Attard J and R Services Pty Ltd v Transport for New South Wales

[2013] NSWLEC 107

Land and Environment Court

New South Wales

Medium Neutral Citation:

Attard J & R Services Pty Ltd v Transport for New South Wales [2013] NSWLEC 107

Hearing dates:

15 July 2013

Decision date:

17 July 2013

Jurisdiction:

Class 3

Before:

Sheahan J

Decision:

(1)Being satisfied that good cause has been shown by the applicant for its failure to lodge the present objection within 90 days after receiving a compensation notice from the respondent, the court may proceed to hear and determine the applicant's claim for compensation.

(2)Costs of the applicant's Notice of Motion are reserved.

(3)The matter is stood over into the court's "LVC" list on Friday 19 July 2013.

Catchwords:

COMPULSORY ACQUISITON OF LAND: impact on business conducted on the land - objection not lodged within 90 days of compensation notice - power to allow objection to proceed - "good cause" to be shown for lateness - principles to apply - costs

Legislation Cited:

Land Acquisition (Just Terms Compensation) Act 1991

Cases Cited:

Camilleri v Transport for NSW [2013] NSWLEC 104
Cooper Brookes (Wollongong) Pty Ltd v FCT [1981] HCA 26; 147 CLR 297
Da Rous v Burwood Council [1995] NSWLEC 152
De Marco v Chief Commissioner of State Revenue [2013] NSWCA 86
Parramatta City Council v Transport Construction Authority [2011] NSWLEC 49
Sydney Nationwide Realty Pty Ltd v Sydney Metro [2011] NSWLEC 19
Sydney Water Corporation v Caruso [2009] NSWCA 391; 170 LGERA 298

Category:

Interlocutory applications

Parties:

Attard J & R Services Pty Ltd as Trustee for the J & R Attard Family Trust (Applicant)
Transport for New South Wales (Respondent)

Representation:

Mr M Hall and Ms C Novak, barristers (Applicant)
Mr I Hemmings, barrister (Respondent)
Colin Biggers & Paisley (Applicant)
Hunt & Hunt (Respondent)

File Number(s):

13/30334

Judgment

Background

1. Joseph and Rosemary Attard challenge the determination of compensation in respect of the respondent's compulsory acquisition of land they owned at Schofields, for the public purpose of the North West Rail Link.

1. They owned Nos 53 and 55 Schofields Road, lived in a house on No 55, and conducted a "24/7" plant hire business from the site. They purchased No 55 in 1993, and No 53 in 2008.

1. The "business interest" on No 55 was owned by their company, Attard J & R Services Pty Ltd, as trustee for the J & R Attard Family Trust, trading as "Road Sweeper Hire", which employed both of them full-time.

1. A separate claim for compensation was made in respect of the impact on the business of the acquisition of the land.

Chronology

1. Much of the following history has been gleaned from an affidavit sworn by Rosemary Attard on 24 June 2013, and read in the hearing before me.

1. Around November 2011, the Attards became aware of the respondent's intentions, regarding acquisition of their land for the public purpose, and they engaged their present solicitors in about March 2012.

1. In March/April 2012, the Attards' accountants (Bentleys) estimated that the relocation costs and revenue loss to the business, as a result of the acquisition, would be in the order of $5M over 4-5 years. The respondent arrived at a figure of $450,000 for "financial disturbance ... of the business", based on an assessment prepared by Robertson & Robertson. A conference of experts was held in about August 2012, and a joint report was provided to the Valuer General, who later determined that element of compensation at $277,300 (see [9] below).

1. On 4 July 2012, the respondent sought to negotiate an agreement, and offered "total compensation" packages, available until 29 August 2012, in respect of both parcels and the business. Vacant possession was required not later than 28 February 2013.

1. On 5 December 2012, three separate compensation notices were issued to the Attards - in the sums of $2.568M for No 53, $2.855M for No 55, and $277,300 for the business loss.

1. The 90-day time limit on lodging objections in the court runs from receipt of those notices, in the normal course, which would mean that the time expired on, say, 7 March 2013.

1. On 19 December 2012, Mr Attard filed class 3 proceedings in respect of the two landholdings (matters 12/31254 re No 53, and 12/31256 re No 55), and those matters are travelling together through this court's case management processes. Their next directions hearing is set for 30 August 2013.

1. Late in 2012, after "a great deal of difficulty in locating a suitable property", and "a great deal of time looking at properties", the Attards purchased a property at The Ponds, as at least a "stop-gap" replacement home and business site - to "have somewhere to live after 28 February 2013", Ms Attard deposes (par 20).

1. On 10 February 2013, the Attards' solicitor engaged a Mr Butterfield of Halligan & Co to prepare an independent report on their business disturbance claim, and, on 4 March 2013, wrote to the respondent in respect of the company's claim, acknowledging the imminent expiry of the objection period, and indicating that he was obtaining a "second opinion from an appropriately qualified business valuer", which he expected within "2 to 3 weeks". Butterfield's report was received around 20 March 2013, and sent to the respondent.

