Luka v Lake Macquarie City Council

[2006] NSWLEC 533

Land and Environment Court

of New South Wales

CITATION:

Luka v Lake Macquarie City Council [2006] NSWLEC 533

PARTIES:

APPLICANT:
Shannon Luka

RESPONDENT:
Lake Macquarie City Council

FILE NUMBER(S):

30121 of 1994

CORAM:

Lloyd J

KEY ISSUES:

Compulsory Acquisition of Land :- amount of compensation – remitter from Court of Appeal

Costs: - security for – sought against dispossessed landowner – impecuniosity –outstanding costs unpaid – stay not granted

Practice and Procedure: - amendment – failure to comply with directions – delay in complying with directions – length of delay – any prejudice caused – arguable cause of action – reinstatement of previously abandoned claim – oral application for leave – case management principles

Jurisdiction: - remitter from Court of Appeal – to be determined “in conformity with the reasons of this Court”

LEGISLATION CITED:

Land Acquisition (Just Terms Compensation) Act 1991 ss 42(2), 56
Land and Environment Court Act 1979 s 69(3)
Land and Environment Court Rules 1996 Pt 10, r 1

CASES CITED:

Bungendore Residents Group Inc v Palerang Council & Anor [2005] NSWLEC 235;
Danny Kidron & Andrew Spaile Architects Pty Ltd v Garrett (1994) 35 NSWLR 572;
Gallo v Dawson (1990) 93 ALR 479; 64 ALJR 453;
Hunter Ecologically Sustainable Employment Group Inc v HEZ Pty Ltd (2003) 129 LGERA 344;
Investment Invoice Financing Ltd v Limehouse Board Wills Ltd [2006] 1 WLR 985 CA;
Jackamarra v Krakouer (1998) 195 CLR 516;
Kalmneft JSC v Glencore International AG [2002] 1 All ER 76; 1 Lloyd’s Rep 128;
KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189;
Lake Macquarie City Council v Luka (1999) 106 LGERA 94;
Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 2 December 1996, unreported;
Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 23 June 1997, unreported;
Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 23 December 1998, unreported;
Luka v Lake Macquarie City Council (1998) 99 LGERA 283;
Luka v Lake Macquarie City Council (2000) 21(15) Leg Rep SL4c;
Luka v Lake Macquarie City Council [2001] NSWLEC 251;
Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82;
Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573;
Morres v Papuan Rubber and Trading Co Ltd (1914) 14 SR (NSW) 141;
Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388;
Onerati v Phillips Constructions Pty Ltd (in liq) (1989) 16 NSWLR 730;
Outboard Marine Australia Pty Ltd v Byrnes (1974) 1 NSWLR 27;
Sinclair v British Telecommunications plc [2002] 1 WLR 38 CA;
Spencer v The Commonwealth (1907) 5 CLR 418;
State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146

DATES OF HEARING:

12/07/2006

 
DATE OF JUDGMENT: 

08/28/2006

LEGAL REPRESENTATIVES:

APPLICANT:
P J McEwen SC
SOLICITORS:
Moloney Lawyers

RESPONDENT:
M C Jacobs QC and P J Bambagiotti (barrister)
SOLICITORS:
Peter Rees

JUDGMENT:

- 22 -

IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Lloyd J

Monday, 28 August 2006

LEC No. 30121 of 1994

LUKA v LAKE MACQUARIE CITY COUNCIL [2006] NSWLEC 533

JUDGMENT

Background

1 HIS HONOUR: As long ago as 12 November 1993, Lake Macquarie City Council compulsorily acquired certain land from the owner, Ms Shannon Luka. The acquired land comprised roads and lanes left in a subdivision of land which were shown in a deposited plan registered in July 1904.

2 On 9 December 1993 the council gave the owner a compensation notice under s 42(2) of the Land Acquisition (Just Terms Compensation) Act 1991 (“the Just Terms Act”). This stated that the Valuer-General had determined the amount of the compensation at $16,500. The owner then exercised her right to lodge with the Court an objection to the amount of compensation offered.

3 Bignold J heard the objection. The hearing occupied some five weeks. In a reserved judgment on 2 December 1996 Bignold J upheld the objection and assessed compensation at $334,600, but reserved the question of additional compensation for the value of the improvements to the roads: Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 2 December 1996, unreported.

4 On 15 April 1997, the council filed a notice of motion seeking to vacate some of the orders made by Bignold J on 2 December 1996. In a judgment 23 June 1997 Bignold J dismissed the council’s motion with costs: Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 23 June 1997, unreported.

