Hungry JACK'S Pty Ltd v The Trust Company (Australia) Ltd
[2018] WASC 64
•26 FEBRUARY 2018
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: HUNGRY JACK'S PTY LTD -v- THE TRUST COMPANY (AUSTRALIA) LTD [2018] WASC 64
CORAM: TOTTLE J
HEARD: 18 DECEMBER 2017
DELIVERED : 26 FEBRUARY 2018
FILE NO/S: CIV 3129 of 2016
BETWEEN: HUNGRY JACK'S PTY LTD
First Plaintiff
SELDEN PTY LTD
Second PlaintiffAND
THE TRUST COMPANY (AUSTRALIA) LTD
First DefendantCLASSIC SWAN PTY LTD AS TRUSTEE FOR IANNANTUONI FAMILY TRUST
CELESTINO MARIO IANNANTUONI
GIUSEPPINA ANTONIETTA WETTER
Second Defendants
Catchwords:
Application for determination of preliminary issue - Claim for adverse possession - Trespass counterclaim - Whether separate hearing warranted
Legislation:
Rules of the Supreme Court 1971 (WA), O 32 r 4
Transfer of Land Act 1893 (WA), s 222
Result:
Application granted
Category: B
Representation:
Counsel:
First Plaintiff : Dr J Schoombee
Second Plaintiff : Dr J Schoombee
First Defendant : Ms K J Levy
Second Defendants : No appearance
Solicitors:
First Plaintiff : HWL Ebsworth Lawyers
Second Plaintiff : HWL Ebsworth Lawyers
First Defendant : K J Levy
Second Defendants : No appearance
Case(s) referred to in judgment(s):
Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47
TOTTLE J:
Introduction
In these proceedings the plaintiffs seek a declaration that any title of the first defendant to a parcel of land in Yokine[1] (the Disputed Land) has been extinguished by reason of the plaintiffs' adverse possession of it. The Disputed Land is adjacent to the first plaintiff's fast food restaurant located next to the Dog Swamp shopping centre. It has been and is used by the first plaintiff for car parking and for drive-through access.
[1] Part of Lot 18 on Diagram 94853.
The first defendant is the registered proprietor of the Disputed Land and the shopping centre. It holds these assets as part of 'an open ended managed investment scheme'.
By its counterclaim the first defendant claims damages for trespass by the first plaintiff over the Disputed Land. In its counterclaim the first defendant alleges that but for the trespass it would have redeveloped the shopping centre. I refer to this allegation in more detail below.
The substantive relief sought by the plaintiffs is a declaration that the second plaintiff, alternatively the first plaintiff:
(a)is the proprietor of an estate in fee simple in possession of the Disputed Land; and,
(b)is entitled to be registered as such proprietor pursuant to s 222 of the Transfer of Land Act 1893 (WA).
The plaintiff seeks an order pursuant to Rules of the Supreme Court 1971 (WA) O 32 r 4 (RSC) that the Court hear and determine as a preliminary issue whether the second plaintiff alternatively the first plaintiff has acquired full title of an estate in fee simple in possession of the Disputed Land (adverse possession issue).
On 9 December 2016, upon the first plaintiff providing an undertaking as to damages, the first defendant undertook not to interfere with the first plaintiff's or the public's access to the Disputed Land.
The evidence
In support of its application, the plaintiffs rely on two affidavits of Christopher Paul Hood sworn on 17 November and 13 December 2017. Mr Hood is a solicitor employed by the plaintiffs' solicitors. The first defendant relies on the affidavit of Ms Nikki Panagopoulos sworn 7 December 2017.
The adverse possession claim
The factual allegations made by the plaintiffs in support of the adverse possession claim are limited. They may be summarised as follows.
In about 1971 the second plaintiff became the owner of land which now comprises Lot 20 on Diagram 96882 (the Land). In 1977 the second plaintiff sold the Land before re‑purchasing it in November 1988 and selling it again in April 2002. Since about 1970 the first plaintiff has leased or subleased the Land and since about 1971 the plaintiff has operated its fast food restaurant on the Land.
