Esposito v Commonwealth

Case [2015] FCAFC 160

FEDERAL COURT OF AUSTRALIA

Esposito v Commonwealth of Australia [2015] FCAFC 160

Citation: Esposito v Commonwealth of Australia [2015] FCAFC 160
Appeal from: Esposito v Commonwealth of Australia [2013] FCA 1039
Esposito v Commonwealth of Australia [2014] FCA 1440
Esposito v Commonwealth of Australia [2015] FCA 3
Parties: JUNE YVONNE ESPOSITO, MARGARET-ANNE HUTTON, DANIEL WALTER MASSAIOLI, SAM DE MARIA and FRANCESCO JOHN TALARICO v COMMONWEALTH OF AUSTRALIA, STATE OF NEW SOUTH WALES, SHOALHAVEN CITY COUNCIL, FOUNDATION FOR NATIONAL PARKS AND WILDLIFE and MINISTER FOR THE ENVIRONMENT (COMMONWEALTH)
File number: NSD 78 of 2015
Judges: ALLSOP CJ, FLICK AND PERRAM JJ
Date of judgment: 17 November 2015
Catchwords:

CONSTITUTIONAL LAW – whether appellants’ property acquired contrary to s 51(xxxi) of the Constitution – whether decision of Minister to decline approval constituted acquisition – whether any deprivation and corresponding receipt established – whether claims made in respect of a spes bearing a proprietary character – whether funding agreement between the Commonwealth and New South Wales was an attempt to avoid s 51(xxxi) – whether just terms provided in any event

ADMINISTRATIVE LAW – whether Minister empowered by the Environment Protection and Biodiversity Conservation Act 1999 (Cth) to prevent rezoning of land – whether rezoning constitutes an ‘action’ under that Act – whether relief should be granted in respect of partially ultra vires decision of Minister in circumstances – whether funds advanced illegally – whether Minister failed to have regard to relevant considerations

UNJUST ENRICHMENT – whether unjust enrichment claim logically coherent alongside s 51(xxxi) case

PRACTICE AND PROCEDURE – whether appropriate to grant declaratory relief – whether changes to reasons for judgment grounds for appeal – consideration of basis of power to amend reasons for judgment – whether primary judge erred in refusing leave to amend and in making certain evidentiary rulings

Legislation: Constitution ss 51(xxxi), 96
Environment Protection and Biodiversity Conservation Act 1999 (Cth) ss 18, 18A, 19, 26(2), 27A, 67, 68, 131A, 133, 136, 519, 523, 524
Financial Management Legislation Amendment Act 1999 (Cth) s 5(3)
Natural Heritage Trust of Australia Act 1997 (Cth) ss 8, 19
Federal Court Rules 2011 (Cth) r 39.04
Environmental Planning and Assessment Act 1979 (NSW) ss 54, 55, 64, 69, 70, 74, 76, 76A, 76B
Cases cited:

Bell v Veigel [2008] NSWCA 36
Commonwealth v New South Wales [1923] HCA 34; (1923) 33 CLR 1
Commonwealth v Tasmania [1983] HCA 21; (1983) 158 CLR 1
Commonwealth v WMC Resources Ltd [1998] HCA 8; (1998) 194 CLR 1
Georgiadis v Australian and Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297
ICM Agriculture Pty Ltd v Commonwealth [2009] HCA 51; (2009) 240 CLR 140
Johnston Fear & Kingham & Offset Printing Co Pty Ltd v Commonwealth [1943] HCA 18; (1943) 67 CLR 314
JT International SA v Commonwealth [2012] HCA 43; (2012) 250 CLR 1
Melbourne Corporation v Commonwealth [1947] HCA 26; (1947) 74 CLR 31
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA…

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Esposito v Commonwealth of Australia [2015] FCAFC 160
Case
[2015] FCAFC 160
Decision Date

CaseChat Overview and Summary

The case of Esposito v Commonwealth involved multiple appellants, including the Heritage Estates Lot Owners Association, contesting various decisions made by the Federal Minister under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). The core dispute centred on whether the appellants' property had been acquired contrary to section 51(xxxi) of the Constitution and whether the Minister's decision to decline approval constituted an acquisition. Additionally, the appellants argued that the funding agreement between the Commonwealth and New South Wales was an attempt to circumvent section 51(xxxi) and sought to establish if just terms were provided. The appellants also claimed that the Minister was not empowered to prevent rezoning of land and questioned if the Minister had regard to relevant considerations in making his decision.

