Burke Estates Pty Ltd v Noosa Shire Council
[2000] QPEC 26
•20 April 2000
PLANNING AND ENVIRONMENT COURT OF QUEENSLAND
CITATION: Burke Estates Pty Ltd v. Noosa Shire Council [2000] QPE 026 PARTIES: T M BURKE ESTATES PTY. LTD.
v.
NOOSA SHIRE COUNCILFILE NO: 1193 of 1996 DELIVERED ON: 20 April 2000 DELIVERED AT: Brisbane HEARING DATES: 31 March 2000 JUDGE: Skoien S.J.D.C. ORDER: Application dismissed. CATCHWORDS: Issue estoppel, estoppel by conduct, Anshun estoppel, whether any of them raised by decision on a preliminary point in injurious affection case. COUNSEL: Mr. Gore Q.C. and Mr. Rackemann for appellant
Mr. Doyle S.C. and Mr. Trotter for respondentSOLICITORS: O’Shea Corser & Wadley for appellant
Wakefield Sykes, Noosa Shire Solicitor for respondent
This is an application by Burke for an order that the Council is precluded from asserting that compensation is not payable by it to Burke for injurious affection to land. It is necessary to set out in some detail the facts which form the background to the application.
The Facts
Burke is the lessee, pursuant to a special lease granted under s.205 of the Land Act 1962, of approximately 250 hectares of land located on the west of David Low Way between Peregian Beach and Noosa. It was a term of the lease that Burke should develop the land for residential, business and industrial purposes to the satisfaction of both the Council and the Minister for Lands. Since then, pursuant to that term, much of the land has been subdivided and sold off. However, approximately 59.7 hectares remains.
The remaining land is and at all material times has been included in the Rural Pursuits Zone under the relevant Planning Scheme. Pursuant to applicable by-laws, land in the Rural Pursuits Zone cannot be subdivided into lots of less than 40 hectares. Because of the size of the land, the practical consequence of the by-laws is that it could not have been subdivided unless it was rezoned.
Prior to 4 May 1995, the land was designated Urban Area under the Strategic Plan. The use of the land was “residential purposes, comprising both permanent and tourist accommodation”. However, on 5 May 1995 the Strategic Plan designation was altered to Public and Private Open Space. At the same time, a Development Control Plan was introduced specifically in respect of the land. It had, as one of its objectives, the institution of controls “that ensure that no forms of urban development are permitted within the Development Control Area” and stated that the preferred future use of the land “is limited to open space purposes with an associated appropriate tenure providing for its permanent preservation and for certain road reservation purposes”. The “road reservation purposes” identified in the plan include the widening of David Low Way. The effect of these amendments was to put an end to any prospects Burke had of re-zoning the land and subdividing it into residential lots.
On 1 March 1996, Burke lodged a claim with the Council for compensation pursuant to s.3.5 of the Local Government (Planning and Environment) Act 1990. That section provides (relevantly):
“3.5(1) Where a person –
(a) has an interest in premises within a planning scheme area and the interest is injuriously affected –
(i) by the coming into force of any provisions contained in the planning scheme; or
(ii) by any prohibition or restriction imposed by the planning scheme;
…
that person is, subject to compliance with this section, entitled to obtain from the local government compensation in respect of the injurious affection or expenditure and may claim that compensation in accordance with this section.
…
Compensation is not payable –
…
(c) where an interest in premises is affected by a planning scheme which by its operation … limits the size of allotments …
(d) subject to sub-section (2), where an interest in premises is affected by a planning scheme which by its operation prohibits or restricts the use of land or the erection or use of a building or other structure thereon for a particular purpose, unless the applicant establishes that the applicant had a legal right immediately before the provision in question of the planning scheme came into force to use the land or erect or use the building or other structure thereof for the particular purpose which is so prohibited or restricted.
…
(g) in respect of any affection of an interest in premises by or pursuant to a planning scheme or a local law made by a local government under which the subdivision of the land is prohibited or restricted.
For the purposes of subsection 4(d), it is not to be taken that an applicant did not have the legal right referred to in that subsection by reason only that the applicant’s right depended upon an exercise of discretion by the local government in the applicant’s favour if the applicant shows that it is reasonable to expect that the exercise of discretion would have been in the applicant’s favour had it been sought immediately before the relevant provision of the planning scheme came into force.
