NA & J Investments Pty Ltd v Minister Administering Water Management Act 2000 (No 4)

[2012] NSWLEC 120

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	NA & J Investments Pty Ltd v Minister Administering Water Management Act 2000; Arnold v Minister Administering Water Management Act 2000 (No 4) [2012] NSWLEC 120
Hearing dates:	22,23,25 May 2012
Decision date:	25 May 2012
Jurisdiction:	Class 4
Before:	Biscoe J
Decision:	Orders set out in annexures to judgment
Catchwords:	PRACTICE AND PROCEDURE:- judicial review proceedings - application to strike out part of Applications and Points of Claim claiming damages - Application for advance rulings as to admissibility of evidence under s 192A Evidence Act 1995 - determination of proceedings before determination of contested allegation that the proceedings include a claim in tort for conversion.
Legislation Cited:	Civil Procedure Act 2005 ss 61, 149B Evidence Act 1995 s 192A Federal Court of Australia Act 1976 (Cth) s 31A Land and Environment Court Act 1979 s 16A Land Acquisition (Just Terms Compensation) Act 1991 Limitation Act 1969 Water Act 1912 Water Management Act 2000 ss 45(1)(a), 47, 50, Schedule 10
Cases Cited:	Agar v Hyde [2000] HCA 41, 201 CLR 552 Arnold v Minister Administering Water Management Act 2000 [2007] NSWLEC 531, 157 LGERA 379 Arnold v Minister Administering the Water Management Act 2000 [2008] NSWCA 338, 73 NSWLR 196 Arnold v Minister Administering the Water Management Act [2010] HCA 3, 240 CLR 242 Attorney-General for the Northern Territory v Minister for Aboriginal Affairs (1989) 23 FCR 536 McCormack v Commissioner of Taxation [2001] FCA 1700, 114 FCR 574 Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707, 148 FCR 446 Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156 Friends of King Edward park Inc v Newcastle City Council [2012] NSWLEC 113 Gondarra v Minister for Families, Housing, Community Services and Indigenous Affairs [2012] FCA 185 NA & J Investments Pty Ltd v Minister Administering Water Management Act 2000; Arnold v Minister Administering the Water Management Act 2000 [2011] NSWLEC 51, 181 LGERA 166 NA & J Investments Pty Ltd v Minister Administering the Water Management Act 2000; Arnold v Minister Administering the Water Management Act 2000 (No 2) [2011] NSWLEC 115 NA & J Investments Pty Ltd v Minister Administering the Water Management Act 2000; Arnold v Minister Administering the Water Management Act 2000 (No 3) [2011] NSWLEC 171 Rossi v Living Choice Australia Ltd [2012] NSWLEC 112 Southern Cross Airports v Chief Commissioner of State Revenue [2011] NSWSC 349 Spencer v Commonwealth of Australia [2010] HCA 28, 241 CLR 118 Telecom Vanuatu Ltd v Optus Networks Pty Ltd [2005] NSWSC 951 TKWJ v The Queen [2002] HCA 46, 212 CLR 124
Category:	Procedural and other rulings
Parties:	41292 of 2006 NA & J Investments Pty Ltd and Others (Applicants) Minister Administering the Water Management Act 2000 (First Respondent) State of New South Wales (Second Respondent) 40049 of 2007 Alan Arnold and Others (Applicants) Minister Administering the Water Management Act 2000 (First Respondent) State of New South Wales (Second Respondent)
Representation:	COUNSEL: Mr P E King (Applicants) Mr J Hutton (Respondents) SOLICITORS: Taylor and Whitty (Applicants) Crown Solicitor's Office (Respondents)
File Number(s):	41292 of 2006 and 40049 of 2007

Judgment

INTRODUCTION

1. These are two proceedings in Class 4 of the Court's jurisdiction, NA & J Investments Pty Ltd v Minister Administering the Water Management Act 2000 (Proceedings No 41292 of 2006) (NA&J) and Arnold v Minister Administering the Water Management Act 2000 (Proceedings No 40049 of 2007) (Arnold).

