Parramatta City Council v Transport Construction Authority
[2011] NSWLEC 49
•31 March 2011
Land and Environment Court
New South Wales
Medium Neutral Citation: Parramatta City Council v Transport Construction Authority [2011] NSWLEC 49 Hearing dates: 15 -16 March 2011 Decision date: 31 March 2011 Jurisdiction: Class 3 Before: Biscoe J Decision: Unless a party submits different draft orders to reflect decision and submissions within three working days (1) Proceedings 30186 of 2010 are struck out; (2) Proceedings 40976 of 2010 are dismissed; (3) No order as to costs in either proceedings; (4) Exhibits may be returned.
Catchwords: COMPULSORY ACQUISITION OF LAND - whether valid compensation notice issued - whether Court has jurisdiction over purported Class 3 objection to amount of compensation offered - whether good cause for failure to lodge objection within 90 days - whether general provision in a deed settling other disputes between the parties barred the Class 3 compensation claim. Legislation Cited: Land Acquisition (Just Terms Compensation) Act 1991 ss 3, 4, 10, 19, 39, 41, 42, 45, 46, 47, 48, 54, 55, 56, 59, 66, 67, 68
Interpretation Act 1987 s 134
Land and Environment Court Rules 1996
Roads Act 1993 ss 204, 205, 206, 226, 261
State Owned Corporations Act 1989 s 20F
Transport Administration Act 1988 s 18E
Interpretation Act s 134Cases Cited: Ashfield Municipal Council v Roads and Traffic Authority of NSW [2000] NSWLEC 117
Ashfield Municipal Council v Roads and Traffic Authority of NSW [2001] NSWCA 370, 117 LGERA 203
Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 AC 251
County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407, 264 ALR 15
Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43, 236 CLR 120
Grant v John Grant and Sons Pty Ltd [1954] HCA 23, 91 CLR 112
International Air Transport Association v Ansett Australian Holidays Ltd [2008] HCA 3, 234 CLR 151
Jango v Northern Territory [2007] FCR 531, 240 ALR 432
Marinchek v Cabport Pty Ltd [2010] NSWCA 334
Parramatta City Council v Transport Infrastructure Development Corporation (No 31283 of 2004)Category: Principal judgment Parties: 30186 of 2010:
40976 of 2010:
Parramatta City Council (Applicant)
Transport Construction Authority (Respondent)
Transport Construction Authority (Applicant)
Parramatta City Council (Respondent)Representation: 30186 of 2010:
A Galasso SC with R J Carruthers (Applicant)
B W Walker SC with C H Withers (Respondent)40976 of 2010:
40976 of 2010:
B W Walker SC with C H Withers (Applicant)
A Galasso SC with R J Carruthers (Respondent)
30186 of 2010:
Blake Dawson (Applicant)
Clayton Utz (Respondent)
Clayton Utz (Applicant)
Blake Dawson (Respondent)
File Number(s): 30186 of 2010 and 40976 of 2010
JUDGMENT
CONTENTS
Paragraphs
| INTRODUCTION | 1-7 |
| Land Acquisition (Just Terms Compensation) Act 1991 | 8-16 |
| Roads Act 1993 | 17-18 |
| BACKGROUND | 19-48 |
| A preliminary jurisdictional point | 49-66 |
| THE S 66(3) MOTION IN THE JT ACT PROCEEDINGS | 67-93 |
| The deed proceedings | 94-126 |
| ORDERS | 127-128 |
INTRODUCTION
In New South Wales, when a person's land is compulsorily acquired by an authority of the State, legislation guarantees that the person will receive compensation which is not less than the market value of the land, and mandates that the authority acquiring the land must offer the person compensation in an amount determined by the Valuer-General in accordance with that legislation. The person can lodge an objection against the amount offered with this Court. In the present case, A's land was compulsorily acquired by B, an authority of the State. By mistake, the Valuer-General determined the amount of compensation under the wrong legislation, which did not allow recovery of market value, at a nominal $5,000. B offered compensation in that amount. A has lodged an objection with the Court claiming that it is entitled to the market value, which it estimates to be in excess of $10 million. B contends that the objection is defeated by a general release provision in an earlier deed which settled other specified disputes between the parties for $389,500. If that is so, then, potentially, B has gained an enormous windfall.
There are two proceeding s before the Court. In the first, Parramatta City Council seeks a determination, pursuant to Division 4 of the Land Acquisition (Just Terms Compensation) Act 1991 ( JT Act ), of the amount of compensation to be paid to the Council for parts of two public roads, Argyle and Wentworth Streets, Parramatta ( the Roads ), which were compulsorily acquired in 2004 from the Council by the respondent, Transport Construction Authority ( TCA ) (formerly called Transport Infrastructure Development Corporation) ( 2010 JT Act Proceedings ). These proceedings are an objection to the amount of compensation offered by TCA, which was in the sum of $5,000 and did not include market value. The Council says it is entitled to compensation for market value, which it estimates exceeded $10 million.
The matter presently before the Court for determination in the 2010 JT Act Proceedings is a motion by the Council seeking the Court's leave pursuant to s 66(3) of the JT Act to lodge an objection out of time to the determination of compensation made by the Valuer-General on 28 June 2004 with respect to that land.
Section 66(3) prohibits the Court from hearing and determining an objection lodged out of time unless it is satisfied that there is good cause for the failure . I am satisfied that there is good cause for the Council's failure. However, in my opinion, the Court does not have jurisdiction over the 2010 JT Act Proceedings. Therefore they should be struck out.
The second proceedings were transferred to this Court from the Supreme Court of New South Wales by order of the Supreme Court dated 18 November 2010 ( Deed Proceedings ). TCA seeks declarations that a deed of release and settlement executed by the Council and TCA on 15 November 2006 ( the Deed ) (a) applies in respect of the Roads; (b) operates as a bar to the 2010 JT Act Proceedings; and (c) has the effect of compromising for all time two 2004 proceedings brought by the Council against TCA under the JT Act (referred to at [34] and [36] below). TCA also seeks an order enjoining the Council from pursuing or prosecuting its application in the JT Act Proceedings.
The Council contends, on several grounds, that the Deed is not a bar to the Class 3 Proceedings. Primarily, the Council disputes TCA's construction of the Deed. Alternatively, it cross claims for rescission of the Deed or for rectification of the Deed so as to exclude TCA's liability to pay compensation for the Roads from its ambit. The equity for rescission or rectification is said to be the common intention of the parties that they would settle their disputes in relation only to the acquisition of other lands specified in the deed. Alternatively, the equity is said to be their common mistake that the JT Act did not apply and that the Roads Act 1993 did apply to the determination of compensation. For rescission the Council offers to do equity, mainly by refunding the amount paid by TCA under the Deed together with interest. Finally and alternatively, the Council contends that the Deed is unenforceable as contrary to public policy because it surrenders a statutory right to just compensation which is not less than market value.
In my opinion, the Deed does not have the construction for which TCA contends and, consequently, the Deed Proceedings should be dismissed.
Land Acquisition (Just Terms Compensation) Act 1991
Land is compulsorily acquired by an authority of the State by notice published in the NSW Gazette: s 19 JT Act .
The JT Act expressly guarantees that when land is compulsorily acquired by an authority of the State, the amount of compensation will not be less than the market value (unaffected by the proposal) at the date of acquisition: ss 3, 10.
