UTSG Pty Ltd v Sydney Metro (No 6)

[2020] NSWLEC 63

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	UTSG Pty Ltd v Sydney Metro (No 6) [2020] NSWLEC 63
Hearing dates:	8-12 and 15-16 April, 26 September, 31 October, 1 and 14 November, 9-11, 13 and 16-17 December and 18 December 2019 (further written submissions)
Date of orders:	29 May 2020
Decision date:	29 May 2020
Jurisdiction:	Class 3
Before:	Pepper J
Decision:	See orders at [426].
Catchwords:	COMPULSORY ACQUISITION: determination of compensation for the compulsory acquisition of a leasehold interest – corporate applicant not legally represented – applicant changed basis of claim for compensation numerous times during the proceedings – conduct of proceedings characterised by delay and non-compliance with court orders by the applicant – applicant falsified evidence – credit of director representing the corporate applicant – applicant abandoned claim for extinguishment of business due to the acquisition - applicant did not establish claim for wasted relocation costs, including wasted fitout costs – applicant did not establish claim for past loss of income – applicant did not establish claim for future loss of income – claim for legal fees and valuation costs agreed – compensation for legal costs and valuation fees offset against rental arrears owed to acquiring authority – nil compensation determined to be payable by acquiring authority.   COSTS: costs principles in compulsory acquisition cases – determination of costs where no entitlement to compensation – applicant to pay the acquiring authority’s costs of the proceedings. COSTS: whether a non-party costs order should be made against a director of the applicant – legal principles to be applied in the making of non-party costs orders, especially where non-party a director of an unrepresented corporate party – conduct of director in the running of the proceedings justified the making of a non-party costs order – non-party director of corporate applicant jointly and severally liable to pay the costs of the acquiring authority.
Legislation Cited:	Civil Procedure Act 2005, s 98(1) Evidence Act 1995, s 140(2) Land Acquisition (Just Terms Compensation) Act 1991, ss 34(4), 39, 42, 47, 51(3), 54, 55(a), 55(d), 56, 59(1), 66 Uniform Civil Procedure Rules 2005, r 7.1(2)
Cases Cited:	Blazai Pty Ltd v Maclarens (No 2) [2013] NSWSC 31 Brand2Content t/as Franchise Works v Dalby [2019] NSWCA 16 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Brock v Roads and Maritime Services (No 3) [2012] NSWCA 404; (2012) 191 LGERA 267 Brock v Roads and Traffic Authority of New South Wales (No 2) [2012] NSWLEC 114 CCL Secure Pty Ltd v Berry [2019] FCAFC 81 Croghan v Blacktown City Council [2019] NSWCA 248; (2019) 238 LGERA 439 Dillon v Gosford City Council [2011] NSWCA 328; (2011) 184 LGERA 179 FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 G Capital Corporation Pty Ltd v Roads and Maritime Services [2019] NSWCA 234 G Capital Corporation Pty Ltd; Gertos Holdings Pty Ltd; Marsden Developments Ltd v Roads and Maritime Services [2019] NSWLEC 12 Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 May v Christodoulou [2011] NSWCA 75; (2011) 80 NSWLR 462 Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 Naomi Marble and Granite Pty Limited v FAI General Insurance Company Limited (No 2) [1999] 1 QdR 518 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170 Omaya Investments Pty Limited v Dean Street Holdings Pty Limited (No 5) [2020] NSWLEC 9 PM Works Pty Ltd v Management Services Australia Pty Ltd trading as Peak Performance PM [2018] NSWCA 168 Roads and Maritime Services v United Petroleum [2019] NSWCA 41; (2019) 99 NSWLR 279 Smith v New South Wales Bar Association [1992] HCA 36; (1992) 176 CLR 256 State of New South Wales v Hunt [2014] NSWCA 47; (2014) NSWLR 226 UTSG Pty Ltd v Sydney Metro [2018] NSWLEC 128 UTSG Pty Ltd v Sydney Metro (No 2) [2018] NSWLEC 199 UTSG Pty Ltd v Sydney Metro (No 4) [2019] NSWLEC 51 UTSG Pty Ltd v Sydney Metro (No 5) [2019] NSWLEC 107 Yu v Cao [2015] NSWCA 276; (2015) 91 NSWLR 190
Texts Cited:	Sir Walter Scott, Marmion: A Tale of Flodden Field (Ballantyne and Co, Edinburgh, 1808)
Category:	Principal judgment
Parties:	UTSG Pty Ltd (Applicant) Sydney Metro (Respondent)
Representation:	Counsel: Ms S Singh and Dr M Baig (Applicant, director-represented) Mr R Lancaster SC with Mr N Eastman (Respondent)   Solicitors: N/A (Applicant) Ashurst (Respondent)
File Number(s):	2017/249637

Judgment

TABLE OF CONTENTS

Topic	Paragraph No
An Unrepresented Corporate Applicant Seeks Compensation for a Compulsory Acquisition	[1]
Transport for New South Wales Acquires a Leasehold Interest	[15]
Legislative Basis for Compensation Under the Just Terms Act	[60]
The Changing Nature of UTSG’s Compensation Claim	[61]
UTSG’s Repeated Non-Compliance With Court Orders	[68]
A Notice to Produce is Served on UTSG	[83]
The Real Issues for Determination in the Proceedings	[147]
The Evidence of the Parties	[148]
Ms Singh’s Evidence	[155]
The Sham Business Sale Agreement to 5G	[178]
LPAA, TaxSavvy and Associated Persons Are Not Genuine Entities	[189]
Mr Peter Scott Does Not Exist	[212]
The Altered “17 Boxes of Documents” Email	[217]
Inconsistencies in UTSG’s Financial Records	[223]
Ms Singh is Not a Witness of Truth	[227]
The Expert Valuation and Forensic Accounting Evidence Does Not Support UTSG’s Claim for Compensation	[231]
The Forensic Accounting Evidence	[231]
The Business Valuation Evidence	[260]
The Relocation Evidence Relied Upon by UTSG	[287]
With One Exception UTSG’s Claim for Compensation is Rejected	[297]
Claim for Legal and Valuation Fees	[297]
Claim for “Wasted Relocation Costs”	[301]
There Was No Relocation of UTSG to 280 Pitt St	[305]
UTSG Did Not Pay for the Fitout of 40 Park St	[318]
The Wasted Relocation Costs Were Not in Connection With UTSG	[328]
The Wasted Relocation Costs Were Not a Direct and Natural Consequence of the Acquisition..	[329]
There is No Evidence as to the Quantum of the Wasted Relocation Costs	[335]
The Claim for “Future Relocation Costs” of the Business Must Fail	[347]
The Claim for “Relocation Lost Profit” for “Past Loss” is Not Established	[350]
There is No Evidence Demonstrating Past Lost Profits	[352]
The Losses Were Not “In Connection With” UTSG Under s 59(1)(c)	[361]
The Claim for “Relocation Lost Profit” for “Future Loss” Cannot be Maintained	[363]
There is No Basis for the Claim for the Costs of Dr Baig’s Supreme Court Proceedings	[365]
UTSG Sought to Further Amend its Claim for Compensation in Closing Submissions	[367]
UTSG Was Not Denied Procedural Fairness in the Conduct of the Proceedings	[386]
Rental Arrears Owing by UTSG to TNSW for its Occupation of 40 Park St	[391]
Conclusions on UTSG’s Claim for Compensation	[396]
Costs	[400]
Applicable Legal Principles Concerning Costs in Compulsory Acquisition Cases	[403]
Liability of Ms Singh as a Non-Party for Sydney Metro’s Costs	[412]
Orders	[426]

An Unrepresented Corporate Applicant Seeks Compensation for a Compulsory Acquisition

1. One of the most quoted excerpts (often wrongly attributed to Shakespeare) from the historical romantic poem of lust and betrayal, Marmion: A Tale of Flodden Field, penned by Sir Walter Scott in 1806 (Ballantyne and Co, Edinburgh, 1808) is the following:

Oh, what a tangled web we weave,

When first we practice to deceive!

2. There can be no more apt summation of this Class 3 compulsory acquisition litigation commenced and conducted by the applicant, UTSG Pty Ltd (“UTSG”).

3. In particular, there can be no more pithy description of the evidence given by one of the directors of UTSG during the proceedings, namely, Ms Simran Roselyne Singh (sometimes known as Ms Roselyn Singh).

4. Represented at the time of filing and during the initial stages of the proceeding, on 25 October 2018 UTSG became self-represented and the proceedings were conducted by Ms Singh and Dr Mirza Baig as directors of UTSG (see r 7.1(2)(a) of the Uniform Civil Procedure Rules 2005 (“UCPR”)).

5. Unlike other superior courts of record (for example, the Federal Court of Australia and the Supreme Court of New South Wales), this Court does not have any ability to control unrepresented corporate litigants from commencing and/or conducting proceedings. This proved to be particularly problematic in the present case, as the chronology of events in this judgment lays bare. The result has been a proceeding replete with delay and wasted expenditure, almost all of it caused by UTSG and some of which, it may be anticipated, may never be recovered by the respondent, Transport for NSW (“TNSW”), now Sydney Metro (the terms are used as interchangeable throughout the judgment, as they are in the evidence), the successful party in this litigation.

6. Sydney Metro is carrying out the Sydney Metro - City and South West Project (“the project”). The acquisition occurred for the purpose of that project under the Transport Administration Act 1988.

7. On 4 October 2016, UTSG was served with a Proposed Acquisition Notice in respect of its leasehold interest in the premises (“PAN”). On 13 January 2017 the acquisition was effected by a notice published in the NSW Government Gazette.

8. On 19 December 2016 UTSG submitted a claim for compensation to the NSW Valuer-General (“VG”) seeking compensation in the amount of $19,907,948 (for disturbance under s 55(d) of the Land Acquisition (Just Terms Compensation) Act 1991 (“Just Terms Act”)). The statutory declaration that accompanied that claim was signed by "Simrane Roselyn Singh".

9. A revised claim was submitted to the VG on 28 April 2017 seeking compensation in the amount of $10,984,701. The entirety of the claim was for compensation for loss attributable to disturbance.

10. On 12 May 2017 the VG determined the compensation to which the applicant was entitled in the amount of $2,136,834 for loss attributable to disturbance under s 55(d) of the Just Terms Act.

11. Seven days later, on 19 May 2017, Sydney Metro sent UTSG a notice of its entitlement to compensation in the amount determined by the VG in accordance with s 42 of the Just Terms Act.

12. UTSG commenced proceedings pursuant to s 66 of the Just Terms Act on 16 August 2017, appealing against the amount of compensation offered by Sydney Metro in accordance with the VG’s determination arising from the compulsory acquisition of UTSG’s leasehold interest in part of the premises known as 40 Park St, Sydney (“40 Park St”) on 13 January 2017.

13. For the reasons that follow, it is the Court’s determination that UTSG is entitled to nil compensation because as at the date of acquisition:

1. UTSG had been restructured and whatever was left of the business operating out of 40 Park St had been transferred to Dr Baig (prior to him becoming a director of UTSG during the course of the hearing);

2. there was no cogent and reliable evidence of the cost of the claimed relocation of the medical business;

3. there was no evidence of any past business loss in light of the Court’s earlier rejection of the report of Mr Gambhir Watts (UTSG Pty Ltd v Sydney Metro (No 4) [2019] NSWLEC 51) and the acceptance by all experts, including Mr David Mullins (engaged by UTSG) (T871:35), that there was no value in the business;

4. there was no claim for business extinguishment, such claim having been expressly disavowed by Ms Singh (T182:10-182:48); and

5. while Sydney Metro accepted that UTSG was entitled to compensation in respect of its legal ($85,596.76) and valuation ($51,920) fees, this was offset against the unpaid rental owing by UTSG to Sydney Metro in the amount of $183,123.64. This left a deficit of $45,606.88 in rental arrears, any claim to which was abandoned by Sydney Metro on 17 December 2019 in these proceedings (T1310:50-1311:01).

14. I acknowledge the assistance afforded to me by Parker AC during the hearing of this matter. Having said this, in this judgment all analyses and all findings, both legal and factual, are my own.

Transport for New South Wales Acquires a Leasehold Interest

15. Because of the way in which UTSG put its claim for compensation and the manner by which it conducted the hearing, it is necessary to set out in detail the background to these Class 3 proceedings.

16. The 40 Park St premises in which the leasehold interest was held comprised a three storey building prior to its acquisition by TNSW. As at February 2013 and at all times until 28 October 2016, the property was owned by Gwynvill Properties Pty Limited (“Gwynvill”) (Gwynvill has been paid compensation for the acquisition of its freehold interest).

17. UTSG was registered as a company on 8 April 2011. At all material times Ms Singh was and is a director of UTSG and the owner of that company.

18. UTSG Consortium Pty Ltd (“UTSG Consortium”) was registered as a company on 21 June 2011. Ms Singh was the sole director and secretary of UTSG Consortium and the majority owner of that company.