1. The numerous applicants in each of the proceedings are farmers who challenge the validity of Water Sharing Plans under the Water Management Act 2000 (Act). They also claim damages and compensation. The applicants in Arnold challenge the validity of the Water Sharing Plan for the Lower Murray, made by the Minister under s 50 of the Act on 17 October 2006. The applicants in NA&J challenge the validity of the Amended Water Sharing Plan for the Lower Murrumbidgee, made by the Minister under s 50 of the Act, and amended under s 45(1)(a) on 1 October 2006. The applicants claim to have held bore licences under Part 5 of the Water Act 1912, which have been replaced, by virtue of the making of the above Water Sharing Plans, by aquifer access licences under the Act. As a result, if the Water Sharing Plans are valid, their entitlements to extract groundwater have been significantly reduced.

1. I am dealing with notices of motion in both proceedings by the respondents, the Minister Administering the Water Management Act 2000 and the State of New South Wales, filed on 13 April 2012 seeking:

(a)   orders striking out those parts of the Third Further Amended Application and Fourth Further Amended Points of Claim in the Arnold proceedings and the Fourth Further Amended Application and Fifth Further Amended Points of Claim in the NA&J proceedings that seek damages or compensation (prayers 2 and 3). The strike-out motions are brought pursuant to rr 13.4(1) and 14.28(1)(a) of the Uniform Civil Procedure Rules 2005 (UCPR) on the basis that the pleadings disclose "no reasonable cause of action" for damages or compensation;

(b)   in the alternative to the strike-out orders, orders for separate hearings of questions relating to liability and questions relating to damages and compensation (prayer 4); and

(c) an order pursuant to s 61 of the Civil Procedure Act 2005 that all questions about the admissibility or use of all evidence proposed to be adduced by the applicants at trial be ruled upon in advance of the trial under s 192A of the Evidence Act 1995 (NSW) (prayer 1).

1. The orders sought in the notices of motion are interrelated in the sense that whether loss and damage is in issue impacts on the admissibility of parts of the applicants' evidence, and what evidence is admitted will affect the consideration of whether it is appropriate to order separate hearings.

1. As it turned out, the hearing of the motions became in part a case management hearing, the applicants did not press certain of their claims for damages and clarified their position in other respects, and the parties reached agreement as to a number of matters.

PROCEDURAL BACKGROUND

1. The proceedings have been on foot for an unhappily long time, largely due to successful summary dismissal and strike-out applications, unsuccessful appeals and other interlocutory skirmishes. The proceedings should now be advanced to a final hearing as soon as practicable.

1. The NA&J proceedings commenced in 2006, the Arnold proceedings in 2007. Originally in Arnold, the Commonwealth of Australia was the third respondent. In 2007 the Arnold proceedings against the Commonwealth were summarily dismissed by Lloyd J: Arnold v Minister Administering Water Management Act 2000 [2007] NSWLEC 531, 157 LGERA 379. His Honour's decision was upheld by the Court of Appeal: Arnold v Minister Administering the Water Management Act 2000 [2008] NSWCA 338, 73 NSWLR 196; and by the High Court: Arnold v Minister Administering the Water Management Act [2010] HCA 3, 240 CLR 242.

1. Thereafter both proceedings proceeded in tandem. On 1 April 2011 Craig J, on the application of the respondents, determined to strike out two parts of the amended points of claim in both proceedings: NA & J Investments Pty Ltd v Minister Administering Water Management Act 2000; Arnold v Minister Administering Water Management Act [2011] NSWLEC 51, 181 LGERA 166 at [6], [11], [59] (NA&J No 1). The two parts struck out were, first, claims in tort for damages for negligent misrepresentation and, secondly, paragraphs alleging that in exercising his powers under the Act the Minister was required, but failed, to consider representations made by or on behalf of the respondents to some or all of the applicants as to the effect of the respective Water Sharing Plans.

1. On 17 June 2011 Craig J made orders formally striking out those two parts, made directions and delivered a further judgment relating to case management: NA & J Investments Pty Ltd v Minister Administering the Water Management Act 2000; Arnold v Minister Administering the Water Management Act 2000 (No 2) [2011] NSWLEC 115.

1. On 23 September 2011 the proceedings were again before Craig J for case management: NA & J Investments Pty Ltd v Minister; Arnold v Minister Administering the Water Management Act 2000 (No 3) [2011] NSWLEC 171. His Honour helpfully identified the three bases upon which the applicants make their claim as follows, at [3] - [6]:

3. The basis upon which the applicants make their claim is threefold. First, they challenge the validity of the decision of the Minister to make the Plan on administrative law principles directed to judicial review of an administrative decision. The bases upon which judicial review is sought are conventional. The applicants allege that in making the Water Sharing Plan the Minister failed to take into account relevant considerations; that he took into account irrelevant considerations; that the decision was irrational and, to the extent that there is a difference from the first two grounds upon which judicial review is claimed, there was a failure to comply with nominated statutory requirements of the Water Management Act in making the Water Sharing Plan.