The statutory machinery for assessment of compensation commences with the lodging of a claim with the resuming authority: s 39. The authority must, as soon as practicable, give the Valuer-General a copy: s 41(1). The Valuer-General is to determine the amount of compensation to be offered: s 47.
The authority must, within 30 days after publication of the acquisition notice in the Gazette, give the former owner a compensation notice; that is, a written notice of the compulsory acquisition, the owner's entitlement to compensation and the amount of compensation offered (as determined by the Valuer-General): s 42 and definition of "compensation notice" in s 4.
A person is entitled to an amount of compensation which, having regard to all relevant matters, will justly compensate the person for the acquisition: s 54. Subject to that just compensation override, in determining the amount of compensation regard must be had only to the matters listed in s 55. Those matters include the market value of the land on the date of its acquisition (as defined in s 56) and any loss attributable to disturbance (as defined in s 59).
If a person entitled to compensation does not, within 90 days after receiving the compensation notice, lodge an objection to the amount of compensation offered, the offer is taken to have been accepted. This assumption is subject to any decision of the Court on an objection lodged after the 90 day period: s 45.
Where an objection is lodged outside the 90 day period, the Court cannot hear and dispose of the claim for compensation unless satisfied that there is good cause for the person's failure to lodge the objection within that period: s 66(3).
A person who has not been given a compensation notice and whose claim for compensation is rejected (or taken to be rejected) may appeal to the Court within 90 days after the rejection: s 67(1). The reference to "rejected (or taken to be rejected)" is to s 46, which requires an authority to reject a claim if it considers that the person is not entitled to compensation. Section 46(3) provides that the claim is taken to have been rejected if the authority has not dealt with the claim within 60 days of receipt. In such a case, an appeal lodged outside the 90 day period cannot be heard and determined unless the Court is satisfied that there is good cause for the failure to lodge the appeal within that period: s 67(3). Contrary to TCA's suggestion, s 67(3) is irrelevant in the present case because there was no rejection or deemed rejection of the Council's claim under s 46.
Payment of compensation in respect of a matter before the Court is to be made in accordance with any agreement reached during the proceedings or, if no such agreement is reached, in accordance with the Court's decision: s 68(1). However, if the authority gave the owner a compensation notice, the authority is required to pay 90 per cent of the amount of compensation offered in the notice as an advance payment within 28 days after notice of the institution of proceedings: s 68(2). The authority has power to make an advance payment at any time after land is acquired: s 48.
Roads Act 1993
The compensatory scheme detailed in the Roads Act is in sharp contrast to the JT Act . The Roads Act provides that where "the Crown" acquires Council owned public road by compulsory process (and the council does not have to construct a new road to replace the acquired road), the amount of compensation to which the council is entitled is limited by s 206(2). This section provides that the compensation awarded will be the sum of the money (if any) the council paid for the acquisition of the land; the money that the council has spent on the construction of the road; and the money that the council has spent, in erecting or constructing in, on or over the road, any conduits, poles or structures for certain uses.
A claim for compensation under the Roads Act may, by agreement, be referred for arbitration: s 226. Otherwise, any dispute may be resolved politically by agreement between the Ministers responsible for the public authorities or, if agreement cannot be reached, by the Premier: s 261. There is no express machinery for a dispute to be resolved by a court.
Background
TCA was empowered, for any of its purposes, to acquire land by compulsory process in accordance with the JT Act : s 18E Transport Administration Act 1988.
On 12 February 2004, TCA served a proposed acquisition notice on the Council pursuant to Division 1 of Part 2 of the JT Act relating to the Roads and an adjacent parcel of land, Lot 2 in Deposited Plan 857877 ( Lot 2 ).
On 21 May 2004 TCA compulsorily acquired the Roads and Lot 2, collectively shown as Lot 100 in a specified registered plan, by notice published in the NSW Government Gazette.
On the same day TCA compulsorily acquired the Council's leasehold interest in land in Darcy Street Parramatta (Darcy Street Leasehold) .
Both acquisitions were to enable the development of the Parramatta Transport Interchange.
On 14 July 2004, the Department of Commerce gave a compensation notice to the Council purporting to be pursuant to s 42(2) of the JT Act . A "compensation notice" is defined in s 4 as "a notice under section 42 which notifies the former owners of land of a compulsory acquisition, their entitlement to compensation and the amount of compensation offered". Since s 42 imposes on the resuming authority the obligation to give a compensation notice, it may be inferred that the Department of Commerce was acting on TCA's behalf in giving the notice.
The compensation notice stated that the Valuer-General had determined the amount of compensation to be offered to the Council for its interest in Lot 2 and the Roads at $4,215,000, and enclosed a copy of the Valuer-General's Determination of Compensation. Thus, there was a single offer in a single amount covering both the Roads and Lot 2. The compensation notice said that if the amount of compensation offered of $4,215,000 is acceptable, the Council should sign and return the attached acceptance of offer of compensation form. It said that if the offer is not acceptable, the Council may lodge an objection with this Court. It also said that:
If you lodge an objection with the Land and Environment Court, you will be paid 90% of $4,215,000 within 28 days after notice of institution of proceedings is given to [TCA] and the matter of compensation will be determined by the Land and Environment Court.
The Valuer-General's enclosed Determination of Compensation was a one page document purporting to be under the JT Act . It stated that the Valuer-General had determined compensation for Lot 2 and the Roads at $4,215,000, comprising market value under s 55(a) of the JT Act at $4,205,000 and disturbance under s 55(d) of the JT Act at $10,000.
This was wrong. In fact the Valuer-General had not determined any compensation for the Roads under the JT Act , and in particular had not determined compensation for the Roads by reference to market value or disturbance.
This is clear from the Valuer-General's earlier report of 28 June 2004 (on which his determination of compensation was based), which was sent by the Department of Commerce to the Council on 10 August 2004. The report discloses that the Valuer-General determined compensation for Lot 2 with an area of 986. 9 m 2 at $4,210,000 under the JT Act , which represented market value but for $10,000 which represented disturbance loss. The Valuer-General determined compensation for the Roads with a much larger area of 4,884 m 2 under s 206 of the Roads Act 1993 at a nominal amount of $5,000. The explanation for the enormous difference between the two amounts is this. Compensation under the JT Act for Lot 2 had to, and did, include market value: ss 55, 56 JT Act . In contrast, under the Roads Act , on the assumption that TCA was "the Crown", the amount of compensation for the roads did not include market value and was limited to any money that the Council had paid for the acquisition of the land, the money that the Council had spent on the construction of the road, and any money that the Council had spent in erecting or constructing, in, on or over the road, any conduits, poles or structures for certain uses: ss 204, 206 Roads Act . In this report the Valuer-General erroneously assumed that TCA was the Crown at the time of publication of the acquisition notice in the Gazette . The Valuer-General said that the Roads had been constructed many years ago, it was not possible to obtain any information with regard to the amount of money spent on construction, and therefore a nominal sum of $5,000 had been adopted.
The Valuer-General was mistaken in assuming that TCA was "the Crown". In truth, TCA was not the Crown at that time and therefore the Roads Act was irrelevant. TCA is a statutory State owned corporation established under Pt 3A of the State Owned Corporations Act 1989. Section 20F (a) of that Act provided:
20F Status of statutory SOCs
A statutory SOC or any of its subsidiaries:
(a) is not and does not represent the State except by express agreement with the voting shareholders of the SOC...
unless this or any other Act otherwise expressly provides.
