Italiano v The Water Corporation

[2019] WASC 395

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   ITALIANO -v- THE WATER CORPORATION [2019] WASC 395

CORAM:   KENNETH MARTIN J

HEARD:   ON THE PAPERS

DELIVERED          :   4 NOVEMBER 2019

FILE NO/S:   CIV 1976 of 2016

BETWEEN:   ANTONIO ROCCO ITALIANO

ANGELINA ITALIANO

Plaintiffs

AND

THE WATER CORPORATION

Defendant

Catchwords:

Practice and procedure - Further and better discovery issues - Late defence change to deny three lots were adjoining land - Counter reply of estoppel by plaintiffs - Turns on own facts

Legislation:

Land Administration Act 1997 (WA)

Result:

Plaintiffs' application dismissed

Category:    B

Representation:

Counsel:

Plaintiffs	:	No appearance
Defendant	:	No appearance

Solicitors:

Plaintiffs	:	JNC Legal
Defendant	:	Herbert Smith Freehills

Case(s) referred to in decision(s):

Merrick Tyler Pty Ltd v Commissioner of Main Roads [2014] WASC 166

Merrick Tyler Pty Ltd v Commissioner of Main Roads [2015] WASCA 82

KENNETH MARTIN J:

1. With a four day trial in this land resumption compensation dispute litigation due to commence on 25 November 2019, the parties, consequent upon a 'health check' directions hearing of 17 October 2019, asked the court to determine on the papers, two disputed interlocutory applications concerning discovery or further and better discovery issues.

2. The stimulus for the late applications appears to be the plaintiffs response to the re‑amended defence as filed by the defendant on 24 September 2019 - under which it pleads at par 28 that lots 997, 553 and 3120 are not 'adjoining land' within the meaning of, and for the purposes of, s 241(7) of the Land Administration Act 1997 (WA) ('the LAA').

3. Consequently, it is contended by the defendant that no compensation is payable to the plaintiff in relation to the reduction in value of those lots by reason of a taking. 

4. The late pleading change by the defendant to contend negatively as regards the adjoining land status of some of the plaintiffs' lots led to a reply then being filed on the part of the plaintiffs on 10 October this year - now alleging the defendant was estopped from changing of its position to the alleged prejudice of the plaintiffs (par 11).  Under par 14 of the reply it is pleaded:

   [i]n the premises to paragraph 1 to 13 above, it is unconscionable for the Defendant to rely upon paragraphs 28 and 38 of the Re‑Amended Defence to now say that no compensation is payable to the Plaintiffs in relation to the reduction of the value of lots 997, 553 and 3120 by reason of the taking of the Taken Land pursuant to s 241(7)(b) of the LAA, in circumstances when its former position was the foundation for its statutory offer, its advance payment and its conduct of the litigation up to 24 September 2019 (including the position taken by its valuer in the conferral of valuation experts).

5. Although I do not set them out, paragraphs 10, 11 and 12 of the reply of the plaintiffs respectively contend for the defendant's change of position under its re‑amended defence and that the defendant's conduct induced them to believe that the defendant, in effect, by the conduct of the litigation and by the statutory offer, had accepted then that lots 997, 553 and 3120 were all adjoining land vis-à-vis the taken land, and thereby in effect meeting the terms of s 241(7) of the LAA. Under par 11 of the reply the plaintiffs say that they relied on the defendant's conduct commencing from the plaintiffs' decision to refuse the defendant's statutory offer to them and to instead opt, in effect, to seek a greater amount of compensation by litigation, and further, that the defendant's conduct has influenced their actions, including the manner of prosecuting the litigation, for instance, by not obtaining additional or alternative valuation expert evidence at an earlier time.