19. UTSG Consortium entered into a lease of part of 40 Park St, being the ground floor and first floor of the building, with Gwynvill on 1 March 2013. The lease had a term of five years commencing on 1 March 2013 and terminating on 28 February 2018, with an option to renew for another five years (“the lease”). As at the date of acquisition, UTSG had been the lessee of the premises for almost four years and it had a remaining term of approximately 14 months (with an option to renew). The lease did not extend to the second floor of the building at 40 Park St.

20. UTSG Consortium contracted with Numed Healthcare Pty Ltd (“Numed”) trading as Medbuild in March 2013 to carry out a fitout of 40 Park St. Medbuild undertook the fitout of the premises during 2013 on behalf of UTSG Consortium.

21. Medbuild served a statutory demand on UTSG Consortium on 15 October 2013 claiming that UTSG Consortium was indebted to Medbuild in the sum of $233,062 for the fitout of 40 Park St. UTSG Consortium did not respond to the statutory demand.

22. Accordingly, on 18 December 2013 Medbuild applied to the Supreme Court of New South Wales (“the Supreme Court”) to wind up UTSG Consortium. On 1 January 2014 UTSG Consortium transferred the lease to UTSG with the consent of Gwynvill.

23. On 3 February 2014 the Supreme Court ordered that UTSG Consortium be wound up and liquidators were appointed. UTSG Consortium was deregistered as a company on 2 August 2015.

24. UTSG says that a medical centre trading under the name "V Health Plus" operated from 40 Park St. However, the objective evidence does not reveal a clear picture of the use of the premises from 1 January 2014, or as at the date of acquisition. It appears that from time to time between January 2014 to January 2017, carried out at 40 Park St were:

1. the medical practices of various doctors (who appear to be general practitioners), including (from time to time) Dr Baig, Dr Thomas Springer, Dr Michael Cavanagh, Dr Vijayendra Desai, Dr R A Peach and Dr James Vandeleur; and

2. additionally, the part time dental practice of Dr Andy Hsiau, located on the first floor of the premises.

25. The medical and dental practices operated through various companies other than UTSG. There are some documentary records that address the terms on which those practices used the premises at 40 Park St, but the financial aspects of UTSG’s arrangements with the service providers are opaque and unreliable.

26. According to its amended points of claim dated 22 March 2019 (“the amended points of claim”), UTSG contends that it entered into a contract for sale of the business on 1 November 2015 with “5G General Trading LLC” (“5G”) of Dubai for US$14,570,000, with a settlement date of 30 April 2016 (“the Business Sale Agreement”). The settlement date was later mutually extended to October 2016.

27. UTSG alleges that by reason of the receipt of the PAN on 9 October 2016, the Business Sale Agreement with 5G did not proceed. Although the existence and veracity of the Business Sale Agreement was a matter of controversy, the Business Sale Agreement does not appear to form any specific part of the amount claimed by way of compensation by UTSG.

28. On 5 November 2015 Gwynvill served on UTSG a notice alleging various breaches of the lease relating to the use of the ground floor of the premises as a coffee shop. Consequently, on 17 November 2015 Gwynvill took possession. Possession was returned by Gwynvill to UTSG the following day. As a result of the dispute concerning the lockout, UTSG commenced legal proceedings against Gwynvill on 8 April 2016 in the Supreme Court seeking damages. The matter was set down for a five day hearing commencing on 12 June 2018. On 16 May 2018 the hearing was vacated upon the application of UTSG and the Court ordered costs against UTSG in the amount of $88,421, payable within 28 days after which the proceedings would be stayed.

29. On 31 March 2016 TNSW sent a letter to UTSG informing it that TNSW intended to acquire the premises for the purposes of the Sydney Metro – City and South West Project, and after negotiation, sent the PAN to UTSG.

30. On 28 October 2016 TNSW acquired the freehold interest of Gwynvill in 40 Park St by compulsory acquisition.

31. Notwithstanding the purported sale to 5G, on 16 November 2016 Dr Baig and Ms Singh executed a term sheet with Tasly Healthpac CBD Healthcare Corporation Pty Limited (“Tasly”) for the sale of the V Health Plus Medical Centre Business at 40 Park St to Tasly. A contract of sale was prepared dated December 2016, but it was not executed by the parties. According to UTSG the sale did not proceed because of the acquisition the subject of these proceedings.

32. Mr Brett Goodyer of SV Partners Forensics (NSW) Pty Ltd issued a Preliminary Economic Loss Report on 16 December 2016 on behalf of UTSG, assessing the total expected losses and damages suffered by UTSG as a result of the proposed acquisition to be $19,872,948.

33. This report accompanied a claim lodged by UTSG dated 19 December 2016 for compensation in accordance with s 39 of the Just Terms Act in the amount of $19,907,948.

34. On 5 January 2017 Dr Baig commenced proceedings in the Supreme Court against UTSG and Ms Singh seeking, among other things (“the first Supreme Court proceedings”):

1. a declaration that various transfers of shares in respect of UTSG were void or did not take effect and that the share register of UTSG be corrected; and

2. an order that any compensation paid by, or on behalf of, TNSW in relation to the compulsory acquisition of the premises be held in the trust account of Mitry Lawyers Pty Ltd (“Mitry Lawyers”) to be dispersed in accordance with any direction of the Court. Furthermore, that the reasonable cost of relocating the business known as “V Health Plus”, as determined by Mr Watts, be paid by direction in writing to Mitry Lawyers with the balance to remain in Mitry Lawyers' trust account until further order.

35. On 11 January 2017 Dr Baig executed two agreements with Tasly:

1. a “Provision of Services to incorporated Medical Practitioner”, in the capacity of Dr Baig of UTSG Consortium Pty Ltd (“the practitioner contract”) for Dr Baig to provide medical services at Tasly's leased premises at 501 George St, among other obligations. This UTSG Consortium Pty Ltd was a different entity to the UTSG Consortium which originally held the lease at 40 Park St and was deregistered; and

2. a “Performance Guarantee: Incorporated Medical Practitioner” in the capacity of Dr Baig of 62 MacMillan Avenue, Mawson Lakes, SA, 5096, for the performance of the practitioner contract commencing 16 January 2017.

36. On 12 January 2017 Dr Baig and Ms Singh signed a Deed of Agreement in which the parties agreed, among other things, to:

1. discontinue the first Supreme Court proceedings;

2. each receive an equal share of the compensation to be received from TNSW after deduction of all verified expenses paid by them and repaid to them; and

3. pay the funds received into the trust account of Mitry Lawyers who would transfer the funds as instructed by both parties.

37. The first Supreme Court proceedings were discontinued by Dr Baig on 13 January 2017, the same day that TNSW compulsorily acquired UTSG’s leasehold interest in 40 Park St.

38. Also on that day, TNSW wrote to UTSG relevantly advising it that UTSG was entitled to remain in occupation at 40 Park St (provided that certain statutory criteria were met), but that TNSW required vacant possession of the premises no later than 12 April 2017, in order to meet the construction program for the project. UTSG was required to pay $31,402 per month (plus GST of $3,140) by way of rent to TNSW during UTSG's continued occupation of the premises after the date of acquisition (this sum equated to the rent that would have otherwise been payable by UTSG to Gwynvill under the lease).

39. On 20 January 2017 Dr Baig and UTSG Consortium entered into a Practice Sale and Purchase Agreement with Tasly (“the Tasly Agreement”). Under the Tasly Agreement:

1. UTSG Consortium was required to do everything it could to ensure that the patients seen by Dr Baig at 40 Park St were transferred to Tasly; and

2. Dr Baig would be paid $1 million, including an initial $250,000 payment.

40. On 24 January 2017 Tasly informed Dr Baig that a deposit of $250,000 had been paid into his bank account in accordance with the Tasly Agreement.

41. Dr Baig did not attend Tasly's offices on 30 January 2017 to commence work in accordance with the Tasly Agreement.

42. Therefore, on 31 January 2017 Andrew & Holm Lawyers, acting on behalf of Tasly, issued a letter of demand to Dr Baig. In the letter Dr Baig was given the option of either immediately attending the Tasly premises in accordance with the Tasly Agreement, or returning the deposit of $250,000 to Tasly in full by 7 February 2017, in lieu of which Tasly would agree to terminate the Tasly Agreement on a without prejudice basis.

43. On 10 February 2017 TNSW made an offer for advance payment to UTSG in the amount of $810,000, being 90% of the $900,000 offered by TNSW to UTSG on 19 April 2016, subject to the following conditions:

1. that a deed be entered into between TNSW and all of the directors of UTSG (not limited to Dr Baig and Ms Singh) with respect to the advance payment in a form acceptable to TNSW; and

2. that UTSG accept that the advance payment satisfied the requirements of s 34 of the Just Terms Act.

44. Tasly commenced legal proceedings in the District Court against Dr Baig on 14 February 2017 to recover the deposit paid to him pursuant to the Tasly Agreement.

45. On 4 and 13 April 2017, TNSW made offers for advance payment to UTSG in the amount of $810,000, for the purposes of assisting UTSG to relocate to new premises. It subsequently agreed to reduce the rent payable per month after 1 April 2017 to $23,028 (inclusive of GST) because UTSG would not be occupying the first floor of the premises after 1 April 2017.

46. On 12 April 2017 Mr Goodyer issued a revised report amending the total expected losses suffered by UTSG as a result of the acquisition (“the Goodyer report”). On the basis of the Goodyer report, UTSG revised its claim to $10,829,988. The Goodyear report was provided by UTSG to the VG.

47. On 12 May 2017 the VG made a determination of compensation under s 47 of the Just Terms Act in the amount of $2,136,834 for the acquisition of UTSG's interest in 40 Park St (which comprised disturbance under s 55(d) of the Just Terms Act).

48. On 19 May 2017 TNSW provided UTSG with a compensation notice offering compensation as determined by the VG, less outstanding rent as at the anticipated vacant possession date of 12 June 2017, in the sum of $2,012,288.

49. TNSW paid the amount of $2,012,288 into a trust account established under s 51(3) of the Just Terms Act on 30 May 2017.

50. In the period between February and June 2017, Dr Baig commenced providing medical services from the ground floor of premises located at 280-282 Pitt St, Sydney (“280 Pitt St”). As at March 2019 Dr Baig was continuing to provide medical services from these premises.

51. On 16 June 2017 Dr Baig commenced a second set of proceedings in the Supreme Court against UTSG, Ms Singh, other companies associated with Ms Singh, and TNSW (“the second Supreme Court proceedings”). The proceedings sought orders for the making of adjustments to the share register of UTSG relating to the control of UTSG between Dr Baig, Ms Singh and Mr Brendon Hollins (Ms Singh’s son), together with a freezing order relating to the compensation payable under the Just Terms Act by TNSW to UTSG.

52. On 26 June 2017 TNSW provided an undertaking to the Supreme Court to keep the unpaid compensation in the trust account until the resolution of the second Supreme Court proceedings between Dr Baig and Ms Singh. The undertaking was to "hold the compensation amount already paid by Transport for NSW into the existing trust account established under section 51 of the [Just Terms Act] subject to any orders of the Court being made in respect of the dispersal of the compulsory acquisition compensation from the trust account" and was expressed to expire "at the conclusion of the substantive hearing in the proceedings, or until further order of this Court".

53. UTSG continued to occupy the premises between 13 January to 31 July 2017, when it provided vacant possession. UTSG had not paid Sydney Metro rent for this period.

54. On 7 August 2017 Brereton J made orders in relation to the manner in which UTSG, Ms Singh and Dr Baig were to give instructions to Stacks Law Firm (“Stacks”), the lawyers acting for UTSG in respect of its claim for compensation in this Court.

55. On 21 December 2017 the Supreme Court made an order that "the undertaking given by the Third Defendant [TNSW] on 26 June 2017 is varied to the extent that the Third Defendant is permitted to release an amount of $916,472.58 to be paid to the Mills Oakley Trust Account to be paid to creditors agreed between the plaintiff and first and second defendants”.

56. Dr Baig, Ms Singh, UTSG, and other related parties entered into a Deed of Settlement and Release dated 17 January 2018 in relation to the second Supreme Court proceedings, whereby the compensation amount was to be determined by this Court in this Class 3 claim. On 2 February 2018 TNSW paid an amount of $916,472 to UTSG by deposit into the trust account of Mills Oakley (a firm of solicitors).

57. On 16 April 2018 Dr Baig informed the Supreme Court that the second Supreme Court proceedings had settled and leave was granted to file a notice of discontinuance against TNSW. Part of that settlement, to which UTSG was a party, provided that the medical practice (defined as the practice at 280 Pitt St), including associated patient records, be transferred to Dr Baig.

58. On 26 April 2018 Dr Baig emailed a notice of discontinuance against TNSW to the Supreme Court in respect of the second Supreme Court proceedings.

