Blacktown City Council v Concato

[2018] NSWSC 1039

Supreme Court

New South Wales

Medium Neutral Citation:	Blacktown City Council v Concato [2018] NSWSC 1039
Hearing dates:	3 July 2018
Date of orders:	06 July 2018
Decision date:	06 July 2018
Jurisdiction:	Common Law
Before:	Campbell J
Decision:	Stay granted on terms
Catchwords:	ADMINISTRATIVE LAW – practice and procedure - stay of administrative action pending judicial review - source of power - discretionary considerations
Legislation Cited:	Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 19, 20, 23, 24, 37, 41, 42, 44, 51, 61, 66 State and Environmental Planning Policy (Sydney Region Growth Centres) 2006 (NSW) Supreme Court Act 1970 (NSW), s 69 Uniform Civil procedure Rules 2005 (NSW), r 51.44
Cases Cited:	Council of the City of Gosford v Cunningham [1997] NSWCA 81 DJ Singh v DH Singh & Ors [2017] NSWCA 234 El Boustani v The Minister Administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33 Gosford City Council v Valuer-General (1996) 90 LGERA 413 Hoy v Coffs Harbour City Council [2016] NSWCA 257; 218 LGERA 411 Kirk v Industrial Court of NSW (2010) 239 CLR 531; [2010] HCA 1 Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 77 ALJR 727 Re Kerry [2010] NSWCA 232 Secretary of the Treasury v Public Service Association [2014] NSWCA 14
Texts Cited:	Ritchie’s Uniform Civil Procedure 2005 (NSW) New South Wales Government Gazette, No. 26 of 9 March 2018
Category:	Consequential orders (other than Costs)
Parties:	Blacktown City Council (Plaintiff/Applicant) Lodovico Antonio Concato (First Defendant and Respondent) Vilma Concato (Second Defendant and Respondent) Office of the Valuer-General (Third Defendant and Respondent)
Representation:	Counsel: P Tomasetti SC with A Hemmings (Applicant) K Lindeman (First and Second Respondents) Solicitors: Maddocks Lawyers (Applicant) M Everingham Office of the Crown Solicitor (Third Respondent)
File Number(s):	2018/193605

Judgment

1. HIS HONOUR: By summons filed on 22 June 2018, Blacktown City Council (“the plaintiff”) seeks judicial review under s 69 Supreme Court Act 1970 (NSW) (“Supreme Court Act”) of a determination of compensation made by the Valuer-General under s 41 Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (“the Act”) on 7 June 2018.

2. The first and second defendants are the former landowners (“the landowners”) and the third defendant is the Office of the Valuer-General. The matter was referred to me by the Registrar on 3 July 2018 for the hearing of the plaintiff’s notice of motion filed on 26 June 2018 seeking interim relief maintaining the status quo pending the disposition of the principal proceedings.

3. The plaintiff was represented by Mr Tomasettis SC appearing with Ms Hemmings of counsel; the landowners by Ms K Lindeman of counsel, and the third defendant by Mr Everingham solicitor of the Office of the Crown Solicitor. The third defendant submits to the order of the Court save as to costs. The landowners oppose the interim relief sought.

Background

4. The acquired land is a parcel of land at Rouse Hill. Its area is 2.023 hectares (5 acres) which, after its acquisition by the landowners was rezoned “predominately RE1 public recreation with a narrow strip of land across the south-western boundary zoned SP2 infrastructure (drainage) under the provisions of State and Environmental Planning Policy (Sydney Region Growth Centres) 2006 (SEPP 2006)” (report of International Valuation of Property Services, page [26], forming part of annexure C to affidavit of MMG Mallos sworn 2 July 2018). The land is subject to a mortgage.

5. The plaintiff acquired the land on the owners’ application on hardship grounds under s 23 of the Act. That procedure was available because SEPP 2016 designated the land for acquisition by the plaintiff for a public purpose and the owners were unable to sell the land at its market value because of that designation (s 24 of the Act).

6. The plaintiff resolved to acquire the land on 21 November 2017 and the acquisition was effected by the publication of an acquisition notice in the New South Wales Government Gazette, No. 26 of 9 March 2018 (ss 19 and 20 of the Act).

7. Under s 37 of the Act, an owner whose interest in land is extinguished by an acquisition notice is entitled to be paid compensation by the acquiring authority, here the plaintiff. Each of the plaintiff, on the one hand, and the landowners, on the other, obtained valuations but were unable to agree on the amount of compensation. The plaintiff’s valuer assessed the amount of compensation in the sum of $12.65M and the landowners’ in an amount a little over $20M. Accordingly, the landowners’ claim for compensation was determined by the Valuer-General under s 41 of the Act. As I have said, the plaintiff seeks to impugn the legality of the Valuer-General’s determination.

The legal issue

8. Section 42 of the Act is a key provision of the regime for compensation established by the Act. Section 42(1) is in the following terms:

An authority of the State which has compulsorily acquired land under this Act must, within 45 days after the publication of the acquisition notice, give the former owners of the land written notice of the compulsory acquisition, their entitlement to compensation, and the amount of compensation offered (as determined by the Valuer-General).

