 121 Richards v Cornford (No 3) [2010] NSWCA 134

APPLICANT Mr R Beasley SOLICITORS Minter Ellison Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr P Tomasetti SC SOLICITORS Blake Dawson

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

30369 of 2009 Vilro Pty Ltd (ACN 000 560 387) (in voluntary liquidation) v Roads and Traffic Authority of NSW

1 HER HONOUR: This was an application by way of notice of motion (filed 28 July 2010) by Vilro Pty Ltd ("Vilro") to vacate the hearing dates in these proceedings (6-17 September 2010) because of the unavailability of its retained town planner, Ms Michelle Hollis, to attend the hearing of the proceedings due to a family business commitment overseas. The matter was listed for hearing with the consent of both parties on 28 May 2010. The application was opposed by the Roads and Traffic Authority of NSW ("the RTA"). 2 On the morning that judgment on the motion was due to be delivered it was withdrawn subject to the issue of costs. Instead, the parties requested that they be permitted to take up the Court's suggestion to permit the allocation of an additional hearing day prior to the proceedings commencing so that the town planning evidence can be heard early in order to accommodate Ms Hollis. 3 This course was a wise one because I would have determined that, irrespective of the challenges created for Vilro, the application to vacate should be refused. The reason for this is that from mid June 2010 it was known to Vilro that there was a very real risk that Ms Hollis would not be attending the hearing, however, rather than take timely steps to find an alternate town planner, Vilro was content to simply apply for a vacation of the hearing dates. Had the necessary steps been taken, while additional costs would nevertheless have been incurred by Vilro these costs would have in all likelihood been minimised and there would have been no necessity to make the vacation application.

Evidence and Submissions 4 In making the application Vilro relied upon two affidavits of Mr Luke Walker sworn 28 July and 2 August 2010 respectively. Mr Walker is a solicitor employed by Minter Ellison, who act for Vilro. In his first affidavit, Mr Walker deposed that Vilro is a landholding company which, amongst other things, owns land within the Port Macquarie-Hastings local government area. Ms Hollis has been the town planning consultant for Vilro in relation to all lands owned by it in that area since 1997. The land the subject of these compulsory acquisition proceedings is located in that area.

5 Ms Hollis has authored a town planning report in these proceedings. She has visited the site at least once. The town planning experts have conferred and a joint report has been written. Conferences have taken place between Ms Hollis and senior and junior counsel for Vilro. Prior to the hearing dates being set, Ms Hollis had confirmed to Mr Walker that she was available in September 2010 for a hearing.

6 Mr Walker stated that on 3 June 2010, Ms Hollis telephoned him and told him that she was being pressured to go to the United States on business (Ms Hollis has two family businesses: a specialist custom made car and parts import business and a transport and landscape supply business). In particular, Ms Hollis was required to meet a car supplier at an expo on 12 September 2010. Mr Walker correctly communicated to her that he was "sorry once a hearing date is set down it is very hard to vacate the dates." 7 Notwithstanding this communication, on 15 June 2010 Ms Hollis telephoned Mr Walker and indicated to him that she was not sure she could attend any hearing in September. The reason given was that the family businesses were suffering and that she was required to attend the expo overseas to "save" them. Again Mr Walker properly emphasised the seriousness of the situation to Ms Hollis. In response, Ms Hollis said that she would call him next week. She did not. Meanwhile Mr Walker contacted Ms Guk Li, a solicitor with Blake Dawson, acting for the RTA, and explained the situation to her and foreshadowed a possible vacation of the hearing dates.

8 On 28 June 2010, Mr Walker telephoned Ms Hollis and asked what her "intentions" were. She was equivocal. Another telephone conversation to similar effect took place between Mr Walker and Ms Hollis on 1 July 2010. While Ms Hollis did not state that she would not be attending the hearing, she did say "I feel bad about this hearing but ultimately I have to put my family first".