In addition, s 13A of the Interpretation Act 1987 provided:
13A NSW Government agencies and statutory bodies representing the Crown
(1) If an Act provides that a body is:
(a) a NSW Government agency, or
(b) a statutory body representing the Crown,
the body has the status, privileges and immunities of the Crown.
(2) If an Act provides that a body:
(a) is not or does not represent the Crown, or
(b) is not a NSW Government agency or a statutory body representing the Crown,
the body does not have the status, privileges and immunities of the Crown.
(3) This section extends (without limiting its operation):
(a) to a provision that is expressed to be made for the purposes of any Act or more generally, and
(b) to privileges and immunities conferred by law expressly or as a matter of construction.
(4) In any Act or instrument:
(a) a reference to a NSW Government agency includes a reference to a body that is declared to be a statutory body representing the Crown, or
(b) a reference to a statutory body representing the Crown includes a reference to a body that is declared to be a NSW Government agency.
(5) In this section, the Crown includes the State and the Government of the State.
It might be thought that TCA believing it was the Crown was like a commoner believing he was the king. However, it is common ground that at all material times until after the Deed was executed, both parties laboured under the common mistake that TCA was the Crown and, consequently, that the Council was only entitled to compensation determined under the Roads Act and not under the JT Act .
On 5 August 2004 TCA sent a facsimile to the Council noting that the determination of compensation for the Roads was based on compensation payable under the Roads Act .
On 20 September 2004 the Council obtained legal advice. The firm of solicitors, like the Valuer-General, erroneously assumed that TCA was the Crown, and therefore advised that the Roads Act, not the JT Act, applied to the assessment of compensation for the Roads. They also advised that this Court appeared to have no power to hear claims under s 206, citing Ashfield Municipal Council v Roads and Traffic Authority of NSW [2000] NSWLEC 117 at [71].
On 19 October 2004, the Council commenced Class 3 proceedings in this Court, Parramatta City Council v Transport Infrastructure Development Corporation (No 31283 of 2004 (2004 Proceedings). The 2004 proceedings purported to be an objection to an amount offered for Lot 2. There is a dispute as to whether they were also an objection to an amount offered for the Roads.
At the time, the Court's rules required a respondent to file and serve points of assessment of compensation which included the value of the land taken, the basis of the valuation by reference to s 55 of the JT Act , and comparable sales. On 14 December 2004 the Council filed points of assessment of compensation in the 2004 proceedings, which detailed the gazetted notice, stated the assessment of compensation by reference to Lot 2 only and identified comparable sales. On 9 February 2005 the Council filed points of claim, as required by the Court's rules, which were limited to Lot 2. TCA responded accordingly in its points of defence filed in April 2005. Amended points of claim and amended points of defence filed in 2006 were likewise confined to Lot 2. It is convenient to describe these documents as "pleadings" although technically they are not. They are relevant to the dispute as to whether the 2004 Proceedings included an objection to an amount offered for the Roads.
The Council also commenced Class 3 proceedings in the Court in 2004 objecting to the compensation offered under the JT Act for the compulsory acquisition of its Darcy Street Leasehold ( Darcy Street Proceedings ).
On 21 October 2004 the Council wrote to TCA stating:
SRA - PARRAMATTA TO CHATSWOOD RAIL LINK COMPENSATION NOTICE FOR LOT 2 DP 857877 AND LAND AT ARGYLE STREET AND WENTWORTH STREET PARRAMATTA (GOVERNMENT GAZETTE NO. 87 ON 21 MAY 2004)
As you are aware, the Council has lodged an objection with the Land and Environment Court on the above offer of compensation.
In accordance with Section 68 of the Land Acquisition (Just Terms Compensation) Act 1991, we write to request advance payment of $3,793,500.00 being 90% of the amount of compensation offered in the notice.
TCA replied by letter dated 16 November 2004 indicating that the requested payment would be made, subject to formal approval from its Board. On 22 December 2004 TCA paid the Council that 90 per cent advance payment.
Meanwhile, on 7 December 2004, the Council obtained advice from a second firm of solicitors who confirmed the first firm of solicitors' erroneous advice that the Roads Ac t , not the JT Act , governed the assessment of compensation for the Roads. They also agreed that this Court had no power to hear claims under 206 of the Roads Act .
On 22 December 2004 the first firm of solicitors wrote a letter to the Council confirming that the Roads Act and not the JT Act governed the assessment of compensation for the Roads.
In 2006 the parties negotiated to settle their differences as to the amounts of compensation payable for TCA's acquisitions of Lot 2 and the Darcy Street Leasehold, which were the subject of pending proceedings in this Court. As part of the settlement process, on 19 May 2006 the parties jointly instructed Mr Ian Blackell of BEM Property Consultants to provide a report assessing compensation under the JT Act for Lot 2, the Darcy Street Leasehold, and freehold land owned by the Council in Darcy Street ( Darcy Street Freehold ) where the acquisition process had not yet commenced. Mr Blackell's report dated 23 June 2006, read with an addendum dated 1 September 2006, assessed compensation for those three lands, which were all much smaller than the Roads, as follows:
Lot 2 966.9m 2 $ 3,920,000
Darcy Street Leasehold 482.5 m 2 $ 600,000
Darcy Street Freehold 535.0 m 2 $ 2,165,650
On 15 November 2006, TCA and the Council executed the Deed. As noted earlier, TCA contends that the Deed is a bar to the JT Act Proceedings.
Consequential upon the Deed, the Council discontinued the 2004 Proceedings.
The first inkling the Council had that it might be entitled to compensation for the Roads on the basis of the JT Act rather than the Roads Act was in early to mid 2008, when it was informed by a valuation consultant in an unrelated matter that TCA had paid another council compensation for the acquisition of a public road in accordance with the JT Act .
In March 2009 the Council wrote to TCA. After recounting the history of the Roads compensation being calculated in accordance with the Roads Act , the letter stated that the 2004 Proceedings were an objection to the amount of compensation offered for the acquisition of Lot 2 and that those proceedings were settled by agreement in December 2006. It stated that no objection was made in respect of the Roads acquisition because at the time both TCA and the Council were labouring under the misapprehension that the compensation relating thereto should be calculated by reference to the Roads Act rather than the JT Act . The letter stated that the Council had now become aware that in similar dealings with local councils, TCA had accepted that compensation should be calculated in accordance with the JT Act . The letter requested that TCA obtain a new determination of valuation from the Valuer-General in accordance with the JT Act and expressed the hope that the issue could be resolved without the need to involve the courts.
There were negotiations between the parties until December 2009 without resolution being reached.
On 18 March 2010, the Council filed the 2010 JT Act Proceedings in this Court.
On 25 August 2010 TCA commenced the Deed Proceedings in the Supreme Court of New South Wales, which were subsequently transferred to this Court: see [5] above.
A preliminary jurisdictional point
At the hearing, I raised the question whether the Court has jurisdiction over the 2010 JT Act Proceedings. These proceedings purport to be an objection to the amount of compensation offered for the Roads, as though it were an offer of compensation under the JT Act for the purposes of s 66. But it is not. The compensation offered was determined under to the Roads Act .