4. The second basis of claim is that upon the Water Sharing Plan being made, it effected the acquisition of an interest in land for which compensation is payable pursuant to the Lands Acquisition (Just Terms Compensation) Act 1991 (the Just Terms Act). In terms, this claim is pleaded as an appeal pursuant to s 67 of the Just Terms Act.

5. The third basis of claim is founded upon s 100 of the Constitution. As I understand this claim, it is said that either the Minister failed to consider s 100 in the making of the Water Sharing Plan, or by its operation, that plan has been made in contravention of the rights of the applicants under that section. Further, it is pleaded that in making the Plan the respondent acted in breach of s 51(xxxi) of the Constitution.

6. The second basis of claim that I have identified is clearly one that will only arise should the applicants be unsuccessful in their first basis of claim. That is, it is dependant upon it being established that there was, by the valid making of the Water Management Plan, an acquisition of an interest in land. If the Water Sharing Plan is invalid then there has been no acquisition of an interest in land and thus the provisions of the Just Terms Act will not be engaged.

1. His Honour then decided and reasoned as follows:

(a)   The claims under the Land Acquisition (Just Terms Compensation) Act 1991 should be separately determined from the judicial review and constitutional claims and, because they will only arise if the applicants are unsuccessful in the judicial review and constitutional claims, those claims should first be considered: at [12].

(b) The applicants should be required to put on their lay evidence in affidavit form: [13] - [27]. The applicants had sought to put on outlines of evidence for each witness, with the witness' evidence to be adduced orally at the hearing. Some such outlines had been filed and served. His Honour referred to a number of considerations in favour of adhering to the usual course in Class 4 proceedings of requiring that evidence be by way of affidavit.

(c) One of the considerations in favour of requiring the applicants' evidence to be by way of affidavit was that the admissibility of the applicants' evidence could then be tested in advance of any hearing, by the giving of advance rulings under s 192A of the Evidence Act: at [17] and [24]. Although his Honour expressed no concluded view, he noted that "having regard to the grounds of challenge identified under the rubric of judicial review, the admissibility of that evidence is very much a live and important issue to be considered in managing the preparation of this matter for hearing": at [17], see also at [24]. Once affidavit evidence had been filed and served by the applicants in each proceeding, the respondents would be in a position to assess it and make such application as they may be advised to have determined, in advance of the hearing, the extent to which the evidence is admissible, such application being made either under s 192A of the Evidence Act or s 61 of the Civil Procedure Act: at [28].

(d) The filing of affidavit evidence would also enable the respondents to give consideration to applying for separation determination of liability and quantum issues, pursuant to r 28.2 of the UCPR: at [31].

1. Orders giving effect to Craig J's decision were made on 14 October 2011. They required that the applicants take steps to separate the Just Terms Act claims (Order 1), that the applicants' lay evidence be given in affidavit form (Order 2) and that the applicants file and serve all lay and expert evidence on which they rely by 24 February 2012 (Orders 3 and 4).

1. On 17 November 2011 the applicants filed and served further amended process reflecting the separation of the Just Terms Act claims, namely: (a) in Arnold, a Third Further Amended Application and Fourth Further Amended Points of Claim; (b) in NA&J, a Fourth Further Amended Application and Fifth Further Amended Points of Claim; (c) in both proceedings a document entitled "Just Terms Compensation Claim" isolating the Just Terms Act claims. On 16 December 2011 the respondents filed and served Points of Defence to Fourth Further Amended Points of Claim in Arnold and Points of Defence to Fifth Further Amended Points of Claim in NA&J.

1. It is administratively inconvenient, unconventional and outside the contemplation of the Land and Environment Court Act 1979 that Just Terms Act claims should be brought, and continue to repose in, Class 4 proceedings. Just Terms Act claims are assigned by the Land and Environment Court to Class 3 of the Court's jurisdiction where the Land and Environment Court Act stipulates that the rules of evidence do not apply and that very different procedures apply. I therefore propose to direct that the Just Terms Act claims be transferred to Class 3 Court files and be assigned Class 3 file numbers. I believe that is what Craig J contemplated would happen.