9 More prevarication prevailed and time was wasted while it was debated whether or not Ms Hollis could fly out of Australia after the hearing had commenced, assuming that her evidence was given first, to join her husband in time for the critical meeting. This continued until 14 July 2010, when Ms Hollis finally told Mr Walker that she would not attend the hearing and that flights had already been booked by her husband for her departure on 26 August 2010, returning on 29 September 2010. The flights had been booked because they "are the cheapest and best flights for travelling with kids. We are going to meet the dealer in LA in early September".

10 Mr Walker's second affidavit deposed that: (a) Ms Hollis' involvement in the proceedings has been substantial and that she had worked on the report since April 2009;

(b) she was the only qualified town planner in the company employing her; and

(c) on 2 August 2010 he had attempted to engage other town planners based in Port Macquarie but to no avail.

11 Critically what Mr Walker's affidavits did not disclose was: (a) why it took until 2 August 2010 - and only after the service of Mr Steele's affidavit - for Vilro to attempt to engage an alternate town planner;

(b) why it was that only alternate town planners in Port Macquarie were contacted? For example, Mr Harvey Sanders, the town planner engaged by the RTA, is based in Sydney;

(c) why, in addition to her husband, was it necessary for Ms Hollis to travel to the United States to meet with the supplier;

(d) precisely when was the meeting with the supplier? That is to say, was it on 12 September 2010 as was initially indicated by Ms Hollis, or in "early September" as she later told Mr Walker;

(e) why no subpoena had been issued compelling Ms Hollis' attendance at the hearing;

(f) why Ms Hollis was unavailable to give evidence for the entirety of the two week hearing? That is to say, what steps, if any, had been taken to attempt to resolve Ms Hollis' unavailability? In this regard, the parties conceded that there was no impediment to the town planning evidence being heard either before or after the valuation evidence; (g) further to the concession referred to above, why did the entirety of the two week hearing have to be vacated when all of the other witnesses were available at this time? That is to say, why could the hearing not be adjourned part-heard until such time as the town planning evidence could be heard;

(h) why, as Mr Walker had identified, given the seriousness of an application to vacate hearing dates that have been consented to by parties, was the initiative not seized by Vilro's solicitors, in light of Ms Hollis' prevarication and manifest distress (no doubt due largely to the longstanding relationship between herself and Vilro), earlier, or at all, to terminate Ms Hollis' engagement so that a new town planner could be retained; and

(i) what was the estimated quantum of costs that would be thrown away if a new town planner was sought to be engaged by Vilro. 12 The RTA relied on an affidavit of Mr Marcus Steele affirmed 30 July 2010. Mr Steele is a solicitor with Blake Dawson. He stated that the RTA have engaged Mr Harvey Sanders to provide town planning evidence on its behalf in these proceedings.

13 Mr Steele further deposed that it was Mr Sanders' opinion as at 29 July 2010, that a new town planner could be briefed and evidence prepared, including a joint report, in time for the commencement of the hearing.

14 This is so because despite the fact that the variance in quantum of the compensation claimed to be payable is substantial due to the differences in the town planning evidence (on the one hand Vilro claims it is entitled to $8,725,400 in compensation; on the other, the RTA claims that Vilro's entitlement amounts to nil), at its core the scope of the dispute between the town planners is relatively narrow in compass. That is to say, whether the resumed land would have been zoned residential or whether it would have continued to be zoned rural, in which case Vilro was entitled to no compensation because the proposal for which the resumed land was acquired had the effect of increasing the value of Vilro's original holding excluding the resumed land.

15 Vilro had submitted that there could be no actual prejudice to the RTA in vacating the hearing dates given that the land had been acquired by the RTA on 30 January 2009 and in light of the fact that the RTA had contemplated acquisition of the land since the early 1980s.

