Brock v Roads and Traffic Authority of New South Wales (No.2)
[2012] NSWLEC 114
•16 May 2012
Land and Environment Court
New South Wales
- Amendment notes
Medium Neutral Citation: Brock v Roads and Traffic Authority of New South Wales (No.2) [2012] NSWLEC 114 Hearing dates: 1 August 2011; written submissions 7 Nov 2011 Decision date: 16 May 2012 Jurisdiction: Class 3 Before: Sheahan J Decision: 1. The applicant's Notice of Motion dated 12 May 2011 is dismissed.
2. The applicant is ordered to repay to the respondent $187,987.44, together with interest calculated from the date of payment, by 31 December 2014.
3. Each party is to pay its own costs of the proceedings.
4. The applicant is to pay the respondent's costs on the motions heard 1 August 2011, on a party-party basis, as agreed or assessed, within six months of agreement or assessment.
5. The applicant's amended Notice of Motion dated 24 May 2011, and paragraphs 2 and 3 of the respondent's Notice of Motion dated 17 June 2011, are discharged.
6. Exhibit B1 is returned.
Catchwords: COSTS: Principles to apply in class 3 compensation claims and on motions seeking costs orders in such claims.
COMPENSATION: Obligation to refund overpayment - power or jurisdiction of this Court to enforce repayment and set time of repayment.Legislation Cited: Civil Procedure Act 2005
Land Acquisition (Just Terms Compensation) Act 1991
Land and Environment Court Act 1979
Local Government Act 1919
National Parks and Wildlife Act 1974
Uniform Civil Procedure Rules 2005Cases Cited: Al Amanah College Inc v Minister for Education and Training (No 4) [2012] NSWLEC 26
Alinta LGA Ltd (formerly The Australian Gas Light Company) v Mines Subsidence Board [2008] HCA 17; (2008) 244 ALR 276
Arnold v Minister Administering the Water Management Act 2000 [2007] NSWLEC 531; (2007) 157 LGERA 379
Banno v Commonwealth of Australia (1993) 45 FCR 32; (1993) 81 LGERA 34
BMP Manufacturing Pty Ltd v Road and Traffic Authority of New South Wales (No.2) [2009] NSWLEC 41
Brock v Roads and Traffic Authority of New South Wales [2010] NSWLEC 244
Butland v Cole (1995) 87 LGERA 122
Dillon v Gosford City Council [2011] NSWCA 328
DJL v The Central Authority [2000] HCA 17; (2000) 201 CLR 226
Duncan v Moore [1999] NSWLEC 152 (1999) 103 LGERA 312
Evangelakos v Roads and Traffic Authority of New South Wales [2006] NSWLEC 514
Figgis & Jefferson Pty Ltd v Mosman Municipal Council (1993) 81 LGERA 423
Frank Calabro Pty Ltd v D & K Maaka [1998] NSWLEC 11
Frank Calabro Pty Ltd v D & K Maaka [1999] NSWCA 132
Frevcourt Pty Ltd v Wingecarribee Shire Council [2005] NSWCA 107; (2005) 139 LGERA 140
Gracewood Australia Pty Ltd v State Water Corporation [2008] NSWLEC 292
Grant v Brewarrina Shire Council [2003] NSWLEC 41
Gray v Macquarie Generation (No.3) [2011] NSWLEC 3
Haig v Minister Administering the National Parks and Wildlife Act 1974 (No 3) (1996) 90 LGERA 408
Hamer v Giles (1879) 11 ChD 942
Hawkesbury City Council v Dundler [2005] NSWLEC 662
Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No. 2) [2008] NSWCA 85
Halley v Minister Administering the Environmental Planning and Assessment Act 1979 (No 3) [2011] NSWLEC 94
Lake Macquarie City Council v Luka [1999] NSWCA 447;(1999) 106 LGERA 94
Latoudis v Casey [1900] HCA 59; (1990) 170 CLR 534
Leichhardt Municipal Council v Green [2004] NSWCA 341
Minister for Minerals and Energy v Vaughan-Taylor (1991) 73 LGRA 115
Mitchell v Waugh (1993) 82 LGERA 44
Monaghan v Holroyd City Council [2009] NSWLEC 112; (2009) 167 LGERA 321
N & S Oliveri Pty Ltd v Fairfield City Council [2002] NSWLEC 35, 121 LGERA 90
National Parks and Wildlife Service v Stables Perisher Pty Ltd (1990) 20 NSWLR 573; (1990) 71 LGRA 286
Neighbourhood Association DP 285121 v Murray Shire Council [2001] NSWLEC 247; (2001) 117 LGERA 95
Nelson v Ballina Shire Council (1993) 80 LGERA 271
Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249; (2008) 163 LGERA 83
Niezabitowski v Roads and Traffic Authority of NSW [2006] NSWLEC 462; (2006) 147 LGERA 417
Nix and Dunn v Pittwater Council (1994) 84 LGERA 199
N Stephenson Pty Ltd v Roads and Traffic Authority of New South Wales (1994) 83 LGERA 248
NTL Australia Pty Ltd v Minister for Land and Water Conservation [2001] NSWLEC 5; (2001) 112 LGERA 403
Old v Hodgkinson; Old v McInnes [2010] NSWSC 1335
Oshlack v Richmond River Council (1998) 193 CLR 72
Overton Investments Pty Ltd v The Minister Administering the Environmental Planning and Assessment Act 1979 [2001] NSWCA 137; (2001) 113 LGERA 439
Pastrello v Roads and Traffic Authority of New South Wales [2000] NSWLEC 209; (2000) 110 LGERA 223
Porter v Hunters Hill Council [2003] NSWLEC 179; (2003) 131 LGERA 144
Prasad v Minister Administering the Environmental Planning and Assessment Act 1979 (No. 2) [2012] NSWLEC 59
Production Spray Painting & Panel Beating Pty Ltd v Newnham [No 2] (1992) 27 NSWLR 659
Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7; (1981) 148 CLR 457
Reysson Pty Ltd v Roads and Maritime Services (No 2) [2012] NSWLEC 91
Ray Fitzpatrick Pty Limited v Minister for Planning (No.5) [2008] NSWLEC 183
Roads and Traffic Authority of NSW v McDonald [2010] NSWCA 236; (2010) 175 LGERA 276
Scharer v New South Wales [2001] NSWCA 360; (2001) 53 NSWLR 299
Serbian Cultural Club 'St Sava' Inc & Serbian Cultural Club Limited v Roads and Traffic Authority of New South Wales (No 2) [2008] NSWLEC 78
Simpson v Bagnall [2008] NSWLEC 79
South Eastern Area Health Service v King [2006] NSWCA 2
SWM Financial Services Pty Ltd v Lloyd (No 2) [2012] NSWSC 202
Taylor v Port Macquarie-Hastings Council [2010] NSWLEC 153; (2010) 175 LGERA 189
Tweed Byron Local Aboriginal Land Council v Minister Administering the Crown Lands (Consolidation) Act and Western Lands Act (1990) 69 LGRA 269
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2010] NSWLEC 27
Ward Richard Geoffrey v Roads and Traffic Authority of New South Wales [2007] NSWLEC 405
Woollahra Municipal Council v Baranov [2006] NSWLEC 97; (2006) 114 LGERA 96
Wollong Pty Ltd v Shoalhaven City Council [2002] NSWLEC 164; (2002) 122 LGERA 331
Yakas v Roads and Traffic Authority (NSW) (No 2) [2004] NSWLEC 589; (2004) 139 LGERA 116Category: Costs Parties: Lynette Verlie Brock (Applicant)
Roads and Traffic Authority of New South Wales (Respondent)Representation: Mr J Webster SC and Mr R Marshall, barrister (Applicant)
Mr P Tomasetti SC (Respondent)
Bilbie Dan (Applicant)
Henry Davis York(Respondent)
File Number(s): 30132 of 2009
Judgment
Introduction
This judgment concerns competing notices of motion brought by the parties to these class 3 compensation proceedings, consequent upon:
(1) this Court's determination of the substantive question of compensation on 29 November 2010;
(2) the disappointed applicant's decisions to appeal against my judgment, and to seek an order that the respondent pay her costs of the proceedings; and
(3) the respondent's decision to seek both
(a) an order for costs in its favour, and
(b) an order that some of the advance compensation payment it made to the applicant be returned.
In her objection to the statutory offer made to her in respect of the acquisition on 31 October 2008 of some of her land at Glenarvon Road, Lorn, for the purposes of the construction of the so-called "third Hunter River crossing" near East Maitland, Mrs Brock recovered less than the amount advanced to her by the RTA - [2010] NSWLEC 244. The formal orders of the Court, entered on 31 March 2011, apart from reserving costs and returned exhibits, awarded Mrs Brock $437,087 for market value, and $31,380 for disturbance.
By way of her Notice of Motion ('NOM'), dated 12 May 2011, Mrs Brock seeks an order that the respondent pay her costs of the proceedings, and "such further or other orders as the court deems fit". Mrs Brock filed an amended NOM on 24 May 2011, but elected not to proceed with it.
When moving on her NOM, Mrs Brock's counsel, Mr J Webster SC, sought orders in the following terms:
1.The applicant be paid the costs of the proceedings by the respondent as agreed or assessed.
2.Such costs as assessed to be paid by the applicant to the respondent in refund of any monies the applicant is ordered to repay to the respondent pursuant to order 1 of the respondent's motion filed 17 June 2011.
3.Subject to order 2 above, the applicant be allowed five (5) years in which to repay any amount (or balance thereof) she is ordered to repay to the respondent pursuant to order 1 of the respondent's motion filed 17 June 2011.
4.Liberty to the applicant to apply on 14 days notice to vary order number 3 above.
5.The respondent pay the applicants costs of her amended motion filed 24 May 2011 and the respondent's motion filed 17 June 2011 as agreed or assessed.
The respondent's NOM filed 17 June 2011 sought the following orders:
1.An order pursuant to s16(1A) of the Land and Environment Court Act 1979 ['the Court Act'] that the Applicant repay to the respondent $187,987.44 together with interest calculated from the date of payment.
2.(Not pressed).