The period of 45 days cannot be read literally given that in this case, and I assume in others, the determination of compensation by the Valuer-General had not occurred during the first 45 days following the publication of the acquisition notice on 9 March 2018.

9. Section 66 of the Act permits the former landowners to lodge with the Land and Environment Court an objection to the amount of compensation offered by the authority which has acquired their land. Where an objection is lodged the owners’ claim for compensation proceeds as a de novo assessment by that Court. This means the former owners may effectively challenge, or obtain a merits review of, the Valuer-General’s determination. The acquiring authority, here the plaintiff, has no corresponding right of challenge or merits review: Gosford City Council v Valuer-General (1996) 90 LGERA 413. This leaves the plaintiff “with the more onerous task of moving (this Court) to quash the Valuer-General’s determination on administrative law principles”: Council of the City of Gosford v Cunningham [1997] NSWCA 81. In Gosford v Cunningham Mason P observed that there was no issue about the Supreme Court’s jurisdiction to entertain such an application. This, of course, has been clearly established by Kirk v Industrial Court of NSW (2010) 239 CLR 531; [2010] HCA 1. Hence, the principal proceedings.

10. The plaintiff is concerned about the need to comply with its legal obligation under s 42 of the Act now that the Valuer-General has made the determination of the compensation to which the landowners are entitled. Given that it impugns the legality of that determination, it might have decided to take no action until the present proceedings are finalised, adopting the view that as the determination is of no legal effect, s 42 is not engaged.

11. However given that the landowners have a right under s 44 of the Act to accept a s 42 offer of compensation and to receive payment of the compensation within 28 days of completion of legal formalities such as the provision of a duly completed deed of release and indemnity, the plaintiff has considered it prudent to apply to the Court for an appropriate interim order to protect its position.

Nature of the relief sought

12. In express terms, the notice of motion seeks an interim declaration in terms that the plaintiff is not required to comply with s 42 of the Act pending determination of the proceedings. I confess to having difficulty with the idea that an interim declaration, if such an order is available, can do the work required. Doubtless the Court has ample power under s 66(4) Supreme Court Act by interim injunction to preserve the status quo pending the resolution of proceedings: but whom to injunct in this case?

13. Were this matter an appeal, or where the decision maker is a court or tribunal, there would be no legal difficulty in granting a “stay” even if the juristic basis of the order may be a little obscure. See: Secretary of the Treasury v Public Service Association [2014] NSWCA 14 at [13]-[16], Basten JA.

14. In the case of Re Kerry [2010] NSWCA 232 Young JA said (at [16], [21]-[23]):

“[16] I have no difficulty at all with the idea that when seized with an application for certiorari the Court might make a stay order of the whole of the decision made below and probably a discrete part of it. Nor have I any difficulty with the situation where the subject matter of the litigation is to be preserved until the hearing of the matter. The problem only occurs where what is being sought is some adjustment of the order below for purely personal concerns of the litigants.

...

[21] However, although I have some doubt about the matter, it seems to me that the preferable view is that an application for a prerogative order under s 69 of the Supreme Court Act 1970 comes within the ambit of the word “proceedings” as used in s 66. One gets confidence in saying this because of the use of the word “proceedings” in s 69(1)(f) of the Supreme Court Act.

[22] Although s 66 has been taken from earlier legislation which was more concerned with injunctions in ordinary actions between subjects, it seems to me that reading it in context it does cover the instant situation.

[23] Accordingly, if an application is made to this Court under s 69, in my view the Court has jurisdiction either to stay in whole or in part the decision which it is sought to review or to grant the appropriate injunction to hold the status quo pending the hearing of the appeal or, as in this case, to grant an injunction that is ancillary to the relief being sought on the application.”

15. In the context of an appeal, it has been said that the power to order a stay is incidental to the right of appeal and derives from the inherent power of the Court to do whatever is necessary to prevent injustice in relation to the proceedings in the Court: Uniform Civil Procedure (NSW) (“UCPR”), r 51.44.5 and the cases there referred to. This case is not an appeal but if the source of the power to grant a stay is inherent, it may be said to be incidental to a right to seek an order in the nature of prerogative relief as Young JA explained. On the other hand, Basten JA has pointed out that s 23 of the Supreme Court Act may have a limited operation in judicial review proceedings (see: Secretary of the Treasury v Public Service Association at [13]). In that case his Honour sourced the power to grant a stay to the express terms of UCPR 51.44 which applies to proceedings in the Court of Appeal generally (not just appeals). But this rule does not apply to proceedings in the Supreme Court generally. UCPR 50.7 is a cognate provision, but it applies only to appeals to the Court not assigned to the Court of Appeal. An application for judicial review invokes the original, not the appellate, jurisdiction of the Court.

16. I am satisfied, however, for the reasons given by Young JA in Re Kerry that I have power to grant a stay of the legal effect of the Valuer-General’s determination of the amount of compensation payable which will have the effect of obviating the need for the plaintiff to comply with s 42 of the Act pending disposition of the proceedings.

Should the power be exercised?

