Quzag v Gunning Shire Council
[2002] NSWSC 160
•14 March 2002
Reported Decision:
(2002) NSW ConvR 56-025
New South Wales
Supreme Court
CITATION: Quzag v Gunning Shire Council [2002] NSWSC 160 CURRENT JURISDICTION: Common Law FILE NUMBER(S): SC 20010/2000 HEARING DATE(S): 8 March 2002 JUDGMENT DATE: 14 March 2002 PARTIES :
Gunning Shire Council
Mustafa Quzag
(Plaintiff)
(Defendant)JUDGMENT OF: Master Harrison
COUNSEL : Mr G Brady
Mr C Hyde
(Plaintiff)
(Defendant)SOLICITORS: Tetlow Jansen & Doyle
Dickson ACT
by their agents
Masons
(Plaintiff)Phillips Fox
(Defendant)CATCHWORDS: Summary judgment - failure to pay rates, sale of (and alleged breaches of statutory duty and negligence) LEGISLATION CITED: Supreme Court Rules - Part 13 r 5
Local Government Act 1993 - ss 713 & 715CASES CITED: Air Services Australia v Zarb (NSWCA unreported, 26 August 1998)
Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62
General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125
Webster & Anor v Lampard (1993) 177 CLR 598
Contribution Fund of Australia v Hunt (1982) 44 ALR 365
Gibson v Parkes District Hospital (1991) 26 NSWLR 9
Sovar v Henry Lane Pty Limited (1967) 116 CLR 397
Stubbs v NRMA Insurance Ltd (1997) 42 NSWLR 550DECISION: (1) The defendant's notice of motion filed 3 July 2001 is dismissed; (2) The defendant is to pay the plaintiff's costs as agreed or assessed.
IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
MASTER HARRISON
20010/2000 - mustafa quzag vTHURSDAY, 14 MARCH 2002
- GUNNING SHIRE COUNCIL
sale of (and alleged breaches of statutory
duty and negligence)
1 MASTER: By notice of motion filed 3 July 2001 the defendant seeks an order that the proceedings be dismissed generally pursuant to Part 13 r 5 of the Supreme Court Rules (SCR). The defendant relied on the affidavit of John Bell sworn 2 July 2001. The plaintiff relied on the affidavit of his solicitor Mark O’Neill sworn on 13 September 2001 and the affidavit of John Brendan O’Reilly affirmed 30 January 2002.
2 It is common ground that the plaintiff was the owner of the land described as Lots 40, 130, 161, 182 and 185 in part apportionment 242 in the parish of Mundoonen in the Shire of Gunning (“the property”). In 1981 the plaintiff purchased the property for $175,000. From January 1990 to July 1998 Gunning Shire Council (“the Council”) levied rates on the property. The plaintiff fell into arrears in payment of those rates and was written to on a number of occasions by the Council seeking payment. On 27 April 1999 the land was sold under the instructions of the defendant pursuant to ss 713 and 715 of the Local Government Act 1993 (LGA), by public auction held at Gunning Council Chambers for the sum of $200,000. As at 1 July 1999 the Valuer General valued the land at $346,200. It is alleged that a fair market value of the land is approximately $750,000. Prior to sale the plaintiff had obtained approval to a development application to subdivide part of the land into 40 lots.
3 The plaintiff claims that the defendant breached its duties and was negligent. I shall return to these allegations later in this judgment.
The law on summary judgment
4 Part 15 r 26 provides:
- “(1) Where a pleading -
- (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading;
- (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings; or
- (c) is otherwise an abuse of the process of the Court,
- the Court may at any stage of the proceedings, on terms, order that the whole or any part of the pleading be struck out.
- (2) The Court may receive evidence on the hearing of an application for an order under subrule (1).”
5 Part 13 r 5 says:
- “(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings-
- (a) no reasonable cause of action is disclosed;
- (b) the proceedings are frivolous or vexatious;
- or
- (c) the proceedings are an abuse of the process of the Court,
- the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”
6 In Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 the High Court held at 57 that:
“Ordinarily a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”
7 According to their Honours, this is because:
“It would be wrong to deny a plaintiff resort to the ordinary processes of a court on the basis of a prediction made at the outset of a proceeding if that prediction is to be made simply on a preponderance of probabilities” (at 58).
8 Similarly, in Air Services Australia v Zarb (NSWSC unreported, 26 August 1998) Rolfe AJA found it useful to remind himself of the highly demanding test imposed on a party seeking summary judgment. His Honour referred to Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62; General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 and Webster & Anor v Lampard (1993) 177 CLR 598. I have reproduced some of the passages quoted in Zarb.
9 In General Steel Barwick CJ, who heard the application alone stated at 130:
- “Although I can agree with Latham CJ in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff’s claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed.”
