Anderson v Commissioner of Highways - [2018] SASC 13

SUPREME COURT OF SOUTH AUSTRALIA
(Land and Valuation Division)
ANDERSON v COMMISSIONER OF HIGHWAYS
[2018] SASC 13
Ruling of The Honourable Justice Parker
16 February 2018
REAL PROPERTY - COMPULSORY ACQUISITION OF LAND - COMPENSATION - ASSESSMENT - GENERALLY
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - DECLARATIONS - REQUIREMENT THAT ALL MATTERS IN CONTROVERSY BE DETERMINED
The applicant referred a “question arising in the course of negotiations” to the Court pursuant to s 23C of the Land Acquisition Act 1969 (SA) (‘Act’). The referred question was whether personal injury of the nature alleged to have been suffered by the applicant is compensable under the Act.
A question arose as to whether it was appropriate to determine the referred question as a preliminary matter or defer its resolution until trial.
Held, per Parker J:
1. The object of s 23C is to facilitate the expeditious and just resolution of disputes concerning the acquisition of land and the payment of compensation. Section 23C should be applied consistently with that object.
2. The requirement in s 23C that the question referred must have arisen in the course of negotiations operates in lieu of various restraints that apply to the grant of declaratory relief in equity.
3. The interests of justice are best served by answering the referred question as a preliminary matter. While an affirmative answer will not resolve the dispute, it will serve to narrow the issues. That outcome is consistent with the object of s 23C.
Land Acquisition Act 1969 (SA) s 22B, 23C, s 25; Land and Valuation Division Rules 2014 (SA) r 3; Supreme Court Civil Rules 2006 (SA) r 210, referred to.
Commissioner of Highways v George Eblen Pty Ltd (1975) 10 SASR 384; Re Lemon Tree Passage & Districts RSL & Citizens Club Cooperative Ltd (1987) 11 ACLC 796; Dean-Willcocks v Soluble Solution Hydroponics (1997) 24 ACSR 79; Re Dallhold Investments Pty Ltd (in liq) (1994) 53 FCR 339; Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC [2008] SASC 369; The Tap Inn Pty Ltd v Matthews [2015] SASCFC 188, discussed.

ANDERSON v COMMISSIONER OF HIGHWAYS
[2018] SASC 13

PARKER J: The applicant has referred “a question arising in the course of negotiations” to the Court under s 23C of the Land Acquisition Act 1969 (SA) (‘the Act’). In substance, the two questions initially referred to the Court were:
1Whether the applicant is a person with an interest in the relevant land within the meaning of s 6 of the Act; and
2Whether a personal injury of the nature suffered by the applicant is compensable as loss arising under s 22B of the Act as qualified by the principles of compensation set out in s 25 of the Act.
The Commissioner of Highways has accepted that the applicant is a person with an interest in the relevant land within the meaning of s 6. That disposes of question one. Thus, the only question before the Court is whether compensation may be payable for a personal injury arising from the acquisition of land in which the applicant has an interest.
A question has arisen as to the operation of s 23C in these circumstances and the most appropriate procedure to be adopted by the Court. Specifically, the issue is whether the Court should determine whether personal injury is compensable under the Act, as a preliminary point, or defer that question until trial. If that question is to be determined as a preliminary point, the Court will need to hear submissions as to whether, in principle, personal injury is compensable under the Act. If personal injury is, in principle, compensable under the Act, the claim for compensation must either be settled or proceed to trial.
Before considering the question raised, it is necessary to state briefly the relevant background.
Background
For many years the parents of the applicant owned a home on Main South Road at Bedford Park (‘the Property’). The Property has been compulsorily acquired by the Commissioner for the purpose of undertaking major road works. Compensation has been paid to the applicant’s parents and they have moved to another home in a nearby suburb.
