Luka v Lake Macquarie City Council

[2003] NSWLEC 360

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Land and Environment Court

of New South Wales

CITATION:	Luka v Lake Macquarie City Council [2003] NSWLEC 360
PARTIES:	APPLICANT: Luka RESPONDENT: Lake Macquarie City Council
FILE NUMBER(S):	30121 of 1994
CORAM:	Bignold J
KEY ISSUES:	Practice and Procedure :- Motions for dismissal of proceedings or stay until security is provided or assessed costs paid
LEGISLATION CITED:	Land Acquisition (Just Terms) Compensation Act 1991
CASES CITED:	Lake Macquarie City Council v Luka (1999) 106 LGERA 94; Luka v Lake Macquarie City Council (2001) NSWLEC 251
DATES OF HEARING:	15/09/2003
DATE OF JUDGMENT:	12/23/2003
LEGAL REPRESENTATIVES:	APPLICANT: Mr B Dennis, Solicitor SOLICITORS: Dennis and Co RESPONDENT: Mr M Jacobs QC SOLICITORS: Peter Rees

JUDGMENT:

IN THE LAND AND Matter No

. 30121 of 1994

ENVIRONMENT COURT Coram

: Bignold J

OF NEW SOUTH WALES

23 December 2003

SHANNON LUKA

Applicant

v

LAKE MACQUARIE CITY COUNCIL

First Respondent

JUDGMENT

A. INTRODUCTION

1. These are three Notices of Motion filed by the Respondent (the Council) in these pending class 3 proceedings, being a claim to compensation pursuant to the Land Acquisition (Just Terms) Compensation Act 1991 (the Just Terms Act) seeking alternatively the following relief—

(i) dismissal of the proceedings for want of prosecution;

(ii) dismissal of the proceedings by reason of the failure of the Applicant to comply with various specific directions that have been given by the Court; or

(iii) stay of the proceedings either until the Applicant pays the Council’s assessed costs pursuant to orders made respectively by the Court of Appeal and the High Court of Australia, or provides security for the Council’s costs in the pending proceedings.

2. The substantive proceedings are proceedings that were remitted to the Court by orders made by the Court of Appeal on 7 December 1999 in allowing the Council’s appeals against my two determinations of compensation which orders were themselves varied by the High Court of Australia on 4 August 2000 in allowing an appeal against the judgment of the Court of Appeal.

3. In these remitted proceedings the Council had earlier been unsuccessful in seeking the dismissal of the proceedings for want of prosecution: see Luka v Lake Macquarie City Council (2001) NSWLEC 251. In dismissing the Council’s earlier Notice of Motion, I also granted leave to the Applicant to obtain a hearing date for the remitted proceedings upon the basis that she would be relying upon evidence previously filed in the proceedings, but for various reasons no hearing dates have yet been allocated. Instead, there have been a series of interlocutory proceedings initiated by the Council which have now culminated in the Council’s present claims seeking the dismissal or stay of the remitted proceedings.

4. The Applicant, in resisting the Council’s Motions, has adopted the same position as she adopted in successfully resisting the Council’s earlier Motion seeking dismissal of the proceedings for want of prosecution, namely seeking to obtain a hearing date for the now inexcusably long delayed completion of the remitted proceedings upon the basis that she wishes to present her case in support of her claim to statutory compensation under the Just Terms Act upon the basis of evidence previously given in the proceedings.

5. It is important to be recognise at the outset that the Council’s fundamental complaint against the Applicant’s conduct in respect of the remitted proceeding concerns her inability to provide sufficient and precise information concerning the existence of possible equitable interests by virtue of options or uncompleted purchases of various parts of the lands that were compulsorily acquired, being lands in respect of which the Applicant was the registered proprietor under the Real Property Act 1900 at the date of compulsory acquisition.