1. Ms Attard deposes (par 31) that, at the time Butterfield was engaged, she and her husband were concerned that a difference of only $100,000-$250,000 between the parties' assessment of the business claim may not justify the "risks of fighting ... court proceedings, having regard to the legal costs and anxiety involved".

1. She further deposes (par 33) that the family spent "most of January, February, and March 2013 preparing to move", a "particularly disruptive and anxious period" for them, while still operating a business and looking for a new venue for it.

1. On 6 February 2013, the "vacant possession" date was extended to 31 May 2013. However, the court notes that that extension was not mentioned in Ms Attard's affidavit.

1. On 6 May 2013, the trustee company lodged its Class 3 application of objection in this matter, claiming (business loss) disturbance compensation of $644,510.65.

1. On 7 June 2013, Craig J directed that any Notice of Motion ("NOM") seeking relief for the company, under s 66(3) of the Land Acquisition (Just Terms Compensation) Act 1991 ("the JTC Act"), should be filed by 2 June 2013, and 15 July was appointed as the hearing date for any such NOM.

1. On 25 June 2013, the company filed the NOM now before the court, and Ms Attard's affidavit.

1. Section 66(3) provides (my emphasis):

66 Objection against amount of compensation offered

...

(3) A person who does not lodge an objection within the 90-day period and who is taken to have accepted the offer of compensation under section 45 may nevertheless lodge an objection under this section, but the Land and Environment Court is not to hear and dispose of the person's claim for compensation unless satisfied that there is good cause for the person's failure to lodge the objection within that period.

...

1. This judgment determines that NOM.

1. The respondent does not assert any prejudice flowing from the applicant's NOM, but opposes it, not only on the merits of the Attards' case on their delay in lodging their company's objection, but on the grounds that the respondent believes the proceedings have no utility.

1. The respondent says that the company's substantive claim cannot succeed on the compensation law (s 61 of the JTC Act, as considered by the Court of Appeal in Sydney Water Corporation v Caruso [2009] NSWCA 391; 170 LGERA 298, especially at [184]-[188]), and/or on the planning evidence (opining that the improvements on, and the use of, the land were not "lawful").

1. The respondent's planning evidence (affidavit by Gary Shiels, sworn 12 July 2013) was filed in this matter on 12 July 2013, and the applicant has not yet had the opportunity to assemble and file its evidence in response. The applicant says that the likely submission based on s 61 will not succeed in the face of the reasoning in a recent Court of Appeal land tax decision on the term "lawful" (De Marco v Chief Commissioner of State Revenue [2013] NSWCA 86, especially per Gzell J and Basten JA, c.f. McColl JA).

Consideration

1. Section 66(3) ([20] above) should be construed on its actual terms: an applicant has to demonstrate "good cause" for failing to file proceedings such as these within 90 days of the compensation notice.

1. The words are plain and unambiguous: Cooper Brookes (Wollongong) Pty Ltd v FCT [1981] HCA 26; 147 CLR 297, at 305. They connote no obligation on the applicant to demonstrate that it has a "good cause" in the sense of a good case for compensation, and, while I accept that the respondent has a case to be argued against an award of compensation, I reject its contrary submissions on what has to be decided at this stage.

1. Should the applicant proceed with what can be cogently argued is a manifestly hopeless claim, the respondent has remedies - for example, a strike-out application when its objection is coming on for hearing, or a Calderbank offer, affecting costs, prior to the hearing. Total failure at the hearing may lead to a costs order.

1. The authorities indicate that "good cause" in s 66(3) does not set a high threshold, and that "a liberal approach" to its administration is demanded by the significance, to a property owner, of a compulsory acquisition, especially where the owner sees the compensation offered as being demonstrably inadequate. See the seminal decision of Bannon J in Da Rous v Burwood Council [1995] NSWLEC 152 ("Da Rous"), which involved a solicitor's procrastination, and defined the approach followed by Pain J in Sydney Nationwide Realty Pty Ltd v Sydney Metro [2011] NSWLEC 19 ("Sydney Metro"), a case of admitted solicitor error.

1. Both Pain J and Bannon J spoke of the courts having a discretion when considering an application under s 66(3), or any similar provision based on "good cause" (e.g. s 67(4)). Bannon J contrasted the 90-day time limit with the general allowance of 1, 3, or 6 years: "It is a very strong thing to remove a property owner's right of access to the courts ... if the owner does not lodge an objection within 90 days", but "a limitation period is not necessarily unjust".