59. On 7 May 2018 TNSW paid the residual portion of the compensation amount determined by the VG held in its trust account, namely, $1,028,599, in accordance with a direction to pay issued by UTSG as follows: $998,699 into Stacks’s trust account; $10,566 into Hegarty Legal Pty Ltd’s office account; and $19,363 into Mitry Lawyers’s office account.

Legislative Basis for Compensation Under the Just Terms Act

60. The provisions of the Just Terms Act relevant to the determination of the issues in these proceedings are ss 54 to 56 and 59:

54     Entitlement to just compensation

(1)     The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land.

(2)     If the compensation that is payable under this Part to a person from whom native title rights and interests in relation to land have been acquired does not amount to compensation on just terms within the meaning of the Commonwealth Native Title Act, the person concerned is entitled to such additional compensation as is necessary to ensure that the compensation is paid on that basis.

55 Relevant matters to be considered in determining amount of compensation

In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division):

(a)    the market value of the land on the date of its acquisition,

(b)    any special value of the land to the person on the date of its acquisition,

(c)    any loss attributable to severance,

(d)    any loss attributable to disturbance,

(e)    the disadvantage resulting from relocation,

(f)    any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired.

56 Market value

(1) In this Act:

market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid):

(a)    any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and

(b)    any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and

(c)    any increase in the value of the land caused by its use in a manner or for a purpose contrary to law.

(2)    When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition.

(3) If:

(a)    the land is used for a particular purpose and there is no general market for land used for that purpose, and

(b)    the owner genuinely proposes to continue after the acquisition to use other land for that purpose,

the market value of the land is taken, for the purpose of paying compensation, to be the reasonable cost to the owner of equivalent reinstatement in some other location. That cost is to be reduced by any costs for which compensation is payable for loss attributable to disturbance and by any likely improvement in the owner’s financial position because of the relocation.

59 Loss attributable to disturbance

(1) In this Act:

loss attributable to disturbance of land means any of the following:

(a) legal costs reasonably incurred by the persons entitled to compensation in connection with the compulsory acquisition of the land,

(b)    valuation fees of a qualified valuer reasonably incurred by those persons in connection with the compulsory acquisition of the land (but not fees calculated by reference to the value, as assessed by the valuer, of the land),

(c)    financial costs reasonably incurred in connection with the relocation of those persons (including legal costs but not including stamp duty or mortgage costs),

(d)    stamp duty costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the purchase of land for relocation (but not exceeding the amount that would be incurred for the purchase of land of equivalent value to the land compulsorily acquired),

(e)    financial costs reasonably incurred (or that might reasonably be incurred) by those persons in connection with the discharge of a mortgage and the execution of a new mortgage resulting from the relocation (but not exceeding the amount that would be incurred if the new mortgage secured the repayment of the balance owing in respect of the discharged mortgage),

(f)    any other financial costs reasonably incurred (or that might reasonably be incurred), relating to the actual use of the land, as a direct and natural consequence of the acquisition.

(2) Subject to the regulations, a reference in this section to a qualified valuer is a reference to a person who:

(a)    has membership of the Australian Valuers Institute (other than associate or student membership), or

(b)    has membership of the Australian Property Institute (other than student or provisional membership), acquired in connection with his or her occupation as a valuer, or

(c)    has membership of the Royal Institution of Chartered Surveyors as a chartered valuer, or

(d)    is of a class prescribed by the regulations.

The Changing Nature of UTSG’s Compensation Claim

61. As at 16 August 2017, when UTSG was legally represented and the proceedings were commenced, the company sought compensation in the amount of $10,967,505.

62. However, by the time UTSG filed its final version of its amended points of claim (there were various iterations prior to this point) (T8:32-9:09) on 25 March 2019 (by which time it was unrepresented), the compensation claimed had increased significantly:

125. The Applicant claims s 55(a) market value and in the alternative for s 55(d) disturbance in accordance with the Just Terms Act as follows,

Section 56 (1) and if s 56(3)(a)(b)

Section 56(1) and if s 56(3)(a)(b) is for market value of the Land, the land is used for particular purpose and there is no general market for land used for that purpose and, the owner genuinely proposes to continue after the acquisition to use other land for that purpose.

$(an amount to be confirmed – relied up on a Hypothetical Relocation Cost served on 30 November 2018)

Section 59(1)(a) and (b)

Section 59(1)(a) Legal fees

$(an amount to be confirmed)

Section 59(1)(b) Valuation fees (as at 1 February 2019)

$178,640.00

Section 59(1)(c)/(f) Relocation costs

(i) Wasted relocation costs

$2,120,893.00

(ii) Future relocation costs for the Business

(a) Relocation costs of the Fit-out of Premise

(b) Retained plant and equipment fire sale value

$(an amount to be confirmed)

$1,903,939.00

$53,561.00

Section 59(1)(c)/(f) Relocation Lost Profits

(i) Past Loss

$9,110,410.00 (includes DM’s wasted relocation costs of $2,120,893.00)

(ii) future loss assuming at least an 18 month loss

$5,971,823.00

In the alternative, section 59(1)(c) Extinguishment Relocation Costs and section 59(1)(f) Extinguishment Lost Profits

Extinguishment lost profits

Past lost

Loss in perpetuity

$9,110,410.00 (includes DM’s wasted relocation costs of $2,120,893.00), plus

$39,647,056.00

Section 59(1)(f) Supreme Court Proceedings – legal costs associated with settled claim by Dr Mirza Baig that was delayed by TNSW, for completion of resolution and SC Matter.

$(an amount to be confirmed)

63. Accordingly, as set out in its pleadings, UTSG’s claim for compensation was for (at least - some heads of compensation remain unquantified):

1. $19,160, 626 for relocation; or

2. $50,878,359 for extinguishment;

3. $178,640 for valuation fees;

4. unspecified legal fees; and

5. the costs of the Supreme Court proceedings brought by Dr Baig against UTSG, also unquantified.

64. Although the amended points of claim referred to a claim for market value (at paragraphs 50, 51(b) and 125), there was no reference to, or quantification of, a claim for market value in the summary table quoted above. Further, no evidence was by filed by UTSG in support of any market value claim. In correspondence from UTSG to Sydney Metro, UTSG confirmed that no such claim was pursued.

65. The claim for compensation for the extinguishment of its business upon acquisition was abandoned by UTSG on day three of the hearing.

66. Subsequently, during its closing submissions, the amount of compensation sought by UTSG increased to $45,710,000. The more than doubling of its claim for compensation was unexpected, was difficult to understand, and was neither the subject of new evidence nor an application by UTSG to amend its pleadings. It is discussed separately in detail later this judgment reflecting the manner in which it was raised, namely, as an almost entirely new claim (see at [367]-[380]).

67. UTSG’s constantly evolving position with respect to the amount of compensation claimed and its calculation was a source of considerable confusion both to the Court and to Sydney Metro, during the course of the proceedings. The inability of UTSG to properly, or at all, identify the basis of the quantum of its claim contributed significantly to the duration of the hearing and to the quantity of evidence required to be adduced, resulting in a concomitant increase in the parties’ costs.

UTSG’s Repeated Non-Compliance With Court Orders

68. Given Sydney Metro’s application that UTSG, and Ms Singh personally, pay the costs of the proceedings, it is convenient at this juncture to set out the abjectly dismal procedural history of this litigation; a chronology overwhelmingly characterised by the constant and chronic contravention by UTSG of Court orders. Its non-compliance resulted in the initial hearing of the matter having to be vacated (UTSG Pty Ltd v Sydney Metro [2018] NSWLEC 128).

69. On 27 October 2017 the Registrar provisionally reserved 15, 16 and 21 to 25 May 2018 to hear the claim.

70. On 15 December 2017 the Court made orders requiring UTSG to:

1. provide Sydney Metro with any accounting records of UTSG that were provided to UTSG's forensic accountant no later than three business days after they are provided to that accountant;

2. serve its points of claim by 19 February 2018;

3. serve a schedule of, and all lay evidence in relation to, its disturbance losses under s 59(1) of the Just Terms Act by 19 February 2018; and

4. serve any expert evidence in relation to disturbance by 19 February 2018.

71. The 15 December 2017 orders listed the matter for further directions on 2 March 2018 and directed the parties to approach the Registry to fix a date for a conciliation conference by no later than 25 May 2018 and to list the matter for hearing with an estimate of seven days, not before 20 August 2018.

72. On 15 February 2018 the matter was listed for a conciliation conference on 16 May 2018 and for a final hearing from 28 August to 5 September 2018.

73. UTSG failed to serve its points of claim, lay evidence, schedule of disturbance losses, and expert evidence by 19 February 2018 as ordered.

74. On 2 March 2018 the Court made orders setting down a timetable for the proceedings leading up to the conciliation conference on 16 May 2018, and, if conciliation was not successful, for a directions hearing to take place on 25 May 2018. The orders also extended the time for the filing of UTSG's points of claim, schedule and lay evidence in relation to disturbance losses, to 13 April 2018 and likewise extended the time for the filing of UTSG's expert evidence to 29 March 2018.

75. On 5 March 2018 Mr Digby Dunn, the then solicitor on the record for UTSG, sent an email to Ashurst (the solicitors for Sydney Metro) attaching some financial records of UTSG.

76. On 29 March 2018, pursuant to the 2 March 2018 orders, UTSG served an expert report prepared by Mr David Mullins of Axiom Forensics dated 29 March 2018 (“the Mullins report”). No other expert evidence was served.

77. UTSG failed to serve its schedule of disturbance losses, its lay evidence, or its points of claim by 13 April 2018, contrary to the 2 March 2018 orders.

78. On 24 April 2018, at Sydney Metro's request, and because UTSG had not complied with the 2 March 2018 orders, the matter was relisted for further directions.

71. On 27 April 2018 the Court made orders that amended the timetable set out in the 2 March 2018 orders. Among other things, those orders required UTSG to file its points of claim, disturbance schedule, and lay evidence by 10 May 2018.

72. On 7 May 2018 UTSG served an affidavit of Ms Singh sworn 7 May 2018.

73. On 10 May 2018 UTSG filed and served a document described as its "draft points of claim" (“draft POC”), contrary to the 27 April 2018 orders. The draft POC were served on Ashurst by email from Mr Dunn stating that, "the Points of Claim are still in draft form, as they are yet to be settled by Senior Counsel".

74. Notwithstanding that the 2 March 2018 orders required UTSG to file any expert evidence in relation to disturbance by 29 March 2018, paragraph 114 of the draft POC indicated that UTSG would seek to rely on additional expert evidence not yet filed in the proceedings. This material was to include the evidence of Mr Owen Allsopp (a valuation expert) in relation to relocation expenses and an unnamed planning expert in relation to the development application costs associated with the relocation by UTSG to new premises.

A Notice to Produce is Served on UTSG

83. On 17 May 2018 (the day after the conciliation conference was terminated), Sydney Metro filed and served a notice to produce on UTSG (“NTP”).

84. The NTP sought 44 categories of documents, all of which were directed to ascertaining the financial position of UTSG as at the date of the acquisition, and therefore, the value of the leasehold interest the subject of the acquisition. For example, production was required of:

Accounting Records

1   Any Accounting Records of UTSG between the period of 1 January 2014 and 30 April 2018.

2   Any bank statement from any bank accounts held by UTSG for the period 1 October 2013 to 30 April 2018.

3   Asset register details which show the calculation of all depreciation expenses claimed by UTSG for each of the three financial years ended 30 June 2017.

4   Any document identifying the individual health practitioners and the fees payable in relation to each of those practitioners in the categories of “V Health Medical Plus”, “Dr Preventative Health Clinics”, “Dr IHCS Lifestyle Clinics” and “Dr ICM Health & Wellness Clinics” as contained in the spreadsheet “BPS Work Done by Doctor Report” in Appendix 5 to the report of David Mullins dated 29 March 2018.

5   All documents relating to communications between UTSG (or its representatives) and Taxation Guru Pty Ltd (also known from time to time as Gambhir Watts in relation to the accounts of UTSG during the period 1 October 2013 to 30 April 2018.

6   All documents relating to communications between UTSG (or its representatives) and MS Tax & Accounting Services in relation to the accounts of UTSG during the period 1 October 2013 to 30 April 2018.

Tax Records

7   Any Business Activity Statement submitted by or on behalf of UTSG to the Australian Taxation Office in respect of the period between 1 October 2013 and 30 April 2018.

8   Any Tax Return filed with the Australian Taxation Office submitted by or on behalf of UTSG in relation to the period 1 October 2013 to 30 April 2018.

9   All PAYG summaries issued to employees of UTSG in relation to each of the four financial years ended 30 June 2017.

10   Any PAYG summary issued to any employee of UTSG in relation to the period after 30 June 2017.

11   Any document recording communication between the Australian Taxation Office and UTSG or its agents in relation to the period 1 October 2013 to 30 April 2018.

