Landan Development Pty Ltd v Sydney Metro; Opera Australia v Sydney Metro; Altomonte Holdings Pty Ltd v Sydney Metro

[2019] NSWLEC 65

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Landan Development Pty Ltd v Sydney Metro; Opera Australia v Sydney Metro; Altomonte Holdings Pty Ltd v Sydney Metro [2019] NSWLEC 65
Hearing dates:	13 May 2019
Date of orders:	20 June 2019
Decision date:	20 June 2019
Jurisdiction:	Class 3
Before:	Moore J
Decision:	See orders at [65]
Catchwords:	SEPARATE QUESTION - construction of statutory provision in Transport Administration Act 1988 potentially determinative of whether proceedings can be presently dealt with or whether they require to be postponed until the Sydney Metro line tunnel is actually constructed - separate question answered in the affirmative - affirmative answer to separate question does not require deferral of determination of one of the proceedings as the acquiring authority concedes the tunnel under one premises is sufficiently complete to engage the necessity for further consideration of that application - necessity for consideration of a second separate question concerning statutory construction of the Act - matter set down for directions for settlement of second separate question and pre-trial directions concerning it
Legislation Cited:	Land Acquisition (Just Terms Compensation) Act 1991 Transport Administration Act 1988, Sch 6B(2)(1)
Cases Cited:	Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26
Category:	Procedural and other rulings
Parties:	Landan Development Pty Ltd (Applicant in Matter No 179801 of 2018) Opera Australia (Applicant in Matter No 183630 of 2018) Altomonte Holdings Pty Ltd (Applicant in Matter No 253580 of 2018) Sydney Metro (Respondent in all matters)
Representation:	Counsel: Mr I Hemmings SC/Ms J McKelvey, barrister (Applicant in Matter 179801 of 2018) Mr T Hale SC/Mr D Robertson, barrister (Applicant in Matter No 183630 of 2018) Ms J McKelvey, barrister (Applicant in Matter No 253580 of 2018) Ms S Duggan SC/Mr L Waterson, barrister (Respondent in all matters)   Solicitors: Addisons Lawyers (Applicant in Matter No 179801 of 2018) Hassett Lee & Co (Applicant in Matter No 183630 of 2018) Sparke Helmore (Applicant in Matter No 253580 of 2018) Crown Solicitor’s Office (Respondent in Matter Nos 179801 and 183630 of 2018) Ashurst Australia (Respondent in Matter No 253580 of 2018)
File Number(s):	179801 of 2018; 183630 of 2018; 253580 of 2018
Publication restriction:	No

TABLE OF CONTENTS

Introduction

The disputed statutory provision

The separate question

The hearing on the separate question

The effect of Sch 6B(2)(1)(a) and (b)

A possible second question?

Triggering a potentially available compensation determination process?

Consideration of this separate question

Introduction

The Review of Environmental Factors for the project

The oral submissions

The written submissions

Introduction

The submissions on behalf of the acquiring authority

The submissions on behalf of Landan

The submissions on behalf of Opera Australia

The submissions on behalf of Altomonte Holdings

Submissions in reply for the acquiring authority

Consideration of, and conclusion on, this separate question

Where to now?

Introduction

Proceeding to a second question

Costs

Orders

JUDGMENT

Introduction

1. As part of the suite of major infrastructure projects being constructed by the New South Wales Government, construction of the new Sydney Metro line requires tunnelling under a number of properties. The government entity charged with the acquisition of property to permit the construction of the Metro line is Sydney Metro. To permit the tunnelling to be undertaken, Sydney Metro has compulsorily acquired a subsurface stratum under all the relevant superjacent properties. These stratums are for the purpose of accommodating all the construction elements required for the tunnel portion of the Metro project.

2. These three proceedings have been commenced by the owners of properties below which a stratum has been acquired for the purposes of Sydney Metro’s tunnel. Each of the three proceedings disputes the determination by the Valuer General that that owner does not have an entitlement to compensation for the relevant compulsory acquisition.