In about 1980 the first plaintiff built a drive‑through lane on the Disputed Land. Since then it says it has made improvements to and maintained the drive‑through. The Disputed Land has also been used for parking for customers of the first plaintiff's fast food restaurant.
In 1977 the second plaintiff executed a transfer of the Disputed Land to Javy Pty Ltd which owned Lot 18 on Diagram 94853. The transfer was not registered until December 1984.
In January 2011 the first defendant became the registered proprietor of the Disputed Land.
The second defendants are the current proprietors of the Land and since 2009 they have leased it to the first plaintiff.
The plaintiffs allege that the second plaintiff has, through and by the adverse possession of the first plaintiff as its lessee for a period in excess of 12 years from 1988 to 1 July 2002, acquired full title of an estate in fee simple in possession of the Disputed Land, alternatively, by such adverse possession, the first plaintiff acquired such title.
On 12 June 2015 a representative of the first defendant wrote to the first plaintiff advising that the first defendant owned the Disputed Land, and that the first plaintiff was unlawfully occupying the Disputed Land.
For the purposes of this application it is unnecessary to canvass the defences raised in the first defendant's lengthy defence. In short, the first defendant alleges that to the extent to which the first plaintiff occupied the Disputed Land in the period of alleged 'adverse' possession it did so with the permission of the registered proprietors. The nature and extent of the possession alleged by the plaintiffs is challenged by the first defendant. My impression, reinforced by the first defendant's submissions on this application, is that the defences are unlikely to require much in the way of oral evidence. The defences rely primarily on documentary evidence and legal argument.
The counterclaim
The first defendant counterclaims for damages for trespass. It pleads that but for the trespass it would have done one or both of the following:
•constructed a building on the Disputed Land and leased it for profit;
• redeveloped the shopping centre to achieve the following:
•an increase in the net lettable area from 6,529 sqm to 8,029sqm of 'high quality retail space';
•introduced a new five aisle supermarket of 1,650sqm into the shopping centre;
• relocated existing tenancies within the shopping centre; and
•added seven new speciality stores to create a food and beverage precinct with cafes and restaurants in a 'street activity style format'.
The first defendant says that it has been unable to redevelop the shopping centre as it wished to do because the Disputed Land is a necessary element of the redevelopment. It says that it has lost the profits that it would have been able to make.
The first defendant acknowledges that the issues raised by its counterclaim will involve opinion evidence being given by a town planner and a valuer.
Relevant principles
Order 32 r 4 of the RSC provides:
4.Time of trial of questions or issues
The Court may order that any question or issue arising in a cause or matter whether of law or fact or partly or law and partly of fact, and whether raised by the pleadings or by agreement of the parties or otherwise be tried separately from any other question or issue whether before at or after the trial or further trial of the proceedings, and may direct that a case and the question or issue for decision be stated.
In Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd McKechnie J distilled the principles relevant to making an order for a trial of a preliminary issue:[2]
[2] Carlo Nobili SpA Rubinetterie v Militaire Nominees Pty Ltd [2004] WASC 47 [4] (McKechnie J).
•A separate trial of issues is only appropriate in clear and simple cases.
•Separate trials of issues should only be embarked upon when the utility, economy and fairness are beyond question.
•The fact that the resolution of a separate trial may determine the litigation is relevant.
•Separate trials of issues may be appropriate where it is likely to save expense and inconvenience.
•There is a focus in the Rules of the Supreme Court on the expedition of determination of matters before the Court and separate trials of issues may advance the expedition.
•A possibility that the determination of issues tried separately may lead to settlement should be taken into account even though the issues may not finally dispose of the action.
• In many cases the formulation of specific questions to be tried separately, from and in advance of other issues, will assist in the resolution of the matters in issue if the questions are capable of final answer in accordance with the judicial process.
•Separate trials are inappropriate where the result depends on complex issues of fact or when a preliminary question is one of mixed fact and law.
•The procedure should be confined generally to cases where facts are complicated and the legal issues short, otherwise it can be a treacherous shortcut.
•Separate trials may be productive of delay, extra expense and uncertainty of outcome, which they are intended to avoid. Saving some time is often illusory when the parties have the necessity of making full preparation and factual matters relevant to one issue are relevant to others which overlap.