…

Relocation to new premises

30   All documents relating to the relocation, or potential relocation, of UTSG’s business, including the medical services it and its contractors and associates provided at the Premises, from the Premises to any other premises, including:

a.   any quotes, invoices, receipts or other document relating to the       incurring or payment of costs and expenses by or on behalf of          UTSG; and

b.   any notifications to or correspondence with patients or any official    bodies or authorities (whether medical or otherwise) regarding the    relocation from the Premises, including in relation to the storage    and relocation of medical records. For the purposes of this sub-   paragraph, it is necessary only to produce a copy of the template    notification sent to all patients, rather than a copy of each    notification that was sent to every patient.

…

Establishment of Medical Business at 280-282 Pitt Street

33   Any lease, licence, agreement, development application or approval, or other document relating to the occupation, or proposed occupation, of the premises located at 280-282 Pitt Street, Sydney in relation to the period 1 April 2016 to 30 April 2018.

34   Any quotes, invoices, receipts or other document relating to the incurring or payment of costs and expenses by or on behalf of UTSG in establishing the medical business at 280-282 Pitt Street in relation to the period 1 April 2016 to 30 April 2018.

35   Any document relating to the sale or transfer of the business located at 280-282 Pitt Street to Dr Baig including, but not limited to:

a.   Sale of business, transfer or other agreement; and

b.   Documents relating to the negotiation, transfer or implementation    of the relating to the sale, transfer or other agreement. [sic]

36   Copies of all financial reports showing monthly revenues and expenses from the medical practice operated by UTSG from 280-282 Pitt Street, Sydney during the period 1 April 2017 to 30 April 2018.

37   All documents relating to the ownership and access to the patient’s database referred to in paragraph [76] of the Singh Affidavit between 1 July 2016 and 30 April 2018.

85. Much of the material sought by Sydney Metro were documents that UTSG ought to have had in its possession given the expert forensic accounting and valuation evidence required by it to successfully prosecute its claim.

86. At no point did UTSG seek to set aside the NTP.

87. On 25 May 2018 the Court made orders that amended the timetable set out in the 27 April 2018 orders. These included orders that UTSG serve:

1. any further lay evidence in relation to disturbance losses by 8 June 2018;

2. the expert evidence of Mr Allsopp and any expert planning evidence in relation to relocation costs by 20 June 2018; and

3. points of claim by 20 June 2018.

88. The NTP was first returnable before the Registrar on 31 May 2018. On that occasion, no documents were produced by UTSG. The Registrar stood the NTP over to 12 June 2018.

89. UTSG failed to serve any further lay evidence in relation to disturbance losses by 8 June 2018, contrary to the 25 May 2018 orders.

90. UTSG also failed to produce any documents pursuant to the NTP by the second return date of the NTP, namely, 12 June 2018.

91. On 12 June 2018 the Court relevantly ordered that the NTP be stood over until 19 June 2018, and that UTSG serve all of its lay evidence by 15 June 2018.

92. On 14 June 2018 UTSG's solicitors served a document entitled "Index to Notice Produce" and provided a Dropbox link containing a tranche of documents produced in partial compliance with the NTP.

93. UTSG failed to serve any further lay evidence by 15 June 2018, contrary to the 12 June 2018 orders.

94. On 19 June 2018 the Registrar made orders standing the NTP over to 22 June 2018, and directing UTSG to serve an affidavit explaining the reasons for its delay in serving its further lay evidence in accordance with the orders of 25 May and 12 June 2018, and failure to comply fully with the NTP.

95. UTSG failed to serve its points of claim and failed to serve any further expert evidence, including the foreshadowed expert report of Mr Allsopp and the expert planning evidence, by 20 June 2018, contrary to the 25 May 2018 orders.

96. At a further return of the NTP on 22 June 2018 before Moore J, Sydney Metro submitted to the Court that in relation to the Mullins report and the documents required to be produced under the NTP:

That report as far as the respondent currently apprehends it doesn't exhibit or otherwise refer to your contemporaneous financial materials, and in particular does not contain either in electronic or in printed form the general ledger of the business. Now, the respondent's yet obviously to serve its evidence in respect of disturbance loss and it's anticipated at this stage that part of that case will be a forensic report dealing with the veracity or otherwise of the underlying financial amounts which are said to be losses – said to be earnings and expenses of the business which are the subject of the resumption.

97. On 25 June 2018 the Court ordered UTSG, by 29 June 2018, to:

1. produce documents under the NTP, together with an affidavit verifying the adequacy of its searches;

2. produce the general ledger of the business;

3. produce its practice management system(s);

4. produce bank statements for all accounts associated with the business;

5. serve its points of claim; and

6. serve its completed lay and expert evidence.

98. These orders were important because while compliance with the NTP was still required, the Court made specific additional orders for the production of certain classes of financial documents.

99. The 25 June 2018 orders included a guillotine order that UTSG not be permitted to rely on any lay or expert evidence at hearing that was served after 5:00pm on 29 June 2018, other than with leave of the Court.

100. On 25 June 2018 at 4:10pm UTSG’s solicitors provided Sydney Metro with a spreadsheet document entitled "UTSG financials backup 28 May 2018".

101. On 26 June 2018 UTSG’s solicitors notified Sydney Metro that UTSG had no documents to produce in response to one of the orders made by the Court on 25 June 2018.

102. On 29 June 2018 at 9:37am UTSG’s solicitors sent an email to Sydney Metro stating that UTSG had complied fully with the orders in respect of production under the NTP and production of a general ledger.

103. On 29 June 2018 at 1:01pm UTSG sent an email to Sydney Metro serving the following lay and expert evidence:

1. an affidavit of Ms Singh dated 29 June 2018;

2. an affidavit of Mr Hollins sworn 28 June 2018;

3. an affidavit of Mr Muhammad Fahad (also known as Mr Fahad Siddiqui) dated 28 June 2018; and

4. the expert report of Mr Allsopp dated 28 June 2018 (“the Allsopp report”).

104. Later that day at 2:07pm, UTSG's solicitors sent an email to Sydney Metro regarding the location of UTSG's electronic medical patient files. Later still, at 4:41pm, UTSG's solicitors sent an email to Sydney Metro stating that UTSG had no further documents to produce. At 5:39pm UTSG's solicitors sent an email to Sydney Metro serving the affidavit of Mr Dunn filed 29 June 2018. Shortly thereafter, UTSG's solicitors sent an email to Sydney Metro attaching a spreadsheet entitled "VACCINE Loss of Revenue Projection for 17 Nov 2015".

105. Finally, on 29 June 2018 UTSG filed and served its points of claim.

106. As at that date UTSG had failed to produce, contrary not only to the NTP, but also the 25 June 2018 orders:

1. all outstanding documents under the NTP (save for two documents produced on 25 and 29 June 2018 respectively, and the documents exhibited to the affidavits served on 29 June 2018);

2. the general ledger of the business;

3. its practice management statements; and

4. all bank accounts associated with the business.

107. On 2 July 2018 UTSG's solicitor, Mr Dunn, was cross-examined regarding UTSG's non-compliance with the NTP. Again, Sydney Metro submitted to the Court that there had been non-compliance with the NTP. The Court ordered disclosure of a complete set of the financial records of UTSG.

108. On 4 July 2018 the Court ordered that by no later than 5:00pm on 9 July 2018 UTSG;

1. produce all remaining documents under the NTP;

2. produce the general ledger of the business;

3. produce UTSG's practice management system(s);

4. produce a complete set of bank account records, including all records relating to bank accounts held in the name of other persons or entities (including medical practitioners operating from the premises whose business activities were claimed to relate to UTSG's business, and accounts not in the possession, custody and control of UTSG upon which it had relied for evidentiary purposes, including Mr Mullins valuation report), and a list of available identifying details of those accounts (including account names and account holders); and

5. a list setting out the steps taken to identify the documents, verified by affidavit by a proper officer of UTSG.

109. UTSG failed to produce any further documents under the NTP, failed to produce the general ledger of the business, failed to produce UTSG's practice management system, failed to produce a complete set of bank account records, and failed to serve an affidavit in accordance with the 4 July 2018 orders by 9 July 2018.

110. On 10 July 2018 UTSG filed and served a Notice of Change of Solicitor, appointing Mr Damian Ward of Mills Oakley to act as its solicitor in the place of Mr Dunn of Stacks.

111. On 24 July 2018 the Court extended the time for UTSG to comply with the 4 July 2018 orders to 4.30pm on 25 July 2018. The matter was also stood over for directions to 26 July 2018.

112. Again, consistent with a now all too familiar pattern, UTSG failed to produce any of the relevant business records the subject of the 4 July 2018 orders.

113. At 7:35pm on 25 July 2018, UTSG served an affidavit of Ms Singh sworn 25 July 2018. The affidavit exhibited two volumes of documents which were served on Sydney Metro on 26 July 2018. It did not, however, identify any bank records or bank details pursuant to the 4 July 2018 orders, other than some bank accounts under the direct control of Ms Singh.

114. On 26 July 2018 UTSG produced a further tranche of documents to the Court, comprising three folders of confidential records from UTSG's practice management system (which contained patient names) and two folders of other documents. This resulted in partial compliance with the NTP. UTSG failed to redact the patient names and failed to serve an affidavit in accordance with the 25 June 2018 orders. Instead, UTSG sought a confidentiality undertaking from Ashurst (the solicitors acting for Sydney Metro) in relation to the documents produced.

115. On 26 July 2018, when the matter was before Moore J, Sydney Metro foreshadowed the following further expert evidence:

…The respondent has engaged Dr Ferrier to prepare a business valuation essentially, and it may be anticipated that he will deal with methodology, the paucity of this information and he can't apply methodology to it. There is also what I might describe as, and I think I described it to your Honour before, using the double term forensic, forensic accountant, and that's the veracity of this information. This is what else must exist. This is where there's a hole and so on, and I think I've identified to your Honour before that there's metadata issues and things that will be investigated by that person

116. On 2 August 2018 the Court granted general access to Sydney Metro in relation to the five folders of documents produced by UTSG on 26 July 2018, subject to a confidentiality undertaking being given by Sydney Metro's solicitors with respect to the three folders of unredacted confidential records.

117. On 10 August 2018 Ashurst sent an email to UTSG's solicitors regarding compliance with the NTP and seeking the identity of various doctors.

118. On 20 August 2018 UTSG produced a further two volumes of documents and a USB containing various correspondence.

119. On 21 August 2018 UTSG's solicitors again sent an email to Sydney Metro regarding the identity of various doctors referred to in the documents produced.

120. The previously foreshadowed business valuation report of Dr Ian Ferrier was served by Sydney Metro on UTSG on 22 August 2018 (“the Ferrier report”).

121. In the meantime, the following subpoenas were issued to Dr Baig:

1. on 31 May 2018 Sydney Metro filed a subpoena addressed to Dr Baig (“first Baig subpoena”) dated 31 May 2018;

2. on 1 June 2018 a copy of the first Baig subpoena was served on UTSG's solicitors;

3. the first Baig subpoena was returnable on 14 June 2018, at which time Dr Baig did not appear. Ashurst emailed Dr Baig informing him that the first Baig subpoena had been stood over to 19 June 2018;

4. on 18 June 2018 Dr Baig emailed Ashurst saying, "please see attached for Subpoena to Produce of documents/information. Note this is all I have and able to provide to comply with reference to Schedule 1 and Schedule 2. You will note that it has taken me more than a week to find these documents which is in my possession. I will require substantial spend of effort and funding to be able to try to locate and/or access the remainder of requested. With reference to definitions and subpoena to produce 'Ms Singh' I am unclear as to your request or relevance to subpoena.” Because he did not appear on 19 June 2018, the subpoena was stood over to 22 June 2018. Dr Baig was informed accordingly;

5. Dr Baig did not produce any documents to the Court on 22 June 2018. The subpoena was again stood over until 2 July 2018. Dr Baig was again informed of the order. Again he did not appear and orders were made standing the subpoena over until 23 July 2018;

6. on 13 July 2018 Sydney Metro filed a subpoena addressed to Dr Baig (“second Baig subpoena”) dated 13 July 2018;

7. on 20 July 2018 Dr Baig produced a number of tax returns to the Registry pursuant to the second Baig subpoena. Dr Baig stated that he had no other records in his possession in response to that subpoena;

8. on 14 August 2018 Ashurst emailed Dr Baig regarding his compliance with the first and second Baig subpoenas and informed Dr Baig that both subpoenas had been stood over to 20 August 2018 before the trial judge; and

9. on 18 August 2018 Dr Baig emailed Ashurst stating that he had provided all documents which were in his possession in respect of both subpoenas.

122. Nothing further has been produced in answer to the first or second Baig subpoenas.

123. Based on inconsistencies in the material advanced by UTSG as the basis for its claim, Sydney Metro engaged a forensic accountant from KPMG to carry out a review of the documentation provided to determine what, if any, information was reliable and verifiable. Mr Luke Howman-Giles of KPMG prepared an expert forensic accounting report which was served on UTSG on 16 August 2018 (“the Howman-Giles report”).

124. As a consequence of the service of the Howman-Giles report, Mr Mullins took the extraordinary step of withdrawing his report on 20 August 2018.