The disputed statutory provision

3. Sch 6B - Special provisions for underground rail facilities of the Transport Administration Act 1988 (the Transport Administration Act) contains the relevant statutory requiring consideration for this separate determination. The provision is in the following terms:

Sch 6B Special provisions for underground rail facilities

1   Interpretation

(1)   In this Schedule:

rail authority means RailCorp, Sydney Metro, Sydney Trains, ARTC or TfNSW.

underground rail facilities means:

(a)   rail infrastructure facilities that are located under the surface of land, and

(b)   structures and facilities for or associated with the provision of railway services (such as railway stations, platforms, access ways and vents), being structures and facilities that are located under the surface of land.

(2)   For the purposes of this Schedule, an underground rail facility is taken to be owned by a rail authority if the facility is on land owned or occupied by the rail authority (even if the facility is in fact owned by another person).

(3)   This Schedule extends to underground rail facilities in existence on the commencement of this Schedule.

2   No compensation for acquisition of land for underground rail facilities

(1)   If land under the surface is compulsorily acquired under the Land Acquisition (Just Terms Compensation) Act 1991 for the purpose of underground rail facilities, compensation is not payable under that Act unless:

(a)   the surface of the overlying soil is disturbed, or

(b)   the support of that surface is destroyed or injuriously affected by the construction of those facilities, or

(c)   any mines or underground working in or adjacent to the land are thereby rendered unworkable or are injuriously affected.

(2) Section 62 (2) of the Land Acquisition (Just Terms Compensation) Act 1991 does not apply to the compulsory acquisition of land under that Act for the purpose of underground rail facilities.

(3)   Expressions used in this clause have the same meaning as in the Land Acquisition (Just Terms Compensation) Act 1991.

(4)   This clause extends to the acquisition of land for the purpose of underground rail facilities before the commencement of this clause, but not so as to affect any payment or award of compensation made before that commencement.

4. As a threshold matter, Sydney Metro relies upon the terms of Sch 6B(2)(1)(a) and (b) as providing the proper basis upon which to exclude any entitlement to compensation for the acquisition absent demonstrated actual satisfaction of one or other of the preconditions there set.

5. The Valuer General has made a determination, in each instance, that no compensation is payable.

The separate question

6. When the first of these matters (the Landan proceedings) came before me for a directions hearing in the LVC list on 31 August 2018, it seemed to me that the question of whether or not there was a present (or, indeed, any) entitlement to seek to claim compensation was dependent on how the terms of the above quoted statutory provision were to be construed and applied.

7. If the potential for making a claim for compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act) could only crystallise in the future (after future triggering events satisfying either Sch 6B(2)(1)(a) or (b)), then there would be no basis upon which any determination of compensation could be made at the present time.

8. I suggested that it might be appropriate for there to be a separate question that dealt with this issue. That course has been adopted.

9. The terms of the separate question requiring determination in these proceedings are:

Are the circumstances identified in paragraphs (a), (b) and (c) of clause 2 of Sch 6B to the Transport Administration Act 1998 limited to circumstances of the kind specified that have occurred after construction of the relevant underground rail facilities?

10. On 12 December 2018, Sheahan J set the separate question down for a two‑day hearing.

11. In my capacity as the LVC List Judge, I identified a total of six matters where the separate question determination had potential significant consequence for the timing of those proceedings.

12. Each of the Applicants, and the relevant acquiring authority (this term is used as, in at least one instance, Sydney Metro had not been identified as the acquiring authority), was advised that they would be heard on the separate question if they wished to participate in that hearing. In addition to Landan, the other two Applicants identified in the title to this decision elected to be heard; appeared; and made submissions on the separate question here being dealt with.

The hearing on the separate question

13. The Chief Judge allocated determination of this separate question to me. The hearing was conducted efficiently on behalf of the parties and was concluded in less than half a day.

The effect of Sch 6B(2)(1)(a) and (b)

14. In effect, Sch 6B(2)(1)(a) and (b), relevantly, provide jurisdictional gateways. One or both of these gateways must be open before there can be a valid invocation of the processes otherwise potentially arising with respect to the various heads of compensation set out in s 55 of the Just Terms Act.