The onus of proving that compensation is not payable in any case by virtue of subsection (4) is upon the local government.
…
Subject to subsections (2A) and (9), the following provisions are to have effect in assessing compensation in respect of a claim made under subsection (1)(a) –
(a) the amount of compensation is (subject to paragraphs (b), (c) and (d) to be an amount equal to the difference between the market value of the interest immediately after the time of the coming into operation of the provision of the planning scheme by virtue of the operation whereof the claim for compensation arose and what would have been the market value of that interest if the provision had not come into operation;
...”
By its claim, Burke asserts that its interest in the land had been injuriously affected by the change in designation under the Strategic Plan and the coming into effect of the Development Control Plan. It seeks compensation based upon the development of the land in accordance with a plan annexed to the claim, Plan X329A-280. That plan envisaged the development of the land into 238 allotments of an average size of less than 1000 m2. The amount of compensation sought by Burke is substantial. It claims that by reason of the events to which we have referred, the market value of the land (said to be $4,530,000.00) has been reduced to nil.
Because no decision had been made with respect to its claim, on 15 April 1996 Burke appealed to the Planning and Environment Court pursuant to s.3.5(14) of the P & E Act.
On 30 July 1996 the Council’s solicitor wrote to Burke’s solicitors identifying the issues which the Council intended to raise in the appeal. The first of those was that:
“1. The claim for compensation is based upon the development of the subject land in accordance with Plan X2329A-280. Such form of development was at the material time unlawful under the Planning Scheme and the Appellant had no legal right immediately before the provision in question of the Planning Scheme coming into force to so use the land. Compensation is therefore not payable in accordance with Section 3.5(4)(d) of the Local Government (Planning and Environment) Act.”
Further particulars of that contention were subsequently sought and provided. In them, the Council stated that s.3.5(4)(d) applied to Burke’s claim because, prior to 4 May 1996, the development of the land in accordance with Plan X329A-280 could not lawfully have taken place without a gazetted rezoning of the land.
By application dated 20 August 1996, the Council sought to have the issue of the application of s.3.5(4)(d) to Burke’s claim determined as a preliminary question of law. The question to be determined was:
“whether compensation is payable in respect of the development of the land in accordance with the Plan X239-280B (attached to the claim), when the appellant did not have a legal right to develop the land in accordance with that plan immediately before 5 May 1995, when the Marcus Development Control Plan and the amendment of the Strategic Plan referred to in the claim, came into force.”
The trial of that preliminary question came on for hearing before Shanahan CJ DCJ on 28 August 1996. The application was amended to add a second question raising the application of s.3.5(4)(c) and (g). That question reads:
“(b)whether compensation is payable in respect of development in accordance with that Plan:
(i) when under the planning scheme such development could not be carried out by reason of the fact that the scheme by its operation limits the size of allotments; and
(ii) when the affection relied upon is pursuant to a planning scheme under which the subdivision of the land is restricted.”
Before Shanahan CJ DCJ, the first of the preliminary questions was not proceeded with. The Council did not ask that it be determined and this was clear to Burke because its outline of submissions noted:
“1.The Council seeks the determination of preliminary questions of law being the questions in paragraph (b) of the application. Paragraph (a) is no longer relied on by the Council.
2.The preliminary questions relate to the provisions of s.3.5(4)(c) and (g) of the Local Government (Planning and Environment) Act.”
and the oral submissions were consistent with that. They dealt exclusively with the effect of paragraphs (c) and (g) of s.3.5(4) a reference by Counsel for the Council to paragraph (d) being passing and by way of comparison.
On 10 September 1996, Shanahan CJ DCJ delivered his reasons for judgment with respect to the second of the preliminary questions. This decision is reported in [1997] QPELR 107. After noting that the claim related to ss.3.5(4)(c) and (g) of the Planning and Environment Act, His Honour concluded:
“I am of the opinion that the scheme limits the size of the allotments and because of that and the fact that the subdivision of land is prohibited or restricted in size then compensation is not payable.”