125. The withdrawal of the Mullins report was the principal reason for the initial hearing of the proceedings listed in August 2018 being vacated (UTSG at [22] and [33]-[36]):

22   The reasons for UTSG seeking the vacation of the trial are essentially three-fold and were supported initially by two affidavits of Mr Damian Ward, the solicitor for UTSG, sworn on 20 August 2018, with a further affidavit sworn by Mr Ward on 22 August 2018:

(a)   first, the purportedly late service of the KPMG Report (see the first affidavit by Mr Ward). And the late filing of the Ferrier Report;

(b)   second, the asserted ill health of the principal director of UTSG, Ms Simran Singh. Ms Singh appears to be, to all intents and purposes, the mind and will of UTSG (see the second affidavit by Mr Ward. In respect of the second Ward affidavit, it should be noted that the Court declined to make an order of confidentiality urged upon it by UTSG in relation to its contents on the basis that there were insufficient grounds warranting the making of such an order); and

(c)    third, as the Court was informed on 22 August 2018, of the withdrawal by Mr Mullins of his expert evidence on 20 August 2018, following receipt of the KPMG Report (see the third affidavit of Mr Ward, especially at annexure ‘B’), thereby leaving UTSG with no expert accounting evidence, a state of affairs highly prejudicial, if not fatal, to its claim.

…

33   As referred to above, some time on 20 August 2018, Mr Mullins, acting entirely appropriately given his paramount duty to the Court and consistent with his duties as an expert, withdrew his expert opinion. His reasons for doing so are contained in his letter dated 21 August 2018, annexed to the third Ward affidavit. In summary, it appears that upon receipt of the KPMG Report it became evident that Mr Mullins was not given sufficient documentation and material to proffer an expert opinion and that he did not “consider that he was able to rely upon the financial materials that I have been provided” with.

34   As the above chronology demonstrates, the proceedings have involved a very lengthy interlocutory process, characterised by UTSG’s continual default and non-compliance with court orders.

35   I accept that, as Sydney Metro submitted, to the extent that Sydney Metro was late in the service of any of its expert accounting evidence this was due entirely to the non-compliance and default by UTSG.

36   Further, as Mr Mullins himself makes clear in his letter dated 21 August 2018, he has had to withdraw his opinion because of the failure of UTSG to properly instruct him and provide him with the necessary materials for him to properly form an opinion. That this came to light as a result of the service of the KPMG Report is not the fault, as UTSG sought to submit, of Sydney Metro.

126. The Court went on to conclude that although there was an insufficient basis for the vacation of the trial on the basis of Ms Singh’s alleged ill health, the hearing should nevertheless be vacated because (at [54]):

54   … Although the Court finds that the withdrawal of his expert opinion was caused by the failure of UTSG to properly instruct and brief Mr Mullins, the fact remains that the withdrawal by Mr Mullins of his opinion leaves UTSG in a gravely prejudiced state that cannot be remedied prior to the hearing commencing next week.

127. The Court also took the opportunity of summarising the plethora of defaults of UTSG up until that point (at [26]).

128. The proceedings were vacated and the matter was relisted for directions on 28 August 2018, whereat the Court ordered that UTSG serve:

1. electronic copies of various emails;

2. any further lay evidence by 25 September 2018; and

3. any expert evidence in response to the Mr Howman-Giles report by 9 October 2018, with joint conferencing to occur by 23 October 2018.

129. None of the 28 August 2018 orders were complied with.

130. On 18 September 2018 the Court therefore made orders that UTSG:

1. file and serve its written submissions and an agreed statement of facts by 28 September 2018;

2. produce the emails referred to in the 28 August 2018 orders forthwith;

3. verify by affidavit to be filed and served by 28 September 2018 whether the emails produced in electronic form pursuant to the orders made on 28 August 2018 were a complete set of the emails previously produced by UTSG in pdf or hardcopy form and, if not, the reason why an electronic version of the outstanding emails had not been produced, including the steps taken to locate and identify the emails, details of all searches and inquiries undertaken, and the results of those inquiries; and

4. provide the registration numbers or service provider numbers of various health professionals.

131. On 15 October 2018 Ms Singh gave evidence in relation to the adequacy of UTSG’s production of documents. During her cross-examination she somewhat astonishingly claimed that she was not aware of the 18 September 2018 orders in relation to the production of documents (T91:40-93:11).

132. Earlier, on 12 October 2018, in relation to the first and second Baig subpoenas, during cross-examination Dr Baig stated that he had “actively” tried to find the documents referred to in the subpoenas (T45:05-47:07). Nonetheless deficiencies remained in the production of documents by Dr Baig.

133. On 19 October 2018 the Court ordered that:

1. UTSG file and serve any further lay and expert evidence in relation to business extinguishment, loss of profits (including past and future profits and any loss of profits associated with any past or future relocation (actual or hypothetical)), and wasted relocation costs (but not future or hypothetical relocation costs) by 30 November 2018. If UTSG failed to serve any further lay or expert evidence by this date, it would not be permitted to file or serve, or to rely upon, any further evidence at the hearing of the proceedings absent leave of the Court; and

2. if UTSG was to serve any further expert accounting evidence, the parties' accounting experts were to confer and prepare a joint report by 21 December 2018;

134. On 30 November 2018 UTSG served its lay evidence and expert evidence as annexures to an affidavit by Ms Singh dated 30 November 2018. This evidence included the Goodyer report, the Mullins report, and a report from Mr Watts dated 28 November 2018 (“the Watts report”), ostensibly prepared in response to the Howman-Giles report (the Watts report was subsequently rejected in its entirety by the Court: UTSG Pty Ltd v Sydney Metro (No 4) [2019] NSWLEC 51).

135. On 14 December 2018 the Court made orders that:

1. the parties' experts were to confer and prepare a joint report by 1 February 2019;

2. UTSG was to produce to the Court and to Sydney Metro the electronically maintained records in their native format (as a Quickbooks file, rather than a pdf or Microsoft Excel file) of Appendix 20.1 to 20.26 to the Watts report, by 17 December 2018;

3. UTSG was to produce to the Court the original signed "Business Sale/Purchase Agreement" dated 1 November 2015 between UTSG and 5G (the Business Sale Agreement), by 11 January 2019;

4. by 11 January 2019 UTSG was to provide Sydney Metro with the current contact details, including but not limited to, full name, telephone number, and business address of:

1. Ms Cara Adams, referred to in cl 10.3 of the Business Sale Agreement;

2. Law Partners Accountants & Attorneys Pty Ltd (“LPAA”);

3. Mr Michale Williams;

4. Ms Jessica Cheung (including the alternate spelling of "Chang"); and

5. Ms Jessica Leung; and

5. by 18 January 2019 UTSG was to produce to the Court all correspondence and documents recording communications between UTSG and its representatives and 5G and its representatives regarding the Business Sale Agreement for the period 1 July 2015 to 31 December 2016.

136. On 29 January 2019, Dr Ferrier and Mr Mullins (the business valuers) completed their first joint report (“the first joint valuation report”).

137. On 31 January 2019 Mr Howman-Giles and Mr Watts (the forensic accountants) completed their joint report (“the joint forensic accounting report”).

138. On 28 February 2018 the Court made orders including that:

1. the parties' business valuation experts were to complete any further joint conferencing and serve a further joint report by 8 March 2019. The further joint report was to address any issues arising from the joint forensic accounting report;

2. Sydney Metro was to file and serve any further lay evidence upon which it intended to rely by 1 March 2019; and

3. UTSG was to file and serve any lay affidavit evidence in reply to the further lay evidence, if any, filed and served by Sydney Metro by 8 March 2019.

139. On 7 March 2019, Dr Ferrier and Mr Mullins completed their second joint report (“the second joint valuation report”).

140. On 15 March 2019 the Court made orders that:

1. UTSG was to file and serve any further lay evidence in response to Sydney Metro's lay evidence by 22 March 2019;

2. UTSG was to serve a list of witnesses that it intended to call to give evidence at the hearing by 22 March 2019;

3. UTSG was to file and serve any amended points of claim by 22 March 2019; and

4. Sydney Metro was to file and serve any amended points of defence by 25 March 2019.

141. As stated above, successive iterations of amended points of claim were provided by UTSG between 22 and 28 March 2019. The version upon which UTSG ultimately relied was that identified by it on the first day of the trial, namely, the amended points of claim dated 22 March and filed on 25 March 2019.

142. Apart from Mr Mullins and Mr Watts, the only other witnesses that UTSG notified Sydney Metro that it wished to rely upon were those listed at paragraph 126 of the amended points of claim, namely, Ms Singh and Dr Abdul Shakoor, a purported “director” of 5G.

143. The matter was heard for seven days in April 2019. Because it was not completed within this time (it was adjourned part-way through Ms Singh’s evidence) it was fixed for a further five days of hearing commencing on 29 July 2019 (see UTSG Pty Ltd v Sydney Metro (No 5) [2019] NSWLEC 107 at [2]).

144. However, on 18 July 2019 by way of ex parte email communication from Ms Singh to the Court, UTSG sought to vacate the hearing of the resumption of the part-heard matter based on Ms Singh’s ill health.

145. Reluctantly, given the paucity of the medical evidence adduced in support of the application and the fact that Dr Baig remained a director of UTSG and was therefore capable of providing instructions and representing the company (UTSG (No 5) at [63]), the Court acceded to the vacation request on the basis that it was unsafe to proceed with the hearing while Ms Singh’s evidence had not been completed (at [65]-[67]).

146. The matter resumed on 26 September 2019 for the completion of Ms Singh’s evidence, and thereafter, at various intervals for a further nine days (the hearing took 17 days in total, excluding the numerous days occupied with interlocutory applications and directions hearings, almost all of which were necessitated by UTSG’s failure to comply with Court orders) to deal with the business valuation expert evidence, the forensic accounting expert evidence, the limited lay evidence and the final submissions of the parties.

The Real Issues for Determination in the Proceedings

147. Properly analysed, the claim by UTSG did not raise complex issues of either fact or law for determination. Rather, the gravamen of its claim for compensation was the availability and quantification of its past and future relocation costs. For the sake of clarity, however, the real issues for determination in the proceeding can be identified as follows:

1. the true nature and scope of UTSG’s business at 40 Park St;

2. whether UTSG in fact relocated its business to 280 Pitt St;

3. if so, what were the “financial costs reasonably incurred in connection with the relocation” pursuant to s 59(1)(c) of the Just Terms Act;

4. whether an alternative basis for its claim for past relocation costs was available under s 59(1)(f) of that Act;

5. if maintainable, what was the quantification of the past relocation costs?

6. whether a claim for future relocation costs could be brought under either s 59(1)(c) or (f) of the Just Terms Act;

7. if maintainable, whether UTSG in fact decided to relocate to another leasehold in the future;

8. assuming that a claim for future relocation costs was available, what was the quantum of the recoverable costs;

9. whether a claim for lost profits could be established under s 59(1)(c) or (f) of the Just Terms Act;

10. if so, what was the appropriate quantification of any lost profits having regard to the evidence, and in particular the expert evidence, before the Court;

11. whether a claim for compensation for either of the Supreme Court proceedings was available under s 59(1)(f) of the Just Terms Act;

12. whether UTSG owed any unpaid rent to Sydney Metro for its occupation of 40 Park St after the date of acquisition, and if so, in what amount;

13. if it did, whether the rental arrears could be offset against the amount of compensation, if any, owed to UTSG by Sydney Metro;

14. what was the total amount of compensation, if any, UTSG was entitled to; and

15. what was the appropriate order as to costs?

The Evidence of the Parties

148. Unsurprisingly, no agreement could be reached as to what material was required to be put into evidence before the Court. Consequently, the tender bundle comprised 18 volumes (including two volumes of material tendered by UTSG which became Ex A), the court book totalled 12 volumes, and the supplementary court book resulted in another six volumes of material. It is equally unsurprising that the Court was taken to only the smallest of fractions of this material, particularly by UTSG in the prosecution of its claim.

149. The only lay evidence that was ultimately relied upon by UTSG at the hearing were Ms Singh’s May, June, July and November 2018 affidavits and an affidavit sworn by her on 12 April 2019.

150. The following affidavit evidence was filed and served by UTSG but was not read at the hearing:

1. an affidavit of Dr Baig dated 21 January 2019 (not relied upon by UTSG);

2. two affidavits of Mr Dunn dated 20 and 29 June 2018 (not relied upon by UTSG);

3. an affidavit of Mr Hollins dated 28 June 2018 (not relied upon by UTSG: T111:30-35 and 113:23-24);

4. an affidavit of Mr John Frisken dated 26 March 2019 (not relied upon by UTSG: T113:24-29); and

5. an affidavit of Mr Fahad dated 28 June 2018 (not relied upon by UTSG: T113:14-29).