15. As a consequence, the answer to this separate question would determine when it is appropriate to undertake an investigation of whether or not either (or, potentially both) of these gateways is open for each surface landowner under whose property a stratum has been compulsorily acquired for the purposes of a tunnel (in this case, a tunnel for the Sydney Metro project in each present instance).

16. It is to be observed, as later explained, that the primary area for present potential exploration of each of these claims does not arise from Sch 6B(2)(1)(a), but under Sch 6B(2)(1)(b). Although Mr Hemmings SC, counsel for Landan, informed me that the Review of Environmental Factors for this project envisaged that a surface settlement of five millimetres might be expected, it was not this anticipated settlement that provided the primary focus of his client's claim. As later discussed in the context of the potential necessity for a second separate question, that which gave rise, in his client's case, was the impact on development or redevelopment potential of the surface land.

A possible second question?

17. During the course of the hearing, both Ms Duggan SC, counsel for the acquiring authority, and Mr Hemmings made it clear that there was, in their opinion, likely to be the necessity for a further separate question if a potential claimant reached the point of being able to establish that circumstances existed where a claim (subject to satisfaction that either (or both) of the Sch 6B(2)(1)(a) and (b) gateways was open) might require compensation assessment.

18. This would arise, as I understood them, because of the necessity to determine precisely what was the scope of that which might arise to be compensable pursuant to Sch 6B(2)(1)(b).

19. What would need to be tested in such a further separate question would be whether this element of the statutory provision should be construed narrowly or whether or not a broader interpretation was appropriate. Such a broader interpretation would, if applicable, potentially encompass an entitlement to seek to claim compensation for any reduction in the development or redevelopment potential of the land above the tunnel stratum as a consequence of the actual or future existence of such a tunnel.

20. Such alteration of potential could arise as a result of construction entitlement restrictions being imposed as a consequence of the present or future presence of the tunnel (for example, on what limits on basement level construction or depths of supporting foundations would apply - with the latter potentially limiting the height of any future development/redevelopment).

Triggering a potentially available compensation determination process?

21. The position advanced on behalf of the surface landowners was that, if an expansive interpretation of Sch 6B(2)(1)(b) was to be adopted, future development/redevelopment restrictions had already come into existence as a consequence of the acquisition of the tunnel stratum and, hence, satisfied Sch 6B(2)(1)(b) as a triggering event for an assessment pursuant to s 55 of the Just Terms Act as to what was the entitlement to compensation for that surface landowner for that loss of development potential.

Consideration of this separate question

Introduction

22. During the course of the hearing of this separate question, it was clear that the acquiring authority proposed that the separate question be answered in the affirmative because, Ms Duggan submitted for the acquiring authority, the necessary relevant state of affairs mandated to be considered by Sch 6B(2)(1) could not be addressed, as to existence or otherwise, until after the tunnel construction was sufficiently advanced to provide a valid basis for assessment as to whether either (a) or (b) of the provision (or both of them) had occurred.

23. Unsurprisingly, the Applicant in each proceedings, a body which had had a substratum acquired, proposed that the separate question should be answered in the negative.

24. Although I have concluded, for the reasons set out in the following portion of this judgment, that this separate question should be answered in the affirmative, that is not the end of the matter.

25. The necessity to address matters further (at least in the Opera Australia proceedings) arises as a consequence of a concession made on behalf of the acquiring authority toward the end of the hearing of this separate question that circumstances now existed where tunnel construction had sufficiently advanced underneath the Opera Australia site to render it appropriate to address whether or not either (or both) of the tests in Sch 6B (2)(1) had been satisfied, thus opening a gateway to the potentiality of a claim pursuant to the Just Terms Act.

26. Whether such a gateway might be opened would depend, in very great measure, on what should be regarded as the correct construction of Sch 6B(2)(1)(b). The way forward in this regard is later addressed.

27. Given that which is later discussed concerning the basis for proceeding to consider a second separate question, it is unnecessary to set out a fully discursive explanation of the basis upon which the parties have approached this separate question and the authorities to which they have taken me in advancing their respective positions.