The parties agree that it is open to me to address this jurisdictional question. As the Land and Environment Court, albeit a superior court, has limited statutory jurisdiction, the Court must satisfy itself that it has jurisdiction and parties cannot confer jurisdiction by consent.
It has been held that this Court has no jurisdiction to determine compensation payable under s 206 of the Roads Act: Ashfield Municipal Council v Roads and Traffic Authority of NSW [2000] NSWLEC 117 at [71] (Sheahan J), not disturbed on appeal in Ashfield Municipal Council v Roads and Traffic Authority of NSW [2001] NSWCA 370, 117 LGERA 203
TCA submits that the Ashfield decision was erroneous and that this Court does have jurisdiction in such a matter. The submission is based on s 204(2) of the Roads Act , which provides that the provisions of Division 4 (ss 204 - 206) of Part 12 "apply in substitution for the provisions of [the JT Act ] with respect to compensation". Sections 205 and 206 each provide (in relation to, respectively, compensation where Council has to construct a new road and where it does not have to construct a new road) that "the amount of the compensation to which a council is entitled under the section is the sum of" and then lists a few items of costs or moneys. TCA's argument is that the words at the end of s 204(2) "with respect to compensation" (a) merely substitute the costs and moneys listed in ss 205 and 206 for the heads of compensation in s 55 of the JT Act (including market value and disturbance); and (b) do not affect the remaining machinery of the JT Act including the right to object to the Court.
TCA's argument has an initial attraction in principle, in that it may be thought unsatisfactory that the only solution for resolving compensation disputes under the provisions of ss 205 and 206 is either arbitration under s 226, if agreed, or the political solution in s 261 of agreement between the Ministers responsible or, failing agreement, the Premier: see [17] above. On the other hand, this seems more acceptable when it is appreciated that the dispute is between two State government entities.
Be that as it may, I am unable to accept the suggested construction. The words in s 204(2) of the Roads Act substituting the provisions of Division 4 Pt 12 for the provisions of the JT Act "with respect to compensation" embrace, in my view, the whole of Part 3 (ss 37-72), entitled "Compensation for acquisition of land", of the JT Act . Part 3 of the JT Act includes the provisions for a compensation notice and objection to this Court. Accordingly, I agree with this Court's decision in Ashfield that it has no jurisdiction over a s 206 Roads Act matter.
Section 42 of the JT Act relevantly provides:
42 Notice of compensation entitlement and offer of compensation
(1) An authority of the State which has compulsorily acquired land under this Act must, within 30 days after the publication of the acquisition notice, give the former owners of the land written notice of the compulsory acquisition, their entitlement to compensation and the amount of compensation offered (as determined by the Valuer-General).
(2) The compensation notice must be given to all former owners of the land who, immediately before the acquisition:
(a) had a registered interest in the land, or
(b) were in lawful occupation of the land (but only if the authority of the State considers they are entitled to compensation), or
(c) had, to the actual knowledge of the authority of the State, an interest in the land which entitles them to compensation.
"Compensation notice" is defined in s 4 as follows:
compensation notice means a notice under section 42 which notifies the former owners of land of a compulsory acquisition, their entitlement to compensation and the amount of compensation offered.
By s 47 of the JT Act , the Valuer-General must determine "the amount of compensation to be offered to a person under" Part 3 of the JT Act . In the present case, the Valuer-General did not do this for the Roads. Rather, by mistake, the Valuer-General, without any statutory authority to do so, determined the amount of compensation to be offered for the Roads not under Part 3 of the JT Act but under the Roads Act . As I have said, that was because the Valuer-General erroneously assumed that TCA was the Crown.
The difficulty with the purported compensation notice is twofold. First, in relation to the Roads, the compensation notice wrongly indicated that the Valuer-General had determined compensation for the Roads under the JT Act and that it included market value and disturbance under the JT Act . In truth, the Valuer-General had determined compensation for the Roads under the Roads Act and had not determined market value and disturbance for the Roads. Secondly, the compensation notice contained only one offer, which was in an amount that was the aggregate of the amount of the compensation erroneously determined by the Valuer-General for Lot 2 under the JT Act and the amount of compensation determined by the Valuer-General for the Roads under the Roads Act . As there were two separate parcels of land, there should have been a separate offer for each under the JT Act , either of which could then have been accepted or rejected. It is difficult to see how the Council could have disaggregated the single offer into two legally effective offers in order to accept one but not the other.
In these circumstances, in my opinion, there was no valid offer of compensation for the Roads determined under and as required by the JT Act . Therefore, there has been no valid offer of compensation for the Roads to which the Council can object in accordance with the JT Act in order to enliven the jurisdiction of the Court.
Consequently, in my opinion, the 2010 JT Act Proceedings are outside the Court's jurisdiction.
If the discontinued 2004 Proceedings purported to include an objection to the Roads (an issue which I address later), to that extent they too were outside the Court's jurisdiction.
It follows that I should dismiss the 2010 JT Act Proceedings, and with it the Council's notice of motion.
If TCA does not voluntarily attend to it, the Council's remedy may be to seek orders in the nature of mandamus. Such an order could require TCA to take all steps necessary to issue a compensation notice in accordance with the requirements of the JT Act and require the Valuer-General to determine compensation under the JT Act .
The 90 day period for lodging an objection will not begin to run until a valid compensation notice is issued containing an offer which is the Valuer-General's determination of the amount of compensation to be offered for the Roads under Part 3 of the JT Act .
For the reasons explained later, when I consider the Deed Proceedings, the Deed would not be a bar to the issue of a new compensation notice nor to any objection to the amount offered in the compensation notice.
In case I am in error as to the jurisdictional point, I will proceed to address the Council's s 66(3) motion on the assumption that the Court has jurisdiction in the 2010 JT Act proceedings. I will then consider whether the Deed bars the 2010 JT Act Proceedings.
THE S 66(3) MOTION IN THE JT ACT PROCEEDINGS
The Council's 2010 JT Act Proceedings purport to be an objection to TCA's 2004 statutory offer of compensation for the Roads.
The Council's notice of motion in the 2010 JT Act Proceedings, with which I am dealing, prays that "leave be granted" to the Council under s 66(3) of the JT Act "to proceed with its claim for compensation and to have that claim heard and disposed of by the Court".
Section 66 relevantly provides:
66 Objection against amount of compensation offered
(1) A person who has claimed compensation under this Part may, within 90 days after receiving a compensation notice, lodge with the Land and Environment Court an objection to the amount of compensation offered by the authority of the State.
(2) If any such objection is duly lodged, the Land and Environment Court is to hear and dispose of the person's claim for compensation.
(3) A person who does not lodge an objection within the 90-day period and who is taken to have accepted the offer of compensation under section 45 may nevertheless lodge an objection under this section, but the Land and Environment Court is not to hear and dispose of the person's claim for compensation unless satisfied that there is good cause for the person's failure to lodge the objection within that period.
Section 45 relevantly provides:
45 Deemed acceptance of offer of compensation
(1) If a person entitled to compensation under this Part does not, within 90 days after receiving a compensation notice:
(a) accept the amount of compensation offered by the authority of the State, or
(b) lodge with the Land and Environment Court an objection to the amount of compensation offered,
the offer of compensation is taken to have been accepted.
(2) Such an acceptance is subject to any decision of the Land and Environment Court on an objection lodged after the 90-day period.