3.If the Court makes any other order in relation to the Applicant's Amended Notice of Motion filed on 24 May 2011, that each party pay its own costs of the proceedings.
4.In the alternative, that each party pay its own costs of the proceedings.
5.Any other orders the Court thinks fit.
During argument, the applicant having abandoned her amended NOM, the RTA's counsel, Mr P Tomasetti SC, put a submission, "so as to bring to an end all matters in dispute between the parties" (see Tp39, Ll 18 - 36), that the outcome should be:
(1)an order for repayment, as per its first prayer, with a time limit of no more than 2 years from the date of such order;
(2)an order that each party pay its own costs of the substantive proceedings; and
(3)an order that the applicant pay the respondent's costs on the two motions.
Before the hearing of these motions on 1 August 2011, there were some negotiations between the parties aimed at settling the applicant's appeal, the question of costs, and the question of repayment (see Exhibit B1), but they were unsuccessful.
The main questions remaining between the parties, and presently before this Court, are, therefore:
(1)whether the Court has the power/jurisdiction to deal with the question of the repayment of the amount overpaid;
(2)if so, whether an order to repay should be made, and on what terms;
(3)whether the applicant should be ordered to pay any of the respondent's costs of the substantive proceedings, given their outcome and attempts made to settle them; and
(4)who should pay the costs of the hearing of the NOMs?
Much of the argument on the question of costs at the 1 August hearing proceeded on the basis that the law applicable to costs in class 3 was as stated by Pepper J in her judgment of 31 May 2011 in Halley v Minister Administering the Environmental Planning and Assessment Act 1979 (No 3) ("Halley No 3") [2011] NSWLEC 94.
However, while I was preparing this judgment on the basis of competing arguments on that basis, the Court of Appeal handed down, on 26 October 2011, its decision in Dillon v Gosford City Council ("Dillon CA") [2011] NSWCA 328, in which that Court held that Halley No 3 had been wrongly decided.
The Dillon CA decision was formally drawn to the Court's attention by the applicant's senior counsel, with the consent of the solicitors for the RTA, on 7 November 2011, and the question of costs in this matter must now be resolved in accordance with the principles stated by the Court of Appeal in that decision.
It is convenient for me to deal, firstly, with what those principles are.
The Law of Costs in Class 3
The starting point on costs is the fundamental principle laid down by the High Court in Latoudis v Casey ('Latoudis') [1900] HCA 59, (1990) 170 CLR 534 that costs are designed to be compensatory and not punitive. The Courts, in addition, have accepted that compulsory acquisition compensation cases are in a litigation category of their own.
Dillon CA was an appeal from my third and final judgment in a series of cases between those parties - Dillon v Gosford City Council (No 3) [2010] NSWLEC 168. On the question of costs, I applied in that judgment the principles which I regarded as then well established by the authorities. As I said (at [59] -[60]):
The general principles to be applied are well known, and have been set out in many judgments of this court. I summarised them in Ray Fitzpatrick Pty Ltd v Minister for Planning (No.5) [Fitzpatrick No 5] [2008] NSWLEC 183 at [31]-[45], and applied them in that case, and, e.g., in BMP Manufacturing Pty Ltd v Roads and Traffic Authority of New South Wales (No.2) ["BMP"] [2009] NSWLEC 41. (See also the cases I reviewed in BMP, at [12]ff, and Biscoe J's recent second judgment in the Taylor litigation - Taylor v Port Macquarie-Hastings Council ["Taylor"] [2010] NSWLEC 153, especially at [16]-[22]).
They commence with the propositions that (1) costs are awarded by way of compensation and not punishment (["Latoudis"]); (2) compulsory acquisition cases are not "ordinary litigation", concerning as they do a unilateral exercise of executive power against the property rights of citizens (Banno v Commonwealth ["Banno"] (1993) 45 FCR 32; 81 LGERA 34); and (3) "there needs to be a strong justification for awarding costs against an applicant" (see Pastrello v Roads and Traffic Authority of New South Wales ["Pastrello"] [2000] NSWLEC 209; 110 LGERA 223).
The Court of Appeal set aside only part of the costs order(s) I had made in Dillon No 3.
In Halley No 3, Pepper J had respectfully departed from my reasoning in Dillon No 3, and from the reasoning of Biscoe J in both Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority ("Walker") [2010] NSWLEC 27, and Taylor (cited above, but now reported at 175 LGERA 189). I had cited Taylor, but not Walker, in Dillon No 3, but Pepper J had cited both in Halley No 3.
Biscoe J had expressed the view that, in class 3 cases under the Land Acquisition (Just Terms Compensation) Act 1991 ('JTC Act'), the costs discretion "tilted" in favour of dispossessed land owners (Walker at [34]), and that "different principles" were justified, in apportioning costs in acquisition cases, by the interference with an individual's rights, the "confiscating nature" of such acquisitions, and the "statutory entitlement to just compensation" (Taylor at [19]). His Honour set out in Walker, in exemplary fashion (at [16] - [22]), a series of principles, quoting extensively from authorities referred to above.
Under s 98 of the Civil Procedure Act 2005 ('CPA') costs are, subject to any specific court rule or statutory provision, "in the discretion of the court". There are no rules in this Court, nor in the Uniform Civil Procedure Rules 2005 ('UCPR') relevant to compulsory acquisition matters of this type, other than those UCPR which deal with Offers of Compromise (in Part 20 Div 4 and Part 42 Div 3, especially UCPR 42.14-42.15A). However, the Court of Appeal specifically held in Dillon CA that UCPR 42.1 ("costs follow the event") is an "excluded provision" (cl 3 of UCPR Sch 1), and so does not apply to proceedings in class 3 of this Court's jurisdiction.
While minds may continue to differ on the principles which the Court should apply, the Court of Appeal has spoken, and no relevant amendments have since been made to applicable statutes or rules. Each case will continue to be decided on its individual facts. As Jagot J, when a judge of this Court, pithily observed in Serbian Cultural Club 'St Sava' Inc & Serbian Cultural Club Limited v Roads and Traffic Authority of New South Wales (No 2) ("Serbian") [2008] NSWLEC 78, there are "no hard and fast rules" or "automatic results" in class 3 costs matters.
The post-Dillon CA regime was recently discussed and applied by Biscoe J in Al Amanah College Inc v Minister for Education and Training (No 4) ('Al Amanah') [2012] NSWLEC 26, and by me in Prasad v Minister Administering the Environmental Planning and Assessment Act 1979 (No. 2) ("Prasad") [2012] NSWLEC 59.
I shall not repeat here my detailed analysis in Prasad of the relevant authorities, save to note that (at pars [42] - [65]) I discussed Serbian, Banno, Pastrello, Overton Investments Pty Ltd v The Minister Administering the Environmental Planning and Assessment Act 1979 [2001] NSWCA 137; (2001) 113 LGERA 439, Yakas v Roads and Traffic Authority (NSW)(No 2) [2004] NSWLEC 589; (2004) 139 LGERA 116, Simpson v Bagnall [2008] NSWLEC 79, Fitzpatrick (No 5), South Eastern Area Health Service v King [2006] NSWCA 2, Leichhardt Municipal Council v Green [2004] NSWCA 341, BMP, Dillon, Al Amanah, Taylor, Walker, and Monaghan v Holroyd City Council [2009] NSWLEC 112; (2009) 167 LGERA 321.
In specific reference to Calderbank principles, I also referred, in Prasad, to Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No. 2) ("Kooee")[2008] NSWCA 85. (See now, on Calderbank issues, SWM Financial Services Pty Ltd v Lloyd (No 2) [2012] NSWSC 202, cited with approval by Biscoe J in Reysson Pty Ltd v Roads and Maritime Services (No 2) [2012] NSWLEC 91).
Before I apply the costs principles to the facts and circumstances of the present case, I should now set out those facts and circumstances in greater detail.
A chronological history of the matter
The subject lands were acquired by a notice of acquisition gazetted 31 October 2008. The acquisition involved 6.86ha of a holding comprising 72.823ha.
The statutory offer made by the RTA on 1 December 2008 was for $650,000 for market value, plus $74,828 for various specified disturbance items, based on a valuation report prepared for the Valuer-General by Andrew Hood of Tim Haffner and Associates Pty Ltd.
The Haffner valuation noted that the acquisition took "generally the higher land along the majority of the levee bank beside the river", but that the property would retain its highest and best use as a grazing property. It noted that the acquisition "will have a significant impact upon the residue property, particularly with regard to noise and visual impact". The valuation was made as at 31 October 2008 being the date upon which the notice of acquisition was published in the gazette. The valuer found no "directly comparable sales evidence", but analysed eight sales in the nearby area and, controversially, a sale at Coolongolook near Bulahdelah.
Mrs Brock raised a large number of issues with the valuer and relied upon a supporting valuation from Robertson & Robertson for $1.529M. The applicant's valuer arrived at a "before" valuation of $2.65M, and an "after" valuation of $2M. He allowed $74,028 for disturbance out of total claims advanced by Robertson & Robertson of $665,200, including $440,000 for the riverside boundary fence. Many plans and photographs are annexed to the valuation (copies of which are annexed to two affidavits now before the Court), but the property adjustment plan, said at p20 to be annexed to the valuation, does not appear in either annexure.
On 25 February 2009, Mrs Brock's solicitor, Andrew Harrison of Bilbie Dan, emailed Mr Woods of the RTA indicating that he had been instructed to file an objection in the Court, but offering to accept $1.2M "all inclusive".
The objection proceedings were commenced, in this Court's class 3 jurisdiction, on 27 February 2009.
On 24 March 2009, the RTA paid Mrs Brock an advance of $668,007.89, being 90% of the Valuer General's ('VG') determination of $724,828 (i.e. $651,625.20), plus statutory interest up to the date of payment (24 March 2009 - $16,382.69). That advance was mostly spent by Mrs Brock on acquiring the neighbouring Tier land, the purchase and operation of which is discussed in my earlier judgment, and on funding her costs on the substantive hearing.
