Allandale Blue Metal Pty Limited v Roads and Maritime Services (No 4)

[2014] NSWLEC 102

Land and Environment Court

New South Wales

Medium Neutral Citation:	Allandale Blue Metal Pty Limited v Roads and Maritime Services (No 4) [2014] NSWLEC 102
Hearing dates:	16 July 2014, 21 July 2014
Decision date:	22 July 2014
Before:	Pain J
Decision:	See paragraph 21
Catchwords:	PROCEDURE - application of case management principles to substantially new legal and factual issue raised in defence
Legislation Cited:	Civil Procedure Act 2005 s 57, s 61 Land Acquisition (Just Terms Compensation) Act 1991 s 56
Cases Cited:	Allandale Blue Metal Pty Ltd and Quarry Products (Newcastle) Pty Ltd v Roads and Maritime Services [2011] NSWLEC 242 Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182 Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 Quarry Products (Newcastle) Pty Ltd and Allandale Blue Metal Pty Limited v Roads and Maritime Services (No 3) [2012] NSWLEC 57 Vincent Land Pty Ltd v Hyder Consulting Pty Ltd [2012] NSWLEC 261
Category:	Procedural and other rulings
Parties:	Allandale Blue Metal Pty Limited (Applicant) Roads and Maritime Services (Respondent)
Representation:	Mr R Lancaster SC with Mr M Seymour (Applicant) Mr P Tomasetti SC with Mr N Eastman (Respondent) Sparke Helmore (Applicant) Ashurst (Respondent)
File Number(s):	30853 of 2010

Judgment

1. In these Class 3 proceedings Allandale Blue Metal Pty Ltd (ABM) the Applicant seeks compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (Just Terms Act) for the compulsory acquisition by the Respondent, Roads and Maritime Services (RMS), for part of land owned by ABM. The proceedings were commenced on 21 October 2010. The land is leased to Quarry Products (Newcastle) Pty Limited (QPN) which carries out the operation of the Allandale Quarry, an andesite quarry, on the residue land. QPN also filed proceedings pursuant to the Just Terms Act on 21 October 2010 (30851 of 2010).

1. In Allandale Blue Metal Pty Ltd and Quarry Products (Newcastle) Pty Ltd v Roads and Maritime Services [2011] NSWLEC 242 Biscoe J ordered that a separate question be determined prior to the hearing of the substantive proceedings in both matters. The separate question was whether development consent no 118/679/23 granted by Cessnock City Council on 8 May 1979 for the Allandale Quarry (a) only permits quarrying within the area of the circle labelled "proposed quarrying area" on the Indicative Plan for Quarry Products Pty Ltd development application dated 26 March 1979 or in the alternative (b) is void for uncertainty. In Quarry Products (Newcastle) Pty Ltd and Allandale Blue Metal Pty Limited v Roads and Maritime Services (No 3) [2012] NSWLEC 57 Sheahan J determined that the consent granted by Cessnock City Council on 8 May 1979 permits quarrying only within the area on the "indicative plan" included in the DA dated 26 March 1979, circled and labelled " proposed quarrying area " (question 1(b) was not pressed by the RMS). QPN accepted the amount of compensation in the compensation notice given by RMS dated 27 July 2010 on 24 November 2011. The determination of compensation by the Valuer-General was for QPN's disturbance claim as provided under the Just Terms Act. That claim was based in part on the loss of andesite to its quarrying business. The Court noted the acceptance by QPN of the compensation in the compensation notice dated 27 July 2010 and ordered that the proceedings be dismissed on 22 June 2012.

1. The decisions of Biscoe J and Sheahan J were appealed by ABM to the Court of Appeal which dismissed the appeals (Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103; (2013) 195 LGERA 182 (Allandale CA)).

1. At the outset of the twelve day substantive hearing on Wednesday 16 July 2014 before me, ABM's counsel objected to specified paragraphs in the points of defence served on Friday 11 July 2014 by RMS in response to the amended points of claim (APOC). That defence was provided in accordance with directions made at a pre-trial mention on 4 July 2014 before Craig J. I am ruling on that objection in this judgment. The disputed paragraphs refer inter alia to the breach of condition 7 (that the applicant shall consult with the Soil Conservation Service and prepare and adhere to a plan satisfactory to that service for erosion control and restoration of quarried areas) and condition 8 (requiring the retention of ownership within 1 km of the quarry) and allege in numerous paragraphs that the conduct of the quarry use is in a manner or for a purpose contrary to law. The effect of these paragraphs in the defence is to allege for the first time in the proceedings that the development consent granted in 1979 was not lawfully commenced and therefore lapsed. While the finding sought in the defence reflects the wording of s 56(1)(c) of the Just Terms Act, which refers to any increase in the value of land caused by its use in a manner or for a purpose contrary to law, in the process of making such a finding the Court would effectively be asked to find that all the quarrying work conducted pursuant to the consent granted in 1979 for over thirty years, and which continues, is unlawful.