5 Ms Luka then brought a notice of motion seeking to adduce further evidence of the value of the improvements. That motion was, in the words of Bignold J “strenuously opposed” by the council and was heard over three days, and again to quote Bignold J, “was supplemented by voluminous subsequent written submissions”. In a reserved judgment on 24 July 1998 Bignold J granted leave to Ms Luka to re-open and made a declaration that the market value (within the meaning of s 56 of the Just Terms Act) of the compulsorily acquired land includes any additional value to those lands by virtue of the existence therein of roadwork improvements: Luka v Lake Macquarie City Council (1998) 99 LGERA 283.

6 After a further hearing over three days in November 1998 Bignold J, in a further reserved judgment on 23 December 1998 awarded additional compensation of $348,236 for the road improvements: Luka v Lake Macquarie City Council, NSWLEC, Bignold J, 23 December 1998, unreported.

7 The council appealed to the Court of Appeal. The appeal was heard over two days in September 1999. In a reserved judgment on 7 December 1999 the Court of Appeal allowed the appeal against both of the judgments of Bignold J of 2 December 1996 and 23 December 1998: Lake Macquarie City Council v Luka (1999) 106 LGERA 94. The formal orders of the Court of Appeal were as follows:

(1) Appeal allowed;

(2) Orders 1, 2, 4 and 5 Land and Environment Court of 2 December 1996 and orders 1, 2 and 5 of 23 December 1998 set aside;

(3) In lieu thereof order that the respondent's objection to the amount of compensation offered by the council be dismissed;

(4) Remit the proceedings to the Land and Environment Court for further hearing and determination in conformity with the reasons of this Court;

(5) The applicant to pay the council's costs of the proceedings in the Land and Environment Court up to and including 7 February 1995 and one half of its costs of the first hearing which concluded on 21 June 1996;

(6) The applicant to pay the council's costs of the third and fourth hearings in the Land and Environment Court which led to the judgments of that Court of 24 July and 23 December 1998;

(7) The respondent to pay one half of the Council's costs in this Court, and to have a certificate under the Suitors Fund Act 1951 (NSW) in respect of the costs in this Court;

(8) The costs of the further proceedings in the Land and Environment Court to be in the discretion of that Court.

8 Ms Luka then applied for special leave to appeal against the Court of Appeal’s judgment. On the hearing of the special leave application on 4 August 2000, the High Court made the following orders:

1. Special leave is granted to the applicant to appeal to this Court from the whole of the judgment and orders of the New South Wales Supreme Court, Court of Appeal given and made on the 7th day of December 1999.

2. The appeal against the whole of the judgment and orders of the New South Wales Supreme Court, Court of Appeal given and made on the 7th day of December 1999 is allowed to the extent that Order 3 of the orders made by the Court of Appeal is deleted.

3. The Applicant is to pay the costs of the respondent of the application.

9 On 26 September 2001, the council filed a notice of motion for an order that the remitted proceedings be dismissed for want of prosecution. That motion was heard by Bignold J on 22 October 2001, during which the parties also raised questions as to the true scope of further hearing and determination of the remitted proceedings. In a reserved judgment on 31 October 2001, Luka v Lake Macquarie City Council [2001] NSWLEC 251, Bignold J, in dismissing the council’s motion, analysed the effect of the Court of Appeal’s orders as amended by the High Court’s orders. In particular, Bignold J rejected the council’s argument that the Court’s statutory function in the remitted proceedings is confined to determining by how much the sum of $16,500 (being the Valuer-General’s assessment of compensation in the statutory compensation notice given to the owner) is to be reduced on account of any amount of compensation that may be awarded to other potential claimants. (In the events that have since happened, there are no other claimants.)

10 The council then brought an application for leave to appeal against Bignold J’s judgment of 31 October 2001. That application was heard on 3 May 2004, on which occasion the Court of Appeal refused leave to appeal, dismissed the council’s summons, and ordered that the costs in that Court be at the discretion of the Land and Environment Court.

11 In the interim the council brought three notices of motion for (i) dismissal of the proceedings for want of prosecution; (ii) dismissal of the proceedings for the failure of Ms Luka to comply with directions of the Court; and (iii) a stay until the owner pays the council’s assessed costs ordered by the Court of Appeal and by the High Court, or alternatively, that Ms Luka provide security for costs. Bignold J heard the motions on 15 September 2003. His Honour dismissed the motions, reserving costs.