28. However, it does remain appropriate that I determine this separate question.

29. The process I have followed, therefore, is to provide an understanding of the oral submissions made during the hearing and accompany this with a summary of each of the written submissions (authorities cited omitted) made by the various Applicants and by the acquiring authority.

30. I have then provided what I consider to be a short but sufficient explanation for the basis of my conclusion on this separate question given that it will now be necessary to settle and determine a second separate question as to what is the potential scope of any opening of a jurisdictional gateway pursuant to Sch 6B(2)(1)(b) as to matters potentially enlivening the opportunity to make a claim pursuant to the Just Terms Act.

The Review of Environmental Factors for the project

31. During the course of the oral submissions on behalf of Landan, Mr Hemmings proposed that, in his submission, the acquiring authority had acknowledged, in its Review of Environmental Factors for the tunnel project, that there would actually be some surface settlement of his client’s land. By implication, this would open the Sch 6B(2)(1)(a) gateway. He said (Transcript, 13 May 2019, page 6, lines 40 and 41):

The respondent's own evidence shows that there will be settlement, and I prepared that as part of their REF for the project, it's only a few millimetres.

32. In response, Ms Duggan said on this proposition (Transcript, 13 May 2019, page 21, lines 33 and 34):

It's a prediction, your Honour, it's not a statement of fact, it's a prediction, it's the worst case prediction.

33. It seems to me, in circumstances, later explained, where there is now an appropriate vehicle for considering what might be the meaning of Sch 6B (2)(1)(b) for the reasons discussed, there is no necessity to address whether or not Mr Hemmings’ understanding is correct that there will be a settlement (thus potentially triggering the opening of the Sch 6B(2)(1)(a) gateway for his client) is unnecessary, in circumstances where tunnelling activity, as was also revealed during the course of the hearing, is substantially underway underneath his client’s property.

The oral submissions

34. I set out below relevant extracts from the matters dealt with during the course of the hearing to understand what was put to me during the course of the parties’ oral submissions.

35. The position advanced for the acquiring authority was that, although the scope of Sch 6B(2)(1)(b) might arise for consideration in the future, the necessary state of affairs to permit either of the gateways to be regarded as open was not presently in existence. As Ms Duggan submitted (Transcript, 13 May 2019, page 5, lines 2 to 6):

In this case we say this is a section which is specifically dealing with removal the property rights of the individual. It is not a case where the ambiguity is in relation to their property rights, the ambiguity is in relation to when the compensation entitlement is to be determined, not whether or not the property right is affected.

36. The submissions made by Mr Hemmings as to when the testing of the gateways should be undertaken can be understood, in summary, from his oral submissions (Transcript, 13 May 2019, page 6, line 43 to page 7, line 10):

(HEMMINGS): And the second things is of course, once the tunnel goes through and it is constructed, you've then got zones of influence that you can't affect, and you can't build on top of a tunnel, so it puts depth limits and the likes on the land. So, with respect, Ms Duggan is right that the provision that we're talking about doesn't determine how you approach compensation, it's not about compensation. So whether you've got a 5 millimetre surface disturbance or whether you've got a reduction in the support capacity, that triggers you to then go into the Just Terms Act and then you can make all the normal claims you could.

For example, an injurious affectation claim, although the tunnel has been constructed, the substrata through which it passes, the market value of that may be de minimis. But the fact that you may now need to incur many millions of dollars more in the development of the land injuriously affects the balance of the land. So it is a trigger, compensation which is otherwise on - and that's where I'm going to start in a second - can get turned off by this clause. So we have a second question because there was a concern about the de minimis nature of the settlement, for example.

and (Transcript, 13 May 2019, page 8, lines 27 to 42):

(HEMMINGS): Someone needs to wait until a point in time - we'll come back to that, but we don’t know what that is. Wait till a point in time until the soil is disturbed and so, in fact, the language is, "The surface of the soil has been," is the approach of interpretation, which Metro is taking if they are attempting to import a temporal element to these terms.

Well, they are, of course, at pains to accept in their written submissions that it's not temporal. And Ms Duggan is at pains in her submissions to accept that it's not temporal because there's great difficulty in trying to provide any tense, or consistent tense, to the language throughout the Act. What does need to be done, of course, is to demonstrate the state of affairs.