6. The question of such possible equitable interests being in existence is not new in these proceedings. It was encountered at the original trial (completed in 1996) and it was referred to extensively in the Court of Appeal’s judgment three years later. But as that judgment makes tolerably clear, the problems raised by the existence of such equitable interests were not considered to be ultimately insurmountable: see Lake Macquarie City Council v Luka (1999) 106 LGERA 94 especially at pars 50, 54, 60, 61, 62, 66, 67 and 71 per Handley JA. It is in the light of that litigation history that the real question raised by the Council’s present Motions is whether the continuance of that same problem has been translated, in the light of the events unfolded by the interlocutory proceedings, into an insurmountable barrier to the Applicant prosecuting her claim for compensation under the Just Terms Act. As will appear, the Council has asserted that the Applicant’s response to the obligations imposed upon her by the relevant directions in relation to identifying possible equitable interests, should be characterised as obfuscatory and if that be so, whether such misconduct in the litigation, disentitles the Applicant from prosecuting her claim to compensation.

B. THE COUCIL’S MOTIONS FOR DISMISSAL OF THE PROCEEDINGS

7. Senior Counsel, in presenting the Council’s case in support of the Motions, conceded that the Motion seeking dismissal for want of prosecution has been effectively superseded by the Council’s later Motions filed in May and June 2003.

8. I agree and accordingly there is no need to adjudicate upon the earlier Motion. It was not pressed and accordingly should be dismissed.

9. If any adjudication were necessary, I would have reached the same conclusion that I reached in dismissing the Council’s original Motion seeking dismissal for want of prosecution for the same reasons that I expressed on that occasion: see (2001) LEC 251.

10. The Council’s Motion for dismissal of the proceedings on account of the Applicant’s failure to comply with the Court’s directions recites the following directions—

1. Direction 3(a) made on 6 August 2002;

2. Direction 3(b) made on the same occasion;

3. Direction 1 made on 15 November 2002; and

4. Direction 1 made on 10 April 2003.

11. The relevant Directions were in the following terms—

Directions 3(a) and 3(b) made on 6 August 2002:

3. The applicant is directed by not later than 28 days after the date of this Order to:
(a) serve and file in Court a full and proper affidavit providing the names and addresses of all persons who have any equitable interest in the subject land;

(b) notify the Registrar of this Court and provide a copy of such notification to Mr Peter Rees, Respondent’s solicitor, of the affidavits upon which she intends to rely

1. Direct the Applicant to file and serve further affidavit in respect of other known or discoverable interests in the resumed lands by 3 March 2003.

Direct the Applicant to respond to the Respondent’s Solicitor’s letter dated 28 March 2003 within 14 days.

12. In support of the Council’s Motion, the Council relies upon 6 affidavits sworn by its Solicitor Peter Rees dated respectively 24 September 2001, 11 September 2002, 17 September 2002, 5 November 2002, 20 May 2003 and 17 June 2003.

13. Those affidavits traverse the history and results of the interlocutory proceedings initiated by the Council in the remitted proceedings. (Additionally, they raise matters relevant to the Council’s application for security for costs which will be considered presently).

14. The relevant content of Mr Rees’ affidavits reveals the Applicant and the Applicant’s Solicitor’s responses to the various directions made by the Court requiring the provision by the Applicant of all known and discoverable equitable interests in the compulsorily acquired lands. The Council urges the Court to find that the Applicant has failed to conscientiously discharge the obligations imposed upon her in this respect, by virtue of the imprecise confusing and at times conflicting content of her various responses.

15. For her part, the Applicant relies upon her three affidavits sworn on 24 June 2002, 12 September 2002 and 4 March 2003 in which she discloses her state of knowledge or understanding of the existence of equitable interests in the compulsorily acquired land. She also relies upon her Solicitor’s letter dated 23 May 2003 in response to the Council’s Solicitor’s letter dated 28 March 2003 where it is asserted inter alia that “our client has attempted to provide the best details she can as to equitable interests concerning the laneways and roads” and that “(o)ur client’s affidavit of 4 March 2003 attempts to explain the client’s understanding of the current state of equitable interest”.