The RTA and Mrs Brock also reached agreement on 20 July 2009 for the RTA to implement, at its expense, property and irrigation "adjustment plans" worth $334,700 for the benefit of the residue land. Some elements of those adjustment works overlapped with some elements of Mrs Brock's claim as argued in the proceedings. She also contended that some of the work done by the RTA pursuant to that agreed package e.g. some fencing work, proved to be inadequate or unsatisfactory for her purposes.
Acting Commissioner Miller made an on-site visit on Tuesday 21 July 2009.
On 17 December 2009, the hearing was fixed to commence on 10 May 2010.
As the hearing approached Mrs Brock was claiming a total amount of approximately $1.5M, i.e. almost $900K in addition to what the RTA had already paid to her.
The parties' respective valuers finalised their joint report on 12 April 2010, and it was filed on 21 April 2010.
On 30 April 2010, Henry Davis York ("HDY"), solicitors for the RTA, forwarded to Bilbie Dan a formal "offer of compromise", in accordance with Parts 20 and 42 of the UCPR, to remain open until 2pm Friday 7 May 2010. The total compensation payment offered was $550,000, exclusive of statutory interest and costs, but inclusive of the advance.
On 3 May 2010, Bilbie Dan offered to accept $450,000 plus costs in addition to what Mrs Brock had already been advanced. The offer was expressed to be on a Calderbank basis, and to remain open for acceptance until 4pm on Friday 7 May 2010.
On 4 May 2010, following a telephone discussion with HDY, Bilbie Dan wrote to them to indicate that Mrs Brock was prepared to settle her claim for an additional payment of $450,000, inclusive of interest, but not of costs. That would bring the total amount of compensation to $1.118M. The offer was again stated to be on a Calderbank basis, and on the basis it was to be "plus costs as agreed or assessed", so avoiding the costs of the hearing. The offer was open for acceptance until 10.30am on Monday 10 May.
On 5 May 2010, HDY wrote to Bilbie Dan enclosing a revised formal "offer of compromise", open until 10.30am on Monday 10 May, increasing the total compensation payment from $550,000 to $600,000.
By letter dated 6 May 2010, HDY made it "absolutely clear" that the property adjustments carried out on the applicant's property did form part of the compensation offered, but was in addition to the total compensation in the offer of compromise.
The hearing commenced with an all-day site visit on Monday 10 May 2010, and continued in the courtroom on 11-14 May.
At the hearing, Mrs Brock sought from the Court the following items of compensation (see [9] of the earlier judgment):
(a) Market Value - s 55(a), (c) and (f) item (on the basis of a total severance, or $835,000
on a restricted access basis) $1,110,000
Disturbance - s 55(d) and s 59 items
(b) Eastern Fence maintenance $214,122.07
(c) Stock Watering system maintenance/replacement $30,828.46
(d) Legal fees (s 59(a)) $16,300
(e) Valuation fees (s 59(b)) $12,750
(f) Erection of additional cattle yards on the northern parcel (including power and
water (s 59(f)) $43,000
(g) Air conditioning of Brock residence (including rewire) (s 59(f)) $12,790
(h) Replacing bees and hives (s 59(f)) $1,400
(i) Modification of internal fencing to reorient the farming operation on a north-south basis
(s 59(f)) $5,000
(j) Financial advice (s 59(f)) $330
(k) Signage and warning lights at stock crossing sites on both Glenarvon Road and
the new road (s 59(f)) $55,000
The RTA contended that Mrs Brock be awarded, in addition to disturbance, $180,000 for market value, and $140,000 for injurious affection and severance ([12]). It did not contest disturbance items (d), (e), (h) and (j), giving an agreed disturbance figure of $30,780 ([10]). In the judgment, Commissioner Miller and I awarded her an additional $600 for road signage ([97]), but disallowed all other contested disturbance items.
The essential difference in valuation approach evident at the hearing was that Mrs Brock claimed that her land was "rural residential", while the RTA said it was a small operating farm with a house on it ([14]).
Judgment was reserved on 14 May, and delivered on 29 November 2010.
As already noted above ([2]), the Court arrived at market value compensation of $437,087, and awarded disturbance of $31,380 ([131] - [134]).
On 16 December 2010 Mrs Brock filed a Notice of Intention to Appeal.
The Court's orders were not formally entered until 31 March 2011.
The NOMs now before the Court were filed in May-June 2011, and the applicant's Notice of Appeal was also filed during June 2011.
Negotiations followed ([7] above, and [92] ff below).
The NOMs were heard on 1 August 2011, and the further submission regarding the decision in Dillon CA was received on 7 November 2011.
The Question of Overpayment
The total amount payable to the applicant by the respondent under the Court's orders is $480,020.25, being the two amounts the Court awarded ([2] and [46] above), plus $11,553.25 in statutory interest up to the date of the advance payment.
The difference between the advance payment ([30] above) and the total compensation payable under the orders is, therefore, $187,987.64, comprising excess compensation in the amount of $183,158, and excess interest paid in the amount of $4,829.64.
It is not unprecedented that a claimant is awarded by the Court an amount lower than the amount paid to it by the acquiring authority, in advance, pursuant to s 48 of the JTC Act, which relevantly provides (emphasis added):
48 Advance payments of compensation etc
(1) An authority of the State may, at any time after land is acquired, make an advance payment of compensation to any person who the authority considers is entitled to the compensation.
...
(4) A person who receives an advance payment of compensation which exceeds the amount of compensation to which the person is entitled must repay to the authority of the State the amount of the excess.
...
(5) Any advance or other payment of compensation to a person not entitled to the compensation must be repaid to the authority of the State that made the payment.
(6) Any amount due to an authority of the State under this section may be recovered as a debt in any court of competent jurisdiction.
Pursuant to those provisions, the RTA sought, on 9 March 2011, repayment by Mrs Brock of the "debt" owed to it in the form of the overpayment.
I shall now address the question of whether this Court can deal with the recovery of this "debt".
The Jurisdiction to Order Repayment
In Alinta LGA Ltd (formerly The Australian Gas Light Company) v Mines Subsidence Board [2008] HCA 17; (2008) 244 ALR 276, five judges of the High Court looked at the role and powers of this Court in class 3 matters generally. After setting out s 16 in the context of an observation that this is "a superior court but of limited jurisdiction", their Honours said (at [11]):
The powers of the LEC when hearing and disposing of appeals in Class 3 of its jurisdiction are described by s 39. They include the following. First, in accordance with s 39(3), the "appeal" is conducted by way of a de novo rehearing; fresh evidence or evidence in addition to, or in substitution for, the evidence given on the making of the decision under appeal may be received. Secondly, for the purposes of hearing and disposing of the "appeal", the LEC has all the functions and discretions which the person or body whose decision is under appeal had in respect of "the matter the subject of the appeal" (s 39(2)). Thirdly, the decision of the LEC on the "appeal" is deemed, where appropriate, to be the final decision of the relevant person or body and shall be given effect accordingly (s 39(5)). Proceedings in Class 3 of the LEC's jurisdiction are conducted with as little formality and technicality as possible (s 38(1)). The LEC is not bound by the rules of evidence (s 38(2)) and may obtain the assistance of other persons (s 38(3)), such as an assessor.
Determination of any objection lodged with this Court to a compensation notice from a resuming entity is clearly within the class 3 jurisdiction of this Court, under the specific terms of s66 of the JTC Act, and ss19(e), 24 and 25 of the Court Act, and s 22 of the Court Act provides (emphasis added):
22 Determination of matter completely and finally
The Court shall, in every matter before the Court, grant either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by that party in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters may be avoided.
In National Parks and Wildlife Service v Stables Perisher Pty Ltd (1990) 20 NSWLR 573; (1990) 71 LGRA 286, the New South Wales Court of Appeal held that, despite the terms of s 22, this Court had no "pendent" jurisdiction.
Section 16(1A) was inserted into the Court Act by the Local Government (Consequential Provisions) Act 1993, and commenced on 1 July 1993, and provides as follows (emphasis added):
16 Jurisdiction of the Court generally
...
(1A) The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act.
...
It is to be noted that s 16(1A) expressly confers on this Court jurisdiction to hear and dispose of matters over which it would not have jurisdiction, but for their being ancillary to a matter within jurisdiction, whereas s 22 confers a power to grant an appropriate remedy, in respect of a "properly brought" claim, where that relief assists in achieving finality to the litigation. The distinction between the two concepts was noted by Spigelman CJ in Newcastle City Council v Caverstock Group Pty Ltd ("Caverstock") [2008] NSWCA 249; (2008) 163 LGERA 83 (at [48]), relying upon Gibbs J in Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7; (1981) 148 CLR 457 (at 489).
The RTA argues in the present matter that this Court has jurisdiction to make an order for repayment, by virtue of s 48 (5) and (6) of the JTC Act, and s 16(1A) of the Court Act.
The role and scope of s 16(1A) has arisen for discussion in a number of cases since its enactment in 1993, and it is appropriate to discuss, and quote in regrettable detail, the relevant line of authority established. The nuances in judicial reasoning on s 16(1A) are of some significance to this case.
In NTL Australia Pty Ltd v Minister for Land and Water Conservation("NTL") [2001] NSWLEC 5; (2001) 112 LGERA 403, Pearlman Ch J noted some cases decided in the period 1993-2001, in these terms (at [27]):
Nelson v Ballina Shire Council (1993) 80 LGERA 271 - held that a council's contractual obligation to carry out certain roadworks was enforceable under s 16(1A) as a matter ancillary to the enforcement of a duty imposed on the council by s 94(3) of the Environmental Planning and Assessment Act 1979;
Figgis & Jefferson Pty Ltd v Mosman Municipal Council (1993) 81 LGERA 423 - held that, in a merit building appeal against a council's refusal of an application for approval of off-street parking, s 16(1A) did not enable the Court to exercise a primary administrative discretion to grant a permit under the Roads Act 1993 for a footpath crossing;
Mitchell v Waugh and Anor (1993) 82 LGERA 44 - held, in a claim for relief under the Encroachment of Buildings Act 1922, that s 16(1A) conferred jurisdiction upon the Court to make orders under the Dividing Fences Act 1991, but not to deal with claims based upon trespass and nuisance;
Butland v Cole (1995) 87 LGERA 122 - held that a claim for damages based upon trespass (as distinct from being based on an encroachment) was not ancillary to a claim for relief under the Encroachment of Buildings Act 1922, and s 16(1A) did not confer jurisdiction on the Court in respect of such a claim;
N Stephenson Pty Ltd v Roads and Traffic Authority of New South Wales (1994) 83 LGERA 248 - held that s 16(1A) did not confer jurisdiction upon the Court to hear and dispose of a claim for damages under s 96 of the Public Works Act 1912 as ancillary to a claim for compensation under the Land Acquisition (Just Terms Compensation) Act 1991;
Duncan v Moore and Ors (1999) 103 LGERA 312 - held that s 16(1A) did not confer jurisdiction upon the Court to hear and dispose of claims for breaches of the Parliamentary Electorates and Elections Act 1912 and the Electricity Supply Act 1995 as ancillary to a claim for a breach of the Environmental Planning and Assessment Act 1979 by reason of a failure to obtain development consent.