10 Barwick CJ also said at 129:
- “It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of cause of action - if that be the ground on which the Court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense.”
11 In Webster Mason CJ, Deane and Dawson JJ reinforced the rigorous testing stating, at 602:
- “The power to order summary judgment must be exercised with ‘exceptional caution’ and ‘should never be exercised unless it is clear that there is no real question to be tried.”’
12 According to Rolfe AJA in Zarb at 15-16:
- “The demanding nature of the test is in no way lessened in circumstances where there are the potential for difficult factual and legal issues to arise. Rather, as the decision in Webster made clear, it is heightened: see also Wickstead & Ors v Browne (1992) 30 NSWLR 1 and Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 188 CLR 241.”
13 Master Allen (as he then was) in Contribution Fund of Australia v Hunt (1982) 44 ALR 365 at pp 373-374 said:
- “…It is not by any means rare in the history of the development of the common law that a high appellate court, in enunciating a novel development in the law, albeit one avowedly based on a miscellany of old cases, has chosen to use general words of imprecise limits in meaning to facilitate the arrival, in later cases, of the final form of the development without the need to overrule what earlier had been stated. That being so I am of opinion that a court at first instance should be particularly astute not to risk stifling that development of the law by summarily throwing out of court actions in respect of which there is a reasonable possibility that it will be found, in the development of the law, still embryonic, that a cause of action does lie. The risk of injustice to the plaintiff, which summary termination of his claim would entail, is real. One cannot predict, with firm assurance, what the future holds as the final formulation of the new development.”
14 This passage was quoted with approval by Justice Badgery-Parker in Gibson v Parkes District Hospital (1991) 26 NSWLR 9 at 35.
The pleadings
The claim for breach of statutory duty
15 At paragraph 9 it is pleaded that the defendant is guilty of negligence and breached its statutory obligations in that the defendant by its servants and agents:
“(a) failed to respond to offers and proposals from the plaintiff for the repayment of the rates and charges payable;
(b) failed to consider any and all offers and proposals from the plaintiff for the repayment of the rates and charges payable;
(c) failed to properly or adequately advertise the auction sale of the land;
(d) failed to display on the property proper notice of the proposed auction sale;
(e) failed to obtain a fair market value at the auction sale of the land;
(g) failed to comply with subsection 713(2) of the Local Government Act 1993 by:(f) failed to properly disclose that there was a subdivision of three 40 acre blocks on the land;
- (i) selling the land in circumstances where the total amount of the rates and charges payable did not exceed the valuation of the land, and
- (ii) not selling the land within 6 months of receiving the valuation from the valuer general.
(h) failed to comply with subsection 713(3) of the Local Government Act by failing to certify in writing:
- (i) what rates and charges (including rates and charges) are payable on the land;
- (ii) when each of those rates and charges was made and how it was levied;
- (iii) when each of those rates and charges became payable;
- (iv) what amounts were payable by way of overdue rates and charges on the land, and
- (v) what amounts were payable by way of rates and charges (other than overdue rates and charges) on the land.
(i) failed to comply with subsection 713(4) of the Local Government Act 1993 by:
- (i) not selling parcels of the land separately;
- (ii) not stipulating conditions of sale mitigating loss to the plaintiff;
- (iii) not selling the land for its full value.
(j) failed to comply with subsection 715 of the Local Government Act 1993 by:
- (i) not fixing a convenient time and place for the sale of the land;
- (ii) not giving proper notice of the sale;
- (iii) not considering or accepting offers and proposals from the plaintiff for the payment of all rates and charges payable; and
- (iv) not entering into an arrangement with the plaintiff for payment of all rates and charges payable.
(l) made various statement relating to the status of action taken by the defendant inducing the plaintiff to not take action in response thereby causing loss and damage to the plaintiff.”
(k) failing to consider and approve development consents relating to the land including specific development consents relating to the sub division of the land requested prior to the sale of the land,
16 The Local Government Act 1993 (NSW) sets out a statutory regime for the sale of land where council rates and charges have not been paid. The s 713(3) certificate (aff J Bell, annexure O) refers to unpaid rates from January 1990 to July 1998. Hence the rates and charges had not been paid for a period in excess of five years.