16. In her affidavit sworn 4 March 2003, the Applicant states inter alia that a number of the disclosed equitable interests are held by various relatives (her mother, sister, brother etc) and that she has been informed by them that they do not wish to join in the proceedings to make claims for compensation on their own behalf but will be content for the Applicant to privately account to them in respect of any compensation that may be awarded.

17. Notwithstanding the uncertainties and imprecisions contained in the various disclosures made by the Applicant, I am not satisfied that this is the result of any deliberate action or inaction on the part of the Applicant to avoid the obligations imposed upon her. I am not persuaded by the Council’s submission that the Applicant has been deliberately obfuscatory (or perfunctory) in her attempts to discharge the obligations imposed upon her by the various directions made in the interlocutory proceedings. Rather, I am satisfied that the uncertainties and imprecisions in the disclosed information are principally caused by the manner in which these interests were generally created ie by Mr Pryor entering into contracts with persons to purchase parts of the laneways where neither party employed a solicitor and the fact that most of the records of these transactions have been lost through no fault of Mr Pryor. The last-mentioned factor was expressly acknowledged in par 61 of the Court of Appeal’s judgment.

18. Even if the results of the extensive interlocutory proceedings remain far from certain so far as concerns possible equitable interests in the compulsorily acquired lands, should such results, without any attribution of fault or default on the part of the Applicant whose ownership of the compulsorily acquired land has always been known in these proceedings to be that of bare trustee for various family trusts, disentitle the Applicant from pursuing her claim to statutory compensation under the Just Terms Act?

19. In my judgment, to hold the Applicant to be disentitled to pursue her claim would be wholly disproportionate to whatever default in compliance with the Court’s directions that can legitimately be laid at her feet eg failure to comply strictly with the time stipulations given by the Court’s directions. This is particularly so in view of the following observations of Handley JA in par 71 of the Court of Appeal judgment:

The owner may be unable to provide addresses for service on the persons who may have had equitable interests under contracts, options or liens at the date of the resumption. In that case the Court may be able to exercise its jurisdiction under ss 22 and 23 of the Court Act to grant a declaration that there were no equitable interests in the land under contracts, options or liens at the date of the resumption within the actual knowledge of the council at the date of the declaration. This would enable the council to pay the compensation to the owner, and gain the protection of s 53 of the Just Terms Act. If for any reason such a declaration cannot be made, the council may have to pay the compensation into its trust account pursuant to s 51 of the Just Terms Act.

20. The fact that no equitable interest holder (other than Mr Johnson who has followed the whole course of the proceedings and who is prepared to be joined in the proceedings as a claimant in respect of an asserted equitable interest) reinforces the conclusion that the “problems” in identifying the possible equitable interests are not insurmountable problems for the completion of the remitted proceedings. In any case, the existence of such problems would not alter the plain fact that the Applicant was at the date of compulsory acquisition, the registered proprietor under the Real Property Act of the compulsorily acquired lands or the plain fact that the Just Terms Act confers upon her the statutory entitlement to compensation for the loss of her interest in the lands. Those facts are the paramount consideration in respect of the remitted proceedings and the questions of equitable interests sought to be answered by the extensive interlocutory proceedings are in comparison, incidental and subsidiary.

21. Accordingly, for all of the foregoing reasons, I would dismiss the Council’s Motion seeking the dismissal of the proceedings on account of the Applicant’s alleged failure to comply with the relevant Court directions.

C. THE COUNCIL’S MOTION FOR A STAY OF THE PROCEEDINGS

22. The Council’s Notice of Motion seeking a stay of the proceedings is founded upon the following alternate grounds—

(i) non-satisfaction of costs orders made against the Applicant by the Court of Appeal and the High Court of Australia; and
(ii) the Applicant should provide security for costs in respect of the hearing of the remitted proceedings.

23. According to Mr Rees’ affidavit, sworn 17 June 203, the Applicant is indebted to the Council in respect of assessments made of the costs orders made against the Applicant by the Court of Appeal and by the High Court in the total amount of $378,649. (The most recent assessment of costs is dated 5 March 2003 in the sum of $302,765 in respect of the costs of proceedings in this Court ordered to be paid by the Applicant by the costs order made by the Court of Appeal).