By Notice of Appeal dated 18 September 1996, Burke appealed to the Court of Appeal against that decision. The Notice of Appeal was:
“from the whole of the judgment of the Planning and Environment Court at Brisbane in P&E Appeal No 1193 of 1996, given on 10 September 1996 by Chief Judge Shanahan whereby the Planning and Environment Court determined as a preliminary question of law that by virtue of s.3.5(4)(c) and (g) Local Government (Planning and Environment) Act 1990 (“the Act”), compensation was not payable to the appellant under s.3.5(1) of the Act in respect of development in accordance with Plan of Development No. X329B-280 (“the Plan of Development”) attached to the appellant’s claim for compensation.”
and the only order sought in the Notice of Appeal was:
“that the determination of the preliminary question of law be that the payment of compensation to the appellant in respect of development in accordance with the Plan of Development is not excluded by s.3.5(4)(c) or s.3.5(4)(g) of the Act.”
The outlines of argument which were filed on behalf of the parties confirmed that the appeal was concerned only with the application of paragraphs (c) and (g). Burke’s outline of argument concluded:
“4.6 His Honour should have concluded and ruled that the Marcus DP and the amended Strategic Plan are not planning provisions to which s.3.5(4)(c) or (g) apply, and should have ordered accordingly.”
Reference to paragraph (d) was restricted to indicating a contrast provided by that provision (Burke’s outline para 4.4.4) and a reference to the lack of relevance of paragraph (d) (Burke’s outline para 4.4.6).
The outline of argument which was filed on behalf of the Council read:
“5. The respondent sought a determination by the Planning and Environment Court of certain questions of law, the effect of which whether compensation was payable in respect of the development of land in accordance Plan X329B-280. At the hearing, the respondent contended that compensation was not payable in respect of such development by reason of the provisions of s.3.5(4)(c) and (g) of the Local Government (Planning and Environment) Act although the application also raised a similar question based upon the provisions of s.3.5(4)(d) and s.3.5(5).
6.His Honour held that compensation was not payable because the effect of the amendment was to limit the size of allotments.
…
11. The appellant contends that the amendments are planning scheme provisions which prohibit or restrict the use of land. However, its claim is not based upon interference with its rights to use land, but on the loss of its ability to subdivide land. Had its claim been based on a loss of the right to use land, the provisions of s.3.5(4)(d) and s.3.5(5) would have been relevant. The claim could not have succeeded because the appellant did not have a legal right, immediately prior to the amendments, to carry out its development; and could not have acquired such a right simply by the exercise of a discretion of the local government. However, the proposed subdivision, not being a form of “use” does not come within s.3.5(d).”
In a submission in reply which was filed on behalf of Burke, it was stated that:
“6. Sections 3.5(4)(d) and 3.5(5) might be relevant in the rezoning context because they relate to the use of land. The respondent’s application raised as a preliminary question of law the operation of those provisions but the respondent chose not to argue that question before the Planning and Environment Court. The operation and application of those provisions cannot now be argued for the first time on the hearing of the appeal.”
On the hearing of the appeal, the following exchange occurred between the presiding Justice and Mr Lyons QC on behalf of the Council:
“Davies JA: Has (d) been abandoned, Mr Lyons, or are you going to argue (d) before us?
Mr Lyons: Your Honour, our position is that the claim which was made was made in respect of subdivision, not use, and on that basis we brought the preliminary point and we don’t depart from that. We do say that it’s odd that the appellant seems to suggest that really it’s a loss of use right but our contention is its claim is not a loss of use right.
Davies JA: Well, are you relying on (d) or not? That’s all I’m asking you.
Mr. Lyons: No, not on the basis we take. No.”
The Court of Appeal delivered its joint judgment on 2 September 1997, reported in [1998] 2 Qd.R. 448. It concluded that ss.3.5(4)(c) and (g) did not preclude Burke’s claim for compensation. In the course of doing so, it answered both of the preliminary questions contrary to the Council. At pp 451-452 it stated:
“In the context of s.3.5(4) it is necessary to refer to para (d) which relevantly provides that compensation is not payable:
(the judgment set out s.3.5(4)(d)).