6. For present purposes it is helpful to start from the chronology of relevant underlying events, as helpfully provided under the plaintiffs' initial written submissions towards them pursuing further discovery from the defendant.  That chronology provides:

Date	Event
30 June 2010	Taking date.
11 November 2011	Plaintiffs' claim for compensation
20 April 2012	Defendant's offer of compensation
31 May 2012	Advance payment made
3 February 2015	Decision delivered in Merrick Tyler Pty Ltd v Commissioner of Main Roads [2015] WASCA 82
13 June 2016	Writ and statement of claim filed
1 September 2016	Defence filed
10 August 2018	Amended Defence filed
1 October 2018	Defendant's expert valuation of Mr Keith Wilson is filed
10 April 2019	Valuers conferral report is signed
24 September 2019	Re-Amended Defence is filed
10 October 2019	Reply is filed.

1. The plaintiffs' written submissions supporting the application for specific discovery filed 22 October 2019 provide a long background summary to events surrounding this litigation and the emergence of the plaintiffs' estoppel contention regarding the defendant's recent pleaded denial that the three lots at issue were not 'adjoining land'. 

2. As regards specific discovery however, the relevant components of the plaintiffs' written submissions are found under par 56 through 59 -where the plaintiffs say, first, that they can, but should not have to, rely upon inference to prove that the contents of the statutory offer of compensation by the defendant at 20 April 2012 under the terms of s 217 of the LAA, had relied upon a (written) report or reports that had included damage sustained by the plaintiffs' three lots, 997, 553 and 3120, in effect, as I understood the submission, on a premise that those reports had (then) considered the plaintiffs' three lots were 'adjoining land' within the meaning of s 241(7) of the LAA.

3. The plaintiffs' contention then is that because discovery is a continuing obligation and the plaintiffs have only and proportionately targeted a limited number of documents directly related, they say, to what I understand to be their estoppel plea under their reply, that an order as seen below seeking specific discovery should now be made against the defendant. 

4. The order sought was that:

   the Defendant give specific discovery of all documents relating to:

   (a)the examination of the Plaintiffs' claim for compensation lodged 11 November 2011; and

   (b)any report or reports 'made as to the value of the interest as to which no dispute exists and as to the damage sustained' by the Plaintiffs (following their claim for compensation lodged 11 November 2011) including instructions to consultants and reports from consultants engaged by the Defendant,

   preceding the offer made to the Plaintiffs dated 20 April 2012.

5. Before discussing that application for specific discovery further, it is helpful to briefly divert, to see first the text of s 217 of the LAA where, under pt 10 Div 3 in that Act, the notion of a statutory offer of compensation by an acquiring authority is dealt with. Then, I briefly address the terms of s 241(7) of the LAA, found in pt 10 Div 5.

Statutory provisions of the LAA

1. Section 217 relevantly provides:

   (1)If a claim is made under this Part and the acquiring authority does not dispute the claimant's title to the interest in land, or disputes it only in part, the authority must, within 90 days after the service of the claim or, if further particulars were required, within 90 days after the particulars were furnished, cause the claim to be examined, and a report made as to the value of the interest as to which no dispute exists and as to the damage sustained by the claimant by reason of the taking.

   (2)…

   (3)As soon as possible after a report under (1) or (2) is received by the acquiring authority, it must serve on the claimant in an approved form an offer of compensation with respect to the interest in the land or the part of the interest in question.

   (4)…

   (5)An offer under this section is an admission by the authority of the claimants title to the interest in land in respect of which it is made.

2. Relevantly to the plaintiffs' submission concerning further specific document, discovery references will be noted to the claim being examined under s 217(1) and then, to the report made as to the value of the interest.  See also a further reference to a report in s 217(3).

3. I turn to s 241(7) which, as mentioned, appears in pt 10 Div 5 under the Division heading 'Assessing compensation'. It provides:

   If the fee simple in land is taken from a person who is also the holder in fee simple of adjoining land, regard is to be had to the amount of any damage suffered by the claimant ‑

   (a)due to the severing of the land taken from that adjoining land; or

   (b)due to a reduction of the value of that adjoining land,

   however, if the value of any land held in fee simple by the person is increased by the carrying out of, or the proposal to carry out, the public work for which the land was taken, the increase is to be set off against the amount of compensation that would otherwise be payable under paragraph (b).