16 This was frankly and properly conceded by the RTA to be correct. Rather, the RTA submitted that the prejudice that it would suffer would be the inefficient disposal of the proceedings and the administrative cost of having to reorganise their witnesses and legal representatives for a hearing that would not take place until 2011 were the vacation granted. This result, the RTA submitted, would be neither "quick" nor "cheap".

17 By contrast, Vilro submitted that the prejudice to it would be substantial given that Ms Hollis was an important witness in the proceedings; given that no alternate planner was likely to be engaged in time for the hearing; given that because the valuation evidence depended in part on the town planning evidence, even assuming an alternate town planner could be found, if that town planner departed from the opinions expressed by Ms Hollis further valuation evidence would need to be obtained, including a further joint report; and given that the costs of engaging an alternate town planner and of having to provide further town planning and possible valuation evidence would likely be considerable.

18 However, the RTA submitted that when an analysis was made of Ms Hollis' expert report much of it comprised uncontroversial background material and that which remained was neither complex nor technical and accordingly would not, as Mr Sanders had opined, take another town planner a lengthy period in which to provide a report.

19 While Vilro offered to pay the RTA's costs thrown away as a result of vacating the hearing, this offer was only made at the hearing of the motion and only after the Court enquired as to Vilro's willingness to do so. It was not volunteered by Vilro.

20 It is now trite law that in making procedural directions for the management of proceedings, including orders to vacate hearing dates or an order of the type now sought by the parties, such directions must be directed to attaining the overriding purpose of facilitating the "just, quick and cheap resolution of the real issues in the proceedings" (s 56 of the Civil Procedure Act 2005 ("CPA")). This includes both 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 at a cost affordable to the respective parties (s 57 of the CPA). In short, regard must be had to the dictates of justice (s 58 of the CPA). 21 Some of the relevant factors that form part of the consideration of the dictates of justice set out in s 58 of the CPA include the degree of expedition with which the parties have approached the proceedings, including any interlocutory application, and the degree of injustice that would be suffered by the respective parties as a consequence of a granting or refusing the application to vacate. 22 Sections 59 and 60 of the CPA deal with the object of eliminating delay and the proportionality of costs in the implementation of the practice and procedure of the Court relative to the importance and complexity of the subject-matter in dispute. 23 That the Court should consider not only the prejudice to Vilro and the RTA, but also to the impact on the Court's resources and the proper management of the Court's lists is now beyond doubt. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 (at [5]) French CJ stated: [5] In the proper exercise of the primary judge's discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. … 24 More recently in Richards v Cornford (No 3) [2010] NSWCA 134 (at [98]-[100], [104] and [106]-[107]), albeit in the context of an application for an extension of time to file and serve a cross appeal but nonetheless apposite, Allsop P stated: 98 The statutory framework for the exercise of the power and discretion to extend or not to extend time as sought in the motion is constituted by the CP Act, ss 56-60.

99 The importance of these provisions has been stressed by this Court. See for example Dennis v Australian Broadcasting Corporation [2008] NSWCA 37; Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160]-[161]; Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230; Halpin v Lumley General Insurance Ltd [2009] NSWCA 372; and Bi v Mourad [2010] NSWCA 17.

100 Section 56 is central, and vital, to understanding how litigation is to be conducted in this State. It provides for an overriding purpose in s 56(1) as follows: "(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." … 104 The duty upon the client can be seen to be one of imperfect obligation, but it is nevertheless real. The capacity, by s 56(5), to take breach of the duties in s 56(3) and (4) into account in the making of a costs order, does not prevent a breach of the duty in s 56(3) or (4) being taken into account in the exercise of other powers by the Court, indeed s 58(2)(a) requires that to be done and s 58(2)(b)(iv) expressly permits it to be done.