151. The following expert evidence was served and relied upon by UTSG:

1. the Allsopp report. This was, however, rejected by the Court on 9 April 2019 (pursuant to an objection by Sydney Metro), on the basis that Mr Allsopp lacked suitable qualifications and expertise to give the opinion set out in his report, did not explain the basis of his opinion, lacked impartiality, and was not available for cross-examination (T81-82:23);

2. the evidence of Mr Watts, which was rejected by the Court on 11 April 2019 (see UTSG (No 4)); and

3. the Mullins report (discussed in detail later in this judgment).

152. UTSG also appeared to rely on the Goodyer report. Notwithstanding that the Goodyer report was attached to other material that was in evidence before the Court, such as the expert report of Mr Chris Holland prepared for Sydney Metro (Determination of compensation acquisition of a leasehold interest at 40 Park Street, Sydney NSW 2000 VGC JT 00503 (“the VG’s determination report”)) which formed the basis of the compensation awarded to UTSG by the VG, and one of Ms Singh’s affidavits, the report was never separately served on Sydney Metro during the proceedings and Mr Goodyer was not made available for cross-examination. Given the untested nature of the content of his report and the fact that it was, at least in part, based on inaccurate financial information (discussed later in the judgment), no weight can be placed on it.

153. The following lay evidence was served on behalf of Sydney Metro:

1. two affidavits of Mr Anthony Hill dated 8 February and 1 March 2019 (“Mr Hill's February affidavit” and “Mr Hill’s March affidavit”, respectively). Mr Hill is a partner at Ashurst;

2. an affidavit of Mr Lachlan Wright dated 1 March 2019. Mr Wright is a solicitor employed by Ashurst. Mr Wright deposed that he contacted Dr Rajan Parhawk, who stated that he had never worked at 40 Park St;

3. an affidavit of Ms Nisreen Rabah dated 4 March 2019. Ms Rabah is employed by Ashurst in Dubai; and

4. two affidavits of Ms Kylie Wilson dated 22 and 28 August 2018. Ms Wilson is a solicitor employed by Ashurst. In her affidavits she deposed to the procedural history of the proceeding, much of which is described above.

154. Sydney Metro’s expert evidence comprised of:

1. the Ferrier report;

2. the Howman-Giles report; and

3. the first and second joint valuation reports,

all of which are analysed in depth below.

Ms Singh’s Evidence

155. While it is not necessary for the determination of the real issues in dispute to summarise, or even expressly refer to, all of the evidence relied upon by the parties, especially the lay evidence, it is nevertheless appropriate for the Court to examine in detail Ms Singh’s evidence given its centrality to the proceedings and given the highly unfavourable view that the Court has formed concerning the veracity of her testimony.

156. In Ms Singh’s May 2018 affidavit she relevantly deposed that:

1. UTSG was created in 2011 to develop an integrated healthcare practice in Sydney CBD. The trademark and branding “V Health Plus” was created for this purpose;

2. 40 Park St was chosen as a “flagship centre” because it allowed for seven day trading, had the capacity to house “the necessary IT infrastructure for a hub office” and was the subject of a “5+5 year lease and an informal agreement for first right of refusal to buy for about $17 million” (a claim she repeated in her June 2018 affidavit);

3. UGST relocated its business from 92 Pitt St and two other locations to 40 Park St. Commencing on 1 March 2013, the lease was initially between Gwynvill and UTSG Consortium;

4. the lease was transferred from UTSG Consortium to UTSG on 1 January 2014;

5. on 15 October 2015 UTSG formally launched the operations of the V Health Plus integrated healthcare centre at 40 Park St;

6. during the latter part of 2015 she was in negotiations with investors about the establishment of satellite centres in different geographic locations. There was no mention of any potential sale of V Health Plus to 5G;

7. she received notice of the acquisition on 8 April 2016;

8. in late 2016/early 2017 there was a negotiation to sell “part of” UTSG’s business to Tasly;

9. sometime around June 2017 she was able to obtain space at 280 Pitt St for the purpose of the relocation of UTSG’s business;

10. as of August 2017 she “restructured UTSG and transferred the relocated part of the practice to Dr Mirza Baig. It is my understanding that the practice at 280-282 Pitt Street operates in a significantly reduced capacity with only 2 doctors remaining including Dr Mirza Baig. I have no involvement in that practice”; and

11. it was her intention not to extinguish UTSG’s business but to relocate it instead.

157. In Ms Singh’s June 2018 affidavit she stated that:

1. following UTSG’s incorporation in April 2011, she found “getting finance for a start-up business difficult” so she obtained a line of credit from the Commonwealth Bank of Australia (“CBA”);

2. UTSG “did not engage staff directly and a number of Master Services Agreements (MSA), or similar contracts, were subsequently entered into in order to provide the necessary services to UTSG, and in the case of the medical and dental MSAs, the income stream”;

3. “UTSG derived its income as a percentage from the companies that provided the medical and dental services, V Health Solutions Pty Ltd and V Health Plus Awesome Smiles Dental Pty Ltd”;

4. by April 2016, after having been locked out of 40 Park St by Gwynvill, UTSG was “operating well” and business performance was “exceeding projections”;

5. UTSG was planning to expand its business. It was also planning the partial sale of its general practice to Tasly for $2 million to occur on 16 January 2017. Significantly, there was no mention of any sale to 5G;

6. on 15 June 2017 the relocation of part of UTSG’s business (the general practitioner service) to 280 Pitt St commenced. The premises at 280 Pitt St consisted of a lease of the rear of part of a chemist;

7. by August 2017 “the UTSG business” had reduced to less than 20% of its pre-acquisition operations. UTSG was therefore restructured and she informally “transferred the relocated part of the practice to Dr Baig for no consideration”, including relocating its “45,000 active patients’ database for essential patient continuity of care to 280-282 Pitt Street”. Patient information was given to Dr Baig and he in effect took over the premises and equipment at 280 Pitt St, and conducted his own medical practice business at that location; and

8. that because of TNSW’s refusal, until 9 February 2018, to release any of the advance compensation payment to UTSG following its departure from 40 Park St on 31 July 2017, UTSG lost opportunities to “relocate its flagship establishment”.

158. Ms Singh’s July 2018 affidavit was prepared pursuant to the orders of the Court made on 4 July 2018, namely, that the response to the NTP issued on 17 May 2018 be verified by a director of UTSG. In the July 2018 affidavit Ms Singh sought to explain the paucity of the documentary material produced in answer to the NTP as follows:

1. that UTSG used a specialist medical software program, “Best Practice Software” (“BPS”), which recorded appointments, patient details and amounts invoiced to Medicare. However, a number of the medical practitioners used a range of individual specialist software programs to support their practices in addition to BPS. There was no integration between those programs and BPS and she did not have possession or control over those individual software programs;

2. that she was able to obtain hard copy printouts of UTSG’s records from BPS on 30 September 2017, which she would produce, but that in respect of the most recent medical appointments the printouts only recorded V Health Plus’s revenue derived from the Medicate rebate. They did not show the total amount paid to V Health Plus arising from each consultation, that is, the revenue earned by V Health Plus;

384. Finally, during its closing submissions, UTSG repeatedly submitted that limited to no weight ought to be placed on the Howman-Giles report because it was based on incomplete materials compiled from unreliable sources. That is, because Mr Howman-Giles did not have a complete and accurate record of the company’s financial affairs, his report could not be relied upon. But the difficulty with this submission is that any incompleteness in, and unreliability of, the financial and accounting records that Mr Howman-Giles examined was the fault of UTSG, and not Mr Howman-Giles. As Mr Hill confirmed in his oral evidence (T1143:48-1144:26), Mr Howman-Giles was provided with all of the materials received by Ashurst after notices to produce and subpoenas were issued to UTSG and third parties in an attempt to obtain UTSG’s financial and accounting records. The material provided to Mr Howman-Giles included all of the information examined by Mr Mullins in the Mullins report. Mr Howman-Giles undertook as detailed a review of the information provided to him - much of which was contradictory, internally inconsistent, and incomplete - as was possible in all the circumstances (T1067:10-44).

UTSG Was Not Denied Procedural Fairness in the Conduct of the Proceedings

386. In its written closing submissions UTSG essentially made a complaint that it had not been afforded procedural fairness during the conduct of the proceedings.

387. This was said to be manifested, first, by the difficulties that it had encountered in running the trial absent legal representation, including in complying with directions for the preparation of its final written submissions. However, as the lengthy procedural history recited earlier in this judgment reveals, UTSG has had more than ample time to prepare for and conduct the hearing. As Sydney Metro noted:

1. the proceedings were commenced on 16 August 2017 by UTSG. The primary report relied upon by the company to quantify its claim, namely, the Mullins report, was completed on 29 March 2018. It remained the evidentiary plank of UTSG case throughout the hearing (T1203:09);

2. UTSG’s initial lay evidence was Ms Singh’s May 2018 affidavit. The points of claim were filed on 10 May 2018. Ms Singh has therefore had familiarity with the company’s claim for compensation for approximately 19 months prior to closing submissions;

3. the directions made in relation to the filing of final submissions were made on 1 August 2019, with the consent of UTSG. At no time prior to 12 December 2019 did UTSG raise any difficulty in complying with the timetable for closing submissions;

4. after the directions hearing on 1 August 2019, the hearing deliberately proceeded incrementally in clearly identified stages to ensure that there was adequate time for UTSG to prepare for each stage; and

5. UTSG was legally represented at various stages of the claim (albeit not at the final hearing) by multiple firms of solicitors between December 2016 to February 2017, 2 May 2017 to 10 July 2018, and 10 July to 25 October 2018. No evidence was adduced, other than bare statements from the bar table from Ms Singh and Dr Baig as to their alleged impecuniosity, indicating why UTSG was not legally represented from 25 October 2018 up to the conclusion of the hearing. In this context it should be noted that UTSG received payments totalling $1,923,150.60 as an advance payment from TNSW in two instalments on 8 February 2018 and 5 May 2018 ($916,472.58 was paid on 2 February 2018 following orders from the Supreme Court. The remaining amount of $1,028,599.32 was paid on 8 May 2019, of which $998,699.34 was paid into the Trust account of Stacks Lawyers, $10,566.68 to Hegartys Lawyers, and $19,363.30 to Mitry Lawyers, to satisfy a garnishee order and lien in respect of the payment of outstanding legal fees).

388. Second, UTSG submitted that it was “significantly compromised by the Court decision to reject” some of its evidence. The evidence comprised various affidavits and expert reports which were either not read by UTSG or were rejected by the Court. They have been discussed throughout this judgment (for example, the affidavits of Mr Hollins, Mr Frisken, Mr Fahad, and the reports of Mr Allsopp and Mr Watts).

389. Third, UTSG referred to the lack of legal and accounting qualifications of Dr Baig and Ms Singh who were required to cross-examine Sydney Metro’s witnesses. The Court was at all times cognisant of Ms Singh’s and Dr Baig’s lack of legal and financial qualifications and sought, wherever just and fair to do so, to make accommodation for this disadvantage. This included allowing significant additional time for the cross-examination of Dr Ferrier and Mr Howman-Giles. In any event, as Sydney Metro contended, both Dr Baig and Ms Singh were company directors who may be taken, in conformity with their statutory duties under the Corporations Act 2001, to have had the requisite familiarity with company financial statements. Ms Singh repeatedly claimed to have extensive business experience (T526:38-44; 529:04-06; 529:34-43) and a level of familiarity with accounting for small to medium enterprises (T415:50-417:24). There is nothing inherently procedurally unfair about a self-represented corporate litigant having, if it elects to do so, to cross-examine expert forensic accounting and business valuation witnesses.

390. Fourth, UTSG complained about having to make final oral submissions on 13 December 2019 without warning, suggesting, disingenuously, a lack of notice that the day had been fixed for its closing submissions. However, UTSG’s written closing submissions expressly referred to Court orders made on 1 August 2019 that fixed 13 December 2019 as the date for the closing oral submissions of UTSG.

Rental Arrears Owing by UTSG to TNSW for its Occupation of 40 Park St

391. Section 34 of the Just Terms Act provides as follows:

34   Former owner’s right to occupy land until compensation paid etc

(1)     A person who was in lawful occupation of land immediately before it was compulsorily acquired under this Act and to whom compensation is payable under this Act is entitled to remain in occupation until:

(a)     the compensation is duly paid to the person, or

(b)     the authority of the State makes (in accordance with any other provision of this Act) an advance payment of not less than 90 per cent of the amount of compensation offered by the authority, or

(c)     the authority of the State makes (in accordance with any other provision of this Act) a payment into the trust account kept under Part 3 of not less than 90 per cent of the amount of compensation offered by the authority,

whichever first occurs.

(2)     Any such person is entitled to remain in occupation of any building that is the person’s principal place of residence, or the person’s place of business, for 3 months after it is compulsorily acquired, even though the person has ceased to be entitled to remain in occupation under subsection (1). However, if the Minister responsible for the authority of the State is satisfied that the authority requires immediate vacant possession of land, the authority is entitled to immediate vacant possession even though the 3-month period has not expired.