4. Relevantly, there appears to be a contention by the plaintiffs as regards a reduction in the value of its adjoining land under s 241(7)(b) in circumstances where the recently re‑amended defence of the defendant has put that adjoining land issue into dispute. Of course, whether or not the land is to be characterised as adjoining land or not relevantly presents as an exercise for the trial.

5. The defendant, as a relevant 'acquiring authority' under s 247(1), resists the present application for specific discovery, or at least resists its breadth.

The written submissions of the defendant resisting the scope of specific discovery

1. By the defendant's written submissions of 25 October 2019, it maintains that all documents sought by the plaintiffs are irrelevant to the issues in dispute.  Nevertheless, it informs (at par 2) that on 24 October 2019, in effect, without prejudice to that position, it provided the plaintiffs with:

   (a)report prepared by Keith Wilson dated 27 February 2012 (attaching instructions from Freehills dated 10 February 2012); and

   (b)report by Ross Lambert dated 16 March 2012 (attaching instructions from Freehills dated 10 February 2012).

2. The defendant's submissions advance to say that there were no other reports prepared in accordance with the requirements of s 217(1) of the LAA and so consequently, having provided such reports, there is no basis to provide anything further. It is contended, in effect, that internal documents in relation to the defendant's required examination of the plaintiffs' claim under s 217(1), or instructions given to consultants engaged by the defendant, save to the extent disclosed within the reports now provided to the plaintiffs, are irrelevant.

3. The defendant points to its statutory offer of compensation made at 20 April 2012 as duly rejected by the plaintiffs to point out that the offer amount, then of $1,017,500 plus interest at 6% per annum, in accord with s 217 of the LAA, on its face had made no reference to any founding documents or to any internal considerations or, as I would observe, to any underlying premise explaining the basis of the amount of the statutory offer as then put.

4. The defendant's submission essentially is that such internal uncommunicated considerations do not assist the plaintiffs' estoppel arguments. 

5. To establish an estoppel there must generally be conduct amounting to something in the nature of the representation, then reliance on the representation and, as well, a following detriment to the recipient of the representation by reason of their reliance, all of which in aggregate deliver a scenario that presents as unconscionable. 

6. However, wholly internal documents of the defendant preceding its statutory offer, which are necessarily not contended to have been seen or relied upon by the plaintiffs cannot arguably advance an estoppel argument.  Hence, the defendant says the plaintiffs are essentially fishing and so their application should be refused.

7. The defendant's submissions concerning the irrelevance of its own internal documents as are now sought by the plaintiffs presently upon their application must be accepted as correct.  On my assessment, no sensible basis has been established to contend such internal documents could possibly be relevant to advancing the plaintiffs' arguments of estoppel even assuming that argument was viably open to the plaintiffs at trial in order to blunt the (non-)adjoining land problem - a looming controversy about which I presently express no pre‑trial opinion whatsoever.

Cross application by the defendant

1. The defendant also cross‑contended that the plaintiffs should give it discovery in regard to the estoppel issue, which they have raised under par 1 to 12 of their reply.  In particular, pointing to the par 12 plea of relevance, the defendant observes that the plaintiffs say that they relied upon the defendant's conduct, commencing with their decision to reject the statutory offer and to pursue litigation seeking greater compensation. 

2. The defendant says the plaintiffs have requested discovery in relation to the estoppel issues now looming in the trial, yet the plaintiffs to date have refused to provide that discovery. 

3. The defendant seeks the documents which go to the merit of the estoppel claim to be provided within seven days, albeit with the defendant's lawyers pointing out by correspondence of 29 October 2019 that, for the avoidance of doubt, and in the interests of efficiency, '…the defendant does not require the plaintiffs to give discovery of any documents the defendant prepared or which it provided to the plaintiffs'. 