12 Since then the council has filed two further notices of motion: for an order that Ms Luka’s objection be dismissed on the ground that she has failed to comply with directions of this Court and a notice of motion that she provide security for costs. On 27 April 2006, I heard evidence from Ms Luka which established that she is impecunious – she has virtually no assets and is applying for a sole parent pension. She said that she was acting for her broader family, namely her mother, father, sisters and brother, all of whom are also said to be impecunious. Although she is the co-owner with her former partner of an investment property, she has very little equity in it. None of the notices of motion were formally dealt with, but following the giving of Ms Luka’s evidence the parties agreed that nine issues should be determined separately and as a preliminary matter to the determination of any valuation issues in the remitted proceedings. I agreed to this course of action and this judgment deals with those questions.

13 For the purpose of deciding the nine preliminary issues, the Court again has been furnished with voluminous written submissions which deal at some length with a range of procedural and peripheral questions.

14 In reciting the history of the proceedings I have omitted various other procedural motions and directions in the Court. I have recited the history of the proceedings to reinforce what was said by Stein JA in the first Court of Appeal’s judgment of 7 December 1999 (at 109 [81] - [82]):

I wish to make some additional remarks about the proceedings. It beggars belief that the proceedings in the Land and Environment Court took up 24 hearing days over a dispute concerning a very modest amount of compensation. Some of the blame for this situation rests squarely with the parties because of the forensic decisions they made at various points of time about how to conduct the litigation.
One of the parties is a local government authority funded in part by ratepayers. In addition to the no doubt enormous costs of the litigation, is to be added the costs to the State of almost 5 weeks of sitting time of a Superior Court. The impact on other litigants waiting in the queue is not be [sic] ignored. I would like to think that such situations will be avoided in the future. However, this will require a common sense approach by parties to litigation because, to an extent, the court is powerless to intervene.

15 The parties clearly ignored the advice of Stein JA. The vast amount of written material which has since been generated, the time involved in generating the voluminous written submissions and the time taken in resolving the dispute thus far, together with the enormous costs that have been incurred (see par [41] below), is entirely disproportionate to the amount in dispute. It is the kind of conduct which brings the practice of the law into disrepute. This is a relatively modest claim, which, in the normal course, should have been completed within two, or at most, three hearing days. Cases of greater complexity and involving tens of millions of dollars are regularly conducted in this Court within a few days. As Stein JA observed, the blame for the present situation rests squarely with the parties and, I should add, with their legal representatives. It is to be hoped that, having now answered the preliminary questions below, the question of the amount of compensation can be dealt with in accordance with the overriding principle that now governs civil litigation – that is, “the just, quick and cheap disposal of the proceedings”: cf Uniform Civil Procedure Rules 2005, Pt 2.1. As Stein JA observed, this will require a common sense approach by the parties – something that appears to have been hitherto absent. It cannot be said that the compensation for a compulsory acquisition which occurred in 1993 and which still remains outstanding, which has generated the volumes of material that this has, and which has resulted in entirely disproportionate costs, amounts to the “just, quick or cheap” disposal of the proceedings.

16 I now turn to the nine preliminary issues that the Court is asked to determine.

(1) Whether, in the absence of Ms Luka having complied with the orders of Bignold J of 17 October 2005 and Talbot J of 10 October 2005, Ms Luka’s objection to the Valuer-General’s determination of value in an amount of $16,500 should be entertained at all, or dismissed or permanently stayed and with costs?

(2) Whether or not, by reason of Ms Luka not having filed a statement of claim, as ordered by Talbot J on 10 November 2005 nor filing any motion for an extension of time in which to do so as required by Talbot J, her objection to the aforesaid determination of value should be dismissed or permanently stayed with costs?

17 These two issues can be determined together. The orders made on 17 October 2005 required Ms Luka to file and serve particulars and her response to the council’s submissions of 12 October 2005 within 21 days – that is, by 7 November 2005. Ms Luka served her material on 10 November 2005 – three days late.

18 The orders made on 10 November 2005 required Ms Luka to file and serve points of claim within seven days – that is, by 17 November 2005. The points of claim were served on 23 November 2005 – five days late.

19 Ms Luka has demonstrated a history of not complying with other directions that have been made from time to time. The council submits that the non-compliance by her with these (and other) directions has substantially increased the overall costs of the proceedings. Moreover, the council correctly points out that no application has been made by Ms Luka for extensions of time within which to comply with the Court’s directions. This would in turn require the owner to give some reasonable explanation for her failure to comply. The council relies upon a number of authorities which show that some of the more relevant considerations include that a party is prima facie required to adhere to time limits fixed by the court; that an extension of time is not granted as a matter of course; that a person who seeks to obtain an extension of time should explain the delay; whether any prejudice would be caused to either party in either granting or refusing an extension of time; and importantly, what should be done to do justice between the parties: Morres v Papuan Rubber and Trading Co Ltd (1914) 14 SR (NSW) 141; Onerati v Phillips Constructions Pty Ltd (in liq) (1989) 16 NSWLR 730; Gallo v Dawson (1990) 93 ALR 479; 64 ALJR 453; Jackamarra v Krakouer (1998) 195 CLR 516; Kalmneft JSC v GlencoreInternational AG [2002] 1 All ER 76; 1 Lloyd’s Rep 128.