1. The applicants did not file and serve all lay and expert evidence on which they propose to rely by 24 February 2012, as ordered. They were given two further extensions of time and made subject to a partial guillotine order:

(a)   On 2 March 2012 orders were made by consent requiring that the applicants serve any further affidavits on which they rely on or before 16 March 2012; and

(b)   On 23 March 2012 orders were made by consent:

(i)   requiring the applicants to file and serve all remaining lay and expert evidence by 30 March 2012 (Order 1); and

(ii)   providing that the applicants shall not be entitled to file, serve or rely on any affidavit or expert report that has not been served on or before 30 March 2012 without leave of the Court (Order 2).

1. All lay and expert evidence on which the applicants propose to rely has now been filed and served.

STRIKE OUT OF APPLICANTS' CLAIMS FOR DAMAGES AND COMPENSATION

1. The strike-out applications now before the Court are of a limited nature. The respondents do not seek to strike out any of the substantive claims, which are judicial review claims and constitutional claims. They seek only to strike out the prayers in the Applications seeking damages or compensation (Arnold prayers 9, 10, 11 and 11A; NA&J prayers 9, 10, 10A and 11) and the paragraphs of the Points of Claim alleging that the applicants have suffered loss or damage (Arnold paragraphs 14 and 42; NA&J paragraphs 16 and 49).

1. The applicants submitted that this strike-out application should not be entertained. There is some force in the submission because good case management dictates that a single application to strike out claims that are said to disclose no reasonable cause of action be made and the respondents made a strike-out application more than a year ago, which was successful. The respondents' explanation for making this second strike-out application in respect of damages and compensation is that it has been prompted (a) by the separation of the Just Terms Act claims, which has raised the prospect of substantially simplifying the proceedings by removing questions of loss and damage entirely; and (b) the fact that the applicants' evidence on quantum of loss is extensive and largely or solely through lay witnesses (thus potentially raising difficult issues around common credit issues if separate liability/quantum trials are sought) and it will be time-consuming and costly to address both in terms of the resources of the Court and the parties. I did not find this explanation entirely satisfactory. Nevertheless, I have decided to entertain the present strike-out application.

1. The relevant principles governing a strike-out application on the basis that the pleading discloses no reasonable cause of action are set out in NA&J No 1 [14] - [16]. Those principles are:

(a)   the power to strike out a pleading on the basis that it discloses no reasonable cause of action is a power to be exercised sparingly and only where the absence of a reasonable cause of action is plain and obvious;

(b)   allegations of fact contained in the pleading are assumed to be established for the purpose of considering the strike-out application; and

(c)   a court is not precluded from entertaining extensive argument when determining whether the pleading discloses a reasonable cause of action. The necessity for determination of a difficult question of law is not a barrier to the dismissal of a claim.

1. The High Court commented on the principles governing a strike-out application in Spencer v Commonwealth of Australia [2010] HCA 28, 241 CLR 118, a case that concerned s 31A of the Federal Court of AustraliaAct 1976 (Cth). French CJ and Gummow J accepted that whatever description was used, summary dismissal or strike-out required "a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way" at [24], citing Agar v Hyde [2000] HCA 41, 201 CLR 552. Their Honours also said at [25]:

Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this Court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success.

1. The applicants indicated to me that they did not press paragraph 11 of the Arnold and NA&J Applications claiming compensation under the Act, and paragraph 42 of the Arnold Points of Claim and paragraph 49 of the NA&J Points of Claim claiming damages for conduct alleged to be unconstitutional. Consequently, those prayers and paragraphs will be struck out.

1. Since the Applications and Points of Claim in both matters are substantially the same, it is sufficient to set out the parts of the Arnold Application and Points of Claim to which the alleged claim in tort for conversion sounding in damages is said to be referable:

Application:

9. Damages, particulars of which are supplied separately, and interest.

10. Damages in lieu of injunctive relief.

11A. Exemplary damages, particulars of which are that the Respondents have exhibited a high handed disregard for the rights of the applicants herein, in that each of them has knowingly exerted undue pressure on the Applicants in the course of the proceedings in this Honourable Court by deciding in or about July 2007 to withhold payments to them under or pursuant to the Achieving Sustainable Groundwater Entitlements Joint State Commonwealth Project dated November 2005 and/or by withholding such payments on the ground that the Applicants have brought the proceedings against the Respondents or one or all of them so as to discourage the Applicants from obtaining justice in, and the decision of, this Honourable Court in the present matter.