The applicant is now aged 43 years. From 1980 to 2002 he resided with his parents at the Property and operated home businesses from that address. From 2002 to 2009 the applicant resided elsewhere in Adelaide but still attended at the Property on a daily basis for the purpose of conducting his home businesses. The applicant married in 2007 but separated in November/December 2015. In 2009 the applicant resumed living at the Property with his wife and two children and continued to conduct his business activities at and from the Property. The two businesses conducted by the applicant have been described as a vending machine business and a blind cleaning business.
The applicant contends that during the period from July 2014, being about the time that the Commissioner notified the applicant and his parents of the proposed acquisition, until May 2016 the applicant suffered from an adjustment disorder with post-traumatic stress disorder type symptoms including anxiety, mental stress, forgetfulness, insomnia, depression, feelings of hopelessness and helplessness and suicidal ideations. The applicant further contends that this injury was caused by factors other than the acquisition process being made without his consent or against his will. The latter contention is of particular importance given that s 25(1)(g) of the Act provides that, in determining compensation, no allowance shall be made on account of the fact that the acquisition is effected without the consent, or against the will, of any person.
The applicant lodged an application seeking interlocutory relief under s 23C of the Act by way of determination of the two questions referred to in paragraph [1]. However, as earlier mentioned, only the second question remains in contention. The applicant also seeks final relief by way of an order for compensation in accordance with s 22B and s 25 of the Act.
Section 23C
Section 23C of the Act relevantly provides:
(1)The Authority or a claimant may refer a question arising in the course of negotiations into Court.
(2)On the reference of a matter into the Court, the Court may—
(a)     if of the opinion that the question should be the subject of further negotiation—adjourn the matter to allow further negotiation to take place; or
(b)     make any order necessary to resolve the question.
(3)In particular—
(a)     if there is a dispute about whether the claimant is interested in the subject land, or the nature of the claimant's interest—the Court may, subject to subsection (4), declare whether the claimant has an interest in the subject land and, if so, the nature of the interest; and
(b)     the Court may make orders for compensation that the Court finds to be justified on the claim; and
(c)     the Court may make other orders that may be just in the circumstances of the case.
…
The applicant’s contentions
The applicant relies on the fact that during the period from 2009 to the date the acquisition took effect in October 2015 he, his wife and children had uninterrupted use of the Property and exclusive rights of occupation and possession over a part of the Property. During that period the applicant maintained and improved the Property using his own labour and at his own expense. He also paid or contributed to the maintenance, upkeep and expenses associated with the Property. The applicant contends that, but for the acquisition, it is reasonable to expect that he would have continued to reside at the Property for the foreseeable future.
The applicant notes that s 23C of the Act has not previously been the subject of judicial consideration in this State, nor has the Supreme Court of any State or Territory given detailed consideration to cognate provisions in other jurisdictions.
The applicant contends that the Court has power to resolve, as a matter of principle, whether personal injury is compensable under the Act. The Court should exercise its discretion to resolve that question prior to the matter proceeding to further negotiation or trial. The applicant further submits that the assistance of the Court will contribute to the just, efficient and economic resolution of the issue between the parties in accordance with the intention of s 23C and the object of the Act, that being to provide for the acquisition of land on just terms.
The applicant submits that the facultative nature of s 23C is underscored by the wording used in s 23C(2). That provision empowers the Court, if it considers that a question should be the subject of further negotiation, to adjourn the matter to allow negotiations to take place, or for the Court to make any order necessary to resolve the question. The applicant submits that s 23C(1) and s 23C(3) are together designed to facilitate the resolution of land acquisition and compensation disputes by assisting the parties to overcome impasses in the course of negotiations without being compelled to proceed to a trial on all issues.
The applicant also relies on r 3 of the Land and Valuation Division Rules 2014 (SA). Rule 3 relevantly provides that the objects of the Rules are to establish orderly procedures for the just, efficient and timely resolution of land and valuation disputes and to minimise the cost of any litigation to the litigants and to the State.
The applicant submits that some assistance is provided by the decision of Wells J in Commissioner of Highways v George Eblen Pty Ltd.[1] At the time Eblen was decided, s 23 of the Act provided that a disputed claim for compensation may be referred to the Court and on hearing the disputed claim, the Court shall determine the amount of compensation payable to all persons interested in the subject land and shall make such orders as it thinks just in the circumstances. It is clear that s 23, as it then stood, did not specifically empower the Court to determine a question arising in the course of negotiations.