It is para (d) rather than paras (c) or (g) which would apply where a rezoning rezoned land to a less intensive use. Such a rezoning would “by its operation” prohibit or restrict the use of land for a particular purpose for which it could previously have been used. It would ordinarily also indirectly affect both the right to subdivide and the size of allotments.
To give such a rezoning the effect that either para (c) or (g) would apply would have, it seems to us, a consequence unintended by the legislature in a case which comes within the exception in para (d). Where it does, para (d), which is specifically concerned with the use of land, and consequently rezoning which directly affects that use, would not preclude the payment of compensation. But if paras (c) and (g) are to be given the construction which his Honour gave them, each of them would preclude it in such a case because any prohibition or restriction on the use of land in consequence of a rezoning to a less intensive use would also ordinarily indirectly prohibit or restrict subdivision of land and limit the size of allotments. In other words they would deprive the exception in para (d) of any operation in one circumstance when it appears it was plainly intended to operate.
In order to avoid such a construction, it is necessary to distinguish between the direct operation of rezoning, the change in use to which land may be put, and its indirect operation, that in consequence it may affect subdivision and the size of allotments. That is the way in which these paragraphs in s.3.5(4) should, in our view, be construed.
The changes made on 5 May have an even less direct effect on subdivision and allotment sizes. Indeed they have only an indirect effect on land use which, as we have already indicated, remains unchanged. They indicate no more than the objectives and future intent of the plan as to the use of the subject land. And in that sense only they indicate, indirectly, that, to that end, subdivision will be restricted and allotment sizes limited.
It follows from the construction which we prefer that neither para (c) or para (g) applies in the present case. This then disposes of the second of the questions asked as preliminary questions of law. The first of those questions was:
“whether compensation is payable in respect of the development of the land in accordance with the Plan X239-280B (attached to the claim), when the appellant did not have a legal right to develop the land in accordance with that plan immediately before 5 May 1995 when the Marcus Development Control Plan, and the amendment of the Strategic Plan referred to in the claim, came into force.”
Unless paras (c) or (g) apply, as these are the only preclusion provision relied on, the appellant is entitled to compensation for the injurious affection to its interest and the amount of that compensation is the amount by which the interest is reduced in value by the amendments of 5 May 1995: subs. (8)(a). The only relevance, in determining that value, of the fact that the appellant had no legal right to develop the land in accordance with the plan immediately before 5 May 1995 is that what must be valued, in determining the value of the land before that date is the prospect that its likely future use was urban residential in a Residential Single Unit Zone rather than the certainty that that was its present use.
We would therefore allow the appeal and we would answer the first preliminary question as follows:
Compensation is payable, in accordance with ordinary principles of valuation, by comparing the value of the land, immediately before 5 May 1995, with the prospect it had that its likely future use was residential in a Residential Single Unit Zone with its value, immediately after 5 May 1995 without that prospect and with the likelihood that its future use would be public and private open space.
We would answer the second preliminary question as follows:
The planning scheme does not by its operation limit the size of allotments nor is it one under which the subdivision of land is restricted.”
The underlining has been added by me.
On 19 October 1998, the Planning and Environment Court (McLauchlan DCJ) delivered judgment in another matter involving the Council, Sparke v. Council of the Shire of Noosa [1999] QPELR 126. In it the court held that s.3.5(4)(d) and 3.5(5) did not give a landowner the right to compensation calculated on a likely future re-zoning of the land. While the discretion of the Council might be likely to be assessed in the claimant’s favour, a further discretion, that of the Governor in Council is necessary before a rezoning can occur. Thus subsection (5), which speaks only of the exercise of the discretion of the Council, did not apply to preserve the right to compensation. That decision was upheld by the Court of Appeal on 27 August 1999.
Prompted no doubt by the first instance decision in Sparke on 28 January 1999 Burke’s solicitors wrote to the Council’s solicitor seeking confirmation that, in view of the history of the matter, the Council would not rely on Sparke in the present appeal. In subsequent correspondence Burke’s solicitors asserted that the Council is precluded from doing so by reason of an issue estoppel arising from the decision of the Court of Appeal or, alternatively, by reason of an estoppel of the kind considered in Port of Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 589.