...
The notice of motion does not quite hit the s 66(3) target because s 66(3) does not require "leave". However, I will deal with the substance of the motion and treat it as seeking what s 66(3) requires, namely, a decision by the Court that it is satisfied that there is "good cause" for the Council's failure to lodge an objection within the prescribed period.
Before coming to the good cause question, in order to enliven s 66(3) the Council must establish that it did not lodge an objection within 90 days after receiving the 2004 compensation notice. That is an objective jurisdictional fact for the Court to determine because it identifies a criterion the satisfaction of which enlivens the exercise of the Court's power to hear and determine the proceedings, provided the Court is satisfied that there is good cause for the failure to lodge the objection within that period: Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43, 236 CLR 120 at [43].
The premise of the s 66(3) application is that the Council commenced the 2004 JT Act Proceedings more than 90 days after receiving the compensation notice. TCA seeks to outflank that premise by submitting that the 2004 Proceedings contained an objection to the amount of compensation offered for the Roads and that those proceedings were commenced within 90 days. By this submission s 66(3) is not enlivened.
The Council disputes that the 2004 Proceedings included an objection to the amount offered for the Roads (or an amount offered determined under the JT Act ), as distinct from Lot 2; and in any event says that they were commenced outside the 90 day period. Thus, there are two questions for the Court to determine. First, did the Council's Class 3 Application contain an objection to the compensation offered for the Roads? This question requires the Court to consider how the term 'objection' in s 66 should be construed and whether the application lodged by the Council satisfies that construction. Secondly, if the Application did constitute such an objection, was the objection made within 90 days of receiving the compensation notice? This is a question of fact. If either question is answered in the negative then s 66(3) will be enlivened. In my opinion, s 66(3) is enlivened for the following reasons.
Whether the proceedings were commenced within 90 days of receiving the compensation notice
In my opinion, the 2004 Proceedings were not commenced within the 90 day period.
The compensation notice was enclosed with a letter to the Council dated 14 July 2004. The letter does not bear a receipt date. The Council purported to lodge an objection to, at least, the Lot 2 offer when it filed the 2004 Proceedings on 19 October 2004, more than 90 days after the date of the letter. But the question under s 66(3) is whether it was lodged more than 90 days after the compensation notice was "received" by the Council: s 66(1).
The Deed recited that on 14 July 2004 TCA gave the Council the compensation notice in respect of "the Argyle Street Land", which was defined to mean Lot 2. Since that compensation notice in fact also related to the Roads, there is an estoppel by deed that the Council received the compensation notice on 14 July 2004. On that basis, the 2004 objection (assuming it to be part of the 2004 Proceedings) was not lodged within the 90 day period and s 66(3) is enlivened.
If I am in error in relation to estoppel by deed, I would in any event conclude on the evidence that the 2004 Proceedings were not commenced within the 90 day period. Ninety days back from the date of lodging of the 2004 Proceedings was 21 July 2004. Although the evidence is sparse, it is a reasonable inference that a letter to the Council dated 14 July 2004 would have been received by the Council less than a week later, ie before 21 July 2004. Given that the letter was sent seven years ago, I do not accede to TCA's suggestion that I draw an adverse inference against the Council arising from the fact that it called no evidence as to when the letter was received. If such an inference had to be drawn, it would be offset by a similar inference against the Council for not calling any evidence as to the date of posting the letter or other method of delivery.
Whether the Council's Application is an objection to the compensation offered for the Roads
If the 2004 proceedings were commenced within the 90 day period (contrary to my opinion) then the Council contends that, in any event, the 2004 Proceedings are irrelevant for the purposes of s 66(3) because they did not include an objection to the amount offered for the Roads.
Having regard to the requirements of the Court's rules, the prescribed form of Application at that time and the contents of the Application, I am not satisfied that the Application contained an objection to the compensation offered for the Roads.
The Application must be construed objectively to determine what exactly it objects to.
The form of Application prescribed under the Court's rules at that time contained (in addition to the name, address and telephone of the applicant), four printed headings under which the Council inserted words as follows:
(a) Under the heading "Act of Parliament or other instrument under which proceedings are brought", the Council referred to the JT Act and the Environmental Planning and Assessment Act 1979 (the latter was in fact irrelevant);
(b) Under the heading "Address of the subject land", the Council referred to the Roads and Lot 2;
(c) Under the heading "What are you appealing against or objecting to", the Council wrote "The Determination of Compensation by the Valuer General in respect of the acquisition by TIDC by compulsory process under the provisions of [the JT Act ] of the subject land by Notice of Acquisition published in" the Gazette on 21 May 2004;
(d) Under the heading "Annex copy of the application to, and letter from, council or other body stating its decision, or state why copies cannot be annexed", the Council listed and annexed copies of the letter of 14 July 2004 from the Department of Commerce (and the enclosed compensation notice), the determination of compensation of the Valuer-General, the Gazette notice and a drawing which showed Lot 2 and the Roads.
On its face, there are several elements of the Application which suggest that the Application did constitute an objection to the Roads. First, the Application identified Lot 2 and the Roads as the "subject land" of the proceedings. Secondly, under the heading "What are you appealing against or objecting to", the Council noted the Determination of Compensation by the Valuer General in respect of the land subject to the compulsory acquisition and as identified in the Gazette, being Lot 2 and the Roads. These statements support TCA's contention that the Application did contain an objection to the Roads. However, on closer inspection of the Application and its context a tension emerges. This tension suggests that the Roads did not truly form part of the objection.
Due to the defects in the compensation notice (see [58]), TCA only provided the Council with one offer of compensation, which included both Lot 2 and the Roads. The Roads and Lot 2 were two separate parcels, compensated under two separate legislative regimes. Accordingly, they should have been the subject of two separate offers. They were not. Consequently, it is hard to see how the Council could have objected to that offer only in part. The Court Rules prescribed the headings which the Application was to answer, and those headings were answerable by reference to the Gazette and the Determination of Compensation. In this context, the Council had little choice but to include reference to the Roads under the headings "address of subject land" and "what you are appealing against or objecting to".
The conclusion that the Roads was not the subject of the dispute is consistent with the subsequent points of claim and defence which only referred to Lot 2, and with the entire course of the later settlement negotiations, the later valuation which the parties jointly obtained and the recitals in cl 1 of the Deed which made no reference at all to the Roads but referred only to Lot 2 and the Darcy Street Leasehold. The function of points of claim was explained in Jango v Northern Territory [2007] FCR 531, 240 ALR 432 [75] - [79] (dealing with a similar process with native title applications). Points of claim, once filed, not the originating application, define the nature and basis of the claims and limit the range of matters that may be put to the court.
The conclusion that the Application did not constitute an objection to the compensation offered for the Roads is strengthened when considering the Act upon which the 2004 proceedings were based. The Application listed the JT Act and the Environmental Planning and Assessment Act 1979 as the "Act of Parliament or other instrument under which proceedings are brought". Reference to the Roads Act , under which compensation for the Roads had been determined (as the parties knew from the Valuer-General's report), is noticeably absent from the Application. The only relevant Act mentioned was the JT Act . No objection could be made to this Court under the JT Act against an offer of compensation determined under s 206 of the Roads Act . Such an objection was not competent under the Roads Act . If the Application was an objection to the determination of the amount of compensation offered by TCA for the Roads, it should have identified the Roads Act as the "Act...under which the proceedings are brought". It did not.