4. The defendant formalised its application for its cross-orders against the plaintiff for discovery on the estoppel issue under its minute of 29 October 2019. 

5. The plaintiffs responded by a tranche of further written submissions of 30 October 2019. 

6. By those submissions the plaintiffs' lawyers say that having been advised on 24 October 2019 that the s 217 LAA 'reports' as now received were the only reports prepared in accordance with s 217(1) (par 3 of the defendant's first tranche of written submissions of 25 October 2019) that they 'do not press for any further discovery with category B of their request'.

7. As I read par 5 through 8 of the plaintiffs' written submissions, the plaintiffs still appear to press for the internal documents of the defendant on their discovery application, albeit they acknowledge a lesser relevance of internal documents 'as regards conduct amounting to a representation …' (par 7).

8. In my view, as seen, that concession does not go far enough. By my assessment, the plaintiffs' application for the defendant's internal s 217(1) documentation is misconceived, and should be rejected.

9. The balance of the plaintiffs' further written submissions, commencing at par 11, then seek to address the defendant's cross application for discovery from them as regards estoppel issues. 

10. Towards this disputed discovery issue, it would appear the plaintiffs have also made a concession as regards their pleaded reliance upon the defendant's conduct under par 12 of the plaintiffs' reply. 

11. The plaintiffs now say that they have written to the defendant on the afternoon of 29 October 2019, indicating that they have provided an informal list of documents relevant to the plaintiffs' pleaded estoppel by representation reliance, under par 12 of the reply.  Appended to the plaintiffs' further written submissions is the informal list of documents under a heading, 'Specific Discovery of Documents Related to paragraph 12 of the Reply'.  By the list some 11 documents or categories of documents are identified.  But under part 1(b) of informal list category 9 'bundle of records of communications between JNC Legal (the lawyers on record for the plaintiffs) and the Plaintiffs' (at various dates) is said to be the subject of a claim of legal professional privilege against production.  Moreover, list categories 10 and 11 reading respectively 'bundle of without prejudice offers made by the Plaintiffs' and 'bundle of without prejudice offers made by the Defendant' are the subject of discrete objections against inspection, on the basis of asserted without prejudice privilege.

12. The ensuing submissions of the plaintiffs make reference to the first instance decision of Le Miere J in Merrick Tyler Pty Ltd v Commissioner of Main Roads [2014] WASC 166 delivered 14 May 2014 and then to the ensuing decision of the Court of Appeal (Newnes JA, Murphy JA and Beech J) dismissing that appeal, Merrick Tyler Pty Ltd v Commissioner of Main Roads [2015] WASCA 82. As to the first instance decision, the plaintiffs say that they had not until that decision 'contemplated the possibility that all their six lots were not included in the calculation of the "damage sustained by the claimant by reason of the taking" in reference to s 217(1) of the LAA'.

13. The plaintiffs' further written submissions advance to contend no additional discoverable documents arise from pars 6, 7, 11, 13 or 15 of their reply and so the informal list of discovery as provided on 29 October 2019 should suffice to satisfy the defendant's application.

14. I have now had a late indication by the defendant's legal representatives upon their cross application to the effect that they are satisfied with the informal list of documents as provided by the plaintiffs for the purposes of their specific discovery application pursued in respect of the estoppel issue raised under the plaintiffs' reply.

15. I should indicate that my view is that discovery by the plaintiffs on the estoppel issue is relevant to the trial proceedings and should be provided.  If the parties have now resolved the matter between themselves informally, then so be it.  However, given the imminence of trial, they should proceed on the basis that I accept the defendant's submission as to relevance on this issue and that discovery ought be given and further given within a maximum seven day timeframe, given the imminence of trial.

16. I am not called upon, at this stage at least, to address any disputed privilege issues. 

17. As regards issues of costs of these papers applications, they should all, in my view, lie in the ultimate cause of the pending trial.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

DW
Associate to the Honourable Justice Martin

4 NOVEMBER 2019