[1] (1975) 10 SASR 384.
In Eblen the Commissioner had acquired a seven feet wide strip of the land upon which the applicant operated a service station and business as a car dealer. The acquisition necessitated some rebuilding of the applicant’s premises. In essence, the Court was called upon to determine compensation by reference to a hypothetical rebuilding program although, in fact, the applicant intended to carry out a more extensive reconstruction program.
Wells J held as follows:
A claimant placed in a position similar to that of Eblen, once expropriation has occurred or become inevitable, must first decide whether he will rest his claim on land valuation, disturbance, severance and injurious affection (or on one or more of them) - that is, whether he will present a conventional sort of claim - or on some more specialized basis. If it reasonably appears, as in this case, that there is real doubt as to whether his claim will be allowed in its specialized or in its conventional form, he ought not to be compelled to make a choice, in which he errs at his peril, and to be expected to begin rebuilding in order to escape subsequent stricture that he failed to act with due diligence. The purchasers of the land in Wroth v. Tyler joined voluntarily in the contract for sale and purchase and even they were not condemned for pressing their suit for specific performance; but in the present case, the circumstances leading to the acquisition of Eblen's land were none of his making, and his right to receive from the Court its decision as to the basis upon which he is entitled to have compensation assessed before he commits himself to a rebuilding programme, is, it seems to me, even stronger than Mr. and Mrs. Wroth's right to demand an award for damages after their prayer for specific performance had been rejected.[2]
(footnotes omitted)
[2] Ibid at 402.
The applicant submits that his position is analogous to the claimant in Eblen in that he is seeking guidance from the Court by means of a referral under s 23C as to the manner in which he ought to pursue compensation.
The applicant further submits that the capacity of the Court to form an opinion under s 23C(2)(a) is to some extent similar to the more limited power conferred upon the Court by s 479 and s 511 of the Corporations Act 2001 (Cth) as it stood until recent amendments. The applicant submits that decisions under those provisions provide some assistance to the Court with respect to the exercise of a statutory power for a court to give advisory directions.
The applicant also relies upon the decision of Young J of the New South Wales Supreme Court in Re Lemon Tree Passage & Districts RSL & Citizens Club Cooperative Ltd, where his Honour stated “the court should not take the view that it can just leave one of its officers floundering, and that if the liquidator asks for advice, then some advice and direction should be given”.[3]
[3] (1987) 11 ACLC 796 at 799.
The applicant also relies upon the decision in Dean-Willcocks v Soluble Solution Hydroponics where Young J stated:
There are many questions where the only order that the Court should make is that the liquidator or the claimant proceed in the ordinary courts in the ordinary way for the determination of a dispute. However, there are many other situations where the court can summarily solve the difficulty that has arisen in the liquidation by an order under the section in a cheap and efficient manner. Where this can be done, it is “just and beneficial” to exercise the power.[4]
[4] (1997) 24 ACSR 79 at 82.
The final authority relied upon by the applicant is Re Dallhold Investments Pty Ltd (in liq).[5] In that case, a liquidator sought direction from the Court as to whether he may assert legal professional privilege on behalf of a company and, if so, whether he could waive that privilege if he considered that it would benefit the secured creditors of the company. Sackville J noted that the request for directions raised questions of law and it was therefore entirely appropriate for the Court to consider the application. However, Sackville J also noted:
The questions raised in the original notice of motion were certainly questions of law. However, they were framed without regard to the particular circumstances in which the liquidator proposed to act. Ordinarily, it would not be appropriate to provide general advice divorced from the circumstances of particular transactions or courses of conduct …[6]
[5] (1994) 53 FCR 339.
[6] Ibid at 341.