On the face of the Application there is some indication that the Roads may have formed part of the objection. However, in light of the context of the notice of compensation and the fact that the objection was lodged under the JT Act only, I conclude that it did not incorporate an objection to the offer of compensation for the Roads.
I have taken into account the letter of 21 October 2004 from the Council to TCA requesting an advance payment. That letter only did what TCA's compensation notice invited it to do: see [ 25 ] above. In any event, I do not see how the letter can affect an objective analysis of the Application.
Having found that the Application was not lodged within 90 days of receipt and/or did not constitute an "objection", the objective jurisdictional fact in s 66(3) has been satisfied.
Good Cause
I now turn to the good cause requirement of s 66(3). Three observations may be made about its wording. First, "good cause" is not a high threshold. Secondly, the good cause requirement is directed only to the first 90 days of the delay period. Any delay thereafter is irrelevant. Thirdly, the Court has no residual discretion not to hear and dispose of the claim.
I am satisfied that there was good cause for failure to lodge the objection within the 90 day period having regard to the following circumstances:
(a) the Valuer-General's determination wrongly excluded the Roads from compensation under the JT Act because of an erroneous assumption that TCA was the Crown;
(b) TCA, who should have known it was not the Crown, was silent about its true status and the Valuer-General's error;
(c) within the 90 day period the Council obtained legal advice which, on the same erroneous assumption, confirmed that the Roads were excluded from compensation under the JT Act and, further, that the Court could not deal with the matter; and
(d) the Council, and TCA, laboured under that error not only during the 90 day period but for years thereafter.
Even if s 66(3) requires the Court to be satisfied that there is good cause for delay beyond the first 90 days (contrary to my construction), I think that there was good cause. In addition to the first three circumstances referred to above and to elaborate on the fourth, the Council had no inkling of the true position until early to mid 2008 and endeavoured from March to December 2009 to negotiate a resolution with TCA without involving the Court. The hiatus from at least mid 2008 to March 2009 does not appreciably diminish the weight of these considerations.
Finally, the Council makes the disarming submission, on the assumption (contrary to its primary contention) that the 2004 Proceedings were commenced within the 90 day period and included an objection to a Roads compensation offer. On that assumption, the submission is that as the 2004 Proceedings were discontinued, the council was entitled to resurrect them in the 2010 Proceedings insofar as they relate to a Roads offer, s 66(1) then applies, and s 66(3) is irrelevant. If it were necessary to approach the matter on that assumption, the submission seems to have substance.
The deed proceedings
TCA relies on the general words in cl 5. 1 of the Deed, and to a lesser extent, in cl 3.1(b), read with cl 9, as barring the JT Act Proceedings. Clause 5 provides:
5.1 Release by the Council
The Council releases and discharges TIDC from all actions, suits, claims, demands, causes of action, costs and expenses (including any existing unsatisfied costs orders), legal, equitable, under statute and otherwise, and other liabilities of any nature (whether or not the parties were or could have been aware of them) which the Council:
(a) now has;
(b) at any time had;
(c) may have; or
(d) but for this Deed, could or might have had, against TIDC in any way related to the Proceedings or the circumstances recited in this Deed or allegations or circumstances arising out of or in any way connected or related to the Proceedings the circumstances recited in this Deed, or anything in any way related to them except for the purposes of enforcing this Deed.
5.2 Inclusions
For the avoidance of doubt, the general release set out in clause 5.1 applies, without limitation in respect of:
(a) the Acquisitions;
(b) any facts, matters or circumstances in any way related to the Acquisitions;
(c) the acquisition and/or extinguishment of the Interests;
(d) any losses, damages, costs, expenses, claims, demands, interest or other liabilities that have been or may be occasioned by reason of the Acquisitions;
(e) without limiting clause 5.2(d) above, any legal or other experts' fees incurred by the Council and/or TIDC in connection with or related to the Acquisitions; and
(f) the negotiations which have resulted in the settlement of the Proceedings and the Council's claims.
Clause 3 provides:
3. Settlement
3.1 Acknowledgment
The Council acknowledges that the payment of the Agreed Sum pursuant to clause 2.1 of this Deed, will be in full and final satisfaction of the Council's claim for compensation in respect of, inter alia:
(a) the Acquisitions;
(b) any facts, matters or circumstances in any way related to the Acquisitions;
(c) the acquisition and/or extinguishment of the Interests;
(d) any losses, damages, costs, expenses, claims, demands, interest or other liabilities which have been or may be occasioned by reason of the Acquisitions; and
(e) without limiting clause 3.1(d) above, any legal or experts' fees incurred by the Council in connection with or related to the Acquisitions.
3.2 Disposal of the Proceedings
(a) The Council must do immediately all things necessary to dispose of the Argyle Street Proceedings and the Darcy Street proceedings, including, without limitation, attending to the filing of Notices of Discontinuance.
(b) TIDC must do immediately all things necessary to dispose of the Court of Appeal Proceedings, including, without limitation, attending to the filing of a Notice of Discontinuance.
Clause 9 provides:
9. Bar to further proceedings
This Deed may be pleaded as a full and complete defence by either party to any action, suit, or proceedings commenced, continued or taken by the other party or on its behalf in relation to any of the matters referred to in this Deed.
The recitals in the Deed are as follows:
Background
A. TIDC served on the Council a Proposed Acquisition Notice under section 11 of the Acquisition Act in respect of TIDC's proposal to acquire the Argyle Street Land for the purposes of the Parramatta Transport Interchange.
B. TIDC served on the Council a Proposed Acquisition Notice under section 11 of the Acquisition Act in respect of TIDC's proposal to acquire the Darcy Street Land for the purposes of the Parramatta Transport Interchange.
C. On 21 May 2004 TIDC effected the Acquisitions by the publication of the Acquisition Notices in accordance with the provisions of the Acquisition Act.
D. On 2 July 2004 TIDC gave to the Council the Compensation Notice in respect of the Darcy Street Land.
E. On 14 July 2004 TIDC gave to the Council the Compensation Notice in respect of the Argyle Street Land.
F. The Council commenced the Argyle Street proceedings and the Darcy Street Proceedings.
G. The Advance Payments have been procured and received by the Council.
H. The Council and TIDC jointly engaged Ian Blackall of BEM Property Valuers and Consultants and agreed that his valuation of the Interests would be the amount of compensation payable for the Acquisitions.
I. Mr Blackall's valuation is in a report dated 23 June 2006, valuation number 06-1397, and the amounts specified in that report in respect of each of the Acquisitions are collectively expressed in this Deed as the Agreed Sum.
J. The parties have agreed to settle the Proceedings and the Council's claim in relation to the extinguishment/acquisition of the Interests and other matters related to the Acquisition on the terms set out in this Deed.
Expressions used in the above provisions and recitals are defined in cl 1.1 of the Deed. None were referrable to the Roads with the argued exception of "Argyle Street Proceedings". The definitions included the following:
1.1 Definitions
In this Deed:
" Acquisitions " means the acquisitions of the Interests by TIDC by compulsory process pursuant to the terms of the Acquisition Act.
" Acquisition Act " means the Land Acquisition (Just Terms Compensation) Act 1991.
" Acquisition Notices " means the notices published in the New South Wales Government Gazette No 87 dated 21 May 2004 by which the Acquisitions were effected.