24. In the same affidavit, Mr Rees deposes that the Council has incurred in respect of the remitted proceedings costs and disbursements in the sum of $42,900 and that his estimate of future costs to be incurred in the proceedings are $13,600 on the hearing of the Council’s 3 Notices of Motion (the subject of this judgment) and a further $32,60 based upon a 3 day hearing if the remitted proceedings are to be completed.

25. Mr Rees states that the Applicant has not paid any amount to the Council in respect of the assessed costs orders made against her. Subsequent to his affidavit, the Applicant has been examined as a Judgment Debtor in the Penrith Local Court. The written outcome of that examination was tendered (Exhibit A). It includes the following question and answer:

Q:What arrangements are you prepared to make to satisfy this Judgment debt?

A: If Lake Macquarie Council pay the defendant, what the defendant believes they are owed, then they would make some arrangement.

26. In my judgment, and having regard to the likely limited nature and scope of the hearing required of the remitted hearing and the likely costs thereof (the Council’s estimate of an estimated three day hearing with costs of some $32,000, being considerably less than the costs already incurred by the Council in the interlocutory proceedings), there should be no stay of the proceedings as sought by the Council in its Motion on either of the alternate grounds relied upon.

27. The Council’s argument that it is unlikely that the Applicant would recover compensation beyond the amount of $16,500 offered by the Council has already been rejected by my judgment of 31 October 2001.

28. The amount of compensation has simply not been determined upon the basis formulated in par 24 of the Court of Appeal’s judgment namely “(T)he land must therefore be valued as roads and lanes burdened with these private rights of way and incapable of being used or developed for any other purpose”.

29. I am of course very conscious of the Court of Appeal’s declamation that the amounts of compensation totally $682,836 that I had determined in the original proceedings “lack all reality” but that declamation does not provide the measure of compensation that the Just Terms Act prescribes in respect of the loss of the Applicant’s interest in the compulsorily acquired land. The purpose of the remitter, especially in the light of the High Court’s variation of the Court of Appeal’s orders, is that this Court must determine the amount of compensation payable pursuant to the Just Terms Act. So much is clearly established by my judgment of 31 October 2001.

30. I have earlier noted that the Applicant intends to rely upon the evidence admitted in the original proceedings in support her claim to compensation. In these circumstances, it is unlikely that a three day hearing as estimated by Mr Rees will be necessary, but even if it were required, Mr Rees’ evidence demonstrates that the costs incurred by the Council in the interlocutory proceedings (including the hearing of the Council’s present Notices of Motion) far exceed the estimated costs of that hearing.

31. With the benefit of hindsight, it might fairly be said that the quest for discovering the existence of possible equitable interests in the compulsorily acquired lands has proven to be largely illusory. But equally, it might be reflected that the efforts and costs of that quest have been disproportionate in relation to the outstanding issue requiring final determination in this protracted litigation. Be that as it may, what has or has not been yielded by that quest, should not deflect the Court from its one outstanding task in respect of the remitted proceedings, namely to determine what compensation is payable to the Applicant pursuant to the Just Terms Act. Nor should those yields nor the previous history of the litigation (namely those aspects of it that have been the subject of the decisions on appeal of the Court of Appeal and the High Court of Australia) deflect the Court from that outstanding task or unnecessarily impede the Applicant in her reasonable and legitimate desire to complete the case (being a desire that has been consistently expressed since the proceedings were first remitted to this Court).

32. The Council’s stay application based upon the alternate grounds that I have identified, would in my opinion, operate oppressively against the Applicant’s legitimate desire to conclude this sorry saga of litigation, given the limited nature and scope of the remaining outstanding task in the overall litigation history of the case.

33. For all the foregoing reasons, the Council’s stay Motion should be dismissed.

ORDERS

34. For the foregoing reasons, I order that each of the Council’s three Notices of Motion be dismissed. The question of costs is reserved. The parties have leave to obtain a hearing date from the Registrar for the completion of the proceedings. The exhibits shall remain on the Court file.