1. The principles involved were also discussed by Biscoe J in Parramatta City Council v Transport Construction Authority [2011] NSWLEC 49 ("Parramatta"), at [67]-[72] and [90]-[93]. His Honour there made no reference to Da Rous or to Sydney Metro, but he opined (at [90]) that s 66(3) leaves the court "no residual discretion not to hear and dispose of the claim.

1. The most recent case in this court on s 66(3) was last Thursday's decision of Craig J in Camilleri v Transport for NSW [2013] NSWLEC 104 ("Camilleri"), involving, as here, a resumption in Schofields Road, and the impact of it on a family-conducted business. The objection was filed about 39 days beyond the 90-days period, and relief under s 66(3) was sought. The evidence in support was an affidavit by the female applicant (there being no trust company in place). The respondent, however, neither opposed nor supported the application. The facts recounted by His Honour were remarkably similar to the present case, except that the applicants changed their solicitor near the 90-days mark. His Honour referred (at [27]) to Sydney Metro and Parramatta, but not to Da Rous.

1. The court can appreciate the impact on the Attards of advice that the losses to their business could amount to $5M (see also Craig J, at [31]). They were eventually persuaded that that opinion could not be sustained, but independent advice was not sought until almost 12 months after Bentleys' advice, by which time the objection period had almost expired.

1. The respondent, however, was put on notice, at that time, by the applicant's solicitor, that the objection may well come forward, together with an application like the present NOM.

1. There seems to me to have been genuine attempts throughout, by the Attards, to avoid a third court case, and to moderate their claims.

1. Although there is clear evidence of delay on the Attards' part regarding the business claim, their land value objections were filed within fourteen of the prescribed 90-days.

1. The delay on the business claim is explained by Mrs Attard in terms of (1) the Attards' lack of experience or expertise in relevant matters, impeding any rational re-appraisal of the $5M estimate rejected by the government, and (2) the combination of domestic, business and location pressures on the family at the relevant time. (In Camilleri, there were additional medical factors and a family wedding - see [23](v)-(vii) - as well as a change in representation).

1. On the other hand, Mr Hemmings (for the respondent) says that they were "on notice" from November 2011, they clearly knew the stipulation of the 90-day limitation (affidavit tabs 1 and 3), they were competently represented from March 2012, and the respondent not only did not rush to give notices, but also extended the applicant's occupancy by three months.

1. Mr Hall (for the applicant) says that the applicant's timeliness should be measured only from the service of the compensation notices in December 2012, as the North West Rail project had been long mooted, without any action towards acquisition.

1. Whereas Mr Hemmings submits that no weight should be given to the "notification within time" given on 4 March 2013, Mr Hall points out that such a notification was influential in Bannon J's decision in Da Rous. Mr Hall also relies on Craig J's reasoning in Camilleri.

1. I consider that Mrs Attard's affidavit demonstrates "good cause", in the sense of the term as it is used in s 66(3).

Conclusion

1. A formal grant of leave may not be required (according to Biscoe J at [71], and Craig J at [7]), although that is what the NOM seeks. Craig J said (at [26]) that the court is required to "determine its satisfaction that good cause" has been shown for the failure to lodge the objection within 90 days.

1. Bannon J, in Da Rous, expressed the court's favourable decision thus:

...I consider the Court should exercise its discretion in favour of the applicants, allow the objection to valuation to be filed and permit the proceeding for compensation to be heard and I so order ...

1. Pain J made a formal order extending the time for filing the relevant application in that matter (under s 71 of the JTC Act) to the date endorsed on its cover.

1. Craig J made the following determination (in [36]):

Being satisfied that good cause has been shown by the applicants for their failure to lodge the present objection within 90 days after receiving a compensation notice from the respondent, the Court may proceed to hear and determine the applicants' claim for compensation.

1. I am very pleased to adopt Craig J's formulation of the appropriate order.

1. Turning then to the question of costs (par 2 of the NOM), I note that Bannon J reserved costs, Biscoe J made a "no order as to costs" order, and both Pain J and Craig J remained silent on the question.

1. I am somewhat troubled by the question of costs in all the circumstances of this case, and I am not prepared to order, as sought by the applicant, that the parties' costs of the NOM be "costs in the cause".

1. The court should, therefore, accept for adjudication the objection made in the class 3 application filed in this matter on 6 May 2013, and formally reserve the costs of the motion.

1. The matter should then stand over to the LVC list on Friday 19 July 2013 for directions to be made, in anticipation of a hearing of the applicant's objection in conjunction with the other two current and related matters.

Orders

1. The formal orders of the court are, therefore:

(1)   Being satisfied that good cause has been shown by the applicant for its failure to lodge the present objection within 90 days after receiving a compensation notice from the respondent, the court may proceed to hear and determine the applicant's claim for compensation.

(2)   Costs of the applicant's Notice of Motion are reserved.

(3)   The matter is stood over into the court's "LVC" list on Friday 19 July 2013.

Decision last updated: 17 July 2013