In Nix and Dunn v Pittwater Council ("Nix") (1994) 84 LGERA 199, there were proceedings in both classes 1 and 4, including a cross-claim for damage for nuisance. At the same time there was on foot in the Supreme Court a separate action in nuisance. Gleeson CJ said (at 203ff):
The question whether the narrower nuisance claim, as sought to be propounded in the proposed cross-claim, was a matter ancillary to the matters the subject of the class 4 and class 1 proceedings within the meaning of s 16(lA), is an artificial question by reason of the artificial nature of the narrower claim in nuisance.
...
The purpose of the legislature in enacting s 16(lA) was to reduce the number of cases which might give rise to a multiplicity of proceedings by amplifying, to some extent, the jurisdiction of the Land and Environment Court. However, the question of what might involve inappropriate multiplicity of proceedings, and the question of the extent of the intended amplification, give rise to an issue of the kind that was agitated in the present appeal.
...
The New South Wales legislature used, in s 16(lA), the word "ancillary" rather than "associated". In his Second Reading Speech, the minister introducing the amending legislation spoke of removing the necessity for "genuinely ancillary proceedings" to be removed to another court: (NSW, Legislative Assembly, Hansard, 11 March 1993, at 725).
The relationship between two matters referred to in s 16(lA) is clearly intended to be a narrower one than that of association. The relevant dictionary meanings given to "ancillary" are incidental, accessory, or auxiliary: Macquarie Dictionary. The word derives from the Latin "ancilla", a hand-maid: see the discussion in Koala Motels Ply Ltd v Chief Licensing Inspector (1977) 18 ALR 12.
The matter the subject of the equity proceedings in this case could not reasonably have been regarded as ancillary to the matters the subject of the Land and Environment Court proceedings. It may be that the narrowing of the issues in the proposed cross-application for nuisance, and the elimination of two parties, who in the equity proceedings were proper and arguably necessary parties, amounted to an attempt to overcome that problem. However that may be, Bannon J was right, on discretionary grounds, to refuse to permit the artificially and inappropriately narrowed nuisance claim to proceed before him.
In Frank Calabro Pty Ltd v D & K Maaka ([1998] NSWLEC 11), at first instance, Bignold J found that the Court lacked jurisdiction to determine a challenge to a building approval on the basis of its lapsing. He observed:
Secondly I would note that no argument was advanced in the present case that the Applicant's claims properly fell within this Court's "ancillary jurisdiction" expressly conferred by s16(1A) of the Land and Environment Court Act 1979. Despite the absence of argument, and because I am conscious of the serious implications of a conclusion that, after the case has been fully presented, the Court lacks jurisdiction to entertain the case, I have myself examined the question. However in the light of the albeit limited judicial exposition of s16(1A) I do not think that it can be reasonably concluded that the Applicant's claims founded on the effect of s315 of the Local Government Act 1919 on the 1991 Building Approval, qualify as "a matter that is ancillary to a matter that falls within its jurisdiction" within the meaning of s16(1A). This conclusion, is I think, inevitable given my conclusion that the Applicant's claims are entirely (or fundamentally) founded upon s315 of the Local Government Act 1919. In these circumstances it would be a material misdescription to regard these claims as raising an "ancillary matter". They are, instead, the fundamental matter raised by the proceedings.
On appeal ([1999] NSWCA 132), Stein JA (Meagher and Powell JJA agreeing without comment) found that the case was "squarely within the jurisdiction of the court" and said (at [16]-[17]):
16. ...In considering the issue within jurisdiction, I cannot appreciate how it can be concluded that the question of whether the pre-existing approval under the 1919 Act had lapsed was not `a matter that is ancillary to a matter that falls within its jurisdiction', s 16(1A) of the Land and Environment Court Act. It is clearly ancillary. Again, it may be that his Honour was lead into error by his mistaken catagorisation of the proceedings as entirely founded on s 315 of the Local Government Act 1919.
17 Even before the inclusion of s 16(1A) in the Land and Environment Court Act, it was open to the Land and Environment Court to determine matters which were incidental to matters within the court's jurisdiction, see for example, Tweed Byron Aboriginal Land Council v The Minister (1990) 69 LGRA 269 at 272 - 273. Although the decision was reversed on appeal, the question of jurisdiction of the court to determine matters incidental to a matter within jurisdiction was never doubted.
In NTL, Pearlman Ch J adopted (at [28]) the following propositions, drawn from the authorities she had summarized (in [64] above):
(a) This Court has jurisdiction to decide all questions of law and fact which it needs to decide in order to deal with a claim which is properly within its jurisdiction (National Parks v Stables Perisher);
(b) That jurisdiction extends to all matters that are a step in the cause of action which this Court does have jurisdiction to determine, in the sense that those matters are incidental to the matter in which the Court has jurisdiction (Minister for Minerals and Energy v Vaughan-Taylor [(1991) 73 LGRA 115]);
(c) Although s 16(1A) amplifies to some extent the jurisdiction of this Court (Nix and Dunn v Pittwater Council), it operates only in relation to a matter which is ancillary, that is, incidental, accessory or auxiliary (Nix and Dunn v Pittwater Council). I respectfully adopt, in this connection, the statement of Talbot J in Duncan v Moore at p 319 that "... the matters brought within the Court's jurisdiction by s 16(1A) are only those matters which must be resolved as part of an accessory or ancillary subservient function in the course of determining the matter within jurisdiction";
(d) Section 16(1A) does not operate to confer jurisdiction on this Court in relation to a matter which is separate to and independent of the matter properly within jurisdiction, such as a claim for damages for tort or trespass (eg Mitchell v Waugh).
In Scharer v New South Wales ("Scharer") [2001] NSWCA 360; (2001) 53 NSWLR 299 (10 October 2001), Stein JA (Hodgson JA agreeing) held that a claim for damages was clearly ancillary to the enforcement of a right of way (under the National Parks and Wildlife Act 1974). His Honour said (at [46]-[52]):
46 This leaves for consideration the claim for damages sought in order D. In this respect, I am unable to see why it cannot be concluded that it is also part of the enforcement of the same right. Thus the Land and Environment Court would have jurisdiction. It is not deprived of jurisdiction by reason of the majority decision in Stables Perisher. The ratio of that decision (Gleeson CJ and Meagher JA) is that the Land and Environment Court does not have jurisdiction to hear a claim in tort for general damages, see 580G - 581A. In Stables the main claim in the proceedings was in negligence for general damages (see 575B-C).
47 Further, the introductory words in s 20(2) that the Land and Environment Court has the `same civil jurisdiction as the Supreme Court would, but for section 71' must be given cognisance. If it were not for the LEC Act, the Supreme Court would undoubtedly have jurisdiction to make all of the orders sought, including damages.
48 There is a further reason why the Land and Environment Court could entertain the subject damages claim. The enactment of s 16(1A) of the LEC was the legislative response to Stables Perisher. This provides:
The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act.
49 Assuming for the moment that the Land and Environment Court does not have the power in these proceedings to award damages as part of the relief available to enforce the right, it seems to me that s 16(1A) fills the void. Damages are plainly ancillary to the matters which fall within jurisdiction; the existence of the right and its enforcement by injunctive orders or declaratory relief.
50 Nothing in Nix persuades me from this conclusion. Nix was decided in the Land and Environment Court as a matter of discretion, which the Court of Appeal held was open to the trial judge. In obiter Gleeson CJ indicated that the claim based in nuisance sought to be filed as a cross-claim in the Land and Environment Court, could not reasonably be regarded as ancillary. That conclusion is understandable when one examines the facts involved in Nix. They are a far cry from the present situation.
51 Here the damages issue can plainly be seen as `ancillary', or, to use the words of Gleeson CJ, as `incidental', `accessory' or `auxiliary', (Nix at 205). In NTL Australia Pty Ltd v Minister for Land and Water Conservation[2001] 112 LGERA 403 at 411-413 Pearlman J comprehensively refers to the authorities on the provision.
52 It follows, in my opinion, that Santow J was correct to transfer the proceedings to the Land and Environment Court. His Honour did not need to reserve leave to the appellant to apply (in the Supreme Court) to deal with any outstanding claim for damages following adjudication in the Land and Environment Court. This was unnecessary and, on one view, not available to him.
In Neighbourhood Association DP 285121 v Murray Shire Council ("Murray") [2001] NSWLEC 247; (2001) 117 LGERA 95 (29 October 2001), Pearlman Ch J, sitting in class 4, noted (at [18] - [22]):
18. It was held in National Parks and Wildlife Service and Anor v Stables Perisher Pty Ltd (1990) 71 LGRA 286 that the resolution of a claim for general damages in negligence is beyond the jurisdiction of this Court, or, in other words, the jurisdiction to hear and dispose of such a claim is not conferred upon this Court by s 20(2).
19. Since National Parks v Stables Perisher, the Court Act has been amended by the insertion of s 16(1A) which provides as follows:
16(1A) The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act.