The applicant submits that both he and the Commissioner have expressed their respective cases in detail by way of pleadings and have adduced evidence by way of affidavit. There is sufficient information before the Court to avoid the danger cautioned against by Sackville J in Re Dallhold. A determination as to whether personal injury is a head of compensation recognised under the Act will assist the parties to negotiate and settle their dispute. Section 23C should not be read down so as to find that the rights afforded to a claimant under the Act should be subject to implied qualifications or limitations that are contrary to the objective of the Act and the intention of the Parliament. To do so would complicate the process for persons seeking compensation and render the right afforded to them under the Act less accessible, thereby thwarting the objects and intention of the Act.
The applicant contends that a failure to determine whether personal injury is compensable under the Act prior to the matter proceeding further to negotiation or trial stands to work a clear injustice to both parties. That injustice will arise from the uncertainty as to whether the injury suffered by the applicant is compensable. The applicant submits that he should not be forced to discount his claim because of the uncertainty as to whether he has a right to compensation. From an alternative perspective, the applicant questions why the Commissioner should make any offer or pay any compensation to the applicant if there is no right to compensation. The threshold question may be resolved with minimal cost and expense. Accordingly, the Court should, in the interests of justice and consistently with the object of the Act, provide guidance to the parties to resolve the dispute and overcome the present impasse.
The applicant contends that resolution of factual matters concerning his injuries is not relevant if the Commissioner is correct in his contention that loss arising from personal injury is not compensable under the Act. In that context, the applicant also submits that if he is required to submit to numerous medical examinations and incur the costs thereof that will cause him anxiety and disruption. In those circumstances the applicant contends that it would be extraordinarily unjust to require him to participate meaningfully in further negotiations while the legal position remains uncertain.
The Commissioner’s submissions
The Commissioner submits that the first step in this matter is to identify correctly the “question” that has been referred to the Court. Section 23C requires that the question must arise in the course of negotiations. The Commissioner submits that it is clear from the pleadings of the applicant that the relevant question is the amount, if any, of compensation that should be paid to the applicant. In that respect, the applicant has sought final relief by way of an order for compensation together with an order for costs and interest. However, the “question” now identified by the applicant is a preliminary issue that the applicant seeks to have determined on an interlocutory basis. That question is but one of a number of issues relevant to the question of final relief.
The Commissioner further submits that the Court undoubtedly has control over its own processes to determine whether the preliminary issue should be answered in advance of other potential issues. How the Court exercises that discretion is not controlled by s 23C but the following principles:
(a)The general rule is that all issues are to be tried together – r 210(1) of the Supreme Court Civil Rules 2006 (SA); and
(b)A preliminary issue should not be heard when assumptions must be made as to the correctness of the allegations of fact made in the pleadings.
It is not the function of the Court to advise parties as to their rights under a hypothetical state of facts. In support of that proposition the applicant refers to the judgment of Anderson J, with whom Kelly J agreed, in Abigroup Contractors Pty Ltd v Hardesty & Hanover International LLC[7] and The Tap Inn Pty Ltd v Matthews.[8]
[7] [2008] SASC 369 at [63].
[8] [2015] SASCFC 188 at [11]-[12] and [17]-[19], Gray J, Sulan and Peek JJ agreeing.
The Commissioner submits that the contention by the applicant that s 23C(1) permits a party to refer an undefined category or class of questions that have arisen in the course of negotiations to the Court for “guidance” is incorrect. In the Commissioner’s submission, the effect of s 23C(2)(b) is that the question referred must be capable of being resolved through the making of an order. Such an order would quell the dispute concerning the issue that has arisen in the course of negotiations. However, the Commissioner submits that answering a question of statutory construction on the basis of assumed or hypothetical facts does not relevantly quell the dispute between the parties. That is because the answer would merely dictate a particular result if certain facts alleged in the pleadings were subsequently established.

The Commissioner also submits that the decision of Wells J in Eblen does not assist the applicant’s case. In Eblen the parties were able to state certain preliminary issues for hearing and determination. There was no dispute between the parties as to whether those preliminary issues should be determined. Moreover, the matter did not proceed on the basis of assumed or hypothetical facts. The issue before the Court in Eblen was whether the claimant was disentitled from pursuing compensation calculated on the basis of reasonable reinstatement of his business, in circumstances where he had not yet undertaken such reinstatement. The case was not concerned with seeking the advice of the Court on presumed or hypothetical facts in respect of past events or circumstances.