•There is potential for further appeals.
An outline of the parties' submissions
The plaintiffs submit:
(1)there is a clear demarcation between the adverse possession issue and the remaining issues, and the remaining issues would be resolved by a finding that first plaintiff or the second plaintiff have possessory title over the Disputed Land;
(2)the only evidential overlap between the adverse possession issue and the remaining issues is the fact of the first plaintiff's possession of the Disputed Land since 2015, this is not in dispute;
(3)the first defendant's counsel has said that the first defendant only intends to tender documents, and not to lead evidence on the adverse possession issue;
(4)the issues raised in the counterclaim will require the plaintiffs to put on expert evidence from a town valuer and a planner that would not be led at a trial of the adverse possession issue;
(5)if possessory title to the Disputed Land is established, the costs of responding to the counterclaim will have been wasted;
(6)a trial of the adverse possession issue will likely last three or four days, as opposed to six or seven for a trial of all the issues;
(7)preparation of expert reports in response to the counterclaim will likely delay the trial by four months;
(8)significant additional discovery will likely be required from the first defendant in relation to issues arising from the counterclaim; and
(9)the plaintiffs say that a trial of the adverse possession issue is consistent with the objectives of case management.
In response, the first defendant submits:
(1)it is suffering financial prejudice that will continue so long as the final resolution of the issues is delayed;
(2)whether the use of the Disputed Land by the plaintiffs was authorised by the first defendant's predecessor in title, and the nature and extent of that use will need to be determined at a trial of the adverse possession issue;
(3)a proper consideration of the adverse possession issue will likely require four or five days, whereas a hearing of first defendant's counterclaim will likely add one day to the hearing;
(4)the first defendant has already engaged a qualified valuer to prepare an expert opinion on the question of the difference in value of Lot 18 with and without development, and an expert to provide a report as to whether the zoning of the Disputed Land could have been changed to allow construction of the TAB;
(5)the plaintiffs' estimate of the cost of providing the expert evidence is excessive;
(6)cross‑examination of experts at trial would be limited to areas of difference identified after conferral, and would likely be limited to one day or less;
(7)it is for the first defendant to decide on the extent of the evidence it leads in support of its counterclaim and this will not give rise to the complexity feared by the plaintiffs; and
(8)the first defendant has already given discovery of all documents relevant to the case upon which the first defendant relies.
Accordingly, the first defendant contends that to have a trial of the adverse possession issue would be likely to significantly delay a final determination in its favour, and would cause irremediable prejudice to its investors.
Disposition
In considering this application the cautionary observations to the effect that separate trials can be productive of delay, extra expense and uncertainty of outcome have been at the forefront of my mind. Indeed, these observations were reinforced by the cogent submissions of the first defendant's counsel.
I am, however, of the view that the adverse possession issue should be determined separately and in advance of the first defendant's counterclaim for the following reasons.
First, I consider that the counterclaim will involve a much wider range of factual issues than those that it will be necessary to resolve to determine the adverse possession claim. It will be necessary for the assumptions about past hypothetical facts on which the experts express their opinions to be proved or disproved. It is not possible to detail the factual issues, but it is reasonable to contemplate that they would encompass matters such as: whether the first defendant's development or redevelopment could and would in fact have been implemented; whether this would have in fact increased the lettable area of the shopping centre; and what extra rental income might have been received.
Second, the opinion evidence on the town planning and valuation issues have the capacity to be complex. It is highly unlikely that this evidence will add only one day of hearing time to the trial. Moreover, the preparation of this evidence will add significantly to the cost of trial preparation.
Third, the factual matrix for the adverse possession claim is comparatively limited. In my view a three to four day time estimate is generous.
Fourth, there is no significant overlap between the adverse possession issue and the first defendant's trespass. A separate trial will not result in witnesses having to give evidence twice.
Fifth, if the plaintiffs succeed in their claim, the trespass claim falls away. If the plaintiffs' action fails, then the first defendant will be entitled to possession and the undertaking given by it will be discharged. Further, the first defendant will be entitled to enforce any remedies it has pursuant to the first plaintiff's undertaking as to damages.
I will hear the parties as to the precise terms of the order and costs.
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