20. The precise ambit of jurisdiction conferred by s 16(1A) has been the subject of a number of decisions of this Court and of the Court of Appeal since the section was enacted in 1993, many of which are referred to in NTL Australia Pty Ltd v Minister for Land and Water Conservation (2001) 112 LGERA 403 at 412 and 413. The position seems to be that s 16(1A) does not operate to confer jurisdiction on this Court in relation to a matter which is separate to and independent of the matter properly within jurisdiction (Mitchell v Waugh and Anor (1993) 82 LGERA 44). Thus, in obiter remarks in Nix and Dunn v Pittwater Council (1994) 84 LGERA 199 at 205, Gleeson CJ stated that a claim for damages for nuisance could not reasonably be regarded as ancillary to class 4 proceedings alleging the carrying out of unauthorised earthworks in breach of the Environmental Planning and Assessment Act 1979. On the other hand, in Scharer v State of New South Wales [2001] NSWCA 360, it was held by Stein JA with whom Hodgson JA agreed (Davies AJA dissenting) that a claim for damages for obstructing a right of way in a national park was ancillary to proceedings to be taken in this Court in its exclusive jurisdiction to enforce that right of way.
21. In this case, the applicant claims damages for negligence arising out of the installation of the sewerage system. In my opinion, this claim as framed is a general claim for damages in tort, and it is not ancillary to the applicant's second claim, which arises out of alleged breaches of the development contract, and which, by virtue of s 20(2) of the Court Act, falls within the jurisdiction of the Court. Moreover, the extended jurisdiction of this Court conferred by s 16(1A) need not be relied upon by the applicant to base its claim for damages for breaches of the development contract, because the power to award such damages is expressly provided for in s 20(2)(d) of the Court Act.
22. Hence, I conclude that, so far as the class 4 application comprises a claim for damages for negligence, it should be struck out, and it will be necessary, if the whole claim is not otherwise summarily dismissed, to consider precisely what parts of the class 4 application and the points of claim fall into that category.
In N & S Oliveri Pty Ltd v Fairfield City Council [2002] NSWLEC 35, 121 LGERA 90 (8 May 2002), Cowdroy J summarised the relevant authorities on damages thus (at [34] - [37]):
34. The decisions referred to above fall within two distinct categories. First, there are those cases where an applicant takes action to recover damages arising out of a common law claim which does not flow directly from the breach of the relevant environmental or planning law. The authorities establish that such a claim is not within the jurisdiction of this Court nor within its ancillary jurisdiction as conferred by s 16(1A) of the EP&A Act because it constitutes a separate claim. Thus in Nix the obiter remarks of Gleeson CJ (at p 203-204) relating to the limit of the Court's jurisdiction were made in reference to a cross claim for nuisance. In Neighbourhood Association DP 285121 the Chief Judge made her finding that this Court had no jurisdiction in respect of a claim for tort. In each of these authorities the claims arose out of the common law and was not ancillary to the breach of the environmental or planning law.
35. The second category of cases are those in which damages arise directly as a consequence of the breach of a statute in respect of which this Court has jurisdiction. In Scharer Stein JA held that this Court had jurisdiction to hear such a claim on two possible grounds. The claim could be determined because it constituted "...part of the enforcement of the same right..." (i.e. within s 20(2) of the LEC Act) arising in consequence of the breach of the environmental statute, or alternatively because it was ancillary within the terms of s16 (1A) of the LEC Act. It should be noted that in Stables Perisher, the Court of Appeal was then of the opinion that s 22 of the LEC Act could not extend the jurisdiction of the Court to award damages.
36. Sharer thus clarifies the power of this Court to award damages. If a claim can be categorised as one which constitutes part of the enforcement of the right arising out the breach of a planning law or if such claim is ancillary to such breach, the Court possesses the requisite jurisdiction to hear the claim.
37. The imposition of an invalid condition in a planning consent constitutes a breach of the EP&A Act (see: Building Owners and Managers Association of Australia at p 72), and the claim for damages arises directly in consequence of such breach and is incidental thereto. The circumstances are indistinguishable from Scharer but distinct from NTL, Nix and Neighbourhood Association DP 285121. The Court therefore determines that the claim for damages is one which may be entertained only by the Court pursuant to s 16(1A) of the LEC Act.
In Wollong Pty Ltd v Shoalhaven City Council ("Wollong")[2002] NSWLEC 164; (2002) 122 LGERA 331 (4 October 2002), Talbot J, in dealing with a claim for interest on the amount of a compensation advance to be refunded, held that this Court could not order payment/repayment, because it had decided, within jurisdiction, the amount properly payable, under s 66 of the JTC Act. His Honour said (at [28]-[32]):
28. Section 16(1A) of the Land and Environment Court Act 1979 ("the Court Act") provides no assistance in the present case as the Court, having finally disposed of all questions of compensation, is deprived of any capacity to determine a matter ancillary to an outstanding matter that falls to be determined within jurisdiction. 29. In the Court's view, the terms of s 48(6) of the Just Terms Act provide the most persuasive authority for determining that the intention of the legislature was to enable an authority of the State to recover an overpayment as a debt in another court of competent jurisdiction. The jurisdiction given to the Land and Environment Court under the Just Terms Act is, as stated earlier, to hear and dispose of the person's claim for compensation. No express jurisdiction is given to the Court whereby it may enforce any determination of compensation by ordering recovery against the resuming authority. Section 68 provides that payment of compensation in respect of matters before the Court is to be made in accordance with decision of the Court. Once the Court has made its decision it has disposed of the person's claim for compensation within jurisdiction. Enforcement of payment, or any other rights which arise as a consequence of the decision of the Court, do not, therefore, fall within jurisdiction of this Court.30. The Court is not satisfied it has jurisdiction to make an order for recovery of the overpayment. Hence it follows that there is no jurisdiction to order the payment of interest on that overpayment. In reaching this conclusion the Court has had regard to s 19(e), s 24, s 25 and s 69A of the Court Act. None of these provisions take the matter any further. They reinforce the limited extent of the Court's jurisdiction. 31. Section 66(2) of the Just Terms Act merely authorises the Court to hear and dispose of the person's claim for compensation. It is, therefore, doubtful that the Court can enforce an order for payment of compensation. It is not necessary for me to decide this point. However, the Court does not have inherent jurisdiction to make such orders as it deems fit, unless there is an express statutory authority to do so (DJL v The Central Authority[2000] HCA 17; (2000) 201 CLR 226). 32. The application for payment of interest on the amount of compensation overpaid by the respondent to the applicant cannot be entertained in this Court. Even if the claim is within jurisdiction, the Court is not satisfied that there is a statutory or common law right for recovery of interest in the circumstances.
In Grant v Brewarrina Shire Council [2003] NSWLEC 41 (11 November 2002), Lloyd J dealt with claims in class 4 for two declarations and an award of damages, concerning orders under s 121B of the EPA Act. His Honour (at [7]-[10]) recited what s 16(1A) provides, and what Scharer, Murray and Oliveri had decided, before saying (at [11]-[13]):
11 In applying the above-mentioned authorities to the present case, it is clear that the claim for declaratory relief falls fairly and squarely within this Court's jurisdiction described in s 20(2) of the Land and Environment Court Act; that is, it is a claim to make declarations of right in relation to a right, obligation or duty in the exercise of a function conferred or imposed by planning or environmental law. By sub-s (3) of s 20 of the Land and Environment Court Act the provisions of the EP&A Act 1979 are a planning or environmental law.12 The actions of the council in purported reliance on its powers under s 121ZJ of the EP&A Act which in turn are dependent upon a purported exercise of its powers under s 121B of that Act, are therefore matters that fall fairly and squarely within s 20(2) of the Land and Environment Court Act, so that the present claim for damages is ancillary to a matter falling within the Court's jurisdiction.13 In other words, I hold that the Court has jurisdiction to hear and determine the claim for damages arising from the council's breach of the Act.
In Hawkesbury City Council v Dundler [2005] NSWLEC 662 (1 August 2005), Cowdroy J had to consider making "ancillary orders" requiring sale of the property the subject of "clean up" proceedings. His Honour, in the context of s 16(1A), referred to Scharer, NTL, and Nix, and said (at [41]-[44]):
41 The above authorities demonstrate that despite the existence of s 16(1A), the Court is not invested with broad powers to make orders relating to ancillary matters. There must be a step in the cause of action for s 16(1A) to apply. Section 16(1A) does not operate to confer jurisdiction on the Court in respect of a separate and independent matter.42 In these proceedings compliance with the first order and second order will be achieved by a restraining order prohibiting occupation of the premises until the premises are fit for occupation and, secondly, by a clean up of the premises. A sale of the premises is not a necessary step in that process. That is, such sale is not a step in the cause of action in which this Court has jurisdiction. 43 It might be convenient for the first respondent to have this Court make an order for the sale of the premises and it might be convenient for the Council to recoup its costs resulting from such sale. However those considerations are insufficient to render a sale of the premises a matter which is ancillary to the essential proceedings before the Court. In any event the costs of the Council in cleaning up the premises are recoverable by statute: see 678(6) of the Local Government Act 1993. The first respondent retains the power to sell the property at any time. That power should be exercised if she considers this to be the appropriate course. It is not, however, a matter within the ancillary jurisdiction of the Court.44 Section 20(2) of the Court Act similarly does not vest jurisdiction of the Court since it is not necessary for a sale of the property to be effected to enforce the obligation conferred by an environmental planning law. For these reasons the Court determines that it does not possess the jurisdiction to make an order for the sale of the premises.
In Woollahra Municipal Council v Baranov [2006] NSWLEC 97; (2006) 114 LGERA 96 (2 March 2006), Jagot J relied in part on s 16(1A) when considering a claim that the respondent pay the applicant an amount of money on account of the costs the applicant incurred in carrying out some orders of the court regarding sanitisation of a property (see [27]).