Points of Claim:

12. By orders of the First Respondent published in the Gazette on 17 October 2006 and described as Water Sharing Plan for Lower Murray Groundwater Source 2006 and on 27 October 2006 described as Water Management (General) Amendment (Lower Murray) Regulation 2006 a substantial part of the water entitlements of the Applicants referred to in paragraphs 5 and 6 herein were purportedly converted from Water Act 1912 by the Act schedule 10 and thereby taken or acquired by the Second Respondent.

13. In consequence of the taking or acquisition a substantial part of the property and interest of the Applicants in their licences and water entitlements were resumed by the Second Respondent, and their water licences were converted and acquired, and their groundwater and linked entitlements were expropriated whereby the Second Respondent received a measurable and identifiable advantage and also received substantial moneys from the Commonwealth without paying any such moneys to the Applicants in respect of the loss of their licences and entitlements.

14. The taking or acquisition aforesaid has caused loss and damage to the Applicants and to the commercial viability of their landholdings and has rendered many of the Applicants penurious.

1. Ultimately, the applicants told me that the only claim for damages which they press is based on the common law tort of conversion which, they submit, is available under the above quoted prayers in the Applications and pleaded in paragraphs 13 and 14 of the Arnold Points of Claim (and 15 and 16 of the NA&J Points of Claim). The respondents deny that the proceedings include a claim in tort for conversion.

1. The reason that it is potentially important to the applicants to establish that the proceedings include this cause of action for the tort of conversion is that the proceedings were commenced within the three months time limit prescribed by s 47 of the Act, which might bar an amendment, or bar the commencement of fresh proceedings, alleging conversion.

1. Section 47 relevantly provides:

47 Validity of management plans and exercise of plan-making functions

(1) The validity of a management plan may not be challenged, reviewed, quashed or called into question before any court in any proceedings, other than before the Land and Environment Court in proceedings commenced within the judicial review period.

(2) The judicial review period in respect of a management plan is:

(a) the period of 3 months after the date the plan was published on the NSW legislation website, except as provided by paragraph (b), or

(b) in relation to a provision of the plan that was inserted by an amendment of the plan (other than an amendment under section 45 (1) (c)), the period of 3 months after the date that the amendment was published on the NSW legislation website.

A judicial review period does not arise as a result of the extension of the duration of a management plan.

(3) The judicial review period cannot be extended by the Land and Environment Court or any other court, despite any other Act or law.

(4) Without limiting subsection (1), the exercise by a designated person of any plan-making function may not be:

(a) challenged, reviewed, quashed or called into question before any court in any proceedings, or

(b) restrained, removed or otherwise affected by any proceedings,

other than before the Land and Environment Court in proceedings commenced within the judicial review period.

...

1. Do the proceedings include a claim for the tort of conversion? The following preliminary observations may be made but it is unnecessary to express a concluded view because of the course the parties eventually agreed to adopt referred to below at [30]:

(a)   The Applications give no clue to reliance on a claim in tort for conversion. All of their preceding prayers for declarations and injunction are expressly related to other matters.

(b)   It is not readily apparent that paragraph 13 of the Arnold Points of Claim and paragraph 15 of the NA&J Points of Claim, on which the applicants essentially rely, plead the tort of conversion. They contrast starkly with the clearly pleaded claim in tort for negligent misrepresentation which Craig J struck out. As was done with the pleading of the latter claim, if a claim in tort for conversion were consciously pleaded in paragraph 13, it would be expected to specifically address the elements of the tort in a way which made it apparent that it was being pleaded. The elements of the tort of conversion include at least (a) the existence of a chattel (a chose in possession rather than a chose in action); (b) the owner must have possession or a right to immediate possession of the chattel; (c) an intentional act or dealing with the chattel that is inconsistent with or repugnant to the rights of the owner; and (d) such an act or dealing will amount to such an infringement if it is an intended act of dominion or assertion of rights over the goods: Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 at [124]; Telecom Vanuatu Ltd v Optus Networks Pty Ltd [2005] NSWSC 951 at [10] - [12].