And it's a state of affairs, which is done at the acquisition date on the balance of probabilities, and it requires a prediction. As we say, that is a circumstance, which occurs in significant component parts of the application to the Just Terms Act. And as we say, in our written submissions, it's almost inevitable to be hypothesising about the future impact of something or not.

37. During a discussion I had with Mr Hemmings in the course of his submissions (Transcript, 13 May 2019, page 10, line 46 to page 11, line 11), I accepted that that which is dealt with in the schedule is not something which gives rise to a specific claim for compensation if either (or both) of the schedule’s elements is satisfied. What does occur is that a gateway might be opened that permits a claim to be made under the Just Terms Act as one or both of the gateways in the otherwise absolutely exclusionary provision is open, thus providing a path to the more general scheme of compensation provided for in the Just Terms Act proper as earlier set out.

38. Mr Hale SC, counsel for Opera Australia, took me through a history of the derivation of the provision before taking me to a number of authorities which he submitted supported the proposition that a present examination was appropriate as to whether either (or both) of the gateways was open.

39. Although it is necessary to determine this separate question, the practical imperative for doing so diminished significantly in light of what was revealed toward the end of the hearing. This concerned not only the necessity for a second separate question, as earlier discussed, but the fact that, as a matter of practicality, an appropriate vehicle now existed that could provide a basis for settling, hearing and determining such a separate question.

40. As a consequence, it seems to me that it is appropriate, for the purposes of determining this separate question, to set out in summary form the positions that were advanced on behalf of the participants in these proceedings and then to identify the outcome which I have determined is appropriate. However, as also explained in the following section of this decision, that is not the end of the utility of advancing these proceedings in a fashion consistent with s 56 of the Civil Procedure Act and move to a further step in order to determine the matters that are genuinely in dispute between the parties in these proceedings.

The written submissions

Introduction

41. I set out below a summary of each of the written submissions, together with a note of the paragraph in the relevant submissions from which the point is derived.

The submissions on behalf of the acquiring authority

42. The written primary submissions on behalf of the acquiring authority are summarised below:

• The question should be answered in the affirmative because the proper construction of the provision reflects the plain meaning of the language actually used in the provision when considered in context; and does not give rise to any anomalous consequences: at [7].

• Clause 2(1) of Sch 6B operates with respect to compensation payable under the Just Terms Act. Clause 2(3) of Sch 6B renders s 62(2) of the Just Terms Act inapplicable to acquisitions covered by cl 2(1). Reading the Transport Administration Act and the Just Terms Act as a whole, the effect of cl 2(3) of the schedule is to substitute cl 2(1) of the schedule for s 62(2) of the Just Terms Act in determining the amount of compensation payable under the Just Terms Act for acquisitions to which cl 2(1) applies: at [10].

• Clause 2(1) of Sch 6B operates as a deferral of the assessment of the extent, if any, of the circumstances and factual matters listed in cl 2(1) and the assessment of the quantum (if any) and, if appropriate, payment of any compensation for the relevant acquisitions which is lifted if one of the specified circumstances arises: at [16].

• The phrase “by the construction” of the facilities (common to each of the circumstances specified in the paragraphs to cl 2(1) of Sch 6B) is referring to the activity of erecting or bringing into physical existence those facilities for which the acquired land was acquired. Thus, a causal connection between the physical activity of the construction of the relevant facilities and one of the specified physical consequences of that construction is required. Of its nature, a connection of this kind can only possibly arise after the construction activity has taken place: at [22]-[23].

• Clause 2(1) of Sch 6B uses present tense verbs and, although the use of a present tense verb does not need to connote a temporal element, in this instance the use of the present tense is clearly consistent with the adopted interpretation of the provision: at [24]-[25].

• The proposition that the current proceedings will need to be adjourned for the construction of the relevant facilities to take place does not mean the adopted interpretation gives rise to anomalous results: at [28], [29], [31].

The submissions on behalf of Landan

43. The written submissions on behalf of Landan are summarised below:

• The answer to the separate question is “no”: at [38].