Finality of Litigation
The law recognises the public interest in the finality of litigation and is concerned to prevent the repetitious trying of the same claim between the same parties. This concern is reflected in two principles known as res judicata and issue estoppel.
A claim which has been litigated to judgment by a court or tribunal which has jurisdiction to try the claim is, as between the parties to the litigation, res judicata (the thing has been adjudicated upon). The claim merges in the judgment which then defines the rights of those parties, the one to the other, in respect of the claim which was litigated.
Issue estoppel involves a similar but distinct principle. That principle is that a final decision, once given by a court or tribunal having jurisdiction to try the matter, forever binds the parties in respect of any issue of fact or law which was actually decided and which was legally indispensable to that decision, Blair v. Curran, (1939) 62 CLR 464 at 532 per Dixon J. On the same page he also said:-
The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”
The Submissions
For Burke, Mr. Gore Q.C. argued that the history of the matter has given rise to:-
(i) an issue estoppel;
(ii) estoppel by conduct;
(iii) an Anshun estoppel
any one of which operates to prevent the Council from relying on the decision in Sparke to resist the payment of compensation.
The Relevant Material
It is now settled that in considering these questions the court can look at “any material that shows what issues were raised and decided”. See Rogers v. R. (1994) 181 CLR 251 at 263, per Brennan J. And see, for examples of such material, Spencer Bower, Turner and Handley, The Doctrine of Res Judicata, 3rd ed., para. 204. Accordingly, I will take into account the facts and circumstances set out in paras [8] to [19] above.
Issue Estoppel
In order to raise an issue estoppel:-
(a) it is a necessary condition that the question in the second proceedings is identical to that decided or covered by the first proceeding (Spencer Bower, above, para 198); and
(b) only the determination of a question which is necessary to the first decision and fundamental to it will found an issue estoppel (ibid, para 201).
Those two propositions are easy to state but even a cursory examination of the many authorities demonstrates that their application is often very difficult.
Identity of Issue
To my mind a careful consideration of the application before this Court and the Court of Appeal, as well as the oral and written submissions advanced before each shows clearly that the only issues raised by the parties were the paragraph (c) issue and the paragraph (g) issue. References to the paragraph (d) issue were only passing. Burke noted that it did not apply (see para [12] above) and indeed Burke positively asserted that it objected to the issue being raised at all (see para [17] above).
Mr Lyon’s response to the direct question of Justice Davies in the Court of Appeal was a careful rejection of reliance on a paragraph (d) point, “on the basis we take”. I interpret that as a statement of the Council’s position on the preliminary point then being argued (that is the legal effect of paragraphs (c) and (g)) that the question of the possible effect of paragraph (d) was being put to one side. I do not regard it as an abandonment forever of the point. As Mr. Doyle S.C., for the Council, submitted there is no legal requirement that on the raising of a preliminary point all possible arguments on all possible preliminary points must be advanced.
Mr. Gore challenged that submission by referring to Hoystead v. Commissioner of Taxation (1926) A.C.155 at 170 where the Privy Council accepted as accurate this principle of practice:
“The rule on this subject was set forth in the leading case of Henderson v. Henderson (1843) 3 Hare, 114, by Wigram V.-C. as follows: ‘I believe I state the rule of the Court correctly when I say, that where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.”
and he also referred as an example of the same principle, to Cachia v. Isaacs (1985) 3 NSWLR 366 (especially at 382).
In my opinion while that principle applies when the substantive claim is litigated, it does not apply when a preliminary point is litigated. I was not referred to any authority to suggest the contrary. Preliminary points, by their very nature, leave aside all other points for later adjudication. One such point may be itself the proper subject of a further preliminary point application. In my view the bringing of a further preliminary point application is not denied because an earlier preliminary point has been taken and argued. That might be a ground for declining to hear the further point and directing that the substantive litigation proceed, or in a proper case it may have a consequence in an order for costs.