(3)     The terms on which a person remains in occupation of land that has been compulsorily acquired under this Act are, in the absence of agreement, such reasonable terms as are determined by the authority of the State (including terms as to the rental to be paid and the restrictions on the use of the land). The Residential Tenancies Act 2010 does not apply to that continued occupation.

(3A)   Despite subsection (3), rent is not payable during the relevant 3-month period by a former owner who remains in occupation of any part of a building that is the person’s principal place of residence. A former owner does not include a person who only held a leasehold interest in the acquired land.

(4)     Any such unpaid rent or other money due to the authority of the State may be set off against the compensation payable under this Act.

392. On 13 January 2017 TNSW wrote to UTSG advising, among other things, that UTSG was entitled to remain in occupation (provided that certain statutory criteria were met) and that TNSW required vacant possession of 40 Park St no later than 12 April 2017 to meet the construction program for the project. UTSG was required to pay $31,402.45 per month plus GST of $3,140.25 to TNSW during UTSG's continued occupation of those premises after the date of acquisition (this was an amount that equated to the rent payable by UTSG to Gwynville under the lease).

393. UTSG continued to occupy 40 Park St under this arrangement until 31 August 2017. The rent due for that period is $183,123.64. It may be offset against any compensation awarded by the Court pursuant to s 34(4) of the Just Terms Act (see Roads and Maritime Services v United Petroleum [2019] NSWCA 41; (2019) 99 NSWLR 279 where the Court of Appeal upheld such a claim: at [64]).

394. The rental arrears can therefore be offset against UTSG’s claim for legal and valuation fees in the sum of $137,516.76.

395. It should be noted for completeness that Sydney Metro abandoned a claim at the hearing that UTSG be directed to repay the outstanding rent of $45,606.88 owed to it. Had this argument been pursued it would have given rise to an issue as to whether the Court had power under the Just Terms Act to make such an order (cfBrock v Roads and Traffic Authority of New South Wales (No 2) [2012] NSWLEC 114 at [57]-[90]).

Conclusions on UTSG’s Claim for Compensation

396. The Court’s findings and conclusions on the compensation claimed by UTSG under the Just Terms Act are set out in summary form in the table below:

Head of Compensation Claimed by UTSG Under the Just Terms Act

Amount of Compensation UTSG Entitled To

s 59(1)(a) and (b)

s 59(1)(a) legal fees

$85,596.76

s 59(1)(b) valuation fees

$51,920.00

s 59(1)(c) and/or (f) Relocation Costs

Wasted relocation costs

$Nil

Future relocation costs for the business:

• relocation costs of the fitout of premises

• retained plant and equipment

$Nil

s 59(1)(c) and/or (f) Relocation - Lost Profit

Past loss

$Nil

Future loss (assuming at least an 18 month loss)

$Nil

In the alternative, s 59(1)(c) Extinguishment Relocation Costs and s 59(1)(f) Extinguishment Lost Profits

Extinguishment lost profits

Past loss and loss in perpetuity

$Nil

s 59(1)(f) Supreme Court Proceedings

$Nil

$137,516.76

Less rental arrears in the amount of $183,123.64 under s 34(4)

Total Compensation = $NIL ($45,606.88 owing to Sydney Metro)

397. Therefore, the compensation payable to UTSG under the Just Terms Act for the compulsory acquisition of its leasehold interest may be determined as follows:

1. $137,517 (rounded up) for legal costs and valuation fees pursuant to s 59(1)(a) and (b) of that Act; and

2. $nil for all other heads of compensation claimed.

398. However, as explained above, Sydney Metro is not required to pay UTSG compensation in the sum of $137,517 because pursuant to s 34(4) of the Just Terms Act Sydney Metro may offset that amount against the rent owing by UTSG to it in the amount of $183,123.64.

399. Accordingly, no compensation is payable to UTSG.

Costs

400. In light of the nil compensation awarded to UTSG once the set off of the rental arrears is made, and given the manner in which UTSG, through Ms Singh in particular, conducted its claim, Sydney Metro seeks not only its costs of the proceedings, but an order that Ms Singh (not Dr Baig) be jointly and severally liable for the payment of Sydney Metro’s costs.

401. UTSG resisted the making of such an order and submitted that, to the contrary, Sydney Metro ought be liable to pay for its costs of the proceedings.

402. In determining this question it is convenient to deal with the issue in two steps: first, whether or not an award of costs of the proceedings ought to be made in favour of Sydney Metro; and second, if so, by whom should it be paid.

Applicable Legal Principles Concerning Costs in Compulsory Acquisition Cases

403. Section 98(1) of the Civil Procedure Act 2005 (“CPA”) provides as follows (emphasis added):

98   Courts powers as to costs

(1)     Subject to rules of court and to this or any other Act—

(a)  costs are in the discretion of the court, and

(b)  the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c)  the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

404. Because it has been recognised that the position of an applicant in compulsory acquisition cases is different to ordinary litigants, the legal principles governing the exercise of the Court’s discretion to award costs is somewhat bespoke.

405. In Dillon v Gosford City Council [2011] NSWCA 328; (2011) 184 LGERA 179 Basten JA described the unique position of claimants in compulsory acquisition matters as follows (at [70]-[72]. See also Roads and Maritime Services v United Petroleum Pty Ltd [2019] NSWCA 41; (2019) 99 NSWLR 279 at [67]):

70   In other respects, however, the appellants' propositions may be accepted. They support the proposition that a claimant for compensation in respect of a compulsory acquisition should usually be entitled to recover the costs of the proceedings, having acted reasonably in pursuing the proceedings and not having conducted them in a manner which gives rise to unnecessary delay or expense.

71   That approach is also consistent with the absence of any general presumption that costs should follow the event: the owner who has been compulsorily dispossessed is entitled to take reasonable steps to seek the judgment of the Court in respect of the adequacy of any compensation offered.

72   Whether steps taken in maintaining proceedings are reasonable will depend upon the circumstances of the particular case. These may include a comparison between the positions adopted by the parties at the commencement of proceedings and the final outcome. To the extent that a claimant obtains less than the valuation provided by the Valuer-General, the claimant has been unsuccessful in the litigation. That will be a factor to be taken into account, but the weight given to that factor may depend upon the extent of the failure. The Court may also take into account the time and expense incurred in relation to specific items. Beyond such general statements, it is unhelpful to go, lest the very generality of the discretion be thought to be fettered in some way. In short, the purpose of an award of costs must be taken into account, namely to compensate the party for expenditure incurred in the course of litigation; the nature of the litigation and the reasonableness of the conduct of the litigation are central considerations.

406. The applicable legal principles governing an award of costs in this category of proceedings were summarised recently by the Court of Appeal in Croghan v Blacktown City Council [2019] NSWCA 248; (2019) 238 LGERA 439 (at [15]-[18] per Meagher JA):

15   However as Wells J explained (at 134) in Minister for Environment v Florence (1979) 21 SASR 108, the position of a claimant in compulsory acquisition compensation proceedings is different from that of a plaintiff in ordinary litigation. That claimant is given the right to claim compensation but has no choice as to whether to make a claim to enforce that right or not. His Honour continued:

Upon an ordinary claim in the general jurisdiction it is, generally speaking, obvious who has won and who has lost, and correspondingly clear why costs usually follow the event. Upon a claim for compensation for land compulsorily acquired, it is not, generally speaking, appropriate to speak of one party as having won; compensation is awarded to one who has already been given, by statute, the right to receive it. It is therefore as just to say of the latter sort of case that the claimant ought, in the absence of special circumstances, to receive his reasonable costs of obtaining the compensation that is, ex hypothesi, his due as it is to say of the former sort of case that prima facie costs follow the event in favour of the party who has won.

16   Similar observations were made by Wilcox J of the compensation claim made in Banno v Commonwealth (1993) 45 FCR 32 at 51:

But this is not ordinary litigation. The relationship between the parties giving rise to the litigation did not arise out of their mutual desire; it arose because of a unilateral decision of the Commonwealth to acquire the applicants' land in order to satisfy a perceived public need. The acquisition left the applicants in the position of either accepting the Commonwealth's assessment of the proper compensation or of having the Court rule on its adequacy.

17   The Just Terms Act confers a right to compensation for compulsorily acquired land (s 37), guarantees that the amount of compensation will be not less than market value assessed under that Act (ss 3, 10) and provides for the former owner to be given an offer of compensation determined by the Valuer-General and to be informed of its right to object to the amount offered (ss 41, 42, 43 and 47). That right is exercised by lodging an objection with the Land and Environment Court which must then hear and determine that claim (s 66); and in proceedings to which the rule that costs follow the event does not apply.

18   Accordingly, as was observed in Dillon (at [70], [71] per Basten JA), the relevant principles provide that the “owner who has been compulsorily dispossessed is entitled to take reasonable steps to seek the judgment of the Court in respect of the adequacy of any compensation offered”; and, consistent with there being no general presumption that costs should follow the event, that owner is usually entitled to recover the costs of the proceedings “having acted reasonably in pursuing [them] and not having conducted them in a manner which gives rise to unnecessary delay or expense”. Applying these principles, in Brock v Roads and Maritime Services [2012] NSWCA 404; (2012) 191 LGERA 267 this Court held at [95] – [99] (Tobias AJA) that the claimant was entitled to her costs of the proceedings at first instance, she having acted reasonably in seeking the judgment of the Court in respect of the adequacy of the respondent’s offer based on the Valuer-General’s determination, and notwithstanding that she had obtained less than the amount of that statutory offer.

407. In other words:

1. first, the purpose of an award of costs is to compensate a party for expenditure incurred during the course of litigation;

2. second, the Court has an unfettered discretion to award costs;

3. third, however, unlike other civil matters, because an owner who has been compulsorily dispossessed is entitled to take reasonable steps to challenge the adequacy of any compensation offered, there is no general presumption that costs follow the event in Class 3 compulsory acquisition claims under the Just Terms Act; and

4. fourth, as a consequence, the owner is usually entitled to recover the costs of the proceedings even if that the owner has obtained less than the amount of the statutory offer by the V-G, provided that the owner has acted reasonably in pursuing the proceedings and not conducted the proceedings in a manner that gives rise to unnecessary delay or expense.

408. Thus a dispossessed owner who pursues a “vexatious, dishonest or grossly exaggerated claim” is likely to attract a finding by the Court that the owner has acted unreasonably in pursuing the proceedings, and therefore, is likely to attract an adverse costs order (Brock v Roads and Maritime Services (No 3) [2012] NSWCA 404; (2012) 191 LGERA 267 at [97] per Tobias AJA).

409. In light of the conduct of its claim for compensation, and the result, it is plain that UTSG has acted wholly unreasonably in pursuing the proceedings. Moreover, it conducted the case in a manner that gave rise to unnecessary delay and expense. What ought to have been a reasonably straightforward claim with the sort of expert evidence that is routinely dealt with in this class of proceedings in this Court became anything but.

408. The following aspects of the conduct of the proceedings make it therefore appropriate that UTSG pay Sydney Metro’s costs:

1. as the procedural chronology set out earlier in this judgment reveals, UTSG repeatedly failed to comply with directions of the Court, which had the result of delaying the commencement of the final hearing and resulted in unnecessary expenditure by Sydney Metro. For example, the Court found in August 2018 that the length and volume of interlocutory applications in the proceedings were “characterised by UTSG’s continual default and non-compliance with court orders” (UTSG Pty Ltd v Sydney Metro [2018] NSWLEC 128 at [34]). The dates originally listed for hearing in August 2018 were vacated because Mr Mullins withdrew his expert report and that “the withdrawal of his expert opinion was caused by the failure of UTSG to properly instruct and brief Mr Mullins” (UTSG at [54]). UTSG also repeatedly failed to comply with its obligation to produce documents (UTSG Pty Ltd v Sydney Metro (No 2) [2018] NSWLEC 199 at [25]-[38]). This continued through the proceedings (UTSG Pty Ltd v Sydney Metro (No 5) [2019] NSWLEC 107 at [15]);

2. the amount of compensation determined by the VG and offered to UTSG, namely, $2,136,834, was not only premised on the misleading financial information contained in the Goodyer report, it was manifestly excessive in light of the evidence now before the Court. It was not in any event accepted by UTSG. UTSG expressly declined to accept compensation in this sum at various times during the hearing;

3. UTSG’s claim for compensation continually changed resulting in wasted costs for Sydney Metro as claims were abandoned and added. The initial quantification of its claim for compensation in its points of claim filed on 10 May 2018 was approximately $19 million for relocation, or in the alternative, $48 million for extinguishment. During the hearing it abandoned its claim for business extinguishment. By the time it made its closing address on 13 December 2019 its claim was in excess of $45 million for relocation. Such conduct was unreasonable;

4. the various amounts of compensation claimed by UTSG were never supported by credible reliable evidence. At all stages of the proceedings the amount of compensation claimed by UTSG was completely untenable;