The court had to determine several legal issues. First, it had to ascertain whether the appellants' property had been acquired contrary to section 51(xxxi) of the Constitution and if the Minister's decision constituted an acquisition. Second, it needed to examine if the Minister was empowered to prevent rezoning of land under the EPBC Act and whether the rezoning constituted an 'action' under that Act. Third, it had to decide if relief should be granted in respect of a partially ultra vires decision of the Minister and if funds were advanced illegally. Fourth, it needed to determine if the Minister failed to consider relevant socio-economic and environmental factors, and if just terms had been provided. Finally, it had to address whether an unjust enrichment claim could logically coexist with the section 51(xxxi) argument.

The court's reasoning and outcome were largely against the appellants. It held that the Minister's decision did not constitute an acquisition contrary to section 51(xxxi) of the Constitution, and therefore, the argument that the funding agreement was an attempt to circumvent that section was also rejected. The court found that the Minister was not empowered to prevent rezoning of land under the EPBC Act, and that while the Minister might have failed to have regard to relevant considerations, it did not constitute a ground for relief. The court further found that the claims for unjust enrichment were logically incoherent alongside the section 51(xxxi) case. The court dismissed the appeal and denied the application for an extension of time for leave to appeal, both with costs.

The final orders of the court were to dismiss the appeal with costs and to dismiss the application for an extension of time for leave to appeal with costs. The entry of these orders was dealt with under Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The appeal be dismissed with costs.

2. The application for an extension of time for leave to appeal be dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

At the hearing of the appeal (a) was not pressed. In relation to (b) and the related written submission that the primary judge had refused to admit Ex J pp 301-302, it transpired that the appellants had withdrawn the tender of this material at trial. As to (c), this was in evidence as Ex H. Why this was inadmissible was not explained. As to (d), the appellants did not identify what this was but evidence about the redevelopment of land nearby the Heritage Estates by Stockland was Ex L. Why this was inadmissible was not explained. In their written submissions, the appellants advanced no argument about (e) and (f), which we consider no further. They did raise other evidentiary matters not comprised in the final form of the notice of appeal. We do not consider those. Ground 14 should be dismissed.14. The Valuation Evidence (Grounds 15 and 16) The appellants contested his Honour’s treatment of the expert evidence. There is no need to deal with this ground in light of our conclusion at [92] that his Honour’s reasons about that topic were not sufficient. 15. Traders Point (Ground 17) This was not pursued in the further amended notice of appeal.16. Pleading Issues (Ground 18) Prior to the trial, the primary judge had refused the appellants leave to amend their statement of claim by the insertion of a new para 10, and consequentially amend paras 11, 13 and 14. Further, his Honour struck out paras 11 to 14 of the statement of claim. They also sought to make ancillary amendments to their originating application. This application the primary judge partly refused: Esposito v Commonwealth of Australia [2013] FCA 1039. Paragraphs 10 to 14 involved a claim of misrepresentation against various of the respondents. Its basic point was that the letters offering $5,000 per lot sent by the Foundation after 2012 were misleading because the land was worth more. However, the loss which was then particularised was the devaluation to the land caused by the EPBC Act decision in 2009. As the primary judge correctly observed this makes no sense. Letters sent in 2012 and 2013 cannot cause loss in 2009. His Honour was correct not to permit this pleading. It is likely that leave to appeal this order is necessary as it was a matter of practice and procedure, was interlocutory in nature and was out of time. Ultimately, leave was sought in the present proceeding when notices of objection to competency were filed. Leave should be refused. The decision is not attended by any doubt. Nor could it have made the slightest difference when the primary judge ultimately found that the lots were valueless.17. Orders(1)The appeal be dismissed with costs.(2)The application for an extension of time for leave to appeal be dismissed with costs.