… 106 As I sought to make clear in Hans Pet and Bi v Mourad , the question of efficiency is not the imposition of mere managerial standards. Rather, the timely disposition of litigation is central to the provision of justice in the individual case, and generally. I repeat what I said in Bi v Mourad at [47]: "Delay is a feature of litigation intended to be eliminated as far as possible by the statutory enactment of the regime in the Civil Procedure Act . It cannot always be done. This purpose is not through some parliamentary authoritarian or over-prescriptive view of how people should lead their lives; rather, it is through the keen recognition of the conduct of the courts, in particular in the 20th century, of the need to deal with cases expeditiously if they are to be dealt with justly. Delay and case backlog are not merely factors affecting the costs of delivering justice; they corrode the ability of the courts to provide individual justice. The reforms that have taken place under the Civil Procedure Act and the evident attempt by courts to ensure efficiency can be seen not merely to reflect worthy efforts for efficiency but also to be steps vital for the provision of timely individual justice. Views may differ of justice in any particular case; that is the nature of the term and the value-laden task of a decision-maker to do justice." 107 The considerations in s 57(1)(a)-(d) are inextricably related. Together with s 56(2), s 57(2) requires this Court to apply rules of court as best to ensure the attainment of the objects in s 57(1). Those objects include, of course, the "just determination of the proceedings": s 57(1)(a). There can be no doubt, however, that that means "just" for both parties: Aon at [94]. 25 It is irrefutable that had the application to vacate the hearing dates been refused prejudice would have flowed to Vilro, particularly in terms of additional costs expenditure and costs thrown away. 26 But, in my opinion, the evidence did not disclose that Vilro could not absorb these costs. And more importantly, the evidence did not disclose that irreparable or even severe harm would have, at this stage, been visited upon Vilro by the making of such an order (cf Fostoria-Fannon (Aust) Pty Ltd v Minister Administering the Water Management Act 2000 [2010] NSWLEC 121 at [16] per Preston CJ). While no alternative town planner could be located in Port Macquarie, there was no evidence of the unavailability of any Sydney based town planner and no explanation was provided to the Court as to why only a town planner located in Port Macquarie had to be used by Vilro. 27 Until the evidence of Mr Steele was served, extraordinarily, no efforts whatsoever had been made by Vilro to engage another town planner. While an exhaustive search is not required to satisfy the Court that an alternative expert cannot be retained, Vilro's efforts in this regard were highly unsatisfactory. 28 This is particularly so when, as referred to above, a preliminary examination and assessment of Ms Hollis' report revealed that the matters about which she expressed an opinion were, as the RTA submitted, relatively straightforward. While care must be taken by a Court in an application such as this not to overly scrutinise material which has not yet been admitted into evidence or tested or measured in any way, a preliminary analysis of Ms Hollis' and Mr Sanders' reports nevertheless indicated to me that with five weeks remaining to the hearing date, it ought to have been possible to engage an alternate town planner to prepare another report. Further, while it is correct that Mr Sanders and the valuation experts refer in their evidence to the conclusions arrived at by Ms Hollis, any departure from Ms Hollis' opinion could have been accommodated by brief supplementary evidence from those experts. 29 In addition to the matters raised above at [11], what the evidence does disclose is that Vilro may be criticised for allowing Ms Hollis' equivocation as to whether or not she would attend the hearing to persist for over a month. While her decision not to attend was not caused by Vilro, a decision ought, in my view, to have been made decisively and quickly by Vilro to terminate Ms Hollis' engagement in the proceedings in order to maximise the implementation of a solution that, if possible, avoided a vacation application. 30 While it is undeniable that the prejudice that would have been suffered by the RTA if the hearing dates had been vacated would have been significantly less compared to that of Vilro, I agree that the RTA would nevertheless have suffered some prejudice inasmuch as the litigation would not have been finalised until 2011. 31 It is also true that absent vacation the RTA would have incurred additional costs in having to respond to the evidence of an alternative town planner. However, these are costs that the RTA indicated that it would prefer to absorb rather than face the prospect of a lengthy delay in the finalisation of the proceedings. Justice delayed is justice denied, as the aphorism states. 32 Accordingly, I remained unconvinced, at this stage, that the vacation of the hearing dates would have facilitated the overriding purpose of the just, quick and cheap resolution of the real issue for determination in the proceedings. This is particularly so when alternatives to the complete vacation of the hearing dates were, as the current order sought demonstrates, available and had not been adequately explored in order to preserve at least some portion of the allocated hearing dates. 33 Absent satisfactory evidence of severe prejudice and given what I regard as less than satisfactory conduct by Vilro in its handling of the situation, and the impact that this vacation would have had on the efficient running of the business of the Court, it would have been appropriate that I exercise my discretion to decline to make the vacation order sought. 34 However, for all the reasons discussed above it is entirely appropriate that I order that the matter be set down for an additional day of hearing prior to the originally scheduled commencement of the proceedings in order to hear the town planning evidence. Duty of Expert Witnesses to Attend Hearings 35 Finally, I must make some observations about the conduct of Ms Hollis given her engagement as an expert witness in these proceedings. 36 It is also trite law that an expert witness' paramount duty is to the Court and not to the party engaging that expert (r 31.23 and Sch 7 to the Uniform Civil Procedure Rules 2005). 37 As such, it is expected that when an expert gives a commitment that he or she will be available to attend a hearing at which he or she is to give evidence in respect of a report prepared earlier in the proceedings, this commitment will be honoured save in only the most exceptional circumstances that will generally be beyond the control of the expert. Any failure in this regard breaches not only the expert's duty to the client but, and more importantly, the expert's paramount duty to the Court. 38 However compromised and difficult the circumstances were that Ms Hollis found herself in (and I do not doubt that they have caused her considerable and genuine distress), they were not, in my opinion on the evidence before me, so exceptional and beyond her control that her conduct in not making herself available for the hearing can be justified.