• The verbs “is” and “are” are to be read with the words around them. The phrases “is destroyed”, “are destroyed or injuriously affected” or “are rendered” are temporally neutral: at [16]-[17].

• Clause 2(1) of Sch 6B is not directed to deferring assessment of compensation. The provision has nothing to do with timing. The section goes to whether compensation is payable at all: at [25].

• Contends that Sydney Metro’s position that the clause goes to timing is a flaw, further stating that if that were the case, other changes would, of necessity, need to be made and they were not: at [26], [27].

• Contends that another very significant difficulty with Sydney Metro’s approach is that if the time for the assessment of compensation is to be deferred, the question of “when” must be asked. Of any of the four practical points in time for that assessment that Landan Development identifies, the Court would be required to adjourn the proceedings to a point in time unknown, but inevitably some years away. On that approach the only prudent course would be for every owner to appeal to the Court in order to preserve their rights to claim compensation if - at some unknown time in the future - cl 2(1) of Sch 6B is satisfied: at [29], [31], [32].

• States that Sydney Metro’s concern, that if its approach is not adopted then it may result in the theoretical assessment of compensation, is not a criticism but an almost inevitable consequence of any partial acquisition of land: at [33].

The submissions on behalf of Opera Australia

44. The written submissions on behalf of Opera Australia are summarised below:

• The answer to the separate question should be “no”: at [4].

• Given the interrelationship between cl 2 of Sch 6B to the Transport Administration Act and the Just Terms Act, the statutory context in which cl 2 is to be interpreted includes both the Transport Administration Act and the Just Terms Act: at [19].

• Sydney Metro’s construction of cl 2(1) of Sch 6B relies too heavily on the use of the past tense in the clause and should be rejected. It should be rejected because it does not promote the purpose and objects of the Just Terms Act: at [26], [28], [29].

• It would only permit a claim for compensation to be determined, at some indeterminate time after the acquisition, or not at all, is inconsistent with the procedural and timing provisions for the determination of compensation under the Just Terms Act: [30].

• The reference to “compensation” in cl 2(1) of Sch 6B is a reference to compensation, as defined in s 55 of the Just Terms Act, reinforcing statutory intention that compensation is to be determined expeditiously at or around the date of acquisition, not at some indeterminate future date (if at all): at [36].

• The construction of cl 2(1) of Sch 6B, for which Sydney Metro contends, has the effect of significantly and unjustly interfering with the property rights of the dispossessed land owner: at [37].

The submissions on behalf of Altomonte Holdings

45. Ms McKelvey, counsel appearing for on behalf of Altomonte Holdings, adopted the submissions put by Mr Hemmings on behalf of Landan.

Submissions in reply for the acquiring authority

46. The acquiring authority also provided written submissions in reply to the written submissions provided on behalf of the various Applicants. These written submissions in reply are summarised below:

• Clause 2(1) of Sch 6B does not have a plain and ordinary meaning that in and of itself reveals only one proper construction, considering the context of the provision in light of the legislative scheme and general purpose together with its text is conventional: at [4].

• A causal connection can only arise after the construction has physically taken place: at [5].

• Restates that when the verbs “is” and “are” are used in cl 2(1) of Sch 6B they are indicating a state of affairs that has arisen: at [6], [7].

• Notes that Landan contends that cl 2(1) of Sch 6B has “nothing to do with timing” yet states that the essence of the question to be determined goes to the “timing of when compensation is to be determined” under cl 2 and that both positions cannot be correct: at [18].

• States that assessment after construction of the facilities does not render the scheme for assessment of compensation under the Just Terms Act “entirely ineffective” or lead to any “significant practical difficulty” for the Court: at [19].

• States that where the existence of a factual state of affairs qualifies the entitlement to award compensation, it cannot, and should not, be hypothesised: at [23].