17. The principle informing the exercise of the discretion to grant a stay was summarised by Gleeson JA in DJ Singh v DH Singh & Ors [2017] NSWCA 234 (at [29]) in the following terms:

“The successful party is prima facie entitled to the benefit of a judgment, but a stay may be granted where an applicant demonstrates an appropriate case to warrant the exercise of discretion in its favour. The mere filing of the appeal is insufficient, of itself, to demonstrate such a case. Usually it is demonstrated by showing that there are arguable grounds of appeal, and that there is a significant risk that if money is paid it will be unable to be recovered if the appeal succeeds; or by demonstrating that unless a stay is granted the appeal will be rendered nugatory.” (Citation omitted.)

Obviously this statement of principle needs some adaptation in the present context as we are concerned with neither a judgment nor an appeal. But it remains that to obtain a stay, the plaintiff needs to demonstrate arguable grounds supporting an administrative law remedy, and significant risk that if the whole of the compensation determined by the Valuer-General is paid, the plaintiff will be unable to recover it promptly and with interest if its case is successful. I leave aside the possibility that the landowners may yet reject the Valuer-General’s determination and lodge an objection in the Land and Environment Court.

The arguments of the parties

18. The thrust of the plaintiff’s argument is that the determination of the Valuer-General did not conform to law in five respects. In particular, it was argued that fundamental errors were made in analysing comparable sales; a relevant consideration was not taken into account; an irrelevant consideration was taken into account; there was an irrational failure to correct an error pointed out when a draft determination was circulated; and certain items were included in the valuation contrary to the provisions of s 61 of the Act.

19. That these grounds were fairly arguable was illustrated by reference to Maurici v Chief Commissioner of State Revenue (2003) 77 ALJR 727; [2003] HCA 8; at [18] and [22]; El Boustani v The Minister Administering the Environmental Planning and Assessment Act 1979 [2014] NSWCA 33 at [117], [129], [133] and [139]-[140]; and Hoy v Coffs Harbour City Council [2016] NSWCA 257; 218 LGERA 411 at [59].

20. The plaintiff also argued that notwithstanding mechanisms for recovery of the amount of any overpayment either under the Act (see s 48 (4) and (5)), or by way of restitution, in the absence of evidence from the first and second defendants as to their financial position, the Court would be satisfied that there was a risk of significant loss to the plaintiff.

21. Ms Lindeman of counsel accepted that the Court had power to make an order in the nature of a stay but argued the grounds for a stay had not been shown. She submitted that no arguable case had been shown and, palpably, the plaintiff’s grounds as expressed in the summons were an impermissible attempt at merits review. She argued that given the statutory mechanisms for recovery of any overpayment, there was no risk of loss.

Decision

22. I am satisfied that the grounds expressed in the summons provide an arguable basis for orders in the nature of certiorari and mandamus. It is not necessary for me to enter into the detail now as that matter is to be determined at the final hearing. It seems to me, however, that on the basis of the authorities referred to by Mr Tomasetti SC and Ms Hemmings, if the factual matters underpinning the plaintiff’s complaints are made good at the hearing, it is fairly arguable that the Valuer-General’s determination did not conform to the requirements of the statute.

23. I also accept that the landowners carry an evidential onus to demonstrate that if paid the whole amount of the compensation determined by the Valuer-General, they will be in a position to promptly make good any overpayment which becomes apparent if the plaintiff is successful, the determination is set-aside and a further determination conforming to law is made which is more favourable to the plaintiff. This could have been satisfied by an appropriate affidavit as to their financial position. Given the large sums involved, I am prepared to infer that in the absence of such evidence, there is a real risk that the first and second defendants would not be able to promptly repay any significant overpayment and with interest.

24. For these reasons I am of the view that a stay should be granted.

25. On the other hand the stay should not be without conditions. The landowners’ property has already been acquired by the plaintiff and on any view they are clearly entitled to a very large sum in compensation. This was acknowledged by Mr Tomasetti who accepted that conditions should be imposed including the payment of the amount which the Council acknowledges the first and second defendants are entitled to and setting aside the amount of the balance of the Valuer-General’s determination in a controlled money account pending the determination of the proceedings. I am not sure that it is appropriate to pay that balance into the trust account contemplated by s 51 of the Act as the terms of s 51 do not appear to be applicable in the present circumstances.

26. Obviously the matter should be brought on for hearing as quickly as the general business of the Court will permit.

Orders

1. The legal effect of the Valuer-General’s determination of compensation of 7 June 2018 is stayed until the disposition of these proceeding on the following conditions:

1. That the plaintiff pays to the first and second defendants on account of their entitlement to compensation the sum of $12,650,000 after deduction therefrom of the amount necessary to discharge the mortgage over the property; and

2. The additional sum of $3,984,381 is paid into a controlled money account on trust for the first and second defendants against the contingency that the plaintiff’s summons may be dismissed.

2. Order (1) does not derogate from the plaintiff’s statutory entitlement to obtain a deed of release and indemnity, and the title document to the property on completion of the first and second defendants’ claim for compensation.

3. The parties to submit short minutes of order providing for further necessary steps in preparation of the matter for hearing.

4. Costs are costs in the proceedings.

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Decision last updated: 06 July 2018