In Arnold v Minister Administering the Water Management Act 2000 & Ors [2007] NSWLEC 531; (2007) 157 LGERA 379 (21 December 2007), Lloyd J dealt with a number of claims including for declarations and orders for compensation (see, e.g., [15]). The parties were in dispute about the effect of s 16(1A) on the subject claims, and his Honour said (at [81]-[86]):
81 The case of Nix & Dunn v Pittwater Council (1994) 84 LGERA 199 concerned an appeal against an interlocutory decision of the Land and Environment Court dismissing a motion to add a cross-claim, and against a final judgment determining injunction proceedings and a development appeal. The background to the appeal is as follows. The Council commenced injunction proceedings in the Land and Environment Court to restrain the appellants from carrying out unauthorised earthworks. The appellants sought leave to file a cross-claim against the Council alleging common law nuisance. Such a claim had already been raised in proceedings commenced in the Equity Division of the Supreme Court at a time before s 16(1A) was inserted into the Land and Environment Court Act 1979. That section provides that the Court has jurisdiction to hear and dispose of any matter not falling within its express statutory jurisdiction, being a matter ancillary to a matter that falls therein. In asserting that the Land and Environment Court had jurisdiction to hear and dispose of the proposed cross-claim the appellants relied principally on s 16(1A) of the Land and Environment Court Act. The Land and Environment Court dismissed the motion on the ground that the main proceedings were commenced before the date when s 16(1A) came into force and on other discretionary grounds.
82 The Court of Appeal held that as a matter of discretion the decision of the Land and Environment Court was one that was both open to it and appropriate. The Court also noted, at 205, that the matter the subject of the Equity proceedings could not reasonably be regarded as ancillary to the matters the subject of the Land and Environment Court proceedings.
83 There is nothing in the language of the Land and Environment Court Act which shows an intention of the New South Wales Parliament confer jurisdiction to determine the claims made by the applicants against the Commonwealth in these proceedings. None of the claims against the Minister or the State are in any way contingent upon the claims made or the relief sought against the Commonwealth. Resolution of the claims against the Commonwealth is not a necessary step to the determination of the claims against the Minister or the State.
84 Moreover, the Achieving Sustainable Groundwater Entitlements ("ASGE") Joint Programme made between the Commonwealth and the State on 4 November 2005, which was tendered during argument shows that the Commonwealth's role is to provide funding for the implementation of the NWI. The State's role is, inter alia, to help achieve the program by its contribution and conduct of the ASGE project; and the Commonwealth's role is to support the project by funding. But it is only the Minister Administering the WM Act who can make a management plan under that Act.
85 Even if s 16(1A) of the Land and Environment Court Act did confer jurisdiction on this Court to hear the claims, that provision would be invalid in so far as it was said to confer federal jurisdiction on this Court. Any such jurisdiction must be found in s 39(2) of the Judiciary Act 1903, which I have already determined in par [79] to be of no assistance to the applicants in this matter. It follows that the Land and Environment Court Act does not confer jurisdiction on this Court to determine claims made against the Commonwealth in these proceedings.
86 As I have rejected all of the grounds of jurisdiction put forward by the applicants in these proceedings, it follows that this Court lacks the power to hear the claims made against the Commonwealth.
In Caverstock (10 October 2008), it had been common ground ([49]) among the parties involved that this Court could not order repayment of overpaid s 94 contributions in the event of a class 1 appeal against the amount succeeding, but in a judgment, with which Bell JA and Handley AJA concurred without comment, Spigelman CJ said (at [50] - emphasis mine):
50 The situation that has arisen is somewhat unusual in that payment has been made pursuant to a condition before its content has been finally determined. It is clearly desirable, in the interests of avoiding further proceedings, that the Land and Environment Court should be able to determine whether or not a person who has made a payment pursuant to a condition of a consent which is challenged is entitled to a refund and, if so, how much. Although the legal principles involved in such proceedings are not within the usual jurisdiction of that Court, such an issue is so clearly related to the issues before the Court that they should be resolved together. It may be that the requisite jurisdiction is conferred by s 16(1A) of the Land and Environment Court Act, but that section was not relied upon in these proceedings. I note that in Frevcourt [Frevcourt v Wingecarribee Shire Council [2005] NSWCA 107; (2005) 139 LGERA 140] the issue of jurisdiction under s 16(1A) was not raised.
In Gray v Macquarie Generation (No.3) [2011] NSWLEC 3 (1 February 2011), Pain J, in deciding an application for leave to amend the claim, said on the question of jurisdiction (at [88]-[90]):
88The Respondent argues that the Court has no jurisdiction under s 16(1A) (set out in par 19 above) or s 20 of the Court Act (set out in par 20 above) and cites Arnold in particular to support its submission. The Applicants assert that the Court has jurisdiction. Section 16(1) of the Court Act states that the Court has the jurisdiction vested in it by or under this or any other Act. Section 16(1A) states that the Court has jurisdiction to hear matters not falling within its jurisdiction under any other provision of the Court Act, or any other Act, if ancillary to a matter that falls within jurisdiction under the Court Act or under any other Act. Under s 20 the Court has jurisdiction to hear cases under Pt 8.4 of the PEO Act. Section 252, on which the Applicants rely, is in this part. Section 20(2) sets out the Court's powers to dispose of proceedings before it in relation to any planning or environmental law. Such laws include the PEO Act in s 20(3)(a).
89I have found that an arguable cause of action is pleaded in relation to whether there is an implied limitation in a licence condition or under the PEO Act. The FAPOC alleges an implied breach of s 115 and s 64 of the PEO Act, a statute referred to in s 20(3) as a planning and environmental law and arguably seeks to enforce an obligation or duty imposed by the PEO Act by implication, as provided for in s 20(2)(a). Alternatively whether there is a limit on statutory authority conferred by a licence is a matter essential to the determination of the primary issue of whether the Respondent has lawful authority to emit unrestricted amounts of CO 2 . I consider the Court does have jurisdiction to consider the Applicants' claim.
90The Respondent referred to Arnold where the Court of Appeal considered the extent to which the Court could exercise federal jurisdiction because of the operation of s 39(2) of the Judiciary Act 1903 (Cth) in the context of a challenge to a water sharing plan made under NSW legislation. At [75] Spigelman CJ held "that where the determination of a legal issue constitutes an essential step in the course of determining an issue that is within the jurisdiction of a court, then determination of the former will be "ancillary" to the determination of the latter." I have not determined the question of jurisdiction on the basis of whether the issues raised are ancillary to a matter within jurisdiction but note that his Honour refers to National Parks & Wildlife Service v Stables Perisher Pty Ltd (1990) 20 NSWLR 573 where Gleeson CJ stated at 582 that the Court has the power and duty to decide questions of fact or law that need to be determined in order to resolve a matter properly brought before it.
In Gracewood Australia Pty Ltd v State Water Corporation [2008] NSWLEC 292 (15 October 2008), Biscoe J summarized (at [13]) the above line of authority, as follows:
13 Section 16(1A) was enacted following National Parks and Wildlife Service v Stables Perisher Pty Ltd (1990) 20 NSWLR 573 (CA) in which the Court of Appeal held that the Land and Environment Court has no jurisdiction to deal with a claim in tort for general damages. It has been held that "ancillary" is to be read as "incidental", "accessory" or "auxiliary": Scharer v State of New South Wales (2001) 53 NSWLR 299 (CA) at 308 [51] quoting Gleeson CJ in Nix and Dunn v Pittwater Council (1994) 84 LGERA 199 at 205. Thus, there must be a "matter" falling within jurisdiction, in relation to which the s 16(1A) matter is incidental, accessory or auxiliary. In Nix, Gleeson CJ stated that a claim for damages for nuisance could not reasonably be regarded as ancillary to Class 4 proceedings alleging the carrying out of unauthorised earthworks in breach of the Environmental Planning and Assessment Act 1979. In Scharer, Stein JA (Hodgson JA agreeing) held that a claim for damages for obstructing a right of way in a national park was ancillary to proceedings in this Court in its exclusive jurisdiction to enforce that right of way. In Neighbourhood Association DP 285121 v Murray Shire Council (2001) 117 LGERA 95 at [21], Pearlman J held that a claim for damages for negligence arising out of the installation of a sewerage system was not ancillary to a claim for alleged breaches of a development contract within the Court's jurisdiction. There is also a line of authority in this Court that before s 16(1A) can be invoked there must be a matter "pending before the court" to which another matter in the same proceedings can be said to be ancillary: Porter v Hunters Hill Council (2003) 131 LGERA 144 at [60], [63], [64] and the cases there cited (Pain J). ...
Biscoe J went on to quote par [50] of Caverstock, and I note that he did not include, in his customary exhaustive but concise survey of authority, Talbot J's decision in Wollong, to which I referred (in [72] above), and to which I now return.
There is a consistency throughout this line of authority, but Wollong presents as anomalous.
As that decision was heavily relied upon by counsel for the applicant, in resisting any order for repayment, it calls for closer examination.
The respondent submits that it should not be followed, as it focused on the role of s 16(1A), and did not take into consideration the more broadly based provisions of s 22, when reading narrowly the width of the Court's jurisdiction and/or powers in such matters.
With great respect to Talbot J, I do not believe this Court should follow his decision on Wollong. For a start, I do not believe that one can dogmatically assert that the Court's work in these cases is always at an end once a figure for compensation is arrived at. There may still be work to do, which may involve "ancillary matters" to attend to, not least costs, a question usually reserved.
Prior to the passage which I quoted above (at [72]), from his Honour's judgment in Wollong, Talbot J had dealt with three relevant decisions of Handley JA, which, in my respectful opinion, derogate powerfully from the conclusion Talbot J reached in Wollong, which conclusion is of relevance in the present matter, and, in any event, given Wollong concerned a subsidiary question, namely interest on a refund, should be seen as obiter.
In Production Spray Painting & Panel Beating Pty Ltd v Newnham [No 2] (1992) 27 NSWLR 659, Handley JA (with Mahoney and Priestley JJA agreeing) concluded that the common law right of restitution meant that the courts had no residual discretion to refuse an order for repayment of moneys paid under a judgment subsequently reversed. In Haig v Minister Administering the National Parks and Wildlife Act 1974(No 3) (1996) 90 LGERA 408 ("Haig No 3"), Handley JA (with Priestley and Clarke JJA agreeing) ordered (and, indeed, quantified) a repayment of overpaid compensation, reversing a decision of Bignold J. In Lake Macquarie City Council v Luka ("Luka") [1999] NSWCA 447; (1999) 106 LGERA 94, Handley JA (with Sheller and Stein JJA agreeing) said (at [73]):
"The Court will also have to deal with any payments of compensation made following the orders of Bignold J, which will have to be refunded by the owner, and interest on the amounts to be refunded. See [Haig No 3] ..."