(c) The pleadings at paragraphs 12 to 14 of the Arnold Points of Claim (and the equivalent in the NA&J Points of Claim) appear in the first section of the Points of Claim entitled "Background". Paragraph 12, as the applicants acknowledge, does not refer to the tort of conversion. Paragraph 12 includes the words "purportedly converted from Water Act 1912 by the Act schedule 10". Schedule 10 of that Act is entitled "Conversion of former entitlements to access licences and approvals". This statutory concept of conversion has nothing to do with the common law tort of conversion. Arguably, the impression created by paragraphs 12 to 13 is that their references to conversion are to the statutory conversion the subject of Schedule 10 of the Act.

(d) Craig J did not perceive that a claim in conversion was part of the proceedings for he did not refer to it when summarising the causes of action in his judgment quoted above at [10].

(e)   The respondents say they did not understand that any claim in tort for conversion formed part of the proceedings until it was alluded to very recently at a directions hearing by the applicants' counsel.

1. The respondents submitted that:

(a)   They would oppose any application by the applicants to amend, or fresh proceedings to raise a claim in tort for conversion, for the following reasons:

(i) a claim in tort for conversion, if it were now to be made for the first time, would be barred by the three months time limitation in s 47 of the Act;

(ii)   the Court has no jurisdiction to entertain a claim in tort for conversion, including in the Court's ancillary jurisdiction (s 16A Land and Environment Court Act);

(iii)   a cause of action in tort for conversion is not available because one of the elements of that tort is that the subject matter of the conversion is a chattel (a chose in possession), whereas the subject matter of the applicants' alleged conversion are bore licences (choses in action).

(b)   In any case, a defence to any alleged conversion is that it was authorised by the Water Sharing Plans.

1. The applicants submitted or indicated that:

(a)   the Court has jurisdiction to entertain the conversion claim, alleged to be within the proceedings, in its ancillary jurisdiction given that a foreshadowed defence to it will be that the alleged conversion was authorised by the Water Management Plans, to which the applicants' reply will be that the plans are invalid;

(b)   if necessary, in order to make its conversion claim clearer, they would seek leave to amend the Points of Claim;

(c)   in case this Court has no jurisdiction to entertain the conversion claim, they intend to commence proceedings for conversion in the Supreme Court before the limitation period of 6 years under the Limitation Act 1969 expires in October this year, and they would then seek to have the (alleged) conversion parts of the proceedings in this Court transferred to the Supreme Court under s 149B of the Civil Procedure Act. To this the respondents replied that under s 149B only the entire proceedings, not just a part of the proceedings, can be transferred to the Supreme Court, as Craig J held in NA&J (No 2) at [16].

1. The alleged claim in tort for conversion is dependent upon the applicants establishing that the Water Sharing Plans are invalid. In contrast, the segregated Just Terms Act claims are dependent upon the applicants being unsuccessful in their claim that the Water Sharing Plans are invalid.

1. Since the alleged claim in tort for conversation will disappear if the applicants fail in their bid to have the Water Sharing Plans declared invalid, the parties eventually agreed during the hearing that the dispute as to whether that claim in tort for conversion is within the proceedings should await the determination of the rest of the proceedings, which are entirely concerned with whether the Water Sharing Plans are invalid. I agree with this course. It is reflected in the orders in relation to the conversion claim in the annexures to this judgment.

ADVANCE RULINGS IN RELATION TO EVIDENCE

1. The applicants in Arnold have served 24 lay affidavits (from a subset of the applicants) and three expert reports. The applicants in NA&J have served 34 lay affidavits (also from a subset of the applicants) and five expert reports.

1. The respondents seek an order pursuant to s 61 of the Civil Procedure Act that questions of admissibility or use of the applicant's evidence be ruled upon in advance of the trial under s 192A of the Evidence Act, which provides:

192A Advance rulings and findings

Where a question arises in any proceedings, being a question about:

(a) the admissibility or use of evidence proposed to be adduced, or

(b) the operation of a provision of this Act or another law in relation to evidence proposed to be adduced, or

(c) the giving of leave, permission or direction under section 192,

the court may, if it considers it to be appropriate to do so, give a ruling or make a finding in relation to the question before the evidence is adduced in the proceedings.

1. The question whether any s 192A ruling should be made has to be determined on the basis referred to above at [30]. Resolution of the dispute as to whether a claim in tort for damages for conversion is within the proceedings is to be deferred until after determination of the balance of the proceedings.