20 One of the considerations which the cases say is relevant is the length of the delay. In the present case the particular orders or directions about which the council complains have resulted in a relatively modest delay of three and five days respectively. It would be difficult for the council to sustain an argument that it has been prejudiced by such modest breaches of a timetable.

21 A further consideration is the fact that the effect of what the council now seeks would be to shut out a person, who has had her land taken from her by compulsory acquisition, from arguing for the compensation to which she claims to be entitled. In Outboard Marine Australia Pty Ltd v Byrnes (1974) 1 NSWLR 27, the Court of Appeal (Reynolds, Huntley and Bowen JJA) said (at 30):

We appreciate that the Rules of Court, particularly those relating to time, should never be allowed to be an instrument of tyranny. They do, however, have purposes, one of which is that the parties may know where they stand and regulate their affairs accordingly. It is also appreciated that where genuine issues ought to be litigated, if such can be done with fairness to all concerned, it is appropriate to take a benign view of applications to extend time.

22 In Morgan v 45 Flers Avenue Pty Ltd (1987) 11 NSWLR 573 at 589, Kirby P (Hope and Priestley JJA concurring) held that the modern approach in exercising the discretion is that the court has a preference for granting such relief as will ensure that the proceedings are heard and disposed of on their merits if the balance of discretionary considerations otherwise permits.

23 In Morres v Papuan Rubber Co Ltd, one of the cases relied upon by the council, Cullen CJ said (at 143-144):

And it is extremely desirable that the rules should not be allowed to stand in the way of serving the interests of justice. If justice requires that the severity of a rule should be relaxed, then it is of extreme importance that the court should relax it. As was said by the Master of Rolls in the case of Coles v Ravenshear [1967] 1 KB 1,
Although I agree that a court cannot conduct its business without a code of procedure, I think the relation of rules of practice to the work of justice is intended to be that of hand-maid rather then mistress, and the court ought not to be so far bound and tied by rules, which are after all only intended as general rules of procedure, as to be compelled to do what will cause injustice in the particular case.

24 In the present case the specific instances of delay are small, Ms Luka’s claim is not hopeless, and little if any prejudice will be caused if the delays are excused (cf Danny Kidron & Andrew Spaile Architects Pty Ltd v Garrett (1994) 35 NSWLR 572).

25 I have referred to the disproportionate costs incurred thus far in what should be a relatively simple claim for compensation. If Ms Luka were required to now file a formal notice of motion supported by an affidavit, which would then be set down for hearing, the result would be to further add to the already considerable costs. In order to save further costs I am prepared to accept Ms Luka’s senior counsel’s oral application for an extension of time in each instance. The principles discussed above, and, in particular, the reasons described in the preceding paragraphs together with the fact that Ms Luka has had her land compulsorily acquired, lead me to the view that the non-compliance with directions should in this instance be excused.

(3) Whether [or] not Ms Luka should be ordered to pay all or any the costs of the application for leave to appeal reserved by the Court of Appeal on 3 May 2004?

(4) Whether or not in any order of costs to be made by the Court, Ms Luka should pay all or any other costs that have been reserved?

26 These two issues were not argued. As noted above, on 3 May 2004 the Court of Appeal dismissed the council’s summons for leave to appeal from Bignold J’s judgment of 31 October 2001 and from Bignold J’s orders made on 23 December 2003 refusing summary dismissal of the main proceedings because of default in complying with directions. In refusing leave to appeal and dismissing the summons, the Court of Appeal ordered that the costs of the proceedings in that Court are to be at the discretion of this Court.

27 The usual exercise of the Court’s discretion would mean that costs would follow the event, in which case the council would be ordered to pay the costs of its unsuccessful summons for leave to appeal. However, since I have not heard any submissions on either question, it is appropriate that these questions be reserved.

(5) Whether or not the statement of claim upon which Ms Luka purports to rely contains any reasonably arguable or cognisable cause of action, and if not, whether it should be struck out with costs.