39 The RTA seeks an order that Vilro pay its costs of the motion. Vilro opposes the making of such an order and submits instead that costs be reserved. 40 Rule 3.7(2) (applicable to proceedings such as these in Class 3 of the Court's jurisdiction) of the Land and Environment Court Rules 2007 states as follows: 3.7(2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

41 The RTA submits that for all the reasons discussed above in the judgment it is fair and reasonable in the circumstances to make a costs order in its favour. 42 Vilro submits that it is not because, it informed the Court from the bar table, on 28 June and in early July 2010 attempts were made by it to find a solution of the very type now suggested, namely, that an earlier date be fixed exclusively for the purpose of the hearing of the town planning evidence. A suitable date, however, could not be agreed upon by the parties. 43 The RTA did not dispute that these attempts had been made but, again from the bar table, suggested that the factual situation was not as straightforward as that presented by Vilro. 44 It was also suggested that the RTA had initially consented to the vacation of the hearing dates but that due to Vilro's dilatory conduct in filing the vacation application this consent had either been withdrawn or had lapsed. 45 Presented in this manner the evidence is unsatisfactory. This evidence was given by both parties in this manner because of the failure, in my view, of Vilro to present evidence in affidavit form of attempts by it to resolve Ms Hollis' unavailability other than by way of vacation of the hearing dates. The parties were offered further time to adduce in proper form whatever evidence they wished to rely upon in relation to the question of costs but the offer was declined by them. 46 The evidence before me is too vague and unreliable to permit me to make a proper assessment of the degree to which genuine attempts were made by Vilro to resolve the difficulty created by the subsequent unavailability of its expert witness. Therefore, for the reasons expressed above in this judgment I am of the opinion that it is fair and reasonable in the circumstances to order that Vilro pay the RTA's costs of the motion. Orders 47 The orders of the Court are therefore: (1) the RTA's costs of the motion are to be paid by Vilro;

(2) the matter is set down for an additional day of hearing at 9.30am on 26 August 2010, for the purpose of hearing the expert town planning evidence of Ms Michelle Hollis and Mr Harvey Sanders; and (3) the parties are granted liberty to restore on 48 hours notice.

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