The Commissioner also submits that the authorities decided under the Corporations Act do not assist the applicant. The provisions in the Corporations Act enable directions to be sought in the course of a liquidation or administration. In those situations the purpose of any referral of a question to the court is not to quell a controversy between parties. It was recently held that an application for directions under the Corporations Act is an “administrative non-adversarial proceeding” which does not prevent the Court from concurrently hearing an actual dispute in the same proceedings.[9] Notwithstanding the “non-adversarial” character of the referral of a question under the Corporations Act, the court will not give directions concerning a hypothetical matter.[10] The Commissioner also submits that a referral under s 23C is not analogous to an “administrative non-adversarial proceeding”.
[9] Re Australian Managed Print Services [2017] FCA 1172 at [16], Lee J.
[10] Golden Heritage Gold Pty Ltd v Sun [2016] VSC 248 at [37], Sifris J.
The Commissioner contends that the applicant is seeking to isolate one aspect of his claim for compensation to be determined on the assumption that all necessary facts set out in his pleading will subsequently be proved.[11] However, there is a substantial factual dispute between the parties as to the cause of any personal injury suffered by the applicant. The ultimate resolution of the applicant’s claim for compensation will not be assisted by the Court answering a hypothetical question as to whether his loss in the nature of a personal injury is compensable under the Act if relevant facts are ultimately proved. In effect the applicant is seeking hypothetical guidance from the Court as to the meaning of the words “any loss” in s 25(1)(a) of the Act divorced from the question of whether any such loss has been “suffered by reason of acquisition of the land”.
[11] Statement of Claim at [22.1].
The Commissioner also submits that any loss suffered by the applicant by way of personal injury is not compensable because the “loss” is too remote from the “acquisition”. The Commissioner supports that contention by reference to the discussion in Jacobs, Law of Compulsory Land Acquisition.[12] However, in my view, that issue needs to be held over to a later point in these proceedings.
[12] Marcus Jacobs QC, Law of Compulsory Land Acquisition (Thomson Reuters, 2^nd ed, 2015) [25.410].
The final contention advanced by the Commissioner arises from the applicant’s assertion that his personal injury was caused by factors other than the acquisition process occurring without his consent or against his will. These other factors have not been particularised. The Commissioner submits that if the Court was to assume the correctness of this aspect of the applicant’s plea the effect would be that the Court was artificially excluding from consideration the application of s 25(1)(g) of the Act. Furthermore, the Commissioner submits that what the statement of claim refers to as the “acquisition process” is not the correct factual basis for any claim for compensation. The Act provides for the payment of compensation in respect of “the acquisition of the land”.
For these reasons the Commissioner submits that, in accordance with well‑established principles, the applicant’s proposed question should not be determined by reference to assumed facts that are contested. In those circumstances any answer given by the Court would be hypothetical and would be unlikely to assist the ultimate resolution of the applicant’s claim for compensation.
Consideration
In my view, the powers conferred upon the Court by s 23C are very broad. I base that view upon both the text of the provision and its purpose.
There are several indications that s 23C was intended to confer a broad power upon the Court. Those indications are as follows. Section 23C(1) empowers either the Authority or a claimant to “refer a question arising in the course of negotiations into Court.” There is no requirement that the question be one of law. Thus, the question may be one of law, of fact or of mixed law and fact. The only requirement is that the question has genuinely arisen in the course of negotiations.
A further indication of the intended breadth of s 23C is provided by subsection (2). Paragraph (a) of that subsection empowers the Court, if it considers that the question should be the subject of further negotiation, to adjourn the matter to allow further negotiation. That provision confers a broad discretionary power on the Court. Furthermore, that power is clearly directed at facilitating the resolution of disputes by consent.