" Advance Payments " means the amounts of $3,789,000 for the Argyle Street land and $32,490 for the Darcy Street Land, being a total of $3,821,490 inclusive of GST.
" Agreed Sum " means the total of the Argyle Street proceedings Agreed Sum and the Darcy Street Proceedings Agreed Sum.
" Argyle Street Land " means the land comprised in Lot 2 in Deposited Plan 857877.
" Argyle Street Proceedings " means proceedings No 31234 of 2004 in the Class 3 jurisdiction of the Land and Environment Court of New South Wales.
" Argyle Street Proceedings Agreed Sum " means the amount of $3,920,00 (exclusive of GST).
" Compensation Notices " means the notices given by TIDC to the Council dated 2 July 2004 (in respect of the Darcy Street Land) and 14 July 2004 (in respect of the Argyle Street Land) and advising the Council of the amounts of compensation determined by the Valuer-General as payable to the Council in respect of the acquisition of the Interests.
" Court of Appeal Proceedings " means proceedings No 40045 of 2006 in the Court of Appeal of New South Wales.
" Darcy Street Proceedings " means proceedings No 31283 of 2004 in the Class 3 jurisdiction of the Land and Environment Court of New South Wales.
"Darcy Street Proceedings Agreed Sum " means the amount of $291,000 (exclusive of GST).
...
"Interests" means:
(a) the beneficial freehold interest of the Council in the Argyle Street Land; and
(b) the beneficial leasehold interest of the Council in the Darcy Street Land.
...
" Proceedings " means collectively:
(a) the Argyle Street Proceedings;
(b) the Darcy Street Proceedings;
(c) the Court of Appeal Proceedings; and
(d) proceedings No 40835 of 2005 commenced by TIDC against the Council in the Class 4 jurisdiction of the Land and Environment Court of New South Wales.
It is common ground that the Court numbers for the "Argyle Street Proceedings" and the "Darcy Street Proceedings" were mistakenly reversed in those definitions.
The question of construction is whether the parties intended the extravagant result that the Council gave up a claim for compensation for the Roads under the JT Act which neither it, nor TCA, knew that it had.
General words in a release do not extend to a liability of the releasee of which the releasor was unaware: Grant v John Grant and Sons Pty Ltd [1954] HCA 23 at [14]-[15], 91 CLR 112 at 129-130. Dixon CJ, Fullagar and Kitto JJ said:
From the authorities which have already been cited it will be seen that equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor.
The facts stated in the third replication if true would show that the plaintiff company did not know of the defendant's liability it now seeks to enforce, did not intend to release it as part of the transaction and did not know of any intention on the part of the defendant that it should be released.
In determining whether the terms of a general release should be treated as qualified, the "true purpose of the transaction" as determined in the manner identified in Grant is critical: Marinchek v Cabport Pty Ltd [2010] NSWCA 334 at [48].
Consistently with this principle, cl 3.1(b) of the Deed does not extend, in my opinion, to TCA's liability to pay compensation for the Roads under the JT Act because the Council was unaware of that liability when the Deed was executed. Neither was TCA, according to the common ground between the parties.
Let it be assumed, as TCA submits, that the Grant principle is inapplicable to cl 5.1 because it says that the release is of all liabilities "whether or not the parties were or could have been aware of them".
The question remains whether cl 5.1, on its proper construction, released TCA's liability to the Council to pay compensation for the Roads under the JT Act .
The construction of a written contract is to be undertaken by an examination of its text in the context of the surrounding circumstances known to the parties, or the surrounding circumstances that can be reasonably assumed were known to the parties at the time of execution. It is not necessary to find an ambiguity in the words before the Court can look at surrounding circumstances as an aid to construction. The use of recitals to aid in the construction of the operative provisions of a deed is not restricted to circumstances in which those provisions are ambiguous. Recitals can be used as an aid to construction of operative provisions, as a means by which the surrounding circumstances and purposes of the transaction can be ascertained: Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407, 264 ALR 15 at [14], [42] - [43], [63], [305], [322].
It is permissible to have recourse to the context, including the history, in which the Deed takes its meaning for the purpose of identifying the subject matter, that is the disputes and claims, to which the Deed was intended to relate. One of many statements is that of Gleeson CJ in International Air Transport Association v Ansett Australian Holidays Ltd [2008] HCA 3, 234 CLR 151 at [8], as follows (omitting citations):
In giving a commercial contract a businesslike interpretation, it is necessary to consider the language used by the parties, the circumstances addressed by the contract, and the objects which it is intended to secure. An appreciation of the commercial purpose of a contract calls for an understanding of the genesis of the transaction, the background, and the market. This is a case in which the Court's general understanding of background and purpose is supplemented by specific information as to the genesis of the transaction. The Agreement has a history; and that history is part of the context in which the contract takes its meaning.
Applied in Marinchek v Cabport Pty Ltd [2010] NSWCA 334.
There is no conceptual limit to what can be regarded as "background", provided it is relevant. The background is not confined to the factual background but can include the state of the law (for example, one can take into account that the parties are unlikely to have intended to agree to something unlawful or legally ineffective) or common assumptions that were quite mistaken : Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 at 269 per Lord Hoffmann. Relevantly, TCA submits, the "Proceedings" were "the Argyle Street Proceedings".
The relevant background to the Deed included the following:
(a) The JT Act guaranteed, and imposed on an acquiring authority a liability to pay, compensation which was not less than market value.
(b) TCA's compensation notice to the Council had made a single offer of compensation for both Lot 2 and the Roads purportedly under the JT Act . The notice told the Council that it could accept that single offer or object to the Court, in which case TCA would pay the Council 90 per cent of the offer upon being notified of the institution of the proceedings.
(c) TCA's compensation notice to the Council and the Valuer-General's enclosed Notice of Determination had wrongly represented that compensation for the Roads, including market value, had been determined under, and constituted an offer under, the JT Act .
(d) In fact, the Valuer-General had determined compensation for the Roads under the Roads Act and not the JT Act . No objection to an offer of compensation determined under the Roads Act lay to this Court.
(a) In contrast, the Valuer-General had determined compensation for Lot 2 under the JT Act . An objection to an offer of compensation determined under the JT Act lay to this Court.
(b) The 2004 Proceedings were expressed in the originating Application to be under the JT Act . They could not legally have included an objection to an offer of compensation for the Roads made under the Roads Act and not under the JT Act .
(c) The 2004 Proceedings were conducted through the points of claim and defence as limited to an objection to an offer of compensation for Lot 2 only.
(d) The subsequent settlement negotiations, valuation and recitals in the Deed included Lot 2 and excluded the Roads.
(a) As the compensation notice invited it to do, the Council lodged an objection at least to Lot 2 in the 2004 Proceedings and requested and obtained payment of 90 per cent of the amount of the single offer of compensation in the compensation notice.
The main hinge of TCA's cl 5.1 case is its reference to "the Proceedings". TCA submits that cl 5.1 released its liability for the Roads under the JT Act because the liability was "related to the Proceedings...or circumstances arising out of or in any way connected or related to the Proceedings".
Clause 2.1 of the Deed shows that the payments to be made by TCA to the Council were linked only to the compulsory acquisition of Lot 2 and Darcy Street:
2.1 Agreed Sum
(a) TIDIC will pay to the Council...the Agreed Sum in connection with the Acquisitions.