ABM's submissions

1. The specified paragraphs raise new issues which extend beyond the scope of the evidence filed to date and are prejudicial in part because they require additional evidence to be obtained by ABM if pressed. Two bases are relied on, namely s 61 of the Civil Procedure Act 2005 and the case management principles therein and the principle of estoppel, which is aligned with case management principles. The conduct of RMS previously in the litigation from November 2010 up to 11 July 2014 gave rise to the expectation that the only question of illegality to be raised in relation to s 56(1)(c) of the Just Terms Act was in relation to the work carried out outside the 40 ha circle identified by the Court (Quarry Products (Newcastle) Pty Ltd v Roads and Maritime Services (No 3) [2012] NSWLEC 57) and the Court of Appeal (Allandale CA). RMS should not be allowed to now put a different case. The new case is entirely outside the expert and lay evidence filed and served as can be seen in the solicitor's instructions provided to various experts. These did not include any collateral attack on the development consent. Under the Court's Class 3 Practice Note (Practice Note) the pleadings are intended to reflect the evidence filed. ABM's APOC are consistent with the expert and other evidence prepared.

1. The whole point of the separate question determined by the Court of Appeal was to properly define the scope of the development consent and it is too late for RMS to now traverse an entirely new case. The ground if allowed is a collateral attack on the development consent granted in 1979. If found by the Court not to have been validly commenced the decision will impact on a number of parties who are not before the Court.

1. The issues raised are not just legal in nature but also raise factual matters not addressed in the current evidence filed. Additional evidence that may be required includes evidence about the commencement of the quarry operations because RMS seeks to argue that at no time was there lawful commencement of the quarry in reliance on the 1979 consent. The consent was granted to Mr Myers not QPN. Other relevant witnesses may be representatives of the Soil Conservation Service. Investigation of the ownership of the surrounding land at the time consent was granted will also be necessary given condition 8. There would also be discretionary considerations, as if in Class 4 proceedings, as the Council and the Environment Protection Authority (EPA) have behaved as if the consent was in force. For example, the EPA has issued an environment protection licence for the current quarry operation.

1. ABM had no notice of this new basis until the defence was received on 11 July 2014. If allowed by the Court, ABM requires an adjournment to obtain further evidence about matters of fact, RMS should pay the costs of that adjournment and RMS should indemnify ABM for its costs of the separate question (which the Court of Appeal ordered be paid by ABM).

RMS's submissions

1. This is an application to strike out parts of the defence, which requires a high hurdle to be met per Vincent Land Pty Ltd v Hyder Consulting Pty Ltd [2012] NSWLEC 261 at [14]-[17]. The defence was filed in accordance with the Practice Note and was filed in accordance with the directions made by the Court. ABM only recently amended its claim in the APOC dated 7 July 2014 in a substantial way with the claim increased from $2.7 million to $6.64 million. The valuation method was specified for the first time in the APOC. Also for the first time ABM is claiming loss of the andesite resource in the APOC, that having been the subject of a payment of compensation to the tenant QPN. This raises the issue of whether compensation sought is really double dipping by ABM.

1. It is correct to state that before the Court of Appeal RMS did not assert that the consent had lapsed but ABM does not identify any obligation upon RMS to do so. At that time the issues were unresolved and issues were at large. Mr Rowan, town planner, identified in his evidence that a number of breaches of the consent were occurring.

1. There is no obligation on a party to identify all matters that might be ventilated at the hearing of a separate question. That obligation arises when final pleadings are prepared.

Disputed defence provisions cannot be relied upon

1. Under s 57(1) of the Civil Procedure Act a court must manage proceedings having regard to the just disposal 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 proceedings. Section 57(2) states that the practice and procedure of courts are to be regulated to best ensure attainment of these objects. Section 61 of the Civil Procedure Act provides for the making of directions by a court which it considers necessary for the speedy determination of the real issues between the parties to the proceedings. Under s 61(2) a court may give directions it considers appropriate for the conduct of proceedings. I agree with ABM's submissions and therefore consider that most of the paragraphs of the defence objected to cannot be relied on by RMS. The principle of requiring appropriate case management of matters as provided for in s 57 and s 61 of the Civil Procedure Act to ensure the orderly and fair conduct of these proceedings applies. I accept that most of the disputed paragraphs in the defence identify a fundamentally different legal and factual case which are beyond the issues as understood by ABM in these lengthy proceedings up to 11 July 2014. To address the new issue raised would require additional evidence to be obtained by the Applicant to address factual issues put in contention. That would necessitate an adjournment to enable evidence to be obtained as specified in ABM's submissions.