Consideration of, and conclusion on, this separate question

47. On this separate question, the position advanced on behalf of the acquiring authority is to be preferred, for the reasons advanced on its behalf. The fact that a requisite state of affairs pursuant to either Sch 6B(2)(1)(a) or (b) must exist before a gateway is open to the potential for a successful claim for compensation pursuant to the Just Terms Act is, I am satisfied, clearly the legislative intent. This is able to be ascertained from the fact that it is intended that, relevantly, each of these provisions (as well as the irrelevant gateway in Sch 6B(2)(1)(c)) must be tested to establish if either (or both) of the potential gateways is actually open before there is any utility in contemplating whether or not the Just Terms Act processes are to be engaged.

48. Although it was put in support of the proposition that:

• the separate question should be answered in the negative; and

• a consequence of not doing so had the potential of leaving the issue of whether or not compensation under the Just Terms Act was potentially claimable for some indefinite future,

such a result would not necessarily be an unjust position. This is because, even though the acquisition of a stratum may have been effected, that acquisition is capable of being reversed if a future project is redesigned or abandoned.

49. Whilst there is, potentially, some temporal injustice in such circumstances, this is to be contrasted with what would be the position if the separate question is not answered in the affirmative. If a gateway for a compensation claim could be regarded as open in circumstances where the requisite state of affairs was not in existence, there is the potential, however remote, that an opportunity could arise for pursuit of a compensation claim under the Just Terms Act; a compensation entitlement established on some basis; but the project for which the stratum had been acquired never went ahead.

50. That outcome, if it was to arise, would clearly be a perverse result of the kind discussed in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26.

51. That, in itself, is sufficient to answer this separate question in the affirmative, particularly in circumstances where, as later discussed, the meaning of Sch 6B(2)(1)(b) can be dealt with in the near future and, depending on how it is to be interpreted, such interpretation can be applied to the Opera Australia claim forthwith and to Mr Hemmings’ clients’ claim (and possibly others) in the comparatively near future.

52. As earlier noted, and for the reasons discussed in the next section, the potential for the relevant state of satisfaction of the Sch 6B(2)(1)(b) gateway being open has already arisen in the case of Mr Hale's client and is imminent for Mr Hemmings' client. Whilst, in itself, the position with Mr Hemmings' client does not provide an actually potentially open gateway pursuant to Sch 6B(2)(1)(b) if the construction of that provision, as may be anticipated to be advanced on behalf of the dispossessed landowners, is to be adopted, it clearly does arise in the context of Mr Hale's client. That, as discussed below, means, in addition to determining this separate question, it is appropriate to move to the next step of ascertaining the scope of what might be encompassed by Sch 6B(2)(1)(b) using Mr Hale's client as the vehicle for that purpose.

Where to now?

Introduction

53. In the initial portion of Ms Duggan's submissions, she said, with respect to Mr Hale's submissions (Transcript, 13 May 2019, page 20, lines 10 to 15):

Mr Hale seemed to say, it's unfair if the tunnel is never built - sorry, or the rail facilities are never built, that his client can't seek compensation. We don't see that as being a problem with the construction that we're espousing. If the facilities are never built and his client never suffers the factual circumstances set out in the schedule then they shouldn't be entitled to compensation because they've suffered no loss.

54. However, during the course of her submissions, Ms Duggan said (Transcript, page 22, line 11 to page 23, line 13)(with minor, inconsequential corrections):

(DUGGAN): But all we're asking today is, do those facts need to be present? And it may well be if your first cab off the rank within the tunnelling, we're tunnelling from both ends on this matter, Mr Hale's clients already got us underneath him, Mr Hemmings' clients about to have us underneath him. Once the tunnel has gone past the lot that is affected, that's the point in time when 6B(2) can be determined because the works have been undertaken in relation to that land acquired. They don't have to wait for the whole thing to finish, they can, but they don't have to. In relation to the state of affairs, Mr Hemming says four years, I accept that we acquired this in October 217 but we haven't hit four years yet.

HIS HONOUR: Does that mean, if I understood you correctly in what you just said, that at least for Mr Hale's client, there is the present state of affairs that potentially renders it appropriate to test what 2(1)(b) actually means?

DUGGAN: It may well be if he wants to do it now.

HIS HONOUR: He has to claim it.

DUGGAN: He does. But may want to say, as Mr Hemming says, I would like to wait and see what happens. It's a matter for him.