Mr Gore argued that in any event the Court of Appeal, in its judgment, decided the very point that the Council now wants to contest, that is the applicability of the paragraph (d) argument. He primarily relied on the answer of the Court of Appeal to the first question in the application, the question originally framed for the paragraph (d) argument which, as I have said, was not argued before the Planning and Environment Court or the Court of Appeal. Given that the question was not argued it might seem odd that the Court would apparently answer it but it seems to me that there is a logical explanation for that. In that regard assistance is gained from an examination of the High Court decision in Vitosh v. BCC (1955) 93 CLR 622.
In Vitosh the Council had passed a resolution in purported exercise of a power given to it under an ordinance. The resolution reserved a discretion to the Council and Vitosh applied to it for an exercise of that discretion in his favour. When that application was refused he sought a writ of mandamus which was refused by the Full Court which, in giving judgment, said that the resolution was valid under the ordinance.
Vitosh then began a fresh action seeking, among other things, a declaration that the resolution was invalid. The case went on appeal to the High Court where the Council raised issue estoppel based on the finding in the Full Court that the resolution was valid. The majority of the High Court dealt with that submission thus, at p. 629:-
“The plaintiff’s application for a writ of mandamus assumed the validity of the resolution and upon that assumption the plaintiff sought an order commanding an exercise of the Council’s discretion under the resolution; but no issue arose as to the validity of the ordinance or of the resolution. The plaintiff is not estopped by his having proceeded on the assumption that he was bound by the resolution under the ordinance.”
That passage speaks of the plaintiff’s assumption but it is clear that the assumption was also made by the Full Court.
It seems to me that the Court of Appeal, in its answer to the first question was simply recording that, having disposed of the paragraphs (c) and (g) points adversely to the Council, then on the assumption that there was no preclusion to compensation based on paragraph (d) (that point not having been the subject of argument), compensation would be assessed on the ordinary principles. That assumption, which has now been tested by full argument before the Court of Appeal in Sparke, has proved to be incorrect. In Vitosh the parties and the Full Court had assumed a point which was not argued but which was later shown to be incorrect. Just as an acceptance of that assumption in the Full Court’s judgment did not give rise to an issue estoppel in Vitosh, nor would the assumption by the Court of Appeal of Burke’s right to compensation under paragraph (d) give rise to an issue estoppel in this case.
This assumption is quite distinguishable from the assumption referred to by the Privy Council in Hoystead v. Commissioner of Taxation (1926) AC 155 at 165:
“In the opinion of their Lordships it is settled, first, that the admission of a fact fundamental to the decision arrived at cannot be withdrawn and a fresh litigation started, with a view of obtaining another judgment upon a different assumption of fact; secondly, the same principle applies not only to an erroneous admission of a fundamental fact, but to an erroneous assumption as to the legal quality of that fact.”
Hoystead was a case in which the substantive trial had occurred. The trial had proceeded and judgment given on the basis of facts including some which were agreed or assumed. The Privy Council said that a party could not later reside from the factual and legal position he had earlier adopted on the basis of which the litigation has proceeded to judgment. But as I said in paragraph [31] above, I am aware of no such principle in respect of preliminary point arguments.
In considering whether the decision of the Court of Appeal was a decision on the actual issue now before me, (the identity of issue question) it is helpful to attempt to set out precisely what the Court of Appeal actually said in relation to the legal effect of paragraph (d). In my opinion it said that in a ‘re-zoning down” case (such as this case) paragraphs (c) and (g) could not apply because to apply them would exclude the claimant’s right to obtain compensation “in a case which comes within the exception in paragraph (d)”. Such a case is where the claimant had the “legal right” referred to in the exception. On the facts of this case it is obvious that in order to decide whether Burke had that legal right, recourse must be had to subsection (5). If Burke could bring itself within the provisions of subsection (5) it had a legal right and the preclusion laid down in paragraph (d) would not apply.
So the Court of Appeal merely held that if Burke had the legal right referred to in paragraph (d) (established by reference to subsection (5)), compensation would be payable as usually assessed. But it did not purport to hold that Burke had that legal right. It could not do so without a consideration of the applicability of subsection (5). It had heard no argument on that and did not devote any attention to it. If it had, presumably it would have reached the same conclusion as was reached in Sparke. To my mind it is inconceivable, in these circumstances, that the Court of Appeal can be taken to have come to a final decision that Burke was entitled to compensation under the exception within paragraph (d). It was on the assumption that Burke had the legal right, the contrary not having been argued, that the Court answered the first preliminary question.