Talbot J in Wollong (at [20]) questioned Handley JA's assumption, in that passage of Luka, that this Court had the necessary jurisdiction, but I am content to accept Handley JA's consistency of approach to the restitution aspect, from 1992 to 1999, especially given the willingness of eminent colleagues on the Court of Appeal (Mahoney, Sheller, Priestley, Clarke and Stein JJA) over that decade to agree with him without adding any (relevant) comment.
I conclude, therefore, that this Court has at least the power (s 22), and, I believe, the jurisdiction (s 16(1A)), to make the order sought, in the present matter, for repayment to the respondent of overpaid compensation, without any need for the respondent to commence proceedings in another "court of competent jurisdiction". Under the plain words of s 48(6) of the JTC Act, the respondent clearly has a choice of forum for pursuit of its statutory right to a refund.
I hasten to add that the power and jurisdiction I find in this Court to deal with this aspect of the present case arise only because the repayment question arises as "ancillary" to a case which was brought in this Court, clearly "within jurisdiction".
Had the overpayment occurred in circumstances, other than when an objection to a determination of compensation had been brought before the Court, I do not believe this Court would have any original jurisdiction to entertain an action for recovery of the debt involved.
Should the applicant make any repayment to the RTA?
Mrs Brock deposes (affidavit 29 July 2011) that she is 52 years of age and works her small farm fulltime. It is her only source of income, which is modest, and at times, negative. (A statement from her tax agent was annexed). She is presently supporting herself, her 31 year old son (who is badly affected with allergies, lives at home, and does not work), and her husband, Terry, who was not working during 2011, due to a range of serious health problems. In earlier days Terry's income was the primary source of support for the family. Mrs Brock says that, in these straightened circumstances, any requirement that she repay the RTA's overpayment would take "many years and would place my family and myself in our current situation under immense hardship".
On 30 June 2011, HDY wrote to Mr Brock's solicitors (Exhibit B1 - see [7] above), indicating that the RTA would consent to an order that each party pay its own costs of the proceedings, provided that Mrs Brock (1) discontinued her appeal with no order as to costs, and (2) agreed to enter into consent orders which provided for an order to repay the $187,987.64 within three months.
The letter went on to propose that if, for any reason, this Court refused to make an order in relation to the repayment, the RTA's offer to agree to an order that each party pay its own costs, would become contingent on Mrs Brock's entering a deed acknowledging the overpayment, and agreeing to repay it within three months. In either event, the RTA's offer as to costs was contingent upon the discontinuation of the appeal, with no order as to costs.
Mrs Brock was given until 5pm on Friday 1 July 2011 to accept the offer - the timeframe was considered reasonable, given that the offer was made at her request.
On 7 July 2011, the RTA's solicitors wrote again in relation to the offer. They extended the period for acceptance until Monday 18 July 2011. In every other respect the second letter repeated the contents of the first. Both letters enclosed draft consent orders.
In par 24 of her affidavit, which was read on these motions, Janet McKelvey, of HDY, noted that "the Compensation Award was less than the Valuer-General's Determination, the First Offer of Compromise, the Second Offer of Compromise and the Advance Payment". She annexed to her affidavit a full copy of her letter to Bilbie Dan, dated 2 February 2011, in which she also noted that the RTA's costs of the Land and Environment Court proceedings, to 22 December 2010, were $650,499.67. She invited Mrs Brock to make an offer in respect of the costs, irrespective of the fact that she had filed, on 16 December 2010, a Notice of Intention to Appeal. (The actual Notice of Appeal was filed on or prior to 24 June 2011).
It is clear from the authorities to which I have referred that the overpayment must be refunded, that this Court has the jurisdiction to make an order to that effect, and that the Court has no discretion to decline to do so, for example, on the grounds of Mrs Brock's impecuniosity, or her pending appeal.
However, the Court must endeavour to be fair, just and reasonable towards Mrs Brock in her clearly straightened financial circumstances. She has asked the Court to give her five years to repay the excess advanced, and the RTA concedes she should be given two years to do so. I think five years is too long, but I will order that the repayment be made by 31 December 2014. If her appeal proceeds, it should be resolved by then.
I, therefore, now return to the question of costs, the relevant law on that question having been summarised above (at [13] - [23]).
Costs
The respondent no longer seeks its costs from the applicant, but the applicant still seeks an order in her favour. Her NOM makes clear that she is prepared to have any award of costs set off against any liability on her part for repayment of the advance.
At the hearing of these motions, apart from the discussion of Halley No 3, the crucial issue was the effect of the settlement offers made. There was also some debate during oral argument about the correct interpretation and application of the High Court's decision in Oshlack v Richmond River Council ('Oshlack') (1998) 193 CLR 72.
I turn, first, briefly, to Oshlack, then to the offers.
The High Court in Oshlack
The relevance of Oshlack to the submissions and argument in this matter is that it was a review by the High Court of a decision to order that there be "no order as to costs", when both sides had sought an order. This is not a matter where any "public interest" aspect of the decision is in point, and, in the end, only one side sought an order.
Gaudron and Gummow JJ dealt with this Court's statutory discretion on costs in some detail (see s 69 of the Court Act, and now s 98 of the Civil Procedure Act 2005, and their Honours' judgment at [20] -[40]), on the basis that the relevant provisions should be liberally construed, and not constrained by any judge-made rules/principles which appear to suggest their general application. Their Honours said (at [40]):
40. There is no absolute rule with respect to the exercise of the power conferred by a provision such as s 69 of the Court Act that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party. Nor is there any rule that there is no jurisdiction to order a successful party to bear the costs of the unsuccessful party. ...
The Offers of Settlement
The applicant submits that, as the respondent was on notice of the competing valuation evidence from about 10 March, and as the valuers finalised their joint report on 12 April, the offers of 30 April and 6 May came only some ten days, including two weekends, prior to the hearing, and were, therefore, very late, and set "too tight" a timeframe for her response.
If the Court concludes that the time allowed was not reasonable, the offer cannot function, in accordance with the law and any relevant rules, as a genuine "offer of compromise". The relevant rules are UCPR 42.14 - 42.15A, which provide:
42.14 Where offer not accepted and judgment no less favourable to plaintiff
(1) This rule applies if the offer concerned is made by the plaintiff, but not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim concerned no less favourable to the plaintiff than the terms of the offer.
(2) Unless the court orders otherwise, the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim:
(a) assessed on the ordinary basis up to the time from which those costs are to be assessed on an indemnity basis under paragraph (b), and
(b) assessed on an indemnity basis:
(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and
(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.
42.15 Where offer not accepted and judgment as or less favourable to plaintiff
(1) This rule applies if the offer concerned is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim concerned as favourable to the plaintiff, or less favourable to the plaintiff, than the terms of the offer.
(2) Unless the court orders otherwise:
(a) the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and
(b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis:
(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and
(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.
42.15A Where offer not accepted and judgment as or more favourable to defendant
(1) This rule applies if the offer concerned is made by the defendant, but not accepted by the plaintiff, and the defendant obtains an order or judgment on the claim concerned as favourable to the defendant, or more favourable to the defendant, than the terms of the offer.
(2) Unless the court orders otherwise:
(a) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and
(b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis:
(i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and
(ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made.
Deciding on questions of "favourable", or "successful in the litigation", requires careful consideration. As I said in BMP (at [13]), where the Court awarded $496,470, as against a VG's determination of $592,200, a claim of $2.141M, and the respondent's contention, at trial, for $350,200:
Clearly there is more for the court to consider than simple arithmetical comparison.
In this matter the statutory offer was $650,000 for market value plus $74,828 for disturbance. Mrs Brock's claim, as finally framed, was $1,110,000 for market value plus almost $400,000 for disturbance. The RTA contended for $180,000 plus $140,000 for injurious affection/severance, and $30,780 for disturbance (with "fall back" positions up to an additional $58,565). In the last minute negotiations (see [92] - [95] above), the RTA made offers in excess of what the Court ultimately awarded, but Mrs Brock was holding out for $450,000, plus the amount advanced ($668,007.89), plus costs.
All of those figures in the previous paragraph were exclusive of, and in addition to, the adjustment works worth $334,700.
When settlement was not achieved, the RTA contended at trial for $320,000 plus $30,780, and the Court awarded $437,087 plus $31,380, accepting the RTA's case in many respects.
In those circumstances, and given that no new principles of law were germane to the case, Mr Tomasetti submits (T1.8.11, p33, LL23-25) that "the RTA would be entitled to a superior or more compensatory costs order ... than the order that it in fact seeks today", and points out that, at any time prior to the delivery of my earlier judgment, Mrs Brock could have accepted the statutory offer: See Niezabitowski v Roads and Traffic Authority of NSW [2006] NSWLEC 463; (2006) 147 LGERA 417, Evangelakos v Roads and Traffic Authority of New South Wales [2006] NSWLEC 514, Ward Richard Geoffrey v Roads and Traffic Authority of New South Wales [2007] NSWLEC 405, Serbian, and Ray Fitzpatrick Pty Limited v Minister for Planning (No 4) [2008] NSWLEC 161.
On the other hand, Mr Webster submits (T1.8.11, p 40, LL 33-35) that "despite my friend's submissions about their success in these proceedings, they still did not have the success that they were after". Later (Tp44. LL 20-25) he said " ... on no view could [one] say that we failed, my client failed, in regard to either market value or disturbance ... they got more than what the RTA was offering ..."
Clearly Mrs Brock would now be better off had she accepted the statutory offer, at any time, or either of the offers of compromise made close to the hearing, so I cannot accept that she was, in any way, successful in her litigation.
While Mr Webster contended that the applicant's pending appeal against my judgment was irrelevant to the question of costs, he submitted the RTA's case at trial amounted to relevant "misconduct" on its part, in respect of the way it asked the Court to deal with the principles now the subject of the Court of Appeal decision in Roads and Traffic Authority of NSW v McDonald [2010] NSWCA 236; (2010) 175 LGERA 276. At the time of the substantive hearing of this matter that appeal in McDonald was pending in the Court of Appeal. Now that it has been determined, Mrs Brock's notice of appeal relies on it to overturn my decision (see debate between senior counsel, at Tpp 53-4).