17 The relevant provisions are:
(1) For the purposes of this Division, a rate or charge is overdue if:“713 Sale of land for unpaid rates and charges
(a) …
from the date on which it became payable.(b) in the case of any other land, it has remained unpaid for more than 5 years,
(2) A council may, in accordance with this Division:
- (a) sell any land (including vacant land) on which any rate or charge has remained unpaid for more than 5 years from the date on which it became payable, and
- (b) …
- (3) The council must not sell any such land unless the general manager or the public officer certifies in writing:
(a) what rates and charges (including overdue rates and charges) are payable on the land, and
(b) when each of those rates and charges was made and how it was levied, and
(c) when each of those rates and charges became payable, and
(e) what amounts are payable by way of rates and charges (other than overdue rates and charges) on the land.(d) what amounts are payable by way of overdue rates and charges on the land, and
(b) do such things as it considers appropriate for the purpose of selling the land at its full value.(a) sell them separately or as a single parcel and under whatever conditions of sale it considers proper, and
(1) Before selling land under this Division, the council must:715. Notice of proposal to sell land
(a) fix a convenient time (being not more than 6 months and not less than 3 months from the publication in a newspaper of the advertisement referred to in paragraph (b)) and a convenient place for the sale, and
(b) give notice of the proposed sale by means of an advertisement published in the Gazette and in at least one newspaper, and
(d) take reasonable steps to notify each such person (and the Crown, if the land concerned is owned by the Crown) of the council's intention to sell the land under this Division.(c) take reasonable steps to ascertain the identity of any person who has an interest in the land, and
(2) If, before the time fixed for the sale:
(b) an arrangement satisfactory to the council for payment of all such rates and charges is entered into by the rateable person,(a) all rates and charges payable (including overdue rates and charges) are paid to the council, or
he council must not proceed with the sale.
716 Sale of land by public auction
…”(1) Any sale of land under this Division must be by way of public auction, except as provided by this section.
18 Under s 713(4) (which is arguably applicable as approval for subdivision has been granted) the Council has a statutory duty to do such things as it considers appropriate for the selling of land at its full value.
19 The plaintiff is critical about the manner in which the sale was arranged. In the advertisement for sale there was no mention of the approval of subdivision. Mr O’Reilly had deposed that as an adjoining land owner he had an interest in buying the property “Pop Rifter”. Mr O’Reilly learnt of the sale by word of mouth and was told by a neighbour (Dennis Hillier he thought) that it would be advertised in “The Land”. Mr O’Reilly checked “The Land” on the day in question but could not find the advertisement. His wife also looked and eventually asked him if it was one of the properties listed for sale by Gunning Council in an obscure Real Estate Auctions section. Mr O’Reilly would have expected a large ad in the main properties for sale section but the advertisement only mentioned the title details (eg portion numbers etc) and did not state the size or location of the property, improvements or any other details. He thought this strange. It was never, to his knowledge, advertised in the Canberra Times, which was the logical place to advertise a property so close to Canberra.
20 If the Council did not act in accordance with the statutory scheme referred to above does this give the plaintiff a private right to sue? This was not argued. Whether a breach of the statutory duty gives rise to a private right has been considered in Sovar v Henry Lane Pty Limited (1967) 116 CLR 397 and Stubbs v NRMA Insurance Ltd (1997) 42 NSWLR 550. In Sovar Kitto J at 405 stated:
- “…The intention that such a private right shall exist is not … conjured up by judges to give effect to their own ideas of policy and then ‘imputed’ to the legislature. The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, scope and terms of the statute, including the nature of the evil which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation.”
21 The above quote was cited with approval in Stubbs at 555.
Negligence
22 In relation to the claim in negligence, it is pleaded that the defendant owed a duty to the plaintiff to take reasonable care to avoid the risk of loss to the plaintiff in the recovery of rates and charges payable and in relation to the sale of the land. It is also alleged that the defendant breached the duty of care owed to the plaintiff in the recovery of rates and charges payable and in relation to the sale of the land thereby causing loss to the plaintiff. It is pleaded that these breaches of duty caused loss and damage (para 10 S/C).
23 The defendant’s counsel submitted that Parliament intended to impose a statutory regime by which Councils can sell land for non payment of rates and charges. That is so, but that does not mean that the plaintiff cannot maintain a claim in common law against a Council. For example, if a ratepayer had not paid rates for five years under the statutory regime, the property could be sold for as little as $1,000 and the rate payer had no redress. The statutory regime is not an exclusive one.
25 Council owes a duty of care to ratepayers. It is arguable that the defendant’s owed a duty to act as a prudently and reasonably in selling up a ratepayer’s property. The Council may owe a duty to sell the property at fair market value. Similarly, mortgagee’s have a duty of care not to sell mortgagor’s land for under market value. Although the statement of claim is not the most elegantly pleaded, it is my view that the plaintiff has an arguable case in negligence. This cause of action should also be permitted to go to trial. The notice of motion filed 3 July 2002 is dismissed.
26 Costs are discretionary. Costs should follow the event. The defendant is to pay the plaintiff’s costs as agreed or assessed.
27 The courts orders:
(2) The defendant is to pay the plaintiff’s costs as agreed or assessed.
(1) The defendant’s notice of motion filed 3 July 2001 is dismissed.
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