1. Initially, the respondents sought the following rulings under s 192A:

(a)   all of the applicants' lay evidence should be rejected on the basis of lack of relevance;

(b)   all the applicants' expert evidence should also be rejected on the basis of lack of relevance; and

(c)   if any part of the applicants' lay or expert evidence is accepted by the Court to be relevant, specific parts should be rejected or excluded because they are bad in form (for the most part, in the form of inadmissible lay opinion, conclusion or submission).

1. The specific objections going to the form of the lay evidence are identified in two schedules of objections annexed to the respondents' submissions (Lay Evidence Schedules of Objections). The specific objections to the expert evidence (both formal objections and relevance objections) are also set out in a schedule annexed to the respondents' submissions (Expert Evidence Schedule of Objections). The respondents have not prepared schedules setting out relevance objections to specific parts of the lay affidavits. The respondents suggest that preparation of such a schedule at this stage would not be an efficient way of proceeding.

1. Ultimately, the respondents limited their s 192A application to the following four questions relating to the applicants' lay affidavits (excluding annexed documents):

(a)   What parts of the lay affidavits and expert reports are relevant only to loss and damage?

(b)   What parts of the lay affidavits are relevant only to the negligent misrepresentation claim (which has been struck out)?

(c)   What parts of the lay affidavits are relevant only to the social impact of the Plan after it was implemented?

(d)   Are oral statements attributed to Departmental Officers and others associated with the making of the Plan including relating to (b) above admissible?

1. Leaving aside the possible tortious conversion claim to be dealt with in the future, evidence falling within the descriptions in (a) to (d) above appears to be irrelevant and inadmissible except in relation to (d) if the oral statements of relevant Departmental Officers constitute admissions of pleaded facts.

1. The respondents also proposed, by reference to the above four questions, that the Court should rule on specific objections to two affidavits in each of the proceedings in the hope that this would be a guide for the parties to determine the admissibility of numerous other affidavits.

1. The format of the lay affidavits include matters along the following lines (without being exhaustive):

(a)   The deponent identifies land properties and licences under the Water Act and sets out entitlements before the Water Sharing Plan came into effect. This is substantially undisputed. The far more convenient method of proof is through an agreed summary setting out the applicants' former entitlements, new entitlements and the differences between them (as has been done in a schedule to one of the affidavits: Taylor sworn 22 March 2012). The respondents indicated that they would consent to an order that they prepare such a schedule within 7 days;

(b)   Much evidence appears to be directed to loss and damage which is irrelevant for present purposes. Such evidence includes where (i) the deponent describes circumstances in which the deponent has purchased a farm and any investment made in bores and irrigation equipment prior to the Water Sharing Plan coming into effect; (ii) the deponent then opines on the importance of the investment to the economic and commercial viability of the deponent's farm; and (iii) the deponent gives an account (or expresses opinions as to) the financial impact of the Water Sharing Plan on their farming business;

(c)   Some deponents give evidence of oral representations by officers of the State, on which they relied. This evidence appears to be irrelevant because it is directed to the negligent misrepresentation claim, which has been struck out. In oral submissions, the question arose whether some of such oral representations by officers of the State constitute admissions that pleaded mandatory considerations were not taken into account by the decision-maker, or that pleaded irrelevant considerations were taken into account by the decision-maker. If so, they are originally relevant as admissions;

(d)   Some deponents refer to anomalies they experienced (eg that their full water usage was not reflected in metered figures used to determine their history of extraction for the purposes of the Water Sharing Plan and the financial assistance scheme). The irrationality ground includes an allegation that the Minister's decision was irrational because of "failure to address anomalies occurring in the plan making process". It is difficult to see how this evidence goes towards establishing that, on the material before the Minister, the Water Sharing Plans were irrational;

(e)   The deponent gives an account of (or expresses an opinion as to) the social impact of the Water Sharing Plan on the deponent. Social impact is raised in the pleadings as an alleged mandatory consideration. However, the actual social impacts of the Water Sharing Plan seem irrelevant.

1. A threshold issue is whether this is an appropriate case in which to make advance rulings under s 192A of the Evidence Act. Section 192A is intended to empower the Court to make such a ruling in the interests of "efficient trial management": Gondarra v Minister for Families, Housing, Community Services and Indigenous Affairs [2012] FCA 185 at [25]; Southern Cross Airports v Chief Commissioner of State Revenue [2011] NSWSC 349 at [14]. Whether the Court should make advance rulings under s 192A is a discretionary case management decision to be made in accordance with the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute.