5. undeterred by a paucity of evidence, and in the face of cogent and detailed lay and expert evidence adduced by Sydney Metro, UTSG continued to maintain its position throughout the proceedings;

6. as detailed in this judgment, Ms Singh sought to advance UTSG’s claim for compensation by relying on fraudulent and doctored documents, by inventing fictitious entities, and by lying about important matters both in her written and oral evidence;

7. UTSG attempted to rely on evidence that was unfairly prejudicial to Sydney Metro or caused costs to be wasted insofar as the evidence was either served late (such as the additional material served by UTSG on the first day of the hearing, the report from Njoro & Associates concerning the Business Sale Agreement attached to a supplementary report of Mr Watts dated 1 April 2019, or the material that UTSG sought to tender after its case had closed on the third last day of the hearing (Ex F: T1257:24-26)), was withdrawn by UTSG (such as the evidence of Mr Frisken, Mr Hollins and Mr Dunn), or the relevant witnesses were not available for cross-examination (for example, Mr Allsopp, Dr Shakoor and Mr Fahad); and

8. the scandalous and baseless accusations UTSG continually made throughout the hearing impugning the character and integrity of the legal representatives of Sydney Metro. For example:

Person/Entity	Accusation	Transcript reference
Ashurst	selective reliance on, and manipulation of, evidence in tender bundle	T244:18-246:15
	was deliberately misleading	T560:8-12
Mr Lancaster SC	engaged in intimidation	T331:39-40; 425:21; 515:05-07
	asked insulting questions	T364:44-45; 365:30; 370:14-16; 374:28-34; 412:02; 412:47-48; 505:01-14
	falsely attributed words to Ms Singh	T365:26
	“conveniently” prevented witnesses from giving evidence	T498:50-499:01
	made “unacceptable” or unfair accusations	T553:48-554:03; 560:47-50
	misled the Court	T564:23-24
Mr Eastman	lied to the Court	T822:49-823:03; 827:09-16; 850:36
	misled the Court	T821:31-34; 826:10-15; 849:12; 851:11-12
	deliberately removed material from Ex A while it had been uplifted for photocopying purposes	T1260:28-30; 1261:09-1263:01; 1322:19-1323:07
Counsel for Sydney Metro	engaged in intimidation and deceitful conduct	T248:46-249:21
	“playing a very manipulative game”	T838:39-41

411. For all these reasons it is appropriate that UTSG pay Sydney Metro’s costs of the proceedings.

Liability of Ms Singh as a Non-Party for Sydney Metro’s Costs

412. The power to order costs pursuant to s 98(1) of the CPA includes the power to order that those costs be payable by persons who are not a party to the proceedings (PM Works Pty Ltd v Management Services Australia Pty Ltd trading as Peak Performance PM [2018] NSWCA 168 at [22]-[26] per Leeming JA). The power is, however, to be exercised only in exceptional cases. This is one such case.

413. The principles governing the exercise of the power to make costs orders directed to non-parties were articulated by the High Court in Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 (at 192-193) and restated and endorsed by the Court of Appeal in FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 (at [198]-[214] per Basten JA), PM (at [30]-[35] per Leeming JA) and Brand2Content t/as Franchise Works v Dalby [2019] NSWCA 16 (at [6]-[17] per Simpson AJA).

414. As set out in Brand2Content they are as follows (at [11]):

11   In FPM Constructions v Council of the City of Blue Mountains [2005] NSWCA 340 Basten JA, with whom Beazley JA, as her Honour then was, and Giles JA (in this respect) agreed, identified five criteria for the exercise of the jurisdiction that emerge from cases in which orders for payment of costs by non-parties have been made. In FPM the court was concerned with s 148B of the District Court Act 1973 (now repealed), the equivalent to s 98(1). At [210] Basten JA stated the criteria as:

“(a)     the unsuccessful party to the proceedings was the moving party and not the defendant;

(b)      the source of funds for the litigation was the non-party or its principal;

(c)      the conduct of the litigation was unreasonable or improper;

(d)      the non-party, or its principal, had an interest (not necessarily financial) which was equal to or greater than that of the party or, if financial, was a substantial interest, and

(e)      the unsuccessful party was insolvent or could otherwise be described as a person of straw.”

415. The criteria is neither exhaustive nor a checklist and not all of the factors need be present for the Court to make the order (May v Christodoulou [2011] NSWCA 75; (2011) 80 NSWLR 462 at [96] and [111], Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [80] and [81] per Gleeson JA and Brand2Content at [12]-[13]). What must be emphasised is that the exceptional jurisdiction to make a non-party costs order must only be exercised where, in the circumstances of the case, the interest of justice require that such an order be made (Heath at [80] and Yu v Cao [2015] NSWCA 276; (2015) 91 NSWLR 190 at [137] and [139]).

416. Careful attention should be directed to the conduct of the party involved in the litigation and the nature of any interest they have in its outcome or in the subject-matter of the proceedings. As Basten JA noted in FPM (at [214]) it is often the case that a non-party, especially in the case of an unrepresented company, will be active in the conduct of the litigation and obtain some direct or indirect benefit from its success (Heath at [81]).

417. In the case of corporate litigants, care must be taken in the exercise of this exceptional power insofar as company officers are concerned, because “were it otherwise, the corporate veil would, in effect, be nullified at the very point at which it provides protection against personal liability for the shareholders and directors. The carefully crafted exceptions to the principle would overtake the principle itself were that the case” (FPM at [206] per Basten JA).

418. In Brand2Content Simpson AJA made the following apposite observations in respect of corporate litigants (at [14]-[17]):

14   Each of the five criteria identified by Basten JA needs to be carefully evaluated lest, in the circumstances of the particular case, it be given weight to which it is not, on proper evaluation, entitled. There may be good reasons, for example, for a company officer to provide funds for litigation which a corporate litigant is unable to provide. It will frequently be the case that an officer of a company who takes responsibility for the management of the litigation is also the ultimate, or an ultimate, beneficiary of the litigation in the event that it is successful. That is certainly so where the director is a shareholder. Although orders are not infrequently made where the party to the proceedings is a company and the non-party sought to be made liable for the costs is a director or other officer, or shareholder, the availability of orders is not confined to corporate litigants. Orders can equally be made against an individual litigant in appropriate circumstances. And further, criterion (d) expressly acknowledges that the interest held by the non-party sought to be made liable need not be financial.

15   It is also to be recognised that, in the case of every corporate litigant, some one or more officers of the company must play an active part in the litigation, and make necessary decisions.

16   For these reasons, care needs to be taken where the corporate litigant is a single-director or a small company or where all or the majority of the shares are held by one or two individuals. In those cases, it is a practical necessity that the, or a, director or shareholder has a personal (often financial) interest in the outcome, is actively involved in the pursuit of the litigation and, sometimes, is required to provide funding to enable the litigation to be maintained. None of these circumstances alone, nor any combination of them, is necessarily sufficient to warrant an order.

17   “Mechanical” application of the criteria, against which Gleeson JA cautioned in Heath v Greenacre Business Park Pty Ltd [2016] NSWCA 34 at [81] (as had Basten JA in FPM) might suggest that an order ought to be made, where, in reality, the criteria (or some of them) are satisfied by reasons of the practical necessities associated with the corporate structure.

419. In May the Court of Appeal allowed an appeal against an order that a director who had appeared as an advocate for his company pay the costs of the successful party. The appeal was upheld on the basis that it was not sufficient to establish that the company had been unsuccessful, that the director had signed an acknowledgment that he might be liable to pay some or all of the costs of the proceedings, and that the conduct of the litigation by a director who was not legally qualified had been less than desirable and that the case had been prolonged by his conduct (at [100]-[101]). Nevertheless, Sackville AJA made the following observation (at [102]):

102   Although a non-legally qualified director does not owe the same duties to the court as a legal practitioner, it is no doubt correct that the manner in which the director conducts legal proceedings on behalf of a company could justify a costs order against him or her personally. If, to take an example already given, the director repeatedly and flagrantly ignores court directions, thereby prolonging the proceedings and causing the other party to incur substantial and irrecoverable costs, a non-party costs order may well be appropriate.

420. His Honour’s remarks were subsequently endorsed in PM (at [37]).

421. In Blazai Pty Ltd v Maclarens (No 2) [2013] NSWSC 31 Adamson J made a costs order personally against the sole director and shareholder of an unsuccessful plaintiff in circumstances where the director had fabricated documents, destroyed documents, given false evidence in affidavits and orally in the proceedings, and where the plaintiff’s case was substantially based upon the director’s evidence (at [29]). In finding that his conduct was unreasonable and improper, her Honour quoted from Shepherdson J in Naomi Marble and Granite Pty Limited v FAI General Insurance Company Limited (No 2) [1999] 1 QdR 518 (at [33]):

33   Mr Loiero's conduct is, in my view, of similar order to that of Ms Hunter, the plaintiff's managing director in Naomi Marble, of whom Shepherdson J said, at 546-547:

In my view, where a person who is not a party to an action but who is in a position such as that occupied by Ann Hunter where as director she was in a position to manage and control the plaintiff and where that person improperly prosecutes what that person must have known was a false and fraudulent claim and where that person garnishes it with many assertions which to that person's knowledge are false and in so doing uses the proceedings of the Court as an instrument of that person's fraud and attempts to deceive the Court then it is my view that the Court would be failing its duty if it did not treat the case against that person as a non-party as exceptional and deserving of an order requiring him or her to pay the successful party's costs on an indemnity basis.

422. Applying the principles referred to above to the facts as found in the present case it becomes apparent that it is appropriate to make a non-party costs order against Ms Singh:

1. Ms Singh is a director and shareholder in UTSG, the moving party which was wholly unsuccessful in the proceedings;

2. having said this, it is not known if the source of the funds for the litigation was Ms Singh;

3. nevertheless, on any view, the conduct of the litigation was unreasonable and improper. Ms Singh was largely responsible for UTSG persistently failing to comply with Court orders which caused repeated delay and unnecessary costs, she fabricated documents (the Business Sale Agreement and the doctored email) and other evidence (the existence of entities such as LPAA, Cara Adams, Jessica Cheung and TaxSavvy), and gave evidence that she knew to be false both in her affidavits and orally;

4. Ms Singh has a substantial interest in UTSG and in the outcome of the proceedings. She was, as she described herself, the “architect” of UTSG’s business (T1196:11). She is one of two directors of UTSG and is a shareholder in the company. Having said this, the evidence did not establish the extent of her financial interest in the company; and

5. as the evidence of Dr Ferrier demonstrates (based on the evidence of Mr Howman-Giles), UTSG had negative maintainable earnings as at November 2016 and there was no basis for concluding that it had any valuable goodwill as at the acquisition date. Even Mr Mullins agreed that “there was no residual value in the remaining business beyond 31 August 2017”. The most recent bank account statement for UTSG (attached to Ms Singh’s July 2018 affidavit) revealed that the company account was closed on 27 March 2018. Since May 2017 UTSG had a negative balance of $367.94. In other words, UTSG is insolvent and can otherwise be described as an entity of straw.

423. Ms Singh sought to distance herself from the decision to commence the proceedings and any decision-making during the proceedings. She cannot, however, escape the fact that she was a director and the guiding mind of UTSG at the commencement of, and throughout, the proceedings. To the extent that it was suggested that the decision to commence the litigation was that of her legal representatives at the time (Stacks), absent any evidence to the contrary, it is inconceivable that the Class 3 application would have been filed otherwise than on the specific instructions of Ms Singh. In any event, Ms Singh has either conducted the matter herself or has had direct personal involvement in it since UTSG became unrepresented on 25 October 2018.

424. Mindful of the exceptional nature of this jurisdiction and the admonishment against applying the criteria in FPM mechanically, in all the circumstances of this proceeding it is my considered opinion that the interests of justice require Ms Singh to pay Sydney Metro’s costs in the manner proposed by the acquiring authority.

425. Because Sydney Metro did not seek that any of the costs be paid an indemnity basis, I will not deal with this issue.

Orders

426. In conformity with the reasons given above, the formal orders of the Court are:

1. the compensation payable to the applicant under the Just Terms Act for the compulsory acquisition of its leasehold interest the subject of these proceedings is determined as follows:

1. $137,517 (rounded up) for legal costs and valuation fees pursuant to s 59(1)(a) and (b) of that Act; and

2. $nil for all other heads of compensation claimed;

2. the respondent is not required to pay compensation to the applicant in the sum of $137,517 determined above in order (1)(a) because pursuant to s 34(4) of the Just Terms Act the respondent can offset the compensation payable against the rental arrears owing by the applicant to the respondent in the amount of $183,123.64;

3. the applicant is to pay the respondent’s costs of the proceedings;

4. Ms Simran Roselyne Singh (also known as Ms Roselyn Singh) is jointly and severally liable to pay the respondent’s costs of the proceedings as ordered above in order (3); and

5. the exhibits may be returned.

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Amendments

04 June 2020 - Typographical error corrected.

Decision last updated: 04 June 2020