28 The council’s criticism is directed to Ms Luka’s points of claim dated 23 November 2005. Since the formulation of these issues, however, Ms Luka has without obtaining the leave of the Court filed a later version of her points of claim dated 18 April 2006, upon which she now intends to rely. The council nevertheless opposes the grant of leave to Ms Luka to file out of time and to now rely upon the latest version of her points of claim.

29 The points of claim which Ms Luka now seeks to rely upon raise a claim for the value of road improvements or infrastructure within the acquired land, a claim for the value of the land contained in lanes (being part of the acquired land) and a claim for the value of the area referred to as the Park Street land.

30 The council says that Ms Luka is not able in these remitted proceedings to make any claim for road improvements. This question arises under issue No. 8, which is discussed below. The council also says, however, that Ms Luka is unable to make a claim for the value of the Park Street land.

31 Ms Luka had previously (in written submissions dated 10 November 2005) abandoned the claim for the Park Street land. It is apparent that she wants to reinstate the previously abandoned claim for compensation for the Park Street land. The council says that Ms Luka needs leave to withdraw the admission and to now rely upon this new claim. Such leave should, it is submitted, be sought by way of a notice of motion supported by an affidavit and the council’s counsel should be entitled to cross-examine the deponent about the making of the original admission and to test the validity of the claim.

32 I accept the council’s submission that Ms Luka requires the leave of the Court to rely upon the new points of claim and to withdraw an admission. Mr P J McEwen SC, appearing for Ms Luka, made an oral application for such leave.

33 Of course, if a notice of motion and supporting affidavit were to be filed it would mean the incurring of additional costs, together with the costs of the separate hearing of the notice of motion. I have already observed that the costs in this case have blown out of all proportion to the amount in dispute and I am anxious to ensure that any further costs can be either avoided altogether or constrained. I am thus prepared to consider Mr McEwen’s oral application.

34 I now turn to the question of whether leave should now be granted to Ms Luka to rely upon the amended points of claim and withdraw her previous abandonment of any claim for the Park Street land. In Cohen v McWilliam (1995) 38 NSWLR 476 at 481, Priestley JA described the relevant principle to be applied in the following terms (citing Davies v Pagett (1986) 10 FCR 26 at 233):

The fundamental duty of the court is to do justice between the parties. It is, in turn, fundamental to that duty that the parties should each be allowed a proper opportunity to put their cases upon the merits of the matter. …. The temptation to impose a limitation through motives of professional discipline or general deterrence is readily understandable; but, in our opinion it is an erroneous exercise of the relevant discretion to yield to that temptation.

35 Priestley JA (at 479-482) acknowledged that although delay (and I should add, a failure to comply with directions of the court) is to be considered, the various cases show that the primary emphasis is on the question whether there is an arguable case to be tried on the merits.

36 In the same case Sheller JA (at 490) adopted the words of Lord Wright in Evans v Bartlam [1937] AC 473 at 489:

The primary consideration is whether he has merits to which the Court should pay heed; if merits are shown the Court will not prima facie desire to let a judgment pass on which there has been no proper adjudication.

37 Sheller JA also adopted what King CJ said in United Motors Retail Ltd v Australian Guarantee Corporation Ltd (1991) 58 SASR 156 at 161-162, namely, the need to do justice to the party will ordinarily take precedence over policy considerations.

38 In State of Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146, the High Court held that case management principles, although a relevant consideration, should not be used to shut out a party from litigating an issue that is fairly arguable – the overriding concern is the attainment of justice.

39 Finally, Pt 10, r 1(1) of the Land and Environment Court Rules 1996 states that the Court may, at any stage of any proceedings, on the application of a party or without any such application, order, on terms, that any document filed in the proceedings be amended. Importantly, sub-r 1(2) states that all such amendments shall be made so as to lead to the determination of the real questions raised by or otherwise depending on the proceedings. In applying the principles discussed above I grant leave to Ms Luka to file her points of claim dated 18 April 2006, which include the claim for the Park Street land, thereby withdrawing the previous abandonment of that part of her claim.

(6) Whether Ms Luka should, in any event, be allowed to proceed until all outstanding and unpaid claims for costs arising from or in relation to earlier proceedings are paid or adequately secured.

(7) Whether, in the event of Ms Luka’s objection being allowed to proceed, she should be ordered to provide security for costs? And if so, [in] what amount?

40 These two related issues may be considered together.

41 There are outstanding costs orders against Ms Luka. As I understand it, the amount of costs incurred by the council up to 31 October 2005 which have been assessed and for which judgments have been entered is, including interest, the sum of $488,235. This does not include some $15,200 which relates to meeting the Park Street claim which had been abandoned. The council has since incurred a further $311,207 in costs which I understand relate to attempts to secure compliance with the Court’s various directions. The council’s estimate of further costs to the conclusion of the proceedings is $139,000, but this estimate may blow out depending upon the length of the final hearing.