(b) The Council acknowledges and agrees that it has received the Advance Payments from TIDIC and that such payments constitute part payment of, and will be off-set against, the payment of the Agreed Sum under cl 2.1(a).
Under the Deed, the amount payable (and subsequently paid) by TCA to the Council was $389,510.00. This is calculated, by reference to cl 2.1 of the Deed and the definitions, by taking the "Agreed Sum" totalling $4,211,000 and deducting the "Advance Payments" of $3,821,490. The "Agreed Sum" and the "Advance Payments", as defined, related only to Lot 2 and the Darcy Street Leasehold. On TCA's construction, the parties intended by the Deed to settle for a consideration of $389,500 not only the two matters specified therein, but (inter alia) the Roads claim. The Roads claim is for a much larger area which had never been determined as required by the JT Act , and which is potentially worth much more.
The specific matters listed in cl 5.2 of the Deed do not make any specific reference to the Roads. But that is of little significance because the chapeau of cl 5.2 employs the familiar drafting language "without limitation", which prevents the listed matters effecting a narrowing of the ambit of cl 5.1.
The Council suggests that the Deed cannot be as wide as TCA contends because (a) if it were, it would have released TCA's liability for its later acquisition in April 2007 of the Council's Darcy Street Freehold; and (b) the parties did not treat the Deed as being that wide because TCA's liability for that acquisition became the subject of a deed of compensation in May 2007 under which more than $2,000,000 was paid. This submission addresses post contractual conduct. Conduct after the date of a contract is inadmissible to interpret the contract. However, such conduct is admissible, and may be entitled to significant weight for the purpose of identifying the subject matter of the contract: County Securities Pty Ltd v Challenger Group Holdings Ltd [2008] NSWCA 193 at [18] - [24]. The post-deed conduct to which the Council refers does not assist me because liability for the Darcy Street Freehold arose after the date of the Deed and on no view can the subject matter of the Deed be construed as including a liability arising after the date of the Deed.
"Proceedings" are defined in cl 1.1 to include the "Argyle Street Proceedings", which is in turn defined as proceedings No 31234 of 2004. These proceedings were treated in the Deed as comprising or including an objection to the compensation offered for Lot 2. TCA's submission is that the "Argyle Street Proceedings" also included an objection to an offer of compensation for the Roads. On that premise, TCA seeks to draw some comfort from cl 3.2(a), which requires the Council to discontinue the Argyle Street Proceedings, thereby discontinuing the Roads objection. Even if this premise is correct (which is in issue), it is not dispositive.
The cl 5.1 words "in any way related to the Proceedings or circumstances arising out of or in any way connected or related to the Proceedings" are wide, but they are capable of releasing TCA of its obligation only insofar as the term "the Proceedings" can be taken to include the Roads. If "the Proceedings", and more particularly the "Argyle Street Proceedings", were not intended in the Deed to include proceedings for the Roads, those words cannot bring such proceedings within the scope of the cl 5.1 release.
The "Argyle Street Proceedings" are defined in cl. 1.1 to mean "proceedings No 31234 of 2004 in the Class 3 jurisdiction of the Land and Environment Court of New South Wales." No further definition is provided. Thus, the Deed and the circumstances surrounding it must be looked at as a whole to determine what, precisely, the parties meant by the term "Proceedings".
I have earlier held, when considering the Council's s 66(3) motion, that the 2004 proceedings, on a textual analysis of the originating Application, did not include an objection to an amount of compensation offered for the Roads: see [79] - [88] above. On this logic, the Roads did not form part of the proceedings.
But, the question of construction in relation to the term "Argyle Street Proceedings" is not what was the nature of the 2004 Proceedings as disclosed merely by a textual analysis of the originating Application. The question is what would the Deed convey by its use of that term, in the context in which it was used, to a reasonable person having all the background knowledge reasonably available to the parties in the situation in which they were at the time of the Deed.
The recitals and definitions suggest that the parties had specifically agreed to settle only the Argyle Street proceedings insofar as they related to Lot 2 and the Darcy Street Leasehold proceedings, and to settle the Council's claim in relation to the acquisition of Lot 2 and the Darcy Street Leasehold - but not the Roads. The defined term "Argyle Street Proceedings Agreed Sum" is the recent Blackell assessment of compensation for Lot 2 only. The "Argyle Street Land" and "Argyle Street Proceedings Agreed Sum" are concerned only with Lot 2. "Interests", "Acquisitions", "Advance Payments" and "Compensation Notices" are concerned only with Lot 2 and the Darcy Street Leasehold.
In striking contrast, there is no mention of the Roads in the recitals or the definitions, even where one would expect them to be mentioned if they were within the contemplation of the parties: for example, in the definition of "Interests" and "Compensation Notices" and in the amount referred to in "Argyle Street Proceedings Agreed Sum".
In my opinion, the Deed would convey to a reasonable person, having all the background knowledge, that its reference to "Argyle Street Proceedings" was not meant to include an objection to an offer of compensation for the Roads.
That conclusion is not affected by the Council's letter of 21 October 2004 (on which TCA places some reliance) stating that the Council had lodged an objection on the "offer of compensation" in the compensation notice and requesting a 90 per cent advance payment: see [37] above. Any objection had to be to the "offer of compensation" in the compensation notice because the compensation notice made only one offer of compensation for both parcels of land in the sum of $4,215,000.00. The letter did no more than TCA's compensation notice invited it to do when that notice said: "If you lodge an objection with the Land and Environment Court you will be paid 90 per cent of $4,215,000 within 28 days after notice of institution of proceedings is given to [TCA]": see [25] above.
Alternatively, TCA submits, perhaps faintly, that an objection to the amount offered for the roads is, in terms of the foot of cl 5.1, a "circumstance" which must be regarded as being "in any way connected or related to...the circumstances recited" in the Deed, because those recitals included publication of the acquisition notice and the compensation notice for Lot 2, which (as it happened) also referred to the Roads. I do not accept the submission. The issue is whether those words are wide enough to include TCA's liability to pay compensation for the Roads under the JT Act . The recitals show every sign of having been carefully drafted in order to refer only to the circumstances of the acquisition and compensation for (relevantly) Lot 2 and to exclude the Roads. The mere fact that TCA elected to use one acquisition notice and one compensation notice when it could have used two, does not mean that TCA's liability to pay compensation for the Roads under the JT Act was "connected or related to" recited circumstances concerning Lot 2 only, within the meaning of cl 5.1.
For these reasons, in my opinion, the Deed does not apply to the Roads. Consequently the Deed does not bar the 2010 JT Act Proceedings. Insofar as the summons also seeks a declaration that the Deed applies to the 2004 Proceedings relating to Lot 2 and the Darcy Street Leasehold Proceedings, that has never been in dispute between the parties and it would be inappropriate make that declaration.
Accordingly, TCA's summons should be dismissed.
ORDERS
The orders I propose are as follows:
1. Proceedings 30186 of 2010 are struck out.
2. Proceedings 40976 of 2010 are dismissed.
3. No order as to the costs of either proceedings.
4. The exhibits may be returned.
If a party proposes any different orders to reflect my decision, it is to submit draft orders to my Associate within three working days, otherwise the orders will be as I have proposed.
Decision last updated: 06 April 2011
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