Thus I conclude that Burke has failed to establish the first essential to found an issue estoppel, that the question now raised by it is identical to that decided by the Court of Appeal
Fundamental Issue
In Blair, supra, at pp.532-3 Dixon J. explained this essential of an issue estoppel thus:-
“Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v. Inhabitants of the Township of Hartington Middle Quarter (1855) 4 E. & B. 780 at p. 794, the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.
In the phraseology of Lord Shaw, ‘ a fact fundamental to the decision arrived at ‘ in the former proceedings and ‘the legal quality of the fact’ must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation (1926) A.C. 155. But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in a process of reasoning tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation."
The question posed by Burke is whether the discussion by the Court of Appeal of the effect of paragraph (d) and the answer it gave to the first question of the application was fundamental to its decision of the inapplicability of paragraphs (c) and (g). To paraphrase Blair, is the Court of Appeal’s discussion of paragraph (d) necessary to the groundwork for the decision it reached on paragraphs (c) and (g) or was it no more than “a step in the process of reasoning tending to establish or support the proposition” which the Court reached on the inapplicability of paragraphs (c) and (g).
The reasoning I used in paragraphs [37] and [38] applies also to this question. Whatever be the answer to the question I have set out in my paragraph [41] the fact is that the finding of the Court of Appeal in respect of the first question was not a decision that Burke was entitled to compensation under the exception in paragraph (d). So even if the Court of Appeal’s reasoning on paragraph (d) was fundamental to its decision on the inapplicability of paragraphs (c) and (g), it was based on the merely hypothetical applicability of paragraph (d). That would not suffice to estop the Council from relying now on paragraph (d).
Estoppel by Conduct
A party to litigation may so conduct himself as to amount to a representation by him of past, present or future matters and induce another to act on that representation and thereby suffer some detriment. In that event the party holding out the representation will not be permitted to resile from it. See Commonwealth of Australia v. Vervayen (1990) 170 CLR 394. So, Mr Gore argued, the Council deliberately chose not to argue the paragraph (d) point in the earlier proceedings, Burke accepted that stance of the Council and itself chose not to argue the point. To permit the Council to raise it now, he submitted, would be to allow it to approbate and reprobate.
It is true that the Council chose not to argue paragraph (d) and that Burke accepted that position. But as I have said no authority has been put before me to say that, on a preliminary point argument, such a stance by the Council was wrong or even unusual. So the only representation the Council made was that it would not at that time press any argument on paragraph (d). Such a representation can hardly be seen to have to led Burke to act on it to its detriment. Burke must be taken as simply accepting that the Council was doing what it was entitled to do.
Next, what detriment has Burke suffered by accepting the Council’s attitude not to argue paragraph (d) at the first Court hearing and before the Court of Appeal? The only one suggested by Mr. Gore was the detriment of having “to go through extra proceedings of this kind.” That detriment is in the form of a relatively small sum of money, the costs incurred in the extra proceedings. To have it found an estoppel (the amount in issue in this appeal being of the order of $4.5 million) would offend the requirement that there be proportionality between the remedy and the detriment which is its purpose to avoid. See Verwayen, above.
Thus I do not find that an estoppel by conduct has been established.
Anshun Estoppel
Anshun estoppel (Port of Melbourne Authority v. Anshun Pty Ltd (1981) 147 CLR 589) is based on the principle expressed, for example in Henderson v. Henderson (1843) 67 ER 313 at 319, thus:
“The plea of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.”
In Anshun at p.602 it was said:
“In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff’s claim, and its subject matter it would be expected that the defendant would raise a defence and thereby enable the relevant issues to be determined in the one proceedings ...
It has generally been accepted that a party would be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment ...
... By ‘conflicting’ judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction.”
The submission on behalf of Burke that this type of estoppel has arisen is defeated by the conclusion I have expressed in para. [31] that arguments raised on preliminary points may be restricted, that there is no duty to advance them all.
Conclusion
I dismiss the application.
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