42 On 5 April 2006 the council served a bankruptcy notice on Ms Luka claiming an unpaid debt of $302,765.30 for only one of the judgments for costs. Ms Luka failed to comply with the bankruptcy notice and on 4 July 2006 a creditor’s petition was issued which was returnable on 16 August 2006. I am unaware of the outcome of the petition.

43 Mr McEwen concedes that there is no possibility of any of these orders for costs being met prior to the determination of the proceedings.

44 The council relies upon the following bases for the orders that it seeks:

(a) Ms Luka brings the claim not for herself but in a representative capacity;

(b) she is substantially impecunious;

(c) she has not paid or attempted to make arrangements to pay the costs already ordered against her;

(d) she continues to advance a hopeless and exaggerated case, or one which is at least open to very serious doubt;

(e) she has consistently failed to comply with directions and orders of the Court; and

(f) the estimated costs of taking the case to its conclusion will be extensive, namely, a further $139,000.

45 On 8 February 1995, Ms Luka gave evidence that she was holding the land and any compensation monies for her father. On 27 April 2006, however, Ms Luka gave evidence that she was acting on behalf of her broader family – her father and mother, sister and brother – and that she understood that neither she nor her siblings were to gain.

46 No documentary evidence has been produced to demonstrate which, if any, of these arrangements are in place. I assume there is none or the evidence would have been produced. It would seem that the arrangement, whatever it is, is an informal one, is somewhat uncertain and is arguably unenforceable.

47 On 27 April 2006, Ms Luka gave evidence of her personal position. She is a single parent in receipt of a fortnightly family allowance pension of $401, which is her sole source of income. She has two savings accounts with Sydney Credit Union which total approximately $1,260. She owns a half-share in an investment property at Windsor, the value of which she estimates at $250,000, but which is subject to a mortgage of $216,000. Although the property is currently rented for $430 per fortnight, this does not cover the mortgage repayments of $1,290 per month. She has no other assets. As noted above, Ms Luka has a substantial liability which she is unable to meet, namely the outstanding costs orders against her. In particular she has been unable to satisfy the bankruptcy notice in which the council claimed the sum of $302,765.30.

48 Ms Luka also gave evidence that her parents are unable to fund the litigation, her sister is like herself a sole parent, and although her brother’s family has provided $30,000 towards the costs of the litigation that sum has already been expended and her brother or his family have no more funds that they can contribute. The only means that Ms Luka might have to pay the costs, either her own or those of the council, is out of the compensation monies.

49 It thus appears that neither Ms Luka nor those whom she purports to represent are able to meet the costs already incurred by the council and which Ms Luka has been ordered to pay, as well as any further costs. The clear consequence of either a stay of the proceedings pending the payment of the outstanding orders for costs, or of any order for security for costs, would be to stifle the proceedings.

50 The Court has an inherent jurisdiction to require a party to settle the costs of previous unsuccessful proceedings before pursuing any further action, and may stay the later proceedings pending payment of the outstanding costs: Sinclair v British Telecommunications plc [2002] 1 WLR 38 CA; Investment Invoice Financing Ltd v Limehouse Board Wills Ltd [2006] 1 WLR 985 CA.

51 Equally, however, the Court has a discretion to defer payment of the costs until the trial of the later proceedings, particularly where the granting of a stay would stifle the later proceedings which may be otherwise meritorious. Since I was not the trial judge in the original proceedings I am unable to express a personal view about the merits of the claim. However, since the matter has been remitted to this Court for hearing and determination, it could not be have been the view of the Court of Appeal that the claim has no merit.

52 On the question of whether an order should be made for security for costs. Section 69(3) of the Land and Environment Court Act 1979 applies and it gives the Court a wide discretion. Since the interpretation of s 69(3) by the Court of Appeal in Melville v Craig Nowlan & Associates Pty Ltd (2002) 54 NSWLR 82, this Court has applied the considerations stated by Beazley J in KP Cable Investments Pty Ltd v Meltglow Pty Ltd (1995) 56 FCR 189 at 197-198: see Hunter Ecologically Sustainable Employment Group Inc v HEZ Pty Ltd (2003) 129 LGERA 344 and Bungendore Residents Group Inc v Palerang Council & Anor [2005] NSWLEC 235. Those considerations may be summarised as follows:

(i) whether the application for security for costs has been brought promptly;

(f) the strength and bona fides of the case in which security is sought;

(iii) whether the impecuniosity of the plaintiff/applicant results from the respondent’s conduct that is the subject of the claim;

(iv) whether the application for security is oppressive in the sense of denying an impecunious person a right to litigate;

(v) whether there are persons standing behind the plaintiff/applicant who are likely to benefit and willing to provide the security;

(vi) whether persons standing behind the plaintiff/applicant have offered any personal undertaking to be liable for the costs and, if so, the form of any such undertaking;

(vii) whether the applicant for security is in substance the plaintiff or the proceedings are defensive in nature.