Mr Marshall, who appeared for Mrs Brock at the substantive hearing, and with Mr Webster, on her behalf, at the costs/repayment hearing, referred the Court to Kooee (to which I referred in Prasad - see [22] above). One of the issues remaining in dispute in that case was the effect of offers on the costs of the appeal. Basten JA (with whom Giles and Tobias JJA agreed) took that issue first, because of the potential effect of offers of compromise on the assessment of, and the proportion of, costs recoverable in relation to the trial.
Basten JA said (at [14]-[16]):
14It is not in doubt that Kooee, in reducing the judgment against it to an amount of $1.36 million, has bettered its offer by some 13%. That is a significant element of compromise, which is capable of attracting an order for indemnity costs in accordance with UCPR r 42.15, from the first day of the trial: see r 42.15(2)(b)(i). However, there is an issue as to whether, being open for approximately 24 hours, the offer was "left open for such time as [was] reasonable in the circumstances", within the terms of r 20.26(7)(b). If that condition were not satisfied, it would not necessarily be an irrelevant consideration on the question of costs, but it would not be an offer engaging an entitlement to indemnity costs pursuant to r 42.15.
15Viewed in the abstract, an offer which is made less than 23 hours before the commencement of a hearing and requiring acceptance within that period, would not appear to have been left open for a reasonable time. Against that, there are practical considerations which might support a different conclusion. The first is that each of the parties had made prior offers, that of Kooee having been the subject of explanation as to the method of calculation of the component parts. Secondly, less than two weeks earlier Primus had made an assessment of its own position which led it to make an offer to settle for an amount of $2.5 million, an amount $1.25 million above the first Kooee offer. The second offer by Kooee reduced that gap by $300,000. Both the figures and the timing suggest that Primus could have been expected to assess the second offer with reasonable expedition.
16The practical circumstances which must have existed at the time the offer was made may be said to tend in either direction. Thus, it appears to be common ground, as the Court might have assumed, that the legal representatives of Primus were conferring in preparation for the forthcoming trial, throughout the period that the offer was open. While that may have facilitated an immediate consideration of the offer by advisers who were focused on the relevant issues, it may also be said that the provision of an offer the day before trial provided an inconvenient distraction from preparation of the case for hearing.
His Honour continued (at [20]-[24]):
20In considering whether the time allowed for acceptance is "reasonable in all the circumstances" once a trial commences, or indeed final preparation commences, three factors come into play. The first is that both parties may reasonably be expected to have a clear perception of the strengths and weaknesses of their positions, so that the reasonableness of a particular offer may be speedily assessed. Secondly, because significant costs will be accruing on a daily, even an hourly basis, there is a heightened incentive to respond within the time permitted. Thirdly, and counterbalancing the first factor, the need to address the terms of an offer, provide advice and obtain instructions will often be a significant distraction from final preparation.
21In relation to the first factor, it should be accepted that by the day before the hearing, in commercial litigation involving experienced counsel and solicitors, the legal representatives would have been able to give the client an immediate assessment of:
(a)the approximate costs incurred to date;
(b)the likely length of the trial;
(c)the approximate amount of costs assessed on an indemnity basis if the matter proceeded to trial, and
(d)the most likely outcome, which may involve a range as to quantum.
It should also be accepted that someone with authority to bind the client would have been available to give instructions based on legal advice as to the preferable response.
22In seeking to demonstrate that the offer had not been left open for a reasonable time in all the circumstances, Primus sought to put before the Court evidence of how the offer was made and the circumstances of its own legal representatives at the time. However, that material was not relevant for this purpose. The question of reasonableness must be judged objectively, in the circumstances known, or which should reasonably have been anticipated, by both parties. In setting the time during which the offer is to remain open, the offeror must necessarily rely upon the circumstances as known to it, or which should reasonably be anticipated by it. The actual circumstances of the recipient, unknown to the offeror, may be relevant to an application that the Court otherwise order in relation to costs of a valid unaccepted offer, but so might evidence as to whether the recipient took any steps to bring such matters to the notice of the offeror.
23In the present case, the time allowed was, on any view, a short period for the consideration of a global assessment of a reasonably complex dispute. It is Kooee which seeks to establish an entitlement to indemnity costs. To do that it must demonstrate that its offer was left open for a period which was reasonable in all the circumstances. Because the present case is truly borderline, it should be concluded that Kooee has failed to establish that its offer was left open for a reasonable time. Accordingly, the offer did not fall within UCPR r 20.26 and its non-acceptance did not engage the costs consequences in r 42.15.
24If, contrary to the conclusion reached above, it were thought that the offer was open for a reasonable time, there would have been no obvious basis for the Court to make an order other than that which would flow from the operation of r 42.15. It was not suggested in the present case that any of the considerations which sometimes apply, such as inadequacy of information, or a change in the basis of a case, was relevant in the present circumstances. It would have followed that Primus would have been entitled to its costs of the trial on the usual basis up until 11.00am on 31 January 2007 and thereafter would have been required to pay Kooee's costs on an indemnity basis.
Mr Marshall asked the Court to bear in mind that Mrs Brock was based in Maitland, her solicitor in Newcastle, her counsel in Sydney, and her valuer in Tuggerah, making it hard to settle quickly on a response to any RTA offer, regardless of the implications of Calderbank on a tight timeframe. He urged the Court to relax the usual rules, and argued an analogy with a partnership dispute such as that dealt with by Young JA, sitting at first instance, in Old v Hodgkinson; Old v McInnes [2010] NSWSC 1335. Young JA stated (at [27]) the rule in Hamer v Giles (1879) 11 ChD 942, at 944, in these terms:
"...where there is no fault on either side, but the partnership accounts have to be taken in this Court, the costs of the action for taking the accounts from the beginning ought to be dealt with as all other costs of necessary administration, that is they must come out of the partnership assets. Of course, where an action for dissolution is rendered necessary by the misconduct of a partner....the Court not only has jurisdiction, but is bound to exercise it, by making that partner pay so much of the costs as are occasioned by his misconduct."
His Honour went on to consider (at [55]ff) whether the usual rules should apply, in view of the circumstances of the making of offers of compromise in that case. His Honour said:
60There is some doubt as to whether any of these offers complied with the rules. However, it is also true that the court does not always insist on complete compliance with form. However, it is also true, that the court need not make a special order for costs just because of Calderbank letters.
61So far as they formal offers of compromise are concerned, they have little significance in a case where the dispute is what is the balance of the partnership accounts rather than a claim for damages or debt at common law.
62Thus I do not consider the offers affect the result of the decision on costs.
Given that the RTA is not pressing its possible claim for costs against Mrs Brock, and the total unavailability of an order for indemnity costs in favour of Mrs Brock in the circumstances of the negotiations, I do not need to pursue this argument further.
In support of some order for costs in her favour, Mr Marshall submitted that Mrs Brock had brought forward arguable claims. The RTA had given some concessions prior to the hearing, but then denied most of her claims. The VG's determination had relied upon the Coolongolook sale, which the Court found "non-comparable". Mr Marshall reminded the Court that the test of the reasonableness of a party's behaviour is objective. In all the circumstances it was reasonable for Mrs Brock not to accept the offer of the RTA, and, in his view, she fitted the principle espoused by Wilcox J in Banno, and restated by Talbot J in Wollong (written subs, pars 40 and 41), opening up the possibility of an order for costs at least partially in her favour.
Mr Tomasetti observed that both sides had put tight timeframes on their offers, not simply the RTA, that Mrs Brock had not claimed that she did not have enough time to give consideration to the question of settlement, that Mrs Brock sought no extension of time to consider the RTA's offers, and that the RTA was not submitting that Mrs Brock was unreasonable in not accepting the statutory offer or any subsequent offers.
Mrs Brock may have had unrealistic hopes or expectations for her litigation, and the RTA exercised its entitlement to put a harder line in the court case than it had in the acquisition itself, or in the pre-trial negotiations, but I can find no basis for a finding that either side behaved unreasonably, such that an order for costs is warranted.
I have concluded that there should be no order as to costs, and that each party must pay its own, in respect of the substantive proceedings.
I turn now to the last issue before the Court, the question of costs on the motions.
Costs on the Motions
The Dillon CA principles do not apply to the question of costs on the motions, which, in general terms, would normally "follow the event".
On the repayment issues, the applicant lost her argument that it was not a matter for this Court, and succeeded in only a seven month addition to the time the RTA suggested be allowed for payment to be made.
On the question of the costs of the substantive proceedings, the RTA made clear before the hearing that it was not pressing for an order in its favour, and that an order that each party pay its own costs was appropriate. The applicant persisted, and was entirely unsuccessful, in her application for costs, despite the fact that her chances were arguably better under Dillon CA than under Halley No 3 (c.f. Dillon No 3). None of the orders she sought at this hearing ([4] above) are to be made, in terms, except that an extended time will be allowed for the repayment.
In the circumstances, the appropriate order is that she pay the respondent's costs on the motions, on a party-party basis.
I will, however, specify a reasonable time within which they should be paid.
Orders
The orders of the Court will, therefore, be:
1. The applicant's Notice of Motion dated 12 May 2011 is dismissed.
2. The applicant is ordered to repay to the respondent $187,987.44, together with interest calculated from the date of payment, by 31 December 2014.
3. Each party is to pay its own costs of the proceedings.
4. The applicant is to pay the respondent's costs on the motions heard 1 August 2011, on a party-party basis, as agreed or assessed, within six months of agreement or assessment.
5. The applicant's amended Notice of Motion dated 24 May 2011, and paragraphs 2 and 3 of the respondent's Notice of Motion dated 17 June 2011, are discharged.
6. Exhibit B1 is returned.
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Amendments
24 May 2012 - Incorrect solicitor for respondent
Amended paragraphs: Coversheet - Solicitors
Decision last updated: 24 May 2012
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