1. Reliance by RMS on the procedure specified in the Practice Note in Class 3 proceedings does not mean that another party can be effectively ambushed in the manner that has been attempted in this case. That Practice Note assumes, as ABM's counsel submitted, that pleadings will be generally consistent with the evidence filed in a matter and is one of the reasons why such a procedure has been adopted by the Court in matters of this type. Ordinarily under the Practice Note pleadings are to be filed by the pre-trial mention at the very least, and that did not occur in this case for either ABM or RMS. Fundamentally, if a party wishes to identify a case which is legally and factually at odds with the approach taken earlier in proceedings, including in this case in relation to a separate question of law intended to resolve finally as between the parties the scope of the development consent in issue, this must be done much earlier in the proceedings. Sufficient time to enable the other party to understand and respond to the new and different issues raised is essential. This did not happen given the late provision of the defence in this matter.

1. While the defence was provided in accordance with directions made by the Court this appears to have been done without any notice to the Court or ABM of the intention to amend the defence so fundamentally. Had there been an indication by RMS at the pre-trial mention of this matter on 4 July 2014 it is highly likely that different directions would have been made. Given the fundamental nature of the attack on the development consent for the quarry that would also arguably not have been sufficient notice in any event.

1. RMS's submission that it is not incumbent on a party to identify its final case until it pleads must be weighed up by a party and its legal representatives in the context of particular proceedings and whether the approach of one party is fair in all the circumstances to another party. That obligation applies to a party and its legal representatives over and above any requirement to comply with a practice note issued by the Court.

1. Were RMS to be permitted to rely on the disputed parts of the defence the determination of the separate question which it earlier pursued, which is now the subject of a first instance decision in this Court and the Court of Appeal, would be rendered nugatory. While the strict law of estoppel as found in Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 does not necessarily apply, I consider there is a practical estoppel applying to RMS based on its conduct of the proceedings up to 11 July 2014. As ABM submitted the new defence also appears to be materially different from the position of RMS identified by Ward JA in Allandale CA at [133].

1. It also troubles me that in a statutory appeal to the Court for compensation following the compulsory acquisition of land by a government department, a collateral attack is attempted to be made very late in the proceedings by the acquiring authority in relation to a development consent that has stood for over thirty years and continues to be relied upon today. Had I been minded to allow the disputed paragraphs of the defence I would have made the orders sought by ABM in relation to the costs of any adjournment and the costs of the Court of Appeal proceedings being paid by RMS.

1. RMS's submissions addressed the contention it wishes to make that ABM's claim is a "double dip" given the payment of compensation already received by QPN based in part on the loss of andesite as a result of the acquisition. That argument will still be maintainable in the absence of the disputed parts of the defence. The disputed parts of the defence are not a response to the amended ABM claim which now incorporates a claim based on the loss of the andesite resource as part of the calculation of market value.

1. RMS's submission that the Court must take on board the new issue raised in the defence for the first time because of s 56(1)(c) of the Just Terms Act does not override the importance of ensuring an orderly and fair hearing. Section 56(1)(c) can still be the subject of the RMS case on the basis of breaches of the development consent that were understood by both parties up until 11 July 2014.

1. The characterisation by RMS of the application as a strike out of parts of the defence does not accurately reflect the nature of the application.

1. I therefore find that the RMS cannot rely on par 3(c)(ii) second and third bullet point, par 7(c) "and operation in breach of conditions 7 and 8 of the Consent"; par 7(d)(iii) "and operation in breach of conditions 7 and 8", par 8(c)(iv)(2), par 9(a)(ii), par 10(b), par 10(c), par 11(a), par 12(a), par 12(d)(i) and (ii), par 17(a), par 17(f) "and in breach of conditions 7 and 8 of the Consent", par 17(g)(i)-(iii) and par 18(a)(i) of its defence dated 11 July 2014. Paragraph 13 to the extent it relies on parts of par 8(c), par 9(a), par 10(b), par 11 and par 12 cannot be relied on. To the extent paragraphs 19, 21(a) and 22(a) rely on par 18 these must be read as not relying on par 18(a)(i). Further par 8(c)(i) and (ii) are confined to the use of land outside the circle.

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Decision last updated: 01 August 2014