53 In the present case the factors pointing in favour of an order for security are that the claimant is impecunious; that those whom she claims to represent also appear to be impecunious; the application – particularly the earlier application – was made reasonably promptly; and the claimant has not paid and apparently is unable to pay the outstanding orders of costs made against her. The factors pointing against an order for security are that the claimant’s case appears to be one which is arguable, regular on its face, properly instituted, brought by a person within the jurisdiction, and that an order would stifle the proceedings.

54 A further factor pointing against an order for security in the present case is that the claimant is exercising a statutory right to have her objection to the compensation notice to be heard and determined by the Court. This is not ordinary civil litigation. Ms Luka did not start the process: the council which compulsorily acquired her land started it. She says that the compensation offered for the land that was taken from her is inadequate. She has exercised her right to have the amount of compensation judicially determined. An order for security for costs would effectively deprive her of that statutory right. It would mean that any public authority acquiring a person’s land by compulsory process would be able to stifle any challenge to the compensation it offers by seeking an order for security against any disposed owner who happens to be impecunious. In view of the width of the discretion identified by the Court of Apeal in Melville v Craig Nowlan I consider this factor to be a telling consideration in the present circumstances.

55 On balance, the factors against an order for security outweigh those in favour of an order. For the same reasons there should not be a stay of the further proceedings pending the payment of the outstanding orders for costs.

(8) Whether or not this Court has jurisdiction in these remitted proceedings to adjudicate on and determine compensation for road improvements?

56 In his reserved judgment delivered on 23 December 1998, Bignold J made the following orders:

(1) I determine additional compensation in the sum of $348,236 in respect of the value at the date of compulsory acquisition of the road improvements existing in the compulsorily acquired land.

(2) Order 1 is supplemental to the orders made on 2 December 1996.

(3) Liberty to apply on three days' notice.

(4) Exhibits to be returned.

(5) The question of costs be reserved.

57 By Order (2) of orders made on 7 December 1999 the Court of Appeal set aside Orders (1), (2) and (5) above (in addition to setting aside orders made by Bignold J on 2 December 1996 and which are not relevant for the purpose of answering this question). Orders (3) and (4) made by the Court of Appeal were, as previously noted, as follows:

(3) In lieu thereof order that the respondent's objection to the amount of compensation offered by the council be dismissed;

(4) Remit the proceedings to the Land and Environment Court for further hearing and determination in conformity with the reasons of this Court;

58 The council submits that the source of this Court’s jurisdiction on remission is derived solely from the judgment of the Court of Appeal of 7 December 1999. I do not accept the submission. This Court’s jurisdiction on the remitter is also derived from the orders of the High Court, which allowed the appeal to the extent that Order (3) of the orders made by the Court of Appeal was deleted.

59 The council further submits that: (i) the Court of Appeal’s order for remitter was not an order for re-trial; (ii) the remitter does not give Ms Luka the right to re-agitate her claim for road improvements; (iii) the Court’s jurisdiction on remitter is limited by Order (4) of the Court of Appeal, “Remit the proceedings to the Land and Environment Court for further hearing and determination in conformity with the reasons of this Court”; (iv) the reasons of the Court of Appeal include, in par [72], the following statement: “The order remitting the proceedings is not intended to re-open the owner’s claim for additional compensation”; (v) this Court does not have jurisdiction to entertain any claim that was not the purpose of the remitter; (vi) par [76] of the Court of Appeal’s reasons states: “The final hearing was directed to the value of the improvements on which the owner has now completely failed and I would order the owner to pay the council’s costs of that hearing”; and (vi) no leave has been granted to re-open the issue.

60 Ms Luka submits that the Court’s jurisdiction on remitter does not come solely from the Court of Appeal’s orders of 7 December 1999, but rather a combination of that Court’s orders and the orders of the High Court made on 4 August 2000; and the function of the Court is to now determine what the appropriate compensation ought to be.