Decision

Reasons for decision

This was not pursued in the further amended notice of appeal.11. The Multiple Judgment Argument (Ground 12) His Honour delivered judgment on 24 December 2014. There are two versions of this judgment extant. One is the hardcopy which was physically handed to the parties on that day. The second is another version bearing the same date which was distributed to the parties on 6 January 2015. It included corrections by the primary judge to the earlier version. The orders contained in this judgment were not entered until 9 April 2015. We were provided with a copy of his Honour’s judgment which was marked up to reflect the differences between these two versions. The main difference is the absence of the sixth applicant, Mr Talarico, as a party on the face of the judgment. Any initial sense of alarm at this is, however, altogether allayed when one brings to account, as one must, that the appellants’ lawyers had left Mr Talarico as a party off on their own pleadings. One can hardly blame the primary judge, in that circumstance, for assuming that the applicants’ lawyers had correctly named their own clients on the face of their pleadings. The remaining differences between the judgments may be grouped into two classes: trivial and less trivial. Into the trivial category can be placed the following:·the substitution of the word ‘their’ and ‘they’ for ‘its’ and ‘it’ in para [21];·the addition of the words ‘Rural 1(a) (Rural “A” (Agricultural Protection) Zone) and’ in para [30];·the deletion of ‘(the controlled action decision)’ from para [48] as a defined term;·the deletion of ‘I shall return to that meeting later in this section of these Reasons’ in para [44] (his Honour did not, in fact, so return);·the addition of the word ‘Agreed’ in para [54];·the addition of the word ‘Proposed’ in front of ‘Decision Brief’ in paras [54] and [56];·the addition of the word ‘proposed’ in front of ‘decision’ in para [62];·the substitution of the phrase ‘a referral which it was bound to make’ for the phrase ‘as it was bound to do’ at para [126];·the capitalisation of the word ‘Constitutional’ in paras [135] and [138];·the addition of the words ‘and afterwards’ and ‘so as to permit the construction of dwelling houses thereon’ in para [137]; ·various minor renumberings in paras [143] to [147]; and·the deletion of ‘clearly’ in para [147]. Into the less trivial category may be placed three paragraphs which, marked up to show the differences, are as follows:‘20Finally, the applicants claim that the respondents have been unjustly enriched at the expense of the landowners in the Heritage Estates because the State it has acquired land in the Heritage Estates at a significant undervalue and the other respondents have acquired other advantages.23It will be necessary also to consider the claim for unjust enrichment against the respondents and against the State in particular.149Only one of the applicants (Mr Talarico Massaioli) has accepted the Foundation’s offer to purchase land in the Heritage Estates.’

Ratio Decidendi

Legal Principle Established

The appellants’ submission was that to the extent that decisions had been made by the Federal Minister to fund the voluntary acquisition program these were ultra vires the Financial Management and Accountability Act 1997 (Cth) and the Natural Heritage Act. This argument proceeded on the premise that an acquisition contrary to s 51(xxxi) had been established. For the reasons we have already given, the arguments which would make good that premise should be rejected. It is not, in that circumstance, necessary to consider this aspect of the matter any further.(c) The Relevant Considerations Argument There were two matters which were said to be relevant and which were alleged not to have been considered by the Federal Minister in making his refusal decision of 13 March 2009. These were:(a)the adverse socio-economic impacts on, and substantial losses to, the class members caused by the refusal decision. In this regard, it was said that the Federal Minister had failed to have regard, or sufficient regard, to a report called the Stubbs report (which had been prepared as part of the process leading to the Federal Minister’s decision), the views of the Shoalhaven Landowners Association or those of the Council; and(b)the fact that there would be no, or no significant, impact on the land as a viable habitat. In this regard, it was said that the Federal Minister had failed to take into account, or sufficiently into account, a report prepared by Ms Gabrielle Kibble in 1994 for the NSW Department of Planning. These arguments both involve two steps: first, that the nominated matter was relevant in an administrative law sense; and, secondly, that it was not considered. The concept of a relevant consideration in administrative law denotes a matter of which a decision-maker is bound to take account. This is a legal issue to be determined from the terms of the law under which the decision is made. This will include those matters which the law explicitly says must be taken into account but also other matters when this is discernible from the subject-matter, scope and purpose of the law: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 39-40 per Mason J. The EPBC Act makes elaborate provision for what the Federal Minister is to take into account in reaching a decision. In particular he is required to consider as ‘mandatory considerations’ the economic and social matters arising from the proposal (s 136(1)(b)). Further, he is required by s 136(1) in approving action covered by ss 18, 19 or 26 to take account of ‘matters relevant to any matter protected’ by those provisions. This would include the extent of any environmental impact. In those circumstances, we would accept that both the socio-economic and environmental consequences of the approval were mandatory considerations in the Peko-Wallsend sense. The Federal Minister is also bound to consider any public environment report which has been prepared under s 99: s 136(2)(c)(i). Such a report was prepared in this case and contained the report which had been prepared by Dr Stubbs and upon which the appellants rely. In that sense, we accept that the Federal Minister was bound to take account of his report.