1. In TKWJ v The Queen [2002] HCA 46, 212 CLR 124 at [42] Gaudron J observed: "It may, for example, be appropriate to give an "advance ruling'' if all matters relevant to the issue have been or can then be ascertained and if it is clear that a ruling will inevitably be required." Her Honour also said at [43] (citations omitted):

Although it may be appropriate in some cases to give an "advance ruling" as to a matter in respect of which the Evidence Act requires leave, permission or direction, it is to be remembered that counsel ultimately bears the responsibility of deciding how the prosecution and defence cases will be run. Thus, it is that "advance rulings", even if permitted by a provision of the Evidence Act requiring leave or permission, may give rise to a risk that the trial judge will be seen as other than impartial. Particularly is that so in the case of advance rulings that serve only to enable prosecuting or defence counsel to make tactical decisions. If there is a risk that an "advance ruling" will give rise to the appearance that the trial judge is other than impartial, it should not be given.

1. In Southern Cross Airports v Chief Commissioner of State Revenue [2011] NSWSC 349 Gzell J held that it was appropriate to give an advance ruling as to the admissibility of documents as business records, that being a discrete and limited issue.

1. In judicial review proceedings, subject to the particular grounds of review that are raised, lay evidence of matters that were not before the decision-maker is not relevant and, therefore, not admissible: see Attorney-General for the Northern Territory v Minister for Aboriginal Affairs (1989) 23 FCR 536 at 539-540 per Lockhart J; McCormack v Commissioner of Taxation [2001] FCA 1700, 114 FCR 574 at [37] - [40] per Sackville J. Similarly, and subject to the particular grounds of review raised, expert evidence that was not before the decision-maker is also irrelevant: see the authorities collected in DEXUS Funds Management Ltd v Blacktown City Council [2011] NSWLEC 156 at [9] per Craig J; see also Australian Retailers Association v Reserve Bank of Australia [2005] FCA 1707, 148 FCR 446 at [442] per Weinberg J; Friends of King Edward park Inc v Newcastle City Council [2012] NSWLEC 113 at [67] - [85] per Biscoe J; Rossi v Living Choice Australia Ltd [2012] NSWLEC 112 at [43] - [50] per Pepper J.

1. To be admissible, lay and expert evidence must be relevant to establishing one or more of the particular grounds of review alleged. In this case, the relevant grounds of judicial review are failure to have regard to relevant considerations, having regard to irrelevant/impermissible matters, irrationality, failure to comply with mandatory statutory procedures and, in NA&J, denial of procedural fairness. The grounds raise statutory construction issues which will also need to be considered.

1. I consider that, at this stage, it is appropriate to make some advance rulings in relation to lay evidence given that:

(a)   The applicants have served a substantial amount of lay and expert evidence. Scrutiny of some of the lay evidence puts its admissibility in sufficient doubt to justify the making of advance rulings, particularly in the context of judicial review proceedings where evidence not before the decision-maker is not usually relevant.

(b)   There will be a substantial saving of time and cost for the parties and the Court if some of the lay evidence is ruled to be inadmissible, including if it leads to decisions not to require any or some of the lay witnesses for cross-examination. The lay affidavits attribute oral statements to, and refer to the conduct of, a large number of NSW government employees and officers between the period 2003 and 2006 (that is, over seven years ago).

1. After discussion with the parties, the orders that I propose to make pursuant to s 192A, which the applicants oppose, are included in the orders in the annexures to this judgment.

AMENDMENTS TO POINTS OF CLAIM

1. During the hearing the applicants orally moved to amend the Points of Claim in both proceedings in certain respects. The respondents objected and ultimately the applicants did not press the oral motion.

HEARING DATE

1. The applicants seek directions that hearing dates be now fixed and that the respondents serve their affidavits. Although the proceedings have been on foot for an extraordinarily long time, I do not think that this should be done until after the documents to be tendered are settled and the applicants indicate what parts of their large affidavit materials are not to be read in light of the orders made for determination of separate questions and the ruling under s 192A of the Evidence Act (provision is made for those matters in the orders annexed to this judgment).

ORDERS

1. The orders of the Court are as set out in Annexures A and B to this judgment.

ANNEXURE A

ANNEXURE B

Amendments

31 January 2013 - typographical error

Amended paragraphs: cover - parties

Decision last updated: 31 January 2013