HEMMINGS: I don't want to wait, I want to do it now.

DUGGAN: I'm not talking about you, I'm talking about Mr Hale.

HEMMINGS: You said Mr Hemmings.

DUGGAN: As we say, it's entirely a matter for the client. The fit out hasn't been completed, the tunnelling has been completed. I don't know whether the fit out will effect it, tiles and things, but it's a matter for Mr Hale.

HIS HONOUR: There is, nonetheless, what one might describe as a tubular aperture underneath Mr Hale's client's land.

DUGGAN: Yes. There is a tubular aperture under Mr Hale's client's land.

HIS HONOUR: Does that, do you concede, constitute sufficient prerequisite satisfaction of a present state of affairs to permit Mr Hale's client to test what (2)(1)(b) actually means with respect to the future development or redevelopment potential of his client's land?

DUGGAN: The answer to that would have to be yes, if the test is whether or not he can get under 6B(2)(1)(a) or (b), because he actually has the construction of the facilities.

HIS HONOUR: No. But you're saying to me, leaving aside Mr Hemmings and Ms McKelvey at the present time, although they might wish to be here and participating if it was to move a “what does 2(1)(b) actually mean determination?”.

DUGGAN: Mr Hale's client is in a position to be able to test that proposition now.

55. As Mr Hale indicated at the time, he was not aware of this position concerning the extent of tunnelling already undertaken below his client’s land.

Proceeding to a second question

56. Under the circumstances revealed above that, at least for Mr Hale's client, the outcome of a second question hearing would determine (subject to any appeal) what was the scope of Sch 6B(2)(1)(b) and whether his client had the Sch 6B(2)(1)(b) gateway open, it is now appropriate to indicate that, if Opera Australia wished to proceed to a second separate question hearing, that would be the appropriate course to follow.

57. Only after this has been determined, is there then the possibility that the more conventional processes provided by the Just Terms Act may be engaged.

58. Proceeding in this fashion would, in my view, also appropriately involve an invitation to the other two parties who have participated in this separate question hearing to participate in the next separate question hearing, if they wish to do so. In addition, it would be appropriate, in my view, to invite those who had had the potential to participate in the hearing on this first separate question to participate in a second separate question hearing if they wished so to participate.

59. If there is to be a second separate question directed to ascertaining what falls within the scope of Sch 6B(2)(1)(b) (and thus what matters might trigger the Just Terms Act processes being engaged for Opera Australia), this would require the settling by Opera Australia and the acquiring authority of the terms of such a second question.

60. If Mr Hemmings’ and Ms McKelvey's clients wished to participate in that drafting process, and be heard on a second separate question, that would seem desirable to occur.

61. To accommodate the potential for an immediate moving to a second separate question hearing, if this course is to be followed, I set all three matters down for a mention in the LVC List on Friday 5 July 2019.

Costs

62. During the course the hearing, I asked Ms Duggan what position was taken by the acquiring authority concerning the costs of these separate question proceedings in light of the fact that the necessity for its determination arose at the initiative of the Court rather than of any of the parties.

63. Although the acquiring authority initially took the position of resisting that it might pay the costs of these separate question proceedings, Ms Duggan subsequently informed me that the acquiring authority accepted that it would be appropriate for that entity to meet the costs of the three parties actively participating in this separate question hearing, no matter what was my determination as to the appropriate answer to the separate question.

64. As a consequence, in each of the three proceedings before me, where there has been an active participant, the acquiring authority will be ordered to pay the costs of that party as agreed or assessed.

Orders

65. In each matter, the orders of the Court are:

1. The answer to the separate question for determination below is “yes”:

Are the circumstances identified in paragraphs (a), (b) and (c) of clause 2(1) of Sch 6B to the Transport Administration Act 1998 limited to circumstances of the kind specified that have occurred after the construction of the relevant underground rail facilities?

2. The Respondent is to pay the Applicant’s costs of the separate question as agreed or assessed; and

3. The matter is relisted for further directions before the LVC List Judge on Friday 5 July 2019.

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Amendments

25 June 2019 - Amendment to legal representation of the parties.

Decision last updated: 25 June 2019