61 I regard as significant the fact that Order (4) of the Court of Appeal was undisturbed by the High Court. That order requires this Court on remitter to further hear and determine the proceedings “in conformity with the reasons” of the Court of Appeal. I accept, therefore, that the further hearing of the remitted proceedings is governed by the terms of the remitter. As noted above the Court of Appeal set aside the relevant orders of Bignold J, including the determination of additional compensation of $348,236 for road improvements. I also accept the force of the statement in par [72] of the Court of Appeal’s reasons: “The order remitting the proceedings is not intended to reopen the owner’s claim for additional compensation”, on which Ms Luka failed in the Court of Appeal. As Handley JA noted (at [63]): “It might be thought that the compulsory acquisition of these private roads and lanes for the purposes of the Road Act was not capable of generating any worthwhile claims for compensation.”

62 The orders of the High Court in setting aside the Court of Appeal’s Order (3) does not have the effect of re-opening the whole question of the amount of compensation. A reading of the transcript in the High Court shows that it was only concerned with the claim for land value, which had originally been assessed at $16,500, and it is that claim which is remitted for determination.

63 As the council in its submissions points out, in Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388, the High Court said (at 416): “The order for remitter is not an order for retrial”. The fact that it is not a retrial is confirmed by the terms of Order (4) of the Court of Appeal.

64 In other words, in setting aside Order (3) of the Court of Appeal’s orders of 7 December 1999, the High Court left intact Order (4) which remitted the proceedings to this Court for further hearing and determination “in conformity with the reasons of this Court”. Those reasons include the statement, noted above, that in remitting the proceedings it is not intended to re-open the claim for additional compensation.

65 The question for determination in the remitted proceedings is solely whether the statutory valuation of $16,500 is the market value of the compulsorily acquired land and, if not, what is that market value. That part of the Court of Appeal’s decision and its reasons relating to its rejection of the claim for additional compensation for improvements remain undisturbed. I conclude, therefore, that this Court does not have jurisdiction in the remitted proceedings to determine compensation for road improvements.

(9) Whether or not Ms Luka is issue estopped from claiming compensation for the roads and lanes over and above the sum of $16,500 fixed by the Valuer General .

66 Bignold J determined this questioning his judgment delivered on 31 October 2001: Luka v Lake Macquarie City Council [2001] NSWLEC 251. I decline to re-visit his Honour’s decision. Any such review of his Honour’s decision is misconceived. This is not an appeal against that judgment. The proper course is for an appeal to be brought against that judgment in the Court of Appeal.

67 In his judgment of 31 October 2001 Bignold J considered the scope of the further hearing and determination of the proceedings remitted by the Court of Appeal to this Court. His Honour held that, in the absence of any finding that the market value of the compulsorily acquired land is $16,500, this Court’s function in the remitted proceedings is not confined in any way and the Court’s statutory duty to determine Ms Luka’s objection in accordance with the Just Terms Act remains to be exercised.

The applicant’s notice to produce

68 The applicant served a notice to produce on the council dated 24 February 2006 requiring the production of documents described in the schedule to the notice. The schedule described a wide range of documents and not limited to any particular point in time. The notice to produce is clearly too wide and should be set aside.

Conclusion

69 I have noted at the outset the amount of costs generated by these proceedings, in particular the costs of the initial hearing before Bignold J of some 27 hearing days, which are totally disproportionate to the real sum in dispute. Bearing in mind the need for the “just, quick and cheap” disposal of the proceedings”, the further hearing of the remitted proceedings will require a common sense approach by the parties if the further costs are to be contained within sensible proportions. That is, the parties will have to focus on the essential issue of the market value of the land from the point of view of the hypothetical prudent purchaser in accordance with the well-known test in Spencer v The Commonwealth (1907) 5 CLR 418 at 441. This should – and ought to be – a relatively simple exercise occupying a short hearing. In this respect I note that the list of remaining issues appears to contain a number of apparently immaterial questions in what is a simple valuation exercise.

Orders

70 It is appropriate that the following formal orders be made:

(1) The respondent’s notice of motion dated 22 December 2005, for an order that the applicant’s objection be dismissed on the ground of her consistent failure to comply with directions and orders of the Court, is dismissed.

(2) The applicant is granted leave to rely upon her points of claim filed on 19 April 2006.

(3) The respondent’s notice of motion dated 13 April 2006 for security for costs is dismissed.

(4) The applicant’s notice to produce dated 24 February 2006 is set aside.

(5) The costs of determining the separate questions herein, the two notices of motion dated 22 December 2005 and 13 April 2006 and the costs related to setting aside the applicant’s notice to produce dated 24 February 2006 will be costs in the final proceedings.

I hereby certify that the preceding 70 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

Associate

Dated: 28 August 2006
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