Paragraph (b) of subsection (2) empowers the Court to make any order necessary to resolve the question that has arisen in the course of negotiations. The nature of the order made is within the discretion of the Court. The only condition precedent to the making of an order is that the Court considers it necessary to resolve the question. Paragraph (b) reinforces the breadth of the discretionary power conferred upon the Court by s 23C.
Subsection (3) of s 23C operates to confirm the scope of the orders that may be made in response to a question referred in the course of negotiations. Paragraph (a) of that subsection specifically provides that if there is a dispute as to whether the claimant has an interest in the subject land, then the Court may (leaving aside cases where native title is asserted) declare whether the claimant has an interest, and if so, the nature of that interest in the land. If the first of the two questions originally referred to the Court by the applicant had not been resolved it would have been necessary for the Court to exercise its power under s 23C(3)(a) by making a declaration as to whether the applicant had an interest in the Property.
Section 23C(3)(b) empowers the Court to make orders for the payment of compensation that it finds to be justified on the claim. That is the power called upon the Court to resolve disputes about the quantum of compensation where it cannot be agreed between the parties. More importantly in the present context, s 23C(3)(c) empowers the Court to make other orders that may be just in the circumstances of the case. The reference to “other orders”, particularly when read in the overall context of s 23C, confers a wide power upon the Court to do what it determines to be just in the circumstances.
When viewed in the way that I have indicated, the clear object of s 23C is to facilitate the expeditious and just resolution of disputes concerning the acquisition of land and the payment of compensation on just terms. Section 23C should be applied consistently with that object.
While the power conferred upon the Court under s 23C is very broad, the question arises as to whether the exercise of that power should be tempered by the restraints that apply to the grant of declaratory relief. Briefly stated, before a court will exercise its discretion to make a declaration it must be satisfied that the question is real and not theoretical; that the person raising the question has a real interest in doing so; and there is a proper contradictor.[13] As the Commissioner has noted, similar considerations apply more generally to preclude courts from resolving hypothetical questions.
[13] Forster v Jododex Australia Pty Ltd & Anor (1972) 127 CLR 421 at 437-438, Gibbs J citing Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd [1921] 2 AC 438 at 448, Lord Duneden.
In the present case, the requirement in s 23C that the question being referred to the Court must have arisen in the course of negotiations between the authority and the claimant operates in lieu of the equitable principles that provide that a declaration will not be made unless the person raising the question has a proper interest and there is a contradictor.
The further question is whether at this stage in the negotiations between the parties there is merely a hypothetical and not a real question. The Commissioner submits the Court is being asked to artificially exclude from its consideration the potential application of s 25(1)(g). That provision prohibits the fact that acquisition has been effected without the consent or against the will of the applicant being taken into account when compensation is assessed. The effect of the Commissioner’s submission is that if the Court determines, as a matter of statutory construction, that the Act permits the payment of compensation on the basis that the acquisition of land caused a loss, the answer will not assist the resolution of the dispute. There would still be a question as to whether the personal injury has arisen because the acquisition was effected without the consent or against the will of the applicant. That is plainly correct.
Whether or not a claim for personal injury said to have been caused by the acquisition of land, as distinct from the fact that the acquisition was made compulsorily, is compensable is a discrete question of statutory interpretation. That question may be resolved by the making of an order under s 23C(2)(b). If the question is answered in the negative, leaving aside any appeal, that will resolve the dispute between the parties without the investment of further time and expense.[14] While an affirmative answer will not resolve the dispute, it will serve to narrow the issues in dispute between the parties. Further negotiations or a trial could be conducted in light of that answer. That outcome is consistent with the object of s 23C.
[14] In saying that, I note there is an ongoing issue as to the payment of compensation for the applicant’s acknowledged interest in the Property.
I therefore find that the interests of justice would be best served by answering, as a preliminary point, the question of whether or not personal injury is compensable under the Act to the extent that the injury does not arise from the fact that the acquisition has been effected without the consent or against the will of the applicant.
I will hear the parties as to the further conduct of the proceedings.